Verkkokauppa.com Oyj
REPORT OF THE BOARD OF DIRECTORS
AND FINANCIAL STATEMENTS 2023
VERKKOKAUPPA.COM’S
ANNUAL REPORTING 2023
Verkkokauppa.com has published its annual reporting package for 2023. The reporting components are:
the Company brochure, the Report of the Board of Directors and the Financial Statements, including the
Non-Financial Statement, and the Corporate Governance Statement including the Remuneration Report.
The reports are available in Finnish and English, and they can be read and downloaded separately from
Verkkokauppa.com’s investor site as separate pdf files. In addition, the company will publish a separate
sustainability report during spring 2024.
Verkkokauppa.com Oyj
CORPORATE GOVERNANCE STATE M E N T 20 2 3
AND REMUNERATION REPORT 2023
Verkkokauppa.com Oyj
REPORT OF THE BOARD OF DIRECTORS
AND FINANCIAL STATEMENTS 2023
Verkkokauppa.com Oyj
COMPANY YEAR 2023
Verkkokauppa.com · Report of the Board of Directors and Financial Statements 2023
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2023
REPORT OF THE BOARD OF DIRECTORS .....4
Statement of non-financial information 2023 ................. 6
CONSOLIDATED FINANCIAL
STATEMENTS 2023 ................................. 20
1 Consolidated statement of income ..................... 20
2 Consolidated statement of comprehensive income .. 20
3 Consolidated Statement of financial position ..........21
4 Consolidated cash flow statement ......................22
5 Consolidated statement of changes in equity ......... 23
6 Group accounting principles ............................ 24
6.1 Basic information on the Company ....................24
6.2 Basis of preparation ...................................24
6.3 Accounting policies requiring judgment by
the management and key factors of uncertainty
related to estimates ...................................25
6.4 Group Information ....................................26
6.5 Effects of IFRS standards that become effective
during or after the financial year .......................26
7 Notes to the consolidated financial statements ........27
7.1 Segment reporting ....................................27
7.2 Revenue from contracts with customers ..............27
7.3 Other operating income ...............................29
7.4 Materials and services ................................29
7.5 Employee benefits ....................................29
7.6 Remuneration of key management personnel .........30
7.7 Depreciation and amortization ........................32
7.8 Other operating expenses .............................32
7.9 Finance income and expenses ........................32
7.10 Income taxes .........................................32
7.11 Earnings per share ....................................33
7.12 Share-based payments ...............................33
7.13 Intangible assets ......................................34
7.14 Tangible assets .......................................37
7.15 Leases ...............................................38
7.16 Deferred tax assets and liabilities ...................... 41
7.17 Trade receivables and other receivables. . . . . . . . . . . . . . . 42
7.18 Inventory ..............................................43
7.19 Cash and cash equivalents ............................43
7.20 Business combinations ................................44
7. 21 Equit y .................................................45
7.22 Cash flow information .................................46
7. 23 Funding ...............................................47
7.24 Other current liabilities and accrued liabilities ......... 51
7.25 Provisions ............................................. 51
7.26 Related parties .......................................52
7.27 Guarantees and commitments ........................52
7.28 Subsequent events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8 FINANCIAL STATEMENTS OF
PARENT COMPANY (FAS) 2023 ............53
Income statement .......................................... 53
Balance ...................................................... 54
Statement of funds ...........................................55
Notes to the Financial Statements 31.12.2023 ............ 56
8.1 Notes on the preparation of the financial
statements ............................................56
8.2 Revenue ..............................................57
8.3 Other operating income ...............................57
8.4 Employee benefits ....................................57
8.5 Management remuneration ...........................57
8.6 Depreciation and amortization ........................58
8.7 Other operating expenses .............................58
8.8 Finance income and costs ............................58
8.9 Income taxes .........................................58
8.10 Intangible assets ......................................59
8.11 Property, plant and equipment ........................60
8.12 Investments ...........................................60
8.13 Trade receivables and other receivables. . . . . . . . . . . . . . .60
8.14 Receivables from companies of the same group ...... 61
8.15 Other short-term receivables and accruals ............ 61
8.16 Inventory .............................................. 61
8.17 Cash and cash equivalents ............................ 61
8.18 Equity ................................................. 61
8.19 Calculation of distributable funds ...................... 61
8.20 Financial statement transfers .......................... 61
8.21 Other current liabilities and accrued liabilities ......... 61
8.22 Liabilities from companies of the same group ......... 61
8.23 Long-term debt capital ................................ 61
8.24 Provisions ............................................. 61
8.25 Guarantees and commitments ........................62
Signatures for the financial statements
and the Board of Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . 63
AUDITOR’S REPORT .................................. 64
REPORT OF THE BOARD OF DIRECTORS AND FINANCIAL STATEMENTS 2023
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2023
Fiscal year 2023 in brief
In 2023, Verkkokauppa.com’s operating environment was characterised
by uncertainty about the curbing of inflation as well as the development of
interest rates and energy prices, which impacted the purchasing power of
the consumers. Consumers’ confidence in their own economy was weak
throughout the year and private consumption fell clearly in 2023. Due
to decreased demand, we launched a profit improvement programme
at the beginning of the year to improve operational efficiency and
competitiveness and to secure profitability. We focused on optimizing the
assortment and improving the efficiency of inventory, supply flows and
organizational structure. As part of the profit improvement programme,
the company also initiated change negotiations with the aim of renewing
the organization’s structures to correspond to the company’s long-term
strategy and adjusting the number of personnel and personnel costs to
the prevailing demand situation. As a result of the profit improvement
programme measures, we achieved the targeted results and thus
improved the profitability. We focused on lowering our cost base and
inventory value to a healthy level, which led to significant improvement
in cash flow. In 2023, comparable operating profit increased by EUR
2.6 million to EUR 6.1 million (EUR 3.5 million). We also achieved market
leadership status in Finland’s fiercely competitive home electronics
market. Revenue in 2023 declined by 7.4 percent and totaled EUR 502.9
million (EUR 543.1 million).
During the past year, the company launched several new services
to provide a superior customer experience. In the Helsinki metropolitan
area, 24/7 deliveries and pick-ups were launched. A major overhaul
of the functionalities of the online store was carried out to develop the
online shopping experience. In addition, Vaihtokauppa – a fully digital
trade-in service for used electronic products in the circular economy,
was introduced as a new service, which lowers the threshold for
recycling used phones and computers and enables a longer life cycle
for the device. In November, Verkkokauppa.com updated its strategy to
accelerate profitable growth.
During the fiscal year, financial development was positively impacted
by the profit improvement programme implemented during the year.
Operating profit for the financial year improved by EUR 2.4 million to
EUR 4.7 million (2.3), accounting for 0.9 percent (0.4%) of revenue.
Comparable operating profit was EUR 6.1 million (3.5) and result for the
period EUR 2.1 million (0.3). In 2023, items affecting comparability of
operating profit totaled EUR 1.4 million, of which EUR 1.2 million related to
change negotiation costs and the rest to the e-ville.com acquisition.
Revenue and profitability development
Verkkokauppa.com’s revenue in 2023 declined by 7.4 percent year on
year, totaling EUR 502.9 million (543.1).
Verkkokauppa.com’s self-financed customer financing services
revenue was EUR 6.8 million (4.7), including interest income, fees, and
commissions.
Personnel costs declined by 8.8 percent during the year and amounted
to EUR 36.7 million (40.2). Personnel costs included EUR 1.0 million in
restructuring costs. Other operating expenses were on par with the
comparison year, and amounted to EUR 33.5 million (33.4). E.g. external
warehouse and marketing costs declined during the year whereas credit
losses and related provisions increased. Credit loss provisions amounted
to EUR 1.2 million (0.8) at the end of December.
The company’s operating profit (EBIT) in January–December improved
by EUR 2.4 million and totaled EUR 4.7 million (2.3) and its share of
revenue was 0.9 percent (0.4 %). Profitability was impacted by the
implemented profit improvement program, with which the efficiency of
assortment, inventory, and costs as well as optimization of pricing has
improved. In the comparison period, profitability was weakened by an
inventory write-down of EUR 1.6 million. Comparable operating profit
improved by EUR 2.6 million from the comparison period and was EUR 6.1
million (3.5). Items impacting comparability in the reporting period were
a restructuring provision of EUR 1.2 million and EUR 0.2 million related to
earlier acquisition. In the reference period, comparability was impacted
by EUR 1.2 million euros related to the acquisition. The result for January-
December was EUR 2.1 million (0.3).
Earnings per share in January-December were EUR 0.05 (0,01).
Key events during the fiscal year
16 January 2023 Verkkokauppa.com issued a profit warning and
announced that the company adjusts its business operations to meet the
decreased demand and makes a write-down related to the streamlining
of its assortment. At the same time the company gave a preliminary
information on the financial development of 2022.
16 January 2023 Verkkokauppa.com launched a profit improvement
program to secure its profitability and initiated change negotiations.
16 February 2023 Verkkokauppa.com’s shareholders’ nomination
board’s proposals regarding the composition and remuneration of the
Board of Directors.
9 March 2023 Verkkokauppa.com completed its change negotiations.
2 May 2023 Change in Verkkokauppa.com’s Managment Team: Vesa
Järveläinen leaves the company.
27 June 2023 Verkkokauppa.com’s shareholder’s nomination
board members were appointed: Samuli Seppälä, Founder of
Verkkokauppa.com, representing himself; Erkka Kohonen (Chair),
REPORT OF THE BOARD OF DIRECTORS
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Senior Portfolio Manager, appointed by Varma Mutual Pension
Insurance Company; Jukka Järvelä, Head of Equities, Mandatum Asset
Management, nominated by Mandatum Life Insurance Company Limited;
and Arja Talma, as an expert member in the role of the Chairperson of
the Board of Verkkokauppa.com Oyj.
15 August 2023 Changes in Verkkokauppa.com’s Managment Team
– strategic and technological development was concentrated into one
function. The company’s Chief Technology Officer, Jyrki Tulokas, took,
in addition to his current role, responsibility for strategic development
and will continue as Chief Strategy & Technology Officer. Perttu Meldo,
Verkkokauppa.com’s Chief Strategy and Innovation Officer and member
of the Management Team, has decided to leave the company to join a
new employer.
7 September 2023 Change in Verkkokauppa.com’s Managment Team:
HR Director Saara Tikkanen to leave the company.
28 September 2023 Tatu Kaleva was appointed as Chief Commercial
Officer of Verkkokauppa.com.
21 November 2023 Verkkokauppa.com updated its strategy to
accelerate profitable growth.
14 December 2023 Satu Berlin was appointed as Chief HR Officer and
member of the managenment team at Verkkokauppa.com. She will start
in her position on 1 March 2024.
Operating environment
In 2023, Verkkokauppa.com’s operating environment was characterised
by economic uncertainty about the development of high inflation,
interest rates and energy prices. The Finnish economy was in recession.
GDP contracted by 0.5 percent in 2023 and the weakness of economic
growth was broad-based. Consumers’ confidence in their own economy
continued weak throughout the year and uncertainty rose towards the
end of the year, when consumers’ assessment of their own financial
situation sank to the lowest level since 2000. Concerns were about one’s
own financial situation and unemployment, as a result of which private
consumption contracted clearly. In December, consumers still regarded
the time very unfavourable for buying durable goods.
The renewal cycle for discretionary household products lengthened.
In a challenging economic situation, consumers were increasingly
price conscious. In the summer, economic uncertainty also began to
be reflected in the purchasing behaviour of small and medium-sized
corporate customers. Seasonal sales in the summer were subdued and
the hoped-for pick-up in sales was largely not realised. In the last quarter
of the year, the consumer market for home electronics contracted from
the previous year.
We still believe that customers’ shift to online is permanent.
(Source: The Bank of Finland, Economic forecast – December 2023, Statista –
Consumer confidence)
Finance and investments
In 2023, cash flow from operating activities totalled EUR 20.3 million (1.5).
Cash flow before change in working capital was EUR 11.3 million (8.5). The
company’s net financial expenses were EUR 1.7 million (1.6).
The company had liquid cash and cash equivalents of EUR 31.9 million
(21.2). Interest-bearing liabilities amounted to EUR 38.0 million (41.0)
including lease liabilities. Interest-bearing net debt was EUR 6.1 million
(19.8). The equity ratio was 16.2% (15.8%).
The investments amounted to EUR 1.9 million (9.3) in 2023. The
investments were mainly directed at the online renewal project and
development related to business analytics. During the year, the company
capitalised EUR 0.9 million (0.8) associated to wages and salaries.
At the end of 2023, Verkkokauppa.com had a total of EUR 21.3 million
(24.1) of loans from financial institutions. The company has revolving
credit facilities totaling EUR 25 million, which have not been utilized and
are valid until 2025.
