Notifi cation Shareholders wishing to attend the Annual General Meeting must:
be entered in the share register held by
•
the Swedish Securities Register Centre (VPC AB) by Friday 18 April 2008.
notify the company no later than
•
Monday 21 April 2008 before 1 p.m.:
OEM International AB, Box 1009, SE-573 28 TRANÅS
Tel. +46 (0)75 242 40 00 or email info@oem.se
Shareholders who have registered their shares in the name of an authorised agent must temporarily register the shares in their own name with the VPC AB by no later than Friday 18 April 2008 in order to participate at the Annual General Meeting.
DIVIDEND
The Board of Directors proposes that the Annual General Meeting issue a dividend of SEK 3 per share for 2007 and stipulate Tuesday 29 April 2008 as record date. If the Annual General Meeting adopts the proposal, it is expected that dividends will be distributed on Monday 5 May 2007 to those entered in the share register on the date of issue.
BUSINESS
The agenda and business of the Annual General Meeting will be notifi ed through advertisements in the daily press and will also be available on OEM’s website (www.oem.se). The agenda can also be obtained from the company when regis- tering to attend the meeting.
FUTURE REPORTS
Interim report, January-March
•
24 April 2008
Half-yearly report, January-June
•
24 July 2008
Interim report, January-September
•
24 October 2008
Financial statement, 2008
•
February 2009
Annual Report March/April 2009
•
VISIT OUR WEBSITE
The latest information about the company is available on our website (www.oem.se).
Annual General Meeting
The Annual General Meeting will be held on Thursday 24 April 2008 at 4 p.m. at Stadshotellet, Storgatan 22 in Tranås, Sweden.
07
For easy access to defi nitions while reading the annual report, open the fl ap and lay fl at.
▼
Annual Report 2007
Box 1009, SE-573 28 Tranås • Tel. +46 (0)75 24 24 000 • Fax +46 (0)75 24 24 029 • Email info@int.oem.se • www.oem.se 07
CCJ Kommunikation • Photos Patrik Svedberg and others
OEM ANNUAL REPOR T 2007
ANNUAL GENERAL MEETING – FUTURE REPORTS ❚ OEM ANNUAL REPORT 2007 2
For easy access to defi nitions while reading the annual report, open the fl ap and lay fl at.
▼
OEM2008_omslag_Plano_ENG_OK.indd 1 08-04-21 15.51.53
Notifi cation Shareholders wishing to attend the Annual General Meeting must:
be entered in the share register held by
•
the Swedish Securities Register Centre (VPC AB) by Friday 18 April 2008.
notify the company no later than
•
Monday 21 April 2008 before 1 p.m.:
OEM International AB, Box 1009, SE-573 28 TRANÅS
Tel. +46 (0)75 242 40 00 or email info@oem.se
Shareholders who have registered their shares in the name of an authorised agent must temporarily register the shares in their own name with the VPC AB by no later than Friday 18 April 2008 in order to participate at the Annual General Meeting.
DIVIDEND
The Board of Directors proposes that the Annual General Meeting issue a dividend of SEK 3 per share for 2007 and stipulate Tuesday 29 April 2008 as record date. If the Annual General Meeting adopts the proposal, it is expected that dividends will be distributed on Monday 5 May 2007 to those entered in the share register on the date of issue.
BUSINESS
The agenda and business of the Annual General Meeting will be notifi ed through advertisements in the daily press and will also be available on OEM’s website (www.oem.se). The agenda can also be obtained from the company when regis- tering to attend the meeting.
FUTURE REPORTS
Interim report, January-March
•
24 April 2008
Half-yearly report, January-June
•
24 July 2008
Interim report, January-September
•
24 October 2008
Financial statement, 2008
•
February 2009
Annual Report March/April 2009
•
VISIT OUR WEBSITE
The latest information about the company is available on our website (www.oem.se).
Annual General Meeting
The Annual General Meeting will be held on Thursday 24 April 2008 at 4 p.m. at Stadshotellet, Storgatan 22 in Tranås, Sweden.
07
Annual Report 2007
Box 1009, SE-573 28 Tranås • Tel. +46 (0)75 24 24 000 • Fax +46 (0)75 24 24 029 • Email info@int.oem.se • www.oem.se 07
CCJ Kommunikation • Photos Patrik Svedberg and others
OEM ANNUAL REPOR T 2007
ANNUAL GENERAL MEETING – FUTURE REPORTS ❚ OEM ANNUAL REPORT 2007 2
For easy access to defi nitions while reading the annual report, open the fl ap and lay fl at.
▼
OEM2008_omslag_Plano_ENG_OK.indd 1 08-04-21 15.51.53
Notifi cation Shareholders wishing to attend the Annual General Meeting must:
be entered in the share register held by
•
the Swedish Securities Register Centre (VPC AB) by Friday 18 April 2008.
notify the company no later than
•
Monday 21 April 2008 before 1 p.m.:
OEM International AB, Box 1009, SE-573 28 TRANÅS
Tel. +46 (0)75 242 40 00 or email info@oem.se
Shareholders who have registered their shares in the name of an authorised agent must temporarily register the shares in their own name with the VPC AB by no later than Friday 18 April 2008 in order to participate at the Annual General Meeting.
DIVIDEND
The Board of Directors proposes that the Annual General Meeting issue a dividend of SEK 3 per share for 2007 and stipulate Tuesday 29 April 2008 as record date. If the Annual General Meeting adopts the proposal, it is expected that dividends will be distributed on Monday 5 May 2007 to those entered in the share register on the date of issue.
BUSINESS
The agenda and business of the Annual General Meeting will be notifi ed through advertisements in the daily press and will also be available on OEM’s website (www.oem.se). The agenda can also be obtained from the company when regis- tering to attend the meeting.
FUTURE REPORTS
Interim report, January-March
•
24 April 2008
Half-yearly report, January-June
•
24 July 2008
Interim report, January-September
•
24 October 2008
Financial statement, 2008
•
February 2009
Annual Report March/April 2009
•
VISIT OUR WEBSITE
The latest information about the company is available on our website (www.oem.se).
Annual General Meeting
The Annual General Meeting will be held on Thursday 24 April 2008 at 4 p.m. at Stadshotellet, Storgatan 22 in Tranås, Sweden.
07
For easy access to defi nitions while reading the annual report, open the fl ap and lay fl at.
▼
Annual Report 2007
Box 1009, SE-573 28 Tranås • Tel. +46 (0)75 24 24 000 • Fax +46 (0)75 24 24 029 • Email info@int.oem.se • www.oem.se 07
CCJ Kommunikation • Photos Patrik Svedberg and others
OEM ANNUAL REPOR T 2007
ANNUAL GENERAL MEETING – FUTURE REPORTS ❚ OEM ANNUAL REPORT 2007 2
For easy access to defi nitions while reading the annual report, open the fl ap and lay fl at.
