Good morning and welcome to the presentation of Rusta's Fourth Quarter Results. Today, the presentation will be held by myself, Göran Westerberg, CEO of Rusta, and our excellent CFO, Sofie Malmunger, who will run you through the numbers. As usual, we have a quite simple agenda. I will go through a business update, telling you a little bit what's happened during the quarter and also the full year. Then we will turn over to financial performance by Sofie, and then we will do a quick summary and open up for Q&A. As usual, we start the business update by having a look at the store network. We have, at this time, 225 stores operational in all our markets. During the quarter, last quarter, we opened up six new stores, which is more than the same quarter last year.
We opened up one in Norway, taking us up to a total of 53 on that market, and a whole of five new stores in our home market of Sweden, taking the total up to 120. Now, the continuation of the positive development of the software rental market is continuing. As we have seen for a number of quarters now, we have again reached an all-time high in the store pipeline. The total number of signed and ready stores is now up to 47. Last time, we reported 44. In spite of us having opened six of the stores in the pipeline, we've added another nine. Looking at the guidance, we have guided the market to the span between 50-80 stores in the coming three years.
Now, seeing that the inflow of new locations is continuing at this speed and that we're also getting close to the lower end of this span, we're now guiding the market to the upper half of this spectrum. We believe now that it's likely that we will end up somewhere between 65-80 stores in the coming three years. Having a look at the numbers of the last quarter of the year, we accelerated again the sales. We're now up to 12.6% net sales growth during Q4. We had a very healthy 8.6% like-for-like growth in local currencies. Now, looking a little bit at what has happened and what's behind these numbers, you can say that we had an exchange rate effect, a negative effect. The Swedish krona has strengthened, as most of you, I'm sure, are aware of, for the past couple of months.
We have a negative effect immediately in sales currencies. Most importantly, in Norwegian krone, but also to some extent in euro. That is about a 1.9% negative effect in these numbers. Excluding currencies, our top-line growth was 14.5%. We also had a leap year, and that means one day less of trading, which means that we had a negative effect of 1% due to that. We also had a positive effect due to us meeting last year's IT attack. All in all, the 3% positive impact we had from the Tieto incident, together with the currency effects and the leap year, you can say that it is neutral. I think considering all of this, I think this is a very strong quarter from a top-line perspective. We also increased the gross profit by 7%.
As I'm sure you've noted, during Q3, we also guided the market in the sense that we have transferred focus from strengthening gross margin that we have done all the way since the IPO to now shift over more to focus driving top-line growth. We have succeeded with that, and we have achieved the gross profit growth that we have set out to achieve. We also improved the EBITDA profitability by 1.6%. This is our smallest quarter, and due to that, we've always been in a situation where the last quarter has been loss-making. We have reduced the loss during this quarter, and I think we're also getting closer to a point where we will actually turn this to a positive development in the last quarter. Some of the key events during Q4, I think most notably, we had strong development in all segments.
We strengthened sales and profitability across all segments. In fact, in other markets, the new markets, the online Finland and Germany, we actually had the strongest development of all segments. Also, looking under the hood of the numbers here, we can say that there is a number of things that we like. One is that we have an increased average ticket value and also that visitation increased. Basically meaning more customers coming and shopping more when they are there. We saw that both the number of items in the shopping basket increased, but also the total value of the basket. Looking even closer, we also saw another, I think, significant and important development, and that is that the share of higher ticket items increased.
I think that's a sign of, I would say, a healthier customer, but also that our customers have responded well to our pricing, but also our campaigning. I think this is part of the effect of what has driven both the gross profit development, but also top-line growth. Now, in line with higher, as I say, or increasing number of tickets, you can also say that the inflow of new customers is also increasing. We have a very good combination of those things. One way that we're seeing that, except for the increasing number of tickets, is that the recruitment to our loyalty program, Club Rusta, continues. Last time, we reported 6.2 million members. Now we're up to 6.4 million It's another about 200,000 new registered members.
