I would like to wish everyone a very good morning and welcome here in this early December morning. Still no snow in Stockholm, but I hope that will come for Christmas. Warm welcome everyone, and we will today present our report from the second quarter and also give a little bit of an underway update of the strategic review that we are doing. Together with me, Lotta Lyrå, you have Göran Melin here as well, our CFO. The agenda is that I will start by giving a brief business update of what it is that we see in our different markets. Göran will then take us through the figures, and then I will come back at the end and comment on the strategic review.
As usual, we will have a Q&A facilitated by Magnus from Handelsbanken this time. If I start a little bit with the business update then, I think a challenging Q2 is a good headline for what it is that we have been through. When we met last time, it was already mentioned that we see a quite big change in consumer behavior. I think that the quarter, the second quarter really confirms that in a way. We see it not the least on a very intense increase in traffic to our website. That is of course a good sign because we know that traffic to our websites leads also to, at the end, that consumers come to the stores also apart from shopping online.
That is a good indication, but it's clear that the retail landscape is changing. From the figures, we feel that, of course, we would've wanted more, and sales are a little bit too slow, and the traffic to our stores is a little bit too slow for us to be satisfied. I would say that the second quarter has a lot been about securing commercial focus here and now. We have apart from initiating commercial activities throughout the autumn, also really focused on making sure that we are ready for the Christmas shopping that is really here and now. Apart from that, we have invested a lot in the strategic review that I will come back to later.
If I start by commenting on the second quarter of Sweden, when we look at the overall retailing figures in our segments, we see a slight slowdown. Despite that, you can say that we are still able to deliver 2% growth. A part of the explanation to that is the intense online traffic that we see, and still then traffic to our stores a little bit slower. We continue in Sweden to work further on increasing the service offering and the knife grinding that we kicked off not so long ago has really proved to be a fantastic success. We are now looking into more services to be added to the offer.
We have now 88 stores in Sweden, which is one more than quarter two last year. We turn to Norway, we see an increased consumer confidence, but also there a slowdown in our segments. We deliver 4% growth during the second quarter. Again, very intense traffic to our website, which we are happy about. Same tendency here that the store traffic is decreasing. Three more stores than the second quarter last year. We turn to Finland, we see more of a flat development in our segment, and we grow by 9% in local currency. Same tendency when it comes to online increasing and store traffic a little bit slower.
We have increased with one store in Finland since quarter two last year. If I turn outside the Nordic, we are working hard to optimize our stores in Hamburg, and we now have, since, I should say in November, four stores in Hamburg. I think one of the very concrete outcomes of this optimization is that we've taken some learnings from how the German consumer like to shop at Clas Ohlson. The fourth store, if you would go there and visit it, looks quite different actually from the other three, where we have turned to a more consumer situation-oriented shopping experience, which is also an important test for Clas Ohlson as a totality.
The fourth store is now in place since last week, actually, looking then slightly different, and we look forward to evaluating the learnings from that. In the U.K., we see actually very good development in the new format stores that we have put in place in London. Here I would really like to emphasize online, which is growing tremendously in the U.K. That is really good to see. As you have seen already in the news, we have decided to end the franchising cooperation in Dubai, and I will come back later and comment a little bit more on that. During the second quarter, we have not added any stores outside the Nordics. That was just briefly about the business. I will hand over to you, Göran, to go through the figures.
Thank you. Going into the numbers, we start with our second quarter covering the period 1st of August to end of October. In the quarter, we had a sales growth of 2% in SEK and divided by country. In SEK, we had a growth of 2% in Sweden and in Norway, and a growth of 9% in Finland, and outside Nordics decreased with 14% as an effect of the store optimization in U.K. In local currency, sales were up 3% and like-for-like growth was flat. There are 15 more stores in the network compared to end of period last year. Divided by country in local currencies, we see a rather soft sales growth in our home markets with Sweden up 2%, Norway up 4%, and Finland up 9%.
Outside Nordic, sales are down 12% in local currency, also of course affected by store optimization in the U.K. Our gross margin is down 0.3 percentage points, and the gross margin was negatively affected by stronger U.S. dollar, increased commercial investments, and the weaker NOK. This was largely offset by currency hedges in NOK and exchange rate effects related to delay in inventory. The share of selling expenses decreased by 0.8 percentage points to 31.6%, and the share decreased as a result of lower cost in the U.K. Administrative expenses increased due to the SEK 5 million donation to Clas Ohlson Foundation that was decided on the AGM in September, and also impacted by around SEK 10 million as a result of the 100 more years strategic review.
