Release Date: July 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sequential improvement in monthly performance within the quarter, with a reduction in negative growth from -22% in April to -11% in June.
- Customer satisfaction has improved, with a review score of 4.2 compared to 3.8 last year.
- Successful implementation of a new merchant agreement to enhance customer satisfaction and manage underperforming merchants.
- Positive momentum in non-Swedish markets, particularly with the Fyndiq segment showing steady performance.
- Platform migration to Phoenix is on track, expected to enable future cost savings and operational efficiencies.
Negative Points
- Overall negative EBITDA of SEK9.4 million for the quarter, with adjusted losses of SEK3.5 million.
- No top-line growth and a year-over-year decline in GMV by 14%, despite the addition of Fyndiq.
- Higher marketing costs and operational expenses, including costs related to the Malmo office closing and platform migration.
- Increased risk in Q3 sales due to the ongoing platform migration, which may cause bugs and operational hiccups.
- Challenges in supply acquisition and the need for significant improvements in supply to drive future growth.
Q & A Highlights
Q: Can you clarify the performance of Fyndiq and its contribution to the overall results?
A: Fyndiq segment was only included from April 12. Operationally, Fyndiq is stable and performing in line with last year, showing positive momentum in non-Swedish markets. We are optimistic about returning to growth territory within this segment for the remainder of the year. (Carl Andersson, CFO)
Q: What are the main factors contributing to the elevated OpEx in the quarter, and when can we expect these costs to come down?
A: The elevated OpEx is due to dual system costs, additional staff hiring, interim consultants, and tech consulting. These costs are expected to decrease significantly by Q4 as the platform migration completes and we transition to full-time employees. (Carl Andersson, CFO)
Q: Are you seeing positive GMV growth in Fyndiq, and what are the expectations for Cdon's GMV in the second half of the year?
A: Yes, we are seeing positive year-over-year increases in GMV for Fyndiq in individual months. For Cdon, we have a more positive view for the second half of the year, driven by seasonality and improvements in supply acquisition. However, there is some risk due to the ongoing platform migration. (Fredrik Norberg, CEO)
Q: Can you provide more details on the nonrecurring costs and their impact on EBITDA?
A: The reported EBITDA included SEK4 million in nonrecurring costs related to the Malmo office closure. For the full year, we expect nonrecurring costs to be in the range of SEK7 million to SEK9 million, with these costs being front-loaded. (Carl Andersson, CFO)
Q: What steps have you taken to mitigate the effects of the Google algorithm change on site traffic, and when do you expect to see improvements?
A: We have implemented several changes to improve SEO, with more significant changes planned post-migration. The main factor affecting SEO is the lack of supply, which we are addressing. We expect to see positive effects from these changes after the summer. (Fredrik Norberg, CEO)
Q: How is the merchant base evolving, and what are your expectations for Q3?
A: We have made progress in refining our strategy and processes for identifying and onboarding merchants. We expect to see a growing merchant base in Q3, with more merchants onboarded each month. (Fredrik Norberg, CEO)
Q: Can you explain the difference in GPAM margins between Fyndiq and Cdon?
A: The improvement in Fyndiq's GPAM margins is due to a change in shipping fees implemented last year. Cdon saw a commission increase in Q1 2023, causing a timing effect. We expect these levels to remain steady going forward. (Carl Andersson, CFO)
Q: How do you view the overall online market development this year, and what is your outlook for Cdon?
A: We believe we are trailing behind the market average and have more internal issues to address. However, we are confident that the second half of the year will be more positive, driven by improvements in supply and organizational changes. (Fredrik Norberg, CEO)
Q: Will the platform migration improve SEO capabilities and response to Google algorithm changes?
A: Yes, the migration will improve our ability to act on Google algorithm changes faster and more efficiently, as we will only need to make changes in one platform instead of two. This will also enhance our overall SEO performance. (Fredrik Norberg, CEO)
Q: What is the impact of the unrecognized GMV in Q2 on EBITDA?
A: We had an unusually low shipment volume at the end of Q2, resulting in SEK5 million to SEK10 million of GMV being carried into Q3. This should contribute positively to Q3 EBITDA. (Carl Andersson, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
