Rusta AB (publ)

STO:RUSTA

Earnings Call Analysis

Rusta Reports Strong Growth and Resilience

Despite the disruptive IT incident, Rusta achieved a significant 7% sales growth, with like-for-like growth at 2.5%. Volume-driven sales, not prices, have been pivotal, fortifying Rusta's scalability and bargaining power. Rusta's ongoing expansion yielded 3 new stores, raising the count to 208. Q1 to Q3 YoY growth stood at 10.6% with like-for-like growth at 6.2%, underscoring a robust trajectory. Adjusted EBITDA soared by 22.6% for the quarter, cumulating in a 41.8% increase for the year thus far. Despite IT setbacks, which slightly dampened figures, the company maintained operational momentum. The IT incident's aftermath saw no structural or sustained financial harm, with full system recovery and no expected impact beyond Q4. Margins strengthened without price hikes due to improved purchase and logistics costs. Rusta's new markets showcased blossoming sales and margins, signaling successful expansion strategies. The stable financial position is exemplified by a positive cash balance boost to SEK 381 million from a debt of SEK 242 million last year, affirming a potent cash flow and solid balance sheet.

Rusta's Q3 FY2022: Steady Growth Amidst IT Challenges

Rusta, a retailer with a fiscal year from May to April, discloses its third-quarter results, which include the critical Christmas season. CEO Goran Westerberg and CFO Sofie Malmunger report a strong quarter with a 7% sales growth and a like-for-like increase of 2.5%. Despite an IT incident, resulting from an attack on their service provider Tietoevry, Rusta maintained robust margins and enjoyed a 22.6% rise in adjusted EBITDA. The IT issue, now resolved, caused a SEK 60 million drop in sales and a SEK 25 million negative EBITDA impact, slightly less detrimental than initially forecasted.

Expansion and Customer Engagement

With 208 stores, including new openings in Norway and Germany, Rusta retains a keen eye on 150 potential sites and has 25 signed locations set for future expansion. Membership in Club Rusta, the customer loyalty program, surged by 700,000 to over 5.5 million in the past year, reinforcing customer retention and potential marketing savings. Notably, despite improved margins from a healthy purchasing mix and a successful holiday season, the retailer remains committed to its competitive pricing strategy, ensuring long-term customer loyalty.

Financial Health and Guidance

CFO Malmunger highlights a solid financial standing with a positive third-quarter cash flow of SEK 321 million, up significantly from last year. Rusta's positive cash balance now stands at SEK 381 million, showcasing a strong year-over-year improvement. Despite the IT incident's lingering impact, expected to mirror Q3 and incur additional restoration costs of SEK 20 million, Rusta anticipates no further material financial effects into Q4. The company has strengthened its negotiating position with suppliers, leveraged beneficial procurement prices predominantly from Asia, and is poised to benefit from European price improvements in the next fiscal year.

Strategic Prioritization of Profitability and Growth

Westereberg indicates Q4 will be challenging but is optimistic about its potential contribution to Rusta's overall results. The discussion reflects a balance between continued sales growth and margin enhancement, particularly in the developing markets of Finland and Germany. With a return to normalized gross margins between 44-45% now in sight, Rusta plans to resume its traditional strategy of reinvesting purchasing efficiencies into competitive pricing to sustain volume growth.

Earnings Call Transcript 2024-Q3

[Goran Westerberg, executive]

