Strong Market & Earnings

During the year, the world market was characterised by continued high energy prices and strong demand for raw materials, though with a somewhat slower growth rate. The market for Hägglunds Drives’ products remained good, particularly in the Group’s raw materials-related operations. Growth in our two largest segments, Mining and Materials Handling and Marine and Offshore, was very strong, while Pulp and Paper showed weaker development than last year. Sales rose in all the Group’s geographical markets. Growth was strongest in the Nordic countries and the rest of Europe. Initially, North America, Asia and Australia developed more weakly, but there was a considerable recovery during the latter part of the year, particularly on the Chinese market. Turnover and earnings both rose for the eighth consecutive year. The sharp increase in operating profit, up 37 per cent, was mainly due to increased volumes, improved margins and high resource utilisation in production. The operating margin (EBITA) rose from 17 to 20.4 per cent, while cash flow from operating activities increased from +123 MSEK to +285 MSEK. Growth was stimulated by the success of the Group’s new Gemini high-power system, which is gaining market shares in several segments. A new sales company was established in South Africa and business activities have been in full operation since the end of 2007. The expansion of the hydraulics laboratory was completed and lean manufacturing is being introduced into the production process. In order to achieve an optimal structure for continued expansion, an internal reorganisation was implemented, while extensive efforts were made to formulate, further develop and implement group-wide policies, procedures and instructions. “Our markets show strong demand, we have very competitive products and services and, last but not least, extremely skilled employees – together this provides excellent conditions for the Group’s continued successful growth,” says Per Nordgren, CEO.

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