Annual Report 2009
Contents
Page
1 Key figures
2-3 Working environment solutions in many sectors 4 President’s statement
5 Financial and operational objectives 6 Business areas in 2009
7 Nederman organization 8-9 Distribution and sales 10 Production and logistics
Service and aftermarket
11 Application area - Metal Fabrication 12 Application area - Automotive 13 Application area - Other Industries 14 Driving forces
15 Product development 16-17 Personell and environment 18 Shares 2009
Financial
19 Financial information in brief 20-22 Directors’ report 2009
23 Consolidated statement of comprehensive income 24 Consolidated statement of financial position 25 Consolidated statement of changes in equity 26 Consolidated cash flow statements
27 Income statements for the parent company Cash flow statements for the parent company 28 Balance sheets for the parent company 29 Statement of changes in shareholders’ equity 30-55 Notes
56 Proposed appropriation of profits 57 Auditor’s report
58-60 Corporate governance report 61 Articles of association 62 Board of directors 63 Senior executives 64 Financial definitions Cover page
Notification to attend the Annual General Meeting
Notification to attend the Annual General Meeting (AGM)
The AGM of Nederman Holding AB (publ) will be held at Marina Plaza, Kungstorget 6, 251 10 Helsingborg, Sweden, on Wednesday, 28 April 2010.
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 Euroclear Sweden (VPC AB) by Thursday 22 April 2010 and must notify the company of their intention to attend the meeting no later than Thursday 22 April 2010.
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 22 April 2010, meaning that the shareholder should give notice of his/her intention of taking part at the meeting in due time before that date.
Notification
Notification can be made 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, regis- tered 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 notifi- cation to attend the meeting. Individuals representing a legal entity must have a copy of the registration form or equivalent documentation indicating the authorized 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 that no dividend be paid for 2009.
Reports
Q1 Report – January - March 2010 28 April 2010
Q2 Report – January - June 2010 12 August 2010
Q3 Report – January - September 2010 22 October 2010
672
0 2007 100 200 300 400 500 600 700 800
2008 2009 568
710
0 20 40 60 80 100 120
2007 2008 2009
89
114 113
2007 2008 2009
1 041 1 272
1 052
0 200 400 600 800 1000 1200 1400
2007 2008 2009
866
175 199
1 073
162 890
0 200 400 600 800 1000 1200
Extraction & Filter Systems Hose & Cable Reels
2007 2008 2009
114 141
23 0
20 40 60 80 100 120 140 160
0 20 40 60 80 100
%
2007 2008 2009
32 27
21
Notification to attend the Annual General Meeting (AGM)
Key figures
Sales SEK m
Sales by business area SEK m
Operating result (EBIT) and operating margin SEK m
Operating cash flow SEK m
Net debt/equity ratio Average number of employees
Key figures, Group
SEK m 2009 2008 2007*
Net sales 1,052.0 1,272.3 1,041.4
Gross profit 503.8 617.8 502.5
Gross margin, % 47.9 48.6 48.3
EBITDA 41.4 158.7 131.9
EBITDA margin, % 3.9 12.5 12.7
Operating profit/loss 23.3 140.8 114.1
Operating margin, % 2.2 11.1 11.0
Result before tax 17.2 125.6 105.3
Net result for the year 14.6 92.6 75.2
Earnings per share, SEK* 1.25 7.90 6.42
Operating cash flow 112.8 113.9 88.5
Return on shareholders’ equity, % 2.8 18.9 18.2
Return on operating capital 3.6 22.2 20.0
Net debt 108.0 144.1 145.6
Net debt/equity ratio, % 21.0 27.2 32.2
Net debt/EBITDA, multiple 2.6 0.9 1.1
EBITDA/net financial items, multiple 6.8 10.4 15.1
Average no. of employees 672 710 568
*) Excluding IPO costs of SEK 6.7 million before tax
Result business areas
Extraction & Filter Systems 2009 2008 2007
Net sales, SEK m 890 1,073 866
Growth, % -17.1 23.9 16.5
EBIT, SEK m 24 124 99
EBIT margin, % 2.7 11.6 11.4
Hose & Cable Reels 2009 2008 2007
Net sales, SEK m 162 199 175
Growth, % -18.4 13.7 29.6
EBIT, SEK m -1 17 15
EBIT margin, % -0.6 8.5 8.6
For 2009, Nederman is reporting its results in respect of the Extraction & Filter Systems and Hose & Cable Reels areas.
From 2010 onwards, due to organizational changes, reporting will be done in respect of a geographical division between the Europe, International and Operations.
