Cdon AB

STO:CDON

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Fredrik Norberg, executive]

Hello, everybody, and welcome to the second earnings call for CDON Group. Today, it's myself and our CFO, Carl.

[Carl Andersson, executive]

Good to be here.

[Fredrik Norberg, executive]

Yes. The third time we're doing this together now, and we will get back to the numbers led by you in a moment. To summarize this quarter, we continue to have near-term challenges, but we are making the right investments for the long-term success. We had no top-line growth, but we could see an improvement month-over-month within the quarter. We have an EBITDA loss of minus SEK 3.5 million, adjusted for Malmo closing and foreign exchange costs. But we are really improving our operational implements to work towards our long-term objective to become the leading marketplace in the Nordics.



We're not happy with the results. On average, we grew with minus 16% versus last year. We had a tough start with April, minus 22%, but we had an improvement, improving in May to minus 14% and then ending with June with minus 11%. This yielded a negative EBITDA, adjusting for Malmo closing costs of SEK 4 million and foreign exchange cost of SEK 1.9 million. All in all, minus SEK 3.5 million in losses on EBITDA. We're not happy with this, and we really hope that this is the last time we have a negative EBITDA quarter.



Our gigantic migration work are now closing to the deadline. We are now moving the CDON platform into Fyndiq platform, making ourselves having one IT platform, managing 2 different marketplaces on all the different markets. We are ahead or we are on our time plan with the deadline in September. This will enable future cost savings as we have communicated before. And we are still confident in the SEK 40 million in cost savings in total for '25.



However, we see also that there is a slightly increase of risk in Q3 sales due to this big migration. Bugs and hiccups always happens when we are doing big migrations like this and the risk is a little bit increased due to the migration. During this quarter, we have put a lot of time and brains into the supplier acquisition. We have reworked our strategies to make sure that we're improving our supply. We have redone our processes on how to identify what supplier to have and also finding the merchants that have this supply.



Our main focus is now on Nordic merchants, and we have ramped up the teams that are working with acquiring new supply. And now the supply acquisition is the main focus for the whole company. Looking at the as important customer satisfaction, we see that we are still trailing on really positive high trend. We are still -- compared to last year, we have a customer review score of 4.2 compared to 3.8 last year. We have implemented 2 big changes that will even improve our customer satisfaction even more.



The first one is that we have now finally implemented a new merchant agreement. This will enable us to act more and harder on merchants that aren't performing and also bad supply, in favor for the customer. The second part is that we, during the quarter, now have finalized the whole migration of in-house customer service to an outsourced customer service. And we can already see now that we are on the same high levels as we were before when we had it in-house. So, we remain committed to the long-term goal of becoming the leading marketplace in the Nordics and continue to believe in the core elements of the marketplace model to massively improve supply and to greatly improve customer satisfaction.



The latter is on a good trend, and we are all focusing now on improving the supply. The supply will be the enabler to come back to GMV growth and will also be the base of continuous improving our customer satisfaction. With that said, we will dig into the numbers led by Carl.

[Carl Andersson, executive]

Thank you, Fredrik. Let's look into the reported figures. And in the quarter of '24, Fyndiq is naturally included. But still, in 2023, Fyndiq is only included from April 12. We report a lower GMV minus 14% versus last year despite the addition of Fyndiq. We have a lower net sales, minus 7% versus last year as we've seen higher commissions driving higher net sales from the GMV.



Lower gross profit, only minus 3%, and that is thanks to a higher take rate on average. Our gross profit after marketing decreased by 7%, while it increased as percentage over GMV, the [indiscernible] margin is up to 10.5%. All in all, this sums to a negative EBITDA of SEK 9.4 million in the quarter. And as mentioned, the SEK 4 million related to the Malmo closing and 1.9 million to foreign exchange costs in the quarter would take us to minus 3.5 million, adjusted.



