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CEO’s review

Very profitable growth in expectional market situation

Our business model and quick ability to react carried us through in the exceptional and unpredictable operating environment

The year 2020 kicked off in a stable operating environment. Due to the corona pandemic, however, the whole world faced a new challenge. We at Kamux were also quickly in the midst of a very different situation during the first quarter. In practice, the exceptional operating environment left its mark on the whole year, even though the operating environment partly normalized during summer for a while. The cornerstones of our business model and our strong digital presence combined with home delivery of cars bolstered our business in circumstances that emphasized the importance of remote and online business

All our operating countries had various restrictions and recommendations in place for mobility and gatherings. We specified our ways of working flexibly and innovatively to ensure safe working conditions for our employees and a safe and reliable shopping experience for customers visiting the showrooms. In Finland, the restrictions put in place due to the corona pandemic varied from the lockdown of Uusimaa to guidelines for mobility and gathering and were supplemented in the fall with a face mask recommendation. In Sweden, measures taken focused on guidelines and recommendations given to avoid unnecessary movement and contacts.

Germany had  the strictest restrictions in place during spring and again in December, when the government’s extensive restrictive measures closed all brick-and-mortar stores that were not deemed essential for society. Furthermore, strict guidelines were given for movement and gathering. Despite the closure of showrooms, we continued business in Germany with the help of our digital channels. We quickly implemented a chat service and launched a completely contact-free purchase path in Germany.

During the spring and summer, used car sales recovered in all our markets as the number of new infections declined and restrictions were eased. The summer vacation season and increased domestic tourism were reflected in consumers’ car purchases. The corona year also showed the consumers’ interest in solving everyday transportation needs by buying a second car, as public transport options were not necessarily perceived as safe. At the end of the year, substitute arrangements enabled us to serve our customers well despite the increased number of infections, however, the situation was reflected in sales volume, especially in December.

Strong and very profitable growth

I consider the year 2020 quite successful as a whole, considering the very exceptional operating environment. We achieved a revenue of EUR 724,1 million, showing an increase of 10,0 percent from the previous year. Our gross profit increased by 15,0 percent, and our adjusted operating profit was 4.2 percent of revenue. Our business model showed its resilience also in exceptional circumstances, and our ability to react as well as our strong cash balance and financial position alleviated the negative effects of the pandemic on our operations. We implemented our strategy as planned, opened new showrooms and recruited personnel in all operating countries also during restrictions. In 2020, we opened a total of seven new showrooms.

Digital customer service channels stood out in 2020

Digital customer service and sales channels have been a cornerstone of Kamux’s business for a long time. It is clear that their significance increased during the past year as the corona pandemic restricted possibilities to visit showrooms as before. In 2020, digital channels were practically part of every Kamux customer’s purchase path. A combination of online and showroom shopping still prevails as the most popular option, with test driving and contracts handled face-to-face.

In accordance with our strategy, we focused on the optimization of the customer’s digital purchase path in 2020. The cross-selling model is a key element of Kamux’s concept, which made the transition to digital channels smoother, while the focus on digital sales further supported the positive development of Kamux’s cross-selling in Finland.

In accordance with our strategy, we continued considerable investments into leading with knowledge and intelligence and developed our digital customer and business processes further to respond to the requirements of international business operations.

Mobility needs and alternative power sources among the key consumer trends

The mobility needs of people and goods remained unchanged also in exceptional times. Smart shopping and ease of selling were highlighted in used car retail due to consumers’ growing price and quality awareness. Whether they need to sell or buy a car, consumers want to get the service they need from one place. Consumers’ interest towards cars with alternative power sources continued. In 2020, we imported a total of 2,652 hybrid, electric and natural gas cars to Finland, constituting approximately 29% of all cars we imported to the country. It can be said that we participated in renewing the Finnish car stock also in 2020 with, for instance, import cars using alternative power sources.

Kamux’s year 2021: focusing on growth

During the past year, like other actors in society, we operated in a completely exceptional environment, and I am quite pleased with our year as a whole. First and foremost, I want to thank all Kamux employees for their flexibility and ability to adapt to an unpredictable pandemic situation. A warm thank you also to our customers for their trust!

At the beginning of 2021, we announced Kamux’s renewed strategy that emphasizes leading with knowledge and utilizing data, improving process efficiency, and a seamless omnichannel customer experience. We develop our own capabilities for the good of the customer and invest in the continuous learning of our personnel.

Strong revenue growth defines our strategy, which aims for nearly doubling our revenue during 2021–2023. The market offers an attractive opportunity for expansion and growth. Profitability development during the strategy period is built on business growth and scalability.

 

JUHA KALLIOKOSKI

CEO, Kamux Corporation