Volati AB

Hello and welcome to today's webcast where Volati will present its financial results for the third quarter of 2026. Joining us today are CEO Andreas Stenbeck and CFO Charlotta Nyberg. At the end of the call we will have a Q&A, so you're welcome to submit questions using the form located to the right of the webcast. If you're calling in and want to ask a question, please press star 9 to raise your hand and star 6 to unmute your line when you've been handed the word. With that said, I will hand it over to you Andreas and Charlotta. Please go ahead.

Thank you very much and thank you everyone for listening in today. Let's get into today's presentation. Volati, we delivered continued growth and improved underlying earnings for the third quarter. Sales grew by 12% and that's driven by the three acquisitions that has been performed in 2026, adding a total of 575 million in annual sales. Reported EBITDA came in at 58, which is below last year. However, more importantly, underlying EBITDA grew 15% to set 87 million. I usually do not highlight EBITDA before items affecting comparability, but I think that is justified this quarter. The reason is that we have quite significant items affecting comparability. They are all M&A related, and the larger part are related to synergy-related restructuring costs in etichetto, and I will get into these shortly. However, before doing that, on a platform level, we have a good performance in the growth-focused platforms, Etiquetto, Corroventa and Communication. We see in Etiquetto and Corroventa a significant growth, both in sales and EBITDA, and that is both by acquisitions that we've done to these two platforms, but also an organic growth profile. In Communication, we showed a stable organic growth in both sales and EBITDA. St. Eriks and Turnum both declined in sales, but the focus that we've had on profitability is now slowly starting to show. We can see that we have slowed down the negative profit trend from previous quarters. Cash conversion remains strong and was strong in the quarter, and it's now amounting to 93% on a rolling 12-month basis. So then I promised a few words about the synergy related restructuring costs in Etiquetto. To start with, in Etiketto, we have industry-leading margins. And the margins of its add-ons acquisitions are then lower than the overall margins, which means that we get a dilution effect. And we create value by improving the margins in the companies that we acquire. And we do that by synergies, operational improvements, and what we call the Etiketto way of working. So that means Etiketto's proven working methods. One way of creating synergies and improvement of operational efficiency is by co-locating existing production units. We have had two such examples this quarter. The first one is Nikkei Teketten. It's a Swedish company which we acquired in the beginning of this quarter, which has now been moved into our existing production units in Sweden. Secondly, and that's a larger part of the restructuring costs, are in Germany where we got one additional production unit in the beginning of this year and that was through the acquisition of Intercat and that is now co-located with the already existing production unit that we have in Germany through the acquisition of Clever which was done last year. So these type of measures, of course, increases operational efficiency. They save cost and that's one way for us of improving the margins. In this case, we will start to see effects from this measure in the beginning of 2027. In addition, we have items affecting comparability for the third quarter related to transaction costs of 8 million SEK. So all in all, we have quite significant items affecting the comparability in this quarter. But what is very important is that these are part of our, you know, in order for us to be able to make the acquisitions. And then even more importantly, the value creating process of integrating acquired companies. So with that, I leave the word to Charlotta.

Thank you, Andreas. And as we talk about the EBITDA development in the quarter, as we mentioned in Q2, we are of course not happy with this negative trend that we're seeing. But when we unpack the EBITDA in this quarter, the reported EBITDA was 58 million and EBITDA before items affecting comparatability, 87 million. And as Andrea said, that is a strengthened underlying EBITDA margin. And to dive into the debt platforms, we see that in Etiquetto, the EBITDA increased to 64 million. And as expected, and as very clear with Etiquette, we see that the margin decreased because that is a reflection of the lower margins in the Etiquette group. Communications, the EBITDA increased with 6% and the margins are in line with last year's. In Coroventa, we see an increase with 68% in EBITDA and the margins are up about 3 percentage points. That is mainly supported by Tromex's higher profitability that we see in this quarter. For St. Eric's Group, we see that despite lower net sales, it maintains its EBITDA margin for the quarter as the same level as in the quarter of previous year. And EBITDA in turn decreased, but we see that the impact of the lower sales were counteracted by the cost efficiency and the operational improvement that has been done. We also continue to see a strong cash flow in the quarter. The cash conversion remains strong, amounting to 93% over a rolling 12-month basis, and with a seasonally strong cash flow towards the end of the year, we expect leverage to decrease over the coming quarters. We're satisfied with the pace of acquisition, but we will of course continue to balance acquisition activity against our leverage. And following this year's acquisition, the net debt to adjusted EBITDA is now at a 3.1 ratio, and that is slightly above our target range. But it's important to remember that the consistent cash generation across all the platforms is what has allowed us to maintain our acquisition pace. If we should sum up, how are we then delivering on our financial targets? Well, the growth in EBITDA per ordinary share is minus 31%. And as I said, we now see that the underlying growth in EBITDA is improving in the quarter. We have a ROE of 13% that is very closely tied to the EBITDA growth. And we see that when that changes. We will also see the improvement in the ROE. And as we said, the net debt to adjusted EBITDA is 3.1%. And this we see as okay and a deliberate result of our M&A strategy. It's important to note that our approach to capital allocation remains unchanged. Focus on discipline in the acquisition and securing strong cash flows.