Ladies and Gentlemen,
We have been through yet another year full of variable factors and unexpected turns of events, a year that taught us many new processes and how to dynamically respond to market changes. We have yet again passed the exam as an organisation. Not only did we maintain the position of leader in Poland, but also consistently expanded operations on our markets. On the European aftermarket, Inter Cars has gone up in rank to come in second in terms in turnover. We have increased headcount, and have given greater prominence to areas associated with environmental and social factors management, we continue to deepen our specialisation in segments, we also continue to invest heavily in process digitalisation and optimisation.
Every year we are becoming a company with a rising international presence. However, we do not forget our roots nor our employees, because it is they who have always been of the highest value to us. In 2021 we successfully communicated our new Group mission, an action “Together we create, support, deliver”. It is a year–round initiative whose overreaching objective was introducing the customers to a variety of opportunities that cooperation with Inter Cars provides. It is a reminder campaign as many customers well know that we have the most comprehensive offer on the market and we supply on the order date. With this campaign, we strengthen our brand, showing our customers the specific advantages of helpful solutions in daily running of a car service, and our actions are based on sustainable development. We started communicating the new tagline with a part devoted to partner relations as they are at the core of our business strategy. We take care of and nurture relationships with our customers, suppliers, employees, as well as local communities which are also crucial for our business perception.
Twelve months of 2021 were a period of important changes for the market of spare parts. They were significantly impacted by Covid–19–borne disruption. Difficulty sourcing components, interrupted supply chains and, consequently, problems with new cars’ availability had market–wide repercussions. The problems mainly affected the manufacturers and not necessarily distributors’ core business as car parts are the basic commodity for price flexibility, which Inter Cars has, is not high. Owing to such a broad offer Inter Cars has, we are able to provide mobility to consumers and business entities alike.
For Inter Cars it was also a time of challenges, however, thanks to reasonable optimisation, rapid and accurate decisions, we emerged from this ordeal unscathed. One might say, we already sort of grew accustomed to living in the new reality. We have learnt how to work hybrid, we have moved a substantial part of our meetings to the on–line world, developed e–tools and programmes to order parts, we invest in digitalisation and we have grown our share in the e– commerce market in Poland and abroad. The latter was not always easy, we had to learn many processes from scratch, still, time showed that we managed to face up to that challenge. We have invested much time and work in those areas and we can already reap the fruits.
By the end 2021, we were present in eighteen countries Europe–wide in which we were involved in on ground sales with the use of branches (a franchise model). Globally, we export our goods to more than thirty countries. In recent months we have made considerable outlays to develop modern electronic tools necessary for effective business of sales and spare parts assembly. The implementation of Inter Cars e–catalogue on the Polish market is growing ever more intensive. It is a comprehensive tool but for which it would be difficult to imagine a modern garage nowadays. Every month the application is being enhanced with new functionalities thanks to which an increasing number of our customers are coming to use it. It is a user–friendly programme, very intuitive and, primarily, available in a mobile version, which ensures more flexibility when searching for and ordering parts. We are now also introducing considerable improvements in customer phone service, and we also create new contact channels, like chat, voice bot or video.
For years we have been building a company based on social and economic values, partnership with employees, customers, suppliers and all the other stakeholders. Partnership, which is heavily pronounced in our organisational culture, manifests itself the most in the franchise system which we have successfully been pursuing from the day one of the company’s existence and which has helped us to build such a strong market position.
Geographical expansion will not be our priority in the near future. We focus on markets on which we are present already and it is there that we will want to strengthen our leader position in each of the segments. Owing to specialisation in selected areas, our company management strategy improves operating efficiency and translates into greater flexibility. At the same time, thanks to cross–selling our products, it is possible for us to achieve synergy not only in terms of costs but also revenues. For 2022 we are planning to open a dozen new branches in countries in which we run business. In Poland, we will continue to focus on improving and unifying standards of already existing establishments.
Given automotive market perspective, in 2022 the aftermarket looks optimistic, we envisage a continuing upward trend. Certainly, the war Russia began in Ukraine remains a serious risk factor. Problematic availability of new cars, a high demand for spare parts in garages (which is due to households’ accumulating savings during the pandemic), realisation of expenses postponed during the pandemic, all of this operates in our favour. In most countries we grow faster than the competition, which is possible thanks to advantages the broad offer and available parts give. It has always been our strategy to offer numerous alternative products from various suppliers, in various price variants. In this way, today we are positive we guarantee the best possible availability.
High inflation in the region and rising business costs remain an element of uncertainty. Thus, business owners are forced to seek savings and reduce investment. In our opinion, high inflation nevertheless poses a greater challenge for car manufacturers than parts distributors. Buying a new car is still quite an expense for each household or business. Our observations show that as a result of interrupted supply chains and semi–conductors missing, the availability of new cars is continuously declining, which is manifested by the data on new car registrations. A permanent trend is to extend the service lives of cars the current owners have. Thus, we notice a rising demand for the sales of parts, which entails improved dynamics of our sales.
In pursuing our strategy of sustainable development 2020+ saying: Sustainable motorization for people and climate, we consistently spare no effort to belong to a group of modern, innovative companies which take care of the natural environment. Together we create, support, deliver – is not only a tagline, but an array of opportunities which also translate into environmental protection. Internally, we run analyses showing which processes and to what extent they affect the surroundings and how we can optimise them. We have introduced reusable packaging, we modernise our logistics to impact the natural environment as little as possible. Last year we tested small electric trucks. If we decide to incorporate them into our logistic process, we will ensure that the electric current necessary to charge them derives from renewable energy sources.
We also encourage our customers to undertake pro–environmental activities, be it by participation in Bio Service, a project in which we make sure that used parts (including oils, batteries or tyres) are properly collected from garages and transmitted for professional disposal. 2021 ushered in a considerable acceleration of the EU decarbonisation policy, which is manifested in, among others, the European Green Deal and Fit for 55. These are number of changes for business which are globally responsible for a substantial part of the global emission of exhaust gases, hence have a decisive role to play in reducing them. By the efforts of the entire Group we undertook a process of calculating the carbon footprint in the value chain. In 2022 we are planning to set ambitious objectives and a detailed decarbonisation plan.
Last year we additionally strengthened our efforts in the area of sustainable development by setting up the Inter Cars Foundation. Its mission is to support accessible, safe and responsible mobility for people and climate. We decided to launch an employee volunteer programme within the Foundation, and we also got involved in a lot of social actions. Events in Ukraine and Russia’s armed attack on Ukraine also made the Foundation decide to channel its efforts to help our friends in Ukraine. We host fundraisers and collections of goods, we help transport medications and medical equipment, we also support the staff of Inter Cars Ukraine in finding a new workplace, and we help their families find a new home.
The situation in Ukraine showed we have to be prepared for a variety of scenarios, still, we are unable to predict certain sequences of events. Pandemic, war – these are factors which make running a business immensely difficult. In an unstable environment, it is difficult to look forward.
However, we do believe we will be able to outgrow the market and that in each of the countries in which we do business we will strengthen our leadership position. It is our business goal for the upcoming years. I would also very much like us to continue to foster a partner business attitude with respect to our employees, suppliers and other stakeholders. I have every confidence that a dialogue, sincerity and trust are the foundations able to support even the most massive building. Without them, Inter Cars as we know it would not exist.
Ladies and Gentlemen,
to sum up my letter, on behalf of myself and the entire team of Inter Cars Group Employees, let me express my thanks to our customers and Partners for their cooperation, and to our Shareholders for the trust and motivation which drive us every day to act effectively.
Yours sincerely,
Maciej Oleksowicz
President of the Management Board of Inter Cars SA