Mission, goals and strategies

Mission
Indutrade markets, manufactures, develops and sells components, systems and services with a high-tech content in selected niches. Through in-depth knowledge about customers’ systems and processes and a high level of technical expertise, Indutrade strives to be the most effective partner for customers and suppliers.

Overall goals
The Group strives to continuously grow in selected geographical markets, product areas and niches with limited business risk. Growth is pursued organically as well as through acquisitions.

The Group's overall goals for creating profitable growth are

• to be the leading technology sales group in northern Europe in terms of net sales and profitability as well as technical expertise. The technology sales companies' sales are mainly to customers based in the local market;
• to be an international group with proprietary products and brands. The companies conduct own product development and sales in selected technology and market niches. The business is distinguished by innovation, high-tech content and good profitability. The customers are international and sales are usually designated for export.

Financial targets

• Average annual sales growth shall amount to 10% over a business cycle, of which organic growth is to exceed GDP growth in geographic markets in which Indutrade operates. The remaining growth willl be achieved through acquisitions. During the period 2005-2009, consolidated net sales increased from SEK 3,486 million to SEK 6,271 million, corresponding to average annual sales growth of 12.5%. Net sales in 2009 decreased by 7%, of which organic growth was
  -10% including currency effects, and acquired growth was approximately 3%.
• In February 2010 the Board of Directors decided to raise the target for the EBITA margin to a minimum of 10% per year over a business cycle (8%). The average EBITA margin during the last five years (2005-2009) was 10.6%. The EBITA margin in 2009 was 9.5%.
• Return on operating capital shall exceed 25% on average per year over a business cycle. During the last five years (2005-2009) the average return on operating capital was 33.7%. In 2009 the return was 22.2%.
• The net debt/equity ratio should normally not exceed 100%.
  During the last five years (2005-2009) the net debt/equity ratio varied between 53% and 61%, and was thus below 100% by a wide margin. The net debt/equity ratio at year-end 2008 was 57.2%.

Strategies
Indutrade has adopted the following strategies to achieve these targets:

Growth with limited operational risk
Growth shall be persued in three dimensions:

• In new and existing technology areas
• Through a broadened offering, such as extended support, training and other aftermarket services
• Geographical in selected markets

Growth shall take place organically as well as through acquisitions. In pace with Indutrade's growth, the entry barriers for potential competitors are expected to increase. At the same time the risk of Indutrade’s suppliers establishing their own sales organisations in the company’s markets will decrease. Business development and growth are thus strategic tools for lowering operational risk.

Strong market positions
Indutrade focuses on selling products in  niches in which it can attain a leading position. Strong market positions are often a condition for good profitability. They also make it easier to attract the best suppliers, which further enhances Indutrade’s position.

Long-term partnerships with leading suppliers
Indutrade gives priority to suppliers who, through own product development, provide market-leading, high-quality products with a high-tech content. A partnership with Indutrade should be the most profitable way for suppliers to sell their products in the geographic markets in which Indutrades operates.
A range of market-leading products from the best suppliers, coupled with Indutrade's technology and market know-how, makes Indutrade a more attractive business partner for existing and potential customers.

Companies with proprietary products and brands
Indutrade balances its technology trading companies with a number of companies with proprietary products and brands. The products are to have a high-tech content, while the companies should have a strong market position and favourable growth potential. Since 2004 the share of companies with proprietary products has increased by 18 percentage points, and in 2009 they accounted for 30% of consolidated sales.

High share of repetitive sales and focus on selected customer segments
Indutrade offers components, systems and services for customers with recurring needs. This contributes to operating stability and more predictable revenue flows. The Group gives priority to customers with recurring needs that are active in industries with favourable prospects for maintaining competitive production in Indutrade's home markets. Many of these industries are characterised by a high degree of automation, high distribution costs and/or high start-up investment.

Sales organisation with high level of technical expertise
Indutrade’s range of products and services which are aimed at both end users and OEM customers (customers that integrate Indutrade's products in their own products), shall have a high-tech content and incorporate a high level of service and qualified techni cal consulting. Indutrade’s sales representatives have a high level of technical expertise in their respective fields and a depth of knowledge about customers’ production processes. This makes Indutrade an attractive business partner that can create value-added for customers and suppliers.

Decentralised organisation with a strong local presence
Indutrade’s governance model is characterised by decentralisation, as the best business decisions are made close to the customers by people who have a solid understanding of the customer’s needs and processes. Indutrade’s subsidiaries are responsible for their own profitability, which contributes to greater flexibility and a stronger entrepreneurial spirit.