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OEM2008_omslag_Plano_ENG_OK.indd 1 08-04-21 15.51.53
OEM
Contents
Annual General Meeting – future reports .... 2
This is OEM International ... 3-4 History ... 3-4 2007 in brief ... 5
Comments from the CEO ... 6-7 Vision, business concept and business logic ... 8-9 Growth strategy ... 10
Financial targets... 11
Employees ... 12-13 Quality, the environment and ethics .. 14-15 Board of Directors ... 16-17 Senior Management ... 18-19 GROUP STRUCTURE ...20-21 ■ OEM Automatic ... 22-23 ■ OEM Electronics ... 24-25 ■ Cyncrona ... 26-27 ■ Development ... 28-29 OEM Electronics – an important partner ... 30-31 Positive path for Telfa... 32-33 OEM Automatic strengthens its position ... 34-35 FINANCIAL REPORTING Five-year Group summary ... 38
Key indicators for the last fi ve years ... 39
Directors’ report ... 40-41 FINANCIAL REPORTS – THE GROUP Income statement ... 42
Balance sheets ... 43-44 Changes in shareholders’ equity ... 45
Cash fl ow statement... 46
FINANCIAL REPORTS – THE PARENT COMPANY Income statement ... 47
Balance sheets ... 48-49 Changes in shareholders’ equity ... 50
Cash fl ow statement... 51
Notes with accounting principles and comments to the fi nancial statements ...52-80 Proposed allocation of profi ts ... 81
Auditors’ report ... 82
OEM shares ... 84-85 Ownership structure ... 85
Key indicators for OEM shares ... 86
Ownership data ... 87
Share capital trend ... 87
Addresses ... 88-89 Defi nitions ... 90
1974 The agency company OEM Automatic AB is founded by the Franzén and Svenberg families. 1983 The company is introduced on the Stock Exchange’s OTC list. Sales amount to SEK 30 million. 1988 Sales exceed SEK 100 million for the fi rst time. 1998 Three corporate acquisitions completed. 2000 Jörgen Sahlin is appointed new MD. Acquisition of the group JMS Systemhydraulik 2003 The Group stabilises at sales 30% lower than 2001. Industri AB Refl ex is sold. 2005 Acquisition of Telfa. 2007 Acquisition of Crouzet, MPX Electra and Klitsö. 1993 The A. Karlson Group is acquired. 1997 OEM International and Cyncrona (also listed on the OTC list) merge. Cyncrona becomes a third subgroup. 1981 The fi rst overseas subsidiary is established in Finland. 1986 Industri AB Refl ex is acquired. 1989 The fi rst subsidiary outside Scandinavia is set up in the UK. 1991 OEM International is formed and be- comes the Group’s parent company. The electronics product area breaks away from OEM Automatic to form a separate company, OEM Component. 1996 New Group structure. The companies are divided into two sub- groups: OEM Industrial Components and OEM Systemteknik. 2002 OEM suffers signifi cant decline in sales due to telecom downturn. 1999 Four corporate acquisitions completed. 2004 OEM celebrates 30th anniversary Continued restructuring and stream- lining. Profi t climbs 55%. 2006 The Group establishes itself in the Czech Republic via the acquisition of EIG. Divestment of JMS System- hydraulik group OEM’s History Defi nitions This is OEM International OEM International is one of Europe’s leading industrial trading companies. The Group is comprised of 26 operating units with activities in 13 countries. The business concept is to offer the industry components and systems from leading manufacturers to industrial companies by utilising our excellent product and application expertise. OEM is a local alternative to the manufacturers’ own subsidiaries and can provide better marketing and sales conditions. The Group is organised into four company groups. Three of the groups are organised according to a concept with a well defi ned range of products that targets a specifi c market. The fourth group is a collection of other business activities organised under Development. OEM Automatic Components for industrial automation. Read more on pages 22-23 OEM Electronics Appliance and circuit board components and EMC/ microwave components Read more on pages 24-25 Cyncrona Production systems and components for electronics production Read more on pages 26-27 Development Bearings and bearing solutions, motors & transmissions, seals and pumps Read more on pages 28-29 10 20 40 30 50 80 70 60 OMX Nordic EUR PI 2003 2004 2005 2006 2007 2008 (SEK) OEM International B Share trends OEM has been listed on the Stockholm Stock Exchange Small Capital since 1983. More information about OEM is available at www.oem.se Read more on pages 84-85 OEM ELECTRONICS OEM Electronics AB Box 1025, Norrabyvägen 6B SE-573 29 TRANÅS Sweden Tel: +46 (0)75 242 45 00 Fax: +46 (0)75 242 45 09 info@oemelectronics.se www.oemelectronics.se OEM Electronics OY P O Box 122, Telekatu 6 FI-020101 TURKU Finland Tel: +358-207 499 300 Fax: +358-207 499 496 info@oemelectronics.fi www.oemelectronics.fi OEM Electronics PL ul. Parowcowa 6B PL-02-445 WARSZAWA Poland Tel: +48-22-86 32 722 Fax: +48-22-86 32 724 info@oemelectronics.pl www.oemelectronics.se CYNCRONA Cyncrona AB Tomtbergavägen 2 SE-145 67 NORSBORG, Sweden Tel: +46 (0)75 242 46 50 Fax: +46 (0)75 242 46 51 info@cyncrona.se www.cyncrona.com Cyncrona Oy Hannuksenpelto 12 FI-020101 TURKU Finland Tel: +358-(0)20 7528700 Fax: +358-(0)20 7528770 info@cyncrona.fi www.cyncrona.fi Cyncrona A/S Sindalsvej 21 DK- 8240 RISKOV, Denmark Tel: +45-87-42 66 66 Fax: +45-87-42 66 77 info@cyncrona.dk www.cyncrona.dk Cyncrona AS Postboks 2144 Bjørnstjerne Bjørnsonsgate 110 NO-3003 STRØMSØ Norway Tel: +47-32-21 05 80 Fax: +47-32-21 05 81 info@cyncrona.no www.cyncrona.no Cyncrona Baltic States Suur-Jõe 62 EE-80042 PÄRNU Estonia Tel: +372 510 05 05 baltic@cyncrona.fi www.cyncrona.com DEVELOPMENT Internordic Bearings AB Box 105 SE-571 22 NÄSSJÖ Sweden Tel: +46 (0)75 242 49 40 Fax: +46 (0)75 242 49 50 info@internordic.biz www.internordic.biz IBEC Aartsdijkweg 111 NL-2676 LE MAASDIJK Netherlands Tel: +31-174 52 51 00 Fax:+31-174 52 51 06 info@ibec.biz www.ibec.biz Indoma AB Box 319, Fridhemsvägen 25 SE-551 15 JÖNKÖPING, Sweden Tel: +46 (0)75 242 43 50 Fax: +46 (0)75 242 43 58 info@indoma.se www.indoma.se Telfa AB Box 120 SE-402 41 GÖTEBORG Sweden Goods terminal address: Karl Johansgata 158, SE-414 51 GÖTEBORG, Sweden Tel: +46 (0)75 242 44 50 Fax: +46 (0)75 242 44 95 info@telfa.se www.telfa.se ADDRESSES ❚ OEM ANNUAL REPORT 2007 89 DEFINITIONS ❚ OEM ANNUAL REPORT 2007 90
Earning capacity of total capital: Operating income plus fi nancial income as a percentage of average total capital.
