45587 sid1-28...ADDTECH IN BRIEF 1 Net revenues amounted to MSEK 2 275 (2 360). Income after ﬁnancial items increased by 15 percent to MSEK 93 (81). Earnings per share increased

ANNUAL REPORT

2002/2003

VALUE ADDING TECH PROVIDER

ADDTECH IN BRIEF

CONTENTS

The Year in Brief........................1President’s Statement............2–3Group Presentation ...............4–7Business Areas......................8–19

Addtech Equipment.........8–11Addtech Transmission....12–15Addtech Components....16–19

Personnel and Competence .......................20–21Risk and Sensitivity Analysis...............................22–23Environment, Quality and Ethics...........................24–25Share Information .............26–27Financial Indicators andDefinitions ...............................28Administration Report ......29–31Financial Statements .........32–39Comments to the FinancialStatements .........................40–41Notes ..................................41–47Audit Report............................48Quarterly Data.........................48Board of Directors ...................49Group Management ...............50Annual General Meeting 2003 ..........................51Addresses ...........................52–53

Addtech in two minutes� Addtech offers high-tech, customer-specific components andsystems to industrial companies and the service industry.Addtech functions as a refining link between manufacturersand customers. The combination of business acumen and tech-nical competence allows Addtech to create unique solutionsthat are technically as well as economically optimal.

� Addtech is a group organized for growth. This applies geo-graphically as well as in terms of volume. Since 1995 Addtechhas made about 30 acquisitions. The companies in Addtech aimto be market leaders in the niches in which they are active.

� Addtech has about 1 000 employees and conducts businessin some ten countries.

� Addtech consists of about 40 operating companies, whichsince the beginning of the 2003/2004 operating year areorganized in the following three business areas:

Addtech EquipmentOffers materials and equipment for production processesand for use primarily in the electronics, engineering andvehicle industries.

Addtech TransmissionDevelops and sells components in transmission, electro-mechanics, machine parts and hydraulics.

Addtech ComponentsSells components and develops solutions primarily in connection technology, electronics, electro-mechanics andcontrol systems.

� Addtech’s financial year is April 1 to March 31.

CALENDARFinancial information from Addtech will be published as follows:

� Interim Report April 1, 2003 – June 30, 2003August 19, 2003

� Annual General Meeting for the 2002/2003Operating Year August 19, 2003

� Interim Report April 1, 2003 – September 30, 2003November 4, 2003

� Interim Report April 1, 2003 – December 31, 2003February 5, 2004

� Financial Report April 1, 2003 – March 31, 2004May 12, 2004

2002/2003 2001/2002 2000/2001

Net revenues, MSEK 2 275 2 360 2 502Operating income, MSEK 98 86 214Net income for the year, MSEK 64 53 149Operating margin, % 4.2 3.6 8,6Earnings per share, SEK 2.43 1.92 5.36Equity per share, SEK 16.80 15.70 14.90Dividend per share, SEK 1.50* 1.20Return on equity, % 15 12 36Equity ratio, % 44 41 34Average number of employees 1 072 1 155 940

* As proposed by the Board of Directors.

This document is in all respect a translation of the Swedish original annual report.

ADDTECH IN BRIEF

1

� Net revenues amounted to MSEK 2 275 (2 360).

� Income after financial items increased by 15 percent to MSEK 93 (81).

� Earnings per share increased by 27 percent to SEK 2.43 (1.92).

� Cash flow from current operations improved to MSEK 169 (41) and net financial indebtedness declined during the year by MSEK 70 to MSEK 4.

� A dividend increase by 25 percent to SEK1.50 (1.20) per share is proposed.

� Addtech implemented a cost-containmentprogram during the year that reduced costsby about MSEK 50 on an annual basis.

� Two acquisitions were made with annualrevenues of about MSEK 130.

� The performance of Addtech share, whichis listed on the O-list of the Stockholm StockExchange, has roughly equaled that of thecomposite stock exchange index.

The Year in Brief

PRESIDENT’S STATEMENT

2

When the 2002/2003 businessyear began we believed in amodest recovery. The prevail-

ing uncertainty in the market made ustake a cautious tack, however, whichwould make for a reasonable result evenin a continued weak market situation.This choice of course turned out to bewise. We are now able to show that wehave managed to improve earnings andsubstantially increase cash flow on lowervolume.

That this was possible is in my view aconsequence of Addtech’s strong andfirmly rooted business concept. The con-cept is based on deep and long-term busi-ness relations, which is a decisive factorwhen the market retreats and competi-tion heats up.

Thanks to an understanding of theneed for adaptation and a willingness tochange on the part of our employees, wehave managed to implement efficiency-improving measures without losingmomentum.

Our most important strategic keywords had continued relevance duringthe year:� Developing new niches – has beenentirely possible in several places. Goodexamples hereof can be seen in the spe-cial vehicles industry.� Operative mobility – with active effortsand many projects under way during theyear aimed at optimizing the organiza-tion.� Acquisition-driven growth – slightlylower than normal during the year, but

we have acquired two businesses withaggregate annual revenues of aboutMSEK 130.

To reach our long-term goal of 15 per-cent income growth, strategies must con-tinually be refined and developed. Animportant task during 2002/2003 was toidentify improvement and efficiencyenhancement opportunities. The imple-mentation process was especially impor-tant during the past year, as many meas-ures were marked by savings and cost-containment.

We create growthAddtech’s strategy for the long term is tocreate growth by developing new niches,continually makingthe organizationmore efficient andmaking acquisitions.

The ambition is toacquire well-man-aged companies withadditional potentialwithin the AddtechGroup.

Our success lies in combining the“small company’s” efficiency, personalapproach and flexibility with “the largecompany’s” strong financial position,long-term approach and well-establishednetwork of customers and suppliers.

We are important to the customerOur companies function as a refining linkbetween suppliers and customers. The

refinement consists of always adding realadded value in our various projects. Thisadded value may, for example, mean thatwe through our international networkfind alternative solutions that increase thevalue of the customer’s product, or leadto new efficient ways or methods ofapplication for the customer.

Such cooperation often leads to jointdevelopment projects over an extendedperiod of time with customers and suppli-ers. In such cases we also get the role ofproject manager and coordinator.

A central element of Addtech’s strate-gy is that our companies must be strongwithin a well defined niche. If we are tosucceed as a niche supplier, we must

understand the cus-tomer’s total prob-lem. Thanks to com-petence and know-ledge about the cus-tomer’s situation,Addtech can offerthe best solution.When customersmerely demand sim-

ple standard products, there are probablyother companies that are better suited forthat type of volume distribution.

Every employee must be aware of hisor her role as a refining link in the dailywork. After all, refinement is what we getpaid for. This gives us deeply rooted prof-itability thinking throughout the organi-zation. Profitability is for us to see thetotality in the business relationship, bothin the short and long term.

We have created a stable base for continued growthAddtech performed well during 2002/2003. Earnings improved despite a cool marketclimate. The year now behind us confirms that both our business model and ourorganization are strong. With stability in the basic business, costs under control and astrategy of going on the offensive, we are looking towards a bright future.

“The ambition is toacquire well-managedand profitable compa-

nies with additionalpotential within theAddtech Group”

PRESIDENT’S STATEMENT

3

Willingness to change is keyAddtech’s employees have displayed evi-dence of the willingness to change thatdistinguishes our corporate philosophy.The fact that creativity and an entrepre-neurial spirit have continued to flow hasbeen crucial to the Group’s ability toweather the economic downturn in anacceptable fashion.

The strong corporate culture thatexists within Addtech has been built overa period of many years. With a largenumber of acquisitions, we have alsoenriched that culture with new influ-ences. Every unit has its own identity to adegree, but the core of the method ofworking, the strategic thinking and theprofitability focus, aredefinitely the samethroughout Addtech.

There are simplycertain things that aretaken for granted anddo not require micro-management – certainthings never have tobe articulated, theyare still carried out. Our Business Schoolis very important for rooting and devel-oping that culture.

The decentralized organization alsomeans that decisions on measures to betaken must be rooted and be individuallyadapted to each unit’s special situation.Broad brush strokes simply do not workin our type of group.

This also places great demands on thework of the Board of Directors. We have

a small but highly experienced Board ofDirectors, which is a strength for theCompany. Unanimity all the way fromthe Board of Directors to those who“own” a project creates self-confidence in

the organization.In addition,

opportunities arecreated for fast andeffective decision-making, which isentirely necessary intoday’s business cli-mate. It must berealized that it is

between the Board of Directors’ meet-ings that the work is done and that iswhen the thoughts and decisions of theBoard of Directors must be spread out inthe organization. I am of the opinion thatwe have been quite successful in thisarea.

The hard work continuesIt is difficult to see an early improvementin the business climate. We must simply

streamline operations and adapt ourcosts to the prevailing market situation.

But we must not be overly defensive.New business opportunities do notunfold by themselves. Active efforts areneeded to get ahead.

Our highest priority is to increaseprofitability given the existing businessvolume, but at the same time we areapplying resources to create growththrough acquisitions and business devel-opment.

We have already adopted and firmlyestablished aggressive growth targets inthe organization. Seen in a more extend-ed perspective we have also managed toachieve our goals. Even though the econ-omy at present is not the best, we areconvinced that we have what it takes tocontinue achieving the strong profitabili-ty that has always distinguished our oper-ations.

ROGER BERGQVIST

PRESIDENT

“Unanimity all theway from the Board ofDirectors to those who‘own’ a project createsself-confidence in the

organization”

4

GROUP PRESENTATION

BUSINESS CONCEPTAddtech offers high-tech, customer-specificcomponents and systems to industrial companiesand the service industry. Addtech functions as arefining link between manufacturers and customers.Addtech adds value by its close cooperation withmanufacturers as well as customers and hightechnical competence on the part of Addtech’sproject managers and sales representatives.

1 Business acumenAddtech’s business culture is distinguished by long-term profitability thinking and per-sonal accountability. All employees develop their business acumen, which results inoptimal solutions for the customer.

2 CompetenceBecause Addtech’s subsidiaries limit their operations to specific niches, unique compe-tence can be maintained.

3 PartnershipThanks to strong business relationships with suppliers and customers, Addtech createssolutions that are optimal, technically as well as economically. This places greatdemands on project leaders and sales representatives, who must possess in-depthknowledge of both the customer’s and the supplier’s situation.

4 Value addedThrough knowledge of the importance of the details for the whole, Addtech can identi-fy solutions that create real added value for the customer. This leads to deep relation-ships and a great deal of confidence. It also means that Addtech often participates inthe customer’s development work.

This is how we realize our businessconcept, which is based on thepremise of being a refining link

IMPORTANT CORNERSTONES The business concept is based on four cornerstones, whichare central to the Addtech Group:

5

GROUP PRESENTATION

1 Market-leading positionsThe companies in Addtech will strive for market-leading positions. Addtech identi-

fies new market areas and business opportunities on an ongoing basis, which meansthat the niches are always being complemented.

Central for Addtech is to offer customized solutions and to live up to the require-ments of customers for service, support and technical knowledge.

2 Growth through acquisitionsAddtech is a group organized for growth. This applies geographically as well as in

terms of volume. Growth occurs organically when existing companies grow with the

market, increase their market share and develop solutions in new niches.

Addtech has made 30 acquisitions since 1995. Evaluating acquisition prospects is a

central part of management’s tasks. Addtech has great credibility and experience from

the markets in which the Group is active. This often prompts potential acquisition tar-

gets to contact Addtech to discuss future possibilities for cooperation.

3 Business and organization developmentThe entire Addtech organization is permeated by a willingness to change, both in terms

of customer solutions and in developing the organization for more effective resource

utilization.

GOALSAddtech’s goal over a business cycle is profitgrowth, expressed as income after financialitems, of at least 15 percent per year. Thelong-term return on equity should be at least25 percent.

Focus on profitability permeates AddtechThe keen focus on profitability in the Group andthe business acumen of its employees create oppor-tunities for reaching these goals. Addtech’s costingprocess not only includes costs for delivering theend product, but profitability through the entirebusiness process is always taken into account.

STRATEGY Addtech operates according to three main strategies toreach its long-term goals:

Addtech has made 30acquisitions since 1995

Revenues by market

Sweden 51%Finland 20 %

Other 9%Norway 4%

Denmark 16%

Revenues by customer segment

Vehicles 20%

Telecom 10%Medicaltechnology 7%

Electronics 14%

Forest & process 5%

Other 14%

Mechanical 25%

Energy 5%

Equipment 37%Components 25%

Transmission 38%

Revenues by business area

6

GROUP PRESENTATION

Addtech offers customized system solu-tions and components to industrial com-panies and the service industry. Addtechpossesses high technical competence andworks in close cooperation with both cus-tomers and suppliers to create the bestsolutions. The companies in Addtechstrive to be market-leaders in the nichesin which they operate. The entire Groupis marked by profitability thinking andbusiness acumen.

Participation in the customer’sdevelopmentTechnical competence and business acu-men go hand in hand in Addtech. Thecompanies in Addtech offer components,systems and equipment for manufacturingindustry and the service sector. Through itstechnical competence, Addtech’s employ-ees gain great confidence from the cus-tomer and often participate actively in thecustomer’s development work. This cooper-ation makes it possible for Addtech to offercustomized solutions, which gives Addtechthe role of a refining link.

Cooperation with suppliersAddtech also enjoys close cooperationwith its suppliers. Being well versed inthe latest technology and thoroughunderstanding of an application improvesthe offer to the customer. Addtech coop-erates with leading suppliers in Europe,the United States and Asia. No supplierrepresents more than 5 percent of theGroup’s purchases, which reducesAddtech’s dependence on individual sup-pliers.

Added value for the customerAddtech creates high-tech solutionsbased on components, equipment andsystems. By looking to the totality, and byfocusing on economy and technology,Addtech can create added value for thecustomer.

Knowledgeable employeesAddtech’s employees are thoroughlyfamiliar with the challenges the customerfaces and in many cases they can workproactively on suggesting solutions.

ORGANIZATION Addtech consists of threebusiness areas and about40 operating companies.

Addtech works actively on utilizing the organi-zation as efficiently as possible, and companiescooperate in varying degrees with their sistercompanies. Each business area is managed bya business area manager and a managementgroup.

From the beginning of the current opera-ting year, the Group is organized in the threebusiness areas Addtech Equipment (readmore on page 8), Addtech Transmission(read more on page 12) and AddtechComponents (read more on page 16).

BUSINESS The business is characterized by the overriding strategy of being a refining link.

VALUE ADDED IN PRACTICEThis is an example of how Addtech can create a better customer solution.

“A customer has created a specifi-cation for an electrical connector.We establish that the customershould choose an alternative solu-tion, which means that pullingcable in difficult locations is avoid-ed. The connector is more expen-sive but the whole packagebecomes more economical sinceinstallation costs are reduced andreliability is improved. The conse-quence is that we deliver an entirecomponent solution instead of asingle component. At the sametime new projects are started thatlead to similar improvements ofthe customer’s product line.”

7

GROUP PRESENTATION

MARKET Addtech operates in the market for high-tech industrial components, equipmentand systems. Emphasis is on the manu-facturing industry and the serviceindustry in the Nordic Region.

The market is made up of a number ofdifferent segments, among them the vehi-cle and electronics industry, and medical-technical industry. Addtech delivers solu-tions to well-defined niches in theseindustries. It is therefore difficult to quan-tify the size of the market. A generallyweaker willingness to invest affected ope-rations during 2002/2003. In line with itsstrategy, Addtech increased its revenues inthe field of materials and consumables,however.

The telecom market continued itsweakness during the year, which led tolower demand. Addtech reduced itsdependency on the telecom industryduring 2002/2003.

CUSTOMERSMost of Addtech’s customers are found inthe Nordic manufacturing industry andthe service industry and their aftermar-kets. Both international and nationalmanufacturing companies and their supp-pliers are among Addtech’s customers.

The Group also has customers outsidethe Nordic Region. The United Kingdom,Germany, Poland and Austria are the lar-gest non-Nordic markets. Addtech’s custo-mers are machine builders, so-called OEMcustomers, as well as end users. No custo-mer accounted for more than 3 percent ofrevenues during 2002/2003, which meansthat Addtech is not dependent on any onesingle customer.

Examples of large customers are ABB,Saab, Nokia, Volvo, Tetra Pak,Flextronics, BT Industries and Siemens.

COMPETITORS Addtech is active in well-defined nichesand offers real added value to its custo-mers. The fact that demand for serviceand support is on the rise means thatcompetition from volume distributorsand producers is limited. The competitorswhich are most comparable to Addtechare OEM International, BeijerElectronics and ElektronikGruppen.

There are also small and medium-sized agency companies that are active inthe market. Examples of such companiesare Östergrens, SKS and Gycom.

REFINING LINK BETWEEN CUSTOMER AND SUPPLIERAddtech conducts a continuous dialogue with the customer and creates tailor-made solutions in cooperation with suppliers or in its own niche production.

During 2002/2003 theten largest customersaccounted for less than15 percent of revenues

ADDTECH

Förädlingslänk

Koordinator

Standardprodukter

SUPPLIERS CUSTOMERS

ADDTECH

Processing link

Coordinator

Customized solutionsNische productionServices

Requirements, needs

Standard products

Relinking and companyon product development

8

BUSINESS AREA ADDTECH EQUIPMENT

BusinessThe companies in business area AddtechEquipment develop and sell productionequipment, specially adapted materialsand consumables. The majority of cus-tomers use the equipment and the prod-ucts themselves, typically in their produc-tion process.

