Good morning, and welcome to the presentation of the Quarter Four results of Rusta. This is the last and smallest quarter of Rusta in our fiscal year that runs from first of May until end of April, and this is therefore February, March, and April. My name is Göran Westerberg. I'm the CEO of Rusta, and I will present the results together with Sofie Malmunger, who's the CFO of Rusta. And we will take you through both the quarter and also the full year results. So the agenda will be, as usual, I will run through a business update, and then that will be followed by a more in-depth financial update by Sofie, and then I will do a quick summary and open up for questions. So first, the business update.
Just to have a look at the store network development since last time. By the end of the quarter, we had 212 stores. We opened four new stores during the quarter, and we're now up to 48 stores in Norway, 112 in Sweden, 42 in Finland, and 10 in Germany. After the end of the quarter, we have also opened up another store in Norway, actually yesterday, and we've also added three new locations. So, in the list, a prioritized list of what we're having, we can see that we've had a net increase in the store pipeline going forward. So we're now up to 29 locations that are either signed or approved that will be open up.
And that is in spite a number of stores being open in the last few months. So I think the pipeline, it has been strengthened, and that looks really good. Another thing that we can point out here is that most of the store openings now are actually in Sweden, and that's not something that we expected a year or two years ago. But that market has actually developed quite good. We have a good pipeline, and we see many opportunities here. And one of the reasons we like that is because that's our oldest and most mature market. We know that it's usually harder to find the last few locations, so I think this is really positive.
But we also have the highest profitability in Sweden, which means that the payback time here is actually the strongest. So that's really good, both long term and short term. Moving over to the quarter. The last quarter is also the smallest quarter for Rusta. It has historically always been a loss-making quarter and so it is also this quarter. The numbers that you will see now fully reflects the negative impact of the Tietoevry incident, and the only adjustments that we have done is due to the IPO. And also, during Q4, there have been no adjustments, so there are no costs for the IPO. The total sales development was +2.9%, but we had a negative like-for-like development of -1.2%.
But what, what I would like to mention here is that we would have been in the positive if you take away the, the effect of the Tietoevry IT incident. We managed to strengthen the EBITDA by 2.6%, very much on the back of continued margin strengthening, which is in line with what you've seen in previous quarters and also completely in line with our guidance and our strategic priorities. Looking at the full year, again, fully reflecting the negative effects of the Tietoevry incident, we had +9% over the year and a really strong +4.6% like-for-like over the year.
We're especially proud of a really strong positive development on the Adjusted EBITDA, plus 45.7% over the year. Again, very much on the back of both sales growth, but also a gross margin that is much closer to our normal historical levels. Some of the key events during the year, of course, includes the improved margin that I've been talking about. This is not at the cost of our price position. I really want to underline that. We have a comfortable price lead in most of our important categories. This is more over the year, both a combination of better transport prices in the beginning of the year and towards the latter part of the year, more and more purchase price development.
That we're really using the volume growth that we're having in negotiating better prices and also increasing scalability through our value chain. So this is really Rusta functioning as it should, so really delivering on that. We've also continued to expand. We opened a total of four stores during the quarter and 11 stores during the full year. We've also had some headwind during the quarter. We had an unusually cold and late spring, and I can say that February and March are usually quite uneventful months at Rusta normally. It's not seasonally driven. They are among the smallest months during the full year, and nothing really happens during those months. This quarter is about April, and it's about how early the spring starts.
If you have a couple of warm weeks during towards the end of April, that can really push this quarter in a positive direction. However, this year, in all of our biggest markets in Sweden, Norway, and Finland, we had snow far into the month of April, and it was unusually cold by any measure, and that negatively impacted the summer season, the products that has to do with summer. If we look at the business area development, we actually had good development in the other areas, in both home furnishing and in consumables. But we would have needed more of the, you know, the barbecues, the parasols, the outdoor furniture, and so on. But when you have snowstorms, that's obviously very difficult to sell.
