Correction: Relais Group Plc Financial Statements Bulletin 1 January–31 December 2021

Relais Group Plc
Company release 3 March 2022, 13.00 EET

This is a correction to the financial statements bulletin published today at 9:00 am, in which the group income statement for Q4 / 2021 presented in the table section is incorrect. The error has no effect on the information presented elsewhere in the financial statements for the fourth quarter and full-year 2021 figures.

Relais Group Plc Financial Statements Bulletin 1 January–31 December 2021 (unaudited) – a year of strong growth, dividend proposal eur 0.36 (0.30) per share

Relais Group Plc
Company release 3 March 2022, 9:00 a.m. EET

This release is a summary of Relais Group's Financial Statement Bulletin 1 January–31 December 2021. The full release is attached to this company release and is available on our website at https://relais.fi/en/investors/.

OCTOBER–DECEMBER 2021 IN BRIEF

• Net sales totaled EUR 73.5 million (October – December 2020: 37.2), +97.4% change
• EBITDA was EUR 9.3 (5.9) million, 12.6% (15.7%) of net sales, +58.1% change
• EBITA was EUR 8.8 (5.8) million, 11.9% (15.5%) of net sales, +51.9% change
• EBIT was EUR 5.3 (3.8) million, 7.2% (10.3%) of net sales, +39.0% change
• Comparable earnings per share excluding amortization of goodwill (undiluted) was EUR 0.37
  (0.37) *)
• Lighting season sales were strong in general and sales grew strongly in Sweden
• Early winter had a positive impact on sales in November–December
• The global shortage of components had only a minor effect on sales during the review period, but the related risks have not disappeared. Shortages are expected to continue in FY2022
• Logistics costs clearly increased due to the international situation
• Purchase prices of some products showed upward pressure due to the increase in raw material prices and the availability situation, which is expected to continue during FY2022
• Strands Group AB's sales were very strong throughout the financial year
• The acquisition of STS Sydhamnens Trailer Service AB was completed in November
• The acquisition of Trucknik Reservdelar AB was completed in December

 JANUARY–DECEMBER 2021 IN BRIEF

• Net sales totaled EUR 237.9 million (January – December 2020: 128.9), +84.5% change
• EBITDA was EUR 31.0 (19.1) million, 13.0% (14.8%) of net sales, +62.0% change
• EBITA was EUR 29.3 (18.7) million, 12.3% (14.5%) of net sales, +56.4% change
• EBIT was EUR 16.4 (11.1) million, 6.9% (8.6%) of net sales, +48.0% change
• Comparable earnings per share excluding amortization of goodwill (undiluted) was EUR 1.17
  (0.87) *)
• The company continued the implementation of its growth strategy by acquiring the entire share capital of Swedish Strands Group AB and Finnish Raskone Oy and Lumise Oy in Q1 and STS Sydhamnens Trailer Service AB and Trucknik Reservdelar AB in Q4
• The Annual General Meeting on 30 March 2021 decided to pay dividends of EUR 0.30 (0.10) per share for the financial year 2020
• Strategy recalibration and a new long-term net sales target in May 2021: the revised aim is to reach proforma net sales of EUR 500 million by the end of 2026
• Starting the investigation of the transition to the main market (Nasdaq Helsinki) for the transition to take place at the earliest during 2022
• Acquisitions made during the fiscal year clearly contributed to the growth in total net sales and EBITA and earnings per share
• The winter conditions had a clear positive effect on sales, especially in electrical spare parts during the first and fourth quarters
• Demand for lighting products was strong. The growth was supported especially by the development of Strands Group AB acquired in January 2021
• Inventory levels were increased very strongly to secure delivery capacity, which weakened cash flow from operations. However, cash conversion recovered substantially during Q4 landing close to its normal level
• The direct impact of the COVID-19 pandemic on business during the review period was minor, but the indirect effects of global logistics and supply chains continued
• Transition to IFRS reporting as of 1 January 2020. On 24 February, the transition was postponed to take place by the end of 2022 at the latest
• The Board of Directors proposes to the Annual General Meeting to be held on 13 April 2022, that a dividend of EUR 0.36 (0.30) per share be distributed. A separate notice of the Annual General meeting will be given on a later date

*) The average undiluted number of shares Jan-Dec 2021 was 17,658,106 and Jan-Dec 2020 16,668,884. The average diluted number of shares Jan-Dec 2021 was 18,471,214 and Jan-Dec 2020 17,407,083.

