RugVista Group AB (publ) (RUG) Earnings Call Transcript & Summary

This is the Q4 2025 Conference Call. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Ebba Ljungerud; and CFO, Joakim Tuvner. Please go ahead.

Good morning, everyone, and welcome to this Q4 quarter earnings call. My name is Ebba Ljungerud and Joakim Tuvner, our CFO, is here as well. I would like to start out with, as I always do, talk about a little bit about the images, you'll see in this presentation. This is some news from one of our top-selling lines, handloom fringes and handloom flatweave that we make in we make in India, and we have launched quite a few new pastely colors and shapes that you will see here in the upcoming slides, really nice, I think. For the presentation, the structure is just as per usual. I will start with the business update, and then Joakim will go a little bit deeper into the numbers. And then, of course, we end with a Q&A. So if we start with the business. First of all, I think happy to say we're very proud of this quarter. Once again, we saw good growth with quite a lot tougher comparables. It's by some margin, our best quarter ever, and we have all-time highs in very many of our KPIs. Top line grew by almost 10%, 9.9% to SEK 270 million. If we look at the organic growth, that represented just above 15%. And the year as a whole ended on SEK 784 million, which is very nice to see a growth year for us. Very broad sales. We sold in all of our segments, everything from very exclusive and expensive unique rugs to handmade rugs and also our machine-made rugs. So it was a good quarter overall. Looking at the orders, they increased to almost SEK 130,000. And here, we can see a bit more detailed on quarter-by-quarter development. This also is by a good margin an all-time high for us. And if you look at the rolling 12 months, it continues to go up. These comparables -- as a lot of our comparables are tougher and tougher, but we see that we are doing a lot of good things in our marketing that really brings in the orders. If we look at new customers, almost 92,000. That means we had a high amount of returning customers, 72% returning customers, which is actually on the high side for us, especially if you think about that it was the black quarter, black month and black week, where we normally have a lot of new customers coming to us. And then the average order value, this you've heard me talk a lot about over this past year. Very happy to see that it's stable, even up a little bit. I think it was around 2% in the report. But if you look at the local currencies, it's almost 8%. This has been a long journey. And now we see that we are getting the results even in this very discount-driven quarter. We've made a lot of changes on site. We've made a lot of changes in how we market and what we market, et cetera, et cetera. So this has definitely not been a quick fix and not just a silver bullet, but many different things. And we will continue to work on this going forward. And I'm sure we'll see it fluctuate, but we feel like we're on a good trajectory to keep it on a stable level. And here, you can see a little bit more how it's developed over time. So you see that there was a very big drop in '23, and then it's gone down a little bit, but now it's been stable to up the past year. Moving over to the profitability. Stable profitability despite this very expensive black month and also as for those of you who read the report already know, we've had some FX wins against us in the quarter. The gross margin ended up at 63.1%, so that's up by 1%. Quite high discount rates, as I said, but the discount rates were even a little bit higher actually when we were selling out our old inventory ahead of the move. And if we look at the year, the gross margin also increased year-on-year, 63.3% versus 62.2% last year. Marketing then decreased to 32.3%. It's still by good margin, our most expensive quarter of the year. We have pointed this out before, but I think it is interesting to reflect a little bit on that we, as a lot of other companies, we rely very heavily on this quarter and very heavily on the Black period. And of course, it's interesting to look at how we can reduce that dependency over time. But for us, it will continue to be a very important quarter. And this, of course, comes from the Black month, but it also comes from that it is a good quarter for interior design and sprucing up your house basically. The marketing led to a 25% increase in sessions. So that's almost 17 million sessions compared to 13.5 million last year. We see that the growth is a little bit slower going forward, and this has to do with that more than a year ago, now we shifted our marketing to being much higher up in the funnel, which does increase the sessions quite a bit. But now we have more like-for-like comparison when we go forward. But of course, we still intend to increase our visits to the site over time. And then if we look at the EBIT, 32.2% -- sorry, SEK 32.2 million, so up year-on-year by also around 10% and the margin was 11.9%, which is the same as last year. I think it's worth mentioning here that there is a big negative impact on this, which comes from the reevaluation of our assets. And it's mainly cash, right, Joakim, in euro?

Yes. On the asset side, yes, it is and that's what impacted. Yes.

