Welcome to the Nimbus Audiocast with Teleconference Q2 2021. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present CEO Jan-Erik Lindström and CFO Rasmus Alvemyr. Please begin your meeting.
Okay. A warm welcome to this event. I don't actually see what you see, so hopefully you see one of our lovely Coupés, the 365 Coupé on the page one, and I then suggest that we flip the page to page three. We start with some highlights then of the second quarter of 2021. We had a tick of the net sales increase by roughly 36%, so we reached SEK 656 million. The sales was done to a large extent by our own dealers, so we had 61% versus 41% earlier. The EBITDA amounted to SEK 113 million, and the margin was up to 17.3% on the last 12 months. After all these deliveries, during the quarter two, quarter two is our best quarter normally. We still then have order backlog of SEK 731 million compared to SEK 854 million the first quarter.
Please keep in mind then that we do a lot of deliveries during the quarter two. This is actually a very strong order book, but we will come back to that. The capacity restrictions are obvious, of course, we have done some initiatives during the spring and also during the summer. Actually it's planning for and also have done some investments in our production units, both in Sweden, Finland, and Poland. Good news then, of course, in May, we bought the Swedish dealer network, Marine Store. If we flip the page to page four, which we are very happy for. They are located in a very interesting boating district, and it's actually in that way that we had no representation before in this district, so we are very happy for that.
They are located around Stockholm, so it's the Swedish east coast we are talking about. Of course then a lot of boating, as it is in the Stockholm area in general then. 21 employees, they had a net sales 2020 of roughly SEK 330 million. They are well reputed and actually then also the largest dealer in Sweden. One good thing then for us, of course, is that today they don't have any Nimbus sales at all, none of the Nimbus Group brands. Of course, we are planning then to add to the present brands, to add our brands in the future then, of course. That will of course have a good effort on the business.
The purchase price then was SEK 180 million, then of course, we had paid some additional money for the cash, but of course also it is on a net debt zero level that we are buying them. We had a net cash flow effect then of SEK 105 million during the quarter because of these acquisitions. They have already now added actually then SEK 91 million to our net sales, which is of course very good, it is about 20% of the sales in Sweden. Already mentioned then, it is a potential then of course in the margin improvement when we then add our own brands to the present brands that they sell. Preliminary goodwill is identified then to SEK 177 million. If we then flip the page, then we will look back a little bit. It is the page number seven, sorry, page number five.
This is then actually what we used in the IPO that we did in February this year. This is then why invest in Nimbus, and we call it here a reminder. One of the important thing is of course that we have a strong underlying market and we have then also several, as we say here, fundamental drivers, and I will actually then come back to that later on. We have our true house of brands with a strong and distinctive brand portfolio, and already here I mentioned that this is then of course for the dealer. We want to be an important part of the dealer's business. We are in attractive position in the value chain. We see a lot of opportunities. I will mention that also a little bit later. We have our asset light and flexible production.
It's about scaling up and scaling down in an efficient way. Experienced management team, definitely. Last but not least, excellent growth opportunities, including then the geographical expansion, and then we're talking mainly about North America for the moment. Also consolidation, both vertical and horizontal. It is like that we are working in a very fragmented industry. It's a lot of small boat builders, family-owned and that. There's a lot of opportunities for ourselves, but it's also like that the industry must have a consolidation sooner or later. If we flip the page to six, short about the Nimbus Group. We were founded in 1968, and we have a very long history of international trade.
It's actually more or less needed at that time that it started with this international trade. That was due, of course, to the fact that Volvo Penta was a part of this at the start. We have our well-known Scandinavian brands, all seven of them. It's actually like that a couple of them is also globally do they have a very high brand awareness. 2012, we were, you can say reconstructed by our new owner and still our major owner, R12. They are in this for long term. 2018, we can in a way say that we proved the fact that we are a house of brands. At that stage, we only had two brands. Then we acquired Alukin. Then in 2019, we acquired Bella Boats. Bella Boats then added four good brands to our portfolio.
In February, as I mentioned before, we were listed on the Nasdaq First North and again then the proof that we want something with this journey is that we then bought Marine Store in May this year. Back then a little bit to what you said from the beginning. I already said that we want to have this house of brands for the dealer's sake. It's important for us to be a big part of the dealer's business, and it's also like that to be able to be that, we need a couple of brands. We need to be present in a couple of segments that fits the current boating that the dealer has around the world, more or less, but in interesting boating districts.
