Verkkokauppa.com Oyj: Strong performance in a cautiously recovering market

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HALF-YEAR REPORT for 1 January - 30 June 2025

Verkkokauppa.com Oyj: Strong performance in a cautiously recovering market

Verkkokauppa.com Oyj        HALF-YEAR REPORT 17 July 2025, 8:00 a.m. EET

Unless otherwise stated, the comparison figures in brackets refer to the corresponding period in the previous year (reference period). Figures are unaudited.

April-June 2025 in brief

Revenue grew by 10.4 percent and was EUR 116.5 million (105.5)Gross profit was EUR 19.9 million (17.3) and gross margin 17.1 percent (16.4%)Operating result (EBIT) was EUR 1.8 million (-2.0) or 1.5 percent of revenue (-1.9%)Comparable operating result (comparable EBIT) was EUR 2.0 million (-1.7) or 1.7 percent of revenue (-1.6%)Items affecting comparability were EUR -0.2 million (-0.3)Result for the period was EUR 1.0 million (-2.1)Earnings per share were EUR 0.02 (-0.05)Investments were EUR 1.1 million (0.6)Operating cash flow was EUR -0.3 million (2.2)Verkkokauppa.com signed an agreement to sell its consumer financing business. The preliminary purchase price is approximately EUR 34 million. January-June 2025 in brief

Revenue grew by 6.3 percent and was EUR 227.0 million (213.5)Gross profit was EUR 40.7 million (35.9) and gross margin 17.9 percent (16.8%)Operating result (EBIT) was EUR 5.0 million (-2.4) or 2.2 percent of revenue (-1.1%) Comparable operating result (comparable EBIT) was EUR 5.2 million (-1.2) or 2.3 percent of revenue (-0.6%)Items affecting comparability were EUR -0.2 million (-1.2)Result for the period was EUR 3.0 million (-3.1)Earnings per share were EUR 0.07 (-0.07)Investments were EUR 1.4 million (0.9)Operating cash flow was EUR -15.0 million (-10.8)

KEY RATIOS4-6/20254-6/2024Change1-6/20251-6/2024Change1-12/2024Eur million         Revenue        116.5105.510.4%227.0213.56.3%467.8Gross profit        19.917.32.6MEUR40.735.94.8MEUR75.8Gross margin, %        17.1%16.4%0.7pp17.9%16.8%1.1pp16.2%EBITDA        3.4-0.23.7MEUR8.31.17.3MEUR7.5EBITDA, %        3.0%-0.2%3.2pp3.7%0.5%3.2pp1.6%Operating result        1.8-2.03.7MEUR5.0-2.47.4MEUR0.6Operating margin, %        1.5%-1.9%3.4pp2.2%-1.1%3.3pp0.1%Comparable operating result        2.0-1.73.7MEUR5.2-1.26.4MEUR1.8Comparable operating margin, %1.7%-1.6%3.3pp2.3%-0.6%2.9pp0.4%Result for the period        1.0-2.13.0MEUR3.0-3.16.0MEUR-0.8Investments        1.10.60.5MEUR1.40.90.4MEUR1.8Operating cash flow-0.32.2-2.5MEUR-15.0-10.8-4.2MEUR12.9 FINANCIAL GUIDANCE FOR 2025

Verkkokauppa.com expects its revenue and comparable operating result for 2025 to increase. In 2024, the company's revenue was EUR 467.8 million and comparable operating result was EUR 1.8 million.

Guidance includes uncertainties related to changes in purchasing power and consumer behavior. Verkkokauppa.com’s business is seasonal and the company’s revenue and operating profit depend largely on the sales in the fourth quarter.

CEO PANU PORKKA’S REVIEW

The operating environment showed cautious signs of recovery, and the electronics market grew in the second quarter. General wage increases and favorable development in key interest rates bolstered purchasing power. However, consumer confidence and purchase intentions remained subdued, reflecting ongoing uncertainty in the operating environment.

Verkkokauppa.com demonstrated strong performance, driving overall market growth and strengthening its market share. Revenue continued to grow in the second quarter and was 116.5 million euros (105.5), increasing by 10 percent compared to the previous year. Revenue growth was particularly strong in the company's strategic focus areas of e-commerce and new markets. The company's key categories entertainment and IT continued to grow as anticipated. TV category was boosted by the transition to high-definition broadcasts in Finland. In IT category, strong computer sales were driven by both successful commercial measures and a start of replacement cycles towards the end of the reporting period. Own brands’ sales grew by 22 percent in the reporting period.

Systematic efforts to enhance operating efficiency supported positive profitability development. Gross margin increased to 17.1 percent (16.4%), remaining on a high level due to successful assortment management and better commercial terms. Comparable fixed costs decreased as planned by 5 percent from the previous year. The company’s profitability continued to improve with comparable operating result increasing to 2.0 million euros (-1.7 million euros), representing 1.7 percent (-1.6%) of revenue.

