In line with our growth strategy, sales growth (in constant currency) of the Group and, in our business segments, organic sales growth in particular are of central importance. Fresenius has set itself medium-term growth targets. Based on the 2019 financial results, Group sales are projected to grow organically with a compounded annual growth rate (CAGR) of 4% to 7% in the timeframe 2020 to 2023. Small and medium-sized acquisitions are expected to contribute an incremental CAGR of approx. 1% point.
We use earnings before interest and taxes (EBIT) and EBIT growth (in constant currency) to measure the profitability of the business segments. At Group level, we primarily use net income and net income growth (in constant currency). In order to be able to better compare the operating performance over several periods, the results are adjusted by special items if necessary. Fresenius has set itself medium-term growth targets. Based on the 2019 financial results, Group net income is projected to grow organically with a compounded annual growth rate (CAGR)1,2 of 5% to 9% in the timeframe 2020 to 2023. Small and medium-sized acquisitions are expected to contribute an incremental CAGR of approx. 1% point.
At the corporate level, cash flow margin is used as the main liquidity indicator. In order to further analyze and optimize the contributions of our business segments to operating cash flow, we also use the additional performance indicators DSO3 (days sales outstanding) and SOI3 (scope of inventory). These show the amount of receivables or inventories in relation to the sales or costs of the services rendered during the past reporting period.
We work as profitably and efficiently as possible with the capital provided to us by shareholders and lenders. In order to manage this, we primarily calculate the return on invested capital (ROIC) and the return on operating assets (ROOA).
We use the ratio of net debt and EBITDA as the key parameter for managing the capital structure. This measure indicates the degree to which a company is able to meet its payment obligations. Our business segments usually hold leading positions in growing and mostly non-cyclical markets. Since the majority of our customers are of high credit quality, they generate mainly stable, predictable cash flows. According to the management assessment, the Group is therefore able to use debt to finance its growth to a greater extent than companies in other industries. Our self-imposed target corridor for the leverage ratio is 3.0x to 3.5x.
You can also find more details on our key performance indicators in our interactive tool at www.fresenius.com/interactive-tool.
1 Net income attributable to the shareholders of Fresenius SE & Co. KGaA
2 Before special items
3 Does not reflect a core performance indicator