engcon’s journey of globalisation reached an important milestone in 2024 as Europe surpassed the Nordic region in both order intake and sales for the first time. Despite a weak economy and declining excavator sales, penetration is increasing in Europe, which has been the engine of our growth throughout the year. The year concluded with a strong order intake in all regions, which is a positive sign for the future. Earnings were also stable for the full-year, despite lower volumes.
Strong end to the year
We can sum up 2024 with net sales of SEK 1,649 million (1,898), operating profit of SEK 295 million (376) and an operating margin of 18 per cent (20), for which the strong gross margin of 44 per cent (42) compensated somewhat for the drop in sales. The strong order intake in the fourth quarter provided a promising contribution to the order book and a favourable start ahead of 2025.
Europe – the engine of growth
Demand in the Nordic region in 2024 was stifled by high interest rates and a cautious construction sector, resulting in a 23 per cent decline in net sales. However, by the end of year we were seeing increasingly optimistic market signs that, coupled with pre-orders at the end of 2024, led to a significant increase in the fourth quarter order intake and a 9 per cent increase for the full year.
In Europe, order intake increased 26 per cent despite a fall in excavator sales. This indicates an increasing market penetration and that our message about the efficiency benefits of tiltrotators is being heard. During the year, markets in the region grew and collectively contributed to strong growth, with development in the DACH region being a particular highlight. Europe is now our largest region and we have established a strong income base there in addition to the more cyclical Nordic region.
Our operations in the Americas faced challenges in 2024, resulting in lower net sales and a decline in the order intake. High interest rates and the unpredictability surrounding the US presidential election yielded uncertainty, which also coincided with internal challenges. To address this, we implemented changes to the management structure and strengthened our organisation with additional sales resources. The fourth quarter demonstrated growth, but it is too early to conclude whether the trend has reversed. Nevertheless, I am convinced that we are now taking important steps in the right direction and my confidence in the US market remains strong.
In Asia-Oceania, net sales declined from low levels, while the order intake increased 22 per cent, driven mainly by a strong trend among OEMs and end customers in South Korea. At the end of 2024, we set up our own sales company in Japan to further strengthen our position in the region. Japan is a large market with enormous potential as a result of a labour shortage and need for increased efficiency in the construction and civil engineering industry.
Innovation and development
In 2025, we will celebrate 35 years as a company. Our 35-year journey has been filled with exciting development projects, always with the interests of the end customer in mind. Innovation is key to our success and we always strive to be at the absolute forefront of our industry. In 2024, we invested 4.4 per cent of our sales in research and development (R&D). In the first quarter, we applied for a self-learning configuration system, which will simplify installation and optimise the configuration between the tiltrotator and the excavator. For the operator, this provides an optimal experience while saving energy and increasing precision.
The first model (EC319) of our third generation tiltrotator is now on sale and we are gradually offering more models of our most advanced system to date. The third generation will significantly reduce energy consumption compared with its second generation predecessors. This confirms how our smart technology reduces energy consumption and is even adapted for future electrified excavators.
Further launches
In addition to the launch of the third generation tiltrotator, we launched a new model, the EC02 Basic, in 2024, which offers the same high quality as our larger and more advanced models but in a slimmed-down format that is perfect for smaller machines and simpler excavation jobs. A larger version, the EC204 Basic, will be launched in 2025.
In 2024, we also launched improved machine couplers without hoses, reducing the risk of leaks. More sizes of these couplers are set to be launched in 2025. Another model launched during the year was the EC204, featuring our fully hydraulic quick coupler system EC-Oil both above and below the tiltrotator, which is unique for smaller machines and gives us a major competitive advantages in the market.
End customer in our DNA
engcon has always focused on building close relationships with the people who use our products and being responsive to their needs. Our smart solutions foster efficiency and increase profitability at the same time as we take responsibility for a sustainable future. During the year, we met with our end customers at exhibitions and demo days around the world. At the year’s biggest exhibition, INTERMAT, in Paris, we saw record interest with more visitors to our stand than ever before.
“People can only fully comprehend how the tiltrotator can increase productivity and profitability by seeing, feeling and experiencing the products.”
We are planning to intensify efforts in 2025 to reach an interact with end customers on their home turf. In addition to participating at BAUMA in Germany and CSPI in Japan, we are set to arrange various events in the Nordic region where we will be offering test runs of our third generation tiltrotator. In Europe, we plan to hold “engcon Dig Days”, an extensive tour that will provide opportunities to try our products in practice. Personal meetings with end customers are essential. People can only fully comprehend how the tiltrotator can increase productivity and profitability by seeing, feeling and experiencing the products.
Sustainability as a driving force
We have excellent potential to contribute to sustainable digging. Our products make a significant difference when it comes to energy savings and a reduced carbon footprint. We have a strong sustainability profile and I was honoured to accept the Carnegie Sustainability Award in the category of Best Newcomer in October. The award recognises the tiltrotator’s energy savings, its ability to replace other machines and that our products create a safer workplace.
We have also elected to join the UN Global Compact Initiative to take responsibility for sustainable, longterm business together with thousands of other companies around the world.
Long-term growth
In 2024, we continued to steadily navigate a changing world. We have bolstered our relationships with OEMs across the globe, allowing us to continue to develop technological solutions that strengthen our brand. We are continuing to invest in products and the business, and in 2025 we will expand our facility in Poland, doubling its capacity as a result. In our Swedish factory, we are planning for increased capacity and improved logistics. Thanks to our scalable business model, we are able to quickly adjust our production capacity to grow in a profitable and sustainable manner in the years ahead.
In 2025, we are taking the step up to Nasdaq Stockholm Large Cap, which is an important milestone and another seal of quality for the fantastic growth journey that we are on and that lies ahead of us. I would like to extend a sincere thanks to all my colleagues, customers and partners for your commitment and confidence. We are a catalyst for progress, shaping our industry and creating long-term value. Together, we are changing the world of digging.
Krister Blomgren, President and CEO
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