Hello, everyone. This is David Rönnberg, CEO for Musti from Stockholm, and with us, we also have Robert from Helsinki. We are very proud to be able to present this fantastic report that we launched this morning. We will go through the slides today. First, we have the agenda that will be group development. We will go through the segments. Robert will take over and go through the financial and the market outlook. If we can start, going into the first slide on the highlights. Musti is doing its strongest quarter so far. Incredible growth, 19.9%. We came in at EUR 84.3 million. This is mainly driven through new customers. We are continue taking market share in all three countries. During the quarter, we have continued to focus on growth, adapting, of course, to the COVID-19 situation, and also that we've been talking about a lot, the profitability.
Sales was also extremely strong in like-for-like, came in at 13.1% in total. That is from 8% in the stores and online about 33.1% like-for-like. During the quarter, we did the platform change for our Swedish online verticals. That had a short-term negative sales impact. We could actually been doing a bit stronger. The adjusted EBITDA was EUR 10.6 million. That's an uplift with 36.4% versus last year. This is also strong profitable growth in all countries, and the adjusted EBITDA margin was 12.6% versus last year, 11.1%. Also here we had this negative impact on the EBITDA and the margin that is correlating with the warehouse move that we finalized during the quarter. We will come back to that a bit later, but we consolidated our Swedish warehouses, so we saw a efficiency decrease during the quarter.
Cash flow from operations came in at EUR 15.9, versus last year, EUR 14.6. Also very strong. Coming back to the number of customers. 1,189,000 customers, approximately 13% more than last year in the loyalty base. If you also add the customers that is registered in the online verticals, we are now up at 1.45 million customers. Also as we communicated the end of last quarter, Musti's underlying growth has continued to be very strong after the first quarter. Let's look how the market is growing. There has been an extremely strong growth in puppy registrations and new puppy customers into Musti. Since April, we've seen a strong growth in puppy registrations. This is measured in Sweden where we get the official data. During Q1, our Q1, we saw a 29% growth.
You can see also here on the left side that it was peaking in December with 40% new registrations. We see this more of a trend line. We see also that in January it was up 23%. From a trend perspective, we believe that this will continue. Maybe more important is that our concept seems to be extremely tailored versus these pet parents and puppy customers. As we can see here, during the quarter, we were then able to get in 46% more of these puppy customers than the quarter last year, same period, even though the number of registrations was only 29. We can see that actually we're taking about 50% of the market, even though we have a lower percent as a market share.
Extremely nice to see that we are able to welcome and take care of all of these new puppy parents. This, of course, has a huge impact, not so much short term, but more of a long-term perspective. If we move on to next slide, we can see how that will affect the market share. It's evident that Musti has a winning concept with the online, with the pure play, with all the articles and the services that we are offering, and we can continue gain share as we've been doing, and we also see that we have a long runway ahead of us. Market is growing with about 6%, earlier 4%, but now with the puppy registrations, we see this uplift to 6%.
If we look there on the left, you can see in the pie chart that except Musti, grocery and small independents have still the biggest market share. Grocery and mixed retail has around 35% in this 2019 data. In Finland, as an example, grocery grow only with 1.2% during 2020. At the same time, Musti was growing 11%. This is the country that we call a bit more mature. We see similar trends in all three countries. We have good opportunities to still taking market share for a huge part of the market. Let us move to and see how the record sales quarter looked like. As I said, net sales increased by 19.9%, a record quarter in growth, 13% like-for-like, strong growth in all countries.
If you look per country, you can say that Sweden had 10% like-for-like, was a bit negatively impacted with the platform change that we did at the online verticals. We could have reached more. Of course, we're doing this platform change, and also the warehouse consolidations because we believe that we can get even more efficiency in sales over time. Strong growth in both stores and online in Sweden. Norway growing extremely strong, 40% like-for-like, strong growth in both stores and online. Even though the restrictions have gone up and down in the countries, all the stores have been open in all three countries. Finland, 12% like-for-like. Also here, strong growth in both stores and online. Summing this up then, the net sales rolling 12 months was EUR 298 million.
