Boreo (BOREO) Q4 2024 earnings summary

Executive summary

• 2024 was a challenging year with a 17% sales decline to EUR 134 million and operational EBIT down 28% to EUR 6.8 million, as cost control, balance sheet management, and selective organic investments were prioritized over acquisitions.

• Profitability was defended through pricing actions, gross margin improvements from 28% to 30%, and significant fixed cost reductions of about EUR 2 million.

• Strong operative cash flow of EUR 12 million for 2024, with cash conversion at 180% and a EUR 4.7 million reduction in working capital.

• No acquisitions were completed in 2024; focus remained on organic growth and financial stability.

• No dividend proposed for 2024 as the focus shifts to strengthening the financial position and supporting growth strategy.

Financial highlights

• Revenues declined 17% year-over-year, mainly due to weakness in construction-related and industrial businesses, with sales down EUR 27 million versus 2023.

• Operational EBIT margin decreased to 5.1% from 5.9% in 2023; ROCE fell to 7.9% from 11.0%.

• Q4 2024 net sales grew 6% year-over-year to EUR 39.2 million, with EBIT at EUR 2.1 million, matching Q4 2023.

• Gross margin improved to 30%; fixed costs reduced by EUR 2 million.

• Equity ratio improved to 39.2%; net debt reduced to EUR 30 million.

Outlook and guidance

• Management expects 2025 to be better than 2024, supported by improved cost competitiveness and stronger order books, though Q1 earnings are expected to be modest due to seasonality.

• Order books entering 2025 are significantly higher than the previous year, with some large orders postponed to H1 2025.

• Fixed costs are expected to increase in 2025 due to growth investments and inflation, but not to 2023 levels.

• Long-term targets remain: minimum 15% average annual operational EBIT growth, 15% ROCE, and net debt to operational EBITDA between 2 and 3.

• No businesses are expected to see further demand declines; modest growth anticipated across the portfolio.