Good morning and welcome to the presentation of Rusta's third quarter. My name is Goran Westerberg, I'm the CEO of Rusta, and I will together with Sofie Malmunger, CFO of Rusta, present the results and the financial results of the latest quarter. As many of you know, we have a financial year that stretches from May 1 until the end of April, which means that our third quarter contains the very important Christmas quarters from November to January. The agenda for today will be a business update and I will take you through and we'll fly over the results and the status of Rusta. Then we'll go deeper into the financial results. And Sofie will take that part. And then towards the end, I will come back and we will have a summary and we will open up for Q&A.So first business update, and just to set the scene a little bit where we are today. We have today or at the end of the third quarter 208 stores. We have during the quarter opened up 3 new stores, 2 in the Norway and 1 in Germany, which then became the 10th store in the German market. Today we have 110 stores in Sweden, we have 41 in Finland, 47 in Norway, and then as I said 10 in Germany. We still have, I think, prioritized locations of about 150 that we are constantly guarding and looking for. And as of today, we have 25 signed approved locations that are already in the pipeline. So since last time, then we have opened 3 of them and then we have added on another couple of ones, so the total now in the pipeline is 25.Moving on to the quarter itself. We've had what I would call an eventful quarter of course, it's always like that with Christmas, but we also had the IT incident. And the numbers that I'm presenting now includes the effects of the Tietoevry IT attack. So what you see is basically the full results. And the strong sales growth was still 7%. We had the like-for-life growth of 2.5%. And if we just stop there and we look at these numbers, you can say that this is really, let's just say, a very quality-driven sales number. It was the main driver, again like last quarter, was volume. So this is not price-driven increases, it's really more items which is so important for our business model, since that creates scalability and it creates a negotiation power from our side towards our many suppliers.On a total level, from Q1 to Q3, we had a growth of 10.6% and a like-for-like of plus 6.2%, which I would deem as very, very strong. Now the really good part of this is the continuation of stronger margins. We have the strength and gross margin during the quarter. And the adjusted EBITDA growth grew by 22.6% during the quarter and the only adjustments was for IPO costs during this quarter. That takes us to a total of plus 41.8% improved EBITDA during the year so far. We can also comment and one of the big drivers here for EBITDA improvement was purchase prices, but also logistic prices, but also a much better mix and also that we had a successful Christmas season that meant less sellouts.Some of the key events, of course Christmas that we already talked about. During the last quarter, we discussed the early start, we can say towards the end of October and last quarter you can kind of see the patterns, the trading patterns of Christmas and that indicated that the reluctance or the slow start that we saw in the previous year was not there. People started to shop Christmas items. And usually that's a very good sign.And we can say that that momentum continued. It went into November and it continued through December. And that's good because; one, you get big, let's just say, as a good top line during the Christmas sales. But you also have a reduced need for sales towards the end of the Christmas season. So that all in all was very successful. You can also say that last year, during the Christmas season, there was a lot of discussions regarding electricity cost, very high bills for electricity. So people were not very interested in buying electrical items and you have a lot of those in the Christmas assortment, light chains, Christmas stars and so on.But this year, we didn't have that situation, electricity was cheaper. And therefore they, as I said, the reluctance to buy a more profitable basket of items at Rusta was more successful. Also having said that Christmas sales is not only about Christmas items, it's also about adjacent business areas, such as home furnishing and consumables and so on. And all of those areas went well, so we got a good mix in the basket.Regarding the IT incident, we woke up in the morning of the 20 of January to basically blank screens. Our homepage was down. We couldn't sell online. Luckily, we could open up our stores, but we also had difficulties replenishing our stores and also receiving containers at our DC. So we had major disruption in our system. That has had certain effects that we have communicated. All in all, once reviewed, now we have seen that those are slightly less as compared to what we previously communicated. But I think the important thing right now is that the effects of the incident is now over, all our systems are up and running. We don't see any structural effects of that and we don't see any financial effects beyond quarter 4 as a consequence of the IT incident.On a more positive note, you can say that we have continued to see the same pattern as we have in previous quarters that our relative price position is really paying off. But also the environment, the whole sentiment on the market, where many consumers are looking for ways to save money, they're looking for low price concept. And it seems that Rusta is really one of the winners in this. We now have more than 5.5 million fully registered Club Rusta member, our loyalty program. That's an increase during the quarter of 200,000 new members and, mind you, the IT incident made it impossible for us to recruit during the second half of January.And all in all, over the last 12 months, we've had an increase of 700,000 new members, which is an increase of 15%. This is much stronger than last year. And I think it's testament to the fact that we are really recruiting customers now. And I think that also lays the ground for more efficient marketing, but also a good top line development in the coming year and years.Another thing that I would like to point out is, of course that we manage to strengthen our margins, we didn't do so by raising prices. I know that that could have been a worry for some of you. We're not losing our price position. We are really protecting that. We do see that we still have headroom and instead this was a mix effect and it was purchase price and logistic costs that contributed to the strengthening of our margins.And one of the areas where we really wanted to take a big step forward was other markets. That's our newest markets, our most immature markets, but also our fastest-growing markets. Here we have taken a significant step towards profitability. And I think this is really important, both now, but also for the future as a milestone towards our financial goals. So I'm really happy about that.All right. Let's hand over to Sofie to take us through more of the financial details.