Per segment, Sweden and Norway are taking bigger share as in our strategy, where Finland has 46% and Sweden and Norway has 54%. Let's look at our record EBITDA quarter on the next page. We are very pleased, of course, with the increased profitability in the quarter. EBITDA increased, as I said earlier, with 36.4% to EUR 10.6 million. That has then a 12.6% margin versus last year of 11.1%. That's an increase about 14%. As I said, we had this short-term negative impact from the warehouse consolidation in Sweden. We have been focusing on growth, taking market share, and using our operating leverage. Even though we had a record growth, we've been able to increase our gross margins at the same time. As we all know, there's been a big channel shift from stores to online the last 12 months.
Gross margin came in at 46.1% versus last year, 45.4%. This traffic has moved a bit from stores into online back and forth during the months. Online share of sales came in at 21.6% versus last year, 19.5%. Even we've had the channel shift, we have been able to increase our margins, which we of course, are very happy with. Something that we've been communicating before as well, part of our strategy is to convert the Swedish and Norway margins towards Finland levels. This has actually gone faster than expected, that we also said last quarter, and the trend has actually continued. Robert will talk more about that in next section. I hand over to you, Robert.
Thank you, David. Let's go into the segments, starting from Finland. As David said, we saw strong sales development in Finland. Like-for-like growth was 11.8%, and the total growth was 12.99%, ending up at EUR 39.1 million in sales. A strong growth, and clearly, of course, we saw benefits both from the puppy boom but also we had a successful Christmas season sales during the period. Adjusted EBITDA increased by 15.1% to EUR 10 million. The margin was 25.6% compared to 25.1% last year. An increasing trend there also, which we are very happy about to see that we also get the scale benefits and the efficiency from marketing and stores in Finland. At the same time also, the share of online increased, which had an offsetting impact on the profitability.
Very happy to see that also the store efficiency continued to be on a high level, which we have seen already for a long time. During the period, we also opened three new stores. We closed one, we also acquired one franchise store, which is then also in line with what we have communicated earlier in terms of opening stores in the countries. If you then go into Sweden, also in Sweden, we saw a strong sales growth, 15.6% total growth, 9.5% like-for-like. As David said, that was impacted by a lower increase online due to the platform change. We had also a positive impact from a stronger Swedish krona exchange rate. The development was very strong, both in stores and online. In that sense, a very good situation. EBITDA increased now by 44.7% to EUR 5.6 million.
The margin landed at 15.6% compared to 12.9% last year. More or less the same reasons for the development as for the whole group, meaning we have benefits from operating leverage. We have also had a more efficient campaign mix, marketing campaign mix, and also a favorable product mix during the quarter. Also then have a high efficiency in the stores. Also in Sweden, we opened new stores. We opened two new stores and also acquired three franchise stores, and one franchise store was closed. To Norway, where we saw a continuance of the strong momentum that we have seen already for a couple of previous quarters. Sales growth was 64.2%, like-for-like growth of that was 40.4%. Actually, we had also the negative impact from a weaker Norwegian krone exchange rate compared to the same quarter last year.
Very happy with the continuance of the margin development in terms of the EBITDA margin. Adjusted EBITDA now landed at EUR 1.8 million, 19.1% of net sales, compared to EUR 0.6 million last year and 10.3% of net sales. A clear step up. Really, if you look at Norway as a country, we see a very strong performance in all the profitability KPIs that we are following. Very happy with the development there. During the quarter, we also opened four new stores. Also here I can say that the stores that we have opened last year have performed very well and above our expectations. Very happy with that as well. David also touched upon the convergence of the profitability. That has been a theme that we have discussed earlier and a clear target for us to converge the Sweden and Norway profitabilities towards the Finland level.
