Varusteleka Profit Report 2019

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It is time for the annual report! Let’s cook the books! We managed to organize debits and credits in an orderly fashion. The auditor has wielded his arcane accounting magic around our profit and loss statement and balance sheet, so it is time to check how the year 2019 went from a financial perspective.

A lot to do, lots of changes, lots of everything

At the beginning of the year 2019, we were planning to chill out, focus on core business and stabilize the operations after the traumatic year 2018 when we moved to the new location. To some degree, we did that, but we have to confess that the year 2019 was all but easy riding. Among other things, we did do following:

On top of these milestones, we launched heaps of new products, improved our processes, recruited new talent and rearranged some of the responsibilities internally. As a kick to the nuts, Finland’s Postal service went on a strike during the hottest commercial season. It did not slow us down too much, though. So all in all, not an easy year but that is the way in retail and seafaring.

Turnover increased by 11 %

All the actions we took and challenges overcame during 2019 translated nicely into figures. Our turnover increased in all channels and the total turnover was 14.574 M€. The share of international sales is 26% of our turnover and the United States of America is the largest international market we serve. Our systematic push of several years towards the largest military and outdoor market in the world is yielding good results.

A few tidbits. During the year, we:

  • Delivered orders to over 90 different countries
  • Delivered 268,660 orders in total
  • Sold 1,196,033 items

House brands lead the way

For some time already, we have had a strategic emphasis on our house brands. Särmä, Särmä TST, Terävä and Jämä have developed in a very positive way. The demand is strong and customer feedback has been positive and encouraging.

The share of our brands has climbed close to 50% of turnover. It will continue to rise as we conquer new product categories.

We managed to keep the share of military surplus about the same as in 2018. In absolute figures, surplus sales increased over 14%.

Bring prosperity to Finland

Our vision dictates that we must bring prosperity to Finland. We have used our own “balance of trade” as a key metric here. Based on statistics at hand, we managed to create a positive balance of trade. In plain terms, we exported a higher value of products compared to the value of the products we purchased from other countries.

Purchases from Finland were approximately 4.4 M€ and from abroad we sourced approximately 3.3 M€. At the same time, our turnover from the international market was 3.7 M€. This means our “balance of trade” was positive by 416 k€. The share of domestic purchases was over 57%.

As a disclaimer, the statistics are based on the supplier’s home country and may not take into account their foreign operations. Quite many of the Finnish companies have manufacturing facilities south of Finland. In any case, the figures are comparable to last year (when we were close but didn't surpass this goal) and one of our key initiatives going forward is to make our supply chain even more transparent.

Bringing prosperity to Finland involves paying taxes. At Varusteleka, we do not hide in a tax shelter: We pay our share as required. Last year, we paid close to 3.5 M€ in direct and indirect taxes for the common good.

We almost doubled the Earnings Before Interest and Taxes

Uncle Scrooge bathes in money, we bathe in Skramas. Most of our profits have meant more products in stock.

During 2018, we had all kinds of challenges and relocation was eating out our profits. During 2019, we did not have this monkey on our backs. Instead, we managed to improve our operations and the company’s profitability increased significantly.

The key factors for improvement were good sales development, increased sales share of house brands and increased efficiency throughout the entire company. During 2019, we managed to reduce the amount of leased workforce significantly and recruited those operators into our ranks. This increased the personnel expenses but decreased overall costs significantly as the lease contract company’s share was dropped out.

The costs grew slower than our turnover and this yielded significantly improved profitability. Earnings Before Interests and Taxes was 850 k€ or 5.8% out of turnover. Based on profitability, the year 2019 was a success, even though we did not meet all the goals we set. With these figures, we're really happy to pay cash on the barrelhead bonuses for the whole crew.

What happens next?

Well, we continue to stand for the good guys and march toward Total World Domination. This year “to-do” includes but is not limited to:

  • America First! We'll continue to push our presence further in ‘Murica. New ways to deliver goods, more joint projects with locals etc.
  • We show even more love to our house brands. Build a solid foundation so that Särmä, Särmä TST, Terävä and Jämä may become recognized international brands.
  • Massage our assortment to make it even better. Not necessarily significantly larger, just better.
  • We'll continue our execute our Unethicality Program. First, we calculate our devastating impact on the environment for the year 2019 and offset that via a compensation plan. Then, we start working out how to significantly reduce our environmental footprint in the future

On top of these, we will do our daily chores better and better every day. We will arrange Lekafest 2020 and Finnish Brutality 2020. The container store will be on a Road Show again and there is a pipeline of new products coming throughout the year. Cool stuff happening so stay tuned.

In the end, we would like to express gratitude and big thanks to the whole Varusteleka crew for awesome results. Thank you, our great customers. It is our pleasure to serve you. Thank you, all collaborators, partners, suppliers and other accomplices. We could not have done this well alone.

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