BHG Group AB (publ)

Thank you, operator. Good morning, everyone. Moving to slide three, please. We came into the quarter on the back of the exceptional pandemic-infused growth from spring and early summer. And as our performance makes clear, demand has remained strong also during the third quarter, with our DIY segment continuing to be especially favorably affected by changed consumer behaviors, but our home furnishing segment also performing solidly. Today's agenda follows the format from earlier earnings calls and includes results highlights and business and financial updates, as well as a summary followed by a Q&A session. I'll kick it off, then hand it over to Jesper to cover the financials before I summarize and we launch into the Q&A. Slide five, please. Cutting straight to the chase, the business grew by almost 40% and net sales reached 2.3 billion SEC. Organic growth amounted to 32.3%. Adjusted EBIT came in at 194 million SEC, corresponding to an adjusted EBIT margin of 8.5%, and cash flow from operating activities was positive despite the exceptionally strong cash flow of the previous quarter, which in turn led to a peak in supplier payments in the third quarter. With year-to-date cash flow amounting to 774 million SEC, our financial position is solid. Clearly, many of the underlying driving forces which led to the exceptional growth that we experienced in the second quarter of the year have also had an effect on the third quarter. Consumer interest in online shopping in general and in home improvement specifically has remained on a high level, and we've been well-placed to capture the resulting demand. Commenting briefly on the segments, more on which later, the home furnishing segment has delivered very robustly for eight consecutive quarters now, and the third quarter was in many ways the carbon copy of the previous one with good growth and strong margins. It continues to be the DIY segment that is most clearly favorably affected by the unusual trading conditions in the wake of the pandemic. Our two largest platforms within DIY, BigHema.se and BHG Finland, both grew in excess of 30% in constant currencies, while some of our niche private label-based units grew at truly exceptional rates. We continue to expect a reversion to more normal trading conditions, but note that trading has remained strong thus far into the fourth quarter. Slide 16. Ever from the start, we've set out to consolidate the market for home improvement with a two-pronged approach, combining organic growth with acquisitions. And when it comes to the organic components, we're now reporting our fourth quarter in a row with growth in excess of the 15% level, which is our communicated target over a business cycle. The exceptional peak from the second quarter of 42% was followed up in this past quarter with organic growth of 32%. which in turn was comprised by the home furnishing segments 29 and the diy segments 35 but growth at these levels and although we do not yet have complete market data we're convinced that we continue to extend our market share in both segments slide seven please our strategy remains focused on four cornerstones firstly a continued expansion of our leading product range We've not reached the million skew mark yet, but we are within touching distance. Secondly, scale and a high share of own brands in our sales mix. With year-to-date growth at 45%, not least fueled by our private label range, we continue building scale advantages. Thirdly, creating the most appealing shopping experience and leading in the digital realm. We grew our digital footprint significantly in the quarter, seeing more than 76 million visits to our destinations. And finally, offering the market's best professional guidance, service and support, including in the quarter further extending the reach of our installation network within DIY, as well as the capabilities of our own last mile delivery set up on the home furnishing side. This is our ecosystem. Moving on to the business update and turning to slide nine. I've been on a path of profitable growth since inception some nine years ago. Some key metrics describing who we are today at a glance. On the left-hand side, our CAGR since 2014 amounts to 40%. In this period, EBIT has grown well in excess of 100% per annum. Our EBIT margin on an LTM basis stands at 7.2% and is generated by our over 80 customer-facing web properties. And now moving over to the right-hand side, These properties have been visited well over 200 million times here today, generating some 2 