Dear ladies and gentlemen, hello and welcome to the Synsam Group AB webcast with teleconference Q4 2021. Throughout the call, all participants will be in listen-only mode, and afterwards there will be a question-and-answer session. Today, I'm pleased to present CFO Per Hedblom and Chief Innovation Officer Martin Daniels. Please go ahead.
Good morning, everyone. My name is Martin Daniels. Together with Per Hedblom, we will present the quarterly results for Q4 2021, the second quarter, for Synsam Group as a listed company, following the IPO in October 2021. Summarizing on a high level Q4, we see a very strong growth and profitability in the fourth quarter, with net sales of SEK 1.245 billion, an adjusted EBITDA margin of 26.5%, and a strong organic growth of 13.8%. This also concludes the full year of 2021, which was also very strong, both in growth and profitability, reaching an organic growth of 23.2%, as a indicator. Going to a bit more detail on Q4.
As I said, the net results reaching SEK 1.245 billion with a stronger gross margin compared to last year at 79.2%. These results, the sales have been driven by very strong organic growth, and very glad for us to see a very strong core like for like of 10.2%, showcasing that the strategy, the ongoing work that we're doing in improving our offering, store concepts, digital footprint, and the overall strategy is working very well also in existing units. The adjusted EBITDA margin, and we'll come back to that in the financial deep dive, reached 26.5%, which was strong and above the financial targets we have.
Summarizing the full year 2021, similar patterns here with a very strong growth in sales and that organic growth of 23% being built up by a very, very strong like for like of 20% and an adjusted EBITDA margin of 26.9% also exceeding last year and the financial targets that we have. Going in a bit into some of the details of the buildup of these results, we see on the store network a continued expansion of the Nordic network. As communicated during the IPO or in conjunction to the IPO, we're following the plan to open some 90 stores in the coming three years. We opened 26 stores in 2021, which we think is fairly unique in this market also during a pandemic year.
It is not only opening new stores of an existing store concept, but what we are doing here for our stores as well as with the overall offering is to continuously develop the store design, the layout, and the offering that we put into the store concepts. Going into the largest concept that we have in our portfolio, the flagship store concept, we now have five stores as of end December 2021, and we launched in December the latest flagship store in Hötorget in the city center of Stockholm, and we now have a total of five stores across Sweden, Denmark, and Finland.
This store concept is the biggest one in terms of sq m, but also in terms of offering, size of the assortment, reaching 5-7 times the standard store and also additional eye health services that go into this store concept. This, as we've seen, has been very successful in driving a lot of foot traffic. This works as a destination in the cities that we've launched these concepts in, and it's working very, very well. That's why we actually launched the second flagship store in Stockholm in December.
Taking the benefits of the flagship store concepts to more places in the Nordics is the ambition of the mega store concept, which you could say is a smaller or light version of the flagship concepts, reaping a lot of the benefits, values that we've seen customers appreciate from the flagship store concept. The broader assortment, in this case, the mega store concept has about 2.5-3 times the number of SKUs in the store. It also has more capacity in terms of rooms for eye examinations, which means that these stores as well as the flagship store have the capacity to ramp up to higher sales than the traditional average Synsam store. During Q4, we opened megastores across Sweden, Finland, and Denmark, and we are now at end of 2021 at 20 megastores.
This is a store concept that's been also very well-received, as you can see. That's why we're rolling out more stores and this will also form an important part of the roll-out plan going forward. Together with the latest store format, which is the recycling outlet concept, combining the strong trends in the market for sustainable options and also attractive price points. Here we're offering our customers or the market a completely new and complementary offering to the Synsam traditional banner. Getting people or giving people the opportunity to buy second-hand to buy frames that have gone through the Synsam recycling model has been very successful. We now have 9 stores by end December 2021 and to date, during Q1, we've opened 4 additional stores, so the total is now 13 stores.
Very well-received by customers, and we are also here going to roll out a lot of recycling stores as part of the plan already communicated. We now have stores across not only Sweden, but also Denmark and Finland, so this is also something that's working across all our markets. Going from the store concept and formats to our most attractive offering to customers while in the store, the Lifestyle subscription. We're now operating in our seventh calendar year from the start in 2016. During Q4, the net sales amounted to SEK 600 million, which is an increase of 25%, so this is continuing to grow and is continuing to be popular among our customers.