The strategy implementation is progressing as planned. The importance of fast deliveries further strengthened, shifting purchases to online. The share of online sales remained high, reaching 69 percent of total revenue during the reporting period. Customer satisfaction with fast deliveries remained excellent, and the number of fast deliveries increased by over 60 percent. New market openings are supporting the company's growth, and sales in Central Europe and Scandinavia grew strongly.

During the reporting period, the company signed an agreement to sell its consumer finance business to Norion Bank AB. The arrangement supports both the company's growth targets and long-term plans. The transaction is expected to be completed in the second half of the year and will significantly improve the company's balance sheet structure.

The company is in a strong position to continue profitable growth as the market situation further improves.

FINANCIAL DEVELOPMENT REVENUE AND PROFITABILITY

EUR million4-6/20254-6/2024Change1-6/20251-6/2024Change1-12/2024Revenue        116.5105.510.4%227.0213.56.3%        467.8Operating result        1.8-2.03.7MEUR5.0-2.47.4MEUR0.6Operating margin, % of revenue        1.5%-1.9%3.4pp2.2%-1.1%3.3pp        0.1%Items affecting comparability        -0.2-0.30.0MEUR-0.2-1.21.0MEUR-1.2Comparable operating result        2.0-1.73.7MEUR5.2-1.26.4MEUR1.8Comparable operating margin, % of revenue1.7%-1.6%3.3pp2.3%-0.6%2.9pp        0.4% Revenue distribution

Revenue, EUR million4-6/20254-6/2024Change, %1-6/20251-6/2024Change, %1-12/2024

Customer segments       Consumers79,772,110,6 %152,9145,25,3 %325,8B2B (incl. wholesale)36,833,410,0 %74,168,38,5 %142,1Sales channels       Online80,669,516,0 %154,8140,99,9 %308,2Offline35,936,0-0,4 %72,272,6-0,5 %159,7Product categories       Core categories95,383,913,5 %186,7172,28,4 %377,9Other product categories21,321,6-1,4 %40,341,3-2,3 %89,9Own brands9,27,621,8 %16,512,927,9 %31,0Website visits, million18,116,68,9 %35,934,15,5 %74,3

Percentage of total revenue4-6/20254-6/2024Change, pp1-6/20251-6/2024Change, pp1-12/2024

Customer segments       Consumers68,4 %68,3 %0,167,4 %68,0 %-0,669,6 %B2B (incl. wholesale)31,6 %31,7 %-0,132,6 %32,0 %0,630,4 %Sales channels       Online69,2 %65,9 %3,368,2 %66,0 %2,265,9 %Offline30,8 %34,1 %-3,331,8 %34,0 %-2,234,1 %Product categories       Core categories*81,7 %79,6 %2,282,2 %80,7 %1,680,8 %Other product categories18,3 %20,4 %-2,217,8 %19,3 %-1,619,2 %Own brands**7,9 %7,2 %0,77,3 %6,1 %1,26,6 % *Core categories include five main categories: IT, Entertainment, Mobile devices, SDA, and MDA.

**Own brands are included in core and other categories accordingly.

APRIL-JUNE 2025

Operating Environment

The operating environment showed cautious signs of recovery, and the electronics market grew in the second quarter. Market growth was supported by increased television sales driven by the transition to high-definition broadcasts, as well as a start to replacement cycles in the IT category following the end of support for Microsoft Windows 10. General wage increases and favorable developments in key interest rates bolstered purchasing power. However, consumer confidence and purchase intentions remained subdued, reflecting uncertainty in the operating environment.

Revenue

Revenue increased by 10.4 percent to EUR 116.5 million (105.5). The revenue growth was particularly strong in the company’s key categories, IT and entertainment. In the IT category, strong performance was driven by successful commercial actions and the start of the computer replacement cycle. In the entertainment category, growth was fueled by strong television sales. In addition, international sales continued robust growth, increasing by 40.5 percent. Seasonal sales were more subdued than expected, particularly in air conditioners and cycling.

Sales to consumers increased by 10.6 percent to EUR 79.7 (72.1) million, accounting for 68.4 percent (68.3%) of total revenue. B2B sales increased by 10.0 percent to EUR 36.8 million (33.4), accounting for 31.6 percent (31.7%) of total revenue.

Online sales increased by 16.0 percent to EUR 80.6 million (69.5), accounting for 69.2 percent (65.9%) of total revenue. The store sales declined by 0.4 percent to EUR 35.9 million (36.0). The share of the store sales was

30.8 percent (34.1%) of total revenue.

Core categories’ sales increased by 13.5 percent to EUR 95.3 million (83.9), accounting for 81.7 percent (79.6%) of total revenue, whereas other categories declined by 1.4 percent to EUR 21.3 million (21.6), accounting for

18.3 percent (20.4%) of total revenue.

