We have published our annual Staticus Group Capability Statement for 2023. We are committed to making this information available. And, more than that, we want to explain it in detail so that our stakeholders understand our current situation and have a clear idea of how we plan to develop. Therefore, along with publishing the Capability Statement itself, we are also sharing insights from our leadership team that shed light on specific aspects of the report. Here, we share our CEO Ausra’s annual letter from the Capability Statement in full. In it, Ausra outlines the successes Staticus achieved in our 20th year as a company, including record turnover and the formulation of a new 4-year strategy.
A Milestone Year That Demonstrated Our Resilience
For us as a company, 2023 was a milestone year. We celebrated our 20th birthday, reflecting on our development from a small-scale producer of windows in Lithuania into an international façade contractor serving major clients across Europe.
It was also the year we completed our first strategic cycle (from 2020-2023) while developing and launching our new strategy for the upcoming four years. It was noticeable that key decisions we took three years ago bore fruit in 2023 and enabled us to record impressive growth while remaining resilient.
This resilience proved important in yet another year when the geopolitical and economic context refused to return to normal. Although we didn’t see crises on the same scale, it was still a turbulent year. Interest rates reached very high levels, which meant a lot of construction was put on hold due to financing challenges. This was compounded by ongoing concerns of recession in European economies and the outbreak of war in the Middle East.
Additionally, living costs went up. This meant, as a business, we had to find the balance between two competing needs. On the one hand, our employees needed higher salaries to manage the cost-of-living crisis. On the other hand, our clients wanted lower prices to mitigate high interest rates.
I am proud that we managed this balancing act well in 2023. This was only possible because we worked with the right clients and had the right projects in place. The strategic cycle we undertook in 2020 enabled us to be disciplined and judicious in our project selection, and this paid off in 2023. Because we had already been looking ahead, we had projects like the Landspitali Hospital and partners including Tier 1 construction companies already in place. These projects match our high technical competencies and are the right scale for effective economies.
A secure pipeline of projects like this helped us minimize risk, ensuring we did not need to take on less secure projects with the potential to become “black swans.”
Completing One Strategic Cycle and Developing the Next
Last year saw us complete our first strategic cycle while simultaneously developing our strategy for 2024-2027.
This meant there was a lot of focus on fulfilling commitments we had set ourselves three years ago and delivering on our promises. We hit our overall goal of EUR 100 million in annual turnover – a huge congratulations to the team for achieving this. There were many other successes, some of which I will mention during the course of this letter.
Meanwhile, as we were delivering on our existing promises, we were also defining our new ones. In February, we kicked off the process of creating our vision for the next four years. The Strategy Steering Group, along with many other team members who volunteered their time to get involved, brainstormed ideas. This was followed by a period of intensive research, which included a lot of input from our partners.
In total, we had 77 interviews with different stakeholders. We wanted to listen and learn, understanding the pain points and challenges that our clients and partners face. I would especially like to thank all of our clients who participated for being so candid and open with us.
Being an Engaged Partner to Strategically Important Clients
Last year, we secured new projects with two of our strategically important clients, Lendlease and Multiplex, both of whom are tier 1 global companies. We are grateful for the trust they have put in us and we take the responsibility very seriously.
Now it is our job to prove that they were right to choose us. We also made our first steps into the Dutch market, gaining the contract for the International Meeting Facility at the European Space Agency’s Noordwijk campus in the Netherlands.
I have mentioned a couple of times this year the need to stay lean and keen – not to become “fat and lazy” like some real-life partners can. We don’t take anything for granted and want to always remain active, engaged, and ready for new challenges. As we continue to grow into a global player, there is no space to relax. The projects will become even more challenging, and we will need to go the extra mile to succeed.
With our research done, we met in Autumn for an intensive program of workshops guided by James Henderson from IMD, one of Europe’s top-ranked business schools. James had been heavily involved in the development of our 2020-2023 strategy, so it was great to get his invaluable input once again. During the workshop, we took the hard decisions on where to play and how to win. The result was five Must Win Battles that represent the core elements of our 2024-2027 strategy:
- Boost Markets
- Smarter Work
- Empowering Culture
- Staticus Labs
- Staticus Care
These Must Win Battles have a sponsor and three specific and measurable initiatives, each with a dedicated team and clear targets. We launched our strategy at the start of this year. This launch was a major event for us, and getting there took a lot of effort and work from the team, for which I am very grateful.
