During the second quarter, CDON Group's total GMV increased by 13 percent compared to the same period of the previous year. Despite the sales increase, the company reports a negative operating profit before depreciation (EBITDA) of -7.3 million Swedish krona, compared to 0.4 million Swedish krona during the previous year.
A strategic step for the company during the period has been the discontinuation of the CDON Retail business area, which refers to the company's own sales through warehousing and drop shipment (1P). The sale of remaining inventory was carried out at discounted prices and contributed a negative gross profit of -2.3 million Swedish krona for the quarter. Through this step, the company ceases to report 1P as a separate segment and transitions to acting solely as a marketplace for third-party merchants.
CEO Fredrik Norberg comments on the change and the result in an email to the editors:
We are delivering strong volume growth where our total transaction value (GMV) increases by 13 percent to 521 million Swedish krona. At the same time, we have completed the discontinuation of our old own warehouse (1P) during the quarter. CDON Group is now a completely streamlined, scalable platform model (3P) for both segments CDON and Fyndiq.
Furthermore, the decline in profit is explained by increased marketing costs and strategic investments. The company's interim report shows that the result is affected by continued structural challenges in marketing effectiveness and a strategic focus on expanding the range within the electronics category, which generally has lower margins.
"Profitable Company in 2027"
Norberg emphasizes in his statement to the editors that the costs are being taken to build a stable foundation for the future:
Our reported EBITDA result of -7.3 million Swedish krona (compared to +0.4 million Swedish krona last year) fully reflects planned, front-loaded investments in, among other things, our new advertising platform and brand initiative, as well as a couple of clear one-time effects from last year. Simply put: we are taking the costs now to build a significantly stronger and more profitable company for 2027.
The message is consistent throughout the quarterly report, where it is emphasized that the company is currently investing capital in the marketplace before the financial return is realized. The CEO concludes his comments in the report by stating that the company is on its way to a more financially sustainable position.