Kamux Corporation’s Interim Report for January 1—March 31, 2024: Revenue grew and adjusted operating profit increased significantly, actions in Sweden are progressing

Kamux Corporation, Interim Report, 17.5.2024 at 9:00

Kamux Corporation’s Interim Report for January 1—March 31, 2024: Revenue grew and adjusted operating profit increased significantly, actions in Sweden are progressing

This is a summary of Kamux Corporation’s Interim Report for January 1—March 31, 2024. The complete report is attached to this release and is also available at the company website at kamux.com.

The figures in parentheses refer to the comparison period, i.e., the same period in the previous year, unless stated otherwise.

January–March in brief

• Revenue increased by 7.9%, totaling EUR 240.7 million (223.1)
• Gross profit increased by 17.4% to EUR 24.4 million (20.7), or 10.1% (9.3) of revenue
• Adjusted operating profit (EBIT) increased by 227.0% to EUR 2.7 million (0.8), or 1.1% (0.4) of revenue
• Operating profit (EBIT) increased by 285.3% to EUR 2.3 million (0.6), or 1.0% (0.3) of revenue
• The number of cars sold increased by 5.3% to 16,137 cars (15,324)
• Like-for-like showroom revenue growth was 7.1% (-10.4)
• Basic and diluted earnings per share were EUR 0.03 (0.00)

Key Figures

*) Operating profit adjusted for special items related to strategic planning and consulting, taxes from previous financial years, own real estate operations and other items, totaling EUR 0.4 million for the first quarter of 2024 (1−3/2023: EUR 0.2 million and 1−12/2023: EUR 2.2 million including also special items related to legal processes,).

CEO Tapio Pajuharju:

"The used car market developed positively in all our operating countries during the first quarter, and the market seems to be returning to normal. At Kamux, the good sales momentum in Finland continued. In addition, in Germany our sales volumes developed favorably.

In Sweden, the market was quite strong, but the corrective actions related to previously detected misconduct had a significant impact on the turnover of sales personnel, which is why we were clearly lagging behind the good momentum in the market. We have succeeded very well in recruiting new sales personnel in Sweden, and our sales team is already close to the level of 2023. We have also made significant investments in the onboarding process, and although learning takes time, we believe that we will have a well-performing sales team in Sweden later this year. Other corrective measures were also continued in Sweden during the first quarter, and the full set of corrective actions will be completed gradually towards the end of the year.

With the positive development in Finland and Germany, the number of cars sold increased by 5% in the first quarter compared to the first quarter of 2023. However, the almost 8% increase in revenue relied very heavily on Finland, as we implemented a planned change in the car offering in Germany to match the Kamux concept, which led to a lower average revenue per sold car than previously.

Gross profit grew in all countries, compared to the comparison period. There are several elements behind the positive development in Finland, and the emphasis on profitability is visible in everything. In Sweden, the positive development of gross profit is a result of the measures implemented last year. In Germany, we continue to improve productivity, e.g. by further developing the centralized processing of cars. Sales and profitability of integrated services developed favorably. The adjusted operating profit for the first quarter was EUR 2.7 million (EUR 0.8 million). Operating cash flow was EUR -16.2 million.

In March, we published our updated strategy, which is anchored to placing the customer at the core of all activities and improving operational efficiency. These measures will help us achieve profitable growth. In addition to financial targets, an important indicator of the progress of our strategy is the Net Promoter Score (NPS), measuring the degree of customer referrals, where our long-term target is 60. In the first quarter of the year, our NPS result was 51, which is at a very good level within the car industry.

During the past quarter, our strategy implementation progressed according to plan. In Finland, starting from the capital region, we have upgraded some of our showrooms to match our new concept. At the beginning of the second quarter, Finland implemented a merchant model that places the customer at the center of operations, and we separated Kamux Worx, which focuses on utility vehicles, into its own business concept. Our new flagship showroom in Lakalaiva, Tampere, has been finalized in schedule and will have an official opening ceremony at the end of May. The development of sourcing activities continues, and we have opened the first new channels during the spring, focusing especially on international purchasing.

In Sweden, after the change in management, we have focused on clarifying processes and roles and responsibilities. In addition, we made decisions regarding updates to our showroom network during the first quarter. During the summer, the showrooms in Sundsvall and Helsingborg will move to bigger premises that are a better fit to Kamux's concept, and the unprofitable Norrköping showroom was closed at the beginning of the second quarter. We will continue the strong development of the control environment in Sweden and strengthen our resourcing, e.g. for internal audit during the second quarter.

