Good morning, and welcome to this presentation of the Q1 result 2021 for our rupees. Joining me on stage today, I have CFO, Stina Bire, who will present the financial highlights. And the ER Officer, Trien Engeluken, will manage the questions at the end of the presentation, but please feel free to send in questions as we speak. It's another a strong quarter for Auropis. And I have to admit, it has truly been a challenging quarter.
For the first time during the pandemic, we have been forced to close stores. And for a short period, many of our employees has been temporarily laid off. In Oslo, we have had some stores closed since the 24th January, and I have great compassion with the difficult situation our employees, Ari. Dealing with the temporary store closures has been a new challenge for Arupolis. But I have to admit, I'm really proud of how the organization has responded.
The whole organization has pulled together responded in a very good way. And once again, we are focused on what we can impact ourselves. We have adapted to the best possible way so that we can serve as many customers as possible and keep as many of our employees working as possible. This might not be the best quarter ever, but it's a record breaking Q1 for Auropolis and the team effort that lies behind these numbers we will presented today makes that for me. This is actually the best quarter we have ever presented.
Let's have a look at the highlights. We reported sales growth of 24.3%, improvement in gross margin of 0.7% points. Operational efficiency continue to improve as is capture the scale benefits and EBITDA increased by 64%. The financial position of Aeropis is solid, and Steve and I will come back to the details behind these figures later on. On average, 10% of the store base has been closed during the quarter due to infection control measures.
Despite this, we have delivered strong sales growth across the country. It's the Greater Oslo area with the counties of Slovakian that has been hardly hit by store closures. And in this region, we have delivered the sales growth of 16% in the quarter. In the rest of the country, we have delivered 31% sales growth. During the quarter, we had as much as 94 of our 2.67 stores closed.
And that number has now been reduced to 19. And we certainly hope that the infection situation in Oslo improves over the coming weeks so that we once again can have all our Auropis stores open. The closure of stores called for swift actions. In a short time, we established new sales solutions. We have improved the Click and Collect solutions and e commercial growth.
But for the Aeropiece customers, the most preferred solution has been to call and e mail the stores. By doing these initiatives, we have managed to save 10% to 15% of the sales in the closed stores, not really a big and impressive number. But when you consider that actually more than 60% of what we sell is what you find in the grocery store that has been allowed to keep open. I think the number is actually quite good. And this is not something we've done to keep profits very high.
It has been covering the costs basically, but we have kept in touch with the customers. The employees really felt that they've done something meaningful, and it means that we have been able to reduce the number of temporary layoffs. So for the moral of the company, this has been very, very important. Aeropis continue to grow in a very strong market. We are outperforming the market by a significant margin, and we are gaining market share.
In the Q1, the market effects has been quite mixed due the COVID-nineteen. The grocery sector is continuing to grow, benefiting from closed borders and also staycation during Easter holiday. While the shopping centers, especially in Oslo and Wiekken, has really been hit by the temporary store closures and only grew by 1% point. Variety retail grew by 9.9% in the quarter and AUROPIS grew by 24%. With that, I'll leave the stage to you, Stina, to tell us the financial highlights.
Thank you, Espen. Auropis continued to deliver strong sales growth, and all categories contributed to this development. The total chain sales were SEK 1,800,000,000 with a like for like growth of 23%. The sales growth was highest in the beginning of the quarter, and this was due to a cold winter leading to higher sales of seasonal items And due to COVID-nineteen, which has continued to affect domestic demand positively. The timing of Easter, of course, also affected positively.
But on the other hand, on average, 10% of the stores were closed during the quarter. The development in gross margin was good. The gross margin was 40 3.3%, representing an improvement of 0.7 percentage points. The margin growth was positively affected By the timing by the cold winter and the high sales of seasonal items and effects from category development initiatives. Cost control was good and operational efficiency continued to improve.
Auropis has had scale effects, and higher volumes have not led to the same increase in costs. Store and Police are able to handle volume increase without adding hours. The OpEx level was €452,000,000 up by 10%, while the OpEx to sales ratio was 26.3%, representing an improvement of 3 point 4 percentage points. Auropis delivered a strong Q1 last year, and we are very pleased to have significantly outperformed this. The EBITDA was SEK 292,000,000, The EBITDA margin increased by 4.1 percentage points to 17%, and the strong results are due to solid performance in the entire value chain.
Net change in cash was negative with SEK 399,000,000. Negative cash is normal for the Q1 due to inventory buildup ahead of the summer season. The higher negative effect from net change in working capital versus last year was due to a reduction in accounts payable due to timing and from higher inventory levels as more volumes have been purchased in order to meet the higher demand. Cash from financing activities was negative by SEK 110,000,000, which is SEK 149,000,000 lower than last year. And this was due to net loan repayment last year from the refinancing.
