Ladies and gentlemen, welcome to the Nelly Group webcast with teleconference Q4 2021. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I am pleased to present Kristina Lukes, CEO. Please begin your meeting. Well, thank you. Good morning, ladies and gentlemen, and welcome to the Nelly Group Q4 2021 call. My name is Kristina Lukes. As usual, I will host this together with John Afzelius, CFO for Nelly Group. I will start off with a very brief pitch on what Nelly is all about today and focus for the future. I will follow up with a wrap of initiatives from 2021, setting the foundation for our future growth journey. John will take us through the key financials for the quarter and thereafter open up for a Q&A session. I'd like to move to slide 3. Nelly is an integral part of the young woman's everyday life. Founded in Borås in 2004, built through influencer marketing, and a go-to destination for 1.2 million customers. Our core customer, the young fashionista who looks for inspiration and solutions to look and feel fab every day. To move on to the next slide. The next one again. Thank you. Our customer and follower base is one of our core assets, key for us to both build and increase loyalty and frequency on our journey going forward. This is a picky target group, and we have, throughout the years, continued to grasp her attention and love it. Some key community facts and figures are our 1.3 million followers on social media and 1.2 million active customers, a customer base that is growing, placing close to 3 million orders where 40% of our sales come from our own brand. Slide five. We continue our focus on the repositioning of the brand, Nelly. We have defined our core target group. Age is one parameter, 15- to 25-year-old Nordic fashionista. We've started to build our offering outside of the core of the brand, party, into even more occasions, such as every day. This expansion has been crucial to compensate for the pandemic effect in Nelly's previous core and largest product category, party dresses. The occasion party and nightlife naturally has taken a major hit caused by the pandemic. The third part of the repositioning is all about adding and strengthening brand attributes, growing our emotional relationship to our customers and followers. This enabling growth in loyalty, higher frequency, and sustainable growth in organic traffic. Move to slide six. We build plans to drive frequency. Why? Well, our target group shops for her appearance around 20 times per year. With our large active customer base, with consumers that are aware of us and that like us, we are not content with our frequency around 2 times per year. Building awareness and relevance in more occasions are in plan to drive growth in frequency. Even if we have strengthened our presence in every day, we love Magdalena's comment yesterday on letting go of restriction, and I think the direct instruction to go out there and take on the party. Focus on our customer and building the best experience for our core target group will be in focus in 2022. That focus was split in 2020 and 2021 when we, during the pandemic, had to, but also took the opportunity to build a stronger Nelly. We've had a strong internal change program, all to build our platform for future growth that we're now investing in. Looking back at 2021, we set out for several large changes, and we've ticked the box on the majority of them. Centralizing our operations to Borås, close to Stockholm offices. We've moved to a new warehouse. We set out on an ambitious sustainability roadmap with all targets met for 2021. We have an updated assortment relevant for more occasions with less complexity and increased speed and improved flexibility. We have most key roles filled with a new management in place. Some activities have been started but not yet completed, three of them being the full relaunch of the brand, launching of our new site, looking forward to our beta version within weeks, and implementation of our new channel strategy. I'm particularly proud of the work that we've delivered on our sustainability strategy. Some highlights from our three focus areas. Empower Femininity. We have more than 60% of our staff that is female, and I am especially proud of the work done when recruiting to our warehouse positions with a majority of female employees. Fair & Equal, where we've had strong progress when it comes to transparency. Respect the Planet. Happy to see a 120% increase in sustainable materials and Better Cotton sourcing on more than 50% on our own brand. Fresh from the oven, I would like to share two ongoing initiatives under Respect the Planet. We have just launched our second-hand channel for members only in our community Nelly Lounge. We're also, during Q1, launching our Reborn concept, where we've redesigned pieces in Borås from unsold Nelly denim stock. I'd say stay tuned for a super cool collection. Let me finish off before I hand over to John with main highlights from the last quarter in 2021. We are growing 9% in our Nordic core business, and we have continuously during the quarter improved efficiency in our marketing. We grow our customer base with higher engagement and our automated warehouse is starting to produce results. With that, let me now hand over to you, John. Thank you very much, Kristina. So moving on to slide 12, please let me go through the P&L and the financials for the fourth quarter. Net revenue grew