Relais Group Plc Half-year financial report January 1–June 30, 2021 (unaudited) – The growth story continues

Relais Group Plc
Company release August 12, 2021, 9 a.m. EET

This release is a summary of Relais Group’s Half-year financial report January–June 2021. The full release is attached to this company release and is available on our website at https://relais.fi/en/investors/.

JANUARY-JUNE 2021 IN BRIEF

• Net sales totaled EUR 105.8 million (January–June 2020: 59.0), +79.4% change
• EBITDA was EUR 13.0 (7.7) million, 12.3% (13.1%) of net sales, +68.9% change
• EBITA was EUR 12.2 (7.5) million, 11.5% (12.7%) of net sales, +62.6% change
• EBIT was EUR 6.1 (3.7) million, 5.8% (6.2%) of net sales, +66,0% change
• Comparable earnings per share excluding amortization of goodwill (undiluted) was EUR 0.48
  (0.29) *)
• 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
• The Annual General Meeting on March 30, 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: the aim is to reach net sales of EUR 500 million by the end of 2026
• Starting the investigation of the transition to the main list (Nasdaq Helsinki) for the transition to occur in 2022 at the earliest
• Transition to quarterly financial reporting starting from the third quarter of 2021
• Acquisitions made during the review period clearly contributed to the growth in total net sales and EBITA
• The market situation improved in all operating countries and product lines compared to the previous year
• The winter conditions had a clear positive effect on sales, especially in electrical spare parts
• Demand for lighting products was very strong and that product area grew especially sharply, both organically and through acquisitions
• The impact of the COVID-19 pandemic on business during the review period is minor, but the risks have not disappeared due to new variants of the virus and new waves of the pandemic

*) The average undiluted number of shares Jan-Jun 2021 was 17,370,082 and Jan-Jun 2020 16,556,848.

2021 OUTLOOK AND LONG-TERM FINANCIAL TARGETS

Relais has been able to demonstrate the effectiveness and resilience of its business model even under the challenging circumstances. 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, especially from the international supply chains perspective. Therefore, the company does not provide a numeric guidance for financial year 2021.  

In line with 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 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-Jun 2021 was 17,370,082 and Jan-Jun 2020 16,556,848. The average diluted number of shares Jan-Jun 2021 was 18,261,525 and Jan-Jun 2020 17,238,216. 

CEO ARNI EKHOLM COMMENTS:

“Relais Group achieved significant growth during H1. Our net sales grew with 79.4% to EUR 105.8 million and EBITA with 62.6% to EUR 12.2 million.”

Growth through disciplined execution of the strategy

The strategy of Relais Group is based on a well-balanced combination of growth through targeted acquisitions and achieving a faster than market average organic growth, supported by the synergies between the existing and acquired companies. During the first half of the year 2021, we have meticulously continued the execution of our chosen strategy and managed to achieve significant and profitable growth in all our operating units.

Accelerated acquisition activities

During the first half of 2021, we managed to perform three highly successful and targeted acquisitions. In January, we concluded the acquisition of Europe’s fastest growing vehicle lighting company Strands Group. In February, we acquired Raskone Oy, the biggest independent commercial vehicle repair shop chain in the Nordics. In March, we welcomed Lumise Oy, the innovative vehicle lighting on-line operator as a new member in the growing Relais family.

As announced in May, we intend to further accelerate the acquisition activities in our field of operation. Additionally, we have announced that we will slightly broaden our acquisition scope to also include a limited number of other mobility sub-segments.

In June, we also announced the appointment of Lennart Sjöblom as Head of Acquisitions and Business Development. We have a solid pipeline of relevant target companies in the Nordic markets, and I am convinced that the recruitment of a dedicated resource in this area will further strengthen our ability to carry out successful acquisitions during 2021 and beyond.

Synergy benefits supporting our growth

Utilizing synergy benefits between the existing and newly acquired Group companies is at the heart of our strategy and has become a permanent part of our corporate DNA. Having a clear sector focus and in-depth knowledge within the vehicle aftermarket gives us a unique opportunity to further utilize synergy benefits that support the growth of our company.

Even though our operating model is decentralized, the management teams of our different Group companies co-operate very effectively, and proactively continue to seek new synergy benefits in the daily operations. The synergy effects are often significant, especially in the case of combing the Group purchasing power to get better prices and conditions from the suppliers. The synergies can also include other type of benefits, such as creating a common Product Information Management platform or carrying out other joint Functional Excellence projects between Group companies. As an example, we have successfully combined the management and back-office functions of TD Tunga Delar and Huzells, effectively creating one of the strongest independent commercial vehicle aftermarket wholesale operators in Sweden. In Finland, Startax now takes care of the purchase and supply of a growing number of spare parts to Raskone, utilizing the joint purchase power of the entire Group.

