Verkkokauppa.com - A victim of poor market
Preliminary figures given, Verkkokauppa.com’s Q3 report included no large surprises. Net sales continued in decline and profitability was hit by lower volumes, weaker sales mix, price competition and elevated cost levels. Guidance intact (revised ahead of Q3 result).
- Group results: net sales declined by 2.3% y/y to EUR 137.8m (135.9/136.5m Evli/cons.). Acquired e-ville.com contributed to Q3 net sales and EBIT by EUR 2.4m and 0.6m respectively. Gross margin was negatively impacted by weaker sales mix and price competition. Adj. EBIT was EUR 2.1m (3.1/2.6m Evli/cons.) as a result of the elevated cost level. EPS amounted to EUR 0.01 (0.05/0.04 Evli/cons.).
- Online sales: represented 58% of total net sales and decreased by 3.5% y/y while brick-and-mortar saw a 7.7% y/y decline.
- Category split: demand was good in some segments of core categories, such as household appliances and home entertainment devices, but in total the category declined by 5.2% y/y. The demand for evolving categories continued as good by growing by 3.1% y/y in a challenging market environment.
- Consumer segment: consumer segment continued lagging and declined by 7.8% y/y. The segment represented 70% of the group net sales.
- B2B segment: growth pace saw a slowdown to 5% y/y with SME clients reducing their activity. The segment represented 21% of the group net sales.
- Export segment: gained new customers from acquired e-ville.com and grew by 35.1% y/y, being 9% of total net sales. Net sales came back to its levels before the disposal of sales to Russia.
- Guidance was lowered ahead of Q3 result: net sales between EUR 530-560m and adj. EBIT between EUR 5-9m. Mid-point implies a revenue decline of 5.1% and an EBIT margin of 1.3%.