Earnings Call: Q2 2020

Jul 15, 2020

Hello, and welcome to Expert AB Q2 Report 2020. Throughout the call, all participants will be in a listen only mode, and afterwards, there will be a question and answer session. I will now hand the word over to Alexander Berreindorff, Head of IR. Please go ahead with your meeting. Thank you, and good morning. This is the Axo's Q2 2020 telephone conference. And with me today are Charles Balko, our President and CEO and Anders Lechtsmann, our CFO. In the Investors section of our website, you will find the presentation for today's call, which is intended to be viewed in conjunction with our prepared commentary. We encourage you to follow along with that presentation. After our prepared commentary, we will be taking questions. A recording of this call will be made available on the Axolut website. I will now turn the conference call over to Klas. Please go ahead. Thank you, Alex, and let me also, of course, welcome you all to the presentation of Akzo's Intrigue report for the Q2 2020. And let us start by turning to the next page, Page 2. So here you'll find the agenda for today. And first, I would provide an update on the development in the overall market, and then we'll go through the Q2 for Akzo. Anders will then present the financials and give you an update on our financial position. Our presentation concludes with the outlook for 2020. And then as normal, we will end the telephone conference with a Q and A session. So please now go to next page, Page 3. And before we go into the Q2, just as a very quick reminder for you who don't follow us on a daily basis. We are a leading food retailer in Sweden with a clear houses brand strategy with a vision to be leading in good and sustainable food. We have a family of successful and distinctive food concepts that rest upon a close collaboration. Our rolling 12 month sales is now more than SEK 52,000,000,000. So please ask you to go to the next page, Page 4. And on this slide, I would like to take the opportunity and share with you that actually in this quarter, Axwood celebrated 20 years as a company. But the journey began long earlier, as you may know. The first hemp shop store opened up in 1958, and Willi's predecessor, LS Liss with, as they call it at the time, ridiculously low prices, was started in 1975. But it's fair to say that we have had a successful journey over all these years. And if you look at the compounded annual sales growth of approximately 3% since 2000, but since 2015, our compounded annual sales growth has been approximately 5%, a period where we have clearly gained market shares. Let's now turn to Page 5, and let me go through the recent developments in the Swedish overall market. So please go to Page 6. We have, as you all know, an exceptional time with an overall strong market growth within food retail at this time. We've also seen some clear accelerated online sales behind the pandemic that we've seen and that we are facing at the moment. Consumers have to a higher degree opted to eat more at home. And as a consequence, we also see a weak demand in the restaurant market. But I have to say, while growth in the food retail market in general is strong, the situation is challenging also within certain segments of the food retail market, as an example, in stores in central urban location as well as in non cross border trade. If we then move on to Page 7, that presents our monthly growth for the whole Swedish market. And as we talked last time, March came out as a very turbulent month. And as we then presented, there was a significant hoarding, but we're all pleased now that that has phased out. But in the Q2, growth has stabilized at an overall higher level than before the corona pandemic broke out. We've seen a clear market growth the last quarter, particularly growing from in April and then moving up in May June. If you then go to Page number 8, the growth has also accelerated in the online channel in the second quarter and continued to grow. In March, more or less all players in the market was not able to manage the fast increase in demand, while all players in the market has then gradually built up its capacity. But the growth online compared to a year ago has now been above 100% for the last quarter. So we've seen a significant uplift in this segment at the time, and I will come back a little bit more and comments on that. Let's now turn to Page number 9, as I would now like to go through Axfood's development in the Q2. So please then directly go to Page 10. And first, some overall summary comments. I have to say that we still find ourselves in a turbulent and exceptional time. The coronavirus has had and will continue to have a major impact on our society and also on our operation. For Ax Food, the Q2 marked a strong achievement despite, I have to say, challenges within certain parts of the organization with strong growth and maintained profitability. The very strong development within certain parts of the company where I have to say the growth rate for the Village stores is particularly noteworthy. But it was compensated for those parts of the company that had been dramatically affected by the coronavirus. We're also seeing an accelerated growth in our business