Slide 1: Year-end Report Q4 January–December 2018
Year-end Report Q4 January–December 2018 Mårten Andersson, CEO Mattias Björk, CFO 21 February 2019
Slide 2: Financial development in Q4 2018
Financial development in Q4 2018 Net sales, SEK m Net sales 2000 1800 1600 SEK 1,831 m (1,517) 1400 1200 1000 2016 2017 800 2018 600 400 EBITA 200 0 SEK 173 m (142) Q1 Q2 Q3 Q4 200 EBITA, SEK m 180 160 140 120 2016 100 2017 80 2018 60 40 20 0 Q1 Q2 Q3 Q4 2
Slide 3: Q4 2018 in brief
Q4 2018 in brief • Volati ended the year with strong growth in sales and EBITA, up 21% and 22% respectively. Acquisitions provided significant contributions to the results. • Earnings per share up 37%. • Strong EBITA growth in business area Industry and stable development in business area Trading. C
Slide 4: Financial development, full-year 2018
Financial development, full-year 2018 7 000 Net sales Net sales LTM, SEK m 6 000 5 000 SEK 6,084 m (4,356) 4 000 3 000 2 000 1 000 EBITA 0 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q2 Q3 Q4 SEK 433 m (377) 2015 2016 2017 2018 Cash conversion EBITA LTM, SEK m 500 86% (112) 450 400 350 300 250 200 Net de
Slide 5: 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. 7 000 433 450 377 400 6 000 326 318 350 5 000 300 4 000 Net sales 227 250 EBITA 215 3 000 200 142 150 2 000 89 99 76 69 100 60 1 000 28 16 50 7 - - 2004
Slide 6: 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 7: Business area Trading
Business area Trading Q4 2018 in brief • Positive effects from the acquisition of T-Emballage in late 2017. • Existing operations have developed in line with last year, despite currency head-winds since most business units import their products. • Continued good market conditions. Oct–Dec Oct–Dec Fu
Slide 8: Business area Consumer
Business area Consumer Q4 2018 in brief • Profits in Besikta affected by changed car inspection regulations, effectively increasing the inspection interval from 12 to 14 months. Positive price adjustments implemented to secure profitability going forward. • Activities for increased operational effic
Slide 9: Business area Akademibokhandeln
Business area Akademibokhandeln Q4 2018 in brief • Strong profit development. Measures to improve profitability are yielding significant results. • Strong customer offering and lower fixed costs, leveraging our presence in all channels and formats. • Loyalty club reached 2 million members in January
Slide 10: Business area Industry
Business area Industry Q4 2018 in brief • Strong growth in net sales and EBITA. • Growth driven both by the acquisition of S:t Eriks, and that existing operations developed well in terms of sales and profitability. • High operational efficiency and continued good market conditions. Oct–Dec Oct–Dec F
Slide 11: Improved capital structure
Improved capital structure • Volati has entered into a new credit facilities agreement with Nordea and will finance early redemption of Akademibokhandeln’s bonds ‒ Bond redemption and the new credit facility agreement decreases financial costs by approx. SEK 15 million annually ‒ Provides expanded c
Slide 12: Well-positioned for additional acquisitions
Well-positioned for additional acquisitions Acquisitions in 2017 and 2018 Volati’s acquisitions Acquisition multiples • Adding approx. SEK 204 million 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 4.7x 4.8x • Financial structure, strong cash flow 4.5
Slide 13: 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 % SEK m SEK m 6 084 1300 112% 2.8 2,8 1100 94% 2.3 949 2,3 89% 86% 4 356 900 85% 762 1.7 1,8 756 700 619 1,3 62% 3 206 1.2 500 0,8 2 188 300 (265) 0,3 1 656 100 -0,2 377 433 -100 (0.6) 318 -0,7 215
Slide 14: 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 EBITA
Slide 15: Conclusions and steps ahead
Conclusions and steps ahead Strong sales and profit growth in Q4 • Overall healthy development in operations. • All indicators developed well. Reinforced business area organisation • Provides management resources to achieve strategic plans and value creation in the business units – increased focus o
Slide 16: A growing Swedish industrial group
A growing Swedish industrial group 16
Slide 17: Appendix
Appendix volati.
Slide 18: 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 19: 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 20: 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 • Sales from own and franchise stores together with e-commerce channels (akademibokhandeln.se) – 107 pro
Slide 21: 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 22: Income statement
Income statement SEKm 2016 2017 2018 Net sales 3,207 4,356 6,084 Raw materials and supplies -1,526 -2,228 -3,375 Other external costs -516 -684 -853 Personnel costs -771 -983 -1,318 Other income 4 7 18 Other operating costs -12 -9 -4 EBITDA 385 459 552 Depreciation -67 -82 -119 EBITA 318 377 433 Acq
Slide 23: Balance sheet
Balance sheet SEKm 31 Dec 2016 31 Dec 2017 31 Dec 2018 Intangible fixed assets 1,840 2,934 3,126 Tangible fixed assets 191 241 404 Financial fixed assets 8 10 8 Deferred tax assets 42 59 59 Total non-current assets 2,081 3,243 3,597 Inventory 387 610 895 Current assets 404 715 839 Assets related to
Slide 24: Cash flow statement
Cash flow statement SEKm 2016 2017 2018 Profit before tax 254 305 316 Adjustment for non-cash items 122 146 204 Interest paid -39 -21 -39 Interest received 0 1 2 Cash taxes -41 -62 -53 Cash flow before changes in working capital 295 369 430 Change in inventories -29 -18 -62 Change in operating recei
Slide 25: Net debt and working capital
Net debt and working capital SEKm 31 Dec 2016 31 Dec 2017 31 Dec 2018 Net debt Cash and cash equivalents -371 -438 -241 Unrealised derivate instruments assets 0 0 0 Pension liabilities 2 2 2 Non-current interest-bearing liabilities 54 984 974 Current interest-bearing liabilities 73 106 241 Unrealise
Slide 26: 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