In the year-end report for VBG Group reports a strong fourth quarter and the groups second-best yearly earnings.
Fourth quarter 2024
- Consolidated sales decreased 12.0% to SEK 1,276.6 M (1,449.9).
- Organic growth amounted to -13.0% (15.4), adjusted for acquired sales and currency effects between the years.
- The sale of Truck & Trailer Equipment's warehouse and distribution property in Denmark impacted operating profit (EBITA) positively by SEK 9.8 M.
- Consolidated operating profit (EBITA) totaled SEK 194.5 M (217.5), with an operating margin (EBITA) of 15.2% (15.0).
- Profit after financial items amounted to SEK 172.5 M (183.4).
- Earnings per share amounted to SEK 4.49 (5.18) before and after dilution.
Full-year 2024
- Consolidated sales decreased 2.8% to SEK 5,578.9 M (5,739.8).
- Organic growth amounted to -4.6% (18.2), adjusted for acquired sales and currency effects between the years.
- Operating profit (EBITA) decreased to SEK 842.7 M (860.9), with an operating margin (EBITA) of 15.1% (15.0).
- Profit after financial items increased to SEK 782.2 M (766.3).
- Earnings per share amounted to SEK 23.52 (22.88) before and after dilution. The Board of Directors proposes an increase in the dividend to SEK 7.25 (7.00), corresponding to 30.8% (30.8) of profit after tax.
Comment from VBG Group's President & CEO, Anders Erkén
In challenging macroeconomic conditions, VBG Group posted its second-best yearly earnings ever in 2024, which emphasizes the Group's robustness and adaptability. The combination of geographic and product diversification disciplined operational governance and strategic decisions made it possible to effectively navigate market headwinds and maintain strong financial stability and profitability.
Stable margins despite challenges
The fourth quarter of 2024 was marked by a combination of challenges and opportunities, which also summarizes the year as a whole. VBG Group's net sales decreased 12% to SEK 1,277 M (1,450), which reflected falling demand in key regions such as North America and Europe. Operating profit (EBITA) for the quarter amounted to SEK 195 M (218), with an EBITA margin of 15.2% (15.0). Despite flagging sales volumes, we successfully maintained good gross margins through efficiency improvements and effective cost control.
Net sales for full-year 2024 amounted to SEK 5,579 M (5,740), with an operating margin (EBITA) of SEK 843 M (861) and an operating margin (EBITA) of 15.1% (15.0). Despite operating profit (EBITA) decreasing from last year's record-high levels, it was still the second-best result in the Group's history. If the operating margin (EBITA) is adjusted with the sale of the property in Denmark as well as costs for the acquisition of Italytec Imex Indústria e Comércio Ltda, the operating margin amounted to 15.0% - which is in line with the Group's objective.
The positive earnings are also reflected in earnings per share, which amounted to SEK 23.52 (22.88), and in the operating cash flow, which totaled SEK 796 M. On the basis of the Group's strong earnings, the Board of Directors proposes an increase in the dividend to SEK 7.25 (7.00), corresponding to 30.8% (30.8) of profit after tax.
Active efforts in the divisions promoted profitability
Mobile Thermal Solutions demonstrated its adaptability in the face of softer demand, which was due primarily to inventory adjustments by customers in North America. Operational efficiency enhancement measures enabled a stabilization of the gross margins.
Due to a positive product mix and implemented improvements, Truck & Trailer Equipment maintained robust profitability in a time of flagging demand in the trailer segment.
Ringfeder Power Transmission posted its best earnings ever, with sales growth of 13% during the fourth quarter. The division's strong performance is attributable to Rathi's good earnings, the recovery in some markets and the division's positive product mix and good cost control.
Strengthened margins and strategic investments
Good cost control and a focus on profitable growth enabled improvements to margins in 2024. Our stable cash flow made it possible to carry out strategic initiatives such as the decision to consolidate manufacturing units in Toronto and to integrate Rathi Transpower into the Group's operations. These investments strengthen our core operation and enable VBG Group to be positioned for future productivity gains and growth.
Focus on cash flow
Maintaining stable cash flow in a time of declining demand was a central component of our strategy in the second half of 2024. Proactive efforts and operational improvements focusing on tied-up working capital generated a stable cash flow and created the flexibility to continue carrying out initiatives for increased growth.
2024 was characterized by measures to optimize our global operation. Automating selected procedures, optimizing production and refining the responsibility in the supply chain promoted increases in productivity and reduced costs. These measures have already begun contributing to our earnings and will continue to do so during 2025 and beyond.
Acquisition of Brazilian company Italytec Imex Indústria e Comércio Ltda.
2025 started off with VBG Group's January acquisition of the Brazilian company Italytec, which is the leading supplier of air conditioning systems for the Brazilian off-road market.
The acquisition of Italytec is a strategic step in our journey of growth as a global industrial Group, and it strengthens our presence in Brazil and South America, which is in line with our long-term strategy. Italytec's products expand our customer offering and promote the Group's ambition of creating a safer society.
The future
None of the achievements in 2024 would have been possible without the commitment of our employees, customers and partners. Steadfast support has made it possible for VBG Group to turn challenges into opportunities and strengthen our position as a leading industrial company. I would like to extend my sincerest thanks, and I look forward to continuing our good collaboration.
Looking ahead, we are preparing for unpredictable macroeconomic developments marked by geopolitical events and volatile fluctuations in the markets in Europe, the US and China. Despite these challenges, we are strongly positioned for future growth owing to our stable balance sheet and proven operational resilience. We are convinced of our ability to meet new challenges, leverage opportunities and continue posting profitable and sustainable growth.
Through targeted efficiency enhancement measures, broadened product offering and strategic investments, we will continue to strengthen our profitability and our cash flow. Together, we will guide VBG Group on a journey marked by stability and profitability, as well as social and environmental accountability.
Contact
Anders Erkén
President & CEO VBG Group
Telephone: +46 521 27 77 88
E-mail: anders.erken@vbggroup.com
About Us
VBG Group AB (publ), domiciled in Vänersborg, is the Parent company of an international engineering Group with wholly owned companies in Europe, North America, Brazil, South Africa, India, Australia and China. The Group's operations are divided into three divisions - Truck & Trailer Equipment, Mobile Thermal Solutions and Ringfeder Power Transmission - with products that are marketed under strong, well-known brands. VBG Group AB's Series B share was introduced on the stock exchange in 1987 and is listed today on the Nasdaq Stockholm Mid Cap list.
This information is information that VBG Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-02-19 14:00 CET.
