Lagercrantz prepares for continued expansion
Lagercrantz Group’s Board of Directors has today decided to approve the Management’s proposal for continued expansion. This means that the strategic direction and the financial goals are clarified, a reorganisation of the divisions and an increased focus on sustainability.
Lagercrantz’s business concept has been successful over many years and represents a strong platform for future expansion. During the past 10 years, the share has generated a return of 30 percent per year including dividends. The expansion has been financed by cash flows from the operations and has been characterised by acquisitions with an increased proportion of niche product companies, which has resulted in an ever-higher margin content and better conditions for organic growth, particularly for exports.
With the aim of preparing the Group for continued growth and a transition from a successful medium-sized company into a well-established larger Group, a programme has been developed under the name “Lagercrantz towards one billion”. The vision is to build a strong B2B Tech Group with leading businesses in different niches and, by achieving the financial goals in five years, build a Group with SEK 1 billion in profit.
The vision is to be a sustainable provider of value-creating technology based on market-leading positions in expansive niches. The ambitious financial goals for earnings growth (EBT) are in excess of 15 percent annually over a business cycle, with a return on equity of not less than 25 percent and a policy with a dividend payout ratio of 30-50 percent of the net profit. The ambition is that at least one third of the growth shall be generated organically and the remainder through acquisitions of approximately 5-8 companies per year. The acquisitions will predominantly focus on niche product companies in northern Europe. The vision and goals shall be achieved through a reorganisation where the businesses in the Group, starting from the 2021/22 financial year, are being divided into five divisions (compared to today’s four). The focus on attractive growth segments will hereby be clarified, which will create dynamism and clarity internally for employees, to the stock market and the acquisition market. In Appendix 1, the five divisions are described in brief.
Vision and goals will also be achieved by the Group continues to develop its capacity within M&A. The acquisition market is still estimated to be favourable and there are many interesting companies to add to the Group’s portfolio. The Group therefore intends to continue to build culture and competencies around M&A, and to further develop its network and resources internationally in line with the Group’s expansion. Prioritised markets are the Nordic countries, Germany, Poland, Benelux and the UK. Finally, an increased focus on sustainability represents a cornerstone in the future Lagercrantz. This will create business profit in the form of growth opportunities and attractiveness in the stock market, the acquisition market and among existing and future employees. Over the past years, the Group has advanced its positions in the area and the work is now being concretized through the goals in Appendix 2. The starting point is the creation of business and societal benefits and how the Group acts sustainably in all stages, including in its investments.
Stockholm, 18 March 2021
Lagercrantz Group AB (publ)
For further information please contact:
Jörgen Wigh, President and CEO, Lagercrantz Group AB, phone: +46 8 700 66 70
Kristina Elfström Mackintosh, CFO, Lagercrantz Group AB, phone: +46 8 700 66 70
This information is such that the Lagercrantz Group AB (publ) is obliged to make public in accordance with Nasdaq Stockholm’s Rulebook for Issuers. The information was submitted for publication on 18 March 2021 at 07:45 CET.
ABOUT LAGERCRANTZ GROUP
Lagercrantz Group is a technology group that offers world-leading, value-creating technology, using either proprietary products or products from leading suppliers. The Group consists of almost 60 companies, where each company is focused on a specific sub-market – a niche. Lagercrantz Group is active in nine countries in Northern Europe and in China, India and in the USA. The Group has approximately 1,500 employees and annual revenue of approximately MSEK 4,000. The Company is listed on Nasdaq Stockholm since 2001. Read more on www.lagercrantz.com