Relais Group Plc Financial Statement Bulletin January 1–December 31, 2020 (unaudited) – Record-breaking growth in an exceptional year, dividend proposal eur 0.30 per share

Relais Group Plc
Company Release 25 February 2021, 9:00 a.m. EET

This release is a summary of Relais Group’s Financial Statement Bulletin 2020. The full release is attached to this company release and is available on our website at https://relais.fi/en/investors/.

JULY–DECEMBER 2020 IN BRIEF

• Net sales totaled EUR 70.0 (July–December 2019: 61.2) million, +14.3% change
• EBITDA was EUR 11.4 (9.3) million or 16.3% (15.2%) of net sales, +22.8% change
• EBITA was EUR 11.2 (9.1) million or 16.0% (14.9%) of net sales, +23.3% change
• EBIT was EUR 7.4 (5.7) million or 10.6% (9.3%) of net sales, +30.9% change
• Comparable earnings per share excluding amortisation of goodwill (undiluted) was EUR 0.58 (0.41)
• Sales in the second half of the year were very strong overall, with record-high sales during the lighting season
• The impacts of the COVID-19 pandemic on the Group’s business were clearly lower in the second half of the year than in the first half
• The Group’s operating cash flow was very strong
• Acquisition of Strands Group on 14 December 2020
• Renewed and expanded financing agreement signed on 15 December 2020

JANUARY–DECEMBER 2020 IN BRIEF

• Net sales totaled EUR 128.9 (January–December 2019: 98.9) million, +30.3% change
• EBITDA was EUR 19.1 (13.3) million or 14.8% (13.5%) of net sales, +43.4% change
• EBITA was EUR 18.7 (13.0) million or 14.5% (13.1%) of net sales, +44.2% change
• EBIT was EUR 11.1 (7.9) million or 8.6% (7.9%) of net sales, +41.1% change
• Comparable earnings per share excluding amortisation of goodwill (undiluted) was EUR 0.87 (0.76)
• Acquisition of a 70% stake in SEC Scandinavia A/S on January 16, 2020
• Acquisition of a 95.25% stake in TD Tunga Delar Sverige AB on February 6, 2020
• Net sales were increased by acquisitions, strong spare parts sales especially in Sweden and excellent sales during the lighting season in all of the Group’s operating countries
• The impacts of the COVID-19 pandemic on net sales and the resulting cost reduction measures mostly took place in the first half of the year
• Based on the strong and stable financial performance and the high cash conversion inherent to the Group’s business, the Board of Directors proposes to the Annual General Meeting to be held on March 30, 2021, that a dividend of EUR 0.30 (0.10) per share be distributed. A separate notice of the Annual General meeting will be given on a later date

Relais Group Plc acquired the shares of AB Reservdelar (ABR) and Huzells i Karlstad AB on May 31, 2019. The companies have been included in Relais Group’s consolidated balance sheet from May 31, 2019 and in the consolidated income statement from June 1, 2019. This financial statement bulletin on the reference data concerning the first half of FY2019 includes the figures for the acquired companies from the dates of joining as stated hereinabove.

Relais Group Plc acquired 70% of the shares of SEC Scandinavia A/S (“SEC”) on January 16, 2020. On February 6, 2020 it acquired 95,25% of the shares of TD Tunga Delar Sverige AB (TD”). SEC has been included in consolidated group figures from January 1, 2020 and TD from February 1, 2020.

KEY FIGURES

*) Items affecting comparability and amortisation of goodwill not eliminated

COMMENTS BY CEO ARNI EKHOLM:

Strong growth driven by a clear strategy

“Relais Group’s business grew very strongly during the financial year 2020. We achieved net sales of EUR 128.9 million, representing a year-on-year increase of 30 percent. EBITA grew by 44 percent. Growth was particularly strong during the second half of the year.

Relais has a very clear and sharp strategy and we continued its purposeful and uncompromising execution in 2020. Our strategy’s cornerstones are growth at a rate that exceeds the market’s average growth by leveraging acquisition-related synergies, active and targeted acquisitions and creating added value for our customers through our comprehensive product range and digital service solutions.

In summer 2019 we set a strategic target to double the turnover of the company in 5 years. As it is now very probable that we will reach the target substantially earlier, the company intends to redefine the target at a later stage this year.

The effectiveness and resilience of our strategy was particularly highlighted during the market instability caused by the global COVID-19 pandemic. Our business developed favorably despite the wide-ranging restrictions in society, especially during the second half of the year. We were able to look after the safety of our employees and stakeholders and serve our customers without disruptions in circumstances that were at times highly challenging. Our personnel demonstrated outstanding commitment and flexibility, and I want to take this opportunity to express my warmest thanks to them.

Growth in all of the Group’s main markets

We further strengthened our position as a forerunner in the vehicle life cycle enhancement business in the Nordic region. Especially in Sweden, our organic growth was strong throughout the year. The financial year 2020 was the first full year of ABR and Huzells, which we acquired in 2019, being reported as part of Relais Group. We were able to effectively leverage synergies, particularly by expanding the distribution of our Group’s own lighting products in the Swedish market.

