Thank you, good morning, all. Welcome to our Q4 presentation. Let's just jump right into it and go to the first slide. The key highlights. Just to mention that, you know, over the last two years, our Nordic department store model has gained speed and momentum, especially in 2021. I believe that we've taken some important steps to further accelerate this development. At least being more vocal externally to the investor community about our department store mission. Looking ahead over the next years, we will continue to launch several initiatives to further cement this position with the consumers of Nordic fashion and lifestyle, both through our marketing efforts online as well as offline, and also through strengthening our categories even further.
We can see that the consumers have already embraced the model, and if we look at the growth rates of our categories last year, I believe that the numbers speak for themselves. We have above average growth rates, and especially the Kids and Home category, they stand out. Our efforts have also contributed to an impressive growth in our active customer base with more than 500,000 more active customers, totaling around 3 million active customers across boozt.com and Booztlet. We also see that the value proposition of our business model is becoming increasingly attractive to brands, and we're actually extremely proud to welcome LEGO as a brand partner from 2022.
Just the fact that we can attract one of the world's best-known and loved brands is a further testament or proof that we are continuing our journey to become the preferred destination for Nordic fashion and lifestyle products, and that the categories are becoming destinations on their own. This actually reminds me a bit about when we signed Ralph Lauren back in 2013, I believe. Once we had signed them, the other fashion brands stopped having any reservations about Boozt as a partner, and I expect that the same will happen to the Kids category. Growth in the fourth quarter came in strong at 30.1% compared to 2020, and with almost a doubling of net revenue since 2019 growing at 87.5%.
Performance was ahead of expectations in all three months of the quarter, and we managed to deliver a solid performance in terms of growth as well as customer service throughout the peak of Black Week. For the full year, we managed growth of 33.4%, coming in ahead of our outlook for 2021. This was due to the better than expected performance in the fourth quarter. As an organization, we are proud to see an acceleration from 2020 despite the unique circumstances that affected the market during the early days of the pandemic. An important part of this accelerated growth in 2021 is the 2020 cohorts continuing to display the same buying patterns as the older cohorts, along with our strong ability to acquire new customers at an increased pace.
Both business segments delivered solid growth in the quarter with boozt.com continuing the very strong performance seen in the past quarters. For Booztlet, the quarter saw an acceleration from a slowdown in the third quarter with 52.3% growth and an impressive 239% growth since 2019. If we look at the flow of the spring/summer goods to our fulfillment center, it's running according to plan. We don't see any meaningful delays, and I believe that we've positioned ourselves well for strong growth with our very confident up-front buying for the first half of 2022. We have also continued to push for further capacity increases in our DC.
The build-out of the next AutoStore phase is initiated, and we expect it to be operational in steps from March to May this year. The fact that we're growing much faster than we expected has put a hard pressure on us to accommodate that growth by accelerating investments into our warehouse infrastructure. Basically, we need to stay well ahead of the curve. Sandra will provide more information later in the presentation in terms of our expected CapEx for 2022 and what net revenue capacity these investments will enable us to have. Moving on to the next slide, the most important KPIs, customer satisfaction.
If we look back at the year, which was a year where we're very challenged on capacity and also in certain periods on delivery speed, it's very good to see that we succeeded in keeping customers happy. We even improved on the high historical levels. During the quarter, we have maintained our five-star rating at Trustpilot, and we managed actually to deliver an NPS at unprecedented levels last year. This has been the key to our growth in the past, and this is also the key to our future growth. Customers who like our selection, convenience, and price and who are willing to recommend us to others.
If we go to the next slide, order development, we can see that we've increased the number of orders with 26% in the fourth quarter and on a two-year stack, we are up 66.7% at boozt.com. Back in 2016, which was the first year where we published official numbers, we handled approximately 1.8 million orders for the full year. Five years down the line, we had more orders in a single quarter with close to 2 million in the fourth quarter of 2021. This is something that we are really proud of. Year-to-date, we're up 25% and 50% on a two years back. The average order value has also developed strongly in fourth quarter and is up more than 2% compared to last year.
