CEO's comments

We can look back over a very positive year, characterised by good growth and further improved profitability. Our companies generally experienced favourable market conditions, with lower fluctuations in the sectors compared to recent years. Thanks to work over several years focusing on business development, we were also able to make good use of the opportunities that were created.

Developments during the year

For many years, the Group has focused on long-term business dealings within the right customer and industry segments for each company. This strategic approach has created a good foundation that makes it possible to gear up in the event of favourable market developments. The stable, positive circumstances that characterised the past year provided us with excellent conditions to make use of our combined resources. Organic growth was good and the profit level was the best ever in XANO’s history.

One important success factor alongside the market situation is the core of personnel who have long been present at all our business units. Their energy has resulted in ongoing positive development of the organisations and the offers to our customers, which was particularly evident in 2017.

 

Operations within the business units

Industrial Solutions had a successful year, with a substantial growth in sales and improvement in profits. The project volumes to the packaging industry increased, as did the scope of the assignments for major contract customers. The trend witnessed within several customer segments, i.e. increasingly pronounced demand for all-inclusive suppliers, benefited our automation companies, which were consequently able to reinforce their market positions.

Precision Technology achieved a significant increase in volume and a much improved operating margin. This growth was generated above all by larger undertakings in relation to existing customers within medical technology. The improved profitability is closely associated with the companies’ high degree of automation and efficient utilisation of resources. 

For Rotational Moulding, the year was characterised by slightly higher invoicing and stable profitability. Lower demand within individual segments and geographic markets was balanced by an upturn in other areas. The companies prioritised continued strategic and proactive cultivation of customers, as well as further development of their proprietary product ranges. 

 

Acquisitions that create opportunities

The automation company Jorgensen, which was acquired at the end of 2016, made a significant impression during 2017. Jorgensen has enjoyed strong growth for several years, and its introduction into the Industrial Solutions business unit has been a success. For example, collaborative projects with other companies have been launched in the fields of product development, sales and purchasing. We have already witnessed good results from this work and are anticipating further positive effects in future.

XANO completed the acquisition of Blowtech Group at the start of January 2018. Blowtech is a leading Nordic player within technical blow moulding, an operation that complements Cipax’s focus on rotational moulding. Together, the companies are able to offer customers broader technical expertise and the capacity to deal with a variety of assignments. It is hoped that the acquisition will strengthen the development of the business unit, as well as provide each unit with the opportunity to grow further.

Lennart Persson
 

Structured sustainability work

Sustainability aspects have long been important within XANO’s operations, but we are now taking yet another step. A Group-wide sustainability policy has been implemented in all the companies. We are monitoring selected key performance indicators, and sustainability issues have become a more pronounced part of the Group’s business development and strategy. Alongside ongoing activities, this will contribute to more systematised and successful work within the area.

Future focus

In our judgement, the conditions for expansion remain good in 2018, although at a more normal level than over the past year, which was extraordinary from a growth perspective. As regards our development in the immediate future, we consider that some areas are of particular importance. One of these is Smart industry, which includes digitalisation and sustainable production. We have several projects in progress here, and the activities will be intensified in future. On the marketing side, we are continuing to focus on extended relations with existing customers and carefully selected new assignments characterised by a long-term approach. The proportion of international business is steadily increasing, and we are strengthening our resources in order to meet the challenges this entails. In order to retain good margins, much of our production-related work deals with maintaining a high level of delivery precision.

Just as before, we will continue trying to identify interesting new potential acquisitions. In the long term, we also intend to increase the rate of investment when it comes to machinery and premises, as well as to extend resources within sales and product development in order to safeguard capacity. The future looks bright to us, and we are anticipating continued positive development for all our business units.  

Finally, I would like to say a big thank you to all our employees for the excellent work they have put in.

 

Jönköping, February 2018

Lennart Persson
CEO