INVESTING IN LAMMHULTS DESIGN GROUP 09 09

09

THIS ANNUAL REPORT IS ALSO AVAILABLE IN SWEDISH

We at Lammhults Design Group put our heart and soul into creating interiors and spectacle frames with a high design value, high quality and innovative functions. Our method of creating business benefit is primarily based on four strategic strengths. Our brand-oriented strategy puts the focus on the customer and creates opportuni- ties for synergies throughout the entire chain – from purchasing to sales. We have strong finances, which gives us good potential for growth, both organic and via acquisitions. We have operations both at early and late stages of the business cycle, which mitigates the effects of fluctuations in the economy. Finally, we have robust export potential. Today, sixty-four percent of our sales are already made to markets outside Sweden. In library interiors, we are actually world leaders. On the following pages, you can read more about our method of creating business benefit, resulting in a good return on investment and long-term value for shareholders.

INVESTING IN LAMMHULTS DESIGN GROUP

CONTENTS

1 THE PAST YEAR

2 A WORD FROM THE PRESIDENT

6 BUSINESS CONCEPT, GOALS AND STRATEGIES 8 OUR ORGANISATION

9 OUR BACKGROUND 10 OUR WORLD

12 EXTERNAL FORCES THAT DRIVE OUR BUSINESS 24 LAMMHULTS OFFICE

28 LAMMHULTS HOME 32 LAMMHULTS LIBRARY 36 SCANDINAVIAN EYEWEAR 42 CORPORATE GOVERNANCE REPORT 46 THE SHARE

49 FIVE–YEAR REVIEW 50 BOARD OF DIRECTORS 52 SENIOR EXECUTIVES

57 REPORT OF THE BOARD OF DIRECTORS

61 INCOME STATEMENT, STATEMENT OF COMPREHENSIVE INCOME, STATEMENT OF FINANCIAL POSITION, STATEMENT OF CHANGES IN THE GROUP’S EQUITY, STATEMENT OF CASH FLOWS FOR THE GROUP

65 INCOME STATEMENT, STATEMENT OF COMPREHENSIVE INCOME, STATEMENT OF FINANCIAL POSITION, STATEMENT OF CHANGES IN THE GROUP’S EQUITY, STATEMENT OF CASH FLOWS FOR THE PARENT COMPANY

68 NOTES

96 AUDITORS’ REPORT

LAMMHULTS OFFICE

BUSINESS AREA CONCEPT:

Lammhults Office develops and markets interiors products for public environments. Lammhults offers visually strong, timeless furniture with a high design value, and Abstracta develops products for visual communication and room division.

CUSTOMERS:

Lammhults Office works mainly via architects and interior designers at the prescriptive stage.

Retailers form an important part of the sales process that finishes with the end customer – usually companies and organisations.

LAMMHULTS HOME

BUSINESS AREA CONCEPT:

Lammhults Home develops and markets home interiors products. With its upholstered furniture and innovative storage solutions, Lammhults Home has one of the home interiors market’s strongest product ranges.

CUSTOMERS:

Lammhults Home’s end customers are primarily private individuals, but its products are also used in public environments, e.g. hotels.

SHARE OF THE GROUP’S BUSINESS:

PROFIT FOR THE YEAR: PROFIT FOR THE YEAR:

SHARE OF THE GROUP’S BUSINESS:

BRANDS: BRANDS:

Net sales

SEK 283.3 million (352.9)

Operating profit

SEK 25.6 million (46.6)

Net sales

SEK 93.3 million (86.8)

Operating profit

SEK 3.7 million (3.5)

BIGGEST MARKETS:

Sweden, Norway, Denmark, Turkey and Germany.

BIGGEST MARKETS:

Sweden, Norway, Germany, Finland and Denmark.

34% 11%

LAMMHULTS LIBRARY

BUSINESS AREA CONCEPT:

Lammhults Library develops and markets attractive functional interiors for libraries, schools and other public meeting places, such as educational premises and cultural centres. The business area works partly with project sales of complete interiors systems, and partly with aftermarket sales of furniture and consumables.

CUSTOMERS:

Like Lammhults Office, Lammhults Library works closely with architects and interior designers who design and propose interiors for end customers.

Lammhults Library’s end customers are mainly actors whose operations are financed using public funds, e.g. municipalities or educational institutions.

SCANDINAVIAN EYEWEAR

BUSINESS AREA CONCEPT:

Scandinavian Eyewear develops and markets spectacle frames. The business comprises the company’s own Skaga brand and licensing deals for developing collections for other brands.

CUSTOMERS:

Scandinavian Eyewear’s direct customers are independent opticians and optician chains.

End customers are private individuals.

PROFIT FOR THE YEAR: PROFIT FOR THE YEAR:

SHARE OF THE GROUP’S BUSINESS: SHARE OF THE GROUP’S BUSINESS:

BRANDS: BRANDS:

Net sales

SEK 365.0 million (353.5)

Operating profit

SEK 35.7 million (45.3)

Net sales

SEK 104.8 million (113.2)

Operating profit

SEK -5.9 million (4.4)

BIGGEST MARKETS:

Germany, France, Denmark, Spain and Sweden.

BIGGEST MARKETS:

Sweden, Finland, Denmark, Norway and the US.

43% 12%

Serving a global clientele, Lammhults Design Group creates positive experiences through modern interiors. Consumer insight, innovation, design management and strong brands are the cornerstones of our operations. We develop products in partnership with several of Scandinavia’s leading designers. Lammhults Design Group is listed on Nasdaq OMX Stockholm.

Net sales: SEK 840.8 m (901.2)

Operating profit: SEK 44.6 m (85.5)

Operating margin: 5.3% (9.5)

Return on capital employed: 8.0% (16.6)

Equity/assets ratio: 52.4% (50.0)

Debt/equity ratio: 0.47 (0.46)

Dividend payout ratio: 47% (40)

Average number of employees: 410 (400) THE PAST YEAR:

ExPoRT mARkETS

64

36

23

55

22

%

%

%

%

%

SwEdEn

Where our revenues come from

PRivATE conSumPTion

Public conSumPTion

comPAnY conSumPTion

Distribution of revenues

Acquisition of Schulz Benelux BVBA, Belgium, and acquisition of NBLC Systemen, Netherlands, in the Lammhults Library business area.

Adjusted for companies acquired, net sales declined by 5%.

Lammhults Office received an order worth almost SEK 10 million from Turkey.

Weaker demand led to a loss warning and a decision was made to implement a programme of cost cutbacks amounting to approximately SEK 15 million compared to the previous year.

Non-recurring costs of SEK 3.2 million in the form of customer credit losses and restructuring costs were charged to the result.

Lammhults Library received an order worth around SEK 15 million from Kuwait.

