Earnings Call: Q4 2018

Feb 5, 2019

Good morning, everyone, and warm welcome to the presentation of Axos Full Year Report 2018. I'm glad that some of you had made it through the snow here in Stockholm. The result will be presented by Axford's President and CEO, Claus Falkov and together with the CFO, Anders Lechsma. After the presentation, there will of course be time for questions both from you here in the audience as well as from the conference call. And those of you who are watching us on webcast, you can send in the questions and we will then address the questions in the call. And with these practicalities, I welcome the first speaker, Klas Falco. Thank you, Cecilia. And of course, I also have to say a warm welcome to for all of you who made it to come here this morning. I've heard there's been some issues with our transportation systems in Stockholm. So but we are glad that you're here. We're also glad to welcome all the rest of you that made it into the webcast. My and our agenda for today is that we will go through the Q4. It will give us an opportunity to sum up 2018. And we'll also go through the key priorities that we have laid out for 2019. And I'll also cover the outlook, particularly in terms of our planned CapEx as well as our store expansion program. Let me also remind you all of our model in terms of our house of brand structure. It's a structure that gives us the opportunity to drive different brands in different segments, while at the same time through tight collaboration create a strong economy of scale. If I, in the report, should take out 3 key highlights, I would like to start with that retail and Ax Food goes through many changes. And I must say that I'm pleased to see how we so far are delivering on our plans, leading to increased market shares and a record profit. In this quarter and also the full year, both Villis and Axwood Snam Groves performed significantly well. And also would like to highlight that we are getting up to speed when it comes to further develop our logistical platform. It's a small first step, but in this period, we were able to start our first semi automated warehouse for our fresh products in Johan Sjoping. Let's now move into the key ratios for the quarter. If I start with our sales, our net sales there we go. Our net sales is up with a growth of 4.6%. Our store sales of 4.7% with a strong like for like of plus 4.6%, which includes Hemshupp franchise. Villis continued to outperform the market. Hemshoop, the like for like of 2.9% and a total sales that was somewhat lower 2.2 which was affected by a couple of larger stores that was converted in the period to Villas. Snabkos had another very strong quarter and DOGAB growth is in line with our internal sales. Moving into what I started with in terms of gaining market share, because if I look at our store sales of 4.7%, it's clearly outperforming the market as both the preliminary SEB numbers and as you may have seen this morning that there's a report from Svens Daglevarhandel together with Hoi that both of these reports report a significantly lower market growth of 2.3% in the quarter and 3% for the full fiscal year. Our profit relates to, of course, our strong sales. We have improved in versus last year. It's driven by the positive like for like. This can be clearly noted in both Villas as well as in Akzo Snagro's number. It's also been positive to note that we have recovered from the somewhat challenging period in our logistics from the summer, which was affecting our efficiency in Daga. And with now good service levels, we are back on track. We also see that in the numbers in Daghav with an improvement. Hemschep profit development is affected by somewhat lower like for like development in our Groupon stores in combination, I would say, with an increased campaign level and some higher marketing costs that will strengthen Hemshoppe for the future. If I let the Q4, it sums up to what I would like to say is successful 2018. And let me go into the numbers for 2018. We have a net sales of up 4.6 percent, leading to a total turnover of above SEK48 1,000,000,000. The strong store sales of above 5% and all segments that we are is showing a positive contribution to our performance where again for the full year both Villis and Axosnagros stands out with the very strong like for like. Looking then at the market for the full year, our store sales including ecom, is above 5% to 5.3% growth, which meets our long term target of growing more than the market. Moving then to the profit number. The positive sales paved the way for that we can sum up actually a record profit for Ax Food, where we are delivering about SEK2 1,000,000,000 in profit for the first time. Key drivers has been our like for like, but also as if you remember, we had a very positive sales mix that we had in the summer that has supported the numbers for us. On the negative side, we've had a higher logistical cost due to the summer period. And also, we are also seeing somewhat higher fuel costs that is still impacting our numbers. And as I shared, the recent marketing activities in HEMSAFE in the last quarter influenced