Verkkokauppa.com Oyj Interim report 1 January – 31 March 2025: Operational efficiency led to significant profit improvement

INTERIM REPORT for 1 January – 31 March 2025

Verkkokauppa.com Oyj: Operational efficiency led to significant profit improvement

Verkkokauppa.com Oyj        INTERIM REPORT        24 April 2025, 8:00 a.m. EEST

Verkkokauppa.com arranges two virtual news conferences on a result publication day. The news conference in Finnish will be held at 10:00 am Finnish time and in English at 11:00 am Finnish time. Details of the events and how to participate can be found at the end of this release.

This is a summary of Verkkokauppa.com’s Interim Report for 1 January – 31 March 2025. The complete report is attached to this release and also available at /en

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period). Figures are unaudited.

January–March 2025 in brief

• Revenue grew by 2.4 percent and was EUR 110.5 million (108.0)
• Gross profit was EUR 20.8 million (18.7) or 18.8 percent of the revenue (17.3%)
• Operating result (EBIT) was EUR 3.2 million (-0.4) or 2.9 percent of revenue (-0.4%)
• Comparable operating result (comparable EBIT) was EUR 3.2 million (0.5) or 2.9 percent of revenue (0.5%)
• Net result was EUR 2.0 million (-1.0)
• Earnings per share were EUR 0.04 (-0.02)
• Investments were EUR 0.3 million (0.3)
• Operating cash flow was EUR -14.7 million (-13.0)

FINANCIAL GUIDANCE FOR 2025

Verkkokauppa.com expects its revenue and comparable operating result for 2025 to increase. In 2024, the company's revenue was EUR 467.8 million and comparable operating result was EUR 1.8 million.

Guidance includes uncertainties related to changes in purchasing power and consumer behavior. Verkkokauppa.com’s business is seasonal and the company’s revenue and operating profit depend largely on the sales in the fourth quarter.

CEO PANU PORKKA’S REVIEW

Verkkokauppa.com had a strong start to the year with revenue returning to growth. First quarter revenue was EUR 110.5 million (108.0), up by 2.4% compared to the previous year. The revenue increased in the company's strategic focus areas of e-commerce and new markets. The company's key categories Entertainment and IT in particular showed growth as a result of successful commercial measures. Growth in the Entertainment category was driven by the transition to high definition television broadcasts in Finland at the beginning of April, which resulted in higher TV sales. Strategically important own brands’ revenue grew by 36 percent and represented 6.7 percent of the revenue.

Systematic streamlining of operational activities significantly improved the company's profitability. Gross margin increased to 18.8 percent (17.3%). The margin was strengthened by efficient inventory turnover, improved commercial terms and successful dynamic pricing. Comparable fixed costs decreased by 2.4% year-on-year as planned. The comparable operating result increased to EUR 3.2 million (EUR 0.5 million), representing 2.9% (0.5%) of revenue. The company's financial position remained solid. The inventory levels continued to be at healthy levels throughout the quarter, with a build-up toward the end of the quarter to ensure readiness for the upcoming season.

The implementation of the strategy is progressing according to plan. The online shift continues with an increasing share of fast deliveries. Fast deliveries increased by 21 percent and the continuous improvement of the customer experience was reflected in e-commerce’s highest customer loyalty in Finland (EPSI Rating). New market openings, the increasing use of artificial intelligence and automation in operations as well as operational improvements strengthen the company's position for continued profitable growth when the market situation improves.

FINANCIAL DEVELOPMENT

REVENUE AND PROFITABILITY

Revenue distribution

*Core categories include five main categories: IT, Entertainment, Mobile devices, SDA, and MDA.

**Own brands are included in Core and other categories accordingly.

JANUARY–MARCH 2025



Operating Environment



There was no significant change in the operating environment and a clear market recovery was not seen in the first quarter of the year. Consumers’ confidence in their own economy remained low and the time was regarded unfavorable for large purchases. However, there was a cautious recovery in online visits, especially towards the end of the reporting period.

