Good morning, and welcome to today's presentation with Volati. With us presenting today, we have the CEO, Andreas Stenbäck, and CFO, Charlotta Nyberg. We'll open up for a Q&A after the presentation. If you're calling in and would like to ask a question, please press star nine to raise your hand and star six to unmute yourself when you get the word. You can also use the form linked to the right. With that said, please go ahead with your presentation.
Thank you very much. Thank you, everyone, for listening in this nice summer day in Stockholm and Sweden. I am most very happy to have Charlotta today at my side. She's now finalized her first quarter as the CFO for Volati. Let's get into the presentation. Let's see here. We start by looking at some highlights from the quarter. It's a mixed, but I would say overall disappointing quarter when it comes to the EBITA development. We have some highlights. We have Ettiketto performing more or less in line with expectations. Communication, I would say, performing very well with a strong EBITA growth and Corroventa also performing in line in, for them, a very small quarter. However, as you all can see, we have low earnings in S:t Eriks Group and Tornum Group. We will get into some more details about all the platforms later on.
On the positive side, I would like to highlight the very strong cash flow that we have. That has enabled us to maintain our acquisition pace and do two more acquisitions just the last couple of weeks. That summarizes three acquisitions in total for the last 12 months and actually three acquisitions in 2026. We have also finalized the separate listing of Salix Group. Just before digging into our Q2 numbers, I would like to just summarize that separate listing very shortly. I think we, through this, have demonstrated that we can really create value through our platform development model. We acquired a company called Lomond Industry, Lomond Industrier, for just over SEK 500 million in 2015, so now 11 years ago.
We have developed that to now a listed platform, a standalone platform, a cousin on the Stockholm Stock Exchange with a market cap in excess of SEK 5.5 billion. This model we continue using and developing our five existing platforms that we still hold on to. Let's then get into the quarter in more detail. As one can see, we have showed a sales growth of approximately 11%. In that, we have an organic sales growth of around 2%. The EBITA development has been weaker than last year. The reason for that is Tornum and S:t Eriks, which I already highlighted.
We've had a strong cash flow, I would say really strong cash flow, given where we are, and that has put us in a position where the net debt to adjusted EBITA is at 2.9x, and that is slightly lower than the same period last year. Looking at the LTM numbers on this slide six, of course, we're not happy with the negative trend since 2023, when we had our last EBITA peak. The development since then is mainly driven by tough end markets. It's a construction market for S:t Eriks, and it's a grain or agri market in Europe for Tornum. Also that we've had a very dry last 18 months for Corroventa. I still believe that 2023 is a representative year for what we should achieve in an average market.
That's definitely something that we should be able to achieve in a normal market. Looking at our financial targets, of course, as you can see, we are underperforming in terms of our growth target. We have now underperformed for quite some time, which means that in order to reach that goal, which is to have at least 15% growth over a business cycle, we have to overachieve our 15% growth target for some time. The ROE, the return on equity, is now at 18%. We do adjust for the capital gains that we got from the separate listing of Salix Group. If you take that into account, the return on equity is actually 368%, we do adjust for that. That return on adjusted equity or the return on equity will increase once we get the EBITA growth going.
The capital structure is, I think it's where we deliberately want it to be. We are at the upper end of our range, we are deliberately there because we continue doing acquisitions. With that, I thought I would go into our now five business areas one at a time, and we start with Ettiketto Group. Strong net sales development as expected, mainly acquisition driven, we also had some organic growth despite that we saw some material shortages in the quarter. We have also seen some material cost increases in the quarter because of the situation in the Middle East, which we have met with price increases. The margin development are, as expected, lower than last year, that is driven by the acquisitions that we've done and that the companies that we acquire show lower margins than we do overall in the group.
Operational efficiency, the synergies that we are able to achieve will, over time, increase those margins. We have finalized one add-on acquisition to Ettiketto Sweden, NicEtikett. It's acquisition on the smaller side, SEK 35 million of revenue. It's precisely the type of smaller add-ons that we want to do. They are very value creating for us. We are now able to do these kind of acquisitions in not only Sweden, we're also able to do them in Norway, Germany, U.K., and the Netherlands because of the geographical footprint that we've been able to achieve the last two or three years. That was that about Ettiketto. If we go over to Communication, I would say that Communication is performing very well in the quarter. It should be seen in the light of a slightly weaker quarter last year, still, we're performing very well.
