SOLTEQ PLC UPDATES ITS STRATEGY FOR 2014−2018

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| Source: Solteq Oyj
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Solteq Plc Stock Exchange Release 10 March 2014 at 9.00 am.

 

Since publishing its strategy for 2011 – 2014 on 4 February 2011, Solteq Plc has undergone several changes to improve the efficiency, continuity and growth of its operations. In the past few months, the Board of Directors has assessed the goals that the company has achieved, considered the changes in the markets and the economy, and analyzed the impacts of the fast changing developments on the company’s operations. In order to ensure continued growth and profitability, Solteq has updated its strategic goals for the next strategy period of 2014-2018.

We feel that the strategy we published in 2011 has been successful and met the goals set for it. The taken measures have developed the company in accordance with the set goals. For instance, the corporate acquisition implemented in 2012 has proved extremely successful. As a result of the strategic measures taken, our operations have attracted wider attention in market analyses and in service provider comparisons carried out by various research institutes. At the same time, our ownership base has expanded to institutional investors, which shows that we have developed well as a public company.

Our goal for the new strategy period is to grow to a 60 million euro turnover category. Our EBIT goal continues to be 10%, with equity ratio at 45%. We will seek growth especially by increasing the coverage of the service offering, by expanding our clientele and by strengthening our strategic business sectors through corporate acquisitions.  By our organic growth goal, we will seek faster than average growth in the market in a controlled manner, ensuring the profit level. We will seek growth through solutions that bring genuine synergy benefits to our business.

The acquisition of Aldata Solution Finland in March 2012 has enabled positive developments in our clientele and in our solution offering, and it will have an essential impact on our strategic choices in the years to come.

An important goal in our strategy is to guarantee the continuity of our clients’ operations as the users of our solutions. We have also paid attention to the developments enabled by recent technology advances and the impacts of geographical changes on the business activities of our clients and on our own business. We have also considered the effects of the Swedish market and the development of the St. Petersburg Region as well as the future growth prospects they offer and their effects on Finnish companies and organizations. The implementation of our internationalization plans in a controlled manner together with our economic goals will play a focal role in our new strategy period.

In the future, we will increasingly focus on the wholesale and retail trade, and the logistics and service sectors. The core of our operations is our comprehensive solution portfolio which covers most of the needs and requirements of our target markets ranging from purchase activities to distribution and customized solutions. Logistics will play an increasingly important role in the wholesale and retail trade and as an enabler of global online business.  This is the reason why logistics will be our special focus in the new strategy period. As to the offering to the service sector, we will focus on solutions that enable efficient management of operations by optimizing service processes and by focusing resources in a more efficient way.

The cornerstone of our strategy is the understanding of our clients’ business operations. As a local service partner, we are part of our clients’ value chains.

 

GROWTH AND PROFITABILITY

During the new strategy period, we will seek faster than average growth in the market without compromising profitability. Profitability, equity ratio and supporting the continuity of our clients’ business activities are more important to us than mere seeking of revenue growth in Finland or abroad just to increase the size of the company. In terms of turnover, our goal is EUR 60 million by the end of 2018. The development of profitability will also be important to us in the future, and we will seek an improvement of about 3-4% during the new strategy period. At the same time, our EBIT goal will be about 10%. With regard to profitability, the development of the operating model towards increased flexibility will play an important role. This will allow us to predict fluctuations in demand or to respond to changes in it and improve the management of the risks possibly involved in organic growth.

As to equity ratio, our goal is to maintain the long-term level of 45%, taking into account the short-term changes caused to it by possible investments and acquisitions & mergers.

The long-term measures to improve profitability will focus on e.g. our production model and internal efficiency.

 

INTERNATIONAL ACTIVITIES

The trends that we see in the international markets include an expansion to the Nordic countries which will have an impact on the activities and ownership structures of our clients.  At the same time, an increasing number of foreign companies are establishing operations in Finland. Online business will add to the drastic changes that are breaking down geographical boundaries.

In our opinion, the changes in society and the economy will, however, continue to be country-specific in the next few years. Therefore, the management of the risks involved in our business activities and the possibility to operate outside Finland will also affect the development of our international activities.  As we see it, our product and solution portfolio in the current form will provide excellent possibilities for this.

The strong growth of online business continues in our target sectors. Along with traditional international activities, online business represents a development in which our clients expand from the domestic market to global markets and operations.

Our goal is to increase our international activities by expanding our business to new markets and to grow with our clients. We are looking into possibilities to expand our operations in the Nordic countries, for instance in Sweden, where we have successfully implemented several client projects in the past few years. In our opinion, these experiences have been positive, and they prove that our solutions are in growing demand. Several of our existing clients have turned their eyes to the east. They find the St. Petersburg Region an especially interesting market area, and this is the development we will follow closely. Our aim is to support our clients’ projects in the region. In this area, however, our operations are strongly based on partnerships and cooperation with our clients. The Baltic Region is an area where our business will continue to take place in the form of solutions delivered from Finland.  

