Slide 1: Q1, 2024 Earnings Call
Q1, 2024 Earnings Call April 25, 2024
Slide 2: Welcome to CDON's Q1 earnings call
Welcome to CDON’s Q1 earnings call “Addressing “Lower GMV, but short-term stable EBITDA challenges with a during a turbulent steady focus on our period” long-term objective” Fredrik Norberg Carl Andersson CEO CFO
Slide 3: Executive summary
Executive summary ● We faced three distinct challenges, which presented some short-term difficulties: 1. Google algorithm changes: loss of important organic traffic due to big changes in Google search algorithm 2. Closing of the Malmö office: consuming team and management focus 3. Platform migration
Slide 4: Challenge 1: Google search algorithm changes
Challenge 1: Google search algorithm changes Google have lately made several core updates to it’s search algorithm, affecting established price comparison sites and marketplaces negatively Source: https://www.sistrix.com/visibility-index/calculation
Slide 5: Nordic's largest price comparison site confirms the negative impact
Challenge 1: Google search algorithm changes Nordic’s largest price comparison site confirms the negative impact [English translation] The Reasons The stagnation in Prisjakt’s growth during the fall coincided with Google making changes to the logic behind searches and search results. The consequence
Slide 6: Amazon is also highly affected, yet not in Sweden
Challenge 1: Google search algorithm changes Amazon is also highly affected, yet not in Sweden, probably due to the recency of the Amazon.se launch Source: https://www.sistrix.com/visibility-index/calculation
Slide 7: Technical adjustments implemented; signs of low ebb
Challenge 1: Google search algorithm changes However, we have implemented several technical adjustments, and we see some signs that we are at the low ebb Source: https://www.sistrix.com/visibility-index/calculation
Slide 8: Challenge 2: Closing of the Malmö office
Challenge 2: Closing of the Malmö office The closing of the Malmö office has temporarily diverted employee and management focus, creating some inefficiencies in Q1 ● Announced Feb 13th ● The majority of handovers are completed ● Good talent pool for the 25 recruitments to Stockholm office ● No major
Slide 9: Challenge 3: Platform migration
Challenge 3: Platform migration All work streams are making sound progress, and we remain confident in realizing the migration before Q4 ● September deadline still intact
Slide 10: Quarterly EBITDA 2021-2024
Lower volumes in a seasonally weak quarter, with stable EBITDA during restructuring. However, the first negative quarter for a year. Quarterly EBITDA 2021-2024 Q4 2022 is adjusted EBITDA, reported was -48.2 mSEK -2.2 mSEK
Slide 11: Future outlook
Future outlook We still see a bright future, and to reverse the GMV trend, we continue to believe in the core elements of the marketplace model ● Massively increase supply ● Greatly improve customer satisfaction Supply growth is on a halt to fix some technical bottlenecks, while the customer satisfa
Slide 12: Greatly improved customer satisfaction
Greatly improved customer satisfaction Successful execution of our strategic focus on improving customer Customer review score for the CDON-segment happiness for CDON Continued momentum from improvement in customer experience sees increase from 3.8 to 4.3 in customer review score for Q1´24 compared
Slide 13: Financial performance
Financial performance GROUP
Slide 14: Profit and Loss Highlights - As reported
Profit and Loss Highlights - As reported1 Despite lower volumes in a (2023-2024), MSEK seasonally weak quarter EBITDA remain stable 2024 2023 2023 CDON Group - Post Acq Jan-Mar Jan-Mar ∆ Jan-Dec during restructuring Total gross merchandise value (GMV) 397.2 408.5 -3% 2,017.7 Comments Net sales 95.8
Slide 15: Gross Merchandise Value by segment
Gross Merchandise Value, by segment (2022-2024), MSEK Mixed results in Q1 Comments ● Tough Q1 for CDON, -27% vs. ‘23, with particularly weak performance in Home & Garden segment ● Less negative development in Sport & Outdoor and Health & Beauty highlighting the importance of diversification ● Fyndiq
Slide 16: Gross Profit by segment
Gross Profit, by segment Stronger gross (2022-2024), MSEK margins in Q1 Comments ● The CDON segment maintaining high gross profit margin at 63% (57%), mainly attributed to lower 1P share of business. The margin is also positively impacted by a retroactive minimum order fee (2 p.p) ● The Fyndiq segme
Slide 17: Take rate by segment
Take rate, by segment Maintained, or (2022-2024), MSEK, % of GMV expanded, take rate across segments Comments ● The CDON segment has experienced a steady take rate in the quarter following several revisions in 2023 ● Fyndiq’s take rate continuing its increasing trend, impacted by some seasonality fr
Slide 18: Gross Profit After Marketing by segment
Gross Profit After Marketing, by segment GPAM as % of GMV (2022-2024), MSEK still strong Comments ● GPAM declined 16% for the CDON segment in Q1 stemming from headwinds and GMV decreasing 27% ● GPAM as a % of GMV increased to 8.7% from 7.6% last year ● Fyndiq grew GPAM by 15%, despite a 3% decline i
Slide 19: Marketing cost as % of GMV by segment
Marketing cost as % of GMV, by segment Some headwinds with (2022-2024), MSEK traffic acquisition but Marketing costs stills stable Comments ● Marketing costs for CDON on a stable level despite some headwinds in POAS ● Fyndiq’s higher average marketing cost as % of GMV is consistent with the higher t
Slide 20: EBITDA by segment
EBITDA, Segment Negative EBITDA (2022-2024), MSEK attributed to changes in Google algorithm and Malmö office closure Comments ● Negative EBITDA in the quarter disappointing but ongoing initiatives necessary to put the CDON Group in the best position going forward ● We remain positive about future ou
Slide 21: Adjusted operational expenses, Group
Adjusted Operational expenses, Group Continued (2022-2024)1, MSEK advancements in reducing our cost base Comments ● Costs going in the right direction and down sequentially despite additional costs from -3% office closure and migration work ongoing ● Limited additional costs from office closure, in
Slide 22: Operating cash flow before changes in working capital, Group
Operating Cash Flow before changes in working capital, Cash flow going in the Group right direction in (2022-2024), MSEK seasonally weak quarter Comments ● Cash flow negative in seasonally weak quarter, but improved compared to same period last year ● Negative impact from aforementioned operational
Slide 23: Summary
Summary ● We faced three distinct challenges, which presented some short-term difficulties: 1. Google algorithm changes 2. Closing of the Malmö office 3. Platform migration ● We have the first negative EBITDA quarter ● But we still believe in our main strategies to deliver a mid- to long term effect
Slide 24: Q&A
Q&A
Slide 25: Disclaimer
Disclaimer This CDON Q1 2024 presentation, dated 25 April 2024, hereafter “the presentation”, has been prepared by CDON AB (the “Company” and, together with its subsidiaries, the “Group”). Statements contained in this presentation are only as of the date hereof. This presentation is for information
Slide 26: Group
GROUP