Knowledge about the situation of thecustomers is crucial to success for thecompanies in Addtech Equipment. Thismeans that product specialists, servicetechnicians and sales representativeswork closely with both customers andsuppliers to enable them to develop solu-tions to customer problems.

Products and solutions of high qualityare obviously an important element ofwhat the customer buys. The companies’undertaking often include logistics solu-tions, service and maintenance, whichcreates long-standing customer relation-ships as well as current revenue.

Development during 2002/2003Weak demand for production equipment,which during the preceding year was

linked mostly to the downturn in the tele-com sector, widened somewhat during theyear. Adjustments due to weaker demandfrom the telecom sector were made to theorganization already during 2001/2002. Asa consequence Addtech fared relativelywell in 2002/2003 given the situation athand.

Thanks to active efforts in materialsand supplies, parts of the business areacreated a product mix that stabilized theunit. The business area’s dealings in con-sumables continued to develop well.Battery sales and energy components alsosaw a good development during the year.

MarketThe companies in business area AddtechEquipment sell primarily to manufactur-ing companies in the Nordic Region witha need of specially adapted materials, orwith stringent requirements for testingand quality assurance in their productionprocesses. As companies increasingly arechoosing to focus on their core business-es, increased demand for total solutionsin materials and consumables is created.

Parts of business area AddtechEquipment have their focus on customersin the vehicle and electronics industries.Other important customer segments aretelecom and the mechanical industry.

Examples of competitors are OEMInternational, Indutrade and G&L Beijer.

Addtech is often in close cooperationwith its customers. The effect of this isthat every customer relationship requiresmuch attention. For optimal profitabilitythis means that the companies inAddtech Equipment do not have contactthemselves with the smallest customers;in certain cases the market is cultivatedvia distributors and resellers.

The futureThe challenge for Addtech Equipment isto continue to develop successful busi-ness concepts in response to high cus-tomer demands. Continued developmentof the strong position in testing and quali-ty, and striking a balance between invest-ment-depending business and consum-ables is key to the operations of the busi-ness area.

ADDTECH EQUIPMENT IN A MINUTEBusiness: Business area Addtech Equipment develops and sells production equipment, speciallyadapted materials and consumables used in the customer’s production.

Market: Manufacturing companies with a need of specially adapted materials, or with highdemands for testing and quality assurance. The electronics industry, the vehicle industry and thetelecom industry are important customer segments.

Examples of customers: Flextronics, ABB, Nokia, Atlet and Siemens.

Addtech Equipment markets equipment, materials and components for use primarily inthe vehicle industry, the engineering industry, and the electronics and telecom sectors.The business area has about 350 employees and had revenues of MSEK 834 during thefinancial year, which is equivalent to 37 percent of Addtech’s total revenues.

Addtech Equipment encounters growing demand for total solutions

Customers are mainlyend users of the products,

or use them in theirproduction process

9


Proportion of consolidated revenues

Revenues by customer segment

KEY INDICATORS 2002/ 2001/ 2000/2003 2002 2001

Net revenues, MSEK 834 948 1062Operating income, MSEK 17 2 77Operating margin, % 2.0 0.2 7.2Operating capital, MSEK 120 121 104Return on operating capital, % 15 1 64Capital expenditures, MSEK 6 9 12Average number of employees 382 460 361

ADDTECH – EXAMPLES OF PRODUCTS AND SERVICES

PRODUCTS EXAMPLES

Machinery

Production equipment For example, for automation in the electronics industry. Cleaning, tumbling and air-blasting plants for the engineering industry.

Testing systems

Function testing Control and fault-searching of mounted circuit boards and their electronic functionality.

Optical testing systems For the control of component location.

Fixtures Customer-specific fixtures for various types of testing systems and simulation.

Balancing and coordinating Mounting and measurement of chassis components.machinery

Materials

Electrostatic protection Various types of protection for the electronics manufacturing industry, including ESD packaging and ESD-secure workplace equipment.

Consumables Various types of production materials and cleaning chemicals after mechanical processing and for electronic production.

Special materials Metals for high temperatures, for example cooling coils for electronics. Permanent magnets for ignition systems in engines.

Power supply

Batteries Special batteries for use in electric trucks, handicap vehicles and work platforms.

Transformers Transformers for, among other things, electronic energy measurement.

SERVICES

System solutions, system optimization, process development, adjustment, training, consulting services andservice and maintenance.

Revenues by market

Addtech Equipment, 37%

Sweden 55%Finland 23 %

Other 8%Norway 4%

Denmark 10%

Vehicles 26%

Telecom 22%Medical technology 5%

Electronics 25%

Energy 2%Forest & process 1%

Other 9%

Mechanical 10%

A growing number of companies arerealizing that static electricity cancause dysfunction when sensitivecomponents are handled. Thisincreases the market for ESD-Center, a developer of materials to reducestatic electricity. Read more about thecompany at www.esd-center.se.

11


ESD-CENTER AND MATRONIC

Problems with static electricity areexpensive for many companies

Static electricity is a phenomenonmost people are familiar with. Itcan be a matter of a light electric

shock when removing a garment ortouching the car door. On such occasionsthe static electricitycauses no harm.

But there are occa-sions when static electric-ity is directly harmful.Electronic componentsand systems can beknocked out or inter-fered with by electrostat-ic discharges (ESD). In a worst-case sce-nario ESD can lead to shut-down, fires oreven explosions. In manufacturing suchoccurrences can be associated with majorexpense and damage.

Avoiding expensive shut-downAddtech company ESD-Center is a marketleader in creating solutions to dissipate stat-ic electricity. The company manufacturesand sells specially made products such astables, chairs, shoes, packaging, cleaningagents, pliers and transport packaging.

Companies using electronic products aretraditionally the largest customers of ESD-Center, but as more and more sectors and

industries increase the electronic content of their products, the market is growing rapidly.

The vehicle industry, biotechnologycompanies and the health care sector are

some of the sectorswhere awareness of theproblems with static elec-tricity is growing.

Many have come tothe realization that inferi-or protection can be veryexpensive if, for example,you have a shut-down of

operations, says Richard Nordén, Presidentof ESD-Center.

ESD-Center cooperates with the FinnishAddtech company Matronic, which alsodevelops and sells products that dissipatestatic electricity. A broad product portfolioand good customer relationships are key tothe success of both ESD-Center andMatronic.

Offers analysis and trainingMany large companies in for instance thetelecom industry have reduced the numberof suppliers and if you then as supplier havethe right product line, you can deliver atotal solution to the customer.

– Our advantage is that we have every-thing under one roof. The customer getsservice, logistics and know-how from thesame supplier. In addition we offer analysisand training, says Matronic’s President,Tuomo Luukainen.

With the right knowledge and the rightequipment the problems with static electric-ity can be eliminated. Customer companiesget access to their own contact person atESD-Center who continually providesinformation to the customer and offersupdates of the ESD protection.

Adds important values– Our customers have great confidence inus, and proof of that is that we sit in withthe customer during the actual productdevelopment phase. This obviously gives usa stronger position and a better relationshipwith the customers, says Richard Nordén.Thanks to its unique know-how and broadproduct portfolio ESD-Center andMatronic can add important values to thecustomers.

The prospects for the market are alsodeemed to be positive. Despite the fact thatthe telecom industry, which is a large cus-tomer group, has had a tough time in recentyears, there are other sectors that havebecome aware of the problems with staticelectricity and therefore bring growthopportunities.

– We are cultivating many sectors, forexample the auto and medical industries,where it is also important to have controlover static electricity, says Richard Nordén.

Static electricity is a growing problem in many industriesand can cause operational disturbances and fires. ESD-Center in Sweden and Finnish Matronic are two Addtechcompanies that are market-leaders in helping companies toavoid damage caused by static electricity.

”We are noticingincreased interest in

how to protect oneself from static

electricity”

12

BUSINESS AREA ADDTECH TRANSMISSION

BusinessAddtech Transmission offers componentsand products in the areas of transmission,electro-mechanics and hydraulics. Thesecomponents are often critical parts in themachines and products in which they areused. Customer demands for customiza-tion are also extensive in many cases.

It is therefore natural for Addtech toparticipate in the customer’s developmentwork and to act as a problem-solver andsounding board.

Addtech Transmission has certain pro-duction, and the products developed in-house are most often niche productsmanufactured in small series.

Clients are in most cases designers, soAddtech’s representatives have to be

highly competent technically in order tobe able to carry on a qualified dialogue.Project leaders and sales representativesoften function in the role of applicationengineers.

Development during 2002/2003Thanks to their strong position in themarket, most companies in AddtechTransmission managed to strengthentheir market position during 2002/2003despite an overall dismal market situa-tion.

Aside from a weaker market situationin Finland, demand was stable for mostof the business area’s products. Demandfor hydraulic components from the truckindustry and for special vehicles contin-ued to be good.

MarketThe market is made up mostly of manu-facturing companies with a need ofunique components and design support inits manufacturing. Customers include

machine manufacturers in the packagingindustry and makers of handling equip-ment and their aftermarkets.

The companies in AddtechTransmission offer more tailor-madesolutions for its customers than do mostcompetitors. An additional competitiveadvantage is the proprietary brand namesthat Addtech Transmission has in itsproduct portfolio.

Examples of competitors are SKS,Östergrens, parts of OEM Internationaland F.R. Ramström.

Each individual sales representative orapplications engineer build up a know-ledge bank around the products he or sheworks with. This is something that fits inwith customer requirements for addedvalue. Market demand for peripheralservices, such as drawings, manuals anddevelopment support, has increased inrecent years, and that trend is likely tocontinue.

The futureThe focus on creating added value hasgiven Addtech Transmission a strongposition in the market, where pricingpressures on standard products and sim-pler solutions are expected to continue.

A priority area going forward is toeffectively strengthen and developAddtech Transmission’s proprietarybrand names.

ADDTECH TRANSMISSION IN A MINUTEBusiness: Business area Addtech Transmission is focused on components and sub-systems basedon mechanics, electro-mechanics and hydraulics. Design and product customization are key to thecompany’s operations.

Market: Manufacturing companies with a need of unique components and development supportin their manufacturing. Machine manufacturers in the packaging industry and makers of handlingequipment are important customer segments.

Customers: BT Industries, Tetra Pak, Mydata, Tomra, Nextrom and Indexator.

Addtech Transmission is focused on components and sub-systems based onmechanics, electro-mechanics and hydraulics. The business area employs about500 and had revenues during the financial year of MSEK 859, which is equivalentto 38 percent of Addtech’s revenues.

Addtech Transmission is a partner to the Nordic machine industry

The market consistsmainly of manufacturingcompanies with special

requirements

13


KEY INDICATORS 2002/ 2001/ 2000/2003 2002 2001


ADDTECH TRANSMISSION – EXAMPLES OF PRODUCTS AND SERVICES

PRODUCTS EXAMPLES

Mechanical transmission

Belt transmission Precision power transmission for printer applications, for example.

Chain transmission Power transmission for lift applications on trucks, for example.

Electromechanical transmission

Motor/gear transmission Tool switching operations for magazines in tool machines.

Linear actuators Damper control in, for example, ventilation or silo applications.

Linear axles For handling applications.

Machine parts

Gaskets For diesel engines.

Seals In hydraulic applications.

Linear and roller bearings Linear bearings for fast and precise linear movements in assembly applications.

Hydraulics

Hydraulic components Special cylinders for off-the-road equipment.

Hydraulic systems Systems for lifting trucks.

SERVICES

Design, system construction, assembly, trials and testing.


Revenues by customer segments

Revenues by market

Addtech Transmission, 38%

Sweden 41%

Finland 23%

Other 12%

Norway 5%

Denmark 19%

Vehicles 12%

Energy 4%

Medicaltechnology 6 %

Electronics 2%

Forest &process 12%

Other 22%

Mechanical 42%

14

Aratron supplies mechanicaland electro-mechanical components that are built intocustomer products. Read moreabout the company atwww.aratron.se.

15


ARATRON

Application engineers create uniquesolutions together with the customer

Aratron is a complete supplier ofcomponents in the field of rotat-ing and linear motion to

machine manufacturers, so-called OEMcustomers, in Sweden. Components deliv-ered include small motors, belt transmis-sions, regulators, shaft couplings and grip-ping and turning devices used for materialhandling.

Aratron cooperates with leading manufacturers of products in the niche oflinear and rotating motion.The company also has itsown workshop for adapta-tion and assembly – all tomeet customer require-ments for specially adapt-ed solutions. Togetherwith the high level of competence pos-sessed by Aratron’s application engineers,this has given the company a strong posi-tion in the market.

Technology and economyCreating a solution that is optimal for thecustomer, from a technical as well as aneconomic perspective, is the challengeAratron is an expert at resolving. Thisplaces high requirements on know-how,and Aratron has close cooperation withthe suppliers in order to be well versed ontheir products and the latest technology.

The know-how and the experiencemake Aratron’s specialists knowledgeable

about the challenges customer’s face. Thatallows them to create relevant solutions inconsultation with the customers.

– We are well-known for offering highquality. Our focus is on customers in needof unique solutions, at the same time asrequiring high competence and deliveryprecision by us as supplier, says Aratron’sPresident, Per Häglund.

Compared to other players in theindustry, Aratron’s method of working is

quite a bit different.The company doesnot sell standardproducts in large vol-umes, but focuses onunique solutions,which places higher

demands on the dialogue with the cus-tomer.

Aratron obviously also offers standardcomponents since many of its customerswish to limit the number of suppliers.

Aratron also offers 3-D drawings, cal-culation programs and Swedish productdescriptions and data sheets. This is anadded value that makes the life of cus-tomers considerably easier. The cus-tomers, who are often designers, are thenable to insert complete CAD drawings ofcomponents in the machine drawings theyare working with.

Aratron’s customers are mostlySwedish OEM customers, with operations

in Sweden. Among the largest customersare packaging giant Tetra Pak and its sup-pliers, machine manufacturers Mydata andM2, makers of machinery for surfacemounting and CD/DVD disks, respectively.

Customers are found in a variety ofindustries, with the common denominatorbeing a need for solutions for linear androtary motion for their machine produc-tion. The very fact that the customers areactive in many different industries hasbeen instrumental in Aratron faring well inthe economic downturn, having increasedits revenues during the past year.

Advantage of being part of a groupThe company has 41 employees, 20 ofwhom work as applications engineers.Common to all co-workers is that theyposses the profitability thinking so typicalin the Addtech Group. All employees alsoregularly participate in the Group’s com-mon training programs at its BusinessSchool.

– Having a strong corporate culture isan advantage for the company. Allemployees have a common approach tohow we work. There is no need for micro-management or detailed control since somuch is “free” and built-in to the structurefor how we handle different situations,says Per Häglund.

– We get good response from our cus-tomers, who appreciate the quality wedeliver and the fact that we always try tobecome even better. We have strength-ened our market position every year, and Iam certain that we will continue to do soin the future, Per Häglund summarizes hisvision of the future for Aratron.

Aratron is a specialist in delivering components andsolutions for linear and rotating motion to machinemanufacturers in the Nordic Region. The key to successis the company’s applications engineers who work closeto customers as well as suppliers.

Aratron’s specialistsare knowledgeable

about the challengescustomer’s face

16

BUSINESS AREA ADDTECH COMPONENTS

BusinessThe companies in business area AddtechComponents sell components and sub-systems, and develop solutions in thefields of connection technology, electro-mechanics and control systems. The com-ponents are usually incorporated as sub-components in the customers’ own pro-ducts.

Addtech companies often participatein the development work carried out atcustomer design and developmentdepartments.

This raises the requirements for cutting-edge competence, flexibility andability to cooperate. Participation in thecustomer’s mission-critical developmentwork generates a deep relationship withthe customer.

Business is focused on customizedproducts. The companies in the businessarea adapt and assemble sub-systemsbased on components purchased from anetwork of suppliers with leading marketpositions.

Development during 2002/2003Addtech Components enjoyed a gooddevelopment during the past year. Thereare several explanations to this, but oneimportant success factor is the project-based involvement in manufacturingindustry.

The projects often run over a periodof several years, which makes them rela-

tively insensitive to temporary economiccycles.

A natural part of Addtech’s day-to-day business is to acquire companies andbusinesses. R&K Gruppen was acquiredduring the year, and this strengthenedAddtech’s position in, among other fields,medical electronics. Bergström

Instrument, with operations in opticalsolution, was also acquired.

MarketThe main customer group is Nordicmanufacturers and its aftermarket.Important market segments are the vehi-cle and electronics industries. Productsand services supplied by the company areprimarily included as sub-components inthe customers’ own products. This meansthat customers are so-called OEM custo-mers. Examples of customers are Volvo,Scania, Timberjack, Allgon, Atlet,Siemens, BT Industries and Gambro.

In the Nordic markets Addtech

Component’s competitors include parts ofOEM International, Beijer Electronicsand ElektronikGruppen.

Thanks to initiatives on developmentof tailor-made solutions and complexsub-systems created in close cooperationwith the customer, the business area hasbeen able to resist the pricing pressuresthat have primarily afflicted standardcomponents.

The futureCustomers continue to focus on theircore operations and often choose a small-ler number of companies as their suppli-ers. This fact, and the requirements fordeeper relationships and partnerships, iswell in line with Addtech Componentsorientation.

There is also a need among customersto profile their products by giving themtheir own identity. To achieve in that pur-suit requires components that are uniqueand adapted to the customers’ needs.Also this speaks for AddtechComponents, who offers this type of solu-tions.

