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Year-end report January–December 2019

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Q4 October–December 2019

  • Net sales amounted to SEK 1,801 (1,831) million
  • EBITDA increased to SEK 291 (210) million
  • EBITA increased by 12 percent to SEK 194 (173) million
  • Organic EBITA growth was 3 percent
  • Profit after tax increased by 35 percent to SEK 163 (121) million
  • Earnings per ordinary share increased by 40 percent to SEK 1.82 (1.30)

Period January–December 2019

  • Net sales increased by 12 percent to SEK 6,833 (6,084) million
  • EBITDA increased to SEK 909 (552) million
  • EBITA increased by 18 percent to SEK 513 (433) million
  • Organic EBITA growth was 4 percent
  • Impairment of intangible assets of SEK 328 million in the Consumer business area
  • Profit after tax amounted to SEK -2 (274) million. Adjusted profit after tax, excluding impairment of intangible assets of SEK 324 million after tax, was SEK 322 million
  • Earnings per ordinary share amounted to SEK 0.13 (2.58).) Excluding impairment of intangible assets, adjusted earnings per ordinary share amounted to SEK 3.12
  • The Board proposes a dividend of SEK 1.10 (1.00) per share

Events after the reporting period

  • On 21 January, all of the shares in the screws and fastenings supplier Heco Nordiska AB were acquired
  • Volati’s Board has decided to adopt new financial targets

COMMENTS FROM THE CEO

A stable end to a good year

EBITA for the fourth Q4 increased by 12 percent to SEK 194 million and for the full year by 18 percent to SEK 513 million. Organic EBITA growth was 3 percent in the fourth Q4. The good earnings and strong operating cash flow of SEK 439 million in Q4 mean that net debt is low and we therefore continue to have good acquisition capacity.

Good development for Trading continues
The Trading business area showed a strong earnings trend in Q4. This development is particularly pleasing given that the business area was challenged by a weak Swedish krona throughout the year. The business area currently acts as a group of companies which have a clear industrial logic between them and a common platform for logistics, IT and finance. This means, among other things, that we can identify and deliver synergies when making acquisitions in the business area, giving us good opportunities to continue to grow and create value.

Strong quarter for Industry
The Industry business area also delivered a strong result in Q4, with all business units contributing. Looking at the full year, EBITA for the Industry business area is good, but our expectations were at a higher level. Operations in the business area are affected by fluctuations in demand due to project sales and by weather-related fluctuations. These fluctuations in demand have had a negative impact on earnings for the full year.  During the year, we successfully implemented major changes in S:t Eriks, leaving us well equipped for growth in the business unit in the coming years.

Akademibokhandeln – good development for stores during the quarter, temporary challenges for e-commerce
The Akademibokhandeln business area has shown very positive development during the year, with growing sales and considerable success in the non-books range. It is therefore particularly disappointing that the Bokus e-commerce store was affected by temporary delivery problems during the important fourth quarter. During the year, the company changed its logistics management with its 3PL supplier to offer customers even faster delivery times. However, the change did not go according to plan for deliveries during the Christmas trading period. In addition to creating problems for customers, sales volumes were negatively affected while costs related to customer service staffing increased. The business area has worked intensively to deal with the delivery problems and we believe that these will gradually subside. The challenges for Bokus meant that both sales and earnings declined during Q4 compared with the same period the previous year, despite an otherwise good performance for Akademibokhandeln. I would particularly highlight good store sales during the quarter – notably during the Christmas trading period.

Earnings improvement for Consumer
The Consumer business area delivered a 30-percent improvement in earnings in Q4.  The inspection business continues to develop well and we are very pleased with the successful work that has been done to adapt the operations to the changed inspection rules.

Many acquisition opportunities
In recent years, Volati has made extensive efforts to engage the business area organisation and business units in the process of identifying and driving forward potential value-creating add-on acquisitions. This has worked well and we have seen results in the form of an increased inflow of acquisition candidates during the year. Four acquisitions were made during 2019 and a further acquisition were made after the end of the period – all of them add-on acquisitions for existing operations. When making add-on acquisitions, Volati is even more of an industrial buyer and sees synergies as a way of creating value in the businesses.

New financial targets
Since Volati’s ordinary shares were listed on Nasdaq Stockholm in 2016, the Company’s net sales have more than doubled and EBITA has increased by 61 percent. On the basis that Volati has developed as a company in several respects since then, the Board has decided to adopt new financial targets for Volati, to coincide with this year-end report. These are described in detail on page 12.

The new targets do not involve any change of direction for Volati. We will continue to develop the Company at a high rate, with a strong focus on creating long-term value for our shareholders. Volati enters 2020 with a strong financial position. With a net debt of 1.5x EBITDA at the end of the year, we have the financial capacity to continue building Volati in accordance with the Group’s strategy.

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 20 February. 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 20 February 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.

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