Okay, welcome to this presentation by Jacob, the CEO of StrongPoint. For those who don't know the company, StrongPoint is a retail technology company that sells a wide variety of technology solutions that saves costs, increase productivity, but also facilitates e-commerce sales for retailers, and then primarily within the grocery sector. Jacob, you have a wide range of different products, you know, electronic shelf labels, cash management systems, self-checkout terminals, and Click and Collect lockers, and you'll probably talk more about that. And you also are an AutoStore partner. So, by that brief introduction, I give the word to you, Jacob.
Thank you, so much, Petter. It was a very nice and short review of StrongPoint. I will, for those of you that are not that familiar with StrongPoint, go a little bit more through what StrongPoint is all about, the customers we serve, the solutions we provide, and the geographic footprint that we cover, and not least, why I think that StrongPoint is a fantastic both company and an investment opportunity. If you start with the next slide, then we're not a new kid on the block. StrongPoint has been around for 37 years, and we have our StrongPoint out of the Nordics and Baltics.
We have recently expanded also into, into UK and, and Irish market with an acquisition last year, and, and early this year, we concluded on a Finnish acquisition of a Pricer distributor called Hamari Group. So currently, we are in nine countries, covering not only sales, but also service, installation, and support in these countries, which is so important to ensure a good customer experience and get the full value from, the, actual sales of solutions. We have about 500, employees, across these, nine countries, and as you can tell from the logos on this page, we focus on grocery retail. So not the retail as such, but grocery retail, and about 80% of our revenue stems from this resilient customer base.
Last year, we had a turnover of NOK 1.4 billion, and we've been listed on the stock exchange in Oslo since 2003. If you go on the next page, this is really what you alluded to, Petter. I mean, our purpose is to bring retail technology into every shopping experience for a smarter and better life. And what does this mean? Well, it means, firstly, for our customers, the grocery retailers, that we're able to drive efficiency savings. Efficiency savings never really go out of style. And that, in essence, then leads to or should lead to boosting margins for the grocery retailers, or the ability to take out efficiency savings and providing additional value-add activities or services for customers in the store. And of course, as a consequence of that, we're having an impact on the end consumer.
We want the improvement for end consumers, whether it's in-store or online, to be excellent, and that experience could mean either that the efficiency savings have been driving down prices, that's also an experience, or enhancing the actual experience for with other services. So that's StrongPoint in a nutshell. Then if you go to the next slide, I wanna dig a bit deeper into what do we actually do, because just talking about technology, retail solutions could be so many things. And what we try to do here is sort of to take the roof off the grocery store and some of the warehouses, but I'd like to start in the store.
And if you're in particular a Norwegian or Swedish citizen, you are in touch with our solutions every time you go into a grocery store. You would have likely seen our CashGuard solution that is in many stores. You would have seen our Vensafe solution, which is on the rise in terms of attractiveness, given the fact that you're able to protect high-value items. Traditionally, that's been tobacco, but in today's world, with an increase in theft, we're seeing an added benefit from using Vensafe also for non-tobacco, but still high-value items. We have our own hardware and software for self-checkout. The self-checkouts StrongPoint offers is a leading self-checkout solution in the Baltic countries.
We're serving all of the grocery retailers with either our hardware or software or both, and we have a very unique set of technologies to prevent the traditional theft that you've seen arise with self-checkouts, and as such, we're very positive about taking that solution into the other StrongPoint countries as well. Electronic shelf labels is another of the solutions that we offer. That's a third-party solution for StrongPoint, Pricer. I believe Magnus Larsson will be presenting their solutions after my presentation here. But we're a long-standing partner of Pricer, and we distribute Pricer in all the nine countries that we are representing. And we are today the largest or second largest Pricer partner in the world, depending on which quarter you look at.
In stores, we're seeing more and more, kind of autonomous, robots getting their way into the store. We have a partnership with Coalescent Mobile Robotics on AMRs, which is then able to bring trolleys back and forth through to staff, enabling them to do value-added work, rather than the pushing of shelves around the store. And lastly, which I just wanna mention here in store is the humanoid robotic looking robot, which is actually from 1X. 1X is a Norwegian-based robotized company that StrongPoint has actually invested in. But not least, we have a partnership agreement to bring those very exciting robots into stores for, call it repetitive tasks, for instance, replenishment in shelf.
