Good morning, and welcome to today's webcast with Volati, where CEO Andreas Stenbäck and CFO Martin Aronsson will present the year-end report for 2023. After the presentation, there will be a Q&A. So if you have any questions, you can send them in via the form to the right, or if you're calling in, you can press star nine to raise your hand, and I will give you the word. And with that said, I hand over the floor to you, Andreas and Martin.
Thank you. Good to be here today and present our Q4 report and talk a bit about Volati. I'll get directly into it. Volati, it's a growing group of well-managed companies with strong earnings. We have six platforms, and they're all built upon an industrial logic, and we have market-leading positions and strong, strong cash flows. And their growth potential is at least in line with Volati's overall goal of 15% per year. We have two natural business areas, Salix Group and Ettiketto Group. They are both platforms. And then the remaining four platforms are within our business area Industry. Volati as a whole, including these six platforms, has grown on average 32% per year since 2017.
I thought I would start by looking into our last quarter of 2023. Of course, I'm not happy to report the declining profit. We go from SEK 179 EBITDA last year to SEK 134 this year. But I'm confident that where we are, we are in a good place, and I'm very proud about the work that we're doing in our platforms. 4 out of 6 of our platforms are actually showing improved margin and an EBITDA better in line with last year. Salix still see a tough end market, and despite the declining sales for the second quarter in a row now, they come in on a EBITDA level in line or better than last year.
But that shows that the measures we've taken in Salix Group are really showing effect. Ettiketto Group come in slightly lower on sales than we wanted. There are two main reasons behind that. One is that we had a very strong Q4 last year. We actually grew sales with 25% last year, and that was much because of a ramp-up of demand because there was a strike effect in the industry earlier that same year. We also see slightly lower volumes in Norway, which is something that we're addressing right now. But even those sales going down, I think the very highlight of Ettiketto Group is that we significantly improve the margins. We actually go from 16%-80% in the quarter on EBITDA margin.
So that shows that our model with synergies and operational improvements from the acquisitions that we do really works. In addition, we have two platforms, in business area Industry, Corroventa and Tornum, that are developing very well and improving, their profits, in the quarter. The reason then for the decline is, within two of the platforms. It's Communication and S:t Eriks, two of the platforms within Industry. And there is actually similar reasons behind that. They both, firstly, have, had a very strong Q4 last year. While we have been clear with that, we see a lower demand, especially during the second half of this year in these two platforms. For Communication, it's, the 5G rollout, in particular in the U.S., that has been postponed.
And in S:t Eriks, it's the more building-related part of that business that has seen a weaker demand. Also something that has affected S:t Eriks is the cold weather. There are cost measures taken, you know, that's been instigated in both these platforms. We've seen some of the effect of those already in Q4, but of course, we also expect more of that to show during the course of 2024. Two more things I want to highlight about Q4. Firstly, we have done two value-creating add-on acquisitions, adding a total of 400 million SEK of revenue on an annual basis. And of course, it's very good to enter 2024 with that.
That will, of course, contribute for the full year of 2024. And lastly, we continue to show a strong cash flow. SEK 300 million of cash flow in the quarter, and that leaves us with a very strong position, not the least to, you know, act on acquisitions once they occur. Looking into the numbers, sales end up with SEK 1.8 million compared to SEK 1.9 billion the year before. EBITDA, SEK 134. This number does not, is not down adjusted for the one-off costs in the quarter, compared to SEK 118 the year before, and an operating cash flow of SEK 300 million, more or less in line with last year.
That leaves us with a net debt to EBITDA in the lower range of our financial goal. Then going into the full year of 2023, when I summarize 2023, I'm very happy with the position that we have, are in our platform. We have put a lot of effort into preparing ourselves, not only for the, you know, current market conditions, but more importantly, for the years to come. And as a long-term owner, we focus on long-term, structurally sound measures. And that's been a good market for doing that in 2023. And we can also see that in the one-off cost, that we have some restructuring costs in Q4 and for the full share, full year as well. And that's the reason for that.
