Relais Group Oyj (RELAIS) Earnings Call Transcript & Summary

Very good morning, everyone. Warmly welcome to follow the webcast presentation of Relais Group for quarter 1 2025. My name is Arni Ekholm. I'm the Group CEO. And together with me, I have today; even a special guest, more about that later; Thomas Ekstrom, Group CFO.

Good morning.

He will present the financial numbers. And to add some color to the presentation, we decided to take Mr. Jan Popov with us today. Good morning.

Good morning.

And he is going to take you through the Repair and Maintenance business and talk about the exciting acquisitions that we have made in that business. So the theme for quarter 1 is ready for the next level. And what I mean with that one is that we have come to a new level as a company. The major acquisitions that we have announced in April will make Relais and will get Relais into a totally new level. Quarter 1, I think you should not be fooled by the optics. It was not as strong as the exceptionally strong quarter 1, 2024. However, this quarter is the fourth best quarter we have ever had on our journey in the stock market and the second-best quarter 1 profit-wise, we have ever had. So that tells a lot about the strength of the quarter. More importantly as well, we will talk a lot about the acquisitions today, what kind of acquisition we have made and why. And I think when we announced these major acquisitions was a very busy week in global media with tariffs and everything, whatnot was going on there. So I think these 2 acquisition cases deserve a little bit more time today. And hence, we have booked that time and also have Jan here to talk about Team Verksted and the Repair and Maintenance business. As per usual, I will walk you through the main events of quarter 1. Thomas will deep dive on the numbers and to explain the developments. There are a few events after the review period, most importantly, acquisitions. And then we have this focus on Repair and Maintenance business, as Jan is going to present. Then one slide on outlook '25. How does the '25 look like? And then as a summary, Relais Group as an investment. And then as usual, we always have the questions and answers in the end. And you can submit the questions for those of you who are following this live. If I remember correctly, there's ask a question button that you can submit or submit a question, you will find that. And then [ Heikki ] here will collect the questions at the end. Good. This has been a marvelous journey. I mean, if Relais Group was founded in 2010, and here, we have history from 2013. And on the right-hand side, you can see an illustrative combined '24, where we have combined the '24 results with the recently announced acquisitions. So with those acquisitions realizing and being closed as planned, we will have reached a turnover bar of about EUR 400 million and then are getting close to the EUR 50 million target that we have set for ourselves. So this is a huge leap. And in, let's say, less than 10 years, we have really, really, really grown faster than many other companies in the Finnish stock market. And we have made over 20 acquisitions during the last 5 years, making Relais into a true European platform for future growth. So this is a fantastic story, and we will tell you more about how we plan to make this story to continue. But this is a truly Nordic company and now even a European company, which is really -- I'm really glad for this development. And also, when it comes to the acquisitions, what we are talking about later, I want to express my special thanks to the acquisition team and all the people who have contributed in making these things possible during quarter 1 and then announced later after the quarter ended. You have seen this chart before. And for those of you who have seen it, I mean, you don't -- you can stop listening for a while and get a cup of coffee, if you want. But I think there are people also following this presentation who do not know Relais Group as a company. So what do we do? We are a competent compounder focused on the vehicle aftermarket. And the vehicle aftermarket is where you can really make a profit in this vehicle business. I mean you don't, in all honesty make a lot of money by selling vehicles or manufacturing them. We all know that, although it's, of course, an important business. But the value creation potential is the biggest in the aftermarket. Whatever you do with a vehicle, you serve it, you maintain, you repair, you equip it with better lights or electrical equipment. That's our focus area. And that's where we are good at, and this is our focus. The market -- and this is now only focusing on the Nordic market, so let alone the European market. So the Nordic and Baltic markets, 20 million vehicles, stable, growing market. It's growing all the time. The value of spare parts and components is driving value because they are getting more complex and hence, also more, let's say, valuable and expensive by unit. Electrification offers new exciting possibilities for us and we are prepared for that part as well, although it's not advancing as quickly as sometimes you can read from the media. E-commerce is increasing and the last mile deliveries are getting more frequent and needs a lot of service and equipment. And then the digital disruption offers new opportunities to talk with the customers and find new distribution channels with that. So we estimate the market is only in Nordics about EUR 20 billion. So there's loads still to -- lots still to gain from that market. How does the group look like today? It consists basically of 2 major parts, Technical Wholesale and Products, and then, Commercial Vehicle Repair and Maintenance. And the Commercial Vehicle Repair and Maintenance is roughly 35% of net sales after quarter 1. And the rest, Technical Wholesale and Products is then 65%. And the Technical Wholesale and Products can be divided into 2 subgroups, spare parts for heavy commercial vehicles and passenger cars in Finland and Sweden, and then, Lighting and Equipment for all types of vehicles, predominantly commercial vehicles, which is 38%. And we also have quite a number of own brands. And as you can see from the map, it's part of our culture that when we acquire companies, it's not one size fits all. I mean you don't see a Relais name on the roof of basically the companies. Where it makes sense, we always keep the name and the culture and the identity of the company because that's the face to the customers. But we also -- we are not shying away of putting together some companies. We have done that in Sweden with [ Lastvagnsdelar ]. In Denmark, we have combined 3 companies into 1, but still the phase is the same as it has been or Ahlqvist in Finland or Skeppsbrons in Sweden. So it's not a mantra for us that we have to find one name for everybody. How do we intend to grow? I mean Relais is a growth company. We intend to grow also in the future. And you can consider this as a kind of pyramid where the bottom is the organic growth. And on the organic growth, our target has all the time been to grow faster than the market, above market growth by utilizing synergies and the focus that we have and the large network that we have, taking a larger part of the value chain, quite simply. We are smart when it comes to pricing and pricing is everything when it comes to wholesale and even on the repair and maintenance. You need to be following what's going on in the market. And there's a lot of intelligence needed and systems that you can take support from having the exactly right price, not to miss the deals and also to have a healthy gross profit. Diversifying customer base, we still have pockets in the market that we are not reaching out to yet. We are looking at expanding product and service offerings. That's still one way to grow in a classical way and new vehicle types. There are still vehicle types that are growing, and we are not yet strong there. I mean you take the whole defense sector, it's projected to grow vastly in the future, and I think we can do still more on that sector. And the next level in the pyramid is the way you do things, operational excellence. It's the small things. And I think Jan will also in his presentation talk about why are the small, even the details that look very small, why are they important for the running of an effective and efficient business and profitable business. We strive to continuously enhance the operation. I know it sounds like a cliche, but we really do that. We measure. We have KPIs. We measure between the companies. We benchmark the companies, have league tables where we can see who is doing on what level, encourage the companies to learn from each other. Procurement is also very crucial. And once you start to be a company of our size, you really get clout and power for the purchases and people will listen to you in a totally different way when it comes to suppliers. Working capital optimization, Thomas will touch on that. As a wholesaler that we still are in 1/3 of our business, you could say it's really important to keep an