Strong gross margin thanks to lower production overheads as a result of staff cutbacks.

The result was charged with non-recurring costs of around SEK 6 million in the form of inventory depreciation.

The cost cutbacks had a full impact, which resulted in over- heads in Q4 being around SEK 10 million lower than in the previous year.

Net sales

SEK 224.5 m (217.8)

Operating profit

SEK 14.1 m (20.7)

Net sales

SEK 188.4 m (229.9)

Operating profit

SEK -8.5 mkr (17.3)

Net sales

SEK 196.5 m (218.0)

Operating profit

SEK 20.5 m (28.3)

Net sales

SEK 231.4 m (235.3)

Operating profit

SEK 18.5 m (19.2)

Q1 Q2 Q3 Q4

09

When I took up my post as President and CEO of Lammhults Design Group in May 2009, the Group was in the midst of a turbulent period that, in hindsight, also proved to be stimulating for our business. On the one hand, like everyone else, we were forced to adapt to the effects of the financial crisis. On the other, the Group simultaneously went through a very exciting process of transformation internally, towards a more brand-oriented way of working.

Let me start off with a few words about the brand strategy. When in 2008 the decision was made to introduce a brand-led strategy, it was because Lammhults Design Group wished to depart from its previous structure, which was similar to that of a holding company. With clearer branding, we greatly increased our chances of achiev- ing sustainable, profitable growth, and thereby increasing value for shareholders.

In 2009 we took the next step in our brand strategy efforts, which

usually does. The financial crisis was of such an exceptional nature that it eliminated to a major degree the economic fluctuations with which we are familiar. We have naturally never claimed to be entirely independent of the business cycle, but compared with other interiors companies, we have had the advantage that our businesses have been situated in different parts of the cycle and aimed at different segments.

Also, investments in public operations such as libraries usually increase in slump periods because central and local government see a need for measures to stimulate the economy.

What was unusual this time was that all our operations on most markets were hit by the effects of the recession almost simultaneously. Both corporate and private consumption fell, the construction sector ground to a halt, and decisions on public sector investments were put on hold. During the spring, we witnessed a sharp braking in incoming orders for included giving Lammhults Design

Group its own graphic identity. We did this to achieve a more distinct profile, both internally and in relation to our customers. Our Lammhults, Abstracta, Voice, Ire, BCI, Eurobib Direct, Schulz Speyer and Skaga brands, already strong and well-established, retain their indi- vidual characteristics while at the same time benefiting from an endorsement process that denotes them “Part of Lammhults Design Group”. This boosts Lammhults Design Group’s potential to work with its various brands in a collection-inspired manner. In this way we can always find the solutions the customer is looking for, regardless of whether a general or specialised solution is required. At the same time, we are continuing to exploit oppor- tunities for synergies in purchasing, production, product development and marketing.

2009 also was a year when the world around us did not behave quite as it

growth, streamlining and internationalisation will be the keywords in 2010.

A WORD fROm ThE PRESiDENT Anders Rothstein, President and CEO

A robust financial position, a finely tuned brand strategy,

greater internationalisation, and a continued ability to give our

customers innovative products with strong design. These are

some of the positive forces we are taking with us into 2010.

more or less all of our businesses.

For this reason, after our loss warning in June 2009, we implemented a vigorous cost-cutting programme to adapt to the worsened market conditions.

The aim was to save more than SEK 15 million compared to 2008. Some examples of measures taken were to identify more Group-wide options for purchasing and marketing, and to think smarter and more efficiently when plan- ning meetings and business trips.

Thankfully, order volumes recovered as early as the second half of June.

During the second half of the year, we experienced increasing order volumes, and in the fourth quarter we managed to outdo the previous year’s result by 1%. This led to net sales ending up at SEK 231.4 million (235.3), and operating profit for the fourth quarter was SEK 18.5 million (19.2). We should nevertheless bear in mind that the result for the fourth quarter also includes SEK 6 million in non-recurring costs

early as 2008. Now, however, there are strong indications that the decline in the market halted after the summer, and we have also seen signs of continued stabilisation during the autumn. This can be due to several factors. One is that consumers’ confidence in their personal finances has been strengthened, and another is that the Swedish government’s stimulation package, including the tax relief programme for repairs, renovations and extensions, known by its Swedish abbreviation ROT, has had an effect.

We can also confirm that, even if private individuals have purchased furniture to a lesser extent than previously, the business area has still been successful, but in a completely different area – that of hotel interiors.

The successes there, with several sizeable orders, have to a certain extent made up for weaker sales to private individuals. Like Lammhults Home, Scandinavian Eyewear is situated early for inventory depreciation. At the turn

of the year, we had order bookings worth SEK 105.5 million (117.3). For the whole year, net sales were SEK 840.8 million (901.2) and operating profit was SEK 44.6 million (85.5). It can also be mentioned that the Group has a robust financial position, with an equity/assets ratio of 52.4% (50.0) and a debt/equity ratio of 0.47% (0.46), which lays good foundations for growth, both organic and via acquisitions. In this context, it may also be worth pointing out that the figures we are comparing to are the record levels we achieved in 2008. Our financial goals also span a business cycle, and even if we have not managed to live up to all the goals individually this year, I think that the year’s result shows that we are capable of maintaining financial stability, even during unsettled periods.

How did things go in each individual business area? If we start with Lammhults Home, which is situated early on in the business cycle, we felt the effects as

Good design, high quality and a high level of innovation are still the keys to our future.

Anders Rothstein, President and CEO Lammhults Design Group

“

”

on in the business cycle, and was therefore hit by the financial crisis at an early stage. Sales were greatly affected by opticians having an excess of stock.

But there are chinks of light on the horizon. One of the most exciting events of the year was that we set up a sales operation for spectacle frames in North America, where we see a great deal of potential. We have progressed quickly from zero sales to net sales of around SEK 5 million – clear proof that our products are in demand and can also be sold on the American market.

We have also initiated exciting licensing collaborations on developing spectacle frames for the Pilgrim, Oscar Jacobson and Lexington brands, and we are continuing our long-term, rewarding work with the Efva Attling och Oscar Magnuson brands.

other hand, decision processes have become lengthier, and many projects have been temporarily mothballed. For this reason we are pleased to confirm that, despite the difficult market in 2009, we still managed to win the business area’s single biggest order to date, worth SEK 15 million, when we were tasked by the Kuwaiti Ministry for Education with supplying interiors for 144 school libraries throughout the country. We have been established in the Middle East for a long time, and we continue to see potential for future growth in the region. A further indication that the business area is destined for a bright future in the long term is the trend of libraries increasingly becoming meeting places, and the fact that more and more media centres and arts centres are emerging. We are already Our office interiors products in the

Lammhults Office business area are aimed primarily at those in the prescrip- tive stages such as architects, placing the business area later in the cycle as the assignments follow developments in the construction sector. This market is expected to continue to be challenging in future, but we see opportunities.