for our e commerce, and we continue to make strong progress for a more sustainable future. I'll give you some more comments on that later on in the presentation. So please now go to the next page, where we'll start to go into our key ratios, and I'll start with sales on Slide 11. Our consolidated net sales grew 4.1 percent during the quarter to SEK 13,600,000,000. We have not seen any significant calendar effect. However, we, as everyone else, observed a positive effect on food retail coming from people staying at home and consuming more food at home. We noted a high and an accelerated growth for Village Stores compared with the Q1 that was partly offset by a sharp drop in sales for our cross borders grocery chain Eurocash. And I'll come back a little bit more on that with more details on Eurocash later on, but I want to remind you of that Eurocash is part of the Village segment. HEMCEP grew almost in line with the market, and that was also despite sales for the Groupon stores were impacted by significant less consumer traffic in center locations in larger cities. And the challenging quarter we've seen for with Snubgroze that we commented on in the Q1, you've seen that, that is continuing. Now we've seen a weak restaurant market, so sales for Snubgroze is now down 7% versus last year. If we then go to Page 12 and looking how we are comparing our growth versus the overall market. And if we look at our store sales, we continue to gain market shares. And as I said, this is an achievement despite the headwind from Eurocash. As our in our sales data, we have Eurocash is part of our sales data, while in the market, the majority of the competitors is not. So but that's fair to comment on that. Our growth amounted to 8.3% in the quarter, which compared then to 8.1% for the overall market. And if we then go to next page, Page 13. Our online growth accelerated and came in at 128% growth versus last year. Also here, we outperformed the market as market growth amounted to approximately 113%. We have worked to expand our capacity in this period and particularly see a very positive growth in our Click and Collect operation. Let's now turn to Page 14 and look into our operating profit. We report a slight increase in our operating profit, but at a somewhat lower margin. The profit growth was clearly supported by strong like for like development and also higher operating profit for DAGA behind improved efficiency. Several of our business experienced a challenging time due to effects from the corona, including then Eurocash, Ax Food, Snabgos and UrbanDelhi, and this has been a negative effect on our operating profit. The sales in the online channels was accelerated, and we consequently have higher costs related to that, including higher personnel and logistical costs. And we also have in this period invested to drive growth in our pharmaceutical business, Oppohem. But all in all, operating profit came in at SEK605 1,000,000, which is up approximately 1%. If we then move on to the segment overviews, and I'll start with our largest segment, Village, on Slide number 15. Have to say a very strong quarter. Sales growth of almost 9%, clearly outperforming the market with a like for like growth of 7 percent. And particularly note that in this segment, it includes Euro Cash. We've seen accelerating growth for Village Stores, positive effect from higher consumption at home. Also very strong growth online and we continue to roll out our online offer to more stores and more cities, particularly behind our Click and Collect offer. We have, as commented now a few times, lower sales on Eurocash as cross border shopping has essentially come to an halt following Norway's imposition of travel restriction to Sweden, which significantly dampened growth for the segment as a whole. Sales for Eurocash fell by more than 80% compared with the same period a year ago. Despite that, operating profit growth of 6% with a slightly lower margin at 4.8%. And operating profit driven by strong like for like, particularly then offset by loss for euro cash and higher personnel costs, largely due to higher share of our online sales. But if you then turn to Slide 16, and let me make a few more comments on Eurocash, as it has been, as you may understand, a challenging quarter. As overwhelming, majority of our customers, they come from Norway, so that has made a clear impact due to the closing of the border. We also have some significant seasonal effects as Eastern and summer is very important for our business in Eurocash. Now to give you some number, Eurocash represented approximately 5% of sales within billings segment in 2019. And while we have tried to reduce cost to mitigate the effects of the sharply lower sales, a significant part of the cost base is still there, such as rent and some staff costs as the stores are still open as we want really to be ready when restrictions will ease and the border will open up. While majority of our employees are also on short term short time work, we have so far not applied for the government support behind this. But as a consequence, significant loss for your cash in the Q2, but clearly, we hope the border will open up soon to all of Sweden, not only as it is now for a few