For the full year 2021, we exceeded SEK 2.1 billion and an increase of 37% in total. This is also working very well across all our four markets, and we see an increase in all four geographies. Double-clicking a bit into some of the numbers underlying the Lifestyle development, we're seeing that in Q4 2021, we actually grew our installed base the most during a quarter ever, and we're now at 393,000 active customers in the program. This is a net number of the churn that you see on the right-hand side, which continues to be at a good level.
As we've said before, it varies a bit from quarter to quarter, but it is at a very good level as we can see it also in Q4. The way that we continue to build this customer base and keep the churn low is by continuing to invest in the program, developing the offering. We've already communicated before that the 4.0 version that we're currently offering is going to be upgraded to a 5.0 version. Also we're working a lot with churn prevention issues or initiatives. The key point here to sum across is that it all starts in the store and our customers having needs that our personnel help them identify and fulfill.
That's the best way for us to create customer satisfaction and keep the churn levels low. Beyond the Lifestyle subscription, which is started from spectacles and sunglasses and reading glasses and sports glasses, also going into contact lenses as one of the products, we have the sort of pure contact lens subscription sales summarized here on this page. Also here we see a strong growth during the quarter, during the full year, and the active customer base for contact lens subscribers is almost at 100,000 customers at the end of the year.
As well here, we're continuing to invest in the offering, the brand portfolio of EyeQ, which is our private label for contact lenses, but also niche products like the MiSight lens for nearsightedness in children, as well as continuing to invest in education and in our store personnel to best help our customers find the right solution for their needs. Sustainability to highlight another important driver of the strategic work that we're doing and the success in driving like-for-like. We've mentioned the Made in Sweden project before, where we are taking back production from Asia and other parts of Europe to Sweden. That work is ongoing, performing according to plan, have intensified during the first quarter and will continue to be an intense work during this year to get the production up and running.
We are planning for an opening, official opening of the site on 17th of August and also a start of production. We are, of course, before that, going to fine-tune and get all the processes and first examples of production in place. Again, this will take our house brand offering into the future, phase in new materials and also more sustainable materials to meet customer needs. Recycling outlet we mentioned, continuing rollout. We're now at 13 stores to date. 9 by end of 2021. Our initiative to help kids participate in sports and games with Allas Kan Se initiative is continuing to help children participate in sports at equal terms, and we've given out approximately 9,000 free activity classes during the year and totaling over 34,000 to date.
That summarizes hopefully some of the building blocks of the growth and the profitability development that we're seeing. With that, I hand it over to Per to go a bit more into details on the financial development.
Thank you, Martin. If you break down our results into segments, we can see that all four Nordic segments have had very good growth, organic growth and like-for-like during the full year 2021, strong improved profitability, EBITDA, in EBITDA terms. Of course, that is compared to a pandemic year, but nevertheless, it's a strong growth. If you look at the fourth quarter, specifically, Sweden and Finland stand out. Sweden, 16.9% organic growth, 13% like-for-like. Finland, over 40% organic growth and 27% like-for-like in the fourth quarter. Very strong growth in these two segments, countries. Denmark, somewhat lower growth. Strong competition in Denmark in the fourth quarter. However, reasonable and strong growth anyway and strong growth during the year, as I said.
Norway, 7.4% organic growth, 5.7% like-for-like. Looking at the stores, we have, as was pointed out, 500 stores in total, 467 of these are our own. The rest is franchise. We have, during the quarter, increased number of stores, new establishments in Sweden and Finland specifically. I want to highlight Finland once again. During the fourth quarter, we opened 4 new stores in Finland. A strong growth there. 6 over the year in total. We continue our expansion and, for the first quarter 2022, quarter we are in right now, we expect another 7-10 new stores to be established in the group in total, including the ones Martin just mentioned. We continue just repeating the strong like-for-like growth.
