Komplett ASA

Earnings Release • Jul 19, 2022

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

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

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.