Financial key figures
2023 2022 2020
Revenue, MEUR 502.9 543.1 574.5
Opertaing profit, %
0.9%
0.4%
3.5%
Comparable operating profit, % 1.2% 0.6% 3.5%
Equity ratio, % 16.2%
15.8%
21.4%
Gearing, % 21.5% 74.6% -2.2%
Investments, MEUR 1.9 9.3 4.9
Cash flow from the operations, as stated
in the cash flow statement, MEUR
20.3
1.5
6.7
Personnel at the end of the period 677 838 825
Personnel
The number of personnel decreased compared to the previous year and
was 677 (838) at the end of December 2023. The number of employees
includes both full-time and part-time employees.
In March 2023, change negotiations at Verkkokauppa.com were
completed. The negotiations covered the entire personnel of the
company, and as a result, the number of employees was reduced by 75.
In addition to personnel reductions, the company temporarily laid off all
company officers, senior officers and management, for a period of 14
days. To support the change negotiations, the company offered both
external training on living with change and internal training on change
management. During the year, the company invested in the working
atmosphere, and the heart rate of the personnel was measured four
times. The Continuous Leadership Index was also introduced as part of
the sentiment measurement.
During the year, a role structure was built for the equal management of
the company’s duties and roles, which aims to ensure fair pay and better
career development.
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Statement of non-financial information 2023
Reporting principles
Verkkokauppa.com reports on its sustainability work in 2023 in
compliance with the requirements of the EU Directive on the disclosure
of non-financial information and the Finnish Accounting Act. The
information in the report has not been verified by a third party. This report
was prepared using common key performance indicators (KPIs) and
topic–specific indicators in accordance with GRI Standards 2016–2021.
The reporting covers the group’s operations, including the e-ville.com
operations, acquired in 2022. In addition to the information presented in
the Board of Directors’ report, Verkkokauppa.com will publish a separate
sustainability report in the spring of 2024, which will cover the company’s
sustainability work and its progress during 2023 in greater detail. The
company is actively monitoring the evolving corporate sustainability
legislation and is preparing to report in accordance with the EU’s
Corporate Sustainability Reporting Directive (CSRD) for the fiscal year
2024.
Operating model and value creation
Verkkokauppa.com is a Finnish retail company with online retail
operations primarily in Finland; stores in Helsinki, Pirkkala, Raisio, and
Oulu; pickup warehouses in Helsinki and Vantaa, as well as wholesale
sales in the EU and EEA. The company’s service offering includes
installation, maintenance and recycling services, trade-in, visibility
services, and financing services. The company’s strengths include
investment in customer experience, fast deliveries through local
warehouses, and a developing multichannel business model. The
product range includes over 70 000 products, of which over 2 100 are the
company’s private label brands. The core categories of the product range
are computers and peripherals, TV and video, mobile devices, and home
appliances.
The company’s turnover was EUR 502.9 million (EUR 543.1 million) in
2023, and the net profit for the financial year was EUR 2.1 million (EUR 0.3
million). At the end of the year, the company had 677 employees (838).
The company’s headquarters are in Helsinki, and its shares are listed on
Nasdaq Helsinki under the symbol VERK.
Sustainability in Verkkokauppa.com’s strategy
Sustainability is a key part of Verkkokauppa.com’s strategy, one of the
cornerstones of which is expanding its service business by offering
sustainable alternatives to purchasing products. Sustainability work is
developed purposefully and comprehensively in accordance with the
company’s sustainability program. Key topics include offering high-
quality and safe products, selling products that customers actually need,
and services to extend the life of products, supporting the company’s
vision of creating a new normal for buying and owning.
Managing Corporate Sustainability
The company’s Board of Directors defines and approves the objectives
of the corporate sustainability work and the content related to their
disclosure. The Audit Committee of the Board of Directors acts as a
preparatory and monitoring group to which the progress and monitoring
of the company’s corporate responsibility work is reported twice a year
at minimum. The Board of Directors approves the company’s Code of
Conduct, the sustainability focus areas selected through materiality
analysis and the sustainability program. The Board monitors activities
from an environmental and social responsibility perspective, including
climate risks and opportunities, which are assessed as part of the
company’s risk management and materiality process. The company’s
Sustainability Steering Group acts as a preparatory and follow-up body
within the company.
Materiality principle
The needs and expectations of stakeholders are taken into account in
Verkkokauppa.com’s sustainability work. Verkkokauppa.com defines
the key themes of sustainability work through materiality analysis. The
company’s key stakeholders are employees, customers, partners, and
owners. The latest completed materiality analysis was conducted in
2020–2021, taking into account the following:
• The environmental, social, and economic impacts of the
company’s activities
• Expectations of key stakeholders
• The company’s values and strategic priorities
• Characteristics of business and operating environment
• Global trends
• Key international agreements
• Key legislation under preparation
The company has initiated a double materiality analysis required by the
EU’s sustainability reporting directive, which assesses the economic
impacts of sustainability issues on the company’s operations in addition
to the impacts of the company’s operations. The analysis will be
completed in early 2024.
Progress in sustainability work in 2023
The company’s sustainability program for 2021-2025 is divided into four
themes: at the customer’s service and on their side, smaller environmental
impact, Verkkokauppa.com as a community, and profitable business and
good governance. The progress of the sustainability program as a whole
will be reported in the sustainability report to be published in the spring
of 2024. The Sustainability Steering Group, which includes an expert
representative from each core function of the company, is responsible for
implementing the sustainability program. The company’s sustainability
program will be updated in 2024 to reflect the company’s renewed
strategy for 2024–2028 and the results of the double materiality analysis.
Code of conduct, policies and sustainable business practices
The Code of Conduct and values of Verkkokauppa.com define the way
the company operates and apply to all employees and management. The
Code of Conduct is public and available on the company’s website, and
the company expects its partners to adhere to it. The Code of Conduct
covers the company’s policies and practices on customer focus,
communications, marketing, disclosure of information, personnel and
company culture, cooperation with partners, anti- corruption and anti-
bribery, human and labor rights, information security and data protection,
environment, legal compliance, and reporting channel. The Code of
Conduct is supplemented and refined by other company policies, the
most important of which are the Anti-Corruption and Anti-Bribery Policy,
Verkkokauppa.com · Report of the Board of Directors
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the Personnel Policy, the Supplier Compliance Policy, the Disclosure
Policy, the Risk Management Policy, the Data Security Policy and the
Insider Policy. The company’s artificial intelligence policy was developed
in the reporting year. The Code of Conduct and the policies have been
approved by the Company’s Board of Directors. The company complies
with applicable sanctions legislation and has developed specific
guidelines to ensure proper wholesale and travel sales. In 2023, 93% (92)
of the staff completed an online training on the Code of Conduct.
Respect for human rights
Verkkokauppa.com respects and promotes internationally recognized
human rights from the perspective of customers, the supply chain and the
work community. Respect for human rights is included in the company’s
Code of Conduct. In addition, the requirement to respect human and
labor rights is specified in the Supplier Code of Conduct, considering
cooperation with partners in countries where human and labor rights
are not sufficiently protected by law. In addition, Verkkokauppa.com’s
activities are guided by international declarations, conventions and
recommendations, such as the UN Universal Declaration of Human
Rights and the Convention on the Rights of the Child, the ILO Convention
on Fundamental Labor Rights, the OECD Guidelines for Multinational
Enterprises, and the UN Guiding Principles on Business and Human Rights.
Anti-corruption and anti-bribery
The company has a zero-tolerance policy, meaning that it does not
tolerate any form of bribery, corruption or other unethical influence in any
form in its business. The company’s principles on anti-corruption and
anti-bribery are stated in the company’s Code of Conduct and further
elaborated in the company’s Anti-Corruption and Anti-Bribery Policy.
The policy is designed to help identify and prevent situations where
there is a risk of unethical influence. The policy provides guidance on
how employees and management are permitted to accept or give gifts,
hospitality, product giveaways or discounts, participate in trips or sales
competitions, and defines the company’s approval process for these. It
also sets out principles for avoiding conflicts of interest, dealing with public
authorities, sponsorship, charity and donations. The policy is available to
employees on the company intranet and is discussed in the annual online
training session on the policy. In addition, corruption risks are assessed
annually on a departmental basis as part of the risk management process.
In 2023, the company was not aware of any corruption-related cases,
lawsuits, or investigations against the company for 2023. In 2023, there
were no legal actions or judgments relating to antitrust infringements,
cartels, or abuse of dominant position.
Procurement practices
Verkkokauppa.com carefully selects its suppliers according to its
procurement process and aims for long-term partnerships. The way of
operating is based on fairness and transparency. Verkkokauppa.com has
been a member of the amfori BSCI program promoting sustainable trade
since 2021 and is committed to the BSCI’s principles of operation and the
development of operations according to the continuous improvement
model. Verkkokauppa.com requires all its suppliers to comply with the
company’s Code of Conduct and to commit to the suppliers’ principles
of operation (Supplier Code of Conduct), which include the amfori
BSCI principles of operation and are part of the contractual terms.
Verkkokauppa.com does not have its own production facilities. The
company complies with all applicable trade sanctions and customs
import and export regulations.
The requirements related to responsibility are defined in the suppliers’
code of conduct, which covers broadly, among other things, human
rights, social and environmental responsibility, and risk materials. In terms
of social responsibility, the topics covered, in line with the amfori BSCI
Code of Conduct, are social management system and cascade effect,
worker involvement and protection, the rights of freedom of association
and collective bargaining, prohibition of discrimination, violence and
harassment, fair remuneration, decent working hours, occupational
health and safety, prohibition of child labor, special protection for young
workers, prohibition of precarious employment, prohibition of bonded,
forced labor and human trafficking, protection of the environment and
ethical business behavior. Topics covered by environmental responsibility
include environmental systems, energy and climate, waste, chemicals
and hazardous substances, water and effluents, emissions to air, circular
economy and life cycle perspective, sustainable packaging materials,
and biodiversity. Suppliers are required to consider the environmental
perspective also in their own supply chain.
In the reporting year, the harmonization and integration of the
procurement practices of the subsidiary e-ville.com acquired in 2022 was
completed. Of the first-tier suppliers that manufacture Verkkokauppa.
com’s private label brands and operate in high-risk countries, 99.8% (98)
had a valid social responsibility audit.
Risk management
Sustainability-related risks are identified, assessed, evaluated, and
managed as part of the company’s overall risk management activities.
The sustainability perspective is integrated into the principles of risk
management, process description, and guidelines. Risk management is
part of the company’s management system, which is managed according
to the annual plan. Sustainability issues, also from a risk perspective, are
regularly discussed at Management Team meetings and are also part of
the reporting received by the Board of Directors. The Audit Committee
supports the Board of Directors by preparing the monitoring and control
tasks that fall within the Board’s remit, such as the effectiveness of risk
management systems. The company’s risk management is based
on the ISO 31000 standard and other generally recognized practices,
such as the Ministry of Finance guidelines on digital security, VAHTI.
Risk management is carried out in accordance with the company’s risk
management policy. The risk management policy approved by the Board
of Directors describes the company’s risk management principles,
responsibilities and practices. In line with the policy, the aim is also to
proactively prepare for sustainability related uncertainties or deviations.
In 2023, no critical sustainability risks were identified.
Environment
The main principles of Verkkokauppa.com’s environmental work are
stated in the company’s Code of Conduct. Verkkokauppa.com monitors its
environmental impact and aims to improve its environmental performance
by minimizing negative environmental impacts and promoting positive
impacts. In terms of the direct environmental impacts of the Company’s
activities, material issues include responsible selling, offering services
Verkkokauppa.com · Report of the Board of Directors
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supporting sustainable consumption, energy choices and energy
efficiency at its premises, packaging material choices and material
efficiency, minimizing product waste, reducing waste and directing
material for reuse. Indirect impacts relate to the manufacture, transport, use
and disposal of the products sold. The company exercises due diligence
by using well- known partners, either directly or through a network, and
ensures that they have the necessary certifications for their activities.
Suppliers are required to take environmental considerations into account in
accordance with the company’s Supplier Code of Conduct.
Selling products that customers actually need
and promoting a circular economy
Verkkokauppa.com’s principle is to sell products that customers actually
need, while minimizing customer returns and wastage. Success is
measured by the product return rate (%). In 2023, the product return
rate was 0.7% (0.7) and in addition to this, maintenance returns were
0.2% (0.3). In accordance with its sustainability program, the company
supports its customers in making responsible choices and offers
products and services that support a circular economy. In April 2023,
the company launched a trade-in service “Vaihtokauppa” that promotes
circular economy, allowing customers to sell their functional used
electronic devices back and receive a credit to their customer account
corresponding to the value of the device. The service operates entirely
online, which lowers the threshold for getting functional used devices
into circulation and promotes the extension of the life cycle of electronic
devices. The range of used products was expanded to new categories,
covering over one hundred items in computers, tablets, peripherals, and
phones. The maintenance services and spare parts availability offered for
the company’s private label products were systematically expanded to
cover new product categories.
