Good morning, everyone. Warmly welcome to follow the direct webcast presentation of Relais Group Financial Statements for 2024, live from the Music Hall here in downtown Helsinki. I am Arni Ekholm. I am the CEO of the company, and unfortunately today, Thomas is sick, down with a heavy stomach flu, so I have the pleasure to take also the CFO part today, so bear with me. The presentation will take about 20-25 minutes, and for those of you following this presentation live, as usual, you have the chance to submit some questions to us, and I'm more than happy to answer them as best as I can at the end of the presentation, and we will then take them at the end from your online input, so please be active, and that's why we are here to answer your questions, so this time I am only here myself.
Good. Looking at 2024, what a year. Highest net sales, highest EBITDA, highest net profit and earnings per share in the history of Relais Group. So it's really been a fantastic year. We all know that the economic, let's say, atmosphere and markets have been quite tough, especially in Finland, partly so in Sweden as well. So with that in perspective, I think it's a marvelous performance of our teams. So in this connection, I want to really, from the bottom of my heart, thank all our over 1,200 professionals who have made this result possible. And also I want to thank all our customers and business partners, our board of directors, and let's say other stakeholders for your support during this record year. So it's a record year, a year of all-time highs, which I will then go through in more detail in my presentation.
This is a growth story of Relais. We are a growth company and we intend to continue growing in a profitable way also in the future. That's the whole idea of the company, to grow in a profitable way. The company was founded in 2010, only having basically one asset in Finland, and from that to 2019, we grew almost three times. And then in 2019, when we were introduced in the Helsinki Stock Exchange market, from that again, we have more than, let's say, tripled from 2019, tripled the sales and more than doubled the profit of the company in a controlled manner, making disciplined acquisitions as we have promised to the market and to you, the shareholders, so the key is the shareholder return and to increase the value of the company at every time, every year, constantly.
Looking back from the time we were introduced in the stock market five years ago, had you invested EUR 1, it would now be worth EUR 2, including all the dividends we have paid also during that time. And then looking at the Helsinki Stock Exchange index or the OMX Helsinki 25, so we have actually outpaced, outperformed the performance of the index with more than 3x, 3.4x. So from that perspective, we have done what we have promised. We have delivered significant shareholder value since the IPO. And we have also distributed EUR 30 million as dividends to you, dear shareholders, during that time. And also partly made some share purchases, repurchases. So the success of the performance we have organically and the acquired growth is laying a very solid foundation for the future growth and shareholder value creation.
For those of you who are not so familiar with Relais Group, what do we do? I will spend a couple of minutes on explaining who we are and what we do. In the big picture, you can see the map of the Nordic and Baltic countries with all the orange-colored dots here depicting the locations where we are around the Nordic countries. You can see that there's the, let's say, the weight, the heavyweight is in Sweden and Finland. From a helicopter perspective, you can divide the business of the group into two bigger business areas, Technical Wholesale and Products, which stand for two-thirds, 67% of net sales, and then a relatively new part of the group since a few years back, commercial vehicle Repair and Maintenance, which is exactly one-third of the sales.
Then you can see the different brands and brand identities we have across the region. This also tells the story that we are not a heavy integrator. We acquire good companies, but we keep their personality and face against the customer. Then we draw the synergy benefits, if you will, behind the scenes with common policies and systems. Other than that, the companies are entrepreneurially driven and foster independence and autonomy. Of course, we also have transparency to run this group of companies. We have about 20 companies in the group. The two-thirds, the Technical Wholesale and Products, can also be divided into two major groups, Spare Parts, and then Lighting and Equipment, partially different types of business models and markets.
So the spare part wholesale business we have is based on ABR Reservdelar in Sweden, Huzells Tunga Delar in Sweden, and then Startax in Finland, Estonia, and Norway, who are predominantly focusing on Spare Parts with a heavy focus on commercial vehicles as well. And then lighting equipment, mostly our own brands, as the name says, equipment is basically everything you need for your professional vehicle, mostly electric vehicle, electrical equipment going to all types of vehicles, whether it is electric vehicle or then a traditional ICE vehicle. Right. So looking at the market, this is the Nordic and Baltic market. What we call the vehicle lifecycle enhancement is the core of our business. So basically everything that happens to the vehicle after it has been imported to the marketplace, to the country, up to the moment when it's demolished and recycled. So that's the aftermarket.
Why are we active in the aftermarket is because there's the biggest value creation potential. It's also a market that is growing constantly. We serve all types of vehicle. We have equipment and Spare Parts for all types of vehicle, as you can see on the left side. Less focus so on the two-wheeled vehicles and predominantly on the commercial vehicle side and trucks and lorries and buses and excavation machines and so on and so forth. If you look at the lifecycle enhancement part, how you add something to the vehicle, whether it's a spare part or you repair it or you put some better lights on it or better power management, it's a huge market with a lot of acquisition opportunities. It's a fairly fragmented market, 90 million vehicles steadily growing.
The age of the car park is also increasing, creating need for repairs and Spare Parts. Complexity of Spare Parts, I mean, the Spare Parts and Equipment is getting more and more complicated and electrified, which adds value to the market. And also the electrification opens huge new possibilities for the aftermarket, which we are, of course, developing together with our customers. E-commerce is increasing generally. I mean, the need for last-mile deliveries in urban areas and agricultural areas as well requires a lot of service and Spare Parts and equipment. And then digital disruption, the way we can address our customers and reach to our customers is opening new exciting possibilities. So we estimate that this market is about EUR 20 billion, give or take, in the Nordic markets, depending on how you define some of the borderlines of these sectors.
But it's big enough to explore for many, many, many years moving forward. Let's then zoom into 2024, more into detail, what was behind this fantastic result. As I said, a record year for Relais Group. The comparable EBITDA was almost EUR 37 million, which is a growth of 27%. And the EBITDA percentage, comparable EBITDA percentage, which is a KPI that is very commonly followed, grew from 10.1% to 11.4%. And the net sales grew 13%. And I will later explain what part of it is organic and what is an acquired growth. And a very interesting point and very positive point is the gross margin percentage going up from 45.4% to 46.9%. And this is a result basically of a product mix and a business mix, which I will get back to later.
Recapping, tripling the sales and more than doubling the profits in five years tells the story of a growth company, which is a profitable company as well. We have two geographical segments, Scandinavia and Finland and Baltics, where for the last few years, Scandinavia has been a stronger market. And now it's really delightful to see that the Finnish Baltic market has also picked up during 2024, partially powered by the cold start of the year, which then has more effect in the Finnish business mix that we have. Wrapping up some of the key numbers, we are over the 300 million EUR turnover mark by far at the moment, 322.6, a growth of 13%, as I said. EBITDA, I explained about.
One quite interesting point or positive point is earnings per share, which is important from a shareholder point of view, of course, growing from EUR 0.76 to EUR 1.02, which is a growth of 35%. That's, of course, a result of the growing profit of the company. Two interesting metrics, important metrics for a growth company and compounder company who is allocating capital is the metrics around how effective are we in allocating capital and what kind of return do we get for the allocated capital. That has grown from 10% to 13.2%, the return on capital employed. The return on equity has grown to 16.2%. All in all, a year of all-time highs for the company.
