PARKOUR perform
EIN UPGRADE FOR PARKOUR More focus on future fields, clearer contours in the portfolio, and more in-depth support – INDUS boosts intensity of portfolio development with PARKOUR perform.
THE WORLD OUT THERE IS CHANGING …
“Zeitenwende”. This word, which refers to a turning point in history, was chosen as the word of the year in 2022 by the Society for the German Language. It signalizes that the Russian attack on Ukraine has triggered the start of a new era. Following the coronavirus pandemic, the war of aggression has forced nations around the world to reposition themselves politically and economically for the second time in a row. Both the pandemic and the war have left considerable marks on the economy. How the world will develop in the years to come is difficult to say with so much upheaval and so much left in limbo.
Despite all uncertainty regarding the future, there are clear growth drivers when it comes to the further development of the economy: sustainability, mobility, urbanization, demographics, health – these and other megatrends are being driven by structural factors, and offer new opportunities for growth. The advance of digitalization is providing additional boosts. Digital technologies have massively advanced the structural changes in the economy in recent years and are continually opening up new opportunities for businesses. Technological revolutions are often based on cross-sectional technologies that are being implemented across sectors in multiple applications, and forming the basis for further innovations and increases in productivity.
… INDUS, TOO
The challenging market developments have left their marks on INDUS, too. In addition to technological change and a pressure to transform, sales and supply chain problems resulted in a crisis for the Automotive Technology division – despite rapid responses and comprehensive countermeasures. At the same time, three out of five segments were able to prove the strength of the SME industry by acting flexibly, making fast decisions and implementing new business ideas. In summary, the INDUS Group performed well overall, despite the challenging conditions.
INDUS intends to build on these strengths in the future, too, and the strategy program PARKOUR offers the perfect foundation to do so. The program’s four strategic initiatives remain unchanged. However, one thing became clear in the volatile market environment: In order to reach the goals we have set ourselves with PARKOUR, we need to speed things up. And certain works in progress that the Group was still trying to free up capacity for had to be dealt with immediately.
The result is the latest strategy update PARKOUR perform. Three fields of action are the focus of the update:
- More focus on future fields:
- The Group will focus its activities more sharply on current megatrends and future fields. INDUS will establish the three segments Engineering, Infrastructure, and Materials. The portfolio companies will develop and grow with clear technological focal points in these three segments. Successful – and sustainable.
- Clearer portfolio contours:
- INDUS will focus on industrial technology. The Board of Management will eliminate long-time loss-making companies from the Automotive Technology segment and dissolve it as an individual segment. The companies in the Medical Engineering/Life Science segment will be assigned to the newly established segment Materials.
- More in-depth support:
- The segments and the companies in the segments will receive more in-depth support in the future. Each member of the Board of Management will be responsible for one of the segments. Value-based management will be boosted.
- The segments and the companies in the segments will receive more in-depth support in the future. Each member of the Board of Management will be responsible for one of the segments. Value-based management will be boosted.
These measures were implemented at the beginning of 2023, and the new segment structure is now in place. The new management principles are having an impact and the sales processes for two companies in the former Automotive Technology segment have been initiated. To put it another way, INDUS has done some spring cleaning and created the basis to start afresh and build on the success achieved over the previous decade.
TARGETS: UPDATED
Just like the strategic initiatives, the targets basically remain the same. INDUS is aiming to generate Group sales of significantly more than EUR 2 billion by 2025 – despite withdrawing from the automotive technology industry. The ongoing acquisition of two to three companies every year is expected to contribute to achieving this target. An EBIT margin of at least 10% is to become a permanent goal.
Free cash flow will be used as a performance indicator to show developments in value. Free cash flow provides even more transparency regarding the available financing for the acquisition of further high-margin specialists. Our dividend policy remains the same, and up to 50% of the profit will go to shareholders following successful financial years. Sustainability is positioned as an overarching field of action in the Group’s canon of targets. Innovations in this field will open up opportunities for portfolio companies to position themselves successfully against the competition.
INDUS: THE HOME OF TECHNOLOGY-ORIENTED INDUSTRIAL SMES
With the PARKOUR perform strategy update, INDUS has refined its focus on industrial technology. This is where INDUS’ strength lies and what the Group is known for on the capital market. The spring cleaning was and is good for the Group. It has freed up space and will allow INDUS to drive value and yield growth. INDUS continues to promise companies in the Group and that join the Group to help them grow as technology and niche specialists. INDUS will expand the portfolio companies’ sphere of action and strengthen their networks. Buy, hold & develop – this basis for action and decisions remains at the heart of how INDUS creates value.