[Sofie Malmunger, executive]

Yes. Sure. So as Goran has showed you, Rusta has a strong third quarter with increased sales, improved profit, and improved margins. We have a total sales growth of 7% and the like-for-like growth of 2.5%. And this is an effect of a successful Christmas season where sales started early. Volume, just as Goran said, is once again the single largest driver to the overall growth where Rusta's low prices and efficient campaigning continues to drive increased customer traffic to the stores.We are meeting 2 years of strong third quarters, but we still managed to continue our increase both in total and in like-for-like numbers. As for the like-for-like growth, we would like to emphasize that we have a conservative and strict way of measuring, it's only for our stores. So no online sales are included. And each store has to have been open a full financial year to be classified as like-for-like.In addition to the strong sales, we have a gross margin that has increased with 2.8 percentage points, which is then an increase with 14.2%. We also have an adjusted EBITA of 14.4, which is then 1.5 percentage points stronger and it's an increase of 22.6%. Adjustments are only made for IPO costs, nothing else. The IT incident has not been adjusted for. So a short summary of the third quarter is that Rusta continues to do very well and takes clear steps towards the financial targets with improved margins and profitability.The financial effects by the IT incident in January amounts to around SEK 60 million loss in sales with a negative EBITA effect of around SEK 25 million. This is slightly better than previously communicated. Looking to the right, you can see that our third quarter excluding the IT incident would have been 1.9 percentage point higher in sales. That means that we would have had net sales growth of 8.9% instead of 7%. We would have had a like-for-like growth of 4.4% instead of 2.5%. And our EBITA margin would have been 11.9% instead of 11.4%. The negative effect during Q4 in sales and on EBITDA is estimated to be on par with Q3. And in addition to that we will have extra costs for system restoration and similar of approximately SEK 20 million.We expect that the operational disruptions will not have any material financial impact beyond the fourth quarter for this financial year, just as Goran said. We are evaluating the incident and have an ongoing external audit of Tietoevry and of our own operations to ensure higher level of security going forward. We have also initiated the discussion with Tietoevry regarding claims for damages.And looking at our markets, we see a strong performance and growth in all our markets with increased sales, improved gross margins and increased profits. The numbers you see here for sales are excluding currency effects. Our largest market Sweden and second largest market Norway has a sales growth of 5.8% for Sweden and 10.3% for Norway. The profitability in these markets are, as you can see to the right, high, it's 20.3 for Sweden, which is an increase of 2.3 percentage points.For Norway, it's 17.1%, which is a decrease of 0.3 percentage points in EBITDA margin, but it's still a profit increase in Norwegian krones. The decrease is mainly due to currency effects, and it's also due to one more store opening compared to last year, which drives more startup costs in Q3 this year.Our third segment are the markets; consists of Finland, Germany, and online. Here we have a strong sales increase of 8.7%. And as you can see to the right, we have improved our EBITA margin significantly with 3.2 percentage points. And this is an important step and sign that our efforts in these new markets are going well.As you have seen, our profitability continues to increase and looking at our adjusted EBITA and breaking it down a bit for Q3, we can see some clear profit drivers during the quarter. We have higher sales where volume and not increased customer prices are the main factor to the increase. Our gross margin increases with 2.8 percentage points, which is due to lower purchase prices from Asia in particular. It's also due to more efficient campaigns, less sellouts, and lower shipping costs. We have slightly higher operating expenses, which is due to the inflation. The increase is lower than the increase in total sales, which is important of course, and this is made possible thanks to the scalability in our business model where increased sales does not generate increased costs in the same pace.We also have some negative impact of exchange rate differences.So to summarize the EBITA development, we can see that despite inflation and costs for 30 new stores compared to last year, we have managed to increase the adjusted EBITA margin with 1.5 percentage points, which is an increase of our EBITA with 22.6% and that's a great achievement.And then some comments on our balance sheet and cash flow. We have continued to work actively with working capital. Our inventory has decreased with 15%, which is a mixed effect or lower value and less pieces. Lower shipping costs is one of the drivers, but it's also lower purchase prices. This is following the same trend as previous quarters this year and we have a good and well-balanced inventory. Thanks to the improved profit and positive change in working capital. We've had very limited use of our overdraft facility during the quarter.We have a positive cash balance of SEK 381 million at the end of this quarter compared to a debt last year of SEK 242 million. This is an increase of SEK 623 million. So cash flow for the quarter is positive or SEK 321 million compared to negative with SEK 13 million last year. So very strong cash flow for the quarter. So all in all, we have a solid balance sheet. We have a positive cash development and a very stable financial position.And 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. Our intention is to stick to the dividend policy where there will be a more exact recommendation in our next quarterly report.And with that, I hand over to Goran.

