PCRBF (PCRBF) Q3 2026 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Pricer Third Quarter 2026 Investor Presentation. My name is Hjalmar Jernstrom, and today, we are joined by Pricer's CEO, Magnus Larsson, and CFO, Claes Wenthzel. Welcome. [Operator Instructions] With that said, I hand over the word to you, Magnus.

Thank you, Hjalmar. Hello, everyone. I'm really happy to be here. With me, I have Claes, as Hjalmar said. We will speak about the Q3 presentation. We'll also speak a little bit about what's going to happen into the future. So if I start with Pricer in brief, many of you on the call know us quite well. Compared to last quarter, we can still -- we can see that the number of stores connected to Plaza and the associated ESL has been growing. Our vision is to be the preferred partner for in-store communication and digitalization. And there will be a few stories about this one. It's not only our wish to be a preferred partner, but actually, we get the feedback that we are the preferred partner. If I start with the highlights of the quarter, we have a financial performance that's reaching historical levels. We have a continuous gross margin improvement. So it's actually been improving now 3 quarters in a row. Gross profit has also increased 3 quarters in a row. We have an adjusted EBIT margin that almost doubled versus the equivalent last year in Q3 at 12.9%. So it's been -- I have to say, a very strong performance, so we are really happy. Why is this? Claes will speak a little bit about it, but it's on the -- of course, the COGS that we have, the customer mix and the market mix, but also a continuous work to actually improve our cost baseline, both on the COGS side but also on the OpEx side. Recurring revenue reached 7.5% almost -- as a percentage of net sales. It's been driven by a very strong growth in Pricer Plaza, our SaaS service. So it's up 39% compared to last year, and it's actually also up 20% compared to the last quarter, Q2. This is the result of a continuous work to sell new Plaza setups to our new customers, but also migrating existing one from on-prem to Plaza. And of course, this is adding a lot of growth to the profitability as well. If I look at the order intake, we had a large growth of 27% versus last quarter. It's been driven a lot by a strong North America, where we have seen that on the European market, on some specific economies, it's been more dampened. We have seen a lot of price pressure, reflecting the amount of a little bit less opportunities. But it feels like it's also turning. We have had 2 events. One was Groceryshop in the U.S. and the other one was NRF Europe. There's been a lot of interest for Avenue, not only from leading retailers, but also from brands, especially in the U.S. market, we had a lot of prebooked meetings with fast-moving consumer goods companies actually asking us for a meeting, which is the first. And we do believe that it's the A/B testing that we did earlier this year that might be the result for this increased interest. We also saw a lot of trends in the IoT space, but I will speak a little bit more about that later. We have a brand-new customer win, Orange. Orange is a leading telecom operator, not only in France, but in many markets. So we got a contract now to deploy all their 561 stores across the estate in France. It's a full package. So it's the ESLs, it's the implementation services and every single store will be connected to Plaza. And this is actually something -- the first 100 stores will be done already now in Q4. So this is, of course, extremely nice to get such a large order from a number of store point of view in France, which has been one of our key markets for such a long time. And as always, it was a very competitive situation. But as you can see in the quote here from Fabrice, also saying that Pricer emerged as the ideal partner. And I think that was a big chunk of the deal actually, the way we approach the opportunity. Continuing on order intake. So very strong order intake, especially on the North American market, accelerated delivery of Sobeys. And as you might recall or might know, we take the order intake for Sobeys in per quarter when it happens. Good growth on the U.S. announced contracts in the U.S., the DeCA contract and some others. And also, we have had a lot of positive customer engagements on the U.S. market, both with existing customers looking at how to modernize the networks or the store networks, but also with new potential opportunities. In Q2, we reported good traction in the Scandinavian market and Pacific market. That is actually continuing into Q3. So good growth in Norway, Sweden, but also Australia and New Zealand. So it's been really nice to see. And the Pacifics were a little bit low last year. So it's nice to see that it's really coming back strongly this year. On the European market, we saw lower order volumes in France, driven by Carrefour, and this is something we alluded to and actually communicated in our previous report. Still, we do get orders from Carrefour. So we do have an ongoing consistent relationship with them, and will continue to be a key supplier into the future as well. Then we've seen generally a weak demand or weaker demand in Eastern Europe, even though we can see really positive signs in Hungary specifically. So what are the trends that we see? What are the key insights that I can share? Well, you might have seen this slide before if you followed our presentations. Today, I'm going to focus on sustainability as a competitive advantage and tech transformation. So I want to talk about one of our customers in the U.K. called Company Shop. So what they are is they are a surplus supermarket, which means that they get surplus groceries from the Tier 1 retailers in the U.K. Their target group is very specific. It's people that have a salary level or disposable income that's below a certain level. Those are the only ones that is actually allowed to shop. So why do they need our ESLs? So they get the surplus, they get it in the morning. They start with a specific price. And then continuously over the day, they lower the price until they've actually sold everything. So you're helping people with less disposable income, but it's, of course, also fantastic for the sustainability perspective. So as you can see here, there has been last year, 11.5 million meals saved in food and drinks. And of course, you've had the productivity improvement for the staff or the staff or for the company. So it's actually addressing 2 areas at the same time. And this has been -- in the U.K., this is something they now start to notice and there's been a lot of write-ups in the magazine on this one. We've been shortlisted also now for the Best Innovation within Sustainable Retail innovation. So let's see in November. I have a positive feeling, knock on wood. Moving into technology. IoT, we can see a real growth in demand from IoT solutions within store and in-store IoT. It's mimicking what you get online, but a little bit more than that. So looking at what kind of data can you collect in the store and how can you actually use that data to improve the store experience? How can you use that data to actually increase also the profit? So we get a lot of requests. There's a lot of discussions. It's very much driven by AI as well. We could see that I spoke about it earlier on the convenience stores that they were not really interested in ESLs at large scale before. But now driven by AI, they start to now look how can we now deploy all these IoT devices. But to really make this attractive, we also see clear trends that it has to be standardized. You don't want to have 1 set of applications and communication for thermometers, another for cameras, a third one for ESLs. So we can see it will be more and more standardized. So we believe that this is a market that we have to be in, and we see there's a lot of opportunities in this market. So our approach will be that we will combine our existing ESL portfolio with all the benefits we bring to the market and above all our customers. But we will next year gradually add complementary connectivity to new protocols to actually connect supporting standard ways of communicating, but we'll also look at adding a whole lot of different IoT devices. So from a value point of view, well, we will develop our own IoT devices that we will actually sell, but we will also partner with companies that can offer IoT devices that we do not want to have on our own. And it might not be that we're going to resell them. It might be actually that we just enable them to connect, and we take it as a software service from our point of view. We see a lot of new in-store use cases for retailers that this will actually lead to. So in essence, more connected devices, there will be more Plaza revenue and there will be more add-on revenue. So we do believe that this will be a big thing, and we clearly see all the trends, we see the interest and we see the need to come with something. And we are preparing, as you can imagine, for this. Plaza is set up now or we're doing that development, and we're looking at the device side. And there will be more information later, but I wanted to also now communicate that this is something that we are adding. It's something that you will see in our portfolio and that will be launched. Claes, back to the real data.