Earning capacity of capital employed:
Operating income plus fi nancial income as a percentage of average total capital.
Capital employed refers to total assets minus non interest-bearing liabilities including deferred tax liabilities.
Earning capacity of shareholders’ equity:
Net profi t for the year as a percentage of average shareholders’ equity.
Average interest payable: Financial expenses as a percentage of interest-bearing liabilities.
Debt/equity ratio: Interest-bearing liabilities divided by calculated shareholders’ equity.
Calculated shareholders’ equity comprises shareholders’ equity plus minority interests.
Operating income/Sales: Operating income before depreciation/amortisation as a percentage of sales.
Profi t percent: Earnings after fi nancial income as a percentage of sales.
Profi t margin: Profi t before tax as a percentage of sales.
Capital’s turnover rate:
Sales divided by total assets.
Sales per employees: Sales divided by average number of employees.
Equity/assets ratio: Shareholders’ equity as a percentage of total capital.
Quick ratio: Current assets minus inventories as a percentage of current liabilities.
Earnings per share: The Group’s net profi t after deductions for both paid and deferred tax divided by the number of shares.
Shareholders’ equity per share:
Shareholders’ equity and minority interests divided by the number of shares.
Price / Earning (P/E) ratio: Quoted price as per 31 December divided by earnings per share.
Direct return: Dividend per share divided by the quoted price at year-end.
Sales per share: The Group’s sales divided by the number of shares on the market at year-end.
Sales increase per share: Increase of the Group’s sales per share.
Dividend/Profi t payout ratio: Proposed dividend in relation to the year’s profi t.
Dividend/Shareholders’ equity: Proposed dividend in relation to the Group’s sharehold- ers’ equity and the minority interests.
Cash fl ow per share: Cash fl ow for current operations divided by the number of shares.
Beta values: Measure of historical change in the share price in relation to the price fl uctuation of the general index.
Rate of turnover for shares: The number of shares sold during the year divided by the number of outstanding shares at year-end.
P/S ratio: Stock market value in relation to the Group’s sales.
P/E ratio: Quoted price as per 31 December divided by earnings per share.
Price/Shareholders’ equity: Quoted price divided by shareholders’ equity per share.
EV/Sales: Enterprise value (stock market value + net liability + minority interest) divided by the Group’s sales.
EBIT multiple: Enterprise value divided by the Group’s operating income after depreciation/
amortisation.
Direct return: Dividend per share divided by
the quoted price at year-end.
2007
New organisations in three new markets.
•
Three corporate acquisitions completed.
•
14% sales growth in traditional
•
industry sectors.
16% sales decline in the electronics sector.
•
9% increase in profi t before tax to SEK
•
139 million (127).
OEM Automatic
• increased sales by 16% to SEK 813 million (698) and profi t by 4% to SEK 94.6 million (91.0).
OEM Elektronic’s
• sales reached SEK
276 million (307) and profi t amounted to SEK 14.1 million (18.8).
Cyncrona’s
• sales reached SEK 188 million (245) and profi t amounted to SEK 3.6 million (14.2).
Development
• increased sales by 4% to SEK 221 million (213) and profi t by 18% to SEK 15.4 million (13.0).
OEM Motor, with reported sales of SEK 40.2 million, has been transferred from company group Development to company group OEM Automatic as of 2008.
The Group in fi gures
Summary 2007
OEM’s ongoing expansion activities in 2007 resulted in the following:
2007 2006
Net sales
*SEK m 1482 1448
Profi t after net fi nancial items
*SEK m 139.1 127.5
Profi t divested business unit (SEK m) 2.0 90.8
Profi t for the year (SEK m) 102.8 181.6
Earnings per share:
*(SEK) 4.34 3.92
Cash fl ow per share (SEK) 1.91 4.89
Equity per share (SEK) 22.88 27.65
Proposed dividend per share (SEK) 3.00 2.83
Earning capacity of shareholders’ equity (%) 17.6 32.5
Equity/assets ratio (%) 58.9 67.2
Quoted price at year-end (SEK) 42.90 63.00
Market capitalisation at year-end (SEK m) 994 1460
Average no. of employees
*(No.) 569 531
*) Remaining business units
2006 in bRief z oeM annual RepoRt 2007 5
Comments
6 oeM annual RepoRt 2007 z coMMents fRoM the ceo
Comments
from the CEO
Comments
coMMents fRoM the ceo z oeM annual RepoRt 2007 7
The Group now consists of 26 operating units, all of which generated profi ts in 2007. OEM’s market position is stronger after introducing the new product selec- tion from both existing and new suppliers.
Acquisitions also contributed to strength- ening the Group’s market position by cultivating signifi cant synergy effects.
hiGher profits
OEM Automatic reports yet another record-breaking year. Reported sales rose by 16% to SEK 813 million and profi t by 6% to SEK 94.5 million. Sales and profi tability improved on all markets due to strong demand. Costs in the amount of SEK 6 million for integrating the acquisition Crouzet AB are charged to the profi t for 2007.
Development increased sales by 4% to SEK 221 million and profi t by 25% to
SEK 16.3 million. Business activities in pumps and electric motors report
the best progress. New pump sup- pliers and access to Crouzet electric motors reinforced the product offer.
OEM Electronic’s sales dropped by 10% to SEK 276 million due to lost deals in 2006. Streamlining activities were carried out in the autumn that cut costs by SEK 6 million/
year, improved the fi nancial results and generated a profi t of SEK 15 million (18.8) for the whole year.
Cyncrona reports lower demands which pulled sales down to SEK 188 million (245). The autumn’s cost-cutting scheme cut costs by SEK 8 million/year, slowed the weakening in fi nancial results and generated a profi t of SEK 4.3 million (14.2).
In December, all warehouses were centralised to Sweden which now serves all markets.
acquisitions & new markets The outstanding 50% of the shares in Crouzet AB were acquired in February.
