Good afternoon. On behalf of Hans Christian Andersen Capital, I'd like to welcome you all to this presentation of the Annual Report for 2024 from SP Group that was published this morning. My name is Rasmus Køjborg, and I have the pleasure of welcoming CEO Lars Bering and CFO Tilde Kejlhof. They promised to take us through the numbers here, the highlights for 2024, and also the new guidance for 2025. A warm welcome to you too. Before I hand over, also a warm welcome to all of those of you who signed up for today's presentation. As usual, you can ask questions in the chat room in the lower right corner. If you're not comfortable writing in English, you can do it in Danish, and we'll help with the translation. Please don't hesitate to ask any questions here for the management.
Should you want to see the presentation again, it's available afterwards on different platforms. With that, I'll leave it to you, Lars and Tilde. Please go ahead.
Thank you very much, Rasmus. First and foremost, thank you for everyone listening in. Thank you for your interest in SP Group. We have looked very much forward to this day to be able to present the 2024 results with you. We will start directly with the highlights of 2024. In Q4, we had a good growth at 11.3%. It was a little lower than the whole year. It was mainly because we actually saw a good increase in growth in 2023, in the fourth quarter of 2023. We had a similar activity level as in the previous quarters in Q4. Again, like the rest of the whole year, we had a strong growth in the sales of our own products. EBITDA grew 20.7%, and EBIT growth of almost 46%.
In 2024, we had a year with several records, including sales on DKK 2 billion and DKK 922 million, which was an increase of 12.1%. We are very pleased with this, especially in a year with very weak European industrial production. We had great growth in our own products. This is due to a very strong commercial execution from our team. All in all, we ended up having an EBITDA margin of 20.1% and an EBIT margin of 11.8%. For 2025, we expect a growth in the range of 3%-10%. We will be able to realize an EBITDA margin of 19%-21%, and an EBIT margin in the range of 11%-13%. As I said before, we had a really good year for our own products. We saw solid growth. Here among them were the TPI products, where we had increased sales globally.
Ergomat, they completed a number of ergonomic projects in both Europe and in the US. We saw a nice increase in the demand for MedicoPack's clear vials, where we are replacing glass with plastic for medicine. We have also been very, very busy opening up our Atlanta facility. We have made fixed agreements with new customers that we will start producing for in the coming month. For example, we have made an agreement with a medical customer for an outsourcing project where we take over 24 injection molding machines and move them to our facility during 2025. We are right now working on our clean room, which we expect to be ready here during quarter two. Right now, we are 34 employees in the Atlanta factory, and we have 11 machines up and running.
On the final highlight, we have ESG, and we have been very, very busy. As many of you know, Denmark has decided to implement the CSRD regulation for stock-listed companies, and that has given us a huge amount of work. We have tried to make it as light as possible, but it has given a lot of pages in our annual report. We truly hope that this CSRD will be limited in the future by the authorities, and we hope that they will limit new initiatives because it's a huge amount of work for small companies like SP Group. On the more operational side of ESG, we are happy to announce that we have reduced our CO2 footprint on Scope 1 and Scope 2. We have introduced more district heating and using less natural gas, using more electricity produced by ourselves, and also buying more green electricity.
We have also improved the amount of recycled plastics in our production from 14% - 90% of the total amount of plastic used. In that way, we are reducing the overall footprint from SP Group. These days, the U.S. is, of course, a very hot topic. The U.S. market is very important to us. We have sold 20% of our revenue in the United States in 2024. With the new factory, we are reducing the need for import into the U.S. and reducing the uncertainty around tariffs for us and for our customers. As I said before, we are now 34 employees, and we have been in operation for approximately three months. You can understand, things are moving very fast for us, and we are very happy with that.
Like all other global companies, we focus on the geopolitical situation and the uncertainty and the risk of trade wars. In the short term, this, of course, can have an effect on SP Group. In the long run, we will pass it on to our customers. We have simulated different tariffs on our 2024 numbers, and we can say that tariffs will have only a marginal effect on our results. We do not expect that to change. As some of you might have noticed, we have decided that we will close down our activity in Kvistgård, where we do industrial coating. This area means less and less to us. In combination with a big need of investment in the facility, we decided to close this factory.
We expect minor, non-recurring, reoccurring costs in connection with this close down, but this is all calculated into the 2025 expectations. We, of course, will help our employees and our customers and close it down in a good manner. We have a nearby factory where already some employees have been offered work. If you then take the next one, Rasmus. Yeah. SP Group is a global manufacturer of plastic solutions. We have 31 factories. We are working with a number of different plastic technologies. 70% last year of our revenue were for customer-specific solutions, where we are working as a sub-supplier. 30% of our products came from our own brands. This is a record high and also a part of why we are doing well in these times.
