Elon AB Q1 2025 slides: B2C growth drives improved performance despite seasonal headwinds

Swedish home appliance and electronics retailer Elon AB (STO:ELON) presented its first quarter 2025 results on May 5, showing improved performance across key metrics despite typical seasonal challenges. The company’s shares rose 2% to 25 SEK following the presentation.

Quarterly Performance Highlights

Elon AB reported net sales of 1,133 MSEK for Q1 2025, representing an increase of 37 MSEK compared to the same period last year. The company highlighted strong growth in its business-to-consumer (B2C) segment, which grew 3.3% year-over-year, though this growth was partially offset by downsizing in the Solutions segment.

As shown in the following chart of quarterly net sales:

The company’s business mix continues to shift toward direct consumer sales, with B2C now representing 77% of total revenue, while B2B accounts for 21% and Logistics & Services comprises the remaining 2%. This shift reflects Elon’s strategic focus on strengthening its retail presence.

The following breakdown illustrates the current business segment distribution:

Detailed Financial Analysis

Gross margin showed significant improvement, reaching 17.6% in Q1 2025, an increase of 5.0 percentage points compared to Q1 2024. On a currency-adjusted basis, the improvement was 1.8 percentage points. Management attributed this improvement to a more favorable product and channel mix.

The following chart highlights the gross margin improvement:

Operating profit, while still negative at -13 MSEK for the quarter, improved substantially by 27 MSEK compared to Q1 2024. Similarly, operating cash flow, though negative at -134 MSEK, showed a 97 MSEK improvement year-over-year.

The company’s presentation emphasized the seasonal nature of its business, with Q1 typically representing a challenging period. As illustrated in the historical quarterly operating profit chart below, Elon tends to see stronger results in the second half of the year:

The long-term operating profit trend on a last-twelve-months (LTM) basis shows gradual improvement, reaching 37 MSEK by Q1 2025:

Cash flow management has also improved, with operating cash flow showing a positive trend despite seasonal fluctuations:

Strategic Initiatives

Elon’s presentation highlighted several strategic achievements, including retail consolidation, improved market share in consumer electronics categories, and a new partnership established in the Baltic States. The company continues to focus on building scale while improving its cost structure.

The Nordic market remains central to Elon’s operations, with Denmark accounting for 79% of net sales, followed by Norway (11%), Sweden (6%), Finland (3%), and Iceland (2%). This geographic distribution reflects the company’s established presence across the Nordic region.

Forward-Looking Statements

Looking ahead, Elon AB emphasized three key strategic pillars: maintaining a stable market footprint, leveraging proven scalability, and continuing to improve cost structure and cash flow. Management projects full-year 2025 net sales of 4,765 MSEK with an operating margin of 0.8%.

The company noted that B2B sales are beginning to pick up while the Solutions segment remains under restructuring. Working capital management continues to be a focus area, with current levels at 459 MSEK in Q1 2025, impacted by the company’s expansion of owned stores and changes in supplier mix.

With improved financial metrics across sales, margins, and cash flow, Elon appears to be making progress on its strategic initiatives despite the traditionally challenging first quarter environment.

Full presentation:

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