Then zooming deeper into the business areas, the first one, the two-thirds of our business, Technical Wholesale and Products, has a very good organic growth as well. It was 9% organic growth. And the acquired growth was the total growth was 13%. So it's predominantly coming from organic growth. And this is, as I said, mostly Spare Parts-driven development in the beginning of the year when there is a very long constant period of -1 5 degrees Celsius, -20 degrees Celsius that boosts the sales of certain electrical Spare Parts, as we saw when we reported the quarter one results, which then gave a boost to the rest of the year as well. And then the, let's say, the fourth quarter was stronger than probably anybody could have expected, even if the temperature didn't really boost the sales. It was more all across the companies. We had very positive development in quarter four.
A topic that I want to specifically lift up in this context is the weight and the importance of own labeled products, we call the Private Label Products, which are products that we are branding ourselves, and we are in the process of creating a product line in Spare Parts we call NPD, Nordic Product Development, and we aim to grow the share of that sales during the next coming years into a significant part of the spare part business, and that will also drive the profit of the Spare Parts sector in the future. Lighting, which is a part of the Technical Wholesale business, a very important sector for us, almost 20%, continued to grow. It has grown basically all the time during the last years. We have two spearheads, if you will, Strands, which is the kind of export-driven brand that is really growing fast in Europe.
And then more focused in Finland and Nordic markets, Optibeam, which is a brand that we have in our portfolio, developed by Startax in Finland. And there we made a relaunch in a way and rebranding of Optibeam and introduced a lot of new products into the range and is starting to bear fruit already now. As we were looking after the quarter three, the results, we could see that the lighting market was slightly delayed, which we then also touched in the last financial statements review a few months ago. Luckily, that demand came back in the quarter four. So a relatively bigger part of it came now quite late in the year. And especially the online sales, which is part of our business. We have a webshop that we are running, ourselves focused on lighting, made a huge recovery.
We have also done some cost efficiency measures there. That was a good contributor to the profit development in quarter four. Moving to the one-third of our business, Repair and Maintenance, net sales growing with 15%, organic 7%. The rest of the growth came from two acquisitions that I will come back to. We have two main concepts, Raskone and STS in the group, and then a smaller company called Skeppsbrons. We made two very successful and tactical acquisitions in this sector, A.M. Alqvist in Finland, who is focusing on the trailer market. Then Team Verkstad, who is, let's say, a more traditional truck repair shop, also serving trailers, which then complete the service offering what we have for the customers, both in Finland and Sweden, in a very, very good way.
It's been fantastic to welcome the Alqvist and Team Verkstad teams into our group. Retail is detail, you sometimes say, but I think Repair and Maintenance is also a lot of details. You have, like we have, about 40, even more than 40 workshops at the moment. Even small movements can have a huge effect. You have the fixed cost of the workshops and the personnel. If the customers don't come, then it's not a good business. But if the customers come and the capacity utilization is high, then it's really going almost directly to the bottom line. It's all about how efficiently you run the business and how good you serve, how well you serve the customers so that they come back to you.
This is a constant benchmarking and development that we have continuous improvement, really raising the level and quality of this business. We have invested a lot in human resources development to retain the personnel and recruit personnel because having enough mechanics is a key in this business. I think we have managed well in that part. All in all, since we have bought these businesses, we have doubled the profitability of these businesses. They have become a very significant contributor for profit and cash flow in the group. We are naturally looking at further acquisition opportunities in this sector. Very quickly, just a few pie charts. Our business consists of 55% of our business comes from the Scandinavian markets, including some export from the Scandinavian markets, and then 45% is Finland.
This is fairly static from last year, but then also showing that a major part of our business actually comes from outside our home base. This one I basically already showed in the beginning. The two-thirds and one-third, both groups have grown, which is good. Relatively, the Repair and Maintenance has taken more share this year, partially coming from the acquisitions as well. Finally, from the pie chart, the Product Group Sales, you can see here the Repair and Maintenance we report as a product group as well. It includes also the sales of labor. The Spare Parts grew because of the, let's say, the favorable weather conditions and also the good market, stable market situation. Relatively, the part of lighting has, in relative terms, come down a bit because Spare Parts and repair maintenance have grown.
A few words about acquisitions. As I said, we did two well-targeted acquisitions last year, not huge ones, but still relevant sized. Of course, we would have wanted to do more, and we were engaged in a lot of different types of negotiations and discussions. We are also very disciplined, though, in the way we allocate capital because we need to make sure that the shareholder value and the value creation stays on a good level. I mean, there's no point of overpaying just for the sake of buying a lot of companies. Then the equation doesn't really work that well. We are disciplined. We do targeted acquisitions, strategic acquisitions. I will speak a little bit more about how the situation looks like moving forward. We continue to scan the market all the time and engage in several discussions, as I said.
You win some, you lose some, which is, of course, some of the acquisitions are binary by nature. That is, either you get them or you do not get them. What type of companies are we looking for? Companies who have a stable profit track record, who have proven their resilience in tough times. We are seldom looking for, or actually never looking for, distressed companies that are in a crisis because we simply do not have the resources to start spending and defocusing from other stuff into lifting these troubled companies up. What we do do is, of course, to find reasonable companies that have maybe a turnaround behind them. We can see, and we have been able during the due diligence process to analyze a growth path together with them for the future.
We want to see a well-managed company with a good management team who is committed and then foster the entrepreneurial spirit in the company to give the company a lot of freedom. Some numbers, I mean, technically, the market, as I said, is fragmented depending on where you draw the lines. We currently have monitored over 500 companies. The funnel gets, of course, as I said, we are disciplined. The funnel gets then narrower and narrower, looking at what type of companies fill these criteria that we set before engaging in negotiations. We have typically 10-20 different kinds of discussions going on at any given time. They are not always the same, of course, because some of them then drop out from the discussion. We aim to continue this pace and even accelerate it this year and moving forward.
Historically, we have done three to four acquisitions per year. A few words about sustainability. That's been really, let's say, a focus area this year and partially also coming from the CSRD directive, which is then setting certain demandments for a company of our size. We finalized the group-level Greenhouse Gas Protocol emission calculations last year, including also the Scope 3 emissions. We conducted for the first time a group-level employee engagement and satisfaction survey, which gave very encouraging results to then also build on. We will publish the sustainability report on March 14, so in less than, or actually exactly in a month from now. The report has been prepared according to the European Sustainability Reporting Standards.
The information presented in the environmental, social, and governance sections is based on the double materiality analysis that we have conducted last year, which was, let's say, an extensive exercise from a resource point of view, but a very useful one. Very short outlook 2025, we do not give numeric guidance, as is our policy. How do we look at year 2025? We have a strong year behind us, and that creates a solid platform to continue the positive trend during 2025 as well. Looking at the markets, as it looks like now, the markets are quite stable. We do not foresee any dramatic changes, which would be in a circle of our, let's say, what we can then affect in that perspective. Looking at macroeconomic effects, of course, is not our business so much to be able to do something about.
We are confident. We are looking at this year with confidence. We aim to increase the pace of the acquisitions and with that to create value for our shareholders in a disciplined manner and also empowering a larger part of the organization to focus on acquisitions this year. All in all, we feel that we are well positioned to continue our growth story also during 2025 and beyond, as it looks now. Finally, before taking some of Thomas's slides, summing up as an investment, what is Relais Group as an investment? I mean, we are an active consolidator or smart compounder with a clear focus on the vehicle aftermarket. We are not going all around the place. We are focusing on where we can make best value for the investors.
