Relais: New strategy emphasizes return on capital and efficiency

Translation: Original published in Finnish on 5/20/2026 at 9:30 am EEST.

Relais published its updated strategy and new financial targets for 2026–2028 this morning. As we anticipated in connection with the Q1 report, the company's new financial targets include a capital return target, reflecting the new CEO's emphasis on capital efficiency. Although the target of over 13% for return on capital employed (ROCE) was slightly below our expectation of over 15%, it still represents a clear improvement compared to the company's historical performance. We believe that including return on capital in the targets is an excellent move, as the targets are now fully aligned with the positive development of shareholder value. The strategic guidelines also appear disciplined, which we consider reasonable after a period of rapid growth. We are looking to gain insight from the Capital Markets Day into the actions planned to achieve the numerical targets. The CMD can be followed here starting at 2:00 p.m. EET.

Focus on return on capital in addition to earnings growth

Relais' previous financial target was to achieve a pro forma EBITA of 50 MEUR by the end of 2025. In its new targets, the company aims for an average annual double-digit EBITA growth percentage, taking into account cyclical fluctuations, and a return on capital employed (ROCE) of over 13%. However, the most interesting new element is the ROCE target. Historically (2018–2024), Relais' ROCE has averaged in the 10-11% range. Although the target of over 13% was slightly below our anticipated level of over 15%, it requires the company to significantly improve its current efficiency. The company has not yet set target levels for its capital structure or leverage. The dividend policy remained essentially unchanged: the goal is to distribute an average annual dividend of 30% of diluted earnings per share.

Core of the strategy remains unchanged, but the emphasis will be refined

The updated "Turning growth into returns" strategy is largely based on the serial acquirer model already created by the company. The cornerstones remain local entrepreneurship, targeted acquisitions, and disciplined capital allocation. According to the release, Relais' focus is increasingly shifting towards scaling this platform and maximizing the return on invested capital. In our view, this suggests an emphasis on smaller, complementary acquisitions during the strategy period, rather than larger acquisitions that expand into new product or service segments. In light of these comments and financial targets, a significant portion of the EBITDA growth target appears to be based on improving the profitability and capital efficiency of current businesses. A preview of these efforts was provided in the Q1'26 report, where the company stated its aim to strengthen profitability at Startax by divesting operations with low returns on capital and allocating capital to operations with higher return expectations. We believe that linking targets to return on capital in addition to earnings growth is important, as these targets are fully aligned with shareholder value creation. We expect the Capital Markets Day to provide more color on the actions planned to achieve these numerical targets.

Geographically, Relais defines its market as Europe, whereas historically the focus has been on the Nordic countries and the Baltics. Relais has already made certain acquisitions in Continental Europe, so expanding the geographical market area is an expected step. However, this expands acquisition opportunities, as there are a limited number of high-quality acquisition targets available in the Nordic and Baltic countries.

CMD to provide more color on efficiency measures

Relais will elaborate on its updated strategy and targets today at its Capital Markets Day, starting at 2:00 pm EEST. At the event, we will pay special attention to the concrete measures management intends to take to lift the return on invested capital to the targeted level of over 13%. As we have stated before, our forecasts do not yet rely on the realization of the targeted efficiency benefits; instead, we await concrete evidence from these actions before raising our forecast bar. In our current forecasts, the return on capital in the coming years is in the range of 10-11%, consistent with recent years.