Welcome to Kamux half year result presentation. My name is Juha Kalliokoski. I'm CEO and founder of Kamux. Good morning. My name is Marko Lehtonen. I am Kamux CFO. In case you are wondering about the sportsmen in the picture, this is from a brand advertising campaign we started in Finland in June. The campaign consists of TV and radio advertisement, and it focuses on Kamux wide offering of cars that suit different consumer needs. Here is agenda for today's presentation. Our vision is to be number one on used car retailer in Europe. Our vision to be number one in Europe is very realistic as we are already the third largest seller of used cars in Europe. The biggest one is Constellation Automotive Group, then AURES Holdings, third, Kamux, followed by Aramis Group from France and Autohero from Germany. This table includes European operators that focus on sales of used cars. The figures are from full-year 2021. During the second quarter, the effects of the war in Ukraine have become concrete also in our operating countries. The energy crisis, the high cost of fuel and inflation in general are the main reasons affecting the scale of, the sale of used cars. Despite the challenging market conditions, we succeeded well in increasing our revenue, which is our most important goal. This shows that our omnichannel strategy and concept works also in exceptional circumstances. The development of gross margin looks good due to an exceptional comparison period, and Marko will get back to this in his part of the presentation. When it comes to the development, of gross margin and adjusted operating profit in Finland and Sweden, we are not satisfied. Our main goal during this strategy period is growth of our international operations, and we have made some progress here. We have also finalized No. Martin Verlein began as a country manager for Germany on July 1st, and Jarkko Lehtimäki will begin as chief digital officer on September 1 st this year. Our revenue was EUR 246.8 million, and it increased 7.9% in Q2, and gross profit increased by 19.2% to EUR 24.5 million. Like-for-like showroom revenue grew by 5.5%, and our international operations grew external revenue in Sweden increased by 6.1%, and Germany 1.4%. The market for used cars has traditionally been quite stable even during crisis. The contraction that we have seen this year is stronger than during the COVID crisis in 2020 when the market bounced back quite quickly. This time, we have not seen a recovery yet. When we check about the figures, we see that Q2 2021 to Q2 2022, it was a -20.9% decrease in the markets in all countries together and in the COVID-19 times, it was 13.5%. In last year, country by country, in Finland, Q2 2021 to Q2 2022 was -12% in the market, the whole market, and in Sweden, -25%, and in Germany, -21%. It was very hard market for the used cars. During the second quarter, we have increased our market share in all our operating countries. There were several large transactions published within the automotive industry, mainly in sales of new vehicles. As an example, the Swedish Hedin Bil acquired Veljekset Laakkonen and Bavaria Laakkonen, one of the largest car retailer in Finland. Also in Finland, the Wetteri Group will enter the stock market via a share transfer deal. In Central Europe, the Swiss Emil Frey Group has acquired three units of Stellantis in Czech, Hungary, and Slovakia. Emil Frey is very big dealer in also in Germany's market. New passenger cars registration across the EU fell by 14% the first six months of this year. The big picture for Kamux is to be number one in the used car market, and there is lot of room to grow, and of course, sometimes just now, the market is totally headwind for the market. The increase in revenue is explained by higher average prices of sold cars. The share of EVs and hybrids has grown by 38%, and their average prices are higher. On its own, the growth rate of EV sales is considerably higher. We are not happy with the adjusted operating profit, which reflects a weakness in metal margin. This is due to a mismatch between cars in stock and demand, which have been addressing and will continue to do so. As an independent operator with no ties to specific brands, we are free to adjust our inventory to match the change in demand, both in power sources and specific models. The number of sold cars decreased, but less than the overall market, what I mentioned earlier. We managed to grow our share. This happened in all our operating countries. We sold 6.4% less cars than comparison period last year. We succeeded well in sales of intergrated services. The growth was 29%, so we are quite satisfied with this. We succeeded well in selling both financing services as well as Kamux Plus products. In Finland, particularly the renewed Kamux Plus services performed well as penetration grew from 19%- 28%. In Germany, the financing services penetration grew from 18%- 30%. I would also like to remind you that the income from financing services and Kamux Plus are distributed across the entire contract period. The total revenue of integrated services was EUR 12.8 million, and it was 5.2% from the total revenue. The status of showrooms as of today, we have 78 showrooms across the three operating countries. The Malmö showroom in Sweden was opened in May, and we are expecting two new openings during