Jetpak Top Holding AB (publ):Interim report 1 January – 31 March 2024

First quarter: 1 January – 31 March 2024
 

• Net revenue decreased by -2,9 % to 300 575 (309 466) TSEK
• Organic growth amounted to -13,4 % (2,9 %)
• Gross margin amounted to 31,7 % (30,6 %)
• Adjusted EBITA amounted to 23 842 (31 562) TSEK
• Operating profit amounted to 22 244 (30 677) TSEK
• Net income amounted to 13 963 (24 706) TSEK
• Earnings per share amounted to 1,15 (2,03) SEK
• Cash flow from operations amounted to 11 070 (-2 706) TSEK
• Cash and cash equivalents amounted to 204 801 (153 079) TSEK
• Net debt in relation to adjusted EBITDA R12: -0,02 (0,40)

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

CEO comments

Jetpak's net revenue for the quarter amounted to 300 575 (309 466) TSEK, corresponding to a negative growth of -2,9 % (4,9 %). 

The operating profit amounted to 22 244 (30 677) TSEK, equal to an operating margin of 7,3 % (9,8 %). Jetpak's cash flow from operations amounted to 11 070 (-2 706) TSEK.

The organic revenue growth of -13,4 % with a decreased operating margin was in line with our expectations and followed the negative revenue trend from last year, where just the first quarter of 2023 had a positive organic growth. We have anticipated this trend to continue during first two quarters of 2024. The challenging market conditions are also underlined by the quarterly reports from large logistic companies indicating large negative deviations on growth and profits.
 

The Express Air segment realized net sales of 134 751 (164 715) TSEK, which corresponded to a decrease of -18,2 % (6,4 %), while the gross margin increased to 38,9 % (38,2 %).

The largest revenue decline within the segment came from Europe and Finland, with revenue declines of

49,1 % and 21,6 %, respectively, which in total represented 14,2 percentage points of the negative segment growth and with Sweden and Norway accounting for the remaining four percentage points.

Our European operations continued to be affected by lower volume and revenues from the spare parts logistics market, where customers have initiated cost-saving programs and changed buying behavior towards deferred road-based solutions. The Nordic countries were negatively affected by a business slow-down, which  expectedly followed the trend from previous quarters.

The Express Road segment had net sales of 165 824 (144 751) TSEK, corresponding to a revenue increase of 14,6 % (4,0 %), with a gross margin increased to 25,7 % (22,2 %). 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. The margin improvement was affected by a changed customer mix and a volume decrease from larger accounts with relatively lower margins. Furthermore, Jetpak conducted a profitability review and ensured mitigating actions related to accounts with unsatisfactory margins.

The current market conditions have resulted in an increased competition especially within our Road Segment, where we see a higher exposure to competition. Based on our high quality and focus on value added services, we have managed to maintain a strong market position. We expect that our ongoing cost efficiency measures and focus on product improvement will further strengthen our position. Within our Air Segment we have not experienced any significant change competition wise, as we are focusing on high quality and unique service  offering.

Despite negative growth we managed to achieve increased gross margin by 31,7 % (30,6 %), based on elimination of unprofitable contracts and improved traffic management process and resource utilization mainly within the Road segment.

Operating profit margin decreased to 7,3 % (9,8 %) mainly due to the market driven negative revenue growth in combination with an increased overhead cost ratio. The increased overhead cost ratio is caused by the negative revenue growth in combination with increased staffing costs and integration costs related to acquisitions. Synergies potential will be realized in coming quarters in accordance with our plan.

Revenue across the segments was negatively affected by an early Easter vacation in March, which resulted in reduced first quarter revenues compared with last year. The revenue comparison due to Easter effect is estimated to more than 10 MSEK for the quarter,
equivalent to a 3 % revenue decrease compared with the first quarter last year.

During 2023 the Danish Road business was challenged by downtrading and some lost contracts, which also had an impact on revenue growth and profitability. Our improvement program was initially pointing towards a slow recovery, but pace has successfully increased thanks to further initiatives in our cost efficiency program as well as new commercial initiatives and contract signings. We expect these initiatives to result in significantly improved results for Denmark Road during 2024.

Revenue and profitability for the European business has also been restrained due to business drops in large accounts in 2023. Based on an aggressive overhead cost reduction program and onboarding of new customers, we expect an increasing profitability during coming quarters.

The onboarding of the two latest acquired companies BudAB from October 2023 and Kvalitetstransport from January 2024 is progressing as planned. Kvalitetstransport will be fully integrated within the Norwegian Road segment resulting in some initial integration cost during this quarter. Both these acquired companies were impacted by more challenging market conditions during the quarter, but plans are in place to ensure substantial synergies especially in Norway, which will have full effect from the second half year.

As previously stated Jetpak will continue to participate in the consolidation of the Nordic market for fast and time-critical logistics, as the M&A multiples have come down to more attractive levels. However, we will not initiate further potential acquisitions before second half year, as we will keep focus on ensuring a good integration of the businesses already acquired in 2023.

We are doing our utmost to counter-act the current demand volatility and decreasing volumes. Within our strategic focus areas, we have ramped up on activities focusing on organic growth. This includes introduction of a broader geographic coverage of selected services such as temperature controlled and special services.
In addition, we are ramping up on sales channels as well as launching digitalized marketing campaigns.

Jetpak’s ESG strategy emphasizes our long-term commitment to environmental responsibility as well as commitment to our customers, employees, and other stakeholders. 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. We have policies and KPI’s in place measuring the most important improvement areas related to our business.

We are working intensively with the environmental issues, which is an integrated part of our business strategy and strategic focus areas, including 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. Our cost efficiency program addresses areas in line with our ESG strategy and focus areas. We are exploring further cost optimization opportunities from new technologies such as AI, drone transports and CO2 neutral road transport solutions. Furthermore, we are analyzing various means of further improving our capacity utilization on the road transport segment as well as enhancing our traffic planning and customer support by automated solutions. All in all, areas which will improve our efficiency and profitability as well as our environmental footprint.

Based on current market conditions, we expect at least the first half of 2024 to continue to be challenging.

A slow market recovery is expected from the end of the second quarter of 2024.

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

The Jetpak Top Holding AB board of directors has resolved to convene an annual general meeting of shareholders to be held on Tuesday, 11 June 2024, in Stockholm. Details on the proposals for the Annual General Meeting are found in the notice convening the meeting, which was published on 7 May. 
 

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): 515 40 52 #

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 May 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