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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 2021, sales volume increased by 39 per cent. Excluding Gränges Konin sales volumes increased by 18 per cent, which was better than the estimated growth in end-customer markets of 7 per cent. This was mainly driven by sales volume to the automotive industry where the growth was significantly higher than the estimated growth in light vehicle production. Supply chain turbulence and adjustments of inventory levels at the automotive customers impacted sales volumes and growth rates.

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

 

 

Comment: In 2021, return on capital employed increased by 1.9 percentage points to 10.0 per cent. The increase was driven by higher adjusted operating profit which was partly offset by increased assets following the ongoing expansion investments. Adjusted operating profit was negatively impacted in the second part of 2021 due to high inflationary pressure on operating costs which was not fully compensated for by price increases.

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

 

 

Comment:  In 2021, net debt increased by SEK 351 million to SEK 3,643 million, corresponding to 2.2 times adjusted EBITDA. High metal prices and continuing expansion investments, with yet limited returns, led to a net debt EBITDA ratio above 2.

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 proposed a dividend of SEK 2.25 (1.10) per share for the 2021 fiscal year, corrsponding to 40 per cent (32) of the profit for the year.

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 carbon emissions intensity from own operations and purchased energy (scope 1+2) by 25 per cent.1) Reduce carbon emissions intensity from sourced metal inputs (scope 3) by 30 per cent.1)

 

 

Comment: In 2021, carbon intensity reached 0.88 tonnes CO2e/tonne for scope 1+2 and 8.4 tonnes CO2e/tonne for scope 3. Excluding Gränges Konin and Gränges Powder Metallurgy, scope 1+2 intensity decreased by 11 per cent to 0.73 (0.83) and scope 3 by 3 per cent to 9.3 (9.6). Total carbon intensity (scope 1+2+3) has now been reduced by 19 per cent vs. baseline 2017.

 

1) Versus baseline 2017, recalculated to include Gränges Konin.

Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.

100 per cent of Gränges’ products to have third-party verified sustainability information available. 

 

Comment: In 2021, the share of products with third-party verified sustainability information increased to 35 per cent, which corresponds to 43 per cent (19) excluding Gränges Konin and Gränges Powder Metallurgy. Local product carbon footprint tools and certificates are now in use at Gränges Finspång and Gränges Shanghai.

Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.

Increase the share of sourced aluminium scrap to at least 30 per cent of total sourced metal input. 

 

Comment: In 2021, the share of sourced aluminium scrap increased to 28.5 per cent. Excluding Gränges Konin and Gränges Powder Metallurgy, the share increased by 2.5 percentage points to 25.0 (22.5). The increase was driven by expanded sourcing of aluminium scrap in all regions, mainly in Gränges Americas.

Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy. 

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

 

 

Comment: In 2021, Total Recordable Rate (TRR) increased to 6.5 recordable accidents per million hours worked. Excluding Gränges Konin and Gränges Powder Metallurgy, TRR was 6.9 (5.5). Severity Rate increased to 139 lost workdays per million hours worked, which corresponds to 101 (109) excluding Gränges Konin and Gränges Powder Metallurgy. 

Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy. 

All sites to achieve certifications in accordance with the Aluminium Stewardship Initiative (ASI) Performance Standard and Chain of Custody (CoC) Standard. 

 

 

Comment: In 2021, Gränges Finspång achieved certification in accordance with the ASI CoC Standard, followed by Gränges Shanghai in January 2022. In conjunction with the CoC Standard certification, Finspång achieved a full Performance Standard certification, upgraded from a provisional status due to COVID-19. Gränges Shanghai was certified against ASI Performance standard in 2019. 

Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.