Welcome to Cavotec Q4 report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO David Pagels. Please go ahead.
Good morning, and welcome to Cavotec's fourth quarter and year-end presentation. I'm David Pagels, CEO of Cavotec, and together with me today, I have, as usual, Joakim Waltin, Cavotec's CFO. So let us start the presentation with a short introduction of Cavotec. Cavotec has its 50 years anniversary this year, and over those 50 years, we have built a strong position as a leading clean tech company with a global presence. Our offering consists of the design and delivery of solutions to electrified ports, vessels, and other industrial applications, like heavy-duty vehicles that are used in, for example, mining industry. Our main products are shore power systems, motorized reels, crane electrification with spring cable reels, and also, of course, automatic mooring systems.
Our main attraction is that our solutions and services continue to reduce emissions in ports, terminals, and from ships, of course, in the main mining industry, as well as for the heavy-duty vehicles. Let me now give you a quick overview of the main drivers in the market, but before we do that, I also want you to see what's new on the picture that we see right now. That is our new dot that we have and our new production facility recently opened in Chennai, in India, on the east coast, southeast coast. And I'm also happy to announce that we mounted our first cable reel actually this week, but the official integration is gonna happen during the summer. So first of all, we are a leading technology and strong market position. We have that with long-term customer relationship.
Clean tech is part of our heritage, and we have been in this industry for many decades. All markets in which we are active in are driven by strong mega trends of electrification and global needs to reduce the greenhouse gases. Our solutions are crucial for reducing emissions in ports, terminals, from vessels and heavy-duty vehicles, et cetera. Our solutions also contributes in reducing noise in ports and terminals, which is a growing problem, not at least in the cruising terminals that are normally located quite close to the city center. We also see that demand are increasingly driven by regulations from international and local authorities that want to reduce emissions of greenhouse gases as well as the noise. So it's a mix of actually the regulations, but also the drive to improve by itself.
Our solutions are leading technologies that are proven, reliable, efficient and secure, and therefore, a perfect fit for our customers' requirements. So now, a little bit more into the recent business and what we're doing right now. Q4, we had the strongest performance since I joined Cavotec, with a record revenue and a very high business activity. A couple of weeks ago, we announced an order with a major European shipping line for the retrofitting of shore power solutions. The order is valued to a total of $5.7 million, with delivery scheduled throughout 2024. The agreement entails the complete retrofit of container vessels from installation of Cavotec's cable management system into a full commissioning.
As I also mentioned last quarter, we also received an order worth EUR 6.7 million for PowerFit for one of the world's largest shipping companies. Deliveries already started and will take place during 2024 and into the early part of 2025. So as you can see, those deliveries are long projects that delivers over a long period of time. In the previous quarter, we also mentioned the long-term service agreement with the big COSCO group. As part of the agreement, we will provide preventive maintenance and inspection on more than 60 ocean-going vessels equipped with our shore power system. In addition, we have also signed an order for North American Seaway operator for our vacuum mooring units worth EUR 6.4 million.
Also, in North America, we have signed a 3-year service level agreement with a large port in the U.S., which is also a commitment that they believe in our products and processes as a partner. We have also, a few days ago, signed a 2-year service agreement with APM Terminals for Port of Algiers. The agreement means that we will perform service of our 31 installed power units and 45 MoorMaster units on a regular basis, making sure that they all operate as they should and meet customers' expectations. In 2023, we put a lot of effort into developing one of the world's largest ultrafast 3-megawatt charging system for battery-powered heavy-duty vehicles.
It has now been fully validated by a major Australian mining company, and we are now ready to approach other customers in this very growing and important segment. This ultrafast charging system is, of course, one of the keys for the mining industry to be able to electrify its operations and reduce the CO2 emissions. Now, I'll move over to the performance in the fourth quarter. I am happy to see that our strategic initiatives in 2023 to improve the profitability of the order backlog are now yielding results. We report for the fourth consecutive quarter, a positive EBIT result. The quarter EBIT amounted to EUR 4 million, a significant improvement from last year's -EUR 1.6 million. The EBIT margin also increased to 7.6% in this quarter from -3.5% last year.
