Good morning, everyone. Welcome to StrongPoint's first quarter Q&A audio call. Today, we have Jacob Tveraabak, CEO of StrongPoint, and Marius Drefvelin, CFO of StrongPoint, to answer your questions. Before we start, let me give you a quick recap of the highlights from this morning's Q1 presentation. Revenue for the quarter was at NOK 342 million, which was flat compared to last year's first quarter. The 12 months rolling recurring revenue increased by 3% compared to Q1 last year, ending at NOK 384 million. That's +3%. Year-to-date, the EBITDA was at NOK 10 million, on par with Q1 2025. Before we start, a quick reminder to everyone. If you would like to ask a question, there should be a button in the lower right-hand corner of your screen.
Obviously, you can also ask questions via the investor@strongpoint.com email address, and we have already received a number of questions. We'll kick off already on some of those. First question regarding e-commerce in Vision. In the last quarterly report, you stated that we have launched the shelf-verified order picking solution with Vision, integrating Vision's on-shelf cameras with StrongPoint's order picking. Can you please say which retailer or retail chain this was launched with? For you, Jacob.
Thank you. I apologize right away for that pollen allergy. Yeah, I mean, first of all, this has been launched as a product, not with a customer. I think, you know, it's important for investors to understand that, you know, whereas order picking or e-commerce is getting more and more mature, you know, and ESL is also getting more mature in the markets. Shelf-edge cameras is at the very beginning or inception of its journey into grocery stores. There's very few today grocery stores that have shelf-edge cameras. Walmart has it now with Vision. Carrefour has it also with Vision. We hope to see many more of that coming, and that's when this product will really or feature will come really into play.
As of now, it's a launched product but not launched into a specific retailer.
Next question, also on order picking. In the investor update, you stated that your goal is to dominate manual in-store order picking. What is the current global total addressable market for this? Regarding definitions, for me to dominate in a business context means having the highest revenue. That's from the question. Does StrongPoint use a similar definition for you as well, Jacob?
Yeah. To maybe start with, start with the latter, to dominate. I mean, yes, we want to be the preferred and as such, then the biggest provider of in-store grocery picking solution. Now, if we're trying to sort of give some numbers to this and helping the audience, I think the way to think about this is if you're a bit, if you're a bit difficult to say conservative. If you consider the Western market, the Western e-grocery market, so North America, Europe, and we'll be talking in ballpark $500 billion . Right. Now, most of that, roughly 80% of that is being picked in stores. That means only 20% is being picked like Ocado is doing or Oda is doing, et cetera.
80% is picked in-store. That means out of the $ 500 billion total market for e-groceries, $ 400 billion of revenue is picked in stores. That's the revenue in stores. If you, again, ballpark use across the board, a basket size, and here we have to remember that markets are quite different. Baskets at ballpark, we can talk about $100. In the Nordics, it's higher. U.S. is a little bit lower. If you use $100 on the in-store volume being picked, which is $ 400 billion, we get to 4 billion orders. There's roughly 4 billion orders being picked in-store in the Western markets.
The question is, you know, we price our product with a fee per order. You can, you know, that this ranges of course, between big customers where it's, you know, ballpark is closer to NOK 0.10, to smaller customers where it's NOK 0.50 or NOK 0.60, but that's per order. Let's assume NOK 0.25 per order. What we're talking about then is $1 billion or NOK 10 billion. That is what should be our target. That's the market we want to dominate. It's also important to recognize that this is a market which we want to dominate, that's not only static, it's growing actually, across the board in Western Europe. This is a market that's growing at roughly 10% every year.
I hope that satisfies the investor question.
Okay, another question. Can you provide any further information regarding the leading UK-based e-commerce retailer going to install an AutoStore? Is it their first Auto installation? How many stores or fulfillment centers does it have in the U.K./worldwide? For you, Jacob.