the third quarter as showrooms in Nyköping and Kalmar will be opened in September. Hopefully, we are also able to publish some news about the Germany soon. This concludes my part of the presentation, and I hand over to Marko for the financial review. Thanks, Juha. We issued yesterday evening a profit warning, considering the whole year guidance. Of course, in our business, the summer period is very important, especially, the summer months is what we are going at the moment. When we had the information about the trading and the profitability of the months is we have adjusted also our estimate for the whole year, and therefore, we reduced then the guidance for the rest part of the year concerning the turnover and also the operating profit. I will come back to the exact numbers a bit later in this presentation. As Juha was telling, the environment was extremely challenging at this quarter, second quarter. However, we were able to produce international growth in Sweden and Germany, although the growth percentages were lower than we had usually before. Especially in Sweden and in Germany, the markets were strongly declining, the used car market, and that of course had impact to us. There, of course, the centerpiece is the Ukraine war and the impact of Ukraine war, especially on fuel prices, but also energy prices. For example, in Germany, the gas prices, I'm not talking about the petrol or diesel, but I'm talking the natural gas prices. They have been a lot discussed in the media and what is happening with their pricing. What is positive that our revenue from the integrated services was growing well, 29.4%. There of course the finance and Kamux Plus development was very positive and of course that was across the board, meaning in all markets which of course I'm very satisfied with. I would also like to remind that when we look at the second quarter numbers, the operating profit in the comparison period were burdened by exceptional costs, EUR 3.9 million. That has to be understood so that in adjusted operating profit that doesn't have an impact. All the other numbers across the board have been impacted in the comparison period, meaning gross profit, meaning operating costs, meaning of course the ratios from the P&L and the balance sheet. Return on equity was 22.2%, and that was improving from the previous year. The equity ratio was 44.5%, also improving from the previous year. Earnings per share was EUR 0.07, and increasingly 96.2% from the previous year. I have been always underlining that the strong balance sheet is the backbone of the growth strategy, but it is also very essential for us in these difficult times when there are strong headwinds in the market. Concerning the key figures, I will not repeat every number, but I would like to draw your attention to the first half and the second quarter metrics. You can see that the second quarter was strongly impacted by the Ukraine war and its impacts. We can see that the revenue, EUR 246.8 million, growth 7.9%, was, of course slower than the whole first half of the year where we had EUR 484.1 million and growth was 10.4%. I was telling also the thematics about the gross profit, and there in the comparison period, we had a provision of EUR 3.7 million impacting the number in the second quarter 2021. As we said also in the statement, the gross profit and of course the profitability was impacted by the car mix and of course our actions to adjust the stock to really match the customer needs and customer interest at the moment. Of course, when we talk about the metal margin, so meaning in our language, the margin, pure margin, what we get from the cars, so there we had declines compared to the previous year. Of course, when we look at the gross profit per se as a percentage, that was growing compared to the previous year and, well, that partially was impacted, of course, the EUR 3.7 million provision in the comparison period, but also this year, the EUR per car has been slightly increasing. Of course also the average prices have been slightly increasing what was impacting there. What was also very positive, that in the second quarter and in the first half, the integrated services revenue was very strongly growing, so in the second quarter, 29.4% and in the first half, 27.5%, so much faster than in, than the revenue growth was. like-for-like growth was also positive and we can see that the inventory turnover in days were quite strongly impacted by the situation in the market. Of course, also, our own adjustment of the market mix can be seen there. Inventory turnover was 55.4 days in this period. Also, of course, the return on equity and equity ratio were in strong level, as I already mentioned. In our strategy period, we have been underlining the profitable growth. Of course, growth is important, but it's also important for us that we can grow profitable. I will go to our segments and start with Finland. We increased the revenue 9.8% compared to the previous year, and it was EUR 156.2 million. The sold units were declining 5.5%, but of course the average sales prices were rising and that was of course driving the revenue up. This was of course coming from the car mix sold, meaning more interest in the electric cars, EVs, and also plug-in hybrids. The car margin, as I was mentioning, was slightly declining, so we got less euros