So we had really had a negative impact of April. We also had to carry the lion's share of the burden of the IT incident. In Q3, we had a negative impact of it, but we also flagged that it would be bigger during this quarter, which it has also become. And the reason we have a bigger headwind in this quarter is that most of the cost for rectifying and building up the systems, consultancy costs, overtime payment, catching up, and so on, in our delayed deliveries and so on, most of those costs ended up in this quarter, and that's also why we had a significant part of the negative EBITDA effect here, SEK 48 million. But Sofie will go through much more of that.
I also want to say that I want to reiterate what we said, that now we've seen the end of it. We don't see any significant cost going forward. We have been back in normal operations since long, and we're, of course, really, really happy to leave this part of the year behind us. Some key events after the quarter, you know, looking into the future, some things that we have done. One is that we've opened a new sourcing office in Turkey, and this is completely in line with our main strategy, to be as close as possible to the leading and most important suppliers that we have around the globe.
We already today have significant purchases in Turkey and in the surrounding countries, and for this move is both a way for us to see that we have, I should say, bigger focus on markets closer to our sales markets. We know that we're living in a more insecure world today, where global supply chains are sensitive. This is a way for us to have a B plan, also to build up alternatives to purchases in the Far East. But it's also a way for us to take a stronger grip on both quality development and sustainability development in our entire supply chain. So this is really something that we want to build for the future in our global sourcing organization.
We've also seen on the back of our growth and on the back of our volume-driven growth, that there's been opportunities for us now to further increase efficiency in our supply chain, even in the distribution center. Capacity we have, but we've also seen now that there is a possibility for us to work more efficiently with manpower, also reducing the need for trucks and so on. So we have decided to implement a system that's built on goods-to-person logic. Basically, that the products are coming to a picking stations, where persons are then sorting it and packing it to move out. It's a total investment of under SEK 300 million. The payback will be under 5 years, and the...
It will be a positive EBITDA effect already in the first year of operation, which will be FY 2026, 2027. So we think this is a very positive step, and that will also, as an added benefit, increase our capacity even further. After the quarter, we had a very cold April, as I said, that had a negative impact on summer sales, but fortunately, May was really good. It was good weather, warm weather, and that was more than enough to compensate for the bad development in April. So as a whole, considering the spring and the start of the summer, we've had a good start on summer sales. And why is that important?
Well, that usually goes a long way to support our gross margins in our first quarter, because the more of our summer sales we sell in the beginning of the season, the less the need for sellouts towards the end of the quarter. So, all things considered, we believe that we're in a good place when it comes to the summer season, and that this will overall be good for continued positive margin development. Some of the achievements I want to mention, you know, turning to the full year and some of the achievements. One of the things that we've talked about during the last quarters is the change of behavior, the influx of new customers into low price, and in particular, Rusta. We see that very much reflected in our loyalty program.
We're now at the end of last quarter, up to 5.6 million fully registered Club Rusta members. 150,000 members were added in the last quarter, and again, mind you, we this was negatively inflicted by the IT incident again, because our systems were down for a total of a month, where we could not recruit new members. But in total, during the year, in spite of this, 850,000 fully registered new members, which is an increase of 18%. So the largest loyalty program in low price in the Nordics just got a whole lot bigger. And I think this is important for us long term, because these are members that we can now work with.
We know that they usually have a much more positive trajectory in ticket value and visitation frequency, and so on. So this is positive. Another important strategic priority for us has been to increase the share of Private Label. At the time of the IPO, we had 64% of our sales under our own brands, under our own Private Labels. This has increased by 3%, which is quite a big step. So we're now up to 67%, Private Label share in the company, and we expect this to continue to grow. I think the last thing that I really want to underline again is that during the year as a whole, we're solidly back into volume growth, and this is so important for our business model.
It gives us scalability, and it gives us better purchasing power with our suppliers. So I think this also helps to support the positive gross margin development that we've seen so far during the year. Now I turn over to Sofie, that will take us through the financial performance.
Sure. So, we will start by taking a closer look at our Q4 numbers, but, first, I would like to continue the guiding regarding the seasonality in Rusta's quarters. Rusta has a financial year that stretches from May to April. Q1 and Q3 are generally our strongest quarters in terms of sales and profit, mainly driven by the summer and the Christmas season. Q2 and Q4 are generally our smaller quarters, and today we are presenting Q4. The negative profitability, just as Göran said, in Q4, has to do with the seasonality, with lower sales after the Christmas season and before the summer season kicks off. It's also a very weather-dependent quarter in that sense that a warm April means that sales kicks off earlier, and a cold April, that sales are moved to the first quarter of the next financial year.
