Verkkokauppa.com Oyj · OMXHEX:VERK
Verkkokauppa.com Oyj — Q2 2015 Earnings Presentation
25 slides from Verkkokauppa.com Oyj's earnings presentation, Aug 7, 2015
Slide 1: Today's Storefront: Verkkokauppa.com Q2/2015
Verkkokauppa.com Oyj Q2/2015 7.8.2015, Samuli Seppälä, CEO TODAY’S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG. Questions during or after the presentation - investors@verkkokauppa.com
Slide 2: Strong 2nd quarter, revenue grew by +32% in tough retail market
Verkkokauppa.com Q2/2015 Strong 2nd quarter at Verkkokauppa.com, revenue grew by +32% in tough retail market
Slide 3: Retail continues to go online
Retail continues to go online
Slide 4: Retail continues to go online
Retail continues to go online E-commerce is the natural development and evolution of retail business. Why are consumers buying online? ”Average • E-commerce offers consumers lower prices €15 enabled by lower fixed operating costs. savings per €100” • Wider selection, no need to keep everything in st
Slide 5: Verkkokauppa.com concept
Verkkokauppa.com concept LOWER PRICES “Probably always cheaper” WIDER PRIVATE - MODULAR BEST 24 H SELECTION IT AND ERP SYSTEM AVAILABILITY TRANSPARENT AND CUSTOMER CENTRIC ”Verkkokauppa.com’s winning online retail concept drove sales growth also in Q2”
Slide 6: Verkkokauppa.com concept
Verkkokauppa.com concept Price matches slogan Capital efficiency enabled by the leanest LOWER PRICES - regardless of operating model “Probably always cheaper” sales channel WIDER PRIVATE - MODULAR BEST 24 H SELECTION IT AND ERP SYSTEM AVAILABILITY Finland’s best source for Customer lifetime value TR
Slide 7: Verkkokauppa.com Q2/2015 P&L
Verkkokauppa.com Q2/2015 P&L 4-6/2015 4-6/2014 Change% Revenue, € million 80.0 60.6 +32% Gross profit 11.4 9.4 +21% Gross margin 14.3% 15.5% Personnel expenses 5.6 4.5 +26% Depreciation and amortiz. 0.3 0.2 +24% Other opex 4.1 3.8 +8% EBITDA 1.7 1.2 +43% EBITDA margin 2.2% 2.0% Operating profit 1.5
Slide 8: Q2/2015 main sales growth drivers
Verkkokauppa.com Q2/2015 main sales growth drivers Q2 +32% • Verkkokauppa.com’s concept Revenue • Retail going online • Good wholesale trade and B2B sales • Bolder, growth-oriented pricing • Changes in department stores 48.8 mEUR 57.0 mEUR 75.1 mEUR 60.6 mEUR 60.6 mEUR 68.0 mEUR 86.6 mEUR 72.9 mEUR
Slide 9: Q2/2015 fixed costs and margin development
Verkkokauppa.com Q2/2015 fixed costs and margin development • Long-term low prices enabled by low fixed costs is one of the key growth drivers for any e-commerce, including Verkkokauppa.com. • New product categories typically have higher gross margin compared to older categories. Sales by consumer f
Slide 10: Verkkokauppa.com Q2/2015 balance sheet
Verkkokauppa.com Q2/2015 balance sheet • Inventory 34.9 (28.6) million euros on 30.6.2015. • Cash flow 1-6/2015 was -6.8 (19.5) million euros. • Investments 1-6/2015 were 0.6 (0.3) million euros . • Cash 19.8 (26.2) million euros on 30.6.2015. • Interest bearing debt 1.5 (2.4) million euros on 30.6.
