Correction: Relais Group Plc Interim Management Statement January–September 2022 (unaudited) – A stable quarter
Relais Group Plc, Company release, 16 November 2022 at 4.10 p.m. EET
The cash flow statement in the Interim Management Statement that Relais Group Plc published on 10 November 2022 contained an error in financial year 2021. The error has no impact on the income statement, balance sheet or the actual cash flow. The table below summarizes the corrections.
| Impact of correction, euro thousands, unless otherwise stated | 1-9/2021 | 1-12/2021 | ||||||
| Published | Corrected | Difference | Published | Corrected | Difference | |||
| In the consolidated cash flow statement: | ||||||||
| Cash flow from operating activities | 3,956 | 5,270 | 1,314 | 11,880 | 13,194 | 1,314 | ||
| Change in trade and other payables (increase (+) / decrease (-)) |
-17,320 | -16,006 | 1,314 | -18,738 | -17,424 | 1,314 | ||
| Cash flow used in investing activities | -44,453 | -45,768 | -1,314 | -53,843 | -55,157 | -1,314 | ||
| Acquisition of subsidiaries, net of cash acquired | -42,897 | -44,212 | -1,314 | -51,558 | -52,872 | -1,314 | ||
| In the key figures table: | ||||||||
| Free cash flow | 1,284 | 2,598 | 1,314 | 7,742 | 9,056 | 1,314 | ||
| Cash conversion, % | 5.1% | 10.4% | 21.5% | 25.2% | ||||
The corrected release is below and attached the corrected Interim Management Statement as a whole.
Relais Group Plc Interim Management Statement January–September 2022 (unaudited) – A stable quarter
This release is a summary of Relais Group's Interim Management Statement January-September 2022. The full release is attached to this company release and is available on our website at https://relais.fi/en/investors/.
Unless stated otherwise, figures in parentheses refer to the corresponding period of the previous year.
JULY–SEPTEMBER 2022 IN BRIEF
- Net sales totalled EUR 64.8 million (July– September 2021: 58.7), +10.3% change
- EBITDA was EUR 11.1 (10.5) million, 17.1% (17.9%) of net sales, +5.8% change
- Comparable EBITDA was EUR 11.3 (10.8) million, 17.5% (18.4%) of net sales, +4.9% change
- EBITA was EUR 7.7 (8.0) million, 11.9% (13.6%) of net sales, -3.8% change
- Comparable EBITA was EUR 7.9 (8.3) million, 12.3% (14.1%) of net sales, -4.3% change
- EBIT was EUR 6.8 (7.3) million, 10.5% (12.4%) of net sales, -6.5% change
- Comparable EBIT was EUR 7.1 (7.6) million, 10.9% (12.9%) of net sales, -6.9% change
- Comparable earnings per share excluding amortization of acquisitions (undiluted) was EUR 0.27
(0.31) *) - Net cash flow from operations, MEUR 6,4 (-0.6) improved clearly from previous year
- The development of the EUR/SEK exchange rate during the review period had a negative impact on the Group's EBITA. At comparable exchange rates, EBITA during the review period would have been approximately EUR 0.2 million higher than reported
*) The average undiluted number of shares Jul–Sep 2022 was 18,132,308 and Jul–Sep 2021 17,941,433
JANUARY–SEPTEMBER 2022 IN BRIEF
- Net sales totalled EUR 185.5 million (January–September 2021: 164.3), +12.9% change
- EBITDA was EUR 26.5 (25.0) million, 14.3% (15.2%) of net sales, +6.2% change
- Comparable EBITDA was EUR 27.6 (26.9) million, 14.9% (16.4%) of net sales, +2.7% change
- EBITA was EUR 16.8 (17.7) million, 9.1% (10.8%) of net sales, -5.2% change
- Comparable EBITA was EUR 17.9 (19.6) million, 9.7% (12.0%) of net sales, -8.8% change
- EBIT was EUR 14.3 (15.8) million, 7.7% (9.6%) of net sales, -9.1% change
- Comparable EBIT was EUR 15.5 (17.7) million, 8.3% (10.8%) of net sales, -12.7% change
- Comparable earnings per share excluding amortization of acquisitions (undiluted) was EUR 0.55
(0.75) *) - The development of the EUR/SEK exchange rate during the review period had a negative effect on the Group's EBITA. At comparable exchange rates, EBITA during the review period would have been approximately EUR 0.5 million higher than reported
- The AGM of 13 April 2022 decided on a dividend of 0.36 (0.30) EUR per share be paid for FY2021
- On 25 October 2022, the company decided on transition on IFRS
*) The average undiluted number of shares Jan–Sep 2022 was 18,024,511 and Jan–Sep 2021 17,562,625.