For example relocations, which often lead to new office interiors, always take place even in bad times. We also have potential to grow by taking market share in new international markets.

Finally, we have Lammhults Library, and through our brands BCI, Eurobib Direct and Schulz Speyer, we have been world leaders for many years. From an international perspective, the number of projects in the business area has generally remained the same. On the

A further indication that the business area is destined for a bright future in the long term is the trend of libraries increasingly becoming meeting places, and the fact that more and more media centres and arts centres are emerging.

”

holsted Library, Denmark. interior supplied by Lammhults Library

The Cinema armchair, designed by Gunilla Allard for Lammhults, was one of the products that opened doors for Lammhults in the international arena. Since its launch in 1993, it has been frequently used in projects in Sweden and on several export markets.

“

well established in this area as a player with the ability to provide flexible and innovative solutions.

In 2010 we will be putting all our effort into a number of areas. This will include continuing our work on expanding our international presence.

We are already big in the Nordic region.

We now see a number of export markets in which we have the potential to grow further. The market situation will continue to be difficult for a while to come, but it is also possible to grow in declining markets if you are sharper than the competition. Scandinavian Eyewear’s successful start in the US is one example of our capability in this area. During the year we have also seen how our already robust position in library interiors has been bolstered further through projects such as the record order from the Kuwaiti Ministry for Education.

Increased internationalisation will require us to work efficiently with joint resources, and as part of this work we will be gradually changing the names of the sales companies that currently primarily work on selling our library solutions, to Lammhults Design Group.

By sharing warehousing facilities along with back office and administration functions, the Group’s brands can

Lammhults’ renowned chair, Imprint – with which we incidentally sponsored the climate change conference in Copenhagen in 2009 – but we are looking at further applications. We see it as a material with the potential to change the foundations of the furniture industry.

All in all, we have an exciting 2010 ahead of us. I am convinced that we will succeed in the work we have embarked on. In a few years’ time we will be able to say that 2009 was admittedly a rocky ride, but it was also a year in which we took crucial steps towards our international expansion.

Finally, I would like to highlight the methodical work that is carried out by our employees on a daily basis. A turn- round like the one that Lammhults Design Group achieved during the second half of 2009 is not possible without the wholehearted commitment of staff. I would like to thank them for all their hard work.

Anders Rothstein President and CEO

achieve major synergies when they are to be introduced in new markets. In addition we are reviewing the purchasing functions to achieve the greatest possible coordination between business areas, and we can make additional savings by increasing the proportion of purchases from low-cost countries.

A further focal area in 2010 is product development. We cannot simply save our way out of the crisis; we need to go on the offensive in developing tomorrow’s products. Good design, high quality and a high level of innovation are still the keys to our future. We already work today with several of the best designers in the industry, and we are now continuing with new, exciting design collaborations. For example, I could mention Lammhults Home, which at Stockholm Furniture Fair 2010 presented products from famous names such as Stina Sandwall and the Form Us With Love design collective. The major emphasis is also on innovation, not least where making our products ecofriendly is concerned. Since 2005 we have been working with our own fantastic material, Cellupress, which can be moulded as flexibly as plastic but is manufactured from ecofriendly by-products from the forest industry.

Today, we mainly use this material for

2008

2009

61

64

%

% Export share outside Sweden

In 2009 we proved that we had started our process of internationalisation in earnest;

we can confirm that our export share out- side Sweden increased from 61% in 2008 to 64% in 2009.

”

Lammhults möbel sponsored COP15, the Copenhagen Climate Change Conference, with almost 100 imprint chairs in December 2009.

“

Our foundation Our strategic strengths

business concept, goals and strategies – how our model works

How does Lammhults Design Group create long-term value for the company and for shareholders? This overview describes our way of doing business, from business concept to strategic strengths and examples of the year’s projects.

buSinESS concEPT

Serving a global clientele, Lammhults Design Group’s business concept is to create positive experiences through modern interiors. Consumer insight, innovation, design management and strong brands are the cornerstones of our operations. We develop products in partnership with several of Scandinavia’s leading designers.

bRAnd PRomiSE

Lammhults Design Group targets conscious cosmopolitans who appreciate expressive design and innovative functionality. We will offer them sustainable interiors that strengthen their identity and make them feel secure, proud and special.

ouR coRE vAluES

We strive constantly to maintain our core values – to be unique, self-assured, receptive, innovative and thorough.

STRong bRAndS

We work with a brand-led strategy. Our own brands – Lammhults, Abstracta, Voice, Ire, BCI, Eurobib Direct and Schulz Speyer – are strong and well established, retaining their individual characteristics while at the same time benefiting from an endorsement process that denotes them ‘Part of Lammhults Design Group’ is added to their names. This set-up gives us opportunities to work with our brands, both individually and in a collection-inspired manner, to meet the needs of individual customers. At the same time, it allows us to continue to exploit synergies in purchasing, production, product development and marketing.

ExPoRT PoTEnTiAl

Lammhults Design Group has roots in Sweden but is an international group. Around 64% of our revenues come from other markets. Our products are available from San Francisco in the west to Japan in the east. We are world leaders in the library market and see good potential for expansion internationally, including in other business areas.

RElATivElY indEPEndEnT of THE buSinESS cYclE

Like everyone else, we are affected by fluctuations in the economy.

But compared with other interiors companies, we have usually managed to cope better with economic peaks and troughs. This is because we have not put all our eggs in one basket; instead, our businesses are located in different phases of the business cycle.

The Scandinavian Eyewear and Lammhults Home business areas are affected by economic fluctuations early on in the cycle, while Lammhults Office experiences these effects later on. Lammhults Library follows a different business cycle logic in many senses, since its assignments are often financed using public funds that tend to increase in slump periods through stimulation packages.

RobuST finAncES

We want to grow. In order to be able to make the acquisitions we

want to make at the right time, it is important to always have robust

finances. Our finances are naturally always governed by customers

continuing to demand our products. We also make great efforts to

constantly streamline our work, identify Group-wide synergies and

increase the proportion of components purchased from low-cost

countries. Constant cost control is a key component of maintaining

profitability, even in periods of economic decline. We also strive

to increase flexibility by, for example, letting sub-contractors take

responsibility for parts of the finishing work.

Goals and goal fulfilment Significant initiatives in 2009

Acquisition of Belgian Schulz Benelux and Dutch NBLC Systemen. Through these two strategic acquisitions, Lammhults Library will significantly boost its position in the Benelux region, achieve annual sales of around SEK 50 million and become a market leader in this important library market.

Lammhults Office received its biggest order to date, worth SEK 10 million, from the 5-star Point Hotel Barbaros in Istanbul, Turkey.

