Lamor Corporation Plc | Inside Information | December 19, 2024 at 10:15:00 EET
Insider Information: Lamor updates its long-term financial targets and strategy for 2025-2027
Lamor has updated its long-term financial targets and its strategy.
The aim for the 2025-2027 strategy period is to strengthen Lamor's position and achieve profitable growth in all market areas and product lines.
Lamor's vision is to become one of the world's leading environmental protection and recovery companies. Lamor has strong expertise in solving hydrocarbon based pollution and environmental challenges, which the company leverages through its global network built over decades. This is reflected in the company's long-term targets, which remain ambitious. They are based on the demand seen in the company's target markets as well as the company's growth potential during the strategy period.
Long-term financial targets (by the end of 2027)
- Growth: Increase revenue to EUR 170 million
- Profitability: Adjusted operating profit (EBIT) over 14% of revenue
- Dividend policy: Aim to distribute dividends, considering business development
- Capital structure: Suitable for the company's strategy, targets, and project portfolio by maintaining a strong balance sheet
Cornerstones of Profitable Growth
The demand for environmental services is expected to grow due to increased awareness, corporate and governmental focus on climate and biodiversity, tightening regulations, increasing geopolitical risks, and widespread legacy pollution.
- The company's environmental protection equipment and service sales, built over more than 40 years, will be grown globally by enhancing and expanding sales.
- The soil remediation and material recycling product lines will grow with a more focused approach, concentrating the company's growth efforts on strengthening Lamor's position in existing bridgehead markets and their surrounding regions, where the greatest potential is seen.
- In terms of chemical recycling of plastics, Lamor sees strong market demand and continues progressing towards the production phase of its first concept plant. Upon reaching this, Lamor will during 2025 assess how to best scale the business towards the 100-tonne target.
- Profitability will be improved by focusing and increasing efficiency sales, offerings, and operations.
"We are already one of the world's leading companies in our environmental protection equipment and service business and will further strengthen this position. Additionally, over the past few years, we have successfully established bridgeheads in new markets both regionally and in terms of our product lines. For soil remediation and material recycling business, we will focus on strengthening Lamor's market position and expanding the business. We will do this by focusing sales and expanding and enhancing Lamor's partner, reseller, and distributor network. This is also supported by the market area SVP appointments announced previously, which have increased customer and market understanding in our Group Leadership Team," said Johan Grön, CEO of Lamor.
Updated strategy based on lessons learned in the previous strategy period
The major service agreements won during the previous strategy period have been strategically important for Lamor. Through them, the company has gained unique experience and references for implementing comprehensive long-term service projects. At the same time, major service projects have opened access to new, wider markets, significantly increased the company's installed equipment base, and created and expanded partnerships central to Lamor's business model.
"For example, in the Middle East, our project with the Saudi Arabian National Center for Environmental Compliance (NCEC) and the agreement with NEOM Company, which was updated to an equipment delivery last week, have expanded Lamor's installed equipment base by tens of millions of euros in a key growth market. Both significantly support our environmental protection business in the long term," said Grön.
During recent years, the major service projects have tied up a significant amount of Lamor's financial resources, key personnel, and diverted attention from new sales. In the upcoming strategy period, Lamor will focus on expanding its customer base and order backlog.
"Compared to previous, Lamor's updated strategy is not primarily built on major service projects. In the soil remediation and material recycling product lines, our goal is to significantly expand and diversify the company's customer base. In the project business, we are more focused on medium-sized long-term projects. Larger projects are also possible to take on during the strategy period, but we will explore more flexible financing models for them," Grön described the key changes.
The company has achieved a turnaround in several areas during 2024
During 2024, Lamor has clarified its organisation's operating models, renewed the Group Leadership Team, completed several internal development projects, and worked on the strategy update. Towards the end of the year, the company has also succeeded in reducing the committed working capital, which had increased due to the Kuwait project. This has strengthened the company's financial position, which is also supported by the recent changes in the NEOM agreement.
"I believe we are now in a much stronger position to create broader, sustainable profitable growth and enable our customers' environmental protection investments in a commercially successful way than at the beginning of the previous strategy period. In 2025-2027, we aim to show that we can create value for our shareholders, customers, and partners with our unique business model. Lamor's mission is to clean the world, and globally we are still very far from 'peak clean up'," said Grön.
"To succeed in this, we need to show that the positive turnaround in new orders achieved this year continues. The amount of revenue outside major service projects has been growing in 2024. Additionally, during the first three quarters of this year, we have more than doubled the number of new orders from the previous year, even considering the change in NEOM booking. We will now continue this work with determination."
Further information
Johan Grön, CEO, Lamor Corporation Plc
+358 40 5464186, johan.gron@lamor.com
About Us
Lamor is one of the world's leading providers of environmental solutions. For four decades, we have worked to clean up and prevent environmental incidents on land and at sea.
Environmental protection, soil remediation and material recycling: Our innovative technologies, services and tailored solutions, ranging from oil spill response, waste management and water treatment to soil remediation and plastic recycling, benefit customers and environments all over the world.
We are capable of vast and fast operations thanks to our connected ecosystem of local partners, steered by our experts. We have over 600 employees in more than 20 countries. In 2023, our turnover was 123 million euros. Lamor's share is listed on the Nasdaq Helsinki (ticker: LAMOR). Further information: www.lamor.com