2022 OUTLOOK AND LONG-TERM FINANCIAL TARGETS

Also in the financial year 2021, Relais was able to demonstrate the effectiveness and resilience of its business model even under the challenging circumstances, being able to grow strongly while maintaining its profitability.  The profitability was supported by acquisitions which also form a platform for continued growth.

Based on the company’s view, the current market situation enables favorable business development also in 2022. The company has through early purchases and with pre-orders placed during Q4/2021 strived to secure a part of the deliveries needed in 2022. Although the market situation at the time of publishing this release is generally stable, the visibility of the business is weakened by the continuing COVID-19 pandemic and the global shortage of components and semiconductors, as well as challenges in international logistics and the deteriorated international security situation. Therefore, the company does not provide a numeric guidance for financial year 2022.  

According to the new long-term target published on 17 May 2021, the company aims to reach pro forma net sales of 500 MEUR by the end of year 2026.

The new net sales target is based on the recalibrated strategy for the years 2021–2026. The new recalibrated strategy continues to rely on a combination of strong growth through acquisitions and a faster than market average organic growth. Relais aims to accelerate and reinforce its acquisition activities. In this context, the Company has chosen to expand its potential acquisition target area to include the entire mobility-related aftermarket, with the main focus remaining on the Nordic vehicle aftermarket.

The earlier long-term financial targets published in 2019 included an ambition to double the company's net sales by 2025.

KEY FIGURES

*) Items affecting the comparability and amortization of goodwill are not eliminated

**) The average undiluted number of shares Jan-Dec 2021 was 17,658,106 and Jan-Dec 2020 16,688,834. The average diluted number of shares Jan-Dec 2021 was 18,471,214 and Jan-Dec 2020 17,407,083. 

CEO ARNI EKHOLM COMMENTS:

”Our strong and profitable growth continued during the year 2021. The net sales grew with 84.5% to EUR 237.9 million and EBITDA with 62.0% to EUR 31.0 million”

The clear strategy accelerates growth

”Relais Group is a leading Nordic consolidator with a sector focus on the vehicle aftermarket. Our strategy is very clear. We create long-term shareholder value by delivering strong earnings growth through the combination of acquisitions and faster than market average organic growth supported by synergies.

The mobility landscape is changing rapidly. We have a thorough knowledge of the vehicle and mobility aftermarket and the underlying mid- and long-term trends affecting the market. Our deep sector knowledge and network gives us an advantage in identifying acquisition targets with a good strategic fit to us, as well as in capturing the synergies created by the acquisitions we carry out.

During the year 2021 we have continued the systematic execution of our clear strategy and managed to achieve significant and profitable growth in our different operating units.

Organic growth

The Nordic vehicle aftermarket developed positively also during the fourth quarter of the year. Despite the omicron-variant based re-acceleration of the Covid-19 Pandemic during the end of the year, the markets remained relatively stable in all our operating countries. According to our own estimates we were able to grow even faster than the market in average.

The organic growth was particularly strong for the Group’s own vehicle lighting brands. Several successful product launches, the increased market share in Sweden supported by cross-sales through local Group Companies, and the strong growth in export markets were the main contributors in this development. The export of Strands-branded products to e.g., Germany and Canada has grown strongly during the entire year. The demand for spare parts was solid all through the year. 

Corporate acquisitions

Acquisitions play a key role in our strategy. We continue to analyze the target markets and to make contacts with a larger number of potential acquisition targets with a good strategic fit in the Nordic countries. During the year our pipeline has already been complemented with several potential target companies.

We have carried out five successful acquisitions during the year 2021 (Strands Group AB, Raskone Oy, Lumise Oy, STS Sydhamnens Trailer Service AB and Trucknik AB). In line with our strategy, these acquisitions have further strengthened our own-branded lighting products business as well as expanding our footprint in the Nordic commercial vehicle repair, maintenance, and spare parts businesses. In addition, by Lumise becoming a member in the Relais-family, we have gained valuable competence in developing our digital and e-commerce business areas.

Covid-19

Apart from the disruptions in the global logistics and supply chains, the Covid-19 pandemic has not had a significant effect as such in our operating markets. Especially the commercial vehicles sector has picked up as the overall economic activity has increased. However, the delays in the deliveries of new vehicles have to some extent had an effect on the demand of vehicle equipment products, and the still continuing lower than normal level of bus traffic has decreased the demand of related spare parts. On the other hand, the growth of e-commerce has increased the need for different type of last-mile home deliveries. Overall, this has led to growth in the usage of light commercial vehicles and increased the demand for related services and spare parts.

