Slide 1: Verkkokauppa.com Q4 2018
Verkkokauppa.com Q4 2018 15.2.2019, Panu Porkka, CEO TODAY´S STOREFRONT RETAIL IS GOING ONLINE. COME ALONG. NASDAQ FIRST NO RTH Questions during or after the presentation - investors@verkkokauppa.com
Slide 2: Agenda
Agenda • Q4/2018 report • 2018 summary • 2019 guidance and outlook • Market development and trends • Key takeaways • Q&A
Slide 3: Verkkokauppa.com Q4 2018 - IFRS
Verkkokauppa.com Q4 2018 - IFRS Q4 revenue €156m (+22%) Operating profit €5.9m (+2.8%) Strong market share gains in a weak market (+0,7%), sales growth up to 60% in several categories** 2018 dividend €0.198 (2017 €0.182) *) Comparable EBITDA **) Source: GfK
Slide 4: Verkkokauppa.com Q4 2018 Income Statement - IFRS
Verkkokauppa.com Q4 2018 Income Statement - IFRS Q4 2018 Q4 2017 ch % Revenue, € million 155.9 127.4 +22% Gross profit 22.9 20.1 +14% Gross Margin 14.7% 15.8% Personnel expenses -8.4 -7.6 +11% Other opex -7.6 -5.5 +37% Operating profit 5.9 5.8 +3% Operating margin 2.8% 4.5% Net profit 4.4 4.5 -1% “V
Slide 5: Verkkokauppa.com Q4 2018 sales drivers
Verkkokauppa.com Q4 2018 sales drivers • Preparations for Q4 season sales started during spring 2018 IFRS • Renewed marketing mix incl. nationwide TV- advertising • Aggressive pricing to match competition • Record sales during Singles’ Day, Black Friday and Cyber Monday • Raisio megastore opened Mar
Slide 6: Verkkokauppa.com 31/12/2018 Balance Sheet - IFRS
Verkkokauppa.com 31/12/2018 Balance Sheet - IFRS • Inventory 65.8 (47.0) million euros on 31/12/2018, change +40% • Cash flow from operating activities +8.9 (+23.2) million euros • Investments 1-12/2018 was 1.4 (1.5) millions euros • Equity ratio 23.0% (25.1%) • Cash 46.7 (51.9) million euros, no in
Slide 7: Highlights in Q4 2018
Highlights in Q4 2018 • Digimessut –store event had record attendance in October in Jätkäsaari • Strong presence on Singles’ Day • Black Friday was the most massive campaign in the history of Verkkokauppa.com • All previous sales and visitor records were broken during the Black Friday week
Slide 8: Highlights in Q4 2018
Highlights in Q4 2018 • Strong marketing presence nationally on TV, Radio, Leaflet, OOH and different online medias • Continuing media mix optimization in accordance with company strategy
Slide 9: Verkkokauppa.com 1-12/2018 - IFRS
Verkkokauppa.com 1-12/2018 - IFRS 1-12/2018 1-12/2017 Ch % Revenue, € million 477.8 431.9 +11% Gross profit 72.0 62.5 +15% Gross Margin 15.1% 14.5% Personnel expenses -30.3 -26.1 +16% Other opex -23.7 -18.4 +29% Operating profit 13.3 13.5 -1% Operating margin 2.8% 3.1% Net profit 9.3 9.4 -1% ”Strong
Slide 10: Verkkokauppa.com´s gross margin and fixed costs - IFRS
Verkkokauppa.com´s gross margin and fixed costs - IFRS 20% 15% 2.7% 4.5% 3.0% 3.1% 1.9% 10% 14.2% 14.6% 15.8% 11.9% 11.3% 14.3% 11.2% 13.0% 11.1% 11.4% 5% 0% Q1 2017 (sales +20 %) Q2 2017 (sales +24 %) Q3 2017 (sales +14 %) Q4 2017 (sales +10 %) 2017 (sales +16 %) Gross margin % Fixed costs % Operat
Slide 11: Verkkokauppa.com´s business model with lower fixed costs
Verkkokauppa.com´s business model with lower fixed costs 35% 30% 30.3% 25% 27.5% 25.9% 25.0% 20% 20.9% 20.6% 20.6% 18.9% 15% 14.7% 15.1% 10% 11.9% 12.3% 5% 0% Retail in Finland (w/o cars) Verk.com Q4 2018 Verk.com 2018 Gigantti 2017/2018 Power Finland 2017 Amazon EU SARL 2016 2016 (total €37b) (sale
Slide 12: Verkkokauppa.com 2019 guidance - IFRS
Verkkokauppa.com 2019 guidance - IFRS 2019 guidance revenue between €500m - €550m (2018 €478m) and operating profit €11 - €17m (2018 €13.3 m). Medium-term targets sales growth between 10-20% per year, growing operating profit and operating margin of 2.5-4.5%. Policy of paying out growing, quarterly
Slide 13: IFRS impacts
IFRS impacts FAS IFRS Change KEY RATIOS 1-12 2018 1-12 2018 Gross profit, EUR thousand 70 828 72 020 1 192 Gross profit % 14,9 % 15,1 % EBITDA, EUR thousand 12 590 18 414 5 824 EBITDA % 2,6 % 3,9 % Depreciation -1 265 -5 090 -3 825 Finance costs -80 -1 670 -1 591 Operating profit, EUR thousand 11 32
Slide 14: Outlook for 2019
Outlook for 2019 • CE market expected to remain tough and competitive (10-12/2018 +0.7% **) • Outlook on Finnish economy (GDP +1.9% 2019 *) • New categories will be launched during spring • Increasing market shares in existing categories • Start of brand marketing campaigns, updated media mix and ad
Slide 15: Verkkokauppa.com´s targets and category developments
Verkkokauppa.com´s targets and category developments Continuous and systematic expansion into new categories that are fully suitable for low-cost online model and efficient logistics • New categories are planned for 2019 • “Probably always cheaper” price in each category • Proven business model to s
Slide 16: Global online share forecast 2015-2021
Global online share forecast 2015-2021* E-commerce share of total global retail sales from 2015 to 2021 20% 18% 17,5 % 2016 Retail e-commerce shares: Finland 10%, 16% 15,5 % UK 17%, USA 14%, Germany 14% 13,7 % 14% (source: CRR) Verkkokauppa.com aims 11,9 % to take large part of 12% retail (~€40b) go
Slide 17: Web visits last 12 months (desktop and mobile)
Web visits last 12 months (desktop and mobile)
Slide 18: Key takeaways
Key takeaways • Revenue growth in Q4 +22%, 2018 +11% • Aggressive market share growth in a competitive market • Raisio megastore contributing in sales growth • Growth in H2 significantly higher than H1 • Main focus is growth also for the future RETAIL IS GOING ONLINE. COME ALONG.
Slide 19: GRILLAA
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Slide 20: Thank you and Q&A
Thank you and Q&A Upcoming events: • Q1/2019, Friday 10 May 2019 • Q2/2019, Friday 9 August 2019 • Q3/2019, Friday 25 October 2019 Links: • Investors site - www.verkinvest.com • Company Releases mailing list - www.joinverk.com • Company Investor Webcasts - www.verklive.com Contacts: • Panu Porkka, C
Slide 21: This document is not an invitation to subscribe for or purchase any securities or
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