It's very easy, when you are in this kind of environment that act very short term, it's easy to, for example, act on a cost measure related to personnel and so forth. Of course, as a responsible owner, sometimes you also need to act short term, but we are always very focused on keeping the long term in mind. So rather, focusing on the long-term structural measures and making sure that we are prepared for creating long-term cash flows and profitability. Also, I would like to point out that we have deliberately acquired companies with earnings that sometimes vary over time. And one could argue that that's a contrarian approach. As most acquirers and investors, they actually look to acquire companies that have very stable profits.
And they are, by definition, then willing to pay a premium for those because the competition is that very fierce. We are convinced that we get excess returns from also being looking into companies that, yeah, again, has some profitability that varies over time. We're confident that we are a good owner of those. However, you know, since we are a diverse group consisting of six platforms in and equally deliberately focused on acquiring companies that not vary, kind of, based on the same factors, in most of the cases, Volati as a whole operate close to our total average. However, in 2023, and in particular in the second half of this year, we have had more platforms than normal that are operating below their average profitability.
And what does that mean? That means that once, we start getting to more, towards our, total average, that will, give us a boost in the organic growth. And it also means another thing, Volati, and I tend to say this fairly often: We are best evaluated over time. Looking at the numbers now, 2023, net sales more or less in line with last year, and a growth of 3% on EBITDA. And as expected, a very strong operational cash flow. But again, more importantly, look at us over time. Since 2017, Volati, as of today, has grown an average 32% on EBITDA. And, on this next slide, we have, we're also showing the organic, development.
What one could see is that roughly half of the EBITDA growth has been organically, and then, of course, the other part has been mainly driven by acquisitions. Another thing that this slide shows is that, yeah, as said, we've had a negative organic sales and EBITDA growth this year, reasons explained before. But that are then, of course, significantly below the historical averages that we have been able to show. Before leaving the word to Martin, I would like to take an even longer look at Volati's development than the ten-year development.
Our overriding goal is to generate long-term value growth. And since 2013, we have grown with 18% on average. This has been done with our cash flow, own cash flow. You who follow us very closely know that we actually divested and separately listed a significant part of Volati in 2020 and 2021. So taking that into account, I think this really showed that we have been able to create long-term value creation. With that, I leave the word to Martin.
Thank you, Andreas. So let's put some more colors on the numbers on the slides going forward here. And let's start with looking at our three financial targets and our performance in relation to them. Let's start with the first financial target, the EBITDA growth per ordinary share during the last 12 months. We are now at a 3% growth versus our target of 15%, which is measured over business cycles. So that means that we are right now below our target. But as Andreas mentioned, we are best evaluated over time. And if we look back towards 2017, the growth in our continuing operations has been 32% per year.
Our second financial target is the return on adjusted equity, which came in at 22%. So that is then exceeding our financial target of 20%. And our last financial target is our capital structure, where we came in at a net debt to EBITDA ratio of 2.0 times. And that is in the lower range of our financial target of between 2 and 3 times, which leaves us for substantial capacity for acquisitions going forward. So let's look a bit on our three business areas, starting with Salix Group. Salix Group's EBITA came in on the same level as last year, and this is despite that they saw a sales decline of 8% in the quarter.
At the same time, though, the margin in the quarter increased for the second quarter in a row. And how is this possible? Well, Salix Group has worked extensively with adapting to the market situation and with the cost control and synergy realization. So that has made them more profitable, even though it's a challenging market. If you look at the demand in the quarter, it continues to be hampered. But given the very successful work with adapting the business to the current market situation, we believe that Salix Group is very well positioned when the volumes return. During the quarter, they signed an agreement to acquire all shares in Trejon as well.
So let's go over and look at the Ettiketto Group, which saw a sales decline of 7% in the quarter, and that is mainly due to two things. The first one is that they are meeting very tough comparables from last year. Last year, we saw a pent-up demand from the aftermath of the strike at the materials supply UPM. But secondly, also due to that, we see some volume reduction in the business, especially then also, as Andreas mentioned, in Norway. But overall, EBITA in the quarter increased with SEK 1 million, and the margin increased with two percentage points in the quarter. And for full year, the margin increased even more, so it decreased with three percentage points over the full year, which is very strong.