Revenue

Revenue increased by 2.4 percent to EUR 110.5 million (108.0). The revenue growth was supported by increased sales in the IT category to consumer and business customers. The transition of televisions channels to high-definition broadcasting boosted sales of televisions. In addition, international sales grew significantly in the first quarter of the year.

Sales to consumers increased by 0.1 percent to EUR 73.3 (73.1) million, accounting for 66.3 percent (67.7%) of total revenue. B2B sales increased by 7.0 percent to EUR 37.3 million (34.8), accounting for 33.7 percent (32.3%) of total revenue.

Online sales increased by 3.9 percent to EUR 74.2 million (71.4), accounting for 67.1 percent (66.1%) of total revenue. The store sales declined by 0.7 percent to EUR 36.3 million (36.6). The share of the store sales was 32.9 percent (33.9%) of total revenue.

Core categories’ sales increased by 3.6 percent to EUR 91.4 million (88.3), accounting for 82.7 percent (81.8%) of total revenue, whereas other categories declined by 3.0 percent to EUR 19.1 million (19.7), accounting for 17.3 percent (18.2%) of total revenue.

Own brands’ sales grew by 36.2% to EUR 7.4 million (5.5), accounting for 6.7% (5.0%) of total revenue. The growth came particularly from home appliances, IT accessories and mobile devices.

Revenue from customer financing services totaled EUR 1.9 million (2.1), including interest income, fees and commissions. Net credit losses, including the change in the credit loss provision from the consumer financing, were EUR 0.7 million (0.9).

Result

Gross margin increased to 18.8 percent (17.3%). The gross margin was strengthened by efficient inventory turnover, improved commercial terms and successful dynamic pricing.

Personnel expenses decreased by 2.7 percent to EUR 8.8 million (9.0). Other operating expenses decreased by 13 percent and amounted to EUR 7.5 million (8.6). Comparable other operating expenses decreased by 2.2 percent to EUR 7.5 million (7.6). Fixed costs totaled EUR 16.2 million (17.6), decreasing by 7.7 percent from the comparison period. Comparable fixed costs decreased by 2.4 percent to EUR 16.2 million (16.6). The cost reduction was due to the reorganization at the end of the previous year and adjusting fixed costs to the operating environment.

The company's operating result (EBIT) was EUR 3.2 million (-0.4), up by EUR 3.6 million. Comparable operating result (comparable EBIT) was EUR 3.2 million (0.5), up by EUR 2.7 million from the comparison period.

Net result for the period was EUR 2.0 million (-1.0). Earnings per share were EUR 0.04 (-0.02).

FINANCE AND INVESTMENTS

In January-March 2025, operating cash flow totaled EUR -14.7 million (-13.0). The operating cash flow before the change in working capital was EUR 4.9 million (1.3). The company's net financial expenses were EUR -0.5 million (-0.3).

Investments were EUR 0.3 million (0.3), mainly related to improvement of operational efficiency and customer experience. Investments included capitalized wages and salaries at the amount of EUR 0.2 million (0.2).

At the end of March, the company had EUR 19 million in bank loans and an unutilized EUR 25 million revolving credit facility, which are valid until June 2027. The principal of the bank loan is amortized every six months.

PERSONNEL

At the end of March 2025, the total number of employees was 595 (644). This includes both full and part-time employees. The company renewed and streamlined its organizational structure in autumn 2024.

CORPORATE SUSTAINABILITY

In January 2025, Verkkokauppa.com published its renewed Sustainability Program, which focuses on promoting sustainable consumption and circular future, ensuring responsible operations and supply chains, fostering wellbeing and success of own personnel, and maintaining exemplary business conduct. Responsible operations are a key part of Verkkokauppa.com's strategy and vision to create a new normal for buying and owning. The company promotes sustainable consumption by selling according to need, providing customers with comprehensive product information, and extending product life cycles through means of circular economy.

