Verkkokauppa.com Oyj · OMXHEX:VERK
Verkkokauppa.com Oyj — Q4 2020 Earnings Presentation
36 slides from Verkkokauppa.com Oyj's earnings presentation, Feb 12, 2021
Slide 1: Verkkokauppa.com Q4 2020 Pioneer of Ecommerce
Verkkokauppa.com Q4 2020 Pioneer of Ecommerce 12.2.2021 | Panu Porkka Questions during or after the presentation - investors@verkkokauppa.com
Slide 2: Today's Agenda
Today’s Agenda • Key Figures Q4/2020 and FY2020 • Sales and Profitability Development • Business Outlook 2021 • Renewed Strategy • Key Takeaways Q&A 2
Slide 3: Income Statement Q4
Income Statement Q4 EUR million Q4/2020 Q4/2019 Change, % Revenue 176.0 159.9 10.1% • 30th consecutive growth quarter Gross profit 26.7 22.2 20.1% Gross margin, % of revenue 15.1% 13.9% 9.1% • All time high operating profit, Personnel expenses -10.4 -9.1 14.3% increase of Other operating expenses -8
Slide 4: Sales Development in Q4
Sales Development in Q4 180 Revenue, € million 176.0 170 159.9 160 • Sales channel development driven by 155.9 strong consumer web sales 150 • Number of new online users during Q4 grew by +28% 140 • Successful campaigns during Single´s Day, Black 130 127.4 Friday and Cyber Monday • Strong performanc
Slide 5: Profitability Development in Q4
Profitability Development in Q4 • Sales mix having a positive impact on margin, strong consumer sales while Export is declining • Strong sales increase in evolving categories with higher margins • Online outlet function to decrease obsolete stock • New tools and processes and enriched data to improv
Slide 6: Balance Sheet & Cash Flow 31.12.2020
Balance Sheet & Cash Flow 31.12.2020 • Inventory 75.4 (66.7) million euros on • Cash flow from operating activities 1-12/2020 +16.9 (9.7) million euros • Investments 1-12/2020 were 1.4 (1.2) million euros • Cash 43.1 (42.5) million euros • Equity ratio 24.5% (23.4%) • Undrawn revolving credit facili
Slide 7: Verkkokauppa.com 1-12/2020
Verkkokauppa.com 1-12/2020 EUR million 1-12/2020 1-12/2019 Change, % Revenue 553.6 504.1 9.8% • Company reached Gross profit 88.4 73.9 19.7% record revenue and Gross margin, % of revenue 16.0% 14.7% 9.0% profit during 2020 Personnel expenses -35.6 -32.6 9.1% • The Board proposes a total Other operat
Slide 8: Strong Market Position in Changing Retail Landscape
Strong Market Position in Changing Retail Landscape • Best positioned brand in e-commerce in Finland, most visited website • 30 million visits during Q4 (+25%), 87 million during 2020 (+20%) • Consecutive consumer´s choice winner as the best online retailer in Finland 2020* 2020 Finland’s Top Ten –
Slide 9: Excellent Customer Experience
Excellent Customer Experience • Search engine optimization through multiple updated category descriptions and content • AI based chatbot open 24/7 and served 60% of chats in December • SEO work paying off - organic traffic grew +30% • New Customer Data Platform implemented àRecord high customer sati
Slide 10: Fastest Deliveries in Finland
Fastest Deliveries in Finland • Same day & Express deliveries • Same day delivery as an option in great Helsinki area and in Tampere region with lowered price 14.99€ since September • 3h Express deliveries available already since 2014 à+400% growth during Q4 • Strong growth in demand of different de
Slide 11: Superior delivery performance with room to push further
Over the past years we have established superior delivery performance and have room to push further as customer needs evolve >2 day delivery Within next day Same day delivery Store Logistics center Logistics hub & store combination We used to be more reliant on third- Our network covers majority of
Slide 12: Wide Assortment and Best Availability
Wide Assortment and Best Availability • MDA market moving online at a faster pace, supported by good availability and appealing assortment • Largest MDA assortment in Finland, Miele introduced during Q4 • New subcategories, new brands and lots of new products added to the assortment • Among others S
Slide 13: Key Achievements during 2020 – Summary
Key Achievements during 2020 – Summary What we said What we did • Focus on profitability • 4 consecutive record quarters in EBIT • Increase of brand marketing to • Nr1 brand among peer group increase awareness and top-of-mind • Improved product information on web • Improvement of customer site, new
Slide 14: Business Outlook and Guidance 2021
Business Outlook and Guidance 2021
Slide 15: 2021 Guidance
2021 Guidance Revenue Comparable Operating profit €570m - €620m €20m - €26m (2020 €554m) (2020 €20.4 m) New financial targets for strategy period 2021 - 2025: Revenue 1 billion euros EBIT 5% by year 2025 Paying out a quarterly growing dividend 15
Slide 16: Economy Outlook
Economy Outlook Consumer price index and wage and salaryprice Consumer earnings index andforecast index of wage and salary earnings • The economy is expected to recover by the from yoy, change Ministry % of Finance’s Economy Survey 2020 end of 2021 and return to normal will give 6 6 an additional bo
Slide 17: The Road Towards a Billion
THE ROAD TOWARDS A BILLION • COMPANY STRATEGY 2021-2025
Slide 18: Verkkokauppa.com - passionate pioneer of ecommerce
Verkkokauppa.com - passionate pioneer of ecommerce We are an online-born – online is at the core of what we do, and what the company has been built around … Perfecting customer Road towards a Startup Becoming a household brand in ecommerce experience billion 1998 1992 2011 2014 2019 Company founded
Slide 19: Why will our customers continue to shop at Verkkokauppa.com
