Sustainability report 2020
OEM encourages sustainable development, which means that focusing on sustainability creates economic stability with profitable growth, reduces negative impact on the environment, maintains a high level of business ethics, and promotes an attractive and healthy workplace. OEM aims to satisfy the requirements and expectations of customers, suppliers, employees, share holders and society concerning sustainability. Sustainability is a key competitive tool in the international technology trading market in that it contributes towards the further development of the business with products and solutions that correspond to, or surpass the expectations of customers. In this respect customers can rely on the expertise and ethical agenda of OEM. The established corporate culture at OEM drives the business forward through a decentralised responsibility in the companies, in combination with support from the parent company. We work with sustainability in the same way. The parent company provides support with the development of competence and supplies tools and processes for employee surveys, supplier evaluations, and initiatives for quality and the environment. The daily commitment of employees makes a difference, and is a prerequisite for the success of OEM. It is the employees who promote the competitiveness of the company and contribute towards social development. It is therefore an important factor in work with sustainability to be an attractive employer, and to have workplace where employees are content, can develop and feel proud to represent. Sustainability is an ongoing process and OEM will continue to work with suppliers, create continuous improvements in OEM, and work to surpass the expectations of customers for products and solutions. Prior to 2021, a sustainability development programme was started to more clearly define and formulate targets for the sustainability work within the Group. The sustainability report covers all companies in the OEM group and is prepared in accordance with the statutory requirements in the Annual Accounts Act, chapter 6, 12 §. The Board of Directors has approved the sustainability report for submission.
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Business model OEM is one of Europe’s leading technology trading groups. The company is a link between its customers and leading manufacturers of components and systems for industrial applications. OEM brings value to its customers by offering a wide and diverse range of products, coupled with farreaching technical product competence and applications know-how. With our in-depth knowledge and extensive experience of different applications, OEM can contribute to the development work of customers, optimise components in their products, and through the refinement and composition of standard products to complex and specific solutions, improve the efficiency of their processes.
Strategies OEM has defined five strategic areas that are important for the company to continue to develop successfully and achieve its financial targets. Growth OEM creates growth by growing organically, through acquisitions and through geographic expansion. These three together will generate growth that meets the growth target. 1) Organic growth Organic growth is prioritised at OEM. OEM achieves organic growth by increasing its market shares and expanding the product range the company offers to its customers. Where OEM is well Page 2 (13)
established, businesses are expected to grow faster than the market average. In markets where OEM has yet to achieve a position among the five largest players, our ambition is to achieve considerably higher growth. 2) Acquisitions The acquisition of companies is a fundamental part of the work OEM does to develop the business. OEM acquires companies and product ranges that strengthen its market position within existing product areas on existing markets, including companies that add a completely new product range or give OEM access to a new geographic market. 3) Geographic expansion Geographic expansion to new markets takes place when there are good opportunities for OEM to become a prominent player by representing many of the company's suppliers. Product range OEM offers a product range consisting of industrial components and systems from leading suppliers. The range is adapted to the local markets in which OEM operates. Continuous development of the product range is of central importance for OEM – work that is carried out together with both existing and new suppliers. Each local marketing organisation is also tasked with finding new products that will further enhance the competitive edge of the portfolio of offerings. Marketing OEM has an intensive marketing that is primarily based on personal sales and web-based marketing. Personal meetings are crucial to understanding customer needs, and also an opportunity for OEM to offer its experience and technical competence. Face-to-face selling is supported by digital and printed marketing communication materials. Logistics OEM develops cost-effective logistics solutions that deliver a high level of customer service and quality. In total there are 15 logistics units in the group. Each unit adapts its range to operations and works to coordinate the stockholding with other warehouses. In connection with many of OEM’s logistics units there are processing units that effectively provide unique adjustments for specific customers and the installation of products. Employees and management All activities should be permeated by an informal culture with the focus on entrepreneurship. OEM gives its staff opportunities to develop within the company, taking into account the targets and strategies of the business and the ambitions of the staff. Recruitment and employee strategies will lead to a significant number of leadership positions being filled internally.
