Elektroimportøren AS — Earnings Release 2024

Nov 7, 2024

Elektroimportøren

3rd quarter presentation

7 November 2024

Andreas Niss CEO Jørgen Wist CFO

Disclaimer

This presentation has been prepared by Elektroimportøren AS (the "Company") solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for shares. Certain statements included in this presentation contain various forward-looking statements that reflect management's current views with respect to future events and financial and operational performance. The words "believe," "expect," "anticipate," "intend," "may," "plan," "estimate," "should," "could," "aim," "target," "might," or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realised. Factors that could cause these differences include but are not limited to the Company's ability to operate profitably, maintain its competitive position, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, neither the Company nor its subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

Agenda

• Q3 highlights
• Trading summary
• Financials
• Outlook
• Q&A

Q3 highlights

• Revenue of NOK 407 million, up 1.7% from NOK 401 million last year
• Like for like sales, down 1.1%
• Gross margin of 36.7%, up from 35.3% last year
• Operating expenses of NOK 105 million, a reduction of NOK 7 million from NOK 112 million last year. Opex to sales ration of 25.8% (28.0% last year)
• Reported EBITDA of NOK 30 million, up from NOK 28 million last year. Adj. EBITDA NOK 44 million vs. NOK 29 million last year.
• Net profit of NOK 33 million, up from NOK -6 million last year. Net profit increased by NOK 40 million. Adjusted for earn-out release (NOK 44 million) and the additional inventory write down (NOK -13 million), the net profit increased by NOK 9 million compared to last year.

Q3 2024 trading summary

• Group sales varied throughout the quarter. Strong growth in July, more modest growth in August and a slight decline in September
• Smart home products and EV chargers represent the highest growth.
• Successful margin management driving increase of Gross margins in both countries. Rigid cost control continues
• New store opening in the Bergen area in August
• Number of visitors to our physical stores and average basket size are increasing year on year, conversion is slightly down
• Spoton revenue in Q3 of NOK 8 million, same as last year

Elbutik, Sweden

• Actions taken to increase gross margins whilst continuing to grow
• B2B customer offer is working and B2B is now outperforming B2C in Veddesta
• Campaign management, assortment adjustments and correct pricing being our top priorities
• Reported EBITDA of NOK 0 million vs NOK -4 million last year
• Adjusted EBITDA of NOK 1 million vs NOK -3 million last year. Adjustment relates to rent on part of the old warehouse, which is not in use. The rent is monthly NOK 83k.

• Launch of new products in electro materials and heating
• Namron share of business in Norway for Q3 was 34.8% versus 33.0% last year
• Namron sales in Sweden with a share of business of 8.9% in Q3 2024 compared to 5.3% in Q3 2023.

Solar

• Total orders of NOK 3 million in Q3, down -79.3% from last year. Order back log of NOK 4 million end of September.
• Sales have been re-focused to target commercial buildings, while continuing to offer solar to consumers through SpotOn.
• The Group has recognized an additional write-down of NOK 13 million on its Solar inventory, reflecting the challenging market situation. The gross solar inventory value at the end of the quarter was NOK 33 million.
• We are still working on different solutions to reduce the stock of Solar products.

Finance

Revenues

• Total revenue in Q3 was NOK 407 million, up 1.7% from NOK 401 million last year.
• The increase was driven by online revenue in Norway (4.2%), the store in Sweden (44.1%) and revenue from Solar projects which were finalised in the period (Other).
• The like -for -like revenue growth in Norway was -1.1% in the quarter.
• B2C revenue increased by 4.8%, while B2B revenue decreased by 2.2%.

Gross margin

• Gross profit for the quarter was 150 million, up from 141 million last year.
• Gross margin of 36,7%, up from 35.3% last year.
• Higher gross margin resulted from price adjustments.
• Gross margin is also positively affected by increase in share of business of B2C from 51.0% last year to 52.7% this quarter.
• The exchange rate and freight costs continue to keep pressure on the margin, hence we will follow that closely going forward.

OPEX

• Opex to sales ratio was reduced to 25.8% in Q3 (28.0% last year).
• Operating expenses are reduced compared to last year, even with general salary increase and inflation adjustment of costs.
• The group continues to maintain a rigid cost control.

EBITDA

• Reported EBITDA of NOK 30 million, up from NOK 28 million last year. EBITDA margin in Q3 was 7.4%, up from 7.1% last year.
• Adjusted EBITDA of NOK 44 million, up from NOK 29 million last year. Adjusted EBITDA margin in Q3 was 10.9%, up from 7.3% last year.
• Adjustment of NOK 14 million is mainly related to write down of Solar inventory of NOK 13 million, reflecting the challenging market situation.
• We have agreed with DNB to exclude the write -down of solar in the LTM NGAAP EBITDA for the covenant calculation.

Cash Flow

• Cash flow from operations affected by positive EBITDA and reduction working capital in the quarter.
• Cash flow from investments are mainly maintenance CAPEX, Spoton and the new store in Straume .
• Cash flow from financing consists of lease payments and interest paid.

Cash and credit facilities

• Cash and available credit facilities of NOK 217 million (NOK 103 million), including an unused overdraft facility of NOK 120 million.
• Excluding IFRS 16 effects, net interest-bearing debt was NOK 151 million at the end of the quarter (NOK 365 million)
• Next amortization on our long-term loan is due December 2025

Events after the period and Outlook

Events after the period and Outlook

• Market conditions continue to be challenging, especially in the B2B market. Consumers show positive reactions to good campaigns but are otherwise still selective about their spending. However, so far in the 4th quarter we have managed to grow sales in both countries.
• On the 4th of November we opened our store number 29 in Norway. This store is located at Skøyen in Oslo and has a location with great visibility and availability for both consumer and professional customers.

Elektroimportøren