from the metal per car because of these actions, what we did to the stock and therefore gross margin decreased to EUR 17.3 million being 11.1% of revenue. Operating profit also similarly decreased by 19.4% compared to the previous year and was EUR 6.7 million. Also in Finland, the integrated services revenue increased to EUR 10.5 million being 6.7% of the revenue. Sweden, we can be very satisfied that in this very difficult market where the market was contracting 25%, we were able to increase our revenue 10.2% compared to previous year, and it was EUR 82.4 million. Gross margin was at previous year level at EUR 4.9 million or 5.9% of revenue. Operating profit was declining compared to the previous year and was, technically speaking, zero, so being 0% of the total revenue. Revenue from the integrated services increased to EUR 1.4 million being 2.2% of external revenue. Of course, in operating profit, we can see the strong impact of the gross margin, what we get from the cars. Of course, we have been also putting strong efforts to growth, and we have been also announcing new openings into Sweden, and we are preparing for those as well. Concerning Germany. In Germany, the situation was quite extraordinary. The market was declining 21%. In this market situation, our total revenue was decreasing 6.5%, but has to keep in mind that last year we had exceptionally high share of deliveries to other Kamux countries, so meaning internal sales due to the COVID restrictions in Germany. Therefore, this total revenue was extraordinarily high. When we look at the external revenue, the external revenue increased by 1.4% compared to previous year. We were able to keep the good margin per cars and of course increase the integrated services revenue and therefore gross margin increased to EUR 2.3 million and the operating income was slightly positive, EUR 0.1 million. I would also like to remind that in Germany, we are investing for the growth also in the future. As Juha was mentioning, the integrated services revenue and the penetration was very strongly developing in Germany. What we saw in the German market that in this COVID-19 crisis period, the demand for the financing services was dropping strongly, and it was staying for a while quite low. Now in the last two quarters, it has been rebounding back strongly. Penetration was now 30%, which is big growth compared to previous year, 18% penetration. If you look at the net working capital and the inventories, we can see that from the CFO perspective, this was of course developing into the wrong direction. There of course, the situation in the markets was strongly affecting that. We have been further also developing the usage of data, how we guide the purchasing and especially how we guide the purchasing alongside with the demand. That work is going well. We see that the most wanted cars purchasing market is still strong and very tight. There are difficulties to get those cars because of the weaknesses in the new car deliveries. This is especially in the plug-in hybrids. I would also like to remind that in the comparison period the net working capital was strongly impacted by the Finnish customs system project which was delaying their car tax decisions. That has been now, technically speaking, evaporated away so meaning that that impact for the comparison period will be diminishing in coming quarters. This challenging situation in the market and, of course, the weakened turnover of the stock has been, of course, seen also in the operating cash flow in the operating activities, which was EUR 3.6 million. Of course, also the cash flow itself, the biggest driver there is the changes in the stock and, of course, our stock turnover, how this is developing. Concerning our investments, in the second quarter, we continued our investments for the growth and investments being roughly EUR 0.5 million, where most of the investments, roughly EUR 0.3 million, was going into the immaterial investments, meaning digital, and then EUR 0.2 million for the stores or developing the store network. We have been strengthening our own digital organization, and that can be also seen that the group function cost has been increasing, but also the investment has been declining, and meaning that we are currently doing ourselves more in this area. Concerning the dividend from last year, so the annual general meeting decided that dividend of EUR 0.20 per share will be paid, and we have now paid the first installment in April, EUR 0.08 and 0.12 EUR will be paid at the end of October. I will move to the strategy outlook and financial targets. In this strategy period, the big focus there is the growth and accelerate the growth. What we see is that there is still huge market opportunity for the strong digital and international retail chain. Of course, we see that the profitability development is built on business growth and scalability during the strategy period. With this picture, I would also like to remind that in our strategy, omnichannel customer experience is in the centerpiece. We believe in strong digital experience, and we are developing it constantly and store operations. I would like to recap a few areas of the strategic development and explain what we have been doing in the last quarter with this. If we start with the seamless omnichannel customer experience, this