Demand in key markets was somewhat subdued. We were able to compensate that with strong product deliveries in other markets, for example, in Asia. We have a global footprint or a very large geographical footprint in this platform, which enables us to capture these kind of growth opportunities when they occur. I would also want to highlight that Communication now, after three or four years, being owned by us at Volati, are really well-positioned to do acquisition and continue drive growth by acquisitions. Next platform or business area is Corroventa. Corroventa developing very much in line with our expectations. It's just another dry quarter, but it's also the by far smallest quarter of the year. Development very much in line with the last year.
I will, later on in the presentation, get into the acquisition that we finalized, which is now the first add-on acquisition to Corroventa, which is really nice to see that we're able to complete that. S:t Eriks. S:t Eriks saw one okay sales development in the quarter, more or less in line with last year. The construction civil works markets are still challenging, while infrastructure, I would, for example, want to highlight electricity, is developing stable or even strong. However, we see some signs of delays in the water and wastewater segment, which is important for S:t Eriks. EBITA development, significantly lower than last year, and the main driver to that is lower production rates and the under absorption that has as a consequence.
During 2026, we have deliberately lowered the production pace below what is needed to meet the current market demand, and that we have done in order to reduce the inventory levels. We can see that that works because of the very good cash flows that we've had in S:t Eriks, both actually in Q1 and now in Q2. During the second half of the year, we will gradually increase the production rates again to normalize them to the market demand that we see right now. We've also, early this year, indicated a cost reduction program that we did based on two reasons. One was to meet the shift that we're doing from a volume segment to the more high margin and lower capital need product segments. The other reason is to meet a lower demand in the market. This cost reduction program is now finalized.
That has led to some non-recurring costs in the quarter. We will gradually see the effects of that throughout the H2 or the second half of this year. We have Tornum Group. Tornum, we had a very tough Q1. Q2 has developed slightly better actually than Q1. We still saw a decrease of 8% on top line. We are operating in a very challenging market. It's characterized by low grain and pulp prices, which affects our overall demand. We also seen that the war in the Middle East continues to weigh on order intake. We also see some delays in projects and in order intake, but the underlying investment needs remains, but it's being deferred. The order backlog is on the positive side, slightly stronger than last year. We have that with us for the rest of the year. EBITA declined.
The main reason for that is the lower net sales, the sales development, but we also see some continued pricing pressure on the market. We are meeting the pricing pressure with the margin improvement initiatives. As we already highlighted in the Q1 report, we are also meeting the lower demand with cost adjustments. That has now been implemented, and we expect to gradually see the effects of that during the course of this year. On the next slide, this is more of a summary, I would say. We do spend a lot of focus and priorities on improving profitability in Tornum and S:t Eriks, and this slide is a way of summarizing and highlighting that. Again, the emphasis on activities and key priorities to drive the profitability in these two platforms. If we look at Tornum Group, we need to deliver on the order book that we have.
That, again, is stronger than last year, but we also need to capture new volumes in a market that is low and is very competitive. We need to meet the price competition, the price pressure, with selecting projects very selectively and also working with margin improvements. As a group, slightly larger group than many of our competitors that we meet, we are able to do that in a good way. We need to strengthen execution and operational efficiency. We have previously highlighted, or I have previously highlighted, that we have some challenges with one of the acquisitions that we have done in Spain, for example, and some of these measures relates to that. When it comes to S:t Eriks Group, what are the key priorities there? We need to restore the profitability in division infrastructure. That is where we see an unsatisfactory profitability.
That is where we have the more volume-dependent segments. When it comes to the profitability division infrastructure, we will get some help of now increase in the production pace again during the second half of this year. We also need to improve the product mix. We have a structure shift away from some of the volume-related segment and towards high-margin products. We need to continue that, and we also need to work on production efficiency. We have done a very good job, I would say, during the first half of this year with reducing the working capital and then mainly the inventory levels. We still have some work left with that. This summarizes some of the measures and key priorities for Tornum Group and S:t Eriks Group.
