Pricer AB

STO:PRIC B

Earnings Call Analysis

Earnings Call Transcript 2023-Q4

[Magnus Larsson, executive]

Hello, everyone. This is Magnus Larsson, I'm CEO of Pricer. And with me today, I have Susanna Zethelius, our Group CFO. And we will present the results of the fourth quarter 2023 for Pricer. I'm delighted that you could join us today, and I hope you will find this an interesting session. As always, at the end, there will be a Q&A session. So any questions, please send them to us, and we'll be happy to address as many as possible.So as always, I would like to start with our vision. And our vision is to be retail's first choice in in-store automation and communication. And what does that actually mean? Well, it means that we are the critical part for retailers when they want to digitize their stores and do the in-store digitalization. But in essence, what does it actually mean in more practice? How do we help our customers? So we can say that there are 3 main ways for us to actually support our customers to reach their business objectives.And the first one is the -- you can say it's the foundation of what we've done for -- in Pricer for many, many years. It's actually to help our customers to be more efficient in the work they do in the store. And it's basically through helping them to do more with less staff, which is, of course, important now when we see inflation. There is an increased number of price increases, requiring staff interaction to actually -- if you have paper labels to do the price updates. But it's also to make sure that you can do more with less staff if you have a situation where the wages are increasing, it could also be that you can use the system to help store staff that is newly arrived at the store and then have less capability and competence. So this has been the traditional win and quite a few of the customers that we have. This was the first different couple of use cases that they -- that we're using.The second thing that we're actually helping our customers with, and that's growing their revenue. And this is something we've been working with increasingly over the last years. And with the launch of digital signage, it's been more apparent. We simply help them to do promotions in new and appealing ways to interact with the customers and make sure that whatever happens in the store that we help them to make the experience, the shopper experience more appealing, but also more inspiring that will hopefully then generate additional purchases in the store.And I touched upon it, we also help with improving the shopper experience. And that's, of course, not only the advertisement in the store, but it could be helping to inform customers about the content of a specific product. It could be about inspiring them when it comes to recipes or it could be other kind of promotion that will actually improve the customer experience in the store. So these are the 3 key areas. And it's -- I would say, central for the work that is being done in the stores as part of the store digitalization.I've had some questions also on which are actually our customers and how do we sell. And I try to outline a few different categories here on this slide. We appeal to the global grocery giants. Here, I think Carrefour is a really good example, where you have this large Tier 1 global player within grocery. They have selected us as their only an exclusive vendor for all their stores. So right now, there's been a focus on the European business, but we also have a contract that actually includes all the global franchisees and master franchisees.We have leading grocery cooperatives like the S-Group in Finland, where we recently got a contract from them to actually deploy now 300-plus stores out of 1,000 in Finland. They have also selected us as the key vendor of choice. Do it yourself retailers, we have Brico Depot that we actually won and announced in -- during the spring. But now that we have actually can communicate more openly about. They're part of the Kingfisher group, which is a big UK based do-it-yourself chain. We also have Castorama in [ France ] earlier.In North America, we have 2 giants. We have Canadian Tire, which could be described as general retail. Here, we've been delivering close to 20 million ESLs to date. And we have Best Buy, which is home electronics giant in both U.S. and Canada, where we have done more than 1,100 stores with Pricer ESLs. So you could say that we actually sell to cooperatives where actually this is the franchisee, so we might have a headquarter contract, where the franchisees have the right to use it. It could be that we send to retailer -- PLUS Retail which is also cooperative, but where you have a centralized procurement, it could be to Carrefour that actually have centralized procurement for their own -- operated and owned stores, but where they also have franchisees that have the frame agreement to rely on.These different business models with either centralized purchase for franchisees or individual purchase, frame agreements, or actually direct purchase, all call for different kind of revenue models. That's actually why we cannot always actually give you a full number for an order. We can say that we have a frame agreement. We know there is a plan, but we cannot communicate the full expected revenue since it will come in batches or even on individual store level, or sometimes we can actually do the full deployment because there is a firm commitment even from a franchisee organization like we did with PLUS Retail a few years ago, or from another independent [ vendor ].So these are the different models. And this is also -- sometimes I get questions about the way we get our orders. This can explain some of the lumpiness where we can expect in order to come in certain month and then it would actually come in 1 or 2 months later. It doesn't mean that there has been any hiccup or any problem with the customer, it just means that, that has been the nature of the way the customer choose to place their orders. And with these customers, also the corporates, we are having constant dialogues on the future plans. So if you take S-Group as an example, here, we have together with the project team, planned the entire deployment now for 2024. So even though we cannot communicate all the details, we actually know exactly when we do expect all the revenues from this contract. So I hope this is helping to better understand what we do.Then if we look at Pricer in brief, for those of you that might not have followed us in detail, we have been known for our electronic shelf labels, which we have done more than 300 million deployments. We have some 25,000 