KEY FIGURES
| EUR thousand unless stated otherwise | Jul-Sep 2022 | Jul-Sep 2021 | Jan-Sep 2022 | Jan-Sep 2021 |
Jan-Dec 2021 |
| Net sales | 64,780 | 58,741 | 185,498 | 164,283 | 237,830 |
| Gross profit | 28,777 | 24,832 | 83,544 | 67,785 | 99,588 |
| EBITDA | 11,071 | 10,495 | 26,505 | 24,963 | 36,005 |
| EBITDA margin, % | 17.1% | 17.9% | 14.3% | 15.2% | 15.1% |
| EBITA | 7,684 | 7,990 | 16,797 | 17,710 | 25,727 |
| EBITA margin, % | 11.9% | 13.6% | 9.1% | 10.8% | 10.8% |
| Operating profit | 6,818 | 7,292 | 14,340 | 15,772 | 23,042 |
| Operating profit margin, % | 10.5% | 12.4% | 7.7% | 9.6% | 9.7% |
| Profit (loss) for the period | 3,691 | 4,562 | 6,341 | 9,219 | 14,377 |
| Profit (loss) for the period margin, % | 5.7% | 4.1% | 3.4% | 5.6% | 6% |
| Comparable profit (loss) excluding amortisation of goodwill |
4,810 | 5,564 | 9,911 | 13,085 | 19,665 |
| Comparable profit (loss) excluding amortisation of goodwill margin, % |
7.4% | 9.5% | 5.3% | 8% | 8.3% |
| Return on equity (ROE) | - | - | 8.2% | 13.7% | 15.5% |
| Equity ratio | 31.8% | 33.7% | 31.8% | 33.7% | 33.6% |
| Net gearing | 97.2% | 81.4% | 97.2% | 81.4% | 81.2% |
| Earnings per share, basic (EUR) | 0.21 | 0.26 | 0.35 | 0.52 | 0.81 |
| Earnings per share, diluted (EUR | 0.20 | 0.25 | 0.34 | 0.50 | 0.78 |
| Comparable earnings per share, basic (EUR) | 0.22 | 0.27 | 0.41 | 0.63 | 0.96 |
| Comparable earnings per share, diluted (EUR) | 0.21 | 0.26 | 0.40 | 0.61 | 0.92 |
| Comparable earnings per share excluding amortisation of acquisitions, basic (EUR) |
0.27 | 0.31 | 0.55 | 0.75 | 1.11 |
| Comparable earnings per share excluding amortisation of acquisitions, diluted (EUR) |
0.26 | 0.30 | 0.53 | 0.71 | 1.06 |
| Personnel at the end of the period, FTE | 998 | 848 | 998 | 848 | 950 |
**) The average undiluted number of shares Jan–Sep 2022 was 18,024,511 and Jan–Sep 2021 17,562,625. The average diluted number of shares Jan–Sep 2022 was 18,752,469 and Jan–Sep 2021 18,399,424.
2022 OUTLOOK AND LONG-TERM FINANCIAL TARGET
The Company does not provide a numeric guidance for financial year 2022. The company aims to reach pro forma net sales of 500 MEUR by the end of year 2026.
CEO ARNI EKHOLM COMMENTS QUARTER 3/2022:
“Relais Group sales developed positively during the third quarter and clearly exceeded the same period last year as the turnover grew with 10,3%. The turnover increase with comparable exchange rates was 12%. In addition, the profitability and cash flow improved clearly compared to the first half of the year. The development of the Scandinavian units was very strong, supported by the acquisitions especially in the repair and maintenance sector. The general market conditions in Scandinavia were clearly more positive than in the Finnish-Baltic markets. The turnover and profitability of the Finnish-Baltic business was on a lower level than last year, reflecting the general market development according to our own estimate.