[Goran Westerberg, executive]

Thank you very much. All right. So I'll try to summarize this and then open up for Q&A. And first I think it's good that we can all take a step back and look a little bit at Rusta's development. This is one slide that basically shows the growth of Rusta's since the inception back in 1986. And for a very, very long time we have continued to grow and in spite of many different external challenges over the years, we have still managed to continue to grow. And I think now that maybe the IT attack as such, has become yet another example that shows the resilience of the business concept, but also the strength in the culture at Rusta. So we will continue on that path. Looking at the strategy, as I said, there is nothing in what has happened in the quarter that has changed our outlook or changed our financial goals and it hasn't changed the strategy that we are pursuing. Last year, we had heavy inflation that put us back a bit on gross margin, which we did to protect our low price position, but also to keep the wheel spinning, meaning that the volume growth had to be there. That's something that we have succeeded well with and the challenge for this year has been to recover and get back to our normalized gross margins, which we are now well on our way to do.What we want to return to now in the coming quarters and years is basically the normal way of working for Rusta, to continue to grow our business, grow the volume, let the economy of scale work to our advantage, and then to protect both our price position, but also to drive growth. That means that maintaining a low-price position is really important for us, we do it today and we're going to do it in the future. We're also going to have a very wide differentiated assortment both to address new possibilities on the market, but also to spread risks.We will continue to grow primarily with organic growth and we will have a special focus on like-for-like growth. It's also about further increasing the efficiency across the value chain utilizing this growth and especially the volume growth and of course also continue to open up new stores in markets and of course more importantly so outside of Sweden over time.And with that I land on this page which summarizes the results of the third quarter and I would like to open up for questions.

[Operator]

[Operator Instructions] Next question comes from Niklas Ekman from Carnegie.

[Niklas Ekman, analyst]

A couple of questions from my end. Firstly, can you say something about current trading. You mentioned here that you have good momentum here at the start of Q4. But is there any way you can quantify this and do you think that you have a good chance of delivering on grow -- on like-for-like growth of at least 3% in the quarter for instance despite IT disruption? That will be my first question.