Segment-wise, looking and starting with GMV, it is another tough quarter for CDON, minus 21% versus last year. But as mentioned, we do see sequential improvement month-over-month when comparing to last year. We also had a higher than usual non-fulfilled volume at month end, suggesting that we are carrying SEK 5 million to SEK 10 million of GMV into Q3, which should have materialized in Q2. Fyndiq, on the other hand is steady, and we're performing in line with last year, minus 1% to be exact. We've seen positive momentum in our non-Swedish markets. Even though from low levels, we still see the effect of adding supply and the GMV effect that follows.



Our take rate remains strong with the steadiness in them over the quarter across both segments really. We haven't done any changes to our commission model, and we see quite little mix effect affecting our take rate in the quarter. We have a lower gross profit after marketing in CDON, but we continue along a positive trend in Fyndiq. GPAM is down 23% in CDON, in line with the GMV development, but we are now [ lapping ] comparables with similar profitability. So, we would see a tightness between GMV and GPAM going forward.



A slight decline in our GPAM margin to 7.8%, down from 8.1%. Fyndiq, on the other hand, grew by 13%. And in that case, we're still seeing the annualized effects of selling [indiscernible] that will increase in Q3 last year. Gross profit after marketing over GMV remains steady over [ 87% ]. We did see higher marketing costs in the quarter, primarily in our CDON segment. We're continuously looking to experiment and maximize the returns of our marketing strategies, which explains the slightly higher marketing cost as a percentage of GMV. There is also a small timing effect related to the non-fulfilled volumes, as we mentioned.



Fyndiq segment is steady. We have a marketing cost around 11% and see solid profit on ad spend in the quarter as well. When summing this up, we are back to the negative EBITDA of minus SEK 9.4 million. And it does really reflect the challenging demand that we have seen, the Malmo office closing as well as the ongoing platform migration. But despite all of this, we -- I and the rest of the company is really committed and we do have a positive long-term view on our business model and on our business. The poor EBITDA is explained and starting from the top effectively with a weak GMV, some higher marketing costs as the primary factor, the lower GPAM, but we have also the higher OpEx, which is inflated in the quarter. Let's come back to that in a minute.



As mentioned, adjusting for Malmo closing and FX, we would have underlying EBITDA of minus [ 3.5 ], closer to the one in Q1. And OpEx is higher, but might work with the platform migration. It is really reaching its peak during Q2 with the planned completion, end of Q3. We have consultants as well as dual systems in our cost base, and those are costs that will come out once the migration is completed. And this is why we're still confident in the underlying -- that our underlying cost base will decline in '24 already, and we will reach a lower run rate in 2025, minus SEK 40 million, as previously communicated and committed to.



Lastly, a few words on our cash. We had a negative cash flow before changes in working capital, minus SEK 8 million, but changes to our working capital led to a higher cash position end of quarter, actually SEK 3.5 million higher than the end of Q1. Also bearing in mind that we are now heading into a seasonally stronger second half of the year with Q4 being the peak, we should have higher cash position quarter-over-quarter for the rest of the year. To sum this up, Fredrik.

[Operator]

Yes. We had some near-term challenges in the business, especially when it came to the top-line. We are working on it. But at the same time, as Carl just were addressing, we really see improvements in the long-term focus that we have. We have full focus on supply acquisition. We are migrating a huge platform into one platform, and we are centralizing a whole organization and pretty much creating a new organization here from Stockholm. And we are maintaining our long-term objective to become the leading marketplace in the Nordics. That ends this presentation, and now we open up for the Q&A.

[Operator]

[Operator Instructions] [Audio Gap] The next question comes from Adam Wyden from ADW Capital.

[Adam Wyden, analyst]

Thanks for some of that disclosure. Let me just start with Fyndiq. It looks like Fyndiq is doing pretty well. You have a table in your interim report that shows, I guess, April to June and then April to June. And then there was one, I guess, earlier in your report that is -- also is a Fyndiq marketplace, which shows that GMV is up 12%, [ 26 ] gross profit after market and all these numbers are up 27%. Is that because that's like an actual reported like in-period and the one in the back is basically a comparable period one. Is that right?

