Komplett ASA

Investor Presentation • Oct 25, 2024

Third quarter 2024

Jaan Ivar Semlitsch, CEO Thomas Røkke, CFO

25 October 2024

Disclaimer

This presentationhas been prepared by Kompany') solely for information purposes. The presentation does not onstitute an invitation or offer to acquire, purchase or subscribe for securities.

This presentation includes forward-looking statements which are based on our current expections about future events. All statements other than statements of historical facts including statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and objectives for future operations, including our plans for future costs savings and se deemed to be forward-looking statements. Words such as "believe," expect", "anticipate","may," "assume," "plan," "intend," "isk" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on crumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place under reliance on these forward-looking say forwardlooking statements are made only as of this notice, and we do not intend and do not assume any obligation to update any statements set forth in this notice.

03-24 Highlights Limited improvements in market dynamics, improving outlook

Continued difficult environment in key markets and categories

• o Limited improvements in market dynamics and product cycles
  • o The market in Sweden remains particularly soft, whilst demand in Norway varies between categories
  • o Volatile development over the quarterly period
• o Core computing and gaming categories have remained weak for a longer period than expected
  • o Although with easing headwinds and increasing positive effects from own sales initiatives

Competition remained intense

• o Requiring continued price investments and campaign activities to defend market positions
• Market outlook supported by improving household economics and more positive product cycles

03-24 Key financials Continued sales and marqin weakness negatively affected the operating results

• · Limited improvements in market dynamics resulted in a 3.1 per cent revenue decline (-5.8 per cent in constant currency)
• o Campaign activities and price investments to defend market positions led to a 0.8 ppt gross margin decline
• Operating costs +0.6 per cent (LFL, excl. depr.), as cost increases, including marketing, were mostly offset by cost measures
• o Weak sales in core categories and margin effects resulted in an EBIT adj. of negative NOK 46 million
• o Working capital continues to benefit from disciplined inventory management and improved supplier terms
• o Continued solid and improved liquidity as well as qood headroom against financial covenants in the quarter
• o initiatives and cost benefits from consolidation

Q3-24 Key initiatives Good progress on strategic agenda presented at the capital markets day

net mnet

• o Good traction from recent store re-openings - NetOnNet is gaining ground in Norway
  • o Two large cities, Bergen and Södertälje, signed to be opened in Q4
  • o Good growth and market share gain for NetOnNet in Norway
• o More active price management and better online check-out functionalities

• o Extended product range for private label and components
• Good growth in Services
• o Implementing further cost-saving measures
• o Well set for 04 with better range and refined store concept

• o Increased production capacity in Sandefjord for the private label Komplett PC range
  • o Shipping to all our internal brands and to a larger third-party retailer outside our core markets
• o Expanding supplier and product offerings in MDA & SDA
• Improved customer journey with new add-on features, such as services and attachments
• o Successful launch of new B2B loyalty programme

Utilising our group-wide platform for sharing functions and capabilities

• o New supplier agreements renegotiated with improved credit and payment conditions across the group
• o Supplier network expanded to provide a wider range of products and services in adjacent categories
• o Efforts to use scale to achieve cost benefits further accelerated including consolidation of logistics in Sweden
  • o Peak planning (04) on track with a well-managed stock situation

Financial performance

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Thomas Røkke, CFO

Key financials Results impacted by product cycles, weak markets and strong competition

• o 3.1 per cent revenue decline driven by weak demand in core categories
  • o
  • o and phasing of deliveries

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• o Campaign activities and price investments to defend market positions
• o Select inventory sell-downs in relation to establishing new category assortments across the group
• o Increase in operating expenses driven by FX and depreciation
  • o Cost inflation, increased marketing spend, and growth initiatives largely offset by cost reductions
  • o investments

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• o Weak sales development in core categories
• o

B2C Easing headwind in core categories

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• Norway -3.4 per cent, Sweden -8.0 per cent and Denmark O +28.7 per cent (LFL, YoY)
• o Indications of a gradual improvement in household economics, but this has not yet led to increased spending
• o Core product groups, such as PC and gaming, are experiencing less year-over-year headwind than in recent periods

o

• o effects from rebalanced inventories
• o Positive impact from commercial and supplier efforts

o EBIT margin ended at negative 1.1 per cent

• o Cost increases related to store openings and expansions as well as marketing investments have been effectively countered by measures to reduce cost
• o The operating cost percentage increased to 15.9 per cent due lower sales volumes, from 14.5 per cent in 03-23

B2B Cautious spending pattern, improved outlook

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• Norway -11.2 per cent, while Sweden +16.0 per cent LFL O
• o agreement for educational PCs
• o Cautious spending patterns continued to impact demand from smaller SME customers
• o new technology moving forward

o Gross margin impacted by price competition (-0.5 pp)

• o Price competition and industry-wide campaign activities, as well as category mix effects from telecom representing a higher share of revenues
• o Partly offset by sourcing and commercial efforts, as well as the discontinuation of the agreement for educational PCs

ം EBIT decline of NOK 15 million despite cost measures

o Cost increase from marketing investments, strengthening of sales resources and higher depreciation costs

