Slide 1: Interim report Q3 January–September 2018
Interim report Q3 January–September 2018 Mårten Andersson, CEO Mattias Björk, CFO 6 November 2018
Slide 2: Financial development in Q3 2018
Financial development in Q3 2018 Net sales, SEKm Net sales 1600 1400 SEK 1,470m (1 224) 1200 1000 2016 800 2017 600 2018 400 EBITA 200 0 SEK 123m (96) 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: Q3 2018 in brief
Q3 2018 in brief • All key ratios developed in a positive direction with strong growth in both sales (20%) and EBITA (29%). Earnings per share up 60% • Positive developments in all business areas • Organic EBITA growth in business areas Trading, Consumer and Industry, despite weather related challen
Slide 4: Financial development LTM Q3, 2018
Financial development LTM Q3, 2018 7 000 Net sales Net sales LTM, SEKm 6 000 5 000 SEK 5,770m 4 000 3 000 (4,356 FY2017) 2 000 1 000 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 EBITA 2014 2015 2016 2017 2018 SEK 401m (377 FY2017) EBITA LTM, SEKm Cash conversion 450 400 350 88% (112 FY2017) 300
Slide 5: Long-term perspective
Long-term perspective • Average organic EBITA growth over the last five years 8 percent (2013-2017). 8 000 500 6 761 450 7 000 400 6 000 5 770 350 5 000 4 356 300 Net sales EBITA 4 000 250 3 206 200 3 000 2 188 150 2 000 1 509 1 656 100 1 036 1 045 1 000 536 533 715 253 376 50 83 164 - - 2004 2005 2
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 priciples. …is used for Strong cash flow in further acquisitions …at reasonable
Slide 7: Business area Trading
Business area Trading Q3 2018 in brief • Positive effects from the acquisition of T-Emballage in late 2017 • Operations developed strongly, especially during the latter part of the quarter following a slow start, influenced by the warm summer weather in Sweden Full Jul–Sep Jul–Sep Jan–Sep Jan–Sep LT
Slide 8: Business area Consumer
Business area Consumer Q3 2018 in brief • EBITA growth • Activities for increased operational efficiency are being carried out • Long-term strategic plans in place for operations facing challenges Full Jul–Sep Jul–Sep Jan–Sep Jan–Sep LTM year 2018 2017 2018 2017 Q3 2018 2017 26% Net sales, SEKm 214
Slide 9: Business area Akademibokhandeln
Business area Akademibokhandeln Q3 2018 in brief • Lower profits due to higher costs for market-related investments to drive the shift towards increased e- commerce • Measures to improve profitability are in place • Well-positioned to take advantage of a growing market Jul–Sep Jul–Sep Jan–Sep Jan–Se
Slide 10: Business area Industry
Business area Industry Q3 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 Full Jul–Sep Jul–Sep
Slide 11: 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, strong cashflow 4.7x 4.8x 4.5x 4.4x an
Slide 12: 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 1300 112% 6 761 1190 2.8 2,8 1100 94% 5 770 2.4 88% 2.3 2,3 90% 89% 2.1 900 85% 762 1,8 756 4 356 700 619 1,3 62% 1.2 483 3 206 500 0,8 (265) 300 2 188 0,3 1 509 1 656 100 -0,2 4
Slide 13: 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 14: Conclusions and steps ahead
Conclusions and steps ahead Strong sales and profit growth in Q3 • Healthy development in operations • All indicators developed positively Positive results from reinforced business area organisation • Provides management resources to achieve strategic plans and value creation in the business units –
Slide 15: A growing Swedish industrial group
A growing Swedish industrial group 15
Slide 16: Appendix
Appendix volati.
Slide 17: 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 18: 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 19: 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 20: 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 21: Income statement
Income statement SEKm 2016 2017 Q3 2018 LTM Q3 2018 Net sales 3,207 4,356 5,770 1,470 Raw materials and supplies -1,526 -2,228 -3,202 -830 Other external costs -516 -684 -844 -202 Personnel costs -771 -983 -1,223 -292 Other income 4 7 17 6 Other operating costs -12 -9 -8 0 EBITDA 385 459 508 152 Dep
Slide 22: Balance sheet
Balance sheet SEKm 31 Dec 2016 31 Dec 2017 30 Sep 2018 Intangible fixed assets 1,840 2,934 3,200 Tangible fixed assets 191 241 397 Financial fixed assets 8 10 7 Deferred tax assets 42 59 97 Total non-current assets 2,081 3,243 3,702 Inventory 387 610 877 Current assets 404 715 1 121 Assets related t
Slide 23: Cash flow statement
Cash flow statement SEKm 2016 2017 Q3 2018 LTM Q3 2018 Profit before tax 254 305 285 96 Adjustment for non-cash items 122 146 196 51 Interest paid -39 -21 -36 -8 Interest received 0 1 2 1 Cash taxes -41 -62 -90 -19 Cash flow before changes in working capital 295 369 358 120 Change in inventories -29
Slide 24: Net debt and working capital
Net debt and working capital SEKm 31 Dec 2016 31 Dec 2017 Q3 2018 LTM Net debt Cash and cash equivalents -371 -438 -141 Unrealised derivate instruments assets 0 0 0 Pension liabilities 2 2 2 Non-current interest-bearing liabilities 54 984 975 Current interest-bearing liabilities 73 106 386 Unrealise
Slide 25: 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