2.6 Financial affairs

Key figures

• 1Defined as operating profit expressed as a percentage of revenue.
• 2ROIC represents operating profit divided by the invested capital (fixed assets + net working capital).

Revenue

Revenue for 2024 amounted to €251.6 million, which was 4% lower than in 2023 (€262.4 million). Excluding the impact of the strategic decision to scale down certain solutions, which represented an amount of €11.8 million in 2024 (€17.1 million in 2023), total revenue was down 2%. The key markets Healthcare and Retail showed revenue growth. This growth was offset by lower revenue in both Livestock and Security, leading to a decline in total revenue. In Livestock, slow market conditions and a strong comparable base in early 2023, when delivery backlogs were being cleared, contributed to the decrease. In Security, revenue declined compared to the relatively high benchmark set in 2023. Despite an improvement in revenue in the second half year, the overall impact of these declines resulted in a reduction of total revenue for the whole year.
Recurring revenue rose by 19% to €100.2 million (€84.1 million in 2023), comprising 40% of revenue (32% in 2023). This growth in recurring revenue was primarily driven by an increase in newly contracted customers, as well as a higher average value per existing customer.

Due to the lower revenue, added value was down from €181.0 million in 2023 to €179.9 million in 2024. As a percentage of revenue, added value increased to 71.5% (2023: 69.0%), largely due to a higher share of recurring revenue in relation to total revenue. The margin on product deliveries remained on a similar level as in 2023. Higher sales prices in most key markets were offset by a negative product mix effect, partly due to products sold at lower margins in solutions that are being scaled down. Our added value per FTE decreased from €197,000 (see footnote Key facts & figures) in 2023 to €181,000 in 2024.

Operating costs

Total operating costs grew by 2%, from €153.7 million in 2023 to €156.0 million in 2024.

This was mainly driven by an increase in personnel costs from €112.1 million in 2023 to €114.8 million in 2024, due to a higher average number of employees. In line with our long-term strategy, targeted investments were made to strengthen scale solutions in key markets, though the pace has slowed down compared to previous years. The number of FTEs¹ increased from 977 at the end of 2023 to 999 at the end of 2024, solely driven by an increase in the first half of the year. In addition, overall salaries per FTE have gone up, mainly driven by an agreed indexation of 3.4% combined with an absolute amount of €300 per year per employee, effective 1 April 2024. The increase of personnel costs was levelled off by lower costs for temporary staff, driven by a targeted effort to reduce insourced staff and a relatively higher cost base in 2023. In addition, the costs arising from employee participation plans decreased due to a decrease in the operating result.

Other operating costs went down from €31.5 million in 2023 to €30.5 million in 2024. General and administrative expenses rose, partly due to the increase in the number of FTEs, as well as investments in IT infrastructure to support the growth of our recurring revenue. Marketing and sales costs were broadly in line with 2023. Other costs were down compared to 2023, with foreign exchange differences amounting to a gain of €0.1 million in 2024 compared to a loss of €0.6 million in 2023.

Depreciation increased from €9.7 million in 2023 to €9.9 million in 2024, driven by investments in servers and other IT infrastructure to support the growth of our recurring revenue. Amortization amounted to €0.6 million, an increase compared to 2023 (€0.4 million). An amount of €0.3 million (2023: nil) was recognized as an impairment of fixed assets related to solutions being scaled down.

Investments in research and development totalled €50.2 million, representing 20% of revenue, whereby €3.4 million was capitalized (€46.9 million in 2023, i.e., 18% of revenue, with €1.6 million capitalized). These costs mostly relate to further developing current products and services, while the remaining part is related to research and development for new products or services, in line with our long-term strategy. The majority of costs are related to supporting the growth of our recurring revenue.

Operating profit

Operating profit (EBIT) for 2024 came in at €23.9 million, compared with €27.3 million in 2023. The operating margin, i.e., the operating profit as a percentage of revenue, amounted to 9.5% in 2024 (10.4% in 2023). This decrease is a result of lower revenue, in combination with an increase in operating expenses, partly offset by a higher added value as a percentage of revenue.

In the second half of 2024, the operating margin reached 10.5% (H2 2023: 8.7%), driven by revenue being at about the same level as the second half-year of 2023, a higher added value as a percentage of revenue of 72.0% (H2 2023: 69.0%), and an increase in operating costs of 1.7%.

Financing costs

Net financing costs increased to €0.9 million in 2024 (€0.7 million in 2023), primarily due to increased market interest rates and the use of bank overdrafts throughout the year. These consist mainly of the financing costs on current accounts and the standby roll-over loan.

Taxation

Taxation over 2024 totalled €4.4 million (€5.0 million in 2023), while the effective tax rate remained at a similar level, coming in at 19.3% for 2024 (18.9% in 2023).

Profit for the financial year

The profit posted for the 2024 financial year came in at €18.5 million, compared to the €21.6 million posted in 2023.

Earnings per share and dividend

Earnings per share decreased from €3.31 in 2023 to €2.82 in 2024. The average number of outstanding shares in 2024 was 6,581,074 (6,546,636 in 2023). This increase is the result of the delivery of shares held by the company itself to cover employee participation plans.
A dividend of €3.20 will be paid for 2024 (€3.20 in 2023).

Financial position

The balance sheet total decreased from €139.9 million at 31 December 2023 to €137.4 million at 31 December 2024. Trade and other receivables increased due to higher revenue in the last quarter of 2024, while days sales outstanding decreased compared to 2023. Inventories decreased from €38.9 million in 2023 to €32.0 million in 2024. During the year, targeted actions were initiated to reduce inventories from the relatively high 2023 level, which were due to imbalances in the supply chain. Trade and other payables were down, from €31.3 million in 2023 to €30.5 million in 2024.

The net debt position amounted to €9.6 million at 31 December 2024, compared to €3.8 million at 31 December 2023. Cash and cash equivalents decreased from €10.2 million at 31 December 2023 to €4.4 million at 31 December 2024, largely driven by the lower net result and the dividend payment during the financial year. Net debt-to-EBITDA stood at 0.3 on 31 December 2024 (0.1 on 31 December 2023). Solvency stood at 61% on 31 December 2024 (61% in 2023).

An amount of €14.0 million has been drawn on the credit facilities totalling €39.0 million available on 31 December 2024.

Cash flow

Net working capital in the financial year amounted to €35.0 million, which was at the same level as in 2023 (€35.0 million). The increase in trade and other receivables, driven by higher revenue in the last quarter, was offset by lower inventory levels. Operating cash flow from continued operations amounted to €28.9 million in 2024, remaining at the same level as in 2023 (€28.9 million).

Return on invested capital

The return on invested capital (ROIC) decreased to 26% in 2024 (2023: 31%), mainly driven by lower operating profit.