eye on the working capital, not to tie too much. I mean, it's a function between service level and tying capital. So you need to be smart the way you tie capital into the business. Then bolt-ons in existing business areas, we are a platform that consists basically of 3 platforms. So each of the 3 platforms that we have, whether it be then the spare parts or Repair and Maintenance or Lighting and Equipment are producing self leads and bolt-on acquisition cases. And that's the beauty of this construction that we have created. We can look at the geographical expansion. We have done that recently to The Netherlands and Belgium. We might be looking at critical competence, let's say, there are some kind of software-related, vehicle-related companies that we feel that we need to own. We can be looking at that type of stuff. New products and services that we don't currently have without giving more details, but there are still pockets in the market that we are looking at, that we are not currently operating in and then new vehicle types tying into the organic growth, but also buying ourselves into the defense sector, just giving that as an example or whatever agricultural sector that we are not yet very strong in. And then comes to the top of the pyramid, that start to be transformative deals, new business areas within the vehicle aftermarket or then transformational M&A in existing business areas where the Team Verksted, I think, is on the verge of being a transformational M&A. So we have loads of different opportunities to still grow, whether it be organically or by acquisition. And we are already on the European scale, a really, really, let's say, important consolidator in this business and a scalable platform with strong growth potential. So Relais is a growth company. I think it's very important for everybody to kind of understand that and see the projection for the future. We intend to grow also in the future. Right. Then looking at quarter 1, ready for the next level. I mean, it was a balanced quarter according to the expectations. I think the -- I don't want to overplay the weather factor here, but it does play a role, especially for Finland and Baltics, having that type of products that are, let's say, related demand-wise to the extremely cold weather. It's not enough. It's 1 day it's minus 20 or another day it's minus 5. But when it starts to be weeks and weeks of cold weather as it was last year, you sell a lot of batteries and chargers and boosters. So that gives you the kind of a cherry topping on the cake, if you will. And now it was very warm weather in this quarter 1. So it actually hit Finland and Baltics, not so much Sweden. The gross profit rose simultaneously because of the business mix. I mean, Repair and Maintenance business, the weight of that business grew, and Thomas will show some more exact numbers on that one. And then as a result of this, let's say, product mix change, the boost that we didn't get, the EBITA declined with 5%. But still, bear in mind that this was the second biggest -- second most profitable quarter 1 that we have ever had in the history of the company. I don't want to dwell too much on the numbers because Thomas will recap them later. Let's say, stable net sales performance versus last year's exceptionally high quarter. Comparable EBITA, 9.2%, so hence, the minus 5%. Earnings per share grew very much, and Thomas will explain the exchange rate effects on that because exchange rate has a big effect on these KPIs. And then the ROCE, the return on capital employed, 21%, which is on line with what you would expect from a compounder and return on equity was 19.1%. So getting to a very high level, of course, then partly relating to the currency rate effect. Then I just give a few -- add a little bit more color on the business areas, what happened in quarter 1 is that, I think, the big picture is that the Scandinavian units were generally in line with last year. And I think it comes partly from the market factors and partly from product mix factors that the Swedish companies are not that dependent on the cold weather, cherry topping, as I was explaining. So on a good level. And I would also like to point out that the Finnish and Baltic units were still on a high level, even if they were negatively affected versus the exceptionally high quarter 1 that we had last year. So don't take this as a kind of -- it wasn't that negative, but it was mathematically negatively affected. One, let's say, thing that we were very glad for is the recently acquired workshop equipment business in Norway that really had a strong start of the year and the local car dealers have invested quite a lot in rebuilding their workshops. And hence, that is a big amount of projects going on there and also partly to the defense sector, which are repairing their workshops. Right. So I mean, as I explained in the beginning, Finnish and Baltic wholesale companies have a higher share of product groups that are, let's say, sensitive to the demand changes due to the weather. Lighting, again, a strong positive quarter, especially for Strands, where the export-driven success still continued, 4% increase on net sales. And especially, I'm glad that the online business, although it's fairly small was a positive contributor in the quarter 1. It's not the highest peak season of online business during the year, but that was very positive to see. And so, greetings to Rovaniemi and Sweden for the teams. And also, the Optibeam brand that we have in Startax for the lights was doing fine, but I think Strands was the driver of the growth this time. Repair and Maintenance, Jan will tell more about the strategy, but I just want to recap that this was one of the, let's say, the strong performers in quarter 1, where the growth came predominantly from the acquired businesses. We acquired M Ahlqvist in Finland last year and also Team Verkstad in Sweden, not to be mixed with Team Verksted, although they belong to the same group, but this is in Swedish, Team Verkstad. Strong contribution to the sales. And the customer demand remained at previous levels in both countries in the big picture, I would say, although I think we took some market shares as well as a result. I'm happy for the acquisitions we made last year with Ahlqvist and Team Verksted, and they have fully met the expectations which we had when we bought them, although there's still synergy potential and growth for both of the companies. And I still want to welcome the teams warmly to join Relais, although, okay, it was already announced last year, but you are still the newcomers, I would say in the group, but really strong performance. So thank you for that. Yes, sales by segment. I think the one offtake from this is that the Scandinavian segment in quarter 1 grew already to almost 60% of the total business. So this is also a huge change looking back 10 years in the history of the company. So from a, let's say, purely Finnish company into a truly Nordic company. So this is an evolution. Business area, I already mentioned in the beginning that the weight of the Commercial Vehicle Repair and Maintenance business grew to 35%. And then lastly, the Product groups, not really huge changes apart from the fact that the spare parts had a small decline and the Repair and Maintenance went up to the 35%. So fairly even distribution of the businesses. Then a few words about the financing as a compounding company. Of course, financing is crucial and important to us. We announced on the 28th of March, signing of a new EUR 140 million long-term financing agreement with our main bank with a maturity of 3 years with 2, 1-year extension options. The financing package consists of EUR 110 million multicurrency term loan, a revolving credit facility of EUR 10 million and then an uncommitted term loan facility of EUR 20 million, which is then to be used for acquisition purposes, that EUR 20 million. And then the revolving credit is then for general corporate purposes. We have a really, really good cooperation with our main bank and get a lot of strong support from them, including also the additional bridge loan that we were granted to finance the Team Verksted deal. So this kind of deep partnership with a financer is always very valuable and gives us good potential to grow also for the future. A few words about sustainability. You might be aware of the European Sustainability Reporting Standards, ESRS, and we are, of course, following that directive and the standards and also the Finnish Accounting Act. And we published our sustainability report in connection with the report of the Board of Directors in March. And during the first quarter of this year, we have continued planning our development measures relating to the sustainability and more, let's say, on a concretic level, what do these efforts include, among other things, the road map for climate targets, and we expect to be completing that during the first half of the year or beginning of the second half of the year. Then I will pass the word over to Thomas to talk you through the financial part. Please, Thomas.