If we break down our sales in product groups, we see that we have sold 41% for healthcare, 29% for cleantech, 12% for food tech, and 18% in others. Previously, we have also had a category called automotive, but this has been very, very reduced. Today, we have these figures inside others. We have sold 25% of our revenue in Denmark, 46% in Europe outside Denmark, 20% in North and South America, and 9% in Asia. We have 31 factories all over the world. We have opened one last year in the U.S., and we have closed one in Denmark. It was one we acquired some years ago called Neptune Plastic. That factory also needed a huge amount of investments, and we decided that it was a better solution to close it down and move production to our factories in Poland and in Denmark.
Plastic components can be produced by many different technologies. We master many technologies on a very high level. In that way, we are able to offer our customers the best solution. The choice of the right technology depends on many different factors, among them component size and how many that the customer needs. Sometimes it's very obvious which technology to choose. Other times, it's more complex. Being able to have the most relevant technologies in our group, we can always offer the customer the right solution without doubt. That helps us in many, many cases. In order to do that, we have all our companies if take the next one, Rasmus. We have our companies focusing on one or two technologies or, in some cases, one or two types of own products. It provides a really dedicated focus close to the customers.
With that, I will leave the word to Tilde going through the numbers.
If we start with the Q4 figures, the revenue was DKK 727 million, up with 11.3%. EBITDA was DKK 141 million, up with 21%. EBIT was DKK 90 million, up with 46%. If you look at the right and look at the full year 2024 compared to full year 2023, 2024 was a revenue of DKK 2.9 billion, up with 12%. EBITDA was up with 34% to DKK 599 million. EBIT was 60% up to DKK 386 million. EBIT was up with 72% to DKK 345 million. Earnings per share was DKK 21.6 compared to DKK 13 the year before. The equity increased with 16% to DKK 1.7 billion. Cash flow from operation was DKK 510 million.
We spent DKK 197 million on investments and DKK 212 million on reducing debt and dividend to the shareholders. The net interest bearing debt ended up at DKK 821 million, which is a decrease of over DKK 200 million. The debt compared to the EBITDA was 1.4, and the equity ratio was almost 54%. If you take this, if we look at the development during the last five years, the revenue has increased by DKK 2.2 billion -DKK 2.9 billion.
The EBITDA has increased by DKK 366 million -DKK 589 million. EBIT has increased from DKK 194 million- DKK 345 million. The equity has increased from DKK 1 billion - DKK 1.7 billion. If you take the next one, here you can see the development in the revenue. Historically, it has been driven by acquisition and organic growth. From 2023 to 2024, the growth was 12%, mainly due to strong sales in own products. If you go to the next one, the EBITDA has increased from DKK 441 million- DKK 589 million, which is a growth of 34%. It is mainly driven by more sales of own products and more efficient use of our production capacity.
If you can look at the green one, that is EBITDA margin, it has been increased during the year, mainly due to more sales of own products. The EBIT has increased from 2023 to 2024 by 72%. Here is the same explanation that increased sales of own product and better use of our production capacity have really been good. Here you can see the share price performance and the shareholder structure. We have 4,000 shareholders end of 2024. Among the biggest one, over 5% is Schur Finance. It is Frank Gad, it is Odin, Lannebo, and ATP. At the coming AGM, we will hope that a dividend of DKK 4 per share would be approved. The share return during 2024 is 45%. We have talked a lot about own products, and we have grew this from 2023 to 2024 by 43%.
Own product, that is, if you can see on the left, that is medical packaging. It's guidewires, it's fenders, it's products for fishing industry, it's stable ventilation, and it's ergonomic solutions.
Yes. If we come back and look at the sales again to the different product groups, we have healthcare that takes up 41% of the total sales in 2024. It consists of plastic parts for medical devices, medical packaging, and ergonomic solutions from Ergomat. Here we have seen a nice increase from 2023 to 2024. This is to a great extent driven by sales of guidewires from SP Medical, clear vials from MedicoPack, and ergonomic solutions from Ergomat. The cleantech business, where it is plastic components used for renewable energy reduction and its insulation products, takes up 29% of the total revenue. We have seen a nice increase from 2023 to 2024.
Here, there are not so many own products in that group. The growth here is more limited. It is the same on the food tech, where we have farm ventilation from TPI, which is a nice contributor for this group. There is also a lot of other types of plastic components among the plastic for measuring equipment. We have had a nice increase of 10% from 2023 to 2024. We have the group we name other, where we have basically the plastic parts that do not fit into the first three. It can be furnitures, components for special vehicles, and other maritime products, as just as an example. Here we have seen a decline over the past two years. This is mainly due to the fact that our customers in these areas really have a hard time.
