Hello everyone, and welcome to this webcast. My name is David Rönnberg from Stockholm, and in Helsinki we have Robert Berglund on the other side. Today we will go through the fourth quarter report. The agenda for today will be group development. We will then go into the segments. Robert will take that part, then we'll wrap it up with the finance and the market outlook. Also we will have questions in the end. If we start, the headline of our report is continued strong momentum. This trend has been going on the last 9-12 months. We are, of course, very pleased with the Musti's strong fourth quarter. If we flip the slide, Robert, you can see that net sales grew with 16.6%, with an increase of 19.2% growth. During the quarter, we have seen an extremely strong like-for-like.
That is mainly coming from new customers coming in. Our adjusted EBITDA came in at EUR 10.1 million. Also an uplift versus the last couple of three quarters that we've seen. We're extremely happy with that. The increased EBITDA came in at 44% versus last year. Something that we've been working a lot with is, of course, efficiency and the margin. We saw that the margin came in at 13.1%. The operating profit increased to 63.5% to EUR 7.8 million. We had a bit lower cash flow in the last quarter. This quarter we saw a bounce back to EUR 20.6 million in the free cash flow for operating activities that we are extremely proud of. The number of loyal customers also increased to 1.1 million customers. That is about 13% growth.
If we include all our verticals, including the online, the pure p lay, VetZoo, and Animail, we have about 1.4 million customers in the database. A number of stores grow to 293 stores versus 277 stores. We are also very pleased with the financial full year, where we saw that group net sales totaled to EUR 284 million, which was an increase by 15.3%. Like-for-like came in at 11.5%, and as I said, on the fourth quarter, we had a stronger momentum, which is, of course, something that is underpinned by that we are taking market share, getting more customers into the system, and also that there are a lot of new puppies registered and also that we are taking into the group. Adjusted EBITDA for the full year came in at EUR 29.8 million. That was an uplift with 36.2%.
The margin came in at 10.5%, and that will coming back to our financial targets, that is 10%-12% long term to 2023. We are in a very good position already. Operating profit, also here we saw a huge increase with 56% coming into at EUR 19.6 million, and the profit for the period EUR 11.8 million. Also net cash flow for the full period came in over EUR 40 million-EUR 42.3 million. That with the strong development that we've seen and also the strong cash flow, the board of directors is proposing for the financial year 2020, a capital return of EUR 0.38 per share, and that is in the upper level of the financial target. We had 60%-80%, and this is 80%. We are very happy with the performance so far, and we can also look at how the puppies registration has seen.
We are looking into this. This started since the COVID-19 impact came from March, and we have seen a rapid increase of registered puppies. This is something that we can then get in official statistics in Sweden, but it is happening in all three countries. We've seen that in September, it was 19% growth in registered puppies. Actually, the October numbers came in even higher at 23%. We have launched a lot of programs to get these puppies on board, to get the puppy parents to our Musti system. What we've done is, we have launched puppy programs, puppy training, et cetera. We've seen that our concept is actually tailored versus these new pet parents that is coming to the market. We are getting a lot of these puppy customers into the system.
We can see here that the difference versus last year is actually 35% on a rolling four weeks trend. This has been going on since March, and the trend has been very strong and continued until now. This is, of course, an important part going forward in the long-term view. These puppies will, of course, stay around for 10 - 12 years, and hopefully in the Musti system. That will help us grow even faster going forward. This has, of course, an impact on our growth. We can move on and see how that looked. Net sales grew with 19.2%, a very strong quarter. Like-for-like came in at 12.2%, coming from all verticals, all countries. In Q1, we grew with 9.7%, Q2 15.9%, Q3 16.6%. We have a really strong momentum coming back to the trend.