million orders from customers residing in 19 countries across Europe. And finally, our product portfolio is leading in terms of its breadth and depth. Slide 10, please. As I've already mentioned, one of our core strategy pillars is to continue expanding our product range within current categories as well as into new categories under the broad home improvement umbrella. As a result of this expansion, and primarily within the DIY segment, we have updated the assessment of our total addressable markets. Inclusions compared to our earlier estimates are fields such as leisure, household appliances, and smart homes. Based on this broader set of categories, our net sales of 8.3 billion SEK on an LTM basis should be viewed against the backdrop of a Nordic online market for home improvements worth some 35 billion SEK, which in turn forms part of the total addressable market in the Nordics, worth some 300 billion SEK, which finally, of course, is dwarfed by the almost 20 times larger EU market. And with online penetration standing below 12% still, but increasing steadily, the bulk of the growth in the total addressable market will continue to accrue to the online segment for many years to come. Moving on to slide LLM, please. Our main geographic focus to date has been on the Nordic markets. since the second half of 2018 we're also present in a number of fast-growing eastern european markets moving over to the right-hand side our current geographic base provides fertile ground for continued expansion and to sustain our long-term growth trajectory within diy the online penetration increase and product assortment expansion are perhaps the most important growth fibers whereas our home furnishing segment in addition has clear geographic acceleration opportunities both in the Nordics, and here I can mention Norway as a still significantly fragmented market, as well, of course, as in Eastern Europe. When it comes to stepping into new geographies, we certainly have the critical mass to do so, and are also already today extending the geographic reach of our private label businesses by taking them pan-Nordic in the first step, as well as selectively entering mainland markets. And we remain committed to M&A as a key accelerant of growth and strategy execution. After a somewhat slower period deal flow-wise, the pipeline is back up at healthy levels. Summing up, we are selectively pursuing geographic expansion, and we're also continuously scanning opportunities for larger geographic moves. However, we view these as optional upsides. Our approach is not reliant on them to deliver our communicated growth ambition. but we're ready to strike should the right opportunity arise. Slide 12, please. Our business model includes a multi-brand approach, which helps maximize our digital footprint and results in a customer base that is both broad and attractive. The largest cohort consists of customers who are active in the labor market and in their prime when it comes to improving home environments for their families. We have a roughly 50-50 split when it comes to gender, with men being more prevalent within DIY and women within home furnishing. We consistently grow the active customer base and did so also in the third quarter. And despite brisk growth in new customers, we grew the share of returning ones. And the importance we place on curation, the availability of product experts who can help guide customers through the buying journey, and the attractive nature of our customer base, all combined to yield return rates in the low single digits. The graph in the middle shows how we have not only maintained but actually increased the delta between our gross margin after direct selling costs and our marketing investments, partially as a result of growing the share of sales from our private labor range. The resulting marketing ROI means that we have a great return already on a customer's first purchase. And as we've seen, our growth has been boosted as a result of the pandemic. However, we've not recorded any significant changes with regards to customer mix and profiles. We're committed to constantly enhancing the customer experience, a commitment which was put to the test during the exceptional demand peak of the second quarter. We've cut lead times and clawed our way back during the third quarter, and we continue to invest in systems and processes to ensure that we meet or surpass our customers' expectations. I'll now hand it over to Jesper, who will walk us through the financials in more detail. Over to you, Jesper.

