Okay. Welcome to the presentation of the Europris quarterly one results. Of course, as usual, we don't have a lottery today, unfortunately. Lottery had some complaints. They didn't. We have a goodie bag, and since it's springtime, we thought that we should give you something that you can use for spring. A cushion to sit on. Some disposable products. Some of you already see some of it. This is plates from Areca tree in India. Hand pressed for the leaves that falls down on the ground, and then it's pressed into these plates. It's an affordable, sustainable product. We think that sustainability is important and actually even more important as a discount variety retailer to have sustainable products, because, of course, we are for most people.
If we have affordable sustainable products, we can actually offer it to everybody instead of the full price chains where the sustainability is very expensive and only for the people with unlimited budget. You will see in the Europris stores in the years to come, more sustainable alternatives. It's good for the environment, it's good for the customers, but it's also good for you shareholders because, of course, it creates category growth. Take some of these products and test it out and give us some feedback afterwards if you like them. We have also bribed you with a little bit of chocolates. My favorite, salty caramel. It's even better than the pet food I ate last time. I can encourage it. Very good. The last thing on the sales pitch is that I encourage you to look at this garden furniture brochure. It's best ever.
This is the assortment for the season we're into now. Of course, it's 20 degrees outside, so spring season has come. We have a fantastic selection this year, and you will hopefully, if you compare it to the last year's magazine, you will see that we are always developing, always becoming a little bit better on the seasonal assortment. That is one of the key drivers behind our sales growth in the last six months. Bring a copy. Okay, the key message for us to Yes, the key message today is that, in this quarter, we delivered on what is maybe the most important thing in retail at the moment, which is sales growth. You will not see it in the quarterly figures, of course, because Easter was in Q1 last year and in Q2 this year. Really we should report quarterly figures.
As we have provided to you in the report, you can see that after Easter, we see that the like-for-like sales growth is up at mid-single digit, which I think will be to a huge gap to the market. We are very satisfied with the sales growth at the moment, and I think it continues the trend from before Christmas, where we see that we are really focused a lot on category development initiatives, optimizing the space in the stores, and focusing on the direct mail and the front page products, and that is really paying off. Very happy with what is the headache of most other retailers at the moment, which is top line growth. Gross margin is okay, and there are some plus and minuses as always, but they are roughly okay. On the cost side, we are not completely happy.
They are temporary and I just want to come back to and explain more about it. In retail, I said it to you before, I think the magic in retail is sales growth. All the other things you can fix as long as you work hard and smart. At the moment, we have a really good growth on the top line. Very happy with that. Excuse me. Yeah. Let's see. There we are. The highlights, strong top line growth. As I said, roughly 5%. Easter is really important. We'd rather have Easter than more sales days because the sales days just up until Easter is really good. The comparable figure is mid-single digit, which we are extremely happy with. Stable gross margin, OpEx affected by this increased cost due to the fact that our old warehouse system is completely full at the moment.
It's the worst possible time to have too many products. We started off also the first Europris City concept that we showed you in the film before the presentation. We think that's an exciting test. The first results from Gunerius is very promising, and we think that we will roll out more stores if we get the right offers from our landlords. That's also a very exciting, in the big cities, within the Ring 2 in Oslo, it's not so easy to find 1,200 sq m selling area with 50 parking spaces outside. We have to look at smaller locations. If the traffic is good enough, as it is in Gunerius, it becomes really good for us. The new warehouse is on schedule, and it's on time and cost so far.
On the 6th of May at 07:00 A.M., the first lorries are going and moving, and it will be one of the biggest moving operations in, I think, Norwegian history. It's an important phase for us and period in May. Yeah. That's an exciting times. As you said, if you look at the quarter, which is really not, doesn't make any sense. We beat the market on total growth, in the quarter, it doesn't really make sense. You have to look at it after Easter. After Easter, we didn't beat the market, we crushed the market in terms of like-for-like growth. We were far above the market. The good thing is that if you look at the underlying things of the growth, it's customer growth that is driving sales growth.
