Annual Report 2008
Contents
Cover pages
Notification to attend the Annual General Meeting Key figures
Important events in 2008 Page
1 Business concept
2 Words from the president and CEO 3 Profitability and growth objectives
4 Global forces behind improved working environments 5 Expansion throughout the value chain creates growth 6-7 The unbroken chain
8-9 Expansion on new and traditional markets 10 Customer-oriented total solutions 11 Extraction & Filter Systems business area 12 Hose & Cable Reels business area 13 Care for the environment and employees 14 Shares 2008
15 Financial information in brief
Financial
16-18 Directors’ report 2008
19 Consolidated income statements 20 Consolidated balance sheets
21 Consolidated statements of changes in equity 22 Consolidated cash flow statements
23 Income statements for the parent company 23 Cash flow statements for the parent company 24 Balance sheets for the parent company 25 Statements of changes in shareholders’ equity 26-51 Notes
52 Proposed appropriation of profits 53 Auditors’ report
54-56 Corporate governance report 57 Articles of association 58 Board of directors 59 Senior executives 60 Financial definitions
Notification to attend the
Annual General Meeting (AGM)
The Annual General Meeting of Nederman Holding AB (publ) will be held at Jacob Hansens Hus, Norra Storgatan 21, 252 20 Helsingborg, Sweden, on Tuesday, 28 April 2009.
Schedule:
3 p.m. Registration starts 3.30 p.m. Meeting room opens 4 p.m. Meeting starts
Coffee and refreshments will be served before the meeting.
Right to participate at the meeting
Shareholders wishing to participate at the meeting must be recorded in the shareholders’ register kept by VPC AB by Thursday 23 April 2009 and must notify the company of their intention to attend the meeting no later than Thursday 23 April.
Shareholders whose shares are registered in the name of a trustee must have their shares temporarily registered in their own name in the VPC shareholders’ register in order to take part in the meeting. This registration, known as voting right registration, must take place by Thursday 23 April 2009, meaning that the shareholder should give notice of his/her intention of taking part at the meeting in plenty of time before that date.
Notification
Notification can be carried out in one of the following ways:
- on Nederman’s website: www.nederman.com - by email: arsstamma@nederman.se - by telephone: +46 (0)42 18 87 00
- by letter to: Nederman Holding AB (publ), “Årsstämma”
Box 602, 251 06 HELSINGBORG, SWEDEN
Notification should include details of name, civic registration number/corporate identity number, address, telephone, registered shareholding and advisors, if any. The information is solely used for the requisite registration and drawing up of the voting list. Where representation is made by proxy, the original proxy form must be sent to the company along with the notification to attend the meeting. Individuals representing a legal entity must have a copy of the registration form or equivalent documentation indicating the authorised signatory.
The company will provide proxy forms for shareholders who so wish: The form is also available for downloading on Nederman’s website: www.nederman.com.
Dividend
The board and CEO propose a dividend for the 2008 financial year of SEK 2.50 per share. The record day for dividends is proposed as 5 May 2009. If the Annual General Meeting decides in accordance with the proposal, dividends are expected to be issued from VPC AB on 8 May 2009.
Reports
Q1 report – January - March 2009 28 April 2009
Q2 report – January - June 2009 14 August 2009
Q3 report – January - September 2009 22 October 2009
0 2006 100 200 300 400 500 600 700 800
2007 2008
528 568
711
2006 2007 2008
878
1041 1272
0 200 400 600 800 1000 1200 1400
2006 2007 2008
743
866
135 175 199
1073
0 200 400 600 800 1000 1200
Extraction & Filter Systems Hose & Cable Reels
2006 2007 2008
85 114
141
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100
%
2006 2007 2008 44%
32% 27%
0 20 40 60 80 100 120
2006 2007 2008
71 89
114
Key figures
Sales Operating profit (EBIT)
Average number of employees Sales by business area
Net debt/equity ratio Operational cash flow
• Nederman was founded in 1944
• The company was introduced onto the OMX Nordic Exchange Stockholm*, Small Cap, in 2007
• Nederman is an environmental technology company that develops, produces and markets proprietary products and systems
• Production and assembly facilities in Sweden, Norway, Canada and China
• Own sales organisations in 25 countries
• Agents and distributors in around 30 countries
• The Group has around 760 employees
SEK m
SEK m
SEK m
SEK m
* today under the name Nasdaq OMX Stockholm AB Key figures, Group
2008 2007* 2006
Net sales 1,272,3 1,041,4 877,8
Gross profit 617,8 502,5 423,8
Gross margin, % 48,6 48,3 49,1
EBITDA 158,7 131,9 104,4
EBITDA margin 12,5 12,7 11,9
Operating profit 140,8 114,1 85,4
Operating margin 11,1 11,0 9,7
Profit before tax 125,6 105,3 75,7
Profit for the year 92,6 75,2 55,0
Earnings per share** 7,90 6,42 4,73
Operating cash flow 113,9 88,5 70,9
Return on shareholders’ equity 18,9 18,2 15,7
Return on operating capital 22,2 20,0 15,9
Net debt 144,1 145,6 163,9
Net/debt equity ratio 27,2 32,2 43,5
Net debt/EBITDA, multiple 0,9 1,1 1,6
EBITDA/net financial items, multiple 10,4 15,1 10,7
Average no. of employees 710 568 528
1,400
200 400 600 800 1,000 1,200
0
200 400 600 800 1,000 1,200
0
20 40 60 80 100 120
0 140 160
80 120 100
60
40
20
0
Important events in 2008
Complementary acquisitions
The year started with Nederman’s acquisition of Töredal Verkstad AB in Jung, Sweden, which produces products for high vacuum systems. The company has been an important partner of Nederman’s for many years.