2007 2008 2009
2007 2008 2009
2007 2008 2009
2007 2008 2009 2007 2008 2009
2007 2008 2009
1,272 1,052 1,041
89
114 113
1,073 866
890
175 199 162
32 27
21
568 710
672 114
141
23
2.2%
11.0%
11.1%
1978
1944 1981 1983 1985 1991
Working environment
solutions in many sectors
• Nederman is an environmental technology company that develops, produces and markets proprietary products and systems.
• The company has production units in Sweden, Norway, Canada and China.
• Own sales organization in 25 countries, plus agents and distributors in 30 countries.
• At year-end 2009 the Group had 647 employees.
It is a human right to have clean air in your working environ- ment. In many cases, clean air is also a production-critical prerequisite for quality in advanced manufacturing processes.
Our expertise in dealing with air pollutants is mainly used in the welding, metal fabrication, composite material, machining industries and the automotive aftermarket.
Nederman’s history
Founded by
Philip Nederman First international
sales office Carnegie buys a minority share in the company
Listed on the Stockholm
stock exchange Active becomes new majority shareholder.
Company de-listed
Active sells Nederman to Esab Nederman’s focused application areas include:
• Metal Fabrication: Welding, machining
• Automotive: Automotive workshops, emergency vehicle stations, vehicle testing centres
• Other Industries: Composite material industry,
heavy industry, marine/offshore, food and pharmaceutical
industries
1994 1999 2000 2007 2008 2009 Nederman’s wide range of products complements each other extensively. The
products can be combined using the company’s specialist know-how to perform advanced, quality-enhancing and health-protecting assignments. Solutions are mainly based on low and high vacuum technologies, and on ergonomic aids for effectively handling cables and hoses. This enables Nederman to be flexible to provide complete solutions in the application areas the company specializes in.
STRONG GLOBAL DRIVING FORCES
• Extreme awareness of environmental and health risks plus related costs
• Stricter legislation
• Greater focus on efficiency and quality in production
• Global challenges for sustainability issues
• Greater incentive to save energy
• More potential on growth markets
Venture capitalist EQT acquires Nederman
Streamlining
and repositioning Introduction onto the OMX Stockholm Stock Exchange’s Small Cap list
Logistics and assembly plant opens in Shanghai, Nederman acquires Arboga-Darenth
New market-oriented matrix organization implemented Charter acquires
Esab and becomes
majority shareholder
President’s statement
2009 was a very tough year for the entire industry. Despite this, Nederman ended the year as a more effective, better-positioned company compared with a year ago. We are the market leaders and are constantly increasing our lead on the competition.
“ All the markets that Nederman is active on were hit hard ”
by the financial downturn in 2009. Net sales for the year amounted to SEK 1,052 m, a drop of 17 per cent on 2008.
The operating profit was SEK 23.3 m, a drop of 83.5 per cent.
Nederman’s financial objective is set over a business cycle, but compared with the all-time-high of 2008 I am obviously not pleased with the results for 2009. I would like however to emphasize that the exceptional market conditions seen in 2009 should also be seen as an opportunity.
Nederman has maintained momentum by giving its organi- zation a sharper market focus, developing its global purcha- sing organization and strengthening its presence on growth markets. The organizational changes will be really significant for Nederman’s future growth and in 2010 we will focus on streamlining and market-orienting the organization even further.
A swift, positive response
We saw warning signs in autumn 2008 of the economic down- turn, which prompted us to develop a number of alternative plans with varying scenarios for 2009. This meant that we were able to quickly implement streamlining measures as early as first quarter. It also meant that we were able to defend our product margins and cut costs throughout the year. We have also generated a strong operating cash flow and cut our already low level of borrowing. This meant that Nederman was once again able to report positive figures in fourth quarter 2009.
Despite the sharp drop in demand we believe that the underlying forces driving demand for the company’s solutions were strengthened over the year. Environmental and working environment awareness is deeply rooted in the mature markets of Europe and North America. Positions on environmental and working environment issues are moving forwards continually on growth markets, and we will break new ground at the same rate that we can train and build up local expertise in marketing and technology, which is a top priority.
Standing strong ahead of 2010
Nederman leads the way on a very fragmented market and we are the only company with complete application expertise. We are continually extending our advantage over the competition.
The main scenario for 2010 is that the demand will continue
to be weak. Our aim is to continue taking market shares and I expect the market as a whole to start recovering towards the end of 2010 or in the beginning of 2011.
Nederman is fully focused on profitable growth. We are seeing potential mainly in new growth markets like China and Brazil. Our strong financial position is also providing an opportunity for strategically important acquisitions, when they become available.
In summary, we have a tough year behind us, but at the end of 2009 Nederman was a more effective and more well-positio- ned company compared to a year ago.