In addition, in January, the company announced its commitment to the Science-Based Targets (SBTi) climate initiative to reduce its indirect emissions in line with the 1.5 degree target of the Paris Agreement. With the SBTi commitment, the company will focus on reducing indirect emissions in the value chain by engaging suppliers and partners in climate work. The company’s goal set in 2021 is on track to reduce its own emissions to zero by the end of 2025. In 2024, the company’s own emissions (scope 1,2) decreased by 61 percent from the previous year and were low: 38 tCO2. Emissions from the entire value chain (scope 1,2,3) were 194,923 tCO2 in 2024.

In March, Verkkokauppa.com published a sustainability report for the financial year 2024, which was prepared in accordance with the requirements set by the European Sustainability Reporting Standards (ESRS) and published as part of the Report of the Board of Directors. The Statement extensively reviews the company's management practices in relation to sustainability topics identified as material and presents the company's sustainability targets and progress towards them in 2024. In addition, the Sustainability Statement includes emissions reporting covering the company's entire value chain and extensive personnel-related key figures.

In 2024, the company's return rate remained low, at just 1.0 percent, including both change-of-minds and service returns. Circular economy services were expanded to new product categories and sales of used products increased by 19 percent. For its own personnel, efforts were made to promote equality, non-discrimination and diversity, and to develop expertise, focusing especially on coaching leadership.

STRATEGY

Verkkokauppa.com continues as a forerunner in the market with the vision of creating the new normal for buying and owning. The cornerstones of Verkkokauppa.com's strategy are growing the current business faster than the market, new openings, such as assortment expansion, own brand products and new markets, significant growth of the services business, and stronger profitability by continuously developing our own operations and platform.

Growing current business faster than the market

The company aims to strengthen its market leadership by accelerating the online shift by making buying fast, extremely convenient and affordable. As the only operator in Finland, Verkkokauppa.com already delivers to 1.7 million consumers around the clock in one hour, every day of the week. The company continues to optimize product flows, develop the distribution network and further automate the intralogistics to enable the continued development of the fastest deliveries on the market.

New openings: assortment expansion, own brand products and new markets

During the strategy period, the company plans to expand the assortment with a special focus on product areas that are optimally suited for fast deliveries and Verkkokauppa.com’s platform. The company will continue pilots in new market areas also outside Finland, making versatile use of both own platform and selected partners. New operating models, automation, as well as data will enable cost-efficiency and scalability.

Significant growth of the services business

Verkkokauppa.com seeks to offer consumers sustainable alternatives for buying products. The company’s current customer financing service, Tili, combined with the trade-in service, provides a strong foundation for new value-added services and product openings. The company’s current trade-in service and the assortment of recycled products are expanding. During the strategy period, Verkkokauppa.com will explore new subscription-based services for the market.

Stronger profitability by continuously developing own operations and platform

The company leverages artificial intelligence (AI) and data to operate goods flows, to streamline operations and to provide superior personalized customer experience. Verkkokauppa.com’s own flexible platform and extensive software development expertise enable versatile utilization of leading technologies from selected partners and are the basis for the capabilities that will be built during the strategy period.

Verkkokauppa.com’s long-term financial targets for the strategy period 2024-2028 are as follows:

1. Annual revenue growth (CAGR) of over 5 percent, faster than the market
2. Annual operating profit margin of over 5 percent by the end of the strategy period
3. Fixed costs to less than 10 percent of revenue by the end of the strategy period
4. To pay out 60-80 percent of annual net profit in quarterly growing dividends

LONG-TERM INCENTIVE PLANS

Verkkokauppa.com has a share-based incentive plan (Performance Share Plan 2023–2027) for the company's CEO and Management Team. The Performance Share Plan 2023–2027 consists of three performance periods. On 12 February 2025, the Board of Directors decided to commence the third matching period, covering the years 2025–2027. The performance criterion for the third performance period 2025–2027 is Total Shareholder Return (TSR).

Performance rewards for the 2025–2027 period will be paid partly in company shares and partly in cash by the end of May 2028. The plan includes a total of eight individuals (the CEO and all members of the management team). The maximum number of shares to be awarded for the third performance period is 340,000 Verkkokauppa.com shares, including the cash portion. The final number of shares depends on the number of shares acquired by participants and the achievement of the TSR levels. 

