Good morning, ladies and gentlemen, and a very warm welcome to our webcast on the results of the 2024 financial year of TechnoTrans. My name is Frank Dornesch, and I'm head of investor relations and treasury. Today, I am pleased to introduce our CEO, Michael Finger, and our new CFO, missus Natasha Zander, who will guide you through our company's performance over the past year and provide an outlook for the current financial year. Over the course of this webcast, we will cover, first, the highlights of the 02/2024 financial year second, the development in our focus markets third, the financial performance of the group in detail and fourth, our strategic road map and the outlook for 02/2025. After the presentation, the board members are looking forward to answering your questions in a q and a session.
Before we begin, please note that the following presentation contains statements on the future development of Techno Trans Group. These reflect the present views of the board of management and are based on the corresponding plans, estimates, and expectations. These statements are subject to certain risks and uncertainties, which could mean that the actual results may differ considerably from those expected. With that, I am pleased to hand over to our CEO. Michael, the floor is yours.
Thank you, Frank, and a warm welcome from our side to the annual analyst conference with the full year numbers of 2024. Prior to diving into the details, which Natasha will do, please let me kick it off with some remarks on the overall environment and how we have performed throughout this year. But let's start first with something which is very close to our heart as the board of management and also to everybody in the company, which is sustainability. We continued to invest in sustainability in both, in products and in infrastructure. Energy efficiency is already key for all our products, and we are changing step by step to natural refrigerants like propane, as you know.
With this, we have introduced, for example, a cooling system for battery and power electronics at Senotrans last year, which was new to the world market. Regarding infrastructure, we are still powering our facility in Wartswiggerdorp with green hydrogen, and we expanding our electrical fleet and have decreased our carbon footprint over the course of last year as well as increasing public transfer to our facilities. All of this was recognized by two successful ratings from EcoVadis and ETI Finance. So from there to the political and economic environment that we have seen throughout last year and we still have. Germany recorded a recession for second year in a row.
Some of these developments had a significant impact on our markets. It was mandatory for us to optimize costs, structures, and processes. In this unstable environment, our focus on further strengthening the resilience of our company for the future, and we have succeeded in doing so. We have initiated the most comprehensive organizational restructuring in the group's history. At the same time, we expanded our market position once strategically important orders and achieved a solid annual result.
Let's take a look at the financial highlights of 2024. We have generated a revenue of €238,000,000 with an EBIT margin of 5.2%. And important to highlight, this is almost the same margin than in 2023, but with 24,000,000 less revenue and with 2,100,000.0 of restructuring costs. Without these effects, we would have achieved an EBIT margin of 6%. We've increased our performance quarter by quarter.
This was mainly driven by our efficiency program, ttSprint, which we have successfully finished at the end of last year. Finally, we are happy to propose a dividend of €53 cents to our AGM in May, which is in line with our long term dividend policy. Natasha will give you more details later. So let's turn to our markets. In an uncertain environment, we could see once again the importance of a balanced market approach.
In energy management, we saw another year of outperformance. We have continued our strong growth in this market by another 27% revenue increase. Energy management generates already 15% of group revenue and more to come. Demand remained robust for our battery server management systems, particularly for rail applications and electric buses. The latest large volume orders for electric buses are demonstrating again our ability to volume production.
And this growth will continue also in 2025, as you could see from our press release coming out in February. Same story in stationary rail recording systems. A very prominent German provider of mobility solutions ordered three customized solutions for converter stations. Further joint projects are already underway, including additional ones in Germany, but also in Australia, Norway, and The US. Another big growth driver was liquid cooling for data centers.
In 2024, we have entered the market directly with two products in this strong growing area, an area which is benefiting from the rise of artificial intelligence and the ongoing need for high performance computing. Having supplied air cooling systems in the past, we are successful with liquid cooling solutions for both retrofitting and CDUs for new data centers. In 2024, we have already generated major orders, and we expect more to come this year. Energy management will continue its strong growth path also in 2025 and will become more and more important to TechnoTrans. Let's turn to print.
