Good morning, everyone, and welcome to Europris' fourth quarter presentation. I'm Espen Eldal, CEO of Europris, and joining me today we have CFO Stina Byre, who will present the financial details, and IR Manager Trine Engløkken, who will manage the Q&A session at the end of the presentation. Please feel free to type in your questions as we speak, and we will sum it up at the end. It's always a pleasure to see a live audience in the room, and actually today we have some visitors, and that is a special welcome to you guys. Good to see you. Okay, let's get started. In retail, the fourth quarter is the most important quarter of the year, and I'm really pleased to see that we delivered a solid finish to 2024.
In Norway, we had prepared well for the Christmas season and were rewarded with sales growth above the market, and the gross margin improved both from last year and also the preceding quarters. All that contributed to an EBIT increase of 20% from last year, so strong performance in Norway. In Sweden, we get more and more confirmation that our initiatives to increase sales from campaigns and margins, and also sales of non-food products, are giving results. So we're making significant progress on the integration plan, and we are getting ready for the first important product upgrades in the early start of 2025. So we are on track for Sweden and a good end to the year in Norway. Looking at the financial figures, they are of course impacted by the acquisition of ÖoB, and the organic numbers represent segment Norway, which is comparable to last year.
Stina will provide more details on the financials, but overall we saw a very good sales development combined with the improved gross margin in Norway, resulting in group EBIT of NOK 624 million and an increase of 12.7% from last year. Looking at the market, in Norway we delivered a solid finish to the year with growth above the market growth. According to Kvarud Analyse, the shopping centers in Norway had a growth of 4.1% in the quarter, and Statistics Norway reported a variety retail growth of 5% compared to Europris' growth of 5.2% in the fourth quarter. Also for the full year, we exceeded the shopping center growth and also the broad variety retail index as reported by Statistics Norway.
So it's a solid sales performance, and we were very well prepared for the Christmas season and managed to balance the sales and the campaigns during the important Black Weeks in November. We've seen a high share of non-food sales and also private label products in the quarter, while a more intense price competition from the grocery chains has led to lower sales from groceries. So it's been a mixed market. We've seen both for Europris and also the rest of the market that in home and interior has performed very well in the quarter, while groceries has had a more difficult time, and I think the price competition we've seen for especially seasonal goods this quarter has been more intense than what we have seen in previous years.
We still see that consumers are cautious, and good campaigns are very important to drive footfall to the stores and get sales growth. And one shift we have seen for some time is that over the years we've seen that sales have been shifting from December to November, and this was even more evident this year. We saw that November is becoming more and more important as the seasonal Christmas period for sales, and that is especially valid for physical retail. And I think what we have seen is that we have educated the consumers to be a little bit more smart. They're taking advantage of the Black Week campaigns and getting ready with the Christmas shopping early at low prices. So the consumers are getting smarter, and the retailers, they have to adapt. And for online retail, we actually see another shift this year.
For them, November has been the most important month of the quarter for some years, but we saw that sales actually moved far into December this year as logistics chains have improved and delivery is more reliable. We saw that the sales period up towards Christmas was prolonged this year, and we saw that in the market, and we also saw with our pure players that we got more sales in December, but still November is the most important month. So a lot of changes in the market. And also another thing, the strong price position and the product offering of Europris was also well recognized in the market. In October and November, Nettavisen compared prices on everyday products among seven discount variety retailers, and Europris was a clear winner. And I think that's a very strong achievement, especially in the quarter where we also increased the gross margin.
And over the last couple of years, we've worked really hard to improve our sourcing model and also to develop private label products, and this allows us to keep prices low without compromising on the gross margin. We've also been awarded for our seasonal products in Europris, winning several product tests during the Christmas season. On the pure player side, I'm really pleased to see that Lekekassen was awarded by Prisjakt as Online Store of the Year for families and children, and they got the second place in Online Store of the Year .
And these rewards are very important for me and also to all employees of Europris because this gives us motivation to continue working hard to develop even better solutions and be more competitive and increase the value for our customers. So it's a strong achievement by the team, and we are really proud to present this today.
Let's look to Sweden, where we see that the ÖoB integration process is progressing according to plan. The organization continues to work well together and see that the collaboration between Europris and ÖoB is actually getting better and better as we get more time to know each other, and in the quarter, we've taken actions to build a more robust governance model, and this has been one of the key tasks of Andreas Rosett after he took over as country manager. He's established a new leadership structure and also established arenas to promote more collaboration across the various functions in the company, which is really important if we shall be successful with the plans we have ahead of us. We need to collaborate better, and we need to get more management attention in the organization.
