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12 Questions about the Company

1. How is INDUS different from other holding companies?

INDUS shares the portfolio companies' sense of entrepreneurial purpose along with their goals, and it fully assumes the responsibilities incumbent upon an owner – for the long term, with no exit intentions.

INDUS actively assists the portfolio companies' efforts to increase their long-term earning power. And INDUS does so with no intention of pursuing a skimming strategy.

INDUS uses the power of the Group to strengthen each individual company – without diminishing the operational sovereignty of the other companies.

2. Stock exchanges & the SME sector: How are they compatible?

INDUS makes its decisions solely on the basis of entrepreneurial considerations and in keeping with its long-term orientation. (Short-term) price developments on the trading floor play no part in how its business model is realized.

INDUS is therefore free to implement its long-term ownership strategy – and its concomitant approach of constructively supporting management at the portfolio companies – without compromise.

At the same time, INDUS uses the various instruments of the capital markets to realize its financial goals. That includes equity through the stock exchange. The stock exchange listing also allows investors to share in the benefits of small and medium-sized business models with the straightforwardness of owning shares.

3. What does INDUS promise its shareholders?

INDUS seeks to enable its shareholders to share in the fruits and potential of the growth-driving small and medium-sized enterprise sector. Its strategy aims for sustained healthy earnings and stable value appreciation. With its emphasis on diversification, our portfolio policy is designed to give this strategy stability.

INDUS pays regular dividends so that its shareholders can share in its business success. The dividend policy provides that at least 50% of profits are to be reinvested in the company and up to 50% distributed.

4. What does INDUS promise its portfolio companies?

Operational autonomy and active dialog
INDUS's portfolio companies operate in their markets autonomously. At the same time, our management supports their managers through regular strategic dialog. This exchange sets processes in motion and inspires ideas for the future direction of their companies.

Keeping the corporate culture intact
Our portfolio companies remain embedded in the context into which they have grown. They retain their names, their employees, their unique features. In their business operations they continue to work with the same familiar partners.

Financial strength without bank dependency
INDUS provides portfolio companies with the financial backing they need to realize ideas and seize market opportunities, all by way of fostering their ability to move forward on their own with the liquidity they generate.

Rapid knowledge transfer
INDUS serves as a source of current management knowledge and methods that portfolio company managers can consult as needed – in the field of financial engineering, for example, or in regard to the legal issues that come up when a company is planning to expand abroad.

5. Why is the life's work of an entrepreneur in good hands at INDUS?

The management of INDUS gives owners of companies a promise on which it stakes its reputation: that it will protect and preserve what the entrepreneur has built up and provide a reliable source of support for its future development. This includes preserving a company's culture and protecting profitable entrepreneurial values.

When a company becomes a part of the INDUS Group, it also becomes part of a powerful network that gives it further strength.

6. How does the diversified portfolio structure benefit both shareholders and portfolio companies?

How shareholders benefit
A diversified portfolio structure tends to stabilize the value of INDUS's paper. Poor performance in some parts of the portfolio can be offset by the strong performance of other portfolio companies. This prevents excessive price fluctuations and allows shareholders to share in the profits of the Group as a whole through dividends, even in difficult times.

How the portfolio companies benefit
Affiliation with the Group gives our portfolio companies a source of financial support that, ideally, they can use for further positive development or, if need be, to tide them over during a difficult phase. Diversification ensures that companies are not all moving in different cycles. Thus the holding company normally has enough resources that it can make them available for the portfolio companies' various purposes at any time.

7. Why will INDUS continue to be successful 20 years from now?

With its "buy, hold & develop" approach, INDUS is pursuing a strategy built on two pillars: unconditional (financial) stability and permanent movement. This allows INDUS to adjust with great flexibility to every sort of market development.

Added to this is the broad diversification in its portfolio. INDUS is made up of many strong and diversified small and medium-sized enterprises. These are solid players in our Group and together represent a cross-section of the most vital industries.

INDUS has amply demonstrated over a period of nearly three decades that this strategy works. The company has undergone continuous development, even during those phases that were characterized by a difficult economic environment.

8. How stable is the INDUS strategy?

The corporate management of INDUS stood in the past and continues to stand today for the absolute continuity of its business model and the strategic implementation of that model. This is reflected in, among other things, long-term management appointments and decisions that are made with the long view in mind, i.e. irrespective of market price trends.

The most important guarantor for the stability of the INDUS strategy is its market success. In light of the increasing topicality of succession arrangements, demand for INDUS's business model is expected to increase in coming years.

9. Does its pursuit of internationalization mean that INDUS will be acquiring portfolio companies even outside of German-speaking Europe in the future?

INDUS focuses on small and medium-sized enterprises in German-speaking Europe, and it will continue to do so in the future. This, however, does not preclude a second level of investments – i.e., investments through the portfolio companies – in enterprises based in other countries.

As they step up their internationalization efforts, our portfolio companies are establishing ever more solid footholds abroad. Through strategic acquisitions on the second level, foreign companies will probably continue to join our Group.

First-level shareholdings in companies beyond the borders of German-speaking Europe are not planned. One reason for this is that integrating such companies into the INDUS Group's corporate culture and furthering their interests would entail greater costs.

10. How does INDUS find new portfolio companies?

There are basically two ways. Entrepreneurs, banks or intermediaries may approach us directly. INDUS has earned a reputation over the decades that has brought a large number of companies to our doors.

Or we may approach companies ourselves. We have been doing so, in fact, more and more in recent years. We have defined target markets and growth industries (see Question 11) in which we are systematically on the lookout for suitable partners, which we select according to fixed criteria that are a recipe for reliable decisions.

11. What kinds of companies does INDUS look for?

INDUS looks for financially sound small and medium-sized enterprises from the manufacturing sector, companies with a viable business model and the potential for strategic growth. Ideally they operate in one of what we have defined as our growth industries (see diagram).

12. Who owns INDUS?

As a listed company, INDUS is owned by its shareholders, who support with their shares the goals and long-term direction of the company's management. In recent years INDUS acquired as an anchor shareholder Versicherungskammer Bayern, which is providing lasting support for this direction.