Getting Our Voice Heard Louder Than Ever
In 2023, we had a louder voice than ever within the industry. In total, members of our team spoke at more than ten different events, with highlights including the ZAK World of Façades conference in London and the ABS conference in Switzerland. What really pleases me is that our expertise is being recognized and valued in diverse areas, from sustainability to industry trends to technical topics.
Seeing Our R&D Activities Bear Fruit
Our three-year strategic cycle involved a lot of investment into R&D. And in 2023, much of our hard work bore fruit as we managed to commercialize innovations we have been working on. Most notably, the Hybrid Unitised Façade (HUF) we have been developing through a Norway Grants funded Staticus Care project in partnership with OsloMet, KTU, and Sintef, was used in a project for the first time. This façade system uses timber to reduce embodied carbon by up to 75% while improving performance and offering an impressive aesthetic. Last year it was produced and installed for the Textiltorget project in Sweden, its first commercial use. And we received positive feedback from the client.
2023 also witnessed the first project to use our own façade system which was developed in-house. After passing rigorous performance tests at VINCI Labs in the UK that meet CWCT standards, this system was deployed for the Separatorn 1 project in Sweden. This was another example of a strategic goal we committed to in 2020 being realized, and also represented a big step for us. Using our own system has implications for our organizational structure and competences, and this is an ongoing process. Naturally, we will still work with system houses, but we now have our in-house too which can be suitable depending on the project needs.
Overall, innovations in our industry are capital intensive, and we are committed to being careful regarding where we invest and what we target so that we have more successes commercializing our new products and services in the future.
Implementing Our Sustainability Strategy
Our Corporate Sustainability Strategy, published in 2022, was put into practice in 2023. The strategy defined five focus areas: Transparency, Partnerships, Innovation in Design and Delivery, Being a Sustainable Organization, and Climate Protection.
With regards to transparency and partnership, advances in our XD tool (more on that shortly) and the implementation of our collaboration-based negotiation strategy were notable successes this year. The successful deployment of our next-generation HUF and our new façade system (mentioned above) were clear examples of successful sustainability-focused innovation. We continued our research into Internet of Things (IoT) sensors, with a view to enabling predictive maintenance that saves on costs and materials. And I valued the opportunity to speak at the CWCT’s annual general meeting, where I welcomed calls for more openness and clearer data on embodied carbon calculations.
As an organization, we continued to diversify, with new talents onboarded from across Europe. We now have team members from 18 different nationalities within the company, increasing our diversity.
Being a More Adaptable, Connected, and Responsive Team
As we have learned over our 20-year history, entering new markets requires agility and adaptability. So, it is fitting that our teams are now all cross-functional and working according to an Agile approach.
Once again, embracing Agile was a commitment we set ourselves in 2020, and this was definitely a correct and important decision for our company. Our cross-functional teams can serve projects more effectively. They are better placed to address client pain points and meet their needs faster.
Adopting this approach has not always been straightforward. It has required a significant change in our mindset and has taken longer than we first anticipated. Nevertheless, we have made significant tangible progress, including the adoption of OKRs (Objectives and Key Results), and we will continue on this journey of becoming more adaptable and flexible.
Our ongoing digitalization as an organization is enabling greater transparency, efficiency, and planning via our XD tool. Team members, partners, and clients can now track a wide range of project metrics including daily production and installation rates, non-completed elements, transportation and logistics, and pricing. The tool automatically updates itself three times per day, and has quick links to QA information, technical designs, and shipping data.
Ultimately, by embracing a setup based on cross-functional teams, applying Agile methodology, and using digital tools, the work we do as individuals has more purpose and clarity. This makes our everyday work more meaningful because we can see the larger goals we are contributing to.
With this approach, and our clear focus for development that is defined in our new strategy, I am confident that we will remain resilient and continue to grow in 2024.
Looking Ahead to 2024
While I am a positive person, I do see less than blue skies coming in 2024. My reasoning is that there are still many unpredictable factors that can influence markets. Interest rates remain high, and there are important elections coming up in many countries. These can directly impact markets, and I believe many investors and other players are waiting to see what will happen.
Ensuring consistent growth will require extra effort and a strategic approach. We are careful in choosing our partners and projects, and we remain conservative in terms of cash flow management and our approach to contract negotiations.