Also a little bit increase in items while prices are fairly stable, actually. It's very solid. If you want to have growth, you want to have customer growth, you want to have item growth, and this is very solid growth. There's no price increases in Q1. The key reasons why we do it or achieving it is one thing is a lot of the category things we are doing. I will explain more about it later. Also the things we talked about before, that we are centralizing more control of the space to optimize the use of the space in the peak periods. We see it time and time again that in the seasonal peaks and in the transition to new seasons, it's really important to have a centralized control of the spacing in the store.
We see it time and time again that this really pays off. It's a very good payoff on that efforts. Also we've done a lot of focus on the fact that if we invite the customers to a party every week, we want to make sure that the stores have enough of the front page product so that you as a customer are not disappointed when you come to the store. That is putting some pressure on the gross margin, but we are compensating with other things. It's good for sales and it's also very good for customer loyalty and price perception. We see that customers, the price perception of Europris is really influenced by these weekly offers. It's good for sales and it's good for loyalty and it's good for price perception. Really happy with that too.
As I said, these quarterly figures, it doesn't make any sense. On like-for-like in the first quarter, we are roughly in line with the market, but we are a seasonal concept, and once the Easter was over, we're up here at five and the market will be around zero. It means that I think I've never seen such a gap except for in Q4 to the market. Market is tough, but we are doing better than ever. That's very happy with that. The long-term vision remains, we talked about it at the Capital Markets Day in December. The long-term vision is to be the best, not necessarily the biggest, but the best discount variety retailer in Europe and put the bar at that level for all the things we do. Of course, we're not there today. In some areas, we are far ahead.
In other areas, we have a long way to go. I think it's exciting times, and I said it before, I think it has never been so exciting to work in retail as it is now, because I think that turbulent times are also opportunities, and also technology gives us opportunities that we didn't have before. I think that being in discount variety retail, which is the golden segment of retail at the moment, is good, and of course, with the opportunities that technology gives us now, it's even better. Handyman is just an example of what we mean when we say category development. In February, we launched or relaunched, we did some new planograms and spacing in the Handyman section, focusing more on some bestseller volume products with higher margin, giving them more space and taking out some of the marginal products.
Really good results from that. There's quite a major rehaul of that shop-in-shop. It's just one example of how we've been working. We've been working for 12 months from everything from the assortment, category plans, packaging, how we're going to use it in campaigns, and then all the way through to the spacing and the planograms in the stores. Just one example of an area where a lot of things have happened. Another area is in health products, health and nutritional products. Very low cost way of doing it, and also in accessories, which is a category that has really been lacking in performance in the Europris stores. It's getting much better now with a new concept, easy to manage and roll out in this quarter. That's just some example of category development initiatives we do.
There are more to come. I'm pleased to say that in the coming years, I think you will see more from us. I think there's a lot of areas where we haven't done good enough before in the home and kitchen area, home and interior, in the kitchen product in particular. You will see more category development coming from us in the next, maybe not necessarily in the next quarter, but it will be in the next few years. We talked about the Europris City concept. It's almost a third of the size of a normal Europris store, so it's really challenging to try to put in the assortment. We have, of course, cut quite drastically on the fringes of the assortment and focused on volume product, disposable, consumables products.
Really good reception. Of course, we need to test it in other markets before we conclude on what's the total market potential. Really happy with that. Of course, it is an example of the omni-channel experience where you can buy garden furniture at Gunerius, but you just have to do it on the terminals, and then you can either send it home to you or pick it up in the store. We have one store expansion in the quarter, one new store at Gunerius. Altogether, we have six new stores lined up for this year. Four is coming now in Q2, so we will be almost finished with the new stores this year after Q2. We have a healthy pipeline of new stores, but as I have said to you before, we are not going to open stores just for opening stores.
