Aalberts Indus Nv Ord

Good morning, ladies and gentlemen. Thank you for joining us today. It's my pleasure to welcome you to Albert's full year presentation for the year 2024, live in our headquarter in Utrecht. My name is Rutger Rauker, Director, Investor Relations. This past year, we delivered again a resilient performance despite challenging ad markets. We look forward to share with you today our progress made. Stefan will kick off the presentation with key highlights and an update on our operational developments. This will be followed by Arno, who will share our financial development, highlighting how our strategy has translated into a solid financial performance. Stefan will then give you an update on the strategic actions as shared last December during our Capital Markets Day. After the presentation, we will give you the opportunity to engage directly with us in the Q&A session. Your questions and feedback are very important to us, and we encourage you to participate. Later today, we will make both the presentation and the recording of this webcast available on the website. Please welcome Stefan Simonetta to begin our presentation.

Good morning, everyone. Let's start this webcast and show you first the key highlight of the year. 2024 has been a challenging year, but we are delivering a solid and resilient performance. First of all, we are reporting more than 3.1 billion euro revenue. And due to all the macroadmin and market headwinds and also some uncertainty in the geopolitical situation, we are reporting a 3.4% organic decline. Thanks to the great work from all our team, we managed to improve our added value and are delivering a solid EBITDA margin of 15% before exceptionals. We are continuing our journey, taking action to manage the short and the long term but also continuing to invest our capex to drive our business development plan, to drive growth. And in 2024, we are reporting a capex of 231 million, and we are delivering another strong free cash flow of 334 million euro. Our portfolio optimization, our investment in leadership position, as per our strategy to double our revenue in the US, well on track and i'm very pleased to report that we announced two acquisitions in the us for our industry segment with the acquisition of sgp and the agreement reach with with paulo we also did as you know one divestment for our building segment we are delivering an eps of 3.12 euro and are sustaining a high dividend at 1.13 euro, same as last year. And as we inform all of you in the last Capital Markets Day, we are starting a share buyback program of 75 million euro. And obviously, we continue to take action on what we can do. And in 2024, we took some measure accelerating operational XLX program. in order to prepare for the future, in order to sustain our high margin and continue to improve our EBITDA, basically addressing the short-term challenges. So overall, a solid year despite challenging end markets. And today is the first time we are now reporting and disclosing the performance with our three segments. in building, in industry, and in Semicon. The number you see on this slide is what we will be reporting and disclosing every quarter as per our new reporting frequency. And you will see that there are different dynamics on this end market in terms of top line and in terms of profitability. But I will start to give you an update on the operational development by segment and then later Arnaud will give you an update on the financial side also by segment. So let's start with building. So with our building segment, it has been a mixed picture. But the good news is that Q4 has been the best quarter of the year. We are back to organic growth with 2% organic growth in the last quarter. Also, the full year is ending at minus 3%. And they are quite a mixed dynamics with our product line, with our end market, because we continue to grow in the US. We continue to grow in APAC, in Middle East, in also UK. Good opportunity. And now some of our product line are also winning share thanks to the innovation, thanks to the business development, thanks to the investment we did in the future. And as you can see, our border room technology, our heat treatment solution our valve also in the us are doing quite well and our growth technology grew in 2024. obviously when we report a total negative organic growth if some are doing well some are doing not so well even we believe many of our product line which are declining are actually doing bit better than the market but strong headwinds with the french and german markets especially in the new construction in the new build which has impacted mostly our connection system portfolio as a consequence Our performance by segment has been challenging. Clearly, building is a segment where we have the biggest opportunity to improve our profitability, as we are only at 12.9%. But this is where also, despite the marketed wins, we never compromise pricing. And also in building, we have improved added value. US has been a major improvement. These are all the action that we took to improve supply chain delivery performance. This has payoff and that's what we will continue to do. The innovation is also what allow us to have superior pricing power and to deliver stronger financials. And that's exactly why we want to do also better innovation also in our connection system in order to do much better than the market. We continue to optimize our footprint in the building segment. We have announced a few factory closures and we will continue to do that. But of course, most of the restructuring action, most of the operation excellence program we took have been especially in our building segment to ensure we improve profitability in 2025. So first sign of recovery in Q4 and a lot of opportunity to improve our profitability, but also reduce inventories. And that's where we still have some work to do to better improve our days on hand, what we call our DIO. And this is, of course, in building where we have the biggest opportunity. In industry, quite a different dynamics because the whole year has been quite