Key financial figures for 2021/2022
Main activities
The AVK Group is divided into three main business units: AVK Water, AVK Industrial and AVK Advanced Manufacturing. AVK Water is serving the markets of water and gas supply, sewage, and fire protection with an extensive product range of valves, hydrants, and accessories. AVK Industrial is built upon companies with strong niche positions with valve solution into industrial water treatment in segments as power generation, oil & gas, the marine sector, pulp and paper, mining, the chemical industry, and air separation. Flonidan, a leading producer of smart gas meters, is part of AVK Industrial as well. Advanced Manufacturing comprises companies supplying rubber, plastic, and metal components to both companies within the AVK Group and external customers in various industries including food, transport, and wind energy.
Production and sales take place via the AVK Group’s network of more than 100 companies in 37 countries across Europe, the Middle East, North and South America, Australia, Asia, and Africa.
Development of key financial figures
The sales amounted to DKK 7,6 billion in 2021/22, which is a growth of 18% from the previous year. Sales growth was achieved across all three business units and in most markets. The high activity level continued in the mature markets, and many emerging markets were again able to initiate projects after covid-19 and for oil producing countries also with a positive impact from the higher oil price.
During the year, AVK has acquired the UK company, Atlantic Plastics, which produces and sells a product package of meter boxes and push fit fittings in plastics as well as house connections in gun metal, which are mostly sold in the UK market, but also for export. Atlantic Plastics is now part of AVK Water and will add to the already wide product range and open up further possibility for sales across AVK.
The operating profit amounted to DKK 736 million, which is an 8% increase from the profit of 2020/21. The operating margin decreased to 9,7% from 10.6% the year before due to the strong increase in material, freight, and energy costs as well as shortages in the supply chain. However, AVK’s decentral structure enables the Group to act fast and a strong supply chain has helped AVK maintain a high delivery performance to customers and supported the positive sales development.
The investments in fixed assets reached the highest level ever for the Group and amounted to DKK 353 million with further expansion and optimisation of the production capacity in more countries, product development as well as extension and roll-out of the Group’s IT platform and digital solutions.
Expected AVK Group development
AVK will continue to focus on growing our business within all three business units. Overall, the turnover is expected to develop positively with 5 to 8% growth rates mostly due to inflation, as we expect a negative impact from the general economy on the AVK Group’s markets for the coming year. AVK will continue to invest in both new market development, products and operational improvements, and a high level of investment is again expected, which will help the Group to gain further market shares and support positive sales development. The profit is expected to develop positively with the growth in sales.
AVK supports the UN Sustainable Development Goals, and we have special focus on the goal related to clean water and sanitation (SDG 6). A reduction of CO2-emission and sustainable solutions are getting more and more attention on the political agenda all over the world, and AVK is fully conscious of its responsibility and possible contributions. AVK’s products already contribute greatly to a lower CO2 footprint through reduction of water loss (less energy consumed) and recycling of materials for both the metal and plastics products of the Group. The increased attention to sustainability is considered a growth factor for the Group.
In AVK Water, the strong need of improving the water supply network and wastewater treatment to fulfil the ambition of clean water and sanitation for all people in the world secures the AVK Group a strong platform for continuous growth. Smart products, that allow for better management and control of the water supply, will play a growing role in the product and service offer that reduces the leakage of water and the related energy consumption.
AVK Industrial is expanding into more markets with a strong combined product offer including products used for systems to clean polluted air.
AVK Manufacturing is growing in supplying components for the wind energy sector and in plastic products based on recycled materials, which includes pallets as well as service boxes for valves and hydrants.
We maintain the long-term ambition of an annual growth rate of 10%, which includes acquisitions contributing both with new market opportunities and expanding the product range of the Group.
The roll-out and implementation of Lean tools to improve customer service and optimise operations continue across the AVK Group and most operational companies are now benefitting from these tools.
Digital solutions will have an increasing significance on the Group´s interaction with and service to customers, and in addition contribute to the optimisation of the Group´s supply chain and internal processes.
Overall, a positive development is expected for the Group in the coming year.
