Earnings Call: Q1 2021

Apr 20, 2021

Hello, and welcome to the BIGMAX Conference Call. Throughout the call, all participants will be in a listen only mode. And afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present Matthias and Jean Bert. Please go ahead with your meeting. Thank you and welcome everybody to the BinMax Q1 conference call. As usual, we will talk to a presentation that is available on our website. And with me, I also have our CFO, Helena and as usual, we will take turns presenting the material during this call. And we'll kick off on Page 2 with the summary of the quarter. And as you probably have seen, it's a really strong start to the year despite now meeting tough comparables from a great 2020. So overall, net sales in Q1 increased 26% on top of the 23% in the comparables from last year to just over SEK1.1 billion in sales. It is still a good market. We still continue to take a lot of market share and I'll come back to that of course in a minute, like for like was up 20%. The big driver versus the market continues to be our e commerce with Big Mac branded e commerce increased 90% in the quarter and in total for the group e commerce is now 26% of Q1 sales. We have a continued increased gross margin and we continue to be very solid on costs. So strong scale effects And a very good profit improvement, EBITA increased to SEK7 1,000,000 in the quarter, or minus SEK51 1,000,000 last year And rolling 12 EBITA margin is now almost 11%. On Page 3, we're listing Some key events and it's been quite an eventful quarter, although Q1 is a small quarter for us in terms of sales, a lot of things have happened. So starting from the top, obviously, we're still in a pandemic and there's a lot of precautions being taken to manage that in the responsible way, we have also in the quarter for the first time for Big Macs been impacted by what we call it partial lockdowns and come back to that, but some stores closed for visits during the quarter. We've continued our initiatives, including upgrading the store portfolio and opening new stores. We have entered Denmark as of January 2021. And we've also quite recently held a Capital Markets Day digitally where we among other things updated or presented the updated financial targets which we'll also come back to today. So I'll go through these things very soon. But before I do that, wanted to highlight another important fact That also was stressed in the Q1 on Page 4. As you're probably aware, we are a discounter. We have a really strong discount position in the markets that we operate in. And we also have an agenda to Mean more for more customers, so have a broader offer, but also offer a quality experience, what we call a modern discount approach. In the quarter, we were pleased to see that we were recognized both for price and quality by independent surveys in Sweden, we were awarded number 1 or the lowest price for terrace projects by a Swedish independent survey of 5, 6 retailers. And we've also been recognized for our quality of the products for the Terez project, particularly the implement good projects by an independent laboratory institute that was labeled Testvakta in Sweden also. On Page 5, let's pause a little bit on the COVID-nineteen pandemic situation, what that means to Big Macs, perhaps a bit more than in the last two quarterly presentations. First of all, it's important to underline that Our priority is to ensure the health and safety of the staff and the customers and we have taken many precautions to do so and we've continued All of them in the Q1 in 2021. And there's a long list of things that we've gone through before and I may not go through in detail again, but it's We are in a more favorable position than many others in the sense that we are don't have stores in shopping centers, but on freestanding properties and a self-service concept. But even so, a lot of actions have been taken. And secondly, for the first time for Big Macs, we have been impacted by Well, we call it partial lockdowns in Denmark and Norway in the quarter. And for give you the details for Part of the quarter, consumers who are not allowed to visit the Danish and Norwegian stores, But click and collect outside the store has been allowed. So we have quickly developed what we call collect outside store offer, which helped to recoup some of the lost store sales. We were positively so, but there still of course is an impact On part of the sales in the quarter, the main impact was in Norway, where there were 23 of the Norwegian stores were closed for visits for about 2 weeks. So it's still a small portion of the total portfolio, 23 out of 175 stores And it was only for about 2 weeks and we did recoup some of the lost sales through new collect outside store solution, but of course there is still a small negative impact. In all though, in this pandemic, we have had a positive financial impact and particularly in the sense that There is a stay home effect, which impacts all home improvement categories around Western world at least positively during the pandemic. We have had disruptions, but they have been manageable and they continue to be manageable in the Q1. And the main difference compared to earlier is that we are now impacted by the party lockdowns. We still have 23 Norwegian stores closed for visitors as of end Q1 and as of a week ago, that number decreased to 11 stores closed. So that was the update on Bergmax in the COVID-nineteen situation, let's turn to Page 6, where we are outlining the market development and our sales performance compared to the market. For those of you who visited or attended Rather, the Capital Markets Day, you know that for the first time in 2020, we