Thank you, Adam. Starting at slide 14. The strong growth in the third quarter clearly demonstrates that the Scheng customer behaviors during the early stages of the pandemic are persisting to a high degree. As Adam mentioned, net sales increased 39.7% to reach 2.290 million SEK and organic growth reached 32.3%. On the back of continued favorable market conditions, we reported the strongest EBIT and EBIT margin for a third quarter to date, reaching 194 million SEC, which corresponds to an EBIT margin of 8.5%. The high adjusted EBIT margin was the result of, one, a favorable price and product mix, including a continuously growing private label share of sales in the due to sales segment, two, operational leverage in fulfillment, logistics, and SG&A due to high growth. And three, positive currency effect, which I will get back to. Moving on to slide 15. Turning to some of the sales drivers in the quarter, similar to the performance in the second quarter, the continued strong trading conditions led to, firstly, Strong growth in the number of visits to the group destinations, which increased by 58% to 76 million during the quarter and generated 726,000 orders. Secondly, conversion rates, which were essentially at the same level as last year, despite strong growth in traffic. And thirdly, a chain product mix, which combined with the strengthening of the SEC to result in lower AOV than in the year earlier period. However, as the gross margin trend clearly demonstrates, the decrease in AOV did not have any negative effects on earnings, since an advantageous AOV structure could be maintained in relation to the delivery options relevant to a given category. In other words, the AOV for bulky products, which are sent on pallets, remained high, and the high growth for small parcels could be managed by delivering to service points. Turning to slide 16. Continued favorable market conditions and both segments' strong position contributed to the EBIT margin nearly reaching the all-time high level of the second quarter. Strong top-line growth at 39.7%, resulting in strong operating leverage, translating to a gross margin increase of 57% and an EBIT increase exceeding 100%. The gross margin improved by 2.8 percentage points to reach 25.9%, our highest gross margin to date, and the product margin amounted to 37.0%. Just as in the first six months of the year, the gross margin improvement was to some extent driven by the continued focus on cost and process efficiency in purchasing and logistics, as well as a growing share of sales from our own brands. However, in the third quarter, the gross margin improvement was also driven by strong demand, which resulted in fewer campaigns than usual and positive currency effects from the stronger SEC, resulting in a favorable impact on the gross and EBIT margin by 0.7 percentage points. Let us now turn to our due-to-sale segment. Slide 17, please. The due-to-sale segment followed up its exceptionally strong performance from the second quarter, with yet another strong quarter. Net sales grew by 46% to reach 1.464 million SEK, of which organic growth amounted to 34.6%. The segment platforms in Sweden, Finland and Denmark performed well during the quarter, while a number of the more specialized operations in Sweden, particularly those with a high private label share of sales, reported very strong growth. Once again, the P&L in the due-to-sales segment was nicely leveraged, with a top-line growth of 46%, translating to an EBIT increase of 175%, reaching 131.2 million SEK, corresponding to an EBIT margin of 9.0%, the highest we have recorded to date. During the quarter, we continue to develop our customer offering through continuous expansion with the market's leading range of external brands, strong growth for our share of own brands, a further rollout of installation services, and improvements to our delivery capabilities. Slide 18, please. The home furnishing segment is now in its eighth consecutive quarter of good growth and a strong operating margin. Net sales in the home furnishing segment grew by 29.5% in the quarter, reaching 834 million SEK, of which organic growth amounted to 28.6%. Net sales increased the most in the Eastern European, followed by the Swedish and Danish markets. The gross margin improved by 4.1 percentage points to reach 30.7%. Roughly one-third of the margin improvement is a result of the previously mentioned currency effects and two-thirds a result of continued scale improvement and inventory management, translating to lower fulfillment and postage costs in relation to sales. Adjusted EBIT increased by more than 100% and reached 82.9 million SEK in the quarter, corresponding to an EBIT margin of 9.9%. The further development of our warehouse and logistics infrastructure in the Nordics continued. With an upgraded software platform now in place at all last-mile terminals, providing the basis for improved track and trace functionality for customers and added flexibility around choosing delivery windows. Let us turn to cash flow. Slide 19, please. The exception of demand during the second quarter of the year led to an increase in working capital during the third quarter as a result of supplier payments catching up. The exceptional growth and corresponding acceleration of cash flow in the second quarter led to a partially changed seasonal profile for working capital, which usually sees inventory build-up during the first quarter prior to the peak season, with high sales and thus high cash conversion during the seasonally strong second and third quarters, after which working capital and inventories typically increase in the fourth quarter. Cash flow from operating activities amounted to 20.9 million SEK corresponding to a cash conversion in relation to adjusted EBITDA of 8%. The right hand graph showing the development in the liquidity walks us through the starting period position of 270.3 million SEK adding the cash flow from operations deducting impact of investing activities, a majority of which is M&A related. And finally, the financing activities, which consists of a mix of amortization of leasing liabilities while funding the ongoing M&A agenda through an acquisition facility. Bringing us to the period end, 874.2 million SEK of liquidity at hand. Slide 20, please. The group's net debt amounts to 86.5 million SEK at the end of the quarter. Our strong year-to-date operating performance meant that net debt in relation to LTN-adjusted EBITDA ended at 0.1 times a significant outperformance of the medium-term financial target range. Our financial position is strong. On top of our liquidity at hand, we had unutilized credit facilities at the end of the quarter of 434 million SEK. which means that we can continue to execute both organic and inorganic growth initiatives. Handing this back over to you, Adam, to summarize and conclude.