Interesting, again, if we look under the hood of these numbers, we see that it's the younger people now that is the fastest growing target group over here. It is the 18 to 28 years old that is growing fastest, and also that the share of men is increasing. A large chunk of our customers have been women, but now we're seeing that the men is catching up, and the absolutely fastest growth we see with young men. We really like that. We've talked about reasons for why we think Club Rusta is important to us. We've talked about it in the perspective that the traditional marketing that we have used at Rusta, and also generally in low price, has been the flyers that we distribute to millions of households. That is slow, it costs money, and we get absolutely no data from it.
As we can transfer more of our marketing efforts into Club Rusta or through Club Rusta, it's quicker, it's cheaper, and we get more data. That's, I would say, some of the incentives that we see working with Club Rusta. There's also another part of it, and that is that the club members' average ticket is 35% higher versus non-members. That's another reason that we're driving this so hard. We also see a ramped-up expansion rate, as I mentioned. We had six new stores open during Q4, and we have a continued positive view on the expansion potential. The market now is considerably softer compared to, I would say, the last many years that we've seen on the market, and that seems to continue. We have a positive outlook on the rental market.
Looking at the full year, we have a total of 6.4% net sales growth during the year. We also have a like-for-like of 3.2% in local currencies. Here we have a currency effect that is negative with 0.8%, but we have increased the gross profit by 5.4% versus last year. We also strengthened the EBITDA by 12.2% during the year, and the earnings per share increased by 17.4%. I think this goes to show the scalability that we have in our business model. Some of the milestones during the year include these points. Of course, a lot of things have happened during the years, but some of the things that I would like to underline is, one, that we opened 13 stores during this year, which is more than the year before. We also celebrated 10 years in Norway, our first international market.
During the year, we also opened the 50th store in Norway, and the growth continues. From a strategic point of view, I think it's also worth mentioning that we opened a new sourcing office in Turkey. This is very much to address both our general strategy to be active on the global purchase market and to make sure that we work with the biggest and the best. It is, of course, also something of an insurance policy for the volatile global situation in sourcing. We know that it's good to have many more options and to have people on the ground in the most important purchase market to have different options should we end up in situations that we have seen in the last couple of years again in the future. We have also been approved for a science-based targets initiative, which we're really happy about.
I think this is another important part from a strategic point of view for Rusta that we are continuously moving ahead, increasing both our quality level, but also our work with sustainability. This goes in hand with the aim that we have not only to offer low prices, but actually having a really good quality and also a trustworthy agenda on sustainability. Our aim here is to be best in low price when it comes to sustainability and quality. With that, I hand over to Sofie to take us through more of the financial numbers.
Yes. In Rusta's fourth and final quarter, we see an accelerated sales growth and an increased profitability. We have a total net sales growth of 12.6%, negatively affected with 1.9% currency effects. The total net sales growth, excluding currency effects, is 14.5%. Our like-for-like growth, excluding currency effects, is 8.6%.
We have continued to invest in our price position and decreased our sales prices in the quarter. The sales increase is all due to higher volumes and increased average tickets, and that goes for all our segments. We are meeting last year's IT incident in this quarter, but even if we include the lost sales of last year, we have 11.5% in net sales growth, excluding currency effects, and 5.8% in like-for-like sales growth, excluding currency effects. Our gross profit increased with 7%, but the gross margin is 2.1 percentage points lower than last year. The decrease in the margin is mainly explained by two factors. The first one is that we this year have an increase in planned campaign activity compared to last year. During the IT incident last year, campaigns could not be run, which then resulted in a comparable higher gross margin, but also lower sales.
The second factor is due to negative currency effects. The strengthened Swedish krona is very positive for the continued margin development, where a lower dollar has a strong positive impact. However, in the short run and in the Q4 results, we see negative effects from the weaker NOK , which will be mitigated over time. Due to the seasonality in our operations, Q4 has always been a quarter of negative profitability. The quarter starts right after the Christmas sales and ends before the summer season kicks off. We have a positive EBITDA development in the quarter and have strengthened our EBITDA margin with 1.5 percentage points, mostly driven by good cost control with a decreased OPEX share of sales. The full financial year of 2024-2025 can now be summarized, and we see increased sales, continued profit growth, and a strengthened EBITDA margin.
