Earnings Call: Q4 2020

Feb 9, 2021

Afterwards, there will be a question and answer session. Speakers, please begin. Thank you, and good morning. Welcome to our Q4 2020 presentation. If you go to the first slide on the key highlights, I would just run quickly through as we are going in details on all these items. But mainly of course, we had strong growth throughout Q4, both from new as well as existing customers and in local currency growth of around 40%, which was very good. We had a record number of new customers in 2020, more than 1,000,000 new customers, which bodes quite well for the future. Our cash flow was strong and both by low net working capital as well as CapEx on the low side of basically too low in 2020. Our home category was launched during Q4 and is performing ahead of expectations. It's been very well received by our customers and even though assortment is still quite low compared to where it will be within shortly, it's been very well received and you might almost say that it's about time that we did that. We did this the tool listing in November in NAFTA Copenhagen, raising around SEK800 1,000,000. And at the same time, on total, we have welcomed large new shareholders. So we have now more than 15,000 shareholders, which is very good because all of them are also customers in our shops. Weekly in sourcing of our Fermi staff operations. And also it's important to highlight that we the key focus is to grow the business at a very high pace, which is why we have updated our medium term outlook. If we go to the next slide on the KPI KPI highlights. If we look at the KPIs for Gluker, the very important highlights on customer satisfaction, we can see that our trust pilot score stable at 4.6, 5 Star and our NPS is 70 more or less the same as last year. So our customers are still and we're very happy, which is good because we know that if they give us a high NPS goal, there's a high likelihood that they will come back and buy Investor Day. If we go to the next slide on the average order value, we can see that the order value in Q4 was slightly down and the main reason for that was current effects in Norwegian kroner depreciated loss towards the SAC during 2020 and that of course affected quite considerably, there was a big change in quite a dramatic change in the product mix, but it was helped by the lower returns, which makes sure that the net average order value still is high. And you can see that also on the full year average order value, which is more or less on par with 2019. And if we adjust for cost effects. It would have gone up to 8.37%. So that's very good because for us the key for us is maintaining a high Airbus market size. If we go to the next slide on the cohort development, we had 27% increase in active customers during 2020. So we had a bit more than 2,000,000 customers in 2020. These customers they bought on average less then in 2019, which actually makes good sense partly because we had a lot of new customers at the end of the period as well as the old cohorts Board Less. Due to corona, we expect is that we have seen that the buying effort has been that you are buying less occasionally, more basics and yes, sweats, stuff like that. But the our ability to attract new customers house and housekeeping compensated for the decrease in frequency. So as we said before, when we go back to more normal life. We expect the old cohorts to go back to the normal buying behavior. We can also see from our true frequency that it's down compared to Q4 2019. The only reason for the Trufiguritiv to be down is because of our fair use. They had an enormous amount of orders gross, but didn't really keep anything. And if we adjust for that or correct for that, exclude them, you can see that the true frequency is on the same level in Q4 as in Q4 2019, which is very good. If we go to the next slide on the fulfillment operations, we are now ready. We have taken over the fulfillment staff at the warehouse. This is actually something we've been waiting for almost for 9 years since we started the business and started by outsourcing the fulfillment operations. We took over as of January 1, and that means that now we are in full control, more than 400 employees. And even though we made a lot of improvements last year with regards to efficiencies, we still believe that we will have some benefits, of course, it's basically due to the fact that we will no longer be paying a margin to the staff provider. We have also taking over the new warehouse, which is next to the current one. It's a warehouse space of 23,000 square meters. When we signed the agreement, we expect it to be in very good time because you want to make sure that you Ambu space and that you invest well ahead of the need. But having seen kind of the growth in 2020 and expectations for 2021. You can almost say that it's just in time because we can see that we have a strong need for the warehouse. We will do some reshuffling. We will use that new location to the processes surrounding the automated Pick N Pack. We will make space for even more automation in the cargo warehouse. This