regions. With having said that, obviously, if you look at the village performance outside Eurocash, it has been clearly a strong growth and clearly gaining market shares. Moving then to Hampshire on Slide 17. Total sales increased 7.6%, supported by very strong growth for our franchise stores, where they also clearly gained shares. Like for like came in at 4.3%. Also in Hampshire, obviously, a positive effect from higher consumption at home. However, also the growth for our group owned stores was hampered by less customer traffic in central urban locations. So we have seen a clear challenging situation for certain of our stores. We report higher operating profit at SEK53 1,000,000, which is basically a flat margin. While the earnings were positively affected mainly by higher like for like in the Groupon stores, but weighted down by cost for handling and also the e commerce expansion that is now we are increasing our capacity also in Hampshire, which then drives some higher staff costs similar to we've seen in Willes. Now the amount of people in central urban location have decreased significantly during the corona pandemic. So on Page number 18, here we'll find the data in the chart to the left that has been compiling using aggregated information from mobile networks that shows that the movement in the city centers in Sweden decreased by 24% in March and by 40% in April. And the locations of our Groupon stores are skewed more towards city centers than comparing to our franchise stores. So if you look at our Groupon stores, half of them located in what we call flow locations, I. E, locations in city centers with a low relative share of housing. Now looking at the franchise stores, only 1 5th are located in such locations. So in summary, our Groupon stores are more impacted than our franchise stores when it comes to traffic pattern in city centers and also then consequently more impact by the current situation. Let's now go to Page 19. As I in this time, I would like to say something about Tempo, our minimart format that is part of the Hampshire segment. Now we are not operating any of our Tempur stores ourselves that has franchise collaboration with 126 independent Tempur retailers. They are slightly smaller assortment and retail space, obviously, than Hempshoe and are mostly are located in countryside communities or suburbs of major cities. It is an important contribution to thriving countryside as they often also offer services such as package pickup and pharmaceutical sales. But I have to say, I'm glad to see a very positive development for Tempo in this period and also in this quarter as sales is up 14%. Moving on to Axwood Snabgos on Page 20. Well, as we have commented also in the Q1, it has been a challenging time and also a challenging quarter, where sales were down 7.1% or like for like down 8.3%. We are clearly obviously hurt by the weak restaurant market. But I have to say also, it's been a gradual improvement over the quarter. That was now we've seen a clear effect due to some of the easing of the restrictions and I also think by favorable weather conditions in the end of the quarter. With that said, it's been somewhat difficult now to forecast the rest of the year. But it's for sure worth mentioning that the development for snub growth is clearly better than for the overall market as a whole. As you know, cafe and restaurant business in general are suffering more than 7% during this period. Our operating profit and margin is significantly lower at SEK34 1,000,000 and the margin at 4% due to obviously then the negative like for like development. If you then go to Page 21. So during the recent month, Axoslabros has temporarily opened up half of its stores to consumers. And we have done this behind 2 clear reasons. First, we want to provide the consumers with an additional place to shop groceries during the corona pandemic. But secondly, this is also an opportunity to mitigate the negative effects on the business steaming from weak demand in the restaurant market. I have to say so far, however, this has marginal impact on sales, but we now will continue this at least until August, but we will evaluate this and see if there is a strong demand where you can extend this opportunity to December. Let's now move to Slide 22, and I would like then to go through DAGA. We noted a higher delivery reliability than we had in the end of Q1, even if I also have to share that we are not really where we exactly want to be, but it's a clear improvement, and we have seen a very positive work with our suppliers to handle this increased demand. Sales growth of 5.6%, which is then driven by strong sales to Villas and Hampshire. We have some negative impact from lower sales to Eurocash, Axos Navios, but also from convenience retailers, which also has been affected by less people moving around, obviously. The negative sales growth is also impacted from Urban Deli. As you know, there is also the restaurant business is positive development for Malpa Peste despite the closure of Malne Dog Stores. So we also done some clear efficiency gains at our dog store operation in this period. We report higher profit for DAGAB at SEK189 million, which obviously is an effect of the improved