Relais Group Plc Half-Year Financial Report January-June 2024 (unaudited): Continued strong performance
Relais Group Plc
Stock Exchange Release 15 August 2024, 9:00 a.m. EEST
This release is a summary of Relais Group's Half-Year Financial Report January-June 2024. The full report is attached to this release and is available on our website at https://relais.fi/en/investors/.
APRIL-JUNE 2024 IN BRIEF
- Net sales totalled EUR 74.3 million (April-June 2023: 64.1), change +16%
- Comparable EBITA was EUR 7.3 (4.8) million, change +52%
- Comparable EBITA margin was 9.9 (7.5) %
- Earnings per share, basic was EUR 0.18 (0.01)
- Net cash flow from operations was EUR 9.5 (6.7) million
- At comparable EUR/SEK exchange rates, EBITA would have been approximately EUR 0.0 (0.3) million higher than reported *)
JANUARY-JUNE 2024 IN BRIEF
- Net sales totalled EUR 157.0 million (January-June 2023: 133.1), change +18%
- Comparable EBITA was EUR 17.0 (12.4) million, change +37%
- Comparable EBITA margin was 10.8 (9.4) %
- Earnings per share, basic was EUR 0.39 (0.17)
- Net cash flow from operations was EUR 14.1 (17.6) million
- At comparable EUR/SEK exchange rates, EBITA would have been approximately EUR 0.0 (0.7) million higher than reported *)
*) The EUR/SEK impact has been calculated by converting the SEK denominated EBITA of the Swedish entities to EUR with the reporting period average EUR/SEK rate as well as the comparison period average EUR/SEK rate and comparing these two (translation difference).
2024 OUTLOOK AND LONG-TERM FINANCIAL TARGET
Relais Group does not provide a numeric guidance for the financial year 2024. The company has a long-term financial target, according to which it aims to reach a proforma comparable EBITA of EUR 50 million by the end of the year 2025.
KEY FIGURES
| (EUR 1,000 unless stated otherwise) | 4–6/2024 | 4–6/2023 | Change | 1-6/ 2024 |
1-6/ 2023 |
Change | 12 months rolling | Change | 1–12/2023 |
| Net sales | 74,261 | 64,101 | +16% | 157,017 | 133,051 | +18% | 308,217 | +8% | 284,252 |
| Gross profit | 35,400 | 29,274 | +21% | 73,592 | 61,360 | +20% | 141,155 | +10% | 128,923 |
| Gross margin | 47.7% | 45.7% | 46.9% | 46.1% | 45.8% | 45.4% | |||
| Comparable EBITA | 7,318 | 4,823 | +52% | 17,004 | 12,442 | +37% | 33,414 | +16% | 28,851 |
| Comparable EBITA margin | 9.9% | 7.5% | 10.8% | 9.4% | 10.8% | 10.1% | |||
| Operating profit | 6,587 | 3,974 | +66% | 15,549 | 10,616 | +46% | 30,080 | +20% | 25,147 |
| Profit for the period | 3,274 | 161 | 7,158 | 3,099 | +131% | 17,798 | +30% | 13,739 | |
| Earnings per share, basic | 0.18 | 0.01 | 0.39 | 0.17 | +131% | 0.98 | +30% | 0.76 | |
| Cash flow from operations | 9,494 | 6,658 | +43% | 14,131 | 17,633 | -20% | 30,598 | ||
| Net working capital | 62,150 | 56,229 | +11% | 67,068 | |||||
| Net working capital turnover |
4.7 | 4.7 | +1% | 4.7 | 4.6 | +2% | 4.8 | +3% | 4.7 |
| Interest-bearing net debt | 146,722 | 147,969 | -1% | 151,010 | |||||
| Net Debt to EBITDA, LTM | 3.03 | 3.62 | -16% | 3.47 | |||||
| Equity ratio | 32.6% | 30.9% | 33.6% | ||||||
| Return on equity | 13.1% | 6.2% | 12.8% | ||||||
| Return on capital employed | 12.9% | 10.5% | 12.9% | 10.0% |
The change percentages in the tables have been calculated on exact figures before the amounts were rounded to millions of euros.
CEO ARNI EKHOLM COMMENTS THE SECOND QUARTER OF 2024
Strong performance on all fronts
“Our performance was very strong on practically all fronts. The second quarter was the sixth consecutive quarter with a double digit EBITA growth compared to last year.
The net sales of the group grew with 16% (8% organic growth) compared with Q2 of 2023, supported by the good market demand, acquisitions and our successful commercial activities. The gross profit percentage of the Group grew from 45.7 to 47.7 supported by sales price increases, operational efficiency of the workshops and effective purchasing. The comparable EBITA of the Group grew from 4.8 MEUR to 7.3 MEUR during the second quarter which represents a growth of 52% compared to the corresponding quarter in 2023.