Yes. Yes, as you can see, very strong gross margin improvement, and this is mainly driven by the customer mix, as Magnus said, but also much more effective supply chain now. And even the Plaza development and also freight, freight had an impact. We have taken much more by boat this year compared to last year where we were flying more, and that has an impact. If you look on the sales, the sales is down compared to last year, even if it's the best quarter of net sales this year. And the main reason why it's down is actually that we have no large new customers with low margin in this quarter. What's also important to note there is that we have decided to close our German factory. This has affected our depreciation this quarter by SEK 7.7 million, and it will affect the coming 5 months with SEK 7.7 million as well. And after that, the depreciation will, of course, significantly go down as the factory in Germany is closed. And the reason we do this is, of course, the margins that we get from our supplier in Asia are better. And then very strong EBIT, as you can see, SEK 65 million this quarter and a net profit of close to SEK 44 million. And then if we look at the cash flow here, as you can see, it's very similar to last year. And -- the reason why the cash flow is pretty weak now in Q3 is that our inventory is peaking now in Q2 and Q3. And as you can see last year, we had a very strong cash flow in the fourth quarter. And you could expect something similar will happen even this year. So cash flow as a whole looks very good. And then if you look at the net sales, as I said, sales development is the best this year, even this is a disappointment that is going down. But if you look at the gross profit, it is the best quarter for more than 3 years, actually, regardless that the sales has gone down.

