Elektroimportøren AS — Earnings Release 2023

Feb 14, 2024

Elektroimportøren AS – Fourth quarter 2023 results

Elektroimportøren AS – Fourth quarter 2023 results

In the fourth quarter, Elektroimportøren delivered revenue of NOK 495 million, representing a 1.4 per cent decrease from NOK 502 million last year. Gross margins for B2C in Norway held up well during the quarter, but overall margin levels were negatively impacted by tougher campaign pricing and a higher share of sales from Sweden and from the B2B segment. The softer market experienced in 2023 has continued into 2024, but in a longer perspective, market fundamentals remain strong.

“Our core business in Norway has shown great resilience towards the more challenging market conditions. All of our 27 stores in Norway contributed positively to our bottom line, which shows us that our concept stands strong both with consumers and professional customers, even in times where most customers are more cautious with their spending,” says Andreas Niss, CEO of Elektroimportøren AS.

On a like-for-like basis, revenues declined by 4.1 per cent from last year. B2C sales decreased by 5.5 per cent, while B2B sales increased by 3.5 per cent, primarily driven by solar products. The group had a good execution of black week campaigns, but growth slowed down towards the end of the quarter, both in Norway and in Sweden.

On a category level, the sale of EV chargers continued to decline year-over-year, but the negative impact has lessened compared with prior periods. Excluding EV chargers, revenue was NOK 461 million in the quarter, up from NOK 455 million last year. Orders for solar is partly compensating for the EV charger decline, but a significant share of solar orders will not be delivered and invoiced until beginning of the second quarter of 2024.

Gross margin in the fourth quarter was 32.8 per cent, down from 37.3 per cent last year. The gross profit was impacted by inventory counting and provisions of NOK 7 million (NOK 5 million in Norway and NOK 2 million in Sweden). Adjusted for these effects, gross margin was 34.2 per cent for the group. Gross margin in Elbutik is significantly lower than for the Norwegian operation with 16.1 per cent.

In Norway, the gross margin was 34.4 per cent (Q4 2022: 38.2 per cent). The margin in Norway was impacted by the increase in B2B sales with lower margin compared to B2C sales (1.0 per cent) and exchange rate effects on Namron products (1.5 per cent). Adjusted for the effects above, gross margin in Norway was 37.9 per cent.

The company has a strong focus on managing costs and maintained a stable opex to sales ratio of 23.6 per cent (Q4 2022: 23.5 per cent). Further personnel cost reductions in Norway were implemented in November with effect from January 2024.

Reported EBITDA in the quarter was NOK 46 million, down from NOK 70 million last year. This represented an EBITDA margin of 9.2 per cent, down from 13.9 per cent last year.

In December, the Swedish head office and warehouse were moved to new facilities, with Autostore implemented and now handling 80 per cent of orders.

“The new logistics facilities in Sweden, further development of SpotOn and an expanded product range are examples of initiatives to position the group for a future market recovery. Elektroimportøren maintains a rigid cost control and balance sheet focus and remains committed to being the preferred supplier for both consumers and professional customers also when market conditions improve,” says Andreas Niss, CEO of Elektroimportøren AS.

Market conditions have remained challenging also in the beginning of 2024, with low consumer spending and reduced demand in general. The weak demand environment is expected to sustain for the coming months, with both new housing projects and real estate transactions at the lowest level in 25 years in Norway. On the positive side, number of store visits is increasing slightly from last year, and Elektroimportøren’s concept has proven attractive when consumers look for cost efficient ways to upgrade their homes.

EV charger sales are expected to stay behind last year sales figures throughout Q1 2024, but moving forward, sales are expected to follow a more normal trajectory. At year-end 2023, stock levels of EV chargers are normalised, and the risk of bad stock related to Easee is no longer present.

In a longer-term perspective, market fundamentals remain strong, and structural trends such as digitalisation, increasing energy prices, actions against climate change and new EU regulations for energy efficiency are expected to support demand growth moving forward.

Elektroimportøren announced in January 2024 that, as a consequence of the prevailing market conditions and outlook, the group has initiated a dialogue with DNB in order to obtain waivers from existing covenants or, alternatively, to refinance existing facilities as the current financing and loan agreement is due end of March 2025.

Please refer to a separate stock exchange announcement issued on Newsweb today for updated information about the contemplated private placement and refinancing process.

PRESENTATION:

The quarterly report and presentation are available at: https://www.elektroimportoren.no/investor and http://newsweb.no

The results will be presented tomorrow 15 February at 09:00 CET by CEO Andreas Niss and CFO Jørgen Wist. The presentation will be broadcasted as a live webcast in English.

Please use the following link: https://teams.microsoft.com/l/meetup-join/19%3ameeting_ZmZkMTIwZTItMzlkYy00MDBkLTk5MGYtNTM0OWU0YzI0MjQy%40thread.v2/0?context=%7B%22Tid%22%3A%224cbfea0a-b872-47f0-b51c-1c64953c3f0b%22%2C%22Oid%22%3A%22e6df3138-b416-457f-b6c1-5f3ce7a36ee7%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a

For more information, please contact:

Andreas Niss, CEO: +47 934 67 067

Jørgen Wist, CFO: +47 959 34 619.