Icaniwill AB (RVRC) Earnings Call Transcript & Summary

Welcome to RevolutionRace Conference Call, July 2026. [Operator Instructions] Now, I will hand the conference over to the CEO, Paul Fishbein; and CFO, Jesper Alm. Please go ahead.

Thank you, operator, and good morning, everyone, and thank you for joining us on this exciting day for RevolutionRace. We are excited to present the acquisition of Icaniwill [indiscernible] our first acquisition as a group and an important next step in the development of RVRC Holding. My name is Paul Fishbein. I am the CEO. Joining me today is -- for today's call is the group's CFO, Jesper Alm. I will start today with a very short introduction to RevolutionRace for those less familiar with us. And then I will move on to introduce you to can will. And after that, we'll cover the rationale behind adding M&A into our strategy and how this acquisition fits. After that, we can look at the transaction structure and how we see the way forward, and we'll finish with a Q&A. So first, and I'll try to make this very short RevolutionRace. So RevolutionRace is an international auto brand, offering outdoor products, mainly clothing, but also shoes, bags and other auto products. We operate with a D2C business model. That's important to bear in mind when we move forward in the presentation. And that means that we skip the middlemen and sell our products directly to our customers. And with our D2C model, we can secure our competitive offering and, at the same time, maintain industry-leading margins. And as a digital player, our brand is very much built together with our community on social media. We'll come back to that. And today, we have 2.4 million followers over on social media platforms and over 800,000 reviews on our site. RevolutionRace was launched in 2014, and we believe on Nasdaq Stockholm since 2021. I think this slide illustrates our international footprint. We operate 19 unique local web shops, reaching customers in around 40 countries and it's supported by 3 local warehouses and office in Sweden. We currently operate 3 physical stores also. In total, we have around 140 FTEs, which I think is a good illustration of how asset-light and scalable our model is. A quick look on our financial development up until March, the latest quarter results represented March '26, where we see that net sales last 12 months is at around SEK 2 billion. And also just as important, our growth has been highly profitable. Adjusted EBIT has grown to SEK 422 million on the same LTM basis with an adjusted EBIT full year margin around 21%. And we believe few companies in our industry can show this level of profitability. And that's something we are very proud of. Germany is by far our biggest market. In our Q3 DACH represented 59% of our net sales. Nordics represented 22% and the Rest of the World region, 18%. And this gives you a sense of how important Germany and DACH have become to our is a good example of relevant context why we see such a clear opportunity in Icaniwill's expansion into the same region. But so with that said, now let's turn to Icaniwill. So Icaniwill, today, it's a Swedish sportswear brand. It was founded in 2012 and is headquartered in Stockholm in Sweden. The whole idea of Icaniwill is built on the vision to inspire and really to be true to training in everything that they do. Products are primarily sold through a digital D2C first model and also -- but it is also complemented by wholesale channel. And like RevolutionRace, I will have built its whole brand together with a community, and they have over 620,000 social media followers. And more than 230,000 product reviews with a rating of 4.5 out of 5. On the numbers, LTM net sales per end of June, is reported estimated at SEK 470 million, and EBIT for the same period is estimated at SEK 73 million. Icaniwill's footprint today, spans web hubs available to customers in 10 countries, supported by 1 warehouse in Boras in Sweden and around 60 FTEs, all working in Stockholm. And they also work with many product suppliers in Asia and operate one physical retail store in Helsinki in Finland. So it is also a lean setup and very much operational and mirroring how we run RevolutionRace. If we quickly look at Icaniwill's products, of course, everybody is welcome to visit the company's website to get the idea of the full assortment. But it consists of an assortment within training, for example, tight, tops, shorts, pants foods, T-shirts and accessories. And we believe it's a well-developed and but at the same time, still expanding assortment, which gives room for continued growth. Icaniwill's net sales trajectory has been strong. We have here for presentation purposes, we have translated all the numbers to our financial year. And we expect LTM net sales as of June '26 to land around SEK 470 million, as I just mentioned. Growth has continued to accelerate. Q4 net sales is expected to reach SEK 124 million, which is up from SEK 95 million last year, and that represents growth of approximately 30%, which was also roughly the growth in Q3, so demonstrating strong growth momentum, which is promising. Margins have improved in parallel with this growth. Adjusted EBIT is expected to reach SEK 73 million for the full year, '25-'26. That is up from SEK 52 million the year before. And that means an adjusted EBIT margin for the full year of approximately 15.6 percent. And that's a step-up from past numbers. And in Q4, the EBIT margin is estimated at 16.3%, which is also higher than the same period last year, so showing scalability. Looking at the business mix. Geographically, Sweden and Finland and Norway together make up the bulk of sales with Denmark and Germany and the rest of year representing the remaining. But having said that, important to note, a faster growing sales. And on that note, what is interesting to note is the potential in Germany and in the whole DACH region as Germany grew over 50% in the calendar Q1 '26. By channel, Icaniwill is 87% D2C, but is also complemented by 13% wholesale and by gender, looking at the products, 82% of sales are female customers and 14% is male customers. So to summarize, this training category highly complements the RevolutionRace offering. It's a -- Icaniwill is a digital first and D2C aligned with high growth and solid profitability, thus, very similar to RevolutionRace. We believe they are best-in-class as a community-driven brand in the sportswear