STOCKHOLM: The Board of Ratos AB has decided on new financial targets based on the previously announced decision to steer the direction of operations towards becoming a business group with a long-term perspective.
Ratos currently has an “eternal” ownership horizon and invests to build value over the long term.
“After reviewing the investment strategy implemented by Ratos’s management and Board in 2018, our focus was initially on increasing stability and profitability in the companies owned. This work resulted in EBITA in 2020 more than doubling compared with 2018. This means that Ratos and its companies are ready to take the next step, with a focus on profitable growth, both organically and through acquisitions,” says Per-Olof Söderberg, Chairman of Ratos.
“We are well positioned to accelerate the pace of execution of our business plan, with the aim of investing in organic growth and margin growth in the existing business group as well as add-on acquisitions and potential new acquisitions. We have taken several steps in the transformation of Ratos and are now a business group focused on profitable growth. At the same time, a great deal of work remains to reach our targets,” says Jonas Wiström, President and CEO of Ratos.
FINANCIAL TARGETS
Ratos decided on the following financial targets:
EBITA growth:
Target: EBITA is to amount to at least SEK 3 billion by 2025.
Net leverage:
Target: Net debt in relation to EBITDA should normally range from 1.5 to 2.5x, excluding financial leasing liability. The target includes the cash balances of Ratos’s parent company.
Dividend payout ratio:
Target: The dividend payout ratio should amount to 30–50% of profit after tax attributable to owners of the parent, excluding capital gains and losses.
The new financial targets replace the previous targets, which were: 1. the earnings of the company portfolio should increase each year; 2. the total return on Ratos shares should, over time, outperform the average on Nasdaq Stockholm; and 3. that the dividend payout ratio should be 30–50% of profit after tax attributable to owners of the parent.
Ratos is a business group consisting of 11 companies divided into three business areas: Construction & Services, Consumer & Technology and Industry. In total, the companies have SEK 33 billion in sales and EBITA of SEK 2 billion. www.rtos.com