INTERIM REPORT for 1 January –
1 July –
- Revenue
129 million euros (7–9/2019: 121), growth of 7.3% - Gross profit
20.9 million euros (18.9), growth of 10.4% - Gross margin 16.2% of revenue (15.7%)
- Operating profit
5.6 million euros (4.3) - Operating margin 4.3% of revenue (3.6%)
- Comparable operating profit
5.6 million euros (4.3) - Comparable operating margin 4.3% (3.6%)
- Profit for the period
4.2 million euros (3.2) - Earnings per share
0.09 euros (0.07) - Investments
0.3 million euros (0.03) - Operating cash flow
5.5 million euros (11.4) - On
24 September 2020 , the company issued a positive profit warning and updated the financial guidance for 2020 - The Board of Directors has resolved to pay a quarterly dividend of
0.055 euros per share after the reporting period
KEY RATIOS | 7-9/2020 | 7-9/2019 | Change% | 1-9/2020 | 1-9/2019 | Change% | 1-12/2019 |
Revenue, € million | 129.3 | 120.6 | 7.3% | 377.6 | 344.2 | 9.7% | 504.1 |
Gross profit, € million | 20.9 | 18.9 | 10.4% | 61.8 | 51.7 | 19.5% | 73.9 |
Gross margin, % of revenue | 16.2% | 15.7% | 3.0% | 16.4% | 15.0% | 8.9% | 14.7% |
EBITDA, € million | 6.8 | 5.6 | 22.3% | 17.1 | 10.6 | 60.9% | 16.3 |
EBITDA, % | 5.3% | 4.6% | 14.0% | 4.5% | 3.1% | 46.7% | 3.2% |
Operating profit, € million | 5.6 | 4.3 | 29.4% | 13.4 | 6.8 | 96.1% | 11.3 |
Operating margin, % of revenue | 4.3% | 3.6% | 20.6% | 3.5% | 2.0% | 78.7% | 2.2% |
Comparable operating profit, € million | 5.6 | 4.3 | 29.4% | 14.2 | 6.8 | 107.9% | 11.3 |
Comparable operating margin, % of revenue | 4.3% | 3.6% | 20.6% | 3.8% | 2.0% | 89.5% | 2.2% |
Net profit, € million | 4.2 | 3.2 | 31.7% | 10.0 | 4.6 | 117.7% | 7.8 |
Investments, € million | 0.3 | 0.0 | 913.0% | 0.9 | 0.9 | 8.3% | 1.2 |
Operating cash flow, € million | 5.5 | 11.4 | -52.2% | 6.5 | -2.0 | 431.6% | 9.7 |
1 January –
- Revenue
378 million euros (1–9/2019: 344), growth of 9.7% - Gross profit
61.8 million euros (51.7), growth of 19.5% - Gross margin 16.4% of revenue (15.0%)
- Operating profit
13.4 million euros (6.8) - Operating margin 3.5% of revenue (2.0%)
- Comparable operating profit
14.2 million euros (6.8) - Comparable operating margin 3.8% (2.0%)
- Profit for the period
10.0 million euros (4.6) - Earnings per share
0.22 euros (0.10) - Investments
0.9 million euros (0.9) - Operating cash flow
6.5 million euros (-2.0)
BUSINESS OUTLOOK
Verkkokauppa.com Oyj’s business operations are estimated to develop positively within a medium-term time frame. The company believes that it will succeed in further growing its market share in the chosen categories. The strong balance sheet enables the company to continue expanding its operations in accordance with its strategy.
The company has benefited from the shifting consumer behavior accelerated by the COVID-19 pandemic, as the sales in the online sales channel have shown strong growth. The company expects this trend to continue the longer the COVID-19 pandemic persists and that the shift to online sales channels becomes permanent as consumers and businesses adapt new behaviors.
At the same time, the prolongation of the COVID-19 pandemic continues to have a negative impact on spending on travel and service sectors. On the one hand, this has positively affected the consumer demand for goods, but on the other hand, it has limited the lower-margin wholesale business. The short-term risk of an acceleration or worsening of the COVID-19 situation in
The uncertainties concerning the future business outlook remain significant and relate to macroeconomic developments and the prevailing COVID-19 situation. The pandemic may still cause unforeseen impacts on the overall economic development, consumer demand as well as consumer purchase behavior and B2B sales in the future. Nevertheless, the company believes that it is well positioned and will be a relative winner in the “new normal” business environment of the future.
FINANCIAL GUIDANCE
On
CEO PANU PORKKA’S REVIEW
Verkkokauppa.com’s revenue grew by 7% in Q3, amounting to
The company succeeded in improving its profitability also during Q3. Gross margin in Q3 was 16.2% compared to 15.7% in Q3/2019. This was a result of strong sales increase in newer categories as well as strong consumer sales, while the market for wholesale is having headwind due to travel restrictions. Continued investments into technology led to operational improvements in several areas, such as performance marketing, which improved the gross margin. The development of data analysis generated faster inventory turn, which further improved the gross margin. The company also achieved an all-time high comparable operating profit of
The Company is working hard to further develop the product range in high-demand categories. For this reason, it is rewarding to see that new categories are showing good performance. Categories such as Sports, BBQ and Kitchen grew by more than 40% during Q3. It is an important part of the company’s strategy to offer the most comprehensive assortment in each product category. As part of assortment management, in selected categories the company supplements its offering with private label products to give the customer the best possible value-for-money options. This is a growing part of the business where even more emphasis will be put during the coming years. In addition, a new website verkkokauppa.fi was launched in September to attract the best new Finnish suppliers as part of the company’s continuously widening offering.
