Good afternoon and welcome to the Pricer fourth quarter 2025 investor presentation here at Carnegie. My name is Hjalmar Jernström, and I'm joined today by CEO Magnus Larsson and CFO Claes Wenthzel. Welcome, guys.
Thank you very much.
During the presentation, questions can be submitted live, and we will address these during the Q&A session. With that said, I hand over the word to you.
Thank you very much. Hello everyone, really happy to be here. My name is Magnus, I'm the CEO of Pricer, and with me today, as mentioned by Hjalmar, is Claes. So let me jump straight into the presentation. For those of you who haven't been paying too much attention to Pricer before but felt tempted to join the call, this is the very quick Pricer in a brief slide. So our vision is to be the preferred partner for in-store communication and digitalization. This is something that, of course, is spot on for what the physical retailers with physical stores are aiming to do now. We aim to do it the best and be their preferred partner. I will come back to a few customers that actually have selected us as their preferred partner later in the presentation.
In essence, we have sold or delivered close to 400 million of our labels. We have done way more than 28,000 stores, and today we have more than 6,000 stores on our SaaS service Plaza. We have close to 50 million ESLs connected, which of course gives a lot of opportunity to future sales. Looking at Q4, the first thing I would like to highlight is that we've seen a positive trend during the second half versus the first half. When I compare now Q3 and Q4 together, we have a net sales that have actually increased 20% compared to the first half, which has been, of course, very positive. We have seen a good order intake momentum in Q4. It's actually the highest in the year. We have been awarded with 5 new customer contracts in the Q4, in the U.S., in the Netherlands, and in Norway.
But also more importantly, what we can see is that there is a clear and tangible increase in the customer engagement, basically across many markets. But it's from RFQ processes, so basically they come to us to actually buy stuff, to proactively being discussing digitalization and the way forward. Very, very positive development. Looking at our financials, you will see that we have had a major decrease in our inventories. As you might remember, and I know Claes will speak more about it, we had an excess inventory when we came into 2025 that we have now dealt with, and it's been sold. So it's been contributing to our strong positive cash flow. But it's, of course, also affected our it's not of course, but it has affected our gross margin due to the sale of this excess inventory. All in all, we have a year of full-year profitability.
We have a good EBIT. We have an EBIT margin of 2.9% on the adjusted side, and we have a net profit for the full year. So why does our customers buy from Pricer? There are quite a few trends that affect the behavior from shoppers, the behavior of our customers, the retailers. And I will show you five examples now on the two coming slides. And you can see that one key driver has been the drive for strategic digitalization in the physical store. Now, with AI being a very large thing, it's also spilled over to quite a few of the physical retailers. They see all the benefits they can do utilizing AI tools. But in order to do that, they really need to make the store physical or digital.
So it's not only the fact that they want to address the operational cost, which is still a key driver, but it's also what kind of gadgets, sensors, ESLs do I need in my store to actually be able to operate in a different way and be more efficient using also the AI tools. So we can see this is a quite new trend, but we can see that especially, I think, on the US market, this has been a driver for some of the recent customer dialogues that we see. It's from the hyper and supermarkets, but also down to convenience stores where they want to see, how can we be more effective? So what am I talking about? What are the key customer wins? The first one I'd like to speak about is the deal we got with IBM Federal and with DeCA, the Defense Commissary Agency.
So that's actually the U.S. Department of Defense. It's their stores that they have for the armed forces. So in the U.S. and outside Continental U.S., they have in all the army bases, they have the commissary stores, sorry, where they sell grocery to the serving staff and everyone working at the army base. So this is a really big thing in the U.S. We've been vetted as a supplier by the U.S. Department of Defense or Department of War, as they also are referred to. It's hard to pass that threshold. So we're extremely proud of this win. We have a planned deployment of ESLs in 57 other stores outside Continental U.S., and we have a potential of modernizing all their stores in. It's actually 178 ones in the U.S. market.
