ANNUAL REPORT AND CORPORATE GOVERNANCE REPORT 2013

Company Profile

2014

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SUMMARY OF THE YEAR .................................................................................................... 3

MESSAGE FROM THE CEO ................................................................................................. 4

NOVOTEK IN BRIEF ............................................................................................................ 6

MESSAGE FROM GENERAL ELECTRIC ................................................................................ 7

SOLUTIONS FOR SUCCESS ................................................................................................ 8

YOUR SUCCESS, OUR GOAL ............................................................................................12

EMPLOYEES AND ORGANISATION .................................................................................... 14

CUSTOMERS, COMPETITORS AND HISTORY ..................................................................... 16

SHARE INFORMATION ..................................................................................................... 17

BOARD OF DIRECTORS .................................................................................................... 18

SENIOR MANAGEMENT AND AUDITORS ........................................................................... 19

FIVE-YEAR SUMMARY ......................................................................................................20

OUR OFFICES ..................................................................................................................22

Contents

Novotek has always helped its customers to store, structure and convert informa-tion into knowledge. Today we have extremely effective tools which allow users to arrange and structure data for use at tremendous speed.

Summary of the year

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• The orders received was SEK 211.9 (203.8) million.

• Operating income was SEK 221.5 (195.9) million.

• The operating profit was SEK 16.8 (13.8) million.

• The profit after tax was SEK 13.8 (10.2) million.

• Earnings (attributable to shareholders of the parent) per share were SEK 1.3 (0.9).

• Cash flow from current operations was SEK 21.2 (14.3) million, or SEK 2.0 (1.3) per share.

• The Board proposes a dividend of SEK 1.0 (1.0) per share for the financial year 2014.

Perhaps 2014 will be remembered as the year when the “Internet of Things” (IoT) phenomenon made its breakthrough. During the year many companies, including Intel and Cisco, deepened their partnership with General Electric under the frame-work of #IndustrialInternet, where GE has assumed the leading role.

The fact that a company like GE, which is mostly associated with heavy machinery such as turbines and train engines, has a chief executive, Jeff Immelt, whose mantra in 2014 for the internal transformation of the compa-ny from manufacturing to services was: “If you go to bed tonight as an industrial com-pany, you’re going to wake up in the morning as a software and analytical company.” says a lot about where we are headed. Novotek is at the centre of this trans-formation and helps customers begin their journey on a daily basis.

#INDUSTRIAL INTERNET The process of linking up machinery, sensors and people is speeding up, with analysts estimating that some 2.9 billion people are now connected. Yet this is still only a fraction of the number of machines and sensors that are expected to be linked up over the next few years. Some commentators are predicting that 20 billion units will be connected by 2020, creating tre-mendous opportunities for those who know how to make use of all the data that will be generated. Today only a small number of companies have be-gun that journey. Novotek has already helped a couple of major customers but sees many others that are prepar-ing to take the next step. Ensuring that investments do not prove fruitless in

this relatively new environment re-quires knowledge and experience. This means that the solutions that Novotek is already delivering and the experi-ence that our solution consultants possess are a veritable goldmine for our customers.

MOBILITY Mobility is something that is taken for granted today, and we see new applica-tions emerging where the key is the ability to continually present the right data to each individual. The use of wearables has exploded, and a contin-ued rapid expansion is expected. Inno-vative products like Google Glass have opened up new opportunities, and Novotek has already made significant contributions in this field that have attracted considerable attention. The creation of an adapted reality for op-erators will lead to significant efficien-cy gains in industry over the coming decade, and Novotek will remain at the forefront of developments to ensure that we give our customers the best available solutions.

BIG DATA The other big shift that is occurring, if possible at an even faster pace than the growth of mobility, is the shift to-wards solutions for storing, analysing and drawing conclusions from large volumes of data. This field, which is

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Tobias AntiusChief Executive Officer

Message from the CEO

called Big Data, covers a vast array of different solutions; the common de-nominator is the need to continually increase the speed and efficiency of all these new technologies that have been developed to analyse the collection of data. Despite the rapid advances being made in communication, there are still large amounts of legacy equipment

around that is not going to be re-placed. This is where the core exper-tise that Novotek has in communica-tions and data collection is needed. We call this #IndustrialDataProvider, which is one of our key solutions.

STEADY GROWTHNovotek achieved good organic growth in 2014, and it is hoped that the company will continue to do so in coming years assuming a continued modest improvement in overall eco-nomic activity. No acquisitions were made during the year, which was due to a lack of good candidates that fit Novotek’s profile, but we continue to look for candidates.

CONTINUED DEVELOPMENTAfter a couple of years in which we concentrated on focusing the opera-tions of the Novotek Group on our core business, the next two years will centre on growth and continued de-velopment. Novotek is well equipped to help our customers meet the chal-lenges they face, and we are very opti-mistic about our opportunities to give our customers that additional compet-itive advantage which they need in to-day’s world. For those who succeed in adapting their business to the era that will follow the introduction of #Industrialinternet there are big effi-ciency gains to be made. I look for-

ward to the coming years, when we will be helping many of those compa-nies that choose to embark on that journey.

