There we go. Welcome, everyone, to Lyko Group's presentation of the Q2 . We are happy to share a short presentation with our CEO, Rickard Lyko, and our CFO, Ylva Norlén. The call will be recorded, and you can find it on our website and in the caller app. With that said, I leave the floor to Rickard.
Thank you, Tom, and welcome, everyone. We'll jump into the PowerPoint. We can go into the first slide. We are having a good result. We are growing about 8.6% this quarter and reaching the SEK 1 billion milestone. We are also seeing that we have our second highest EBIT and 71% growth since last year, which end up with SEK 54 million.
We see that the gross margin is 43.5%, driven by the price discipline and the focusing on the profitability, but also the focusing on our profitable market, which are the one that's standing behind the growth.
Something that also are helping is our own brands and our own brands growth in the quarter, which also are 23.4% and is now SEK 88 million in the quarter. We are also reaching the SEK 4 billion milestone in the 12-month period.
We have also been very much focused this quarter on the cost-saving program. We have also come to completion on that, on the personal cost side of it, still are also in progress as planned for the rolling 12 months to reach the SEK 100 million. That will also a lot in front of us with the bigger quarters to come.
We're seeing that the strategy is starting to delivering results, better cost control, stable margin, and visible effect gains. Profitability prioritization is also continuous in a challenging market. We see that we still have high competition, both here in Sweden, in the Nordics, nothing has changed there. We also seeing that we can manage that. We are also in an execution phase with the cost-saving program, a more efficient organization.
It's also good to see that the whole organization have a lot of focusing on that side. We still can deliver. Also the stabilization of the logistics. We know that we're going to reach numbers into Q3 where we have a lot of problems with the logistics last year in the go-live with the new automation.
We see also that a strong foundation for future growth in community and own brands, and also that we have a stronghold here in the Nordics. Our own brands is something that we are building for the long run.
We see a good growth in the quarter, both for the work that has been done for quite some time, but also that the stock levels and new launches of product is starting to giving result, and this is something that we are building for the long time.
It takes time, so a lot of the result we see now is initiatives that we took two to three years ago, and that will keep hopefully continuous because we have a lot of new launches in all the brands that we are handling here. We also opened two new stores. One in Charlottenberg, is in the border to Norway, and the Kalmar opening, which Kalmar is the new concept now.
We have two stores in the new concept, Täby and Kalmar, and we are really seeing that they are working as we hope for, and they are really helping us building the brand awareness, but also helping us building the own brands where we have a bigger footprint than we had before.
We also know that our community is something that are quite unique for us, and that's something we are building also for the long run, but also helping us to hold a unique position when we are talking about with our suppliers and the brands that they are driven.
They are there for building the beauty brands, and we are really helping them in the community with that, creating unique content with real people that are adding that to the daily. We have also starting to pay for the creators at the platform, and that also we're seeing working very well, and now we're adding more creators to that platform.
That is also something that we are building really for the long run, but also starting to helping us a lot now. We also launched two new brands.
We have launched a lot of more brands, but the biggest one is Natasha Denona, which has been exclusive with Sephora before, and Morphe. It's also helping us building the position in the makeup, which we know is super important in the categories we are operating in the beauty, because a lot of the beauty segments start with the makeup.
That is really helping when we getting those brands on board, and they are also available in our stores. With that said, I will hand over to Ylva. Oh, sorry, one more slide. The automation, I'm here at Vansbro at the warehouse, and that's working very well now. We are operating and starting to make it more and more efficient. I will say we are almost on the full swing on it now.
We are also seeing the automation with the robot picking is working very well here. We know that we can add more robots as we go. Right now we have three of those picking orders and that are also keep on adding up month after month because that's the good part of the automation is when it learns how to pick it will keep on operating it and keep on making it more efficient. Now I will hand over to Ylva.
Thank you, Rickard. I will go through the results for Q2 in a little bit more detail. Starting with the net sales for the group, we had a really strong sales increase in the quarter, 8.6%, amounting to SEK 1 billion, 21 million. Like I said, this is an important milestone. It's the Q1 that we have been beyond SEK 1 billion that is not a Q4 quarter.
Big celebrations. In local currencies, the growth was 7.2%. Another milestone passed is also that we passed the SEK 4 billion mark now as a business, which is also great news. This growth was enabled through successful campaign execution mainly and new stores. It's also backed up by really strong development in Sweden and Norway, especially.
