Volati AB

Good morning everyone and welcome to today's presentation where we have Volati presenting. With us we have the CEO Andrea Stenbäck and CFO Martin Aronsson. We'll open up for a Q&A after the presentation. You can either type in your questions using the form or if you're calling in and would like to ask a question please press star 9 to raise your hand and star 6 to mute yourself when you get the word. And with that said please go ahead with your presentation.

Thank you. Very happy to have all of you listening in today. So let's get into the presentation of the Q1 result. So Melotti, we're a growing group of well-managed companies with strong earnings. I would like to remind you about that we are operating with six platforms. We have Solix Group, Etiquette Group and the four platforms within business area industry. We've had an average annual growth of 17% since 2019, so more or less the last five years, and that's despite the recent year's market headwinds. Looking at Q1, one could see that the trend from last quarter remains. It's the second quarter in a row where we see some signs of recovery in the market after many years of tough conditions. Sales growth was 15%, but I'm even more happy about looking at the organic sales growth, which was 4%. We've also, thanks to improved margins, seen the effect in the EBITDA growth, which was 48%, we're off 33% organic. And all platforms except for Coraventa contribute to that profit growth. We will get into Coraventa a bit later on, but to just say one sentence about it, it's mainly because of Coraventa having a really strong quarter last year. So tough comparables for that platform. As I said before, we do see some signs of recovery in the market, in particular when it comes to the construction related segment, which everyone knows is important for us at Volati. But I have to remind everyone that it's from low levels. It takes time and we expect it to take time. And this market still varies a lot between months. So It's not that we've seen any dramatic shift, but we've seen some kind of stabilization and slight improvement in the market, which is very promising. And that's what shows in the organic growth. Tuna Group within business area industry still facing headwinds. We've said that now for a few quarters. It's a slow market in large parts of Europe, but we still have the Landmannen project, which somewhat compensate for that market trend. Trade tariffs, it has limited direct impact on Volati. We see it in communication and in particular to the North American volume that they deliver. But other than that, it's not that much direct effects that we see within Volati. And we've done two acquisitions so far this year, adding a little more than 300 million of annual revenue. One could also take the acquisition that we did in December into account. And then we're up at 750 million of annual turnover that we have acquired the last four or five months. We have expanded the credit facilities during the quarter and that's just to be on top of things and make sure that we have the liquidity needed to continue growing with acquisitions. And as you've heard me say before, we haven't delivered on our financial growth targets for the last two years. And we're supposed to grow 15% annually on EBITDA. And that means doubling the EBITDA every five years. So that's something that we haven't delivered on the last couple of years, which have created a growth gap. We have, however, taken several long-term structure measures during the last years, and our platforms are very well prepared to monetize on the market recovery once we see it. And I think already in Q1, we see some small signs of that. In addition, we have continued acquiring companies and thanks to that we have companies with strong cash flows and we also went into this period with a low net debt to EBTA levels. We have been able to continue acquiring companies and this will also help us closing the growth gap once we see that the market will get back to more normal levels. A little bit more on the actual numbers then. So these are the Q1 numbers. I already touched upon the net sales and EBITDA. Operating cash flow. Q1 is typically, because of seasonality, negative operating cash flow quarter for us. And that also means that if you take that into account, and also that we did the acquisition of Kleber, our net debt to EBITDA has increased to 2.9. So it's now in the upper part of our financial goal, but that's very much expected. And I would also like to remind you, I do that every time this part of the year, that we have the strong cash generating quarters ahead of us, in particular in the second half of the year. If you look at the numbers of the last 12 months basis, which I actually think is better when it comes to Bellotti, more or less everything points in the right direction. Sales margins in EBITDA increased in Q1 compared to Q4. And as I said in the introduction, when we look at the last five years, we have grown our EBITDA on an annual basis. average base of 17%. So looking at this, Q1 was the first step to compensate for the last year's slower growth rates in relation to our financial goals. And with that, I leave to Martin to give you a bit more information about the financial targets.

Yeah, thank you, Andreas. So let's look at our performance in relation to our three financial targets. And let's start with the EBITDA growth during the last 12 months. And as Andreas mentioned, we have a strong EBITDA growth in the quarter, which is then also resulting in that our EBITDA growth per ordinary share during the last 12 months over 5% now in the quarter. which is an improvement from minus 11% in full year 2024. This is still below our target, but it's also worth noting that our target is over business cycles, and our five-year average performance on EBITDA growth is 17%. Our second financial target is our return on adjusted equity, which came in at 17% versus our financial target of 20%. It's below our target now, driven by a lower EBITDA growth. But during the last five years, we have delivered on average 33% return on adjusted equity. And lastly, our capital structure, which is where our net debt ratio came in at 2.9, which is in the higher range of our financial target ratio between two and three times. But as Andreas mentioned, the development in the quarter was expected as Q1 is the quarter with the seasonally lowest cash flow. And we also completed the acquisition of Clever during this quarter. So let's look at how our business areas are performing, and let's start with Salix Group, who saw net sales growth of 25%, of which roughly two-thirds was acquired, and roughly one-third was organic growth. And at the same time, EBITDA almost doubled compared to last year, and the margin in the quarter increased with three percentage points in the quarter. And thus, this is really showcasing the great work that the Solix Group has done, working with cost control and then also extracting synergies from acquisitions and working with coordination benefits. And Salix Group saw a cautious market improvement in the quarter. However, it was at a slow pace and still there are quite some uncertainties regarding the future development. And regarding currency, we saw a positive currency effect for Salix Group since they do a lot of purchasing in foreign currency, while the majority of the sales is in Swedish kronos. We're also happy to see that Salix completed the acquisition of Hans Eggestrand after the quarter. We also see significant potential to grow further through acquisitions in this business area. Let's move over to Etiketter Group, who continues to deliver another strong quarter. Sales increased with 32% in the quarter, driven by the acquisition of Clever, but also through a strong organic growth. And IPT-A in nominal terms increased with 35% and margins increased slightly, which to us is quite impressive given that the newly acquired Clever Etiquette has significantly lower margins compared to the rest of Etiquette Group. And speaking about Clever, the integration of Clever is progressing well and the work with extracting synergies and operational improvement has started. And as mentioned before, there was a good organic growth for Etikett Group during the quarter, and they also saw solid order intake, especially in the Swedish business, and that is putting the completed capacity expansions in good use. And also with Clever's new home market platform to grow from, we see significant potential to grow further through acquisitions. So let's look at our last business area industry who saw a slight revenue decline of 2% in the quarter. So it's a slight revenue decline of 2% in the quarter and a decline of roughly 2 million to 22 million SEK in the quarter. But this is the smallest quarter in the EFO industry. And also, as Andreas mentioned, three out of our four platforms in the industry is improving data contribution from last year. Communications performed well in the quarter, increasing the EBITDA contribution despite the lower deliveries to the U.S. market. And Torne Group is still facing a weak market, however, increases the result from last year, partly driven by the Lantmann and Propecta. And then St. Eriks continued to face a challenging market situation in the construction segment, while the demand in the infrastructure segment is stable. And lastly, Coruventa, who in this quarter did not see any significant effects from floodings and was also facing strong comparables from the last first quarter in 2024, who did see quite significant effects from floodings. And that sums up the industry. And with that, I leave the word to you, Andreas.