Thank you, Jesper. So summarizing on slide 22, our position was strong before the pandemic broke out, and it's further strengthened two quarters into it. We have our people, supply, demand, and financial position all under control. We're reporting our fourth quarter in a row with above target goals, Our gross and bottom line margins are at the industry-leading level, on the back of a sound mix development and strong operational control. The financial position, as we just saw, is strong, with ample cash on hand and significant on-demand credit facilities. Strategy execution is in motion, revolving around our four pillars, which make up the BHG ecosystem. And finally, with strong total and organic growth, as well as expanding margins, we're on the path to hitting our mid-term financial targets, including reaching 10 billion SEC in sales. Turning to our final slide before the Q&A, the call to action, slide 22, please. This is just a friendly reminder to those who may have been focusing exclusively on the Q3 earnings season until now. Black Friday is around the corner and Christmas is approaching. This concludes our presentation and we'll now open the call for questions. Over to you, operator.

Thank you. If you wish to ask an audio question, you may do so by pressing 01 on the telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. Once again, it's 01 on the telephone keypad if you wish to ask an audio question. There'll be a brief pause as we wait for questions to be registered. Our first question comes from Christophe Hagius from SEB. Please go ahead.

Thanks, Oprey. Good morning, guys. A few questions, if I may. Firstly, on conversion rates, which are rather flattish in the quarter, I assume that the mix was negative to you here, since you state that Baltics outgrew the rest of the company. And it's my understanding that the Baltics have significantly lower conversion rates than the rest of your business. So could you elaborate sort of what's the like for like conversion rates development here in Q3? Thank you.

That's right, Gustav. There is somewhat of a mixed effect in the total. But the general picture, I think, still is more or less in line with the conclusions here that conversion rates are similar to the corresponding period in the previous year. Also, if we look at the picture unit by unit. But yes, a slight negative effect from the mix right there.

Okay. But not material, it sounds like. Secondly, I guess you don't disclose them, but I assume you have some type of NPS scoring or customer complaints scoring that you keep internally. Could you please let us know a little bit how that has developed in the summer here? I assume that there's been quite some constraints on customer support and shipping and all that, which I guess would have put some pressure on your customer happiness.

Yes, you're right. We do follow both the various external ratings that are available, but of course also we track NPS scores internally. And the picture is somewhat mixed across the group. In fact, if we roll up the total NPS for the various group units, we've seen an improvement in Q3 versus the corresponding period in the previous year. And you're right there, Gustav, that we also have commented on that, that the extraordinary demand, especially in the second quarter, did put some strain on our value chain, both in terms of our external partners. We did comment a bit on that in Q2 with some challenges on the logistics side, especially April, May. but also with lead times in customer services. To a significant extent, we've eaten up on that deficit there, and we see generally a movement in the right direction. We still have improvements to do, and there is nothing really that matters more in terms of customer satisfaction than delivery times and delivery accuracy versus promise. So that is the major focus of ours. And the picture between the units, as I did mention initially, is a bit diverse. We have some units that have a fantastically high and really industry-leading NPSs, including where we include our installation services. We typically have extremely high NPSs. We also have very high MPSs where we deliver ourselves on the home furnishing side. And then we have some areas where further investments and improvements are necessary. And it's a really key focus of ours.

But in terms of your cost structure, do you feel that Q3 was a bit unsustainable in terms of that you need to do more investment in customer support or other measures to bring this forward? customer satisfaction number up going forward, or is this a level that you think is sustainable from that aspect?

There is an element of under-resourcing also in Q3. We did mention that in Q2, and we also reiterated that in the report for the third quarter. So had we known that demand would still be at these elevated levels through Q3, we would have scaled up even quicker and But we are scaling up, and yes, there is an element of under-resourcing in SG&A and Q3. Okay.

And I'm curious about return levels. You're right here at single digits. I believe you were more specific at the time of the IPO. I can't remember the number, if it was 1%. Has this number gone up materially, underlying, or is this driven by category expansion and mix, rather? And could you be more specific than single digits in terms of returns? That would be helpful for modeling. Thanks.

Yeah, so we actually say low single digits. And we usually say that it's significantly below 5% for the mix of the total business. We have slightly higher return rates within home furnishing and really, really low return rates within DIY. But they're below 5% also in home furnishing.

