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CEO’s review

Significant investments in accelerating our growth

DEAR READER,

In 2021, the operating environment continued to be exceptional due to the prolonged corona pandemic. Despite the restrictions and challenges imposed by the operating environment, our performance was excellent, and our business continued to grow in all our operating countries. In Germany, corona restrictions were stricter than in the other markets and they were in place almost throughout the year. Sales were heavily focused online, and in the first half of the year, we served our customers in Germany primarily through our digital channels. Society did not impose such restrictions in Finland and Sweden: sales continued almost as normal, and special attention was paid to the health and safety of our customers and personnel.

A global shortage of components and chips delayed the delivery of new cars, which was also reflected in used car retail. Due to component availability issues, there were significant delays in the production of new cars, and consumers have been forced to wait for months for their car delivery. As a result, used cars have entered the market more slowly.

In the used car market, this has materialized as higher procurement prices for used cars, which has also increased their consumer purchase price. In Kamux’s operating model, market price is always used when buying and selling a car and inventory turnover is rapid. This means that the price development has not had a significant impact on profit. Thanks to Kamux’s professional sourcing we have fared extremely well in the purchasing market and have been able to offer cars that are of interest to the customers at competitive prices. I am pleased to say that we have excelled at adapting to the circumstances of each of our operating countries, exceeded our growth target and continued doing business with great success also this year. Kamux’s concept and seamless omnichannel customer service have proved their strength also in 2021.

During the strategy period 2021–2023, we will step on the gas and aim for strong growth

In the first quarter of the year, we announced our strategy for 2021–2023. In accordance with our strategy, we will move up a gear to accelerate our growth. Our target is to seek growth particularly from our international business and nearly double our revenue during the strategy period. Profitability development during the strategy period is built on
business growth and scalability.

We made significant efforts to reach our targets during the first year of the strategy period. One of our major efforts was the renewal of our car retail ERP system. The system was first launched in Germany at the end of 2020, and it was introduced in Finland in the second quarter of 2021. Kamux Management System, which has been tailored to our needs, offers a modern platform for streamlining and developing our operations and scaling our business. The system supports our international growth. The renewal brought along significant changes to our internal ways of working as well.

It is never straightforward to implement a new system and have a large number of users learn to use it. The deployment challenges in the early stages of the project were most evident in our largest operating country Finland. With the help of the learnings from the Finnish implementation, the system was successfully deployed in Sweden in late 2021. Kamux Management System is now in use in all of our operating countries, and it offers common tools to our personnel regardless of the market.

During the year, we announced our first strategic real estate investment, which was finalized in February 2022. We have built a showroom and car processing center in Oulu, Finland. The processing center enables more efficient handling of cars, such as inspections, repairs, sales preparations, and logistics. We aim to serve our customers even better and to offer consistent, comprehensive, and highquality information on the cars we are selling.

In 2021, we opened a mega store in Gothenburg. The larger showroom size in a geographically centrallocation supports scalability in accordance with our strategy and improves the efficiency of the processes integrated in the Kamux concept.

We invest significantly in the development of our services. In 2021, we piloted new service models such as Kamux Huoleton (“Carefree”), a service where the customer pays a fixed monthly fee to have access to a car.

Business grew in an exceptional operating environment

All in all, the past year was once again exceptional, but we were highly successful especially in terms of our growth. Our revenue amounted to EUR 937.4 million, showing an increase of 29.5 percent from the previous year. Our gross profit increased by 10.6 percent, and our adjusted operating profit was 3.3 percent of revenue. Our profitability was
impacted by the provision we had to make due to the legal processes we initiated in Germany against
a local procurement partner. We are demanding a refund of payments related to purchasing agreements made to the procurement partner totaling approximately EUR 3.7 million.

Towards the next year of growth

Our ownership base grew considerably during the year. At the end of 2021, Kamux had a total of 23,726 shareholders. A warm thank you to all our owners for your trust. I would like to warmly welcome our new shareholders on a common journey towards our vision to be the #1 used car retailer in Europe.

Finally, I want to point out that once again, our personnel played a crucial role in enabling our growth. I would like to thank each Kamux employee for their joint efforts and especially for their contributions to the deployment of Kamux
Management System and for adjusting to various arrangements amidst the pandemic. My sincere thanks for the past year also to each of our customers and partners. In 2022, we will continue to follow our path to growth, guided by our strategy.

JUHA KALLIOKOSKI

CEO, Kamux Corporation