Good morning. Welcome to Scanfil's MB acquisition presentation. My name is Pasi Hiedanpää. I am the Director of Investor Relations and Communications at Scanfil. Shortly about the practicalities, there is a chat box window. You can ask questions through that, and we will address all the questions at the end of the presentation in the Q&A session. Now, handing over to our CEO, Mr. Christophe Sut.
Thank you, Pasi, and thanks to all of you for joining us today in the middle of the vacation season. Really appreciate your effort. I am today going to walk you through the news of the MB Elettronica acquisition that we released on Sunday. I'm actually sitting down in Cortona in Italy as of now. Obviously, Pasi will help me with that presentation, and also our CFO, Kai Valo, is on the call. We will try to give you a bit more clarity on what was released on Sunday. Starting the discussion, I would like to start a little bit with our strategy and just to remind what we said now almost one and a half year ago during our first Capital Markets Day on our growth objective.
We said at the time that we will grow either through organic development, and that we have done and we continue to do. You know, this year we had communication about our investment in Malaysia that we will inaugurate in September. We had also communication around new investments in North America. We also spoke about the acquisitive journey and believe that Scanfil needs to always acquire new customers, and acquisition can bring that. It needs also to reinforce its presence in the world to support our customers that have a global footprint. That is what we would like to talk about today. Going into the why and why we have decided to move forward with MB Elettronica as a new company for Scanfil, there are a couple of elements that from our point of view make a lot of sense.
The first element is in a willingness to develop our product portfolio. We can see, and I'm sure many of you can acknowledge it, that the aerospace and defense segment and space is gaining traction all around Europe and all around the world, but mainly in Europe. From that perspective, MB with a very strong footprint, I will go back to it later, in that field is bringing a new dimension to Scanfil. The second element is the customer base in general. I think with MB, we are getting a new company joining us that has no overlap in customers, meaning that they have a very interesting customer portfolio that we believe we will be able to nurture across our other side over time. That is also a very positive element.
Finally, as our willingness to continuously develop our footprint and our presence in different regions in the world, we will now have a footprint in Southern Europe, which was an element missing to Scanfil in supporting our global clients. There are three very strong rationales that drove the decision and the selection of that company to join the Scanfil Group. In terms of the customer portfolio, because it's something that I have highlighted as important, if you look at the breakdown of MB customers, the top five customers are a bit more than 50%, 59% of the company revenues. It's split between three different customer segments. If we look at what we usually talk about, industrial is what we will call industrial within Scanfil, is 56% of MB.
They have here already a very rich portfolio, having some strengths in the transportation world, which is very interesting to us and extremely much in what we like to see in a high-mix, low-volume. Medtech & Life Science is 7% of MB portfolio, which is also an area of focus for Scanfil. They have grown significantly, and they have very significant projects in that field. I've also improved the facility lately to acquire more customers. Very positive element. Last but not least, aerospace and defense is very strong in MB. It's 37% of the revenue with a prospective to grow to very significant numbers. A very, very positive and very interesting portfolio. With this new acquisition, we will have access to Southern Europe through manufacturing in Italy. I will get back to it a little bit later, but it's four factories that will join Scanfil at the time of closing.
This new acquisition will be reported as part of our Central European region, which will allow you to follow our company. Therefore, Central Europe will become the biggest region for Scanfil with the add-on of MB in it. Looking at the four factories, there are today four factories for MB Elettronica . The company was founded and has its main site operating out of Cortona in Tuscany. The site is around 350 people, six SMT lines. This site has a very strong footprint with the aerospace and defense business. There are then three other sites that are a little bit less sizable. One in Monza (Renate), another one in (Inaudible), which is close to Milan, and the last one in L'Aquila. All of those sites have specialties and are very niche.
