Rusta AB (publ) Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Schmidt - Danske Markets Equities - Analyst : 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. And 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 going to be opened? How many is going to be sort of in place in the coming fiscal year, for instance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 7:00AM, RUSTA.ST - Q4 2024 Rusta AB (publ) Earnings Call

Question: Daniel Schmidt - Danske Markets Equities - Analyst : Basically, you're more comfortable with the upper end maybe?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : No. Okay. Good. And just coming back to the gross margin -- and also the gross margin, where you, I think, surprised us at least. And of course, you talk about better purchase prices and then probably lower freight cost 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?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : Yes. 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 April 25. So reasonably, that had a fairly big impact. Would you dare to quantify the sort of the weather effect on sales in April?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : Yes. Okay. Good. And just maybe finally on costs again. And you had this tailwind on -- sort of coming off extreme highs on freight cost. But then again, we've seen freight costs moving up again. And 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? Could you give us any idea how we should think?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : Yes. 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?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : And you also have the rights of private label, right, supporting that?

Question: Daniel Schmidt - Danske Markets Equities - Analyst : And then just maybe finally, on Turkiye, as you announced a month ago, I think. Have you started to take cost for building up a purchase offers in Turkiye? Or is that yet to come?

Question: Simen Aas - DNB Carnegie Investment Bank AB - Analyst : I have a few questions. And I'll start with -- you mentioned that you have seen a strong start to the summer sales 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 the May in particular?

Question: Simen Aas - DNB Carnegie Investment Bank AB - Analyst : Okay. So in other words, it's fair to assume that May have been positive then, given that we had [negative] like-for-like in Q4?

Question: Simen Aas - DNB Carnegie Investment Bank AB - Analyst : Yes. 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? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 7:00AM, RUSTA.ST - Q4 2024 Rusta AB (publ) Earnings Call

Question: Simen Aas - DNB Carnegie Investment Bank AB - Analyst : Okay. That's fair. And then my final question is on the new investment that you're doing in this new automation system. Can you just give us some timing on the SEK300 million there? And also, you said that it will have a positive impact on [EBITA] as early as '26, '27. Is that an absolute EBITA level? Or do you mean 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.

Question: Simen Aas - DNB Carnegie Investment Bank AB - Analyst : Okay. But how much drag will it be or how annual cost will it add to turn on another way?

Question: Oystein Eng - Watch Media Norge - Analyst : I'm calling here from Norway. Very interesting presentation. What I wanted to ask about firstly is that now, as you've gone through the presentation, I didn't -- and the incident IT thing was mentioned like briefly multiple times. But do you have an estimate of how much that actually costed you in broader terms?

Question: Oystein Eng - Watch Media Norge - Analyst : Yes.

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. And that's quite a lot.

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. And secondly, now you have been 10 years in Norway, if I'm not mistaken.

Question: Oystein Eng - Watch Media Norge - Analyst : Yes, yes, yes. But it's going to be this year, at least.

Question: Oystein Eng - Watch Media Norge - Analyst : Will we see any sort of major sales campaigns in Norway or anything like that do you think? Will there be some kind of celebration down the line here commercially?

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. Interesting. And you also mentioned that you have been relying more on Swedish market lately. And when you compare like what's the -- 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 more -- perhaps more crucial to be present in that area or that area compared to Sweden who have like more towns, bigger towns?

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. And if I'm not mistaken, when you open a new store now and they turn out great, it might go breakeven in one year. Does that differ from country to country? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 13, 2024 / 7:00AM, RUSTA.ST - Q4 2024 Rusta AB (publ) Earnings Call

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. And lastly for me, how does the company like Rusta embraces yourself against new competitors like worldwide, like Temu and like big businesses worldwide? Are you in any way affected by that kind of competition now?

Question: Oystein Eng - Watch Media Norge - Analyst : Yes. Yes. Resilience.