2024-03-05 14:09:15 ET
TKH Group N.V. (TKHGF)
Q4 2023 Earnings Conference Call
March 05, 2024 04:00 am ET
Company Participants
Alexander van der Lof - Chief Executive Officer
Elling de Lange - Chief Financial Officer
Harm Voortman - Member of Management Board
Conference Call Participants
Martijn Den Drijver - ABN Amro
Michael Roeg - Degroof Petercam
Chase Coughlan - Kempen
Maarten Verbeek - The IDEA
Ruben Devos - Kepler Cheuvreux
Presentation
Alexander van der Lof
Good morning, everyone. Warm welcome here in Amsterdam and also a warm welcome to all of you in the webcast. Today, we have our presentation of the Annual Results and the quarter, the Q4 result. Before we go into that, we'll of course have our cautionary note regarding the forward-looking statements. I hope you take good notice of that and then we can continue with the next slide, the key messages.
Of course, we are happy that we were able to meet our forecast with the result of €237 million EBITDA, a little bit higher than that we forecasted in November and that's especially due to a very good performance of the Smart Manufacturing segment and especially the tire building activities. We saw of course as we also indicated a continued destocking effect in Smart Vision and Smart Connectivity. And what was also very good to reflect on is the added value, which substantially increased during the year. It was about 2.6% points, and I believe that is really a good confirmation of the strong strategic position of TKH, and we are building further on that strong position of course.
Yes, return on sales, an important strategic KPI for TKH to develop the company towards the 17% and of course, we are happy to see in the Q4 the 14.3% return on sales. Of course, ESG very important. We made good progress and we are also happy that at least 70% of our turnover is related to the sustainable development goals. We made very good progress with the €200 million strategic investment program. We already started the first power core production in our plant in Eemshaven, which is really according to plan.
We have guided last year that we would start the serial manufacturing in Q2 a little bit earlier than previously guided for and we are really well organized for that plan. And we also have orders there that we need to manufacture in the Eemshaven related to the lengths of cable that we have to manufacture in respect of the existing order book. Also very good news, the development in Poland with the new plants that we built there.
Exciting to see what's going on with the tire building activities there, the huge expansion that we organized and already implementing an additional expansion that will come in in the first half of this year. We need that capacity. We rented also a lot of buildings, but it is better to have our own sites, and so we are also well positioned there for further growth in the coming years.
And last but not least, the new fiber optic plant is starting to run smoothly and that is also the case for the specialty cable plant that we created in Poland. Yes, many additional hires there, around 200 for the ramp up and rollout of the capacity that had of course an effect in the Connectivity segment in relation of the additional costs. We are quite confident about the utilization in the coming one or two years of the plants, and that yes, we really need the additional hires that are now working for TKH. And then of course, the strategic positioning, very, very important to build on further. It is really exciting to work for TKH if we see how customers love what we present in the market.
The combination of hardware and software, really, really important and AI coming in here and very good that we have a hub here in Amsterdam with talented young people that drive our AI development. We will present at the Tire Show in a few weeks from now, an amazing AI system in our tire building equipment. I cannot launch it now, Harm, I believe, but you will do that in a few weeks. But it's exciting for also creating and developing our scope of supply in the tire building systems as we do that also in the machine vision area, where the one-stop-shop is really helping us to be the technology partner, for major customers to yes give them access to all the vision technology, including the software propositions that we can offer to deliver plug and play systems.
And that's really a trend that is important to play on and is also a big driver for organic growth in that segment. We're also very happy to announce that we had a continuing very high order intake in the tire building systems within Smart Manufacturing and that in the first quarter of this year, in the first months of this year, we got a nice order for a UNNIX system. And well, it's also very important that, there's a very high interest for additional orders coming in in the, I would say the coming year....
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TKH Group N.V. (TKHGF) Q4 2023 Earnings Call Transcript