Active in the automation component segment, the company was incorporated into OEM Automatic AB and OEM Motor AB. The acquisition means an additional SEK 30 million in sales annually and negatively affected profi ts by SEK 1.5 million in 2007.
Battery supplier MPX Elektra ApS in Denmark was acquired in September.
The acquisition contributes about SEK 17 million in sales annually and had a marginal impact on profi ts in 2007.
The company was incorporated in OEM Automatic in the autumn and constitutes a new market segment in Denmark.
Simultaneously, the selection of products improves our competitiveness in terms of batteries on the Finnish and Swedish markets.
Klitsö Processtechnic AS in Denmark sells valves and pneumatic systems and was acquired in December. The acquisition
contributes about SEK 88 million in sales annually and had a margin impact on profi ts in 2007. This acquisition enables us to en- hance our expansion potential in Denmark.
OEM expanded in new markets in Slovakia, Latvia and Lithuania in 2007.
This means that we cover the entire Baltic market and are making inroads south into Eastern Europe together with our Poland and Czech-based business units.
prepared for the future Strong, long-standing relationships with suppliers and our customers’ genuine trust cultivates excellent conditions for ongoing organic growth.
The strong balance sheet coupled with streamlined processes facilitate acquisitions and geographic expansion. The organisa- tion’s dedication enables us to effectively incorporate acquisitions in the Group.
‘thank you’ to all employees OEM’s achievements are based on our ambitious employees who have created competitive business units through their dedication and conscientiousness.
Ongoing growth relies on the will to accept new challenges and see opportuni- ties in new situations. I want to take this opportunity to extend a sincere thank-you to all employees for their excellent efforts throughout the year.
Jörgen Zahlin
Sales rose by 2% to SEK 1,482 million and profi t by 9% to SEK 139 million in
2007. A sound demand and new acquisitions resulted in a 14% increase in sales
for the business units that target traditional industry sectors. Weaker demand
from the electronics sector caused a 16% decline in sales for this segment.
8 oeM annual RepoRt 2007 z Vision, business concept and business logic
Vision vision
OEM International is to be a leading player in industrial trading in northern Europe.
to achieve this vision means:
constantly improving our level of
•
knowledge and service to at the very least conform to customer expectations making our suppliers market leaders
•
effi ciency makes us more profi table
•
than our competitors
our employees are able to realise
•
their ambitions.
industrial tradinG
Our product range spans from basic mechanical components such as seals and couplings to complete production systems for circuit boards. OEM trades in products to which the company adds value and where the company has the potential to gain a substantial market share.
We constantly expand our range by adding new products and discontinuing or replacing unprofi table products.
Each company markets a clearly defi ned product range which, coupled with the added value of the organisation, forms a brand concept.
northern europe
Most of OEM’s business activities are in Sweden but it views northern Europe as its market. The company is active in Sweden, Finland, Norway, Denmark, Poland, the Czech Republic, Slovakia, the Baltic coun- tries, the UK and Holland. In addition, the company has a logistics and quality company in China. While there is great potential for growth on these markets, new geographical markets will be constantly evaluated as the brand concepts are reinforced.
business concept
OEM International is to be a leading player in industrial trading in northern Europe.
Our product range is to consist of industrial components and systems from suppliers that are each specialists in their fi elds.
The operating units are to adapt to the conditions that apply in each respective business area, and effectively satisfy the interests of customers, suppliers, employees and shareholders.
business loGic
The OEM Group’s operating units serve as an alternative to the suppliers’ own local sales organisations. The Group collaborates
with around 300 different suppliers and has some 20,000 buying customers. OEM is responsible for marketing and sales of the products the company trades.
suppliers customers
an alternative to suppliers’
own sales orGanisations
To our suppliers, OEM is a partner that has:
the fi nancial strength to make
•
market investments
knowledge of the market in question
•
national presence
•
To our customers, collaboration with OEM means:
access to a broad, extensive range of
•
products from specialised manufacturers quick and high delivery capacity via
•
effective warehouses
the option to reduce the number
•
of suppliers.
in-depth product and application knowledge
•
An effi cient logistics apparatus enables us to adapt purchasing volumes, stock levels and transport methods for maximum competitiveness.
Vision, business concept
and business logic
Vision, business concept and business logic z oeM annual RepoRt 2007 9
Vision
OEM’s broad, extensive product selection allows the company to customise its offers to best suit the needs of our customers.
At the same time, suppliers gain access to customer groups that they themselves have difficulty reaching.
Group affiliation strenGthens competitiveness.
Belonging to a group with a clear focus improves the conditions for the company to grow. Group affiliation means:
Economies of scale
A centralised infrastructure and administra- tion contributes to conditions that allow the
operating units to focus on business and together with group affiliation, facilitates expansion in new geographical markets.
Coordination
Logistics, range development and market communication is coordinated at brand concept level which intensifies our competitiveness and makes us more cost effective.
Spurred by each other’s achievements The business units are regularly com- pared to foster cross-company learning and internal ranking lists spurs better performance.
Opportunities for employees to grow within the Group
Developing a company means developing
people. As the company develops, career
opportunities are created for employees
both within their present business units
and within the rest of the Group.
Growth
10 oeM annual RepoRt 2007 z gRoWth stRategY orGanic Growth
OEM’s target is a 10% organic growth.
This will be achieved by:
Developing our product range
•
Expanding our market shares
•
Focus on developing customer/
supplier relationships, product offers and service will improve competitiveness and increase market shares.
Organic growth is evidence of satisfi ed customers and that what we offer is attrac- tive to new customers. Another essential aspect of organic growth involves start-ups with new suppliers.
Organic growth over time is necessary to justify our business units.
GeoGraphical expansion New opportunities for expansion are created by launching established brand concepts on new markets.
Over the past years, OEM has set up operations in the Baltic countries, the Czech Republic and Slovakia.
OEM uses its presence in markets where the company already has other business operations to expand geographically.
acquisitions
Acquisitions are a central part of the expansion throughout the entire Group’s development. OEM has both the resources and the fi nancial backing to continue to evaluate and make acquisitions. The requirement for every acquisition is that it has the potential to evolve positively within the OEM Group and that our integration strategy affords both economy of scale and aggressive initiatives.
acquisitions can be made at three different levels:
Supplementary acquisitions
A company or product range is incorpo- rated into an existing business unit.
Complementary acquisitions
A company that fi ts in and is run as an individual company within Development.
Strategic acquisitions
A brand-new product area with consider- able sales that becomes a new concept, or a company in a new geographical market.
Growth strategy
Growth is central for the OEM Group. Our growth strategy is based on
three parts: Organic growth, Geographical expansion and Acquisition.
financial taRgets z oeM annual RepoRt 2007 11 the tarGets for one
business cycle are:
15% annual growth in profi t
•
20% return on equity
•
Equity/assets ratio not lower than 35%
•
The strategy to continue to achieve these goals entails establishing a balance between growth and profi ts. Changes in
external factors, fl uctuations in the economy and acquisition opportunities are all factors that mean that the Group must be prepared at all times to adjust to new circumstance and willingly implement changes that make us more competitive.
