Kinnevik’s objective is to increase shareholder value, primarily through net asset value growth. In order to clarify Kinnevik’s strategy the Board of Directors of Kinnevik has decided to communicate financial targets. These reflect Kinnevik’s evaluation of its balance sheet structure, the criterias on which dividend payments to shareholders are based as well as the return targets on the portfolio companies.
Dividend policy
Kinnevik’s dividend policy is to pay out a high percentage of the ordinary dividends received from the listed holdings. Kinnevik’s ambition is to have an optimal balance sheet structure and to generate a steadily rising annual dividend.
Balance sheet
Leverage in Kinnevik should be used as a tool for finding the optimal capital structure and consequently maximise the shareholder return. The different segment targets are:
(i) Major Unlisted Holdings: Leverage of at least 3x EBITDA.
(ii) Major Listed Holdings: Leverage may not be above 25% of market value during a business cycle.
(iii) New Ventures: Leverage should be optimal for each individual company.
Return target
The target is that the average yearly internal rate of return (IRR) on all investments in the portfolio should reach 15-30% given the current structure of the portfolio.