Per end of March, Ouropis has a solid a cash and liquidity position of SEK 1,500,000,000 which is SEK 560,000,000 higher than last year. And with that, I hand it back to you, Espen.
Thank you, strong numbers. The strategic agenda for Auropis remains the same. We have 3 key focus areas, and that is to strengthen the price and the cost position, to improve customer experience Anne to continue to drive customer growth. On strengthening the price and cost position, the most important project we have is the new logistics center in Mas. I have to admit, I'm really proud to announce that we have passed the final acceptance test for the automation in the Low Bay area that was passed in now in the quarter.
And this will make picking of goods more efficient. And a controlled ramp up has now started, and we gradually speed up operations in the new automated warehouse towards the summer and also in the start of the autumn holiday. We will keep the old center warehouse in Fredriksen, so we have delayed the exit from that, and that is due to the high volumes we spec now in the springsummer season. The project in Mas had 3 key milestones. And we are very pleased with the progress we have made over the project period.
The first milestone was to build a new warehouse, some that was delivered on time and cost back in May 2019. And the second one was to start operations in the High Bay Area, and that was started a year ago, very successfully. And the 3rd and final milestone, that is the automation in the Low Bay Area. And as scheduled, we have started operations now in the first half of this year. With this 3rd milestone ended, we are approaching but we have been forced to keep the old central warehouse in Freljesaf for a longer period.
This is not due to problems we've had in the projects, but it's basically due to the fact that we have seen a sharp increase in demand over the last 12 months. And the final decision on when we will exit that warehouse will be discussed after the springsummer season of this year. And the decision depends on the level of inventory we have left after the season and also the volume expectations we have going forward. With OBE, the sourcing partnership continue to make progress as planned. But on the equity transactions, we have not made any progress since the last quarter.
We are still looking for an independent auditor to examine the due diligence disagreement we have on the 2019 financials and thus the option period are still delayed. In the Q1, Aurop now OBE had a negative sales development. But on the positive side, we note that they increased the gross margin and also reduced operating expenses. Despite this, the EBITDA was negative at SEK 37,000,000. Zek.
The key driver for like for like sales growth is the constant focus we have on improving customer experience. And continuous development of the concepts and the categories is really at the heart of our rupees and one of the most important jobs we do. Last year, we made a very successful great of the kitchen department. And this year, we have used those school experiences to improve the home category. The Home category is among the categories that demonstrated strongest sales growth in the Q1, expanding the margin.
It's a category with a high level of own brands, and it's above average margins as well. So this is a very important category to develop, and it's also one of those categories that actually sell quite well online. And in addition to this development we've done in the physical stores, we have made a small acquisition of a well run company called Lunium. The company is a pure online player, and it's highly profitable and has demonstrated strong growth over the last years. In 2020, Lunium had sales of 29,000,000 and this will give us further insights into e commerce and also exposure to an attractive customer base.
Driving customer growth, that is key to every retailer. And for us, the physical stores the most important arena. But when the stores closed, we're forced to close during the pandemic now, something happened. The store closures has escalated e commerce growth, but it's still from a very small base. We have seen growth in all product categories, but the best sellers are the high ticket items like seasonal products, especially garden furniture one of our best sellers online.
E commerce sales grew by 3 17% in the quarter, but it still only reached 0.9% of total chain sales. It's fair to say that the e commerce solutions of Auropis been slightly stress tested during the quarter, and we have discovered some room for improvement that are being addressed at the moment. On the ECRM side, we have launched a new search engine in the quarter, and we continue to expand the membership base in our customer club. We have made a few of our regular multi buy offers into fixed MIR customer club benefits. That is done in order to drive recruitment of customers and ultimately made them more loyal as well.
The same offers has been introduced to our business to business customers with great success, and we have seen that we are growing the number of business to business Smurfs as well during the Q1. On these multi buy offers, we have also used those like you see on the picture. We've done that on sustainable products to promote sales of those articles as well. That has also been quite successful. Still the physical stores are key to Auropolis.
And during this quarter, we have opened 1 new store that was in Volin Hordalan, a very successful store opening, dedicated staff and delivered the sales well beyond our expectations. We also done a store relocation at the Volksburg in Agder, also very successful. And it was a good store before an even better with the new location and also sales beating expectations by a significant margin. Every year, we do an analysis of our latest vintages of stores and do a post calculation of the performance. And we can confirm that the latest vintages of new stores, they continue to deliver on their very strict investment criteria.
And we see the same pattern as in the past. The stores use 4 to 5 years to mature. And in this period, the growth is higher than the average chain. And after the 5th year, they are more in line with the chain average. Okay.
It's time to summarize. Q1 is always difficult to compare when you the timing of Easter. And this year, it's even more complicated due to the COVID-nineteen effects. But actually today, we are more comparable year to date. And as expected, sales in April has been negatively impacted by timing of Easter and also the temporary store closures.
