Okay. Welcome to the 2nd quarter presentation by Elektroimportøren. Today we have the CEO with us, Andreas Niss, and the CFO, Petter Bjørnstad. With that, I think I leave the floor to you guys. Just a short reminder that you can ask questions, but you need to do that in the chat function. We will take them afterwards. Okay, back to you guys.
Petter.
Thank you.
Thank you everyone for calling in. We'll take you through a brief presentation of our second quarter results. To sum up the quarter, we see that we have a revenue of NOK 321 million. It's up 18% versus last year. Quite heavy comparables, so we are satisfied with the growth that we have managed to achieve in the quarter. If we look at EBITDA, it's at almost NOK 40 million, slightly down from last year. You have to take into consideration that this year we have made provisions for year-end bonuses of NOK 3 million in this quarter, and last year we did no such provisions. We're comparing apples to apples here. The adjusted EBITDA for Q2 is NOK 42.6 million. Growth has continued. We had, as I said, faced tough comparables.
Last year we grew 40%, and if we compare to 2019, our sales are up 65%. It is B2B that is driving the growth. We grow with 49% in the B2B customer segments. Within that segment, electrical vehicle chargers is by far the fastest growing category. Our business to consumers have a slight decline. We were down in April and May, but we managed to go back to growth again in June. That was driven and supported by a good campaign. Every time we open a new store, we have, I would say, quite an aggressive campaign when it comes to price product, which we run in all our stores and online, and it usually works well, and it did so as well in June.
We opened, as I said, our 24th store, this time in Jessheim, mid-June, and it has been received well so far by customers, both professional and consumers. SpotOn, our digital service for electrical installation, is now available in all our stores, and we can offer SpotOn to more than 70% of Norwegian households, and also to more than 70% of Norwegian cabins. Yeah, that's where we are as of today with SpotOn. We have also signed one more new contract. It's for a new store in Stavanger, which we will open in November this year. I've added a slide on SpotOn, because I think it's the first time we're actually mentioning this in one of our quarterly presentations. It's an online ordering and inspection for electrical installation.
Why should you do this? Why is there a space for SpotOn in the market? What we have found is that there is, what should we say, some frustration amongst the consumers when it comes to getting electrical installation done. It's hard to know where to find a good electrician that you can trust and who has the right competence. It can be difficult to agree on how much time the installation should take and when it should be done. It can be un certainty around the cost of installation in terms of what am I paying for in terms of material and time. What SpotOn is doing is that it's solving all of these three frustrations with giving you an electrician from one of our partners.
Digitally booking the time for when you want this installation to be made, and giving you a fixed price on the job. It's easy, it's safe, and it's fast. This year, as we have started up with SpotOn and rolled it out across the country, we have made 500 installations so far in the first half of the year, with a total turnover of NOK 4 million. This is just in its early beginning, but it has been received great from the customers where we have made installations. More to come on SpotOn. I also added a slide on ESG, just to give you some short information on what we are doing on this. During first half of the year, we have started to structure our ESG work.
This we have done by selecting a number of actions where we believe we have the possibility to make an impact. We have clustered these actions into five of UN 17 sustainability goals, as you can see. We are working with several actions to secure a more sustainable production and distribution. For example, systemizing how we work with suppliers and producers to reduce waste and emissions. We're shifting all our truck lifts and our delivery trucks from fossil fuel to electricity. For example, we're now installing solar panels on our new central warehouse, which will be open in Q3. Other initiatives that we do is that we try to trigger more women to become electricians. We have signed a partnership with CARE Norway, who work for women rights and helping women out of poverty.
In order to get a good structure around the work that we do with ESG, and in order to monitor the progress, we have started a certification process where we are becoming certified by the Norwegian Miljøfyrtårn. Our aim is to have this certification completed by the end of the year. If we look at a bit more detail on the revenues. Sorry.
We believe that we have delivered good sales performance during this quarter, growing from NOK 272 million last year to NOK 321 million this year. 18% growth, and that's after a year where we had 40% growth. As Andreas mentioned earlier, the big driver of this quarter is the B2B sales. Especially maybe the biggest driver there is increase of sale of EV chargers. Last year, we had around NOK 6 million of sales. This year, we have NOK 34 million of sales of EV chargers, and that's mostly to the B2B customers. If you look at the stores, we have almost 11% like-for-like in the physical stores and 26.6% on online operation. During this quarter, we had some negative impact, due to COVID restrictions. 13 of our stores were partially closed for B2C.
