AGM 2009: Tognum CEO Heuer expects further medium-term growth for the company
Posted on June 09, 2009
Tognum, a specialist for propulsion and power solutions, sees itself in the medium term on a course of growth again.
- Diversified business portfolio also paying off in the economic crisis
- Five strategic initiatives establish the focus of Group’s future development
- Company plans to distribute an “appropriate dividend“ for the 2009 financial year
Friedrichshafen, 9 June 2009. Tognum, a specialist for propulsion and power solutions, sees itself in the medium term on a course of growth again. Volker Heuer, Chairman and CEO of Tognum AG, explained in the report he presented to the company’s Annual General Meeting today in Friedrichshafen: “Our medium-term goal is to continue to grow on average faster than the market and average a double-digit return on sales.“
As a result of the difficult economic situation worldwide, Tognum is currently monitoring declining markets, Heuer reports. Corporate growth will also slow down mid-term as a result compared with the previously successful years. “Our advantage – and this is not only true in the current exceptional economic circumstances – is that we operate in more than 20 different application fields for large off-highway diesel engines as well as onsite energy systems, and we do that all over the world in regions that are relevant to the business in which we are involved. With our diversified business portfolio, therefore, our view is that we have the opportunity to emerge from this crisis stronger then ever“, added Heuer.
In response to the global recession, Tognum at the end of last year developed an action package, known as the Robust Action Plan, to stabilise the business. The plan includes targeted staff and budget cuts but not standard reductions on the “one size fits all” principle. “Under no circumstances do we want to delay key projects. Quite the opposite in fact: we have once again significantly increased the budget planned for new developments in 2009 compared with the previous year“, Heuer stressed. ”With the Robust Action Plan, we have prepared the ground and are now ready to continue to pursue our corporate strategy at full power.“
This is an area where Tognum is focusing on five strategic initiatives: expansion of after sales, decentralised energy systems and propulsion, plus regional expansion and the extension of the product portfolio, as Heuer explained. In after sales, for example, Tognum last year was able to expand its spare parts and remanufacturing business. The company has also extended its product portfolio with the addition of many new products and technologies – including the new Series 1600 in the lower power range, which was presented at the Annual General Meeting, too. In its Onsite Energy business, Tognum will be supplementing its portfolio in the second half of 2009 with the addition of diesel-based complete systems for energy generation. The company also intends to drive expansion regionally in countries such as India, Japan, Eastern Europe and both Central and South America. In “Propulsion“, the new, fifth initiative, which was only introduced at the end of March, Tognum is focusing primarily on innovative solutions such as hybrid technology.
For the recent 2008 financial year, the Executive Board and the Supervisory Board of Tognum AG propose that the shareholders today (9 June 2009) approve an increase in the dividend of around 17 per cent to 0.70 euros per share. From today’s point of view, for the current financial year, Tognum intends to remain true to its dividend policy and pay a dividend of between 30 and 50 per cent of the Group net profit. The company plans to distribute an “appropriate dividend” for 2009, too, said Heuer.
The manuscript for the speech of Tognum’s CEO Volker Heuer to the stockholders' meeting is available at the company’s website www.tognum.com on the Investors pages (Annual General Meeting).