Kamux is planning an initial public offering and listing on the main market of Nasdaq Helsinki

Not for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore.

PRESS RELEASE 18 April 2017

Kamux is planning an initial public offering and listing on the main market of Nasdaq Helsinki

Kamux Oyj ("Kamux" or the "company") is planning an initial public offering ("IPO") and listing of its shares on the main market of Nasdaq Helsinki Ltd ("Nasdaq Helsinki").

Kamux is a retail chain specializing in the sale of used cars and related integrated services that has grown rapidly and operates in Finland, Sweden and Germany. Kamux's business is based on the combination of a car showroom network and digital presence as well as professional procurement and sale of used cars, low fixed costs, rapid inventory turnover and sales of integrated services. In 2016, Kamux's revenue was EUR 405 million, growing by 30.6 percent from 2015. The company's target is to reach revenue of at least EUR 700 million in 2019.

Kamux's vision is to be the leading retail chain in Europe specializing in the sale of used cars. Kamux's customer promise is to offer used cars at attractive prices, act as a reliable partner to its customers and offer the best customer service in the market.

The objective of the contemplated IPO is to support Kamux's growth strategy and internationalization by increasing Kamux's recognition and trust in Kamux among the public and cooperation partners and as an employer. The IPO would enable the company to obtain access to capital markets, expand its ownership base and increase the liquidity of the shares. Through the listing, the shares could be used to reward Kamux's personnel and management.

The IPO is expected to consist of both a primary offering by the company and a secondary offering by certain shareholders of the company. In connection with the contemplated IPO, the aim is to raise approximately EUR 20 million of new equity in a primary offering, which would be used to support Kamux's growth strategy, internationalization and investments to promote digitalization.

Certain institutional investors ("Cornerstone investors") have, each individually, committed to subscribe to shares at the final subscription price, subject to certain conditions being fulfilled, including a condition that the valuation of all of the company's outstanding shares (before any proceeds from the share issue and excluding treasury shares), based on the final subscription price, does not exceed EUR 300 million. The combined commitment of the Cornerstone investors amounts to EUR 60 million. The Cornerstone investors are Elo Mutual Pension Insurance Company, Swedbank Robur Fonder Ab, Etera Mutual Pension Insurance Company and Fondita Fund Management Company Ltd.

CEO and founder Juha Kalliokoski:

"Kamux focuses solely on the sale of used cars and related integrated services. We have a leading position in Finland and estimate that we are among the ten largest used car retailers in Sweden. Kamux's growth has been enabled by our professional retail concept, our committed personnel and our omni-channel business model through a combination of digital presence and car showroom network. We continued our strong international growth in 2016 through opening our ninth car showroom in Sweden, which was our first car showroom in Stockholm area, and our second car showroom in Germany in the Hamburg area. Our vision is to be the leading retail chain in Europe specializing in the sale of used cars and to continue growing as one of the successful, internationalized Nordic retail concepts. The market offers excellent growth opportunities and we believe that an IPO would further strengthen Kamux's growth strategy."

Chairman of the Board Matti Virtanen:

"Kamux has renewed the used car business to meet consumer needs. Management recognized the market potential already when founding the company. Over the past thirteen years, it has built a retail concept with growth potential both in Finland and in the European markets. The profitable organic growth achieved over the years indicates a strong market position and trust among consumers. The share issue would strengthen the company's balance sheet to support profitable growth also in the future and enable additional investments into further digitalization of the company as Kamux aims to be a forerunner in the digitalization of used car retailing."

About Kamux

Kamux is a retail chain specializing in the sale of used cars and related integrated services that has grown rapidly. The first Kamux car showroom started its operations in 2003 in Hämeenlinna, Finland and the company currently has 37 car showrooms in Finland, nine in Sweden and two in Germany. In addition, Kamux aims to open two new car showrooms in Finland during May 2017. Since its foundation, the company has sold more than 140,000 used cars, of which 36,290 were sold in 2016. Kamux's revenue reached EUR 405 million in 2016. Adjusted operating profit^[1] was EUR 18 million, resulting in an adjusted operating profit margin¹ of 4.4 percent in 2016. Kamux employed 552 employees at the end of 2016, of which 272 were permanent employees.

