AVK maintains momentum, continues growth, and achieves its best result so far. This is the result of the extensive strategic investments in recent years, combined with a decentralised organisation with a strong supply chain, which has outweighed the challenges of Covid-19. The continued growth is supported by an ambitious investment plan.
In the year in which AVK celebrated its 80th anniversary, turnover increased by 6.2% to DKK 6.4 billion, the operating profit increased by 36% to DKK 681 million, and the result after taxes increased by 61.7% to DKK 468 million.
”It is a good result, not least because we now see the effect of our strategy. Through the past many years, we have carried out extensive investments in product development, optimisation of processes and production, as well as presence as close to the local markets as possible. We are also pleased to observe a generally very positive development in the Danish AVK-companies”, says Niels Aage Kjær, CEO of AVK.
Covid-19 has presented challenges to the AVK Group, but we have succeeded in keeping our supply chain intact and the production up and running throughout the entire period.
“This is thanks to the great efforts of our dedicated employees. Another critical prerequisite is the decentralised structure of the Group with a great local decision-making capacity which, across the +100 operational companies in 37 countries, ensures the necessary collaboration with a global supply chain. This has enabled us to maintain supply to critical infrastructure like water supply, wastewater handling, and energy supply which form a large part of the Group’s customers”, Niels Aage Kjær points out.
An ambitious investment plan to ensure continued growth
It is the ambition of the AVK Group to ensure continued growth, and this is supported by an ambitious investment plan. In the latest financial year, the AVK Group invested more than DKK 250 million in fixed assets, including the expansion and optimisation of several Danish production facilities. At the same time, the total number of employees in the Group has increased by 200 people to 4,575, of which 740 are employed in Denmark.
”In the current financial year, we support the continued growth through a significantly increased investment plan”, CFO of AVK Holding, Lars Kudsk, informs.
Investments of DKK 140 million in Denmark
The investments are made with a focus on intelligent solutions for the water industry (Smart Water), and AVK also continues to invest internationally in efficiency improvements and automation of operations, in strengthening the market position through acquisitions and ongoing improvements and optimisation of products and solutions for our customers. In addition, the green transition is playing an increasingly important role in the AVK Group’s investments.
”The investment plan favours a number of the Danish companies as we apply a combined level of investments of DKK 140 million to expand production at AVK Gummi in Låsby, AVK International in Skovby, Flonidan in Horsens, AVK Tooling in Sæby, as well as a new domicile for Randers Jernstøberi”, adds Lars Kudsk.
Sustainability in focus
AVK contributes with sustainable solutions within the three business areas AVK Water, AVK Advanced Manufacturing and AVK Industrial, and sustainability is favoured in both the application of the products as well as in the production.
”Our products contribute to climate goals all over the world because our products help to reduce CO2 emissions through reduced water loss and subsequently reduced amount of energy consumption”, says Niels Aage Kjær.
”At the same time, we favour the environment as a large part of our production is based on recyclable raw materials. As an example, between 80 and 90% of the cast iron used in the Group, is based on recycling, and in our production of plastic products the share is even higher. Specifically, we process around 25,000 tonnes of recycled plastics for various sustainable and recyclable products, such as waste containers, pallets, and street covers.”
”In addition to this, as part of the current investment programme, the AVK Group has initiated the establishment of solar panels on various factory buildings. We started out with AVK Gummi in Låsby and are launching a new project at AVK International in Skovby at the beginning of 2022, and we have various projects in our pipeline. Our goal is that a significant amount of the AVK Group’s energy consumption should be covered by green energy”, Niels Aage Kjær informs.
Freight costs put a strain on earnings
”The world’s water and wastewater challenges are large, and the attention to both problems and possible solutions is increasing, through activities like international climate conferences or presently through the new Danish export strategy for the water industry. That strengthens our business platform both short- and long-term”, states Niels Aage Kjær who adds that it is the expectation of the AVK Group that the turnover will increase by 5-7% in the year 2021-2022 compared to the year before.
“As a consequence of higher raw material costs and the drastically increased freight prices, the increased turnover will not impact the earnings. Therefore, we expect a result at the same level as the previous financial year.”
Facts about the AVK Group:
- AVK is a global company with three main business areas:
- AVK Water is the main activity of the Group with development, production, and sale of valves, hydrants, and accessories to water and gas supply, wastewater treatment, and fire protection.
- AVK Industrial holds strong niche positions within valve solutions for industrial water treatment which covers the energy, marine, oil, and paper industry.
- AVK Advanced Manufacturing manufactures components of rubber, plastics, and metal which are used for AVK’s own products as well as for customers within water supply, health, energy, and food industries.
- AVK comprises 105 operational companies and six associated companies that operate in more than 37 countries.
- AVK employs 4,575 people, 740 of which are employed in Denmark.