Bure's capital market day

Bure's capital market day: Focusing on the knowledge-intensive service industry for continued rapid growth Business areas will represent 80 per cent of the Group's invested capital Strengthened sector-focusing, concentration on selected growth sectors and increased share of unlisted holdings is Bure's strategy for the years ahead. This is what emerged on Wednesday during the Company's capital market day. The aim is that those of Bure's business sectors which concentrate on the knowledge-intensive service sector, within 3 to 4 years will represent approximately 80 per cent of Bure's invested capital. For the next 2 years, the target is a growth rate of between 20 and 40 per cent with increasing earnings and a continued internationalisation of the operations. Bure Investments will focus on investments in the same or related industries as the other business area. The purpose is to create values and strong cash flows in the short to mid-term also in the future. Around the year 2001, more than SEK 2,000M may have been freed through divestments which further strengthens the business areas' opportunities for rapid growth. Bure is now carrying out a focusing of industries with a concentration on selected growth sectors and further investments in unlisted companies. The business areas will be wholly-concentrated on the knowledge-intensive service sector, a sector which constitutes more than 20 per cent of the Swedish GDP and moreover is growing rapidly throughout Europe. "By concentrating on a few selected industries, we are focusing our expertise and our contact network," stressed Roger Holtback, President and CEO of Bure. "We also see major synergies. With our business areas IT and InfoMedia we are at the forefront technical development and our early involvement within Health Care has given us a unique knowledge about transforming public operations into private operations. It is there, at the front-line of IT development and in the area between the public and the private, we will see the strongest growth over the next few years throughout Europe. Bure stands well-equipped to meet that development". Through the establishment of the business area Education, Bure now has operations within several of the fastest growing areas in the knowledge- intensive service industry. Thus an important platform has been established for Bure's continued growth. Health Care is today the leading private player in the Nordic countries within its segments. IT and InfoMedia, which have grown quickly through acquisition and also organic growth, are seen as attractive owners among the Nordic IT and infomedia companies which have provided the basis for a competitive network. At same time as the business areas are being focused towards the knowledge- intensive based service sector, a concentration on a sector-focusing is also taking place within Bure Investments. The investments will primarily support the already-existing companies in the business areas. So far, major investments has been made in Nobel Biocare and Mölnlycke Health Care within Health Care and Relevant Knowledge/Media Metrix within InfoMedia. In connection with Bure's reorganisation in which IT and InfoMedia become two separate business areas, the holding in Scribona is being transferred to Investments. "The aim is that approximately 80 per cent of the Group's invested capital will be concentrated on the business areas within 3 to 4 years. The remaining 20 per cent will be invested in companies in similar industries and which can contribute knowledge about international markets and contacts within the industry. However, the overall objective of Investments remains, in the short to medium term, to contribute with earnings and value," Roger Holtback continued. Around the year 2001, approximately SEK 2,000M may have been freed through divestments and listings. In addition, Bure has agreed credit promises amounting to more than SEK 2,000M which together with the freed liquidity gives significant scope for larger acquisitions during the years ahead. The aim is an annual growth rate of between 20 to 40 per cent. "Bure is a typical growth and knowledge company which is characterised by businessmanship, continuous development and challenging old structures. Like few other companies, we have tried to build up a unique expertise in building new and innovative operations within sectors undergoing considerable change. That knowledge will characterise our operations more and more," Roger Holtback concluded. Education - new business area Education is the newest business area within Bure. Through the acquisition of Mercuri International ScanAsia and the IT training companies Informator, Nordisk Datautbildning and Fama, Bure from the very start will have a sales rate of SEK 370M with good profitability. In addition to that comes the new acquisition of Vittra with a turnover of SEK 80M. Vittra runs 9 pre-schools and compulsory schools in the Stockholm area. "Our aim is to become the leading education training company in the Nordic countries in the segments Corporate training and Schools," said Sven-Åke Lewin who has been appointed head of the business area. "Right from the start, the operations will have good profitability and will rapidly expand further. The target is to have sales exceeding SEK 2,000M in the year 2002." The education and training sector in Sweden represents 6 per cent of the GDP. Corporate training is growing rapidly, not least because of increased demand for IT training. In compulsory schools and senior high schools, the share of publicly-funded private schools is increasing. However, in an international perspective Sweden still has a low share. In business sector Schools, experience can be used from Health Care. The aim is not to become a private alternative but, exactly as in Health Care, co- operate with municipalities and offer a publicly-funded school under private management. The acquired company, Vittra, with pre-schools and compulsory schools in Stockholm, Sollentuna and Lidingö will be a very