We have a track record of highly successful M&A that we have done in the past in a fragmented industry, which means that there are also huge opportunities in the future. The market is large and is growing. The amount of vehicles is growing. The amount of mileage is growing. The age of the car park is growing, and there is also new technology coming to the market. The platforms we have, I mean, whether it is technical wholesale or Repair and Maintenance or lighting, are scalable platforms where you can draw synergy benefits between also these business areas. That also gives organic growth potential. Looking at the cash generation, we have a very strong cash generation that I will show later. That again lays a good foundation to be able to continue our growth story as a growth company we are.
I think this is also a kind of psychological or philosophical approach we have for this business. We do not have this one-size-fits-all type of approach where everybody has to do everything in the same way. We do benchmarking, but we do very light integration, and we want to foster the independence and entrepreneurial culture in the companies. At the same time, of course, making sure that we get the synergies and back office efficiencies. Normally I would ask our CFO, Thomas, to take over these slides, but as he is home with the stomach flu, sending him a lot of regards from here, and I hope he recovers if he's watching this show. Financial review, a few slides. I have basically explained some of this before, but just in a graphic way, it's good to see here.
You can see on the left side the net sales, the growth of quarter four, meaning that this was a very strong quarter, 12% plus on the last quarter. That's coming from basically all business areas and geographical areas. It was a very even performance and also organic growth. EBITDA is really heavy growth in the last quarter, again coming from basically all of the businesses. Something that has been kind of playing in in the past has been this Swedish Krona development that has given us a kind of negative effect in a reported level. This time the quarter four did not have any material impact from the currency effects. I mentioned in the beginning that the gross profit was a very, very positive development, and we can see it here. There's a lot of factors behind it.
Partially it comes from the business mix because inherently the Repair and Maintenance business has a higher gross profit margin than the wholesale business. Then again, the EBITDA margin is usually higher in the wholesale business than in the Repair and Maintenance. Looking solely on the gross profit and gross margin development, you can see that there's also a result of the strong organic growth that we have had in Technical Wholesale and Products business. As we are growing as a group, even if we do not integrate heavily the companies, we do, of course, negotiate with the suppliers as a group. We put together the volumes of the group, and that is reflected on the purchase terms and prices that we manage to get from the suppliers.
That's one secret source, or not even a secret source, is one building block of the way we operate that we can draw benefit clearly from that type of volume effect. Operating expense is really nothing dramatic here. Percentage-wise, very stable OPEX, mostly coming from acquisitions last year. It is a very stable level. Net working capital is a quite vital KPI for the type of company that we are having also a lot of wholesale businesses. On the right side, you can see the inventory. I would like to maybe take out a few points here so that even if the inventory and net working capital turnover actually improved. We are growing. Of course, you need to grow inventories, but we try to do it in a way that we constantly improve the net working capital efficiencies.
It's already on a high level, yes, but we want to avoid a situation where we just increase inventories all the time. It's a tough equation because you need to make sure that you can serve your customers as well. It's an equation of stock turnaround and gross margin, basically, is the equation that you need to make sure that is all the time on a good level. Trade and other payables has increased as well, which is in a way a good sign. All in all, quite stable development and the efficiencies have grown, but we have an eye on the inventory situation as well. A few words about the cash conversion, very positive development in quarter four. You can see here the cash conversion, 112%, and on a yearly level, 58%, which is an increase from 55% to 58%. That's driven by the improved profitability.
This is before the, and this is including partially the net working capital improvement as well from relative terms in quarter four. There are some interest, let's say, higher interest rate and tax payments in January and December that play in a negative way to the quarter four cash result, cash conversion. Cash flow summary, cash flow from operations grew from EUR 30.6 million to EUR 34.8 million, a direct result of the improved profitability, slightly weighed down from the full year level development in net working capital. Cash flow from investing activities was EUR -7.2 million. That was a decrease. There was a slightly lower investment in intangible and tangible assets. There was the amount that we spent for acquisitions as well. Financing activities, EUR -27.7 million, roughly in line with last year, normal repayments of lease liabilities.
Dividends paid EUR 8 million, which was a growth last year. There were some proceeds from non-current loans and borrowings of EUR 3 million. Looking at the net debt, interest-bearing net debt. The leverage, which is usually a typical KPI or key performance indicator people follow on a growth company like us, went down quite dramatically from 3.47 to 2.72. If I pick up something from here, the loans from financial institutions, you can see that we are amortized, repaid according to the program that we have. The cash situation is stable, which means that the total cash plus unused facilities was roughly in line with last year, roughly EUR 30 million. Net financials, looking at net interest expenses, higher in January-December.
The interest rates, even if they have now started to go down, as we all know, the Euribor has come down from last summer. The rhythmic of our, let's say, financing is that the effect of the lowering interest rates comes with a delay of about six months. This year we expect lower net interest expenses clearly than was the case last year. There is a kind of an, I wouldn't call it audit, but a speciality regarding the FX net gains and losses because some part of our debt is in Swedish Krona and some part in euro. There is this kind of internal exchange rate difference that we have to book into the books. It has no cash flow effect actually, but it kind of is seen here on the interest expenses and foreign exchange gains and losses.
Summing up the balance sheet and financial position as of last of December 2024, total assets EUR 330 million, total equity EUR 117 million, interest-bearing net debt, as I said, EUR 141.3 million, leading to a net gearing of 120%. Maybe just to recap, this EUR 141 million also includes the lease liabilities coming from mainly the workshops and the distribution centers we have. The cash assets, EUR 9.6 million, roughly in line with the previous year. Equity ratio has improved from 33.6% to 35.6%, also improvement on that area. Some topics that I partially touched in the beginning were these return metrics. There is significant improvement in all key capital return metrics. That is very important for a company like us. As I said in the beginning, allocating capital and trying to, so to say, get bang for the buck.
The return on net working capital is on a very high level, increased from 44% to 53.4%. Return on capital employed increased from 10% to 13.2%, which is a very good level. As a compounder, we would like to see moving forward even higher return on capital employed in the coming years. That is what we are aiming at. Finally, return on equity increasing to 16.2%. Our long-term financial target that was published in 2023 is still valid. We aim at reaching a pro forma comparable EBITDA of EUR 50 million by end of 2025. Pro forma meaning that this is including the full year effect of any acquisitions that we do. This is a target that we have published and it is still valid. Finally, the dividend proposal from the board for the AGM.
The board of directors will propose to the annual general meeting that the dividend of maximum EUR 0.50 to be paid for the financial year. Of this dividend, EUR 0.30 per share would be paid in April 2025. In addition, the board of directors proposes that the annual general meeting authorizes the board of directors to decide at its discretion on the distribution of maximum additional dividend of EUR 0.20 in November 2025. Fifty divided into two parts where the 0.30 is now, let's say, proposed to the AGM paid in the spring. The latter part is then decided at the board's discretion, the 0.20. Earnings per share, I already said, was 1.02, meaning that this proposed maximum dividend per share would be 49% of earnings per share.
The distributable funds amounted to a little over EUR 70 million. The remaining non-restricted equity is proposed to be retained in shareholders' equity. This is the board's proposal that will be then presented to the annual general meeting. Finally, it was a long monologue. Thanks for bearing with me this time. I hope we have some good questions or nasty questions, whatever questions I will try to make my best to answer. Heikki.