Novotek has a portfolio of products and solutions that is unique in the market and that is fully adapted to the new world which is now taking shape, and I am confident about our pros-pects for the next few years.

NUMBER OF INTERNET USERS2014 2,925,249,3552013 2,712,239,5732012 2,511,615,5232011 2,272,463,0382010 2,034,259,3682009 1,752,333,1782008 1,562,067,5942007 1,373,040,5422006 1,157,500,0652005 1,029,717,9062004 910,060,1802003 778,555,6802002 662,663,6002001 500,609,2402000 413,425,1901999 280,866,6701998 188,023,9301997 120,758,3101996 77,433,8601995 44,838,9001994 25,454,5901993 14,161,570

SOURCE: INTERNET LIVE STATS (ELABORATION OF DATA BY INTERNATIONAL TELECOMMUNICATION UNION (ITU) AND UNITED NATIONS POPULATION DIVISION)

Novotek has a portfolio of products and solutions that is unique in the market and that is fully adapted to the new world which is now taking shape, and I am confi-dent about our prospects for the next few years.

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OPERATIONSNovotek’s core expertise is in solu-tions for industrial IT and automation, which improve the efficiency of our customer’s information management and production processes.

With in-depth knowledge about how industrial information flows are created and controlled, Novotek is able, by combining products and re-lated services such as consultation and training, to ensure that our customers maintain and strengthen their compet-itiveness.

We provide solutions covering the full spectrum of data management, from collection and storage to analysis, visualisation and control.

Key industries include energy, food, pharmaceuticals, iron & steel, chemi-cals & petrochemicals, paper & pulp, manufacturing and water & sewage.

MISSIONNovotek’s overall mission is to be a leading distributor of industrial IT and automation solutions in its markets in the Nordic and Benelux countries. Us-ing Novotek’s own products, we are seeking to attain a global role in those niches where we have chosen to have our own products. The common crite-rion for all solutions is that they must enable efficiencies and optimisation of manufacturing processes, munici-pal installations and infrastructure.

STRATEGYTo achieve our overall mission, a strat-egy based on the following key elements has been developed:

A focus on our customers’ successOur solutions make our customers more successful. Our driving force is our customers’ ability to understand and use their data.

A mix of products, services and solutionsSolutions that make a difference are at the heart of our offering. All solutions are based on our products, externally sourced as well as in-house, and are functionally assured through our services.

Innovative solutions for a new worldEveryone should be able to see, man-age and control their production ac-tivities when, where and how they want. Novotek’s solutions are designed to support this ambition.

Solutions from small to bigCompanies need to be able to start small and grow as required. That’s why Novotek’s solutions are available in all sizes.

In the vicinityIt is more efficient and agreeable to be able to speak to somebody close at hand and in your own language. Novotek aims to always be close to its customers.

An integrated and uniform NovotekNovotek aims to give its customers better solutions, faster support and a wider product portfolio in all our areas. Novotek is therefore expanding geo-graphically as well as in terms of the content of production systems.

OFFICE NETWORKNovotek has nine offices, including two in Sweden, with sales representa-tives in two further locations, three in Denmark, one in Norway, one in the Netherlands, one in Belgium and one in Finland. Our export business out-side Novotek’s office network is main-ly concentrated to Malmö.

Key figures 2014 2013Operating revenue, SEKm 221.5 195.9Profit after net financial income, SEKm 17.9 14.5Earnings per share after tax, SEK 1.3 0.9Operating margin, % 7.6 7.0Cash and cash equivalents, SEKm 52.0 42.5Equity/assets ratio, % 54.3 54.0Number of employees, 31 Dec 125 114

Novotek in briefMessage from General Electric

Novotek’s business concept is to deliver solutions to its customers which ensure their need for production, IT and automation. Our solutions are created from stand-ard products which collect, store, analyse and control the customer’s data flows. The idea is to give the customer the freedom to view, control, optimise and follow up their production processes from any location.

learning how best to work with data, the benefits of doing so are already be-coming clear. Ultimately, big data solu-tions boost transparency and provide the right information to the right per-son at the right time. For example, rather than waiting for an alarm to go off on critical piece of equipment, smart analytics allows an organization

There has been a fair amount of buzz lately around the role of the data scientist in the enterprise. With the un-precedented amount of data organizations now have to wrestle with, per-haps it’s no surprise that experts are needed to turn all that raw informa-tion into actionable busi-ness insights.

Data scientists are key to unlocking the potential behind Big Data, and as the amount of data and the capacity to process it continue to grow, the role of the data scientist will become ever more important to remaining compet-itive in the industrial sector.

A recent global study found that 66 percent of executives surveyed across eight industrial sectors believe they could lose their market position in the next two to three years if they fail to utilize Big Data. Clearly the im-portance of data is not lost on execu-tives, but it will not be enough to sim-ply ensure access to data. The true differentiator will be how originations work with data to glean actual insights about the business.

Many organizations are already col-lecting data – and many have been do-ing so for the better part of a decade. The real challenge is to bridge that gap from a server farm of data into useful learnings that allow executives and

operators to make better decisions and garner optimal performance from industrial assets. As data science is a relatively new field, many organiza-tions are still experimenting with vari-ous analytics solutions to extract latent value from operations and critical equipment.

