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2016-10-21

INTERIM REPORT for 1 January - 30 September 2016: Good growth, profitability and market share gains in Q3

Verkkokauppa.com Oyj - Interim report (unaudited) 21 October 2016, 8:00 a.m.

1 July - 30 September 2016 in brief

* Revenue 92.6 million euros (7-9/2015: 83.2), growth of 11%
* Gross profit 14.5 million euros (12.3), growth of 17%
* Gross margin 15.6% of revenue (14.8%)
* Operating profit 3.9 million euros (2.9)
* Operating margin 4.2% of revenue (3.5%)
* Net profit 3.1 million euros (2.3)
* Earnings per share 0.07 euros (0.05)

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| KEY RATIOS 7-9/2016 7-9/2015 Change% 1-9/2016 1-9/2015 Change% 1-12/2015 |
| |
| Revenue, € thousands 92,611 83,244 11% 256,180 236,109 9% 343,682 |
| Gross profit, € thousands 14,453 12,310 17% 39,801 35,485 12% 51,783 |
| Gross margin, % of revenue 15.6% 14.8% 15.5% 15.0% 15.1% |
| Comparable EBITDA, € thousands 4,244 3,205 32% 8,237 7,099 16% 12,258 |
| Comparable EBITDA, % 4.6% 3.9% 3.2% 3.0% 3.6% |
| Comparable operating profit, € thousands 3,933 2,897 36% 7,310 6,232 17% 11,087 |
| Comparable operating margin, % of revenue 4.2% 3.5% 2.9% 2.6% 3.2% |
| Net profit, € thousands 3,141 2,338 34% 5,378 1,150 368% 5,354 |
| |
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1 January - 30 September 2016 in brief

* Revenue 256 million euros (1-9/2015: 236), growth of 9%
* Gross profit 39.8 million euros (35.5), growth of 12%
* Gross margin 15.5% of revenue (15.0%)
* Operating profit 6.7 million euros (2.8)
* Comparable operating profit 7.3 million euros (6.2)
* Operating margin 2.6% of revenue (1.2%)
* Comparable operating margin 2.9% of revenue (2.6%)
* Net profit 5.4 million euros (1.2)
* Comparable net profit 5.9 million euros (5.1)
* Earnings per share 0.12 euros (0.03)
* Comparable earnings per share 0.13 euros (0.11)

BUSINESS OUTLOOK

Verkkokauppa.com Oyj's business operations are estimated to develop positively
within a medium term time frame. The management believes that the company
will succeed in further growing its market share in its chosen segments. The
strong balance sheet enables the company to continue expanding its operations
in accordance with its strategy. Nevertheless, the business outlook includes
uncertainties, especially due to macroeconomic developments. The Finnish
Ministry of Finance estimated on 15 September 2016 that the Finnish GDP will
grow by 1.1% during 2016.

FINANCIAL GUIDANCE

In 2016 the company revenue and comparable operating profit are expected to
exceed the level of 2015.

CEO SAMULI SEPPÄLÄ'S REVIEW

Business is back on track with good growth and profitability in Q3, following
a slightly weaker Q2. During the reporting period, Verkkokauppa.com enjoyed
good sales growth and improved its profit and market share, while the overall
retail market in Finland remained tough. The current intense price
competition is unlikely to continue for very long, as it will probably not be
sustainable for the industry overall.

Verkkokauppa.com will continue its efforts to be the most transparent low-cost
online retailer, while living up to its credo of being "probably always
cheaper". The company will launch features to further improve transparency,
such as a price barometer and market price -tools, zip-code-based delivery
estimates, and in-store maps with information on product locations. These
customer empowering features will be launched in October/November along with
a new more mobile friendly website aiming for higher number of visitors and
conversion rate. The company will continue to focus on low operating costs by
providing Finland's best self-service technology and avoiding products with
high handling costs, such as fresh food or apparel and fashion.

The company's new service warehouse in Vantaa is fully operational, ready for
the busiest sales season and major campaigns like Singles' Day, Black Friday,
Tax Returns Week and Boxing Day. The new warehouse will replace the existing
Bunkkeri warehouse by the end of the year and will also allow customer
pickups.

The company will continue to invest in new categories and cost-saving
technologies while retail continues going online. An estimated 1% or 400
million euros of retail sales moves online every year in Finland. The current
estimated level of online sales is 10% or 4 billion euros out of the 40
billion euros retail business. The company's revenue will continue to grow in
2016 and in the medium term, even though the general situation and demand in
the retail business remains weak in Finland.