Yes, we have at least quite a few questions.
Good.
Let's start one from Pia Rosqvist-Heinsalmi from Carnegie. Any comments on the share of Repair and Maintenance of your total profits, EBITDA, given your comment on that the area has become a major profit contributor to the group?
Thank you, Pia.
We do not report the business area profitability, but let's say on a rough level, it is approaching the same, let's say, the average EBITDA % that we have in the group. It is mathematically less than the one-third, but it's approaching that. Complicated answer, but I'm sure Pia will understand.
The next one comes from Petri Gostowski, Inderes. Can you give some more color on your plans regarding your own NPD products? To what extent can you push these into your own Repair and Maintenance shops?
Thank you, Petri. An excellent question. The focus of the NPD product line is currently maybe more on the passenger car side than on the commercial repair vehicle side, meaning that then our ability to, if you will, push them through our own channel is more limited than if they were heavy commercial vehicles Spare Parts.
We also have a few items for the commercial vehicles and we'll have even more in the future. This is more on the passenger car side to offer competitive high-quality products for our customers who then sell them further to the workshops.
Good. Joni Sandvall from Nordea. You are not providing guidance for 2025, but see stable market operating environment. How do you view first half outlook given somewhat warmer winter conditions?
Yeah, thank you, Joni. Of course, it will be hard to beat the start of the year. The major cold period last year in 2024 was the January and half of February. From a market perspective, it's still early days to really foresee how the rest of the quarter one is going to go and quarter two. I think there are positive signs though, even if the weather is warmer.
I'd say it's an uphill battle, of course, to beat the January-February markets, but we are pushing.
Joni continues. You aim to increase the pace of your M&A actions. Where do you see most potential in terms of product groups and geographies? Do you have strict ROC target on acquisitions?
I take the last question first. Let's say not yes and no. I mean, there's not a golden number that has to be the return on capital employed, but we need to have a path which makes the equation work. I mean, what type of multiple we are going to pay for the company. Turning that around, you actually end up in a return on capital employed number. Whether it's exactly always the same from business area to another is not always the same.
But we intend with all the acquisitions, of course, to improve the general return on capital employed in the group. Where do I see the biggest potential geographically? Mostly in the Nordic markets. As I said before, we are also looking at adjacent markets. When it comes to lighting business, we are also looking, I mean, lighting is basically global as it is from the product company point of view. It would be not likely that we would be looking very much outside the Nordic markets. We see opportunities in repair maintenance. We see opportunities in product companies. We see opportunities in distribution of Spare Parts. Basically everywhere of these main sectors, there are opportunities of different size and different maturity as well.
Good. Joni continues. You mentioned aim to increase private label shares significantly.
What is the share of Private Label Products currently and what is the target level in medium term? Can you give any indication of how much higher gross margin Private Label Products command?
Yeah. Firstly, the gross margin, depending on the product group, on the Spare Parts, it is remarkable. I mean, it is not a few percentage points. It can be some tens of percentage points as well in certain products. The share of this NPD product line for the time being of Spare Parts is still roughly below 5%. I'm not giving a kind of target for what year we are going to reach it. Generally, if we are looking at peer companies in Europe and in the States, a good level of private label of the sales would be about 20%.
Having said that, almost all our lighting business, which is about 19% of our business totally, is already private label, our own label. From that perspective, we already have roughly 20% of our sales in our own brands. Looking at the Spare Parts, there is still a lot to do and good potential.
Couple of more from Joni.
If I go back to the gross margin, what I meant was on the product level, there can be huge differences. You would not expect the general gross profit of the group to go up with tens of percentages.
Good. You mentioned encouraging development in online consumer sales. How much of this is due to the shift from Q3 and have you increased marketing spending in consumer business?
We have actually decreased marketing spending because there's this old joke that, I mean, only 50% of marketing is efficient, but the problem is that you don't know which 50% it is of the 100% you are spending. We were not happy with the firstly, the marketing cost in online has increased dramatically because of the competition dynamics in the platforms is quite interesting from our point of view. I mean, the price of advertising has really increased. I mean, it's almost like a duopoly situation. We started to test what the effect of reducing the marketing was. We saw that actually we had spent too much money on marketing without effect. We redirected the marketing. We decreased the marketing and focused it on the right things to do. Hence the profitability of the online business has recovered nicely.
I would say it's more like, I think the consumer confidence has started slowly to get back. It's not there where it used to be in 2021 or 2022, but it's slowly coming back. It's encouraging.
The last one from Joni. Your strategy targets are for 2025. Are you aiming for new targets and maybe a CMD event during 2025?
I think it's quite natural that when because the previous strategic long-term target ends actually now, that it's of course natural that the company would at some stage look at how do the targets look like for the next period stretching to 2030. Whether we are going to have a capital markets day, I like the idea.
Haven't yet decided on that one, but I would say the pace of acquisitions we hope to have this year, I think also paves the way to then communicate with the markets more about the future strategies.
Tomi Saarinen from Inderes. How challenging do you consider the early 2024 comparison period to be? Have you achieved growth at the beginning of 2025?
We do not comment, let's say, the performance during the period, but I'd say I was expecting a tougher decline on the market. There is decline in certain product groups. You are not selling as much starter batteries, of course, because it's not cold. The jury is still out. I mean, there is a cold period actually forecasted now for the next two weeks. Let's see how the battery sales picks up.
I would be lying if I said it's not a tough comparison, but it's early days to say how it's going to pan out.
Another one from Tomi. Personal expenses grew significantly faster than the revenue. Comments on the drivers of wage development?
I think this purely comes from the acquisitions we have done. The amount of personnel has increased quite much with about, I think, 200 people. The salary development is perfectly in line with the market development of most of our employees are covered by the, let's say, collective bargaining agreements. I don't have the exact number of the salary solutions, but they are not deviating from the general line in those markets. It's purely mostly coming from the increased amount of personnel. Nothing spectacular on kind of overpaying the market.
Good.
The last question comes from Petri Gostowski Inderes. Can you give some indication on what kind of impact on gross margin does the volume effect have on purchase prices given your bigger size? I'm referring to your better negotiation terms when you are buying more as a group.
I would love to give an exact answer, and I would love to know it myself as well, but it's a very dynamic equation of what to compare. What is the starting point you compare with getting better terms? It's not always only about price. It's also about payment terms because getting maybe 30 days more payment time is also valuable for us, but you can't really see it on gross profit. If I would have to give any number, I mean, we are talking about maybe overtime shifts of 1-2%.
We're not talking in general about 10% or something like that because we were already on a high level, but you can always nudge and put together the volumes. It is not unsignificant, but it's not like you could not get all of a sudden 10% better prices.
We actually do have one more question from Joni Sandvall, Nordea.
Great.
Do you see any risk from the current labor negotiations and strikes in Finland?
Not directly, no. Not seeing the full picture. I think we have some experience from past strikes of transport strikes and stuff and the harbors and everything. There were some delays when the harbors were on strike a couple of years back for the lighting business, but we are out of the lighting season right at the moment. I'm not from that perspective seeing anything.
I would be surprised, I won't start to kind of have a crystal ball here of how the strike situation is going to be. It is really hard to say, but we are not kind of expecting any major disturbances. If there are some general strikes, we just have to cope with it.
That is all for the questions.
