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Long-term financial targets

Gränges should have an average yearly operating profit growth above 10 per cent, generate a return on capital employed above 15 per cent, have a net debt of 1–2 times adjusted EBITDA, and pay a dividend of 30–50 per cent of the profit for the year.

Average yearly operating profit growth above 10 per cent.
 

 

 

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 above 15 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.