The Arboga Group, Sweden, was acquired in March 2008.
The company develops, produces and markets solutions for environmental management, transport and recycling of metal waste and cutting fluids, mainly for the metal working industry. One of Nederman’s growth strategy objectives is to extend the application areas in various industrial industries through acquisitions. The acquisition of the Arboga-Darenth is part of this strategy. Nederman’s high and low vacuum applications for extraction and filtration of air have been used for many years by the metal working industry. These applications have, together with Arboga-Darenth’s solutions, laid the foundation for Nederman’s new application area, Machining, introduced to the market in 2008.
Nederman acquired the automotive division of Assalub in Åtvidaberg, Sweden, in March 2008. The acquisition is part of Nederman’s continued investment in systems for rational vehicle repair shops.
Orders from wind power industries
Nederman received a number of significant orders for solutions during the year from the composite machining industry. The use of composite materials in manufacturing is on the increase for cars, boats, aircraft, rotor blades for wind turbines, train carriages, cisterns, etc. Machining of composite materials creates harmful dust, particles and fibres. Extracting these substances immediately minimises the health risks and safeguards quality. Dust and particles from machining are likewise stopped from entering machines and electronic equipment, which minimises interference in production.
Nederman Denmark received an order in January 2008 worth SEK 7 million from one of the world’s leading manufacturers
of wind turbines. Nederman India signed a three-year contract in April with an internationally active company in wind power. Another significant order was received in July in the same area.
Opening of Nederman Shanghai
The opening of Nederman’s assembly and logistics facility in Shanghai in June safeguards the company’s continued expansion on a prioritised growth market.
Nederman Shanghai* will be able to provide customers in the Asia-Pacific region with shorter lead times, improved service levels and access to the company’s system solutions.
The facility has a floor area of around 3,400 sqm with all the assembly of a range adapted especially to the market. The facility is also the logistics centre for Asia, Australia and New Zealand and the local and regional sales organisation is located in the same building. Sweden’s consulate general in Shanghai, Lars Andreasson and representatives from the local Chinese authorities were present at the opening ceremony.
Significant orders from Turkey and the US
Nederman received two major orders for exhaust extraction applications during the year. An order worth SEK 10 million was signed in March for 188 motor vehicle test stations in around 80 of Turkey’s cities. All applications were put into operation in mid 2008 and are the same applications used by the Swedish Motor Vehicle Inspection organisation. Turkey’s investment in working environment-friendly systems for exhaust extraction is a result of the country’s adapting environmental legislation to current EU regulations.
Nederman signed a five-year contract in July worth around SEK 25 million with the New York City Fire Department.
The contract includes the repair, maintenance and upgrade of the exhaust extraction units at around 250 of New York’s fire stations.
The opening of Nederman’s assembly and logistics facility in Shanghai in June 2008
Press releases 2008
January 7 Nederman acquires Töredal Verkstad AB
January 25 Nederman receives major orders from the wind power industry March 6 Significant order from motor vehicle test stations in Turkey March 12 Nederman acquires Arboga-Darenth
March 25 New acquisition strengthens Nederman’s market presence in the automotive workshop segment
March 27 Noteification to attend the Annual General Meeting of
April 30 Nederman’s Annual General Meeting 2008 June 12 Nederman opens a new facility in China July 2 Nederman acquires AB Norclean in Varberg
July 9 Nederman signs contract with New York City Fire Department July 10 Nederman receives major order from the Danish
wind power industry July 24 Q2 report January - June 2008
* Legal name: Nederman Air Clean (Shanghai) Co., Ltd.
ÅTERVINNINGSBARA MATERIAL
Business concept
Nederman’s vision is to provide the global market with products, systems and solutions under the Nederman brand based upon the motto “Improving your workspace”.
Nederman is a world-leading player in the working environment area, both in terms of technology and market success.
Using its strong global market position, the company’s objective is to continue driving development towards healthier working and production environments.
Nederman focused objectives for growth are:
• Expanding into new application areas.
• Expanding the value chain through increased sales of systems directly to the end user and an increased share of aftermarket sales.
• Geographic expansion, mainly on growth markets.
• Developing products and concepts.
Nederman’s solutions create:
• Cleaner, safer working environments with reduced impact on indoor and outdoor environments
• More effective production with fewer operational disturbances
• Improved use of energy
• Profitable and eco-friendly recycling of waste products
• Improved quality of end-products
• Improved environmental image and increased competitive strength
Through products, systems and application expertise to provide solutions that safeguard a clean working environment, efficient and safe production and eco-friendly reuse
Nederman is one of the world’s leading environmental technology companies and develops, produces and markets proprietary products and systems for the extraction and filtration of particles, welding smoke and vehicle exhaust fumes. The company’s extensive range of hose and cable reels also make work more efficient by providing easy access at the workplace to oil, air, water, gas and electricity while improving the ergonomics of the workstation and minimising the risk of injury.
