Systemair Annual Report 2010/2011 the Year in Brief
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ANNUAL REPORT 2010/11 Contents HistorY 1 The Year in Brief 2 CEO’s Statement 1970s AND 1980s The circular duct fan. 4 Systemair in Brief 1974 The Company was founded as LHG Kanalfläkt, and production began in Skinn 6 Business Concept, Goal and skatte berg. More than 50% of production was Strategy exported to Norway. 1976 The first sales subsidiary, LHG Kanavapu- 8 Operations hallin, was established in Finland. 13 Market 1985 The German manufacturer of fan motors Ziehl-Abegg and ebmpapst were suppliers from 18 The Group’s Brands the start, then became partners through their Swedish subsidiary Ziehl-ebm, today ebmpapst Earlier solution. 20 Products AB, the second largest shareholder in Systemair. 1986 Gerald Engström took over as CEO. 1989 Sales company acquired in Denmark. 25 Logistics 1987 Acquisition of 50% of the shares in RB Kanal 1989/91 Norwegian sales company Jolin flakt, USA and the remaining 50% in 2001/2002. Produkter A/S acquired in stages. 26 Production Facilities 28 Sustainability 31 Personnel 1990s 34 The Systemair Share 1992 Acquisition of then OTC-listed Frico AB, a 1998/99 Acquisition of Europair, Södertälje, specialist in air curtains and fan heaters. manufacturer of air terminal devices. LTI Lüft- 37 Directors’ Report 1995 Environment Air, Canada, manufacturer of ungs technik, Windischbuch, Germany, now the residential air handling units, acquired. second largest production unit and central ware- 41 Corporate Governance house. LTI’s sales companies in the UK, Poland Report 1996 Acquisition of factory in Bouctouche, and Singapore became the first sub sidiaries to Canada, a production facility for the North be renamed Systemair. American market. 46 Board of Directors 1999/00 Acquisition of the sales company APF 1997 Own representative office in Moscow, Group, Estonia, with subsidiary in Latvia. Russia. 47 Group Management Establishment of representative office in Acquisition of SCIE Systemair, previously sales Shanghai , China. 48 Consolidated Income agent in France. The name was later taken by Statement the whole Group. 49 Consolidated Balance Sheet 51 Statement of Changes in 2000s Equity – Group 52 Consolidated Cash Flow 2000/01 New distribution centre in Skinn- 2006/07 Acquisition of Altexa, Austria and Imos, skatte berg. Slovakia, as well as the assets of Matthews & Statement Acquisition of Danvent, Denmark, which pro- Yates, United Kingdom. 53 Parent Company Income duces air handling units, and 75% of the shares 2007/08 Acquisition of Koolclima, Spain, in UAB Alitas, Lithuania. Climaproduct , Italy and establishment of Statement Sales subsidiary in Turkey under the Systemair Systemair Software, India. 54 Parent Company Balance name. Systemair was awarded the Swedish Trade Council’s Export Prize. Sheet 2001/02 Systemair adopted as the common name for the entire Group. Systemair was listed on the NASDAQ OMX 56 Statement of Changes in Acquisition of Veab Heat Tech, Hässleholm, Stockholm exchange. Equity - Parent Company Auranor Aggregater of Eidsvoll, Norway, and 2008/09 Acquisition of Megcool Industries, sales company Bivent, Austria. Malaysia, and the assets of Emerson Ventilation 57 Parent Company Cash Flow Sales companies founded in Hong Kong, Products, United States. Statement Hungary and Ireland. 2009/10 Acquisition of Energo Plus, Slovenia, 2002/03 Acquisition of sales company Meijdijk W.C. Wood, Air Humidifier Dept, Canada, and 59 Accounting Policies and Ventilatietechnik of the Netherlands, Klockar- Ravistar, India. Notes to the Accounts gården in Skinnskatteberg, 26,000 m2 of build- ings and 30 ha of land. 74 Audit Report 2003/04 Acquisition of Fans&Spares, UK, Gelu, a German manufacturer of air curtains, Antlia, a 75 Key Ratios and Definitions distributor in Switzerland, and establishment of a new sales company in Belgium. 76 Addresses 2004/2005 Sales companies in Romania and 77 Annual General Meeting South Africa established. Start-up of production facility in Ukmergé, Lithuania. 2005/06 Acquisition of Marvent, Slovenia, Multiventilacao, a sales company in Portugal and establishment of sales companies in the United Design and Production Systemair in association Arab Emirates, Spain and India. In February 2011, CEO Gerald Engström was awarded H.M. the King's Medal, 12th size with with Narva. Photo: Mats Lundqvist Gerald Engström, CEO, Systemair, was named as Printed by Elanders, 2011 the ribbon of the Order of the Seraphim, for Entrepreneur of the Year in Sweden. outstanding contributions to Swedish business. 2 Systemair Annual Report 2010/2011 The Year in brief 2010/2011 In April, the Polish sales company FOKO was acquired. Establishment of sales company in Chile in March. In February, acquisition of the companies in the Aaldering Group that are engaged in the production and sales of air curtains in Germany and the Netherlands was finalised. 