Good morning, everyone, and welcome to Europris presentation of the second quarter results and the first half of 2026. My name is Espen Eldal, and as always, joining me on stage today will be CFO Stina Byre, who will present the financial details. After the presentation, we will host a Q&A session, which will be managed by IR officer Trine Engløkken. Please feel free to type in your questions as we speak. Before I start, I would like to make a special welcome to the guests we actually have physically present today. It is very nice that people still show up to these kind of events. That is appreciated. I would also like to thank Pareto for hosting the presentation today and the investor meetings we have later on. I know it is a busy morning.
The second quarter reporting season is kicking off today. I guess that also many of you have started summer holidays, or are going to start it maybe today or tomorrow. Let's get started and jump into the numbers. Total sales in the second quarter were NOK 3.7 billion. That is a reduction of 2.8% and down 1.1% in constant currency. As we explained when we presented the first quarter this year, the timing of Easter has a major impact on the sales in the first two quarters this year. While the early Easter boosted sales in the first quarter, it has a negative impact of around 4.5% points in the second quarter. In order to evaluate this, you should look at the results for the first half, and we are now going to do that.
When we look at the results for the first half, we deliver a sales growth of 3.8% and 4.4% in constant currency. Norway continue to deliver a very strong performance with a like-for-like sales growth of 5.7%, and in Sweden we have a like-for-like sales growth of 1.5% points in local currency. Note that Sweden was negatively impacted by the temporary closure of 24 stores during the store remodeling program we are running in Sweden at the moment. The gross margin has improved. That is mainly driven by product mix changes in Sweden following the integration actions we are doing, and some unrealized currency effects in Norway. EBIT for the first half were NOK 465 million, a solid increase of 20.7%. Stina will provide some more details on the financials, both on the quarter and the first half in just a few minutes.
I will give some operational updates on Norway and also on Sweden. Starting with Norway, I am really pleased to see that we continue the strong performance for Europris in Norway. Once again, we deliver profitable sales growth, and the growth this year is volume driven by higher footfall to the stores and also a volume-led basket growth. So far this year, we actually see volume growing more than sales, and that is caused by the average price per item has actually been reduced. This puts some pressure on the operating costs, as costs for distribution and handling of goods are impacted by the high volume. The reduction in price per item is caused by more price-conscious consumers.
We have said that for quite some time, that we expect consumers to remain price conscious. In the first half, our sales growth is driven by campaigns and also by private label products with very low price points. We see that the consumers are acting, and in today's market, they are seeking value for money. It's very comforting to see that our low price concept remains relevant for the consumers in these days. We are still gaining new customers to the Europris concept. Europris is also an important seasonal destination, and the Easter season and also the spring/summer season has been important drivers for the sales growth we have delivered so far this year. When we turn to Sweden, the turnaround project in ÖoB is all about creating a more healthy and profitable sales mix towards more non-food and seasonal goods.
We see that the results we have in the first half really makes us confident that we are on the right track. We have been able to shift the assortment towards more non-food items and seasonal goods, and the Swedish consumers have welcomed the upgraded assortment very much. 10% sales growth is what we see both in the second quarter and the first half from the non-food product range, which is now more or less fully harmonized with what we see in Europris. We have deliberately done less promotions of very low-margin consumables at the expense of giving more space in the advertising to seasonal goods and non-food, as we want to establish ÖoB as a destination for these products. That has, as expected, had a negative impact on sales, but had a very positive impact on the gross profit in the first half.
The stronger non-food offering, that supports the gross margins and will be crucial to attract new customers going forward, but also to increase the longer-term profitability of the company. ÖoB is not about making a turnaround just by increasing sales. It's also about making a product mix change towards high-value items, which gives more profitability for the company, and we are on the right track. The other big thing we're doing in Sweden is, of course, the store remodelings, and they are key to reestablish ÖoB as a relevant and attractive shopping destinations for a broader customer group than we have today. So far this year, we have remodeled 24 stores, which together with the four pilot stores we opened last year, brings the total modernized stores to 28.
That is a massive project to complete for a company like ÖoB that has been used to doing maybe one or two projects during a half year. I'm very pleased to see that the projects have been managed very well. Every single store has been finished according to plan, and this upgraded store continue to deliver higher sales and better margins than the rest of the chain. We see good effects from the project, and they have been managed in a very good way. When we look into the second half, we're planning for another 10 store upgrades per quarter, and the remaining store base will be upgraded next year. While these projects, of course, are exhausting, they also create a great deal of energy and spirit into the organization.
We use the store employees to perform the projects, and that creates an ownership and also a sense of knowledge to the new concept that is extremely important to build the corporate culture we want. Doing these projects the way we're doing them also helps building the team spirit and the culture in the company. I've shown you this slide before, and this is about a big plan we presented back in 2024, and I'm coming back to that because, as you know, we have combined our sourcing efforts together with Europris and ÖoB, and we have come a very long way in harmonizing the non-food assortments. We see that this has been well received by the customers, and it's also supporting the margin uplift we see in ÖoB this year, which has been significant.