segment, and they are very strong in social media execution, which also reminds us very much of our own journey back in the days -- over the last couple of years, I should say. And we see great potential, obviously, mirroring our development from being founded in Sweden, but now accelerating growth in Germany, Austria, Switzerland and other countries in Europe. So that was an introduction to Icaniwill. Now let's talk about why we are adding M&A to our strategy and how we, through this acquisition of Icaniwill are taking an important next step in the development of RVRC Holding as a group. And may I just say to begin with, I think it is worth mentioning that we have always had a disciplined approach to capital allocation. We have been focusing on organic investments to develop RevolutionRace D2C platform across Europe. And it is also very important to underline that this acquisition will not, in any way, take away the focus on the core offering and the effort to continue the organic growth of RevolutionRace. But why do we believe this is the right thing, why is M&A relevant for us? We see M&A now as an efficient way to deploy and allocate capital into assets where our ownership can accelerate growth, margins and also generate return on capital. We believe that acquisitions can create new avenues for growth and thus can accelerate growth beyond our organic plan for evolution race. It can give us access to new categories and new customers, which increases the total addressable market, significantly also provide immediate presence in new categories. Size for us is very important and acquisitions give us economies of scale. We will simply have larger volumes and it is important we have a scalable business model. So scale is important. And as we create a stronger combined platform, and of course, we also see synergies. Further, we are at the RevolutionRace, we have a proven playbook that is highly transferable we believe, to adjacent brands. We have managed to grow RevolutionRace to SEK 2 billion with that playbook in many markets. And now we want to capitalize on our knowledge and help to scale other brands who operate close to us. Also timing is always important, and we think that now is the time to move forward, adding M&A since we now have an operational platform at disable and the balance sheet well positioned for acquisitions. And of course, valuation is important to manage. So that -- as that can also create shareholder value. And I can go on and mention other reasons such as diversification and so on. But I'll stop there and move on to the next slide and talk a little bit about the criteria that we have defined for potential M&A targets. And we have worked to define clear criterias for what we look for. First, that's why it was so important to mention in the beginning of the presentation, it needs to be a D2C business model with clear digital brand approach. That is a business model that we understand that our team has been working with for many years. So that is extremely important. The targets needs to have a growth profile, should be above 50%, and we can see that Icaniwill will right now have the momentum growing 30% over the last 2 quarters. Profitability should be in line with or at least have a clear plan or path to our group level profitability. Size-wise, we look at targets with revenue in the range of SEK 200 million to SEK 800 million. We are looking for brands within a product category that is adjacent to our own. One good example here is sports and outdoor, very closely connected categories. When we look at targets, valuation is, of course, very important. The operating model needs to be similar to our model and -- but also very important. It is important that culture fits and that target companies reminds us of our own entrepreneurial spirit. So having said that, when we look at Icaniwill, we clearly see that it meets every single one of our M&A criteria. Icaniwill is clearly digital first D2C a company with over 80% of our sales going -- being sold directly to consumer. And so digital first community. Growth-wise, it meets our targets. As I mentioned, we can see that the company grew around 30% in the last 2 quarters, respectively. Profitability at Icaniwill is good. Size-wise, Icaniwill, is right in the middle of our size range. and product category, gym and training apparel will functional materials is a natural adjacency of our assortment. Looking at valuation, the EV EBIT [indiscernible] is at 9.5x looking at the LTM numbers, but falls to 7.8x, assuming the full additional purchase price is paid, we'll come back to that. Operationally, shares very similar characteristics to RevolutionRace. It's e-commerce, it's asset-light and it's highly cash generative. And we know many of the people at Icaniwill understand the cultural fit I have personally worked many years with the CEO of Icaniwill. So we feel high confidence in that as well. One thing I mentioned, but I want to highlight is the scale of opportunity. The combined global outdoor apparel and sportswear market represent a total addressable market, which we estimate is 10x larger than RevolutionRace's current addressable market. So by adding both 2 adjacent product portfolios, we are meaningfully expanding our long-term runway for growth, and we look forward to deploy our D2C and community strategy into this even bigger market. So taken together, the combined group offers a compelling case, we believe. I have mentioned a lot of things already, but I think it's -- this is a good illustration of the step we now take. On an LTM basis, we are now size-wise combined roughly at SEK 2.5 billion net sales and SEK 0.5 billion in EBIT. We now have a combined platform within Sports and the outdoor segment with a digital-first D2C model that enables industry-leading profitability and both built on strong community relevance. And as a strong group, we continue to have a strong balance sheet with an asset-light and highly captive model which is something we strive to continue with. So to summarize, Icaniwill, is today in many aspects where exactly where evolution was 5, 6 years ago. And now we have the platform and the pan-European reach and the operational experience and D2C playbook to further accelerate the Icaniwill journey. So with that said, let's now turn to the transaction itself, and I will, with that, hand over to our group CFO, Jesper Alm, who can walk you through that.

