Welcome everyone to the Musti Group webcast for Q4. May I ask everyone to close their microphones, mute the microphones? Today we've got David Rönnberg and Robert Berglund presenting. Once they have presented, we will have a Q&A session as well to answer your questions. And as mentioned in the invitation, this meeting will be recorded. So I'll let David continue, and I will start the recording now.
Thank you very much, Martin, and welcome everyone to the report that we sent out earlier this morning. I think that an overall view on the performance is that it has been a bit slower consumption overall the last quarters, as well as this one, but Musti has been very resilient. We have been doing a bit more targeted investments to get more customers into the group and also to gain market share, and I think we see that, especially in the percentage growth of customers. From a net sales perspective, we reached closely to EUR 440 million. We had a 3.9% growth with a 1.1% like-for-like. Our own and exclusive brands were performing well in all three markets, where we are a bit more than 50% share of sales. We had a quite good cash flow, even though it was a bit stronger last year.
There are also some effects in the cash flow that Robert will go through later. Especially, we could say that our online like-for-like was performing well with 10%, whereas the stores were performing slower due to traffic and the consumption. Our gross margin came in a bit lower, especially in the last quarter. So we ended up at EUR 64.4 million in the adjusted EBITDA. If we move in and look at more of the key topics in the quarterly report, we can see that we were growing with 1%, and the slower growth, as well as last quarter, continued.
We do believe that during the coming quarter, and especially during 2025, we believe that we will see a bit stronger growth, both in the market and then, of course, for us as a group. We also believe that the three countries will ramp up simultaneously. We've seen that the growth in Norway has been stronger than, especially, Finland, so we believe that the growth in Norway will continue, but we will see a ramp up in Finland. When we look at the 12-month net sales over time, we've seen that we have a 9% CAGR, even though it has been slowing in the last quarter, but we see that 2024 is a slower year when we believe it's going to ramp up again during 2025, and we look at the net sales on the rolling 12 months, EUR 438 million.
We believe also now, with the acquisition that we've done in the Baltics, and also on top of that, the growth in the three current markets, we believe that we will, of course, see a stronger growth going forward. Finland is still the biggest part of the sales in the group, and Norway is ramping up very nicely, so if you move into the gross margin, you can see that the deviation here from last year's quarter, going from 46 to 43.2, the 2.8% deviation is quite big, mainly related to the targeting investments and campaigning in price. We've seen that the consumption has been lower in the quarter as for the quarter before, so we have done these investments to keep and gain customers, which we see that has been a good action for us, even though short-term we're seeing an impact in the gross margin.
If we look at the O&E, we see that it's still above 50%, so quite a good level, even though we think that we can reach higher levels going forward. There are also some impacts from the FX rates, but it's quite small. If we take the gross margin with us and move into the profitability on the adjusted EBITDA, it's the main impact on the deviation going from 20.6 to 16.5. Should also mention that there are some one-off effects in the 16.5, so if we exclude those, we ended up at about EUR 17 million. Though the deviation here is mainly related to the gross margin coming back there to the targeted investments. So when we are looking at the gross margin, we believe that that was temporarily the big negative effect. We believe that that's going to bounce back.
We also believe that the growth overall 2025 will look more promising than we have today, both from a market perspective and also that we will keep on gaining and increase our market share. So with the deviation that we see now going from 73.6 to 64.4, we have high hopes of seeing a bounce back of the trend going forward. And with that, I'd like to hand over to Robert that can go through the segments more in detail.
Yes, thank you, David. So if you start with Finland, net sales in Finland decreased by 4.1% to EUR 47.9 million in the quarter. As David already mentioned, it was driven by the weak consumer climate we have seen and also the fact that we have impacts still from the product recall a year ago. However, the situation is improving. Like-for-like growth ended up at minus 3.8%. Then driven by decreasing net sales, also adjusted EBITDA decreased to EUR 12.4 million compared to EUR 15 million in the same quarter last year. We have, as David also mentioned, we have invested into prices and campaign activities having an impact on gross margin that, of course, impacts also the segment profitability together with, of course, also then the decreasing sales and the fairly fixed cost base that in growth you see kind of a leverage effect upwards.
If sales is declining, you see it kind of downwards, and that's just kind of a part of our business. We didn't do any changes to the network during the quarter. Then moving on to Sweden, here we see an increase of sales of 4.8% now to EUR 45.5 million in the quarter. Here we see growth from the kind of stores that we have opened during the last 12 months. Like-for-like growth was actually slightly negative, 0.8% negative. So actually the growth is driven by kind of new stores and kind of the store network development. Adjusted EBITDA decreased from EUR 9.8 million to EUR 9 million, basically due to the same reasons as in Finland. We have invested also in the Swedish market to prices and to campaign activities. And also we have, of course, a fixed cost base here as well with negative like-for-like growth. It has an impact.
Also in Sweden, we didn't do any changes to the store network. In Norway, we are very happy about the continuance of the good development in this country in terms of sales growth, now 6.5% up to EUR 18.1 million in Q4, driven by like-for-like growth of 7.8%, but also a good ramp up in the stores that we have opened now during the last 12 months. Adjusted EBITDA decreased from EUR 3.8 million to EUR 3.5 million in the quarter. Also in this market, we have kind of invested in prices and campaign activities, which has an impact on profitability. During the quarter, we opened two new stores, and actually one store was temporarily now closed due to reasons that are out of our control. That's about the segments. Moving on to the financial position, starting with the cash flow.
So the cash flow of operating activities in the quarter was nearly EUR 20 million, EUR 19.9 million, clearly better than the previous quarters, driven by the profitability, but also kind of a decrease in net working capital in the quarter, kind of driven again by timing, both on inventory and accounts payable. The full year net cash flow from operating activities amounted to EUR 39.4 million, lower than last year, of course, driven by profitability. But also we need to remember that this year we have had fairly big non-recurring items, EUR 13.9 million, especially in the first quarters relating to the recall and also to the public tender offer process. Gearing at the end of the quarter ended up at 93.1%. Net debt was EUR 145 million, out of which EUR 95 million is interest-bearing loans and commercial papers. The rest is the leasing liabilities.
Net debt leverage, meaning in relation to EBITDA, was 2.4x . We had a very good cash position at the end of the quarter, EUR 25.6 million in cash and cash equivalents. And the investments in the quarter was on the same level as last year, EUR 2.8 million. So from a kind of a capital structure and cash flow point of view, we are kind of quite satisfied with the quarter. And then finally, from my side, the financial targets. So there are no changes to the decision to withdraw the long-term targets in April from the board of directors. We remain at that, and if the situation changes, we, of course, kind of announce that. The same goes then for the dividend policies. The company doesn't expect to distribute any dividends and put the kind of cash flow into the growth of the business instead.
If not, the Board of Directors then propose otherwise to the Annual General Meeting. That was all from my side, then I hand over to David for concluding remarks.
Thanks, Robert. So I think you can summarize this with there's been a slow consumption overall, and it differs between the markets a bit. You can say that Norway has been stronger, Sweden quite flat, and Finland has had the toughest period in the quarter. We have been mitigating the lower consumer confidence by doing more campaigns and target offers to gain and keep customers. That has been a success because we increased the number of customers with 3% in the period. Though that project itself has had an impact, negative impact on the gross margin, which we believe is a short-term effect that we see will ease out the coming quarters. And that relation in the gap has a direct impact on the EBITDA and the profitability, and of course the margin.
We are, of course, extremely happy that even though in a slower consumption period, we have been able to gain more customers into the company, so it means that we are taking market share. Now we're also looking forward with the acquisition that we have done in the Baltics, which is the first step for us for a very long time to do geographical expansion, which we hope is also the first of more coming, and I also think, and we also think that the market will ease out going forward, especially during 2025, and we are in a position where the growth is coming back in the market. We see that we will be able to grow even faster and gain even more market share, so a resilient quarter, and we have high hopes that the growth will increase going forward.
So with that, I'm thinking that we can go over to Q&A.
Yes, hello, Maria?
Hi, David, Robert, and Martin. Just a few questions. As Samu said that you use the pricing weapon in order to attract customers, so can you talk a little bit about the comparable traffic, customer traffic in various markets?
Yes, you could say that we have had positive traffic in Norway, quite flat traffic in Sweden, and we have had negative traffic in Finland. I would also say that the Smaak incident that occurred one year ago have, of course, an impact in the comps. So when we're now moving into November, the comps, especially in Finland, are easier.
Yes, thank you. And then you mentioned that you think that you have gained market share during the quarter. So who do you think you are currently winning share?
It's a bit different between the countries, but overall, I would say smaller chains and independent stores are for sure. Then we believe that the online store and pure-play, we are gaining against them. When we look at grocery, it's a bit different between the countries. We've seen that, especially in Finland, with groceries has been performing quite well, but the last quarter has been slowing down. And Sweden and Norway, we don't have the data regarding the groceries yet.
Okay. And then finally, I just wanted to check because, I mean, the previous financial targets that you had, which you have later removed, where you were looking for EUR 300 million sales at the end of 2024, as well as an adjusted EBITDA margin of 13%. And if you look at the current figures, you are actually quite far from the targets you were expecting at that time. Would you, I mean, give a little bit more color that is, do you see the reason being the weak consumer market, or is there something in the strategy you have changed so that, I mean, these targets had become not reachable?
