Key Financial Figures for 2011/2012
Main activities
The main activities of the AVK Group are development, production and marketing of valves, hydrants and accessories for the supply of water and gas, sewage treatment and fire protection.
Industrial water treatment has become another important activity for the AVK Group, helped by the acquisition of the InterApp Group in 2010 and the Orbinox Group in 2011. A comprehensive programme of valve solutions is marketed to customers within a wide range of market sectors including power generation, the marine sector, pulp and paper production, the chemical industry and air separation.
Production and sales take place via the Group’s network of companies in Europe, the Middle East, North and South America, Australia, Asia and Africa.
During 2011/12 AVK made several acquisitions including the one mentioned above, Orbinox Valves International SL in San Sebastian, Spain, with subsidiaries in Spain, Canada, India, England, China, the United States, Indonesia, Brazil, Germany and France. Orbinox’s product portfolio comprises valves, primarily knife gate valves, penstocks and dampers for use within water and waste water treatment, power generation, mining, the paper industry and air separation. The following companies were also acquired during the year: Cyl Knife Valves SL in Spain, TEC artec GmbH in Germany, Valves & Instrumentation Pty. Ltd. in Australia, Syddal Ltd. and CPH (Thurmaston), both in the UK.
Development of key financial figures
Net sales continued to show a positive development during the past year, and an increase to DKK 3.2 billion corresponding to a growth rate of 22 per cent was achieved. The sales growth was realized in spite of difficult market conditions. It was helped by the acquisition of companies and a strengthening of the Group’s market position, among other things through the sale of new products and expansion in the new markets.
The operating profit amounted to DKK 206.3 million compared to DKK 197.5 million in 2010/11. The operating margin was impacted by the negative market trend and accompanying lower sales as well as investments in the development of new markets. The new acquisitions made a positive contribution to the profit of the Group.
The most important investment in the year that has passed was the extension of the production capacity at AVK GUMMI A/S in the form of a new rubber mixing plant. In many other companies considerable investments were also made in order to upgrade and expand the production capacity of the Group.Expected Group developments
There is still much uncertainty with regard to economic developments – not least in Europe, but also on a global scale. This makes it difficult to predict the market development in the coming year. We expect the general investment and activity level of the Group’s markets to stabilize, with a slow improvement in the course of the year.
In Europe we expect the level of activity to remain at a moderate level, with stabilization in Southern Europe and a continued positive development in most of Northern Europe. Likewise, we expect a continued positive development in the Middle East and in North America.
The Group’s presence in the growing markets in Asia, Latin America and Africa will be continuously expanded, in the form of sales companies and local production. In these markets, there is a large need for infrastructure investments within the areas of water and waste water, and a growing share of the Group’s turnover is expected to come from these markets in the years ahead.
The acquisition of InterApp and now also Orbinox has strengthened AVK’s position within the industrial market for water treatment considerably, just as the Group’s total product package within water and waste water treatment has been strengthened and will contribute to a general enhancement of the Group’s market position in the coming years.
On the whole, a positive development of both turnover and operating profit is expected in the coming year.