[Carl Andersson, executive]

Exactly. Fyndiq segment was only included from April 12. So, what we have been going through is really the operational full period numbers.

[Adam Wyden, analyst]

Okay. So, what I'm trying to understand is Fyndiq on an in-year contribution, I mean, at least if I look at the table in the back, it was minus [ 3.5 ] in the April and June quarter last year, and it was minus [ 0.1 ]. So, you guys made reasonably good progress. I guess, gross profit after marketing was up [ 2.3 ], but you must have picked up some -- you picked up some strength on the administrative, I guess, personnel reductions or stuff associated with the combined [ things ]. So, I guess what I'm trying to ask is, can you sort of comment on sort of what the in-year contribution from Fyndiq was each year, so we sort of understand how much it helps us or hurt us? It appears that it helps us on an in-year basis year-over-year, right?

[Carl Andersson, executive]

Yes. I see where we're getting at. I don't have those numbers top of mind, Adam, sorry about that. But let me just sort of add a bit of color to that. And yes, Fyndiq is much more of a stable segment at the moment. Combined, the sort of operational performance is flattish, even though we're still seeing somewhat challenging demand, in particular, on our other segment. We are seeing more and more positive contribution and really momentum in our Nordic markets outside of Sweden, where we've added a lot of supply, and we've seen instant effects to that. So, we are positive about getting back into growth territory with Fyndiq as a segment for the remainder of the year.

[Adam Wyden, analyst]

Okay. Let's just drill down on that. So, like if I look at it year-over-year in the back, it shows that EBITDA is up roughly [ 3.4 ] and gross profit is up [ 3 ]. So that business is, I guess, doing well, sort of, quarter-over-quarter with the full year, sort of, full year apples-to-apples. Obviously, you were hampered by -- obviously, were hampered by the algorithm, obviously, but it sounds like because it's your technical platform, you've been able to make those changes. I mean are you seeing absolute GMV growth? You commented on the aggregate month-over-month trends showing [ 20 to 11 ]. I mean are you seeing positive GMV growth at Fyndiq now that you are making progress against the algorithm? Maybe that's a question [indiscernible] I don't know, I'm just curious -- are you seeing...

[Carl Andersson, executive]

Both covered up. But yes, Fyndiq is performing relatively better than the CDON segment, naturally, when we came into that. And we have seen stronger -- we have seen month-over-month -- sorry, month-over-month when looking at the year versus last year on Fyndiq during the quarter, yes.

[Adam Wyden, analyst]

So, you're seeing year-over-year increases versus last year in Fyndiq already?

[Carl Andersson, executive]

In individual months, yes.

[Adam Wyden, analyst]

Got it. Yes, I understand. But you're seeing -- and you're seeing year-over-year increases in certain months. Okay. That's helpful. So, you sort of hit on this a little bit, but like when I look at like core CDON, GPM was down by about [ 7.5 ], which includes -- which I think includes higher marketing costs unless the selling expense is below the line or something different. I'm just looking at the, sort of, mini-income statement. But your EBITDA was down a lot more than that, even more than, sort of, your, sort of, called-out restructuring amount, right? Like -- so I guess my question is, when I think about like -- I guess like one time Malmo, but is there also -- I mean, could you do us a little favor just, sort of, say how elevated your OpEx base is in the period -- I know Swedish governance, like what's EBITDA, what's not EBITDA, getting rid of an office, firing someone is something you can back out of EBITDA. But like -- and even that you don't even provide an adjusted EBITDA number, you just sort of provide disclosure. I mean can you, sort of, help to quantify that -- the quantum of the elevated expense base? Because when I just, sort of, do back of the envelope math, I see that Fyndiq is basically up from minus [ 3.5 to 0 ]. And I would have -- it appears that there's at least another, I don't know, $3 million, $4 million, $5 million, $6 million of sort of elevated OpEx that isn't getting backed out when I, sort of, run the GPAM math.