EBITA margin is now at 18% historical margins of, roughly 20%. And they're doing that through, successfully working with, synergy realization on the, on the acquisitions that they made, but also working with operational improvements in, in the normal business. We believe that the company is now in a very good position to act on acquisition opportunities, both in the Nordics, but also in the rest of, the rest of Europe. So lastly, let's look at how business area Industry is performing. They saw a sales decline of 5% in the quarter and an EBITA margin decline of three percentage points. For full year 2023, sales went up with 8%, and the EBITA margin was flat.
Business Area Industry is a diversified business area consisting of four platforms, where Corroventa performed very well in the quarter. Predominantly due to that, we saw quite a bit of late summer storms in, or late storms in Europe, and that really drives the demand for water damage remediation products. Our second platform, Tornum Group, concludes a very good quarter, increasing both margins and results. They also acquired Simeza, which is a very good acquisition for Tornum, and I think Andreas will tell a bit more about that later on. S:t Eriks is experiencing a good demand in the infrastructure segment, but they continue to see a weaker demand for construction-related products.
If we look at Communication, we already mentioned that, in the quarters previously, but they, they are negatively affected by the slowdown in the, in the 5G rollout, especially in the U.S. And they are also, at the same time, meeting very tough comparables from, from 2022. So all in all, this concludes a tough quarter for Industry, with two out of four platforms performing below what we expect in a normalized market. But as Andreas mentioned, we have taken actions to adapt to the current market, and we continue to see increasing effects from this. So with that, I leave the word to you, Andreas.
Thank you. Then we're going to talk about acquisitions. As you all know, acquisitions are an extremely important value driver for Volati. This slide shows the 23 acquisitions that we've done since 2020, totaling SEK 3.3 billion annual sales. And we are focusing on add-on acquisitions. And we can see here also that we've done add-on acquisitions in 5 out of 6 platforms. We've done 5 acquisitions last 12 months and 2 in the last quarter, Simeza and Trejon. And with that, I would like to spend 2 minutes on Simeza. And it's actually a very good example of what type of add-on acquisitions that we want to do. Tornum actually the first company that Volati acquired back in 2004.
Tornum is the European market leader within or one of the market leaders within grain handling equipment and solutions. What we provide with Tornum is the whole solution to the customer. But that has historically meant that we have traded the silo storage part of the offering from an external supplier. We have over time and for many years looked into actually adding that to our own offering. By acquiring Simeza, we have now successfully done that. So that basically mean that Simeza, being one of the very, you know, established European players supplying silo storage solutions, by owning that company, we could make that part of the offering to our in-house offering.
It also means that since we haven't acquired or bought these silos from Simeza in the past, the volume that Tornum, you know, delivers every year will be added to the EUR 10 million of sales that Simeza reports. So we will have significant synergies. So that's, it's a very good case of the types of acquisitions that we want to do within Volati. Looking on the next slide, 16. As we have talked about earlier this year, we had had a slightly lower acquisition pace in 2023 compared to the historical average. M&A work, it's binary. Either you close the transaction or you don't.
During 2023, we've had a couple of cases where we were close, but unfortunately, weren't able to sign to the right terms. Some of these situations will come back to us at the later stage. But for us, discipline is extremely important. I do not want the organization to get stressed up about, in the short term, not keeping the acquisition pace up. It's more important for us to do the right acquisitions. We are in it for the long term. But now looking at Q4, I'm very happy to see that we're actually been able then to finalize two acquisitions that are exactly the type of acquisitions that we do, and they meet the expectations that we have in terms of return.
