Good morning everybody and welcome to Verkkokauppa.com, First Quarter P resentation. If you have any questions, please feel free to send them to investors@verkkokauppa.com, and the questions will be then dealt at the end of the presentation in the Q&A section. Today, as usual, joining with me and available for questions, CFO Mikko Forsell and Investor Relations Manager Marja Mäkinen. In my presentation, I will first start with highlights out of the report of this morning. We'll give you some insight on company strategy execution, then market outlook, and at the end, then key takeaways and questions if there are any. Let's start with the market and the environment. The big picture is pretty much unchanged, although we see slight improvements in consumer confidence in their own economics, but still the level is quite low.
If you look at the consumption and the purchasing power as such, which is the main indicator and impact, also our business, inflation has been ongoing for on a high level, interest rates has been going up, and there is expectations that there will be additional increases in that as well. The actual purchasing power has been decreasing, and it will be decreasing throughout the year. In a big picture, the environment is pretty much unchanged. These bigger drivers have been also impacting our B2B business. Biggest part, approx 80% of our B2B business comes from small and mid-sized businesses, and they have been struggling the same way as consumers have been struggling, and they have been postponing or holding on investments.
If we look only at consumer electronics market here in Finland during the first quarter, the price fight was not as intense as it was the previous quarter. That's maybe also one good thing to mention. If we jump into the report, start with the top-line development, I think it's fair to say that revenue declined only by 2%, that's a good performance from the company. In major segments and channels, we saw a small decrease, which was expected to be seen. In our export business, we saw a nice improvement. It's fair to say that the levels that we were on previous year have or were quite low.
The export business had been struggling for some period of time, also the impact on losing the whole Russian export business also impacted the levels of previous year. We have been capable of developing new areas, new markets, also to a nice better margin. If we look at the second important highlight, the margin as such, we see that the gross margin improved nicely, was at the strong level of 16.6%. Few drivers behind that. Well, first of all, the market not being that price fight, price fought, our campaigning and pricings activities weren't quite affected, had a positive impact on the margin. Secondly, the sales mix impacting it as well.
Sales in lower margin core categories declining by 2%, sales in higher margin categories growing on the same amount, having a total positive impact on the margin. The third reason mentioned is our private label categories performance. With the company acquisition of a sourcing office in China, we have been able to find new interesting products, introducing them to the Finnish market, and gaining higher margin than out of A-brand products. If we sum up revenue and gross margin development, gross margin impacting gross profit to increase by 5%. On a cost position, we were pretty much on par the previous year.
In personal expenses, a small decline, so we were able to have our levels of resources matching the revenue levels. On the other hand, we have been investing in certain capabilities and resources as well due to strategy execution. These two things pretty much leveling each other up. In other operating expenses, we also saw the impact of inflation, and we were not able to mitigate all of that throughout our own operations, but in a big picture, the cost levels on previous year. For these kind of reasons, we saw a nice improvement in the comparable EBIT, which stood at EUR 1.4 million. In the operating profit, we have an one-off provision regarding the change negotiations, and that's the reason that the operating profit was below that of the comparable operating profit.
All in all, a solid performance from the financial side during the first quarter. If you look at the balance sheet, we have been somewhat struggling and working hard on inventory levels of getting them down to matching the market and demand side. Typically, the first quarter, we can see a small increase in inventory levels as we as well are preparing for the upcoming spring and summer season. This didn't happen on a huge magnitude, and if we compare the figures to previous year first quarter, we see a significant decline by 16%. We have been working hard on getting the levels to the levels we want them to be.
We are not still satisfied with the outcome, and we expect the total inventory to go from this point down until the end of the summer. Investments are quite moderate, EUR 1 million, mainly relating to the site renewal of our e-commerce platform and also some data analytics capabilities. Cash flow significantly improved from previous year. Cash position solid. On equity ratio, we have still room to improve. Let's jump into the strategy part. We are mainly driving strategy on two different perspectives. The short-term perspective is to get the profitability back on decent level. During this year, we have a solid program which includes over 200 items, 2,000 initiatives, which are divided in operational teams and commercial teams.
We expect this program to yield on this year's level somewhere between 5 to 8 million EBIT improvement and on a yearly level, about EUR 10 million. On the right side, you can see that we were pretty much spot on target during the first quarter. All improvements conducted and yielding the way we expect them to yield. You can also see that the major part of profit improvement will be seen during the latter half of the year. The program is going according plan. On the other hand, we are also developing the company according to our strategy and according our long-term targets, giving and creating value throughout our assortment experience, speed and flexibility, and brand position.