Thank you very much. Thanks for following. I wish everybody a nice continuation of the winter. Thank you.
Good morning, everyone. Warmly welcome to follow the direct webcast presentation of Relais Group Financial Statements for 2024, live from the Music Hall here in downtown Helsinki. I am Arni Ekholm. I am the CEO of the company. Unfortunately today, Thomas is sick, down with a heavy stomach flu. I have the pleasure to take also the CFO part today. Bear with me.
The presentation will take about 20 to 25 minutes. For those of you following this presentation live, as usual, you have the chance to submit some questions to us. I am more than happy to answer them as best as I can at the end of the presentation. We will then take them at the end from your online input. Please be active. That is why we are here to answer your questions. This time, I am only here myself. Good. Looking at 2024, what a year. Highest net sales, highest EBITDA, highest net profit and earnings per share in the history of Relais Group. It has really been a fantastic year. We all know that the economical, let's say, atmosphere and markets have been quite tough, especially in Finland. Partly so in Sweden as well.
With that in perspective, I think it's a marvelous performance of our teams. In this connection, I want to really, from the bottom of my heart, thank all our over 1,200 professionals who have made this result possible. I also want to thank all our customers and business partners, our board of directors, and let's say other stakeholders for your support during this record year. It's a record year, a year of all-time highs, which I will then go through in more detail in my presentation. This is a growth story of Relais. We are a growth company, and we intend to continue growing in a profitable way also in the future. That's the whole idea of the company, to grow in a profitable way. The company was founded in 2010, only having basically one asset in Finland.
From that to 2019, we grew almost three times. In 2019, when we were introduced in the Helsinki Stock Exchange market, from that, again, we have more than, let's say, tripled from 2019, tripled the sales, and more than doubled the profit of the company in a controlled manner, making disciplined acquisitions, as we have promised to the market and to you, the shareholders. The key is the shareholder return and to increase the value of the company at every time, every year, constantly. Looking back from the time we were introduced in the stock market five years ago, had you invested EUR 1, it would now be worth EUR 2, including all the dividends we have paid also during that time.
Looking at the Helsinki Stock Exchange index for the 25 OMX Helsinki, we have actually outpaced, outperformed the performance of the index with more than three times, 3.4 times. From that perspective, we have done what we have promised. We have delivered significant shareholder value since the IPO. We have also distributed EUR 30 million as dividends to you, dear shareholders, during that time, and also partly made some share purchases, repurchases. The success of the performance we have organically and the acquired growth is laying a very solid foundation for the future growth and shareholder value creation. For those of you who are not so familiar with Relais Group, what do we do? I will spend a couple of minutes on explaining who we are and what we do.
In the big picture, you can see the map of the Nordic and Baltic countries with all the orange-colored dots here depicting the locations where we are around the Nordic countries. You can see that there's, let's say, the weight, the heavyweight is in Sweden and Finland. From a helicopter perspective, you can divide the business of the group into two bigger business areas, Technical Wholesale and Products, which stand for two-thirds, 67% of net sales. A relatively new part of the group since a few years back, commercial vehicle Repair and Maintenance, is exactly one-third of the sales. You can see the different brands and brand identities we have across the region. This also tells the story that we are not a heavy integrator. We acquire good companies, but we keep their personality and face against the customer.
We draw the synergy benefits, if you will, behind the scenes with common policies and systems. Other than that, the companies are entrepreneurially driven and foster independence and autonomy. Of course, we also have transparency to run this group of companies. We have about 20 companies in the group. The two-thirds, the Technical Wholesale and Products, can also be divided into two major groups, Spare Parts, and then Lighting and Equipment, partially different types of business models and markets. The spare part wholesale business we have is based on ABR Reservdelar in Sweden, Huzells Tunga Delar in Sweden, and then Startax in Finland, Estonia, and Norway, who are predominantly focusing on Spare Parts with a heavy focus on commercial vehicles as well.
Then lighting equipment, mostly our own brands, as the name says, equipment is basically everything you need for your professional vehicle, mostly electrical equipment going to all types of vehicles, whether it is electrical vehicle or then a traditional ICE vehicle. Right. Looking at the market, this is the Nordic and Baltic market. What we call the vehicle lifecycle enhancement is the core of our business. Basically everything that happens to the vehicle after it has been imported to the marketplace, to the country, up to the moment when it's demolished and recycled. That is the aftermarket. Why are we active in the aftermarket is because there's the biggest value creation potential. It is also a market that is growing constantly. We serve all types of vehicle.
We have equipment and Spare Parts for all types of vehicle, as you can see on the left side. Less focus so on the two-wheeled vehicles and predominantly on the commercial vehicle side and trucks and lorries and buses and excavation machines and so on and so forth. If you look at the lifecycle enhancement part, how you add something to the vehicle, whether it's a spare part or you repair it or you put some better lights on it or better power management, it's a huge market with a lot of acquisition opportunities. It's a fairly fragmented market. 90 million vehicles, steadily growing. The age of the car park is also increasing, creating need for repairs and Spare Parts. Complexity of Spare Parts, I mean, the Spare Parts and equipment is getting more and more complicated and electrified, which adds value to the market.
Also, the electrification opens huge new possibilities for the aftermarket, which we are, of course, developing together with our customers. E-commerce is increasing generally. I mean, the need for last-mile deliveries in urban areas and agricultural areas as well requires a lot of service and Spare Parts and equipment. Digital disruption, the way we can address our customers and reach to our customers, is opening new exciting possibilities. We estimate that this market is about EUR 20 billion, give or take, in the Nordic markets, depending on how you define some of the borderlines of these sectors. It is big enough to explore for many, many, many years moving forward. Let's then zoom into 2024, more into detail, what was behind this fantastic result. As I said, a record year for Relais Group. The comparable EBITDA was almost EUR 37 million, which is a growth of 27%.
The EBITDA percentage, comparable EBITDA percentage, which is a KPI that is very commonly followed, grew from 10.1% to 11.4%. The net sales grew 13%. I will later explain what part of it is organic and what is the acquired growth. A very interesting point and very positive point is the gross margin percentage going up from 45.4% to 46.9%. This is a result basically of a product mix and a business mix, which I will get back to later. Recapping, tripling the sales and more than doubling the profits in five years tells the story of a growth company, which is a profitable company as well. We have two geographical segments, Scandinavia and Finland and Baltics, where for the last few years, Scandinavia has been a stronger market.
It is really delightful to see that the Finnish Baltic market has also picked up during 2024, partially powered by the cold start of the year, which then has more effect in the Finnish business mix that we have. Wrapping up some of the key numbers, we are over the EUR 300 million turnover mark by far at the moment, EUR 32.6 million, a growth of 13%, as I said. EBITDA, I explained about. One quite interesting point or positive point is earnings per share, which is important from a shareholder point of view, of course, growing from EUR 0.76 to EUR 1.02, which is a growth of 35%. That is, of course, a result of the growing profit of the company.
Two interesting metrics, important metrics for a growth company and compounder company who is allocating capital is the metrics around how effective are we in allocating capital and what kind of return do we get for the allocated capital. That has grown from 10% to 13.2%, the return on capital employed. The return on equity has grown to 16.2%. All in all, a year of all-time highs for the company. Zooming deeper into the business areas, the first one, the two-thirds of our business, Technical Wholesale and Products, has a very good organic growth as well. It was 9% organic growth. The acquired growth was, the total growth was 13%. It is predominantly coming from organic growth. This is, as I said, mostly Spare Parts-driven development in the beginning of the year.
