Bokusgruppen Year-end Report Q4 and FY 2023

Comments from the CEO

Confirmation of Bokusgruppen’s strength – EBITA increased 48% for the quarter

With an improved fourth quarter, Bokusgruppen has now closed the books on a very positive 2023. With a clear cost focus, smart investments, product range development and forward-looking investments, gross profit increased 7.7% and EBITA increased 21.7% for the full year, meaning that the financial target for EBITA was achieved.

It is very gratifying to report that the fourth quarter of 2023 was the strongest quarter ever for Bokusgruppen, with sales growth of 7.5% and EBITA that increased a full MSEK 35.8, or 47.8%, over the year-earlier quarter. With this strong fourth quarter, we have now closed the books on a year in which sales increased 2.7%, the gross margin increased 2.0 percentage points and EBITA increased 21.7%. We also reached our financial target of EBITA of 6.0% and improved our adjusted operating cash flow by MSEK 102.5.

During the year, Akademibokhandeln’s stores continued the positive trend we had seen earlier in the year and sales increased 5.7%. At the same time, Akademibokhandeln Online accelerated its positive trend and sales increased a full 24.8%. On the whole, this is a fantastic conclusion to the year for Akademibokhandeln, which is a sign of the strength of our omnichannel offering. Even more satisfying is the turnaround for Bokus Online during the fourth quarter, following a decline in sales after the pandemic, with sales growth of 8.9%.

Our positive performance in online sales in the fourth quarter is particularly impressive since online shopping as a whole, according to the Swedish Trade Federation’s e-commerce indicator, declined 11% in the same period.

Focus on profitability

At the beginning of 2023, we were concerned about how our sales and profitability would be impacted by reduced consumer purchasing power and increased costs due to inflation. The early implementation of measures prepared us for handling a turbulent environment, and our focus during the year was on increasing our gross margins and on cost-saving measures to offset inflation-based cost increases like store rents and personnel expenses.

Looking back on 2023, we can say that these programmes, and hard work by all of our dedicated employees, had excellent results. At the same time, our loyal customers continued to prioritise books, board games and other items from our range of products. The number of active customers and their willingness to recommend us (as measured by NPS) increased for the full year.

Investments and initiatives for the future

Our forward-looking investments continued in 2023, but the prevailing uncertainty during the year meant that we had to make some difficult decisions in terms of which items to prioritise. We continued our digital transformation and focused on preparing and researching for the replacement of our online shopping system. In 2024, we will enter the next phase, with investments largely dedicated to development and implementation.

We also focused on optimising our online shopping logistics during the year. We improved our lead times and delivery reliability in online shopping, and these improvements were reflected directly in a higher customer satisfaction score (NPS) for Bokus. Our focus on developing our logistics will continue in 2024 in order to make additional improvements for a more competitive shipping offering.

At Bokus, we launched part of our range of other products, and a select range of board games, jigsaw puzzles and calendars were available for sale just in time for the Christmas shopping period. Since the launch went well, we will further expand the range.

As for stores, during the quarter we decided to establish a new store in Tyresö Centrum outside Stockholm. The store will open in the first quarter of 2024. The profitability we generate from our stores helps us establish other stores, if the location and rental conditions are appealing. Nearly all of our stores currently generate positive contributions to operations and Akademibokhandeln Stores are our most profitable segment. Our ability to expand the store network is positive for book retail overall.

Private label products create a unique product range

Akademibokhandeln’s private label products continued to perform well during the year and the share of private label products within the range of other products increased from 17.3% to 18.2% during the year. This was the result of a deliberate effort to create a unique range that appeals to our customers. Our private label products give us greater control over design, development and production, including environmental and climate impact. They also provide higher margins.

During the year, we launched a design partnership with Carl Larsson-gården, with designs from Carl and Karin Larsson’s artwork. They appear on products like notebooks, jigsaw puzzles and much more. This is one of our most popular and successful partnerships to date. We also launched new jigsaw puzzles, art supplies and board games. Board games were named the 2023 Christmas Gift of the Year by HUI Research, which boosted sales of board games and toys by over 20% in the fourth quarter.

More clarity in following up sustainability targets

We put a lot of work into making the company more sustainable and have set ambitious targets to take us there. Our overall sustainability target is to lower CO₂e emissions by 25% and achieve 90% of all sub-targets by 2026. In 2023, we achieved 25% of all of our sub-targets, and at the time of writing we are preparing our climate report for the year. During the year, we strove to clarify our sub-targets and their follow-up. We also started to prepare for the new reporting requirements in the EU Corporate Sustainability Reporting Directive (CSRD). As usual, we carried out several initiatives to promote reading. We also began an initiative to promote writing and continued our efforts to lower our carbon emissions and to reduce waste. Read more about this in our Annual and Sustainability Report 2023, which will be released later in the spring.

Outlook

In 2024, we will be taking a major, important step forward by upgrading our online shopping platform. This will allow us to create an even more attractive customer experience online and support a more efficient organisation.

As before, we have demonstrated good resilience in difficult times. The recession continued into the new year, but we see the light at the end of the tunnel and, hopefully, a turnaround later in the year.

I would like to extend my sincere thanks to all of our committed and skilled employees who work hard for our customers and to achieve our vision: “Everyone should experience the joy of reading, every day.” With an incredibly strong 2023 behind us, we are starting the new year with several exciting initiatives and the confidence that we are a company to be reckoned with.

Maria Edsman, CEO