Hi, and good morning. On behalf of Hans Christian Andersen Capital, I would like to welcome you all to this presentation of the annual report for 2024 from SKAKO that was published yesterday. My name is Rasmus Køjborg, and I have the pleasure of welcoming both the CEO of SKAKO, that's Lionel Girieud, and we have CFO of SKAKO, that's Thomas Pedersen. They promised to take us through the 2024 numbers, the new guidance for 2025, and also sort of the latest developments. A warm welcome to you two. Before I hand over, also a warm welcome to those of you who signed up for today's presentation. As usual, you can ask questions in the chat. If you're not comfortable writing in English, you can do it in Danish, and we'll do the translation here.
We're also recording the presentation if you want to see it afterwards or miss anything. With that, I'll leave the floor to you. I think you would start, Thomas.
Yeah, thank you very much, Rasmus. Also from our side, welcome to all the participants for this presentation today on our annual report for 2024. As normal, we have the disclaimer saying that, of course, we are looking forward also at our guidance with some uncertainties towards that. We have the agenda for today. I will go through SKAKO at a glance, the results for 2024. Lionel will take over and give us a more deep dive into the vibration business. I will finish with our guidance and our financial ambitions for 2028. We will, at the end, have a Q&A session where you are more than welcome to give us some questions, and we will try to answer them as good as possible.
If we look at SKAKO at a glance, since 2023 and also during 2024, we have not seen any changes in the business that we have. We have the vibration business, three segments: recycling, minerals, and fasteners. We are now 132 employees, have the headquarters in Faaborg, but also production facilities in Strasbourg and San Sebastián. We have approximately 2,000 shareholders, 95% in Denmark, and the directors and the management team hold approximately a third of the share capital. One thing we also have to be aware of is that we actually, in 2024, paid out an extraordinary dividend to our shareholders at DKK 122 million, based on the divestment of SKAKO Concrete activities end of 2023.
In 2024, we were hit by the negative impact in the European market, but we focused on making sure that we are actually in a good position for the coming years. We have focused all our activities or many of our activities to secure the future. It was a success that we, in August, landed two major contracts with OCP in Morocco for the mineral segments of more than DKK 150 million. We have also, as you are aware of, a big focus, as you can see in both our annual report, but also in our ambitions to focus and also to look into the recycling segments, which is one of the three segments that is growing fastest. We have, in Denmark and Spain, established and also built bigger pilot plans to secure the possibility to show our customers our solutions in real life.
We have also hired a new sales force in both the U.K. and Germany to secure the recycling segments, as well as we have made some agent cooperation around in Europe. In all three segments, we are also participating in a lot of exhibitions to secure that we are present. When we look at the financial report for 2024, some of the numbers that, of course, are the most positive for us are the order intake and the order backlog. We had order intake at DKK 378 million, which is 59% above last year. The order backlog end of year, DKK 203 million, is actually 227% above last year. What we also saw was a decrease in Q3, and especially the end of Q4, which, of course, impacted the numbers that I will present on the next slides, both towards revenue and EBIT.
We saw a decrease in our revenue for the current year at 4.3%, and that was driven by both a decrease in plant sales, but an increase in after-sales. That is, of course, the decline is related to the uncertainties that we saw in the European market and also some postponement of some orders from 2024 into 2025. This decline in the revenue was mainly driven by the fastener segments, the European automotive and construction industries, and it was also related to mainly Q4. If we look at the highlights, the key figures, then we can see, as I mentioned, plant sales decreasing by 7.5%, after-sales increasing by 2.6%. That gives us a total decline in revenue on 4.3%. Sorry. Gross profit declined by 2.5%. On EBIT level, we ended at 13.3% below last year.
We also saw an increase in the gross profit margin by 0.6 percentage points to 13.7%, and that is driven by the split between plant and after-sales. The margins on after-sales are normally higher than the margins on plant sales. We are entering 2025 with a good and huge order backlog, which also will impact the year 2025, and you will see that when we go down to our guidance for the year. If we look at our balance sheet, then you can see that we have a significant decrease in our total assets. That was mainly driven by the big cash on hand that we had at the end of 2024, based on the divestment of the concrete activities. Cash flow from operating activities ending at a minus on DKK 24.1 million compared to DKK 16.8 million in the same quarter in 2023.
That was mainly driven by an increase in our net working capital due to the fact that we invoiced OCP, the big order that I mentioned before in Q4, but a part of that payment has actually first been paid in Q1 2025 here in January and February. That impacts both working capital and the cash flow from operating activities. We can see that we saw a decline in net debt to EBITDA from -4.7 in 2023 to 1.3 in 2024, and that is also driven by this divestment of concrete end of 2023. Our ambition is still to keep our gearing below 2.5, and as you can see here, we are at 1.3. That still leaves us room for future acquisitions if we see some possibilities in the market that actually could support the growth business that we have in the future.