Highly successful startup, which is a scale-up that have been attracting both SoftBank and lastly, OpenAI as investors. That's briefly on what StrongPoint can offer in the store. We also have a very broad portfolio of e-commerce solutions, and if you're a Swedish investor, you would have noticed that our solutions are in all Swedish grocers. We have been providing our in-store order picking solution for many, many years, and we've added on to that in-store order picking solution, the ability to do both dark store picking and also automated dark store picking with AutoStore.
We are the world's first AutoStore partner focusing on grocery on the grocery retail segment, and right now we are finalizing the world's first AutoStore facility with three temperature zones, both chilled, frozen, and ambient. And lastly, on home delivery or delivery solutions, we have a range of both home delivery opportunities, but not least the Click and Collect lockers that you would have seen inside stores, outside stores, or even mobile. And drive-through solution that is, again, very, very highly penetrated in the Swedish market, and that we're dying to get out to other markets as well.
A bit of a crowded slide in just five minutes, but I think the main, main message you get across is that StrongPoint offers a set of retail technology solutions, which enables us to have very meaningful conversations with, with customers. Not there purely to sort of push one solution, but there to have a meaningful discussion about how do we achieve productivity improvements or better shopping experiences in store and in e-commerce? Then move to the next slide. Mm-hmm, just wanted to pinpoint on why are we deliberately targeting grocery retailers? Firstly, grocery market is what we would absolutely define as a resilient market. People need to have food and drinks and, and if anything, right?
In an environment or economy where the household spend is under pressure, it's not unthinkable that restaurants and that kind of eating-out experiences have to have to lose in favor of eating at home, meaning more spend in in stores. Clearly, we've seen grocery retailers grow. That's been a primarily a inflationary-driven regime, but it's still a very, very resilient market where where the fluctuations month by month, quarter by quarter, are completely different than what you would see in in many other retail categories. So that's why we focus on the grocery retail market. Secondly, if you compare the grocery retail market with the other retail market, being sports apparel, et cetera, the the the the technology spent in grocery retail is by far the highest.
About three-quarters of the total tech spend is spent in grocery retailers. So even though there's a low margin, typically, when you look at a margin as a percentage with grocery retailers, the share volume going through retailers leads to a very large portion of investment opportunities in technology. And lastly, technology tends to go forward with customers. Just a couple of examples here. You know, if you've attempted or adopted electronic shelf labels, you're not gonna go back to paper tags. I can say this as a Pricer partner. I have brought electronic shelf labels to, amongst other, the Norwegian and Swedish market, the Baltic market as such as well. We've never experienced anybody going back to paper tags. We've experienced the same with AutoStore.
Once you've automated a picking solution, you're not likely to go back and start manual solutions, but you need the volumes to get there. And although for self-checkout, there's talks in the press about how theft is forcing or pushing franchisees to turn off self-checkouts for periods of time, the evolution of self-checkout and more self-service is just going to increase. So we're focusing on grocery retailers, 80% of market revenue from those esteemed customers. And of course, there's naturally spillover effect to others, do-it-yourself pharmacies itself that we are then very well positioned to be serving. But then go to the next page.
It's just want to talk a bit about our geographic footprint, because as I said, we are a historically, we've been a Nordic and Baltic company. Most of the revenue have been residing in Norway, Sweden, and the Baltic countries, and we're doing well there. We have built a position which enables us to have very meaningful discussions with the grocery retail customers in these markets, where, by the way, we have 100% penetration in terms of logos. The really interesting bit about StrongPoint I find is how we are now positioning ourselves to move our solutions into the major economies of U.K. and Ireland, but U.K. predominantly, and not least Spain.
We entered the U.K. market with an acquisition of Air Link Group, and in Spain, we have been in the market for some time through the acquisition of one of the CashGuard distributors we had there. In both these markets, we're now looking to expand or call it export the solutions we offer. So if you go to the next page, I wanna bring to life a little bit of what are the product market fit that we're potentially looking at in these markets. Number one, if you start with the U.K. market. U.K. is the highest penetrated market when it comes to e-grocers. So not e-commerce in general, since that's here, but, you know, e-grocers.