Thank you very much, and good morning, everyone. So key transaction highlights. RVRC Holding is acquiring 90.1% of Icaniwill. The initial purchase price corresponds to a valuation of SEK 700 million enterprise value for 100% of Icaniwill on a cash and debt-free basis. There is potential additional consideration of up to SEK 175 million payable in 2 tranches with the first of up to SEK 100 million after the end of 2026 calendar year; and the second of up to SEK 75 million after the end of calendar year 2027. These tranches are based on EBIT performance and with a growth threshold. The initial purchase price implies an EBIT multiple of 9.5 based on estimated LTM financial data as for June 2026. And assuming full payment of the additional considerations, the total purchase price corresponds to an EBIT multiple of 7.8x. The transaction is expected to close as soon as possible. But in near term, in July '26, this current month and are subject to customary conditions. We expect the transaction to be EPS accretive already in a year 2027. The acquisition is financed through a combination of existing cash, available credit facilities and treasury shares. In a separate process, we have increased our revolving credit facility from SEK 600 million to SEK 900 million. This is for general working capital purposes. Icaniwill CEO will receive treasury shares RVRC Holding as part of the consideration, and these shares will be subject to a 12-month lockup. And the CEO, Anders Walstead is expected to join RVRC Holding Group management team following the completion of the transaction. [indiscernible] not employed by Icaniwill, 6 months lockup for the received RevolutionRace treasury shares. The remaining 9.9% of outstanding shares in Icaniwill will be held by its management. And with the main shareholder after RVRS Holding being Icaniwill's CEO, Anders. And this remaining shareholding will be subject to a put call option at the end of 2028. On the financing side, specifically, RVRC Holding is combining existing cash and part of our RCF revolving credit facility for the cash component of the acquisition and we will be using approximately 2.6 million treasury shares as part of the consideration. So post transaction, we will hold approximately 200,000 treasury shares still. At the end of March '26, as presented in our Q3 report, we had a net cash position of SEK 351 million. The cash component of the amounts to approximately SEK 467 million for 90.1%, including closing adjustments. And as an indicator of leverage, the bank net debt EBITDA as per the end of March '26, is approximately 0.3x. Hence, based on these amounts, RVRC still holding would have moved to a limited net debt position at that point in time, it's the acquisition had been made then. As mentioned, we are increasing the RCF by another SEK 300 million to a total of SEK 900 million, and this is for working capital purposes. The RCF matures in June '28, so there's no change. Importantly, our dividend policy of distributing 40% to 60% of net profit remains unchanged. And we will continue to weigh long-term financial stability carefully in relation to future share. Buybacks. So with that, I hand back to you, Paul.

