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Bokusgruppen’s interim report for January–September 2024

30 Oct, 2024, 10:36

 Regulatory information

Strong increase in sales and gross profit in the third quarter

Q3 2024

  • Net sales increased 8.8% to MSEK 452.8 (416.1)
  • The gross margin was 42.2% (42.6)
  • EBITA was MSEK 17.5 (23.5)
  • The Group’s net profit amounted to MSEK 0.2 (5.7)
  • Earnings per share before dilution amounted to SEK 0.01 (0.35)

January-September 2024

  • Net sales increased 5.2% to MSEK 1,267.4 (1,205.1)
  • The gross margin increased to 41.6% (41.1)
  • EBITA increased to MSEK 4.8 (4.0)
  • The Group’s net loss amounted to MSEK -34.8 (-34.6)
  • Earnings per share before dilution amounted to SEK -2.16 (-2.14)

Significant events in the quarter

  • Ownership transfer of Bok & Co AB, which operated six franchise stores in the Gothenburg area.
  • Akademibokhandeln nominated for Market Awards in the “Lek och nöje” (Play and Entertainment) category and announced as the winner after the end of the quarter.
  • Initiatives to promote reading in the form of the Bokus Scholarship (Bokusstipendiet), the Sharpen Your Pencil writing initiative (Vässa Pennan) and the report “Children’s Reading Habits at Home” (Barns läsvanor i hemmet).
  • The Group’s line of private label products expanded through yet another design partnership – this year, Elsa Beskow.

Comments from the CEO

Sales in the third quarter increased 8.8% and gross profit improved by MSEK 7.6. Earnings for the quarter declined as the result of increased costs for the new online shopping logistics as well as non-recurring costs. Both Akademibokhandeln and Bokus noted a highly positive increase in sales, with the greatest growth in Akademibokhandeln.

The third quarter marked a period of sharp sales growth of 8.8% for Bokusgruppen as a whole. Just over half of that came from organic growth. The remainder came from the recently finalised acquisitions of two franchisees with a total of seven stores.

As always, sales in the third quarter were dominated by the all-important start of the academic year. For Akademibokhandeln, the start of the school year went very well, and this positive trend continued with increased sales both in stores and online. In total, Akademibokhandeln showed growth of a full 11.5%. The fact that customers are choosing to shop both in stores and online is positive: the two channels strengthen each other. It is particularly gratifying that Bokus continued to increase its sales for the fourth consecutive quarter, showing growth of 4.1% compared with the preceding year. The positive trend of increasing numbers of active customers for both Akademibokhandeln and Bokus is continuing, which is proof that our investments in a better customer experience are having an effect.

We have now completed the integration of the latest franchise acquisition, Bok & Co. This acquisition added six new stores to Akademibokhandeln’s centrally located store network, which now comprises 77 stores. There are 18 franchise stores remaining. This acquisition had a positive impact on both sales and earnings for the quarter.

Higher-quality online shopping logistics boosts customer satisfaction

Our new solution for online shopping logistics is in place, delivering a clear improvement in quality for our customers. This is reflected primarily in a substantial increase in customer satisfaction for Bokus, with the company’s Net Promoter Score (NPS) increasing to 63 (59) in the third quarter. In addition, we now have a lower share of orders leading to customer service cases, which is having a positive effect on our costs.

   But this higher quality has come at a greater cost. Costs for logistics management increased during the quarter, which had a negative impact on our gross margins. These cost increases are in part an effect of the new procedures not being fully fine-tuned. The cost level will fall over time, but we can confirm that the improvement to quality – meaning faster deliveries and better delivery precision – will be achieved at a somewhat higher cost than previously. This is a deliberate choice we made to strengthen our customer satisfaction and competitiveness, thereby capturing market share and boosting sales. We are working in parallel on several measures to strengthen our margins in order to offset these cost increases. Excluding logistics costs, our product margins continued to improve.

Higher gross profit not sufficient to offset increased cost levels

The increase in gross profit was not sufficient to offset our higher cost levels, and EBITA decreased MSEK 6 to MSEK 17.5. However, accumulated EBITA over a nine-month period was somewhat higher than in the year-earlier period. The quarter was charged with acquisition costs, higher IT costs linked to system changes and a shift in marketing activities driven by a major initiative in conjunction with the start of the academic year.

Private label products expanded with a new design partnership

For several years, we have launched a design partnership in the third quarter with products including notebooks, postcards, jigsaw puzzles and more. This year, the work of Elsa Beskow – who would have turned 150 this year – adorns these products, and we are already seeing that the launch of this product line has been a success. The collection is being sold at Akademibokhandeln and is one of our private label initiatives.

Sustainability initiatives with a focus on the joy of reading

Our sustainability initiatives in the third quarter focused on activities to promote the joy of reading and writing. For the third consecutive year, we awarded the Bokus Scholarship to a student who had shown great commitment to promoting reading. Akademibokhandeln launched the Sharpen Your Pencil initiative to inspire children and young people to discover the joy of writing and sent out educational material on the Läsborgarmärket theme to schools around the country.

We also presented the report “Children’s Reading Habits at Home” – a survey of Akademibokhandeln customers intended to create awareness and knowledge of the crucial issue of children’s reading.

Outlook

We are now looking ahead to the most important quarter in terms of earnings. We have high hopes that we will perform well, since we have positive trends when it comes to number of customers, customer satisfaction and sales despite the continued general cautiousness among Swedish consumers. We also know from experience that board games and jigsaw puzzles are the perfect Christmas gift regardless of the business climate. We are also highly confident that our investments in better online shopping deliveries will provide us with the conditions for robust Christmas sales online by making it possible to purchase Christmas gifts closer to the holidays and attracting even more active, satisfied customers.

Maria Edsman, CEO

Further information

For more information, please contact Maria Edsman, CEO Bokusgruppen on +46 76 888 26 10 or Susanna Gyllenbåga, Press contact on +46 709 710 110.

The company is listed on Nasdaq First North Premier Growth Market. The Company's Certified Adviser is Carnegie Investment Bank AB (publ).

Bokusgruppen AB (publ)

Corp.reg.no: 559025-8637

Box 2100, 103 13 Stockholm, Sweden

Lindhagensgatan 126, plan 5, 112 51 Stockholm, Sweden

Tel: +46 10 744 10 00

Email: info@bokusgruppen.com

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