CEO Christophe Sut. A couple of practicalities. First of all, you may ask actually questions via the chat window, and also you can ask questions by raising your hand and you will be given actually the microphone and a turn to talk. And all the questions will be addressed at the end of the presentation. Christophe, please go ahead.
Thank you Pasi, and welcome to all of you for this Q1 report from Scanfil. Looking forward to present it to you. So going immediately into the first summary of the quarter, as we had expected, I think we have been facing higher comparables during the first quarter 2024, and many of our customers have been facing a slower market demand, which has resulted in lower sales, -11.5%, around EUR 199 million for the quarter. In that sense, it was a good time for us to focus on efficiency, where we had a lot of work done there, both in our performance towards our customer. We reached in the quarter more than 98% of on-time delivery, which was a significant improvement against the same period last year.
We also worked on efficiency, which allowed us to deliver a profit level of 6.8% when we neutralized one-time expenses for layoffs and currency impact. Operating profit reported was 6.4% in the quarter. So all in all, a lot of effort and focus on building efficiency. At the same time, we continue to work on development. We saw that the energy and cleantech segment was slightly negative 3.3%, as you will see later. But when we neutralize one of the subsegments that is focused on energy savings, then the segment is still dynamic, growing 11.3%. So as I said in opening, I mean, a quarter lower in sales versus last year, driven by distortions somehow for our customers and them having a lower demand.
But in a way, a good quarter for Scanfil focusing on efficiency and focusing on making sure that we remain a healthy company and a fit company for the future. Looking at some of the happenings in the quarter, we had our capital market day, where we had the pleasure to introduce all of you to our updated strategy. And that was also driving a lot of activity within the company, starting transformation. We continue to be active on the customer side. In the quarter, we were working on implementing new projects for some of our key customers, which will bring us additional revenue later in the year and obviously in the years to come. So that was positive. We also closed a new contract with an EV charger manufacturer that will also pay off at a later stage.
So even if the customer demand was not at the level it has been previous year, the market remains dynamic, and we remain dynamic in this market, gaining contract and preparing for the future. As I said, we have strong focus on our efficiency, and the on-time delivery rate climbing above 98% is one of the elements showing our improvement. It's not the only one. We also managed to reduce our inventory significantly, as Kai will explain a little bit later. All those elements are showing the focus we have had on operation and being an efficient company. Reducing inventory in a significant way when demand was decreasing was also a sign of good performance from an operational perspective. So from that perspective, I think that's something we are pleased to have that effort on making the company competitive.
And then last but not least, we committed to net zero target to SBTi, which is a step that is very pleasing to see. I think we want to be a responsible company and a responsible actor in our industry. Our customers that are major multinationals acting in that sector are also wanting to see us the same way. So it's good to take a step and move forward. And also, we got a lot of support with that move. So all in all, it was a positive element. When we look at the revenue for the quarter, you can see that reaching close to EUR 200 million in the quarter, we start to have sales that are more normalized. I mean, the PPV that we have reported before is now fading away quarter after quarter and was this quarter just at a normal level.
Sales were, I mentioned before, -11%. When you neutralize from the PPV impact on previous year, it's slightly below 9% decline of sales. That was mainly driven by slower demand for some of our customers and also some distorting impact driven by this lower demand for the customers. In the same times, as I mentioned before, we continue to work on new project implementation, which will pay off at a later stage during the year and will contribute to the development of Scanfil. On the operating profit side, we reported 6.4%. We had impact in the quarter from both currency and layoffs as we continue to adjust the size of the company to make it more competitive long term.
And therefore, if you will neutralize those costs, we were at 6.8%, which I will consider is a good performance in the market that has been a little bit more challenging. And I think that from that perspective, it's also something that is important because it builds Scanfil's position in the market and competitiveness. So I will say solid performance when it comes to execution facing a market that was more challenging. When we look at our segments, you get a different view depending on the segment you look at. I mean, industrial, which is for us really a mix of quite many different types of companies, is now weighing almost 50% of our total revenue and was declining 15.3%. In that segment, it's a mixed bag of industrial players. And there are some who are growing, some are declining. It really depends on the market situation they are facing.
