Online reseller giant Dustin has blamed "challenging market conditions" for its profits slump in its fiscal Q1 ending 30 November 2019.
For the three-month period, net sales spiked by 12.2 per cent to SEK 3.51bn (€333.44m), with organic growth accounting for 6.1 per cent. Adjusted EBITA came to SEK 156m, down 3.7 per cent year on year. EBIT fell by an even steeper 20.8 per cent, with Adjusted EBITA margin falling from 5.2 per cent to 4.5 per cent.
Dustin says the decline was due to a changed sales mix within its business, with a higher share of sales going through its low-profit public sector business. It added that long-term investments to transforming the business and grow margins through investing in services have had a "short-term impact on the cost base".
The Sweden-based firm's larger customer accounts grew revenues by 18.7 per cent, while its SMB segment swelled by 10 per cent.
"We performed well during the first quarter of the financial year and we have a positive view of our future, despite a somewhat cautious market in the short-term perspective," said CEO Thomas Ekman in a statement.
Highlights during the quarter include launching its online platform under the Dustin brand in the Netherlands at the end of October, following its two Dutch acquisitions for Vincere Groep in 2018 and NoRisk IT last year.
Dustin also opened the doors on a new regional warehouse - in Veenendaal, the Netherlands - during the quarter as it continues to push growth in the Dutch market.
In its fiscal year ending 31 August, Dustin's revenues flew past the €1bn revenue mark as sales ballooned by 21.7 per cent.
At the time it claimed it would look to balance out its large corporate and public sector business (LCP) with its SMB business in order to grow margins.
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