If we look at it per country, we can see that Sweden was having 11.5% like-for-like. Both stores and online was delivering strong. Norway came in at 35% like-for-like. Also here, both stores and online was delivering. Finland, that is for us the mature market, came in at 10% like-for-like, which is of course double-digit growth in a mature market is of course very good for us. net sales rolling 12 months came in at EUR 284. We can also see that Norway and Sweden is taking a bigger share of the pie, whereas Finland today has 47%. Let's look at the EBITDA. Even here we can see a very good momentum. group-adjusted EBITDA increased with 44.6% to EUR 10.1, and the margin came in at 13.1%.
We can see a seasonal effect. If we compare it versus last quarter, the margin came up to a very good level. There are some reasons behind it, of course, but new customers coming in, good margins, and high efficiency in the scalable platform is the reasons behind it. There are some adjustments in the figures, EUR 0.7 million that's related to distribution and warehousing consolidation. We will mention it more later on. Overall, we are extremely proud of the result, and Robert will take you through the segments.
Yes. Thank you, David. We can generally say that also this quarter has been a continuance of the trends we have seen in the previous quarters also in the countries. If we look at them a bit more in detail, Finland, we delivered again strong sales and result development, good high margin on an EBITDA level. Sales increased by 11.5% to EUR 36 million. Like-for-like increase was EUR 9.7 million, and on a yearly basis, that ended up in a sales growth of 10.6%, almost the same level as last year of 10.8%. Online continued to be positively, of course, impacted by the COVID-19 pandemic, but the impact of that was lower now in this quarter comparing to the third quarter.
Adjusted EBITDA increased by 8.5% to EUR 9.4 million, and that was 26% of net sales, mainly driven by the kind of operating leverage we have in the business and then offset by the higher share of online and the related kind of distribution cost and product mix. If you go to Sweden continued to have a strong momentum both now in Q4, both for sales and also for the EBITDA development. Sales increased by 21.3% to EUR 33.4 million. Like-for-like was 11.5%. Total growth to the full year was 14.7% this year compared to 10.9% last year. A clear increase there. We had a strong like-for-like in both the stores and also in the online channels. We are very happy about the development of the EBITDA profitability increase. We increased adjusted EBITDA by 70.8% to EUR 4.9 million.
That was 14.8% of net sales, clearly higher than last year, that resulted in a total margin of 12.1% compared to last year. We opened two own stores during the quarter in Sweden. Norway. There, we also saw a continuance of the extremely strong trend we have seen last quarter, both in terms of the sales development, but also the profitability development. Sales increase was 59.8%, up to EUR 7.5 million. like-for-like was EUR 35.3 million, that ended up in a sales growth for the total year of 54.6%. Strong like-for-like in both the stores and online space, we are very happy with how the new stores and the stores opened during the year and the years before are actually ramping up in the country all over.
Adjusted EBITDA was now EUR 1.1 million, 15.4% of net sales, more or less on the same level as in Q3, which shows the extremely good impact of kind of getting the country more mature and seeing the kind of operating leverage in the business. On a total yearly level, the margin now landed at 11.5%, clearly higher than in last year. Now we opened, this quarter, one new owned store. We go into the financials and the market outlook, starting with the financial position. Also, as David mentioned, we had a strong net cash flow from operating activities in the quarter, ended up at EUR 20.6 million compared to EUR 2.2 million last quarter and EUR 10 million Q4 last year. A clear improvement and of course, this was driven by the good profitability development, but also then a lower net working capital.
There, especially what we saw last quarter, that accounts payables increased. We saw a decreasing trend in that, which was kind of a part of the different timing of payments that we saw last quarter. Yes. Gearing ended up at 61.8%. Of course, clearly lower than last year, we need to remember that last year, Q4, it was the time before the refinance we did in connection with the IPO. Net debt as relation to latest 12-month adjusted EBITDA was EUR 2 million. Net debt amounted to EUR 94.7 million, including EUR 66.5 million of leasing liabilities. Excluding that, our net debt was EUR 28.2 million. We ended up the year with a very good liquidity, EUR 21.6 million of cash and cash equivalents. Of course, on top of that, we have a credit limit of EUR 4 million and unutilized credit facilities of EUR 10 million.
