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Our markets
Currently, our more than 150 companies offer services in Norway, Sweden, Denmark and Germany.
Going forward, we plan to expand to additional geographies in Europe. Although the geographical markets have different outlooks, trends and competitive landscapes, they share several key dynamics and structural attributes.
Endless compounding opportunities
The surface treatment solutions market is highly fragmented and primarily comprises of many small local companies. However, the scale advantages of belonging to a big group are high when it comes to areas such as ESG, digitalisation, competence development, purchasing, control and documentation.
The fragmentation of the market combined with the scale advantages provides compounding opportunities for HG.
Stable demand in refurbishment
Over the course of several decades, the refurbishment segment has proven to be more stable than the new build segment. This development is explained by a large stock of aging buildings in our markets. Additionally, the increasing attention to ESG is accelerating the need for refurbishment in the aging housing stock. For example, in Germany, almost 45 percent of residential buildings need to be renovated by 2033 to meet the climate targets.
Most of HG’s revenue in surfacing is derived from refurbishment and small to medium sized B2B customers, with a stable underlying growth. The share of recurring customers, returning year after year to HG, is high because of close relationships with the customers and the fact that satisfied customers continue to return over time.
Housing shortage
There is a European-wide housing shortage, which has been further worsened by a decline in new build due to the recent years’ economic downturn. For example, in Sweden, 180 out of 290 municipalities report a housing shortage. In Germany, there is a shortage of 600,000 apartments. The demand for HG’s services is expected to increase when new build increases to fill the demand.
Increasing regulation
Historically, there has been a large share of undeclared work in the industry. The market is now seeing a diminishing trend of undeclared work due to several reasons, including social unacceptance, and increasing governmental efforts. This drives customers towards professional, integrous players in the market. HG takes a leading role in this development.