Broedrene A & O Johansen A/S Q1 2025 Earnings Call Transcript

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

Question: Kristian Torn°e Johansen - SEB - Analyst : Yes. A couple of questions from my side. So you say you expect supply/demand to better balance and hence cost pressure easing if I understood you correctly. Can you just elaborate a bit on the timing? And how much of this effect do you expect in 2025? Niels Johansen - Broedrene A & O Johansen A/S - Chief Executive Officer, Executive Director, Member of the Executive Board Hi Kristian, that's a good question. And it's difficult to give you a precise answer, but we don't expect much positive during 2025. But on the longer run, we will expect a better balance between demand and supply. However, we do expect in our guidance that it doesn't reverse (technical difficulty)

Question: Kristian Torn°e Johansen - SEB - Analyst : Okay. That's great. Then next question goes to the acquisition of Workwear Group. Can you just update us on the integration here? And especially the rolling out the assortment for your AO B2B customers, where are you? And when can we expect sort of some sales synergies to roll in? Niels Johansen - Broedrene A & O Johansen A/S - Chief Executive Officer, Executive Director, Member of the Executive Board A lot of work has been going on since the acquisition in order to provide a good solution for our 28,000 B2B customers, Kristian. We are -- as per today, we are ready with a solution where the B2B customers are able to order on their AO accounts. So one should expect from this quarter, Q2, to see a traffic, B2B traffic, but of course, it will be smaller steps in the beginning of the quarter. And then you should gradually see more traffic during Q3 and Q4.

Question: Kristian Torn°e Johansen - SEB - Analyst : Then you mentioned regarding your acquisitions as well as that the cost of doing business ratio, as you call it, is higher in the acquired businesses. Is there sort of a plan to get that down in line with the AO average? Or are they simply just different in structure and require a higher fixed cost base? Niels Johansen - Broedrene A & O Johansen A/S - Chief Executive Officer, Executive Director, Member of the Executive Board I think the structure in, for instance, AO Workwear calls for a higher cost of doing business. Hopefully, with more -- with increased sales, we will manage to reduce the cost of doing business. But from a structural point of view, you would see higher cost of doing business ratios in B2C companies as Workwear and VVS Group.