Hi everyone, and welcome to InderesTV. Today we're going to talk about Rusta, who recently published its Q4 report. In this interview, we are going to talk about the recent quarter, how the different markets have developed and the outlook going forward. Joining me today to discuss all this, I have the new CEO, Catherine Wigzell, and the CFO, Sofie Malmunger. Warm welcome to you both. Thank you, and great to have you here. So Catherine, this is your second week as the new CEO of Rusta. Can you just start by describing what you find interesting about this opportunity?

Sure. No, but I mean, I've had an amazing first week. And for me, Rusta really ticks all of the boxes. We are operating in the most exciting part of retail, the low-price segment. It's a segment that is constantly growing and has a really strong position. So for me, it ticks all the boxes.

And you have a really strong background within the retail sector. You actually have more than 20 years of experience. And recently you came from H&M Beauty as a general manager. What would you say are the main differences between H&M and Rusta, and what kind of learnings or experience can you apply in your current role?

I mean, they're both great Swedish retailers, obviously, working in highly competitive environments with big volumes and a clear campaign effect. Whereas H&M is a global specialist. Rusta is more of a generalist operating in the European market. And I think being a generalist also imposes us to have a lot of opportunities when it comes to how we can move in and out of different categories. I think that's very exciting.

And you have just presented your first quarterly report covering the fourth and final quarter of the 2025/26 fiscal year. Could you please just summarize the quarter and the performance during the full year?

Sure. No, I mean, we are ending with a stable quarter. We see growth in all of our segments and also increased profitability. Although we're meeting very tough comps, we had sales increase last year of over 14%. And if we look at the full year, we have opened up 14 new stores. We have launched online in both Germany and Norway, and we are ending the year now with increased sales and improved profitability in line with our financial targets. So a strong year.

And as you mentioned, you have three different segments: Sweden, Norway and Other Markets, which includes Finland, Germany and online. Can you describe how each segment has developed during the quarter and how the segments differ in terms of market dynamics?

Sure. I mean, if you look at Sweden and Norway, they comprise over 80% of our total turnover. And here we have seen good development, both increased profit and growth. Even though we're meeting tough comparables. And we see that we have increased traffic to our stores and also higher average ticket. So stable development.

When we look at our Other Markets, we see that we are meeting even higher comps, sales increases of over 16%. And the market conditions in these markets are a bit tougher, more negative customer sentiment and obviously also smaller markets, less mature markets for us. So we haven't come this far in our expansion here. But they continue to be important long term strategically for us. And we will continue to invest both in Germany and Finland, both by obviously increasing sales in our current stores. We will update the concept development, invest in our price position, and also open up new stores.

And you talked about the Other Markets segment, which ended the year on a weaker note. How much of this development would you say is related to internal factors versus external ones?

I think it's hard to pinpoint exactly. But I mean, we are meeting tough comps. High sales last year and also, as I said, a tougher market environment in general in both Finland and Germany.

Mhm. And Sophie, turning to profitability, we can see it has improved for both the quarter and the full year despite new store openings. What would you say are the main drivers behind this improvement?

Yeah. That's great. I would say that we have increased the profitability in the quarter according to what we have communicated earlier. So we have an increased share of home decoration, which is very positive both for sales and for margins. We also have positive cost effects, where I would say that our bonded warehouse is a great example of how we have increased the cost efficiency within our supply chain. And then we also have positive currency effects coming from a lower dollar, which has a positive effect in the quarter.

And if we look at the full year, we have higher sales. We have very successful campaigns and a good price position, as Catherine mentioned. But we also have, for the full year, a negative currency effect, which is due to weaker sales currencies, which is the NOK and the euro. But when it comes to cost, it's clear that the scalability in our business model really works because we have lowered the share of cost compared to last year despite opening a lot of new stores.

Mhm. Talking about profitability, I also think it's interesting to touch upon the Middle East conflict, which has sort of driven up energy and raw material prices and is putting pressure on inflation and interest rates. So how is this all affecting you both from a cost perspective, but also in terms of demand, given the lower consumer confidence we have seen?

Should I start and you can fill in? I mean, if we look at Q4, we saw no material impact. And now for Q1, summer season is secured. So the supply is secured. And I mean, it's a very changing situation day by day. And what I can say is that it's not business as usual. But during the last six years, we've handled pandemics, inflation shocks, war in Ukraine, etc. So we have a long track record of handling and mitigating these types of effects. Mhm.

Do you have anything to add on that?

No, just to emphasize that there are no impacts in the quarter that we just presented and that we see no impact for the current summer assortment or summer sales, which is the first quarter.

Yeah. And I guess that the impact depends a bit on how extended the conflict will be.

Yes. Of course.

Yeah. But looking at your financial position at the end of the period, you are in a net cash position excluding lease liabilities. And talking about that. What are your capital allocation principles and what kind of KPIs do you find most useful to measure returns on investment?

Yeah. You're absolutely right. We are at a very stable financial position, a strong balance sheet. And I would say that's very strong despite opening so many new stores. Also investing in our warehouse and in new automation, which are both very good examples of how we invest in future growth. And at the same time, we have a dividend policy. And our board has suggested a dividend of 50%, which is at the upper end of the policy. So I think it's very clear that we continue to invest in future growth, but at the same time provide money back to our shareholders. So we do both. Mhm.

And in perhaps the last question, looking ahead, what do you think investors should follow when it comes to the investment case going forward?

I'm taking over a very successful company, and the mission from the board is very clear. So strategy remains unchanged. So do our financial targets. And I will continue to drive growth in the low-price market both by increasing sales in our current stores and online, but also by opening up new stores and driving changes in our value chain. So I'm really looking forward to continuing to develop together with all of our colleagues.

Sounds interesting. Going to be interesting to follow you going forward as well. Thank you both for joining us today.

Thank you. Thank you.