Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you comment on how you're planning around potential tariffs in the US and any prebuy activities? A: We produce as much as we can locally, with over 70% of US sales produced in the US. If tariffs are imposed, we plan to compensate through price increases. We are prepared to adjust pricing as needed, especially if tariffs on imports from Mexico or China are implemented.
Q: What is your outlook for the US residential market given the current interest rate environment? A: We are less optimistic about the residential market recovery due to slower-than-expected interest rate reductions. However, we believe there is still a need for new housing investments, and easier comparisons with last year should help. We expect a recovery, but the timing is uncertain.
Q: Do you see an inflection point for organic growth in 2025, and what are the potential drivers? A: We aim to achieve positive organic volume growth by focusing on commercial segments and logistics, which we believe have bottomed out. The residential market remains uncertain, but easier comparisons and interest rate cuts in some regions, like Sweden, should aid recovery.
Q: How do you expect pricing to develop in 2025, excluding tariffs? A: We anticipate pricing to be higher than pre-COVID levels but lower than last year's 2% increase. We expect a price component between 1% and 2%, with 1.5% as a reasonable target, depending on tariff impacts.
Q: What has driven the acceleration in acquired growth over the last few years? A: Our active acquisition strategy, with a focus on identifying and engaging potential targets, has been key. We have a pipeline of over 900 potential acquisitions and maintain ongoing discussions with many of them, leading to increased acquisition activity.
Q: How are you setting up the business for 2025, considering growth uncertainties? A: We aim to return to positive organic volume growth by investing in new product development and acquisitions. Acquisitions are expected to contribute around 3% to growth this year, with more deals anticipated.
Q: What is your target for return on capital employed, given the drop in 2024? A: While we don't set a specific target, we aim for continuous improvement. The drop was mainly due to the HHI acquisition, but we saw a 20 basis point improvement from Q3 to Q4 and expect further positive evolution.
Q: Can you provide insights into the Entrance Systems margin and its sustainability? A: We are pleased with the margin development and aim to maintain it above 16%. However, SKIDATA's seasonal dilution and a shift back to equipment sales, which have lower margins than services, may impact margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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