now have public independent data on the B2C part of the Nordic DIY markets, which we are really Happy about, there is a report in Sweden from an industry association called DIGMA TRIALHANZANA and there is this report is Norway from a retail organization called BiTEK. And that showed almost 20% growth in 2020 for the market versus doing max growth in local currencies 32% growth in 2020. So a clear Market share gain from us last year. And the big point here is that that market share gain is continuing and even accelerating here in Q1 2021 and I will now go through why that is. So in the starting with the market on the left hand side of this page, the market increased Around 9%, 8% to 10% in the Q1. And the reason why we're not more precise is that the March numbers are not yet available. And for those of you who may remember, we have our own consumer panels where we spot on versus the 2020 development. So we are confident in the 9% or 8% to 10% estimate. What's driving that market growth in Q1 is of course a continued stay home effect. The market started to increase due to the stay home effect as of mid March last year. So this quarter has had a full quarter of stay home effects. And then there are some other factors also impacting the market development. Weather effects were negative. Spring came later than in the last year. There's an increased effect from increased consumer market prices. We'll come back to you, but basically raw material prices have been passed on to increased consumer prices, which increases the Size of the market. And then of course the negative effects from the partner lockdowns in Norway and Denmark. So in all, The market increased 8% to 10% during the Q1. And on the other side of this page, you can see the Sigma's group sales development, which increased by 26% in the Q1. And Excuse me, I think the easiest way to understand the Big Mac Group sales performance versus the market is to think about it Like this, you know, we're driving several initiatives to drive sales growth And for the stores that we have that are not yet upgraded, so not yet impacted by our newer store concept, they performed in line with the market. So if we start from that sense, we could say that the Big Mac stores not yet upgraded increased sales in line with the market. And then the strategic initiatives that we have Within Big Macs is really what's improving the sales and the Big Mac segment in total increased by 23%. So and Part of that was the entry into Denmark. The Danish business added 4%. So the majority of that was from the strategic initiatives In the markets where we're already last year, Sweden, Norway and Finland. And then on top of the 23% from the Big Mac segment, our other segment and much smaller segment, Skonset Boring Water had a fantastic start to the year with increase of 69%, And we'll come back to why. But in total, that means that the group increased by 26%. So good market Not upgrades and developing in line with the market. And then on top of that, own sales initiatives take the total sales growth to 26% in the quarter. And on Page 7, describe to you a bit more around these initiatives, the overview and then I'll go through some details on the coming pages. So We are shifting or repositioning, you could say, Big Macs in the consumers' lives to what we call a modern discount for today's DIYers, which means we are coming from the building material side, but now offering more types of home improvement projects. And we also would like to offer both a, of course, discount offer with the best prices, but also a quality experience. And the way we are driving that is to 3 main initiatives, which all have clear positive impact on the sales. Their e commerce store upgrades and store expansion. So at the overview level, e commerce within the Big Macs brand Developed really well in the Q1, 90% sales increase, continued to be really good growth basically across the board I'll come back to some details and collected store continues to be the very fastest growth track of all. Store upgrades to our new StorePoint 3.0 concept We continue to see the 6% sales growth per store and we have upgraded more stores now during the quarter to Store 3.0, so that really helps. And as part of that, we have garden departments now in quite a lot of our stores, almost 40% of the portfolio and garden performed really strongly in quarter 1, 70% sales growth on the Garden categories. And then on top of that, we continue to open new stores. There are still white spots left. So all in all, store expansion delivered 4% sales growth for us in the Q1. And on top of that, the new stores from the acquired business in Denmark. So all three sales sorry, growth drivers, growth initiatives continue to perform really strongly with a particular acceleration on the e commerce part. Now I'd like to give a little bit more detail on each one of these 3. So on Phase 8, we'll move to the e commerce part where we had a very strong growth and It's been an ongoing work for the last 2, 3 years to really reposition and build out the e commerce business. So there are several things that are really driving this, including a larger assortment, a better e commerce site and many more delivery options, which is really helping. We did have a sort of positive boost on the e com number per se from the lockdown in or the partial lockdown in Norway. As mentioned, for the stores where visits was not allowed, collect outside store was allowed, which boosted the e comm number a bit. But still even so in Sweden with no lockdowns, Stegma's e commerce increased really well 65% also in Sweden and basically a really strong growth across the board, very strong growth from both