Thank you, Arni. Yes, we will go through the customary package. I will not so much dig into the net sales and EBITA development. Arni pretty much elaborated on that. Perhaps a bit more into detail on the EBITA development that the EBITA decreased slightly in both businesses, more in Technical Wholesale than in the Repair and Maintenance. And then as usual, we always comment on the impact of converting the Swedish krona business and that impact to the euro group EBITA. And there was -- as the last quarter, there was no impact on that -- on the profitability. So purely kind of business development related EBITA this time. Then we go to gross profit and gross margin. As Arni indicated, it has improved a lot, and it basically comes from the increased weight of the Repair and Maintenance business through the acquisitions and also through the more sustainable sales development in Q1 compared to the Technical Wholesale and Products business. But it's also very important to note that the gross margins also increased separately in both businesses. So it's not only the mix, it's also the development in the individual businesses. So I would say really -- and you see the chart here also that's really consistent long-term development, both on the gross profit and gross margin level. Operating expenses, if you say that the gross profit improved through the sales mix and the business mix, then also this one, here, you see that the OpEx increase is also due to the acquisitions in the Repair and Maintenance, which has a lot of mechanics and is kind of personnel expense heavy business. So that's pretty much also here a business mix impact that increase, but of course, also cost inflation impacts, but very much in control this KPI also. Net working capital. This time if you compare to the last quarter in '24, as Arni said, we had a really cold winter and now the business had prepared for a normal winter. But a mild winter came in, which meant that we have had a bit higher inventories at the end of Q1 than perhaps expected, but they were at the same level as at the end of the year. And this is also seen in the inventory turnover measure that we see that inventory turnover declined a bit compared to the previous quarters. But then again, net working capital turnover improved. So all-in-all, here, a fairly reasonable development, but the mild winter caused the inventory levels to be higher than expected. But this will, of course, even out during the coming months and quarters. Cash flow, no big impacts here. Profitability impacted quite squarely. No big differences from the EBITDA. But then again, the improved and increased inventories impacted the change in net working capital so that there was a negative cash flow from net working capital of about EUR 8 million compared to EUR 6 million in Q1 in 2024. Cash flow from net financials, there was a net impact of negative EUR 3 million, which is about the same level as last year. Here, we should note that due to the new financing package, we paid off the accumulated interest in Q1 as opposed to usually paying the interest in Q2 in June. But then again, we also had somewhat less tax payments due to kind of different accrual and payment structures in taxes. But on a whole kind of even level, net financials was quite at the same level as last year. Cash flow, cash conversion came down pretty much also having to do with the lower cash flow -- free cash flow against EBITDA. Here's the cash flow summary. I won't go so much more into this. Perhaps the last box here on the right, we see that cash flow from financing activities was EUR 18 million. And this comes, of course, from that we paid off the old term loan facility at the end of March, and then we raised the new term loans, which were about EUR 17 million higher than the paid-off old. And these proceeds will then be used for kind of paying the Matro acquisition when that is closed. And we also took a EUR 4 million drawdown on the revolving credit facility for short-term intra-year cash flow needs. And then interest-bearing net debt. And here, we see what I just explained that the total loans from financial institutions increased to EUR 113 million compared to EUR 95 million last year. Lease liabilities were quite at the same level, a bit of an increase due to the acquisitions of Team Verksted and M Ahlqvist. But otherwise flat development there. So the gross debt increased to EUR 176 million, about EUR 20 million up from last year, as said. But then again, the cash and liquidity was higher at almost EUR 30 million. And we consider about EUR 5 million to EUR 10 million should be the normal level that we keep in cash reserves. So the rest was for financing the Matro acquisition. Net financials in the income statement. And here, we see that the net financial items as a whole was a lot lower than in the previous -- in the comparison quarter in 2024. And as Arni said, we had a lot of net FX gain in this quarter compared to a EUR 1.1 million FX loss in the comparable quarter in '24. And this has to do with that we have a SEK loan position that we have a SEK loan to our bank, external loans, but also the parent company has internal SEK receivables to subsidiaries. And this always then fluctuate based on the difference between the beginning and end value of the euro to SEK. And this time, the krona strengthened a lot at the end of the quarter, which brought a bigger positive impact on net financial items. And this has -- this kind of FX gain had approximately -- it impacted the EPS also, improving it by approximately EUR 0.14. I won't reiterate these other than we see that the equity ratio was stable and a bit improved. Of course, also total equity improved. But here, in Q2, the dividend payment will go out here. So that will come down a bit in the second quarter. Total assets increased through the acquisitions and also through the higher net working capital. Yes, and gearing was on a significantly lower level than last year. And then the returns, as Arni mentioned, the return on capital employed and return on equity improved a lot, but the same goes for past one of the key metrics we have that means return on net working capital, and that was about 9 percentage points higher than last year. And here, it's key to remember then that the calculation EBITDA here is the last 12-month EBITDA. So that is always a long-term annualized metric. Yes, and the long-term financial target, of course, as Arni said, is EUR 50 million, and Arni elaborated more on that previously. Yes. Do you want to, Arni, take care of that one?