In Germany, we have focused on changing the car offering to match our concept. The centralized processing of cars has progressed according to plans. We are further expanding our geographical coverage in Germany, and we will open a new showroom in Siershahn during the second quarter. We will also continue to upgrade the existing showrooms to match our concept, as well as to implement the measures aimed at improving productivity.

The change in the car trade and the challenges in the sale of new cars have also been partially reflected in the competitive situation during the first quarter. As car manufacturers are tightening their grip on the vendor networks, several dealers focused on representing certain brands have re-evaluated their business models and either decided to invest in selling used cars or to leave the industry altogether. Kamux's omnichannel concept is working well even in this market situation. In Finland, we have strengthened our position as the market leader in used cars, and even though we have lost some of our market share in Sweden, at the European level we are still the third-largest operator focused solely on used cars.

Once again, I would like to offer warm thanks to all Kamux employees for the good work during the first quarter of 2024. I would also like to thank all our customers and partners for their trust. We will continue to implement our strategy according to our plans."

Outlook for the year 2024 (unchanged)

Kamux expects its adjusted operating profit for 2024 to exceed its 2023 adjusted operating profit, which was EUR 18.0 million.

Significant events after the reporting period

On April 5, 2024, Kamux received a notification pursuant to Chapter 9, Section 5 of the Securities Markets Act (“SMA”), according to which the total holding of funds (Finnish Fund) managed by Danske Bank A/S (Copenhagen, Denmark) in Kamux Corporation shares and votes has decreased below five percent on April 4, 2024, and was 4.95% following the notification.

On April 8, 2024, Kamux announced that Juha Saarinen, the Group’s Chief Sourcing Officer and a member of the Group Management Team, had decided to leave Kamux in order to pursue a career opportunity outside of Kamux. Saarinen will continue in his current position until July 8, 2024.

On April 16, 2024, Kamux announced that it had completed the share repurchase program as announced on March 20, 2024. During March 21–April 16, 2024, Kamux repurchased in aggregate 135,000 of its own shares at public trading on Nasdaq Helsinki Ltd. for an average price per share of EUR 5.8361. The total purchase price paid for the shares was EUR 787,875.71. The share repurchases were based on the authorization given by the Annual General Meeting of 2023 for the Board of Directors, and the shares are intended to be used as part of the reward payments of the long-term incentive plan for the Group’s key persons for 2024–2026 and the Green Lions matching share plan for the Group’s key employees. Following the purchases, the Company held a total of 144,053 of its own shares, which represent approximately 0.36 percent of all shares.

Kamux Corporation’s financial reporting in 2024

Publication schedule for Kamux Corporation’s financial reporting in 2024 is as follows:

• Half-Year Report for January—June 2024                                  August 16, 2024
• Interim Report for January—September 2024                         November 8, 2024

News conference

News conference for investors, analysts and media will be held today, Friday, May 17, 2024, at Sanomatalo, Flik Studio Eliel, 1st floor, Töölönlahdenkatu 2, Helsinki at 11:00 EEST in English. CEO Tapio Pajuharju and CFO Jukka Havia will present the Interim Report.

The conference can be followed as a live webcast at https://kamux.videosync.fi/q1-2024

Participation by conference call:

You can access the teleconference by registering on the link below. After the registration you will be provided phone numbers and a conference ID to access the conference. If you wish to ask a question, please dial *5 on your telephone keypad to enter the queue.

https://palvelu.flik.fi/teleconference/?id=50049835  

For more information, please contact:
CEO Tapio Pajuharju, tel. +358 50 577 4200
CFO Jukka Havia, tel. +358 50 355 3757
Head of Communications & IR Katariina Hietaranta, tel. +358 50 557 6765

Kamux Corporation
Communications

Kamux is a retail chain specialized in preowned cars and related integrated services that has grown rapidly. Kamux combines online shopping with an extensive showroom network to provide its customers with a great service experience anytime, anywhere. In addition to digital channels, the company has a total of 77 car showrooms in Finland, Sweden and Germany. Since its founding in Hämeenlinna, Finland, in 2003 the company has sold over 500,000 used cars, 68,257 of which were sold in 2023. Kamux’s revenue in 2023 was EUR 1,002 million and its average number of employees was 885 in terms of full-time equivalent employees. Kamux Corporation is listed on Nasdaq Helsinki Ltd. For more information, please visit www.kamux.com