Vacon's new long-term financial targets, redefined strategy and vision
Vacon Plc, Stock Exchange Release, 28 November 2013 at 7.45 (EET)
Vacon`s Board of Directors has approved the company`s new long-term financial targets and redefined strategy for the years 2014-2020.
Vacon`s financial targets for the years 2014-2020 are as follows:
Growth: The target is to achieve an average annual revenue growth of over 10%. The growth target is based on growing the business organically in a market environment where the AC drives market grows clearly faster than the average Gross Domestic Product (GDP). Selective acquisitions can be used to further accelerate the growth.
Profitability: The long-term profitability target is to achieve a sustainable EBIT margin level of 14%. Vacon focuses on growth and on measures that improve the company`s efficiency in the long term and thus deliver a higher absolute EBIT and shareholder value.
Vacon does not consider the long term financial targets as market guidance for any given year during the period 2014-2020. Market guidance for 2014 will be disclosed in Vacon`s Q4/2013 interim report on 6 February 2014.
Strategic focus and competitive edge
Vacon`s strategy is based on a 100% focus on AC drives. The AC drives market provides a good growth opportunity for the company also in the future.
Vacon will further build its broad product, application and service portfolio. It will introduce medium-voltage AC drives and system drives. The company will also expand its service business.
As a focused company, Vacon will further expand its portfolio of customer industries. This provides stability over the cycle. Vacon will also accelerate growth by expanding its operations to new geographical areas and by focusing on high market growth countries.
One of the cornerstones of Vacon`s strategy is multi-channel sales. Multiple channels are needed to bring the wide product offering to all countries and selected customer industries. Channel selection is optimized based on individual country characteristics.
In addition to systematically improving operational efficiency, the main drivers for profitability are the best cost country sourcing, design to cost, regional production and service business growth, as well as differentiation with application software and cloud based services.
Vacon`s differentiation and competitive advantage are based on four elements: Product leadership, Profound application know-how, Extensive services and Unique organizational culture.
Vacon`s new vision - The Drives Family
Vacon has defined a new vision for its operations. The vision was created together with our personnel in a process which started in the spring of 2013.