It also leaves us to pay out continued dividends for our shareholders. The capital structure, as you see here, was during 2023-2024 impacted by the extraordinary dividend to our shareholders in February 2024, where we paid out all of the amount that we received from the concrete activities sold to [Zefyr] end of 2023. We suggest, the board suggests to pay out a dividend on DKK 2.5 per share. That is half of what we paid out in normal dividend in 2023. That relates to that we now are a smaller business. We have actually sold approximately 50% of our activities by selling the concrete business. That gives us a dividend yield on 3.1% compared to 4.9% in 2023 and a payout ratio at 72% compared to 113% in 2023. With those words, I will leave the word to Lionel.
Yes, hello. Thank you for everybody to be here. As Thomas already said to you, we have three key industrial segments at SKAKO Vibration, and those key industrial segments represent 90%-95% of our revenue. The first one is the mineral industry. This is the historical core business for SKAKO and the largest contributor of our revenue, with 46% of our revenue. The second one is the fastener industry. That's the smallest contributor of our revenue, but we are the market leader in this industry in Europe. This is usually the smallest contributor of our revenue compared to the mineral and the recycling industry. The last one, the recycling industry, this is for us the fastest growing segment and the most strategic segment as well. It's a bit complex segment compared to the other one because there are daily innovation in this segment compared to the two other ones.
Furthermore, we handle very diversified industry and material because we are working in the glass industry as well as in the household industry, as well as in the paper or metal recycling industry. It is very, very different to work with glass recycling of glass and recycling of paper, for instance. I will come later with a description of this segment. A few words about the company overview and our organizations to go a little bit in detail compared to what Thomas said to you previously. We are 130 employees, and there are six companies in the group, including three production sites, one in Denmark, the headquarter, which is as well the center of expertise for the fastener segment. The second one is in France, in Strasbourg. This is the center of expertise for the mineral industry.
This is a location where we design and produce the largest product of our range of products, of machines. The machines can reach 40 tons-50 tons, to give you an idea, 40 sq m-50 sq m. Very, very large product due to the fact that we need a very large capacity in the mineral segment. Of course, the machines are bigger than the machines of the other segment. The last one is in the north of Spain, in San Sebastián, the Basque Country. That is the location of SKAKO Dartek. We joined the group end of 2019. SKAKO Dartek is a center of expertise for the recycling segment. Each production site contributes to the complete portfolio of SKAKO Vibration. In each company of the group, we offer the complete catalog of products.
It means that, for instance, a Danish salesman, which is located in Faaborg, for instance, can sell Danish, Spanish, or French products according to the requirement from the market. A few words about our market. Yeah, our reach extends from China and India in the East and the U.S. in the West, knowing that the market depends on the segment. For instance, in the U.S., we are only present on the fastener segment because we think that the barrier for the market is a bit too high for the mineral segment. There are a lot of local competitors which have been established for a long time in the U.S. Regarding the recycling, the U.S. has a different policy than in Europe. We know that the rules are different from state to state.
It is not the same way of recycling in California as in other states, for instance, I do not know, Alabama or Iowa. It would mean for us a different way of doing according to the state and knowing as well that recycling is less developed in the U.S. than it is in Europe. To finish, the two main markets for us are Africa, which is mainly, of course, a mineral market, and Europe, which is a place where we have our strongest sales network and where there are the three segments present, so fastener, mineral, and recycling. A very short introduction to our product range. All of our products are based on vibration technology and/or around products with vibration technology. They are designed to integrate into customer and real processes.
It means that rather than providing complete turnkey solutions, we supply specialized equipment that performs specific functions within an industrial workflow. This function includes, as you can see on the top line, moving, separating, and cleaning bulk material. The two machines on the top left corner are two machines for the mineral segment. The first one is a screen that can separate and wash bulk material by size, separate by size. The second one is a washing drum. These two machines are the machines that we sold to OCP, to the two large orders that we got from OCP last year. You can understand it's a very important machine in our portfolio. Those machines are used in the mineral segment, but they are used nowadays as well in the recycling segment to clean and wash some waste or some, especially in construction and demolition waste.
In the center, two machines for two examples of machines for the fastener segment, two-star machine, I would say, in this segment. These machines are used to transform a production which is made by batch to a production into a constant flow of product. On the right side of the slide, you can see two key products as well for the recycling segment this time. On the top screen, which is specially designed for the recycling segment and which can handle difficult material which can be sticky or light. The second one, the densimetric table, which can separate bulk material by difference of density. Both are very used in the recycling segment. A little breakdown on two key segments on minerals and fastener to give you a description on these two segments. In mineral, especially, we have two, sorry, three subsegments.