Our print business had a weak start in 2024. Driven by the challenging economic environment, we saw a revenue decline of 12% to €81,000,000. But we did what Marcus Liederst does. We have developed new innovative products. The highlight was a new Alpha C system, which we presented on the Drupa trade show for the first time.
It is a combi unit for dampening solution preparation and in unit temperature control with natural refrigerants inside. This is great engineering. The first Drupa after COVID was successful and all has begun to pick up over the course of this year. Main growth drivers are still packaging and label printing as well as the digital print. Overall, print recovered steadily over the course of the year, and we expect a stable development in 2025.
Turning to plastics. This market was also affected by the economic uncertainty, with €51,000,000 revenue came out 10% below last year. Driven by this uncertainty, we saw less investment in large cooling plants. Rising interest rates still led customers to delay CapEx. On the positive side, we continue to invest in r and d.
We have developed a new energy efficient cooling solutions with natural refrigerants. We have presented these innovations on important trade shows such as the Fakuma trade show and received positive customer feedback. The ongoing drive towards more sustainable production processes puts us in a good position once the market conditions will improve. A highlight of 2024 was a large order for a temperature control system for the battery production of a German car manufacturer. As a sole supplier, we supply energy efficient compact temperature control units for a subprocess of battery production to several locations of our customer around the world.
To expand our technology competence, we closed the partnership with NHT. The products of both companies complement each other perfectly and will help to generate new business. For 2024, we expect a stable year with slight growth rates in the second half. In health care analytics, we closed the year with around €15,000,000 of revenue, almost on previous year's level. Over the course of 2024, we have increased our sales activities, and we closed new orders in areas such as medical diagnostics.
Another highlight is also the launch of our new lab cooling system with a special twin concept. Hereby, the cooling capacity can be doubled by simply adding another module. But that's not all. Each model contains less than hundred grams of propane. This allows us for unrestricted logistics, and serial production for this program has already started.
We are also proud of the continued success of our clean room capabilities in Baden Baden. The clean room is already booked out for 2025. In this environment, we are producing high precision tolerance products at a level of 0.1 Kelvin. With our sales wins in 2024, we set the base for moderate growth in 2025. Finally, our laser market was most affected by the economic slowdown.
We recovered we we we recorded a 25% drop in revenue to €41,700,000,000. High precision cooling solutions, such as systems for the battery production or EUV laser for semiconductors are running well. But the standard laser business, the commodities, continue to be under pressure. As the outlook for 2025 remains uncertain in this segment, we have started to restructure our product portfolio to be prepared for another challenging year. To sum it up, in 2024, we saw only growth in energy management due to the uncertain environment.
For 2025, it looks different. While laser is still suffering, we see another year of growth in energy management and also moderate growth in print, plastics, and health analytics. And it is worth to highlight that the importance of our core competence server management is growing continuously, not only due to the high cooling requirements resulting from AI, it's also due to the requirements for energy management, natural refrigerants, and the increasing complexity of technology. This is where we can make the difference. Our strategic sales wins are underpinning this.
Having said that, let me now please hand over to Natasha. She will talk you through our financial performance.
Thank you, Michael, and good morning also from my side. I am pleased to explain the financial performance of Technotran's group in the financial year '24. Let's start with revenue and EBIT. The charts on the left side shows a quarterly development, whereas you can see the full year on the right side. As mentioned, group revenue reached 238,000,000 in '24, reflecting a decline of 9% from the previous year's revenue of 262,000,000.
As Michael already said, our top line was impacted by the uncertain political and economic environment. The strong revenue increase in energy management, which was independent from the economic situation, could not fully compensate for the decreases in the other focus markets. Looking at the quarterly development, our revenue stabilized over the course of the year. Q4 was the strongest quarter with 62,500,000.0 and a growth of 4% compared to Q3. Despite a revenue decrease of 24,000,000, we closed the year with an EBIT margin of 5.2 compared to 5.4 in the previous year.