The competition and price pressure will likely pick up as the main season for consumer spending is in Q4. Uncertainties regarding COVID-19 are taken into account in order to ensure safety of staff and customers. It is expected that the ongoing situation will continue to permanently migrate traditional brick-and-mortar sales to online shopping and home deliveries.
REVENUE AND PROFITABILITY DEVELOPMENT
July–September 2020
In July–September 2020, Verkkokauppa.com Oyj’s revenue grew by 7.3% year on year. Revenue grew by
The company-financed customer financing proceeds were
Personnel costs increased in July–September by 6.4% to
Operating profit in July–September 2020 was
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | |
EUR millions | 2020 | 2019 | 2020 | 2019 | 2019 |
Operating profit | 5.6 | 4.3 | 13.4 | 6.8 | 11.3 |
- advisory costs related to transfer to official list of Nasdaq Helsinki | - | - | 0.8 | - | - |
Comparable operating profit | 5.6 | 4.3 | 14.2 | 6.8 | 11.3 |
Earnings per share were
January–September 2020
In January–September 2020, Verkkokauppa.com Oyj’s revenue grew by 9.7% year on year. Revenue grew by
The company-financed customer financing proceeds were
Personnel costs increased in January–September by 7.1% to
Operating profit in January–September 2020 was
FINANCE AND INVESTMENTS
Operating cash flow was
Ordinary seasonal fluctuations are reflected in cash and cash equivalents, cash flow and accounts payable, which usually reach the highest point at the end of the fourth quarter and the lowest point at the end of the second quarter.
Investments totaled
SHARE TRADING AND SHARES
During the reporting period,16,074,633 shares were exchanged until 4 June on the First North Growth Market of
The total number of shares in the company was 45,065,130 on
The Board holds a valid authorization to issue a maximum of 4,506,513 shares on a share issue by one or several decisions (share issue authorization of 2020). The Board has utilized its share issue authorization solely for transferring shares as part of the remuneration of Board members.
LONG-TERM INCENTIVE PLANS
In the Matching Share Plan 2018–2020, the participant may earn a number of matching shares, determined by the Board of Directors, based on their investment in Verkkokauppa.com Oyj’s shares. The Matching Share Plan has two matching periods: 2018–2020 and 2019–2021. The rewards to be paid on the basis of the matching period 2018–2020 correspond to the value of maximum total of 50,000 Verkkokauppa.com Oyj’s shares, and on the basis of the matching period 2019–2021 to the value of maximum total of 45,000 Verkkokauppa.com Oyj’s shares, including also the proportions to be paid in cash.
In the new Performance Matching Share Plan 2020–2022, a person may earn a number of matching shares based on their investment in Verkkokauppa.com Oyj’s shares and the Total Shareholder Return (TSR) of the share. The Performance Matching Share Plan includes one performance period, calendar years 2020–2022. The reward to be paid to participants is based on the achievement of the required TSR levels set by the Board of Directors. A maximum of three performance-based matching shares is paid for each allocated share. The rewards to be paid on the basis of the plan correspond to the value of approximately 540,000
PERSONNEL
During the reporting period, the number of employees increased by 1.7%, and the total number of employees was 700 (688) at the end of
SHAREHOLDERS’ NOMINATION BOARD
On
- Samuli Seppälä, Founder of
Verkkokauppa.com , representing himself, Peter Lindell , Partner and Chairman ofRite Ventures , appointed byRite Ventures Finland AB ,- Erkka Kohonen, Senior Portfolio Manager, appointed by
Varma Mutual Pension Insurance Company , - Christoffer Häggblom, Chair of the Board of
Verkkokauppa.com Oyj
The Chair of the Nomination Board is
Verkkokauppa.com’s Shareholders’ Nomination Board was established in 2020 by the Annual General Meeting. Its duty is to prepare proposals on the number, election and remuneration of the members of the Board to the General Meeting.
RISKS AND UNCERTAINTIES
Verkkokauppa.com Oyj’s risks and uncertainties reflect the market and general economic trends, for example, demand for consumer electronics, wholesale trade business, the business environment and competition. The company’s business operations are also influenced by risks and uncertainties relating to, for example, business strategy, investments, procurement and logistics, information technology, and other operative aspects of the business. The aforementioned risks and uncertainties may affect the company’s operations, financial position and performance both positively and negatively. Risks and uncertainties have been presented in more detail in the Annual Report 2019.