Even while many enterprises are still

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“When we receive an order it normally consists of 40-50 parts that we need to manufacture in different processes. In some cases the order also needs to be sent to one of our many subcontrac-tors for some form of specialised pro-cessing,” Jorn Arvid Sather, Produc-tion Manager at Årdal Maskinering, says. “Previously we used our ERP system coupled with Excel spread-sheets to plan tasks, but it was starting to get very chaotic.”

COMPLEX MANUFACTURING WITH A SHORT PLANNING HORIZON“Over the past three years we have

achieved a huge increase in sales and our production has become much more complex.” Jorn Arvid Sather continues: “With so many different orders, cus-tomers and subcontractors, it was im-possible to keep track of everything, not least because we operate with very short deadlines. We rarely plan more than one or two months ahead, and we receive a lot of rush orders.”

THE WHOLE PRODUCTION PROCESS IN A SINGLE PICTUREWhen Årdal Maskinering’s ERP sup-plier announced that it would stop developing the planning module the

company decided to invest in ROB-EX. Jorn Arvid Sather continues: “ROB-EX has been developed specif-ically for production planning and is much more adaptable than an ERP system. In particular, ROB-EX has given us a much better overview of the process. We can view all customer orders in a single picture, and we can also see the various production orders that each customer order consists of. Another advantage is that we can sort by individual components of the pro-cess and view the workload for opera-tors as well as machinery at all stages of production.”

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Årdal Maskinering AS processes all types of metal and mainly delivers components to the oil industry. The company has no in-house products, but makes products to order. This requires a production system with a high degree of adaptability. Previ-ously the company fine-tuned its production plans using an ERP system coupled with Excel. As production became increasingly complex it became ever harder for the company to get an overview of the process. That’s why they now use ROB-EX from Novotek for their production planning.

Årdal Maskinering AS plans with ROB-EX

EASIER TO FIT IN RUSH ORDERS“ROB-EX enables us to make much better use of our capacity than we were able to previously,” Jorn Arvid Sather adds. “I can see exactly what the workload is for each operator and machine, and if we receive a rush order that we need to fit in between other orders I can see what the conse-quences would be of doing so.

Visually, I can see how the rush or-der will shift all operations, and I can see where I need to make adjustments so that everything fits together again”.

A STRONG VISUAL TOOL“ROB-EX works really well in a visual sense,” Jorn Arvid continues. “For example, when I plan a new order the colour changes to red if my planning would mean that we are unable to meet the delivery time. We have many orders and customers to deal with at

the same time, and in our industry we continually face tight deadlines. That’s why it is important for us to have a tool which tells us what is needed to meet the timetable, for our subcon-tractors and for ourselves.”

ROB-EX REUSES DATA FROM THE ERP SYSTEMROB-EX is integrated with the com-pany’s ERP system, and the two sys-tems exchange all necessary data auto-matically. “We have always been very pleased with our ERP system, and we still are. The only problem was that we were unable to use it for complex pro-duction planning, but ROB-EX has now solved this problem for us.

Once a week I hold a meeting with our sales and production departments, where we review and prioritise all our resources one by one on a big screen. Our sales staff can follow the produc-

tion planning using a viewer function. The function allows them to view the planning process without being able to make changes,” Jorn Arvid Sather says.

SIMPLE REMOTE SUPPORTWhen Jorn Arvid Sather has questions concerning the use of ROB-EX, Novotek connects through a remote support function so that they can look at the solution together. “It is very easy,” he says. “We have a dedicated contact that we can reach and who is good at helping us. Not that we really need to very often; it has been very easy for us to learn how to use the system. Today I would not want to be without ROB-EX. Due to the com-plex nature of our production, I can no longer imagine working without ROB-EX.”

ÅRDAL MASKINERING ASÅrdal Maskinering is a Norwegian manufacturing firm that produces all types of metal. The company has no in-house products, but operates 100 per cent as a subcontractor.

CHALLENGESThe increasing complexity of the pro-duction process made it harder to get an overview in the company.

BENEFITS• Significantly improved overview.

• Ability to view workloads for opera-tors as well as machinery.

• Improved capacity use.

• Visual signal if planned delivery date will be exceeded.

ÅRDAL MASKINERING AS – FACTS

to predict potential failures ahead of time – before a costly failure that could shut down production.

While some level of trial and error will be part of the process for any organiza-tion developing its data strategy, success will depend on first determining what objectives and outcomes your organiza-tion hopes to achieve with big data. An organization hoping to optimize pro-cesses may not have the same data strat-egy as an organization attempting to improve decision making, for example. No matter what your goals, it would be an expensive mistake to invest in any

new technology, data analytics included, without first setting a clear vision for what you hope to accomplish.

We’ve seen significant shifts to the manufacturing industry in our lifetime, such as Lean Manufacturing reshaping the auto industry. The industrial shift fueled by big data will be even bigger, and will reach across many industries. There is a significant amount of “waste” in industrial processes that can be recovered with a strategic approach to data analytics.