So -- and without that effect, the growth would have been almost 18% for this quarter. Looking at the markets and the customers. We differentiate a lot in the markets, and this also has to do with our marketing strategy. You can see here how it jumps from quarter-to-quarter. This slide shows the net revenue growth in percentage change year-on-year, so the quarter a year ago, basically because obviously, we shift so much from one quarter to the next. So it's not so relevant to look at the quarter-by-quarter. But here, you can see that all of these 3 big countries, Germany, Sweden and France, they did well in the quarter, but it does differ a lot quarter-to-quarter. And France has been very tough in the beginning of the year, and then it's actually ended up very strongly and that will happen. And it has to do, of course, with the sentiment in the markets that we look at in the next slide, but also that we shift our budgets and our investments to where we see the best return on investment. So we don't have a strategy that we have to grow in a specific market like Sweden, for instance. And if we look at the customer sentiment, it does continue to fluctuate and actually be quite low. You see here Germany is even down a little bit, and both Sweden and France are sort of low-ish stable. And we -- I mean, we are waiting for this to change. But every time we see some indication that it will change something happens from a geopolitical point of view that makes it very hard for us to impact. So for us, it's important to work on an individual market level, really no matter what the consumer sentiment is. We, of course, value our Trustpilot score very much. It continues to be stable and high, 4.6, a little bit lower than before, which, of course, is not what we want. We had -- since we moved in the summer, the warehouse has worked very, very well, but it was clear during peak that it is a big strain on the warehouse, and we saw some impact from that, I think, in the Trustpilot score. This is very important to us. So it will definitely be a theme going forward to make sure that this stays on a stable level and ideally goes up a little bit. Yes. And with this quarter and me having been on board now for more than a year and our management team being very aligned together with our Board, we have decided to restate our financial targets. The ones we used to have were from the IPO 2021. And I think it's fair to say that, that was a bit of a strange pandemic year when it was hard to judge exactly what the growth level was in the market. Our new targets are long-term double-digit organic growth on top line and continue to have the 15% EBIT target on the profits. And we think that the double digit is realistic. Tough, but realistic, and it's going to fluctuate over time, and it's not going to be every quarter or possibly even every year, but we do see that, that's very doable for us. And when it comes to the EBIT, it's been a long time since we were on those levels, but we also see that with growth, we think that it's reachable for us. And then I'm also very happy to be able to announce that our Board is presenting to the AGM a very large for us, record dividend. Last year, we stuck to our normal dividend policy, which is 50% of the net profit. But that was very much because we were going into this big move project and also we wanted to make sure that we had enough supply and enough inventories for our peak period. And I think it's fair to point out also that we have changed the strategy when it comes to our inventory as well that we have now all of our top sellers, we have larger volumes on them. So we make sure we don't run out. But anyway, this led to -- that we this year felt that we have finalized the move. We have changed our inventory strategy, and we're happy with that. So with this, the Board have suggested the normal one 50% net profit, which is SEK 1.5 and then an extra dividend of SEK 3.56. So altogether, SEK 5. And with that, I hand over to you, Joakim.

Thank you, Ebba. And just as the headline here says, we had a good growth against the currency headwind of about 5.4%. So the growth of 9.9% converted into 15.3% if we look at these numbers in local currencies. Ebba already took you through the markets, where we saw very big variances between the different quarters in the main markets. But in this particular quarter, it was a little bit more even than usual. DACH growing 10.6%, where Germany stood for, plus 9%. And in the Nordics, 12.2%, less of a currency effect there, Sweden growing 11% and the rest of the world growing 8.8% and France having the best performance in that region with a growth of 13%. So if we go on to look at the cost ratios then for the quarter. There are many factors impacting the cost percentage. On the positive side, we have the price increases that we have made throughout the year. We have spoken earlier about the nice price implementation that we did in January, and we also adjusted our prices a little bit during the year and some in September. And then the currency hits us in both ways. Of course, it's negative on the top line. But here, the U.S. dollar, depreciation versus the euro impacts our cost for the products that we source mainly from Turkey. So that gives a positive change of 1.4%. If we then go to the shipping and other selling expenses, we have a cost increase of 0.5%. You see here the rounding differences that we note at the bottom of the page. And this increase is related to a carrier mix change. So the gross margin sums up 1 percentage points higher than prior year. And the total year is actually 1.1%. So that's been pretty stable over the year. Then in other external expenses, you know that we have the biggest item here is the marketing costs and the marketing cost was 0.6 percentage points lower than previous year. So that's good saving, good efficiency improvement. And for reasons that Ebba mentioned, we're quite a bit higher than the earlier 3 quarters.

And I think that's what it looks like for us. It's not an unusual year in that sense.