Own brands’ sales grew by 21.8% to EUR 9.2 million (7.6), accounting for 7.9 percent (7.2%) of total revenue. The growth came particularly from televisions, home appliances and IT accessories.

Revenue from customer financing services totaled EUR 2.0 million (1.9), including interest income, fees and commissions. Net credit losses, including the change in the credit loss provision from the consumer financing, were EUR 0.7 million (0.8).

Result

Gross margin increased to 17.1 percent (16.4%). The gross margin was strengthened by successful assortment management and better commercial terms.

Personnel expenses decreased by 8.4 percent to EUR 8.5 million (9.3). Other operating expenses decreased by 1.0 percent and amounted to EUR 8.2 million (8.2). Comparable other operating expenses decreased by 0.7 percent to EUR 7.9 million (8.0). Fixed costs totaled EUR 16.7 million (17.6), decreasing by 4.9 percent from the comparison period. Comparable fixed costs decreased by 4.8 percent to EUR 16.5 million (17.3). The cost reduction was due in part to the organizational restructuring carried out at the end of the previous year.

The company's operating result (EBIT) was EUR 1.8 million (-2.0), up by EUR 3.7 million. Comparable operating result (comparable EBIT) was EUR 2.0 million (-1.7), up by EUR 3.7 million from the comparison period.

Items affecting comparability totaled EUR -0.2 million (-0.3), mainly related to advisory fees resulting from the sale of the consumer financing business.

Result for the period was EUR 1.0 million (-2.1). Earnings per share were EUR 0.02 (-0.05).

JANUARY-JUNE 2025

Revenue

Revenue increased by 6.3 percent to EUR 227.0 million (213.5). The revenue growth was particularly strong in the company’s key categories, IT and entertainment. The transition to high-definition broadcasting in Finland accelerated TV category sales. In IT category, strong computer sales were driven by both successful commercial actions and the start of replacement cycles. In addition, international sales continued robust growth, increasing by 33.2 percent.

Sales to consumers increased by 5.3 percent to EUR 152.9 (145.2) million, accounting for 67.4 percent (68.0%) of total revenue. B2B sales increased by 8.5 percent to EUR 74.1 million (68.3), accounting for 32.6 percent (32.0%) of total revenue.

Online sales increased by 9.9 percent to EUR 154.8 million (140.9), accounting for 68.2 percent (66.0%) of total revenue. The store sales declined by 0.5 percent to EUR 72.2 million (72.6). The share of the store sales was

31.8 percent (34.0%) of total revenue.

Core categories’ sales increased by 8.4 percent to EUR 186.7 million (172.2), accounting for 82.2 percent (80.7%) of total revenue, whereas other categories declined by 2.3 percent to EUR 40.3 million (41.3), accounting for 17.8 percent (19.3%) of total revenue.

Own brands’ sales grew by 27.9% to EUR 16.5 million (12.9), accounting for 7.3 percent (6.1%) of total revenue. The growth came particularly from home appliances, IT accessories and televisions.

Revenue from customer financing services totaled EUR 3.8 million (4.0), including interest income, fees and commissions. Net credit losses, including the change in the credit loss provision from the consumer financing, were EUR 1.4 million (1.6).

Result

Gross margin increased to 17.9 percent (16.8%). The gross margin remained strong due to efficient inventory turnover, improved commercial terms and successful category management.

Personnel expenses decreased by 5.6 percent to EUR 17.3 million (18.3). Other operating expenses decreased by 7.1 percent and amounted to EUR 15.6 million (16.8). Comparable other operating expenses decreased by 1.4 percent to EUR 15.4 million (15.6). Fixed costs totaled EUR 32.9 million (35.1), decreasing by 6.3 percent from the comparison period. Comparable fixed costs decreased by 3.7 percent to EUR 32.7 million (33.9).

The company's operating result (EBIT) was EUR 5.0 million (-2.4), up by EUR 7.4 million. Comparable operating result (comparable EBIT) was EUR 5.2 million (-1.2), up by EUR 6.4 million from the comparison period.

Items affecting comparability totaled EUR -0.2 million (-1.2) during the reporting period, mainly related to advisory fees resulting from the sale of the consumer financing business.

Result for the period was EUR 3.0 million (-3.1). Earnings per share were EUR 0.07 (-0.07).

FINANCE AND INVESTMENTS

In January-June 2025, operating cash flow totaled EUR -15.0 million (-10.8). The operating cash flow before the change in working capital was EUR 8.4 million (0.6). The company's net financial expenses were EUR -1.2 million (-1.2).

In January-June, investments were EUR 1.4 million (0.9), mainly relating to IT infrastructure updates, improvement of operational efficiency and enhancing fast delivery capabilities. Investments included capitalized wages and salaries at the amount of EUR 0.5 million (0.6).

