Okay, everybody. So, welcome to this presentation of the year-end report for 2024. And I would like to hand over to our CEO, Peter Gille.
Thank you, Kim. So, let's go into the Q4 report then for 2024. So it was a stable Q4, and we had positive organic growth in several geographic regions, like Eastern Europe and some countries in APAC and so forth. If you look on the full year, the net sales for the full year was a little bit lower than last year. That is mostly related to an accrual effect that we had. If you look on how much we actually sold in terms of real sales or invoice sales, it was actually in line with 2023, which means that we actually had a bad Q2, but we really could at least get the sales back in the last two quarters. However, we're not happy with the full year sales, but it's in line.
We have a quite good gross margin, and that is the effect of our reduced share of hardware, and that we have a strategy to reduce the hardware in the product mix, and this year it's really, really good. We also have lower operating expenses, which shows up then in a better EBIT than last year. Next slide, so what we've done in 2024 is really to put the foundation in place for a stronger MSAB in the coming years. We have a new management team in place. We also have worked a lot with the strategy and updated that, and we have done several investments in our product, both small ones to improve the products, but also big ones as our new product that's coming out, which is Unify, and we will continue to increase the investments in our product portfolio during 2025.
The focus in the company is really to work hard with what we can control, which is the overall costs, and invest in product development and R&D to increase the product portfolio. And that's what we will continue to do also in 2025. So let's go over to the numbers, and I'll leave the word to Tony.
Thank you, Peter. So looking at the quarter, the quarter showed, although marginally, record high turnover in the company's history. However, the expectations, as Peter mentioned, were higher than the outcome with larger projects pushed forward in time. The projects are not lost, but have been pushed forward to mid or second half 2025. As a result of the delayed products, we see lower new sales in the quarter compared with previous year, but these are timing effects between the quarters, between new sales and renewals. Because when looking at the full year numbers, we see the distribution is on par with previous year. That said, close to 50/50. Split by regions, we see a growth in APAC and a small decline in Americas, which is explained by the projects pushed ahead, while EMEA is on par in the quarter.
Focus on software sales resulted in record high gross margins in the quarters since we actively do not sell hardware components that are not part of our products offered anymore. Total OpEx is on good level compared with previous year. When comparing OpEx towards previous year, we do also see some we have to take into consideration restructuring costs taken in Q4 last year. We have not seen that in this quarter. The amount was SEK 16 million in restructuring costs last year, while it was a positive reversal of SEK 2 million this quarter. The restructuring change of skills plans that was initiated the first half year of this year, 2024, has resulted in fewer employees compared with previous year, which is partly offset and covered by temporary consultants.
So going to the full year 2024, total sales for the year were 405 million SEK, while invoice sales amounted to 413 million SEK. That is to be compared with invoice sales previous year of 414 million SEK. Accrual effects driven by the way we recognize revenues resulted in a negative accrual effect of 11 million SEK between the two years. The main reason for that was a high Q2 sales previous year, which weren't met in this year, 2024. APAC reported sales growth of 35% compared to previous year, and that was mainly driven by increase in private sector sales in India and Malaysia. EMEA, which accounted for 54% of the total sales, recorded a sales decrease of 9% compared with previous year. That increase was partly due to the postponement of several large deals.
Americas was flat versus last year due to a number of deals that were pushed forward, as I mentioned before. Full year gross margin was 94% to compare with 90%. On next slide, I will come back to the company's gross margin development for the past three years. Temporary staff vacancies have resulted in lower staff costs. These vacancies were partly covered by consultants, as I mentioned, which increased other external costs. Replacement of consultants where possible by permanent staff is planned in 2025. Personnel-related restructuring costs for full year amounted to 15 to be compared with 16 previous year. But on the other hand, one-offs netted this year was 14 million SEK to be compared with 26 million SEK previous year. And those numbers also include write-downs, other one-offs, and a cleanup of the balance sheet. So going into 2025, we have a really good and stable balance sheet.