is something that we didn't expect initially, but we can see that we can fit even more automation in the old one, meaning that we can to some of the other processes in the new system and as well as we can also start to orderize stuff that is outside the current warehouse, especially the hanging goods. So we expect to do some CapEx in the new building that makes it even easier for the IT business that traditionally have been outside the automation. That means that we can be even more efficient. With regards to the automation, our order store, we are now in the middle of what we call Phase 4, meaning that we have built it and we have put around half the bins and robots in place. And we will probably put the rest during Q1, meaning that then we will have 500,000 bins end Pfaffen rovers and we expect to initiate Phase 5 immediately thereafter. As we have mentioned before, we are probably slightly under invested in the warehouse automation, warehouse investments. During 2020, which means that we expect to slightly increase our CapEx and expect that it would be around 45% intention to allow for the both efficient gains and making sure that we are invested ahead of the growth. If we go to the next slides on the financial update. I would like to hand over to Central Gas. Thank you. So if we look at the group results, it concludes the net revenue growth of 35.8% for the group in the 4th quarter. In local currency, net revenue growth was around 40%. Lower return rates relating to the product mix as well as the general lower level of returns effective growth positively in the Q4 to an even higher extent than previous quarters. We continue to invest in new customer growth Throughout the Q4 and despite the declining demand for fashion and apparel in the general market, we managed to capture more than our fair share of the new customers shifting from offline to online shopping within our categories. For the full year, net revenue growth was 27.3% 30% in local currencies. In addition to negative effects from currencies, the change to consignment like agreement with a large brand partner in 2019. And the introduction of a fair use policy in November 2019 had a further negative effect on the net revenue growth of around 2 percentage points. The gross margin was 43% in the 4th quarter, 0.2 percentage points lower than last year. The positive impact from inventory risk sharing agreement was lower compared to last year future change in the agreement structure when the credit is to be invoked. During 2020, this has been in the end of season sales, meaning it impacts the Q4 negatively compared to last year, but it will then impact the Q1 in 2021 positively compared to last year. This has been partly offset by a higher share of campaign goods positively affecting the gross margin. For the full year, the gross margin was 40.6% to last year's compared to last year's 39.7%. We believe that this increase is that is driven by the inventory composition where a higher share of the inventory was contained by Demonstrates an outlier effect driven by the pandemic. The adjusted EBIT margin was 9.9% in the 4th quarter, An improvement of 0.3 percentage points. The adjusted EBIT includes the onetime bonus to all employees as well as the precautionary write down of our receivables towards the Norwegian customs. These nonrecurring costs Affected the adjusted EBIT negatively with 1.5 percentage points in the 4th quarter. For the full year, The adjusted EBIT margin was 6.7%, an increase of 3.5 percentage points. Adjusted EBIT margin increase was driven by the higher gross margin as well as the improvement in the operating cost ratios. 2020 was an eventful year for us. The pandemic has been a driver both for growth and profitability, But we also went into 2020 expecting profitability improvements from the changes that we made in the fulfillment setup in late 2019. Our estimate is that out of the adjusted EBIT increase of a total 3.5 percentage points, approximately 1.5 percentage points COVID related. Out of the 1.5 percentage points, approximately 1 percentage point is related to the gross margin, While the rest is related to lower fulfillment costs as I will come back to. If we move to the next page, We can see that the revenue growth for bruce.com was 28.7% and approximately 32.7% in local currencies. Lower return rates and stronger growth in men, kids, sports and the beauty category were the main growth drivers in the quarter. The average order value decreased with 3.1 percent to SEK 8 19 during the quarter and that was driven by currency effects. Adjusted for these negative currency effects, the average order value was on par with last year. Change in sales mix Swartz Kids, Sports and Beauty, which has lower average price compared to occasion wear categories, affected the gross average order value negatively. But this effect was offset by the lower return rates. The home category, which we thought launched during the quarter, had a positive impact, Which was above our expectation. The adjusted EBIT margin of 9.6% corresponds to a decrease of 0.4 percentage The decrease was