the products we also have in stores, The store assortment, very strong growth from the online exclusive range, very strong growth from home delivery and the very fastest growth continued to come from collective store, which is going really, really fast. And we as mentioned or detailed maybe on the Capital Markets Day, We clearly see that the fastest growth comes from sort of integrating the e commerce offer with the stores To the collective store point, but also we see that when we just open a store in a new geography, e commerce sales in that geography increased by 15%. There are other factors as well, but really pleased to see that those effects are coming in the numbers. We are also taking quite a lot of steps forward on the e commerce front in 2021 and really strengthening the e commerce offer for the future. And to give you some highlights, I mean, we are the 1st now in Nordic DIY to offer or launch what we call proactive track and trace, which means that Big Max will keep track of where your order is and let you know in case it arrives early or late or spot on time. It's of course something that exists in other retail categories industries, but not in DIY so far. We are developing a large range So 9, including some private label ranges. And this spring, we will see the first batches from the garden furniture and bathroom products under our own private label. And we're also continuing to be sort of on the customer side and helping people to do DIY and launching over 200 digital guides and instructions on our website during the year, of which almost half are up already. So a lot of e commerce and online focus and a lot of progress in that area basically. On the second main growth initiative, Store upgrades on Page 9, we are upgrading all of our store portfolio to what we call Store 3.0. And Store 3.0 is our way to describe the sort of new position we would like to have for the Big Mac stores where we offer more types of home improvement projects and we also offer a better quality experience in the stores. We do that in 3 versions or 3 formats. So we have a small town format for smaller towns and catchment areas, The regular format and then we have a large format and the regular and the large format both have garden departments and the large one has a large garden department. And these formats then include, as mentioned, of course, a great offer of building materials, but also Garden, paint, flooring, storage, several other categories, which we see have been developing the very fastest also in the last Yes. And as mentioned many times before, there is a really good sales effect from these upgrades and upgrading a store to Store 3.0 generates 6% sales increase per store. We provide a detailed view of our store portfolio on Page 10. And To give you the specifics, the Store 3.0 is now up to 80 of our stores or 4% to 6% of the total store Portfolio. The portfolio grew by 6 stores in the quarter, 2 new stores organically opened, 1 in Sweden and 1 in Norway, excuse me. And then 4 stores from the acquired Denmark business. We have upgraded 12 stores during the quarter to Store 3.0. And we also now have, as I mentioned, garden departments in almost 40% of the store portfolio. We have announced 10 new store openings so far for 2021, of which 2 have been opened, so 8 not. The goal is to open 12 new, so most of them have been announced. And we have also announced 2 relocations all stores, both of those in Sweden. Let me say a few words about Denmark before we shift to our other segment. And it's of course a fairly small business. We took over the business as of Jan 1 and the important and positive message is that we're off to a good start. As a quick recap, sales of this business is about DKK125 1,000,000 last year. It's again a small business with 4 stores in Zealand, so around the Copenhagen area if you like and then 30% of the business is e commerce. It's a good start to the year with good sales increase and also I think a really good teamwork and good progress on identifying synergies, there are several things that we think we can benefit from sharing supply chain on and the first goods Has arrived to the Danish stores from the existing Pligmax supply chain already. In terms of sales, this acquisition adds 4% of sales in the Q1 2021. On Page 12, we describe our second segment Skonfibugradar which is as you know much smaller, Big Mac segment is 90%, But still, an important business and had a fantastic start to the year. Really strong benefit from the So online garden niche position with an online trend of course being strong and garden being very strong. So Very positively positioned and then also very good results from the growth initiatives we are driving within Skanska Pigouar, Particularly around sort of new product development, which is driving good sales and continued digitization of the sales and marketing efforts, which Just continuing to take good steps forward. All in all, it's a bigmax group is a seasonal business, but considering Varun is an even more seasonal business, the Q1 is small, but still sales growth of 69% in the Q1, very good of course and then also a strong order intake in the quarter. And Konstantin Bighbor is focused still focused, remain focused on executing these initiatives that we're talking about before where there is more to do around product development, around digital sales and marketing and continued driver business in particularly Norway and Finland. We had a Capital Markets Day on March 23, so fairly recently. I want to just mention a few things from that. There were 5 important areas that we covered during the day. We did detail out the drivers of the market share gains last year. We