Minimizing climate impacts
The company conducts an annual carbon footprint calculation covering
the entire value chain, including the essential direct and indirect
greenhouse gas emissions according to the GHG protocol. The
emission calculation shows that most of the company’s climate impact
comes from indirect emissions in the value chain (scope 3), especially
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from the manufacturing and use of sold products. In accordance with
its sustainability program, Verkkokauppa.com aims to achieve zero
greenhouse gas emissions from its own operation (scope 1 and 2) and
reduce its indirect climate impact (scope 3). Measures to reduce climate
impact progressed slower than expected in the reporting year; the
company aims to develop an emission reduction plan and work with
suppliers and partners to reduce indirect emissions.
In 2023, the company’s own operation’s greenhouse gas emissions
(scope 1 and scope 2) were 97 tCO
2
e (67). Emissions increased by 45% due
to increased heating energy consumption. In the longer term, emissions
have decreased by 77% compared to 2019. The 2023 full emission
calculation, including indirect scope 3 emissions, will be published in the
company’s sustainability report in the spring of 2024.
Energy choices and efficiency
The electricity purchased by the company is entirely EPD-certified
renewable energy. Verkkokauppa.com is constantly looking for
ways to improve energy efficiency and thus reduce emissions. In the
reporting year, an energy management software was introduced in
Helsinki operations to optimize heating and cooling. The total electricity
consumption of Verkkokauppa.com in 2023 was 4 125 MWh (4 106).
Material choices and efficiency
Verkkokauppa.com aims to select the best packaging materials for the
environment and use them efficiently. The company monitors industry
developments and tests new packaging products. Whenever possible,
the product’s own packaging is used for shipping, and unnecessary
additional packaging is avoided. Recyclable fiber materials, such as
cardboard bags, boxes, and fillers, are used for packaging, and plastic is
avoided. The goal is to increase the proportion of recycled materials in
packaging materials.
Waste, circulation of materials and waste prevention
Verkkokauppa.com’s waste management policy is based on order of
priority, where the primary aim is to avoid waste and then to promote
reuse and recycling of materials. When a product sold reaches the end
of its life cycle, customers are helped to recycle it properly, especially
for waste electrical and electronic equipment (WEEE) and batteries, to
recover valuable materials and to dispose of hazardous waste safely.
All Verkkokauppa.com stores accept WEEE waste and batteries in
accordance and beyond the producer responsibility, offering the
possibility to recycle even large household appliances with no obligation
to buy. The company’s goal is to constantly improve the recycling rate of
waste. In 2023, the company’s waste recovery rate was 100% (100). All
waste was directed to utilization, of which approx. 52% (65) was reused,
23% (19) was recycled as material, and 25% (16) was recovered for energy
production. No waste was diverted to landfill.
Personnel
In Verkkokauppa.com’s strategy, the personnel play a key role in
achieving the company’s business objectives. In line with the values
defined together with the personnel, the company wants to foster a
bold, agile and transparent organizational culture and invest in the
sense of community. The personnel policy complements and refines
Verkkokauppa.com’s Code of Conduct. The role of the personnel policy
is to ensure that the company has the human resources and practices
in place to achieve its objectives. The personnel policy is available on
the company’s website and covers the following topics: values, culture,
respect for diversity, equality and fairness, non- discrimination and non-
harassment, recruitment practices, leadership, internal communication,
occupational safety, well-being at work, job satisfaction, skills
development, remuneration, rewards and benefits, and cooperation.
The annually updated internal personnel development plan describes,
among other things, the goals and measures to develop and maintain the
competence of the personnel and to promote well-being at work.
Employment
The number of personnel fluctuates throughout the year and is at its
highest during the high season at the end of the year. Verkkokauppa.com
strives to hire personnel under permanent employment contracts, using
fixed-term contracts only for justified reasons, such as the high demand
season at the end of the year and the summer season. Most positions are
full-time, but due to the nature of the work, some employment contracts
are part-time. The company does not have zero-hours contracts, where
working hours are not defined. Agency-hired workers are used to fill
unplanned capacity gaps, such as short-term substitute assignments
due to illness, and to ensure sufficient capacity due to strongly fluctuating
customer demand or incoming material flow. The use of self-employed
or freelance workers is limited to individual cases in expert positions. In
early 2023, the company carried out change negotiations related to a
profit improvement program, reducing 75 employees. The company
also temporarily laid off all company employees, senior employees,
and management for a period of 14 days. In addition, as a result of the
negotiations, the job descriptions of salespeople were changed, and new
contracts were made with almost everyone to support organizational
change. Most of the personnel work in Finland. At the end of the year,
18 people (2.7%) as well as 13 agency-hired workers worked in the Asian
operations of the group.
Well-being and safety at work, job satisfaction
Occupational safety and well-being are monitored and developed in
cooperation with HR, the Health and Safety Committee and occupational
health care. The Health and Safety Committee, which meets on average
four times a year, defines an occupational health and safety action plan,
which is approved by the company’s Management Team. Ensuring a
safe working environment means preventing accidents and identifying
and avoiding hazards and near misses in a spirit of shared responsibility.
To prevent incidents, personnel are trained in safety at work and safety
risks are regularly reviewed, for example through safety walks. In the
reporting year, work safety was promoted and communicated, resulting
in a halving of work accidents compared to the previous year. The
annual occupational health action plan guides the development of work
well-being and increasingly focuses on preventive measures. The early
intervention model is used as support for the work community, and its use
was intensified in the reporting year. In addition, low-threshold services
supporting mental health were offered to employees and supervisors.
Work well-being indicators and work accident statistics are regularly
monitored by the management team. Different aspects of well-being are
developed and supported throughout the employment relationship. The
personnel’s wellbeing, engagement and willingness to recommend were
measured with a personnel survey four times during the year.
Verkkokauppa.com · Report of the Board of Directors
9
2023
Personnel indicators
2023 2022 2021 Additional information
Employment
Personnel on average 690 788 773 The comparative figure for 2022 has been updated to include e-ville employees.
Personnel at the end of the year 677 838 825
Full-time / part-time (%) 75/25 73/27 74/26
The comparative figure for 2022 has been updated to include e-ville.com emplo-
yees.
Permanent / fixed-term (%) 89/11 83/17 81/19
Volatility
Total turnover rate (%) 15.5 10.4 10.3 Does not include seasonal workers.
Sickness absence and accidents
Sickness absence rate (%) 4.9 5.6*
4.3
Theoretical regular working time. Does not cover e-ville.com employees, 3% of
the personnel.
Accident frequency 3.3 10.2 7.3
Accidents at work per million hours worked, calculated on actual hours worked.
Does not cover workers hired by agency. Does not cover e-ville.com employees,
3% of the personnel.
Figures are reported based on year-end information.
*)
Data corrected from what was reported in 2022.
Diversity, equality and equity
Verkkokauppa.com wants to foster its community culture and promote
fairness, equality, diversity, inclusiveness and appreciation of different
backgrounds. Gender, age, worldview ethnicity, disability, educational
background, citizenship, language, political or economic status,
health, appearance, or family matters must not create inequalities
between people in terms of company pay, remuneration, organizational
changes, training or recruitment. Diversity and gender mainstreaming
are considered in the development of activities, including by drawing
attention to and dismantling potential gender biased practices and
improving inclusiveness. The experience of being valued regardless
of background is one of the diversity and inclusion metrics monitored
in the personnel survey and part of the sustainability program. In the
reporting year, a diversity group was established to promote diversity,
equality, inclusion, and a sense of belonging, in the beginning primarily
by increasing personnel awareness of diversity. The proportion of men
and women is monitored by task level to ensure that women have equal
opportunities to advance to supervisor and management positions. The
company uses gender-neutral job titles to reflect the accessibility of
jobs for all, regardless of gender or other personal characteristics. In the
reporting year, a role complexity assessment model was introduced, and
a salary survey was conducted to promote pay equality.
Diversity of personnel and governing bodies by gender
2023 (%) 2022 (%)
Men
Women
Men
Women
All personnel 72 28 72 28
Supervisors 66 34 70 30
Heads and Deputy Heads
of department
81 19 78 22
Top management 63 37 67 33
Board of Directors 71 29 71 29
Situation at the end of year
Competence development
The company invests in the development of competence and learning
culture. During the reporting year, emphasis was placed on developing
leadership and supervisory work and online course selection was
increased significantly. The topics of the trainings included product
knowledge and working life skills related to the company’s change
process. In addition, degree training was organized, and a mentoring
program continued.
Information on the taxonomy of sustainable finance
The company reports information on the EU’s sustainable finance
taxonomy in accordance with EU Regulation 2020/852 and the
requirements of the Finnish Accounting Act. The EU taxonomy is
a classification system designed to channel capital flows towards
sustainable investments and help achieve a climate-neutral European
Union by 2050. At this stage, the classification system covers only
those economic activities that have the greatest need and potential
to significantly influence climate change mitigation and adaptation.
Economic activities specific to the distributive trades sector are currently
not explicitly mentioned in the taxonomy. In 2023, the company’s
business consisted of retail sales and sales of services supporting it. The
company has reviewed its operations to identify activities in its business
that would be eligible and aligned with taxonomy. The company’s
interpretation is that most of its business is not covered by the taxonomy.
Verkkokauppa.com has not identified taxonomy eligible revenue, capital
expenditures, or operating expenses in 2023. The required performance
indicators for revenue, capital expenditures (CapEx), and operating
expenses (OpEx) under the taxonomy regulation are reported in separate
tables as defined in the regulation. The indicators are reported as non-
eligible.
Verkkokauppa.com · Report of the Board of Directors
10
2023
Substantial contribution criteria DNSH criteria (’Does Not Significantly Harm’)
Economic activities
Code(s)
Absolute
turnover
MEUR
Proportion
of turnover
%
Climate chan-
ge mitigation
%
Climate chan-
ge adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and ecosys-
tems
%
Climate chan-
ge mitigation
Y/N
Climate chan-
ge adaptation
Y/N
Water and
marine
resources
Y/N
Circular
economy
Y/N
Pollution
Y/N
Biodiversity
and ecosys-
tems
Y/N
Minimum
safeguards
Y/N
Taxonomy-align-
ed proportion of
turnover, year
2022
%
Taxonomy-
aligned propor-
tion of turnover,
year 2021
%
Category
(enabling
activity)
E
Category
'(transitional
activity)'
T
A. TAXONOMY-ELIGIBLE ACTIVITES %
A.1. Environmentally sustainable activities
(Taxonomy aligned)
Turnover of environmentally sustainable activities
(Taxonomy Aligned (A.1)
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
Turnover of taxonomy-eligible but not environmentally sustai
-
nable activities (not Taxonomy-aligned activities)(A.2)
Total (A.1 + A.2)
0 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities (B)
502.9 100%
Total (A + B) 502.9 100%
Proportion of turnover from products or services
associated with Taxonomy-aligned economic
activities
The total revenue is based on the figures reported by the group.
Substantial contribution criteria DNSH criteria (’Does Not Significantly Harm’)
Economic activities (1)
Code(s)
Absolute
turnover
MEUR
Proportion
of turnover
%
Climate chan-
ge mitigation
%
Climate chan-
ge adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and ecosys-
tems
%
Climate chan-
ge mitigation
Y/N
Climate chan-
ge adaptation
Y/N
Water and
marine
resources
Y/N
Circular
economy
Y/N
Pollution
Y/N
Biodiversity
and ecosys-
tems
Y/N
Minimum
safeguards
Y/N
Taxonomy-align-
ed proportion of
turnover, year
2022
%
Taxonomy-
aligned propor-
tion of turnover,
year 2021
%
Category
(enabling
activity)
E
Category
'(transitional
activity)'
T
A. TAXONOMY-ELIGIBLE ACTIVITES %
A.1. Environmentally sustainable activities
(Taxonomy aligned)
CapEx of environmentally sustainable activities
(Taxonomy Aligned (A.1)
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
CapEx of taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)(A.2)
Total (A.1 + A.2) 0 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B) 2.4 100%
Total (A + B) 2.4 100%
Proportion of CapEx from products or services
associated with Taxonomy-aligned economic
activities
Capital expenditures include additions to tangible assets, intangible assets, and rights of use
during the financial year.
