Good afternoon, and welcome to CDON's Q4 presentation and update on growth initiatives. We have with us CEO Fredrik Norberg, and CFO Carl Andersson. Welcome, gentlemen.
Thank you.
Thank you.
You will present the fourth quarter and provide an update on the growth initiatives, as well as answer questions during the Q&A session. Questions can be submitted live and will be addressed during the session. With that said, I hand over the word to you.
Thank you. I'm here today, as usual, with our CFO, Carl, and he will join us later on in the call. But first up, CDON Group operates two different marketplaces. Fyndiq focus on discount shopping and with a topping of TikTok trending products. CDON is focused on quality products and mainly on consumer electronics. We have roughly 100 million annual visits, and we offer about 30 million products for sale. We operate an asset-light and scalable business model, and we have a big potential when it comes to the marketplace penetration. Where this is a very common way of shopping online for the rest of the world, it's only 10% that does that in the Nordics. And with this, we have our mission, which is to unleash the power in the marketplace and give the best shopping experience in the Nordics.
With this said, we can sum up a growth year and increased profit. We have a solid full-year GMV growth, despite the very weak start of the year, with a strong ending. We had 15% growth in GMV in Q4, and a full-year growth of 9%. On top of that, we have strong profitability, where we have a full-year EBITDA growth of SEK 26 million, up to SEK 31 million in total. We have our growth initiatives that have started according to plan, and we will come back and describe them further on later on in the call. Looking at the numbers, we have the +15%, for Q4, and a gross profit after marketing that grew a little bit less with 9%, and this is due to the increased marketing cost that we still see are affecting us.
But we have an increased EBITDA profit, with an increase of SEK 8 million-SEK 18 million for the fourth quarter. Full year, we have the 6% growth in GMV, and 4% of GPAM, also affected the same way, of the marketing cost. But really happy to see this strong improvement of our EBITDA profit. We improve it with SEK 26 million-SEK 31 million for the full year, and that's something that we are really proud of. Now, looking at the full year, we can see the horrible start of the year, January and February, and after that, how we really picked up the pace. And ending up with double-digit growth for every month in the Q4, and ending with a very strong momentum.
I'm not gonna talk more about numbers here, but I will come back and describe more about our growth initiatives. Before that, let's dig into the numbers with Carl.
Thank you. As always, let's start on the highest level before jumping into the segments. As said, a strong end to a positive year, and the 15% growth rate in Q4 is something that we are very happy, happy about. 6% on the full year, recovering from the weak start, is also positive and shows that we are on the right track. Net sales grew by 10% and 2% full year, as third-party business continues to grow as share of total business. GPAM up by 9% in the quarter and 4% full year, following that higher marketing cost, and let's come back to that point a little bit later. Very happy about the EBITDA, amounting to SEK 18 million in the quarter and SEK 31 million for the full year.
Significant turnaround from the low SEK 5 million in 2024. It also proves the scalability of our business model and that we are able to generate a significant EBITDA growth from this top-line growth. Looking into our two segments and starting with GMV, we saw strong growth across both of them, but the CDON segment really stood out as the most positive one. The group were able to sustain its positive growth momentum that we picked up in Q2 and Q3, and in Q4, we even exceeded the high benchmark from Q4 of 2023. Very happy about that. Momentum increased, particularly in the CDON segment. Growing by 20% is very impressive, and it was driven largely by good performance in home electronics.
It seems like Santa was listening to us and bringing a few air fryers and PlayStations to each and every one of you. Full year, we grew 5%, as we were down so much in the beginning of the year. It was another solid quarter for Fyndiq, in particular in the markets outside of Sweden, where we grew by 6% in the quarter, and slightly above that at 7% in the full-year period. Our take rate remains stable, compared to recent quarters, and also looking at the group level, still hovering around 19%.... The CDON segment saw a slight dip to 14.6% compared to last year, but very much in line with recent quarters.
We do see a small negative category mix effect, which is natural on our marketplace with different seasons and different trending products. But it was also offset by the recently introduced merchant performance fees on CDON. So we're still able to maintain a solid and flattish margin or take rate on CDON. For Fyndiq, just below 30% in the quarter, and in line with the yearly average, just below 30%. GPAM grew for the group and respective segments, but we saw some pressure on the GPAM margin from the increasing marketing costs. As we remember, CDON segment grew by 20% GMV, but only 5% GPAM. We are seeing higher marketing cost and that dependency on the paid channels.