Okay. Yeah, we're not allowed to disclose the name of this UK-based e-commerce retailer, but it's a retailer. It's not a grocery retailer. Still very important for us to get traction on AutoStore in the U.K., and this is their first AutoStore installation. What I can say is that they have, you know, 60% of their market is in the U.K., but there's also facilities outside the U.K. in Europe. In total, three sites. I think if the question alludes to could there be more? There could be more even in the U.K., but it could also be more outside the U.K., at least today, into other distribution centers.
Okay, next question. A bit broader. Do you see any signs of delayed investment decisions following increased macroeconomic uncertainty? Marius, this one for you.
Well, I think the answer to that is a vague yes, in the sense that, yes, we are experiencing, I would say actually continuing to experience that we are seeing some delayed decisions. We're definitely seeing the global uncertainties, although it's not impacting our supply chain or anything as far as being able to deliver, yet, at least. I think there's a yes to that question. There's also another aspect that we have talked about for a little while, where we are seeing that our customers still have to balance between investing in pricing of their own goods or giving discounts, if you may, compared to purchasing new equipment from the likes of StrongPoint. That, with the current conditions, is probably impacting the investment decisions as well.
To summarize, yes, but not to a large extent yet.
Okay, one final question. If you have any more questions, please don't hesitate to put them in online because we will. There is a small delay between you writing the question and us seeing the question here. Next question. How close are you to a CashGuard Connect deal in Spain, or would you be disappointed if not reached within 2026? One for you, Jacob.
CashGuard Connect, first, let me just start by saying that this has been a test and is a test of patience. I mean certainly, we were not expecting it to take so long to develop the solution, right? Some of this is, you know, unfortunate, but it's possible to explain. You know, first and foremost, the bankruptcy of our joint venture partner, Hartmann Electric, in Spain. Now, that bankruptcy is being contained and handled, and we're very positive about what we can achieve to secure those assets and what we can achieve in making sure that that is not a question mark for both investors and customers.
There's a lot of customer demand for the solution that we have secured. We're still in that position that we want to get the product into a industrialized mode, and it's only first then that we can really take in big orders. To Jørgen's question here, that's, you know, even if we did get a big purchase order, you know, we wouldn't be able to produce that in 2026. On the other hand side, it's also unlikely that any retailer would place a big order unless the product is already industrialized. We have to give ourself a little bit more patience, but the customer interest is absolutely there.
The bankruptcy estate is being handled, and the, and the product is getting there.
A few more coming in. You state CapEx of NOK 7 million in the presentation. CashGuard is NOK 3 million, and POS is NOK 1 million. What is the balance spent on? Sorry. Question for you, Marius.
Right. We're assuming that the balance refers to the residual. The short answer is traditional CapEx. It's fixed assets. We have service cars in many of our countries, et cetera. This is more of what we would refer to as traditional capital expenditure.
Okay. Next question, translating for me from Norwegian. Is there any danger ahead of the Sainsbury's contract/delivery, noting that the progress was delayed?
As we stated in the report, I mean, the rollout has taken longer than anticipated, expected. I mean, from both our side and from Sainsbury's side. I think, you know, in retrospect, I mean, we have to remember, Sainsbury's is a absolute behemoth in the U.K. grocery retail market. It's $60 billion worth, or yeah, dollars is the correct, dollars worth of revenue being picked in stores alone, right? As you can understand, having also 20 years of experience of doing picking in store, with that sort of share volume, you want to have certain features and functionalities that we have agreed upon in the contract to deliver on, that we will deliver on.
As always, it's taking more to get it across than we were hoping for. That said, we are in very good dialogues with Sainsbury's. I was at one of their stores two weeks ago, overseeing the early morning picking operations and seeing that there is absolute progress. You know, it's taken longer than we anticipated, but we are very positive about how this will evolve forward.
Staying in the U.K., are there any updates on Vensafe in the U.K.? One for you as well, Jacob?
Yeah. We're not commenting specifically on any updates. I think in general, I want to say that, you know, yes, there's absolutely a continued interest for Vensafe. We are, you know, there's a pro and a con, right? The pro, unfortunately I should say, is that, you know, theft is already high and still on the rise in the U.K. That makes the Vensafe solution very suitable to handle those sort of challenges. The con for Vensafe, if I may use such a term, is like there's the tobacco legislation in the U.K. is a bit more strict than in Norway regarding dispensing of tobacco. Sure, it's possible to dispense, but there's a little bit more cumbersome process.
