Report by the chairman of the executive board
The ERIKS group has been achieving fantastic results for several years now. The year 2007 was no exception. In 2007, ERIKS achieved its best results ever. Sales rose by 74.7 percent, EBITA rose by 73.4 percent and the R.O.I. amounted to 19.3 percent. On behalf of the executive board, I would like to express our sincere thanks and appreciation for the exceptional efforts of our employees. It would not have been possible to achieve this growth and the corresponding results without them.
Market conditions were very favourable in 2007. Nevertheless, it could not be taken for granted that ERIKS would derive larger than average benefits from this. The policy implemented over the past few years has clearly been fruitful. The ERIKS twin business model, in which two different sales organisations with a shared infrastructure serve both the market for machinery and equipment construction and the maintenance market, has proved to be extremely successful. In addition, ERIKS has made considerable investment in knowledge and infrastructure in the last few years and this has increased productivity. The ERIKS group is keen to be a modern present-day company in every respect.
In the past few years, much attention has been devoted to increasing organic growth. Our market share has increased in recent years in almost every region. In 2007, with an organic growth rate of 11.1 percent, our market position has once again been significantly strengthened. Apart from organic growth, much attention was paid to the integration of Wyko (UK), Turpen (USA) and Passerotti (Poland) last year. In order to speed up the formation of concrete integration plans, a development team was assembled immediately after the acquisition of Wyko. This team was responsible for bringing people together, exchanging contacts and sharing information. In this way, many results were achieved even in the first year after the acquisition and a great deal of positive energy was generated internally.
The acquisition of Wyko has been very important for ERIKS. At the end of 2006, we acquired over 2,000 new colleagues and became the undisputed European market leader in our field; sales rose by well over 70 percent and, with the United Kingdom, we added a fourth domestic market to the existing markets of Belgium, the Netherlands and Germany. However, the biggest change was the new size of the ERIKS group. With over 4,600 employees and sales worth almost one billion euros, ERIKS has become a different company. Employees, customers, suppliers and other stakeholders regard ERIKS differently now. We have always maintained that the combination of ERIKS and Wyko is a more attractive proposition for our customers than the two companies operating separately. This has proved to be completely correct. In the UK and in the other regions, it is clear that ERIKS is taken very seriously and that successes are being achieved everywhere.
Wyko, Turpen and Passerotti have found their place within ERIKS. Much work has been done in the past year, but there is still a lot to be done. ERIKS will continue to grow, both organically and by means of acquisitions. Our strategy is clear and within it our twin business model forms the basis for the future. We shall continue to invest in know-how, innovation and technology. For its industrial customers, ERIKS is a professional provider of industrial services with a passion for technology. Our geographical markets and our product groups offer a wealth of opportunities for further growth. In the existing clusters there are still many challenges in our market segments.
ERIKS will also make a positive contribution over the coming years to the business operations of its customers. Doing business with ERIKS has to be advantageous to our customers. Our know-how and our products help to cut maintenance costs and energy consumption, reduce environmental impact, increase productivity and make for a safer workplace.
It must be said that there is uncertainty regarding future economic growth and the development of industrial production. Basing ourselves on our observations of our markets, we look forward to 2008 with a great deal of confidence. ERIKS is in fine shape, but it is too early to forecast how the results will turn out for the whole of 2008.
Executive board of ERIKS group nv
J. van der Zouw, chairman