Apart from geographical growth areas, we see the development of our international activities strongly connected with the development of online business.

 

CLIENT SECTORS

Our focus is on the wholesale and retail trade, and the logistics and service sectors. The core of our business consists of a strong solution portfolio that covers the whole wholesale-retail chain. Our offering meets most of the needs and requirements of our clients. The wholesale and retail trade, from wholesale to grocery and special goods trade continues to play an essential role in our operations. We will develop our expertise further to be able to serve the wholesale and retail trade, and the logistics and service sectors even better than before. This will ensure that our clients can enjoy fluent cooperation with an expert organization.  

Logistics will play an increasingly important role in the wholesale and retail trade and as an enabler of global online business.  We will invest in increasing our expertise in logistics in the area of IT solutions, as we see them as an integral part of the requirements in all our client sectors.  The current development towards increasingly networked trade requires new, flexible logistics functions for which we will continue developing solutions and services.

As to the offering to the service sector, we will focus on solutions that enable efficient management of operations by optimizing service processes and by focusing resources in a more efficient way. Technologically synergic solutions and our own products in this area will improve the management of service processes as well as efficiency. We will offer these special solutions to various industries and public administration organizations.  In the provision of solutions to the service sector, we will continue networking with relevant companies and organizations. Our partners will also act as distribution channels for our products.  

 

PERSONNEL

Competent personnel is the key to our achieving our goals. The competencies of the personnel, changing working methods, expectations of the various generations concerning work careers and tasks, as well as technological development require that we listen to our employees and offer them different alternatives. Our goal is to offer lifelong employment relationships that adapt to changing life situations and phases. We want to support the employees’ wishes concerning individual adjustments of tasks at the beginning, in the middle and at the end of their work careers. It is essential that we also support our employees concerning their wishes to develop themselves and their commitment to implementing the best possible solutions for our clients. Our personnel, which knows and understands our business, is a success factor that we want to adhere to.

 

DEVELOPING OPERATING MODELS

Our company has become a service organization which implements projects but also provides long-term services to support our clients’ business activities. Our project methods have developed significantly in the past few years. We want to continue developing our long-term services and project activities. Our promise concerning deliveries – at the right time and cost – is a promise we want to deliver every day. Our project deliveries will continue to be based on solutions and services that speed up deployments and improve quality, and on the technology platforms of the world’s leading software providers.

The partnerships with our clients are based on long-terms relationships, which allows flexible alterations in the technologies, changes in the processes and utilization of new functions over the years.  

We will continue developing such service models that enable flexible transfer from one technology to another and which are based on cloud services or are integrated with them.

 

NON-ORGANIC GROWTH

Achieving strategic numerical goals requires focused organic growth as well as non-organic growth expanding sectors, geographical areas or solutions. Part of our growth strategy is implemented through an active acquisition program. In the previous strategy period, we successfully expanded our operations through a corporate acquisition. To support the development of our international activities, we will continue looking for similar acquisition opportunities in Finland and possibly also abroad, especially in Sweden. Activity in mergers and acquisitions is not a value as such for us. We see our client sector and solution strategy as a factor that strongly directs our operations. As we want to ensure our delivery readiness and our economic independence, only genuinely synergic measures are possible.

 

PARTNERSHIPS

We want to offer our clients solutions that are based on global standards and on the solutions of well-known players in the industry. The share of our own solutions will be a significant development target for our existing clients.  We will also continue on the road paved by TH Tiedonhallinta as the provider of IBM RPG based solutions.

In the past strategy period we developed our partner network to cover the Microsoft Dynamics NAV and AX solutions, SAP technologies and Symphony EYC solutions. During the new strategy period we will aim at establishing partnerships with such companies and operators which are either highly focused and technologically complementary or which offer clearly new operating sectors that will support our growth.

The vertical solutions that support our core offering, which is based on the Microsoft technology platforms, are competition factors which we believe in and which we will expand in selected sectors. We believe in strong partners which can represent our solutions.

 

ENVIRONMENT

In our operations, we guarantee continuity and enable the future but environmental values and sustainable development are also important considerations for us. In our decisions, we take into account the future and we value the environment. Our internal operations, delivery chain practices and production solutions are developed with consideration to the environment and we require the same of all our partners.

 

SOLTEQ PLC

 

Further information:


CEO Repe Harmanen

Tel. +358 400 467 717

Email repe.harmanen@solteq.com

 

Chairman of the Board Ali U Saadetdin

Tel.  +358 40 8444 201.

Email ali.saadetdin@solteq.com

 

Distribution:

NASDAQ OMX Helsinki.

Key Media

www.solteq.com