driven by a higher adjusted admin and other cost ratio, partly offset by an improved fulfillment cost ratio. The gross margin on boost.com was positively impacted by high share of campaign stock offsetting negative impact on phasing of stock write down agreements change into Q1. So if we move to the next page, we can see that Boufflet grew 128 percent in the Q4 and 127% for the full year. For the full year, the net revenue was more than SEK 500,000,000, Which was our internal target and something that we are very proud of. As we continue our growth path, we are expanding our Nordic focus for boostlet.com, driving growth also in Germany and the Netherlands. Our boostlet business model has strong profitability potential, Which is given by the average order value of SEK666. The average order value enables a high profitability in absolute numbers, Especially as customers pay for distribution and returns. The adjusted EBIT margin increased from 9.9 12.8% in the 4th quarter and that was driven by a higher gross margin. For the full year, adjusted EBIT margin decreased from 10.8% to 9.2% driven by the onetime write down of stock performed in Q1, Which was only partly recouped within the Bouffle segment during the year. Higher marketing costs also contributed to the lower profitability, But more importantly, it also enabled the high growth that we've seen in 2020. As we keep on repeating, we have very high ambitions for Boostlet. Growth is our main focus and we will continue to invest as much as it makes sense to onboard many new customers in the coming years And we continue to see high availability of stock. If we move to the next page, we see that the other segment had a net revenue of 8 point SEK 9,000,000 in the quarter corresponding to a net revenue growth of 19.9%. For the full year, net revenue decreased to $25,200,000 driven by the Danish stores being closed during the spring as well as at the end of the year due to pandemic restrictions. The adjusted EBIT amounted to minus $200,000 in the quarter SEK8.1 million for the full year. The restriction due to the pandemic affected adjusted EBIT negatively in the quarter That however was improved significantly compared to last year due to the closing of the UK by Blue store in Copenhagen. Please note that this is the last quarter where we will report the physical stores in a separate segment. As from 2021, our Boostlet stores will be included in the boostlet.com segment, while the Beauty by Boost store will be included in the boost.com segment. Going forward, we expect our physical stores to deliver a breakeven result. If we move on to the next page, We see the development of the cost ratios in the Q4. The fulfillment cost ratio decreased with 1.4 percentage points to 11% With 2.1 percentage points to 11.6 percent for the full year. As mentioned before, at this time last year. We communicated that we expect to see savings in the fulfillment cost ratio of around 1 to 2 percentage points June 2020 2021 in comparison to the 2019 ratio of 13.7%. At this point, we can conclude that we are ahead of the plan we set out since we've seen a 2.1 percentage point improvement already after 12 months. In the 2 percentage point target we set out, benefits from in sourcing the fulfillment operations that is happening now in 2021 was included. Looking at our fulfillment operations in 2020, we estimate that approximately 0.5 percentage point of the improvements are related to the low returns triggered by the pandemic. For 2021, We estimate that the cost improvement potential for the in sourcing is around 0.5 percentage points. However, as we expect return rates To increase at the point where pandemic restrictions are released, we expect the underlying cost ratio to stay around the same level in 2021 compared to 2020. The marketing cost ratio was 10.1% in the 4th quarter, slightly higher than last year. For the full year, the marketing cost ratio was 9.9% compared to 10% in 2019. With the current growth rates and the opportunities we see, we believe that this level of marketing investments are efficient and serves our purpose to grow our business ASPAT. This makes sense. The adjusted admin and other cost ratio increased with 1 percentage points in the quarter to 9.7%, driven by the onetime bonus to employees and precautionary reservation for a receivable. Excluding these costs, the adjusted admin and other cost was 8.1% in the quarter. For the full year, the adjusted admin and other cost ratio was 9.6% corresponding to a decrease of 0.3 percentage points. The decrease in adjusted admin and other cost ratio was driven by general scale effects as well as the lower operating loss in the physical stores following the relocation of the Beauty by Boo store. This was partly offset by the discretionary bonus, currency effects and a write down of our receivable. The adjusted depreciation decreased with 0.3 percentage points to 2.3% in the quarter, while it decreased with 0.1 percentage points to 2.9 percent for the full year. So if we move on to the next page, We see the significant improvement in the net working capital