Our year was historic in many, many ways. We exceeded 1 million active customers. This is in a country with around 8 million adults, so one out of eight. We exceeded SEK 1 billion in sales, which has been our target from the start of our company, the launch in 2018. We did that with profit as well, our first full year with EBIT profitability, 1.5%. And also as a quality sign, we IPO'd on the Nasdaq First North market in September, and welcomed a lot of new shareholders, institutional, as well as private. So we're very satisfied with the year, and it's a milestone for sure that we achieved. Looking into Q4, we're happy that we maintained our KPIs, our cost KPIs.
It's very important for us to continue to scale on our fixed cost base. Also improving what we can control, marketing costs, logistics costs, et cetera. We also strive to grow faster than market, which we also achieved. We have made a strategic announcement after the quarter in tripling our logistics capacity in order to fulfill our financial goals, which is to triple revenues in the next five to six years. So I'll talk about more on that later on. Q4, we saw solid market demand. Our market is very really strong in all environments, and that has continued to be the case. Consumer demand is solid, especially within prescribed medicine.
However, we did see in the second half of the quarter very strong price competition, so that impacted our gross margins. All other KPIs are stable. It's also important to note in our model that we have a very low exposure to premium or expensive products. So, 85% of our products cost less than SEK 300 , equivalent of 28 or similar EUR. So we don't see any sort of trade-down effect, which beauty players have been talking about lately. All of our product segments are very solid and continue with strong demand. So, we need to continue to be very competitive and improve our competitiveness in order to also maintain and increase our gross margins. Looking into the year, very strong performance from prescribed medicine, also known as Rx.
So we added SEK 50 million from that area, which is 47% growth. All other self-care products also contributed strongly and evenly across the different categories, SEK 122 million in total. So this enable us to go past the SEK 1 billion milestone in revenues. With that, I'll leave to Nick for a further dive in the numbers, and I'll return and talk a bit more about the future with our logistics.
Yep, and just as important as growing on top line is improving our profitability, which we succeeded with during the year, growing EBIT by almost SEK 24 million. And a key measure for us is looking at how much gross profit growth that we generate converts into EBIT growth, and there we have a best-in-class development of 52% of our gross profit growth is converting into EBIT growth. Now, going into Q4, 15% growth during the quarter, net sales growth during the quarter, which based on the market figures that we saw, was above market. We hit an all-time sales record in November.
It was a competitive market, as Björn mentioned, and that has impacted our EBIT margins during the quarter, really just on the Gross Margin level that we were getting on traded goods. Ended the quarter with SEK 45 million of cash, which we'll go into a bit further, and we continue to have tax loss carryforwards that we can use in the future to apply towards future gains, so we won't have a tax cash cost going forward. Sales development, Q4 was particularly strong on prescription drug sales, where we grew 50%, and contributing SEK 50 million to our growth. As mentioned, very competitive environment, which impacted our growth on the traded goods. It's a balance with, you know, balancing margin and top-line growth.
We pushed from a trading perspective where we thought it made sense and where we were gaining incremental profit, but we weren't willing to go down too deep on discounting where it wouldn't have been incremental to profitability. So for our Rx, given the strong development we've had during the year, wanted to show the trend that we've had going back to 2024, and you can see a clear upward LTM growth. And what's very important for us from a prescription drug sales perspective is customers that buy prescription drugs, their purchase frequency is 2x that of customers that are not buying prescription drugs with us today.
So a very important customer group for us, and with higher average baskets, it's a pathway for us to and continue to grow our profitability and grow sales, as the online sales of prescription drugs is the fastest-growing segment for pharmacies. Order economics perspective, you know, gross profit, and we'll see the Gross Margin. We had a decrease from prior period, but still contributing to 10% increase in our contribution 2. But where we were successful really is keeping costs down on the fulfillment and marketing spend, where those costs grew at a lower rate than sales, which helped us pick up some margin points on contribution 2. So it's...