Thank you, Jesper. And for wrapping up, I also want to take the opportunity and talk about how we intend to run this going forward shortly. So to start off with, we can say that our integration philosophy is decentralized. We will have a focus on best practice sharing between the companies rather than full operational integration. This picture on the left-hand side, I think illustrates that the companies and brands will operate separately on a stand-alone basis, but have the same owner in RVRC Holding. We believe that this approach preserves entrepreneurial drive local market and brand knowledge, both within RevolutionRace and Icaniwill. And it also causes less disruption to management, employees, customers and other partners. This structure is also a more attractive proposition for the Icaniwill management who see continuity. And yes, wants to continue. And we, of course, see that as a strong signal of commitment that management want to stay and continue to build Icaniwill, but also become a part important shareholders to RevolutionRace. And thus also believe in our joint future. So I think it's important to keep both brands operating on a stand-alone basis very much so that we can also keep brand identity and brand positionings and offerings so that it won't be noted so much by customers. So with that, that concludes the presentation for today. But so we are -- we are happy to take questions. So therefore, I ask the operator, do we have any questions?

[Operator Instructions] The next question comes [indiscernible] from DNB Carnegie.

Paul, Jasper. A couple of questions from my side. The first one, so this is your first acquisition, purely really an organic growth story. I'm just curious why you achieved M&A over launching your own branded products in this adjacent area this time as you have done, for instance, in Alpine and many other categories?

Victor, and yes, as I as I mentioned, the companies will continue to operate on a stand-alone basis and also look at adding new categories within the specific brands. But we believe that this is a very capital-efficient way of also adding new categories that is adjacent to RevolutionRace. But where we believe will not be sort of a big part of the RevolutionRace was offering. So we want to enter -- this gives us in an efficient way, an opportunity to to expand our market -- addressable market size without diluting the sort of core offering over RevolutionRace.

Understood. And then your fashion risk has been relatively limited before. How would you say that this changes with the inclusion of IcanIwill?

Yes, that is a good question and something we have discussed with Icaniwill team. And they are I would say that RevolutionRace is a very low fashion [indiscernible] maybe Icaniwill slightly increasing that, but not to a large extent. Icaniwill is very much focusing on performance and to be true to training and really stay within that segment. And having said that, not so exposed to a large extent of trends. They are very prudent in the entry, even if they have a small part of this one, that is leisure and lounge wear. So much more focused on performance and functional material rather than trends.

Okay. Understood. Third question here. Sales [indiscernible] is nearly EUR 40 million for yourself compared to EUR 8 million for Icaniwill. Do you see anything in Icaniwill's business model that would make it tougher for them to reach your levels of personnel efficiency.

Sorry, can you repeat that? It was a bit difficult to hear, sales, employee.

Yes, exactly. So you have a higher sales for employee compared to Icaniwill SEK 40 million compared to about SEK 8 million. Is there anything in canals business model that would make it tough for them to reach your levels of personnel staff efficiency.

No, not really. I think scale is important for us, and that is also one of the reasons we now want to invest in. I can we have I think their current momentum and their offering, looks very promising that we can see increased volumes and scale going forward. And if that happens, we have very high hopes that we will also see a higher degree of efficiency and as a result, also higher margins and yes, sales per employee going forward. So I think it comes down -- a D2C business is very scalable. So it will come down to increasing volumes basically. Asset-light infrastructure light, they don't own any factories or operate warehouses internally. So I believe that we will be able to see sort of the same thing that we have seen with the RevolutionRace margin-wise for the last couple of years.

The next question comes from Benjamin Wahlstedt from ABGSC.

Good morning. A couple of questions from me as well. First of all, I was wondering if you could expand on the M&A rationale here, please. What will you do differently to the previous owners to keep growing and perhaps also turn more profitable?

So our plan is not to deploy anything particular because -- or change anything that they have done. We acquired this Icaniwill because we believe that they are doing the right things. So we don't want to change anything that is not broken. What we do see, we do see that both companies can capitalize on best practice sharing, for example. I mentioned in the introduction, the D2C playbook that we have deployed, for example, in -- that we have seen work very well when doing our journey in Germany. We are now at over SEK 1 billion in sales in Germany, and that is something that we would like to try to capitalize on and try to see if we can mirror for a brand that is operating in a category that is closely connected to our category. But sort of marketing strategy wise is very close to what we do, focusing on community social media platform marketing and so on. So I think that the big upside lies much more in best practice and knowledge sharing. And of course, scale is is important, we will be able to do some joint negotiations with different kind of suppliers and partners. But we have been very prudent in calculating on such synergies, but I think it's obvious that we will try to realize some of those by only negotiating together.

