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Share 2016-09-29 17:07 RATOS B 40.51 SEK

Diab

Operations

Diab is a global company that develops, manufactures and sells core materials for sandwich composite structures for, among other objects, leisure boats, blades for wind turbines and components for aircraft, trains, industrial applications and buildings. The core material – which has a unique combination of characteristics such as low weight, high strength, insulation properties and chemical resistance – is used in construction within several market segments: Wind Energy, Marine, Transport, Industry and Aerospace.

Diab has a globally strong position in the market for core materials for sandwich structures, with special strength within cellular plastics. Over 95% of Diab’s sales are to customers outside Sweden. The company has production units for material in Sweden, Italy, the US and Ecuador. Material processing takes place in the production units as well as in China and Lithuania. The company has approximately 1,100 employees in some 20 countries and its head office in Laholm.

Market

The market for core material grows with the underlying customers’ production volumes, such as the number of wind turbines and boats, and also through the increased use of sandwich structures in existing and new applications. Growth is driven by efforts to achieve structures with greater strength and lower weight. 3A Composites and Gurit are among the company’s competitors.

Following lacklustre volume development in recent years, the market returned to growth and conditions in the global wind energy market improved in 2015. Good market growth is expected over the next few years.

The year in brief

Diab increased sales by 25% in 2015, where currency-adjusted growth amounted to approximately 12%. The wind energy market was the primary growth driver, but also other segments, Aerospace in particular, performed well. Diab grew in all regions, but a slowdown in China was noticeable at year-end.

The profitability trend was good following the strong increase in sales and the company’s operational leverage, but also due to favourable currency effects.

Diab has invested in a new IPN foam production plant in China to further consolidate the company’s competitiveness in China. The plant is scheduled to begin operations in 2016 and the investment has been partially financed through a capital contribution from Ratos in the amount of SEK 40m during the year.

Several measures were implemented throughout the year to strengthen the company’s preventive efforts in global export control.

Sustainability

Diab has an updated sustainability strategy as of 2015. Key issues include health, safety and working conditions, good business ethics and preventive anti-corruption processes coupled with systematic environmental processes including resource efficiency. Diab’s products contribute to reducing weight in customers’ applications and thus help to cut fuel consumption in vehicles, boats and aircraft. In 2015, Diab subscribed to the UN’s principles for corporate responsibility, Global Compact. Three of six production facilities are ISO 14001 certified, and two more are in the process of becoming. 

Development potential

During the period of Ratos’s ownership, Diab has evolved into a global player and become a world-leading supplier of core material for sandwich composite structures through investments in the company’s product offering and production.

Our assessment is that Diab has an attractive long-term growth profile driven by the need for strong and light structures, a sustainability perspective and good prospects for growth in applications. We also see good long-term opportunities for growth and improved profitability through Diab’s operational leverage. The establishment of a new core material production plant in China in 2016 is also expected to contribute to improved earnings in the longer term.

Ratos intends to continue to focus on the development of Diab’s product offering, the company’s global market presence and a sales organisation with applications expertise.

(Mainly from Ratos's annual report 2015.)