This adds up to an operating margin of SEK 125 million for the second quarter and an operating margin of 6.2%. Earnings per share is SEK 1.52. We now move into our first six months, covering the period first of May to end of October. During the period, sales growth was 2% in SEK, divided by countries, Sweden up 1%, Norway up 3%, and Finland up 8%. Outside Nordic countries decreased with 19%, affected by the U.K. optimization. In local currency, sales increased with 2%, but like-for-like growth was down 1%. There are seven additional stores net during the period compared to the same period last year. Sorry, seven more additional stores during the period.
Operating profit increased by 11% to SEK 225 million during the period. Operating margin increased by 0.5 percentage points to 5.9%. Earnings per share increased by 12% to SEK 2.74. We continue to invest at more or less the same level as last year, mainly in new and refurbish stores and in our new IT system Score. We have a strong financial position and a strong cash flow of SEK 187 million. Inventory levels end of October are at healthy levels. We have a net cash position of SEK 296 million. That concludes the first six months. Let's move into the November sales. Sales in November are down 2% in SEK and flat in local currencies.
Divided by country, sales development is down 4% in Sweden, down 1% in Norway, but up 3% in Finland. Outside Nordics, it's down 5%, affected by the store optimization in the U.K. Like-for-like sales are down 3%, and there are 15 more stores in the network compared to end of period last year. That concludes the financial part. Back to you, Lotta.
Thanks, Göran. I will update briefly on where we are with the strategic review. As I said already earlier this autumn, this strategic review is about finding the way to grow Clas Ohlson forward. That is what we are aiming to do. Just to show you a little bit the plan that we are working towards, we have started by actually going back to our roots. Who was Clas Ohlson? What was his ideas? Why do we have the mission we have? Who are we? We will see later how important it is for consumers that companies or brands are real. I think this work really showed that we can really be real because we have a rich history to rely on.
Secondly, we have spent a lot of energy, time, and effort to talk to consumers, both customers that we have today, and that have been with us for a long time, new customers, but also consumers that don't shop with Clas Ohlson today to understand a little bit a picture of what they see in us and what we could do differently. We have also done a 360-degree analysis of Clas Ohlson and really understanding the different underlying, you can say, logics behind why we are where we are and the potentials forward. We have worked to put in place some preconditions for the future. Some of them, I will comment on in a second, but this has also been connected to some of the changes I have made in group management.
We are now stepping in to actually outlining the direction forward. On the 3rd of May, we will invite to a Capital Markets Day, where we will present the complete strategic plan and the goals. The first conclusion of the strategic review is that we believe that we have a fantastic foundation to build on and that we also have a mission that we will continue to build forward on, which is about inspiring people in their every day to make sure that the wallet and time, that there is enough money and time, to do what you want basically. Why have we decided to do this?
Well, because we believe that people is always good to start with because that's really the reason we exist at the end of the day. There will always be an every day, which is five days a week, only two days are for parties, so the majority of our days is actually everyday days. There will always be limitations of money and time, so practical solutions will always be relevant. I think the big question is what could this mission mean, and what would make us unique? What we have done is that we have looked at some of the mega trends that you see right now, in the surrounding world, and I would like to talk about two a little bit more today. One is number one, where businesses are redefined.
I think we see borders between different sectors within retailing, but also other sectors becoming more and more blurry. If Hemfrid in their capacity as a cleaning company starts to deliver consumables, are they then a service company or a retailer, to take one example. I think this also shows that consumers are actually open to interacting with brands on a much more broad arena, which of course gives us possibility with the strength of the brand that we have. 99.8% of people in Sweden and Norway know what Clas Ohlson is and have a positive impression of us and trust us, which is fantastic. In that context, I think there is a lot of things we could do within the frame of the mission.
If I take another one, which is the empowered consumer, transparency has never been richer. I think for us it's about benefiting from that now. We have a lot of things to be proud of in how we run our business. I think we could do much more there as well. If we look at the different consumer groups and how different consumers are acting, it's very, very scattered and at the same time complex situation where you have things like at the same time being real, wanting faster shopping and faster convenience and many other things.
I think without going into detail on each and every one, the challenge for us, because we want to be for the many, we want to be for the many wallets, is that we need to offer things, not all of them maybe, but a lot of things at the same time. Therefore, we need to look into different business models in the future. Look, making Clas Ohlson slightly different than today. What we have done is that we have also used a lot of different sources. We have applied modern analytics. We have analyzed 40 million receipts to understand in detail how our shoppers behave, what combination of products they buy, when they buy, what they buy at the same time, how much they buy, and so on, which has given a lot of interesting insights.
