STRONG CONCLUSION TO THE YEAR
CEO JAN WAHLSTRÖM COMMENTS ON Q4
Profitability growth and strong liquidity sum up the fourth quarter. Despite the ongoing pandemic, we posted a higher operating profit (12.2 percent) compared with the fourth quarter of last year (8.9 percent), which is something hardly anyone had dared hope for last spring and of course a great source of pride for us. The benefits of operating across several continents and in several business areas have become yet more apparent as the pandemic has paralyzed the world.
Since the third quarter, all sites of the Group have returned to full staffing. Regional aid has gradually decreased as our production has resumed and in the fourth quarter we received a total of SEK 1 million in government support. Covid-19 continues to affect the world at large as well as our organization, but the few cases of illness we have had among our employees have been handled well and have not had a noticeable impact on the business.
The recovery since the spring has been much swifter than expected. We went from a contraction in local currency terms of 36.2 percent in the second quarter to growth of 2.7 percent in local currency terms in the fourth quarter. This quick recovery would not have been possible without the government support we have received. This support enabled us to retain all our staff during the downturn and rapidly return to normal operation as demand picked up again.
The strong recovery was primarily due to Dental, which saw positive growth in both contract manufacturing and proprietary products. From a total standstill in the second quarter, we achieved growth of 15 percent in the fourth quarter and massive 49 percent growth in proprietary products, which are fantastic figures.
In Orthopedics, where the contraction was less pronounced than in Dental, we have not seen quite the same rapid recovery, due to a combination of currency effects and the impact of the pandemic. In local currency, sales were on a par with the same period last year. We are extremely pleased with the deals we have won in robotic-assisted surgery. This puts us in a strong position for 2021, and our emphasis is now on recruiting more employees to our Memphis site.
Life Science has continued to perform as previously, both in terms of sales and profitability. The business area continues to see larger fluctuations in deliveries to customers than Dental and Orthopedics. Despite the high level of concern globally, our customers are making positive investments for the future. The expansion of our site in Skara continues as planned with completion scheduled for early summer. The purpose of the expansion is to enable us to continue to grow with our partners and future-proof our polymer business. We are currently constructing a cleanroom throughout the entire new production hall - a decision that has already resulted in a couple of new deals.
Our profitability is strong, largely due to a continued restrictive approach to costs. Thanks to this strict cost awareness - a hallmark of our organization - our cost level is down on last year. This puts us in a strong position to invest for future growth. During the quarter, we invested in a number of machines in both Memphis and Tianjin.
Net sales for the full year amounted to SEK 580 million, with an operating profit of SEK 63.6 million. The result was on a par with the year before. But 2020 will mainly be remembered as a year in which major changes took place in the world, in the economy and in human behavior. It was a year in which everything we previously considered normal and obvious was turned on its head. Our proactive and agile attitude enabled us to counter the effects of the pandemic effectively. This was possible thanks to our fantastic employees. A big thank you to our entire global team. I am extremely proud of you. Now we continue to build on our business!
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