Hungarian asset manager and automotive holding AutoWallis Nyrt. plans to double its revenues and carry out acquisitions in Central and Eastern Europe over the next five years, after listing its shares on the Budapest Stock Exchange on February 7.
AutoWallis, part of the Wallis Group, will be traded in the “Standard” category on the floor and plans to meet all of the five requirements to be part of the benchmark BUX index as soon as possible.
AutoWallis Nyrt., formerly Altera, generated revenues of HUF 70.2 billion in 2018, up 5.9% on the year, which makes it the seventh largest company on the Hungarian bourse in terms of revenues. The IPO is expected to attract public capital market resources for financing AutoWallis’ growth plan, the management said at the event.
“Members of Wallis Group have so far proved they are not letting down their investors; AutoWallis will surely be joining this line of successful listed companies,” Richárd Végh, head of the Budapest Stock Exchange said at the official event marking the initial listing.
The event, which traditionally begins with the newly listed company’s leader ringing the opening bell for trading, took place after preparatory work that had lasted almost half a year and involved a so-called reverse takeover deal, Tibor Veres, chairman of the Wallis Group said at the event.
“We are pleased to have seen the great interest in the IPO over the past few years,” Veres said at the press conference following the listing event. “We pledge to provide an engaging story to our investors, creating the possibility to invest in the car industry in Hungary.”
The firm’s shares were listed under the code name AUTOW at a nominal value of HUF 12.5; the number of the shares is now 270.26 million.
Besides inclusion in the BUX index, AutoWallis aims to be included in the CECE composite index of the Vienna Stock Exchange, and upgrade to the “Premium” category on the BSE as soon as possible. The current owners intend to preserve their majority interest in the long run, establishing a significant but minority free float on the market of AutoWallis shares, Veres said.
As for plans, AutoWallis aims to present a long-term strategy this spring, pay an “attractive” dividend on its common shares in 2020, and to double its revenues over the next five years.
Growth will likely be fueled by rising Hungarian demand, and the company entering the Balkan markets, Gábor Székely, the chief investment officer of AutoWallis said. Last year, half of the group’s revenue came from abroad, primarily on the back of acquisitions made in 2016 in eight countries in the Balkans.
On top of setting foot in the Balkans, Wallis Automotive Europe, the largest revenue-generating member of AutoWallis, entered the Czech and Slovakian markets in 2018 with the South Korean SsangYong brand, which Székely expects could further boost revenues by 5-10% over the coming two-to-three years.
“Further increase in revenues [for the whole group] are likely on the back of the expansion of the Hungarian economy, the dynamic development trend of tourism, rising average wages and consumption, and with willingness to borrow also gaining momentum,” Székely said.
AutoWallis, founded in 2012, has four member companies in the retail and wholesale of vehicles, their parts and accessories, repair and maintenance services, as well as in short- and long-term vehicle rentals in Hungary and in the Central and Southeastern European region. Brands represented by the group include BMW cars and motorbikes, Mini, Isuzu, Jaguar, Land Rover, Maserati, SsangYong, and Sixt Rent-a-car. BMW holds a dominant position in the premium car market, while Sixt is leader in car rentals in Hungary.
In a breakdown by members, Wallis Automotive Europe saw revenues of HUF 35 bln in 2018; Wallis Motor Pest and Duna, the two largest dealerships handling BMW cars and motorbikes, Mini and Maserati brands, increased their joint revenue by 19% to HUF 32 bln last year.
Wallis Autókölcsönző, a company offering car rental services as the Hungarian member of the international Sixt Rent-a-car network, is expected to have increased revenues by 23% to HUF 2.7 bln in 2018, preliminary figures show. Wallis Autókölcsönző is also market leader in airport car rental services, and foresees the growing number of travelers flying into Hungary and the inevitably increasing passenger traffic at Budapest Airport as having a positive effect on performance.
AutoWallis has its eyes peeled for investment opportunities in Hungary, Eastern Europe, and the Balkans, acquiring new brands and markets, as well as getting involved in new lines of business.
“Our existing brands are of special importance. We would like to introduce brands in countries where we are already present but the brands are not,” Zsolt Müllner, member of the board at AutoWallis said.
Medium-term plans include opening further vehicle distribution points, and developing the existing dealership and service network in Hungary, as well as in the region. The group is also keeping the ongoing industry transformation under scrutiny, with developments in the fields of electric vehicles, self-driving cars, and car-sharing in focus.