1.6 Strategic ambition & financial goals

We aim for structural growth to secure a leading position in our markets and create long-term value. In this section, we report on our progress toward our Step Up! financial ambitions, and we lay out our objectives for the period 2025-2028 as announced at Nedap's Capital Markets Day. 

One of the key principles of Step Up! is that we continuously and simultaneously work on strategy development and implementation. Our agility enables us to lead technical transformations and meet evolving market needs. At the same time, we have set a clear direction for our company and committed to ambitious targets for organic revenue growth, operating margin and return on invested capital (ROIC). These targets are supported by our Create & Scale growth strategy. We report on our 2024 performance in section 2.1 Progress on our strategy.

Financial objectives

The Step Up! strategy sets out our financial ambitions toward 2025, including an EBIT margin growing toward 15%, albeit with a one-year delay in reaching this specific target.

• Revenue growth
  Revenue that develops toward annual high-single-digit autonomous growth.

• Operating margin
  An operating margin, excluding one-off items, that rises toward 15%.

• ROIC
  Return on invested capital that outgrows profitability.

During the Capital Markets Day, held on 7 November 2024 at the Nedap Campus in Groenlo, the Netherlands, Nedap announced the following financial objectives for the period 2025-2028:

• Revenue growth
  Achieve high-single-digit, organic revenue growth.

• Operating margin
  Grow the operating margin, excluding one-off items, toward the mid-teens range.

• ROIC
  Attain a return on invested capital of at least 30%.

In recalibrating our targets, we underscore our ambitious organic growth objectives, while accounting for market volatility by setting a broader range for our operating margin target. In addition, we have adjusted and simplified our ROIC target to reflect Nedap's limited need for growth in invested capital, supported by the optimization of working capital and our continued transition toward an asset-light SaaS business model.

Financial position 

We rely on our financial strength to make the investments in our workforce, innovation and commercial capabilities needed to achieve market leadership and deliver long-term value for people, the environment and our customers. We strive for our financial position to meet the following criteria:  

• A solvency rate of at least 50% and a net debt-to-EBITDA ratio of no more than 1.5. Temporary deviation from this target is possible for strategic reasons.

• Profits are paid out to shareholders, after deduction of the amount needed for investments in profitable growth and the intended financial structure.

Science Based Targets initiative 

In 2024, we made a public commitment to the Science Based Targets initiative (SBTi). We announced our objective to reduce GHG emissions in line with the Paris Agreement's goal of limiting global warming to 1.5°C above pre-industrial levels for operational (Scope 1 and 2) GHG emissions. For value chain (Scope 3) GHG emissions, we aim for a well below 2°C target. The validation process for our GHG emission reduction targets by SBTi will begin in 2025.