The first one is a mining subsegment that includes any type of mining. You can imagine iron mining, uranium mining, phosphate mining, nickel mining, any type of mining. The primary market for this type of mining for us is outside Europe, nowadays, more or less very often. It is mainly in Africa. The second subsegment, which is mainly located in Europe this time, is a building sector. For us, it includes quarries and sandpits. Our customer and user of machines extract stone and aggregates to make road buildings and/or to supply the cement plant, for instance. The last one is the iron and steel industry. We have a very strong reputation in the iron and steel industry, especially in Europe.
Our equipment plays a very important role in the steel production process, handling and sorting raw material like coke or iron ore and other raw material before they are melted into liquid iron. Regarding the fastener segment, the most important subsegment is the automotive sector. This sector is struggling nowadays. That is one of the reasons of the decline of this business for the last two years, more or less. The second one is the building sector. Many screws and small metallic parts are used in the building sector as well. The last one, which is a bit new, not new, but it has been developed for the last months. We can see there has been an increase of demand, of request of quotation coming from the customer and even order. It is ammunition industry.
In ammunition industry, our customer as well works with small metallic parts, which are different from screws and so on, but they use the same type of technique and technology for their production process. A few words about our strategic focus. We know, and it's a bit obvious, that there are several, I would say, mega trends which are driving the recycling segment forward. We expect this momentum to continue. We expect that the recycling segment accepted the two large orders from OCP. Usually speaking, we expect that recycling segment will have a larger growth than the mineral and fastener. That is why we are strategically focused on expanding our presence in this sector. We have already adapted some of our products coming from the mineral to the fastener to the recycling segment and the needs of the recycling customer.
What we can see as well is there are some changes in the fastener industry, but mainly in the mineral segment, that there are some moves from this mineral segment to the recycling industry. Especially for a subsegment which is called construction and demolition waste recycling, we can see that most of the European players in the mineral segment are investing a lot currently in the recycling of this construction and demolition waste, which will be used as raw material to make buildings, roads, or what you can imagine. A strong trend for some industries to move to the recycling segment. The question is, what is the role of SKAKO equipment in this recycling industry? Our equipment have four functions. They can sort by dimension the raw material and the recycled material. They can sort by density.
They can distribute and feed other sorting technologies. They can wash and scrub waste. This is what the small sketch can show you on the left side of the slide. Sorting is a key function of the recycling industry. It means more or less all of the game is to be able to sort material in different types of size, of matter. All types of sorting technology are used in the recycling process. For instance, our type of sorting is not in competition with other types of sorting like optical sorters or magnetic sorters. All of that are complementary in the process. That is why we are sure that we will benefit from the growth of the recycling segment in the future in SKAKO Vibration. Yep. I'll let you finalize the presentation. Thomas.
Thank you, Lionel. Yeah.
We introduced our financial ambition for the period 2023 to 2028 last year. Even though this year has been challenging, we still keep our guidance about growing the business with 50% over the period and receiving an operating margin at around 10%. Even though we declined in 2024, then based on, of course, the two big orders to OCP, we expect to grow the revenue with 30%-40% in 2024. Even though revenue from recycling also declined in 2024, we still have the ambition of doubling the revenue in 2028. That will, of course, be a little more back-ended than expected, but still the market and the trends are expected to lead us to maintain the ambition in 2028. The last slide is the guidance for 2025 that we have announced a couple of weeks ago.
We expect revenue to grow with 30%-40%. That means that our revenue will be above DKK 300 million in 2025. We expect an operating profit EBIT before special items in the range of DKK 27 million-DKK 31 million. As you maybe remember, we realized an EBIT in 2024 at DKK 21.2 million. It is a significant growth both in revenue and operating profit that we are looking into in 2025. Let's jump to the questions.
Thank you very much, Thomas and Lionel. Yes, let's jump to some of the questions that came during your presentation here. I think we'll go one slide back here. There are a couple of questions related to your guidance and the Moroccan orders that came in.
One is asking here, is your guidance for top-line growth in 2025 of the 30%-40% only dependent on executing on the Moroccan orders, or does it also require new wins during 2025?
For sure. It's not only on the Moroccan order. We will have to have a good order intake as well in 2025, of course. The other segment will continue to provide order to the company, for sure.
Very good. We can also see some improvement on the EBIT level because there's also a question here. Could you give us some color on margins from such a large order as the Moroccan one? Could we expect a pressure on margins? Could you even find positive synergies, also taking into account that you have previous presence in this market? You are quite familiar with these operations.
Quite familiar. It's exceptional orders, for sure.
We know very well the market. We have been present in Morocco for the last, I would say, 25 years. We know the market, and we control our margin. We do not see any upside or downside. We control our margin. Yeah, I cannot say more than that.
No. Fine. Also, a little bit on cash flow because there is also a question if cash flow will improve, and more specifically, it is asked here if it will happen in Q1 2025. Has SKAKO received prepayments from OCP? If so, how large are prepayments from OCP?