The data scientist is the person who can help ensure that strategy is on the

right track. Data scientists will increas-ingly be on the front lines, figuring out what to do with all the information or-ganizations are collecting as more and more assets are connected to the Indus-trial Internet. It’s no wonder that many executives are looking to add data scien-tists to their team – ultimately data strategy will be the difference between organizations that get the most out of their workforce and assets, and organi-zations that are left behind.

/Brandon Perkins, GE Intelligent Platforms Software

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“Proficy Workflow for Alarm Response Management can handle the procedure much more efficiently,” Jesper Grann at Novotek A/S said when visiting a large Danish biotech firm over a year ago to inspect their Proficy iFIX HMI/SCADA system, which controls the company’s building management system.

Jesper visited the technical depart-ment, where the subject of conversa-tion was the much too resource-inten-sive handling of critical alarms from the building management system.

ONE TO TWO MONTHS TO PROCESSThe company stores large quantities of unique blood tests, and the techni-cal facility which controls the room conditions is therefore highly critical to the business and needs to be managed in accordance with GMP, Annex 11 and other rules.

A critical alarm triggered, for instance, by a deviating refrigerator temperature needs to be handled in accordance with a specified procedure. In the previous paper-based system this created a lot of extra work and would in most cases take as much as one or two months.

All products that are affected by a crit-ical alarm need to be kept in quarantine while the deviation is being addressed. All critical alarms have therefore led to significant costs for the business.

SAVED SEVERAL MILLION EURONovotek quickly persuaded the com-

pany that an electronic workflow with intelligent routing and automatic log-ging of relevant data is more efficient than a paper-based system. The invest-ment was approved and implemented.

The results of the investment were not long in coming, and today the company’s project manager says the workload involved in handling critical alarms has been cut by as much as 90 per cent.

The work involved has been cut by 90 per cent.

On average, only one in ten critical alarms now need to be handled as crit-ical deviations. The rest can quickly be categorised as minor deviations and can be corrected before production is affected.

Ninety per cent fewer hours spent dealing with critical deviations equates to about €3.5 million per year.

How much money the company saves on cutting the time in quarantine we dare not say, but there can be little doubt that the quarantine time repre-sents a big cost and major inconven-ience for the company.

MINIMAL SUPERVISIONTo explain how Proficy Workflow for Alarm Response Management can have such a big impact on the compa-ny’s alarm management process, the company’s project manager runs a typical alarm procedure through the

new system. At 02:00 hours an open door to a refrigeration unit activates a critical alarm, prompting the guard/operator to close the door and ensure that the temperature returns to the normal value. The alarm has automati-cally initiated a workflow, and the guard/operator makes a note of what has been done and why. The electronic document is then forwarded automati-cally to the right department, which early next morning is able to deter-mine whether the alarm should be handled as a critical deviation or if it can simply be categorised as an event that has had no impact on the product, in which case the issue will be closed.

The electronic document has been filled in and completed, and if the issue is critical it is forwarded auto-matically to the next function in the organisation for processing.

All details about the event are logged automatically in the workflow and all manually registered details are time-stamped and digitally signed.“The traceability is perfect and the workflow is intelligent in the sense that it is automatically guided to the right individuals, in the right order and at the right time. If the guard/opera-tor, for example, had taken the view that the refrigerator was defective, he would simply have directed the work-flow to a technician, who would have been called in automatically and inte-grated in the workflow,” the project manager says.

By replacing its traditional paper-based alarm procedures with electronic work-flows, a large Danish biotech company has cut its resource-intensive alarm handling work by 90 per cent. The investment was recouped in less than six months.

Alarm handling goes digital

THIS IS THE EXPLANATION It is thus the efficiency and automa-tion of Proficy Workflow that really makes the difference.

To ensure that all information had been included in the documentation, all critical alarms were previously treated as critical deviations. In other words, there was a concern that im-portant information would go missing if the procedure was not followed, and it was therefore decided to wait for the right people to decide whether the is-sue was critical or not.

“In Proficy Workflow all important information is automatically tied to-

gether and immediately referred to the acute event. This means that we can safely categorise the event before de-ciding whether it should be treated as a critical deviation or simply as an in-significant incident,” the project man-ager says.

The result is that all non-critical alarms (90 per cent on average) can quickly be filtered out so that they don’t use up anyone’s time or result in unnecessary quarantines.

Apart from more efficient manage-ment of issues, electronic workflows also improve security as well as the traceability of the documentation for

the process.As all data and the time from alarm

to response is logged automatically, any disputes about response times are also eliminated.

In collaboration with Novotek, the company has designed flow charts which the various alarms are required to follow, and the project manager describes the entire configuration pro-cess as smooth.

The next step, according to the project manager, is to install Proficy Workflow in the company’s produc-tion facilities.

Why the anonymity?As a matter of principle, the company behind this case did not want their name to be used in connection with matters relating to their suppliers. Our customer is a large Danish company with 1,500 employees working at different facilities across Denmark.