We did receive the first order in December, and we're continuously planning together with IBM Federal on the rollout of these stores. But also in the U.S. market, having DeCA as a reference and also the fact that we've been vetted by the Department of Defense is a big thing. The second one is also an American customer, Merchants Distributors, or we call them MDI. It's a wholesale grocery store distributor. They actually sell everything from groceries, wholesale, but they also do technology. They help their members to buy whatever they need to their stores. So we have an exclusive agreement with them now. We're the only potential supplier. They have 600 members, but across those members, they have 3,000 different locations or stores in 17 states. They are really active. They want to make this happen. They see a declared benefit for their members.
So it will be Pricer Plaza. It will be four-color ESLs. First orders received now in December. And above all, it's a brand new Pricer customer. And of course, we hope to see them grow together with us during 2026 and into the future. If we look at Europe, we decided to go for a direct sales module on the Nordic and Baltic market. We announced NorgesGruppen. We announced Coop Norge in October and November. If you look at NorgesGruppen, they have roughly 1,800 grocery stores. They're number one on the Norwegian market. We are a current supplier of in-store communication and digitalization, but it's a new direct customer, so we're really happy for this engagement. We had the Coop management team over last week. We spent two days discussing what the future is. What are the roadmaps?
What are the key things we're going to look at into the future? They have both do-it-yourself stores and they have grocery stores, and they have more than 1,000 stores. So also here, a new direct customer. But so here we have an existing customer, PLUS, that we won back in 2000. They've been using their system a lot and felt that it's working so good that they wanted to really upgrade it to have the most recent version of what we do. So they will buy our four-color labels. We'll start with 100 stores this year, and we do another 165 stores in 2027. So we're basically modernizing the entire setup. But also part of this deal is the buyback of the existing labels. There will be a Tech Talk on this and the positive effects when we are at the EuroShop event in a few weeks' time.
But in essence, we're going to take their labels back. We will refurbish them, and we will resell them to give them a second life. So from a sustainability point of view, very good business, but also from our point of view, also very good business. And before handing over to Claes, I would like to speak a little bit about Pricer Avenue and Pricer Avenue at the NRF Show in New York. So now, second week in January, we had the NRF Show in New York. It's a massive retail industry, retail tech event where everyone that's someone on the tech market are participating. So we now did the commercial launch of Pricer Avenue. It's now commercially available. We do expect the first stores to be deployed now during Q2. It's, I call it here, a low-volume deploy. So we have a limited number of labels.
And once again, it will be quite exclusive. So we will agree which stores will be allowed to get it. They will focus on using it for the high-impact zone. So basically, where they have high-volume products or where they have high-churn products, but areas where they see that they really want to do whatever they can on the merchandise and the promotion side. So it will be very exciting. It will be very exciting with also the necessary discussions that we're going to have with the suppliers that want to use this for promotion. We had a number of pilots. They were pilots also for us to get both feedback in terms of how well does it work in the store? Do we need to make any changes to it? But also, of course, to get the customer feedback. And here we got a lot.
So it's been embedded now in the commercial product and future releases of the commercial product. One additional thing that we launched is a new model, brand new model to Pricer Plaza called Designer. It's a tool made to actually design this extended label, but it's now also, it will be available for all our ESLs. In fact, with the Designer tool, you can do pretty much what you want. We will treat any screen as a canvas. So it could be to paper. It could be paper tag. It could be billboards. It could be televisions. It could obviously be Avenue and also ESLs. And we had some people passing by our booth from a company that typically works with paper and paper publishing.
They were delighted to see the tool and said, "This is something that we should have." Since everyone is moving more into the publishing direction, I think it's extremely positive. You can also see on the picture here what Pricer Avenue looks like in real life when it's actually working. This was maybe not talk of the town in New York, but it was definitely the talk of the NRF. We also had a Tech Talk together with the technology officer, Rob Smith, of East of England Co-op, where we spoke about in-store shopper engagement and how we can actually increase that impact with the help of Avenue. I guess enough of bragging and promotion and over to the hardcore figures. Claes. Yes. Sales slightly down in Q4 compared to last year, but at the same level in fixed currency.