3.47 In January, minority stakes in Systemair AS, Estonia, and IMOSSystemair, Slovakia, Sales, SEK billion, 2010/11 were acquired. In June, the Dutch ventilation company Rucon was acquired. In June, the sales company VKV, of the Czech Republic, was acquired. Roland Kasper, Vice President Marketing Products, was recruited to Group Management. A new logotype and graphical profile was presented. Investments in new and replacement production equipment in Skinnskatteberg. The factory in Ukmergé, Lithuania, was doubled in area during the year. Nominated as winner of The Indoor Climate Prize 2010. +34% Operating profit KEY RATIOS 2010/11 2009/10 2008/09 2007/08 Net sales, SEK million 3,467.3 3,218.6 3,333.1 3,091.6 Growth, % 7.7 -3.4 7.8 16.0 Operating profit, SEK million 367.0 274.7 341.0 402.5 Operating margin, % 10.6 8.5 10.2 13.0 Profit margin, % 9.8 7.6 9.0 11.3 Return on capital employed, % 18.0 15.2 21.3 25.9 Earnings per share, SEK 5.3 3.7 4.5 4.7 Equity per share, SEK 24.4 22.2 19.7 15.3 +44% Equity/assets ratio, % 48.6 49.0 43.3 37.3 Profit after tax Dividend per share, SEK 1.75* 1.25 0.75 1.50 Number of employees at year-end 2,506 2,208 1,945 1,827 *Dividend recommended by the Board to the AGM to be held 25 August in Skinnskatteberg. Net sales, SEK m. Return on capital employed, % Operating profit (EBIT), SEK m./ EBIT margin,% 3,500 30 500 15 3,000 25 400 12 2,500 20 2,000 300 9 15 1,500 200 6 1,000 10 100 3 500 5 0 0 0 0 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 Cash flow from operating Average number of employees Growth in sales, % activities, SEK m. 400 3,000 20 2,500 15 300 2,000 10 200 1,500 5 1,000 100 500 0 0 0 -5 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 06/07 07/08 08/09 09/10 10/11 Systemair Annual Report 2010/2011 1 CEO’S Statement The tide has turned! Organic growth has returned, which is a gratifying development. As a result of the continuous strengthening of the Swedish krona, sales denominated in the Swedish currency have not increased to the same extent, but we are content with the impro- vement in our gross profit during the year. Larger production volumes and efficiency improvements in production have delivered a positive contribution. ” In times when the The offensive continues While sales failed to grow as strongly as we had hoped, we increased our market shares market consists of in a number of countries. We maintained our investment offensive, partly in the shape of some good corporate acquisitions, for example in the Netherlands and Germany, and many small projects, we carried out a number of powerful market initiatives. In the first four months of 2011, the capacity to deliver we took part in eleven major trade fairs, most of them international. At the biggest of these - ISH in Frankfurt, where we had a large, very well-attended stand – we exhibited often determines who exclusively new energyefficient products, which attracted very strong interest. In spring, we presented a new logotype and graphical profile. Our former logo- wins the order. ” type reflected the time when Systemair represented a limited range of circular and rectangular duct fans. The new logotype proclaims that today we are a dynamic, international ventilation business offering a broad spectrum of products. Disappointments during the year In many markets, building investments have not yet fully come up to speed. Unsurprisingly, the businesses in Spain and Ireland are still having problems. It is unfortunate that our Italian company, too, has been affected by the crisis and has not performed as expected. Developments during the year in India, South Africa, Australia and the USA were also a disappointment. Intensive efforts to improve profitability are in progress in the companies concerned. The gaining strength of the Swedish krona is having a slightly negative impact on both sales and profits at Group level. Product development In 2010/11, we launched more new products than ever before, with the emphasis strongly on continued development of energyefficient air handling units and fans. We expanded our product range and began marketing the new products. We anticipate that this will contribute to future growth. The use of energyefficient EC motors plays a key role in product development. Products offering low energy consumption and higher per- formance characteristics represent an ever-increasing proportion of our product portfolio. In April 2011, we gained recognition that our product development is at the fore- front, when we were awarded the industry’s “The Indoor Climate Prize” for a system solution that provides an increase in energy effici ency in existing apartment blocks and ensures a healthy indoor climate (see page 17).