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HANZA Navigates Economic Challenges with Strategic Acquisitions and Efficiency Enhancements

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Michael Chen

May 7, 2024 - 05:48 am

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HANZA Aims for Growth Amidst Economic Slowdown with Efficiency Enhancement and Strategic Acquisition

KISTA, SWEDEN, May 7, 2024 - Global manufacturing group HANZA has announced a proactive response to the current economic slowdown by implementing an efficiency enhancement program. Alongside these measures, the company has also completed a key acquisition, and is focusing on new sales strategies. This strategic approach is aimed at driving growth and improving profit margins. Consequently, the Board has elected to set higher financial targets for the group by 2025. Supported by a robust fiscal standing, HANZA is also uniquely positioned to pursue further acquisitions, promising a dynamic way forward despite economic headwinds.

Q1 2024 Financial Overview

The first quarter of 2024 has shown a promising uptick in net sales for HANZA, which have surged by 18% to reach SEK 1,253 million, up from SEK 1,065 million in the same period last year. However, when adjusted for acquisitions and currency fluctuations, there has been a net sales decline of 6%.

Operating profits have seen a decrease to SEK 67 million from SEK 88 million, representing an operating margin of 5.3%, down from the prior year's 8.3%. The integration and efficiency programs have had a one-time negative impact of SEK 20 million on the results. On the other hand, a revaluation of the remaining acquisition purchase price has positively affected the results by SEK 20 million. Additionally, the previous year's first quarter had benefitted from an energy subsidy which improved the outcome by SEK 6 million. Taking these factors into account along with the recent acquisitions, the adjusted comparable operating margin stands at 6.4%, compared to the previous year's 7.7%.

Post-tax profits have also experienced a downward trend with HANZA reporting SEK 34 million, equating to SEK 0.77 per share before dilution and SEK 0.77 after dilution. This represents a decline from SEK 59 million and earnings per share of SEK 1.49 and SEK 1.47 (before and after dilution respectively) in the first quarter of the previous year.

Cash flow from operating activities has come in at SEK 31 million, a substantial fall from the SEK 89 million recorded in the comparable quarter of last year.

CEO’s Insight on the Quarterly Report

HANZA's CEO, Erik Stenfors, shared his perspectives on the quarterly results and the company's roadmap ahead. The quarter began on a strong note with the strategic acquisition of Orbit One, an integral step in upgrading HANZA's offerings and expanding the group’s capabilities with novel competencies and a larger customer base.

Stenfors acknowledged the downturn in some sales volumes at the onset of 2024, which led to a negative impact on the company’s margins. However, he stated that HANZA did not delay in initiating a comprehensive efficiency program and intensifying its focus on sales activities, particularly emphasizing supply chain optimization offerings.

Expressing optimism, Stenfors highlighted that the integration of Orbit One was progressing well. He anticipates that the new sales initiatives, combined with the expanded customer base, will help accelerate the company's growth. Additionally, the efficiency program is expected to reinforce the margins over the current year. Stenfors further pointed out that HANZA's solid financial position would enable the company to explore and potentially execute additional value-generating acquisitions.

Contact and Communications

Those seeking additional information or comments regarding this report may reach out directly to CEO, Erik Stenfors, at +46 709 50 80 70 or through email at [email protected]. Furthermore, inquiries related to financial matters can be addressed to Lars Åkerblom, CFO, at +46 707 94 98 78 or [email protected].

This pivotal financial news has been distributed by Cision, a leading global provider of earned media management software and services to public relations and marketing communications professionals. The information can be accessed on their official website at Cision News.

Additional Resources

The company has disclosed further resources for shareholders, investors, and interested parties looking to get a deeper understanding of HANZA's financial performance in the first quarter of 2024. The resources available for download include the following:

These resources are instrumental in offering a comprehensive view of the company's strategic moves, financial health, and outlook, further enforcing transparency and data availability to all stakeholders.

Outlook and Forward Strategy

Under the leadership of CEO Erik Stenfors, HANZA is not only weathering the storm of an economic downturn but is forging ahead with a precise and calculated plan. The successful acquisition of Orbit One echoes the company's intent to expand its reach and capabilities. By simultaneously focusing on efficiency and new sales strategies, HANZA is setting itself up for a transformative and profitable year.

The efficiency program, though momentarily detrimental to earnings, is a strategic investment into the company's future operational excellence. As the integration of Orbit One continues seamlessly, synergies are expected to improve operational capabilities and financial performance. These measures, coupled with aggressive sales activities, assure stakeholders of heightened efforts towards maintaining HANZA’s market prominence and working towards a profitable future.

In an environment where many companies may resort to conservative measures, HANZA stands out by seeking growth through acquisitions despite economic uncertainties. These planned acquisitions, underpinned by the company's secure financial base, suggest that HANZA is taking a contrarian yet confident approach to business expansion.

The comprehensive efficiency program is not merely reactive but reflective of HANZA's foresight in anticipating market shifts and preparing the company accordingly. With this sturdy recalibration of operations, HANZA is expected to bolster profitability and shareholder value in the forthcoming periods.

Conclusion

In summing up the current state of affairs and the future course of HANZA, it is evident that the company eschews complacency. The strategic amalgamation of efficiency programs and the acquisition of Orbit One plays a pivotal role in sculpting a resilient and prosperous future for HANZA, especially during challenging economic times.

The first quarter of 2024 may not have delivered stellar financial results in comparison to the previous year. However, it sets a groundwork for the subsequent quarters, embracing a vision that is expected to yield positive outcomes. The company's pursuit of acquisitions hints at a future where HANZA not only maintains its position but also secures a stronger foothold within the manufacturing industry.

As the company looks forward, the refreshment of financial goals by HANZA's Board, emphasizing their commitment to growth and margin enhancement for 2025, instills a new sense of assurance. There is an unmistakable conviction that HANZA’s multifaceted strategy will steer the group towards elevated success.

In the face of an economic slowdown, HANZA's approach embodies resilience, strategic precision, and an unfaltering focus on long-term value creation. With eyes set firmly on the future, HANZA is charting a course to emerge not only unscathed but also as an industry beacon of growth and innovation.

Visit HANZA Group's website for detailed information on the company’s performance and strategy moving forward. With these expansive plans and meticulous fiscal strategies, HANZA is undeniably set on a path of growth and profitability, even amidst a challenging economic landscape.