That's part of the seasonality.

Yes. Yes.

Yes. Looking at the personnel expenses, they are pretty much on par with prior year. If we look at these percentages. And then in other operating expenses, here is what Ebba earlier mentioned, where we have the FX effect from revaluation of the assets and liabilities that we carry in foreign currency. And we had a very good cash generation during the quarter, higher cash balances than usual and higher depreciation of the currencies or appreciation of the Swedish krona. So that impacted the P&L with about SEK 4.6 million. In depreciation and amortization, we have then the impact of moving to a new warehouse and logistics center, I think we can say, partly then the investments that we have done in fixed assets here, warehouse equipment, et cetera, which is most of it. And then also the new lease of this new building, which is impacting this with 1.0 percentage points. So we are on a flat EBIT margin, 11.9% versus the same in prior year. If we would take out this FX effect, I know we can't just adjust like that, but it's 13.6% if we exclude that currency impact. So moving on to inventory. We think we have a well-balanced inventory now...

Yes.

Coming out of the high season, right? And normally, we are a little bit more drained on inventory when we exit quarter 4. You can see we had SEK 133 million at the end of '24. It's even lower the year before when we exited, and we had some not major stock issues, but some going into quarter 1. Now we feel with SEK 144 million, we are more balanced. Part of that is that we've been able to actually receive inbound shipments during the peak season and during the peak month even. So that's good. So we are a little bit in the target range. If you look to the right here in the picture, we are a little bit on the low side, it seems, but we feel that this is balanced, and we are on a good level here. So if we then go move on to last but not least, the most important, cash -- cash flow. Looking up to the left in the image here, we have cash flow from operating activities that increased by SEK 33 million, which is at the bottom left, almost financing the quite for us, heavy investments that we've done in fixed assets during the quarter -- sorry, during the year in our new warehouse and logistics center. And as you can see there in the prior year, we also had some investment that was most of that in quarter 4. And now we had only a minor part, about SEK 2 million in the quarter 4 out of this SEK 35 million. So the result of all this is that to the right in the picture, we have actually generated cash enough to pay the dividend we paid during the year to pay for the investments, and we have increased the cash. And during the last quarter, we have increased cash balance by SEK 61 million. And I think I've mentioned this before, we do have a little bit of an artificial -- artificially high cash flow during the fourth quarter as we collect the VAT during the quarter, which is quite a lot in the peak season compared to the payment we make in October for quarter 3, whereas we then early in January pay out the VAT for what we have collected during the fourth quarter. So it's always a bit bumped up when we end the year. But notwithstanding that, you mentioned about the Board has proposed a dividend of SEK 5, and we feel very glad and comfortable about that.

Yes. That's very true.

And that concludes the financial part. So I hand it back to you, Ebba.

Yes. So just a little bit of a summary. A strong Q4 with multiple all-time highs, a little bit expensive from a marketing perspective, but that's to be expected. For the year, top line this year was around 11% higher than we have ever been, and we are super proud of that, several years of challenging top line growth for us. And also, this was with quite a lot of FX in there as well. EBIT grew 29% for the year, which we're also happy with, especially if you take into consideration that we had a move, a very big move that we accomplished during the year. So yes, good quarter with, of course -- a good year, I should say, and a little bit tougher comparables for us going forward. But that's good for us. That's something to strive for. New financial targets that we have worked out with the Board together with us in the company, with a double-digit organic growth on top line and keeping the 15% EBIT target, which we think is reachable even though it's tough. And then last but not least, as Joakim said, the dividend base 50% of the net profit and then the extra SEK 3.5 which adds up to a total of SEK 104 million in dividends that hopefully it will be approved at the AGM for our shareholders. And I would like to say before we go over to questions, a huge thank you to all of our teams. It's been a very tough quarter. Everyone has worked exceptionally hard. Of course, everyone always works super hard, but peak is peak, and it's very clear in this type of business that it puts a strain and it really demands that people work together and work hard. So thank you very much for that. And with that, I think we move over to the questions, right? Yes.

[Operator Instructions] The next question comes from Johan Fred.

A few questions from my side, starting with your commentary around the momentum in the quarter. You stated that Q4 quarter closed the year with continued strong growth and stable profitability. Is this referring to sort of the momentum that you exited Q4 or just a general comment around the quarter on average? And if you could say anything about sort of the momentum exiting the quarter, that would be much appreciated.