ADDTECH COMPONENTS IN A MINUTEBusiness: Business area Addtech Components is focused on electronic and electro-mechanicalcomponents. A major portion of sales is made of customer-specific solutions that are part of thecustomers’ products.

Market: Manufacturers in the Nordic Region. Focus on the electronics and vehicle industries.

Customers: Volvo, Scania, Timberjack, Allgon, Atlet, Siemens, BT Industries and Gambro.

Addtech Components is focused on electronic and electromechanical components.The business area has about 170 employees and revenues of MSEK 585, equivalentto 25 percent of Addtech’s revenues.

Addtech Components’ customers demand competence and participation

The business is focusedon customized products

17


IMPORTANT KEY INDICATORS 2002/ 2001/ 2000/2003 2002 2001


ADDTECH COMPONENTS – EXAMPLES OF PRODUCTS AND SERVICES

PRODUCTS EXAMPLES

Electronics

Industrial control systems Industrial computers for monitoring telephone networks, for example. Touch panels/displays for ticket and cash dispensers, etc.

Electronic components Components for satellite and marine communications equipment.

Electro-mechanics

Compact motors DC motors for the positioning of fiber in fiber welding. Step motors for controlling ventilation in cars. Synchronous motors for heating and ventilation in buildings. Brushless servomotors for controlling laser instruments.

Connection technology Contactors and wiring for use in environments imposing high demands such as wind-power plants and drilling rigs.Contactors for base stations.

Switches Micro-switches and push-buttons on control panels in lift functions and white-goods, status indication in doors and hatches, for example.

Controls Joysticks for controlling construction equipment and industrial applications.

Measuring and testing Camera solutions for monitoring fiber joining. Measuring instruments for electric power applications.

SERVICES

Project management, design, prototype construction, assembly, and quality assurance.


Revenues by customer segments

Revenues by market

Addtech Components, 25%

Sweden 59%

Finland 10 %

Other 7%Norway 2%

Denmark 22%

Vehicles 18%

Energy 9%

Medical technology 11%

Electronics 12%

Forest & process 2%

Other 17%

Mechanical 25%

Telecom 6%

It is often the small applicationsthat play a central role in the products offered to the market byBeving Compotech. Being a part ofthe customer’s development workleads to deep customer relation-ships. Read more about the company at www.compotech.se.

19


BEVING COMPOTECH

Focus is on customers in need of unique solutions and high competence

Common for Beving Compotech’scustomers is that they are manu-facturers, but they are found in

many different industries. Some of thelargest customers are in telecom, machin-ery manufacturing, medical technologyand climate control.

Beving Compotech operates in thefirst instance as a project leader andproblem solver. Obviouslythe company has keen salesfocus, but sales often occurwhen the project leadertogether with the customercreate a unique solution thatgives the customer clearadded value. Development or designengineers are typically the customer’srepresentative who places the orders. Thedemands on Beving Compotech projectleaders are therefore high.

Individually adapted solutions– Our project leaders are themselvestechnicians and we always want to talk toour customers’ technicians. It is togetherwith them that they can develop the bestsolutions for the customer’s problems,says Jan Eriksson, President of BevingCompotech.

The shipment to the client may be

composed of standard components aswell as individually adapted solutions.Regardless of what is being delivered tothe customer, Beving Compotech workswith market-leading suppliers.

In the telecom sector, for instance,several of the large players choose to out-source their production. For BevingCompotech this means an increase in

export share, since manu-facturing that was previous-ly performed in Kista, or inNorrköping, is now done inPoland, Hungary or Asia.

– Inquiries in telecomare now coming from other

countries, which places new demands onour business and our staff, says JanEriksson.

The base for Beving Compotechremains Swedish and Nordic companies,however. Sweden is quite advanced inseveral of the areas on which BevingCompotech focuses. This is true in themedical-technical area, for instance,where the development is very rapid. Inthis area Beving Compotech works pri-marily with small precision motors usedin surgery where small motor-driveninstruments work deeply into the body.

The security industry is also an impor-

tant market for Beving Compotech.Several of the products and solutionsworked with are very well suited forsecurity companies. Beving Compotechthus for instance delivers the motors forthe optics in surveillance cameras, circuitcard solutions for security cases and sen-sors for personal and machinery security.On this market Jan Eriksson sees growthduring the coming years as securityawareness increases.

Climate control – a hot areaAlso in the area usually called HVAC, orclimate control, there is great growthpotential. In order to reduce energy con-sumption and to satisfy growing demandsfor comfort, it is important to create everbetter solutions for climate control, whichfor Beving Compotech means that themarket grows.

Another area in which BevingCompotech is highly experienced is HMIsolutions, i.e. the interface betweenhumans and machines. Examples hereofare push-button panels for level selectorsfor elevators, where Beving Compotechhas developed a solution adapted to thecustomer’s needs.

Being a part of the Addtech Groupbrings several advantages to BevingCompotech, like access to a network ofexperienced colleagues, and there alsoadvantages in the relations with cus-tomers.

– We often do business with majorglobal companies, and for them the factthat we are a part of a listed group with astrong financial position inspires confi-dence, says Jan Eriksson.

Beving Compotech is an expert in creating unique customersolutions in the areas of motors, switches, sensors and displays. Thanks to extensive experience, high technical competence and long-standing customer relationships,Beving Compotech often participates as a partner in the customers’ development work.

”We alwayswant to talk toour customers’

technicians”

PERSONNEL AND COMPETENCE

20

Addtech is a decentralized organ-ization where each subsidiaryhandles personnel issues inde-

pendently. Personal development, busi-ness acumen and freedom under respon-sibility are central concepts in theGroup’s work with personnel and compe-tence.

This method of working has proved tobe successful and has led to manyemployees staying and developing in theGroup.

Competitive advantageIt is important for Addtech as well as forthe individual employee that there is con-tinual competence development. Suchdevelopment takes the form of internaland external training. The internal train-ing program, The Business School, has animportant function to increase the com-petency within Addtech.

The managers of Addtech’s businessesand subsidiaries are also assembled regu-larly. This stimulates dialogue arounddevelopment issues in the various areasof the Group.

The Business School is an importantforum for the corporate culture that hasbeen crucial to Addtech’s successfuldevelopment.

Competence development also occursin close cooperation with technicallyleading suppliers. An example of this is

that key personnel from Addtech regu-larly spend time with suppliers in Europe,the United States and Asia.

Many of Addtech’s employees have atechnical background, which is necessarysince most of the sales work contains ele-ments of technical problem-solving.

Development opportunities in theGroup are good, and recruitment to lead-ing positions is largely internal. Severaloperative managers in Addtech have, forexample, previously worked with techni-cal support or as sales representatives inthe Group.

Employees in several countriesThe average number of employees in theGroup declined during 2002/2003 by

7 percent to 1 072 persons (1 155).The Group has employees in the

Nordic Region, Germany, the BalticStates, the United Kingdom, Austria andPoland. More than half of the employeesare employed in Sweden, and the propor-tion of women in the Group was about 28percent during the year (27).

Personnel turnover, adjusted foreffects of the action program implement-ed during the year, was 10 percent (11).The average period of employment inAddtech is about eight years and theaverage age of employees is 40 years.

Active efforts with equalityThe management of Addtech feels that itis important for all resources in theGroup to be utilized in the best possibleway.

This is accomplished through, amongother things, giving men and womenequal opportunities for personal develop-ment. An equality policy adopted by theBoard of Directors underscores thisapproach.

Personal development strengthens AddtechAddtech works actively tocreate a stimulating workenvironment for its employ-ees. Competence is animportant competitiveadvantage that has to beconstantly developed.

Personal development,business acumen and

freedom under responsibility are central

concepts at Addtech

KOMPETENS OCH PERSONAL

21

The Business School spreads the corporate culture

The Business School offers severaldifferent courses at different lev-els, all of which are well adapted

to the tasks and experience of the employ-ees. The training covers everything from abasic course in Addtech’s vision and cor-porate philosophy, to advanced training inbusiness leadership. Common to all train-ing courses is that they to a large extentare based on practical exercises and casestudies.

Establishing new contactsThe very awareness of and feeling forbusiness acumen and sales work are thecentral themes of several training coursesat The Business School, but the school also has an important function as culturebearer.

– The Business School creates new

contacts among the Group’s companies,which is important. Participants also get achance to get to know persons from busi-nesses similar to their own, says HåkanFranzén, who is responsible for TheBusiness School.

Tailor-made trainingThere are a total of six different trainingcourses. The latest addition is a newcourse in managerial economics startedduring the past year. The intention is forall persons working with accounting andfinance to take the course, which focuseson increased knowledge about businessacumen and the Group’s routines for prac-tical accounting and finance work.

About 240 persons have participated insome form of training at The BusinessSchool during the year and interest on the

part of employees as well as their man-agers is great.

– Employees see opportunities forincreasing their competence, and sub-sidiary managers see an opportunity to getmore businesslike and profitability-mind-ed personnel, says Håkan Franzén.

Peter Johansson is President of Add-tech company Tube Control, a supplier ofhydraulic systems. He is very positive toThe Business School and has sent severalco-workers to courses during the past year.

– It is a privilege to be able to send thepersonnel to get advanced training, whichis also based on the Group’s values. Alsothe social part – making contacts with oth-ers in Addtech – is valuable, says PeterJohansson.

The vision for The Business School isto train, further develop and motivate thestaff to become successful employees inAddtech. This is achieved by givingemployees tools to develop distinct busi-ness acumen, to understand the corporateculture, the profitability thinking and theGroup’s value-creating overall philosophy.

“I believe that I derive the most prac-tical insight into developing my ownsales technique based on the trainingI have received.”

Sandro Perrsini, Beving Elektronik

"I was very satisfied. I felt that thecourse gave me a lot that I was eagerto use in my continued work. I amreally looking forward to the nexttraining session."

Fredrik Strandahl, Aratron

“The course was good. ‘The step-by-step method’ gave me the greatestinsight. My boss and I set up goalsfor the training and will have a fol-low-up later.”

Kalle Finneman, Tube Control

Some of the comments after one ofthe training sessions conducted dur-ing the year.

The Business School is an excellent tool to spread compe-tence and the corporate culture in the entire AddtechGroup. Opportunities to discuss concrete situations andexchange experiences develop the method of work.

RISK AND SENSITIVITY ANALYSIS

22

Addtech’s result and financialposition, as well as its strategicposition, are affected by a

number of internal factors over whichAddtech exerts control, and a number ofexternal factors where the possibilities ofaffecting the course of events is limited.The most important risk factors forAddtech are the state of the economy,the competitive situation in combinationwith structural changes and the develop-ment of foreign exchange rates. Thestate of the economy and continuedstructural changes were the two risk fac-tors that impacted Addtech the mostduring the 2002/2003 operating year. Thesingle-most consequential factor was thecontinued weak telecom market result-ing in low levels of capital spending.

State of the economyThe market in which Addtech is activelargely follows the general trend in indus-try. Thanks to industry diversification,which means that Addtech’s customersfind themselves in different phases of theeconomic cycle, and focus on a numberof niches, Addtech becomes cyclicallyless sensitive. And thanks to Addtech’semphasis on technical service, supportand consumables for end users, and after-market, the sensitivity to economic cyclesis reduced further.

Competitive situationThe number of players in Addtech’s mar-ket is shrinking in number but growing in

size since a consolidation of technologytrade is in progress. This leads to gradual-ly mounting competition, with certainpricing pressures as a result, at the sametime as it becomes harder for new com-panies to establish themselves. Addtech’sstrategy includes achieving market-lead-ing positions within specific niches withan offering of products and serviceswhere price is not the deciding factor.

Structural changes among customersAs structural changes and consolidationamong customers progress, the require-ments for added value in supplier offer-ings are accentuated. To meet theserequirements the units that act outward inthe market must be of a certain stature interms of financial strength as well as interms of service content and productofferings. If Addtech fails to live up tothese requirements, lower sales mayresult.

There is a clear trend in, among oth-ers, the telecom industry to outsourceparts of the production to contract manu-facturers. This involves a risk as well asan opportunity for Addtech, since thecontract manufacturer may choose othersuppliers at the same time as new busi-ness opportunities may present them-selves.

Financial policyThe financial risks are defined in theGroup’s financial policy: currency, inter-

est and credit risks. The policy expressesthe ambition to eliminate or reduce theserisks, and responsibility and authority forrisk management. The policy prescribesthat liquid funds not tied up in currentoperations are to be invested in financialinstruments with at least the same ratingas the Swedish Government, or withestablished Swedish banks. Currencyswaps are used from time to time to evenout surpluses and deficits in different cur-rencies. In addition to the estimated capi-tal need for the following year, an extra20 percent should be secured in the formof available liquidity or through creditcommitments.

Currency policyThe foreign exchange risk the Group isprimarily exposed to is exchange ratechanges on future payment flows. TheGroup’s main currency flows are attribut-able to imports from Europe, Asia andNorth America. During 2002/2003,imports comprised more than 85 percentof purchases. The most important curren-cies for Addtech are EUR, USD, JPY,GBP and CHF. To the greatest extentpossible, Addtech eliminates the effectsof exchange rate changes by using cur-rency clauses in its customer contracts, bysales in the same currency as purchasesand by forward contracts.

When judging the impact of foreignexchange rate fluctuations on businessvolume and income, it is of the utmostimportance also to take into considera-

Analysis of risks and sensitivity in Addtech’s business

RISK AND SENSITIVITY ANALYSIS

23

Effect of certain factors on AddtechAddtech’s income is affected by a number offactors. Those with the greatest impact are list-ed in the table. Reported effects should onlybe seen as an indication and do not includeany effect of offsetting action the Companymay take upon the occurance of such events.

A small volume increment in the various busi-nesses of the Group can be expected to have apositive effect on income at about the samelevel as the gross margin in each respectivebusiness. However, after a certain volumeincrease, the business will reach a plateauwhere resources must be expanded. Steppedeffects present themselves, which tends tolower the income effect of incremental busi-ness volume to a level approaching the operat-ing margin.

In the event of declining volumes, the negativeeffect on operating income can be assumed tobe greater in the short term than the corre-sponding positive effect resulting from a vol-ume increase. Active measures must be takento meet the negative effect so that it in the

slightly longer term will approach the operat-ing margin.

It should also be noted that the Group’s differ-ent units operate under varying conditionswith respect to, for instance, gross margin and

resource utilization. This leads to varying abili-ty of coping with a volume increase within theframework of the existing operations, orreducing resources in the event of a volumedecrease.

tion the dynamic effects a foreignexchange rate change may give rise to.By dynamic effects is meant the effect ondifferent countries’ competitive power,for instance.

The accounts are also affected bytranslation of subsidiary results and netassets to Swedish kronor. These currencyrisks are not hedged at the present time.

Net currency flows, MSEK2002/2003 2001/2002

EUR –170 –190

USD –80 –80

JPY –50 –50

GBP –40 –50

CHF –30 –60

Future level of capital expendituresDuring the past three years capitalexpenditures in tangible fixed assets haveamounted to MSEK 94, most of it in ITequipment, machinery and other equip-ment.

Investments in corporate acquisitionsamounted to MSEK 249 during the sameperiod.

The most important determinant ofthe future level of capital expenditurestherefore is the rate of corporate acquisi-tions.

Seasonal variationsAddtech’s business is distinguished bylimited exposure to seasonal variations.The business volume normally followsthe seasonal pattern of producing indus-try, which means lower sales during thesummer months.

Based on a historical pattern, about 45percent of the result is generated duringthe first two quarters, i.e. the periodApril – September, and about 55 percentduring the last two quarters of Addtech’sfinancial year, October – March.

Major deviations from this pattern canoccur in the event of rapid cyclicalchanges during a financial year.

SENSITIVITY ANALYSIS

Factor Change Effect on operating income, MSEK

Sales volume +/–5% +10/–30Payroll expense +3% –15Currency effect on purchases and sales– EUR +/–5% –9/+9– USD +/–5% –4/+4– JPY +/–5% –2/+2– GBP +/–5% –2/+2– CHF +/–5% –1/+1Translation effects– EUR +/–5% +1/–1– DKK +/–5% +1/–1

ENVIRONMENT, QUALITY AND ETHICS

24

Addtech pursues an active agendafor environmental quality and ethics

EnvironmentSince an overwhelming portion ofAddtech’s operations is related to tradingand distribution, it is natural that theenvironmental aspects affecting theGroup are linked to distribution andpackaging, and to the environmentalimpact of suppliers. The environmentalaspects affecting the Group can be sum-marized in three key words: Waste,Transport and Product.

Waste is a concern mainly for themanufacturing companies, but also forcompanies in the Group that sells prod-ucts of such a character that the seller isresponsible for recovering the productswhen they have been consumed.

Transport is a concern for the entiredistribution chain from suppliers, viaAddtech and to the customers. A signifi-cant part of the environmental aspect inAddtech relates to the travel of sales rep-resentatives, which is done in ways asenvironmentally friendly as possible.

Product means that environmental con-siderations must be made throughout theentire product cycle. If, for instance, equiv-alent products can be purchased on similarterms in different parts of the world, thealternative where transportation is mostenvironmentally economical should bechosen. In addition, Addtech has the ambi-tion to make the composition and assem-bly of delivered products should also be asenvironmentally friendly as possible.

The environmental work is an inte-grated part of Addtech’s business opera-tions. This work is conducted both locallyin subsidiaries and at the Group level.The starting point of these efforts is theGroup-wide environmental policy. Someten companies in the Group are certifiedaccording to the ISO 14001 environmen-tal management system. Addtech hasstaff that aids companies in the Groupwith environmental work and the certifi-cation process.