[Goran Westerberg, executive]

So to begin with, I mean, we have 2 strong quarters during the year normally. That's usually the seasonal quarters, it's summer and Christmas. And then we have 2 kind of in the middle quarters. So quarter 4 is one of those a little bit in the middle quarters. It's less turnover, and it's also a little bit less important to our total results. Having said that, it's also maybe one of the most -- is a difficult quarter to predict. The reason is that the momentum that we have had for January is very likely to carry over into February, but February is a very small month. April is really the big month in the last quarter, and that is very weather dependent. So you can say that the momentum and the sentiment that we see, which is positive right now, says very little about April. I think most people living in this part of the world knows how much weather affects your behavior.So a sunny, fairly warm April will, of course, have a very positive impact on summer sales, whereas if we would have snow and the really cold weather, that will have likewise a very negative effect on it. So it's very hard to predict. I can say that if I look at all the things that we can see, when it comes to purchase prices, our price position, the momentum in the market, some of the sentiment development that we see primarily in Sweden and so on, that's all good. But having said that, this is very much a quarter where the last couple of weeks matters a lot. So it's very hard to predict, Niklas. I would really like to be able to say something more clear, but February and March likely to carry over the momentum, but April is a new game. That's all about the summer and it's all about the weather.

[Niklas Ekman, analyst]

Realize this and very clear explanation. And kind of on the same topic, Q4, I note that in the last 3 years -- sorry, Q4, in the last 3 years, you've been loss-making. Do you think and, again, with the caveat that April could be both a positive and a negative. In a normal year, do you think that going forward, could you be aiming for profitability in Q4? Or will Q4 do you think always be around breakeven or below?

[Goran Westerberg, executive]

No, I think our overall target is that we should be profitable all the time, naturally. This Q4, I think, will be particularly challenging, not the least because of the Tietoevry IT attack that would basically set us back. But we're getting closer and closer to a point where I think Q4 could actually start to contribute to our overall results. But again, knowing that Q4 is so hard to predict, I wouldn't want to make any -- very optimistic indications about profitable already this year.

[Sofie Malmunger, executive]

We can see that on the sales side, we're meeting quite a tough Q4, both from last year and compared to 2 years ago. So that's the thing we're doing well. We're meeting it the year after.

[Goran Westerberg, executive]

But we're used to that.

[Sofie Malmunger, executive]

Yes, we are.

[Niklas Ekman, analyst]

And just generally, if you could elaborate a little bit on the mix between sales growth and profitability. As you mentioned here now, you saw very good improvement in profitability here, not least in other markets in Finland and Germany. Whereas like-for-like growth, for instance, in those 2 markets was negative. Can you tell us a little bit about your thoughts on the mix here going forward? What are going to be your priorities? Now obviously, strong margin expansion here in the last few quarters, but do you see that shifting back to growth anytime soon.

[Goran Westerberg, executive]

Maybe you want to start by just explaining what we're actually seeing now.

[Sofie Malmunger, executive]

Yes, what you see in the numbers for other markets, like you said, the negative like-for-like growth. That is completely due to the IT incident. So if you take that out, it's a positive like-for-like growth for other markets, and that is, of course, very important. So it's both a positive like-for-like and still a very strong profit increase with the 3.2 percentage points for other markets.

[Goran Westerberg, executive]

Right. And then setting this in a more, let's just say, a bigger perspective, I would say that, again, remind you what it is that we're doing now. We had high inflation last year. We protected our low-price position. We took that on our margin partly. We did raise prices also, which had an effect on volume. This year, the priority has really been about returning to volume growth, but also normalizing the gross margin. Now coming to that point where we have a normalized gross margin, then the whole plan will be that we should be the same old Rusta that we've always seen, meaning we continue to invest our efficiencies from purchasing in lower prices, driving volume, driving sales, and continuing. But it's also been very important, especially in other markets where we're coming from a long period of really investing. I mean like going into a new market, you have to be even more aggressive on pricing and so on.And what we start to see now is that the market can actually, our price position allows for us to, let's just say, not to lower prices more than what we have done and thereby strengthening our margins. So it's basically our purchase price development that is contributing to this and also with both head and tailwind on currency effect. So I would say what we want to go to is really the normal way of doing efficiencies, investing in price, driving volume and creating that positive spiral. But this year, it's been very important to get back to a normalized gross margin.

