Innovative businesses and driven entrepreneurs are the key to pushing society forward and for the development of a sustainable future. Entrepreneurial people who have the drive and engagement to navigate the fast-paced and transformative environment while identifying and grasping the opportunities it creates. We are their family. At Indutrade, we develop and acquire successful companies with high-technology products operating in well-defined niches who are ready to take the next step on their growth journeys. Our decentralized culture with a strong local presence is the key to our success. We are convinced that the best decisions are made by those closest to the customer. That is why we empower our people and companies. That is why we are keen to understand the people and the culture of each company we acquire. With a long-term perspective, we support our companies on their journeys, always with the aim of providing sustainable, profitable growth.
That is what benefits individuals, companies, and society at large. That's our definition of making a difference.
With that introduction, a warm welcome to Indutrade's Capital Markets Day 2022. It's been four years, as Bo said before the launch here, since we had our last Capital Markets Day. During these years, we have gone through a global pandemic and facing restrictions and adapting to a new digital world. It is therefore extra satisfying, of course, that we can gather under the same roof again. We also have online participants, so I would like to welcome all of you here too. My name is Mårten Svanberg. I am Head of Investor Relations and External Communications at Indutrade, and I will be the moderator during this afternoon.
We have a quite intensive presentation agenda ahead of us, so I think that we will have a quick look on that before we jump into the presentations. First, I would also like to say that if time allows it, we will have a short Q&A session where I will open up for questions from the audience after each presentation. There will also be a longer Q&A at the end of the day. First, we will hear our President and CEO, Bo Annvik, who will give us a business update and talk more about the strategic priorities for the upcoming years and of course, also comment on the newly revised and the increased EBITDA margin target that we announced earlier this morning.
Our CFO, Patrik Johnson, will then enter the stage to talk more about the financials and also our governance model before Desiré Haglund, our head of sustainability, will talk more about how we as a group work with the sustainability, but of course also the hard work that our companies are doing within that field. We will have a short break, a leg stretcher of about 15 minutes. When we get back, we have a lot of other exciting presentations ahead of us, but I will come back to that after the break. Also for the one of you who is watching the online webcast, if you want to ask a question, please use the function that you find below the webcast.
With that said, I would like to welcome our President and CEO, Bo Annvik.
Thank you, Mårten. Again, welcome on my behalf as well. Great to see all of you here, and we have been looking forward to this day quite some years, also you online. As I said before, it's a tremendously good opportunity for you to mix and mingle with the group management of Indutrade today. We have several of our MDs of the companies and the exhibition in the rear of the room here. So take that opportunity to learn more about Indutrade and liaise with us during the day, not least in the breaks. I will talk a bit about the background of Indutrade and give a bit of a brief historic perspective on our financial performance.
I'll talk a bit about the characteristics of Indutrade today and our, I would say, resilience in a business cycle perspective. I'll talk about business priorities and, as Mårten said, obviously also comment on our financial objectives. Here is the Indutrade management team, and it's a professional, knowledgeable, experienced team which I am very satisfied to be part of. We are organized in eight different business areas, and the business area heads are on top there, and they are all very experienced in their roles. They have been with Indutrade quite some years, all of them. They know our culture, our business model. They are still keen to develop their businesses and move forward.
We have some roles also, sort of supporting in a group perspective on the finance side, on the people side, on the business development side, and also not least on the acquisition side. Again, most of these people are here and could be quite interesting to perhaps touch upon one of the members of the team, Peter Eriksson. I'm not sure if you can see his picture down in the back there, but Peter is now 69 years old, works full time, and was the person who built our business area Flow Technology, and now he has entered into a role advising me and all the others in the team in a great way. People stay quite a long time with Indutrade.
Indutrade was founded 1978, and I'm only the third CEO of Indutrade. It's a stable and predictable company with a great atmosphere. Brief perspective on our performance in the last five years. In 2017, our sales was around SEK 14.8 billion, and now in 2021, we ended just below SEK 22 billion . As you can see on the slide there, we have a rolling forecast which says that we should probably end up around SEK 26 billion at the end of this year. Quite a good growth. For those who follow us more regularly, you know that we have a financial objective to grow in total at least 10% per year.
You also see that we have grown a little bit more than that in sales, and actually 13% on average in EBITDA, so a good profitability development. We have mostly grown via acquisitions, but now taking our organic growth up a little bit. In a 10-year perspective, we have been more organically around 2%-3% growth, and now the last five years, it's been 4%. That's highly prioritized and something I will elaborate a lot more on later in my presentation. The average EBITDA margin has been 12.9% in the last five years, and our target was 12%, so it was about time now to update the target.
We announced that this morning, the new target is 14%, and I will also explain more how we came to that number, and I think Patrik in his presentation will also touch upon that. We have also added 60 new companies during 2017 to 2021, so quite a number. You should all know that those 60 are companies we know individually, all of them, and we are obviously on a first-name basis with all those managing directors. So it's a big number, but each company is very, very important to Indutrade and something we tend to carefully and closely and want to sort of nurture, support, and constructively challenge on their way forward. Some characteristics in terms of Indutrade in a diversification perspective, you can say.
We are not dependent on any single segment in a market perspective or technology perspective. We are not dependent on single companies. We are rather broad-based, as you can see on this slide here now. Number of companies, approximately 200, and you can see that the 10 largest companies represent around 20% of sales. We have lessened our sort of linkage to single companies and are more broad-based in that perspective. We are also present in quite a lot of different market segments and also product and technology areas. The larger segments are construction-related, and we also have a large engineering segment, med tech, healthcare, energy. We are in the process industry, and we are in water and wastewater, to mention a few.
If we go into product areas, we are having valves, Flow Technology valves as our leading product area. We also have industrial equipment, we have fasteners, and we have filters and yeah, lots of different small industrial components, industrial equipment in our product segment area. We have grown up to 8,600 employees, and we are present in around 30 countries. We started out 1978 mostly investing in privately held family-based companies who were technical trading companies. Most of them represented a, maybe a German company, an American company in the Swedish or Scandinavian market.
They had high, I would say, application knowledge of a certain process industry or another industrial area, and then they helped to sell these products into these industries. We have also more recently invested stepwise more and more into companies with proprietary products and own assembly, own manufacturing. You see that it's a 57-43 split now, and we appreciate both these categories of companies. They are in theory a little bit different. The trading companies are in theory a little bit more local, maybe not as large organic growth capability because of that. They might have a little bit lower EBIT potential than the other category, but they have, they are more people light, more capital light. The other category with proprietary products, they have a little bit better organic capability.
They can sell locally, regionally, globally, and they can also innovate their own sort of product. They usually have a little bit, in theory, at least higher EBIT potential. They tie up a little bit more capital and are a little bit more people intense. If you compare the return on capital from both categories, they are quite equal actually. We will continue to invest in both categories, and we'll work maybe towards a 50-50 balance going forward. What sort of stands out in terms of being Indutrade, and what are the traits which make Indutrade a really good group of companies? One thing is definitely that we are decentralized, we are entrepreneurial, and our companies are very close to their customers.
They know their customers intimately, and they know usually more about some of the customer application areas than the customers themselves. They take decisions very close to these customers. They develop products in conjunction with their customers, so it's a very nimble, agile, dynamic situation, which works extremely well. As I said, we are also compared to a larger industrial integrated company. We are more capital light, more people light. We can maneuver. We are a little bit more dynamic in that sense. We have less fixed cost to sort of take care of in different business cycles. When Indutrade was started, was also a clear idea that the product portfolio should be preferably technical components with a recurring sort of buying pattern from the customer.
If you think of a large process industry, and that production system includes a lot of different technical products components, Indutrade usually have, for example, valves, as I spoke about earlier. We have filters, we have seals, we have fasteners, things which needs to be sort of changed in a maintenance schedule, both in a high cycle and in a low cycle. Usually it's so that our people know the technical particularities about these products better than the customer actually. They ask our companies, "What type of filter should I have in this application?" Or, "What type of valve should we choose here? What's the best sort of efficiency?" And so on and so forth. There's a high level of trust in our companies. Most of these industries, they work on an uptime sort of optimization.
To change a filter or change a filter supplier is a large risk if you want to sort of optimize your uptime. The sort of drive for our customers to change from an Indutrade company to someone else is quite low, I would say. If the relationship work, the piece price is usually quite low, so they stay with a high-quality supplier who have supported them a long time. Lastly, I think we have quite good exposure towards a lot of different growth segments, and that I will elaborate on more in another part of the presentation. All in all, we have a quite low or almost none of a high sort of business climate risk or segment dependency. We stand out strong in that perspective.
Another dimension which sort of strengthens that is, the average Indutrade company is not very big. It's around SEK 100 million , SEK 120 million on average, maybe 30, 40, 50 employees. To maneuver a company like that is obviously quite a lot easier than a large integrated company with 4,000, 5,000, 6,000, 7,000 people. In a smaller cycle, if the top line or the sales drops 10% and you need to sort of adjust your cost base, you need to manage maybe two, three, four persons on average in an Indutrade company versus a big layoff program in a larger sort of more integrated industrial company.
This sort of aggregation of small companies makes it a lot easier to navigate in different business climates, I would say both downwards and upwards to scale up and scale down. We made a small analysis to compare Indutrade with some larger integrated industrial companies in a business cycle perspective. This is not very scientific, but still, I think worthwhile presenting. We took some of the really high caliber, larger industrial companies like Atlas Copco, Sandvik, ASSA ABLOY, and so on, seven of them, and compared their financial aggregates in 2008, 2009 versus how Indutrade performed during that time period. We looked at the sales development, how that sort of performed, the organic part of sales. We look at the EBITDA margin and how the EBITDA margin shifted, and also the EPS development.
You can see in the Indutrade column there that it's basically green on every number to Indutrade's favor. Sometimes in conferences like this or in other type of meetings, I get the question if isn't Indutrade a bit cyclical like you know other type of larger industrial companies? I would say that we are absolutely less cyclical than an average large industrial company based on our agility, based on the aggregation of the smaller companies, based on this decentralization, and based on that it's easier to maneuver a small company than a big company in fluctuations.
Even if the business climate now is potentially becoming more and more difficult, we have already now experienced the phase of supply chain issues, we have interest rates increasing, we have inflation increasing, and now there are talks about the potential recession and so on and so forth. I would say even if that happens, I think there are a lot of underlying trends which work in our favor, and I'll just take the moment to explain a few of them. Starting out with metro areas in the Western world, they were basically all developed from a long time back, but during the Industrial Revolution and onwards. If we take the water distribution and water treatment type of systems in these metro areas, they are extremely old.
In a lot of them, you still have a lot of wooden pipes in the sort of water distribution systems around in these areas. We obviously consume a lot more water and the demand on these systems are much higher now. There is a constant sort of need for upgrading and improving in these types of areas in basically every city in the Western world. There is an underlying need to upgrade and we have a large Flow Technology business area with those types of components which are needed for this type of upgrades. It's not a super big growth, but it's a steady growth which happens sort of continuously, which we are part of.
You have the sustainability trend, and I think it's mostly apparent in the automotive area, vehicle manufacturing of all kinds, I would say. You go from combustion driven cars and vehicles to electrification. We as Indutrade, we are not really part of the direct material supplies to these vehicles and that electrification. When you turn a combustion engine facility or factory to assemble electric drivetrains, you need to rebuild a lot obviously. Again, here you need flow technology, you need measurement and system technologies, instrumentations, which a lot of our companies are part of and supplying. There are a lot of battery capacity being built around us, again, in projects which Indutrade companies are part of. You have the whole energy sector where there is still a lot of renewables being built.
Now there's gonna be more nuclear power being built. We will be less dependent on Russian gas, so they are building new LNG terminals in large parts of Europe and so on and so forth. There is a lot of opportunity, I would say, in these sectors for smaller companies like the companies we have in our group. You can always find projects, even in a weaker cycle, to sort of fill your order book with in a good way. Also, the geopolitical developments are, I would say, working up opportunities in all kinds of areas and not least on the gas side, we see that switch now, which I already spoke about from Russian gas to something else.
Stepwise, I think we will see more hydrogen being used in different parts of the energy sector. Again, we are positioned to take part of that as Indutrade companies. Also, digitalization and technological advancements need precision instruments, need sensors, need measurements, and things that are part of the Indutrade Group portfolio of companies. I'm quite optimistic. Most of our companies are living on a day-to-day operation with which are more OpEx related, you can say, and then they top up their businesses with different types of projects and CapEx related businesses.
Again, if you are around EUR 10 million in sales, you will find opportunities around you to maneuver in a good and flexible way. Talking a little bit about our strategic development, we always want to be predictable. We want to be stable. We don't want to surprise an audience like you. I think we have been quite evolutionary in our development as a group. If you take geography, we have evolved from being Scandinavian Nordic to going into a broader part of the Western European area. In terms of acquiring companies, we started out mostly with the trading companies, and then we have step-by-step added companies with proprietary technology and own assemblies. Now we are acquiring both of those categories. The early part of our strategic journey was about building a portfolio.
Now when we have a large portfolio of 200 companies, it's more about developing the portfolio we have. That's a key focus. However, also obviously very keen on continuing to acquire good companies. We have evolved from having more of a singular profitability focus to also add capital efficiency, optimizations, and also growth, organic growth focus. In all these areas, we have evolved in a fairly natural and predictable way as a group, and that's the way we intend to develop also Indutrade going forward. The green line in the bottom here has always been true that Indutrade is about passionate entrepreneurs. It's about successful companies in a decentralized fashion. We are quite stable, and we have a strong platform to stand on.
