Relais Group Plc Interim Management Statement January-March 2023 (unaudited): Strong and profitable growth
Relais Group Plc
Stock Exchange Release 4 May 2023, 9.00 a.m. EEST
This release is a summary of Relais Group's Interim Management Statement January-March 2023. The full release is attached to this release and is available on our website at https://relais.fi/en/investors/.
Corporate acquisitions, implemented profitability and operative efficiency improvement measures as well as sales growth especially in the commercial vehicle maintenance and repair business improved profitability and cash flow from operations.
JANUARY-MARCH 2023 IN BRIEF
- Net sales totalled EUR 69.0 million (January-March 2022: 62.1), change +11%
- EBITA was EUR 7.5 (5.7) million, 10.9% (9.2%) of net sales, change +31%
- Comparable EBITA was EUR 7.6 (6.2) million, 11.0% (10.0%) of net sales, change +23%
- EBIT was EUR 6.6 (5.0) million, 9.6% (8.0%) of net sales, change +33%
- Comparable EBIT was EUR 6.7 (5.4) million, 9.7% (8.7%) of net sales, change +24%
- Comparable earnings per share excluding amortisation of acquisitions (undiluted) was EUR 0.22 (0.22) *)
- Net cash flow from operations improved significantly from previous year and was MEUR 11.0 (2.4) million
- 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 0.4 million higher than reported **)
*) The average undiluted number of shares Jan-March 2023 was 18,132,258 and Jan-March 2022 17,941,433.
**) The impact has been calculated by converting the SEK denominated Jan-March 2023 EBITA of Swedish entities to EUR with the Jan-March 2023 average EUR/SEK rate as well as the Jan-March 2022 average EUR/SEK rate and comparing these two (translation difference).
Unless stated otherwise, figures in parentheses refer to the corresponding period of the previous year.
The change percentages in the table have been calculated on exact figures before the amounts were rounded to millions of euros.
2023 OUTLOOK AND LONG-TERM FINANCIAL TARGET
The Company does not provide a numeric guidance for the financial year 2023. On 2 March 2023, the company issued a revised long-term financial target, according to which the company aims to reach a proforma EBITA of EUR 50 million by the end of the year 2025. Relais considers a profit target to be more relevant in describing the shareholder value creation potential of the Company, as opposed to a net sales target. The previous financial target of the Company was to reach pro forma net sales of EUR 500 million by the end of year 2026.
KEY FIGURES
| EUR thousand unless stated otherwise | Jan-Mar 2023 |
Jan-Mar 2022 |
Jan-Dec 2022 |
| Net Sales | 68,950 | 62,119 | 260,683 |
| Net sales growth, % | 11.0% | - | 10 % |
| Gross profit | 32,087 | 28,134 | 117,214 |
| Gross margin, % | 46.5% | 45.3% | 45.0% |
| EBITDA | 11,096 | 8,865 | 36,581 |
| EBITDA margin, % | 16.1% | 14.3% | 14.0% |
| Comparable EBITDA | 11,184 | 9,315 | 39,414 |
| Comparable EBITDA, % | 16.2% | 15.0% | 15.1% |
| EBITA | 7,518 | 5,734 | 22,980 |
| EBITA margin, % | 10.9% | 9.2% | 8.8% |
| Comparable EBITA | 7,606 | 6,184 | 25,813 |
| Comparable EBITA, % | 11.0% | 10.0% | 9.9% |
| Operating profit | 6,629 | 4,969 | 19,648 |
| Operating profit margin, % | 9.6% | 8.0% | 7.5% |
| Comparable operating profit | 6,717 | 5,419 | 22,481 |
| Comparable operating profit, % | 9.7% | 8.7% | 8.6% |
| Profit (loss) for the period | 2,947 | 2,657 | 10,075 |
| Profit (loss) for the period margin, % | 4.3% | 4.3% | 3.9% |
| Comparable profit (loss) | 3,036 | 3,107 | 12,907 |
| Comparable profit (loss) margin, % | 4.4% | 5.0% | 5.0% |
| Comparable profit (loss) excluding amortisation of acquisitions |
3,925 | 3,872 | 16,239 |
| Comparable profit (loss) excluding amortisation of acquisitions margin, % | 5.7% | 6.2% | 6.2% |
| Items affecting comparability included in profit (loss) for the period |
88 | 450 | 2,832 |
| Net working capital | 59,198 | 67,148 | 62,551 |
| Inventories | 66,376 | 74,025 | 67,804 |
| Free cash flow | 9,617 | 903 | 24,070 |
| Cash conversion | 86.7% | 10.2% | 65.8% |
| Net Debt excl. leasing Liabilities | 83,626 | 87,135 | 90,056 |
| Net Debt (excl. Leasing Liabilities) to EBITDA, rolling | 2.15 | 2.33 | 2.46 |
| Net gearing excl. leasing Liabilities | 79.0% | 81.6% | 86.6% |
| Equity ratio | 33.4% | 33.9% | 33.6% |
| Return on investment (ROI) | 11.3% | 8.4% | 9.4% |
| Return on equity (ROE) | 11.2% | 10.1% | 9.7% |
| Return on assets (ROA) | 9.5% | 7.0% | 7.8% |
| Earnings per share, basic (EUR) | 0.16 | 0.15 | 0.56 |
