ERIKS

As mentioned earlier in this annual report SHV announced the intention to divest ERIKS. The process has progressed well to date resulting the signing of a share purchase agreement in November 2023 with an affiliate of Lone Star (a US based private equity firm) to acquire ERIKS. Regulatory filings are currently in progress and SHV expects the transaction to be finalised in the first half of 2024. 

Focusing on 2023, the overall macroeconomic and market environment surrounding ERIKS remained unpredictable.  A number of ERIKS markets have been subject to economic uncertainties, whilst inflation remained historically high putting pressure on ERIKS’ trading profit performance and impacting operational costs. Furthermore, the labour market in most countries remained challenging, impacting direct personnel availability and putting pressure on personnel costs. Given these current market conditions, strict cost control was a top priority for ERIKS in 2023.

ERIKS’ focus in 2023 remained unchained, centered around the execution of the Fuel for Growth programme. As such ERIKS focused on timely passing on price increases to customers, with the global implementation of best practices in 2023, resulting in increased trading margins. Furthermore, organisational efficiency, aiming at preventing inflation from corroding profitability for ERIKS, has been improved and efficiency increases have resulted in stable costs levels. Locally, the respective improvement plans of Germany and Belgium are being executed with the aim to realise a step up in performance. This has resulted in the full implementation of ERIKS’s ERP landscape in Germany, whilst the execution of multiple initiatives to improve financial performance is still ongoing, in a challenging German market suffering from economic headwinds. Furthermore, the improvement plan for Belgium is ongoing, focused on right sizing the organisation to lower cost and increasing organisational agility.