We aim to make the best cable solutions for our customers, and to be the first-choice partner for our stakeholders. Draka’s mission is to be one of the world’s leading cable manufacturers, with a sound financial basis, a balanced geographical spread and an extensive, technologically advanced product portfolio. We also take our social obligations seriously, by investing in sustainable technology. In these ways, we seek to be an attractive partner for all our stakeholders: customers, employees, shareholders, financiers and suppliers.
Organic growth, selective acquisitions
Following a 10-year period of expansion, much of it based on acquisitions, Draka’s strategy is now focused on achieving further growth based on our core competencies. In particular, this means expanding our position in today’s leading growth markets, particularly the special-purpose cable segment and selected geographical areas, such as China.
We will continue to optimise our organisation, focusing on the relevant core activities and enhancing the efficiency and effectiveness of our manufacturing base. We also aim to expand our activities in the special-purpose cable segment and in specific geographical areas, both organically and by means of acquisitions, and to expand the range of services and products we offer by extending our core activities. We will also continue to invest in the research and development of materials, cables and systems – the foundations for innovative solutions – and, working with key customers, maintain and expand our leading position in the fields of research and development and application engineering.
Financial goals
Draka’s strategic approach is aimed at increasing its profitability, generating an optimum free cash flow (definition: cash flow generated from ordinary operations taking account of a required level of investment) and strengthening its balance sheet position. In the medium term, Draka aims for ongoing improvement in profitability through a combination of organic growth, acquisitions and cost-reduction programmes. Despite a good spread of activities over the different customer groups, Draka’s profitability in any given year is determined partly by current economic developments. Draka does not, therefore, set itself a given medium-term target, but expects an average operating margin over the economic cycle (of 6–7 years) of more than 5% of revenues.
Other important financial objectives for the medium term:
- Regular maintenance and replacement investments in intangible assets and
property, plant and equipment matching amortisation and depreciation. In line with
Draka’s strategic principles, investments in growth markets (special-purpose cable
segment and emerging markets) may be undertaken which could result in total
investment exceeding depreciation in any given year.
- Healthy interest coverage, implying EBITDA/interest ≥ 3.5 (2008: 6.8).
-Stabilisation of operating working capital (defined as inventories plus trade
receivables minus trade payables) at 16–18% of revenues (2008: 14.4%).