Good afternoon and welcome. On behalf of Hans Christian Andersen Capital, I would like to welcome you to this presentation of the report from the first half of 2024, and that was also the second quarter of 2024 from SP Group that was published Friday. My name is Rasmus Køjborg , and I have the pleasure of welcoming both the departing CEO of SP Group, that's Frank Gad. We have the coming CEO of SP Group, Lars Bering, and we have the CFO of SP Group, Tilde Kejlhof . They promised to take us through the numbers and highlights from the quarters and expectations going into the further part of 2024 , and of course, also ask questions, or answer questions, sorry. So welcome to you and also welcome to those of you who signed up for today's presentation.
You can ask questions in the chat. You can either ask them in English, or you can also do it in Danish, and we'll help with the translation. But with that, I'll leave the floor to the three of you.
Thank you, and thank you for joining us for this presentation. We have had a good first quarter and an excellent second quarter, so we are back on the growth track on the top line. We have sold more of our proprietary products, and we have improved the bottom line. The group management looks, as you can see here on the picture, with the three of us, and Søren Ulstrup, and Søren is busy with our customers today. And then you can take the next one. And I have decided to step down as CEO from September 1st, and the board has appointed Lars Bering as my successor, so Lars will be the CEO from 1st of September, and Tilde has been appointed to the executive board and as the CFO.
Tilde, Lars, Søren, and I have been executive board now for four years, and we have worked very well together. I'm leaving, so the three other team members will continue under Lars's leadership. Take the next one. Why now? Well, I'm turning 64 in September, and I've been the CEO for SP Group for 20 years. SP Group is back on the growth track, and we have a healthy economy. Lars is ready to take over, and the team, Lars, Søren, and Tilde, has worked well together for the past four years and can run without me. We are well on the way to fulfilling our 2024 ambitions, which we will highlight during the presentation here. Next. This is the new management, and you can take the next. We are now established in 72.
We have sold our products and services in 98 countries last year, and we have subsidiaries in 12 countries at three continents. So we are in North America, in Europe, and in Asia, and we are 2,351 committed employees. Take the next one. We make surface solutions and plastic solutions, and approximately 30% of our business is proprietary product, where we sell our own products, and 70% we make is subcontracting work. We call it customer-specific solutions. We have added two new names to this slide since our latest presentation, and that is SP Moulding, Inc. in Atlanta, and it is SP Meditec, Inc. in Atlanta. We'll come back to that a little later. Take the next one, and the next one.
We have, in the first half of this year, increased the top line with 8.4%. It was a lower growth in the first quarter, higher growth in the second quarter, and it was the third quarter in a row where we're back on the growth track. We have sold many more of our proprietary products, so own brands is up with 38% and is now DKK 438 million. EBITDA increased with 31.2% to DKK 302 million, and EBITDA margin improved 2.5 percentage points to 20.3%. The huge improvement in the EBITDA margin and the in the EBIT is thanks to the high growth in proprietary products. Next one. We have made a profit before tax of DKK 176 million.
That is 63% more than the same period last year. Earnings per share is also up with 63%. We have reduced the net interest-bearing debt with DKK 107 million, so it is now DKK 924 million, and we have increased the equity with DKK 112.5 million to DKK 1.576 billion, and this is after we have paid DKK 36 million in dividends. We have decided now to launch a new share buyback program, and that will start today and run until April 10 in 2025 , and we'll buy shares back for DKK 40 million to hedge our own programs. Take the next one. This is some of our own products.
This is fenders and floats we sell to fishermen around the world, and also to people who has a sailing boat or a motorboat. Take the next one. Here, you can see we have become a bigger company, a more profitable company, with a stronger balance sheet over the years, and we will go into details on the next slide. This is the top-line growth, and here you can see we're back on the growth track now in the first half of this year with 8.4%, and historically, we have been able to grow around 10% since 2010. And in the second quarter, we were actually growing 15%. Next one.
