The year 2024

CEO Mari Kadowaki comments on the year 2024

Market and performance

The market for aluminium extrusions in northern Europe was characterized during the past year by a continued cool construction industry and the delay in vehicle electrification. Thanks to our wide range and variety of customers, we have nevertheless been able to keep delivery volumes stable, leading to a result in line with 2023. The recession in Sweden was offset by export sales. Domestic and foreign customers with significant exports have interacted and thus contributed to stability for us during the year.

For the third quarter, we reported a deterioration in margins compared to the previous quarters and we assessed that half of the deterioration was of a temporary nature and the other half was due to the more challenging market situation. The remainder of the year was characterized by several European presses announcing spare capacity and we remained prepared to maintain flexibility. To date, in February 2025, we continue to see weak economic conditions in our main markets.

Our delivery volume totalled 34,175 tonnes (35,475), a decrease of four per cent, which is less than the declines we have seen in markets across Northern Europe. During the year, 33,900 tonnes of aluminium extrusions were produced. Finished goods inventories decreased, as did the total volume of metal in stock. Operating profit* was SEK 152.0 million (134.7), corresponding to a margin of 6.7 per cent (5.5). The price and supply of aluminium in Europe and globally are very much affected by political decisions in different parts of the world. At present, the uncertainty about what will happen is unusually high. Decisions that will have an impact include, for example, the design of US tariffs and EU changes to CBAM legislation. The effects are difficult to predict. We are therefore actively monitoring the world around us and limiting our own commodity price risk as far as possible.

Profitability ambitions

In 2024, we have focused on profitability more than ever. Our operating margin target of 8% was set based on the mix of business we had in 2017 and the depreciation and capital we reported then. That is no longer the case. As previously reported, we have much higher depreciation and equity if we value our assets at a fair operating value. When this is taken into account, we can conclude that in order to maintain the competitiveness and capacity that we have in our facilities, a higher level of return is needed. The Board of Directors has therefore decided to adjust the operating profit target to at least 14%. Our ambition is to achieve this target and take ProfilGruppen to the next level, and this requires continued streamlining of our processes as well as measures to increase prices and margins and expand our business. One concrete measure that has been taken is to change the organization to achieve increased focus in each business area. The parts are:

• Extrusions
• Components
• Contract Manufacturing
• Risk management

The aim is to better adapt and deliver the services the market demands, and to expand and clarify our offer. The organization will also lead to increased specialization of our competencies and clearer division of responsibilities. The change will link sales, production and logistics more effectively. The foundations of the change have been laid by appointing key managers; now we need to find the new ways of working. I had hoped that we would have come further with both organization and margin improvements when we ended the year. That said, the ambition is to put more focus on this in 2025.

Acquisition opportunity

Both the world and we are in constant motion. Currently, we are in the process of acquiring a high-profile business in Poland that would complement our current facilities and product range. The operations in Sweden and Poland could also act as each other’s back-up. It is a time-consuming, educational and exciting process. ProfilGruppen is uniquely placed to be able to rebuild this business and it would involve limited financial risk compared to other ways of acquiring similar capacity and capabilities. Poland is the fourth largest user of extruded aluminum profiles in Europe and the market is four times the size of Sweden. The business is also well placed to supply the large German market.

Since March, we have established a Polish subsidiary, which has entered into a lease agreement for the entire facility while the reconstruction process is ongoing. This means that we have started production and deliveries of aluminum profiles in Poland and employ about 80 people in this business. Cooperation between our Swedish and Polish companies has been initiated. Several of our customers and suppliers already do business in both countries.

The acquisition of the facilities is dependent on the completion of the reconstruction process. We do not control the progress of the process ourselves, but we are active and provide information when available. The lease will still allow us to employ a critical mass of skilled staff and get to know the business better.

I can say that we have one of the best offers on the market in terms of sustainability content, delivery service and quality. To this, we will add further services with the aim of solving even more of our customers’ concerns. It will be both fun and successful.

In March 2025

Mari Kadowaki, CEO