Interim Report January–March 2020
Quarter January–March 2020
- Net sales increased by 7 percent to SEK 1,658 (1,544) million
- EBITA increased by 65 percent to SEK 62 (37) million
- Profit after tax increased to SEK 14 (-1) million
- Earnings per ordinary share amounted to SEK -0.02 (-0.21)
Events after the reporting period
- On 16 April, Volati announced preliminary results for Q1 2020 and issued an update on the impact of the Coronavirus.
- On 16 April, Volati is postponing the AGM from 6 May to 25 June 2020.
COMMENTS FROM THE CEO
A strong first quarter
Volati delivered a significantly improved EBITA for Q1 2020. EBITA amounted to SEK 62 million, an increase of 65 percent compared with the same quarter the previous year. Net sales increased by 7 percent to SEK 1,658 million. Behind the figures is good development in all business areas. The effects of the Covid-19 pandemic had only a limited impact on the Group during the quarter.
I am very pleased with the first quarter. We are working constantly to ensure strong basic earnings for our operations, which I have talked about in previous reports. We place great focus on cost control, pricing and purchasing. This long-term work in these areas has paid off during the first quarter and is a strong contributor to our improved earnings. With the business units fundamentally having efficient and profitable operations, this means that the right conditions for us to invest in growth-creating initiatives and add-on acquisitions are in place.
Uncertainty from Covid-19 managed
I am proud of how our organisation has managed the initial challenges and uncertainty that follows the outbreak of the Covid-19 pandemic. All of us, from the Board of Directors and Group management to the business areas and their company management, acted early and worked systematically and in a coordinated way to protect the health of employees, strengthen liquidity and ensure profitability for the business units. By way of example, Besikta was quick to introduce new inspection procedures to reduce the risks both to its staff and customers, while enabling the business to continue according to plan.
Another strong quarter for Trading
The Trading business area reported another strong quarter, with growth in both sales and earnings despite challenges in the form of a weak Swedish krona. It is pleasing to see that we continue to obtain leverage from our efficient logistics platform and strong brands. The business area, which works continuously to identify and evaluate acquisition opportunities, acquired the screws and fastenings specialist Heco Nordiska during the quarter.
From the end of the quarter to the reporting date, the Trading business area continued to have good demand in Sweden. Demand in Denmark, Finland and Norway has begun to recover as markets open up. Lockdown of individual countries has resulted in certain delivery disruptions for the business area.
Industry doubles earnings
The Industry business area was one of the highlights of the first quarter, with growth in sales and an EBITA that was more than doubled. It was pleasing to see all business units developing strongly during the quarter and advancing their positions. The units operating outside the Nordic region have dealt effectively with the complexity arising from the Covid-19 outbreak.
From the end of the quarter to the reporting date, the Industry business area continued to have good demand, apart from individual business units’ operations outside the Nordic region. Cost savings have been initiated in the markets concerned.
Akademibokhandeln – unchanged earnings despite Covid-19 impact
Of our business areas, Akademibokhandeln is the one that has to date felt the effects of the Covid-19 outbreak most keenly. The business area had good demand at the beginning of the quarter, but since mid-March, store sales have been lower than normal for the period. Despite this, the business area delivered an unchanged EBITA compared with the same quarter the previous year – a testament to the strengthened efficiency and profitability of the operations. The business area has a well-functioning store network, two strong consumer brands and great customer relationships.
It is particularly pleasing to see that our three digital channels – Akademibokhandeln.se, Bokus.se and Bokus Play – showed a positive trend during the quarter. The temporary delivery problems that affected e-commerce in Q4 2019 have now been resolved and deliveries are proceeding according to plan.
From the end of the quarter to the reporting date, the Akademibokhandeln business area has noted that store sales are on average 30 percent lower than normal for the period. The digital channels have continued to develop very positively. Spring is seasonally a period of lower sales and earnings for the business area.
Consumer improves earnings
The Consumer business area reported a good quarter, with EBITA growth compared with the same quarter the previous year. This was despite a decline in sales now that the former business unit me&i is no longer consolidated by Volati. In particular, the inspection business showed good profitability and had a strong market position.
From the end of the quarter to the reporting date, the Consumer business area has not noted any significant impact on the conditions for its operations.
Meeting the challenges from a position of strength
The Covid-19 pandemic and the measures taken around the world to reduce the spread of infection have created exceptional developments in the external environment. It is our assessment that the risk of future negative effects has increased but the extent to which they could affect us cannot be predicted. Parts of our business, such as the inspection business, are also affected by regulations and political decisions concerning these. However, we meet the challenges from a position of strength – both operationally and financially. The good Q1 results show that we have well-managed and profitable operations. Our financial position also remains strong, with a net debt of 1.9x (2.1x) EBITDA. We have also extended both the overdraft facility and revolving credit facility, and have a total of SEK 693 million in unutilised overdraft credit and cash & cash equivalents as of the reporting date.
We continue to work on developing Volati in line with the long-term value growth target, both by acquisitions and equipping the existing companies for growth. At the same time, we do not underestimate the period ahead and are prepared to take further action if required by the market situation.
Mårten Andersson, President and CEO
Conference call
CEO Mårten Andersson and CFO Andreas Stenbäck will present the interim report in a conference call at 09.00 on 5 May. The presentation will be conducted in Swedish.
Phone number to access the conference call: +46 8 505 583 73
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. The information was submitted for publication, through the agency of the contact persons set out below, at 07.45 CET on 05 May 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.