This here is the EBITDA, and the EBITDA is up with more than 30% in the first half of this year, and we are now back on the growth curve again here, after we have had a slow 2023, where interest rates went up and our customers was focusing very much on the working capital to reduce the inventory level. And that gave us a little decrease in the sales, and we have been planning for growth, so we have invested in people and equipment, and therefore our EBITDA went down. But I'm happy that we are back on track now on the way up. But you can see we have also, in the past, seen a couple of times a slowdown, and then we came back on track. Next one.
This is EBITDA margin, and this is, 12 months, last 12 months, and there we are around 19, but in the last 2 quarters we are around 20. And, that is a nice improvement over the last decade from a level around 10%. And this is mainly thanks to the higher focus on proprietary products that now consist of 30% of the sales, up from less than 15% a decade ago, but also because we have invested a lot of money in new equipments, new technologies, launched new products, and invested heavily to become much more international. Next one. And the EBT is also, doing, up again, after a downturn last year. We were surprised by the high interest rates, and that took, money away from the bottom line.
We are now on the way back, and I'm pretty convinced that during the next quarters we will surpass the previous all-time high. And looking back here then in 2010, we made DKK 25 million in profit, and that was the highest ever. Then we made a plan to double that to DKK 50 million within five years, then we reached that. Then we made a plan to double that within five years to DKK 100 million, and we did that. Then we made a plan to reach DKK 200 million within five years, then we did that. And now we are chasing a plan to reach DKK 400 million soon. And after a difficult 2023, then we are back, and we are getting closer. Take the next one.
And we have reduced the gearing, so the net interest-bearing debt to EBITDA is down to 1.8, and we expect we will be around 1.5 at the end of the year. And this is taking into consideration that we continue to invest in new equipment, and we will also start this share buyback program. And in the first half of this year, we have completed the building of what is going to become a new factory in Atlanta, in United States, so we get more presence in the very important North American healthcare market, but also for injection molding for technical applications. Next one. Group financials, you can see we've had an excellent second quarter. We had also a good first quarter.
So in the first half, top line is up with 8.4%, EBITDA is up with 31.2%, EBIT is up with 56%, and profit before tax is up with 63.5%, and the equity is up with 12.9%. And if you go to the bottom, then you can see equity ratio is 49.9, up from 45.7, 12 months ago. We've had a strong cash flow from operations. We have continued to invest in the future, and we have repaid debt and paid dividend. And this year's proprietary products, there we had a dip last year, and now you can see we're back on track. So we follow now the nice development in the curves from first half of 2020, 2021, 2022, and now 2024.
And we are growing in more or less all the own product brands and all the different product lines. So we are selling more ergonomics, we are selling more animal housing, ventilation, more guide wires, more medical packaging, and more industrial standard components. Next one. And we have increased the revenue from the clean tech industry, from the healthcare industry, but then we've seen a decline in other demanding industries and a small increase in the food-related industries. Next one. And you can see there is quite a lot of dynamics here. So where we last year had a decline in healthcare, then we had a very strong growth in healthcare this year. We have continued growth in clean tech after also a strong 2023. The food-related is back on track and growing.
Then however, automotive has slowed down, so we are - 30% here compared to last year. Other demanding industries is down 17%, and own brands is up 38%. One of the own brands where we are very successful is ClearVials produced by MedicoPack, and the lady here is on the picture, is doing visual inspection of the ClearVials. And the ClearVial s is used for medicine to people, and it has been growing very, very fast in the first half of this year, and we hope this growth can continue. And the FDA has told a number of drug makers that for some applications, glass is not good, they have to use plastic.
We are, of course, very happy that we then have an application that is ready for use. Next one. 40% of the revenue in the first half came from healthcare, 29% from clean tech, 12% from food-related, 4% from automotive, and 15% from all other demanding industries. We have more than a thousand customers. We have one customer that is more than 10% of sales, and the 10 largest customers are 46%, the 20 largest are 56%. Next one. We have all these plants here around the world. We will soon open the new one in Atlanta in the United States. Now, we have one in Ohio, one in, and one in Iowa.
