Jetpak Top Holding AB (publ):Half year report 1 January – 30 June 2024

Second quarter: 1 April – 30 June 2024
 

• Net revenue increased by 10,0 % to 318 838 (289 778) TSEK
• Organic growth amounted to -3,2 % (-12,6 %)
• Gross margin amounted to 31,7 % (31,9 %)
• Adjusted EBITA amounted to 32 430 (33 817) TSEK
• Operating profit amounted to 30 227 (-18 792) TSEK
• Net income amounted to 22 215 (-25 475) TSEK
• Earnings per share, before and after dilution, amounted to 1,82 (-2,09) SEK
• Cash flow from operations amounted to -3 817 (28 958) TSEK
• Cash and cash equivalents amounted to 187 831 (166 673) TSEK
• Net debt in relation to adjusted EBITDA R12: 0,17 (0,30)

Events during the quarter and since the end of the quarter
 

• Pak Logistik Intressenter AB announced on 7 June 2024 a mandatory public offer to the shareholders of Jetpak Top Holding AB (publ) at 93,32 SEK of cash per share.
• The acceptance period for the mandatory offer is currently prolonged until 20 September 2024.
• Notalp Logistik AB announced on 19 June 2024 a voluntary public offer to the shareholders of Jetpak Top Holding AB (publ) at 98,00 SEK in cash per share.
• The acceptance period for the voluntary bid is currently prolonged until 5 September 2024.
• On 5 July 2024, the board of directors issued statements in which the board recommended the shareholders not to accept any of the two public offers.
  
   

Half year: 1 January – 30 June 2024
 

• Net revenue increased by 3,4 % to 619 412 (599 244) TSEK
• Organic growth amounted to -8,4 % (-5,2 %)
• Gross margin amounted to 31,7 % (31,2 %)
• Adjusted EBITA amounted to 56 272 (65 379) TSEK
• Operating profit amounted to 52 471 (11 885) TSEK
• Net income amounted to 36 178 (-766) TSEK
• Earnings per share, before and after dilution, amounted to 2,97 (-0,06) SEK
• Cash flow from operations amounted to 7 253 (26 251) TSEK

The comparison figures within parentheses refer to the corresponding period last year, unless otherwise stated.
 

CEO comments

During the second quarter Jetpak’s main markets remained challenged by a continued low demand and only modestly improved development on freight volumes.
This remained a continued challenge for many players in our logistic industry, as supply chains continued to be negatively impacted by overcapacity and reduced production.
The pricing remained under pressure and some industry segments pursued lower cost by deferred services. Despite challenging market conditions and continued price pressure Jetpak managed to improve our revenue and result compared with the previous quarter, which was very positive considering current market situation.

Jetpak's total revenue for the quarter amounted to 322 275 (293 607) TSEK, corresponding to a growth of 9,8 % (-9,6 %). The growth was mainly driven by our latest acquisitions well as from the Air segment development in Norway.
The underlying organic growth improved to -3,2 % (-12,6 %).

The operating profit amounted to 30 227 (-18 792) TSEK, equal to an operating margin of 9,4 % (-6,4 %).
Jetpak's cash flow from operations amounted to -3 817 (28 958) TSEK. This year’s second quarter was negatively affected by the calendar since quarter end was during a weekend, resulting in significant receivable payments during the first day(s) of the third quarter instead. We expect the full year cash flow from operations to return to normal levels, as our cash flow will improve already from next quarter.
Our cash position remained strong during second quarter and our net debt ratio reached 0,17.

The Express Air segment had net sales of 145 047 (143 931) TSEK, which corresponded to an increase of 0,8 % (-15,2 %), while the gross margin amounted to 40,6 % (40,4 %).

The European business was negatively affected by lower revenues from the spare parts logistics market due to increasing price competition as well as some substitution from air to deferred road-based solutions, which is a result of the decreasing demand and less pressure on supply chain efficiency.

In Sweden, Denmark and Finland we experienced decreasing revenue as a result of the market conditions and the fact that some customers chose more standardized solutions. Especially Finland was challenged by changed product mix, as healthcare related business was down trading. The important Norwegian Air business grew strongly with 11,3 % thanks to up trading current contracts as well as new contracts. 

Within our Air Segment we have not experienced any significant change competition wise,
as we are focusing on high quality and broad service offering in combination with our unique capacity agreements utilizing commercial airline network.

The Express Road segment had net sales of 173 791 (145 847) TSEK, corresponding to a revenue increase of 19,2 % (-3,2 %), and the gross margin increased to 24,6 % (23,7 %).
The segment’s revenue increase was mainly related to the acquisition of Kvalitetstransport and BudAB, which contributed to the revenue development in Norway and Sweden, respectively. In addition, Denmark also contributed positively with increasing revenue from new contracts.
The margin improvement continued to be affected by a more favourable customer mix as well as a previously conducted profitability review and optimization program.

During the quarter there was a continued stable competition within our Road Segment, where we traditionally have experienced a higher exposure to price competition.
Our high quality, cost variability as well as focus on value added services has enabled us to maintain a strong market position. Current analysis of enhanced capacity utilization is expected to enhance our cost efficiency and further strengthen our position.

Despite the negative organic growth and acquisition of lower margin road companies we have managed to maintain a stable overall gross margin by 31,7 % (31,9 %), based on elimination of unprofitable contracts and improved traffic management process as well as increasing air business in Norway.

