Innovation drives another record year

It is pleasing to report another record year in 2019 for the company, with continued growth and increased market share. We grew faster than the market and our new products such as our DeLaval VMS™ V300 were very well received.

Sales and market share

Our successful launches of 2018 bore more fruit in 2019 and we saw continued interest and an increasing amount of orders for several of our latest innovations, not least our world-­leading DeLaval VMS™ V300 milking robot. Orders from farmers increased all around the globe.

Similarly, the 2018 launches of the DeLaval Rotary E300 milking system, the DeLaval Rotary E100 and the DeLaval Parlour P500 milking system were positively received by the market in 2019. DeLaval OptiDuo™, an automated feed pusher and remixer and our DeLaval Evanza™ milking cluster have also established themselves firmly in the market as we reap the rewards.

Sales in Europe have been particularly strong, and I believe we have significantly strengthened our position in the European automatic milking market. We also had strong sales in Asia-Pacific and it was a good year in the Americas despite the challenges in the market. I think the continued success in our markets was largely due to the innovations that were launched in 2018 as well as our dedicated and competent teams on the ground.

In 2019, net sales amounted to 1,082 million in prevailing currencies, compared with 1,011 in 2018.

“In 2019, we launched the DeLaval VMS^™ V310, an upgrade to our record-­breaking VMS^™ V300. The new upgraded milking robot includes DeLaval RePro^™ that automatically detects heat and pregnancy during the milking process.”

Our commitment to innovation

While our latest range of innovations are continuing to gain traction around the globe, our commitment to further innovation continues. In 2019, we launched the DeLaval VMS™ V310, an upgrade to our record-­breaking VMS™ V300. The new upgraded milking robot includes DeLaval RePro™ that automatically detects heat and pregnancy during the milking process, using progesterone-based sampling and analysis in real time. The innovation can also detect cows with a lack of heat expression and the presence of abnormal ovarian structures such as cysts.

It is the first milking system that automatically confirms pregnant cows and can determine early embryonic loss. We began developing this innovation around 15 years ago, so I very am proud of our long-term commitment to developing a highly innovative technology that enables farmers to save time and reduce costs.

We are also seeing a strong uptake of DeLaval InService™ All-Inclusive, which is a very useful service for farmers as it gives them a fixed-rate subscription to cater for all the required consumables for their farm. With DeLaval InService™ All-Inclusive, a farmer’s consumables arrive before they even need to be ordered. The service also provides 24/7 support and the regular servicing of all machinery. This allows dairy farmers to run their farms in a more efficient and professional way and gives them better control of their budget and time.

Our continued commitment to innovation with constant investments in R&D are also leading to changes in our internal structure to meet future customer needs. We’re in the midst of creating a dedicated organisation focusing on digital services. This team will work on developing new business models to better meet the future needs of our customers.

An example of this is how we are developing connectivity to be able to monitor and upgrade software remotely on farms around the world. This allows the analysis of data, so farmers can use their data to make better decisions using intelligence and recommendations.

“We are also seeing a strong uptake of DeLaval InService^™ All-Inclusive, which is a very useful service for farmers as it gives them a fixed-rate subscription to cater for all the required consumables for their farm.”

Greater productivity for DeLaval and our customers

I would say that much of our progress is based on the organisational changes we made back in 2016 that have helped us bring more competence closer to our customers. In 2019, we have really benefitted from this, and I am particularly proud of the dedication of our sales and installation teams that have worked extremely hard to ensure successful customer deliveries.

We continue to make organisational changes where we see fit to improve our own productivity. We have also combined our two business areas into one unit, which is improving productivity by finding synergies and making use of common processes from our two previous business areas.

While we enjoy strong sales, we are refining and adjusting our existing offering and ensure the right solutions for our clients while maintaining and improving our own efficiency.

“Our vision is to make sustainable food production possible and I firmly believe that our continued efforts to help farmers produce more and higher quality milk with less resources have a significant positive impact.”

Enabling sustainable production

Our vision is to make sustainable food production possible and I firmly believe that our continued efforts to help farmers produce more and higher quality milk with less resources have a significant positive impact. Automation has helped a lot in this regard and has the potential to do even more.

Well positioned to create opportunities

While DeLaval enjoyed significant growth in 2019, growth in the dairy industry as a whole was flat. Political uncertainty around the world, including trade tensions between the US and China and the uncertainty surrounding the new Common Agricultural Policy CAP) in the EU, are raising doubts amongst our customers and could present challenges in the future.

We expect to see further market consolidation and a continued restructuring of dairy farms.

Furthermore, we are experiencing some unprecedented times with the Coronavirus situation. This pandemic will have an effect on businesses worldwide. We always try to find the best possible ways to support our customers regardless of the challenges being faced. In addition, safety of our employees and their families is our number one priority in a situation like this, and we are constantly working to prepare for the changes the situation might require, in our offices, factories, warehouses and service organisations.

DeLaval is an important part of securing global food production. The food and agriculture sector has in relation to the effects of the Coronavirus been identified as a critical infrastructure sector in many countries. Our continued ability to, together with our dealers, perform services at dairy farms during restrictions in society is essential. We are doing everything we can to continue to serve them with as little disruption as possible, so they can continue to milk their cows.

The mid and long-term consequences of the situation remains to be seen, but it will vary in different areas. We are here to support the farmer to supply food to the societies. A most important task during all times, and especially now.

The opportunities we foresee for 2020, we believe we create ourselves, rather than opportunities available to the market in general.

Joakim Rosengren

“Our strategy is centred around the customer. We know that the way to meet customer needs is to ensure improvements in food safety, work efficiency, animal welfare and farm profitability. These criteria are valid everywhere around the globe and help us focus our efforts in both R&D and sales. They are also important when we improve our internal productivity.”