MEKO (MEKO) investor relations material

Market Environment and Challenges

• Slower growth and declining margins in the first half of the year due to economic uncertainty and cautious consumer behavior across Europe.

• Demand has declined, with workshops reporting increased postponement of services and a shift toward essential repairs and lower-priced parts.

• Market fragmentation and regional differences persist, with some markets like Spain performing well and others, such as France, underperforming.

• Price competition has intensified, especially in Norway and Denmark, leading to dynamic pricing and margin investments in competitive categories.

• Despite challenges, the underlying demand for vehicle service and repair remains solid over time.

Strategic Direction and Market Positioning

• Focus on driving growth and strengthening logistics to maintain leadership in Northern Europe's independent auto aftermarket, with #1 positions in Sweden, Norway, Finland, and Denmark, and a multi-brand strategy maximizing sales across 4,500 workshops.

• Vision centers on enabling mobility for all vehicle technologies and offering logistics of the highest international standard.

• Business model leverages a solid, time-tested industry with constant service demand, handling all vehicle types and technologies.

• Expansion in commercial vehicles and exclusive brands, targeting new growth foundations and increased market share.

• Well-positioned for the EV transition, with over 1,000 workshops certified for high-voltage repairs and learnings from Norway's advanced EV market.

Strategic Initiatives and Business Development

• Accelerated cost-saving programs, including SEK 200 million from previous initiatives and a new SEK 100 million program focused on FTE reductions.

• E-commerce platform Mechster is being rolled out to new markets, leveraging existing infrastructure for CapEx-light growth.

• Workshop concepts and digitalization drive customer loyalty and efficiency, including online booking and automated parts ordering.

• Major investments in high-tech, automated warehouses across Denmark, Norway, Finland, and Poland, increasing efficiency, capacity, and delivery speed.

• Logistics upgrades have increased automation by 300%, productivity by 92%, and SKU capacity by 50%, while reducing FTEs by 38%.