stores across 70 countries. We are roughly 200 employees. On the [ SaaS ] service today, we have more than 3,000 stores on Plaza, and we have more than 25 million labels that are actually managed on the Plaza server or the Plaza SaaS subscription. And this is something we will speak more about not only today but also into the future on how this business is developing.So business outlook. I have 5, you could call it, trends or things that I see are shaping the market and shaping the -- our expectations on the years to come -- on the year to come. One thing that I spoke about already in Q1 last year, but I feel it's a trend that I see growing. And I see I get more and more dialogues and more and more customers like this. We have a number of retailers that have been -- have large deployments or they've done thorough piloting with radio-based ESL solutions. And they have not been entirely happy with the performance of the systems. And I think what we see is a very clear connection to the way that retailers now use the ESL system.The inflation requires more price changes. Every single price change will require that you have the capacity in the system to do it when you want it immediately. You do not really want to wait for it. And you want to make sure that there should be no limitation in the capacity of the system to actually do all these price changes. And then this is actually what they don't get. They ask about something that is retail grade in terms of reliability and in terms of store performance. And what we can do and what we now hear from many of the customers that we are contracting and we are in discussion with, is that they said that yes, we have done radio, but we need something different. We need the reliability. When we want an ESL to flash or when we do -- want to do a price update, we want to make sure that it happens now, not later.And we want to make sure that when we have an expectation on the lifetime and on the quality and the look and feel of the display and the brightness, we want to make sure that we also have that during the expected lifetime. And this dialogue is something we're having in -- with quite many customers right now.In the U.K., you might have seen the announcement we did now in the beginning of January. It's the first chain-wide deployment in the U.K. for us. It's with O&CC, Outdoor and Cycle Concepts. They are forerunners within outdoor clothing and outdoor products. Really happy to do this. They have been really on the front when it comes to using floor color, using our new HangTAG ESL and of course, using our Plaza system. I see that this is the first of, hopefully, more to come or several deployments in the U.K. market. It's an extremely lively market where we see that most retailers now are discussing ESL. It's, of course, triggered by inflation, but it's also triggered by the recent directive that minimum wages have to increase and also with quite hectically. So I can see that there is an acceleration actually on the discussions and needs in the U.K. market.Another thing that I can see more and more at the NRF Show that we had in New York, several discussions. We have had several queries. We have been in dialogue with existing customers also on what we can do to minimize the environmental impact of our products. And actually, not only our product, this is something that retailers across the board is actually asking about from their retail vendors. It's, of course, the European directives on how to actually do the communication on environmental impact as part of the legal reporting coming. But it's also a wish to do better. And here, I think that those retailers that actually can address this need will actually have really good opportunities to get good business and get additional business into the future. It might even be so that being -- having a good responsibility for the environment and actually addressing ways of decreasing the impact will be a requirement into the future.Business outlook in the U.S. As communicated in the report, we have seen delays in North America. In Canada, we've seen temporary delays. In the U.S. market, we have seen delays for potential projects that we were planning for and hoping we would get in 2023, and we can see that they are now delayed into the future. We are constantly working with the customers. We're looking both with our existing customers but also with a lot of new potential customers. And what I can confirm both from the NRF, from the engagements that I've had with customers outside the NRF, and of course, also our sales team in the U.S. is that there is a clear and tangible interest. And our expectation on the U.S. market is actually the same as it was last year and the year before. So we see that this market is about to explode and we see the signs very clearly now.Another trend that I hope to see much more of, of course, is that many retailers that haven't had ESL deployed at all or very, very small amounts before. They are now looking at doing either a full chain deployment or a large-scale deployment within their chain. And here, I think that the SOK contract is really a good example. They -- or the [indiscernible] example, in Finland is a good example. They did not have ESL before or they had some pilots. And now they actually plan to do more than 300 stores.O&CC is the same thing. They actually decided to deploy across the entire estate in the U.K. market. And we have more of these discussions. And it's interesting. It used to be that you did a pilot and you did a handful and then you did 10 or 20 or 30 stores and then you would actually gradually do more. But this seemed to have changed. And that's, of course, a development that me and the team are welcoming fully.Before I hand over to Susanna, of course, I want to do my normal bragging slides. Really happy for the Outdoor and Cycle Concept win that we got. So a big thank you to you. Same for StrongPoint and Felleskjopet, who brought us now a deal for another 21 stores in Norway and Norway being a mature market. This is actually something that surprised me last year that we can see that on some markets where we did expect a moderate growth, also here in France, we can see that we -- I'm happy to say that we were actually wrong, there has been a lot of upside also on the mature and established markets.Brico Depot, we were announced it during spring. And now in -- during Q4, we actually could say that it's Brico Depot, and it's a 120-store deployment. That's actually now -- I think it's even completed now. So it's been a very good thing.So having said all that, I would like to hand over to Susanna to cover the market development.