by 3% in the fourth quarter, and we can now summarize that we did grow in all four quarters of the year, in contrast to 2020 when net revenue declined, heavily impacted by the pandemic. It was pleasing to see that growth in our core Nordic D2C market picked up to 9%. The growth driver, as in previous quarter in 2021, was mainly healthy growth in a broad array of everyday fashion categories. Party fashion sales also grew, which we have not seen for several quarters, but are still significantly lower than the pre-pandemic levels. I do agree, Kristina, the unleashing of the restrictions or actually removing the restrictions we're looking forward to. What did clearly weigh on sales growth in Q4 though were lower B2B sales as deliveries to Zalando fell compared to Q4 2020. Nelly's own brand has since 2019 been available to European customers on Zalando, and this wholesale business has been since then a small but sensible add-on to Nelly's core Nordic D2C business. It's been a way for us to supply European customers with the Nelly brand on continental markets, and especially since we did exit the continental markets in early 2020. While demand for Nelly's brand on Zalando has been growing nicely, Zalando is transitioning towards a marketplace model, and we have so far decided not to accept the offer to transition to such a model, hence the lower delivered volumes in Q4. Moving on to return rates. The return rate for Q4 was 35.1% compared to 32.5% last year. The increase was partly due to lower B2B sales, as I mentioned, for which we have no returns, but also as returns were at very low levels during the period of March 2020 to March 2021. However, we should remember that the 35% return rate in the quarter is approximately two percentage points lower compared to the levels that we saw before the pandemic. Why is the rate lower now? Well, compared to historical levels, a main explanation is both product mix, sales mix, but also active measures such as excluding customers with an unsustainable return behavior that we did implement in 2020. Moving on to gross margin. Gross margin increased to 43.4% compared to 42.7% in Q4 2020, and gross profit consequently grew by SEK 8 million. The main reason for the higher gross margin are both a higher underlying margin but also lower inventory writedowns and loss generating outlet sales compared to last year. As we've seen in the last few quarters, we have been effectively managing inventory levels, keeping levels of old stock down, and this is a direct consequence of that. Higher inbound delivery freight expenses has been on everyone's lips the last few months and quarters, and it did reduce the gross margin by about 0.5 percentage points in Q4. In addition to this direct negative effect on gross margin, we did see delays and frictions in the inbound supply chain that also caused indirect expenses such as additional work in both operations and purchasing, but it also led to changes to plans for campaigns. Added frictions in essence. Just to conclude on gross margin, one major driver for Nelly's gross margin is the share of own brand sales, and the 38% that we recorded now both in Q4 this year but also last year, is well below the 43%-45% range that we've generated in the last few years. It is a clear target for us to increase this share in 2022 and beyond. Let me guide you through the cost side of the P&L. Firstly, fulfillment and distribution costs were largely in line with last year, and consequently decreased somewhat measured as a share of sales. Fulfillment costs fell both in absolute terms and relative terms as the new automated warehouse in Borås was operational during the entire quarter. Core processes of the automation solution achieved target efficiency for the project on several occasions during the quarter, which is pleasing to see. Other parts of the flow still needs trimming, and the team is now focused on achieving the target targeted cost-saving potential, and we're working hard for that. A positive sign from the fulfillment side. The other part of this line item, and actually the larger part, is the distribution cost, the cost of shipping our packages and parcels to the customers. Distribution costs grew during the quarter. This is primarily due to higher delivered volumes, but also due to package mix. Marketing cost, moving on to that line, amounted to SEK 44 million in Q4 or 10.9% measured as a share of sales. While that 10.9% is slightly higher than in Q4 2020, it is significantly lower than the 13.2% that we recorded in Q3 2021. Changes in working methods within, in particular performance marketing, produced an increasingly positive effect during the quarter, so that is reassuring to see. Thirdly, moving on to admin and other operating costs. They amounted to SEK 71 million compared to SEK 62 million a year ago, which is an increase of SEK 8 million compared to last year. Let me break that down for you. The main explanations for the increase are firstly, higher payroll expenses and, which is primarily an effect of the notice that was given in Q3 2020, which had a positive impact on Q4 2020. Secondly, please remember that we have higher lease-related depreciations in accordance with IFRS 16, which are recorded on this cost line, and this is because the new warehouse entered use in the quarter. Thirdly, we also saw higher expenses for IT and consultants, and this is a result of initiatives