Kamux plus renewed version has been now taken really well with the customers, and we can see that the penetration in Finland has been improving. We are also listening very carefully to our customers about our web pages and how they feel and how they see our digital environment. We have got now roughly 660 proposals. Of course, we are making all the time changes based on the customer proposals for this. Concerning data and leading with the knowledge, I would like to remind that the KMS, so Kamux Management System, is now implemented in all operating countries. Of course, with this joint platform, it enables the better utilization of data and of course sharing the stock across the border. This system is tailor-made for us and for the used car business, and we are constantly developing this. I was already mention that we have been further now advanced our usage of data, especially in the purchasing activities and to guide the purchasing alongside with the demand. Concerning the efficient processes, scalability and store strategy, we have now communicated and also worked with many projects in Sweden with the store openings and also in Finland, when we have been moving to larger premises, in our store operations. Concerning the people operations, we have now launched Kamux Passport program, and this is a program which enables career path in our company internationally inside the group. Meaning people who have relevant skills have also good possibilities to work in other Kamux operations in other countries. This is of course very exciting opportunity for our employees. We have already first people in this program going to different countries. We have also put more effort to training, and we have increased the amount of the trainers in the company. Financial targets for the strategy period are unchanged. Revenue growth of 20% annually, increasing adjusted EBIT and adjusted EBIT margin over 3.5%, return on equity over 25%, and target to distribute dividends of at least 25% of net profits. If we see now the first half, the revenue growth has been 10.4%, adjusted operating profit EUR 10.2 million compared to previous year EUR 12.4 million, adjusted operating profit margin 2.1%, and return on equity 22.2%. Dividend from the year 2021 was 41%. About our outlook for the year 2022, which we updated yesterday. In 2022, Kamux expects its revenue to be over EUR 1 billion, and we expect adjusted operating profit to be approximately EUR 23-30 million. Although Kamux is not exposed to immediate Russia-related risks, the war in Ukraine and its effects have weakened the consumer confidence, and this has led to a strong contraction in the demand for used cars in all Kamux operating countries from March 2022 onwards. Now I will then summarize this all. It is essential to remind that during the second quarter, the effects of the Ukrainian war, the war in Ukraine, have really become concrete, and they have big impact to the used car market. Especially the energy crisis, cost of fuel, and inflation has been reason which has been affecting the used cars business. Revenue increased by 7.9% to EUR 246.8 million. Gross profit increased by 19.2% to EUR 24.5 million. Adjusted operating profit decreased, and it was EUR 4.5 million or 1.8% of revenue. Like-for-like showroom revenue grew by 5.5%. International operations grew. External revenue in Sweden increased by 6.1% to EUR 66.4 million, and in Germany by 1.4% to EUR 24.2 million. Thank you for your attention, and we are now happy to answer your questions. Thank you. If you wish to ask a question, please dial zero-one on your telephone keypads now to enter the queue. We are taking first questions from the audience here at Sanomatalo. Jussi Koskinen. Question related, integrated services. What was the reason of huge growth, 29%? Is the new level of integrated services durable? Can that last longer? Thank you. If I start this Kamux plus new model what we launched this spring or winter, it increased our revenue and also the focus for the sales of the finance in Finland, Sweden, and Germany. As Marko mentioned that also the German market little bit changed back to the also the customers that they needs the finance. Any further questions from the audience here? No. Okay, then we shall take questions via the chat, which we have a few. Firstly, a question, operating OpEx and the number of employees is up sharply compared to one and two years ago, while gross profit is growing much lower. What measures will you take to address and reduce OpEx and to increase efficiency? For how long do you expect the turbulent market to remain before stabilizing and eventually start growing again? If we start with the anatomy of the crisis, as Juha was showing, the COVID-19 crisis was, let's say, very sharp V, so meaning that the market was declining shortly and recovering very fast. Currently is pretty clear that we are not in this V model. This is more like U model, and where we are in this U, it's difficult to say at this point of time, so nobody can estimate that. Of course, it has impacts to the used car market, so meaning that we are still waiting to see when the recovery there will be coming. I don't want to speculate or estimate when that could be at hand. Of course, when we look our own plans, and of course, when we look our own targets, they were not. We didn't, of