that decreased from 12.7% to 1.7% of last 12 months net revenue. The decrease was primarily driven by a higher increase of accounts payable compared to inventory, Which is a consequence of the higher sell through of the autumn winter 2020 items and a higher share of campaign stock to keep up the stock levels. Compared to the Q3, net working capital increased slightly as we've been building up our inventory level so that we are in a position to capture the full growth potential we see in our markets for 2021. We expect net working capital to continue to 'twenty one as we build up our inventory levels. Contrary to the situation we've been throughout the main part of 2020, we want to make Sure that the inventory availability doesn't limit our growth. Hence, we expect net working capital to be in the mid single digit percentages of the revenues on a rolling basis. The operational cash flow for the 4th quarter was a positive SEK 100,300,000 that is to be compared to SEK 55,800,000 last year. Improvement was driven by the improved operating profit and working capital. Cash flow from investing activities amounted to 74 point €4,000,000 driven by the Phase IV expansion of the Autostar that is to be finalized during Q1. Cash flow from financing activities amounted to SEK630,600,000 driven by proceeds from the new share issue in connection with the dual listing on Nattec Copenhagen, whereby we obtained SEK 825,600,000 before deduction of cost of the new share Aske. Other cash flow from financing activities was mainly related to new loans related to Autostar expansion as well as the loan repayment at the revolving credit facility of DKK200 1,000,000 was fully repaid during the quarter. At the end of December, our net cash position was SEK1.7 billion that is to be compared with SEK340 1,000,000 last year. The strengthening of the cash position is of course related to the strong operational cash flow from the year, but also from the new share issue. This concludes the financial update. And I would now like to hand back to Harmond. Okay. Thank you. If you go to next slide, updated medium term financial ambitions. I just would like to spend a couple of minutes on going through our ambitions through 2020 3. So if you go to the next slide, on the changing market dynamics, we know a lot of things changed in 2020. Pandemic caused a big change in consumer behavior and some some of the consultants talked about that you saw kind of a step change in e commerce penetration that you got 7 years of penetration in 7 months. And we can see that in our numbers where we are our kind of growth trajectory has been €600,000,000 to €700,000,000 per year on Boostelcom and Boostelcombined. And we've made a step change to $900,000,000 And of course, this is specific change. At the same time, we have also been on very steady path with regards to our profitability. And for the 2 subs combined 6.9%. And if we exclude the COVID-nineteen impact of around 1.5 percentage points. It's down to 5.4%. So we believe that over the last many years with been on steady growth and on a profitable growth. If we go to the next slide, this means that we have actually exceeded our previous medium term target of 6% modestly driven adjusted EBIT margin. And most of you were on the call exactly 1 year ago and you know that our ambitions back then were kind of to go and reach the 6% and we try to demonstrate how we would get there and through the gross margin fulfillment ratio, admin and other marketing, etcetera. So if we look at the gross margin, we have sale. We expect it to stay at 39% to 40%. And we can see in 2020 that it was 4.6%. And this is due to our strong mid to peer market position. We've increased the in season campaign buying end, obviously, as we grow with improved contracts. On the fulfillment side, we expect it within 2 years to get 1% to 2 percentage points from efficiencies. We expected to get 1 percentage points in 2020 and another one in 2021 as we would take over staff operations. And I think we can see that because we said we would eliminate redundancy and slack. We did that improved productivity and then of course improve the contracts. And let's check on all factors and of course help by lower returns, meaning that our costs came down and more than expected. Ethanol costs. We also expect to get up around 1 percentage points from scale effects and cost effect from reducing those in the fiscal build in Copenhagen. And then also we expect to have reduction in customs pace in novel from the new law. That has not checked because that takes time and there are some bureaucratic things you must say in Norway that is making it a bit difficult to get that through. Marketing costs. We also said that we expect that to go down. We want to keep offline marketing stable in absolute terms and then growing the online as we grew the revenue. Having said that, we also said that we had underinvested in marketing 2019 and we would like to have a higher marketing cost ratio in 2020. We did not meant to do that as it was 0.1% lower than in 2019, but that was partly due to lower marketing costs