primarily within sales and marketing, but also brand repositioning that we have launched. We should also remember that 2020, as Kristina mentioned, was a year when we really drove down costs, did two rounds of notices and had a general very high focus on the cost side. I'm not saying we're letting up that pressure, but we are doing select initiatives that are driving up that cost. On the other hand, please also remember that we saw reduced expenses for group functions and administration for the listed Nelly Group. This also had a positive impact as these functions were fully integrated into Nelly's Borås-based administration in 2021, and I think this is the last quarter that we'll actually be discussing and presenting that line, 'cause that is now done and dusted. In all, EBIT in the quarter was SEK 3 million lower than last year, primarily then due to the cost inflation in admin and other operating costs. If we continue to slide 13, I'd like to draw your attention to a few other topics from the Q4 report. Firstly, please look at two important metrics. We saw an average order value of SEK 751 in Q4 in the Nordics. This is markedly higher than the SEK 702 in 2020 same quarter. A higher AOV is beneficial in several ways, not least regards to our fulfillment and distribution cost in relation to sales. Secondly, Nelly saw a high number of active customers for the second consecutive quarter, and we were then bucking a decline trend that we've seen for several quarters, not least during the pandemic quarters of 2020 and the beginning of 2021. Secondly, inventory turnover remained at attractively high levels in Q4. I've been saying this for quite a few quarters now, and I like it just as much each and every time. Inventory share of sales amounted to a sound 12.6%, which is slightly higher than the 11.9% that we saw last year, but it is markedly lower than the pre-Q2 2020 levels of about 20%. A low volume of older inventories, or in other words, a fresh stock, imply a more attractive customer offering and a lower risk of loss-generating output sales. We have, during the last two years, focused on reducing stock levels by lowering the target for outgoing season stock levels. We continue to focus on maximizing in-season sales and thereby minimizing outgoing stock levels, as we believe that this is supportive of margins over the product cycle and is more capital efficient. Lastly, cash flow in Q4 was a positive SEK 57 million and was dominated by a positive cash flow from operations of SEK 70 million. Cash at the end of the quarter amounted to SEK 198 million, and we continue to leave our credit facilities untapped, as we have done for the last few quarters. It's also worth mentioning that Nelly Group has inherited more than SEK 600 million in tax loss carryforwards, which imply that Nelly will not be paying tax for the next few years. To conclude, we closed Q4 with a solid cash position, unutilized credit facilities, and apart from government tax credits, no interest-bearing debt. Having rushed through these financial highlights, Kristina, I'd like to hand it over to you again. Well, thank you, John. Thank you for listening to our presentation. We look forward to answering any of your questions. Ladies and Gentlemen, if you have a question for our speakers, please press zero and one on your telephone keypad. The first question is from Nicklas Fhärm, SEB. Your line is now open. Please go ahead. Thanks, operator. Good morning, everybody. My first question would be if you could give us a slightly more detailed update on the progress of the savings from implementing the new DC, please. You're obviously reiterating the target savings for this year of SEK 35 million, and it would just be very interesting to hear what you have been able to to take out so far, please. Nick. Yes. Shall I take that? Go ahead. I'll just back up a bit. Back the tape up a bit, Nicklas. You know our numbers very well. Fulfillment and distribution costs consist of two line items. Distribution costs, which is the larger one, which is typically the cost of shipping the goods to the customers, and then secondly, fulfillment costs. The project is focused on fulfillment costs. We saw two effects. As I mentioned, fulfillment costs went down both in share of sales and in absolute terms compared to the last quarter, which is a direct effect of the project. As I mentioned, we, in the core process, are actually achieving already in Q4 on several locations the targeted efficiency gains in the core process, in the automation, in the AutoStore. Some of the more peripheral processes were not yet as efficient, and we have also seen rather high sick leave rates considering Omicron. Still at levels we can handle, but it has been impacting us, please. More staffing in the peripheral processes. In essence, we do see an improvement, a clear improvement in fulfillment cost. We remain confident that we will realize the targeted levels in the quarters going forward. While not explicitly answering your question, I think we're not entirely there yet, and we did not expect to be. We are seeing significant positive changes, but not the full effect in Q4. Let me just 'cause I received some questions along the same lines per email. Please remember also that we're seeing a 9% sales growth. Also in the fulfillment cost side, we're handling more volumes than last year. It's not directly comparable in absolute terms. That's