Tervetuloa, welcome to Verkkokauppa.com Capital Markets Day 2024. My name is Marja Mäkinen, and I'm heading Verkkokauppa.com's Investor Relations, and I'll be your moderator here today. The video you just saw is our advertisement currently running on TV here in Finland. The world is getting expensive. Verkkokauppa.com is getting cheaper. Last time we gathered for the same event was 2021, and at that time it was only a virtual event. Now I'm so happy to see also a live audience here in Helsinki. However, the majority of the audience will be following the event through a live webcast, so warmly welcome our audience online as well. Since our last event, a lot has happened in the world, in the market, and also in our company. We launched an update on our strategy at the end of last year, and now we will give you some concrete actions of how we will progress with the strategy during the strategy period until 2028 and even beyond. Here we have the agenda for today. We will have six interesting presentations starting with our CEO, Panu Porkka's strategy update, followed by four deep dives into strategic cornerstones, and last but not least, a financial update from our CFO, Jesper Blomster. Before we start, a couple of practicalities related to Q&A. After each presentation, we have time for a couple of questions for each presenter, and then after all the presentations, at the end of the event, we have a joint Q&A where all the presenters will be answering your questions. The audience here in Helsinki, before stating your question, please wait for the microphone and then state your name and the company. The audience online, you can participate by commenting and sending your questions throughout the whole event by sending questions via the question function right below the stream window in the event page. Your questions are visible to me, and I will then address those to presenters. We will have a break around halfway of the presentations, around 20 minutes, and then we plan to end around 3:30 P.M., depending on the amount of your questions. After the official part, the audience here in Helsinki, we invite you to stay for a while to join with our management and have a moment to get together here. Just to remind you, we will be making forward-looking statements during the presentations, and there is a disclaimer on the presentation material for that. Now, let's kick the day off. I will hand over to our CEO, Panu Porkka. Panu will walk through our strategy and how we change the retail in Finland. Welcome, Panu, the stage is yours. All right, thank you, Marja. A warm welcome also on my behalf to Verkkokauppa.com's Capital Markets Day. My name is Panu Porkka, and I'm the CEO of the company. Today we have an exciting day ahead of us. You'll be hearing a lot of interesting, in-depth presentations about our strategy, about our targets, about our roadmap towards our financial long-term targets. Let me start my presentation with the introduction of my team. There have been a few changes in the last couple of years. Latest arrival, new CFO, Jesper Blomster, joined the company just three weeks ago, and he's ready to take on the last part, give you an update on the financials, and wrapping up today. Also presenting today, Jyrki Tulokas, Chief Strategy and Technology Officer, Nina Anttila, Chief Supply Chain Officer, Chief Marketing Officer, Suvituuli Tuukkanen, and Tatu Kaleva, Chief Commercial Officer. Also, Pekka and Satu are here available for the live audience afterwards for questions. The company is born online in the year of 1992, way, way before many other players that today are operating in the same environment. Starting with computer parts, hardware, moving into components, computers, PCs, laptops, tablets, etc. Nowadays, tapping in all consumer electronic categories and also outside of that. We have been building our business model strongly throughout our online and e-commerce site, and we have now today four megastores supplementing that business model locally as well. The company was first not listed 10 years ago, 2014. We transferred into the main list of Nasdaq Helsinki 2020. We've been investing in the company a lot in technology, in automation, warehouse automation, packaging automation. We have renewed our site. We have improved our processes, category management, pricing, etc. And we have now, just shortly end of last year, renewed our strategy, and now today we're going to give you insight on the next step and next step change for the company going forward in the growth path again and improved profitability. The company is quite uniquely positioned here in the Finnish market. The oldest e-commerce company, the biggest e-commerce company, the best-known e-commerce company, most preferred company in our line of business. We have 73 million site visits a year. We have the widest assortment right away available here in our Helsinki logistics hubs, 24/7 within an hour for a major part of the Helsinki metropolitan area. We are the most preferred company in consumer electronics, and on top of that, we have extremely satisfied and loyal customers. Our NPS is world-class, 73, and we have extremely engaged customers as well. The thing that we are especially proud of is the way we conduct business, selling high-quality products for a need, for a cause, ending up in market-record low returns. 0.7% for an e-commerce company is something that we have not faced before, so we are extremely proud of being sustainable in the way we run our business. The market has been pretty tough the last couple of years. We have faced crises that were not expected. There were geopolitical crises. There was an energy crisis, inflation starting to increase rapidly, and the time of zero interest came to an end, and all this led into a different environment that we have seen and everybody else has seen before. Consumer confidence has been rock bottom for two years now in a row, and you see bottom left that this is a leading indicator also for discretionary shopping. The black graph that you see is the specialty retail market in Finland shrinking for 2 years now in a row, something that's not that often to be seen. If you look then specifically in the consumer electronic market in Finland, it has been declining now for over 2 years, so 3.6% last year, 6.6%, and now really hitting the bottom this year, first quarter, declining by almost 10%, so 9%. There are some post-movements in investments. But there are also some positive lights and indications that in the last couple of weeks are to be shown. Everybody is expecting June 6th, like the rising sun, what happens with the interest rates. The expectancy from the banks is that that will be a decreasing one, and as the first indications start to show, we believe that the consumer confidence will follow as well. But we have made a thorough analysis on consumer behavior changes, on megatrends, and we have fully incorporated those in our strategy. We know for a fact that online is shifting offline, is shifting online. The online market is basically the only market, only channel that is growing at the moment. We also know from consumer insight that fast and convenient shopping is actually coming to be the most or the biggest preference driver in retail. It's getting to be a new norm in Finland, at least if we have a say on that. There are new ways of buying, owning, especially high-priced items, consumer electronics, and we want to tap into those additional revenue and profitability streams throughout our service portfolio. AI is not just changing the ways businesses are conducted, analysis are done, business decisions are done. Also, consumers are utilizing AI in their day-to-day life more and more, and this will lead into the devices being more and more sophisticated. Starting from this summer, there will be a lot of new launches on the device side to have the capabilities to utilize the technology at hand to be offered to the consumer in their day-to-day life. Also, the rising importance on sustainability, not just the younger generation, this is getting a new norm for all segments, all cohorts, and it's extremely important to take that in consideration as a company when building future growth and business models. If we start with the online penetration accelerating, this is data from certain sources, for example, Statista, is indicating that actually online in Finland is going to be the one or be the channel that is growing throughout the upcoming years, some 6% on annual level. That is also expected in consumer electronics. Now, of around 40% or just above 40% market share online, it is expected to be clearly above 50% by the end of our strategy period. But what is actually interesting to see is that if we ask the consumer in consumer electronic purchasing choices, today online is already the most preferred way of purchasing. The preference is there, the market will follow. That gives us a huge opportunity for growth years to come. Fast deliveries. This is a chapter where we in the Finnish market lag behind our Nordic peers, European peers, global peers, China and the United States. Fast deliveries are almost the norm. But when asked consumers in the Finnish market, actually the two top preference drivers are smooth shopping experience and fast and handy deliveries. Product price, yes, retail, super important, hygiene factors. You need to have those in place. If you want to drive preference, you can do it with the smooth experience and fast deliveries. The global same-day delivery market is booming, still booming, and we expect this one also to happen in Finland. Third strategic trend, tailwind, the ways of buying, the ways of owning, new ways of acquiring devices, products are booming outside the Finnish market. But also, when asked consumer landscape in Finland, over half have at least tried out certain kinds of subscription, part payment, or financing services when acquiring something slightly more higher price point. We see that the global market for Buy Now, Pay Later is booming like hell. That market is really increasing. We as a company need to take advantage of that trend because that will be also following in the Finnish landscape. Like said before, we have the AI changing how we work, how we live, how we utilize our devices. Starting from this summer, more and more suppliers are coming out with a new set of devices, new launches, new lineups. That will give us also a small boost because, like said, there have been postponements in consumer electronic device acquisitions in the consumer and the B2B landscape. The devices are getting older, so at some point they need to be replenished. Now, with the new devices, there's one more reason to do that. This is expected to have a positive indication on our consumer electronic market. Lastly, if you look at the sustainability and the circularity, this is actually one topic where we Finns don't follow. We are on the curve, sometimes above the curve, these flea market kind of things and utilizing marketplaces for used products, used clothes, for example. The Finns are quite familiar with circular economy actually already. It's not tapped into all categories yet, but we see a huge potential in consumer electronic market as well. Interesting is that we have those first adopters, those technical versatile people, tech geeks who really appreciate the high, high-end products. But we also do have the consumer segments who are willing to buy reused products as well. There's market, there's opportunity, and we have the segments ready. We need to utilize that. If I sum up those trends, the market in Finland, our total addressable market, you can see below which categories we have included. Basically, we have excluded groceries, luxury, cars, fashion, clothing, for example. Everything else is in scope. That market is not expected to grow more than 1.9% a year. Even more interesting, if you look from an online-offline angle, the offline is expected not to grow at all, to be flat. The whole growth is expected to come from online. The market growth opportunity for us and for everybody else is EUR 700 million, and that all, the whole EUR 700 million is coming from online shift. We are quite confident that we will have our fair share of that transition. Let me walk you through the cornerstones of our strategy. You will be hearing a lot about