So for the Q4, we have a total sales growth of 2.9% and a negative like-for-like of 1.2%. These numbers are lower than previous quarters this year, which is explained by the negative effect of the IT incident and also by the cold April. We're meeting two years of strong fourth quarters with high increased sales, both in total and like-for-like numbers. On the positive side, we have a gross margin that has increased with 2 percentage points, which is then an increase of 8%. We have an adjusted EBITDA of -2.1%, but that is 0.1 percentage point stronger than last year. There are no adjustments, just as Göran said, so the IT incident has not been adjusted for. It's fully reflected in the results.
For the full financial year, we can now summarize strong increased sales, improved profit, and improved margins. We have a total sales growth of 9% and a like-for-like growth of 4.6%. In addition to the strong sales, we have a gross margin that has increased with 2.4 percentage points, which is then an increase with 15.5%. We also have an Adjusted EBITDA of 7.1%, that is 1.7 percentage point stronger and an increase of 45.7%. And the same here, adjustments during the year are only for IPO costs, nothing else. The IT incident has not been adjusted for. So short summary of the full financial year is that Rusta take clear steps towards the midterm financial targets with increased sales, improved margins, and profitability.
The financial effect by the IT incident in the fourth quarter amounts to a loss of SEK 61 million in sales, with a negative EBITDA effect of SEK 48 million, which includes both lost profit and extra cost. This is in line with what we have communicated earlier. The total effect for the full financial year is then a loss of SEK 120 million in sales, with a negative EBITDA effect of SEK 74 million. Looking to the right, you can see that our fourth quarter, excluding the IT incident, would have been 2.8 percentage points higher in sales. That means that we would have had a net sales growth of 5.6 instead of 2.9.
We would have had a like-for-like growth of 1.4 instead of a negative like-for-like of 1.2, and an EBITDA margin of 0 and actually profitable instead of minus 2.1. This means that our smallest quarter for the year, that always has had a negative profitability, would actually have been profitable above zero without the IT incident. As for the full financial year, we would have had a double-digit growth of 10.1%, a like-for-like growth of 5.7, and an EBITDA margin of 7.5. Just as Göran said, we expect no material financial effects due to the IT incident beyond this financial year of 2023-2024. We have an ongoing discussion with Tietoevry regarding compensation and might shortly commence arbitration proceedings.
Looking at our markets, we see negative effects of the IT incident, which affects both sales and profit. The numbers you see here for sales are excluding currency effects, and the gray boxes at the top shows the loss in sales and profit for each market due to the IT incident. Sweden and Norway had a sales growth of 2.5 for Sweden and 7.7 for Norway. To the right, you can see the profitability in these markets, which are 10 for Sweden and 3 for Norway.... Our third segment are the markets consist of Finland, Germany, and online. The impact of the IT incident is higher in this segment.
Online was unavailable for about a total month, and the replenishment of goods were prioritized to the larger and closer markets during the IT incident, which were then negative for Finland and Germany. Sales growth are 0.1 for other markets in Q4, but it would have been 3.1% excluding the IT incident. The profits is negative, but it would have been 1.4 percentage point higher without the IT incident. If we look at the full year, we can conclude the performance for each segment. We see a strong performance and growth in all our markets, with increased sales, improved gross margins, and increased profit. Sweden has a sales growth of 6.2% and an increased profitability to 16.8%. During the year, we have opened three new stores in Sweden.
Norway has a sales growth of 7.9% and the profitability of 11.6%. The slightly lower EBITA margin compared to last year is explained by negative currency effects due to a weaker NOK, and also a 0.5 percentage point negative effect due to the IT incident. During the year, we have opened four new stores in Norway. Other markets have a total sales increase of 16.5%, really strong, and an improved EBITA margin of 2.9 percentage points, which then means that our most immature segment are the markets now are profitable on the full year, and it would have been even more profitable without the IT incident. We have focused on increasing the gross margin to ensure a positive effect of the profitability.
