Welcome to this presentation of the WindowMaster Annual Results 2024. I'm joined today by CEO Erik Boyter and CFO Steen Overggard Sørensen. My name is Philip Coombes, and before handing the word over to Erik and Steen, I'd like to say thank you to everyone who's joined us today and remind you that you can ask questions in the chat box below. Please feel free to ask them in either Danish or English. I'll do my best to translate the questions at the end during the Q&A. With that said, I'll pass the word over to Steen to begin the presentation.
Thank you very much, Philip. I'll run through some of the financial key figures of the accounts that we published yesterday, and I'll just take some of the key numbers first. Of course, 2024 was special for us because we kind of finally showed that we could make some growth, nice growth numbers. If we look into the order intake, yeah, we saw a growth of 11%. I'll come back to that a little bit later here, but significantly more in the revenue, which grew with 24%, which we are very fond of. Margin remained stable, and of course, a stable margin resulted in a strong EBITDA growth also.
It also showed that the decision we made back in 2023, when we were a little bit more under pressure on the top line, that we did not reduce in fixed cost or headcounts, showed to be a good decision because that actually enabled us to deliver in the 2024 financial year. If you look into the EBT and also the profit after tax, it also followed the same. The top line drizzled down into the bottom line and just showed that we were able to actually follow our Accelerate Core strategy with more project sales and keeping our momentum in the margins. Of course, that said, we still strive for more going forward into the coming years, but we'll come back on that. As profitability also goes up, we also were able to maintain a more normal tax percentage.
We were able to utilize some tax losses that we have kept and also some other tax assets. Just indicating now we are on a more profitable base going forward. On the balance sheet, we also demonstrated actually we were able to grow our business, but at the same time keeping our working capital under control, which I think we are pretty proud of being able to do so. Equity ratio also increased to a more comfortable level, as also shown here in the slide. If we go into the order intake, we already commented on it last year when we published our 2023 result. We did see an uptake happening already from Q3 2023, and that continued throughout 2024, flattening a little bit in the Q4 numbers. It also indicates a little bit a change in order behavior.
In the last month of 2024 and the beginning of 2025, we have seen a little bit of a shorter time horizon on orders showing or indicating that we have a little bit shorter visibility than we have had in the past. That is just the dynamics of the industry being where maybe the financial expectations are a little bit more sound and people are a little bit more comfortable in making orders on a shorter notice. It just gives some challenges for us that our visibility is shorter. If you also comment a little bit on the pipeline, we have in our business, it remains solid and it also supports our expectations for 2025. All in all, our order intake remains stable on a 12-month running and again supporting our expectations for 2025 also.
Again, we have also commented on it in several places, also in the annual accounts that we do expect an uptake in the second half of 2025. The background for that is our imposed or the imposed EU regulations that we expect to kick in in some of the markets. Again, here we just have to highlight we are in a building industry and yeah, timing is everything and prioritization can change very shortly in our business. If we look at the net sales again, back to what we showed in the first slide, we did see a very strong turnover growth again, the 24%. The positive thing is here, it's not a single project or it's not a single market. This is a performance we saw in all segments, in all markets, really performing and growing.
That indicates to us that we are looking into maybe a more solid base of business going forward, which we can build on going forward. Maybe also a little bit of a comment, what happened in the last quarter of 2024. We are again in a building industry and sometimes we see that projects are being pushed to get finalized before the end. Some years we see they are postponed until the year after. In 2024, we saw a lot of projects being wanted to be finalized. That also shows a very strong Q4 of 2024. That also could be the reasons why we are a little bit more conservative for the beginning of 2025 because we did see front-loaded of some projects in the end of 2024. Jumping into the slide of EBITDA and our earnings or profitability. Here again, it's quite simple.
It just follows the revenue streams. Again, what it indicates to us, we have a solid business model where turnover drives or revenue drives it all. That is just what we have to focus on, increasing and grow our revenue streams that will show off in the profitability. Last slide before we jump into the Q&A. I think Erik, you will give some comments on that. Hope you are muted.
Erik, you're still muted as I can see it.
Yeah, sorry about that. I would also like to make an advertisement for our ESG report, which was also publicized yesterday. In this one, we talk about all our commitment to the Global Compact. We also explain our development according to the Science Based Targets initiative. There are some good takes here. It's not only the financials. It's actually also on our commitment to reduce CO2, which we have actually also done quite well over 2024. I would also recommend that people and investors look into this side because we are a company with a strong purpose. We also want to be a good global citizen alongside developing our business. Please have a look at that. It's actually a great read where you also could see many of our projects we have done in the year and with reference to them.