Yeah. If we go back then in the Q3 report that we presented in November, we were expecting a positive cash flow from operating activities in Q4.
That did not happen due to the fact that we invoiced OCP during Q4, and we, for some of those amounts, first received the payment in January and February 2025. We, at the moment, look into a positive cash flow in Q1.
Very good. I think we will move a few slides back here to where we can first take a question here specifically on the recycling part. Is the recycling segment driven by a green agenda, or is it cost savings by reusing products that mainly drives your customers and clients to buy into this?
No. The recycling segment needs support from states and nations to be developed. That is the fact that one of the pillars of the growth of the recycling comes from the policy and the politics of the nation.
Very good.
I think we'll just move to this slide then, just with the overview. There's a few questions here. Let me just see if I can find it here. There were a few here on that was more I would like to ask two questions with regards to the proposed German spending plans on infrastructure and defense. First, there's a question here. SKAKO Vibration develops and manufactures equipment for quarrying. I think in Danish, that's stenbrud, if that's not a word that most are familiar with. Can you tell us more about your market position in Germany for this industry? Do you expect the German infrastructure program to have a positive effect on demand for the solutions that you offer in this quarry industry?
For the quarry industry, yeah, we have good customers in Germany.
Germany is as well a market where we have very strong competition and with high-quality competitors as well. For sure, if there is some growth in the quarry sector in Germany, we will benefit from this growth, for sure.
Very good. Also a question, but I think you also came across that with I'll just move to this slide here because there was also a question related to this with the defense industry. SKAKO Vibration also develops equipment for the fastener industry. Do you expect increased defense spending will positively affect demand for the solution SKAKO provides to the fastener industry? I think, Lionel, you sort of came across it that at least you've seen some good activity on the request for proposals or what you call it as a start?
Yeah, yeah, yeah. Absolutely.
We have seen a clear increase of demand coming from, I do not say fortunately or unfortunately, but from the ammunition sector. There are more and more demands coming from this segment. Yeah.
Very good. I think it comes at a good timing because I guess looking at the automotive industry in Europe, which is somehow struggling. If you could have other parts or other industries that could attract your sales here.
We expect in our budget that the automotive sector will be very flattish for this year at least. This is something that we have considered, of course.
Looking at recycling is now around 35%. Do you still expect that number to grow as part of your revenue as this is sort of your strategic focus area?
Yes. We have this effect as well of this big order coming which came from OCP.
There will be a big part of this order which will be delivered in 2025 and the rest in 2026. The figures can be changed and the percentage can be a little bit, yeah, drawn by those big orders. For sure, we will, as I said, yeah, the growth for the future will come from the recycling segment for us. Yeah.
Very good. I think you also came across it, Lionel, when you looked at the recycling industry compared to the other industries, the mineral and the fastener you are in. This is more diverse and more technologies that you have to master here. We also came across it that you actually have room for acquisitions.
Are there areas here in the recycling business where you could, yeah, strengthen your business by doing some acquisitions or where your sort of technical capabilities are limited today and you could see some improvement from [like that]?
Yeah. We usually do not comment anything about acquisition, of course. Like any companies, this is something that we are considering, of course. Yeah.
Okay. Very good. I think I'll move back to this slide just a second here sort of with the overview here. As we can see, you have also market activities in the U.S. because there were, of course, a few questions related to sort of the ongoing trade war, what would you call it? One is asking here, how are your U.S. operations affected at the moment? Does the extraordinary taxes also apply to your finished goods that you might export from Europe to America?
Do you have any local production in the U.S.?
No, we do not have any local production. For sure, there will be some challenge for that, especially for the fastener segment. We will see how it will be in the future for this specific product that we are delivering to the U.S. There is as well another effect that you could see. We have a good business with the steel industry in Europe. We know that this industry can be affected by the tariff, the high tariff on steel in the U.S. For sure, like all companies, what happened in the U.S. is a bit difficult to forecast.
Yeah, because there was also a question related to this specifically on the tariffs on steel and other metals. I guess it can both be beneficial for you if more production will be in Europe then.
It could also, on the other hand, you're using metals yourself for your production. Yeah, I guess there's also some implications there from, I don't know, high prices from the tariffs.
Absolutely.
If I can add a little thing to this, then we can see if you look at our annual report, it is around 2% of our revenue that are going to the U.S. It is not significant.
Yeah. No.
Absolutely. Yeah. Right.
Okay. Very good. I think we got through all the questions. I think we'll conclude by that. Thank you very much, Lionel and Thomas, for joining us here today.
Thank you.
Thank you.
Thanks to those of you who participated and with some very good questions. We'll conclude by that. I'll just wish you all a nice day. Thank you.
Thank you. Have a nice day.
Thanks.