Over the last three years, OEM has realised the following targets:
Financial targets
OEM’s objective is to achieve a good return on shareholders’ equity with limited fi nancial risks during a period of stable growth.
0 10 20 30
2005 2006 2007 25%
15%
1%
0 15 30 45
2005 2006 2007 19,7%
32,5%
17,6%
0 25 50 75
2005 2006 2007 62% 67%
59%
Growth of profi t Return on shareholders’ equity
Equity/assets ratio The growth in profi t
is calculated minus
divestment of the
hydraulic segment and
real estate property.
12 oeM annual RepoRt 2007 z eMploYees
Employees Employees Our employees are OEM’s single greatest
asset. We are convinced that when our employees grow, so does the company.
Consequently, we feel it is important to create opportunities for our employees to develop and realise their ambitions.
We reinforce our competitiveness with cutting-edge expertise. It is our employees that produce results and build long-term value for our customers, suppliers and shareholders.
competence development To attract and retain qualifi ed employees, OEM must offer attractive employment conditions and good opportunities for per- sonal growth. Investing in our employees’
competence development is also a natural aspect of our ongoing quality efforts.
Competence development efforts are primarily conducted by the respective business units which organise various types of in-house training programmes.
Needs and preferences are mapped out through the personal performance dia- logues held annually between employees and immediate supervisors. An individual competence development plan for each employee is prepared in conjunction with this evaluation.
recruits and careers
Our ambition is to internally recruit 75%
of our new managers and specialists.
A propensity to change, curiosity and a goal-oriented approach are characteristics that ensure our employees an interesting future and careers. We consider it a major achievement when we can wish an employee success in a new position within the company.
trainee proGrammes
OEM has been running a two-year trainee programme since 2006. The purpose is to secure the supply of employees in key positions and increase the presence of Swedish executives in our foreign companies. The programme lays a sound foundation for a successful career within the OEM Group.
corporate culture
OEM currently has 26 operating units comprised of cultures that are infl uenced by their employees. All units do however conform to the Group bywords, namely dedication, openness, goal orientation, positive attitudes and modesty. It is natu- ral for us to share our experiences and knowledge in order to create a learning
and positive climate. The objective is for employees to feel a sense of job satisfac- tion, community and security.
Our ambition is to cultivate a strong sense of commitment in the company and pride in working at OEM.
We believe that openness between employees and managers generates candour and improves the quality of personal performance dialogues.
Mutual trust is conducive to making constructive criticism and praise a part of the day-to-day communication.
leadership
For OEM, leadership is about being a role model and sharing knowledge and insight.
Defi ning distinct goals and sub-goals and drawing up individual goals and plans together with the employees in order to achieve these goals. The ability to coach and develop our employees at an individual level since each employee has unique needs.
The will to learn and succeed is to serve as a lodestar for all employees and be encouraged by the managers. Managers and employees are mutually responsible for contributing to a successful corporate climate. Reciprocal demands are to lead
Employees
OEM needs skilled, competent employees in order to live up to its vision
of becoming a leading player in the industrial trading sector.
to constructive activities that make us even better partners for our customers.
work environment and health A good, suitable working environment is a prerequisite for employee satisfaction and good performance. OEM encour- ages its employees to practice a healthy lifestyle by participating in various fi tness activities and work with the contracted preventive healthcare service.
equal opportunities OEM is active in an industry that traditionally has an unequal distribution between men and women. Most of the women in the Group work in fi nance, administra- tion and market- ing. Therefore, we are working to attract more female applicants to male-dominated positions.
eMploYees z oeM annual RepoRt 2007 13
Employees to constructive activities that make us
Employees to constructive activities that make us
0 50 100 150 200
0 50 100 150 200
<25 26-35 36-45 46-55 56-65 (year) 50
235
177
74 33
0 50 100 150
0 50 100 150
<1 1-3 4-7 8-11 >12 (year) 92
172
101 91
113
Age distribution (no. of employees)
Period of employment (no. of employees) Key indicators employees
Average no. of employees 569
No. of women 123
No. of men 446
Sick leave person/yr 7
Training costs/employee (SEK) 5762 Fitness costs/employee (SEK) 1307
facts
facts
Quality, the environment
14 oeM annual RepoRt 2007 z QualitY, the enViRonMent and ethics
OEM’s all-embracing quality policy is that products and services must meet or exceed customer expectations. A central aspect of our quality efforts is a close collaboration with our customers and suppliers.
To maintain an improvement process re- quires constant dialogue with our suppliers on subjects ranging from product quality and product development to delivery time and environmental issues. This is essential toward upholding set quality targets. At the same time, we must have an intense dia- logue to follow-up the customer-perceived quality and, together with our customers, identify areas for improvement.
the environment
OEM’s environmental policy dictates continuous efforts to minimise our exter- nal environmental impact. Environmen- tal efforts are governed by legal
requirements as well as what is techni- cally possible and fi nancially feasible.
The aim is to reduce the impact of our business on the environment in both the short and long term.
All companies sell components and systems from manufacturers all over the world. This means that the greatest im- pact on the environment stems from:
goods and personnel transports
•
the presence of environmentally-
•
damaging substances in products printing and distribution of
•
product catalogues packaging materials
•
offi ce heating, lighting and cooling.
•
transports and company cars OEM pressures forwarding agents to aim for alternative fuel and environmentally- classifi ed cars. As per the Group’s own company car policy, only cars classifi ed in line with Environmental Class 2005 (MK2005) will be supplied. OEM en- courages choosing ethanol-driven cars.
our supplier requirements Our customers often ask questions about whether the products contain substances that have an impact on the environment.
We review the environmental efforts of our suppliers when we visit.
Our certifi ed companies have special routines for supplier reviews.
Quality, the environment & ethics
Our objective is that customers will associate OEM with good products, high
delivery assurance, good technical support and a professional, positive reception.
Quality, the environment
QualitY, the enViRonMent and ethics z oeM annual RepoRt 2007 15 printinG and distribution of
product cataloGues
The Group prints and distributes about 50,000 product catalogues and brochures each year. When purchasing printing services, we give top priority to environ- mentally-certifi ed printers. To the greatest possible extent, OEM strives to print on environmentally-friendly paper. We will gradually expand our online product information, which will reduce the number of printed catalogues.
ethics
OEM’s business activities are based on long-term employee, supplier and customer relationships. The values of the management and our employees contribute
to cultivating these relationships.
Consequently, it is vital that ethical issues are regularly discussed.
