CDON Ab

Hello, everybody, and welcome to Citioen Group's earnings call for the first quarter of 2024. This is the second time we are recording this live from our office in Stockholm, and this is also the second time I have our CFO, Carl Andersson, next to me.

Great to be back, and I'll be back shortly to dive into the financial performance.

Yes, to summarize our quarter, This was really a tough quarter for our company. We have been up with three different challenges who have put a lot of pressure on the organization and on the business performance. The first challenge have been changes that Google have done to their algorithm affecting our organic traffic to the site. The second part, has been the closing down of our Malmö office, which we announced mid February. And lastly, we have our long term migration of our platform, which of course consumed a lot of focus and resources internally. These three challenges combined made us do a lower sales than we anticipated. All in all, made a EBITDA of minus 2.2 million. And this is the first time in a year where we don't have a positive EBITDA. We're not happy with this and we're really looking forward to change this throughout the year. And this does not change our view on the business. We still firmly believe that we have a really good potential in this company in the long and mid-term. Looking into a little bit more details about these Google updates, I have been in the e-commerce business for roughly 20 years, and I've seen a couple of changes that Google have done. And what's also interesting to know is that the Nordic region is a little bit specific when it comes to Google. Pretty much all the customer journeys start on Google, and this is not what's applicable on all other countries, but this is very specific for the Nordic region. So when Google does changes like this, a lot of businesses online gets affected. This time, the rumor says that Google have made these changes due to the enormous amount of AI-generated content that are flooding the internet and Google. As you can see here in the graph, aggregators such as us as a marketplace or price comparison sites such as Prisjakt and Pricerunner have really had a negative effect from these changes from last year. This is also confirmed by the CEO of Prisjakt, who announced in February that they are doing layoffs. And a quotation down to the right, as he says, is that many of the price comparison sites in Europe has been affected by this. Aggregating services have been impacted in terms of visibility in the search results. Brands and retailers were given priority. And this very much aligns with our view on this as well. Also, Amazon have been negatively affected. Here you see their global sites that they have. And we only have one green spot, which is actually Sweden. We are still looking into what the reason is behind this, and we haven't really come into a clear conclusion. However, we believe that it has something to do with their recency of their launch of Amazon.se. But what we though can see is that Amazon is globally affected by these Google changes. If we're looking and take the graphs up until two days ago, we can see a little bit maybe that we are some signals that we are at the low ebb. The last couple of days and weeks, we see some positive signs, especially on the Findic site. We have throughout the year implemented a lot of technical fixes on both Findic, but also some on CDON. We are more ahead when it comes to Findic due to the velocity that we can implement changes on Findic. And we see some positive signs now, but it's a little bit too early to say that we have a turning point. The status of the closing down of Malmö office, we announced it mid February. The handover is pretty much done now, and we are now very focused on recruiting the 25 new people to the organization from Stockholm. And we're really happy to see that we have a good talent pool applying for all these roles now. In addition to that, we can also see that our customer service work with outsourcing it are progressing very, very good. On CDON, we are already now at the same customer service satisfaction numbers as when we were in-house. When it comes to Fyndik, we even have improve that by 5%. So on that matter, we are well ahead of plan. When it comes to costs derived from closing down the Malmö office, we cannot really contribute any cost to the first quarter, but it will instead come in the second quarter. The big long-term migration project that we have been talking about for almost about a year now is the migration of the CDON into the Findic platform. This is according to plan, and this is very important for us, and we are very confident that we will reach our deadline in September. Here you can see we reached minus 2.2 million. The first quarter is a seasonal weaker quarter, but we were hoping for a better result than this, and we're not happy with that. With this said, we still believe that our main strategy is still intact. We are focusing on massively increasing the supply and greatly improve the customer satisfaction. When it comes to the supply growth, we have it a little bit on a halt. And this we do every now and then when we do big pushes as we did in Q4. We need to take on some bottlenecks such as onboarding and increasing the sales for the onboarded merchants, but also make sure to purge bad merchants and bad supply. We are around the corner. We are able to push another increase of supply into both CDON and Findic. When it comes to the overall customer experience, the second strategy, we are doing great progress. To the left, you have the customer review score, which we send out a couple of days after you receive the package. We have increased that from 3.8 to 4.3 in only a year for Cedion. And this is really, really positive news. On top of that, we can see that we have increased the product reviews also by 11%. And this is due to the purging of bad merchants and bad products. And this in my book is really important because when it all comes down, It's about happy customers that then come back and do another purchase. And we are on a good journey when it comes to this area. With that said, we will now jump into the financial performance and I will hand over to Carl.