Organic growth

Nordic vehicle aftermarket remained stable despite the ongoing COVID-19 pandemic during H1. According to our own estimate, we managed to grow faster than the market in average during the first half of the year. The exceptionally cold weather during Q1 boosted the sales of specifically electrical spare parts and accessories. In practice, all of our Group companies performed strongly. Especially worth mentioning is the strong growth of Strands and the excellent performance of AB Reservdelar, managing to grow despite a move to a new location in Sollentuna near Stockholm in May.

Digitalization

Relais aims to be in the forefront of the digital revolution in the aftermarket. We actively seek new ways to help our customers to find the products they need easier and faster. Creating an excellent customer experience needs to be in the center of our operations, be it a consumer looking for the perfect auxiliary light for their vehicle, or a professional buyer looking for a comprehensive range of spare parts and equipment for a commercial fleet.

The acquisition of Lumise in March has given us valuable insight into running a highly successful on-line operation and increased our capabilities in e-commerce. We intend to utilize this clear competitive advantage especially in the global roll-out of our vehicle lighting business during the coming years.

Further growth in Lighting and Commercial Vehicles

By the acquisition of Strands, Lumise and Raskone during H1 we have further strengthened our ability to grow in the strategically important business areas of Lighting and Commercial Vehicles. Strands is an extremely strong and fast-growing vehicle lighting brand with a proven track record of successful export operations, innovatively utilizing social media in marketing. Lumise is strong in creating an unparalleled on-line shopper experience. Raskone has developed into a profitable, well-functioning and trusted commercial vehicle workshop chain in Finland, creating us a platform for a further expansion in this area.

Sustainability

For us, sustainability means first and foremost practical deeds and actions in the daily life. We take good care of our employees, customers, and business partners. We have set clear ESG-related criteria to our global suppliers and an increasing part of the spare parts that we sell is covered by a refund system. The used spare parts are returned to us in order to reach a new life after refurbishing or remanufacturing at the production site. Also, our own digital catalogue tools contribute to sustainability. The easier it is for our customers to choose the exactly right product, the less there is need for unnecessary returns causing CO2 emissions.

Outlook 2021 and long-term perspective

Relais is well positioned to continue the execution of the chosen strategy. We have ramped up the inventory levels of several new lighting products to be ready for the upcoming autumn season, as well as increased the inventory levels of certain other critical products. The underlying market demand looks robust in all Nordic countries. Nevertheless, there is a considerable amount of uncertainty deriving from the global lack of semi-conductors and we cannot rule out the effect of possible supply problems, especially during Q4. In light of this and considering the still ongoing COVID-19 pandemic, Relais is not giving a numeric guidance for the year 2021.

Looking at the longer perspective, we recently announced our new financial targets for the strategy period extending to 2026. As our previous turnover target of ca. 240 MEUR will be reached considerably earlier than planned, we decided to set a new strategic target of reaching a turnover of 500 MEUR by 2026. In addition, we announced our intention to examine the possibility of transferring to the Nasdaq Helsinki main list at the earliest during 2022 in order to support the realization of our growth strategy.

Finally, profitable and strong growth does not happen automatically. It is the result of the hard work and efforts that our teams are putting in every day, and the excellent cooperation we have with our customers, suppliers, business partners and shareholders. In this connection I want to thank you all very warmly for placing your trust in us. We will do our very best to earn that trust also in the future. Relais is a growth company, and we intend to continue the uncompromised execution of our strategy during 2021 and beyond. “

FINANCIAL RELEASES IN 2021

• Q3 Interim Report, 1 January–30 September 2021                                          
  4 November 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 12 August 2021 from 10:00 am EET. The webcast can be followed at: https://relais.videosync.fi/2021-08-12-interimreportq2

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 in brief

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 2020 was EUR 128.9 (2019: 98.9) million and we employed almost 300 professionals in six different countries. During 2021, we have already made three acquisitions. The combined net sales of the acquired companies total to almost EUR 92 million. Following the acquisitions, we employ more than 800 professionals. Our share is listed on Nasdaq Helsinki Ltd's Nasdaq First North Growth Market Finland with the stock symbol RELAIS.

www.relais.fi