Verkkokauppa.com · Report of the Board of Directors
11
2023
Substantial contribution criteria DNSH criteria (’Does Not Significantly Harm’)
Economic activities (1)
Code(s)
Absolute
turnover
MEUR
Proportion
of turnover
%
Climate chan-
ge mitigation
%
Climate chan-
ge adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and ecosys-
tems
%
Climate chan-
ge mitigation
Y/N
Climate chan-
ge adaptation
Y/N
Water and
marine
resources
Y/N
Circular
economy
Y/N
Pollution
Y/N
Biodiversity
and ecosys-
tems
Y/N
Minimum
safeguards
Y/N
Taxonomy-align-
ed proportion of
turnover, year
2022
%
Taxonomy-
aligned propor-
tion of turnover,
year 2021
%
Category
(enabling
activity)
E
Category
'(transitional
activity)'
T
A. TAXONOMY-ELIGIBLE ACTIVITES %
A.1. Environmentally sustainable activities
(Taxonomy aligned)
OpEx of environmentally sustainable activities
(Taxonomy Aligned (A.1)
A.2. Taxonomy-Eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)
OpEx of taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities)(A.2)
Total (A.1 + A.2) 0 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities (B) 69.0 100%
Total (A + B) 69.0 100%
Proportion of OpEx from products or services
associated with Taxonomy-aligned economic
activities
Total operating expenses include direct costs not capitalized that are related to the company’s busi-
ness and operations.
Verkkokauppa.com · Report of the Board of Directors
12
2023
Information presented in the notes to the financial
statements
Information on the Company’s personnel and related parties is provided
in the notes to the financial statements.
Share trading and shares
Verkkokauppa.com share (VERK) in Nasdaq Helsinki stock exchange in
January-December 2023:
No. of
shared traded
Share of total
shares, %
Value,
EUR million
Last,
EUR
High,
EUR
Low,
EUR
Average,
EUR
6,886,994
15.18
18,212,687
2.60
2.99
2.24
2.64
Verkkokauppa.com market capitalization and shareholders
31 December 2023
Market capitalization (excl. Own shares), EUR million 117.5
Number of shareholders (of which nominee shareholders)
20,697 (8)
Nominee registrations and direct foreign shareholders, % 10.82
Households, % 56.12
Financial and insurance corporations, % 14.18
Other Finnish investors, % 19.02
At the end of the year, the company’s largest shareholders were Samuli
Seppälä (34.2%), Varma Mutual Pension Insurance Company (8.5%),
Ilmarinen Mutual Pension Insurance Company (4.8%), Mandatum Life
Insurance Company Limited (4.8%) and Nordea Small Cap Fund (3.1%).
On 31 December 2023, the share capital was EUR 100,000 and the
total number of shares in the company was 45,354,532 including 145,719
treasury shares held by the company. The treasury shares have no voting
rights, and no dividend is paid on them. The treasury shares accounted
for 0.32 percent of all shares. In January-December 2023, the company
transferred a total of 125,538 treasury shares as part of the remuneration
of Board members and key employees.
More information about Verkkokauppa.com’s shares and shareholders
and management holdings can be found on the company’s investor
website.
Flagging notifications
On 1 October 2023, Verkkokauppa.com Oyj received notifications in
accordance with Chapter 9, Section 10 of the Finnish Securities Market
Act according to which the legal entity exercising the ultimate control of
the shares subject to the flagging obligation has changed from Sampo
Plc to Mandatum Plc in connection with the partial demerger of Sampo
Plc on 1 October 2023. Due to the partial demerger, Sampo Plc’s holding
in Verkkokauppa.com Oyj fell below 5% and Mandatum Plc’s holding
exceeded 5%.
Long-term incentive plans
Verkkokauppa.com has had a share-based incentive plan for the CEO
and the Management Team; Performance Share Plan for 2020–2022. The
programme ended in 2022, but the final instalment of the programme
took place in May 2023.
11.5.2023 The Board of Directors of Verkkokauppa.com decided on a
new share-based incentive plan (Performance Share Plan 2023–2027)
for the CEO and the Management Team. The plan has three performance
periods covering the financial years 2023–2025, 2024–2026 and 2025–
2027. The Board of Directors decides annually on the commencement of
the performance period and its details. The performance criterion for the
first performance period 2023–2025 is Total Share Return (TSR).
The purpose of the plan is to align the objectives of shareholders and
management in order to increase the value of the company in the long
term, to encourage management to invest personally in the company’s
shares, to commit managers to the company and to offer them a
competitive reward plan in which participants can earn shares as reward
for performance and own investment.
Section 7.12 of the notes section describes the company’s share-based
incentive plan in more detail.
No new shares will be issued in connection with the payment of the
share rewards and therefore the resolution will not have a dilutive effect.
Verkkokauppa.com’s management team
Verkkokauppa.com’s management team at the end of 2023:
Member From / until
Panu Porkka, CEO
Nina Anttila, Chief Supply Chain Officer
Mikko Forsell, CFO
Vesa Järveläinen, Chief Commercial Officer
Until 2 November 2023
Tatu Kaleva, Chief Commercial Officer
From 1 October 2023
Pekka Litmanen, Chief Experience Officer
Perttu Meldo, Chief Strategy and Innovations Officer Until 18 August 2023
Saara Tikkanen, HR Director
Until 31 December 2023
Jyrki Tulokas, Chief Strategy and Technolgy Officer
Suvituuli Tuukkanen, Marketing and
Communications Director
Acquisitions
The company did not make any acquisitions during the fiscal year 2023.
In the comparison period, 1.4.2022, Verkkokauppa.com acquired the
Finnish online store e-ville.com. Further information on the acquisition
can be found in Note 7.20 Business combinations.
Performance improvement programme and change
negotiations
On 16.1.2023, Verkkokauppa.com launched a profit improvement
programme to secure profitability, and in connection with this, the
company started change negotiations. The profit improvement
programme targeted an annual profit improvement of EUR 10 million, of
which approximately EUR 6 million was realised in 2023.
Verkkokauppa.com completed the change negotiations on 9.3.2023.
As a result of the negotiations, the number of employees was reduced by
75 and all of the company officers, senior officers and management were
temorarity laid off for a fixed period of 14 days. The measures resulted
Verkkokauppa.com · Report of the Board of Directors
13
2023
in savings of approximately EUR 4 million in personnel costs in 2023.
The restructuring resulted in costs of EUR 1.2 million, which affect the
comparability of the result.
Board authorizations
The Annual General Meeting held on 30 March 2023 authorized the
Board of Directors to decide on the acquisition of a maximum of 4
535,453 shares in one or more instalments using the Company’s
unrestricted equity, taking into account, however, the provisions of
the Finnish Companies Act the maximum number of own shares. The
proposed number of shares corresponds to a maximum of approximately
ten percent of the total number of shares in the company. The Board of
Directors was authorized to decide on the material terms and conditions
of the share issue.
At the end of 2023, the Board of Directors had a valid authorization
to decide on the repurchase of a maximum of 4,535,453 shares in one
or more tranches and to decide to issue a maximum total of 4,535,453
shares in a share issue with one or more resolutions. The number of
shares in both authorisations corresponds to a maximum of ten per cent
of the company’s total number of shares.
The Board of Directors has used its authorization to transfer a total
of 37,430 of the company’s own shares for the payment of Board
remuneration. The authorization is valid until the next Annual General
Meeting, which is planned to be held on 4 April 2024, but no longer
than until 30 June 2024. The authorization revokes previous unused
authorizations to acquire shares.
In addition to the above, the Board of Directors has no other valid share
issue authorisations.
Board of Directors
The AGM confirmed the amount of Board members to be seven. Johan
Ryding, Kai Seikku, Samuli Seppälä and Arja Talma (Chairperson)
were re-elected. Additionally, Robin Bade, Henrik Pankakoski and Kati
Riikonen were elected as new members.
The compositions of the Board committees were decided to be as
follows: members of the Audit Committee are Kai Seikku (Chairperson),
Arja Talma (Vice Chairperson), Henrik Pankakoski and Kati Riikonen.
Members of the Remuneration Committee are Arja Talma (Chairperson),
Robin Bade, Johan Ryding and Kai Seikku.
Verkkokauppa.com’s stock exchange release published on 30 March
2023 on the decisions of the Annual General Meeting, is available on the
company’s investor website.
Annual general meeting 2023
The Annual General Meeting of Verkkokauppa.com Oyj was held in
Helsinki on 30 March 2023. The AGM adopted the financial statements
and discharged the members of the Board and the CEO from liability
for the financial year 2022 and approved the company’s remuneration
report for governing bodies as well as authorized the Board to decide on a
repurchase of the company’s own shares and the issuance of shares.
PricewaterhouseCoopers Oy was elected as the Company’s auditor
and as the auditor-in-charge will serve Mikko Nieminen. In addition,
the AGM approved the Shareholders’ Nomination Board’s proposals
concerning Board and auditor selection and remuneration. Also, the
Articles of Association were amended such that the general meeting may
be held as a so-called remote meeting.
Dividend
On 30 March 2023, Verkkokauppa.com Oyj’s Annual General Meeting
resolved that the Company deviates from its dividend distribution policy
and that no dividend be paid for the financial year 2022.
Company strategy
In November, Verkkokauppa.com updated its strategy for accelerating
profitable growth for the period 2024-2028 and its financial targets for
the strategy period. Verkkokauppa.com continues as a forerunner in the
market with the vision of creating the new normal for buying and owning.
Optimized product flows, automated intralogistics and distribution
network enable the fastest deliveries on the market. Verkkokauppa.com’s
constantly expanding express delivery service is pioneering even by
international standards and is fast increasing its share of all deliveries. The
cornerstones of the strategy are growing the current business faster than
the market, expanding the assortment as new openings, private label
products and new markets; significant growth of the services business;
and stronger profitability by continuously developing own operations and
platform. The company will efficiently take advantage of market recovery
and the new, sustainable business models will support the strengthening
of our market position.
Financial targets
In 2024-2028 strategy period, the company aims for faster than the
market, annual revenue growth (CAGR) of over 5 percent, an annual
operating profit margin of over 5 percent and to reduce fixed costs to less
than 10 percent of revenue by the end of 2028. The target is to pay out
60-80 percent of annual net profit in quarterly growing dividends.
To improve the company’s equity ratio, the Board of Directors proposes
to the Annual General Meeting 2024 that no dividend be paid for the
financial year 2023.
Corporate governance statement and
remuneration reports
The Corporate Governance Statement will be published in connection
with the Company’s Financial Statements for 2023 and on the company’s
website.
Verkkokauppa.com · Report of the Board of Directors
14
2023
Most significant risks and uncertainties
The company’s business operations involve risks and uncertainties,
such as risks related to the implementation of business strategy and
investments, risks related to procurement and logistics, as well as
risks related to information systems, compliance with laws, rules and
regulations, and other operational factors of the company’s business.
The risks and uncertainties described above may have an impact on the
company’s business, financial position or results of operations and may
require the company to change its business model.
The risks and uncertainties described below may have a negative or
positive impact on the company’s business, financial position or results.
The company’s Board of Directors has approved a risk management
operating model based on the ISO 31000 standard. Risks are managed
and managed in accordance with the company’s risk management policy.
Strategic risks
The choices made by the company regarding the business strategy
and selected focus areas may prove to be uncertain in terms of
implementation in the short or long term and involve a positive
opportunity or negative threat. Uncertainties related to strategic targets
are continuously monitored as part of the company’s strategic planning
and risk management. The online shift, customers’ need for fast
deliveries or new norms for owning may materialise more slowly or only
partially than estimated, which may slow down business development
and growth.
Market risks
There is uncertainty about the geopolitical situation in the world and
the crises in Ukraine, the Middle East and macroeconomics. General
economic uncertainty, high inflation, energy prices and, consequently,
uncertainty about the behaviour of financial markets are slowing
down household and corporate consumption and further weakening
investment capacity. Higher interest rates encourage households
to save instead of spending. The Finnish economy is in recession,
and economic development is forecast to remain weak in 2024. The
economy is expected to recover towards the end of 2024. However,
inflation has slowed down in Finland and households’ purchasing
power has strengthened. At present, visibility into general economic
developments is very limited. (https://www.suomenpankki.fi/en/media-
and-publications/releases/2023/finlands-economy-is-in-recession-
and-the-recovery-will-be-slow/)
The home technology industry is highly competitive, and therefore the
company’s operating result and profitability are exposed to changes and
uncertainties in the market and industry, including consumer behaviour
and general economic development. The company’s business is
seasonal and focused on early summer and the last quarter of the year.
Operational risks
The company’s business depends on the uninterrupted operation of its
website and IT systems. The development of operations requires key
personnel to have competence and capabilities in change management,
in addition to which the company is also affected by risks related to
business strategy and investment execution as well as corporate
transactions. Risks related to the operational factors of the company’s
business also include logistics and supply chain management as well as
business continuity in possible exceptional situations. The geographical
concentration of the manufacturing of procured products in specific
individual countries or parts thereof increases risks related to the supply
chain and availability of goods. Delays and disruptions in the supply
chain, logistics or information systems, as well as uncertainties related
to logistics partners, can hamper business operations. These operational
risks are managed by developing appropriate backup systems and
alternative operating methods and by investing in the uninterrupted
operation of information systems. Operational risks are also covered
by insurance. The company has identified AI-related risks, and they are
managed through an AI management model. According to the model, all
AI systems will be deployed through an impact assessment. This is how
we ensure compliance with future EU AI law.