We have a total net sales growth of 6.4%, which is 7.3% excluding currency effects. Like-for-like sales, excluding currency effects, is 3.2%. The gross profit increased with 5.4%, with a drop in gross margin of 0.4 percentage points. The EBITDA increased with 12.2%, and the EBITDA margin strengthened with 0.4 percentage points to 7.2%. Earnings per share thereby increased with 17.4%. A short summary of the full financial year is that Rusta takes clear steps towards the midterm financial targets with increased sales and improved EBITDA margin. If we look at our segments and start with Sweden, we see a continued positive development and a continued movement towards increased sales of high ticket items. Seasonal sales of the summer assortment started strongly in the quarter, and in combination with an increased sales of DIY, we get a positive product mix effect in both sales and in margin.
Total net sales increased with 13.8% and like-for-like 9.4%. We also have a positive cost development in the quarter, where OPEX as a share of sales is 4.8 percentage points lower than last year. The EBITDA margin for Sweden for the quarter is 13.7%, an increase of 3.7 percentage points. We see similar positive development among our Norwegian customers, where both the number of customers, items sold, and average receipt increased in the fourth quarter. The customers also increasingly chose high ticket items. Our segment for Norway has a net sales growth, excluding currency effects, of 14.5% and a like-for-like, excluding currency effects, of 6%. OPEX as a share of sales has decreased with 2.8 percentage points, and the EBITDA margin increased in the quarter with 0.6 percentage points. Other markets show a very strong development and have the highest net sales increase within our segments.
Total net sales growth, excluding currency effects, is 16.5%, and like-for-like, excluding currency effects, is 8.5%. We see the same development as in the other two segments with an increased number of customers, items sold, higher average receipt, and also a very positive OPEX development driven by lower cost for freights. The EBITDA margin for the quarter is strengthened with 4.2 percentage points. If we look at the full year and conclude the performance per segment, we see a continued total growth in all segments with increased sales and increased profits. We believe that Rusta is continuing to gain market shares in all markets. Sweden has a net sales growth of 7.6% and an increased profitability to 18%. During the year, we have opened eight new stores in Sweden. Norway has a sales growth of 9.7% and a profitability of 11.1%.
The slightly lower EBITDA margin compared to last year is explained by the negative currency effects due to the weaker NOK. During the year, we have opened five new stores in Norway. Other markets have a total sales increase of 3.9% and a continued improved EBITDA margin for the full year of 0.8 percentage points. Our profitability has continued to increase during the year, and we take a closer look at EBITDA for the fourth quarter. We see that we have a positive sales mix effect with an increased share of high ticket items. We have prioritized the core of our customer promise, the low price, to thereby drive sales, which we have succeeded with. Increased planned campaigning has had a negative effect in the gross margin, but has been very positive in driving sales, traffic, and profit.
Operating costs are decreasing as a share of our sales with 3.5 percentage points, which is made possible by the scalability in our business model, meaning that we sell more but without increasing our total costs. Freight costs between our warehouse and our stores are one example where we have increased the cost efficiency, which has had a very positive effect in the fourth quarter. Purchase prices are in line with last year, but sea freight costs are higher in Q4 this year. For the full financial year, we have managed to increase our EBITDA margin from last year's 6.8% to 7.2%, as you can see here on the slide. The profitability drivers for the full year are higher sales, where volume is the single largest driver to the overall growth, both in total and like-for-like numbers.
Positive effects of improved purchase prices, an increased share of private label, and a positive sales mix. OPEX as a share of our sales has decreased with 1 percentage point. However, we have negative currency effects of higher dollar and a weaker NOK. The total currency effects on our EBITDA margin are negative with 0.3 percentage points. A currency-neutral EBITDA margin for the full year is at 7.5%. Some comments on our balance sheet and cash flow. There is an increase in working capital. This is due to a planned inventory build-up since we this year have more stores and an increased demand. We have a low net debt, excluding IFRS 16, of SEK 74 million. Cash flow from operating activities in the quarter is higher than last year and is explained by lower purchases of goods this quarter compared to last year.
