Lars Hellberg

Summer Greetings

Dear customers, business partners and the Fortaco team,

The first half of 2021 has been an extraordinary busy time period. Our order intake is record high, and we can still see +50% growth in order intake, which will contribute to record high turnover in 2021. We are planning our activities around Fortaco Go Green by scrutinizing in-house sustainability strategy and related actions. We are listening to customers and the market, in regard to e-mobility, and fossil free steel of the future. We are digitalizing our operations to make them more simple and more efficient.

We still experience the Corona pandemic around us. Fortaco has managed the situation fairly good, our teams at factories have managed to secure operations with limited impacts. I appreciate the open and constructive dialogue with customers.

Endless commitment to safety

I am very pleased to see our employee’s endless commitment on safety. As we know, initially safety is to secure right equipment, however, the most important is the individual behavior and endless commitment: stop - think – act, on a continuous basis. We have moved from having several incidents per month to having several months without incident. This proves it is indeed possible to run with zero incidents in Fortaco Group. We have launched a Safety Handbook to present our safety strategy, as a reminder to all of us. The devil is in the details, we all know, an injury can happen in any minute - let us stay safe.

Master of Flexibility – critical success factor

Master of Flexibility (MoF) is a key strategic cornerstone for our success. We expect MoF to be a critical success factor for Fortaco for many years to come, because the possibilities for improvement are endless, and our customers’ requirements continuously change. Together with customers, we have reduced lead-time from several weeks to several days. We have also launched a Master of Flexibility Handbook, and our plan is to run an intensive in-house training in the second half of 2021.

Business Site Gruza in Serbia

Fortaco acquired a new Business Site in Serbia, which has been integrated with respect, simplicity and speed. New Business Site provides Fortaco and its’ customers with new capacity within steel fabrication and assembly business. As our key capabilities, we are currently manufacturing high-tech large winches. Our focus is to identify customers within Fortaco’s large customer portfolio, and generate additional business in a coming time period.

Have a great summer season

It is time for holidays. The first half has been hectic and excited, and the outlook for the second half is showing even more growth for many products and customers.

I would like to thank all of you for the strong commitment – together we will ‘Make Tomorrow Safer and Better’. Enjoy the summer with your nearest and friends. Stay safe, we will have a strong market ahead of us and orders going forward.

With best personal regards,

Lars Hellberg
President & CEO


Safety

Safety record at Fortaco - Business Site Sastamala achieved 1000 days

A new safety record has been achieved at Business Site Sastamala, 1000 days without a lost time injury. The last accident, with the lost time from work, happened in October 2018. Since then, a lot of things has been changed.

Several improvements and development ideas have been executed to achieve 1000 days without injuries. One important change has been to start using a safety observation tool. All workers have a possibility to report unsafe condition. The safety tool alone, does not impact on safety culture, but it has been enabling discussions around safety, and turned attention to small details, which can be done in a safer way. By this, the already existing commitment towards safety has been further improved and become even stronger on each level of organization.

Also, another impressive safety record has been achieved in Sastamala beginning of June, the Load & Hauling Assembly Department has been working for more than 3000 days without any lost time injury.

Great and impressive – congratulations to the team!


One thing in the world is certain – the summer season is here!

The last 18 months have represented lots of unpredictable happenings, both in the world and in business. The Covid-19 pandemic, as we all know, has been and still is a black swan, which came as an unwanted surprise and changed the world and the way we all live, interact, and do business.

Fortaco and our industry, amongst many others, was negatively impacted in 2020. With fast actions in the spring 2020 and onwards, the Fortaco team made a quick recovery securing the safety of our employees and deliveries in the difficult environment with a successful outcome. For more insights concerning year 2020, check out our Annual Report, which can be ordered from our web-page www.fortacogroup.com.

From decline to a clear growth trajectory

Subsequently in 2021, and despite the Covid-19 pandemic still present, the overall business outlook has changed, perhaps a bit surprisingly, from decline to a clear growth trajectory, which is further strengthened by ramping up additional business awards granted to us by our valued customers. Depending on the industry, the current level of demand is everything from high to low, and the constrained supply market, availability of people, and Covid-19 restrictions are adding a special flavor to the situation.

The ability to cope with uncertainties is one of the factors differentiating high quality companies from the rest. Our approach is “Master of Flexibility”, the Fortaco way of coping with volatility, enabling us and our stakeholders to be successful in different market environments. It entails an extensive focus on safety, delivery, and quality, added by a high level of flexibility, to address the changing needs. And all this in a collaborative spirit with our customers and supply chain.

We have set our bar higher

As a proof of our concept, our year to date delivery accuracy is >95% (note, measured strictly according to the first promise!) and lost time injury frequency is 2.0. Both already represent a solid performance, but we have set our bar higher. We aim for nothing less than 100% delivery accuracy. In terms of safety, our professional approach can be found from our fresh Safety Handbook. Our motto is clear: Go for Zero.

Green and sustainable future

During H1/2021 we have also been working with defining our approach on sustainability. We have several on-going initiatives addressing the global need to find new solutions, contributing positively to the greener and more sustainable future. We believe we have a good position to address the need to decarbonize the industry together with our customers. More info to come later on.

Second half of 2021 pointing towards more growth

As said, the marketplace is currently busy, and the demand outlook for H2/2021 is pointing towards more growth. Our May 2021 year to date financial performance shows further improvement towards our long-term target of delivering 7% EBITA over the cycles. At the same time, several factors, such as supply chain bottlenecks, increasing raw material costs, and people availability are causing issues to all companies in the industry. We need to continue addressing these issues as professionals, and we feel we are on the right track to secure the needed operational and financial performance in 2021.

I would like to thank our customers, suppliers, and the Fortaco-team of professionals. Have a great summer season – stay safe!

Kimmo Raunio
Senior Vice President & CFO