Looking at the gross margin, we are super pleased that we are on the same level as Q2 last year, which was very strong. This gross margin is higher than all quarters of 2025. What's behind the gross margin is strong price discipline.
We also have higher supplier contributions compared to last year. The good growth within the own brands is also helping here. Super pleased with this result. Looking at the cost side, if we look at the other external costs, we can see that we are significantly lower now as a share of sales compared to the same quarter last year.
This is primarily driven by lower freight costs and also lower marketing investments in the quarter. We also have one-off cost weighing down this result. It's almost SEK 1 million taken in relation to closing down the Tyresö factory.
When we look at the personnel side as the share of sales, we are down almost 1 percentage unit compared to the quarter last year. However, the cost levels are almost level to 2025, and this is due to the fact that most people who were affected by the cost savings program still worked majority of Q3.
Of course, we also had factors like new stores, salary revisions, and also more employees that joined the company during autumn 2025 compared to the spring last year. Here we also have a positive one-off effect of SEK 1.3 million as we released some of the restructuring provision in this quarter.
Just a few more words on the cost saving program, a little bit of a recap. The objective with the program was to save SEK 100 million in the period from February to January 2027.
The majority of the cost saving will come from the reduction in the personnel side, primarily white collar organization. We have during spring, had the objective to form a new organizational structure and also reviewing and moderating the operating model for the company.
The status right now, we have identified SEK 100 million in savings, and this will be realized gradually over the coming period. We can see some of the effects, of course, already now in Q2. As we've also previously announced, the personnel part of the program is finished as of June. We now see that the total one-off costs for the program totals at SEK 21 million. The biggest effects from this will be in Q4 and onwards. Gradual realizations of these savings.
I know this has been appreciated in previous Q calls, since we haven't had big one-off costs previously within the group, we would just like to give more detail here on how this has been each quarter and what type of cost we are seeing. In total now rolling 12, we have SEK 40 million in one-off costs if we add up the H2 of 2025 and H1 of 2026.
In this quarter, we had SEK 0.5 million one-off effect. Coming to the EBIT of the group, this is the second most profitable quarter ever for Lyko. It's SEK 54 million and corresponds to a margin of 5.3%. There are many underlying reasons to this result, mainly it comes from higher, of course, sales growth and also a strong gross margin, but also from the effects of the cost-saving program.
If we look into our segments, the segment Retail grew by 8.7% and also passed the 1 billion sales mark with SEK 1 billion, SEK 1 million. The increase is mainly attributed to Sweden and Norway, super strong performance. Looking into profitability here, we see that the margin for the Retail segment was 11.6% and delivered SEK 116 million to the group.
The group functions and other here we have a selling of SEK 20 million, and this is the external production from our factory and also the 3PL logistics that we handle in the Vansbro warehouse. SEK 20 million, 8.3% growth from last year. Looking into the cost side for group functions, we are at SEK 62 million, quite level with what it's been for the past three to four years. This is, of course, something to be expected to shrink in the coming quarters.
Lastly, a few words on the investment side and cash flow. We have, as previously communicated, no bigger CapEx investments underway. We have approximately SEK 70 million planned in spend for 2026, in this quarter it was SEK 25 million. We opened two stores in Q2, we maintain the appetite to open more. Stock levels were at SEK 537 million, which is a steady level that we have been on for almost four years now.
Yet again, we managed to secure higher selling with improved stock-to-sales ratios. Now at 13.4% compared to, we were up at almost 18% a few years ago. This is super strong development. Cash was at SEK 50 million at the last day of the quarter. Lastly, I would like to add a few words on the announcement that went out this morning.
I have chosen to resign from the Lyko Group, as I've accepted another exciting opportunity, but will remain here at the company until February next year. It feels really good to be able to be here and continue the 2026 delivery of results.
Yeah, we thank Ylva for really developing the financial part and Lyko in total since she entered two years ago or something. We are thankful for that. Now we're handing over to questions, right?
Yes. Please raise your hands when you have questions. We start to go over to Fredrik Ivarsson. Please go ahead.
Yeah. Thank you. Good morning, all. This is on behalf of Benjamin. Sorry, I've been jumping a little bit back and forth here, so maybe you already have answered this question. On the SEK 100 million savings that you guide for, how much of those will be visible in H2? When is the full run rate reached?
