2004-10-26

LEAX Group in LatviaJan Geier, Vice President

“The day we stop getting better is the day we stop being good“

2004-10-26

LEAX Group

LEAX Mekaniska115 Em pl

170 MSEK

Q Control14 Em pl

12 MSEK

GenerPro90 Em pl

75 MSEK

LEAX Baltix40 Em pl

20 MSEK

LEAX Group AB

275 MSEK turn over250 Employees

2004-10-26

LEAX Group Mission

• We are a leading service provider of mechanical and electromechanical solutions for – Commercial Vehicles & Automotive – Electromechanical & Power generation – Construction and Mining industries

• We provide– Flexible machining– Assembly and testing of subsystems– Services in Quality, Environmental & Business solutions

• We focus on– Customer satisfaction– Innovative business solutions– Technical know how – Agile processes– Lean enterprise – Empowered employees

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Our productsShafts Gears

Rock Drill Components

Pre assembled products

2004-10-26

Köping

Västerås

Riga

2004-10-26

History – LEAX Group

• Started in 1982• 10 MSEK 1992• Acquisitions in

1995 och 2000• ISO/TS 2003• Average growth 35

%0

50

100

150

200

250

300

350

400

1996 1999 2002 2005

2004-10-26

Markets and Customers

• Customer segments– Automotive & CVS– Electromechanical

industry & Power generation

– Construction & Mining industry

• Markets– Sweden, Europe, Japan,

USA

• “Client- Co-operation ”– One stop shopping– Design support

39%

41%

16%4%

Automotive Electro mech

Construction Other

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LEAX Baltix

2004-10-26

History – LEAX Baltix

1998 • Analysis of production capacity in Baltic

States1999-2000• First supplier audits and test orders2001• Founding of SIA LEAX Baltix

• Trading and Consultancy

2002• First serial volume contracts• Purchase of land and building

(12000m2 / 2700m2)• First employments of production

personnel2003• Own production starts

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Reasons for investment

• Global sourcing from our customers– China/India– Eastern Europe

• Extensive price pressure• (Problems finding skilled work

force in Sweden)• Very small local market

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Latvia

• Big differences in salaries– Management 50-60 %– Workers 15-25 %

• High growth, especially in Riga region• Recruitment of production personnel has been

fairly easy• Management is a key issue

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Latvian Culture

• Corruption exists, but has not been a problem for us– Choose your partners

• “Russian” business culture – A lost generation– Quotations– Pricing

• Financing and banks

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Method

• ”Compatible” work shop• Purchase of machines in Sweden • Start up of production in Sweden

– Latvian personnel in Köping (work permits!)

• Swedish management• Sales (and customer contact) from

Sweden

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LEAX Baltix

• Trading center • Machining• Manual assembly

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Owner structure

• LEAX Group 66,5 %• Swedfund 24,5 %• Local partners 9,0 %

• Swedfund was contacted to provide external risk capital to make a faster expansion possible

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LEAX Baltix – Present situation

• Rapid growth• Profitable since September

2003• Several new orders taken

and quotation backlog is impressive

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LEAX Baltix – Facts & Figures

• Forecast 2005– Turn over 70 MSEK– Profit 5 MSEK– No of employees 65-70

• Plan 2008– Turn over– Profit– No of employees

2004-10-26

Reasons why we have succeeded

• Good planning• Training of all personnel in Sweden• Persistent management• Integration of core values and local

cultures (Swedish vs. Latvian)• Management skills in language• “Problem solving ability”

2004-10-26

Expansion i Riga

Business Parkwith attractivelocation