[Susanna Zethelius, executive]

Thank you very much. So looking a bit more at the numbers from the report. And you've seen the net sales figures, and you've heard them. So it's a record high number. It's SEK 801 million for the quarter, up 15% versus same quarter last year. Order intake, we were at SEK 668 million, up 3% versus last year. And then looking at the regions, starting with Europe, growth was -- or continued to be very strong in the fourth quarter. Net sales was up 49%, order intake, up 35%. The key market on the sales side was France with, for example, like Magnus mentioned, Brico Depot, who accelerated the installation pace in the fourth quarter. We also saw orders coming in from SOK in Finland and a number of those orders were already installed as well in the fourth quarter.Looking at order intake, the strongest growth in the region was seen in Norway with the new customer also mentioned previously, also strong growth we've seen in France. And then looking at region Americas, year-on-year net sales was down 24%, order intake down 41%. So this is due to the fact that our Canadian customers have slowed down their rollout pace, at this point in time, and it hasn't been compensated at this point with new customers or other orders. If we look at the U.S. and Latin America, they are at similar levels to last year. And then APAC, more or less in line with last year on net sales, but a pretty strong growth on order intake, so up 68%. And there, the key growth factor is Eastern Europe and in particular, Romania. Good. And there you have some notes as well, and I'm moving to the next slide.So here we have order intake, net sales and gross profit. I already partly covered order intake and net sales. So just pointing out here, you have a line showing as well the order backlog over the bars showing order intake and order backlog landed on SEK 394 million in the fourth quarter, so lower than previous quarters, but this is due to the fact that we had a very high pace of rollouts in the fourth quarter. And if you look historically as well, you can see this pattern is shown previous years as well. So lower numbers in Q4 and then boosting back the rest of the year. And then worth mentioning as well on order intake and net sales that weak SEK that we have seen in 2023. If you compare with last year, this has given a positive impact on order intake and net sales.And then gross profit. So, we are on 17.7% for this quarter, so slightly down versus third quarter, but clearly up versus the 15.5% that we had a year ago. We do see the cost reductions on component prices, giving further impact now in the fourth quarter. But then at the same time, we had a write-down of inventory of SEK 5.5 million, which gave a negative one-off effect in the quarter. And if we adjust the gross margin for that, it would be at 18.4%. So we would say that the underlying gross margin is 18.4%, which is actually higher than the third quarter.Yes. And then looking at operating profit or EBIT and net profit, and of course, the revenue growth, the gross margin improvements versus last year is driving the improved profitability. But then as you saw in December, we launched the cost savings program. which is expected to render annual cost savings for 2024 of around SEK 50 million. And we have taken restructuring cost of SEK 19 million affecting the fourth quarter. And we have also made a write-down of capitalized R&D projects of around SEK 15 million. So that is, of course, affecting the result in the fourth quarter. And if we adjust for those items affecting comparability, the adjusted operating profit is SEK 54.2 million, and the operating margin is 6.8%. And looking at those numbers and comparing them with the historical numbers, we do actually have a very strong result in the fourth quarter. The margin is the best that it has been for 2 years or so.Then down to net profit, we have the interest, the factoring expenses that is impacting net profit in the form of financing cost. Roughly half, half of the financing cost is interest, half is factoring expense. And now in the first quarter, we are rolling off part of the factoring solution, but part of it, but that should give a slight improvement going forward. Inventory, we had SEK 654 million in inventory [ end of ] quarter versus SEK 691 million same quarter last year. So the trend is going in the right direction. And you're all aware of the Red Sea conflict that is currently causing us around 2 to 3 weeks delay in both transportation, but it does not have a significant impact on business and we are still able to deliver everything that we need to our customers as planned.Cash flow. The cash flow from operations was SEK 45 million for the quarter versus SEK 230 million the same quarter last year. Here, it's just worth, I think, highlighting that last year, we did have prolonged payment terms for a number of suppliers. And during the year, we have normalized those payment terms. So that's causing this relatively big deviation.And finally, just mentioning as well, over the year or over the period, of course, the new share issue of SEK 300 million is impacting and improving the cash flow from financing activities and balance sheet as well.And with that, I would like to hand back over to Magnus.

