Good morning. Welcome to HAV Group Larsen's Q4 presentation. Today we have the standard agenda. We'll say a little bit about the highlights of the quarter. We say something about the company in brief. We give you updates on the business segments. Our CFO, Pål Aurvåg, will present the financials in detail. I'll end up with a summary and also the outlook for the company. You have always had the possibility to send questions, so we will answer the questions that come in through our web page at the end of the presentation. You still have the possibility also to send questions. Q4 was as expected. We had an order intake of approximately NOK 110 million. We had a revenue of NOK 113.5 million. That was down 10.3% from last year.
As we guided already from the Q2 presentation, we expected a lower activity and also lower EBIT for the second half of 2023. That is mainly because of the difference in the project mix of the type of projects that we had and also low capacity utilization. A very important event from the Q4 was that we were chosen as the technology partner to Fjord1 for the very advanced Fjord1 contracts for the government in Norway, the ferry crossing Lavik-Oppedal, where we are going to be a technology partner for delivering fully electric and fully autonomous ferries. I will give you a more update on those projects also later. Norwegian Electric Systems also got a land-based charging system for Scandlines. After the quarter, we also had a contract for a design and equipment package for an offshore service vessel for an offshore windmill to ESVAGT.
We also got the ship design contract for the Lavik-Oppedal ferries. We also got very important funding from the Norwegian government to further develop our hydrogen energy systems for ships. I hope many of you watching today are already familiar with the company. But just to repeat, we are very well situated with technology to help ship owners, enabling them for the green transition at sea. We are doing that both with our technology, both for reducing emission, for making the operations more efficient, and also for reducing energy consumption. Our vision is to contribute to a sustainable future at sea. We consider ourselves having special expertise and being advisors to our customers in guiding them through the journey to lower emissions, zero emissions, and more environmentally friendly operations. We are headquartered in Fosnavåg in Norway. We have approximately 160 employees in Norway and abroad.
We had the operating income in 2023 of NOK 617 million. The order backlog was NOK 604 million at the end of the quarter. As of yesterday, the market cap was NOK 378 million. So we are a maritime technology solutions provider. We have four technology segments, which are ship design, energy design and smart control, hydrogen-based energy systems, and water treatment systems. We deliver separate solutions and subsystems from each of these technology segments. We also have the possibility to combine the technology and the knowledge to give even further value add to our customers through combining this technology and also delivering complete packages with ship design and all the different ship system technology. Our main segments where we are aiming our market efforts today are offshore wind, where we are a leading supplier of SOV for the offshore windmills, and both design and technology.
We have a large portfolio towards the oil and gas industry. We deliver to ferries and RoPax, and we are the leading supplier of electric ferries in the world. We have a portfolio of products for the aquaculture industry and the fishing industry. We are also now aiming a lot of our efforts into the short-sea cargo segment, where we see there is a need for renewing of technology, both becoming more efficient and more environmentally friendly. So then I will give you some updates on the different technology segments. Within ship design, we are a leading ship designer, delivering basic design and also detailed design for several segments, and especially with regards to offshore wind, aquaculture, and ferries. Highlights in Q2 were that we saw that there was a good pickup in the sales pipeline and the tendering activity for this segment throughout all Q4.
We were selected by customers for highly innovative projects. That underlines our position as being able to realize new technology to further improve the compatibility of our customers. One was, of course, the Lavik-Oppedal projects, fully electric, fully autonomous, which might possibly change the whole ferry industry, first in Norway and hopefully afterwards also the rest of the world. We were also chosen as a technology partner for developing now a pre-project for an ammonia-fueled live fish carrier. And that is also a huge step forward when we are realizing this technology to making that business also more environmentally friendly. So on the activity on the back of the contract and the activity that we had last year and then the beginning of this year, we see that there is a rise in the activity on the ship design segment. We have the Lavik-Oppedal ferries, four ferries for Fjord1.
I will say more about them later. We have the ammonia-fueled wellboat project. We also got this large design and equipment package for SOV for ESVAGT, which is going to be built in Turkey. All this improves our activity and also our utilization of our capacity in that segment. For the energy design and smart control systems segment, we supply zero-emission and low-emission energy propulsion and control systems for the global maritime market. Highlights: we were pre-qualified for tenders in international markets that we are aiming. That is showing that there is an increased interest also for electric ferries, not only in Norway but around the world. We have been working, utilizing our spare capacity last year, developing new systems for the short-sea cargo segment. We see that also the pipeline in that segment is becoming stronger.
