Annual Report 2004 - HL Display

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MARKNAD Market position The retail sector and the brand manufacturers that supply the retail sector with products are currently characterised by a clear concentration in terms of ownership. The major chains and brand manufacturers are active in most markets all over the world. HL Display’s ability to further develop its relations with these key customers is crucial for the company’s continued success. This also forms the basis of HL Display’s strategy of international expansion. By following customers when they set up businesses in new markets, HL Display can not only benefit from the existing business partnership, but also expand its service to these customers and further reinforce the relationship. HL Display currently supplies approximately 95 per cent of the biggest retail companies in Europe and approximately 75 per cent of the biggest retail companies in the world. Western Europe In Western Europe HL Display has a strong position as a supplier of both products and category solutions to the retail sector and to brand manufacturers. With its extensive knowledge of the end consumer and of the requirements and needs of the retail sector and brand manufacturers, HL Display produces solutions that create added value in the form of increased sales and reduced costs. Through a large number of sales companies in Western Europe, HL Display can give the same level of service to its customers, whatever the market. Eastern Europe Just as in Western Europe, HL Display has sales companies in the most important markets in Eastern Europe. As the retail sector is not as well developed in Eastern Europe, HL Display’s sales HL DISPLAY ANNUAL REPORT 2004 16 are largely based on product sales rather than sales of category solutions. However, the amount of category sales as a proportion of total sales is growing gradually as the market develops, and HL Display is working actively to encourage the trend towards better category solutions. In Eastern Europe more sales are made to brand manufacturers compared to the West. Brand manufacturers such as the Altria Group, Coca Cola and Unilever established a presence in Eastern Europe at an early stage, and therefore enjoy a strong position in the market. Asia In Asia there are few competitors with products of the same high quality. This, combined with the relationships that HL Display has already established with the major global players, means that the company has a strong position in the market. Several markets in Asia now have a very well developed retail sector, which is creating demand for both HL Display’s products and category solutions. However, the price profile in Asia is different to that in Western Europe. This means in turn that the retail chains do not invest in their stores on a similar scale. The challenge facing HL Display is to produce solutions that also meet the customers’ cost requirements. North America HL Display’s operations in the North American market are run in the form of a joint venture with American company Trion Industries Inc, who take care of all sales work. In North America sales are targeted exclusively at retail companies. The product range is also much narrower than in the rest of the world, consisting primarily of the HL Datastrip and the Optimal shelf divider system. However, there is potential to extend the range to include category solutions.
Developments during the year Sales trends for HL Display were positive during 2004. The Group’s sales totalled SEK 1.3 billion, an increase of 16 per cent compared to the previous year. The trend has been consistently positive in all regions where HL Display is active, not least in Asia, where sales increased by 61 per cent. However, the increase in Asia is from a low sales base in terms of turnover. Western Europe Sales in Western Europe increased during the year, largely thanks to strong sales in HL Display’s two biggest markets, France and the UK. Sales in France increased by 15 per cent and in the UK by 34 per cent. In both France and the UK the major customers adopted a cautious approach in 2003, and most investments were put on ice. These customers increased their investments instead in 2004. On the German market the trend has been far short of the company’s expectations for several years. A number of measures have been instigated, including costs being reduced through the shared service centre in Bergen op Zoom. The trend in 2004 was somewhat better, with a sales increase of 2 per cent. This is still not satisfactory, and work on increasing sales will continue in 2005. Eastern Europe The market is now starting to become well and truly mature in most parts of Eastern Europe. This means that the market is starting to become saturated in terms of the number of stores, and there is a reduction in the number of new building projects. In these markets customers are starting instead to invest in their existing stores. Poland, the Czech Republic and Hungary are examples of mature markets. Sales in Poland and the Czech Republic remained largely 17 HL Display’s system for automatic product feeding guarantees that products are always displayed at the front of the shelf. SALES PER REGION, SEK M Asia and Australia 65 North America 32 Western Europe 1,037 Eastern Europe 177 HL Display has increased sales in most markets during the year. Developments in the Asian market has been especially positive and the potential is believed to be good. MARKNAD HL DISPLAY ANNUAL REPORT 2004
Page 1 and 2: HL Display Annual Report 2004
Page 3 and 4: The year in brief . Group net sales
Page 5 and 6: ments. These customers have now ins
Page 7 and 8: panies are measured on the basis of
Page 9 and 10: DEVELOPMENT OF OPERATING EXPENSES,
Page 11 and 12: HL Display’s new Slimline shelf-e
Page 13 and 14: emphasis on further developing its
Page 15 and 16: The new EasyShelf system makes it e
Page 17: the region attractive to the multin
Page 21 and 22: Competitors The competitive situati
Page 23 and 24: 21 Super GB uses colour codes to he
Page 25 and 26: the company’s products. This mean
Page 27 and 28: EMPLOYEE FACTS Employee categories
Page 29 and 30: Customer agreements are normally re
Page 31 and 32: 29 THE HL DISPLAY SHARE Options sch
Page 33 and 34: Income statement Comments on the co
Page 35 and 36: 33 Group Parent Company BALANCE SHE
Page 37 and 38: Cash flow statement 35 CASH FLOW ST
Page 39 and 40: Financial instruments An explanatio
Page 41 and 42: Note 3 BREAKDOWN OF NET SALES BY GE
Page 43 and 44: Note 15 TAX ON PROFIT FOR THE YEAR
Page 45 and 46: Note 21 SHARES IN GROUP UNDERTAKING
Page 47 and 48: Note 28 LONG-TERM LIABILITIES Of lo
Page 49 and 50: Note 35 TRANSACTIONS WITH RELATED P
Page 51 and 52: Nine year summary 49 NINE-YEAR SUMM
Page 53 and 54: Board procedures 2004 HL Display’
Page 55 and 56: 50 years of HL Display It was 50 ye

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