We have also both met a lot of consumers in all markets personally to understand their view of us, and we have done thousands of exit polls to understand what their experience was like. This has been a big asset in really understanding what the strategic review needs to answer to. Some of those things is that we clearly need to evaluate to step into new business segments. That could mean that you see new products, new product segments that we don't have on the shelf today, but it could also mean that we step even further into the service sector and combine those two.
It's also clear that part of what we offer today, could be questionable, so it might be that we decide to step out of different segments or offer those segments in a different way. I strongly believe that in order to offer the consumer simplicity and convenience, it's not necessarily so that you should do everything on your own. It's about interacting with the right colleagues in the business and work through strategic partnerships and corporations to offer not only the good shopping experience, but also the right logistics set up in order to make sure that customers can shop the way they want. All in all, we see a potential for growth in every aspect, including in the Nordics.
What I would like to emphasize is that I think the definition of expansion needs to be reviewed because expansion cannot be measured by number of stores anymore. That's not the way to do it. What we have clearly seen is that we need to revise our way of expanding. Expansion, for me, is actually accessing a new customer with a new product. That is what expansion is about, and that is one of the reasons why we have taken the decision to pause store expansion as we know it in the Nordics. We believe that we can expand Clas Ohlson in the Nordics in many other ways, and we will come back to that. Briefly commenting then on some of the specifics that were mentioned in the report.
We have decided to terminate the franchising, the franchising business in Dubai and the logic behind this is very, very simple. We did not see the sales that we wanted to see and therefore, we decided together with our partner in Dubai to close down the business. I think this has also given us a possibility to focus on other things, of course, which is also important in a situation like this. I come back to the refocusing of store expansion in the Nordics, with the message that we will expand in the Nordics, but it will not happen in the way that you have seen before. We will, as of now, halt the store expansion of normal Clas Ohlson stores in Sweden, Norway, and Finland.
We will increase the work with testing new formats, and we will more look into relocation in order to make sure that we have our stores where the consumer wants them to be and where the traffic is. I think in the light of what is happening in the outside world, this is not such a radical decision in a way. Then of course you need to see this in the context of us really gearing up to find ways to increase our online and digital offering in both the midterm but also the long term. Here I would like to emphasize that of course you can say that the website, many people talk about the website only. I think that the digital offering is so much more.
I think it's about the logistics setup that you have behind. I think it's about the different ways of interacting online, for example, through subscription, and so on. There are many different ways to act online. Also we have the platform economy, which is actually growing, where we also have possibilities to, I think, take a different position than what we have done historically. This is another important area that we are now really looking into more in detail and we'll come back to. Summarizing this all in all, we are in the store here and now.
You see a lot of Christmas shopping, things here, and that's of course one of the biggest focuses right now, to make sure that we are fit to meet every Christmas shopping customer in the best possible way. We are preparing to celebrate 100 years, next year. We will do that with all our stakeholders, everyone here, all customers, shareholders, coworkers, and so on. Then, we continue to keep high speed in the strategic review. As I said, growth is really what we are after, but in a different way maybe than historically, and that includes also investigating new business models and ways to grow. Before, handing over to Magnus, just want to wish everyone, here and, also watching, a Merry Christmas and a Happy New Year. Thank you.
Thank you. My name is Magnus Roman. I work at Handelsbanken, covering Clas Ohlson share among others. I'll kick off this question- and- answer session with a few questions, and then I'll hand over to the audience. Firstly, maybe if you can talk a little bit more about the potential way to sell. You talked about your brands being strong. I mean, I guess you also alluded to your product brands. Your view of the potential for you to sell through external channels. You mentioned perhaps maybe selling vacuum cleaners through Hemfrid or something like that. How do you view the platforms that you spoke about for example, in Amazon? What is your view of potentially selling through third party?
Yeah. I think in general that the platform economy is a response to consumers wanting convenience, and I think the best example is probably Alibaba in China, where the Chinese consumers are really fully into that. I think it's here to stay, and we will see more of that. I think that it's possible to maintain a strong brand as a company and at the same time have a relation with the platform. I don't see a contradiction between that, but the details of it we need to come back to.
Right. you also mentioned here in the presentation that you've seen strong online growth sort of mitigating some of that weakness you've seen in your store sales. Can you give us an update of where the penetration rates have been in Q2 and also maybe how you view profitability in your e-commerce compared to the store sales?