After financial costs and taxes, we report a positive net profit this quarter of EUR 4.2 million, a substantial improvement from the loss in the last quarter of 2022. The improved profitability in the quarter has had a positive impact on the cash flow, which increased from -EUR 2.8 million in the quarter in 2022 to EUR 5.2 million in the quarter for 2023. This progress has led to a strengthening on our financial positions, but we will also have a positive impact on our financing cost going forward. So enough with that, more into a little bit details with Joakim here. I hand over to you, Joakim.
Thank you, David, for that. Okay, we will start with the revenue and the revenue growth. As David said, it was a very strong quarter with a good revenue growth of 14.3%, where we saw some currency effect impacting negatively with 2.2%. The growth here is primarily driven by deliveries of reels in the industry segment and shore power solutions for container vessels in the Ports and Maritime segment. We're also pleased to see the revenue from the service operation contributing in a positive way, which is also one of the drivers for our improved profitability. Going over to the order backlog. As you know, we have, during some time now, focused a lot on the profitability in our order backlog, with the goal of securing a profitable growth. The reduction in the order backlog is twofold.
It reflects partly our focus on taking in good orders with good profit, but also an extraordinary high order intake during 2022. We strongly believe that this focus on profitable order intake and profitability in the order backlog is a strategic move, and it really is important for us to continue to drive the profitability of the company going forward. We see this also as a normalization of the order backlog, at the same time, as we see a continued strong interest in our clean tech solution and service offerings. Moving over to EBIT. As David already has said, we reported a positive EBIT for the fourth consecutive quarter, thanks to our strategic initiatives and focus on profitability.
This is very much related to the execution of these strategic initiatives in our Ports and Maritime division. Our colleagues in the Ports and Maritime division have focused on a number of change initiatives to improve profitability, such as production optimization, but they still have much more work to do. We also expect the industry division to do significant progress in this area going forward. We're moving over to the net profit, and I think here's where I'm most pleased to see that we, for the second quarter in a row, are showing a positive net result. The profit for the quarter improved to EUR 2.4 million, with a small but important positive earnings per share. It's also an important milestone for us that we have now reported a small, but nevertheless, positive profit in EPS for the full year of 2023.
This trend is significant and signals that we are on the right track with the transformation of Cavotec, and it also shows our ability to grow with profit. Moving over to the cash flow development. As David pointed out earlier, we reported a positive operating cash flow in the quarter of EUR 5.2 million, thanks to higher profitability, driven then by operational efficiency improvement and a strict financial management. I'm very happy for this strong performance, and it's a clear result of a team effort across the entire company. Our leverage ratios also moved in the right direction and improved from 2.68 to, in Q3, to 1.29 in Q4.
This is a good development for us, and very positive since its strength that our strength and financial position will also lower our financial costs going forward. Maybe it goes without saying, but this will continue to be a focus area for us going into 2024, especially working with cash flow, cash flow and working capital management. We move over to say a few words on our two divisions, starting with Ports and Maritime, which delivers solution for decarbonizing ports and vessels. They grew with 8.4% in the quarter. The increase was driven by improved volumes and price at 10.5%, while currency effects had a negative impact of 2.1%.
Ports and Maritime has steadily improved operating result and margins now over the past five quarters, and mainly as a result of improved operational efficiency in all areas across the division. Moving over to the industry division. The industry division showed a growth, a good revenue growth in the fourth quarter versus last year, at 27.3%, where 29.7 comes from volume and price, and we have some negative currency effects of 2.4%. The profitability in the division was negatively impacted by a high portion of larger projects with lower margins during the quarter. When we sum up 2023, we can see that our industrial division have increased the pace of implementing the strategic change programs, but of course, as David said earlier, we expect them to make a ramp-up of this progress going forward.
By this, I hand the relay stick back to David.
