Financial targets

This summary of the outcome of the financial targets can be found in the annual report for 2018

15% Revenue growth. Revenue growth has been positive since the trend reversal in 2015. This is partly a consequence of good underlying market growth, but above all, a result of measures implemented to increase sales. The results for 2016 and 2017 have been strongly impacted by the acquisition of Grolls that was completed in June 2016. The growth of 5.7 % in 2018 was adversely affected by lost customer contracts and a temporary stock shortage in the Grolls chain in Sweden, while the acquisitions completed made positive contributions.

11% Operating margin. Operating margin has gradually been
improved from 3.6 % in 2014 and 2015.
Operating margin for 2018 has further
increased from 9.2 % to 10.0 %. This
positive development can be explained by
a growth in sales, better product mix and
ongoing price adjustments.

25% Return on average shareholders’ equity. Swedol’s return on average shareholders’ equity has continued to move in a positive direction since 2014. This positive growth has continued in 2018 and the return on average shareholders’ equity amounted to 21.6 %, which was a consequence of rising operating profits. The variation in the level of return is primarily due to the growth in operating margin.

40% Equity ratio. The equity ratio target of at least 40 % has been achieved for the entire current five-year period. In 2016, equity ratio fell following the acquisition of Grolls. However, equity ratio was restored via a new share issue and reached 42.2 % at the end of 2016. The equity ratio was further strengthened in 2018 and amounted to 49.6 % at the end of the year. This strong equity ratio provides a solid financial base for continued growth and gives us the means to take advantage of future acquisition opportunities. Against the background of the effects of IFRS 16, our equity ratio target has been revised effective from the beginning of 2019.

30– 50% Share dividend of net profit. The proposed dividend for the year comprises 39.6 % of the net profit for the
group, which lies within the range of our established policy. The dividend for 2014– 2015 was above this established policy. The current capital structure and profitability are assessed as offering substantial leeway for the proposed dividend.