Hello, everybody. Welcome to the presentation of the fourth quarter result 2022 from Pricer. It's me, Magnus, and Susanna that sitting here next to me in the same room, who will do the presentation today. Next slide, please. I would like to start our quarterly report by speaking about our vision. Since we last made a presentation of the Q3 report, we have spent quite a lot of time on continuing the development of our strategy. As part of that strategy, having a very clear and appealing vision has been, of course, an important part. It's a tool for us internally to direct everyone on what we want to do, but it's also a very good tool for us to create clarity when we actually engage with our customers on what exactly they can expect from Pricer.
Our vision is to be retail's first choice in shelf-edge automation and communication. What does that actually mean? Retail's first choice, I want to make sure that Pricer is the first choice in every single interaction with our customers. From the first time they meet us, it could be in person or through the webpage, at an event, at the sales call. I want them to feel that the Pricer staff are on their toes, and that they get a really good re-response and a good feeling from that meeting and that interaction. Same goes when we do our first offer, when we do the first technical discussions, when they've placed an order and the response they get from the team that will help with the order administration, the delivery.
They have a problem, and they contact our support. I want every single interaction should generate the impression that, well, this was really good, and I would recommend Pricer to anyone, and I want to use them again. Does first choice mean that we should be number one? Of course, it would be nice to be number one in all markets. It's not necessarily. We want to make sure that we are the first choice for the potential customer or new customer, that they feel if it was up to them, they would always go with us. For different reasons, we might actually say that we do not feel it would be worthwhile to be number one in the market while we're already a strong number two because the investment as such might actually be higher than the potential gain from that investment.
We wanna be the first choice for the retailer, but that's not the same as being number one in every single market where we actually engage. We might be happy with position number two. In certain markets, we absolutely wanna be the first choice and number one. Shelf-edge automation or shelf edge, that's something I discussed quite a lot with the management team. What does that mean? If you're a retailer, shelf edge means anything in the physical store, any kind of screen, any gadget or item that you have in the store that's not the actual shelf or the product they sell, it's shelf edge. When we speak about shelf-edge automation and communication, it's actually using our ESLs and using the different kind of screens to communicate regardless of where in the store they are.
It could be on a television screen, it could be in LED screen, LCD screen. Of course, our ESLs, but it could also be the smartwatch on the wrist on an employee if they do that kind of communication. Automation, it's about all the stuff that we do to make life easier in the store. Communication is, of course, the communication with shoppers, with staff, and with the suppliers. Retail's first choice in shelf-edge automation and communication is something that you will see and hear more about. We have tested it with one of the top 10 retailers in the world, without going to details on whom it was, they were actually delighted.
They said, "We're happy to see that unlike many of the other vendors on the market, that you are actually very, very clear in how you engage and what you provide in the retail tech space." I hope that this will be appreciated, and it will also give us the possibility to measure the performance of what we do in every interaction towards the actual result. This is our vision. You will see more of it. We also developed a new set of corporate values, and I think I'll save those for Q1 to make sure that there will be something that will build some suspense in the communication. But I'm really happy to present this. Next slide, please. What happens in Q4?
Of course, I'm extremely proud to say that we had the best revenue ever in the history of Pricer. Susanna will go through the figures in more detail. We have the second-best order intake. This has been, of course, an immense work from the sales team, but also from the delivery team, from making sure that the ESLs have been produced, to make sure that they actually reach our customers, that they are deployed, and that they're invoiced. It's been a fantastic work. Of course, also looking at the R&D efforts behind getting all those products in place. It's really a collective work. It's a teamwork. For this specific quarter, I think it's been a magnificent work by our regional teams that really made sure that they got the orders and actually managed to deliver them.
It's been a fantastic achievement. We could see that in Q4, we had very strong order intake. It was across most markets or the existing one. I would like to highlight the fantastic performance in Italy, where there was an very high growth. We have been working closer to a number of customers. We can see we've been rewarded by contracts. I've got a question on Pricer Plaza. I will answer that later. We can see that here in Italy, there's a strong focus on actually getting Pricer Plaza across all our customers, and we get a very positive feedback and momentum on that side. When it comes to the revenue growth, I sort of expected France to do well, but France has done very well.
