2.4 Key markets

Healthcare

Our Healthcare business unit develops and markets SaaS solutions and care technology products that support healthcare institutions in the Netherlands in planning, registering and administering care processes. With our solutions, we work toward a healthcare system that is accessible, affordable and sustainable.

Market developments

The Dutch healthcare market remains under pressure as a result of the aging population and labor shortage, with more people who need care and fewer people to provide that care. This trend is visible across the entire healthcare sector. There is a growing recognition that the care system needs to change in order to address these challenges. This change involves creating a more interconnected healthcare system, characterized by collaboration among care providers and with informal care givers (e.g., family members), and optimized workflows to make working in healthcare more meaningful and enjoyable. The systems currently in use are unable to meet the need for cross-organizational collaboration. 

Network care as a new operating model for delivering and coordinating healthcare is gaining traction and presents a fundamental market change. The transition to network care relies on seamless information exchange among care providers, enabling cross-organizational collaboration. General practitioners (GPs) play an important role by serving as gatekeepers and care coordinators. If successful, network care will contribute to a more sustainable healthcare system.

Highlights

Nedap has a leading position in elderly care, disabled care, mental healthcare and domestic help in the Netherlands. We continue to achieve consistent growth in our market position, as reflected in the increase in our revenue in 2024. This is driven by high customer retention, the addition of new customers and the expansion of our service offering to existing customers. The Ons® Suite in particular continues to be a growth engine for the Healthcare business unit.

We are investing in the integration of AI into our solutions due to its potential to significantly reduce the administrative workload of healthcare professionals, allowing them to spend more time on work they find meaningful. In 2024, we incorporated speech-to-text technology into the Ons® Suite. 

The integration of MediKIT was an important milestone. MediKIT supports our ambition to establish a leading position in the GP sector. The expansion of our portfolio with solutions for the GP sector also helps us to better facilitate the transition to network care. In 2024, we made significant investments to enhance the scalability of MediKIT and expand its functionality. The information system is gaining traction, and the scaling of the solution will be a focus in 2025.

We scaled up Nedap Luna in 2024. Luna is an electronic day calendar for people with cognitive disabilities such as dementia. It helps people to effectively manage activities of daily life by presenting the information they need, when they need it. The solution has been proven to contribute to greater independence and reduce pressure on the (informal) care system. As of 2024, Nedap Luna is covered by most health insurance providers.

Organization

In 2024, we held conversations with customers and sector organizations to develop a strategic roadmap that reflects both our innovative product vision and evolving market needs. This process resulted in our first integrated development roadmap for the healthcare market as a whole. The roadmap reflects our ambition to provide solutions that facilitate the transition to an integrated healthcare system, in which providers work together to coordinate care. It also provides the long-term perspective the sector needs to advance this transition and helps clarify expectations on all sides, supporting alignment throughout the process

Outlook

We expect to strengthen our position in each of our sectors, supported by the success of our Ons® Suite and the scaling of Nedap Luna and MediKIT. In addition, we expect to make further progress in the integration of AI into our solutions. We will continue to invest in new capabilities for the healthcare market in collaboration with integration partners, while navigating the complex and still evolving regulatory landscape. Our revenue outlook is positive, and we have set ambitious growth objectives to continue our upward trend. 

Livestock

Nedap's Livestock business unit develops and markets sensor-based cow monitoring and management solutions that improve life on the farm. Through our network of global and local business partners, we reach and service dairy farmers globally.

Market developments

The dairy industry faced considerable headwinds in 2024. Dairy farmers worldwide were confronted with high feed costs, low milk prices and higher borrowing costs. These conditions had a negative impact on the investment appetite, resulting in lower demand. The recovery of the livestock market in the second half of the year as projected by Nedap, our business partners, knowledge institutions and major banks, materialized later than expected. The Chinese market faced the greatest challenges, as a slow economy dampened demand for higher-priced foods, including dairy products. Higher forecasted milk prices and reduced costs, partly due to lower interest rates and feed expenses, are expected to positively impact investment willingness and lead to higher demand. In the second half of 2024, we started to see the first signs of the market improving. 