negative. And Q4, we also saw the slowdown, especially in automotive, in machine build, in agriculture, and French and German industrials have been really down. The good news. is that we continue to see very good growth on aerospace, on power generation, which is exactly aligned with our strategy to have within our industry segment more end market diversification and have a bit like exposure to automotive. But here, the good news is the performance. Our team have done a fantastic job to sustain high EBITDA margin despite this organic growth decline. And this gives you a lot of confidence for the future because we will continue to optimize, to take action, and to keep the strong EBITDA performance in our industry segment. continuing to invest business development, continuing to drive footprint optimization, and continuing to add capacity locally, always in the region, for the region. As you know, this is most of it a service business, and the customer proximity is what make us win. And finally, on Semicon, We are still growing as expected with mid single digit. So aligned with our expectation, reporting full year 4.7% organic growth. But Q4, we saw major inventory adjustment from our customers. And as you see, Q4 has been minus 10%, especially with our frame and modules manufacturing that we are delivering to our customers. And so growth on some mechatronic technologies, growth in machine conditioning. We see also, this is just the beginning, the potential of refurbishment, the repair and the reuse with the new site we opened here in the Netherlands. But the frame and module has been the major challenge that has put the organic growth down for the full year. The profitability has been quite stable. We sustained more than 14% on the Semicon. capacity expansion are well on track actually many of the footprint initiative should finish this year we continue to invest in technology because we want to be clearly a technology partner we want to offer more system more module to our customers and We are trying to find the right balance, right? Not compromising the short-term performance, but also sustaining capability, R&D power for the long term. But we also are aware that we still have some operational excellence within our Semicon to do better on quality, better on inventory, and also potentially better on cost. So the outlook remains strong and we will have to manage the short-term challenges in 2025. I'm very pleased also to report that in 2024, we continue to have more than 70% of our revenue linked to our sustainable development goals. We are closing the year with 71%. And on our scope one and scope two CO2 emission, we have been able to reduce by 12% as the emission compared to last year. So making good progress align with our sustainable commitment. And the last point I want to say, in 2024, we have welcomed some new colleagues in the executive team, but we continue to have our operating model with myself and Arnaud being the management board, having now five CEOs which are running our businesses, which are fully accountable for their performance, for their strategy, for their customer centricity, and of course, their growth agenda. And they are all now supported by six group function leader, which will be there to act as strategic business partner, but also to drive functional excellence, to drive synergies across our now three segments. That's the new executive team that is going to deploy our new strategy and starting the third evolution phase of the company. That's what I wanted to share as a key highlight. But now let's go to the financial development. And I would like to welcome Arnaud to give you a financial update. And I will be back later on to talk about strategy in actions. Arnaud.

Thank you, Stéphane. Thank you. Thank you. And also, of course, good morning, everybody in the webcast. Also, from my side, let me take you through the financial development of our business. Starting with hours as a total. um the revenue decreased organically with 3.4 percent and as you all know in october here today's october it was still 2.9 so we really faced a slowdown in the last quarter where the building business organically declined with 3% full year, industry 7.5% full year, and Semicom still grew 4.7% full year. EBITDA margin we could sustain at 50%, first of all, by a very strong added value performance again. We could even improve our added value with 1% versus last year. And that resulted in an EBITDA of 451 million euros. and a net profit before amortization of 345 million euros. And these numbers are before exceptionals. I will come back later to that. Capital expenditure, we continue to invest in innovation, in expansion, in footprint, and our CAPEX also increased towards 231 million versus 224 last year. But again, we stayed within the benchmark of 200 to 250 million as we have guided. Free cash flow, also free cash flow, a solid performance. 334 million euros in 2024 versus a very strong 423 last year for reasons that we decreased our inventories and debt year much stronger, coming from a very high level in 2022. Nevertheless, our EBITDA reduced at 42 million, Our network and capital move also decreased with 36 million. And our increased CapEx cash out of 32 million are the biggest movement factors elements in this free cash flow bridge. And again, we deliver 50% EBITDA margin in challenging markets. The revenue bridge. We added 3.7 million euros from our acquisition that we made in the last quarter last year. stp then our divestments of 23 this tech and 24 epc we lost 75.2 million euros because of these disposals then the currency translation impact amounted to 8.1 million euros positive this year mainly polish slotties and then last but not least the organic decline of 112 million euros is the 3.4% that we already gave to you. And that is totalized to the 3.1 billion euros revenue in 2024. EBIT A bridge coming from the 15.7% last year to the 50.0% this year, or let's say 2024. We added from our acquisition in the fourth quarter, 400,000 euros of EBITDA. We lost because of our disposals in 23 and 24, 7 