these topics today, mostly around the fast fulfillment, fast deliveries. That is the key, that's the sharpest angle of our strategy. How to utilize the capabilities that we have built throughout the last couple of years of being the fastest in Finland. Our curated assortment, how we build that, how we touch on different price points, how we fuel it with high-quality owned products, that insight will be given by Tatu later on. Besides the core business, we are also focusing on new business models, meaning new segments throughout our brand work and increased preference, new categories throughout utilizing our platform and improving our hero assortment, new business models and service area and retailers and media, but also new markets. Many, many different streams, which Jyrki will give you more insight on later. We stay true to our core, most efficient retailer operations, making sure that costs stay at the healthy level. We invest in technology, in light business model, and therefore enable scale in our business. Here you see a slightly busy slide, but there are our distinctive competitive advantages on the left side. Fastest fulfillment to lowest cost, faster and cheaper is our slogan, and we are actually executing that nicely. We have a leading platform built only for our purposes. We have an in-house IT department developing it agile towards our strategy, taking in consideration consumer needs and trends. Most efficient retail operations accompanied with strong brand and rebel attitude make us stand out. We have an extremely strong value proposition to our customer. Finland's fastest, ultimate convenience, winning assortment, best owned brands, best availability, probably always cheaper prices, and that all in a fair manner, keeping the customers happy, being always on the customer's side. These leading into our long-term strategic targets, aiming at annual growth of more than 5%, outgrowing the market as you saw from the figures, targeting EBIT margin above 5% by the end of 2028, at the same time cost to be below 10% of revenue. On top of that, we also have a target to pay out 60%-80% of our annual net profit in quarterly growing dividends. This is the essence of the strategy, how we rewrite the rules. We make fast, convenient digital shopping with fastest delivery within an hour or at the latest guaranteed next day, the new norm. Nina will give you a concrete path on how we're going to do this. We are in a position that we are the market leader, but we also want to change how the game is played. We want to make online the most preferred channel. We want to make the online purchase as smooth as possible, including all services that you can offer also from offline. Making online the preferred choice. We will rewrite the rules that fast delivery, same-day delivery is a norm in Finland. It's not a surprise. It is something one might or should expect. We want to be the ones who are raising the bar and making every other look slow. In this way, we believe that the way of purchasing, buying, and owning products will change throughout the years. If I sum up my presentation, we have really built a robust business model which has stood different market surroundings, consumer trends, and we are the market leader, the local champion here. We have made a thorough analysis on mega trends, consumer behavior changes, and incorporated those into our advantage and taking full account in our new strategy. We have a clear strategy which we can execute. We have a clear plan on how we're going to execute that to provide us future growth and higher profitability. The key essence, according to data and analysts and also our understanding, is to accelerate the online transition, especially in specialty retail and consumer electronic market. We believe that offline is the one that will be losing ground, as does Statista. Last but not least, we have a winning team. We have a winning mentality. We have a great staff to strengthen our value proposition, be there for the customer, and make sure that we stay the local champion for years to come. Thank you all and have a great day. You are allowed to applaud. Thank you, Panu. That was an excellent presentation to start today. We have now time for a couple of questions. Let's warm up with one from the online audience. What happens when demand picks up? Will all players focus only on defending and growing market share at the expense of profitability? That's a good question. Actually, typically when the demand picks up, it tends to lead into less pricing activities because the demand is picking up and you don't need to push the market anymore. I think that is maybe the key impact on the margin, not that everybody would be defending the margin rather than there's no need to invest margin anymore in the growth. Typically, that comes with market changes into a positive one. But that's also accompanied with inventory levels. If there's a surplus level of certain categories that need to be sold out during the season or before a new launch is coming, that doesn't, let's say, change the game. You still need to push those kind of categories out. Good. Thank you. Is there any questions from the audience? Yes, please. Just wait for the microphone and- Yes, Maria Wikström from SEB. I have two questions. First one is that I saw that your NPS was up 5 percentage points in 2023. What do you think are the key contribution factors as consumers liked you more last year? Good question. I need to think what we want to disclose. No, I mean we are obviously ex tremely happy and proud of that high NPS. I think that comes out of a certain kind of portfolio. First of all, we have renewed our site entirely. All relevant consumer touchpoints have been improved. We can see that in this touchpoint, the friction has been less. Secondly, we have continued to invest in product information. If you find the product, you have good reviews and good information, typically that yields into a conversion of purchase. Thirdly, I think the way we conduct business in our stores is sustainable. We have reinforced the way we face our customers in the store. We help them out. We don't push anything that might have a positive impact as well. We have renewed our strategy. We have renewed our marketing. We have been quite active in certain communication parts. Standing out or being true to our core, that seems to be helping. One can identify that we are slightly different than the other players. Maybe differentiation is also impacting that positively. Then my second question is, while we expect the demand to pick up, how does your inventory level look at the moment and how do you think the inventory looks for the competitors? Just thinking that if we actually, w hat will happen once the demand will recover? That's a good question. I mean we try to analyze the inventory levels on the market the best we can. To our understanding, there is still certain surplus in the market, in certain categories, in certain big categories because we see this minus 20 out of all, which is not sustainable in a profitability manner. That for us is an indicator that there's still some pressure on selling things out. In those categories, we don't have a problem at the moment. We are on a good, healthy level. We are now in the midst of summer season, so we have also grills and bicycles and things for outdoor and garden in our warehouse at the moment. Those things need to be sold out. At the moment, it's on an expected level. What happens in one, two, three months' time is something we need to keep our eyes on. There are certain categories which we need as well to push out during the season. Thank you. Thank you, Maria. Is there any further questions? Kalle, please. Kalle Loikkanen from Danske Bank. You showed pretty interesting kind of data and statistics on how the online market and the different markets are globally developing and what the CAGR for the coming years is. I was just wondering about the kind of the Finnish market because we are often a bit different in the global context. First of all, how confident are you that that global trend will land to Finland as well sooner or later? Then also, have you started seeing any signs of these trends that you showed earlier? Yeah, it's a good question. Yes, we have answers to that also. We have concrete figures on our parts of business, how they are evolving around these topics. To the first question, yes, I'm confident. We are slow adapters in Finland, but basically every trend comes with a certain delay also to the Nordics and to the Finnish market. We can't recall any major trends not hitting the Finnish market. It's always a question of time. Is it one year or five years' time? We see in our own customer behavior already that when customer is choosing the fast deliveries, for example, that has some positive impact on how the consumer is behaving after that. There will be more insight today around that and also the other topics, how they look in our business from figures as well. There will be proof to our views. I don't want to take everything from my team, which will be presenting those topics later on. Well, thank you, Panu, and thank you, audience, for the good questions. Now we will continue with the presentations. Panu just told how we will rewrite the rules of retail and how placing delivery speed will be a new norm for buying. We want to exceed customer experience with the most effortless shopping experience. Now I will welcome Nina Anttila, our Chief Supply Chain Officer, to the stage. Nina will tell you how we make shopping fast and extremely convenient. Please, Nina, w elcome. Hello everybody, also from my behalf. It's really truly a pleasure to be here to share the excellent story of what we have been doing and will be doing when it comes to making shopping fast and extremely convenient for our customers. First, I will walk you through how the journey so far has been, and we will go through the renewal of our online experience and what an impact it has on our consumer and customer behaviors. Then we will go through the new service we have launched in the Helsinki capital area, as Panu already elaborated, so 24/7 deliveries from our facilities and with one-hour deliveries to home or 15 minutes Click and Collect from the store. Then we move on to the present situation where we are extending our reach to our own stores where they are preparing themselves to start the similar kind of services in Turku, Tampere, and Oulu regions. In the future, we will then step a little bit inside what kind of potential we have to extend the reach even further with potential micro-fulfillment centers. First about the first door to our store, which is the online platform. In 2023, we renewed our platform. The door to store is really now looking different. The findability has improved, and the customers find what they're looking for much faster, which is the first step of fastness. With the renewal, the time they spend on our store has increased by 15%. Also, the average order value has increased by EUR 22, and the shopping cart abandonment has been reduced by 29%. The customers who step in find what they're looking for. They also stick to the plan and buy it. Behind the scenes, we have also improved and built our capabilities ready for retailers' media, as well as making it easy if we so choose in the future to onboard potential new categories. There is what is meeting the eye in the front, and there is renewals in the back. Our NPS is really high, 73%, which gives us reason to believe that the fast and effortless shopping experience truly is a key driver for customer engagement. When we ask our customers what are the key features for the top promoter score, they tell us 82% is delivery, effortless and ease of shopping experience 86%, and fast service 88%. Not only do we believe that this is important, but we get it reinforced back from our customers as well. Then when looking at this physical delivery, the material flows from our stores and our warehouses towards our customers. What has happened there? In Helsinki warehouse, we automated the warehouse itself. We have fully taken into use the AutoStore investment as well as packaging automation. This enables us very, very efficient operations. We have the capability to store 32,700 stock-keeping units in the fast delivery assortment. The