talked about quite some time for about The big trends that are now impacting the DIY industry and to some extent other retail categories as well where discount is continuing to take share. The home is getting an even more important role in people's lives and how e commerce is growing across retail categories and what that means for Big Macs. We also went in quite some detail around the sort of repositioning of Big Macs 2, what we call the modern discounter for today's DIYers to offer more home improvement projects to offer a quality experience and combining the best of stores and e commerce and still of course offering the best possible price. Helena mentioned or detailed several things around the financials connected to our strategic growth initiatives And we also covered updated financial targets, which I will say something more about just in a second. And as a reminder, for those of you who may have missed it, the whole Capital Markets Day is available digitally on our IR website. Page 14, just a short recap of the updated financial targets that is an important, of course, Event, the main change, the most important change to the financial targets is the change in the sales target, Which is now stated as SEK 10,000,000,000 by 2025. It clearly shows that we have an ambition to continue to grow And it's a concrete target that we like to have. The EBITA margin on the profitability target is Not changed from previous targets. We have introduced a leverage target or a net debt to EBITDA excluding the IFRS 16 effect, Which we are clearly below now, but were above earlier if you look back a couple of years. The dividend target is not changed. And then we have introduced a new target, which is actually not the financial target, but the target connected to our sustainability efforts, connected to our CO2 development specifically so from CO2 emissions from goods transports, where we aim to reduce that per ton kilometer by 70% by 2,030 compared to 2010. So Profitability and dividend sales targets unchanged and new for leverage and sustainability and then particularly a clarified sales target to show the ambitions on the sales development in the coming years. And with that, I turn to Helia, not to go through some of the financials for the Q1. We are on Page 15, the sales development in the Q1 for the group in total and how it's divided into our 2 segments. If we start with our biggest segment, Big Max, representing almost 90% of our sales, we have the sales development in the first quarter versus 2020 plus 22.9%. The sales growth it is divided into like for like acquisition and new stores. And in the period, the like for like growth was slightly about 16%, 15.4% and new stores contributed with 3.8%. We also have the acquisition and then 4 new stores in Denmark. And in Big Mac segment, the new stores contributed with 4.8% of the sales growth in the quarter. We have the smaller segment representing approximately 10% of our sales Skonka Big Royal and they had a very strong quarter and growth of 69.1%. The like for like growth was slightly higher and it's impacted by foreign exchange negative effects. So for the group, a growth of 26.4% The strong growth is from the underlying market growth obviously and the COVID-nineteen, the pandemic from stay home impact. But in addition, we have the strong sales from our growth initiatives contributing to the share gain as presented previously in the report, We have the Big Mac stores more in line with the market development. Although a small quarter, but we have also very strong growth in Skanska Bikivar from its own initiatives as well. Moving on to Page 16 and the full P and L. We have the sales of SEK1.1 billion in the quarter. This is one of our smaller quarters in low season. We have gross margin increase up to 33.9%. It is very positively impacted by favorable product mix and scale effect, but also increased from consumer market prices driven by market expectations of increased raw material prices in the period coming. The cost control remains solid. Comparable costs increased by SEK 9,000,000 in the quarter the increase is mainly due to personnel and store operations related to the sales growth. Costs related to new and the acquired stores amounts to 21,000,000. So in the period, we have strong sales development and cost control contributed to increased EBITDA by SEK58,000,000 from minus SEK51,000,000 to plus SEK7 1,000,000 for the Q1. The strong improvement is seen in both segments, but especially the improvement in Skanska Bigvaro with strong sales, in fact, a small quarter. If we move on to the cash flow and the net debt development, we have cash flow from operating activities of SEK 332,000,000 in the Q1, it is an increase of SEK 112,000,000 compared to last year. The improvement is mainly driven by the strong performance and in combination with some increase of accounts payable. We have a significant reduction in net debt. Net debt amounting to SEK 318,000,000 excluding lease liabilities to be compared with the position of DKK1.86 million in the Q1 2020. Thank you, Elena. Just to round this call off, Two more points. Firstly, on Page 18, quick overview on the Performance versus then the recently updated financial targets. Well, as a recap, sales increased by 26 percent in Q1, which of course is a very good first step with the new financial targets to SEK7 billion rolling 12 compared to the target of 10% in 2025. EBITA margin rolling 12% is almost 11%, 10.9%, clearly above the target. Leverage 0.4 times is also clearly better than the target. Dividend, the Board proposes 2.75 per share which is less than the 50 percent of net income still SEK 2.75 per share to be approved by the