The GPAM margin decreased to 7.3% in the quarter, and 7.6 full year, down from just over 8%, in those two periods last year. However, in Fyndiq, we saw a margin expansion, where GPAM increased by 14% compared to 6%, and our margin increased to 17.2 for the quarter, and 18.1 for the full year. Very happy about that, and we're able to defend—have been able to defend that throughout the year, despite the higher marketing costs. As we see with that higher take rate, we are able to manage and work with the higher marketing costs we do have in Fyndiq. We do remain too dependent on paid traffic, and it did increase in both segments.
In the CDON segment, we did exceed the previous high mark of 6.9 in Q4 of 2024, after a number of quarters where we were actually below that number. For Fyndiq, we saw a smaller increase to 12.7% of marketing cost as percentage of GMV. We do expect marketing costs to increase further in the coming year as we activate the brand-building activities. This we are doing because we believe in the long-term positive effects from it. With the improved brand branding activities or the branding activities in general, we are looking to improve our organic traffic, and that, in turn, will help reduce the marketing cost over time. This is a powerful and important activity that we'll talk more about shortly.
As said, the significantly improved the EBITDA, and we were exceeding 2023 levels for the group, SEK 18 million in the quarter. No adjustments this time around, compared to last year when we were still closing the Malmö office, and we do remain on, on a positive growth trajectory looking at the, the rolling twelve, and in this case, also the full year number of SEK 31 million. We talked shortly about the OpEx, and it is continuing to trend lower year-over-year, also when comparing this, this quarter with, the adjusted OpEx of Q4 last year. We saw a smaller seasonal uptake, which is expected with the peak, traffic volume in Q4, but, lower, cost of consultants and stable, software costs following the important platform migration are contributing to the lower OpEx compared to previous year and years.
Despite full year OpEx of around SEK 173 million, and it is slightly above our post-integration ambition, the run rate in Q4 with some consideration for that seasonality, is in line with our ambition, and we are okay with that. Lastly, a few words on cash. So we did see improved cash flow before changes in working capital in the quarter, as well as the full year. Very happy about that. We saw a lower buildup in merchant debt during the quarter, and even a reduction in full year, and this led to slightly a higher working capital. The share issue, completed in Q3 and Q4, did of course contribute to an improved cash position and an improved current ratio.
The cash balance of SEK 150 million at period end is very stable, and we're in a good position to execute on the initiatives that we're now planning for.
Yes. So now we're gonna talk about these growth initiatives. We have three points we would like to talk about. Number one is to go a little bit more in depth in each of the initiatives. Number two is to talk about our financial ambitions with these initiatives, and lastly, also talk about where do we see how to track the progress of these initiatives, which are the main KPIs for this. Starting with an overview of the four growth initiatives. Number one, retail media, to really monetize all of our visitors through high-margin advertising on the site. Number two is Nordic growth opportunities to really accelerate and double down on our Nordic ambitions. Number three, as Kalle mentioned before, brand marketing.
To really invest in this long-term brand building and creating a deeper connection with the brand and the customers. And last but not least, the tech resource boost to really expand the capacity and increase the velocity of the tech initiatives that we're doing in-house. So talking a little bit more on each of the initiatives, and let's start with retail media. So retail media is pretty much the worst kept secret in the marketplace industry. Pretty much everybody does it, and we have numerous of white papers on how to do it and what to expect. And to explain it a little bit further, so we have two customer groups utilizing retail media.
One is our merchants, and we now will enable them to push and front their products at their needs, so to say, at site, in listings, and so on. This is a very normal ways of working when it comes to marketplaces, and we haven't been there yet. We have been trying on CDON previously, but never on Fyndiq, and now we're doing this really full on. The second customer group that will utilize this is external advertisers. So let's say, for instance, a TV brand, rather than just putting generic ads on, let's say, a newspaper site, putting it on our site in the TV category and pushing their TV to customers that we know for sure are close to buying a TV.