Most of our success, I would say, has been linked to that we have been true to that value-based foundation. We believe extremely much in entrepreneurship. We believe in decentralization. We believe in being long-term and people-centric. When we acquire a company, we obviously assess that company around these parameters. When we recruit new managing directors, we assess those persons if they can fit to these principles. We are very value-based, and it's an extremely strong culture. If some element comes into the Indutrade Group, which is not sort of coherent to that culture, it's being pushed away step by step as not fitting in. It's quite strong. It's a fundamental strength we have. It's very predictable and I would say almost something you can grasp in the company.
We have some group development areas. I'll elaborate more on them in a different slide here. We have a clear strategic direction, which is about developing more organically and at the same time being sort of aggressive in a professional way when it comes to buying good companies. We have had an overall objective being sustainable, profitable growth for quite some years now. Everybody within Indutrade, if you're a company leader, you know that what we are asking for is that you develop your company towards sustainable, profitable growth. Our vision is an entrepreneurial world where people make a difference. Coming back to the strategic priorities, my, I would say, single most important area since some time now is to move the group into more organic development mode.
As I said in the beginning, in the last 10 years, we have been a bit weak in terms of the organic side. We have been around 2%-3% in terms of organic growth, basically growing with inflation. Now we will step-by-step try to improve that, not dramatically. We are not gonna grow sort of 10% per year in a sort of normal inflationary environment. Tweak the group to go towards 3.5%, 4%, 4.5%, maybe up to 5%, in some time. That's the ambition level and the mindset we have. At the same time we do that, we're obviously gonna try to acquire good companies, and we are optimistic that we will be sort of successful in doing that.
There is a large pool of companies in the Western European sort of scope for us to buy. There is no problem sort of theoretically to define those types of companies. I think we have a very strong, compelling story to tell. We have been in this business since 1978. We have a good reputation, and we have a lot of good ambassadors in terms of people who have sold companies to us and can really say that Indutrade is true to their business model and to their values. Continue to capitalize on growth segments. We are in general quite opportunistic, but we also have certain segments where we are having sort of prioritized activities to find the companies.
I will come back to that, and Jonas, our head of acquisitions, will also talk more about that later on. Why is organic growth important for Indutrade? We have been quite successful in the last years in terms of acquisition growth. Well, as an individual company, I think organic growth is a receipt in terms of that you are credible and you're competitive, and you actually deliver value to your customer, and the customer comes back to you and want to buy more from you. You're doing something good, you provide value for the customer, and that there is a repeat buy is obviously a receipt that you are doing something that they appreciate. If you don't grow, there is a risk that you stagnate as a company. You're on the same level year after year after year.
If you don't grow, you can't really recruit new talent and mix your sort of employee group with older, experienced people and younger energetic persons with different sort of talent and so on and so forth. You might become a little bit stale and stagnant. I think the growth aspect makes us and our companies more attractive also in a talent management perspective. It's obviously accretive in terms of profit and value to provide organic growth. Also in a strategic perspective on Indutrade. We are now 200 companies. We have the ambition to double the size of Indutrade in five to seven years. If you continue just to buy companies and have a fairly low organic growth, it becomes quite a lot of acquisitions you have to do.
I think the organic growth part is also de-risking the strategic perspective of Indutrade as a group. Not being so reliant on the acquisition side, but actually having a professional growth based on innovation and being competitive and successful and balancing that with continuing to doing acquisitions. I think it's making a lot of sense for us as a group to invest time, resource, in becoming better and better in terms of organic growth. When we engage in a company, what is it actually which is beneficial for the company and where do we make a difference? Well, first of all, we engage obviously very much in terms of the leadership of the company. We do that from the first part when we acquire the company, we assess the owner very much.
We want that owner to fit with our culture, fit with our principles. We always want the owner to stay with the business because we only buy successful businesses, and the owner have obviously done something good over the years to make the business successful. It's a priority for us to take these owners and ask them to stay as MDs. Sometimes they, for different reasons, need to leave. It could be age, it could be different other aspects. We need to recruit someone else. We prefer to recruit internally. Hopefully, there is a sales director or an operational director which we can promote to managing director. Whomever it is, that decision is extremely important for us.
We take our time to make those decisions right because in a decentralized way, we leave obviously a lot of the, you know, aspect of growing that company, taking responsibility for that company with the local MD. That's an important decision which we engage in broadly, I would say, in Indutrade. We support the company with investments. Some owners, they actually divest their companies because the company come to a certain stage of complexity or risk, and they don't want to take all of that risk themselves, so they want to share it or let another owner take more of the financial risk. We help them with different types of investments on their journey forward. It's the knowledge-sharing aspect, which I think is tremendously important and good.
Most of these owners and entrepreneurs are usually quite lonely, when they operate before they are coming into Indutrade. Few of them have external board members. They might have, an accountant or a bank contact or someone they discuss business or priorities with, but they don't have a professional board, and they are quite, lonely in terms of, sounding boards, I would say. When they come into the world of Indutrade with 200 MDs and a lot of knowledge-sharing opportunities, you see energy, you see inspiration, you see knowledge-sharing, and that's a big part, I think, for a lot of these, persons coming into Indutrade where we actually add a lot of, positive knowledge.
If we look at the acquisition side, we have been doing this, as I said, for 40+ years. At the outset, we are opportunity-oriented, but we know exactly what we are looking for in terms of segments or technology areas. We are only, as most of you know, business to business-oriented. I think we have a quite good ability to say no, and that's quite a lot of investment companies who are perhaps a little bit smaller, a bit younger, they are a little bit more eager to buy, and sometimes those acquisitions fail for certain reasons.
I think we over the years have created an ability and a luxury based on our performance to actually say no to quite a lot of cases which we don't fully have confidence in or fully believe in. We have quite a high sort of level of both brokers and internal persons who come with cases to us on a regular basis, which Jonas will explain more in a moment here. It's important to have that luxury to be able to say no and still be able to make around 20 acquisitions per year. You know that there is gonna be high quality opportunities for us even if we say no to this particular one.
We only invest in successful companies, stable companies with the right type of owners in terms of value, in terms of culture. We are quite picky in that sense, and we prefer longer, I would say, acquisition schedules or times, so we get to know these persons quite well over time, have many meetings and reduce risk in that sense. We are fortunate and we are capable and we are also optimistic in terms of continuing a successful acquisition growth journey going forward. In terms of ambition, we have said that each business area should try to make two to three acquisitions per year. Since we have eight business areas, that equals up to 16-24 acquisitions per year.
This can fluctuate a bit, if we potentially buy a little bit of a bigger company, an X number of companies per quarter or per six months or even per 12 months. We work hard, and when we find the right opportunities, we try to seize them, and then we try to close them basically. It makes up to about these numbers in a logical way. How do we work on a group level in terms of trying to support our companies? We have singled out five different areas which we think are value-creating for the group. The first one, and maybe the most important one is the people dimension.
As I said, we are decentralized, we are dependent on these entrepreneurial MDs, and it's very important that we find the right ones, and we try to also develop them over time. We have, in the last, I don't know, five years or so, developed quite a lot of tools and forums and development programs which are tailor-made for Indutrade, fits our purposes, in a good way. To mention one example, we have a program for managing directors, where they attend 15 managing directors together during one year in eight different modules. Every module is three days.
These modules are about everything from leadership development to actually business management, to some financial dimensions, to sustainability, innovation, and things like this, which every business leader needs, but it's linked to the size of company Indutrade has. They learn a lot of new things, but the key is that they do this with 15 colleagues over one year, so they get to know these managing directors very well. When the program is over, they obviously have a lot of possibilities to continue to interact and benchmark and share knowledge with each other. That's one way and one example of how we, I think, create value for our companies in a people perspective. The knowledge-sharing dimension is also very important and very, I would say, creative in terms of the investment.
We have a portal with a lot of useful information about our companies, which is easy for every employee within Indutrade to find information about a particular company. We have conferences, large conferences with all the managing directors. We have been doing that one time per year, and we have also business area conferences. We have also specific meetings on particular topics, which could be technology-related, Internet of Things, or it could be a certain market segment, pulp and paper. Then we gather companies which we think are having benefit from participating in something like that. To attend a development program or to attend a knowledge-sharing session is always voluntary. We don't force anyone to participate in anything like that.
It's an active choice by a managing director. They think it's value-adding if I attend. We are quite, I would say, particular about not having too many mandatory things for our companies. Obviously, some financial reporting, we have a centralized treasury and things like that. In terms of the business-related activities we offer, it's usually on a or not a mandatory basis. We have sustainability. We have quite high ambitions in this area, and I will elaborate more on that on a different slide. We have something we call professional ownership, which is more governance-related. How do we work with our boards?
We have, I would say, agendas which are set and something all companies basically use. We have review meetings, we have business management tools and things like that which provide efficiency, professionalism, and also making things transparent in the group in a quick way. The last area here is scalability. Super important to be on top of that. When you add, for example, 60 companies in five years, you need 60 chairpersons, you need three or four board members in these companies which are professional and eager to participate in these boards. They are obviously not just sitting around and waiting on these opportunities. Scalability is something which is very important for us to work on.
What we have done recently in this area is that we have added a new layer in the group. When I joined Indutrade, we had the business areas, and then basically the business areas were chairpersons in most of our operating companies. Now when we are becoming more and more companies, we have introduced something we call the business unit leader, sort of a step between the MDs and the business areas, where an experienced managing director who wants to take on more, sort of, responsibility, they become chairperson in a sister company. They are maybe a board member in another company. Then we build clusters around successful and proven business leaders within Indutrade in a good way. We are also making sure that the companies are building management teams.
If you're a small company, the company might have been quite centered around the managing director in the past. For that particular company to double the size of the company, the managing director usually becomes the bottleneck. It's not apparent for maybe the owner when you're in the middle of all of this, but in a discussion with the board, it becomes apparent and you need to appoint a sales director, an operational director, a financial director, and so on and so forth. You're a team who can drive this company forward and provide the growth necessary. It's also, if you should take the step from managing director to business unit leader, you cannot do that if you don't have a capable management team around you. That's another aspect of why we are keen on building teams.
We also have, I would say, recruitment processes, and we have an onboarding program where new managing directors will come to the Indutrade offices and spend basically some days with us in the management team, and we can introduce them to the culture, introduce them to the business practices and priorities we have, and also to the different teams in terms of finance and HR and so on and so forth. We also work on the board side, as I said. We don't have all these chairpersons ready and available.
We need to educate them, so we have development programs for chairpersons, board members, where they basically learn how to go from being an operational managing director to using more of influencing skills and being successful and efficient in a board environment. This is very essential to cater for the growth to come, I would say, to be one step ahead in terms of scalability. In terms of sustainability, we have three key priorities, mental priority, and we have something linked to products and markets and innovation, you can say. We have chosen to accelerate a bit more linked to the environmental dimension, where we feel that we need to move quicker than we have done in the past. We do that in different ways.
Desiré will elaborate more on that soon here after me. We obviously have some group-oriented focus areas, carbon literacy, basically increasing the knowledge as such about the importance of bringing down greenhouse gases in society as such, but also with our companies. We do climate risk analysis on a group level to understand what the different risks we might have in front of us there. Also on the acquisition side, we are more keen to bring in the sustainability dimension in our due diligence and basically assessing the business aspects in a sustainability perspective as well. We obviously have our companies. We have some high emitters, a handful of companies which need extra attention, I would say, and extra acceleration. We have a program for them.
Then we have broadly the rest of the companies with more normal situation. We have quite a lot of development programs, training programs, and we are keen that every company make their materiality analysis and build their own KPIs and objectives and programs in terms of how to improve in sustainability. In terms of the financial targets, as I said in the beginning, we have increased EBITDA target from at least 12% to at least 14% over a business cycle. If we look at the five years between 2017 and 2021, we are at 12.9%. We are already now above the level where we have as a target, and it was a little bit overdue in terms of presenting a new target, I would say.
The business climate around us now is providing a little bit extra risk, but we have discussed that in the management team and also with our board, and we feel confident that it's absolutely the right time to present this now and start to strive towards this going forward. We have the capability to be above 14% in good times when the demand is stable and strong. We have proven that not least last year and also this year in a number of quarters. The challenge is obviously to also perform in more difficult business cycles.
As I spoke of before, we feel that we are quite resilient, and we are quite confident that the agility and the decentralization, the entrepreneurship in our business model will help us perform well and definitely better than industrial peers in that perspective. If we look at all our financial targets, it's based on growth, a minimum of 10% growth per year. I already commented on the EBITDA margin. We have a return on capital employed at minimum 20%. Logically, we would have also increased that target when we increased the EBITDA target, everything else being equal.
We have reasoned that we still think this is a good level to perform at, and we will also give us some time now to see how the acquisition market is developing in terms of multiples. We are also slightly more geared at in our acquisition strategy to buy companies with organic growth potential. It might be so that we sometimes need to pay a little bit more for a really high-quality company than what we have done on average in the past and so on. We'll see how that turn out, but we have kept that target level for the time being. Then we have net debt equity below 100%, and we have a dividend target of 30%-50% of net profit.
