CEO’s review: Favourable first quarter – strong growth in revenue

“Considering the challenges in the operating environment, the first quarter of 2024 was favourable for Wetteri. The Group’s revenue was EUR 144.8 million, and its adjusted EBITDA increased to EUR 6.1 million. Adjusted operating profit remained at last year’s level and was EUR 2.5 million. Wetteri’s operational performance during the review period was affected by the harbour strikes in particular, which shifted deliveries of new cars from the normally busy March to the following months. The impact of the strikes was also reflected in spare parts logistics and, consequently, maintenance. 

In Wetteri’s business segments, revenue growth was highest in the Passenger Cars segment, where revenue rose by 92% to EUR 98.5 million. The invoiced sales of new cars increased by around 61% year-on-year, and the order backlog for new cars at the end of the review period was EUR 47.2 million. The revenue of the Heavy Equipment segment decreased slightly from the previous year. The invoiced sales of new commercial trucks totalled 44, and 36 new orders were received. The invoiced sales of used commercial trucks totalled 52. 

The revenue of Maintenance Services increased by 76% and was nearly EUR 25.5 million, but investments in the development of maintenance operations affected performance compared to previous year. In the maintenance services, the multi-brand selection and the extensive expertise created through it is a great strength in the era of electrified motoring, as there is a strong demand for trained and importer-audited brand maintenance. The electrification of driving does not reduce the need for maintenance, but the opposite: customer loyalty is apt to create volume growth and revenue growth, and thereby support Wetteri’s growth goals also in terms of maintenance. 

Wetteri is on its way to becoming the largest and most profitable player in the automotive sector by the end of 2025. Wetteri’s growth strategy is acquisition-driven, and this strategic choice is based on a megatrend shaping the automotive industry, driving the industry to focus on fewer larger players. The transformation of the automotive industry is being driven by numerous smaller changes in technology, operating models and consumer behaviour. The car trade is a business based on volumes, and economies of scale generate synergy benefits and give leverage to navigate the transformation of the operating environment.  

Wetteri’s acquisition-driven growth strategy is based on volume growth and decreasing costs as a result of synergy benefits, as well as improved margins. To improve the profitability of operations, Wetteri has started to eliminate overlaps created by acquisitions by reorganising the administration and regional business management, for example. The efficient use of facilities is being assessed. In business acquisitions, the focus will continue to be on well-managed companies with strong development potential, whose culture is close to Wetteri’s. This helps ensure successful integrations and the realization of practical benefits as soon as possible. 

Wetteri differs from many other operators in the automotive sector because of its comprehensive business model and extensive offering. Wetteri’s business model covers the sale of new and used passenger and commercial vehicles, as well as the sale of heavy vehicles. In addition, Wetteri offers a wide range of maintenance services and repair shop services, as well as spare parts and tyre services in all vehicle categories. Through acquisitions, Wetteri has become stronger by means of a wider service network, new brand representation and brand-specific expertise, for example. Wetteri’s business model and Finland’s largest car brand representation are strengths that help the company navigate the constantly challenging market situation. 

This year, the number of first registrations of new passenger cars is expected to be 76,000, still well below the long-term average. There is a strong need for renewal in Finland’s rapidly ageing car fleet: the emissions reduction targets for transport will not be achieved with the current car fleet, and a new fleet is also required to improve road safety. The automotive sector has pent-up demand that will be unleashed in the near future, as well as strong potential for organic growth. The demand for new cars is also expected to pick up in the second half of this year. More moderate interest rate developments and the continued tax incentive for fully electric company cars are promising signals for growth. 

In 2024, we will continue to execute our growth strategy with determination. In early 2024, Suur-Savon Auto and Suvanto Trucks Oy became part of Wetteri. Suvanto Trucks provided Wetteri with strong expertise in purchasing used commercial trucks, in addition to procurement channels. We are planning to build a nationwide sales network for used commercial trucks and make more efficient use of our existing distribution channels. In May, we signed the first import and distribution agreement in Wetteri’s history for earth-moving machinery. In June 2024, we will open 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. During 2024, we will also explore opportunities for funding growth, expanding the company’s ownership base and strengthening self-sufficiency through a directed share issue for institutional investors, private investors and Wetteri’s personnel.”