the numbers negatively. Let me now go through the numbers segment by segment. And I have to say, if I take just a small step back and reflect that our largest segment, Bill, is it's been a fantastic year. We are growing twice as much as the market. We have good cost control and which leads then to a result that is a very positive development. I also would like to mention that the acquisition we made in Eurocash has now been positively integrated in 2 VILIS, and we also have had a very positive performance of Eurocash. So that is something that also is supporting the ratios for Villis. Moving ahead, our new store concept that I presented in the last quarter has been received very well in the market. And focus now going forward is to refurbish with full speed to this new concept as well as roll out more of our online offer to more stores and to more cities, particularly our Click and Collect offer. Now, Hampshire at a glance compared to Villis, it's somewhat lower. But I have to state, Willy Hempshoepp is growing well in line with the overall market. Now the somewhat softer like for like in our Groupon in combination with the increased marketing activities has affected our margin and the slight margin drop you see for the full year. Obviously, we would have liked to see a better effect on some of our initiatives. But when I look and when I compare the market data that we just see in that come out in the market, particularly the latest one from Houri, it's clear to see that it's been a somewhat strong headwind in the market, particularly in December numbers that was somewhat low. That has affected our performance, of course, as well. But I have to say, and I must say that I'm pleased to see the performance that we are now seeing in the newly refurbished stores in Hampshire. So we will continue to invest in our refurbishment program. We'll also continue to invest in our communication, particularly capitalize on our customer program. And we'll continue to strengthening our customer offer via more flexible assortments, more sustainable offers and more meal solutions. 2018 was the first time we reported Axwood Snabgroze as an owned segment. I think in one way, we are pleased to see when you come out first time with 1 segment that you're also performing well. And for sure, that's something that Axwood Snabros has done in 2018. We had a very positive strong sales, and we are clearly gaining market shares also for actual snub growth in their marketplace. We have, in the summer, been able to attract significantly more customers, and we are pleased to see that we've been able to maintain this customer base also for the coming quarters. Our operating margin has been stable and hence we've been also been able to improve our profit numbers. DAGA reports 3.2% growth, which is drivers than being our sales in our own concept, while it's also been somewhat negatively the growth rate has been somewhat negatively affected by last year's comparables that, if you remember, included MatHem. We report now a stable profit despite, I would say, the challenging summer with where we had some significant higher logistical costs and also as we said some higher fuel costs moving forward. Our online brand, Mato Tessie, which is included in DAGA numbers, continued to show positive growth that even if we are not profitable in MottoTeC, the growth does not worsen our margin in DAGA any longer. You may have followed and you may have seen that in the quarter, we have also our ownership in Urban Delhi. We have owned and worked with Urban Delhi for many years. But we are now taking next step. We're taking a further step in our collaboration. With an increased ownership, we are now investing more and be able to invest more into this innovative concept. And at the same time, we can close-up our collaboration and cooperation and do more development together, particularly, I would say, in private label production. That sums up some of the ratios for the quarter as well as the ratios and for activities for 2018. And with this, I hand over to our CFO, Mr. Anders Rexmann, to take us through our financial position. Thank you, Claus. Thank you very much. So let me first begin with to summarize the cash flow for the year. We have a significantly better higher cash flow compared to last year, and that is mainly due to our acquisitions last year, which affected us approximately SEK700 1,000,000 last year that we don't have this year. We can also see this year that we have improvements in our net working capital. I will come back to that later. On the other hand, we have a higher dividend this year compared to last year since we increased the dividend per share from SEK 6 to SEK 7. And this means that we end up with a cash balance with approximately a little lower than SEK1.6 billion at the end of December. Going into the investments for the year. We have lower total investments this year. But if we exclude the acquisitions that we made last year, we have a higher level, which sum ups to SEK905 1,000,000 this year compared to SEK828 1,000,000 last year. And that is mainly due to higher investments in our wholesale