Thank you very much, Joakim, for this. We, we have, as you, as you know, we introduced during 2023 our six strategic priorities or pillars, and related change programs in order to lay the foundation for the profitable growth and value creation. We continue to communicate on that, and we continue to break it down in the organization to get everyone focused around those parameters, what, what is, what is in it for each functions and each divisions and, and each Cavotec facility around the world. We feel that we have a positive momentum, and we have also a strong team that is deeply engaged in this transformation. Everyone wants to work for a company that is performing and developing the way we do, and this is, of course, very positive. Let me now summarize before we open up for questions.
With the good growth and strong financial performance that we're now seeing for 2023, I am happy with the development of Cavotec, and I'm convinced we are on the right track. That's clearly evident. Perhaps even more satisfying is to see the momentum and the engagement when I meet the people throughout the organization, that everyone is so committed to deliver, to overperform, and really make sure that whatever we are committed to do, we're gonna, we're gonna overdeliver. That's really positive to see when you're meeting people across the world. We finished Q4 in 2023 with a high business activity with important customer wins. That gives us a good foundation for the profitable growth also to continue in 2024 and beyond.
We now have a clear strategic priorities and change programs in place to build a stronger Cavotec. I am confident that Cavotec will be a key player in the transition for a more sustainable emission-free world, also for the next coming 50 years. We are only halfway. So by that, I will now end our presentation for the fourth quarter, and we are now ready to take some questions. You can either call in on the questions, or you can write them down on the webcast.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.
The phone question. Okay, we read up a couple of questions here through the. Through the, I'm just flipping through all the questions here.
It's good to see that we have so many good, so many questions, a lot of interest.
So let's start with a question here from Per Kollén from Pareto Securities. How do you look up on the market growth for the larger, largest segments in 2024 and onwards? That's the first question. The second question, is there any savings from the coordinating purchasing visible in the 2023 accounts, and how do you see this going forward? So first of all, I think we, the first question, where do we see the market growth? It's clear that within the port and maritime electrification, that we see a very strong growth and requirements in market, also going forward. Not necessarily impacted so much by the overall turmoil in the economy in the world, but they're stable there. When we come to the industry segments, it's a big push for electrification.
As you know, we are on the electrification also with the underground and surface mining equipment, drilling rigs, et cetera. We've been there for many, many years. But also now we see also the electrification trends are coming also for the above surface mining equipment, drilling equipment, as well as, of course, the big charging trucks of megawatt chargers that we just mentioned. So in general, very positive outlook for those. In 2023, I must say, we have not seen a significant impact yet of the sourcing efforts that were done. And it's correct, Per, we are now coordinating our volumes that we buy from suppliers. I was out myself to visit a cable supplier that we used for many years, visited them last week.
And clearly, they are willing to work with us, but they also admit that we all live with, we have had a fragmented approach versus them in the past, and now we're gonna work closely with fewer suppliers, and by that, reducing the cost and increasing the efficiency with them. So we're gonna see more of that coming through in 2024. We have here more, another private investor saying here, "Given the prevailing electrification mega trends, the regulatory tailwind, what is hampering growth, et cetera there, year-over-year, when would you expect the trend to reverse? We see, we don't really see the trend of changing into the regulations, et cetera, growing.
There is still a huge amount of vessels that are not yet equipped, and there are also a big portion of the ports that is not equipped with shore power solutions yet. So we still have many years to go before that is done. There are several dates and years should be done by 2029, 2030, but it varies a little bit, and it's also then you can have ambitious, but at the same time, not everyone is able to finish them in time. How has the considering the profitability requirements? Yes, how has this affected the... I get a question here, sorry. Considering the profitability requirement introduced in 2023, how has this affected the expected normal levels in the order backlog?
What we can see is that we had a little bit of a tougher requirements, and Joakim and myself were much involved in the deal reviews and involved in the deals. And that now is also portion why we see the improved margins that we see, primarily on the ports and maritime side, because those were the one with the bigger contracts, with some lead time. But we now see that that is giving the results. So I'm confident that we're gonna continue to see more of that margin improvement going forward. Yep. And then we are asking for some also a question here about our reasonable long-term growth figuring for the revenue.
That is something which we don't really comment or speculate where we are, but we continue to see a positive outcome. Yep. Then we get another question here from Josh, Stockholm School of Economics, who believe in the company and our future, but also asking the question: How big portion do we have coming from retrofits and aftermarket, versus new sets? That is the figure which we, as many other companies, don't really disclose, but it's clear to know that the more we deliver out of new equipment, the bigger is our installed base of equipment around the world, of course. And of course, aftermarket is the one harvesting from the installed base. So we're growing the installed base, and therefore the aftermarket will also grow.
Okay, next one, Josh, also from Stockholm School of Economics: You said the profitability within the industry segment is expected to increase. How much and why? Yeah, we have done a good job, and our colleagues in the Ports and Maritime division has done a good job of implementing all our strategic priorities. And this is our biggest division, and therefore, we have also put that maybe on the priority list first when we were transforming Cavotec. But our eyes are now very much on the industry division to support the division, to do the same journey as we have done with Ports and Maritime.
So, I don't want to say an exact number and when that will happen, but we expect this to take action already during 2024. Okay. What is your overall target for steady state, EBITDA or EBIT for the group?
Yeah, we of course want to look at long term for the group. We're looking at double-digit margins, that is clear. We don't want to set an exact date for that target at this point.
Okay, what else do we have here? Few questions from Johan Everlöf. Okay. Is it fair to say that the fall in historic high order book is due to a combination of an improved focus on taking profitable orders and an improved focus on manufacturing management? I.e., is the lead time having an effect also on this?
Yeah, and I think it's a combination. We've had a very strong 2022 that was delivered out during 2023, and we have also, during 2023, focused a lot on our lead time and our productivity in our different facilities. So I would say yes to that.
Well, then I'll take the next question. It is again from Johan here. Have I understood it correct, that you will continue to invest in R&D to stay ahead in both port and maritime industry? Yes, that is correct. And do we see a need to broaden our product and service offering going forward, 2024 and 2025? Yes, that is also correct. Of course, you need to actively scan the market and see where the possibilities. We are now doing a strategy review and see what, where do we want to be, what is the full potential, where can, where should we be, and where do we have gaps in our portfolio?
Then we put efforts into there and speed up rapid product development or signing partnership agreements or whatever it is. That is clear. Is there a crossover potential between port and maritime and industry? Yes, it is. If you take the charger solutions, for instance, and MCS, that is an application that is valid for ports as well as for the mining equipment, so it's the same thing. So there's a lot of crossover things that we do. And our engineers are, in some way, they're not always dedicated. Sometimes they are dedicated to electrification of reels.
If you put a reel on a big stacker and reclaimer, or you put a reel in a STS crane in a port, it's more or less the same kind of equipment. Okay. Another question from Johan here: Could you expand on a bit on the development, future, and the potential within the industry segment? I think we have a good cooperation with key customers within the industry segment, where we are actually developing equipment for them for the next generation's machines and products. And that is something which I'm really satisfied that we're doing in certain cases, very successful, more or less getting involved with it in an early stage, developing something that actually fits in the most effective way, and meeting the requirements into their various products.
Having that said, I think it still is an area we could do more. I want to see more of our engineers working with our customer engineers in order to solve problems for our customers' customers. So that's what we need to do more of, and we are there in certain areas, but we can do more across the company in general. EBIT margin in Q4 is now over 7%. Give you a statement on quality of new orders, improvement in remaining order book in the older works through the initiatives. I'll look for the question here, and you're right there. Could you, could one, and this is the EBIT margin, develop towards double digits? We don't really want to speculate on any timing there.
No, it's a good question. We have a clear goal of going to double-digit profitability. Of course, the fourth quarter is always a strong quarter volume-wise, which makes a good impact on the bottom line also. So, we should not extrapolate it too quickly, but we have a very clear profitability improvement trend as we can see, and we believe that we will continue with the same track in 2024.
Now I got a question here from Anders Rudolfsson, from DNB Markets. Congratulations to a great report. Are you done with the restructuring of Cavotec now?
To say the big restructuring or the big turnaround is, of course, a good way to happen, and we are really satisfied when we see the results in the reports and in the quarters. Of course, developing a company is always an evolving thing. You need to fine tune, you need to adjust to the market, et cetera, but we don't foresee any restructuring programs of a massive scale or anything like that.
And then there comes a question from Uto here from Red Maritima. Are you working on any battery solutions as well, or only, only shore power plugs? We are not. I think the battery segment is extremely quickly evolving, and there are giants who are on board on that one. We are working, of course, with the battery manufacturers as well as with the vehicle integrators in order to get our charging stations to meet. Because there is always a communication between the battery and the vehicle itself, and our power electronic solutions and our equipment providing the power to that. But we are not really into the battery segment in that case.
At the same time, there are interesting solutions around the world for battery as a storage of storage and actually as a transportation of power as well. Windmills in the middle of the ocean, out where you can really have cables, then there are battery solutions that is being discussed. And of course, we're involving those with our technology of transferring power from batteries or into et cetera, but not really the battery itself. And then we have another question from Johan here. And he promises the final question. I'm not sure. It's okay, Johan, there, ask questions here. How many manufacturing/assembly units are operational today? And is there any need to expand that number and diversify it geographically any further?
I think right now we have, if you talk about the pure assembly units, we have 4 units, plus then China, India coming up now, so 5. And then, of course, you have some service facility, which are more dedicated to repairing and servicing and overhauling our equipment, which is where we don't really do any final assembly, but we are there doing full service overhaul capability. We have those as well in Australia, in India, Spain, Stockholm, et cetera, Sweden. So there are a lot of those as well. I don't foresee that we need to add on more facilities as we have now. The India facility is a fairly big one.
It's a rental facility with an aim to grow out of it, so it's not massive in that case, but it's big enough to substantially increase the production that we have there. We – I think it's not only us to say that the world is getting more and more complex. We saw what happened during the COVID pandemic situation in China, where everything was blocked. We all see what happens now with the Red Sea and the tension there. So we believe that we need to be closer, we need to have possibility to produce in multiple locations. And that is clear.
And also now, just since we have opened up in India, even if we have not really done the immigration yet, but we see a clear and direct interest from the domestic market in India already now. So it's we need to be able to produce. I would probably see more of producing locally or domestically, and then, we're going to remain in China, China for China, for, of course, and Asia is a big for Maritime market, definitely.
Yeah. But maybe to expand on that question, Johan, is that we have a possibility to scale up in our current four facilities. And then on top of that, we have a possibility to also flexibly scale up the India facility. So, we feel that we are well suited for a period ahead here, on our production capabilities and capacity.
Yes, the flexibility is also that we produce. We have separated the operations from the divisions, and therefore, we are producing for both the maritime industry and service, of course, on all locations, as much as we can, of course. Okay. We scroll down, and scroll down here and see. Up we go.
We got a question here from Josh. Say, it is that you, as you are focusing on the core offering, would you agree? And then with the bracket in comparison to the previously, with the mooring solutions, et cetera. I'm not fully agreeing with that one. Of course, shore power is important, because it's a hot booming, driven by mega transit regulations. At the same time, our 2023, we delivered out the record number of MoorMasters for installations in South America, as well as in North of Africa, and then even Kapellskär in Sweden. So the MoorMaster is a product that we have, we know it takes time to sell into the customer because it's a big step for the customer to do.
But at the same time, we also know that we have customers that, like APMT in Tangier, where we're working close with, who really wants to drive optimization, and then drive the optimization of loading and unloading of containers. They are extremely driven of optimizing everything there. So the ship to be stable, the ship to be moored quickly, and also, more importantly, to also make sure that the ship and the best container vessel really remains super stable. As well as where we have the customer in South America, who is so keen on using both mooring lines and MoorMasters in order to be able to keep the port open under severe conditions.
When we met them, they say, "If we're able to keep our port open one week more per year, it's fantastic." So, that's what we talk about. We talk about a very optimized logistics set up with all the container terminals, and there we are playing a vital role with our MoorMaster. Also, don't forget that our MoorMaster is also then generating a very good service level agreements, where it's progress that needs to work 24/7, and therefore, we're there to support the customer.
The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead.
Thank you, and good morning. My first one is on the timing of deliveries from the backlog now. We saw a significant step up in sales in Q4 versus Q3. If we then look into Q1 or the first half based on the backlog that you now have, do you have any more sizable deliveries expected to take place? Otherwise, we would usually see a seasonality where the first quarter is, in absolute terms, a smaller one than the fourth.
Yeah, there is no significant change in our seasonality from one year to the next. So, if we're talking about Q4, Q4 is usually a very strong quarter, and so that needs to be kept into consideration.
Okay, understood. And then on the deliveries here, at the start of 2023, there was, or you commented that you had some, if we say, legacy orders with less favorable pricing. Where are we now in terms of those orders being delivered from the backlog and margins on new orders?
Yeah. I would say, I would say now we have some, less than 10% of our current order book. That is what we would call from the, from old orders. But, taking into consideration also that, the, the process that we have put in place for, for a more profitable, order backlog is not the only improvement activity we're doing.
Understood. So, so then just, if we, if we look into 2024 now, you, you delivered a very strong organic sales growth throughout this year, or, or essentially, organic sales growth has been strong since start of 2022. But, but the backlog has been, down year-over-year since Q2 2023, and I understand the rationale behind it. But, how should we think about, potential for sales growth in 2024, given the focus on, on more profitable orders and the kind of backlog support we might see?
I think, like David said here earlier also, we have in Q4 a very, very active, a lot of customer activity, and it's very, very strong continued interest in our solution, and the trends are really there to support us. So I think with that, what we can say is that we're still continuing to look very positively at the future growth.
It's worth to mention there, as has also been presented in other Q reports by the companies over the last few weeks here. Of course, the overall uncertainty in the world leads to somewhat delayed decisions when they're doing investments and when they're going to do... So it takes a little bit longer time. It's not that they are gone, but it takes a little bit longer time, and that's what we see as well in our area.
Yep, correct.
Understood. And then, a couple more, if I may, here. And the industry profitability in the fourth quarter, specifically, down versus the third one, is this mainly because of what you write in the presentation here about the higher share of deliveries related to larger projects, or is there anything else here that we should consider going into 2024?
No, this is exactly like you say, Karl. So this comes specifically from some larger deliveries with lower margins.
Understood. So, Sven, on the profitability improvements here, the ports and maritime segment, you do say why perhaps you, this one was the first one to really improve and expect the industry a bit later, and rationale behind it. But more about the dynamics here, what kind of levers have you pulled to really kind of see this clear step up in profitability? And what can we expect going forward from ports and maritime? Because it's a strong trend, but I can imagine that you have even higher ambitions on profitability in ports and maritime.
Yeah. Yes, a good question there. I think, I'm really pleased with the improvement from 2022 to 2023, considering 2022 was really, really a tough year for ports and maritime. But of course, even if I'm pleased, pleased is not the same thing as satisfied. So of course, we will continue to do the journey there. But keep in mind that, when we talk about ports and maritime, a normal from when we're signing an order to the first delivery is 9-12 months. And we have had, me and you, Joakim, now, since the last year, a full focus on the deal reviews and also hammering down the material costs to make sure that we have good quality in the bids so that we know what we're dealing with.
That is what we've done, specifically in ports and maritime, and those orders are now starting to be delivering out. So, I'm quite positive that we're gonna continue to see the trend for ports and maritime. In addition to that, when we also then increasing our focus, our efforts on sourcing, as I mentioned before, it's a little bit of a shame to say, but it's a little bit untapped territory where we haven't really used our Cavotec muscles, and purchasing power at all as efficient as we should.
