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2. 
Developments in 2021

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2.1 Progress on the strategy
2.2 Financial targets
2.3 Financial affairs
2.4 Vision on sustainable value creation
2.5 People, culture and leadership

2.1 Progress on the strategy

During the Capital Markets Day we organised in March 2021, we presented our strategic plan called Step Up! The core aim of this plan is to accelerate the company’s growth through better utilisation of the potential of our portfolio of propositions. We want to make this happen by introducing a new way of working. A way of working that while maintaining the strengths of each of the business units (entrepreneurship and market focus) also mitigates the downsides (fragmentation and complexity). We have defined three strategic drivers for Step Up! that we believe will lead to the required way of working:

  • Radically clear
  • Always deliver
  • Full Nedap power
Ontwikkelingen 2021

2.2 Financial targets

Our financial plan sets the following financial targets towards 2025:

  1. An autonomous high-single-digit revenue growth .
    In 2021, revenue was up 9% on 2020.
  2. A growing operating margin towards 15% (excluding one-offs).
    In 2021, the EBIT margin came in at 11.1%, compared to 9.0% in 2020.
  3. Return on invested capital (ROIC) that outgrows profitability.
    ROIC was 36% in 2021, an increase compared to 2020 (28%).

To ensure our long-term perspective and focus on growth and innovation we need a strong financial position:

  • A solvency rate of at least 50% and Net debt/EBITDA of a maximum of 1.5.
    The solvency rate was 61% in 2021 (62% in 2020), while net debt/EBITDA came in at -0.5 (-0.4 in 2020).
  • Profits are paid out as dividend to shareholders, after deduction of the amount needed for investments in profitable growth and the intended financial structure .
    Given the organisation’s increased capital efficiency and scalability, we expect high pay-out ratios over the coming years too. The pay-out ratio for 2021 was 106% of profit.

2.3 Financial affairs

Read about the financial developments during the year under review.

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2.4 Vision on sustainable value creation

Sustainability has been an integrated part of our mission of creating Technology for Life for years. We have, for example, been using only green power since 2014, we have installed heat pumps at our head office and solar panels on our roofs, while also pursuing a responsible procurement policy that respects both people and the environment. In 2021, we have taken steps to make our sustainability vision and policy explicit. While the expectations and requirements of our external stakeholders were an important stimulus, the intrinsic drive and needs of Nedap employees are what ultimately impelled us to work out a clear and ambitious vision with concrete ambitions.

Developments on material topics

Material topic 1. Enabling people to develop and thrive

  • Employees first
  • Diversity and inclusion
  • Long-term employability

Material topic 2. Minimising the environmental impact of our operations

We are aiming for net zero carbon emissions by 2030. Needless to say, we are not overlooking other causes of adverse impact, such as our waste production and use of resources. The diagram below shows the development of scope 1 and scope 2 carbon emissions.

Afbeelding Co2 uitstoot ENG

Material topic 3. Creating a value chain with minimum adverse impact

The extent of the adverse impact of our products occurs at Nedap itself to only a limited degree. Most of the impact comes from the production and the use and disposal of our products, which are activities that we have largely outsourced or that occur away from our premises. Our efforts in the context of this material topic will be targeted on minimising the adverse impact.

Material topic 4. Helping customers go green with our products
and solutions

Not only is it key that we decarbonise our operations and our value chain, we as a company are also in a position to help our customers go green in their operations with our propositions. If our products have a positive effect on our customers’ emissions, we are increasing our impact.

Although our propositions already produce positive sustainability effects in many cases, our ambition is to take this to a higher level. This is why we want to fully integrate sustainability into the strategic ambition of our propositions. Implementation is specific to each business unit.

Mensen cultuur leiderschap

2.5 People, culture and leadership

In Chapter 1, we described that the quality of our people, our culture, and our leadership vision are the basis of what sets us apart. Given that these elements are interrelated, we need balance between the three of them as they are further developed.

Our people

Like in 2020, the ongoing COVID-19 pandemic had a major impact on our working practices at Nedap. Less in-person contact leads to different requirements for the way we work together. It forced managers to put time and effort into ensuring that everyone was kept informed on relevant developments at the company.

Recruitment

Sourcing talented new employees continues to be as essential as ever for the realisation of our growth plans. In 2021, we stepped up our recruitment activities and made them more professional, alongside working on our reputation of being a great place to work. We organised another successful edition of our Masterclass and started the seventh Nedap University class started last year. Also, we launched the Greetings from Groenlo referral campaign, and in the Talk to a developer programme, we deployed Nedap developers to attract experienced people from outside our company. Finally, we launched the Nedap Sales Academy to recruit and accelerate the development of commercial talent.

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Training and development

In the 2021 financial year, we continued to invest in our employees’ training and personal development including the Nedap Introduction training (for new hires), the Nedap Survival Skills training focused on personal development, and the Personal Leadership programme.

Leadership and leadership development

The quality of leadership at team, department, business unit or Nedap level is a decisive factor in our company’s success. Further developing this leadership is, therefore, a key priority within Step Up!, our strategic plan. In 2021, the Leading Business programme was used successfully to help a new group of business unit leaders grow into their new roles faster.

Also in 2021, the first groups of managers started the Team Captain programme, a practical training programme focused on leadership.

Afbeelding Employees ENG

© 2022 Nedap N.V. All rights reserved

Disclaimer. This online annual report is a non-official copy of our original and official 2021 annual report. The independent auditor (PwC) has not certified this copy as being a true copy of the official version, neither are they under an obligation to do so. Therefore, the audit certificate does not relate to this copy, but solely to the official version. In the event of any inconsistencies in the interpretation, the official annual report shall prevail. No rights can be derived from this version. The audited and approved version is available in ‘Annual report 2021 - ESEF package’ on https://nedap.com/investors/publications/.

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