2018: President's statement
2018 was a successful year. Order bookings, net revenues and operating profit increased. Most customer segments and markets displayed growth. All subsidiaries contributed earnings improvements and the operating margin increased.
Demand was strong during the year – both in the traditional industrial business and in Chassis Springs and Telecom – particularly during the first half of the year. Demand became more varied during the second half of the year. This contributed to a decline in the Group’s growth.
Lesjöfors, which is becoming an increasingly global company, continued to deliver successful results. In addition to developing local relationships worldwide, there were several examples of increased cross-selling at the global level during the year. For example, we are increasingly manufacturing products for European customers at our plants in Asia and may relocate our production closer to our customers in North America. In Europe, Lesjöfors’s service model within Chassis Springs contributed to strong volume growth.
Profitability in Habia’s industrial business improved after a weak 2017, which was an important development. Our order bookings surpassed the billion kronor mark for the first time, partly thanks to our new offshore area. Beijer Tech continued to deliver broad, profitable growth. Our refinement and manufacturing levels increased, not least as a result of acquisitions in recent years.
Our strategy for profitable growth includes both organic growth and acquisitions. A recurring theme in our operations is the need to have a broad customer base to provide additional growth opportunities and reduce our vulnerability. It is also important that we are located close to our customers’ product development operations in order to ensure that generating new business is always an important part of the sales process.
We support our subsidiaries in their efforts to achieve organic growth. During the year, significant investments were made to expand the capacity and improve the productivity of various operations. Over the years, acquisitions have also been an important source of growth, particularly since our acquired companies have often been able to quickly contribute to further organic growth as they became part of the Group. Acquiring and developing new companies will also be important for the future. We actively seek out opportunities – both in our core areas and in new, related areas – with the potential to generate an attractive return over time.
It is fundamental that we conduct our business in a responsible and sustainable manner. Our sustainability work is carried out in line with our decentralized approach to corporate governance, with decisions made close to our operations and customers. We base this work in part on the UN Global Compact and Sustainable Development Goals. One area I would like to highlight in 2018 is our efforts to become more energy efficient, partly by carrying out comprehensive energy audits. Although the sustainability objectives we have established represent a challenge for a rapidly growing and developing global group, this year’s objectives for energy consumption, CO2 emissions and social responsibility were achieved.
Preparing for 2019
At the time I write this, the world’s economists are not in agreement when it comes to the outlook for the stock exchange, global economy, industrial economy and other external factors in 2019. However, our task is to focus on the things we can influence and the areas where we must be prepared for various scenarios. We will benefit from the fact that the Group is well equipped, both financially and thanks to our business model of having a diversified customer base. We will continue to invest in our operations and seek out new acquisition opportunities.
At certain points during the year, our activity level was very high, and I know that many people throughout the Group have done their utmost on numerous occasions to keep our customers happy. So I would like to express my sincere thanks to all of our employees who in different ways helped to make 2018 such a strong year.
Henrik Perbeck, President and CEO