In This Article:
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Troax Group AB (FRA:5TOA) achieved a 12% order intake growth in Q4 2024, with 5% being organic growth.
-
The company delivered a solid EBITA margin of 17.2% despite facing FX headwinds and structural impacts.
-
Troax Group AB reported strong operational cash flow and continued to reduce its net debt, with a net debt-to-EBITDA ratio of 0.8.
-
The acquisition of ST&L is expected to strengthen Troax's service offering, particularly in machine safety and risk assessment.
-
The company maintained a stable gross margin in line with its formal target, despite lower volumes.
Negative Points
-
Troax Group AB experienced relatively weak demand in Europe, continuing the trend from the previous quarter.
-
Sales were flat compared to Q4 of the previous year, with an organic decline of 7% offset by structural and FX factors.
-
The EBITA margin declined from 20.1% in Q4 2023 to 17.2% in Q4 2024, partly due to dilution from acquisitions.
-
The company faced challenges in converting presales activities into orders in the automated warehousing segment.
-
There was a decline in order intake in new markets, particularly in APAC and Eastern Europe, attributed to timing of orders.
Q & A Highlights
Q: Can you provide some color on the timing effect of the organic growth regions and if you saw that effect in Garantell? A: Martin Nystrom, CEO: The timing effect is generally influenced by when larger projects are placed as orders. We had a good fourth quarter, but it wasn't due to an unusual number of large orders. Garantell followed its historical pattern without any unusual changes.
Q: What is the activity level and talks with automotive customers in North America after the US elections? A: Martin Nystrom, CEO: The hypothesis that decisions would be made post-election remains valid. However, there hasn't been a significant change in decision-making post-election. The uptick in Q4 wasn't a reflection of post-election decisions.
Q: Is there any shift or signs of stabilization in the European market during the quarter? A: Martin Nystrom, CEO: Europe follows the pattern seen in previous quarters, remaining stable at a relatively low level. The order intake numbers depend on specific customer projects rather than a general market trend.
Q: Can you comment on the gross margins and the impact of underabsorption? A: Martin Nystrom, CEO: The gross margin was stable due to pricing discipline and stable raw material prices, which outweighed the underabsorption from lower volumes. The price and cost levels of input materials provided some tailwind.