million euros of EBITDA, currency translation impact had 800 000 positive impact in ebitda into 2024 and last but not least organically we lost 44.1 million euros of ebitda and that is then summing up to the 471.1 million euros for 2024 15.0 percent the eps bridge coming from the 338 last year divestments lost 6 cents organically the impact was 37 cents and then you see that finance costs yeah we could we could reduce finance costs with 8.6 million euros last year and that that gave 8 cents benefit in this EPS bridge Also, tax rate was lower than the year 2023, also bringing $0.05. And then last but not least, the currency impact, $0.04, totalized to the €3.12 for 2024. Then the revenue split for hours in total still per end market. And you can see that building end market in the three segments that we have now, that we are now reporting, building, industry, semi-com, building is still the biggest with 51%. Industry is 33%, and Semicom is 60%. And when we look at it per region, we see Europe with 72%, the biggest area, then America with 22%, and APEC Middle East Africa with 6%. And now we give it per segment. The three segment report, the new segment reporting, building, industry, Semicom, We also give you the revenue split of these three segments. And there we see Europe in building with 69%, America with 27%, APEC Middle East Africa, 4%. Then industry, it's also Europe approximately the same, 68%. America, 23%, a little bit smaller still. And APEC Middle East Africa, 9%. And then last but not least, Semicom, where we do 88% still in Europe, America 6%, and APEC Middle East Africa 6% also. And that brings me to the segment reporting, where we see the revenue decline in building, full year, to 1.603 billion euros. organically already explained 3%, but there we see a better trend. After three quarters of organic decline, we saw the fourth quarter 2024 with a growth of 2%. So it looks like the trend has been broken. EBIT A margin, 12.9% versus 30.9% last year. So clearly because of the organic decline, we also lost 1% of margin. and still CAPEX increased towards 80 million of course long term projects that we are still executing and which are now about to go down. So that means that for the next year we will expect lower CAPEX in building. Corrective actions are in place of course to improve the performance also going forward in our building segment. Industry. In industry, we saw a decline towards the 1.061 billion euros in 2024, organically 7.5% minus. And when you compare that to 2023, it was still 8.9% plus, huge difference. And also in industry, it was actually the picture the whole year. So every quarter was negative. And nevertheless, due to many, improvements we made in the past already in our structural cost improvements, but also with all kinds of innovations. Of course, good acquisitions have been made. We could sustain our EBITDA margin to 80.6% versus the 80.9% in 2023. We believe that's a very solid performance of the team made. CAPEX, a little bit lower, about 100 million euros in 2024. But it's clear that there's a very strong EBITDA performance made by the team in industry despite organic decline. And Semicon. Semicon, we still grew. 4.7% organically full year, but there the trend was after three quarters of growth, the fourth quarter was a decline. Nevertheless, 4.7% full year, an EBITDA margin slightly lower, 40.2%. It is clear that the slowdown in the last quarter impacted also our EBITDA margin. Capex, still ongoing, grew towards 50.7 million euros in 2024, with a lot of big projects ongoing. So the EBITDA margin was clearly challenged by a lower growth in the last quarter, actually a decline in the last quarter. Then the exceptional cost, the numbers I just presented are all our operational results. And these are exceptional costs that we did not take into these operational results. And actually, these are three elements. The first one you already know, we communicated in November. We have accelerated our operational excellence program. We took 54.5 million euros as a one-off cost, and this program gives an annual benefit of approximately 30 million euros, of which 10 million has already been realized in 2024. The decision to leave Russia took a cost of 37 million euros in our books, and then the outcome of an arbitral award, 28.7 million relating to an M&A, And that clearly was unexpected from our side. That is also the reason that we filed for an annulment for this award. Shareholder return over the last 10 years. Like also Stefan already said, one year of 13 per share is our different proposal, which is stable versus last year. And that's also because we are confident being on the right track going forward. And for the first time in history, we also give and announce and share buyback program of 75 million euros. Starting from tomorrow. With an end date of the 24th of October 2025. And this share buyback program will also contribute to the EPS going forward because we will repurchase and also cancel these shares. It's an improved shareholder return. in challenging market circumstances. The track record of Albert's over the last 50 years with a special year this year with our 50 years anniversary, which you can also see there that we are still profitable, growing, sustainable over the last 50 years. And it's a proven sustainable business model. And then the shareholder value creation. where we present here to you the return on incremental capital employed of 90% over the last 10 years. We believe this is a very good KPI to see the return for the long term of your capital allocation where everything is in, of course. And over the last 10 years, we did 90%. Earnings per share. Over the last 10 years, a CAGR of more than 8%. And in the dividend per share, we have realized a CAGR of more than 9% over the last 10 years. And then on top of that, also, we have now a share buyback program of 75 million, which will start, as I said, from tomorrow. We are committed to create long-term shareholder value. And that is also what you can see in this overview. And then, I would like to hand over again to Stéphane.