Interim Report January–June 2020
Quarter April-June 2020
- Net sales increased by 6 percent to SEK 1,889 (1,776) million
- EBITA* increased by 41 percent to SEK 181 (129) million
- Profit after tax increased by 86 percent to SEK 112 (60) million
- Earnings per ordinary share increased by 129 percent to SEK 1.19 (0.52)
Period January-June 2020
- Net sales increased by 7 percent to SEK 3,547 (3,321) million
- EBITA* increased by 46 percent to SEK 243 (166) million
- Profit after tax increased by 113 percent to SEK 126 (59) million
- Earnings per ordinary share increased by 279 percent to SEK 1.17 (0.31)
Comments from the CEO
Another quarter of strong earnings growth, with EBITA increasing by over 40 percent to SEK 181 million
Volati continued to grow during the second quarter and delivered a significantly improved EBITA, which amounted to SEK 181 million, an increase of 41 percent compared with the same quarter the previous year. Since the IPO in 2016, our average annual EBITA growth has been 19 percent, which is in line with our overall goal of generating long-term value growth.
Our earnings growth during the quarter has been driven by good development in most of our business areas. This is the result of long-term, consistent work to develop well-managed business units with strong positions in their markets and a clear focus on, and ability to generate, earnings growth. The strong earnings growth combined with streamlined working capital has meant that operating cash flow during the quarter improved to SEK 212 (36) million.
The quarter ended with the acquisition of label producer Beneli AB – our sixth add-on acquisition since 2019. Add-on acquisitions are a natural, and important, part of our growth journey. We utilise the platform we have in the existing business units and strengthen it by building integrated groups of companies that together have a stronger offering and market position in their sector and are able to drive synergies. We have already done this successfully, particularly in the Trading business area, and we see many opportunities in our other business units.
Continuing growth in the Trading business area
The Trading business area reported another good quarter, with growth in both sales and earnings. The business area has been able to benefit from good market conditions during the quarter, for example within the more consumer-driven area of building materials and hardware retail and garden centres. The business area has strong brands and market positions, and an organisation that allows synergies, particularly through its efficient logistics platform. However, some business units are still experiencing minor supply chain disruptions.
Stronger earnings for the Consumer business area
The Consumer business area was the highlight of the quarter, with very strong earnings growth. The growth was driven by our inspection operations which continue their incredibly good development. I am proud of how over the last few years we have built a company that currently has one of the strongest brands in the vehicle inspection sector and a market share of about 25 percent – a company that meets the high expectations of all stakeholders in the inspection business, such as the state, customers and employees.
Akademibokhandeln’s digital channels growing
The Akademibokhandeln business area has managed the challenges in the wake of the Covid-19 pandemic very well. We continue to see high growth in the digital channels AKB.se, Bokus.com and Bokus Play. This partly compensates for the decline of 27 percent in store sales. Thanks to lower costs, earnings were in line with the previous year.
The events of recent months have accelerated our journey towards an even more developed omni-channel offering – the combination of stores and AKB.se – and we see good results with growth of 130 percent in the AKB.se digital channel during the quarter. We are strengthened by people’s keen interest in reading – both physical books and digital versions. We also see the importance of strong customer relationships and this is where Akademibokhandelns Vänner loyalty club comes into its own, with over 2 million members.
Another good quarter for Industry
The Industry business area had another good quarter with stable EBITA growth. The business area is characterised by clear strategies for the operations, good management and a focus on earnings growth. The business units are in many cases product leaders in their areas. The business area’s work on identifying and evaluating acquisition opportunities culminated in the acquisition of Beneli at the end of the quarter.
Covid-19
Q2 was marked by the Covid-19 pandemic and all business areas were, in various ways, affected by its consequences during the quarter. Our business units have taken part in the various support measures that have been available. The overall impact on Volati has been limited.
Focus on growth and long-term value creation
We are now focusing fully on the continuing growth journey and long-term value creation for Volati, with acquisitions representing an important part of the strategy. Earnings per ordinary share have increased by 279 percent for the year to date. The earnings growth illustrates the leverage our capital structure provides for our ordinary shareholders. We continue to have a strong financial position, and the net debt to adjusted EBITDA ratio ended the quarter at 1.3x due to strong cash flows, which provides a large space for acquisitions. We also see a good inflow of potential acquisition candidates – in particular, value-creating add-on acquisitions for our business areas. All in all, this gives us good conditions for building Volati further, both through acquisitions and continuing long-term earnings improvements in our existing operations.
Mårten Andersson, President and CEO
Conference call
CEO Mårten Andersson and CFO Andreas Stenbäck will present the interim report in a conference call at 15.00 on 17 July. The presentation will be conducted in Swedish.
Phone number to access the conference call: +46 8 566 427 04
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 and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out below, at 07.45 CEST on 17 July 2020.
For more information, please contact:
Mårten Andersson, CEO Volati AB, +46 72 735 42 84, marten.andersson@volati.se
Andreas Stenbäck, CFO Volati AB, +46 70 889 09 60, andreas.stenback@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.