When there is a very long constant period of minus 15, minus 20, that boosts the sales of certain electrical Spare Parts, as we saw when we reported the quarter one results, which then gave a boost to the rest of the year as well. The, let's say, the fourth quarter was stronger than probably anybody could have expected, even if the temperature did not really boost the sales. It was more all across the companies. We had very positive development in quarter four. A topic that I want to specifically lift up in this context is the weight and the importance of own labeled products, we call the Private Label Products, which are products that we are branding ourselves. We are in the process of creating a product line in Spare Parts we call the NPD, Nordic Product Development.
We aim to grow the share of that sales during the next coming years into a significant part of the spare part business. That will also drive the profit of the Spare Parts sector in the future. Lighting, which is a part of the Technical Wholesale business, a very important sector for us, almost 20%, continued to grow. It has grown basically all the time during the last years. We have two spearheads, if you will, Strands, which is the kind of export-driven brand that is really growing fast in Europe. More focused in Finland and Nordic markets, Optibeam, which is a brand that we have in our portfolio, developed by Startax in Finland. There we made a relaunch in a way and rebranding of Optibeam and introduced a lot of new products into the range and it is starting to bear fruit already now.
As we were looking after the quarter three, the results, we could see that the lighting market was slightly delayed, which we then also touched in the last financial statements review a few months ago. Luckily, that demand came back in the quarter four. A relatively bigger part of it came now quite late in the year. Especially the online sales, which is part of our business. We have a webshop that we are running, ourselves focused on lighting, made a huge recovery. We have also done some cost efficiency measures there. That was a good contributor to the profit development on the quarter four. Moving then to the one-third of our business, Repair and Maintenance, net sales growing with 15%, organic 7%. The rest of the growth came from two acquisitions that I will come back to.
We have two main concepts, Raskone and STS in the group, and then a smaller company called Skeppsbrons. We made two very successful and tactical acquisitions in this sector, A.M. Alqvist in Finland, who's focusing on the trailer market. Team Verkstad, who is, let's say, a more traditional truck repair shop, also serving trailers, which then complete the service offering what we have for the customers, both in Finland and Sweden, in a very, very good way. It has been fantastic to welcome the A.M. Alqvist and Team Verkstad teams into our group. Retail is detail, you sometimes say, but I think Repair and Maintenance is also a lot of details. You have, like we have, about 40, even more than 40 workshops at the moment. Even small movements can have a huge effect. You have the fixed cost of the workshops and the personnel.
If the customers do not come, then it is not a good business. If the customers come and the capacity utilization is high, then it is really going almost directly to the bottom line. It is all about how efficiently you run the business and how well you serve the customers so that they come back to you. This is a constant benchmarking and development that we have, continuous improvement, really raising the level and quality of this business. We have invested a lot in human resources development to retain the personnel and recruit personnel because having enough mechanics is a key in this business. I think we have managed well in that part. All in all, since we have bought these businesses, we have doubled the profitability of these businesses.
They have become a very significant contributor for profit and cash flow in the group. We are naturally looking at further acquisition opportunities in this sector. Very quickly, just a few pie charts. Our business consists of 55% of our business coming from the Scandinavian markets, including some export from the Scandinavian markets, and then 45% is Finland. This is fairly static from last year, but also showing that a major part of our business actually comes from outside our home base. This one I basically already showed in the beginning, so the two-thirds and one-third, both groups have grown, which is good. Relatively, the Repair and Maintenance has taken more share this year, partially coming from the acquisitions as well.
Finally, from the pie chart, the Product Group Sales, you can see here the Repair and Maintenance we report as a product group as well. It includes also the sales of labor. The Spare Parts grew because of the, let's say, the favorable weather conditions and also the good market, stable market situation. Relatively, the part of lighting has, in relative terms, come down a bit because Spare Parts and repair maintenance have grown. A few words about acquisitions. As I said, we did two well-targeted acquisitions last year, not huge ones, but still relevant sized. Of course, we would have wanted to do more, and we were engaged in a lot of different types of negotiations and discussions.
We are also very disciplined, though, in the way we allocate capital because we need to make sure that the shareholder value and the value creation stays on a good level. I mean, there's no point of overpaying just for the sake of buying a lot of companies. Then the equation doesn't really work that well. We are disciplined. We do targeted acquisitions, strategic acquisitions. I will speak a little bit more about how the situation looks like moving forward. We continue to scan the market all the time and engage in several discussions, as I said. You win some, you lose some, which is, of course, some of the acquisitions are binary by nature. That's either you get them or you don't get them. What type of companies are we looking for?
Companies who have a stable profit track record, who have proven their resilience in tough times. We are seldom looking for, or actually never looking for, distressed companies that are in a crisis because we simply do not have the resources to start spending and defocusing from other stuff into lifting these troubled companies up. What we do do is, of course, to find reasonable companies that have maybe a turnaround behind them. We can see, and we have been able during the due diligence process to analyze a growth path together with them for the future. We want to see a well-managed company with a good management team who is committed and then foster the entrepreneurial spirit in the company to give the company a lot of freedom. Some numbers, I mean, technically, the market, as I said, is fragmented depending on where you draw the lines.
We currently have monitored over 500 companies. The funnel gets, of course, as I said, we are disciplined. The funnel gets then narrower and narrower, looking at what type of companies fill these criteria that we set before engaging in negotiations. We have typically 10-20 different kinds of discussions going on at any given time. They are not always the same, of course, because some of them then drop out from the discussion. We aim to continue this pace and even accelerate it this year and moving forward. Historically, we have done three to four acquisitions per year. A few words about sustainability. That's been really, let's say, a focus area this year and partially also coming from the CSRD directive, which is then setting certain demandments for a company of our size.
We finalized the group-level Greenhouse Gas Protocol emission calculations last year, including also the Scope 3 emissions. We conducted for the first time a group-level employee engagement and satisfaction survey, which gave very encouraging results to then also build on. We will publish the sustainability report on March 14, so in less than, or actually exactly in a month from now. The report has been prepared according to the European Sustainability Reporting Standards. The information presented in the environmental, social, and governance sections is based on the double materiality analysis that we have conducted last year, which was, let's say, an extensive exercise from a resource point of view, but a very useful one. Very short outlook, 2025, we do not give numeric guidance, as is our policy. How do we look at year 2025?
We have a strong year behind us, and that creates a solid platform to continue the positive trend during 2025 as well. Looking at the markets, as it looks like now, the markets are quite stable. We do not foresee any dramatic changes, which would be in a circle of our, let's say, what we can then affect in that perspective. Looking at macroeconomic effects, of course, is not our business so much to be able to do something about. We are confident. We are looking at this year with confidence. We aim to increase the pace of the acquisitions and with that to create value for our shareholders in a disciplined manner and also empowering a larger part of the organization to focus on acquisitions this year.
All in all, we feel that we are well positioned to continue our growth story also during 2025 and beyond, as it looks now. Finally, before taking some of Thomas's slides, summing up as an investment, what is Relais Group as an investment? I mean, we are an active consolidator or smart compounder with a clear focus on the vehicle aftermarket. We are not going all around the place. We are focusing on where we can make best value for the investors. We have a track record of highly successful M&A that we have done in the past in a fragmented industry, which means that there are also huge opportunities in the future. The market is large and is growing. The amount of vehicles is growing. The amount of mileage is growing.
