Nedap (NEDAP) CMD 2024 summary

Strategic transformation and focus

• Shifted from 11 market groups to four key markets: healthcare, livestock, retail, and security, each with a leading position and balanced growth potential.

• Strategy emphasizes agility and continuous adaptation, moving from fixed long-term plans to ongoing calibration in response to volatile markets and competition.

• Growth driven by 'Create & Scale' methodology, focusing on organic growth, innovation, and leveraging company-wide expertise.

• Digital twin technology is the core differentiator, enabling actionable insights and automation across all markets.

• Transformation from hardware sales to a recurring revenue SaaS model, with all market groups now contributing to subscription-based revenue.

Market leadership and business developments

• Achieved leading positions in all four key markets, with strong customer bases including major global brands and institutions.

• Healthcare: Ons Suite leads in elderly and disability care, 60% market share in elderly care, 50% in disability care, and 20% in mental healthcare in the Netherlands; focus on network care and platform expansion.

• Retail: Nedap iD Cloud is the leading SaaS RFID platform, with 35% market share and partnerships with top retailers; RFID adoption expected to double in five years.

• Livestock: 40% global market share in cow monitoring, 30,000 farms and 5.5 million cows connected; growth driven by rising milk demand, farm consolidation, and technology adoption.

• Security: Serving 36% of top 250 EU organizations, strong position in access control, serving 2,500+ organizations in 83+ countries; expanding SaaS and cloud-based solutions.

Financial performance and guidance

• Organic revenue growth of 8% CAGR and EPS growth of 11% CAGR from 2019 to 2023.

• Recurring revenue reached €100 million in 2024, growing at 17% CAGR since 2019 and 20% YoY in 2024; recurring revenue now offsets volatility in non-recurring revenue.

• Gross margin increased from 63% in 2019 to 69% in 2023, supporting high R&D investment (18% of revenue in 2023).

• Mid-term guidance targets high single-digit organic revenue growth, operating margin toward mid-teens (15% by 2026), and ROIC above 30%.

• Capital allocation prioritizes organic growth, high payout ratio, selective M&A for key markets, and minimum solvency rate of 50%.