Vision, business concept, goals and strategies

Vision

OEM shall be a leading technology trading group in industrial components and systems in selected markets in Northern, Central and East Central Europe. 

Business concept

OEM offers an extensive and detailed range of industrial components and systems from leading suppliers. A well-structured local market organisation and efficient logistics make OEM a better alternative to the suppliers' own sales organisations. OEM provides a high level of expertise and service, and markets the products according to the specific conditions of each market.

 

Goals and objectives

OEM's overall business objective is to be one of the largest technology trading companies in the company's chosen geographic markets. Profitability will be on par with, or better than, that of the largest players in each market. 

Financial targets

OEM shall deliver sustainable profitable growth coupled with a good return on shareholders' equity and with minimal financial risk. The company has four financial targets. 

Sales growth

Minimum sales growth of 10% per annum through a business cycle. Growth reached 6% in 2019. 3 percentage points were organic growth and 3 percentage points were currency-related. In the last five-year period, average annual sales growth 
was 12%.  

EBITA margin

A minimum EBITA margin of 10% per annum through a business cycle. 
The EBITA margin reached 11.7% in 2019. 
The average EBITA margin has been 11.3% for the past five years.

Return on equity

A minimum return on equity of 
20% per annum through a business cycle. Return on equity reached 29.0% in 2019. The average return on equity has been 29.1% for the past five years.
Equity/assets ratio
A minimum equity/assets ratio of 35%. The equity/assets ratio was 62% at the end of 2019. The average equity/assets ratio has been 56% for the past five years.

SALES GROWTH (%)

The result for 2019 was 6% compared with the minimum target of 10 %.

EBITA MARGIN (%)

The result for 2019 was 11.7 % compared with the minimum target of 10 %.

RETURN ON EQUITY (%)

The result for 2019 was 29 % compared with the minimum target of 20 %.

EQUITY/ASSETS RATIO (%)

The result for 2019 was 62 % compared with the minimum target of 35 %.

Strategies

OEM has defined five strategic areas that are important to its future development and success and for achieving its financial targets.

Growth

OEM will create growth organically, through acquisitions and geographic expansion. These three together will generate growth that meets the growth target.  

1) Organic growth 
OEM gives priority to organic growth. OEM achieves organic growth by increasing its market share and expanding the range that the company offers its customers. OEM's operations are expected to grow above the underlying market growth in those areas where the company is well established. In markets where OEM has yet to achieve a position among the five largest players, its aim is to achieve considerably higher growth.

2) Acquisitions 
Business combinations are central to OEM's strategy for developing its operations. OEM acquires companies and product ranges that strengthen its market position within current product areas in existing markets, and companies that add a brand-new range or give OEM access to a new geographic market.

3) Geographic expansion
Geographic expansion into new markets will take place when it is possible for OEM to become a prominent player by representing several of the company's suppliers.

Product range 

OEM shall offer a product range consisting of industrial components and systems from leading suppliers. The range is adapted to the local markets in which OEM operates. Ongoing development of the range is a core activity for OEM which it conducts through partnerships with existing and new sup-
pliers. Each local marketing organisation is also tasked with finding new products that will further enhance the competitive edge of the portfolio of offerings. 

Marketing activities 

OEM shall have strong marketing activities based largely on face-to-face selling. Personal meetings are crucial to understanding customer needs, and a practical way for OEM to offer its experience and technical expertise. Face-to-face selling is supported by digital and printed marketing communication materials. 

Logistics

OEM shall develop logistics solutions that deliver excellent customer service and quality and a high level of cost-efficiency. The Group has 15 logistics units. Each unit adapts its range to current operations and works towards greater coordination of the stockholding with other warehouses. Products are customised and assembled to specific requirements in OEM's processing facilities which are located adjacent to many of its logistics units.

Employees and management 

There should be a familial culture with a focus on entrepreneurship in all operations. OEM shall give its employees opportunities to develop within the company, taking account of business goals and strategies as well as the employees' ambitions. Recruitment and employee strategies shall lead to a significant number of leadership positions being filled internally.