Here we can see that in this quarter, also, we see a continuance of the trend that we have seen already for many years, a clear step up in both countries. We are positively surprised of the good performance and development in Norway now starting really converge towards the Finland level. Sweden also is doing a very good job, and we need to remember that this quarter actually was negatively impacted by both the platform change and also the warehouse consolidation project that we finalized during the quarter. There are more potential going forward. Also, to mention Finland, that we are very happy with the level of profitability we have seen and also the fact that we can still see an increasing trend here. Now 25.6% is a level that we are very proud of.
If you then go to the financial position, the cash flow of the quarter was also very strong. Net cash from operating activities amounted to EUR 15.9 million compared to EUR 14.6 million last year. Gearing was now at 56.3% compared to 61.8% at the end of last financial year. Net debt amounted to EUR 19.9 million, including EUR 7.5 million of lease liabilities. The net debt relation to latest 12-month adjusted EBITDA was 1.8x . Cash and cash equivalents amounted to EUR 27.5 million. Strong liquidity continuing the group. On top of that, we have then unutilized facilities of EUR 10 million and a credit limit of EUR 4 million.
Need to also remember that now this kind of a capital structure and liquidity KPIs will be, and has been impacted during Q2 now by the capital return of EUR 0.38 per share as was decided in the Annual General Meeting. Also investments amounted to EUR 3.1 million into tangible and intangible assets, mainly relating to new stores and also the kind of digital development that we have ongoing. The small part relating to the central warehouse consolidation, but clearly only a small part of this amount. That was all from me. I hand over to David for the market outlook.
Thank you, Robert. Market is growing with 4%-6%, more on the upper range of 6% the last 12 months. We are outgrowing the market with 14%-16% during this quarter. If we look at our financial targets, growth 2023 reach at least EUR 250 million, that is 9% CAGR, and we are at 18% the last 12 months. Profitability 10%-12%, adjusted EBITDA margin mid to long term was something we communicated when we IPO'd, and we are at 10.9% the last 12 months. Also from a capital structure net debt below 2.5x, we are at, Robert said, 1.8x. The dividend policy, to pay dividend correspond 60%-80% on that profit, and we recently just paid 80% for 2020.
It's obvious that we are in a good position here. That's why we also communicated in the report that the board is in the process of reviewing the financial targets during the spring, we will be able to come back to that. If we do a summary of the quarter, move to next page. Musti has done its strongest quarter so far, record growth with strong profitable growth in all segments. Sales grow with 19.9%, 13.1% like-for-like, mainly driven from new customers. All three segments showed strong like-for-like. Online share came up a bit versus last year to 21.6%. The growth online was 33%. Profitability in Sweden and Norway converged faster than expected toward Finland levels, the same trends that we've seen now the last nine months. Maybe a bit stronger uptick in Norway in the quarter than before.
We have also continued to focus on profitable growth, supported by efficient and the scalable platform that we have invested in, and that was also proven during the quarter. The adjusted EBITDA increased with 36.4% to EUR 10.6 million, even though we had this central warehouse consolidation short-term negative impact. Gross margin also extremely good, 46.1% versus last year, 45.4%. Musti's underlying growth has continued to be very strong after Q1, and as I just said, that the board is in the process of reviewing the financial targets during the spring. I thank you for listening, and I can hand over now for questions.
Once your name has been announced, you can ask your question. We have a few questions coming through at this point. The first is from the line of Svante Krokfors of Nordea. Please go ahead. Your line is open.
Yeah. Hi, Svante Krokfors from Nordea. I hope you can hear me?
Yes.
Yes.
Hello, can you hear me?
Yes. We can hear you.
Hi. Yes, great. The first question is, looking at the divisional estimates or outcome for Q1 was quite as expected, but on the group function, when you have had the negative EBITDA -EUR 5 million, EUR 5.5 million, roughly. I would put EUR 6.8 million. That was the big deviation. Could you elaborate a bit on that? I guess it has to do mostly with the Eskilstuna change, but could you quantify it and how it's looking going forward?
Yeah. I think I hand over to you, Robert.