Lammhults Library received its single biggest library order to date in the Kuwaiti Ministry for Education’s order for interiors for 144 school libraries, worth SEK 15 million in total.

Scandinavian Eyewear signed licensing agreements for manufacturing spectacle frames for three Scandinavian brands:

Lexington, Oscar Jacobson and Pilgrim.

The Norwegian Parliament ordered interiors from Lammhults Home for 100 overnight rooms following comprehensive restoration.

A decision was made during the second quarter to make cost cuts of around SEK 15 million effective as of the second half of the year.

The financial crisis and recession led to a decline in demand for the Group’s products, which, compared to the previous year, resulted in a drop in order volumes of around 20% during the period of April – mid-June. A number of measures were taken at that time to adapt costs to the deteriorated market situation, which during the second half of the year resulted in cost cuts of around SEK 15 million compared to the previous year. The Group’s financial position is strong, with an equity/assets ratio of 52.4% (50.0) and a debt/equity ratio of 0.47% (0.46) as per 31 December 2009. Our financial position therefore continues to allow scope for acquisitions without departing from the Group’s financial goals for equity/assets ratio and debt/equity ratio.

– Average annual growth

of at least 15 % - 7 %

– Operating margin of

at least 10% per year 5.3 %

– Return on capital employed

shall be at least 8.0 %

– An equity/assets ratio

of at least 35 % 52.4 %

– Debt/equity ratio must be

in the 0.7–1.0 range 0.47

– A dividend payout ratio of approximately 40% of profits after tax, taking into account the

Group’s long-term capital requirements 47 %

The following is a selection of strategic initiatives that Lammhults Design Group implemented in 2009.

The financial goals of Lammhults Design

Group over a business cycle are:

Lammhults möbel AB

Lammhults Abstracta

Lammhults Biblioteksdesign AB (former Eurobib AB) Lammhults Biblioteksdesign A/S

(former BCi A/S) Schulz Speyer Bibliothekstechnik AG

Eurobib Direct BCi Schulz Speyer Lammhults home AB

(former Voice AB) ire möbel AB

Voice ire

Scandinavian Eyewear AB Seven Srl

Skaga Efva Attling Oscar magnuson

Pilgrim Oscar Jacobson

Lexington

lammhults oFFice lammhults home lammhults library scandinavian eyewear

buSinESS AREA

SubSidiARiES

bRAndS

buSinESS AREA

SubSidiARiES

bRAndS

buSinESS AREA

SubSidiARiES

bRAndS

buSinESS AREA

SubSidiARiES

bRAndS

lammhults design group

our organisation

2000 Acquisition of Eurobib (now Lammhults Biblioteksdesign AB), Sweden

20 01 Acquisition of Voice (now Lammhults home), Sweden

2002 Acquisition of BCi (now Lammhults Biblioteksdesign A/S), Denmark

2006 Acquisition of Schulz Speyer Bibliothekstechnik, Germany

2008 Acquisition of Seven, italy

2008 Acquisition of ifDB Bibliotheks Design, Germany

2008 Acquisition of iRE möbel, Sweden

2009 Acquisition of NBLC Systemen, Netherlands

2009 Acquisition of Schulz Benelux, Belgium

acquisitions that have shaped lammhults design group

our background

The roots of today’s Lammhults Design Group date back as far as 1945, when Edvin Ståhl founded Lammhults Mekaniska Verkstad, which manufactured furniture accessories. In the 1950s the business changed direction and started also designing and manufacturing furniture; the company’s name was then changed to Lammhults Möbel AB. Gradually, the company was incorporated in the Rörviksgruppen, which in 1997 was divided into two parts – Rörvik Timber and R-vik Industrigrupp, the latter of which incorporated Lammhults Möbel. In 1999 R-vik Industrigrupp acquired Expanda AB, which included Abstracta and Skaga, now Scandinavian Eyewear. In the same year, R-vik Industrigrupp changed its name to Expanda and concentrated the business solely on design. In 2008 the Group changed its name from Expanda to Lammhults Design Group.

SomE imPoRTAnT AcquiSiTionS:

lammhults design group

HEAd officE SHowRoomS

our world

lammhults oFFice lammhults home lammhults library scandinavian eyewear

own comPAniES SAlES comPAniES AgEnTS

RESEllERS

own comPAniES SAlES comPAniES AgEnTS

RESEllERS

own comPAniES SAlES comPAniES AgEnTS

RESEllERS

own comPAniES SAlES comPAniES AgEnTS

RESEllERS

On the following pages we describe in more detail the forces in society that impact on our customers today, and give examples of how we meet the demands of these forces in our products.

The concept of interpreting and shaping our time is an important foundation for all design. To achieve this, we first need to understand which external forces are shaping contemporary society. But this understanding is also important from a commercial perspective. Only when we have knowledge of the external trends and forces that make their mark on our industry can we offer our customers products and solutions that meet their needs and match their lifestyles. This is when we create real business benefit – for our customers, our Group and our owners.

Four external forces

that drive our business

Customers are looking for good design.

We respond with design on many levels.

Customers are looking for brands with personality.

We respond with products that reinforce our customers’ identity.

Customers are international.

We respond by making our way out into the world.

Customers are looking for innovative products.

We respond with solutions for new lifestyles.

1 2

3

4

Four external forces

that drive our business

What is good design? Good design is when a solution is unique, when something is consciously formed, and when form is married seamlessly with function. As a designer, a large part of my job is about constantly seeking out new solutions, new materials, and new ways to put things together.

Good design is also instrumental in building up a brand on several different levels. A good example is my Cinema armchair. it’s a brand in itself, but it’s also linked to the Lammhults brand and my own brand as a designer.

Gunilla Allard, Designer Lammhults Möbel.

The interest of society in what good design can offer continues to grow. In collaboration with designers with a strong idiom, Lammhults Design Group develops new products that meet user requirements for innovation and comfort.

Customers are looking for good design.

We respond with design on many levels.

Take another look at the Imprint chair. It isn’t just attractive and comfortable to sit on – it also represents a new environmental mindset. The seat is made from our own innovative Cellupress material, a material with potential to change the face of ecofriendly furniture manufacture. Cellupress is made of by-products from the forest industry, e.g. roots and twigs that are normally discarded. The designer duo behind Imprint, Johannes Foersom and Peter Hiort-Lorenzen, spent nearly nine years working with Lammhults' research department and the Danish company Dan-Web on developing the technology and design.

By compressing cellulose fibres and shredded PET plastic together at a high temperature using extreme pressure, they produced a material that is just as flexible and mouldable as plastic, but with its own characteristics. Today, Imprint is available in a range of different versions, and Cellupress as a material seems to offer infinite possibilities.