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The company also has application knowledge in practically all industries, which has been acquired over the years, as well as a wide network of global and local partners in all industries. Coupled with experience, knowledge and busi-ness partners and a portfolio of the best products in the market, this ena-bles Novotek to offer the right solu-tion to each customer. A solution which offers openness, scalability and flexibility without compromising on quality or price. A mix that includes these qualities is what the market is currently demanding. At a time when outsourcing and streamlined organisa-tions have made businesses dependent on individual players Novotek’s open and scalable solutions offer an alterna-tive to the rigid solutions provided by many of our competitors. Novotek has always provided open solutions and has been a pioneer in industrial IT and automation.

Novotek’s offer to the market is unique and gives customers an assur-ance that Novotek will deliver solu-tions, products and services which ensure their success.

MARKETS AND TRENDSThe market was stable in 2014, despite the general uncertainty. For many cus-tomers decision-making times were extended in 2014, especially with re-gard to major customer investments. However, the climate for small cus-tomer investments and maintenance of existing solutions is still good. This

uncertainty is expected to continue into 2015.

Novotek’s overarching mission is to be a leading distributor of solutions and products in industrial IT and auto-mation in the Nordic and Benelux countries with a focus on energy, infrastructure, iron & steel, chemicals & petrochemicals, food, pharmaceuti-cals, paper & pulp, manufacturing and water & sewage.

STRATEGYNovotek’s strategy to achieve its mission can be divided into a number of key elements.

A focus on our customers’ successSuccess for Novotek’s customers is a success for Novotek. Industrial IT and automation are today the main means of competition in the fight to maintain production in northern Europe. Cus-tomers are grappling with this challenge every day, and Novotek aims to ensure that they succeed. This is Novotek’s ambition, and Novotek’s stated goal is therefore to ensure that as many as pos-sible have customer contact.

A mix of products, services and solutionsThe key to success for Novotek lies in choosing an optimal solution. A solu-tion which does not maximise the number of engineer hours or add un-necessary products, but offers a good balance between services and prod-ucts. A mix which has such a balance in its content meets the customers’

needs today as well as tomorrow. This requires scalability, openness, mobility and, not least, responsibility. Novotek therefore takes it for granted that it will include products in its delivered solutions for which Novotek will take responsibility. Novotek supplements the products with those functions which are required to meet its custom-ers’ needs and ensures, together with its partners, that the solution is implemented in the best way.

Innovative solutions for a new worldThe requirements for industrial IT and automation solutions have changed in response to demands from users for increased mobility and flexibility, and all this faster than anyone has ever needed before. This development is accelerated by a global trend in which manufacturing and consumption are becoming increasingly dispersed while the search for more efficient processes and faster decisions is becoming ever more important for maintaining profit-ability. Novotek’s solutions have always been based on an open approach, facilitating our transition to the new mobile and cloud-based approach. Novotek’s goal for its solutions is to en-sure that everyone is able to see, man-age and control their production activi-ties when, where and how they want.

Solutions from small to bigToday the ability to start on a small scale and grow with your solution is something that everyone expects from

an IT system. The prime manifesta-tion of this view is the trend towards cloud computing, where scalability is integrated from the outset. All solu-tions marketed by Novotek are adapt-ed so as to enable users to start small and test the waters, and then expand and add to the solution as require-ments grow, without having to start from scratch. Many solutions are also adapted for use in public as well as private cloud solutions depending on our customers’ requirements. This in-cludes the option of mobile working,

whenever you need to, and the ability to do so using whatever device you happen to have at the time – a tradi-tional PC, tablet computer or mobile handset.

In the vicinityThe key to effective collaboration between Novotek and its customers is to be close to each other. Close enough to be able to offer support and service in your language, and to be able to help with small things without big costs. Novotek continually looks for

new partners to ensure that it remains close to its customers.

An integrated and uniform NovotekThe Novotek Group has the same am-bition in all countries in which it oper-ates. Novotek aims to give its custom-ers better solutions, faster support and a wider product portfolio in all our areas. Cross-border collaboration also makes our organisation more efficient and uniform, which cuts costs and im-proves the efficiency of our sales and marketing activities.

Your success, our goal

Novotek operates primarily in the areas of industrial IT and automation. In these areas Novotek has solution architects and technology specialists with long experi-ence of all stages of the lifecycle for a solution.

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Novotek A/SDenmark

19 employees

Novotek B.V.Netherlands

25 employees

Novotek Sverige ABSweden

28 employees

Novotek ABSweden

4 employees

Novotek OyFinland

12 employees

Novotek Planning Systems A/SDenmark

20 employees

Novotek ASNorway

13 employees

Novotek BVBABelgium

4 employees

promoting diversity and equality, and is keen to recruit people with a differ-ent background than the traditional one in our industry. Each year Novotek evaluates all terms and conditions to ensure that our goals for personal de-velopment and salary setting are com-plied with. A key factor for attracting and retaining staff is the ability to offer interesting work at the forefront of technology.

Novotek strives to establish long-term relations with customers as well as employees and aims to keep staff turnover at a low level. Staff turnover in 2014 was 8 per cent, which is com-parable with 2013 (5 per cent). The average number of employees in-creased by 9 to 120 (111) in 2014.

