Equity research CDON Q4 2024: First impression

Today, CDON AB published its interim report for Q4 2024. Below are our first impressions of the outcome, including deviations from our estimates.

GMV and net sales declined at a lower rate than we had initially feared. Despite tough competition in the quarter we see budding signs that CDON efforts to increase supply and improve customer experience is starting to bear fruit. However, marketing costs and other operating costs exceeded our expectations, weighing on EBITDA. CDON says it believes its efforts will drive significant benefits in 2025 and beyond. However, there is still work to do on the integration in 2025.

• In Q4 2024, CDON AB reported a Gross Merchandise Value (GMV) of SEK 558m, corresponding to an 11% decline. Our updated forecast for the quarter was SEK 548m. The decline was due to fewer site visits (-7%) and a lower average shopping basket mitigated by a somewhat better conversion rate.
• Net sales also declined for the group, driven by the CDON segment (-21%), while the outcome in the Fyndiq segment was higher than our estimates at +5%.
• EBITDA declined to SEK 10.5m (17) and was weaker than we had expected. This is mainly due to higher marketing costs and OPEX. We were too optimistic regarding cost synergies in the short term. CDON states that underlying costs are trending towards the goal of a SEK 40m lower run rate compared to the cost level at the time of the merger.
• EBIT was impacted by a non-cash impairment charge of SEK 17.9m related to the write-down of previous CDON assets.
• Cash flow from operations was a bright spot and improved to SEK 80m (59).

We intend to provide a research update of CDON AB shortly. Read the initiation of coverage report here.

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