Cash flow from investment activities for the quarter amounted to SEK 134 million compared to SEK 63 million last year. The increase is explained by the optimization project in our warehouse, new stores, and rebuilt stores. As for the optimization in Rusta's central warehouse, it's all going well according to plan and budget, and it's expected to be ready in spring 2026. All in all, we continue to have a solid balance sheet and a very stable financial position, which will support our increased store expansion. We have no need for bank loans, and we'll fully finance our growth ourselves, completely in line with our set financial targets. Summarizing the year and looking at our financial targets, we can see that we are well on track to deliver on our medium-term financial targets.
We have an organic currency-neutral net sales of 7.3% and a like-for-like growth, excluding currencies, of 3.2%. Our EBITDA margin has strengthened from 6.8% to 7.2%, and the currency-neutral is at 7.5% and well on track towards the around 8% in the medium term. Earnings per share are very much outgrowing the net sales and EBITDA with an increase of 17.4%, which is the result of the scalability in the business model. We have a dividend policy with an aim to distribute 30-50% of net profit, which leads us to the next slide. The board proposes a dividend of SEK 1.45 per share, which is an increase of 26% compared to last year's SEK 1.15 per share. This corresponds to 47% of the net profit of the year and is thereby in the upper end of our dividend policy. With that, I hand over to Goran.
Thank you. Right, so a bit of a summary and also events after the quarter. The first point is that, of course, after 14 years here at Rusta in this position, I have informed the board during last week, as I'm sure some of you have noted, my intention to leave this position no later than the end of June in 2026. I think this allows for ample time for the board and for the company to find and prepare the succession into a new CEO. The board has, of course, initiated the process to appoint a successor, and I guess more of that to come after the summer. Switching over to current trading, we can say that last year we had a bit of a strange spring.
For most of our sales market, we had heavy snowfall in April, basically the whole month, and then it quickly turned almost exactly between April and May into full-on summer in May, which created, I would say, lower than usual sales during April and then a very high peak in May. Of course, what we have met here has been, of course, I should say, a stronger finish to Q4, but, of course, tougher comparables in May that we did not really meet up with in May. If we look at the season, the summer season being one of our really important seasons during the year next to Christmas, you can say that if we take a full look on this and compare April plus May last year with April and May this year, the season has started well. The early spring has been to our advantage.
Generally, but not always, this is a good sign for the rest of the season. It means that we have sold a larger share of our products and our offer early on in the segment, and that is usually very good for the business. It means less of need for sellout and so on. We can also say that looking at Q1, we have softer comps in the second half of Q1. Basically, May, really, really tough peak, but then June and July, significantly softer comps during the first quarter. We continue to have a very positive long-term outlook, and that has, of course, to do with basically everything that we see on how the consumer responds to our campaigns and pricing and, of course, our range offer. We also have a record store pipeline that continues to grow.
It's really hard to predict what it's going to look like in the coming quarters, but it's on a very historically high level, the highest ever. I think that this would basically be one very important part for us to continue to drive growth and to address a larger share of the white space that we know we have in abundance in all our markets. When it comes to currency effects, the strengthened Swedish krona, you can say that there is a negative around that, and there's also a positive. The negative, which is the smaller part of it, is what you see first. That has to do with the NOK and the Euro, which is basically the sale currencies.
That negative effect we have already seen, I would say the bulk of, we will continue to see a bit of that in the coming one or two quarters. The big positive effect of this, basically the Swedish krona compared to the U.S. dollar, has a big impact on almost all of our shipping, the freight cost, the containers, and so on, but also a large chunk of our purchase, the COGS, the cost of goods sold. Here we have a positive effect, and that takes a little bit longer time to hit the P&L for the simple fact that you have to place the order, the suppliers have to produce it, it has to be transported into our DC and then sold in our stores until it ends up in our results. We have that good part left.
Looking into this year, we will start to see those things. We see that we will see the lion's share of that in the second half of this financial year, but it will improve over time. Both, I should say, from a freight point of view, but also from a sourcing point of view, that is something good that we have ahead of us. We also implemented, as we communicated earlier about a week ago, that we now have the bonded warehouse implemented. What is that? It basically means that we do not have to pay customs duties on a part of our range. For example, Norway not being part of the European Union, we still hold those goods in our DC in Sweden, and we do not have to pay customs duties on it until we sell it. It is a big benefit for us.
