You are Niamh Cregan, Managing Director of Hibernia Climate Systems, the €480 million heating and energy-systems division of a Dublin-listed industrial group. Group now demands that you lift return on invested capital from 11% to 16% in three years and grow 8% a year, with 20% less capital. Before choosing a direction, you must decide which lever closes the return gap.
The situation
It is Monday, 14 September 2026, and you are back from the Boyne Industrial Group strategy offsite. Hibernia designs, makes and installs commercial heating and cooling equipment, heat pumps and building controls at its Cork and Galway plants, with 1,850 people and customers in Ireland, the UK and continental Europe. It is the group's slowest-growing and most cash-generative business; you have run it since 2022, with eleven straight quarters of cash delivered to plan.
Group's new chief executive has handed every division one page of numbers. For Hibernia: return on invested capital from 11% to 16%, and growth from 2% to 8% a year. In the same session group cut your three-year investment envelope 20%, to €48 million, against €78 million of investment cases already written. On the current trajectory Year 3 ends about €95 million of revenue and about 5 points of return short. The board reviews plans in December, and a plan it does not believe makes the division a divestment candidate.
Revenue of €480 million comes from three streams. Equipment is the core: cash-generative and slow-growing. Installation carries high volume on thin margins and absorbs more working capital than the other two combined. Service and controls carry the highest margin and the lowest capital intensity and renew every year, but they are the smallest stream, with no platform behind them. Your three directors are paid on different numbers: Declan Moore, commercial, on volume; Aoife Brennan, finance, on margin variance against budget; Tomás Kilbride, plants, on utilisation.