service itself, as mentioned, is 15 minutes from order to delivery in Click and Collect and one-hour delivery to your home door if you are within that delivery range in the capital area at the moment. We have also leaned our operations in the warehouse from receiving the order to delivering the order, and we are continuing this journey also towards other parts of the processes in-house. This has really, really great impact already on how we operate. The operational efficiency has increased by 22% measured in lines per hour, so how many lines we can get through with the same resources we used to have in the past. Within the past year, we also have shortened nearly half our delivery lead time, so 43% reduction from customer order towards the delivery. Delivery here means the customer has it either in the parcel locker or the collection point at their disposal or in this 15-minute Click and Collect path. Both are covered in the measurement. The team has done an excellent job. They keep on coming with new proposals all the time, so I don't see that this is the end of the journey. It's the beginning of the journey, so we continue to improve more and further because the good delivery performance does not only resonate outside with the customers, it also resonates very well internally. As a key example, for example, with this delivery improved performance, we can see that in customer care, the contacts have been reduced by 44%. The customers really are happy. They get what they need fast and effortless and stick to that. Our main delivery flow today is the next-day delivery. There we are continuing the path to develop it further with our existing capabilities, with our partners, and with our assets we have. This is really based on a seamless collaboration among ourselves with the delivery network we use because we can only be as good as the weakest link in this whole flow. By taking care of our on-site and making sure that our partners do the same and making sure that the handover points, the cut-off times, and everything are optimally adjusted, we can continue on this path where we are already finding ourselves by having next-day delivery growth by 77% year-over-year. The journey will continue to cover the majority of the population by 2028, and there will be many, many smaller steps taken along the way to make sure that we fine-tune this end-to-end process continuously. Though we are happy with this next-day delivery performance and we know it's important for the customers, as being number one online store in Finland, we are able to set the new standards on delivery speed and effortless shopping experience. We are looking at outside of Finland as well, and we see that in case you are not fast enough, the slowness of deliveries is one big reason for abandoning the shopping cart. In the studies outside, 23% of customers, they abandon because of slow deliveries. In a recent study in the U.S., we also see that the requests for next-day delivery or same-day delivery, having high values of 74%, 67% equally, can be a key differentiator between true providers who can provide the faster deliveries will get the deal. That is why we need to continuously focus and keep on our effort in speeding up the deliveries with a bigger share and bigger penetration in the country. Panu already elaborated the statistics from Statista where you can see that this same-day delivery market is growing rapidly in the world, and Finland will follow. Being extremely fast, we have also seen that our NPS being normally 73, with the one-hour delivery service, it is as high as 91%. Sorry, 91. There is a huge difference between the consumers and customers who choose the one-hour delivery service to the higher scale of NPS score versus the 73, which is already world-class, like Panu was highlighting. To revolutionize the retail, we will minimize the reasons to shop online and make it easy for the customers to just wait that the goods come to them, that they can conveniently do the shopping where they are, when they are, and we will make an effortless easiness delivery to them. Just a highlight, the fastest case so far in our one-hour delivery service has actually been 12 minutes from order to delivery to the customer. That is really, really fast, and that has no room for any slack in between of the handover points. The effortless placing fast deliveries, they drive the customer engagement, as we can see. Therefore, this service will be extended, and I will tell you about it in a minute. Already now, when the service is available in the capital area, so when it's been made available, we can see that 48% growth year-over-year in customers selecting this service. 86% of these one-hour service orders are coming from consumers. If we look at this NPS score increase from 73, sorry, 91, it's 30%. That is a key reason for us to drive higher engagement with our customers. What we also see is that the consumers choosing this delivery service, they tend to buy twice more frequently than other customers. Not only are they more happy, they buy more often and keep coming back to us. This year, 2024, we will be onboarding this service to cover our own stores in Turku, Tampere, and Oulu regions. By doing this, we will increase the penetration or the coverage of the population by 43%. We will be then able to provide this really nice service to a wider audience in Finland. As we speak, the teams are already preparing for this improvement, so this is really an ongoing 2024 improvement. Towards 2028, we have the opportunity to deliver and extend this service even further into the larger cities by using cost-efficient micro-fulfillment centers. How we will do it is that first we need to understand what are the desires from the customers. The first step is really to blend in the holistic demand picture with predictive analytics and data science, spice it up with social media trends as well as macroeconomic indicators in order to know what is needed and where and when by our customers. We always need to be one step ahead in order to prepare for the nice delivery experience. When we know what is needed, we will then need to translate this into optimized fulfillment, and there the decentralized distribution plays a key role. We need to be close to the customer in order to reach them within one hour. When thinking about managing this kind of delivery network, the AI and machine learning-based solutions for operating the material flows will be vitally important, and the digital twin will show us where to focus at every moment in the real-time information environment. As a result, we will be where the customer needs us to be. We will continue to be an effortless shopping experience across the country. We will do this in a very smart way, so every item that is in decentralized mode in the warehouse is available within one hour where it needs to be within one hour, and it's available tomorrow where it needs to be tomorrow. There is a pooling effect, so we will not be exaggerating the inventories on top of each other, but it is actually one. The possibility to establish the micro-fulfillment centers, we will conduct by utilizing our partner network, working very closely with them, so we will be having the space as well as the labor in transactional mode, so as a pay-as-you-go, so the space we use and the transactions we consume will be pay-as-you-go mode. The algorithms of selecting where to go and what to store, these we will need to boost continuously in order to be this one step ahead where the consumers want us to be. We are not doing this solely on our own, but we are also partnering there with the world-leading partners like MIT. Then this system to optimize the material flows, we need to. We have a system now, and we will need to boost it, obviously, for the coming years as we normally do always with the ITs. The journey so far, we walked through this online experience improvement, which has been taking place in 2023, and the establishing of 24/7 deliveries with 1 hour and 15 minutes lead time in the capital area, which we will be extending into the own stores, Turku, Tampere, and Oulu regions. Why we do that? Because our customers tell us it's important. NPS from 73-91, as well as double frequency in purchasing, are clear signs for customer engagement and encourage us to do so. Moving on from there, then in the future, we have the potential to upgrade even further the delivery network to meet our customers where they want us to be with these micro-fulfillment centers. The key takeaways, the journey is already going. We are already on the path. We see already how the world is transforming, and we are spicing up with our efforts, speeding it up where we can by continuing to offer an effortless shopping journey with a very, very fast and effortless delivery experience. It will consist of these speedy deliveries, one hour when the consumer and customer do so, but we will continue to excel in the next-day delivery equally so. By doing that, we will do it in an asset-light manner and with very fluid inventories. To support this journey, the AI and machine learning-based solutions to support the material flows will be further developed. That is now all from my part. Thank you, Nina. Very interesting presentation. Shall we go to the questions? Sure. Let's take the first one from the online audience. Here is a question that you mentioned in the presentation that you have improved the efficiency of intralogistics by 22% and almost halved the lead time from order to delivery. Can you give some examples of this? What have you done? Okay, let me think. First of all, we've transformed the flow, how the order enters our delivery machine, if we call it so. We put a lot of effort on that the order is getting or reserving its right place among the sequence when they leave out. It's a pull mechanism, so really mingling the orders into one pot and then taking them out in the order they leave the building. Let's put it this way. We are not doing this alone only, but we are also working with our partners so that there is no minute lost when we hand over something for the delivery network, so they also know what to expect, and they also tell us what is the right sequence of getting the parcels from us to them so that they can be really meeting the delivery deadline, which is the same for us and them. We share the same customer at the end. It's internal, external, seamless collaboration, and aligning t he priorities and making sure the customer order gets its right spot. Sounds great. Good. Is there any questions from the audience? Yes, Sanna, at least. Kalle, please. Hi, yes, Sanna Perälä from Nordea. I actually have a follow-up question on that. In the chart, you said you increased your next-day deliveries and one-hour deliveries quite impressively in Q1 versus last year. You mentioned some concrete internal changes you made. Was this increase internal based on your changes, or was it demand-driven? No, it's really based on really squeezing out the, if we call it waste. I mean, every step, if it's not increasing customer value, it's waste. We really have looked through the whole process backwards, when the customer receives the order and then what needs to happen before that in our partner network, and then when the order is supposed to be leaving from us, so we'll pass from there. We started from some bigger things, and then the team has continued on the journey. I really, really have to say that I admire the whole team by coming up with continuous improvement items that we further on continue to shorten the lead time as well as increase the delivery accuracy. It's stubbornly working towards a common goal. Thank you. But I guess demand has also increased in that service? Of course. For the one-hour delivery, for sure, that was a new service. We piloted it at the beginning, and there is a huge jump, but the majority of the deliveries stay in the next-day mode at the moment. Therefore, that is the area we need to excel equally so. We can't forget one or the other. We need to deliver on both flows. All right, thank you. Thank you, Sanna. Then Kalle, yeah, please. Kalle Loikkanen from Danske Bank. I was wondering about the one-hour deliveries. What is the average value of the order where the customers have chosen the one-hour delivery? What's kind of the average