This slide is now highlighting our five platforms, our five business areas, and it is proof of the add-on acquisition model that we have. Acquiring companies to our existing platforms works. We have done three acquisitions during 2026, highlighted on this slide, two in Ettiketto, and very nice to see the first one in Corroventa. Now we have done add-on acquisitions in all of our platforms. Just a few words on the acquisition of Tramex then. Tramex, very nice family-owned company based out of Ireland. We have known that company for I would say many years. They were now willing to initiate the dialogue with us about the potential sale. It is a premium provider of moisture measurement solutions. You can see one on the picture here on this slide.
Basically, these moisture measurement, you use that when you enter a site, where you have some flooding, where you have a problem with the moisture. You enter first to identify where the moisture is, and then you use these kind of Tramex devices. Once that has been done, you leave the site with a Corroventa machine to take the moisture out. This is a very complementary product to our offering. Our customers are using both Tramex and Corroventa products. The company shows sales of SEK 90 million and EBITA margin of around 20%. As you can understand, it's a very nice, profitable company, very similar to the characteristics of Corroventa. This, again, marks the first acquisition for Corroventa, and it complements us both in terms of products, but also geographically. Tramex are present on some of the markets that Corroventa isn't, and the other way around.
The acquisition pace then. What one can see is that from, I would say from 2023, 2024, and 2025, we had a slightly lower acquisition pace in what is now the remaining Volati. We prioritized growing with acquisition in Salix Group. I would say that the last 12 months, now we're back at remaining Volati. Roughly SEK 600 million of acquired turnover is okay. But of course, now when we don't have Salix Group anymore, we need to make sure that we maintain the acquisition pace in the remaining platforms that we have. We are very well-positioned to do so. One important factor to do so is that we have the cash flows and that we have the net debt to adjusted EBITDA. I already highlighted that we had a very good cash flow in Q2.
The last 12 months, the cash flow has been, or cash generation has been 86%. That's okay. But it was very strong in Q2. The net debt, of course, have decreased significantly, and that is mainly, or that is more or less solely because of Salix Group repaying the internal debt to us. Now we have a net debt to EBITDA ratio of 2.9x, and the ones that could, listening to Salix presentation yesterday, saw that they also had a net debt to EBITDA ratio of 2.9x. That was something that we wanted to achieve with the separate listing of these two entities. A few words summarizing. Strong performance in Communication. They've done a very good job. While Ettiketto and Corroventa is also performing well in line with expectations. We have the weaker earnings in S:t Eriks Group and Tornum Group.
We are meeting them with continued profitability improvement initiatives. The operational cash flow is there, which means that we can continue doing acquisitions. We have finalized the separate listing of Salix Group this quarter, which I think shows the type of long-term shareholder value that we can achieve with our platform development. With that, I open up for questions.
Thank you very much for that presentation. Let's open up the Q&A. If you're calling in and would like to ask a question, please press star nine to raise your hand and star six to unmute yourself when you get the word. You can also type in your questions using the form to the right. We'll start with a written question here. Could you provide more color on the company's growth outlook for the second half of the year?
I think it's always hard to describe our outlooks without getting into the individual platforms. To put it very shortly, we have Ettiketto, though, which should be able to, or will be able to achieve acquisition-driven growth because they still have acquisitions rolling in, and they're operating in a stable market. In terms of Communication, I think the telecommunication market is somewhat there. I don't expect any big shifts there in relation to the longer-term trend that we've had now for one and a half year or so. We have Corroventa, again, dependent on floodings, but with the addition of Tramex, that brings some additional stability. They are not as dependent on floodings as the rest of the Corroventa. The big question marks are to S:t Eriks and Tornum, where we are in both those entities working under tough market conditions.
We do not expect any big shifts there either, meaning that we will still face tough markets. S:t Eriks has been fairly stable now for the last year or so. The main challenge there is to increase the profitability. When it comes to Tornum Group, again, we have a stronger order book. It's also about delivering on these orders and not getting them delayed. I would say it's good to have that order book in place.
Thank you for that answer. Now we'll give the next person to have a question with the phone number end with 2991. Please go ahead. You have the word.
Seems to be on mute still. Now.
