CEO Arni Ekholm comments the first quarter of 2025
Ready for the Next Level
“Despite the exceptionally strong comparison quarter, boosted by the extremely cold weather in 2024 we managed to reach the same net sales level as last year. The gross profit rose simultaneously mainly due to the growing influence of the repair and maintenance business in the Group’s total sales. The comparable EBITA declined with 5% from the last year’s record high level, which was expected due to the negative effect that the warm winter had on the sales of certain product groups in the highly profitable technical wholesale business area.
Geographical Segment Overview
The Scandinavian markets were less affected by the warm winter conditions than the Finnish and Baltic markets. The Scandinavian segment reached a net sales growth of 5% (organic: +1%), whilst Finland and Baltics faced a sales decline of -6% (organic: -11%). On a group level the net sales were in line with last year’s first quarter (organic: -4%), supported by the effect of the acquisitions made towards the end of last year.
Business Area Overview
In the Technical Wholesale and Products Business Area the sales of our Scandinavian units were generally in line with last year, with only a minor decline in the sales of spare parts for heavy commercial vehicles in Sweden. This was offset by the strong performance of our Norwegian workshop equipment business. The Finnish and Baltic units were negatively affected by the warm winter when compared to the extremely cold first quarter of 2024. Our Finnish and Baltic wholesale companies have a higher share of product groups, e.g. batteries, starters and alternators and certain electrical components and equipment, where the demand is correlated with extreme temperatures, both low and high. In the Lighting product group Strands continued their strong performance, driven by export sales. Our online business in Finland had also a positive start to the year.
The Commercial Vehicle Repair and Maintenance Business Area had a strong start of the year reaching a sales growth of 12% (organic: -1%). The acquisitions of M Ahlqvist in Finland and Team Verkstad in Sweden made a strong contribution to the Group’s total sales in this business area. Both companies have fully met the expectations which we had when we acquired them, and there is still good synergy potential left for both in the future.
Acquisitions
As a competence-based compounder, we are working very hard to ensure we constantly have a strong pipeline of
promising companies to acquire. During Quarter One we continued our efforts and were extremely happy to be able to announce two major deals in April. The acquisition of Matro Group in Belgium, announced on 7 April, considerably expands our footprint in the European truck accessories market. The transformative acquisition of Team Verksted and Lastvagnsdelar in Norway, announced on 29 April, makes us the biggest operator of independent commercial vehicle workshop chains in the Nordic Region. Both acquisitions are expected to be closed during the second quarter. I am more than glad to warmly welcome the professional teams of Matro, Team Verksted and Lastvagnsdelar to join the Relais family. Combined with these new family members the Relais Group will have over 1,600 professionals in nine countries and have a turnover of over EUR 400 million.
Financing
On 28 March, we announced the signing of a EUR 140 million long-term financing agreement with our main bank. The new financing agreement has a maturity of three years, with two one-year extension options, and it consists of a EUR 110 million multi-currency term loan, a revolving credit facility of EUR 10 million, and an uncommitted term loan facility of EUR 20 million. The new facilities will be used for refinancing the existing debt, financing of acquisitions as well as for general corporate purposes. We feel that with the strong support of our main bank, including the additional bridge loan granted to finance the Team Verksted deal, we are well positioned to continue the implementation of our growth strategy.
Changes in the Management Team
We also made some changes in the Management Team during the first quarter. On 18 March, we announced that we had decided to assign specific responsibility areas to certain Management Team members. With the introduction of these new responsibility areas, we aim to speed up the decision-making process and the implementation of the Group’s strategy and M&A activities across both of Relais Group’s geographical segments. Johan Carlos, Managing Director of Strands Group, is now in addition to his current tasks responsible for the development of our Products business, including the strategic brand development across all business areas. Juan Garcia, Regional Managing Director of Scandinavia, is now in addition to his current tasks be responsible for the development of our Technical Wholesale business area. And Jan Popov, the Managing Director of Raskone, is now in addition to his current tasks responsible for the development of our Commercial Vehicle Repair and Maintenance business area. I am confident that with these changes we have a great potential to further support and accelerate the profitable growth of Relais Group.
Sustainability and Good Governance
In March, we published our Sustainability Report prepared in accordance with the European Sustainability Reporting Standards (ESRS) and the Finnish Accounting Act as part of the Report of the Board of Directors. During the first quarter, we continued our planned development measures related to sustainability. Our ongoing efforts included, among other things, the roadmap work for emission reduction targets and measures and a resilience analysis. We expect to complete the roadmap during the first half of the year.
Outlook for 2025
Our long-term target is to reach a comparable proforma EBITA run rate of EUR 50 million by the end of 2025. This target includes the full year effect of acquisitions made this year. Upon closing the announced Matro and Team Verksted/ Lastvagnsdelar deals, we will add approximately EUR 9 million more to Relais’ EBITA on an annual basis. As a result of this, Relais becomes a group of companies employing over 1,600 professionals in nine countries, having around EUR 400 million net sales annually. And we are not stopping there. We are constantly working on various interesting acquisition cases and aim to produce even more deals. In addition, our super professional teams are working very hard to boost our organic growth and to realize the untapped synergy potential that we have identified within the Group. We are ready for the next level.Finally, I want to express my sincerest thanks to all our almost 1,300 professionals for your passion and dedication during the first quarter of this year.”
Arni Ekholm
Chief Executive Officer