Operating margin > 10%
Over a business cycle, the operating margin should on average exceed 10%. BillerudKorsnäs operates in an industry that historically has tracked a cyclical pattern, with corresponding variations in earning capacity.
The operating margin was 5% in 2012, compared with 10% the previous year.
Return on capital employed > 13%
Over a business cycle, the return on capital employed should on average exceed 13%. BillerudKorsnäs shall ensure a return corresponding to the shareholders’ return expectations while the cost of the company’s debt is covered with a margin.
Return on capital employed was 8% in 2012, compared with 20% the previous year.
Net debt/equity ratio < 0.9
The net debt/equity ratio should be less than 0.9. BillerudKorsnäs’ business is influenced to a large extent by general economic conditions, which means that the operating risk is considerable. Strengthening the financial position in good years is therefore essential in order to sustain the company in bad years.
The net debt/equity ratio was 0.85 in 2012, compared with -0.05 in the previous year.
Dividend policy 50% of net profit
Over an economic cycle, the dividend should average out at 50% of net profit. The dividend paid to shareholders will be dependent on, among other factors, BillerudKorsnäs’ profit level, financial position and future development opportunities.
The Board’s proposal at the 2013 AGM is for a dividend per share of SEK 2.00, which equates to a dividend payout ratio of around 61%.