Okay. So correct me if I'm wrong here, but negotiating joint suppliers or purchasing that would be limited to things such as last mile and payments, right? I assume [indiscernible] set of materials and...

Yes, last mile is a good example of logistics as a whole. Payment is maybe another good example that -- where we can do joint negotiations, but at the same time not disrupt operations.

Perfect. Could you also talk us through what has been driving Icaniwill's margin in the last 2 years. And I'm referring to the move from 9% margins to close to 6%.

Yes, good question. I think it has been a combination of getting more efficient as a whole. Assortment-wise, I think they have done a good job and got some payback out of that. But I think end of the day also comes down to scale. They are simply much bigger. And I think part of it is a result of economies of scale. Maybe Jesper want to elaborate also a little bit on that.

Adding to that, procurement strategy resulting in an increased gross margin has been successful product assortment development and procurement. So that is also a contributor to increasing profitability. So scale and economies of scale in both operating and procurement are key contributors.

Perfect. We can sort of back out the implied 2027 EBIT target related to the earnouts in absolute terms, but not the margin. Could you share whether you expect will to reach the earnout hurdle through continued growth or margin expansion or if you can point us in any direction here, please?

A combination of both, profitable growth will facilitate the additional purchase price payment.

I suspect that, that would be the answer. What was the reason for paying with shares instead of just using more debt? Like as you point out, the post transaction leverage will be more than manageable, I guess, regardless of how you would have chosen to pay for the acquisition?

I can point out. I can mention one reason, and that is that it was important for us, but also we saw an interest from the sellers to actually be part of the combined journey. And we believe that especially when the sellers being part of the current management team signal that, that is something that they would like to join. That was, yes, a very strong signal of this is something that we want to do together. So that, I think, was the main reason and since we had [indiscernible] shares, I think it was very easy to facilitate that wish from them, but -- so not -- so a combination of a wish from the seller, but also something that we believe was a very strong single.

And we come from a history of having a prudent capital structure, careful and always keeping possibilities for growth. And I think combining shares -- treasury [indiscernible] means that we can stick to what we've communicated previously that we want to see a net debt, net cash position around the 0 mark. So it's a combination of continued financial prudency while maintaining growth upside.

Perfect. Just 1 final, I guess -- or 2 final bookkeeping questions. Firstly, how will can will be reported going forward? And secondly, can you say anything about the P&L structure in terms of gross margins, for example?

We'll get back on the reporting structure, but we will make sure that we would be able to track the development of both brands. So we'll get back on that, but make sure that the focus on visible organic growth in both brands will be very visible. Sorry, what was the other question?

Anything on the P&L structure. So what Icaniwill's gross margins, for example?

The P&L structure is roughly the same as the RevolutionRace's P&L structure, and we'll get back to that. But gross margin roughly in line and then roughly the same.

Yes. So financial structure is the same and also operational. And that was, as I mentioned in the beginning, an important component for us that we really understand how they operate. [indiscernible] we set back in the upcoming quarters with information about reporting structure and disclosing numbers.

[Operator Instructions] The next question comes from Emmanuel Jansson from Danske Bank.

Perfect. A couple of questions from my side as well here. I mean, on the process here, could you share some color on the process leading up to this deal? What is the structure M&A process or more of a direct dialogue between the companies?

So well, process wise, we can say that it all started with the Board discussing whether M&A was an interesting component that we wanted to add to our strategy from at all. So that is something that we have discussed for some time. And when we decided that that is the case, obviously, we started to have discussions with potential target companies. But, having said that, as I mentioned before, I personally know the CEO quite well. We worked together for 5 years. And so we've had regular contact like both on a personal, but also professional level for some years. But it's sort of -- the discussions became concrete only the last weeks/months after we decided that this is something that we really want to move forward with. That also sort of fitted very well with Icaniwill sellers starting a process. So sort of had a knowledge quite some time ago that, that was something that they wanted to kick off with, but their decision to actually kick off a process and our decision to concretely look for M&A targets. They occurred sort of at the same time. a couple of weeks ago, I would say, maybe 2 months ago. So that is how it all started. I followed the company or for I would say, 3, 4 years. It's a company that is very close to what we do and I personally know the people behind it. So it has been obvious to follow it.

And where did you and the CEO work together for 5 years?

So we worked together up until 2014 or something, '15. So 10 years ago, but we've been in contact and we've done some private investments together and so on over the time. So we know each other well, which gives confidence.