Year-End Report 2017

Comments from CEO Johan Hjertonsson:

• Overall we are pleased with the performance of the Group and the results for 2017, the year has set new records.
• I am very proud of the hard work taking place in all of our businesses, work that is focussed on customers, their needs and providing a high level service at every customer ‘touch-point’.
• It is a great achievement that for the first year in its history the Group passes 5 BSEK of net sales whilst continuing to increase the operating margin.
• We see market activity in most of our business areas remaining positive, despite some mixed regional fourth quarter performances with again, the market activity in some smaller regions continues to be mixed, but generally a more positive mix than reported last quarter.
• In the Nordics and the UK we continue to grow and operate at a high level where the market activity is best described as flat for the last quarter with continued currency headwinds in the UK. With the exception of the UK, currency has had little overall effect on net sales, but the weaker GBP has had a 59 MSEK negative impact on net sales in the year.
• Cash generation remains good, a cash conversion ratio of 1.0 which will continue to fund revenue investment in growth, hence our new city strategy offices in Paris and Barcelona as well as increased R&D, especially in connectivity and sales and marketing resources. We will initiate our third city later this year.
• We again estimate that the level of the global LED luminaire installed basis is less than 10-12% and for the fourth quarter the Group’s LED share of net sales was in excess of 93%, so the opportunity remains strong.