CONTINUED SOLID PROGRESS IN A VOLATILE WORLD

Last year was characterised by major stresses such as the war in Ukraine, high inflation, interest rate rises and energy shortages. Despite the volatile world around us, Volito’s operations report continued good development and profitable growth. The Group is based on a strong foundation of solid owners with a long-term perspective, diversified operations, clear values and a winning ability to rapidly adapt. Volito is well configured to address the business climate with decisiveness and unchanged targets for continued long-term sustainable expansion.

Volito is a strong, growth-oriented investment group based on long-term ownership and a balanced approach to risk and reward. With the trust of the world around us as our guiding principle, we take active responsibility for the development of both our own operations and those of our portfolio companies. Our culture is characterised by an efficient organisation, high targets and a distinct ambition to achieve long-term, sustainable and profitable growth in all part of the Group.

For 2022, Volito reports a balance sheet total of SEK 8.6 billion, which is a decrease of 8%. At year-end 2022, the Volito Group’s adjusted equity amounted to SEK 4.9 billion, which represents a reduction of 15% on the previous year. The decrease is mainly attributable to stock market volatility during the year. Despite this, Volito has a strong financial position. During the period 2020-2022, the first three years of our five-year expansion plan, the average annual increase of our adjusted equity was 8.1%.

2022

The year involved major challenges, initially with continued disruptions in the supply chains due to factors such as a strong increase in demand after the pandemic, and then in the form of geopolitical anxiety in connection with Russia’s invasion of Ukraine. With a stable platform and its capacity for resilience, Volito, despite the turbulent year, was still able to focus on further strengthening its positions and purposefully continued with its set expansion plans. Volito Industry conducted significant strategic acquisitions and increased its market shares in both Sweden and Finland. Volito Fastigheter continued refinement work on its portfolio with a focus on sustainable development. We have also taken significant steps in the form of fine-tuned internal procedures, investments in enhanced IT security and valuable new recruitments both in the team around the group management and for strategically important positions in our operations. Our portfolio companies also base their operations on a long-term and responsible approach and report continued strong development despite the year’s challenges. Notwithstanding reductions in value, each of our portfolio companies is characterised by healthy business operations and a good financial position.

Our business areas

For Volito Fastigheter, the year entailed challenges in the form of reduced market values, higher interest rate levels and increased costs for energy, but also good demand, positive growth in rental revenues, and strategic recruitment. Volito Fastigheter’s high growth targets remain in place and investments in sustainable property development are proceeding, both in the refinement of existing properties and development projects, for example in the emerging area of Nyhamnen. During the year, Volito Fastigheter identified focus areas for its sustainability management and joined the LFM30 network – Local Road Map Malmö 2030.

Volito Industry met major challenges in the form of supply disruptions, rising inflation and increased costs relating to energy, intermediate goods and interest rates. In spite of the challenges, Volito Industry continued its expansion through acquisitions in Sweden and Finland, further strengthened its position as a system integrator in automation, electrification and digitalisation, and considerably increased its turnover. Volito Industry is well prepared for an uncertain business climate and is aiming for continued long-term sustainable expansion and transformation.

Within Business Area Portfolio Investments our portfolio companies as a whole showed good development. Despite a challenging year, the companies each report good financial results and a good financial position.

Peab reports stable financial results for 2022. A very satisfactory order book and a strong financial position, in combination with the company’s broad business model, enables Peab to meet varying conditions in different segments and geographical areas. Peab deems that high inflation and higher interest rates will lead to a less active housing market but expects more stable demand in public sector house construction, civil engineering and investments related to the green transition. The company is focusing on continued efficiency enhancement of operations, adapting the organisation to demand and taking advantage of opportunities that may arise in a weaker market.

Annehem reports a strong financial position and good financial results. The company has adopted a new vision to be the most sustainable property company in the Nordic region and formulated new sustainability goals. Other longterm goals remain in place, including the growth goal of 20 per cent per year. By 2027, the company is to have doubled the value of its property portfolio. Secured conditions for financing provide good opportunities to focus on growth and develop the operation’s sustainable management. Diversification is important for the future and a logistics facility in Södertälje Almnäs and a residential property in Malmö were acquired in 2022. In addition, an agreement was signed about buying land in Sundsvall’s Logistics Park in a joint venture with Peab.

Despite a turbulent year, Bulten beat its turnover record and achieved an adjusted operating margin in line with the company’s financial target for 2024. The company’s Russian operations were discontinued, while component shortages leading to volatile customer forecasts affected manufacturing. At the same time, demand was very good, and Bulten grew in the electric vehicle segment and won several strategically important deals in other sectors. The company maintained its sales strategy in parallel with transition projects, discontinuations and adaptations to fluctuating production rates, as well as its focus on stock reductions and price increases. A good order book provides a satisfactory foundation for 2023. The way forward is to continue to grow and increase profitability.

EQT continued to future-proof its expanding platform and navigate through a macroeconomically and geopolitically uncertain period. All key funds developed according to plan or better. Overall, the year’s valuations were positively affected by strong operating profits among the portfolio companies. EQT retains a clear cost focus in relation to an uncertain market environment. Despite a subdued transaction market, EQT completed significant capitalraising transactions and is well positioned for continued investments. EQT is following its strategy for thematic investments and long-term, sustainable value creation, among other things with plans for increased investments in waste management, renewable energy and circularity. The company continues to shape its opportunities with a focus on generating strong returns that go hand in hand with a positive effect.

The future – continued sustainable expansion

Recent years have been marked by major challenges in the world around us, and 2023 will be no exception. We are entering a year in which we can expect continued geopolitical uncertainty, probably a harsher business climate, new interest rate levels and strained energy supplies in Europe.

At the same time, the new circumstances also offer new opportunities. From the very beginning, Volito has created profitable growth through long-term investments characterised by a balanced approach to risk and reward. The considerable expertise and long experience of our staff underpins a distinctive capability to find and implement attractive and viable investments, regardless of the business climate. We are therefore ready to meet the downturn in the business climate in 2023 with a balanced approach in which we purposefully manage both challenges and prospects for continued good transactions in the long term. Our strategic plan for expansion remains in place and the same applies to our targets. Volito will continue to deliver solid returns for our shareholders.

In the last year, we saw not only continued expansion and good financial results in our everyday operations, but also great belief in the future, an inspired optimism and exciting steps forward in the development of products and services with a continued focus on sustainability. In our operations there is ongoing intensive work in areas such as electrification, digitalisation, energy-efficiency, property development and reuse. Within the framework of our expansion plan, we see continued major opportunities – through means such as new acquisitions, new collaborations and expanded networks –to offer our customers both sustainable and highly sought-after solutions.

Volito is financially strong and well-configured to meet the coming years with decisiveness and remains ready to continue building value over generations – for companies, staff, the wider world and the community. I would like to conclude by thanking Volito’s customers and partners for your trust in us and also thank Volito’s staff for a very well-executed 2022.

Business Area Real Estate consists of Volito Fastigheter, which owns and manages commercial and residential properties in Malmö. The business is characterised by a long-term approach, prudent property management, a high level of service and close relations with customers and partners. Volito Fastigheter has continuously developed its portfolio in order to strengthen its presence in Malmö’s most attractive areas. The company’s aims include positioning Volito Fastigheter as one of Malmö’s most well-known real estate companies and the best in terms of property management and customer relations.

Marie Persson, Managing Director, Volito Fastigheter