We have good beliefs that that will also be a very valuable investment of that capacity last year. We got contracts for the second charging system for the Puttgarden-Rødby ferry crossing. We have already had the Rødby site. Now in Q4, NEAS also got the order for the Puttgarden site. As a subsequent event in 2024, we also got an energy design package for the SOV for ESVAGT. Hydrogen-based energy systems: we have developed and are ready to deliver hydrogen-based energy systems, both for integrated systems and also for standalone plug-and-play separate systems. The focus there now is mainly on the standalone system, the zero-emission pod. We call it C-Pod, where we see that it's attractive for several projects started by customers with funding from Norway and EU. So the pipeline also for hydrogen-based energy systems, especially with regards to funded projects, is now becoming stronger.
We also see that then it was a very good decision to start investing in the prototype building, to realizing the technology. When we also get support from the Norwegian government, that is a very good strategic decision towards what we see now is coming in the market. We see the commercial market will still be a little bit longer ahead. But we see a lot of projects that we have interest in now, where we have funded projects which can also drive the development of this segment for HAV. The water treatment systems consist of ballast water treatment systems and processed water treatment systems for the aquaculture industry. We saw from in Q4, we have pulled out some of the highlights from the orders. There was a large contract for Wilson for 6 vessels, ballast water treatment systems, with an option for another 8 vessels.
We got a contract from Ulstein in Norway for two ballast water treatment systems to two CSOVs. We see now that our efforts towards the land-based aquaculture market also pay off, where we get continuously more inquiries and a better pipeline. We are hopeful that we will secure the orders there, not far in the future. After Q4, we also got an order from Misje, owner, for two ballast water treatment systems to two eco-friendly hybrid bulk carriers. A little update and a status of the Fjord1 contracts. About the vessels again, it's four autonomous, zero-emission vessels that are going to be put into operation in 2026. We will implement automation functions and autonomous systems, including autocrossing and autodocking, from 2027. They're going to operate fully autonomous navigation from 2028.
This has, of course, been developed in very close cooperation with a major ferry operator in Norway, Fjord1. For HAV Group, this was a fantastic opportunity. It also gives a good foundation or signal or evidence on our competence to deliver zero-emission ferries. In addition, it will elevate us into the autonomy market and elevate a position for HAV Group as one of the leading suppliers within autonomous vessels. It has also, of course, potential to become one of the biggest contracts ever for HAV Group. The status of the project is that the contract has been signed between the Norwegian government and Fjord1. Fjord1 has signed contract with the Turkish shipyard Tersan. We have signed contract for the ship design package. Now we are in negotiations with Fjord1 about the rest of the package, the autonomy, the onboard vessels equipment, the charging, and everything.
We will give you more update on that as soon as things are realized. Also, as I have said previously, the total contract value will not be given or the contract value will not be given for the separate contracts, but we will give an indication on the total value when all the contracts have been signed. A quick recap of the order intake. The order intake on the quarter was NOK 110 million. We have a book-to-bill of 0.97. The order book is approximately the same as it was in Q3. Important to mention is that none of the Lavik-Oppedal contracts is included in this order backlog, not the one that has been on design, and also none of the ESVAGT orders since they were concluded after Q4. That was my presentation so far.
Now, Pål Aurvåg, our CFO, he will give you some more details and insight on the financials from the quarter.
Yes. Great. If we look into the details for the quarter, we see that we have a turnover of NOK 113.5 million, quite low compared to the previous quarters. But as Gunnar mentioned, it was something we were looking into and expected to have a lower activity level at the end of the year. The corresponding EBITDA is NOK 18 million. And this is, of course, caused by the low turnover and also as a result of low activity and under-recovery of the business. Then we could look into the details. For the Q4 , there is a turnover of NOK 113.5 million, EBITDA of NOK 18.9 million, EBIT of -NOK 23.2 million, net finance of NOK 2.5 million, and net profit before tax of -NOK 25.7 million.
So the EBIT margin for the period is 20.4% with negative figures. So if we compare to the quarter from last year, it's more or less on the same level. It's a bit weaker result, 20.4% versus 16.4%. And to sum up, we need a higher activity level to improve the results for the coming years. If we look into the segments, ship design and turnover of almost NOK 24 million and an EBITDA of NOK 0.8 million and a profit before tax related to NOK 1.1 million. The EBITDA is 3.3%. And it's corresponding more or less to the same EBITDA percentage as the same period last year. If we look into the water treatment systems, operating income NOK 22.2 million, EBITDA of NOK -1.2 million, and a profit before tax related to NOK 3.3 million, and EBITDA percentage of -5.4%.
