Slide 1: Interim report Q2 January–June 2018
Interim report Q2 January–June 2018 Mårten Andersson, CEO Mattias Björk, CFO 17 August 2018
Slide 2: Financial development in Q2 2018
Financial development in Q2 2018 Net sales, SEKm Net sales 1600 1400 SEK 1,428m (872) 1200 1000 2016 800 2017 600 2018 400 EBITA 200 0 SEK 86m (99) Q1 Q2 Q3 Q4 160 EBITA, SEKm 140 120 100 2016 80 2017 60 2018 40 20 0 Q1 Q2 Q3 Q4 2
Slide 3: Q2 2018 in brief
Q2 2018 in brief • Volati's operations have developed well in the quarter with variations between business areas. • Net sales increased by 64 percent – a result of last years acquisitions as well as organic sales growth. • The Industry business area showed strong sales and earnings growth as a resul
Slide 4: Long-term perspective
Long-term perspective • Average organic EBITA growth over the last five years 8 percent (2013-2017). • During 2017 and 2018 SEK 204m in EBITA added through acquisitions. 8 000 500 6 771 450 7 000 400 6 000 5 524 350 5 000 4 356 300 Net sales EBITA 4 000 250 3 206 200 3 000 2 188 150 2 000 1 509 1 65
Slide 5: Financial development LTM Q2, 2018
Financial development LTM Q2, 2018 6 000 Net sales Net sales LTM, SEKm 5 000 SEK 5,524m 4 000 3 000 2 000 (4,356 FY2017) 1 000 0 Q4 Q1 Q4 Q1 Q2 Q3 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 EBITA 2014 2015 2016 2017 2018 SEK 374m (377 FY2017) EBITA LTM, SEKm Cash conversion 450 400 350 82% (112 FY2017) 300 250 200
Slide 6: Events after the reporting period – Acquisition of S:t Eriks
Events after the reporting period – Acquisition of S:t Eriks S:t Eriks in brief Acquisition in brief • A leading manufacturer of concrete • Acquired 100% of the shares. products and natural stone for • Purchase consideration of SEK 260- infrastructure and landscape 295m, depending on an additional a
Slide 7: Business area Trading
Business area Trading Q2 2018 in brief • Positive effects from the acquisition of T-Emballage in late 2017. • Stable underlying development. Full Apr–jun Apr–jun Jan–jun Jan–jun LTM year 2018 2017 2018 2017 Q2 2018 2017 32% Net sales, SEKm 607 428 1,075 767 1,922 1,615 EBITDA, SEKm 58 45 81 62 155 1
Slide 8: Business area Consumer
Business area Consumer Q2 2018 in brief • Lower net sales and EBITA due to somewhat challenging market conditions for some business units. • Strategic evaluations and actions in operations with challenges is proceeding according to plan. Full Apr–jun Apr–jun Jan–jun Jan–jun LTM year 2018 2017 2018 2
Slide 9: Business area Akademibokhandeln
Business area Akademibokhandeln Q2 2018 in brief • Higher costs due to market-related investments to drive the shift towards increased e-commerce and to exploit the potential of the company's strong loyalty club of 1.8 million customers. • Significant increase in the share of sales from e-commerce.
