The challenging market situation has not affected the implementation of Norrhydro's strategy
The year 2024 started in the same vein as 2023 ended: uncertain and difficult-to-predict conditions. Our customers' weakened markets inevitably continued to impact Norrhydro's business during the first half of the year, and the outlook for the rest of the year remains weak.
The uncertainty caused by interest rate hikes and inflation, along with declining economies around the world, has been affecting our customers' businesses since mid-2023. This global situation is also negatively impacting Norrhydro's operations across all our main segments.
We've had to adjust our operations, but we can also state that due to these adjustment measures, our financial situation is more stable than it was at the end of 2023. We have achieved annual savings of approximately 2.0 million euros. With the current fixed cost structure, we can generate significantly higher revenue. As revenue grows, the impact of these cost savings will be reflected in a substantial improvement in our results.
Despite all the challenges, we have continued to implement our strategy and its required actions during the first half of the year. Significant investments have been made in the development of our digital business and various traditional cylinder business customer projects during this reporting period. Implementing strategic measures will continue to impact the company's profitability in the near future until the deployed measures start to show improvement in profitability and increased revenue.
Successes at the beginning of 2024 give us courage and faith in the future, reinforcing that we have made the right decisions along the way. We have achieved significant milestones in the NorrDigi MCC (multi-chamber cylinder) projects; we have successfully implemented the MCC system for an oil and gas industry customer, with further phases of the project in the pipeline. Additionally, we have achieved revolutionary results in tests conducted in collaboration with a global forklift manufacturer. We have also delivered NorrDigi EMA products to process industry projects during the year 2024. Currently, we are advancing to the testing phase with an international material handling machine manufacturer. We have also delivered NorrDigi EMA products to process industry projects during the year 2024. Currently, we are advancing to the testing phase with an international material handling machine manufacturer.
We have continued to implement our strategy in the traditional hydraulic cylinders sector as in previous years. Our sales activities have been very active, especially in acquiring new customers, and it is great to see that our customer base has grown with new customers in the first half of the year.
Acquiring new customers is particularly important for long-term growth. The annually increasing cylinder production capacity of the new production facility is sufficient to support the needs of both existing and entirely new customers. Our goal is to continue sales growth faster than the overall market growth after a short "breather."
Sustainability and responsible R&D activities are key success factors for our future. They are also reflected in the needs of our customers for environmentally friendly and responsible solutions and thus act as guidelines for our development. Our operations are based on close and deep cooperation with all our stakeholders. Year after year, our motto "partner in success" guides our actions and serves as a red thread for sustainable, long-term growth and development.
Responsibility, however, extends beyond our products to our daily operations; from the new production facility and its offered sustainable solutions to our most important resource, our personnel – and everything in between.
An important part of responsibility is the safety and well-being of our employees. We have focused on the safety of our personnel in our new production facility. Therefore the average accident frequency rate of 11 that we achieved during the first half of 2024, is a fantastic accomplishment by the entire Norrhydro team.
Continuous improvement is part of our strategy and daily activities. In the first months of the year 2024, we have particularly invested in further developing and streamlining our NPI (New Product Introduction) process. We always strive for the best possible outcome in our operations, and the onboarding of new customers and projects is key to a shared, long-lasting, and successful collaboration. We are once again a step further on the path of Norrhydro's growth and strategic journey.