why it's important to also look at the share of sales. The share of sales for the fulfillment cost is going down year-over-year, which is a pleasing first signal to see from the first quarter with the new warehouse in full operation. Lengthy answer, but I wanted to lay out the background there as well, Nicklas. Excellent. That's very well received. Can I take a few more questions before I hand back the word? My second question would be, it seems like sort of the overall online market data suggests continuing declines in site traffic, including for you. My question is, how should we look upon or how do you plan sort of marketing expenditures in, you know, Q1 or 2022, given where we are, essentially? I think. Do you expect to pick up or will it just match traffic? Or how should we forecast marketing spend? I think, going back to our marketing channel strategy, we aim to strengthen our organic traffic. When it comes to bought traffic, that's also a clear focus for us that we've mentioned before to continuously optimize the bought traffic. If I start off with the traffic that we actually buy, it's about improving the efficiency. I'm not that concerned with the absolute level. It's more about the quality of traffic that we buy in order to convert that better. Naturally, when we look at organic traffic, the probability of high conversion from that traffic is higher because per definition, our consumer is already very interested in Nelly. It's a combination of both. If I may add to that, you're quite right, and it's you can just look at, I mean, market data or our data that the online marketing, the market for online marketing has been a tight one for several quarters. Our job is of course to look at what we're doing in Nelly. It's no secret that we weren't happy. We did changes to how we do performance marketing last summer, and we did see that 13.2% share of marketing in Q3, which was a clear negative, of course. What's pleasing to see is that the new ways of working, also a consequence of the changes we did last summer and how we're trimming and working actively on a day-to-day basis, is yielding results. On that component, we're pretty optimistic. When it comes to the other side, what Kristina is mentioning is, I mean, the activity level that we are doing now in Nelly when it comes to marketing channels and new marketing channels is markedly higher than in previous quarters. This of course has a cost side to it, but it also, what we're aiming to do is, of course, to improve the quality of that traffic, as Kristina just mentioned. Also strengthening the community as such. But. The presence and the awareness and the time spent in the Nelly universe for our customers and followers, we aim to get that higher because we believe that will, of course, both drive frequency and loyalty. To sum up, you're obviously trying to figure out what kind of share of marketing should I assume for the next few quarters. There are. Yes. What I'm saying is there are positive underlying trends when it comes to performance marketing, which is a big chunk of our spend. But there are also, I mean, investments that we're doing in other channels than the more traditional that we strongly believe will help us generate more organic traffic and improve the quality of that. Yeah. Rather balanced in a way. I appreciate you know the cost discussion in a sense versus the investment perspective that you have to take on things. I guess if I'm understanding you correctly, you had 11% of sales in marketing in 2021 full year, right? Yes. It sounds to me that the ambition is that should be lower in 2022 rather than higher net. Well, I'd say on a like-for-like basis, if 2022 were 2021 with the same working methods, yes. We're also, as we're saying, shifting that spend toward other channels. How that pans out. Okay. Okay Exactly is, I mean, difficult to say. I mean, we're rather investing what we're saving in the other end. Yeah. In new channels, because that is an investment for the future. Okay. And that will, that we believe strongly will generate Both better quality. Better quality and more organic traffic. Yeah. Mm. Okay, let me try and summarize again then. My best understanding is that, you know, if you can be on par in terms of total marketing spend to sales in 2022, that's probably the best guess at this stage. I mean, that's your words, but I mean it. Yeah, yeah, of course. Yeah, yeah Doesn't sound unreasonable. I mean, we have a we. Oh. It's difficult for us to be that specific, but it doesn't sound unreasonable. Of course. I appreciate that. All right, final question. Thank you for walking us through the gross margin bridge, but a few more questions on that. What have you seen so far in terms of cost inflation, and what do you expect for the first half of 2022 in terms of bought-in margins? What are your plans and thoughts? Yes. I mean, we in the conference that you hosted and we participated in just a few weeks ago, we outlined a longer term perspective on Nelly's gross margin. There are a few clear drivers to our gross margin. For the last two and a half years, we've been averaging about 44%. Mm. In gross margin. The 2.5-year period prior to that, we averaged close to 50% gross margin. Why is gross margin six percentage points down then on an LTM basis from that period? Well, there are a few reasons for that. Firstly, our share of own brand sales fell during that