Welcome, everyone, to Synsam Group's Q&A session as released the interim report for the first quarter 2026 this morning. My name is Frida Leim, and I'm head of investor relations at Synsam Group and the moderator of this Q&A today. I'm joined by our CFO, Per Hedblom, and our CCO, Jimmy Engström. Those of you watching this live, you're welcome to ask your question in the chat, and we will try to answer as many questions as possible. We have also our analyst from Citi joining us. I would like to welcome and hand over to Yang from Citi. Hi, Yang, and welcome with your questions.
Hi, Frida, and hi, everyone. Thanks for having me back on again. As you know, I always start with a current trading environment question. I feel it's even more relevant this time with an effect of the Middle East conflict. The question is: would you say you saw negative impact on customer behaviors in Q1? How has it been trending in April and maybe the first weeks of May in terms of the sentiment?
Well, we, I mean, there's been a cautious consumer environment quite a long time now. In the start of Q1, it was quite cautious actually. Some improvement at the end of the quarter, we would say. If you look at the development during the quarter. To what extent the sentiment then in March, I would say, has been affected by Middle East, we can't really tell. Of course there is a cautiousness among consumers. Trading, I mean, we can't comment on trading but March was, as we said, somewhat better than January, February.
Okay, that's helpful. I know this is not a trading color, but in general, what is your assessment at this stage for the full year in terms of where do you think the cautiousness among consumers are heading?
Well, no, really, I mean, at the start of the year, we had some hopes that consumer sentiment would improve. I would say right now we can't comment really. It's difficult to say anything about consumer sentiment during the year.
Okay. Thank you. I appreciate there is a lot of volatility still out there. I want to spend a little bit on Denmark specifically.
Mm-hmm. Sure.
Very good performance. Can you maybe elaborate on the changes to the lifestyle program that you mentioned in the release? Specifically, when did that start in the quarter? Do you expect to see similar magnitude benefit to sales growth for the rest of the year?
Yeah. Okay. This is a technical aspect. It's, I mean, we didn't change the, it didn't change the offering towards consumers, but how we handle in our books the prolongings from 1st of January. That has a positive technical impact on growth and a technical impact negative on gross margin. That is the same. We will see an effect also in Q2, Q3 and so forth, technically from this. The most important thing about Denmark, I would say we do have a positive growth regardless of this technical aspect in Q1. Our program of improving Denmark is continuing.
Thank you. Understood. The way that I understand it is that in Denmark you've got probably around a point of underlying growth, and then on top of that you have 370 basis points of the benefit from the technical changes to the buybacks. The question is going forward for the coming three quarters, assuming similar magnitude from the technical changes, what do you expect the underlying demand in Denmark to look like? Do you expect the trajectory to continue being positive from here?
We don't expect anything really. Our efforts focus on growth and profitability in Denmark.
Okay. Got it. I want to move on to the cost side of things. This is again back to the whole Middle East conflict topics. I saw in the release that it was mentioned that Synsam is seeing higher costs given rising inflation. Can you maybe provide a little bit more details around what type of cost are you seeing impacted? How much increase are you seeing? How much was the impact in Q1? If you could quantify that, please.
I mean, well, we have mentioned, I mean, that we do have some effects of store openings. We have a ramp up period of two years for store openings. That has an impact, for example, on Finland and Norway. Somewhat in Sweden as well, of course. Of course there is a sort of an inflation aspect, but not on a large magnitude, I would say. I mean, we do have cost programs in place to ensure that it keeps cost in check. This quarter, the costs were somewhat higher. You want to add, Jimmy, to that extent?
No. I mean, we have had some years now with of course, a less than ideal macroeconomic environment. The inflation was high, and then it came down. Now there are sort of a new situation. When in regards to Q1, sort of the recent events in the Middle East, I would say is no direct impact really.
Okay. Thank you. Maybe still on that topic, is there anything you can comment on whether at this point you're seeing pressures from your suppliers and also within your own manufacturing and your store network, how are you seeing the cost of energy or electricity? Are you guys hedged for the years? How did that work?
I mean, of course there are increased transportation costs and so forth, but we don't hedge against such costs. You want to add, Jimmy?
No, exactly. I mean, flight transports, I would say that that is the one that, you know, have seen a sort of an instant effect. Typically we transport by shipping, and we only fly things in when absolutely necessary. Otherwise I think it's, you know, it's early days as we all know in this. How it will develop, we will, we'll of course follow. When in regards to Q1, that was sort of the only impact we could see from this specific Middle East conflict.
Thank you. I want to touch upon the sales mix and general discounting campaigns. I noticed that Sweden deliver very good profitability, and you called out the sales mix specifically in the release, but there wasn't any mention of mix in other regions. Anything you could comment on that? Are you seeing the same, less or more discounting or campaigns in different regions?
