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Greater focus on growth and innovation

Strategy

Gränges has a clear strategy for growth targeting four areas: Thermal management, Electrified transportation, New rolled products niches and New materials technology. The implementation of the strategy is supported by a focus on sustainability, innovation, digitalization and continuous improvement. Together with Gränges’ strong company culture and committed employees, this will further strengthen Gränges’ competitiveness and value creation as well as enabling Gränges to fulfil its purpose and promise.

Growth areas:

Gränges is the global leader in aluminium materials for heat exchangers to the automotive and HVAC industries and this will continue to be an important part of Gränges’ future growth. Gränges aims to continue to expand its offer into new end-markets by using the knowledge of thermal management applications.

The electrification of the transportation industry drives increased demand for rolled aluminium solutions, for instance in batteries and for lightweighting of the body and structure. In this area Gränges will target select opportunities that have a good fit with Gränges’ know-how and production capabilities.

Gränges' expertise and capabilities in aluminium rolling may be used also outside of the current core product segments. Gränges aims to continue to expand and diversify into adjacent rolled products niches like speciality packaging and thin gauge foil products.

Gränges has a deep know-how of aluminium technology that can create value outside of aluminium rolling. Gränges aims to leverage this to expand into new materials technology. One example of this is the business unit Gränges Powder Metallurgy which was established in 2020 and focuses on aluminium powder for additive manufacturing.



Long-term financial targets

Gränges should grow at least in line with the market, generate a return on capital employed of 15–20 per cent, have a net debt of 1-2 times EBITDA, and pay a dividend of 30–50 per cent of the profit for the year.

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

 

 

Comment: In 2020, sales volume increased by 0.9 per cent. Excluding acquisitions sales volume decreased by 3 per cent, which was better than the decline of 7 per cent in end-markets. This was mainly driven by increased market share and successful ramp-up of new production capacity in the HVAC and Other business.

Generate a return on capital employed of 15–20 per cent over time.
 

 

 

Comment: In 2020, return on capital employed decreased by 3.6 percentage points to 8.1 per cent. This was driven by lower adjusted operating profit due to challenging market conditions following the COVID-19 pandemic, in combination with increased assets from the expansion investments.

Have a net debt which should normally be 1–2 times adjusted EBITDA over the last 12 months period.
 

 

 

Comment: In 2020, net debt decreased by SEK 173 million to SEK 3,292 million. The net debt impact from acquisitions and expansion investments was negative with SEK 2.6 billion during the year. This was more than o.set by adjusted cash flow before financing activities of SEK 1.2 billion and proceeds from the rights issue of SEK 1.7 billion. On 31 December, 2020, net debt amounted to 2.2 times adjusted EBITDA.1)

 

1) Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months.

Pay a dividend of 30–50 per cent of the profit for the year. Decisions on dividends will reflect the company’s financial position, cash flow, and outlook.

 

 

Comment: The Board of Directors proposes a dividend of SEK 1.10 (–) per share for the 2020 fiscal year, corresponding to 32 per cent of the profit for the year 2020. The dividend for the fiscal year 2019 was withdrawn due to the COVID-19 pandemic and its potential financial impact on Gränges’ operations and results.

Long-term sustainability targets 2025

Gränges has a group-wide sustainability framework which covers 13 material topics grouped into five sustainability pillars. Each pillar has an accompanying long-term commitment and targets for 2025. The targets below represent a subset of the 2025 sustainability targets which can be found here ›

Reduce Total Recordable Rate to < 3.0 recordable accidents per million hours worked. 

 

 

Comment: In 2020, Total Recordable Rate increased to 5.5 recordable accidents per million hours worked (4.4). Severity Rate improved by 23 per cent to 109 (142) as the accidents had less serious consequences and led to fewer lost workdays.

All numbers exclude Gränges Konin and Gränges Powder Metallurgy.

Reduce carbon emissions intensity from own operations and purchased energy by 25 per cent.1) Reduce carbon emissions intensity from sourced metal inputs.1)

 

 

Comment: In 2020, total carbon emissions intensity reached 10.4 tonnes CO2e/tonne (11.3), a reduction of 8 per cent compared with 2019 and 18 per cent compared to baseline 2017. The reduction was primarily driven by expanded sourcing of recycled aluminium as well as of low-carbon primary aluminium. Carbon emissions intensity from own operations and purchased energy increased by 1 per cent compared to 2019 and ended at 0.83 tonnes CO2e/tonne (0.82) driven primarily by an increased energy intensity.

1) Versus baseline 2017.

All numbers exclude Gränges Konin and Gränges Powder Metallurgy.

Increase the share of women among senior management1) to at least 30 per cent.

 

 

Comment: In 2020, the share of women among senior management increased to 21 per cent (20) and the share of women in the total workforce increased to 15 per cent (14).

1) Employees eligible to participate in Gränges’ long-term incentive (LTI) programme.

All numbers exclude Gränges Konin and Gränges Powder Metallurgy.

Make sure that 100 per cent of all employees are annually trained in Gränges’ Code of Conduct.

 

Comment: In 2020, 100 per cent (99) of all employees conducted the annual group-wide Code of Conduct training, and 100 per cent (100) of all whitecollar employees conducted the annual anti-corruption training.

All numbers exclude Gränges Konin and Gränges Powder Metallurgy.

Ensure that 100 per cent of all significant suppliers1) are committed to Gränges’ Supplier Code of Conduct or equivalent standard.

 

Comment: In 2020, 127 significant suppliers – corresponding to 97 per cent (99) of the purchase value from significant suppliers – had a valid Supplier Code of Conduct commitment or had an equivalent standard in line with Gränges' sustainability requirements.

1) Suppliers with a purchase value above SEK 5 million, CNY 5 million or USD 0.5 million.

All numbers exclude Gränges Konin and Gränges Powder Metallurgy.