The full year number is up compared to both 2020 and 2019. I think it's worth mentioning here that both Q4 2020 and Q4 2021 had approximately 4% currency headwind versus 2019. In general, we believe that our department store strategy will support a sustainable high average order value. This is, we believe, the key to deliver best-in-class profitability. Moving on to the next slide. Cohort development. We continue to grow our base of active customers on boozt.com in the third quarter. In the fourth quarter, we had 29% more active customers compared to last year and 56% more than 2019.
At the same time, our number of orders for active customers was slightly up compared to last year, but still slightly down compared to 2019. This is basically as expected as the individual person spent overall less on fashion apparel during the pandemic, but many more bought online. True frequency, which we also look quite close on always, has recovered since last quarter and we're on par with previous years. It's still encouraging to see that the cohorts of 2020, which for some parts were basically forced online, continue to behave in line with what we've seen from previous years. This also tells us that the changed buying habits during 24 months of COVID, meaning higher online penetration, probably will stay. Moving on to the next slide. The department store strategy.
We are very excited to share some more insight into the development of our business and execution of our department store strategy. To keep it short, the department store strategy is working. Our category mix has changed significantly over the last two years. Our Fashion category with women and men combined is 17 percentage points down versus 2019. The women's category on its own is in the very low 40s, which is just great as our business risk is dramatically reduced. It actually provides some kind of financial hedging for us versus transient trends, as well as changes in buying patterns, like what we saw during the pandemic lockdowns. We can conclude that the diversification of our business has benefited the return of the group and ultimately profitability.
The main driver of this development is the increased focus on developing our distinct categories to become destinations by themselves through increased width and depth of the selection. On top of this product diversification, we see also a steadily increasing average basket size in connection with customers adopting the department store model by shopping across categories. In 2021, more than 40% of our orders contained two or more categories, a number that has also increased steadily over the last years. What we also see is that when customers place orders with multiple items across categories, the basket size is higher, and so is profitability.
You might say that we've been working on this for almost 11 years now, and backed by these strong data points, we will work even harder on building the leading Nordic department store in the years to come. Moving on to the next slide on the Nordic department store. As the headline indicates, we are very strong believers that the Nordic department store model at scale provides a clear differentiating factor towards our largest peers in the industry in terms of long-term profitability potential. On average, our basket size is 78% higher than the average of our international peers. Due to difference in business models, with some focusing on marketplaces or partner programs and some on selling private labels or own brands, our peers typically have a higher gross margin percentage. However, ultimately, it's the absolute margin that matters.
If we compare against the same peers, our absolute gross margin, be it in euros or kronas, is still 58% higher than our peers. This is where the profits are. Which leads me to the financials and Sandra Gadd, who will go through the financial performance. Over to you, Sandra.
Thank you. If we look at the group results, we managed to grow net revenue with 38.1% in the fourth quarter. For the full year of 2021, net revenue growth was 33.4%, while growth in local currencies was 35%. Return rates remained low during the fourth quarter and benefited from the continued diversification of sales. Compared to last year, the return rate was around 3 percentage points lower for the full year. Compared to 2019, return rates are approximately 9 percentage points lower in 2021. For our biggest categories, the women's and men's, the growth rates increased throughout the quarter. Demand in these categories strengthened as restrictions were limited for the first two months of the quarter in most Nordic countries.
The Kids, Sports, Beauty, and Home categories continued the outstanding performance and delivered strong revenue growth throughout the quarter and further diversified our sales to the benefit of a lower sustainable return rate for the group. For the full year, Denmark and Norway were the strongest growing countries in our Nordic markets. Growth in rest of Europe continued the positive trend from last quarter, and we have seen an acceleration in the second half of the year. The gross margin came in solid at 41% in the fourth quarter. Compared to 2020 and 2019, it was roughly 2 percentage points lower because of a change in inventory mix towards more up-front buys to be able to accommodate continued high growth. The sell-through of the autumn/winter inventory materialized slightly better than expected, freeing up storage capacity for the next season.
For the full year, the growth margin was on par with 2020 and up around 0.7 percentage points compared to 2019. A significant achievement considering less availability of campaign buys. Going forward, growth margin is expected in the level of 39%-40%, depending on campaign activity and competitive pressure. The adjusted EBIT margin was 7.6% in the fourth quarter, a decrease of 2.3 percentage points compared to last year. Compared to 2019, the adjusted EBIT margin is down 2.2 percentage points. For the full year, the adjusted EBIT margin was 5.9%, a decrease of 0.8 percentage points since last year. Compared to 2019, the adjusted EBIT margin improved with 2.7 percentage points, displaying the clear scale advantages that we have achieved over the last 24 months.