In the middle, you have this, the share of the group new boat sales then, and this is an old picture because it's from 2020, but you can say in general, the portion is quite accurate. What you can see is that Alukin starts from a quite low level, but they're doing very well, so they're growing. Namely, if you can say that the portion is more or less the same. These fundamental drivers, this is then of course really interesting. We have had the technical development. An important dimension, I think, is that it's the boating industry itself that develops the products which mean that we're focusing on easy boating. It should be easy to do the boating and also in water handling and things like that, so you have a less stressful journey when you're out there.
This is good for the new boat sales because if you compare a boat that is a couple of years old, it's quite a huge difference today between the technical level on that one and the one that we actually produce today now. We also have an aging boat fleet. Usually, I say that if you look at Sweden, for example, 2020, 45% of the fleet was actually older than 20 years. This is of course, also something that needs to be updated. We have the increased popularity of staycation, and here I also want to point out that the pandemic has, of course, accelerated the trend, no doubt, but the staycation trend started well before the pandemic, and if you combine that with the fact, the last one there, overall wealth is increasing.
We are working a lot, but then we also want to have high quality in our spare time, and we are actually then also prepared to pay for it. If you combine these two things, this is of course good for the recreational industry, but also then of course for us, because we are part of that. That was the fundamental drivers then. If we then flip the page to number eight, a little bit about the production. On the left hand, you can see where we are present today. Actually the biggest one is the outsourced one that we have in Poland. 400 employees. We have increased quite a lot of people in our own factories. Of course, we have also increased on the outsourced units. In the middle, this is more or less the philosophy from our part.
We want to have a very high portion of the cost as variable cost. Actually, we are saying that at least 75% of our cost should be variable on six months' time. This is one very important thing for us, and it's about scaling up and scaling down. Production efficiency is important. We have done a couple of launches a couple of years back. For example, the Nimbus WTC series, where we worked a lot to have actually done one platform, one technical platform for a lot of different models. This is of course important, that it's not only the product, it's also the process that we need to work with. Flip the page, and then we have page number nine, our order book. As we say there, it's actually a record high for this time of the year.
As I said, it decreased, of course, from the last quarter. If we compare this quarter to 2021 with quarter to 2020, you can see that it's almost 3 times as high as it was there. Of course, we had some pandemic in the second quarter in 2020 that affected the order book, of course, but still, it's a good development, no doubt. I actually leave the word to Rasmus.
Yes. Thank you, Jan-Erik. I will just start mentioning that the prepayments, as you can see, it's 40%, and it's somewhat down compared to what we had in the last quarter, but that's because of that we have a very long-term order book where only the initial prepayment has been invoiced. That's logic. We also see that this will normalize going forward. If we flip to page 10, we see that the sales in the second quarter has increased by 36% to SEK 657 million compared to last year. The LTM sales amounts to SEK 1,255, which is an increase by 22% compared to full year 2020 and +16% compared with the last quarter's LTM figures. Regarding the demand, we see a growth in America and that the Nordics, including Sweden, develops well.
In the quarter, 60% of the sales comes from own dealers, compared to 40% last year. Here we see a positive effect from Marine Store, as mentioned before, with SEK 91 million. Also worth mentioning is that the second quarter is a strong quarter in Sweden, and because of the seasonality in that we have several own held dealers in Sweden, therefore the Swedish market is strong in the second quarter. It's the strongest quarter. If we flip page to number 11, please. EBITDA margin continues to improve and now amounts to 9.6% on an LTM basis compared to 7.8% in the last quarter. The increased margins comes from higher sales volumes that gives us scale advantages on mostly OpEx, but also somewhat increased gross margins. Worth mentioning is that Marine Store only has contributed with the dealer sales margins and no manufacturing margin at this stage.
In the quarter, the EBITDA results increased by 47% and now amounts to SEK 130 million compared to last year. Flip to page 12, please. Working capital. We see that we now have a negative net working capital as per the second quarter that amounts to -SEK 32 million. The reason for this is mainly due to stock levels, but also the acquisition of Marine Store where we acquired both cash and the trade payables. As per the second quarter, these trade payables were not yet fully paid. This will be normalized going forward. We can expect that net working capital will therefore rise a bit. Also when excluding Marine Store, we see that the net working capital is on a very low level compared with previous periods, which we are very satisfied with.