We also speak about our business model. There are a lot of facts to be found in this ESG report. I hope you all will have a great read there. I will not say any more about that. Yeah, thanks.
Great. Shall I start with the Q&A? We have a good number of questions, so thank you both for the presentation. I think a good place to start is around the guidance. We have lots of questions here. I see one asking about why you're expecting stronger growth in the second half of 2025. I think you mentioned briefly it was to do with the EU regulation, but maybe you could put a bit more detail on what you're expecting in 2025 and how you see the market conditions at the moment and then what you're expecting in the first half versus the second half.
Will you comment on that, Steen?
Yeah, but I don't think we say differently what I just said, that really it is the project business that we expect to pick up in the second half, both on orders, but also on revenue. That is, of course, what we look into for 2026 also, where really some of this EU regulation should show off in more refurbishment projects simply because regulations require more renovation projects. That is the reasoning behind.
Understood. There are a few questions asking about potentially guidance being conservative. You write that you estimate that the most realistic outlook is for 5-10% market growth in 2025, but forecast a revenue growth of minus 1% to 6%. Maybe you could elaborate a little on what assumptions underpin the guidance for 2025.
Maybe I could just, because I tried to explain that it's simply the reasoning for that when we published the first guidance for 2025, that was when we had actually a little bit lower expectation for 2024, but we came actually with an upside adjustment for our guidance for 2024 in January where we saw that we did finalize much more projects in 2024, but those projects will not come again. We have kept the top line outlook for 2025, but of course, the ratios will then change accordingly. It is a little bit of a mathematic thing rather than we say we keep the numbers for the guidance. The DKK 290 million-DKK 310 million turnover is being kept back from our December guidance.
Okay, perfect. That's understood. There is another question on guidance that's slightly different. It's asking why you don't guide on EBIT, and maybe you could just put a quick comment on the current guidance structure.
This is what we have, you could say, started out with. We have expanded a little bit more to the order intake. We say order intake, revenue, and EBITDA. EBITDA is the ratio, or sorry, that number simply comes because it relates strongly to a cash flow indication also. That is why we have that. Yeah.
That's great. We have several more questions. We have a few on dividends and one almost answers the other. The first asks whether you expect to pay a dividend out in 2024, with the other saying you earlier expected around DKK 5 million in dividends and you've announced DKK 6 million, that is. You don't mention the increase in the report. Can you elaborate a little on the positive change in the dividend?
We write actually, I know there was a question about dividend. We do actually mention in the report that we have put aside DKK 6 million for dividend, and that, of course, has to be approved on the annual general meeting next month. That is the expectation as it looks like now. There was an opportunity to do this, and we have done this because also we would like also to have an attractive share. This is one of the instruments also to make the share more attractive. Yeah.
That's great. There's also a question on share buybacks and maybe whether the preference for dividends over share buybacks or if share buybacks are something that you would consider in the future. Maybe a few words on the potential for share buybacks or just the capital allocation structure.
Yeah. Over the last couple of years, we have actually tried several things to look at what our to get our share more active. We have a couple of times actually bought shares, and I have done it as a shareholder, and we have done it in our the main shareholders, the VMA Holding. Every time we did that, you could say the share price went down. That is why we are not pursuing that avenue at the moment. Maybe it could be in the future, but we have decided to go the route of dividend also because you can say the main shareholder also would like to have dividend paid out after, you can say, 10 years as an owner and majority owner of the company.
That's great. Perfect. Just while we're on share buybacks, there's a question about the warrant program in 2026 and whether that will be new shares or shares will be bought back into treasury shares to fund the warrant program.
They are actually all in the articles of the, it's all mentioned in the articles of corporation for the company. We actually in that have an allowance for making warrants, and they will actually, they are new shares and not, so they will be made new shares if the warrants are utilized.
Okay, perfect. Thank you for that, Erik. We still have a good number of questions. I will take this one about the competitive situation. The person asking the question says he sees a good number of window actuators with a Google search, but what really sets WindowMaster apart from the competition? Maybe just a broader comment on the current competitive landscape.
Yeah, I can do that. If you look, that's true. If you Google that, just as it's probably similar if you Google a computer, you will get the thousands, yeah. We should also know that we are a solution provider, so we don't just sell an actuator as such by one by one. Our success over the last couple of years has been we have delivered solutions to projects where you can say our actuators are sold together with controls, and there is an advanced communication between our actuators and controllers. That allows us to work intelligently in buildings to bring in fresh air that is needed. They don't just open and close. It's all very CFD calculations inside. It is a quite advanced setup. We have a technology called MotorLink that gives feedback to the controllers.
There is a part from the mechanical part of the actuator. There is also software embedded into it that allows the product to run 99 different speeds and tell the controls how open they are, allowing the flow of air to come in and so on. That is where we are different than competitors.