Sven Kristensson
President and CEO
2007 2008 2009 114
141
23 0
20 40 60 80 100 120 140 160
2007 2008 2009
0 20 40 60 80 100
%
2007 2008 2009
32 27
21
2007 2008 2009
0
2007
Förvärv 1041
1052 1272
17%
3%
1041 10%
11%
1272
-19%
1052
2008 2009*
Organisk tillväxt Tidigare års försäljning
2%
Förvärv Organisk tillväxt Tidigare års försäljning 2007
MSEK
Förvärv 878
1041 1272
17%
3%
1041 10%
11%
1272
-19%
1052
2008 2009*
Organisk tillväxt Tidigare års försäljning
2%
Financial and operational objectives
Nederman’s objective is to create growth and profitability for all of the company’s stakeholders. 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 contri- bute to positive social development.
Operational objectives:
• Identifying new application areas and geographic markets with significant growth potential
Financial objectives
• Annual sales growth of 8-10 per cent over a business cycle, of which at least half will be organic growth
• EBIT 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
Business concept
Through products, systems and application expertise to provide solutions that safeguard a clean working environment, efficient and safe production and eco-friendly recycling.
Nederman, one of the world’s leading environmental technology companies, 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 makes 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 minimizing the risk of injury.
Since 2008 the company also provides solutions for the eco- friendly, cost-efficient treatment and reuse of cutting fluids and the profitable handling and refining of metal shavings. Through its comprehensive range of products, systems and service, combined with extensive expertise, Nederman is able to provide total system solutions within both traditional and new application areas.
Sales growth SEK m
Acquisitions Organic growth Sales last year
Operating result (EBIT) and operating margin SEK m
Dividend per share Earnings
per share SEK
The board and CEO propose that no dividend be paid for 2009. (SEK 2.50 per share)
Dividend
Net debt/equity ratio
*) Excl. IPO costs
,
1,272
,
2%-19%
1,041 1,272
1,052
1,041 1,052
11%
10%
3%
17%
2007 2008 2009
1.93 - 3.21
6.42*
7.90
2.37 - 3.95
6 4 2 8
1.25
2007 2008 2009
2.50 2.2%
11.0%
11.1%
Hose & Cable Reels 2009 2008 2007
Net sales, SEK m 162 199 175
Growth, % -18.4 13.7 29.6
EBIT, SEK m -1 17 15
EBIT margin, % -0.6 8.5 8.6
Extraction & Filter Systems 2009 2008 2007
Net sales, SEK m 890 1,073 866
Growth, % -17.1 23.9 16.5
EBIT, SEK m 24 124 99
EBIT margin, % 2.7 11.6 11.4
Business areas in 2009
Up to 31 December 2009 Nederman operated with two business areas, Extraction & Filter Systems and Hose & Cable Reels. The products of both business areas are compatible and complement one another to a large degree. This means that Nederman is able to provide complete solutions in the application areas the company specializes in. The organization was changed in 2009 to optimize the synergies between Extraction & Filter Systems and Hose & Cable Reels, see opposite page.
Extraction & Filter Systems
The business area provides solutions for extracting and filtering welding smoke, exhaust gases, oil mist and solutions for handling metal shavings, cutting fluids and cleaning of machinery and premises. The business area’s sales fell in 2009 as a result of the general recession by 17.1 per cent to SEK 890 m (1,073 m) and result for the year amounted to SEK 24 m (124 m).
The business area covers High vacuum, Low vacuum, Exhaust systems and Machining.
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, metal shavings and cleaning of machinery.
Low vacuum involves extraction and filtration using low negative pressure and large air volumes close to the source.
A common application area is the extraction of welding smoke.
Exhaust systems involves the capturing and filtration (low vacuum) of exhaust gases from motor vehicles. Customers include vehicle workshops, car inspection centres and emer- gency service vehicles.
The Machining product area provides complete solutions for separating metal shavings and cutting fluids, oil mist separation and equipment for cleaning machinery and premises.
Hose & Cable Reels
The Hose & Cable Reels business area provides workshops and industries 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.
The business area’s net sales in 2009 fell by 18.4 per cent to SEK 162 m (199 m). The result for the year was SEK -1 m (17 m).
The solutions improve efficiency by providing the work- place with direct, easy access to oil, air, water, gas and electricity. This meanwhile reduces the risk of work-related injuries.
The business area’s products are used for all sorts 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 indu- strial environments.
Nederman also has a range approved for environments where
there is an explosion risk.
Nederman organization
Nederman was reorganized in 2009 to bring market expertise closer to the customer.
We are also generating synergies between our products by focusing expertise in different application areas.
