World trade growth remains weak on account of trade conflicts, the economic situation and the structural changes taking place in sectors such as the automotive industry. The corona virus is also beginning to leave its mark on the world economy. At present, a larger and uncontrolled spread of the corona virus occurs even in other regions outside China. This will lead to increased global uncertainty, resulting in reduced world trade. KWH Group has already taken measures to ensure the health and safety of employees, while other measures are being taken to reduce disruptions in operations.
Growth in Finland is continuing to fall in 2020. In addition, this year’s pay negotiations have led to strikes, with the resulting negative impact on the Finnish economy and its businesses. The spread of the coronavirus and possible quarantine measures will also lead to a sharp decline in growth in the Finnish economy.
We set some challenging growth targets ahead of 2019. Considering the development of the world economy during the year, we can be satisfied to have achieved growth of 2%. The low growth led to lower profit than in 2018. We are now carefully following developments on our markets to make adjustments if the rate of growth slows any further.
Investments during the year were a record EUR 135 million (of which EUR 34 million is caused by IFRS16). 2019 was a year in which we grasped many new business opportunities and built the foundation for good growth in the years to come. As some of the investments will be completed in 2020, this year’s investments will also be high. Despite these major investments, we are financially strong.
Adaptations to changes in the business environment
The KWH Group reached the respectable age of 90 in August, which we celebrated with our anniversary book “KWH 90 years – The Constant Change”. The book describes the secret behind KWH’s success, for example, its ability to adapt to changes in the business environment and plan in the long term.
We should continue to adapt to changes in the business environment today. We anticipate major waves of changes as a result of digitalization and commercial and technical developments. Digitalization creates opportunities for new business models, working methods, collaboration opportunities and solutions for us and our partners. Consequently, we will continue to focus on various digital solutions to meet our customers’ needs.
An internationally successful family company
We want to create growth, stability and confidence in the future in our business with the aim of being an internationally successful family company. Our core values are based on very close collaboration with our customers to create innovative new solutions with them. We conduct our business in an economically, environmentally and socially responsible, long-term, sustainable manner.
The success of the KWH Group is based on our committed employees. We therefore want to offer a sustainable, attractive workplace where our employees feel that they can make a contribution and develop based on our business principles and our core values.
During the past year, we increased the resources for the HR departments in all our business groups. We will also continue to invest in our employees’ skills by offering a range of further training opportunities. Our organisation continues to grow, and the number of employees increased by 168 on average during the year. At the year-end, KWH had 2,383 employees.
The continued spread of the corona virus will have far-reaching consequences for world trade. Therefore, we expect a more uncertain market situation and profitability development in 2020.
Kjell Antus, Group president