CDON's Q4 and full year (year-end) report 2023

FOURTH QUARTER FOR THE GROUP

• Total gross merchandise value (GMV) decreased by 4% to SEK 625.6 (650.6) million. Organic GMV decreased by 28% for the CDON segment.
• Net sales increased by 6% to SEK 160.9 (151.5) million.
• Take rate increased by 6.8 percentage points to 17.9% (11.1%).
• Gross margin increased by 21.9 percentage points to 69.4% (47.5%).
• Gross profit after marketing (GPAM) increased by 86% to SEK 70.9 (38.2) million. Organic GPAM increased by 13% for the CDON segment.
• EBITDA amounted to SEK 17.0 (-48.2) million.
• EBIT amounted to SEK -7.5 (-65.0) million.
• Adjusted for SEK 16.7 million in goodwill depreciation for the Group due to the acquisition of Fyndiq, EBIT amounted to SEK 9.2 million.
• Earnings per share amounted to SEK -0.72 (-10.25).
• Adjusted Earnings per share amounted to SEK 0.82.
  
  

FULL YEAR FOR THE GROUP

• Total gross merchandise value (GMV) decreased by 3% to SEK 2 017.7 (2 078.7) million. Organic GMV decreased by 21% for the CDON segment.
• Net sales increased by 2% to SEK 468.7 (461.2) million.
• Take rate increased by 5.1 percentage points to 16.0% (10.9%).
• Gross margin increased by 19.8 percentage points to 69.0% (49.2%).
• Gross profit after marketing (GPAM) increased by 71% to SEK 201.4 (117.5) million. Organic GPAM increased by 14% for the CDON segment.
• EBITDA amounted to SEK 22.7 (-115.1) million.
• EBIT amounted to SEK -58.2 (-151.8) million. Adjusted for SEK 47.2 million in goodwill depreciation for the Group due to the acquisition of Fyndiq, EBIT amounted to SEK -11.0 million.
• Earnings per share amounted to SEK -7.25 (-23.24).
• Adjusted Earnings per share amounted to SEK -2.27.

LETTER FROM THE CEO  

We continue to execute on our plan

As we close the books on an intense business year, we conclude we are on the right path to realize the great potential of CDON. 

During 2023, we have focused on getting the basics right and building a foundation for future profitable growth. Despite weak consumer sentiment, we have successfully transformed an EBITDA loss of -115 MSEK in 2022 into an EBITDA profit of +23 MSEK in 2023. For the quarter, EBITDA improved 65 MSEK in Q4 2023 compared to Q4 2022. However, we are not satisfied with our current sales performance for the CDON segment and believe we have significant room for further improvement.

Since the acquisition of Fyndiq was completed in April 2023, we have put a lot of focus and resources on integrating and cross-pollinating the two businesses with best practices. A big workload remains with the platform migration, but we still have the goal of completing this critical transition in 2024.  

Our long-term strategy to build the leading marketplace in the Nordics remains unchanged, with two primary objectives:

- Massively increase supply
- Greatly improve customer satisfaction

We have laid the foundation to significantly increase the supply on CDON starting in the first quarter, and we are making good progress on improving customer satisfaction. I truly believe these initiatives, along with improvements in our marketing efforts, will mark a turning point for CDON's GMV development in 2024. 

For CDON, our short-term efforts have concentrated on eliminating unprofitable marketing channels, merchants, and products. As seen in our segment reporting, this resulted in negative GMV development compared to last year. However, in March, a year will have passed since CDON significantly altered its marketing efforts and we should soon have "cleaner" year on year comparable.

We have also focused on shifting our approach towards a fully consumer-centric way of working. Apart from increasing customer satisfaction, this way of working also reduces the potential impact of merchant frauds and bankruptcies, which have historically plagued the company. We have already seen positive results; several merchant bankruptcies during the fall had minimal impact on our consumers and financials.

For Fyndiq, we have prioritized supply growth. This has proven to be effective, driving GMV growth of 10% y/y in H2 2023. It is evident that Fyndiq has thrived in this era of weak consumer sentiment, thanks to its wide supply of bargain products. 

For the combined company, our main KPI, Gross Profit After Marketing (GPAM), continued to exhibit significant improvement, reaching 71 MSEK compared to 38 MSEK the previous year (+86% y/y). The main driver to this growth is the addition of the Fyndiq business, but also thanks to growth in this KPI in both segments.  The CDON segment's GPAM grew by 13% y/y, despite continued GMV decline, while the Fyndiq segment grew 16%.

CDON will centralize operations to the office in Stockholm and outsource customer service

In February 2024, we announced the centralization of our operations to the Stockholm office and subsequent closure of the Malmö office. We see the benefits of working closer together under one roof, and thereby increase the efficiency in the organization. 

Short term we will have restructuring costs of 7-9 mSEK in 2024, but these increased costs are expected to be offset by 2026 due to a lower cost base.

The majority of the employees in the office in Malmö will be offered a similar role in Stockholm, and I hope that as many as possible will take this opportunity to continue their professional journey with CDON, but from the office in Stockholm.

In 2023, we laid the groundwork for a turnaround with sustainable and profitable growth

As we close the books on this eventful year, our confidence in the marketplace model and the synergy between CDON and Fyndiq has only grown stronger. We recognize the importance of taking gradual steps in our journey - from crawling to walking and eventually running. The year 2023 marks the end of the crawling phase, and we are poised to enter the walking phase in 2024, which partly is defined by top line growth.

I expect 2024 to be another year of hard work and gradual improvement. I feel confident that our collective efforts will yield positive results in 2024 and that we will continue to take significant steps towards our goal of becoming the leading marketplace in the Nordics.

Take care!

Fredrik Norberg
CEO, CDON

Conference Call

CDON Group invites the press, investors and analysts to a conference call and a webcast where CDON Group's interim report for the fourth quarter and full year of 2023 will be presented. After the presentation, there will be an opportunity to ask questions. The presentation will be held in English on 15^th February 2023, at 14:00 CET.

If you wish to participate via teleconference, please register on the link below. After registration you will be provided with phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference.

Link to teleconference:
https://conference.financialhearings.com/teleconference/?id=5003139

Link to Webcast:
https://ir.financialhearings.com/cdon-q4-report-2023/register

The presentation material and the webcast will be published on
https://investors.cdon.com/en/investor-relations/presentations/