Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cdon AB (OSTO:CDON, Financial) successfully completed the platform migration on time and within budget, integrating all city markets into a shared platform.
- The company reported a positive EBITA of 5.5 million SEK, an improvement from last year's 3.2 million SEK.
- The new platform is cloud-native and microservices-based, allowing for faster time-to-market and better scalability.
- AI is integrated at the core of the new platform, enhancing product data and conversion rates while reducing costs.
- Cdon AB (OSTO:CDON) strengthened its management team with the addition of Visa Jarvela as CSO, bringing significant experience from the Finnish market.
Negative Points
- The company experienced a negative GMV growth of 8% for the quarter, with continued negative growth in the C segment.
- Higher marketing costs reduced gross profit from marketing by 10% in the quarter.
- The gross profit margin declined to 17.1% from 18.9% last year, driven by increased marketing expenses.
- Despite positive EBITA, the company faced a negative cash flow due to changes in working capital and platform migration costs.
- Traffic to the platform decreased significantly, impacting overall GMV despite improvements in conversion rates.
Q & A Highlights
Q: Can you comment on the recent market data suggesting significant growth in Swedish e-commerce, and how does it align with your observations?
A: Fredrik Norberg, CEO: We find it challenging to verify the reported 28% growth in September. The data is volatile, with previous months showing much lower growth. Our view aligns more with the year-to-date figures, which are just above zero, consistent with other industry reports.
Q: What are the driving forces behind any positive growth in 2025, and what changes are necessary?
A: Fredrik Norberg, CEO: Growth will be driven by improved supply and strengthened organizational capabilities, particularly with the addition of Visa Jarvela. We also expect some economic tailwinds, but our main focus is on enhancing supply.
Q: How will the platform integration transform your consumer offering and internal operations?
A: Fredrik Norberg, CEO: The integration reduces the need for separate platforms, increasing development velocity and allowing us to embed AI into our operations. This positions us to leverage AI advancements effectively.
Q: With the current take rates, do you expect them to remain stable, or are there plans for changes?
A: Carl Andersson, CFO: We anticipate steady take rates moving forward. While increasing take rates is a long-term goal, the current focus is on optimizing gross profit and return on investment.
Q: How do you view competition from emerging marketplaces like T and Amazon.se, and how do you position against them?
A: Fredrik Norberg, CEO: We are confident in our market position. Historical concerns about competitors like Wish and Amazon have not materialized as threats. We have specific market positions for our segments that fulfill their purposes effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