In 2008 the company introduced solutions for the eco-friendly, cost-effective treatment and reuse of cutting fluids and the profitable management and refining of cuttings.
Through its comprehensive range of products, systems and services, combined with extensive expertise, Nederman is able to provide total system solutions in traditional and new application areas.
Strong brand
Nederman holds a strong market position in a fragmented industry, where competition is mainly local or regional. The company is almost twice as big as its closest rivals on many markets. The brand is well known and globally established.
Nederman is also a leading system supplier with a global
distribution network, which provides significant benefits of
scale. Nederman is well equipped for continued growth.
Words from the President and CEO
Nederman reported stable growth in 2008 and it was also a year where we made further advances to our positions.
Net sales for the year amounted to SEK 1,272 million, an increase of 22 per cent compared to last year.
The increase was 21 per cent in local currency. 10 per cent of the increase relates to acquisitions and 11 per cent relates to organic growth. We managed to safeguard an improved operating margin despite the dramatic slowdown to the global economy in the second half of 2008. The operating profit was SEK 141 million, which is a rise of 23 per cent.
Expansion in new application areas
A number of markets saw good organic growth. In parallel, and in line with our strategy to grow in new application areas, we acquired Arboga- Darenth in the spring 2008. This laid the foundation for the new Nederman Machining application concept where Nederman’s products and systems are combined with Arboga-Darenth’s solutions for swarf management, cutting fluid treatment, leaked oil separation and oil mist separation.
Nederman has held a well-established position in welding applications for the past 60 years.
Nederman Machining now allows us to offer the metal working industries total system solutions, which further strengthens our position, while new industries are opened up and existing
Strengthened position via acquisitions
We acquired the automotive division of Assalub in Åtvidaberg in March.
The acquisition provides greater opportunities to reach the automotive industry’s aftermarket, which is in line with our strategy of expansion in the value chain. Systems for lubricant management have been marketed for some years on a number of markets and will be introduced on new markets in the future.
AB Norclean in Varberg was acquired in Quarter 3 2008. The company provides products and services in the area of environmental technology with the focus on managing and collecting harmful substances when sandblasting and fluid handling.
The company has sold Nederman Norclean products on the Swedish market since 1968.
Outlook for 2009
Conditions are very insecure as we go into 2009 and the near future is very difficult to predict. Some of our markets will be affected more than others. Our global presence allows us to balance this out to a certain degree through various initiatives.
Nederman is continuing its general in- house efficiency initiatives in all areas.
As mentioned previously the company expects weaker market demand in 2009 and has therefore prepared specific rationalization schemes to meet downturn in sales.
These will be introduced in relation to the developing demand.
A significant overall factor that will benefit us is that an increasing number of countries are placing greater demands on sound, safe and effective working environments.
The need for our services for service and maintenance will probably increase. This is where Nederman can offer a significant program of service and maintenance initiatives.
As investments in new vehicles fall, companies in the automotive sector will probably in future face a greater need for aftermarket service. This is where Nederman can offer a wide- ranging program of various solutions, which make working in automotive workshops more effective and profitable.
We will continue working in 2009 with boosting sales of our systems. Our system solutions that we’ve developed for the composite working industry have been very successful. As wind power becomes more popular there will be significant market potential in it for us.
With the strategy that Nederman has successfully worked with and will continue with, we are expecting to make headway even on a weaker market.
Sven Kristensson President and CEO
A year of
forging ahead
0 20 40 60 80 100
%
2006 2007 2008 44%
32% 27%
2006 2007 2008
85 114
141
0 20 40 60 80 100 120 140 160
11,1%
11,0%
9,7%
2 4 6 8 10
4,73 6,42
7,90
1,42 - 2,37
1,93 - 3,21 2,37 - 3,95
2006 MSEK
Förvärv 8%
877,8 1041,4 1272,3
1%
17%
3%
10%
11%
2007 2008
Organisk tillväxt Tidigare års försäljning
Copyright Saab AB. Photographer: Saab AB
Operational objectives
The main operational objectives governing Nederman’s growth are:
• identifying new application areas and geographic markets with significant growth potential
• establishing Nederman as a brand and as system supplier to chosen industries and markets
The global wind power industry is an example of a growth industry with huge potential where Nederman has established a leading market position.
Financial objectives
Nederman will create value for shareholders by achieving set financial objectives and constantly working towards improved profitability.
• Annual sales growth of 8-10 per cent over a business cycle, of which at least half will be organic growth
• An EBITA margin of at least 10 per cent over a business cycle
• A net debt/equity ratio of between 0.5 and 1.0
• A dividend policy of 30-50 per cent of net profits after tax being paid to shareholders
Nederman is constantly working to improve profitability. The focus of this initiative is the continued reduction of operational costs, improved efficiency in product supply, purchasing and sales, and a constant screening of profitability on all the markets where Nederman operates.
