Good morning, and welcome to today's presentation with Volati. With us presenting today, we have the CEO, Andreas Stenbäck, and CFO, Martin Aronsson. We'll do a Q&A after the presentation. You can either type in your question using the form that's located to the right, or if you're calling in to ask a question, please press star nine to raise your hand and then star six to unmute. And with that said, I'll give the floor to you guys. Please go ahead with your presentation.
Thank you very much, and thank you for listening in to this quarterly presentation. Let's go directly into it. And just to start with the Q3 in brief, this is another quarter in line with last year, which of course leaves me with a feeling that I want more. But I also feel that we are doing a very good job in our platforms, giving the circumstances that we're operating under. We saw challenging market environments affecting four of our six platforms. But a very positive exception is that the Ettiketto Group, where we saw a strong organic growth with 15% the quarter, and improved margins up to 21% last twelve months.
That means now that Ettiketto Group has come from basically reached the same margins as before we started our acquisition journey with that platform, meaning that we have gone from an EBITDA of SEK 50 million in 2019 to almost SEK 190 million the last twelve months. At our second business area, Salix Group, they deliver yet another strong quarter given the circumstances. They are still operating in a declining market. However, they showed an acquisition-driven growth of 5% and margins in line with last year. That means that for the second quarter now in a row, they have shown a stronger or improved EBITDA compared to last year. In Industry, we have seen a mixed development.
Corroventa had a strong quarter, and Communication showed growth from a very low level in a yet slow market, and then we have S:t Eriks. They are experiencing challenges in construction market while the infrastructure segment is holding up well, so in Q3 we still met relatively strong comparables from last year, which we will ease up the coming quarters, and then our final platform, just briefly give my words on Tornum, they had a very tough quarter. This is a platform that can show quite some variations over time, and currently we're affected by the slowest market in Europe for farmers in many years.
And this, in communication with slower than anticipated deliveries in Spain, on the back of a strong order book there, that resulted in a very weak quarter. We do not expect any rapid changes to the market environment in the short term, but thanks to our long-term focus, we have a good, good cost structure and maintained or strengthened our market position in our platforms. So, once markets improve, we will really see the effect from those market positions that we have achieved. Now digging into the more detailed numbers. On the next slide, we can see that, in the quarter, group turnover increased 4% to SEK 1.9 billion.
The EBITA came in slightly behind last year, so SEK 6 million behind last year, but with a maintained EBITDA margin of 10%. The operational cash flow, it came in at SEK 107 million, which means that we are now operating on a 94% cash conversion during the last twelve months. And then finally, the net debt, we're now at 2.8. It's still within our range, and if you take that into consideration in combination with that, we have the strongest cash-generating quarter ahead of us, that provides a solid foundation for continued add-on acquisitions.
On this slide, we take a bit more long-term view on Volati, and I tend to say to you fairly often that we should be evaluated over time, and which can be seen, we're now operating under SEK 7.7 billion of turnover and almost SEK 660 million of EBITDA on an annual basis. That means that we have grown on average 18% per year since 2018, which is, given the poor growth the last couple of years, below what we could be expected of us. Since 2021, the growth has been below our financial goal of at least 50%. That's been mainly market driven.
We, but we also expect the next year to compensate for that, the next years to compensate for that with accelerated growth, organic growth, once the market we operate in start to improve and volume start getting back to normal level. One way of looking at it, I mentioned in the quarterly report, in 2021, we showed revenues of some SEK 7.3 billion, with an 11% EBITDA margin, which could then be compared to what we are currently showing. And if you then also take into account that we have acquired 1.7 billion of annual turnover since then, that should leave us with the potential of at least nine million on improved margins.
So, that is something that we're really looking forward to capture once market starts normalizing. With that, I leave the word to Martin.
Thank you, Andreas. Let's start with looking at our performance in relation to our three financial targets. Starting with the EBITA growth per common share during the last twelve months. And as Andreas mentioned, right now, we have a market headwind in a few of our platforms affecting the growth negatively. And we are now at minus 16% versus our target of 15%. It's worth noting, however, that our target is over business cycles, and our five-year average EBITA growth per common share is 19%. Our second financial target is our return on adjusted equity, which came in at 15% versus our financial target of 15%.
So that is below our financial target, which is driven by a lower EBITA growth during the year. However, during the past five years, we have delivered on average 34% return on adjusted equity. And lastly, we have our capital structure, where our net debt to EBITDA ratio came in at 2.8, which is within the range of our financial target ratio of between 2x and 3 x. So that means that we still have financial capacity left to do the right acquisitions when they come. So let's move to our business areas, and let's start with Salix Group, who delivers a solid quarter.
Sales increased with roughly 5% in the quarter, driven by acquisitions, and they continue to see a challenging market situation in the industrial and professional segment, but we do see some green shoots in the consumer-related parts of the business, even though we must say that that's early days still. And I guess that the one of the million-dollar questions that we have is when the market will start to show growth. And what we see now is that external sector estimates point towards an overall construction market growth in 2025. And for Salix Group, despite lower organic volumes, they managed to keep the EBITA margin at the same level as last year.
