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Verkkokauppa.com launches a profit improvement program to secure its profitability - the company to initiate change negotiations
Verkkokauppa.com launches a profit improvement program to secure its profitability - the company to initiate change negotiations
Verkkokauppa.com Oyj Stock Exchange Release / INSIDE INFORMATION 16 January 2023 at 10:00 EET
Verkkokauppa.com is adjusting its business operations to meet the declined demand. Since the spring of 2022, consumer confidence has weakened significantly and general economic uncertainty, inflationary pressures and rising interest rates have weakened consumers' purchasing power.
The company is launching a profit improvement program, with the goal of a total annualized profit improvement of approximately EUR 10 million, of which around EUR 5-8 million is expected to be realized in 2023. The program aims to improve the company's operational efficiency and competitiveness. The key operational efficiency improvements are related to the company's assortment, inventory, delivery flow and organization structure. In relation to the streamlining of the assortment, the Company announced earlier today a write-down of EUR 1.6 million in inventory.
As part of the profit improvement program, the company will initiate change negotiations in accordance with the Finnish Act on Co-operation within Undertakings, the aim of which is to reform the organization's structures to reflect the company's long-term strategy and to align the number of personnel and expenses to the prevailing demand situation.
"Verkkokauppa.com has been driven by growth from the beginning. However, at the moment, the challenging market environment does not provide the conditions for growth, and at the same time, the increased cost level weakens our ability to make a profit. With the measures we are taking now, we want to ensure the company's future profitability", Panu Porkka, CEO of Verkkokauppa.com, explains the changes.
"Throughout the year, we have already taken measures to improve profitability. In addition to the actions already taken, the reorganizations planned now are necessary to improve competitiveness, increase flexibility in the workforce and reduce fixed costs," says Porkka.
The change negotiations will commence immediately and cover Verkkokauppa.com's entire personnel, approximately 770 employees. Possible redundancies, part-time shifts and essential changes to employment contracts apply to a maximum of 110 people.
The planned measures aim to achieve annual savings of EUR 6 million in personnel costs. Of the savings, EUR 3-4 million are expected to be realized in the second half of 2023 and in full in 2024.
Depending on the outcome of the negotiations, the planned restructuring is estimated to result in costs of approximately EUR 1.3 million. The costs are expected to be recognized in the second quarter of 2023 and are expected to be fully realized during 2023.
More information:
Panu Porkka, CEO, Verkkokauppa.com Oyj
panu.porkka@verkkokauppa.com
Mikko Forsell, CFO, Verkkokauppa.com Oyj
mikko.forsell@verkkokauppa.com
Tel. +358 50 434 2516
Marja Mäkinen, Head of Investor Relations and Corporate Communications, Verkkokauppa.com Oyj
marja.makinen@verkkokauppa.com
Tel. +358 40 671 2999
Distribution:
Nasdaq Helsinki
Main media
www.verkkokauppa.com
Verkkokauppa.com empowers its customers to follow their passion by providing a wide product assortment of around 90,000 products. Verkkokauppa.com Oyj serves its retail and corporate customers through its webstore, megastores, kiosk and network of collection points as well as fast deliveries and various services. As Finland’s most popular and most visited domestic online retailer, its deliveries cover around 75 percent of the Finnish population within the next day. The Company has four megastores: in Oulu, Pirkkala, Raisio, and Helsinki, where its headquarters is also located. Verkkokauppa.com employs more than 750 people and its shares are listed on the Nasdaq Helsinki stock exchange with the ticker VERK.