Investments ended up at EUR 1.9 million, a bit higher than last year, but mainly driven by the fact that we continued to push on stores and the digital development. All in all, a very strong financial position at the end of the financial year. Now I hand over to David for the market outlook.
Thanks, Robert. If we look at the market outlook and also how the market is growing, first of all, we've seen a steady growth in the market with about 4% the last 10 years. What has happened is that we've seen a lot more registered puppies into the market. We believe that the market is growing faster than those 4%. Our estimation is that we are now seeing about 6% growth. If we look versus our numbers, we are outgrowing the market last quarter with about 14%-16%, which is incredible. If we take that to the COVID-19 situation, we've seen a shift from online to stores and then traffic coming back to the stores. That we've seen also during the quarter where the share of sales online came back to normalized levels.
If we look at our financial targets, we have a growth target 2023 to reach at least EUR 350 million, which is then 9% CAGR. We are currently during 2020 at 15.3%, so in a very good position on the growth part. On the profitability, we have 10%-12% adjusted EBITDA margin mid to long term. As we just reported, we are at 10.5%, 2020. We can say that, of course, the midterm for 10%-12%, we have reached it with a 10.5%. From a capital structure, net debt is below 2.5%, and we are currently at 2%. Also here we are in a good position. The dividend policy to pay dividend corresponding to 60%-80% on net profit, and we are now paying 80%, so on the upper level of that range.
Overall, a bit stronger growth in the market underpinned by new puppies. Versus our financial targets, we are in a very, very good position, which is very comfortable going into 2021. Let's do a summary of the report. First of all, we have a very strong fourth quarter, record growth with strong profitability in all three countries where Sweden and Norway are converging faster than expected as we saw last quarter. Sales grow with 19.2%, so extremely high growth, 12.1% like-for-like, mainly driven through new customers coming in to the system. We can see that we had strong growth both in stores and online, whereas online share of sales came in to 22.1%, which is more normalized after the clear channel shift we saw. We have a continued focus on profitable growth.
It's important for us to grow, but it's also even more important to grow with profitability. That we've been showing now in the second quarter a row, I would say. That is supported by efficient and scalable platform during the quarter. The EBITDA increased with 44.6% to EUR 10.1. Musti's underlying growth has continued to be strong after this quarter. We can see that the momentum and the trend has been going very good the last nine months. The board has proposed a dividend of EUR 0.38, which is on the upper level, the 80% of adjusted net profit. Overall, I think we are in a very good position going into 2021. We are seeing more puppies in the market. Our concept is more and more clear that it's tailored to the pet parents out there.
We are in a very good position and let's go into questions.
Thank you. If you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, it's zero one on your telephone keypad if you wish to ask an audio question. There will be a brief pause as we wait for questions to be registered. Question comes from Svante Krokfors from Nordea. Please go ahead.
Yes, hi, David and Robert. Svante from Nordea.
Hi.
Hope you can hear me.
Yes.
Yes, we can.
Hello. Okay, great. Yeah. Perhaps if we start with your financial target. You have the EUR 350 million sales target by 2023. Basically, if you calculate that from this year's sales, and that implies a CAGR of 7%, and that's basically what the market grows currently. The other one is your EBITDA margin target of 10%-12%. You are now at 10.5% and improving faster than you earlier have communicated. How do you want to comment on this quite, in light of latest numbers, conservative targets?
Yeah. Do you hear me all?
Yes.
Okay, great. I think with the respect of that we are fairly new as a public company, it was only nine months ago when we were public, and also that we have a pretty long runway on the financial targets, even though we are obviously delivering a stronger momentum that we saw nine months ago. I think that the dividend that we have been communicating today is showing a good strength where we're putting the dividend at the upper level. Regarding the sales and the margin, I think we have a lot of time ahead of us to be able to review them.
Okay, that's clear. Your Sweden and Norway, the margin improvement there has been quicker than you earlier anticipated. At what timeframe do you believe that Sweden could approach Finland? Is it possible for Sweden to reach Finland's level given the bit different mix and legacy from online M&A?
