Stable positive development

A generally favourable market climate, combined with a high level of efficiency in our operations, meant that we once again achieved excellent results as regards sales and earnings. We conducted two complementary acquisitions and capacity improvements through machinery investments as well as expanding our production space.

 

Group development during the year

During 2018, the Group’s growth principally was the result of acquisitions, although many of our companies also grew organically, and the profit level remained good. The slightly weaker profitability compared to the previous year was a result of an altered assignment structure within the Industrial Solutions business unit and slightly lower margins in newly acquired units. However, the latter performed on a par with our expectations and contributed to new business opportunities for their sister companies. Compared to the previous year’s even capacity utilisation, we saw a return to what we consider to be more normal conditions, with larger variations between the periods.

Our staff are absolutely vital to us being able to conduct operations. We have a core of loyal employees within all our business units, who are being supplemented with new, enthusiastic colleagues. Together they are generating positive energy and drive towards constant improvements.

Operations within our business units

In conjunction with the acquisition of Blowtech, the Rotational Moulding business unit was restructured and changed its name to Industrial Products. The acquisition of Blowtech resulted in net sales for the business unit more or less doubling. The companies strengthened their positions on several markets, and volumes increased overall. However, we had slightly higher expectations as regards results for certain parts of the business, and initiated targeted improvement activities during the year. 

Within the Industrial Solutions business unit, Polyketting supplied additional expertise in respect of the handling of packaging. The extent of the project-based operations decreased overall, however, and the altered assignment structure had a negative impact on operating profit. At the same time, deliveries to major contract customers increased. This relates to long-term commitments that will continue to have a positive impact in future years. 

The companies within the Precision Technology business unit once again reported higher invoicing and improved operating profit. Under market conditions that remain favourable, the companies achieved a good return on the streamlining work they had carried out. They were also successful with the strengthening of resources that has been carried out through investments in new machinery and extended production areas.

 

Acquisitions that create opportunities

We completed the acquisition of Blowtech at the start of the year. Blowtech’s expertise within technical blow moulding successfully complements Cipax’s rotational moulding operation within the Industrial Products business unit. Together, the two companies are able to offer customers the best production economics and the capacity for a variety of assignments. Shared resources for cultivating the industrial segment have been added, with the aim of increasing the share by volume to customers outside of the automotive sector, which is where the majority of Blowtech’s deliveries end up at present.

The Dutch automation company Polyketting was acquired in May and complements Fredriksons’ solutions for handling packaging. Through this acquisition, the business unit acquired new product versions in the field of accumulation equipment, as well as access to new customer segments. Several collaborative projects are in progress between sister companies in areas such as product and technological development. An exchange is also taking place with Canline and Jorgensen, which have now been with us for a couple of years and have enjoyed positive development.

Our sustainability work

Our first sustainability report was an important tool in the process of approaching our sustainability work in a more systematised manner. During 2018, we have determined the focus of future activities. The sustainability aspects have been given more space in each Group company’s business plan, where quantified goals must be defined on the basis of our joint directional goals. The focus is on integrating the sustainability issues through a business-driven approach, as well as ensuring that they become a natural part of our corporate governance.

Future focus

We believe in ongoing, stable, positive development and are maintaining our focus on profitability, with productivity, delivery precision and quality as keywords. We have increased the rate of investment – for example, Jorgensen has expanded its production space during the year. Additional capacity reinforcements are being implemented through extensions and the installation of more efficient machinery. 

Our strategic work aimed at extending customer relationships and selecting assignments that allow the best possible utilisation of resources in the long term is continuing. In line with this, we are also working to reinforce our sales and marketing teams. Within Industrial Solutions, we are adding resources in areas such as after-sales services, where we have clear potential for improvement. We view product development as a strong competitive factor. Here we are adding the capacity that is required to complete key projects and further refine our solutions. We are also continually evaluating potential acquisitions that can complement our current operations.

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

 

Jönköping, February 2019

 

Lennart Persson
Managing Director and CEO