If I summarize, I am confident that we have a very strong business model which will work great also for the next sort of five years period coming, and again, based on this decentralization, based on these entrepreneurial companies. We are gearing towards growth segments, and we have capabilities to invest both organically and in acquisitions. I'm very optimistic that we will live up to this new financial target. Depending on the business climate, we are definitely geared on trying to double the size of Indutrade in the next five to seven years, and I feel optimistic about that. By that, I end my presentation, and we can open up maybe for a quick question, Mårten.
Yes.
What do you think?
Let's open up for one quick question. Do we have anyone from the audience?
Yeah
It seems. Okay, perfect. Thank you very much, Bo.
Thank you, Mårten.
Patrik Johnson, our CFO, please welcome up on stage.
Thank you, Mårten, and thank you, Bo. My name is Patrik Johnson, CFO since four or five years now. I will talk about the financial development, of course, and of our financial performance and also financial position, financing and also in the end governance a little bit. This slide Bo also showed, and we have a track record, long track record since the IPO, with very nice, impressive development, both in terms of sales and also profitability. As you can see here, the last 10 years, we've grown sales by 11% per annum, and EBITDA has grown even more, 13% per annum the last 10 years.
That has also then lifted EBITA margin from around 11%-12% if you go back 10 years, up to a level of 14.7% the last year, and now the last quarters we have been on levels above 15%. The new EBITA margin target is 14%, but then as Bo said, it's over a business cycle. If you look at the five-year average, you can see that we are on 12.9% as per the end of last year. Of course, business cycle is not necessarily five years, but I think we've said that that is a sort of a good approximation and we can sort of compare those to each other.
Continuing and diving a bit deeper into the development the last five years, here you can see the five-year EBIT sales and EBITA bridge. We on this five-year period also grew the sales 11% per year, whereof organic was 4%, and the acquisition delivered 7% during that timeframe. If you go over to the EBITA dimension, we grew that as much as 17% the last five years, of which 8% was organic and 9% acquisitions. This means, of course, that both dimensions, organic and acquisitions, was margin accretive over this period. As Bo talked about a lot now, the organic performance is really important for us. It's something we worked very intensively with during the last years.
Looking at that performance over time and laying out the performance over a time series of 15 years, this is the sales growth you then see. I think we see that we manage actually to lift the performance sales-wise and profit-wise on the organic side gradually. If you go back to 2007 to 2016, 2017, we had an organic growth of around 2%-3%. Over the whole this time period, it was 3.3%, as you can see. The last five years, 4%. On the EBITDA side, operational leverage for the whole time series, we are on around 17%-18% additional profit on additional sales. The last five years, as high as 24%. Of course, helped a lot by the very strong business climate that we've had.
We believe also that the increased focus in this area has also contributed a lot. We think also that the ambitions we had on the acquisition side to really look for companies with organic growth, sort of, improving the portfolio quality even further has also, of course, helped this journey. If that's the organic side, acquisitions, diving into the acquisition side, and here we've had also a really successful track record over many years, as you can see. Looking first then at number of acquisitions, and that is, of course, a bit dangerous and tricky to follow, at least if you follow it on a quarter or yearly basis. It is by nature volatile, and we don't rush acquisition processes.
It's important that you zoom out and take a look and look at the really long-term trends, and that you look also at the total financial impact, not only the number of acquisitions. Having said that, then zooming out and looking at the trends, we have increased the acquisition pace from levels around eight, nine per year up to 15 per year as an average, the last three to five years. If you turn to the financial effects, you can also see here that we've done a bit of a step change, and moved from adding around SEK 100 million per year in additional EBITDA from acquisitions up to a level of SEK 150 million the recent years. Last year was a really strong year, SEK 250 million added EBITDA from acquisitions.
You get these effects both from increasing the number of acquisitions, but also, of course, that we have a higher margin in the companies that we've acquired, as you can see from the slide. Putting all that together and looking then at an EBITA margin bridge over the last five years, you can see then that we increased the margin from around 11.5% up to 14.7% 2021. The biggest portion of the improvement comes from the organic side. Around 2% of the increased margin comes from the organic side. It's equally, approximately equally split between gross margin improvements in our companies, organic gross margin improvements in our companies, and call it then a lower expense ratios or S&A ratios.
Acquisitions contributed with around 1% in this time series, and that comes, of course, as a consequence of the increased number of acquisitions and the higher margin in acquisitions as you saw on the previous slides. As you know, divestments is not part of our strategy. As you also know then, five years ago, approximately, we did a bigger portfolio analysis and we identify a handful of companies that we felt maybe deserved another owner, and we decided to divest them. That has also helped the margin somewhat by half a percentage point during this journey. Currencies is maybe also important to comment. Currencies are volatile, and currencies from time to time also impacts our financials quite a lot.
If you look in the last financial statements, it's a quite big impact. We have quite big impacts on both profit and sales when currency fluctuates. Margin, it doesn't normally impact the margin that much, as you also can see in this time period. Leaving the sort of financial performance over the last 10, 15, or five years and moving a little bit into the financial position and the financing side. In contrast to many other areas, this area, we have actually a centralized approach. In all other areas, we are very much into decentralization, and it's up to each and every company to decide their way forward. When it comes to financing, we have this centralized approach.
This means that Indutrade AB, the parent company, is basically the only company in the group with external financing. Instead our operating companies, our 200 companies plus in the group, they are financed internally by the parent company. We have to manage this. Our main way of managing this is cash pool structures, and we have that in basically all our major countries, Sweden, Norway, Denmark, Finland, U.K., Netherlands, and Germany, our main countries. We have established cash pool structures in these countries. Actually, around 75% of the profits generated in the group are sort of connected to these cash pools. Companies in other geographies, in other countries, we also finance them internally, but it's more through internal loans, I would say.
One of the keys to maintain our business model and the growth strategy we have and continue with the stable inflow of new acquisitions, and also having the possibility to have a relatively generous dividend policy, I would say having a strong underlying cash flow and also maintaining controlled low debt ratios is, of course, crucial. As Bo has talked about, and you know that we have profitable companies, they are stable, and they are also very capital light in general. That's a good foundation for creating this underlying strong cash flow.
If you look at the performance the last five, six years, you can see that as an average we have delivered more than SEK 2 billion per year in operational cash flow as an average over the last five years. If you look at the cash conversion, how much of the profits that has been able to turn them into cash, we have actually a cash conversion over, as an average over these five years, above 100%. Turning from the cash flow side and into the debt side, you can see from the graph that we have stable low debt ratios. Net debt equity, which is our formal or official goal to be below 100%. We are well below on a comfortable level below that.
If you look at the net debt EBITDA, here we have, if you go way longer back, we have maybe an average of around 2x, but we have the last five years been on comfortable levels around 1.5x or even lower than that. Last quarter, we ended at 1.6x. If you exclude earn-out liabilities, we are at 1.4x. Stable low debt ratios. Continuing a little bit then on the financial side and elaborating a little bit more, in addition to the strong cash flow and low debt ratios, we have a long-term partnership with a Swedish bank group, which is sort of a very good foundation for the financing also going forward.
With this group, we have a guaranteed credit facility, totally unused of SEK 3.5 billion. In addition to this, we have also long relations with Svensk Exportkredit, and we have also recently started up a relationship then with a bigger European bank. Looking at the debt we have now in the parent company, which has basically all the external financing in the group, it's well-balanced, I would say, over the coming five-year period, as you can see from the chart. We have had, since we entered the bond market, I think we have our bond issues have been met with, you know, great good interest from the external credit markets, and we've been offered quite good terms.
We use that market, it has been really favorable for us. The majority of the outstanding debts today are bonds. We continuously, of course, try to develop the financing side and one of the next steps will be to explore the opportunities for sustainability-linked financing. Last but not least here, I think most of you maybe know that, but we also obtained a credit rating beginning of last year. We received then BBB- from S&P, S&P Global, which is an investment grade rating. I think that also confirms our solid, stable track record and the strong financial position that we have. Leaving the financial position and our financing and moving a little bit into the governance side.
Of course, key to our business model, central to that model is the operational decentralization that we have. All companies are independent, and they, the MD of each company have a strong mandate to run the company. We have relatively few central resources on group level and business areas combined; we are maybe around 50 people. Comparing that to the total workforce of around 8,600 employees, less than 1% of the total workforce are in central functions. Despite this, I really believe and think that we have structures and processes to support our companies in a good way and also good capability to monitor and govern the group.
Let's sort of elaborate on that a little bit and start with understanding how many companies do we actually have right now then. Well, we are in the group in our consolidation system around almost 400 legal entities. So that's a lot. And it's around 300, 299 to be more precise, that has external orders of these legal entities. But I would say that the more relevant number is independent operational company groups. And here company groups that have then an appointed MD and management team with the full responsibility to run the company. And these type of groups we have 196 as per end of September.
If you look to the graph to your right, you can see the breakdown by business area and Industrial Components. Business Area Industrial Components is actually the business area with the most companies, closely followed by Flow and Benelux. Then elaborating a little bit on how we work with governance in these 200 companies. These, I would say, are the cornerstones. Company boards. Company boards is the formal way in which we interact with our companies, and they are, of course, crucial. The company boards are appointed by the business area, and the compositions are adapted to what the company needs, and that could vary a lot, of course.
Normally, the composition is mainly internal people from the business area or outside the business area, but sometimes we feel also the need for external people, and then we add that. The main task of the board is to support the MD in the company, but also, of course, to challenge the MD and approve the direction going forward. We have a common framework on how we work with boards established in some years now. Here we stipulate, for instance, that we should at least have three mandatory meetings per year. We have standard agendas, we have checklists around certain things, and also a clear sort of division of responsibility, who does what.
Very much connected to the board is, of course, the business area and the business unit structures. All companies have a home in a business area, in a business unit, so they are connected in very much, of course. As I said, the business areas also appoint the board. But I will elaborate a little bit more on the next slide on the business unit structures because that's new and central going forward. Performance measurement, of course, very important when we talk about governance. Here we have a common financial reporting system, and we all our companies report on a monthly basis, full P&L, balance sheet, statistics. So we have a good control of the financial development every month. We have also, since some years back now, a common ESG reporting.
That is also under good control, I would say. This follow-up or this reporting then ends up in a standardized follow-up structure with standardized P&Ls, balance sheets and scorecards. It's easy to get a sort of a good feeling on where the group is heading and where we have companies in need of more support, for instance. A very long and important tradition we have with the financial benchmarking in the group. It's a competition where companies compete in financial development. It's important and sensitive competition where all companies, I hope they will testify when you talk to them during the break here. That's really important to be on the top of that list rather than the bottom.
It's very interesting when Bo announces the leaders in every quarter. As a side note, we've also introduced benchmarking rewards in the sustainability side last year, which is also important to sort of complement the financial view. Last but not least in that area, incentives. Here we also have a long tradition, important tradition to link incentives to profit improvements in the group, and that's a strong tradition. That we will keep also going forward. As we do with many things, we refine things and improve it slightly. We will gradually now also try to include other components, that organic growth, capital, and potentially also ESG in these things going forward. Portfolio model, yes.
We have also then established in some years now a common portfolio thinking around governance of our companies. Why do we have that? Well, of course, a highly profitable growth-oriented company doesn't necessarily need the same thing as a company with lower profitability in an environment with low demand. They most probably need different focus areas and different type of support. That's why it's different to adapt our coaching, our support. That we have done, and we have a common model around that. It's a good tool for us in different types of decision regarding resource and capital allocations. That's also critical cornerstones in our total governance agenda. As I said, let's dive into the BU structures as my last slide.
We have now this type of business unit structure basically in all business areas, and it's a substructure, you could say, to the business areas. We do this by promoting senior experienced MDs to share sister company boards. We create a cluster around these senior MDs, and by that I'm building a business unit structure around these senior MDs. The overall target or objective with doing this is of course then to maintain a good governance when the business and group grows. The capability or the scalability aspect, as Bo talked about. It's also of course to free up management time for working with business development and acquisitions. It also generates a good career path for MDs.
You can, when you have worked several years with your own company and developed a stable good management team, you can move on to other things and you can allow people in your organization to move on as well. It, as I said, frees up the time for the BA manager, and it actually also increases knowledge sharing because companies come closer together in smaller groups. In the end, then it creates actually then a scalable organization. This is crucial sort of component on our scalability journey going forward. Today, we are 34 BU leaders in the organization, so that's already an established way of setting up our business. That's it.
Thank you very much. Hello now. Thank you very much, Patrik. Do we have any questions from the audience? We have one question here. We have a microphone.
Thank you. Am I audible? Yes?
Yep.
This is a question maybe both for Patrik and for Bo. Assuming that you reach your target of improving your organic growth, your cash flow will be better than historically post-acquisition, so to say. It would be interesting to hear a bit of discussion around what you will allocate that cash flow to.
Of course, you are right, and we hope that cash flow will continue to be good. That only again, that's a sort of a positive sort of challenge if we get to that. We think there are a lot of needs both in the companies but also on the acquisition agenda. We don't have sort of a clearly defined how we'll use it, but I don't think it's a negative issue. It's more of a call it a higher flexibility going forward. I don't know if you want to elaborate, Bo.
No, I think that's what we can say for the moment.
Yeah.
Okay. We need to go to the next presentation now. Thank you very much, Patrik. Welcome up on stage, Desiré Haglund, our head of sustainability.