We also made operational improvements and making sure that we execute the concept in a much better way than before. I'm really proud to say that the store standards that we see and the operational standard we see in ÖoB these days have never been better. They're making good progress. Now we're moving forward at speed to improve the customer experience, with an ambitious store remodeling program. We have now remodeled 28 stores, more to come in the second half this year and the remaining store base next year. That will be supported by nationwide marketing when enough stores have been upgraded. I'm very pleased with the progress we have made in Sweden and remain very confident in the targets we have for 2028 of NOK 5 billion in sales and a 5% EBIT margin.
With that, I will leave the floor to Stina to present some more on the financial details.
Thank you, Espen, and good morning to everyone. I hope you're enjoying your summer, and I also hope you keep practicing your rowing skills ahead of Saturday. Due to the different timing of Easter between the years, focus should be on the development for the first half, where figures are comparable. To briefly sum up the second quarter for segment Norway, sales were on a par with last year, including the estimated negative impact from Easter of 5.5 percentage points. Product mix with a higher share of non-food and private labels had a positive impact on the gross margin. When accounting for the higher operating expenses, EBIT was lower than last year. Moving on to the first half, where figures are comparable, it can be summed up to a sales-driven increase in EBIT.
The Europris chain had like-for-like growth of 5.7%, mainly from higher footfall, but also from a volume-led growth in the basket. We still see growth in private labels and campaigns, in addition to good development for seasonal items. These elements all reflect the relevance of the concept. The pure players had growth of 3.9% related to Lekekassen. The gross margin was 44.2%, up 0.2%, but down 0.4 percentage points excluding impact from unrealized currency. Growth in private labels have a positive impact on the gross margin, while higher campaign sales have a dilutive impact. The OpEx increase of 7.5% reflected the volume driven sales growth, as this increases handling costs both at logistic center and in stores. It also increases distribution costs as more trucks are needed to move the volumes and combined with higher costs for the transportation in itself.
While inflation is above 3% in Norway and the wage growth even higher, the average price per item for Europris is down. This means that there is no price benefit in the sales growth, and the volume growth is actually higher than the sales growth. While volume growth is positive and welcomed, it does put pressure on the cost development. All in all, this accumulated to an EBIT of NOK 573 million, corresponding to a growth of 7.1%. Sales for segment Sweden in the second quarter were NOK 1 billion, a reported decline of 9.6% and 3.9% in local currency. The lower sales were due to the timing of Easter and the temporary closure of the 15 stores that were remodeled in the quarter.
In addition, the deliberate changes to the campaign program, with less of very low-margin consumables and more of non-food and seasonal items, it had a negative impact on footfall and thereby sales, but it contributed to the margin improvement. It is an important part of the journey to attract new customer groups and profitable growth long term. Operating expenses were impacted by the store remodelings, and the EBIT loss of NOK 34 million was in line with last year. Sales for the first half were NOK 2 billion, a reported decline of 1.5%, but up 0.7% in local currency. This includes impact from the closure of the 24 stores that were remodeled during the first half. Product mix with a higher share of sale of non-food had a positive impact on gross margin, which increased to 33.1%.
The operating expenses were impacted by costs related to the store remodelings this year, while last year was impacted by the ERP project. EBIT loss of NOK 107 million this year was an improvement from the loss of NOK 149 million last year. As mentioned, due to the timing of Easter, second quarter figures are not directly comparable and one should focus on the first half results. To briefly sum up, the second quarter showed sales decline, a higher gross margin, and lower EBIT, with a net profit to parent of NOK 245 million, corresponding to an earnings per share of NOK 150. For the first half, sales for the group were NOK 7 billion, up 3.8% and 4.4% in constant currency. The margin improved to 41%. As the sales and margin growth offset higher operating expenses, EBIT grew by 20.7% to NOK 465 million.
Net profit to parent increased to NOK 249 million, corresponding to an EPS of NOK 1.52, up 27%. The cash flow for the first half shows improvements from operations, with last year impacted by inventory buildup. The group is investing more related to the store remodelings in Sweden, and also the upgrade of the pick and mix candy stands in Norway. The financial position and liquidity is good, with net debt of NOK 5.1 billion and NOK 1.6 billion excluding lease liabilities, and cash and liquidity reserves of NOK 2.3 billion. I will hand it back to Espen for the outlook.
Thank you, Stina . I will also summarize. We have delivered a very good start to 2026, with continued profitable growth in Norway and good traction on the turnaround process we are doing in Sweden. In the market, we still expect consumers to remain price conscious, and Europris and ÖoB are both well-positioned with the relevant product offering to benefit in the market where consumers are seeking value for money. When we look at the macroeconomics, that is still a quite mixed picture. In Norway, inflation remained above target with possibility of further interest rate hikes in the second half. While in Sweden, the inflation and possibilities for interest rate hikes are lower. Consumers in both countries are expected to get real wage growth this year. We believe that should be supportive for retail sales.
