Wetteri Plc financial statements bulletin for the financial year 1 January to 31 December 2023
Year of strong growth
Wetteri Plc Financial Statements Bulletin 14 March 2024 at 8.30 EET
This is a summary of Wetteri Oyj's financial statement bulletin. The financial statement bulletin is attached in its entirety to this summary and can be read on the company's website at www.sijoittjat.wetteri.fi/en.
During 2022, the Wetteri Group (hereinafter “Wetteri”, “the Wetteri Group”, “the Group” or “the company”) carried out several corporate arrangements in preparation for its listing on the stock exchange. For this reason, the financial information for the financial year (January–December 2023) is not comparable with the financial information for the comparison period (24 February to 31 December 2022). The financial information for the comparison period (24 February to 31 December 2022) includes the comprehensive income and balance sheet of the Group company Themis Holding Oy as of its establishment on 24 February 2022, as well as the comprehensive income and balance sheet of the Group company Wetteri Yhtiöt Oy and its subsidiaries as of the implementation of the share transaction on 11 May 2022. Themis Holding Oy was established for the stock exchange listing and the preceding corporate arrangements, in which it acted as the acquiring party in terms of accounting. In the comparison period (24 February to 31 December 2022), it did not have any business operations until after the implementation of Wetteri Yhtiöt Oy’s share transaction on 11 May 2022. Because the financial information for the financial year and the comparison period is not comparable, this financial statements bulletin contains pro forma information concerning the comprehensive income of the Group and its operating segments for the periods 1 October to 31 December 2022 and 1 January to 31 December 2022. This pro forma information is hypothetical and has been prepared for illustrative purposes only. The financial statements bulletin and the pro forma information it contains are unaudited.
The comparison figures in brackets refer to the comparison period 1 October to 31 December 2022 and to the pro forma information for 1 October to 31 December 2022 or 1 January to 31 December 2022. Whether reference is being made to the reference period or to the pro forma information is mentioned separately.
Summary of the review period 1 October to 31 December 2023
- The Group’s revenue was EUR 131.1 million (EUR 74.8 million in October–December 2022; pro forma: EUR 77.5 million in October–December 2022).
- Adjusted EBITDA was EUR 6.8 million (EUR 2.3 million; EUR 2.3 million).
- The adjusted operating profit was EUR 3.3 million (EUR -0.2 million; EUR -0.2 million).
- The operating profit was EUR 0.7 million (EUR 2.4 million; EUR 2.4 million).
- The revenue of the Passenger Cars segment increased by EUR 40.2 million (+82%) year-on-year (pro forma October–December 2022).
- The revenue of the Heavy Equipment segment decreased by EUR 0.9 million (-6%) year-on-year (pro forma October–December 2022).
- The revenue of the Maintenance Services segment increased by EUR 14.6 million (+194%) year-on-year (pro forma October–December 2022).
Summary of the financial year 1 January to 31 December 2023
- The Group’s revenue was EUR 443.3 million (comparison period: EUR 191.8 million in February–December 2022; pro forma: EUR 291.0 million in January–December 2022).
- Adjusted EBITDA was EUR 24.9 million (EUR 9.8 million; EUR 13.8 million).
- The adjusted operating profit was EUR 12.0 million (EUR 3.3 million; EUR 3.9 million).
- The operating profit was EUR 5.4 million (EUR -2.3 million; EUR -4.0 million).
- The revenue of the Passenger Cars segment increased by EUR 112.5 million (+65%) year-on-year (pro forma January–December 2022).
- The revenue of the Heavy Equipment segment increased by EUR 8.2 million (+14%) year-on-year (pro forma January–December 2022).
- The revenue of the Maintenance Services segment increased by EUR 31.7 million (+71%) year-on-year (pro forma January–December 2022).
- Autotalo Hartikainen became part of Wetteri through a business acquisition on 7 March 2023.
- AutoPalin became part of Wetteri through a business acquisition on 1 June 2023.
