CEO's comments
Thanks to all customers and employees for a fantastic year
Our thanks go to all customers for the confidence you showed in Mekonomen during 2010. This gives us strength. There is extensive work behind the success. Our employees work every day to satisfy our customers and continuously improve our customer offering. We can be proud of the results we achieved jointly.
For me as head of Mekonomen, it is fantastic to see how our employees continuously improve and take on new challenges. This means that I feel delighted and satisfied every day for what we achieve.
2010 was an eventful year, characterised by a high level of activity and ambitious efforts. However, the results must be viewed in light of what we achieved in 2008 and 2009. Then we decided to make a concentrated effort to establish the Mega and Medium concepts, as well as targeting corporate customers through Mekonomen Fleet. During the recession and financial crisis in 2009, we chose to accelerate when many others were hitting the brakes. This strategy has proven to be completely spot on.
The number of affiliated workshops increased further during the year and amounted to 1,338 at the end of the year, a net increase of 132 units in 2010. The number of stores at the end of the year was 230, an increase of 10 units. In June, a pilot store was opened for our new M by Mekonomen concept, with a specific focus on women. During the year we also launched the Mekonomen card, with 10 per cent discount on accessories.
In Luleå, a regional warehouse was established to increase the level of service and availability in northern Sweden, Norway and Finland. A very important initiative was the launch of Mekonomen branded products during 2010 and early 2011, which were well received by our customers. This would not have been possible if confidence in the Mekonomen brand had not grown strongly over the years Mekonomen’s repositioning paid off, in terms of sales and profitability.
During the year, we also received official confirmation of our success. In March, Mekonomen was nominated “Retail Chain of the Year” by the Swedish Trade Federation and the newspaper Dagens Handel at the Retail Awards 2010.
Of course, the definite turnaround in Denmark is particularly gratifying. Major efforts have been spent on resolving the problems we had there earlier. One of the success factors was, and still is, to adapt to the country’s specific conditions. This means respecting that our markets in the Nordic region are different, although they have a lot in common.
Strong ambition and distinct goals
From the fourth quarter, we increased the pace of our efforts, for example by establishing our first stores in Finland, the acquisition and integration of the Speedy workshop chain, the establishment of new Mega units in Scandinavia and preparation for establishment in Iceland. In addition, Marinshopen was acquired to enable the first marine establishment and the aquisition of Sørensen og Balchen was prepared.
The acquisition of Sørensen og Balchen was completed in the first quarter of 2011, comprising 73 stores and slightly more than 200 affiliated workshops. It is a major step in our Nordic strategy and will strengthen our position in Norway, which is one of our key markets.
The main strategy for Mekonomen is organic growth. But, we will carefully analyse acquisition opportunities, if they are right, if they are suitable and if they complement our concept. During Mekonomen’s Capital Market Day in June, we presented a number of goals that will be achieved during 2012:
• not less than 30 per cent female employees in stores
• 50 Mega and 110 Medium units in the Nordic region
• one million customers with Mekonomen cards
• not less than 20 per cent proprietary brands in the range
• more than 2,000 partnership workshops
• have a leading position in the marine aftermarket
• have a leading position in the aftermarket for snowmobiles.
In addition, we gave a broad outline of our expansion outside the Nordic region. We explained that our long-term focus is to establish Mekonomen in 20 countries in ten years. With the success we achieved in Scandinavia and the strength we see in the Mekonomen concept, we are now equipped to enter new countries, when the time is right. Our continued expansion will be performed with retained profitability.
I am convinced that 2011 will be another exciting and successful year for Mekonomen, with many new ventures to positively surprise our customers.
Kungens Kurva March 2011
Håkan Lundstedt
President and CEO