AGM in May. And the carbon dioxide emissions were 32% lower last year compared to 2010 and the target is to get to 70% by 2,030. So overall, a good start versus the updated financial targets. Lastly, Forward looking and looking particularly on 2021 and we're now on Page 19. Start by saying taking a step back and reflect on the Q1 and what that means. We should say that of course it was A really strong start to the year, still a good market growth, continued the trend from 2020 with really strong market share gains, even more market change gains now in the Q1 2021 continue to be driven by our initiatives and particularly Big Mac's e commerce that is growing at 90% is the biggest driver of that share gain. We also continue to see the fastest growth from younger customers, the trend that we in line with many others in Europe started to see during the autumn and have continued throughout the autumn and also now in the Q1 2021, which of course is also promising for the future. And just as in previous periods, we do get strong scale effects and profit improvement from sales increases. So overall, a strong quarter not just financially, but sort of confirming the initiatives and the effect that they have and also that we take market share. We are still very focused on our organic growth initiatives And we have much more to do on those and we clearly see that they are giving positive effects. So we are focused on continuing to move rigmarx towards that modern discounter for today's DIYers. As mentioned, The e commerce efforts are being stepped up during 2021 and we will continue to upgrade the store portfolio. We upgrade mainly in the low season and we will continue to open new stores. The target is 12 new plus the 4 acquired in 2021. If we then look a bit ahead, both in the short term and sort of the longer term, we could say that if we talk short term in the sense of next quarter short term, we expect continued good market and we also expect to continue to tackle some operational or quite some operational challenges that we adjust as we did in Q1. We expect the market to be Boosted by a stay home effect for at least good part of Q2 as well. Spring arrived later, but it's still a good market overall. We do have still Norwegian partial lockdowns in April, 23 stores at start of April, 11, so as of right now. And we are also up against exceptional comparable sales figures from the very peak of the stay home effect in Q2 2020, particularly so in April May. Longer term, we are focused now on Getting to SEK10 1,000,000,000 in sales in 12 to 25 and of course the other financial targets coupled with that. We are in a Good spot in many ways, but particularly sort of 2 worth to mention. First of all, these The growth initiatives that is really taking market share have a lot more to give. We also now have Denmark in place with a good start, which adds to the potential. And then secondly, Britax is now positioned to benefit from some really big trends with discount continuing to take share, home is becoming even more important and sort of increased digitization and e commerce growth, which also plays to our favor. That summarizes the or excuse me, that concludes the presentation part of this conference call. And with that, we turn to operator to manage questions. Thank you. Thank there will be a brief pause while questions are being registered. And our first question comes from the line of Niklas Yegman from Carnegie. Please go ahead. Your line is open. Thank you. Yes, a couple of questions, if I may. Firstly, if I can start with the last bit here. You talk about current trading. On the one hand, very strong momentum, on the other hand, very tough comparisons. Are you still growing As you go into Q2 or are the tough comps basically suggesting that you're now contracting in the start of Q2? Well, I think we have to answer that in 2 steps. Q2 last year was completely, I would say, unusual and exceptional. And the really Peak of the stay home effect was during April May. In total, the growth last Q2 was 40%, but April May were Clearly beyond that even. So compared to as we have a compared to history a very good start of April and continued good momentum in the market and continued very good effect from our initiatives, but compared to the start of the Q2 last year, We are not all the way up there. Okay. Okay. That's good. And also a question on the gross margin. You touched upon this here with quite a Strong gross margin increase and it seems like it was boosted here by rising raw material prices. Is this something that can continue Higher going into Q2 and the coming quarters or will tougher comparisons on this kind of the rising raw material price, is that something that's going to catch up and bring Gross margin is potentially lower or what is kind of the short term short medium term outlook here for gross margin? It's a good question, Nicolas. And a good catch. Let me provide some color on the gross margin. I think even moving back to get the bigger perspective in, we have been over the last 2 years or particularly I would say maybe last year to make it a bit easier, have very good growth hormone expansion driven by product mix and scale effect Basically particularly in logistics and where we are have a lot of our own control. And I think now as you Exactly as you say, I mean scale is not so big effect in the smaller Q1, but product mix continues to help. But the biggest Driver of the expanded gross margin in Q1 is the pricing effect and that requires some detailing. So what's going on is that the Raw material prices are really increasing in a lot of categories, I guess, around the world and you are probably very well aware of that