VIKING Life-Saving Equipment A/S delivered outstanding results across its product areas and markets in 2023. In terms of revenue and, in particular, earnings, the company has met the goals set out in its BP25 business plan much earlier than expected. Work on the next business plan, BP28, with new strategic objectives, is well advanced, and is due to be approved later this year.
Net revenue increased for the second consecutive year by almost DKK 400 million to DKK 3.53 billion against DKK 3.14 billion in 2022. Pre-tax profit totalled DKK 436.2 million, up from DKK 330.8 million the year before.
Excess production capacity
“The annual result is remarkable because none of our product or market areas have developed negatively over the year, while the offshore segment has developed particularly strongly. The growing service business has with good reason been stealing the limelight for several years, but in 2023 product sales – on which everything else is based – developed even more impressively. We have seen high activity in all our business areas,” says Gert Lillebæk, CFO.
High growth brings increased costs, but in 2023 costs have increased less than both revenue
VIKING used to have excess production capacity within certain product categories, but order volumes for rescue boats are at an unprecedented high level, while the production of immersion suits and fire-fighting suits for the global market is also at an all-time high. High growth brings increased costs, but in 2023 costs have increased less than both revenue and the contribution margin, which is slightly up on the prior-year period.
Investments maintaining momentum
“We intend to maintain momentum by investing in the service business, in production and in product development. Within services, the goal is to offer a full scope service at a growing number of our service stations so that we cover all service areas, in particular the servicing of lifeboats and marine firefighting equipment,” says Gert Lillebæk, and continues: “We’re also investing in products and concepts to meet the needs of our customers for solutions that make operational sense and reduce the complexity of their business.”
The investments in service stations and in new production facilities in Greece and Norway will increase costs in the coming financial year, but are considered an investment in future earnings. With a moderate outlook for revenue growth in 2024, the company is budgeting with a marginally improved bottom line.
World conflicts causing uncertainty
Geopolitical tensions continue to impact the supply chains that VIKING relies on for its materials
Geopolitical tensions continue to impact the supply chains that VIKING relies on for its raw materials and for being able to deliver its finished products on time. The political turmoil in the Red Sea near the Suez Canal may delay goods and increase costs if shipping companies choose to route their ships south of Africa.
“We’re feeling the knock-on effects of general global unrest and uncertainties about where the next conflict might flare up. We must remain agile and responsive to changing circumstances,” says Gert Lillebæk.
VIKING’s extensive service network
At the end of 2023, VIKING’s extensive service network covered a total of 279 authorised service stations worldwide, and the company’s global presence includes 36 of its own foreign subsidiaries represented in 79 locations.
The investment in several full-scope service stations is one of the reasons why the number of full-time employees increased by more than 200 to 3,294. And VIKING’s employees are thriving. The annual job satisfaction survey shows record high satisfaction.
CEO’s death a big loss
VIKING was deeply saddened by the loss of Henrik Uhd Christensen, its CEO since 2010
VIKING was deeply saddened by the loss of Henrik Uhd Christensen, its CEO since 2010, who passed away on 17 January 2024 after brief illness.
“I’m so sorry that Henrik was unable to communicate the results of an amazing year, which he impacted greatly through his skilled leadership. He repeatedly said that he wanted to hand over VIKING in a better shape than when he was appointed CEO. And he certainly did,” says Gert Lillebæk. On 1 June 2024, Henrik Helsinghof will take up the position of new CEO.
Sustainability requirements increasingly clear
Concurrently with the annual report, VIKING is publishing its annual ESG report, which describes the company’s environmental, social and governance efforts. The sustainability agenda and living up to its social responsibilities globally are a natural extension of VIKING’s values.
Customers and business partners are increasingly taking a stance on the topic and on what they demand of their suppliers. In the offshore area, for example, the focus is increasingly on the electric boats that the company manufactures. Here, the main objective is to be carbon-neutral by 2030.