Systems grew rapidly in 2007 and captured market shares in several important markets. We shall continue to grow with good profitability during 2008, which is possible, thanks to a customer offering that is gradually being improved in terms of content and alignment. Our new brand Niscayah will contribute to making the Company and our services more distinctive, both internally and towards the customers.
The change of name and the building of a new brand are natural steps in the journey we began in 2006 with the stock exchange listing. From earlier having partly used a range of brands in different countries we will be able to present a united company through the new common Niscayah brand. Our new brand will be an important tool in the task of consolidating our position as a leading security partner.
The development 2007
Last year was our first full fiscal year as an independent listed company. Sales increased by 14 percent, of which a total of 11 percent was organic. This is the strongest growth we have displayed, both prior to and subsequent to the listing of the company. Consequently, we have grown significantly faster than the market and thereby gained market share.
The growth is the result of hard work within the entire Group and I would like to thank all employees in our 17 countries for their exceptionally good efforts during 2007. The US/UK/Ireland segment displayed a somewhat weaker development than Mainland Europe. In particular, the margin has been unsatisfactory. Business operations in the UK have had too much emphasis on the banking sector, which we have altered during 2007. The customer base is now broader compared to just one year ago. Last year’s weak margin in the US was mainly due to an extensive focus on implementation. Therefore, work was intensified during the year on significantly increasing the share of systems management and systems operations in our offering.
The organic growth was most important during 2007 notwithstanding the completion of several strategic acquisitions. Our market is fragmented, which means that there are plenty of acquisition opportunities. As we have developed a successful organic growth model, we are very selective in our corporate acquisitions. Potential acquisitions shall be concentrated on companies where the operations possess high technical expertise, focused on specific customer segments.
The influence of market conditions
The current uncertainty about how the world economy and the financial markets will develop going forward has not adversely affected our business opportunities to date. The customers are continuing to invest in security solutions. During an economic downturn it is natural that companies and organizations implement cost savings to a greater extent. As far as security is concerned, we remain at the cutting edge by continually improving our offering and reducing the customer’s costs. Being a security partner involves supplying the right security solution at an attractive price. Among other things, it can include allowing technology to manage what guards or other personnel are doing today or outsourcing operation and supervision of the security system to our security center. An economic downturn is therefore not objectionable for our business. Today, we are a flexible organization that can be adapted to both market conditions as well as market trends.
The future
During 2008, we shall make our service offering more distinctive for our customers. Even today, this is what distinguishes the company from other players on the market. The service offering is what determines our short-term and long-term profitability and development. We are going to strengthen our service organization and our offering on all markets. Through new and better packaged offerings, the objective is to attain a better balance between project implementation and after-sales services. This approach offers many benefits, including enhanced security for the customer.
As a product-independent player on the security market, we are continuing to revitalize and develop the industry. This is based on a well balanced offering covering the complete needs of the customer, from analysis and design to systems operations. We expect to achieve more than 10 percent total growth with maintained margins during 2008.
Niscayah, a strong and leading security partner
Through a distinctive identity, we will become more visible on a fragmented market. When we now change our name to Niscayah we will become a united, distinctive and strong company. It is good for our customers, who will find it easier to distinguish us from the other players on the market as a security partner with a strong and distinctive international offering. It is good for the employees, who now will gain a clearer identity to unite around. The result will be a strong market offering to both existing as well as new customers.
We are encountering tough competition on all markets, but few other companies are similar to us. Niscayah offers a complete solution in accordance with the customer’s identified needs for efficient security systems. It is the international presence combined with independence that makes Niscayah unique, and the new name makes the independence even more evident.
When we now enter 2008 as Niscayah, I have a strong confidence in our capability of taking market share and thereby becoming a strong player, driving the consolidation of the technical security market.
Juan Vallejo
CEO and President