I think it's fair to say that it was a fairly uneven quarter, in the sense that -- which again, is normal in this quarter, but maybe it was a little bit different than what we've seen before that November started a little bit slower or even like end of October started a little bit slower than we have seen before and then November ended very strongly and then it actually calmed down a bit again in December. That is normal for us. Rugs isn't really a Christmas gift thing, but it was a little bit slower in the end. I think we'll see -- we don't -- as you know, we don't disclose how it's going now. But it's -- we are -- as we've said before, we are seeing tougher and tougher comparables. So it's always -- we work hard to deliver the results.

Got it. Got it. And then sort of given the tougher comparables in light of this, you updated your organic growth financial targets, targeting a double-digit organic growth. How should we interpret this in light of what you just said about sort of facing tougher comparables? How comfortable are you with sort of achieving the targets near and long term?

I think it's very important to remember that it's a long-term target and that we see that it's over time because we also know that it fluctuates a lot quarter-by-quarter. It's not always a stable growth. Do you want to add anything there, Joakim?

No. I just think that I don't know how many companies you see growing 20% over a long period of time. And no shadow at all of the people that were setting those targets when we did the IPO because if you look at the numbers that we had pre-IPO, that was very much realistic. So I think that was probably a good target to set then. Now in this new world, I think it's realistic to have a double-digit growth. That's what we've seen and what we've delivered over the past year.

I completely agree. And I think that if you're looking at the estimates for coming years, markets did not expect you to grow sales by 20%, annually. So I think this more reflects a prudent and more realistic view. But moving on to cost then. Could you give us some guidance on cost in 2026? How should we think about wage inflation and cost inflation in general in the next year and also personnel need given that you've expanded and entered into a new warehouse?

Yes. I think when it comes to personnel inflation, I think we are not different from any other company, and you know what the increases are there. As we grow, we do need more resources. But in order to get there to the 15% EBIT margin, of course, we need to balance growth and can't grow as much in personnel as we grow the top line. So we need to balance that simply.

And I think also it's fair to say that a large chunk of our cost is -- varies with the top line as well, right?

It is.

Cost obviously and the marketing.

Yes, it is. So the leverage is not as high because we have 2/3 of our cost base is variable. But then I think we can say also that this year, this past year was a year where we moved into our new premises and managed to do that and spend quite a lot of money in doing it, 2026 may be the year that we are getting more into our new ways of operating and getting the leverage out of it.

And I think we've said that before as well, but we don't see the move as being done. It's like a very long-term project to change and improve and fine-tune, everything we do in the warehouse, which, of course, long term should have positive effects on those types of costs as well.

Makes sense. And finally then on marketing spend, marketing cost to sales decreased year-on-year in 2025. I believe it -- they came out to 30.4%. How should we think about the trajectory and sort of your marketing cost going into 2026, given sort of your new approach or revamped the marketing strategy?

We don't -- it's not something that we drive downwards by definition, so to speak. Very long term, we think there is a somewhat downward trajectory. But we are quite happy with this level of marketing spend. And it's more that it will continue to fluctuate a lot quarter-over-quarter. So it's long, long term, we would like it to go down a little bit, but it's not maybe something that you will see every year.

Okay. So assuming sort of marketing cost around the same level on full year '26 as it was in 2025, you're comfortable with achieving both the 15% EBIT margin target and double-digit organic growth.

I have to repeat that, that's also longer-term goals. So it's -- I don't think you will see that every year. And of course, we aim to do that, but it's -- yes, it's our aim for sure.

The next question comes from Benjamin from ABGSC.

First of all, 2 sort of follow-ups on things you mentioned during the presentation, if I may. First of all, Joakim, could you say again about the FX effect and the underlying margin of 13.6%, please? Are you referring to adjusting for FX effects and other operating expenses here or something else?

Exactly that. So of course, that's seldom 0. It has been positive in some quarters, it's been negative in some, but just taking that item out, then it's 1.7% more adding on to the EBIT margin. And that would not have been there wouldn't we have seen that sharp SEK appreciation. So exactly that.

It's quite a tricky line item to forecast, and I believe it explains basically the full deviation versus consensus forecast in this quarter. So with that in mind, is there any way for you to give us any guidance on the Q1 figure based on spot rates now or best guess?

I think it's hard to say on that particular item because it's the difference between what we closed in December and where we will end in March. I think it's really hard -- I agree, it's hard to give guidance on that. If you look at the top line effects, that one, I think you are more comfortable in calculating yourself. You have seen that in January now the top line headwind is more than the 5.4% that we saw in quarter 4. And you can also see that exchange rates, last year started to appreciate or the Swedish krona started to appreciate at the end of quarter 3. So that one is a little bit more easy to forecast, but I agree with you the trickiness of this one.