operation in Dagob. And that is connected to our new warehouse, automated warehouse in Johan Sjoping. The investment level in retail and IT is pretty much in the same level as last year. Coming back then to the development of our net working capital, we can see that we decreased the levels this year, both in kroner and as in percent of sales. In 2017, we had approximately minus 2.0 percent working capital on net sales. This year, we have decreased it to minus 2.6 percent of net sales, which means that we have released approximately SEK280 1,000,000 this year in net working capital. And it's both accounts payable and accounts receivable that we have increased. Coming in then to the net receivable position that we have at the year end, we have increased also that with 37%, a little bit lower than last year, but well above our long term goal of 25 percent. Looking into the return on capital employed, it's very stable, around 40% also this year. And finally, I will come in and try to explain our new accounting principles for 2019 that will affect us. I think you're aware of that we have a new standard, IFRS 16 leases, which means that we now have to recognize all our leasing contracts in the balance sheet. And when we have done the calculation for this, we have used modified retrospective approach, which means that the accumulated effects will be recognized in equity with approximately minus SEK400 1,000,000,000 and the non current assets will increase with approximately SEK6 billion as of the 1st January this year. And this will also affect a couple of key ratios for us. Our equity ratio will decrease from 37% to approximately 23%. And we will turn our net receivable position to a net debt of approximately SEK5.2 billion. We will also have effects in the P and L, but this is quite hard to estimate because we don't right now know what times of what types of contracts we will extend or what we will terminate. So we have to we will come back in Q1 to describe the effect a little bit more in detail, but we will have a positive effect in EBITDA and EBIT. We will have a negative effect on return on capital employed, and we will not have any effect in the cash flow total, but we will have some effects within the cash flow. We will have increase in cash flow from operating activities, and we will have a decrease in the financing activities. And this ends up my end of the presentation, Claus. So I hand over to you again. Thank you. And I must say, I'm pleased that you are the one presenting IFRS numbers. It's not that easy to follow. But I think it will clear out as we move into our Q1 and we start to report it. Let me now take the last minutes of this presentation to give you an update on our strategic agenda. And last year, I presented this new strategic platform with some clear priorities within our highlighted strategic areas. Our priorities or Agenda 2018, as we call it, became then the foundation for our business plan, a plan that I must say worked fairly well. Now for 20 19, we're not going to be any revolution in this. It's more of an evolution, same direction, same areas, however, some new priorities. I'm not going to go through all of the priorities for you in detail. But as it is the starting point of our year, I will quickly share with you the map for our priorities and just dig into a few of these areas. Starting with our customer offer and similar to last year, we will focus on developing our range in good and sustainable food. We will intensify our work in terms of our value proposition for our private labels. We will use more data to increase efficiency and synergies in purchasing. And finally, we will focus to deliver more ready made meal solutions. We have 3 clear priorities in our customer meeting. We will improve and strengthening our digital customer meeting, and we will do this for all our brands. We have a strong performance as I said in our digital meeting, but we also it's a new area for all of us and I think we still have a lot to do and a lot of work in this area. We're going to have high focus and tempo in refurbishing our store network, both in Villas and in Hampshire. And we will invest and we have invested in new technology and competence to capitalize on our strong customer base and loyalty program that is we believe a strong plan for the future to better meet the customer needs and to be more relevant for We will add more stores to our network. Target is to add 5 to 10 more stores in 2019. Last year, as you may have noted, was a year when we had some of the store that we plan to open up postponed into 2019. So my expectation for 2019 is that we will be in the higher end of the scale of 5 to 10 new stores. We also will focus to increase our online reach, mainly within Village store network, as I mentioned in terms of their click and collect, but also for all brands, particularly in Stockholm, Gothenburg behind the new combined dark store. And then I must say, I am pleased to store is now up and running with our Aploheme. We have a new leader, Gustav Hasselgren, soon on board And focus now the coming period will be to expand the range and expand the