EBIT declined from 14,200,000.0 in '23 to 12,300,000.0 in '24. The main driver for the decrease is the strong revenue shortfall, which could be only partly compensated by efficiency gains, short time work, a higher service share, and optimized product mix. However, it must be noted that our EBIT includes restructuring cost of 1,200,000.0 related to the transformation of the organization as part of the t t sprint project. The EBIT adjusted by the restructuring cost ended up at 14,400,000.0 with a margin of 6%. Compared to last year, the operational performance of Technotrans has improved.
Let's have have a look at the quarterly development of EBIT. As I said in the q three call in November, the adjusted EBIT margin of 6.9% in q three twenty four was a record margin on quarterly level, looking back on the last five years. Today, I'm pleased to highlight that the adjusted EBIT margin of 8.7% in q four twenty four marks a new record level within the last five years. Drivers for this outstanding performance are mainly the efficiency measures from the t t sprint project that became fully effective as well as tailwind from a favorable product mix. To sum it up, Tecnotrans finished the year '24 strongly with regards to profitability.
Let's turn to our reporting segments now. First, technology. Revenue declined to 170,700,000.0 in '24 from 199,600,000.0 in prior year, impacted especially by weaker market dynamics in print and laser. Nevertheless, energy management within this segment delivered robust growth, demonstrating once again its strategic importance. EBIT declined to 3,600,000.0 in '24.
Efficiency gains, product mix optimization, strict cost management, and short time work at several production locations could not fully compensate for missing scaling effects. Consequently, EBIT margin of technology decreased from two point percent in the previous year to two point o percent in '24. The EBIT of the segment includes 1,100,000.0 of restructuring costs mentioned earlier. Without these restructuring costs, the EBIT margin would be 2.6% and in line with previous year level. Looking at the quarterly performance, on the back of higher revenues, efficiency improvements, and a favorable product mix, the EBIT margin in q four twenty four accelerated its close to 6.4%.
Let's turn to the service segment. Revenue reached 60,400,000.0, a slight decrease from the prior year's level of 62,500,000.0. The focused markets print and laser are primarily impacted by the shortfall. At the same time, energy management and health care and analytics continue to grow. However, we noticed a slowdown in the demand for spare parts in nearly all markets at the end of the year.
Despite lower volumes in some areas, the segment EBIT margin rose to 14.7%, coming from 14.4% in the previous year. Thanks to our ongoing push for service efficiencies, strict strict cost management, and a favorable product mix. The service segment accounted for 1,000,000 of restructuring costs. The EBIT margin without those restructuring costs would be even at 16.4%, which is outstanding. With regards to the quarterly development, it should be noted that EBIT shortfall in q four twenty four is mainly driven by lower revenue and restructuring costs.
Let's move forward to ROCE and cash flow. ROCE came from 11.8% from from 13 c 3% in the previous year. Without the earlier mentioned restructuring cost, ROCI would have been at 13.8%. Capital employed could be reduced compared to prior year. Our free cash flow totaled 8,500,000.0, down from 12,800,000.0 last year, but still solid given the challenging environment.
Gross profit declined by 3,700,000.0 to 64,500,000.0 due to the decrease in revenue. Gross margin rose to 27.1% compared to the previous year with 26%. The improvement was the result of an optimized product mix with a higher share of service business along with the implementation of efficiency enhancing measures. EBITDA reached 19,200,000.0 compared to 21,200,000 in the previous year. The decline is driven by lower revenues and the earlier mentioned restructuring costs.
In the period under review, a net profit of 7,300,000.0 was generated coming from 8,500,000.0 last year. Earnings per share reached respectively 1.06. In line with our long standing dividend policy, the board of management and the supervisory board will propose to the annual general meeting a dividend of €0.53 per share for the fiscal year twenty four. This correspondence to a payout ratio of around 50%. We further improved our strong equity ratio to 60.5%, underscoring Technotran's robust financial position.