You know, these are immediate and present challenges to get the Vensafe out in the market, but there's absolutely interest to get it out in the market. We're still working with many of the grocery retailers there to make sure that we get the Vensafe out in the market, although at a slightly different use case than we anticipated regarding tobacco. On the other side, more on other types of theft-prone items.
Okay. Next question. In cash flow movements, it is stated NOK - 11 million in other prepayment. What is this referring to? A question for you, Marius.
Yes. That's referring to a combination of many items in the balance sheet. We have this every quarter and every year. Essentially these are prepayments to anything that could be public duties, suppliers, rent, et cetera. Now, we have specified some of this in working capital, et cetera, but it's not possible to be super detailed on that. It's generally prepayments. It could be a project that requires some prepayment before we get the payments back to us. This is more of a general general prepayments on both suppliers and the operational costs.
Okay. Next question. I think I'm gonna elaborate a little bit on the question. I think the question is: Are there any opportunities or are we seeing any opportunities for self-checkouts outside the Baltic region? I think a question for you, Jacob.
Yeah. I think the question also comes from the fact that we are, you know, the number one player when it comes to self-checkouts in the Baltics, whether that's with our own hardware and software or our software and third party hardware, right? You know, are we able to replicate that elsewhere? That's certainly the ambition and the goal. You know, we should be aware these are long sales cycles to get in. I'm looking forward to the day that we can shop in self-checkouts in Norway personally. That is a StrongPoint self-checkouts, but it's taking some time.
What I can say, though, is that, you know, we have already had success with our self-checkouts outside the Baltics, in Iceland, for instance, and, you know, that is a case that we're being able to also showcase externally, and that's with Prís, which is one of the grocery retail chains in Iceland. I hope you'll be able to see that we have super happy and satisfied customers also outside the Baltics with our solution. Of course the ambition is to, as we get more known for offering this solution, to see that coming into the market both in the Nordics, in the U.K. and Spain.
Next question. We take large contracts on CashGuard in Norway, but why isn't CashGuard good enough for larger customers outside the Nordic region? What's the difference? What's the reason?
Yeah, I can take that. I think, you know, first of all, we do have some great partners outside both Norway and Sweden. You know, we've had, you know, a South African partner, Irish partner, French partner that have been selling our CashGuard solution for many, many years in a very successful manner. Do I believe that our current CashGuard solution is good enough for other markets? Yeah, absolutely, I believe that, right? Whilst on the other hand side, it's important to recognize that there are some subtle differences in the different countries, and I'll give the most relevant one, which is sort of Spain. I mean, for those of you that have been following StrongPoint for a while, we do
we did and we do deliver CashGuard solution or traditional CashGuard solution to Alimerka, which is a regional grocery player in the Spanish market. That has been very successful. It's also the only grocery retailer that has really embraced a cash management solution. The default in Spain still is to use manual cash drawers that you saw in Norway in the 1990s, or maybe even 1980s. That's kind of what we're competing with. Why is it taking so long? I think, you know, we have to recognize that at least in the Spanish market, there's a huge volume and huge velocity of cash that needs to be handled.
You know, we can argue all we want with customers, "Why don't you also go the path of Alimerka?" This is also the reason why we started developing the CashGuard Connect solution, which is more tailored to a very cash-heavy market. Now, as for CashGuard, just to go back on that, I think absolutely there is still potential. It says here Norway, but, you know, Sweden of course we're already selling CashGuard. I'm hopeful what we can do in Finland. As I said on a number of occasions, thanks to Vladimir Putin, cash is not going away anytime soon, and nobody knows this better than the Finns. I'm hopeful for what we can achieve also with the traditional CashGuard.
Okay. I think that is it. We haven't received any more questions. I think we will call it a day. Just giving it a few more seconds just in case there's one more coming in. Nope. We think we'll call it for a day. Thank you very much to everyone for joining us. We'll see you at the next quarter. Thank you.