We can see a very strong growth driven by especially independent store owners that are part of a retail chain. It could be like Carrefour or someone else. I'm not sure allowed to say exactly how much better, but it's been much better on the individual store owner. You could say that there is a store owner, they know they have the possibility to buy, they have money, and they make up their mind, and they do it immediately. It's more than doubled. It's actually more than tripled. That's all I dare to say. It's been very good uptake on that side. We show similar pattern in many countries where we actually have someone part of a cooperative or being a franchisee.
On Canada, as you probably know if you've been following us for a while, we have a big customer called Canadian Tire. Also with the help of our partner, that's serving the French-speaking part of the, of Canada, we have seen that we managed now to expand, very much thanks to them, and we've done some of our own as well, of course. We've been extremely successful in spreading these sales across segments. It's not only grocery, but we've done grocery, we've done do-it-yourself, we've done pharmacy, we do general retail, we also do home electronics.
It's extremely nice to see that we have actually managed to accomplish this because even though we've done really good and Canada is by far our biggest market right now, we still see there's a lot of opportunities for growth. We see that what we do in Canada is something that is also strengthening my view that we will be able to do the very same thing on the U.S. market. Finally, as the fifth point, the profitability of the fourth quarter, together with the profitability of the third quarter, has now ensured that we are being profitable on the full year at the bottom line.
It might be too early to say it's been a turnaround, but let's say it's been a small turnaround where we actually went from loss in Q1 and Q2 to small profitability in Q3 and a much better profitability now in Q4. Of course, I do expect that we will see continuous growth and that we will continue to work also with the profitability during 2023. Next slide, please. Now that I'm done by bragging for the fourth quarter, let's look at what the market is actually offering. We started the year now with the National Retail Federation, their exhibition in New York.
Now in January, it's a 3-day event where you have pretty much all retailers from the American market, but also quite a few European retailers coming to visit, and actually some Asian as well. It was by far the best exhibition I've been to. If I look at my entire professional life, starting since I was in my 20s to now, it was a exhibition with a good attendance. It was attendance of customers, the right kind of customers, both stuff that were booked, but also the surprise meetings. Above all, it was filled with retailers that plan to make an investment. We can see that whatever we have predicted on the growth in the American market, in the North American market, and also the Latin American market, it's about to get fulfilled.
We had retailers with a need and wanted to actually discuss tangible business. One of these things they wanted to discuss was four-color. We stood out among the ESL vendors at the exhibition since we were pushing four-color fully. We had a lot of discussion on four-color. We had customers that been buying two-color, three-color segment ESLs that now said, "Let's discuss four-color." We had new customers that said, "We are really engaged and we really wanna discuss four-color with you guys." We also realized that we are the only company right now in the market that is actually pushing it actively. We could see that the way that other positioned themselves were different. We could see they were not actively pushing for four-color, and we know the reason why.
It's affecting battery life, and we are in a different position than anyone else to capture the opportunity to actually do the four-color. I expect that what we do with that, the way we address the market in the U.S., the way we work with four-color will have an effect on our sales over time, that what we have now, what we see in our plans, what we are planning for will materialize.
Another interesting fact that I've seen now or feedback that I've had both on the journeys I've had now in Asia the last couple of months, but also in the U.S., is that the effect of inflation, the frequent price changes, the, but also the store optimization, where the flash is used to help the store staff do their work effectively, is now causing problems for some of the radio solution vendors. We had a large retail, I cannot go into details, just specifying that actually they need now to do a big reinvestment because actually their ESLs are not working as per plans. The batteries are dying. We have had now several retailers coming back to us and said, you know, "Pricer, please, let's have another dialogue.
We do believe that your system is a really good choice for us because we do face unresponsive ESLs. I've spoken about U.S. in the third quarter, so I thought I might make a quick update here as well. We see that the number of requests, the number of pilots, and actually the number of commercial wins is increasing. I know there's a lot of investors out there that are waiting for this big press release to say that now we won these major retailers. What we do now is that we're actually building the capability to get these press releases into the future. We know that it requires hard work. It requires tests and tests and tests. The proof that this will actually generate the money that the retailer is looking for.