Thank you. Great to see you all. Desiré Haglund is my name, Head of Sustainability since a little bit more than a year now at Indutrade, and I'm gonna elaborate a little more now on our acceleration, as Bo mentioned, regarding sustainability, so our focus areas and priorities going forward here. I would like to start by talking a little bit about our view of sustainability in a decentralized organization. We really think that our Indutrade companies, that they benefit from being part of a group rather than a stand-alone company of the same size, and that's one reason for that is, of course, that we provide a lot of support in different areas, and sustainability being one of them. We provide support regarding this.
For example, we have a group-wide code of conduct that the companies implement in their business, both an internal code of conduct, but also one for business partners that they can use. We also provide support for materiality analysis so that all companies can analyze and work with their specific material topics that is relevant to their company context and creates value for their business. Also trainings on different, sustainability topics, and tools to use. For example, tool for supplier follow-up and also a tool for climate management, a climate guide, and I will talk a little bit more about that just in a bit. A lot of support for the companies, and it's very much appreciated by the companies. They use this a lot.
Of course, they don't have to invent the wheel all by themselves, so that's a good thing. We also have a network, a sustainability network that is voluntary to participate in in the group. Now we are around 100 participants there. We have approximately monthly meetings on different sustainability topics, sharing knowledge sharing, working with that, and also spreading good company cases and good examples of how different companies work on different topics. A lot of knowledge sharing and support for the companies here. As I mentioned, we want the companies to do their own materiality analysis so that they find their specific focus areas and topics that are relevant to their specific context when it comes to sustainability.
We think that is very important to address the relevant impact and relevant opportunities and so on when it comes to sustainability. We also have a group-wide strategic framework to make sure that we make progress on different important areas. This is an overview of this framework. It was developed some years ago with input from stakeholders and also analysis of impact, of course. It's also now recently updated since a lot of things are happening in the sustainability area, new demands and so on coming. We have updated some KPIs and so on, and I'll show you that more in a bit. Overall, we can say we have three overall focus areas.
We have people, where we aim as an overall goal for 100% engaged people. We have environment, where we aim to be CO2 neutral for Scope One and Two. We have the products and customers area, where the ambition is that 100% of our Indutrade companies should contribute to sustainable customer value. Here we focus a lot on the products and the offerings that they should help the customers reduce emissions and improve environmental performance. That's the overall picture. We of course have material topics, related KPIs and targets that we follow up on to make sure that we move in the right direction, and step by step move towards the overall goal that we have.
Also the blue highlights here, that's things that we put a little extra focus on now going forward. For example, diversity, trying to increase the percentage of women at all levels in the organization. We also focus a lot on, as Bo also mentioned, decarbonization, reducing our emissions from our operations and also helping our customers reduce their emissions through our products and so on. I will come back to more about that just in a bit. We also see great business opportunities, of course, relating to all these three focus areas. Some examples of what we follow up. All companies provide data to us via a platform so that we get good numbers from all the companies, and I will show you some of them.
You can read more about them in our annual report, if you want more details, and also look at more of the KPIs because I'll just show you some of them here. I will start with the code of conduct. This graph shows the implementation of the code of conduct that we have, this group-wide code of conduct. We're aiming, of course, for 100% implementation here. In 2021, 97% of our companies had implemented the code of conduct in their business. This is, of course, the foundation for responsible business conduct, so this is really important, and we provide training in different languages on the Indutrade portal for the companies to use for this implementation.
Of course, the ongoing dialogue is the most important, regarding these topics, and we try that in many different ways. We also have an external code of conduct that I mentioned, and, regarding that implementation, it's on 74%. 74% of the companies have implemented the external code of conduct in relationship to business partners. Some people-oriented KPIs, if we start within this first focus area, the people focus area that we have, I'll show you some examples. One being percentage of companies that measure employee satisfaction and engagement. This we think is, of course, really important. It's a very good way of knowing how you perform and how the people are doing in your business. Here we aim for 100%. We think every company should do this.
We are at 64% right now, so we need to increase this more. We know during this year, quite a lot has happened. Many companies are starting to measure employee engagement. What we demand from the companies here is that they find a relevant way of measuring that is relevant to their specific context. We know that many companies do pulse surveys so that they get updated figures on engagement levels and can act on improvements on a regular basis, which we think, of course, is very good. Another KPI is injury frequency rate. Here we follow up on injuries resulting in absence from work in relation to 200,000 worked hours.
We saw a very good improvement between 2020 and 2021, but of course we aim for continuous improvements here every year. We don't want these kinds of injuries, of course. Just some examples of KPIs on the people side, and now we will move on to the environmental focus area. As I mentioned, we have the overall ambitious target to be CO2 neutral for Scope One and Two by 2030. We also have a target to reach absolute CO2 reduction by 20% by 2025. We have ambitious targets, but as we can see here, we need to increase the reduction pace. We really put a lot of effort now into accelerating our reductions here, just as also Bo mentioned.
We think this is really business critical going forward to reduce this footprint that we have. Some examples of what we follow up, and I will also come back to more about what we do to accelerate, is we follow up on share of renewable energy, and that includes then all energy in Scope One and Two. There we are in 2021 at 29%, but we're aiming for 50% here. We want to increase this much further. Then we also saw that we needed to add some new follow-up here to make sure that we do good progress and really accelerate.
One new KPI that we have added for this year is that we've now follow up on percentage of companies that have analyzed their CO2 emissions and from that initiated measures for their high emission sources. Everyone doing their own analysis to be able to find what is relevant, where do we put our focus to reduce our specific emissions, as efficiently as possible. This, of course, we want to be 100% so that all companies work in a structured way with this so that we can efficiently reduce, our emissions together. I mentioned we also want, apart from or alongside working with the group-wide KPIs that all the companies contribute to, we want the companies to also have their own sustainability focus and prioritize topics.
There we also follow up on the percentage of companies that have their own KPIs relating to resource efficiency in different kinds. Also here we aim for 100%. Some example on the environmental side on what we follow up, and now since we are accelerating and really asking more from the companies to do these kinds of climate analysis, climate mapping, climate road mapping going forward, we also know that's not always so easy for a small company to do this kind of kind of analysis. We try to provide a lot of support in this area. Then we have just launched these climate guides for our companies to use.
Some Indutrade companies have also been involved in developing them, so that they should be as relevant as possible, and we have put a lot of effort into making them very concrete, with very concrete examples of actions that you can take to reduce emissions for each step of the value chain. Not only for Scope One and Two that we have measured now for a couple of years, but also for the Scope Three, for the whole value chain, because that's also what we think will create a lot of business benefits going forward, working with climate from a broad perspective, understanding the value chain approach. This is launched for the companies to use, and we will also launch a training to help increase knowledge and engagement further on this important topic, going forward.
We also, of course, use the sustainability network that we have to talk about climate impact. We've had a number of network meetings with this topic during the year. Yes. Our last focus area, the products and customers focus area. Here we of course see there are great business opportunities to work and help our customers reduce their environmental impact. We see that demand for this increases very rapidly. Here we also saw that we needed to add some new follow-up, some new KPIs to follow over time. You can see some of them here. Now for this year, we start asking the companies how big a percentage that have calculated a CO2 footprint of their products and use that in their sales offers.
We know that some companies are doing this already, but we hope, of course, to increase this. We think this will really be good business going forward to be able to display this kind of CO2 footprint on the products. We'll also start now following up on percentage of net sales deriving from product offerings launched during the last five years. This is, of course, to measure the pace of innovation, how fast we innovate and come out with new products. In relation to that, we have also this last KPI there, percentage of companies that have a documented ambition target to improve resource efficiency when developing the product service range, so that we make sure that sustainability is included in the innovation process in a good way.
What we have measured for some years is the percentage of companies that measure customer satisfaction. In the same way here, we ask for the companies to do this in a relevant way that is good for their specific context. Here we aim for 100%. Now we are at 66%. Here, what we emphasize very much going forward is also that in this customer service or customer satisfaction service, that also questions about sustainability are included, because that can really bring a good dialogue, and you can learn a lot about what customers want in the future. That can really help also for the innovation process going forward. Sustainable products and products providing sustainable value, we think that is crucial going forward. We put a lot of emphasis on this.
We focus a lot on this topic, but we already today, of course, have many good examples in the group. These are just some of these examples. Could have many more on this slide. ETP Transmission one good example, they won our first sustainability award that we had this year in the category environment for a very structured work to reduce environmental impact throughout the value chain. They are looking at the possibility to buy green steel, sustainable steel for their products. Advance Welding is another good example. They have a battery-powered electrofusion welding machine, which really dramatically reduce emissions from welding compared to welding machine run on fossil fuels. It's a very good thing compared to the other alternatives. It's very silent.
It's also from a social and work environmental perspective, a very good thing. Labkotec providing wind turbine ice detection systems. With this system detecting ice on the wind turbines, you can really increase the yield in electricity production quite a lot, and also improve lifetime of critical components. Safety is one part when reducing ice on the wind turbine. Sustainability from many dimensions through that product. We have ALH Systems providing a very unique horizontal drilling that allows drilling to be undertaken without disruption of the gas supply, which is of course very good. It also allows a smaller impact in the street, so impacting traffic also much less. Colly Filtreringsteknik, another good example with a very efficient filter.
Efficient from both environmental perspective and also work environmental perspective, and also calculating quite a lot on the how it is efficient compared to other filters and really using this in marketing and so on. Some very good examples, but of course, there are many more, and we aim to increase this also, of course, even further going forward. Just summarizing a little bit on the accelerated decarbonization approach that then covers both the environmental focus area and the products and customers focus area that we have. Like Bo mentioned, now we really accelerate. We really need to step up here to reach our ambitious targets that we have.
As Bo mentioned, we put a special focus on the biggest emitters that we have in the group, so they have an extra responsibility to make the climate roadmap and reduce efficiently where they can. Also then these guides and trainings that we provide for the companies so that it should be hopefully quite easy for everyone to get started here and really find relevant reductions to do. Also the increased follow-up, new quick KPIs and so on to make sure that we're on the right track and that this is implemented in a good way. We also try to find and encourage investments that efficiently reduce emissions, and then also the product focus. Apart from this accelerating towards our existing targets, we also now want to raise our ambitions even further.
A lot is happening around the climate topic, and we see we also want to raise our ambitions going forward. One thing is that with now in this year's reporting that is going on right now, we have added some categories in Scope Three to the reporting. Understanding more of our impact from a value chain perspective, which we think will be very interesting to learn more about this, to be able to work with improvements in an even better way going forward. Also, as was mentioned here, also analyzing our climate risks. Climate has really turned into something that you need to know how this impacts us as a business now.
We are in the process of analyzing this to be able to set in relevant actions, of course, regarding that. We are right now in the process of sending in the papers to signing the Science Based Targets initiative, to committing to the Science Based Targets initiative, and we think that will be a very strong and important statement going forward, and that will also, we hope, fuel our acceleration process. Yes. I would just like to end with this slide to say that we think that we have a strong model also when it comes to sustainability, that this combination of decentralization, where all companies focus and work with their specific material topics, their specific impacts, specific possibilities, but also in combination with this group-wide priorities and support from the group.
We think that is a very good combination and very strong in driving sustainability going forward. Yes. By that, I will end my presentation. Do we have time for a question?
Thank you. No, unfortunately not.
No?
We will now have a short break. We will also shorten the break. Let's have a 10-minute break. There is coffee in the back and Swedish fika, and we will meet here again at 2:50 P.M. then. Thank you. OK, everyone. Welcome back. That was a short break, maybe the definition of a short break. I hope that you are ready for this next presentation session. We will start by listening to Per-Olow Jansson, who is the business a rea manager for Flow Technology, and he will talk more about his journey in Indutrade and more about the business area, of course.
We will then hear Anders Edenhammar, who is the former MD of our subsidiary Easy-Laser, and has now moved over to a more strategic role as a business unit leader for the business area measurement and sensor technology, and also a business development manager role. He will talk more about that. We have Karl-Johan Öhman, who is the MD of MedTech company Rubin Medical, really a true technical trading success story. The final presentation will be held by Jonas Halvord, who is the SVP acquisitions and business development, and he will talk more about our acquisition strategy going forward. As I mentioned before, we will also have a longer Q&A and a summary of the day. With that, I welcome Per-Olow Jansson.
Thank you very much, Mårten. My name is P.O. Jansson, and I'm the business area manager for Flow Technology. I will talk about my journey in Indutrade, and I will talk about the business area itself, and I will talk a little bit about how we see the future and the direction we are going. I go back to 1987. I started in a small company, a small family-owned company with only SEK 5 million in turnover. It was a really family-owned business. I was not a shareholder, and it was an exciting time in this small company. Every year, we were doubling up the turnover, which of course became a little bit more difficult along the years.
In 1995, almost this time of the year, I was receiving a telephone call from the owner, and he said he has sold the company to some Indutrade. Never heard the name. Of course, I started to think, what opportunities do I have? It doesn't sound as normal. However, I stayed on, and it was a great time. It give a new impact to the company when I was out presenting the company for the global large industry we have. Instead of having a private owner, it was owned by a large group, and it gives more, say, safety for the customer. It was also exciting from a personal journey. Already in beginning of 1997, I was asked if I could take the role as the MD for the company. Of course, I was accepting.