on this call. What this market has proven many times at least during the sort of 4 years I've been here that increased sort of in goods prices turned into increased consumer prices. And that happens now as well. What is a bit different this time is that that happened quite fast. So consumer prices Went up almost faster than the COGS increased. So there is a time effect Which impacts gross margin positively in Q1 specifically. Now looking forward, we enter the quarter with, I would say a somewhat positive time effect still, but I think it is still very much to be determined when the dust settles in the raw material increase raised around the world, Whether the sort of net price impact will be positive or negative on our gross margin. So I hope we will know more. I guess everybody Hopefully, we'll know more about stabilized volatile markets by summer or so. But for now, it is a positive temporary effect and We will see where that lands when we are in summer. Thank you. That's very clear. I also have a question on the Garden assortment. You talk about a very strong growth here of 70% year over year. How Big share of sales are we talking about roughly? I think you mentioned here that it's available in 40% of your stores. But how big share of your sales roughly are we talking about it? And what do you see the potential here? How big part of the of your sales will this be 4, 5 years from now? Very good question also, Nicolas. It's still not a huge part of our sales and Garden is particularly peaking during Q2, so we are in total as a company still in sort of high single digits. If you just look at the Big Mac This is part of the business. Then of course, Kanske Bivior is really heavy within garden or garden related buildings, which is another 10% for the group. And yes, we are now as part of our Store 3.0 upgrade, putting garden department, small or large in No, most of our stores. So that will clearly continue to help. And we also see very good like for like effects on Garden Where our view is that there isn't really a good discount offer on a lot of garden categories. And then thirdly, I'd like to mention we also have a very strong growth of online growth of Garden products where we have a much wider assortment of garden related products online. So clearly a growth area for us and something that we continue to drive and believe in for the future. Okay, very good. Thanks. And also finally a question on your net debt to EBITA target. You mentioned here a target of to keep net debt To EBITDA under 2.5 times, you're at 0.4 times now. You're not looking at making any larger acquisitions. And the dividend payout For this year, it was only set at 35%. So how would you get to almost 2.5 times EBITDA in net debt, it sounds like the net debt is going to go lower not higher or are we missing something here? Well, your logic is completely correct. So I think the dividend target this was the proposed dividend was announced quite early last year was a lot of changes during the pandemic and the Board decided to announce that already in Q3. And I think we are really focused on as the primary growth driver organic growth and there is no Single large acquisition on the table. We are still open to make Acquisitions which are sort of a means to an end so to speak. I think the Denmark example is pretty good where we Acquire something that we think we can continue to develop and helps us boost the organic growth. So that may continue to happen. But even so, yes, we generate a lot of cash and particularly during Q2 and Q3. So There is a good discussion to be held, I think also in the boardroom, whether this should impact dividend or M and A or buybacks or even further sort of organic growth initiatives. But I think from a management perspective, we are Really pleased that we could have sort of a big room to focus even more on organic growth and we were also able to build up a really good inventory We're positioned really early within quite challenged supply market. But even that said, just looking at the numbers exactly to your point, Niklas, we will have A very strong balance sheet, even accounting for higher CapEx and early inventory build Just in a quarter's time or so. Thank you. Thank you so much for taking my questions. Thank you. Our next question comes from the line of Karl Lain from Carnegie. Please go ahead. Your line is open. Thank you very much for that. And hi, Matias and Elena, congratulations on a very solid report here. A few questions from my side, starting with the conversion here, 3.0 conversion on the stores. And talking about this has been quite an important driver here in like for like and that the previous concept grows roughly in line with the market and you are up at 46% today of the total stores versus 39% In Q4, is there any reason why you're not aiming to sort of do the full conversion Before 2023, given now that the market remains very favorable for you also at least here in the near term Or would that even be possible? Yes. Hi, Karl. Thank you. You are completely right in your Statement of the facts and yes, it's an important driver for us and yes, we have announced that to complete all the portfolio upgrade by 2023 And you're also right that this may be a good opportunity to do that a bit faster. I'd say there are also some practical or operational aspects to that in terms of upgrades and in some cases, lease contracts you would like to renegotiate at the same time, etcetera. But By the latest M253, this should be done and gives us a good continued effect for couple of years' time to drive like for like. Okay, perfect. And second question here on online. You had a nice slide on that here previously as well and