Uncertainty in the development of the economy and the financial markets in
LITIGATION AND DISPUTES
ANNUAL GENERAL MEETING 2020
The Annual General Meeting was held in
The Annual General Meeting authorized the Board of Directors to decide in its discretion on the distribution of dividends as follows: The total amount of the dividend distribution based on this authorization shall not exceed
The number of Board members was confirmed as six. All current Board members, Christoffer Häggblom, Robert Burén,
The Annual General Meeting authorized the Board to decide on the repurchase of a maximum of 4,506,513 shares in one or several instalments using the unrestricted equity of the Company, however taking into account the provisions of the Finnish Limited Liability Companies Act on the maximum number of the treasury shares held by the company or its subsidiaries. The proposed number of shares represents a maximum of ten (10) per cent of the total number of shares in the company. The authorization is valid until the close of the following Annual General Meeting, however, no longer than until
The Annual General Meeting authorized the Board of Directors to decide on a share issue by one or several decisions. A maximum of 4,506,513 shares may be issued on the basis of the authorization. The proposed maximum authorized number represents ten (10) percent of the company’s entire share capital. The authorization is valid until the close of the following Annual General Meeting, however, no longer than until
In addition, the Annual General Meeting resolved to establish a Shareholders’ Nomination Board, to prepare proposals on the election and remuneration of the members of the Board of Directors for the Annual General Meeting as well as confirm the charter of the Shareholders’ Nomination Board. The Nomination Board consists of four members, three of which represent the Company’s three largest shareholders, or the representatives nominated by such shareholders. The Chair of the Board of Directors shall be the fourth member of the Nomination Board. The right to nominate members to represent shareholders rests with three shareholders who are registered in the shareholders’ register maintained by
DIVIDEND
The Annual General Meeting 2020 resolved to pay
The Board resolved on
The Board resolved on
The dividend payment date was
The Board resolved on
Verkkokauppa.com’s Annual General Meeting authorized the Board of Directors to decide in its discretion on the distribution of dividends not exceeding
OTHER EVENTS DURING THE REPORTING PERIOD
On
On
On
On
SUBSEQUENT EVENTS
There are no subsequent events that differ from usual business events, after the reporting period.
PRESS CONFERENCES
A press conference for analysts, investors and media will be held in Finnish by LiveStream webcast on Friday,
A press conference in English will be held by LiveStream webcast on Friday,
Presentation materials for both events are available at https://investors.verkkokauppa.com/en/presentations. For both press conferences, a LiveStream is available at www.verklive.com.
COMPANY RELEASES IN 2020/2021
- Financial Statement Release January–December 2020, Friday
12 February 2021 - Annual Report 2020 will be published online during week 9, 2021
- Interim Report January–March 2021, Friday
23 April 2021 - Half-year Report January–June 2021, Friday
16 July 2021 - Interim Report January–September 2021, Friday
22 October 2021
Board of Directors
More information:
e-mail panu.porkka@verkkokauppa.com
Telephone +358 10 309 5555
e-mail mikko.forsell@verkkokauppa.com
Telephone +358 10 309 5555
Distribution:
Nasdaq
Key media
www.verkkokauppa.com
Income statement
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | ||
EUR thousand | Note | 2020 | 2019 | 2020 | 2019 | 2019 |
Revenue | 1.3 | 129,321 | 120,560 | 377,627 | 344,205 | 504,113 |
Other operating income | 127 | 118 | 370 | 401 | 555 | |
Materials and services | -108,394 | -101,611 | -315,874 | -292,529 | -430,239 | |
Employee benefit expenses | -8,105 | -7,614 | -25,140 | -23,480 | -32,595 | |
Depreciation and amortization | -1,228 | -1,255 | -3,704 | -3,794 | -5,040 | |
Other operating expenses | -6,116 | -5,866 | -19,899 | -17,981 | -25,504 | |
Operating profit | 5,606 | 4,333 | 13,380 | 6,823 | 11,290 | |
Finance income | 5 | 59 | 8 | 62 | 64 | |
Finance costs | -339 | -391 | -1,059 | -1,170 | -1,591 | |
Profit before income taxes | 5,272 | 4,000 | 12,329 | 5,715 | 9,763 | |
Income taxes | -1,055 | -797 | -2,369 | -1,141 | -1,953 | |
Profit for the period | 4,218 | 3,203 | 9,960 | 4,575 | 7,810 | |
Profit for the period attributable to | ||||||
Equity holders of the company | 4,218 | 3,203 | 9,960 | 4,575 | 7,810 | |
Earnings per share calculated from the profit attributable to equity holders | ||||||
Earnings per share, basic and diluted (EUR) | 0.09 | 0.07 | 0.22 | 0.10 | 0.17 |
Statement of comprehensive income
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | ||
EUR thousand | 2020 | 2019 | 2020 | 2019 | 2019 | |
Profit for the period | 4,218 | 3,203 | 9,960 | 4,575 | 7,810 | |
Comprehensive income for the period | 4,218 | 3,203 | 9,960 | 4,575 | 7,810 | |
Comprehensive income for the period | ||||||
Equity holders of the company | 4,218 | 3,203 | 9,960 | 4,575 | 7,810 |
Statement of financial position
EUR thousand | Note | ||
Non-current assets | |||
Intangible assets | 874 | 592 | |
Property, plant and equipment | 2,210 | 2,381 | |
Right-of-use assets | 1.5 | 17,215 | 18,770 |
Equity investments | 266 | 266 | |
Deferred tax assets | 1,342 | 1,195 | |
Trade receivables | 1.6/1.7 | 2,320 | 1,882 |
Other non-current receivables | 425 | 435 | |
Non-current assets, total | 24,652 | 25,521 | |
Current assets | |||
Inventories | 65,680 | 66,702 | |
Trade receivables | 1.6/1.7 | 14,936 | 14,620 |
Other receivables | 1,292 | 1,143 | |
Income tax receivables | - | 278 | |
Accrued income | 9,027 | 9,424 | |
Cash and cash equivalents | 1.7 | 36,481 | 42,495 |
Current assets, total | 127,416 | 134,662 | |
Total assets | 152,068 | 160,183 | |
Equity | |||
Share capital | 100 | 100 | |
-2,206 | -701 | ||
Invested non-restricted equity fund | 25,790 | 25,707 | |
Retained earnings | 4,585 | 3,647 | |
Profit for the period | 9,960 | 7,810 | |
Total equity | 38,229 | 36,563 | |
Non-current liabilities | |||
Lease liabilities | 1.7 | 17,929 | 19,676 |
Deferred tax liabilities | 7 | 7 | |
Provisions | 815 | 660 | |
Non-current liabilities, total | 18,751 | 20,343 | |
Current liabilities | |||
Lease liabilities | 1.7 | 3,898 | 3,758 |
Advance payments received | 4,584 | 3,819 | |
Trade payables | 1.7 | 63,253 | 73,068 |
Other current liabilities | 7,214 | 7,892 | |
Accrued liabilities | 15,308 | 14,741 | |
Income tax liabilities | 830 | - | |
Current liabilities, total | 95,088 | 103,277 | |
Total liabilities | 113,839 | 123,620 | |
Total equity and liabilities | 152,068 | 160,183 |
Statement of cash flows
1-9/ | 1-9/ | 1-12/ | |
EUR thousand | 2020 | 2019 | 2019 |
Cash flow from operating activities | |||
Profit before income taxes | 12,329 | 5,715 | 9,763 |
Adjustments | |||
Depreciation and impairment | 3,704 | 3,794 | 5,040 |
Finance income and costs | 1,051 | 1,165 | 1,527 |
Other adjustments | 390 | 433 | 476 |
Cash flow before change in working capital | 17,475 | 11,107 | 16,806 |
Change in working capital | |||
Increase (-) / decrease (+) in non-current non-interest-bearing trade receivables | -428 | 175 | -335 |
Increase (‒) / decrease (+) in trade and other receivables | -67 | 5,725 | 1,653 |
Increase (‒) / decrease (+) in inventories | 1,022 | 5,703 | -918 |
Increase (+) / decrease (‒) in current liabilities | -9,042 | -21,755 | -3,650 |
Cash flow before financial items and taxes | 8,959 | 956 | 13,557 |
Interest paid | -54 | -44 | -59 |
Interest received | 6 | 5 | 7 |
Interest of lease liabilities | -1,004 | -1,127 | -1,483 |
Income tax paid | -1,411 | -1,750 | -2,333 |
Cash flow from operating activities | 6,496 | -1,959 | 9,690 |
Cash flow from investing activities | |||
Purchases of property, plant and equipment | -445 | -699 | -1,016 |
Purchases of intangible assets | -541 | -130 | -186 |
Proceeds from equity investments | - | 57 | 57 |
Cash flow from investing activities | -986 | -772 | -1,145 |
Cash flow from financing activities | |||
Decrease (-) in lease liabilities | -2,881 | -2,771 | -3,690 |
Dividends paid | -7,138 | -6,614 | -8,908 |
Acquisition of treasury shares | -1,505 | -198 | -198 |
Cash flow from financing activities | -11,524 | -9,584 | -12,796 |
Increase (+) / decrease (‒) in cash and cash equivalents | -6,014 | -12,314 | -4,251 |
Cash and cash equivalents at beginning of financial year | 42,495 | 46,746 | 46,746 |
Cash and cash equivalents at end of financial year | 36,481 | 34,432 | 42,495 |
Statement of changes in equity
A Share capital | D Fair value reserve | |||||
B | E Retained earnings | |||||
C Invested non-restricted equity fund | F Total equity | |||||
EUR thousand | A | B | C | D | E | F |
Equity | 100 | -701 | 25,707 | 0 | 11,457 | 36,563 |
Profit for the period | - | - | - | - | 9,960 | 9,960 |
Changes in fair values of equity investments | - | - | - | - | - | 0 |
Comprehensive income for the period, total | - | - | - | - | 9,960 | 9,960 |
Dividend distribution | - | - | - | - | -7,138 | -7,138 |
Acquisition of treasury shares | - | -1,505 | - | - | - | -1,505 |
Disposal of treasury shares -Board fees | - | - | 83 | - | - | 83 |
Share-based incentives | - | - | - | - | 267 | 267 |
Transactions with owners, total | - | -1,505 | 83 | - | -6,871 | -8,293 |
Equity | 100 | -2,206 | 25,790 | 0 | 14,545 | 38,229 |
EUR thousand | A | B | C | D | E | F |
Equity | 100 | -502 | 25,585 | -33 | 12,416 | 37,565 |
Profit for the period | - | - | - | - | 7,810 | 7,810 |
Changes in fair values of equity investments | - | - | - | 33 | - | 33 |
Comprehensive income for the period, total | - | - | - | 33 | 7,810 | 7,843 |
Dividend distribution | - | - | - | - | -8,908 | -8,908 |
Acquisition of treasury shares | - | -198 | - | - | - | -198 |
Disposal of treasury shares -Board fees | - | - | 122 | - | - | 122 |
Share-based incentives | - | - | - | - | 139 | 139 |
Transactions with owners, total | - | -198 | 122 | 0 | -8,769 | -8,845 |
Equity | 100 | -701 | 25,707 | 0 | 11,457 | 36,563 |
EUR thousand | A | B | C | D | E | F |
Equity | 100 | -502 | 25,585 | -33 | 12,416 | 37,565 |
Profit for the period | - | - | - | - | 4,575 | 4,575 |
Changes in fair values of equity investments | - | - | - | - | - | 0 |
Comprehensive income for the period, total | - | - | - | - | 4,575 | 4,575 |
Dividend distribution | - | - | - | - | -6,614 | -6,614 |
Acquisition of treasury shares | - | -198 | - | - | - | -198 |
Disposal of treasury shares -Board fees | - | - | 92 | - | - | 92 |
Share-based incentives | - | - | - | - | 101 | 101 |
Transactions with owners, total | - | -198 | 92 | - | -6,513 | -6,619 |
Equity | 100 | -701 | 25,676 | -33 | 10,477 | 35,520 |
Notes
1.1 Accounting principles applied in this Interim Financial Report
Verkkokauppa.com Oyj’s Interim Financial Report for January–September 2020 has been prepared in line with IAS 34, ‘Interim Financial Reporting’ and should be read in conjunction with Verkkokauppa.com Oyj’s financial statements for 2019, published on
The information presented in this Interim Financial Report has not been audited. The figures are rounded, and therefore the sum of individual figures may deviate from the aggregate amount presented. All amounts in this report are presented in EUR thousands, unless otherwise stated.
Management judgement related to the choice and application of accounting policies and measures following the COVID-19
The preparation of this Interim Financial Report required management to make judgements, estimates assumptions that affect the application of accounting principles and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
Since the outbreak of COVID-19 pandemic the company has started several initiatives to secure business continuity and staff safety. The company is monitoring and reporting on the COVID-19 situation on a frequent basis. As the conditions surrounding the COVID-19 pandemic are constantly changing, it is still difficult to estimate its impact on the economy, consumer demand as well as purchase behavior, B2B sales and wholesale. Since
1.2 Segment reporting
1.3 Revenue from contracts with customers
The revenue streams of the company consist of the sale of goods and services. There are more than 65,000 products in 26 different main product categories that the company sells to consumers through its own webstore and four retail stores in
Revenue from sales of products is recognized at a point in time when the control has been transferred. The revenue from services is recognized mainly over time.
Disaggregation of revenue
Satisfaction of performance obligations
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | |
EUR thousand | 2020 | 2019 | 2020 | 2019 | 2019 |
At a point in time | 128,217 | 119,164 | 374,508 | 340,077 | 498,343 |
Over time | 1,104 | 1,396 | 3,119 | 4,128 | 5,770 |
Revenue, total | 129,321 | 120,560 | 377,627 | 344,205 | 504,113 |
Revenue by external customers’ location
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | |
EUR thousand | 2020 | 2019 | 2020 | 2019 | 2019 |
120,393 | 107,652 | 340,241 | 307,395 | 442,540 | |
Rest of the world | 8,929 | 12,908 | 37,386 | 36,810 | 61,573 |
Revenue by external customers’ location | 129,321 | 120,560 | 377,627 | 344,205 | 504,113 |
Income recognized from customer financing
The company presents all income from customer financing as part of revenue in the primary financial statements.
The table below presents the income recognized from company-financed Apuraha customer financing divided into income recognized using the effective interest rate method and other income. Other income consists of other fees.
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | |
EUR thousand | 2020 | 2019 | 2020 | 2019 | 2019 |
Interest income recognized using effective interest rate method | 536 | 312 | 1,449 | 948 | 1,293 |
Other income from company-financed customer financing | 342 | 492 | 1,191 | 1,464 | 1,983 |
Income from company-financed Apuraha, total | 878 | 804 | 2,640 | 2,412 | 3,276 |
1.4 Seasonality of business
The nature of the business of the company includes seasonality. Ordinary seasonal fluctuations are reflected in cash and cash equivalents, cash flow and accounts payable, which usually reach the highest point at year-end and the lowest point at the end of the second quarter.
1.5 Right-of-use assets
EUR thousand | ||
Carrying amount 1.1. | 18,770 | 21,764 |
Increases | 1,334 | 113 |
Increase/decrease due to remeasurement | - | 700 |
Disposals | -56 | -33 |
Depreciation | -2,833 | -3,774 |
Carrying amount at the end of period | 17,215 | 18,770 |
The remeasurements made during 2019 and 2020 relate to index adjustments and renegotiated rental agreements.
1.6 Trade receivables
EUR thousand | Trade receivables | Loss allowance | Trade receivables | Loss allowance | Trade receivables | Loss allowance |
Not due | 14,639 | 612 | 11,770 | 122 | 12,226 | 101 |
Past due 1-60 days | 3,495 | 284 | 3,346 | 265 | 4,399 | 331 |
Past due 61-120 days | 46 | 28 | 85 | 56 | 419 | 110 |
Past due over 121 days | 35 | 35 | 32 | 32 | 17 | 17 |
Total | 18,215 | 959 | 15,234 | 475 | 17,061 | 559 |
1.7 Financial assets and liabilities by measurement category
Recognized at fair value through other comprehensive income | At amortized cost | Lease liabilities | ||
EUR thousand | Carrying amount | |||
Non-current financial assets | ||||
Equity investments (level 3) | 266 | - | - | 266 |
Trade receivables and other financial receivables | - | 2,745 | - | 2,745 |
Non-current financial assets, total | 266 | 2,745 | - | 3,011 |
Current financial assets | ||||
Trade receivables | - | 14,936 | - | 14,936 |
Cash and cash equivalents | - | 36,481 | - | 36,481 |
Current financial assets, total | - | 51,417 | - | 51,417 |
Financial assets by measurement category, total | 266 | 54,162 | - | 54,429 |
Non-current financial liabilities | ||||
Lease liabilities | - | - | 17,929 | 17,929 |
Non-current financial liabilities, total | - | - | 17,929 | 17,929 |
Current financial liabilities | ||||
Lease liabilities | - | - | 3,898 | 3,898 |
Trade payables | - | 63,253 | - | 63,253 |
Current financial liabilities, total | - | 63,253 | 3,898 | 67,151 |
Financial liabilities by measurement category, total | - | 63,253 | 21,827 | 85,080 |
Recognized at fair value through other comprehensive income | At amortized cost | Lease liabilities | ||
EUR thousand | Carrying amount | |||
Non-current financial assets | ||||
Equity investments (level 3) | 266 | - | - | 266 |
Trade receivables and other financial receivables | - | 2,317 | - | 2,317 |
Non-current financial assets, total | 266 | 2,317 | - | 2,583 |
Current financial assets | ||||
Trade receivables | - | 14,620 | - | 14,620 |
Cash and cash equivalents | - | 42,495 | - | 42,495 |
Current financial assets, total | - | 57,116 | - | 57,116 |
Financial liabilities by measurement category, total | 266 | 59,432 | - | 59,699 |
Non-current financial liabilities | ||||
Lease liabilities | - | - | 19,676 | 19,676 |
Non-current financial liabilities, total | - | - | 19,676 | 19,676 |
Current financial liabilities | ||||
Lease liabilities | - | - | 3,758 | 3,758 |
Trade payables | - | 73,068 | - | 73,068 |
Current financial liabilities, total | - | 73,068 | 3,758 | 76,826 |
Financial liabilities by measurement category, total | - | 73,068 | 23,434 | 96,502 |
Determining fair values
Level 1: Fair values are based on the (unadjusted) quoted prices of identical assets or liabilities publicly traded in active markets.
Level 2: Financial instruments are not traded in active and liquid markets, but their fair values are calculable based on market data.
Level 3: Measuring of financial instruments is not based on verifiable market data, nor are other factors influencing the fair value of the instruments available or verifiable.
The equity investments in level 3 contain unquoted shares. According to the assessments of the management, measurement at cost is closest to fair value. There have been no changes in the carrying amounts during the financial year 2020. There have been no significant transfers between measurement categories during the review period.
1.8 Dividends
Dividends paid after the reporting period and year-on-year.
2020 | ||
For the previous year | Date of payment | Dividend per share, EUR |
0.052 | ||
0.053 | ||
0.054 | ||
Total dividends, EUR thousand | 7,138 | |
2019 | ||
For the previous year | Date of payment | Dividend per share, EUR |
0.048 | ||
0.049 | ||
0.050 | ||
0.051 | ||
Total dividends, EUR thousand | 8,908 |
1.9 Transactions with related parties
Verkkokauppa.com Oyj’s related parties comprise the Board of Directors, the CEO as well as the other members of the Management Team and the close members of the family of said persons as well as their controlled entities. Transactions with related parties have been carried out on usual commercial terms. One of the company’s related parties is Board member Samuli Seppälä, who held 40.6% of all shares and votes in
EUR thousand | ||
Sales of goods and services | ||
To key management personnel and their related parties | 47 | 46 |
Purchases of goods and services | ||
From key management personnel and their related parties | 1 | - |
EUR thousand | ||
Closing balances from purchases/sales of goods/services | ||
Trade receivables from key management personnel and their related parties | 8 | 7 |
Trade payables to key management personnel and their related parties | - | - |
LONG-TERM INCENTIVE PLANS
The Board of Directors of
In the new Performance Matching Share Plan 2020–2022, a person may earn a number of matching shares based on their investment in Verkkokauppa.com Oyj’s shares and the Total Shareholder Return (TSR) of the share. The Performance Matching Share Plan includes one performance period, calendar years 2020–2022. The reward to be paid to participants is based on the achievement of the required TSR levels set by the Board of Directors. A maximum of three performance-based matching shares is paid for each allocated share. The prerequisite for participation and receiving of reward is that a participant allocates freely transferable company shares, held by them, in the plan, or acquires the company’s shares up to the number determined by the Board of Directors. Furthermore, payment of reward is based on the participant’s valid employment or service upon reward payment. As a rule, no reward will be paid if a participant’s employment or service ends before the reward payment.
The target group of the plan consists of eight persons, the CEO and all other members of the Management Team. In accordance with the terms of the plan each participant is entitled to get a gross number of shares. However, a net number of shares will be paid to the participant after the company has withheld and paid the value of a part of the shares to cover the employee’s tax obligation. The rewards to be paid on the basis of the plan correspond to the value of approximately 540,000
1.10 Guarantees and commitments
EUR thousand | ||
Collateral given for own commitments | ||
Guarantees | 2,258 | 2,652 |
Other commitments and contingent liabilities | 11 | 11 |
Guarantees are related to rent guarantees, the comprehensive guarantee for Finnish Customs and documentary credits. Other commitments are related to off-balance residual values.
1.11 IFRS Standards not yet effective
There are no IFRS, IFRIC interpretations, annual improvements or amendments to IFRS that are not yet effective that would be expected to have a material impact on the company’s financial statements.
1.12 Subsequent events
There are no other subsequent events that differ from usual business events, after the reporting period.
ADDITIONAL INFORMATION
Quarterly income statement
7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | |
EUR thousand | 2020 | 2020 | 2020 | 2019 | 2019 |
Revenue | 129,321 | 123,050 | 125,255 | 159,908 | 120,560 |
Other operating income | 127 | 116 | 127 | 153 | 118 |
Materials and services | -108,394 | -101,645 | -105,835 | -137,710 | -101,611 |
Employee benefit expenses | -8,105 | -8,417 | -8,619 | -9,115 | -7,614 |
Depreciation and amortization | -1,228 | -1,246 | -1,230 | -1,246 | -1,255 |
Other operating expenses | -6,116 | -7,503 | -6,280 | -7,523 | -5,866 |
Operating profit | 5,606 | 4,356 | 3,418 | 4,467 | 4,333 |
Finance income | 5 | 2 | 2 | 2 | 59 |
Finance costs | -339 | -359 | -362 | -421 | -391 |
Profit before income taxes | 5,272 | 3,999 | 3,057 | 4,048 | 4,000 |
Income taxes | -1,055 | -701 | -613 | -812 | -797 |
Profit for the period | 4,218 | 3,298 | 2,444 | 3,236 | 3,203 |
Profit for the period attributable to | |||||
Equity holders | 4,218 | 3,298 | 2,444 | 3,236 | 3,203 |
Earnings per share calculated from the profit attributable to equity holders | |||||
Earnings per share, basic and diluted (EUR) | 0.09 | 0.07 | 0.05 | 0.07 | 0.07 |
Alternative performance measurement
In this Interim Financial Report,
Alternative performance measures do not substitute the IFRS key ratios.
