Solteq Oyj - Company Announcement

SOLTEQ PLC UPDATES ITS STRATEGY FOR 2014−2018

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