Good morning. Welcome to this first quarter presentation for Kid ASA. Here with us today, we have Anders Fjeld, CEO in Kid, who will take us through the quarter. If you have any questions during the presentation, I ask you to address them online in the chat function. I'll give the floor to you, Anders.
Thank you, Joakim. Hello, everybody, for those of you present in the audience and also on the webcast. I will guide you through today's presentation. I will do my best. Let's start by summarizing the quarter. We had strong performance in Norway, and in a challenging retail market in Sweden and Estonia, led to a group revenue increase of 0.1%. That comes on the back on a strong 6.1% last year. The like-for-like revenue decreased by 0.3%, and again, on a strong 7.3% last year. The gross margin decreased by 5.2 percentage points, mainly caused by sale of goods purchased last year at high freight rates, without corresponding price adjustments fully effective. I will come back to that later.
We see now that the current freight rates in the spot market are at a normalized level. The EBITDA decreased by NOK 53.8 million- NOK 56.7 million. The EPS ended up at -1.15, compared to 0.21 last year. What has been our focus during the quarter? During the quarter, we initiated operation at our new warehouse in Borås, which you can see on the pictures on the slide. According to plan and without any material issues, our new logistics team is well ahead of schedule and finalized the relocation from a current third-party logistics provider during April. As you also can see on the bottom left, we have installed and now functional AutoStore, with automation of packages going out to our customers in Hemtex.
Our B2B concept, Hemtex 24H, represented NOK 48 million in sales during 2022, with a gross margin of around 35%. Our largest customer, ICA, which represented approximately 50% of the revenue, have made a strategic choice to make changes in their non-food categories and have consequently terminated the agreement with Hemtex.
We expect sales of around SEK 7 million to ICA during 2023, will take action to reduce operating expenses related to Hemtex 24 going forward. 53% of the total assortment and 65% of the textile assortment is branded with our brand, Act With a Heart, which contributes to a positive impact for people and planet. We are satisfied with a 7% reduction of the group's total GHG emission in 2022, our science-based target application is currently under review for validation.
We expect the validation process to be finished within a short time. This will be an important milestone for our climate emissions reduction plan. Further details are available in our sustainability report at our investor website. Okay. Kid Extended, as we have given you updates on the previous quarters, was launched in Norway during Q4, included an extended assortment available online, in our pilot stores, and a selection of our largest stores.
One pilot store was opened in Q4 2022, two more were opened during Q1 2023, two more stores opened during April. Our five pilot store all are all now open and running. Revenue from the extended assortment was NOK 6.4 million during the quarter and is expected to increase as the assortment is continuously expanded throughout the pilot phase.
Bear in mind that this revenue is mainly coming from sales through our online channel, our larger stores, and the pilot stores. We continue to see a gross margin for larger furniture in line with expectations of 35%-40%, including the last mile distribution costs. The initial launch is considered successful, both online and in pilot stores, and we will continue to develop and measure the performance of the concept before deciding further rollout. Group revenue was stable compared to a strong quarter last year. In Norway, we are performing well despite a challenging market. Kid Extended is only piloted in this market, has a positive impact on growth, especially on our e-commerce site. The opening campaign from new and refurbished stores in the quarter also impact the quarter revenue positive.
Hemtex's performance was weak in Q1, driven by a challenging market and changes to the campaign plan. Last year, we had an aggressive online campaign, which we chose not to repeat this year. In addition to that, we also did a clearance sale last year of weighted duvets, which of course, we didn't do this quarter. As I said earlier, Hemtex's 24H sales declined in Q1. Adjusted for Hemtex 24H, the revenue decline was 5.6 in constant currency, that's compared to the revenue decline of 10.9 in constant currency, showing that the impact of Hemtex 24H was the largest contribution to the decline in revenue in the quarter. Let's have a look at the gross margin.
The gross margin was 56% in the quarter, down 5.2% points compared to the same quarter last year. The margin decreased in both segments as inventory of goods purchased in 2022 at high oversea freight rates was materially reduced during the quarter. We also had more availability on Christmas and autumn products on the January sales, as well as several opening campaigns from refurbished stores and the Kid Extended launch that negatively impacted the margin.