Demographic and macro-economic trends point toward the long-term growth of the global demand for dairy. Milk demand is expected to increase by 50% by 2050, and the number of cows on professional farms is projected to double. The dairy industry faces the challenge of increasing milk production amid external pressures, including labor shortages and sustainability concerns. In recent years, the industry has come under increased scrutiny for its impact on the environment and cow welfare. As a result, farmers are looking for solutions to improve cow productivity, optimize cow welfare and lower their carbon footprint. Technology plays a vital role in solving this challenge. The exponential growth of herd sizes globally adds to the urgency of adopting technology to monitor and address the needs of each cow and improve herd well-being and performance.

Highlights

Revenue within Livestock was down in 2024 compared to 2023. This was driven by the clearing of our delivery backlog, a slowdown in demand and destocking by our business partners. At the same time, we saw the growth of our Nedap Now platform, with more customers subscribing to our cloud-based solutions.

Our investments in the Nedap Now cloud platform are strengthening our market position by providing a scalable solution for multi-site dairy operations. Our business partners and their customers—the end-users of our solutions—have provided positive feedback on the quality of our solutions. The level of service that we are able to provide through the platform, including detailed reporting and extensive integration options, is improving our competitive position. Consistent with our strategic plan, we have leveraged the platform to accelerate the introduction of new features, such as Heat stress and Fertility insights.

The platform also enables new business models, including SmartTag-as-a-Service. The introduction of this new flexible pricing model has resulted in a larger serviceable market, especially in North America. In addition, we expanded our range with the SmartTag Ear in order to reach farmers who prefer the use of ear tags over neck tags.

We continued the integration of AI into Nedap Now. In 2024, we conducted a technical and commercial validation of our first computer vision solution for cow health and welfare monitoring, named Locomotion. Locomotion uses video to detect lameness in cows, enabling farmers to respond early and adequately. We aim to launch Locomotion in 2025. When combined with SmartTag and integrated into Nedap CowControl, Locomotion will further improve farmers' ability to manage individual cow health.

Due to our extensive technology suite, we are well positioned to address the demand for comprehensive farm and cow management systems, particularly in areas with large-scale dairy farms such as China, the Middle East and the United States. Throughout the year, we continued to work toward an end-to-end solution for this target group, which encompasses the SmartTag for cow monitoring and identification, the SmartFlow milk meter to measure milk yield and improve udder health, the Nedap Now platform for data-driven, actionable insights and multi-site management, and the SmartSort gate to automatically sort cows that require treatment or attention.

The rollout of the SmartFlow milk meter continued in 2024. The solution has proven to add value to farmers by streamlining the milking process and contributing to udder health and cow comfort.

Organization

In recent years, we have sharpened the focus of our livestock activities. We made a strategic decision to establish a dedicated Expansion Team focused on future growth opportunities, and a Dairy Organization focused on the ongoing development and scaling of our existing solutions. The Expansion Team’s scope covers technology, business models and adjacent markets, including our expansion into Vision.

Within the Dairy Organization, we have created focus by defining seven key countries—Brazil, China, France, Germany, Ireland, New Zealand and the United States—and by differentiating between three end-user categories: grazing, family and XL. We are actively engaging farmers in these countries and categories to gain a more comprehensive understanding of their needs. As part of this effort, the business unit continued its discovery tour in 2024, visiting diverse farms in these countries. In addition, we invested in local teams and announced the opening of a Nedap subsidiary in New Zealand. The boots-on-the-ground approach enables us to adapt and respond to evolving customer needs, as well as strengthen our business partner relationships.

To further support our business partners, we made significant improvements to our partner portal. Additionally, we continued to train and support our partners through the Nedap Academy. This combination of local support and (online) resources enhances the capabilities and confidence of our business partners, enabling us to better reach and service farmers.

In the Netherlands, Nedap invested in the further automation of its Nedap Smart facility in Groenlo. The new SmartTags production line is expected to be operational in 2025 and will enhance our production capacity and speed. The Nedap Smart team and Livestock business unit also worked closely together to better align supply with demand. As a result of these efforts, we maintained control of our inventory, even when market conditions fell short of our forecasts.

