10 / 56
CEO LETTER
Brunvoll in the world
We live in a time of big changes and rapid restructuring pace.
The fall in the oil price in 2015 and into 2016 has affected the
entire Norwegian business community and will most likely
continue to affect us for years to come. The digitalization
of the goods and services is leading to new and disruptive
product solutions and business models, which will affect
all sectors and all markets. For the first time in history we
also have a global climate agreement in place, which sends
clear signals to the business community and investors that
realignment to the Low Emission Society starts now. In this
landscape, Brunvoll will continue to orient itself to take a
significant market position. This gives us both opportunities
and challenges and demands that we are well informed,
willing to adapt and flexible.
So far Brunvoll has managed relatively well in the most
difficult market situation to occur in decades. We have solid
market positions in several segments of shipping which are not
negatively affected by low oil prices. We are also experiencing
constantly high activity in the After-Sales service market.
We still have a revenue decline of about 7 % from 2014 to 2015,
mainly caused by the offshore segment (Offshore Support
Vessels). This segment has given us relatively large projects
whereas the projects from other segments in the industry will
not result in the same sales volume in the short term. However,
with dedicated efforts to reduce costs, we have marginally
increased the profit margin to 8.4 % (EBIT) in spite of revenue
decline. In 2015, we generated a cash flow of MNOK 66 from
operating activities, and we have a good liquidity situation.
Adaptation to a market with lower revenue through 2015 has
made it necessary to reduce the cost level in order to ensure
our competitiveness. This work has continued into 2016, where
it also has been necessary to reduce staffing by 20 positions,
in addition to natural attrition. This restructuring process has
taken place in close dialogue with the employee representatives.
Strategic guidelines
In our revised strategy plan, we have provided guidelines for
the coming years. The guidelines are all primarily pointed out,
because they will strengthen the company through the difficult
market conditions, either by contributing to reduce costs,
increase productivity, enhance market position or generate
new revenue. The reduction in costs and staffing that are being
conducted will ensure that we still maintain our strategic
guidelines, including increased investment in innovation of
product and sales concepts. It will work in parallel with several
major product development projects to be launched in 2016 and
2017. Brunvoll is also conducting several major research projects
with external research institutes, several with funding support
from the Research Council of Norway (NFR).
The Strategy Plan enforces the positioning of Brunvoll in a
changing market with high restructuring pace. We see the
opportunities associated with the further automation of
processes, new product solutions and services, increased use of
robotic solutions and sensory science. This is often referred to
as “the fourth industrial revolution”, Industrie 4.0 or “Industrial
Internet.” Brunvoll has made significant investments in this
area over the last few years, and is well positioned to take
further steps in this direction. But we have to be very assiduous,
because many industrialized nations and individual businesses
are working with large development programs within the
same theme. The strategy also reflects room for opportunity
for Brunvoll related to global climate goals, resource shortages
and so-called green growth. We see that a sustainable world
also needs our products and we will, through significant R&D
efforts and large innovation projects, continuously improve our
products and processes, to ensure that we are competitive in the
Low Emissions Society.
New management system
A large project through 2015 and into 2016 has been building
up a new and integrated management system with governing
documents of quality, safety and external environment and
in Spring 2016 certification acc. ISO 9001, ISO 14001 and
OHSAS 18001. It is a main point that the management system
shall be readily accessible, user-friendly, process-based and
educational. The management system is therefore embedded to
our net based social interaction tool and it is extensively used in
flowcharts of process descriptions.
10
Annual Report 2015