Alnabru opened the 12th of May this year. We had some negative impact in the two first months. Like-for-like of the B2C customers were positive back in June, so that's good. I'll also say that last year we had magnificent growth in the B2C. We had 45% growth last year on the B2C customers. We are actually pretty happy to have the same level also given that we have partially closed for this period. Sales are good. Looking at the margin, doesn't look too good to go from 39.8 last year to 37.4. A slight improvement from last quarter. The big driver here is sale of EV chargers, because we have significantly lower margin on the NOK 34 million sales of EV chargers, compared to other product categories.
If you look at the margin development, when we exclude the EV chargers, it's in line with last year margins. Yeah. If you look at the cost side, we have gone from NOK 68 million to around NOK 80 million of total OPEX. Of course, the provision we make. We were not listed last year, so we did not make provisions for the expected year-end bonuses before the last quarter. We started actually July last year to make these kind of provisions. We now make provisions on a monthly basis. That's NOK 3 million compared to last year as an increase. We have spent a little bit more on marketing to fuel the growth, and also a little bit more on distribution, and also a little bit on chain and the growth.
We believe that we have a good cost control in our operation in the stores and in the back office and distribution, and we are satisfied with the development of OPEX. Just to take you through the bridge of adjusted EBITDA. We had last year NOK 40.7 million and reporting NOK 39.6 million this year. The like-for-like stores, they are contributing with around NOK 2 million of positive increase from last year. Online, the same. Also the new stores are delivering good results. The negative element of the provision of year-end bonuses, and then on the NOK 3.2 million on the other, that's the increase in marketing, distribution cost, and chain costs. Yeah. I don't know.
To sum up the key financials, NOK 321 million, we're up 18%. Online share of sales is at 14%, up from 13. B2B sales 49% up, while B2C is down with about 2%. B2B share of business is now at 53%. It was at 42.6 last year. Total like-for-like growth is on 13, with 26.6 online and 11 in the physical stores. EV chargers, as Petter was saying, is growing dramatically. NOK 34 million this quarter compared to NOK 6 last year. Overall gross margin is down. This is linked to the shift from B2C to B2B and B2B buying a lot more EV chargers. OPEX to sales ratio of 25%, on the same level as last year. As we have said now a couple of times, we have made these provisions that you need to take into account.
If we consider that, we are happy with the development in cost. Net cash is at NOK 65.5 million. It is up from NOK 2.8 million last year. We also have an overdraft facility of NOK 120 million, which is not utilized. If we look at what we think about the rest of the year, we believe that we will continue to grow sales and market share in B2B. This will be driven both by new customers and the penetration, that we get a higher loyalty with the customers that we have and also continuous growth with electrical vehicle chargers. We expect the B2C sales in like-for-like to be on par with last year. You could say this is quite moderate, but we had a fantastic second half in 2020 in terms of B2C sales.
We are actually quite happy if we manage to reach those numbers. With the levels we saw in the last quarter, we believe that this is absolutely possible. Gross margins to remain at the same level as the first half, mainly due to the things that we've said around B2B and EV chargers. We will continue to build the market awareness of SpotOn and believe that sales could be around NOK 10 million for the end of the year. We have signed one more store opening in Stavanger in November. We are expanding our central warehouse. We're doubling the size of our central warehouse, and it will be ready in a month's time, roughly.
We also, as some of you know, have discussed and analyzed the Swedish market, and we will conclude on a strategy for Sweden before end of the year. That was our brief presentation. If there are any questions, we are more than happy to take them right now.
Okay. Thank you. I can start with one question. Your own brand, Namron, there you have a target to increase that to roughly 40%, I think, by the end of 2022. Now from my understanding, it's north of 30%. Can you say something about the development on that brand? Thank you.
Yes. You're absolutely right that our aim is to have a 40% share of Namron sales. We were on track for that until we saw the explosion, if I may say so, in sales of electrical vehicle chargers. This is a product group where we, as of today, do not have a Namron range. Maybe we will get it, but not this year. If we exclude the EV chargers, we see that we are making great progress in smart homes and electro materials where throughout the first half of the year, we have continued to launch new products within these two product groups, and we also have more to come during the year.