[Magnus Larsson, executive]

Thank you very much, Susanna. You touched upon 2 of the topics that I'm presenting on this slide. And it's the -- of course, the transformation, you spoke about the costs that we took to actually get our operational cost down. And you also spoke about the new share issue and that we have managed to strengthen our balance sheet. And I think these are some really important components.So, I'd like to give you a background to the changes that we now announced in December. And the way I see it, so myself and Susanna and the team, we have been working together now since -- well, basically 2 years. And it was very clear that when we took over that we had to do something about the way we address the market. So the -- you can say the first phase of our work was the go-to-market strategy to achieve growth. And this is actually what we presented at the Capital Markets Day we had in June 2022. And executing on this strategy, you actually started to get our order intake and our revenues or net sales growing. And of course, as a growing company, we had to secure financing.And I think that was the second phase then where -- which was concluded in August '23, actually making sure that we have a really solid balance sheet. We have a strong balance sheet. And then we went to phase 3, the transformation strategy. And it's clear that we could see the need to actually do the transformation that we have now communicated or communicated in December. But we had to get the growth started. We had to make sure we had the solid financing before we could actually take this step. It's something that we're also in a discussion internally with our colleagues to explain why are we doing it now? Especially since we could see that we have the money on the balance sheet, that we actually have a strategy, growing the company that's successful. But we could see that we have had an underlying need to actually change the way we're set up, change the way we operate to actually get the cost down.So the transformation we did was actually or [indiscernible] split in 2. The first one is execution of the cost savings with a target to lower our operational cost with SEK 50 million in 2024. We want to make sure we bring the company back to profitability in 2024 versus '23. But we also want to make sure that we have a good durable level of profitability and operational cost. And to make sure we do not need to do the same kind of exercise again. Doing a transformation has been a critical part of doing this.Two, so what we do is that we launch a program internally that addresses the efficiency, the focus of the company, the capabilities that we need to, actually to ensure the long-term competitiveness. And we have now concluded all the union negotiations. We have closed actually the organizational transformation set-up where colleagues and staff, friends, contractors had to leave the company. It's, of course, being a company with 200 staff that has been a painful process, but it has been a necessary process, and it was the -- the timing was the right timing. But of course, what we have done now is the -- you can call it almost a housekeeping. And it gives us maneuverability.It really give us the possibility to grow as a company, to invest in the areas that we want to invest, focus in the right areas and make sure that working in a different way, set -- building an effective corporate organization, will actually allow us to grow in a fast way without actually growing our cost in the same way. So also internally and to yourself, I want to present this as an investment case. So actually, what this allows us to, we will be profitable, we are focused. And I think this actually allows us to invest now in strategic markets. There will be new functions and roles that we will actually need to support the future growth. We are investing in our core product portfolio, and we are setting now an efficient corporate setup to actually make sure that we are long-term competitive that we can capture the market share within our goals.So from my point of view and especially with this fantastic quarter behind us from a revenue and profitability point of view, I feel that we're in extremely good shape to address the market. And I feel confident that we will actually be able to present a number of good quarterly reports during the quarters and hopefully, years to come.So what are our plans for '24? I want to show it in 4 different phases. It's, of course, the sales and delivery. The way we have our commercial proposition, how do we work with supply and then on the cloud -- on the tech side. We have made changes now to the EMT. We are, as of now, a new EMT setup. It's less members. It's a very focused organization. And I think one of the biggest changes actually that the regional setup that we introduced in 2022 is now replaced with a clear commercial organization. It's -- I had the pleasure to announce Mats Arnehall is our Commercial -- Chief Commercial Officer, and he will be in charge of deploying our sales strategy and the customer strategy and the commercial strategy across the globe. And on this track record, we have the fantastic growth that we've seen in Europe. And we do expect that working the same way will actually give us the same growth and the same opportunities across the rest of the markets.We will focus on a few strategic markets: U.S., U.K., Spain, Germany, Pacific. It's