A new market-oriented organization was created at year- end 2009 by merging the two business areas of Extraction
& Filter Systems and Hose & Cable Reels. This was carried out to give Nederman a more market-oriented organization and enable the company to deliver application solutions with strong synergies from both former business areas. Since the start of 2010 Nederman has been divided into three new business areas: Europe business area, the International business area, which are geographically based and the Operations business area which supply the other two business areas.
The new organization provides clearer roles and divisions of responsibility, with sales managers more focused on their geographic markets. Another change involved refining the product manager organization into three application areas with application managers focusing on business benefit and strategic market development, while product managers focus on the product range.
The reorganization was carried out in 2009, but will have full effect from 2010 onwards. This means that for 2009 Nederman is reporting according to the former organization with the product-oriented business areas of Extraction &
Filter Systems and Hose & Cable Reels.
Europe
Responsible for sales and marketing of Nederman’s biggest and most
developed market
International
Responsible for establishing, selling and marketing on growth markets,
mainly in China, India and Brazil.
The business area also includes the important North American market.
Operations
Responsible for purchasing, production and logistics
Group management
Sales Europe
Jan Richardsson Sales International
Per-Ove Eriksson Systems,
Products & Services Per Lind Sven Kristensson CEO
Anders Agering CFO Human Resource
Eva Carin Svensson
Operations Anders Franzén
Extraction & Filter Systems Hose & Cable Reels
2009
2010
0 10 20 30 40 50
%
2007 2008 2009
44%
50% 49%
2007 2008 2009
Direct sales Geographic division of net sales 2009
Nordic region, 27%
Rest of Europe, 49%
North America, 13%
Rest of the world, 11%
Distribution and sales
With 73 per cent of its sales already outside the Nordic Region, Nederman is focusing on even further geographic expansion. We are also expanding in new application areas and within service and aftermarket support.
Distributors and direct sales
Nederman is a well-established brand with an international sales organization and a global network of distributors and importers. The company aims for a good balance between direct sales and distribution sales to reach customers with dif- ferent needs. Through direct sales Nederman, to a large degree, provides complete, customized solutions. Sales of systems direct to users mean that the company can sell its expertise and ensure that equipment is installed and used correctly. With the help of distribution sales Nederman also has good market coverage for individual products and smaller systems.
Nederman’s strategy for its sales organization is to adapt bu- siness to the local markets while the company communicates its philosophy and message concerning the working environ- ment. The application areas Nederman focuses on in different parts of the world follow the industrial development of various countries and regions. A strong local presence is significant for Nederman to respond correctly to changes in market needs.
Sales teams focus on the respective market area according to the new working method implemented in 2009. Nederman has a strong market position globally and faces mainly local and regional competitors without complete system solutions and application expertise.
Europe
Nederman’s home market is Europe, which the company serves with an extensive network of its own sales companies and distributors. The market reported record sales in 2008 but was then hit hard by the recession in 2009. Nederman’s European organization was adapted and streamlined over the year in order to be more market-focused and less sensitive to costs.
The European market is recovering more slowly than the growth markets, and future growth in Europe will mainly be in composite materials, machining and automotive service.
Nederman sees huge development potential in Eastern Eu- ropean countries where demand is generally becoming more like that in Western Europe. Europe is also seeing a conso- lidation and modernization of service workshops, which is positive for Nederman’s Automotive solutions.
International
The International business area is responsible for sales out-
side Europe, focusing on the growth markets of China, India
and Brazil, plus the well-developed North American market.
Assembling and Logistics Own sales companies
Nederman has agents and distributors in over 25 countries.
Asia Nederman’s expansion plans in China and India are mainly limited by the time it takes to establish expertise in sales and technology. Recruitment and training of local sales and technical service personnel were therefore intensified in 2009.
Nederman will further expand its presence and market coverage over the coming years.
Nederman has facilities in Shanghai with a service and logistics centre for the entire region. A sales office opened in Beijing in 2009 to be close to the region’s expansive automotive industry. Yet another sales office will open in the south of the country in 2010. In India, where there is a major welding-related industry, Nederman opened a second sales office in 2009.
The effects of the downturn in the economy were significantly short-lived in China and India thanks to healthy domestic demand.
Low entry thresholds in Asia mean that western companies establishing manufacturing sites in the region demand the same high standards on quality and safety as in their home countries. Existing customers bring Nederman’s solutions into new markets, which spreads acceptance for both the technology and the brand among local companies. It is therefore important to build up a strong sales organization with backup in the form
of technical expertise for service and installation and adapt costs to the local conditions. Because of the size of the market there is also a need to develop structured distributors and agents, especially in India, which has a strong retail culture.
North America
North America has been hit hard by the financial crisis, but still has major industrial production. The North American market is driven, like the rest of the world, by an increased demand for safety in the workplace because any shortcomings in this area can lead to huge damages claims and costs for insurance companies. North America is traditionally an important market for Nederman’s solutions for emergency service vehicles, an area in which the company has a complete market-oriented range.