Outlook

As a global market leader, Nedap is well positioned to capitalize on the long-term growth potential of the livestock market. We have created a portfolio that meets the current and evolving needs of farmers and integrates with the portfolios of our business partners. In the year ahead, we will focus on scaling our Livestock activities, with an emphasis on aligning our research and development and commercial approach with the opportunities in each of our focus countries and end-user categories. With the operationalization of our new, high-capacity SmartTag production line in 2025, we are prepared to meet a rapid rise in demand. While the recovery timeline for the livestock market remains uncertain, we are optimistic about a return to growth in 2025.

Retail

Nedap's Retail business unit serves retailers globally with innovative inventory management solutions. With Digital Twin Technology, Nedap addresses retailer challenges and needs such as gaining item-level visibility into the supply chain, optimizing inventory levels, delivering omnichannel retail experiences and minimizing losses.

Market developments

The global retail market experienced a slow start in 2024, driven by concerns over a potential recession toward the end of 2023. High interest rates further contributed to lower investment appetite. In the second half of the year, the European market displayed noticeable recovery, while North American retailers remained cautious.

We saw the continuation of long-term trends, including the shift toward omnichannel retail experiences, the automation of in-store and supply chain processes, and the growing demand for supply chain transparency and traceability. Increasingly, retailers' success depends on their ability to successfully adopt omnichannel retail concepts that provide customers with a seamless online and in-store shopping experience. They rely on real-time insights into inventory levels to accommodate shopper preferences, such as 'buy online, ship to store' and 'buy online, pick up in store'.

Retailers also increasingly opt for automation to address staffing shortages, reduce cost, or both. This includes the adoption of self-checkout registers. Finally, sustainability is becoming more important to retailers, driven by both their own commitment to corporate responsibility and the introduction of new laws and regulations mandating environmentally and socially responsible supply chain practices. The reduction of waste as a result of surplus inventory is a key priority.

Highlights

Overall revenue in Retail increased compared to 2023. We extended several enterprise contracts with leading retailers in 2024, demonstrating our clients' continued satisfaction with our solutions. We also continue to reap the benefits of our investments in the iD Cloud platform, with clients increasingly expanding from a single software subscription to multiple software subscriptions. This resulted in higher annual recurring revenue for iD Cloud compared to 2023. Demand for our traditional RF systems for loss prevention was down, as retailers postponed investment decisions due to concerns over a recession at the start of the year, as well as higher interest rates. 

Throughout the year, we continued to invest in our solutions to meet evolving customer needs. We expanded the iD Cloud platform with the launch of iD Cloud Supply Chain. This new solution provides retailers with item-level visibility into their supply chain, with near real-time insights into the status of products as they travel through the supply chain. Together with iD Cloud Store, which focuses on store inventory management, iD Cloud Supply Chain supports the implementation of omnichannel retail experiences. In 2024, we onboarded the first customers onto iD Cloud Supply Chain, and the solution is gaining traction. 

In addition, we expanded our Connected Hardware Pro line with the iD POS Pro and the iD POS SCO Pro point-of-sales and self-checkout RFID solutions. These new solutions work with our RFID electronic article surveillance (RFID EAS) solutions to provide customers with seamless shopping experiences, while minimizing inventory loss (e.g., theft). Finally, we continue to make targeted investments in our RF technology that enable our customers to make optimal use of their RF systems for years to come.

Organization

The formation of dedicated teams for our Sense solutions (formerly Connected Devices) and iD Cloud solutions in 2023 has enabled our business unit to maintain an equal focus on both portfolios, each supported by a clear strategy and a defined plan for investments in research and development and commercial focus. At the same time, the teams work together to strengthen Nedap's market position in the retail market. In 2024, there were numerous examples of synergy between the teams and portfolios. Clients who have used our Nedap hardware solutions, such as our RFID EAS systems, are adding our iD Cloud platform solutions, and vice versa. This is particularly true for loss prevention, where hardware and software are working together to enable a data-driven approach to minimizing theft.