Changing and increasingly complex legislation may require significant
changes in operations and lead to additional costs. Failure to comply with
the legislation may result in fines or damages. The company’s reputation,
recognition and trust among consumers is a competitive advantage, and
negative publicity related to, for example, regulation, product safety of
private label products or responsibility may have adverse financial effects
on the company. Verkkokauppa.com’s goal is to convey and publish
consistent, correct, relevant and reliable information in a timely manner
to the market, and there is a risk that the company will fail in its reporting
to the market. A possible prolonged disruption related to business
operations or prolonged poor profitability of business operations may
affect the company’s liquidity or financial position.
Financial risks
With regard to the continuity of the company’s business, the identified
risks are related to the efficient and economical use of capital. The
purchase prices and terms of purchased products, inventory curation and
turnover, and commercial success in reselling products may pose risks
to business profitability and cash flows. Verkkokauppa.com also provides
financial services at its own risk to consumer customers, which involves
a risk of possible credit losses. In addition, the company’s external
financing involves conditions whose possible non-fulfillment could
prematurely cause the loans to mature or the need to resettle changed
terms. The risks and uncertainties described above may have an impact
on the Company’s business, financial position or results of operations and
may require the Company to change its business model.
Events after the reporting period
On 18 January 2024, the Shareholders’ Nomination Board informed of
its proposals to the Annual General Meeting planned for 4 April 2024.
According to the proposal, the Board of Directors consists of seven
members and that the following persons be elected as members of the
Board of Directors for a term expiring at the end of the Annual General
Meeting 2025: The following are proposed to be re-elected: Robin Bade,
Henrik Pankakoski, Kati Riikonen, Samuli Seppälä and Arja Talma,
and the following are proposed as new members Irmeli Rytkönen and
Enel Sintonen.
Verkkokauppa.com · Report of the Board of Directors
15
2023
All candidates are independent of the company and its significant
shareholders, with the exception of Samuli Seppälä. The personal data
of the proposed new members of the Board of Directors are available on
the company’s investor website at https://investors.verkkokauppa.com/
en/corporate_governance/annual_general_meeting_2024
The nominees to the Board have indicated to the Shareholders’
Nomination Board that if elected, they will elect Arja Talma as the
Chairperson of the Board.
The Nomination Board proposes that the remuneration of the Board of
Directors remains unchanged.
Board proposal for profit distribution
According to Verkkokauppa.com’s dividend policy, the company’s target
is to pay 60–80 percent of annual net profit in increasing quarterly
dividends.
In order to improve the company’s equity ratio, the Board of Directors
proposes to the Annual General Meeting 2024 that Verkkokauppa.com
deviate from its dividend policy and that no dividend be paid for the
financial year 2023.
Business outlook
Due to the factors described in the Risks section, consumer demand is
expected to remain challenging. The conpany considers it difficult to
forecast the development of the business environment for 2024.
The company believes that it will be able to take advantage of the
online shift of commerce and increase its market position in its chosen
product categories. The company estimates that the increasing number
of customers moving online will be permanent.
Financial guidance for 2024
Verkkokauppa.com expects revenue for 2024 to remain at the 2023 level
(2023: EUR 502.9 million) and comparable operating profit (comparable
EBIT) to increase from 2023 (2023: EUR 6.1 million).
Distribution of shareholders on 31 December 2023
Size of shareholding,
shares
Number of
shareholders
% of
shareholders
Number
of shares % of shares
0–100 10
,503
50.75
%
406
,481
0.90
%
101–500 6,
667
32.21
%
1,704,
618
3.76%
501–1,000 1,
818
8.78
%
1,400,
772
3.09%
1,001–5,000 1,
462
7.06
%
3,080,
604
6.79%
5,001–10,000
129
0.62
%
960,
829
2.12%
10,001–50,000
79
0.38
%
1,483,
704
3.27%
50,001–100,000
7
0.03
%
489,
080
1.08%
100,001–
23
0.11
%
31,014,
334
68.38%
Non-Finnish
shareholders
8
0.04
%
4,814,
110
10.61%
Total
20,696
100.00%
45,354,532
100.00%
Shareholder breakdown by sector on 31 December 2023
Number of
shareholders
% of
shareholders
Number
of shares % of shares
Private corporates
20,121
97.2 2 %
25,452,638
56.12%
Financial and
insurance institutions
11
0.05 %
9,210,427
20.31%
Finance companies’
entities
8
0.04 %
2,436,524
5.37%
Households
466
2.25 %
2,190,246
4.83%
Other
49
0.24 %
87 7,916
1.94%
Non-profit
organizations
33
0.16 %
372,671
0.82%
Non-Finnish
shareholders
8
0.04 %
4,814,110
10.61%
Total
20,696
100.00%
45,354,532
100.00%
Major shareholders on 31 December 2023
Name Number of shares % of shares
Seppälä Sam Samuli 15,527,000 34.23%
Varma Mutual Pension Insurance Company
3,865,932
8.52%
Mandatum Life Insurance Company Limited 2,174,309 4.79%
Ilmarinen Mutual Pension Insurance Company 2,163,681 4.77%
Nordea Nordic Small Cap Fund
1,411,669
3.11%
Investment Fund Evli Finland Smallcap 998,165 2.20%
Skogberg Ville Johannes 650,628 1.43%
Mutual Insurance Company Kaleva 634,266 1.40%
Savings Bank Kotimaa investment Fund 506,325 1.12%
Special Investment Fund Aktia Mikro Markka 403,933 0.89%
10 biggest shareholders, total 28,335,908 62.48%
Other shareholders 17,018,624 37. 52%
Total
45,354,532
100.00%
Verkkokauppa.com · Report of the Board of Directors
16
2023
Alternative performance measurement
In this release, Verkkokauppa.com Oyj presents certain key figures that
are not accounting measures defined under IFRS and therefore are
considered as Alternative Performance Measures (APM). Verkkokauppa.
com Oyj applies in the reporting of alternative performance measures
the guidelines issued by the European Securities and Market Authority
(ESMA).
Verkkokauppa.com Oyj uses alternative performance measures
to reflect the underlying business performance and to enhance
comparability between financial periods. The company’s management
believes that these key figures provide supplementing information on the
income statement and financial position.
Alternative performance measures do not substitute the IFRS key
ratios.
Financial key figures
1–12/2023 1–12/2022 1–12/2021 1–12/2020
Revenue, thousand euros 502.9 543.1 575
554
Gross profit, thousand euros 80.9 80.6 91.2 88.4
Gross margin-% 16.1% 14.8% 15.9% 16.0%
EBITDA, thousand euros 11.1 7.8 25.3 24.6
EBITDA-% 2.2% 1.4% 4.4% 4.4%
Operating profit, thousand euros 4.7 2.3 20.3 19.6
Operating profit-% 0.9% 0.4% 3.5% 3.5%
Comparable operating profit, thousand euros 6.1 3.5 20.3 20.4
Comparable operating profit- % 1.2% 0.6% 3.5% 3.7%
Profit for the period, thousand euros 2.1 0.3 15,1 14.6
Equity ratio, % 16.2% 15.8% 21.4% 24.5%
Gearing, % 21.5% 74.6% -2.2% -52.2%
Personnel at the end of the period 677 838 825 818
Share performance indicators
1–12/2023 1–12/2022 1–12/2021 1–12/2020
Basic earnings per share, euros 0.05 0.01
0.34
0.33
Diluted earnings per share, euros 0.05 0.01 0.33 0.32
Number of issued shares 45,355 45,355 45,065 45,065
Number of treasury shares 146 271 323 353
Weighted average number of
shares outstandaing
45,209 45,083 44,731 44,907
Dilutes weighted average number of
shares outstandaing
45,277 45,342 45,205 45,447
Equity per share, € 0.63 0.59 0.79 0.90
Dividend per share, €* - - 0.25 0.45
Payout ratio, % - - 73% 138%
Effective dividend yield, % - - 3.5% 6.3%
Price per earnings ratio (P/E ratio) - - 21.1 21.9
Lowest share price 2.24 2.83 6.61 2.49
Highest share price 2.99 7.4 3 10.34 7.9 0
Average share price 2.64 4.59 8.17 4.95
Period end share price 2.6 2.84 7.13 7.12
Market value of the shares at period end, MEUR 117.5 128.6 321.3 320.9
The number of traded shares 6,886 9,197 20,924 26,714
Traded shares of all shares, % 15.2% 20.3% 46.4% 59.3%
* 2023: The Board proposes to the AGM of 2024, that no dividend
to be distributed from the profit of the 2023 financial year
Verkkokauppa.com · Report of the Board of Directors
17
2023
Formulas for key ratios
Key ratio Definitions
Basis of alternative performance measures adopted
Gross profit Revenue – materials and services
Gross profit shows the profitability of the sales
Gross margin, %
(Revenue – materials and services) /
Revenue
x 100
Gross margin measures the profitability of the sales of
Verkkokauppa.com Group
EBITDA Operating profit + depreciation + amortization
EBITDA shows the operational profitability
EBITDA, %
(Operating profit + depreciation + amortization) /
Revenue
x 100
EBITDA measures the operational profitability of
Verkkokauppa.com Group
Operating profit (ebit)
Result for the period before income taxes
and net finance income and costs
Operating profit describes the business results and
is a key metric used in medium-term targets
Operating margin (ebit), %
Operating profit /
Revenue
x 100
Operating margin measures operational efficiency of
Verkkokauppa.com Group
Items affecting comparability
Material items which are not part of noComparable operating
profits expenses related to possible transfer to official list
of Nasdaq Helsinki, restructuring costs including workforce
redundancy and other restructuring costs, impairment losses
of fixed assets, gain or losses recognized from disposals of
fixed assets/businesses, transaction costs related to business
acquisition, compensations for damages and legal proceedings
Comparable operating profit
Operating profit before taxes and financial net adjusted
with items affecting comparability
With the help of a comparable operating profit, it is
possible to compare the operating profit realized in
different accounting periods without the effect of items
that are not essentially part of the usual business
Comparable operating profit margin %
Comparable operating profit /
revenue
Comparable operating margin measures comparable
operational efficiency of
Verkkokauppa.com Group
Equity ratio, %
Total equity /
Balance sheet total – advance payments received
x 100
Equity ratio measures Verkkokauppa.com Group’s
solvency, ability to bear losses and ability to meet
commitments in the long run
Interest-bearing net debt Lease liabilities – cash and cash equivalents
The indicator describes the group's debt position
Gearing, %
Lease liabilities – cash and cash equivalents /
Total equity
x 100
Gearing measures the relation of equity and interest-
bearing net debt of Verkkokauppa.com group and
shows the indebtedness of the company
Investments
Increases in intangible assets, property, plant and
equipment during the financial period
Verkkokauppa.com · Report of the Board of Directors
18
2023
Key ratio Definitions
Basis of alternative performance measures adopted
Net investments
Investments in intangible and tangible assets - proceeds from
the sale of fixed assets. Net investments do not include
non-capitalized/unfinished acquisitions.
Earnings per share, Basic
Profit for the period attributable to equity holders of the company
Weighted average number of shares outstanding
The key figures describe the distribution of the group's
profit to its owners.
Earnings per share, diluted
Profit for the period attributable to equity holders of the company /
Weighted average number of shares outstanding + dilutive
potential shares
Equity per share Equity / Number of shares at reporting day
Dividend per share Dividend / Number of shares at reporting day revised by share split
Dividend payout ratio, %
Dividend per share revised by share split /
Earnings by share revised by share split
x 100
Effective dividend yield % Dividend per share / Share price at reporting day x 100
Price per earnings ratio (P/E ratio) Share price at reporting day / Earnings per share
Traded shares of all shares, %
The number of changed share during the reporting period /
The average number of share during the reporting period
x 100
Reconciliation of alternative key ratio
EUR million 1–12/2023 1–12/2022
Operating profit 4.7
2.3
- costs related to comparable operating result 1.4
1.2
Comparable operating profit
6.1
3.5
EUR million 1–12/2023 1–12/2022
Direct costs of acquiring businesses 0.0 0.8
Earn-out Additional purchase price 0.2 0.4
Restructuring reservation
1.2
-
Costs related to comparable operating
result total
1.4 1.2
Verkkokauppa.com · Report of the Board of Directors
19
2023
1 CONSOLIDATED STATEMENT OF INCOME 2 CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
EUR thousand 2023 2022
Profit for the financial year 2,070
Other comprehensive income items:
Conversion differences 27 30
Items that may be transferred to income in the future
Realized fair value changes from equity investments 0 72
Income taxes related to items 0 -14
Other comprehensive income after taxes, total
Comprehensive income for the financial year
Comprehensive income for the financial year attributable to
Equity holders of the company 2,097 412
EUR thousand Note 2023 2022
Revenue
7.2
Other operating income
7.3
Materials and services
7.4
-422,001 -462,522
Employee benefit expenses
7.5
-36,690 -40,233
Depreciation and amortization
7.7
-6,365 -5 552
Other operating expenses
7.8
-33,500 -33 434
Operating profit
Finance income
7.9
Finance costs
7.9
-2,273 -1,686
Profit before income taxes
Income taxes
7.10, 7.16
-704
-291
Profit for the financial year
Profit for the financial year attributable to
Equity holders of the company 2,070 324
Earnings per share calculated from the profit attributable to equity holders
Earnings per share, basic (EUR)
7.11
Earnings per share, diluted (EUR)
7.11
The notes are an integral part of these financial statements.
