Ideally positioned for new Internet and cloud solutions
Beijer Electronics Group has emerged from last year stronger, and created a new platform for sustainable high and profitable growth. We achieved what we said we would; the Group is in the process of realigning in a more customer-oriented direction, simultaneous with significantly downscaling our cost base. Production in our Beijer Electronics business entity was concentrated on Taiwan, and investments in production enhanced quality and delivery accuracy. Product development was intensive, and we launched new product ranges.
But we’re still not satisfied. Our sales and profit for the full year 2016 remain unsatisfactory. Our ambitious investment plans for the Westermo and Korenix business entities have taken longer to implement, while the market has been fairly sluggish. The realignment of the Beijer Electronics business entity was essentially complete as planned in the year, although some market segments like oil and gas remained slow.
Progress heading in the right direction
Despite all this, I can say that progress is in the right direction. Operations gradually improved in the year. An operating loss in the first quarter went positive and continued in a progressively more positive direction for the rest of the year. Additionally, the year finished strongly, with a 20% increase in order intake compared to the average for the preceding quarters. We have nurtured our product development process, maintaining a high level of development resources. Beijer Electronics launched a new generation of operator panels, the X2 series, upgraded iX software and introduced tools for connecting to the Internet. Progress in the Internet of Things is now rapid, with connection to the cloud through a range of services. Beijer Electronics is ideally positioned to be able to deliver these new solutions.
Westermo launched new versions of the WeOS operating system and several switches with very high transmission speeds, as well as new wireless solutions. Korenix developed a competitive data communication product range, focusing on security and monitoring.
Meanwhile, we have radically regenerated our range, so that most of the Group’s future sales will be generated from new products. Our sales organization has altered, with more employees with differing competences becoming involved in the sales process. We are gradually shifting our focus from products to solutions and customer value.
Implementing major change has put our organization under strain. Without Beijer Electronics Group’s highly competent and professional employees, we wouldn’t have been able to achieve our realignment as quickly, or in relative terms, so smoothly. In short, our people have made an amazing effort.
In tandem with its realignment, Beijer Electronics has declared a new vision for 2021. Fundamentally, this is about the Fourth Industrial Revolution, or Industry 4.0. Digitalization is transforming market standards. The trend is towards machinery and systems linking up and connecting to the Internet. New concepts like smart automation are emerging. Solutions feature the control, connection and presentation of data for mission-critical applications. Software will play a progressively greater role in various solutions helping enable customers to optimize their processes. Customer benefit will come first, and we are endeavoring to secure closer partnerships with our customers.
In industrial data communication, Westermo and Korenix are completing the strategic initiatives and investment programs that have been decided. We are retaining our goals for each business entity, even if it will take longer to achieve them.
Prospects of a better 2017
The consistent theme of Beijer Electronics Group can be summarized as Control, Connect and Present digital information flows in various types of automation and communication solutions. The Group’s three business entities deliver sophisticated software and hardware used in a raft of applications, which now also represent an integrated and complete offering.
We have now staked out our path for the coming years and secured room to maneuver for our ongoing development initiatives. Building on the actions we took in 2016, we think that Beijer Electronics Group will be able to achieve higher sales and stronger underlying operating profit in 2017. Meanwhile, we are targeting growth of 7% and an EBIT margin of 10% during the course of 2018.
President and CEO