All right. Good morning, everybody, and welcome to this year's first interim report. If you have any questions during the presentation, please feel free to send them to investors@Verkkokauppa.com, and the questions will be then answered at the end of the presentation in the Q&A section. Today, joining with me and also available for questions, CFO Mikko Forsell and Investor Relations Manager Marja Mäkinen. In my presentation, I will start off with the highlights from the report of this morning, and then in the H2 , we will give you insight on company strategy, development, and then our view on the market and consumer behavior. At the end, we will have key takeaways and then questions if there are any. Let's start with the report.
Underlying market obviously not in favor, and we are not pleased and happy about the outcome that we have on revenue and EBIT development. We were expecting somewhat higher. If we start with the underlying consumer market, so what we already saw end of last year, that especially in consumer electronics, the demand was getting softer and softer, somewhat due to the higher comparable figures and investments made in those categories during the corona time, and partly also some consumption distributed from products into services. After that, we saw a continuation of the consumer behavior in this manner. Then on the twenty-fourth of February, we saw the next crisis hitting as Russia decided to invade and start war in Ukraine.
Right away from that day, we saw that the Finnish consumer was anxious and worried about the situation, and a lot of investments and purchasing decisions were postponed, and we saw that effect immediately in revenue development in our stores and in our e-commerce platform as well. All in all, combining these two components, we end up in a revenue declining by almost 7%. A highlight and a positive sign can be seen in our B2B business, which is really solid, continually growing and gaining market share, growing double digit 12% at this period of time.
I think it's good to mention that the B2B business as such is not that heavily impacted on the anxieties or the feelings or maybe the worries that the consumer takes in consumption or purchasing decisions. It is also somewhat expected that that line of business typically continues also in these circumstances, at least at this given point. Our export sales has been basically two years strongly headwinded. First of all, because of all the travel restrictions because of the coronavirus. Then when the war started, we as a company decided to stop doing business with Russia, which basically meant that big part of the export business went away. Last year, the Russian part of our export business was around EUR 20 million.
We were expecting that to recover and grow towards the end of the year. The magnitude that we lose or lost or will be losing on revenue in e-export due to these circumstances is about the same size. Online consumer behavior acting the same way as every consumer overall. Also not typically our online business not gaining but losing sales almost 5%. For the first time we start to report our assortment in two different components. First of all, we have the consumer electronics, and then we have the evolving categories. What we can actually see that the market displays also in the demand and consumption in each category. Evolving categories actually grew quite nicely by 10%, so we are gaining market share.
Retail is going online, so the assumptions for our strategy are still there. On the consumer electronics market, we see where the prices are higher and maybe as a consumer, you can postpone your purchase. These kind of anxieties really are hitting that market, and we lost total revenue of 8%. Basically, in consumer electronics, only computers had a positive development due to strong B2B performance. In evolving categories, we see a lot of categories growing, sports, toys, baby and family products, for example. When we then look at the consumer market as such, which is reported by GfK, so the whole market, including all the big distributors and B2B players as well, grew slightly by 2%.
If you look closer into the consumer channels, in that category or in those categories where we also report and our main competitors, the market declined somewhat by 1.7%, and our performance in those categories were the same. Basically, sharing the market development with our main competitors. Profitability and profit as such for our line of business typically comes with revenue development and growth. In a situation where we are not able to gain revenue, it is almost impossible to have stronger EBIT development at the same time. Losing top line, gross margin being under pressure because of the market situation and somewhat higher operating expenses then ending up in EUR 0.7 million total EBIT and not being close to the high record levels that we had previous year.
If you look closer to the P&L, we talked about the revenue development, and also we see that gross margin was somewhat under pressure. This combination, so we lost gross profit over 10%. In the expenses, we see that in personnel we have been investing in capabilities, in resources, making sure that we maintain our strategy execution, mainly in the IT department. In other operating expenses, we see two components to the increase. First of all, the general inflation also hitting our service partners and our pricing in those partnerships. Second part, the major part, comes from our outsourced warehouse operations with a higher inventory, higher storage cost, higher handling costs in an outsourced logistics operations is the main reason for these expenses to be higher than previous year.