QualityMuch like the environmental work, thequality work is a natural extension of

business operations. It encompasses allaspects of the operation, from purchasingroutines to inventory management anddeliveries. Before a new supplier isengaged, a careful evaluation from aquality point of view is made. The qualityof deliveries to the Group is also fol-lowed up.

Measuring and evaluating is basic tothe efforts of maintaining and improvingquality.

How the work is carried out in detailvaries from unit to unit. One modelapplied by several companies is that anumber of quality goals have been set upand are measured each month.

Addtech is working continuously to control and improve quality throughout the businessprocess. A great deal of emphasis is also placed on environmental and ethics issues.Giving such issues a lot of attention is positive for employees, customers and other stakeholders.

ENVIRONMENT, QUALITY AND ETHICS

25

Environmental policyThe environmental policy of theAddtech Group expresses a desire totake our part of the responsibility toimprove the environment and to con-tribute to a sustainable development.Recycling of resources will be animportant aspect of the Group’s busi-ness operations.

The environmental work will beconducted within the framework ofour business model and will be an inte-grated part of all operative work. Withhigh competence among our co-work-ers, and by constantly developing ourknowledge about environmentaleffects, we are in a position to take aholistic approach to environmentalissues. Environmental measures will betaken as far as economically and tech-nically feasible, and motivated from anenvironmental point of view. Theresponsibility for day-to-day environ-mental work rests with each individualcompany in the Group.

In practice, the environmental policy meansthat the companies in Addtech will workaccording to the following tenets:

• Addtech will minimize the generation ofwaste, and prevent any risks for emissions.

• Environmental performance is taken intoaccount when selecting products and modeof transportation.

• Addtech will continually influenceemployees and suppliers to pursue openand dedicated environmental work.

• Addtech’s environmental work will leadto constant improvements and current legalrequirements are considered to the mini-mum acceptable threshold for operations.

The measurement includes six points,which include time of delivery to cus-tomer, and the condition of the goodsupon arrival from the supplier. The meas-urement gives rise to an index numberthat is the basis for improvements.

Most of the Group’s units work inaccordance with quality management sys-tems ISO 9001 and 9002. By May 2003,about half of the Group’s companies hadreceived certification.

Independent certification companies

perform regular audits to ensure compli-ance with the requirements of certificatesissued. Failure to comply means revoca-tion of certification.

–The benefit to the customer of activequality work and certification is obvious –our customers receive a guaranty from athird party that our products and process-es meet set quality goals, says MatsBrottare, coordinator for environmentaland quality issues in business areaAddtech Components.

EthicsEthics issues were on the agendathroughout the past year. The purposehere is to ensure that Addtech assumessocial responsibility and displays ethicalcommitment in its role of employer, in itsbusiness relations, towards the capitalmarkets and towards society in general.This work has resulted in a number ofconcrete criteria and guidelines for eachof these areas.

SHARE INFORMATION

26

The Addtech share

Addtech’s class B share is listed on the O-list of the Stockholm Stock Exchange since September 3, 2001.

Market performance of the shareThe bid price of the Addtech share decli-ned during the financial year by 38.6 per-cent. The price rose by 4.9 percent duringthe part of the previous financial yearwhen the share was listed. The All-Shareindex of the Stockholm Stock Exchangedeclined by 40.0 percent and advanced by4.8 percent, respectively. During the peri-od April 1, 2003 until June 23, 2003 theAddtech share advanced by 38.5 percent,whereas the All-Share index of theStockholm Stock Exchange rose by 12.1percent during the same period.

The highest paid price during the yearwas SEK 44. The lowest price was SEK25. The last paid price before the end ofthe financial year was SEK 27 on March28, 2003.

During the period from April 1, 2002until March 31, 2002 5.2 million sharesvalued at MSEK 150 were traded.Relative to the average number of sharesoutstanding, this is equivalent to a turn-over rate of 20 percent (29). Brokendown by trading day, a total of just shortof 21 000 Addtech shares per day (30 000) were traded at an average valueof about SEK 620 000 (830 000).

Share capitalThe share capital in Addtech amounts to

SEK 55 728 464 and is divided into 1 106 502 class A shares and 26 757 730class B shares. The nominal amount ofeach share is SEK 2 for both classes.Each class A share entitles its holder toten votes and each class B share entitlesits holder to one vote. All shares entitleits holder to the same right to dividends.Only the class B share is listed on theStockholm Stock Exchange.

Repurchase of own sharesThe annual general meeting of sharehol-ders held in August, 2002 authorized theBoard of Directors to acquire up to 10percent of all class B shares outstanding.During the financial year the Companymade purchases of a total of 750 000shares at an average price of SEK 28.09.The total number of shares held in treasury is 2 081 400 with an averageprice of SEK 32.41. Shares held in treasury are equivalent to 7.5 percent ofthe number of shares issued and 5.5 per-cent of the votes.

Incentive programIn December 2001 56 members of seniormanagement were awarded a total of 700 000 personnel options. To make thispossible, an extra general meeting of sha-reholders held December 17, 2001 resol-

ved a transfer of up to 700 000 class Bshares in the Company in connection withthe possible redemption of these options.

The redemption price has been set atSEK 44.80, which is equivalent to 110percent of the average market price ofthe Addtech share during the periodDecember 3 through December 7, 2001.The redemption period for the options isJuly 19, 2004 – February 18, 2005. If alloutstanding personnel options are exerci-sed in full, the number of shares outstan-ding increases by 2.7 percent.

Proposals to the regularly scheduled Annual GeneralMeeting 20031. Dividend

The Board of Directors proposes a divi-dend of SEK 1.50 per share (1.20).2. Cancellation of repurchased shares

The Board of Directors has decided topropose to the regularly scheduledAnnual General Meeting that 1 350 000of the repurchased shares be cancelled.3. Extension of mandate to

repurchase shares

The Board of Directors has decided topropose to the regularly scheduledAnnual General Meeting that the manda-te to repurchase own shares in line withprior AGM resolution be extended.

SHARE INFORMATION

27

Size classes

% of sbare No of % ofNo of shares capital owners owners

1–500 1 2 310 67501–1 000 2 512 151 001–10 000 5 511 1510 001–50 000 5 65 250 001–100 000 3 12 0100 001– 84 40 1

100 3 450 100%

Owners by category

Owners by category Stake of capital

Foreign owners 3.3%Swedish owners 96.7%of whomInstitutions and mutual funds 76.5%Private investors incl. closely held entities 23.5%

Financial indicators

2002/2003 2001/2002

Earnings per share, SEK 2.43 1.92P/E ratio 11 22Dividend per share, SEK 1.50* 1.20Payout ratio, % 5.6 2.8Last paid quotation, SEK 27 43Average number ofshares outstanding 26 445 709 27 495 817Number of shares outstandingat year-end 25 782 832** 26 532 832Number of shareholdersat year-end 3 450 3 693

* Board of Directors’ proposal

Addtech’s largest shareholders March 31, 2003

Number of Number of Percentage ofShareholder class A shares class B shares Capital Votes

Robur 4 300 167 16.7% 12.0%

Pär Stenberg 279 152 999 722 5.0% 10.6%

Anders Börjesson (family) 350 966 20 500 1.4% 9.9%

Tom Hedelius (family) 335 966 5 400 1.3% 9.4%

SEB Fonder 1 864 600 7.2% 5.2%

AMF Pension Fonder 1 504 200 5.8% 4.2%

Handelsbankens Pensionsstiftelse 1 500 000 5.8% 4.2%

Alecta 1 407 440 5.5% 3.9%

Carl T Säve 30 000 973 982 3.9% 3.6%

Fjärde AP-fonden 1 075 775 4.2% 3.0%

Livförsäkrings AB Skandia 895 100 3.5% 2.5%

AMF Pensionförsäkrings AB 800 000 3.1% 2.2%

Lannebo Fonder 691 354 2.7% 1.9%

Handelsbanken 630 000 2.4% 1.8%

Didner & Gerge Fonder 587 600 2.3% 1.6%

Total, 15 largest shareholders*** 996 084 17 255 840 70.8% 76.1%

***Percentage of capital and votes calculated not including shares held in treasury by Addtech AB.

Share price Addtech B

Analysts who follow AddtechAlfred Berg: Gustaf Lindskog

Handelsbanken Investment Banking:Markus Almerud

Remium Securities: Robert Ahldin

Total number of shares outstanding 27 864 232 **Total number of votes 37 822 750**) The difference between total number of shares and total number of shares outstanding is theshares repurchased by Addtech (2 081 400 class B shares).

Evolution of share capitalClass A Class B

Change No of Proportion of Votes Proportion Change No of Proportion of Votes Proportion Event number shares share capital of votes number shares share capital of votes

At time of listing 1 840 286 7% 18 402 860 41% 26 023 946 93% 26 023 946 59%

2001/2002Conversion of class A

shares to class B sh. –726 808 1 113 478 4% 11 134 780 29% 726 808 26 750 754 96% 26 750 754 71%

2002/2003Conversion of class A

shares to class B sh. –6 976 1 106 502 4% 11 065 020 29% 6 976 26 757 730 96% 26 757 730 71%

Addtech B AX All-Share index No of shares changing hands per month

Number of shares in thousands

KEY INDICATORS AND DEFINITIONS

28

MSEK unless otherwise stated 2002/2003 2001/2002 2000/2001 1999/2000 1998/1999

Net revenues 2 275 2 360 2 502 2 023 1 725Operating income 98 86 214 161 153Operating income not including itemsaffecting comparability 94 85 201 161 153Financial income and expense -5 -5 -7Income after financial items 93 81 207Net income for the year 64 53 149

Intangible fixed assets 29 13 -Tangible fixed assets 159 176 211 167 183Financial assets 7 6 7 8 7Inventories 313 347 376 269 234Short-term receivables 373 407 472 344 287Liquid funds 97 92 151Total assets 978 1 041 1 217

Shareholders’ equity 432 417 415Minority interest 3 6 6Interest-bearing liabilities and provisions 101 166 167Non-interest-bearing liabilities and provisions 442 452 629 395 329Total shareholders’ equity and liabilities 978 1 041 1 217

Capital employed 536 589 588Operating capital 439 497 437 393 382Financial indebtedness 4 74 16

Operating margin, % 4.2 3.6 8.6 8.0 8.9Profit margin, % 4.0 3.4 8.3Return on equity, % 15 12 36Return on capital employed, % 18 15 38Equity ratio, % 44 41 34Debt equity ratio 0.2 0.4 0.4Interest coverage ratio 8.6 6.9 12.8

Earnings per share, SEK 2.43 1.92 5.36Earnings per share not including itemsaffecting comparability, SEK 2.32 1.91 5.02Cash flow per share, SEK 6.39 1.49 8.00Shareholders’ equity per share, SEK 16.80 15.70 14.90Dividend per share, SEK 1.50* 1.20

Cash flow from current operations 169 41 223Cash flow from investment operations -41 -9 -220Cash flow from financing operations -123 -90Cash flow for the year 5 -58Average number of employees 1 072 1 155 940 811 723Number of employees at year-end 1 035 1 100 1 162 823 758

* As proposed by the Board of Directors.The Addtech Group was capitalized March 31, 2001. Certain data have therefore been omitted. Comparative data for 2001/2002 andyears prior are pro forma and based on the assumptions presented in Addtech’s prospectus in August 2001.

DefinitionsCapital employedBalance sheet total, less non-interest-bea-ring provisions and liabilities.

Cash flow per shareCash flow from current operations, divi-ded by average number of shares outstan-ding.

Debt equity ratioInterest-bearing liabilities in relation toshareholders’ equity plus minority inter-est.

Earnings per shareIncome after taxes in relation to averagenumber of shares outstanding.

Equity ratioShareholders’ equity, plus minority inter-est in percent of balance sheet total.

Interest coverage ratioIncome after financial items, plus interestexpense, plus/minus translation differen-ces in relation to interest expenseplus/minus translation differences.

Net interest-bearing liabilitiesInterest-bearing liabilities, less liquidfunds and short-term investments.

Operating capitalCapital employed, less liquid funds andshort-term investments.

Operating marginOperating income in percent of net reve-nues.

Personnel turnoverNumber of employees who have left theCompany in relation to average numberof employees.

Profit marginIncome after financial items in percent ofnet revenues.

Return on capital employedIncome after financial items, plus interestexpense, plus/minus translation differen-ces in percent of average capital employed.

Return on equityIncome after taxes in percent of averageshareholders’ equity.

Return on operating capitalOperating income in percent of averageoperating capital.

Shareholders’ equity per shareShareholders’ equity divided by the num-ber of shares outstanding at year-end.

Five-year summary – key indicators

ADMINISTRATION REPORT

29

The Board of Directors and the Presidentof Addtech AB (publ), organizationnumber 556302-9726, hereby submit theirAnnual Accounts and consolidated finan-cial statements for the 2002/2003 operat-ing year.

BusinessAddtech is a leading technology tradinggroup where business acumen is com-bined with cutting edge competence. Onthe basis of high-tech industrial compo-nents and systems, Addtech togetherwith its customers and suppliers createssolutions that lead to better products aswell as optimized production processes.Addtech contributes technical as well aseconomic added value to its customers.During the 2002/2003 operating year theGroup was organized in three businessareas: Production Systems, TransmissionSystems and Components Systems. Thebusiness area distribution was changedstarting with the new operating year, andthe three business areas are AddtechEquipment, Addtech Transmission andAddtech Components.

Addtech is listed on the O-list of theStockholm Stock Exchange sinceSeptember 2001. The name Addtech is aclear expression of the Group’s ambition,that of delivering added value in everysituation and in every relationship.

Net revenues and resultsNet revenues of the Group for the finan-cial year amounted to MSEK 2 275 (2 360). MSEK 75 thereof consisted ofadded business volume attributable tonewly acquired units. The drop is due pri-marily to lower sales of investment-typeproducts as a consequence of a weakerindustrial economy.

Operating income amounted toMSEK 98 (86) and income after financialitems was MSEK 93 (81).

Foreign currency translation effectsaffected revenues negatively by MSEK11 and operating income by MSEK 0.

Included in operating income are netitems affecting comparability of MSEK 4(1) pertaining to the sale of real propertyfor a capital gain of MSEK 13 and costs forrestructuring of the Group’s telecom-ori-ented business in an amount of MSEK 9.

Much like the year before, last yearwas profoundly affected by the weakermarket situation for the Group’s telecomand electronics-related operations, andespecially for investment-type products.No perceptible improvement has beenseen. Through its deliberate change offocus, the Group’s dependence on thissegment has diminished and the telecomsector now accounts for about 10 percentof the Group’s sales.

Despite an overall recession, mostunits were able to maintain sales at a sat-isfactory level. For businesses involved inniche production of transmission prod-ucts and machinery components, the situ-ation was stable during the year withgood capacity utilization. Sales of compo-nents and sub-systems from the Group’snarrowly niched units to the machineryand vehicle industry showed a positivedevelopment during the year.

Cost containment measures imple-mented during the past year have low-ered overall costs by about MSEK 50compared to the preceding year.

Income after taxes amounted toMSEK 64 (53), or SEK 2.43 per share(1.92). The effective tax rate was 30 per-cent (32).

Business areasComponent SystemsNet revenues increased by eight percentto MSEK 993 (923). The revenue incre-ment from newly acquired units amount-ed to MSEK 75. Operating incomeincreased to MSEK 71 (61).

The favorable business climate for thebusiness area continued during the finan-cial year. Demand for components forspecial vehicles and trucks, as well asapplications for medical electronics wasgood. Sales of batteries and energy com-ponents also saw a positive development.

Production systemsNet revenues declined by 25 percent toMSEK 426 (570). The operating resultwas MSEK –14 (–16). Weak demand forproduction equipment, which during lastyear was mostly linked to a downturn inthe telecom sector, became somewhatmore widespread during the year.

Sales of consumable supplies by thebusiness area continued its favorabledevelopment. By actively promotingmaterials and supplies, parts of the busi-ness area have created a product mix thathas acted to stabilize the unit.Dependence on the telecom sector hasdiminished as a result.

The result was affected positively dur-ing the period by the cost containmentmeasures implemented last year.Overhead was about MSEK 45 lowerthan during the corresponding period oneyear ago.

Transmission systemsNet revenues declined by one percent toMSEK 859 (869). Operating incomeamounted to MSEK 38 (40).

Aside from a weaker market situation

Administration ReportApril 1, 2002 – March 31, 2003


30

in Finland, demand for most of the busi-ness area’s products was stable. Demandfor hydraulic components from the truckindustry and for special vehicles contin-ued to be strong.

During the latter part of the yearresults were charged with costs for meas-ures to improve efficiency.

Profitability and financial positionThe return on capital employed was 18percent (15) and the return on equity was15 percent (12).

The equity ratio stood at 44 percent atthe end of the financial year (41).Shareholders’ equity per share was SEK 16.80 (15.70).

Cash flowCash flow from current operationsamounted to MSEK 169 (41). Most ofthe improvement from last year is attrib-utable to working capital freed up and tothe fact that last year was charged withtax payments pertaining to the capitaliza-tion of the Addtech Group in connectionwith its distribution from Bergman &Beving in September 2001.

Investment in businesses and plant &equipment amounted to MSEK 41 (13)and MSEK 30 (21), respectively. Disposalof fixed assets amounted to MSEK 30during the year (25).