It was very exciting. At that time, we have so many ideas and there was so many possibilities, and we turn into strategies and we executed them, and we set up office in Gothenburg, in Stockholm, in Gävle, and we were growing our small subsidiary in Norway, and we were establishing the company in Denmark as well. It was an exciting journey, and we kept the family feeling in the company over the years, and that was a lot down to the decentralized organization. No one has an impact on what we were doing. 2007, I have identified a company in U.K. called IPS. It was a very similar company to the business I was running. Same type of products, a little bit larger with some 50 people, and we acquired the company.
That was actually the starting point for Indutrade in the U.K. Then a lot of acquisitions have followed. In 2017, we acquired a company up in Norway called Pro-Flex, dealing with hoses for hydraulics and water and chemicals. To talk a little bit about GPA, which I have been more or less growing up with, it's a technical trading company. It has gone from, say, pure-product supplier to system provider. The products here are plastic valves and fittings, and it's used for transporting water and hazardous chemicals. The business itself started only with some few valves and some fittings. Over the year, we were growing the business. We were integrating backwards and forward in the system, adding more products. We were also widening up for more type of material, more and more.
That became GPA as the leading provider of products and solutions. Not only about that, we also added a lot more to make it easy for the customer. We started up with education, how to train the customer to do good installation, good design, and do right from the first time. We gave them certified welding trainings, and we also developed a lot into the software of how to design a proper pipe system or using BIM CAD symbols, small CAD symbols with a lot of metadata in, which makes also the specifier's work a lot more easy. The people we trained a lot, they should be the best in knowing about the products, knowing about the competitor's product, but also knowing about the customer's application and how our product could benefit in the customer's process. The segments we are in is, of course, industry.
It's the largest part, and here we go from water treatment in a public pool up to water treatment plants in very large, tough environmental, the chemical industry. We also goes into normal chemical production. We are in the life science sector with high purity pipe systems. We are in the infrastructure of pipe and fittings for sewage water and for portable water. In the commercial side with oil and grease separators and system who is protecting when there is some flooding to not fill the basement in the houses. It has been a nice journey to be in the company, but figure-wise as well, it has been a very nice journey.
Coming in the end of 1995 on SEK 35 million, and almost every year, we have been exceeding the turnover and the EBITDA with this systematic culture we have in the company. Last year, the company turned 180 million with 18% in EBITDA. This is down to a couple of initiatives. First of all, it's about creating a winning team, to have the right people, motivated people, have a good communication, involve the people, and create this positive spiral in the company. All of this is available within the Indutrade culture. We also actively grow the company. It was not by a coincidence. We grow the company by doing plans. How can we add more products into the system? What is the customer demanding?
Every 12-18 months, we were adding new products, going into new segments or adding new suppliers. That was the active growth of the company. We were also creating a strong brand. We constantly use the GPA brand. We don't talk about our suppliers name or the product brands. We charged the company name we had with a lot of added value for the customer. Yes, high-quality products is key. Good relation with the customer and suppliers is also important. Most is to have this clear goal. The clear goal here was to make every day easy for the customer, or as we say, remove all headache and all problems for the customer. 20 years of continuously building the brand is important, and that gives also a payoff long term.
Brands contribute to profitable, sustainable growth and also inspire and encourage entrepreneurship and develop strong relations with customers and suppliers. From July 1st, I am the business area manager. The step here from being the business unit leader, growing the small company from SEK 35 million to SEK 180 million, adding a couple of acquisitions to a business unit group which in 2021 has a turnover of SEK 700 million and SEK 110 million EBITDA. The next step to be the business area manager is more of the same in one way, but in a larger scale, of course. It's increased responsibility, but I'm really happy that I have so many years within Indutrade, so many years experience of being a managing director and as well a business unit leader.
It's about scaling up, having good ideas, execute plans, inspire and motivate people. We do acquisitions, we continuously look for targets. As the business area manager, I have to be also involved in the management group of Indutrade. Indutrade, as we have been talking about today, has a decentralized model, but all individual companies in Indutrade and in Flow has their own DNA. It's so important. They use their own communication, their own platform, and through that they communicate with customers and suppliers. Although we did a branding of the Flow technology business area, we have to create this brand awareness to reinforce what's important now, and we in the business area is aware about. Grow with flow, that's our promise to employees, to customers, to partners, to companies that join business area.
It's continuous sustainable growth, means staying ahead of the competitors and being seen as a healthy and attractive company. Today, in Indutrade Flow, we had a fantastic year, 2020. We came into 2021. We talked about here earlier, there was or is some supply issues, long delivery time, there was a continuous price increases, but we managed to do 2021 as all-time high year. These issues has continued in 2022, but after quarter three, we are ahead of 2021 again. Last year, we did SEK 4.3 billion in the business area, and we are 30+ companies, and we produce an EBIT of 15.5%. As you can see, we had a growth here in the net sales of 5.6%, and we have an order received of almost 16%.
That clearly shows that we were building up a backlog because of the long delivery times. It also proved that the model we have with a decentralized system made that every company could really handle the situation in the very best way, finding alternative suppliers or talking with a customer, keeping up the communication. That works very well. The Flow business area contributes to Indutrade in net sales about 20% and in EBIT around 21%. We are strong in the Nordic countries. We are largest in Sweden, followed by U.K., and then Norway, and Denmark, etc. Business-wise, we are represented in Germany, in Ireland, in the U.K. There is a huge variety of products. It's from component sale to systems to larger units. If we break it down to components, the valve business is the largest.
It stands for almost 40%, and then followed by pipe systems in different materials. 30+ companies within the group. We are divided in trading companies, which is most of them, and we have manufacturing companies with their own brands, which is about 10 companies. That's also spread in the size from a small company around SEK 40 million up to ESI Group of SEK 550 million. Same on manufacturing. Euroflon is a small company doing hose assemblies, and GEFA is a large German producer of metal valves. With these companies, we can transport media, we can store it, we can analyze, we can measure, and we are dealing with liquids, gases, and powder. I also say companies within Indutrade Group having the best of two worlds. The first world is the entrepreneurial, the small world where the companies are.
A good idea coming up in the morning around the coffee. It's talking through during the day and after lunch. It's decided and executed. That's the beauty of the entrepreneurial individual companies. On the other hand, we have Indutrade listed on the stock exchange, good or, say, good organized, good ideas, and then good structure, and we work through the board and having an impact on the companies we see here. We also have high-skilled people. All these companies are working actively out to customers. They work on specifiers to be sure that their products are in the drawing and in the documentation. I will dig a little bit into some areas which is interesting. The Medtech/Pharma/Biotech area is a growing segment for us. 2017, this area was contributing by 6%, and last year, 23%. It's a strong area.
These companies here is some of companies who are into this segment, not only, but it's an important part for them. We are supplying a lot of products. We supply a lot of different pipe systems. We do stainless steel, which is polished to medical grade. We do copper pipes, which are cleaned for medical gases, and we do plastic pipes with a high purity for pharmaceutical use. Valves, pumps, filters, sampling system, and we do single-use production. Single-use is quite new, and we have it in the small exhibition here. 2017 in business area Flow, we had SEK 60 million in turnover, and year to date, we are at SEK 367 million. It's a good growth. These products are used in biotech pharmaceutical use. Here we have a small taste of products we are supplying, and this is the single-use production.
Here we supply tubes, fittings, valves, pumps, bottles, baskets, but we also produce assemblies according to customer's drawing. The customer give us drawings, and we can assemble a unit, we can pack it as a kit, and we sterilize it. It comes out to site at a pharmaceutical production where they have batch production. They produce a batch of pharmaceuticals, remove the hoses, that's the disposables, and take the new package, put it up, and it's very cost effective. That's a trend we think is just growing for the moment. Here we have from CPX Precision U.K. producing clean gas. We have purified water unit from UK Gas, and the picture up to the right is a pharmaceutical high purity system in plastic material.
Another very exciting, fairly new segment for us is the green tech area, and that's a wide description, of course. We have many companies who look into that. Some of these companies have groups in the company which they call innovation groups. They really try to find out which area is moving and where can we be, because this is new, exciting segments. We are there with pipe system, with valves, with pump and filters, but also with additives, skids, and gas recycling units. It's exciting, this type of application, because in many times it's new area, not only for us, but also for our customers. They really need our help with this to picking the right product. Here we talk about chemicals or abrasive material or sticky material. It's really needs qualified salespeople, which we have in our team.
Applications, we talk about tree- to- textile. It's a cellulosic fiber to textile. Battery cells manufacturing and recycling, we are at customers like Northvolt or Britishvolt. Energy storage with liquid salt. You can imagine 500-degree liquid salt, corrosive and hot. District heating, we have company acti-Chem, who is adding additives to the district heating for having a perfect water, which will not corrode the pipelines, and it will also having a positive impact on the energy consumption for the pumps. We are in the biomass, the green hydrogen, and into solar panels. The solar panel is an interesting business for the moment. We have a small energy crisis, and everyone like to have solar panels. When we have production of solar panels, we use a lot of argon gas. This gas, it just disappears. The producers continuously have to buy new gas.
With the Argonø produced at UK Gas in England, that one collect the gas, and you recycle more than 95% of the gas. The payoff time of that unit is phenomenal. We have huge actors producing solar panels for the moment. This picture is from a water treatment plant. We have purified water up there, and then we have units for a sticky material in Teflon that should be clean and withstand a lot of corrosive media. Where are we going? Our plan. Of course, we like to grow as a business area. We are focused on the acquisition side. We will do more of what we are good at. We will find companies to acquire in segments where we already are established, maybe in new areas.
We also look into new specific areas, for example, MedTech, with a high content of technical knowledge. Focus markets is, as I said, Nordic countries where we are, but we also will do more in Germany. We hope we can find some good applications, acquisitions in Italy. Organic growth, we have a lot of initiatives in place. We have done an analysis work in the companies. We have clear plans for the growth and that's high up in the target. From a BA perspective, we are completing our BA team with functions that will support the individual companies. So from here we have, from this year, a person who is, say, developing the business, doing acquisitions. We have a people development manager, so we will have the best team.
We are all the time looking for training for business unit leaders, managing directors, having the best sales managers or having the best purchasing managers. We will, of course, look into some sustainability person as well. This is to support and not to interact with the companies. The company itself, some companies have a size that they can manage it by themselves, but the small ones need sometimes a little bit more support. Hopefully, we also can use sustainability as a business driver in our business area. Having said this, I hope we can reach a nice target we have set up for 2026, and that we can create a good place for the companies in BA Flow. Thank you for listening.
Thank you very much, Per-Olow. Let's move directly to Anders Edenhammar. Welcome up on stage.
Thank you, Mårten. I'm honored to be here today, invited. My name is Anders Edenhammar. I'm the business unit leader and business development manager in one of the business areas, which is MST in Indutrade. What I'm going to talk about today is how to be a managing director in one of the companies in Indutrade, working with operational leadership, organic growth, moving over to a more strategic leadership and business development on the group level using my skills and experience. To start with, my background, I'm a production engineer as a background and but sales and business development, that's my key thing. I've been working with sales my whole life, mostly related to process and manufacturing industry, and a lot of years in Easy-Laser AB, which we're gonna talk about a little bit later on.
I've been there 21 years. Not taking over from you, P.O., 20-whatever it is, many years. I was sales manager for Easy-Laser, and then Indutrade acquired us, and then I became the managing director. That was actually a key twist for me and myself because I was a little bit of maybe leaving the company in that stage. That gave me a challenge to continue work and doing that in a managing director role, which I don't regret at all. Good journey. When I entered the company, it was turnover about SEK 22 million. Now we are close to SEK 200 million. I was employee number 16 in the company. Now we are 75 employees. Coming back to that a little later on. I had an opportunity to start also a business unit together with my managing director role.
Today it contains of four companies, we will come in and dig into that a little bit later on. At the same time, also being board member in a lot of companies, I think it is approximately 10 companies, which gives me, as a managing director, a good way to share knowledge both ways, actually, both for me and from the company that I'm in the board with. I've also been interim MD during transition time for new MDs and so on. Since January, I moved in to work with business development into the MST group. My head goal there is to find new potential companies in a proactive way into the group level, but also work with strategy and business development into the other companies into the group.
Okay, let's dig into a little bit of where I have spent most of my working life in, into Easy-Laser. What is Easy-Laser doing? They are a manufacturer of laser-based measurement and sensor and alignment systems. We have in the exhibition products that we can dig into a little bit. Basically, we're using a laser light, a detector, and a reading device, calculating the result, for a measurement. What we're doing is we measure mostly rotating equipment or basement for rotating equipment to see how the condition of the machine is, to avoid wear and tear, vibration, and costly downtime for the industry. The headquarters is based in Mölndal, outside Gothenburg in Sweden, with 75 employees covering most of the disciplines.
It's a rather complex company. About 30% is related to R&D, another 25% to sales and marketing, 30% approximately to supply chain, assembly, testing, and then the rest is finance, admin, and management. Our customers, they are mostly in the process and manufacturing industry. We also have other segments like wind power, wind turbine market, marine business for ships and so on, and many more. The majority is still in the process and manufacturing industry. It's a global sales. We work with sales partners and distributors covering more than 50 countries and areas around the world. Also, we have a separate segment we call Global Account, and that was to establish another leg to reach out to the markets.