Okay, last one for me, and then maybe I'll get back in the queue. But your balance sheet, I guess you're going to have a lot of questions on this going forward. I mean, we've seen a few companies now that come from private ownership with quite high gearing ambitions, which are then gradually dialed down following some years of public ownership. And how do you feel about this gearing target? You've had the 1.5 to 2.5. Is that something that you feel? really feel it's set in stone or do you feel that a lower depth structure would perhaps be more suitable for you going forward and and if not is there do you see a reasonably plausible scenario now going forward where you actually catch up with m a to that extent that your performer gearing following acquisitions would be towards the midpoint of your gearing target

sure so we as you know we have maintained our midterm financial targets for now and as we come closer to reaching some of them like the 10 billion sales mark of course the point at which we will be updating those targets is approaching but we're not quite there yet and We really want to be within touching distance of the 10 billion sales level before we update the financial targets. And then we'll update, we'll be revising all of them. I'm not saying that we will be changing all of them. And to be more specific on the net debt to EBITDA targets, we did mention in Q2 that we were a bit disappointed with the pipeline on the M&A side. So that was one of the few negative effects that we experienced in the wake of the pandemic. And we have seen it pick up quite significantly now. And our ambition definitely is to continue quite aggressively utilizing the M&A tool as part of our overall strategy toolkit. We have the experience and we've proven over and over again that it's an accelerant of our trajectory and our strategy execution. So our intention and ambition is to continue doing M&A. We've seen somewhat of a lull recently, but we hope to be back up at our usual pace before too long. And secondly, as you know, Gustav, we also have contingent liabilities sitting on our balance sheet, which aren't included in the net-debt metric, which will, however, result in payments over the years 2021 through 2023 and so that's uh that's i think addressing at least partially your question all right great thanks adam and i'll let someone else ask more questions thanks thank you Catch that. Were there any additional questions, operator? Yes.

Yes. Apologies. There is one more question. It comes from Nicholas Eggman from Carnegie. Please go ahead with your question.

Thank you. Yes. Hi. First, a question on kind of the sales growth during the quarter. And also you talk about strong Q3 and then continued good current trading. I'm just curious if there's any material difference between the different months, if you compare July, August, September and October, if there's any meaningful difference between those four months, please. That's my first question.

We were a bit surprised in the first two weeks of August where we saw a relatively rapid deceleration, actually. But if you recall, Niklas, those were the two sort of peak summer weeks. I think they were probably the last vacation weeks for many people. And it was also unusually warm and the sun was shining, et cetera. So we did see a deceleration there, but very rapidly thereafter, growth came back up again. And so other than that sort of deceleration spell, I would say, no, we haven't seen any real material differences And we're not that far into the fourth quarter. We've got two thirds to go. But again, it's sort of more or less in line with what we've seen in the third quarter.

excellent thank you and and secondly when i compare your slides 9 and 11 i'm just curious because you you talk about presence in 19 markets but when i look at the map on on slide 11 which you've shown in the past it shows 13 markets so i'm just curious about these other six markets are there any any new markets here that you would care to share with us where you have recently expanded

Thank you, Niklas. That's a great question, and we should have clarified that. The fact is that we are actually present in a number of mainland markets to a very small extent, I should stress, through some of the recent acquisitions, most notably the acquisition of LSB Lagen that we did concluded in late in December 2019. And LSB Lagen has a presence in the DACH markets as well as in the UK, which is not really large from the total group perspective, but it's somewhat material for LSB-Lagen. And I think it's an interesting position that has been built up, which substantiates as we stress that when it comes to our private label assortment, We do see opportunities, selectively, organically, to take those private label ranges into additional geographies. We've actively been doing that for a while, in taking our private label offering, Pan Nordic, as a first step. We sort of look at the blueprint from LS-Bolagen and are inspired by what we can do following that strategy. and doing things in a similar vein so that's that's where we have the 19 markets from okay but there's no there's been no deliberate move into a new market with your broader assortment during the quarter or or year today no and no will there be other than again the pan-nordic approach which is which is very much ingrained in what we do now and we've mentioned before when it comes to pan-Nordic expansion, but Bathlife, which is our single largest own brand, and we've really successfully expanded into all the Nordic geographies out of its Sweden base, and it's growing really rapidly in those other Nordic geographies. But selectively taking our own brands, like Bathlife, for instance, into additional geographies, is a very feasible proposition, rather than taking a broad swath of the DIY portfolio into Germany, for instance.