[Sofie Malmunger, executive]

Yes. Normalized gross margin for us stay somewhere between 44% and 45%, and that's what we are moving back towards.

[Niklas Ekman, analyst]

Just a quick one. Net financials, SEK 55 million in Q3, all of that more or less related to leasing. Is that a good proxy, do you think, for coming quarters?

[Sofie Malmunger, executive]

Yes, I believe that it will be slightly higher, a bit more negative due to more stores, basically. So I think maybe a proxy of 59% instead of now it was 55%, as you said. But that's all due to leasing.

[Operator]

The next question comes from Gustav Hageus from SEB.

[Gustav Sandström, analyst]

If I can start with the membership growth here, 20,000 new members and 700,000 last 12 months. Could you give us an indication whether or not this is partly driven also from Germany and perhaps Finland? Or is this still in your main markets that you have, the main part of that growth?

[Goran Westerberg, executive]

Yes. So we have growth in all segments, and I can also say in all countries. From a percentage point of view, we have the strongest growth in the German market, which is something that has also been in line with our strategy and of course also something that we're very happy about. Besides being an indication of, say, new customers coming to us, it of course also creates possibilities for us to increase marketing and also reducing cost. It's basically cheaper to reach many of our customers when they're a part of our loyalty program.

[Gustav Sandström, analyst]

And regarding the gross margin expansion and your improved costs from procurement, could you give us an indication what type of headroom that potentially keeps you from lowering prices further as we go forward?

[Goran Westerberg, executive]

Yes. I think for obvious competitive reasons, we don't want to name a number here. But I would say that we have a comfortable headroom as we see it over here. And it basically puts us in a very good situation as far as I see it. It means that now we have plenty of space to react whatever happens to the market. We have a good purchase price development. We have good logistic cost development. The volumes are growing. We become stronger there. So we know we have an influx of, how should I say, gross margin positive momentum, which we could use either investing in growth in certain markets or in certain segments or we could potentially also use to strengthen our margins in certain areas further, if we like.

[Sofie Malmunger, executive]

I can just the comment that on the purchase prices improvement that we've seen, that's mostly from Asia. That's what you see in the margin. But moving forward, it's mostly Asia, but as well Europe is sort of coming towards that as well. We don't see any positive effects in the margin from Europe yet, but that is very possible and probable to come during next financial year.

[Gustav Sandström, analyst]

And in terms of bargaining power, would you say that your bargaining power within procurement has strengthened to your volume growth this year? And is that something that you think can be material as you renegotiate prices going forward?

[Goran Westerberg, executive]

Yes, absolutely. That's the whole point of our idea. I mean that's what we have seen over decades now, that really matters. It's the growth that matters. That creates economy of scale not only within Rusta, but it helps to create economy of scale at our suppliers. And it also makes us very attractive as a buyer. And I think that both the global market now where many countries are, so to say, questioning a global supply, many are shift -- there is a shift in the behavior now where you source, but also many retailers not having volume growth and being very careful in buying things on the market. That puts us, I would say, in a very good position right now. So I think that will be helpful going forward and continue to keep this positive momentum rolling.

[Operator]

The next question comes from Simen Aas from DNB Markets.

[Simen Aas, analyst]

Congratulations on a very, very strong quarter. I have a few questions. So the first, just to touch upon price again. So a key element in your gross margin recovery story was actually closing the gap versus your peers in terms of price gap. But to my understanding and how you're communicating now, that is not, you haven't been raising pricing that much. So is the gap widening because the data that we look at in the market is actually that your competitors is still raising their prices. So could you just elaborate on that and give us some more color on that?