We felt that the distributors could not cover all the market segments. There we have, for example, in the wind turbine business, a good relation to Vestas, where we are preferred supplier. There we have tailor-made the system for them, so they are selling that globally, internally in their organization. For the machine tool business, we have a cooperation with a U.K.-based company called Renishaw, and they are doing calibration systems for the machine tool business. There we do a branded system with that they sell internally in their organization globally, which means that we add on business, which is not disturbing the distributors. We have a market share today about 33%. We are the market leader. That is really hard works.
You can ask yourself, how can we be a market leader, Easy-Laser, a midsize company, and owning the whole global market? For me, it's focus, and focus. It's focus on the core business, focus on the core technology, and focus on the core values. Of course, there is more markets out there. There's a lot of virgin markets. We have seen that due to how we have been focusing so much, and that's what we do. We go into different kind of focus segments every year, every month to be professional. We have during six to seven years, we climbed from being number three to being number one. I will dig into that a little bit later on in the strategy.
Okay, we are talking about sustainable, profitable growth here, and that's what we have done during the years. We've increased margin over the years. In five years, we have doubled the turnover more or less, and it's I will promise you it's more to come. We have another five years of approximately double turnover in our strategy. The base of that, we come back to what all of us have been talking about, and it's people and organization and culture. Without that, it's almost impossible to do this kind of pace in organic growth. This is pure organic growth. Nothing else, nothing added in whatever. All honor to technology and products, but without the people, it won't go in this pace.
It's a hard strategy work to do this, and you need to commit the whole way out in the organization. You need to have all the functions with you. You have to have commitments in your management team, in the different departments to find the goals and break it down to smaller goals. Otherwise, it will stop somewhere. Of course, there will be some timing in certain things, timing in sales, timing in launching a new product. I'm not a believer of luck. For me, luck comes from hard work. This is hard work. You have timing on the way, and we had good timing. Of course, then Indutrade backing us up with having focus but be decentralized, giving us opportunities and possibilities to develop our companies, owning our own plan, doing investments, and so on, which is really, really needed here.
What's behind a successful strategy execution for Easy-Laser? I'm convinced that everyone in here can write down a strategy plan. It's easy, actually, to fulfill 100 pages of a lot of word, good words. To execute from that plan, giving KPIs, doing goals, and so on, that's the hard thing. What we did was we challenged ourselves. When we were number three, we were heading up to be number two, then we dared to say that we want to be number one in the market. That's not easy to do, actually. It's easy to say. Especially when you want to have all the people with you, the organization, to understand that this is doable, this is possible. Which means we need to change. Change is hard for people.
We have always done this way and this procedure. Someone told me once that the definition of madness is to do the same but expect a different result. It doesn't match. We needed to change and having worked hard with the people with us, then you can have an execution. Next part is to be number one. You also need to be the technology leader. We were at a good level but not good enough, so we needed to pace up even on the R&D part to work more with an active product plan, combine that with innovation. Innovation also a word that you can easily say but not do. You need to commit time for that.
Doing that together with our customers and our distributors, we created a product council that we invited our customers, so then we had all the stakeholders into that project, and then we could finalize and do exactly the right thing that the market really needed. Still the best product on the market after, what is it, six years now since the first launch. Of course, next step is sales focus. We're working through sales partners and distributors. We needed to challenge the distributors and the sales partners. That's one part to gain market shares. We changed in one of the biggest markets, which is in the American market, in U.S.
We took over the former market leader's distributor on the U.S. market, which is the biggest alignment market in the world, and together we took a lot of market shares. Then, of course, we needed to add on something new. That's also something that you need to do. We are not the ones adding new products all the time or building up a huge product catalog. We have our core technology. But there is a lot of new market segments out there still not really convinced yet that they really need this, the alignment systems. We defined that the machine tool market, there was a hole, a gap. Old tradition, not trying to add in new technology, well, very old-fashioned.
We found a partner in Renishaw in U.K. that branded an existing system, and they were then selling this into the market in a really successful way, and this is really growing. Of course, it was also market growth, especially in the windmill market, that helped us. The last leg here, of course, not the least one, supply chain. When you try to grow a company during five years, double the turnover, and we have full production line, assembly line, you need to follow here also with the material, with assembly capacity, but of course, also on quality to keep the quality level. That was really demanding. This was a strategy built on people, commitment, and around the culture.
Leaving the Easy-Laser part, I was also three years ago starting the business unit Instrument Solutions, which contains of the four companies right now. Easy-Laser, we have talked about. We have Adam Equipment, U.K.-based company doing weighing scales and balances. We have NTi Audio doing acoustics and sound level measurements based in Liechtenstein, acquired in January this year. Then we have AVA Monitoring based in Gothenburg doing vibration measurement for infrastructure projects. This group is about SEK 500 million in turnover now. I'm leading them through the board, of course, as the chairman.
We have, as Patrik said, three standard board meetings per year, but what we normally do here is that we add an extra workshop or meeting depending on if it is a strategic issue, if it is operational task or some other, could be an R&D project. Then we have business reviews every month and then work like an ad hoc benchmarking support to the MDs, using influencing skills. That's done every week. It's going from operational to strategic focus, leading the MDs towards a strategic goal, using the Indutrade's values and so on, and then we have knowledge sharing in the group.
To my new role now, since 1st of January, I work as a business development manager directly under MST. I left my MD role at Easy-Laser over to Mikael Terner, who is here in the audience right now. Mikael was sales manager in the company and was moving up to the MD role, which is also a good recipe of how we are trying to do our work internally. We actually worked out my new role. My base in what I'm going to work with is acquisitions and being proactive in searching for new companies fitting into the MST group.
This is done through, of course, my existing network, working globally for many years in many parts of the world and doing web search, of course, exhibitions, being out on the market. I have to be there trying to convince, talk to entrepreneurs, company owners, and try to see if they are willing to be a part of this wonderful Indutrade family. This is not easy. It takes time. Open up doors. We normally have, and I don't know the exact number, J onas, but how many of our leads are broker leads? It's the majority. Yeah. We will see if we can add on more proactive leads into this. We have a pipeline in the group, approximately 60 leads today, focused on 20, but I'm working right now on five high-priority leads.
At the same time, I work with business development in the group level, assisting and benchmarking the MDs in the group if needed, but also establish forums meetings. We did that a couple of months back. Could be covering sales issues, R&D issues, supply issues. Why I'm still here after 16 years? I love this. This is really nice. The environmental is so good. It feels me comfortable. It feels that I'm developed, and I really are eager into the strategy and the concept. It works really good. The decentralization really works. As an MD or as a business unit leader, you feel that you have that trust. We will be talking about people many times here now. It's still there. It's people.
Feeling that it's actually the people is doing the execution. Without them, we will not do the things that we do today. That Indutrade allow us to be entrepreneurs. Of course, you need to like that, but that's, I think, is a basic thing before you're employed here. That comes also with a responsibility, of course. You have to deliver from that also. The general culture and strategy with the core values gives you appreciation and also that if you really deliver, you perform, you are appreciated, you are highlighted inside the organization, and that's really appreciated. That's what you need. You need to have this sometimes. We have that in Indutrade, really. Generally, for my personal development, it has been a really good trip. I'm still here. I still want to develop myself.
I still want to learn. I'm eager. I'm confident that I will be here for a long time more, even though it's hard to beat Peter Eriksson or P.O. here, but I will try my best. My final picture is from our group meeting. I organized a sales partner meeting a couple of months back, inviting some MDs and sales manager in the group, talking about how to grow through sales distribution in a global way. Thank you so much.
Thank you, Anders. Unfortunately, we don't have any time for questions this time either. I welcome Karl-Johan Öhman up on stage.
Okay, thank you very much. His clients, sorry. That was planned. All right. My name is Karl-Johan Öhman, and I'm MD of Rubin Medical from Malmö, actually. My background is that I studied economy at the University of Lund , and then I spent 10 years working for big pharma companies during the 1990s, that is Pharmacia, Glaxo, etc. After that, I was managing director of several startups during, you know, from 2000 to 2009, when I joined Rubin Medical. I've been on board for a long time. A couple of words about the company. It was founded in 2003, and Rubin Medical was acquired by Indutrade in 2012.
We are 100% focused on diabetes type one. We have a system, as they say in Sweden, by the way, that regulates blood glucose, and I will show that in a little while. In total, we are 60 employees right now, and we're growing rapidly. Head office in Malmö, as I said. The markets we are active on or in is Sweden, which is our biggest markets. It's Denmark, Norway, and Finland, so it's the Nordics. Since 2010, we are certified medical devices, ISO. As suppliers we've had over time, the first supplier between 2004 and up to 2019 was Johnson & Johnson-owned Animas insulin pumps.
From 2015 to 2021, we had a product which was actually a very unique concept, a long-term CGM. CGM is a glucose measurement system. We were the first in the world to launch that actually. We ended that business in 2021 because we wanted to focus on our main business. In 2018, we took on Tandem. I will give you the full story in a while. When I joined the company in 2009, it was already growing. It was doing fine. Entrepreneurial, disorganized, and so on, we wanted to make sure that we sort of wrote the statement, who are we? What are our vision? What do we wanna be? This is it.
We aim to give everyone with diabetes an easier and safer everyday life. That's what we live for. That's what we breathe every day. With heart and professionalism, we create safety for our users, et cetera, and the other families and healthcare staff. This is really important because our products are really doing good for the users and the families. A couple of words to explain what is diabetes type one. I think that's important for the next steps. Diabetes type one is a life-threatening disease. The body's beta cells cannot produce insulin. Insulin is a hormone that regulates glucose. Why is this? They believe that it's due to an autoimmune response that destroys the beta cells.
To treat this, you need to administer insulin, and there are different ways to do this. If you look in the middle of the picture, insulin delivery, if we start there, you can do that by insulin pen. That's the most common. 70% of all patients are using that. You can use a more simple patch pump. It's a disposable, works for three days. The next step is the durable insulin pump, and that is what we are working with. A durable pump works for four years, and there is a warranty on this, et cetera. There are several competitors in this space. We lead with Tandem, and then there is Medtronic, which happens to be the biggest medical device company in the world. There's Roche and Insulet.
On the glucose measuring side to the left, the sort of classic way to handle this is to make a finger stick and get out some blood, and then you measure directly. You get one value exactly here and now, but you don't know if the blood glucose value is going up or going down. That's the downside of this. Next development was Abbott's Flash Glucose. Fantastic improvement. You can swipe, take your phone and swipe over the device and get the value anytime you like, as often as you like. The best system, that is the CGM, which is Continuous Glucose Monitoring. Like Dexcom, which we carry, which is the best on the market, and there are some competitors as well from Medtronic and so on.
If you combine CGM and the durable pump and with an algorithm, and our algorithm is called Control-IQ, that's the best in the market I can say, you get a hybrid closed loop, and that system regulates, so you keep as even glucose level over time as possible. The pump looks like this. It's small, you can carry it with you, and that's really the idea. This is the sensor and transmitter. That's all you need with an infusion set as well. There are thousands of people in Sweden and the other markets that are carrying this, 400,000 worldwide. How many patients are we talking about in our markets? It's somewhere between 125,000 and 150,000 people.
We have approximately 1/10th of these on our system right now. The business model is really selling a pump. That's the heart of the business. By doing that, we can sell consumables over a period of four years. You can see on the right side, sales per product hub, that typically the pump part of our sales every month is between 17% and 20%, something like that. The rest, the 80%, is consumables. The business is tender driven. No one personally pays for this. It's always the government who pays for this or the regions. Our target groups, it's both the regions, it's the clinics, it's the hospitals, it's the nurses, doctors, and also the patients. We're also into consumer marketing with these products.
As an organization, we have to be very flexible and service-oriented. We say that we try harder. It's like Avis. We were second on the market when we launched many years ago. To get a better sales result, we have to be better than the competition. As I said, the competitors, it's Medtronic who is the main competitor historically. They have been the category leaders for decades. We managed to break this, both with Animas product in the 2012, 2014 time space, and also now. It's pretty amazing. If you look on the lower right side, the market share we have in new sales, new sold pumps, it's in Sweden, 55%, and the other competitors are sort of dividing the rest between them.
Denmark, 50%, and that's pretty new. The sales has basically exploded last year in Denmark, and also this year. Norway, this is a spectacular move because we are now in a tender from October 1st. Before that, our sales level was like 2%, but we had an installed base of pumps, so we could survive. Now it's 40%. It's pretty amazing in one month. In Finland, we just started, and we will soon be in a tender, so. All right. Does this work? Well, I think it does. This looks like a smooth journey, of course, but it has been anything but smooth. There has been problems all the way, and I won't bore you with everything, but I will tell you a few stories.
We have been growing from 2010 up to 2017 by around 15%-20% per year. We were flat for one year, and I will explain that to you in a sec. Based on the Tandem system and everything we are doing, obviously quite right, we've had a tremendous growth. This year, at the moment, we grew by 36%. We're aiming for SEK 1 million or SEK 1 billion next year. This is the company story, and I have like four minutes left. I'll give it a try. We started the company, or I was not on board, then in 2003. It was the Animas pump, just pump. With that, they launched in Sweden as first market.