IRONSTONE

Distribution Softer demand from SME segment and adverse mix effects

o

• o cent, while Sweden had a 4.5 per cent revenue decline LFL
• o The sales decline was a combination of market weakness and a shift in the phasing of deliveries into 04
• Small-and medium-sized enterprises continue to show cautious spending patterns, leading to softer demand

· Gross margin decline of 0.4 pp reflecting:

• o Negatively impacted by product and customer mix effects
• o Partly offset by better sourcing terms, improved inventory quality and operational efficiencies

ം EBIT decline of NOK 7 million driven by:

o Cost increases driven by higher depreciation costs and a slight increase in other operating expenses

Gitegra

Cash flow & working capital Net working capital reduction contributing to positive cash flow

Cash flow	03-24	03-23	Y 10-24	Y TD 25	FY-25
Net cash flow from operating activities	283	186	419	615	866
Net cash used in investing activities	-31	-39	-103	-124	-208
Net cash (used in)/from financing activities	-103	-321	-289	-473	-578
Net change in cash and cash equivalents	148	-173	26	18	81
Net working capital		03-24	03-25		FY-23
Inventory		2 108	2 108		2 194
l rade receivables - regular		193		236	245
Irade payables		-1 682	-1 407		-1 563
Other assets and liabilities		-272	-653		-623
Net working capital		346		284	253

• o Net operating cash flow in the period reflecting an increase in trade payables of NOK 358 million, partly offset by a build-up of inventory of NOK 205 million and an increase in trade receivables of NOK 39 million
• o Net cash flow used in investing activities during the period mainly related to property, plant and equipment for a new store and improvements of the IT infrastructure
• o principal and interest paid on lease liabilities as well as net interest paid on loans as well as facility rebalancing
• o by NOK 86 million since year-end. Increase in payables also reflecting improved payment terms
• o Net working capital continues to benefit from disciplined inventory management and improved supplier terms. Other assets and liabilities reduced from reclassification of parts of Swedish tax deferral amount

Financial position Continued good liquidity and headroom against covenants in the quarter

• since 02 and in line with 03-23
  • o included a discontinued facility of SEK 100 million
  • o Swedish tax deferral granted 36 months repayment scheme by the authorities in line with market practice

o Net interest-bearing debt increased NOK 191 million Yo Y

Mainly reflecting the extended repayment plan for the Swedish tax deferment scheme (NOK 304 million)

o Leverage ratio of 3.9x, with good headroom to 03 covenants

Covenant trajectory allowing for a leverage ratio up to 4.5x at 03, and 4.0x at year-end

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o Compared with 45.9 per cent one year earlier; mainly due to impairments and de-risking of balance sheet in 04-23

Summary and outlook

Jaan Ivar Semlitsch, CEO

Key takeaways Prolonged market weakness from cautious consumer spending, intense competition and limited new product launches

• o Innovation-led product cycles, weak markets and strong competition have extended longer than anticipated earlier in the year
• o Continued campaign activities and price investments to meet strong competition and defend market positions
• o inflation, marketing investments and growth initiatives in constant currency
• o Weak sales in core categories and margin effects resulted in an EBIT adj. of negative NOK 46 million
• o Continued solid and improved liquidity as well as qood headroom against financial covenants in the quarter

Outlook

Good progress with strategic initiatives in anticipation of a market recovery

• o Strong commercial plans for peak season and inventory calibrated to ensure the right availability
• o Competition is likely to remain strong, which will require price investments and campaigns to defend market positions
• o Improved consumer sentiment and more favourable product cycles to gradually translate into increased demand
• o Commercial initiatives, including renegotiated supplier agreements, are expected to gain importance over time
• o continues to align its cost base to the market environment
• o Committed to maintaining an industry-leading cost position, strong brand recognition, and to leverage the group's efficient and scalable platform

Utilising a broad media mix to stay top of mind among consumers before peak season

Airfryer

TV

Gaming

Alternative Performance Measures (APMs)

The APMs used by Komplett Group are defined as set out below:

Reconciliation

Gross profit: Total operating revenue less cost of goods sold. The group has presented this item because it considers it to be auseful measure to show the management's view on the overall picture of profit generation before operating costs in the group's operations.

Gross margin: Gross profit as a percentage of total operating revenue. The group has presented this item because it considers it to be a useful measure to show the management's view on the efficiency of gross profit generation of the group's operations as a percentage of total operating revenue.

Reconciliation

Amounts in NOK million	03	03	YTD	YTD	FY
	2024	2023	2024	2023	2023
Total operating revenue	3755	3874	10 419	11127	15861
- Cost of goods sold	(3 280)	(3 350)	(9009)	(9580)	(13650)
= Gross profit	476	524	1410	1547	2 211
Gross marqin	12.7 %	13.5 %	13.5 %	13.9 %	13.9 %

Total operating expenses (adjusted): Total operating expenses less cost of goods sold and oneoff cost. The group has presented this item because the management considers it to be a useful measure of the group's efficiency in operating activities.