As of 27th April, we had sales growth of 5.5% in the chain. And for year to date, on average, 13% of our stores has been closed. 19 stores are closed as of today, but we what we see is that the open stores, they continue to perform very well. We are well prepared for the springsummer season. And as you can see, the garden Estevil has already started in the Ouropis stores.
And I can tell you that the Norwegians, they are actually preparing quite well for a staycation summer also this year. I think the market fundamentals are favorable for our rupees. We are a very strong national chain when it comes to sourcing, logistics and marketing. But when it comes to execution, we have 267 highly adaptable stores, local shops in their local communities with very dedicated staff. And the strong culture we've seen and the remarkable efforts that has been put in over the last 12 months by our store staff is amazing, and it's something that you can't easy copy.
And we are really looking forward to the coming months with strong comparable figures. And the long term financial ambitions, they remain unchanged. With that, we leave it up for questions. And Trina, you will manage that session.
Yes, I'll do. The first question comes from Knutar Last year, onefour of increase in footsteps was from new customers, and customer club members rose significantly. Have. Basket, new customers and existing customers.
What we can say is that the sales increase is mainly driven by basket increase this year, and this is driven by the sales mix. We've seen higher share of seasonal items with higher price points. It's been a good winter season and also a good start to the spring summer season. So that is driving the average ticket up. So the main increase in sales coming from the basket, but we also have an increase in the number of customers.
It's very difficult. There are so many things disturbing the picture, so doing exact analysis on the customer base in a quarter where you had major store closures and the timing effects of Easter, it's really hard. So I think you need a little bit more time. It should be better to do those kind of analysis when you have the first 12, 6 months at least of the year.
Lars Bjerke asked when do Do you expect that the OBEA transaction will be completed? And is there a risk that you'll move away from the transaction due to 2019 financial disagreement.
Honestly, I think this doesn't give the time line of the OIB has been pushed touched so many times, so I don't have any expectations left on when it will happen. We disagree on the 2019 financial, and that is fair. And we just have to settle those questions. We are not in a hurry. So let's wait and see.
But obviously, the decision will not be taken until towards the end of this year at the earliest. So and as always, it's an option. It's not something we have to do. And of course, there might be that we do not sized the option. That has always been the case.
For now, there's no more questions. So We just wait and there was another question. This question comes from Markus Heiberg. Can you please elaborate on how How we should think about the gross margin impact of hedges now going forward without adjusting for unrealized hedges.
I think, Sklina, this one is for you.
Yes. I think it's you will get the number as before, but we will not adjust the margin. This is according to IFRS booking. And so I think it's no change in how you should think about the margin. You have the number, so you can easily see the margin both with and without this effect.
And Ole Martin Visker asks, what is the isolated sales trend for April? Has there been any supplier delivery interruptions? Are all goods on track for summer season?
That was as normal, at least 3 questions in one. Yes, I can confirm that we have all goods on track for a delivery for the springsummer season, and we have plentiful stocks, and we are ready to serve the market. So no delays recorded from our side. When it comes to the question again was the
The supplier delivery interruptions.
No. And the first the first question.
Sorry, I was on the next question. What is the isolated sales trend for April?
Yes, and that is, of course, very negative. As I said, we had 24% growth at the end of the quarter. And then by 20 7th April, you have 5.5%. So obviously, it's very negative. But I think you should look at this.
I like we've always said, first half year look at that as one period when you have differences in the timing of Easter. So I think by 27th April, that is actually quite good benchmark. We had 5.5% growth year to date with 13% of the store base closed on average.
Eirik Raffdal has a couple of questions, too. Could you please give some color on price hikes over the past months?
Auropis, we follow the market. We should be is he talking about the sales prices or purchase prices or
Price hikes.
Price hikes, yes. In our market, we follow the we continually monitor our competitors, and we should be competitive on the price, and we are. But of course, we have lifted some prices due to the market prices are going up. We've seen over the last couple of some raw material price increases, and that is lifting some of the purchase prices, but also it's balanced out by the stronger some currency. So we do not expect any significant changes in the coming months.
And another one. Turkmeni discussed potential Nordic consolidation at its CMD some weeks ago. Could Turkmeni and Auropis be a good match in your view? And how should one thing about the potential Toqmani, Arupis and OIB combination.
Well, the 3 companies are sourcing together, like we have explained. So the sourcing partnership works very well, and we will continue to do that.
And Petter Nystrom has a question. Are you comfortable with your inventory situation to meet expected For 2021.
Yes, we are. We have sufficient stock when it comes to garden and summer season. So we are I think we're all set for a good summer.
That was the last question.
Then thank you, and enjoy the rest of the day.