What we've shown QoQ is we're really able to maintain our marketing spend and not just grow that as sales grow. You know, at 6.5% of sales during the quarter, we think that's a level that around where we want to be at. But again, it's that balance of where we see opportunity to grow. We're not gonna hold back on our marketing spend, but we you know have our profit targets that we go after, and we balance our Gross Margin with our marketing spend. Now, from a Gross Margin perspective, what we can see is there was effect, of course, from the campaign pricing pressure that was out in the market.
I mean, we are out there working with our partners to get contribution from them, from our suppliers, to support when there's market pressure on pricing and to do campaigns together. But as we tried to balance that with top-line growth and ensure profitability. But we saw a little bit over one percentage point of margin impact from having lower margins on our traded goods than we had prior year. That is something that really came up this quarter. We haven't had that type of margin pressure during the rest of the year, so it, you know... And we see already in January that margins have lifted. So, we think that's a transitory kind of Q4 instance that, you know, we experienced this year we hadn't experienced in previous year to the same degree.
But, you know, something that we will work on and getting that understanding of how to navigate Q4 next year, seeing what we saw on the market this year, and how do we work together with our suppliers to manage that. Other aspect impacting Gross Margin was we did have a higher mix than normal of prescription drug. So that had some impact from a Gross Margin perspective, but again, those are higher average order value products, and they deliver good gross profit per order. So it's not... We don't view it as a negative that Rx or prescription drug is contributing at a higher rate than... See that as a positive going forward, particularly as seeing where the market is going with online prescription drug sales increasing every quarter.
From an OpEx cost perspective, we had a little bit higher cost than last year, and part of that is due to some salary adjustments that we made in April. Annual salary increases, but also some step up in salary for some people. And then there's, you know, a little bit small costs here and there. Some, you know, small increase in our cost base from being a listed company, which we weren't last year. And some incremental costs that we had related to prescription drug. But we feel we have strong cost control. It's in kind of the ethos of Meds to have always questioning costs that we're taking and making sure that they're driving value.
You know, we're not seeing a big shift in, in cost from QoQ either, so, I think we, we will be able to continue to leverage on our fixed cost base as we did, in 2025, where, you know, we are able to grow, our gross profit and, and have that fall into, into EBIT going forward. From a cash flow development perspective, we, we took some bets, I can say, on, on the purchasing side, going into Q4. In previous years, we've had, some sellouts on, on key products and in, in our assortment, and so, you know, we left money on the table from that perspective.
So, you know, we went into Q4 saying: "We don't want to leave sales for customers that they can't fulfill their orders or they can't get the products that they want." So we ended the quarter heavy on stock, but it is stock that we sell year-round. So this isn't stock that we're going to have issues selling out of, it's just we bought heavy going into the quarter. But this is the plus side of this, is we're able to see kind of true demand and not have the effect from stock outs. But team is working on, you know, naturally reducing the stock level, and we've already seen that during January and February. This inventory levels will normalize over the coming months.
It's not an issue where we're concerned of having to do stock write-offs. It's normal product that we generally buy that we have bought in on campaign, and so we should have no problem normalizing inventory level going forward. That also leads into, you know, balance sheet position. As you can see, we've got higher level of inventory by about SEK 40, a little more than SEK 40 million than we had last year. If we were to look at our kind of normalized level of working capital, the impact from being overstocked from a cash perspective was around SEK 30 million or so. But as mentioned, we will pick that up over the course of the coming months and get back to normalized levels. I'll turn back over to Björn to talk about our exciting-
Thanks, Nick
- news on logistics.
So we have talked about during last year that our current lease we have canceled that from year-end, and that we have been looking extensively for our next warehouse, and we're happy to report that we found it. It's a very good market for us. A lot of warehouses available and we have achieved a cost-neutral deal, which is important, and it's also what we signaled last year that we were looking for. So costs will not increase during this year or going forward compared to our current cost for warehouse, but we will get triple the capacity or space, or almost triple. So it will allow us to fulfill our financial goals and beyond. Another key feature that we're happy to get with this warehouse is flexibility.