Operating result EBIT
Profitability and growth objectives
New laws and regulations when machining composite materials Dust, particles and fibres that arise when machining composite materials (sawing, grin- ding and polishing) can cause skin irritation and respiratory damage. Working environment organisations in many countries have highlighted the risks and introduced regulations and directives requiring grinding and cutting machines to be fitted with extraction devices to keep pollution levels under set limits.
Nederman has an economic responsibility to create growth and profitability for all interested parties. The objective over time is to increase the value of the company and thereby safeguard a stable development and long-term yield for shareholders. Because our products and systems create a clean, safe environment we contribute to positive social development.
Dividend 2,50 Dividend policy
Net debt/equity ratio
%
Dividend policy Sales growth
Result share per SEK
SEK m
SEK m
Through acquisitions Organic growth Sales of the previous year 1,272
1,041
878
Operating- margin %
Composite materials are becoming more common when manufacturing aircraft parts, car parts,
boats and wind turbine blades etc., due to the reduced weight providing more energy-efficient
designs. The composite machining industry is therefore a growth industry with huge potential
where Nederman has established a leading market position.
Increased social responsibility
Increased social responsibility has a great influence on global working environments. Multinational companies whose products are manufactured in low-income countries are becoming more involved than before in their suppliers’
working environments, partly because trends in society demand it and partly because more companies are intro- ducing policy guidelines concerning ethical and social responsibility. Good citizen Codes of Conduct are extending into the area of working environment.
The driving forces include employee interest in how and under what working conditions the products are manufactured, the activities of environmental organisations and media coverage.
International cooperation
International collaboration in the field of working environments has increased as the manufacturing industry is moving production between countries to become more cost-effective. International demands and norms are an increasingly important driving force. The working environment was not a prioritized area in many countries a few years ago. Working environment issues are now a priority thanks to companies that uphold good working environments seeing this as a competitive advantage.
Demands for uninterrupted, clean production Dirty, tough industrial environments with no ergonomic solutions cause unnecessary strain on employees, tools and production systems. Operational interference and stoppages when production systems are exposed to dust and other contamination have a negative impact on the company’s finances and competitive strength. This drives the demand for clean environments and solutions that safeguard performance and quality. Effectively removing dust and other particles is
but also to remove harmful particles, organic substances and gases that arise when machining.
Extra interest for reduced environmental impact The growing global commitment to reduce the environmental impact from industries has meant an increased demand for products and systems for extraction and filtration and the management of waste products. Nederman’s systems are designed to capture and filter particles, fibers, welding fumes and exhaust gases and as they arise in order to prevent them spreading to the surroundings. The technology is very effective and requires a lot less energy compared to central ventilation systems.
Nederman also constantly develops solutions that reduce energy use in the systems. One example is our automatic valve that adjusts extraction at each workstation according to requirements. Workstations that aren’t in use are shut down.
Nederman is well equipped for continued expansion on a growing global market as more and more countries understand the importance of safe and sensible working environments. The driving forces are stricter working environment regulations and norms, and increased
expertise about work-related injuries and the medical consequences of poor working environments.
Meanwhile, systems and products must meet stricter demands for uninterrupted, energy-efficient production.
Global forces behind improved working environments
Stricter rules concerning exposure to welding smoke
Around 35,000 professionals in Sweden work with welding and cutting. However, more people use welding equipment daily as part of their profession, meaning that the number of users is considerably higher. The European figure for welders is 730,000 and 5.5 million welding-related jobs.
Welding smoke consists of small particles that if inhaled are absorbed by the pulmonary alveolar and then transported out into the various organs of the body where they are stored. Welding smoke in general is considered as a carcinogen and causes bronchial irritation, bronchitis and in some cases even Metal Fume Fever.
Chrome and manganese especially affect the central nervous system and hexa- valent chrome Cr(VI) is a recognised carcinogen. Many countries have therefore introduced (or will introduce) restrictions to cut the limit for welding smoke exposure. The US* and Sweden** introduced stricter limits for the exposure of welding smoke containing hexavelent chrome and manganese in 2007.
Nederman has held a well-established position in welding applications for 60 years and supplies systems and complete solutions for welding and mechanical industries (see page 10).
*) OSHA. Occupational Safety & Health Administration, U.S. Department of Labor
**) Swedish Work Environment Authority regulations: www.av.se
5 10 15 20
%
Profitable solutions for the machining industry The global machining industry has been an important industry for Nederman’s Extraction & Filter business area for many years. The working environment solutions provided have included systems for extracting and filtering welding smoke and equipment for keeping machinery and premises clean.
Developments towards a greater degree of automation and manufacturing places new environmental, production and cost demands on managing waste products for example.
Waste metal shavings and cutting fluids have traditionally been dealt with manually with a negative impact on the indoor and outdoor environments. New technology makes it possible to deal with waste material profitably, environmentally and automatically.
Launch of Nederman Machining
Following the acquisition of Arboga-Darenth in 2008, Nederman launched the new Nederman Machining application concept. The concept allows Nederman’s products and systems to be combined with Arboga-Darenth’s solutions for dealing with metal shavings, cutting fluids, leaked oil separation and oil mist separation. These solutions allow the amount of cutting fluids to be cut dramatically through cleaning and reuse in production. As the cost of dealing with metal shavings and used cutting fluids drops
there are environmental benefits in the form of less transport of used and waste products.