Financing operations were affected bya dividend payment of MSEK 32 duringthe year, and by repurchase of ownshares in the amount of MSEK 21. TheGroup’s net financial indebtednessdeclined by MSEK 70 to MSEK 4.

Corporate acquisitions and disposalsIn the early part of the financial year,possession was taken of BergströmInstrument, with a focus on optical solu-tions. R&K Gruppen was acquired dur-ing the third quarter. This acquisitionstrengthens the Group’s offer to cus-

tomers in medical technology and otherareas. The interest of the minority inAustrian subsidiary FB Ketten HmbHwas also acquired during the third quar-ter.

An agreement has been concluded for the sale of Austrian subsidiary Betech Seals HmbH, with sales of aboutMSEK 2 during the year. The LEO law isapplicable to the sale, which is thereforesubject to approval by a general meetingof shareholders in Addtech AB.

EmployeesAt financial year-end the number ofemployees was 1 035 (1 100). Adjustedfor acquisitions, the number of employ-ees declined by 84 persons. The averagenumber of employees during the yearwas 1 072 (1 155).

Repurchase and cancellation of own sharesDuring the financial year a total of 750 000 shares were repurchased at anaverage price of SEK 28.09. The totalnumber of shares held in treasury standsat 2 081 400, at an average price of SEK32.41. Shares held in treasury constitute7.5 percent of the shares issued and 5.5percent of the voting stock.

The Board of Directors has decided topropose to the Annual General Meetingto cancel 1 350 000 repurchased shares.

The Board of Directors has alsodecided to propose to the AnnualGeneral Meeting that the Board ofDirectors be given a renewed mandate tobuy back own shares. The proposalincludes a mandate for the Board ofDirectors to buy back shares during theperiod until the next following AnnualGeneral Meeting and to acquire up to thenumber of shares so that the number ofshares held in treasury from time to timedoes not exceed 10 percent of the issuedshares. Repurchases shall be made viathe Stockholm Stock Exchange. The

mandate is proposed to include theoption to use treasury shares as paymentfor acquisitions, or to sell treasury sharesin ways other than via the StockholmStock Exchange to finance acquisitions.

Environmental impactThe Group conducts operations requiringa special permit in three Swedish sub-sidiaries. None of the Group’s companiesare involved in environmentally relateddisputes.

Active environmental work is con-ducted in the Group to reduce theGroup’s environmental impact. Some tencompanies are certified according to ISO14001.

Work of the Board of DirectorsAddtech’s Board of Directors consists offive directors, including the Company’sPresident. Members of the Group’s man-agement group attend board meetings tomake presentations and as secretary.

During the operating year the Boardof Directors held four meetings, onestatutory meeting and two meetingsfocused on the Group’s strategy.

The work of the Board of Directorsincluded issues concerning the Group’sstrategy and goals, and acquisitions andcapital expenditures. In connection withthe year-end closing of the books for theoperating year, the auditors reported ontheir findings in connection with theirexamination and gave their assessmenton the state of internal controls in theGroup.

The Board of Directors has adoptedrules of procedure to govern the distribu-tion of responsibilities between theBoard of Directors and the President,and what type of current informationshould be made available to the Board ofDirectors.

A compensation committee and anaudit committee have been formed withinthe Board of Directors. The compensa-


31

tion committee consists of ChairmanAnders Börjesson, Vice Chairman TomHedelius and President Roger Bergqvist.The compensation committee deals withsalaries and other employment terms forthe President and other members of sen-ior management. The President does notparticipate in decisions regarding thePresident’s employment terms. The auditcommittee consists of the Board ofDirectors in its entirety.

During the year a nomination com-mittee consisting of representatives frommajor shareholders has prepared issuesconcerning the composition of the Boardof Directors. The nomination committeeincludes Marianne Nilsson representingRobur Fonder, Pär Stenberg, TomHedelius and Anders Börjesson.

The Board of Directors is presentedon page 49.

Parent CompanyThe Parent Company’s net revenuesamounted to MSEK 27 (27) and incomebefore financial items was MSEK 149(321). This result includes dividends andgroup contributions from subsidiaries in

an amount of MSEK 147 (320). Last yearitems affecting comparability wereincluded in an amount of MSEK –3. Netinvestments in fixed assets were made inthe amount of MSEK 1 (2).

Events after financial year-endFor the purpose of further streamliningand developing the Group, Addtech haschanged its organization from June 1,2003. Operations are organized in threebusiness areas with companies of similarmain focus. Prerequisites for the changehave grown stronger during the year as aconsequence of changing market condi-tions. The three business areas will oper-ate under the names AddtechEquipment, Addtech Transmission andAddtech Components.

Future prospectsThe weak and in several cases uncertaineconomic situation requires a high levelof activity in terms of adapting opera-tions.

Addtech stands well prepared to meetcoming increases in demand for theGroup’s products and services. The finan-

cial position is strong and constitutes agood base for future growth.

DividendThe Board of Directors proposes a divi-dend of SEK 1.50 per share. The totaldividend payment would be MSEK 39.

Proposed allocation of earningsThe Group’s unrestricted shareholders’equity amounted to MSEK 353 as ofMarch 31, 2003. No allocation to restrict-ed reserves is required.

The following amounts are availablefor distribution by the Parent Company,Addtech AB:Retained earnings SEK 540 428 000Net income for the year SEK 132 346 000

SEK 672 774 000

The Board of Directors and the Presidentpropose that the funds available for dis-tribution be allocated as follows:

A dividend to the shareholders of SEK 1.50 per share SEK 38 674 000To be carried forward SEK 634 100 000

SEK 672 774 000

Stockholm, June 23, 2003

Anders Börjesson Tom Hedeliuschairman vice chairman

Urban Jansson Lars Spongberg Roger Bergqvistpresident

Our Audit Report was submitted June 23, 2003

George Pettersson Thomas Thielauthorized public accountant authorized public accountant

FINANCIAL STATEMENTS

32

Consolidated Statement of Income

MSEK 2002/2003 2001/2002

Net revenues Note 1 2 275 2 360Cost of goods sold -1 571 -1 662

Gross profit 704 698

Selling expenses -402 -408Administrative expenses -217 -219Revenue items affecting comparability Note 5 13 4Cost items affecting comparability Note 5 -9 -3Other operating income Note 6 14 17Other operating expense Note 6 -5 -3

Operating income Notes 1–4 98 86

Financial income and expense Note 7 -5 -5

Income after financial items 93 81

Taxes Note 9 -28 -26Minority interest -1 -2

Net income for the year 64 53

Earnings per share, SEK* 2.43 1.92Earnings per share not including items affecting comparability, SEK 2.32 1.91Average number of shares outstanding after repurchases (‘000) 26 446 27 496Number of shares outstanding after repurchases (‘000) 25 783 26 533

* There is no dilutive effect from outstanding personnel options during any of the above reported periods.

33

Net revenuesNet revenues of the Addtech Group decreasedby 4 percent to MSEK 2 275 (2 360). MSEK 75consisted of additional sales volume from unitsacquired. Currency effects in translation offoreign subsidiaries affected revenues by MSEK11 in a negative direction.

Operating incomeThe Group’s operating income amounted toMSEK 98 (86). This result includes itemsaffecting comparability in a net amount ofMSEK 4 (1) attributable to sales of real estatewith a result of MSEK 13, and costs as a resultof restructuring the Group’s telecom-orientedoperations in an amount of MSEK 9. For thepreceding year, items affecting comparabilityas a result of real estate sales in the amountof MSEK 4 and costs of MSEK 3 relating to thelisting of Addtech on the O-list of theStockholm Stock Exchange were additional.

The operating margin was 4.2 percent(3.6). Adjusted for items affecting comparabili-ty, the operating margin was 4.1 percent (3.6).The increase in margin is explained by costreductions.

The single largest of the Group’s cost items

refers to personnel costs, which make up 20percent of the Group’s net revenues and about60 percent of the Group’s overhead.Depreciation and amortization account forabout 5 percent of the Group’s overhead. Theitem other operating income and expense,net, amounted to MSEK 9 (14). This item con-sists primarily of rental income, compensationfor agency rights and the result on sales offixed assets, not including the result of sale ofreal estate, which is reported as an itemaffecting comparability.

Net financial itemsNet financial items amounted to MSEK –5 (–5).

TaxesThe year’s tax expense amounted to MSEK 28(26), equivalent to 30 percent (32). Deferredtaxes due to year-end appropriations areincluded in an amount of MSEK 1 (4).Unutilized tax loss carryforwards amounted toMSEK 6 at year-end, of which MSEK 0 wasaccounted for in computing the deferred taxclaim. The total weighted nominal tax rate forthe Group’s operations was 28.5 percent(28.7) during the year.

Net revenues, MSEK

Operating income and operating margin

Operating income, MSEK

Operating margin, %

Average number of employees

250

200

150

100

50

0

2000/2001

1998/1999

1999/2000

2002/2003

2001/2002

10%

8%

6%

4%

2%

0%

2000/2001

1998/1999

1999/2000

2002/2003

2001/2002

1 000

800

600

400

200

0

1 200

3 000

2 000

1 500

1 000

500

0

2000/2001

1998/1999

1999/2000

2002/2003

2001/2002

2 500



34

Consolidated Balance Sheet

MSEK March 31, 2003 March 31, 2002

ASSETS

Fixed assets

Intangible fixed assets Note 10 29 13Tangible fixed assets Note 11 159 176Financial assets Note 12 7 195 6 195

Current assets

Inventories Note 13 313 347Short-term receivables Note 14 373 407Short-term investments - 0Cash and bank deposits 97 783 92 846

Total assets 978 1 041

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity Note 15

Restricted equityShare capital Note 16 56 56Restricted reserves 23 5Unrestricted equityUnrestricted reserves 289 303Net income for the year 64 432 53 417

Minority interest 3 3 6 6

Provisions

Interest-bearing provisionsPensions and similar commitments Note 18 77 72Non-interest-bearing provisionsDeferred tax liability Note 19 54 50Other provisions 1 132 1 123

Long-term liabilities

Interest-bearing liabilities

Due to credit institutions Note 20 22 82Other liabilities - 10Non-interest-bearing liabilitiesOther liabilities - 22 0 92

Current liabilities

Interest-bearing liabilitiesDue to credit institutions Note 21 2 2Non-interest-bearing liabilitiesOperating liabilities Note 22 387 389 401 403

Total shareholders’ equity and liabilities 978 1 041

Pledged assets Note 23 63 52Contingent liabilities Note 23 17 5


35

AssetsThe Group’s total assets declined by six per-cent to MSEK 978 (1 041). Currency effects oftranslating the Group’s foreign units entailedan increase of MSEK 5.

Fixed assetsBuildings and land decreased during the yearby MSEK 11 to MSEK 83 (94). Depreciationamounted to MSEK 3 (3). Two of the Group’sproperties were sold for a capital gain ofMSEK 13. Two properties were sold during thepreceding year resulting in a capital gain ofMSEK 4. The book value of these propertiessold during the year amounted to MSEK 12.

Machinery declined by MSEK 2 to MSEK 32(34) and equipment declined by MSEK 5 toMSEK 41 (46). Depreciation against theseassets amounted to MSEK 10 (11) and MSEK 21 (22), respectively.

Inventories and accounts receivableInventories stood at MSEK 313 (347) at finan-cial year-end. This is equivalent to 13 percentof net sales during the fourth quarter of thefinancial year annualized and corrected foracquisitions (15 percent at the end of the pre-ceding financial year).

Accounts receivable amounted to MSEK325, which is equivalent to 14 percent of net

sales during the fourth quarter of the financialyear annualized (15). The Group’s workingcapital (inventories and accounts receivableless accounts payable) was equivalent to 17percent of net sales at financial year-end (21).

Shareholders’ equityShareholders’ equity increased by MSEK 15 toMSEK 432 (417). Repurchases of own sharesreduced shareholders’ equity by MSEK 21. Adividend of MSEK 32 was declared.Shareholders’ equity was affected by transla-tion differences in the amount of MSEK 4 (–4).The equity ratio at the end of the financialyear stood at 44 percent (41).

Liabilities and provisionsInterest-bearing liabilities decreased during theyear by MSEK 70 to MSEK 24 (94) and inter-est-bearing provisions increased by MSEK 5 toMSEK 77 (72). The increase is attributable tothe Group’s pension liability. The Group’s netfinancial indebtedness decreased by MSEK 70to MSEK 4 (74).

Key indicatorsDuring the year the debt equity ratiodecreased to 0.2 (0.4), and the equity ratioincreased to 44 percent (41).

Capital expenditures, not including cor-porate acquisitions

Depreciation and amortization

Capital expenditures, depreciationand amortization, MSEK

Return on equity, %

Return on capital employed, %

Return on equity andcapital employed

Financial net indebtedness 4

Deferred tax liability and other provisions 55

Shareholders’ equity,

including minority interest 435

Working capital 299

Fixed assets 195

Operating capital and itsfinancing March 31, 2003, MSEK

2000/2001

1998/1999

1999/2000

2002/2003

2001/2002

50

40

30

20

10

0

60

2000/2001

2002/2003

2001/2002

25%

20%

15%

10%

5%

0%

30%

35%

40%

500

400

300

200

100

0


36

Consolidated Statement of Cash Flow

MSEK 2002/2003 2001/2002

Income after financial items 93 81Adjustment for items not included in cash flow Note 24 36 40Taxes paid -28 -87

Cash flow from current operations beforechange in working capital 101 34

Change ininventories 36 32operating receivables 51 73operating liabilities -19 -98

Change in working capital 68 7

Cash flow from current operations 169 41

Investment operationsAcquisition of companies and business units -41 -13Investments in fixed assets -30 -21Sales of fixed assets 30 25

Cash flow from investment operations -41 -9

Financing operationsDividend -32 -Repurchase of own shares -21 -46Change in interest-bearing liabilities -72 -8Other financing 2 -36

Cash flow from financing operations -123 -90

Cash flow for the year 5 -58

Liquid funds at beginning of year 92 151Cash flow for the year 5 -58Translation difference in liquid funds 0 -1

Liquid funds at year-end* 97 92

* Liquid funds refer to balances in bank and postal giro accounts.


37

Cash flow from current operationsInterest income during the year amounted toMSEK 7 (9) and interest paid amounted toMSEK 12 (14).

Adjustment for items not included in cashflow includes depreciation and amortizationaccording to plan in an amount of MSEK 39(38).

Taxes paid are equivalent in terms of amountto the Group’s tax expense of MSEK 28.

The Group’s working capital declined byMSEK 68 during the year. The working capitalof units acquired during the year amounted toMSEK 15. The decline in inventories is due pri-marily to a lower volume of business and ahigher rate of inventory turnover.

Cash flow from current operations amoun-ted to MSEK 169 (41). The improvement overlast year is primarily due to freed-up workingcapital and the fact that last year was burde-ned by tax payments attributable to the capi-talization of the Addtech Group in connectionwith distribution of Addtech from Bergman &Beving in September 2001.

Investment operationsThe year’s investments in tangible fixed assetsin the amount of MSEK 30 (21) primarily referto office equipment. Payments for acquired

businesses amounted to MSEK 41 (13), MSEK19 of which referred to intangible assets. TheGroup’s statement of cash flow has beenadjusted for acquired businesses.

Financing operationsRepurchase of own shares entailed a paymentof MSEK 21 (46). Interest-bearing liabilitiesdeclined during the year by MSEK 72 (8).

Corporate acquisitions/disposalsThe following adjustments have been madedue to the value of assets and liabilities incompanies acquired during the year:

2002/2003 2001/2002

Fixed assets 24.3 14.2Inventories 8.3 6.0Receivables 16.8 -Liquid funds 12.8 -Interest-bearing liabilities -1.9 -Other liabilities and provisions -6.1 -7.0Purchase money 54.2 13.2Liquid funds inacquired companies -12.8 -Effect on the Group’sliquid funds 41.4 13.2

Cash flow from current operations, notincluding taxes and change in workingcapital

Taxes paid

Change in working capital

Corporate acquisitions

Other capital expenditures, net

Dividend

Repurchase of own shares

Other financing operations

Cash flow from current operations

Cash flow for the year

2000/2001 2002/20032001/2002

250

200

150

100

50

0

300

350

–250

–200

–150

–100

–50

–300

–350

Statement of cash flow, MSEK


38

Parent Company Statement of Cash FlowMSEK 2002/2003 2001/2002

Income after financial items 149 321Adjustment for items not included in cash flow Note 24 -147 -319Taxes paid -7 -3

Cash flow from current operations before change in working capital -5 -1

Change inshort-term receivables and liabilities to Group companies 86 -5operating receivables 19 -19operating liabilities -1 9

Change in working capital 104 -15

Cash flow from current operations 99 -16

Investment operationsInvestments in fixed assets -1 -2

Cash flow from investment operations -1 -2

Financing operationsDividend -32 -Repurchase of own shares -21 -46Change in long-term receivables and liabilities to Group companies 15 50Change in other interest-bearing liabilities -20 33

Cash flow from financing operations -58 37

Cash flow for the year 40 19

Liquid funds at beginning of year 19 0Cash flow for the year 40 19

Liquid funds at year-end* 59 19

* Liquid funds refer to bank and postal giro account balances.