We have a lot of these tests ongoing, and we'll get a lot of feedback. Does that mean that there will be a press release tomorrow or... No, not necessarily. Doesn't even necessarily have to mean that it will come this year. It means that what I see now, based on the number of discussions we're having, I'm confident that we will meet the targets that we've set and that we will actually do good business for our customers. We will help them, and we'll make sure that they are successful, too. Finally, we launched now a Pricer digital solution, a signage solution. We launched it in December. We started with what we call a smart rail solution. It will be for a retailer that want to make promotion on specific products.
They will get a number of screens that could be the long screens, LED stripes, to get coupled with big top screen where they can actually communicate. You know, let's do a campaign on this one, and let's get some additional money from the consumer packaged good vendors. It's been very well received. We are in a number of discussions. We can see that we get a lot of requests also saying that, "What can you do? How can we do this?" I do expect during the spring that there will be several pilots with leading retailers on this specific product. It's still a test. We know it's an interesting area. We need to make sure that we've packaged it in the right way and that we actually address the key concern.
By above all, that we actually make them or help them to make more money because that's the output. We're the experts in actually optimizing the efficiency in a store and then get the cost down. I want us to become the experts and actually help our retailers do fantastic business and make more money. Next slide, please. Here I'm using one of the slides that I had in the Capital Markets Day last year, and I'm just trying to illustrate what are we doing differently now in 2023. We will continue to focus on building the sales and delivery organization. There will be for the markets where we see that there will be key growth or we're gearing up to key growth, like the US.
We will make sure that we have every single sales guy that we need, sales engineers, delivery people, administrational people, everything required to really make sure we can address that market so there are no hiccups. We are preparing for growth, and here it will be U.S. There will be a few European markets, but also we're recruiting in the Asian market. Increased agility. We have made a decision. We have started the deployment. We will deploy a second R&D site. It will be based out of Taiwan. We will add a lot of development capability. We expect to be fully operational with this site during the second half of 2023. Why did we select Taiwan?
It's the home market for anything display, anything semiconductor, a lot of the, whatever you have on the electronic side, and also from a manufacturing point of view. We want to make sure that we enter a market, we build capability where we can see that there is a lot of good engineering to be had, where we can also get more insight and more inspiration when it comes to innovation. We will have two strong R&D sites, Sweden and Taiwan, and you can expect that there will be products coming out of Taiwan by the end of the year. Supply leadership. This is pretty much the same as before. We are continuing to work on manufacturing to lower cost, procurement to lower cost, looking at how do we work with the procurement, how can we actually ensure cost down.
Of course, we want to minimize the carbon footprint. I think also when we speak about supply leadership, we are initiating a separate program also to see, can we do something more? Can we do work in a different way to further reduce our cost and the money that we spend to do the different volumes? We have done a lot of good work, but we want to take an alternative approach also here and say, "What can we do? Can we do something in a totally different way?" I cannot guarantee that we'll be successful, but I can guarantee that we'll actually take a serious go at it, and that I do believe that there is something to be had here. To all competitors, you wanna watch out. cloud tech.
We want to make sure that whatever product we develop this year will actually lead to the path of cloud-enabled technology. Plaza will be the fundament that we build our work on. We want every single customer to be connected to Plaza. All the new customers, it's a primary choice for our salespeople to offer them Plaza. For existing customers, that's where we go and address them with a Plaza story. How can we move from on-prem to Plaza? What are the benefits you get? How can you save money? How can you be more effective? How can you build the future? That will come out. We got a question, actually, because we had a target set for Plaza before, that we had a target 3,500 Plaza stores for this year or end of 2022.
We did not reach that. We were above 2,500 but below 3,000. We can see the right kind of progress, and we see a lot of interest from our customers to actually build it. I'm not very fond of doing a Pricer Plaza-specific target as we did before. I'd rather focus on how we increase the recurring revenue because Pricer Plaza will come in many different flavors. I'm very interested in the add-on services that we'll sell on top of Pricer Plaza. That will not be really visible by doing the number of Pricer Plaza stores. If there would be, you know, a demand from investor community that, "Yes, please give us Pricer Plaza numbers," well, we can certainly look into that and do it.
At this point of time, I would rather show the products and the way we actually grow the Plaza side. As you probably know by now, we are retail's first choice in shelf-edge automation and communication. Having said that, I would like to hand over to Susanna to go through some of our fantastic numbers. Susanna, please.