With that, we will actually invite Stina back on stage, and we will open up for the Q&A session. As usual, Trine, we will start with the questions from the audience in the room, if any.
Thank you. Phillihp Bjerke, Pareto Securities. I have a question on ÖoB. During the first half of 2026, we have seen improvements in EBIT of NOK 42 million. It was flat year-over-year in Q2. How should they think about the second half for ÖoB in terms of the prior guiding of a flat contribution in 2026 compared to 2025? You are no longer writing it explicitly in the report. How should they think about it?
I think we have outperformed our own guiding for ÖoB in the first half this year. Especially the remodelings of the stores have maybe had less impact on the gross profit than expected. I think you should expect some of the same movements in the second half. We have also seen that the customers have responded maybe more positively than expected to the sales mix changes. We are improving the gross margin maybe a little bit faster than we expected. At the same time, it comes a little bit on expense on the sales of groceries. It's a little bit mixed effects, but I think you should be a little bit more positive than flat year-over-year for the second half.
Thank you. On the marketing side, could you give some more comments on the timing when you will do a nationwide push on marketing?
I think we are ready to do more nationwide push on the marketing for the Christmas season this year because Christmas is a season we're building up also in the non-refurbished stores, and that will be the same concept basically. For the Christmas season, I think that will be the first time we will be able to push the bigger marketing button. Then it will be sometime next year that we are ready to do more nationwide marketing. As you have seen from the map, we are doing these store refurbishments in clusters. We're done now Gothenburg area. We have done most of the stores in the Stockholm area. We are ready to do some more local marketing, but the bigger push will come first next year.
A second question on the market here in Norway. Like-for-like in the second quarter, if you adjust for the Easter effects, it's somewhat weaker than during the first half in whole. How are you seeing the market? Is there any signs of a slowdown, or how should they think about the a bit softer growth this quarter, adjusted for the Easter effects?
I think you should not put too much into it. The Easter has a major impact, and it's not that easy to really look at how these movements are between the first and the second quarter. Overall, we are very satisfied with the development in the first half. You should evaluate the first half when you look at the like-for-like growth. 5.7% in Norway is a decent number for the first half.
Thank you.
There are some questions from the web. Ole Martin Westgaard, please split like-for-like growth in Norway between volume and price.
Well, as we said, the volume growth is higher than the sales growth. There is some decline on the price, but we don't give the explicit numbers. The volume is the main part and some negative from price.
How can you conclude that the lower basket size in Norway reflects more cautious consumers rather than underperformance in your offering?
I think we can see that very clear. We see that it's higher sales of our private label products. We see that the consumers are choosing the low price points in the stores. At the same time, we see that the campaigns are hitting very well and that campaigns are selling and driving the sales growth. We can clearly see that the customers are making new choices in the stores. We see clear that sales around the big payment days in Norway are becoming more important. It's a growing number of Norwegian consumers that are actually experiencing a tougher economic everyday life. Being relevant with good product offerings, low price points on everyday products is very important, and that is what drives the change.
What were the shares of consumables and private label in Norway and Sweden in the second quarter?
Well, as I said in the first quarter, it doesn't really make sense because of the timing of Easter. While we had a higher share of consumables in the first quarter, we had a higher share of non-food in the second. For the first half for Norway, it is a flat development.
How do gross margins in remodeled Swedish stores compare with legacy stores?
It is slightly higher. We see that on average we get somewhat higher uplift when they are refurbished.
How much higher is the non-food share in remodeled stores?
It's very difficult to actually give a concrete answer because you have very different timing on these. Adding the numbers up like that, it's not quite as meaningful yet. We do see the margin impact, so it impacts. Let's come back to it when we have more history.
Should we expect the higher handling and distribution costs seen in the second quarter to continue?
Well, I think that for some time now we have seen that the volume growth is there. I would assume that this will continue, and that you should take that into account. I can also mention that the wage growth in Norway for us it will impact with around 5%, and that's about 60% of our OpEx base. Higher results in the stores, which is well earned for them, but it does of course impact our OpEx as well. When we have more hours needed to kind of handle the goods in the stores, this will have an impact.
What were the costs associated with the store remodeling program in the second quarter?
Well, I think you should calculate about what we have guided on previously, which is a little bit more than SEK 1 million per store.
Next question comes from Petter Nyström. For Norway, in the first half, the gross margin is down 0.4 percentage points, excluding FX effect, you mention negative effect from higher share campaigns. Firstly, is this also a function of more competition in the market, is this a trend you expect to continue?
It is a function of more competition on some products in the market, we are continuously trying to balance our campaign mix in order to maximize the margins. At the same time, we have also seen that the price-conscious consumers are shopping more on campaigns. On the other hand, the consumers are also shopping more private label products, which is positive for the gross margin. As I would expect us to try to work on the margin, we will continue to do that, we don't expect this to be a negative development going forward.
Thank you. That was the last question from the website.
Thank you, enjoy the summer