The age of the car park is growing, and there's also new technology coming to the market. The platforms we have, I mean, whether it's technical wholesale or Repair and Maintenance or lighting, are scalable platforms where you can draw synergy benefits between also these business areas. That also gives organic growth potential. Looking at the cash generation, we have a very strong cash generation that I will show later. That again lays a good foundation to be able to continue our growth story as a growth company we are. I think this is also a kind of psychological or philosophical approach we have for this business. We do not have this one-size-fits-all type of approach where everybody has to do everything in the same way.
We do benchmarking, but we do very light integration, and we want to foster the independence and entrepreneurial culture in the companies. At the same time, of course, making sure that we get the synergies and back office efficiencies. Normally I would ask our CFO, Thomas, to take over these slides, but as he is home with a stomach flu, sending him a lot of regards from here, and I hope he recovers if he's watching this show. Financial review, a few slides. I have basically explained some of this before, but just in a graphic way, it's good to see here. You can see on the left side the net sales, the growth of quarter four, meaning that this was a very strong quarter, 12% plus on the last quarter. That's coming from basically all business areas and geographical areas.
It was a very even performance and also organic growth. EBITDA is really heavy growth in the last quarter, again coming from basically all of the businesses. Something that has been kind of playing in in the past has been this Swedish Krona development that has given us a kind of negative effect in a reported level. This time the quarter four did not have any material impact from the currency effects. I mentioned in the beginning that the gross profit was a very, very positive development, and we can see it here. There are a lot of factors behind it. Partially it comes from the business mix because inherently the Repair and Maintenance business has a higher gross profit margin than the wholesale business. Again, the EBITDA margin is usually higher in the wholesale business than in the Repair and Maintenance.
Looking solely on the gross profit and gross margin development, you can see that there's also a result of the strong organic growth that we have had in Technical Wholesale and Products business. As we are growing as a group, even if we do not integrate heavily the companies, we do, of course, negotiate with the suppliers as a group. We put together the volumes of the group, and that is reflected on the purchase terms and prices that we manage to get from the suppliers. That's one secret sauce, or not even a secret sauce. There's one building block of the way we operate that we can draw benefit clearly from that type of volume effect. Operating expense is really nothing dramatic here. Percentage-wise, very stable OPEX, mostly coming from acquisitions last year. It's a very stable level.
working capital is a quite vital KPI for the type of company that we are, having also a lot of wholesale businesses. On the right side, you can see the inventory. I would like to maybe take out a few points here so that even if the inventory and net working capital turnover actually improved. We are growing. Of course, you need to grow inventories, but we try to do it in a way that we constantly improve the net working capital efficiencies. It is already on a high level, yes, but we want to avoid a situation where we just increase inventories all the time. It is a tough equation because you need to make sure that you can serve your customers as well.
It is an equation of stock turnaround and gross margin, basically, is the equation that you need to make sure that is all the time on a good level. Trade and other payables have increased as well, which is in a way a good sign. All in all, quite stable development and the efficiencies have grown, but we have an eye on the inventory situation as well. A few words about the cash conversion, very positive development in quarter four. You can see here the cash conversion, 112%, and on a yearly level, 58%, which is an increase from 55% to 58%. That is driven by the improved profitability. This is including partially the net working capital improvement as well from relative terms in quarter four.
There are some interest, let's say, higher interest rate and tax payments in January and December that play in a negative way to the quarter four cash result, cash conversion. Cash flow summary, cash flow from operations grew from EUR 30.6 million to EUR 34.8 million, a direct result of the improved profitability, slightly weighed down from the full year level development in net working capital. Cash flow from investing activities was EUR -7.2 million. That was a decrease. There was a slightly lower investment in intangible and tangible assets. There was the amount that we spent for acquisitions as well. Financing activities, EUR -27.7 million, roughly in line with last year, normal repayments of lease liabilities. Dividends paid EUR 8 million, which was a growth last year. There were some proceeds from non-current loans and borrowings of EUR 3 million.
Looking at the net debt, interest-bearing, excuse me, interest-bearing net debt. The leverage, which is usually a typical KPI or key performance indicator people follow on a growth company like us, went down quite dramatically from 3.47 to 2.72. If I pick up something from here, the loans from financial institutions, you can see that we are amortized, repaid according to the program that we have. The cash situation is stable, which then means that the total cash plus unused facilities was roughly in line with the last year, roughly EUR 30 million. Net financials, looking at net interest expenses, higher in January-December. The interest rates, even if they have now started to go down, as we all know, the Euribor has come down from last summer.
The rhythmic of our, let's say, financing is that the effect of the lowering interest rates comes with a delay of about six months. This year we expect lower net interest expenses, clearly than was the case last year. There is a kind of an, I wouldn't call it audit, but a speciality regarding the FX net gains and losses because some part of our debt is in Swedish Krona and some part in Euro. There is this kind of internal exchange rate difference that we have to book into the books. It has no cash flow effect, actually, but it kind of is seen here on the interest expenses and foreign exchange gains and losses.
Summing up the balance sheet and financial position as of last of December 2024, total assets EUR 330 million, total equity EUR 117 million, interest-bearing net debt, as I said, EUR 141.3 million, leading to a net gearing of 120%. Maybe just to recap, this EUR 141 million also includes the lease liabilities coming from mainly the workshops and the distribution centers we have. The cash assets, EUR 9.6 million, roughly in line with the previous year. Equity ratio has improved from 33.6% to 35.6%, also improvement on that area. Some topics that I partially touched in the beginning were these return metrics. There is significant improvement in all key capital return metrics. That is very important for a company like us. As I said in the beginning, allocating capital and trying to, so to say, get bang for the buck.
The return on net working capital is on a very high level, increased from 44% to 53.4%. Return on capital employed increased from 10% to 13.2%, which is a very good level. As a compounder, we would like to see moving forward even higher return on capital employed in the coming year. That is what we are aiming at. Finally, return on equity increasing to 16.2%. Our long-term financial target that was published in 2023 is still valid. We aim at reaching a pro forma comparable EBITDA of EUR 50 million by end of 2025. Pro forma meaning that this is including the full year effect of any acquisitions that we do. This is a target that we have published and is still valid. Finally, the dividend proposal from the board for the AGM.
The board of directors will propose to the annual general meeting that the dividend of maximum EUR 0.50 to be paid for the financial year. Of this dividend, EUR 0.30 per share would be paid in April 2025. In addition, the board of directors proposes that the annual general meeting authorizes the board of directors to decide at its discretion on the distribution of maximum additional dividend of EUR 0.20 in November 2025. Fifty divided into two parts where the thirty is now, let's say, proposed to the AGM, paid in the spring. The latter part is then decided at the board's discretion, the twenty cents. Earnings per share, I already said, was 1.02, meaning that this proposed maximum dividend per share would be 49% of earnings per share.
The distributable funds amounted to a little over EUR 70 million. The remaining non-restricted equity is proposed to be retained in shareholders' equity. This is the board's proposal that will be presented to the annual general meeting. Finally, it was a long monologue. Thanks for bearing with me this time. I hope we have some good questions or nasty questions, whatever questions I will try to make my best to answer. Heikki.