Gross margin decreased in Q4 by 1.5 percentage points compared to last year, as it is negatively affected by sales of the excess inventory we had in the beginning of the year. Operating profit was SEK 19.8 million, and that has been impacted by the one-off cost of SEK 4.5 million in Q4, which is related to VAT back to 2022 and 2023 in Canada. If you look at the cash flow, our operating cash flow for 2025 is SEK 180 million, which is more than SEK 100 million better than last year. Cash flow has a large impact from the reduction in the inventory. What is also important and what we are a little proud of is that we do not have any net debt anymore, and we have available cash of more than SEK 450 million at the end of the year. Good.
So let's wrap up then before we move into the Q&A. So once again, I want to highlight the strong order intake in Q4. It is the highest in 2025. We have a book-to-bill that it's actually above one. So we have had more orders than net sales, which, of course, anyone in a company, you want to end up in that situation. On the other side, on the flip side of the coin, we still see this uncertainty on the market. The geopolitical situation, the macroeconomics makes it a bit hard to really predict the future. We can see that there will be a near-term impact on investments with retailers. But we also see all these ongoing dialogues and the increase in dialogues. So the question is, when they will actually place the order, will it be now in 2026 or will it be in 2027?
But the amount of discussions has been very, very positive, and it's actually across the market. And maybe I shouldn't say east. I will say it anyway. We can see an increase on the U.S. market. It doesn't mean that you will see it commercially yet, but it's very positive to see that it's actually picking up. Commercial launch of Pricer Avenue, we do expect installs in Q2. We will be selective. We want them to really make a splash when they are installed. We want it to be clear benefit also to the retailers. So they will say that this was a really good investment and that they're happy to share it. We do believe that the increased customer engagement that we see, that it will create new opportunities in the second half of 2026.
Of course, opportunities will come earlier, but hopefully, there will be some tangible outcome as well. It's a bit too early to say, but we are positive given the changes in dialogues that we've seen. More interest, more incoming interest, more customers actually looking to make larger investments and they running through official procurement processes. But also, having said all this, it's important to remember that we have a large number of long-term customers that is generating repeat businesses across the markets in pretty much all the years. We have a lot of customers just working with the system, doing continuous investments. But the flip side is also the positive flip side is that we can see that they are also looking at many of them are looking at the next generation. They want to go four-color. They want to do avenue.
So we see that as soon as they feel that the uncertainty is shifting, I believe that there will be quite a lot of interest in modernizing existing Pricer setups. So that's pretty much everything, Hjalmar.
All right. Thank you. Yeah. So let's start off with some Q&A. So I got some prepared questions, and then we got some on the line as well. But I think it's very interesting. And let's start with what you mentioned, this clearly increased interest among customers also across markets. Could you describe what phase of the process that you see this increase? Is it that new customers are reaching out for an initial contact, or is it as far as ongoing evaluations? And where do you see this hike in interest that you see? It's a combination.
We can see that especially if I take the US market that I spoke about, there were quite a few dialogues that we had back in 2024 that were sort of paused during 2025. We can see that some of those are coming back. They are gaining certainty. They feel that it's necessary to move ahead. But then there are also brand new customers that are coming, and it's inroad. They get in contact with us and said that we would be interested in dialogue. So that has been very positive. We see also that the formal processes that has also been something we see in Europe. There are more formal processes now where people say, "We are planning for an investment." But we have also seen customers that have made a selection and said that now we're going to go with supplier X, but nothing really happened.
So it's been a very odd year in that sense that we have seen we have been selected in processes, and nothing happened. We've seen competitors being selected, and then yet again, nothing happens, which makes it quite difficult to assess the situation. And I think one of the points I missed is actually it's still very hard to predict the business, and we do expect lumpiness to continue. And I think it's also fair to say that there might be could be similar seasonality this year as we had last year. It's hard to say, but it could be good to mentally prepare for it at least.