We have a SEK 7 million positive effect during this year, and we believe it's going to be about SEK 30 million in the coming year. It's a very good thing. We've also communicated a number of, I think, very exciting initiatives, the rollout of a new store concept during the autumn where all of our 225 stores will have, I should say, a new setting. We'll also rollout some new range offers in connection with that that we will communicate at a later stage. We also have the initiative that Sofie talked about in our DC, among other things. All of those projects are proceeding according to plan, and we are very comfortable with our guidance around all of those projects. I think from where we're looking and looking towards the horizon, I think we like what we see.
With that, I think it's time to open up for Q&A.
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 Niklas Ekman from DNB Carnegie. Please go ahead.
Thank you and congratulations on strong results this morning. A couple of questions from my end. Firstly, if you could elaborate a little bit more on what you're saying about current trading. You're talking about tough comparisons in May and then much easier in June, July. I know you don't really quantify this, but is there any reason to see any significant deviation from the strong growth that you reported now in Q4? That's my first question.
Right.
Yeah, I would say we had an unnaturally high peak in May, and of course, it was hard to meet that. I think we did not expect to either. In that sense, you could say that it was a tough start on Q1, but we knew about that. We also know now that June and July are much easier. We still have a positive outlook on Q1 as a whole. More than that, I am not sure if I dare to quantify it. No crystal ball yet. Sorry. [Fair enough. Fair enough]
Can you say a little bit more? You talked about here the currency tailwinds or headwinds that you are seeing now that we reverse the tailwinds. How will that progress? Do you see during the coming quarters? Are you still seeing significant headwinds also now in Q1 or Q2, or how should that progress?
If I start, we can just say that we, of course, noted that the Norwegian krone lost quite significantly during last quarter towards the Swedish krona, but it has recovered some, and that's, of course, good for us. We've also had some time to adjust our pricing in terms with that and also in line with the market in general. We think that that will ease out. Of course, as we progress now in, I would say, in the coming two or three quarters, we will more and more see a strong positive effect from the U.S. dollar versus the Swedish krona. Yeah.
That goes, of course, as well for the Euro, which will have a negative impact on top line. Since we're also reselling in Euro, but we're buying in Euro, in that sense, it's more hedged.
It is a very positive development on the dollar and also on the other currencies that we are buying in. That positive net effect of all of this together, we say, will have an impact in the second half of the financial year.
Very clear. Speaking of Euro, other markets, you have seen fairly poor sales development, or at least it has been underperforming the rest of the group. Now you are seeing a significant pickup here in Q4. Why is this happening now? Is there anything that you have done differently in Finland and Germany?
I think I would say our assumption earlier on during the quarters has been that we have had some help in the improving macro development, if you like, first in Sweden, then Norway, and then we hope to see that in other markets. We do not see that connection as strong anymore.
I mean, I think we have had even a little bit of a fall in consumer confidence in Sweden in spite of us growing quite rapidly over there, a little bit of the same in Norway and so on. I can't really say that consumer confidence has improved in Germany and Finland. I think my conclusion is that it seems like the market and the consumers like our offer, that they find it attractive, and also that they respond well to the campaigns and the pricing position that we have now implemented. That is, of course, very good.
We also see a very positive development on the online sales. Yes. Could be said.
Yes, absolutely.
Can you quantify what is online share of sales for you now?
We can, but we won't.
No, but since we have those three markets, online, Germany, and Finland in one segment, we stick to that. What we can say is that it's been a very positive development. As I said, also the online sales has been very positive in the quarter.
Yeah, we can say low single digits, but increasing.
Clear. Final question for you, Göran. As you said, you announced plans to resign one week ago. Can you elaborate a little bit on the reasons for leaving, why deciding to leave now, and what do you expect to do going forward?
Okay. I guess, as I said, first of all, 14 years, it's a long time in a company and, of course, also in a role like this. That's been, I guess, around on my mind for some time, that when is a good time.