Yes. And then a question for Ebba. I was wondering if you could talk a bit more about the AOV development, please. Did I understand you correctly if I heard you say that you expect the AOV to be largely flat or stable from here?

We -- when I started, we felt that the biggest problem was that it was just dropping and we had challenges in getting it to stop to drop. And then as you know, we've worked very hard on this with a lot of I say, small changes, but they've actually been quite big in themselves, but many, many, many changes. And now we see that -- and we want to balance -- I said this in the last report, we want to make sure that we balance the order growth and the AOV growth together. So we can't really look at one without looking at the other. So it's about balancing the 2. And I think that it's not a goal in itself now when we have managed to stop the drop. It's not a goal in itself that AOV has to grow substantially. It's more about balancing the 2.

Perfect. Could you say whether you had any excess costs or any sort of excess activities related to the previous move in this quarter or is Q4 fully comparable, so to speak?

It's fully comparable. We have some minor costs, but not to the material level that we have chosen to write about them in the report or even comment them here. So no major moving costs in the quarter.

Perfect. And following on Johan's previous question on personnel cost inflation. Is there any reason to believe there were excess costs in personnel or booked in personnel related to the move during 2025 as a whole to sort of capture the appropriate base?

Not relating to the move. No, there wasn't. You have always some one-offs in the quarters, but not that we have chosen to publish.

Perfect. I think that's all I had for now. And perhaps, Joakim, to you, good luck trying to stay retired.

Thank you.

I agree.

The next question comes from Emanuel Jansson from Danske Bank.

Hope you can hear me? Just a few follow-up questions here. I mean you're mentioning that the warehouse investment more or less are complete. And I know that you said also that it could -- that you are continuing to develop the warehouse and its progress will be very interesting to follow. But I think how we should view going forward with this new targets, I mean, double-digit growth, 15% EBIT margins. Going forward then, what are your key investment priorities for 2026, 2027 or the upcoming 3-year period? And how should shareholders think about the balance sheet between ordinary dividends and extra dividends and reinvestment needs going forward?

Do you want to start or...

Yes, I can start it. So do you mean reinvestment needs in terms of tangible assets?

Yes, exactly. Yes.

Yes. Yes. So on the investment needs going forward, it's not that we foresee continued investments. We have automated inbound, as you have seen. And we haven't yet automated so much of the outbound. Those investments, if any, will have to somehow stand on their own return on investment, giving good return to the shareholders, but there is nothing we have in plan, so to say. But we will, of course, drive automation of our operations. On the IT expenses that we have activated in the balance sheet earlier, we stopped doing that in 2023. We started writing them off in June of 2023 during a 5-year period, and we aren't activating any such IT development costs for now. We are expensing all development that we make. So I mean, on the balance sheet, I won't foresee any major changes going into financing investments.

I agree.

Perfect. That's very, very clear. And yes, jumping back quickly on marketing and marketing costs. Maybe it's hard to predict, but maybe you see this as a long-term target level? Or should we expect it to come down eventually like in the long term? And are you implementing any AI or other technologies to improve marketing efficiency or customer acquisition costs in order to, in the long term, reach the 15% EBIT margin. Is that necessary, so to say?

We are implementing a lot of different things in our marketing and actually all over the business in terms of AI tools and working with different companies really in -- some things we build ourselves and some things we buy from companies. But we're not doing that necessarily to drive down the percentage. It's more to be more efficient than reach more people because we think that we -- long term, we need to be a lot better at building our brand long term, which, of course, we want to have a long-term effect. But it's not something you see return on investment right when you do it, at least not in my experience. So it's important to -- for us to be able to do that consistently. So that more helps that type of investment, I would say. And yes, long, long, long term, we would like to see the percentage go down a little bit, but we are happy with this level as well for now.

Yes. Absolutely.

Perfect. And lastly, just out of curiosity on how do you see the RugVista brand is developing? And have you conducted any recent brand research or customer service to measure any brand awareness and perception in your core markets...

Yes, we have...

Given that you have seen quite solid order growth and also site business?

We do measure but infrequently because we have so many markets. So -- but we also measure it when we look at our non-branded and branded organic search, and we have seen quite nice uptakes in branded search, which we interpret as a sign that the brand is getting stronger. We are still very small in any given market, very small, maybe it's an exaggeration. But we are not big in any of our markets. So we see that there is a lot of potential both for getting the brand to be more well known and for us to grow. So in general, we have growth to do everywhere.