Expansion towards vehicle workshop applications Corporate acquisitions during the year have also meant increased opportunities for Nederman’s Hose & Cable Reels business area to provide a wider range of total solutions on selected local markets. Expansion towards vehicle workshops took place in 2007 through the acquisition of the Belgian installation company LEDA. The acquisition means extra resources towards the aftermarket in Belgium, while LEDA provided Nederman with expertise and solutions for lubricant management. In the same way the acquisition of Assalub Automotive in March 2008 has given Nederman a broader base for providing Swedish vehicle workshops with rational, eco-friendly solutions for lubricant management.
Aftermarket sales strengthen the value chain The trend towards an increased demand for preventative maintenance and regular service including service contracts continued in 2008. Aftermarket sales and Nederman’s direct sales make up an important part of the total value chain.
Quick supplies through stocking critical spare parts, an extensive service organisation, customer-specific service contracts (Nederman Maintenance Contract) and flexible service packages are the cornerstones of increased aftermarket sales.
• Expansion towards new application areas
• Expansion in the value chain through increased sales of systems and customer-specific solutions plus increased aftermarket sales
One of the objectives of Nederman’s growth strategy is to expand throughout the value chain through an increased level of system and aftermarket sales, while expanding in new application areas.
Completed corporate acquisitions in 2008 have added products, technologies and system expertise
that further boost Nederman’s ability to provide total system solutions. The strategy strengthens the company’s already market-leading position while new industries open up and existing customer collaboration is improved.
Nederman’s growth strategy includes expansion throughout the value chain by providing customer-specific solutions. These are built on proprietary products, extensive experience in the field of working environments and global operations with a strong link to local markets.
PRE-STUDIES PLANNING SYSTEM DESIGN INSTALLATION COMMISSIONING TRAINING MAINTENANCE
Expansion throughout the value chain creates growth
In 2008 aftermarket sales accounted to 17 per cent of the net sales compared to 3 per cent in 2000.
Aftermarket sales
ISO
9 00 1 & I S O 1 40 01 CERTIFI ED MA N U FACTUR
ING
QUALITY AND KNOW-HOW
SINCE 1944
Continuous product development strengthens the brand
The company’s long-term product development strategy is an important part of the initiative towards further strengthening Nederman as a globally leading player in the working environment area. The market should associate Nederman, and the products launched, with innovation, consistent design, user-friendly function and high operational reliability.
Development of new application areas
Nederman runs technical development in many areas. The development initiatives are managed by Nederman’s own specialists in close dialogue with the company’s customers and sales companies who provide information about trends, needs and development requirements. The proximity to the market makes it possible to quickly develop products and solutions that are adapted to new industrial industries.
One example is solutions for the composite material manufacturing industry. Other examples include products that cater for the food, chemical and pharmaceutical industries’
need for hygienic and explosive-proof working environments.
Manufacture and assembly Nederman’s in-house production focuses on the assembly of end- products and systems, while component manufacturing takes place at a
selected number of manufacturers in Western and Eastern Europe and Asia.
This production split has reduced manufacturing costs, while Nederman’s focus on final assembly provides increased flexibility. The company’s modular platform concept simplifies assembly and makes it more efficient, while allowing cost-effective adaptation of applications to the individual customer.
Manufacture at contracted
subcontractors takes place with tools and dies owned by Nederman, which cuts the risk of product counterfeit.
The same environmental demands that apply to the company’s own production units are placed on the subcontractors.
Nederman’s Swedish production and assembly units are in Helsingborg, Arboga and Jung. Assembly units abroad are located in Mississauga in Canada, Sandefjord in Norway and Shanghai in China.
The assembly and logistics facility in China, which opened in 2008, now provides customers in Asia, Australia and New Zealand with increased access to the company’s products and systems.
The unbroken chain
Application solutions Construction/Development Assembly
The new assembly and logistic centre in
Shanghai, China, provides customers in Asia,
39%
2006 5
10 15 20 25 30 35 40 45 50
44%
50%
2007 2008
%
The unbroken chain
Assembly
Effective sales channels
Nederman has indirect and direct sales.
Nederman has always prided itself on having a good balance between these sales channels in order to reach customers with different purchasing patterns and needs.
Indirect sales mainly include product sales and have traditionally been important to Nederman. Indirect sales take place via importers and distributors on markets where
Nederman isn’t represented by its own sales organisation.
In countries with own sales organisa- tions this can be complemented with various industry-specific retailers.
Ahlsell and Luna in Sweden, IDE, Nortwest and Trost in Germany and Arco and Buck Hickman in the UK are examples of some retail chains that Nederman cooperates with.
Nederman’s aim is to increase the cooperation with leading local
distributors through various local campaigns, market activities and via a comprehensive specialist catalogue.
An important phase of this initiative is to build up and strengthen Nederman’s brand towards end customers.
Direct sales take place directly with end customers through Nederman’s own sales organisation. The business mainly includes systems and solutions where Nederman’s experience makes it possible to meet customers’ needs for specific applications, such as the composite material machining industry, vehicle workshops etc.
Nederman’s undertaking can cover everything from planning and project work to regular maintenance.
