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Share 2016-09-29 11:56 RATOS B 40.61 SEK

HL Display

Operations

HL Display is an international supplier of products and solutions for in-store communication and merchandising. The three key customer segments are retail food, brand manufacturers and retail non-food.

HL Display helps its customers to create an attractive store environment which increases sales and helps customers to reduce costs. The company’s products include datastrips, shelf management systems, printed in-store communication, merchandising stands, frames, bulk food dispensers, lighting systems and digital signage.

Production takes place in Poland, Sweden, China and the UK. Sales are conducted through its own sales subsidiaries and distributors in a total of 43 markets. The company’s largest markets are the UK, France, Sweden and Norway.

HL Display has a total of approximately 1,000 employees.

Market

The global and regional development of the retail sector is pivotal for demand for HL Display’s products. Newly opened stores and store re-profiling, the launch of new store concepts and improved store efficiency and productivity are key growth drivers, as are the campaigns and profiling ambitions of brand manufacturers.

The company operates in a highly fragmented sector with many local competitors. HL Display is the only global player in its niche. The current trends of store upgrading that focus more on differentiation and merchandising concepts streamline work in stores and create possibilities.

The year in brief

2015 was characterised by a stable sales trend. Sales were, however, negatively impacted by a weaker market in Russia as well as ongoing restructuring of a number of small sales offices. Sales in retail food, particularly in the UK, have after a weak opening grown strongly at year-end, while sales in Western Europe and Asia showed good growth throughout the year.

Initiatives that started in 2014 to simplify and rationalise operations continued in 2015. Alongside cost-saving measures in administration and now closed sales offices, production and logistics relocated from Sweden to Poland during the year. The ongoing restructuring and streamlining measures led to a total of SEK 59m in costs affecting comparability.

In the autumn of 2015, Nina Jönsson was appointed new CEO and she took over during the first quarter of 2016.

Sustainability

HL Display has worked actively with sustainability issues for many years. The company’s prioritised areas are business ethics and anti-corruption given its operations in a number of markets with an elevated risk, as well as environmental issues that focus on resource efficiency, recycling and choice of raw materials. All production facilities are certified according to ISO 14001. HL Display subscribed to the UN Global Compact in 2010. 

Development potential

HL Display has a market leading position in an attractive sector with good growth potential and major opportunities for efficiency improvements. Since Ratos’s acquisition, HL Display has reviewed its production structure, relocated
production to low-cost countries and implemented a cost-cutting programme, which all combined improved the competitiveness of HL Display’s product range. Over the past two years, the company has also worked actively to create its own market through concept sales, more structured activities for global customers and continued product innovation, which gave results in 2015 in the form of growth in concept sales, particularly in mature European markets. The focus going forward is to continue to further improve sales efforts. In all, our assessment is that the company has good potential for growth, both through organic growth in existing markets and through add-on acquisitions.

We also see excellent opportunities for improved margin through the company’s operational leverage and as a result of the restructuring measures carried out in 2015, and which will provide effects in years to come

(Mainly from Ratos's annual report 2015.)