The last two are very niche manufacturing when the one close to Milan is rather a site that requires other customers than the mainstream customer of Medtech and defense that are mainly located in Cortona. When it comes to strategic fit, I started a little bit on that, but just to remind about that, it gives us the opportunity to long-term now create a new customer group. I mean, defense is going to be very significant. Aerospace and defense is going to become very significant for Scanfil and therefore will become sizable in the total. That's something that MB is enabling joining Scanfil and is very material to us. We will also have new customers that we can grow and develop together, which is a great opportunity for us and for them. When it comes to geographical expansion, we will now have access to manufacturing in Southern Europe.
I mean, we know that we have in our global customers quite a few that request this, and that's something we will be able to offer them. When it comes to offering, I mean, they do manufacturing of PCBA and box build, very advanced product, very advanced solution, and have very strong engineering and strong MPI team. I think it's very pleasing to see that I think we are really acquiring a company that is in the forefront of electronics manufacturing, a modern site that has been continuously improved, that is having a very high level of standards, which is very close to what we like to see within Scanfil. I mean, even better in certain aspects. The site also and the facilities that have been built to, I will say, produce much more than the revenue that the company has produced in 2024.
The company is a modern company prepared for growth. In terms of value creation and what we can expect, it's obviously an enhanced geographical reach and offering that we will try to capture. We believe that we will also benefit from our supply chain. I mean, obviously, Scanfil is still a more sizable company that can bring benefits through our network to MB Elettronica. For employees, we believe that it's a great opportunity to create career opportunity and also to cross-learn. I mean, we have already started to see a lot of things they do are very interesting. A lot of things we do are also interesting to them. Finally, I mean, they have a strong engineering department and design capabilities, which is also something we can leverage and create value out of for Scanfil towards our other customers.
Just a glimpse, I will say, on all the benefits we get through MB Elettronica. We will now move to the key figures and the deal in itself. I will hand over to Kai Valo before coming back from Q&A. Kai.
Thank you and good morning. Yeah, a few words about the key figures. The company revenue in total last year was about EUR 100 million, and being in a level of nearly 10% of EBITDA and then almost 7% of EBIT, EUR 6.8 million. A very similar level than what we have recently got used to in Scanfil as well. The total balance sheet is a bit less than EUR 80 million, and net debt about EUR 20 million. Like I said, the price setup is that depending on the financial performance in this year and in the next year, and there is a range, but the minimum price is EUR 73 million and the maximum EUR 123 million. The impact in Scanfil net debt is we can expect that it's about on the level one and a half, maybe a bit more, maybe a bit less.
It's not a dramatic impact on Scanfil net debt level. We have been well- prepared for the transaction. We have available credit facilities, which we can use for the payment. The deal is expected to be closed during Q4. Back to you, Christophe.
Thank you, Kai. I think that was the last slide of our presentation. Happy to answer questions from there. Pasi, take over from now.
Thank you, Christophe. All right, let's start with the other Pasi, Pasi Väisänen from Nordea. How many SMT lines are in MB Elettronica for PCB production?
Yeah, we have in MB Elettronica , we have 12 SMT lines. As I said before, the main site is located outside of Cortona. There is another site that is quite sizable in Milan , as well, close to Milan.
Okay, thank you. Additional question actually following that. Is the company focusing on assembly and box building, or can you elaborate a bit about assembly and box build?
Yeah, I would say that the company in many ways in its activity is very similar to Scanfil. They do electronics manufacturing. They have part of the business that is building electronic boards, and they have also a complementary to that, building box builds that also include those electronic products. I will say their activity is very similar to what you could see in a factory in Suzhou or in Sieradz for Scanfil.
Okay, thank you. Let's continue with Pasi's questions. Some of the sites are relatively small. Are those all four sites profitable, and could it make sense to consolidate some sites?
