Volati Interim Report January-March 2022.
“A good start to 2022”
Andreas Stenbäck, President and CEO
Quarter January–March 2022
- Net sales increased by 33 percent to SEK 1,665 (1,254) million
- EBITA increased by 1 percent to SEK 102 (102) million
- Profit after tax declined by 19 percent to SEK 54 (66) million
- Earnings per ordinary share for continuing operations declined by 25 percent to
SEK 0.42 (0.56)
- Earnings per ordinary share increased by 3 percent to SEK 0.42 (0.412)
- The quarter’s earnings were negatively affected by the war in Ukraine and by material shortages due to the now ended strike at the paper manufacturer UPM in Finland
- On 17 January, the acquisition of the Norwegian label producer Skipnes for the Ettiketto Group business unit was completed
- On 1 March, the acquisition of the lock and fittings company Gunnar Eiklid AS for
the Salix Group business area was completed
Events after the reporting period
- On 8 April, the Finnish company Terästorni OY, a global market leader in special equipment and tanks for the pulp and paper industry, was acquired for the Tornum business unit in the Industry business area.
- On 25 April, Volati acquired MAFI Group AB, a global market leader in mounting solutions, primarily for telecom equipment and solar panels. MAFI is a good complement to our Scanmast business in the Industry business area.
Comments from the CEO
2022 has started well for Volati despite tragic circumstances in the outside world, with Russia’s war in Ukraine. Our businesses are developing very well and in line with the developments we have seen in recent quarters. Net sales increased by 33 percent and EBITA by 1 percent compared with the same period in 2021. The lower growth in EBITA is explained by the negative effects of the war in Ukraine and the now ended strike in Finland. These events have been handled well and I expect us to be able to compensate for these negative effects during the remainder of the year. Acquisition activity has been high in the early part of 2022 and to date we have completed four acquisitions that will bring Volati just over SEK 600 million in annual sales, with good profitability. All of the acquisitions are add-on acquisitions and we expect to exploit synergies from them.
Our two business areas continue to perform well during the early part of 2022. Salix Group’s net sales increased by 20 percent compared with the same quarter the previous year; EBITA increased by 9 percent in the same period. We are seeing strong demand in the professional and industrial market, which benefits the business units targeting the building and wood industries, while we are experiencing some caution among customers in the consumer-oriented part of Salix Group’s operations. We are working actively on pricing and growth-promoting measures. We completed one acquisition for Salix Group during the quarter and we see good opportunities to continue the acquisition-driven growth. Our efforts to build a strong and independent business area continue.
In Industry, we have seen continued strong underlying demand. This, together with completed acquisitions, means 50-percent growth in sales compared with the same period in 2021. EBITA growth amounted to 1 percent during the same period, having been affected by the following two situations: Tornum’s exposure to Ukraine and Russia had a negative EBITA impact of approximately SEK 25 million and the now ended strike at UPM in Finland had a negative impact of approximately SEK 10 million on Ettiketto’s EBITA, due to material shortages. For Tornum, we expect very minor earnings effects from the exposure to Russia and Ukraine for the remainder of the year. Ettiketto Group still has a good order intake and we expect temporarily higher volumes than usual when material supply returns to normal. Since the turn of the year, we have completed three add-on acquisitions in the business area and we see further acquisition opportunities for most of our businesses in Industry.
Russia’s invasion of Ukraine has once again shown that Volati’s local responsibility works well not only from a financial perspective, but also in dealing with challenging situations on a human level. Tornum and its staff in Ukraine’s surrounding areas have taken good care of employees and their families who have been forced to flee. Employees and major shareholders of the Volati Group have also arranged fundraising for those hit
by the war.
Continued work on our value-creating business model
Volati continues to stand strong, and with our decentralised governance model and strong local entrepreneurship in our operations, we are confident that we can continue to deliver value effectively.
We have managed to maintain our high acquisition rate – over the last 12 months we have acquired companies with total annual sales of approximately SEK 1,500 million, including approximately SEK 600 million in 2022. We expect significant value creation after the acquisition date in the form of synergies, coordination benefits and continuing development
of our companies.
A central part of Volati’s business model and development of our companies is skills and leadership development. We take our long-term ownership seriously, which is why developing our existing leaders and nurturing new ones is a top priority for us. In this context, it is pleasing that to note that 15 of our 22 CEOs were recruited internally, and two of our most recently recruited CEOs have come through Volati Management Program – our programme for young managers of the future, where we cover areas such as strategy, leadership and Volati’s values. Another part of our skills and leadership development work is Volati Knowledge, where we give the business units tools to improve their work processes through training in areas such as acquisitions, purchasing and sustainability.
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