Here we can utilize our first-party data to really create a high-efficiency advertising, and also improving the customer experience also, to be sure to showcase the right product for the right customer at the right time. This is a high margin and quite scalable business area that we really look forward to, and this will also be done through a third-party software that we are integrating with as we speak. The second part, Nordic growth opportunities. So we have been live for many years in the Nordics, both for Fyndiq and CDON. But to be honest, the last two or three years, we have put all our focus on Sweden, our biggest market for both segments, more than actually the Nordic countries deserves.
Now we really need to put some focus in that direction and reallocate some resources in that directions. We have the recipe. We know for sure what really makes a difference, both for the customer experience, but also to increase sales, and this is increased supply, to really get more of the products that people want at competitive prices. And this is now being done with onboarding merchants that today only sell at Fyndiq-- sorry, at Sweden, but have the capacity to sell to the other countries. We're also talking about onboarding merchants that only sell to one of the Nordic countries, but not the rest, and we're also talking about integrating with Nordic aggregators that will open up a big mass of local merchants.
So it's a lot about supply and merchant and make sure that they get onboarded to the rest of the countries. Besides that, we're talking about improved customer experience as well. Better translations, better SEO, and also localized campaigning. And last but not least, merchandising, to make sure that we have the right products that the local market wants, and make sure that those prices are competitive at each and every market. It sounds basic, but given the last couple of years, our main focus has really been on Sweden, and now we will be able to expand it into the Nordics. The third one is brand marketing, as Carl touched upon before also. To be honest, we have been talking about this for a couple of years now, but we haven't been ready for this.
We haven't been mature enough, and we have felt that we cannot really have the confidence and say, "Put this money on brand marketing," and ask people to visit our site, because the supply hasn't really been at the basic level, and the customer experience hasn't been good enough, to be honest, neither. Now we are at the level where we feel that we can now go out and reintroduce both the segments into the Nordic market. And there are two different challenges when it comes to Fyndiq and CDON. Starting with Fyndiq, has a much more clear value proposition and brand position, being this discount shopping and also meeting up the TikTok trending products and so on.
So here we're talking a lot about reminding the customer that Fyndiq still exists, and just poking the customer about, you know, choosing Fyndiq the next time they are considering shopping. When it comes to CDON, we need to do a brand position transformation as well. We have been around since 1999, it's well connected with CDs, which we don't sell so much of today, and a lot of consumers have high awareness of CDON, but have low connection to the brand. And this is what we need to change now. We need to create a strong connection to the brand CDON, and also clarity why you should come to CDON and shop instead of going somewhere else.
This is something that we are working on as we speak, and another thing is also that we have this gated approach to this. When I did my first TV commercial 50 years ago, it was pretty much all in on red. And then you could see a couple of weeks after it was run on TV, how the performance was. Today, you have so much more possibilities to do these incremental testing, especially through YouTube, but also social media, and to be able to see an A/B test, which content and which message should be to which target audience, and to test this with small investments, and this is the way we will go approaching this now. So it's not all in brand marketing and hope for the best.
It's a very gated approach, and we have clear KPIs and targets that needs to be met, and the board of directors need to approve these as well. But the outcome is really to create a much more deeper connection with our brand and higher awareness, but also to create a much more sustainable marketing mix. Today, we are too dependent on lower funnel, paid marketing, and that we hope to change with this now. Last but not least is the tech resource boost, to really now, be able to increase the velocity, but also be able to move over into innovation boosted by AI. This is a little bit harder to be specific around, but I will give you an example. We have today a quite basic internal search. This is a standard, of e-commerce industry anno 2023 maybe, which is okay.
We will now change this into an AI-based search, really going into next level, how you can use search. In our original plan, we would be able to release this in October this year. With this resource boost now, we will be able to launch that in Q2. And this is just one of many initiatives that has this potential that we now can really push and do rather sooner than later, and get the benefits of it 4-6 months ahead, and that we believe strongly will affect us in a very positive way. We also have a kind of semi-gated approach here, since a big chunk of this resource boost is through consultants. So if things doesn't pan out as expected, we have some flexibility to act quite fast on this cost, as well.
