In This Article:
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Organic Net Sales Growth: 3.1% for Q4 2024.
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Gross Margin: 44.7% for Q4 2024.
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Adjusted EBITDA: SEK653 million for Q4 2024, a 6.5% increase from the previous year.
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Adjusted EBIT: Improved by almost 10% for Q4 2024.
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Operating Cash Flow: SEK479 million for Q4 2024, with a cash conversion of 82%.
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Full Year Organic Growth: 3.1% for 2024.
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Full Year Gross Margin: Improved from 43.1% in 2023 to 43.5% in 2024.
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Full Year Cash Conversion: 77% for 2024.
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Net Debt: Decreased to SEK4.2 billion in Q4 2024.
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Leverage: Improved to 2.0% net debt to adjusted EBITDA.
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Equity Ratio: 51.2% in Q4 2024.
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North America Organic Growth: Almost 8% for Q4 2024 and more than 5% for the full year.
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Western Europe Organic Growth: Flat at 0.3% for Q4 2024 and 1.9% for the full year.
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Rest of the World Organic Growth: Negative 3.7% for Q4 2024, but 4.1% for the full year.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Arjo AB (FRA:A39) reported a 3.1% organic net sales growth for Q4 2024, indicating a recovery from Q3.
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The company saw strong growth in North America, with the US market showing positive development due to internal restructuring and improved customer financial situations.
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Gross margin improved year-over-year from 43.1% to 43.5%, supported by lower material costs and price adjustments.
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Adjusted EBITDA increased by 6.5% to SEK653 million, and adjusted EBIT improved by almost 10%, reflecting underlying profitability improvement.
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The company launched a new product, the Symbliss bathing system, which has received positive customer feedback and is expected to strengthen market positions.
Negative Points
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Challenges persist in Western European markets, particularly in France and the Netherlands, due to uncertainties in healthcare funding.
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The rest of the world segment experienced a negative organic net sales growth of -3.7% in Q4, impacted by a tough comparison from the previous year.
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Higher than normal salary inflation continues to be a headwind, affecting gross margin improvements.
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Operating cash flow decreased to SEK479 million in Q4 2024 from SEK734 million in Q4 2023, due to working capital impacts.
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The company faces ongoing challenges in China, with a weak finish to the year and a need to change market strategies for growth in 2025.
Q & A Highlights
Q: Could you share more details on the strong order growth mentioned in the presentation? Should we expect a strong first half of 2025, possibly towards the upper end of your 3% to 5% growth range? A: The order intake growth in Q4 was larger than the net sales growth, which is positive. We are entering 2025 with a larger order book, particularly in North America. However, the order book is delivered over time, so the impact will be seen throughout 2025 rather than immediately.