Kamux Oyj

Good morning. My name is Katariina Hietaranta, and I would like to welcome you to Kamuksi's quarter two results webcast. Our CEO Juha Kalliokoski and CFO Enel Sintonen shall present the results first, after which we shall have a Q&A session. For the Q&A, we shall first take questions via the teleconference and then move over to the chat line in the webcast. Please go ahead, Juha.

Thank you, Katariina. Good morning. Let's get started. Here is our agenda for today. As usual, we will begin with an overview of the quarter. Then take a look at the market development before looking at each operating country separately. Then Enel will present our financial development in more detail. And as usual, we will finish with the Q&A session. There was a significant shift in demand between powertrains in Q2, affecting especially demand of diesel cars. In this situation, we focused on inventory turn. We were able to grow both the number of cars sold and revenue, while the market declined in all operating countries. However, we were tightened as the selling prices of diesel cars decreased due to the low demand. This led to gross margin decreasing from 24 million euros to 20.8 million, mainly due to the lost margin in diesel cars. Even though our costs were 0.8 million lower, this was not enough to keep the adjusted EBIT at the last year level. And it decreased to 0.6 million euros. Revenue from integrated services was 12.8 million euros, which is 5.8% of total revenue. Our customer satisfaction was again at an excellent level. NPS for the whole group was 66 in the quarter. Towards the end of the quarter, consumer confidence started to improve. However, this was not yet visible in used car sales. The used car market conducted during Q2 in all our operating countries. Sweden was down by 1.4% and Germany by 3.2%. In Finland, the total market was down by 2.4% for the quarter. Within the quarter, especially May, was very, very challenging. In Finland, the market declined 7.2%. The good news of the quarter was that we reclaimed our position as the largest seller of used cars in Finland in terms of number of cars sold. This applies to both to the quarter and the first half of the year. In Sweden, despite the difficult market, our volumes grew and we gained some share. And in Germany, where the market also contracted, our share remained small. In terms of new car registrations, the number of new cars registered across Europe grew by 5.7% during the first half of the year. There were some changes in the showroom network during the quarter. We decided to tighten our showroom network in Germany and closed two showrooms in the Hamburg area. Aresbuk and Stare were closed at the end of June. The cars and salespeople from these showrooms moved to the Nettelfeld showroom. There were no changes in the network in Finland and Sweden. We evaluate our network continuously to check it against current and future capacity needs. Thanks for the short term nature of our lease agreements, we are able to make changes in the network relatively flexible. Now we will look at each country in turn. In Finland, the number of cars sold during Q2 was at last year level. Average prices were slightly lower and therefore revenue decreased 1.4%. Our focus was ensuring sufficient inventory return. The weakened demand of diesel cars had a significant impact on sales prices and thus margins. We are not satisfied with the penetration rates of integrated services, which have decreased. The penetration rates for integrated services decreased. Customer satisfaction on the other hand is in an area where we continue to do well. In Finland, NPS for the quarter was 68 and for the month of June it was as high as 70. Here are some recent examples of our marketing activities in Finland. At the end of May, we had an advert on the front page of Helsinki Sanomat telling about the high net promoter score and recommendations we had received in Finland. Kamuks Finland has also been the official advertising partner for MTV's World Rally Championship broadcasts. This partnership included a strong presence at the World Rally Championship event in Jyväskylä with Camux branded vehicles. In Sweden, our performance was relatively good and we are getting back on track. However, there is still a lot to do. The Swedish market also contracted and competition remained tight. The Swedish krona declined during the quarter, impacting sales inside the Swedish market negatively. We were able to grow, however, and the number of cars sold increased significantly, getting closer to 24 figures. There were headwinds with the declining demand of diesel cars in Sweden, as in all our markets. However, thanks to the volume increase, external revenue grew by 40% and gross margin also grew. Penetration rates of insurance services and Kamux Plus improved. Niklas Eriksson has now been heading the team in Sweden since early April and it has been good to see how he has taken ownership of the business and the team is working well together. In Germany, we continue to have challenges. However, we continue to focus on inventory management and operational execution. The market contracted also in Germany. The headwinds against demand and pricing of diesel cars affected our German business even stronger than in Finland and Sweden. Even though sales of used EVs is increasing in Germany, it is still a very small part of our business. However, the number of cars sold in Germany grew. The average price of sold cars was lower than prior year as planned and thus the revenue growth was at 15%. Adjusted EBIT decreased as a result of the low margin of diesel cars. As mentioned earlier, we closed two showrooms at the end of June, centralizing our Hamburg area operations in the Nettelfeld showroom. And now I hand over for Enel more details in figures. Here you are.

Thank you, Juha. Summarizing our financial performance in the quarter, Juha already referred to many of the numbers. Sold volumes and revenue grew, and growth was generated in Sweden and Germany. Sudden shift in demand for different powertrains urged us to accelerate inventory turn. That was a choice we did. and that required us also to adjust pricing, especially for diesel passenger cars and also hurt our margins. It was the single biggest reason for decreased profitability, breaking the trend of four consecutive quarters of improved margins. In Sweden, a number of financial ratios, sold volumes, revenue as well as gross margin improved. Our work on business fundamentals and daily operating practices started to show also in financials. In Germany, volumes grew. However, profitability continued to be at a low level, and we relentlessly continue working on with the solutions and with the improvements. Inventory management continues to be our profitability and throughout the year inventory levels have solidly followed seasonal cycle. Inventory turnover in days show improvement. When we look at the operative cash flow it reflects most part inventory cycle. Cash released from networking capital was 12.3 million euros to comparable period. Our cash balance at the end of the quarter was 8.8 million euros and we have 15 million euros available unused credit facilities. Net debt was very much lower compared to last year and it is now 49.5 million euros level. Equity ratio was close to 50 percent level. And here are our key numbers. As said, revenue grew, gross margin declined. All major categories of operating expenses declined compared to previous year. And return on equity and equity ratio improved slightly. Looking at the figures, when we had a market of sudden shift in power trains, we turned our focus into inventory turn. We ensured right size of inventory and solid financial position. We can see here trend in volumes. Volumes increased in a quarter driven by focus on inventory turn, as said. And you can see here the growth in Sweden and Germany were substantial. Finland was at the previous year level. However, we of course every day remind ourselves that our volumes few years back remind us of the capabilities we have and also the ambition to go back to growth continues to drive us. Our integrated services revenue declined slightly and that slight decline spread across different services. Here we can see revenue trends from quarters and recent years and drivers of the trends were underscored earlier and we are set firmly focused to regaining volumes and improving profitability. Cash flow minus 10 million euros in H1 and it was seasonal build-up of our inventory. That was the key driver and we can see also here the inventory increase about 20 million affecting the cash flows. We are satisfied that we both started and also closed the quarter with the right size of inventory. Our outlook for 2026 remains unchanged. We expect adjusted operating profit for 2026 to increase from the previous year.