Financial target: 
Average sales growth shall amount to a minimum of 10% per year over a business cycle. Growth is to be achieved organi- cally as well as through acquisitions.

Target achievement: 
During the last five-year period, average annual sales growth was 14%. Net sales rose 9% in 2019. Adjusted for divestments, sales growth was 10%. The increase for comparable units was 2%, acquisitions contributed 7%, and the effect of divestments was -2%. Currency movements had a posi- tive effect on net sales of 2%.

Financial target: 
The EBITA margin shall amount to a minimum of 12% per year over a business cycle.

Target achievement: 
The EBITA margin has averaged 11.9% over the last five years. The EBITA margin in 2019 was 12.7%.

Financial target:

Target achievement: 
During the last five years the average return on operating capital was 20%. In 2019 the return was 19%. Adjusted for IFRS 16 Leases, the return on capital employed should have been 20%.

Financial target: 
The net debt/equity ratio shall normally not exceed 100%.

Target achievement: 
During the last five years, the net debt/equity ratio at the end of each year year ranged from 63% to 85%. The net debt/equity ratio at year- end 2019 was 85%.

Financial target: 
The dividend payout ratio shall range from 30% to 50% (previ- ously 60%) of net profit.

Target achievement: 
During the last five years, the dividend payout ratio has been an average of 41%, including the proposed dividend. For 2019, a dividend of SEK 4.75 has been proposed, corresponding to 39%.

Strategy: Growth will be achieved organically and through acquisitions:

• In existing and new technology areas
• Through a broadened customer offering based on relevant knowledge, such as extended support, training and other aftermarket services
• Via innovation and development of both products and offerings
• Geographically in selected markets.

Performance in 2019: Growth has occurred both organically and via acquisitions. Geographic spread of the year’s acquisitions has been good, occurring primarily in both existing and new areas of technology.

Strategy: Indutrade acquires well-managed, successful and typically owner-led industrial companies whose management teams are eager to continue running and growing the business. The companies manufacture or sell products in distinct markets. We can also make smaller, add-on acquisi- tions through our existing companies to strengthen market positions. A central feature of the acquisition process is to ensure that there is a shared foundation of values and ethical principles. All subsidiaries are expected to follow our Code of Conduct.

Effect: Indutrade acquires companies with the aim of developing them over the long term. We do not change the companies’ names and neither do we merge com- panies. This assures the seller that the company will be able to, even over the long term, con- tinue as a player in the market.

Performance in 2019: The acquired companies have a skilled management team with true entrepre- neurial spirit and vast technical expertise. Several of the acquisitions made in 2019 were add-on acquisitions aimed at fur- ther strengthening our market position in attractive segments.

Strategy: Indutrade focuses on sales of products in niches in which it can attain a leading position.

Effect: Strong market positions are often a prerequisite for good profitability and being able to attract the best suppliers, all of which further solidifies Indutrade’s position.

Performance in 2019: Several of Indutrade's subsidiaries have leading positions within their niches. They were able to maintain those posi- tions and many were even able to strengthen them in 2019.

Strategy: Indutrade gives priority to suppliers who, through own product devel- opment, provide market-leading, high-quality products with a high- tech content. A partnership with an Indutrade company should be the most profitable way for suppliers to sell their products.

Strategy: Indutrade has many companies with proprietary products and brands. The products should have a high-tech content, while the companies should have a strong market position and good growth potential.

Effect: Companies with proprietary products and brands provide bal- ance to the Group’s technology sales companies. Since 2004 the share of companies with proprie- tary products has grown by 31 percentage points, and in 2019 they accounted for 40% of con- solidated net sales.

Performance in 2019: A large portion of the companies acquired in 2019 have own brands, which is entirely in line with our strategy to increase the share of companies with proprietary products.

Strategy: The Group’s companies give priority to customers with a recurring need that are active in industries where the prospects are favourable for maintaining competitive production in their home markets. Many of these industries are characterised by a high degree of automation, high distribution costs and/or large start-up investments.

Strategy: Indutrade’s product and service offering, which is aimed at both end users and OEM customers (i.e. customers that integrate Indutrade’s products in their own products), should have a high-tech content and incorporate a high level of service and qualified technical consulting. Indutrade’s sales representatives must have a high level of technical expertise in their respective niches and a depth of knowledge about the customers’ production processes.

Effect: This makes Indutrade an attractive business partner that creates added-value for customers and suppliers alike.

Preformance in 2019: The companies continuously strive to establish closer ties with customers and acquire more expertise in their areas of technology. During the year, several informal meetings for experts in a particular areas, such as exports, where they could exchange knowledge and experi- ence aimed at strengthening the overall customer offering.

Strategy: Indutrade’s governance model is characterised by decentralisation, as the best business decisions are made close to customers by people who have the best understanding of the customers’ needs and processes.