All right. So before the Q&A, let me summarize. So in this quarter, we had really strong financial performance on historically high levels, high gross margin, high adjusted EBIT, high adjusted EBIT margin. The strong growth of the recurring revenue and the number of connected Plaza stores, 40% almost versus last year, 20% versus last quarter. We have added another 500 additional stores. And we believe that we will continue at least this pace for the coming couple of years. So we actually do believe that we will add quite a few stores. We also see that the uncertainty of the macroeconomic situation that I talked about before, we still see that it's continued to impact customers. But also, it appears that the market sentiment is changing. We have now actually had 3 quarters in a row where compared to the previous year's quarter, we have had an increase of the order intake. So order intake this year is much stronger than last year, sort of indicating that we see this shift. So there is price pressure on 1 hand. On the other hand, we also see that, yes, people are starting to invest. So -- and especially in North America, we have been able to take much more than before. So that's pretty much what I was -- we were planning to present now. So I guess, over to you, Hjalmar.

Perfect. Thank you so much. And I think let's start at the gross margin because I think it's the clear standout here. Of course, a very good margin now in the quarter, and you mentioned there are some sourcing components to this and whether it's shipped via boat or flight, but then also there's the market mix and the sort of margins that you can report in different margins. Can you -- Magnus, can you elaborate a bit how this split weighs towards this margin that we saw now and the sustainability maybe of assuming that you can ship via boat heading to the future. What factors determine sort of the sourcing costs that goes into the gross profits?

Yes. I think on the sourcing cost, with the supply setup we have now and under the new supply management, we are working a lot with getting the cost down, and we have had really good traction in that. As Claes mentioned, we have changed from doing a lot of transportation by air to by boat, which is, of course, affecting the cost positively. But it's also been on the market mix. We can see that in customer mix, we are able to charge higher prices on the North American market than, for example, in Europe. We see the contribution also of additional recurring revenues. So every single store we add will be good profitability increase for us, which is why we're actually pushing also much for the connected stores, in addition to actually making the installed base really an asset for future upsells. So on the level, what we're sustainable level, Claes, any comments?

No, I think with the customer mix we have now, this -- you could say this is the base. But that can change. If you take new large order on other price levels, then of course, that will have an impact.

Yes. Was there any currency impact? Have we seen this now in the quarter? And what can we expect going ahead? I mean, I guess, of course, it depends on the end market that you sell the...

The currency effect has been very limited. It's 1%, 2% maybe on the top line. It's not more.

Okay. Another driver like you mentioned is, of course, the Pricer Plaza, which is -- we saw an impressive development now, both sequentially and year-over-year. Can you elaborate a bit on the drivers here? Is it new rollouts? Or are you upselling existing customers for this service? Can you maybe mention something on the drivers here?

It's actually both. So in essence, every new store, if you take the 561 that we just won with Orange, all on Plaza, all the Sobeys stores all on Plaza. So pretty much all new customers go for Plaza day 1. But we are in discussions with almost all of our large established chains on moving -- migrating from on-prem to Plaza. So that happens as well. I think generally, there is an understanding that this is the future. We don't really -- a few years ago, could discuss about why you want to move into SaaS. Now I think all retailers basically see the benefit. But then making it an established one, you need to do it in a controlled way to make sure they have a generic way of managing the network of stores.

Yes, yes. So it sounds like existing customers are very positive, I mean, towards shifting have they already not done that. But can you give some kind of indication of what potential you see in terms of recurring revenue from the Plaza base? I mean, I guess not the entire customer base is addressable to some extent, but do you have some rough numbers?

No, I think that the growth that we have seen now in the quarter with adding some 500 stores, is probably a sustainable growth pattern in terms of number of stores for the coming couple of years, most likely. So -- and of course, then it depends a little bit on what services they buy and then what is the size of the store, what the revenue would be, but I'm happy to add any store regardless of size.

Yes. You also -- you mentioned looking at the revenue side, Europe, outside of the Nordics, it is a bit soft. Is this sort of in line with what you anticipated from Carrefour, what you announced at the start of the year? Or has there been a development in some direction? Or is this sort of what you were expecting when we look at France and Carrefour?

Yes. I think Q3 is in line with our expectation. First half was better than expected. And we have a large number of stores with Carrefour. We are an important supplier and will continue to be an important supplier for a long time. So we do expect to do more work with them.

Yes. Yes. We have a question on the line here regarding Europe. So while we're on that, I figured we could address that. The question is, as more of the European business becomes upgrades and replacements in the install base rather than new rollouts, how does the margin of that type of sale compare? And how large is the replacement opportunity in the next couple of years?

So there is -- we can see that goes in phases. We know when we deployed someone that roughly when is it time to upgrade. Very often, there will be some kind of procurement round. And of course, from a retailer point of view, they also always want to see can we get a better price. So of course, we want to keep the price level and they want to get it down, but we also have been working with costs. So we have the possibility to do something. So typically, we would make adjustments to the price. There will be competition, but we always -- and this is true for not only for us, but also competitors normally that if we won a store, a chain, it's very likely that we will stay. It, of course, happens that it doesn't play out that way, but we're in a good position. So -- and of course, we try to utilize that as much as possible as well.