Net debt decreased to 18,500,000.0, down from 20,700,000,000.0. Our leverage expressed by the net debt to EBITDA ratio remained nearly unchanged at o point nine seven times, expressing the strong credit position on investment grade level. Our financial performance confirms that despite the years' macroeconomic headwinds and the transition we have undertaken, we remain on the stable foundation. Before I hand back to Michael, I would like to close my part with a summary of key messages. Looking at the financial performance of Technotrans over the year '24, you can see that we improved our profitability quarter by quarter despite a challenging political and economic environment.
This performance shows that the efficiency measures from the t t sprint project were implemented successfully. However, to become more resilient, we see the urgent need to continuously work on identifying further efficiency front potentials from pricing, production footprint, and portfolio optimization, procurement savings, as well as a stronger service organization. Techno Trans has a solid basis for further growth and profit profitability improvements in the future. With this said, please let let me now hand back to Michael.
Thank you very much. And to follow-up on Natasha's last sentence, we have now a solid base for further growth and improved profitability. In 2020, we have kicked off our strategy future ready 2025. We successfully passed phase one. As the framework conditions have changed in the meantime, fundamentally, we have reviewed the strategy for phase two in 2023 and initiated the efficiency program ttSPRINT in 2024 to be future ready and to improve profitability.
Over the course of 2024, we worked on sub projects like portfolio and markets, efficiencies, innovations, and organization. All these sub projects have achieved their goals to improve margin. The biggest impact comes from our new organization. And as already mentioned, margin of 5.2% in 2024 includes 2,100,000.0 of one off costs for restructuring. Four divisions have been created, each responsible for the entire value chain in its market.
In essence, we are increasing the sense of commercial responsibility and market and customer focus. This new setup reflects the different dynamics of our focus markets and it is supported by shared service functions. With this new setup, we are much more flexible and resilient. We will be able to deal with a remaining uncertainty by improving our profitability. The first positive effects were already reflected in our financial performance at the end of last year, as you could see.
Electrification, digitalization, and decarbonization will drive our future growth. With server management, we have a critical technology which becomes more and more important every year. We have qualified products for growing markets. With our new organization, we'll be even closer to each market, and we anticipate further trends. And with the defined measures to improve our profitability, we are prepared to face future challenges.
We are future ready 2025. For this year, we expect consolidated revenue in a range of $245,000,000 to €265,000,000 with an EBIT margin of between 7% to 9%. ROCE is expected to be in a range of 13% to 16%. And with that said, I would like to ask Frank to open the lines for the Q and A. Thank you very much.
Thank you, Michael. Ladies and gentlemen, that concludes our presentation. We will now open the floor for questions. If you wish to ask a question, please use the raise hand feature. We will enable your microphone at that time.
Alternatively, you can submit your question in writing through the chat function, and we will address it in turn. Please remember to activate your microphone before you speak. The lines are now open. And I see the first raised hand by Stefan Augustin. Mister Augustin, please.
Hello? Yes. Helene. Looks good. Thank you very much for taking the question.
I have actually four overall. The first one is on the gross margin and the mix effects. We see a very good result in the fourth quarter in technologies. And if I do my calculations on the respective sales exposure to end markets, it does not really very quickly become obvious where the positive mix are. So could you help me if this is rather something that is seen in energy management, or is it a bit more on on the health care side also or both probably.
That would be my first one, and I think it's better we do each one each question after each other.
Yeah. Good morning, mister Augustine. Thanks for your question. Indeed, it's better to answer it step by step. The first question about the product mix is easy to answer.
It's mainly driven, as you already said, by the positive order intake of energy management, both by print and health analytics.
Okay. Thank you. The next one is then a bit on the possible effects from US tariffs. Let's say, there there could be a possibility, for example, that part of the data center cooling equipment finally moves to The US. If so, could you help us if you would be susceptible to an increase in tariffs here, or is your actual client sitting in Europe and has to ship the final equipment itself somewhere else? So how is the risk profile here?
