Half Year 2025 Puuilo Oyj Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Maria Wikstrom - Seb Enskilda (London) - Analyst : Yes, thank you, Juha, Ville. And I got to say the very good slide work today on the new strategy. I have three questions, which -- the first one is with your current plans, I mean, when do you think you would be ready to open the first store in Sweden?

Question: Maria Wikstrom - Seb Enskilda (London) - Analyst : Okay. And then my second question is, I mean, you have outstanding returns on invested capital, I mean, compared to many other Nordic retailing peers. And I mean, of course, the source is higher margins, but you also don't operate your own warehouse. So now when you are increasing the scale, my question is that do you think you need to invest, I mean, more -- or you need to invest in your own warehouse capabilities? And also, if you could at the same mention, to talk a little bit about the new net debt-to-EBITDA target, which was raised from 2 times to 2.5 times, so where do you see you are going to invest in this money if you take more debt in the future?

Question: Maria Wikstrom - Seb Enskilda (London) - Analyst : Okay. And then finally, on the profitability, I mean, you raised the target for your own branded sales from 30% to 35%? Or is this something today's level of 23%? And previously, this has had a positive impact on your gross margin. Still you kept the EBITDA margin target at 70%. So So can you discuss a bit that I mean that without expansion, would you have increased EBITDA margin targets? Or what's your thinking here?

Question: Maria Wikstrom - Seb Enskilda (London) - Analyst : Okay. And then maybe it's too early to ask that, I mean, that the international expansion that how many like new headcount you think you would need in the headquarter operations in order to facilitate the growth in Sweden. I would think that given that you are very lean and mean concept that I mean you probably don't have all the resources as of now.

Question: Maria Wikstrom - Seb Enskilda (London) - Analyst : Okay perfect. I will let the next one to ask questions.

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Hello gentlemen. It's Calle Loikkanen from Danske Bank. A few questions on my side. First, talking about the first half results for the second quarter, whichever you prefer, I was wondering the about the like-for-like growth of the private label sales. Is that a number that you could provide?

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Okay. Sorry, okay. That's clear. And then I was wondering that you mentioned that you will open 7 new stores in this financial year. But how about the financial year 2026, so how many stores in total should we be expecting for that year?

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Yes, you don't want to specify, are we closer to 7 or closer to 10 likely next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2025 / 9:00AM, PUUILO.HE - Half Year 2025 Puuilo Oyj Earnings Call

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Okay. Okay. That's very nice, fair enough. And then I was wondering about the comments that you said about Sweden. Did I understand correctly that you first open five new stores in Sweden to see how they go before making decisions on more stores and other countries?

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Okay. Okay. That's clear enough. And then lastly, on my part. Obviously, you had the kind of alternatives to go international, which you announced, obviously today, but the other alternative would, of course, have been to continue in Sweden -- sorry, continue in Finland, open 90 stores or even more than that in Finland by 2030 and then focus on margins, perhaps dividend distribution and so on. So I was just wondering about -- I mean, you must have thought about both alternatives and then decided on international expansion. But what made you kind of tilt towards that decision rather than the yield and dividend kind of alternative?

Question: Calle Loikkanen - Danske Markets Equities - Analyst : Okay, fair enough, that's all for me for now, so thank you very much. Thanks.

Question: Joonas HSyhS - OP - Analyst : Yes, hi, it's Joonas HSyhS from OP. A few questions. Firstly, regarding the expansion to Sweden. Can you comment on how do you see the competitive landscape? And what kind of differences do you see between Finland and Sweden for the Puuilo stores?

Question: Joonas HSyhS - OP - Analyst : Okay, thank you. And if I recall it right, you used to have the online store for this Swedish market, but that has been closed down some time already. Obviously, it's different if you have stores or just an online store in the country. But can you share any learnings from that online exercise that you had previously?

Question: Joonas HSyhS - OP - Analyst : Okay. And a final one regarding the Swedish expansion. You've said that -- obviously, you said that it's organic, as you see it today. But just curious, did you look at any M&A options that may or may not have been on the table when you consider it how to go to Sweden?

Question: Joonas HSyhS - OP - Analyst : Okay. And maybe one final one from me regarding the guidance for 2025. Obviously, you've kept that unchanged, whereas I think previously, you've narrowed it down a little bit during the -- over the course of the year. And obviously, the H1 results were quite strong this year. So can you open up your thinking why did you decide to keep the guidance unchanged at this point?

Question: Joonas HSyhS - OP - Analyst : Yes. Okay. And maybe one follow-up. Do you expect any costs from the Swedish expansion to occur in H2? Or is it more towards the upcoming years?

Question: Joonas HSyhS - OP - Analyst : All right. Thank you very much.

Question: Miika Ihamaki - DNB Carnegie Investment Bank AB - Analyst : Thank you. A few questions from my side. This is Miika from DNB Carnegie. First on the international expansion, I would like to understand more what means fine-tuning the stores in Sweden in the future. I understand this, to some extent, relates to the assortment, how about layouts and ultimately, the financial profile of a store. Should we think that this will be fairly similar in financial profile as your stores in Finland? And also, based on what components have you mapped your store locations in Sweden?

Question: Miika Ihamaki - DNB Carnegie Investment Bank AB - Analyst : And then secondly, following up on this, assuming there will be no significant changes to your assortment, this likely means that in the mix, gross margin terms, the relative profitability of a store should be similar then to Finland. Do you think -- and when you have studied the market that there is sort of pressure in the pricing stemming from the competitive differences, although understanding that the landscape looks to you fairly similar than it does in Finland.

Question: Miika Ihamaki - DNB Carnegie Investment Bank AB - Analyst : And then on your store base in Finland. So you have previously showed a slide of average store sales for different vintage groups, including those that have been a mature plus 10 years old. Have these changed significantly in the recent years to the direction or another, meaning that, for example, has your most mature stores achieved, let's say, meaningfully higher levels than what you have shown us before?

Question: Miika Ihamaki - DNB Carnegie Investment Bank AB - Analyst : Average store sales, so I believe that you have shown, for example, for a mature 10-year stores of EUR3,400 per square meter. How have these developed recently? Have you seen that the organic capacity where these existing stores have been increasing beyond that?

Question: Miika Ihamaki - DNB Carnegie Investment Bank AB - Analyst : Okay, that's very clear. Thank you very much.

Question: Svante Krokfors - Nordea Markets - Analyst : Thank you, Juha, Ville, thank you for the extensive presentation. I will limit my questions to two. First one, do you have any comments on -- you mentioned that in Q2, you posted growth in all months. Do you have any comments on trading post to, i.e., August and early September?

Question: Svante Krokfors - Nordea Markets - Analyst : Okay. And then the second one is regarding looking at the time of the IPO and also after that, your view on how many Puuilo stores fit into Finland has increased quite significantly. Could you in your own words explain what the reasons behind this? I guess, it's a combination of that you both see that there could be significantly several stores in the larger cities and probably also target smaller cities, but perhaps in your own words, how would you explain that?

Question: Svante Krokfors - Nordea Markets - Analyst : Okay, thank you, Juha, Ville. That's from me.