So it's quite a weak turnover and result for the water treatment systems in the last quarter. If we look into the energy system design and smart control systems, we had an operating income of NOK 68 million, a negative EBITDA of NOK 9.7 million, and a negative profit before tax of NOK 13.3 million, corresponding to 14.2% negative EBITDA percentage. It's a bit weaker than no, sorry. It's an improvement comparing to the same quarter last year. But on an annual level, it's more or less the same level. And it's negative. If we look into the hydrogen-based energy systems, this is a startup.
And let's say the figures are according to plan. If we look into the balance sheet, all changes are related to normal operating business, main changes. And this is a full-year comparison. Main change is related to cash. We see there's quite a drop in cash level.
This is related to, let's say, operational activities. We can also see the details in the cash balance or cash flow statement. We see that the equity is reduced by NOK 15.6 million during the year. This is mainly caused by the effect of purchase of own shares. But the equity ratio is still on a quite high level. It's 22.7% compared to 23.5% last year. If you look into the cash flow statement, we see that in total, we had a net change in cash equivalents of NOK -80 million in the Q4 . This is mainly related to the operating activities. As we can see, there's nothing dramatic behind it. It's natural consequences of the result in the quarter. It's a small increase in other current receivables, a decrease in accounts payable, and a decrease in advance from customers.
If we look into the investments, it's mainly related to investments in R&D. Financing activities is NOK 2.5 million related to purchase of own shares and installment and interest payments of NOK 5.7 million. We can also inform that the purchase program of own shares is now closed. We have got a target of 10%, the maximum level of ownership. So that was completed last week for now. If you look into the breakdown of the order backlog, as Gunnar said, we are more or less on the same level as last quarter. It's a small decrease in ship design. Energy design and smart control is 5+. Water treatment system is more or less on the same level. Flat development through the last quarter.
But we expect a growth in the backlog related to the project that has been signed in January and the ongoing activities for the further months. Thanks.
Thank you, Pål. Then I'm going to sum up and give you some outlooks, how we perceive the market outlook for the future. Again, you have seen this slide. Most of you have seen this slide before. We still feel that this is a very interesting company. We see great prospects for our technology and competence with regards to helping the shipowners becoming more efficient and more environmentally friendly. Our technology positions us perfectly for the growth that is expected. We have a track record of profitable operations, even though we had a downturn last year, and also have a robust balance sheet enabling us to do the necessary actions and investments for the future.
We feel that we have a solid position to create value for our stakeholders. Again, the need for technology to reduce emissions, to stop climate changes, and also, in general, to reduce energy consumption and making operations for the shipping more efficient is a high global driver, which also benefits the potential for our technology. The capacity utilization will improve in 2024 compared to the Q2 of 2023. That is based on the contracts that we have got, the contracts that we see that we will enter into, and also the healthy tender pipeline and sales pipeline that we see in most of the technology segments that we have today. We expect revenue growth in 2024 compared to 2023. We expect that to further grow in 2025.
But as we have seen that the projects in the tender pipeline have been postponed from what we expected earlier or when we reported in Q3, we have now postponed our target for revenue of NOK 1.3 billion until 2026. As we are an industry or a company driven by large projects and we are project-driven, you will see fluctuations in our quarterly turnover. But we are very optimistic for both this year and also for the next years and for reaching the target that we now set for 2026. So that completes our presentation. I have seen that there is a lot of questions coming in. That is very good. We hope to answer most of them as good as possible. But it also shows that the interest for our company is still good. So Pål will join me now.
We have also Marius Koksvik, our Business Development Officer, that will ask the questions. We will try to answer as good as possible.
Yes. Thank you. So the first question is, how is HAV Group rigged to meet a potential increase in demand?
Sorry. Could you repeat the question? There was a small technical error here.
Yes. Yeah. Repeat. How is HAV Group rigged to meet a potential increase in demand going forward?
Yeah. First of all, we have communicated a lot about that we have a low capacity utilization. We have used that capacity utilization to develop the company, to develop projects, to develop markets. So we already have a good buffer in increasing the capacity. In many of our businesses also, the potential for scalability is quite high without doing a lot of actions. But we see now with the contracts that we have in the pipeline that we will need also more people. So we will actively go out and seek the necessary competence.
We honestly think that we will be quite attractive because our involvement in the Lavik-Oppedal contract with the next generation, the next step of autonomous vessel will be very attractive also to attract the right competence to both working for that project, but in general, to attract people that want to come on the journey on our growth for the future.
Is HAV Group still looking for acquisition targets?
Yes. As we have communicated earlier, we want to find and we have also identified possible targets with regards to technology businesses that are complementary to what we are doing before. We have no news, unfortunately, for you today. Hopefully, some of them can be realized in the future.
Then there are some questions regarding the profitability on the Lavik-Oppedal contracts for Fjord1.
The question was?
What is the profitability on the Lavik-Oppedal contracts?