And of course, you know, doing those two in the later part of 2023 means that we will have a very good contribution in 2024. I'm also happy with the pipeline that we have and the activity that we have in our platforms, and the fact that we are in the lower part of the range in terms of net debt to EBITDA means also that we have room for acting on acquisitions and opportunities once they occur. And the M&A market, as I see it right now, it's very suitable for a player like Volati. So to summarize, Q4 and 2023, as said, I don't think it's really reflecting our average earnings potential. We have had more platform than normal that are below what we see as the average earnings.
But we have taken the opportunity to take really structurally sound measures in the platform this year, which leaves us in a very good position for long-term value creations, and the market and the circumstances for our platforms will come back. And also, I'm especially happy about that we've done these two add-on acquisitions in Q4. They will have a good contribution in 2024, and we also have the financial position that will leave us for, you know, making, you know, keeping the M&A pace up once we see that we have good enough acquisitions to act on. So I think with that, we leave to questions, if there are any.
Thank you so much for the presentation. We got a couple of questions. I think we jump right ahead. What is the competitive landscape for Tornum Group and Simeza within the grain industry, and how does the acquisition enhance their competitive position?
So, you know, the competition, as I said earlier, Tornum is one of the European market leaders, and there are a few others, larger players acting on that market. I think in terms of how the acquisition of Simeza will enhance Tornum's offering is that, firstly, Torn um, with the Tornum brand, you know, we have a very strong brand. And the more products that we could bring in-house and add to that brand is a strength for our overall offering.
And the real financial sense to it is, of course, that the profit that we have earlier shared with an external supplier of these silos, we now keep in-house. Simeza has been a very stable, profitable company in the past. We have acquired that profitability, but we're also able to add significant additional profitability that we have earlier then shared with an external party. That I would say is the main logic behind that acquisition.
Thanks. Can you please quantify how large a significant one-off costs in Q4 and 2023 are?
Sorry, can you quantify? Say again, please.
Yeah, of course. Can you please quantify how large a significant one-off costs in Q4 and 2023 are?
Yeah. Yes, for the interested reader, you can find that in the alternative in the notes. If we look at the 2023, there was quite a bit of restructuring costs. For the full year of 2023, that was SEK 22 million in restructuring costs, and that is, of course, then related to what Andreas mentioned on that. We have taken the opportunity now also to adapt the businesses to the market situation and make them well prepared for the future. So that is the predominant part of the extraordinary cost in 2023.
Thanks.
Majority of those came in Q4.
We'll move ahead to the next question. What are the key risk factors associated with the Trejon acquisition, and how does Volati plan to mitigate these risks to ensure success of the investment?
Trejon is a very, it's a very good acquisition that, I hope to take the opportunity to describe in more detail, at some other stage. But, I would like to answer that in a more general way, but I think it's applicable to this case. I think one of the most important, you know, key success factors when you do add-on acquisitions, is to really make sure that it's basically, you know, people that you acquire, people and personnel, and an organization that has been very successful in the past.
And, I think I would say that the main. One of the main success factors is to being able to integrate those or take, take care of them in a good way, making them motivated to continue, you know, doing a successful work. So I would say that that's most the key success factor, and, of course, a risk then if you're not able to do that.
Yes. The Communication platform came in lower than last year, and in the CEO letter, you mentioned that it's partly due to the fact that rolling out 5G in the U.S. is not going as quickly as expected. When do you think that will take off?
Oh, if I could, if I wished I would have that answer. But the reason, well, what has happened during 2023 is that the rollout has been very much delayed. So I'm confident that the rollout will take place, and I'm also confident that we are in a very good position to deliver once it picks up again. Whether that happens during the first half of this year, or second half of this year, or even beginning of 2025, I don't know. I don't have the answer to that. What I know is that we are working under the circumstances that you know, we will have this type of environment now for some time, and we have adjusted, you know, our operations to that.
Thanks. The organic growth in Q4 is negative. What will you do to increase sales in the coming quarters?