I was expecting this question as everybody is talking about this. Indeed, we are suffering from tariffs since a while for our production site in China shipping to The US market where tariffs tariffs in place since years, and this hasn't changed. For all the other production locations, we are not directly impacted as most of the conditions, as you anticipated already, are ex works contracts, and the direct impact is quite less. The indirect impact, which comes down to our customers' shipping conditions, we don't know exactly, but at the moment, we saw no significant impact so far.
Okay. Thank you. The next one is then actually a bit on the order intake and the order backlog. My calculations are right moving from the order backlog in the third quarter to the fourth quarter. Seems to be that there could have been some pushouts or cancellation or something like that.
So has this happened? That would be the first question. So and the second one is a bit could you help us on the energy management side? I know there are hard call offs, and then there are, let's say, frame orders. Could you give us an an idea how much, let's say, your your total perspective on the possible book for energy management is.
I'm not expecting an exact number, but rather this is maybe 1.5 times annual sales or or range or something like that. But just that we have a bit of a feeling how much in the is in the pipeline for energy management system between, let's say, hot bookings and, let's say, potentials from your frame orders?
To answer the first part of your question, well spotted. Indeed, we had a cancellation in the fourth quarter mainly driven by our Chinese location. That was the reason to to this drop. Second question is a little bit more difficult to answer, to be honest. We have frame contracts for our programs like battery thermal management systems for rail and road, which are in place since since year since we kicked into this business.
Same then for data centers already. Also, you could see this in our press releases over the course of last year. And we also have this for the converter stations, which is but this is more project driven. Overall, the visibility to answer in hard numbers is is at least in a in a double digit million euro range for 2025. We are not prepared to give you an exact and detailed number, but it is significant as energy management will also continue its growth, as already mentioned in the speech, over the course of 2025 as well.
Okay. Thank you. And then coming back to, yes, the cancellation in China. As you already mentioned, there is also the tariffs, maybe the combination. You had likely started the disposal process in the end of or in 2024, and you also have reduced, I think, your capacity in China.
So even if there would be a or let's say, if there is a Chinese cancellation, that seems to be you're well prepared for that. And is there any risk, let's say, in in China even if the order order intake would be more see a higher slowdown there? Or is it, let's say, even if it is on a very low sales level, you would not expect to make any losses there?
Yeah. Generally speaking, we have managed the Chinese location down to a breakeven level to make no further losses. It was part of our restructuring activities last year. For 2025, we will keep our production location in place, and we have all us in the visibility, at least for the first half of twenty twenty five, which makes us confident to continue this path.
Mhmm. Okay. Thank you very much. Oh, sorry. The disposal process.
The disposal process. What what do you mean with the disposal process in French?
Some some elements called non core, which were thought about to be, let's say, sold off.
Yeah. The disposal process hasn't changed. We have made clear decisions for what we wanna keep and what is no longer a part of our core activities. For certain reasons and also further negotiations, we we are not disclosing any details at this stage, but nothing has changed on this item.
Thank you very much.
You're welcome.
Thank you.
Yeah. Thank you, mister Augustine. So now I would like to turn to Marie Therese Grubner. Marie Therese, your line is now open. You have to unmute your phone, and it should work.
Does it work? Our system says you have you have muted yourself. So I I turn now to we can come back to you later, Marie Therese. I turn to Carlos who has also raised his hand. Carlos, please go ahead.
Okay. Hi, everyone. So can can you give more information about how 2025 has started? Obviously, there are the tariff issues. Also, the German government budget, I guess, maybe has changed sentiment. So any input in on order intake and sentiment?
Yeah. So 2025 has started in line with our expectations. We had a good start into the year. So far, tariff tariffs and the sentiment is not impacting us so far as already explained. So at the moment, everything is in line with our expectations.
Okay. And then another question. It seems to me that fourth quarter had really good technology margins at at 6.4. So do you view that as sustainable at this production levels or or not?
Finally, it depends on the on the volume and the product mix. Mix. And if we can continue the product mix and the volume going over the course of this year, we will also continue producing positive margins in technology.
Okay. Thank you.
Thank you very much, Carlos. So let's turn again to Marie Therese. I have unmuted you right now. Can you try it, please? Yeah.