assortment, build up the awareness of the brand and promote the offer through Ax Foods channels. As shared earlier and also in the last quarter, we are moving into a period with some large investments into our supply chain. We have today 3 dark stores and focus initially is now to roll out the 1st combined dark store in the Stockholm area where we will handle all the picking for both or for Matotese, Vyleesi as well as Hemshopper. It will still be a manual warehouse. So most of the synergies and effects we will get from this will be in combining our transports, will give us some efficiency and also reduce the environmental impact. But also we have started our journey towards a more optimized warehouse. The first step, and I must say a very good learning, was to build the semi automated warehouse for our best group product in Njetschjetke. You can see some of the short terminus behind. The first order was shipped in mid December, and the system is now being ramped up. And in full speed, we will be able to double our capacity with the same manpower as before. If that was the first step, the largest step, as I shared last quarter, is to optimize our warehouse in Stockholm. The warehouse we have today starts to reach its limit. And with the new investments, we will secure capacity for further growth as well as significantly improve our efficiency. In this new warehouse, we will combine, to be clear, both the picking for our stores as well as the picking for our online in the same facility. We are moving ahead well in line and according to our plan. And even if we're not giving you so much more details today, we are able to and we believe and I will say, will come back at latest in the next quarter report to give you some more details regarding both location as well as the technology we will use. And as shared earlier, we expect to increase the CapEx for the automation of this in the range of SEK400 1,000,000 to SEK600 1,000,000 per year in the coming 4 years. When it comes to the priorities in our work approach, it very much boils downs to using new technology, be more agile in our work and be more able to develop and capitalize on the strong source of data that we have in our system. And finally, we have, of course, high focus on our most important asset, our people. In time when there's a lot of changes going on around us and within Ax Food, we need to put a lot of focus to continue to develop our culture, to continue to secure and develop the right competence, increase diversity as well as focus on the positive work climate to improve work attendance rate. I hope you see that clearly the market around us, as you know, is changing, but we have a strong agenda and high energy to move ahead for the coming year and for the years after that. If I then look at the outlook for 2019, first, let me share with you some adjustments we have made and done in our long term strategic targets. We have adjusted our equity ratio due to the new IFRS 16 reporting as Mr. Lexmann just reported. So the new target is the equity ratio of at least 20% at year end. But we also expanded one of our sustainability targets. Previously, we covered share of sales of organic food. Now we've expanded this to also include a basket of sustainability certified goods. So the new target is a share of total sales of at least 25% at 2025 of sustainability certified goods. The financial guidance in terms of CapEx is very much in line what we've had seen before. We are continuing to invest in the normal operation and we are now guiding that we will in the coming or 2019 spend 600,000,000 for the new automation for future logistics solution. So that adds up to SEK1.5 billion, SEK1.6 billion as a guidance for our CapEx for 2019, excluding then any potential acquisitions and our leasehold. Our financial position is strong, and the Board suggests an ordinary dividend of SEK0.07 per share, corresponding to 94% of our profit after tax, which is well in line with our dividend policy. Finally, if I will sum up this presentation, I must say that we are leaving a strong quarter behind us. We're also summing up a strong 2018. It's been fantastic to see the strong sales growth in both Villis Axos and Snabrios. And we are as a whole clearly gaining market shares in the market. We're delivering a record profit. And I would like to say that we have exciting and solid plans for the future. With that, I think we hand over to you, Cecilia, to lead the Q and A session. Yes. And what you have seen is the first presentation in our new form. We have a new logo, new colors. So this was the first clothing you saw. We think this is a forward leaning design that fits very well to X Foot. But now I'm sure that you will give some color on the figures that you heard today. We start with Niklas Ekman here in the audience. Yes. Thank you. Niklas Ekman here from Carnegie. Maybe starting with the last item here. You almost answered it yourself here with the CapEx guidance, dollars 1,500,000,000 to $1,600,000,000 It looks like a clear step up at 6 100,000,000 of that you are then linking to automation. So the underlying CapEx then should be largely