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Code of Conduct Since 2013, OEM has had a mutual Code of Conduct as a platform for the group’s work with sustainability. The objective is to create effective and responsible work with relevant activities, and that development in environmental, ethical and social issues takes place harmoniously. Clear accountability creates a sharper competitive edge and enhances its position as an attractive employer. Moreover, the company is inspiring a healthy business culture. OEM’s Code of Conduct is based on the ten principles set forth in the United Nation’s Global Compact in the areas of human rights, labour, the environment and anticorruption. These areas are the key components of the responsible approach that it is natural to take for all Group companies. The ten fundamental principles of the Code of Conduct: Human rights 1) 2)
OEM supports and respects international human rights within the sphere of the company’s influence. OEM does not participate in the infringement of human rights.
Labour law 3) 4) 5) 6)
OEM maintains freedom of association and the right to collective bargaining. OEM takes exception to all forms of forced labour. OEM takes exception to all types of child labour. OEM opposes discrimination in terms of recruitment and work assignments.
Environment 7) 8) 9)
OEM supports the prudence concept in terms of environmental risks. OEM takes initiatives to strengthen a greater environmental awareness. OEM encourages the development of eco-friendly technology.
Anticorruption 10) OEM opposes all forms of corruption, including extortion and bribery.
Sustainability activities Since the mutual Code of Conduct was introduced in 2013 all the companies in the group have implemented at least three activities related to sustainability that have been followed-up in the boards and management groups. The activities have been conducted in different areas and many of them involved the establishment of policies or employee training. A large number of activities have been carried out and this work will continue in a similar way, and focus on specific activities that can be followed up in all of the group companies. In 2020, one of these activities was to measure and report emissions of greenhouse gases in compliance with the Greenhouse Gas Protocol (GHG). This activity was common to all Group companies and has resulted in an initial survey of emissions related to the Group’s business activities, which will form the basis of a more target-oriented development programme during 2021.
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Focus on working with sustainability Strategy and control Sustainability is an important part of our strategy, and we aim to ensure that sustainability is taken into consideration in all the strategic decisions made within the organisation. OEM’s work with sustainability is in the first instance governed by our Code of Conduct, see above. The board of directors at OEM, through group management, has the overall responsibility for the group’s work with sustainability. The group management decide upon long-term overall targets within important areas. These are supplemented by respective business areas and subsidiaries developing targets and action plans. The group’s operative work with sustainability is managed in accordance with a wellestablished corporate culture, through a decentralised responsibility in group companies, together with coordination through the parent company’s resources, providing support with tools and processes. OEM is not involved in the detailed management of the companies, but promises an active ownership through board work follow-up and coordination.
Stakeholders Our work with sustainability is influenced by several stakeholders (customers, suppliers, staff, owners and society) who set requirements and have expectations of OEM. Stakeholders are groups in the vicinity of the company who directly or indirectly influence or are influenced by the business. It is important to have an open ongoing dialogue with them, since this contributes to focusing on and developing work with sustainability. INTRESSENTGRUPP
VIKTIGA FRÅGOR INOM HÅLLBARHET
DIALOG OCH SAMARBETE
KUNDER
Kundnöjdhet, affärsetik, hänsyn till miljöpåverkan
Dotterbolagen har nära dialog via personliga möten. Information lämnas via dotterbolagen och hemsida. Kundundersökningar.
LEVERANTÖRER
Affärsetik, sortimentsutveckling, kundnöjdhet Dotterbolagen har nära samarbete och dialog. Leverantörsutvärderingar genomförs.
MEDARBETARE
God arbetsmiljö, kompetensutveckling, attraktiva och konkurrenskraftiga villkor
Årliga utvecklingssamtal, utbildningar för kompetensutveckling och regelbundna medarbetarundersökningar, Dialog sker bl.a via chefer, intranät och mailutskick.
ÄGARE
Omsättning- och resultatutveckling, avkastning, affärsetik
Årsredovisning, delårsrapporter, analytiker-och investerarträffar, hemsida samt årsstämma.
SAMHÄLLE
Affärsetik, hänsyn till miljöpåverkan
Dotterbolagen samarbetar med närsamhällen vad gäller närmiljön. Dialog med myndigheter vad rör arbetsmiljö, miljö och produktansvar. Certifieringsorgan för ISO etc.