value? Now, the average order value, generally speaking, has been increased, as I said, EUR 22 with this renewal of the platform as well as the underlying services. Now, to distinguish the one-hour delivery, it's a number that we need to come back to later in the afternoon. Okay, sure. Then I was wondering that the target for 2028 is to have the one-hour and same-day deliveries in quite a big part of Finland. Yes. How much CapEx do you need to kind of be able to execute that? The request for the CapEx is rather minimum. As we said, we will be doing that pay-as-you-go, so we will be working closely with our partners. Both the space as well as the labor required to deliver this service will be transaction-based, so not CapEx, OpEx. Okay, got it. Thank you. Yeah. Any further questions in the audience? Okay. If not, I would like to thank you, Nina. Thank you. Thank you for your answers and presentation. You will have a chance to continue discussions with Nina during the break we have. Before the break, we have one more presentation from our Chief Commercial Officer, Tatu Kaleva. Tatu will tell you more about our assortment and how it is optimally suited for fast deliveries, and also about our own brands and how they will make a difference. Please, Tatu. Good afternoon and welcome on my behalf also. I'm really excited to talk to you, tell you more about our winning assortment, and also how we support the fast deliveries that Nina was talking about, and also about the role of our own brands. But the first thing I really want to highlight is that customers love our assortment. We have over 500,000 transparent product reviews from the customers, and we use this data to curate our assortment on a daily basis. That means we're constantly looking for better products. If a product gets bad reviews and doesn't do it for the customer, we go out and find a better product that does it better and then gets better reviews. With these 500,000 product reviews, we have an average of 4.3 stars, and that is really high. Let that sink in for a moment. When the customer gets the product he or she needs, gets the right product, we see that also as really low customer returns. Like Panu also pointed out, 0.7% is exceptionally low in our business. Our assortment is also perceived as the broadest and most interesting assortment available when it comes to compare to our competitors. In my presentation, I will walk you through three points that make a winning assortment for us. First, what we mean with the hero assortment. Then secondly, expansion to new categories. And third, our own brands and the role of our own brands in our assortment. Let's start with the hero assortment. Customers value our strong offering in high-quality products. We have over 2,800 brands available at the moment. That makes 58,000 SKUs of best brands and most exciting new products. New SKUs are also introduced on a weekly pace of 400, and that means that our assortment develops daily according to new product launches, customer wishes, and trend analysis. In addition to that, we also feature 2,500 high-quality own-brand products, which already cover over 80% of our main categories. I will give you. Oh, yes. And own-brand split is. The own-brand products make up 3% of our total SKUs, but they contribute already to 6% of sales. Then the hero assortment. This is the strong core inside our offering, and it consists of the most wanted products that customers want to have fast deliveries. The hero products also form our core revenue stream. Hero assortment is most wanted products that the customer prefers to have fast delivery on. Of course, with these ones, we want to take extra care that we are always on point with our customer value propositions. Availability to make fast deliveries possible, the right price. You will probably always get it cheapest from us. Best-in-class product information to make it easy for the customer to choose the product online. High quality, of course, because we want to make sure that the customer is satisfied with the product. These hero assortment characteristics are supported by our company's underlying assets: extensive and exciting offering, local warehouses, efficient retail operations, transparent product reviews, and high-brand preference. We are also constantly tracking trends to be the first one offering new gadgets and fulfilling customer needs. We use many sources, more or less commonly accessible. Of course, we have a good eye on the market at all times. We also get insights from our partnerships and monitor trends, for example, on social media. Because an interesting assortment is not just about the biggest brands. It's innovative, trendy stuff as well, some niche stuff as well. Over the last three years, we have been growing our brand count by 38% and also our own brand assortment by 48%. On the other hand, we also closely manage the performance of our assortment. In the last years, we have been adapting to a declining market by optimizing our assortment and according to changes in customer demand. We have been able to bring down our inventory value by 24% and at the same time increase our performance on an SKU level by 5.9%. Optimization is, of course, done on a daily basis to ensure a good fit with our internal logistics. It's really important for us. When the assortment is in good shape, we are even more capable of scaling it then. With that, I jump to the next topic of assortment expansion. Here you can see a picture of where the analysis is based on market growth on the x-axis and online transition on the y-axis, and the bubble size in the picture indicates online market size. So three conclusions here. The red ones are our existing core categories, and there can be seen that there's still market growth to be seen, for example, major domestic appliances and small domestic appliances, MDA and SDA, and then some online transition also forecasted for some smaller red bubbles. Secondly, our growing categories are the gray ones. These we have already tapped into, but with a quite narrow assortment. These are heavily shifting online during our strategy period, and there's also what we see some potential in. We have also identified some new potential categories within the blue ones, but this decision on which categories we are going to launch hasn't been disclosed yet. However, these new potential categories will be tapped in from 2025 onwards. But first, we need to make sure that the expansion has to be a good fit with our automated product flow, our internal logistics, and also complement our existing assortment. Again, this goes for new categories as well. We want to offer the most desired products. It has to be suitable for fast deliveries. You will probably always get it cheapest from us, so the right price, best-in-class product information, and dropship-suitable supply, not to put too much strain on our inventory, and as well as low return rate is a business that we're looking for. New categories from 2025 onwards that fit our platform and logistics. The third topic is our own brands. These are really important for us, on one hand, because they boost our profitability, and on the other hand, they create exclusive reasons to shop with us because of the great value they offer. This is something we have been building up our capability with our own brands for over 20 years. Focus on quality has landed us in recent years with an average rating of 4.2 stars, which is on a very high level. We also have the ability to build brands that shift customer preference in the market. For example, with Blackstorm, which is known for gaming and computer products. By having that position and the trust that comes with the customer reviews, we have been shifting sales towards our own brands with better profitability. Margin contribution of our own brands has increased by 10% in the last two years. A great success story is Ströme, for example. It's our own brand, and we sell products in small home appliances, large home appliances, home and lighting products. It has become a valued brand among our customers. Since 2020, we have put a lot of work in building up the offering. We have brought different price points and also improving the quality, improving the customer reviews, and sales have followed. Last year, our average rating for Ströme was 4.3, and in three years' time, sales have gone up by 79%. And that's what we do. We always try to find the best value for money when it comes to our own brands. Talking about Ströme, here's a really concrete example of what the great value for money is and beating the brand. And on the left side, we have one of our best-selling washing machines with slightly better technical specs, but it has the best product reviews and a significantly low price point. And that's what we're looking at when we build own-brand products. It has to have the same or better specs, always tested and complied with regulations, affordable price, competitive features, and of course, the same lifespan as the brand product has, featuring spare parts, etc. And how do we do it? How do we get five-star ratings for our private label products? I think it has to do with being really openly on the customer side. We have those 500,000 product reviews, I told you in the beginning, and that is also really important data when it comes to product design. The customers tell us exactly what's good, what's bad, what features they appreciate, how they perceive the price, and how they use the product. And our in-house product development uses that data to create new products for different use cases or making the existing products better. So our own-brand products are designed directly to our customers, to our market, with their feedback. We also have this Asian specialist team, and their job is to make sure that what we want to offer in our market, we get the best price for the best terms and directly purchase from the manufacturer. They're also taking care of audits and supporting logistic operations. As a combination of these two assets, we're able to create quality products for market-specific needs with unbeatable price. Then this summer, for example, just a couple of weeks ago, we launched a collaboration with a clothing brand, Billebeino, which also showcases our quality-driven and efficient sourcing capabilities. This time, it took the form of some cool glamping gear you can enjoy in the summer. Key takeaways. First, a curated by the customer and efficient hero assortment is the core of our offering, most importantly to fuel the fast deliveries and effortless shopping. New categories will be rolled out in 2025, but there's some potential also in our existing ones. And thirdly, our own brands are important for us to boost profitability. They offer great value for money and brand-like quality. And with this, I hope I've given you some perspective on what a winning assortment means for us. Thank you for listening. Thank you, Tatu. Very interesting presentation. So now time for a couple of questions again. And let's start with one from the online audience. You said that you are expanding into new categories. Could you give some examples of what those could be? I think I answered that already. We haven't disclosed any specific categories yet. We are planning to expand in 2025. But at the moment, we are analyzing. We're looking at the market deeply, and that's also where we're always interested in new possibilities there. But the thing is, it needs to fit our logistics system, our automated supply product flow, and also our existing assortment. And yes. Okay. Thank you. That's good. Any questions from the audience here in Helsinki? Maria, please. Maybe one question, thinking about given that your assortment is changing all the time, and there was a time when you cut the number of SKUs quite a bit. So how do you make sure that the clients who are currently, they are with you, that they actually stay on board when the assortment is changing? A good question. Of course, we adapt to the market situation. During the pandemic, we expanded a lot, and that had always that's because the customer demand changed, and there was a shift in customer needs also. Now, when we're adapting to a declining market, we cut the assortment, and we bring the number of SKUs down. But of course, we always do it from those SKUs, those products that we see