Detection Technology Plc company announcement 6 February 2025 at 09:00 (EET)
DETECTION TECHNOLOGY PLC FINANCIAL STATEMENTS REVIEW JANUARY-DECEMBER 2024
Detection Technology Q4 2024: A strong finish to a good year
October-December 2024 highlights
- Net sales increased by 0.9% to EUR 31.6 million (31.3)
- Net sales of Industrial Solutions Business Unit (IBU) increased by 4.2% to EUR 5.2 million (5.0)
- Net sales of Medical Business Unit (MBU) decreased by -4.6% to EUR 12.5 million (13.1)
- Net sales of Security Business Unit (SBU) increased by 5.3% to EUR 13.9 million (13.2)
- Operating profit (EBITA) was EUR 5.2 million (4.6)
- Operating margin (EBITA-%) was 16.3% of net sales (14.8%)
- Earnings per share were EUR 0.28 (0.24)
- Earnings per share (diluted) were EUR 0.28 (0.24)
January-December 2024 highlights
- Net sales increased by 3.6% to EUR 107.5 million (103.8)
- Net sales of IBU increased by 18.2% to EUR 19.0 (16.1)
- Net sales of MBU decreased by -12.8% to EUR 42.2 million (48.4)
- Net sales of SBU increased by 17.8% to EUR 46.3 million (39.3)
- Operating profit (EBITA) was EUR 14.9 million (8.8)
- Operating margin (EBITA-%) was 13.9% of net sales (8.5%)
- Earnings per share were EUR 0.76 (0.38)
- Earnings per share (diluted) were EUR 0.76 (0.38)
- Dividend EUR 0.50 per share* (0.23)
UNAUDITED (Figures in parentheses refer to the corresponding period of the previous year.) (*The Board of Directors' proposal to the AGM.)
President and CEO, Hannu Martola:
"All in all, the fourth quarter marked a strong conclusion to the year 2024, meeting our expectations. Sales remained consistent with the record comparison period, while profitability showed improvement, and cash flow saw a notable increase both year-on-year and quarter-on-quarter-thanks to good productivity and networking capital management. The Board is therefore proposing a record dividend of EUR 0,50 per share (0,23). The past year underscores the resilience and efficiency of our operations, even in a turbulent environment. We are well-positioned to capitalize on new opportunities in 2025.
Our industrial solutions saw steady demand in Europe, particularly in food and industrial CT (computed tomography) applications. In the APAC region, demand was also strong, but intense competition put pressure on prices. As expected, our industrial sales continued to grow quarter-on-quarter and year-on-year. However, the growth rate was influenced by a strong comparison period and competitive pressures from TFT (thin-film transistor) flat panel detector segment in China. We anticipate growth to continue in Q1 of 2025.
The sharp decline in demand for medical X-ray imaging solutions that started in July 2023 has stabilized. Challenges in the Chinese market, including healthcare reform and the associated anticorruption campaign, delayed purchasing decisions. However, as the effects of the anticorruption campaign have begun to fade, we anticipate a return to growth in sales during Q1.
Our security business demonstrated better-than-expected performance, with sales showing growth despite a strong underlying quarter. The growth was primarily driven by robust demand for security CT and cargo imaging solutions. Key contributors included aviation system upgrades and increased global investments in border protection. We anticipate a temporary decline in security sales due to delays in airport construction in Q1 and growth to start in Q2.
We are pleased with the reduction in working capital, strong cash flow, and especially the improved net result in Q4. The positive development was driven by growth in net sales, enhanced productivity, and a favorable sales mix.
The ramp-up of the Indian facility is progressing with deliveries set to start in late H1 2025. Similarly, the expansion of EU-origin manufacturing in Oulu has progressed as planned, enabling us to produce 10% of our global product sales in Finland. These efforts enhance customer experience and mitigate risks against the macro-economic uncertainties.
To advance our strategy and competitiveness, we have adopted a new operating model. Since the beginning of this year, the newly established regional business units have taken full responsibility for driving sales and strengthening customer relationships. This shift lays a resilient foundation for our future growth.
Despite heightened turbulence in global markets and fierce price competition in China, the year-on-year market outlook has shown improvement. In 2025, the growth drivers remain consistent across all our key markets. The new 25% tariffs imposed by the US on Canada and Mexico, and the additional 10% tariff on China have only a minor direct impact on our profitability.
