Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ependion AB (FRA:TW4, Financial) reported a 20% increase in order intake for Q4 compared to the same period last year, indicating strong demand across all business segments.
- Westermo achieved an all-time high EBIT margin of 17.7%, driven by improved gross margins and operational efficiency.
- The company reported a record high free cash flow of SEK 187 million for the full year 2024, showcasing strong cash management.
- The establishment of Westermo India is progressing on plan, with a strong local team and production equipment in place.
- Beijer Electronics saw an 8% increase in order bookings in Q4 compared to the same quarter last year, with notable growth in the Marine segment.
Negative Points
- Beijer Electronics experienced an unfavorable sales mix due to the phase-out of low-margin Display Solutions, negatively impacting margins.
- The company faced a negative FX impact of SEK 4 million in Q4, affecting financial performance.
- Despite improvements, the full-year EBIT margin for 2024 was 11.3%, which is below the company's target of at least 15%.
- There is significant uncertainty in the geopolitical and economic environment, which could impact future performance.
- The phase-out of low-margin products in Beijer Electronics is expected to continue into 2025, potentially affecting short-term sales and profitability.
Q & A Highlights
Q: Could you elaborate on the demand trends and customer conversations, given the strong order intake?
A: Jenny Sjoedahl, CEO: We are cautiously optimistic as projects that were delayed are now restarting. Customers had been using inventory throughout 2024, but demand is slowly improving. However, it's too early to confirm a trend shift.
Q: Is there pent-up demand in the Train segment, given its recent performance?
A: Jenny Sjoedahl, CEO: Train orders can vary significantly between quarters. Our Train customers have strong backlogs, and there has been some inventory depletion. We expect demand to pick up compared to earlier low levels in 2024.
Q: Can you explain the drivers behind Westermo's record-high margins?
A: Jenny Sjoedahl, CEO: The improvement is due to enhanced supply chain efficiency and operational excellence, not mix or specific orders. We've streamlined production, negotiated better component prices, and improved processes, making these margin levels sustainable.
Q: How is the X3 product launch progressing?
A: Jenny Sjoedahl, CEO: The X3 launch is on track, with the web version introduced in Q4. The full range has been showcased at exhibitions, and we are engaging with customers for further rollouts in 2025.
Q: What are the implications of the product portfolio pruning in Beijer Electronics?
A: Joakim Lauren, CFO: The transition will be smooth, with no significant costs. It's a strategic move to focus on profitable growth, aligning our cost base accordingly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
