Entrepreneurial spirit and innovation driving our development

The Group’s strong figures reflect the performance of our companies over the past year. One common focus has been our development in the field of sustainable business. For us, this is a matter of future-proofing our business on all levels.

Group development during the year

I can look back with satisfaction at the past year and what we have achieved in the Group. Our market shares increased within all business units in 2019. All in all, our operations surpassed the Group’s target of a profit margin of at least 8 per cent, and our financial position was further strengthened. Through innovation, rewarding collaborations and long-term customer relations, we have also jointly laid the foundations for continued profitable growth.

As regards our individual business units and their development within various market segments, we can state that Industrial Products and Precision Technology experienced relatively stable conditions throughout the year. These companies have a broad customer base within many different sectors that successfully balance out economic fluctuations. Within Industrial Solutions, the dominant automation business began the year strongly, but faced significant challenges during the second half of the year. However, the customer-specific volumes gradually increased, thanks to several new, long-term assignments.  

Operations within our business units

At the companies within Industrial Products, the work in relation to organisational development and efficiency improvements had a high priority during the year. These activities produced results and the companies’ profitability was strengthened. On the marketing side, a positive trend, above all within the infrastructure area, contributed to several long-term cooperation agreements being entered into. Sales to furniture and fittings manufacturers also developed well, primarily on the export markets, whereas deliveries to the automotive sector decreased overall. The companies within the business unit manufacture plastic products, and they are working hard to increase the proportion of bioplastics and recycled material as well as to design new, more resource-efficient solutions.

The customer-specific operations within the Industrial Solutions business unit developed positively during the year. Many new assignments that have considerable potential to gradually achieve an ever greater impact are being received from customers, principally global companies in the fields of medical technology and environmental engineering. The level of activity was initially also high in respect of automation projects for the packaging and food industries. After the summer, however, we were adversely affected by deferred investments and the small number of business transactions at our customers. It was only towards the end of the year that we saw a positive change, with an increased number of enquiries and a few larger orders.

Within the Precision Technology business unit, our companies continued their work of increasing the degree of automation and further improving the utilisation of resources. In combination with a balanced mix of assignments, this meant that profitability remained good, despite something of a decline during the autumn. The medical technology industry was still the dominant sector, and its development also helped to minimise the effects of 
a general decline in incoming orders. Capacity reinforcements were carried out over the past year, both through investments in machinery and expanded production areas. In addition, the business unit’s operations were further supplemented via the acquisition of Kuggteknik.

Acquisitions that create opportunities

On 1 July 2019, we acquired Kuggteknik in Leksand. Kuggteknik works with cutting machining and possesses specialist expertise regarding the manufacture of geared products made of metal. The company’s customers are mainly found within the fields of tool and machine manufacture, mechanical engineering, packaging solutions and defence. Through this acquisition, the Precision Technology business unit is being strengthened in the form of additional technical expertise, and opportunities are opening up within new market segments. Acquisitions are a part of our business concept, and we are always working actively to look for niche operations that can complement our existing business.

Our ongoing sustainability work

Sustainable business is one of our most important areas of focus. A sustainable way of doing business, from both an environmental as well as a social and economic perspective, is essential in order to future-proof our operations. We will contribute to sustainable development through innovation, new technology, new materials and new ways of producing, and not forgetting through strategic collaborations. Within the Group, we worked actively during the year to reduce our own and our customers’ combined environmental footprint. We did this in part by offering lightweight materials to the automotive sector, increasing the share of production using recycled plastic and by successively adapting our product portfolios to achieve a lower environmental impact.  

XANO Academy increasing skills within the Group

We are constantly working to increase skills and knowledge within the Group, for example by offering courses within XANO Academy. During 2019, many of our current and future managers have taken part in a training programme focusing on leadership, values, culture, innovation and development. Our values are the platform for the entire Group’s operations, they permeate everything we do and they provide us with guidance on each and every working day.

Our future focus

Developments in the world around us have meant that the trend from the previous year, with major variations between both industrial segments and different periods, has been reinforced and has almost become the norm. Our strategic work aimed at extending our customer relationships and selecting assignments that ensure optimum utilisation of resources in the long term is therefore becoming increasingly important. We have developed our innovation model, which will provide further coordination benefits and more efficient processes. After the end of the year, we have won several major orders in respect of automation projects, deals that relate in part to new markets where we are seeing further potential for growth. The same applies to several of the long-term collaboration agreements that were entered into over the past year. We are also continually evaluating new potential acquisitions. Our focus on profitability remains, and we believe that the trend for the Group’s operations will remain positive.

The outbreak of the COVID-19 coronavirus has only had a limited impact on the Group so far. We are monitoring developments carefully and are taking steps to minimise negative effects. At the time of writing, it is not possible to assess what consequences the spread of the virus will have on our business in future. 

Our entrepreneurial spirit is a success factor

We are proud of the entrepreneurial spirit that characterises our entire Group. We are also aware that, in many respects, it is the key to our profitability as well as a contributory factor to our strong growth. The knowledge and the service-minded approach that exist within all the Group’s companies are clear. Our customers demand a partner with a good understanding of their business and strong technical expertise that can create genuine benefits. These attributes can be found in our operations, and I would like to say a big thank you to all our employees who, through their skills and commitment, are making our journey of success possible.  

Jönköping, February 2020

Lennart Persson
President and CEO