Yeah, I think that there are actually two different profiles in the MB sites. I will say the Cortona site is the volume site for defense and Medtech. The sites close to Milan have been ramping up and growing for some other customers. When you look to the other sites, I mean, the site in L'Aquila is very specialized in some aerospace-specific technology and satellite technology. There is a niche, I will say, niche competence as well as the site in Renate that has also a focus on some kind of niche competence. I will say at this point in time and looking at the growth journey, consolidation is not something that we believe will come on the agenda, but rather growth.
Okay, thank you, Christophe. Antti Viljakainen from Inderes. Can you describe what kind of products MB produces in the aerospace and defense segment?
Yeah, I think that obviously the products they manufacture are built around electronics. There is always an electronic board in what they do. It's 40% of the revenue of the company. It's very sizable, and it goes into very different subsegments with also some confidentiality that goes around it. We will not go into the detail of what are the exact products in it, but you can materialize it. It's electronic. It's centered around electronic manufacturing and box build around that.
Thank you. Antti continues about the additional purchase price. Can you elaborate what is the, in what conditions the $50 million would be achieved and what is when it goes to zero?
I think that as we mentioned, there are two leverages in that transaction. One is a price, a base price of EUR 73 million that is pretty much based on the realization of the company valuation based on its 2024 valuation. There is expectation of growth for 2025 and 2026. When those growths get delivered, it will create extra layers of potential payment for the seller that will generate an extra purchase price. I would say in line with the growth level and lining up the multiple based on what was done before.
Okay, thank you, Christophe. About the customer relations, there's a question from Pasi that how big of total net sales is the biggest customer? We disclosed five largest ones.
Yeah, the same way. I think that the first five customers are the ones that are weighting 60%. They are balancing between them. We will not disclose in that case the revenue of the biggest customer. We will remain disclosing the revenue of the biggest customer for Scanfil, but not for single sites.
Thank you. Now jumping to Joonas Ilvonen 's questions. Given the large aerospace and defense exposure, is it fair to assume that the margin potential in the MB units on an aggregate level could be higher than for Scanfil Group overall?
I mean, obviously, you could assume that defense is going to grow faster than the rest and will be beneficial to the overall company.
Okay, that was clear. Going back to, continuing with Joonas, do you have any feeling how much of industrial is automotive?
Yeah, the company is very much a Scanfil-like company, meaning that I would say there is a little, little, little, little of automotive. It's not to be mentioned, more to be mentioned for the fun of it. There is some sport automotive, and you can easily figure it out because of the location of one of the sites. It's very tiny. It's not material in the number. It's more for the fun of mentioning it.
Okay, thank you. That's very clear. Jyrki Hinl is asking about the aerospace and defense as well. Should we expect the profitability of the aerospace and defense business to be at the same level as the other businesses? That was kind of, that it was answered already about the profitability in the previous ones. If you have any questions, now it's the perfect timing, actually. Please use the chat box window. Just a sec. There's a question regarding the additional acquisition price. It was answered as well. You highlighted a need for additional production capacity in Southern Europe. What is your customer sector needing that production capacity in Southern Europe?
Yeah, I mean, we have quite a few industrial customers that actually do manufacturing in Southern Europe because they serve the market. Sometimes they need some special adaptation of products that can be needed close to the market where they deliver. We should realize that when you look at Italy, France, and Spain, I mean, those are quite sizable countries. Obviously, there are things happening in those countries.
Thank you. Dear participants, there is still time for questions, so please use the chat box window. Let's wait for a bit. If there are no further questions, I'll hand it back to you, Christophe, for the summary.
Thank you. Thank you very much, first of all, to all of you to join in this short notice. I must even maybe apologize that we disturbed your Sunday morning. I know some of you had to step in and work. Thanks for doing that. Sometimes things go on the way that they go. I think we are very excited that this acquisition is really making a difference for Scanfil and offering us the opportunity to enter a new geographical market, but also the segments of aerospace and defense in a bigger way. I am really looking forward to update you on the development of that and thanking you for your time today. Hopefully, we get the chance to talk again on Thursday for our budget report. Thank you very much for today.