Hello. Welcome to Kamux half year results presentation. My name is Juha Kalliokoski. I'm CEO and Founder of the Kamux.
Good morning. My name is Marko Lehtonen. I'm Kamux CFO.
Okay, there we see a table of contents. First, Q2 in brief, then we check our financial development, after that, strategy, outlook and financial targets, and then we summarize this. As we remember, Kamux vision is to be number one used car retailer in Europe. We made a huge revenue increase in Q2 by 52% to EUR 228.8 million. As we, in March, announced our new strategy, and these figures find out what we made as we spoke about our strategy planning. It's good to keep in mind the comparison period in Q2 2020, sold units were less than in Q2 2019, -5%, if I remember right. Comparison period was exceptional weak. Q2 gross profit decreased, and it was EUR 20.5 million. It's important to remember that Q2 gross profit was impacted by EUR 3.7 million in this German one-off impact.
This extraordinary cost related to purchasing of cars in Germany. Our adjusted operating profit was previous year level, EUR 6.8 million, and it was 3% of the revenue. We are very happy our like-for-like showrooms revenue increased 37.9%. It was very strong. We grew in our every country very strongly, especially in Sweden and in Germany. As I said, our growth was in line with our strategy. We accelerate growth. The used car market grew in all countries. We grew faster than the used car market in all countries. In contrary to recent media news, used car market has not been growing very strongly recently. For example, in Finland, according to AKL, used car market grew in January to June about 3%. With new car market, it's good to remember the comparison period last year was extremely weak.
This first half-year, new car sales increased 25% in the Europe level. In Finland, our market share is about 8%, and we maintain our market leader position. In Sweden, we are in top 10. Kamux position is among the 10 largest used car retailers, and in Germany, our market share is very small, but it grew in Germany. Due to corona pandemic, we decided in March 2020 to concentrate on cheaper cars, but after that situation has been normalized. Our revenue grew 52%, and adjusted operating profit was the same last year level. As we see, our sold cars increased 25%. Difference between units sales growth and revenue growth is caused by increased average sales price compared to comparison period. However, also sales in units was growing very strongly.
When we speak about integrated services, it increased EUR 8.6 million last year to this year to Q2 EUR 9.9 million. Swedish and German growth has been stronger than in Finland, and their integrated services share from revenue has been lower than in Finland. Therefore, in group level, integrated services revenue has declined. Q2 2020 integrated services revenue was higher, as fees are coming with delay when revenue declined. Penetration was at OK level in all countries. Despite Germany, the finance sales was not so good level because there was this corona pandemic and a lot of the digital sales. New openings and showrooms. Today, both announced openings are according to our new showroom concept, and size of showrooms will be significantly bigger than our previous showrooms. For example, Gothenburg showroom is almost four times bigger compare amount of cars.
We are currently working with several new projects, and I hope we can soon tell about new openings. Marko, here you are. You tell about the financial development.
Thank you, Juha. In the second quarter, we started to execute our growth strategy very swiftly, and that is also visible in the KPIs important for the investors. It is good to keep in mind that, as Juha was mentioning, the comparison period, so Q2 2020, was relatively exceptional and also relatively weak. If you bear in mind that that time we made a decision that we were a little bit reducing the stock, and we have been also buying a little bit cheaper cars, so meaning our average prices we pushed down last year in the second quarter and also we a little bit reduced the amount of stock. That situation, of course, has been now normalized, and that is, of course, now visible in the numbers.
We have been also progressing with our investment in Oulu, so where we are building a showroom and processing center, and in June, Kamux issued first ever commercial paper in Finland. We raised EUR 50 million. We, of course, at the moment, we are able to get it in very affordable interest rates for us. The financing is used for financing the net working capital and our Oulu project building phase. Return on equity was 22%, and it decreased slightly from the previous year, and equity ratio was 39.3%, decreased also slightly from the previous year. There was a strong impact from this positioning or change of our stock in the balance sheet, which I was mentioning. Our earnings per share was EUR 0.04, and it declined 76.3% from the previous year.
It is good to keep in mind that in the previous year, in the second quarter, we received EUR 0.9 million from the previous period's taxes based on the decision of the tax board in Finland. We also, this year, have been additional cost related to the purchasing case in Germany, which is EUR 3.9 million impacting the earnings per share. There has been quite some extraordinary items happening there. I would also like to remind that we have not booked any tax asset related to Germany, meaning that these exceptional losses do not impact our tax position at this point of time. I would like to then a little bit open the situation and the case what we had related to the purchasing of the cars in Germany.