That can vary quite significantly. On the medtech and life science segment that achieved very high numbers Q1 last year, it was -15% driven by, I will say, the top two customers in that segment that were having a decline in their demand and therefore have been talking during the quarter. We, however, continue to win market share with those customers where we are actually working on implementing new projects in some of our factories. So even if the revenue was declining, the level of activity was very positive. In the same times, we have started to implement our strategy, having a dedicated team for medtech and life science. That has been implemented during the quarter. We are also getting certification for some of our factories, which also is driving the opportunities for us to capture new business opportunities on medtech and life science.
So negative sales development, but positive development in terms of activities and collaboration with our customers and future customers in that segment. Then energy and cleantech, as I mentioned before, overall was negative 3.3%. But as you remember, during Q3 last year, I presented you a little bit how the portfolio of Scanfil was built around energy and cleantech with different subsegments. And when we look at it a bit more in detail, we realize that we have one of the subsegments that we call energy savings. And that subsegment was significantly down in the quarter. If you take away that part, you realize that the overall segment was growing actually 11%, which tells us two things.
It tells us that our view that long-term is positive for energy and cleantech is something that we can really stand for because the overall development of the world economy shows the development of that industry. We can see that the infrastructure keeps being built. That will drive the whole segment. Even if it was slightly negative in the quarter and also facing quite strong comparables, we still believe in a bright future in that segment, looking at the overall portfolio. We also now have a dedicated team focusing on energy and cleantech, which is also very positive because it allows us to talk to our customers with more proximity. That's something that we presented in our capital market day and implemented during the quarter. Looking at our customer portfolio, our top 10 clients are weighting 55% of our revenue.
Our biggest customer is 11% of our revenue. You can see that now the portfolio has been balancing a lot and things are evening out. I mean, we have quite a few customers that are in the same range of revenue, which is good for Scanfil because it allows us when one goes down to have support from the others. What I have said also many times that I should reiterate, you should also consider that in those 55% top 10 customers, in reality, it is very often subsidiaries of very big industrialists. So what we present here as one customer might be two or three divisions in one big group. And in a way, you could also count as maybe more than one. But that's something that it's good for you to know and to understand.
But I think that from that perspective, our balanced portfolio is in a way healthy and allows us to not be too dependent on the variation of one business or the other. And then that, you know, but just to reiterate, I mean, we are planning to pay a dividend of 4.23% based on 2023 performance. And that we will have AGM tomorrow. So that was my first words for the quarter. With that, I will hand over to Kai for the financial presentation.
Good morning also from my side. Perhaps a little bit repeating what Christophe already told, but going still to the turnover. Like I said, that we ended up nearly EUR 200 million, a little bit less. And the decrease in the turnover was like 11.5%. But like Christophe mentioned, last year was still quite significant spot-buy sales, almost EUR 8 million. And this year, Q1 was pretty much normalized. So when excluding the effect of that, then we are 8.6% declining in the revenue in Q1. Operating profit then dropped from last year of 15.1% to 12.7%. But then, like mentioned, that we had some negative impact in the quarter regarding layoffs and also effects related to accounts receivable and payables. Those are not any extraordinary costs as such, but to make the quarters year before and now make them comparable, then deducting the cost.
And then after doing so, we would end up to 6.8% of operating margin, which is then, like mentioned, I think a very good result in comparison to 6.7% last year. What comes to the net profit, the gap is a bit lower than in the operating profit and explained by positive financial income expenses. We have a bit positive effect from the hedges and from the effect side. And also, of course, when our debt is getting less and less, then also the interest cost is lowering. On the other hand, then the tax we have paid a bit more. And I think it's like normal, we don't have any tax benefits at the moment. And the average tax ratio is a bit increasing. So it's a bit over 20%, the normal ratio. Still here, highlighting the operational performance and operating profit.
