Division Communications offers products, systems and services in the areas of digital image transmission/technical security, access products and software. The division’s companies are active in Sweden, Denmark, Norway and Finland.
The division’s eight companies offer their solutions to the market based on being value-creating distributors and systems integrators. A growing portion of the division’s revenue is comprised of different forms of services.
MARKET
The division is a market leader in several areas, including video conferencing solutions in Sweden and CAD software in Denmark and Norway. The division also has a strong position in camera-based surveillance systems, health care security and other products for technical security, and in access products for telecom and broadband networks and data security.
Regardless of which business they are in, Lagercrantz has chosen a clear niche strategy for its companies, either with an aim at a certain type of customer, or in the form of product segmenting. In all cases the businesses are local, with deep customer and market knowledge.
2008/09 OPERATIONS
Net revenue amounted to MSEK 783 (790). The division’s digital image/technical security area saw a positive development. Revenue increased and earnings improved. COBS AB, the company acquired during the year, contributed to the positive development.
The access area continued to be strong contributor to the division’s result, although revenue as well as earnings declined from last year, particularly due to weaker demand for the division’s data security products. Revenue in Norway also declined due to weaker overall demand in satellite communication in shipping. Demand for niched IT products remained at a good level.
Revenue increased in the division’s software area. The company CAD Kompagniet acquired during the year was a contributor here.
The operating result amounted to MSEK 52 (51). This result includes items affecting comparability in the amount of MSEK 5 (0). Without theses costs, the operating margin increased to 7.3 percent (6.5).
STRATEGY AND BUSINESS DEVELOPMENT
In the access area the adaptation of the product line and the offer continued in the quest to find more distinct niches within which to operate.
The organisation in technical security was overhauled last year, which means that operations are focused on a small number of areas where the division already today has a strong position. Additional focus was placed on developing the after-market offer. This change has been a positive one and the business has been able to strengthen its market position, especially vis à vis the retail trade. COBS AB is a part of the division since September 2008. This company has a strong position in telephony and alarm solutions for health care and correctional institutions in the Nordic Region. The company’s exports showed a positive development during the year. At present the company is developing the next generation hand-held unit.
CAD Kompagniet is a part of the division since the beginning of the year. The division has thereby broadened its offer in CAD solutions to include consultancy.
The growing flow of information is a strong driving force which pushes investments in IT/telecom infrastructure. Video conferencing is becoming an increasingly appealing alternative to travel as companies are scaling back their travel budgets. Another driving force is the trend towards a more closely monitored society in the form of security and camera systems that are relatively unaffected by the state of the market.
In the access area the division focuses on niched products for telecom operators needed to build infrastructure. The area also includes niched IT products.
PROSPECTS
There are possibilities in several areas to strengthen the role in the supply chain, in part through in-house-developed concepts/solutions and in part through a growing proportion of services. This work, together with acquisitions, will be the most important factors for future growth in the division. In addition hereto, a broadening of the product line and increased sales of proprietary products are other ways for the division to strengthen its market position.
During the coming year the change work in the access business will continue.
Revenue by business type
Key figures
| Division Communications | 2008/09 | 2007/08 | 2006/07 |
|---|---|---|---|
| Net revenue, MSEK | 783 | 790 | 682 |
| Operating result, MSEK | 52 | 51 | 43 |
| Operating margin, % | 7.3 | 6.5 | 6.3 |