There are few of them that have simply phased out their products, which has meant a lot to us. They are still customers with other things, but it is difficult to handle when a customer decides to terminate his product where our components are used. All in all, we are very, very happy that we have had a nice growth in the three areas with our strategic focus. We come to the outlook for 2025. We are planning to launch new products. We have customers with new demands. We are chasing new customers, and we are talking with our existing customers about many new projects for new plastic components that give new growth in the year to come. We expect a growth from 3%-10% in 2025. We see some uncertainty like everyone else in this time we are living in right now.
Based on everything we know, this is where we predict we will end up. We see an EBITDA margin of 19% - 21% and estimate EBIT margins in the level of 11%-13%. For many years, we have followed a path for SP Group that has consisted of organic growth and acquisitions. We have developed SP Group in many years very, very well. Coming to strategy, we see no reason to change this. More fine adjustments and tuning and also try to clarify our strategy for the coming years. It is very important in SP Group with our very strong subsidiaries. Our daughter companies have a strong mandate, and we do that because we believe it is the best way to have them very, very close to our customers and making sure that they are their customer's preferred supplier.
It is our job in SP Group to realize the synergies between all our daughter companies and ensure that we have the best practice in the group on the cost side. We are very good in cross-sellings between the companies. We will continue to have a very clear positioning on growth industries. We have been focused on healthcare, cleantech, and food tech for many years, and that will continue. It is very important for us that we are also able to handle customers in a wide range. Understood in that way, we should be able to take in startup companies and help them with plastic products, but we should also be able to help big global companies with their plastic products in a competitive way.
It's also important for us that we are able to be with the customers all the way from developing the plastic product until the serial production. As an example, we do that by helping the customer in Dav inci, our 3D printing and engineering company, where we help the customers with designing the new products and make the very first prototypes. Later on, we are able to do high-volume serial production in, for example, SP Moulding that works with injection molding. Another very important element in our strategy is that we are a one-stop shop for customers. Many plastic components can be made in many, many different ways, and we are able to provide the best choice for our customers. Many of our customers, they also need plastic parts based on different technologies, and the choice of a technology for a plastic component may also change over the product's lifetime.
In order to be a true one-stop shop, we must have the ability to run several technologies, and we are doing that, and we would like to expand that going forward. Another very important element in our strategy is our own products. During the years, we have established our own products as niche products that we sell globally. Our own products help us increase our margins as we are able to earn a little bit more on our own products than being a sub-supplier. We also aim to increase the share of own products of the total revenue in the years to come, and in that way, also increase our margins. Here, we would like to expand the number of products inside the group, both on new development inside, but also through acquisitions.
We would also like to do more acquisitions in SP Group in the years to come. We will continue to explore the opportunities for more acquisitions, and we are looking for good companies that are well-managed with a fair price. It might be its own products, but it can also be companies that can expand our technology services. Finally, we are focusing on sustainability, being able to have sustainability as a competitive advantage. We have increased the use of recycled material over the past years, and we wish to continue that. We know that it helps to reduce our environmental footprint when we use one kilo of regrind material instead of taking one kilo of virgin material. At the same time, we will increase the use of renewable energy in our production facilities.
Towards 2030, it's our ambition that we will continue to have a strong focus on advanced plastic solutions, typically with a very long lifetime, long durability of these products. We focus on healthcare, cleantech, and food tech, and other areas where we can make a difference. We believe that mastering several advanced technologies really offers us a competitive advantage. We also believe that acquisition is an important strategic tool going forward. We will also focus on expanding the share of our own products. We have in our expectations that in the growth, it is both organic growth and minor acquisitions. We have not done acquisitions for the past two years because we have not found the right companies at the right price. We have not been sitting on our hands.
At the same time, we have decided to build a new factory in the U.S. and get that up and running and create organic growth instead of acquisitions. That has been our focus. In the years to come, we would like to do more acquisitions. It is our ambition that we will be able to reach revenue in 2030 at DKK 4.5 billion and realize an EBIT of approximately DKK 600 million. To do that, we need to have a growth of 6%-9% with a bit more own products and better utilization of our factories. We believe we can realize an EBITDA of 20%-22% and realize an EBIT from 12%-14%. All in all, we have had a very satisfying 2024 with record-breaking revenue, record-breaking EBITDA and EBIT.
Our own products, they continue to deliver margin improvement, which underlines the importance for us in SP Group. We have a strong strategic focus with dedicated areas to work on going forward and good opportunities. We wish to strengthen SP Group with new acquisitions. All in all, we expect continued growth for 2025.
