Market and sales
The group’s markets developed well in general in 2018. Increased digitalization and growing e-commerce remain strong trends.
Market development Swedol’s offer is primarily oriented to business customers in five prioritized customer groups; Building and Construction, Industry and Workshops, Haulage and Transport, Farming and Forestry plus Public Services.
In geographic terms, the group is established in Sweden, Norway, Finland and Estonia. All the group’s geographic markets enjoyed good growth in 2018. In our single biggest market Sweden, growth flattened towards the latter part of the year. The market in Norway was boosted by increased activity in the offshore sector. The markets in Finland and Estonia developed strongly throughout the year. The Swedish construction cycle is likely to have a big impact on Swedol’s market. The Swedish market as a whole was negatively affected during the year by growing uncertainty in the real estate sector, increased costs for freight and commodities and the weakness of the Swedish krona.
The group’s customers primarily consist of small and medium size enterprises which as a rule are well able to maintain high employment even during periods when there are fewer large construction and property development projects. Within the Building and Construction customer group, this has revolved around construction, that is to say, various forms of ground work.
Increased digitalization is a powerful trend with the potential to impact areas such as sales, logistics, internal efficiency drives and the automation of processes. Digitalization is a prioritized area for Swedol and the group sees a big potential as companies that successfully leverage the benefits of digitalization can strengthen their competitiveness.
E-commerce continues to grow. All significant companies on the market are looking to develop their e commerce solutions while pure e-tailers only make up a limited part of the market to date. A well-developed store network still offers a competitive advantage that can be complemented by alternative logistics arrangements to meet customer needs and purchasing patterns. The market has been in a consolidation phase for some time now where larger companies and chain concepts can leverage the advantages of economies of scale in areas such as purchasing, logistics, sales and IT. Swedol is following the trend via an active acquisition strategy.
In 2018, the group enjoyed profitable and very largely organic growth on all markets. Revenue growth for the group was 5.7 percent. Compared with the Construction and Ironmongery index, the group has strengthened its position and taken marketshares. This has been complemented by acquisitions that have strengthened the group’s presence in Finland. Workwear and Personal Protection grew by 4.7 percent. Sales have a broader geographic spread compared to Tools and Supplies as the vast majority of group sales in Norway, Finland and Estonia consist of workwear and personal protective equipment.
Our Tools and Supplies Division increased sales by 6.8 percent. Sales are chiefly made on the Swedish market and to a lesser extent on the Norwegian market. The division gained a foothold in Finland in 2018 via the acquisition of Metaplan Oy.
Swedol encounters competition on a local, national and international scale in all its customer groups. The competition picture on Swedol’s markets is consolidated to different degrees. The group’s biggest markets, Sweden and Norway, have a higher degree of consolidation, while the markets in Finland and Estonia are more fragmented as they are at an earlier stage of consolidation. The Group’s competitors consist of industry and construction oriented chains, plus local independent companies. Specific competitors often vary between the different customer groups, as a chain can be big in one specific area while not trading in another area. The group’s markets developed well in general in 2018. Increased digitalization and growing e-commerce remain strong trends.