Well, I think we do mention mix in Norway, I think. We had a small increase in gross margin compared to last year. There we have some mix effect. In Finland, we do mention that we have continued reduced discounts. That we mentioned actually in the report.
And how do you-
Can you repeat the question please?
Yeah. How do you in general see that trending through the year, and especially on the discounting front because, you know, of consumer sentiments concerns?
We, I mean, we try not to do forecasts, but we can describe in general how we work. I mean, this industry is to large extent affected by discounts and always been. I mean, when we look at the impact of the consumer sentiment, we historically have seen an impact on trading down lower ASP rather than necessarily gross margin.
Okay. That is clear. Putting all of that together, you know, we have concerns around consumer sentiment, yet there's still some underlying growth in the business. We have questions around inflation's impact. Do you see the likelihood of margin progressions for the better through the remainder of the year, considering all the different headwind and tailwind we have? Do you think that there's a greater likelihood of, you know, protecting the margins at its current level through the rest of the year?
How should I put it? I mean, we can all talk about ambition. Our ambition is to have an EBIT margin of 12%-15% in the medium term. We are at 12% now, of course ambition is to increase that. Clear ambition, I would say. That being said, the consumer sentiment and macro environment is of course changing day by day. We take all action we can to improve growth and profitability.
Okay. Thank you. For the corporate cost or other and central functions costs, in this quarter, you reported a SEK +7 million figure.
Can you help us understand what that on the EBITDA levels, you know, what are the drivers behind this SEK +7? For the rest of the year, how should we think about modeling this line?
I must say the post effects, I mean, we, some components of this, is, of course the cost program we've been performing. We continuously work to become more efficient and that is paying off. That's one part. Also, our factory in Östersund, Frösön, is gradually improving its profitability, which also helps us. Lot of different component, these are the two, one, two important ones.
If that's the case, do you expect to see a little more positive values through the rest of the year, just given that you're talking about benefits of improvements in manufacturing?
We have said we're gonna double capacity, double the output rather, in 2026 compared to 2025. 200,000 frames, I believe we said and, that gives the opportunity to increase profitability in the factory specifically. Also with our cost programs, we have an ambition to manage cost centrally, so that could help us. Yes.
Okay. I guess around this topic of, you know, cost programs and inflation headwinds and whatnot, hypothetically, if you were to see higher than expected pressures from the current backdrop, would you consider the pace of your new store rollout in order to help alleviate some of the pressures to help with profitability? Would that be one of the considerations?
We have a plan regarding store rollout, and that is not affected really by short-term effects. We will act upon the opportunities we see in the market for opening up new stores. We have said 90 for the period 2024 to 2026 meaning somewhat fewer
in 2026, which you can see now the first half, well, if you take the Q1 and Q2 together. That being said, we will act on opportunities. If we see more opportunities opening up, there may be more establishments, but not as a response to the macro environment or consumer sentiment really.
All right.
I do want to highlight 1 thing in this quarter. We look at growth and everything and the Lifestyle subscription, I mean, we need to highlight that. I mean, we have a customer growth in customer base of 7.2%. 7.5% is the goal medium term, but we are almost at that goal in a quarter with cautious consumers, and we do want to highlight that aspect that the subscription is performing well in this quarter, and that need to be said, I will say.
I think, I mean, adding to that, we should also remember, I mean, what our business really is to sort of treat one of the most common health problems, vision correction need. That of course means that, you know, consumers, they do take care of their vision, regardless. Then, when there are, you know, more cautious environment, of course, it might impact, you know, that you trade down a little bit. Still you need to take care of your eyes and that, I think is always important to keep in mind.
Yeah, that makes sense. I think that's the beauty of being within the healthcare space, and I suppose the Lifestyle subscriptions comes into play specifically.
when there is consumer cautiousness around. I suppose that really it to my list of questions and on that very positive note. Thank you everyone.
Could I add one detail though? Of course, there's been a lot of thought about around our cash flow and amortization or leasing debt, which that amortization increased now in Q1 and that is I mean, we have some increases in the number of stores, et cetera. I would say the large increase from Q1 last year is to a large extent a temporary effect, if I'm gonna look forward. I need to highlight that. That was not a question, but I think a important piece of information. Mm-hmm.
Great. Thank you, Yang Yang. It's time to wrap up, but before we do so, Per and Jimmy, anything additionally you would like to add?
But I think we can summarize that we do deliver increased profitability in the quarter, both in absolute terms, and also in all margin measures. A strong development of net income growing by more than 50%, the organic growth and like for like was delivering regardless of the sort of cautious consumer market and also that we delighted to see that we have a positive organic and like for like growth in all markets in the quarter.
Great. Thank you so much, Per and Jimmy. Thank you to all of you watching this live. If you have a question you have not received an answer of today, please email the question to email address below. We'll make sure you get an answer. I think say thank you and see you next time.