Final, the financial objective of normalized gross margin in 2023 remains unchanged. We purchased freight in the spot markets, and in Q1, we have seen normalized freight levels compared to pre-COVID. The lower freight levels will positively impact costs of goods sold going forward. Price adjustment was implemented during the quarter, with full effect from Q2.
To summarize, the gross margin impact was expected, although slightly more negative in Q1, which we expect to be offset by higher margin for the remainder of the year in accordance with our gross margin target. OpEx to sales increased compared to last year on the back of unchanged top line, combined with cost increase from increased HQ staffing and index regulation of rent.
Non-occurring cost elements related to the relocation of the warehouse in Sweden and COVID-19 reduction last year also affected the OpEx to sales rates. The employee expenses increased by NOK 7.7 million. Strong cost controls in stores in both segment was implemented during the quarter. I must say, I'm very impressed by both the Hemtex and Kid team, the way they have managed the cost control in the stores when it comes to employee expenses.
HQ staff increased compared to last year to support execution of business plans, especially capacity within e-commerce and IT departments. Bonus effects of NOK 1.6 million is related to reversion of bonus provision last year. NOK 2.1 million is currency effects negatively inflicting the OpEx. When it comes to other operating expenses, they increased by NOK 15 million.
The main driver is the index regulation of rent, as previously communicated. Non-recurring cost elements related to relocation of the warehouse in Sweden of NOK 3.4 million and COVID-19 cost reduction last year, effects of NOK 1.4 million. We also had a negative impact of the currency effect of NOK 1.0 million. To summarize, flat top line, reduced gross margin, and OpEx increased.
EBITDA decreased in both segment this quarter. Some comments on the cash flow. As usual, cash flow was negative in Q1. Cash flow from operation improved compared to last year. Negative effect on profit in the quarter. Positive cash effect from inventory build down according to plan. As previously mentioned, goods purchased at high freight rates was reduced, and we see a healthy margin in the current inventory. Cash flow from investments, there's NOK 33 million in stores and online.
Especially related to the expansion of the two Kid Extended stores opened in the quarter, and also the two stores that was opened in April. NOK 24 million related to the warehouse in Sweden, mainly AutoStore, as you saw on a picture on the previous slide. NOK 12 million in loan to the joint venture related to the new warehouse.
As many probably remember, Kid have a 50% ownership in the warehouse. Dividends are paid in Q2 and Q4. They had no cash effect this quarter. Cash flow from financing was implemented by increased overdraft facility to finance our normal cash flow seasonality. We consider the current financial position with gearing ratio 1.9 to four as solid.
At quarter end, we have a cash and available credit facilities of NOK 328.6 million, which includes a new NOK 100 million short-term facility agreed in December. As I've already mentioned, we have had the high activity during the quarter, especially when it comes to the extended stores. We have closed three stores, one in Norway, one in Sweden, and one in Finland. We also opened a new store in Lippulaiva Espoo in the Finnish markets.
There have been, in total, five relocation activities, including one, all the stores which have expanded the size, and also four refurbishment and expansion activities, in the quarter. We see a high activity in lease negotiation, and we expect to do more, to have the same level as earlier when it comes to the store portfolio, both with the relocations and expansion activities going forward. Please also notice that we have signed one more contract for the Norwegian market, where we will open in the Rørvik, a small market in Norway, at the end of this year. Let's sum it up before Q&A with the outlook.
On April 13th, we announced that Mads Kigen will start up as new CFO from the 1st of July, and you will meet him on the next quarter in August quarter presentation. Kigen has been employed in Kid since 2021 as Senior Business Development Manager, with responsibility for establishing the new central warehouse in Sweden. He has a broad and relevant experience, including several years in PwC, and we look forward to welcoming him in his new role from the start of July. The General meeting was held on the 11th of May, and all proposed resolution were approved, including the proposed half-year dividend of NOK 3 per share.
