Vision, business concept, goals and strategies

VISION: LEADER IN VALUE-ADDING TECHNOLOGY TRADING

Our vision is that Addtech shall be the leading value adding tech provider. As a Group-wide watchword, our vision directs how we should act in various situations, while effectively and successfully combining continuity with development. To achieve this vision we have broken it down into goals, strategy and business concept.

GOALS AND FOLLOW-UP

At Addtech, the requirements for growth, profitability and development determine the conditions for each individual business operation. We have set ourselves the goal of attaining 15 percent earnings growth per year. In practice this means that we double our earnings every five years. Obviously the economy affects our opportunities. Consequently our goal of averaging 15 percent in earnings growth per year should be viewed over a business cycle.

At Addtech we measure profitability as our operating profit (P) in relation to our working capital (WC). The profitability target for each subsidiary is a minimum of 45 percent. Everything that is done throughout the Group as part of daily business can be linked to the P/WC target and involves optimising the business. This P/WC ratio encourages high operating profit and low levels of tied-up capital. When combined with the growth target of 15 percent, this creates the possibility of positive cash flow and conditions for long-term profitable growth.

Viewed over a five-year period, Addtech has achieved its 45 percent target for P/WC. Viewed over the same period, the economy has had an impact on Addtech and earnings growth has been slightly below 15 percent.

strategies

MARKET-LEADING POSITIONS

Addtech aims to be the market leader and present in select niches with a high knowledge and technology content and where customers demand carefully selected products, solutions and subsystems, often in small and medium-sized volumes. A market-leading position is important for achieving stable growth and profitability.

OPERATING MOBILITY - FLEXIBLE AND ACTIVE OWNERSHIP

Addtech aims to be noted for its flexible organisation with solution-oriented, innovative employees who recognise new business opportunities. The Addtech Group aims to capitalise on the growth potential of each of its subsidiaries and product areas by dividing or merging operations, either in whole or in part. Operating mobility also involves Addtech having effective processes for integrating new operations.

GROWTH THROUGH ACQUISITIONS

Addtech aims to continously strengthen its operations through small acquisitions, as well as expanding and bolstering its positions in chosen niches. Business operations are also to be acquired in new niches where the Group has the possibility of becoming the market leader. The ability to apply the Group's business model is a success factor in all acquisitions.

BUSINESS CONCEPT: PARTNER THAT CREATES TECHNICAL AND FINANCIAL ADDED VALUE

Addtech has fundamentally maintained the same mission for more than 100 years: to offer high-tech products and solutions to companies in the manufacturing and infrastructure sectors. We will add both technical and financial value by being a skilled and professional partner to both customers and manufacturers.

Our business model describes how we will cash in on our business concept and is based on the concept of serving as the link between customers and suppliers. At one end of the chain we have our customers, who need a technologically knowledgeable partner to help them find the right supplier and technology. At the other end we have the suppliers, where our subsidiaries will be the best choice for them to sell their products in our markets. Quite simply, by serving as the link we will add value, either by helping customers to produce their goods more efficiently, or by helping their products become more competitive.

Success factors

Since becoming a listed company in 2001, Addtech has performed well both in terms of sales and profitability. Profitable growth is achieved through continuous business and organisational development. The following are the most important factors behind our successful business model.

COMPETENT EMPLOYEES

The business model is based on our people continuously developing existing and new business through their business skills, technical expertise and entrepreneurial approach. Employees who enjoy their tasks, develop their skills, and work hard to sell the products, solutions and sub-systems that add substantial value for our clients, are the most crucial factor behind the success of our business model.

DECENTRALISED ORGANISATION

The Addtech Group consists of about 120 subsidiaries which have a large measure of independence combined with responsibility, for both individuals and subsidiaries. Addtech combines the flexibility, efficiency and personal touch of a small enterprise with the resources, networks and long-term thinking of a large corporation. By taking a small-scale approach right across our operations we maximise the ability of a small business to achieve long-term growth and profitability.

CONSISTENCY AND STRONG BUSINESS CULTURE

Addtech has a deeply rooted culture based on strategic and consistent acting, good planning, a long-term approach, diligent decision-making and effective implementation. Furthermore, Addtech is charactarised by strong business acumen, a firm focus on profitability and an ethical approach.