Can you, sort of, -- I know you talked about it a little bit, but can you give a little bit more disclosure around, sort of, range of amounts? Because I think the GMV was -- it wasn't great, but it was largely, sort of, in line with forecast, and the EBITDA was worse. And I wonder if you could do, sort of , a little bit more in terms of enumerating why, what these costs are, how much they are and the timetable for them to come back down?

[Carl Andersson, executive]

I mean, I think just coming back to, sort of, the buckets of cost, I mean, we have a reasonable amount of dual system costs and platform run cost that, well, has not been inflated, but we do know that is cost will come out basically running two full platforms at the moment, we changed drastically into Q4 when we were effectively running necessarily 1.5 because we're not shutting down one completely, but we're still reducing costs significantly. So that's one bucket.



Then we are hiring additional staff. We are compensating for staff we left behind in Malmo, which is adding to our cost base. At the same time, not reflecting really the GMV that we were seeking for the quarter in respective of where that forecast put us. But there are also interim consultants across departments in our commercial, in our financial departments that we will shift out in favor of employees and that should materialize in Q3. There are some tech consultants that we had to cover for employees who both were terminated or decided to leave us in past months that we'd have to compensate for.

And all of that really adds up to quite a few millions. So, I have a hard time quantifying them exactly on the call now.



And I'm just, sort of, reminding ourselves that we have done significant cost reductions already that we're not really getting credits for in our P&L as we have loaded back with temporary consultants. As mentioned already, following the transaction, we took out several marketing consultants, data, et cetera, that were inflating the cost base back then. So, when adding all of this somewhat less sticky costs, we believe we can take out the SEK 40 billion in terms of the run rate when we are hitting 2025.

[Fredrik Norberg, executive]

And just to add on that, one thing also we have actually grown in the quarter is the rest of Nordics for Fyndiq and that has been fueled by a massive improvement of the supply. And the supply is pretty much -- we have one big cost when we are uploading new supply and that is translations. So that is an investment cost that we took during the quarter, but we will have a good return on that for the coming quarters as well. So, some overlapping costs and this fueled supply as well.

[Adam Wyden, analyst]

And you think that you'll see progress against your OpEx in 3Q? Is that right? Because obviously, some of the salaries will come off. I mean, you'll see progress against your OpEx line into the next quarter?

[Fredrik Norberg, executive]

I mean we have some onetime costs that we have taken now as the increased supply, but also when it comes to recruitment, we have paid a lot of recruitment costs that we will not pay the coming months, we will get rid of the overlapping costs of old staff and interim consultants and so on. We are also moving out some of the interim consultants to full-time employees instead. So overall, we are going in that direction, yes.

[Adam Wyden, analyst]

And then can you – you talked about growing GMV in the back half. It sounds like at least from Carl's comments and maybe this is from Fredrik, that you're already seeing increases at Fyndiq, which makes sense because Fyndiq is the same platform that you're migrating CDON over to. So, you're seeing Fyndiq compositive. I know you guys are conservative and careful, but you're seeing Fyndiq compositive. You're seeing interest rates coming down in Sweden. And it appears that there are some signs of growth from a macro perspective, do you -- I guess, do you think that CDON can start growing? I mean, you've obviously seen sequential improvements like from [ 20 to 11 ]. I don't know if that was on a consolidated basis or if that was on a CDON basis. But like, I mean do you think you'll be able to produce a positive, sort of, same-store GMV at CDON this year?

[Fredrik Norberg, executive]

Sorry, if we can see the same -- say it again?