Yes, and now we're gonna talk a little bit about our financial ambitions with this as well.
Yes. So what, what does this mean? It means a front-loaded investment year in 2026 that will weigh on the near-term profitability, but put us in a position to approach SEK 100 million of EBITDA in 2027. So 2026 is a designated investment year. It will also be slightly front-loaded, also in considering the net effect from the initiatives, where the cost will impact our profitability. But we are sure that we are building long-term, valuable capabilities. Product development, release of new features, implementation of retail media, it takes time. We believe in the long-term value of this, and that's why it makes business sense to go this way. During 2026, we will report quarterly on the actual initiative spend.
This will be incremental to the normal operating cost, and we do this to maintain or to be as transparent as possible during this investment period. We don't have a 2026 EBITDA target, nor an external spend target to communicate. But by providing updates on how much we have spent, we aim to be as transparent as possible. In 2027, we remain committed to the SEK 50 million of incremental annual EBITDA from the growth initiatives. We spoke about this in September, and we remain committed to it now. Compounding both the growth initiatives as well as the underlying business that we expect to grow, we therefore aim to achieve SEK 100 million of EBITDA in 2027. As we spoke about in this presentation as well, we have previously always talked about three main KPIs to evaluate our business. It's GMV, GPAM, and EBITDA.
However, during this transitional investment period or whatever we want to call it, we need to add a separate lens to evaluate the, at least the core business. We believe that GMV will continue to serve as the prime indicator if our marketplace engine is revving, creating, and also converting demand. The take rate will show that we do that at a profitable level. While GPAM and EBITDA will be impacted adversely by the initiatives, GPAM, as we spoke about with the marketing costs, and EBITDA carrying both that and also the incremental operational expenses related to the other initiatives. So looking at those, at the former three KPIs would not tell the full story. And that's why we hope to be as transparent as possible also with the cost side of things.
So not only the costs, but we will also report on a consistent set of proxy KPIs to disclose and really evidence that we are progressing according to plan with these initiatives. We could also sprinkle in a few additional data points along the way, but I think with the cost focus, as well as these leading KPIs, that we are doing the right thing. We really aim to be as transparent as possible and allow an opportunity to frame your own analysis around the core business itself. Let's sum this up.
Yes. So a year of growth and increased profit, so happy to be able to report +15% in Q4 and 9% for the full year, and especially the increased profitability, which we increased with SEK 26 million- SEK 31 million in total. And we are now running on the growth initiatives, and we will continue to report on the updates.
All right, thank you so much. And, thanks for, for the deep dive into the growth initiatives. We will get back to those shortly. But let's start at the GMV, and, and, you mentioned, of course, the impressive recovery towards the end of the year. Could you maybe break down this in terms of, is there a shift, you know, in the underlying market? And what have you done internally to, to sort of achieve this, that growth that we saw in GMV towards, towards the end of, of now the 2025?
Who should start? You can start. Fyndiq was quite solid, not the super growth. CDON was clearly stronger in this. I think now when some peers have reported, we can see that it has been, you know, both sides of positive and negative Q4. Obviously, we have been on the positive side, and I think this is... When we were here one year ago, we were talking about our focus on consumer electronics and to really get more merchants with that type of products. And I think now, fast-forward 12 months, this is the fruit of those investments and focus. We now have really a supply that people want at competitive prices, and this is not just a, you know, one-off campaign that we have created for this Q4.
This is a baseline that we are now increasing, and we will continue from that increased baseline.
Mm-hmm. And then if we stay at the improvements during 2025, you mentioned now in the CEO letter, the home electronics-
Yeah
... which is a category that can be used then as a, I think you refer to a blueprint here.
Yes.
Could you maybe give some granularity on, like, what categories could be, could this be transferred to, and, like, what experience can you draw from home electronics in a way that it becomes a blueprint?
Yeah. No, so, so we had, I would say two years ago and maybe two years before that, we had strong PlayStation 5 growth in the consumer electronics. So we have had some tailwind in that comparatives for the, for that category. But despite that, we have grown, and we have grown, especially when it comes to the classic consumer electronics: TVs, mobile phones, and earphones. And, it's, I mean, I must say, I'm, I'm quite impressed with what we have achieved, Aron, given the competitors we have, the extreme low-level margins we have in that, and still being able to increase sales, and also doing that with profit.