We are actually happy with the development that we have with Namron, but the target of 40% might be harder to reach if we do not introduce our own electrical vehicle charger in the market.
Thank you. A follow-up there on the B2B sales significantly growth. Are you seeing any initiatives from the legacy players in this market like Ahlsell and/or ELKO? Are they doing anything to try to limit your growth?
We should say, I'm not sharing those details here because I don't know if I can, but the market that we operate in together with our competitors in the wholesale segment has been good for the last months. For the last four or five months, the growth in the market has been good. We're taking our share and a bit more than that, but I'm guessing our competitors are having quite an okay first half of the year as well. Well, we have thought, I think I've said this, but we thought in 2015 that maybe we would have one more year being alone with doing what we're doing. Obviously we were wrong because no one is trying to copy the business model that we have, and probably for good reasons. We don't see any actions.
We compete with the other players on the same way that we have always had. The competition in the market is quite tough. We don't see anyone targeting us.
Doing something different.
Doing something. Well, if you say opening up for consumers, for example, which would be quite an aggressive approach towards us, but we don't see them doing that.
Okay. Thank you. Then we have some questions coming in which relates to the B2B business. How do you see the development for the rest of the year here in the B2B business? I would assume that Q2 that the B2C sales was somewhat negative affected by some temporarily closed stores in the beginning of the quarter.
In terms of B2C?
No, B2B and B2C, the split there in the second half, is it possible to give some?
We believe we lost some sales in B2C due to closed stores. That's for sure. It's a given. If you close down the store, you don't have the same sales, even though some of it was converted over to online. If we manage to keep the levels in like-for-like B2C, as we say, on par with last year and then have some growth to come from online and from the new stores that we open, probably the mix should be more 50/50 than the other way. Now we see 53/47 in B2B, B2C. Probably it should be closer to 50/50 at the end of the year. Also given that December is a month where we have significantly more B2C sales than we have B2B.
Also in Black Week.
Also, yeah, also the last week of November where we joined the Black Week marketing hype, which we usually do quite successfully.
Also we have July, where a lot of installers take a holiday. It's a lower activity on the B2B side, summer month of July.
We have two questions here. How do you see the freight costs developing, going into the second half of the year and also through 2022? That was the first question. We can start with that one, I guess.
Well, freight rates are increasing for us, as I guess they are for most companies that ship things out of China. 95% of what we sell in Namron is shipped out of China, and we see increased rates there and I believe they will continue to grow throughout the year. If we hit the peak or not in terms of in 2021 or in 2022, I don't know. What we can say around that is that even though freight rates are dramatically higher than they have usually been, it doesn't have a huge impact on us in terms of lower margins. The products that we send from China are usually quite small and quite costly with high margin. We can put a lot of products into one container with a high turnover on each product and a healthy margin.
Of course, when freight rates go up, we will have to pay them as everyone else, but we haven't seen and we don't believe it will have a significant impact on our margin. I hope that makes sense.
Absolutely. The second question here, related to the assessment on moving into Sweden. What are the most important questions that you need to, let's say, sort out before you make a decision there?
Well, there are several things, of course, that we need to consider. One is to make sure that the business that we have today, the profitable, good, growing business that we have today, do not suffer from us starting to enter into Sweden. Being sure that we can run the business that we do today in Norway in the same way, whilst also putting resources into Sweden. That's one thing. Another thing is making sure that we understand the customers enough. You can assume that Swedes and Norwegians are quite the same, but a lot of other companies trying to enter Sweden from Norway have hurtfully found out that that is not always the case. We are digging into customer service, et cetera, to find out more about the customers.
Another thing is, of course, also to decide on the speed and the magnitude of how to do it. Should we go only online as a start to try to find out a bit more about the market and how it works, what are people searching for, what are the most interesting products and the most searched-for products? Then maybe after a while, open a physical store where we can tune the assortment to the Swedish market. In my view, getting the right assortment at the right cost price is probably the most important thing, in terms of success or no success. Understanding the customers, what is it that they need, then making sure that we can get hold of the products that we need to satisfy the customers at a healthy price. Those are the major things.
Of course, you also need to decide, should we do this greenfield, so just try to do it ourselves, or is there a possible route to do it through an acquisition?