Kamux's business is based on professional procurement and sale of used cars, low fixed costs, rapid inventory turnover and sales of integrated services. Kamux's business model makes it possible to offer affordable used cars and the aim of the company is to continuously develop its operations to better address customer needs.

In accordance with its business model, Kamux also offers its customers integrated services related with car sales, enabling it to serve its customers more comprehensively. Kamux offers its customers financing products from third-party service providers at all of its car showrooms in Finland, Sweden and Germany. In addition, Kamux offers insurance products and a liability extension, Kamux Plus, to cover car repair costs in Finland and Sweden. A key component of Kamux's customer service concept in Finland and Sweden is the delivery of the purchased car to a location agreed with the customer and, if needed, the simultaneous pick-up of a possible trade-in car.

Kamux acquires used cars from car auctions, leasing companies, other car dealers, financing companies, importers, private individuals and other sources. Kamux's entire car selection is available to all of its sales personnel at all of Kamux's car showrooms in Finland as well as countrywide in Sweden and Germany. In 2016, approximately 27 percent of the cars sold by Kamux were cross-sold through another Kamux car showroom.

Kamux's strengths

Kamux considers the following as its strengths:

• Large and historically stable used car retail market where the offering and customer service of the traditional sales channels do not meet expectations
• Strong and profitable organic growth combined with future growth prospects
• Professional business model based on the combination of digital presence and car showrooms, the cornerstones of which include professional  procurement and sale of used cars, rapid inventory turnover, low fixed costs and profitable integrated services
• Customer relationship management and enterprise resource planning system driving Kamux's processes
• Experienced, skilled and motivated management and personnel

Kamux's strategy

Kamux's strategic focus areas include continuing the profitable growth by increasing market shares in the markets in which the Kamux currently operates, improving profitability, offering an excellent customer experience, and personnel participation and motivation.

Kamux believes that its relatively low market shares in its fragmented markets offer growth opportunities. The size of Kamux's markets also indicate strong growth potential; in Finland approximately 0.5 million used cars are sold each year, in 2015 approximately 1.2 million used cars were sold in Sweden and 7.4 million in Germany. The used car market in the three countries is estimated to amount to more than EUR 100 billion in total.^[2]

The cornerstones of Kamux's growth strategy are opening new car showrooms and increasing sales at existing car showrooms and growing its digital footprint by, among others, opening an online store in Finland in February 2017 and increasing traffic to Kamux's websites through targeted marketing.

Kamux's financial targets

The Board of Directors of the company has established the following financial targets for Kamux:

• Increasing revenue to at least EUR 700 million in 2019;
• Operating profit margin of 4 to 5 percent in 2019 and an operating profit margin of at least 5 percent in the long term; and
• Distribute dividends of at least 30 percent of the profit for the year

The Board of Directors of the company annually estimates the balance between dividends to be distributed and funds to be used for Kamux's growth and based on this assessment, makes a proposal on the amount of dividends to be distributed, which may for any single year differ significantly from the target level set in the dividend policy. In the next few years, Kamux's primary target is to grow in accordance with its strategy.

Kamux's financial development and key ratios^[3]

Kamux's revenue has grown at a compound annual growth rate (CAGR) of 38.6 percent from 2013 to 2016 and at 42.6 percent from 2007 to 2012.^[4] The company's adjusted Operating profit^[5] in 2016 was EUR 18 million, corresponding to an adjusted operating profit margin⁵ of 4.4 percent.

EUR in millions, unless stated otherwise			2016	2015	2014
Income statement
Revenue[6]			404.8	309.9	215.0
Revenue growth, %			30.6%	44.2%	41.3%
Same store sales growth, %			12.2%	13.9%	15.8%
Adjusted operating profit5			18.0	16.0	10.5
Adjusted operating profit5 margin, %			4.4%	5.2%	4.9%
Balance sheet
Net debt			30.9	24.4	20.1
Total assets6			78.4	58.7	40.6
Other information
Number of car showrooms at the end of the period			47	41	35
Average number of FTEs[7]			343	271	203
Number of sold cars			36,290	28,515	20,273
Investments			2.1	0.9	1.2
KPIs
Return on equity, %			43.8%	67.7%	75.3%
Return on invested capital (ROIC), %			22.5%	30.6%	27.4%
Equity ratio, %			36.9%	36.3%	31.5%
Gearing, %			107.0%	114.2%	157.1%
Per share information
Earnings per share (EPS), undiluted, EUR6			0.29	0.30	0.18

Preliminary information on the financial performance for the three months ended March 31, 2017^[8]

Kamux estimates that the revenue for the company for the three months ended March 31, 2017 will amount to EUR 108-110 million and the adjusted operating profit for the period to EUR 4.5-4.9 million. The revenue for the comparative three months ended March 31, 2016 amounted to EUR 97.0 million and the adjusted operating profit for the period to EUR 4.4 million. 