It's still our main and key market, obviously. Soon in Denmark and soon also in Norway. It's good to have a presence, but we didn't sort of expand the business very much in those markets. It was Sweden, that's where the growth was. Another important thing, obviously, 2012, when Indutrade acquired us. That was really, really important. In 2011, we launched the first CGM system as pump plus CGM. As I told you before, in 2014, we launched Eversense. Why is that good and why is it worth to mention? It's because with that product, we managed to get to know absolutely everybody in the diabetes community. That was so strong.
That was during a period when we were waiting for a new pump from Animas, Johnson & Johnson, but we didn't get it. We were waiting, and then in 2017, they told us, "We are closing down our business." You can imagine, we have SEK 300 million sales, 40 people on board, and no supplier. What did we do? We talked to a company called Tandem in San Diego, who was a really emerging pump company in the U.S., and they did not plan to go outside U.S. We talked to them, and we persuaded them that it was a good idea. To make it even more complicated, Johnson & Johnson made a deal with Medtronic, our worst competitor, that they, Medtronic, should take over all the Animas users, switch them.
We were dead, totally dead. That was a global thing. We talked to Animas and said that, "This is a very bad idea. You should not do this. You will not be popular because you will create a monopoly market," and then some other arguments. We persuaded them that to give us a try. They supported the transfer, the switch of thousands of pumps in our markets over to Tandem. Everything was okay at the end of the day. In that situation, to have the support of Indutrade was absolutely instrumental. That's so important. I don't think with the former owners, entrepreneurs, they would have taken that risk, Animas that is, or Johnson & Johnson .
Joakim and I, we went over there, and we had a serious talk with Tandem, with Animas and so on, and they accepted this. The rest is history. You saw the growth. They're happy, we're happy. We have continued to develop the business. We also launched in Finland as the fourth market. We didn't plan to do that, but we had the chance, and we didn't want the competitor to take that market, so we decided to do that. All right. Key drivers behind our growth, it's definitely culture. Entrepreneurial, growth driven, all you want. Focus. We focus on type one. We have looked at other businesses. We have looked at acquiring businesses and so on, but it doesn't make sense. Focus on this business is the right thing. We do strategic planning.
We've done that since 2009. Every two years, we do a really deep dive, and every year we update. Next year is time for the deep dive so we can continue the growth. Flexible organization, very flexible. You can imagine during these hard times when we didn't know if we would survive, but we survived and no one left the company. They stayed on. They fought, and that's absolutely amazing. From more like a market perspective, relationships to KOLs, key opinion leaders, doctors, and also to the patients long term. They know the Rubin brand. They choose us more than they choose a pump, and I think the transition from Animas to Tandem shows us that it works. We have a very strong customer support.
You can call our customer support if you're wearing a pump 24/7. This is a little bit unique, and we really put resources and pride in this. Effective supply chain. We make sure to always, if we get an order one day, before 3:00 PM o'clock in the afternoon, we send it the same day. Over deliver, and that makes people happy. Geographical expansion, we are very careful. We want to focus on we got. It's a lot already. Finland, okay. Long-term commitment is probably the key in this business. Long-term commitment, and that's like Indutrade. Okay. That's all. Thank you. No, it's not. Sorry. There's one more thing. I mean, we want to continue to grow this business. Obviously, we have growth opportunities in Sweden.
Sweden is on SEK 500 million a year, and we're growing by 25%. Still growing. Denmark growing immensely. Norway will grow and also Finland. You saw the market shares. There are more to do. There's a lot of pen patients to get into this franchise. We can continue to build. The only problem is the competition, of course. All right. I think I'm done there. Thank you.
Thank you, Karl-Johan . Very impressive track record, of course. I hope you penciled down your questions because we need to move on. I welcome Jonas Halvord, our acquisition and business development manager.
Thank you so much. I've been with Indutrade now for about five years in this role. It's, as you have imagined by the presentations before, it's a fantastic company and a fantastic environment to be in, not the least when it comes also to the acquisition side, obviously. If we start by looking a little bit backwards, we have a truly solid track record on the acquisition side. I mean, we are a very regular acquirer, both of stand-alone companies, but also, as you heard from P.O.'s presentation, we are also into, we can say, stand-alone linked cluster acquisitions in certain product areas, but also in pure add-on acquisitions that we integrate into some of our portfolio companies as well.
It's also great to come up after two fantastic presentations on the individual companies, because if we look at the aggregated number of for the past five years of 60 acquisitions, and we have done so far this year 14 acquisitions. Those are numbers, but I can ensure you that behind each and every of those numbers are really fantastic companies. This is Indutrade. I mean, we are a sort of umbrella, we can say, for those companies, but it's really the individual companies that make up Indutrade. I hope that is coming through in the presentations here. We have a track record of value creative acquisitions.
As Patrik already mentioned, if we look at the EBITDA contribution in the past five years, we have actually delivered more than SEK 150 million of incremental profit growth each and every year. We obviously have the ambition of continuing that journey. One of the key activities, as I will come back to later in the presentation, is obviously to have a very strong pipeline, and the pipeline activities connected to that. Because even if the numbers are, if we say impressive or showing that we are a regular acquirer, we are extremely selective in the acquisition. We can say we are selective in the acquisition processes that we pursue, and we are even more selective in the acquisitions that we close.
That is really one of the key activities for the acquisition strategy going forward. If we then take a little bit more of a forward-looking perspective here, and this will actually structure a little bit my presentation here. We have a very structured opportunity-oriented or opportunistic approach to our acquisition strategy. I will come back a little bit further to that as well. We will, going forward, continue on our, we can say, Western European base and the home markets. There are plenty of opportunities within those geographical markets for continued acquisition growth. We have, during the past year, and I will come back to that a little bit later as well, added additional resources, whereof Anders is actually one of them.
We will continue to add resources as we go forward on a need-to basis, we can say. This is also linked, actually, the added resources, to the more structured, proactive approach that Anders also mentioned in his presentation. I will then also touch on the valuation and pricing model that that is very much linked also to the focus on organic growth that we have going forward. What are we then looking for? Well, I think it has been clear from previous presentations as well. We know what we are looking for really. This is a sort of a track record that goes way back. We know when we meet the companies if this is going to be an Indutrade company.
The key parameter is really the one in the middle, because it's always linked to the entrepreneurs and the management and the key individuals of the companies. They have to match the Indutrade core values. Typically, it's also linked to them buying into our business model. That is actually one of the key differentiator for us versus competition from an investment or an acquisition point of view. I think I can touch very briefly on this because it's been mentioned before, but we are only interested in business-to-business companies. We are working both on technical trading companies, as was the start and the historical path of Indutrade.
We are also into manufacturing companies since the past 15 years at least, but we are only interested in companies with proprietary product range and own brands. They should be leading, profitable, showing a track record of sustainable, profitable growth over time. We are, as Bo alluded to in his presentation, we like really companies with a repetitive revenue stream so that they have a small piece price, we can say, but add a high functional value for the customers. More focus on that type of companies than large system suppliers, we can say. Size-wise, we say that our sweet spot is between SEK 50 million and SEK 500 million.
We actually did sign an acquisition of a Danish company, was it last week or the week before, actually, Bramming Plast, who would have a turnover of some SEK 500 million. The average size is around SEK 125 million. One of the key focus areas is really that the companies have a high gross margin, because that is proving that they are adding value to their customers. The flip side of this is what we are not looking for then. Obviously, we are not into business-to-consumer type of companies. We don't want too small companies, unless they are add-ons to existing portfolio companies. They have to have a strong track record of sustainable, profitable performance. We are not into turnaround situations.
They should be healthy, well-managed, and successful in the first place. We are not into startup type of companies. We often have questions around keeping minority positions, et cetera. We are not into that. We acquire 100% in all cases. However, we encourage sellers to invest in Indutrade shares because that's a good way of leveraging their own success going forward. We are not interested in subcontracting type of manufacturing companies. There are a lot of very strong and good companies in that area, but that's not in our strategic scope. We are not into pure service companies either who charge basically the services by the hour. We like aftermarket-focused companies and supporting our existing portfolio companies in that way, but not pure service companies.
This is also important in our internal communication when we talk about internal lead generation that we don't spend time and efforts in these type of companies. I think we touched already on the pros and cons of comparing manufacturing companies with technical trading companies, and I don't think I need to add that. On the manufacturing side, it's typically more assembly type of companies, so capital light type of companies. If we then look at the track record of the past couple of years, it has actually been quite skewed towards manufacturing companies.
That is primarily due to the fact that some of the larger acquisitions have been manufacturing companies, so we don't have a specific target in that regard. We like technical trading companies as much as we do manufacturing companies actually. We have also heard Anders mention a bit around some of the proactive approaches that we are taking as well. We do that. I will come back a little bit to the added resources that we have had. These are three key areas where we are now creating work streams in order to accelerate the proactive lead generation in those areas. MedTech and pharma, wastewater and sustainability.
Actually, if we look at the acquisitions that we have done this year, there are a number of companies that goes into these categories as well. We acquired a company on the diagnostic side, Pro Diagnostics, in the spring. We have acquired Oscar Medtec and Primed this year. If we look at water and wastewater, acti-Chem qualify in that, and that actually qualifies also into the clean tech area. They are providing we can say sustainable solutions for the district heating, et cetera. These are some of the areas where we see possibility in the underlying structural growth in these segments.
That doesn't mean that we are going away from what has been one of the strengths, we can say, and differentiators of Indutrade, and that is also to look into some of the less obvious segments. In these areas, obviously, we meet a lot of competition when it comes to acquisition projects. We have been successful and continue to be successful in those areas as well. Our experience tells us that when we can identify leading companies in segments which are maybe less obvious to others, those companies typically have a higher margin, better return than the average company in some of the more hyped segments. This is one of the key success factors actually historically for Indutrade and will continue to be so going forward as well.
When it comes to the geographical focus, we can say going forward, we see that there are plenty of opportunities still within what we consider our home markets and in Western Europe. We do put a special attention and focus on the German market. We would like to grow our presence in Germany even further. We have basically made two acquisitions per year in the last, I think four or five years. There might be more to come this year. Actually, we have done two so far in 2022. We are also looking into Northern Italy, which has a sort of base which is very similar to the Mittelstand type of companies in Germany.
We did our first acquisition in Italy last year with Italprotec. We have a good pipeline of additional companies. We are putting further attention to that geographical market. We are also evaluating opportunities in the U.S. market. We get that on a regular basis. We will selectively look into that if we find the right type of company, typically in some product area or application area where we have a good understanding of those markets. We will look closely into that as well. Just to say that the pool of possibilities for us is not drying up in Western Europe. We often get that question, will you be able to continue to keep up your pace?
I can say there is not a lack of opportunities and candidates for that. Obviously, as you also heard from my colleagues here, I mean, acquisition work is really a team effort throughout the Indutrade organization. With the track record that we have had over the years, there is obviously a very broad accumulated experience throughout the organization. It's not linked just to us being a part of the acquisition team. This actually is part of the role for the business area heads for BU, for some of the dedicated resources, et cetera. It's really a key team effort in the Indutrade organization.
I would also like to mention actually the entrepreneurs and the former owners, because that's really a differentiating factor for us. We have created a list, a telephone list with all the former owners of companies. In basically all ongoing discussions that we have, we provide this list to the target companies and then say, you can call anyone on this list and hear from them. We don't prepare them, but they speak freely and openly. That has actually been our differentiating factor in many processes actually. Also in this year, I can bring examples. Maybe we can do that later.
It's really, I think, a testament to the strength and the consistency of the business model that we have in Indutrade. I think I see Lars nodding, so you might even add to that. If we then look into the resources that we have available then on the acquisition side, as we said, we have added resources and really made a step up during the past 12 months. We have done so by externally recruiting a few people, and we have also defined new roles for people like Anders, for instance, but others as well. We now have dedicated resources in all our eight different business areas.
Some are full-time focused on the acquisition side, and some, as Anders, as an example again, have that on a part-time basis. This is a bit new for us to have those dedicated resources in all our business areas. We are really working now on onboarding and finding the best way of working jointly on that. The prime focus of the business area resources is the internal lead generation. Obviously, we have a fantastic network within our 196 portfolio companies, among customers, among suppliers, among business relationship in general. This is something that we encourage a lot towards our existing companies as well. It doesn't mean that we are less selective when it comes to the leads coming internally.
Obviously, they need to match the standard as well. On the central team, we can say we are now four full-time people, and we are, besides being sort of responsible for the acquisition process and strategy, we are also taking the lead in many of the externally initiated processes. In Scandinavia, that is really the key focus from the Kista team, we can say then. Many of the other geographically based business areas are more autonomous, we can say, than maybe some of the business areas based in Sweden. We are also responsible in the central team to maintain and develop the external network of brokers and sell-side advisors, et cetera.
We show this in two different frames we can say, but it's very important to say we are. We don't have department borders or so. We are really working as a seamless team and have the Indutrade hat on in order to make sure that the only important objective is really to take the transactions over the finish line jointly. We work, I already mentioned, very regularly with our business areas, with the different portfolio companies in the internal lead generation. Then on the external side, this is just a small set of examples of advisors that we are working with on a regular basis.
I think we can say that over a calendar year, we probably have interactions with more than 100 different advisors and brokers throughout Europe. Some of them we have a very close relationship with and basically have ongoing projects continuously and many others we are making regular transactions, if not on a yearly basis, but every other year or so. We have a very strong position with the advisors, and that it's based on primarily on us being predictable in the processes that we run. If we look at the valuation side and pricing, we can say. We typically distinguish between value and price actually. We like high value and a low price.
