Slide 1: Interim Report Q3 January–September 2019
Interim Report Q3 January–September 2019 Mårten Andersson, CEO Andreas Stenbäck, CFO 24 October 2019
Slide 2: Financial development in Q3 2019
Financial development in Q3 2019 Net sales 2000 1800 Net sales, SEK m SEK 1,711 m (1,470) 1600 1400 1200 2017 1000 2018 800 2019 EBITA 600 400 SEK 153 m (123) 200 0 Q1 Q2 Q3 Q4 200 Organic EBITA growth 180 EBITA, SEK m 160 + 4% 140 120 2017 100 2018 80 2019 60 40 20 0 Q1 Q2 Q3 Q4 2
Slide 3: Q3 2019 in brief
Q3 2019 in brief • EBITA increased by 24 percent and net sales by 16 percent. • Acquisitions and a good performance in existing operations contributed to the positive developments. Organic EBITA growth was 4 percent. • Add-on acquisition in business area Trading – Väggmaterial AB. • Increased inflow
Slide 4: Financial development, LTM Q3 2019
Financial development, LTM Q3 2019 Net sales 8 000 7 000 Net sales LTM, SEK m SEK 6,863 m 6 000 5 000 4 000 (6,084 full-year 2018) 3 000 2 000 1 000 EBITA 0 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 SEK 492 m 2015 2016 2017 2018 2019 (433 full-year 2018) EBITA LTM, SEK m 600 Cash conversion 50
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. 492 8 000 500 433 450 7 000 377 400 6 000 326 318 350 5 000 300 Net sales EBITA 4 000 227 250 215 200 3 000 142 89 150 2 000 99 76 69 100 60 1 000 28 16
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 Q3 2019 in brief • Increased net sales but slightly lower EBITA compared with last year. • Successful work with cost efficiencies and price to meet the challenges of a weaker Swedish Krona. • Continued good demand for the business area's products during the quarter. Jul–Sep Jul
Slide 8: Business area Consumer
Business area Consumer Q3 2019 in brief • EBITA growth of 22 percent. • We have managed the challenges from the changed car inspection regulations in a good way. Profitability in the business has developed positively and the market position is strong. • Impairment of goodwill and intangible assets o
Slide 9: Business area Akademibokhandeln
Business area Akademibokhandeln Q3 2019 in brief • EBITA growth of 25 percent. • Sales have increased due to good demand for the core product range and a strong development within the non-books range. • Continued positive contributions from work on purchasing and cost efficiencies. • The e-commerce
Slide 10: Business area Industry
Business area Industry Q3 2019 in brief • EBITA growth of 11 percent. • Overall, operations have developed positively. • Contributions from the acquisition of S:t Eriks. • A part of the operations is affected among other things by natural fluctuations in demand due to project sales. These fluctuatio
Slide 11: Well-positioned for further acquisitions
Well-positioned for further acquisitions Successful acquirer • Proven ability to make major acquisitions, integrate acquired companies and deliver on the investment hypothesis. 383 Operating cash flow, Q4 2018 (SEK million) Ready for further acquisitions • Strong inflow of companies for evaluation d
Slide 12: Add-on acquisitions in 2019
Add-on acquisitions in 2019 • Add-on acquisitions are an important part of Volati’s strategy to create long- term value growth. They reinforce the existing business units’ market positions and add further value through synergies. One of the major natural Stenentreprenader Business area Industry ston
Slide 13: Key financial performance
Key financial performance Cash conversion Sales and EBITA Net debt % SEK m SEK m 112% 6,863 2,8 1500 6,084 1,290 94% 1300 2.3 2.2 2,3 89% 86% 949 1100 85% 1.7 1,8 76% 4,356 900 619 756 1,3 700 1.2 3,206 0,8 500 2,188 (265) 0,3 300 -0,2 100 433 492 (0.6) 377 -0,7 227 318 -100 -300 -1,2 2015 2016 2017
Slide 14: 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 15: Conclusions and steps ahead
Conclusions and steps ahead A solid Q3 • Growth in net sales and EBITA • Overall, operations developed positively Strong business area organisation • Provides management resources to achieve strategic plans and value creation in the business units • Enables efficient management of acquisitions and e
Slide 16: A growing Swedish industrial group
A growing Volati – a growing Swedish Swedish Industrial industrial Group group 16
Slide 17: Appendix
Appendix volati.
Slide 18: 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 19: 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 20: 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 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 Q3 2019 Q3 2019 LTM 2018 Net sales 1,711 6,863 6,084 Raw materials and supplies -965 -3,798 -3,375 Other external costs -157 -729 -853 Personnel costs -347 -1,537 -1,318 Other income 15 35 18 Other operating costs -4 -6 -4 EBITDA 253 828 552 Depreciation -101 -335 -119 EBITA 15
Slide 23: Balance sheet
Balance sheet SEKm 30 Sep 2019 30 Sep 2018 31 Dec 2018 Intangible fixed assets 2.831 3.200 3,126 Tangible fixed assets 328 397 404 Right-of-use assets 872 - - Financial fixed assets 7 7 8 Deferred tax assets 55 98 59 Total non-current assets 4,093 3,703 3,597 Inventory 937 877 895 Current assets 1,0
Slide 24: Cash flow statement
Cash flow statement SEKm Q3 2019 Q3 2019 LTM 2018 Profit before tax -206 26 316 Adjustment for depreciation and impairments 442 730 186 Adjustment for other non-cash items -1 29 18 Interest paid -18 -77 -39 Interest received 0 1 2 Cash taxes -10 -45 -53 Cash flow before changes in working capital 20
Slide 25: Net debt and working capital
Net debt and working capital SEKm Q3 2019 Q3 2018 31 Dec 2018 Net debt Cash and cash equivalents -175 -141 -241 Unrealised derivate instruments assets 0 0 0 Pension liabilities 2 2 2 Non-current interest-bearing liabilities 642 975 974 Current interest-bearing liabilities 821 386 241 Unrealised deri
Slide 26: 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