One such ethical issue relates to the certifi cation of factories that OEM col- laborates with in China. Among other things, this entails investigating the oc- currence of child labour. Our day-to-day business is characterised by respect for employees and business partners.
iso14001 environmental certified companies
The following companies have ISO 14001 environmental certifi cation:
OEM Automatic AB OEM Electronics AB Internordic Bearings AB Indoma AB
Telfa AB
iso9001 quality certified companies
The following companies have ISO9001 quality certifi cation:
OEM Automatic AB OEM Electronics AB Internordic Bearings AB Indoma AB
Telfa AB
Quality, the environment & ethics
Board of Directors
The Board of Directors of OEM Interna- tional (publ) is comprised of seven regular members and three deputy members elected by the Annual General Meeting.
1 3
2
4 5
6 Six Board meetings were held in
2007, all of which were recorded in the minutes. The work of the Board complies with the rules of procedure adopted by the Board. Once a year, the principal auditor attends and reports on the auditing process.
Decisions and the division of responsibility between the Board and the Managing Director are regulated in the written instructions for the Managing Director. Proposals regard- ing remuneration to the Board are presented to the Annual General Meeting for decision. The Board re- ceives no bonuses. The amounts and other benefits are reported in Note 7.
Auditors are nominated and elected by the Annual General Meeting for a four-year tenure. The auditors’ work is invoiced within negotiated price frames.
nomination and
remuneration committee The Nomination and Remuneration Committee is comprised of Chairman of the Board Jan Svensson as well
as Board members Hans Franzén, Orvar Pantzar and Agne Svenberg.
The Committee nominates members to the Board and issues guidelines for remuneration to the Managing Director. The Board approves remu- neration negotiated by the Chairman of the Board and the Managing Director. The Committee convened once in 2007.
Remuneration to other members of Senior Management is determined by the Managing Director in consultation with the Chairman of the Board.
16 oeM annual RepoRt 2007 z boaRd of diRectoRs
JAN SVENSSON (1)
Born 1956. Chairman of the Board since 2007.
Not employed by OEM. Mechanical Engineer and MBA.
Other appointments: MED and CEO of Investment AB Latour. Board member Munters AB, Loomis AB, Oxeon AB and Fagerhult AB.
Number of shares: 3,000 OEM Class B HANS FRANZÉN (2)
Born 1940. Chairman of the Board 1992-2006.
Board member since1974. CEO until 31 Dec 2001.
Engineer. Other appointments: Chairman of the Board, Tranås Rostfria AB, TR Equipment AB, Tranås Resebyrå AB, Aqua Safety Wall Asw AB, Linktech AB, Montico AB and Handelsbanken’s regional board in Tranås.
Board member, Allt om Bostad i Skandinavien AB, OPIC Com AB, Ovacon AB, Bomarknadsbolaget i Skandinavien AB and IB Medical AB. Number of shares:
707,376 OEM Class A and 639,090 OEM Class B GUNNAR ELIASSON (3)
Born 1951. Board member since 2000.
Business Administrator. Not employed by OEM.
Other appointments: Chairman of the Board, Oak Capital Group AB, Norden Finansforum AB and Ideo- metrics AB. Number of shares: 21,000 OEM Class B LARS-ÅKE RYDH (4)
Born 1953. Board member since 2004. M.Sc.
Engineering. Not employed by OEM. President and CEO of Nefab AB. Other appointments: Handels- banken Region Eastern Sweden and Nolato AB.
Number of shares: 3,000 OEM Class B ULF BARKMAN (5)
Born 1957. Board member since 1997. Business Administrator. Not employed by OEM. Number of shares: 42,000 OEM Class B
AGNE SVENBERG (6)
Born 1941. Board member since 1974.
Managing Director up until 29 February 2000. Engineer Other appointments: Chairman of the Board, EG:s El o Automation AB, Personality Gym AB and ISP AB.
Number of shares: 665,400 OEM Class A and 238,530 OEM Class B
ORVAR PANTZAR (not pictured) Born 1939. Board member since 1997.
Founder of Cyncrona AB. Engineer. Not employed by OEM. Other appointments: Board member, Next Gen- eration System AB. Number of shares: 1,627,320 OEM Class A and 2,802,360 OEM Class B
DEPUTY BOARD MEMBERS TOMAS FRANZÉN
Born 1962. Deputy member since 1997. MD and CEO of Eniro AB. Graduate engineer. Not employed by OEM. Other appointments: Board member, Eniro AB, BTS AB, Securitas Systems AB, Teligent AB and Inspecta OY. Number of shares: 19,500 OEM Class B INGER SVENBERG
Born 1937. Board member 1974-1997.
Deputy member since 1997. Not employed by OEM.
Number of shares: 558,000 OEM Class A and 237,456 OEM Class B
JERKER LÖFGREN
Born 1950. Deputy member since 2003.
Head Counsel Carnegie Private Banking.
Not employed by OEM. No OEM shares.
AUDITOR:
KPMG Bohlins AB. Principal auditor:
Niklas Bengtsson Authorised Public Accountant
boaRd of diRectoRs z oeM annual RepoRt 2007 17
18 oeM annual RepoRt 2007 z senioR ManageMent
Senior Management
OEM International’s ambition is to develop the operating units through
growth and profitability that surpasses our competitors. In addition to
succinct management-by-objectives, this means also implementing
a culture and strategy that produces long-term, stable business units.
senioR ManageMent z oeM annual RepoRt 2007 19
Jörgen Zahlin has been the Managing Director of OEM International since 2000 and is responsible for the company’s day-to-day management, which includes all issues not reserved for the Board.
The Managing Director’s decision- making rights in terms of investments, corporate acquisitions/divestments and fi nancing issues are regulated by the regulations defi ned by the Board.
The Group’s senior management consists of the Managing Director, Finance Director and four Directors in charge of the Group’s largest business units.
Senior Management works to develop the Group in line with the vision, business concept and strategy defi ned by the Board.
Governance
The company groups OEM Automatic, OEM Electronic and Cyncrona have separate boards over which the Group’s Managing Director presides as chairman.
These boards are put together based on the needs of each company group.
The board of an operating unit consists normally of the business director, controller and the Managing Director.
Group-wide resources
There are resources within the Group that work with specifi c Group-wide functions. The resources cover fi nancial control, business systems, tele/data communication, market communication, quality&, the environment and logistics.
JÖRGEN ZAHLIN (1)
Born 1964. Managing Director of OEM International AB as of 1 March 2000. CEO since 1 Jan 2002.
Group employee since 1985. Engineer.
Number of shares: 171,500 OEM Class B JAN CNATTINGIUS (2)
Born 1955. Finance Director.
Group employee since 1985. Economist.