Yeah, as you know, we don't communicate the specific figures, right? I think what we see is clearly that consumers are, this, the omnichannel, the buzzword that has been around for a long, long time. As I mentioned, we have really talked to customers, and it's obvious that our online channel is used as a pre-purchase tool, so to say. It serves an important role in that, and that there by contributing to the totality. As I said, I think already last quarter that of course we have a lot of improvements to do to increase online sales further.
Right. In terms of IT, you spent, when the next financial year is over, you spent around SEK 1.5 billion for a five-year period on improving your IT system. You talked about, mentioned Score here and also improving your online capabilities. Can you give any specific examples of what that IT investment.
Absolutely.
H ave brought to you?
Yeah, no. The big launch is to come this spring from an ERP perspective, just to clarify that. One very concrete example, connecting also to that we want to test new formats, is that one capability that we will get through those is that we will be able to tailor assortment to stores based on consumer behavior and shopping patterns in a completely new way. That I think is a really big strength that we can build forward with together with refocusing the store expansion agenda.
That's in data analytics and allocation of.
Yeah, fulfillment as well. Yeah.
Right. Of course, you talked about here halting the Nordic store expansion, but you've been opening smaller formats and you've been open different or new formats. Should we expect that you will transition some of your existing store into new formats or also opening new formats on a net basis?
Yeah, that I think you should absolutely expect. I think it's important that what we want to do is that we want to enable consumers to shop in the way they want to, and then we want to be effective in doing that. Secondly, what we have seen in the strategic work that we have done is that the smaller formats are not only more efficient, you can say, but also consumers perceive the service level totally different because you actually see the Clas Ohlson colleagues when you enter the door. From a coworker perspective, it's much easier to see where the consumer is. There are other benefits with small formats than the pure efficiency dimension of it.
Perhaps just a final question from me here before I leave over to the audience. When it comes to Germany, you've opened the fourth store you mentioned. Are you happy with your footprint in Hamburg now? What is your view for the next step, going forward in the German market?
We had this was the starting plan, right? I think what we will do now is evaluate these four. As I mentioned before, the fourth store now plays an important role in seeing how do German consumers want to shop with Clas Ohlson. I think we need to see the conclusions of that before taking any further steps.
Right. Have you made an evaluation of where the next location would be if you would opt for that decision? Or is that still to be reviewed?
No, I think that's still to be done. Again, it's, Germany is not an exception to the rule that consumers' behavior is changing, so we also need to look at e-commerce in that context and so on. I would like to come back with that totality.
Great. Maybe if I can start then with Niklas Ekman.
Yes. Thank you. Niklas Ekman from Carnegie. Can I start by asking about when you talk about store optimization, that's a word that's often used for store closures. Are you looking at a significant need to close a lot of Clas Ohlson stores?
The first step we have taken now is to say that we don't put anything more into the pipeline, right? I don't want to exclude anything at this point, but what I would like to say is that the store network used in the right way from a logistics perspective is a big asset. It's not for strange reasons that Amazon decided to buy Whole Foods. Part of that was to make sure that they could place stuff in physical places as well. I think it's important not to become black and white when discussing this question.
I guess you'll see a combination of downsizing existing stores and maybe closing a few stores probably.
That could be one hypothesis.
Okay. In online, can you mention a little bit about what kind of efforts you're making? I know you made a big relaunch of your website a couple of years ago. It didn't have any material impact on online orders. Since then, you've stopped reporting your online sales. Back then it was about 2% of your sales and it was declining. I'm curious.
Yeah.
If you've seen a dramatic change in your online sales and how you address online sales to your consumers.
Yeah. No, as I said, we do see a big increase, the point is that it's not only about the website. If you look at the Clas Ohlson assortment, it's everything from plastic bags to robotic lawn mowers , right? From a consumer behavior, how you want to digitally shop those things is completely different. That's where I think that when we talk about digital offerings, selling more plastic bags online probably is not the same thing as selling more robotic lawn mowers . I think that the commercial packaging and interaction with the customers in these two extremes is what we also need to work on.
In terms of how much effort you as a consumer want to spend in that shopping. I think it's more than the website. It's about the logistics. It's about taking down the hurdle to actually accessing the products through subscriptions and other things.
I think one of the problems with selling online is, of course, that you have extreme price transparency. If you make price comparisons with Clas Ohlson, you rarely come on top in terms of price, and maybe that's not the position where you want to be. Isn't that difficult then to strongly grow online sales if you don't take a price leading position?
