VMI parent to intensify focus on automation activities

Haaksbergen, Netherlands – TKH Group is intensifying its focus on automation with plans to evaluate alternative ownership options for its ‘electrification' activities.

During a 25 Sept capital markets day presentation, the parent of tire & rubber machinery major VMI, said it planned to make “material steps in the separation process" in 12-18 months.

Under a new 'capitalise & execute 2028 strategy', TKH will concentrate capital and growth efforts on its “asset-light” automation operations, including vision and machinery systems.

As TKH’s largest operating company, VMI is a major contributor to its automated machinery and manufacturing technology portfolio, which accounts for around 60% of group turnover.

Within the reporting structure, VMI is part of the group’s ‘smart manufacturing’ division, to which tire-building systems contributed 83% of revenues (totalling €609 million) in 2024.

Going forward, TKH said it will treat its ‘electrification unit’ – onshore and offshore energy network infrastructure – as a business that requires higher capital intensity and may attract outside ownership.

The next phase of the strategy, according to TKH chief executive Alexander van der Lof, is to “capitalise on our market-leading positions by further increasing our focus.”

“The future of TKH will be in automation, where we see many opportunities in long-term value creation based on our unique technologies,” he said.

Automation operations will focus on expanding global market position with AI-integrated hardware and software designed to enhance efficiency.

TKH said its capital and M&A plans will target “continued market growth in vision-based automation solutions,” supported by portfolio optimisation and synergies.

In its presentation, TKH set 2028 targets for: Automation to achieve 5–7% organic turnover growth, adjusted earnings (EBITA) margins of 17–19% and ROCE of 25–30%.

Equivalent targets for the 'electrification unit' are to achieve turnover growth of over 7%, 12–15% earnings margin and 18–23% ROCE.