Then we have two in China, one in Bangkok, in Thailand, two in Finland, and then we are in Sweden, Poland, Latvia, Slovakia, Denmark. We have sales offices, that is the red dots, in Canada and Norway and the Netherlands and in Sweden. Next one. We have made a number of acquisitions during the last decades. We have not made acquisitions in the 2023 and in 2024, because we've not been able to find good companies that fit in and where we could buy them at an attractive price. But the companies we have bought between 2014 and 2022, we're very happy with. They have contributed with new customers, new technology, a more global footprint, and the number of good and exciting colleagues improving what we had and what we have got.
We can now offer much more to our customers in terms of competencies and local presence around the world. Next one. Here you can see we have generated 75% of our sales in the first half outside Denmark. That is in line with our 2024 ambition. 30% of that is coming from own product, that is also in line with our aim of 28%-30%. We have now 70% of the employees outside Denmark, and we are in the phase of hiring in North America for our new plant, and we have 17 plants around the world outside Denmark and 14 in Denmark, so we have 31 now. Then we will, during the second half of this year, open in Atlanta, and that will take us to 32 plants globally.
Without making further acquisitions, and of course, we are still open for that. Next one. Our share price has improved a little in the first half of this year, but we have not been able to follow the market during 2022, 2023, and 2024. We did pretty well until the end of 2021, but when the interest rates went up, then that hit our valuation. We have also to admit that the decline in the sales and in the profit in 2023, of course, also have affected the share price. Now we're back on the growth track, on the top line and on the bottom line, and hopefully interest rates will soon come down again, and our share price will hopefully come up again.
We have paid a dividend of DKK 3 this year, in line with what we have put up as expectation and you can see in the long run, since 2010, we have outperformed the market, and we have also outperformed the market from 2016 until 2021, but then we have underperformed in 2022 and 2023, and I think in 2024, so far, we are more or less in line with the market, maybe a little bit better. Next one. We have approximately 4,000 shareholders, and among our largest shareholders, we have ATP, a Danish pension fund, Lannebo in Sweden, and Odin in Norway, and our largest shareholder is still Schur Finance, hence Schur is our Chairman, and Schur Finance has acquired more shares during the last quarter.
I have also a significant number of shares, and if you take the management team as such, then we have approximately one third of the shares. Other Danish investors has one third of the shares, and the people or investors from outside Denmark has the last one third of the shares. Over the years, we've got many more shareholders, and we have still room for more. Next one. Our customers, they want better and cheaper products. We help them to substitute wood, metal, and glass with plastic and composite. We manufacture globally with a powerful team, the right equipment, and the right technology. Customers focus on core business and outsource plastic production to specialists, and we make a customer solution that gives him lower CapEx, lower OpEx, better quality, and delivery on time. Customers want fewer and better suppliers.
Our ambition is to be the preferred supplier, so if the customers want to reduce number of suppliers, then it is important for us to be one of the few they decide to continue with. And then we have the mega trends, that is a growing aging population, the climate, and the scarcity of resources. So we have decided to have a strong exposure to growth industries like healthcare, clean tech, and the food industry, and we believe there is a good structural growth in these areas because we're getting more and more people on the planet. We want to live longer, we want to have a healthier life, we want to avoid getting pains, we want to have better foods and better healthcare when we get old. And in all these industries, you need SP Group's products and competencies. Next one.
And then we come to the outlook for 2024, and here I will hand over the floor to Lars.
Thank you. Yes, please take the next one, Rasmus. We have had a great first half year, and we expect a very exciting second half year of 2024. However, the global economy is still fragile, and there is a lot of uncertainty. We also face that very limited growth in Europe, but on the same time, we have developed new products and new solutions for our customers. We have found new customers, and we have a great sales team, especially on our own products, that have made a very strong execution. So we expect to see continued growth. We also have the capacity in the factories to produce it. So we have a new guidance.
We see that our revenue growth will be in the range of 8-18%. Previously, we guided 5%-15%. We also expect some of the growth will end on the bottom line. We expect now an EBITDA margin of 19%-21%. Previously, we guided 16%-19%. And finally, EBT margin in the level of 11%-13%. Previously, we guided 9%-12%. Please take the next one, Rasmus. We still have a huge focus on sustainability. There's sustainability in everything we do. We have an ambition of achieving zero environmental impact from our operations. Already today, we are powering a lot of the factories with green energy, either on certificates or directly bought on PPA agreements.
