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 decided to withdraw the dividend proposal
Gränges’ Board of Directors decided, and communicated, in March 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 was 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. 

The AGM 2020 resolved, in accordance with the Board of Directors' proposal, that the retained earnings of SEK 1,588,580,143 that are at the disposal of the AGM will be appropriated so that the whole amount is carried forward.