| Earnings per share, diluted (EUR) | 0.16 | 0.14 | 0.54 |
| Comparable earnings per share, basic (EUR) | 0.17 | 0.17 | 0.72 |
| Comparable earnings per share, diluted (EUR) | 0.16 | 0.17 | 0.69 |
| Comparable earnings per share excluding amortisation of acquisitions, basic (EUR) |
0.22 | 0.22 | 0.90 |
| Comparable earnings per share excluding amortisation of acquisitions, diluted (EUR) |
0.21 | 0.21 | 0.87 |
| Average number of employees | 1,010 | 968 | 997 |
| Personnel at the end of the period, FTE | 1,024 | 973 | 1,009 |
*) The average undiluted number of shares Jan-March 2023 was 18 132 258 and Jan-March 2022 17 941 433. The average diluted number of shares Jan-March 2023 was 18 779 852 and Jan-March 2022 18 685 791.
CEO ARNI EKHOLM COMMENTS THE FIRST QUARTER OF 2023
“The first quarter of this year was characterized by a significant growth in both sales and profitability. The growth was especially strong in the commercial vehicle repair and maintenance business area, and in our Scandinavian business operations in general.
The positive sales and profitability development of the commercial vehicle repair and maintenance business was based in a combination of strong customer demand, operational efficiency measures carried out during the last year, and increased labor sales gross margin. The amount of workshop mechanics has increased by almost 30 since the beginning of 2022 and the capacity utilization has remained on a high level during the entire first quarter of the year 2023. The demand was strong in both Finland, and Sweden. The positive development was also partially affected by the acquisition of Skeppsbrons Jönköping AB carried out in May last year.
The delayed deliveries of new commercial vehicles during the last year have increased the need for repair and maintenance of existing transport fleets. According to our understanding, this type of demand has transferred especially to vehicle manufacturer independent workshop chains, such as Raskone, STS and Skeppsbrons. The organic turnover growth of our repair and maintenance business was 11% (+14% in comparable exchange rates) during the quarter.
The development of the Group’s technical wholesale and products operations was stable in the Scandinavian markets. The Finnish sales of spare parts and equipment was constrained by the relatively mild winter conditions and the continued deterioration of consumer purchase power. The organic turnover growth of our technical wholesale and products business was in total 1% (+6% in comparable exchange rates). The increased working capital levels which constrained the technical wholesale and products business last year have returned to a normal level corresponding to the needs of the business operations. This development has caused a significant increase in the cash flow compared to the same quarter last year.
On a product group level, the vehicle lighting business operations developed favorably. Our Group company Strands Group AB, which develops innovative vehicle lighting solutions, managed to substantially grow its exports to Germany and the Benelux-countries. The demand in the Nordic markets also developed positively.
Corporate acquisitions are at the heart of our strategy. We continued our active acquisition operations also during the first quarter of this year and acquired the Finnish Adita Oy in March. Having Adita as a member of the Relais family we can strengthen our technical wholesale and products operations in the important capital region market in Finland.
We are well prepared to continue implementing our strategy also during the rest of the year. We expect that the operational efficiency measures initiated last year will still contribute positively to our profitability development during the second quarter of this year, while the effect will gradually decrease during the second half of the year compared to the previous year.
I want to warmly thank all our over thousand professionals for their extremely strong contribution during the first quarter. In this same connection I want to express my thanks to all our customers, business partners and shareholders for your continued support and trust.”
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 4 May 2023 at 10:00 a.m. EEST. The webcast can be followed at https://relais.videosync.fi/q1-2023-result/.
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:
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 2022 was EUR 260.7 (2021: 237.8) million. During 2022, we completed a total of three 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.