STRENGTHEN THE STRENGTHS

The INDUS Group currently comprises almost four dozen companies that have enjoyed success in their markets with their core skills over several years. We want this to remain the case even as they face the new challenges the future brings. Under the guiding principle of “strengthen the strengths” INDUS will be refining the support it offers the portfolio companies – with a strict management structure in the holding company that is based on expertise and increased transparency.

Previously all members of the Board of Management were involved with the direct support of individual portfolio companies, and the companies assigned to the members of the Board of Management may have been in different segments. With the level of momentum on the markets, however, it was important to us that the members of the Board of Management were more closely involved with their own portfolio companies and gained a deeper understanding of their fields. This is particularly relevant in light of the growing number of portfolio companies and INDUS’ ambitious growth targets. The issues have become more complex and directions have to be more precise. It is also about speed and that requires in-depth knowledge of the sector.

With the introduction of the segment management model, INDUS is adapting to these circumstances. In the future, each of the segments will be clearly assigned to one member of the Board of Management. The Board member will be supported by portfolio company controllers who will also only support portfolio companies from just one segment. That means one member of the Board of Management manages one segment. This member is the expert and maintains close contact with the companies in the segment, providing out-of-the box ideas. They will boost the companies’ strengths and promote the exchange of information among the companies in the segment. The aim here is to stimulate growth in the relevant future fields and benefit from current megatrends.

The central functions of the Chair of the Board and the Chief Financial Officer will be separated from the segment management to strengthen the strategic and economic overall management of the Group. The current assignment of responsibility of the Materials segment to the Chair of the Board will be discontinued in the future. All members of the Board of Management will remain active in the overall Board of Management and decide together on topics material to the Group as a whole. This includes acquisitions and investment budgets for each of the segments. Questions about investments that the individual portfolio companies will make will be made by the member of the Board of Management responsible for the segment. This Board member has close contacts with the companies and has the necessary knowledge of the market. This will in turn optimize the allocation of funds.

What will change for the managing directors in the portfolio companies? They will continue to have complete operational responsibility. In return they will have support from the member of the Board of Management that is deeply involved in their field and sector. The member of the Board of Management responsible for their segment will continue to offer field-specific and strategic support, but also with closer management of topics that will be of relevance in the future. At the same time, the managing directors will maintain close contact with the other managing directors in their segments, making it easier for them to pick up on market trends, develop these in their networks and thereby generate profitable growth.

PARKOUR perform still includes the four strategic initiatives of “Strengthening the Portfolio Structure,” “Driving Innovation,” “Improving Performance,” and “Striving for Sustainability.” Each member of the Board of Management will be pushing their own strategic initiatives through the Group in the portfolio companies. This cross-sectional function strengthens the success of the entire Group.

Free cash flow will be added as an additional key figure. This increases the transparency regarding the financial flexibility the Group has – for acquiring further high-margin specialists, paying interest, and reducing debt, or for dividend payments. At the same time, it provides a good overview of the value contribution made by the segments as well as individual portfolio companies. This means it can also act as an incentive. In addition to EBIT, free cash flow will become a relevant figure for bonus payments in the remuneration of the managing directors.

INDUS’ new management structure promotes the development of the segments in terms of the future fields – which in turn will lead to higher visibility on the market. Each member of the Board of Management will represent their own segment to the outside world. This will contribute to other companies in the sector recognizing INDUS even faster as an attractive partner and expert in the sector. When it comes to looking for new targets, this will no doubt prove to be another important advantage, as INDUS intends to keep growing through future-oriented acquisitions.