Annual Report 2012 - Inwido

A MESSAGE FROM THE CEO
Increasing efficiency and profitability, focusing further on developing
new products and finding the right people for the tasks – these are a few
of the important steps that Inwido is currently undertaking.
Not according to our expectations
but at the same time
reassuring. This somewhat
contradictory impression is
what comes to mind when I summarize
Inwido’s performance in 2012. On one
hand, we are disappointed that we did
not reach our financial goals. Adjusted
net sales fell by six percent while our
operating margin reached 7.8 percent.
On the other hand, we still managed
to turn the trend during the second half
of the year in a challenging market,
delivering an operating margin exceeding
10 percent. This reassures me that,
with our strategic focus on improving
consumers’ well-being, we are on the
right track towards becoming a
consumer-driven company.
The past years have affected the economy
negatively at many levels. Naturally,
this also impacts our business through
declining volumes. With this in mind,
I am satisfied with the fact that we
managed to increase our market share
in most of our markets in 2012. Inwido
Denmark, in particular, performed well.
In the second half of 2012, we also
managed to turn Inwido Europe from
loss to break-even for the first time. We
are progressing from low levels, but it is
nevertheless promising that we are now
capturing market shares and delivering
positive earnings. All in all, I am convinced
that this is the result of our hard
operational work and that we made the
right decision during the previous downturns
in 2008 and 2009, to maintain
our focus on cost-efficiency and how
to reach end-consumers.
On the downside, Inwido Sweden
did not expand the way we hoped in
2012. Development in the consumer
market was weaker than we anticipated,
with overcapacity in our factories as a
consequence. However, we have now
adapted to the right levels and are constantly
trimming our costs and adjusting
our structures where needed.
Let me also make a few comments on
what lies ahead of us. In the near future,
we will be focusing on fine tuning our
operations, rather than building capacity
for additional volumes. In the long run,
however, we see several growth opportunities
since the under lying need for
new-build and renovated homes is
already considerable around Europe.
At the same time, awareness of the need
for sustainable products and solutions is
growing among consumers. This opens
up possibilities for us to further compete
against materials like plastic, with our
wood-based products. To meet these
needs, we must continue to closely
monitor consumer trends, develop and
launch new product solutions and
concepts as well as accessories.
Among our major initiatives during 2012
I would like to point out a few that
have a particular bearing on the future.
First, our strategy to move from being
a production oriented company to one
that is consumer-driven was refined
and clarified even further. We divide
our strategic ambitions into three areas:
market, products and efficiency. In addition
to this, we have complemented our
market strategy with a green-field plan.
The first step will be taken in 2013,
when Inwido will establish a presence
in certain selected markets on the European
continent. Simultaneously, we will
continue to identify synergies and build
effective distribution across the group.
Secondly, in 2012, we acquired a
high-tech firm in Sweden. This is actually
a milestone – we can now combine all
of our knowledge in wood and craftsmanship
with knowledge in important
new technologies. Product development
is key to our business, and this will give
us further competence in developing
the next generation of solutions and
products for the smart home, with
consumer well-being in mind.
Thirdly, we successfully sold our Home
Improvement-business, mainly because
we found that it did not fit with our
future plans. This improves our opportunities
to enhance efficiency and focus
on developing the right products and
services for future consumer needs
within windows and doors.
While on the subject of our strategic
focus on innovation, there is a fourth
event I would like to mention: the
Inwido Compete and Incubate Innovation
Challenge, an activity we conducted
in cooperation with Swedish incubator
Ideon in Lund. The basic idea is quite
daring in today’s competitive business
climate – to innovate in public. During
ten weeks, students, professors, entrepreneurs
and external businesses were
invited to compete with new ideas on
products and concepts in windows and
doors. The challenge was a great success,
and we ended up with at least seven
possible business ideas on which we are
now working.
Finally, I would like to emphasize the
importance of our co-workers. During
2013, we will continue our journey from
being a fragmented organization towards
one group with a lean approach and the
best cost efficiency in the business. This
makes HR an important strategic tool
– we need to secure not just the right
future competences, we also need to
ensure that we have the right leaders
for the tasks at hand. I am convinced
that if we have the right people for the
business, working in smart ways and
with the courage to improve, we will
be able to serve the market with the
next generation of windows and doors
– securing our competitive position
for the long term.
MALMÖ, SWEDEN IN FEBRUARY 2013
Håkan Jeppsson,
President and CEO
Annual Report 2012 | Inwido AB 7