And is it possible to quantify the share of organic search now?

No, we haven't disclosed that now. It's -- no.

But is it fair to assume that it has increased at least...

It had -- yes, it has increased. Thank you very much. We also have a bunch of questions here online. You previously mentioned that you source from India in euros and that the local currency has weakened, which could be reflected in renegotiations. How often do you renegotiate these contracts? And when is the next round? This is something that is done. We don't really do it in rounds. It's much more of a continuous work. We add suppliers and we remove suppliers every now and then. So it's really a continuous work. And it might be good to know that we source our handmade rugs from India, whereas machine-made comes from Turkey and Egypt primarily. And then we have another question. Should we expect any further margin support in Q1 from the weakening U.S. dollar? That's for you.

Yes. Yes, but there are other factors. The answer is if you isolate, not further because I don't know where the dollar will go. But of course, we have purchased products in dollars that are -- have been on a weak dollar through the quarter for that will be sold in quarter 1. But then there are other currency effects as well that will impact negatively. Like I mentioned in January, there is a much larger hit on the top line than we had in quarter 4, and that will impact the margin negatively.

Were there any one-off items included in personnel costs this quarter? You already mentioned that to Joakim.

Yes.

What needs to happen for RugVista to reach a 15% EBIT margin, which cost lines scale with growth and which are more fixed? I would say COGS and marketing scales with growth, whereas the other ones are more stable. Of course, there can be investments in various staff, et cetera. But in general, it's the 2/3 in the top of the P&L that scale.

Exactly. And of course, there are -- at the margin, there are economies of scale also in the variable items where we get the stronger negotiation power with freight forwarders, with the suppliers of carpets, et cetera. But those are more on the margin long term.

Could you further explain the changes in leasing arrangements? Is that -- these are...

Yes. Yes. What has changed from quarter 3 to quarter 4 is that we have left the premises, the old ones that we had in Limhamn. So that is a change. Then we had actually 2 in Limhamn then that we left in quarter 2 of last year and the second one where we had the main office, we left at the end of quarter 3 last year.

Did we respond to this one?

Yes.

Sorry. Okay. And then we have the increased dividend is very welcome. Were there any discussions about share buybacks as well? This is a Board question primarily. But of course, the allocation of capital is something that is discussed. As you know, we are not on the stock exchange, but on First North, which has some constraints on share buybacks. It's something that can still be done. But at least for this year, the Board decided that they preferred to doing this extra dividend.

Yes. And we have been looking into doing those buybacks. But those were -- when we looked at that, we looked at 2 different suppliers of that product. And the cost was very high. The cost was about 45% of what the dividend is. And the benefit of doing those buybacks would then only benefit the part that benefit from tax. So the rest can actually do their own buybacks and use the dividend that we now distribute to buy their own shares and get basically the same effect if you don't have a negative tax effect.

And then I think the last question, could you elaborate a bit on how and if you have changed your marketing strategy in the last couple of years? Absolutely. So this is something that I have talked about quite a bit over the years. I think you could say that we have done 2 major shifts. And then, of course, it's marketing, the way we do it is very much a day-to-day trading business. So it's about updating everything all the time. Us working in so many countries and coming from a world where we were mainly on Google or mainly did like search -- paid marketing, that we have changed, and that's more than a year ago now to be much higher up in the funnel. And there are a couple of reasons for this. One is that we are actually in the interior decorating and very design-driven and visual world. Most of our customers buy a rug because they want to improve their home in some way or their office. So that means that we have much more visual ads that we think are both getting people to come to us earlier in their buying process, and we reach them earlier in the buying process, but it also has the other effect of buying brand -- sorry, building brand over time more than just word descriptions. And the second one is that we were much more focused on, I would say, winning the big markets in Europe before, whereas these days, we, to a much larger extent, follow where we see the return on investment. As you saw in the slide where I showed some of the countries, we're still growing in the big countries. But we see that for us, it's not super relevant if we grow in Belgium or in Germany as long as we grow. So that's why we -- and in some ways, it can even be easier to get the long-term brand building effect in a smaller market than in a bigger market. So we change it depending on where we see the return on investment -- the return of investment.

And that was the final question Ebba?

Yes. Thank you very much for listening, and thank you to everyone for this quarter. And we look forward to speaking to you again after the Q1 report.

Great.

Have a nice day. Bye.

Bye.