sales growth and also efficiencies, which has been positive in the wholesale business. But also, we have costs related to significant increase in our e com and then e com logistics driving more costs, but also cost to support growth in Apergem and a clear weak result for Urbandelli. If you then go to Page 23, I would like to talk a little bit more about the online segment of the food retail market and particularly how it looks for us. As in many other trade sectors, online sales has now accelerated during the pandemic. And we have clearly experienced a high growth and also, pleased to say, outperformed the market. But the pandemic has prompted more and more people to shop online, and there is a steady stream of new customers coming in. And if you look at the chart there, more than half of the growth in this quarter compared to a year ago was driven by sales from new customers. And also interesting, all the demographics, nearly a fourth of all orders in the second quarter were placed by customers older than 70 years, which is up from only 4% in the Q1 this year. Now the key questions, obviously, will then be how this new customer group will act when the pandemic is over. In any way, we continue to drive our strategy to be flexible and open for changes in demand. So on Page 24, we highlight some recent initiatives to strengthen our offerings online. We've done co delivery of groceries and pharmacy products via Motto TSE, which is an exciting collaboration that will become even better now when Apehem moved to our common dog store in Stockholm this autumn. And Willys continue to expand mobile click and collect now at we are offering that at 4 Circle K gas stations in Stockholm. It's early days, but very positive feedback from our customers. And also happy to report that Hemship has accelerated its online expansion, and we are clearly increasing our capacity. We are now in 30 stores, which is 9 new stores in the Q2 compared to the Q1 this year. Let's now turn to Page 25. At the same time that we've had that we have devoted efforts to meeting new needs and behaviors, we are continuing to continue to work on our sustainability and taking steps toward developing our business for the future. And some recent initiatives you find here on the slide. This autumn, we will be first in Sweden to offer eggs from free range hens that are fed soya free feed. We have continued our work on reducing the use of plastics. Measures has now been taken during this period that will contribute to reduction in yearly use of plastic by more than 25 tons, all in line with our target to reduce use of plastics within our own operations by 25% by 2025. And we're also working continuously with food innovation. And during the quarter, our own label, Garant, launched 3 unique ready made meal solution based on Swedish grown legume means. With this, please turn to Page 26. And with that, I hand over to our CFO, Mr. Anders Lexmann, who will present our financial position. Anders, please go ahead. Thank you, Klas. And let me then first sum up the first half year and return to Page 27. Net sales for the group increased with 6.7 percent to SEK 26,600,000,000 Store sales for the Ekso Group increased by 9.9%, and that's compared to the market 8.6%, means that we gained market share in the first half year. And operating profit increased with SEK 62,000,000 or 5.7 percent, and the operating margin decreased somewhat from 4.4% to 4.3%. And let me then continue with the cash flow on Page 28. The cash flow for the 1st 6 months had again stronger cash flow from our operating activities compared to previous periods. And operating cash flow amounted to nearly SEK 2,200,000,000 and was SEK 3 89,000,000 higher compared to last year. SEK 102,000,000 of that was explained by a positive effect in the net working capital. The positive effect we saw at the end of Q1 due to the hoarding is now erased, but the strong growth helps us to be more efficient in our inventories, both in our warehouses and in stores. And as we grow our business, we also continue to see improvements in our accounts payable. We also, in the Q2 last year, did an additional tax payment that we didn't do this year, which also explains the improvement in the operating cash flow. And as I mentioned, in the Q1, the annual meeting in March decided to divide the dividend into 2, one payout in March and one in September, which also explains a positive effect of approximately 7 €30,000,000 compared to last year. And on the negative side, we had higher investments this year, and that is explained by a divestment of an asset hold for sale last year of approximately SEK100 1,000,000. If we then turn to the investments on Page 29. For the first half year, that amounted to SEK497 1,000,000 and was in line with last year. The investments in our retail operation was up SEK 40,000,000 due to some higher pace in the refurbishments in our stores. And we also saw some higher investments in IT this year compared to last year. Also that due to more store refurbishments, but also higher investments in IT projects during the first half year. The wholesale investments decreased somewhat due to the investment in our warehouse in Johan Sjosten last year. If we then turn Page to