Yes. Next slide, please. Thank you. A couple of words about the financials for 2022, with a focus on the fourth quarter. If we look at the demand side, Magnus has already said and that you've seen in the report, it's been very, very strong numbers, both on the order intake and also on the net sales. For both of those numbers, we saw 43% growth year-on-year, which is very, very strong. What we can see is that both order intake and net sales, the focus areas it's coming from, it's France, it's Canada, often before. For order intake, Magnus mentioned that too, it's been strong in Italy, where we have come closer to our customers and started an even better collaboration.
For net sales, we saw the rollout of our Dutch customer, PLUS Retail, an order that was announced earlier in 2022. If we then talk a little bit about the gross margin, you've seen that it's been pressured throughout 2022. We saw that pressure continue in the fourth quarter. It's primarily 3 reasons behind it. The first one is that the components in the inventory that we sold in the fourth quarter was bought at an earlier point in time when component cost was still higher, which gave a negative effect in the fourth quarter. The component costs that we did buy in Q4 is at a better level, which we expect to show some form of improvement during 2023. That's the first thing.
The second thing that affected the gross margin was again the currency effect, the euro-dollar course. The third one was the customer mix. Depending on what customers we sell to, we have different margins, so that can also affect the gross margin. Despite this, we had a positive operating profit versus the same quarter last year, so it was up. That was, of course, driven by the strong sales numbers. As also previously mentioned, net profit was positive as well for the fourth quarter. A few words about the cash flow, also positive for the fourth quarter due to, well, higher sales. It was also due to the fact that we launched a number of working capital improvement projects during the second half of the year.
Of course as well, the new financing that was closed in the fourth quarter. Next slide, please. Just summarizing the full year of 2022 as well. Many of the comments are quite similar for the full year as for Q4. Order intake and net sales, very strong year. 44% growth in order intake year-on-year. Main markets, on the sales side, it has been Canada, France, and Italy as the top three during the year. Gross margin, similar like previous quarters. It's been a pressured year. It's been especially the component costs, and we're finally seeing that improve for 2023, but it did impact 2022 fully. Also the exchange rate with the euro-dollar course. Operating profit was down year-on-year, looking at the full year.
It's the gross margin pressure that is giving negative impact despite the sales increase. To finish off, the net profit did turn out positive for the full year, which was an effect of the strong Q4 that we now present. With that, I would like to hand back over to Magnus.
Thank you very much. Next slide, please. This will be the summary of the report. After that, we'll have some Q&A. I hope that you could see from the invitation. Actually, if you haven't sent it before, you can actually send your questions to ir@pricer.com. My apologies. I should, of course, have mentioned that before. Concluding, the market is growing fast. What I said at the Capital Markets Day in June last year was that we see that the correlation of market trends and events might generate a perfect storm. I say that we're now on our way straight into this perfect storm.
Maybe that from a, from a language point of view is not suitable, given what we've seen in now in Turkey and Syria, which is, of course, tragic. From a business point of view, I look forward to this perfect storm because here we can see the market trends, we see our ability, and what we see the market, what we can offer, that it actually goes hand in hand. When it looked at the plans that we've done, the 4.5 billion SEK that we'll deliver in 2025, I see that that is very, very clear our target and that we will actually make that. How will we make it? Well, thought leadership. The blend of being tech agnostic and actually doing the retail grade solution is unique to Pricer.
Once again, at the NRF, in my customer interactions that I've had over the last year or so, I can see that this is something that is now truly understood by many and is valued by even more. I do believe that we are on the right track. There will be a lot of interesting announcements when it comes also to products. We will actually look at the way of doing product in a different way compared to what we have done. We will actually package them in a different way as well. We also see that in-store communication, that would really be the convergence of labels, signage, computer vision, will enable the future of shopping, will benefit shoppers and retailers alike.
It will simply make the physical store more attractive and the preferred place to actually do your shopping, because it will give you the, the products that you want, but it will also give you the information and experience that you want as well. You'll get the possibility to be helped by staff, but it will be and I think we see something that will be much of an experience. Shopping will be a real experience, that's something that you will maybe not enjoy is a strong word, but in that direction. We will continue to invest in what we do, not necessarily growing everything, but we will invest and be more specific in what we do.