We're very satisfied with the level of profitability in 2021, considering that the growth have accelerated further and along with the investments that we have made in infrastructure and people. If we move to the next page, we can see that the revenue growth for boozt.com was 36.1% in fourth quarter compared to 2020 and 75% compared to 2019. Impact from FX was more or less neutral in the quarter. Growth for the full year accelerated considerably to 30.6% compared to 19.5% in 2020, mainly driven by an exceptional performance in our categories. The continued execution of our department store strategy with a higher share of Kids, sports, beauty, and home continues to result in lower return rates, which has a positive impact on the average order value.
Our average order value increased to SEK 837 from SEK 819 last year, partly driven by sales, higher sales of occasion wear. The adjusted EBIT margin for the year was on par with 2020 and was supported by the acceleration in growth, but partly offset by our continued investments. If we move on to the next slide. Booztlet grew 52.3% in the quarter, a significant improvement compared to the third quarter. Measuring on a two-year stack, we have managed to deliver growth of 239% compared to 2019, amounting to a compounded annual growth rate of 84%. Growth was solid through all, throughout all geographical markets.
Our average order value increased to an outstanding SEK 723, an increase of 12.9% compared to last year, with consumers continuing to add more items in each basket. For the full year, the average order value also improved, providing a strong foundation for future profitability. The adjusted EBIT margin was 3.3% in the quarter and 4.4% for the full year. Profitability was mainly impacted by a lower product margin because of less availability of campaign goods. In addition, we have increased investments into offline marketing to further build the Boozt brand, as well as strengthening the organizational setup. Moving on to the next page, we see the development in the cost ratios for the fourth quarter. The fulfillment cost ratio was 12.1%, an increase of 1.1 percentage points in the quarter.
The continued high growth provides certain operational challenges for our operations, which impacted the cost ratio negatively due to the need of additional workforce to handle more processes manually. We don't see these challenges as structural, and we believe that they are best described as growing pains. The lower productivity was partly offset by lower cost per hour for personnel working in the fulfillment center, along with a lower return rate. The lower cost per hour for personnel is an effect of the insourcing of personnel in January 2021. Our personnel in the BFC previously worked for a third-party provider. Year- to- date, fulfillment costs were in line with last year at 11.8%. Going forward, as e-com growth and online penetration continues at a high pace, it is likely that fulfillment costs will be around 12%.
Looking further ahead, we do expect the fulfillment cost ratio to come down as processes become more automated and investments more linear at a lower growth rate. The 40% capacity expansion of our automated storage and goods-to-person solution that was operational from the third quarter of 2021 provided capacity to successfully handle the peak season during the fourth quarter. The marketing cost ratio was 10.2% for the fourth quarter and 10.5% for the full year. The increase for the full year compared to 2020 was expected as last year's marketing spend was impacted positively by lower cost of marketing services at the outbreak of the pandemic due to the extraordinary increase in eyeballs and high conversion rates.
Historically, our marketing spend has been around 10% on a full year basis, and this is also what to expect in the immediate future. The adjusted admin and other cost ratio decreased with 0.9 percentage points in the quarter to 8.8%. In 2020, the adjusted admin and other cost ratio was impacted by discretionary bonus of total SEK 10 million, corresponding to 20,000 per employee during the fourth quarter, as well as the write down of a part of the Norwegian customs receivable of around SEK 12 million. For the full year, the adjusted admin and other cost ratio was 9.4%, a decrease of 0.1% this time.
We continue to invest to strengthen our organization, and the cost of personnel increased with 0.2 percentage points compared to last year, and that was partly offset by the strong growth in net revenue. The adjusted depreciation cost ratio increased with 0.1 percentage points to 2.4% in the quarter. For the full year, depreciation was on par with last year. As we will continue investing to secure more capacity in our fulfillment center, we expect this ratio to increase at its current growth rates, and we estimate that the ratio should be around 3%-3.5% on a full year basis. If we move on to the next page, we see that net working capital increased from 1.7% to 4.8% of last twelve months net revenue.
