A turning point is beginning to happen, signs of a more positive situation are in the air. The challenges won’t disappear all at once, but the most important thing is to get the direction turned upwards, and now is the time for that📈
I somewhat disagree about Wetteri’s future.
Firstly, I don’t quite understand why they are scrambling to acquire some Chinese ‘ping-pong’ car brands for sale. In a small market, there are nothing but costs. Profits are unlikely to ever materialize, but costs are sure to be realized.
The sale of Power. The most profitable part is being sold off. Has the financier wanted to secure their remaining claims? Otherwise, it’s unlikely the best part would have been offloaded.
Interesting hires. A guy who waves a red pen is put in charge of business operations. Well, for the investor, it means contracting business operations, i.e., reducing cash flows from already existing negligible resources. I would have imagined that a person would be hired who has personal experience even selling a pencil.
A glimmer of light was the rumor about Kakkonen acquiring shares. If it’s true, what did Kakkonen see in the purchase? That remains to be seen.
Although Wetteri has tried to take a strong role as a new car dealer, it probably won’t go far at the regrettably low market level.
Yesterday, on my way back to Finland, I listened to an interview with Johanna, Business Director of K-Auto.
They spoke with Antti about the recovery of new car sales, and Johanna responded that their (Management Team’s) view on the matter is that this recovery will take years, and therefore they do not believe in a quick recovery.
Furthermore, they saw the greatest growth potential in the used car market.
It will be interesting to see in the long run who is in the right boat as large chains rework their strategies.
Below is a link to the video.
Considering Finland’s economic situation and growth forecasts, it is difficult to believe that new car sales could grow faster than general economic development. Furthermore, new cars are much more expensive per unit than before electrification. What is certain is that the import of lightly used cars (2-5 years old) will continue to increase. This will erode new car sales.
Do you seriously mean that over 85.000.000€ of inventory consists only of spare parts.?!" Precisely every single jalopy, down to the owners’ work clothes, has been recorded as inventory. The depreciation of inventory was at a 1% level, approx. 850.000€. One can only guess at what price the used cars have been recorded on the balance sheet? I believe there is easily a multi-million bubble in the inventory.
Exactly so, unless they are already the property of the financing company.
The admin may move this to the correct place if they wish, but as an owner of a few Kesko shares, I’ll comment a bit on Johanna’s interview.
In my opinion, Johanna inadvertently answered what Kesko’s car business problem is. I believe it’s leadership, or rather, the lack thereof. When the term (our) management team’s view is used, a leader must have their own vision, and only then the management team’s vision. At the same time, talking about changing the structures of the car business means a new game of musical chairs in Kesko’s case. The same people are rotated into new positions, and everyone invents something new in the hope of their own bonuses, from which more money can be charged. That’s how it goes, but it seems they’ve already hit a dead end. It’s strange that people aren’t hired from outside the company, even though the difficult situation in the car business has made it certain that qualified people are available.
Kesko’s latest growth strategy involves used cars, truly original. Did the inventor of that idea get an award? Kesko seems to have completely forgotten where the most affordable and best used cars come from: new car sales.
Now VW, which used to be a very strong brand in market share, is just a memory of its former self. Kesko’s own car dealerships resemble Kamux stores, but the selection is smaller and the cars are completely worn out. I don’t understand what kind of business it is to sell a car driven half a million kilometers for 10k. All you get from that is the consumer ombudsman on your back. I have personally dealt with both Kesko and Kamux dealerships, so if I want a Kamux-type customer experience, I’ll get it from Kamux.
New car buyers are no longer valued at all by Kesko, at least based on trade-in prices; if someone still defies their wallet, the service department takes the rest with their absurd pricing. Is it a coincidence that, for example, the Police switched to Mercedes? Probably not, if you look at the price of, for example, a Transporter’s half-engine. How can a pile of iron and aluminum cost double in Finland compared to Germany? I don’t understand.
Then services are still advertised on the radio. Why do you have to own an old VW to get service more affordably?
What about the new Transporter advertisement: “the best Transporter of all time.” Ford had to make it to get a decent Transporter. The company saves a few thousand more euros by buying a Ford directly instead of a Transporter, and Ford’s service pricing has traditionally been significantly more affordable. A classic example of sales and marketing living their own lives.
As for acquisitions, please don’t buy anything more. Now, three entrepreneur-driven car dealerships are responsible for Volkswagen’s positive customer experience: Jyväskylän Autotarvike, Käyttöauto, and Pörhö. These three still uphold Volkswagen’s credibility as a brand. I’ll leave it at that; although I believe in Kesko, I think Kesko’s car business has been on the wrong track for quite some time.