Yes. And on the topic of price pressure, how do you see that your competitors are doing right now? Are they trying to price themselves into the market? Or the price pressure that you refer to, is this in a general sense? Or are you seeing some of your competitors maybe acting particularly aggressive right now, for example?

It's depending on the market and the competitor, I would say. But we can see that sort of the price floor has decreased as of last year. And then it seems that it will stay. And we also see that, of course, competitors is trying to find ways of increasing the price.

Yes. And then we have some more questions coming in here on the gross margin. So maybe we can go back to that a little bit. And if we take the margin step-up now that we saw from Q2 to Q3, and I guess this refers then mainly to the gross margin. Is it -- is there anything significant behind it beyond the customer and the market mix that we saw sequentially between the second and the third quarter?

That's what we said. It's on the cost side, both the freight cost and the development of Plaza. As you see, development of Plaza this quarter was very good.

But there's also slowness. So we negotiate new pricing, then it will be manufactured. And now we have some lead times for the manufacturing and then it will go by boat. So we can see that the price that's been negotiated some time ago, it will take 3 or 4 or 5 or 6 months until we can see it in effect in the results.

Okay. Okay. Yes. I mean that sounds promising, I guess, looking into 2027. There is also a question here on cash allocation. Now you mentioned some initiatives here in product development, of course. But how do you -- can you maybe speak briefly and generally on how you view capital allocation right now? Are you considering, for example, share repurchases versus other types of investments?

That type of forecast we haven't done and we will not do.

Okay. Yes. I figured Orange was an interesting topic, of course, interesting to see a customer similar to this. Is this a business where you see potential to add other customers as well? And what has -- has Orange had a previous setup? Or is this the first installation of this type of product?

As far as I know, this is the first one. I'm actually quite convinced it's the first one because they probably tried it, but this is the first real deployment. I think it might be good open for new opportunity. We certainly have other opportunities that we are working on that are similar to Orange. And of course, we're -- now we sold it to Orange in France. And of course, as a sales guy, I hope to be able to address their other markets. They have quite a few stores in Europe.

Yes. And then we have a question on the line regarding the outlook. When you speak of the outlook and the geopolitical sort of environment, could you be a bit more specific what you are referring to, whether you see this mainly in Europe, which markets are you specifically maybe referring to in this sense and maybe some more granularity on the outlook?

We've seen more in Europe, in North America. Of course, last year, we could see there was a clear slowness. And that as towards the end of last year, we could see that the sentiment was changing from our point of view. And we see quite a lot of opportunities in the North American market. And of course, we have also demonstrated growth in both net sales and order intake. In Europe, it's more market specific. We've seen markets where we have good growth and expect to have more growth. We -- in Scandinavia, as an example, we are growing. We've been growing now compared to last year. So the direct sales approach is working really well, whereas in other markets, we have seen it's been slower.

Yes. Okay. And then on the product development, you mentioned developing of new products. Of course, I mean, this -- I mean, of course, you've been communicating with customers. You know that there is underlying demand for this type of product. But how certain can you be? Is this -- do you consider this sort of -- is there any risk involvement with this type of product development process? And how certain are you developing this type of product that there will be a market demand?

We're very certain there will be a market demand. And then, of course, always when you launch a new product, it's very hard to really assess how successful it will be. Of course, we -- there is a belief and we see the need. Then, of course, we need to make sure that we develop what the market wants, but we have a pretty good idea.

Yes. Okay. Thank you so much. I believe we have addressed most of the questions. Let me just check if there's one more actually on the recurring revenue. On the growth now that we saw in the third quarter of the recurring revenue, is there any single customer or single contract you know that drives this growth? Or is it more of a sort of widespread out type of growth?

There's been a fair amount of Sobeys stores, but then it's across really all markets.

Okay. And if we look at the installed base of Plaza and the recurring revenue at large, is there any customer split here that is maybe sort of driving the major share of this? Or is this diverse?

I would say it's probably still more new customers. We have a number of projects where we -- that we see that they will migrate. But then it will be -- then I think we will see that more in the numbers, then it will be probably bigger deploys in a specific quarter.

Okay. Thank you so much, Magnus and Claes, for coming here and answering our questions today.

Thank you very much, Hjalmar. Thank you very much for joining us. It's been a pleasure to be here and present this quarterly result. And we speak again.