CEO's Review

Focus on local excellence – another record year for Tamro

Again Tamro can report a record year, an all-time high. The challenging and changing environment leading to great distress in the global financial market has affected most sectors of business; however, it did not cause any setbacks in our unbroken list of improved results.

Our strong focus on local excellence and performance allowed us to progress in most markets. Even countries that from the European perspective seem similar and comparable, such as the four Nordic countries, have elected to apply completely different business structures for their distribution of medicines. The local character of Tamro’s business and our autonomy from our owner’s structures has allowed Tamro to continue its operations unaffected by the adverse events seen in Germany in the last quarter of 2008. Work at Tamro’s headquarters has been successful in ensuring that sufficient group funding from the Nordic banks and our own sources is being provided. We also continue building a centralised IT platform, of which the core is formed by the hardware installations in Finland and the Enterprise One ERP platform that Tamro has adopted.

I am very proud to see how our customer services are continuing their positive development. Customers are in the very nucleus of everything we do. Extensive surveys are conducted in all of our target markets to ensure that we are attuned to our customers’ and suppliers’ needs at all times. The results of the surveys confirm the strength of our service quality. Not only is Tamro the leading player in terms of volume; it is also recognised as the preferred partner, able to meet the high expectations of customers and suppliers alike.

The appropriate conduct of our employees has been anchored in the new Tamro code of conduct, which is being converted into Tamro countries’ local languages and implemented throughout the group. It is important to ensure that our business ethics stand out as exemplary at all times. As the leading pharmaceutical distributor in our target markets, Tamro should act as a responsible member of the community, also when it comes to our impact on the environment.

The Swedish government continues its preparations to dismantle the retail monopoly with effect from July 2009 and liberalise the sale of non-prescription medicines from November 2009. Sweden now represents Tamro’s most important opportunity for expansion. Sweden is our second largest market, and today our deliveries fulfil approximately 70% of the volume requirements of Swedish pharmacies. Tamro is determined to maintain a strong position also after the scheduled liberalisation. However, our plans cannot be fully set until the Swedish legislators and government agencies have finished their work. It cannot yet be determined whether the market will be sufficiently attractive to enter into pharmaceutical retailing. Flexibility will be needed for adapting Tamro’s operations to the changing business environment. As a leading distributor, Tamro is obliged to ensure that the supply of medicines to Swedish customers does not suffer during the transition.

This summer, I shall reach the age when my employment contract expires. I shall not leave this position without emotions. Supported by owners who were willing to invest in Tamro’s expansion and success, I have seen the company, and each of its business units, improve year by year since 2002, when I took on the office. The success of the business units was facilitated by the hard work of the employees, building and maintaining a trustful relationship with our suppliers and customers. I thank you all for your support, and I trust that you will continue this successful journey with my successor, Juha Koponen, whom I wish the best success and all my support.

As an incoming member of the Tamro Board of Directors, I shall continue to closely follow Tamro’s business and remind that business is local and that our success is determined by the professional way our employees approach our customers.

Jo Langmoen
President and CEO
Tamro Corporation