Wetteri’s covenants are being breached: Sisäpiiritieto: Wetteri Oyj:n rahoitussopimuksen uudistaminen | Kauppalehti
The financing agreement between Themis Holding Oy, a sub-group belonging to the Wetteri Oyj group, and the financing bank contains covenant conditions that measure the amount of interest-bearing net debt divided by the 12-month operating profit (EBITDA) and the equity ratio.
Based on unaudited figures, the covenant conditions were not fully met as of December 31, 2024. Wetteri has initiated negotiations with the financing bank on updating the covenant conditions of the financing agreement. The long-term portion of the financing under the financing agreement will be treated as short-term debt in accordance with IAS 1.74.
What are these stock trades? Can anyone find a ‘Managers’ transactions’ (Johtohenkilöiden liiketoimet) announcement about these?
No announcement found for November. There is no need to announce January’s transactions, as they are below the limit.
Good point! Wetteri’s stock price has indeed dropped so much that the 20k€ won’t be exceeded for January:
November’s trades are still a complete mystery to me, at least 
Here are Thomas’s comments on Wetteri’s Covenant Terms.
Wetteri is making acquisitions again. Another new addition has been found for the portfolio. Hedin probably has some reason to give up the representation; they would hardly give it up if it were profitable. Growth is certainly sought by any means, but hopefully, they are not just digging a bigger hole from which they can no longer climb out. Hopefully, however, they are aware of what they are doing, and the demand for new vehicles explodes at some point, which it perhaps already requires.
Soon the thread title will probably be “Wetteri - multi-brand car dealership with an overly eager gas pedal”.
This seems like a sensible move to me, as there is a clear desire to expand Kia and Mitsubishi dealerships when opportunities allow. Given Wetteri’s scale, the purchase price is low and no goodwill is paid, so I don’t see a particular risk of going badly wrong. In contrast, perhaps investments in machinery trade, where entirely new business operations are being built and profits still require significant growth to a larger scale.
It would already be a positive thing if it doesn’t go badly wrong. The Kia dealership is probably quite alright, but it’s likely that these Kia dealerships will be relinquished on the condition that Mitsubishi is taken along as a bonus.
Alright, the AKL-Summit is over for now, where I met familiar colleagues, importers, financiers, etc. Quite a circus, where with the most expensive tickets, one could even participate in panel discussions. Well, you can babble there, but no philosopher’s stones are handed out to competitors.
As for Hedin’s purchase of Kia’s representation then. It’s probably worth going to the root causes. Why did Hedin/Helena want to give up perhaps the best-selling brand at the moment? Kia isn’t fighting for the top spot, but it’s the easiest to sell right now and an importer that strongly supports sales. Furthermore, it’s one of the most profitable brands at the moment. Why would someone sell something like that? Could the reason be that the particular branch has been Hedin’s weakest performer, or excessive rental costs/a long valid lease period? A smart move—probably if one believes in free lunches.
A long-standing professional moved to become the chairman of the board. True, if the career is essentially importing one brand, whose representation nevertheless leaves when Hedin gets its act together everywhere they also have stores. However, in the car industry, importing is closer to vacationing on the Riviera, and retail is work 28/10. That’s not a typo, it just is. Hedin also managed to get a professional onto Wetteri’s board, who probably holds the Finnish record. Nearly 30 million in losses.
Nevertheless, Hedin has enough problems of its own. Middle management behaves like in the good old days of Delta, and at the same time, the CEO tells Kauppalehti that he’s listening, listening. To whom? Is there room for the transom to leak? But yeah, someone on another forum said that investing goes great as long as you just do the opposite of what Inderes professionals think. Is that so? I don’t know; let everyone decide for themselves.
Here are Thomas’s preliminary comments as Wetteri publishes its Q4 results on Thursday.
During the review period, revenue declined and profitability was under pressure, driven by a challenging business environment. After the end of the review period, Wetteri completed the sale of its Power business, which focuses on heavy equipment, as a result of which the scale of operations has decreased after the review period and the balance sheet position has strengthened. In our view, the guidelines for the strategy for the heavy equipment segment after the Power sale and the allocation of freed-up capital will play a particularly interesting role on the results day.
Here’s the CEO’s interview regarding Q4.
And here’s a fresh company report from Thomas. 
Wetteri’s Q4 report was weak, mainly due to challenges in the Passenger Car Sales segment. The guidance for the current year promises a significant improvement in profitability, but after a weak Q4, achieving it seems contingent on a substantial recovery in the car retail demand environment. With the Wetteri Power transaction completed in January, the group’s balance sheet has improved, but the company’s fair value relies heavily on its ability to invest the received cash productively. We reiterate our reduce recommendation, but lowered our target price to EUR 0.23 (previously EUR 0.30).