Earnings per share amounted to SEK 2.03, which is a 25% increase from previous year. So let's have a look at the gross margin development for the past three years. We have a focus on our cost and margins, which has resulted in significant improvement of our gross margin when looking back. We have cleaned up our product catalog, and that has contributed to margin improvement, as well as we have had focus on our core business of selling software. The cleanup was done in conjunction with the implementation of our new ERP system, which went live in April 2024, according to plans. The category new sales normally drive higher margins, marginally drive higher COGS, since a new sale normally includes one or more hardware components, while a license renewal only consists of software and therefore does not drive any COGS.
In our business model, an improved gross margin is a direct contribution to EBIT since the margin improvement passes right through OpEx and contributes to EBIT. Since a number of large projects have been pushed forward, we expect an increased share of new sales in 2025, which will also drive slightly higher COGS. We expect the COGS to be at a level of approximately 92% in 2025. So let's have a look at the balance sheet. The balance sheet, as I mentioned, remains strong with a stable financial platform for growth. We consciously review our product offering and capabilities, and as a result of that, an exploit was purchased externally during the year, and that is capitalized as an intangible asset. Internal R&D is still recognized as an expense in the profit and loss, while external purchases of exploits are capitalized. We closed the cash position at SEK 138 million.
The difference in working capital improvements between the years 2024 and 2023 are primarily due to an improvement accounts receivable collecting process, which resulted in a one-off effect during the improvements, and that was mainly done last year, 2023. The implementation of the new cash collecting process has been successful and resulted in improved days sales outstanding, also known as the DSO KPI measure, and we can see a table up in the right corner. We see the improvement in the number of average days sales outstanding in those years, so we see average days sales outstanding in this year, 2024, was 43 days, and that is to be compared with how it looked 2022. It was 78 days.
Good. So market dynamics, please. Next slide. So we have, as said, we have a positive organic growth in several of the geographic regions. In Eastern Europe, we have had significant progress this year, and we also see that we will continue to have that in 2025. But also in Asia, we had a big project in India, and we also see a lot of interest in our solution within the APAC area, within Australia, for instance, for the Frontline solutions and so forth. We also see that there's an increased engagement by some of the federal authorities in the public sector in the U.S., and we do believe that we will have some good progress there in the coming year. As said also, the sales in Eastern Europe exceeded our expectations, but we also expect that to keep growing down.
But in EMEA, we have not had the revenue outcome that we were hoping for or planning for. It is due to a number of projects that have been delayed. None of them have been lost, but they have been delayed or not coming alive at the time. And we'll see that in the later half of 2025, we should see some of these projects being materialized in terms of revenues for ourselves. So we see positive on EMEA in 2025, but we had some significant revenue disappointments during 2024 in EMEA due to these projects. Then coming to the thing in the company that I'm most satisfied with is really our development of the products and the product features. We are launching our new product, Unify Collaborate, which is really an interesting tool to work with in the market.
It would be a tool for gathering data and being able to share data among different sources within an organization. But we're also doing a lot of work with our premium extraction tool, the XRY, where we will launch a number of new features, and we have launched them also during 2024. We see this as really being the best tool in the market right now. We just need to get the customers to understand that and buy more of it as well. And it's always a time of releasing new features or products to get communicated to your customers and get the revenues coming. And we will continue to invest in that product also during 2025. And also, we are now launching the new generation of Frontline solutions with the MK4, which we know that some existing customers already have decided to go into that solution.
We will continue to work with improving the product portfolio during 2025. This is really a focus from us, and I have to say that I see a lot of progress in how to get things faster to the market at good quality. We also bring in new competencies within the R&D department and in the product. We have a new Product Director, Thomas Tasler, being hired. But we also have some new talent that we also will continue to recruit now in 2025 to increase the strength in our product development department. So in summary, we are really following the line of strategy that I communicating after the Q2 report, continue to invest in our products and making MSAB a stronger company, and also creating a financial platform within the company that really will enable us to scale when we increase the revenues going forward.
We will show the market that we really are a scalable company, and we will continue to both improve, but also to do targeted investments into new products to increase the market share for us going forward, but to make the market understand that we also need to focus more on our brand awareness and how we go to the market, how we communicate this to the market. Next year, we are participating in the biggest fair in our industry in Wilmington, and we will be one of the platinum sponsors in that event, and that's a difference how we go to the market now. We are investing more in marketing and communication around our products, and we're also trying to work much tighter with our customers in workshops, seminars, to really get them to understand the benefits we have in our new product portfolio that we are creating.
That's it. Now it's open for questions and answers.
If you have any questions, feel free to put them into the chat. Okay, so we have one question here then. Large orders. You have previously been speaking about large military orders in Q4 2024. Were those orders realized and booked as sales in Q4 or slipping into 2025? Can you take that one first?
Yeah. So we had one big order in Q4 that was related to that, but we also expect more big orders in that sector during 2025.
Could you also say something about those delayed in EMEA if you expect them to be realized in 2025?
Yes. We expect them to be realized in 2025. Some of them are related to Frontline projects, which didn't happen in 2024 due to a number of reasons. It can be anything from slow-moving customers to legal requirements and so forth, or government requirements even. So we are looking forward to seeing some of them realized in 2025.
We had a comment on the gross margin, impressive gross margins in Q4 as well as for the whole of the year. Is it fair to assume this new higher level versus historical is around 80-90 since MSAB is selling less hardware?
I can take that one.
Yes. We will continue to focus on a higher gross margin, and as Tony mentioned, we are aiming to be at around 92% for 2025 since we will have some Frontline projects, which contains a piece of hardware, but we are not dealing in hardware business anymore, so we expect it to be about 90%.
Then a question on OpEx. OpEx unchanged year to year, and number of employees was minus 14% year on year. Can you elaborate on that and OpEx growth for 2025?
Yeah, we will grow OpEx in 2025 on a marginal level, and that is due to that we want to invest more into the R&D department. That said, also some of the people in the R&D department today are consultants, so that cost will also be reduced. So we are planning to increase personnel expenses. We are planning to decrease the consulting cost. But overall, I would say we will see an increase in R&D expenditure next year, but within a controlled level.
And then we have a question about the military spending, that this is increasing. How much of MSAB sales is related to the military, and are you seeing any effects of increased investments from there?
I would say we don't see an increase this year or 2024, but hopefully we will see an increase in 2025, 2026.
Market consolidation appears to be a trend in the digital forensics industry. What's your opinion about M&A growth versus organic for MSAB?
I think M&A growth is definitely interesting, but before doing the M&A, we need to get MSAB in better shape and start creating organic growth our own, but then it's a natural step to go into M&A after that, and in my previous companies, I've always done a number of M&As, so that's absolutely something that I want to do, and there are definitely opportunities in the market and a number of companies that wanted to have discussions with us because they want to join forces, so there are opportunities, but first we need to start performing ourselves.
A specific question about targeted investments. Does this relate to iOS? Can you quantify them?
I would rather not answer that question before we release the new functionality that we will release in 2025.
And then the last question we have for the moment is regarding intangible assets in the balance sheet. Increased slightly quarter on quarter for Q4. Have you started capitalizing investments?
Yes. So we are capitalizing, as Tony said, the exploits that we are buying externally, but we don't capitalize our development efforts, our own internal development efforts. I think that we will keep as that, at least for now. But it feels natural when you are buying something that will be part of a new functionality or a new part of the product. It's really an investment that should be capitalized. And that is the strategy we have. Do you want to comment on that?
No, I was just same as you.
Okay, so that appears to be all of the questions. We've answered all of your questions here. So I guess if there aren't any more, then we'd like to thank you very much for participating in the call. Thank you very much.
Thank you.
Thank you.
Have a good day.