that are not that important for the customer. The products that bring in the traffic, we see that those are the ones interesting for the customers. We don't touch those. Instead, we bring better performing products in the selection. And I mean, retail is always detail. Given that there is quite a bit of geographical difference between Helsinki and Oulu, but is the assortment exactly the same in Helsinki and Oulu? In the stores. No, we have different store layouts, and it varies between all stores. Thank you. Good. Any further questions in the audience? Maybe then one more from the online. You mentioned that we did a lot of category optimization over the past year. What kind of results has we achieved? I think I answered that also in the presentation. We brought down our inventory levels by 24%, and also on an SKU level, we dug deep and rooted out the SKUs that weren't performing that good. And as a result, the performance of SKUs increased by 5.9%. Good. Thank you. Thank you for the presentation. Now we will have a break. We will continue at 2:10 P.M. sharp. So see you soon. Thank you. Welcome back. I hope you had a nice break behind the screens as well. Just a reminder, online audience, you can send your comments and questions throughout the whole event over here, and you can find the question button right below the webcast window on the event page. We have already heard how we changed the retail in Finland, how we make shopping fast and extremely convenient, and about our winning assortment assured by customers. Now in the second half we have three more interesting presentations, deep dives into our strategy execution. First, Jyrki Tulokas, our Chief Strategy and Technology Officer will get you to our new business models and international expansion. Jyrki, please, the stage is yours. So I hope you had a refreshing break. And next we will dive into new business models and our international expansion. So why do we talk about new services and international expansion? Well, the answer is pretty clear. As we and others in the market see that a lot of the future growth and profitability especially, will come from these new types of services and adjacent things to the core retail business. So we've already heard today about new adjacent categories that Tatu talked about and now we'll dive into new geographic wholesale. adjacent services, Retail as a Media, financial services and payment and a little bit also about the customer loyalty and how all these come together. We actually have quite a lot of knowledge about services. and how they actually drive our business. So if you look at just three really. they drive both bottom line and top line, services. and they drive differentiation, but they also drive customer loyalty. So we've had for quite a while our service. which has done very well during the years. and in between 2022 and 2023 the growth was 45%. and reaching almost EUR 7 million as financial revenue. and with very good profitability as well. So we see that services really drive that financial performance as well. But they do drive differentiation well. and we see that last year we launched the service. where customers can sell their existing old product back us. once they want to buy a new one. We've seen a six-fold growth in that type of transactions. We've also said as before that the deliveries. the growth has been phenomenal. and 48% growth year-on-year there as well. So customers really love these types services. and they differentiate us on the market. But it's also about customer loyalty. Customers that use our Tili service, that grew 84% last year. And as said before as well here. that even though we have a very high NPS of 73 with customers. it's even higher with the customers use. for example the one-hour delivery service. So as asked from Panu, what drives the rise in our NPS? One of the reasons is that customers use services. which work really well for us. So we've talked about international expansion in strategy. so let's look at that next bit. So we are not new to international sales. It's not talked about a lot yet. but we've been hovering between EUR 30-40 million a year range for some years. But inside that we've been really focusing on international sales to EU. And there we saw last year 17% growth to year. so really good growth for overall in EU. But in the top three countries that we have been focusing on. The growth was really high, so 82%. These really make already the majority of our international sales. We're focusing now on Nordics and Baltics, but next of course looking at the Central European big countries, how do we increase our sales there as well. So a good start. How do we then do business internationally? It is mostly B2B at the moment. There are three different ways we work. The biggest opportunity at the moment that we see is with EU-wide large retailer partners. Similar companies to us that sell a lot in their usually in their own country. These are direct relationships with those customers, usually multimillion opportunities for us per year. We sell our own brands as well as global brands that we represent here in Finland. We use the same assets that we have here in Finland. whether that is logistics or other assets to sell to these partners. This is currently the biggest opportunity that we are working on, and signing new partners as we go. The second opportunity that we see is marketplaces in the Nordics. We have a few marketplaces that we are actually managing offering. and pricing those products there. Again, selling both our own brands as well as global brands there, using again our own existing logistics model here from Finland. Then the third opportunity, which is a rising opportunity us. is with small retail merchants around Europe. Here we talk about there are a lot of small retailers EU. that are searching for products across the area. These we will be handling then with very automated self-service type of model, as this really needs to be efficient. But again, still using the same assets that we have here from a logistics point of view. So these are the three ways we are attacking the market and continues to grow well this year as well. So moving on to another topic that we mentioned in our strategy that we're driving, which is Retail as a Media. And with retail media, we see that the brands so the brands that we sell and represent they're moving their marketing money away from generic marketing. In general to digital channels but more and more to retailers. And why that is, is that we actually have the customers. When they come to us, they're looking for a solution. They are there to buy and they're engaging with the brands. So it's the right place to be to advertise or do marketing and present your brand. And that's why. And of course this is the biggest opportunity for online retailers, as the customers are there looking for those products. And we have really a good understanding what the customer is looking for, what they're doing. We have segmented our customers well, and we can actually give back more visibility to the brand, how the customers perceive their brand, how they're rated, their products and so on. So there's a lot of information we can give back to the brands. So that's what's resulting into this growth that, in for example in our categories, the market in retail media is growing like something between 20%-40%. And for some in the market already, for some retailers, retail media is representing a majority of their whole profitability. So what makes us a great place to do marketing? Well, retail media in our company. We have a set by Tatu. We have plus 2,800 brands that we represent. So there's a big mass that we can actually do retail media with. But why again we are the primary place in Finland is that we are the biggest and most preferred consumer electronics brand here with more than 70 million visits a year. So that really gives the brands the visibility to them in Finnish market. But again, as said before, we also have the really good customers that are engaged with us as a brand. So really strong customer NPS, as explained also by Tatu, that those customers give also very high ratings to products on our site. So again, there's more visibility for the brand how customers actually perceive their brand with us. So as for others, retail media possesses really an attractive opportunity from a profitability contribution wise to us. So we are on a good way already, and we are looking at doubling our retail media contribution by the end of the strategy period, so 2028. So how do we then get there? What are we working on at the moment? We're increasing our inventory. So expanding on-site and off-site our visibility. So what we can actually give and present to the brands as a media placement. We're doing a lot of commercial development at the moment with the brands, understanding their needs and telling our story what we can offer. We're also working on data and reporting, because this is something that retail media really represents, and what we want to give to the brands back is understanding of what the customers do and how they perceive the product with us. And finally, this is going to be a technology development as well. We want to make it super efficient. So we're spending efforts also to make retail media technology. that brings efficiency and profitability contribution. And finally, some words about the new services. As also before. the new services don't just drive top line and bottom line. They also drive a lot of engagement. and how customers, how often they actually purchase from us. So customer loyalty. So, with, for example, Tili, with our product. we can see that those customers buy much more than customers that don't use Tili. Similar thing for fast deliveries again. Those customers that use fast delivery, they buy 2x compared to customers. that don't use these new type of services. But the good thing is that we're becoming quite good also driving services. So, looking forward, when we do new services. We can see similar adoption of these services. So the curve rate, how fast deliveries developing. is quite similar to the Tili where we have been very successful. So good news for us and of course we're learning all time. how to drive services in the company. So there's we really want to create this new norm for buying and owning. And what does that mean? You can look at it from two different perspectives. We really want to improve the core retail experience. So how the customer actually buys effortlessly. The effortless shopping experience. Of course the blazing deliveries. but also blazing fast installation services. So really creating the new norm there. The flexible payment options, as said an important topic coming up in the future. Buy Now, Pay L ater. And then the easier also. if the customer wants to have maintenance. or if the customer needs to return the product for a reason or another, that is fully digitalized. Improving really the core experience. Then, secondly, we want to build new winning concepts. New ways of really buying and owning. That's related to, for example, we launched a trade-in service, where customers can sell back their existing product to us. That's already there and we are expanding with new products and new categories to that area. We also have our pre-owned product line. The used products, that's taken up really well by customers. We're expanding that also to new categories. Then the third point, we will look at new ways of owning devices. Devices as a service, subscription models and also rentals. Finally, we also want to extend the lifetime of those great products that the customers have bought with relevant services. like insurances, warranties and maintenance services for those existing products. So those are the two things that's how we create the new norm for buying and owning. So key takeaways from my presentation would be that these adjacent services really drive profitability, differentiation and customer loyalty. We're well on our way with international expansion gathering speed there. Retail media will be a good and even better profitability driver going forward. And these new adjacent services that transform really the ways of buying and owning. Thank you. Thank you, Jyrki. Great presentation. Now we have time for a couple of questions. Maybe first one from