To be successful, we need to focus more on the innovation, and we have a lot of actions doing just that right now. I think that some of the things that we have now on the drawing table, some of the things that are cooking, and some of the things that will actually come out are clearly innovative. They're clearly addressing the market in a way that competition might not have done before or that we have not done before. Where I feel that based on our customer dialogue, that we are addressing true needs in a different way. We will of course also invest in the organizational capabilities here. I've mentioned before that we will actually strengthen sales organization and delivery organization, but also build now an R&D site in Taiwan. We will look at the go-to-market models.
Do the models that we have right now, do they offer the best setup for a retailer? Do they offer the best setup for ourselves? How can we make sure that we grow while making profit and where we actually help our retail customers make profit? One thing that might be interesting to speak about is that when we look at our capability, we, I've spoken about it before, now it's getting very tangible. We will come with ESLs where much of what we do is software controlled and software configured, where we get the possibility to offer new business models and pricing models where we sell an ESL, and we can actually activate or deactivate specific features. It could actually enable us and the retailer to take an investment and split it on separate budgets.
You can imagine a scenario where actually the ESL as such would be part almost of the infrastructure in the store, like the shelves. The software solutions and the source solutions will be part of the IT budget. Whereas activating four-color for a week at the price, let's say $1,000, if that would be relevant, would be something they put on a campaign budget, on the marketing budget. All of a sudden we'll build something, same components, but we actually enable it in a different way, where we actually get to sell it in a different way, and we get the retailer to use this investment in a different way. And having that capability and knowing that we can actually, unlike anyone else, do it in a different way.
I think that will be a key differentiator between us and some of the other vendors on the market. I am looking at the four and a half billion SEK target that we've set. I am confident that we'll meet it, and I think that the markets that we've done are correct. Over the last year, we've of course followed what competition is doing, how they communicate, and we look at different kind of reports, and there is a lot of reports and actions that now verify our assumptions that the market is growing. In addition to customer data, we can see that market is really growing, but we can also see that the starting point, where are we from an install base point of view, that seemed to be verified looking at, you know, some of the colleagues in this space.
We can also see that the markets we expect to grow, like the US, will really happen. It's happening here and now. That's extremely reassuring. I think that I would like to conclude before we do the Q&A with that I see 2023 in a very positive way. There's a lot of actions we take to maybe a better company. We are now transforming. We're opening a second R&D site. We are looking at how we can actually continue to improve our cost also on the COGS side. We're looking at the way we do supply. We are addressing the market in a way that's obviously appealing to the customers. We are in pilots. We are in initial store installs with customers where we believe that there can be a tangible and large growth over time.
We see that all the market trends are still in our favor. I hope to be able and expect to be able with a Q1, Q2, Q3, Q4 report. That will of course be interesting, and I cannot promise that it will be fantastic, but, you know, I feel pretty happy and satisfied. Having said that, I would like to open for questions. Charlotte, have we had any questions?
Yes, we have a few questions. The first one is, "Is Carrefour installing Pricer system also in Spain where they have bought Supersol?
No, we're not yet installing with Carrefour in Spain. We are in discussions with Carrefour on a global level, and also local levels, and we discuss how and where we will do the deployments. We haven't done any deployments yet, but let's see what the future holds.
Okay. You mentioned customer mix as one of the reasons for the weaker gross margin. How is the customer mix in the order intake last year, and what do you expect for the gross margin this year?
Is this a question for you, Susanna, or is it a question for me?
I can say, well, maybe you can answer on the customer side, but like I mentioned, we have seen, like part of the margin issue has been the high component costs, and we have seen that coming down, and then the margin is.
Of course, composed of different things, and pricing is one of them. We have also been mentioning throughout the year a number of times about how we try to push the increased prices onwards to customers, and we keep working on that. For some customers it's easier to succeed, and for some it's more challenging.
Yeah, I think the customer mix, it's been very much based on market. We see that some markets are more competitors than other. It's very much depending on whom the key competitors are on that market and what their objective is. We can see it also differs sometimes from segment to segment. It could also be that, you know, in some cases we'll go direct, in some cases we'll go through a partner, and that will also affect the mix. It's, it's hard to say that one thing, pharmacy will always generate better margin and then this will do a little worse. It's actually not that black and white. It's very much depending on the specific market and.