The increase compared to last year is mainly due to larger upfront investments in inventory for the fourth quarter of 2021 as well as for the first quarter of 2022 to secure stock for continued high growth coming into the new year. Towards the end of 2020, we were low on inventory, which basically meant that we had to pass on growth opportunities. Compared to 2019, the ratio is down 5.2 percentage points, and this benchmark is more relevant due to the relative size of upfront buys ahead of the ABC. We believe that the current level is healthy, given our focus to hold a strong and attractive selection of inventory for our customers and the ability to continue to grow at high growth rates.
Moving on to CapEx, that totaled SEK 76 million in the quarter, whereof SEK 26.2 million is related to intangible development costs. The level of intangible development CapEx increased as we continue to invest in our own developed IT infrastructure to support the rapid growth and continued ability to scale. Investments in the warehouse automation of SEK 294 million is related to the continued expansion of AutoStore and the surrounding facilities, to increase capacity and strengthen productivity. The free cash flow for the fourth quarter was positive with SEK 327.2 million. That is to be compared to a positive SEK 25.9 million last year, mainly impacted by the changes in working capital.
For the full year, free cash flow was negative with SEK 365.1 million compared to a positive inflow in 2020 of SEK 596.5 million. The outflow in 2021 is partly related to the acquisition of Rosemunde and Svea, totaling SEK 232 million. In addition, the increased investments into further capacity and automation for our fulfillment operations totaled SEK 294 million to support our growth ambitions. If we move on to the next page. The last two years, we have managed to grow significantly faster than anticipated and providing us with the challenge of having readily available capacity. During this period, the organization has gone above and beyond to find temporary solutions to limit the effects of the tight capacity.
As I mentioned earlier, this has taken a toll on our productivity, but most importantly, we have made sure to deliver competitive and convenient service to our customers. Because of the focus of getting ahead of the curve in terms of capacity and productivity, we have decided to move forward additional investments in our fulfillment operations to continue our growth trajectory and market share. During the first half of 2020, we will invest further in AutoStore capacity, internally referred to as Phase 7.1. In addition, we will secure further capacity with an installation in the second half of 2022, Phase 7.2. Along with an increase of our warehouse footprint of 14,000 sq m at our local campus in Ängelholm, we expect these investments to enable storage capacity serving net revenues in the level of SEK 9 billion-SEK 10 billion, depending on product mix.
The increased investment will total a capital expenditure in the range of SEK 500 million-SEK 600 million for 2022. This includes investments in intangibles, mainly software, of around SEK 100 million. This concludes the financial update, and I would now like to hand back to Hermann for an update on the outlook for 2022.
Thank you, Sandra. Please move on to the next slide for the outlook for 2022. Coming into 2022 on the back of two exceptional years, not least in terms of growth, we have set ourselves what we see as an ambitious target. We want to continue to take significant market share, and we expect net revenue growth in the level of 20%-25%.
This means that we expect to deliver between SEK 1.2 billion and SEK 1.4 billion more in net revenue in 2022 compared to 2021. In terms of profitability, we set out to deliver adjusted EBIT in the level of SEK 265 million to SEK 325 million, indicating a margin between 5% and 6% depending on growth opportunities and promotional activities in the markets we operate. This is within our midterm ambitions of an adjusted EBIT of between 5% and 7%. As we've said before, adjusted EBIT will be close to 5% and 7% when we are growing considerably faster than the market. Finally, we confirm the medium-term plans ambitions which remain unchanged.
This concludes our presentation, and I would now like to hand over to the operator to get the Q&A session underway.
Thank you. Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press zero and one on your telephone keypad. The first question we've received is from Niklas Ekman, Carnegie. The line is now open. Please go ahead.
Thank you. Yes, a couple of questions, if I may. Firstly, is there anything you can say about the current trading development? If we look at statistics, they seem to be quite weak in January, but now restrictions are going away, so I assume February is off to a much stronger start. Is that kind of a similar trend that you're seeing as well?