Yes, we have at least quite a few questions.
Good.
Let's start one from Pia Rosqvist-Heinsalmi from Carnegie. Any comments on the share of Repair and Maintenance of your total profits, EBITDA, given your comment on that the area has become a major profit contributor to the group?
Thank you, Pia.
We do not report the business area profitability, but let's say on a rough level, it is approaching the same, let's say, the average EBITDA % that we have in the group. It is mathematically less than the one-third, but it's approaching that. Complicated answer, but I'm sure Pia will understand.
The next one comes from Petri Gostowski, Inderes. Can you give some more color on your plans regarding your own NPD products? To what extent can you push these into your own Repair and Maintenance shops?
Thank you, Petri. An excellent question. The focus of the NPD product line is currently maybe more on the passenger car side than on the commercial repair vehicle side, meaning that then our ability to, if you will, push them through our own channel is more limited than if they were heavy commercial vehicles Spare Parts.
We also have a few items for the commercial vehicles and we'll have even more in the future. This is more on the passenger car side to offer competitive high-quality products for our customers who then sell them further to the workshops.
Good. You are not providing guidance for 2025, but see stable market operating environment. How do you view first half outlook given somewhat warmer winter conditions?
Yeah, thank you, Joni. Of course, it will be hard to beat the start of the year. The major cold period last year in 2024 was the January and half of February. From a market perspective, it's still early days to really foresee how the rest of the quarter one is going to go and quarter two. I think there are positive signs, though, even if the weather is warmer.
I'd say it's an uphill battle, of course, to beat the January-February markets, but we are pushing.
Joni continues. You aim to increase the pace of your M&A actions. Where do you see most potential in terms of product groups and geographies? Do you have strict ROC targets on acquisitions?
I take the last question first. Let's say not yes and no. I mean, there's not a golden number that has to be the return on capital employed, but we need to have a path which makes the equation work. I mean, what type of multiple we are going to pay for the company. Turning that around, you actually end up in a return on capital employed number. Whether it's exactly always the same from business area to another is not always the same.
We intend with all the acquisitions, of course, to improve the general return on capital employed in the group. Where do I see the biggest potential geographically? Mostly in the Nordic markets. As I said before, we are also looking at adjacent markets. When it comes to lighting business, we are also looking. I mean, lighting is basically global as it is from the product company point of view. It would be not likely that we would be looking very much outside the Nordic markets. We see opportunities in repair maintenance. We see opportunities in product companies. We see opportunities in distribution of Spare Parts. Basically everywhere of these main sectors, there are opportunities of different size and different maturity as well.
Good. Joni continues. You mentioned aim to increase private label shares significantly.
What is the share of Private Label Products currently and what is the target level in medium term? Can you give any indication of how much higher gross margin Private Label Products command?
Yeah. Firstly, the gross margin, depending on the product group, on the Spare Parts, it is remarkable. I mean, it is not a few percentage points. It can be some tens of percentage points as well in certain products. The share of this NPD product line for the time being of Spare Parts is still roughly below 5%. I'm not giving a kind of target for what year we are going to reach it, but generally, if we are looking at peer companies in Europe and in the States, a good level of private label of the sales would be about 20%.
Having said that, almost all our lighting business, which is about 19% of our business totally, is already private label, our own label. From that perspective, we already have roughly 20% of our sales in our own brands. Looking at the Spare Parts, there is still a lot to do and good potential.
A couple of more from Joni.
If I go back to the gross margin, what I meant was on the product level, there can be huge differences. You would not expect the general gross profit of the group to go up with tens of percentages.
Good. You mentioned encouraging development in online consumer sales. How much of this is due to the shift from Q3, and have you increased marketing spending in consumer business?
We have actually decreased marketing spending because there's this old joke that, I mean, only 50% of marketing is efficient, but the problem is that you don't know which 50% it is of the 100% you are spending. We were not happy with the firstly, the marketing cost in online has increased dramatically because of the competition dynamics in the platforms is quite interesting from our point of view. I mean, the price of advertising has really increased. I mean, it's almost like a duopoly situation. We started to test what the effect of reducing the marketing was, and we saw that actually we had spent too much money on marketing without effect. We redirected the marketing, we decreased the marketing, and focused it on the right things to do. Hence, the profitability of the online business has recovered nicely.
I would say it's more like, I think the consumer confidence has started slowly to get back. It's not there where it used to be in 2021 or 2022, but it's slowly coming back. It's encouraging.
The last one from Joni. Your strategy targets are for 2025. Are you aiming for new targets and maybe a CMD event during 2025?
I think it's quite natural that when because the previous strategic long-term target ends actually now, that it's of course natural that the company would at some stage look at how do the targets look like for the next period stretching to 2030. Whether we are going to have a capital markets day, I like the idea.
Haven't yet decided on that one, but I would say the pace of acquisitions we hope to have this year, I think also paves the way to then communicate with the markets more about the future strategies.
Tomi Saarinen from Inderes. How challenging do you consider the early 2024 comparison period to be? Have you achieved growth at the beginning of 2025?
We do not comment, let's say, the performance during the period, but I'd say I was expecting a tougher decline on the market. There is decline in certain product groups. You are not selling as much starter batteries, of course, because it's not cold. The jury is still out. I mean, there is a cold period actually forecasted now for the next two weeks. Let's see how the battery sales picks up.
I would be lying if I said it's not a tough comparison, but it's early days to say how it's going to pan out.
Another one from Tomi. Personal expenses grew significantly faster than the revenue. Comments on the drivers of wage development?
I think this purely comes from the acquisitions we have done. The amount of personnel has increased quite much with about, I think, 200 people. The salary development is perfectly in line with the market development of most of our employees are covered by the, let's say, collective bargaining agreements. I mean, I don't have the exact number of the salary solutions, but I mean, they are not deviating from the general line in those markets. It's purely mostly coming from the increased amount of personnel. Nothing spectacular on kind of overpaying the market.
Good.
The last question comes from Petri Gostowski, Inderes. Can you give some indication on what kind of impact on gross margin does the volume effect have on purchase prices given your bigger size? I'm referring to your better negotiation terms when you are buying more as a group.
I would love to give an exact answer, and I would love to know it myself as well, but it's a very dynamic equation of what to compare. What is the starting point you compare with getting better terms? It's not always only about price. It's also about payment terms because getting maybe 30 days more payment time is also valuable for us, but you can't really see it on gross profit. If I would have to give any number, I mean, we are talking about maybe over time shifts of 1-2%.
We're not talking in general about 10% or something like that because we were already on a high level, but you can always nudge and put together the volumes. It is not unsignificant, but it's not like you could not get all of a sudden 10% better prices.
We actually do have one more question from Joni Sandvall, Nordea. Great. Do you see any risk from the current labor negotiations and strikes in Finland?
Not directly, no. Not seeing the full picture. I think we have some experience from past strikes of transport strikes and stuff and the harbors and everything. There were some delays when the harbors were on strike a couple of years back for the lighting business, but we are out of the lighting season right at the moment. I'm not from that perspective seeing anything.
I would be surprised, I won't start to kind of have a crystal ball here of how the strike situation is going to be. It is really hard to say, but we are not kind of expecting any major disturbances. If there are some general strikes, then we just have to cope with it.
That is all for the questions. Thank you very much. Thanks for following. I wish everybody a nice continuation of the winter. Thank you.