On the basis of OEM’s business model and the ongoing dialogue with the above stakeholders concerning the group’s most important sustainability issues, the following focal points and risk areas have been identified to be of the greatest importance for both OEM and the group’s stakeholders. Environmental responsibility – The environmental impact from the group’s products, product and passenger transport, and the heating of premises. Examples of risks: Purchase and sale of products that may contain environmentally hazardous substances, the use of environmentally hazardous packaging materials, transport of both products and passengers.
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Economic and ethical responsibility – Financial stability and strength is a prerequisite to invest in sustainable business development. Guarantee responsible business that represents human rights and opposes corruption. Examples of risks: The business stops developing, which affects the financial stability and strength. Departure from the group’s Code of Conduct, which leads to breach of human rights in the business of the group or suppliers. Offer of, or acceptance of bribes or other form of undue payment with a view to induce someone to act in conflict with the prescribed undertakings. Social responsibility – As a responsible employer to be able to offer employees enhanced competence, a sound working environment, good health and security, and to oppose discrimination and harassment in the business. Examples of risks: Working environment risks (that can put the lives and health of employees at risk). Every kind of discrimination, harassment, abuse or threats at the workplace. Other conditions that do not contribute to a safe and pleasant working environment for employees. OEM’s preventive measures, guidelines, targets and results in respective areas are reported below.
Environmental responsibility Environmentally related issues is an area that is affected by OEM’s Code of Conduct. The Code encourages actions and initiatives that lead to greater environmental responsibility and preventative measures in order to give priority to environmentally-friendly business practices and solutions. OEM has identified the transport of goods, travel, heating of premises and manufacturing and use of products as the areas having the greatest environmental impact. There has been a strong focus on these areas for many years and OEM strives to minimise the environmental impact as far as this is technically possible and environmentally motivated. It is also important to initiate and support the development initiative within these areas, work that is performed in close collaboration with the Group’s suppliers through product development and the creation of new products and suppliers. Several of the businesses in the group are quality and environmentally assured in accordance with ISO 9001 and ISO 14001. Products and range The group continues to search for and supply products and solutions that are climate smart and of high quality for customers, and which contribute to sustainable development and diminished impact on the environment. One example of this is the subsidiary Elektro Elco, which sells LED lighting. Sales of these products in 2020 have contributed to energy savings of between 110–135 million kWh a year in comparison with traditional lighting. This corresponds to the consumption of energy in some 6,500 Swedish houses/terraced houses, or more than all the houses/terraced houses in a municipality such as Tranås with 19,000 residents. OEM’s high level of product competence provides excellent opportunities to influence customers’ choices of components and solutions on the basis of quality and environmental perspectives. Through supplier assessments we aim to obtain a good overview of how suppliers work to promote sustainable development. OEM attaches immense importance to always supply the components that function best in the customers’ applications, and can therefore, through customer knowledge and technical ability, also initiate developments towards more sustainable components.
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Logistics The group’s logistics is to the very highest degree a sustainability factor. The optimisation of stock levels and handling reduces consumption and creates better access for customers, and also results in less lifting and handling for personnel. The businesses work continuously to optimise the ratio between incoming and outgoing deliveries so that the right quantity is purchased. This reduces both transports and the consumption of packaging materials. The environmental impacts of freight transport operators are monitored to enable the best transport options to be selected. OEM is also committed to reusing packaging materials as far as possible. Real estate The group continues to work to reduce the environmental impact from its business properties and other premises. The objective is, from year to year, to find energy saving areas to reduce consumption. The group’s logistics centre in Tranås, which was built in 2009, was further expanded in 2019 and now consists of 13,000 m2. During the building, both in 2009 and 2019, sustainability has been important on the basis of several different aspects, environmental impact, working environment, and economy. The energy requirement amounts to around 30% of the statutory levels in accordance with the regulations of the Swedish National Board of Housing, Building and Planning as a result of choosing geothermal heating in combination with a solar cell array consisting of 744 solar panels, the right choice of colours for the floors and ceilings, and installation of quick-closing doors to prevent cold draughts. The solar cell array installed in 2019 generated approximately 240 MWh during 2020. During warm periods of the year the geothermal heating is used to cool the premises, which means that there is no air conditioning that consumes energy. The advantage of a constant uniform temperature is that the climate in the premises is good both for the working environment and the products in stock. Lighting in most of the properties was replaced with LED lighting during the year and this will continue in 2021. As a result of the energy-saving measures, the electricity bill for the Tranås logistics centre in 2020 was more or less the same as in 2017, despite the facility’s area having increased by about 40%. At other properties, energy consumption has fallen by between 25 and 50%, depending on the property.