course, expect the war in Ukraine and so on, so meaning, as I was mentioning that, for example, in terms of stock, so the stock turnovers impacted there. You could also translate it other way that the stock for those that turnover was slightly too high. As we were saying, that we were doing a lot of actions to really adjust the stock, so and that was also costing something in the gross profit. Of course, the tactical or operative things and adjustments we are doing on the constant basis, and we are on top of that. Yeah. Okay. Next question. How do you see higher interest rates affecting financial services demand and profitability? You had a nice performance there. Are you paying salespeople more relative to integrated services revenue? If I compare because my experience is over 25 years in the car business and also used car business, there is many types of crisis in those years, and I don't see or we expect that the consumer needs financing now and also next year and so on, and we don't see any big changes between that. Thank you. Has the lower market activity meant increased price pressure from competitors? Not from the competitors, but the consumers don't know so well what is the best type of cars or fuel type just now to buy, and this is maybe the biggest issue in the market. Very good. Do we have some other? No. Maybe I could shortly add that. Still, if we look at the purchasing side of the market, we see that is still especially for these wanted cars that is very tight and, of course, we don't see there any price pressures in the supply side. Of course, we can say that the focus on low consumption cars, those cars are interesting. It doesn't matter if it's a hybrid or diesel or petrol cars or of course EVs. There was actually a question online about the buying market, which is indeed difficult. Part of the question was about whether it's going to become easier next year. Anything you would like to comment here in terms of anticipation of the buying market? It very much goes hand in hand with the new car deliveries, and No, as we have been seeing in the first half 2022, there was no increase on the supply side. Difficult to say. There are very different expert opinions when the new car deliveries could speed up next year or year after. I cannot know that myself or. The metal margin in Finland was unusually low while Sweden and Germany were at more satisfying levels. To which extent the Finnish levels were due to diesel cars in the inventory losing value, and to which extent tight competition? How would you describe the competition level at the moment in all markets? If you think about market by market and start from Finland, the market situation, we can say maybe it's unchanged. It's the same competitors that we have earlier also. The big picture in all countries is the biggest companies take the market share, and the small ones and consumer-to-consumer trade decrease. This is a longer period if we take a longer period back, for now. In Sweden, there is also the same situation as in Finland. There is the same competitors that we saw also. In Germany, there is also the same situation and biggest companies grow, and the smallest ones. Maybe the biggest loser is or who lose the market share is the middle size or small branded dealers. Okay. Initially you stated that Kamux goal is to be number one used car retailer in Europe. Do you think you can achieve that by being present only in three European markets? Do you have any medium to long-term plans about further expansion and how to achieve that? When we published our strategies period March 2021, we said that 2021 - 2023, we focus growing in these three countries where we are, and after that, or at the end of this period, we watch out of those three countries. This is the situation still now. Of course we want growth also the other countries than these three, but what is the timetable? Because in these markets is so much potential for us to grow. Okay, for metal margin impact, how has consumer demand changed? What type of cars are now in demand versus previously? Have the changes been different in Germany versus Nordics? When this Ukraine crisis started, it was totally dropping in all types of cars. Then it focused more about the diesel cars, and then diesel cars are coming back. Now we see that the cars which are low consumption cars interest the customers, because it's very important. This is 4L per 10km or 10L. Now when there is a lot of news about the electricity price, 3x, 5x or 7x higher than last spring, it gave also impact for EVs. We believe that the EVs are going up in the long- term. between this, there is many types of situations. That's why it's very important that the inventory is very well handled. Okay. Did you see a difference between markets in this consumer demand for types of cars, or is it pretty even across the three markets? In Nordic countries, Finland and Sweden, customers are more interested in hybrids and EVs when we compare to Germany, and there is more diesel and petrol cars. Because there is a big effect of the when you buy a new EV, the government aid for the customer about that, and this decreased the purchase price of the new EV car. Will you take any measures to reduce OpEx or headcount? As I was saying, I think in my previous answer that we are constantly doing tactical or operative