That's first of all true that the most significant impact on that line was the Eskilstuna warehouse, where we, of course, in connection with this type of a huge project, have a negative impact on the efficiency of the operations there. We have actually employed a lot of new people into the operations in order to cope with the high volumes that we had through the warehouse, and this is a temporary result of that. The good thing is that the trend in terms of the efficiency is upwards, we are seeing a better trend all the time.
In terms of the quantification of that, probably not going to give out a clear, exact figure on that, but it had a clearly big impact on that, and I could say that the result, EBITDA, would clearly have been above 11 due to this, maybe between 11 and 11.5, without these kind of impacts. Of course, also we need to remember that the cost base as such increases both, especially for the group functions, through volumes and through also the efforts we put in increasing the digital capabilities in the company. The volumes, of course, due to the fact that the central warehouse operations are included there, and the more volumes we get through the warehouse, the higher personnel costs we need to have in the warehouse.
Okay, thank you. That's very helpful. Question to David regarding the CEO comment. One part you say that the channel mix is more moving back to stores and also in omni-channel part is up more than pure play sales. Should we interpret this as you're quite optimistic regarding the gross margin?
Yeah, exactly. I think this is the first time we've been communicating the difference with omni and pure play. We've said earlier, I think that from a profitability and margins, we are channel agnostic between the stores and the omni. The omni has been growing faster than the pure play. Maybe a strong effect from the COVID-19 situation. The trend has been visible the last six to nine months, and we see that has a positive impact for the margins. Any more questions?
Yes. Could you hear my question?
Could you-
I just-
Could you just please repeat it? I think David didn't hear it.
Yeah. The own and exclusive share is what picked up again in Q1. Is that only a result of sales going more back to stores or have you done something actively to change that?
No, exactly. One thing is the traffic, but other things is that we've been working with the sort, been launching also new, for an example, articles in dog outdoor and reviewing the assortment, something that we've been working with for a longer period. Also, of course, been prioritizing that work with O&E, specifically driven maybe more in Sweden and Norway than Finland. It's good trends. It's not a one-time positive thing. It's something that we will continue doing. That, of course, as you mentioned, has a positive impact on the margins as well. Overall, I think the margin uplift that we saw is, we are of course very happy with that, especially when we're seeing a channel shift from stores to online share sales.
Thank you. Just two questions left. You earlier said that you have been able to get over 50% market share in new puppies into your programs. Is that continuing at the same level or any changes there?
Yeah, it's continuing at the same level. Since we launched all the puppy programs after summer, we've seen a clear uplift. This is also things that we are focusing even more on. We shouldn't forget the kittens as well. Yeah, we're seeing those percentages still.
Okay, the last one regarding product availability and pricing from suppliers. Have you seen any bottlenecks there or pressure in prices due to the global demand uptick and do you have any comments on, have you been affected at all by the increasing shipping costs? Thank you.
I can hand over to you, Robert.
Yeah. We have seen some impact of the increase in shipping costs, so far, no really significant impact on the financials. In terms of the availability, it has been good throughout the quarter. Of course, let's now see how Brexit impacts that. There could be some temporary impact, nothing that we are that worried about. We think we have also quite extensive safety stocks in place at the moment for that. So far, no significant impacts from that. In terms of price increases, there we haven't seen any kind of abnormal pressure so far.
Okay, thanks. That's all from me.
Thank you. Our next question comes from the line of Manon Coulon of Erasmus Gestion. Please go ahead. Your line is open.
Hi. Thank you very much for taking my question. At the IPO, their long-term guidance was 10%-12%. The convergence of margins of Norway and Sweden towards a Finland margin was not exactly in the plan. I have two questions on that topic. First, is convergence actually possible? What did change since the IPO was structurally changed to make this convergence possible? Thank you very much.
