Organisation
ENTREPRENEURSHIP AND A SMALL-SCALE APPROACH ON A LARGE SCALE
Addtech has more than 140 independent subsidiaries, and efficient decentralised corporate governance constitutes one of the keys to success. Freedom with responsibility is the core principle that applies throughout the organisation. The independence of the subsidiaries is crucial in order to recruit and retain business-driven employees and entrepreneurs. It also means that decisions about the subsidiaries’ operations are made close to both customers and the market. Each subsidiary has every opportunity to grow and develop its operations, provided that it follows Addtech’s business model and Group-wide rules.
The subsidiaries are relatively small with an average of 20–30 employees per company. Addtech does not control subsidiaries’ operations in detail, but is involved through active board work. The Parent Company also provides an array of tools that support efficiency enhancement and profitability optimisation. The tools are available in areas such as law, accounting and finance, training, quality and IT systems as well as in framework agreements (master contracts) for the purchase of services.
NEW ORGANISATION AS OF 1 APRIL 2015
Operating mobility is one of Addtech’s overall strategies; it means that the organisation is constantly adapted to goals and strategic priorities. The business units were introduced in 2008 to create an industrial context between the Group’s subsidiaries and their market niches. This organisation with the business units enabled key development issues to be pursued, and led to additional and strategically important operations being acquired and the Group strengthening its offering to both customers and suppliers in a number of market segments.
Addtech changed its organisation as of 1 April 2015, thereby taking its next important steps in development towards clearer and even more market-oriented business areas. The reorganisation further streamlines the operations: five somewhat smaller business areas gain clear responsibility, within the framework of Addtech’s decentralised governance and business model, to develop their operations in a number of selected market and technology areas.
The aim of the organisational change is to increase the potential for growth and profitability. The new organisation creates a clearer market focus and better conditions for cooperation. It is hoped that our subsidiaries, which often encounter similar challenges, will benefit from each others’ networks and experience in order to thereby offer better solutions to customers. We also expect the organisational change to increase the opportunity for strengthened market positions, among other things by forging a path towards more value-adding acquisitions.
FOUR BECOME FIVE
The new organisation involved the creation of a new business area, Power Solutions, which takes over the Storage & Power business unit from the Energy business area and the Customised Solutions business unit from the Industrial Solutions business area and a company within the Energy Products business unit. Power Solutions develops, markets and sells components and system solutions that ensure power supply, as well as operation and control of movements and energy flows, such as battery solutions and products used in the interaction between humans and machines. The business area has developed a large range of its own strong brands and has significant R&D expertise as well as niche production.
The remaining parts of the Energy business area continue to develop the markets for electricity distribution and transmission, as well as products and solutions in electrical safety, electrical installation, energy efficiency enhancement and connection technology. The business area’s market is in an interesting development phase – partly because major investments in infrastructure for power grids and railways are expected. The construction and installation industry is also interesting as there is an ongoing need for new housing.
The Industrial Solutions business area is now called Industrial Process and no longer encompasses the Customised Solutions business unit. In return, the business area has taken over the Process Technology business unit from Life Science. The name change marks the shift in focus towards industrial process flows, where Addtech sees major potential in producing solutions and systems that improve the efficiency of industrial processes and flows in all their forms.
The re-organisation means that Life Science now focuses entirely on research, health and medical technology. The business area enjoys a strong market position and is the Nordic region’s largest independent player in laboratory equipment and diagnostics. Through the acquisition of the Mediplast Group, which was completed on 4 June 2015, the business area gained a leading Nordic supplier of medical technology equipment and consumables. The acquisition is strategically important and forms the foundation of the new Medical Technology business unit. The acquisition also means that Life Science has reached a critical size and level of profitability that makes it suitable to become an independent listed company. In conjunction with the acquisition, the Board of Directors announced that a decision had been made to start preparing for a separate listing on Nasdaq OMX Stockholm. The ambition is to carry out the listing in the first half of 2016.
The Components business area was not affected by this reorganisation and continues to operate as before.
BUSINESS UNITS CREATE SYNERGIES
The main task of the business units will continue to be pursuing development issues in their respective units in order to identify and harness business opportunities in each market segment and promote exchanges between the subsidiaries. The cooperation in the business units creates a natural platform for a broader and more customer-oriented business focus in the subsidiaries.