the Page 30 and look at our development of our net working capital, we can see that we, in the 2nd quarter, further decreased our net working capital compared to sales to minus 3.1%. And as I mentioned before, we managed to be more efficient in our inventory due to the strong like for like growth, and we also continue to increase our payment terms for accounts payable. Let's then turn to Page 31 and take a look at our financial position. And looking then at the development of the net debt at the end of June, we have the net receivable position if we exclude IFRS 16, and that amounted to €478,000,000 That's the dark blue stage fell in the chart. The strong position at quarter end is also mainly explained by the lower dividend in the Q1, but also from a strong operating cash flow in both the Q1 and the 2nd quarters that we see earlier. The net debt EBITDA ratio decreased somewhat compared to the Q1 and was 1.1 at the end of the first half year. And the equity ratio was in line with last year around 20%. And even though only half of the dividend was paid out, the equity was impacted of the full dividend at the end of the quarter. The dividend that will be paid out in September was recognized as liability at the end of June. Let's then turn to Page 32. The capital employed was impacted over the dividend in the Q1 and decreased to the same level as at the end of the Q2 last year. The development of return on capital employed has now decreased from 40% at the beginning of 2019 to approximately 25 percent now due to IFRS 16. And finally, we can conclude that AXS will continue to invest in the future and at the same time have a strong cash flow and a solid financial position. And with I hand my end part of the presentation, Claus, and hand over to you again. Thank you, Anders. So let's now please turn to Page number 34 and looking into our outlook. So we have no changes to our 2020 outlook. We plan to invest €900,000,000 to €1,000,000,000 this year, excluding acquisitions and leasehold. And we don't forecast any major investments this year in our automation project for the new logistical center. We plan to open up 5 to 10 new stores this year, and we already have 5 new stores so far in this year. So let's, with that, go to Page 35, and let me sum up this presentation. We continue to work hard to meet the changed consumer behaviors and the increased demand in very special times. I would like to say that we performed well in the Q2 and grew more than the market despite the challenges we faced in part of our business. And I must state, it has been a remarkable achievement, particularly in our Villas chain. Looking forward, we are really well positioned, but we have continued challenges, particularly in Eurocash and Urban Delhi. Our financial position is strong, and we also have site sets on a long term to further strengthen Aksu. With that, I please ask you to turn to Page 36 and hand over to the operator to open up for questions. Thank you. Thank you. You. Our first question is from Daniel Ochsznik from Danske Bank. Please go ahead. Your line is open. Yes. Good morning, Claus, Anders and Alexander. A couple of questions from me then. Starting with the VILIS and Eurocash, could you shed some more light on the loss in Eurocash? What would sort of the underlying Villis EBIT be if you take out Eurocash? Good morning, Daniel. Well, I think we've been guiding around that in terms of the turnover for Eurocash, and we also have commented earlier on that Eurocash is in line with our profit in general. So with that, I think you can a bit calculate that we are not only now not having the profit, but we're also having some significant losses, obviously, with no turnover and the stores are still open. So we're not guiding it in terms specifically, but it has been a clear impact in this quarter. Would it be fair assume that, that could be around SEK 30,000,000 SEK 40,000,000 in negative for the quarter? It is significant. All right. And of course, it's not in your hands, but Norwegian government was out the other day opening up for sort of 3 parts of Southern Europe Southern Sweden that was sort of open for the Norwegian border. What do you do you have any sort of expectations or insight into when the rest of Sweden could be sort of out of this Norwegian border closure thing? Well, I think that I don't have any more insights than we all have in terms of that. I think that the there is at least a good dialogue right now between the governments as I've understood it. And I think it's important that the dialogue continues and that the government now is trying to sort this out as quick as possible. I think they've been fairly clear in Norway in terms of what they would like to see in terms of some measures. Also, as you know, yesterday, we heard that some of our measures in Sweden is clearly going in the right direction. So the only thing I can say that I hope that the border will open up as soon as possible. Yes, of course. And are you seeing the same trend in start of Q3 as you saw by the end of Q2 in terms of this particular issue? No, I'd say the that I'm not really commenting on the Q3, but obviously, when it comes to the border part, there is no changes. Their border is still closed. And