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Performance
Revenue grew 20% in 2008 compared to 2007, and fourth quarter customer orders and revenue reached all time high. Organic growth approximated 11 percent, when including Valere Power for the full year 2007. Considering that the overall power supply market likely showed single-digit growth in 2008, Eltek Valere reached its target of growth above the market average and further consolidated its strong market position.Eltek Valere’s high efficiency product range is being promoted around the world, representing a great potential for energy savings and rapid payback for customers. Several new power and voltage levels will be added to the HE product line, helping maintain a competitive advantage for 2009.
In EMEA, Eltek Valere’s revenue was NOK 1 483 million in 2008, an increase of 5 percent from 2007. EMEA’s share of Eltek Valere’s global revenue was 41 % in 2008. EMEA consists of a number of national markets, some of which are of considerable size.
The Nordic region
Eltek Valere maintained a strong position in the Nordic countries, continuing healthy business relationships with key operators in the region. Revenue growth was above 20 %. The high efficiency module Flatpack II HE has been successfully introduced in the market and has been adopted as the standard by one of the operators in the region. Key wins included a contract with a global OEM in the Baltic region. Industrial power constitutes a growing part of Eltek Valere’s business in the Nordic region, with deliveries to the rail, utility, marine and offshore sectors.Continental Europe and the UK
In the more mature markets like Germany, France and the UK, Eltek Valere maintained its position with key customers, including many of the leading operators. To some extent, reduced activity in these markets was countered by sales in North Africa, Belgium, Italy the Czech Republic, Slovakia, Switzerland, Poland and Ireland.From a relatively modest base, business developed well in Spain with a growth in revenues of more than 50 %.
In all mature markets, there is a significant potential for upgrades and replacement of older equipment and Eltek Valere is particularly well positioned with its High Efficiency equipment that reduces operating cost and environmental footprint for the operators. Additionally, business opportunities in the industrial market represent a potential for future growth in the region.
Russia
In spite of the uncertainty caused by the financial crisis and the devaluation of the ruble, Eltek Valere experienced continued growth in Russia in 2008, and maintained its leadership position. Through a contract won in late 2007 and orders materializing in 2008, Eltek Valere became a leader in the segment for low to medium power supplies for mobile operators. The financial crisis clearly put its mark on the second half of the year. Under these market conditions, Eltek Valere will continue to leverage its competitive product range in both the telecom and industrial markets.
The Middle East and Africa
Eltek Valere is active across the Middle East and posted over 20 % revenue growth. Important contracts were secured with key operators and OEMs in the region.Pakistan is one example of a country where Eltek Valere progressed and won new contracts with existing and new customers. During the year, the company was registered as a vendor with the largest telecom operator and several government and Defense Sector Organizations, opening up new opportunities going forward.
Africa constitutes a market which is expected to grow substantially over the coming years as mobile telephony and broadband are being deployed. Eltek Valere is present on the African continent with a regional office in South Africa, and through its distributor SAAB Grintek, a South African company. In addition, Eltek Valere has established a subsidiary in Egypt. Several North and West African countries are served from Eltek Valere France. Across the region, turn-key solutions are of particular interest, as are solar-based power solutions.
Total revenue for the Americas region amounted to NOK 1 030 million, up from 708 million. This constitutes 28 percent of total revenue.
The revenue increase also reflects the fact that 2008 was the first full year of operation following the merger of Eltek Energy and Valere Power (which had a major part of its business in the US). (2007: 7 months of merged operations.)
South America
The positive development in the Americas is largely a result of strong growth in Brazil and Argentina, where several new contracts and customers, including both operators and original equipment manufacturers, were won. Telecom investments in 3G, Wimax and Broadband deployments helped fuel the increase in investments throughout the region. In Brazil, Eltek Valere maintains a complete factory and service facility and was ideally positioned to take advantage of the new opportunities. Product deployments included large scale systems for central office applications and a significant increase in the deployment of Outdoor Cabinet Solutions.
Business in Peru, Bolivia and Ecuador, managed from the Eltek Valere’s office in Peru, also showed a positive development and grew from fairly modest levels. Colombia and Venezuela are addressed from Eltek Valere’s office in Colombia. In both these countries, the strategy is to cooperate closely with Nera’s organization and introduce power solutions as part of the Eltek Group’s offering.
North America
The financial crisis hit the North American market earlier than other markets and restrained growth for Eltek Valere in the US. The US remains the largest individual market in the world where Eltek Valere’s customer base is balanced in both the wireless and wireline sectors. In 2008, Eltek Valere maintained relationships and sales to key customers and won significant new business involving outdoor cabinet deliveries. New contracts were also won in Mexico and Canada.
The visibility in the market is currently low, and the development of the market depends very much on the development of the financial crisis. However, Eltek Valere’s power-saving high efficiency product range represents a particular opportunity going forward, given the sharpened focus on climate issues by the new Administration in the US and the operators’ ambitions to reduce both operational costs and emissions. The combination of legacy Eltek and Valere systems was a reality from 2008 and this "best of both product lines" will continue to be a competitive advantage for Eltek Valere in the US.
The visibility in the market is currently low, and the development of the market depends very much on the development of the financial crisis. However, Eltek Valere’s power-saving high efficiency product range represents a particular opportunity going forward, given the sharpened focus on climate issues by the new Administration in the US and the operators’ ambitions to reduce both operational costs and emissions. The combination of legacy Eltek and Valere systems was a reality from 2008 and this "best of both product lines" will continue to be a competitive advantage for Eltek Valere in the US.
Revenue increased to NOK 1 151 million from NOK 941 million, or 22 %. This constitutes 31 % of Eltek Valere’s total revenue.
South East Asia
Eltek Valere is the market leader in this part of Asia/Pacific. Headquarters are in Singapore, where Eltek Valere enjoys long-standing customer relationships with key operators and OEMs. Eltek experienced a positive business development in most countries in the region, in particular in Japan which is a relatively new market to Eltek Valere. Other key markets include Thailand, Singapore, Indonesia, Vietnam and Cambodia. Eltek Valere will continue to focus on the emerging markets in the region, and in addition offer innovative outdoor cabinets, high efficiency products and alternative energy solutions in the replacement markets that are emerging in the more mature countries of the region.India
The performance of Eltek Valere in India was very good in 2008, with several new wins in a market with a massive addition of 10 million new mobile subscribers every month. However, the sharing of sites by all new and existing operators will somewhat limit the growth potential in infrastructure going forward. Eltek Valere is well positioned through technological leadership and a complete and high quality offering, including after sales support.Australia
Eltek Valere maintained its no. 1 position within the telecommunications sector for supply of DC power systems, having exclusive supply contracts with several operators. While business in the mobile sector slowed down in late 2008, this was countered by opening new sales channels into other market sectors including industrial, solar and UPS. Each of these will be important sectors for future growth during 2009 and coming years.China
Eltek Valere’s business in China continues to gain momentum, with a growing installed base with the main operators. The "green products" (high efficiency) have been met with interest and represent a definite growth opportunity going forward.OEM business
Eltek Valere has fruitful business relationships with leading global equipment manufacturers, in all three regions. This business is generally longer term and entails high-volume deliveries over time. In 2008, the activity level was stable and OEM remained a key element of Eltek Valere's business mix.
Copyright 2010 Eltek ASA • Date: 2010.9.6 • Disclaimer • Phone +47 32 20 32 00 eltek@eltek.com