Mm-hmm.
Yeah.
Mm-hmm. Thank you so much. And then, if we move on and look at the growth initiatives here, I think, I mean, you referred, of course, to the 100 million annual visits and how you're gonna utilize or monetize this using Retail Media. Could you give us some more details maybe on the timeline going forward here? I mean, and how can we evaluate this specific maybe initiative for the first half of 2026 and so forth, and how can we sort of track the progress here going forward?
Mm-hmm. So I think when we meet back here in a couple of weeks or months and talk about Q1, we wish to present a very consistent set of KPIs in addition to the costs, where we will show you, for example, how much incremental revenue we are driving from certain initiatives. That is rather clear in the case of retail media, given that it's fully incremental. It might be less, less straightforward when you start to evaluate the, the incremental, GMV from, say, brand marketing.
Mm.
But we'll come back with a set of KPIs that we'll stick to during this period, and also, of course, laying a qualitative overlay.
Yeah.
... telling what we have done and what we have achieved. We believe that Retail Media is one of those cases that we could execute on rather early.
Yeah.
The technical complexity is lower than in some other cases.
Yeah.
So, we are hopeful that we can execute upon this sooner rather than later.
Yeah. Okay, thank you.
Some of the initiatives is also something that you don't want to come in too late into the fourth quarter of the year-
Mm-hmm
because then we are a bit reluctant to start new things, and Retail Media is something that we really want to, you know, before we go for summer holidays, to have that in place.
Mm-hmm. Yeah, yeah. And you mentioned also that peers are utilizing the base in the same manner... Is this a blueprint that you could use, or can you view this and become more confident that you will execute on this going forward? I mean, do you feel that you maybe currently have underutilized the potential here, or?
Definitely.
Mm.
We haven't had time to focus on this in the way we should be doing as a marketplace in 2026 in particular. I mean, looking at peers and looking at the benchmarks about how much revenue you could achieve, the potential is significant.
Mm.
Of course, we need to be somewhat sort of conservative and responsible in our estimates around it, but we have done a thorough sourcing process on this—on the partner that we're doing this together with, and we have selected a leading global partner, who has wide experience also working with marketplaces around this, that we're excited to drive revenue together with.
All right, thank you.
But I think also adding to that is we have also some macro effects in the Nordics now that goes in our favor. When it comes to the merchant side of it, this is something, as you say, all the marketplaces are doing it, and we can see how Amazon and Bol and so on are utilizing that. But the other part, when it comes to the real retail media, external advertisers utilizing your inventory, that is quite new in the Nordic market, and that has grown a lot just the last couple of years. And we have just around the corner in two weeks, we have the biggest e-com conference, D-Congress. There are several other talking points and at the stage talking about retail media.
Okay.
Never seen this before, and now if you're looking at the... For instance, I know Apohem is doing a lot of retail media within those pharmaceutical area that they are working in. So we have also that macro trend going in our positive direction.
Okay. Yeah, that sounds very promising-
Yeah
... from a Nordic point of view. One question we got on the line, I guess, is a general one on the investments going forward. Now, you painted a picture for EBITDA in 2027. What can we expect in 2026 in terms of the scope of the investments? Largely, do you think EBITDA can decline year-over-year next year, and then, you know, aim towards the target, or how do you see this playing out?
It's a very good question, and I wish I had a better answer to it. We don't have a public or an external target around how much we're gonna spend. We did raise capital in connection with executing upon these initiatives. But we don't have neither an external spend target for 2026, nor an EBITDA target for 2026. There are a number of uncertainties to it, and as you spoke about, Fredrik, this is a gated approach in several of the initiatives. If we don't pass that gate, I mean, obviously, cost would materialize rather differently. So at this point, it's still too early to tell, and I think it's then our responsibility to rather tell what has happened, to provide as much transparency as possible.
Mm
... and to really focus on that long-term target that we're now setting out for 2027.
