Annual Report 2022
STRONG ORDER INTAKE
STRONG ORDER INTAKE
Fortaco’s customers maintained a strong order intake. Our organic net sales are up 100% compared to 2020.
“We have a solid track record of high flexibility during the abnormal years.”
Fortaco is the leading brand-independent strategic partner to the heavy off-highway equipment- and marine industries. We offer technology, vehicle cabins, steel fabrications, and assemblies. We serve customers across a variety of industrial sectors, like agriculture, construction, container handling, deck machinery, defense, forestry, marine, material handling, mining, recycling, and other industries.
2022 was a year with many critical moments. The Ukrainian situation caused a severe impact on the Ukrainian society, availability of steel material, and rental employees with specific skills like welders. We experienced record high steel prices in a time frame of six to nine months. Energy availability and extreme inflation drove abnormal cost increases. The availability of labor and salary cost increases exceeded recent historical adjustments. The cost of capital and many other extraordinary changes caused unexpected difficulties.
Fortaco’s customers maintained a strong order intake: our organic net sales are up 100 per cent compared to 2020. Together with our customers we negotiated to transfer cost increases to customers’ products.
One Equity Partners, the new owner of Fortaco empowers the further development of the company, the current and new offerings of Fortaco, and the areas which strengthen value creation for customers. Also, they provide the means for further international expansion. Today, Fortaco has a stronger position as a reliable partner for the future, and profitable growth initiatives.
“We carefully listen to our customers, addressing their current and future needs.”
Fortaco celebrated its 10th anniversary on the first of January 2023. Time flies, and we are all very pleased to have been part of the journey that created the company we have today. Fortaco is the leading strategic partner in Europe providing premium, wide-spanning, and competitive offerings. We have a large portfolio of global customers in a variety of industry segments. We strive for premium performance in safety and quality, and deliveries executed as promised. We have a solid track record of high flexibility during the abnormal years of the Covid and Ukraine situation. We know the market and we have long-standing relations and contracts with our customers. We have high-performing leaders and people.
Investments continue. We are focusing on growth-, automation-, and digitalization- related investments. Fortaco continuously invests in robotizing its welding processes further, including robotized grinding process of vehicle cabins. We have installed high technology CNC machining centers at several of our factories. We will expand our operations in Holic with 4,000 square meters of floorspace, including a high level of robotization, which will allow us to double the business site’s net sales in the coming years. We have acquired a paintshop, located next to our Business Site Janow Lubelski, which delivers high-quality painting operations. Our digitalization team develops real-time applications in-house which are used by business sites to secure the fact-based, rapid, and real-time reporting of different process steps. We have a major ERP upgrade program ongoing to convert our current four different ERP systems into the future SAP S4 HANA across all our business units. This project is a must to speed up availability of fact-based information and the further simplification of daily decisions.
Fortaco completed the transaction to acquire a minority share in the Buisard cabin company. Together we created a successful business as Fortaco Buisard Cabins. Business growth was visible immediately. We also strengthened our market presence, and today we are one of the largest vehicle cabin operators.
“Fortaco strives to strengtheng our offerings and evidencing our premium professionalism.”
Trust in Tomorrow. Fortaco strives to make tomorrow safer and better by further strengthening our offerings and evidencing our premium professionalism. We develop our employees and leaders. We run an employer branding program to increase Fortaco’s attractiveness as a choice for future employees and current team members at Fortaco.
The year 2022 started with a high order intake and deliveries continuing throughout the year. The run-rate of deliveries was at a record high level of over 400 million euros (including Buisard). The growth was an all-time high, and annual net sales also at a record high of 330 million euros (excluding Buisard). Profitability reached an EBITA of 13 million euros. The Fortaco team was awarded new business which will be implemented in 2023.
Fortaco Zero Emission Solutions. Fortaco is active in green environmental transformation. Together with key customers and business partners we are developing solutions to reduce global warming by 1.5 degrees. The Fortaco Zero Emission Solutions unit has been created to highlight the strategic direction and future business offerings. The four main areas are: fossil-free steel applications, lightweight structures, circular economy, and E-mobility.
Fortaco actively runs a program named Go West. The plan is to follow the world economy, re-structuring from a global- to a regional manufacturing footprint. We believe the US is the right market for Fortaco’s business portfolio. We have a team assigned to understand customer strategies and needs, determine the best location, and suggest what kind of manufacturing capabilities will be offered.
Market volatility is always part of business cycles, and we continuously monitor the outlook and market environment toget- her with our customers. We continue to develop our capabilities regarding the Master of Flexibility program. 2022 was another year of extreme volatility on an everyday basis. Material availability was critical to manage, to ensure 95 to 97 per cent delivery accuracy. We experienced issues primarily related to the shortage of electronics and cabin-interior supplies. We see a healthy horizon, and the future looks promising with a clear growth outlook that is based on customer orders and forecasts. We actively monitor the end-market development and are prepared for capacity and cost reduction actions, if needed.
“The plan is to follow the world economy, re-structuring from a global to a regional manufacturing footprint.”
Fortaco’s plan is to continue its successful journey and expand offering through additional value-adding activities and an enlarged footprint. We carefully listen to our customers, addressing their current and future needs. We continue to develop our financial robustness and minimize our exposure to risk.
I would like to thank our customers and business partners for their continued trust. The year 2022 was another exciting year for Fortaco with record high net sales, while exposed to global, high inflation. Also, I would like to thank our employees for their dedication on the path to achieving our common goals.
Lars Hellberg
President & CEO
