Interim Report January–September 2020
Quarter July–September 2020
- Net sales increased by 7 percent to SEK 1,828 (1,711) million
- EBITA* increased by 3 percent to SEK 157 (153) million
- Profit after tax increased by 322 million to SEK 97 (-225) million
- Earnings per ordinary share increased by SEK 3.0 to SEK 1.00 (-2.00)
- An agreement for the sale of Besikta was signed after the end of the quarter. EBITA excluding Besikta increased with 26 percentage
Period January-September 2020
- Net sales increased by 7 percent to SEK 5,376 (5,032) million
- EBITA* increased by 25 percent to SEK 400 (319) million
- Profit after tax increased by 390 million to SEK 224 (-166) million
- Earnings per ordinary share increased by SEK 3.85 to SEK 2.17 (-1.68)
Events after the reporting period
- Volati has signed an agreement to sell all shares in Besikta Bilprovning to Applus+. The transaction is taking place at an estimated enterprise value of approximately SEK 1,050 million and is expected to generate a capital gain of SEK 750 million for Volati.
Comments from the CEO
Continuing strong profitability development and two exciting add-on acquisitions
Volati continued to grow during the third quarter. EBITA (excluding Besikta) increased by 26 percent and amounted to SEK 161 million and we also achieved the return on adjusted equity target of 20 percent. The result for the quarter confirms the positive trend of very good earnings growth in our operations during recent years. This excellent development is the result of our long-term and systematic work to acquire and develop strong business units with good company management, clear strategic agendas and growth capacity. After the end of the quarter, we signed an agreement for the sale of Besikta Bilprovning.
Continuation of very high growth in Trading and an important acquisition in Finland
The Trading business area has delivered another quarter of high growth in both sales, SEK 675 million (26 percent), and earnings, SEK 79 million (58 percent), compared with the previous year. The market has remained strong during the quarter, and Trading has been able to benefit from this through its well-known brands and leading market positions. The combination of this and our efficient logistics platform means that profitability during the quarter was very good. The Trading business area is currently recognised as a good industrial buyer in the acquisition market within its market niches, which gives us a good inflow of potential acquisition candidates. During the quarter, Trading made a strategically important and attractively valued acquisition by purchasing the Finnish company Pisla, confirming the business area’s position as a leading Nordic supplier of fittings for the hardware and building materials retail sector.
Growth and further acquisitions in Industry
The Industry business area had another good quarter, with increases in both sales, SEK 578 million (8 percent), and earnings, SEK 64 million (26 percent). The business area’s business units are product leaders with strong market positions and good profitability growth. The Ettiketto business unit made its second add-on acquisition of the year with the purchase of Märkas during the quarter. Ettiketto has developed into a Swedish market leader in the area of labels and labelling systems, a position that has been further strengthened by the two acquisitions during the year. This is a clear example of our ability to create strong platforms within our business areas that can be expanded through continuing add-on acquisitions.
Akademibokhandeln increases sales and earnings
The Akademibokhandeln business area increased both its sales and earnings during the quarter. Sales for the digital channels Bokus, Akademibokhandeln.se and Bokus Play increased by 20 percent compared with the same period the previous year and now account for 45 percent of the quarter’s sales. Store sales showed a clear recovery and were only 8 percent lower than in the same period the previous year. The corresponding figure for the second quarter was -27 percent. Akademibokhandeln is working intensively on preparations to ensure that all customers in our stores have a safe and positive experience during the important Christmas shopping period.
Temporary challenges for Consumer
The third quarter was challenging for the Consumer business area, with considerably lower sales and earnings than in the same period the previous year. This is solely a result of the Omnibus Regulation, a temporary EU regulation introduced in response to the corona crisis. This means that the time limit for motor vehicle inspections in Sweden has been extended by seven months. As many chose to take advantage of the opportunity to postpone inspections, the vehicle volumes for Besikta and the whole sector declined, primarily in July and August. In September, the volumes were back at normal levels.
Sale of Besikta to Applus+
After the end of the quarter, we signed an agreement with the Spanish company Applus+ for the sale of Besikta Bilprovning. The transaction will take place at an enterprise value of approximately SEK 1,050 million and a purchase consideration of approximately SEK 840 million, bringing a capital gain of about SEK 750 million in the fourth quarter.
When Volati acquired the business, there was no company management, brand or IT systems. The transaction was complex and there was little financial history. It is when opportunities like these emerge that Volati is at its best and we completed the transaction at a reasonable valuation. Since then, we have worked with employees and management to build the industry’s leading company. The station network has now tripled in size and Besikta has one of the industry’s strongest brands and customer offerings, with very good profitability. We have created significant value for our shareholders, which we are pleased about.
Besikta’s EBITA for rolling 12 months amounted to SEK 71 million, which was 12 percent of Volati’s total EBITA. We notice that the five acquisitions that Volati closed 2020 had an EBITA in line with Besikta’s EBITA. The acquisitions were closed at a total Enterprise value of less than SEK 300 million versus the sale of Besikta at Enterprise value of SEK 1,050 million.
Very strong financial position - continuing growth
The net debt to adjusted EBITDA ratio at the end of the quarter was 1.4 times and the financial position will be strengthened in Q4 as a result of the sale of Besikta. We are in excellent shape – financially and organisationally – which means that we have very good conditions to continue to grow strongly and create high shareholder value, as Volati has always done.
Mårten Andersson, President and CEO
CEO Mårten Andersson and CFO Andreas Stenbäck will present the interim report in a conference call on 22 October at 10.00. The presentation will be conducted in Swedish.
Phone number to access the conference call: +46 8 505 583 51
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 CEST on 22 October 2020.
For more information, please contact:
Mårten Andersson, CEO Volati AB, +46 72 735 42 84, email@example.com
Andreas Stenbäck, CFO Volati AB, +46 70 889 09 60, firstname.lastname@example.org
Volati AB (publ)
Corporate reg. no. 556555-4317
Engelbrektsplan 1, SE-114 34 Stockholm
Tel: +46 8 21 68 40
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.