actually used to be Australia, but it's what we see now on the work done in New Zealand and the interest on the New Zealand market is that we need to consider also New Zealand as a strategic market. So together, they are clearly strategic. Japan, it's strategic. We don't -- we are not really there yet. We are on our way. But it's a market that we believe would be the perfect fit for Pricer as a company. So here, we will actually spend money and invest to actually get a presence.But we will, of course, also work on our established market. So here, the plan is to maintain or grow the market share with a clear focus on migrating existing customers over to our Plaza SaaS platform to improve the recurring revenue. We will focus on doing upsales to existing customers and bring new exciting products and also software solutions and applications, and then the store modernization. So basically, if you have a customer that had their ESLs for a long time, what are the compelling events that we can do to actually make sure that they do a modernization and they replace existing labels with our new labels.We will work a lot with our commercial proposition. We have built the team now under Finn, our Chief Product Officer, while we will also keep the marketing. So what we have asked Finn to do is that he and the team, they should revamp the commercial package. We should look at the way we communicate to the market. And the idea is that we should now make it easier for sales to actually go out there and do additional sales to make sure that when they knock the door that there is someone saying, thanks, finally, you're coming, but also that should be easier to sell and easier to sell the products that we want them to sell, to make sure that we really claim, the position, as retail's first choice.On the supply side, of course, we are working, as before, to get our costs down to make sure we get an improved COGS, but it's also to look at the lead times, to look at the way we can minimize carbon footprint. How can we improve quality? Focus will be regional or local manufacturing, automized manufacturing. And of course, the ultimate goal is efficiency improvement and lower cost. We will look a lot also from -- not only from the supply side, but on the product side on modularity. How can we work with our products in a more modular way to minimize the inventory we need, minimize different variance we need or variants we need. It will be a focus area, and I hope to see and to be able to speak more about interesting developments in this area.We are also deploying a SaaS-first strategy. And the intention is that this first -- SaaS-first strategy will lead to SaaS-only strategy over time. We'll focus on simplicity. It should be easy to buy. It should be easy to sell. It should be easy to use. We'll focus on applications. If I have to [indiscernible] there has to be a lot of compelling and interesting applications that I want to buy. And we want to make sure that the platform offers the stellar customer experience, not only for the engineers that actually install it. But for the marketing, they will use it to actually convey messages to the shoppers. And for any stakeholders that need to get some kind of information out of this platform. So these are the 4 key areas that we will focus now.And I will now summarize Q4. Of course, I'm extremely happy to stand here today and communicate the best quarterly result in Pricer history, with a net sales of SEK 800 million. Not being the CFO, I focus on the 18.4% and not the 17.7%. We took the opportunity to adjust in line with the write-downs and the efficiency cost that we took in Q4 to do the same on our stock and our inventory. So the sales margin, from my point of view was 18.4%. And I'm sure you excuse me, Susanna.We have announced the cost savings program. It's proceeding according to plan. The transformational phase that I spoke about, it's starting. We have actually, in fact, already started it, but it will formally now be kicked off. We have returned to profitability. It's been extremely frustrating to not communicate that we're profitable this year. I'm happy to say that despite the additional cost -- the extraordinary cost that we've taken, that we still had positive EBIT net profit and that we can actually present you with an adjusted EBIT of SEK 54 million, corresponding to a 6.8% margin. We spoke about returning to historical levels of profitability and I think this Q4 at least, is on a historical level of profitability.And of course, winning the Outdoor and Cycle Concept deal in the U.K., it's a very big thing for us. It's a big thing on the market. It's something not only us -- but also for other ESL vendors that they see that you have one chain. They made a decision, they are proceeding with the deployment. We've seen, could call it false starts. We've seen people, vendors and companies starting to deploy, but nothing really happening. Now there's a major shift. Now we see that it's happening. We see a lot of interest, and we are on a lot of interesting dialogues.And before actually going to the questions and answers, I would like to take the opportunity to thank you, Susanna for 2 fantastic years together as CEO and CFO. It's been a pleasure to work with you, and I wish you nothing but the very best now into your future. Next time, will be Claes our Interim CFO, that will join me. But for now, thank you very much, Susanna.

