Lauritz.com Group A/S – Interim report January – March 2023

 

No. 4/2023

Copenhagen, 31 May 2023

 

In the first quarter of 2023 the business of Lauritz.com group delivered an improvement in EBITDA of 44 percent to DKK -0.6m compared to last year (-1.0m).

The result is impacted positively by cost savings as well as higher commission and fee rates. However, the lower sales – that are due to reluctant buying behaviour among consumers - almost offsets these improvements.

Total sales

Total sales in Q1 amounted to DKK 89.2m (111.7), a decrease of 20.1 percent compared to last year.

The decrease in sales is caused by the general slowdown that we register in the market as a consequence of the inflation and increase in interest rates. As many other companies selling consumer durables, we see how the consumption crisis in Denmark and internationally influence the consumer behavior within the home and interior segment (consumer trust regarding consumer durables was in March 2023 at -39.6% according to Statistics Denmark). The consumers are more reluctant, reducing their spendings. After a promising start of 2023, we have experienced a sudden and significant drop in sales. This development seems to follow the general trend and level in the market for comparable businesses within home and interior items.

Historically, Lauritz has always done well during times of financial crisis in the society, with a quick rebound following an initial drop in Sales. However, the current period with reduced consumer spending seems to continue longer than initially anticipated.

In general, the consumption crisis has influenced our buying customers’ behavior more than our sellers’. Many of our selling costumers are still keen on selling, since auction sales contribute to the household economy for private sellers, and since many professionals are struggling to clear the stock in their own businesses (retail shops, design producer etc.). Thus, we maintain a reasonable number of items for sale on the site (10.700 active auctions on May 30). Parallelly, the online traffic from potential buyers is performing at a satisfactory level. The main challenge is that the conversion rate is lower than normal; meaning that the relatively high traffic generates lower total sales as consumers are reluctant in their spendings.