in Q2. So it's more or less we also delivered on that part. If we go to the next slide and I think that it's quite important to say that as we have realized our medium term targets. Basically 2 years ahead of plan, we think it's now is the right time to set some new medium term targets. We still want to grow and we've seen throughout 2020 that growth is extremely important. Growth puts you in an extremely strong position towards both your scalability as well as delivering on the customer experience side. So we want to continue to invest in growth at the same time as we maintain solid excellent market leading EBIT margin, which is driven by the basket size and the local scale leadership in the Nordics. On the net revenue growth. We said that mid term we want to continue to outgrow the Nordic online market significantly today significantly because we want to expand the market share. We expect that the Nordic honor market we grow around 10%. And our ambition, of course, is to grow considerably more than that in the coming 3 years. We want to continue to invest in customer satisfaction. We want to build leadership in the categories, in the beauty, in the sports, in the men's and also in the home category as well as the kids. So we're still young in some of the categories and see high growth potential. We want to still maintain aggressive new customer acquisitions. We stick to our customer lifetime value and how much we want to pay for the customers and that's kind of almost viable for those. And as long as the unit economics favorable. We will continue to invest in the growth. And finally, Boosted has only started the growth journey and we want to continue hypergrowth. On the adjusted EBIT margin, we want to guide a 5% to 7% EBIT margin June period. This is still considerably higher than all our peers. And the key drivers will be for us to maintain the order value. We still expect gross margin to be around 40%, fulfillment costs still around 11% so if we have operational gains or the gains that we expect to get, we will reinvest them in higher quality. There is no rush to kind of put that into the EBIT because we want to improve our customer position even further. The same goes with the Aetna cost ratio. If we get savings. Again, we want to improve the customer experience and making kind of one of a kind experience and build an even higher moats towards peers and want to maintain a marketing cost ratio of around 10%. So if we go to the next slide and do an EBIT margin bridge, if you see we can see that for us, the key thing is to keep the basket size, the absolute value and the local scale leadership. And we think that's the key growth and profitability. And as said before, we expect the gross margin to be around 39% going forward. We said that when we did the IPO back in 2017 and that seems to be the case. Fulfillment ratio around 11%, 12%. And if we exclude the COVID-nineteen impact in 2020 because the number would have been around 12% or 1%, add and all costs around 8% to 10% anti marketing cost around 10%. You have seen the bar to the right where we kind of go through the economics of our baskets. And I think the main thing for us to see is that we have SEK 81 order to invest in marketing and still make 5% to 7% in EBIT. And theoretically, that weekly we go higher, weekly we go to SEK 100 and still be minimum as profitable as our peers. And if you go to the next slide, you can see what we mean by that. We are spending SEK 81 Perbasket and we've tried to make kind of a translation to what would that mean to our peers if they were to spend the same amount, what would that mean to the cost ratio. And you can see that that will actually mean a huge increase in our peers cost ratio. And so we believe that now that we have had now that we have this local scale leadership, it's actually quite big quite difficult for someone bigger than us to kind of outinvest us in huge market economics if they look like that. So even though some of our peers would invest more in marketing or even would drive the marketing costs down, our basket economics. I feel much more favorable than our peers. So it will still secure this growth and profitability. So we are quite confident and quite bullish on going forward and maintaining a positive growth and maintaining an ability to fund our growth. If we go to the next slide on the outlook, this is just to kind of reconfirm that we expect for 2021 our net revenue growth to be in the range of 20% to 25% and we expect the adjusted EBIT margin for 2021 to be above 5%. And you should compare that with what we would call kind of a non COVID-nineteen EBIT margin of around 5 point 2%. So we are very much focusing on continuing very high profitable growth. With this being the last slide, I would like to hand over to the operator for questions. Thank you. Ladies and gentlemen, we are now ready to take your questions. And our first question comes from the line of Daniel Schmidt of Danske Bank. Please go ahead. Your line is now open. Yes, good morning, Herman and Sandro. Can you hear me? Yes, yes. Good morning, Darren. Good