Efforts in recent years to find a solution to the particulate filter business Notox ended with a sale in 2016. Through the credit agreement with the Group’s bankers in March 2017, which is in force until April 2020, and the continuous reduction of net interest-bearing debt a more stable financial foundation for the Company has been established.
Therefore, the operating and growth-oriented initiatives, which are based on the Company’s two business areas, were given higher priority in 2017.
The most important general strategic focus areas are:
As part of the strategic efforts, the SBS Group Management focuses on market expansions as a central growth stimulating parameter. Therefore, both divisions focus their efforts on expansion based on a development of the product range and geographic spread.
The divisions focus on widening the product range through new product groups and on deepening the product range through an increased number of references and variances within the established product groups.
In 2017, SBS Automotive has in particular focused on entirely new product concepts within the steering part group and on new specialised product types within established product groups such as e.g. brake discs.
In the year under review, SBS Friction introduced brake discs and a small group of accessories allowing the division to present a far wider and more attractive brake parts product range, which is marketed under the SBS trademark.
Geographically, SBS Automotive’s central point is Central Europe and Scandinavia. In recent years, the geographical platform was expanded successively building up the markets in Eastern Europe in particular in Poland and Russia. In 2017, NK distribution agreements were established in the UK and in Poland just as the division is working on penetrating the markets in the “outskirts” of Europe - first of all the Middle East.
As is the case with the sister division, SBS Friction’s geographical central point is in Europe, where the market share is considerable. Moreover, SBS Friction is represented in several overseas markets. Strategic focus is on further growth outside Europe, not least in the US as this is the world’s largest market for motorcycle parts.
DEBT REDUCTION AND RE-ESTABLISHMENT OF EQUITY
The primary strategic focus of the Board of Directors and the Executive Board is to ensure a long-term, sustainable, financial basis for the Group.
Despite the business solution regarding Notox, the SBS Group bears a heavy debt burden caused by the investment in this business area.
Therefore, debt reduction and re-establishment of equity are essential to Management’s strategic work.
In 2017, net-interest bearing debt was reduced by approx. 10%, whereas SBS Group equity improved correspondingly. In 2018 and ahead, these areas will remain focal points so that the Parent Company’s equity can be re-established within a foreseeable time horizon.
New digitalised business models and platforms bring new perspectives, but also challenges.
Be it production, logistics, marketing or branding, the utilisation of the digital opportunities is a central, strategic key action area.
The SBS Group has developed a joint IT and digitalisation strategy for the Group’s business areas, which involves the implementation of a new, general IT platform within the next years. Except to setting the framework for the Group’s future IT platform, several areas are addressed by which intensified digitalisation will be instrumental in improving and streamlining the divisions’ businesses.
Thus, focus is still on new, digitalised tools for handling product data, digitalised distribution and sales concepts as well as targeted use of digitalised communication tools for marketing purposes. Setting priorities and executing the digital measures will take place at division level as business models and needs are different.