Brazil
Brazil has a mixed economy with industry mainly concentrated
in Sao Paolo, where Nederman has been well-established
with a sales and service organization since 2008. Nederman is
expanding its sales organization and sees major opportunities
for creating a strong market position in the country in all
product areas.
Competitive strength and profitability on growth markets depend on cost levels being adapted to local markets. The general picture in terms of costs in China, for example, means that as many components as possible must be bought locally with assembly taking place close to the end customer.
In 2009 Nederman focused on building up regional purchasing organizations and now has three fully-developed purchasing teams and logistics centres. The facility in Shanghai, China is responsible for purchasing and logistics in Asia and Oceania, the facilities in Helsingborg, Sweden is responsible for Europe, and Mississauga in Canada is responsible for North America. Component manufacture takes place at subcontractors with tools and moulds owned by Nederman. Final assembly and system installation is carried out by Nederman’s own workforce to protect the company’s core expertise and ensure the equipment is installed and used properly. Because of its strategic importance, Operations will be a separate business area at Nederman from 2010,
supplying the other two business areas. Nederman’s own production focuses mainly on assembly of end products and systems, with manufacturing of component taking place at selected manufacturers.
Nederman’s solutions are often critical for customers’
production, which makes the aftermarket an increasingly important part of the company’s sales. Production of wind turbine blades made from composite materials cannot continue without vacuum systems that work properly.
Investing in service and preventative maintenance minimizes production stoppages and therefore makes financial sense for customers. In some countries legislation stipulates that
exhaust gas ventilation equipment must be checked regularly.
The range of services consists of a portfolio of services for preventative maintenance, storage of critical spare parts and customized service contracts (Nederman Maintenance Contract). The service organization was reinforced and further developed in 2009 so aftermarket sales can continue rising. The aim is for service contracts to be signed with more large customers with Nederman performing installation.
Production stoppages are expensive. Preventative maintenance and regular service are therefore increasingly important. Demand for Nederman’s service contracts is constantly increasing.
Service and aftermarket
Production and logistics
N E D E R M A N S A P P L I K AT I O N S O M R Å D E N N E D E R M A N S A P P L I K AT I O N S O M R Å D E N N E D E R M A N ’ S A P P L I CAT I O N A R E AS
People inhale almost 100 litres of air a minute, and double that amount when working hard.
Clean air is therefore one of the most important factors for a good working environment.
The traditional areas of use for Nederman’s solutions are in metal fabrication.
Customers are mainly in the engineering industry. Metal fabrication solutions are divided into two areas: welding and machining.
Welding
Millions of people work as welders around the world. The smoke caused by welding contains toxins that can cause neu- rological damage, cancer, allergies and asthma. When mixed with other elements in the surroundings the gases can also have a negative effect on quality and equipment. Investing in a good working environment for welders pays off because workers stay healthier with fewer sick days. It is also easier to recruit the best workers when they get to work in clean working environments, meaning improved product quality.
Nederman provides a comprehensive range, containing products that protect individual workstations and systems that ensure a good working environment throughout premi- ses. The solutions basically consist of a nozzle that extracts welding smoke and a vacuum unit with integrated filter that takes care of harmful particles. The range of different pro- ducts and accessories is extremely well-developed, enabling the company to customize solutions according to customers’
requirements. The range also includes mobile units that welders can take wherever they are working. All products provide a high degree of flexibility, good ergonomics and are easy to use. Nederman’s solutions are also used in automated manufacturing processes to protect workers, welding robots, and machinery.
Machining
When metals are machined, milled, drilled and cut, waste is generated in the form of metal shavings mixed with cutting fluids and coolants. High temperatures can also cause oil mist.
Nederman has solutions for collecting waste products and separating fluids from metal, which provides more advan- tages. Metal shavings can be shaped into briquettes that can be sold and cutting fluids can be reused, saving money and increasing resource usage. Installing Nederman’s solutions is both profitable and good for the working environment.
Examples of products in the area include conveyor belts, centrifuges, filter systems and briquette presses.
Nederman also has products that filter oil mist from the air.
Oil mist is harmful if inhaled, damages electronics and makes surfaces dirty.
Metal Fabrication
N E D E R M A N ’ S A P P L I CAT I O N A R E AS
A clean, effective workshop gives a good impres- sion and bolsters the car brand’s image. It also facilitates work and safeguards employee health.
Nederman’s solutions for the vehicle sector cover everything from exhaust gas extraction systems to systems for managing oils and fluids.