If we start with the big picture, we have been investing in purchasing in order to accelerate our growth and of course, to ensure the sufficient inventory for the summer season, and I consider that that has been very successful. However, with one procurement partner in Kamux Germany, the cooperation proved to be disappointing. From this partner, we have been buying over 300 cars, what is now under dispute is the delivery of roughly 140 cars. The reason why we decide to end the cooperation and commence legal proceedings was that there was continuous difficulties in deliveries where we didn't get acceptable solution for us.
I think it is also good to understand that in used car business, it is common practice that the used cars are paid before the delivery. Therefore, in this situation, we booked a EUR 3.7 million charge for the gross profit impacting and EUR 0.2 million charge impacting the other costs, so totaling EUR 3.9 million for the second quarter. I would also like to underline that this amount, EUR 3.9 million, is covering everything in this case. We have not taken any assumptions about possible recovery of the amounts what we have there. Of course, we have also updated and reorganized the wholesale purchasing process and internal controls we have in a changing purchasing market. Of course, we are also auditing this particular case.
If we then move to the key figures, there is very big differences between the quarters we have, and I would also like to point out that it's a very big issue for us what has been happening with the average sales price of the cars. If we think, as I was mentioning, that last year we decided to reduce the stock and also concentrate on a bit cheaper cars, and situation has been now normalizing this year, so of course, that has quite big impact to the numbers throughout our P&L. Why is that?
Of course, one very big matter there is that if you look about the integrated services, you can see that in our foreign operations, we have a bit smaller part of the revenue, what is coming from the integrated services, but also we have in the integrated services, income components, which are not related to revenue, but more like units sold. That altogether is, of course, impacting our gross profit in the period. However, I'm not going to repeat maybe the second quarter key figures, which Juha already told you, but maybe concentrate more on the first half. The revenue in the first half was EUR 438.6 million. It was growing 38%, and the adjusted operating profit was EUR 12.4 million, growing 15.2%.
I would like to remind that in the gross profit now, in the second quarter, we have EUR 3.7 million and in other operating expenses, EUR 0.2 million related to the purchasing case in Germany. I would also like to point that the sales growth like-for-like showrooms was 37.9%, which was excellent in the period. The inventory turnover days was 46.5%, which was relatively in the last year level. If we move to our segments and start with Finland. In Finland, we had a very strong revenue growth. The revenue increased 30.2%, and it was EUR 142.3 million. It's good to keep in mind that last year, in the comparison period, the conditions were very exceptional. In April, we had in capital region actually closer, so the people movement was very restricted, and of course, that impacted heavily our business last year.
In the second quarter, our gross margin increased to EUR 18 million and being 12.7%. There is also visible what I was mentioning about the integrated services. One where the average sales price of the cars is a bit increasing or normalizing, so of course then, the revenue from the integrated services is slightly relatively declining. We also took Kamux Management System in use in May, and that was slightly impacting the business there, of course, causing slightly loss of sales and gross profit, but also additional costs for the period. Currently, we are successfully using the system, so the implementation has been passed. The growth in Finland was driven by the new showrooms and of course also like-for-like growth.
If we move to our foreign operations, the total revenue in Sweden increased by 92% compared to previous year and was EUR 74.8 million. The gross margin increased to EUR 4.9 million, being 6.5% of the revenue. The operating profit declined compared to the previous year and was EUR 0.3 million. We have been making in the period significant investments to the growth. As for 1 example is when the run-up phase of the Gothenburg, which we did, as Juha was mentioning, it is significantly bigger store what we have compared to our average stores, what we have. Of course, running up that kind of business is taking also more effort and cost as well. In Sweden, the revenue of integrated services increased to EUR 1.1 million, being 1.8% from the revenue. There is also impacting the average sales price, which has been increasing.
In Sweden, the growth was driven by new showrooms and sales growth of like-for-like showrooms. In Germany, the situation has been maybe the most unusual this year. It's good to keep in mind that in Germany, the government has been having strong limitations to the business until the end of June, and it was varying by the states and of course by the infection rates we had. Technically speaking, until May, we were mainly operating so that the customers were not able to enter the stores, had to serve them outside. Currently we are operating normally, but of course, need to use the masks, and we need to, of course, have enough space for the customers.
In Germany, the total revenue increased 113.2%, being EUR 26.7 million, and the gross margin was negative EUR 2.4 million and of course, heavily impacted by the EUR 3.7 million charge that we made. Operating loss increased compared to the previous year and was EUR 4.5 million and to the operating loss, there was impact of EUR 3.9 million related to the purchasing case. Integrated services revenue declined and was EUR 0.4 million, being 1.7% of the external revenue. In these circumstances, we had a slight impact to the sales of the financing in Germany as we couldn't really welcome the customers to showrooms, but were more or less digital sales in the reporting period. In Germany, the growth was driven by new showrooms and sales growth of like-for-like showrooms. If we move to the balance sheet side and look about our net working capital and our inventories.
