A word from our CEO

Many people will remember 2020 for a very long time, and then perhaps not primarily the US presidential election, but the Covid pandemic. An event that, despite all the isolation, has united us and built a deeper community. For us as an organisation and workplace, the year was a major ordeal in a number of areas, but we knew that the restructuring in 2019, property sales and a new strategy led to improved efficiency and liquidity. At the beginning of the year, we heard about a SARS-like pandemic in China. Well aware of SARS, I worked in Southeast Asia during this time, we immediately began securing the supply of goods with updated purchasing estimates and substantial emergency stocks. We had just enough time for that process when Covid-19 struck with full force in the Nordic region in mid-March, with massive shutdowns in our countries as a result. DistIT managed the quarter with relatively little impact before the shutdowns struck. For Septon, with its great dependence on the events market, it came as a shock. For the rest of our operations, which supply all consumer electronics channels in the Nordic region, it was a significant but manageable trial. An event such as this accelerates societal changes, and we therefore decided to accelerate the strategy work with digitalisation and our own brand labels. Thanks to a good cost structure and liquidity planning, the Company had the opportunity to recruit top expertise in line with the defined strategy. The hard work led to a record year for the Group, where, above all, the fourth quarter demonstrated the effect of all the hard work on improvements and a refined strategy.

2020 was characterised by strong progress with the integration work and the IT platform. DistIT has expensed a large part of its IT infrastructure investments on an ongoing basis, which will mean that depreciation of intangible assets will be significantly lower in the future. We are working towards a schedule where the integration to our new ERP system will be completed for Aurora and Deltaco during the first half of 2022.

The improvement work in Septon is of a similar nature to that already carried out in Aurora and Deltaco, with investments in a common platform and development of own brand labels. Septon has been particularly affected by the Covid pandemic, but we expect the company to be strengthened through this, and with higher profitability.

The strategy we are working towards within the entire DistIT Group already creates significant values. The refined strategy, which is made possible largely thanks to the DistIT Group’s access to a broad customer base in the Nordic and Baltic countries, rests on four pillars that accelerate value creation. These are:

Strutural growth:
DistIT’s operations are geared towards structural trends in digitalisation and technological breakthroughs, and we see a clear opportunity for further acceleration through increased exports and company acquisitions.

Higher gross margin profile:
improved gross margin from own brand labels.

Cost efficiency:
scalable growth from integration and improvement work.

Extended control:
through a gradual shift to becoming more of a product-based company, we create greater control over our future and choice of strategy, as well as over sustainability aspects.

In light of DistIT’s updated strategy and business plan, new financial goals for 2025 were published on 18 March 2021. These goals consist of achieving sales of SEK 3.5 billion in 2025, a gross margin of 25% and an EBIT margin of at least 8%. Fulfillment of these goals would create an accumulated acquisition capacity of SEK 1.5 – 2.0 billion after dividends.

The revenue goal is intended to be achieved with a combination of growth in the DistIT companies’ home markets and increased exports to the rest of Europe. The margin goals are achieved through a continued shift towards product ownership and thereby increased gross margin, in combination with cost efficiency and scalable growth.

We look forward with great confidence to the coming five-year period, and we will continue the hard work of accelerating our strategy – with a strong conviction that success breeds success!