Number of shares: 10,000 OEM Class B URBAN MALM (3)
Born 1962. Managing Director of OEM Electronics AB.
Group employee since 1983. Engineer.
Number of shares: 900 OEM Class B FREDRIK TENGSTRAND (4)
Born 1966. Business Director Development.
Group employee since 1991. Engineer.
Number of shares: 1,200 OEM Class B MIKAEL THÖRNKVIST (5)
Born 1968. Managing Director of OEM Automatic AB.
Group employee since 1990. Engineer.
Number of shares: 3,000 OEM Class B JENS KJELLSSON (6)
Born 1968. Foreign Business Director Group OEM Automatic. Group employee since 1990.
Engineer. Number of shares: 7,700 OEM Class B
1 3
4
5
2 6
Group structure
20 oeM annual RepoRt 2007 z gRoup stRuctuRe
Group structure
The Group is organised into four company groups. Three groups are organised according to their distinct brand concepts and one company group, Development, is a collection of other business activities.
OEM Automatic
Components for industrial automation.
Read more on pages 22-23
OEM Electronics
Appliance and circuit board components and EMC/microwave components.
Read more on pages 24-25
Cyncrona
Production systems and components for electronics production Read more on pages 26-27
Cyncrona 12.5%
OEM Electronics 18.4%
(Share of Group sales in %) OEM Automatic 54.3%
Development 14.8%
Group structure
gRoup stRuctuRe z oeM annual RepoRt 2007 21
Company groups Products No. of countries
OEM Automatic Components for industrial automation. 11
OEM Electronics Electronic and electromechanical components 3
Cyncrona Equipment and material for electronics production 5
Development Other business activities 4
OEM Electronics
Appliance and circuit board components and EMC/microwave components.
Read more on pages 24-25
Cyncrona
Production systems and components for electronics production Read more on pages 26-27
Development
Bearings and bearing solutions, motors & transmissions, seals and pumps
Read more on pages 28-29
22 oeM annual RepoRt 2007 z oeM autoMatic
Automatic
The Group made three acquisitions in 2007.
Crouzet AB contributed about SEK 30 million to the Swedish business sales, while MPX ApS and Klitsö Prosesstechnic A/S contribute sales of SEK 17 million and SEK 88 million respectively to the sales in Den- mark over the whole year. The acquisitions also offer expansion opportunities in other geographical markets in terms of products.
Excluding the acquired units, the group’s reported sales growth is 10%.
Business organisations have been set up in Latvia, Lithuania and Slovakia as
part of the group’s geographical expansion plan. Moreover, the group broadened its collaboration geographically with several existing suppliers while concurrently introducing fi ve new suppliers in 2007.
Goals and strateGies
The goal is a growth rate that exceeds 10% per year. OEM Automatic’s growth strategy is built around organic growth comprised of greater market shares, broader supplier partnerships and ven- tures in new markets.
The strategy is
Strong local market presence with
•
face-to-face sales
Coordinate logistics, market communi-
•
cation and range development activities.
Enhance the customer offer by expand-
•
ing our product range
Represent key suppliers on all markets
•
Geographical expansion in northern
•
and eastern Europe
BUSINESS ACTIVITIES
OEM Automatic sells industrial automation components in eleven markets. Customers include machine and appliance manufacturing industries, wholesalers and strategic end users. OEM Automatic represents some 80 suppliers that are specialists and leaders within their respective fi elds. Marketing is primarily conducted through face-to-face sales where OEM Automatic provides the customer with product and application knowledge.
Products
Components for industrial automation within the busi- ness areas of Electrical Machinery, Electrical Cabinets, Safety, Cables, Motors, Pressure & Flow and Pneumatics.
Geographical markets
OEM Automatic has operations in Sweden, Norway, Denmark, Finland, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and the UK.
facts facts
Sales climbed by 16% to SEK 813 million (698) Profi t rose 4% to SEK 94.6 million (91.0)
54,3%
Share of Group sales
OEM Automatic
2007 was yet another record-breaking year during which all business units made positive progress. The completion of three acquisitions coupled with organic growth generated higher sales and profi t.
Effective 2008, OEM Motor AB is part of the OEM Automatic company group. OEM Motor AB is not included in the above sales and profi t fi gures.
0 200 400 600 800
2005 2006 2007 605
813 698
Sales (SEK m)
0 25 50 75 100
2005 2006 2007 74,7
91,0 94,6
Profi t (SEK m)
0 100 200 300
2005 2006 2007 248
307 270
No. of employees
oeM autoMatic z oeM annual RepoRt 2007 23
Automatic
markets and customers Demand has remained sound on all markets. On the whole, the market for automation components in Europe is relatively stable and expected to grow about 2-3% per year over a business cycle.
Markets in eastern Europe have a growth rate that exceeds 5%.
As most of our customers have small to medium-sized volume production, there is no drastic transfer of production to low-cost countries.
competitors
Competitors include manufacturers such as Schneider Electric, ABB and Omron as well as trading companies such as Indutrade and Addtech.
Effective 2008, OEM Motor AB is part of the OEM Automatic company group. OEM Motor AB is not included in the above sales and profi t fi gures.
Jens Kjellsson, Business Director Group OEM Automatic and Mikael Thörnkvist, Managing Director OEM Automatic AB
24 oeM annual RepoRt 2007 z oeM electRonics
Electronics
Lower demands on the Swedish market, particularly from our EMS
*customers caused an overall decline in sales for the Swedish business unit, dropping from SEK 253 million to SEK 217 million.
Adjustments to the business and initia- tives in the business area Keyboard &
Display, which reported a 35% increase in sales climbing up to SEK 44 million, helped the company to recover its profi ts in the fi nal quarter.
New power supply and communica- tion solution suppliers were introduced
in 2007 generating sound growth within these fi elds.
The trend for OEM customers has been positive with higher sales in such products as LED lighting and displays.
The business units in Finland and Poland improved sales by 13% and 73% respectively and both new suppliers and product seg- ments were launched on these markets.
Goals and strateGies
Our goals include a growth rate that exceeds 10% per year and to become the
strongest player on the electronic compo- nents market in northern Europe.
The strategy is:
Strong local market presence with
•
face-to-face sales
An organisation distinguished by
•
service-mindedness, excellent applications knowledge and various types of logistics solutions.
Enhance our customer offer by
•
expanding our product range Streamlining through coordination
•
BUSINESS ACTIVITIES
OEM Electronics is comprised of three companies active in the sale of electronic and electromechanical compo- nents. Our customers include appliance and electronics manufacturers as well as strategic electronic manu- facturing services (EMS customers) in northern Europe.
The company represents some 60 suppliers that are each specialists in their respective fi elds. Marketing is primarily conducted through face-to-face sales where OEM Electronics provides the customer with product and application knowledge alongside logistics solutions.