We have always been quite prudent and disciplined when it comes to pricing of the targets. We know very well our sort of walk away limits. We are also working in a competitive environment for sure. Historically, Indutrade used to have a very narrow range of the valuation or the multiples that we paid. What we have done now in over the past couple of years is to differentiate that model somewhat. With the increasing focus on growth, we are typically prepared to take that into our valuation modeling as well. If we look at the, say, past three, four years, we probably have increased our average multiple by one multiple point.
It's still within the discipline range that we are applying, but we can say that the increase in multiple is actually by deploying this more differentiated model. When we look at the targets that we have acquired, we would say that the average growth potential of those have improved over the past years, and we have to some extent paid for that as well. We have delivered accretive acquisitions and value creating acquisitions. If we look at the past five years, we have had an incremental margin on the group performance coming from the we call the year class of every year. That is also the objective going forward, even when our group performance have increased over time as well.
What we are saying now is that the acquisitions going forward should deliver on an average over a calendar year of at least 14% going forward. That doesn't mean that we don't look at companies with margins below that. We can do that thanks to the fact that we have a number of acquisitions with significantly higher margins as well. In order to align with the financial objectives, we typically say that the return on capital employed should reach the 20% mark within the three to five-year horizon. To sum it up, we have an acquisition strategy. It's an evolution, not a revolution. We stand on a very solid foundation. We do that also thanks to my predecessors and our team's predecessors in the past.
We have kept a red line, we can say, of when it comes to the type of companies that we have acquired, and we continue to do so going forward as well. We have created value accretive transactions over time, and the ambition now going forward is not to decrease our activities, but as Bo mentioned in his presentation, maybe that the sort of leaning towards a significant part of the growth coming from acquisitions will be a little bit de-emphasized. That doesn't mean that we will do fewer and less acquisitions. In absolute terms, we will continue to grow in both number and in the number of actual acquisitions and in the sales and profit that we contribute.
Generally speaking, we are aiming at doing some two to three acquisitions per business area going forward. Yep, that was it.
Thank you, Jonas. Thank you. Before you go, do we have any questions?
Well, we can take it in the general one then, or?
We have one
Oh, okay.
Over there.
Yep.
Yes. Thanks. Just one question. I mean, considering all the presentations you've had today, which were very interesting by the way, but just your ambition to increase organic growth. I'm just thinking about what sort of incremental spend are you targeting there to actually achieve that target to boost organic growth? I guess we saw in that bridge you provided over the EBITDA margin progression over the last five years, you've been very efficient in reducing cost on SG&A, for example. We heard your subsidiaries talking about the need to drive innovation and sales processes, et cetera. I just wondered if you can provide any sort of future view on that spend to boost organic growth. Thanks.
I think I'll hand over to Bo.
I hand over to Patrik. Good question, Johan. We feel that the new EBITA target of 14% is sort of set in alignment with enough investment capability in organic growth initiatives. We haven't decided on communicating any special sort of number in terms of this. We have dwelled on it, discussed it, and discussed that in sort of perspective when we set the 14% target. We feel that we will have enough sort of capability to invest in internal growth. I don't know, Patrik, if you want to say anything more than that.
No.
No?
That's it.
Just to follow up, it doesn't sound as if you feel it's under-invested in any way?
No
in the last couple of years to drive growth?
No. I mean, we have a professional dialogue in all the boards and the chairpersons of the board, they bring up any type of capital needs they have with the business area heads. We have this portfolio model also, which we use in order to allocate funding to between companies and so on. It hasn't been a bottleneck for organic growth, I wouldn't say.
Finally, Bo, you showed an interesting slide on the sort of structural growth areas such as infrastructure, wastewater, clean energy, et cetera. Do you have an idea, looking at the Indutrade portfolio, how much of it is approximately directed to those areas? What is sort of standard industrial production, if you would say? Thanks.
Well, if you look at our market segments in 2021, the med tech area in total was around 16%-17%, I think. Water, wastewater was 6%-7%. Clean energy is lower. It's more of a growth area. We haven't really accounted for that as a segment per se. The growth in the MedT ech in 2022 is considerable. You listened to P.O. Presentation. Purely organically in the single-use area, we have almost in total in all business areas built close to SEK 1 billion type of business organically over, I don't know, two and a half years, really. So, it's substantial. I can say that.
Any more questions? We have one here.
Thank you very much, and thank you for all the presentations today. Very interesting. First off, I'm curious about the strategic review that you have done and the financial targets, and we touched upon them now, but which people have been involved, and how have you worked with it? Also, how far down in the organization have people been involved in the new strategy?
Yeah, we have a bottom-up process which is generic and recurring. Each company in the springtime basically have the task to work with the business strategy and have a dialogue with their board on their strategy. That's aggregated up on business area level. Per-Olow, for example, is gathering all those numbers and by that adding up a business area financial strategy. There is also a bit of a constructively nudging or challenging. In general, I would say that there is high ambition bottom up. Very few companies which we actively need to engage in because we feel that the strategy is not ambitious enough or so.
It's more a bottom-up strategy than a top-down when it comes to the financial projections and so on. We, in a group management team, are discussing prioritized segments. We are prioritizing these types of initiative. I spoke about the people area, the knowledge sharing, the governance, the scalability and things like that. The financial plan is really anchored, I would say bottom up.
Thank you. When it comes to your leadership, you said that you are the third CEO for almost 45 years, which is very impressive, and it comes with a lot of responsibility, of course. I'm curious, which are your role models now for your leadership and going forward?
Interesting question. I'm not sure if I really have a leadership role model. I pick and steal from I think a lot of people. In some sense our main owner, Fredrik Lundberg, I think is been educational in a lot of aspects in terms of stability, long-term financial strength, professionalism. There are also others who inspire me. I'm quite keen actually on building relationship and being out in industries picking up ideas, but can't really give you any other names than that.
That's fine. One way is, of course, to talk to people, and another way is to read books and other material, and I like to read a lot of books. I'm curious also if you if there are any titles that you can name that have shaped you and influenced you.
Maybe we can take that over coffee in the back.
Sure. Thank you.
Thank you.
Just a question, Bo, on the last time at the CMD, you had a turnover around SEK 15 billion. Now we have heard Per-Olow's quite impressive presentation of what his goal is. It's half the old Indutrade last time we met in these circumstances. If we look at the way you build up the company with business areas and 34 business units, are you what you in relation are doing, is that you're building, I would not say 34 new Indutrades, but it's in a way to build Indutrade to be a much, much bigger company than we can imagine. Is that a way to see it?
Yeah, in the management team, we are projecting a company in the size of SEK 50 billion in five to seven years. We believe in that. We heard from Jonas, we all agree that there is a lot of good companies to acquire in the geographical scope we are predominantly working with. I think we are all inspired of the growth stories from Per-Olow, from Anders, from Karl-Johan. We could have chosen many other leaders, actually the ones sitting here as well, also fantastic growth stories. That's why I said the scalability dimension is super important for us to prepare for.
We need to find a lot of persons who wants to be part of that leadership journey, in bigger assignments, broader scopes, more complexity, and we prefer to find all of those internally. These guys have been with Indutrade 15, 20, 25 years. In the operational business line side, since I came, we haven't externally recruited anyone on the group management level there. I think it's a strength to try to build from what we have and try to train them. It's gonna be doable. I surely believe in that.
There is actually an interesting company in the U.S. called ITW, public company, fairly similar business model as Indutrade, some cultural differences, but they have a portfolio of, I don't know, 700-800 companies, very financially successful as well. There are cases which demonstrate that that's doable.
Just a last question on the push on organic growth. If we look into a recessionary environment in next year, nobody knows, but it'll probably happen. Do you see any when you look back at other difficult years like under the Greek crisis where your organic growth was fairly slow? It was before your time, but your organic growth was fairly slow. Do you see any difficulties in it, but also on the other hand, any positive things because you are a lot of niche companies that could actually maybe push even further in a difficult environment? How do you see that?
Yeah. I think we are more resilient now than we were 2008, 2009. We have more diversity in market segments, in technology areas, in geographies, in number of companies. I had one slide trying to describe how we perform versus industrial integrated corporations, as you probably remember. If anything, I think we have improved from that time. It's really the culture, and it's these types of leaders who are. They are not waiting for anyone to advise them or coach them or so. They are every day leading their businesses, and if they see obstacles or challenges, they act on them and they take decisions. That's the beauty of the model.
Also the fact that we are predominantly smaller companies. It's much easier to navigate 200 smaller companies than a large, big, giant group. I'm confident that we will be quite resilient.
Thank you. Two questions. First one on M&A. You had a description, and also you repeatedly highlighted the importance of internal idea and lead generation. But now we've also talked about your relationship with structured sellers. Is it possible for you to share, perhaps what kind of split you have between targets you've made through internal idea generation and through external or structured processes, and how you envision this changing potentially going forward?
Jonas, do you want to?
Actually, a majority of our acquisitions are actually coming from external leads. It's basically 60/40. We have an ambition to reach a more even split, 50/50 of that. I mean, there are advantages obviously of internally led lead generation. It becomes typically more of a bilateral type of process. It doesn't automatically mean that we acquire the companies for a lower multiples, if we say so. Sometimes you also have to pay for exclusivity on that basis. It's basically even. I think we have a strong brand in the industry of being a regular acquirer.
From that point of view, we do not fear. We can say the type of competitive processes either. We don't win them all, but we, as you see it, we don't see that we have an issue or a problem basically in reaching our financial targets on the acquisition side. That was a bit of a broader answer to your specific question.
Thank you. Then the second one is on we've heard during the afternoon here a lot about the, let's call it technology divisions within Indutrade. How should we think about the split between the Benelux, DACH, Finland, U.K. divisions compared to measurement and flow, for example?
Yeah. It's a bit of a pragmatic organizational structure. We have these two technology areas, flow and measurement and sensor technology. They are sort of global and if we find a flow company, valves company in any geography, it will fall under Per-Olow's business area. The same with measurement and sensor technology. If we find those companies, we place them in Patrik's area. It might be so down the line that we will nurture or structure and find more global technology areas. It could potentially be med tech or other types of areas. We have something, an area called industrial components. It's not fully true to only industrial components, but we also have a quite diverse set of companies in a given geography.
That's why we have this structure as we have it. In the Netherlands, there are quite a few different market segments and technology areas, and then it makes more sense to keep it sort of local and give the coaching on a local basis, the governance structure on a local basis. This is something we obviously discuss and contemplate on if we should change something, yeah. Probably nothing, again, dramatic, more an evolution and something predictable over time. Smaller steps.
Okay. Thank you very much. We do, however, have a few questions from the webcast as well. Could there be a time to do a spin-off, for example, the Flow Technology business area to accelerate the acquisition pace on a standalone basis?
Yeah, that's a good question. We frequently get that question and we have no plans to restructure Indutrade or divest a part of Indutrade. Whatsoever right now. It's not part of our strategic discussion in the group management, neither a part of the discussion in the supervisory board. It's extremely unlikely that something like that will happen in a foreseeable future. When you should do something like that, I think it's because you are undervalued somehow. The pieces separately are worth more if you divide that rather than keeping it in a group like that. Now we don't feel that we are very undervalued or see the reason for doing this. We are neither too big in order to be bureaucratic or slow.
I think, with the setup we have, we have a good sort of governance model and we are supportive to the companies, in a fast, flexible, way. There is no real benefit of doing that in my mind.
Second question here. How will the higher inflation/interest rate environment affect your ability to perform on your acquisition strategy during 2023? Is there a risk of a slower pace?
I can briefly start, Jonas, if you want to add later on. If we look past it might be a little bit less companies for sale in a weaker cycle, because the companies we look for, they know their value and they don't really negotiate on that value. Either we pay up also in a weaker cycle, or they prefer to sell at a later stage when the multiples are higher. There could also be fewer contenders in a weaker cycle who have perhaps weaker balance sheets than we have, and so on and so forth. Right now I'm quite optimistic that we will keep the pace and the ambitions we have on the acquisition side. Hopefully we agree.
Yes, I think the only thing one can add is that we always use earn-out structures in our acquisitions. We do that for two reasons. One is from a risk-mitigating point of view, it protects the downside, we can say for us as a buyer, but also to share the value creation on the upside with the sellers as well. Typically when you enter into a business cycle like this, when there is more uncertainty, typically the sellers are a little bit slower to adapt to that than the buyer's perspective. The way to actually mitigating that could also typically be through the earn-out structures. I think we see that we have possibilities to maneuver, we can say also during periods of more uncertainty.
Thank you. I think we will keep it there. The day is coming closer to the end. On my behalf, I would like to thank you all for participating, and I leave over to Bo for any final words. Thank you.
No, also for me, thank you for taking time to being here physically and those online for listening in. I hope you have appreciated the messages and that the information has been useful, informative. We have tried to portray technical trading businesses with proprietary products, own assemblies, try to inform you how we scale the group going forward and that we are confident that we can do that. I think we have ambitious targets which we believe in, and they're not only my targets. It's really, as I said, built bottom-up and I think a broad range of responsibility in the group for achieving that target, and actually a lot of inspiration, energy also to step up and step forward in a number of areas.
Thanks again for participating and for those who don't need to rush away, we'll be around here in the exhibition area for some further time. Thank you so much from us.