All in all, obviously a quarter that we cannot be happy about. We were expecting, at least at the beginning of the year, stronger one. Market not in favor of the business. Some highlights, B2B, solid and strong performance continuing. I think we managed decent on the margin, despite having a pressure from the market, especially in consumer channels and in consumer electronics. Because of the company's overall good situation and financial state, it was not a big surprise that the board decided this morning to pay out the quarterly growing dividend, and dividend will be paid out EUR 0.061 for this Q1 . Thank you for all investors and owners for your support and trust.
From the KPIs, we basically tapped the revenue, the e-commerce and the B2B segment. What you can clearly see that the first three quarters are somewhat the same size when it comes down to revenue. The major part of the year's performance in revenue development, in EBIT development, is flavored by the most important quarter, the fourth one. In the cost position, not able to scale while losing revenue, so this is typically that we need revenue development to be able to scale down costs as well. From the balance sheet, few interesting points worth mentioning. I somewhat tapped already into the inventory levels, so they are surplus of 10% to previous year. A few reasons behind that. First of all, we are just on the verge of the upcoming season.
We are expecting a better spring and summer season in outdoor and garden categories, for example. We have purchased more than previous year. The season is somewhat started slower than previous year due to the weather conditions, but that obviously is a thing that can and will probably also change. Second part, we were expecting higher revenue development. With the revenue development not on the level that we estimated, we have somewhat higher inventories on those categories. Third part is because of the uncertainties due to supply chain issues that we are facing or we see in the global scale. There are a lot of containers on ships waiting outside the harbors.
There have been many lockdowns in Chinese factories, so production size has been on hold. These things will have an effect long-term. We expect some supply chain issue and availability problems when going in the latter half of the year. Because of this, we, in certain categories, decided to purchase all the inventory and make sure that we have best possible availability throughout the upcoming season. Cash flow is negative at this point of the year. Investments, the last one regarding the automation, you can see in the figures. Cash position is below that of last year. A big part of it is tied to the higher inventory. We also distributed an extra dividend last year.
We have also negotiated new financing tools in March. Let's step to the Part two of my presentation, strategy development. As a reminder, we develop our operations throughout customer value proposition, providing the best possible and most exciting assortment in an experience environment, utilizing our delivery network and high availability with local warehousing as the most trusted and most recognized e-commerce player in the Finnish market. Two steps taken and finalized. First of all, the internal logistics investments throughout the automation here in Jätkäsaari is done, completed. It's been up and running in operation for some weeks now. We are now ramping up it and to the full capacity. The first weeks have shown us that we are about 4x faster than doing it manually.
The expectations on scaling the business while growing will be met at the latter half of the year. Second step taken, and at this point finalized, was the closing of the historic first M&A case ever for this company. On the 1st of April, e-ville.com was closed as an acquisition, and the first major opportunities will be gained throughout the on-site sourcing capabilities throughout our own offices. Better terms, better availability, better quality, and also faster market will be significantly better than before. Maybe a few words about our highlight. We haven't been talking that much about the B2B. We have been starting to develop that area since two, three years ago, mainly focusing at the first step for the SMB market, small and mid-sized businesses, making it as consumer-like as possible.
Ease of shopping, good availability, right prices with your own interface is something that our business consumers and customers are really appreciating. Now stepping more and more also into the enterprise and public sector. In the public sector, we haven't been active yet, so we have some development work that we need to do. We might be in the position to start taking part in those tenders as well. End of this year then beginning of next year. We have been implementing new kind of services for them, utilizing the same financial services as for the consumers, device as a service, for example. We are in partnership with construction companies.
There are a lot of opportunities that we have been taking advantage of, and we see a lot of potential still to come. Our assortment, regardless of the market, is developing steadily. We have now almost 90,000 SKUs in our assortment. It's over 10,000 SKUs more than we had year before. Partly really strengthening and deepening the assortment in core categories, also getting into new subcategories, new products, utilizing our market intel, utilizing growth hacking, utilizing trends and opportunities. With that insight, we can then make decisions on new launches, maybe not this year, but probably then next year. Next, partly innovation, we internally developed an own financing tool. It's called Account in Finnish, Tili.
It is a super easy way for all of our customers to register, apply for an account, and use it when there's a need for it. If you don't use it, you don't have to pay anything for it. If you utilize it, you get up to 45 days interest-free, and expense-free payment method. We are quite excited about this new way of offering financial services to our customers. We have been quite strong with Apuraha, our own customer financing product that we have been offering, and now this is a new way of getting that portfolio even wider. The last part of the presentation, the business and the market is probably somewhat harder to estimate than it has been for a long time.