Slide 11: Gross margin and fixed costs vs peers
Verkkokauppa.com’s gross 41.9% margin and fixed costs 41.4% 34.6% 34.4% 30 32.6% 31.9% EBITDA 29.1% 25 3.5% Gross margin% 25.7% Fixed costs% of sales 20 15 EBITDA 16.5% 14.3% 2.2% 15.2% 10 12.1% 5 0% Retail in Finland Verk.com Qliro Group (SWE), Amazon (USA) Clas Ohlson (SWE) Tokmanni Oy (w/o cars)
Slide 12: Gross margin and fixed costs
Verkkokauppa.com’s gross 29.1% EBITDA 3.5% Gross margin% margin and fixed costs Fixed costs% of sales 25.7% 15 16.7% EBITDA EBITDA EBITDA 3.9% EBITDA EBITDA 15.5% 2.0% 14.6% 15.2% 15.4% 3.1% 2.8% 3.4% 10 12.9% 13.6% 12.4% 11.8% 11.8% 5 0% Verk.com Verk.com Verk.com Verk.com Verk.com Retail in Finlan
Slide 13: Industry average product margins
Industry average product margins Fixed costs% of sales • Mobile Phone <5% 30 Gross margin% • Computer or Tablet 10-15% 29.1% EBITDA 3.5% 25 • Television 20% 25.7% • Washing Machine 25% 20 • Hammers and Drills 25% 15 • Sporting Equipment / Watch 25% 15.4% EBITDA 3.1% • Protein Bars 30% 10 12.4% • Bab
Slide 14: Largest projects
Largest projects • Own consumer financing services are still being developed and launch is getting closer. First focus has been on internal credit scoring and fraud detection services. Current sales by consumer financing has continued to increase, resulting in more commissions paid to the company. W
Slide 15: Apuraha consumer financing launch is getting closer
”Apuraha” consumer financing launch is getting closer
Slide 16: New category of home, garden & tools
New category of home, garden & tools Gross margin% Fixed costs% of sales 44.2% 41.6% 39.8% 38.8% K-Rauta store keeper, 30 33.3% Suomenoja 31.8% 31.4% EBITDA K-Rauta store keeper, 29.1% 3.5% 25 Suomenoja 25.7% 25.4% 20 15 + EBITDA 15.4% + 3.1% 10 Rautakesko oy 12.4% (wholesale) Rautakesko oy (wholesa
Slide 17: New category of food and drink
Gross margin% New category of food and drink Fixes costs% of sales 22.0% 45%? 44%? (storekeeper) K-Citymarket HOK Elanto 50.3% HOK Elanto (store) 30 33.0% (store) 31.5% 30.4% 11.2% 25 + (storekeeper) + K-Citymarket 20 + 23.0%? + 23.0% 15 17.6% EBITDA 15.8%? Ruokakesko Oy 15.4% 3.1% (wholesale) (whol
Slide 18: EGM on 19.8.2015 and Vitvaruexperten.com
EGM on 19.8.2015 • The majority of the shareholders have proposed Minna Kurunsaari to be elected as a new member of the Board of Directors in Extraordinary General Meeting to be held on August 19, 2015. • The Board of Directors also proposes increasing the number of shares in the company by issuing
Slide 19: 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 20: Largest owners on 30.6.2015
Largest owners on 30.6.2015 Shares % 1 Seppälä Sipi Samuli 3 747 916 49,900 2 Rite Ventures Finland Ab 769 596 10,246 3 Keskinäinen Eläkevakuutusyhtiö Ilmarinen 384 788 5,123 4 Keskinäinen Työeläkevakuutusyhtiö Varma 344 322 4,584 5 Keva 248 000 3,302 6 Op-Delta -Sijoitusrahasto 215 278 2,866 7 Sijo
Slide 21: Share development (5.8.2015)
Share development (5.8.2015)
Slide 22: Why invest in Verkkokauppa.com?
Why invest in Verkkokauppa.com? • Verkkokauppa.com is the best known, most visited and largest online retailer in Finland. • Verkkokauppa.com is profitable and operates with much lower fixed costs compared to other e-tailers and especially traditional retailers - thanks to its strong concept. • The
Slide 23: Q&A, upcoming events and contacts
Q&A Upcoming events: • Q3/2015, Friday 23 October 2015 Quick links: • Investors English Summary - www.verkinvest.com • Company Releases mailing list in English - www.joinverk.com • Company Investor Webcasts - www.verklive.com Contacts: • Samuli Seppälä, CEO, samuli.seppala@verkkokauppa.com • Jussi T
Slide 24: Product highlight - Windows 10
Product highlight - Windows 10
Slide 25: Thank you!
Thank you! TODAY’S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG.