Q1-24: A difficult start to the year, with unchanged long-term potential
Sandefjord, 24 April 2024: The financial results for the first quarter have been impacted by declining demand and increasing competition across the group’s key markets and categories. Nevertheless, Komplett Group made good progress with its commercial and cost measures and continued to improve its gross margin.
The slow-down in sales starting in December 2023 continued, as anticipated, into the first quarter. The decline was driven by continued market challenges, with subdued demand and challenges in several of the group’s core categories, restraining revenue growth across all the group’s segments and markets. During the period, the competitive environment in the industry has intensified further leading to increased campaign activity and margin pressure.
As a consequence of the challenging demand environment, total operating revenue decreased by 10.3 per cent in the first quarter of 2024, from NOK 3 618 million to NOK 3 245 million. Through its commercial and sourcing efforts, the group’s gross margin continued to improve and reached 15.0 per cent in the first quarter, corresponding to an increase of 0.9 percentage points from 14.1 per cent in the same period of 2023.
Sales decline, in combination with a cost inflationary environment, resulted in a negative adjusted EBIT result of NOK 40 million. Lower profitability has led to a temporarily elevated leverage ratio for the group, but the group’s liquidity and financial position remain controlled.
Adjusted for currency effects, the group’s operating expenses remained relatively stable as higher marketing investments and general cost inflation were largely counteracted by measures to proactively manage the cost base.
Actions to improve operational and financial performance have been reinforced across the group in order to proactively manage the negative impact from volume shortfall, continued inflationary pressure as well as costs associated with expansion and store openings. The impact from these measures is expected to increase throughout the year.
“In the first quarter, we made good progress with our long-term growth and profitability initiatives, but challenging markets continue to impact our financial performance in the short term. Indications of improved consumer confidence are expected to have a positive impact in the second half of the year, and our cost measures and commercial initiatives are expected to have an increasing effect throughout the year,” says Jaan Ivar Semlitsch, President and CEO of Komplett ASA.
“We are mindful of making the right choices not only in a short-term perspective to protect our margins, but also to strengthen our position in the longer term. As online-first pioneers with presence in categories with short innovation and replacement cycles, we are well-positioned in the fastest growing sales channels and categories,” Semlitsch adds.
The presentation material and report for the first quarter of 2024 are attached to this notice.
Jaan Ivar Semlitsch, CEO and Thomas Røkke, CFO, will host a presentation of the results today at 09.00 CEST at Haakon VIIs Gate 2, Oslo.
The event will also be made available via a live webcast. Please use the following link to register and view the webcast:
https://channel.royalcast.com/landingpage/hegnarmedia/20240424_1/
Questions will be addressed towards the end of the presentation. A recorded version of the webcast will be available shortly after the webcast has concluded.
For further inquiries, please contact:
Thomas Røkke, CFO
Thomas.Rokke@komplett.com
Kristin Hovland, Head of Communication
Kristin.Hovland@komplett.com
About Komplett ASA
Komplett Group is a leading online-first electronics and IT products retailer, operating in Norway, Sweden and Denmark. Serving customers in the B2C, B2B and distribution markets, the Group is deeply focused on delivering best-in-class customer experience, built through decades of knowhow, expertise and deep customer commitment. Komplett Group operates an efficient and scalable business model that supports cost leadership and enables a competitive product offering.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) Article 7 and is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Elise Heidenreich, Investor Relations adviser, at the date and time as set out above.