We continue to invest in our new business and customer teams in Europe and North America. These teams are instrumental in onboarding new customers to our iD Cloud platform and increasing customer lifetime value.

Outlook

We are well-positioned for growth, thanks to our investments in our solutions and in our teams in Europe and the United States. We anticipate the ongoing transition from RF to RFID systems to continue at a steady pace in the coming years. In addition, we expect more retailers to transition to omnichannel retail experiences in order to remain competitive. Based on market trends and our order intake, we foresee growth in our iD Cloud solutions and steady growth in our Sense solutions.

Security

Nedap's Security business unit develops access management solutions used by top brands to secure people, buildings and assets. Nedap holds a leading market position in Europe and the Middle East. The integration of the Nedap Reader portfolio into the business unit further strengthens Nedap's position in the security market.

Market developments

The access management market is characterized by relative stability, given the essential role that security plays in companies' operations. In parts of the Middle East, investments in large-scale infrastructure projects resulted in a growing demand for access management systems. Geopolitical tensions elsewhere in the region, however, had a noticeable negative impact on the market.

While the demand for access management systems is stable, customer needs are evolving. The transition from traditional on-premises systems to cloud-native systems is beginning to gain momentum. This reflects a broader trend of companies adopting SaaS solutions to be able to focus on their core business. It also signals growing confidence in the security of cloud systems. In addition, companies need to prove compliance with cybersecurity directives, such as the Network and Information Security directive (NIS2).

There is also a growing emphasis on convenience. The use of mobile devices as an alternative to physical credentials, for example, is gaining traction as companies look to improve the employee experience.

Highlights

We maintained our strong position in the security market. The combination of our on-premises access control system AEOS and native-cloud solution Access AtWork allows us to meet the needs of customers seeking the ultimate flexibility of AEOS, as well as those seeking to move their in-house infrastructure to the cloud to reduce their internal IT burden.

In 2024, revenue was lower than in 2023. This was due to a normalization of demand and a higher comparable base in 2023, during which previously accumulated delivery backlogs were cleared. Our business partners' installation capacity also normalized. The expansion of our service offering with Pace, along with the adoption of AEOS Upgrade Assurance, contributed to an increase in recurring revenue in 2024.

Pace was gaining traction in 2024, and we are scaling our organization in order to meet demand. Pace is built on Digital Twin Technology and helps large organizations streamline the management of access rights and cards for employees, visitors and contractors, enabling them to manage risks, prove compliance and optimize their operations. The physical identity and access management (PIAM) market offers untapped potential for organic growth.

We officially launched Mobile Access in August 2024 in partnership with Apple, integrating mobile credentials directly into the Apple Wallet. Mobile Access is the first of its kind in Europe. Conversations with existing Nedap customers demonstrate significant interest in our solution. We will continue to invest in Mobile Access, including its integration with our full access management portfolio.

Organization

By the end of 2024, our new business unit structure was fully implemented, with teams better aligned with market opportunities. The project was initiated in 2023 and, consistent with our Step Up! process, emphasizes the importance of a clear direction, commitment to a common goal and knowledge-sharing. In the new structure, the development, channel and market solutions teams maintained their distinct roles, while working closely together to seize new opportunities. As a result, the business unit is more agile and better equipped to both identify and respond to market changes and evolving customer needs. The rapid development and roll-out of Mobile Access is a direct result of our new way of working and demonstrates our business unit's ability to quickly respond to emerging opportunities.

Outlook

In the year ahead, we will remain focused on developing a comprehensive access management suite offered in the cloud, on-premises and in hybrid form. We expect revenue growth in 2025, primarily driven by the consistent demand for our access control solutions and the expansion of our service offering to existing customers. In addition, we expect our ongoing investments in our PIAM solution Pace, both in terms of development and commercial capacity, to contribute to our growth in 2025. Finally, we expect demand for Mobile Access to accelerate, further strengthening our market position and competitive edge and increasing the share of recurring revenue.