ANNUAL REPORTING PACKAGE 2024

Verkkokauppa.com has published its Annual Reporting package for 2024. The reporting package includes the Financial Statements and the Report of the Board of Directors including the Sustainability Statement, the Corporate Governance Statement, the Remuneration Report and the Company Brochure.

LEGAL DISPUTES AND POSSIBLE LEGAL PROCEEDINGS

In February 2025, the company announced the decision of the Helsinki Administrative Court, which upheld the administrative penalty imposed on Verkkokauppa.com by the Data Protection Ombudsman's Penalty Panel in March 2024. The company has applied for leave to appeal from the Supreme Administrative Court.

The company recognized the provision for the penalty in full in the first quarter of 2024. The provision was reported as an item affecting comparability.

ANNUAL GENERAL MEETING 2025

The Annual General Meeting was held as a remote meeting in Helsinki on 8 April 2025. The Annual General Meeting adopted the Annual Accounts for the financial year 2024 and decided not to distribute a dividend, discharged the members of the Board of Directors and the CEO from liability for the financial year 2024, approved the Remuneration Report and adopted the Remuneration Policy, and authorized the Board of Directors to decide on the repurchase and issuance of Verkkokauppa.com's own shares. In addition, the Annual General Meeting approved the proposals of the Shareholders' Nomination Board concerning the election and remuneration of the Board of Directors. Following the proposal of the Board of Directors, PricewaterhouseCoopers Oy was elected as the company's auditor and assurer of sustainability reporting. Mikko Nieminen, APA, acts as the auditor with principal responsibility.

Composition of the Board of Directors 2025

The Annual General Meeting confirmed the number of board members to be seven, and the following persons were re-elected: Robin Bade, Henrik Pankakoski, Kati Riikonen, Samuli Seppälä, Irmeli Rytkönen, Enel Sintonen and Arja Talma.

At the constitutive meeting of the Board of Directors held after the Annual General Meeting, Arja Talma was elected Chair of the Board. The compositions of the Board committees were decided to be as follows: members of the Remuneration Committee are Arja Talma (Chair), Robin Bade and Henrik Pankakoski. Members of the Audit Committee are Enel Sintonen (Chair), Arja Talma (Vice Chair), Kati Riikonen and Irmeli Rytkönen.

On 8 April 2025, Verkkokauppa.com published a stock exchange release on the decisions of the Annual General Meeting and the constitutive meeting of the Board of Directors. The release is available on the company's website. 

Dividend

The Annual General Meeting of Verkkokauppa.com Oyj decided on 8 April 2025, that the company will not distribute dividends for the financial year 2024.

FLAGGING NOTIFICATIONS

On 26 March 2025, the company received a notification from Evli Plc pursuant to Chapter 9, Section 5 of the Securities Markets Act, according to which the combined direct ownership of the company's shares and votes by Evli-Rahastoyhtiö Oy (100% owned by Evli Plc) has exceeded the five (5) percent threshold. According to the notification, Evli-Rahastoyhtiö Oy directly held a total of 2,502,380 shares in Verkkokauppa.com Oyj on 25 March 2025, an amount that corresponds to 5.52 percent of all shares in the company.

SHARE TRADING AND SHARES

Verkkokauppa.com shares (VERK) in Nasdaq Helsinki stock exchange in January-March 2025:

Verkkokauppa.com market capitalization and shareholders

At the end of March 2025, the company's largest shareholders according to the shareholder register held by Euroclear Finland Ltd were Samuli Seppälä (29.4%), Varma Mutual Pension Insurance Company (9.6%), Evli Finnish Small Cap Fund (5,6 %), Ilmarinen Mutual Pension Insurance Company (4.8%) and Mandatum Life Insurance Company Limited (4.7%).

On 31 March 2025, the share capital was EUR 100,000 and the total number of shares in the company was 45,354,532 including 86,345 treasury shares held by the company. The treasury shares have no voting rights, and no dividend is paid on them. The treasury shares accounted for 0.19 percent of all shares.

