Growth through the transition - Net zero by 2050

STRATEGIC UPDATE

17 NOVEMBER 2020 

Note: Today we have also published a trading statement, covering the period from 1 January 2020 to 30 September 2020. This, together with details of our strategic update presentation, can be found on the Aggreko investor relations website. 

Aggreko today sets out how we will evolve our business through the energy transition to be a leader in the temporary energy market we serve, while improving returns to shareholders.

Our net zero commitments

·      By 2030 we will:

‒  Reduce the amount of diesel fuel used in customer solutions by at least 50%

‒  Reduce local air quality emissions of those solutions by the same amount

‒  Achieve net zero across our business operations

·      By 2050 or sooner, Aggreko and the services we provide will be net zero

Delivering shareholder value through the energy transition

·      We are focused on profitable growth

‒  Revenue growth in our sectors expected to be 5 - 10% p.a. over the medium term

‒  Driving high teens Group margin in the medium term

·      We are maintaining our target of delivering mid-teens ROCE

‒  Disciplined capital investment in the range of £250-350 million p.a.

‒  We will drive a continuous improvement in working capital performance

Chris Weston, CEO, commented:

"The world is changing and so is Aggreko. Demand for electricity will continue to grow, driven by population growth, and the climate imperative and availability of new technology is changing the way in which electricity is generated, distributed, consumed, stored and monitored, making it more complex. This means the need for flexible, reliable and integrated solutions with lower carbon and local emissions has never been greater, and our market for temporary, distributed energy is not just enduring, but growing.

"We have made stretching, but achievable commitments which puts Aggreko on a path to reduce diesel fuel in customer solutions and emissions by at least 50% over the next decade, and to become a net zero company by 2050. At the same time, we expect to drive profitable growth, building on our sector-specialism, realising new opportunities in our markets as they transition, and implementing initiatives underway to expand margins.

"The energy transition will require capital investment in our business, averaging in total between £250 million and £350 million per year, and we are well supported by our cash generation and strong balance sheet. In the medium term, profitable growth in combination with improving capital efficiency, means we have a clear path to mid-teens ROCE."