in line with previous years? That's correct. So there are we've guided €400,000,000 to €600,000,000 We have planned for the higher level of €600,000,000 in this guidance. Obviously, when all of the details come through in this, we will see where it ends up. But that's part of the guidance. We want to be very clear that's more or less normal levels including then and then excluding then the SEK 600,000,000 And are you then when you say SEK 600,000,000 instead of SEK400,000,000 to SEK600,000,000 are you then being a bit conservative or rather expecting that? No, that's our expectation at this stage with the current knowledge we have. As I said, we when as soon as we are signing contracts, we will come out with more details and then this will more clear out. But this is the forecasted levels that we expect today. Can you talk a bit about your refurbishment plans here as well? It sounds like you're talking about a step up in refurbishment. How many stores are we talking about? Are we talking about also an increased investment in new or refurbished stores? We for Hemshaft, we started this program. We'll continue, I would say, more or less the same pace as we've had. We are taking further steps in Billings. As I shared with you last quarter, we have developed a new concept 4.0 in Belize and it's been something that's been very received positively by the market. So we will step up the rollout of that, which will increase some investments obviously as well. And you talk about online sales here as well. You don't give a number for the share of sales. Is that something you're willing to share? And also when you talk about improved profitability, I assume that means that the losses have narrowed. Yes, that's correct. And I understand that the interest of our online share of sales is high. We are looking into when we will release that. We have not done it in this report. Now correct, we've had a very positive online development. And with the volume, we're also seeing that we are getting some efficiency even if it's still something that is a burden on our margins currently. And IFRS 16, just a question on new financial targets here, were you adjusting your equity ratio, but only from 25% to 20%. So it looks like you are then actually raising the underlying targets. Is that the right assumption? And also like Lars said, it's at year end. Early, we had 25% at each quarter. So it's a difference there. And on the EBIT margin, are you sticking to that target? Or is that something you are waiting to see where the how the EBIT exactly will be affected? So you might come back and adjust the EBIT margin target or? We are sticking to the target. You're sticking to the target. Okay. I think I'll pause there and I might come back later. Okay. Then we hand over to the operator. Do you have any questions in line? Yes, we have 2 already lined up. The first in the queue is from Daniel Schmidt of Danske Bank. Please go ahead. Your line is open. Yes. Good morning, Claus and Anders. May I start off with a question on Hampshire then, which was, of course, a slight negative surprise for us and maybe also for you. If you look at the profitability on wholly owned stores and exclude the franchise fee, it does look like it's close to 0 in the quarter. And you said that you were disappointed with the like for like, but it's still picking up. It's actually the highest in 5 quarters. I guess that refers to that you spend a lot on the sort of Hi Hi, Daniel. No, I think you are following it or capturing it very well. We will continue to work with Hemshoeb and to work with refurbishment program. As I stated, we've seen very positive results out of the refurbished the recent refurbished stores. We are seeing a positive pickup in our like for like in the Group Own stores. However, I would like to see more and we'll work on that with some of the areas I presented in terms of refurbishment. We also will work on that with our communications, some of our activities, capitalize on our customer program, use more of the data that we have, be even more relevant in terms of our range. So it's a full focus. And but also would like to remind us of all that we also been into in the Q4 into somewhat soft market as well that has impacted and where I think as a result that we didn't get the full effect of some of our market investments we made. All right. All right. Do you see a tipping point anytime sort of soon? Or do you see any changes to that sort of the fact that you've seen a pickup in like for like but hasn't really been paying off yet? And maybe you've had some headwind towards the end of last year, as you said. Do you see any tipping point soon where you start to see this turning into a positive change to profitability? Or is that going to be sort of a more medium term thing? I think it's obviously, it would be easy to say when I see the like for like coming through. But we have a long term approach on this. We are refurbishing our stores. We are working long term to be very relevant out in the market. We'll continue to have full focus on that. Yes. Okay. Can I just jump on then, Clausen Anders, to something that