- The car dealership business operations of the Suur-Savo Cooperative became part of Wetteri after the financial year on 1 January 2024.
- Suvanto Trucks Oy became part of Wetteri through a share exchange after the financial year on 29 February 2024.
Financial guidance
The company maintains the content of its financial guidance for 2024, but expresses the guidance in a range according to the disclosure policy:
- Revenue EUR 660 - 800 million
- Adjusted operating profit EUR 19 – 23 million
The company's medium-term (3 years) goal is to achieve a revenue of 1,000 million and an operating profit of 30 million.
Former expression
Financial guidance for 2024
- Revenue MEUR 730
- Adjusted profit MEUR 21
The company's medium-term (3 years) goal is to achieve a revenue of 1,000 million and an operating profit of 30 million.
Key performance indicators
| EUR thousand | Q4/2023 | Q4/20221) | Pro forma Q4/2022 | Change2) | 2023 | 20221) | Pro forma 2022 | Change2) |
| Revenue | 131,089 | 74,781 | 77,519 | 69% | 443,287 | 191,825 | 291,042 | 52% |
| EBITDA | 4,662 | 758 | 847 | 451% | 21,009 | 6,172 | 9,125 | 130% |
| EBITDA, % of revenue | 4% | 1% | 1% | 5% | 3% | 3% | ||
| Adjusted EBITDA3) | 6,783 | 2,257 | 2,346 | 189% | 24,918 | 9,788 | 13,804 | 81% |
| Adjusted EBITDA, % of revenue | 5% | 3% | 3% | 6% | 5% | 5% | ||
| Operating profit (loss) (EBIT) | 702 | -2,446 | -2,447 | - | 5,351 | -2,279 | -3,954 | - |
| Operating profit (loss), % of revenue | 1% | -3% | -3% | 1% | -1% | -1% | ||
| Adjusted operating profit3) | 3,343 | -196 | -164 | - | 12,030 | 3,322 | 3,860 | 212% |
| Adjusted operating profit, % of revenue | 3% | 0% | 0% | 3% | 2% | 1% | ||
| Profit (loss) before tax | -2,775 | -3,377 | -3,800 | - | -3,824 | -4,367 | -7,255 | - |
| Profit (loss) before tax, % of revenue | -2% | -5% | -5% | -1% | -2% | -2% | ||
| Profit (loss) for the period | -2,963 | -2,798 | -3,358 | - | -4,049 | -3,834 | -6,545 | - |
| Profit (loss) for the period, % of revenue | -2% | -4% | -4% | -1% | -2% | -2% | ||
| Earnings per share, basic (EUR) | -0.02 | -0.03 | -0.03 | -0.05 | ||||
| Earnings per share, diluted (EUR) | -0.02 | -0.03 | -0.03 | -0.05 | ||||
| Return on equity (ROE), % | -35% | -47% | -13% | -25% | ||||
| Return on investment (ROI), % | -15% | -15% | -9% | -11% | ||||
| Equity ratio, % | 16% | 20% | 16% | 20% | ||||
| Liquidity, % | 83% | 85% | 83% | 85% | ||||
| Average number of personnel during the financial year4) | 1,007 | 632 | 926 | 622 | ||||
| Invoiced sales of new passenger cars (pcs) | 848 | 549 | 3,322 | 1,394 | ||||
| Invoiced sales of new commercial trucks (pcs) | 43 | 55 | 181 | 143 | ||||
| Invoiced sales of used passenger cars (pcs) | 1,553 | 1,169 | 5,764 | 3,280 | ||||
| Orders: new passenger cars (pcs) | 699 | 636 | 2,862 | 1,916 | ||||
| Orders: new commercial trucks (pcs) | 17 | 26 | 127 | 89 | ||||
| Passenger cars: order backlog at the end of the period | 57,343 | 82,700 | 57,343 | 82,700 | ||||
| Commercial trucks: order backlog at the end of the period | 13,655 | 20,100 | 13,655 | 20,100 | ||||
| Passenger car repair shop: hours sold | 83,908 | 57,054 | 319,562 | 109,342 | ||||
| Commercial truck repair shop: hours sold | 30,295 | 31,173 | 110,759 | 74,514 |
1) Q4/2022 refers to the period 1 October to 31 December 2022, and 2022 to the period 24 February to 31 December 2022. The financial information for the comparison period is not comparable with the financial information for the financial year because the company did not have any business operations in the comparison period until after 11 May 2022.