And EBITA, in nominal terms, came in at SEK 4 million above last year. For us, this means that this is a result of two years of Salix Group working actively with cost control, coordination benefits, and synergy realization, and also working with the market. So with the measures that we have taken, or that Salix Group has taken, we are confident that Salix Group is in a good shape when the demand recovers. So moving over to Ettiketto Group, who delivers another strong quarter, and sales increased organically with 15% in the quarter. They see a good demand with a solid order intake, especially in the Swedish business, where they are now expanding the production capacity to meet the demand.
And, and-
[audio distortion] Hey, Andreas, how are you? Is your internet okay? Because I lost it a little. No, I lost it completely. Your internet is failing me. I can't hear you. No. No.
Can you hear us now?
Yes. Yes. So, yes, we can hear you.
Martin, where did you lose us?
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Yes, roughly a minute ago, so please go ahead, and we're sorry for that internet disturbance. Thank you.
Okay.
Sorry, so let's, maybe I'll repeat what we said about the Ettiketto Group sorry if there's a little bit of a double, Ettiketto Group delivers another strong quarter. Sales increased organically with 15% in the quarter. We see a good demand in the business there with a solid order intake, especially in the Swedish business. They're expanding the production capacity to meet the demand, both through investing in new machines, but also through increasing the utilization of the current machines. We're happy to see that the upward EBITDA margin trend is continuing, with a four percentage point higher margin in the quarter.
And the last twelve months, the margin is now at 21%, which is a little bit of a milestone for Ettiketto Group, because that is now higher than the previous record year in two thousand and nineteen. And to us, that really shows that the strategy of acquiring companies and with a lower margin and then working with extracting synergies and working with operational improvements is really paying off. And as Andreas mentioned, the EBITDA has now almost quadrupled from the SEK 50 million in two thousand and nineteen to the roughly SEK 190 million that we have in the last twelve months.
And the business area is well positioned for further acquisitions, and they're looking for acquisition both in the Nordics and the rest of Europe. And we see significant potential to grow in the business area. Let's move over to industry, who concludes another tough quarter with an EBITDA of SEK 50 million versus SEK 91 million last year. The performance of the platform varies, but the drop in EBITDA is explained by two, Tornum Group and S:t Eriks. So starting with Tornum Group, who is meeting a tough market due to low demand in the agriculture segment.
And in this segment, the Tornum Group is dependent on the farmers, who in turn are dependent on favorable grain prices and weather conditions, which both are not working in their favor at the moment. Tornum Group also saw a lower contribution than expected from the Spanish business due to lower than anticipated deliveries. And S:t Eriks continued to face a challenging market situation in the construction segment, while the demand in the infrastructure segment is quite stable. This market situation is not new, and earlier in the year, as S:t Eriks implemented a cost program that increasingly give the positive effects for the platform. And also, as Andreas mentioned, the last year's quarter was quite strong, so S:t Eriks is meeting tough comparables in the quarter.
But from Q4 onwards, the comparables will be easier. As in quarter one and quarter two, Communications is meeting a slow market, but the platform improves EBITDA in the quarter compared to last year, and will continue to meet quite soft comparables in the next quarters. Our last platform, Corroventa, is performing well in the quarter, both through strong performance in the base business, but also driven by floodings in Europe, which then, as we have talked about before, drives the demand for Corroventa's products for water damage remediation. So all in all, this concludes another tough quarter for industry, with a few platforms performing below what we expect in the normalized market. But we're confident that we have taken the right actions to position our companies for when the markets return.
With that, I give the word to you, Andreas.
Thank you. So then we'll go into the acquisitions. So we've done three acquisitions during the last 12 months and 24 acquisitions since 2020. And that shows that our decentralized model of doing add-on acquisitions to our platforms really work. And we have a couple of times earlier today mentioned our exceptional example at Ettiketto, where we, over this period of time, have actually taken that company from SEK 250 million to SEK 900 million in turnover with maintained margins or even slightly improved margins than through an add-on acquisition journey. Looking at our acquisition pace over time, that has been okay the last 12 months from a slower pace, fall 2022 and spring 2023.
We want to finalize one or a few transactions within the next two quarters in order to keep this pace or maintain this pace, and right now it looks promising, but as always with M&A, it's very binary. A deal is not done until it's closed, so it's very important for us to maintain our discipline work. I do not want the organization to get stressed out about the short-term acquisition pace, but we're in it for the long term. Looking at our financial position, which of course is linked to our ability to do acquisitions, already touched upon this a couple of times, but I think that our cash conversion is at good levels.
