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 Dernesch. I'm Head of Investor Relations and Treasury. Today, I'm pleased to introduce our CEO, Michael Finger, and our new CFO, Mrs. Natascha Sander, 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 2024 financial year. Second, the development in our focus markets. Third, the financial performance of the group in detail. Fourth, our strategic roadmap and the outlook for 2025. After the presentation, the board members are looking forward to answering your questions in a Q&A session.
Before we begin, please note that the following presentation contains statements on the future development of technotrans 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 Natascha will do, please let me kick it off with some remarks on the overall environment and how we have performed throughout this year. 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 the InnoTrans last year, which was new to the world market.
Regarding infrastructure, we are still powering our facility in Holzwickede 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 AT Finance. From there to the political and economic environment that we have seen throughout last year, and we still have. Germany recorded a recession for a 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, won 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 EUR 238 million with an EBIT margin of 5.2%. Important to highlight, this is almost the same margin than in 2023, but with EUR 24 million less revenue and with EUR 2.1 million 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. We are happy to propose a dividend of EUR 0.53 to our AGM in May, which is in line with our long-term dividend policy.
Natascha will give you more details later. 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 thermal 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. This growth will continue also in 2025, as you could see from our press release out in February this year. Same story in stationary railway cooling 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 U.S. 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 for 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 EUR 81 million. We did what market leaders 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 ink unit temperature control with natural refrigerants inside. This is great engineering. The first Drupa after COVID was successful. Orders began 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. We expect a stable development in 2025. Turning to Plastics, this market was also affected by the economic uncertainty.
With EUR 51 million 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&D. We have developed 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 the sole supplier, we supply energy-efficient compact temperature control units for a sub-process of battery production to several locations of our customer around the world.
To expand our technology competence, we closed a partnership with Enerside. 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 Healthcare & Analytics, we closed the year with around EUR 15 million 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. That's not all. Each module contains less than 100 g 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 a moderate growth in 2025. Finally, our Laser market was most affected by the economic slowdown. We recorded a 25% drop in revenue to EUR 41.7 million. High precision cooling solutions, such as systems for the battery production or EUV laser for semiconductors, are running well. 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. 2025, it looks different. Laser is still suffering, we see another year of growth in Energy Management and also moderate growth in Print, Plastics and Healthcare & Analytics. It is worth to highlight that the importance of our core competence, thermal 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 Natascha. She will talk you through our financial performance.
Thank you, Michael, good morning also from my side. I am pleased to explain the financial performance of technotrans Group in the financial year 2024. 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 EUR 238 million in 2024, reflecting a decline of 9% from the previous year's revenue of EUR 262 million. 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 EUR 62.5 million and a growth of 4.4% compared to Q3. Despite the revenue decrease of EUR 24 million, we closed the year with an EBIT margin of 5.2% compared to 5.4% in the previous year. EBIT declined from EUR 14.2 million in 2023 to EUR 12.3 million in 2024. 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 Services share and optimized product mix. However, it must be noted that our EBIT includes restructuring costs of EUR 1.2 million related to the transformation of the organization as part of the ttSprint project. The EBIT, adjusted by the restructuring costs, ended up at EUR 14.4 million, with a margin of 6%.
Compared to last year, the operational performance of technotrans has improved. Let's have a look at the quarterly development of EBIT. As I said in the Q3 call in November last year, the adjusted EBIT margin of 6.9% in Q3 2024 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 Q4 2024 marks a new record level within the last five years. Drivers for this outstanding performance are mainly the efficiency measures from the ttSprint project that became fully effective, as well as tailwind from a favorable product mix. To sum it up, technotrans finished the year 2024 strongly with regards to profitability. Let's turn to our reporting segments now. First, Technology.