We are measuring our Scope 1 and 2 emissions, and we have a target of being carbon neutral in 2030. Furthermore, as a last thing, last year we had 14% of everything that we produced was made by recycled plastics, or, and that is a process that we continue to develop and find new products where we can use more, you could say, reuse plastics into new products. And we focus on the sustainable, the global, UN Sustainable Development Goals, as also mentioned in the annual report. That is an ongoing work for all of us. Yep. And of course, plastic should not end up in the environment or in the oceans.
To a great extent, the plastic that we produce is mainly components that end up in machines or equipment that is used for many, many years. We are not producing bags or cutlery or straws, and we are very limited within packaging. The packaging that we do is a high-end packaging for medical purposes. So all in all, we believe that we are part of the solution and not the problem.
Should we have a look just a few of the products you make with the recycled plastic here?
Yes, of course. Here we have a fence, and this fence is produced by Gibo Plast and is made out of household waste, and not just only household waste, it's actually made of the leftovers after sorting household plastic waste, so the poorest thing that you can absolutely find in plastics, we are able to convert into some nice planks that can be used for fencing, and one of the new products that we have developed is made in Ergomat. It is the Ergomat sustainability mat, where we have made a new program to take back customers' old products after they are worn out. Then we can recycle them and turn them into new mats in different ways.
It's a exciting product because the mats are made in polyurethane, which is normally not easy to recycle, but Ergomat has developed this and is now offering this to their customers. Here we have parts for TPI, ventilation parts. It is a wind hood that prevents air blowing directly into an animal house. The part is made of regrind plastics, and then we have added a top layer of 10% new material, so it will have UV protection and can last for several years. On the left-hand side, there is a pallet lid from Nycopac, also made in 100% recycled plastics and extremely durable. And this chair we are manufacturing to Muuto, where we have added 25% wood fiber and 75% recycled plastic.
The wood fiber makes every chair unique, and you will see a little different in each chair. So a lot of nice applications where we're using regrind. Here is one where we are using both new material and/or regrind plastics. It is a packaging system that we make in Nycopac for industrial transportation of components, typically from a component producer into an assembly factory. It is very much used in the automotive industry, but all the parts are 100% reusable and recyclable.
Very good. Thank you very much, Lars. Perhaps we should jump into some questions, but I know you would probably say a few words about the slide here if I change to this one.
Those of you who had followed our presentations saw that we started this project a year ago. This is our brand-new factory in Atlanta, in the United States. It is 11,000 sq m . We got the permit a year ago, and we took over the delivery on end of June, and now we're busy making a clean room inside and putting up the first production lines, and we will go into production during the second half of this year, and it is not photoshopping. It actually looks as nice as you see here on the picture, including all the trees and everything. It's a huge investment for us. We've been able to pay it out of the cash flow during the period here, and at the same time reduce our debt.
We have built the building two months ahead of schedule and within budget. I'm really happy with the result, and I would like to thank all the people who have been involved in this. This is a great achievement they've made.
Very good, and let me say, if you have any questions in the audience, you can type them in the chat, and we will address them for the management team here. We have one when we're on this slide. There's a question here regarding orders for this U.S. factory. When are you able to start delivering to customers? And do you already have some customers who have signed up for production?
We have some customers who have signed up, and we are ready to do delivery as promised, here in the second quarter of this year. But I would also like to add that we have space for more customers, and we have an open phone and an open email, so if there are people out there who needs a good, reliable supplier in Atlanta area, then we're ready.
Great. And I'll just switch a little bit back here on your slides. There was a question here that was also addressed in the Danish presentation earlier on, but that is whether you will stay with the company, like, on the board, Frank? We see you have this ownership in the company here.
The plan is that Lars will take over as CEO from 1st of September, and I will stay on board until the end of September to make sure that the transition is smooth. And thereafter, I will have my phone open, so if Lars or Tilde or Søren or want my advice on something, then they are welcome to give me a call. But we have an excellent board, and we have no plans to make any changes in the board.