We are only going to open stores if it is a very solid case. Every year, we go back and we do an audit on the previous vintages to make sure that they are profitable and that they are meeting our tough expectations. The warehouse we talked about before, we are today definitely not 100% efficient. I don't think we are much worse than many others, but we are definitely not efficient. We're going to move in a few months in phase 1, and then in phase 2, which is taking place next year, we'll do part automation that we talked about at the Capital Markets Day in December. It will actually, in 18 to 24 months, it will take us from what I would call average to leading best practice in Europe, actually, in discount variety retail sector.
Of course, there are other sectors who have also done this. We are not the first in the world to do it. In the discount variety retail sector in 2021, we will be quite unique in terms of the level of automation and efficiency in our distribution system. Of course, that's important because we are a discount variety retailer, so we have to be efficient. There is a transition period that we talked about. We also have some more information in the appendix today so that the analysts can look at the figures and estimates and investments and all that stuff. There will be a transition period for the next 18 months, obviously. We will do it in 3 phases. Phase 1 is in May this year.
Big move, taking over the low-rise part of the new warehouse, the 12-meter high, 45,000 sq m part. Next year, next spring, we will open the high bay, the fully automated part of the building. Towards the end of 2020, early 2021, we will be operational in the part automation of the picking. Three stages. Exciting times, and I think it's very important for us long term, because as I said, as a discount variety retailer, we need to be efficient in buying, in production, all the way through to the stores. With that, I think I'll hand over to Espen.
Thank you. In the financial review this time, you will see that implementation of IFRS 16 leases has a significant impact on the figures. All figures that are coming through in the first quarter are fully in line with the guidance we have previously given, both at the Capital Markets Day and also at the fourth quarter presentation. IFRS 16 has a huge impact on the balance sheet. It has no cash effect and only a limited effect on the net profit. Starting off with the gross margin. The gross margin was 41.4% in the first quarter, compared to 41.2% last year, a slight increase. The timing of Easter impacts the gross margin as well, as Easter means that we sell a lot of lowest margin seasonal products. It should be expected that margin was slightly up this quarter.
We have a negative effect of the change in the sugar tax. The increase in the sugar tax last year meant that we had a profit of NOK 12 million, of which NOK 5 million was booked in the first quarter. This year, the sugar tax was reduced, and we had a negative impact of NOK 8 million, of which the full impact has been booked in the first quarter. When you compare the two quarters, there's a difference of NOK 13 million on the gross profit due to the change in the sugar tax. On operating expenses, that was 31.3% in percent of sales compared to 37.3% last year. Here, the IFRS 16 effect is quite significant, NOK 102 million in operating expenses. Adjusted for the IFRS 16 effect, the operating expense ratio was 39.5%, up from 37.3% last year.
Of course, having more directly operated stores in a small revenue quarter, that is negative for a retailer, and we have increased the directly operated store base by 6.2% from last year. As Pål said, the high fill rate we experienced at the central warehouse has a negative impact on the operating expenses. It totals to NOK 11 million in the first quarter, and it was also NOK 8 million in the fourth quarter of last year. We have seen that we have early arrival of summer seasonal products in combination with the late Easter, but we also have too much of base range inventory in some categories at the warehouse. This causes us to spend more third-party handling. We can't handle all the goods ourselves, and we need to rent more containers, and we also spend some more man-hours to maneuver the goods.
It's an inefficient operation at the moment. We have taken corrective actions, solving this issue will take three to six months. We also expect that there will be additional costs in the second quarter amounting to around NOK 15 million, and in the third quarter, we also expect additional costs in the range of NOK 5 million-NOK 10 million due to this situation. Looking at EBITDA, that was NOK 125 million in the quarter compared to NOK 46 million last year. Here we have the same NOK 102 million effect as we have on the operating expenses. Adjusted for IFRS 16 effect, the EBITDA was NOK 23 million. The EBITDA this quarter is impacted by timing effects and one-offs of around NOK 35 million in total. It's the timing of Easter that is very important to see when it comes to both sales and profits in the first quarter.