Company cars With a total of some 900 employees on several markets, the group also has a direct impact on the environment through the choice of company cars and carbon emissions from these. The objective is to aim for an annual reduction in carbon emissions through the choice of company cars, and where Page 7 (13)
possible to replace traditional meetings with video meetings. Adaptations and new working methods during 2020, which have been strongly characterised by the prevailing pandemic, have clearly shown that this is possible. To compensate for carbon emissions through financial contributions the largest subsidiary in the group has calculated the impact from company cars and chosen to enter into a cooperation agreement with the Swedish fund-raising trust “Vi Agroforestry”. Work was also initiated during 2020 to establish a new car policy for the Group with a focus on enabling and encouraging company cars without fossil-based fuels, so that they can be introduced in 2021. Emissions of greenhouse gases in compliance with the GHG Protocol To improve its sustainability efforts, OEM reported emissions of greenhouse gases in 2020 as defined by the GHG Protocol, which is one of the most widely used emissions reporting standards in the world. The GHG protocol requires emissions to be broken down into 3 categories or scopes. In 2020, OEM focuses on reporting in accordance with scopes 1 and 2, and kept to goods transport and business travel in scope 3. Scope 1 Direct greenhouse gas emissions over which the business has control. Scope 2 Indirect greenhouse gas emissions from electricity, district heating, district cooling and steam. Scope 3 Other indirect greenhouse gas emissions arising in the value chain. Type of emission Scope Impact Direct emissions 1 1040 tonnes CO2 2 0.11 tonnes CO2 Indirect emissions 3 2642 tonnes CO2
Mainly company car travel Mainly electricity use Mainly goods transport
Goods transport generates a significant share of emissions, followed by business travel by car. The impact of the pandemic on the company’s travel is evident through reduced emissions from business travel.
Greater focus on sustainability The results of the report also form a basis for future activities and the development of sustainability activities that began in 2020. In the future, the sustainability targets will be linked to the UN Global Goals, Agenda 2030, and some of its 17 goals. A sustainability board made up of individuals from a number of the Group's companies was also set up in 2020. The purpose of the board is to ensure there is an increased focus on sustainability throughout the Group. OEM has a strong and clear ambition to put greater focus on sustainability issues in the future by establishing clearer targets for the business and thus being able to work more strategically and purposefully within this area.
Economic and ethical responsibility OEM’s Code of Conduct embraces all the businesses and employees in the group and emphasises the importance of ethical behaviour and respect for human rights. The Code of Conduct also puts demands on suppliers. They must confirm in writing that they act within the framework of the law in Page 8 (13)
respective countries, oppose corruption and otherwise live up to the intentions of the Code Of Conduct, for example by offering their employees a safe and sound working environment where there is no child labour. The objective is to continuously increase the proportion of suppliers who confirm the Code of Conduct in writing as well as regularly perform supplier assessments. The group does not accept corruption, bribes or other unfair competitive measures, and all such events are reported. The OEM group supports and respects the protection of human rights and works to ensure that complicity in crime concerning the infringement of human rights does not occur. OEM has contributed financially to the UN Association of Sweden’s Girls Project, which reinforces the rights of girls and opposes child marriage and female genital mutilation in Ethiopia. Girls receive education and awareness of their human rights through this support. OEM has a web-based whistleblower function as the group is committed to a culture of openness and accountability with high ethical standards, and its employees play a key role in identifying any non-conformance with the values and ethical guidelines of the group. Every employee is given the opportunity to either openly or anonymously report all forms of suspected irregularities, which is important to promote a high level of business ethics. The chairman of the audit committee is the recipient of the whistleblower function. Economic stability and strength is a prerequisite to invest in sustainable business development. In a world that is continuously changing, the business must continuously develop. OEM’s overall vision is to be a leading technology trading group in industrial components and systems, in selected markets in Northern, Central and Eastern Europe. OEM offers a wide and diverse range of industrial components from leading suppliers, and through a well-developed local market organisation and effective logistics constitutes a better alternative to the suppliers establishing their own sales companies. OEM also contributes a high level of expertise and service. All of this creates a long-term partner for customers and suppliers, which in turn is synthesised in profitability, growth and development. The economic development can be followed in the Annual Report.