Both go, you know, well in excess of 10% penetration, and with a e-grocery market that is bigger than the entire Norwegian grocery market in itself, but still struggling with profitability. That profitability, we believe, we're able to help these major grocery retailers, small and large, with both providing the award-winning order picking solution that we have for in-store picking and, and, and also for automated picking, but also on the last mile. The U.K. market is a predominantly home delivery market. Looking at the Swedish market, where the incumbent players have been able to reach break-even and even profitability, that to a large extent has been explained by the large portion of pickup in-store or pickup in grocery lockers. Actually, 50% of e-grocery orders in Sweden are being picked up in store.
So we believe that's a key element to achieving profitability. Compared to the advancement of the UK grocery market, there is virtually no electronic shelf labels. UK is highly, highly advanced on many, many aspects, but ESLs, or electronic shelf labels, has a very low penetration. And as the largest, or again, second largest Pricer partner in the world, we believe that at StrongPoint, we really have a unique offering, both in terms of experience in rolling out large-scale electronic shelf label projects, but also to enable and take advantage of some of the integrations that we have with, for instance, our order picking solution and the application of flashes in ESLs to increase the picking efficiency. The UK is also the, I'd like to call it the capital of self-checkouts.
Still, when I compare the software that StrongPoint offers with its self-checkout solution, it's by far superior to what we're seeing in the British market with the traditional players there. Lastly, with the rise of theft, and the U.K. has been particularly prone to theft of higher value items, we see a unique opportunity for the application of VensaFe, not necessarily for tobacco. That will come; there is some regulation change needed, but still for high-value items. So in short, the market for the solutions that StrongPoint offer in the U.K. is very much ripe. I want to touch upon Spain as well.
Although we've been in Spain for many years, we have traditionally been having a balance between both the Horeca segments, so hotels and restaurants with our cash solution, and then in parts and growing so with grocery retailers. We have a fantastic team that we're building up now in Spain, where we're seeing both the interest in e-commerce picking up, Click and Collect is picking up, and the growing self-checkout market. But not least, and as expressed in earlier quarterly presentations, we are working on a really groundbreaking new solution, which we have called CashGuard Connect, with a tier one grocery retail player.
And I cannot, unfortunately, disclose more about the customer itself, but it's a groundbreaking world news with regards to creating a fully enclosed cash management solution between front office or the till and back office, which will have monumental impact on the profitability for grocery retailers by reducing the cash in transit, the costs of shipping cash back and forth, and improving the customer and the employee experience when paying with cash, which still is about 30% in the Spanish market. So we have two major markets that we're targeting as we speak now. Then, so how have we done? So if you go to the next slide, yes, StrongPoint has been growing quite nicely for the past few years.
But as you will see, we are, or our customers are not completely immune to what's happening in society around us. So although we have, we have a customer base which is resilient, it's not completely immune to what's happening. And the uncertainty that that I think most businesses have experienced, and grocers included, the uncertainty has been leading to a investment pause of new solutions. But I think what we can say, without putting a number on it, is that what is not uncertain is the fact that people will, and consumers will, continue to be buying food and food and groceries in the store, and with that follows the need for more technology solutions to be driving productivity improvements in store. But that's been the case to date.
So if you're trying to round it off by looking at the investment case for StrongPoint, next page here shows the wide space opportunity that StrongPoint is targeting now. On the one hand side, you have the geographies, the nine geographies that we operate in. And as I said, in the traditional Nordic markets, we have 100% penetration with grocery retailers. Put here at 90%, due to Finland, where we're not yet serving the major players there. Whereas in Spain and the UK market, the penetration with grocery retailers is far from those numbers.
So number one is the significant white space opportunities with the grocery retailers in Spain and in the Irish market, which you can tell are, you know, massively bigger than any of the Nordic markets. Second is the penetration of our solutions. Sure, even though we have 100% penetration in Norway, Sweden, and the Baltics with grocery retailers, there's still ample opportunities to get our solutions out in the market. There's still many, many stores in both Norway and Sweden without the StrongPoint VensaFe solution. We have yet to see the StrongPoint self-checkout coming into the markets in Norway and Sweden, despite being the leading player in the Baltics. And when it comes to e-commerce, the Norwegian market clearly has been lagging to many other markets.