also spent quite a bit of time here On the CMD, where you want to be? But could you give any more flavor sort of how long have you come here in the journey versus what you announced here on the TMB, you talked about increasing the number of SKUs, for example, to 150,000 versus 50,000 at now. Could you say anywhere more where you are there today and sort of how long you've come in that improvement journey in the online offering? Yes, we can. I think and it's good to put that in relation to maybe the Store 3.0 where as you say, we're sort of almost half The portfolio, I think for the e commerce part, we feel that we have much more left to do. So we are more in although we are Clearly moving forward, we see a lot more potential and we are still just I think we are now at 55 1,000, if I remember correctly, but there is a lot more work to do to broaden the assortment and to offer a wider Big Max range with more home improvement projects such as clearly drive sales. And we also believe that there is a lot more to do on the delivery part. Maybe stepping back to the some of the consumer insights from the CMD is that in this category, people would like to spend their time Fixing the fence or including the garden project or painting the wall and time and reliability is really of essence and probably partly why Click and Collect is Growing so incredibly fast. So we believe that with this effort we are doing there and as described at the CMD, We will also continue to take market share. So the track and trace would be a good one for us, for example. So it's a good question, Karl. And I think if we are sort of almost half On the store portfolio upgrade, we are much more in early stages on the e commerce part where we see a lot more potential. Okay, perfect. And final question here, a follow-up on the gross margin there. You talked about the price increases, the combination of Price increases and positive mix effect. And I think you already answered the question here, sort of how we reason for Q2 on the price increases. But could you say anything on the effect here in April so far, do they remain favorable? And is that a similar sort of thinking From Q1, what you've seen here so far in Q2? Yes. It's a gradual continuous positive effect. It's doesn't mean that in Q1, the pricing effect is the bigger one of the 2. But what is a nice Additional effect from the Store 3.0 upgrades is that the new assortment that we introduced those categories have a higher Gross margin. So as we continue to upgrade the portfolio towards 100%, we also continue to get a positive product mix effect. So It's not a huge shift versus Q1 to Q2, but I mean all in all continues to be somewhat positive. Okay, perfect. Thank you very much. Thank you. Our next question comes from the line of Fredrik Iversen from ABG. Please go ahead. Your line is open. Thank you. One question from my side. Mattias, you mentioned that you've sort of gained a few new customers in terms of younger customers. And I'm curious to hear what how these Deviate from your sort of legacy customer, I guess, both in terms of channel and product mix, but also average receipt and those kind Thanks. If you could just talk a little bit about that. Absolutely. And that's a good one. It's something which So several players in the DIY industries are currently digging into. So it's also a good one to compare notes on. But Yes. I think 2 maybe drivers of the sort of younger customers getting into Big Macs, Which is all in line with the industry, I would say, and starting at around August, September time mainly visible. First of all, I think More younger customers are now sort of entered sort of DIY as a phenomenon. And I think At the CMD, we also brought in the European perspective where I think the trend is that customers, people have been at home. I think there is a trend towards doing things yourself and taking care of your home and now grad step by step younger customers are also Taking on DIY and if you listen to Home Depot, the biggest DIY player on the planet, they see clear trends that The customers comes in and do smaller and easier projects. If I remember correctly, they remember things like pushing up shelves and fixing paints and stuff like that. And then gradually, I guess, with self confidence moving on to more and more projects or bigger and bigger projects and so part of their growth in the last quarter. And I think the second part which is really driving younger customers into Big Macs is the E commerce growth where we also see a lot of younger customers coming in, probably also connected to that we're offering more types solve home improvement projects and for example, garden equipment, lighting, storage products, which is also Maybe more relevant for younger customers. So both the renewed DIY trend seen across The Western world, since the autumn and the e commerce growth is helping us to get the new customers into Big Macs. Thank you. And to follow-up on that, just to get it right. So I read your answer, Matthias, as these new customers probably have a or have a lower average receipt, but a higher margin than your legacy customers. Is that correct? Yes, that's correct, Frederic. And I think it's not so much though I guess it's good that you follow-up. I guess my Point is that it's not so much that the customer profile is different. It's sort of the product mix that they buy, which is different. But yes, that would be a correct statement from your side. Excellent. Thank you. Thank you. As we have no further questions, I will hand it back for closing remarks. Well, thank you everybody for joining this call. I wish you all a great day and look forward talking to you again at the Q2 report.