Q4-22: Top line performance hampered by challenging markets, positive gross margin trend

Sandefjord, 9 February 2023: In the fourth quarter, the Komplett Group made good progress in its efforts to secure a healthy inventory position, improve working capital and reduce operating expenses. Going into 2023, the top line continues to be impacted by a challenging market while a more positive trend is expected for the gross margin.

In the fourth quarter, the Group’s top line performance continued to be impacted by reduced consumer sentiment. Total revenue amounted to NOK 4 657 million compared with NOK 3 292 million in the corresponding period of 2021. NetOnNet contributed NOK 1 821 million of the revenue. Adjusted EBIT amounted to NOK 70 million in the fourth quarter of 2022 compared with NOK 118 million in the same period of 2021.

During the quarter, the Group’s inventory reached a healthy level, which translated into an improvement in the gross margin of one percentage point compared to the previous quarter. Good cost control and healthy inventory position are expected to drive margin improvement moving forward. The Group’s profitability will also benefit from synergy realisation and other initiatives to reduce operating costs.

In 2022, the Group’s revenues reached NOK 14.6 billion, corresponding to a 32.4 per cent growth from the year before. Revenues for 2022 included NOK 4 784 million from NetOnNet. Adjusted EBIT for the full-year period came in at NOK 87 million, compared with NOK 388 million one year earlier.

In 2022, Komplett successfully reduced its inventory by NOK 600 million. For the full-year period, the Group reports a cash flow from operations of NOK 1.1 billion driven by material working capital improvements.

In the fourth quarter of 2022, the Group secured new long-term credit facilities and completed a private placement of new shares in the amount of NOK 1 billion. The net proceeds and funds made available under the new credit facilities will enable the Group to refinance its existing bridge loan and continue to execute its strategy as a leading online-first electronics and IT products retailer.

Komplett has also continued to work towards realising cost synergies following the combination with NetOnNet. Supplier negotiations are yielding the expected synergies, and cost synergies of at least NOK 200 million annually are expected to have a full effect within 24 months of the transaction, of which NOK 100 million is expected as of 2023. Several initiatives have also been initiated in NetOnNet to reduce operating costs by approximately SEK 70-90 million at a gross level from 2023.

“During 2022, we succeeded in reducing our inventory by NOK 600 million. Supported by good cost control and a healthy stock composition, improved gross margin performance is expected going forward. As we enter 2023, we expect consumer demand to remain challenging, but over time, online trade is expected to return to its attractive growth trajectory.

“With a solid and scalable business model in place, our long-term profitability will benefit from synergy realisation and other initiatives to reduce operating costs. We are also confident that our online-first business model will serve us well and partly outweigh the negative cost effects of market inflation. As inventory positions and market prices normalise across the industry, we expect our gross margin to continue to develop positively,” said Lars Olav Olaussen, CEO of Komplett.

The presentation material and report for the fourth quarter of 2022 are attached to this notice.

CEO Lars Olav Olaussen and CFO Krister Pedersen will present the results today at 09.00 CET at Haakon VIIs gate 2, Oslo.

The event will also be available via a live webcast at the following link:

https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20230209_3

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:

Krister A. Pedersen, CFO
Krister.Pedersen@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.