here from the online audience. Regarding the international expansion, where do you see interesting markets outside of Finland? So currently we're focusing mostly on the Nordics and Baltics. So that's where we've seen the high 82% growth numbers for last year. But really our coverage will extend to larger Europe. But at the moment it's in these close by regions as well. Good, thank you. Then next question from the audience. Maria, please. Yes, thank you. I had a question on the Retail as a Media. I think you had the slide where you showed that you are going to double the profit from Retail as a Media by 2028. So the question is that is that Verkkokauppa figures and why the 2023 has an E at the end? Then if you could a little bit elaborate that do we talk about hundreds of thousands or millions? So what's actually the base figure? So I don't think we have disclosed that figure how much we actually do profits or revenue from retail media. So that's not something that I could give out. The E part I don't know at the moment. But yes, that's our retail media profitability. Yeah. It would be very helpful to get a little bit of sense that how much that would be in order to incorporate in estimate. But this is just a comment for future maybe. Thank you, Maria. Next, Rauli. Yes. Rauli from Inderes. A few questions on the international side. First of all, can you open up a bit of the profitability? I understand that generally the B2B profitability is quite low. So is there any kind of change in that in the international side? And secondly, what is the key reason for the European retailers to buy through you rather than kind of maybe more conventional sourcing channels? Yeah, I think overall the profitability of B2B wholesale looks different. Because of course then there is no marketing. You don't need to have marketing costs associated to that. So the difference is there already in the margin. But of course we're closely monitoring any business that do. how profitable it is. But we haven't split the profitability from B2B to C in any point I think. But you know it is profitable business for us. We wouldn't do it otherw ise. And what's the key reason for the European retailers? So the key reason, I think it's about availability. I think we have good. Well, firstly we have our own products. There's a lot of sales that retailers. they're buying our brands, not the global brands. So that's there. The second is it's about availability. So we have really good availability of products. And those are the reasons. And good prices as well. And maybe just a final one on that topic. So is that an area that you want to kind of independently push and see as attractive business? Or is it more related to kind of growing your overall volumes and gaining economies of scale through that? I think it is both. We see that there is a good opportunity. Especially looking forward with the small retailers. That you know there will be better margins of course with the bigger ones. And yeah, I think it of course adds to our volumes whether that is our own brands or global brands. Okay, thanks. Thank you. Next, Sanna, please. One question regarding the trade-in service. Could you give us an example of what product lines do you already have in the service and what would be the possible categories to expand into? Yeah, good question. So we have mobile devices. IT in general, so PCs, laptops. We extended now into smart watches. So anything of that regard that there is a demand. and there are brands that customers also believe and want buy. second hand we can bring there. So there is no kind of we won't do this or that. Right, thank you. And Kalle. Kalle Loikkanen from Danske Bank. I was wondering about the business outside Finland. called Europe. How big could this be? Either in terms of sales or share of total sales in let's say 2028? I think we haven't done any estimates. where do we want to take it. But as you can see already from our numbers. there is a lot to do still there. If we grew 17% last year alone. So there is still a lot more room to grow for sure. All right, and should we kind of expect the growth to be kind gradual. or how, you know, more tilted towards the end of the strategy period or? Most likely gradual. All right, thank you. Thank you for the questions. Thank you once again for the presentations, Jyrki. Next, our Chief Marketing Officer, Suvituuli Tuukkanen. will take the stage. Suvi will tell you more about how Verkkokauppa.com's brand. will help to rewrite the rules retail. and also about our sustainable operations. Please, Suvituuli. Thank you, Marja. As Marja said, I'll be covering our strong brand sustainability. but also I'll go briefly through some figures on our customer base. You already heard many times that we have a strong brand. or the strongest brand in the market. We feel that having a brand. is one of our key competitive advantages. Why is this so? Why is it important to have a strong brand? It's of course key in our commercial operations. Having a strong brand will mean that we will do marketing more efficiently. We don't have to buy all the traffic that comes in. We attract traffic more naturally. Also, it's more easy for us to add new categories to our product lines. Those are a couple of things. It adds to our customer retention and loyalty. to have a strong brand. Naturally it is also a guiding light internally. Having a strong brand is key also in attracting and keeping the talent. Our brand stems from our purpose to rewrite the rules of retail. That's something that has been there since day one of Verkkokauppa.com. And that's something that we are really, really proud. Currently already we are seen as a frontrunner in our business. 30% of Finns see that Verkkokauppa.com is frontrunner. in this area of business. And also it's something that is down. that goes deep down in Verkkis culture and Verkkis DNA. We are super proud of being the rebels in this industry. And even though we've grown to be the top brand in market. the most player. we still think that we have this culture. and we are still here to change the rules and challenge the market. So kind of challenge your attitude even though we are the leader. So let's not get lazy with the leadership. And with our rebel culture comes the key of being on customer's side. Always being the fairest in the market. People at Verkkis think that the job we do here is meaningful. We believe that it has a impact. positive impact on our customers. We are also very proud of what we sell and what we do. Very eager to recommend our products services. to our friends and networks. As has been mentioned already times. we have the strongest brand in the market. We have the best overall image. 65% of Finns see that we have a good overall image. We have the best brand preference. If asked where would you prefer buy. they will choose Verkkokauppa.com over competitors. Especially this is in those segments that are high spenders. high electronic spenders. Those especially prefer us. Also on B2B. These are based on a pretty new survey. We've surveyed both customers. our Finnish public as a whole and B2B field as well. So over a third of our B2B customers in general Finland. would prefer Verkkis. Also, as part of our strengths. we outperform the market in all our four customer value propositions. So what we promised customers. we promised them Finland's deliveries. ultimate convenience. On that we are a clear market leader. We are seen as the fastest and handiest in the market. We promised them probably always cheaper prices. There we are leading the market. Quite close to the competition but still leading the market. We have by far the winning assortment. So the assortment, the selection sell. is seen as the broadest and the most interesting. And also the being passionately on customer's side. So we are seen as the fairest. But still there is room to work on things we need to build on. As highlighted before. if we want to see and we do still want to see uplift in the numbers. the biggest leverage comes from the fastest deliveries. There is kind of the leeway there that we are working on. As earlier. the strong brand is key in our commercial operations. It's key behind driving the traffic. We are number one in traffic. or direct traffic that directly. not paid during the peak seasons. Overall we collect the most traffic. There you can see the Q1 numbers by Similarweb. Then briefly on our customers. This was already mentioned a couple times. but we do have a very large and very loyal customer base. And even though we of course see cyclical ups downs. in the development of our base. it is developing really nicely. 2010. our customer base, active customer base has doubled. And also when you look at the last quarter 2023. there is an upcoming trend. So customer activity is picking up. We have plans to work on this. Jyrki already mentioned the services part we are working on. Of course in the future we will focus on attracting customers. more customers in our segments. by systematically investing marketing. and becoming an authority in selected categories. Also as Nina mentioned we are working on improving still our customer journeys. Removing barriers, supporting making. raising the bar on the mile. being faster faster. and broadening the deliveries. to all major cities or in major cities. Also we're deepening the core customer relationships. With the services that was mentioned in presentation. like how valuable the trade-in services and Tili deliveries. and lifetime services will be. Of course amazing with the end-to-end experience. As mentioned already times. is the NPS numbers that are keeping improving. Then I will move briefly to the sustainability part. We did a fresh survey among Finns and among our customers. So 1,000 Finns and 13,000 our customers answered to this survey. We surveyed the interest towards these sustainable models. and sustainability topics in general. Currently we see that 60% of Finns will prefer players. because they are seen more responsible. Also around half of the Finns and 56% of customers. are willing to more. if they know that there is a more sustainable choice. Almost 50% of Finns carefully consider purchases. It is still important to be sustainable. On the right side you can see what kind of services do customers expect from electronics retailers. These are the top five things that they expect. Most of these we already offer. Customers want to repair their products after the warranty period as well. They want us to curate the assortment sustainability-wise. As Tatu mentioned, we closely monitor how happy our customers are with our selection. We do remove products that are not seen as a good fit. Customers are also interested in recycling services and used products. This was already asked, what kind of categories we have here on the forward selection. This is the line of used products. Demand here is rising really, really fast currently. 