Social responsibility The OEM group aims to be experienced as an attractive employer of current, potential and former employees. This demands that all measures in the area of human resources are characterised by a professional attitude, with explicit guidelines for both managers and staff. The objective is that all employees undergo a performance appraisal every year concerning development, their situation, the working environment, and where appropriate discrimination, gender equality, health and safety, etc. In 2020, no follow-ups were performed, but in 2019 more than 90% of all employees had an appraisal. The commitment of employees make a difference OEM’s major competitive advantages are the competence and commitment of its employees. In an increasingly competitive market, where in many cases the products are becoming more and more similar, it is often the dedication and efforts of the employees that make the difference. The high level of expertise of the employees is based on the combination of top technical expertise and a strong sales focus. OEM’s product specialists and sellers are key persons in relations with manufacturers and customers. Their knowledge and commitment build lasting and trusting Page 9 (13)
relationships in line with OEM’s business model. It is becoming more and more important to develop additional value and effective internal processes, which in many cases are adapted to an increasingly digitalised world. The employees are the guarantee that OEM in both the short and long term can maintain its position as one of Europe’s leading technology trading groups. Personal development towards specific targets Employees who continually develop and have a long-term perspective, in combination with a continuous pipeline of young talent are important for OEM’s long-term competitiveness. OEM is therefore continually working to develop its attractiveness as an employer, both for existing and future employees. OEM encourages the development of all its employees in several different ways. The use of individual development plans is one of the most important activities. Business objectives are combined with individual goals to create plans that facilitate the ongoing development of the skills of all employees. The contents of the personal development plans are discussed at annual performance appraisals. Completed activities are evaluated and plans for the coming year are established. Skills development is part of the employees' personal development and their know-how and expertise are regularly updated through training in sales, technology, finance, IT and other areas. Ambitious sales force OEM has always had the development of its sales team as a focal area. The sales professionals must have extensive knowledge of the products, a strong sense of business responsibility and work closely alongside the customers. They can then independently drive the sales process forward and live up to OEM’s high ambitions concerning the ability of sellers to identify new business opportunities and give customers the best service on the market. The sales personnel follow training programmes that run over several years to enable them to meet the requirements. Newly-hired sales personnel attend internal and external courses aimed at promoting personal development and creating an efficient sales methodology. A solid background in sales also opens doors to other positions at OEM, such as sales manager or business area manager. Creativity and inquiring minds are encouraged All of OEM's employees are encouraged to shape their own careers by being curious, creative and goal-oriented. Most leaders are recruited internally and a great amount of energy and effort is channelled into identifying and developing individuals with leadership qualities who can become future leaders, both locally and centrally. Career progression is generally within the respective company. Complementing this are central initiatives, such as Group-wide talent-development programmes aimed at improving skills and building networks among the employees. Experience of sales work or work within the product organisation is highly valued in the employee's career progression and the company encourages employees to move to positions in different parts of the company and different countries too. OEM's leadership culture is based on strong teams and specific targets. Each manager builds his or her team and sets clear individual goals for his or her colleagues. Young employees strengthen the organisation The organisation continually recruits young talent with an interest in technology and sales. Thanks to well-designed induction programmes and personal development plans, the new employees quickly learn their duties and are assigned progressively more responsible work. Young talents who are given responsibility and development opportunities within the organisation also creates a good breeding ground to be able to develop into leaders, and OEM has a long tradition of recruiting the majority of new managers and leaders internally. Page 10 (13)