The recorded number of cars sold by Kamux for the three months ended March 31, 2017 amounted to 9,698. The recorded number of cars sold increased by 1,175, or 13.8 percent, as compared to the three months ended March 31, 2016. The recorded number of cars sold by the company was 3,564, 3,010 and 3,124 respectively for the months March, February and January, 2017. The recorded number of cars sold increased by 21.3 percent, 2.7 percent and 17.7 percent, respectively, as compared to March, February and January, 2016.

Kamux believes that the main factor materially impacting sales and profitability of the Group and in Finland in the first quarter of 2017 related to the uncertainty caused in the Finnish market by the road transport review published by the Ministry of Transport and Communications on January 19, 2017. The review, which was subsequently withdrawn, caused uncertainty related to the Finnish car taxation, which negatively affected the sales of new and used cars in Finland in the first quarter of 2017 as customers considered the possible removal of car tax and its effects on the prices of new and used cars in the future. Kamux believes that the uncertainty also impacted profitability of the company in Finland during the first quarter of 2017 as a result of the company aiming to maintain a satisfactory inventory turnover despite the uncertainty in the market. Kamux believes that the market recovery is ongoing, which was partly visible in the number of cars sold in Finland in March 2017, being the highest ever number of cars sold by Kamux in Finland during a single month.

Information on the contemplated IPO

The contemplated IPO is expected to consist of both a primary offering by the company and a secondary offering by certain shareholders of the company, including the main shareholder Intera Fund II Ky. The company and certain current shareholders would be subject to customary lock-up arrangements in connection with the IPO. Intera Fund II Ky would remain a significant shareholder after the IPO. The primary offering is expected to raise approximately EUR 20 million of new equity, which will be used to support the company's growth strategy, internationalization and investments to promote digitalization.

The objective of the contemplated IPO is to support Kamux's growth strategy and internationalization by increasing Kamux's visibility in Finland and abroad, which is expected to increase Kamux's recognition and trust in Kamux among the public and cooperation partners and as an employer. The IPO would enable the company to obtain access to capital markets, expand its ownership base and increase the liquidity of the shares. In addition to a contemplated personnel offering, the listing would allow the shares to be used to reward Kamux's personnel and management also in the future.

Cornerstone investors have, each individually, committed to subscribe to shares at the final subscription price, subject to certain conditions being fulfilled, including a condition that the valuation of all of the company's outstanding shares (before any proceeds from the share issue and excluding treasury shares), based on the final subscription price, does not exceed EUR 300 million. The combined commitment of the Cornerstone investors amounts to EUR 60 million. The Cornerstone investors are Elo Mutual Pension Insurance Company, Swedbank Robur Fonder Ab, Etera Mutual Pension Insurance Company and Fondita Fund Management Company Ltd.

Skandinaviska Enskilda Banken AB (publ) Helsinki Branch is acting as financial advisor and Global Coordinator and Bookrunner in the contemplated IPO ("SEB" or "Global Coordinator") and OP Corporate Bank plc (together with the Global Coordinator, the "Managers") as Co-Lead Manager.

Press event


Kamux will host a press event today, 18 April 2017, at the Helsinki Stock Exchange (Fabianinkatu 14, Helsinki) at 11:00 a.m. EET.

Enquiries

Juha Kalliokoski, CEO and Founder, Kamux, [phone]
Matti Virtanen, Chairman of the Board, Kamux, [phone]
Satu Heikkilä, Head of Communications and Marketing, Kamux, [phone]

Important Information

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa or Singapore or any other jurisdiction where to do would constitute violation of the relevant laws of such jurisdiction.