As I've touched on many times already, the gross margin is expected to normalize during the year due to a combination of price adjustments and normalized freight rates. We reiterate our target of a normalized gross margin for the full year of 2023. The group revenue in April in constant currency were down 5.1%, and down by 2.3% year to date per April. The gross margin improved as expected in April. Bear in mind also that in Norway, in the Norwegian market, the number of shopping days was 22, compared to 23 last year. With that, I think we will open up for questions. If you have any questions, please type them in, and Joakim will read them out, and I will do my best to answer.
Okay, thank you very much.
If there are any question in from the audience? No.
No question from the audience.
Mm-hmm.
I guess I could start off with one question. Could you elaborate a bit on the development in Q1 in terms of volume and price, particularly in Norway, where the growth has been, well, pretty strong?
We have done, as I said, during the presentation, price adjustments. We see, that, price is a driver for the growth, but also all the initiative related to, opening campaigns and, I would like to say, well execution of the work we've done in Q1, is explained the growth in the Norwegian market. We have had more campaign, related openings, especially with the Kid extended in Q1, compared to, previous quarters, previous Q1 quarters.
All right.
It's strong craftsmanship that we have delivered during Q1 in Norway, especially, I would like to say.
Yeah. Thank you. Some questions on the web here. We'll start with two questions from Francisco Vilches. The first one: "In terms of Hemtex revenues, is the decrease of revenues in general, or Estonia, or is performance in Estonia and Finland better?
The weakest market is Estonia, although that's a very, very small part of Hemtex. We see that in this quarter, Finland has performed better. The best market, whilst also we have seen a demanding and challenging retail market in Sweden. Finland is the best performing market at the moment, Estonia, the weakest market, and we also see challenging retail market in Sweden.
Okay, next question from Francisco: In terms of the macroeconomic environment, can the company shed a little more light on what it is seeing in the different countries where it operates? I guess you touched upon that a bit.
Yes. We see as I believe everybody a challenging market environment. We are focusing on adjusting risk, very looking to our inventory levels, which I'm very confident on, and being able to both, in case the customer comes back after Q1, being able to fuel with more activity. But we're not... How to say? We are balancing risk. That's what we can do. We can't control other rents, no, sorry, interest rates or energy prices, but we have a good plan for the time to come.
Yeah. Okay. Next question from Peter Nystrom. "OpEx is up 9% year-over-year in Q1. Do you expect the 9% growth to continue or increase due to salary inflation?
I'm not gonna answer, Peter, to give you any exact figures, but we have previously announced that the effects of the index, which will, of course, influence our numbers going forward. We know now the results of the wage increase for the Norwegian market and also for Hemtex, which is ± 4.2%, and 5.2% in Norway. That will influence. On the other side, we have done tremendous work on time and personal staff planning in the stores, which will hopefully offset some of the effects in the store base.
Next, two questions from [Jeppe] Borset. First, what was the gross margin in April this year versus last year?
I will not give any other further comments than that. We have seen an expected improvement in April.
Next question: What was the development in sales and gross margin in Hemtex versus Kid Interiør in April?
I will not give any more comments than what we already have said. We have disclosed the revenue in total, so we're not giving any comments on the segment.
Question from Jan Gunnar Bølke : What is cash available, excluding bank facilities?
Jan Gunnar, since maybe I can give him an answer back. I don't have the figures right here now. I have to ask my colleague who's in the audience, and then if you send me an email, Jan Gunnar, we will give you an answer.
Two more questions from [Jeppe] Borset. When do you expect price adjustment to be fully implemented?
They have been implemented during Q1, so they are fully implemented.
How has sales in May been this year versus last year?
We will give you a full update on that in August.
final question for now, from Peter Nystrom: You say gross margin improved in April. Does that mean from April 2022 or from Q1 this year? I guess if it's year-over-year.
We have seen an improvement in the margin in April compared to Q1. Now, I also would like to repeat that we have now the comment about the freight rates and the normalized inventory level, also when it comes to freight rates, which is a part of our inventory, technically.
Yeah. Okay, seems there are no further questions. I guess this concludes this session for now. Thank you very much, Anders.
Thank you very much. Have a nice day.