Products
Appliance and circuit board components and EMC/microwave components.
Geographical markets
OEM Electronics has operations in Sweden, Finland and Poland.
*) EMS customers = Electronic Manufacturing Services
facts
Streamlining through coordination
facts
Streamlining through coordination
facts
Sales amounted to SEK 276 million (307).
Profi t amounted to SEK 14.1 million (18.8).
OEM Electronics
Lower demand in Sweden coupled with changes in the prod- uct offer caused sales to drop in 2007. The business units in Finland and Poland report positive growth.
18,4%
Share of Group sales
0 100
200 300 400
305
2005 2006 2007 307 276
Sales (SEK m)
0,0 7,5 15,0 22,5 30,0
24,7
2005 2006 2007 18,8
14,1
Profi t (SEK m)
0 25 50 75 100
78
2005 2006 2007
85 85
No. of employees
oeM electRonics z oeM annual RepoRt 2007 25
Electronics
markets and customers Manufacturing assignments for EMS customers is moving from country to country to a greater extent, which creates instability in the Nordic electronics market.
Growth from the Polish business units continues to be good.
competitors
Competitors include both the major, global component distributors Arrow and Avnet, as well as industrial trading companies such as Addtech, Lagerkrantz Group and Elektronikgruppen. Moreover, manufacturers’ own sales companies rank among our competitors.
*) EMS customers = Electronic Manufacturing Services
Urban Malm. Business Group Director OEM Electronics.
Cyncrona
26 oeM annual RepoRt 2007 z cYncRona
Sales fi gures in Finland dropped by SEK 68 million after the company’s largest customer started working on commission and the number of equipment orders were fewer than in previous years.
After a period of low demand in Sweden and Denmark, several deals were settled in these markets. Demand in Norway and the Baltic countries is still very good.
The material for PCB manufacturing product area was divested in 2007. Measures to adapt the organisation to lower sales were carried out the second half of the year.
Cyncrona’s largest supplier, Fuji, launched a new piece of equipment (the XPF) that has created new business opportunities. A partnership has been established with Omron, the leading inspection equipment supplier in the world. This partnership resulted in new business valued at about SEK 5 million.
We took over representation for Fein- focus, the leading x-ray equipment com- pany in the Nordic region, which means about SEK 8 million in additional sales.
As of 2008, the Swedish business unit
manages warehouses and logistics for the entire Group. Each country organisation is in charge of sales on their own markets and product specialists are on stand-by to support all markets.
Each country organisation has its own support staff and, depending on work- load and need for expertise, the support organisation can work in other countries.
Goals and strateGies
Cyncrona is to be the leading distributor of equipment, support and material for
BUSINESS ACTIVITIES
Cyncrona is comprised of fi ve companies that sell electronics production equipment and material.
Cyncrona represents some 20 leading suppliers, each of which are specialists in their fi elds.
Support is a signifi cant aspect of our business activities and includes training, installation, start- up and service. Marketing is primarily conducted through face-to-face sales where Cyncrona supplies the customer with product and application knowledge.
Products
Production equipment, support and electronics production material.
Geographical markets
Cyncrona has operations in Sweden, Finland, Denmark, Norway, Estonia, Latvia and Lithuania.
facts facts
Sales amounted to SEK 188 million (245).
Profi t amounted to SEK 3.6 million (14.2).
Cyncrona
Signifi cant decline in sales and over-reliance on a major customer in the Finnish market caused the Cyncrona companies’ profi t to drop in 2007.
12,5%
Share of Group sales
0 100 200 300
2005 2006 2007 284
245
188
Sales (SEK m)
0 5 10 15 20
2005 2006 2007 18,5
14,2
3,6
Profi t (SEK m)
0 20 40 60 80
2005 2006 2007
59 55
57
No. of employees
Cyncrona
electronics production in the Nordic and Baltic countries. Our ambition is to even- tually achieve a 7% profi t margin over 7% through a streamlined organisation and strong product offer. Local presence will create strong customer relations and Group-wide resources promise a high level of effi ciency.
markets and customers
Demand on the Finnish market was low in general in 2007. Other Nordic markets and the Baltic countries report stable demand. Our belief is that demand will be on par with last year throughout 2008 and we plan for higher profi tability with retained sales levels.
competitors
Cyncrona competes primarily with such manufacturers as Siemens and Mydatafor surface-mounting equipment and with a handful of local distributors, including Scanditron, HIN and Sincotron for other parts of the product range.
Pictured left to right: Lassi Peurakoski, Cyncrona Finland, Clas Kagerup,
Cyncrona Sweden and Kjell Gunnar Koppangen, Cyncrona Norway cYncRona z oeM annual RepoRt 2007 27
Developmen Development is comprised of business units that are in various stages of growth
and aim to either evolve into a strong brand concept or be modifi ed to merge with another business unit. The group constantly evaluates opportunities for ac- quisitions within affi liated product areas, but also within brand new product areas.
telfa
Sales climbed by 6% to SEK 50 million.
The phase out of product area fi lling machines had a negative impact on sales in
the range of SEK 3 million. Several new suppliers were added in 2007, including Milton Roy, world leader in volume pumps, SAER in the fi eld of water treat- ment and Flojet, maker of small process pumps. The new suppliers have had a marginal impact on the year’s sales fi gures.
indoma
Sales climbed by 2% to SEK 40 million.
Efforts to increase the company’s business dealings with engine builders and reduce the share of aftermarket helped to improve
profi tability. The company is gaining market shares and reports strong growth among its OEM customers.
oem motor
Sales climbed by 34% to SEK 40 million.
Sales of almost SEK 4 million were gained in conjunction with the Crouzet acquisi- tion. Other growth stems from growing market shares.
Collaboration gradually intensifi ed with company group OEM Automatic’s units that are active in the motor segment.
BUSINESS ACTIVITIES
Development is comprised of business units that are in various stages of growth and aim to either evolve into a strong brand concept or be modifi ed to merge with another business unit. The group constantly evaluates opportunities for acquisitions within affi liated product areas, but also within brand new product areas.
Products
Pumps, seals, roller bearings, slide bearings and plain bearings, as well as motors and transmissions.
Incorporated units
Telfa, Indoma, OEM Motor, Internordic Bearings and IBEC.
facts facts
Sales climbed by 4% to SEK 221 million (213) Profi t rose 18% to SEK 15.4 million (13.0)
Development
Company group Development boosted both sales and profi t due to a sound demand and streamlining initiatives.
14,8%
Share of Group sales
0 50 100 150 200 250
162
2005 2006 2007 213 221
Sales (SEK m)
0 5 10 15 20
8,4
2005 2006 2007 13,0
15,4
Profi t (SEK m)
0 25 50 75 100
83
2005 2006 2007 104 107