we still have not a full, but almost a full stop in your cash business. But we are taking the decision so far that we want to be ready and we want to have our staff ready, we want to have our stores ready, we want to be in good conditions as soon as the border open up. And so and we hope it will not take too long time. But we don't know. And I think it's fair to say that and we want to be clear on that, that we are in this situation. I think we are if you look at still the segment in Villis is doing really well, and obviously, that is a consequence of that Villis is performing really well in this quarter. But obviously, we want to see now that Eurocash has opened up as particularly it's also obviously this it's a seasonal business as well where the summer period is soon over, which is not so positive in that perspective. Sure. Understand. Jumping on then, online growth is, of course, extremely elevated. And you're saying that growth has stabilized for inside sort of group at a higher level. Where sort of what does that sort of what conclusions do you draw from that when it comes to store expansion? Do you feel in any way that you need to revise your store expansion plans given the online growth that you're seeing? Or is that No, but I think that the I think that it's fair to say, Daniel, that we've seen significantly increased demand now in online. I'd also comment that on some of the slides that we show that there's a high inflow on new customers, particularly elderly customer then comes in. And the question obviously, what will they do when they are then they can go out in the stores again. But then it's fair to say, I think, for us, the omnichannel structure is important. And if you look at the growth rate from the physical stores, it's significantly higher than the growth if you talk numbers, not percentage points. So we still have a positive development in our stores. We also the combination of online and stores in terms of our Click and Collect operation is important. So we still see opportunities to further invest in our stores. We at this stage, we don't we have common dark stores or dark store operation in a couple of large cities. But when you look at the countryside in general, we don't forecast at this stage that we will have dark stores. So there were the stores will work as picking stations for the online business, particularly then the Click and Collect is also interesting as I think the Click and Collect business now is really driving the growth. Yes. And when you say sort of stabilize at a higher level, where are we, do you think, in terms of the two trends, eating at home versus the decline in Horikka? Of course, Horikka is probably being sort of coming back a bit towards the end of the quarter. Could you shed some more light on that? Well, I think the and if I look and then if I hear, I'm not sure that the overall Rekha is I think we, I think, probably seen a little bit more positive effects from snub growth than the overall market. That's our assumption at least, which is related to that Snubgo's business model with stores where you can quickly go and fill up and you can quickly be more adaptable to the changes. And so we've seen, as I shared, a more positive development in the end of the quarter in Snavios. The quick questions that I think everyone is now asking, how long will the pandemic continue and when will it go back to normal? And I think so far at least that even if we start to open up more and more, I think it will take it will be a gradual improvement to go back to normal and that will take some time. I think we'll still have some restriction in terms of how close we are sitting next to each other, which means that the capacity in some of the restaurants will be more limited versus before and so forth. So it will be a gradual improvement. That's my best guess at this stage, but I don't think anyone really knows. No. Okay. And then just finally on food price inflation. I think that you wrote it was 3.3% in the quarter. Was it a bit higher at the start of the quarter? Is that correct? We noted it was a bit higher, particularly related to the weakened Swedish krona and related then to fruit krona has strengthened as well in the end. So that's great. And our next question is from Magnus Raman from Kepler Cheuvreux. Please go ahead. Your line is open. Thank you. Firstly, I have some more questions on the online side. You mentioned, of course, a very strong online growth, somewhat above the DVI index. But do you deem that online growth would have been even higher if you had greater delivery capacity, I. E. That is delivery constraints that have set this number? And the same goes perhaps for your remarks about Pick N Collect growing faster. Would that perhaps be explained by higher capacity there than in home delivery? I think it's fair it's a fair assumption. Obviously, if I look at, as I commented as well, in particularly when it started in March, April, the fast increase you noted from us and from, I think, the rest of the market as well that the delivery times was not where we wanted to be. But in we have increased our capacity and built that up. I'm sure that with particularly some of our dark store operations in general, we