Verkkokauppa.com (VERK) Q1 2023 earnings summary

Executive summary

• Q1 revenue fell 2.2% YoY to €122.0m amid weaker consumer and B2B demand; gross margin improved to 16.6% from 15.4%.

• Comparable operating profit rose to €1.4m from €0.9m; reported operating profit was €0.0m and net loss was €0.4m.

Financial highlights

• Gross profit increased 5.1% to €20.2m; EBITDA was €1.6m versus €2.0m, and reported operating profit was €0.0m versus €0.7m.

• Adjusted operating profit rose 57.9% to €1.4m from €0.9m; reported operating profit included a €1.2m one-off related to restructuring negotiations.

• Net loss was €0.4m versus net income of €0.2m; basic and diluted EPS were both -€0.01 versus €0.00.

• Operating cash flow improved to -€3.6m from -€16.8m; cash flow before working-capital changes was €1.6m versus €1.9m.

Outlook and guidance

• FY2023 guidance unchanged: revenue is expected to decline from €543.1m in 2022, while comparable operating profit is expected to grow from €3.5m.

• Consumer and B2B demand and trading conditions are expected to remain challenging, with limited visibility into economic developments; online purchasing migration is viewed as lasting.

• Profitability program targets €10m annual improvement, with €5–8m expected in 2023; over 40% of 200+ initiatives completed, with most impact expected in Q3–Q4.