morning. Just a couple of questions, Dan, and starting with what you just finished off in terms of the medium term outlook And also for 2021 and high ambitions, of course, on the growth rate and also maybe reflected on what you say in terms Of the EBIT margin being above 5%. And when you read the tables that you laid out, the SEK 49 looks like a 6% margin on that order value that I put out. Why do you want to sort of open the downside down 5%. Could you give us some deeper explanation on that? You say that you have a starting point of 5.2% excluding the COVID effect. But at the same time, you have the in sourcing synergies that are going to come through this year of 0.5 and 0.6. It looks like the starting point should be around 5.8. Am I right or am I missing something? Of course you are always right. But the thing is that we're actually going out of pandemic. And we don't know when the site is open again. Of course, we've made an aggressive upfront buy expecting kind of this pent up demand to materialize. And in 2020, we were probably chronically under stock and we don't want to come into a situation. So I think that if demand for some reason would lower than expected. We would probably have to make some write downs on inventory, which of course drive gross margin down and also if marketing costs for some reasons Wuppihaya. So I think this is kind of being cautious making sure that yes, we expect a pent up demand. Yes, we are buying heavily into the stock. But we don't want to kind of be over ambitious. I think that it's better to kind of if things pan out as we hope of course surprise you positively, it was probably will not be a surprise after all. Yes, okay. I hear you. I don't know if that was an answer, Daniel. Yes, but I'll let Yes, absolutely, absolutely. Makes sense. And then second question, You say that you have very high ambitions for Boesvet. And of course, Boesvet has been a tremendous success story in the past couple of years with continued very high growth also in Q4. And you also highlight that you see an expansion. Maybe a bit more when it comes to Boostlet versus Boost when you look at Continental Europe and you mentioned high high growth in Germany and the Netherlands. Why do you think that Boeschlads, if I'm right, could our Have a brighter future in Continental Europe than Boost. And what are you sort of what's the reception Currently quite good and it does it is there any sort of characteristics for these markets that are More or less favorable versus the Nordics. If you see one, Constantin. Yes, yes, yes. I think if you start with Boost, Boost is kind of rapidly becoming our very strong brand in Nordics and want to build this Nordic retail focus on all brands. For Boeslet, I think the unique thing is that most of the stuff here in Brucet is difficult to find elsewhere. We have these are prior season items. These are Nordic brands, Nordic Designer brands that we're selling at a high discount, meaning that kind of the competition for the same items in south of the border, it's not the same. So we have something that is more unique. And the people living in Continental Europe, there as kind of the like having a good bargain as in Nordisk. So I think that's kind of so it's uniqueness you don't find it on these comparison sites. And also the reason why we're also quite more bullish on moving south with Boucheries that we are profitable on the first order due to the basket size. So we are paying for the shipping. So that's why we think it's good for us to continue to expand in Europe. All right. And do you think that, that will be sort of a meaningful part of the growth rate in Boesnet in the coming year? Or is it Still going to be very much the Nordics. It's sort of when you read what you write, it sounds like you have a little bit of a breakthrough in Germany and the Netherlands. Focus still on the Nordics. That's kind of the main focus because we can see that by introducing Boostlet, we more or less believe that we doubled the addressable market for us in the Nordics. But kind of it's an upside for us to grow in Continental Europe. And of course, we are in general, we've always been quite opportunistic. So if we can growing faster by doing profitable growth in Germany, in the Netherlands and other countries we'll do that. But our main focus is still in the Nordics. But it's it's nice to see that it can travel and we believe that kind of if this continues and we see the opportunities, of course, we would basically fuel and fuel boost. And the good thing is that kind of the risk that we'll take on a boost.com with with regards to the front buy in 2021. If things don't pan out that might be an opportunity for Bhutler Analyst Day. So I think that kind of booth that is a very good hedge for us. And then also it's an added benefit that it turns out that we even have opportunities south of Scandinavia. Yes, yes. Good. And then just a final final question. You're right, the positive sort of you had a less of a positive last year, but it's going to be a net positive in Q1. Could you give us any sort of indication of the size of