Verkkokauppa.com (VERK) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue declined 7.4% YoY to EUR 502.9m; comparable EBIT rose to EUR 6.1m from EUR 3.5m.

• Q4 revenue fell 2.8% YoY to EUR 150.6m; EBIT rose to EUR 1.8m and operating cash flow reached EUR 17.8m.

• Profitability actions, inventory reduction and stronger operating cash flow helped offset soft demand and intense price competition.

Financial highlights

• Q4 gross profit was EUR 23.1m versus EUR 21.9m; gross margin rose to 15.3% from 14.1%.

• FY gross profit was EUR 80.9m versus EUR 80.6m; gross margin rose to 16.1% from 14.8%.

• FY net profit was EUR 2.1m versus EUR 0.3m; basic EPS was EUR 0.05 versus EUR 0.01.

• Q4 net profit was EUR 1.2m versus EUR 0.5m; EPS was EUR 0.03 versus EUR 0.01.

• Prior-year gross profit and EBIT comparisons were reduced by a EUR 1.6m inventory write-down.

Outlook and guidance

• FY 2024 revenue is expected to remain at the 2023 level of EUR 502.9m; comparable EBIT is expected to increase from EUR 6.1m.

• Consumer and B2B demand is expected to remain soft for at least H1 2024; economic recovery is anticipated toward year-end.

• 2024–2028 targets include annual revenue growth above 5%, operating margin above 5%, and fixed costs below 10% of revenue by end-2028.