I would say that one of the main reasons is the consumer climate. Another reason is that we maybe think a bit more long-term and try to gain market share and get more customers into the company, which then is driven through the targeted investments. Also, there are some impacts from the effects that is not helping, but I would say that those are the main reasons. Okay, do we have any more questions? Hello? Yes, hello.
Hi, Alexander from Nordea. Two questions, if I may, that might be related. I understand the pricing strategy, so to bring in new customers and potentially increase your sales going forward, so it's a longer-term strategy. I was wondering to which extent you can track that and what are the KPIs you monitor and when shall we expect the gross acceleration? Because we've seen, I mean, you said that the traffic numbers were mixed across countries. So on which KPI do you assess the return on pricing? And regarding your dividends, so you intend not to pay a dividend to reinvest in the business. I was just wondering if you could elaborate on the areas of the business where you need to invest the most and the quantums. Thanks a lot.
Yeah, Robert, maybe you can?
Yeah, so first the question of how we follow-up the impact of the investments into price is, of course, one thing that we separate is the volume, or meaning the kilo sales, for instance, in terms of food from the kind of euro value increase, and there we see good results of our impact. Then in terms of the dividend distribution, now, of course, the geographical expansion that we now announced and we are about to close now, hopefully during this quarter, into Baltics is one example of kind of actions that we take or kind of places where we use then our kind of cash flow in order to basically grow the company. And there are, of course, other growth avenues for us also that we are exploring than geographical ones.
So, okay, but do you need to invest more in your IT infrastructure? Do you think it's, again, more investment in pricing?
We, of course, in terms of the kind of investments into prices, that we really follow the market, how we kind of our investments are kind of responded in the market. In terms of IT, we continue to develop our IT system that we have done for many years, and that will also be a kind of area of investments going forward, but that has been also during the previous dividend kind of policy, so that doesn't really impact that.
Okay. Just to follow-up, last one on my side. You said in terms of results and pricing, you assess the growth in terms of volumes. So I assume that's the basket size?
And also kind of the sale of kilos, for instance, food kilos compared to kind of euros.
Yeah, okay. So you split price and volume? So volume have accelerated?
Yeah. So we see kind of in areas where we have invested now in prices, we see kind of a good development, which is, of course, we see that at least so far it has been kind of a good investment.
Do you have any data on market share gains? Because it seems that you've been doing better than competitors in terms of volumes. Are you outperforming by 1%, 3% of the market?
We are coming with the only data, what we have, is, of course, a bit fragmented at the moment, and of course, we will update the kind of market data as long as we get it, and what we know is that, as David said, we assume that the market is fairly flat at the moment, and with the 3% growth, then we kind of assume that we take market shares. Of course, different again between countries.
And flat in value, right?
Yeah.
Okay. Because you grew three and a half like for like, and it's negative pricing, 5% volume. That's a good assumption.
Yeah, we don't kind of, of course, disclose exactly the split of that, but you could say that volume is. And then that's again very different between the different countries.
Okay. Thank you.
Then I believe Maria has a follow-up question.
Yes, I had one follow-up question, which related to the, I mean, the headquarters cost, I mean, which, I mean, of course, includes the distribution center as well as the pet food factory. If I look at the percentage of sales, let me, I lost my numbers somewhere here. Yeah, I think, I mean, you probably know them better than I do, but yes, okay, it's here. So I think in the quarter, they were 8.7% of sales, versus 7.2% of sales last year on a relatively flat sales. So can you a little bit discuss, I mean, what was the reason for higher central costs?
I mean, if you split it into three, first of all, the central warehouse is operating actually very well at the moment and has been already for a while. So it's more kind of than on the overhead part. I mean, partly it is actually inflation and partly it's the fact that we continue also, even though we have now a bit slower sales growth, we continue to kind of invest in growth also on the kind of this side and kind of make sure that we have the kind of cost base that we need for then when the growth, the sales growth then starts to accelerate. I would say these are the main kind of areas.
And can you be a bit more specific, like what kind of investment would this be, I mean, for future growth? Is this just like a number of employees?
It's basically a number of organizations. I mean, a good example is now the Baltics. In order to kind of take over that, we need to make sure that we are resourced for that type of integration project and, of course, also for other growth avenues then going forward.
Yes, thanks.
Okay. Seems like there's no additional questions. So I guess we can thank you for our part and wish you a great continuation of the autumn.
Thank you very much.
Thank you very much.
Take care.
Bye-bye.
Bye.
Thank you. Bye-bye.
Bye-bye. Thank you.