could have had an increased volume because we still had some days that we've been the capacity has been full. And at the same time, we're also adding more stores and more Click and Collect solutions and seeing a positive effect out of that. So if we've gone even faster, obviously, that would have been increased as well. So it's probably a fair assumption that we still have some capacity constraints here in this period. And I mean, in light of these conclusions and perhaps also what you mentioned about new customer groups coming on to this platform and perhaps it's fair to assume that they will not altogether halt their behavior after a corona. So in light of this, do you see the need for you to alter your strategy on the build out of delivery capacity? Do you see perhaps any changes on or acceleration to the doors that build out or any additional transom dark source? I mean, you mentioned a few initiatives here in the presentation, but do you think that there will be more sizable action, so to speak, strategically from your side to be Yes, I understand. And I think the we've been all the time very clear about that we want to have a flexible operation, a flexible system and seen so we can adapt quickly both to increase demand and if it then, as you point out, we don't know what the new customer base that is now coming in, how they will handle and then be flexible on that. What we have though increased, as you know, the capacity in our operations in Stockholm and that we are planning to build that out now in the fall. We also are continuing to build out capacity now for our Click and Collect operations, speeding up hemp strip significantly and Willis continue to they've done that for a while. Now they continue to drive that agenda. So but that part of Click and Collectives fits us fairly well because obviously, we are then flexible. If the consumers chooses to go online, they use the same store. If they go physical, they use the same store. In that perspective, we are having a flexible operation. So it doesn't change. When it comes to your question, can we speed up Volstad, I think we have a full speed on that. So there are it's a big project, and we don't forecast any opportunity to speed that one up. Right. Sure. Just finally on the online side, given the very high demand here, do you see a shift here in balance in terms of the opportunity to charge for delivery, especially for home delivery or accomplished? Yes, but I stated that all the time. I think the there is if you look at the overall market, delivering home for free, it is a challenge. And we are actually, if you look at Lilly's, they charge for home delivery and then that model works really well. Obviously, they have a very attractive price point from the beginning. So I think we if you look at internationally and so on, you start to see that there will be more delivery fees, particularly when it relates to delivering to your home. So we'll see how this develop. Obviously, it's a competitive landscape, as you point out, but also look at some of our brands today, has a clear fee structure, and it works well. Well, that's very interesting. Then just on moving on just to the Snugloss business. I mean, sales head up surprisingly well. It was clearly above consensus expectations here, but nevertheless, results fell sharply. Can you elaborate a little bit more on that and for us to understand what's there firstly, was there any meaningful impact on this initiative to launch business consumer sales and perhaps lower profitability on serving such sales? Or have you maintained completely unchanged staffing in the SNAB Browser site in Q2? And with the remarks, yes, yes, yes, I'll stop there. No, but I no, but I think I even pointed out, the open up for consumers has limited impact. It has some impact and we are pleased with that. But obviously, it's early days and it takes time for consumers as well to find the so there's 2 parts of that. One is also to open up this and to get the opportunities now to support the communities with more places to shop at as without having to spend time with other people, so to say. So but also when it comes to, I think, as in any retail business, when you drop sharply in like for like, obviously, it has an Snabgos. They are more Snabgos. They are more frequent though, which means that they are still there. They're taking staff's time, so to speak, while they are still shopping a bit less due to their own demand is not as strong. But I think if you look at Snabro's business model, they are geared up for shoppers who can go on a daily basis to evaluate what the demand will be today or next day, that fits that model fairly well. And we are pleased to see that we believe we are clearly gaining market shares now in this market. And even if we are making some losses, we are pleasing our customers to make sure that we have a sound and steady operations for them that for the restaurants that is actually going through a challenging time. That definitely seems to be the case. And then on the remarks that sales improved gradually over the quarter, does that also hold true for results? And I mean, are we nearly back at flat run rate when we go going out of the quarter? Yes. Well, we'll see when