Slide 1: Interim Report Q2 January–June 2019
Interim Report Q2 January–June 2019 Mårten Andersson, CEO Mattias Björk, CFO 16 August 2019
Slide 2: Financial development in Q2 2019
Financial development in Q2 2019 Net sales 2000 Net sales, SEK m 1800 SEK 1,776 m (1,428) 1600 1400 1200 2017 1000 2018 800 2019 EBITA 600 400 SEK 129 m (86) 200 0 Q1 Q2 Q3 Q4 200 EBITA, SEK m EBITA growth 180 160 + 50% 140 120 2017 100 2018 80 2019 60 40 20 0 Q1 Q2 Q3 Q4 2
Slide 3: Q2 2019 in brief
Q2 2019 in brief • A very good quarter. EBITA increased by 50 percent and net sales by 24 percent. Acquisitions and a good performance in our existing operations contributed to the positive developments. • All business areas reported improved EBITA earnings for the quarter compared to the same perio
Slide 4: Q2 2019 in brief cont’d
Q2 2019 in brief cont’d • During the quarter we have evaluated, a significant amount of potential acquisition candidates, primarily add-on acquisitions for our existing business units. However, we can note that price expectations are currently high. This has meant that we have refrained from going a
Slide 5: Financial development, LTM Q2 2019
Financial development, LTM Q2 2019 Net sales 7 000 6 000 Net sales LTM, SEK m SEK 6,622 m 5 000 4 000 3 000 (6,084 full-year 2018) 2 000 1 000 0 EBITA Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q4 Q1 Q2 SEK 463 m 2015 2016 2017 2018 2019 (433 full-year 2018) EBITA LTM, SEK m 500 450 Cash conversion 400
Slide 6: Long-term perspective
Long-term perspective • Compound Annual Growth Rate of EBITA 2004-2018: 34 per cent. • Average organic EBITA growth between 2013-2018: 7 per cent. 7 000 463 500 433 450 6 000 377 400 5 000 326 318 350 300 4 000 Net sales EBITA 227 250 215 3 000 200 142 2 000 89 150 99 76 69 100 60 1 000 28 50 7 16 -
Slide 7: A value-adding business model
A value-adding business model Volati’s success has been created with a tried and tested business model that is the same today as when the company was founded in 2003. It is based on four mutually reinforcing fundamental principles. …is used for Strong cash flow in further acquisitions …at reasonable
Slide 8: Business area Trading
Business area Trading Q2 2019 in brief • EBITA growth of 10 percent. • Strengthened operations in companies with own brands have improved margins. • Successful work with cost efficiencies and price to meet the challenges of a weaker Swedish Krona. • Slightly lower net sales due to the ongoing consol
Slide 9: Business area Consumer
Business area Consumer Q2 2019 in brief • EBITA growth of 11 percent. • We have managed the challenges from the changed car inspection regulations in a good way. Profitability in the business has developed positively. • We still have challenges in two of the business units. Measures are ongoing and
Slide 10: Business area Akademibokhandeln
Business area Akademibokhandeln Q2 2019 in brief • EBITA improved by SEK 8 million. • Continued positive contributions from work on purchasing and cost efficiency. • Sales have increased in a stable market by broadening the product offering and by leveraging our presence in all channels and formats.
