Added economic value
Addtech's overall objective is to be the leader in value-adding technology trading by being the most the most competent and long-term partner for customers, suppliers and employees. This places demands on the Group which can be summarised as growth, profitability and development.
Long-term profitable growth
Growth is the basis of long-term profitability. Without growth, the Company cannot develop its operations. For Addtech, growth is thus a primary fundamental requirement for securing our survival in the long term.
Growth in the Group is measured as earnings growth, or the earnings expansion target. This is a long-term target measured over a business cycle, in which period average annual earnings growth shall be 15 percent. Growth is achieved through strategic efforts to focus on expansive markets, concentrated on leading suppliers and a constant customer focus. The profitability target for each subsidiary is a minimum of 45 percent, measured using the relationship between operating profit (P) and working capital (WC). The P/WC model encourages high operating profit and low levels of tied-up capital. When combined with the growth target of 15 percent, this enables self-funded long-term profitable growth. Constant development is required to generate earnings growth and high profitability.
Long-term profitable growth means long-term sustainability and is important not just for Addtech as a group and for our employees; sustainability also creates long-term value for shareholders. Addtech's share price performance and dividend trend for its shareholders is one more way in which the Company adds value.