obviously, it's as you know, profit is very much dependent on like for like well, I think the profit is supported by that. And initially, as stated, when we had a 20% decline in our sales in the end of Q1. Obviously, that is hurting more than in the end of the quarter. So that's a fair assumption. Thank you. Thanks. Our next question is from Fredrik Ivarson from ABG. I want to get back to Euricast one more time. And I appreciate that you don't want to guide on the losses. But it seems like underlying margin in Will is expanded by at least 50 basis points according to my calculations. Is that all owing to volume? Or do you see any other drivers for that margin like mix or efficiency gains, for example? No, I think it's fair that if I which I've said now between the lines several times that Ville has had a fantastic performance in with a very strong like for like and obviously that is supported or that supports and helps the efficiencies that supports and helps the cost structure we have. So it is a very with that strong like for like, my expectations is that you're also getting improvement in profitability, which we're also seeing. Okay. So no positive mix effects or anything else? There's no major change no major changes in that in this quarter, no. And then the yes. Sure. And second question also on Will is strong like like obviously, it seems like it grew like 13% ex euro cash. That's obviously a very strong outperformance versus the market. And now you're facing a somewhat different quarter with vacation or staycation, you mentioned a couple of times. How do you think Velez' position given that? Do you expect the outperformance to come down a little bit as consumers head out to the summer houses? Or what's your expectations on that? Well, I think we will see when we come back in October. But I think in general terms, Villas is well spread out in Sweden. Also, there is also now some uncertainties in the overall economy in general for consumers. We are seeing a higher unemployment rate and so forth. And obviously, that is Villas is extremely well positioned now as a low price retailer. So I think that is also supportive in then obviously combination with the states to stay to stay home time. Yes, fair enough. That's all from me. Thanks for answering the question. Thanks. Thank you. And our next question is from Gustav Sandstrom from SEB. Please go ahead. Your line is open. Good morning, guys. Good morning. A few questions, if I may. First one, looking at the minorities impact on earnings, it was €9,000,000 positive in Q2 'nineteen, swinging to negative €19,000,000 So €28,000,000 swings towards the negative. Does that mainly relate to your Eurocash holding? Or is it a big impact also from Urbandelli and other parts of your business? In the scale part, obviously, Eurocash is the largest impact from when you come to Urban Delhi, which is part of Daghab, we have a clear negative impact that we've also been able to, so to say, take down costs as much as we can as the it's been almost a halt for a time there. And then we are trying to handle that as good as we can with the staff and so forth. But obviously, we also have the rents and we have the operations still up and running. But the majority here when it comes to the scale of sizes is euro cash. So then a fair estimate again would be €30,000,000 to €40,000,000 loss for euro cash on a 100% basis in the quarter. No reason to have any other view on that one. No, we don't comment that, but it's been significant. Okay. Could you also elaborate a bit on your decision not to seek governmental aid for your temporary layoffs in Eurocash? Does that have any link to your work position to go ahead with the dividend payout for this year? Well, we so far, we've said that to date, we don't want to we have not seeked for we have seen governmental support obviously from the overall sick leave part. But when it comes to On Stellinster and Kotitz Permeletering, we have made the decision that we're not seeking for that. We are taking a holistic approach so far in terms of how our segments and how our business is developing. I think it's really positive initiatives from the government, but evaluate so far, we've seen that we can handle this. Obviously, we have to evaluate and look at it how long this will continue, but that's how we've taken it so far. And we want to be transparent about that. Okay. And lastly, I'm interesting if you see any indications, data points on sort of shopping pattern changes suggesting your customers are getting more wary about the general economy, say indications of some trading down or choosing cheaper price label options or anything like that? We are slightly up on our private label, as you may have seen in the report, which is obviously part of also we are continue to develop our private label sector. But I think the only maybe indication you see on that part is obviously that the village is doing really well. Okay. All right. Just one more question. Thank you, guys. Thanks. And at the moment, there are no further audio questions. So I will hand it right back to the speakers. Thank you. And I we don't have any further comments. More than thanks for listening. Stay safe and have a great summer. Thank you.