If we flip to page 13, this is to remind about our financial targets and to compare with our actual figures. First, the growth. We have said that we should have an organic growth of plus 10% over the business cycle, that includes acquisitions of dealers but not brands. Year to date, the organic growth is 37%. EBITDA margin, we have said that we should reach 10% on a medium term, and now the actual LTM figure is 9.6%. Regarding the capital structure, we have said that we should have no senior debts, which we don't now as per the second quarter.
We have also a dividend policy saying that we should pay out 30% of the result, taking into account financial position of the company and cash flow. This is not a financial target that we measure today, of course. This will be a year-end question. I hand over again to Jan-Erik and page number 14.
Okay. Thank you. As we say then, an exciting journey ahead. What we then will, we should not say focus on, but spend a lot of time on at least, is then, of course, to develop our current offering and organization. We will continue then to expand and densify the dealership network in Europe, then especially, I will mention the Aquador and Flipper brand, which is actually never been there. We will also then improve the aftermarket offering and presence. Of course, increase the presence in North America, I think I mentioned also the last time that North America actually is our second biggest market after the home market already now. That is, of course, good for us and gives us a lot of energy.
As we more or less improved with the acquisition of Marine Store then, that value acquisitions and again, then Marine Store forward integration. That is what we see in this journey. I leave the word to Gunilla.
Yes. Next page, the ownership, end of July, it's pretty stable from the spring and the IPO in February. There's some increases by number seven, OP Fonder, but more or less the same since earlier. With that, we open up for questions, and I just want to remind you that our Q3 report will be on November 23rd. Welcome for questions.
Thank you. If you would like to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will now be a brief pause while questions are being registered. The first question comes from Gustav Österberg from Carnegie. Please go ahead. Your line is open.
Thank you, operator, and good morning, Jan- Erik, Rasmus, and Gunilla, and congratulations on a great Q2 report. I have three questions. The first one is on sales mix here in Q2 2021. You were talking about the improved margins and mentioned about the gross margin as well as volume leverage on OpEx. Is there some mix as well in the quarter? Is there a higher share of larger boats in Q2 2021 compared to Q2 earlier years?
Well, actually, we don't really see a such difference because the market is strong on both smaller boats and larger boats in the second quarter. In terms of mix, I would say that it is a fairly stable mix compared to a full year picture.
All right. Thank you very much. Most of that improvement in the margin is driven by the production side, essentially?
Yes, that's correct.
Perfect. Secondly, on the order book, and the reported sales in Q2, are all sales that is reported in Q2 from the order book, or are there some part of that sales that is not taken from the order book?
I would say that almost all the sales comes from the order book, but of course, there might be some smaller boats at dealers that can have been sold there directly over desk, so to say.
That's their own unit.
Yeah.
Then, of course, it's off the market sales, that you don't know, and you don't have in your order books, so to say, when the season starts. The major part is, of course, boats in this quarter.
All right. Thank you very much. Final question on North America. Could you please give us a bit more color on what's driving that sales increase? Is it more or new dealerships being opened, or is it increases in volumes on existing dealerships? If you could give some more color on how COVID-19 is impacting that expansion and plans going forward. Are we seeing an easing restrictions, et cetera?
To begin, we've seen clearly that the current dealers is adding orders, so obviously that they are selling good. We have added two dealers, but as we say in the report, it sounds maybe a little bit strange, but we have two dealers that want to sell our product, but we cannot start with them because we don't have enough available boats, so then we'll get this false start, as I'm talking about. We have to do it in balance with the production capacity. We have started two during this quarter, so we added two, and then, of course, they have ordered some boats. Mainly, it's because of the fact that they are selling more boats and opening more boats at the present one. The COVID-19, similar picture, I should say, as we see.
Of course, it's hard to predict anything, let's call it the vacation trend. It's the same more or less in U.S., that they spend their money on things they can do close to the home, so to say, and that includes boating, of course. If we see North America compared to Europe would have a complete lockdown. They haven't had that really in the U.S. Some states, they have had it, but we were not affected in that way because it was not the typical boating state. It's a similar picture as we have in Europe. I hope that answers your question.
That's perfect. All right. There were three questions from me. Thank you very much.
Thank you.
Thank you.
Thank you. The next question comes from Victor Hansen from Nordea.
Hello, Jan-Erik, Rasmus, and Gunilla. Victor Hansen from Nordea here. I'll start off with if you could provide a comment on what component issues you are seeing, perhaps if you had any trouble in the supply chain or in terms of higher input costs and if you've raised any prices. Thanks.