So it's a rather short contract, just over five years, that we can extend, but also we can extend further. So we are able to build another 10,000, and there's also adjacent space in the warehouse that could potentially free up. So we could potentially stay here for a very long time, and that's important. As we grow and continue to add automation also, it becomes more and more complicated and costly to move. Right now, we don't see it as a major issue. We have moved before, but in the future, as the bigger we get, the harder it will get. So we're happy to be able to have that flexibility and be short term if we see that need or stay and grow if we want to.
So it's hard to see 10 years or beyond in time for such a fast-growing company and dynamic industry. So having that flexibility then is very important. We don't lock ourselves into a potentially bad decision, but we also plan for success. So this will entail a move after summer, and it will impact... Of course, the warehouse staff is not employed by us, so it's primarily customer service and pharmacists, which of course, have known about this for some time. So we have current negotiations ongoing. Everyone will be offered to move. Some might think it's the commute is too long, which we respect. They also have a very good job market.
So we think we will end up in a good situation for the staff and also have good access to a talent pool in Eskilstuna. So it's a fantastic place to build. It's a very cost-efficient place to build the business, and we will be able to achieve all our financial goals with this move. So looking at the location itself, also potentially brings even faster deliveries to the West Coast. It's a bit closer. A lot of transportation passing by on the way, so we could tap into that. Also very close to our current main market, Stockholm, of course, and we don't foresee any substantial shift in our abilities to deliver fast, in our region either.
So, it's a place where you find Amazon and many other big e-coms having their central warehouse, and that's for a reason, the very business-friendly municipality as well, so that also helps us a lot. The infrastructure is there, from staff to transportation and beyond. So our new warehouse will also enable us to add further automation. Of course, we're amongst the furthest ahead in our industry relative to our size. We automated a lot, more than many others. So around 50% of our warehouse today is automated. There is potential to automate up to maybe 75% of the workload. There are no fully automatic warehouses, even though you might see that in media sometimes.
Still, hundreds of people work there, because there are no machines or systems available today to cost efficiently handle the 100%. So, what we'll continue to add is what we have today, which is sorting and packaging. That's a lot of the time spent in a warehouse. And over time, we'll gradually add some picking automation as well. But, in line with our previous guidance, it will be tens of millions of SEK in investment, not hundreds of millions of SEK. So we will not have any sort of stretch on the balance sheet. We have available cash if we need to, and we'll make investments as they-...
are needed, and as we see a very strong return on that investment, we will not jeopardize or take any type of risk because it's so efficient as it is. We have the most efficient, I would say, logistics today. We deliver almost every day, 100% of what we're supposed to, and we can continue to scale for many years with our current structure. So of course, we'll have more space now that will add some more efficient placement of our sorting systems. We'll also be able to add facilities for our pharmacists that are better than they have today. So there's a lot of improvements that we'll be able to achieve and be even more efficient in our automation or logistics setup and going forward.
So continuing on the topic, there has been a lot of discussion, and of course, we have been vocal about how unnecessary the regulatory change that has been in place since first November is. And we gave this update or projection in the Q3, and we stand by it, now that we have been working with the regulation in a few months, that the impact on us is very minimal. And the reason is there are very few of our deliveries that are actually impacted in absolute terms. So many, the majority, already go to parcel boxes, pickup points, or to mailboxes, which are still allowed, but the personal or the contactless delivery to the door is not possible going forward with OTC and prescribed medicine.
We have good options for personal delivery in populated areas, but in not so populated areas, there simply aren't any cost-efficient or even available deliveries to make that type of delivery, and that impacts specifically elderly, immobile, and those without access to a car living in small, rural areas hard. Those individuals do not have much choice, which means that they will likely, what we have seen, we have seen no consumer change, continue to buy from us, but of course, their daily lives will be much harder. It's... there's no need for that to happen. We really hope and believe that this regulation will be followed up in the future, as promised, and hopefully improved. But for us, there is no substantial impact.
