Strategy and financial objectives
Simplify, Focus, Grow
On 3 May 2016 Kendrion announced an updated strategy that is founded on three pillars: Simplify, Focus, Grow.
Our financial objectives up to 2018
Kendrion stated its medium-term financial objectives on 3 May 2016. The three-year targets are to deliver an EBITA margin of 10% as from the end of 2018, an expected organic growth until 2018 broadly in line with Kendrion’s average historical organic growth of an average of 5% per annum and to maintain the dividend policy of paying out 35 to 50% of the net profit.
Strategic update 2019 - 2023
On 15 August 2018 Kendrion announced its strategic update for 2019 - 2023. Since the announcement of the "Simplify, Focus, Grow" strategy in May 2016, Kendrion has simplified and refocused the company. This has significantly increased its profitability and has placed Kendrion in a good position to benefit from important and long-term trends. We intend to remain focused on this for at least the next five years.
The primary objective will be to continue to deliver sustainable profitable growth for the business. Kendrion will retain its focus on resources and investments in Passenger Cars, specifically in the areas of electrification, autonomous driving, safety and comfort, on permanent magnet brakes for robotics and in China where we see and tap into healthy growth opportunities.
Through the combination of continued disciplined cost management and accelerating organic growth, Kendrion expects to realise a Return on Investment of at least 20% by 2023, up from 15% over the Last Twelve Months as per June 2018, and an EBITDA margin by 2023 of more than 15%. The dividend policy of paying out 35 to 50% of the net profit will remain unchanged.
Targeted add-on acquisitions
Kendrion has a strong financial position and has delivered excellent rates of cash conversion which have contributed to a healthy balance sheet. Kendrion endeavours to acquire companies that enhance the company’s leading position in its automotive and industrial markets. Acquisition targets need to offer good returns in terms of their EBIT and ROI, preferably at levels similar to or above Kendrion’s returns and that leads to an improvement in earnings per share.