Nederman continued to increase the share of direct sales in 2008 to end customers via own sales units in 25 countries – from 44 per cent of net sales in 2007 to 50 per cent in 2008.
Direct sales Logistics
Direct sales increased from 39 per cent in 2006 to 50 per cent in 2008
Aftermarket
Nordamerika 9%
Övriga Europa 42%
Storbritannien 11%
Norden 29%
Övriga världen 9%
Nordamerika 9%
Övriga Europa 42%
Storbritannien 11%
Norden 29%
Övriga världen 9%
Subsidiaries in 25 countries Nederman is the market leader on an expanding global market. Demands for cleaner, safer working environments are leading to more countries introducing stricter regulations on working environments. Developments are also being driven forward by an increasing general interest and commitment to environmental improvements.
Nederman is well equipped for this development and is continuing to expand mainly on growth markets.
The rate of establishing the company in more regions has increased in recent years on a number of rapidly expanding markets. Examples of countries where Nederman established its own sales organisations between 2005 and 2007 include Rumania, Hungary, Slovakia, Russia, China and India.
Nederman established its own sales company in Turkey in December 2008.
Nederman currently has subsidiaries in 25 countries plus agents and distri- butors in another 30 or so countries.
Geographic expansion in Asia was strengthened in 2008 by establishing an assembly and logistics facility in China.
Nederman’s investment in new markets has followed the industrial developments in different countries and regions.
Comprehensive applications Industries on growth markets often go straight for comprehensive, modern working environment applications rather than gradually going through various technology generations.
Nederman has a well-established organisation in countries investing in systems with the latest working environment technologies and has the expertise and capacity to meet the demand for adapted applications and system solutions.
Invoicing in the Nordic region rose by 44 per cent in 2008 compared to the same period in 2007, of which around 21 per cent was via acquisitions, 21 per cent via organic growth and around 2 per cent via positive currency effects.
The Danish market performed well, partly as a result of the successes of Nederman’s application solutions for manufacturers of wind turbines.
Invoicing in the UK rose in 2008 by 39 per cent in local currency, of which 29 per cent via acquisitions and 10 per cent via organic growth.
Negative currency effects of 10 per cent negatively impacted the increase by 29 per cent when converted to Swedish currency.
Invoicing in the rest of Europe rose in 2008 by 12 per cent in local currencies.
Positive currency effects of 5 per cent gave an increase of 17 per cent in Swedish currency.
Invoicing in North America fell in 2008 by 10 per cent in local currencies.
A negative currency effect of 2 per cent was equivalent to a drop of 12 per cent for the year when converted to Swedish currency. Because of a drop in federal support for investing in fire stations, sales fell over the first nine months of the year. Sales did however develop positively in quarter 4 2008 compared to the same quarter last year (calculated in local currencies).
Invoicing rose in other countries (outside North America and Europe) in 2008 by 27 per cent (in local currencies), of which 8 per cent via acquisitions and by 19 per cent organically.
Expansion on new and traditional markets
Geographic division
of net sales 2008 Nederman’s growth strategy focuses on continued geographic expansion into growth markets. This expansion is taking place by establishing the Nederman brand on new markets and by strengthening the sales and distribution organisation on existing markets.
Nordic region 29%
United Kingdom 11%
Rest of Europe 42%
North America 9%
Rest of the World 9%
Factors driving market developments
• Increased general awareness about the relationship between working environment and adverse health effects
• New and future EU countries’ ambition to adapt working environments to EU legislation
• Companies moving production to low salary countries are increasingly demanding that their suppliers provide a good working environment
• Rapid growth in expansive industrial industries, i.e. in Asia
• Many countries introducing new laws and ordinances for working environments
• Increased interest from companies to invest in production technologies and equipment that improve productivity with reduced energy consumption
• Nederman has a broad international distribution structure while most of its competitors mainly provide products and services to one country or one region, thus making it more difficult to be prioritised suppliers for major clients at an international level.
• Nederman is one of a few players in the industry that can control the entire chain from product development to the aftermarket. The company has developed solutions in close collaboration with customers in various industries for many years and is now an expert in its field. This provides our customers with the confidence and security that’s being increasingly prioritised.
• Nederman can meet customers’ varying needs for vacuum solutions. Nederman also offers a comprehensive range of hose and cable reels, systems for managing lubricants and equipment for cleaning and recycling cutting fluids and the processing of metal shavings.
Assembly and logistics centres Own sales companies Agents and distributors Mississauga
Shanghai Sandefjord
Helsingborg
Arboga
Jung
Strong global market position
Nederman has a strong global market position. Global competition in working environment technology is strongly fragmented. Competitors are mainly local/regional and concentrate on low and high vacuum solutions or hose and cable reels. Nederman is able to provide the market with solutions in many areas.
Nederman’s most important success factors include a high degree of innovation and a prominent position as technology leader and as system supplier to take responsibility for the entire process from design to operable application solutions.
Nederman is a traditionally well-established brand with a
global distribution network.
Nederman concentrates on three customer segments:
Metal fabrication industry, Automotive industry and Other industry.
The metal fabrication industry consists of the welding and machining application areas.
The automotive industry includes the automotive work- shops, motor vehicle inspection and emergency stations.