Yeah. Hi, Niklas. We don't want to comment on current trading, and I think that's kind of what our guidance is kind of indicating what we are seeing. So it's early, basically the start of the year, so we think it's early. We don't really like to comment on trading other than we are confident in our guidance.
Okay. Fair enough. Let's put it differently. If you look at the, there's been a lot of talk about pent-up demand as, kind of the COVID effect, fades. We didn't really see much of this during the autumn. Are you more optimistic now going into spring that, demand for fashion is going to pick up significantly? Or do you think that there's a kind of a structural change, regarding the demand for fashion?
To be honest, I kind of think it's very. I can't say because I think I've you know two times or as Sandra said, now it's over and now it's coming, so it's like restriction eased or went away in Sweden yesterday, Denmark last week. Now in Finland, I believe in the coming 10 days. So, of course, you know pent-up demand should materialize. With inflation pressure, with tensions in Ukraine, you never know. Luckily, we're not so dependent on people buying occasional wear because we see our categories taking the shares. It would be nice, but our guidance is not depending on this huge pent-up demand to materialize.
On the topic of occasional wear, I mean, you have obviously benefited from selling much less of occasional wear. Do you see a risk that your gross margin will trend a lot lower when you see a return to more occasional wear or your EBIT margin? I know you talk about kind of the department store structure and how this is structural. Looking as things normalize here, do you see any risk of margin pressure from this?
I think the good thing is that now with especially with the women's category, which is where you typically have the high return and then dresses, it's just becoming a much smaller part of the business than it was before. Plus our Fair Use policy has also actually reduced our returns quite dramatically. So we don't expect to see return levels as we saw pre-pandemic. As Sandra said, you know, return rate being down 9 percentage points, there might be a slight increase, but not material. So we are actually quite confident that with the department store model, with our Fair Use policy, with better guidance of customers, that we'll manage to keep return rates fairly low compared to what we saw pre-pandemic.
Very good. Thank you. I'm curious. You mentioned LEGO here and expansion into the toys category. How significant an effort is this? Are you looking to expand your range to be kind of in line with what you find at toy specialists, or is this more just an adjacent category with a limited assortment?
That actually remains to be seen. But the fact that LEGO wants to join us is just for us a proof that kind of our Kids category is getting stronger. A lot of the parents, of course, when they now see that they can buy LEGO and Boozt, and then they can further buy something from Kids category. But we of course expect that LEGO will be some kind of an accelerator for the Kids category like we saw what happened when we got Ralph Lauren. We definitely now. You know, Kids is actually doing very well last year and but we believe that LEGO is kind of an acceleration to the next step, and then we'll just see how far we can stretch our categories.
So far there's not that many limitations, but you know, we don't want to take toys kind of at any cost. It still has to fit into our infrastructure. It's for us, it marks quite a big milestone that they want to join us.
Just a final question. The CapEx guide is here obviously very high for 2022. Are you expecting this to be materially lower in 2023 or with the growth trajectory you see now, do you expect further investments in Autos tore also in 2023?
Well, if we look at it this way, the expansion that we're planning for this year is basically to fill up the current facilities we have in that campus area with the Auto store that's sitting there. So, of course in 2023, it should be lower. The question is when do we build the next campus and the timing of that. And of course, if there's something we learned along the way, we'd rather be ahead of the curve than behind the curve. But I think it's fair to assume that CapEx in 2023 will be significantly lower.
Excellent. Thank you so much for taking my questions.
You're welcome.
The next question is from Daniel Schmidt, Danske Bank. The line is now open. Please go ahead.
Yes. Good morning, Hermann and Sandra. Starting off with your guidance for the total year, and of course I appreciate that, we're only one month into this year, so anything could of course happen. Sort of opening the floor a little bit when it comes to the EBIT margin implicitly from 5.2% to 5.8%, then you did slightly above that this year. Is that coming back to a bit of a cautiousness more relating to the fulfillment costs and the build out, or why do you wanna sort of leave the downside a bit open, more open than you delivered on last year?
I don't know. I think it's kind of prudent because we, you know, we don't know what to expect in the coming year and we are again growing much faster than we expected two years ago, and we're playing catch up with regards to our fulfillment capacity. We want to be prudent. We don't even know, you know, what is the promotional pressure and stuff like that. Plus, you know, we would rather have some leave some upside for the revenue and take some revenue and then maybe making less profit. I think that's kind of, you might say, keeping a lot of doors open for us and not focusing too much where we want.
