Volati Year-end report for January–December 2016
- Net sales totalled SEK 779.5m (731.4)
- EBITDA amounted to SEK 90.2m (94.7)
- EBITA amounted to SEK 72.8m (75.4)
- EBITA excluding items affecting comparability2) was SEK 83.4m (75.6)
- Organic growth in EBITA totalled 12.4%
- Net profit after tax amounted to SEK 45.5m (44.8)
- Net profit attributable to the Parent Company’s shareholders amounted to SEK 44.7m (38.5)
- Earnings per common share after deduction of preference share dividends amounted to SEK 0.43 (0.56)
- Cash flows from operating activities totalled SEK 135.6m (134.3)
- On 30 November 2016, a new issue of common shares was completed and the common and preference shares were listed on the Nasdaq Stockholm. The proceeds from the new issue totalled SEK 1,210m before issue costs
- Net sales totalled SEK 3,206.5m (2,187.6)
- EBITDA amounted to SEK 385.4m (274.5)
- EBITA amounted to SEK 318.4m (227.3)
- EBITA excluding items affecting comparability2) was SEK 352.2m (218.9)
- Organic growth in EBITA totalled 28.1%
- Net profit after tax was SEK 200.5m (125.9)
- Net profit attributable to the Parent Company’s shareholders amounted to SEK 196.2m (92.7)
- Earnings per common share after deduction of preference share dividends amounted to SEK 2.07 (1.37)
- Cash flows from operating activities totalled SEK 285.2m (247.0)
Events after the reporting period.
The Board proposes a dividend to holders of common shares of SEK 40.2m, corresponding to SEK 0.50 per common share and a dividend of SEK 64.2m to holders of preference shares, corresponding to SEK 40.00 per preference share. The preference share dividend is payable at SEK 10.00 per share each quarter until the 2018 Annual General Meeting
COMMENTS FROM THE CEO
Another stride forward.
We can sum up 2016 as successful and active year for Volati. Above all else, this was a year of continued growth. We completed five acquisitions of solid operations at reasonable valuations. In parallel, our existing business units developed well and posted organic earnings growth of 28%. Moreover, a successful new share issue at the end of the year and the implementation of a new operating structure means we are well prepared for continued growth and development of Volati.
A strong trend
Volati developed strongly in 2016, and our twelve business units performed well. Altogether, we increased net sales by almost 47% to slightly more than SEK 3.2 billion and EBITA rose 40% to SEK 318m. We also posted a positive fourth-quarter earnings trend with organic growth in EBITA of 12%1. It is pleasing to note that organic growth was possible without any major capital investments in operations, which means a continued healthy cash conversion rate.
Focused on the long term
A key component of our business model is continuously working with refining operations in a wise and efficient manner — improving a little every day. The strong organic growth during the year demonstrates that, together as a Group, we have succeeded well with this. We were helped by high demand for Corroventa’s dehumidifiers and a positive trend for Besikta, with the successful integration of the acquired ClearCar stations.
Our focus at Volati is to enable the success of our business units. Important building blocks in our operating model is therefore; decentralised leadership, clear management and follow-up combined with support for key functions. Our business units should experience the best imaginable support from Volati in the business units’ respective areas of focus. This could be investments for expansion, recruitment, skills reinforcement and complementary acquisitions.
During the year, we continued successfully with our long-term efforts to secure the right leadership for our business units through the Volati Management Program for future managers and the Volati Academy for our most senior management.
Successful new issue and listing
The successful new issue of common shares and the subsequent listing on Nasdaq Stockholm completed in November 2016 was a milestone for Volati. Volati thereby raised funds of SEK 1,210m and gained more than 6,000 new holders of common shares. Volati now has net cash position of SEK 264m and unutilised credit facilities of SEK 750m, which provides us with capacity for continued acquisitions. In thirteen years, Volati has developed in to an industrial group with twelve business units and operations in 16 countries. Volati’s listing is a wonderful achievement and ensures that we are able to continue with our acquisition strategy — to buy solid companies at reasonable valuations. To continue this journey together with so many new shareholders is very motivating.
We are continuing our efforts to evaluate potential acquisitions — we look at a total of more than 100 companies each year to identify the acquisition opportunities that we assess as meeting our requirements in terms of valuation, stability and development potential. In today’s market, our assessment is that acquisition multiples have been driven up to historic highs, particularly for slightly larger companies. However, looking back at 2016, we can note that despite this, we were able to complete five add-on acquisitions at attractive valuations.
In conjunction with the listing, new financial targets were set for Volati that include increasing underlying EBITA to SEK 700m before the end of 2019 — in part, through organic growth of 5% and in part, through acquisitions. According to these financial targets, the average return on equity is to exceed 20% per year. In 2016, it was 25%. However, as a result of the new share issue our capital base will grow and in the short term we will experience a decrease in the return, but as we complete acquisitions, we will achieve long-term returns. With the listing and the new issue behind us, we look forward to continue to develop and grow Volati. Our sleeves are already rolled back!
Mårten Andersson, CEO
Mårten Andersson, VD Volati AB, 46 72-735 42 84, firstname.lastname@example.org
Volati AB (publ)
Engelbrektsplan, 114 34 Stockholm, Sweden, Phone: 46 8-21 68 40
Volati is a Swedish industrial group formed in 2003, comprising some 40 operating companies divided into twelve business units organised in three business areas: Trading, Consumer and Industry. Volati acquires mainly companies with proven business models, leading market positions and strong cashflow at reasonable valuations and develops these with an emphasis on long-term value creation. Volati’s strategy is to build on the identity and entrepreneurial spirit of the companies, adding, leadership, expertise, processes and financial resources. Volati has operations in 16 countries, with a total of about 1,200 employees and annual sales of approximately SEK 3.2bn. Volati’s ordinary shares and preference shares are listed on Nasdaq Stockholm. Further information is available at www.volati.se.