At year-end 2014 the Group had 125 employees. The average age was 43. The chart below shows the age struc-ture for Novotek’s employees.

NOVOTEK’S ORGANISATIONNovotek is a decentralised organisation with a focus on ensuring that everyone has direct contact with customers, the market and the solutions we deliver. Flat, efficient and trust are the guiding principles for Novotek’s organisation. Everyone should feel that they have a stake in Novotek’s successes and every-one should know what their role in the organisation is, and that they enjoy the trust of management. Novotek wants to ensure that everyone is secure, disciplined and curious.

Secondary school 41%

University or university college degree 59%

50-5414%

55-597%

<242%

25-296%

35-3916%

40-4418%

45-4917%

30-34 17%

>603%

Approximately 59 per cent of our employees have an academic degree. While demand for the relevant profes-sional categories has been significant, from customers as well as competitors, Novotek’s position and reputation in the industry has enabled us to recruit staff with the right skills profile. Novotek has an explicit strategy of

:) Employees and organisation

Novotek is a knowledge company, which means that the company’s success is largely dependent on its ability to attract and retain employees with the right skills. In this context skills refers to knowledge as well as social skills and the ability to focus on the customer. Novotek therefore seeks to ensure that it offers attractive employment terms, in terms of opportunities for personal development as well as remuneration.

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DIVIDEND POLICYNovotek’s dividend policy is to distrib-ute at least 50 per cent of its after-tax profit while taking account of the Group’s financial position and acquisi-tion plans. For the financial year 2014 it is proposed that a dividend of SEK 1.0 per share be paid. A dividend of SEK 1.0 represents a yield of 6.1 per cent based on the share price at 31 December 2014, SEK 16.40.

NOVOTEK’S B SHARESNovotek’s B shares have been traded on the Nordic Small Cap list of the NASDAQ OMX exchange since 30 June 1999 under the ticker NTEK-B. The share price on 31 December 2014 was SEK 16.40, giving a market capi-talisation of SEK 174 million. The average weekly share turnover was 33,000 in 2013 and 48,500 in 2014. At year-end the company had 1,666 share-holders.

SHARE CAPITAL HISTORYSince 1990 Novotek’s share capital has changed as follows:

OWNERSHIP STRUCTURE, 31 DEC 2014

0

500

1000

1500

2000

2500

3000

3500

No. of shares traded in thousands

-14-13-12-11-10-09-08-07-06-05-04-03-02-01-00-990

10

20

30

40

50

60

70

80

SIX GeneralindexNovotek B

©

Novotek also works on customer pro-jects in collaboration with consulting firms in industrial IT and automation. In these cases Novotek is generally in charge of the system solution while the IT consultant meets the need for human resources. Novotek has a broad and deep customer base, with no customers accounting for more than 10 per cent of sales on an on-going basis.

COMPETITORSNovotek has a number of different competitors or competing solutions. However, no other company in the market is currently competing with the same business concept. Siemens and ABB occasionally compete with Novotek. The company also has

smaller competitors that have special-ised in partial solutions to the custom-ers’ problems. The big consulting firms, such as ÅF, Rejlers and Accen-ture, are more often customers than competitors, as they frequently use Novotek’s products and solutions for their customers.

HISTORYNovotek was established in April 1986 by Göran Andersson, the company’s main owner. The first operations were conducted in Malmö. Since then nine offices have opened over the years. The company initiated a close partner-ship with US-based GE Intelligent Platforms centred on personal com-puter programs for monitoring. The industry solutions which Novotek

provides were introduced gradually and are being developed continuously, often in collaboration with a major customer. As part of preparations for an IPO, the current Group structure was established in December 1998. In June 1999 Novotek was listed on the O list of the Stockholm Stock Ex-change. In 2002 and 2003 the compa-ny’s partnership with GE was expand-ed significantly, giving Novotek access to a comprehensive product pro-gramme covering process interface, control systems and up to ERP sys-tems. In 2006 the company acquired what is now Novotek Planning Systems A/S and added another dimen-sion to its offering that has since con-tinued to be developed in all countries as well as globally through GE.

Source: SIX Financial Information

Share information

The number of shares in Novotek AB is 10,600,000, of which 1,500,000 are of series A and 9,100,000 of series B. Series A shares carry 10 votes each and series B shares one vote each. All shares carry equal rights to the company’s assets and profits. Shares of series A can be converted into shares of series B.

Customers, competitors and history

Novotek’s customers cover a broad spectrum in terms of industry and size. Our customers include IT consultants, systems integrators, end users of Novotek’s solutions and producers of products which incorporate Novotek’s solutions – original equipment manufacturers (OEM). The end users include large exporters as well as local authorities and SMEs.

