The clear strategy accelerates growth
Relais Group is a leading Nordic consolidator with a sector focus on the vehicle aftermarket. Our strategy is very clear. We create long-term shareholder value by delivering strong earnings growth through the combination of acquisitions and faster than market average organic growth supported by synergies.
The mobility landscape is changing rapidly. We have a thorough knowledge of the vehicle and mobility aftermarket and the underlying mid- and long-term trends affecting the market. Our deep sector knowledge and network gives us an advantage in identifying acquisition targets with a good strategic fit to us, as well as in capturing the synergies created by the acquisitions we carry out.
During the year 2021 we have continued the systematic execution of our clear strategy and managed to achieve significant and profitable growth in our different operating units.
The Nordic vehicle aftermarket developed positively also during the fourth quarter of the year. Despite the omicron-variant based re-acceleration of the Covid-19 Pandemic during the end of the year, the markets remained relatively stable in all our operating countries. According to our own estimates we were able to grow even faster than the market in average.
The organic growth was particularly strong for the Group’s own vehicle lighting brands. Several successful product launches, the increased market share in Sweden supported by cross-sales through local Group Companies, and the strong growth in export markets were the main contributors in this development. The export of Strands-branded products to e.g., Germany and Canada has grown strongly during the entire year. The demand for spare parts was solid all through the year.
Acquisitions play a key role in our strategy. We continue to analyze the target markets and to make contacts with a larger number of potential acquisition targets with a good strategic fit in the Nordic countries. During the year our pipeline has already been complemented with several potential target companies.
We have carried out five successful acquisitions during the year 2021 (Strands Group AB, Raskone Oy, Lumise Oy, STS Sydhamnens Trailer Service AB and Trucknik AB). In line with our strategy, these acquisitions have further strengthened our own-branded lighting products business as well as expanding our footprint in the Nordic commercial vehicle repair, maintenance, and spare parts businesses. In addition, by Lumise becoming a member in the Relais-family, we have gained valuable competence in developing our digital and e-commerce business areas.
Apart from the disruptions in the global logistics and supply chains, the Covid-19 pandemic has not had a significant effect as such in our operating markets. Especially the commercial vehicles sector has picked up as the overall economic activity has increased. However, the delays in the deliveries of new vehicles have to some extent had an effect on the demand of vehicle equipment products, and the still continuing lower than normal level of bus traffic has decreased the demand of related spare parts. On the other hand, the growth of e-commerce has increased the need for different type of last-mile home deliveries. Overall, this has led to growth in the usage of light commercial vehicles and increased the demand for related services and spare parts.
As the Pandemic still continues, the health and safety of our employees and business partners is of paramount importance to us. Even though some restrictions have already been lifted locally, we continued to carefully follow the different recommendations of the authorities in our operating countries. Fortunately, we have so far had no serious Covid-19 incidents reported among our personnel, and we will continue striving to guarantee everyone’s safety in the best possible manner also in the future.
For us, sustainability means above all practical and meaningful everyday actions. We take good care of our employees, customers, and business partners and the environment. We have set clear ESG-related criteria to our global suppliers and several spare parts we sell are covered by a refund-and-recycling system, extending their life cycle after remanufacturing at the production site. We also take seriously the responsibility of our own business sector in reducing the global CO2-emissions. As the electrification of vehicles accelerates, we have purposefully increased our spare part offering for full electric and hybrid electric vehicles. This product range is growing steadily. In addition, we have increased the capability and preparedness of our Raskone and STS workshops to also serve and repair electrical commercial vehicles.
During the year 2022 we will map the carbon footprint caused by our different operations and we will set clear targets for reducing it. For example, already today our group company Startax Finland only uses electricity produced by fully renewable methods at its main facility of 16,000 m2 in Lempäälä, Finland.
Outlook for the year 2022
Relais Group is well positioned to continue the successful implementation of its strategy also during the year 2022. We have increased the inventory levels of critical product groups, so that our ability to serve our customers would stay on a high level even if the global supply disruptions should continue.
We will continue our M&A activities with the aim of finding companies having a good strategic fit to our Group and a sufficient value creation potential to our shareholders. As announced earlier this week, we are aiming to transfer to the Nasdaq Helsinki main list, with a timeline of doing this at the earliest during the second half of 2022. We believe the main list transition will have a positive effect in our ability to carry out more acquisitions and to support the financing needed for them.
Relais Group is not giving a numeric guidance for the year 2022. Owing to our strategy, a significant part of the growth and development of our business operations is based on the execution of corporate acquisitions. An accurate and up-front estimation of the timing and economical effect of acquisitions is virtually impossible to do. In addition to this, the still ongoing disruptions in the global logistics and supply chains, the weakened geopolitical situation, the increase of material, energy and delivery costs and the possible supply delays in different product groups caused by the global lack of semiconductors make it difficult to give accurate estimates.
As announced earlier, our long-term strategic target is to reach a turnover of 500 MEUR by the end of the year 2026.
Finally, I want to extend my warmest thanks to all of our almost 1,000 professionals, who do their very best every day to serve our customers even better. In addition, I want to thank all of our customers, business partners and shareholders for the trust you are placing in us. We strive to be worth that trust also during the coming years.
Chief Executive Officer