We don't want to focus too much on possibility other than staying within the 5%-7% and then take the growth we have. We also acknowledge that when you're growing like we're growing, it's you have to keep kind of be aware that things don't always materialize as you expect. We are keeping kind of a safety margin. I don't know if it makes sense, but to us it does.
Yeah. All right. It's not a reflection of what you feel is the start to this year in any way?
No. It would be. You know, you don't know because you know, basically January, February and part of March are the ending of Q4, so kind of it's, you know, you can't conclude anything about 2022 from the beginning of the year.
No. Okay. Of course, we saw the weakness in terms of, you had a very strong performance in boozt.com, but in Booztlet, it was the opposite, and you talked about mix and lower product margin. Is that also something that you're keeping in mind when you look into 2022 coming back to the margin discussion, or is that now improving?
Booztlet you know, Booztlet is an amazing business and of course, it's depending on availability of complete goods. If you remember in 2020, all the brands actually cut down on the production of items because they were very cautious. So, the amount of you would say overproduction has been less than before. So, we have not had the same availability of goods as well as. But we again, the industry is notoriously known for not being able to plan demand very well. So, we expect that once things normalize, there will be access to a lot of inventory.
In the meantime, we are doing investments, you know, price investments to keep the positioning, number of markdowns or the markdown potentially exactly the same as before, but intake margin is lower. We're spending more marketing and plus that we are also kind of improving on the organization. Buying for Booztlet is a much more manual task than for Boozt because, you know, you basically have to call the brand and see if they have any goods. And this is just the kind of the change that we're making and to get up to speed. But we're still very bullish on Booztlet, but maybe being a bit more realistic about growth in 2022.
Yeah. Talking about growth in the more medium term, as you of course highlight on the last slide, you reiterate what you said when it comes to medium-term financial targets and to significantly outgrow the Nordic online market. I also think that you've mentioned through the years, not that long ago, that you do expect to see plus 20% growth for the foreseeable future. Of course, you're guiding for 20%-25% in 2022, but has anything changed if you look a couple of years out in order to keep this growth above 20%, you think?
No. That's the short answer. Of course we are. You know, I think, you know, if you remember, you know, when we came out of Q4 2019. We guided 50%, 20% growth. Now when we see kind of the penetration or the increasing penetration also now that the categories are actually performing considerably better than we expected just two years ago. So we are actually still quite confident that we can deliver our growth. We are kind of our capacity expansion is taking a +20% growth into consideration. So that was kind of also why we said-
Yeah, yeah.
+ 20% back then. Of course we know if all things being equal and being mindful that this is another thing that we see some opportunities going forward, especially where the categories are getting stronger and stronger, and we see the kind of department store where not limited by kind of physical constraints probably has a bigger upside. If people start looking good again and buying occasional wear and stuff like that, but also some shoes. So we are, for us, the main thing is to make sure that we have the capacity and that we can grasp the opportunities going forward.
Coming back to that in terms of your category expansion, which has been terribly successful in the pandemic, you've shown that quite clearly and looking at sort of scraping data, comparing your performance with Zalando, for instance, in the Nordics, it looks like you're beating them quite a bit. Do you think that's all due to new categories or you see better growth in your sort of old categories as well compared to competition?
The new categories of course contribute a lot. But the old categories are also growing. I think, you know, what we are seeing is kind of what I was studying in my younger years, called the penetration supercharge, where we're kind of our brand is just getting stronger across the countries. It's of course extremely strong in Denmark. It's getting stronger by the day, also in Sweden and also Norway and Finland. So I think it's a combination of strategies plus, you know, that we are getting more ambassadors. We are, you know, even though we had some challenges in the warehouse, we have actually managed to deliver best in class with regards to speed. This is something that customers appreciate.
It's also why we show you this slide with, you know, customers buying more than four items in order. You know, they are buying across categories. Kind of to us, like finally it's a proof that, you know, this is something that is gaining momentum. I think it's a combination of everything. Of course the categories with Kids, Sports, Adult also, but especially Home has been just amazing during the last year.