Yes. I will take care of -- yes, thanks, Thomas. So events after the review period, mostly focusing on acquisitions. I mean we are a competence-based compounder, and we know this business, and we always want to have a strong pipeline of promising companies to acquire. And the type of companies, I've said it before, what kind of companies are we looking at, companies that have a stable financial track record. We are not actively looking for distressed companies or turnaround cases. There might be cases that have had a recent turnaround, but then we need to get certainty that is on a stable, sustainable level. We want to have well-managed businesses with a highly committed team. It's really important. And then we need to see a solid future profit growth for these companies when they join Relais family. So I mean, we want to see growth. Some companies have a steeper growth projection. Some companies have a more stable depending on what type of business they are coming from. We did 2 major deals. So we announced 2 major deals in April, Matro Group in Belgium and Benelux. I will talk more about that. And then Team Verksted and Lastvagnsdelar in Norway, where Jan is going to walk you through the details. Acquisition pipeline metrics. This -- the ones that have followed this presentation, you have seen this before. Technically over 500 companies monitored that we are analyzing in the Nordic and Baltic markets and now also lifting the look all across Europe. And that boils down to having roughly 10 to 20 dialogues at any given time with different companies or owners or entrepreneurs. Of course, they don't all lead to deals, as you have seen. I mean, we historically have completed an average of 3 to 4 acquisitions per year, but you need to have the pipeline. Otherwise, I mean, if the percentage is historically, let's say, on that level, so you need to have your nets outside there to get the fish. And we are very picky. We want the best companies, and hence, it's more quality than quantity. But then I presume that moving forward and the machine gets more power, so to say, to look at the smaller add-on acquisitions when the platform gets bigger, then you get automatically more incoming and you get more contacts. So these 3 to 4 acquisitions per year is more like the medium and big-sized acquisitions. So it's not a kind of a limitation for us to stay there. Okay. The Matro deal, what was Matro all about? And I mean, it's a kind of new name for most of the people watching the presentation. With the acquisition of Matro, we took a major step into Europe, into Central Europe, Benelux and Germany, looking at the truck accessories market. And the truck accessories is a market that I think many people do not even think that it exists. But if you look at the picture, I mean, you can equip and you can personalize the truck, not only with light, you have sunscreens, you have horns, you have all types of equipment that the truck owner or the truck driver needs and wants to have because, I mean, that's his or her working place and who would not like the working place to be nice and good looking. So that's an amazing type of business that we get a good hold now with Matro. A well-established company, has a good market position in Benelux and Germany, a fantastic team led by Glenn Gils, who has founded the company, profitable, a good track record. They have their own brand called Nedking, which has a big potential in Europe and also in the Scandinavia and Nordic markets. This is a long-term customer and partner of Strands. We know them well, and we can support them also in the future. Actually, 3 companies, the Matro Group, Matro-Industrial & Truck-Accessories and SN Truckstyling in Belgium and then CTC, Car & Truck Care Nederland in Netherlands. So it's actually 3 companies covering the Benelux and German markets. What are the key benefits of the acquisition? Why did we buy? Why did we take this partnership with? Because I really strongly consider this as a partnership because you have to remember that Glenn is staying with a 30% share as a shareholder still in Matro Group, and he's really burning for the future growth and cooperation with us. So this will enable accelerated growth in the truck accessories market across Europe for Relais Group. So kind of, in a way, a new opening for us. Then we feel that together these 2 companies, Strands and Matro are better positioned to grow in the new market segments. So I mean, there's a lot of knowledge that the people have and the teams, then they can get into new market segments, look at different geographies in Europe and then stronger together. Then Nedking, it's still, I would call it a start. It's a good start. A lot of nice truck accessories, strong brand, a lot of potential for the future growth. And we can utilize our own distribution networks, our own companies as well to sell Nedking in the Nordics or then to introduce new products under the Nedking brand. So we have had a strong lighting brand. Now we also have a strong truck accessory brand. Then another point that Strands is unique and so is Relais -- a lot of other Relais Group companies when it comes to sourcing. The sourcing network that we have for the lighting and accessory production is great. And then I think Matro, who has not had so much organizational resources to focus on this one will gain a lot by working together as part of the Relais Group. Then I would ask Jan to tell more about the Repair and Maintenance business. Go ahead, Jan.

