CEO comment
Strong growth and further initiatives to increase profitability
MEKO concludes 2023 with robust growth, strong performances in core markets and a clear improvement in its financial position. I am pleased that the Board has proposed to raise the dividend to SEK 3.70 per share. In parallel, we are continuing our focused efforts to strengthen profitability, including a new efficiency program in Sweden and one-time costs affecting the operating result in the fourth quarter.
FEBRUARY 14, 2024
As we look back on 2023, I can see that MEKO’s business model remains solid. The need for car service and maintenance remains constant – regardless of economic climate and whether the vehicle runs on electricity, petrol or diesel. We have strengthened our position as the most complete partner for everyone that drives, maintains, or repairs vehicles in our markets in northern Europe.
We increased net sales, strengthened or defended our market share, entered into new strategic partnerships with electric vehicle manufacturers, and invested in a high-technology warehouse to meet future needs. In addition, we launched an initiative to improve profitability – "Building a Stronger MEKO".
Sustained positive growth trend
Strong growth continued during the fourth quarter. Net sales increased by 12 percent in total and 10 percent organically. Market conditions differ between countries, with a more favorable situation in Norway, Denmark and Sweden than, for example, in Poland and Finland, which face a number of challenges. We can also note that there were fewer workdays than during the corresponding period in 2022.
Continued efficiency improvements to increase profitability
Our initiative to increase profitability will gradually improve EBIT in 2024 and 2025 with full effect during next year. This means we can expect an improved EBIT margin of at least one percentage point, which corresponds to an increase in EBIT of at least 15 percent.
This initiative will entail costs along the way. During the fourth quarter, we implemented some of these efficiency improvements in Norway, as announced in December. In addition, we took steps in Finland of a non-recurring nature, as a result of the warehouse merger, among other reasons, and to create a long-term improvement in gross margin with new leadership in parts of the business area. This non-recurring costs was charged to our EBIT and our EBIT margin.
We are now proceeding with a targeted efficiency program in Sweden, as part of our initiative "Building a Stronger MEKO". The aim is to enhance the positive trend in the business during 2023. Through more optimized purchasing and reduced costs, expect to achieve a positive effect of SEK 50 M during 2024. This is taking place at the same time as we naturally continue to offer the industry’s best availability for our customers.
Strong financial position enables raised dividend
It is gratifying that MEKO’s financial position has improved in 2023. At the end of the year, the debt/equity ratio was 2.7 times, compared with 3.1 one year earlier and is thus well within the target range of 2–3 times. This creates flexibility and an opportunity to pay a dividend to our shareholders, in line with our financial targets. I am pleased to announce that the Board has proposed a raised dividend of SEK 3.70 per share (3.30), to be paid in two separate installments of SEK 1.85 in both May and November.
Overall, MEKO is well-positioned for the green transition and for continued profitable growth. Our initiatives are creating a stronger company with more energy to lead developments in our industry, where we benefit from new habits and more sustainable technology in our vehicles. I would like to extend a big and warm thank you to all employees, customers, business partners and shareholders for this past year.
Pehr Oscarson
President and CEO