Yeah. Just a final one. When will we see LEGO assortment being in on the website during the year? Do you know when?
It's already there.
Oh, it is already there. All right. Okay.
Not the full part, but you know, comes gradually.
It will be filling up basically.
Yep
Throughout the year. Maybe just a final one as well, given you haven't been complaining about this at all and maybe you won't, but sort of overall supply chain issues in the world and super cost inflation when it comes to freight, is that indirectly affecting you as we go into 2022?
Well, looking at, you know, the in deliveries for the spring summer season now it's actually going according to plan. We don't have any major delays. In terms of the fall, of course it's quite early, but we haven't had any indications for from our brands that something's happening. On the price it is very different pictures depending on who you talk to. We do expect some kind of price increases and if, you know, there are some brands increasing a lot and some very little, but I guess on average it would be around 5%-10%.
All right. Okay, thanks. Thanks, guys.
You're welcome.
The next question is from Daniel Ovin of Nordea. The line is open. Please go ahead.
Yes, good morning, Hermann and Sandra, and thank you for taking my questions. Most of them have actually been asked already, but maybe a follow-up just on the risk sharing agreements. You talked about this for last year. How do you see that developing? Is it still growing year-over-year? And do you expect that to further benefit your margins also going forward?
Well, as we become larger, that is one of the scale benefits that we get when we're negotiating and discussing and having partnerships with our brands. It's according to plan and we are, you know, it's part of that negotiation and it's going as we were expected to. Yes, it's growing.
Maybe do you give any numbers on what share of your suppliers do you have these kind of agreements with? How do you expect that to develop?
No, we'd rather keep that to ourselves actually. Sorry.
Okay, fair enough. Just final question on the competitive environment. We also have seen a few new players emerging like SHEIN, ABOUT YOU, et cetera. How do you see the competitive environment overall in your markets? Do you see these new players coming? Do you see more tougher competition on price marketing, et cetera? Perhaps you can just give some overall comments around that.
The market is very competitive, which means that we really like it because we are extremely good when it's competitive because we have probably the leanest cost structure of, if not all of the players, most of the players. If you look at the ones you mentioned, SHEIN, Shine and ABOUT YOU, we see them as being more of a fashion store for young women, so not directly competing in our kind of department store segment. We haven't actually seen that big an impact directly from them. I think it's for us kind of difficult to measure kind of what is the impact because would we have grown 45% if they were not there or less?
Kind of when we're growing this much as we were doing in Q4, it's just like difficult to assess, you know, what impact it has. Of course, they are buying marketing and they might impact the cost per click, et cetera, but I think that we are quite good at kind of navigating in a competitive and/or in a bidding environment. I'm as concerned as always, but not more sleepless than before.
Perfect. Okay. That's all my questions. Thank you very much.
You're welcome.
The next question is from Michael Benedict, Berenberg. The line is now open. Please go ahead.
Morning all. Thanks very much for taking my questions. And first one is you displayed your sort of normal chart around the NPS, which has shown obviously very good momentum. I wondered if you could give a bit of color about the key initiatives you think are driving that improved customer satisfaction. The second one is a quick one. Are you able to disclose what tailwind the Home category provided for your FY 2021 revenues, please?
Yeah, if you look at the NPS, basically what we're doing is what we've always been doing. You know, it's extremely important to be able to deliver fast. I think that with disruptions in the supply chain, with large market distributors basically having problems in delivering on time, I think that we have been able to kind of navigate quite strongly in that and probably exceed expectations that might have been lower due to the supply chain issues on the one hand. Secondly, our customer service is just outstanding.
We've managed to build quite strong internal customer service advocate systems, meaning that when a customer calls or engages with us, they just get a very quick response, an outstanding response. I think that's a combination of everything. Plus, of course, you know, offering this breadth and width categories and then finally good prices, that is also contributing to a strong NPS. Michael, to be honest, I didn't really understand the last question. If you could repeat that.
Oh, sorry. Yeah. It was just on the tailwind to FY 2021 revenues that you received from the launch of the Home category. Are you able to quantify that?
We can't disclose exact numbers for different categories, but home is kind of very close to revenue level of the Beauty category. So it's a significant number.