We have been able to introduce new recycled, reused products in our lineup, so it's not only a commercial, but it's also a important part of our sustainability program. We have been implementing dynamic pricing capabilities. First integrations are ready. We are now in the phase of testing this out. The biggest positive impact tend to be seen during the latter half of the year throughout the gross margin improvement. In our speed and flexibility, we have been focusing on internal logistic processes to improving them and making it even faster than it is at the moment. We have also introduced new ways of delivering products in Helsinki area even faster than before.
The brand is in a solid position, although it's fair to say that in profitability improvement program, we also look quite closely to investments and marketing spend as well. Although that we have been making some sacrifices on that front, the brand is still on a strong position. We also have been working out on new brand and guideline concepts that will be then rolled out during this year. Few deep dives from the experience improvement. The biggest e-commerce site renewal in company's history is also going according plan. Major parts of the visuals have been updated. Major part of the technicality inside the site has been improved already.
Now we are working on searchability, category paging, purchasability, et cetera, so these kind of items, and we expect to be close to ready within this project by end of the first half, and it is obviously an ongoing process as this is a big part of our business which we want to make sure that it's top of line. Like said before, we introduced express deliveries for most people living in Helsinki. All of the assortment that we have in Jätkäsaari urban logistics hub, so between 30,000 and 40,000 SKUs we are able to deliver within an hour.
The test has been positive, so it's roll out as a part of our business, and at the moment we are looking closer into other store locations as well to expand this kind of service also to those store regions. Also interesting to see that consumers are more and more likely to spend some money to have Those e-commerce deliveries even faster at home. In March, already 8% of all our deliveries were connected to a speed delivery capability. The internal share has been over doubling during the year. The last new feature which we are also very proud of just launched a week ago. We have been developing our own trade-in service, totally integrated in our purchasing funnel and in our architecture.
Basically a customer can, from the home couch, have giving a value to the product that they have holding on. We give a fair price to this each item. Those items are then sent with our directions to external partners. The consumer will have the credit throughout this trading right away on their account to be utilized on our website. Totally integrated just a week ago launched. We are quite excited that this is also a nice way of attracting new customers, nice way of improving experience, but it's also an important part of our sustainability program. How do we see the year yield? Like said already in the beginning, the big picture is unchanged.
Consumer confidence has slightly improved. Now we are more looking at the purchasing power because that is the main driver on consumption, and the purchasing power has been decreasing in Finland because the inflation being high for quite long period of time. Also interest rates has been going up many, many times already, and we expect there to be seen at least one to two increases already. We foresee that maybe during the third quarter, we can look at the market and look at the purchasing power and say, "Okay, maybe this is the new norm." Then we can make a more accurate estimation on where the consumption will or would go.
The same indicators, like said in the beginning, also impacting small and mid-sized businesses' capabilities in investing in certain kind of products which we have in our lineup. That said, we strongly believe that our business model is suitable, even more suitable for these kind of tough times, as we have a quite effective operations, quite low cost position. We have a good program at hand to make the profitability on a good level again. We also see that during these kind of turbulences, normally you see some kind of market changes, some consolidation maybe, specialty retail, brick-and-mortar retail, typically those kind of areas where you see movements. We believe that this will also give us new nice opportunities going ahead.
The mega trend retail going online hasn't gone anywhere. We believe this might or could even be an accelerator when the time is right for the market to open up again. Like I said, big picture unchanged. We don't expect future growth potential this year. We as a company have guided it like this, and we also therefore want to indicate that we are focusing heavily on profitability and EBIT for this year to make the company stronger and then attack when the market is right. If you sum up the presentation, the surroundings environment are difficult, but we have, in our belief, the right recipe to come out winners out of this turbulent times. It has been a tough start for the year for the company.
A big change negotiations went through. I would like to thank my staff and all the people who have been working hard to get the company where we are at the moment. We have a solid profitability program at hand, which we are executing nicely at the moment. We have the positive impact that we expected. Like I said, the biggest impact on our EBIT level will be seen throughout the latter half of the year. At the same time, as we are facing the short term tasks ahead, we are working rigorously on long-term targets and getting the company to next levels. We have been introducing new features, improving our experience.
Site renewal is ongoing. We are also working to get the company on a long-term perspective to the level we want it to be. On top of that, we are working and updating our long-term strategy as we speak at the moment. If there are bits and pieces or targets to be updated, those ones will be then distributed to the market at the right time. Thank you. As I say, I see there are no questions. Thank you for listening, and have a great Thursday day. Thank you.