Slide 1: Today's Storefront - Q2/2016
Verkkokauppa.com Oyj Q2/2016, 5.8.2016, Samuli Seppälä, CEO TODAY’S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG. Questions during or after the presentation - investors@verkkokauppa.com
Slide 2: Sales stalled by slow wholesale business, profit impacted by tough price competition
Verkkokauppa.com Q2/2016 Sales stalled by slow wholesale business, profit impacted by tough price competition Revenue €80m (€80m) and EBITDA €1.3m (€1.7m)
Slide 3: Verkkokauppa.com concept
Verkkokauppa.com concept FIRST LOWER PRICES CUSTOMER SITE “Probably always cheaper” JOURNEY WIDER PRIVATE - MODULAR BEST 24 H SELECTION IT AND ERP SYSTEM AVAILABILITY GROWTH TRANSPARENT OPERATIONAL FOCUSED AND TRUSTED EFFIENCY ”We aim for the lowest prices utilizing the lowest fixed costs”
Slide 4: 2015 revenue €344m, growth focused
Verkkokauppa.com - growth focused 2015 revenue €344m 2015 EBITDA €12m* 31 Dec 15 cash €31m 31 Dec 15 debt 140 mEUR 154 mEUR 173 mEUR 192 mEUR 225 mEUR 238 mEUR 276 mEUR 344 mEUR €0 2015 dividend 1992 .... 2008 2009 2010 2011 2012 2013 2014 2015 €0.15 (2.1%) *) Comparable EBITDA
Slide 5: Verkkokauppa.com customer journey
Verkkokauppa.com - customer journey ”We provide ”We aim for the Finland’s best and lowest prices utilizing ”... while retail is most exciting the lowest fixed going online in customer journey” costs” Finland” Trusted & Product Service & known sales “Cheering!” warranty Looking for Add-on information
Slide 6: Q2/2016 Income Statement
Verkkokauppa.com Q2/2016 Income Statement Q2/2016 Q2/2015 Change% Revenue, € million 80.1 80.0 0% Gross profit 12.3 11.4 +8% Gross margin 15.3% 14.3% Personnel expenses 6.3 5.6 +13% Other opex 4.7 4.1 +14% EBITDA 1.3 1.7 -25% EBITDA margin 1.6% 2.2% Depreciation and amortiz. 0.3 0.3 +5% EBIT 1.0 1.5
Slide 7: H1/2016 Income Statement
Verkkokauppa.com H1/2016 Income Statement* H1/2016 H1/2015 Change% Revenue, € million 163.6 152.9 +7% Gross profit 25.3 23.2 +9% Gross margin 15.5% 15.2% Personnel expenses 12.4 11.0 +12% Other opex 9.0 8.3 +9% EBITDA 4.0 3.9 +3% EBITDA margin 2.4% 2.5% Depreciation and amortiz. 0.6 0.6 10% EBIT 3.4
Slide 8: Q2/2016 Balance Sheet
Verkkokauppa.com Q2/2016 Balance Sheet • Inventory 41.0 (35.0) million euros on 30 June 2016, change +17%. • Cash flow from operat. activities 1-6/2016 was -2.9 (-8.1) million euros. • Capex 1-6/2016 were 0.5 (0.6) million euros . • Cash 20.5 (19.8) million euros on 30 June 2016. • Interest bearing
Slide 9: Q2/2016 sales development
Verkkokauppa.com Q2/2016 Revenue Q2 +0% sales development • Verkkokauppa.com’s trusted concept • Increasing price competition • Retail continues going online • Bolder, growth-oriented pricing 60.6 68.0 86.6 72.9 80.0 83.2 107.6 83.5 80.1 • Easy and convenient experience mEUR mEUR mEUR mEUR mEUR mEUR
Slide 10: Web visits last 28 days
”Power.fi had no impact on Web visits last 28 days Verkkokauppa.com’s web visits” Gigantti.fi Anttila.com Power.fi Expert.fi
Slide 11: Verkkokauppa.com's gross margin and fixed costs
Verkkokauppa.com’s gross Gross margin % margin and fixed costs Fixed costs % of sales 36.9% 30 EBITDA 32.7% 30.0% 3.1% ”We aim for the 25 27.3% lowest prices utilizing the lowest fixed 20 costs” 20.9% 20.5% 19.2% 19.7% 15 18.0% EBITDA 1.6% 17.0% 15.3% 10 13.7% 5 0% Retail in Finland Verk.com Qliro G
Slide 12: Verkkokauppa.com's gross margin and fixed costs
Verkkokauppa.com’s gross Gross margin % margin and fixed costs Fixed costs % of sales 15 EBITDA EBITDA EBITDA EBITDA 16.1% 2.9% EBITDA 15.4% 3.1% 14.6% 2.8% 15.2% 3.4% 2.2% 14.3% 10 12.4% 12.1% 11.8% 11.8% 13.2% 5 EBITDA 30.0% 3.1% 0% 27.3% Verk.com Verk.com Verk.com Verk.com Verk.com 2014 2014/Q3 2
Slide 13: Verkkokauppa.com's Category Strategy
Verkkokauppa.com’s Category Strategy Verkkokauppa.com has continuously expanded into new categories • Track record of appr. one% market share gain per category per year. • Target to be Top-3 Finland’s e-tailer in each category in Finland. • Always probably cheaper price in each category. • Buying co
Slide 14: Industry average category margins
Industry average category margins Fixed costs % of sales Margin avg. Gross margin % • Mobile phones <5% 30 EBITDA • Computers or Tablets 10-15% 25 30.0% 3.1% ”Multiple • Televisions 20% 27.3% categoriews give us protection against • Domestic Appliances 25% 20 competition” • Musical Instruments 25% 1
Slide 15: Forrester's or GfK's category forecasts
*) B2C/B2B-split **) Management estimate Forrester’s or GfK’s category forecasts Margin avg. Market-size (2014/15) Online% 2015 • Mobile phones <5% €852m 32.5% • Computers or Tablets 10-15% €585m (271+314*) 54.8% • Televisions 20% €188m 32.5% • Domestic Appliances 25% €438m 14.4% • Musical Instrumen
Slide 16: 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 17: Largest owners on 31 Jul 2016
Largest owners on 31 Jul 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 18: Share development last 6 months
Share development last 6 months (2 Aug 2016)
Slide 19: 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% 29.1% ... we aim for lower 3.7% 29.1% 3.5% 30.0% 25 27.3% 20 25.3% 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 20: Q&A and upcoming events
”We aim for the Q&A lowest prices utilizing the lowest fixed Upcoming events: costs” • Q3/2016, Friday 21 October 2016 Quick links: • Investors English Summary - www.verkinvest.com • Company Releases mailing list in English - www.joinverk.com • Company Investor Webcasts - www.verklive.com Contacts:
Slide 21: Product highlight - Fuj:tech Power Banks
Product highlight - Fuj:tech Power Banks
Slide 22: Thank you! Today's Storefront
THANK YOU! TODAY’S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG.