Hi everyone and welcome back to ABG's Investor Days. My name is Karl Bokvist and I'm an analyst here at ABG, responsible for covering CTT. With us today, we have the CEO of CTT, Henrik Höjer. The presentation today will be in English and you will be also able to see and look at the material afterwards. Without further ado, Henrik, thank you for being here and welcome first of all. We'll start with a presentation from your side and towards the end we will hopefully have time for some questions as well.
Thank you, Karl. Thank you everybody for coming here and listening. I will try to briefly sum up 2024, how 2025 has started, and also most importantly, look a little bit further out in time. As most of you know, we have two products in CTT. We have dehumidifiers and we have humidifiers. CTT has more than 60 airline customers worldwide and our products are on board on more than 1,500 aircraft. Humidifiers are our best seller and it can be found on most long-haul aircraft that are newly produced. Dehumidifiers, which was the first product of the company, has had a tougher experience. We have today humidifiers that are found on mainly 1,000 Boeing 787 aircraft, where it was previously standard. In addition, there are a few airlines that are operating our anti-condensation system. The difference in success, I would say, comes back to OEM availability.
It is extremely important that the aircraft manufacturer offers CTT products when you buy a new aircraft. Humidifiers are available as options when you buy a new Airbus or Boeing. The humidifiers are not available when you purchase a new aircraft and it has to be retrofitted afterwards. How did 2024 go? Net sales decreased by 3% to SEK 300 million compared to SEK 309 million the year before. The net sales bridge graph here shows the difference compared to 2023. You see that the aftermarket decreased by SEK 9 million, which is due to an uneven demand in 2023 when it came to some major deals and one-off in nature. That was therefore a very tough comparison year. OEM on the other side increased SEK 5 million, which was lower than we thought in the beginning of the year. I will come back to that later.
Ultimately, this was due to Airbus and Boeing's failure to ramp up their production. Earnings per share decreased by 5%. We had a flying start of 2025 and it started with record high order intake of SEK 181 million in the first quarter. It was mainly driven by the company's largest single retrofit order, several orders for VIP kit systems, a stronger order intake for OEM, and also resumed orders for the aftermarket with products that we will deliver during Q2 and Q3. The first quarter saw a sharp boost for OEM deliveries as Boeing resumed to orders on par with what they're producing. Before we go further with the business outlook, I will comment on the guidance for the next quarter, Q2. We foresee a swift recovery from the sharp and temporary sales drop that we had in Q1.
It will be primarily driven quarter to quarter by rebounding aftermarket sales and higher sales in private jet. OEM sales are decreasing a little bit in the quarter, but OEM is still on long-term growth trajectory, but it has variation quarter to quarter. We predict net sales guidance between SEK 75 million and SEK 85 million. Some comments on the trade war, we do not have to think about that during the rest of my presentation. As you know, negotiations are ongoing and much is still unclear. Today, aviation has no exception for the general tariffs imposed by the United States. We know that tariffs are not good for the aviation industry, which is heavily regulated and also is dependent on global supply chains. The sector has previously been exempted from tariffs. If we have tariffs from both sides, it will really cripple the industry.
We are then afraid of our supply chains, the global supply chains delivering to Boeing and Airbus. Boeing and Airbus and major suppliers are right now trying to influence this. I'm quite positive in the long run that they will succeed, but that needs to be seen. If we look at the current impact on CTT's business, Boeing is currently bearing the cost of the customs duties related to our OEM deliveries. In the aftermarket, CTT will have to handle the tariffs. In 2024, our aftermarket to the U.S. conducted about 5% of our turnover. Air traffic is growing steadily over time, but it is sensitive to economical cycles. For CTT, a recession would worsen the opportunities to sell retrofit of the anti-condensation system, which has historically been very sensitive to a decline in traffic and economy.
We focus on airlines in Europe, and with traffic in Europe, this makes it a little bit better. Much more important is the aftermarket, and it's expected to be stable. Our products are on the most flown and most modern aircraft, which is the 787, the A350. We don't see that they will go down in traffic in a recession. Another positive factor is that there are very long cycles in our aviation industry, and that will not be affected by short economical cycles. New aircraft and upgrades of cabin interior, we will see continuous demand. In addition to that, we have some currency headwinds, as you've seen. The dollar, compared to the Swedish krona, has changed quite a lot. We have almost all of our revenues in dollars, and most of our costs in Swedish krona.
Of course, we are sensitive to the impact on dollars on both sales and earnings. CTT currently has sales of approximately SEK 300 million. What will drive growth in the future? Before I go into the growth factors, I want to comment on the aftermarket. What can we expect short term? The aftermarket is an important part of our business model. Most of the sales currently come from the aftermarket, and in 2024, it accounted for SEK 233 million. The year was unexpectedly turbulent on the aftermarket, with lag effects on inventory levels in the aftermarket after two strong years, very strong years. Aftermarket sales declined 4% due to the unusual runoff orders that we received in 2022 and 2023. This affected the inventories at airlines and distributors with uneven demand for CTT. However, the underlying market, which is based on flight hours, grew as expected during the year.
Where do we stand in 2025? The year has started with chain reactions from 2024, where last year ended up with high inventory levels at our distributors, which caused the sales fall for CTT in Q1. However, demand from airlines remained on a normal level during the quarter, and it reduced the stock at distributors. In Q2, we will therefore be a normal aftermarket quarter, reflecting end customer demand with a sales range of SEK 50 million-SEK 60 million. In the future, we will strive for a more even order flow from our distributors. What will drive the aftermarket short term? It is ultimately the size of the population. CTT has income in the aftermarket from consumables that are replaced about one time a year, but also from spares and repairs. What does the population look like? We have 3,000 humidifiers in operation on 1,500 aircraft.
In addition to that, 2,500 dehumidifiers on about 1,300 aircraft. The figure shows the population of humidifiers is distributed. The majority is on commercial aircraft. The age is low. More than half are in the crew rest areas. The growth in the population in 2024 was 5%-10%, which will drive the aftermarket in corresponding numbers in 2025. If we look a bit ahead, I expect the humidifier population to have an annual growth rate of at least 20%. What are we doing to get there? How can we grow the installed base? Before the pandemic, the part of the turnover for OEM was approximately SEK 200 million. The strongest driving force in the few next years will be the OEM market. Private jet and VIP will also grow in the next few years.
With the order from Jet2, the zero will be broken for retrofit with a turnover every year for the next 10 years. I'll start with OEM in more detail. OEM is the engine for growth. The picture shows that we have products on three models that will be produced for many years to come, and the backbone for airlines on their long-haul flights. CTT is dependent on the production rate of aircraft and how many humidifiers airlines choose. We have a very high penetration rate on 787. On the A350, it will be gradually raised during 2025 and 2026. Another observation is that cabin humidification is available as an option on the A350 and Boeing 777X, but it's missing on the 787. This is actually an opportunity in the long run. Before we look ahead, I would like to briefly comment on the development on OEM in 2024.
Why was last year not as good as expected? A year ago, we expected a strong increase in OEM based on Airbus and Boeing taking into account a significant increase in the production rate in 2024. It did not go as expected, mainly because certification of the increasingly advanced seats in business class took a lot longer time than expected. Boeing was far from its own goals, and during the year, it fluctuated down to one aircraft per month and only managed to reach five aircraft per month towards the end of the year. Boeing had to reduce its inventory levels in the second half of 2024, which for CTT meant that we had almost no deliveries in Q3 and Q4. In Q1 2025, CTT sales increased as Boeing resumed deliveries corresponding to the 787 production rate.
Airbus did slightly better with the A350 and produced between five and six aircraft per month, but the increase did not materialize, and also Airbus had to adjust their inventory levels, which meant very few deliveries in the first half of 2024. What is it that makes 2025 better than 2024? Airbus and Boeing have lost about a year. The goals for 2025 look similar to the year before. Boeing reported a few weeks ago that the 787 program is stabilized on five aircraft per month, and in a few months, they will go to seven. In the beginning of 2026, they predict to be on double digits. Airbus does not give guidance on this, and perhaps it is because Airbus has some more problems with their fuselage deliveries from Spirit AeroSystems in the near time, but they are on five and six per month.
If I look a little further ahead, it looks really good. The order books are on record high level for wide-body aircraft. Boeing is aiming for double-digit rates in 2026, and it's expanding their capacity and aiming for pre-pandemic levels of 14 aircraft per month. Airbus has reiterated their goals to be on 12 aircraft per month in 2028, up from the current six. On the 777X, Boeing began the expanded FAA certification flights in the first quarter, and they are still expecting to deliver the first aircraft during 2026. The goal is for CTT to have a higher growth rate than the build rate by increasing the number of humidifiers per aircraft. CTT will start to see sales impact from higher A350 penetration rates early in 2025. In addition to flight deck humidifiers, A350 customers are increasingly selecting both crew rest and also cabin humidification on their A350s.
So far, the penetration of humidifiers per A350 has averaged to less than one, and based on the customers with CDFs and production starts in 2025 and 2026, it should gradually increase to over two per aircraft. Private jet and VIP large cabin business jet. With VIP, CTT has emerged as the sole supplier for humidification systems. CTT has supplied humidification systems to 113 private jet aircraft. In 2024, sales was SEK 14 million compared to the SEK 18 million in 2023. We are convinced that the ACJ model is the correct one. ACJ delivers their aircraft with a standard kit system as an option, and Airbus Corporate Jets is promoting and selling our system. We are trying to take this model to more supplier OEMs, and that includes Boeing business jet, Bombardier, Dassault, and Gulfstream. We have come the furthest with Bombardier, and I expect a decision in 2025.
The potential is great, and for CTT, it amounts to approximately SEK 100 million-SEK 120 million per year if CTT becomes a part of the interior of all new Global 7500s. There is also a retrofit opportunity of more than 200 Global 7500s, which is totally approximately SEK 600 million. We know that there are several operators that will upgrade their 7500s to 8000. It's an opportunity for retrofit. The Jet2.com order was the first award for anti-condensation systems in years. It's 146 systems that will be retrofitted on their aircraft on C- checks. In 2025, we're poised to break the three-year streak with zero deliveries, as we will start deliveries of five systems in Q3 this year, and another 25 systems are scheduled until the end of 2028. The rest of the 146 will come after that.
Repeating that our anti-condensation system strategy targets OEM availability at Boeing 737 MAX and Airbus A320neo family. The focus on retrofit customers is in Europe and to drive and put pressure on Airbus, where we have a better momentum to make this an option for new aircraft. Together with Jet2 and a few other airlines, we're trying to convince Airbus that it should be possible to install our green tech system on new aircraft before delivery. Finally, the cabin humidification market. We are in the beginning where we start to benefit from favorable market dynamics, when airlines to a greater degree define aircraft with humidifier on board in business class on new aircraft. The 787 program, CTT has high penetration on flight deck and crew rest, but it's not possible to fit it with humidification in business class. This is a possibility for retrofit.
We expect the airline to demand the same premium cabin climate on 787 as on their new A350s and 777X, where cabin humidification is available as an option. This is a market of approximately 1,000 aircraft. The A350 program, most of the, sorry, most of the A350s leaving the factory from 2025 and onwards for new operators will have humidification for flight deck and crew rest, and to a greater extent in business class. Early in the programs, airlines for various reasons did not select our system. The first A350s are reaching nine years, and cabin retrofits are now starting and will gain momentum. Since 2014, more than 600 A350s have been delivered, and Airbus is anticipating the first cabin retrofits to start in a few years. By 2028, there will be around 480 A350s that will have reached this age.
787 and A350 retrofit require cooperation with Boeing and Airbus, and we are approaching both. We are part of the A350 retrofit catalog, and Airbus promotes our system. With that run-through, I hope you have a good picture of CTT, where we are, and how we will succeed with our strategy. It's a very turbulent world right now, but I think CTT is in a good place after all, with great chances to navigate according to plan. I mean, that said, I hand it back to you, Karl, for a few questions.
Thank you, Henrik. One thing you pointed out there is that one of the reasons behind your historically nice growth journey up until the pandemic was that we saw an increase in the number of planes being produced every year, and per plane, the amount of products made by CTT has also increased.
If we say that, for example, now when we have the production rates being at five, and there is an aim to get to 10 next year, for example, at what point in time will you thereby more than double your deliveries to that customer? If we think about lead times, when Boeing says they will now produce 10 instead of five, at what point in time will that start becoming visible for you?
I mean, it's a little bit different on Boeing. Boeing is pretty good on putting out orders for quite a long period, roughly, I would say, average six months out. If they reach 10 somewhere, let's just say it's first April next year, probably three to six months before that. On A350, we have actually a very short lead time, it's 30 days.
Airbus can order very shortly before delivery, so that will come a little bit later on.
Another thing that has happened recently, in fact, we heard news about it just today, has to do with tariff-related aspects of restrictions between China and the U.S., and China was about to restrict Chinese customers from ordering aircraft. In general, how do you look at the, I mean, now they seem to have put it to a pause at least, but how do you look at the potential restrictions and how it would impact planes delivered and the CTT products delivered with them?
It's a very good question, and I will refer back to a little bit what especially Boeing was quite open in their Q1 report on this topic.
I mean, there is an over-demand on wide-body aircraft, which is where CTT is affected, and both Airbus and Boeing have said if we have problems with customers taking our aircraft due to tariffs, we will redirect them. Of course, there is a little bit, the further it is in the production line, it is a little bit trickier, but you can always change an aircraft by repainting it and check it to another customer. I think they will handle this in a good way, but of course, it will put restrictions on the business. American airlines are buying a lot of Airbus, and European airlines are buying a lot of Boeings. Tariffs will, of course, make life harder for the OEMs. I think that effect will not ripple down to CTT as much.
On the Airbus, something you highlighted here in the presentation is also that you aim to increase the number of CTT products per aircraft. Just based on delivery times and when those customers will receive their aircraft, do you think that we could see a meaningful effect of that already this year, or do you see that the customers who have ordered more CTT products per aircraft will take their deliveries first maybe in 2026? We will start seeing effects of a higher penetration rate on A350 during 2025 and especially during 2026. That is linked to customers that have selected A350 and also the times when they make their configuration definition freeze and when they are produced. We know that there are more CTT customers coming from 2025 and 2026 and onward.
We will see a gradual increase from this below one to above two in 2025 and 2026 based on the number of aircraft.
The final question is just that this company has for many years been delivering profits. You have still invested in the business, of course, but right now the balance sheet is strong. You pay out dividends. Is there anything that we should keep in mind regarding any big investments coming up and so on?
I think if we look at our historical figures, that investment level is quite a good reference because, I mean, I've talked about new programs with private jets. I've talked about retrofits, and of course, we need to invest a little bit in adapting our systems for new platforms. That is most likely in levels of what we have seen in the past before the pandemic.
When Airbus and Boeing are ramping up production, we also foresee a need to invest in our factory, and that, of course, will drive investments maybe a little bit on top of that for one to two years. Historical levels are a good reference on investment levels that we need to do.
With that, thank you, Henrik, for joining us. Thank you, everyone who has been listening and watching as well. Thank you.
Thank you.