Very good. And then a question here on the internationalization. As we can see, the numbers has gone up to the 75% we're seeing now. There was a question in relation to this: Is it fair to say that customers outside of Denmark has driven the recent growth, and would that make it more attractive to do, like, international acquisitions if you can find the right companies?
It is fair to say that it is the international customers who has been driving the growth. We actually had a fall in the sales or decline in sales of 8.2% for Danish domestic customers. If you have read newspapers in the last few days, then you can see a number of larger industrial companies in Denmark have reported a decline in top line, and that also affects us, but we have been able to find other growth areas outside Denmark, and, of course, we want to continue to grow in Denmark as well as outside Denmark.
But if you look here on this slide here, then there are two blue areas, and the first one, that is how we looked back in 2005, and at that time, we were very much a Danish company with only 37% of our sales outside Denmark, and 23% of our colleagues outside Denmark, and we had a small factory in China and a small factory in Poland. And now we have 75% of the sales outside Denmark, we have 70% of our colleagues outside Denmark, and we have 17 plants outside Denmark, so we have become much more international. So this is a transition we've been going through, and, and here we have also met many new, exciting customers, and without losing the good old customers we still have.
Going forward, then I think we want to become more international. We want to sell more of our own products. You can also see we have constantly invested in new facilities outside Denmark, most recently the one in Atlanta. But a year ago, we completed a similar big factory in Poland, and we have also acquired land in Poland and in Slovakia, where we intend to build in the future. We acquired that land before the interest rates in Europe went up and the energy crisis came, so we've not been that eager to get it up and running. But I'm happy that we have invested in all the capacity so we can deal with the current growth we have.
We were growing 15% in the second quarter, and we have more than 30% growth in our own products, and that was not possible to do if we had not invested in the future.
And then looking at the map here with your global presence, are there areas where you would like to expand, either with acquisitions or organically?
Not specifically. I think we are very well covered geographically, but there will of course be a need for expanding our capacity in the existing factories following the growth in the future. But you can see we are now in North America and Europe and in Asia, and that is where we have our main business also. And then we're exporting to Australia, to Africa, and to South America from our current setup. But of course, if there are customers' demand, then I think also the future management would look at the investment case.
Of course. Very good. And then the questions on the revenue from own brands. There was a question here, let me just see it here. What is driving the massive growth you have seen in own brands?
New innovative solutions and new innovative products we have developed and launched in the market, and some of these products takes time before they get acceptance, but now we have seen good growth this year in animal housing ventilation globally. We have also gone to new markets, so in a transition period where we used to focus on the European market, but now we have also made sales companies in North America and in Asia, and they got orders. We have also put much more focus on the Middle East and South America and Central America, so we have become much more global with our animal housing ventilation.
In the guide wires, we have launched new products, and we have got CFDA, so we can sell our guide wires also in China, and we are now applying for an FDA so we can start to sell our guide wires in North America. In medical packaging, because we have launched new products and some of these products are taking off now, and our standard components, also here we have launched a number of new products, and finally, in ergonomics and floor market and health and safety, we have also launched a lot of new products, and that is also doing very well, so it is more or less all the product lines who are back on the growth track and doing better.
Very good. We don't have any further questions from the audience, so I think we will-
But you can also see that-
Yeah, sorry.
You can also see that our 2023 figures were not extremely good. So, I would say you should compare it with how we developed from 2020 to 2021 to 2023, and now 2024, and then we had a setback last year.
Very good. Thank you very much. Would there be any final remarks from your side, Frank? This is probably the last event we have with you here.
I would like to thank you all for having joined today, and also thank you for having joined for previous presentations, and I wish you all the best going forward. And, I am convinced that SP Group will still be a good place to be a customer, an exciting place to work, and a good place to invest. So good luck with... Thank you.
Thank you. Thank you very much. Thanks to you, Frank, Lars, and Tilde. Yeah, I will conclude by that. Have a nice day. Thank you.