We also see a very positive development in profits for Finland, and during the year, we have opened four new stores in other markets. Our profitability has continued to increase during the year, and if we take a closer look at our adjusted EBITA, we see some clear profit drivers. If we start by looking at our fourth quarter, we see positive effects of improved purchase prices from Asia in our gross margin, which is in line with what we have guided on previous quarters. We also see positive effects due to optimized sales prices, which is mostly a year-on-year effect of a general higher sales price level compared to last year. There are also some positive effects due to a healthier level of our inventory, such as lower obsolescence reserves and similar.
For the full financial year, we have managed to increase our adjusted EBITA from last year's 5.3%- 7.1%, as you can see here on the slide. The profitability drivers for the year are higher sales, where volume is the single largest driver to the overall growth, both in total and in like-for-like numbers. We also have optimized sales prices, reduced shipping costs, and positive inventory effects that also we have increased our gross margin. We have slightly higher operating expenses, which is due to extra costs for the IPO during the year, also extra cost due to the IT, and then, of course, the inflation. The depreciations are slightly higher compared to last year.
So to summarize, despite inflation and costs for 11 new stores compared to last year, Rusta has managed to increase the profitability, and the adjusted EBITA has increased with 45.7%, which we're very proud of. And then some comments on our balance sheet and cash flow. We have worked actively with working capital during the year. Despite higher sales and 11 new stores, our inventory has decreased with 2%, compared to last year. The inventory would have been even lower with a warmer April and an earlier start of the summer sales. The value per item is lower compared to last year, thanks to lower freight costs and lower purchase prices, and this will continue to have positive effects on our gross margin in the coming quarter.
Thanks to the improved profit and positive change in working capital during the year, we have had very limited use of our overdraft facility. We are positive in net cash of SEK 130 million at the end of the quarter, compared to a net debt of SEK 255 million last year. We're using SEK 380 million less of our overdraft facility compared to last year. Cash flow from operating activities has been negatively affected during the quarter due to the IT incidents, since the deliveries and the payments from Q3 were partly pushed to Q4. But for the full financial year, we have a cash flow from operating activities of SEK 1.4 billion, which is an increase of 39% compared to last year.
So all in all, we have a solid balance sheet, we have a positive cash development, and a very stable financial position. Then some words on our financial targets. We are committed and feel confident to deliver on our financial targets. Our accumulated numbers for this financial year shows that we have a total and like-for-like sales growth well above the 8% and the 3%, and we have an EBITA margin moving towards the 8% in the medium term. Earnings per share grow with 56%, which is higher than both sales and EBITA growth. And regarding the dividend, the board proposes to distribute 1.15 SEK per share, which then means 43% of net profit and a total of 175 million SEK.
This is in the higher end of our dividend policy of distributing 30%-50%. Last year's dividend was SEK 0.69 per share. And with that, I hand over to Göran.
Thank you. Let me see. Yeah, so just to summarize, I think with that, we're adding yet another year where we, in spite of how shall I say, not so positive macro and also certain incidents that are external that have somewhat hindered us, we're adding another year of profitable growth. So we reach a total of SEK 11.1 billion, almost SEK 1 billion higher than last year. And I think this is really goes to prove the resilience of the organization, the culture, and also the strength of the cost concept of Rusta. I again want to reiterate that this is, I would say, by no means the most positive environment for Rusta to be in, as I say, in a slow economy.
We usually excel when the economy turns to the better. So, from our point of view, we really like what we're seeing with improved consumer confidence and a stronger economy. Looking at the strategy, going forward, this remains very much the same. It's to maintain the low price position. That's the number one priority for us. That's the job that we're doing for our customers, and we believe with the strength of our purchasing machine and the increased efficiency that we have in our value chain, we will be in a position to deliver those low prices better than anyone in the segment. We're also gonna work with a very differentiated assortment, and introducing news to the market will be important for us going forward.
As we've said before, Rusta is very much on an organic case, and where like-for-like growth is really important. During the last year, we have prioritized gross margin normalization to our historical average. But as we move along now, and we see that we're closing into the gross margin, more and more of our focus will be to use some of that efficiency to actually propel growth again, and especially low like-for-like growth. Further increase efficiency across the value chain. You've seen a couple of initiatives on that, both the opening of Turkey during or after the quarter, but also the investments that we continue to do in Norrköping, in our distribution center.