CONSOLIDATED FINANCIAL STATEMENTS 2023
Verkkokauppa.com · Consolidated Financial Statements
20
2023
3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR thousand Note 31.12.2023 31.12.2022
Non-current assets
Intangible assets
7.13
Goodwill
Tangible assets
7.14
Right-of-use assets
7.15
Deferred tax assets
7.16
Trade receivables
7.17
Other non-current receivables 396 397
Non-current assets, total
Current assets
Inventories
7.18
Trade receivables
7.17
Loan receivables
7.23 .1
Other receivables
7.17
Income tax receivables
7.10
Accrued income
7.17
Cash and cash equivalents
7.19
Current assets, total
Total assets
EUR thousand Note 31.12.2023 31.12.2022
Equity
Share capital
Treasury shares
-786 -1 410
Invested unrestricted equity fund
Conversion differences
Retained earnings
-526 -42
Profit for the financial year
Total equity
7.21
Non-current liabilities
Lease liabilities
7.15
Deferred tax liabilities
7.16
Financial institution loans, long-term
7.23 .1
Provisions
7.25
Other long-term liabilities
Non-current liabilities, total
Current liabilities
Lease liabilities
7.15
Financial institution loans, short-term
7.23 .1
Advance payments received
Trade payables
Other current liabilities
7.24
Accrued liabilities
7.24
Income tax liabilities
Current liabilities, total
Total liabilities
Total equity and liabilities
The notes are an integral part of these financial statements.
Verkkokauppa.com · Consolidated Financial Statements
21
2023
4 CONSOLIDATED CASH FLOW STATEMENT
EUR thousand Note 2023 2022
Cash flow from operating activities
Profit before income taxes
Depreciation and impairment
7.7
Finance income and costs
7.9
Other adjustments
Cash flow before change in working capital
Change in working capital
Increase (-)/decrease (+) in non-current non-interest-bearing
trade receivables
-2,209 -1,761
Increase (-)/decrease (+) in trade and other receivables
-7,116
-2,274
Increase (-)/decrease (+) in inventories
Increase (+)/decrease (-) in current liabilities
-12,445
Cash flow before financial items and taxes
Interest paid
-1,159 -615
Interest received
Interest of lease liabilities
-912 -1,071
Income tax paid
-2,967
Cash flow from operating activities
Cash flow from investing activities
Acquisition of subsidiaries
-4,571
Purchases of property, plant and equipment
-335
-2,773
Purchases of intangible assets
-2,041
-2,254
Proceeds from equity investments
Cash flow from investing activities
-1,949
-9,260
EUR thousand Note 2023 2022
Cash flow from financing activities
Decrease (-) in lease liabilities
-4,810 -4,237
Dividends paid
Proceeds from long-term loans
Payments to long-term loans
-1,250
Proceeds from short-term loans
Payments to short-term loans
-2,836
-5,531
Cash flow from financing activities
-7,646
Increase (+) / decrease (-) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Translation differences
-20 96
Cash and cash equivalents at end of financial year
7.19
The notes are an integral part of these financial statements.
Verkkokauppa.com · Consolidated Financial Statements
22
2023
A Share capital
B Treasury shares
C Invested unrestricted equity fund
D Fair value reserve
EUR thousand A B C D E F
Equity 1 Jan 2023
-1,410
Profit for the financial year
Changes in fair values of equity investments
Comprehensive income for the financial year, total
Disposal of treasury shares - Board fees
-237
Share-based remuneration
Transactions with owners, total
-839
-88
Equity 31 Dec 2023
-786
Equity 1 Jan 2022
-1 611
Equity 1 Jan 2022
Profit for the financial year
Changes in fair values of equity investments - - -
Comprehensive income for the financial year, total
Dividend distribution
-11,068
-11,068
Acquisition of treasury shares
Disposal of treasury shares - Board fees
-125
Share-based incentives
-92
Transactions with owners, total
-11,360
-9,626
Equity 31 Dec 2022
-1,410
5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
E Retained earnings
F Total equity
Verkkokauppa.com · Consolidated Financial Statements
23
2023
Verkkokauppa.com · Consolidated Financial Statements
24
2023
Verkkokauppa.com · Consolidated Financial Statements
25
2023
Verkkokauppa.com · Consolidated Financial Statements
26
2023
Verkkokauppa.com · Consolidated Financial Statements
27
2023
Verkkokauppa.com · Consolidated Financial Statements
28
2023
Verkkokauppa.com · Consolidated Financial Statements
29
2023
Verkkokauppa.com · Consolidated Financial Statements
30
2023
Verkkokauppa.com · Consolidated Financial Statements
31
2023
Verkkokauppa.com · Consolidated Financial Statements
32
2023
Verkkokauppa.com · Consolidated Financial Statements
33
2023
Verkkokauppa.com · Consolidated Financial Statements
34
2023
Verkkokauppa.com · Consolidated Financial Statements
35
2023
Verkkokauppa.com · Consolidated Financial Statements
36
2023
Verkkokauppa.com · Consolidated Financial Statements
37
2023
Verkkokauppa.com · Consolidated Financial Statements
38
2023
Verkkokauppa.com · Consolidated Financial Statements
39
2023
Verkkokauppa.com · Consolidated Financial Statements
40
2023
Verkkokauppa.com · Consolidated Financial Statements
41
2023
Verkkokauppa.com · Consolidated Financial Statements
42
2023
Verkkokauppa.com · Consolidated Financial Statements
43
2023
Verkkokauppa.com · Consolidated Financial Statements
44
2023
Verkkokauppa.com · Consolidated Financial Statements
45
2023
Verkkokauppa.com · Consolidated Financial Statements
46
2023
Verkkokauppa.com · Consolidated Financial Statements
47
2023
Verkkokauppa.com · Consolidated Financial Statements
48
2023
Verkkokauppa.com · Consolidated Financial Statements
49
2023
Verkkokauppa.com · Consolidated Financial Statements
50
2023
Verkkokauppa.com · Consolidated Financial Statements
51
2023
Verkkokauppa.com · Consolidated Financial Statements
52
2023
8 FINANCIAL STATEMENTS OF PARENT COMPANY (FAS) 2023
INCOME STATEMENT
EUR thousand Note 2023 2022
Revenue
8.2
500,936
538,602
Other operating income
8.3
458
977
Materials and services
Materials and services
Purchases during the year - 407,023 -442,965
Stock change -11,267 -14,228
External services -2,054 -1,205
Materials and services total
-420,343
-458, 398
Employee benefit expenses
Salaries and fees
8.4,8.5
-28,296 -30,915
Personnel incidentals
Pension expenses
8.4,8.5
-5,395 -5,799
Other personnel side costs
8.4,8.5
-945 -1,128
Employee benefit expenses total
-34,637
-37,8 42
Depreciation and amortization
Planned depreciation
8.6
-1,983 -1,615
Depreciation and amortization total
-1,983
-1,615
Other operating expenses
8.7
-40,189
-38,673
Operating profit
4,242
3,051
EUR thousand Note 2023 2022
Financial income and expenses
Other interest and financing income
From companies of the same group
8.8
29 22
From others
8.8
331 15
Interest expenses and other financial expenses
For others
8.8
-1,337 -600
Financial income and expenses total -978 -562
Profit (loss) before appropriations and taxes 3,264
2,489
Financial statement transfers
Change in depreciation differences
8.20
-793 -400
Financial statement transfers total
-793
-400
Income taxes
Taxes for the financial year
8.9
-537 -399
Taxes of previous fiscal years
8.9
-2 -20
Profit for the financial year
1,933
1,669
Verkkokauppa.com · Financial Statements (FAS)
53
2023
EQUIVALENT
EUR thousand Note 2023 2022
NON-CURRENT ASSETS
Intangible assets
Other intangible asset
8.10
766
397
Immaterial rights
8.10
4
17
Other intangible assets
8.10
3,466
357
Prepaid expenses
8.10
343
2,530
Total intangible assets
4,579
3,300
Tangible assets
Land and water areas
8.11
2
2
Machines and hardware
8.11
4,764
5,491
Other tangible assets
8.11
314
433
Advance payments and unfinished purchases
8.11
720
812
Total tangible assets
5,800
6,738
Investments
Shares in companies of the same group
8.12
6,249
6,138
Other shares and participations
0
0
Total investments
6,249
6,138
NON-CURRENT ASSETS TOTAL
16,628
16,176
CURRENT ASSETS
Inventories
8.16
62,818
74,084
Long-term receivables
Accounts receivable
8.13
7,824
5,615
Receivables from companies of the same group
8.14
1,830
1,830
Other receivables
8.13
372
372
Total long-term receivables
10,025
7,817
Short-term receivables
Accounts receivable
8.13
36,978
28,709
Receivables from companies of the same group
8.14
1,072
232
Other receivables
8.15
2,743
2,629
Accruals
8.15
7,891
8,984
Income tax receivables
8.15
0
892
Total short-term receivables
48,685
41,445
Cash and cash equivalentses
8.17
30,729
20,667
CURRENT ASSETS TOTAL
152,257
144,014
ASSETS TOTAL
168,886
160,190
RESPONSIBLE
EUR thousand Note 2023 2022
EQUITY
Share capital 100 100
Invested unrestricted equity fund 28,196 28,069
Retained earnings 3,495 1,624
Profit for the financial year
1,933
1,669
Total equity
8.18
33,724
31,462
Appropriations
Depreciation difference
8.20
1,193
400
Appropriations total
1,193
400
Provisions
Other provisions
8.24
1,008
745
Provisions total
1,008
745
Long-term liabilities
Long-term debt
Loans from financial institutions
8.23
18,750
22,500
Total long-term liabilities
18,750
22,500
Short-term debt
Loans from financial institutions
8.21
2,500
1,250
Received prepayments
4,692
6,433
Trade payables
78,831
66,677
Liabilities to companies of the same group
8.22
438
102
Other short-term liabilities
8.21
10,365
9,472
Accrued liabilities
8.21
17,348
21,149
Income tax liabilities
8.21
37
0
Total short-term liabilities
114,211
105,083
LIABILITIES TOTAL 132,961 127,583
EQUITY AND LIABILITIES TOTAL 168,886 160,190
BALANCE
Verkkokauppa.com · Financial Statements (FAS)
54
2023
EUR thousand 2023 2022
Cash flow from operating activities
Profit before income taxes 2,471 2,089
Adjustments
Depreciations and amortizations 1,983 1,615
Finance income and expense 978 563
Other adjustments 1,385 296
Cash flow before change in working capital 6,817 4,562
Change in working capital
Increase (-)/decrease (+) in non-current n-i-b trade receivables -2,209 -1,745
Increase (-)/decrease (+) in trade and other receivables -8,132 -5,103
Increase (-) /decrease (+) in inventories 11,267 14,228
Increase (+) /decrease (-) in accounts payable and other current liabilities 7,581 -10,557
Cash flow before financial items and taxes 15,324 1,385
Interest paid -1,041 -21
Other finance expenses paid -224 -579
Interest received 360 37
Income tax paid 390 -3,049
Cash flow from operating activities 14,809
-2 227
STATEMENT OF FUNDS
EUR thousand 2023 2022
Cash flow from investing activities
Acquisition of subsidiary companies 427 -2,888
Investments in the invested unrestricted equity fund -350
Purchase of property, pland and equipment -283 -2,771
Purchases of intangible assets -2,041 -2,304
Granted loans 0 -3,080
Sales proceed from disposal of equity investments 0 339
Cash flow from investing activities -2,247 -10,705
Cash flow from financing activities
Dividends paid 0 -11,068
Withdrawals of long-term loans 0
25,000
Repayments of long-term loans 0 -1,250
Withdrawals of short-term loans Repayments of short-term loans 0
5,000
Repayments of short-term loans -2,500
-5,000
Cash flow from financing activities -2,500 12,682
Increase (+) / decrease (-) in cash and cash equivalents 10,062 -250
Cash and cash equivalents at beginning of financial year 20,667 20,917
Cash and cash equivalents at end of reporting period 30,729 20,667
Verkkokauppa.com · Financial Statements (FAS)
55
2023
8.1 Notes on the preparation of the financial
statements
Verkkokauppa.com Oyj is the parent company of the group, which is
headquartered in Helsinki, Finland.
Verkkokauppa.com Oyj’s financial statements have been prepared
in accordance with local requirements and those generally accepted in
Finland in accordance with accounting principles (Finnish Accounting
Standards, FAS). The financial statements are presented in euros.