Okay. Thank you. Yeah. That's very useful. You mentioned also on the order intake, of course, supported by PLUS, but also the Merchants Distributors and IBM Federal that you spoke of.
Could you like these in specific these two US customers, are these the orders substantial to the Q4 order intake, and what could we expect going forward in terms of the ramp-up with these counterparts that you're expecting in the US?
It was not substantial in Q4. With IBM Federal, we are planning. We do a continuous planning. We have a very good idea of where we will land until somewhere mid-second half. But we are continuously planning. Now we have done quite a few stores planned. Order intake will come as we receive them quarter by quarter. With MDI, we had the first order, and there is quite a lot of discussions ongoing now for different stores. Since they work through their members, they are having other internal exhibitions. They are pushing it.
Their local IT team is actually driving it because they want to make this happen. So there it will once again, it will be something I believe will be growing. Even I would be happy to sell to all the 3,000 stores. I don't think that's very likely, but we do expect to take a chunk of this volume.
Yeah. Yeah. Yeah. And considering then the reach that you can achieve if we speak of the MDI, for example, what is the size or what is the potential in the stores? Are these smaller stores? Are they supermarkets? Are there hypermarkets as well? How is the split?
They have a mix, but there is quite a lot of stores that are pretty much like supermarkets or very large convenience stores, but would almost be on the level that we would consider maybe not supermarkets, but almost in Europe.
So it's a mix.
Yeah. And staying on the U.S. market, do you see any pressure maybe from trade terms relating to, I mean, trade-related issues that prohibits you from or maybe is a headwind to business in the U.S.? But you mentioned the strength there. So I guess you're not seeing that or.
We haven't seen it really. So I mean, the dialogues are starting again. So it might be that they feel a bit relieved, that they feel that, "Okay, maybe the tariffs are now this is the levels where we'll see the tariffs." I think one big thing has been the fear, will they increase further? But I think it's also been the drive to digitize. They really want to digitize their store to make it like a digital asset or the physical store.
I think maybe they're looking at the way they allocate the CapEx investment, probably more now on digitizing the physical store than doing the online presence, which many of them have. At least I hope that we will see shifting budgets.
Yeah. All right. Sounds promising. Let's jump to Europe then. If we speak on France, for example, what signals are you getting here from customers? Are you picking up anything? Maybe if you can give us some update on the renegotiation of the Carrefour agreement, which, of course, is to be renegotiated this year.
Yep. If I start with Carrefour, it's ongoing. Typically, what we've experienced during every process with Carrefour is that it takes some time. Typically, they will spend Q1 and then maybe a little bit into Q2 for the supplier selection.
So there is a lot of meetings, a lot of discussions. So we will see basically into Q2. But of course, I feel that we're having good discussions. On France in general, we see that our customers, they are having challenges with profitability. That also goes for Carrefour. But we also see that especially the business that we have, we have a very solid business with a number of retail chains through their franchise stores. So the franchise owner, we have a hunting license for a number of different chains in France. We have a team that's out every single day and then selling. And here we can see that we have a very solid run rate on these field sales activities. And then what you can get when we win Carrefour, we will get an increase of the orders from their own operated stores.
When we won Brico Dépôt or Metro in France a few years ago, we can also see that you get this immediate impact, but it's limited during the time of the deployment. But the field sales deployment, that we have a very good and solid run rate business.
Okay. Yep. Thank you. And then on the switch then to the direct sales approach in the Nordics and Baltics here, you mentioned that you have not really reached the full impact yet maybe. Could you describe this process more, maybe how much it is currently impacting order intake and how can we expect maybe the ramp-up of this conversion going forward?
I have a positive view on the Nordics. Now we have the team in place. They're fully up to speed. We have all the contracts in place, and we are selling. We have a field team now in Sweden.
It's a fairly small one, but they are immensely effective. So we can see that there is a lot of activity. So from that point of view, I think that the year has been starting well.