Slide 11: Business area Industry
Business area Industry Q2 2019 in brief • EBITA growth of 59 percent. • Contributions from the acquisition of S:t Eriks. • S:t Eriks continues to develop well and to deliver on our investment hypothesis. • The dry summer in much of Europe has negatively affected the part of the business that rents o
Slide 12: Well-positioned for further acquisitions
Well-positioned for further acquisitions Successful acquirer Volati’s acquisitions Acquisition multiples • Proven ability to make major 7.9x acquisitions, integrate acquired 7.0x companies and deliver on the 6.9x investment hypothesis. 5,9x 5.6x 5.5x 6.1x 5.5x 5.3x 5.2x 5.1x 5.0x 4.7x 4.8x 4.5x 4.4x
Slide 13: Add-on acquisitions
Add-on acquisitions • Acquired Stenentreprenader i Hessleholm AB and Mundus Maskin AB, with combined sales of SEK 125 million and an EBITDA of SEK 16 million in 2018. • Add-on acquisitions are an important part of Volati’s strategy to create long- term value growth. They reinforce the existing busin
Slide 14: Key financial performance
Key financial performance Cash conversion Sales and EBITA Net debt % SEK m SEK m 6,622 6,084 112% 1500 1,404 2,8 94% 2.4 2.3 1300 2,3 89% 86% 949 4,356 1100 85% 1.7 1,8 69% 900 619 756 1,3 3,206 700 1.2 0,8 500 2,188 (265) 0,3 300 -0,2 100 377 433 463 (0.6) 318 -0,7 227 -100 -300 -1,2 2015 2016 2017
Slide 15: Financial targets
Financial targets EBITA growth Cash Capital structure Return on Common equity conversion adjusted equity dividend policy SEK 700m >85% <3.0x >20% ~10-30% (by 2019) (long-term) (long-term) Reach an adjusted Annual cash Volati’s long-term Long-term reach a Distribute 10-30% of EBITA of SEK 700m at con
Slide 16: Conclusions and steps ahead
Conclusions and steps ahead A very good Q2 • Strong profit development in all business areas. • Overall operations are developing positively. Strong business area organisation • Provides management resources to achieve strategic plans and value creation in the business units • Enables efficient mana
Slide 17: Volati – a growing Swedish industrial group
A growing Volati – a growing Swedish Swedish Industrial industrial Group group 17
Slide 18: Appendix
Appendix volati.
Slide 19: Business area Trading
Business area Trading Integrated business model Island • Focused on four market segments: – Construction consumables and hardware (primarily B2B) o Clients include companies within the Nordic professional and do-it-yourself markets such as Ahlsell, Byggmax, Coop, DT Group, Woody Bygghandel and XL By
Slide 20: Business area Consumer
Business area Consumer Strong local entrepreneurship • Business units focused on B2C niches • Strong local entrepreneurship combined with collaboration in selected areas such as database marketing, digitalisation and e-commerce • Business area head responsible for implementing Volati’s central initi
Slide 21: Business area Akademibokhandeln
Business area Akademibokhandeln Sweden’s leading book retailer • The only successful omni-channel player – # 1 in physical bookstores – # 2 online retailer • Sales from own and franchise stores together with e-commerce channels (akademibokhandeln.se) – 107 profitable physical stores across Sweden (8
Slide 22: Business area Industry
Business area Industry Overview • Organised in 4 business units Thailand Strong local entrepreneurship • Business units focused on B2B niches • Strong local entrepreneurship combined with collaboration in selected areas such as international expansion, lean manufacturing and HR • Business area head
Slide 23: Income statement
Income statement SEKm Q2 2019 Q2 2019 LTM 2018 Net sales 1,776 6,622 6,084 Raw materials and supplies -981 -3,663 -3,375 Other external costs -164 -774 -853 Personnel costs -406 -1,483 -1,318 Other income 4 25 18 Other operating costs -1 -1 -4 EBITDA 229 727 552 Depreciation -100 -264 -119 EBITA 129
Slide 24: Balance sheet
Balance sheet SEKm 30 Jun 2019 30 Jun 2018 31 Dec 2018 Intangible fixed assets 3,180 2,948 3,126 Tangible fixed assets 333 236 404 Right-of-use assets 918 - - Financial fixed assets 6 10 8 Deferred tax assets 54 90 59 Total non-current assets 4,491 3,284 3,597 Inventory 935 624 895 Current assets 1,
Slide 25: Cash flow statement
Cash flow statement SEKm Q2 2019 Q2 2019 LTM 2018 Profit before tax 91 328 316 Adjustment for non-cash items 138 369 204 Interest paid -24 -67 -39 Interest received 0 2 2 Cash taxes -6 -54 -53 Cash flow before changes in working capital 200 577 430 Change in inventories 5 -89 -62 Change in operating
Slide 26: Net debt and working capital
Net debt and working capital SEKm Q2 2019 Q2 2018 31 Dec 2018 Net debt Cash and cash equivalents -104 -275 -241 Unrealised derivate instruments assets - 0 0 Pension liabilities 2 2 2 Non-current interest-bearing liabilities 666 967 974 Current interest-bearing liabilities 854 195 241 Unrealised deri
Slide 27: Definitions of key metrics
Definitions of key metrics Metric Explanation Adjusted Explanation Business area return on BA EBITA excluding IFRS16 in relation to BA capital employed capital employed (BA - - excluding IFRS16 ROCE) Cash conversion Operating cash flow in relation to EBITDA excluding IFRS16 - - Operating profit befo