When preparing the financial statements, the company’s management
is subject to valid regulations and good accounting practices accordingly
to make estimates and assumptions that affect the valuation of financial
statement items and for periodization. Realized figures may differ from
the estimates made.
The parent company Verkkokauppa.com Oyj bought 100% of the
shares of e-Ville Distribution Oy on 1 April 2022.
Verkkokauppa.com Oyj’s wholly owned Finnish subsidiary Arc
Distribution Oy (founded in February 2022) on 1 April 2022, acquired
100% ownership of Digi Electronics Ltd. (Hong Kong) and Digital Trading
(Shenzhen) Co. Ltd (China) shares.
Net sales
Net Sales is calculated by deducting direct taxes and other sales related
adjustments from gross sales. Impaired receivables are accounted as
credit losses by applying good accounting principles. Credit losses are
reported in other operational expenses.
The company sells various visibility in brick-and-mortar stores, the web
and other media to its suppliers. Some of the suppliers pay marketing
support based on jointly agreed marketing activities. The company posts
the above mentioned marketing sales to revenue and the corresponding
costs are posted in raw materials purchases.
The revenue include income from customer financing service.
Revenue recognition
Revenue is recognized at the time of product delivery.
Items in foreign currencies
Transactions in currencies other than euros are translated using the
transaction date exchange rate.
At year-end, the outstanding foreign currency receivables and liabilities
are translated to EUR using the closing date average exchange rates.
Receivable exchange rate differences are entered in the income
statement as sales adjustments and when translating account payables,
foreign exchange rate differences are booked as adjustments to
purchases. Exchange rate differences deriving from other posts are
booked as financial exchange rate differences.
Other operating income
Other income continuously includes income from subletting space and
the sale of fixed assets.
Intangible and tangible assets
Intangible and tangible assets are measured at their historical cost, less
depreciation according to plan. Planned depreciation is recorded on a
straight-line basis over the useful life of an asset.
IT-applications produced for the company’s own use have been
capitalized in other intangible assets and include the direct personnel
costs of the development work. These related staff expenses have been
reclassified from the profit and loss statement into other intangible assets.
The book value of the fixed assets does not contain any appreciations.
Maintenance and repair expenses are booked as running costs with
the exception of substantial upgrades to rented premises, which are
activated in fixed assets.
The carrying value of land and water areas as well as the carrying value
of other tangible assets are based on historical costs.
No write-downs have been done on land and water areas.
The periods for planned depreciations are as follows:
Intangible rights 5 years
Research and Development 3–5 years
Machinery and Equipment 3–10 years
Upgrades to premises 5–10 years
Accounts receivables
The expected credit losses are deducted from the value of the trade
receivables.
The expected credit losses are recognised based on the ageing and
the origin of the trade receivable.
All over 90 days past-due trade receivables are recognised entirely as
credit losses.
Point of payment receivables
All payment and credit card etc. receivables are reported in the balance
sheet group cash in hand and at banks.
Income taxes
The income taxes include taxes based on the Verkkokauppa.com Oyj’s
taxable profit.
Deferred taxes
Deferred taxes are not booked in the financial statements.
Provisions
The company recognises a provision for product warranty obligations.
The provision is estimated based on realised warranty costs and on
assumptions on failure rates of sold products.
Inventory valuation
Inventories are stated in the balance sheet at their acquisition cost or at
the lower acquisition price or probable selling price.
NOTES TO THE FINANCIAL STATEMENTS 31.12.2023
Verkkokauppa.com · Financial Statements (FAS)
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2023
8.2 Revenue
Revenue by external customer location
EUR thousand 2023 2022
Finland 467,6 48 499,316
EU 28,125 24,302
Rest of the world 5,163
14,985
Revenue by external customer location 500,936
538,602
8.3 Other operating income
EUR thousand 2023 2022
Lease income from subleasing right-of-use
assets
266 545
Other income 191
431
Other operating income, total 458
977
8.4 Employee benefits
EUR thousand 2023 2022
Salaries and fees
29,179 31,639
Pension costs - contribution-based arrangements 5,400 5,956
Other personnel-related expenses
1,126 1,173
Total personnel costs before activation 35,705
38,768
Capitalized employee benefits for
the financial year
Wages and salaries -883 -724
Pension expenses -defined contribution plans -156 -157
Other personal expenses -30 -45
Capitalized employee benefits for
the financial year
-1,068
-926
Total personnel costs 34,637 37,842
The capitalized personnel costs are mainly related to the development of
the company’s enterprise resource planning system, which is explained
more in note Intangible assets 8.10, and the logistics automation of the
Jätkäsaari warehouse.
2023 2022
Number of employees at the end of
the financial year
656 821
The number of personnel includes both full-time and part-time
employees. The amount does not include hired labor.
Information on the management’s employment benefits is presented
in the notes Management remuneration 8.5.
8.5 Management remuneration
The following table shows the remuneration of the CEO and the Executive
Committee, as well as the shareholdings and holdings as a percentage of
the total share capital. The amounts presented are performance-based.
The share-based payments are based on an estimate of their realization
at the end of the year. The performance share-based payment includes
the cost effect on the financial year, regardless of the time of the share
transfer.
Management remuneration
2023
EUR Thousand
CEO
Management
team
2023,
total
Short-term employee benefits
Fixed basic salaries and fringe benefits
394 1,342 1,736
Incentive bonus
124 174 298
Statutory pension
74 251 325
Share-based payments
Share-based payments
6 19 25
Total 597 1,787 2,384
Shareholding, pcs
119,000 103,552 222,552
% of shares
0.26% 0.23% 0.49%
2022
EUR Thousand
CEO Management
team
2022,
total
Short-term employee benefits
Fixed basic salaries and fringe benefits
409 1,374 1,783
Incentive bonus
10 15 25
Statutory pension
78 217 295
Share-based payments
Share-based payments
53 88 141
Total
551 1,694 2,245
Shareholding, pcs
95,000 110,250 205,250
% of shares
0.21% 0.24% 0.45%
Board fees
EUR thousand 2023 2022
Board members 31 Dec 2023
Arja Talma
, Chair of the Board 89 89
Christoffer Häggblom
(member until 30 Mar) 14 66
Kai Seikku
, Chairman of the Audit Committee 51 51
Samuli
Seppälä 35 35
Mikko Kärkkäinen
(member until 30 Mar) 9 35
Frida Ridderstolpe
(member until 30 Mar) 9 35
Johan Ryding
39 39
Robin Bade
(member since 30 Mar) 30 -
Henrik Pankakoski
(member since 30 Mar) 32 -
Kati Riikonen (member since 30 Mar) 32 -
Remuneration of Board of Directors, total 341 350
During the financial year 2023, the company transferred 50,218 (32,140)
treasury shares for the payment of the fees.
Verkkokauppa.com · Financial Statements (FAS)
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2023
Board members’ shareholdings on 31.12.
Shareholding, pcs 2023 2022
Arja Talma
, Chair of the Board 37,853 23,780
Christoffer Häggblom
(member until 30 Mar) - 33,339
Kai Seikku
, Chairman of the Audit Committee 157,8 45 150,809
Samuli
Seppälä
15,527,000
15,957,000
Mikko Kärkkäinen
(member until 30 Mar) - 5,858
Frida Ridderstolpe
(member until 30 Mar) - 5,858
Johan Ryding
12,849 5,882
Robin Bade
(member since 30 Mar) 5,347 -
Henrik Pankakoski
(member since 30 Mar) 5,347 -
Kati Riikonen (member since 30 Mar) 5,347 -
Number of shares, total 15,751,588
16,182,526
% of shares 2023 2022
Arja Talma
, Chair of the Board 0.08% 0.05%
Christoffer Häggblom
(member until 30 Mar) 0.00% 0.07%
Kai Seikku
, Tarkastusvaliokunnan puheenjohtaja 0.35% 0.33%
Samuli
Seppälä 34.23% 35.18%
Mikko Kärkkäinen
(member until 30 Mar) 0.00% 0.01%
Frida Ridderstolpe
(member until 30 Mar) 0.00% 0.01%
Johan Ryding
0.03% 0.01%
Robin Bade
(member since 30 Mar) 0.01% -
Henrik Pankakoski
(member since 30 Mar) 0.01% -
Kati Riikonen (member since 30 Mar) 0.01% -
% of shares, total 34.72% 35,68%
The tables above show board member’s shareholdings and % of shares.
8.6 Depreciation and amortization
EUR thousand 2023 2022
Intangible assets
Development costs 413 283
Other intangible assets 349 85
Amortization of intangible assets, total 762
367
Tangible assets
Machinery and equipment 1,098 1,095
Other tangible assets 123 152
Depreciation of tangible assets, total 1,221 1,247
Depreciation and amortization, total 1,983 1,615
8.7 Other operating expenses
EUR thousand 2023 2022
Premises maintenance and operation expenses 12,264 12,157
Financial transactions expenses 1,637 1,880
Marketing 7,130 7,652
Administrative services 10,821 11,231
Other expenses 8,337 5,753
Other operating expenses, total 40,189 38,673
Auditor fees
EUR thousand 2023 2022
Statutory audit 204 142
Other services 29 20
Auditor fees, total 233 162
The auditing firm chosen by the general meeting is Pricewaterhouse-
Coopers Oy. The non-auditing services performed by Pricewaterhouse-
Coopers Oy totaled 29 thousand euros.
8.8 Finance income and costs
Finance income
EUR thousand 2023 2022
Interest income 331
15
Interest income from companies of
the same group
29
22
Total 360
37
Finance costs
EUR thousand 2023 2022
Other interest costs
9 21
Other finance costs 161 212
Exchange rate differences on cash and cash
equivalents
63 69
Monetary institution Loans interest expenses
1,104 298
Total
1,337 600
In addition to financial income and costs, exchange rate differences have
been recognized as adjustments to purchases for the financial year.
8.9 Income taxes
EUR thousand 2023 2022
Current taxes 537 399
Taxes for previous accounting periods 2 20
Income taxes, total 539 420
Verkkokauppa.com · Financial Statements (FAS)
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2023
8.10 Intangible assets
EUR thousand Development costs
Other intangible
assets
Advance payments
and work in progress Total
Cost 1 Jan 2023 3,383 1,806 2,530 7,7 19
Increases 782 1,259 2,041
Disposals
Transfers between items 3,446 -3,446
Cost 31 Dec 2023 4,165 5,252 343 9,759
Accumulated amortization and impairment 1 Jan 2023
-2,986 -1,433 0 -4,419
Accumulated amortization on disposals 0
Transfers between items 0
Amortization for the financial year
-413 -349 0 -762
Accumulated amortization and impairment
31 Dec 2023
-3,398 -1,782 0 -5,181
Carrying amount 1 Jan 2023 397 373 2,530 3,300
Carrying amount 31 Dec 2023 766 3,470 343 4,579
EUR thousand Development costs
Other intangible
assets
Advance payments
and work in progress Total
Cost 1 Jan 2022 3,246 1,777 392
5,415
Increases 82 29 2,192
2,304
Disposals
0
Transfers between items 55
-55
0
Cost 31 Dec 2022 3,383 1,806
2,530
7,7 19
Accumulated amortization and impairment 1 Jan 2022 -2,743 -1,308
-4,051
Accumulated amortization on disposals
Transfers between items
Amortization for the financial year -242 -125
-367
Accumulated amortization and impairment 31 Dec 2022 -2,986 -1,433
-4,419
Carrying amount 1 Jan 2022 502 469 392 1,364
Carrying amount 31 Dec 2022
397
373
2,530
3,300
Verkkokauppa.com · Financial Statements (FAS)
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2023
8.11 Property, plant and equipment
EUR thousand Land
Machinery and
equipment
Other tangible
assets
Advance payments
and work in progress Total
Cost 1 Jan 2023 2 13,050 3,050 812 16,913
Increases - 279 4 52 335
Disposals - -52 -52
Transfers between items - 92 -92
Cost 31 Dec 2023 2 13,421 3,054 720 17,196
Accumulated depreciation 1 Jan 2023 - -7,5 58 -2,617 -10,176
Accumulated depreciation on disposals -
Transfers between items -
Depreciation for the financial year - -1,098 -123 -1,221
Accumulated depreciation 31 Dec 2023 - -8,656 -2,740 -11,396
Carrying amount 1 Jan 2023 2 5,491 433 812 6,738
Carrying amount 31 Dec 2023 2 4,764 314 720 5,800
EUR thousand Land
Machinery and
equipment
Other tangible
assets
Advance payments
and work in progress Total
Cost 1 Jan 2022 2 8,717 3,012 2,412 14,142
Increases - 327 28 2,417 2,771
Disposals -
Transfers between items - 4,006 11 -4,017
Cost 31 Dec 2022 2 13,050 3,050 812 16,913
Accumulated depreciation 1 Jan 2022 - -6,463 -2,465 -8,928
Accumulated depreciation on disposals -
Transfers between items -
Depreciation for the financial year - -1,095 -152 -1,247
Accumulated depreciation 31 Dec 2022 - -7, 558 -2,617 -10,176
Carrying amount 1 Jan 2022 2 2,254 546 2,412 5,214
Carrying amount 31 Dec 2022 2 5,491 433 812 6,738
8.12 Investments
EUR thousand 31 Dec 2023 31 Dec 2022
Holdings in group companies 6,138 -
Aqcuisition costs 1.1. 650 6,138
Increases -539
Carrying amount 31 Dec 6,249
6,138
Ownership of shares%
Country
Arc Distribution Oy
Finland
100% 100%
e-ville.com Distribution Oy
Finland
100% 100%
Digi Electronics Ltd
Hong
Kong
100% 100%
Digital Trading (Shenzhen) Co. Ltd
China
100% 100%
8.13 Trade receivables and other receivables
EUR thousand 2023 2022
Non-current
Trade receivables 7,824 5,615
Other non-current receivables 372 372
Non-current receivables, total 8,195
5,987
Current
Trade receivables 36,978 28,709
Other accrued income 7,891 8,984
Income tax receivables 0 892
Other receivables 2,74 3 2,629
Current receivables, total 47,612 41,213
Non-current and current receivables, total 55,808 47, 20 0
Verkkokauppa.com · Financial Statements (FAS)
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2023
8.14 Receivables from companies of the same
group
EUR thousand 2023 2022
Group loan receivables, long-term 1,830 1,830
Group accounts receivable 1,017 205
Group accruals 5
5
Group interest receivables 51 22
Receivables from companies of the same
group total
2,902 2,062
8.15 Other short-term receivables and accruals
EUR thousand 2023 2022
Prepayments 2,74 3 2,629
Support for purchases 5,924 6,481
Other transfer receivables 1,967 2,504
Income tax receivables 0 892
Other short-term receivables and accruals 10,634 12,505
8.16 Inventory
EUR thousand 2023 2022
Goods 62,818 74,08 4
Total 62,818 74,084
8.17 Cash and cash equivalents
EUR thousand 2023 2022
Cash in hand and at banks 30,729 20,667
Total 30,729 20,667
8.18 Equity
EUR thousand 2023 2022
Equity 1.1.