It's not just those store openings, we have a solid base of growth in our existing stores thanks to our strong concept and customer focus. The growth margin has actually increased during the quarter compared to fourth quarter last year. This is a result of supply negotiations, stronger volumes, and also an increased share of prolongings of the total Synsam Lifestyle sales. As you may recall, we have a technical positive factor when selling prolongings. We take one pair of COGS and then three pair of revenue for three pairs, whereas new sales, of course, then we have three times COGS. It's a technical positive effect, technical and real positive effect on growth margin when selling prolongings, and we see that effect in the fourth quarter.
Important to keep in mind here is that we did have SEK 37 million of costs affecting EBITDA and EBITDA margin, but it's taken out when you look at adjusted EBITDA and adjusted EBITDA margin. It's important because that would not be costs we would have going forward, of course. Of course, these were related to the IPO, this 37 for the full year IPO costs amounting to SEK 85 million, which is a difference then between adjusted and regular EBITDA. Adjusted EBITDA growing by 14.3% to SEK 333 million during the fourth quarter. Continue. Thank you, Martin. Also, going back a few years, we can see that we've had a strong growth trend in net sales. Our previous current strong growth has continued during 2021.
The pandemic year, we actually managed to grow, as we said before, 2%, and now we're back on a strong regular strong growth trajectory in 2021 with increased profitability and actually also increased adjusted EBITA margin during 2021. I can conclude with the cash flow as well. Very important of course. We increased cash flow from operating activities in the fourth quarter compared to fourth quarter last year, both before and after working capital, an improvement in working capital actually as well. We also have invested quite a lot in the fourth quarter, which is important for us to drive growth. That's an effect of our new store openings, of our upgrades to mega stores, of which Hötorget in Stockholm is one aspect.
It's also equipment to have state-of-the-art equipment in our stores for opticians and for the customers, of course. Our effort to be leading in the digital area as well. These are just examples and it's important for us to invest in our business, and we've done that as well. We have during the fourth quarter taken up new loans and paid off the old ones in conjunction with the IPO. We talked about that before, and you can see the figures right now. I would also like to mention that the net debt to EBITDA, that ratio, has decreased thanks to lower net debt and better adjusted EBITDA, of course.
It's 1.88, that ratio, net debt to adjusted EBITDA compared to 2.78 fourth quarter last year. Could also mention that the board has proposed a dividend of 1.70 SEK per share, proposed to the annual general meeting, April 26th. That's all for the financials. Going to the summary.
Yeah. Thank you, Per. Summarizing again some of the key points, continued strong growth and profitability development in the fourth quarter and also full year 2021. Very glad and proud to see that the company is continuing to drive a lot of organic growth and in that also a large portion being the like-for-like. Showcasing that the strong core, the strategic initiatives that we're running are driving a lot of success in existing stores. Again, it's not one or two things, it's a number of different things. I want to highlight, of course, the lifestyle subscription, the continuous work in fine-tuning that offering and also the in-store work that our colleagues are doing in stores to find customer needs and fulfill them. That's the foundation to get customer satisfaction and keep churn low. Very important.
The ongoing work to refine, continuously develop, and evolve the store concepts. It's very good to see that something we opened even one or two years ago, there's a lot of improvement being made into the latest stores that are added to the network. We're being better and better, and the new stores are ramping up very good. Recycling outlet, the latest store concept and offering in the market, a success, continuing to roll out that. House brands and especially with the move back to Sweden, the production, and that initiative is continuing to drive new customers to Synsam and support the business. B2B and of course the digital channels, all the work that we're doing on the digital side, we are not always going into a lot of detail, but that's a strong complement to our in-store core business.
It's very important for us because we're seeing that a majority of our customers are engaging with us both online and in store, even though the eye exam and the selection of frames almost all times happen in the store. We want to be at the forefront, and we are at the forefront on also on the digital side. The customer perspective being first in the digital side, as with everything we do, that is one of the sort of core values that we believe in that, and that's been one important factor for us to continue to be relevant with customers and drive a successful development in the business. Thank you for listening and with that we hand over to a Q&A.
Thank you. If you do wish to ask a question, please press zero and one on your telephone keypad.
The first question is from Veronika from Goldman Sachs. The line is now open. Please go ahead.
