Lincoln is undergoing transformation
To simplify organizational complexity and drive efficiencies, Lincoln Electric (LECO) is undergoing a transformation toward a new organizational structure. According to LECO’s management, the new organizational structure is expected to improve efficiencies to a great extent.
Process integration and product development should be boosted across different regions. In turn, the customers are expected to be served better and the organization should see better profitability. This could give an impetus to LECO’s growth strategy and vision for 2020.
From January 2016 onward, the company will report three operating segments: Americas Welding, International Welding, and the Harris Product Group. These segments contributed 69%, 21%, and 10%, respectively, to total revenues in 2015.
Lincoln’s growth strategy and vision for 2020
LECO aspires to increase its global presences and market share. It intends to improve its presence by focusing on innovative and cost-effective welding solutions. The company also plan to focus on its capabilities as well as its product offerings.
By 2020, the company expects to double its size. For this, LECO needs to increase its sales at a compounded annual growth rate of 10% or more. It visualizes a return on invested capital of more than 15% through 2020.
LECO is a part of the Robo-Stox Global Robotics and Automation Index ETF (ROBO) and accounts for 2.2% of the total holdings. Cognex Corp. (CGNX), Rockwell Automation (ROK), and ABB Ltd. (ABB) are also among the top ten holdings of the fund. They account for 2.2%, 2.1%, and 2.0%, respectively. LECO is also part of the SPDR S&P 500 ETF (SPY).