100 100
Equity 31.12 100 100
Invested unrestricted equity fund at
the beginning of the period
28,069 25,938
Invested unrestricted equity fund additions 127 2,131
Invested unrestricted equity fund at
the end of the period
28,196 28,069
Retained Earnings 3,495 12,692
Dividends, annual general meeting 0 -11,068
Profit/ Loss of the accounting period
1,933 1,669
Equity total
33,724 31,462
Restricted equity at the end of the period 100 100
Unrestricted equity at the end of the period 33,624 31,362
Unrestricted and restricted equity total 33,724 31,462
8.19 Calculation of distributable funds
EUR thousand 2023 2022
Invested unrestricted equity fund 28,196 28,069
Result from Previous years 3,495 12,692
- Dividends 0 -11,068
- Capitalization of development costs -2,025 -2,589
Profit/Loss of the accounting period 1,933 1,669
Distributable funds total 31,599 28,773
8.20 Financial statement transfers
EUR thousand 2023 2022
Financial statement transfers1 Jan 400 0
Increases in financial statement transfers 793 400
Financial statement transfers 31 Dec 1,193 400
8.21 Other current liabilities and accrued liabilities
EUR thousand 2023 2022
Accrued personnel expenses
6,694 7,461
Other accrued liabilities 10,722 13,783
Withholding tax liability 708 821
VAT liability
9,588 8,556
Other current liabilities and accrued liabilities
27,713 30, 621
8.22 Liabilities from companies of the same group
EUR thousand 2023 2022
Group accounts payable 38 2
Group accrued liabilities 400 100
Liabilities from companies of the same group 438 102
8.23 Long-term debt capital
EUR thousand 2023 2022
Loans financial loans 18,750 22,500
Long-term debt capital 18,750 22,500
8.24 Provisions
EUR thousand 2023 2022
Provisions 1 Jan 745 896
Increases in provisions 263 -78
Decreases in provisions 0 -72
Provisions 31 Dec 1,008 745
Verkkokauppa.com · Financial Statements (FAS)
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2023
8.25 Guarantees and commitments
EUR thousand 2023 2022
Collateral given for own commitments
Mortgages 2 7,001 27,001
Guarantees
2,027 1,036
Other commitments and contingent liabilities
Credit limit
25,000
25,000
Leasing liabilities 22 15
Rent liabilities 18,101 18,749
Guarantees and commitments
72,151
71,801
Verkkokauppa.com · Financial Statements (FAS)
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2023
SIGNATURES FOR THE FINANCIAL STATEMENTS
AND THE BOARD OF DIRECTORS’ REPORT
Arja Talma
Chair of the Board
Johan Ryding
Board Member
Kai Seikku
Board Member
Robin Bade
Board Member
Panu Porkka
CEO
Samuli Seppälä
Board Member
Henrik Pankakoski
Board Member
Kati Riikonen
Board Member
Verkkokauppa.com · Signatures for the financial statements and the Board of Directors’ report
63
2023
AUDITOR’S REPORT (Translation of the Finnish Original)
To the Annual General Meeting of Verkkokauppa.com Oyj
REPORT ON THE AUDIT OF
THE FINANCIAL STATEMENTS
Opinion
In our opinion
• the consolidated financial statements give a true and fair view of the
group’s financial position, financial performance and cash flows in
accordance with IFRS Accounting Standards as adopted by the EU
• he financial statements give a true and fair view of the parent
company’s financial performance and financial position in
accordance with the laws and regulations governing the preparation
of financial statements in Finland and comply with statutory
requirements.
Our opinion is consistent with the additional report to the Audit Committee..
What we have audited
We have audited the financial statements of Verkkokauppa.com Oyj
(business identity code 1456344-5) for the year ended 31 December 2023.
The financial statements comprise:
• the consolidated balance sheet, income statement, statement of
comprehensive income, statement of changes in equity, statement
of cash flows and notes, which include material accounting policy
information and other explanatory information
• the parent company’s balance sheet, income statement, cash flow
statement and notes.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the parent company and of the group companies
in accordance with the ethical requirements that are applicable in Finland
and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that
we have provided to the parent company and group companies are in
accordance with the applicable law and regulations in Finland and we
have not provided non-audit services that are prohibited under Article
5(1) of Regulation (EU) No 537/2014. The non-audit services that we have
provided are disclosed in note 7.8 to the Financial Statements.
Our Audit Approach
Overview
• Overall group materiality:
€ 5 020 000, which represents
1% of group´s revenue
• Audit scope: The audit scope
includes Verkkokauppa.com Oyj
• Timing of revenue recognition
• Valuation of inventories
As part of designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In particular,
we considered where management made subjective judgements; for
example, in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently
uncertain.
Materiality
The scope of our audit was influenced by our application of materiality. An
audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement. Misstatements may
arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain
quantitative thresholds for materiality, including the overall group
materiality for the consolidated financial statements as set out in the
table below. These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of misstatements on the
financial statements as a whole.
Overall group materiality
€ 5 020 000 (previous year € 5 400 000)
How we determined it
1% of the group´s revenue
Rationale for
the materiality
benchmark applied
We chose revenue as the benchmark because,
in our view, it is the benchmark against which the
performance of the company is most commonly
measured by users. We chose 1 % which is within
the range of acceptable quantitative materiality
thresholds in auditing standards.
Materiality
Audit Scope
Key Audit
Matters
Verkkokauppa.com · Tilintarkastuskertomus
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2023
How we tailored our group audit scope
We tailored the scope of our audit, taking into account the structure of the
group, the accounting processes and controls, and the industry in which
the group operates.
Our audit scope includes Verkkokauppa.com Oyj. Verkkokauppa.com
Oyj has four subsidiaries which are not material to consolidated financial
statements and we have performed analytical procedures on their
balances.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
As in all of our audits, we also addressed the risk of management
override of internal controls, including among other matters consideration
of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Key audit matter in the audit How our audit addressed the key audit matter
Timing of revenue recognition
Refer to note 7.2 of the consolidated financial statements and to note 8.1 and
8.2 of the parent company´ s financial statements
The Group´s revenue, € 503 million, and Parent company´ s revenue, € 501
million, consist of sale of goods and services.
The transaction price of sale of goods consists of the list price of the
goods, the variable consideration related to the right to return, as well as the
transportation fee. The sale of goods is recognized when the customer assumes
control of the goods. When a customer is paying using Apuraha financing, the
Company recognizes the revenue from customer financing on a monthly basis
according to the actuals.
The transaction price for service contracts with customers consists mainly
of fixed prices. The Company recognizes revenue from service contracts with
customers when the service has been rendered or over time.
Verkkokauppa.com´s revenue comprise a large amount of transactions and
revenue is a significant item in the consolidated financial statements and parent
company´ s financial statements. Management exercises judgement e.g. when
defining the variable consideration related to sale of goods. Given these factors,
we have considered timing of revenue recognition to be a key audit matter.
Our audit procedures included test of controls related to timing of revenue
recognition and test of details procedures.
Our test of details included e.g. the following procedures:
• We gained an understanding of the nature of the revenue streams and
different contractual terms used.
• We assessed the Company’s accounting policies over revenue recognition.
• We compared the accounting treatment of a sample of sales transactions
and variable consideration to the terms of underlying contracts.
• We tested a sample of sales transactions against incoming cash.
• We tested a sample of sales invoices recorded in December 2023 and
January 2024 to evaluate that revenue had been recognised in the right
period.
• We compared selected accounts receivable balances against payments
received after the period end.
Valuation of inventories
Refer to note 7.18 of the consolidated financial statements and to note 8.1 and
8.16 of the parent company´ s financial statements
Inventories form a significant part of the Group’s assets, amounting to € 63
million, and Parent company´ s assets, amounting to € 63 million, as of 31
December 2023.
• Inventories are measured at the lower of cost and net realizable value. The
cost of inventory is assigned by using the FIFO (first-in, first-out) method.
The cost contains direct costs of purchase less rebates.
• The goods inventory turnover and possible reduction in the net realizable
value below cost is assessed regularly and a write-down of inventories is
recognized when necessary. In addition, the Company recognizes a write-
down of aged products, based on days in stock.
• Inventories are a significant item in the consolidated financial statements
and parent company´ s financial statements. Management exercises
judgement and applies assumptions when estimating the need for
an obsolescence provision. Given these factors, we have considered
valuation of inventories to be a key audit matter.
Our audit procedures included test of controls related to timing of revenue
recognition and test of details procedures.
Our test of details included e.g. the following procedures:
• We assessed the adequacy of the obsolescence provision and checked
adherence to the Company’s accounting policy.
• We compared, on a sample basis, the value of inventory items against
purchase invoices and sales invoices to ensure that inventory items are
measured at the lower of cost and net realizable value.
• For a sample of warehouses, we attended the physical stock-take counting
or reconciled third party confirmations with the accounting records.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial
statements or the parent company financial statements.
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Responsibilities of the Board of Directors and
the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the
preparation of consolidated financial statements that give a true and fair
view in accordance with IFRS Accounting Standards as adopted by the
EU, and of financial statements that give a true and fair view in accordance
with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements. The Board
of Directors and the Managing Director are also responsible for such
internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Board of Directors and the
Managing Director are responsible for assessing the parent company’s
and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going
concern basis of accounting. The financial statements are prepared
using the going concern basis of accounting unless there is an intention
to liquidate the parent company or the group or to cease operations, or
there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit
of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with good auditing
practice will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the parent company’s or the group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast
significant doubt on the parent company’s or the group’s ability
to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause
the parent company or the group to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events so that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to
express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit
of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Verkkokauppa.com · Tilintarkastuskertomus
66
2023
OTHER REPORTING REQUIREMENTS
Appointment
We were first appointed as auditors by the annual general meeting on 15
March 2016. Our appointment represents a total period of uninterrupted
engagement of 8 years.
Other Information
The Board of Directors and the Managing Director are responsible for
the other information. The other information comprises the report of the
Board of Directors.
Our opinion on the financial statements does not cover the other
information.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. Our responsibility also includes considering
whether the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion
• the information in the report of the Board of Directors is consistent
with the information in the financial statements
• the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
If, based on the work we have performed, we conclude that there is a
material misstatement of the report of the Board of Directors, we are
required to report that fact. We have nothing to report in this regard.
Helsinki
PricewaterhouseCoopers Oy
Authorised Public Accountants
Mikko Nieminen
Authorised Public Accountant (KHT)
Verkkokauppa.com · Tilintarkastuskertomus
67
2023
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.
linkedin.com/company/verkkokauppa.com
twitter.com/verkkokauppacom
facebook.com/verkkokauppacom/ instagram.com/verkkokauppacom/