we did discuss quite a lot during the late summer, being autumn, when it came to the drought and the effects from that? And you said that we will see how that sort of plays out when it comes to Nordic or Swedish suppliers and price negotiations. Could you give us a better understanding of what the effects will be, if any, going forward? Well, first of all, at least we had some effects, if you recall, in terms of our logistical efficiencies that I am pleased to see the workforce in DOGAP has been able to improve and where we've seen now better service levels again, which is now resulting in an improved efficiency, which supports and helps. When it comes to the drought effects, I don't think we can today still outlining the exact effects out of it. We've seen an inflation of around 2% to little bit more than 2%, which is also something that Hoeghi is forecasting for the coming years. I don't have any doubts to say anything different or anything different than their forecast. But it is still and I think the challenge will be to see how can we source and get the amount of source for Swedish products that I think is still to be seen due to these effects. And we don't have the full data on that yet. Okay. Fine. And can I just finish off by you, of course, talk about a lot of things happening at the same time, and you've stated that for some time in the CapEx guidance, and it's now clear for 2019? But at the same time, of course, this is also driving cost, I guess. Could you say anything about some sort of group cost guidance for 'nineteen? No, not more than what we have in terms of our overall targets. That's what we are guiding on. So but obviously when it comes to our ratios for our cost, as you know, like for like is critical for us to for you to follow and that will also determine a lot of the ratios. Okay. Thank you, guys. Thank you. Okay. Operator, we can take another question from the conference call. Thank you. There's one further question in the queue from Gustav Sandstrom of SEB. Please go ahead. Your line is open. It seems Gustaf has left the conference. There is one further question coming through there and that's from Frederik Ewesen of Kepler Cheuvreux. Please go ahead. Your line is open. Thank you. Good morning all. All. One question on Hemsche, I have a follow-up there. You mentioned the intensified marketing efforts you're investing in. First, are you willing to sort of quantify these investments in any way? And also, I'm curious to hear whether you have seen any payback in terms of improved like for like in Hampshire post these intensified marketing efforts? But even if I'm not quantifying, but as you also see on the numbers in the quarter Q4 compared to Ville's, we are on a lower rate in Hampshire. So obviously, there's when you have this 1,000,000 change the million second changes, you also have an impact. When you're it, you get an impact when you start to do, particularly when you start to do some TV commercials. Now the effects what we have seen is, as I said, a slightly positive development in our like for like in our group home. And I think that's positive to see. But I'm not saying anything else that I would like to see more and hope that, that will come. Okay. Operator, do we have another question? We do. Gustav Sandstrom of SEB is back on the line. So your line is now open, Gustav. Yes. Can you hear me now? Yes, we can. We can. Yes. All right. Now adding on to Damian's question regarding Hemp Shop, looking at like for like in your own stores, I guess it would indicate that you have negative volume in the quarter. And given that online is most predominant within the concept in your own stores. So I'm guessing you're now approaching, I guess, low to mid single digits of volume decline in Hampshire. And I guess we're approaching situation at some point where you need to look at spacing and optimizing. Is that something of your plan in 2019 and something that is included in your CapEx guidance today? It's included in our CapEx guidance is to continue to refurbish stores. We constantly look at spacing. Maybe just to comment in terms of your indication in terms of volume. As I stated, we increased some of our campaign levels. So that has so even if we have had some of the volume, it's also been somewhat lower pricing on that, which will not give the full value effect out of in terms of total growth. But so it's included in the CapEx in terms of that we continue to refurbish. And we will have focus on that. And we have a constant for all our concept look at our space when the space is right or if we should adjust. Okay. And then a question on capital allocation internally, given your rate today, your 4% margin target. And I'm just curious, given that there is an increasing gap between your CapEx levels and your depreciation levels, do you apply your depreciation levels when looking at your margins internally? Or how do you view that given that there seems to be a sort of a bigger trend within the industry of a growing disconnect between depreciations and CapEx? Well, I think, of course, we are calculate I mean, it's a combination of the CapEx level and