Slide 10: Business area Industry
Business area Industry Q2 2018 in brief • Strong growth in net sales and EBITA. • Continued favourable market position. • Increased margins from measures implemented during 2017 and Q1 2018. Full Apr–jun Apr–jun Jan–jun Jan–jun LTM year 2018 2017 2018 2017 Q2 2018 2017 26% Net sales, SEKm 257 190 47
Slide 11: 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 priciples. …is used for Strong cash flow in further acquisitions …at reasonable
Slide 12: Strong focus on long-term value creation with strengthened organisation
Strong focus on long-term value creation with strengthened organisation In charge of platform acquisitions Trading Consumer Akademibokhandeln Industry Håkan Karlström Johan Ekström Maria Edsman Nicklas Margård Add-on acquisitions, business development and operations follow-up 12
Slide 13: Well-positioned for additional acquisitions
Well-positioned for additional acquisitions Acquisitions in 2017 and 2018 Volati’s acquisitions Acquisition multiples • Adding approx. SEK 204m in 7.9x EBITA. 6.9x 7.0x 6.1x Ready for further acquisitions 5,9x 5.1x 5.3x 5.6x 5.5x 5.2x 5,5x • Financial structure and balanced 4.7x 4.8x 4.5x 4.4x net d
Slide 14: Rather turn down a good deal than risk making a bad one
”Rather turn down a good deal than risk making a bad one.” PATRIK WAHLÉN 14
Slide 15: Net debt/EBITDA ratio well within limits of financial targets
Net debt/EBITDA ratio well within limits of financial targets Cash conversion Sales and EBITA Net debt/(cash) % SEKm SEKm 1100 112% 6 771 2.8 2,8 756 860 94% 5 733 900 2.4 5 524 2.3 2,3 90% 89% 82% 762 85% 700 1.7 1,8 619 4 356 483 1,3 62% 500 1.2 3 206 0,8 300 2 188 (265) 0,3 1 509 1 656 100 -0,2 4
Slide 16: Moving towards our financial targets
Moving towards our 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 net E
Slide 17: Conclusions and steps ahead
Conclusions and steps ahead Reinforced business area organisation • Enables efficient management of acquisitions • Provides management resources to achieve the strategic plans and value creation in the business units Capital structure for future acquisitions • Good position for continuing our acquis
Slide 18: A growing Swedish industrial group
A growing Swedish industrial group 18
Slide 19: Appendix
Appendix volati.
Slide 20: Business area Trading
Business area Trading Overview Island • Organised in 7 business units Integrated business model • 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, C
Slide 21: Business area Consumer
Business area Consumer Overview • Organised in 3 business units 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 responsibl
Slide 22: Business area Akademibokhandeln
Business area Akademibokhandeln Overview • Organised in 1 business unit Sweden’s leading book retailer • The only successful omni-channel player – # 1 in physical bookstores – # 2 online retailer – 37% total market share • Sales from own and franchise stores together with e-commerce channels (akadem
Slide 23: Business area Industry
Business area Industry Overview Thailand • Organised in 3 business units 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 24: Income statement
Income statement SEKm 2016 2017 Q2 2018 LTM Q2 2018 Net sales 3,207 4,356 5,524 1,428 Raw materials and supplies -1,526 -2,228 -3,024 -784 Other external costs -516 -684 -845 -216 Personnel costs -771 -983 -1,183 -312 Other income 4 7 14 1 Other operating costs -12 -9 -10 -2 EBITDA 385 459 475 114 D
Slide 25: Balance sheet
Balance sheet SEKm 31 Dec 2016 31 Dec 2017 30 Jun 2018 Intangible fixed assets 1,840 2,934 2,948 Tangible fixed assets 191 241 236 Financial fixed assets 8 10 10 Deferred tax assets 42 59 89 Total non-current assets 2,081 3,243 3,283 Inventory 387 610 624 Current assets 404 715 940 Assets related to
Slide 26: Cash flow statement
Cash flow statement SEKm 2016 2017 Q2 2018 LTM Q2 2018 Profit before tax 254 305 261 55 Adjustment for non-cash items 122 146 184 53 Interest paid -39 -21 -37 -12 Interest received 0 1 2 0 Cash taxes -41 -62 -83 -20 Cash flow before changes in working capital 295 369 327 77 Change in inventories -29
Slide 27: Net debt and working capital
Net debt and working capital SEKm 31 Dec 2016 31 Dec 2017 Q2 2018 LTM Net debt Cash and cash equivalents -371 -438 -275 Unrealised derivate instruments assets 0 0 0 Pension liabilities 2 2 2 Non-current interest-bearing liabilities 54 984 967 Current interest-bearing liabilities 73 106 195 Unrealise
Slide 28: Definitions of key metrics
Definitions of key metrics Metric Explanation Adjusted Explanation Business area return on capital employed (BA BA EBITA in relation to BA capital employed - - ROCE) Cash conversion excluding capex related to Besikta IT Cash conversion Operating cash flow in relation to EBITDA Adj. cash conversion i