important component in the expansion of the business sector. New concepts within Health Care secure continuous rapid growth The rapid growth of Health Care continues. The sales rate today amounts to SEK 2,400M. The aim of a sales rate of SEK 5,000M with an operating margin of between 5 to 7 per cent before the end of the year 2000 stands. Four years after its establishment, Health Care today employs more than 3,000 people of which 400 are specialist doctors. The business sector is established in Sweden, Norway, Denmark, Great Britain and Poland. "The growth and profitability development are going according to plan and the underlying operations are developing positively," said Per Båtelson, Vice President and Head of the business sector. "Above all, we now see further improvements in the market prerequisites with a yet larger political acceptance. Among other factors, the driving force is the increased demands for quality. It becomes more and more obvious that new solutions will be required to maintain and develop a high quality in medical care while, at the same time, demands for continued efficiency measures remain." During the past year, especially the expansion in Sweden and Norway has been strong. In addition to that, entry into the x-ray market has been made with investments in Gothenburg and Oslo. In total 17 companies have been acquired. To meet the target of a business volume of SEK 5,000M, the requirement is increased organic expansion while the geographical perspective is widened. From a previous concentration on especially the Nordic countries, the focus is increasingly changing to Northern Europe. In the existing operations, a far-reaching professionalisation of all parts of medical care is taking place. By effectivising the service and support functions in health care such as laboratories or material supply, resources can be transferred to more patient-related care. "In today's health care, there is often a lack of focus on the core business. Bureaucratic organisation, subsidy budgeting and over-dimensioned peripheral services direct money to the wrong things," said Per Båtelson. "We now utilise our experience to attack these problems and this gives better financial prerequisites for the patient-related operations. Opportunities are thereby created to develop new non-traditional working methods". A further step in the development of Health Care is the development of a managed care system. Within the framework of Bure Managed Care, a subsidiary of Investment AB Bure, tools for monitoring medical results and patient- experienced quality are being developed in Sweden, Switzerland and Great Britain. Clients are individual hospitals and health ministries. With the concept, Health Care is able to launch spearhead products on new markets at low risk. "With managed care external productivity increases. Our concept will increase the interaction between care-provider and patient and thereby also improve the medical results," said Per Båtelson. Division of IT/InfoMedia provides streamlining and increased focus Through the distribution of Scribona by Sifo, the various holdings within IT/InfoMedia were streamlined. As a result, it also became natural to split the operations into two parts. A division provides specialised managements with clearer focus, a better external profile for each sector and improved control. "IT and InfoMedia are certainly two different industries. However, the borderlines are not crystal clear which was the reason to have the two sectors within one single organisation in the first place. Now each sector has grown to such a size and can develop further on its own merit and still utilise the network which has been built up in the business area," said Ulf Ivarsson, Executive Vice President of Bure and Head of the business sector InfoMedia. With Sifo and Citat, InfoMedia creates distinct operations right from the start: Information services and Media services. The aim is to establish a position on selected European markets. In addition to Sifo and Citat a separate company, Pennon, has been created. Pennon's business is document handling which will be the third business sector within InfoMedia. Business area IT has as an aim to be the first choice for large and medium- sized companies in the purchase of advanced IT solutions. At the same time it should be the first choice for Nordic IT companies which wish to be acquired. "We have already managed to acquire several of the most skilled IT companies in Sweden and we have started our Nordic expansion, both through own acquisitions and through our acquired companies," said Björn Boldt-Christmas who is the new Head of business area IT. "The Bure network of IT companies covers the whole IT area and has cutting-edge expertise within several segments". The target margin for IT is 8-15 per cent depending on segment. Focusing of Bure Investments With increased sector-focusing, Bure Investments will have a partly new role in Bure. Its task continues to be to acquire companies which are able to create substantial values and strong cash flows. At the same time, the companies can provide a platform for new business within Bure. This will be strengthened now that the investments are given increased sector-focusing. "With an increased sector-focusing, we not only create a clear image externally and internally. By participating in work on boards of directors and utilising the networks the acquired companies constitute, we obtain important contacts for our other business areas. In several companies within industries close to our own we can profit from important experiences, not least from international markets," said Per-Henrik Berthelius, Head of Investments. Gothenburg, 11 November 1998 Investment AB Bure (publ) For more information, please contact: Roger Holtback, President and CEO +46-31 335 76 35 Knut Leman, Head of Corporate Communications +46-31 335 76 75 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/11/11/19981111BIT00330/bit0001.doc http://www.bit.se/bitonline/1998/11/11/19981111BIT00330/bit0002.pdf