Interim report January-June 2019

Q2 April-June 2019

• Net sales increased by 24 percent to SEK 1,776 (1,428) million
• EBITDA increased to SEK 229 (114) million 
• EBITA increased to SEK 129 (86) million
• Organic EBITA growth was 3 percent
• Profit after tax amounted to SEK 60 (61) million
• Earnings per ordinary share after deduction of preference share dividends amounted to SEK 0.52 (0.54)

Period January-June 2019

• Net sales increased by 19 percent to SEK 3,321 (2,783) million
• EBITDA increased to SEK 365 (191) million
• EBITA increased to SEK 166 (137) million
• Organic EBITA growth was 5 percent
• Profit after tax amounted to SEK 59 (78) million
• Earnings per ordinary share after deduction of preference share dividends amounted to SEK 0.31 (0.56)

Events after the reporting period

• All warrants held by a former employee were repurchased after the reporting period
• Volati has convened an EGM on 30 September to decide whether to authorise some of the subsidiaries’ CEOs to acquire shares in their own companies.

COMMENTS FROM THE CEO

Strong growth in earnings during the quarter

Volati delivered a good set of results for the second quarter. Net sales increased by 24 percent to SEK 1,776 million and EBITA increased by 50 percent to SEK 129 million. All business areas reported improved EBITA compared with the same period the previous year.

The improvement in the quarter has been driven by contributions from acquired operations and good development in our existing operations.

We continued to focus on acquisitions during the quarter, completing two add-on acquisitions within the Industry business area – Stenentreprenader and Mundus Maskin. We continuously evaluate a large number of potential acquisition candidates, with a clear focus on add-on acquisitions that create value for our existing business units. However, we note that price expectations for sales are currently high. This has meant that we have decided against proceeding in a number of acquisition processes.

Good development for Trading

The Trading business area had a good quarter, increasing EBITA by 10 percent. Our successful strengthening of the operations of companies that work with their own brands has had a positive effect on margins. We have also worked successfully on cost efficiencies and price increases in response to the Swedish krona’s weak development. The slight decline in sales for the quarter is an effect of the ongoing consolidation in the builders’ hardware and construction materials sector. It is our assessment that the market climate is good and that our market shares are increasing.

Akademibokhandeln’s positive trend continues

Akademibokhandeln showed positive development during the quarter, with EBITA improving by SEK 8 million from the previous year. We are still experiencing good effects from the work on purchasing and cost efficiency that was carried out in 2018, which has brought a clear improvement in earnings. In addition, the business area has increased sales in a stable market by broadening the product range and establishing new distribution channels with the audio book streaming service Bokus Play. The Bokus e-commerce channel has increased its sales volume while margins have also improved – a development that is both pleasing and of long-term importance to the industry.

Industry increases sales and earnings

Industry increased its sales and EBITA grew by 59 percent. The figures were affected by the acquisition of S:t Eriks, which was consolidated with effect from 1 September 2018. We also had stable, good development for the majority of the existing operations. The process of integrating and strengthening S:t Eriks’ operations has been successful. When it was acquired, the company had a downward profitability trend. This was turned around as early as the first quarter of 2019 and the company has delivered in line with our investment hypothesis during the second quarter. Industry’s business unit that rents out water damage restoration products as a result of flooding is, as we have mentioned earlier, strongly affected by weather and wind. The hot and dry summer in much of Europe has resulted in low demand, which has had an adverse effect on both sales and earnings.

Improved earnings for Consumer

Consumer reported a good quarter, with EBITA growth of 11 percent. The changed inspection intervals, which we have referred to in previous interim reports, affected market conditions in the vehicle inspection sector. We have handled the associated challenges well and the profitability of the business has developed positively during the quarter. In addition to working on cost savings and price increases, we have also established several new inspection stations during the quarter. We still have challenges in two of Consumer’s business units and we are working with them to take relevant measures and we are continuing to monitor the operations closely.

Creating long-term value growth

Volati advocates executive ownership. We want the key personnel who lead the business units to invest their own money in the business. This creates a common focus on long-term value creation. After the reporting period, the Board has therefore convened an EGM of Volati to decide whether some of the business units’ key personnel may acquire ownership shares in their respective business units at market values.

Profit after tax and earnings per share were affected by the introduction of IFRS 16 and the remeasurement of tax items from prior periods, while the corresponding quarter of 2018 included positive remeasurements of tax liabilities as a result of changed income taxation. Without the tax remeasurements and introduction of IFRS 16, earnings per share for the quarter would have increased by 124 percent to SEK 0.67 (0.30).

In summary, I am pleased with how the operations have developed during the second quarter. Volati is in very good shape and we look forward to continuing our efforts to create long-term value growth – both through acquisitions and by developing existing operations.

Mårten Andersson, President and CEO 

Conference call

CEO Mårten Andersson and CFO Mattias Björk will present the interim report in a conference call on 16 August at 9.00. The presentation will be conducted in Swedish.

Phone number to access the conference call: +46 8 505 583 58. For a webcast of the conference call, go to www.volati.se.

This information is information that Volati AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (MAR) and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 7.45 a.m. CEST on 16 August 2019.

For more information, please contact:

Mårten Andersson, CEO, +46 72 735 42 84, marten.andersson@volati.se
Mattias Björk, CFO, +46 70 610 80 89, mattias.bjork@volati.se

Volati AB (publ)
Corporate reg. no. 556555-4317
Engelbrektsplan 1, SE-114 34 Stockholm
Tel: +46 8 21 68 40
www.volati.se

About Volati

Volati is a Swedish industrial group, formed in 2003, organised in four business areas: Trading, Consumer, Akademibokhandeln and Industry. Volati mainly acquires reasonably valued companies with proven business models, leading market positions and strong cash flows and develops them with a focus on long-term value creation. The strategy is to build on the companies’ identity and entrepreneurial spirit, adding leadership, expertise, processes and financial resources. Volati has operations in 16 countries, over 2,000 employees and annual sales of approximately SEK 7 billion. Volati’s ordinary shares and preference shares are listed on Nasdaq Stockholm. Further information is available at www.volati.se.