We start with the last one, we increased the prices. We have never done that before, but we actually did that just before the summer, depending on what model, of course, but you can say in general 4%-5%. We saw at that stage that we had the increases in some aspects then. We look at the picture in general, we don't see anything specific. It's more or less this general picture that you have to plan your production well ahead, and we are quite used to that. I think we differ a little bit from, let's say, the smaller ones than the small boat builder, but that we had very long perspective for our production planning. What we have seen is, of course, some delays, but it hasn't really affected the end customer because we have this well at launch.
We also have worked to a greater extent with the inventory where we have secured more of things that we see that we don't have this perfect situation, you can say, with just in time delivery. It's more that you have to keep some things in stock. Nothing specific, no. Of course, the engine makers, they have had their problems, same there. We would have seen in the conductors then, same there. If you plan well ahead, you can cope with the present situation.
That's promising, and thank you for that.
It's a lot of work.
Yeah. I can imagine. A follow-up on your North American expansion. If you could help us with what are your delivery times now in the NA, and how does it differ compared to the Nordic and the European market?
You're meaning our delivery time to North America or in North America, so to say, from dealer to end customer or?
Yeah. From when you get the order to when you deliver the boat.
Okay.
Production deliver. Yeah.
That's a good question. First, to start with maybe we can mention that it is a bit different depending on models, of course, demand on different models. Some of the models we sell in U.S., which are popular there, today has a longer delivery time than what we see on some other models. That's one thing to consider. I should say we haven't checked the facts behind it, but it really doesn't differ between North America and Europe. Again, you have to plan your business and the dealers in U.S., they work slightly different from the Europeans because in Europe, the dealer typically has an order from the end customer, and then he orders the boat. In U.S., they like to have a stock. They are more adding batches when they're putting their order to us. The delivery timing is more or less the same.
Again, exactly as Rasmus said, it's depending on which model, of course. If you buy some of the more popular ones today, of course, the delivery time will be somewhere around the summer of next year.
That's helpful.
Yeah.
A few more questions. When will you have had the time to integrate and start selling your own brands for Marine Store?
To begin with, we want to add our brands because we certainly not sell all the brands in the Marine Store because they have their typical boating. We have a couple of brands that we think that will fit perfectly, and we will start that during 2022. Again, the capacity, we will not have a full house during 2022. It will more likely be 2023 then. We will start and marketing and also then sell a couple of our brands in the Marine Store during next year. It's important to understand that we will continue to sell brands that we sell today at the Marine Store also. We will add, as Jan-Erik mentioned, more brands to Marine Store.
Mm-hmm. If you could tell us how much Marine Store benefited your EBITDA in Q2? I only saw sales in your report.
We have not communicated that figure actually in the report. What we have only communicated is the sales figure.
Perhaps you could tell us the seasonal variation in terms of sales and how the margin varies by season.
The margin over a seasonality perspective, if you're talking about the gross margin, we say it's fairly stable on the 12-month period. What difference is, of course, the volumes when the dealers deliver many boats because of the seasonality. In that term, of course, the EBITDA margin is affected since we now deliver more boats in the second quarter. I'm not sure if that was the answer to your question.
Yeah. A quick follow-up. You also get some scalability on OpEx in Marine Store?
Absolutely.
I'm still talking.
Absolutely. Yes, for sure. This effect is the same as we have at our other dealers. It will be the same because the revenue comes from the open season from, let's say, April to August or so, which is the normal period in Sweden. What affects the margin a little bit is that a typical dealer in Sweden, for example, or in the Nordic countries, they are selling used boats to a great extent at the end of their season, July, August compared with new boats, because new boats are delivered a little bit earlier. Still, that's the normal picture. The year we have today is that we produce boats today that we actually deliver to end customers, both in Sweden and in other countries. That is not normal, so to speak.
Okay. Yeah. Thank you very much. A final question, and this is just to clarify. You talked about your expansion plans in terms of production. Do you pay any CapEx to increase the production volumes within your outsourced production, such as in Poland? That would be very helpful.
No, we don't.
Okay. That's great. That's all from me. Thank you.
Thank you. Just a reminder that if you would like to ask any final questions, please press zero one on your telephone keypad. We have no further questions. I will pass back for any closing comments.
Let Jan-Erik say thank you for today.
Yes. Thank you. Thank you all.
Welcome back in the third quarter.
Yes.
Okay. Bye bye.
Bye bye. Thank you.
Bye.