Annual Report in English - Consilium

The total number of vessels and the volume transported by sea
have both increased. This is important for our aftermarket. However,
there is overcapacity in several segments of the merchant
fleet, which is resulting in lower freight rates for shipping companies,
and a decline in new orders to shipyards. A reduction in
orders for new commercial vessels has increased the price competition
in this market. A stronger Swedish krona has gradually
affected Consilium’s margins. In response, we have reduced our
fixed costs considerably.
Orders for replacement investments and upgrading of equipment
on commercial vessels remain at a low level. Upgrades in
other segments show a large increase. Aftermarket sales increased
in 2011. The decline in sales to commercial vessels was offset by
an increased focus on new niche areas and non-cyclical market
areas (sales of products and systems for military vessels and
special radar systems for port surveillance and detection of oil
spills) and by sales of ships’ bridges and supplementary external
products. Deliveries of fire alarms to the land market (buildings,
trains and underground railways) increased in 2011. Order intake
for the Marine & Safety business area totalled SEK 746.6 (707.4)
million in 2011, which is 6 percent higher than in the previous
year. Net sales amounted to SEK 839.5 (757.5) million, which
is 11 percent higher than in the previous year. Operating profit
(EBIT) amounted to SEK 68.2 (54.0) million, which is 26 percent
higher than in the previous year.
Fire safety & Automation business area
Consilium has concentrated its offering of fire safety systems and
automation systems on the oil and gas industry. As a result of the
progressive increase in sales of fire safety systems to the on-shore
oil and gas industry, the business area has now been more appropriately
named Fire safety & Automation. Other divisions with
sales in other market areas have been discontinued. In 2011, the
scheduling of many of our large automation and fire safety projects
was changed. The order intake improved in the latter part
of 2011. The order backlog remains strong. The order intake for
Fire safety & Automation was SEK 126.6 (183.5) million. Net
BoARD oF DIReCtoRs’ RePoRt
sales amounted to SEK 138.5 (168.8) million. Operating profit
(EBIT) for continuing operations was SEK 5.4 (3.1) million.
global market organisation
Consilium’s product companies are responsible for development,
technical support, purchasing, production, technical manuals,
sales materials etc. These product companies represent a necessary
base for Consilium’s business. The market companies are an
important cornerstone of our global organisation, with responsibility
for local sales, service and customer support. Overall, we
have a strong customer offering.
Consilium continues its strategy of strengthening the local
presence around the world and the organisation within the
market companies. Resources for sales, project design, service and
support have been moved closer to the customers. At the same
time, the product companies are strengthening their support to
the market companies.
Consilium has built up a global market organisation with its
own companies in 19 countries. These local companies are now
responsible for the bulk of our sales volume. There are also local
representatives in more than 50 countries. More than 90 percent
of sales are to markets outside Sweden. More than 60 percent of
Consilium’s employees are outside Sweden.
Europe and North America continue to be important markets
for Consilium, with a large number of shipping companies and
specialised shipyards, and an important aftermarket. However,
Asia is becoming an increasingly important market for Consilium.
More than 60 percent of Consilium’s full-year sales for 2012 are
expected to go to customers in Asia. As a large proportion of the
Company’s future growth will be in Asia, Consilium will continue
to expand its operations in that part of the world.
Consilium is progressively consolidating its global aftermarket
organisation and the Group’s revenues from the aftermarket
have increased. Additional establishments will be implemented to
strengthen Consilium’s global market organisation.
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