Volati AB

Good morning, and welcome to today's web class presentation with Volati. With us presenting today, we have the CEO, Andrea Stenbeck, and CFO, Martin Aronsson. We'll do a Q&A after the presentation, and you can either type in your question using the form that is located to the right, or if you're calling in and would like to ask a question, please press star nine to raise your hand, and then star six to unmute. We will then announce if it's your turn by saying the last four digits of your phone number. With that said, I'll give the floor to you guys. Please go ahead with your presentation.

Thank you, and thank you everyone for listening in today. Despite the summer that we have outside, let's start by getting into the presentation. First, a couple of comments on our second quarter. It's a solid quarter, which I am very happy about, given the circumstances. We have sales and EBITDA, and thus also margins that came in line with last year's quarter, which is very strong, given that we still see a challenging market environment with declining volumes, both in the construction market and the 5G rollout. However, we do see some positive signs on the horizon as the volume decline in our part of the construction market are somewhat lower in this quarter. And we do also see some signs of a positive signs with regards to the 5G rollout in the North American market. However, we do not expect any dramatic shifts short term. Some short comments on the business areas then. SOLIX did a very good quarter in the challenging market. Acquisitions helped contribute to an overall 6% sales growth and slightly improved margins. And I think SOLIX is a very good example of how we now successfully balance short-term cost savings and long-term value creation. Etiketto had a very strong quarter, organically growing top line with 7% and significantly improved the margins. And that resulted in a 30% EBITDA growth. And Etiketto then being a great example of a platform where we see that strength in making add-on acquisitions, because it is the effects of these add-on acquisitions that now gives us the good results EBITDA growth, we are continuously improving margins as we realize synergies and we implement efficient improvements in the companies that we have acquired. Industry showing a decline in sales in EBITDA and that's mainly market driven and it's attributable to the significantly slower 5G rollout pace that we have in the platform communication. And what we should keep in mind is that we had a very strong 5G rollout in the comparable quarter last year. So we're also meeting some tough comparables in that business area. The operational cash flow in the quarter was strong, 26% improvement compared to last year. And last year, the operational cash flow was actually quite good as well. The net debt came in at 2.7, which is a level which we're comfortable with and provides room for further acquisitions. And lastly on this introduction, we have added Åsa Holmgren to our leadership team, which will strengthen and increase our efforts within strategic HR. So very happy to welcome her here joining us of the summer in August. Looking on the next slide with some more detailed numbers, as you can see, sales and EBITDA in line with last year, and also an operational cash flow coming in at around 210 million SEK, which is then a 26% improvement compared to last year. Taking a step back and looking at the last 12 numbers, as well as some more historical figures, We're now showing a sales on an annualized basis of 7.6 billion Swedish crowns and an EBITDA of 660 million. As I often mention, Volati is best evaluated over time. And looking at the development from 2018, we have been able to show an average annual growth rate of 19% per year. So that's since 2018 in our continuous operations. However, which can also be seen on this slide, since 2021, the growth rate has been a lower financial goal, so below 15% per year. And that has been market driven. And it's something that we expect to compensate for with accelerated organic growth once the market we operate in start to improve and volume start getting back to normal levels. With that, I leave the world to Martin.

Thank you, Andreas. So let's look at our performance in relation to our three financial targets, starting with the EBITDA growth per common share during the last one month. And as Andreas mentioned, right now we have a market headwind in a few of our platforms affecting growth negatively. And we are now at minus 17% EBITDA growth versus our target of 15%. However, it's worth noting that our target is measured over business cycles and our five-year average growth is 21%. Over time, we're also very comfortable with our long-term financial target. And our second financial target, the return on the adjusted equity, came in at 17% versus our financial target of 20%, which is below our target, and that is driven by a lower EBITDA growth. However, taking a longer term perspective also there, during the past five years, we have delivered on average 30% return on equity. And lastly, our financial targets regarding our capital structure, where our net after EBITDA ratio came in at 2.7 times in the quarter, which is within the range of our financial target ratio between two and three times, which means that we have still financial capacity left to act on the right acquisition targets that comes our way. And so let's look at how our three business areas are performing. And let's start with the Solix Group, who delivers a solid quarter. Sales increased with a 6% driven by acquisitions, while demand continues to be hampered due to headwind in the construction industry. The EBITDA margin improved in the quarter and the EBITDA increased with 8 million SEK in nominal terms. And during the past two years, Sarlik Group has worked proactively with cost control and also with realizing coordination benefits and synergies while also working with the market development. And this is really showing effect now with the last 12 months margins now being higher compared to one year back, despite that they have a lower volume. And also with the measures that they have taken, we are confident that Salix is in good shape when the demand recovers. The integration of the newly acquired companies Trejan and Beslag Design is going well, and we are also well positioned for further acquisitions going forward. Our second business area, Etiketto Group, delivers another strong quarter. Sales increased with 7% in the quarter, fully through organic growth. Etiketto Group is meeting a good demand with a solid order intake, and that is especially in the Swedish business, and they are now in the process of expanding their production capacity to be able to meet the demand that they see. We're also happy to see that the trend of increasing EBITDA continues, as Andreas mentioned, and we are now four percentage points higher EBITDA margin in the quarter compared to last year. And to us, this really shows that the strategy of acquiring companies with a lower margin and then working with synergies and operation improvements is really paying off. And Etiketto Group's last one month margins are now back at 20%, which is a fantastic achievement by the team at Etiketto. The business areas are looking for further acquisitions, both in the Nordics and the rest of Europe, and we see a significant potential to grow going forward. Lastly, we have our business area industry, which Q2 concludes a tough quarter with a sales decline of 12% and an EBITDA decline of 19%. Our platform within the business area, Corventa performed well in the quarter due to early summer storms in Europe, which is driving the demand for water damage remediation products. Sankt Eriks performed a stable quarter despite the demand in the construction segment continuing to be weak, but Sankt Eriks is also continuously seeing positive effect from the cost programs that they have implemented. As in quarter one, we see a continued market headwind for the platform communications due to a slowdown in the international 5G rollout. And they also, as Andreas mentioned, are meeting tough comparables from last year. The cost programs that they have implemented in the platform are starting to yield effects and the comparable figures in the next quarters will be easier. In the quarter, our last platform, Tuner Group, is meeting a slightly slower demand in the agricultural segment, which is mainly explained by timing effects. But all in all, this concludes a tough quarter for industry, with a few platforms performing below what we expect in a normalized market. But as mentioned, we are taking the necessary actions in communications and snack theorics, and we are confident that we are well positioned when the market returns. With that, I leave the word to you, Andreas.