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 adjusted EBITDA, and pay a dividend of 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: In 2019, sales volume decreased by 7.4 per cent, which was somewhat more than the decline in end markets, primarily due to inventory reduction in the supply chain.

 

Return on capital employed

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

 

 

Comment: In 2019, return on capital employed decreased by 4.8 percentage points to 11.7 per cent, mainly due to higher capital employed driven by expansion investments in the US and Sweden.

 

Capital structure

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

 

 

Comment: In 2019, net debt further increased by SEK 971 million to SEK 3,465 million. The increase is driven by expansion investments in the US and Sweden. On 31 December, 2019, net debt amounted to 2.6 times adjusted EBITDA (2.5 excluding IFRS 16 lease liabilities).

 

Dividend policy

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

Gränges withdraws the dividend proposal
The outbreak of the coronavirus, Covid-19, and the extraordinary measures and recommendations that authorities and governments have taken to reduce the spread of infection, have significantly affected market conditions and operating conditions on the markets where Gränges operates.

As a result, Gränges’ Board of Directors has decided to withdraw the previously communicated proposal to the Annual General Meeting (AGM) 2020 for a dividend of SEK 3.40 per share. The Board’s decision has been made in the light of the prevailing global climate, due to the outbreak of Covid-19 and its effects on the world and markets, and the risk of the outbreak’s potential financial impact on Gränges’ operations and results. Withdrawing the dividend proposal also allows for the Board to evaluate and potentially reduce the size of the previously announced rights issue, which aims to finance the acquisition of Aluminium Konin and future growth investments.

“Due to the prevailing global climate, it is the Board’s opinion that this is a sound action to take at this point to ensure that the company continues to be well-positioned for the future,” says Anders G. Carlberg, Chairman of the Board of Directors of Gränges AB.