CEO review – January – December 2024

“2024 was a historically weak year for the automotive sector. The number of first registrations of new cars fell far short of the levels of recent decades. Economic uncertainty and low consumer confidence strengthened the negative impacts. Despite the headwinds, we systematically continued to implement our growth strategy. During 2024, we completed 5 company and business acquisitions, including the largest corporate transaction in our history: the sale of Wetteri Power Oy to the Swedish company Persson Invest Ab. The transaction significantly strengthens Wetteri’s balance sheet and its ability to execute strategic acquisitions, and thus provides excellent support for the company’s growth strategy. The strategic business arrangements carried out over the last year will strengthen our position in the automotive market, which is undergoing major changes, and will increase our market share in the overall automotive market.

The turbulence in the operating environment was reflected in our financial performance. Our adjusted EBITDA fell short of the previous year’s level and was EUR 20.7 million. The Group’s revenue increased by 16% from the previous year as a result of corporate transactions, amounting to EUR 514.5 million. The adjusted operating profit was EUR 5.1 million. Of Wetteri’s business segments, the Passenger Cars segment’s net sales rose to EUR 327.8 million and adjusted operating profit turned negative and was EUR -5.6 million. The used cars invoicing increased by 58%. The order backlog of new passenger cars at the end of the year was EUR 36.6 million. The Heavy Vehicles segment’s revenue increased by 23% year-on-year. Its adjusted operating profit decreased by 17% and was EUR 3 million. The adjusted operating profit of Maintenance Services settled to EUR 6.9 million an increase of 21 per cent compared to the previous year.

In 2024, we launched an efficiency programme to improve profitability and save costs. In 2025, we will continue efficiency improvement measures as part of our continuous business development. With these actions, we reduced our debt financing. The majority of Wetteri’s interest-bearing liabilities on its balance sheet are related to the consignment stock financing of used cars, the leasing financing of demonstration cars, and lease liabilities related to the premises and equipment rented by the company. Consignment stock financing is a risk-free form of financing for the dealer, in which the car under financing can be returned to the financing company if desired.

The automotive industry is undergoing a historical transformation, and operations will focus on a few big players. We see that now is the right time to invest in the growth of the passenger car business. We will continue to develop the Heavy Equipment business, for which we have excellent prerequisites thanks to the Wetteri Power transaction. We have a strong position in the used commercial truck trade. Commercial truck maintenance will continue with five brands.

According to the automotive forecasting group, the lowest point of the market has been reached. The growth outlook for the automotive sector promises a growth rate of 10%. In February 2025, customer orders for passenger cars were up 17 per cent cumulatively compared to the previous year. As a result of a slower decrease in the number of older cars, the average age of the passenger car fleet increased to 13.6 years. In the previous year, the average age of passenger cars was 13.2 years. The increase in the average age has been faster than in previous years, as the number of registrations of new cars has fallen significantly short of the long-term average. This creates positive pressure for the car trade to pick up. Cheaper electric car models will also be introduced, meaning that the average price of new cars will decrease, and this will lower the threshold for consumer customers to buy a new car.

In 2025, we will continue our efforts to realise the synergy benefits of acquisitions and improve profitability. We will also continue to expand our brand representation to new locations, thereby strengthening our position to negotiate other new brand representations at growing locations. An example of these is Automotive Hedin Kia and Mitsubishi business transaction in Lahti, announced in February, which brings our potential market share of Kia and Mitsubishi dealerships in Finland to about 20%. With these arrangements, we have built the conditions for future growth.

Our strategic goal is to achieve at least 15% share of the national market potential of each brand we represent. We are also continuing to explore new business and company transactions that support our growth strategy. Finally, I would like to thank Wetteri’s personnel, customers and all partners for the past year and wish them success in 2025.”