We really want to say it, but we
We're not to say.
Would 5-ish% be sort of right ballpark-ish? Very roughly.
Yeah. It's not totally wrong, no. It would be silly, yeah.
All right. Well, thanks very much for answering my question.
You're welcome.
The next question is from Tobias Eskmark. The line is now open. Please go ahead.
Yes, good morning. Thank you for having me this morning. I'd just like to focus a little bit on the return rate. Can you just give me a picture or a number of how many customers did you exclude last year and how important these measures have been regarding your job to lower the return rate, please?
Yeah. It's actually quite interesting. When you look at those numbers, it's actually quite breathtaking. But the number of blocked customers right now is around 25,000, of which 9,000 were blocked during the last year. The effect from this is massive. They have a really high basket size. The basket sizes that they have and that they both order and return is enormous. So looking at like per customer, it's a lot. We have saved many millions costs, both in distribution costs and in return handling costs by not doing this. The reason that we can do it is that we have great data, and we're in really good control of that data.
It's not just that we block someone over a certain percent, but we look at their behavior, we look at do they have like, how is their claim behavior, how do they behave. So, it's quite sophisticated, and it's working really well for us, and we saved many millions. In terms of the return rates, you know, if we have 9 percentage points lower in 2021 compared to 2019, somewhere around 2, 1.5, 2 percentage points is probably due to the Fair use policy.
Okay. Sandra, I know that you have given us like a vivid picture of how this works, and there's sort of like a more almost like an addiction coming from some of the customers. Can you please elaborate on this?
Those customers who you have excluded, I mean, what do you need to do to get an exclusion, so to say? How common would you say is that you welcome back customers who once have been blocked?
We, you know, we try to rather let them have another chance than not. So, we've been doing that, but unfortunately many of them that have that behavior, if we open them up again, and you know we always wanna have that open dialogue with the consumers because if they change that's good, but rarely they do, unfortunately. So, yeah, that's the way it is. Looking at, you know, it is not only the number or the return rate. It's consistency. So, of course if you're a first time customer and you return a lot, and then the second time you also return a lot, that could happen to anyone basically, because you can be lucky.
If we look at it over longer periods of time, so we, you know, we observe and then after a certain number of transactions, you see the patterns. So, that's when we go in.
Okay. I see. Just a final question. With the restrictions off the board here in Sweden, as well as in Denmark, how do you foresee the return rate and are there any categories or products where you would estimate it could rise, for the upcoming months?
Yes, of course. We saw it already in Q4. Women were not as, you know, pre-pandemic level, but they were starting buying into to these type of more formal wear categories again. The return rate. It's quite stable with, you know, we measure it down on a product level. When we do measure the returns, it's the product mix that changing. The return rate level on these categories, dresses and stuff, it's quite stable. It's a little lower than before but given the product mix change, we don't expect like a huge increase in any way. Of course that's it will probably fluctuate a little between quarters and what type of, you know, what type of season it is.
Okay, I see. Thank you so much for taking your time. I'm very grateful for this.
Thank you.
The next question is a follow-up question from Daniel Schmidt, Danske Bank. The line is open. Please go ahead.
Yes. Hello again, Hermann and Sandra. Just a follow-up on the topic that we just discussed when it comes to return rates and Fair Use policies and has there never been any sort of possibility or any sort of thoughts about telling people that do return a lot and have sort of a unwishful behavior that they would have to pay for the return themselves, but they can still be a customer? Is that not possible?
It's possible. We do have a conversation with the ones that are like on the borderline. We do have a conversation of it, but we have not yet said that and I'm not sure that it will actually do any difference.
No, but basically you'll be asking them to pay for taking the goods home and returning them and still would be very bad business for everyone. So, that's, you know, they basically, you know, they have no intention of buying anything, so we might as well exclude them, so yeah.
Yeah. All right. No, it's, again, it seems to be working well. I'm just thinking about that as an opportunity. All right. That was all for me. Thank you.
Okay. Thank you.
Thank you.
There are no further questions at this time. Please go ahead speakers.
Okay. Thank you for good questions and your patience. This concludes the call and look forward to I guess talking to you over the next couple of weeks and seeing some of you in real life finally. Thank you very much and have a good day.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.