Revenue declined to EUR 170.7 million in 2024 from EUR 199.6 million in prior year, impacted especially by weaker market dynamics in Print and Laser. Energy Management within this segment delivered robust growth, demonstrating once again its strategic importance. EBIT declined to EUR 3.6 million in 2024. Efficiency gains, product mix optimization, strict cost management and short time work at several production locations could not fully compensate for missing scaling effects. EBIT margin of Technology decreased from 2.6% in the previous year to 2.0% in 2024. The EBIT of the segment includes EUR 1.1 million 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 Q4 2024 accelerated its growth to 6.4%. Let's turn to the Services segment. Revenue reached EUR 60.4 million, a slight decrease from the prior year's level of EUR 62.5 million. The focus markets, Print and Laser, are primarily impacted by the shortfall. At the same time, Energy Management and Healthcare & Analytics continued 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 Services efficiencies, strict cost management and a favorable product mix.
The Services segment accounted for EUR 1 million 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 Q4 2024 is mainly driven by lower revenue and restructuring costs. Let's move forward to ROCE and cash flow. ROCE came from 11.8% from 13.3% in the previous year. Without the earlier mentioned restructuring costs, ROCE would have been at 13.8%. Capital employed could be reduced compared to prior year. Our free cash flow totaled EUR 8.5 million, down from EUR 12.8 million last year, but still solid given the challenging environment. Gross profit declined by EUR 3.7 million to EUR 64.5 million due to the decrease in revenue.
Gross margin rose to 27.1% compared to the previous year was 26%. The improvement was the result of an optimized product mix with a higher share of Services business, along with the implementation of efficiency-enhancing measures. EBITDA reached EUR 19.2 million compared to EUR 21.2 million 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 EUR 7.3 million was generated coming from EUR 8.5 million last year. Earnings per share reached respectively EUR 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 EUR 0.53 per share for the fiscal year 2024. This corresponds to a payout ratio of around 50%.
We further improved our strong equity ratio to 60.5%, underscoring technotrans' robust financial position. Net debt decreased to EUR 18.5 million, down from EUR 20.7 million. Our leverage expressed by the net debt to EBITDA ratio remained nearly unchanged at 0.97 times, expressing the strong credit position on investment grade level. Our financial performance confirms that despite the year's 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 2024, 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 ttSprint project were implemented successfully.
However, to become more resilient, we see the urgent need to continuously work on identifying further efficiency potentials from pricing, production footprint and portfolio optimization, procurement savings, as well as a stronger Services organization. technotrans has a solid basis for further growth and profitability improvements in the future. With this said, please let me now hand back to Michael.
Thank you very much. To follow up on Natascha'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 II 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. As already mentioned, the margin of 5.2% in 2024 includes EUR 2.1 million 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 thermal 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.
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 EUR 245 million- EUR 265 million with an EBIT margin of between 7% and 9%. ROCE is expected to be in a range of 13%-16%. With that said, I would like to ask Frank to open the lines for the Q&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. I see the first raised hand by Stefan Augustin. Mr. Augustin, please.
Hello?
Yes.
Looks good. Thank you very much. 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 Technology, 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. Could you help me if this is rather something that is seen in Energy Management, or is it a bit more on the Healthcare 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.
Good morning, Mr. Augustin. 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 followed by Plastics and Healthcare & Analytics.
Okay. Thank you. The next one is then, a bit on the possible effects from U.S. tariffs. Let's say there could be a possibility, for example, that part of the data center cooling equipment finally moves to the U.S. 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? How is the risk profile here?
I was expecting this question, as everybody's talking about this. Indeed, we are suffering from tariffs since a while for our production site in China shipping to the U.S. market where tariffs are in place since years. 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.
Thank you. The next one is actually a bit on the order intake and the order backlog. If 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 push-outs or cancellation or something like that. Has this happened? That would be the first question. The second one is a bit could you help us on the Energy Management side? I know there are hard call-offs and there are, let's say, somehow frame orders. Could you give us an idea how much, let's say, 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 x annual sales or range or something like that. Just that we have a bit of a feeling how much is in the pipeline for Energy Management system between, let's say, hard bookings and, let's say, potential 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 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 years, since we kicked into this business. Same for data centers already. You could see this in our press releases over the course of last year. We also have this for the converter stations, which is, this is more project driven.