decisions concerning stock or the issues what we do. The answer is, according to my mind, yes. What I say is that we are not going to cut costs like with the big. There is not going to be any big cost-cutting program or that we would reduce the employees. Of course, there is a lot of things what we can decide to do now or do later or so on. That will be in the agenda. Okay. You have indicated previously that KMS had a slightly difficult rollout. How is it going now? We have stated that it is operating in all countries. Anything you'd like to comment about its performance? We take it in use December 2020 in Germany, May 2021 in Finland, and November 2021 in Sweden. As we said earlier in the webcast that it went very well to take in use in Sweden, and we don't have any problems with the KMS. One final question from here, and then we will check if we have a question from the telephone line. The market share in Sweden has not been growing since a couple of quarters. Why and how to turn back to winning market shares? We did mention that we have taken shares in Sweden. Yeah. Yes. Yes. Looking at the public statistics or the publicly available data, our deliveries in cars were declining less, much less than in the market. I think we have there a difference of opinion. Yeah. It's totally right. Thank you. Did we have questions via the telephone line? Currently, we have just had one question come through. Bear with me just one moment while we register that. Please go ahead. Okay. The first question comes from the line of Maria Wikström of SEB. Please go ahead. Your line is open. Thank you. This is Maria Wikstrom from SEB. I have a few questions. I think you talked about the metal margins in Finland. Just for me to get because I think, I mean, this was the theme that we talked about in Q1 as well, and I kind of thought at the time that, I mean, this is something that you can basically turn around by like being more proactive with your sales team that, I mean, with the higher car prices, I mean, the sellers need to be able to take higher margins as well. Now it seems that this is not that easy to turn around. What's your view that, I mean, if we... Like, when should we start expecting an increase in the hardware margins in Finland, or is that the market situation is so tight that it's not possible to do during this year? If I look our statement, what we issued today, we have been starting to do that work. It has had already the impact in the second quarter. It has been burdening the gross profit per car, especially on the metal side. And there, of course, in the context as Juha was describing has been move to the lower consumption cars and also, let's say, the share of different power sources what we have. We are on the way there. I think the key question here is that what is happening in the market and where the interest is going. I think we are getting there. How far we are, time will tell. If I read you right, I mean, you first need to get rid of the inventory that is currently maybe not that attractive for consumer, and then we can start seeing a kind of like a repricing or higher metal margin as well. Is that how I should read it? I wouldn't like to put words in your mouth, but if I look at this from the other angle and look at it from the perspective of outlook what we gave yesterday, so that is maybe now our latest expectation or estimate what will happen in the second part of the year. Okay, fine. The second question, I'm curious. I mean, that you would share your views in how the consumer behavior because it's, I mean, obviously we've seen a very big and very instant drop in the number of used cars sold in the market. We still haven't really hit the consumers yet with the increase in the electricity bills that we are going to see in the second half of the year. Then if we would kind of like look into financial crisis, I think in Germany, the used car market came down just 10%. I mean, would that be a good proxy, I mean, for the used car markets, I mean, going forward as well? How do you see the consumer behavior? I mean, how would this, like, all this inflation should, like, parallel into the, like, used car demand or are people still changing the car even when they feel, like, pressure from higher energy bills as well as, I mean, food costs? As I was, I don't know if, Maria, you were in the earlier part where I was describing this anatomy of the crisis, and it is really difficult to say that, in which part of this U form or whatever letter this will be we are currently, and I don't want to speculate that. Of course, there are a lot of things in the consumer minds, but I would also like to think it from the other side of the coin and think that, if the people have issues or the purchasing power is going down, used car is a good choice. Of course, the mobility needs of the people are not disappearing. Meaning people are having mobility needs, and also we hear and see that the people are going back to the offices, so meaning there will be needs for the transportation, personal transportation. I think that this, in that perspective, the picture is not so bleak. Surely there will be changes on the consumer preferences between the cars and power sources what they see. Very good. Thank you, Juha. It is now time. Okay For us to conclude the English part of the news conference.