Thank you, Arni. Just to shed some more light on our Repair and Maintenance business. So first of all, it's good to bear in mind that in the beginning of 2021, we didn't have any workshops. And now upon closing of the Team Verksted deal, we will have grown to -- from 0 to 61 workshops, which offers unmatched coverage in the Nordics. We are already the biggest operator of independent commercial vehicle workshop in the Nordics and acquiring Team Verksted will only strengthen our position. And we are not stopping here. There are still lots of interesting and potential acquisition targets in the Nordics. Then briefly to recap the signing of Team Verksted deal, which we announced a few weeks ago. It consists of it -- and by the way, it was already the second strategic acquisition we announced this year. Team Verksted consists of the commercial vehicle repair and maintenance chain Team Verksted and heavy spare parts specialist wholesaler, Lastvagnsdelar LVD. Team Verksted, which is the workshop business, it operates a nationwide multi-brand workshop chain, which offers maintenance and repair services to trucks, trailers and buses. And it has 21 own workshops and 3 franchise workshops across Norway, whereas LVD distributes spare parts and accessories for the heavy vehicle sector, specifically for trucks, buses and trailers in Norway. And last year, in 2024, the consolidated revenue of Team Verksted was approximately NOK 834 million. And we are extremely excited about the strategic opportunity what this deal will present us. Then shortly about the key benefits of this acquisition. So as already said, this will grow our network in the Nordics, in Finland, Norway and Sweden to 61 workshops, which enables unique value proposition to our customers. The acquisition unlocks material synergy potential of up to an estimated NOK 30 million annually over the coming years. Naturally, it will take some time to materialize the synergies. And we expect these synergies primarily to come from sharing of best practices and resulting operational efficiencies in the workshop business, shared purchases and internal sourcing. And we have had great results across the group in these areas. So we are, of course, excited to replicate this success also then in Norway. Then in a similar way that Raskone is a platform in Finland. STS is a platform in Sweden. Team Verksted will serve as a Norwegian platform for our further acquisitions in the workshop sector. And through the acquisition of Lastvagnsdelar, Relais, we get a bigger share of the entire commercial vehicle value chain, and we get a new channel to distribute our own products in Norway. Our task or job in the Repair and Maintenance business is to maximize our customer success through uptime. So uptime is absolutely critical in the commercial vehicle sector where every single minute of downtime results in loss of revenue to our customers. And these are a few core strengths that have been and are the key drivers for our continued profitable growth. The first one being comprehensive fleet coverage. So we provide end-to-end services to all types of commercial vehicles, whether it's a truck, bus, trailer, superstructure which is built on top of the truck chassis or LCV regardless of the make, age or model. So we -- our workshops serve a single point of contact to all the repair and maintenance needs of our customers. And as I said, with soon to be 61 workshops across the Nordics, we will ensure that our services are always close to our customers. Then which is really important is the fact that we know how to operate workshops and how to run workshops. We have proven framework for workshop excellence. And in the very center or in the very core of our framework and our workshop process is customer and customer satisfaction. As said, we understand their -- how crucial uptime is. We understand their need for rapid response and rapid repair times. And we have a comprehensive toolbox for turning good workshops into excellent workshops and this is crucial -- this knowledge is crucial when we are acquiring new companies, and we know how to -- how we can make them better, even better ones and how we can serve the customers even better after the acquisition. And then as in any service-based business, success lies in the details. So even the smallest process improvements contribute to enhancing efficiency and customer loyalty. And then on flexibility and agility, all our repair and maintenance companies, they have lean organization and that enables us to -- enables a fast response to customer needs, new opportunities and market changes and also enables us quite fast to develop new services that are still part of our core business in repair and maintenance, and create added value to our customers. So these have been the main key drivers, why we have been able to take market share and have been able to continue profitable growth even in rather challenging economic environment. And then I think it's good to remind that what is Repair and Maintenance role in Relais. So Repair and Maintenance or workshops are one of the group's 3 pillars of strength, other 2 being brands and wholesale. But first of all, Repair and Maintenance is fairly defensive and resilient. We -- Repair and Maintenance, it provides stable revenue stream even in challenging economic times since repair and maintenance is essential regardless of the market conditions. And I think this is something we have been able to prove during the recent years. Then also Repair and Maintenance provides or generates strong cash flow through quick turnaround times, ensuring high cash conversion. And when we combine that one to capital-light business model that we have, that supports Relais' profitable growth. And then, of course, on the last note, workshop act as distributors for Relais Group brand and wholesale companies. Thank you. Back to you, Arni.