Yeah, I can answer that. First of all, the first question, it's yes, it's possible we believe to reach the same margins. The reason why it's gone faster than expected is a couple of reasons. The first is that we have always believed that we could reach it, but it's about time. It has gone faster than expected because of the way of working efficiency and also that the concept is performing stronger and faster than expected. Of course, we've had some help with the puppy boom that we're seeing, but also coming back to the gross margins, which is extremely important. The assortment that we've been working with has also had a positive effect on the total gross margin and that, of course, to the EBITDA margin.
Thank you very much. You've talked about online and warehouse changes during the Q1. Do you have any other one-off changes or restructuring to come during the year?
I can hand over to you, Robert.
Any restructuring relating to online, did I understand correctly?
Well, any other restructuring or any consolidation or any changes like the example you gave us for Q1, the online and the warehouse.
Okay. Yes, in terms of that, no. We don't foresee any kind of a major project in that now going forward. I think this warehouse consolidation and platform change that we did now were more or less the biggest steps left that we had. Of course, we will continue to fine-tune all the platforms, everything that we have. That's more business as usual from us.
Okay. Thank you very much. Maybe just one last one on my side. You revised your expectation in terms of market growth because of the puppy boom linked to the COVID-19 crisis, probably. How long do you think it's going to last? Do you think it's going to anniversary in April 2021? Do you think this tendency may last in terms of volume growth?
Yeah, right. I can take this. Of course, impossible to forecast, but we believe that this is quite of a trend shift. We believe that the number of registrations on the higher level will continue. We see that people still are on waiting lists, so there is still a huge demand for getting puppies. We also believe that this will then continue, maybe not at the same high levels during this year, but we believe that this will continue during the year at a high level.
Thank you very much.
Thank you. Our next question comes from the line of Joni Sandvall of Nordea. Please go ahead.
Yeah. Hi, it's Joni from Nordea. A couple of follow-up questions, and first regarding profitability in Sweden. You have been working with store-side efficiency, and I'm just wondering how much you see still potential within the store efficiency in the country.
Right. Robert, you can take it.
Well, as you see, the trend has continued to be upwards and so for each quarter now. In that sense, we still have a potential, and we continue to utilize that. Of course, we are also doing new measures all the time, which also means that, of course, it gets harder and harder. Still, we see potential in the metrics that we see. Also need to remember that about 30% of the Swedish business is online, so also the potential we see in increasing the profitability there has a significant impact on the profitability of the whole country or the whole segment. Yes, there are potential in both store sides, but also the online side.
Okay, thanks. Second and last question from me about franchise stores acquired. I think it was four stores now in Q1. I'm just wondering what prices are you paying currently for the acquisitions and is this increased acquisition amount due to the lower acquisition prices?
Should I take it?
Yes, please.
In terms of the acquisition prices, we have continued to stick to the same level as so far in terms of the companies or acquired franchise stores. No deviation there, about three to five times EBITDA. I wouldn't say that we have seen any, in that sense, a change during this quarter or even this year. It's now more a question that we've put a bit more focus on acquiring franchise stores, have a tight dialogue with them in order to see which are the ones that we want to have as own stores and which we will keep as franchise stores. It's more driven by focus from our side at the moment.
Okay. Thanks. That is all from me.
Thank you. We have one more question in the queue so far. Just as a reminder to participants, if you do wish to ask a question. The next question comes from the line of Olli Vilppo of Inderes. Please go ahead.
Hi, guys. Congrats for the good results. Only one question left for me. Amazon opened during the quarter in Sweden. Did you see any effects from that in your operations, and how do you see it as a long-term opponent?
A straight answer, we haven't seen any effect at all. Of course, Amazon is Amazon. We need to do our best to do what we've been doing the last couple of years. I think the concept with the Omni and the pure play is working well. We're also following this from Google Search and all of that, and we're not seeing any impacts at all.
Okay. Thank you. That's all from me.
Thank you. As there are no further questions at this time, I'll hand back to our speakers for the closing comments.
Thank you for listening, we will continue with all our meetings now the coming week and next. If there are any things, please reach out to Essi, that can take it forward to us.