So comparing here this adjusted corrected 6.8% to 6.7% last year. And you can see here that when the revenue dropped like EUR 25.7 million, actually, we have been able to cut the cost even more and pretty much been able to neutralize operating margin-wise the impact. In the balance sheet, two highlights: inventories in Q1. The comparison here is to the end of the year. So we have been able to reduce the inventories by EUR 10 million during the quarter, which is very good. And then furthermore, also paying off the loans based on the normal pace, so to say, EUR 3 million in the quarter. And looking at the net cash from the operating activities, EUR 10 million positive. And last year, at the same time, it was negative figure. So year-on-year good improvement, not at the same level as Q4, but that was a bit like a very high comparison.
Basically, this cash flow, positive cash flow, was supported by this inventory reduction of EUR 10 million. In total, we have like EUR 80 million rolling 12 months positive cash flow, which is very good. The net debt going down at the level of EUR 47.2 million at the end of this Q1. Cash and equivalents growing. Interest-bearing liabilities in comparison to last year, significantly lower. We have very strong liquidity at quarter end in total, about EUR 110 million of liquidity available, including the cash and credit lines. Still looking at the key figures, then the equity ratio, 10% almost up from the last year. Equity increased EUR 40 million. Actually, the total balance sheet being a bit lower when we have been able to consume the inventory. So coming from Q side, the improvement. Net gearing starts to be very low, 17.1%.
It was almost 40 years ago. Again, lowering the interest-bearing liabilities. Then equity being increased significantly. Return on equity, quite naturally, a bit lower because of the lower net profit year-on-year, also due to the higher equity from which we will pay the dividends, EUR 15 million, in the second quarter. Then earnings per share on the level of EUR 0.15. I think that was all from my side. Give back to Christophe.
Thank you, Kai. So if we summarize the quarter, the key takeaways is we had a solid operational performance in the quarter, making sure that in lower demand from our customer, we deliver good efficiencies, making sure that we deliver good efficiency with, as Kai explained, a profit level operationally of 6.8% if we neutralize some one-time cost. We also made sure that we had good on-time delivery to our customers and reduced inventory. So all in all, it was a solid performance from the team across Scanfil. I mean, in the same times, we managed to not slow down our investment towards the future, meaning that we worked on an updated strategy and have started to implement that strategy, both committed to a science-based target as a first step and are working full speed on that to create a differentiator for our company and for our customers.
We also implemented the new segmentation and adjusted our sales organization to this new reality, which we believe is something that will create value for the future. Then we continue to onboard new projects. It was at least three major projects that we started to work on during the quarter that are going to pay off in the future. And that was good because obviously, this is cost you take during the quarter that will generate revenue and profit within the future. So based on that, I mean, investing into the future, we still deliver the good performance. We are in a strong financial position that will allow us to finance our future growth, both organically and non-organically. That's positive.
We believe that for our customer market is, and you can hear that as we are going to the report season, that market might remain a little bit slow until the end of the first half of the year. And then from there, we'll recover, which for us will mean that it will allow us to gradually increase our performance as we go towards the end of the year. But still being able, in the meantime, to defend the profit and to defend the situation of the company investing for the future. So those were my key takeaways. Then reiterating a little bit our outlook for 2024. I mean, we have no change there, remaining in the same range, both in terms of revenue and operating profit. We remain positive on the energy and cleantech segment.
We actually should say that the quarter was very strong for many of those players, which was very good. Medtech and Life Science, we are also positive. I mean, here, there is quite a few new projects that are going to be implemented that are going to pay off in the future. And we also think that the increase of resource and capabilities we are right now building will allow us to be even more efficient into that segment where there is a long-term opportunity. We will continue to focus on efficiency and make sure that we make our company an efficient company and as a cost base that is as adjusted that it can be. And that's what makes our future competitiveness. And we will continue to do that through automation, digitalization, as we have done previously. And then we are gearing for future growth.
We believe that we will start to grow again, but the second part of the year against 2023, based on the project we are working on now, but also based on what we can hear from our customers. That was the main conclusion and the outlook for 2024. With that, I hand it over to you, Pasi, for the Q&A.
Okay. Thanks a lot, Christophe and Kai. We have actually quite many questions already. First question, considering the large impact segment sales growth, is it correct to guess that the energy savings solutions comprise a quite significant share of the energy and cleantech segment? That's the first part. There will be a second part of the question as well.
