Bilbao, May 26th, 2016–– CIE Automotive has presented today its Strategic Plan 2016-2020 with the commitment of doubling its net profit in five years’ time via organic growth, achieving over EUR 250 million and allowing a shareholders’ remuneration of over EUR 300 million during this period of time.
On the one hand, this organic growth will be based on an accumulated increase of revenues of around 7% during these five years, associated both to its growing presence in strategic markets and customers and to the development of high value added components, for which CIE will open and/or expand almost 20 plants around the world, mainly in NAFTA and Asia.
On the other hand, this organic growth will be accompanied by a new level of return on net assets (RONA) between 20% and 25%, on account of an EBIT margin that will rise to a 12% over sales due to the expected productive improvements in the Group’s plants and also to an exigent investment level of approximately 6% over sales.
This organic growth scenario implies normally a high level of cash generation that enhances CIE to commit a net financial debt / EBITDA ratio of around 0.5 times at the end of the period.
And it is exactly this solvency of the balance sheet and additional leverage capacity, what allows the Group to have inorganic growth besides the pure organic growth.
In this sense, CIE Automotive will integrate during the next five years new companies that will consolidate the Group as one of the most important global players, new companies that will contribute with around EUR 1,000 million additional revenues (EUR 700 million in Automotive Unit and EUR 300 million in Dominion), always with a healthy balance sheet and with the objective of a net financial debt / EBITDA ratio not exceeding 2 times at the end of the period.
To face these challenges, both CIE Automotive Group’s projects have a very differential business model which has proved its soundness and success during the last 20 years: industrial vocation combined with financial mindset, strong customer, geographical and product diversification, focus on process efficiency, decentralization and simplification of an entrepreneur-thinking-chain-of-command, strict opportunity and return policy concerning acquisitions.
A business model to which new elements are now added, such as a very exigent reputational level, an active human resources policy that allows sustaining growth and generational succession or a major digital advance towards 4.0 factories.
All of it based on 2015, with revenues over EUR 2,600 million, EUR 244 million EBIT (9.3% over sales), EUR 129 million net benefit, 17% RONA, EUR 670 million net financial debt (1.8 times to EBITDA) and almost EUR 2,000 million market capitalization.