That's great. Yeah, it's really the smart software technology which sets WindowMaster apart. We have a few questions about the order book and the structure of the order book. A little about what sort of projects or could you maybe put some words on the breakdown of refurbishment projects versus new projects and the structure of the order book in 2025 and if you see any significant changes?
Yes. Yeah, I can answer that one very quietly. If you look at our business overall, just over 20% of our business is actually service maintenance of buildings. That is actually recurring business all the time. If we look at the rest, I would say that, and this of course also includes OEM business and so on, if we look maybe three, four years ago, 70% of what we sold was for new build and 30% was for refurbishment. That has actually changed. We are now at 70% refurbishment and 30% new build. That is also quite good because we know the cycle of refurbishment is actually a lot shorter than new build because they can, like the project we actually announced in the US, California, yesterday, that took four years to come to order.
They don't know go so long, but refurb can do maybe six months time cycle, and they're much shorter. That has changed. I think that answers the question, yeah.
Yeah, definitely. You also touched on the OEM part here, but there's a question around the breakdown of sales to OEM versus direct sales. I also know that's part of the Accelerate Core strategy, but maybe you could elaborate a little on how that's developing.
We do not really comment so much on the, we comment on market segments and not really on OEMs, but we do have an OEM business, and that is a hardware approach. That is where window manufacturers use our solutions in their offering. We are kind of third tier away from the market, yeah. That has a little bit of a tendency to, that has gone a bit down, even though we work hard on that. The OEM has gone a bit down, and that is also what we see going into 2025. That will go down, and actually you could say our project business will expand further, even more, yeah. Even though we have a lower, you could say some would say low expectation for 2025 or 2026, sorry. No, 2025, sorry. Yeah.
OEMs is there, but it's a good business to have also because it allows really to fill the factory we have in Germany. You can say the factory, we don't really have a capacity limit at the moment. We can actually increase by 100% if we want to. It's quite good to have. Margins are lower, but we don't comment on the segment as such. Yeah.
No, that's a great answer to the question and super interesting with the capacity in Germany, especially as that operating leverage has been a part of underpinning the results in 2024. You actually gave me a good introduction to the next question where someone's asking about more detail about the geographical breakdown, what you're expecting in terms of growth rates in the different markets. The person asking the question is particularly interested in the growth rate for North America.
Yeah, it's always interesting to talk about North America. We are very much focused on North America and we expect also by investment and so on. I would say to comment on general overall, what we have said in our Accelerate Core is we want to have a growth between 10% and 15% annually in our strategy period until 2026, yeah, with 2026, of course, yeah. That's in general. If we take North America, we will be in a higher range going forward. Currently, we are just under 5% of our turnover is in North America. North America also includes Canada. Canada, that is also a very exciting market for us. We are there and we expect over the three to five years that North America will be a same level as our key markets in Germany.
Similar size as Germany, similar size as Denmark and so on. They will be growing, but the higher growth rate will be in North America. We'll see a lot higher going forward. That's also what we are preparing for.
That's great. If we can just stay on North America, there's lots of discussion about tariffs and lots of unknowns around it as well. You have a facility in Pennsylvania. Could you maybe elaborate on what opportunities that gives you and how you're looking at potential tariffs in 2025?
Our facilities in North Wales, Pennsylvania, they came to us when we acquired this distributor importer of window automation in 2019. We are now actually capable of doing a light assembly in the facility where we are now, but we have also signed new facilities, which we will be moving in during this year. It is a bit bigger facility. There we will and have planned that we will be capable of assembly light manufacturing, you could say, before the World Cup starts in the US in June 2026.
That's great. We have a few more questions. I see we still have some time. We have a question here about the number of employees. The person asking the question writes, the number of employees has increased from 130 to 136. Do you expect a similar increase in the number of employees in 2025?
Should I answer? Yeah, I can answer that. What we see is that, yes, this is full-time. This is FTEs as such, yeah. And part of them, most of those that were that increase were actually were hiring in our service and operation side. They work with billable hours. It is not a fixed cost that makes us execute on projects and do service. They do not really count in the same way. We expect actually to be hiring more over this year where we are increasing our capacity because we have actually seen that we have been quite successful with taking the service back in boards and not doing it through partners. That is something that we will roll out in other countries also, yeah.
Perfect. The next question asks, it says you were at a trade conference BAU in 2025. Could you just comment a little on how that went? Yeah, that's the question.