I think looking at where Rusta is right now, I think Rusta is in a good place. For a large chunk of the years that I've been a CEO here, we have been involved with heavy projects, whether it's going to the stock exchange or an external IT attack or pandemics or entering new markets or buying companies and so on. Those have been really bad times to make a decision like this. I think from that point of view, I think this is for the good of Rusta, I think this is a good moment.
No thoughts on what's next for you?
There are, of course, thoughts, but I've also decided I will allow myself some time to think about that, having been so long in this role over here. That's something that I will have to return to later on.
I think right now it's also good. I mean, it's another year. I think thinking too much of that is not good. I really like to stay focused on Rusta and making sure that the development continues and also that, I always say, the position of the company will be as good as possible for the next CEO. I think that's really, really important.
Very clear. Thank you so much for your contribution. Thanks for taking my questions as well.
Thank you.
Thank you.
The next question comes from Gustav Hageus from SEB. Please go ahead.
Good morning. Thanks for taking my questions. I was thinking about the strong like-for-like number here in Q4, 8.6% like-for-like. Assuming that price investment campaigns took 1.5%-2% off that number, volume mix would be, say, 10% in the quarter.
Firstly, if you could confirm that's roughly ballpark correct, and if you could give us some sense of the mix between volume impact versus mix impact, you referenced both here in the report, but any of them that makes up the lion's part here would be interesting. Thanks.
If I start, I think yes, absolutely. I think this is the Rusta that I recognize. I think the past one year has been a bit of a strange environment where people have been really under pressure due to inflation. I think the behavior has not always been as we used to. The response to campaigns and pricing and so on has not really been what we're used to over a longer time of a period. I think what we're seeing right now is old classic Rusta.
Basically, we lower prices, sales really takes off, and the volume growth is always higher than the sales growth. Basically, we're giving some of the money back to the customers from our improvement in efficiency and productivity and purchase prices and so on. They buy more, and then volume increases even higher, creating even more scalability at the suppliers and in our supply chain. I think what we're seeing now is more normal behavior. Our campaigns, our pricing structure, our offer seems to work. The customers, they respond well. As a result, we have an increasing volume. Yes, I would say 1-2% over the top line growth is generally what we see as the actual volume growth. Basically, more cubic meters, more pallets, more items.
I can just add on the positive mix effect that it's, of course, very positive that the seasonal sales started well. So an increased share of seasonal items, also an increase of items within DIY. And also, we had quite a few news during the quarter that went very positive.
Yeah. Yeah.
Okay. Just to understand, sorry, but the 8.6% like-for-like, you say a percent or two negative in volume, but what's the share of mix versus a percent and a half in price, right? Volume and mix, what's roughly the relationship between those two to make up that 8.6% number?
I would say that it differs between the quarters, but if you're talking about this specific quarter, it's like Göran said, the mix effect, or sorry, the volume effect is probably somewhere between 1-2%, probably at the upper end.
We do not comment on the mix effect more. We do not quantify it, but it is positive.
Okay. On the gross margin, coming down from 43% to just below 41%, could you try to guess the impact from the IT attack where you could not campaign, right, to the extent that that had a natural impact? I understand it is a bit of a tricky question, but I understand the delay here with the procurement prices and FX into your P&L, but could you try to estimate if all else equal in terms of pricing and everything, what do you think the gross margin would have been theoretically in the quarter if all those FX and procurement price impacts actually hit in this quarter rather than with a delay into the next half of the next year?
I can start with the two parts that we said affected the gross margin, which then was the FX effect and the campaign effect. You could roughly split them by half of the 2.1 percentage point that is lower this year. What was the second question?
It was a long question.
The impact going forward.
Basically, what you're asking, I believe, is the, what's to say, the full-on effect of the currency rates as it now is the net effect, full net effect, right? Yeah.
I could say that if you look at the dollar, you see a positive effect already in Q2, but then you still have some negative effects due to the NOK and the Euro. That's why we say that the net effect of all currencies is positive during the second half of the year.
Of course, like the dollar is already positive in the second quarter. In addition to that, you have the other currencies, which then are positive as well when it comes to purchasing. You have positive effects when it comes to all the shipping costs, which are in dollar as well. Our sourcing costs are in dollar and other currencies, which we see positive effects from. It is a very positive effect, but net positive from the second half of the financial year.