[Adam Wyden, analyst]

I'm saying, Fyndiq appears -- at least pulling this apart, Fyndiq appears that they're getting through the algorithm, right? That they're -- you're seeing positive year-over-year increases on GMV, which is you've got some algorithms, some economics, some whatever you want to call it, good execution. CDON, you have not -- you're migrating the platform. Obviously, there's some challenges associated with that, getting the right supply, marketing, whatever. Do you think that you can get core CDON, growing GMV year-over-year in calendar 2024?

[Fredrik Norberg, executive]

We have a much more positive view on the second half of the year, both when it comes to the seasonality of the business, but also everything that we are implementing our focus on supply now, acquiring the right merchants and so on and also beefing up the whole organization. Everything will get a positive outcome in the second half of the year. We don't want to say now the full year what we think of it. But definitely that the second half of the year is going to be -- we strongly believe that it's going to be much more positive than the first half of the year.

[Adam Wyden, analyst]

So let me rephrase this. Do you think the back half, do you think the back half of the year in the CDON segment can be positive from a GMV perspective, I mean, remove the first half, I'm saying, is it possible that the back half can be positive on a GMV basis? Just for CDON.

[Fredrik Norberg, executive]

Yes, it's -- yes, we think so.

[Adam Wyden, analyst]

Got it.

[Fredrik Norberg, executive]

And I just want to add also that the big thing that is a little bit at risk, as I addressed during the presentation is also the migration during the third quarter now, which we're entering. There is some risk. It's such a big process and migration that we are doing and there will appear bugs and so on. But overall, we have a positive view. We must see a lot of positive outcome from all the things we are addressing and investing in now as we speak.

[Adam Wyden, analyst]

And what about macro? I mean, obviously, macro has been the topic of a lot of these conversations. And now you're seeing interest rates coming down. And I mean, specifically on the CDON side, furniture, patio furniture, home electronics, I mean home prices are going back up in Sweden. I would think that people would be going back to buying some of these goods. I mean that's got to be a positive sort of demand driver, I would think, as you enter into the back half and the following year, just because people have adjustable rate mortgages and these are, sort of, discretionary items that people have held off for now almost 3 years. I mean it's really almost since the end of '21. I mean I would think that you'd be getting a macro benefit at some point on the CDON segment as well now.

[Fredrik Norberg, executive]

We think you're right. We think that we're going to get some tailwind there, even though that's not the whole explanation for us not growing so far, we have much more to fix internally than the macro perspective of it. But of course, we will get help from that as well. Actually, there were numbers released today that the inflation is lower than expected in Sweden. So that is also positive, especially for CDON who have these really high-value items. We believe that that can give a little bit of a positive burst into the important Q4.

[Adam Wyden, analyst]

Got it. So basically, in summary, you had elevated OpEx in the quarter that you think is going to come down, Fyndiq is comping positively seeing improvements, and you're nervous to talk about what GMV is going to be in the back half because -- not because you don't have confidence in the products and the supplies and the macro, but you're just -- you don't know when the platform gets shifted, whether all the orders can get fulfilled, is that sort of a good summary?

[Fredrik Norberg, executive]

I think that is a good summary if you also top it up with that we are doing great progress with some big pillars in the whole business. We are talking about the supply part that we are putting a lot of effort and resources on. We are migrating into one platform, which is going to be a very positive effect for the long term of this business. And last but not least, we are building a new organization and centralizing it all into one office here in Stockholm. All of these 3 really foundational pillars are very positive where we can see progress already now. But we don't see the progress in the financial numbers yet, but we strongly believe that over time, this will catch up in a positive momentum for us.

[Adam Wyden, analyst]

Carl said that there was SEK 5 million or SEK 10 million of GMV that was not reflected in the period because of timing. And obviously, that's -- again, I don't know if it's on the Fyndiq or the CDON side, but I suspect that's meaningful EBITDA, I mean if that makes any sense, again, I don't know where you sort of strike your -- it depends on whether it's on the Fyndiq side or the CDON side. But like, I mean, can you comment a little bit as like how much of that EBITDA got shifted from the 2Q to the 3Q, so people can have a better sense of, sort, of what it would have been normalized?

