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Verkkokauppa.com - Wide guidance range for EBIT

Verkkokauppa.com Q4 headline financials were known before this morning’s earnings release. Hence the information content of the Q4 report is mostly in the dividend and guidance. Dividend proposal is EUR 0.198 per share, marginally above estimates. Guidance implies 5-15% revenue growth for 2019E. EBIT in 2019E is to be between EUR 11-17m (2018A with IFRS: EUR 13.3m) – this is a wide range and leaves room for weakening. It is not specified whether guidance includes estimated impact of IFRS 16, but considering the upper range it looks to be included. Guidance should not surprise estimates, in our view.
  • Dividend was EUR 0.198 vs. EUR 0.19 Evli and cons.
  • Guidance for 2019E: revenue is expected to be between EUR 500-550m and EBIT between EUR 11-17m (2018A with IFRS: EUR 13.3m). Revenue range implies growth of 5-15% for 2019E.
  • Wholesale deliveries increased y/y, and were partly behind the strong sales growth in Q4 as we expected. However most of growth is attributed to successful Black Friday campaign and Christmas season. The gross margin remained at fairly good level of 14.7% vs. 15.8% last year.
  • Headline financials were known prior to the Q4 report, as figures were pre-announced.
  • Apuraha’s earnings impact specified: company-financed customer financing grew in Q4 and proceeds totaled EUR 0.9m (EUR 0.5m y/y) including both interest income and fee income.
  • Financial targets were updated: annual revenue growth 10-20% (intact), growing EBIT and EBIT margin between 2.5-4.5%, and growing dividend. Previously co. targeted for adj. EBITDA margin between 3-5%.

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