And therefore, we now have setting up that team of people, and we have recruited in people from externally that have been dealing with this kind of commodity structure worldwide for since the last 20 years. So Wendy is coming on board and taking care of that commodity management structure, which I'm also very positive towards that, how that should develop. Okay?
Okay. Yes, thank you. My final one here is, perhaps more a question to you, Joakim, but, but the, the cash flow generation now, we've, we've seen it, trending well here as well, with positive operating cash flow, both Q3 and Q4. So what, what more can you do on working capital and so on, and maintain this very good, trend in cash conversion, also at the start of a year, considering how perhaps, maybe it's more about the second half of the year being seasonally wise, a better cash flow, period?
Yeah. Yeah. No, it's correct that the beginning of the year is usually a little bit weaker on the cash flow side. So that is what we would usually historically see, same and stronger at the end of the year. But we are working very, very hard on our working capital management, both on the collections, and after a normalization here, on also on the payables, which we discussed about before in previous calls.
Now, the procurement team also have a more fruitful discussions together with the suppliers to discuss conditions there, while at the same time, we're together with operations, finances, strongly supporting now to make sure that the inventory management is getting even more tight than it has been before. So, I still feel that we have a good potential of being even leaner than we are today.
Understood. That's all from my side. Thank you.
Okay, thanks, Karl.
We have a couple of questions here, again, you talk a lot about this from Josh, from Stockholm School of Economics. You talk a lot about innovation, the people, the culture. Could you develop on changes here since I've arrived? Yes, we had in 2022, we really had a financial situation which made us very, very restricted in what it did in terms of new product development. Same thing for 2023. We had to more or less cut down on a lot of things. Let's just wait in order to get the company up to the level where we are right now.
In 2024, we have now set aside, and that's included in the budget for 2024, we have set aside money for R&D, because we need to speed that up. We've lost a little bit there. We need to catch that up. And of course, at the same time, it's important that we do it in an efficient way, in a controlled way, with it, so that we actually get the maximum out of the money that we put into the R&D. So therefore, myself and Joakim are also then involved in that process, sitting with the engineers and new product development team here, so that we're monitoring and making sure that we get the best bang for the money....
In terms of people and culture, both me and Joakim attended a sales conference that we had in the company a couple of three years ago, three weeks ago.
Yep.
And I must say, it's really fantastic to see the momentum of people. It's been a couple of tough years, yes, and there were some things that needed to clean up and done. At the same time, you now see that people are happy again, they are motivated, they are eager to meet customers, they are passionate, and there were a couple of guys standing there being proud of showing us what they have developed for a magnetic clutch, and bringing it out in the production, and just with a super passion, showing us what they've developed in a record time. This is the thing that you cannot really demand people to do.
You need to have people who want to do it that way, and are really driven by their own passion. Those are the individuals that we need to see, and we need to get more out of, of course. Okay?
Do we have anything else, or was that the last question?
Let's see. I think we have more or less. We have a question here from Anders Rudolfsson, asking how we should, how will Cavotec look like in three-year perspective? It's of course an interesting question, if we could get the answer to that one. What we have said is that we are now gonna take a new grip on our strategic plan, and we also would like then to come back with some kind of, of course, communicated targets for the coming years. That is the homework that we need to do so that we can give more guidance, where do we see?
But it's important to do the job properly, so that we see the full potential of Cavotec, and analyze where the markets are, where we should be, and at the same time saying where the markets are where we shouldn't be there. So that job is now restarting. Yep. So I'm, we will come back to you with our view on where we see the company in a perspective going forward. Okay. I think we have we have.
We have taken all the questions.
Taken most of the questions here, which I've found. So in that case, Joakim, should we conclude here? And we are always available for questions, and if.
If anything else comes up, yes.
If anything else comes up as well, of course. So in that case, I thank you for your time, good questions, good interaction. We always enjoy this, of course, and therefore, and after that, we're looking forward to brief you when it's time for the Q1 report.
Yep. Thank you very much. Have a good day.