Verkkokauppa.com updates its strategy to accelerate profitable growth
Verkkokauppa.com Oyj STOCK EXCHANGE RELEASE 21 November 2023 at 8:30 EET
Verkkokauppa.com updates its strategy to accelerate profitable growth
Verkkokauppa.com continues as a forerunner in the market with the vision of creating the new normal for buying and owning. With the 2024-2028 strategy, the company aims for faster than the market, annual revenue growth (CAGR) of over 5 percent, an annual operating profit margin of over 5 percent and to reduce fixed costs to less than 10 percent of revenue by the end of 2028. The company's target is to pay out 60-80 percent of annual net profit in quarterly growing dividends. However, in order to improve the company’s equity ratio, the Board of Directors will propose to the Annual General Meeting 2024 that no dividend be paid on the result for 2023.
Cornerstones of the strategy:
- Growing current business faster than the market
- New openings: assortment expansion, own brand products and new markets
- Significant growth of the services business
- Stronger profitability by continuously developing our own operations and platform
Growing current business faster than the market
Verkkokauppa.com aims to strengthen its market leadership by accelerating the online shift by making buying fast, extremely convenient and affordable. Optimized product flows, automated intralogistics and distribution network enable the fastest deliveries on the market. As the only operator in Finland, Verkkokauppa.com already delivers to 600,000 households around the clock in one hour, every day of the week. Verkkokauppa.com’s constantly expanding service is pioneering even by international standards and is fast increasing its share of all deliveries.
New openings: assortment expansion, own brand products and new markets
During the strategy period, assortment will be expanded with a special focus on product areas that are optimally suited for fast deliveries and Verkkokauppa.com’s platform. New operating models, automation, as well as data will enable cost-efficiency and scalability. The assortment will also be broadened with Verkkokauppa’s own brands and expected to become a substantial part of the offering.
During the next strategy period, the company continue pilots in new market areas also outside Finland, making versatile use of both own platform and selected partners.
Significant growth of the services business
In line with the vision, Verkkokauppa.com wants to offer genuine, sustainable alternatives to buying products. The company’s current customer financing service, Tili, combined with the trade-in service, provides a strong foundation for new value-added services and product openings. Company’s current trade-in service will expand, as will the assortment of recycled products. As a new opening, Verkkokauppa.com will introduce new subscription-based services to the market.
Stronger profitability by continuously developing own operations and platform
The ongoing profit improvement program provides an excellent starting point for building scalable growth. The company leverages artificial intelligence (AI) and data to operate goods flows, to streamline operations and to provide a superior personalized customer experience. Verkkokauppa.com’s own flexible platform and extensive software development expertise enable versatile utilization of leading technologies from selected partners and are the basis for the capabilities that will be built during the upcoming strategy period.
"Verkkokauppa.com continues to be a forerunner in the market. We will efficiently take advantage of market recovery and the new, sustainable business models will support the strengthening of our market position. We will exceed our customers' expectations by offering the fastest deliveries on the market and a superior customer experience – not forgetting affordable pricing and a winning assortment," sums up Panu Porkka, CEO of Verkkokauppa.com.
Verkkokauppa.com Oyj
More information:
Panu Porkka, CEO, Verkkokauppa.com Oyj
panu.porkka@verkkokauppa.com
Mikko Forsell, CFO, Verkkokauppa.com Oyj
mikko.forsell@verkkokauppa.com
Tel. +358 50 434 2516
Marja Mäkinen, Head of Investor Relations and Corporate Communications, Verkkokauppa.com Oyj
marja.makinen@verkkokauppa.com
Tel. +358 40 671 2999
Verkkokauppa.com (Nasdaq Helsinki: VERK) is Finland's leading online store, offering a wide range of products from home technology to leisure as well as business needs. Operating since 1992, the company is one of the oldest online retailers in the world, combining its online store and brick-and-mortar stores for an omnichannel customer experience. Verkkokauppa.com's four megastores are located in Oulu, Pirkkala, Raisio and Jätkäsaari, Helsinki. To provide a superior customer experience, the company delivers products as fast as an hour to your door around the clock, utilizing automation and robotics. Verkkokauppa.com employs around 700 people. The company is listed on the Nasdaq Helsinki stock exchange, and it has more than 21,000 shareholders.
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