Yeah. Okay. Yeah. Let's jump to some questions then on the line. First one is, like you mentioned, the possibility then to reuse the four-color ESLs or the legacy products. How would you describe the market for this product? Is it possible to find a buyer for these products, and is there commercial sense in maybe reusing these and distributing them to other customers? And what is your sort of current view of that market?
So we have done it or we are doing it continuously. But what we can see is that many customers, they want to go for a new ESL. They want the latest.
But then also, there are customers where they might actually have installed since before, and some of them, they are struggling with profitability. But they feel they would want to upgrade from an old generation, from black and white, to something more. And thereby doing the refurbishment, basically, we take the ESL, we clean it, we upgrade the software, and we feed new batteries, and then we sell it. Well, it will be a good deal for them because they get the good label at the good price, and we get good profitability out of it. So it's better profitability than, of course, on the revenue side, which is limited. But the idea of actually being able to take it for another cycle feels very good from a sustainability point of view, but it's also good from a business point of view.
I interpret then that it's mainly then replacement orders. So there are not. I would say then there are markets where customers are interested in buying refurbished labels where typically, you can imagine that the purchasing power is much less, but they might not really be in our spotlight either from where I want our salespeople to go. But clearly, there are business opportunities for this also outside our existing customers.
Yeah. Yeah. Then we have a question on the line regarding technology and maybe technological lead, the technological position. I mean, it happens so much with all the R&D spending in this market. So how would you perceive your current technological position then compared to peers?
I mean, sorry, if we evaluate items like signal reliability, energy consumption, and so forth.
Our technology that we use, we are still by far the most efficient from an energy point of view in terms of responsiveness. We're by far the best. Energy consumption, the same. But on the other hand, we also see that standardization and radio is, and there is an ESL standard based on radio. And I do appreciate standards. I think it's something that will drive the mass market forward, and that's, of course, interesting. So I've said before, and I will say it again, we believe in it's more important to speak about how the system is actually used or what protocol it is. So of course, we are looking at where should we be? What are the investments we'll need to make? So I wouldn't exclude that there will be a radio solution. I've been talking about it before, and it's an interesting area.
But we also see the benefit that we bring to the market. So I think that maybe the future would be a combination, at least for us, where we bring the best of both worlds. Second aspect is, of course, what we do with Avenue, which is really perceived as innovative from customers, from our ecosystem players, also from competitors, where we know they are looking very actively at what we do from a form factor point of view, the way we actually have done the setup of Avenue, the way we can actually enable it for additional IoT devices and functionalities. We had an innovation zone at the NRF. So we had the normal plastic rails, but it's been disturbing me a bit for Avenue that we still have paper inlays. But now we actually had e-paper inlays.
So we just demonstrated a very basic version where we're constantly changing the color. And this, we had, I think, every single competitor came there. We had the E Ink people coming there saying, "This is what we should do." So I believe that there is still much more to do, and we are really in the front now when it comes to innovation and taking ESL from this plastic display to shelf communication. And there is no one close to what we do right now.
Yeah. Thank you. Thank you. And then we got a question maybe on the topic of Avenue. Do you expect Avenue sales to be margin accretive? I guess if that is if we compare maybe to four-color label systems or, yeah, similar systems that you offer, is a typical installation then for the Avenue expected to be margin accretive going forward?
Our expectation is that if we do it right, that we will give them one more tool. With an ESL, we deal with operational efficiency. You will do that with Avenue as well. But with Avenue, we also give the possibility to increase the size of the shopper basket through promotion, but also the ability to sell this space to CPGs or people that do basically suppliers of food and grocery stuff or wine, that kind of supplies. And so yes, we will ask for a higher price. We will expect to get the clear premium from selling this because we also expect to deliver much higher value to our customers. So it should really be a win-win-win.
All right. Yep. Thank you. And then on the maybe general development of the recurring revenue, are you satisfied with the current growth rate?