Okay, excellent. Also, I want to come back to the targets before. I realize that you want to make a firm grip and update all targets at the same time, but I'm still curious. Speaking to a 10 billion sales target and speaking to a 7% margin target, even though you're actually above that 7% margin target on a rolling 12-month basis, is there any reason for being conservative here? I mean, are you in any way worried that this exceptional year here could partly reverse next year, or are you mainly just... you know, deliberately taking your time here to actually decide on what the new target is going to be. So kind of wondering if you're seeing this as a real step change in consumption or if you're a bit worried about the reversal post the pandemic.

So many, many angles there and just taking a second to consider where I should start addressing your questions. First, taking the targets, you know that we set those in conjunction with the IPO. And I would say that it's fair to say, and I understand the question from that perspective, that we're quite close to reaching the combination of them. We're, in fact, favorable both when it comes to the net debt and the EBIT margin targets today, but we're not quite yet at the at the sales level that we set, although I think we will reach it sort of before the five-year horizon that it was set against. And when it comes to the current trading, there are several aspects to our great results. One is just the growth and some scale effects that go hand in hand with the growth. But the other aspect of that growth has been that there, we've also mentioned this, but there have been actually even select shortages, product shortages in the market in the Nordics, but I understand this to be a global phenomenon, which has led to our pricing power being unusually strong. So there is definitely an element of fewer campaigns than usual in the margin that we did achieve. And as we've also disclosed and Jesper commented on, There's also a favorable currency effect on the margin and on the EBIT line, although it's negative two percentage points on the sales line. It's actually positive when it comes to the margin. So there are some elements in this fantastic margin that we delivered that are here to stay. And then there are some elements that are more questionable as to um uh you know the the darts of uh sales campaigns whether we'll be able to to see that again in the coming periods that remains to be seen when it comes to the growth and looking into the future as you know we we really don't guide the market on future deliveries but i think it's fair to say that the total nordic markets for diy So including the large offline share, it will not go in 2021, is our expectation. It is even likely to contract against this exceptional year of 2020. But of course, the online penetration, and we do expect, will continue to increase. And it will be the combination of the shrinkage of the total market and the speed at which the online penetration continues to increase that will dictate how the online share, which is of course our market, how that will develop next year.

Thanks, that's a very clear answer. And I'm also curious about an update on your private label share of sales. Do you have an updated number there? I think you reached about 50% earlier this year. Where are you today and how is that progressing?

All right, so back to mixed effects. This is a different angle on mixed effects. We're at around 50%. But as you know, Niklas, we're at roughly 90% in home furnishings. And we're at sort of 20% type level within a DIY. And we've said that within home furnishing, we're not actually striving to go above 90%. We're quite happy with that level. And we're even prepared to go down some marginal percentage points as we go into some potential new categories for us like interior decoration and kitchenware, etc. But anyway, on the DIY side, which is really where we're focusing our efforts to grow the share of private label, We still see room for growth, and we have expanded the share of net sales from private label also in the third quarter within DIY. But the mixed effect with DIY growing faster than home furnishing means that we're sort of still at around 20% for the group as a whole. But it really is the DIY segment that we're targeting for an increase, and there we continue gradually moving upwards.