Another question. Service sales improved particularly well in Q4. Are you making a push to improve these or how could we think about them in 2020?
We are pushing to do more service sales and we can say that also it's visible. One country where we have done a lot of service sales has been Italy. When we sell in Italy, here we have been very successful in building a complete package that will be Pricer Plaza hardware services, different kind of support services, different kind of deployment and install services. I think the model that we have done there is something that we are also replicating in all the markets where we have our own staff. But of course also pushing Pricer Plaza and pushing add-on functionality to Pricer Plaza is something that you will see more of. But services is something that we will try to push in all markets where we can.
Good. We have a couple of... We actually have three questions on Germany. How is it going in sales? How is your production manufacturing going in Germany?
Cool. I start with the production. We expect to have the 1st units out from the factory, from the production line now in March. That will be the 1st run of product and we'll check it. We will then in April, May, and June gradually increase the output until we have full output in, I think in May or June. But it's clearly coming, so the European customers can expect made in Germany ESLs already during the 2nd quarter. It's really good. When it comes to the sales in Germany, I feel that we've not been able to address the market the way we should. Of course, many bigger customers, they have done the procurement some time ago and we did not win at that time.
Now we can see that the second generation or third generation in some customer cases is starting again. Of course our intention is to make sure that we are a player on the German market. We've been out of the German market for too long, and I know that a lot of you have been. We said that we would grow in the German market. We have not done so far. I'm not happy with what we've achieved collectively. I see that the opportunity is there. I see that there are a lot of big German retailers that we now are in discussion with. There is opportunities to actually do new big wins over time.
We are re-engaging with quite a few of them and, I hope that that will bear fruit, over the coming couple of years. I'm not happy where we are with Germany. I think we should have done things differently. And that's something that it's up to myself and the management team to address.
That was specific about Germany, but you also have a question. Overall, could you talk about the competitive environment and how do you think it will evolve going forward?
The competitive environment has always been quite tough. We've seen vendors or suppliers come and we've seen suppliers go, we have been actually the longest, the vendor that's been around the longest. I still think that the competitive environment will be quite tough. I think we're reaching a point where we can see some kind of, I don't know if I should call it saturation, there will be a tough competition, but I think it will behave in a slightly different manner. I don't think that we will see too many new vendors that will come with rock bottom prices to buy themselves market share. I think that will be harder. I can see that the way that the retailers are buying it is now they are more aware from whom they buy.
I think we can see that it will be ourselves and maybe two, three competitors that will actually win the majority of new business. I still believe that it will be hard competition. We have to earn our right to sell. We have a fantastic system, but we have to be out and we have to sell the store, we have to engage, and we have to make our retail customers or the potential customers enthusiastic about what we do. I think that's the key thing we need to do and the rest will follow.
Could you add some color to the announced partnership with StrongPoint? When do you expect it to be fruitful in the new markets?
I, of course I'm a positive guy, I hope it will be fruitful quite fast. We can say that we are focusing on the UK and Ireland, on Spain in the new partnership, since before we have had Nordic and the Baltic region. We are working in close cooperation on these markets. I think that the dialogues that we have are interesting, these are somehow new markets. U.K. is definitely new market with our own staff. In Spain, we've been around for a while, I think that we are now getting new energy through these partnerships. I can see there is a lot of renewed interest. We are now in customer dialogue thanks to this partnership to where I feel that they will generate sales. Is it now during spring?
Will it be summer or autumn or next year? It's hard to say. It's an old truth within sales that you have to earn the right to sell, and I think we're actually right there as now. We are earning the right to sell, and we are doing it together with these guys. I have no doubt in my mind that it will generate good sales, but it's hard to say exactly when it will happen.
How large is the margin difference between new purchases versus old inventory? What kind of margin increase do you expect to see in Q1?
I wouldn't want to quantify that. I've already commented on the inventory, or the component costs, which will be one factor. I will not comment on the level for Q.
I think also what we wanna look at is the trend that we can see that we will have a margin that will continuously go up, and it will be a combination from the way we procure, the way we produce, but also the way we sell. I think here, the ability to do more Plaza SaaS, subscription-based models together with no packaging will actually create a big difference. It will be over time, and it will be an iterative process.
There are some questions on infrared versus radio. The first one being, why do retailers buy the more expensive infrared?
