Slide 1: Today's Storefront
Verkkokauppa.com Oyj Q3/2016, 21.10.2016, Samuli Seppälä, CEO TODAY’S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG. Questions during or after the presentation - investors@verkkokauppa.com
Slide 2: Good growth, profitability and market share gains in tough retail market
Verkkokauppa.com Q3/2016 Good growth, profitability and market share gains in tough retail market Revenue +11%, €92.6m (€83.2m) EBITDA +32%, €4.2m (€3.2m) EPS €0.07 (€0.05)
Slide 3: Verkkokauppa.com Q3/2016 Income Statement
Verkkokauppa.com Q3/2016 Income Statement Q3/2016 Q3/2015 Change% Revenue, € million 92.6 83.2 +11% Gross profit 14.5 12.3 +17% Gross margin 15.6% 14.8% Personnel expenses 5.3 5.2 +3% Other opex 4.9 3.9 +25% EBITDA 4.2 3.2 +32% EBITDA margin 4.6% 3.9% Depreciation and amortiz. 0.3 0.3 +1% EBIT 3.9 2
Slide 4: Verkkokauppa.com Q3/2016 Balance Sheet
Verkkokauppa.com Q3/2016 Balance Sheet • Inventory 40.3 (36.0) million euros on 30.9.16, change +12%. • Cash flow from operat. activities 1-9/2016 was 6.1 (-4.1) million euros. • Capex 1-9/2016 were 0.7 (1.0) million euros . • Equity ratio 42.6% (45.7%) • Cash 29.4 (23.2) million euros, change +27%.
Slide 5: We are the most transparent
We are the most transparent low cost online retailer .. while being probably always cheaper
Slide 6: Most transparent
Most New in Nov! In-store transparent maps + product locations New in Nov! Price New “Customer’s barometer and in Nov! Zip-code best friend” market price based delivery estimates Best Finnish-language Return product information and and service% most reviews No Sold & received orders commission and u
Slide 7: Lower costs
Finland’s best Lower self-service driven by technology costs Highly efficient Three logistics “Probably high volume always megastores We don’t sell cheaper” products that can’t be Cheaper prices handled highly efficiently; clothing, fresh food, enabled by lowest sub-10e products fixed costs
Slide 8: Retail market in 2021
Retail €40b market in 2021 in Finland Share of online retail over 15% in Finland (now 10%)
Slide 9: Retail market in 2021
Retail €40b market in 2021 in Finland Share of online retail over 15% in Finland (now 10%) Mostly vendor supported Retail in future products will be shown will be super- in stores transparent! Price comparison Department increases stores closed Value of trust increases Only larger consumer elec- tro
Slide 10: Retail market in 2021
E-commerce share of total global retail sales from 2015 to 2020 Global online share 16% forecast 2015-2020 Retail 14.6% 14% market in 2021 13% Share of e-retail sales 12% 11.5% 10% 10% 8.7% Verkkokauppa.com will take large part of 8% 7.4% the future online growth in Finland (€40b) 6% 2015 2016* 2017
Slide 11: Verkkokauppa.com Q3/2016 sales drivers
Verkkokauppa.com Revenue Q3 +11% Q3/2016 sales drivers • Good CE-market development +11%* • Verkkokauppa.com’s trusted concept • Increasing price competition • Retail continues going online 68.0 86.6 72.9 80.0 83.2 107.6 83.5 80.1 92.6 • Easy and convenient experience mEUR mEUR mEUR mEUR mEUR mEUR m
Slide 12: Verkkokauppa.com's gross margin and fixed costs
51.0% 47.5% Verkkokauppa.com’s gross Gross margin % margin and fixed costs Fixed costs % of sales 30 EBITDA 30.2% 3.4% 25 27.5% 26.4% Cheaper prices 20 enabled by lowest 22.5% 22.9% fixed costs 15 18.7% EBITDA 16.8% 15.6% 4.6% 15.8% 10 11.0% 5 0% Retail in Finland Verk.com Qliro Group (SWE), Gigantt
Slide 13: Web visits last 18 months
”The current intense price competition is Web visits last 18 months unlikely to continue as business will probably not be sustainable for the industry overall” gigantti.fi netanttila.com (bankruptcy) power.fi expert.fi
Slide 14: Web visits last 18 months / last 3 months
Web visits last 18 months Web visits last 3 months
Slide 15: New website with new features
New website with new features New New New in Nov! In-store in Nov! Price in Nov! Zip-code maps + product barometer and based delivery locations market price estimates
Slide 16: Singles' Day 11.11.
THE BIGGES\ -™ © “SHOPPINGOW MUNNERS
Slide 17: Apuraha
Apuraha ”The company expects to improve its EBITDA margin in the medium term by increasing share of higher margin categories and private labels in the sales mix and the increa- sing the share of the Apuraha consumer financing services. ”
Slide 18: Medium-term targets and business outlook
Medium-term targets The company retains its existing targets: • The company strives to grow faster than its operating market and targets an annual revenue growth of over 10 per cent in the medium term. • The company’s objective is to improve its EBITDA margin in the medium term when compared to the
Slide 19: Largest owners on 30 Sep 2016
Largest owners on 30 Sep 2016 Shares % 1 Seppälä Sipi Samuli 22 487 496 49.9 2 Keskinäinen Eläkevakuutusyhtiö Ilmarinen 2 612 728 5.798 3 Rite Ventures Finland Ab 2 367 576 5.254 4 Keva 2 138 000 4.744 5 Keskinäinen Työeläkevakuutusyhtiö Varma 2 065 932 4.584 6 Op-Delta -Sijoitusrahasto 1 262 485 2.
Slide 20: Share development last 6 months
Share development last 6 months (19 Oct 2016)
Slide 21: While traditional retail sector is increasing gross margin and fixed costs ...
While traditional retail sector is increasing gross margin and fixed costs ... 30 EBITDA EBITDA EBITDA 3.1% 30.2% 3.4% ... we aim for lower 29.1% 3.5% 30.0% 25 27.3% 27.5% 20 25.7% prices and costs! 15 EBITDA EBITDA EBITDA 15.7% 3.2% 15.4% 3.1% 15.1% 3.6% 10 12.6% 12.4% 11.5% 5 0% Retail in Finland
Slide 22: Q&A and upcoming events
Q&A Upcoming events: • Q4/2016, Friday 10 February 2017 • Q1/2017, Friday 28 April 2017 • Q2/2017, Friday 14 July 2017 • Q3/2017, Friday 20 October 2017 Quick links: • Investors English Summary - www.verkinvest.com • Company Releases mailing list in English - www.joinverk.com • Company Investor Webc
Slide 23: Product highlight - vacuum cleaners!
Product highlight - vacuum cleaners!
Slide 24: Get the big picture... Thank you!
Get the big picture... propably 55” always cheaper* THANK YOU! LG 55LF592V 55” Smart Full HD LED televisio *verk.com/hintapuntari