Ahlsell is the market leader in distribution of installation products, tools and supplies to professional customers in the Nordic region. Ahlsell’s operations are primarily conducted in Sweden, Norway and Finland, which together account for 97% of the Group's net sales.
Ahlsell offers suppliers cost-effective access to a geographically challenging market. Large areas, hilly terrain, long coastlines and the many lakes present logistical challenges. The customer base is fragmented and products are sold to customers within installation, industry, infrastructure, construction, etc.
According to a market analysis conducted in conclusion to the IPO, Ahlsell’s total addressable market in the three main markets was estimated to be approximately BSEK 160 (2015). Given our broad Nordic presence, in combination with a continuously increasing product offering, and an expanding number of customer categories, the current market is probably substantially larger.Our market share of the Nordic market, addressing professional customers, was assessed at 20%.
Important role of distributors
In the Nordics, distributors represent approximately 70% of the total market. Direct sales and sales to DIY companies (Do-it-yourself) account for the remaining 30%. These percentages have been stable since 2011, which illustrates distributors’ strong position in the value chain. Suppliers’ bargaining power with the distributor varies depending on, among other things, the strength of their brand, market share and presence in the market. There are several types of distributors in the market: large specialists which solely focus on one product segment, small specialist wholesalers with local salesforces, and multi-specialists like Ahlsell. Ahlsell offers customers a unique range within three product segments.
Ahlsell's competitive advantages in the market
At Ahlsell, we offer customers the concept of ”one order, one delivery and one invoice”. Most of our customers make recurring purchases from more than one product segment, which proves that a broad product offering is important for our customers. Availability and size are a key competitive advantages in the distribution market.
We achieve economies of scale within sales, purchasing, logistics, branches, IT and overhead costs, which ensures good conditions for a competitive offering and good profitability. The competitive advantage is also proven in the branch network, where Ahlsell is able to operate profitable branches even in smaller cities thanks to our multi-segment offering.
Ahlsell’s market exposure and expected growth
Historically, the market has shown a growth rate of 1-2 percentage points above GDP growth. Ahlsell's growth target is to grow 2-3 percentage points faster than the market.