Financial targets

Gränges’ long-term financial targets state that Gränges should grow at least in line with the market, generate a return on capital employed of between 15–20 per cent, have a net debt in the range of one to two times EBITDA, and pay a dividend of between 30–50 per cent of the profit for the year.

Growth

Increase sales volume at least in line with the company’s end-markets.
 

 

 

Comment: The acquisition in the US was consolidated into Gränges’ accounts from August 22, 2016, which resulted in a considerable increase in sales from the third quarter of 2016. Excluding the acquired business, sales volume increased by 7.6 per cent in 2016, which was higher than the growth in end-markets.

 

Capital structure

Net debt should normally be between 1–2 times EBITDA over a 12-month period.

 

 

Comment: Net debt increased by SEK 2,447 million in 2016 to SEK 2,722 million as at December 31, due to the acquisition in August 2016, which was entirely financed with loans. Net debt amounted to 2.1 times EBITDA as at December 31, 2016. Gränges’ assessment is that net debt will return to the target range during financial year 2018 at the latest.

 

Return on capital employed

Target is to generate a return on capital employed of 15–20 per cent over time.

 

 

Comment: Return on capital employed decreased 0.7 percentage points to 17.5 per cent in 2016. The acquired business contributed to improved adjusted operating profit and higher capital employed.

 

Dividend policy

Target is to pay a dividend of between 30–50 per cent of the profit for the year over time. Decisions on dividends will reflect the company’s financial position, cash flow, and outlook.
 

 

 

Comment: The dividend for the 2016 fiscal year was decided at SEK 2.40 per share. This corresponds to 36 percent of the profit for the year 2016, an increase of 20 percent from the previous year.