Thank you, Jan. Thank you. That's a very good presentation. And I think we might have not been too good at explaining why are we focusing on the workshop business. And I think Jan described this very -- in a very good way. And I hope all of you listening kind of got the picture why is this a good business. And I mean, we -- as Jan said, we really know this business. And -- we can't show you all the trade secrets, of course, but we have a good recipe of running good workshops and kind of a methodology of when we take over companies that we can really count on the synergies that we have analyzed. So also, I would say that Relais Group is a good home for any workshop or, let's say, wanting to join our forces. So this is a safe and good home. And also, again, want to wish the Team Verksted and Lastvagnsdelar people warmly welcome to join when we then finally can close the deals on that one. Then management team, we did some changes also during quarter 1. I think it deserves some focus as well. What we have done is that we assigned specific responsibility areas to 3 people, 3 musketeers, as I call Johan, Juan and Jan, half-jokingly. Johan is running Strands Group and is now also heading the development of the whole lighting and product business and looking at the brand development as well for the -- across the group and is already bearing fruit with increased cooperation between the Finnish and Swedish units on lighting. Johan is also supporting on the private label production or the house label production we have for other product groups. Juan, a long-standing Managing Director of Scandinavia, with a very, very solid background from wholesale and spare parts is now looking at the development of the whole -- Technical Wholesale business that we have in the Nordics and already there, a good amount of cross-fertilization going on with the companies. And then Jan, who you just met here, is heading the development of the Commercial Vehicle Repair and Maintenance business area. And why we did this was to get more focus on developing these business lines and the 3 thrusts of growth that we have in the company. And we are also participating in the local Board so that Johan, Juan and Jan are kind of across the geographies getting exposure to this company. So this -- I have high expectations for this. And also to speed up the decision-making process. And then at the same time, Johan, Juan and Jan are actively participating in the acquisition cases. So it's not only our eminent acquisition team who is doing that this is now the additional acquisition team. So this is really going to be good. And here, you see the whole management team. I make my best to get also some generic balance on this one, but currently an all-male management team headed by me. And then Johan and Thomas, you have seen the CFO, Juan and Jan, I just presented and Sebastian is running the M&A and Business Development, and Juri joined last year in summer to develop our Compliance, Legal and HR, let's say, parts and has done a fantastic job. So I'm really happy for this young team. Then outlook '25, how does the rest of the year look like? And as Thomas already reiterated, we have an official long-term target. Although now it's no more really long-term target. This was set a few years back in time. We are aiming to reach -- we aim to reach a run rate pro forma EBITA, comparable EBITA of EUR 50 million by the end of this year. So what does this mean? What is run rate? What is pro forma? This means that combined with all the acquisitions we have done or will do this year, put them together the full year effect, that's the EUR 50 million target. And as you have seen, with closing the Matro, Team Verksted, Lastvagnsdelar deals, we will have added approximately EUR 9 million more EBITA upon closing of these deals, coming a platform of over 1,600 professionals in 9 countries and net sales about EUR 400 million. So this is really transformative steps we are about to take this year. And then again, looking at the full year effect of this and potentially other acquisitions, so we are kind of on the way to do what we have promised. And that has always been very important for us, what we promise we keep. We are not stopping here. We are looking all the time at different interesting acquisition cases and aim to produce even more deals. And the platform is already -- I won't say it's self-sufficient or self-feeding, but it's really -- we can see the effects that -- there's a certain bandwagon effect when we are on the progress that people want to join forces with us. We have super professional teams, working very hard to boost our organic growth, the base of the pillar and to realize the untapped synergy potential. That's the part of the functional excellence that the teams are working, not only to sell more, but also to sell in a smarter way and really find the synergy potentials that we have between the companies. So we are ready for the next level of growth. Finally, summing up before the -- I can let you loose on the questions, Relais as an investment. Again, I've shown this before. There are not new items here, but I just want to let's say, emphasize and reemphasize the uniqueness of Relais as a platform, as a Nordic company. You don't see other companies so focused on the vehicle aftermarket. There are other compounders, yes, especially in Sweden, but we are unique. We are a competent compounder with a clear focus on the vehicle aftermarket. It gives us a unique competitive advantage. We have proven a track record of successful M&A in a highly fragmented industry with significant acquisition opportunities still left to explore. The markets are growing and especially now when we're also looking at Europe, large, resilient, as Jan was also pointing out, the fact that why is the Repair and Maintenance so beautiful and also generally the aftermarket is the resilience and the defensive nature of the markets. We are already now proving the scalability of the platforms. We are getting more add-on cases all the time. And we know the way we do the business. And hence, when you know what you're doing, the possibility that you can really synergize and get a higher profitability than otherwise is, of course, always higher. We have a track record of consistent, strong and profitable organic revenue growth as well on top of the acquisition growth and a high cash-generative business model. That feeds again, our possibility to make additional acquisitions. We also are very, let's say, overhead lean company, a decentralized model, and we want to emphasize and enhance the entrepreneurial culture and value. So this is -- we really burn for this business, a lot of passion and entrepreneurship in everywhere I look in this company. So for that, I'm super glad. Then finally, finally, I already promised to quit, but this is the last page. If you look at the shareholder -- total shareholder value creation, Relais has been an extremely good investment from day 1. If you had invested EUR 1 in this company when we were introduced in the stock market, that euro would have now grown to EUR 2.21 with a total shareholder return, including the dividends, outperforming the OMX Helsinki 25 index with 2.7x. Bear also in mind that we have returned EUR 35 million to shareholders -- to you shareholders in dividends and share repurchases during -- since the IPO. And this solid foundation that we have built is a good base to continue to grow either organically or by acquisition opportunities. Now finally, the questions and answers, and I can welcome Thomas and Jan to join in case we have questions that are also directed to you. So Heikki, I hope you have a lot of questions.

