Wetteri (WETTERI) Q3 2024 earnings summary

Executive summary

• Net sales grew 30% year-over-year to €395.3 million in Jan–Sep 2024, mainly via acquisitions, but operational performance weakened due to historically poor market conditions and low consumer confidence.

• Adjusted EBITDA for Jan–Sep was €17.0 million (down 3% year-over-year), and adjusted operating profit was €5.4 million (down 35%).

• Announced sale of Wetteri Power Oy to Persson Invest Ab for an estimated €32.5 million, closing expected 31.12.2024, marking the largest transaction in company history and strengthening the balance sheet for future growth and acquisitions.

• Transaction enables further development and growth in both passenger car and heavy equipment segments.

• Focus remains on strategic acquisitions, organic growth, and efficiency improvements amid challenging market conditions.

Financial highlights

• Q3 2024 revenue was €119.6 million, up 8% year-over-year; adjusted EBITDA €6.2 million (down 9%), adjusted operating profit €2.1 million (down 35%).

• Jan–Sep 2024: EBITDA €15.0 million (down 5%), operating profit €1.7 million (down 61%), profit before tax €-7.3 million.

• Earnings per share from continuing operations was €-0.04 for Jan–Sep 2024.

• Equity ratio at 17%, net debt €137.2 million, gearing 377%.

• Significant impact from IFRS 16 and 15 items on liabilities, including vehicle inventory financing and lease obligations.

Outlook and guidance

• 2024 revenue guidance: €520–640 million; adjusted operating profit: €12.8–15.6 million.

• Medium-term (3-year) targets: €1 billion revenue and €30 million operating profit.

• Sale of Wetteri Power Oy does not impact 2024 guidance; new growth expected from brand expansions and market recovery.

• Market for new cars expected to recover in 2025 with a forecasted 10% increase in demand; used car and maintenance business expected to remain strong.