MSEK 2002/2003 2001/2002

Net revenues Note 1 27 27Administrative expenses -29 -27Cost items affecting comparability Note 5 - -3

Operating profit -2 -3

Financial income and expense Note 7 151 324

Income after financial items 149 321

Year-end appropriations Note 8 -9 -8

Income before taxes 140 313

Taxes Note 9 -8 -6

Net income for the year 132 307

Parent Company Statement of Income


39

MSEK March 31, 2003 March 31, 2002

ASSETS

Fixed assets

Tangible fixed assets Note 11 1 1Financial assetsShares in Group companies Note 12 723 887Due from Group companies Note 12 145 869 75 963

Current assets

Due from Group companies 101 97Other short-term receivables Note 14 1 19Cash and bank deposits 59 161 19 135

Total assets 1 030 1 098

SHAREHOLDERS’ EQUITY AND LIABILITIES

Shareholders’ equity Note 15

Restricted equityShare capital Note 16 56 56Legal reserve 11 -Unrestricted equityRetained earnings 541 298Net income for the year 132 740 307 661

Untaxed reserves Note 17 17 17 8 8

Provisions - - - -

Long-term liabilities

Interest-bearing liabilitiesDue to credit institutions Note 20 13 33Due to Group companies 101 292Non-interest-bearing liabilitiesOther liabilities 0 114 0 325

Current liabilities

Interest-bearing liabilitiesDue to Group companies 147 92Non-interest-bearing liabilitiesOperating liabilities Note 22 12 159 12 104

Total shareholders’ equity and liabilities 1 030 1 098

Pledged assets Note 23 - -Contingent liabilities Note 23 70 70

Parent Company Balance Sheet

COMMENTS TO THE FINANCIAL STATEMENTS

40

Accounting principlesThe Financial statements of the Addtech Group have been compiled in accordancewith the Swedish Annual Accounts Act and in accordance with the recommenda-tions of the Swedish Financial Accounting Standards Council.

From April 1, 2002 the following recommendations from the Swedish FinancialAccounting Standards Council are applied: RR1:00 Consolidated accounting, RR15Intangible assets, RR16 Provisions, contingent liabilities and contingent assets,RR17 Writedowns, RR19 Businesses being phased out, RR21 Borrowing costs andRR23 Related party disclosures. The introduction of these recommendations hashad no material effect on reported consolidated income and financial position, andhas not prompted any recalculation of data for the comparative year.

Due to a change in classification of administrative and selling expenses, data forthe comparative year for these items have been adjusted. This adjustment resultedin a reduction of administrative expenses of MSEK 28, and an equivalent increasein selling expenses.

Consolidated accountingThe consolidated financial statements include the Parent Company and all compa-nies in which the Parent Company directly or indirectly owns more than 50 percentof the votes.

The consolidated financial statements have been compiled in accordance withthe recommendation on consolidated accounting of the Swedish FinancialAccounting Standards Council (RR1:00), and applying the purchase method ofaccounting. The use of this method means that the assets and liabilities of acquiredsubsidiaries are reported at market value in accordance with a concurrent acquisi-tion analysis. If the cost of the shares in a subsidiary exceeds the estimated marketvalue of the company's net assets according to the acquisition analysis, the diffe-rence is carried as goodwill. Goodwill is capitalized and is amortized over its esti-mated useful life. In the normal case the period of amortization is 5 to 10 years.For particularly significant acquisitions, a useful life of up to 20 years may be warranted. Consolidated equity includes the Parent Company's equity and the por-tion of equity in subsidiaries earned after the time of acquisition.

Companies acquired during the year are included in the consolidated incomestatement with value from the time after the acquisition. Companies sold duringthe year are included for the period they have been part of the Group.

Year-end appropriations and untaxed reservesThe consolidated statement of income and balance sheet are reported withoutyear-end appropriations and untaxed reserves.

Year-end appropriations in individual companies have been allocated so that thetax portion is included in the Group’s tax expense, while the remainder is includedin net income for the year.

Untaxed reserves have been allocated so that the deferred tax liability is repor-ted as a provision, while the remainder is reported among restricted reserves.

The deferred tax liability has been calculated individually for each company, as arule using the local tax rate for the following year. If the rate of taxation is chan-ged, the change in the tax liability is taken as a tax expense for the year.

In the Parent Company are reported the net of group contributions, less deduc-tion for writedown as a result of dividend received/group contribution received, asfinancial income.

Translation of foreign subsidiariesAddtech’s foreign subsidiaries are defined as independent companies and arehence translated according to the current rate method for purposes of compilingthe consolidated financial statements. This means that assets and liabilities aretranslated using the year-end rate of exchange and all items in the income state-ment are translated using the year’s average rate of exchange. Translation differen-ces are carried directly to equity without affecting the year’s income.

Receivables and liabilities in foreign currencyReceivables and liabilities in foreign currency have been translated using the year-end rate of exchange. Translation differences on operating receivables and opera-ting liabilities are included in operating income, whereas the difference on financialreceivables and liabilities are reported among financial items.

To the extent receivables and liabilities are hedged by futures contracts, they aretranslated using the future rate of exchange.

Translation differencesTranslation differences attributable to loans in foreign currency raised for the purpo-se of hedging subsidiary net assets are reported – after deduction of taxes – directlyagainst equity, where also the corresponding translation difference is reported.

Similar reporting is applied to translation differences on long-term loans toforeign subsidiaries, which are regarded as additional investment in the subsidiaries.

Revenue recognitionSales revenue is recorded upon delivery of products and services according to theterms and conditions of each respective customer contract and is equivalent to thesales amount after deduction of value added tax, returns, discounts and rebates.

Revenue from projects in progress is reported gradually as projects are comple-ted. If the costs to complete such a contract are estimated to exceed remainingrevenue, a provision is set aside to cover the estimated loss.

Items affecting comparabilityThe result effects of significant events and transactions, such as the sale of realestate or companies, are reported as items affecting comparability.

Other operating income and operating expensesIncome and expenses from activities not directly related to the Group’s core busi-ness are reported as other operating income and operating expenses. Exampleshereof are rental income, agency commissions and the result of sales of fixedassets, not including the result of sale of real estate, which is reported as an itemaffecting comparability.

Intangible fixed assetsIntangible assets acquired by the company are reported at cost, less accumulatedamortization and writedowns.

Additional expenditure for an intangible asset is added to the cost thereof onlyif it enhances future economic benefit. All other expenditure is expensed on a curr-rent basis as incurred.

Expenditure for research and development is reported as expenses as incurred.Expenditure for development, where knowledge or the research result can be usedto achieve improved products or processes, is reported as an asset in the balancesheet, if the product or process is commercially usable and may be used by theCompany or sold.

Tangible fixed assetsTangible fixed assets are reported at cost less accumulated depreciation and anywritedowns. The result on sale or disposal of tangible fixed assets is computed asthe difference between the sales value and the reported value. The gain or lossthat arises is reported over the income statement.

Depreciation and amortizationDepreciation and amortization according to plan is based on the cost of the fixedassets in question and their estimated useful life. The following useful-life periodsare applied:

Machinery and equipment 3–10 yearsBuildings 15–100 yearsLand improvements 20 yearsAgency rights and goodwill 5–10 yearsOther intangible fixed assets 3–5 years

WritedownsWhere there are any indications that the book value of the Group’s tangible, intan-gible or financial fixed assets is too high, the recovery value of the asset is analy-zed. Recovery value is defined as the higher of net sales value and value in use,where the latter consists of discounted future cash flow. A writedown consists ofthe difference between book value and recovery value.

Borrowing costsBorrowing costs are charged to income in the period to which they are attributa-ble, regardless of how loan proceeds were used.

TaxesIn the consolidated financial statements, taxes consist of current taxes as well asdeferred taxes. Current taxes are calculated based on taxable income for the current period and include adjustments of taxes attributable to prior periods.Deferred taxes are calculated on the difference between amounts reported in theGroup and taxable residual values. Deferred taxes are taxes calculated on tempora-ry differences to be paid in the future. The calculation takes place without discoun-ting to present value and using the applicable tax rate in each respective country.Deferred tax claims relating to deductible temporary differences and tax loss carry-

Comments to the Financial Statements

COMMENTS TO THE FINANCIAL STATEMENTS AND NOTES

41

forwards are taken into account to the extent to which it is deemed probable thatthey will result in lower tax payments in the future.

Addtech reports no deferred taxes on temporary differences attributable toinvestments in subsidiaries. Any future effects are reported when Addtech is nolonger in a position to control the reversal of such differences, when for otherreasons it is deemed improbable that a reversal will come about within the fore-seeable future.

InventoriesInventories are carried at the lower of cost and market according to the first-in-first-out method (FIFO). Due consideration is given to the risk of obsolescence. Inthe case of semi-finished and finished goods manufactured in house, cost consistsof direct manufacturing costs and a reasonable markup for indirect manufacturingcosts.

ReceivablesReceivables are carried in the amounts by which they after individual assessmentare expected to be collected.

ProvisionsProvisions are reported in accordance with RR16 Provisions, contingent liabilitiesand contingent assets. This means that a provision is reported in the balance sheetwhen the company has a formal or informal undertaking or obligation as a conse-quence of a transpired event and that it is probable that an outflow of resourceswill be required to settle the undertaking or obligation and an accurate assessmentof the amount can be made. Accounting for pension commitments follows accoun-ting practice in each respective country. Provisions are set aside for estimated warranty costs.

LeasingSignificant financial leasing contracts are reported in the consolidated balancesheet as a fixed asset and liability, respectively, and in the income statement theleasing cost is allocated to operating expense (depreciation) and interest. There areno significant financial leasing contracts at present. Other leasing undertakings arereported according to the rules for operational leasing, that is outside the balancesheet and the entire cost is reported as an operating expense. The volume of ope-rating leasing contracts is small in the Group.

Amounts in MSEK unless otherwise specifically noted.

NOTE 1 Net revenues and operating income by business areaand geographic market

By business area Net revenues Operating income*2002/03 2001/02 2002/03 2001/02

Component Systems 993 923 71 61Production Systems 426 570 -14 -16Transmission Systems 859 869 38 40Parent Company/Consolidation eliminations -3 -2 -1 -

2 275 2 360 94 85

*Operating income not including items affecting comparability.

Net revenues and operating income by quarter is found on page 48.

The Group’s organization changed with effect from the new 2003/2004 financial year.

Data in Note 1 and in the compilation on page 48 reflect the previous organization.

By geographic market Net revenues2002/03 2001/02

Sweden 1 158 1 178Finland 455 523Denmark 367 385Norway 88 74Other countries 207 200

2 275 2 360

MSEK 27 (27) of the Parent Company’s net revenues are attributable to Group

companies. The Parent Company made no purchases from subsidiaries during the year.

Notes

NOTE 2 Employees and personnel expenses

Average number of employees 2002/03 2001/02Men Women Total Men Women Total

SwedenParent Company 6 3 9 5 2 7Other companies 418 141 559 431 147 578

Finland 171 70 241 201 76 277Denmark 104 53 157 127 64 191Norway 16 3 19 16 3 19Other countries 62 25 87 62 21 83

777 295 1 072 842 313 1 155

Salaries and compensation 2002/03 2001/02Board of Directors Of which Other Board of Directors Of which Other

and President bonus employees and President bonus employees

SwedenParent Company 6.0 - 2.7 6.5 0.2 1.5Other companies 21.2 2.0 158.6 25.4 2.5 157.0

Finland 7.5 0.1 71.4 7.4 0.4 81.5Denmark 7.1 0.3 63.2 8.7 0.4 75.4Norway 1.6 0.2 7.4 1.6 0.3 6.8Other countries 4.6 0.6 13.2 4.5 0.1 9.5

Total 48.0 3.2 316.5 54.1 3.9 331.7

NOTES

42

NOTE 2, continued

Salaries and compensationGroup Parent Company

2002/03 2001/02 2002/03 2001/02

Salaries and other compensation 364.5 385.8 8.7 8.0Contractual pensions to directors and President 8.8 11.2 1.6 1.5Contractual pensions to others 28.9 30.6 0.4 0.5Other social benefits 77.2 81.6 3.6 3.2

Total 479.4 509.2 14.3 13.2

Principles for compensation of members of Parent Company senior managementFees are paid to the Chairman of the Board of Directors and to membersof the Board of Directors according to resolution of the Annual GeneralMeeting of shareholders. No separate fees are paid for committee work.Compensation to the President and other members of Parent Companysenior management consists of basic salary, variable compensation, otherbenefits, pension and personnel options. Other members of ParentCompany senior management are defined as the three persons whotogether with the President make up Group management. For the compo-sition of Group management, refer to page 50.

Personnel options to members of senior managementIn December 2001 the Board of Directors proposed to award 700 000 per-sonnel options to 56 members of senior management in the Group. Tomake this possible, the extra general meeting of shareholders heldDecember 17, 2001 resolved that the Company will convey up to 700 000class B shares in the Company in connection with any redemption of thesepersonnel options.

The President has been awarded 100 000 and other members of Groupmanagement have been awarded 70 000 options and other members ofsenior management have been awarded between 5 000 and 20 000options each. The redemption price is set at SEK 44.80, equivalent to 110percent of the average market price of the Addtech share during the peri-od December 3 – 7, 2001. If the personnel options are exercised, the num-ber of shares outstanding increases by 2.7 percent (1.9 percent of the vot-ing stock). These options can be exercised during the period July 19, 2004 –February 18, 2005.

The options are non-negotiable and can only be exercised so long as theholder is an employee of the Company. Hence the options are not definedas securities. For this reason and others, the options have been awardedfree of charge.

The option program may give rise to social benefit costs for theCompany. In the event of 10 percent p.a. appreciation in the price of theshare, these costs will be about MSEK 2.2 if all options are exercised.

Information regarding compensation of directors, President and othermembers of senior managementThe Group “Board of Directors and President” includes directors, Presidentand other members of senior management.

Board of DirectorsThe Board of Directors has distributed the directors’ fee set by the AnnualGeneral Meeting in the amount of SEK 800 000 (800 000) among thosedirectors who are not employed by the Company, of which the Chairmanhas received SEK 250 000, the Vice Chairman SEK 200 000 and the otherdirectors SEK 150 000 each.

Parent Company’s PresidentThe President had a fixed salary of SEK 1 830 000 (1 830 000) and a bonusof SEK 0 (69 000). Taxable benefits of SEK 93 000 (90 000) are additional.The age of retirement for the President is 65 years. Bonus, in addition tofixed compensation may be payable in a maximum amount of 30 percentof the fixed salary. In addition thereto a further bonus premium may bepayable up to 20 percent of the bonus awarded provided the amountreceived is used to acquire shares in Addtech AB. SEK 583 000 (388 000) ofthe Company’s pension costs refer to the President. The period of noticefor the President is 12 months when termination is at the initiative of theCompany and 6 months when termination is at the initiative of thePresident. In the case of termination is at the initiative of the Company,the President is entitled to a severance payment equivalent to one year’ssalary in addition to salary during the period of notice. No severance payment is payable in the case of termination at the initiative of thePresident.

Other members of senior managementFixed salaries have been paid to other members of senior management inan aggregate amount of SEK 3 489 000 (3 318 000) and a bonus of SEK 0(83 000). Taxable benefits of SEK 266 000 (242 000) are additional. The ageof retirement is 65 years. Bonus, in addition to fixed compensation, may bepayable in a maximum amount of 30 percent of the fixed salary. In addi-tion thereto a further bonus premium may be payable up to 20 percent ofthe bonus awarded provided the amount received is used to acquire sharesin Addtech AB. SEK 971 000 (1 087 000) of the Company’s pension costsrefer to other members of senior management. The period of notice is 12months when termination is at the initiative of the Company and 6 monthswhen termination is at the initiative of the employee. In the case of termi-nation at the initiative of the Company, the employee is entitled to a sev-erance payment equivalent to one year’s salary in addition to salary duringthe period of notice. No severance payment is payable in the case of termi-nation at the initiative of the employee.

NOTES

43

NOTE 3 Fees to auditors

Group Parent Company2002/03 2001/02 2002/03 2001/02

Audit assignmentsKPMG 3.3 2.9 0.5 0.3Other auditing firms 0.3 0.3 - -

Total fees for audit assignments 3.6 3.2 0.5 0.3

Other assignmentsKPMG 1.0 0.7 0.5 0.1Other auditing firms - 0.2 - -

Total fees for other assignments 1.0 0.9 0.5 0.1

Total fees to auditors 4.6 4.1 1.0 0.4

By audit assignments is meant examination of annual accounts and themanagement by the Board of Directors and the President. Everything elseis other assignments.

NOTE 4 Depreciation and amortization according to plan

Depreciation and amortization according to plan by functionGroup Parent Company

2002/03 2001/02 2002/03 2001/02

Cost of goods sold -12.5 -15.1 - -Selling expenses -15.8 -10.1 - -Administrative expenses -9.1 -10.7 -0.6 -0.5Other operating expenses -1.8 -2.4 - -

-39.2 -38.3 -0.6 -0.5

Depreciation and amortization according to plan by class of assetsGroup Parent Company

2002/03 2001/02 2002/03 2001/02

Goodwill -4.6 -0.9 - -Buildings -2.9 -3.0 - -Leasehold improvements -1.0 -1.0 - -Machinery -9.9 -11.0 - -Equipment -20.8 -22.4 -0.6 -0.5

-39.2 -38.3 -0.6 -0.5

Amortization of goodwill is reported as selling expenses.

NOTE 5

Income items affecting comparability 2002/03 consist of gains on sale ofreal estate. Expense items affecting comparability 2002/03 consist ofrestructuring costs. The preceding year’s income items affecting compara-bility consisted of gains on sale of real estate and the costs affecting com-parability consisted of costs attributable to the listing of Addtech on theO-list of the Stockholm Stock Exchange.