Well, what we have communicated is that we will save the SEK 100 million until the end of January 2027. The pace, of course, will depend a little bit on the commercial success in the Q3 and Q4 since, for instance, freight savings are dependent on order volumes, et cetera.
We have not sort of broken it down more per quarter as we tend to not guide going forward. The comments that were on that is what we will share. The savings will come gradually over the quarters, but especially in Q4.
Okay, good. Thanks. Second one on marketing spend, that fell to 8.5% of revenue without any impact on performance it sounds like. Is this a new sort of structural level you believe, or do you think this will ramp up in H2?
We haven't guided exactly where the level should be. We have talked about that we want to keep on investing in the market side because that's driving a lot of our growth, it can go up and down in between quarters and so on.
I think this is on the lower half of that, and we have said up to about 10%, but we will see exactly where that landed. Part of it is also performance driven, which also makes a difference when we are growing in our more bigger markets than our newer markets.
Perfect. That's all. Thank you.
Thank you for that, Fredrik. We go over to Roman Romanov , SvD Markets.
Yes,Roman Romanov here. Thank you. Yeah. Firstly, on the top line growth momentum improving here in Q2 relative to Q1. Perhaps a bit of that, of course, is FX translation turning from headwind to tailwind in this quarter and maybe a little bit easier comp.
Speaking of comps, if we look into Q3 and Q4, can you elaborate a little bit about how the comps look there and what we should keep in mind as relates to these coming quarters?
I think what we said last year on the quarter three, we had a lot of issues with the go live with automation, which affect both outbound and inbound, which also mean that we have less assortment wise, and it also cost us a lot to delivering more orders.
We were building that up under the Q4, we have a good Black Friday top line wise. I'd say we will be meeting easier top-line numbers in Q3 and harder in Q4, also profitable wise, we had tough both Q3 and Q4 in comparable what we did the year before that.
That's very clear and helpful. Thank you. I also have just one little bit more detail perhaps, on the D&A cost up here just about SEK 21 million year-on-year. Is it correct that it's SEK 12.5 of this increase relates to you now starting to depreciate the new automation investment? If so, the residual SEK eight or SEK nine, can you elaborate a little bit of where they come from?
Yes, depreciation on the warehouse commenced in March, it's SEK 4.33 million per month. The remaining is attributed to tech systems, especially our new order management system our new search engine that was launched during spring.
Great. Yeah, maybe just final, I'll also ask about your view of your balance sheet now as it improved quite a bit sequentially from Q1 to Q2. You do not elaborate on your leverage ratio, or you don't write them out in the report adjusting for IFRS 16, the multiples, I mean, the gearing multiples. It has come down, at least on my calculation, substantially from Q1 to Q2.
Both [Foreign language] and [Foreign language], so to speak, have been altered here. As you look ahead now into the second half of this year, and you already alluded to, Rickard, the comparisons up and down on top line, but soft on profitability both in both coming quarters. How do you think about your balance sheet and the gearing?
Is this an area that you see you need to prioritize still in the second half to get the gearing down, I mean?
Yeah, we have a plan. We amortize as of April, and we definitely have a plan to deliver a profitable 2026. I think if you add all that together, we should be in a good plan.
All right. That sounds confident. Thank you for that.
Thank you. We go over to Kristian Smolle, Pareto.
Hi, guys. Thank you for taking my question. Two questions from me here. Regarding the report that the retail growth of 8.7%, which you said is boosted by the new store openings, could you maybe give us an indication of what the underlying like-for-like growth is here for the existing stores in the quarter?
The non-comparable stores drove roughly two percentage points of that growth. That's the figure also we have prepared on that question.
Perfect. Thank you. Regarding the solid development in your own brands, could you maybe describe a bit on what categories or products or what drove this solid growth here?
I would say it's a mix of all the brands. We are still the strongest in haircare since the Waterclouds is our biggest brand as we communicated the last quarter, but also seeing good growth in the By Lyko, which is the second biggest, where it's also very broad. It's on all the categories. I would say it's a mix of everything in there.
Okay, perfect. That was all from me. Thank you.
Do we have any more questions from the audience? Please raise your hands. Any other questions from Romanov, Fredrik, or Kristian?
Quite clear. Thank you for good presentation.
Great. If there's nothing more, we would like to wish everyone a happy summer, great vacation. Put on the sunscreen, see you in October again. Thank you so much.
Thank you.
Bye.