75% of Verkkokauppa.com customers. would like to buy used electronics if there were more available. We see a high rise here on the sales of refurbished eproduct lines. Then when you go to trade-in service, Vaihtokauppa. over half of our customers think that they have or say that they products. that they could sell to us if there was a refund. Then about the completely new services, as mentioned. device as a service type of services or products or renting. Currently already one quarter of Finns and customers. might be interested in renting or leasing a product. Of course that says that two-thirds still think that they buying. but I think that 25% is a pretty high number. A lot of potential there. This is going more deeper to the refurbished line. Sales have tripled and demand is expected to grow. Our long-term goal is to offer a viable choice. in all our relevant product categories. There will be new products here to come. This is also a good business for us. These forward products they generate significant product margins. For example in computers we see that products. have up to 60% more gross margins than A- brands. It's very relevant for us on that part as well. Briefly on trade-in service. We currently have 3,000 products that are rebatable. So you can get money back. As was explained when we launched service. this is the first service in the market that is fully online. And if you want to have it fully online. Two-thirds of all the transactions have been completed 100% online. An average rebate is EUR 133. That also is picking up very nicely. There is a lot of demand for these kind of circular services. We are working on to get more deep into this. Lots of going on currently in the sustainability part. The regulation is changing and we are to. or preparing for new ways of reporting on the CSR topics. As a result we are also working on to renew our program. to both suit the CSRD directive but also to fit our strategy. These are the topics we are on. or selected topics from our program. We are supporting the circular sustainable consumption. That's kind of the handprint part of sustainability. Offering long-lasting product. transparent fair practices. and then creating the new norm. Bringing in new circular services. Then is the Verkkis culture, Verkkis part. The responsible workplace. We are a diverse and inclusive workplace. We focus on continuous learning and quality leadership. And then is the sustainable operations and supply chain. That's kind of more on the footprint of the sustainability. So we focus on diminishing the environmental footprint throughout our value chain and ensure that we are socially responsible. And also of course throughout all these topics there is the good governance and business conduct. And to sum it up, these are my key takeaways. So the key, the core of Verkkis brand is rewriting the rules of retail and the strong brand will help us there. We are in the future also strengthening the market leader position with strong communications that will encapsulate the blazing fast deliveries. And as a third takeaway, we will continue utilizing our large and loyal customer base as our commercial leverage. Thank you. Thank you Suvi for the presentation. Now we have again time for the questions. So the first one from the online audience. You just talked about Verkkokauppa.com's brand performance. What are your plans to further strengthen the brand? How do you make sure that it stays competitive? Thank you for the question. Of course there is the customer experience. We do need to deliver the promises we make. As seen on previous presentations, that is the key. Our customers want to recommend us and are ready to us. and making sure that the experience is as good as it gets. That is one key in strengthening the brand of course. There is the blazing fast deliveries. We can broaden throughout the market. Of course then comes the communications and the brand. How does it talk and how does it look and feel and so forth. We are making a bit of renewals there as well. Very good, thank you. Any questions from the audience at the moment? If not, so I will continue with the online audience. You just talked about the large number of loyal customers. How do you ensure customer retention? Yes, that was also mentioned many times before. We will focus on delivering the experience. But as said, the fast deliveries is one key there. Those customers that use the super fast delivery service they are more willing to come back. So we want to broaden the reach of the fast deliveries. Of course that's one thing. And then of course there are the loyalty services we are on. or the services we are building on that works on the loyalty. And then of course we have different kind of loyalty mechanisms. We do segment our customer base and and try different kind of mechanisms. to ensure that the customer base stays active and hears us. with relevant news, relevant topics and we give them good service. Thank you, thank you Suvi for the presentation. Now we have one more presentation to go. It will be given by our CFO Jesper Blomster. Jesper is the latest addition to the management team. He started at the beginning of this month. So this is Jesper's first appearance on the Verkkokauppa.com team. Without further ado, please, Jesper, the floor is yours. Good, thank you Marja. And good afternoon to everybody. Just to introduce myself quickly, Jesper Blomster. I started here as a CFO earlier this month so in May. I will talk today about our strategy and our new financial targets. So we published our financial targets in 2028. And I also tried to summarize the presentations that you've seen. From my colleagues earlier today in terms of financials. So what does it look like in terms of growth? What does it look like in terms of profitability? If we start by looking where we today. we all know that the operating environment has been difficult. Panu talked about it. Consumer confidence is still low. Consumer purchasing power is weighted by the rates. by the inflation and so on. And of course all of this is spending. on discretionary goods. But despite of the market. despite of the tough environment that we have us. we have continued to transform our company. We've done the right things. To name a examples. we have built a best-in-class operation. enabling the fastest deliveries in Finland. Nina talked about it. A key driver for us also in the future. We've also continued to create a winning assortment. We have strengthened our core and we've expanded to new categories. And then Tatu talked about private label. We have continued to grow private label. We grew 7% in Q1, 29% in Q4. And of course we know that that drives better profitability as well. And then we have continued creating and ramping up new profit pools. We've heard about Retail as a Media today. pre-owned product line, service. Buy Now Pay Later and so on. All of these are already an important part of our today. but even more so in the future. At the same time we have continued to efficiency. and operational improvement through our systematic performance management. If we look at a couple of data points from the last months. we have improved our gross margin. We had a solid rebound 16.2%. if we look at the latest year. We know that is a good achievement considering the environment. where we are today. We also successfully executed our profitability improvement program last year. The focus of course continues on efficiency. but we also see that we have been able to decrease our fixed cost base. And then thirdly and very important well. we have done a significant step up in our inventory and category management. We have close to one-fourth decreased our levels. where we were back in 2022. We've done the right things as said. We are set for a new strategy and we have now linked that. published new long-term financial targets. These are to 2028. We have four targets. The first one is growth. As we said earlier. our aim is to grow on average 5% annually more. and we want to outgrow the market. We want to increase our profitability to 5%. and the third target of course is a key contributor to that. Fixed cost efficiency, getting our cost. to below 10% of our net sales. And then fourth our target is to pay 60%-80%. of our annual net profit in quarterly growing dividends. If we look at more in detail what these key are. that get us to these targets. And let's start with growth. We've set four principles to drive profitable growth. First we build on our strongholds. We grow and scale our core business with the lowest operational costs. Expansion of course is a key driver for us and a very driver. but it will be done in a manner. and driven by needs. logistical suitability and strong strategic rationale. You've already heard many times about services and retail media today. but it is an important growth driver also in environment. and especially a profitability driver. And then fourth we want to grow with our own profitable brands. Our short-term focus is on our strong core profitability. but it will be followed by expansion. and it will accelerate further to get us to that above 5% level. Our core growth will be driven by winning market share. We believe that we will win through the strong assortment. our fastest fulfillment and operational excellence. Jyrki also talked about the B2B business. We want to maximize the potential B2B. but in the segments where we operate. The market will also return to growth eventually, we know that. And we aim to capitalize that. Panu talked about this in part. and we believe that we are well positioned. To capitalize on the tailwind from the market and from the consumers. Services again as said drives growth, drives loyalty, drives profitability. So those are the key drivers for core. but then as said expansion is a key for also. to reach the average 5% growth. Category expansion as said it will be efficiently. it will be done discipline. and we will do it utilizing our existing platform. New markets, new businesses, Jyrki talked about it. An important growth driver for us also to maximize our potential. Then if we look at profitability and start with gross margin. We are not disclosing an explicit gross margin target 2028. but we do believe that there is room for improvement. The key drivers for the improvement are efficient strategic sourcing. We do see further potential through streamlining our selection. supplier consolidation and direct sourcing. Again, services [are] an important growth driver. [It is an] important profitability driver and is something that will strengthen our gross margin. Own brands, given the higher margin, drives a positive impact on our profitability. Additionally, we do see further potential in our category management to drive positive gross margin impact. On the other hand, we do see that the pricing environment is challenging. We also are saying, and I just said earlier, that we want to win market share. We believe that that will create some pressure to our gross margin. Also, the fast services, the fast deliveries that we are offering, will create some margin. But all in all, we do believe that we have further potential to improve our gross margin during this strategy period. Our third target was cost efficiency. The target is to decrease our fixed cost as a percentage of sales below 10% level. Growth of course is a key driver here for us to achieve that. Cost efficient growth. We already have a light and scalable cost structure. We have scalable, highly automated online platform. We have a cost efficient retail operation. We have best-in-class efficiency automation in our logistics. All of these will contribute to that target. We also said already earlier we've done the profit improvement program last year, which has decreased our fixed cost base. We will continue driving efficiencies. Automation, AI, and then of course systematic performance management are key here. But sales growth of course for us to reach the 10% level is a key lever. Then to summarize growth, gross margin, fixed cost. Our aim is to get to EBIT margin of above 5% by end of 2028. It is enabled by cost efficient growth, and it is enabled by gross margin improvement. We have room to improve our gross margin. Growth will drive cost efficiency, leverage. and by that and by the plans that you've seen today. we believe that we will reach the above level. by the end of the strategy period. We've talked about growth. We've talked about now cost efficiency profitability. but we also aim to deliver our plan with capital efficiency. We have capital operations. and we continue managing this systematically. We've talked about our inventory turn and inventory optimization. That work of course continues. We have ongoing measures there and it will be also priority. through this strategy period. There was also a good question about our CapEx. The plan that we have gone through today is low in CapEx requirement. The investment focus that we have here is focused growth. and operational efficiency. So basically what I've gone through earlier. And we believe that the CapEx requirement will remain approximately at 0.5%-1% of our total net sales. As the takeaways. the profitable growth will be driven by our core. but expansion of course is a key. It will be done in a disciplined and manner. and it will be driven by a strong strategic rationale. Gross margin improvement potential services. own brands, efficiencies. will and we believe will have a positive profitability impact. And then the light scalable structure. enabling profitability improvement and cost competitiveness forward. will take us to that 5% EBIT target that we have set to ourselves. And then fourth we have an attractive dividend policy. 