okay excellent thank you i think i'll pause there and see if anyone else has questions otherwise i might come back with more thank you very much thank you our next question comes from frederick from avg please go ahead with your question thank you operator hi adam and jasper uh congrats on the strong results a few

questions from me as well most of them already been asked but picking up on one thing we saw a big global player entering the Swedish market yesterday I'm curious has your sort of discussions with suppliers changed in any way on the back of that or is it business as usual no there hasn't been a big change in our discussions or relationships with suppliers of course it's it's a it's a big

event to see Amazon.se being launched after so many years of speculation. And just commenting a little broader on that launch, from what we've seen so far, the offering is what we expected it to be, even if the launch itself was caught with a few, to us, unexpected glitches like the poor and sometimes inadvertently funny machine translations of product descriptions. But of course, these are teething problems, and Amazon has entered and they're here to stay. But at the same time, looking at evidence from other countries, Amazon has not consistently been able to create the sort of dominant position that it has in its own market and select other markets. Like Germany is also a real Amazon stronghold, as you know. But in other markets where they've entered later into the game, they haven't necessarily been able to create that really dominant position. And also, there absolutely is a correlation between Amazon's presence in the country or region and its ability to deliver its prime services, which, as you know, is not part of the offering initially in Sweden. So nothing really unexpected as a result of the launch. On the contrary, fully expected. And as we've said before, of course, we have the greatest respect for Amazon and we'll be watching their developments really, really closely. But we do maintain that in our domain, like this specialist, complex, bulky, inspirational. We see also that specialists have been able to to hold their position in an international perspective. Even in Amazon's whole market, Wayfair actually surpassed Amazon in 2019 within the furnishing category. So again, no change in regards to your immediate question and nothing unexpected also in a broader perspective.

Excellent. Thanks, Adam. And one more. Just coming back to those weeks you mentioned in August where you saw a deceleration of sales growth. Would you mind just giving us a feeling for what kind of level you reached in those two weeks? Did you still grow above the 15% target or was it declining even below that?

It was sort of hovering around there. But again, it was two weeks and in season, the weather actually does play a role in either sometimes putting forward business or sometimes deferring it. And I think that was exactly what happened as it was timed also with really the final, final vacation weeks for many people in this unusual year. But it was sort of hovering around the level that we have communicated as our long-term expectation over the business cycle.

That sounds reassuring. Thank you. That's all my questions. Thank you, Frederik.

Just as a reminder, if you wish to ask an audio question, you may do so by pressing 01 on your telephone keypad. Once again, it's 01 on your telephone keypad if you wish to ask an audio question. Our next question comes from Gustav Heggis from SVB. Please go ahead.

Thank you. Appreciate the two answers. smaller follow-ups firstly I didn't notice that you stated the pro forma organic growth for respective segments maybe I missed it but but could you please fill it in for us to be helpful so actually we did not I'm sure yes perhaps the numbers available there I actually don't have the numbers in front of me but we will get back to you okay that's fine thank you and I

Just to comment briefly, they were very, very similar to the organic levels for both segments. The bigger difference in previous quarters was due to the fact that some of our really fast-growing units were still counting as inorganic and they've fallen into now being organic since we've had them

consolidated for over 12 months so no material difference between organic and persona okay that's helpful thanks and as you two were speaking i actually found them so we have on a group level we have the 34.3 percent in the due to self segment it was 38 percent and in the home function segment it was 28.4 percent okay thank you appreciate that

And then I'm curious about, November is usually a big month for you and other online retailers with Black Friday coming up. And I'm thinking firstly in terms of how you feel about your ability to supply demand in November. Your inventory levels were up I think 20% in Q3. Do you feel well stocked into this high season? And secondly, campaign pressure, you referenced that they're down year over year now in Q3. Do you feel that you have the potential to have a much more profitable Black Friday event compared to previous years with this better campaigning momentum in the market? Thanks.

Black Friday is a scary event for retailers because it's such a short period of time and so much is expected to happen. And one sort of never knows exactly how bad competitors are. We had a good Black Friday last year, a black week really, because it's really a full week now. And we're prepared to our teeth now for this time around again. I don't expect that there will be sort of the similar effects from Q3 with fewer campaigns will be really in play now. It was many of the shortages that sort of helped the price picture in Q2, Q3 was for seasonal items. So this is a different season and it's of course a different product mix as a result. And really very difficult to sort of meaningfully forecast with a crystal ball how this will play out. But I don't think it will be sort of materially different in terms of campaign pressures compared to last year.

Great, thanks.

Thank you.

Thank you. There appears to be no further questions, so I'll hand back to the speakers for any other remarks.

Thank you, everyone, and looking forward to speaking to you all again before too long. Thank you.