Overall, the visibility to answer in hard numbers, is at least in a EUR double-digit million 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. 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. You also have reduced, I think, your capacity in China. 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. Is there any risk, let's say, in China, even if the 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?
Generally speaking, we have managed the Chinese location down to a break-even 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 orders in the visibility at least for the first half of 2025, which makes us confident to continue this path.
Mm-hmm. Okay. Thank you very much.
Oh, sorry, the disposal process.
The disposal process. What do you mean with the disposal process in China?
Oh, there were 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 want to keep and what is no longer a part of our core activities. For certain reasons, and also further negotiations, 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, Mr. Augustin. Now I would like to turn to Marie-Thérèse Grübner. Marie-Thérèse, your line is now open. You have to unmute your phone, and it should work. Does it work? Our system says you have muted yourself. We can come back to you later, Marie-Thérèse. I turn to Carlos Aizpurua, who has also raised his hand. Carlos, please go ahead.
Okay. Hi, everyone. 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. Any inputs on order intake and sentiment?
2025 has started in line with our expectations. We had a good start into the year so far. Tariffs and the sentiment is not impacting us so far, as already explained. At the moment, everything is in line with our expectations.
Okay. Then another question. It seems to me that fourth quarter had really good Technology margins at 6.4%. Do you view that as sustainable at this production levels or not?
Finally, it depends on the volume and the product mix. 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. Let's turn again to Marie-Thérèse. I have unmuted you right now. Can you try it, please? Yeah, does it work? It seems not to work correctly. We will give it a third try later on. I will now turn to the written questions we received. The first comes from Mirko Brinkmann. Could you say something about the free cash flow prediction 2025, please?
Yes. With regards to the free cash flow, I cannot provide you details because we do not guide the free cash flow.
Okay. Thank you. The next question by Mr. Brinkmann is, what is the capital expenditure in 2025?
The capital expenditure in 2025 or 2024?
2025.
With regards to the capital expenditures, we also cannot provide you further details as we do not guide. 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 Sassenberg. We will or we are starting planning for this ground.
Okay. Thank you very much, Natascha. The next question is by Martin Helfrich, and I read it now. What needs to happen for the 2025 forecast to reach the upper EBIT range of 9%? Data center, the market and 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 2025?
First of all, as higher we can take in the high volume orders, especially in Energy Management, or Print, or Healthcare & Analytics, the better it is for our product mix and also for drive our margin towards 9%. The 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 participate on this growth track. We will double and double and double again, if necessary. That's a simple math. 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 that, 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.
Mm-hmm.
I have additional questions by Stefan Meichel. The first one, did the adjusted EBIT margin in the Services segment of 16.4% in 2024 benefit from special effects? Can you maintain this margin level in 2025?
There have been no special effects. It was the same mix as usual. We hope to continue on a high margin level in 2025. It looks quite positive for the moment.
Thank you, Michael. The next question from Mr. Meichel. Do you expect any one-off charges for 2025?
For the time being, we do not expect significant restructuring costs for the year 2025. Nevertheless, we are closely monitoring the market developments. 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. As already said before, we had a good start into the year. This is fully in line with our expectations so far and for sure also for our guidance. We anticipate that as usual, the first half of the year is a little bit lower, followed by a stronger second half. We are in a good way in fulfilling this path at the moment.
Thank you. Now, coming to the last question from Mr. Meichel. What effects do you expect in the event of high U.S. import tariffs? What measures can you take in response?
Yeah. 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 U.S., 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. We are doing this step by step with a clear plan and no hurry and no rush.
Okay. Thank you, Michael. Carlos, I see your hand is raised. Do you have an additional question? Your line is open if you like. No? All right. I do not have any written questions anymore. Oh, a raised hand again by Carlos. Carlos? No. All right. As there are no further questions, please let me hand back to our CEO, Michael Finger.
Thank you for your questions, ladies and gentlemen. As I said already, our next reporting date will be May 6, 2025, where we will present our quarterly figures for the first quarter this year. Another event in May is our AGM, which will take place as ever in the Halle Münsterland. We hope to see you in Münster 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. Also on behalf of my colleague, Natascha, 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.