At the end of June, the company had EUR 18 million in bank loans and an unutilized EUR 25 million revolving credit facility, which are valid until June 2027. The principal of the bank loan is amortized every six months.

PERSONNEL

At the end of June 2025, the total number of employees was 625 (694). This includes both full and part-time employees. The company renewed and streamlined its organizational structure in autumn 2024.

CORPORATE SUSTAINABILITY

The company continued to work in accordance with its renewed Sustainability Program published in January 2025 to scale circular economy services, ensure the sustainability of operations and supply chains, and promote employee well-being and growth. The company is renewing its key operating instructions and is working to implement the reforms.

The emissions from the company's own operations continued to decrease mainly due to one retail location moving to renewable district heating. Emissions for 2025 are estimated to remain low, at approximately 10 tons of carbon dioxide equivalent, which corresponds to the average annual emissions of about two Finns according to calculations by the Finnish Environment Institute. The company expects to slightly fall short of its target set in 2021 to reduce emissions from its own operations to zero by the end of 2025. The target is expected to be achieved by 97 percent in 2025 and 100 percent in 2026 compared to the base year 2019. The company is committed to reducing its emissions in line with science-based climate targets and focuses on reducing indirect emissions (scope 3) in the value chain, which account for 99.9% of the overall emissions.

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STRATEGY

Verkkokauppa.com continues as a forerunner in the market with the vision of creating the new normal for buying and owning. The company is strengthening its market leadership by accelerating the shift to online shopping, supported by the growth of fast deliveries. The cornerstones of Verkkokauppa.com's strategy are growing the current business faster than the market, new openings, such as assortment expansion, own brand products and new markets, significant growth of the services business, and stronger profitability by continuously developing our own operations and platform.

Verkkokauppa.com’s long-term financial targets for the strategy period 2024-2028 are as follows:

Annual revenue growth (CAGR) of over 5 percent, faster than the marketAnnual operating profit margin of over 5 percent by the end of the strategy periodFixed costs to less than 10 percent of revenue by the end of the strategy periodTo pay out 60-80 percent of annual net profit in quarterly growing dividends LONG-TERM INCENTIVE PLANS

Verkkokauppa.com has a share-based incentive plan (Performance Share Plan 2023-2027) for the company's CEO and Management Team. The Performance Share Plan 2023-2027 consists of three performance periods. On 12 February 2025, the Board of Directors decided to commence the third performance period, covering the years 2025-2027. The performance criterion for the third performance period 2025-2027 is Total Shareholder Return (TSR).

Performance rewards for the 2025-2027 period will be paid partly in company shares and partly in cash by the end of May 2028. The plan includes a total of eight individuals (the CEO and all members of the Management Team). The maximum number of shares to be awarded for the third performance period is 340,000 Verkkokauppa.com shares, including the cash portion. The final number of shares depends on the number of shares acquired by participants and the achievement of the TSR levels.

LEGAL DISPUTES AND POSSIBLE LEGAL PROCEEDINGS

In February 2025, the company announced the decision of the Helsinki Administrative Court, which upheld the administrative penalty imposed on Verkkokauppa.com by the Data Protection Ombudsman's Penalty Panel in March 2024. The company has applied for leave to appeal from the Supreme Administrative Court.

The company recognized the provision for the penalty in full in the first quarter of 2024. The provision was reported as an item affecting comparability

ANNUAL GENERAL MEETING 2025

The Annual General Meeting was held as a remote meeting in Helsinki on 8 April 2025. The Annual General Meeting adopted the Annual Accounts for the financial year 2024 and decided not to distribute a dividend, discharged the members of the Board of Directors and the CEO from liability for the financial year 2024, approved the Remuneration Report and adopted the Remuneration Policy, and authorized the Board of Directors to decide on the repurchase and issuance of Verkkokauppa.com's own shares. In addition, the Annual General Meeting approved the proposals of the Shareholders' Nomination Board concerning the election and remuneration of the Board of Directors. Following the proposal of the Board of Directors, PricewaterhouseCoopers Oy was elected as the company's auditor and assurer of sustainability reporting. Mikko Nieminen, APA, acts as the auditor with

principal responsibility.

Composition of the Board of Directors 2025

The Annual General Meeting confirmed the number of board members to be seven, and the following persons were re-elected: Robin Bade, Henrik Pankakoski, Kati Riikonen, Irmeli Rytkönen, Samuli Seppälä, Enel Sintonen and Arja Talma.

At the constitutive meeting of the Board of Directors held after the Annual General Meeting, Arja Talma was elected Chair of the Board. The compositions of the Board committees were decided to be as follows: members of the Remuneration Committee are Arja Talma (Chair), Robin Bade and Henrik Pankakoski. Members of the Audit Committee are Enel Sintonen (Chair), Arja Talma (Vice Chai