period. From, as I mentioned in the presentation, we're now at 38%. We used to be and should be in that 43%-45% range that we were in during that period. We can come back to the reasons for the share of own brand sales. Second reason is that we went into that period starting mid-2019 with relatively significant levels of old stock. During the second half of 2019 and going into the H1 of 2020, we took the consequence of that by realizing that inventory both in our own channels, direct to consumers, but also through outlet sales channels, and that is impactful. It has a clear negative effect on margins. Then thirdly, you see, but without being too specific, it's also a US dollar environment, of course, that was painful during that period. If you turn that perspective going forward, we're now at 38% share of own brands. Are we happy with that? Definitely not. We want to return to and at least return to old levels of share of own brand sales. We do expect to be better than. We'll have a higher share than in 2021. Yeah. In going into next year. Secondly, we do have a fresh stock, so we're not expecting that level of clearance sales that we clearly did in 2019, H2 and 2020. If I can add just a qualitative comment on the, I mean, one of the key drivers, as John mentioned, is our share of own brands to drive margin improvement, which is of course a clear focus for us. Back to the effect from the pandemic where we've had, you know, a major hit on our largest product category party dresses with a very high share of own brand. We've worked a lot on improving and continuously improving own brand share in other categories. We're setting out for a higher ambition. Yep. Excellent. Perhaps I could come back into the call later on, but thank you so much for taking all these questions now. Thank you, Nicklas. Thank you, Nicklas. The next question is from Ebba Björklid, DNB. Your line is now open. Please go ahead. Great. Thank you, operator, and good morning, Kristina and John. I have a couple of questions. Firstly, it was encouraging to see yet another quarter of increasing number of customers. I would like to just get a little bit more clarification around what you think drove this. Was it that you now are expanding in terms of, you know, the new channel initiatives, live shopping, et cetera? Just a little bit more clarity around that and what you expect so if we can see this trend continuing going forward. I think it is a combination of reasons for us seeing the growth in our customer base. One of them is just as you say, our presence in the new channels, but it's also how we activate and work with our offering on a day-to-day basis. Being relevant towards our core target group at every given time. Ensuring we have the right offering, whether it's, you know, assortment or pricing or, you know, the right context on a much more granular basis. Perfect. Thank you. My next question, let me see here, because there was quite a few already answered. Yes. Okay. In terms of a few of the costs, you know, the higher costs in terms of admin and other operating expenses, you gave, you know, some overview of this, but it would also be interesting to hear a little bit on, for example, IT and personnel costs going forward throughout this year, what we can be expecting versus what we saw in 2021. If I start off and then you can add, John. I think three main reasons. One is Q4 2021 in comparison to Q4 2020, you know, where we really had and needed to push down costs. There was a positive effect on Q4 2020, so comparison is difficult. But the other part is linked to investment, especially in consultants in tech. A lot of the initiatives that we've been working on for a while that you know, we're going live with. One is of course our new site that we will go live with within weeks. It's part of the initiatives for future growth going forward. Yes. I think that summarizes. We were reasonably detailed on the breakdown of that cost base. There are a few reasons, but high level, if you look in the rearview mirror from 2019 to 2020, we did push down costs rather aggressively, doing two rounds of notices in 2020, putting a strain on a large number of cost items. We're not letting up that cost pressure entirely of course, but we are doing select investments that drives both the salary costs and consultant costs in Q4 in relation to the last year. We also had, as I mentioned in the report, some costs that we took in Q3. We had positive effects in Q4 2020 from the notice that we announced in Q3 2020. Mm-hmm. That also helped. Secondly, we do have the depreciations. Yeah. Are going up. That is including that cost line, which is a direct consequence of us taking the new automated warehouse into use, in Q3, and we're then starting to depreciate that according to IFRS 16. For balance sheet-interested readers, you can also see that the balance sheet is grossed up on both sides by the lease effect according to IFRS 16. Mm. I think that should give a bit more flavor on that. Going forward, you asked going forward and it's difficult for us to give you a number, of course. We don't expect, I mean, significant inflation going forward. Apart from the IFRS 16 effect, which is, I mean, a clear difference, we're expecting some inflation, of course, but relatively modest, I'd say. Yeah. We're not planning. Great. Thank you for that. We're not planning to increase staffing significantly. I mean, staffing is