depreciation, as you say. And of course, we take that in line in our further calculations. No, I'm thinking given that your CapEx has now tripled over 3 to 4 years, it's now, I guess, twice the amount of your depreciation levels. How do you believe do you believe that CapEx will ultimately return to normalized levels? Or isn't this a new situation and a new phase you've entered with higher capital intensity? I think it's important to understand that the level we had last year, I mean, and that we guided for 2019, it's not to make that levels as the same as it is going to be in the long range for us. But we are now in an intensive period. That's clear. We will not do this logistical platform every year, so speak. Okay. And last question for me. The distribution and warehouse efficiencies for you in Southern and Western Sweden, are you happy with that today even with the investments in Stockholm? Or should we assume that you have further initiatives lined up for the rest of Sweden once you've concluded or getting closer to the end of the investment phase in Stockholm? Well, I think we have a strong plan now for the Stockholm and also we've done the optimization for the Johan Sjoping. We're now taking Stockholm and we will obviously evaluate this and see how we are how the operation goes. And if we get very positive results, which expect, of course, we will also over time move along, but we're not there yet at all. Okay. We have no more questions from the conference call. Do we have another question from the audience here? No? Yes. My name is Henrik. I'm a Brand Strategist and Professor of Marketing. And we can all appreciate the premium position of Urbandely and the soft discount of dealers, etcetera. And Hemschep that has been up here today, I see as a bit more vulnerable. And then my question is, where we sit right now today is, we can call, one of the few destination stores in the Hampshire as I see it. You may include Carlaplan in a few. Do you have any strategy? You talk about customer bases in West Bend. Do you have any strategy to create a destination brand, coffees or whatever, to make people come to the store, an experience based So if I maybe it's a separate topic, maybe if I elaborate a little bit on it. So the strength that we have with our brand, household brand strategy is to meet various consumer demands. And I think Hampshire fits very well into being very close and nearby where you live. That's the as we pointing out, a lot of the focus right now is also to meet the needs of more ready made meal solutions for you when you're nearby, where the consumers is changing their habits and where we from our side can meet these changes in a better way versus what we've done before. Just around the corner here, we are today serving between 1500 to 2000 lunches every day of ready made meal solutions for the customers that is in this area. And I think we can continue to develop that approach. You have similar parts in Hampshire city downtown, etcetera. So rightly, we have some different targets with our different brands where we're meeting some different needs for the consumers. And there, I think and strongly believe Hemship has a very strong platform and position for the future. Sure. But given that position, can you increase the experience factor on that level of the brand? Absolutely. And I think that's why we are refurbishing our stores. And we are working on to provide that experience with good sustainable food with more inspiration, with more meal solutions, with more variety in our range, etcetera, for to meet new demands and new needs, which also is different depending on where you live out in the country. You have some needs here in Stockholm, you have some other needs out in the countryside. Yes, because okay. Thank you. Okay. Operator, I think we have another question from the conference call. Please go ahead. Thank you. Our next question comes from the line of Andreas Lundberg of ABG. Please go ahead. Your line is open. Thank you so much. Actually, I was a lot tilted to the last question on your positioning. I mean, where do you see it today positioning in the market and how do you want it to be positioned in the future of retail grocery retail? Andreas, I think and maybe I hope that's partly where we answered that where we are having You did. Yes. Okay. That's fine. And then if I can take one on working capital, which was obviously very positive here in 2018 or release of working capital. How do you see the levels you have now? And then how do you look upon working capital going forward? Yes. We continuously work on several levels of that, but it's hard to give any guidance actually of the development going forward. But is there much you can do to reduce it further? Or should we expect to grow in line with your business? We have some tool in our basket, but it's hard to say how this is going to develop actually. Constant focus, but difficult to forecast. Yes. Okay. So if we don't have any further questions, either from the conference call nor here in the audience, I will thank you all for participating today and have a good day. Thank you very much.