This is all in line with making sure that we have scalability and efficiency, and that we're really leading in the way that we're building our value chain. And of course, we will continue to open stores. We've opened 11 new stores during the year that just passed. And looking forward now, we see that the influx of new store locations that are approved or signed has actually increased over the year, in spite of the openings, and I see that as a very positive sign going forward. So, with that, just summarizing the year, +9% total growth, a like-for-like of 4.6%, 45.7% improved adjusted EBITDA growth, with fully reflected negative effects of the Tietoevry incident.
Also a proposed dividend at SEK 1.15, which is higher than last year, but where we both in management and the board are comfortable that we can do all of the investments we do, and maintain our strong financial position, and still deliver this dividend. So with that, I open up for questions. Thank you for listening so far. Oh, so...
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Daniel Schmidt, from Danske Bank. Please go ahead.
Yes, good morning, Göran and Sofie. A couple of questions from me. Just want to sort of touch on what you finished off by commenting on, when it comes to influx of store location. I think you started off the presentation by saying that you have 29 locations signed for the future, if I'm not mistaken. That's what I heard. Sort of, could you just give us some sort of shed some more light on when those locations likely are gonna be open? How many is gonna be sort of in place in the coming fiscal year, for instance?
I would say that most of the influx coming, because it, it's usually quite a long lead time. So I would say that the a minor part of this will be in the near future. Most of them will be further down the line. But you can say that this influx supports the ability for us to continue to be at a double digit, you know, opening rate of stores, in number of stores. So I think this makes us feel even more comfortable in opening the 40-60 stores over the coming three years. We maintain that, and I think, as we have discussed earlier, we have not relied so much on the Swedish market, more relied on the international market.
But now, having such a strong influx in Sweden makes, I would say, possibilities even higher going forward. But I wouldn't change guidance so far. More to say that this makes us even more comfortable with the current guidance.
Basically, you're more comfortable with the upper end, maybe?
Yeah, it's not less likely.
No.
No.
Okay, good. And just coming back to the gross margin, where you, I think, surprised us at least. And of course, you talk about the better purchase prices and then probably lower freight costs as well. But you also mentioned positive inventory effects and obsolescence and shrinkage, I guess. Could you give us any idea how much of those 200 basis points related to positive inventory effects?
I would say that it's quite even between the three that we mentioned. But,
Okay
... I mean, the inventory effect, the obsolescence reserve is, of course, positive. And just as I said, we've worked a lot with the inventory and making sure that we have a healthy inventory, so that's a very positive development.
Yep. And then just also coming back to sales in the quarter, and April is, of course, a very important month in that quarter. You've been very clear about that. And you had snow on the ground in Helsinki and Stockholm and so on, as late as 25th of April. So reasonably, that had a fairly big impact. Would you dare to quantify the sort of the weather effect on sales in April?
What we can say is that just to give you a, you know, a little bit more flavor to what we're talking about. In the quarter, April corresponds to about 40% of the total sales in the quarter. That's how important, I mean, it's almost half of the sales in... I would also say that it's a much better mix effect in April, usually, because you have more higher tickets, higher margin items, which tend to be in the summer assortment. If you don't rely on those, and if you take January, February, March, they tend to be skewed towards consumable items, must-have items, which tend to have a lower margin. So April is-
Mm-hmm
... is both important from a top-line perspective, but it's also, I would say, even more important from a gross margin, you know, a mix effect, as a whole. So it is really important. And I would say that even in April, it's even the part of April that's important, and that's usually the two last weeks. Those are super important.
Yep.
Mm-hmm.
Okay, good. And just maybe finally on costs again. And you've had this tailwind on sort of coming off extreme highs on freight costs, but then again, we've seen freight costs moving up again.
Mm.
Actually, as of late, it has been ticking up quite a bit. How should we look at that, looking sort of modeling the coming quarters, and how does that stack up against the lower purchase prices?
Sure.
Um-
Sure.
Could you give us any idea how we should think?