The Finnish market was weighed down in the first half of the year by the exceptionally warm winter and especially the shutdowns related to the COVID-19 pandemic in the second quarter. However, in the second half of the year, we were able to increase our sales substantially faster than the market’s average growth rate.

Highly targeted and successful acquisitions

We carried out three targeted strategic acquisitions in 2020. In January, we created a bridgehead in the Danish vehicle lighting market by acquiring a majority stake in the Danish company SEC Scandinavia AS. In February, we strengthened our position in heavy duty vehicle spare parts and equipment, which is an important market segment for us, by acquiring a majority stake in the Swedish company TD Tunga Delar AB. In December 2020, we announced the acquisition of Strands Group AB, a Swedish company that exports vehicle lighting products globally, which further strengthened our position as one of the most significant players in the European vehicle lighting aftermarket.

Our agile and efficient integration process ensures that synergies from acquisitions are fully leveraged – for example, by consolidating purchasing volumes and coordinating product ranges between the Group companies. At the same time, our companies maintain a strong local identity and ownership of customer accounts.

Commercial vehicles and lighting solutions as increasingly important pillars for the Group’s business

The commercial vehicle segment has become an increasingly important pillar for Relais and we see further opportunities in the development of related business operations at the Nordic level. At the time of writing this review, we have just completed the acquisition of Raskone, a nationwide multi-brand maintenance and repair workshop chain in Finland. The commercial vehicle maintenance and repair business supports our growth and brings us one step closer to end customers in the commercial vehicle segment. Having an in-depth understanding of our customers’ needs makes it possible for us to develop even better service concepts in the future.

The vehicle lighting solutions market represents global potential for us. We have an extensive range of lighting products, mostly under our own brands, and our goal is to further develop our selection in response to customer needs. With Strands having joined our family, we are in an even stronger position in this market and the share of the Group’s total sales represented by our own brands will grow significantly.

Digital solutions and sustainability are at the core of what we do

The digital transformation is one of the key drivers of our growth. In 2020, we continued to develop the functionality of our digital product catalogs to benefit our customers and ensure even smoother customer service. For example, having precise and clear search criteria for spare parts reduces unnecessary product returns and the associated adverse environmental impacts. Our goal is to continue to exceed customer expectations and take full advantage of the business development opportunities presented by the digital transformation.

Sustainability is an integral aspect of our day-to-day work. We take good care of our employees, customers and partners, and we set clear sustainability criteria for our suppliers. A substantial proportion of the spare parts we deliver to the market are part of the circular economy and our efficient recycling system ensures that refurbishable parts return to new use after they are factory refurbished.

I want to take this opportunity to extend my warmest thanks to our customers, partners and shareholders for the past year. A great deal of credit for our success goes to our personnel, who demonstrated excellent flexibility, commitment and team spirit during the exceptional year.

Good position for the year 2021

We enter 2021 with confidence. Relais is a high-growth company, and we will continue the purposeful execution of our strategy through organic growth as well as targeted acquisitions. Based on our strong and stable financial performance and the high cash conversion inherent to the Group’s business, the Board feels confident to propose a substantially increased dividend of 0.30 EUR per share to the Annual General Meeting.
 

OUTLOOK AND LONG-TERM FINANCIAL TARGETS

Relais has been able to demonstrate the effectivity and resilience of its business model even under the challenging circumstances of the year 2020. The strong financial position of Relais gives the company a good possibility to continue the successful implementation of the chosen strategy also in 2021. Even if the market conditions as a whole are stable at the time of this financial bulletin publication, the continuing COVID-19 pandemic still weakens the predictability of the market development. Therefore, the company does not provide a numeric guidance for financial year 2021.  

The targets for Relais’ strategy period extending to 2024 have been defined in summer 2019 as follows:

The company aims to double its net sales in five years. The company aims to grow through a combination of organic growth and acquisitions.

• Organic growth: Relais aims to continue growing at an average pace exceeding the market growth, which is supported by targeted synergies, e.g. cross-sales between the existing and acquired entities.
• Based on Relais management’s view, the overall market has been growing during recent years at a moderate but stable rate of approximately 1–3 percent annually, depending on product category and geography.
• M&A based growth: The company targets to make 1–2 acquisitions per year, where targeted synergies are expected to support earnings growth.
• The company considers it very probable that the aforementioned strategic 5-year growth target will be reached substantially earlier than 2024. The company therefore intends to redefine the target at a later stage this year.
   

FINANCIAL RELEASES IN 2021

• Financial statements and report of the Board of Directors, 1 January – 31 December 2020       

8 March 2021

• H1 Interim Report, 1 January – 30 June 2021                                                   

12 August 2021

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 February 25, 2021 from 10:00 am. The webcast can be followed at: https://relais.videosync.fi/2021-02-25-interim-report.

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 40 543 1446
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 Plc in brief

Relais Group is one of the leading players in the vehicle aftermarket in the Nordic and Baltic countries. We are an industrial operator with a sector focus on 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 amounted to EUR 128.9 (2019: 98.9) million in 2020, and we employed nearly 300 professionals in six different countries. Our share is listed on Nasdaq Helsinki Ltd's Nasdaq First North Growth Market Finland with the stock symbol RELAIS. 

www.relais.fi