OUR BUSINESS
Targets and outcome
Financial targets
Our financial targets ensure the Group is managed with the aim of achieving healthy earnings, generating adequate cash flow and keeping financial risk at an acceptable level. These financial targets reflect Nolato’s strategic focus on a well-balanced Group structure with three business areas and advanced market positions, which ensures the financial flexibility to make new acquisitions and provide good potential dividends for shareholders.
EBITA
The target for the EBITA margin is to exceed 10% over a business cycle.
10%
Target
8.4%
Outcome 2022
10.9%
five-year average
Cash conversion
The target is to achieve cash conversion of more than 75% of EBIT over a business cycle, measured as the ratio of cash flow after investment to EBIT.
>75%
Target
1%
Outcome 2022
54%
five-year average
Equity/assets ratio
The target for the equity/assets ratio is to exceed 35% over a business cycle.
>35%
TARGET
54%
OUTCOME 2022
49%
FIVE-YEAR AVERAGE
Growth target
OUTCOME 2022
Nolato aims to exceed the level of growth within each market segment.
8%
Medical Solutions
–46%
integrated solutions
6%
industrial solutions
Medical Solutions
The sales growth in 2022 was 8%, adjusted for currency. Long-term volume growth for this business area’s market segments and applications is assessed to remain around 4–5%. The surgery area experienced good growth, while in vitro diagnostics (IVD) volumes were lower due to pandemic-related inventory adjustments. The charging on of higher costs contributed to higher sales.
Integrated Solutions
The sales in 2022 decreased by some 46%, adjusted for currency, due to low Vaporiser Heating Products (VHPs) volumes following Russia’s invasion of Ukraine, a change in a customer’s sourcing strategy, and the halt in sales for much of the fourth quarter due to the lack of a production license in China. EMC sales increased considerably through good growth in telecom and significant relative growth in automotive.
Industrial Solutions
The sales growth in 2022 was 6%, adjusted for currency. Volumes decreased somewhat, although the charging on of higher costs contributed positively. Demand was solid in most market areas, but deliveries of products to areas in the consumer discretionary sector were lower towards the end of the year.
Sustainability targets
Nolato has introduced long-term sustainable development targets covering social responsibility, environmental responsibility and business benefits. These targets are linked to the UN’s Sustainable Development Goals and the 2030 Agenda.
The background and outcomes of the targets are described in detail in the annual report for 2022 on pages 44 and 122 et seq.