We always work very actively on increasing sales. I think a few comments to that. One is, yes, we have a negative organic growth, but I'm also fairly confident that we are not losing market share. I think we're rather gaining market share in many of our platforms. So this organic development, it's mainly driven by external factors. And what typically happens is, you know, markets come back, demand comes back, unless there are structural problems in an industry, which we do not foresee in the industries that we're working within. So yeah, demand will come back, and I think what's. I'm trying to put some emphasis on is that we're in an extremely good position now to act on, you know, you know, act on the sales opportunity once opportunities once the market come back. And then we will also see the benefits of an organic sales growth again.
Thanks. You have stronger, stronger margins in 4 out of 6 platforms in Q4, still, EBITDA declined by 25% in Q4. What were the main drivers, and how do you counter this going forward?
I think the answer to that is fairly easy. It's two our platforms, and I tried to address that earlier in this presentation. It's S:t Eriks Communication. Firstly, they had a good quarter last year, so they met the tough comparables. But we're also seeing a lower demand in parts of their businesses. So the reason lies within these two platforms. And the measures are already, you know, addressed. We have that undergoing, and we will see those effects during the course of 2024.
Thanks. During 2023, the value of many companies fell on the markets. Do you see an opportunity to find bargains on the acquisition market?
Sorry, we lost you. I didn't hear that full question.
Yeah, yeah, I will repeat. During 2023, a lot of valuation for many companies fell, came down a bit. Do you see an opportunity to find bargains on the acquisition market?
I wouldn't call it bargains. It's most of the cases you have a very, you know, sellers that decide to sell. But of course, as valuations come down, and they have come down somewhat, and we are in a position, a financial position to acquire, and we're also active in industries which we, you know, very comfortable with and, have a lot of good knowledge about. So I think we are in a good acquiring position. So, all in all, that leaves us in a good place. You know, we will, we will most likely be able to do some good acquisitions in the coming, coming years.
Thank you. Moving on to the last question here. What is your assessment—it's sort of the same question as earlier, a bit. What is your assessment of the acquisition market going into 2024?
The assessment is that we've seen. It's been constantly picking up, I would say, in terms of activity, the M&A market, for the last 12 months or so. I expect it to continue picking up, being a bit more active. The main reason for that is that we've had a valuation gap. We've seen that, we've experienced that as acquirers, that we're not really able to meet some of the sellers. And that gap is now closing. I think the sellers has adjusted their maybe valuation expectations a bit downwards, while most buyers might, you know, we will maybe be, will be a bit more confident about the valuing the businesses as well. So once you have buyers and sellers meeting, activity will pick up. I think for 2024, you know, the circumstances for that will be better in 2023. So I'm confident with where we are.
Thanks. Actually, we received another question here. How big share of revenue has S:t Eriks to building-related products?
I don't think that's, unfortunately, something that we share publicly. But it's a very relevant question because we also have this S:t Eriks address in the infrastructure segment, which is very stable, and where we actually see a stable or good demand. And where we see a weakened demand is in the building relation, related parts. But we do not provide that split, unfortunately.
Thanks. That was all the questions I have. So I wonder, do you have any concluding remarks here, Andreas?
Yes, yeah, yeah. Just summarizing from my perspective, yes, we reported declining profits in Q4. But that is something that we are aware of can happen with the type of fantastic platforms that we have. I'm very confident in the position that we are right now. We mentioned that we've taken the structural long-term measures during 2023, preparing us very well for the times to come. We already now see that four out of six platforms are improving their profits, so the measures are working. But still, we are right now in a place where more platforms than normal are operating under their average profitability. Once that change, we will get the boost in our organic growth.
And finally, I would just, you know, there have been a lot of comments and questions about M&A. There always are when it comes to Volati, but I'm very happy with the 2 acquisitions that we did in Q4. That will give us, of course, some help to fuel growth in 2024. And I also feel that we're in a good place to continue doing acquisitions. We have the financial capacity, and we have the processes in place. So, 2024 is a year that I'm really looking forward to, together with all my colleagues at Volati.
Thank you so much for the presentation today and asking all questions, and thank you all for tuning in. Have a nice day.
Thank you. Bye.