[Goran Westerberg, executive]

Yes. So first of all, you could say that we were quite active with pricing over the last year. So you have a run rate effect, of course, carrying over into this year. But then also you can also discuss prices in different ways. So for example, having a less of a need for campaigns, number of campaigns, but also depth of campaigns. When that is reducing, that is, of course, also a price effect, and that's part of what we are seeing. So you can say that half of what you're seeing in the gross margin strengthening is because of that. It's because of mix. It's about less campaigns and sell-outs after Christmas, but also some carryover effects from things that we have done in the past. The other half is then the purchase prices and so on that is feeding into this.So I would say right now, we are, I would say, fairly stable on our actions on pricing out there. What we have planned for seems to do the job basically. We are in a relatively strong position. We see that there is headroom. And we'll see now what happens. I mean we're moving into a new season, where the summer sales, where the pricing will be, we don't know, but we're ready for whatever happens. That's basically the situation.

[Simen Aas, analyst]

That's very clear. And then just on the sort of the impact of the purchasing prices. So this was the first quarter where you saw the positive impact from that? Is that correct or started already?

[Sofie Malmunger, executive]

That's correct. It's the first quarter. We've been guiding on that it will happen, and now it was the first quarter that we can see it in the gross margin.

[Simen Aas, analyst]

Yes. And then just on that topic, the Red Sea event with the increased freight times, et cetera. And could you just give us an overview of how that will impact you? And are you sort of, in terms of your spring summer goods, they are secured and you believe that you get them in time? Or is it anything that we should be aware of on that front?

[Sofie Malmunger, executive]

Yes. We are not worried about the summer seasons. Regarding the lead time, it has increased our lead times with about 8 to 10 days, and that's not a problem for Rusta at all. And from a cost perspective, this will increase the freight costs slightly towards the end of the fourth quarter. But still -- the rates for freights are still, I would say, if you compare it to where it were during corona, this is more of a sort of normalized level. So we don't see a big shift in this. So the situation, both from a logistic point and from a cost perspective, is very much under control for Rusta.

[Simen Aas, analyst]

And then just one final one in terms of, could you just give us some color on the performance in Finland and Germany, just on which performed best and which performed worse, which was most impacted by the IT issues? And then some color on that would be very helpful. Are you in black figures in both markets? Or is it Finland that is contributing positive here?

[Goran Westerberg, executive]

No, like I've been into a bit before, I mean, we have this segment for a reason, and that's very much because it's immature markets, and we don't want to comment on country-specific items. But it goes without saying that you can't have a successful other markets without a successful Finland because Finland is so successful in this market. And also from a strategic point of view for us in the kind of -- in the shorter term has, of course, been to drive the development on the Finnish market. And that's also, I think you see the results of this in these numbers. When it comes to Germany, I would just say, hold your horses. It's positive development, definitely. But I stay on with the guidance that I've had in the past. It's a couple of years away before we could say that this is -- there and then we have a fair chance of reaching a breakeven. That's not around the corner, but I think this has been an important step on that path towards the guidance that we have been out with before.The third part of other markets is online, of course, heavily impacted by the IT incident. I mean we had sales down for about a month. Now luckily, during this time of the year, that corresponds to less than 1% of the total sales of Rusta. So for Rusta as a whole, that wasn't too bad. However, for the segment of the market, that was, of course, much more important, and that's why we also -- yes, we saw some effect of that in that segment. So I would say all parts perhaps except with the exception of online with its particular situation that we had during these quarters, both markets are moving forward, but of course, Finland is ahead of Germany.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Goran Westerberg, executive]

Thank you all very much for listening and see you on the next quarterly report, which will be the last for this fiscal year, on June 13, and then we will present the full year results. And until then, take care and see you next time. Bye.

[Sofie Malmunger, executive]

Thank you. Bye-bye.