Market position strengthened
The Construction division again generated good sales growth. Amid a supportive market environment, it widened its share of the market thanks to the success of its innovative products, systems and services. Trends towards more safety, energy efficiency, aesthetics and individualization are key innovation triggers for the Construction division.
Success regionally anchored
The positive results reported by the Construction division were broadly based in terms of regions and product groups, with major successes achieved in both North America and Europe. The concentration of screw production and custom assembly in Europe has been largely completed, this will bring economies of scale and a stronger focus in the future. In North America, market entry of substructures for high-quality facades has been successful.
Interest in HECO unleashed growth and synergy potential
In August of 2015, HECO and SFS established a close strategic alliance. SFS acquired a minority interest of 30% in HECO as part of this alliance and subsequently increased this interest to 51% as of July 2018. Both companies are active in the structural timber work market and have built strong reputations for quality and innovation. By combining their largely complementary product portfolios, the two partners can offer customers a wider range of products and services. This broad market coverage is provided by two distribution channels: the wholesale channel for the HECO brand and the direct sales channel for the SFS brand. Merger of the production of wood screws leads to great synergies. Thanks to the increase in SFS’ stake to 51%, the growth and synergy potential, as well as the core competencies of each partner, are now exploited even more effectively.
Declining demand from Turkey
The difficult economic environment in Turkey has had an impact on SFS’ sales site in the country, with local demand from Turkish customers declining. The freed-up production capacities have since been used increasingly for products for export to SFS companies, which has compensated for the decline in domestic demand.
Positive development expected
The outlook for 2019 is cautiously positive. The division expects positive sales growth amid a stable market environment.