Short term, this year, we'll have the strongest cash flow quarter ahead of us in Q4, and once the market comes back, we'll see a positive effect on net debt to EBITDA ratio, also from the EBITDA expansion, so just to summarize, performance in Q3 roughly in line with last year's, and we still operate under weak market conditions in a number of our platforms, but our long-term focus, the cost structure that has even improved in recent years, and the fact that we have maintained or strengthened our market positions speaks for accelerated organic growth once the market returns, and then the M&A work and the M&A model is in place, so we have a good foundation for continued growth through acquisitions.
So with that, I'll leave the floor for any potential questions.
Thank you so much for that presentation, Andreas and Martin, and we'll start with the first question here. You mentioned that a market turnaround is getting closer. Could you elaborate on this?
As Martin pointed out, one of the main markets that has affected us negatively the last couple of years is the construction market. And when we look at the external sources that we follow now, they are pretty much in line, all of them, that we will see a slight growth in 2025 . Meaning that during the course of the next eighteen months or so, at least those external resources see that we will turn from a negative to a positive growth.
Okay, thank you. And, we got a person calling in, so when you're given the word, please press star six to unmute yourself. We've got a person calling in, and with a phone number two six one six, please go ahead. You have the word.
I think you need to unmute again. I can see that from here as well. Please
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Yes, Albin here from Nordea. Can you hear me?
Yes, we can hear you. Hi, Albin.
Perfect. I was kicked off of the call several times, so sorry if you answered my questions already, but looking at the margins here in Ettiketto, they're obviously very impressive. How should one think here? Is this sustainable? Yeah.
No, I think that that's something that we've been clear about already from the start with Ettiketto, that this is was the level that we wanted to get back to. This is kind of the main logic behind our acquisition journey with Ettiketto. That our mature operations in Ettiketto, which is now basically all including also the acquisitions that we've done so far, they are able to operate under this. But then we also want to add new companies to the group, and that will, in the short term, then dilute the margin again, because we know that we are operating under industry-leading margins.
Most likely the next acquisition that we do is going to dilute the margin short term, and then our value add as an owner is to start the work with increasing those margins.
Yeah, perfect. Thank you for that. And for Tornum here, we know it's volatile. Is it just a weak market or anything special in any timing effects that will make Q4 particularly stronger than usual? Or, yeah, is the market just challenging overall here?
It's, if one turns to industry reports, you can see that it's a weak market in basically all parts of Europe. And that is going to be with us in the next coming quarters. Having said that, we still have a decent order book, and I mentioned Spain explicitly in the current call earlier, where we have a strong order book. And part of the reason for not reaching kind of the profit that we wanted in Tornum in Q3 were that we weren't really able to deliver on all those order that we wanted to. And that is something that we're going to see, you know, be able to do in Q4.
But overall, we don't see a dramatic shift in the market short term. And then Martin also mentioned, basically, Tornum is operating under two segments. So we have the farmers and the grain farmers. That's really the segment that is suffering. We also have an industry segment, where Lantmännen, it's a big contract that we took late last year. And that is something that's going to help us mainly in 2025 and 2026 . And the industrial customers are generally doing better. So that's helping us somewhat.
All right. That's very helpful. And then lastly, for Corroventa, had a good quarter here. Do you see Q4 and Q1 also be good in terms of the floodings in Europe here lately?
It's an impossible question to ask. It's, those situations tend to come on a short notice, so last year we had some good deliveries to U.K., which I think some of you might remember, so we had some floodings in U.K. over wintertime, which helped us. Whether something, you know, similar would happen this year, it's impossible to foresee, but where we are right now, we still see a good activity. One can just read the newspaper to see that there are floodings throughout Europe, which we are then helping, supporting, and being a part of the solution for.
Yeah, I thought if it was like long-term damages from the floodings that already happened, that you see will continue to need support from Corroventa. Or, yeah, that may be not possible to answer.
It's also impossible, but of course it's always you need to keep those machines for yet some time after the floodings. But in order to get that to hold into Q1, for example, that you asked for, then you also need new occasions occurring.
Yeah. All right. Thank you. That's all for me. Very, very helpful.
We'll take the next question here. Can you, can you provide more information on the new project for Tornum Group with Lantmännen, and how it will affect the platform?
So that's actually the project that I mentioned while answering Albin. So it's one of the biggest projects of its kind in Sweden in many years. I think it's a strength that we with Tornum was invited and actually, you know, won that contract. That shows the strengths of the group that we've built. Typically, those kind of contract has gone to international and larger players, and we now see ourselves as, you know, a very good competitor to those. We've had some small deliveries this year, but the main effect of that we will see in 2025 and 2026. So yeah, that was a few words on the Lantmännen project.
Sorry, Albin, for calling you Albert. I know it's Albin.
Okay, thank you. And, that's a wrap of the Q&A section here. Andreas, do you have any concluding remarks?
I think I just want to start by thanking all colleagues. They're all doing a fantastic job and are the main reason why I'm confident about how we handle the position we're currently in, and then I know that all of us are really looking forward to see the full potential of our group once the market start normalizing, so I think that's what I want to leave with myself, and I want to leave with you. Thank you very much.