Sure.
Yes.
So, yes, sure. Can I? I can just-
You start
... start, and then, you'll add on. Just to explain the year, very much of the margin development in the beginning was due on the back of basically improved transport prices. That has evened out, and towards the end of the year, it's been taken over by strength in purchase prices. And you're right, you know, from much lower level than previous, they have started to climb now again, and I say the spot prices right now are quite high. However, the net effect is still positive. The purchase price development we have is much stronger than the transport costs. So, and that's how we see that it's gonna take over, and that's going to continue.
So even though we see higher transport costs going forward, we believe that the purchase price development is stronger and bigger, and that the net effect will be positive for our gross margin development. And then I'm sure you can tell even more about that.
Yeah, but you were great.
Yeah.
To be specific, it's the sea freight cost, and just as you said, Daniel, it has increased during Q4. Since there is a delay, compared to when you see the higher cost than when you get the effect in the gross margin, we can see that costs were higher in Q4, but it did not affect the Q4 negative. It was even out, or it was plus minus zero compared to last year. But we can see that there will be a negative effect during Q1, but the positive effect, just as Göran said, of the lower purchase prices, will even out that, that or will be balanced between the both of them.
Mm-hmm.
So on-
Yeah
... our guidance, when it comes to the Gross Margin, we very much stick to what we've said before, that the normalized Gross Margin for Rusta is somewhere between 44% and 45%. We ended this year, or the full year, we came up with 43.5%, and we see possibilities to strengthen the Gross Margin even more than towards the 44%-45%.
Yeah. And, and maybe a very theoretical question on that, if you extrapolate or if you keep these rates steady and what you see in terms of lower purchase prices, is there any stage where you sort of at the end of the new fiscal year that you're entering now, where these two effects trade places, and that they end up being slightly negative? Or will you sort of be able to sustain the current freight costs with better purchase prices all through the year, basically?
Well, it's very hard to say something about, I mean, when it's in a year.
Yeah.
What we can say and be quite certain about is what will happen during Q1 in our cross, Gross Margin-
Yeah
... and also with some certainty regarding the Q2.
Mm-hmm. Yeah. Okay, cool.
I would say freight cost is particularly hard to say something intelligent about, you know, far away from now. It will probably, the situation that we have right now is likely to continue for a while at least, but one year from now, I would say it's completely impossible. Then I think I would say the same as you, that purchase prices, that development, that seems to continue, and there's a lot of things driving that as well. I mean, it's both our volume development, the investments that we're doing in our supply chain and in our sourcing organization. And I would also say the early summer sales now is also supporting gross margin development.
I think, you know, all things considered, I think there's a lot of structural things that benefits us from a Gross Margin perspective, now, even though there are some headwind in some areas.
Yes, and as for the purchase prices-
Yeah
... we, I mean, the lowest or the highest decrease has come from Asia, and now we see a more shift where Europe is actually following as well.
Mm-hmm.
So even though the-
Mm
... positive effects we see now comes from the Asian assortment. There will probably be positive effects from the European assortment going forward as well.
I would like to add also, since we're on this topic also, that you, we will also, and we have partly started also to offset gross margin expansion, and invest that more in driving growth, and especially like-for-like growth. So we will somewhere during this year start to shift gears more clearly, that we will normalize gross margin, and then we expect to have more of a positive effect, from our purchasing machine, let's say, but also invest that in stronger campaigns and better prices, as we come further down the line in next year.
Hmm. And you also have the rise of Private Label, right?
Yes.
Supporting that.
Yes, exactly.
Yeah.
Yes.
Look, and then just maybe finally on Turkey, as you announced a month ago, I think, have you started to take the costs for building up a purchase office in Turkey, or is that yet to come?
We have started, but they are not material, I would say, in the fourth quarter.
Okay. Thank you. That's all for me.
Thank you.
The next question comes from Simen Aas from DNB Markets. Please go ahead.
Good morning, Göran and Sofie.
Morning.
Morning.
I have a few questions.
Yep.
And I'll start with, you mentioned that you have seen a strong start to the summer sale there. Could you just give us some more color on that? It's sort of the like-for-like now back above your guidance, or how should we think about May in particular?