Hi, Andreas. [inaudible] from Nordea. Starting off in S:t Eriks, obviously a quite challenging quarter and still some cost to be taken out here. You allude to a sort of gradual improvement here in H2. Can you give a bit more flavor on that than sort of the building blocks toward 2027 as well here?
Thank you. Firstly, very much with the profitability in S:t Eriks, that relates to the production rate. That's why we've been talking about that. Now what we did in H1 is that we have produced lower than the current market demand to release inventory. We will shift that during the course of this fall or H2. Again, increase the production pace, which means that the under absorption that we've seen will at least be much lower. I would say that will be the main building block of increasing profitability in S:t Eriks. I think the second building block is the cost measure that we did last in Q1. We took most of that then also in Q2. All of those cost measures have now been executed, and we will see the effects of that during the second half of this year gradually as well.
Also, when looking at S:t Eriks, I would say that we're meeting somewhat easier comparables, especially in Q4, but also somewhat in Q3. That will also support the profitability trend in S:t Eriks. Going into 2027, I think the measures and the structural measures, the things that we're doing now, that of course puts us in a lot better position into 2027. We first have the remaining 2026 to deliver on.
Perfect. That's very clear. In Ettiketto, you mentioned some constraints in the supply chain and some price pressure here. Would you say that those problems have picked up during Q2 compared to Q1?
Yes, I would say so. Maybe we had some of that in Q1, not much, but it picked up in Q2, and it was more fierce in the beginning of Q2. It's actually eased up a bit towards the end of Q2. We've seen that before in the labeling segment in that industry. It's extremely important to be able to deliver those labels to the customers, because they're integrating the production of our customers. What happens when you get the signals of a shortage in raw materials, the company starts building stock. Also that hits their supply. That's what happened in Q2. That has led to that we have built order book a bit in the quarter. We haven't been able to deliver as much as we would have been able to do if we had all the raw materials.
It's also meant that we've had some increase in prices. I think we're confident that we will sort that out during the course of this year.
Okay. That's fair. In terms of price increases, what are you looking at in Ettiketto roughly?
We don't give that specifically, but what we've been able to prove in the past that we've always been successful in transferring these price increases to the customers. We haven't in the past been stuck in between. We're confident that we'll be able to do that this time as well.
Okay, perfect. Lastly, in Ettiketto, obviously margin pressure from the two acquired units here. How's the integration process proceeding here? Is it going as planned and when do you expect to see the full benefits here?
In order to answer that question, I think we have two major acquisitions that we're still working on integrating. We have the acquisition of Clever that we did in Germany in 2025, and we have Interket, which is actually more or less four entities that we acquired at the beginning of this year. These are the companies that we're integrating and the companies that we're working with operational efficiencies and synergies from. If we start with Clever that we did last year, I would say that that integration is somewhat delayed. We are a bit behind schedule there. Nothing to be worried about, but it's taken a bit more time than we anticipated. On the other hand, the Interket acquisition that we did at the beginning of this year, we are before schedule. We are before plan.
The market that we're really working in with regards to operational efficiencies, getting them to work with at the category where you're working, that's the German markets which the management team of Ettiketto and the supporting functions are working very actively with now is the German market. That's where we see the largest operational efficiency effects going forward.
Perfect. That's very clear. Thanks a lot. That's all for me.
We'll take one final written question here. Can you elaborate on the growth strategy and market expansion plans for the upcoming quarters?
I think I pretty much answered that in the sales-related first written question. It's very hard to have to address that for the five different platforms. I would leave that answer to the first question that I received earlier today.
Thank you for that. That concludes the Q&A. Thank you both for presenting with us here today, and I will now hand over the word to you, Andreas, for some closing remarks.
Yes. Thank you again for listening in. Also big thank you for the colleagues at Volati. It's a very mixed quarter. We have platforms that are Communication, for example, which are delivering very well where our sales and EBITA development has been with us. We also have platforms like Tornum, like S:t Eriks, which are facing headwinds. I also know that all colleagues out there, independent on where you are within the group, independent on which platform you're working, you're all doing a very good job. I hope as many of us are based in Europe, I wish everyone a nice holiday. We're going to come back after that with some extra energy. Thank you very much