Volati Interim Report January-June 2022.

Quarter April–June 2022

*) Key figure includes discontinued operations

Comments from Volati’s CEO
The second quarter of the year has developed well, with sales growth of 33% and an 18% increase in EBITA. This sums up a good first six months, with continued high acquisition activity and five completed acquisitions, which will bring Volati approximately SEK 800 in annual sales, with good profitability.

Our two business areas continue to show an increase in both sales and profit. For Salix Group, the growth is slightly lower as the comparative figures from the same period in 2021 are very high. As in the previous quarter, we have noted some caution among consumers. We continue to see good demand in the professional and industrial market, which accounts for about 80% of Salix Group’s EBITA. We are responding to the high cost inflation with price increases but see that some effects of these do not always match each other in time. The organisation continues to work actively on pricing and growth-promoting measures. We expect similar market development in the coming quarters, as we continue to face tough comparisons in terms of revenue and earnings.

In the previous quarter, Industry was affected by the war in Ukraine and the strike at UPM in Finland. It is pleasing to say that we have begun to deliver to Ukraine again, albeit on a limited scale. We have been successful in finding new volumes in other countries to counteract the effects of reduced volumes caused by the war. The strike in Finland, which resulted in material shortages for the Ettiketto Group business unit, ended in late April. The negative impact continued throughout the quarter, but with material supply now largely normalised, we expect an active autumn as we meet the needs of the market. The mix effect of development in the companies has had a certain negative effect on margins this quarter, which has been mainly offset by economies of scale and synergies. We do not yet see significant signs of a slowdown in the business area’s operations.

Active ownership throughout the business cycle

Together, the tragic circumstances in the world around us and increasing imbalances are pushing inflation up towards historically high levels. The trend is increasingly affecting the real economy, with higher interest rates and consumers becoming more and more depressed. There are now many indications that we are moving towards an economic slowdown.

We are well prepared to deal with the expected deterioration in the economy. Our decentralised governance model has proved its worth as our businesses quickly find effective solutions to new challenges. In these situations, we also have an important function to fulfil as an active owner, by working to raise awareness at an early stage and setting up Group-wide initiatives, such as knowledge sharing. Our role as a responsible owner is to look around the next corner and we have encouraged our companies to prepare for an economic downturn by actively evaluating their paths forward under different possible scenarios.

Volati is a well-diversified Group, with many of our businesses being only slightly affected by the general economic climate. Approximately 50% of Volati’s EBITA is exposed to different industry segments, such as labelling, air dehumidification, agriculture and forestry. About 35% is exposed to the building sector, including 10% to do-it-yourself consumers. The remaining 15% of Volati’s EBITA is exposed to the infrastructure market. Our governance model and diversification, together with a strong balance sheet, mean that I expect us to emerge even stronger from a more challenging external environment.

Cash flow and balance sheet

Our balance sheet remains strong, with a net debt/adjusted EBITDA ratio of 2.2x. The ratio is at the lower end of our target range. It has increased during the year, as a result of dividends, repurchase of shares in the Salix Group business area and completed acquisitions. Our tied-up working capital is higher than desirable and our business units are working actively to free up capital. These efforts will contribute to improved cash flow and lower debt.


We have maintained a high level of acquisition activity in the quarter, and in the last twelve-month period we have completed eight acquisitions, adding approximately SEK 1.1 billion in annual sales. As a long-term owner, we can continue making acquisitions even during more difficult phases of the economic cycle, although we also keep an extra eye on cash flow and debt levels during these times. As an industrial buyer, we have a clear vision of how we want to develop in each sector in which we are active, and which companies we want to acquire in order to strengthen our platforms. In many cases, it is contacts and relationships going back many years that eventually lead to a transaction.

Overall, we have delivered good growth during the quarter and we are very well prepared to meet potential market scenarios going forward. I am convinced that our business model creates long-term value not only during upturns but also in more difficult circumstances.

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