60%-80% of our net profit in quarterly growing dividends. So that's from my part. I believe we have the next. so I can invite my colleagues to the stage. Thank you. It was nicely put together, the presentations before. and concrete for implementing the strategy towards our financial targets by 2028. And now we have all the presenters here on stage answering your questions. And maybe just a reminder for audience. so there is this question tool right below the window. on the event page so you can send your questions comments. over here to me and I will then address those to the speakers. But now let's get into the questions. Maria, your first one please. Yes, thank you. Just a bit of clarification of the fixed target. to bring that below 10%. Since the last restructuring that you started last year. I think you are quite lean and mean in your operations. So where would need the sales land in order you. to actually get to this 10% threshold? Panu, please. Yes, I can take that. Thank you, Maria. Obviously those long-term strategic targets they go hand in hand. So we need a certain amount volume. to be able to have the maximum effectivity out of the system. We have invested in our warehouse chain. logistical solutions where the higher the volumes the better the scale. So basically all three components go hand in hand. With the growth we can scale, we have built up business. that the scale doesn't burden the cost structure in the way. as it used to be. Thank you, Panu. And then thinking about the ambition of 5% EBIT margin. How much of that improvement is driven by Retail as a Media? Yes, I can take that as well. The easy ones. We haven't disclosed the actual amount what we have today. What you saw today is that we have the ambition to double it. This is verified by the market. We expect the market to change, or how analysts are saying the market to change. So that will be a part but we haven't disclosed which or how big the part will be. And I think this final question is also for Panu. What was the last customer feedback you read? The last customer feedback was yesterday in LinkedIn, where a customer saw the value proposition which we had in the stores. It was in Finnish obviously. Me emme tuputa, so we don't force anything. And it was nicely written that it is quite. It feels a relief to go to a store where you can rely that the staff is there to you. and guide you through your journey. On purchase or purchase. but not pushing a brand or a product which has incentives for themselves. So really being transparent and on the customer side. And then reading the commentary that. where everybody was basically stating that it's nice to have who. let's say is there to support but not to push products. Good, thank you. Then maybe a couple questions from the online audience. I think this one refers to Nina's presentation. You mentioned about the average order value increase of EUR 22. Is that increase from more products basket. or trading up to more expensive items? I mentioned also this question relating to delivery. average order value if there is an impact. So first that one which was promised. So there is 86% as mentioned of the one-hour deliveries for consumers and the rest is for companies. From the company's order value in that order base, it's about one-third. And the order value can be even up to 20%. So rough numbers but there is an impact. What comes to the product mix underlying this 22% average order value increase, it's it's spread across different categories and different demographies. So there is there is really kind of a specific group of items that we could give there. Okay, thank you, Nina. Then the next one is addressed to Panu. All the good things that were presented, which one is the most important to get right and not compromise at that at all? Fastest deliveries. That was a short one and quite good. Good, then maybe next one from the audience, Kalle, please. Yes, thank you. Firstly, on perhaps continuing on the fixed costs. In your kind of planning and modeling, are you assuming that the level of fixed costs would be pretty much flat in absolute terms in 2028 versus 2023? Because you have obviously there's you know price inflation and salary inflation, but then you have the automation and other actions that you will be doing. But what about the absolute level? Will it be higher in 2028 or lower? Maybe I can help out. Jesper, he's been three weeks with the company. I think for us it's not that much about the absolute level. It's more about the profitability and the relation to revenue. So building up processes and the biggest. I mean processes going through certain organization, which can be let's say scaled to the maximum. So we have obviously by executing the strategy. We need certain capabilities, we need certain investments. Some are CapEx, some are OpEx. But that we can steer with the revenue levels. But we are not that fixed on the actual cost base such. but we are more I mean interested in the ratio revenue. or the profitability as such. So And we haven't disclosed what is the targeted level. because that goes slightly hand in hand with roadmap. and where we push and what kind of initiatives we take on work. Because sometimes you need to pre-invest in capabilities. then to have the yield in profitability. Yeah, okay. I was just wondering because if you grow top line average. let's say 5%, I know your target is more 5%. but let's say 5% then I think the absolute level of OpEx. can't really increase for you to reach 5% margin, EBIT margin. So that's why the question. But yeah, I understand the answer. Then perhaps on the kind of the image. and I don't know who would be the right person to that. but traditionally I think both from my experience. and you know friends and colleagues and on. Verkkokauppa.com has been typically seen as cheapest. with the player with the prices. and it's been easy to go to website. because you know that it's a competitive price. However, I think that in recent you year. maybe years. I think at least some people have perhaps noticed that the difference. to competitors, to the competitors. has kind of been removed. or Verkka is actually a bit even pricier than some of the competitors. I'm sure you do a lot of kind of comparisons. so would you agree on this kind of statement. or do you have a different view on the things? Well, I think we have a slightly different view on that. What you need to understand is that in the last couple years. there has been market decline that was not expected. And in our line of business that leads always to a surplus inventory. So it is inventory issue. that every operator needs to make sure that the inventory healthy. and there are no write-offs to be expected. We were quite sufficient fast. by driving our inventory down, matching the demand level. So what you have seen the last couple of years. it's not the normal surroundings. but everybody to be forcing forced. to make sure that the inventory is turning. So that is due to certain kind of activities. Everybody does it in their own way. And if that's on a level. we were not anymore, let's say, forced to do those kind of actions. We also said that we're going to focus on profitability. We said it openly and disclosed that these are our targets. We believe and these surroundings. it makes more sense to make your operations as efficient possible. and also make sure that we make a healthy levels. despite the demand. So that was a business decision on our side. As you said or today. according to studies we have a good price image. We have a dynamic pricing tool steering many thousand SKUs at the moment, where we can make sure that we are on par or we are below par. On top of that we are building our own brands to make sure that, like Tatu showed you that showed you we have the matching quality but really beat them on the price level. So having those high-class own brands with significant below price points than the A- brands we can actually fight the price fight and make sure that we are probably always cheaper. Thank you. Then Sanna, please. Thank you. I'm actually continuing on the pricing. You mentioned that there is no need to compete with prices once the market picks up. But then you also mentioned in the ad as well that you will become cheaper. So what do you mean by this? Are you actually actively prices. or will you become cheaper than competitors. or does this stem from the products. or or can you elaborate on this? Maybe I take that because then Tatu can continue. I said that typically when the market up. price activities decrease. I didn't say it doesn't matter anymore. But typically because there's a demand. you are not forced to push out your inventories. So that's maybe picking up to question. but maybe Tatu can continue from this. Suvituuli maybe. Suvituuli. Yes. Could know this from our advertisement. As said. that is happening on market. but the ad actually is related to a campaign we are running currently. And have. all the time we have around 3,000 products that are discounted. So they are on campaign. And that is a campaign that we wanted to pick up. that you know we have good price levels average. and still on top of that we have the campaigns we have discounted. So that kind of is related to that. So it's not a promise for the market. to lower down the price levels. And we also measure how cheap we are. We have a tool called How Probably Always Cheaper. And we use that and that also tells that. we see in the numbers that we are beating the market. Right, thanks. Then regarding the growth targets and how to there. I assume that it will require some costs. or increase in those. Will you plan to invest in marketing some more? And how much? Yeah. If I take that. So as you saw on my slide. there was that market share acquisition cost. and that is included in our marketing is included in that. So yes, marketing investment is expected with the growth that we are going after. Okay, thank you. Maybe then one question from the online audience. What are the key differentiators to keep the big global players at bay? Is fast delivery the biggest advantage at the moment? Who would like to answer this, Panu? Well, I can take that as well. Yes. I think we today pretty much showcased many elements of our business where we can exceed where we can differentiate and where we can step change or have a certain delta to domestic players, brick-and-mortar players and also global players. So the fastest deliveries, I think it's a really nice tool shifting offline to online and making online the preferred choice, the preferred channel. All data is that. and also our internal data is vouching that that's the right way to go. It goes also for domestic players. where well they can match speed. they can't match obviously availability. because there are no local logistics solutions on site. Typically we can match the prices. We can offer own brands as well. So there are many ways we can tackle domestic. and the international players as well. Obviously domestic players are the challenge. but also we look outside and sure. I think more on the side. that we benchmark ourselves to global players. but we understand that the biggest consumer cohorts are here in the Finnish market. Thank you. Any questions still from the audience here in Helsinki? Right, good. And there is no further questions from the online audience either. So I think it's not time to conclude the Q&A session. Thank you for the audience, for the good questions and your activity. And so we have come to an end of this whole event. I would like to thank all. participants over here Helsinki. and of course also everyone there online. Thank you for your participation. I hope you have got more insight into business. and strategy execution. Also I would like to thank all our presenters here. And also everyone contributed to the presentations. All presentation recordings and materials. will be available on our website. after the event. You will also soon get a link to a short feedback form. I would be very happy if you could spend just a couple minutes. answering those couple of questions. For the audience here, our management will still be available. After the event and will remain to discuss for a while if you will. Other than that, I would like to thank again. and wish you a very nice summertime. Let's keep it tucked. Thank you. Thank you.