The transparency is really there, exactly as you're saying. I think that, it's definitely a question that we need to look into, so full tick on that. I think it's important also, as I said, if you buy a robotic lawn mover or a router to your home, it's also worth something that you have someone to call when installing it because that's when the hassle comes. I think there are other components in really building a sustainable online business that come into the consumer choice as well.
Can I turn to more technical questions on the gross margin? 'Cause you mentioned here the gross margin declining, and I know this was a quarter with very easy year-over-year comparisons. You had quite negative impacts from currency last year. Yet we see a continued decline in this quarter. Can you just walk us through the different moving parts that have affected this quarter?
Yeah. The major moving parts is, as you say. We had easy comps last year. I mean, that is mitigating what is happening. We had positive effects from hedges since we had negative last year. What is affecting us now in the quarter is the stronger US dollar that, you know, we have a delay in from when we buy things until it hits our P&L. Going back almost a year, we had the really high U.S. dollar value that is now coming through our P&L. We also have the effect from selling currencies from Norwegian NOK. Well, the NOK is a bit lower compared to the same quarter last year, we also have some more commercial initiatives during the quarter that is on the negative side on the gross margin.
How significant were the commercial activities? 'Cause we noticed that in September you were quite active with campaigns. Did that have a material impact on the gross margin?
Not a material impact, enough to be said as an explanation why the gross margin is declining compared to last year.
Also the costs related to the strategic review of SEK 10 million, can you comment a little bit what that relates to? Is this staff or redundancies or?
No, it's invest. Like I said, we have invested heavily in consumer research. B oth, applying, modern analytics but also actually, exit polls. We have interviewed customers, and so on. I think it's quite natural in a, in a work like this with the ambition that we have that you also need external resources. It's mainly connected to that.
Okay. Thank you very much. Maybe over to Nicklas Färm.
Thank you, Magnus. This is Niklas with SEB Equities. I just thought I start by asking a few more questions on sort of the fundamentals from the new strategy launch upcoming. My first question would be, now, you haven't disclosed with decimals the number of store visitors for the past couple of years. There could be some room for marginal errors here, but essentially for the first time ever, it seems like store footfall decreased last fiscal year-on-year. That means number of visitors per total square meter footprint has declined more or less from a peak of 415,000 visitors to 265,000 or something like that. That's a 36% decrease over the past decade. I was just wondering, do you think that's. Is that a good proxy for, you know, space optimization, to look at visitors per square meter in that sense?
As I said before, I believe in the sort of hybrid of online and store. I think it becomes very technical when you do it like this. For me, it's clear that the formats that we have today are maybe not completely geared for optimal customer meeting or efficiency. We see that we have a well-built network, and that's the reason why we inform of what, with what we do today, that we are halting the normal store expansion. We are investing in new formats and as you've said, most likely those will all be smaller.
Yeah.
I don't think we are at the technical level, right now. We're more looking at the direction where we want to go.
Sure. Appreciate that. Could you, I mean, just as an example, you reported flat like-for-likes in this fiscal quarter.
Yeah.
How between, you know, approximately, how does that break down into footfall, price mix, if we try to reconsolidate that like-for-like number? What are the main driving forces here?
The main driver is footfall.
Yeah.
Yeah.
Okay.
That's the reason we mentioned that.
Yeah
As an explanation, but so that's the main driver.
Yeah. Is that decline accelerating in your fiscal Q2 compared to, say, the past couple of quarters prior to this?
Not accelerating.
No.
I think you must always compare a quarter to the previous quarter. I mean, the trend must be compared to previous year not just month by month since you have different patterns coming into Christmas sales and so on. It's a decline in footfall.
Final question for now. If we look at your store optimization program in the U.K., it costs about SEK 107 million of which SEK 60 + is due to leases. That's a very high cost per store, and I was just wondering, in the case you would actually shed store, the number of stores, would you care to give us some indication of sort of the cost breakdown for closing a store in the traditional Swedish or Norwegian marketplace?
I mean, the cost, as you mentioned, when closing down the stores in the U.K., the majority of the costs were leases and also to some extent, amortization of fixed assets. If closing a store in, also closing another store in the U.K., if that is coming, then if you do it at lease end, you also have most of the fixed asset depreciated. Also coming into the Nordics, if leaving the premises in an existing stores, normally you do that when the lease expires, and you also have all the fixed assets depreciated. In that sense, the cost for closing the stores is not that high.
Thanks so much.