The strong start of-
The strong start.
... the summer sales in May.
Right.
Yeah, yeah.
So, how that compares to our financial targets?
No, just-
Yeah
No?
... some more flavor.
Okay, some more flavor. Okay, right. So, what I can say is that we're meeting some quite strong growth, growth even from last May. But this has been significantly higher than what you have seen, particularly during this quarter. What I would like to say then is that, you know, again, top line growth in May has been strong, but top line growth in May doesn't say much about what top line growth will be in June and July. That kind of stands on its own legs. However, Gross Margin development and the sales in May is positive for Gross Margin development in June and July. That's something I want to have said. So we're still in a very important sales period.
I mean, midsummer is a big deal here in Sweden, so, you know, the better the weather during midsummer, the better the sales will be, for sure. And then July is very much dependent on weather as well, how many people are actually staying here, how many people are traveling abroad, and also the size of, I would say, the campaigning. And what we see now is that since we have sold quite a lot in the early part of the season, the need for sell-outs is, I would say, much lower going forward.
Okay. So in other words, it's fair to assume that may have been positive then, given that you had negative like-for-like in Q4?
Yeah. Positive, yes.
Yeah. Okay, and then on the similar topic, you also mentioned that the gross margin is improving. Can you just give us some more color on what's driving that improvement? Do you see, for instance, any changes on how the customers behave in terms of higher ticket items this year versus last year? If I'm not mistaken, that was a drag last year, wasn't it?
Right. So, I think as we've already been into a couple of times during the conversation here, is that the main driver is improved purchase prices and scalability through the chain. I would say that, that's the main thing driving it. And then you also have some year-on-year effects on earlier price hikes that we did earlier during the year. Other than that, you know, I would say looking forward and looking at consumer behavior. We can say that we continue to see the same pattern as we have seen over a number of years, and that is that the average ticket continues to increase. The value of the basket, so to say, continues to increase, and there seems also to be an upward movement.
You know, small steps, but all the time in the same direction that the average item cost continues to climb up. And I think that's part of our movement into the middle class, and also that we're catching a bigger part of the consumer spending, so to say. A bigger share of wallet, so to say. So I would say, yes, we are seeing that now, but I see that very much in line with a much larger and longer development over the years. So it's in line with what we have seen before.
Okay, that's clear, Göran. Then my final question is on the new investment that you do in this new automation system. Can you just give us some timing on the SEK 300 million there? And also, you said that it will have a positive impact on EBITDA as early as 2026, 2027. Is that an absolute EBITDA level, or do you mean on margin improvement? And any color on how much drag it will be this year or next year, or how should we think about that would be very helpful.
Well, just as we said, the investment is just below SEK 300 million. The payback is just below five years. And it has a positive EBITDA effect the first year that we start to use it, which is then in FY 2026, 2027. When it comes to the investment, it will be quite evenly spread between this financial year, 2024, 2025, and next financial year. I believe the investment is somewhere around SEK 150 million this year, and quite close to that the year after. Some might end up in 2026, 2027, but quite fairly between those two years.
The positive effect is, I mean, it's both in million SEK on the EBITDA line, but also a positive margin effect on EBITDA.
Okay, but how much drag will it be, or how much annual cost will it add to the turnover another way?
It will not drag a lot of extra cost, and most of this will also be a part of the investment. So we can work quite normal during the time that we implement the new optimization. There will be some changes, of course, but this has been taken into the account when we say the full investment of SEK 300 million. So, and the positive effect on the EBITDA is, of course, due to higher efficiency when it comes to mostly the personal side, personal costs.
Okay, that's very clear. Thank you for that, and I'll leave the line open for other questions.
Thank you.
Thank you.
The next question comes from Øystein Engh from Watch Media Norge. Please go ahead.
Hello, thank you. Calling here from Norway. Very interesting presentation. What I wanted to ask about, firstly, is that, now that you've gone through the presentation, I didn't... But, the incident, the hacker thing wasn't was mentioned, like, briefly multiple times, but do you have an estimate of how much that actually costed you, in the broader, in broader terms?
In total, you mean, for the full year?
Yeah.
Yeah.
Yeah.