Firstly, I would like to start by looking the comparison period. We can see that the, as I was mentioning, that the Q2 last year was relatively exceptional because usually the Q2 is always bigger than the Q1 because we are increasing the stock for the summer season. Last year that was not the case. Of course, the net working capital, but also the stock were growing relatively rapidly. Why the net working capital was growing slower than the inventories was that, excuse me, we had quite exceptionally large accounts payables that was related to the Finnish Customs, so meaning they had a system change related to the car tax and of course our debt related to the dividends. Debt related to dividend payout.
In coming periods or at the moment, we don't expect that the average stock price or the unit prices there would be any more not changing so rapidly. The situation has been now normalized, and the rise what has been happening has been now taking place. Despite the increased purchases, net cash flow was at good level, being EUR 6 million, of course, impacted positively by the growth of accounts payables, but of course offset partially by the stock increase. We continued our investments according to the published strategy and namely investments EUR 2.2 million went to leading with the knowledge and of course, according to new concept processing center and showroom in Oulu. If you think about the total investment, EUR 2.2 million, EUR 1.2 went to fixed assets and EUR 1.0 went to the immaterial assets, so meaning mainly to the digital investments.
I move to the strategy outlook and financial targets. Short recap, what has been happening with our strategy implementations, there are 4 main areas where we focus. If we start with the omnichannel customer experience and services, we are currently now collecting experience from Kamux Huoleton, which is monthly fee driving service in Finland. With the efficient processes and scalability, we have opened the Gothenburg megastore and processing center, we are building the processing center and showroom in Oulu. Utilizing data and leading with the knowledge, Kamux Management System was launched now in May in Finland, it was already in use in Germany since the end of last year. About developing capabilities and continuous learning, we have been now in the period focusing especially for our sales managers' capabilities, so their leadership and of course their business management capabilities.
Short recap about our financial targets for 2021-2023. Revenue growth of over 20% annually increasing adjusted EBIT and adjusted EBIT margin over 3.5%, return on equity over 25%, and target to distribute dividends at least 25% of net profits. In January-June, the revenue was growing 38%, adjusted EBIT increased slightly to EUR 12.4 million. Adjusted EBIT margin was 2.8%, return on equity 22%, and dividend payout from 2020 result 41%. Our outlook for 2021 remains unchanged, we expect revenue to reach EUR 800 million-EUR 850 million and adjusted EBIT to increase from the previous year. Short summary about the Q2. Revenue increased by 52% to EUR 228.8 million. Gross profit decreased by 0.5% to EUR 20.5 million. Adjusted EBIT was at previous year level, EUR 6.8 million. Like-for-like showroom revenue increased by EUR 37.9 million.
Kamux internationalization progressed, and we were growing significantly in Sweden, 92%, and in Germany, 113.2%. It was in line with our strategy, where we accelerated the growth. Thank you very much, and we are now happy to answer your questions.
Can you please quantify the impact from one-off comps effects on gross margin, raw purchasing price, and decrease in inventory in Q2? What about your pricing power during the quarter? Do you think this pricing power could still be challenged during next quarters? What level of gross margins do you think you can reach in the next two quarters?
If we start with the last topic, there I can only refer to our outlook and our financial targets. We are not really giving guidance per gross profit per se. Our quarter two was strongly impacted by this unusual charge. However, also if you eliminate that, we were slightly on the lower end. We were not fully satisfied with that. Of course, there is factors which I was mentioning, for example, in Finland, the implementation of the KMS. Of course, also in Germany, the case what we had. These kind of things. Also one thing what is good to keep in mind, that the margin levels have been still lower in our foreign operations, and they have been growing much faster than our Finnish operations. The sales mix has been also changing there.
How did Kamux Management System impact profitability, as one would think it would rather affect revenue?
If you think about the implementation of the system, what you do, you typically take a quite significant investment to the training of the people. You also reserve additional resources inside and outside of the company, meaning that you really want with those resources ensure the smooth implementation and kickoff of the system. Of course, we can see also that when the people have been learning the system, there has been challenges maybe to get the best out of margin there. Of course, also certain revenue was lost as well. That is no doubt. This additional cost, what we took there. As I was mentioning, we did that in May, and currently, we are operating relatively normally with the system.
Operator, do we have any questions by phone in English?
Thank you, ladies and gentlemen. If you do wish to ask a question, please press zero one on your telephone keypad now. We currently have no audio questions.
Thank you. We are done with the English part.
Okay. Thank you very much, and have a nice August Friday.
Thank you.
Bye-bye.