Even though we have been in Sweden supporting our customers in getting, e-commerce solutions out there and locker solutions out in the market, achieving a 50% pickup rate in store, there's still ample opportunities there as well. I'm very positive about the, about the opportunities in our traditional core markets. Of course, what makes me really excited, and which should make you as investors really excited, is the vast space in Spain and the U.K. market, for which, we both have a long way to go in serving the grocery retailers and, and at least getting our, call it Nordic solutions into those markets. Last page, if we may go to the next, summing up before, I believe Petter have some questions. Why do we believe that, StrongPoint is a long-term partner both for grocery retailers and investors?
Well, first of all, we focus on grocery retail. So, whereas in today's environment, retail tends to be followed by sort of non-investable kind of story or at least a difficult investable story, we're focusing on the resilient grocery market. 80% of our revenue stems from the grocers. We see significant growth opportunities in the existing markets, surely in the more stable Nordic markets, where we have a very good position and reputation with grocers, but not least in the major markets that we have entered more recently in UK and in Spain. And then lastly, we believe that technology will be part of the solution for grocery retail businesses going forward.
As I said, if you've, if you only started with electronic shelf labels, going back to paper tags again is not really an option. So we believe that more and more technology will be making its way into both stores and into e-commerce operations, and StrongPoint is there to support the grocers with exactly that.
Okay, Jacob, thank you for that. A couple of questions. I mean, you have definitely, you know, seen a more challenging market lately, despite, you know, serving the non-cyclical grocery sector. Can you give some short comments on what has been the key challenges? Thank you.
Sure. And no, you're right. I mean, even though we are serving the resilient grocery retailers, they're not completely immune. To some extent it feels like, you know, there is a uncertainty in the market and the natural reflex is then to sort of put the investments on a pause or push it out in time, more than anything else. I think it's important to recognize that, even though grocers themselves would be claiming to have a tough time, because most of the revenue growth has been driven from price increases, there's, you know, there's an ocean between the world the grocery retailers live in, having enormous amounts of free cash flow versus sort of other non-grocery retailers.
So this is absolutely not a push-out in time because you cannot afford it, so to speak, but rather a reflex from which uncertainty is driven. So we see that most of the projects that we are or have been working on or RFPs have been sort of pushed out in time, not canceled, but pushed out in time. But you know, as an anecdote, I was meeting with one of our customers' C-level suites. Whereas the... There's lots of discussions and com—I wouldn't say almost complaints about how the market is evolving. I mean, there's still, you know, a couple of billion NOK of currency in free cash flow with this grocery retailer.
So they're very strong, still, luckily.
And you know, despite then that orders are more challenging to close, so to say, can you also share some very short comments about the activity level, talking about, you know, the pipeline, the leads? And then obviously you can exclude this groundbreaking contract with the cash management solutions.
Yeah, I mean, we have, there's two things to be said on that. One is, of course, we have no experience that the activity level has showed on revenue, has been going down. And on the one hand side, we have had to take actions based on that. So at the end of Q3 presentation, we also announced a cost reduction, meaning head reduction, across many of the countries we operate. In total, we expect this to generate some NOK 20 million per annum effect as of January 1. So of course, that leads to some restructuring cost in this quarter, but it's absolutely needed.
On the other hand side, we have some major opportunities also beyond this cash management solution, CashGuard Connect, that we talk about, where we're starting to see some of the major grocery retailers getting the eyes open for StrongPoint. StrongPoint might be sort of unknown to many investors also here in the Nordic market. But we certainly have a long way to go to get the StrongPoint portfolio to our customer base, and not least, into the new countries. And that's hard work. It's a marketing effort.
It's being at trade shows, it's engaging in, in, in customer meetings, and it's not least, bringing some of these major grocery retailers in, in both UK and, and Spain into the great customer base and references that we have in, in our traditional stronghold markets. So I'd say the, the, the, the pipeline is, is, is good, with some major, major retailers. At the same time, it's, honestly, I would- you know, it's anybody's guess on when is the sort of turn going to come? When are we going to start seeing, more improved macroeconomics? Is that Q1, Q3, Q4? Who knows? And we wouldn't bet on that, but that's why we also needed to take these, cost, efficiency measures.
Okay, perfect, Jacob. Thank you so much for the presentation, and good luck with the upcoming groundbreaking order and potentially new orders. Thank you so much.
Thank you, Dan.