Yeah. I think the goal is still the same, that we will reach the same levels that we have in Finland in both Norway and Sweden. Regarding the timeframe, we haven't communicated an exact timeframe, but what has been clear for us is that it's going faster than expected, and there are a couple of reasons behind it. I think a lot of good internal work, and that also the concept is really working in Sweden and Norway. If you can say that we tested the concept for 15 years in Finland, and that's not 100% sure that it would work as fast as it has done in two new countries. It's obvious that we have adapted quick, and now performing ahead of the plan, you can say. Regarding timeframe, nothing that we have communicated, but it's going faster than expected.
Okay, you commented in the report, at least as I understand it for the first time, the market shares. That's good info. You said that in Sweden, you have 50% online market share. Is it about the same level in Finland?
I can hand over to you, Robert, regarding that.
Yeah, it's about the same level.
Okay, perhaps, Robert, a question to you. You saw the gross margin decline 1.2 percentage points year-on-year, you say that it's going to online lower O&E and non-recurring warehouse consolidation costs.
Yeah.
The magnitude in that order, or do you want to specify more?
No. Okay. Yeah, that's true. What we have seen in the earlier quarters also is that the distribution costs are clearly of course higher in the online space, and then they are included in gross margin, so they have a kind of a negative impact on it in terms of the channel mix, and that's what we see also. Also now we also have slightly lower O&E share, which has its own impact on it as well. The smaller part is the fact that we have some non-recurring items relating to the warehouse consolidation in Finland and Sweden. It's kind of the same in that sense. We see the same type of trend as previous quarters that the online share is the one that impacts that.
As you can see, it doesn't necessarily have a bad impact, kind of adverse impact on the margin as such due to the fact that we can run the business quite efficiently.
Okay, thank you. Perhaps one more question. You acquired one franchise store in Q4. What's your outlook for acquiring more? I guess in Sweden you have ambitions to continue with that.
I think what we did was that we had a strategy of opening 20 stores to 25 stores, including some acquisitions, and then we raised the bar twice, actually, and now we have up to 35 stores. That is including some acquisitions. There are the limited amount of acquisitions in those 35 stores, and they are mainly franchise Sweden, I would say. No big effect, I would say for CapEx.
Okay, thank you. I think I pause here. I might return with a couple of questions more, but thank you for now.
Thank you. Our next question comes from Olli Vilppo from Inderes. Olli, please go ahead.
Good afternoon. Olli Vilppo from Inderes. Do you see that the COVID pandemic has increased your total revenue if we exclude the increased number of puppies in the market when the customers use less money for traveling, and do you see some categories benefiting from that behavior?
What we saw was first we saw hoarding effect in March, and then was a bit of a hangover in April and May. I think it's been stabilizing. Overall, the total demand has been pretty stable. What we've seen is we've seen a growth in specific areas like toys and treats and some accessories. Otherwise, I would say that we don't see a significant effect from a short term regarding the COVID-19. I think overall the demand has been very the same over the time.
Okay. Any negative effects for the service sales?
Sorry, say again?
Do you have any negative effects for the service sales?
Yes, exactly. Our service stations hasn't been fully up and running at the same hours as before COVID-19. We've had some negative impact, but that's also limited due to that the service revenue is fairly small for the group.
Okay. Going forward, you are increasing the speed of the store openings. Do the risks increase that the selected locations would not be optimal?
I think for us, it's extremely important to find the right locations. I think if we will not look into it for us to choose the right ones, I think we can probably increase speed even more. For us, these 35 stores that we're talking about will be for all three countries. Mainly the majority will be in Sweden and Norway, and then some in Finland as well. Finding the right location is key for us. Quality before quantity in that sense. Smaller stores in high traffic locations is still the strategy.
Okay. In the financial items for Q4, did you have there unrealized currency losses or gains?