This announcement is not a prospectus for the purposes of Directive 2003/71/EC (such directive, as amended, together with any applicable implementing measures in the relevant member state of the European Economic Area under such Directive, the "Prospectus Directive"). A prospectus prepared pursuant to the Prospectus Directive and approved by the Finnish Financial Supervisory Authority will be published prior to any offering of securities and, when published, can be obtained from Kamux and other places indicated in the prospectus. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information contained in the prospectus.

This announcement does not contain or constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Kamux does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States.

This announcement is directed only at: (A) persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (the "Qualified Investors"); (B) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments and who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); or (ii) are high net worth entities falling within Article 49 of the Order; and (C) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

None of the Managers or any of their respective affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Kamux, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The Managers are each acting exclusively for Kamux and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their respective clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by the Managers.

This announcement does not constitute a recommendation concerning the offering. The price and value of securities and any income from them can go down as well as up. Past performance is not a guide to future performance. Information in this announcement or any of the documents relating to the offering cannot be relied upon as a guide to future performance. There is no guarantee that the listing on Nasdaq Helsinki Ltd will occur and you should not base your financial decisions on Kamux's intentions in relation to the listing at this stage. Potential investors should consult a professional advisor as to the suitability of the offering for the entity concerned.

Each of the Managers and any of their respective affiliates, acting as investors for their own accounts, may purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of Kamux or related investments in connection with the offering or otherwise. Accordingly, references in the final prospectus, once published, to the shares being offered, acquired, sold, placed or otherwise dealt in should be read as including any offer, sale, acquisition, placing or dealing in the shares by any of the Managers and any of their affiliates acting as investors for their own accounts. In addition, certain of the Managers or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of shares. None of the Managers intends to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligations to do so.

No representation or warranty, express or implied, is given by or on behalf of the Managers or any of their respective subsidiaries, affiliates, agents or advisers or any of such persons' affiliates, directors, officers or employees or any other person as to the fairness, accuracy, completeness or verification of the information or the opinions contained in this announcement, and no liability is accepted for any such information or opinions. Each of the Managers or any such persons' directors, officers, employees or affiliates or any other person disclaim all and any responsibility and liability whatsoever for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this announcement or its contents or otherwise in connection with this announcement.

Forward-looking Statements

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "will," "may," "continue," "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions. Although Kamux believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors, which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.

The financial targets included herein constitute forward-looking statements and Kamux's actual results of operations or financial condition could differ materially from those expressed or implied by these forward-looking statements as a result of many factors. These financial targets are based upon a number of assumptions, which are inherently subject to significant business, operational, economic and other risks, many of which are outside of Kamux's control. The key assumptions the Board of Directors has made when setting its targets include, among others, that the market conditions will remain the same and that there is no material change in the commercial, regulatory and economic environment in which Kamux operates. In addition, unanticipated events may adversely affect Kamux's actual results of operations and financial condition in future periods whether or not Kamux's assumptions prove to be correct. As a result, Kamux's actual results of operations or financial condition may vary materially from these targets and investors should not place undue reliance on them. No statement in this announcement is intended to be nor may be construed as a profit forecast.

Each of Kamux, the Managers and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any of the forward-looking statements contained in this announcement whether as a result of new information, future developments or otherwise.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.

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^[1] Operating profit adjusted for costs relating to the listing, special items relating to strategic planning and strategy implementation, special items relating to expansion of business and cash-settled share-based payments related to redemption of treasury shares

^[2] Sources: Finnish Transport Safety Agency, Autovista, Trafikanalys Fordon 2015, DAT Report 2016, HIS, OECD, Company Commissioned Study

^[3] Figures are unaudited

^[4] Financial information for 2007-2012 is prepared according to Finnish Accounting Standards (FAS), whereas financial information for 2013 onwards is prepared according to International Financial Reporting Standards (IFRS). The reporting impacts items including revenue, thus CAGR needs to be viewed separately for the mentioned periods

^[5] Operating profit adjusted for costs relating to the listing, special items relating to strategic planning and strategy implementation, special items relating to expansion of business and cash-settled share-based payments related to redemption of treasury shares

^[6] Audited

^[7] Full-time equivalent employees

^[8] The section includes preliminary estimates regarding Kamux's financial performance. The information is based on Kamux's internal management accounts and represents Kamux's preliminary estimates with respect to its results for the three months ended March 31, 2017. These estimates have not been audited by an auditor, and prospective investors should not place undue reliance on them.

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Source: Kamux Oyj via Globenewswire