In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Volati AB (FRA:VOG) reported an 11% increase in sales growth for Q4 2024, with a return to organic sales growth of 3% across all business areas.
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Earnings per share increased by 30% in the quarter, indicating strong profitability.
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The company achieved a cash conversion rate in excess of 100% for the second consecutive year, supporting continued acquisitions.
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Volati AB (FRA:VOG) completed two significant acquisitions, adding approximately 700 million in yearly revenue.
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The company has maintained a strong acquisition pace, completing 15 acquisitions totaling 2.2 billion in annual sales over the past three years.
Negative Points
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The Tulum Group within the business area industry faced challenges due to tough market conditions and low-margin projects, impacting overall results.
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Return on adjusted equity was 16%, below the financial target of 20%, driven by lower EBITDA growth.
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The business area industry experienced a decline in EBITDA margin to 7% from 10% in Q4 last year, with specific challenges in the agricultural segment.
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Despite acquisitions, Volati AB (FRA:VOG) has not achieved its 15% annual growth target over the past three years, creating a growth gap.
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The construction segment within the SantiRX platform continues to face a challenging market environment, affecting performance.
Q & A Highlights
Q: Can you provide details on the expected size and profitability of the Tulum projects for 2025 and 2026, and whether these have started impacting Q1 numbers? Also, will low-margin Spanish projects continue to affect Q1? A: We haven't disclosed specific volumes or models for the Tulum projects. Deliveries began in 2024, with the main deliveries occurring in the current fiscal year, ending in 2026. The agricultural sector, particularly farmers, remains hesitant, affecting volumes. The Spanish project issues were addressed in Q4, so no further impact is expected in Q1.
Q: Are there any increased capital expenditure needs for Tulum to deliver on the Landman project or for the acquisitions of Clever Etiketon or Timberman? A: Investments in machinery for Tulum have already been made or are coming online. Future investments will not significantly impact overall CapEx. The demand increase is quickly filling up these machines, ensuring a quick payoff. No significant CapEx is planned for the Landman project.
Q: Could you elaborate on the drivers behind the 16% organic growth in the Etiquette Group? A: The growth is driven by a general market recovery and strong demand in the labeling industry, particularly in the white nicotine snuff segment, which is experiencing rapid growth.