Verkkokauppa.com (VERK) Q2 2023 earnings summary

Executive summary

• Q2 revenue fell 10.2% YoY to €112.8m; operating profit improved to €0.8m from a €0.9m loss, and comparable EBIT rose to €1.0m from -€0.2m.

• H1 revenue declined 6.2% to €234.8m, while comparable EBIT increased to €2.3m; margin gains and cost actions supported profitability amid weak demand and tougher competition.

Financial highlights

• Q2 gross profit was €18.8m versus €19.4m, with gross margin rising to 16.7% from 15.4%; net profit was €0.2m versus a €1.1m loss.

• H1 gross profit was €39.1m versus €38.6m, with gross margin at 16.6% versus 15.4%; net loss narrowed to €0.2m from €0.9m.

• Q2 EBITDA was €2.3m versus €0.5m; H1 EBITDA was €3.9m versus €2.5m.

• H1 operating cash flow improved to -€0.4m from -€16.5m.

Outlook and guidance

• FY2023 guidance was unchanged: revenue expected to decline and comparable EBIT to improve versus 2022 revenue of €543.1m and comparable EBIT of €3.5m.

• The earnings improvement program targets €10m in annual improvement, with €5–8m expected in 2023; H1 delivery was on plan.

• Consumer and B2B demand was expected to remain soft in H2; a strategy and financial-target update was planned for H2 2023.