clearly down from 2019 levels, and we're not expecting to increase that significantly. I think you mentioned, you said select investments, and I think that's, you know, something that you should bring forward. Keeping cost pressure is extremely important in a business like ours. That is very high on the agenda, but to invest in selected initiatives going forward, absolutely. Great. Thank you for that answer. One more question from me, please. In terms of inventory turnover that is, you know, looking very good, and you have done a lot in terms of improving that, and you've been talking about maximizing the in-season sales. I would just like to know, do you have any or could you give any indication if there is more things that you could do to maximize that further so we can see an even greater improvement to gross margins and if this is in the plans over the next coming year? If I start off with, you know, answering, is it in the plans? Oh, yes. Why? Well, we. You know, key for us is to make sure that we have a relevant offering to our target group at all times. That demands that we keep a fresh stock and that we're quick and flexible throughout our supply chain. That is a continuous journey that we're on. We've taken some major steps throughout the last years. We will continue to have that in focus. You know, a gross margin is a focus for us to grow, and this is a key parameter to make sure that we keep our inventory fresh 'cause we're working with fresh goods. Yes is the answer. Let me add to that. I mean, it's been very helpful and beneficial, especially as a CFO, to see the cash flow impacts of that when we're turning over our inventory in this way. I mean, we receive payments from our customers in a couple of days, paying our suppliers obviously between 60-90 days. By turning the inventory around, as we've had for the last few quarters, we have a negative working capital to sales position. While you ask basically should I assume even higher inventory turnover rates going forward, and I would be I mean, moving inventory turnover up to this level has been, I mean, challenging of course because it's obviously easier to grow your sales if you have ample inventory. It's challenging of course to keep a slim and targeted and focused inventory and still drive sales. There is a balancing act there. What I'm trying to say is, it's been a huge priority back in 2020. We're not taking the foot off that inventory turnover pedal, but it's also not at the same time the main priority to drive it up even further. Yep. We're very happy with the levels we're seeing now. We didn't increase the level from 2020 to 2021, which was perfectly according to our plan. I wouldn't make aggressive assumptions going forward on turning it over the inventory even further because we'd much rather drive sales and drive sales from this level than increase the inventory turnover even further, initially at least. Yeah. I can add. Great. Great. Okay. Thank you so much. That this is also a key activity in our sustainability roadmap. I think that's, you know, sometimes forgotten when we talk about, you know, our focus on materials, for example. In order, you know, the focus on turning inventory and keeping a low outgoing stock means that we're taking care of the resources that we're utilizing. It's also core from a sustainability point of view. Great. Thank you so much. Actually, before I hand over to the next person asking questions, I would actually just love to follow up on ESG and sustainability since you mentioned that, Kristina. It would just be very interesting to hear because you've done so much work now in terms of ESG and sustainability. What has been the customer response in terms of the increased ESG focus from Nelly? What have you heard or seen? Maybe this is also part of the increase in customers. I think we haven't quantified that, but it's part of everything we do in order to improve, you know, the relationship with our customers. I think the easiest and quickest things to react to are, of course, the direct, you know, concrete activities such as, you know, secondhand channel or specific collections or the fact that's easier for the customers to see rather than, you know, the continuous strong improvement in sustainable materials, for example. I think on those initiatives, there are, you know, thumbs up, and not only thumbs up, but a lot of positive interactions and new ideas generated from our community when we do things. Great. Thank you so much for. Sorry for that. All right. The next question is from Tobias Österberg, TT Nyhetsbyrån. Your line is now open. Please go ahead. Yes. Thank you for having me. I'd just like you to elaborate a little bit about the return rate and how much of an issue that is for a company and what kind of measures you're taking for that. If I can start off, we are 100% online, so our store and our you know return rate is part of our business model. We have a very clear ambition to have zero unnecessary returns. What the heck does that mean? Well, in some occasions, we will have returns because you know the product will not fit or you know the size of the shoe was you know a little bit too tight. But there are multiple returns that we can work with all through the value chain. From being clear and transparent and direct to the customer about you know what the garment is all about, you know the look and feel, size, et cetera, throughout you