In our assessment, global demand for medical X-ray imaging solutions is beginning to recover in Q1. Security sales are expected to drop temporarily in Q1 and return to growth in Q2, while industrial sales remain good. When projecting the sales performance of our newly established regional business units for Q1, we anticipate stable sales in all regions. Overall, we expect our year-on-year total net sales to be flat in Q1, followed by double-digit growth in Q2 of 2025 as medical sales return to growth."
Key figures
| (EUR 1,000) | 10-12/2024 | 10-12/2023 | 1-12/2024 | 1-12/2023 |
| Net sales | 31,613 | 31,315 | 107,514 | 103,794 |
| Change in net sales, % | 0.9% | 10.9% | 3.6% | 5.3% |
| EBITA excluding NRI | 5,166 | 4,622 | 14,892 | 9,656 |
| EBITA excluding NRI, % | 16.3% | 14.8% | 13.9% | 9.3% |
| Non-recurring items (NRI) | 0 | 0 | 0 | -873 |
| EBITA | 5,166 | 4,622 | 14,892 | 8,784 |
| EBITA, % | 16.3% | 14.8% | 13.9% | 8.5% |
| R&D costs | 3,125 | 2,723 | 11,379 | 11,702 |
| R&D costs, % of net sales | 9.9% | 8.7% | 10.6% | 11.3% |
| Cash flow from operating activities | 6,891 | 2,987 | 20,133 | 9,672 |
| Net interest-bearing debt at end of period | -27,767 | -12,665 | -27,767 | -12,665 |
| Investments | 485 | 1,121 | 2,218 | 14,426 |
| Return on investment (ROI), % | 17.4% | 9.9% | 17.4% | 9.9% |
| Gearing, % | -33.6% | -17.4% | -33.6% | -17.4% |
| Earnings per share, EUR | 0.28 | 0.24 | 0.76 | 0.38 |
| Earnings per share (diluted), EUR | 0.28 | 0.24 | 0.76 | 0.38 |
| Number of shares at the end of the period | 14,655,930 | 14,655,930 | 14,655,930 | 14,655,930 |
| Weighted average number of shares outstanding | 14,655,930 | 14,655,930 | 14,655,930 | 14,655,930 |
| Weighted average number of shares outstanding, diluted | 14,659,106 | 14,655,930 | 14,660,744 | 14,660,912 |
Business outlook
Detection Technology expects its year-on-year total net sales to remain stable in Q1 and to achieve double-digit growth in Q2 of 2025.
Geopolitical situation, possible new US import tariffs, U.S.-China relations, global economy, China's healthcare reform, price competition especially in China, the indirect impacts of the war in Ukraine, and events in the Middle East create uncertainty.
Detection Technology aims to increase its sales by at least 10% per annum and to achieve an operating margin (EBITA) of 15% in the medium term.
Q4 2024 webcast
Hannu Martola, the President and CEO of Detection Technology, will present the Q4 and January-December 2024 financial performance and events to analysts, investors, and media at a webcast. The live webcast in English will begin on 6 February 2025 at 13:00 (EET).
A link to the webcast is available on the company's website at https://www.deetee.com/reports-and-presentations/webcasts/. A recording of the webcast will be accessible on the same page.
This release is a summary of Detection Technology's financial statements review January-December 2024. The complete report can be found attached to the release and on the company's website.
Board of Directors, Detection Technology Plc
Further information
President and CEO Hannu Martola will be available for interviews and further information on the release date at 9:00-11:00 (EET).
Hannu Martola, President and CEO
+358 500 449 475, hannu.martola@deetee.com
Nordea is the company's Certified Advisor under the Nasdaq First North GM rules, +358 9 5300 6774
Detection Technology is a global provider of X-ray detector solutions and services for medical, security, and industrial applications. The company's solutions range from sensor components to optimized detector subsystems with ASICs, electronics, mechanics, software, and algorithms. It has sites in Finland, China, France, India, and the US. The company's shares are listed on Nasdaq First North Growth Market Finland under the ticker symbol DETEC.
Distribution: Nasdaq Helsinki, key media, www.deetee.com