[Carl Andersson, executive]

Yes. So, we do see when we closed the books on the quarter that we have an unusually high -- well, we have unusually low [ shift ] which is basically revenue recognized volume compared with the order data or the order volume that we see, which is the data that we looked on previously. Quite technical. It's all on the CDON side. And if someone has ordered a sofa or something with a long fulfillment time, they've ordered it within the period, but it has not been shipped to the customer, so, the revenue has not been recognized within the quarter.



That is the kind of revenue that has not been recognized in the quarter. The marketing cost has been carried in the quarter, and the related OpEx essentially. So right, as you point out Adam, so to nicely to the bottom line. And we always have a little bit of non-fulfill. It's all about timing in the month when the sale happens and everything, but it is unusually high and in the range of SEK 5 million to SEK 10 million that we expect to materialize in Q3.

[Adam Wyden, analyst]

Right. So practically speaking, that could be double-digit EBITDA contribution that got -- that didn't get put in the quarter basically, like whatever the numbers are, but I mean, it could be 8%, 9%, 10% contribution margin that got moved from one quarter to the next.

[Carl Andersson, executive]

That [indiscernible] should not be carrying -- well, should be carrying less costs. I don't want to comment exactly on how much that can be, but yes.

[Adam Wyden, analyst]

Oh because…

[Carl Andersson, executive]

In principle, you're right, that it should come at the lower cost, and we should therefore expect a higher EBITDA contribution.

[Operator]

The next question comes from Nicklas Fhärm from SEB Equities.

[Nicklas Fhärm, analyst]

Thanks, operator, and good afternoon everybody. So just to kick off, just for the record, if you could just confirm that you've charged your Q2 EBITDA numbers with SEK 4 million in non-recurring item costs, please?

[Carl Andersson, executive]

Don't confirm that we were adjusting those numbers.

[Nicklas Fhärm, analyst]

No. Can you confirm that the reported EBITDA included SEK 4 million in restructuring costs?

[Carl Andersson, executive]

Yes, that was non-recurring costs related to the Malmo office. Correct.

[Nicklas Fhärm, analyst]

Exactly. And can you just, for the record, also confirm your full year expectations in terms of similar non-recurring costs, please?

[Carl Andersson, executive]

So, we are still in the range of SEK 7 million to SEK 9 million for the full year. We took SEK 1.1 million in Q1 and plus the SEK 4 million, so we're up to SEK 5.1 million, and we expect to stay within that range. And also, those costs should be quite front-loaded in terms of recruitment, interim consultants, and that period should essentially be behind us now. So, we see less and less addition month-over-month through that cost [indiscernible].

[Nicklas Fhärm, analyst]

Excellent. Moving on, could you give us somewhat of a better understanding of where you are now in terms of the merchant base, please? We have been discussing this now for about a year. And are you happy with the merchant base sale? Should we expect that to net grow over the coming quarter and onwards?

[Fredrik Norberg, executive]

I would say we're doing progress in that area. We have though really made a deep dive within this quarter to refine our strategies, change some of them and also implement new processes when it comes to finding the supply we want, how to identify it and also finding the merchants that have the supply. This is something that we have implemented during the quarter. So we think we will see effects after the summer from this, but already now we see that we, every month now get more and more merchants onboarded with better and better supply.

[Nicklas Fhärm, analyst]

So, I don't want to put the words in your mouth, but if we should forecast anything for Q3 this year, we should probably not -- we should base that on, sort of, the same or at least growing merchant base, not declining merchant base?

[Fredrik Norberg, executive]

Yes, correct.

[Nicklas Fhärm, analyst]

Yes. Perfect. And then moving on to the site traffic situation following the Google change to the algo last fall, could you give us a little bit of an idea of what you've actually done to mitigate these effects? And what you expect or when you expect to, sort of, annualize this perhaps, as of now going forward? Thank you.