Year Transaction Increase in share capital,

SEK

Increase in number of

shares

Share capital, SEK

Number of shares

1990 50,000 5001996 Bonus issue 50,000 500 100,000 10001998 Share split 100:1 99,000 100,000 100,0001998 Bonus issue 1,900,000 1,900,000 2,000,000 2,000,0001998 Issue of new shares 100,000 100,000 2,100,000 2,100,0001999 Share split 4:1 6,300,000 2,100,000 8,400,0001999 Issue of new shares 550,000 2,200,000 2,650,000 10,600,000

Shareholder No. of shares of

series A

No. of shares of

series B

Share of votes,

%

Share of capital,

%Noveko Syd AB 1,500,000 0 62.2 14.2Arvid Svensson Invest AB 0 2,635,000 10.9 24.9Didner & Gerge Fonder AB 0 880,958 3.7 8.3Försäkringsbolaget, Avanza Pension 0 600,876 2.5 5.7Novoplan AB 0 438,260 1.8 4.1Persantic AB 0 250,000 1.0 2.4Bernt Larsson 0 180,924 0.8 1.7Nordnet Pensionsförsäkring AB 0 165,194 0.7 1.6Ann-Charlotte Hellerstedt 0 145,000 0.6 1.4Kenneth Hellerstedt 0 123,237 0.5 1.2Other 0 3,680,551 15.3 34.5TOTAL 1,500,000 9,100,000 100.00 100.00

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The indicated shareholdings include shares held through companies.

GÖRAN ANDERSSONBjärred, born 1944.Chairman. Director since 1986, Chairman since 2006.Shareholding in Novotek: 1,500,000 A shares and 449,160 B shares.

FREDRIK LARSSONStaffanstorp, born 1972IT consultant.Director since 2014.Shareholding in Novotek: 500 B shares.

CLAES LINDQVISTViken, born 1950.Formerly CEO of Höganäs AB. Director since 2006. Other directorships: Director of Trelleborg AB, Svenska Handelsbanken Södra Regionen and Dunkerska stiftelserna.Shareholding in Novotek: 10,000 B shares.

INGVAR UNNERSTAMBjärred, born 1946. Corporate consultant. Director since 1986.Shareholding in Novotek: 21,400 B shares.

FUNCTIONING OF THE BOARDIn May 2014 the Board of Direc-tors discussed and adopted rules of procedure for the Board and instructions for the CEO. The rules of procedure set forth the duties of the Board and matters to be addressed during the year, and include instructions for the holding of Board meetings. Under the rules of procedure, the Chairman of the Board, Göran

Andersson, is tasked with work-ing on general strategic matters. Claes Lindqvist is tasked with ex-amining and approving informa-tion material to be sent to NASDAQ OMX and the media prior to publication while Ingvar Unnerstam has responsibility for monitoring the performance and precision of the finance function. In 2014 the Board held seven minuted meetings.

THE NOMINATING COMMITTEEThe Nominating Committee consists of Ingvar Unnerstam and the main owners Göran Andersson and Fredrik Svensson representing Arvid Svensson AB, who together represent about 75 per cent of the votes and 43 per cent of the capital. The Nominating Committee is tasked with submitting proposals relating to the Board of Directors and fees to the Annual General Meeting.

MATS-ÅKE ANDERSSONBorn 1960.Authorised Public AccountantMazars SET Revisionsbyrå AB.Chief auditor of Novotek since 2010.

MARTIN GUSTAFSSONBorn 1972.Authorised Public AccountantMazars SET Revisionsbyrå AB.Auditor of Novotek since 2008.

PER EILANDBorn 1956.CEO of Novotek A/S, Denmark.Employed since 1991.Direct shareholding in Novotek AB: 53,500 B shares.

JONAS HANSSONBorn 1974.CFOEmployed since 2010.Direct shareholding in Novotek AB:No shares.

TOBIAS ANTIUSBorn 1972. CEO Employed since 2005.Direct shareholding in Novotek AB:2,000 B shares.Indirect shareholding in Novotek AB:250,000 B shares.

Auditors

ANTTI KAIKKONENBorn 1978.CEO of Novotek OY, Finland.Employed since 2006.Direct shareholding in Novotek AB:No shares.

MART SCHEEPERSBorn 1964.CEO of Novotek B.V., the Netherlands and Novotek BVBA, Belgium.Employed since 2002.Direct shareholding in Novotek AB:No shares.

STEFAN WIKENHEDBorn 1968.CEO of Novotek Sverige AB.Employed since 2013.Direct shareholding in Novotek AB:No shares.

BJÖRN INGE OLSENBorn 1970.CEO of Novotek AS, Norway.Employed since 1995.Direct shareholding in Novotek AB:33,000 B shares.

Board of Directors Senior management

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SALES GROWTHChange in total operating revenue excluding work performed by the company for its own use and capitalised.

GROSS MARGINProfit before depreciation, amortisation and exceptional items, as a percentage of operating revenue.

OPERATING MARGINProfit after depreciation, amortisation and exceptional items, as a percentage of operating revenue.

PROFIT MARGINProfit after financial items, as a percentage of operating revenue.

CAPITAL EMPLOYEDTotal assets less non-interest-bearing liabilities.

RETURN ON EQUITYProfit after tax as a percentage of average equity.

EQUITY/ASSETS RATIOAdjusted equity as a percentage of total assets.

QUICK RATIOQuick assets as a percentage of current liabilities.

NET CASHCash and bank deposits, and short-term investments.

AVERAGE NUMBER OF EMPLOYEESAnnual average full-time equivalents.