Perfect. Thank you very much, Lars and Tilde. Let's jump into some of the questions that came during your presentation here. If we move a little bit back to this slide on the outlook for 2025, there was a question here related to you. I think it's primarily related to your revenue growth. It's here. Your revenue guidance seems somewhat lower than you have achieved in the past. Could you elaborate a bit on this and the assumption included in these 3%-10%? Sorry.
We have had a very strong 2024 that is based on a very big growth in our own products and at the same time, a rather weak demand for many industrial companies. We believe that we can continue to grow our own products, but not with the same speed. At the same time, we are a bit uncertain how fast our industrial customers will actually get back on track. Therefore, we are a bit cautious when we come out with our estimate for growth in 2025.
Very good. Let's have a look. We come across it a number of times with these own products. As we can hear, it has been a good source of increasing both your EBITDA and EBIT margins. There was a question related to these own products are now some 30% of revenue. Do you see that increasing further from here? Is there sort of an upper limit on this number? How much can own products be of your revenue? I do not know, 100% is the upper limit or?
The upper limit is 100%, but that is not our strategy. We have been working very hard in the past 15 years to get it from 15% - 30%. We believe we can lift it even more. It is clear that it will never become 100%, but if we can lift it slightly over the years, we are also able to lift our margin levels going forward.
Very good. Actually, there was a follow-up on this one. What is the sort of 2030 ambition for own products as a percentage of that revenue you expect to reach in 2030?
I believe we can lift it two, three percentage points more.
Okay. Very good.
Yeah.
Good. I will just move a little bit back to, sorry, to this slide here on the dividends and in general on the share. There was a question here related to your, could you refresh us on your dividend policy? Do you expect to introduce a new buyback soon, or are you keeping some flexibility for potential M&A activity?
Our ambition of paying dividend, that is, that we pay between 15%-20% of the bottom line. Here, it's like 19.1%. We have not started a new share back program, but that could be done during the year.
Okay. Very good. Also the last part, are you keeping some sort of gunpowder for potential M&A also?
Yes, we certainly do. Our debt level is rather low right now, but also in these uncertain times, it seems very comfortable. For sure, we are very happy that we have dry powder, as you can say, for acquisition going forward.
Very good. There was a question related to M&A here. Could you describe your process for sourcing M&A prospects in more detail? What improvements are you currently making to this process? I do not know if you have a dedicated employee to look at M&A, or is that part of a management job also to do that sourcing and sort of to, yeah, to do that?
We have not done so historically, but we have a new colleague whose job, a part of the job, is making sure that we are on track with a nice pipeline on what we would like to have on a wish list for future M&A targets.
It's clear that when it comes to M&A, we would like to expand our technology offering so we can sell more to our existing customers, both on being a sub-supplier, but also on own products. If we can come to our existing customers with more products, then we would like to do that. At the same time, buy a good company with good customers that can also use the products and the services that we have in our existing business.
Very good. Let's take a few last questions. If there's more questions out there, please type them in the chat, and we will have room for them. We'll have a few questions on your new U.S. facility here. There was a question. Let me just find it here. What kind of capacity do you have at your new U.S. factory compared to the rest of the U.S.? We know you have two other factories in the U.S., right? Also compared to the whole group when you're fully up and running on your U.S. factory.
First of all, out of the total picture in the U.S., it doesn't make much sense to talk about a U.S. capacity because we introduced a new technology into the U.S., injection molding. The factory we have on the right side of the picture here is, I believe, able to have approximately 100 injection molding machines inside. Today, we have more than 500 running in our existing factories. You can see it is a substantial expansion of the potential capacity that we can have here.
Very good. A follow-up on the U.S., you had this with new clients coming in. Is that new clients to you, or is that existing clients from your other activities around the world that is also approaching you here on the U.S. facility?
It's both. It is both new clients, and it is from the U.S. but it's also existing clients from Europe that would like to have local production in the U.S.
Very good. Let's take one of the last questions here. I'll just move back to this slide on the strategy because as we had on one of the first dots in the first line, there was a synergies across the group through SP Network because there was actually a question related to this. If you could possibly discuss synergy extraction from the current group of companies, any possibilities to centralize procurement, economy functions, etc. What are you working on here?
We are working on a number of projects to get more synergies out of the group. It is also a group of very different customers and very different technologies that drive very different purchasing. Of course, we believe we can do more in that area. We also believe that we can do more in improving our utilization of the factories. That is a work that the management has started in the autumn. We hope that it can also realize some good savings.
Very good. That was actually the last question. We will end by this. Thank you very much for listening in. Thank you very much to you, Lars and Tilde, for joining us here today and running through the annual numbers and also the outlook for 2025. Thank you for listening. Thank you very much for the question. We will conclude by that. I'll just wish you all a nice day from here. Thank you.