Good design can mean thinking about the future

Scandinavian design is an intern- ationally recognised concept charact- erised by features such as space and simplicity. But it can also be defined through the way that natural materials are used. When the Sahara Wood system was created in 2008 for Gunilla Allard’s Sahara armchair, which usually features chrome legs and armrests, the renewal was partly about letting natural materials come into their own in a completely new way. Allard took her inspiration for Sahara Wood from African lodge life. The armchair gives an air of the savannah, canvas, wild animals, adventures and challenges – of a life close to nature. This is reflected in the leather upholstery of the arm- chair, as well as in the legs and arms, which are available in walnut or stained ash.

Never compromising on the details – this has been Scandinavian Eyewear’s badge of honour throughout its 60-year history. There’s genuine craftsmanship behind the frames, and the right design idiom is just as important as angling the frames an extra millimetre until they rest on the bridge of the nose with the optimum level of comfort.

In our own Skaga brand’s acclaimed Layers collection – which was awarded the IF Product Design Award in 2009, one of the most prestigious awards in the industry – the love invested in the craft is particularly clear. Using a completely new technique, a transparent inner shape is merged with a contrasting outer shape. Designer Carina Mollsjö likes to make the comparison with the layering principle seen in fashion, as the technique gives designers the freedom to mix colours, patterns and structures in the same frame. The result is more than just an attractive frame; the frame highlights the really important details, namely the colour and shape of the eyes.

Good design can

mean using expressive materials

Good design can be about being meticulous about the details

Choosing a minimalistically designed sofa and combining it with a maximalistically inspired shocking pink cover – in our view, this is one way of expressing your personality. In the Lammhults Home business area, the Voice and Ire brands have a range of different products and solutions for the individual home. There are several varieties of sofa with various covers, while shelves and storage solutions can be assembled into unique combinations and are available in different colours and woods. And if you tire of pink after a few years, it’s not the end of the world. All sofas have covers that are easy to remove and exchange for a new one.

A library quite unlike the rest – this is how the Médiathèque André Malraux project, located in the old port area in Strasbourg, France, can be summed up. Housed in an old

factory building from the 1930s, it opened its doors in 2008 with the exterior intact but with a completely transformed interior.

The interior was supplied by Lammhults Biblioteksdesign A/S (formerly BCI A/S), part of the Lammhults Library business area. The aim is to reach a younger audience with various themed departments, for example one for music and film, one for cartoons, one for literature, and so on. The entire building is adorned with words – there are quotes from authors, film makers and philosophers on the walls, ceilings and floors. This is partly to add artistic value and partly because they also act as an innovative signage system through keywords in the text being graphically highlighted.

As a designer, i communicate the product to the customer. To be able to convey the right values, i need to know about our customers’ lifestyles.

This may mean looking at their taste in clothes and music, their role models, or their leisure activities.

Only when i’m aware of customers’ preferences can i really experience how they want to express their identity, and find a design that brings out their personality and gives extra character to their face. This may mean using a particular shape, detail or colour in the frames that says something about sportiness, confidence, intelligence or attractiveness.

Carina Mollsjö, Designer Scandinavian Eyewear

Individualism and the will to express your own unique personality are trends that are here to stay. Lammhults Design Group has brands and solutions that help companies and individuals express their own identity.

Customers are looking for brands with

personality.

We respond with

products that reinforce our customers’ identity.

Identity can be in the colours

Identity can be in the walls

Few accessories are so well used and important to daily life as spectacles. So it’s no wonder that so many people find them a crucial means of expressing their personal sense of style. Lammhults Design Group includes Scandinavian Eyewear with its own Skaga brand. The company also has licensing agreements for developing collections for other brands, e.g.

Oscar Magnuson and Efva Attling. Putting a pair of Efva Attling frames on your nose is a way of showing affinity with the values her brand represents.

Glamour fused with refreshing cheek. Business with a heart. Cosmopolitan Swedishness. Or maybe you have them just because you like the way you look in them.

The Turkish Sabanci Museum is a private museum that mainly shows art from the Ottoman period, for example calligraphy.

But the museum is also home to temporary exhibitions, which means that works by Pablo Picasso and Salvador Dalí must also have a natural place there. The museum is also used for various types of cultural events. So what should the furniture in the assembly hall look like? Discreetly monochrome? Antique? Neither – sometimes the antique is best matched by the modern.

Lammhults Möbel supplied a large number of Spira chairs with a variety of upholstery for the museum’s assembly hall. The result is a meeting place where history makes its presence felt but the chairs contribute to a modern and inspiring contrast.

Identity can be on your nose

Identity can be the combination of antique and modern

To succeed in the international arena it is important to work methodically, with a long- term perspective. it’s necessary to identify the projects you want to work on and forge good relationships with local customers, resellers and agents. One example is the middle East, where our long-term work has resulted in us constantly succeeding in winning new, rewarding projects.

i usually mention ECSSR, the intelligence agency of the United Arab Emirates, which some years ago ordered a library with high demands on exclusivity. We chose one of our standard shelving systems as a base, but added components in such a way that the customer was very satisfied. This is something of our hallmark – using 90 percent standard products and still managing to give each project a unique aesthetic idiom.

Kjell Granelli, Sales Manager Lammhults Library

Good design knows no national borders. Our products have an ability to work everywhere, from the US to Kuwait and Japan. Just over 60% of our sales are already made to markets outside Sweden. We think this can increase.

Customers are international.

We respond by making our way out into the world.

When Turkish hotel owner Durzun A Özbek chose Lammhults Möbel, he did so because the products fitted so perfectly into his creative hotel concept. ‘Art tech’, as it is known, is based on the idea of creating a calm, luxurious environment full of contemporary art, while the technical solutions should not leave anything to be desired by hotel guests. When it was time to work on the interior of the 5-star Point Hotel Barbaros in Istanbul, the third hotel in the owner’s chain, he had gained so much positive experience of Lammhults that he chose to use Lammhults products throughout the hotel. The result was a major order worth around SEK 10 million, the single biggest order Lammhults Möbel has had to date. Today, art and technology are matched at the hotel by furniture from designers including Gunilla Allard, Anya Sebton and the design duo Peter Hiort-Lorenzen and Johannes Foersom.

Our customers are international

“I didn’t only want stylish, attract- ive furniture, I also wanted it to interact with the concept of the hotel and help create its atmosphere.

And Lammhults furniture does this, with its lines and colours, and through the sense that each piece of furniture is also a piece of art,”

says Özbek.