[Susanna Zethelius, executive]

Yes. And thank you as well. I've really enjoyed working here with Pricer. Now I'm moving on to new opportunities, but it's been very rewarding, interesting and fun here. So thank you all.

[Magnus Larsson, executive]

Thanks. So then having said that, do we have any exciting questions? Cecilia -- we have Cecilia here helping us with the moderation.

[Cecilia Vinell, executive]

Yes, we do. So firstly, can you explain why the Canadian customer is slowing down?

[Magnus Larsson, executive]

Yes. So the reason why they're slowing down, it's been twofold. There has been some internal changes on the way they work. That is actually the primary reason. I see that we are now in discussions on the future. In fact, me and a few of my colleagues will go to Canada in 2 weeks' time and discuss the future and then how to cooperate and deployments for the coming couple of years. So I think it's been actually mainly internal.

[Cecilia Vinell, executive]

There's a question -- a long question. But the background is that despite the influx of funds from the capital increase, the company still ended with a negative cash flow. So what specific strategies are being implemented to improve working capital and ensure positive operating cash flows moving forward?

[Susanna Zethelius, executive]

I would say that, that is something that will be revisited in quarters to come. I mentioned that we're working on the working capital side in order to improve that. It's a work that is taking quite a long time because it needs rewriting customer agreements, for example, working in a new way with the inventory. That work is ongoing, but we're not yet really seeing the results of it. So yes, it would be discussed going forward.

[Cecilia Vinell, executive]

And the SEK 30 million investment during Q4 in property, plant and equipment. What, where and why did we do that investments?

[Susanna Zethelius, executive]

That is mainly relating to final payment of our German production line.

[Cecilia Vinell, executive]

And regarding the S-Group, is it correct to assume that the majority of your expected Q1 deliveries to the group isn't present in the Q4 order backlog?

[Magnus Larsson, executive]

Yes, that's correct.

[Cecilia Vinell, executive]

And also about gross profit margins, since the SEK has declined versus the dollar, is it still reasonable to still assume improving gross profit margin in 2024 compared to adjusted Q4 levels?

[Magnus Larsson, executive]

Yes. Our plan is to continue to actually improve our gross margins in 2024.

[Cecilia Vinell, executive]

So here's a long one. In the last report, significant emphasis was placed on the contributions from Canada, France and Italy to the order intake. However, there was no detailed mention of the new focus areas, specifically the U.S., U.K., Spain, Germany and the Pacific. Could you provide some insights on the current weight these focus areas hold within the company's business strategy?

[Magnus Larsson, executive]

We cannot give anything on the actual weight. But I can say that as communicated on U.S., of course, it was a bit disappointing that it didn't -- the order intake were not higher from the U.S. market. On the Canadian market, I see a lot of upside for now of 2024. I do believe that there is much more to do in those markets. Same goes actually for the U.S., but due to the timing effects, I mean, that will have an impact. But I also see that there are more opportunities in the U.S. that we might not yet have explored to the -- as far as we can. So I'm positive, but there might be -- that there is some additional timings.When it comes to the Pacific market, I expect more and more orders. We have a positive momentum. So that market will grow. You were asking -- it was one more market, right?

[Cecilia Vinell, executive]

Specifically U.S., U.K., Spain, Germany and the Pacific.

[Magnus Larsson, executive]

Yes. U.K., very good. It's very good. We got started. We've got our first real tangible order, first large one, and I see there will be more to come. In Germany, it's still in -- I cannot really say that it's an early stage because it's not, it's quite late. But it's early in the new engagement. So last year, I didn't really expect -- it's a focused market and we have engaged with a lot of our customers, but I did not really expect any order intake from Germany last year. Let's see what happens this year.In Spain, good orders, was a lot in Q2 -- Q3, and we expect more and a lot of engagement with our customers this year in Spain. So I expect Spain to be a growing market also in 2024. So that's, I guess, a rundown of these markets.

[Cecilia Vinell, executive]

Your targets for 2025 imply a significant acceleration in sales growth this year and next year. Where will this come from?

[Magnus Larsson, executive]

I think the expected sales growth, it will come from the strategic markets. It will come -- of course, there will be a major contribution from our established markets. Then the established markets has -- did surprise me positively in 2023, thinking about, for example, France. So I see in the strategic markets, but also in some of the established markets. If take Finland, I expect a lot of revenue or net sales coming from Finland, even though it's not one of the key strategic markets, but it's covered by ourselves. So, no, I would say from actual mix.

[Cecilia Vinell, executive]

These are the questions that has come in as far as I can see. If you have any further questions, you can always email to [e-mail].

[Magnus Larsson, executive]

Good. Then I would like to thank everyone joining the call, for joining the call. I hope that you enjoyed it. I enjoyed it greatly to be able to speak about the results that we have done and our plans forward. I really look forward to the Q1 presentation. And I -- well, I think it was clear from also the quarterly report and the CEO update that I do have a very positive view on the year. I look forward to a good year, profitable year and a successful year. So thank you very much. Bye-bye.