On the positive side, we see that we get very good results from the initiatives we have taken to increase both sales and margins from campaigns and also the sale of non-food items. And that is really comforting for us to see as this is some of the cornerstones in the turnaround plan we have for ÖoB. But still, we don't see an uplift in the basket. We see that we get an improved sales mix, and the consumers are responding to the changes we're making, but the current customer segment needs to be added up with more customers coming in.
We need to take back some of the customers that have been lost over the past years, and the product upgrades and the product range upgrades we are going to start now in 2025 will be evident to really attract new customers and increase the customer experience in the stores. That's what we need to get long-term growth into ÖoB. When we look at the fourth quarter, it's been extremely busy. It's a lot of activities that have been carried out in the Swedish organization, and we have, first of all, initiated large clearance sales in order to prepare for the upcoming category upgrades. We need to sell out the old items before we can improve and introduce the new product range. We have implemented the Europris campaign methodology and ways of working.
We have implemented a new visual profile in 70 stores, and we have also introduced carpets and rugs as a new product category in the stores. We've upgraded the business intelligence system, and we are making progress on the ERP system where we expect to go live in the first half of 2025 as planned. So it's truly been a busy quarter, but we're making good progress, and the team is really motivated, and we see that the initial results are pointing in the right direction. Overall, on ÖoB, we remain very confident on our long-term ambition to increase revenues by NOK 1 billion and reach an EBIT margin of 5% in 2028. The cornerstones of our turnaround plan are to do the category harmonization and the joint sourcing where we have got off to a good start.
Improving customer experience is actually what we're going to start now in this year, and strengthen the execution across the whole value chain is something we're working on all the way. With that, I hand over to Stina to present more of the financial details.
Thank you, Espen. As Espen said, the fourth quarter is the most important quarter for the group, and it was therefore highly satisfactory to see the strong development in Norway, and the group delivered growth in both top line and profit in this important quarter. Group sales were NOK 4.4 billion, and the large growth compared to last year was explained by the inclusion of ÖoB that was not part of the group figures last year, but the organic growth was also good with an increase of 4.9%. The gross margin was 42.5%, and the decline compared to last year was explained by ÖoB that has a lower margin level. If we exclude impact from currency, the organic gross margin showed an improvement of 1.4 percentage points. The OPEX to sales ratio was 22.3%. This is an increase compared to last year due to the inclusion of ÖoB.
The organic development showed an improvement of 0.3 percentage points, but I would like to mention that the OPEX was positively impacted by timing of costs and accruals of NOK 20 million. EBIT was NOK 624 million. This includes a loss of NOK 41 million from ÖoB, and the organic improvement was 20.2%. Net profit to parent was NOK 443 million, up by NOK 9 million despite the loss in ÖoB. ÖoB was consolidated into the group figures from May, so to meaningfully compare to last year, you should look at the organic growth. For the full year, group sales were NOK 12.8 billion with an organic growth of 4.3%. The gross margin was 41.7%, and this included a dilutive impact from ÖoB of 3 percentage points.
The organic gross margin, excluding currency effects, was slightly above last year, which I think is a good performance considering headwind from a weaker local currency compared to central purchasing currencies like dollars and euros, war surcharges that were imposed on inbound freight from Asia, and a higher share of sales from campaigns. On the positive side, there were lower purchasing prices from Asia and a higher share of sales from private labels.
The OPEX delivered better than the expected 10% increase that was communicated in the beginning of the year, and the organic growth ended at 7.1%. Group EBIT was NOK 1.2 billion. This is down from last year due to a loss of NOK 102 million in ÖoB. The organic EBIT grew by 3.4%. Net profit to parent was NOK 839 million, down NOK 70 million due to the loss in ÖoB. I will comment on the full year figures.
Cash from operating activities was NOK 1.5 billion, down from NOK 1.8 billion in the previous year. Lower cash from operating activities was mainly explained by the development in inventories. Compared to the previous year, a higher share of goods for the spring season was on its way and had also arrived. In addition, we have also had a planned inventory buildup in order to improve the service level in our stores. This obviously impacted also the net change in cash, which was negative with NOK 73 million compared to positive at NOK 212 million last year. Net debt was NOK 4.2 billion, and excluding lease liabilities, it was NOK 720 million. The group had cash and liquidity reserves of NOK 2.2 billion when exiting the year. For segment Norway, sales in the fourth quarter were NOK 3.2 billion, up 4.9%.
