Addnode Group Annual Report 2015 | Page 27

ADDNODE GROUP Share data Analysts: Great potential outside the Nordic region “Addnode Group has great potential for continued growth through acquisitions, mainly in the German and UK markets,” says Kristoffer Lindström, an analyst at Redeye. as construction and real estate, manufacturing, life sciences, retailing and the public sector, which reduces dependence on individual markets and sectors. “One short-term risk which may become an advantage over the long term is in the subsidiary Cad-Q*, whose sales of Autodesk products are changing over from a licence to a subscription model. This will result in an initial drop in sales and earnings, but over the long term it will increase the share of recurring revenue. In addition, to a greater extent than other listed companies with IT consultants, Addnode Group has own products and services, which translates to a higher share of recurring revenue.” HOW WELL DID ADDNODE GROUP MEET YOUR EXPECTATIONS IN 2015? “Summing up 2015, we can see that both sales and EBITA were in line with our prognostications. The Design Management business area was affected by weaker economies in Norway and Finland, which had a negative impact on sales and earnings. The company’s acquisition of the German company Transcat PLM led to sharp growth and improved earnings for the PLM business area. The operating margin was affected by the acquisition, as Transcat PLM has a product mix with lower operating margins than the Group as a whole. The company reports that the acquired business is performing better than anticipated, and at year-end the PLM business area reported an EBITA margin that was higher than our forecasts.” WHAT OPPORTUNITIES DO YOU SEE FOR ADDNODE GROUP IN THE YEARS IMMEDIATELY AHEAD? “We believe that Addnode Group needs to expand outside of the Nordic region to continue growing in its niche areas. We also believe that Addnode Group has opportunities for new acquisitions in both existing and new European markets. The company is financially strong and has shown that it is adept at carrying out acquisitions, which has led to the company making a name for itself in Germany and the UK.” WHAT ARE THE GREATEST RISK FACTORS? “Acquisition-based growth always entails some risk. In Addnode Group’s case, acquisitions are often preceded by a long-term relationship, which reduces the operational risk. There is always some cyclical risk in a business. Right now the Norwegian market and oil price development are perhaps the greatest uncertainties. At the same time we must remember that Addnode Group has increasingly diversified business across several countries in sectors such SEK *Undergoing name change to Symetri. 3.18 SEK 2.25 EARNINGS PER SHARE AFTER DILUTION 2015 BOARD OF DIRECTORS’ PROPOSED DIVIDEND FOR 2015 33% CHANGE IN SHARE PRICE FOR ADDNODE GROUP ’S CLASS B SHARES IN 2015 27 01-32+88_Addnode_2015_EN.indd 27 2016-05-12 08:52:42