CEO Arni Ekholm comments financial year 2023
During 2023 Relais Group has further strengthened its position as one of the biggest and most profitable growth platforms in the North European vehicle aftermarket. We achieved the highest turnover and EBITA in the history of our Group. Our financial position is solid, and I am pleased that the Board has proposed to raise the dividend to EUR 0.44 per share.
Fourth quarter: Fourth consecutive quarter of double digit EBITA growth
The last quarter of the year marked our fourth consecutive quarter of double-digit (cumulatively +25%) EBITA growth during 2023. Despite the challenging market conditions our net sales increased in total by 10% with comparable exchange rates and 1% organically. The wholesale market was positive in Sweden, whereas the market conditions in Finland were less favorable. The performance of our Commercial vehicle repair and maintenance business continued to be robust and we strengthened our market position in that sector both in Sweden and Finland.
The sales of vehicle spare parts developed very positively during the quarter (+16% in total and +12% organically with comparable exchange rates). The increase was strong especially in Sweden. The equipment sales were affected positively by the acquired workshop equipment businesses, AutoMateriell and Nordic Lift in Norway.
The consumer demand for discretionary products remained very weak in Finland during the quarter which had a negative effect on the sales of our vehicle lighting products. This was especially visible in the on-line channels. The sales of lighting products decreased with 8% in the quarter in comparable exchange rates.
Year 2023: Highest turnover and EBITA in the history of the Group
We create value for the shareholders with a strategy combining three elements which reinforce each other: organic growth, acquisitions, and operational excellence. Our “buy and build” strategy has proven its resilience, and the defensive nature of the growing vehicle aftermarket lays a solid foundation also for future growth.
During the year 2023 we have successfully carried out our strategy in all three areas. Our net sales grew in total by 13% and organically by 5% with constant exchange rates. The growth was especially strong in Sweden, whilst the development in Finland was flat due to local market conditions.
We acquired a total of four companies during last year. The acquisition of Adita in Finland in the first quarter strengthened our wholesale presence in the important Helsinki region. The acquisition of AutoMateriell and Nordic Lift in the third quarter increased our presence in Norway. We now have a strong market position in the Norwegian workshop equipment business with interesting add-on acquisition possibilities. The acquisition of Jyväskylä Truck Center (JTC) in the third quarter increased the customer base of Raskone in the logistically important Jyväskylä region in Finland.
We also started and carried out several initiatives to improve our operational efficiency. We enhanced our pricing policies and procedures in our wholesale operations in Finland and Sweden to defend and improve our gross profit. We managed to improve the capacity utilization of both our commercial vehicle workshop chains, Raskone and STS by implementing determined and disciplined efficiency measures and by investing in our personnel. This combined with the increasing amount of gained fleet customers contributed to a major profit increase in the repair and maintenance business area.
Solid financial position
Our cash conversion ratio has remained on a healthy level also during the past year which contributes to the solid financial position of our Group. I am pleased to announce that the Board has proposed a raised dividend of EUR 0.44 (0.40€) per share to be paid in two equal instalments in April and in November.
The outlook for 2024 is largely dependent on external, macroeconomic and market demand factors. Inflation is still on a relatively high level, the dramatically risen financial expenses for corporates and households are still affecting the purchase power of customers and consumers negatively. Unemployment and layoffs are also increasing in Finland and Sweden. In addition, the weakened Swedish krona against the euro sets pressure on our reported results, as a major part of our business is conducted in the Swedish marketplace. On the other hand, the vehicle aftermarket is defensive by nature and compared to many other businesses it is a sector with less cyclicality. The inventory and resource situation is good, allowing us to meet the customer demand for our products and services. We feel that we are well positioned to continue our growth path in a profitable and sustainable way also during 2024.
I would like to express my warmest thanks to all our over 1,000 professionals, customers, business partners and shareholders for the year 2023.
Arni Ekholm
Chief Executive Officer