Mid-term financial targets and cash allocation policy
We aim to deliver ambitious mid-term profit targets:
- Mid-single digit % organic sales growth
- An above 20% adjusted EBITDA margin
- High-single digit % adjusted EBITDA growth
The key drivers to deliver sustained organic sales growth are our innovation platforms, commercial synergies from recent acquisitions which come on top of our underlying market growth, and the continued expansion of our customer-centric solution offerings.
Our cash allocation policy has a clear order of priority for cash deployment:
- Disciplined capital expenditure for organic growth: approximately 6.5% of annual sales
- A stable, preferably rising dividend
- Disciplined M&A
- In the absence of value-creating M&A, capital to be returned to shareholders
We remain committed to maintaining a strong, investment-grade credit rating. With our dividend policy of a stable, preferably rising dividend, we target an average payout of 40–50% of adjusted earnings.
Capital expenditure
This includes all investments in intangible assets and property, plant and equipment.
Earnings before interest, tax, depreciation and amortization (EBITDA)
EBITDA is the sum of operating profit plus depreciation and amortization. Adjusted EBITDA is the EBITDA adjusted for material items of profit or loss coming from acquisitions/divestments, restructuring and other circumstances that management deem it necessary to adjust in order to provide clear reporting on the development of the business.
Organic sales growth
Organic sales growth is the total impact of volume and price/mix. Impact of acquisitions and divestments as well as currency impact are excluded.