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| KEY RATIOS AND PERFORMANCE INDICATORS 7-9/2016 7-9/2015 1-9/2016 1-9/2015 1-12/2015 |
| |
| Revenue, € thousands 92,611 83,244 256,180 236,109 343,682 |
| Gross profit, € thousands 14,453 12,310 39,801 35,485 51,783 |
| Gross margin, % of revenue 15.6% 14.8% 15.5% 15.0% 15.1% |
| Comparable gross profit, € thousands 14,453 12,310 39,801 35,485 51,783 |
| Comparable gross margin, % of revenue 15.6% 14.8% 15.5% 15.0% 15.1% |
| EBITDA, € thousands 4,244 3,205 7,637 3,687 8,846 |
| EBITDA, % 4.6% 3.9% 3.0% 1.6% 2.6% |
| Comparable EBITDA, € thousands 4,244 3,205 8,237 7,099 12,258 |
| Comparable EBITDA, % 4.6% 3.9% 3.2% 3.0% 3.6% |
| Operating profit, € thousands 3,933 2,897 6,711 2,821 7,676 |
| Operating margin, % of revenue 4.2% 3.5% 2.6% 1.2% 2.2% |
| Comparable operating profit, € thousands 3,933 2,897 7,310 6,232 11,087 |
| Comparable operating margin, % of revenue 4.2% 3.5% 2.9% 2.6% 3.2% |
| Net profit, € thousands 3,141 2,338 5,378 1,150 5,354 |
| Comparable net profit, € thousands 3,141 2,515 5,858 5,055 8,814 |
| Equity ratio, % 42.6% 45.7% 42.6% 45.7% 45.2% |
| Return on investment, % rolling 12 months 34.4% 16.7% 34.4% 16.7% 20.9% |
| Net gearing, % -85.9% -69.7% -85.9% -69.7% -86.5% |
| Earnings per share (EPS) revised by share split, € 0.07 0.05 0.12 0.03 0.12 |
| Comparable earnings per share (EPS) revised by share split, € 0.07 0.06 0.13 0.11 0.20 |
| Earnings per share (EPS) revised by share split (diluted), € 0.07 0.05 0.12 0.03 0.12 |
| Comparable earnings per share (EPS) revised by share split (diluted), € 0.07 0.06 0.13 0.11 0.20 |
| Number of shares at end of period 45,065,130 45,065,130 45,065,130 45,065,130 45,065,130 |
| Average number of shares at end of period revised by share split 45,065,130 45,065,130 45,065,130 45,065,130 45,065,130 |
| Number of shares at end of period revised by share split 45,065,130 45,065,130 45,065,130 45,065,130 45,065,130 |
| Number of personnel* at end of period 556 544 556 544 561 |
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*The number of personnel includes both full- and part-time employees.

Verkkokauppa.com Oyj will change its reporting terminology in accordance with
the guidelines issued by the European Securities and Markets Authority (ESMA)
concerning Alternative Performance Measures. Verkkokauppa.com replaces the
previously used term "excluding non-recurring items" with the term
"comparable".

Verkkokauppa.com presents Alternative Performance Measures to reflect the
underlying business performance and to enhance comparability between
financial periods. Comparable performance measures exclude the income
statement impact of certain non-operational items affecting comparability.
Items affecting comparability are presented in the financial table section.

An item affecting comparability is an income or expense arising from
non-recurring or rare events. Items affecting comparability are recognised in
the profit and loss statement within the corresponding income or expense
group.
REVENUE AND PROFITABILITY DEVELOPMENT

July-September 2016

In July-September, Verkkokauppa.com Oyj's revenue grew by 11% year on year.
Revenue grew by 9.4 million euros, totalling 92.6 million euros (83.2).
Revenue increased particularly in televisions, computers, computer
peripherals, small (SDA) domestic appliances and toys&gifts.

According to GfK, the demand for consumer electronics increased by 11% during
July-September in Finland.

As in the previous quarter and in the comparison period, a part of the sales
increase was due to large wholesale volumes to customers who export the
goods, as well as B2B sales. This part of sales decreased year on year. The
volume of these sales is typically difficult to estimate and their
profitability is low. However, these sales c...

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