Our purpose: empower customers to follow their passion Why will our Speed & customers Assortment Experience Flexibility Trust continue to shop first and foremost at Verkkokauppa.com The widest and most Frictionless Delivery experience Most transparent exciting assortment omnichannel fuelled by highe
Slide 20: We continue to be the pioneer in ecommerce and #1 platform in Finland
We continue to be the pioneer in ecommerce and are proud to be the #1 platform in Finland 2020 BEST LARGEST RAPID GROWTH MOST VISITED ECOMMERCE ECOMMERCE1 IN ONLINE WEBSTORE EXPERIENCE €324m ~16% +87M #1 In online revenue Annual growth Annual online Voted as best p.a. in 2015-20 visits customer expe
Slide 21: Strongest ecommerce brand in Finland
We are transparent, interact with our customers, and have established ourselves as the strongest ecommerce brand in Finland 2020 Strongest ecommerce brand in Finland Most product Highest customer reviews satisfaction 25 >400,000 70 customer reviews NPS 19 15 Highest customer Lowest returns on loyalt
Slide 22: Clear competitive advantage in the 2020's ecommerce market
We have built clear competitive advantage in the 2020’s ecommerce market Local competitors Global benchmarks Netherlands Sweden Excellent customer 1 experience and 25 19 15 n/a n/a strong brand (Brand index, 2020) 2 Efficient fulfilment ~70% ~34% Same day not 100% Same day not (0-1 day coverage) thr
Slide 23: The road towards a billion – growth path organic and online driven
The road towards a billion – our growth path is primarily organic and online driven Capitalize on the online shift Leverage our superior platform Capture our full potential in through assortment for current and new business profitability 1 Capitalize upon the acceleration 4 Double the B2B business 8
Slide 24: Capitalizing on the online shift on a road towards a billion
By capitalizing on the online shift and leveraging our superior platform – we are on a road towards a billion Verkkokauppa.com revenue development, 2020-25E, €m ~100 ~1,000 ~100 ~250 FY20 Capitalize on the shift Double the B2B New business FY25 to online with our business (incl. services, exciting a
Slide 25: Core categories will continue accelerated shift to online
Our core categories will continue accelerated shift to online Total addressable market Online addressable market Our categories size, 2020-25e, €bn size, 2020-25e, €bn Our core categories are… Our core categories ~€900m …what we have built the market opportunity business around for the last ~30 year
Slide 26: Expanding into adjacent categories with attractive margins
We have started to expand into adjacent categories with attractive margins and lower online penetration Total addressable market Online addressable market Our categories size, 2020-25e, €bn size, 2020-25e, €bn Our evolving categories are… Our current ~€500m …where we already have started to evolving
Slide 27: Continuously evaluating untapped opportunities
Additionally, we continuously evaluate untapped opportunities Total addressable market Online addressable market Our categories size, 2020-25e, €bn size, 2020-25e, €bn Untapped opportunities are… Untapped ~€800m +2% …where we have a systemized way opportunities 7.1 to identify and test new categorie
Slide 28: Room to again double the business in B2B
There is room for Verkkokauppa.com to again double the business in B2B Total addressable market size Verkkokauppa.com Capture fair share of the market through our unique per B2B segment, 2020, €m Market share, %, 2020 platform that meets today’s B2B customer needs Defined a dedicated B2B team in 201
Slide 29: Move fixed costs below 10% of revenue
Move fixed costs below 10% of revenue through increased scale and AI-driven automated operations Our focus to optimize Fixed costs, % fixed cost base of revenue1 Our first priorities Starting point of fixed costs at 11.5% already below key peers Fixed costs in FY20 11.5% Apply best-in-class logistic
Slide 30: Our well-defined road towards a billion by 2025
Our well-defined road towards a billion by 2025 A We have a strong track record of growth and value creation B C D E We have a strong We grow our EBIT In present business We are passionate platform to capture a through scale, by model our investments about doing sustainable >10% share of the shiftin
Slide 31: Key Priorities 2021
Key Priorities 2021 • Focus on renewed strategy and value streams to achieve long term targets • Monitoring development regarding COVID-19 situation closely to quickly take needed measures • Large network of suppliers and distributors will help secure availability during upcoming spring • Next launc
Slide 32: Key Takeaways
Key Takeaways • Strong performance across all • Strong brand position supporting operations resulting in a record- traffic and perception breaking year • Solid financial position ensuring • COVID-19 impacting consumer growing quarterly dividend and an demand as more and more additional dividend for
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Slide 34: More Information
More Information Contacts Links Upcoming events in 2021 Panu Porkka, CEO Investors site panu.porkka@verkkokauppa.com www.verkinvest.com Q1/2021 on Friday 23 April 2021 Mikko Forsell, CFO Company Releases mailing list mikko.forsell@verkkokauppa.com www.joinverk.com H1/2021 on Friday 16 July 2021 IR C
Slide 35: Disclaimer
This document is not an invitation to subscribe for or purchase any securities or make any investment decisions in respect of the Company or its securities. This document is not for publication or distribution, directly or indirectly, in or into Australia, Canada, the Hong Kong special administrativ
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