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AutoWallis closes 2021 with record profits

Automotive

The AutoWallis Group closed 2021 with profits significantly exceeding its own plans and an EBITDA of HUF 7.8 billion, despite the prolonged coronavirus epidemic and manufacturing difficulties due to chip shortages, according to a press release sent to the Budapest Business Journal.

The revenue of the automotive company registered on the Hungarian stock exchange set a new record by more than doubling to nearly HUF 200 billion.

Company chairman Zsolt Müllner said that over the course of its almost 30-year history, the group has seen a wide variety of disadvantageous effects, but, as the results show, AutoWallis performs well even in a variable environment, and the company is expressly motivated by challenges.

AutoWallis plans to more than double its revenue to HUF 400 bln and increase its EBITDA to more than HUF 14 bln by 2025. Müllner said the company is on the right path to realizing its strategy, which they continue to consider feasible despite of current business and economic uncertainties.

In 2021, AutoWallis’s revenue more than doubled to HUF 195 bln (+121%) which, in addition to organic growth that surpassed domestic and regional market averages (+28.4%), was also attributable to acquisitions carried out in 2020. The company listed in the Premium category of the Budapest Stock Exchange saw its revenue increase to HUF 110.9 bln (+188%) in its Distribution Business Unit and to HUF 84.1 bln (+69%) in its Retail & Services Business Unit. Within costs, the value of cost of goods sold (CoGS) grew by 117% to HUF 167.5 bln, which is slightly less than sales revenue, leading to an increase in margin generation from 12.6% to 14.1%.

Autowallis says that this positive trend is primarily due to the fact that the group managed to implement a successful and efficient pricing policy during the entire year in both the procurement of new and used cars and in sales. Despite of the significant increase in sales, material costs + capitalized own performance were only 41% higher than previous year’s figures because the significant increase in volume in the company's Distribution Business Unit generated proportionally significantly lower growth in material costs. The value of contracted services grew by 124%, mainly due to increased logistics costs in connection with Opel and SsangYong import activities. The 144% rise in personnel expenses is due in part to increases in average wages and in part to acquisitions and developments. In 2021, the value of financial gains or losses was HUF 793 mln in losses, which is an improvement of more than HUF 400 mln over the previous year.

AutoWallis CEO Gábor Ormosy explained that based on these figures, the company’s EBITDA, which the management considers to be the best indicator of profitability, increased by almost three and a half times compared to the previous year to reach HUF 7.8 bln, which significantly exceeds the figure of HUF 5.5-6.2 bln forecast in the strategy updated last year. The company’s total comprehensive income was a profit of HUF 3.2 bln, compared to the loss reported last year, while the earnings per share (EPS) stood at HUF 8.95.

Ormosy explained that Group members managed the manufacturer supply disturbances exceptionally well, especially as regards inventory management, which is behind the improvement in results and the better-than-planned figures, adding that efficient exchange rate management and disciplined cost management also supported the handling of market turbulence.

The CEO said that the company has the resources necessary for implementing the growth plans laid out in its strategy, for which it also intends to use the profits generated last year, which is why the board does not recommend using the total comprehensive income or the profit reserves, or the HUF 1.4 bln dividend fund generated from the dividends expected from subsidiaries in 2021, to pay dividends. 

In connection with the 2021 plans, Ormosy said that based on current information, the Russo-Ukrainian war and the economic sanctions imposed on Russia do not currently have any direct effects on the business of the AutoWallis Group.

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