The average chain had a like-for-like growth of 4.8%, and this was driven by higher footfall and strong execution of the seasons and campaigns. Higher sales of Christmas items had a positive impact on the gross margin, and with an OPEX growth of only 3.4%, the EBIT ended 20.2% above last year. The fourth quarter is also the most important quarter for our largest pure player, Lekekassen, and it was therefore good to see that the development was better than in the previous three quarters. Strikkemekka had strong sales growth in both the fourth quarter and for the full year. For the full year, sales for segment Norway was NOK 9.9 billion, up 4.3%. The average chain had a like-for-like growth of 3.5%. The upgraded kitchen category from March showed an increase for the full year that was very strong.
The grocery category was upgraded in September, and here we got off to a very good start, and it also delivered higher growth than the chain total for the full year, but growth slowed towards the end of the year due to the competition in grocery that Espen talked about, but with a broad range of categories, the chain can adapt to changes in competitive landscape and/or consumer behavior rather quickly, and I think that this illustrates the strength in the concept. One new store was opened in 2024 with a location that is part of the strategy to open more stores in densely populated areas. In addition, we also had 23 other store projects, which is part of keeping the store portfolio up to date.
There are 12 stores in the pipeline, of which seven are expected to open this year, and one will be closed in the first quarter. ÖoB had sales of 1.2 billion NOK in the fourth quarter. Like-for-like sales were lower, but we were happy to see that footfall was on a par with last year. The gross margin was 32.6%, and a clearance sale ahead of the planned category upgrades had a negative impact on the margin. OPEX to sales was 28.8%, and the OPEX was impacted by several things. There were timing of some costs that hit the fourth quarter. There were some one-off costs, and we also had costs related to the upgrade of the business intelligence system and the ERP project. EBIT was negative with 41 million NOK. From May to December, sales were 2.9 billion NOK for ÖoB, and EBIT was negative with 102 million NOK.
For the full year, like-for-like sales were down, but it was pleasing to see that after declining footfall in the first half, this stabilized in the second half. One store was closed in 2024 as the location was unbeneficial and the store was too large and therefore unlikely to turn profitable. But the organization is in good spirit and continues to work hard to deliver on the integration plan. And with that, I will hand it back to Espen to talk about dividend and outlook.
Thank you, Stina. We'll start with the dividend, and as Stina has explained, Europris has a solid financial position, and profits in Norway are growing. This allows us to increase the dividend, and the board proposed an ordinary dividend per share of NOK 3.50, which is an increase of 7.7% from last year and represents a payout ratio of 68.2%. On the outlook, we see an improved outlook in Norway and Sweden for the consumers after some years of weak consumer confidence. Inflation has come down in both countries, and with the high wage increase over the last two years, the average consumer is seeing real wage increases. In addition, the interest rate has already come down in Sweden and is expected to come down in Norway during 2025, and this is all good news for the consumers, but it's also good news for the retail sector.
In Norway, Europris has outperformed the general retail market with gradually improving financials through 2024. That is a strong achievement, and the turnaround of ÖoB is progressing as planned with upgrades of several important product categories planned for 2025. The first store modernizations will take place around summer, and patience is still needed to see the long-term results in sales growth and margin improvements in Sweden. We are on the right way, and we remain very confident to reach our ambition of NOK 5 billion in sales and a 5% EBIT margin in 2028. With that, I will invite Stina back on stage, and we will open up for questions. Trine, would you like to start with the questions in the room, or do you prefer to start with the questions from the web?
I think I will start with questions in the room. If there are any.
Thank you, Eirik from Carnegie. Thank you for taking my questions, a couple. If we could start on ÖoB, Stina, could you just help us? You called out a couple of different drivers for the OPEX increase year-over-year. Would it be possible to give a bridge or a sense of the relative share of the OPEX growth, like what's behind that? If we could start with that.
I don't think I can give you an exact bridge, or I don't wish to give an exact bridge on that, but a part of it is timing, so some of it you will see more distributed during 2025 in all quarters, and some of it are more one-off and related to integration, etc., but overall, we are very determined on having good control on costs also in Sweden, but some costs they have run very efficiently for a long time, and some cost increase we need to have, and the ERP project will also continue in the, especially the first quarter and potentially also into the first half, and that is booked as OPEX and not CAPEX as they are in the cloud.
Okay, perfect. Thank you. Also another one on ÖoB. Is it possible to get, you call out the clearance sale as well, which impacted the gross margins, but still it's flat-ish year-over-year. Do you have a sense of the underlying gross margin in ÖoB if it hadn't been for the clearance sale, or?
It's a bit difficult question because you can do the math, obviously, but it has also cannibalized on the normal sales that you would have had. So I think we will work to improve the gross margin in Sweden, but to put an exact number on it is a bit more difficult.