We will not be comparable until end of first half year. We have the change in the sugar tax and also the increased operating expenses following the high fill rate at the central warehouse. On cash flow, the line items are impacted by implementation of IFRS 16, bottom line, it has no cash effect. We see that we have a negative development in cash flow this quarter, which is larger than what we saw last year, and that is due to the change we have in working capital, and that is due to more inventory at the central warehouse. That, of course, impacts the cash flow, the increase in inventory, and also the operating expenses. Still, we have not used our liquidity reserves, and we have significant headroom when it comes to banks and the covenant calculations.
IFRS 16 has also no impact on the bank agreements and how we calculate the covenants. Pål, it's up to you to summarize.
Okay. As I said, I think that the most important thing in retail at the moment is growing, and we are growing, and we're doing it in a very solid way with customer growth and item growth. That's very, very happy with that. Lot of initiatives going on in the organization, we still have a lot we can do even better. Short term, as Espen said, the results are impacted by these extra temporary costs in the central warehouse. Longer term, I think we're very much well positioned to continue our leading role, not just in Norway, but also in the Nordics. The relationship and the cooperation with ÖoB that we haven't talked about in this quarter is also progressing well. It's sort of a very good development there in the joint venture. I think we are well positioned in the Nordic market.
Very, very happy with that. There are some new stores and there are some franchise takeovers. It happens every quarter. As I said, I'm overall very, very pleased with the development in the quarter. With that, I think we will open up for questions. [Tina]?
Thank you. Preben Rasch-Olsen, Carnegie. Just one quick one. The old premises, the old warehouses in Fredrikstad, have you started working on trying to re-rent them, especially the large one? Any interest?
We have started this and add out already, and we starting working on prospects, it will probably be available in early 2021, it's only one year and a few months left of the lease. Still a little bit early. In that kind of market, most of the decisions are taken closer to the date. We are actively looking at it together with the landlord who is also obviously concerned about what's going to happen after we move out. For us, it's one issue, it's a little bit more than a year, but for the landlord, it's of course, even more important. More questions? Good. Now.
Thanks. Oliver Nordea.
Does it work?
It works.
It works.
Very good.
Sounds like it. I think I saw that you paid less for the ÖoB transaction than you had expected, as ÖoB seemed to have not met the budget that you set out or that they set out by Q2 2018. Could you elaborate a bit on that?
Yeah, it's a mathematical calculation of the sales price based on their EBITDA. It's a multiple of 7.7. They had a very ambitious budget. They've actually doubled their EBITDA from 2017 to 2018. They actually planned to triple it, but they managed to double it, which we believe is good. You always had some really ambitious targets. We are not surprised that it maybe didn't end exactly on the business plan, but we are happy with the development. It's going in the right direction.
Thanks.
More questions? At the back.
Good morning. Carl Iversen from Arctic. One of the things I was missing in this presentation was an update on the e-commerce division you have and especially the click and collect offering. How is that going?
The click and collect is going well, the big season for click and collect is actually starting in Q2. Yeah. During Easter, people were very busy when the store was closed. People were busy using click and collect, actually. The high season is really now from April until September, October, and then Christmas again. The first quarter is a low season for click and collect. The figures are small, that's why we didn't report on it.
Okay. You have sort of a run rate growth figure.
Yeah.
Which you could share?
Normally, they don't disclose the run rate figure.
It's still very small figures. We still talk about less than half a percent point of total sales, so it's really close to meaningless to give percentages on that.
Percentage of nothing, almost.
Yeah. It doesn't really add any value to give you those kind of figures.
It only sounds impressive.
Okay. Thank you.
Okay, more questions? No, any questions from the web? No questions? Didn't wake up this morning? Okay. Thank you for coming. Make sure that you take a goodie bag on the way out, and make sure that you bring one of those garden furniture brochures and all the other stuff so that you can make sure that that fantastic sales growth is continuing in Q2. Thank you.