You do not want to give us a rough estimate how big that impact will be, gross net of any price campaigns from your side?
No, but I can say that the gross margin will be slightly negative affected in Q1, neutral probably in Q2 due to this, but then positive compared to last year in the third and the fourth quarter.
Okay.
Thank you for taking my questions.
Thank you.
The next question comes from Daniel Schmidt from Danske. Please go ahead.
Yes, good morning, guys. Göran and Sofie. A couple of questions for me then. If you just look at the IT incident impact from last year, how does sort of the result this year stack up against an adjusted result last year if you include the impact that you had negatively from the IT incident?
On the sales side, if we deduct the lost sales or sort of add it back, the lost sales from last year, we have a total net sales increase of 11.5% currency neutral and a like-for-like of 5.8%.
On profitability?
On the profitability, we estimated a loss of SEK 48 million, and I think there is a deviation of 0.1 percentage points between where we end up now.
We had minus 2.1 percentage points last year. We ended now at 0.6, and there is a deviation of 1.1 between those.
Yeah. I am just getting to that. Basically, last year, you had an EBITDA of zero, basically, if you adjust it for the IT incident, right?
Yes. Yes.
Yeah. Yeah. And now it is minus SEK 15 million. So do you think that you overestimated the impact of the IT
minus SEK 15 million, yeah. Sorry?
Do you think that you overestimated the impact of the IT incident on the profitability line last year?
No, I do not think we did that. We underestimated the impact in the gross margin. I think we are still confident that the impact on the sales and the total profit loss is correct.
The reason why if you deduct last year's losses from the IT attack, why we do not end up at the same profitability, the reason comes from the gross margin being lower this year due to currency and due to more planned campaigning, where a part of that is, of course, that we could not do any campaigns during last year's IT incident. I still think we're quite confident with the estimates that we gave.
Okay. Good. Good. Just a detailed one on the online, because that was also impacted quite a lot by the IT incident last year, right? At least at the start of the quarter. If you adjust with that, do you think that online growth sticks out in this quarter, as you mentioned, if you make that adjustment?
Yeah, that, of course, is a part of the explanation, but it still sticks out as a very positive increase during the quarter.
Okay. Good. Then also maybe on the gross margin, you said half and half in terms of FX and campaigning and gave a very sort of clear indication for the coming quarters. Do you think that mix has played in your favor on the gross margin? You talk about sort of higher demand for higher priced items. Does that sort of equal better mix?
There is a positive mix effect in the gross margin in the quarter.
Do you see that going in the same direction as you look into Q1?
Yes, we do.
I think if I add on on that, that's one of the things that you expect when you've had a good start of the year because of the summer season. I mean, the more you sell at full price towards the beginning of the year, it means less of a negative impact towards the end of the season, basically. That, I would say, is an added part of this.
On that topic, this is a quite difficult question to answer, I guess, but could you have calibrated the campaign activity aggressiveness, so to speak, better in order to get sort of an even more ideal gross margin development versus your top line in the quarter? Impossible question to answer, I guess, but.
Yeah. Yeah. No, it's a good question. Yeah, it's a good question. The answer to me is obvious. You can always improve.
I mean, there's always things that you could have done better. I think setting out on both in Q3 and in Q4, we had really prioritized driving growth, and we really were aiming to kind of kickstart the customers and make sure that they not only visited the stores, but actually purchased the goods that we wanted them to buy. That happened. I think now when we're there, when we started to see that it's more of a, how should I say, traditional behavior, I think from here on, I think we can also switch our focus more into calibrating and improving and so on. I think regardless of which area you're talking about, you can always do it better. I mean, retail is detail, and campaigning is a very important part of that.
Good. Okay.
Because I think sort of nobody can complain about the top line development that you had, but you can have sort of different views of the drop-through, basically. You are upping the expansion guidance. You already upped it two quarters ago, and you're upping it again within the interval. Basically, that period that you're referring to starts now, if I'm not mistaken. Why, Göran, do you believe sort of why don't you want to see that through, basically, this three-year period?
