CEO’s review on January-September 2024

“The situation in the car market continued to be historically weak between January and September, which affected Wetteri’s performance during the review period.  The Group’s revenue increased by 30% from the previous year as a result of corporate transactions, amounting to EUR 395.3 million. Adjusted EBITDA fell slightly short of last year’s level and was EUR 17.0 million. The adjusted operating profit decreased year-on-year, amounting to EUR 5.4 million. The difficult market situation, general economic uncertainty and weak consumer confidence had a negative impact on Wetteri’s performance during the review period. Wetteri updated its financial guidance for 2024 on 23 August 2024 because of the weaker-than-expected market situation in the new passenger car trade and postponement of planned new acquisitions.

In January–September, Wetteri’s revenue increased by 33% in the Passenger Cars segment and amounted to EUR 258,6 million. The invoiced sales of used cars increased by 72% in terms of the number of cars. Growth is made possible by Wetteri’s self-sufficiency in used cars: For every new car sold, Wetteri receives a used car, and its extensive range of used cars meets the market demand. The order backlog for new passenger cars at the end of the review period stood at EUR 36.3 million. In January–September, the Heavy Equipment segment’s revenue increased slightly year-on-year and was EUR 61.2 million. The invoiced sales of new commercial trucks totalled 111 units, and the invoiced sales of used commercial trucks amounted to 284 units. The Maintenance Services segment’s revenue increased by 35% in January–September, amounting to EUR 72.8 million.

On November 21, we announced that Wetteri will sell its subsidiary, Wetteri Power Oy, which operates in the sales and maintenance of Volvo and Renault-branded trucks. The purchase price of the transaction is approx. EUR 32.5 million and the implementation of the transaction is estimated to take place around years end. This transaction is very positive for Wetteri’s shareholders. The acquisition significantly strengthens Wetteri’s balance sheet as well as its ability to execute strategic acquisitions and thus provides excellent support for the company’s growth strategy. Profitable growth also opens opportunities to pay dividends in the future.

The automotive industry is going through a historical transformation and the operations will be focused on a few big players. Our goal is to grow into Finland’s largest full-service multi-brand car company, and this transaction takes us towards this goal. 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 this transaction. We have a strong position in the used truck trade and expanded our business by starting to import earthmoving machinery. Truck maintenance will continue with five brands.

The efficiency improvement measures launched in spring 2024 and the review of the cost structure will continue also during the coming year. Annual savings of EUR 5 million are sought. It is clear that the improvement in profitability resulting from the acquisitions will not occur in a short time, but Wetteri will continue to systematically take measures to realize synergy benefits. We are also developing our other activities, and we have recently launched a new service product, Wetteri-Turva, for which we expect strong demand. Wetteri-Turva is an additional security purchased for a replacement car, which covers possible repair or maintenance costs even in unexpected situations.

This year, Wetteri has continued to promote its growth strategy, and the focus has been on heavy equipment. In early 2024, Suur-Savon Auto and Suvanto Trucks Oy became part of Wetteri. With the acquisition Suvanto Trucks, Wetteri gained expertise in procurement channels and the purchase of used commercial trucks. In May, Wetteri signed the first import and distribution agreement in its history on Sany earth-moving machinery. In June, the company strengthened its heavy equipment business by acquiring Lahden Rekkapaja, which specialises in truck superstructures, and opened used commercial truck dealerships in Joensuu and Kuopio. In the late spring of 2024, we opened a major used car dealership in Vantaa in line with the Wetteri Premium concept. This will enable us to respond to the growing demand for high-quality used cars in the Helsinki metropolitan area. Wetteri has a strong position in a market that is turning to growth. In the late summer of 2024, we strengthened our position as a Kia and Mitsubishi dealer by expanding our cooperation with Astara Finland, a brand importer. From the beginning of October, the Rinta-Jouppi car dealership’s Kia and Mitsubishi businesses were transferred to Wetteri in Oulu, Rovaniemi and Pori through a business acquisition. Wetteri will continue to implement its growth strategy even more strongly in the coming year.”