The aftermarket represents a major part of the automotive industry’s sales, and because cars need servicing and repairing even in a recession this area is relatively immune to business cycles. Nederman is a world-leader with its solutions for ensuring good working environment in service workshops and in emergency service stations.
Service workshops
Modern service workshops must be clean, safe workplaces, despite handling oil and other fluids, exhaust gases, dirt and dust. The benefits of a modern working environment is that the workplace is safer, provides a professional impression for customers, improves the quality of sheet-metal work and paint spraying and causes less wear and tear on equipment.
Nederman provides a wide range of solutions for the ergo- nomic and effective management of hoses and cables, systems that capture exhaust gases direct from the exhaust pipe and equipment that handles dust and gases caused by sheet metal work and paint spraying.
Nederman’s concept consists of complete solutions for large and small service workshops. Since 2008 Nederman has provi- ded systems for managing consumable materials such as grease, oil and other fluids. These consumable materials are stored at the customer’s central depot and can then be distributed to the respective workplaces with the help of pipe and hose systems.
The system registers how much is used and controls usage and waste. Studies show that these investments pay for themselves within a year.
Emergency service vehicles
Clean, safe working environments are also a prerequisite for emergency services personnel and the application area places strict demands on operational safety under tough conditions. Emergency service vehicles such as fire engines and ambulances need to be able to be parked, ready with the engine running without the garage filling up with harmful exhaust gases. Nederman has solved this problem by using a hose system that fits directly onto the exhaust pipe by using an advanced nozzle.
As long as the vehicle is in the garage the exhaust gases are extracted and the nozzle detaches from the exhaust pipe as soon as the vehicle is driven out of the garage and a spring recoils the hose to a hose reel, where it stays ready to be used again when the vehicle returns. Nederman has a complete market-oriented range for exhaust management to suit all emergency service vehicles.
Automotive
During grinding, a perfect surface and high quality can only be achieved when dust is managed effectively. A clean, dust-free working environment reduces health risks and improves job satisfaction.
An increasing number of advanced products are being made from composite materials. These include an increasing number of car parts in order to reduce on weight and thereby minimize fuel consumption. Effectively dealing with dust that arises when machining is really important for quality, operational safety and health.
Composite materials
Customers in Other Industries are mainly in the composite material machining industry. Composite materials are used because of their unique properties in an increasing number of fields, such as aircraft fuselages, wind turbine blades, boat hulls, etc. Machining the material often involves grinding, which causes dust particles to spread through the air. Effectively removing the dust is very important from a quality perspective. Dust particles are also harmful to the eye and when inhaled.
Nederman provides effective systems with small flexible applications connected to individual tools where they extract particles at source. The range is complemented by a large number of peripheral equipment such as cable reels, suspension devices and arms making the use of the products simple and ergonomically correct. Nederman also provides advanced filters plus containers and systems that safely deal with flammable and explosive substances.
Other specialist areas
Within Other Industries Nederman includes a number of smaller application areas under development, such as for customers in the food, chemicals and pharmaceutical industries. Other areas include Heavy Industry and Marine/
Offshore industries. In Heavy Industry, Nederman has com- plete systems for sand blasting large objects.
Nederman also provides equipment for the Marine/Offshore industry, including cleaning systems for oil tankers.
N E D E R M A N ’ S A P P L I CAT I O N A R E AS
Other Industries
Driving forces
Nederman’s business is driven by strong, underlying market forces linked to health, the environment and effective production.
Global challenges
As awareness of climate change and other environmental problems increases, there is growing interest in investing in systems that contribute to a cleaner environment and reduced energy consumption. Among modern businesses, com- mitment to social responsibility and ethics are sharpening the focus on issues linked to the working environment and health. More comprehensive laws and regulations are being introduced concerning the environment and working condi- tions. Meanwhile consumers are placing stricter demands on products being manufactured under good working environ- ments with a minimum environmental impact.
International adaptations
New and prospective EU member states are adapting to the EU’s working environment and environmental impact demands. Developing countries are seeing an increased awa- reness of the consequences of environmental pollution and poor working environments. Industrial globalization results in companies that are increasingly more internatio- nally active, leading to the spread of technology, corporate cultures and customer demands.
Improved productivity and quality demands
Stricter demands for disruption-free production are leading to greater interest in investments that provide productivity and quality benefits.
Growth markets
Many of these markets show a fast growth within industrial production.