So with that, we will go over to Q&A. First, just touching on our financial calendar, which is also available on corporate.meds.se. Our next report is April 23rd. So you are able to, in the chat function, write English or Swedish are fine. So if we have any?
Sorry, if you said this, I missed it. What is your best estimate of the market growth online and in quarter? I'm asking because there are obvious issues with how only pharmacies can account for online versus offline sales.
Yeah, it's a good question, and we don't have the full answer. So we have seen some industry figures ranging from 14%, but it's also preliminary. And then when we take into account what we've seen reported in the market, it could potentially be slightly lower or higher. So we have to wait, I think, for the full figure. But that's our best guess right now, that it is around 14%. And to your question, the omnichannels, as we said all along, our main competitors are ICA and the state-owned Apoteket. Those are the companies that have been growing and taking market share for many years now, and along with us, of course.
And they continue to grow strong, and some of that, a substantial part of that even, is click and collect. So, is that truly e-com or, or is it just another way to report store sales? I don't have the answer to that. For us, it's a substitute, potentially, so we see it as competition, and we want those customers to rather buy and get delivery, of course. So, yeah, we'll continue to see those players as our main competitors and make sure to be better and be our customers' favorite, so they don't go and click and collect in the stores. But it's something we've seen that consumers have discovered, that by doing so, they get 40% lower pricing.
In the end, it's not sustainable, I think, for to have two different price structures in the same store, depending on if the customer ordered online two-hour before or not. So, we'll see how this plays out. In Norway, we know it's not allowed, so the it's the same E.U. regulation in the base that has been interpreted differently in our two countries. So, well, that's the best answer we have. We look at the total growth, and we want to capture as much as possible of it. It does point to consumers being more mature and buying online and then seeing different delivery options, and hopefully preferring the home delivery or the box delivery before actually standing in line somewhere.
... Perfect. Laurin here. I was wondering as well if you could put some numbers on your growth composition report here. What, what is related to order volumes and, and what is related to AOV?
So the vast majority is on volume. AOV was actually a little bit lower than what we've been having the previous quarters. So part of that was, although Rx was a larger share with us having, you know, kind of the price pressure on, on the traded goods that brought down the kind of AOV on those traded good only orders. So it was primarily just volume.
All right. So AOV down low- single digits, it sounds like?
Yeah.
And finally for me then, your overhead cost rose more than I'd expected. Your headcount is flat YoY, so I'm assuming there's something else hiding in these figures. You alluded to this briefly in the presentation as well, but I was wondering if you could give us some additional color here. Are there any costs of a one-off nature related to, for example, the upcoming warehouse move or anything of the sort?
I would say... I mean, there's when it comes to, I'd say, just the personnel, so some of that was, you know, kind of bringing some of the team up to market-level salaries that we had, that did that adjustment kind of in April. So, we see that effect in Q4, but wouldn't have seen it last year. And then just your annual salary increases as well, leading to increase in personnel. But then, you know, also it is the... While they're not our own headcount, we do use consultants on the pharmacy side or contractors on the pharmacy side. So, that cost has increased as we've grown with Rx.
It's not substantial amount, but it, I mean, there's a lot of little pieces that lead to the increase that we've seen, and a lot of it is more, okay, compared to, to prior year than it is on a kind of, quarterly basis or a monthly basis that we're tracking. There is what we could call some non-recurring, but you're always gonna have some level of non-recurring costs that hit a quarter, so we didn't include them in, kind of adjustments. But, you know, there's SEK 300,000 or SEK 400,000 in there that you say, "All right, this is, we took this cost in this quarter." It's not something we expect to see going forward, but, you know, you're always going to have some level of operational cost that's sort of one-off purchase in nature.
But nothing related to the new warehouse or any of that.
Right. Thank you very much.
All right, with that, we conclude today's presentation. It will be available on our website as well. As always, ir@meds.se for further questions. Thank you very much.