The leap from an arts centre in Tenerife to 144 school libraries in Kuwait may seem great, but it is no great distance for Lammhults Library. Tenerife Espacio de las Artes is a modern, multi-functional arts centre in Santa Cruz that also houses the city library. Its light interior has been achieved through features including a special solution from Lammhults Library. The Opal shelving system has been painted white and mounted without side panels. We have also been a well-established player in the Middle East for many years, with good relationships there. In 2009 our business area landed its biggest order to date, equivalent to SEK 15 million. It came from the Kuwaiti Ministry for Education, which was looking for a supplier of school library interiors. We were awarded this assignment because the Ministry had previous experience of us not only supplying excellent interiors, but also within the agreed time frame. This was also the case on this occasion. 144 Kuwaiti school libraries were installed during the year.

The people of the world all have different faces. The same applies to their sense of style. Acrylic frames can dominate on one market and metal ones on another. This is why Scandinavian Eyewear, with its well-defined Scandinavian style, has chosen not to set up business in just any market. But when a market with the right kind of customers does turn up, we aren’t scared of investing in it. In 2009 Scandinavian Eyewear established itself on one of the world’s most challenging consumer markets:

North America. The results have come thick and fast. In a declining market Scandinavian Eyewear has taken market share in both the US and Canada. This is a good example of how we are able to constantly find new markets for our products.

Our products work in several countries

Our solutions work in many parts of the world

The trend of having totally open-plan offices makes great demands on both visual screening and sound absorption. Lammhults Möbel’s Abstracta brand specialises in products for visual communication and screening. One of the latest solutions is the innovative Mobi workspace, designed by Andrea Ruggiero, which was launched at Stockholm Furniture Fair 2010. By attaching a workspace to a sound-absorbent screen on lockable wheels, Ruggiero has found a way for users to easily be able to move their workspaces around as required. At the same time, the user does not need to compromise on privacy and peace and quiet.

Mobi can be grouped in a variety of different combinations, but is also suitable as a standalone product.

Anya Sebton’s modular Area sofa attracted a lot of well-deserved attention when it was launched at Stockholm Furniture Fair 2009. This was partly due to the connection fittings’ unique patented magnet system, which allows the modules to easily be joined and separated without the connections being visible. And it was partly due to the interesting shape featuring diagonals, both in the product itself and in the knitted seams of the covering. The comfortable high back also makes the sofa an excellent room divider. It is truly a cosmopolitan piece of furniture. This was not least noticeable in the major international interest that followed the launch.

We keep track of several factors in society, including fashion, the business cycle and the environment. it’s extremely important for us to follow developments in technology, as our job is to help our customers exploit tomorrow’s technical solutions in an inventive way. innovation is also the key to everything we do, and it can occur on several different levels. This may naturally take the form of innovative products, but also everything associated with them. it can be as innovative for the customer that we actually save the sofa patterns for at least ten years. This means that customers can give their homes a makeover and still keep their sofas for just as long again.

Ramona Nilsson, Head of Marketing Communications Lammhults Home

People’s needs change with new lifestyles. This is why Lammhults Design Group puts a great deal of effort into innovation, both technically and in terms of design. By being on the cutting edge of product development, we are able to surprise our customers with products that suit their needs and lifestyles.

Customers are looking for innovative products.

We respond with solutions for new lifestyles.

New lifestyles moving into the office

New lifestyles moving into the meeting room

Work, leisure time, leisure time, work … it’s just getting more and more difficult for people to draw a line between the two. Trend analysts are talking about bleisure – that business is merging with leisure. At the same time another trend is gaining ground, particularly in metropolitan areas: compact living. So what happens when the two trends meet? A need arises for small, efficient workspaces in the home. Voice and designer Stina Sandwall latched onto these two trends when they produced the compact Overtime desk.

Its simplicity combined with soft contours means that it fits into most environments while taking up minimal space and weighing so little that it is easy to move around. Keeping things tidy and organised is naturally also important. Lamp and computer cables can be discreetly stowed away on a smart little shelf.

One of Denmark’s most spectacular libraries, a truly prestigious project for Lammhults Library, is in Hjørring. Opened in 2008, the library also functions as a meeting place, arts centre and public living room for those resident in the area. Everything has been created with the users in mind. The starting point has been to adapt the library to how today’s visitors actually behave, rather than to meet the requirements of a traditional library. The entire building is filled with opportunities for activities.

There are places to work, play video and computer games, watch films, listen to music, have a coffee and, of course, lots of places where you can just sit and read. Visually and physically, the building is linked by a common thread, a loop that winds through the space and functions alternately as a seat, table and sign- post. The result is a warm, welcoming environment that gives the impression that the building is always open to everyone – being somewhere in the middle ground between a domestic and a public environment.

New lifestyles moving into the home

New lifestyles moving out into the community

lammhults oFFice lammhults home lammhults library scandinavian eyewear

business and brands

Lammhults offers timeless, attractive and visually strong furniture with a high design value that is suitable for many different environments, while Abstracta develops supplementary products for visual communication and screening. Together, the brands create

a comprehensive offering for those looking for creative and functional in- teriors for workplaces and public areas.

The products are developed in long-term partnerships with some of Scandinavia’s foremost designers. With their strong international profile, many business and brands

The Lammhults Office business area develops and markets interiors for public environments, where demands on design, functionality and quality are high. The business area is made up of two brands: Lammhults and Abstracta. Both brands have been part of the Lammhults Möbel AB subsidiary since 2008.

Åke Jansson, Business Area manager

of the products have received design awards in both Scandinavia and other parts of the world.

Lammhults Office’s end customers are mainly companies, organisations and public institutions. This means that architects that design and propose

lammhults oFFice

Together, the brands create a com- prehensive offering for those looking for creative and functional interiors for workplaces and public areas.

Åke Jansson, Business Area manager, Lammhults Office ”

interiors are an important target group.

Many items of furniture from Lammhults are also well known and est- ablished on private consumer markets.

The products are sold via agents and resellers in the individual markets.

How THE mARkET woRkS The most powerful driving forces behind customer demand for interiors for public environments are normally relocation, renovation and new builds.

This means that there may be wild fluctuations in demand over the course of a business cycle. Lammhults Office manages these fluctuations by seeking out business that follows different phases of the business cycle, for example by selling on several international markets, and selling to both companies and public sector operations. For example, the biggest investments of corporate customers very often materialise at the end of the business cycle, when com- pany profits have grown and a strong

demand for expansion has developed.

For its part, public sector activity, for example at universities and airports, very often looks to parameters other than the current state of the economy when investments are to be made.

Relocation is also something that takes place in all phases of the business cycle and forms an important basis for busi- ness, even during slump periods.

Demand is also affected by the current interiors trends in society in general, for example open-plan solutions. The way people work and meet professionally has changed radically over the past two decades. Formal meetings have been transformed into collaborations, with requirements on creative meeting environments becoming considerably more stringent. The need for products for visual communication and screening has also expanded as more and more customers choose flexible, open-plan office solutions. Also, customers are

affected by technological developments Club Sofa, designed by Peter hiort-Lorenzen

& Johannes foersom

“

Significant events in 2009

Sales by the business area fell during the year by SEK 70 million to SEK 283 million. An operating margin of 9.0% was reported.