Nederman’s solutions provide:
• Cleaner, safer working environments
• Fewer operational stoppages
• Improved energy use
• Profitable, eco-friendly reuse of waste products
• Better quality of end products
• Improved environmental image and competitiveness
• Fewer days off sick and healthier employees
• Longer life expectancy of machinery and equipment
Nederman’s success factors
• As a supplier of systems the company takes responsi- bility for the entire process from design to application solution
• International market presence both with proprietary companies and a well-developed distribution network
• Nederman is active throughout the chain from product development to the aftermarket
• Nederman can meet customers’ needs throughout the
vacuum area. The company also has a comprehensive
range of hoses and cable reels, systems for manag-
ing consumable fluids and systems for separating and
reusing shavings and cutting fluids.
Product development
Nederman constantly develops new products and updates existing ones so that the range suits customers’ needs and the company’s business plan. Nederman has a well-developed organization and working model for this process. In 2009 the company completed development of about 15 new products.
Analysis and preparation are essential
Nederman proactively monitors market trends, technical development, legislation and the competition. All product development is preceded by careful analysis, with technical, environmental, user and marketing assessments being carried out before the product advances further in the development process. One example of important preparation is drawing up a global picture of the product’s areas of use, because it is expensive to customize for different markets retroactively.
Increasingly intelligent products and systems Most of Nederman’s products can be used independently or as part of a large system. The various parts of the system must be compatible with one another, and to make handling as intuitive and automated as possible increasing demands are placed on how intelligent the products and systems are.
A current market trend is the demand for an increasing degree of automation that boosts energy-saving. An example of this is a system that automatically adjusts the pressure according to how many workstations or tools are in use at one time. Another current issue is the production of services and service packages that support Nederman’s objectives for the aftermarket.
Patents and copyright
In 2009 Nederman had around 20 active patents protecting the company’s unique technical solutions against infringement.
Nederman has also copyrighted its design solutions.
New in 2009:
• ATEX-approved products for handling explosive dust.
• Products to meet new extraction and welding smoke legislation.
• Updated product range in the Emergency application area.
• Products for handling exhaust gas extraction
from vehicles with new kinds of exhaust pipes.
Personnel and environment
Responsible business enterprise is an integral part of Nederman’s business concept and a long-term condition for creating value for shareholders, personnel and customers
Nederman’s business is focused on improving people’s working environment conditions. Therefore, it is very important that we as an organization practice what we preach and take a lead position in sustainable business enterprise.
Nederman’s Code of Conduct has been drawn up according to common international principles for multinational companies.
The code emphasises Nederman’s values and responsibilities as a global Group and forms the basis for the policies and guidelines the organization follows.
Environment
The aim of Nederman’s environmental work is to minimize the company’s environmental impact. The company is ISO 14001 certified and applies a lifecycle perspective, which includes the following: product development, manufacturing, distribution, customer use and destruction/recycling.
In 2008 an LCA (Life Cycle Analysis) pilot study was carried out that showed that the environmental impact of the products studied lies in their energy use when being used, something that applies to the majority of the range.
None of Nederman’s own facilities require permits and all components are manufactured by subcontractors. Nederman places demands on suppliers and retailers to follow the company’s environmental policy. Nederman constantly checks suppliers, and environmental consequence analyses are carried out when new activities and processes are added.
In all product development Nederman uses material with the lowest possible environmental impact. The materials are,
with a few exceptions, completely recyclable and the few per cent that can not be recycled are sent for energy recovery.
To facilitate recycling, Nederman has set as a product development objective that it must be possible to disassemble all product parts in no more than twice the time spent to assemble them. Chemicals used in manufacturing the products are analysed continually.
Personnel
Nederman is a multinational company that considers cultural and ethnic diversity to be an asset and success factor. At year- end the company had 647 employees in 25 countries.
The company’s Code of Conduct applies to all employees and is well established in the organization. It is presented in the introduction training that all new employees must complete.
Training
Nederman trains personnel internally in technology and sales tools. In 2009 the focus in training was according to the organizational changes carried out over the year.
All personnel are entitled to at least one career development talk each year with their immediate manager. All personnel are freely permitted to belong to a trade union and collective agreements are applied in countries where these apply.
Nederman Code of Conduct
Internationally applied guidelines
Corporate governance
report
Nederman
Policies
Nederman is a multinational company with cultural and ethnic diversity.
Over the year human resources has been raised to a strategic level through the appointment of a Human resource manager to the Group management team. The focus is on identifying and transferring expertise throughout the organization to ensure that the company has enough qualified people to imple- ment a growth strategy. The need to add expertise is greatest in the sales organizations on growth markets.
A Performance Management scheme will be established before 2012 to safeguard a clear link between the company’s and employee’s individual objectives and skill requirements.
This will ensure in a natural way increased initiative taking as well as decentralised decision-making, closer to the customer.
To improve the competence level of the organization, the company also performs leadership development and introduces relevant management tools.
Employees by gender Employees by region
Women, 20 % Men, 80 %
Nordic region 52 %
Rest of Europe 32 %
North America 8 %
Rest of the World 8 %
Shares 2009
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.
