Overview about Indirect Financial Targets
|Annual energy efficiency gains of 150 GWh in 2019/2020 and 80 GWh in 2020/2021||GWh||316||215||-||Climate, energy & environment|
|100% of relevant activities covered by ISO 50001 energy management system by 2019/2020||%||100||100||+0%-p.||Climate, energy & environment|
|100% of relevant activities covered by ISO 14001 environmental management system by 2019/2020||%||93||100||+7%-p.||Climate, energy & environment|
|Sustainable adjusted R&D intensity of around 2.5%||%||3.1||4.0||-||Technology and innovations|
|15% share of women in leadership positions by 2019/2020||%||12.5||11.2||-1.3%-p.||Employees|
|Accident rate of 2.0 by 2020/2021 and improvement of at least 10% p.a.||accidents per million hours worked||3.0||2.9||-3%||Employees|
|100 supplier sustainability audits each year||#||123||86||-30%||Responsible Procurement|
|1) Original targets at group level including Elevator Technology||2) On a comparable basis w/o Elevator Techhnology||2) On a comparable basis w/o Elevator Technology|
Under the strategic realignment we aim to develop thyssenkrupp into a high-performing “Group of Companies” with independent businesses, competitive profitability and cash flow generation and a lean holding company.
Our goal is for thyssenkrupp to sustainably generate positive free cash flow before M & A and create value.
To this end, we strive to increase the performance of all our businesses through systematic performance management. We want the businesses to be among the best in their respective sectors in terms of performance and accordingly generate positive earnings and cash flow contributions for the group. We aim to increase profitability at least to competitive levels or above the cost of capital and grow on this new efficiency basis. Capital is to be allocated within the group on the basis of expected value added. All targets are to be consistently backed up by concrete action plans. The management teams of the businesses bear full entrepreneurial and P&L responsibility. This is also reflected in the compensation systems of the management teams of our businesses.
Against the background of the uncertain development of the economic environment – especially in the short term – as well as the realization dates of our major portfolio measures, we cannot yet reliably specify values and timing for achieving these goals.
Sustainability and indirect financial targets
Sustainability is a core component of our corporate strategy. Strategic sustainability management is coordinated by the Technology, Innovation & Sustainability department. Together with other departments and the segments it continuously identifies the requirements of our stakeholders and develops corresponding targets and measures to improve our performance. Sustainability activities at thyssenkrupp are managed by the Sustainability Committee. It consists of the thyssenkrupp Executive Board, the CEOs of the segments, and the heads of various corporate functions, and decides on measures and on our Indirect Financial Targets (IFTs). Implementation is the responsibility of the corporate functions and the segments, who report regularly on progress.
Indirect Financial Targets for continuous improvement
The Sustainability Committee has set Indirect Financial Targets in the areas of technology and innovations, environment, climate, energy, purchasing and people. For fiscal year 2019 / 2020 target achievement affects the amount of the one-year variable compensation (Short-Term Incentive) of the thyssenkrupp Executive Board and the segment boards via the so-called sustainability multiplier (for more details see the compensation report). The IFTs for the establishment of environmental and energy management systems were achieved. The target for energy efficiency was exceeded. R&D intensity is comparatively higher due to the sale of Elevator Technology, the decline in sales, and impairment losses. The proportion of women in leadership positions was increased continuously, but the target was missed by 3.8% points. The number of sustainability audits carried out was below the planned target mainly due to the effects of the coronavirus pandemic. The accident frequency rate, based on the adjusted prior-year figure of 3.0 related to the continuing operations, improved slightly.
For the coming reporting year we are aiming for energy efficiency gains of at least 80 GWh. The IFTs for R&D intensity and accident frequency have been adjusted due to the sale of Elevator Technology; the target for R&D intensity will be around 3.0% on a sustainable basis in the future, while accident frequency is to be improved by 0.1 to 2.8 in fiscal 2020 / 2021. We have a new target for increasing the number of women in leadership positions: 16% women in leadership positions throughout the thyssenkrupp group by fiscal year 2024 / 2025. Sustainability audits will remain a key focus in the coming reporting year and a new target of at least 60 audits has been set. From fiscal year 2020 / 2021 the compensation-relevant consideration of sustainability activities at thyssenkrupp is to be gradually integrated into the long-term compensation of the Executive Board via the IFTs. Details on the individual Indirect Financial Targets can be found in the sections of this management report listed in the table.