“The period between January and September was strong for Wetteri, and our revenue increased 46 percent to EUR 312 million and adjusted EBITDA to 18 million euros. The Passenger Cars segment’s revenue increased by 59% from the previous year because of deliveries from the order backlog for new cars. In addition, the used car trade grew by nearly 20%. The Heavy Vehicles segment’s revenue increased by 21%, and the value of its order backlog stood at nearly EUR 19 million at the end of the review period. The Maintenance Services segment’s revenue increased by 46% in January–September. In new passenger cars, deals were closed at a relatively good level, and our order backlog continues to be nearly EUR 65 million.
Our result for January–September is a clear indication of the strength of Wetteri’s business model. In the automotive sector, we are the only listed company whose business model covers the sale of passenger cars, commercial vehicles, and heavy equipment, along with maintenance, spare parts, and repair services. This makes Wetteri’s operations stable and less sensitive to the impacts of business cycles.
Wetteri’s goal is to be the largest and most profitable player in the automotive sector by the end of 2025. In January–September, we took major steps towards this goal and completed two business acquisitions: Autotalo Hartikainen became part of Wetteri at the beginning of March, and AutoPalin joined us at the beginning of June. With these acquisitions, we added five new towns to Wetteri’s area of operation, gained new brands to represent and strengthened our position as a representative of our current brands. We also strengthened our capabilities to serve wider customer segments in all vehicle categories, from passenger cars to commercial trucks. In addition, we invested in organic growth and opened four new used car centres in different parts of Finland. This increased the number of our locations to 40.
Wetteri has Finland’s largest passenger car brand sales and maintenance representation and heavy vehicles maintenance representation, 36 brands in total. Securing brand representation always requires long-term work, high-quality operations and sustainability from the dealer. The fulfillment of manufacturer-specific requirements is assessed annually in terms of employees’ competence and training, customer satisfaction, energy efficiency and the achievement of emissions reduction targets, among other aspects. Wetteri’s broad brand representation is a competitive factor and a cornerstone of growth, which enables us to serve an extensive customer base with different needs, even within vehicle categories, which helps mitigate business risk.
The automotive sector is undergoing a historic transformation that is shaping the industry and its structures. Changes in distribution route models from traditional to agency model, the electrification of motoring, and increasing environmental requirements call for new kinds of expertise and investments, which means that operations will focus on larger, more profitable and more efficient units. The number of players in the automotive sector will decrease, as many of the companies will have to weigh options between either investing growth or selling the business to someone with stronger potential for growth. Synergy benefits and business development potential are key considerations in Wetteri’s acquisitions. In a transaction, the parties’ similar operating cultures support successful integration, and Wetteri has a strong track record in this respect.
This year, the number of first registrations of new passenger cars is expected to be 87,000, which is more than the forecast made early in the year, but still below the long-term average. The level of first registrations is expected to continue to be low in 2024. This trend will lead to an aging car fleet, and Finland’s car fleet is already the oldest in Europe. Combined with an ageing car fleet, the decrease in inflation and the stabilisation of interest rates, as well as the recovery of the economy from the recession, which is expected to be short-lived, will increase consumers’ interest in purchasing new cars in the coming years. New and more affordable fully electric cars in the highest-selling vehicle categories and normalised delivery times are likely to increase consumers’ and companies’ interest in updating their fleet. There is pent-up demand in the automotive sector, which we expect to materialise in the coming years. There is strong potential for organic growth.
Wetteri’s growth target is ambitious, our strategy is clear, and its implementation is continuing with determination. In October, we announced a new business transaction: Wetteri will acquire the car dealership business operations of the Suur-Savo Cooperative Society. The transaction is expected to be completed by 31 January 2024. In the spring of 2024, we will open a major used car dealership in Vantaa in line with the Wetteri Premium concept. This enables us to respond to the growing demand for high-quality used cars in the Helsinki metropolitan area. During the rest of the year, 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.”