For example, new employees are introduced through trainee programmes for newly graduated employees with degrees in engineering or economics, and the potential to assume leadership responsibilities in the future. OEM also cooperates with several different educational institutions, by offering traineeship and guidance in thesis projects. This is a means of attracting future recruitment, and at the same time spreading awareness of OEM’s business activities. Commitment to equality At OEM, everyone has equal opportunities based on qualifications for the job, without regard to religion, ethnicity, nationality, gender, age, disability or sexual orientation. As part of OEM's ongoing work with sustainability most of the group companies carry out in-depth activities in the area of equal opportunities, such as the training of employees and preparation of policy documents. Gender equality is a challenge within the group since there have traditionally been more men than women working with technology trading. The group companies work actively to promote gender equality in different ways at all levels in the organisation. In 2020 the proportion of women in the Group remained unchanged from the previous year and amounted to 20%, while in 2019 the share of women increased by 2%. The technology trading sector has historically been, and still is, dominated by men. OEM strives to improve gender equality in the business by seeking to employ more women to male-dominated positions. Well-being is a core issue The well-being of employees has been a core issue ever since OEM was first established. Well-being and health are essential in order to perform and develop, both as an individual and as a group. OEM invests in creating a pleasant, safe and secure working environment, and the company encourages a healthy lifestyle by supporting physical exercise and preventive health care. Activities designed to create good cohesion and improve group dynamics are often conducted in conjunction with conferences or workplace meetings. In 2020 this has entailed a special challenge, as the opportunities for joint activities have been significantly limited. This has also meant that OEM has taken the well-being and health of employees very seriously by following up and evaluating the conditions that impact the employee’s work environment to varying degrees. This has resulted in measures to facilitate e.g. working from home, physical distancing at the work places, digital meetings and other parts to reduce the spread of infection. Employee surveys Employee surveys are carried out to follow-up the long-term and strategic development of human resources. Employee surveys cover basic working conditions, health and the working environment, motivation and incentive, and job satisfaction. In the most recent survey, the response rate was 97% of employees in the group with an overall Satisfied employee index of 4.1 in a scale with a maximum of 5.0 and where most of the companies recorded 3.9 to 4.2, which may be considered to be relatively satisfied employees. Earlier in an equivalent survey the Satisfied employee index was 4.0. This is also reflected in that many employees have worked for a long time in the companies. The employee surveys are reported and processed the board meetings in respective companies. This is a way of identifying OEM’s strengths and weaknesses as an employer and can be followed up to achieve further improvements. Employee
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surveys will continue to be carried out regularly to chart changes and to implement improvements and thereby continue to increase the Satisfied employee index. Employee turnover OEM strives to ensure that employees get on well and develop so that key competence is retained and that OEM is seen as an attractive employer during the recruitment of new talent. At the same time, the Group is dependent on renewal and new forces that balance long-term skills and experiences. Accordingly, OEM strives to have a staff turnover at a low yet reasonable level. In 2020 there was a total employee turnover of 10%. Employee turnover decreased during the year by about 8 percentage points and the reason is most likely the pandemic that affected virtually the whole of 2020, and which markedly reduced mobility on the labour market. During the year the Group’s workforce has fallen by a total of 14 people, and significantly fewer than previous years have chosen to leave their employment at the companies. However, what is most important to OEM is that its employees are happy and feel that they are developing, and the aim is to capture this in individual performance appraisals as well as through continuous development work. Employee turnover
With the pandemic as the probable contributing factor, employee turnover fell by 8% in 2020.
Age distribution (number/age)
Period of employment (number/years)
The average age of an employee at OEM is 40 years old.
On average an employee at OEM works just over 7 years in the Group.
Absence due to illness In 2020 absence due to illness was on average 6.5 days per person, which is a reduction of 2.2 days from the previous year. Health is essential in order to perform and develop, both as an individual and as a group. The objective is that no one should be affected by physical or mental ill-health as a result Page 12 (13)
of their working situation. OEM encourages a healthy lifestyle by supporting physical exercise and preventive healthcare. Labour law All our companies and suppliers must, in accordance with our Code of Conduct, comply with the minimum requirements in national legislation concerning labour law. OEM has zero tolerance for forced labour and works actively to ensure there are no infringements of regulations in our business or our value chain.
OUR ROLE IN SOCIETY OEM accepts responsibility also at social level. The companies in OEM have a strong local anchorage and they often do business in small localities. The companies contribute towards strengthening the societies where they are active through a vital and long-term entrepreneurship, support of local club activities and cooperation with different organisations. The companies strive to recruit new employees locally and to offer job opportunities to young people. Through an active and constructive dialogue with the local society the companies want to create the prerequisites for local growth. Taxes Through employer's contributions and taxes the group contributes to our communal welfare. National tax laws and regulations are followed in all the respective countries where business is carried out.
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