Yes, indeed, there's quite a few questions.

Good.

And you have time after 11:00 also?

Yes. Sure. If the studio is free, we are.

Definitely.

[ Tony ] wants to know, has Relais prepared for the possibility that warm winters will become more frequent, which would naturally reduce the demand for certain type of products?

Thank you, Tony, for the question. As I pointed out, the weather is important, but it's not that important. It's more like the -- as I -- well, I don't know if cherry topping is the right word, but it's like the additional nice good benefit that we can get when it's really cold. But it's not that super, super on a full year level. Things will even out. I mean even if we were preparing to sell a lot of batteries, it was a warm winter. Now we can sell the batteries also in the summer. So it's not really -- yes, we are prepared, and it's not rocking the boat too much.

[ Seppo ] wants to know, could you outline the impact of the Swedish krona on the results and how investors should take this into account going forward?

Yes. I think Thomas can answer that. But just as a layman's answer, you have to differ between the profit and loss and then the balance sheet-related factors. But with this, I bridge over to you, Thomas.

Yes. And as Arni said, I mean, looking at the EBIT level, there, of course, is the average change in the krona impact through that we convert the krona business profitability to euros. So that's the one impact. But then the second impact that impacts the net financial items is that we have SEK-dominated loans to our bank. And then we also have a holding company in Sweden to which the ultimate parent company has lended funds in krona. And as this internal loan receivable is higher than the external loan to the bank, then we always at this stage have different impacts of the krona when you convert the krona loans and loan receivables to euro, you have a difference in those, and this impacts net financial items. In the future, gradually, this kind of different levels of external SEK loan and internal SEK receivable, we will pay down the internal SEK receivable in the future, gradually making them to match, which will then eliminate this impact on net financial items and of course, on the EPS.

And would it be fair to say that when we are looking at balance sheet-related KPIs, then it's comparing with, let's say, the end of the year --

Exactly.

-- currency rate versus the end of the quarter currency rate where there was a big reinforcement of Swedish krona. But when you compare quarter 1 versus quarter 1 on the profit and loss, Swedish krona was even-steven.

Yes.

Complicated answer. I hope it was enough. If not, please recap that.

Seppo continues. How do you view the financing situation for acquisitions now following the recent purchases?

Yes, good question. We still have gunpowder left, as we just explained on the financing. Then I think, of course, we have the bridge loan for the Team Verksted at the moment and which we as also announced, will be repaid with equity or equity-like financing. I think transformative deals would trigger some type of need for equity enhancement. But for this year, I feel that we still have good possibility to do acquisitions with the financing package that we have currently.

And Tony has one more question. Could Relais also expand its Commercial Vehicle Repair and Maintenance business into Central Europe now that the door to that market has been opened?

Definitely. I mean it's probably nothing that we are really actively pushing, but we are looking at the possibilities of adjacent markets as well. I wouldn't -- this is my view on it. I wouldn't be too exotic there. But I mean, let's look at the adjacent markets like Northern Germany or Poland. Definitely, we would be interested in looking at them. But we still have white spaces in the Nordics as well. But it's not a no, if I say it in that way.

Petri Gostowski, Inderes. We've seen from other companies that the Baltics are doing worse than Finland, which is then at least somewhat weaker than, for example, Sweden. Is this your assessment about the markets geographically?

I'm not sure I followed -- if the question was whether the Baltics are specifically weaker than Finland or Finland and Baltics combined. But I choose to answer the Baltics. I mean Baltics is a very small business for us currently. It's about EUR 7 million turnover, mostly coming from lighting and equipment. So when we are commenting Finland and Baltics, it's just a segment it's called Finland and Baltics, but the driver is Finland. So whatever happens in Finland, is the big thing. And now for quarter 1, isolated, since Finland has the Finnish company, start the wholesale business. Now I'm talking about the wholesale business in Finland is predominantly they are good in electrical equipment and spare parts. That's where we took a hit. But I mean, Baltics is very small for us. It doesn't rock the boat to any direction. Although the team is doing a fantastic job. So don't get me wrong, but it's still a very small business for us.

Petri continues. Can you describe where do you see the synergy potential in M Ahlqvist and Team Verksted businesses? And what concrete actions have you taken to bank these synergies?

I think we have a fantastic guy to answer that question here. Jan, please go ahead.

Sure. So we acquired M Ahlqvist expanding into trailer business was really strategically important for us, and we have already been able to achieve great synergies in Finland with Raskone and expertise of M Ahlqvist. And of course, I think what I told Arni also touched upon is that the continuous benchmarking we are doing between the companies, and we have had excellent results in repair and maintenance and also in the group across benchmarking and how we can -- even the smallest improvements have a huge impact on operational efficiency. And I think this benchmarking is extremely important factor in Norway with Team Verksted. So how we can utilize the best practices and we know how to run workshops. And as I said, we are excited to replicate the success and experiences in Norway.

Petri continues. Is the cost of the bridge loan on a similar level as your other financing facilities?

In the big picture, yes. Of course, there's a time effect on that. But let's say, on an average time span that you would look at the bridge loan, yes, there's no major deviation to any direction.