Yes. Yeah, I can do it. It's actually pronounced BAU and it's German, and it's in Munich. It's the most important, you can say, show for the fenestration industry, which we supply into. We were there and we have been there. It's every second year. We are also there to show our brand, WindowMaster, because it's a very international fair. You don't get orders and you don't sit with an order book when you understand like that. It's a great place to also show our brand and our attractive brand. It's also a place where we can meet most of the important people that are in the industry, especially in the facade industry and the window industry.
I can't say we get direct sales out of that, but it's a part of the process of building a strong brand in this industry we are in.
That's great. Yeah, thank you. The next question is a slight deviation, a change of topic, but it asks about a potential listing on the main market. This is something that was set out in the Accelerate Core strategy, the person writes. Here they ask, are you still expecting a transfer of listing to happen within the communicated timeline?
We have said that we are ambitious and we are a bit like sports people. We want to go to the Premier League, yeah. I know it's not the C25, but we want to go to the main market. That is something that we intend to do at a certain time, but we will do it at the right time. At the moment, we are okay on the First North, even though a lot of the press is not always good. I think we are an example of a company that has grown on First North and should be a positive example, yeah. That's how I look at it. Just now, I don't think there will be any advantage with going to the main market. I don't think it would change the share price as such, but we do have it in our target.
We cannot say when, but it is also the right time. There could be suddenly an opportunity of acquisition where it made sense that we did this. It also comes with a cost to make the move from First North to the main market. That cost, we would like the shareholders to—we do not want the shareholders to pay that price at the moment. We would rather they get the results on the bottom line. We will see when time comes and it happens, yeah.
That's great. You briefly touched on potential acquisitions, but it's something that we're looking at is strong operational cash flow or operating cash flow this year, and the gearing ratio has also come down. Are you thinking actively about M&A? I mean, you paid some dividend this year, but what's the outlook for M&A? How are you thinking about potential acquisitions?
Actually, we could say also part of the success, you can say now is also because we are leveraging on some acquisition we did in the past in Denmark and the United States and in Switzerland and so on, yeah. We always have an eye open. We have an active list. We also look at the market all the time, but it's often very opportunistic in this area we are in because many of these companies that we look at are, I could say, family-owned or one owner. It's not always possible to do it right now, but suddenly there may be an opportunity. We will look at, as we do all the time, if something comes, we look at it and we'll see what comes, yeah.
That's great. I think we are mostly through the questions now. There's one about, would you consider switching to a quarterly reporting, including Q1 and Q3 at some point, or?
When we go in the rulebook of, you could say, the rulebook of First North is only by first half and then full year. That rulebook is what we are sticking to at the moment. I would say that we over last year made four, you could say, four guidance upwards. In those, we could say we were telling what we expect the results to be, yeah. We do not want to waste money on making full reports each quarter to send to the market. We would rather use time on doing a lot of selling and operational excellence instead. Of course, the day we decide to go on the main market, that is something we will do.
That's perfect. Thank you, Erik. I see we're mostly through the questions now. I think, yeah, without coming back to the guidance too much, but you've mentioned your we know you're in the building industry. Last year, there were some positive impacts of interest rates coming down. If investors are to look at what can be the positive drivers from the macro side, what should we be looking out for? Is it things like broader GDP growth, specific things in the building sector, interest rates? Maybe you could just broadly comment on what can underpin maybe the top end of the guidance or a stronger market outlook in 2025?
We are mostly geared towards the commercial building and education and so on. We do not really touch that much on residential. Residential is very much dependent on interest rates. That is why you see some other companies in the industry maybe not have done so well this last year, yeah. Our outlook also is promising because we are seeing quite a lot of EU incentives to refurb existing buildings, which is good for us. There is funding going towards this. I am also quite positive about the new German debt or the debt ceiling going away because the Green Party actually in this package has got to say that about EUR 500 billion for investment in energy efficiency and climate investments.
That is a big uptake in the German economy to invest in energy efficiency, which will have an impact on us because that's also schools and a lot of other stuff that will be refurbed to go from gas, for example, to electricity and then also reducing the loss of heat and so on in buildings. We see quite that has a big effect. The EU legislation, Danish legislation, also U.K. legislation, that is also helping us, even though it's a little bit away from the main news streams nowadays because there's another agenda with war in Europe and defense spending as being a high priority. We will still see investment in more energy efficiency in buildings. That's what we're looking at, the EU legislation, especially.
Thank you, Erik. I think that's a really good place to end. Thank you to both Erik and Steen for presenting and congratulations on the 2024 results. We look forward to following you in 2025. I would like to also quickly say thank you to everyone who's joined us today. I hope I've got through all of the questions. If I've missed any, apologies, but there will be chances to ask questions to Erik and Steen again in the future. That's everything from me. Thank you for joining us today and have a good day.
Thank you very much .