Well, it's only more expensive. It depends very much on how you actually sell it. What I've asked my sales is that I expect you to take a premium because I think we deserve a premium because what we do is actually we deliver the cheapest solution over time. There is no one that can deliver the same kind of saving or efficiency that we do. Even though a unit might be more expensive, the gain for the vendor or for the retailer is clearly better with ourselves. I was meeting with a store operations manager whom had a large installed base, Pricer's stores and stores from a radio competitor. He said, "Do you know what I'm experiencing?" He said, "With your system, I have no problems.
With your competitor," I would die to tell you whom it is, but I will not. "I have 2 to 3 customer complaints a day because the price is not right on their ESL versus what we have in the point of sales when they are to pay for the product." He said, "Every single day." It's the radio environment that's killing it. It seems like the pricing does not come through. How do you measure that in money? You can, of course, but it's really hard when, as a procurement guy, when you sit then if you feel that everything is the same.
Here, I think the witness from customers like this, the witness from the retailer that we now met in NRF saying that their investment they planned for will now generate an huge ESL obsolescence where they need to do additional investments just to keep their system alive. I would argue that sure, we might be higher, and that's my expectation on the salespeople. I want them to sell at a higher price because I think that's what we can do, and that's a fair thing because we take the entire cost down, so we'll be the cheapest over time.
I guess the answer to the next question is no, but perhaps you could elaborate anyway on radio frequency. They're asking if you're considering moving from infrared to radio frequency.
Yeah.
The answer is no.
Yeah, we will absolutely not move, there are areas where radio is better. If you wanna do outdoor coverage, and if you do it yourself, you might actually have an outdoor section. Well, radio is a good option if you wanna do outdoor. Infrared is not as good outdoors. Here, yes, I would definitely consider doing radio outdoor. We have been discussing having a hybrid ESL, where we can say it will be a quick way to enter a customer. At the point is that we wanna do the full store, then it's very clear it will be infrared. When I look at the development of radio is developing nicely. Now with the emergence of four-color, there is no way that radio will be able to generate the same benefits as infrared.
It will be just like with four-color now, that's the reason why the other competitors is not pushing four-color because they know it's like jumping four years back in time from an energy point of view. They cannot go to a retailer and tell them, "Listen, guys, you will have this system installed for eight years." It's not gonna happen. I see that infra will be the best choice for any retailer that want to do high-density stores, so grocery or do it yourself as examples. Yes, super no.
Super no. Could you disclose some retailers' names that where you have a pilot in the U.S.?
I would love to. I'm not sure that I'm allowed to, but I hope I can come back to. There would be a few names that would make you happy. I hope I'm not saying too much.
A follow-up question on the competitive environment. Do you see more pricing pressure recently from competitors?
No, I think the pricing pressure has been roughly the same all the time. I think we established that we know roughly where the market price is. It's quite low, but it's manageable. I haven't seen that things are getting worse. In some market, I can actually see that it's getting better.
You were pushing a camera on the shelf. How is it going? Are you doing partnerships with brands for shelf facing?
We have been discussing with different brands for shelf facing. We are still in pilot phase. I cannot say that it's been taking off yet as we were hoping. It still remains to see what the size of this business will be and this opportunity. I do remain positive. I think that it's an area where I can see a lot of interest from the retailers. We need to show that we can actually take it from interest to money to a retailer making money out of that investment, and we have not seen that yet.
Also a follow-up in Germany. Is there any chance you would close your office there and focus on other countries? How long time will they have in Germany?
I will not say how long time they will have in Germany. I want to make sure we focus on winning business in Germany. That will be the key thing. Generally speaking, if we have a market where we're not successful, of course, well, then we need to take strategic decisions on where we should actually have our staff. If a market is unsuccessful, we have a plan. We know what the steps are to actually address the market. If we realize that we cannot, you know, the plan does not work, we try to change it. If it still doesn't work, well, then we should probably pull out of the market.
Good. I think that was all questions.
Yes. Instead of then lasting with pulling out of the market, I would just to once again highlight that it's been a fantastic Q4, and looking at 2023, I'm full of hope and believe that we will be able to come back with a lot of interesting news, over the coming couple of months and quarters. Thank you very much for all your interest. It's been lovely having you here. See you in Q1. Bye-bye.