Strategy

AAA

The major objective of the strategy for 2020 is to ensure stable growth of the company value for shareholders due to: 

1
Sustainable development leading to systematic increase in the generated profits and cash
2
Stable dividend policy
3
Creating the potential for future development in further periods
4
Maintaining high corporate governance standards

 

Strategy objectives

 

 base in 2014      2017   forecast 2018*Growth of raise Strategy  2020             Strategy implementation level
Sales revenue  PLN  1 820   PLN 2643  

PLN 2 893  mn

  +9%

PLN 3 357 mn

86% 

EBITDA PLN   309  PLN 394 mn PLN 448 mn

  7%

PLN 514 mn

87% 

Dividend      up to 80%
of consolidated net profit

 

 

 
Capital expenditure      190 mn

335 mn**

 

 PLN 1 354 mn

                   74%

* forecast

** including 43 million PLN of payments carried forward from investment projects in 2017

Changes in the management structure:

The Management Board of Grupa Kęty S.A. intends to take measures to separate the production activities of the Extruded Products Segment from the structures of Grupa Kęty S.A. Grupa Kęty S.A. would remain the holding company listed on Warsaw Stock Exchange with assets in the form of shares and interests in leading companies in each segment.

Investment plan:

The Management Board assumes that, in the period covered by this strategy (taking into account the expenses incurred to date from the beginning of the implementation of the strategy, i.e. from 2015), the capital expenditure will amount to ca. 1,246 million PLN (+316 million PLN as compared to the 2015 strategy and the total of 787 million PLN of spending in 2017-2020), including:

- Extruded Products Segment – 550 million PLN

- Aluminium Systems Segment – 393 million PLN

- Flexible Packaging Segment – 257 million PLN

This forecast does not comprise any possible additional expenditure on acquisitions, whose effects are also not included in the forecast of sale and results.

Dividend policy:

The dividend policy adopted by the Supervisory Board of Grupa Kęty S.A. provides for the payment of dividend amounting to 60%-100% of consolidated net profit of Grupa Kęty S.A. during the implementation period of ‘2020 Strategy’. The Management Board assumes that the payment of dividend during the implementation period of ‘2020 Strategy’ strategic plan will amount on average to 80% of consolidated net profit of Grupa Kęty S.A.

The Management Board, when determining the recommended dividend, will take into account, among other things:

- the Group’s net debt to EBITDA ratio calculated as at the last balance sheet date of the previous financial year with the maximum level of 2.0;

- time shifts of dividends received from subsidiaries affecting the maximum level of recommended dividend;

- the value of potential and feasible acquisitions;

- the value of actual capital expenditure to be made in the year of dividend payment.

Potential acquisitions:

The forecasts until 2020 do not take into account any effects of potential acquisition projects. Nevertheless, the Management Board takes into account two directions of potential acquisitions within existing segments and the establishment of a new segment:

1) In the Extruded Products Segment – they may be related to the development of existing competences or the acquisitions of new competences in the area of profiles processing and the production of components based on aluminium profiles. Potential projects may be related to entities with sales revenue of up to 50 million EUR.

2) In the Aluminium Systems Segment – they may be related to the geographic or product-related development on new markets. Potential projects may be related to entities with sales revenue of up to 20 million EUR.

3) A new segment with the potential enabling the generation of sales revenue in 2020 at the minimum level of 200 million PLN.

Debt:

In relation to the investment programme being implemented and the planned payment of dividend, the Group’s debt will rise to ca. 820 million PLN at the end of 2018 (ca. 762 million PLN in net terms) and ca. 801 million PLN at the end of 2020 (ca. 682 million PLN in net terms).

Uncertainty risk and the frequency of the evaluation of the strategy accomplishment degree:

These strategy objectives, including the forecasts of future revenue and profits, have been established on the basis of a number of assumptions, expectations and projections and, as a result, are subject to uncertainty risk and may change due to both external and internal factors. The Company will assess the possibility of the implementation of ‘2020 Strategy’ and make any possible adjustments on an annual basis.

 

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