Growth through disciplined execution of the strategy
The strategy of Relais Group is based on a well-balanced combination of growth through targeted acquisitions and achieving a faster than market average organic growth, supported by the synergies between the existing and acquired companies. During the first half of the year 2021, we have meticulously continued the execution of our chosen strategy and managed to achieve significant and profitable growth in all our operating units.
Accelerated acquisition activities
During the first half of 2021, we managed to perform three highly successful and targeted acquisitions. In January, we concluded the acquisition of Europe’s fastest growing vehicle lighting company Strands Group. In February, we acquired Raskone Oy, the biggest independent commercial vehicle repair shop chain in the Nordics. In March, we welcomed Lumise Oy, the innovative vehicle lighting on-line operator as a new member in the growing Relais family.
As announced in May, we intend to further accelerate the acquisition activities in our field of operation. Additionally, we have announced that we will slightly broaden our acquisition scope to also include a limited number of other mobility sub-segments.
In June, we also announced the appointment of Lennart Sjöblom as Head of Acquisitions and Business Development. We have a solid pipeline of relevant target companies in the Nordic markets, and I am convinced that the recruitment of a dedicated resource in this area will further strengthen our ability to carry out successful acquisitions during 2021 and beyond.
Synergy benefits supporting our growth
Utilizing synergy benefits between the existing and newly acquired Group companies is at the heart of our strategy and has become a permanent part of our corporate DNA. Having a clear sector focus and in-depth knowledge within the vehicle aftermarket gives us a unique opportunity to further utilize synergy benefits that support the growth of our company.
Even though our operating model is decentralized, the management teams of our different Group companies co-operate very effectively, and proactively continue to seek new synergy benefits in the daily operations. The synergy effects are often significant, especially in the case of combing the Group purchasing power to get better prices and conditions from the suppliers. The synergies can also include other type of benefits, such as creating a common Product Information Management platform or carrying out other joint Functional Excellence projects between Group companies. As an example, we have successfully combined the management and back-office functions of TD Tunga Delar and Huzells, effectively creating one of the strongest independent commercial vehicle aftermarket wholesale operators in Sweden. In Finland, Startax now takes care of the purchase and supply of a growing number of spare parts to Raskone, utilizing the joint purchase power of the entire Group.
Nordic vehicle aftermarket remained stable despite the ongoing COVID-19 pandemic during H1. According to our own estimate, we managed to grow faster than the market in average during the first half of the year. The exceptionally cold weather during Q1 boosted the sales of specifically electrical spare parts and accessories. In practice, all of our Group companies performed strongly. Especially worth mentioning is the strong growth of Strands and the excellent performance of AB Reservdelar, managing to grow despite a move to a new location in Sollentuna near Stockholm in May.
Relais aims to be in the forefront of the digital revolution in the aftermarket. We actively seek new ways to help our customers to find the products they need easier and faster. Creating an excellent customer experience needs to be in the center of our operations, be it a consumer looking for the perfect auxiliary light for their vehicle, or a professional buyer looking for a comprehensive range of spare parts and equipment for a commercial fleet.
The acquisition of Lumise in March has given us valuable insight into running a highly successful on-line operation and increased our capabilities in e-commerce. We intend to utilize this clear competitive advantage especially in the global roll-out of our vehicle lighting business during the coming years.
Further growth in Lighting and Commercial Vehicles
By the acquisition of Strands, Lumise and Raskone during H1 we have further strengthened our ability to grow in the strategically important business areas of Lighting and Commercial Vehicles. Strands is an extremely strong and fast-growing vehicle lighting brand with a proven track record of successful export operations, innovatively utilizing social media in marketing. Lumise is strong in creating an unparalleled on-line shopper experience. Raskone has developed into a profitable, well-functioning and trusted commercial vehicle workshop chain in Finland, creating us a platform for a further expansion in this area.
For us, sustainability means first and foremost practical deeds and actions in the daily life. We take good care of our employees, customers, and business partners. We have set clear ESG-related criteria to our global suppliers and an increasing part of the spare parts that we sell is covered by a refund system. The used spare parts are returned to us in order to reach a new life after refurbishing or remanufacturing at the production site. Also, our own digital catalogue tools contribute to sustainability. The easier it is for our customers to choose the exactly right product, the less there is need for unnecessary returns causing CO2 emissions.
Outlook 2021 and long-term perspective
Relais is well positioned to continue the execution of the chosen strategy. We have ramped up the inventory levels of several new lighting products to be ready for the upcoming autumn season, as well as increased the inventory levels of certain other critical products. The underlying market demand looks robust in all Nordic countries. Nevertheless, there is a considerable amount of uncertainty deriving from the global lack of semi-conductors and we cannot rule out the effect of possible supply problems, especially during Q4. In light of this and considering the still ongoing COVID-19 pandemic, Relais is not giving a numeric guidance for the year 2021.
Looking at the longer perspective, we recently announced our new financial targets for the strategy period extending to 2026. As our previous turnover target of ca. 240 MEUR will be reached considerably earlier than planned, we decided to set a new strategic target of reaching a turnover of 500 MEUR by 2026. In addition, we announced our intention to examine the possibility of transferring to the Nasdaq Helsinki main list at the earliest during 2022 in order to support the realization of our growth strategy.
Finally, profitable and strong growth does not happen automatically. It is the result of the hard work and efforts that our teams are putting in every day, and the excellent cooperation we have with our customers, suppliers, business partners and shareholders. In this connection I want to thank you all very warmly for placing your trust in us. We will do our very best to earn that trust also in the future. Relais is a growth company, and we intend to continue the uncompromised execution of our strategy during 2021 and beyond.
Chief Executive Officer