I don't think it's a question about that. I think change is good. After 14 years, I think change is good, both for me and for Rusta. There is always, I mean, that's one of the things that I love with retail. There is always something new to do. It never ends. It never stops.
I think part of this is acknowledging the fact that it's always good with new ideas and renewal and so on, both for me personally, but also for Rusta as a company. I think I feel having spent so much time and energy and heart into this company, I think it's super important for me also that I don't do this at a sensitive time. Yes, there is a lot of fun things ahead of us, and that's perhaps also the reason why now is a good time instead of seeing a lot of threats and insecurity and so on. Rusta is on a good trajectory. As you say, there's lots of good, fun stuff ahead of us. What better time to look for a replacement than this?
Yeah. Good.
Maybe, again, a difficult question, but you've been an excellent CEO of this company, and you're a big part of the sort of instrumental in that journey that the company has been on for these 14 years, as you mentioned. Is it realistic to believe that you will stay another 12 months? Because usually when a decision like this is made for everyone, maybe it's better that it goes quicker.
I don't think that the aim from anyone is to drag out more than necessarily in this process. I think what is important is that this allows for time for a quality process. I mean, it's no easy task at any time to do a recruitment. You need to prepare, you need to search, you need to have time to discuss and think and so on.
I think what we have now is a situation which allows for a quality process, but it's not the aim in itself for this to take one year. I mean, if this goes faster, I think that this is good. I don't think it's not time that's the most important factor here. It's quality. I think the aim from everyone here is that this should be as good as a process that can possibly be made. I think that's the best for everyone in the company, for Rusta as a whole, for shareholders, and for myself. Yeah, we have one year, but we don't necessarily have to spend it if it's not called for.
Thank you. Thank you.
All right. Thank you.
The next question comes from Arto Heikura from Inderes. Please go ahead.
Hello. Good morning. It's Arto Heikura from Inderes.
Thank you for your presentation. I have a couple of questions. Could you give an update on the ongoing concept renewal in your stores and especially in the older stores? How have customers responded to that?
The store renewal will be rolled out in all 225 stores during the autumn. We have run some test stores during the spring. We do that, of course, to test how customers respond to that in reality, but also to secure that we have a good manual and instructions for how the staff can roll it out in an efficient way. Judging from those tests, it makes us comfortable with our plan to roll it out in its entirety before Christmas, and also that the cost indications as well as the positive benefits are, I would say, realistic.
The bulk of our stores will be rolled out between week 32 and week 37 on all markets. All stores, all markets, according to plan, feels good.
Okay. Maybe then about your private label sales. Where do we stand now? What are you aiming for? Does the share of private labels differ between your segments?
Yeah. The private label has increased during the year with about 1%. It is now at 68%. The part that we are targeting now or working with is within consumables, where you can see that, of course, a shampoo or something that is a lower ticket item, that does not give that big effect in sales, but it is a very positive effect in gross margin.
That also means that the share, the 68% share, is not increasing as fast as if you would have changed high ticket items, of course. It would have been a higher impact in the percentage. In items, in volume, and in gross margin effect, it is very, very positive. Still increasing, and it has a positive effect for both in Q4 and in the full financial year.
Okay. Is there significant differences between your segments when it comes to the share of private labels?
Yeah, significant. You could say that whenever you enter a new market or when you open up a new store, even in a mature, so to say, part of a mature country, so to say, generally the customer journey is so that the first thing that you buy is brands that you recognize and low ticket items.
That tends to be A brands. I would say that in general, when you're opening up a new market with lots of new stores, there usually is more of private labels as compared to A brands as compared to private labels. As customers get to know you, get to know the range, get more comfortable, trust us, and so on, the share of private label increases. I think it's safe to assume that in our newest markets, you probably have a slightly lower share of private labels, but that it is increasing.
Okay. That's clear. Thank you. Thank you very much.
Thank you.
There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you very much for listening and for all your questions.
We will be back after the summer in September with our first quarter of next year. Until then, I really wish all of you a fantastic great summer. Of course, you're welcome to Rusta to make the summer even better. Thank you very much.
Thank you.