Nilfisk: Navigating Growth and Challenges in 2024

Nilfisk Holding AS (FRA:NF1) has reported its Q4 and full-year 2024 results, showcasing a mix of growth and challenges that the company has successfully navigated. The company's CEO, Jon Sintorn, commented on the results, highlighting the key drivers behind the positive performance and the strategic focus for 2025.

Key Takeaways from Nilfisk's Q4 and FY2024 Results:
1. Revenue and Organic Growth: Nilfisk's revenue for the full year 2024 amounted to 1,027.9 mEUR, corresponding to reported growth of -0.6% compared to 2023. Organic growth was 1.2%, driven by positive organic growth in the Service, Consumer, and Specialty Businesses, partially offset by negative organic growth of 0.9% in the Professional Business.
2. Gross Margin Expansion: The gross margin increased to 42.2% in 2024, 1.3 percentage points higher than in 2023 and the highest level since 2017. This expansion was driven by efficiency measures across factories, a favorable product mix, and diligent price and discount management.
3. EBITDA Margin Improvement: As a result of strong gross margin management, EBITDA before special items increased to 135.8 mEUR, equal to a margin of 13.2%. This was a 0.4 percentage point or 3.4 mEUR increase compared to 2023.
4. Financial Outlook for 2025: Nilfisk expects organic growth to be between 1% and 3% and the EBITDA margin before special items to be in the range of 13.0% and 14.0% in 2025. This is expected to be driven by continued positive momentum in EMEA, supported by the launch of new products in the second half of 2024. A normalized order book in the Americas is expected to influence the Professional and Service Businesses, while the outlook for Consumer and Specialty remains strong.

Drivers Behind Nilfisk's Performance:
1. Efficiency Measures and Product Mix: Nilfisk's efficiency measures across factories, favorable product mix, and diligent price and discount management contributed to the gross margin expansion. These factors allowed the company to reduce costs and increase profitability.
2. Strong Consumer Business: The Consumer Business experienced strong demand, with organic growth of 18.1% in the second quarter of 2024. This growth was attributed to seasonally-related high demand for high pressure washers, Nilfisk's growing market share in Western Europe for high pressure washers and vacuum cleaners, and product innovation, such as the new cordless vacuum cleaner Nilfisk S1.
3. Improved Service Business: The Service Business continued to grow, driven by the solid performance in EMEA and increased attachment rates. This growth contributed to the overall improvement in EBITDA before special items.
4. Optimization of Production and Distribution Footprint: Nilfisk plans to optimize its production and distribution footprint, which is expected to improve supply chain management, reduce logistics costs, and enhance the company's ability to respond to changing market demands and customer needs.

In conclusion, Nilfisk's Q4 and FY2024 results demonstrate the company's ability to drive organic growth and margin expansion, leading to an improvement in EBITDA before special items. The company's efficiency measures, strong Consumer Business, and improved Service Business, combined with its plans to optimize the production and distribution footprint, position Nilfisk well for future growth and success.