I can answer that question. There was some impact on that. We can actually come back with the at least latest in the financial report then on the amounts of that.
Okay. How do you expect the tax rate to be in 2021? Do you still have these unrealized tax benefits?
The tax rate, you asked. Yes. In this year, as expected, we could utilize part of the carry-forward losses we have, especially now in Sweden. We still have unused losses in both Sweden and Norway. If we can keep up with this development in the countries, we will, of course, also have the possibilities to utilize them also during this financial year. Then exactly how much, it's always very hard to say because that really then depends on, in which legal entity in our structure it ends up and so on.
Okay. That's all from me. Thank you.
Our next question comes from Tommy [Ilmoni] from Carnegie. Please go ahead.
Yeah, hi. I have a question about your sales mix. Can you explain how your own and exclusive sales have developed in the different countries during the year? Has there been any big difference during the last year?
Exactly. Maybe Robert has more detailed figures, but what we've seen is that if we divide it in countries, I think it's more or less the same that we've seen before on the same levels, which is that the stores are at a higher level and online on a lower. When we saw an increase in online sales, it's clear that the total share of sales own exclusive is going down. We have also been focusing a bit more on own than exclusive in that matter. The reason why we've seen a bit lower own and exclusive share of sales is two reasons. First, the channel, more online sales, and also a bit more focus on the own brands, if that answered the question.
Yeah, you still have, I guess, a plan to increase the share of own exclusive brands in Sweden in particular, where it's still quite much lower than in Finland, for instance.
Absolutely. The strategy is still the same. The strategy is to increase own and exclusive in Sweden and Norway to Finland levels, and that is both in stores and online. Yes.
Why is it going so slowly? Is it difficult to change the sales mix, or what's the reason behind?
I think the COVID-19 situation has made it a bit tougher due to that we've been focusing on a lot of other things than just that share mix or that mix of products. The online part is taking longer time than it does in store. If you look at it from a store perspective, it's going well in Sweden and Norway. From an online perspective, it's going a bit slower than expected.
Okay, thank you. Regarding your online sales, what is the share of your online sales in the different countries now for the last fiscal year?
All right. I can hand over to you, Robert, if you have that.
Yeah. It's actually, I could say about more or less on the same levels as it has been in last year as well, where we said that Sweden is about 30%, Finland is half of that, and Norway is then about 5%. We have seen an increasing trend actually in all countries, slightly in Sweden and then a bit higher in Finland and Norway. Yeah, you could say more or less on the same levels. Norway, we have seen the highest increase, but it also started from the lowest level.
Okay, thanks. That's all from me.
Thank you. Just as a quick reminder, if you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. Once again, it's zero one on your telephone keypad if you wish to ask an audio question. Okay. Our next question comes from Svante Krokfors from Nordea. Please go ahead.
Yes, hi again. A couple of follow-up questions. You already discussed the service business being a small part. You had the ambitions to grow that quite significantly. I guess that the pandemic has slowed your plans for growing the service part.
Yes. That's right. Number of entities is the same, or the growth in number of entities is more or less the same, but how many hours that we have been open is lower than planned due because of the pandemic. Yes, that's true. That's mainly, I would say, Sweden, less difference. Biggest difference is in Finland and Norway due to the restrictions that they are tougher.
Okay, thank you. Regarding footfall, can you elaborate a bit on how the regional differences have been there between countries and within countries and how that has affected your profitability in the area?
What we can see is that footfall has been affected most from a negative perspective than in, if you take Finland, for example, it's Helsinki and more or less Helsinki area. If you look at Sweden and Norway, there are no differences, more or less, as before the COVID-19.
Okay, thank you. That's all from me.
Thank you.
Of course.
There appears to be no further questions, so I'll hand back to the speakers for any other remarks.
Just to add also, shopping centers is, of course, overall affected. That's traffic in general. Otherwise, fairly the same situation. Was there any more questions?
There appears to be no further questions.
All right. Thanks a lot for listening. We will have our other meetings coming up going forward. Thanks a lot.