A number of new products were launched during the year. One of the most acclaimed was Anya Sebton’s modular Area sofa, which was well received, with several major orders being placed. Sahara Wood, Gunilla Allard’s updated version of her earlier Sahara armchair with steel legs, also attracted a lot of attention for its new design idiom featuring a wooden stand. The Funk table by Peter Hiort-Lorenzen and Johannes Foersom also sold very well.

The business area initiated its first collaboration with two designers from outside the Nordic region: Andrea Ruggiero from Italy and Eelco Voogd from the Netherlands. This is a step on the road towards reaching a more international audience. Ruggerio has designed a flexible workspace, Mobi, while Eelco Voogd developed Sketchalot, the world’s first and only modular whiteboard that does not require mounting but can simply be leaned against the wall.

Implementation of the decision made in 2008 to merge Abstracta AB and Lammhults Möbel AB continued. The aim was twofold:

to adapt the organisation to a declining market by having joint management instead of two management teams as was previously the case, and to achieve synergies through a common sales team.

During 2009, these synergies were also evident in the more efficient cooperation with agencies.

that increase the potential for working more or less anywhere. This in turn results in offices tending to become smaller and more flexible.

Finally, demand is naturally driven by good design. Design that is innovative and has a strong identity gives competi- tive advantages and attracts customers in the long term. For this reason, Lammhults Office has established long- term collaborations with a number of carefully selected, high-profile designers, including Gunilla Allard, Nina Jobs, Anya Sebton, Peter Hiort-Lorenzen, Johannes Foersom, Love Arbén, Stefan Borselius, Mia Wahlstein, Josef Zetterman and Fredrik Wallner.

THE mARkET in 2009

The financial crisis hit the market for public environments hard. Many of our major international competitors in the higher price segment found it increasingly difficult to stay afloat, and

sales fell sharply in most markets. The market as a whole, from an international perspective, lost almost a third of its sales during 2009. In view of this, the business area coped relatively well, losing less than 20% of sales compared to the previous year. Our market posi- tion in Scandinavia, where Lammhults Möbel has long been one of the market’s major players, remained intact.

Around 57% of the business area’s sales were made to Swedish customers, the remaining 43% going to export markets. The biggest export markets apart from our Nordic neighbours were Turkey, Germany, France, the US and the Netherlands. Major progress was made in France, where sales increased by SEK 3 million to SEK 7 million.

However, international competition in the sector continues to be tough, above all from German, Danish and Italian companies.

Lammhults Office gained its single biggest order to date, worth SEK 10 million, from the 5-star Point Hotel Barbaros in Istanbul, Turkey.

Window, designed by Jonas forsman

lammhults oFFice 2005 2006 2007 2008 2009

Net sales, SEK m 235.2 290.9 313.4 352.9 283.3

Operating profit, SEK m* 17.7 36.1 34.4 46.6 25.6

Operating margin, % 7.5 12.4 11.0 13.2 9.0

Capital employed, SEK m 127.5 132.9 136.7 147.6 128.6

Return on capital employed, % 13.7 27.7 25.5 32.8 18.7

Investments, SEK m 3.4 5.4 5.8 5.0 1.8

Average number of employees 137 145 142 154 135

* excluding administration fees to the Parent Company.

The business area’s economic development as stated above is reported in accordance with IFRS. Values for the years 2005–2008 have been recalculated from compliance with the Swedish Accounting Standards Board’s General Recommendations to compliance with IFRS in this annual report.

Comet, designed by Gunilla Allard

business and brands

The Lammhults Home business area develops and markets products for home interiors. It is made up of two brands, Voice and Ire, and includes the company Lammhults Home AB (formerly Voice AB) , with Ire Möbel AB as a subsidiary. Together, the brands make up one of the strongest product ranges in the home interiors market, with both upholstered furniture and storage solutions.

Sonnie Byrling, Business Area manager

The product base of the Voice brand consists of storage furniture, chests of drawers, chairs and tables, combining a feel for design with innovative ability and flexibility.

Production is based on a component concept in which components are purchased from various subcontractors for assembly and packaging at Lammhults’ own facility. This means that the furniture can be developed

with a large degree of flexibility and adapted to the market.

The Ire brand is known for its visually strong upholstered furniture, including sofas and easy chairs.

Longevity is the keyword in terms of both design and quality. The furniture is flexible and functional, with features such as different covers that can be removed and washed. Production combines both modern technology,

such as computerised cloth cutting, which ensures the highest level of precision, and classic craftsmanship in the assembly phase.

The business area’s end customers are primarily private consumers, but the products are suitable for public environments that require a cosy atmosphere, such as hotels. The prod- ucts are sold primarily via resellers in the individual markets.

lammhults home

New trends in the workplace are another strong driving force. The needs of private customers for homeworking solutions are growing, along with the needs of companies for creative meeting places.

Sonnie Byrling, Business Area manager Lammhults home ”

How THE mARkET woRkS

Several factors drive demand for the business area’s products. First and foremost, customers are influenced by major trends in society in the areas of design and interiors. Examples include the growing interest in sustainable design, the open-plan trend and the tendency to give our homes a makeover more frequently.

Even if modern consumers buy sofas and storage solutions regardless of the economic situation, customer prefer- ences are affected by both good and bad times. At the moment, the slump is evident in the fact that customers prefer interiors that blend the old and the new, and are greatly interested in vintage – this is consistent with the idea that people’s need for security and lasting values tends to increase in turbulent times.

The market is also driven by demand for a greater diversity of personal and unique interiors solutions. It is becoming increasingly important to express your personality through your

home. It is also becoming more common for public environments such as hotels to demand the business area’s products when they want to create rooms that are durable and stylish yet cosy and offering a personal touch.

New trends in the workplace are another strong driving force. The needs of private customers for home- working solutions are growing, along with companies’ needs for creative meeting places. This has meant that comfortable upholstered furniture and environments that largely resemble the home have become increasingly com- mon, in offices too.

The competition is generally strong in all of the business area’s markets, but the Voice brand has long enjoyed an exceptional position through its ability to adapt its offering to customer needs while maintaining relatively short delivery times. Innovative ability and insight into consumers continue to be crucial to remaining competitive in the area of product development.

High quality and attention to detail

are other important components for companies wishing to stand out among the competition.

Up to now, the products have mainly been designed by our own designers such as Rolf Fransson (Voice) and Carl-Henrik Spak (Ire). In 2009 we also started collaborating with ex- ternal designers such as Stina Sandvall, Hee Willing, Dan Ihreborn and Form Us With Love.

