Aarne Simula, CEO:

The year of launching Wetter’s growth strategy

“2023 was a year of strong growth for Wetteri as a whole, and we initiated measures in line with our growth strategy. Two corporate transactions were completed and, and four new used car centres were opened during the year. We also announced future acquisitions that were completed in the beginning of 2024.

Considering the operating environment, the company’s financial performance was quite favourable. The Group’s revenue was EUR 443.3 million, and its adjusted EBITDA increased to EUR 24.9 million. The adjusted operating profit was EUR 12.0 million. The rise in interest rates affected the profitability of Wetter’s business, and during the last quarter of 2023, unexpected challenges emerged in the operating environment of the automotive sector: a strike in the stevedoring sector affected the new car deliveries, and this had an impact on the Passenger Cars segment’s performance in particular over the last few weeks of the year. Maintenance operations were burdened by the fact the Christmas holidays fell on weekdays.

In Wetteri’s business segments, revenue growth was highest in the Passenger Cars segment, and revenue rose to EUR 284.5 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 financial year was at a good level (EUR 57.3 million). The Heavy Equipment segment’s revenue increased by 14% year-on-year. Its adjusted operating profit increased by 49% and was nearly EUR 3.7 million. The Maintenance Services segment’s adjusted operating profit stood at nearly EUR 5.7 million, with an increase of 200% from the previous year. 

Wetteri’s goal is to be the largest and most profitable player in the automotive sector by the end of 2025. Wetteri’s growth strategy is acquisition-driven. This strategic choice is based on the ongoing historical transformation in the automotive industry. Consolidation into larger units with better profitability in the car trade is a megatrend resulting from numerous smaller changes in technology, industry operating models and consumer behaviour. The car trade as a business is increasingly about volume: size brings synergy benefits and improves operational efficiency. It also gives 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. There are several well-managed automotive companies in Finland that cannot cope with the pressure of the transformation on their own, but that gain successful continuity as part of a larger whole. Wetteri’s value creation journey has only just begun.

Wetteri is distinguished from many other automotive operators by its business model and wide 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. With the acquisitions of Autotalo Hartikainen and AutoPalin completed in 2023, Wetteri has become stronger by means of a wider service network, new brand representation and brand expertise, for example. Wetteri’s business model and Finland’s largest car brand representation are strengths that help the company navigate challenging operating environments successfully. Wetteri’s highly skilled, trained and committed personnel play a major role in the company’s growth story, and in December 2023 we announced the free share issue to all of our automotive business personnel.

This year, the number of first registrations of new passenger cars is expected to be 80,000, well below the long-term average. The Finnish car fleet is the oldest in Europe, with an average age of 13.2 years. There is a strong need for renewal in the car fleet: the emissions reduction targets for transport will not be achieved with the current car fleet, but a new fleet is also required to improve road safety. This means that the automotive sector has pent-up demand as well as strong potential for organic growth. The stabilised inflation and interest rates support the increase in the demand for new cars. Wetteri’s multi-brand representation and national presence offer a good basis for responding to demand.

In 2024, we will continue to implement our growth strategy with great determination, and in the beginning of year 2024 Suur-Savon Auto and Suvanto Trucks Oy became part of Wetteri. With Suvanto Trucks acquisition Wetteri gained purchase channels and expertise, and we will start building a nationwide sales network for used heavy vehicles by utilising our new and older distribution channels more efficiently. In the late spring of 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.”