Yeah, I will say that energy savings segment, I mean, when we look at the energy and cleantech, it's actually quite balanced portfolio. So I will say that energy savings solution has been very low in the quarter because the portfolio is pretty balanced between the four subsegments we had seen. So I will be a little bit more balanced there. I mean, it is not a one-sided segment. It has really many sides. And the energy savings segment is maybe 20%, 25% of it, no more than that.
Okay. Thank you. More on details regarding this energy and cleantech, can you mention any specific subsegment in this market niche, so overall in energy and cleantech? I think that we had the slide distributed to five of those segments. What are you hearing from your customers here regarding the expectations of development for the years?
Yeah, I think there are two things here. When you look at energy and cleantech, as I mentioned before, we have different subsegments. One is related to energy savings. If you go back to the presentation we made last year in Q3, you will find that slide. What we see is, except for this energy savings subsegment, all the other one grew during the quarter. You can see that if you sum up the other one, it grew 11%, which means that there is an energy transition happening. I mean, there is more and more vehicle, electric vehicle. There is transition to clean energies for heating that is still happening. Countries are building for that. So it impacts the grid that's getting built. It impacts storage of energy that is getting provided. So there are many subsegments.
All of them are growing, which lets us think that, okay, there is this transformation happening, and it will be a long-term trend. Then, as I mentioned before, the subsegment about energy savings was negative in the quarter, mainly driven by probably too much optimism last year that resulted in building stock. And now demand slowed down a little bit, which has an impact on the stocking and probably a bigger impact on us than it has on our clients because our customers, they reduce their stock, then it impacts us. But that will come back. And what our customers tell us there is that from the second half of the year, demand will build up again. And we have already in forecasts that are much more positive for the second half of the year from those customers that were weak during the first quarter.
Then for the others, they are keeping a situation that is in line with their expectations. So that's why, all in all, we believe that there is a long-term positive trend. We are facing comparables where there were maybe peaks that were maybe not reflecting the long-term dynamic of the market that were maybe a bit higher than expected. But that will wash away. And I think that the fact that we managed to deliver good profitability during that period that is a bit more shaky, I think is good. We keep implementing new projects for those customers. So I am positive on the long term for that subsegment.
Okay. Thank you, Christophe. Regarding the demand, there's a question regarding the demand for the second half of the year. Do you see any, do you expect to see any improvement in H2 2024? Is this improvement relative or related to lower comparison point or an improvement in underlying end demand?
I mean, it's many things, actually. You're right. It's related to the comparison point will be lower. So obviously, it will be easier to be. In the same times, as I mentioned before, some of the subsegments that have been quite poor in Q1 are expected to recover, the second element. And then the third element that I mentioned in my presentation, we are also winning market share. So our factories are right now working on implementing new projects that will start to deliver as the year moves forward. So it is actually those three components that lead us to that conclusion.
Okay. Thank you. Seems that there are a lot of questions regarding the energy and cleantech. Do you expect the energy and cleantech revenue to grow to outperform the other two segments also during the rest of the year?
I think that on that, it's still a little bit early to say. There is also, I would say, a good outlook for other segments to come forward. But we believe long-term, I think we should focus on the long term. We believe long-term energy and cleantech as well as medtech, we believe, will outperform the market. Then for the rest of the year, I would say probably energy and cleantech is and will remain a good driver of the overall.
Yeah. Thank you, Christophe. Then an additional question regarding the growth. And are there differences in growth outlook across geographies, so geographical growth prospects?
I think that it's a good question. It's, however, a difficult question because it's probably a matrixial answer that is a mixture of geography and segment. What we have seen is we have seen a bit more dynamic Asia during the quarter where step by step, things have been recovering for us in Asia. Then what you could probably also think is also because we have very good operation there, and we are winning projects. So it doesn't necessarily mean that that market is going up again. And we have a specific effort on Medtech in Asia where we are actually getting good traction with our customers there, and our factory is performing. So we get a bit more dynamic Asia. Then Americas, in terms of geography, for us, it's quite a lot of opportunities. But again, you should also take into consideration that we have done a major investment.