NOTE 6

Other operating income 2002/03 consists mainly of external rental income,capital gains on sale of machinery and equipment, agency rights and cur-rency effects. Other operating expenses 2002/03 consist of real estate costsand capital losses on sale of machinery and equipment. Other income andexpenses were of the same nature in 2001/02.

NOTE 7 Financial income and expense


Earnings from shares in Group companiesDividend income - - 246.8 400.0Writedown of shares - - -135.0 -110.0Group contribution - - 35.4 30.2

- - 147.2 320.2

Result from financial assetsInterest income

Group companies - - 6.6 6.5Other 0.3 0.5 - -

0.3 0.5 6.6 6.5

Interest income and similar itemsGroup companies - - 2.9 1.2Other 6.7 8.3 1.3 0.8

6.7 8.3 4.2 2.0

Interest expense and similar itemsGroup companies - - -3.5 -2.0Other -12.2 -13.7 -3.1 -2.2

-12.2 -13.7 -6.6 -4.2

Financial income and expense -5.2 -4.9 151.4 324.5

NOTE 8 Year-end appropriations – Parent Company

Parent Company2002/03 2001/02

Change in timing difference reserve -9.5 -7.8

-9.5 -7.8

Were the Parent Company to report deferred taxes on year-end appropria-tions in accordance with the same principles as in the consolidatedaccounts, the deferred tax liability would have been MSEK 2.7 (2.2).

NOTE 9 Taxes


Current taxesSwedish -17.7 -16.2 -8.0 -6.5Foreign -9.6 -13.3 - -

Deferred taxes -0.3 3.4 - -

-27.6 -26.1 -8.0 -6.5

The year’s tax expense of MSEK 27.6 (26.1) is equivalent to 29.9 % (32.4) ofincome after financial items.

NOTES

44

NOTE 9, continued

2002/03 % 2001/02 %

Income before taxes 92.3 80.5Weighted average tax based on national tax rates -26.3 28.5 -23.1 28.7

Tax effect of: Utilization of previously not capitalized tax loss carryforward 0.3 -0.3Non-deductible expenses/tax exempt income -0.9 0.9 -2.7 3.3Adjustments from prior years -1.0 1.1 -0.3 0.4Other 0.3 -0.3

-27.6 29.9 -26.1 32.4

Parent Company 2002/03 % 2001/02 %

Income before taxes 140.3 313.1Weighted average tax based on national tax rates -39.3 28.0 -87.6 28.0

Tax effect of: Non-deductible expenses/tax exempt income 31.3 22.3 81.1 25.9

-8.0 5.7 -6.5 2.1

NOTE 10 Intangible fixed assets

Other intangibleGroup Goodwill fixed assets Total

Accumulated costOpening balance 13.5 - 13.5Corporate acquisitions 19.5 - 19.5Capital expenditures 0.4 1.7 2.1Sales and disposals - - -Translation differences for the year - - -

Closing balance 33.4 1.7 35.1

Accumulated amortization according to planOpening balance -0.9 - -0.9Amortization according to plan -4.6 -0.6 -5.2Sales and disposals - - -Translation differences for the year -0.1 - -0.1

Closing balance -5.6 -0.6 -6.2

Closing residual value according to plan 27.8 1.1 28.9

Opening residual value according to plan 12.6 - 12.6

NOTE 11 Tangible fixed assets

Buildings Leasehold ConstructionGroup and land improvements Machinery Equipment in progress Total

Accumulated costOpening balance 122.7 9.1 121.0 156.0 0.1 408.9Corporate acquisitions 3.0 0.7 - 3.6 - 7.3Capital expenditures 1.4 - 8.5 19.1 0.3 29.3Sales and disposals -16.6 -0.3 -1.6 -24.1 - -42.6Translation differences for the year 0.8 - 0.5 0.6 - 1.9

Closing balance 111.3 9.5 128.4 155.2 0.4 404.8

Accumulated depreciation according to planOpening balance -29.2 -6.3 -87.0 -110.4 - -232.9Depreciation according to plan -2.9 -1.0 -9.9 -20.8 - -34.6Sales and disposals 4.1 0.2 1.0 17.6 - 22.9Translation differences for the year -0.2 - -0.6 -0.2 - -1.0

Closing balance -28.2 -7.1 -96.5 -113.8 - -245.6

Accumulated writeupsOpening and closing balance 1.0 - - - - 1.0

Accumulated depreciation of writeupsOpening balance -0.7 - - - - -0.7Depreciation according to plan -0.3 - - - - -0.3

Closing balance -1.0 - - - - -1.0

Closing residual value according to plan 83.1 2.4 31.9 41.4 0.4 159.2Opening residual value according to plan 93.8 2.8 34.0 45.6 0.1 176.3

NOTES

45

Parent CompanyEquipment 2002/03

Accumulated costOpening balance 1.6Capital expenditures 0.9Sales and disposals -0.5

Closing balance 2.0

Accumulated depreciation according to planOpening balance -0.4Depreciation according to plan -0.6Sales and disposals 0.3

Closing balance -0.7

Closing residual value according to plan 1.3Opening residual value according to plan 1.2

GroupTax assessment values, Swedish properties 3/31/2003 3/31/2002

Buildings 41.3 56.4Land 10.3 14.3

GroupLeasing fees 2002/03 2001/02

Leasing fees paid during the financial year 51.1 36.8of which variable fees 1.2 1.0Amounts of future annual payments:1 year after current financial year 37.2 29.62 years after current financial year 33.1 22.73 years after current financial year 22.0 15.94 years after current financial year 14.6 7.75 years after current financial year and later 22.2 15.0

129.1 90.9

NOTE 12 Financial assets

Group Parent Company3/31/2003 3/31/2002 3/31/2003 3/31/2002

Shares in Group companies refer to separate specification - - 722.7 886.8Other long-term securities holdings 5.8 5.3 - -Other long-term receivables 0.8 0.8 - -

6.6 6.1 722.7 886.8

Parent CompanyShares in Group companies 3/31/2003

Accumulated costOpening balance 996.8Capital expenditures 34.7Sales -63.8

Closing balance 967.7

Accumulated writeupsOpening and closing balance -

Accumulated writedowns Opening balance -110.0Writedowns for the year -135.0

Closing balance -245.0

Closing book value 722.7Opening book value 886.8

Specification of shares in Group companies

Number Par Holding Bookof shares Currency value % value

Addtech Component Systems AB,556236-3076, Stockholm 1 750 SEK 100 100 0.1

Addtech LogIT AB,556625-4719, Solna 1 000 SEK 100 100 0.1

Addtech Production Systems AB,556199-7866, Stockholm 5 000 SEK 100 100 3.9

Addtech Business Support AB,556625-7092, Stockholm 1 000 SEK 100 100 2.1

Addtech Transmission Systems AB,556546-3469, Stockholm 500 000 SEK 100 100 197.3

Betech Seals Development A/S,68132, Köpenhamn 2 DKK 100 131.6

Bevinggruppen AB,556192-5081, Huddinge 100 000 SEK 100 100 64.9

ICM Inductive Component & Material AB,556468-6706, Stockholm 5 000 SEK 100 100 11.8

MotionComp AB,556557-4208, Stockholm 10 000 SEK 100 100 88.6

NE Nordic Energy System Development AB,556467-0924, Sölvesborg 1 000 SEK 100 100 73.2

Provitech AB,556527-8602, Sollentuna 4 000 SEK 100 100 12.4

Ritaren 3 AB,556061-5667, Sollentuna 50 000 SEK 100 100 31.0

Teleinstrument Nordic AB,556020-4496, Sollentuna 10 000 SEK 100 100 62.9

TestPoint AB,556578-4294, Järfälla 10 000 SEK 100 100 42.8

722.7

A complete specification as required by law has been attached to theannual accounts filed with the Swedish Patent & Registration Office. This specification is available upon request from Addtech AB, P.O. Box 602,SE-101 32 Stockholm.

NOTES

46

NOTE 12, continuedParent Company

Due from Group companies 3/31/2003

Opening value 74.9Increase during the year 69.8Decrease during the year -

Closing value 144.7

NOTE 13 Inventories

Group 3/31/2003 3/31/2002

Raw materials and consumables 24.9 21.5Work in progress 9.3 13.4Finished goods and goods for resale 275.9 308.1Advance payments from suppliers 2.9 4.5

313.0 347.5

NOTE 14 Short-term receivables


Accounts receivable 325.4 340.1 - 0.1Tax claim 9.3 8.3 - -Other receivables 10.2 33.7 - 18.2Prepaid expenses andaccrued income 28.6 24.5 1.3 1.0

373.5 406.6 1.3 19.3

NOTE 15 Shareholders’ equity

Share Legal UnrestrictedGroup capital reserve reserves Total

Opening balance 55.7 5.7 355.9 417.3Transfer between restrictedand unrestricted equity 17.7 -17.7 0.0Repurchase of own shares -21.0 -21.0Dividend -31.8 -31.8Translation difference for the year 3.8 3.8Net income for the year 64.2 64.2

Closing balance 55.7 23.4 353.4 432.5

Accumulated translation difference 3/31/2003 3/31/2002

Opening translation difference -4.4 -Translation difference for the year 3.8 -4.4

-0.6 -4.4

Share Legal UnrestrictedParent company capital reserve reserves Total

Opening balance 55.7 - 604.5 660.2Repurchase of own shares -21.0 -21.0Allocation to legal reserve 11.1 -11.1 0.0Dividend -31.8 -31.8Net income for the year 132.3 132.3

Closing balance 55.7 11.1 672.9 739.7

NOTE 16 Share capital

The share capital as of March 31, 2003 consists of (a) 1 106 502 class Ashares, each with a nominal value of SEK 2 entitling its holders to 10 votesper share and (b) 26 757 730 class B shares, each with a nominal value ofSEK 2 entitling its holders to 1 vote per share. 2 081 400 class B shares wererepurchased within the framework of the Company’s current buyback pro-gram. Net, after deduction of repurchased shares, the number of class Bshares outstanding is 24 676 330.

NOTE 17 Untaxed reserves

Parent Company 3/31/2003 3/31/2002

Timing difference reserve, allocation for tax assessment 2003 7.8 7.8Timing difference reserve, allocation for tax assessment 2004 9.5 -

Closing balance 17.3 7.8

MSEK 4.8 of the Parent Company’s untaxed reserves totaling MSEK 17.3consists of deferred taxes included in the item deferred taxes in the consol-idated balance sheet.

NOTE 18 Pensions and similar commitments

Group 3/31/2003 3/31/2002

Provision for pensions, PRI 69.7 69.7Provision for pensions, other 7.7 2.7

77.4 72.4Note 19 Deferred tax claim / liability

3/31/2003 3/31/2002Group Claims Liabilities Net Claims Liabilities Net

Fixed assets 7.7 -8.0 -0.3 9.0 -8.7 0.3Untaxed reserves - -52.5 -52.5 - -51.8 -51.8Other 1.9 -3.0 -1.1 1.5 - 1.5

Deferred taxes, net, closing balance 9.6 -63.5 -53.9 10.5 -60.5 -50.0

Deferred taxes, net, opening balance 10.5 -60.5 -50.0 15.2 -64.2 -49.0

NOTES

47

NOTE 20 Long-term liabilities to credit institutions


Committed credit facilityApproved limit 186.6 204.3 180.0 106.5Unutilized portion -171.9 -126.8 -167.1 -73.5

Credit facility utilization 14.7 77.5 12.9 33.0

Liabilities to credit institutionsMaturing within 2 years 1.5 1.4 - -Maturing within 3 years 1.3 1.0 - -Maturing within 4 years 1.4 0.6 - -Maturing within 5 years 1.4 0.7 - -Maturing after 5 years 1.3 1.0 - -

6.9 4.7 - -

Long-term liabilities to

credit institutions 21.6 82.2 12.9 33.0

The Addtech Group’s long-term liabilities to credit institutions were divid-ed among the following currencies:

3/31/2003 3/31/2003 3/31/2002 3/31/2002Currency Local currency MSEK Local currency MSEK

SEK 14.6 14.6 0.0 0.0EUR 0.4 3.8 3.8 34.3DKK 2.6 3.2 38.2 46.4NOK - - 1.3 1.5

Total 21.6 82.2

NOTE 21 Short-term liabilities to credit institutions

Group 3/31/2003 3/31/2002

Liabilities to credit institutions 1.8 1.8

Short-term liabilities 1.8 1.8

The Addtech Group’s short-term liabilities to credit institutions were divid-ed among the following currencies as of March 31, 2002:

3/31/2003 3/31/2003 3/31/2002 3/31/2002Currency Local currency MSEK Local currency MSEK

EUR 0.1 1.0 0.1 0.8DKK 0.6 0.8 0.8 1.0

Total 1.8 1.8

NOTE 22 Operating liabilities


Advance payments from customers 4.4 1.9 - -Accounts payable 220.7 218.7 0.9 1.3Notes payable 0.4 0.8 - -Tax liabilities 1.1 - 4.1 3.5Other liabilities, non-interest-bearing 52.5 75.7 1.3 1.7Accrued expenses andprepaid income 107.6 103.8 5.4 5.3

386.7 400.9 11.7 11.8

Accrued expenses and prepaid income contain the customary items, such associal benefit costs, vacation pay liabilities, bonuses, rents and interest.

NOTE 23 Pledged assets and contingent liabilities


Pledged assets for liability to credit institutionReal estate mortgages 11.2 11.5 - -Corporate mortgages 51.4 40.7 - -

62.6 52.2 - -Contingent liabilitiesGuaranties and othercontingent liabilities 16.9 5.5 - -Guaranties for subsidiaries - - 69.7 69.7

16.9 5.5 69.7 69.7

NOTE 24 Adjustment for items not included in cash flow


Depreciation and amortization according to plan 39.2 38.3 0.6 0.5Result on sales of companies and fixed assets -14.5 -8.1 - -Change in pension liability 5.1 8.3 - -Group contribution/ dividends not paid - - -282.2 -430.2Writedown of shares in subsidiaries - - 135.0 110.0Other 6.5 2.0 - 0.2

36.3 40.5 -146.6 -319.5

AUDIT REPORT AND QUARTERLY DATA

48

To the Annual General Meeting of Shareholdersof Addtech AB (publ), organization number556302-9726.We have examined the Annual Accounts, theconsolidated financial statements, the account-ing records and the management by the Boardof Directors and the President of Addtech AB(publ.) for the financial year April 1, 2002 –March 31, 2003. Responsibility for the account-ing records and management rests with theBoard of Directors and the President. Ourresponsibility is to render our opinion on theAnnual Accounts, the consolidated financialstatements and the management based on ouraudit.

The audit has been performed in accordancewith generally accepted auditing standards inSweden. This means that we have planned andperformed the audit in such a way as to get rea-sonable assurance that the Annual Accounts andthe consolidated financial statements contain no

material errors. The audit procedure includesexamination of a sample of supporting docu-mentation for amounts and other informationin the accounting records. An audit also includesa test of the accounting principles, and theBoard of Directors’ and the management’s appli-cation thereof, and forming an opinion of theaggregate information contained in the AnnualAccounts and the consolidated financial state-ments. We have also examined significant deci-sions, actions and circumstances in the companyto allow us to form an opinion as to whetherany Director or the President is liable for dam-ages to the company, or in any other way hasacted contrary to the Companies Act, theAnnual Accounts Act or the Articles ofAssociation. We are of the opinion that ouraudit gives us a reasonable ground for our state-ments below.

The Annual Accounts and the consolidatedfinancial statements are prepared in accordance

with the Annual Accounts Act and thereforeprovide a true and fair picture of the Company’sand the Group’s performance and financial posi-tion in accordance with generally acceptedaccounting standards in Sweden.

We recommend that the Annual GeneralMeeting adopts the Statement of Income andthe Balance Sheet for the Parent Company andthe Group, deals with the earnings in the ParentCompany in accordance with the recommenda-tion contained in the Administration Report andthat the members of the Board of Directors andthe President be granted discharge from liabilityfor the financial year.

Stockholm, June 23, 2003

George Pettersson Thomas ThielAuthorized Public Authorized Public

Accountant Accountant

Revenues and income by business areaNet revenues Operating income

MSEK 2002/2003 2001/2002 2000/2001 2002/2003 2001/2002 2000/2001Component Systems 993 923 971 71 61 91Production Systems 426 570 805 -14 -16 60Transmission Systems 859 869 729 38 40 53Parent Company and consolidation eliminations -3 -2 -3 -1 0 -3Group total 2 275 2 360 2 502 94 85 201

Net revenues by business area(quarterly data) 2002/2003 2001/2002MSEK Q 4 Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1Component Systems 273 260 225 235 237 244 213 229Production Systems 104 111 104 107 118 131 138 183Transmission Systems 225 207 204 223 212 220 212 225Parent Company and consolidation eliminations -1 -1 -1 0 0 0 -1 -1Group total 601 577 532 565 567 595 562 636

Operating income by business area(quarterly data) 2002/2003 2001/2002MSEK Q 4 Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1Component Systems 21 20 15 15 13 15 15 18Production Systems -2 -4 -2 -6 -9 -16 0 9Transmission Systems 7 5 10 16 7 7 12 14Parent Company and consolidation eliminations 1 -1 -1 0 1 0 -1 0Operating income 27 20 22 25 12 6 26 41- in percent of net revenues 4,4 3,5 4,2 4,4 2,2 1,0 4,7 6,4Financial income and expense -1 0 -2 -2 -2 0 -2 -1Income after financial items 26 20 20 23 10 6 24 40- in percent of net revenues 4,2 3,4 4,0 3,9 1,9 1,0 4,2 6,2

Income refers to income not including items affecting comparability.