Operating cost percentage (adj.): Total operating expenses less cost of goods sold and one-off cost as a percentage of total operating revenue. The group has presented this item because the management considers it to be a useful measure of the group's efficiency in operating activities.

Reconciliation

Amounts in NOK million	03 2024	03 2023	YTD 2024	YTD 2023	FY 2023
Total operating revenue	3 755	3874	10 419	11127	15861
Total operating expenses	3806	3849	10 554	11 108	16 746
- Cost of goods sold	(3 280)	(3 350)	(80008)	(9580)	(13650)
- One-off cost	(5)	(13)	(12)	(29)	(41)
- Impairment					(883)
= Total operating expenses (adj.)	521	485	1534	1499	2073
Operating cost percentage	13.9 %	12.5 %	14.7%	13.5 %	13.1 %

EBITDA excl. impact of IFRS 16: Derived from financial statements as the sum of operating result (EBIT) plus the sum of depreciation and amortisation for the segments B2C, B2B, Distribution and Other. The group has presented this item because it considers it to be a useful measure to show the management's view on the overall picture of operational profit and cash flow generation before depreciation and amortisation in the group's operations, excluding any impact of IFRS 16.

03 03 Amounts in NOK million 2024 2023

135	108	1120
	(13)	(11)

YTD

2023

FY

2023 - -

YTD

2024

EBIT adjusted: Derived from financial statements as operating result(EBIT) excluding one-off costs. The group has presented this item because it considers it to be a useful measure to show the management's view on the efficiency in the profit generation of the group's operations before one-off items.

Reconciliation
Amounts in NOK million	03 2024	03 2023	YTD 2024	YTD 2023	FY 2023
Total operating revenue	3755	3874	10 419	11127	15861
EBIT	(51)	26	(136)	19	(885)
+ One-off cost	ട	13	12	29	41
+ Impairment					983
= EBIT adjusted	(46)	39	(124)	48	139
EBIT marqin adjusted	(1.2%)	1.0 %	(1.2%)	0.4 %	0.9 %

EBIT margin adjusted: EBIT adjusted as a percentage of total operating revenue. The group has presented this item because it considers it to be auseful measure to show the management's view on the efficiency in the profit generation of the group's operations before one-off items as a percentage of total operating revenue.

EBIT margin: Operating result (EBIT) as a percentage of total operating revenue. The group has presented this item because it considers it to be a useful measure to show the management's view on the efficiency in the profit generation of the group's operations as a percentage of total operating revenue

Reconciliation

Amounts in NOK million	03	03	מד צ	YTD	FY
	2024	2023	2024	2023	2023
Total operating revenue	3755	3874	10 419	11127	15861
EBIT	(51)	26	(136)	19	(885)
EBIT margin	(1.4%)	0.7%	(1.3%)	0.2 %	(5.6%)

Net working capital: Working capital assets, comprising inventories, trade receivables, trade

as other current liabilities in acordance with le the part which has quipment, less changen net working and trade reed payment maturity of more than 12 morths is classified as other and arrangement arrangements. The group has presented this it to be a considers it to be a useful indicator of the groups of the day-to-day corational useful measur of the group's operation. Operating free cash flow is activities. The Swedish subsidiaries have during C 2024 ben grannet affected by the aformentioned reclassification of the Sweish deferred to cher norplan under the Swedish tax deferred payment rules. As a consequence, NOK 304 million have been current liabilities.

have he may be new research as a based by and it it it is is as the

reclassified to other non-current liabilities, reducing net working capital and increasing net interest bearing debt. The remaining NOK 152 million, which matures in less than 12 months, continue to be Reconciliation shown as part of other current liabilities.

Net interest-bearing debt: Interest-bearing liabilities less cash and cash equivalents. The group has presented this item because the management considers it to be auseful indicator of the group's indebtedness, financial flexibility and capital structure. As mentioned above interest-bearing debt only includes the deferred Swedish tax liability with maturity above 12 months. The net interestbearing debt incl. IFRS 16 is a useful measure as indebtedness, including the lease liabilities from IFRS 16, is relevant for the covenants of the group's credit facilities.

Reconciliation

Amounts in NOK million	03 2024	03 2023	YTD 2024	OTY 2023	FY 2023
Long-term loans	800	800	1104	800	800
+ Other non-current liabilities	304
+ Short-term loans		16		16
- Cash/cashequivalents	(256)	(168)	(256)	(168)	(230)
= Net interest-bearing debt	848	649	848	649	570
+ IFRS 16 liabilities	530	538	530	538	608
= Net int.bear. debt incl. IFRS 16	1378	1187	1378	1187	1178

Amounts in NOK million	03 2024	03 2023	YTID 2024	Y TO 2023	FY 2023
EBITDA excl IFRS 16	(8)	57	(14)	115	218
- Investments	(31)	(ਤੇਰ)	(109)	(128)	(212)
+/- Change in net working capital	(91)	111	(ਰਤੋ)	361	392
+/- Reclassified to other non-current liabilities	304	-	304
+/- Change in deferred payment	7	2	48	(6)	12
= Operating free cash flow	180	131	134	342	410