Okay. We cannot comment on profitability on particular projects. But what I can say is that activity level will strengthen the profitability in HAV Group in general. And also, we will not enter into new contracts without having sound profitability. So I think that is what I can tell you about that today.
Do you have any more information regarding the contract signing of Lavik-Oppedal?
Yes. We have signed the ship design contract. We have the development for the autonomous systems that we are working towards Fjord1. We have the ship design sorry, the equipment for the vessels, the ferries that we are negotiating with the shipyard, and also the charging stations. But we cannot say more about that, unfortunately, until those negotiations are finished. Then we will come with more information. And I ask for your patience. I understand that this has taken a long time. But at the same time, it has been a necessary process going through both the technology and the contracts before everything will be signed.
How are the market conditions looking for HAV Hydrogen?
I said a little bit when I talked about the segment. We see that it's a little bit difficult to predict when the commercial market will really hit in. But fortunately, we see that our efforts in marketing and communicating the knowledge that we have within the hydrogen-based energy systems, our system integrating competence, our approval competence has led a lot of interesting leads to us. So we think that we are in a good position to secure contracts that are governmentally funded, either by the EU or by other national governments. That will be the activity and the hottest pipeline for HAV Hydrogen for the foreseeable future, at least.
Will HAV offer other fuels than electricity and hydrogen?
Yes. The big question for the shipowners, especially, is what kind of low and zero-emission fuels will they and what kind of technology should they utilize for the future. We have a lot of knowledge. We constantly seek knowledge about which fuels can be used in addition to hydrogen and electricity. We have already developed an SOV and sold SOV for methanol. We are now going in and developing a live fish carrier with ammonia. We are constantly monitoring both technology, also the availability of different fuels, the future price for different fuels. So we can offer anything the customer wants. In dialogue with the customer, we find out what kind of fuel is best fitted for purpose, what he is going to use the vessel for.
Thank you. Then we have some questions for the CFO. Do you have any plans of increasing liquidity in the share by uplisting?
As previously mentioned, an uplisting is a long-term target. We don't see it as, let's say, it will help us in getting the transaction volume up on the stock today. We think we are too small today. As we have said, long-term target.
How do you plan to use the treasury shares after the repurchase program has ended?
Yeah. We got the power of attorney from the General Assembly. That is set to be used for payments for acquisitions or for the employment stock purchase program. That's our boundaries today.
Does HAV have an ambition to become a dividend-paying company?
Long-term, yes. It's to be a profitable company, being able to pay dividend. But the focus now is investment in technology and in growth to get the company up on a higher level of activity.
How many times a year do employees have the opportunity to buy shares through the employee purchase program?
The employee purchase program has been annually performed in August, so per now.
Okay. Thank you. Then we have some final questions for Gunnar here. How is the order backlog expected to develop during the next couple of years?
What we have communicated is that we expect growth in 2024, 2025, and 2026 compared to 2023. And of course, the order backlog has to grow also in order to grow the activity. The order backlog will, in any case, again, because of our fluctuations in the project activity, we can have a high turnover in one quarter and a lower turnover in another quarter. And also, the backlog can go up and down. But in general, it will increase for the coming years.
Will HAV Group expand globally to new geographies such as India?
Yes. We have targeted more international markets, both in general for all the companies and some special markets for some technology segments. India is coming up as a very interesting shipbuilder market again. We are also looking at other markets, both with regards to where you can find capacity to build ships, where they can build our designs and install our technology, but also where we find owners that find our technology attractive.
HAV is very focused within ferries, offshore, and seafood. Will other types of ship be designed?
The ship design business, you might say, has the largest references and also orders lately for those segments. But as I said earlier, also, short-sea segment is very interesting. And some of the technology segments, they can deliver to any segment. So we are constantly looking at where our technology is adoptable and where we can have competitive edge, both for the ship design and for the other ship technology that we supply.
Okay. And then the final question is, is HAV starting to benefit from synergy effects between the daughter companies?
Yes. I think we have always had synergies because we are quite complementary between the different technology segments. But we are working together both in concrete projects for customers. But also, we have R&D projects that we are working together with. We have strategic projects that we are working together between the technology segments. So we see a constant improvement of the cooperation. And that gives synergies. That gives synergies with regards to cost and competitiveness. But it also gives synergies with regards to adding even more added value to our customers when they are buying the complete deliveries from HAV. Okay. Marius, thank you. If that was the last question, then we will also round up the presentation. I thank you very much for following. I hope you will continue to follow the company onwards.
I hope that we will give you some good communication through stock announcements onwards and for a good development. So I thank you very much for attending and looking forward to seeing you again for the next presentation of the Q1 results.