What we at the current moment see the consumer is quite heavily affected and impacted by the surroundings, by feelings, by fear, by anxiety, and that reflects on consumer confidence, and that affects on the consumer spend. That will at some point bounce back. The second uncertainty is related to the actual purchasing power. We see already that inflation is or has kicked in in some commodities. Fuel prices, electric prices for groceries will start or continue to increase. The uncertainty is what is the purchasing power when looking at the latter half of this year? Obviously, we understand that export business is something that we have significant part of lost and it's not expected that to recover any day soon.
Still there are positive underlying things. B2B is expected to outperform the consumer market as it has been for the Q1 as well. We expect evolving categories to maintain on the same road going online. Specialty retail, especially is going stronger online from offline, so there are opportunity for us as well to make sure that we make the best possible outcome in these uncertainties. Also good to mention that we have a strong balance sheet. We have a good strategy in place, so we also know what to do when it comes down to long-term targets.
Maybe good also for international listeners to understand that in the Finnish broader market, the situation that has evolved since the start of the war. I think we are somewhat closer than other European countries maybe. You can see here significant drop in consumer confidence indicator. It's measured every month. The consumer confidence was actually on a quite low level in last year December, reflected somewhat also our performance. It was starting to recover, but then the war started, and it really collapsed strongly and so partly a surprise that in April, a few days ago published these figures, the April was even worse than March.
As low confidence from the consumer side, we have seen short period just in the beginning of 2020 when corona hit for the first time, and then the financial crisis, 2008. This is something that affects and is a big decision maker for the consumer at the moment. Obviously, this will milden at some point, maybe it will bounce back. At the moment, the feelings are quite heavily steering the Finnish consumer side. Because we saw some underlying assumptions being vanished, being washed away when this war started, export business, consumer demand, et cetera, we were quite early on being transparent and guiding this year on a renewed level.
We expect revenue to be somewhat somewhere between EUR 530 million and EUR 590 million and EBIT to be somewhere between EUR 12 million and EUR 19 million. The brackets are quite wide at this point due to the reasons that the different estimations that we have inside these and the calculations really differ from each other quite heavily, as there are a lot of uncertainties still at this point. We hope that it clarifies throughout the summer sales and when going to back to school, back to business season, and we can be able then to narrow down the brackets. At this point, there are different scenarios still possible. Long-term targets unchanged and dividend policy, we are very proud of paying out the quarterly growing dividend, and we hold on to that promise.
If you summarize the whole presentation and the first part of the year, in a market where we haven't been before, things happening that were not something we could estimate, things not in favor of our business, consumption, consumer electronics, and export business. In those areas where we can have decent performance or even nice growth, I think we managed to do that. Also the margin not getting a bigger hit as the market is really tough and there is also somewhat an industry problem as the inventories are high, I think was a solid performance. If looking then long term, things are getting done and completed as planned. First acquisition, first bigger investment to automation.
The next one will be the pocket packaging automation, which will be installed just close to the AutoStore automation system. Maybe as a last thing, we will be keeping our heads high. The market is tough, but having our eyes clearly towards the long-term targets and executing as promised. Thank you all and let's go to the questions. Marja.
Thank you, Panu, for the presentation. There is one question regarding our cost levels as we saw an increase in fixed cost during the Q1 . Is there some one-time item impacting it, or should that be seen as a new normal for the coming quarters?
Yeah. To the first part, there are no one-offs either way in the personnel or other operating expenses. They are in our business quite steady or stable. We can't steer them in a bigger picture high or down that dramatically. But what we can do and what will be shown partly then in the latter half of the year, especially if revenue would start to recover and we would gain growth throughout the automation, we can have higher revenue levels with the same kind of cost levels. That would scale the business, and that would be then shown not in the absolute figures as such, but in the cost ratio per revenue.
Second part, which is partly now shown and maybe not shown at least on the same magnitude is that in our outsourced warehouse, we have distributed some part of the assortment because we were conducting the automation installation here in Jätkäsaari. Some part we can distribute back to this own premise and the higher the inventory and the higher the revenue is throughout the own automated system in proportion the lower is the external warehouse operations and costs.
Thank you. That was all. There's no further questions.
All right. Thank you, Marja. Thank you all, and have a great day. Bye-bye.