Share-related authorizations

At the end of March 2025, the Board had valid authorization to decide on the repurchase of a maximum of 4,535,453 own shares in one or several installments and to decide on a share issue of a maximum of 4,535,453 shares by one or more decisions. The proposed maximum authorized number represents ten percent of the total number of shares in the company. Authorizations are valid until the next Annual General Meeting, however, no longer than until 30 June 2026.

More information about Verkkokauppa.com's shares and shareholders and management holdings can be found on the company's investor website

SHORT-TERM RISKS AND BUSINESS UNCERTAINTIES

Verkkokauppa.com’s risk management is proactive and a central part of the company's daily management. Risks cover both threats and opportunities that may have an impact on the company's future success, financial performance, reputation and ability to meet key social and responsibility objectives.

Macroeconomic and geopolitical risks, such as global trade wars, inflation, interest rate changes and market uncertainty, can affect supply chains, consumer purchasing power and buying behaviour. Managing these risks requires constant monitoring of market conditions, proactive measures and an adaptive strategy.

Information security’s growing importance and professionally evolving cybercrime, the risks associated with business continuity and the protection of critical information have increased significantly. Cyberattacks can target, for example, business-critical information systems or personal data, leading to disruption of sales, loss of customer confidence and possible regulatory sanctions.

From a regulatory and compliance perspective, the tightening of EU legislation underlines the importance of compliance activities. Particular attention should be paid to anti-money laundering, sustainability reporting (ESG, CSRD), data regulation and compliance with AI legislation.

Commercial and operational risks relate to brand positioning, competitive dynamics, product portfolio management, supply chain efficiency and operational excellence. Managing these risks is key to ensuring the company's long-term competitiveness.

Product safety failure or supply chain quality assurance can lead to financial losses, reputational damage and, in the worst case, compromise of customer safety. Our own products are developed and manufactured to stringent standards, and we invest in continuous process improvement to maintain confidence in our products in all situations.

Financial risks, including profitability, balance sheet structure, working capital efficiency, liquidity, access to funding, covenants and credit risks, require continuous analysis and management to ensure the financial stability and profitable growth of the company.

An assessment of the main risks and uncertainties in the business is presented in the 2024 Board of Directors’ Report.

Helsinki, Finland, 24 April 2025

Verkkokauppa.com Oyj Board of Directors

QUARTERLY RESULT WEBCASTS

A result webcast for analysts, investors and media will be held in Finnish on Thursday, 24 April 2025 at 10:00 a.m. (EEST), in which Verkkokauppa.com’s CEO Panu Porkka will present the developments in the reporting period. It is possible to participate in the result webcast here: .

A result webcast in English will be held on Thursday, 24 April 2025 at 11:00 a.m. (EEST). It is possible to participate in the webcast here: .

Questions can be sent beforehand or during the presentation via e-mail to  Presentation materials for both events are available at

For both press conferences, the result webcast is available at verklive.com

COMPANY RELEASES AND EVENTS

Verkkokauppa.com will arrange events and publish its financial reports as follows:

• Half-year financial report for January–June 2025 on Thursday 17 July 2025
• Interim report for January–September 2025 on Thursday 23 October 2025
• Financial statements bulletin for the year 2025 on Thursday 12 February 2026
  
  
  
  

More information:

Panu Porkka, CEO, Verkkokauppa.com Oyj

Jesper Blomster, CFO, Verkkokauppa.com Oyj Tel. 3

Verkkokauppa.com is an e-commerce pioneer that stands passionately on the customer’s side. Verkkokauppa.com accelerates the transition of commerce to online with Finland’s fastest deliveries and ultimate convenience. The company leads the way by offering one-hour deliveries to more than 1.7 million customers, a winning assortment and probably always cheaper prices. Every day, the company strives to find more streamlined ways to surpass its customers´ expectations and to create a new norm for buying and owning.

Verkkokauppa.com was founded in 1992 and has been online since day one. The company’s revenue in 2024 was EUR 468 million and it employs around 600 people. Verkkokauppa.com is listed on the Nasdaq Helsinki stock exchange

Attachment