Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Volati AB (FRA:VOG, Financial) achieved a strong organic growth of 15% in one of its platforms, with improved margins reaching 21% over the last 12 months.
- The SOIC group delivered a strong quarter with acquisition-driven growth of 5% and maintained margins in line with the previous year.
- The company has a solid cash conversion rate of 94% over the last 12 months, providing a strong foundation for future acquisitions.
- Volati AB (FRA:VOG) has grown its turnover by an average of 18% per year since 2018, demonstrating consistent long-term growth.
- The company has completed 24 acquisitions since 2020, showcasing its effective model for growth through acquisitions.
Negative Points
- Four out of six platforms were affected by a challenging market environment, impacting overall performance.
- The industry segment experienced a tough quarter with a significant drop in EBITA, primarily due to challenges in the agricultural and construction markets.
- The company's growth has been below its financial target of at least 15% since 2021, largely due to market-driven factors.
- Volati AB (FRA:VOG) does not expect rapid changes in the market environment in the short term, indicating continued challenges ahead.
- The company's return on adjusted equity came in at 15%, below its financial target, driven by lower growth during the year.
Q & A Highlights
Q: You mentioned that a market turnaround is getting closer. Could you elaborate on this?
A: As Martin pointed out, one of the main markets that has affected us negatively the last couple of years is the construction market. External sources indicate that we will see slight growth in 2025, suggesting a shift from negative to positive growth over the next 18 months.
Q: Looking at the margins here and that cap, obviously very impressive. Is this sustainable?
A: We've been clear that this is the level we aimed to return to. Our mature operations in capital, including recent acquisitions, can operate at this level. However, new acquisitions may dilute margins short-term, but our goal is to enhance them over time.
Q: For Tornum, is it just a weak market or are there timing effects that will make Q4 stronger?
A: It's a weak market across Europe, but we have a decent order book. In Spain, we couldn't deliver all orders in Q3, which we aim to fulfill in Q4. However, no dramatic market shift is expected short-term.
Q: Do you see Q4 and Q1 being good for Corroventa due to recent flooding in Europe?
A: It's hard to predict as these situations arise suddenly. Last year, UK floods helped us, but it's impossible to foresee similar events. We see good activity now, but long-term impacts depend on new occurrences.
Q: Can you provide more information on the new projects for Tornum Group with L and how it will affect the platform?
A: It's one of the largest projects in Sweden in years, showing our group's strength. While small deliveries occurred this year, the main impact will be in 2025 and 2026, positioning us as strong competitors to larger international players.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