the impact in Q4 and reversal of impact in Q1. It's approximately 1% on the gross margin that it impacted negatively in Q4. And is that going to be entirely reversed in Q1? Or is the impact going to be less in Q1? It should be around the same level that we expect. That's all for me. Thank you guys. Thank you. Thank you. Our next question comes from the line of Nicholas Ekman of Carnegie. Please go ahead. Your line is now open. Thank you. A couple of questions, if I may. Firstly, curious about if you could say anything about current trading Given the very strong momentum you had here in Q4 and facing very easy comparisons in Q1, is it safe to assume that your growth in the start of 21. It's closer to the 40% local currency growth you did in Q4. That's a very good assumption, Niklas. Of course, it's been a very good start to the year. And we of course we are significantly ahead of above the full year guidance. Secondly thank you. And secondly, I'm curious, you're talking about significantly increased inventory buying. And Yes, you are still guiding for 20% to 25% sales growth for the full year. Shouldn't this increased inventory buying Enable accelerated sales growth rather than a slowdown or is this a reflection of your anticipation that campaign buys will be much less pronounced this How should we read it? Yes. That's a campaign by August will be much less than last year as we basically spend most of the second half of the year just trying to get hold of campaign buy. So the upfront buy for 2021 is much higher than it was larger. Just to make sure that the cohort that we received in 2020 that we can fulfill the needs of those kind of apparel needs. Obviously, we also kind of have put budget aside to campaign buyers and if things mature as we expect, then of course we will have a high amount of campaign buy. And then of course you might probably see an expiration, but I think it's a bit too early to kind of conclude on it because we haven't really gotten out of the pandemic yet. So we are prepared for the customers to come back and buy more. And we are ready with the budget to and set up to do strong campaign price again. Very, very good. Thank you. Also curious, the new categories where you're seeing good growth now, beauty, sports, home. Would it make sense to maybe quantify the share of sales, maybe not for these individually, but as a group To kind of separate the apparel business to these new verticals, that's a good question. Yes, we I don't really want to do that yet, but I think the closest thing I can tell is that women's share of our revenue is now below 50%. And I think that's a big milestone. And then it's a meaning that it's men, then kids, sports, beauty and home, of course, women by beauty and sports, but they're the typical women category. So women's Dreyes Glofieldsbergen. And this is they have been driving the return rates. So I think that is moving towards a more less return prone behavior. So I think that's kind of the closest that I can tell you about how the mix is. And is this very much happened this year due to the pandemic? Or has that been a change you've seen over a number of years? Now this has very much been driven this year. And if I don't remember wrong, I think that in 2019, women's part of the revenue was around 65%. So that's actually quite a dramatic change. And of course men are buying much more, which we like because we return less. And then of course, and also not only sports and beauty and home but especially also kids has been growing a lot. So it's a very good mix and towards this online department store experience. Very good. Thanks. Also curious about the CapEx. Your guidance 4% to 5% of sales, you're talking about roughly SEK 250,000,000 in CapEx. That's a fairly significant increase from previous years. Can you talk about the different components here? Why the such a big increase? Well, we will continue our expansion with the Odessa. But then as we have a new building, we also need Something in that building and we're looking into other automation solutions for other parts of the stock. So this is the reason why we have a new building and we will continue the order store. And as we see the growth rates to continue to be high and we have maybe being on the slow side this year in terms of CapEx, we need to make sure that we're constantly before our growth. So we have room to grow And have as much stock as we need. So this is the reason that we're investing quite a lot. If I may add, when we enter 2020, we expect a growth of 50 20%. And so kind of the expansion in the warehouse and also etcetera. So basically the growth went ahead and you should also look at it into the currency adjusted growth. The number of items etcetera going through the warehouse has increased dramatically. And also as we're expecting growth of 20% to 21%, which was higher than what we expected back in 2019. We are just slightly late with regards to our PEPs or warehouse investments. We need to catch up and get ahead of the curve again. So this means that 2020 will probably be a slightly higher CapEx warehouse CapEx than EUSA