2) Change refers to the change between Q4/2023 and pro forma Q4/2022 and the change between 2023 and pro forma 2022.
3) The adjusted EBITDA and operating profit do not take items affecting the comparability of the Group’s EBITDA and operating profit into account, such as significant non-recurring items of income and expenses and amortisation of the fair value of assets recognised on the balance sheet by means of acquisition calculations. The purpose of the adjusted EBITDA and operating profit is to improve the comparability of the Group’s EBITDA and operating profit between periods. The reconciliation of the adjusted EBITDA and operating profit is presented on page 20 of the financial statements bulletin.
4) The calculation of the number of personnel has been revised in the financial year so that the number of personnel at the end of each month has been added together, and the amount thus obtained has been divided by the number of months in the financial year. Comparative information has also been adjusted to match this calculation method.
Aarne Simula, CEO:
Growth strategy launched in 2023
“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. 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 car 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.”
The Board of Director’s proposal for measures concerning the profit for the financial year
The distributable funds of Wetteri Plc, the parent company, are EUR 64.2 million, including the profit (loss) for the financial year (EUR -0.6 million). The Board of Directors proposes to the Annual General Meeting that no dividend be distributed from the profit (loss) for the financial year, and that the profit (loss) for the financial year be transferred to retained earnings (losses).
Estimate of developments in 2024
Availability gaps for new cars have largely been resolved, and the order backlog will continue to be delivered during 2024. Economic uncertainty may have an impact on the demand for new cars in all vehicle categories, and new car registrations in the sector are expected to remain below the level of 2023. Recent signals of interest rates stabilizing and inflation turning downward may increase demand for new cars across all vehicle categories, and demand for used cars is expected to grow. Maintenance operations are expected to continue strong performance.
Annual General Meeting 2024
Wetteri Plc’s Annual General Meeting is scheduled to be held on 22 May 2024. The notice of the meeting will be published later by means of a stock exchange release.
Wetteri’s disclosure of financial information in 2024
Wetteri will publish its annual report and financial statements, corporate governance statement and remuneration report on 18 April 2023.
30 May 2024 Interim report for January–March 2024
28 August 2024 Interim report for January–June 2024
21 November 2024 Interim report for January–September 2024
Webcast 14 March 2024 at 3 pm
Wetteri will hold a webcast for shareholders, analysts and the media on 14 March 2024 at 3 pm. During the webcast, Wetteri Plc’s CEO, Aarne Simula, will present the result for 2023, provide information about the progress of the company’s strategy and discuss the market situation in the automotive sector. The webcast can be followed at https://wetteri.videosync.fi/q4-2023
Oulu 14 March 2024
Wetteri Plc
Board of Directors
Further information:
Aarne Simula, CEO, Wetteri Plc
Tel. +358 400 689 613, [email protected]
Panu Kauppinen, CFO, Wetteri Plc
Tel. +358 44 236 3740, [email protected]
Wetteri Plc – an entrepreneur-driven growth company in the automotive sector
Wetteri Plc is an entrepreneur-driven growth company in the automotive sector. The company engages in the retail sales of passenger cars, commercial vehicles and heavy vehicles, and produces maintenance and repair shop services for vehicles, from passenger cars to heavy vehicles. Headquartered in Oulu, the company has 49 locations in Finland. The company employs nearly 1,000 people, of whom around 70% work in maintenance and repair services. Wetteri promotes digitalisation in the automotive sector and is an important player on the common journey towards emission-free motoring. More information: sijoittajat.wetteri.fi/en/