know the entire purchasing journey. I think John mentioned that we are down 2 percentage points in returns in comparison to pre-pandemic levels. That is the result of several initiatives working on assortment in the specific markets, working on how we set up the structure per market, you know, everything from the cost of returning to how we return, and the direct feedback that we have from returns to our assortment department, adjusting the products according to feedback from our customers. We've also blocked, you know, a number of customers that utilize the ability or the opportunity or possibility to return. It is a big cost to handle returns, so it has to be an important priority. May I add to that? I mean, as Kristina said, it's a natural part of a business, and it, the return rate is also clearly linked to what type of customers you're dealing with and what type of product categories. We have huge differences between categories where it comes to return rates. The product mix you have determines your return rate to a large degree, but also the initiatives. Yeah. The return rate is down. It's partly due to mix effects, but it's also clearly due to the continuous work that we're doing with the returns. We're rather happy with quite a few of them. Are we entirely happy and done? Definitely not. This is, I mean, a fashion e-commerce company will always work with returns because that's [uncertain]. Yeah. Just to follow up on that one, you mentioned excluding customers. Can you just give me a sort of number on how many you excluded during 2021 comparing to maybe, like, the year before that? Yes. We started excluding customers in the H1 of 2020. Initially, we haven't been specific on the number, but it's in the order of magnitude of 2000 customers. After that, we have a routine of checking regularly what type of customers bounce into those cohorts of customers that we think are unsustainable. We, on a regular basis, continue to add to that, and it's order of magnitude 4000 customers. Both add, but I would also say that some customers actively come back and say, "I can't purchase". Mm. We have a dialogue with them, looking at, of course, the prerequisites for that customer to come back. Yeah. You got a question this morning, Kristina, how do customers react? The reaction hasn't been that fierce. Of course, some customers don't really understand, but we invite customers to contact our customer support. We explain to them why we think their behavior is unsustainable, and in many occasions, they understand and can also adapt. I think that has a lot to do with the growing importance of sustainability everywhere because it's easy to understand that an unsustainable return behavior is not only unsustainable from a financial perspective, but also from a sustainability perspective. Just a final question, I'll ask after that. You said that excluding customer, but can you just give me a sort of like a brief picture about, I mean, how much or in what kind of degree have these customers returned products from you to get excluded? Just to give me a sort of picture of the problem. We have several different cohorts. It's a combination of return rates that you not only did it once because, of course, if you're a one-time customer, you buy a jacket and it didn't fit, your return rate will be 100%. In order to fall into those cohorts, we have a small handful of them. You need to be returning, have returns, high return rates, and you need to do that a number of times before you actually thrown into that cohort. We're talking that you basically, you return every time you have a return in each and every order you make, and you do that rather often. The return rate is well above our average of 35%. Absolutely. We're talking like 90%. I think that's also a calibration. I think that we've learned quite a lot from these activities, and in some cases, I think we can be much more. I wouldn't say strict, but have a more direct dialogue with our customers on, you know, what's the cost or the effect of your behavior. Because that's also what the customer wants. The customer also wants to act more sustainable, so let's help them. Thank you so much both of you for extensive answers. I'm very happy with that. Thank you. Thank you. We do have a follow-up question from Nicklas Fhärm, SEB. Your line is now open again. Excuse me. Let me just try that again. There you go. You can hear me now? Yes. We can hear you now, Nicklas. Okay. Perfect. Just one final question. You're obviously running at about SEK 8 million a quarter or so in terms of depreciating your right of use assets. My question is just, should we expect any increase or changes in this balance sheet item in 2022 for whatever reason? Or is this kind of a run rate for 2022 as well? Yes. I think the short answer is yes. You know what I mean? Yep. Yep. The best estimate is to extrapolate that. We're running at roughly SEK 10 million a year of depreciations in total, including IFRS 16 effects. Right. Excellent. Thanks for clearing that. Yeah. Sorry, SEK 10 million a quarter, but that was pretty clear. SEK 10 million a quarter. Yep. Absolutely. Thank you. Thanks so much again for taking all these questions. Thank you, Nicklas. Thank you. Appreciate it, as always. We haven't received any further questions at this point, so I hand back to the speakers. Well, again, thank you all for participating, and thank you for some. Thank you.