in Norway. And is it safe to assume around half of that CapEx is Autostore related and the rest is more The other issues you talked about with the warehouse expansion. Yes, that's a fair assumption. Very good. Thank you for taking my questions. Thank you. Our next question comes from the line of Daniel Oven of Nordea. Please go ahead. Your line is now open. Yes. Good morning, Herman and Sandler. Can you hear me? Yes. Good morning, Darren. Perfect, perfect. Okay. I was thinking a little bit about all the new customers that joined during 2020. And if I remember correctly, you previously talked about that there is some increase over time. There long have been customers with you. So Can you give any indication of how much that has historically has improved during 1st year, for example? And is that something we also can expect for 2021 you think? Yes. I think we talked about earlier that in the 1st year after the purchase, we had kind of 65% of the cohort revenue. And then it's increased from this. We haven't quantified how that how much it has increased over the years. And also we've seen that kind of the 2019, the older cohorts have obviously been buying less in 2020 Q2, the need for closing has been less, but kind of the repurchase rate after 30 days, 60 days, 90 days is very similar to the old cohort. So we expect the cohort that we received that we gained in 2020 to have a very similar behavior in 2020 at the same time as we expect the old cohorts to resume the buying behavior. Of course, assuming that society will go back to normal somewhat during Q2. Okay. And also when we discussed previously, I think there is an assumption here that the overall apparel market We'll come back after, I don't know, 15% fall or something in 2020. So of that growth guidance you have for 20 21, how much is based on our assumption that the underlying market is coming back? And in that case, how much have you put into that market. We are assuming that the underlying market is coming back 2019 levels during Q2 2020. So and then of course, you don't know what would happen now because I think that people are just longing to get out and no longer wearing sweatpants strategy assessment and looking good against us. So if we're lucky, then you would have you will see an increase versus 2019. And then of course the big question is the penetration that you've seen from online, will that stay or will we go back to more physical retailing. And of course, if the penetration will be maintained at the level that we saw in during 2020. Then obviously, the underlying market will grow underlying market will grow considerably more than 10%. Okay. And then just another question here on the home category. So maybe if you can compare it to the kind of initial response when you launched the beauty segment. And also maybe some comment on this segment, if you think that Longer term potential is similar to what you see in the beauty segment? I think it's safe to say that it's been a completely different response than from beauty, much better response. We probably also executed better on our home launch and we did on the bureau loans, probably also a less fierce competition on whom you're not competing against dutifully, etcetera, even though there was not much dutifully in 2020. But we've seen both with reception from our customers also with after customers, what you buy on Boost. If we were to launch home, I think that more than 60% said that they would buy on Boost. And we've seen that even though it's actually quite a limited assortment we have on Boost. But it looks like whenever we introduce new brands or new items, they just get sold. So the home reception has been I think it's fair to say that it's actually slightly exceeded our expectations. And also if I may add, we had a target To sign around 200 brands in Q4 and we reached that goal now. So we have a good plan for the coming quarters as well. Sounds optimistic. And then also just wanted to check on the fulfillment side, so I got all the bits and pieces here. So it sounds like from efficiency, you expect a margin gain of about 100 basis points in 2021. But then you also expect To give back some of the, again, return levels going back to normal, you expect up 50 bps. So overall, it sounds like fulfillment cost Perhaps down 50% in 2021. Is that correctly understood? No. We actually expect that fulfillment Costs will remain on the same level as in 2020 this year. We had a lot of decrease In returns, we expect some of it to come back. We expect some of it that will remain due to fair use and shifting categories and such. But the improvements we see we see improvements, but we have taken so much in 2020. So we expect it to stay in the same level in 2021. Okay, perfect. All right. That's all my questions. Thank you very much. Thanks. Thank you. There are no further questions at this point. I will now hand back to the speakers for any final remarks. Okay. But yes, that's nothing wrong from our side. So thank you very much and I guess we will talk to each other over the coming weeks web latest in around 3 months' time. Thank you,