Other industry includes the composite material machining industry, chemicals, food and pharmaceutical industries offshore and laboratories.
The Nederman organisation comprises two business areas:
Extraction & Filter Systems and Hose & Cable Reels.
The business areas’ task is to develop and provide the solutions the market needs in order to meet the demands of clean, safe working environments plus uninterrupted and safe production.
Customer-oriented total solutions
• Extraction and exhaust systems
• Reels for water, compressed air, electricity etc.
• Systems for distributing oil, grease and other fluids
• Cleaning systems for vehicles and premises
• Extraction/filtration of welding smoke
• Extraction/filtration of welding smoke
• Reels for water, compressed air, electricity etc.
• Extraction/filtration of particles when cutting, grinding etc.
• Cleaning systems for premises
Metal fabrication, welding Vehicle workshops, vehicle inspection and emergency stations
• Management, transport/delivery of metal shavings
• Filtration/cleaning of cutting fluids
• Crushing and briquetting of metal shavings
• Filtration/cleaning of oil mist
• Machine cleaning and general cleaning
• Extraction/filtration of welding smoke
• Extraction/filtration of grinding dust
• Extraction/filtration of fumes and solvents
• Cleaning systems for premises
• Reels for water, compressed air, electricity etc.
Composite material industry
Machining
Nederman Machining provides the machining industry with complete solutions for managing metal shavings, cutting fluids, oil mist separation etc.
Extraction & Filter Systems business area
The Extraction & Filter Systems business area covers four product areas: High vacuum, Low vacuum, Exhaust systems and Machining, which was added after the acquisition of Arboga-Darenth in 2008. The business area
provides solutions for the extraction and filtration of welding smoke, exhaust gases, oil mist and solutions for managing metal shavings, cutting fluid cleaning, leaked oil separation and cleaning of machinery and premises
High vacuum product area
High vacuum involves the extraction and filtration of large particles using high speeds and high negative pressure very close to, or directly at, source. Examples of applications include extraction of grinding or cutting dust, extraction of metal shavings and cleaning machinery and workplaces.
Nederman’s high vacuum applications include everything from large stationary installations to portable units and extraction solutions integrated for use with a range of hand- held tools.
Low vacuum product area
Low vacuum involves extraction and filtration using low negative pressure and large air volumes close to the source.
The products are used where the air is polluted by small, slow-moving particles. Common application areas include welding, oil mist filtering and managing ingredients in powder form during pharmaceutical and food manufacturing processes. Extraction is carried out with the help of
extraction arms, vacuum hose attachments, casings and housings. Nederman has also developed a range of products for laboratories, schools and environments where there is a risk of explosion.
Exhaust system product area
A specific low vacuum application area is exhaust gas extraction and filtration for cars, buses and other types of vehicle. Customers include vehicle workshops, motor vehicle inspection centres, emergency services vehicles and the automotive manufacturing industry. A specific range has been developed for emergency services vehicle centres where special demands are set on absolutely clean environments because personnel spend so much time working and sleeping in these buildings.
Machining product area
Arboga-Darenth’s and Nederman’s combined range allows the machining industry to be provided with complete solutions for managing metal shavings, cutting fluid cleaning, leaked oil separation, oil mist separation and products and systems for cleaning machinery and premises.
Extraction & Filter Systems business area 2008 The business area’s net sales for the year rose by 23.9 per cent to SEK 1,073 million compared to the previous year and the profit for the year was SEK 124 million (SEK 99 million). The acquisition of Arboga-Darenth is important for continued expansion, meaning that the business area now covers a larger application area in the metal fabrication industry.
Extraction & Filter Systems 2008 2007 2006
Net sales, SEK m 1,073 866 743
Growth 23.9% 16.5% 8.5%
EBIT, SEK m 124 99 71
EBIT margin 11.6% 11.4% 9.6%
Hose & Cable Reels 2008 2007 2006
Net sales, SEK m 199 175 135
Growth 13.7% 29.6% 9.8%
EBIT, SEK m 17 15 14
EBIT marginal 8.5% 8.6% 10.4%
Hose & Cable Reel products improve efficiency by
providing easy access at the workplace to media such as oil, compressed air, gas and electricity. This reduces the risk of tripping over cables plus wear and tear and makes the job of cleaning much easier.
The business area’s products are used for many types of applications, from lubricating vehicles to high-pressure water hoses in food preparation. Parts of the product range are made from stainless steel for specifically demanding industrial environments.
Nederman has also developed a range of cable reels that are approved for use in environments with the risk of explosion.
Nederman’s acquisition of the Belgian company LEDA in 2007 was a step towards developing Nederman’s applications and solutions for vehicle workshops. Nederman acquired the Automotive division of Assalub in Åtvidaberg in March 2008, which is yet another step towards Nederman’s continued investment in systems for rational lubrication management. These systems have been introduced in Belgium, Sweden and Spain and will be introduced at a later date onto a number of new markets.
Hose & Cable Reels business area 2008
The business area’s net sales for the year rose by 13.7 per cent to SEK 199 million compared to the previous year The profit for the year was SEK 17 million (SEK 15 million).
