Howden has established clear financial and operational targets to sustain its current strong performance and improve adjusted operating margin.
Key Drivers
End-user diversification
Aftermarket revenue growth
Capitalise on strength in compressors
Further development in BRICs and other emerging markets
Focus on resource driven economies - South Africa, Australia
Further development of contract execution and supply chain
Strategic objectives
Organic revenue CAGR of 10%+
Medium to long-term adjusted operating margin target of 14%
Target 1: Organic revenue CAGR of 10+ per cent
To be achieved through:
- Growing its exposure to end-user segments (such as coal-fired power and oil and gas)
- Leveraging strengths in BRIC and resource-based economies (with market-leading positions in China, India, Brazil and South Africa)
- Developing products to enter new-growth markets (such as carbon capture and storage and coal bed methane)
- Continuing the strategic focus on the aftermarket business, including expansion into new regions (especially China)
Target 2: Medium to long-term adjusted operating margin of 14 per cent
Uplift from current margin range (11%-12%) to 14% to be achieved through:
- 1.5% increase - operational leverage
- 0.5% increase - supply chain and LEAN manufacturing
- 0.4% increase - improved margins from Thomassen synergies