Looking at the wholesale operations of the Group, we managed to reach the last year’s turnover level with comparable exchange rates. The Scandinavian wholesale units reached a turnover growth of 8% during the quarter, supported by the positive local market development and the acquisition of Trucnik AB in Sweden. The turnover of the Finnish-Baltic wholesale operations declined with 8% as a result of the negative local market development. We have been able to move the inflation-related price increase pressure sufficiently to the product prices. This has enabled the stability of the gross margin levels within the wholesale operations.
The Group’s repair and maintenance operations grew strongly driven by the acquisitions made in the Swedish market. STS Sydhamnens Trailer Service AB and Skeppsbrons Jönköping AB have strengthened Relais Group’s position considerably as the biggest independent repair and maintenance operator for commercial vehicles in the Nordic region. The operational efficiency measures taken in Raskone Oy during the first half of the year started to give a positive effect in the profitability during the quarter. In addition, the changes made in the salary setting of the mechanics contributed positively to the recruitment and retainment of the workshop personnel of Raskone. The demand situation in all the Group’s repair and maintenance companies was solid and the capacity utilization level grew clearly.
The sales of vehicle lighting products was stable reaching the last year’s level, mainly due to several new product launches and the strong performance of Strands Group in the export markets. As a whole, the vehicle lighting season sales started somewhat later than during earlier years owing to the market uncertainty caused by the general economic situation. The uncertain demand situation is prevalent especially in Finland and in product segments directed to consumers. Supported by the implemented price increases, the gross margins of lighting products have largely remained on last year’s levels. Also the sales of spare parts was on a stable level and in line with last year. The gross margins were on the same level as last year, due to successfully implemented price increases.
As we told in connection with the publishing of H1/2022 results, we have initiated several actions aiming at increasing the operating efficiency of the Group. We have started a program within the Finnish wholesale operations targeting at lowering the level of net working capital and increasing the efficiency of the pricing process. The program is advancing according to plan. We expect the level of net working capital is to go down during Q4 and the optimization of the pricing process is expected to increase the profitability during next year. In addition to this, all Group companies have increased the amount of different commercial activities to minimize the effects of the uncertain demand situation caused by the general market conditions.
When assessing our business outlook for the remainder of this year various external factors emerge, all of which are outside our circle of influence. The consequences of Russia’s war on Ukraine cause great uncertainty in the demand situation of the markets. In addition, the steep increase of energy prices and general cost of living, the unstable geopolitical situation and its negative impact on the economy make it very challenging to estimate the market situation for the coming quarter. As before, the Company is not giving a numeric guidance of the rest of the year.
Looking at the factors within our circle of influence, we are well positioned to develop our business favorably also during the last quarter of the year 2022. Our ability to deliver lighting products during the ongoing season is good and we will launch a number of new products to the market also this year. We have been able to solve several challenges that faced our repair and maintenance business earlier this year. The demand situation in that business area looks stable. We believe that a possible economic recession may even increase the demand for reasonably priced spare parts and repair and maintenance services. We will also continue the active processing of corporate acquisitions over the coming year, and we expect target company valuations to decline to a more moderate level than before. This lays a good foundation for carrying out acquisitions and the implementation of our strategy also moving forward.
In this connection, I want to take the opportunity to express my warmest thanks to our skilled staff for a robust performance during this quarter. The almost thousand Relais Group-professionals in six countries work very hard to serve our customers even better every day.”
MAJOR EVENTS AFTER THE REVIEW PERIOD
On 25 October Relais announced that the company us transitioning to IFRS reporting starting from 1 January 2020.
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 10 November 2022 from 10:00 am EET. The webcast can be followed at: https://relais.videosync.fi/2022-q3-results.
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 Plc, tel. +358 40 579 6210
Distribution:
Nasdaq Helsinki
Key media
www.relais.fi
Relais Group
Relais Group is a leading consolidator and acquisition platform on the vehicle aftermarket in the Nordic and Baltic countries. We have 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. During 2021, we completed a total of six acquisitions. We employ approximately 1,000 professionals in six different countries. The Relais Group share is listed on Nasdaq Helsinki Ltd's Nasdaq First North Growth Market Finland with the stock symbol RELAIS.