Efficiency the key theme at Relais’ Capital Markets Day

Translation: Original published in Finnish on 5/20/2026 at 9:34 pm EEST.

At its Capital Markets Day (May 20), Relais unveiled its new strategy and financial targets for 2026–2028. The new strategy clearly shifts the focus from growth to profitability and efficiency metrics. The financial targets are an average annual double-digit growth in EBITA, accounting for economic fluctuations; a ROCE above 13%; and a dividend payout policy of at least 30% of diluted earnings per share. Overall, we consider the CMD's message to be as expected and aligned with favorable shareholder value development, but we do not yet base our estimates on the realization of the targeted efficiency benefits. We are awaiting concrete evidence of these before raising our estimates.

Strategy cornerstones remain unchanged

The updated "Turning growth into returns" strategy is largely based on the already proven serial acquirer model of Relais. The three cornerstones – local entrepreneurship, focused M&A, and disciplined capital allocation – remain unchanged. The strategy will be implemented in three phases spanning the years 2026–2028: building the foundation, improving the quality of growth, and scaling the model from a stronger foundation. At the same time, the company provided more details on the structure of the three business areas announced in February (Technical Wholesale, Commercial Vehicle Services, and Products and Solutions).

As concrete means to improve capital return, the company emphasized the financial accountability of subsidiaries, systematic monitoring of selected metrics (EBITA and return on working capital), and responding to underperformance. We consider these actions sensible, as we believe there is room for improvement in the company's capital turnover and efficiency following its rapid pace of acquisitions.

Growth target provides leeway

The company did not provide a numerical target for organic growth. The only growth target is a double-digit EBITA growth rate, which incorporates both organic and inorganic earnings growth into a single figure. We expect strong EBITA growth (+27%) in fiscal year 2026 as a result of acquisitions made in fiscal year 2025. Thus, achieving an average double-digit EBITA growth rate during the 2026–2028 strategy period sets the minimum growth level quite low (based on our organic estimates, average EBITA growth for 2026e–2028e 10% or CAGR 2025–2028e 9%). Therefore, the growth target gives the company a lot of leeway and partly reflects a focus on return on capital rather than growth.

We estimate that acquisitions will continue to be the main driver of growth. While supplementary bolt-on acquisitions are clearly the main direction, the company is also keeping the door open to larger platform acquisitions should good opportunities arise. Overall, the company appears to take an opportunistic approach to acquisitions, focusing not on a narrowly defined industry or market segment but rather on the quality, suitability, and purchase price of the target company. We consider this a sensible approach, as chance plays a significant role in the emergence of attractive acquisition targets. The company also outlined the drivers of value creation by business segment and aims to generate returns by improving growth, EBIT margins, and capital efficiency across all three units.

Return on capital now at the heart of strategy

The new return on capital employed (ROCE) target (over 13%) represents a nearly 2-percentage-point improvement compared to the average level of just over 11% during 2020–2025. We believe that the newly set target is appropriate because it is ambitious enough to improve the company's performance, yet it can be achieved without radical structural changes. The targeted return on capital links the growth targets to shareholder value creation, which is why we consider the ROCE target an excellent addition. However, our current return on invested capital estimates (around 10% for 2026e–2028e) remain below the ROCE target, and we await concrete evidence from the company before raising our estimates.

The dividend policy, on the other hand, remains unchanged: at least 30% of diluted earnings per share on average over the business cycle.

Capital primarily directed toward growth

During the Q&A session, the CEO outlined the order of priority for capital allocation: 1) organic growth at subsidiaries with a good return on capital, 2) profitable acquisitions, and 3) dividends. The company did not deem it appropriate to systematically reduce its leverage ratio at this time. In our view, prioritizing growth in capital allocation is justified, given the company’s track record of creating shareholder value through growth in recent years.

We consider the current level of debt a reasonable starting point for continued acquisitions, though we note that the difference between the return on capital after tax and the marginal cost of debt (7.8% interest on the 50 MEUR hybrid bond) is currently narrow. Thus, every euro in capital allocation must generate a return.

Overall, the CMD's message was largely in line with our expectations presented in the Q1 report, and we do not see any immediate need to adjust our estimates. Our view of the share therefore remains unchanged.