Verkkokauppa.com (VERK) Q2 2024 earnings summary

Executive summary

• Revenue declined 6% year-over-year in Q2 2024, outperforming the market, while own brands grew 12% to 8% of sales.

• Fast delivery network expanded to cover 1.7 million Finnish customers, with 26% sales growth in this channel.

• Expansion into Estonia launched, piloting fast deliveries for over 400,000 Tallinn customers.

• Strategic focus remains on online transition, fast deliveries, and operational efficiency amid challenging market conditions.

• Consumer confidence remained low, with many postponing purchases of durable goods.

Financial highlights

• Q2 2024 revenue was EUR 105.5 million, down 6% year-over-year; gross margin was 16.4% (16.7%).

• Q2 EBIT was EUR -2.0 million (0.8); comparable EBIT EUR -1.7 million (1.0); net result EUR -2.1 million (0.2).

• H1 2024 revenue was EUR 213.5 million, down 9% year-over-year; EBIT EUR -2.4 million (0.9); net result EUR -3.1 million.

• Cash at hand at quarter-end was EUR 16.3 million; equity ratio was 15.7%; gearing 72.2%.

• Investments in H1 totaled EUR 0.9 million, mainly in logistics and online customer experience.

Outlook and guidance

• 2024 revenue and comparable EBIT expected to be lower than 2023 unless market conditions improve in H2.

• Market recovery is postponed, with gradual improvement anticipated towards end of 2024.

• VAT increase in Finland expected to slightly weaken consumer purchasing power for the rest of the year.

• Focus remains on cost efficiency, inventory management, and margin protection.