Hose & Cable Reels business area
The Hose & Cable Reels business area provides workshops and industrial companies with effective, ergonomic and safe access to different media through a broad range of hose and cable reels and solutions for managing lubricants and service fluids.
Nederman’s acquisition of the Belgian company LEDA in 2007 and the acquisition of Assalub’s Automotive division in 2008 strengthen Nederman’s
position for solutions for rational lubricant management.
Nordic region 52%
United Kingdom 12%
Rest of Europe 23%
North America 9%
Rest of the World 4%
Kvinnor 21%
Män 79%
Women 21%
Men 79%
Lifecycle perspective
Nederman is certified according to the ISO 14001 standard for environmental management systems and applies a comprehensive lifecycle perspective, covering product development, manufacturing, distribution, customer use through to destruction.
The objective of the environmental work, formulated in Nederman’s Environmental Policy, is to minimise the company’s external environmental impact.
Meanwhile Nederman’s personnel are committed to the environmental work and are authorised and responsible for reporting non-conformance.
New recruits to the company are informed of the current environmental scheme and policies. Training and information activities are carried out on an ongoing basis for the various personnel categories.
Environmental requirements Nederman places demands on suppliers and retailers to live up to the company’s environmental policy.
The selection of new suppliers is preceded with careful analyses.
Nederman checks continuously that the suppliers comply with the demands and regulations.
When new functions and processes are introduced the impact on the environment is thoroughly analysed.
Part of the lifecycle perspective also includes cutting the environmental impact from incoming and outgoing transport. Environmentally certified companies are used as much as possible.
The aim of 99 per cent for external transport was achieved in 2007.
The focus in 2008 has been to increase the number of certified companies responsible for incoming transport.
Environmental analyses Detailed environmental analyses are conducted for all product development so that, to the greatest extent, material is used that minimises the company’s negative environmental impact.
The material in new developed products are, with a few exceptions, completely recyclable. The remaining parts goes to energy recovery.
Common basic values
The internal personnel initiatives cover many areas – from training activities to company healthcare. Training on issues of importance for our own working environment is held on an ongoing basis at the Nederman Training Centre in Helsingborg and at the local sales units around the world.
Nederman is a multi-cultural company with around 760 employees in 25 countries. The acquisitions that took place in 2008 and the establishing of an assembly and logistics facility in China have meant that Nederman’s headcount has been boosted by around 100.
The cultural and ethnic diversity is a success factor in local marketing on many geographic markets. Common basic values with guidelines have been compiled in the company’s “Code of Conduct”. This document is cemented in the organisation and has been drawn up according to the OECD guidelines for multinational companies.
Division of employees by region
Care for the environment and employees
Division by gender 2008
500 1 000 1 500 2 000 2 500
2007 2008
MAJ JUL SEP NOV JAN MAR MAJ JUL SEP NOV
30 40 50 60 70 80 90 100
Omsatt antal aktier 1000−tal Aktien
OMX Stockholm Small Cap PI
Nederman Holding AB
© NASDAQ OMX
OMX Nordic EUR PI – Nederman Holding Price performance
Dividend policy
30–50 per cent of the year’s net profit after tax, taking into account the capital structure and acquisition plans.
Shares 2008
Shareholders 31 December 2008
Number
of shares Share
%
1 Investment AB Latour 3,100,000 26.5%
2 Ernströmgruppen AB 1,172,000 10.0%
3 IF Skadeförsäkringar 1,160,400 9.9%
4 Lannebo Microcap 878,000 7.5%
5 Aktia Sparbank FI 400,000 3.4%
6 United Nation Staff Pension Fund UK 339,605 2.9%
7 BP2/Henderson Pan European FR 328,950 2.8%
8 Handelsbankens fonder 310,681 2.7%
9 Robur småbolagsfonder 297,650 2.5%
10 Clearstream Banking 289,704 2.5%
10 largest, total 8,276,990 70.7%
Other shareholders 3,438,350 29.3%
Total number of shares 11,715,340 100.0%
Percentage foreign ownership 21.6%
The Board and CEO proposes the Annual General Meeting a dividend of SEK 2.50 per share for finacial period 2008, amounting in total to SEK 29.3 m.
Nederman’s shares have been listed on the Nasdaq OMX Stockholm AB since 16 May 2007 as “NMAN”. At year-end the share holders’ equity was SEK 410.4 m.
500 1 000 1 500 2 000 2 500
2007 2008
MAJ JUL SEP NOV JAN MAR MAJ JUL SEP NOV
30 40 50 60 70 80 90 100
Omsatt antal aktier 1000−tal Aktien
OMX Stockholm Small Cap PI
Nederman Holding AB
© NASDAQ OMX 500 1 000 1 500 2 000 2 500
2007 2008
MAJ JUL SEP NOV JAN MAR MAJ JUL SEP NOV
30 40 50 60 70 80 90 100
Omsatt antal aktier 1000−tal Aktien
OMX Stockholm Small Cap PI
Nederman Holding AB
© NASDAQ OMX
The Share
Nederman Holding AB
Number of shares traded thousands per mounth
2500 100
90 80 70 60 50
MAY 2007 JAN
JUL SEP NOV 2008 MAR MAY JUL SEP NOV
40
30
2000
© NASDAQ OMX