Audit Report

Quarterly data

BOARD OF DIRECTORS

49

Anders Börjesson Tom Hedelius

Urban Jansson Lars Spongberg Roger Bergqvist

Anders Börjesson, born 1948Chairman since 2001.Other assignments: Chairman inBoomerang AB, Cibenon AB Cibes Lift ABand Lagercrantz Group AB. Vice Chairman inBergman & Beving AB. Director inTerrakultur AB.Ownership (family): 350 966 class A sharesand 20 500 class B shares.

Tom Hedelius, born 1939Vice Chairman since 2001.Doctor h.c. Economics. HonoraryChairman in Svenska Handelsbanken AB.Other assignments: Chairman in AndersSandrews stiftelse, Bergman & Beving AB,

Industrivärden AB and Svenska le Carbone.Vice Chairman in Lagercrantz Group AB,Jan Wallanders och Tom Hedelius stiftelse.Director in SCA AB and Volvo AB.Ownership: 335 966 class A sharesand 5 400 class B shares.

Urban Jansson, born 1945Director since 2001.Other assignments: Chairman in Drott AB, Plantagen AS and Proffice ABand other assignments. Director in AhlstromCorp, Anoto Group, Eniro AB, SEB ABand other assignments.Ownership: 25 000 class B shares.

Lars Spongberg, born 1945Director since 2001.Other assignments: Director in Biora AB, Cibenon AB, Intervalor AB, Munters AB,Provexa AB, Skyways Holding AB,Westergyllen AB, LGP Telecom Holding ABand in portfolio companies in Nordic Capital.Ownership: 0.

Roger Bergqvist, born 1948Director since 2001.President in Addtech AB.Ownership: 10 000 class B shares.Personnel options: 100 000.

BOARD OF DIRECTORS

GROUP MANAGEMENT

50

AUDITORS

Roger Bergqvist Anders Claeson

Kennet Göransson Johnny Öhman

Roger Bergqvist, born 1948President in Addtech AB.Employed by the Group since 1973.Ownership: 10 000 class B shares.Personnel options: 100 000.

Anders Claeson, born 1956Executive Vice President in Addtech AB.Employed by the Group since 1982.Ownership: 3 300 class B shares.Personnel options: 70 000.

Kennet Göransson, born 1963Executive Vice President andChief Financial Officer in Addtech AB.Secretary to the Board of Directors.Employed by the Group since 1995.Ownership: 3 300 class B shares.Personnel options: 70 000.

Johnny Öhman, born 1939Executive Vice President inAddtech AB.Employed by the Group since 1971.Ownership: 1 000 class B shares.Personnel options: 70 000.

GROUP MANAGEMENT

George Pettersson, born 1964Authorized Public Accountant, KPMG.Auditor in Addtech since 2001.

Thomas Thiel, born 1947Authorized Public Accountant, KPMG.Auditor in Addtech since 2001.

DEPUTY AUDITORSBjörn Sande, born 1960Authorized Public Accountant, KPMG.Deputy Auditor in Addtechsince 2001.

Joakim Thilstedt, born 1967Authorized Public Accountant, KPMG.Deputy Auditor in Addtechsince 2001.

AGM 2003

51

Welcome to the Annual General Meeting!

Notice of participationShareholders who wish to participate in the proceedings of theAnnual General Meeting must

(a) be entered in the share register maintained by VPC ABnot later than Friday, August 8, 2003, and

(b) file notice of their desire to attend to the Company’s headoffice under address Addtech AB (publ), P.O. Box 602, SE-10132 Stockholm, Sweden, telephone +46-8-470 49 00, fax +46-8-470 49 10, or [email protected] not later than 3.00 p.m.,Thursday, August 14, 2003. Such notice must contain the follo-wing information: name of shareholder, personal registrationnumber (organization number) and information about the num-ber of shares represented.

In order to exercise their voting rights, shareholders whoseshares are registered in the name of a bank’s trust department,or in the name of a stockbroker as nominee, must temporarilyregister their shares in their own name. Such registration mustbe completed not later than by Friday, August 8, 2003.

Payment of dividendThe resolutions of the Annual General Meeting will include thedate by which shareholders must be registered in the shareregister maintained by the VPC AB in order to be entitled toreceive dividend. The Board of Directors has proposed Friday,August 22, 2003 as record date.

On the condition that the Annual General Meeting adoptsthis proposal, dividends will be disbursed by VPC ABWednesday, August 27, 2003 to shareholders of record as ofAugust 22, 2003.

Change of address and bank accountShareholders who have changed their name, address or accountnumber should immediately report such change to their custo-dian or to their institution of account (bank). A special form forthe purpose is available at all Swedish bank branch offices.

Production: Addtech in cooperation with Narva.Photography: Labe Allwin. Printing: Sandviken Tryckeri. Translation: Ole Böök

The Annual Report is printed on environmentally friendly paper, Gothic Silk 250 gram (cover) 150 gram (text pages).

The regularly scheduled Annual General Meeting will be held at 4:00 p.m., Tuesday,August 19, 2003 at IVA konferenscenter, Grev Turegatan 16, Stockholm.

ADDRESSES

52

ADDTECH AB (publ)Roger Bergqvist, PresidentP.O. Box 602, Gamla Brogatan 11SE-101 32 Stockholm, SwedenTel: +46-8-470 49 00Fax: +46-8-470 49 01www.addtech.com

ADDTECH EQUIPMENTÅke Darfeldt, PresidentFakturavägen 6SE-175 62 Järfälla, SwedenTel: +46-8-445 76 60Fax: +46-8-445 76 76

Alvetec ABJosef Benedek, PresidentP.O. Box 7093, Kung Hans väg 3SE-192 07 Sollentuna, SwedenTel: +46-8-626 42 90Fax: +46-8-626 81 33www.alvetec.se

Batteriunion i Järfälla ABBo Fagerström, PresidentÄggelundavägen 2SE-175 62 Järfälla, SwedenTel: +46-8-795 28 50Fax: +46-8-795 28 69www.batteriunion.se

Breve-Tufvassons Co LtdZbigniew Wandzel, PresidentUL. Postepowa 25/27PL-93 347 Lodz, PolandTel: +48-42-640 15 39Fax: +48-42-640 15 41www.breve.com.pl

CT CellTech Energy Systems ABJoakim Aspe, PresidentTredenborgsvägen 16SE-294 35 Sölvesborg, SwedenTel: +46-456-234 56Fax: +46-456-153 77www.celltech.se

CellTech - Harring A/SMichael Ankjaer, PresidentRugmarken 9A+BDK-3520 Farum, DenmarkTel: +45-7025 2201Fax: +45-7025 2202www.celltech-harring.dk

Columbia Elektronik ABHenning Essén, PresidentP.O. Box 5, Sjöviksvägen 53SE-618 21 Kolmården, SwedenTel: +46-11-39 80 05Fax: +46-11-39 76 41www.columbia.se

EnvoControl ABLars Rosell, PresidentFakturavägen 6SE-175 62 Järfälla, SwedenTel: +46-8-445 76 60Fax: +46-8-445 76 76www.envocontrol.se

ESD-Center ABRichard Nordén, PresidentRingugnsgatan 8SE-216 16 Malmö, SwedenTel: +46-40-36 32 40Fax: +46-40-15 16 83www.esd-center.se

Insmat Akku OyHannu Hietala, PresidentP.O. P.O. Box 52, Höyläämötie 11 BFI-00381 Helsinki, FinlandTel: +358-9-560 730 00Fax: +358-9-560 730 10www.insmat.fi

Karlemarks Denmark A/SKarl Zellner, PresidentGl. Præstegårdsvej 8 ADK-8723 Løsning, DenmarkTel: +45-75-79 01 00Fax: +45-75-79 01 20www.karlemarks.com

Karlemarks Finland OYKarl Zellner, PresidentHannuksentie 1FI-02270 Espoo, FinlandTel: +358-9-525 92 30Fax: +358-9-525 92 310www.karlemarks.com

Karlemarks Sweden ABKarl Zellner, PresidentFakturavägen 6SE-175 62 Järfälla, SwedenTel: +46-8-445 76 65Fax: +46-8-445 76 76www.karlemarks.com

KMC Ytbehandling ABMikael Boberg, PresidentFakturavägen 6SE-175 62 Järfälla, SwedenTel: +46-8-445 84 40Fax: +46-8-445 84 45www.kmc.se

Matronic OyTuomo Luukkainen, PresidentLouhostie 1FI-04300 Tuusula, FinlandTel: +358-9-2747 910Fax: +358-9-2747 9120www.matronic.fi

Nordic BatteryJohan Westin, PresidentPostboks 204 Holmlia, Bjørnerudsveien 17NO-1204 Oslo, NorwayTel: +47-2276 3880Fax: +47-2261 9195www.nordicbattery.com

Nordic Battery Power ABJohan Westin, PresidentMarieholmsgatan 2SE-415 02 Göteborg, SwedenTel: +46-31-21 20 00Fax: +46-31-21 20 66www.nordicbattery.com

Tecono ABRichard Nordén, PresidentP.O. Box 700, Kung Hans väg 3SE-191 27 Sollentuna, SwedenTel: +46-8-626 42 50Fax: +46-8-626 68 40www.tecono.se

Tecono OyKari Ruhanen, PresidentHannuksentie 1FI-02270 Espoo, FinlandTel: +358-9-525 92 30Fax: +358-9-525 92 310www.tecono.fi

Teleinstrument A/SBo Lindby, PresidentFabrikvej 11DK-8700 Horsens, DenmarkTel: +45-76-25 18 18Fax: +45-75-61 56 58www.teleinstrument.dk

Teleinstrument ASSvein Hermansen, PresidentPostboks 204 Holmlia, Bjørnerudsveien 17NO-1204 Oslo, NorwayTel: +47-2275 3620Fax: +47-2275 3621www.teleinstrument.no

Teleinstrument KonTest ABJürgen Sedlacek, PresidentP.O. Box 700, Kung Hans väg 3SE-191 27 Sollentuna, SwedenTel: +46-8-626 40 50Fax: +46-8-626 81 33www.kontest.se

Tufvassons Transformator ABGörgen Hultgren, PresidentP.O. Box 501, Porfyrvägen 4SE-193 28 Sigtuna, SwedenTel: +46-8-594 809 00Fax: +46-8-592 527 68www.tufvassons.se

Vactek ABGöran Korsänge, PresidentTurebergsvägen 5SE-191 47 Sollentuna, SwedenTel: +46-8-35 27 25Fax: +46-8-92 96 79www.vactek.se

Vactek A/S, PresidentRainer WagnerFrydenborgsvej 27 EDK-3400 Hillerød, DenmarkTel: +45-48-24 44 33Fax: +45-48-24 44 37www.vactek.dk

ADDTECH TRANSMISSIONHåkan Franzén, PresidentP.O. Box 602, Gamla Brogatan 11SE-101 32 Stockholm, SwedenTel: +46-8-470 49 00Fax: +46-8-470 49 01

ADDRESSES

53

Aratron ABPer Häglund, PresidentP.O. Box 20087, Kratsbodavägen 50SE-161 02 Bromma, SwedenTel: +46-8-404 16 00Fax: +46-8-98 42 81www.aratron.se

Aratron ASStein Kuvaas, PresidentPostboks 204 Holmlia, Bjørnerudsveien 17NO-1204 Oslo, NorwayTel: +47-2275 3620Fax: +47-2275 3621www.aratron.no

Betech Seals A/SClaus Nielsen, PresidentVesterlundvej 4DK-2730 Herlev, DenmarkTel: +45-44-85 81 00Fax: +45-44-92 78 00www.betechseals.dk

Bondy A/SLeif Johansson, PresidentIndustriparken 16-18DK-2750 Ballerup, DenmarkTel: +45-70-15 14 14Fax: +45-44-64 14 16www.bondy.dk

FB Chain LtdPhil Taylor, PresidentJubilee Road, LetchworthHerts SG6 1NE, EnglandTel: +44-1462-67 0844Fax: +44-1462-48 0745www.fbchain.com

FB Kaeder A/SLars Johansson, PresidentHP Christensens Vej 1DK-3000 Helsingør, DenmarkTel: +45-7020 8191Fax: +45-7020 8192

FB Kedjor ABLars Johansson, PresidentP.O. Box 304, Kungsgatan 68SE-631 04 Eskilstuna, SwedenTel: +46-16-15 33 00Fax: +46-16-14 27 57www.fbkedjor.se

FB Ketjutekniikka OyLauri Pörsti, PresidentFI-27710 Köyliö, FinlandTel: +358-2-540 111Fax: +358-2-540 1100www.fbketjutekniikka.fi

FB Ketten HmbHThomas Wagner, PresidentGewerbe Park Süd 5AT-6330 Kufstein, AustriaTel: +43-5372-61466Fax: +43-5372-61466-20www.fb-ketten.com

FB KettenThomas Wagner, PresidentNiederlassung Meschede, Auf´m Brinke 16DE-59872 Meschede, GermanyTel: +49-291-952 660Fax: +49-291-952 6620www.fb-ketten.com

FB Kjeder ASMagne Berg, PresidentBjørnerudsveien 17NO-1266 Oslo, NorwayTel: +47-2319 1650Fax: +47-2319 1651

Kraftmek OyHans Söderström, PresidentPB 36, Svetsaregatan 9FI-00811 Helsinki, FinlandTel: +358-9-755 7355Fax: +358-9-755 5285www.kraftmek.fi

Laserstans, Betech Seals ABLars Johansson, PresidentP.O. Box 205, Ågatan 37SE-233 24 Svedala, SwedenTel: +46-40-45 96 00Fax: +46-40-42 14 09www.laserstans.se

Movetec OyMarkku Suominen, PresidentHannuksentie 1FI-02270 Espoo, FinlandTel: +358-9-525 92 30Fax: +358-9-525 92 333www.movetec.fi

Teknikprodukter ABTommy Marklund, PresidentTallvägen 5, P.O. Box 173SE-564 24 Bankeryd, SwedenTel +46-36-37 62 00Fax +46-36-37 22 93www.teknikprodukter.se

Tube Control ABPeter Johansson, PresidentP.O. Box 292, Storsätragränd 10SE-127 25 Skärholmen, SwedenTel: +46-8-555 921 00Fax: +46-8-555 921 50www.tubecontrol.se

ADDTECH COMPONENTSAnders Dafnäs, PresidentP.O. Box 23045, S:t Eriksgatan 117SE-104 35 Stockholm, SwedenTel: +46-8-729 17 00Fax: +46-8-729 17 28

Adiator ABTommy Haglund, PresidentP.O. Box 23045, S:t Eriksgatan 113 ASE-104 35 Stockholm, SwedenTel: +46-8-729 17 00Fax: +46-8-729 17 17www.adiator.se

Beving Compotech ABJan Eriksson, PresidentP.O. Box 21029, S:t Eriksgatan 113 ASE-100 31 Stockholm, SwedenTel: +46-8-441 58 00Fax: +46-8-441 58 29www.compotech.se

Beving Elektronik ABRichard Sjöström, PresidentP.O. Box 5530, Jägerhorns väg 8SE-141 05 Huddinge, SwedenTel: +46-8-680 11 99Fax: +46-8-680 11 88www.bevingelektronik.se

Caldaro ABTomas Pehrsson, PresidentP.O. Box 30049, Warfvinges väg 27SE-104 25 Stockholm, SwedenTel: +46-8-736 12 70Fax: +46-8-736 12 90www.caldaro.com

Eltech Components A/SKim Engmark, PresidentVallensbaekvej 41DK-2605 Brøndby, DenmarkTel: +45-7010 1410Fax: +45-4320 0777www.bevingeltech.com

R&K Tech ABErwin Theimer, PresidentP.O. Box 7086, Polygonvägen 65SE-187 12 Täby, SwedenTel: +46-8-544 40 560Fax: +46-8-732 74 40www.rkgruppen.se

Stig Wahlström OyLauri Lindström, PresidentHannuksentie 1FI-02270 Espoo, FinlandTel: +358-9-502 44 00Fax: +358-9-452 27 35www.swoy.fi

Tekno Optik ABRichard Joelsson, PresidentP.O. Box 5003, Jägerhorns väg 8SE-141 05 Huddinge, SwedenTel: +46-8-680 11 30Fax: +46-8-680 11 60www.teknooptik.se

Tesch System ABPatrik Nilsson, PresidentP.O. Box 21196, S:t Eriksgatan 113 ASE-100 31 Stockholm, SwedenTel: +46-8-441 56 00Fax: +46-8-441 56 19www.tesch.se

OTHERAddtech Business Support ABMartin Fassl, PresidentP.O. Box 5530, Jägerhorns väg 8SE-141 05 Huddinge, SwedenTel: +46-8-680 11 00Fax: +46-8-680 11 01

ADDTECH AB (publ)P.O. Box 602, Gamla Brogatan 11

SE-101 32 Stockholm, SwedenTel: +46-8-470 49 00Fax: +46-8-470 49 01

Organization number: 556302-9726

Documents

45587 sid1-28...ADDTECH IN BRIEF 1 Net revenues amounted to MSEK 2 275 (2 360). Income after ﬁnancial items increased by 15 percent to MSEK 93 (81). Earnings per share increased