The consolidated operating profit margin increased to 9,4 % (-6,4 %), which was an improvement from the first quarter’s 7,3 %. This improvement was achieved by a combination of M&A synergies as well as more efficient resource utilization improving our overhead cost ratios from previous quarter.

2023 was a challenging year for the Danish Road business, as downtrading and lost contracts were negatively impacting revenue and profitability. We have successfully conducted an improvement program, where the combination of increasing sales activities and strong cost control is expected to result in significantly

improved results for Denmark Road during 2024.

Our European business is still challenged by decreasing revenues related to partly loss of some larger contracts. An aggressive overhead cost reduction program has been conducted and pipeline has been growing significantly with new customers onboarding in coming months. We expect these measures to improve  profitability during second half of 2024.

The two latest acquired companies BudAB and Kvalitetstransport are developing in accordance with our plans. Kvalitetstransport is now organizationally fully integrated within the Norwegian Road Segment and a harmonized transport management system will be launched during fourth quarter. Both acquired companies were impacted by challenging market conditions during previous quarters, but revenue has stabilized, and plans are in place to realize expected synergies in full, especially in Norway.

Jetpak will continue to pursue profitable M&A growth with focus on time-critical logistics, as the M&A multiples now have come down to more attractive levels. Due to our strong focus on integration of the Norwegian road business, we do not plan to initiate further potential acquisitions before Q4, as we will keep focus on optimizing integration synergies - both operationally and commercially.

We have continued our efforts to counter act on current demand volatility and decreasing volumes.
Our strategic focus areas remain on organic growth as well as on an improved cost efficiency.

Temperature controlled and special services are among our priorities. In addition, we are working intensively on expanding our sales channels by business partner concepts and launching digitalized marketing campaigns. Continuously Improved cost efficiency is a high priority, which especially focus on supplier concepts and enhanced capacity utilization.

Reducing the risks of cyberattacks is a continuous improvement area. During the quarter we have continued enforcing new and stricter IT policies as well as conducted cyber risk training programs for employees.
Our IT systems and firewalls have been further enhanced, which reduces our risk exposure.

We are currently harmonizing our ERP systems across our companies, which will result in more efficient processes and scale benefits in combination with improved transparency and controlling. Our organization is continuously being reviewed to identify improvement areas in terms of organization, processes, competence and improved execution ability.

We are working intensively with our ESG strategy, and we have been member of the UN Global

Compact since 2021 and follow the 10 principles connected to the main focus areas human rights, labor, environment, and anti-corruption.

Environmental issues are an integrated part of our business strategy and strategic focus areas, which also includes the CSRD framework with measurement from 2025 and reporting from 2026.
One part of the ESG strategy is to pursue new, more environmentally friendly technologies.

We are exploring new technologies such as AI, drone transports and CO2 neutral road transport solutions, which will also benefit our cost efficiency program.  In addition, we are aiming at further improving our capacity utilization on the road transport segment. An area which will be supported by enhanced traffic planning and customer support by AI and automated solutions.

Based on the current market conditions, we expect some market recovery from the end of the third quarter of 2024 as we see pipeline slowly increases in both our segments.

Despite the macroeconomic challenges, we maintain our long-term goals for organic growth
and a continuously improved adjusted EBITA.

 

Kenneth Marx,
Chief Executive Officer

Conference call

At 10:00 CET today, Kenneth Marx, CEO and Håkan Mattisson, CFO, will be presenting Jetpak's result for the quarter. The presentation will be held in English.

Please use one of the dial-in numbers below to join the conference call:

Sweden:  +46 (0) 20 089 63 88
Norway:  +47 2 156 3319    
Finland: +358 9 2319 54 36                       
Denmark:  +45 3272 9274 
Germany:  +49 (0) 30 3001 90613     
Belgium:  +32 (0) 2 792 0435  
Netherlands:  +31 (0) 20 794 8428                  
USA:  +1 786 496 5601
UK:  +44 (0) 33 0551 0202

Note that any toll free numbers can only be reached from within each county.

PIN code (same code for all the above dial-in numbers): 206 80 36 #

Please make sure you are connected to the phone conference by calling in a few minutes before the conference begins.

_______________________________________________________________________

The company’s certified advisor is FNCA Sweden AB.

This information was submitted for publication, through the contact person mentioned below,
on 28 August 2024 at 06:30 CET.
This constitutes information that Jetpak Top Holding AB (publ) is required to publish under the EU Market Abuse Regulation.

The full report is attached here below and also available at:
https://jetpakgroup.com/en/investors/financial-reports/       

For further information

Håkan Mattisson, CFO
Phone: +46 8 5558 5220
e-mail: ir@jetpak.com




About Jetpak

Jetpak is a logistic group represented in more than 170 locations around the Nordic region and in Europe. Jetpak has a unique and flexible customer offering based on having access to normally approximately 4,000 daily flight departures, in combination with a comprehensive distribution network with more than 950 delivery vehicles. This is something that makes it possible for Jetpak to deliver the fastest and most comprehensive 24/7/365 same-day logistic service to the market.
This can be further supplemented by a unique customized next-day service for systemized transports.

Segment wise, Jetpak has its business divided into one Express Air segment, where the customers’ fast logistic needs have been solved by an air-based solution, and into one Express Road segment, where the customers’ logistic needs have been solved by a land-based courier transport solution.

The group’s parent company, Jetpak Top Holding AB (publ), is since 5 December 2018 listed on Nasdaq First North Premier Growth Market in Stockholm, Sweden.
The Jetpak share is traded under the short name JETPAK and with the ISIN code SE0012012508.
Please visit: https://jetpakgroup.com