Yeah.
It was a negative effect on sales with SEK 120 million, and it was a neAative-
Yeah
... EBITDA effect with SEK 74 million.
Yeah, and that's quite a lot.
That's quite a lot.
That's quite a lot.
Yes.
Yeah.
And for-
Yeah
... for the Q4 alone, it was a negative effect of SEK 61 million, and a negative EBITDA effect of SEK 43 million.
Forty-eight.
Okay.
Sorry, SEK 48 million.
Yeah, and secondly, now you have been 10 years in Norway, if I'm not mistaken, is there gonna be some-
Almost. Almost. Almost.
In October.
In October.
Yeah, yeah, yeah. But, it's gonna be this year, at least.
Yes.
Yeah.
Will we see any sort of major sales campaigns in Norway or anything like that, you think? Will there be some kind of celebration down the line here, commercially?
We always like to celebrate milestones like that. So of course, we're gonna celebrate both, 10 years in Norway, but we also have store number 50 around the corner. So I think we have plenty of reasons to celebrate the successful journey that we've had in Norway. So you can rest assured that we will celebrate that commercially as well, of course.
Yeah.
Mm.
Interesting. And, you also mentioned that you have been relying more on Swedish market lately. And, when you, when you compare, like, when you are establishing a new store in Sweden or in Norway, is there somewhat more difficult, one place or the other, where Sweden is a more urbanized country and Norway is more rural, where it's kind of where it's perhaps more crucial to be present in that area or that area, compared to Sweden, who have, like, more, towns, bigger towns?
So, you're absolutely right that there are certain differences in how commercial centers are developed in Sweden compared to Norway. I think we tend to have more, you know, big retail parks in Sweden, whereas you are slightly more decentralized in the way that you have shaped your retail community in Norway. Having said that, I would say that in terms of expansion, we are interested in opening stores on all of our markets. I would say that we're equally interested in all markets. But usually what steers this is sometimes coincidences and also I would say the general market development.
Because for us to open, there has to be, there has to be a building, it has to be free, and it has to be both in an interesting location and also available at a rent where we can see that our financial model works as well as, as it has done everywhere else. So, so I think, you know, this differs a little bit from year to year. In the last few years, we've opened a large chunk of the new stores in Norway and in Finland. And I think that's, that's why it's also a bit refreshing now to see that we have a strong influx in Sweden, because it's, it's been fewer store openings in the past few years in, in Sweden as compared to what we see now. So I think, the...
I think that's positive for us because it's, you know, it's the fastest payback time we have also in the whole chain.
Yeah.
Mm.
If I'm not mistaken, when you open a new store, and it turn out great, it might go break even in one year. Does that differ from country to country?
Of course, it's somewhat differences. I would say that then the more mature a market, the stronger the, and faster development.
Right.
But we have a fairly... Comparing Sweden and Norway, we're fairly similar.
Yeah.
Mm.
And, lastly, for me, do you... How does a company like Rusta embrace this themselves, yourself against new competitors, like worldwide, like Temu, and like big, big businesses worldwide? Is... Are you in any way affected by that kind of competition now?
You know, the, I think this is the thing with our kind of business. We're competing with everyone all the time around the world. I mean, there has been so many new entrants, and also many strong, older, bigger concepts, and so on. And I can't particularly say that, you know, one concept or the other are more important. There are some that we have, I would say, larger customer overlap and larger range overlap. But so far, I haven't seen a, you know, a huge negative impact from any of those players. When Amazon entered, nothing happened. When Costco entered, nothing happened. We've had many different online players, you know, over the years that have entered the market, also from China, as you know.
Mm.
But I don't see... I mean, of course, at some level we compete with each other, but-
Yeah
... You know, as you can see in our development in the curve, it hasn't made any significant dent anywhere.
Yeah, yeah. Resilience.
Mm. Yeah, resilient is the word.
Right.
Yeah.
Yeah. Thank you. Thank you. That's all from me.
Thank you very much.
Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Then I'd like to thank you very much for listening. I wish you all a fantastic summer, and look forward to meeting you again after the summer when we present the results of the first quarter over the year. And until then, take care and have a good summer. Thank you. Bye.
Thank you.