Yep, yep. And then on the marketing costs, I mean, the ratio rose here in the quarter, and, like, how, how do you paint the picture, sort of like, going forward to the conversion towards maybe a phase where we can see then the, the organic, traffic sort of really being displayed in the ratios as well? How, how do you see this conversion playing out during 2026, maybe even further?
I mean, I think 2026 is gonna be early.
Mm
... to see things happening. This takes time to both really, really rebuild and gain sort of the trust of the consumer and to really get this message home. We believe that we, as we said, we're gonna see a continued increase in marketing costs, but over time, marketing costs will come down when organic traffic comes up again.
Mm.
Um-
Yeah, so the total share of obviously is gonna go up. We're gonna now introduce less efficient marketing than we have today, so that's gonna increase. But quite soon enough, the underlying base marketing, so to say, the performance marketing, is gonna go down. But in total, it's gonna increase for some time ahead of us.
All right. Yep, that sounds great. And we also got, actually, a question then on the organic traffic initiatives, but I think we have addressed those at least sufficiently for the time being, and then we have to reevaluate that going forward.
Mm.
One reference back to the last Q&A, you talked about the consumer confidence, and now that you closed Q4, did you feel that the consumer sentiment improved as you expected? And maybe sort of like get your picture of the current state, maybe of the consumer.
Yeah, we felt it. We felt it was positive, but now looking at our peers and so on, it's extremely volatile-
Mm
... in the reports now, to be honest. And we have a couple of reports just the other day that's in the same segment as CDON had, not this growth at all. And it's really hard to say how the total sentiment looks like, but for us, it was very positive.
Yeah.
Mm.
But if we maybe narrow it down then to your closest competitors, do you feel that you've gained market share maybe now in Q4, or... I mean, it's a very short time frame, of course, but how is your perception, maybe to the closest peers, at least?
Mm.
... I mean, I think at least we're doing a lot of things right.
Mm.
We're definitely, I believe, growing faster in the market and in those categories.
Mm.
Looking at total e-commerce, up by some 10%, according to PostNord-
Mm
... just this morning, right? Our growth was strong.
Mm.
No worry about it. At the same time, we should also be a little bit humble about Q4 of last year.
Yeah
... of two years ago, sorry.
Mm.
In 2024, which was rather weak and a disappointing Q4. So, of course, if we discount the performance a little bit with that, I would still say it's very strong and positive.
Mm.
But we've got a little bit of an extra boost from it.
Okay. Yeah, thank you. And then we have a question regarding the dynamics between number of merchants and sizes of merchants. Can you elaborate a bit on this dynamic? Are you onboarding any of the sort of bigger merchants, currently, and how did that play out in Q4?
Yeah, and as I point out in the CEO letter, that's one of the disappointing aspects with Q4, to be honest. We didn't really finalize and get this extra push from these giants that we were expecting and hoping for. Things takes longer with bigger companies, and now this is a new way, or how to say, a new segment of merchants that we don't have really this experience from, and now we are hitting some, I would say, internal politics and such-
Yeah
... and also, yeah, legal approaches and so on. So it takes a little bit longer. We still are confident that this is the right strategic way for us, and that it will have a very positive impact-
Mm
... on our business for CDON.
Yeah.
But it, it was pretty much zero, impact or close to zero impact, in Q4. We are onboarding them now as we speak, continue, and they are, selling as we speak. So we are hoping and seeing that they will, get the positive effect now.
Mm. Yeah. Yeah. Would you say that it is mainly maybe then admin issues, or could it be technical integration issues as well, or, or what?
It's been both. I would say for a couple of the biggest one has been more administrative issues.
Mm.
They are usually have quite good internal tech capacity to do the integration, so it's much more up to getting in line for their prioritization.
Mm.
But now, actually, we had some bumps in the road, which were more of an administrative character.
Yeah. And many of them are very experienced of working with other marketplaces.
Mm.
There seems to be a standard on how to approach this, and by solving towards that, I think we're well positioned sort of for the coming batch-
Mm
... of larger merchants, and that should go smoother than it did sort of the first time around.
All right. Thank you so much. I think we addressed all the questions on the line right now, so I will leave it to you for any concluding remarks from this point.
No, really looking forward to this year, and, and, for our growth initiatives, and, looking forward to stand here in three months again. Great! Thank you.
Thank you.