VALUE ADDED PER EMPLOYEEOperating profit plus staff costs, divided by average number of employees.

EARNINGS PER SHAREProfit after tax divided by average number of shares.

EQUITY PER SHAREEquity at end of period divided by number of outstanding shares.

DEFINITIONS OF KEY PERFORMANCE INDICATORS

SEKmConsolidated income statement 2014 2013 2012 2011 2010Operating income 221.5 195.9 193.5 216.6 212.1 Operating expenses -202.5 -179.8 -187.0 -201.4 -197.6 Depreciation and amortisation -2.2 -2.3 -2.3 -2.5 -2.1Operating profit 16.8 13.8 4.2 12.7 12.4 Net financial income 1.1 0.7 0.3 0.0 -1.3Profit after net financial income 17.9 14.5 4.5 12.7 11.1 Consolidated balance sheetNon-current assets excluding goodwill 8.9 10.1 12.0 14.1 17.4 Goodwill 26.2 25.3 24.8 27.6 27.7 Other current assets 7.4 10.6 13.4 24.2 20.7 Trade receivables 50.0 46.6 39.3 49.8 54.2 Cash and bank deposits, and short-term investments 52.0 42.5 40.1 36.6 35.1Total assets 144.5 135.1 129.6 152.3 155.1

Equity including non-controlling interests 78.5 73.0 73.4 85.2 87.1 Interest-bearing liabilities 0.0 0.0 0.0 4.4 3.8 Non-interest-bearing liabilities 66.0 62.1 56.2 62.7 64.2Total equity and liabilities 144.5 135.1 129.6 152.3 155.1 Consolidated key figuresOrders received, SEKm 211.9 203.8 185.0 230.4 214.6 Operating income, SEKm 221.5 195.9 193.5 216.6 212.1 Operating profit, SEKm 16.8 13.8 4.2 12.7 12.4 Sales growth, % 13.1 1.2 -10.7 2.1 -12.9 Margins Gross margin, % 8.6 8.2 6.5 7.0 6.8 Operating margin, % 7.6 7.0 2.2 5.9 5.8 Profit margin, % 8.1 7.4 2.3 5.9 5.2 Capital structure Capital employed, SEKm 78.5 73.0 73.4 89.6 90.9 Equity, SEKm 78.5 73.0 73.4 85.2 87.1 Return on equity, % 18.2 13.9 1.4 10.3 8.8 Equity/assets ratio, % 54.3 54.0 56.6 55.9 56.2 LiquidityQuick ratio, % 78.9 68.8 72.1 55.1 52.2 Net cash, SEKm 52.0 42.5 40.1 36.6 35.1 EmployeesAverage number of employees 120 111 116 127 134 Operating income per employee, SEKm 1.85 1.76 1.67 1.71 1.58 Value added per employee, SEKm 0.91 0.86 0.72 0.79 0.75 Data per shareNumber of shares at end of period 10,600,000 10,600,000 10,600,000 10,600,000 10,600,000 Earnings per share, SEK 1.33 0.93 0.07 0.81 0.69 Equity per share, SEK 7.41 6.89 6.92 8.04 8.22 Share price 31 Dec, SEK 16.40 11.60 10.90 10.85 10.55 Dividend per share (proposed 2014), SEK 1.00 1.00 1.00 1.00 1.00

Five-year summary

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SWEDENNovotek Sverige ABHöjdrodergatan 9Box 16014SE-200 25 MalmöTel +46 40 31 69 00Fax +46 40 94 76 17www.novotek.seinfo@novotek.se

Novotek Sverige ABNystrandsgatan 23SE-633 46 EskilstunaTel +46 16 18 32 38Fax +46 16 18 32 39

DENMARKNovotek A/SNaverland 2DK-2600 GlostrupTel +45 434 337 17Fax +45 434 352 25www.novotek.dkinfo@novotek.dk

Novotek A/SStrandkærvej 87DK-8700 HorsensTel +45 702 766 88Fax +45 702 766 89

Novotek Planning Systems A/SStærmosegårdsvej 8DK-5230 Odense MTel +45 7022 01 70Fax +45 7022 01 71www.rob-ex.complanning@novotek.com

HEAD OFFICENovotek ABHöjdrodergatan 9Box 16014SE-200 25 MalmöTel +46 40 31 69 00Fax +46 40 94 76 17www.novotek.cominfo@novotek.com

FINLANDNovotek OyÄyritie 24FI-01510 VantaaTel +358 20 79 59,450Fax +358 20 79 59,451www.novotek.fiinfo@novotek.fi

NORWAYNovotek ASTorsvang IndustriområdeBoks 2036NO-3255 LarvikTel +47 331 658 00Fax +47 331 658 01www.novotek.noinfo@novotek.no

NETHERLANDSNovotek B.V.Paardeweide 2 NL-4824 EH BredaTel +31 765 871 010Fax +31 765 810 111www.novotek.nlinfo@novotek.nl

BELGIUMNovotek BVBAMechelsesteenweg 277BE-1800 VilvoordeTel +32 225 485 50Fax +32 225 387 67www.novotek.beinfo@novotek.be

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