One more from Petri. I recall that the cold Q1 in 2024 also impacted the growth in Q2 2024. Can you confirm this? And do you see the market demand growing in the short-term?

That's -- thank you, Petri. You have a good memory. This has been the case, especially in Finland, where we have noticed that when the wholesalers' customers have had a good start for the year, it kind of continues somewhat to April. Same can be seen not necessarily the cold weather, but the effects of the repair needs for certain type of vehicles pop up only after the winter. I mean, when you change tires and you have to do a brake jobs for the companies -- no, for the vehicles. I can confirm to a certain level that this has been the fact. Although we are not really seeing that effect negatively at the moment, I mean it's more like it has had a positive effect. So the demand has normalized, I would say, if I'm looking at the markets after the quarter 1. But there has been a correlation, yes, especially for Finland in the past.

Then Joni Sandvall from Nordea. Have you seen any changes in the market dynamics since Q4 report and how you expect market demand to develop during the rest of the year?

Thank you, Joni. And in the big picture, not really too much. There would be small items here and there. But let's say, in the big picture, not a huge change on the market environment, no. And again, the crystal ball department is really, really hard to say. There are some signs of the infrastructure building getting picked up again and logistics business is getting more wind in the sales. So I'm not too pessimistic at all about the macroenvironment, but who knows? I mean, who knows? But our projection and our baseline thinking is that it's a normal business year.

Joni continues. Have you -- how you expect your sourcing costs from Far East to develop in 2025? Have you been able to gain scale synergies in sourcing?

To a certain extent, I think I have to be very cautious. Now again, there's a lot of everything with the tariff negotiations and oil prices, but the freight cost has not increased. And I think our -- some of our producers in Asia have had extra capacity because of the lack of exports to U.S. So I think that gives us a certain more clout to work with our partners there. But I can't give any specific, let's say, number. But let's say, the sourcing cost has not increased. Whether it's going to go down, I can't project at the moment.

Joni continues. You are expecting acquisitions to close during June, i.e., leverage is set to increase in Q2. Ahead of refinancing of the bridge loan, how much financing room you have for further acquisitions?

Yes. I think it can be read from the announcements that we have made. I mean, there is this EUR 20 million uncommitted facility in the financing package. And then, of course, there is cash flow. And I would also like to point out that our playbook has all the time being to use our own share as one means of payment and also deferred payment like vendor loans and stuff. I think due to the weakness of the Finnish stock market and also maybe in the Nordics as well, we have not managed to use the share as much as we had liked to do, but we are wanting to use more shares in the future. So don't look only at the cash or the facilities, think also about the possibility to do majority deals like we did in Matro and also our dream scenario would be to find a strong entrepreneur who wants to join forces with us, take a lot of shares to align the interest. So it's not only the money. So we -- having 100% cash deal, yes, we have done them now, but it's not like the ideal structure that we have. So we have more than the eye can meet.

Then last one from Joni. Do you see possibilities for organic expansion of network within workshops or view acquisitions as the more potential way forward?

The acquisitions are certainly in a way, a safer and a quicker way. But having said that, we are also doing a certain amount of, let's say, relocating in one city to another side of the city like in Sweden, which is then a greenfield operation in a way, but it's not too much expanding. And I think, Jan, you have more details. But I think in the Swedish market, we have a couple of cases where we are building a new workshop, but it's not like -- it's more like replacing an old one in the city. So it's more probable that we will grow through add-on acquisitions than just greenfield. We're not excluding greenfields, but sometimes it's easier to find an acquisition target. You can shout if I am --

Fully echo you.

Then the last one, last question comes from Petri. Can you give some examples of the best practices you are looking to take to Team Verksted business from your other Repair and Maintenance businesses?

Yes. Let's see how open Jan wants to be today with our playbook. But maybe you can give some headlines of what type of things we would have.

Yes, sure. Probably I wouldn't want to be too open here, but it really boils down to very small details starting from that said, what kind of services we can provide to our customers that are still part of our core. Just to give a few examples that we are able now to manufacture tarps for trailers. We are able to provide our customer with tire sales, and we have started to refurbish engines, which is more cost effective and, in most case, also a quicker way to get a new engine for our customers. But in this business the devil is really in the details. So when there are lots of things that you do in a better way, that results in that you are able to provide better services to your customers and also you are able to enhance your profitability. That's in a way, a win-win situation.

And I think if I might add, we should not think that Team Verksted is in a way, they are not doing a good job. So that's not the case with benchmarking. It's more like how to make from good to great. So I mean, even Raskone has stuff that they have learned from STS and visa versa. So it's not like, okay, there's a problem child that we need to fix with a long list of things. It's more to make sure that we have a systematic methodological approach to fixing things. And if you have the discipline in there, then you will get the results when you start to measure.

And that's work you're never done with that continuous improvement and continuous work.

Yes, absolutely.

We actually do have one more question coming from Mika Karppinen. How do you see possible tariffs impacting on your lighting businesses?

At the moment, not at all. I think it's more a question what's going on between U.S. and China. I don't think -- well, I'm not in a position to start thinking about what's going on with a possible trade war. I wouldn't know. But there's no vision that there would be anything between E.U. and China. And that would be the only thing affecting us. It could affect from that perspective that if the trade between China and U.S. gets hampered, then probably we get more capacity from our suppliers. So that could be a positive effect. So currently, I'm not weighing in any negative effect of the tariffs.

Excellent. That's the last one.

Yes. Thank you very much, and thanks for bearing with us almost 1 hour or even more than 1 hour. Thank you very much.

Thank you.

Thank you.