Dividend policy
The Annual General Meeting 2006 decided on the following new dividend policy.
The dividend payout ratio shall, in the long-term, correspond to 40-60 per cent of the profit for the year. However, at annual dividend decisions, the company's strategy, financial position and other financial targets shall be taken into consideration.
Financial goals
The Annual General Meeting 2006 decided on the following new financial targets.
Profitability
The owner's long-term profitability goal is 15 per cent on average equity after tax. Recalculated into the Group's requirement return on net assets (RoNA), this corresponds to 11 per cent before tax.
Cash flow interest coverage ratio after maintenance investments
The owner's goal is a cash flow interest coverage ratio of 3.5 to 4.5 times.
Rating
In July 2005 both Moody’s and Standard changed its outlook from stable till positive and Moody's upgraded its rating of Vattenfall from A3 to A2. Please click in the link for more information regarding Vattenfall’s rating.
Value creation
The profitability requirement set by the owner is recalculated to individual targets for value creation for each business unit. The difference between the value created by the business unit and this requirement is referred to as the Gap. If the result is less than the requirement, measures must be taken to close the gap. If the result exceeds the requirement, the business unit can look for profitable expansion possibilities.
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