2017 was yet another good year for Addnode Group, with continued
favourable growth, many new customers and several acquisitions that both
strengthen our offerings and make us more international. Major business
opportunities are emerging in pace with global trends such as urbanisation,
digitalisation and automation. We are well-positioned to continue growing
and improve our margins.
Strong growth and improved earnings
There are many reasons to be pleased with Addnode Group’s performance in 2017. We had favourable performance in all of our divisions and are also growing geographically, mainly through acquisitions. I am extra happy to note that we also increased our organic growth, from 1 per cent in 2016 to 5 per cent in 2017. We have achieved this through close dialogue with our customers and through investments in new software and services. Net sales increased by 15 per cent to SEK 2,520 m, and EBITA grew 24 per cent to SEK 212 m.
In the Design Management division we made major, international software acquisitions that strengthen our offerings to the real estate sector. Favourable demand primarily from the construction and real estate sectors, but also from manufacturing industries, led to organic growth of 5 per cent and improved earnings. This growth and the division’s profit for the year strengthened in tandem with a major shift that we carried out from licence-based sales of design software to a subscription-based model.
The Product Lifecycle Management (PLM) division also carried out a major international acquisition. The division’s strong growth in recent years has affected its margins, and during 2017 we took steps to improve profitability. Parallel with this we have seen positive effects from the division’s larger size and wider international reach. We have won several contracts in which our PLM expertise and global delivery organisation were decisive in customers’ choices to work with us.
The Process Management division has a distinct position in Sweden’s public sector. Successful investments in product development and a strong service offering resulted in organic growth of 6 per cent. During the year we carried out several complementary acquisitions and had strong growth especially for case management systems and e-archive services for government authorities and municipalities.
Acquisitions a part of our growth strategy
During 2017 we announced ten acquisitions with combined annual sales of approximately SEK 450 m. The largest acquired companies, SWG and Intrinsys, are both based in the UK, but their operations span from Canada and South Africa to the Gulf states and Australia. For the Design Management and Product Lifecycle Management divisions we see great opportunities for continued acquisitions both in the Nordic region and the rest of Europe. In Process Management we are focusing on acquisitions in Sweden and the other Nordic countries, mainly software companies with customers in the public sector. We are engaged in an ongoing dialogue with complementary acquisition candidates as well as with larger companies that could expand the Group.
Digitalisation generating growth
The drivers of customers’ investments and our growth lie primarily in the major trends and challenges that we see in the world around us. These range from urbanisation – with the emergence of smart cities – to automation of industry and public administration. Demographic changes, including an ageing population and increased demands for sustainable development, are also important societal challenges where we are helping our customers find solutions through the opportunities afforded by digitalisation.
Digital solutions for a sustainable society
Our software and services are creating opportunities around the globe to create and manage products, properties and infrastructure in a digital world. Our systems are used in manufacturing industries, in the construction and real estate sectors, and in the public sector, where they contribute to automation of processes to the benefit of customers and citizens alike. Through innovation and continuous development in close collaboration with our customers we are innovating digital solutions that are creating opportunities to build a more sustainable society.
A new phase taking root
I took office as CEO in spring 2017 after three years as CFO and seven years in charge of the Group’s acquisition processes and investor relations. We have grown from sales of SEK 795 m in 2017 to SEK 2.5 billion in 2017. We have developed from being a local Swedish company with operations in the Nordic countries to a European group with global reach, and we have become a Mid Cap company on the Stockholm Stock Exchange. During the last ten years we have had average annual growth of 12 per cent. It has been a fantastic journey, and I look forward to continuing to lead the company in accordance with our set strategy. We have laid a solid foundation to build further upon and are well-positioned to continue growing and improve our margins.
President and CEO