As the Pandemic still continues, the health and safety of our employees and business partners is of paramount importance to us. Even though some restrictions have already been lifted locally, we continued to carefully follow the different recommendations of the authorities in our operating countries. Fortunately, we have so far had no serious Covid-19 incidents reported among our personnel, and we will continue striving to guarantee everyone’s safety in the best possible manner also in the future.

Sustainability

For us, sustainability means above all practical and meaningful everyday actions. We take good care of our employees, customers, and business partners and the environment. We have set clear ESG-related criteria to our global suppliers and several spare parts we sell are covered by a refund-and-recycling system, extending their life cycle after remanufacturing at the production site. We also take seriously the responsibility of our own business sector in reducing the global CO2-emissions. As the electrification of vehicles accelerates, we have purposefully increased our spare part offering for full electric and hybrid electric vehicles. This product range is growing steadily. In addition, we have increased the capability and preparedness of our Raskone and STS workshops to also serve and repair electrical commercial vehicles.

During the year 2022 we will map the carbon footprint caused by our different operations and we will set clear targets for reducing it. For example, already today our group company Startax Finland only uses electricity produced by fully renewable methods at its main facility of 16,000 m2 in Lempäälä, Finland.

Outlook for the year 2022

Relais Group is well positioned to continue the successful implementation of its strategy also during the year 2022. We have increased the inventory levels of critical product groups, so that our ability to serve our customers would stay on a high level even if the global supply disruptions should continue.

We will continue our M&A activities with the aim of finding companies having a good strategic fit to our Group and a sufficient value creation potential to our shareholders. As announced earlier this week, we are aiming to transfer to the Nasdaq Helsinki main list, with a timeline of doing this at the earliest during the second half of 2022. We believe the main list transition will have a positive effect in our ability to carry out more acquisitions and to support the financing needed for them.

Relais Group is not giving a numeric guidance for the year 2022. Owing to our strategy, a significant part of the growth and development of our business operations is based on the execution of corporate acquisitions. An accurate and up-front estimation of the timing and economical effect of acquisitions is virtually impossible to do. In addition to this, the still ongoing disruptions in the global logistics and supply chains, the weakened geopolitical situation, the increase of material, energy and delivery costs and the possible supply delays in different product groups caused by the global lack of semiconductors make it difficult to give accurate estimates.

As announced earlier, our long-term strategic target is to reach a turnover of 500 MEUR by the end of the year 2026.

Finally, I want to extend my warmest thanks to all of our almost 1,000 professionals, who do their very best every day to serve our customers even better. In addition, I want to thank all of our customers, business partners and shareholders for the trust you are placing in us. We strive to be worth that trust also during the coming years.”

FINANCIAL RELEASES IN 2022

• Q1/2022 Interim Management Statement on Thursday 12 May 2022                 
• H1/2022 Half-Year report on Thursday 11 August 2022
• Q3/2022 Interim Management Statement on Thursday 10 November 2022

                                          
INVITATION TO THE WEBCAST

Relais Group's CEO Arni Ekholm and CFO Pekka Raatikainen will present the result to the media, investors and analysts at a webcast on 3 March 2022 from 10:00 a.m. EET. The webcast can be followed at: https://relais.videosync.fi/interimreport-q4-2021

Presentation material and video will be available on the company's website at https://relais.fi/en/investors/ after the event.

Relais Group Plc

Board of Directors

Further information:

Relais Group, CEO Arni Ekholm
tel. +358 40 760 3323
Email: arni.ekholm@relais.fi

Certified advisor:
Evli Bank Plc, tel. +358 40 579 6210

Distribution:
Nasdaq Helsinki
Key media
www.relais.fi

Relais Group

Relais Group is the leading consolidator and acquisition platform on the vehicle aftermarket in the Nordic and Baltic countries. We are an industrial operator with a sector focus in vehicle life cycle enhancement and related services. We also serve as a growth platform for the companies we own.

We are a profitable company seeking strong growth. We carry out targeted acquisitions in line with our growth strategy and want to be an active player in the consolidation of the aftermarket in our area of operation. Our acquisitions are targeted at companies having a good strategic fit with our group companies.

Our net sales in 2021 was EUR 237.9 (2020: 128.9) million and we employed approximately 918 professionals in six different countries. During 2021, we completed six acquisitions. The combined net sales of the acquired companies total to almost EUR 95 million. Following the acquisitions, we employ approximately 950 professionals. Our share is listed on Nasdaq Helsinki Ltd's Nasdaq First North Growth Market Finland with the stock symbol RELAIS.

www.relais.fi