The Board and CEO proposes the Annual General Meeting that no dividend will be paid for 2009 (2.50 per share).
Shareholders 31 December 2009
Number of shares Share %
1 Investment AB Latour 3,100,000 26.5%
2 Ernströmgruppen 1,172,000 10.0%
3 IF Skadeförsäkringar 1,160,400 9.9%
4 Lannebo Microcap 1,066,000 9.1%
5 Handelsbankens fonder 685,848 5.9%
6 JP Morgan UK 406,000 3.5%
7 Robur småbolagsfonder 348,245 3.0%
8 United Nation Staff Pension Fund UK 339,605 2.9%
9 BNP/ Henderson Pan European 274,454 2.3%
10 Sven Kristensson 164,881 1.4%
10 largest, total 8,717,433 74.5%
Other shareholders 2,997,907 25.5%
Total number of shares 11,715,340 100.0%
Percentage foreign ownership 21.9%
Nederman’s shares have been listed on the Nasdaq OMX Stockholm AB since 16 May 2007 as “NMAN”. At year-end the shareholders’ equity in the parent company was SEK 371.1 m.
OMX Nordic EUR PI – Nederman Holding
At year-end Nederman had 3,429 shareholders.
500 1 000 1 500 2 000 2 500 3 000 3 500
2007 2008 2009 2010
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
OMX Stockholm Small Cap PI
Nederman Holding AB
Number of shares traded thousands per month
SEK m 2009 2008 2007 2006 2005 Operating income and result
Net sales 1,052.0 1,272.3 1,041.4 877.8 807.5
Operating result before depreciation (EBITDA) 41.4 158.7 131.9 104.4 82.1
Operating result (EBIT) 23.3 140.8 114.1 85.4 63.1
Profit before tax 17.2 125.6 105.3 75.6 51.1
Net profit 14.6 92.6 75.2 55.0 48.9
Cash flow from operations
Operating result (EBIT) 23.3 140.8 114.1 85.4 63.1
Items not affecting cash flow 11.7 24.1 21.5 14.5 15.0
Change in working capital 98.3 -30.3 -30.4 -14.3 -0.7
Capital expenditures (net) -20.5 -20.7 -16.7 -14.7 -19.2
Operating cash flow 112.8 113.9 88.5 70.9 58.2
Assets, equity and liabilities
Fixed assets 493.2 483.9 448.9 421.3 425.8
Current assets 349.4 483.1 384.5 301.7 282.5
Cash and cash equivalents 90.9 90.8 76.4 50.2 55.0
Equity 514.7 529.1 451.8 376.6 325.2
Interest bearing liabilities 198.9 234.9 222.1 214.1 262.7
Non-interest bearing liabilities 219.9 293.8 235.9 182.5 175.4
Total assets 933.5 1,057.8 909.8 773.2 763.3
Profitability
EBITDA margin 3.9 12.5 12.7 11.9 10.2
EBIT margin 2.2 11.1 11.0 9.7 7.8
Return on shareholders’ equity 2.8 18.9 18.2 15.7 16.6
Return on operating capital 3.6 22.2 20.0 15.9 12.2
Capital turnover rate, multiple 1.6 2,0 1.8 1.6 1.6
Capital structure
Net debt 108.0 144.1 145.6 163.9 207.7
Net debt/equity ratio, % 21.0 27.2 32.2 43.5 63.8
Net debt/EBITDA, multiple 2.6 0.9 1.1 1.6 2.5
EBITDA/net financial items, multiple 6.8 10.4 15.1 10.7 6.9
Equity/assets ratio 55.1 50.0 49.7 48.7 42.6
Operating capital 622.7 673.2 597.4 540.5 532.9
Operating cash flow/EBIT, % 484.1 80.9 77.6 83.0 92.3
Share data
Number of shares per year 11,715,340 11,715,340 11,715,340 11,715,340 11,512,340
Average number of ordinary shares during the year,
before dilution 11,715,340 11,715,340 11,715,340 11,613,010 11,512,340
Average number of ordinary shares during the year,
after dilution 11,715,340 11,715,340 11,715,340 11,786,420 11,715,340
Shareholders’ equity per share before dilution, SEK 43.93 45.16 35.35 30.22 25.63
Shareholders’ equity per share after dilution, SEK 43.93 45.16 35.35 29.77 25.19
Earnings per share before dilution, SEK 1.25 7.90 6.42 4.73 4.25
Earnings per share after dilution, SEK 1.25 7.90 6.42 4.67 4.18
Employees
Average number of employees 672 710 568 528 511
* Excl. IPO costs SEK 6.7 m 2007