We now start to onboard electronic manufacturing in the U.S., which obviously gives us an opportunity to be a very different company than we were before. So I should be probably very careful. I will say, yes, it seems Asia is landing and rebuilding up slowly. America is more dynamic. But again, it might also be because of the profile of our company from that perspective. So should be a bit careful there.
Yeah. Thank you, Christophe. Then a question regarding pricing and value chain. What can you tell about ongoing pricing discussions with customers, but also suppliers in your value chain?
I mean, I will say on that, we do our job every day, no matter what happens. So we keep working on negotiating prices with our suppliers. Obviously, this is something that is part of the job we have to do. The market situation has eased a little bit, but we should probably be a bit careful because we know that electronic components are cyclical. But now we have a better market situation. And then I will say with our suppliers, I think we have come to a situation where we have very close collaboration. And we work with our customers on how we can make them efficiency gain, still remaining a healthy company.
I will say the discussion when we discuss price with our customers is more on how they can improve their product and their solution that both benefit from savings than just a push to ask us to reduce price. I think the pricing discussion are quite healthy, and the margin development is healthy as well.
Okay. Thank you. Follow-up question regarding the market growth for segments. Do we expect improvement in operating environment in all customer segments in the second half of the year?
Yeah, I think that in the second half of the year, we expect obviously improvement in Energy Cleantech, but also in the Medtech part. Then in the Industrial, there is improvement. But there, it's a bit more tricky to answer because in that one, we have many different types of industry and company. So some are going to improve and do better. I mean, you know some of our customers, and you will hear their report. And some are seeing improvement. Some might lag a little bit behind. So I will say industry will be more mixed bag, and Energy Cleantech and Medtech should recover as the year move forward.
Then a question regarding mergers and acquisitions. How does the M&A market look like from supply/demand perspective as we speak?
I think that as we speak, there is quite a lot of activities and things going on in terms of people willing to eventually sell companies. Then what remains to be proven, and we will see how the year develops, is if offer and demand can meet at a reasonable price level. So that's something that we need to see. But there is an active market in terms of opportunities to be looked at. Then a bit early to say can deal be done at a reasonable level is still to be seen.
Okay. Thank you. Question regarding cross-investments. Can you tell Scanfil's estimate of organic cross-investments for the full year 2024? Maybe in details is also asked. But let's see what kind of level would that go to, Kai?
Yes. I don't know how much we want to go to the detail. But of course, we have published some of the investments so that we have, it's well known that we are investing to the factory in Sieradz. And that, of course, is a major investment. All, of course, not and maybe a big part is not yet happening, realizing in this year, but still that is ongoing. But then what comes to the detailed investment plan, we have not been disclosed that how do you if Christophe, you want to say something more, you feel free to so.
I think that we have disclosed the key investment and those we are working on right now. The rest is just continuous part of the business where we, as we mentioned in capital market there, we allocate part of our revenue to investment. That remains stable. It's spread across all different countries and different companies.
Question regarding the market share and winning market share. Who are the parties that you take market share from, from larger listed competitors or smaller independent businesses?
I think there are two trends here. I mean, obviously, we have customers we have built relationships with that appreciate our service and that keep expanding. I mean, when you look at our portfolio, you see there is in our top 10, it's a major stock listed company, if I could call it that way. Those companies, they do acquisition, and they grow. When they do acquisition and they grow, what happens is that they end up building up the tail of suppliers. And since with those players, we are preferred suppliers, in a way, we win from that because they come back to us, and they ask us to implement projects with their newly coming company. So that's one way that allows us to win market share. They want to reduce the number of suppliers. Their complexity grows with their own growth. And we benefit from that.
The second thing is we have also been winning market share again, more sizable players because people want to have a player that is more adequate with their need. That we have been benefiting from. It can be a global stock listed company. In that case, we don't fight against necessarily a Nordic-based company. We fight against players that can be anywhere in the world.
Okay. Thank you. If you have any questions, you can raise your hand or type in the question in the chat box. Let's wait a couple of seconds if there are no further questions. Handing back to you, Christophe. It seems that we don't have any further questions.
Okay. Thank you. I would like to thank you all for listening to us and spending time with us. We look forward to update you during the next quarter. Thank you very much for today. We wish you a good day. Thank you. Goodbye.
Thank you.