THE mARkET in 2009

Lammhults Home is greatly exposed to the consumer market, and the business area is situated early on in the business cycle. A large part of the business there- fore felt the effects of the slump as early as in the second half of 2008. The market continued to be weak in 2009.

Despite this, the business area coped well in the circumstances and grew by 7%. The growth in sales can admittedly be explained by the acquisition of Ire the previous year, but a further important aspect is that even if private consumption has declined, the business

“

area has compensated for this by suc- ceeding in sales of hotel interiors, which continued to perform strongly in 2009.

Even if the financial crisis had an impact on customers, several major orders were proof that our concept for hotel interiors continues to be attractive.

During the summer there were signs that the drop in private consumption had halted, a trend that was boosted by several positive signs during the autumn.

It is possible that some of this decline was mitigated by the great interest in the ROT tax relief programme for repairs, renovations and extensions in Sweden – when people put extensions on their homes, they often take the opportunity to buy new furniture. But even when you discount a possible ROT effect, there are many indications that the market will not be weakening in the future.

Around 66% of sales in 2009 came from the Swedish domestic market, and the rest from the export market. The potential for exports continues to be strong. Around 25% of exports went to our Nordic neighbours, where the business area’s products have been well established for several years. Sales were particularly good in Finland – the busi- ness area grew by 40% on the Finnish market. In Denmark and Norway, how- ever, sales fell. The other major export markets were Germany, the Netherlands, the UK and Spain.

Sales by the business area rose during the year by SEK 6 million to SEK 93 million. The operating margin was 4.0%, i.e. unchanged from the previous year.

The collaboration with the Stay At hotel chain continued, with several interiors projects being implemented.

During 2009 a number of product development projects to be carried out over the coming years were initiated.

Several new products were presented at Stockholm Furniture Fair in February 2010. The products produced in collaboration with external designers attracted particular attention. These designers were Form Us With Love, who designed the Swell pouffe, an evolved version of the beanbag; Stina Sandwall, who designed the petite Overtime desk; and Hee Welling, who presented the Blend table.

Work on developing joint sales structures and distribution channels continued in 2009 following the acquisition of Ire Möbel AB in 2008. This coordination of activities will increase efficiency and improve customer support, making it easier to service the market and gain competitive advantages. The synergies are not expected to have an effect in the form of increased sales until 2010, but much progress has already been made.

Swell, designed by form Us With Love

The Norwegian Parliament ordered interiors from Lammhults Home for 100 overnight rooms following comprehensive restoration.

Significant events in 2009

lammhults home 2005 2006 2007 2008 2009

Net sales, SEK m 54.9 60.5 82.7 86.8 93.3

Operating profit, SEK m* 6.5 5.2 8.4 3.5 3.7

Operating margin, % 11.8 8.6 10.1 4.0 4.0

Capital employed, SEK m 40.9 38.6 36.2 57.5 59.4

Return on capital employed, % 16.3 13.2 22.7 7.8 6.5

Investments, SEK m 0.6 1.8 1.1 15.6 7.8

Average number of employees 25 28 33 44 52

* excluding administration fees to the Parent Company.

The business area’s economic development as stated above is reported in accordance with IFRS. Values for the years 2005–2008 have been recalculated from compliance with the Swedish Accounting

Standards Board’s General Recommendations to compliance with IFRS in this annual report.

mikael Kjeldsen, Business Area manager

The business is organised into Swedish subsidiary Lammhults Biblioteksdesign AB, Danish subsidiary Lammhults Biblioteksdesign A/S and German subsidiary Schulz Speyer Bibliotheks- technik AG. Sales and marketing are handled by a joint network of subsidiar- ies in Belgium, the UK, France, Spain, the Netherlands, Austria and Norway.

The Norwegian company is 50% owned by Lammhults Biblioteksdesign AB. In other markets around the world, sales

are made through local resellers.

The business area’s operations are divided into two parts: project sales of complete interiors systems such as shelv- ing and furniture, and aftermarket sales of furniture and consumables via catalogues and online stores.

The Swedish and Danish subsidiar- ies share an organisation and head office for project sales under the BCI brand in Danish Holsted, while the head office for aftermarket sales is business and brands

The Lammhults Library business area develops creative, attractive and functional interiors for libraries, schools and other public meeting places, such as educational premises and arts centres. The Eurobib Direct, BCI and Schulz Speyer brands make up the business area.

in Lund, Sweden, under the Eurobib Direct brand. Production takes place at the company’s own facilities in Denmark and at subcontractors’ facilities.

Germany-based Schulz Speyer has an independent organisation but works closely with its fellow subsidiaries where for example purchasing is concerned.

All three brands in the business area are leading in their respective market niches. Taken as a whole, Lammhults Library is a world leader in library

lammhults library

As the library becomes more of a meeting place and experience centre, design and architecture become increasingly

important to a project’s success.

mikael Kjeldsen, Business Area manager Lammhults Library ”

interiors and, together with other businesses in Lammhults Design Group, is able to present an entirely unique offering to customers.

Lammhults Library’s end customers are mainly players whose operations are financed via public funds, e.g.

municipalities or general educational institutions. This means that architects who design and propose interiors are an important target group when working the market.

How THE mARkET woRkS

The market for library interiors is a niche market that to a large extent follows its own logic, precisely because investments in libraries, media centres and arts centres are so strongly linked to public sector activities. Customers are dependent on the public economy and the will of authorities to invest. For this reason, the market is also relatively constant. If a business wants to grow, it must do so by increasing its

market share, or by expanding into new markets. Today, Lammhults Library is more or less the only international player. Also, markets can differ wildly in terms of competition. Generally speaking, however, there are often one or two major local players, plus a couple of smaller local players.

At the same time, the market is strongly affected by a number of forces that are in the process of radically restructuring the industry. One such trend is that of having larger, more centralised libraries, and that customers have become increasingly inclined to invest in more media centres and arts centres. An explanation for this is the growing need in communities for land- marks – buildings that are assigned a special role in the public sphere and can function as meeting places.

Customers have also become more careful and meticulous in their project planning. As the library becomes more of a meeting place and experience

centre, design and architecture become increasingly important to a project’s success. This is not least noticeable in the fact that architects are demanding unique solutions to a greater extent.

Another trend is the developments in technology. Through the emergence of the e-book and the growth of digital media, the bookshelf is becoming a less crucial feature in libraries. Many libraries are therefore reducing the number of books housed to make way for meeting places and for technical equipment for entertainment such as films and games. This in turn gives rise to a need for new interiors.

Maintaining a high design profile will continue to be of great importance in terms of achieving positive growth.

The business area is therefore collab- orating with established designers in the area, such as Lars Vejen, Björn Dahlström, Louise Hederström, Marie-Louise Gustavsson and Frans James.

“