Yeah. Hi, this is Stellan Hallström with Nordea. I wanted to come back to the question on the store network and future expansion there. Just trying to understand if we exclude Germany and U.K. and maybe also very new stores, do you have stores in your network that is not profitable today?
Yeah, I think it goes without saying that could be the case, given how the like-for-like is developing, right? That's why it's so important to all the time be on to relocation and looking at the formats as such to also handle those situations.
All right. Maybe, forward looking question then, in two years will you have more stores or fewer?
Actually, the instinct would be to say fewer, right? I think that part of our assortment is really fit for really small formats. As I said, corporations in different ways. Yeah, I cannot give you. If it's number of stores that you are after, I think we have to wait and see because the really small formats could be more stores, but a lot fewer square meters.
All right. Also a question on the increasing online traffic here. Does this mean that your online sales is also increasing or is it more?
No.
Browsing?
The online sales is also increasing significantly.
Given that you have such an increase in online traffic. That your footfall is decreasing. Is that saying something about conversion, sort of online to stores is falling?
No, but I think it shows the potential. That's how I see it. Then it's more of course to understand if there is a leakage, how to close that, but there is definitely a potential.
Right. Just finally on these, 11 stores still in your contracted pipeline. Are there any break clauses possible or you will go ahead with all those 11?
I think what we are doing primarily now is to make sure that they are really geared for fulfilling the task. As I said, the fourth store in Hamburg looks very, very different from the others. I think there is also potential to make sure that what we fill them with, could look differently. We are working also to optimize those 11.
All right. Thanks. Further questions in the audience? Maybe we should turn to the telephone conference to see if we have any questions there.
Thank you. Ladies and gentlemen, if you do have an audio question for the speakers, please press zero-one on your telephone keypad and you will enter the queue. Ladies and gentlemen, once again, if you do wish to ask a question, please press zero-one on your telephone keypad now. As there are no questions from the phone lines, I will return the conference to our speakers.
All right. Maybe I can just follow up on one question regarding investments you've made in this strategic review. You talked about SEK 10 million here. It's been a lot of customer interviews. Consultancy for that. How do you see the coming quarters cost for your review and up until the Capital Markets Day where you present new targets?
No. No, we do see that there will be some additional investment that we will present also separately.
Would that be on par, do you think, in the coming quarter with what we've seen this quarter?
Yes. This will be probably on par give or take a little bit, but.
Right. I think we had an additional question from Nicklas Färm here.
Thank you, Magnus. Yeah, I just want to understand a little bit more. It's not the most important stuff anymore, the U.K. would you care to give us some update just how the stores that you actually appreciate, how they trade in terms of, I don't know, comp store developments?
Very well.
Very well?
Yeah. Very well.
Yeah.
Actually, yeah, very well.
Yeah.
As I said, e-commerce is really, yeah, really taking off. We're quite happy about that actually.
Following on to that, you've said now with the Croydon store still operating.
You're aiming at SEK 60 million in savings on a full year basis. It would be great if you could share with us maybe the progression so far in the first half year and what to expect for the second half implicitly, please.
Yeah. I mean, what we have, what I said before, the total saving compared to when all the stores were open, the saving is approximately SEK 60 million. We said last year it was around SEK 35 million saving, meaning that the additional saving this year will be SEK 25 million distributed during the year in accordance with the time of the store closures. We are on par on that plan.
All right. Thank you for clarifying. Thanks.
Yeah, just, maybe if you can comment also on the increased commercial activities, to what extent you see that as, being just phasing of planned campaigns or something that also could be, recurring?
A little bit of both, I would say, actually. Both.
Maybe just following up to that, you mentioned 3 drivers to the weak gross margin, the U.S. dollar, the NOK, and then these commercial activities.
Yep.
Is it fair to assume that they are also, in the way you present them, the size of the magnitude of the impact?
Yes.
Is in that line?
Yes, we always do like that. We start with the biggest impact and then. Yeah.
Right. Would you say that looking forward and what you know about or sort of the weakness we've seen in the NOK that now reverses with the hedge contracts? Will that affect, in your view, be the same in the current quarter?
I go with.
With the magnitude order.
We will still have the positive effects compared to last year from the NOK hedging in Q3. It will evens out in Q4. We will also have the effect, as I mentioned, from the NOK on our selling currencies and also the U.S. dollar impact will prevail in Q3.
That's helpful. Any further questions? All right. I think that summarizes it. Thank you very much for the presentation.
Yeah. Thank you, Magnus.
Okay.
Thank you.