Hi Martin. Hi Per. It's Veronika here from Goldman Sachs, and thank you for taking my questions. I have three, if that's okay. One, I want to follow up on the comment that you had made in the press release this morning around the Omicron impact in Q1. I'm just curious if you can specify what you saw in January, what proportion of your stores were closed because you didn't have staffing and how that's progressed and whethe at what point in time have you returned or when will you expect to return to a more normal operating environment and run rate? Just so we have a better sense for how to think about the headwind for the first quarter, that would be helpful.
My second question is just on the gross margin, obviously really impressive performance there in Q4. I noticed, Per, that you called out a couple things on the call in your prepared remarks, including supply negotiations. Just curious if you can help us understand what proportion of that gross margin improvement we should think of as sustainable and what instead will roll off as you move into 2022. My last question is thinking about 2022, and I appreciate you've not given guidance, but maybe you can kind of contextualize your expectations for 2022 in the context of the midterm expectations that you've laid out for the business. Would you expect 2022 to be within the range that you've provided for the midterm, better or worse?
A comment both on sales and profitability, please. That would be helpful. Thank you.
Yeah. Okay. Start with the Omicron. Exactly. I t's not like we're closing stores. It's not that bad. That's not the case, but it's more general impact that opticians they take sick leave basically if they feel ill, and they should, of course, because they meet a lot of customers, so that's the right thing to do. That reduces capacity basically. It's not like stores are closed, but we can't get in as many appointments as we would like to with the impact on how much eye exams we can do, and that impacts, of course, the overall business. That goes without saying. The
W e all know that the Omicron was something that was an important factor in society in January and up until February. We we're not health experts, but we tend to see that the Omicron impact in general in society is being reduced. The restrictions is being loosened and everything else being equal, that should mean that we should see opticians returning more and more. I mean, since the Omicron impact should be mitigated going forward basically rest of February and beginning of March. That's our view. It is an optician issue, not closing down stores.
The gross margin was the next question and what is basically sustainable into 2022. A s I put it, if we keep our volumes up then we have good relationship with our vendors, the terms we have would then be sustainable, of course. The prolongings, if everything I mean continues according to plan, I mean, mathematically, the number of prolongings would increase, of course, since that's sort of mathematically so. On the other hand, we live in an environment where we...
There is competition, and this industry has been driven by price campaigns very much and that do we expect to continue. We look at new customer groups all the time. Lower ASP does not have to mean lower gross margin. That's not equal, but nevertheless we are driving growth, not maximizing gross margin. There are, of course, stabilizing factors regarding gross margin, so you cannot like not just look at the positive sides, of course. That's all I can say about that. Regarding 2022 in general, no, we don't give forecasts. We have our financial goals and we have not seen any need to adjust our financial goals.
We continue to have a growth strategy and continue to open stores and also driving growth, so like I say, so it's basically what we can say.
Understood. Thank you. Maybe if I can just add one more. W e've all been talking a lot about the current sort of more inflationary environment that we have, and I suspect you're seeing a little bit of cost inflation in terms of freight and input costs, maybe potentially even in labor. Are you able to pass that through onto your consumers via higher prices? I don't know if you've raised prices at all this year and how you're thinking about your ability to mitigate maybe some of these headwinds in the P&L through improved pricing.
Yeah. I mean, that's an important question we got several times before as well, and I think it's still very relevant indeed. We have to a large extent been able to not suffer price increases from vendors to a large extent so far. That's one important factor. We, in a very high inflation environment Sweden is not like the U.S. or something at this stage, but we're not macroeconomists, so we can't. I mean, of course a high inflation and in Nordic in general, if the Nordic region would experience a high inflation period, then we are in good position to handle that.
I mean, we will be able to pass on as we see it in such case. We have not been there yet. Our focus has been to keep the prices very attractive for customers. That's important. I want to mention though, regarding salaries, that of course, I mean the competition for opticians is important. We are attractive for opticians. We're a good employer. Of course, the importance of opticians shouldn't be forgotten as well.
Understood. Thank you so much.
Thank you. At the moment, there are no further questions. As a reminder, to ask a question, you have to press 0 and 1. We haven't received any further questions at this time. I hand back to you.
Okay. Unless there are any further questions, thank you for listening and have a good day.
Thank you very much.
Bye-bye.