With a strong end, we summarise a financial year that has been characterised by an overall high level of customer activity, albeit with distinct variations between different segments. Our well-diversified business with its strong positions in attractive niches, combined with great commitment and good performance in our various companies, have resulted in a total sales increase of 4 percent, of which 2 percent was organic. Furthermore, EBITA grew by 12 percent, which corresponds to a record margin of 16.0 (15.0) present, as well as increased earnings per share by 14 percent. Our cash flow was strengthened, we have a net debt that is historically low and, during the year, we welcomed a total of nine well-positioned and high-performing companies to the Group. Our business model, based on dual growth engines, a long term approach and a clear focus on entrepreneurship, is yet again demonstrating its strength. 

FOURTH QUARTER

The financial year finished with a positive market situation, although the variations between different customer segments persisted. Total sales increased by 2 percent with solid contributions from, above all, the Automation, Electrification and Process business areas. Exchange rate changes had a negative effect on sales growth by 4 percent and organically net sales were in line with last year. EBITA increased by 15 percent with a strong margin of 17.3 (15.3) percent, primarily driven by a strengthened product mix and acquisitions, but also by positive effects of restructuring measures previously executed, as well as revaluations of contingent purchase considerations. 

FULL YEAR

With overall high activity during the year and positive contributions from five out of six business areas, total sales grew by 4 percent. This was despite the global turbulence and customers continuing to postpone major investment decisions, which affected parts of the business. Our clear focus on strengthening our product mix, active pricing and acquiring companies with own products and higher profitability than the group average, continued to result in strong profit growth and increased our margins in a very satisfactory way. We also strengthened our gross margin in all six business areas and achieved organic profit growth in four out of six business areas.

All in all, the business situation has been strong for infrastructure products for national and regional grids, even though sales decreased against very tough comparisons in the fourth quarter. The positive development within special vehicles continued to strengthen sequentially during the year. The market situation for products and solutions for the defence industry was strong, while it was stable overall in the medical technology, electronics and engineering industry segments. We experienced continued slow activity within investment projects, primarily in the forestry and process industries. Data centers excluded, the data and telecommunications segment had a challenging year, along with building and installation. Other niche segments, such as traffic safety, marine and subsea, developed in a positive way during the year. 

From a geographic perspective, we saw relatively large variations depending on each of our company’s niche segment. The business situation was overall stable in Norway, weak in Sweden and Finland, and strong in Denmark. In our largest markets outside the Nordics, which are Germany and the UK, the business situation for our companies was very good overall, and it was favourable in most other markets where our companies operate. Our sales outside the Nordics have continued to increase and amount to 42 percent of our total net sales.

Cash flow from operating activities strengthened from already high levels and amounted to SEK 2,996 million (2,709) for the full year, driven by continued earnings growth, a stronger operating margin and focus on efficient working capital, and the outcome for our long-term financial target P/W increased to 81 percent (76). 

ACQUISITIONS

Six companies were completed during the fourth quarter. The two most recent were German Ramme Electric Machines, a leading manufacturer of electric motors and generators for maritime electrification, and Dutch Kapp Nederland that develops and supplies customised industrial heat exchange solutions. 

With gradually accelerating pace during the year, we completed a total of nine acquisitions, altogether adding SEK 1,595 million to our revenue, and we welcomed 410 new employees to the Group. After the end of the period, two additional acquisitions were completed: Dutch Staka Holding, which designs, manufactures and sells customised outdoor enclosures, and Nijhuis Engineering, a Dutch supplier of patented system solutions for road and rail construction machinery.