Thank you. And then one final one, very positive to see gross margins turning in Norway as well. Based on what you see on inbound freight agreements, FX, inventory, etc., do you feel like we're at some sort of trough level on the gross margins in Norway now, or how should we think about that going into 2025?
I think it's very hard to predict. The way that things have moved and fluctuated over the past years just shows that it's almost an impossible question. What we do is, of course, we adapt to the situation. We work our hardest to deliver well, and I think that we will just continue to have focus on the elements that we can impact, and what impacts us in the market also impacts our competitors. So we're not hit uniquely, but we will continue to do our best to deliver well.
Perfect. Thank you. I'll jump back in the queue.
Then I go to the questions on the web. The first ones are from Ole Martin Westgaard . Can you please provide the private label share for Q4 and the financial year 2024?
In the fourth quarter, it is higher due to the product mix. So then it was 49%, and if we go to the full year, it was 46% for Norway.
Can you please provide the consumable share for Q4 and 2024?
Also, same type of split. It was a bit lower in the fourth quarter, and for the full year, it was close to 53%.
Can you please elaborate on the performance for Lekekassen in Q4? How was the sales, gross margin, and EBITDA margin development year on year?
They performed better in the fourth quarter, which is obviously pleasing as that is the most important quarter. They had sales growth in Norway, but it has been a tougher year in especially Sweden and Denmark. More competition, also tough price competition. So this has had a negative impact on the margin and on the profitability.
Can you please provide the mix on organic growth from volume and price?
The basket in Norway is driven by price, but it's not a big change. It's slightly up, the basket, and it is price. We have overall volume growth, but that is also due to higher footfall.
What was the selling price for Lunehjem, and what was the contribution from Lunehjem on revenues and EBITDA in 2024?
It's a very small company. They have a little more than NOK 20 million in sales. It had a rather flat-ish profitability, and we won't disclose the price, but we expect to have a write-down on goodwill of NOK 9 million.
On Sweden, how much was your gross margin in Sweden impacted by the increased campaign sales, and should we expect this to continue?
I think I covered that with Eirik's question.
I agree. Then we go to Henriette Trondsen. That is also on the share of consumables both in Norway and Sweden, and what drives the strong sales in non-food items? Can we expect this to continue in the first quarter?
Yeah, it's a higher share of consumables in Sweden than in Norway. For the full year, it's around 70%. All the work we're doing in Sweden with upgrading the categories will be part of the strategy to change that sales mix. So going forward with all the things we're doing, we expect that to improve.
How has the start into Q1 been for ÖoB?
Into Q1, first quarter?
Yeah, first quarter.
We haven't even completed the first month, so we will not comment on what we're doing. I think asking about quarterly sales in Sweden at this time. I appreciate all the questions that retail is detail, and you need to be in those details, and we are, of course, but long-term is what is important for ÖoB at the moment. We have a long perspective in what we're doing, and at this time, we are focusing on the tasks. When we see good results on what we are doing, and we are confident that long-term we will get results with improved sales and margins, but it's a long run.
Håkon Fuglu has a couple of questions. What was the lost sales in Q4 from increased competition from grocery?
That is very hard to say, but if you look at retail statistics, I think the quarter index has reported well that grocery only had a growth around 1% during the Christmas season. We've seen the same from the retail statistics, the card transactions reported by DNB, so I think in the market, you've seen that groceries have had a lower growth, and we have seen the same in our figures. We're just reporting that we familiarize ourselves with the general market trends.
The freight agreement is up for renewal for 2025. What will be the impact from this?
I hope it will be good. It will be up for renewal, and of course, we will do our utmost to make sure that we get a good agreement. What I can say now, we have been fluctuating with the war surcharges as all other retailers, and we've seen now lately that the tariffs are coming down, and let's see, I hope that will reflect into our figures. But I think overall, we have a strong agreement compared to the rest of the market.
Jan Gunnar Bjelke, when do you think you will be EBIT break-even in ÖoB?
That will be some way on the way to 2028. It's a long run. We're working really hard to achieve this, but if it happens in 2026, that's not the most important thing for me. The most important thing is to see that we make progress on the initiatives we have started.
Another question from Ole Martin Westgaard. The NOK 20 million positive timing effect on cost, what is this related to? Should we expect this to hit in the first quarter? Is this related to Norway?
This is related to Norway, and no, it's explaining a difference between 2024 and 2023, so that's some timing between the previous quarters and also somewhat low level on, for instance, variable remuneration.
That was the last question on the web.
Thank you very much. Have a good day.