[Fredrik Norberg, executive]

Yes. We have implemented at least one big change and a couple of smaller changes. We have 2 to 3 more bigger changes that we want to do that we know will make a good effect. We will not be able to do that before the migration. It will be solved for CDON when migrating over to the new platform in some parts. But still for the -- even for the new platform, we have some improvements and bigger changes that we need to address and do. This is not something that's only going to fix the SEO issue that we have seen a year back, but also improve the whole category solution; how you find the products, how we structure the product data and so on, which Google is going to like both from an SEO perspective but also from a marketing SEM perspective.



So, we have implemented. We see some positive notes on this. But still, the main factor that contributes negatively is the lack of supply. This is also spilling over to the SEO. So not having and not refilling the supply that we have purged the last year have also spilled over negatively to the SEO. So we see that it all comes down to improving the supply even when talking about SEO.

[Nicklas Fhärm, analyst]

Thank you for that, Fredrik. Moving on, can I ask you what is your opinion on, sort of, the overall online market development so far in this year? We've all seen the double-digit growth numbers coming out of [ South Canada's ] statistics, obviously, whereas you have been down pretty much twice as much, right? So, I'm just trying to get a feel for your -- because when you also add that you're a little bit concerned perhaps on your IT transition in Q3 on the Q3 trading, it would be very interesting to have a feel for what is market-related and what is company-specific, whatever the outcome is when we get there?

[Fredrik Norberg, executive]

Yes. We have some question marks when it comes to those numbers. And in the industries, there are quite some big question marks. I think in May, it was plus 20% or so. The grocery union -- grocery store union released their numbers yesterday. And for June, they had 0% growth in the online segment for the whole grocery store. It's another industry, but still, however, we do believe that we are trailing behind the average in the market. So we have it more in our hands than in the market. But we cannot see when we are talking with peers and so on that we have this positive momentum yet in Sweden, but we are also confident or strongly believe that this will turn around now looking into the second half of the year.

[Nicklas Fhärm, analyst]

Excellent Fredrik. And final question for me, if I may. I'm just curious to understand why it is that Fyndiq in terms of GPAM margins, continued to have quite a substantial improvement year-on-year even in Q2, which you just have reported, right, versus a slight but still decrease in GPAM margins at CDON? Could you just briefly give us some idea whether this is intentional somehow? Or what would be the main drivers if there would be a change in CDON? Or for that matter, if we just should expect a GPAM margin in CDON at or about these levels also going forward?

[Carl Andersson, executive]

As we were talking about, we have seen enough steadiness in our take rate, really the last 3 quarters on Fyndiq. And it all comes back to the change in shipping fee that we implemented July 1, effectively last year. So Q2 should have been the last quarter when we would see the annualized effect of that. While CDON saw a commission increase in Q1 in 2023, so, it's that timing effect that causes that different view on GPAM. We're happy about the steadiness in it. We did not do any commission changes during the quarter. And we think that these are reasonable levels that we should be carrying forward.

[Operator]

[Operator Instructions] [Audio Gap] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Fredrik Norberg, executive]

Yes. We have received a written question. It's regarding if we believe that the platform migration will improve the SEO possibilities to the level of Fyndiq and being faster to act on changes from Google. And we addressed that a little bit previously, and the answer is yes. We believe that it will improve the speed. We would have actually been able to improve the sales effect even more on Fyndiq if it weren't for the migration and that we're putting a lot of -- we have to put a lot of resources on that in order to do the migration before the last quarter of the year.



So yes, that will be -- and also the second part of it is that when doing these fundamental changes as when Google are doing changes in the algorithm, then in the future, we only have to do it in one place, in one platform, in one language instead of doing it in 2 places everywhere as we are doing now. So that's also -- that will also increase the velocity in everything that we're doing. All right. That was the last question. Thank you for your attention and have a great summer and vacation for all of you who will have that. Bye-bye.

[Carl Andersson, executive]

Bye.