Maybe could you remind us again of the setup of the recurring revenue with plus sign and so forth?
Being satisfied is a very strong word. I'm happy for the development. Would I like more? Absolutely. It is going really well. This year, we have converted a lot of stores from our on-prem service to Pricer Plaza for customers that, for whatever reason, want or have to stay on-prem. Well, then we have changed that to subscription service. If they want the latest version, it's only through subscriptions, also if it's in a PC. I think the development has been good. This year, we're planning to migrate more stores. And of course, almost every single store that we win are a Plaza customer. We are now adding modules to be able to also increase the price of Plaza when we sell it.
The next step will, of course, be to see, "Okay, how can we find more adjacent software functionality that we can actually sell as standalone?" But right now, we're working a lot with connecting new stores or existing stores to Plaza, new stores to Plaza, and then see how can we actually increase the price of what we do.
Yeah. Yeah. And then if we jump to Canada and the Sobeys rollout of deliveries, we have a question here. Whether you expect the same level of sales in 2026 compared to 2025. I guess that also includes then the initial larger order rollout. But also you mentioned, of course, the strength in the Canadian market, so maybe potential follow-up orders. Can you give some color on this?
Since we don't give forecasts, I cannot answer it specifically. But we have a positive outlook.
We have a good dialogue and relationship with Sobeys. They've been very happy with the deployment. There is a lot of interest. We do expect to continue our deliveries to Sobeys. But I cannot go into any details on exactly how much that would be in money.
Yeah. All right. No, that's fine. Then we have a question then on the gross margin impact from the inventory reduction. Is this mainly then from maybe sort of a proactive pricing towards customers, or is this mainly relating then maybe to FX impacts on the inventory? Could you give maybe some granularity on this? You mean the difference in margin Q4 compared to Q3?
Yeah. The impact now from the excess inventory.
The gross margin impact from the excess inventory and whether this is a result maybe of then reducing prices to customers in order to reduce inventory or are there other items?
It's two things. One is that when this was bought up, it was too much higher US dollar rate. So that is one negative impact, of course, when you sell it out. The other one is that to get rid of it all now before the year end, it was also done to a lower price.
Yeah. Okay. Yep. Thank you. And we have a question also from the line on the current levels of inventory.
Do you feel that you—I mean, considering your best guess on the outlook going forward—do you feel that you have excess inventory right now, or are you on a more sort of level that you are satisfied with your best guess than on the outlook?
Now at the end of the year, we do not have an excess inventory. But of course, we can always have a more optimal level of inventory. But this, of course, also must be related to the orders we have and that we will deliver the coming quarters. And I think actually what we have done this year is also that we have ended one of our large product lines. We sold off all the ESLs from that product line, which means that we are producing fewer varieties now.
So we have a standard family, only one standard family, which means that we will not build more stock the same way as or have to build the stock the same way as we did before. So by nature, we should not tie as much capital in inventories as we were forced to do before.
Yeah. Okay. Then we have quite a lot of questions actually on the U.K. Do you still hold the view that U.K. is sort of like a hot market right now? I mean, we see some activities in the market. If we look at it in a wider perspective, there is some CapEx investment going on. But you also previously mentioned, of course, a lot of evaluations being carried out. What would you say is the current state of the U.K. market?
I have had some mixed feelings, actually, because there is a lot of activity. It is a hot market. But we also see customer wins, where there is a winner announced and they are selected, but nothing really happens. So we have the procurement processes. We have a lot of inbound interest. But still, we don't see all of that materialize, which is a bit odd, really. But there is a lot of interest, clearly. But we haven't seen even people being selected, but not that there are any real deployments as a result.
All right. All right. Thank you. Thank you. I think then we have addressed all the questions on the line and also my questions. So thank you so much. And I'll leave it to you for any concluding remarks.
Thank you very much, Hjalmar. Thank you very much for joining our quarterly presentation.
I hope you found it interesting. I look forward to coming back with a Q1 presentation back in April, I guess. So until then, thank you very much.