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The year 2022 started in nearly normal conditions in all our markets, and the outlook for the year was hopeful after the preceding pandemic years. In February, the operating environment and market situation changed suddenly due to Russia’s attack on Ukraine, which was reflected to consumers during the year as climbing cost of living and interest rates and as significant uncertainty about the future. The declined consumer confidence and increased uncertainty caused the market to contract significantly in all our operating countries in 2022; the contraction was stronger than ever before during Kamux’s operating history.
All in all, the year 2022 was quite challenging, and revenue growth was clearly below previous years. Our revenue increased to EUR 968.7 million mainly due to the increased average price of cars and the opening of new showrooms. Positive developments in the year included the sales of integrated services, which developed well throughout the year in all our markets.
We cannot be satisfied with the development in the number of sold cars or the weakened margin per car. In addition, Kamux’s profitability was negatively impacted by our work to adjust the inventory to better match the demand which fluctuated heavily during the year. The global shortage of components continued to prolong delivery times for new cars, resulting in limited availability of used cars in the market and a challenging purchasing market. The availability of used cars improved substantially in the second half of the year due to the generally weakened demand. Purchasing activity was also hampered by the rapid changes in demand between power sources during the year. The demand for electric and hybrid cars was strong in Finland and Sweden early in the year but weakened in early fall as electricity prices increased and insecurity about the sufficiency of electricity grew. Towards the end of the year, consumer demand was clearly more strongly focused on lower-priced combustion engine cars with low fuel consumption than in the previous years. In the exceptional operating environment, adjusted operating profit declined to EUR 17.5 million and was 1.8 percent of the revenue. The market situation also weakened predictability and we had to lower our outlook for 2022 twice.
Implementation of growth strategy continued
The year 2022 was the second year of our strategy period 2021–2023. Despite the market situation and consumer uncertainty, we continued to decisively develop our business and carry out activities in line with our growth strategy. Our strategic focus areas are omnichannel customer experience and services, efficient processes and scalability, utilizing data and leading with knowledge, and developing capabilities and continuous learning.
The Oulu processing center was completed in schedule early in the year. Our strategically important first real estate investment enables efficient and more precise car handling, and it also serves showrooms outside Oulu.
During the year, we focused on increasing showroom size in accordance with the strategy. Larger showrooms support scalability and more efficient processes in line with Kamux’s concept. The showrooms in Pori and Petikko, Vantaa moved to larger premises, we opened a new mega store in Malmö, Sweden, and we expanded our showroom network by opening new showrooms in Nyköping and Kalmar. In Finland, our showrooms in Olari and Niittykumpu were combined into one mega store in Niittykumpu, Espoo. In Germany, the Wentorf operations were transferred to the showroom in Nedderfeld.
During the strategy period, we are investing in developing and automating internal processes. 2022 was the first full year during which the Kamux Management System (KMS), the enterprise resource planning system (ERP) tailored to Kamux’s needs, was fully in use in all our operating countries. System adoption has been extremely smooth, it has made processes more efficient, and the system has fulfilled the expectations we had for it. During the year, we also developed our purchasing processes and leading with data in connection with inventory management, among other things.
We continued to develop the digital customer experience by redesigning the functionalities of our website. The seamless combination of the website, digital customer service channels and showrooms is an integral part of Kamux’s first-class omnichannel customer experience. We also updated Kamux’s brand identity to support the customer experience.
In 2022, we renewed and strengthened the composition of the Management Team. The country managers in charge of growing the business and developing country organizations were made part of the Management Team. Kerim Nielsen started in his position in Sweden in January, Jani Koivu in Finland in February, and Martin Verrelli in Germany in July. Juha Saarinen took on the responsibilities for the Group’s purchasing, logistics, and hub operations in April, and Jarkko Lehtismäki, who is in charge of the digital and ICT functions, started in September. Furthermore, we enhanced the capabilities of our organization and hired people into key positions to take on responsibilities for, among other things, training, purchasing, and digital and data competence.
All in all, I can say that the year 2022 was very challenging. However, Kamux’s operating model proved its effectiveness even in this exceptional operating environment. We have carried out well-timed strategic actions and development projects. Thanks to our operating model, our strong financial situation and Kamux’s professional personnel, we managed better than the market in a changed world.
Looking confidently to the future
I have had the privilege of steering Kamux for nearly 20 years. During these years, Kamux has grown from a one-showroom operation in Hämeenlinna to the largest used car retail player in the Nordic countries and an international listed company.
I want to express my warmest thanks to every Kamux employee for their contribution in 2022 with the market being exceptionally challenging. At the same time, I express my gratitude to the professionals who have worked for Kamux over the years and to our extensive partner network, with whom we have made Kamux the company it is today. I also thank Kamux’s Board of Directors for the support they have shown and our customers and shareholders for their trust.
CEO, Kamux Corporation