Year-end report 2019
The full year
» Net revenue totalled SEK 2,128 million (2,044)
» Operating profit amounted to SEK 229 million (236)
» Profit before tax amounted to SEK 211 million (219)
» Profit after tax amounted to SEK 163 million (171)
» Earnings per share were SEK 5.85 (6.13)
The fourth quarter
» Net revenue totalled SEK 520 million (549)
» Operating profit amounted to SEK 45 million (63)
» Profit before tax amounted to SEK 39 million (57)
» Profit after tax amounted to SEK 30 million (45)
» Earnings per share were SEK 1.10 (1.61)
Important events during the year
» A 2:1 share split was carried out in June
» Acquisition of Kuggteknik
CEO’s comments on the Group’s development during the period
Now, as we sum up 2019, we can state that the Group’s operations have once again generated good results, all in all. Our Industrial Products and Precision Technology business units enjoyed consistently stable development, while the dominant automation section within Industrial Solutions began the year strongly, but experienced a more challenging market situation during the second half of the year. For the whole year, sales growth amounted to 4 per cent, of which 3 per cent was organic. Compared to last year’s peak, operating profit declined by almost 3 per cent, calculated in Swedish kronor, while the operating margin fell from 11.6 to 10.8 per cent. The profit margin stood at 9.9 per cent (10.7), which means that our stated goal of 8 per cent was clearly surpassed, and the Group’s financial position was further strengthened.
The results during the fourth quarter were unable to match the high comparative figures from the corresponding period in the previous year. In terms of the market, however, we witnessed a general stabilisation and a generally improved order situation.
The Industrial Products business unit
Within the Industrial Products business unit, sales increased by almost 5 per cent, while operating profit exceeded last year’s figure by 17 per cent. The work in relation to organisational development and efficiency improvements further enhanced profitability. On the marketing side, we witnessed a continued positive trend, above all within the infrastructure area, where several long-term cooperation agreements were entered into. Sales to furniture and fittings manufacturers also developed well, primarily on the export markets, whereas deliveries to the automotive sector decreased overall. Adaptations to production in order to handle an increased proportion of bioplastics and the use of recycled materials remained a high priority.
The Industrial Solutions business unit
The growth in sales within the Industrial Solutions business unit amounted to 4 per cent, of which half was organic. Operating profit declined by almost 12 per cent compared to the previous year, mainly as a result of a less favourable assignment structure in respect of automation projects during the year. Operations related to customer-specific assignments reported positive development, with a favourable market climate and many new deals, gradually producing an ever greater impact. After an extended period of deferred investments and a small number of business transactions at our customers in the packaging and food industries, we experienced a slightly higher level of activity towards the end of the year.
The Precision Technology business unit
The operations within the Precision Technology business unit reported almost 6 per cent higher sales, of which 2 per cent was organic growth, and an operating profit that was 3 per cent lower than that of the comparison period. The operating profit did not quite match last year’s record level, yet profitability remained good. Our precision companies have a broad customer base and a good sector spread, with the medical technology industry as the dominant sector, which helped to minimise the effects of the general decline during the second half of the year. The newly acquired company Kuggteknik in Leksand contributed just over SEK 10 million in revenue and had a marginal impact on profit.
The uncertainty that characterised the market conditions prior to the end of the year was alleviated slightly during the past quarter, but is still expected to persist for a while. At the same time, we consider that the negative trend of constantly deferred decisions in respect of automation projects has been broken, as we have received several major orders after the turn of the year that will have a positive impact on sales and earnings during the latter part of this year. These transactions relate in part to new markets, where we are also witnessing further potential for growth.
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 consequently becoming increasingly important. We are continuing to focus on profitability, and believe that the trend for the Group’s operations will remain positive.