2020 | 2019 | |||||||||
Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2019 | |
Revenue, thousand euros | 125,255 | 123,050 | 129,321 | 115,797 | 107,848 | 120,560 | 159,908 | 504,113 | ||
Gross profit, thousand euros | 19,420 | 21,405 | 20,928 | 17,399 | 15,327 | 18,949 | 22,198 | 73,874 | ||
Gross margin-% | 15.5% | 17.4% | 16.2% | 15.0% | 14.2% | 15.7% | 13.9% | 14.7% | ||
EBITDA, thousand euros | 4,648 | 5,602 | 6,834 | 3,581 | 1,448 | 5,588 | 5,713 | 16,330 | ||
EBITDA-% | 3.7% | 4.6% | 5.3% | 3.1% | 1.3% | 4.6% | 3.6% | 3.2% | ||
Operating profit, thousand euros | 3,418 | 4,356 | 5,606 | 2,301 | 190 | 4,333 | 4,467 | 11,290 | ||
Operating profit-% | 2.7% | 3.5% | 4.3% | 2.0% | 0.2% | 3.6% | 2.8% | 2.2% | ||
Comparable operating profit, thousand euros | 3,754 | 4,826 | 5,606 | 2,301 | 190 | 4,333 | 4,467 | 11,290 | ||
Comparable operating profit-% | 3.0% | 3.9% | 4.3% | 2.0% | 0.2% | 3.6% | 2.8% | 2.2% | ||
Profit for the period, thousand euros | 2,444 | 3,298 | 4,218 | 1,525 | -154 | 3,203 | 3,236 | 7,810 | ||
Interest-bearing net debt, thousand euros | -22,339 | -13,024 | -14,654 | -8,869 | -895 | -10,078 | -19,061 | -19,061 | ||
Investments, thousand euros | 266 | 396 | 284 | 95 | 750 | 28 | 372 | 1,245 | ||
Equity ratio, % | 24.5% | 27.4% | 25.9% | 26.5% | 27.7% | 25.6% | 23.4% | 23.4% | ||
Gearing, % | -60.8% | -35.8% | -38.3% | -24.0% | -2.6% | -28.4% | -52.1% | -52.1% | ||
Personnel at the end of period* | 693 | 747 | 700 | 657 | 731 | 688 | 758 | 758 | ||
Basic earnings per share, euros | 0.05 | 0.07 | 0.09 | 0.03 | 0.00 | 0.07 | 0.07 | 0.17 | ||
Diluted earnings per share, euros | 0.05 | 0.07 | 0.09 | 0.03 | 0.00 | 0.07 | 0.07 | 0.17 | ||
Number of issued shares, 1,000 pcs | 45,065 | 45,065 | 45,065 | 45,065 | 45,065 | 45,065 | 45,065 | 45,065 | ||
Number of treasury shares, 1,000 pcs | 73 | 353 | 358 | 57 | 101 | 91 | 81 | 81 | ||
Weighted average number of shares outstanding, 1,000 pcs | 44,987 | 44,971 | 44,952 | 45,004 | 44,964 | 44,944 | 44,984 | 44,984 | ||
Diluted weighted average number of shares outstanding, 1,000 pcs | 44,987 | 44,971 | 44,952 | 45,096 | 45,058 | 45,058 | 45,042 | 45,042 |
*The number of personnel includes both full- and part-time employees.
Formulas for key ratios
DEFINITIONS | BASIS OF ALTERNATIVE PERFORMANCE MEASURES ADOPTED | ||
GROSS PROFIT | Revenue – materials and services | Gross profit shows the profitability of the sales | |
GROSS MARGIN, % | (Revenue – materials and services) / Revenue | x 100 | Gross margin measures the profitability of the sales of |
EBITDA | Operating profit + depreciation + amortization | EBITDA shows the operational profitability | |
EBITDA, % | (Operating profit + depreciation + amortization) / Revenue | x 100 | EBITDA measures the operational profitability of |
OPERATING PROFIT | Result for the period before income taxes and net finance income and costs | Operating profit shows result generated by operating activities | |
OPERATING MARGIN, % | Operating profit / Revenue | x 100 | Operating margin measures operational efficiency of |
ITEMS AFFECTING COMPARABILITY | Material items which are not part of normal operating activities such as expenses related to possible transfer to official list of Nasdaq Helsinki, restructuring costs including workforce redundancy and other restructuring costs, impairment losses of fixed assets, gain or losses recognized from disposals of fixed assets/businesses, transaction costs related to business acquisition, compensations for damages and legal proceedings | ||
COMPARABLE OPERATING PROFIT | Comparable operating profit is profit adjusted with items affecting comparability | Comparable operating profit allows comparison of operating profit in different periods without the impact of extraordinary items not related to normal business operations | |
COMPARABLE OPERATING PROFIT MARGIN % | Comparable operating profit / revenue | x 100 | Comparable operating margin measures comparable operational efficiency of |
EQUITY RATIO, % | Total equity / Balance sheet total – advance payments received | Equity ratio measures Verkkokauppa.com’s solvency, ability to bear losses and ability to meet commitments in the long run | |
INTEREST-BEARING NET BEDT | Lease liabilities -cash and cash equivalents | Interest-bearing net debt measures Verkkokauppa.com’s indebtedness | |
GEARING, % | Lease liabilities – cash and cash equivalents/ Total equity | x 100 | Gearing measures the relation of equity and interest-bearing net debt of |
INVESTMENTS | Increases in intangible assets, property, plant and equipment during the financial period | Investments provides additional information regarding operating cash flow demands | |
EARNINGS PER SHARE, BASIC | Profit for the period attributable to equity holders of the company / Weighted average number of shares outstanding | Earnings per shares measures the profit for the period attributable to equity holders of the company | |
EARNINGS PER SHARE, DILUTED | Profit for the period attributable to equity holders of the company / Weighted average number of shares outstanding + dilutive potential shares |
Reconciliation of alternative key ratios
7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | |
EUR thousand | 2020 | 2019 | 2020 | 2019 | 2019 |
Operating profit | 5,606 | 4,333 | 13,380 | 6,823 | 11,290 |
- advisory costs related to transfer to official list of Nasdaq Helsinki | - | - | 807 | - | - |
Comparable operating profit | 5,606 | 4,333 | 14,187 | 6,823 | 11,290 |
Attachment
- Verkkokauppa.com Oyj_IFRS Interim report January -
September 2020
© OMX, source