Q2-22: Attractively positioned for long-term growth - recent performance hampered by challenging markets

Sandefjord, 19 July 2022: In the second quarter and first half of 2022, the Group's financial performance was impacted by a temporary market decline in the Nordic B2C electronics industry and fluctuations in consumer behaviour. Despite these market challenges, the Group has delivered growth of 12 per cent yearly (CAGR) since 2019 from organic expansion.

Komplett Group's total revenue, including NetOnNet, increased by 48 per cent to NOK 3 570 million in the second quarter. Excluding the contribution from NetOnNet, the Group's revenue decreased by 14 per cent, mainly due to challenging market conditions which are mainly impacting  the B2C segment.

Operating revenue for the B2C segment, including NOK 1 500 million revenue from NetOnNet, increased to NOK 2 504 million in the quarter, compared with NOK 1 317 million for the same period in 2021. Excluding NetOnNet, revenues declined by 27 per cent, mainly due to conservative consumer spending and lower demand in core categories.

The B2B segment continued its growth trajectory with operating revenue reaching NOK 351 million compared with NOK 330 million in 2021. The Distribution segment grew from NOK 708 million in 2021 to NOK 713 million in the second quarter of 2022.

As a consequence of lower consumer demand, the entire industry has experienced inventory build-up following a period of historically high consumer demand. To offset this, the Group has successfully reduced inventory by NOK 500 million since the start of 2022, of which a reduction of approximately NOK 350 million took place in the second quarter. This work is expected to continue in the third quarter of 2022.

Volume decline in the B2C segment in parallel with added pressure on gross margins from price pressure across the industry has been the main driver behind the Group's EBIT result of negative NOK 10 million, which corresponds to a negative EBIT margin of 0.3 per cent. For the first half of 2022, EBIT was NOK 27 million compared to NOK 186 million last year, corresponding to an EBIT margin of 0.4 per cent.

"The first half of 2022 can be characterised by challenging market conditions following periods of historic growth. This has led to lower demand and inventory build-up across the industry, which has put pressure on our margins. In response to this, we have worked diligently to reduce our inventory levels and are pleased to see that these efforts have resulted in a NOK 500 million reduction in trade stock since the start of the year. I am also pleased to report that despite operating in an inflationary environment, we have achieved a net improvement in operating cost in the quarter, which supports our industry-leading opex share," said Lars Olav Olaussen, CEO of Komplett.

Since the completion of the NetOnNet acquisition in April this year, Komplett Group has also worked towards realising cost synergies through supplier negotiations. Overall, the transaction is expected to enable cost synergies of at least NOK 200 million, and the work is well underway. NetOnNet has been consolidated into Komplett's financial statements as of 1 April 2022 and is reported as a part of the B2C segment as of the second quarter of 2022.

"Reflecting on the last six months, we are confident that the current instability is temporarily and that Komplett is attractively positioned for long term growth. We have worked hard to attain our industry-leading cost position and will continue working towards our growth prospects in the coming quarters. I am very proud of the team, which has proven our ability to execute and follow through on strategic objectives while adapting to a turbulent market environment", added Lars Olav Olaussen. 

The presentation material and report for the second quarter and first six months of 2022 are attached to this notice.

CEO Lars Olav Olaussen and CFO Krister Pedersen will present the results on 19 July 2022 at 09.00 CEST at Haakon VIIs gate 2, Oslo.

The event will also be available via a live webcast at the following link: https://channel.royalcast.com/landingpage/hegnarmedia/20220719_2/

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:

Kristin Hovland, Head of Communication
Kristin.Hovland@komplett.com

Krister A. Pedersen, CFO
Krister.Pedersen@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 efficiency and scalable business model that supports costs leadership and enables a competitive product offering.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.