Does it work? Hello? Are you there? It seems not to work correctly. So we will give it a third try later on.
I will now turn to the written questions we received. The first comes from Milko Brinkmann. Could you say something about the free cash flow prediction in 02/2025, please?
Yes. So with regards to the free cash flow, I cannot provide provide you details because we do not guide the free cash flow.
K. Thank you. The next question by mister Brinkman is, what is the capital expenditure in 02/2025?
The capital expenditure in 02/2025 or '24?
Two thousand and '20 '5.
Okay. So with regards to the capital expenditures, we also cannot provide you further these details as as we do not guide. But I can say that we are planning some investments. We already released an announcement that we bought a ground next to our facilities here in Zaasenburg, and we will or we are starting planning for this ground.
Thank you very much, Natasha. The next question is by Martin Helfrich, and I read it now. What needs to happen for the 02/2025 forecast to reach the upper EBIT range of 9%? Data center, the market entry into liquid cooling has been mentioned, and large orders have been secured. Do additional production capacities need to be built for these large orders?
What is the volume of these large orders in 02/2025? Yeah.
So first of all, as a higher we can take in the high volume orders, especially in energy management or print or analytics, the the better it is for our product mix and also for drive our margin towards 9%. And second part of the question is do we need to build up new or additional capacities for data centers? Yes. We do. We double the capacity at the moment to to to participate on this growth track, and we will double and double and double again if necessary.
And that's a simple mass. The more we double and double the capacity, we can use scale effects, and we are prepared for that, and that will drive margins. Same with what we are doing already in other programs of energy management and print, for example, where we have mass production for battery thermal management systems for rail and road or for the print industry.
Okay. Thank you very much. Mhmm. So I have additional questions by Stefan Michael. The first one, did the adjusted EBIT margin in the services segment of 16.4% in 02/2024 benefit from special effects? Can you maintain this margin level in 02/2025?
There have been no special effects. It was the same mix as usual, and we hope to continue on a high margin level in 2025, and it looks quite positive for the moment.
Thank you, Michael. And the next question from mister Michael. Do you expect any one off charges for 02/2025?
For the time being, we do not expect significant restructuring costs for the year '25, but, nevertheless, we are closely monitoring the market developments. And if we see the need to adjust our capacities according to the market development, then it may be that we will have restructuring costs.
Okay. Thank you very much. Next question. What is the business trend for the first quarter? Does this tend to support the upper or lower end of your annual outlook?
We will disclose numbers for the first quarter in early May. As you know and as already said before, we had a good start into the year, and this is fully in line with our expectations so far and, for sure, also for our guidance. And we anticipate that, as usual, the first half of the year is a little bit lower followed by a stronger second half. And, yeah, we we are in a good way in fulfilling this path at the moment.
Thank you. And now coming to the last question from mister Michael. What effects do you expect in the event of high US import tariffs? What measures can you take in response?
I think most of the answers are already given by other questions. For the future, we are planning to localize step by step production in The US, step by step if necessary to have more local content production, not only due to tariffs, also due to being closer to the final customers and to reduce logistic costs, but we do we are doing this step by step with a clear plan and no hurry and no rush.
K. Thank you, Michael. So, Carlos, I see your hand is raised. Do you have an additional question? Your line is open if you like.
No? Alright. So I do not have any written questions anymore, and there's no oh, a raised hand again by Carlos. Carlos? Hello.
Alright. So as there are no further questions, please let me hand back to our CEO, Michael Finger.
And thank you for your questions, ladies and gentlemen. As I said already, our next reporting date will be May 2025 where we will present our quarterly figures for the course first quarter this year. And another event in May is our AGM, which will take place as ever in the Halle Munsterland. We hope to see you in Munster in person on May 16. In case of any further questions, also to Carlos who haven't come through this day, Please call us at any time.
And also on behalf of my colleague Natasha, I would like to thank you for your patience and your support in Technotrans. Thanks for joining the call. Take care, and goodbye.
Thank you, and goodbye.