The sales growth during Q2 was especially strong in our Technical Wholesale and Products business area, which grew with 18% (organic growth +9%) vs. last year. The sales growth comes predominantly from the Scandinavian markets, partly supported by the earlier acquisitions in Norway and the positive market demand in Sweden. The market in Finland was stable after the strong Q1. The gross profit percentage developed positively, especially in Sweden.
The sales of the Group’s Commercial Vehicle Repair and Maintenance business area developed also positively during Q2. The sales growth was 12% (organic growth +6%), and the gross profit levels were stable compared to last year. The demand for our services has continued to grow as especially bigger fleet customers are looking for cost efficiencies in their operations. The resource situation at our workshops was on a good level and there were no critical shortages in manpower.
Looking at the product group level, the sales of spare parts grew with 13% during Q2 vs. last year. The hard winter conditions of Q1 caused an increased need of repairs extending also to Q2 which led to a higher demand of spare parts, especially brake parts, suspension and steering components. The equipment product group sales grew with 33% which is largely coming from the acquired workshop equipment businesses in Norway. The sales of the vehicle lighting products grew with 14% vs. Q2/2023, coming mainly from the positively developed export activities of our Strands brand.
We continued to actively scan the market for good acquisition opportunities. There are several interesting targets having a good strategic fit with us within the Nordic marketplace. After the review period, on 5 July 2024 we agreed to acquire Team Verkstad Sverige AB from Vy Buss AB. Team Verkstad Sverige AB provides maintenance and repair services for buses and other heavy commercial vehicles, and it employs approximately 34 professionals. After the completion of the acquisition, Team Verkstad Sverige AB's operations comprise of one workshop and one damage repair workshop in Partille, near Gothenburg, Sweden. Through the acquisition, our group company STS strengthens its position in the strategically important Gothenburg area and gains valuable expertise in bus repair and maintenance services. Closing of the transaction is expected to take place 1 October 2024. This acquisition, combined with the earlier acquisition of M Ahlqvist Oy in Finland this year, will increase the number of our commercial vehicle workshops to a total of 38. This makes us the biggest independent operator of heavy commercial vehicle repair and maintenance workshops in the Nordic region.
The outlook for the rest of the year looks stable, provided that the current good market demand of stays on the present level. There are nevertheless uncertainties coming mainly from the poor consumer purchase power of consumers, especially in the Finnish marketplace. The second half of the year is traditionally very important for the total profit of the Group. Specifically, the profit of our vehicle lighting product group is dependent on the success of our new product launches and commercial activities during the peak season of August-December. With that said, we consider that we are well positioned to carry on implementing our strategy in a successful and sustainable way during the rest of the year 2024.
Finally, I want to warmly thank all our over 1,000 professionals for your extremely strong performance and contribution during the first half of this year. I also want to thank our customers, shareholders, and business partners for their continued support.”
EVENTS AFTER THE REVIEW PERIOD
Acquisition of Team Verkstad Sverige AB
On 5 July 2024 Relais Group notified that its' group company STS Sydhamnens Trailer Service AB has agreed to acquire Team Verkstad Sverige AB from Vy Buss AB. Team Verkstad Sverige AB provides maintenance and repair services for buses and other heavy commercial vehicles, and it employs approximately 34 professionals. After the completion of the acquisition, Team Verkstad Sverige AB's operations comprise one workshop and one damage repair workshop in Partille, near Gothenburg, Sweden. Through the acquisition, STS strengthens its position in the strategically important Gothenburg area and gains valuable expertise in bus repair and maintenance services.
After carving out operations that are not part of the transaction scope, the annual net sales of Team Verkstad Sverige is approximately SEK 60 million and annual operating profit approximately SEK 2 million.
Closing of the transaction is subject to authority approval under the Swedish Act on Screening of Foreign Direct Investments and to certain other customary conditions. Closing of the transaction is expected to take place 1 October 2024.
FINANCIAL CALENDAR FOR 2024
The interim reports report for January-September will be issued on Thursday, 7 November 2024
INVITATION TO THE WEBCAST
Relais Group's CEO Arni Ekholm and CFO Thomas Ekström will present the result to the media, investors and analysts at a webcast on 15 August 2024, at 10:00 a.m. EEST. The webcast can be followed at https://relais.videosync.fi/q2-2024.
Presentation material and video will be available on the company's website at https://relais.fi/en/ after the event.
Relais Group Plc
Board of Directors
Further information:
Arni Ekholm, CEO
Phone: +358 40 760 3323
E-mail: arni.ekholm@relais.fi
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 2023 was EUR 284.3 (2022: 260.7) million. During 2023, we completed a total of four acquisitions. We employ approximately 1,000 professionals in six different countries. The Relais Group share is listed on the Main Market of Nasdaq Helsinki with the stock symbol RELAIS.