Perfect. I have a question on the growth potential in Norway. Ending this year, you'll probably have 25 stores. How do you see this in the coming years, and how many stores do you expect that you can open on a yearly basis?
We believe that there is room for roughly 20, 25 more stores in Norway. We have an interesting test going at Jærhagen Center in Klepp, where we have opened a store in a shopping mall on the second floor. If that works, I think the expansion could be much wider than just 20, 25 stores, because then a whole new space opens up in terms of new stores. Let's say we stick to the model that we've had. We have the capacity to open.
Five stores-10 stores.
Five stores-10 stores a year. What is now stopping us to go faster than we're doing is that we're quite picky when it comes to location. We need to have an A location, which means, in terms of how we're looking at it now, on the first floor, in an area with good neighbors that spends a lot of money on marketing, so they can attract customers to the same parking lot that we share.
Easy parking.
Easy parking, in and out for the installers, good visibility from the roads passing by. It was much easier to find those for the 10 first location than it would be for the 20 to come. Yeah, that's how we're looking at it. I believe two to three to four, five stores a year is the speed that we'll have.
Perfect. I have a question on the SpotOn. You now have 500 deliveries. Where do you see that the next two to three years on an annual basis? What are you planning on?
Look, first of all, we must say that it takes time to build up something new. This is a whole new way of getting electrical installation done. It takes time to create awareness and understanding of the new brand, the new service amongst private consumers. If we're at the NOK 10 million, as we're saying here, at the end of the year, I don't see why that shouldn't double, at least in the next year. Where it goes from there, who knows. We also need to continue to develop the service. There are some things that are perfect with it today and super, but it can also grow in terms of what we offer. I would say we need this year as a proof of concept, which I believe we're far in getting.
Once we get that this year, the market potential is NOK 50 billion. That's the market we're operating in. Well, I can only speculate, but it's a huge market. If this service is even as close as good as I think it is, if most people think that as well, then the potential is big.
Understood. I have a question here asking how many EV chargers did you sell in the quarter, and what is the sales growth excluding EV chargers?
Sales of EV chargers was at NOK 34 million in the quarter. Our growth in million was Well, and it was NOK 6 million last year. The growth in EV chargers is NOK 28 million. Right?
Yeah.
Sorry, I should, of course.
I think it will be around 8%, if I do the math correctly here. If I just take it out.
Yeah. Around 8%, 8%-10%. We sell these chargers at roughly NOK 8,000, including VAT. We're not giving you the number of what we sell them to the installers. That's the answer.
I have a question on the gross margin. With the gross margin now on 37.8%, and maybe around 39% without the chargers, how high is the gross margin on the Namron products?
It's up to 40.
Yeah. It's considerably higher. The average margin on Namron today is.
Almost 60%.
It's almost 60%.
It's over 60%.
Perfect. I think we have gone through all the question. Just let me take a second look here. Yeah, another one on gross margin here. If you exclude the dilution effect from the higher B2B sales and the EV chargers, is there any other key drivers for the gross margin change year-over-year in the second half?
I think if you look at the other categories, we have the smart home category that's growing more than the average on other categories.
We have a lower margin, but also we are introducing new models and Namron products into that category. Even though it's a big growth area, we are getting better margin on the product category, but still a little bit lower than the average margin. We have also Namron. We are increasing Namron more than other products. If you exclude the EV chargers, that's around 20 percentage points higher margin than on the other categories. That's a positive element. You have other drivers like ELKO products. We partially buy it, and that's also is some variation, various sorts of products. I think that's the biggest.
In all fairness, you could say that if you exclude the EV chargers, we believe that we have a healthy margin development. We do not see big margin pressure on any other categories than the EV chargers.
I think they said if you exclude the EV chargers, it's a flat margin on the B2C and the B2B compared to last year.
Perfect. Question here. When is Elektroimportøren on Oslo Børs?
We have an ambition to be listed on Oslo Børs.
Yeah. We have started work looking at going into IFRS for Yeah, we started that process to work on that at least.
Maybe within 24 months.
Okay, perfect. I think we have went through all the questions. By that, I thank you guys for allowing us to host this second quarter presentation. We look forward to see you again, hopefully physically, at the third quarter presentation.
Okay. Thank you very much, everyone.
Thank you. Bye.