TKH Group (TWEKA) CMD 2025 summary

Strategic focus and business transformation

• Accelerating transition to a leading Automation company, with automation as the core future direction and proprietary technologies accounting for 60% of turnover; Electrification to be separated within 12–18 months, with legal structuring underway and potential IPO or sale options considered.

• Historical transformation from a diversified group to a focused technology-driven business, with significant divestments of non-core and commoditized activities totaling around EUR 450–460 million over the past six years.

• New segmentation: Automation (Vision, Automated Machinery) and Electrification, with non-core and digitalization activities earmarked for divestment (EUR 250 million by 2028).

• Automation positioned as the primary long-term value driver, emphasizing asset-light, globally scalable solutions and leveraging AI and proprietary software.

• Electrification’s standalone prospects are strong, focusing on high and medium voltage cables, offshore wind, and international expansion, with a capital-intensive profile and regional growth targets.

Financial guidance and capital allocation

• Automation targets: 5%-7% organic CAGR to 2028, EBITDA/EBITA margin of 17%-19%, and return on capital employed of 25%-30%.

• Electrification targets: above 7% organic CAGR, 12%-15% EBITDA/EBITA margin, and 18%-23% return on capital employed by 2028.

• Dividend payout ratio set at 40%-70% of normalized net profit, with a target yield of 3%; share buybacks subject to leverage below 2.0.

• No major CapEx programs planned; CapEx to be reduced and aligned with depreciation and amortization, with R&D CapEx expected to decrease by 30% over three years.

• Working capital targeted at 12%-15% of revenue, with normalization expected as divestments are completed.

Business segment outlooks and growth drivers

• Automation leverages global trends such as labor shortages and productivity demands, with leading positions in vision technologies and advanced manufacturing.

• UNIXX technology revolutionizes tire building, expanding the addressable market and enabling higher flexibility, quality, and pricing, with significant revenue impact expected post-2028.

• Machine Vision segment consolidates brands, enhances R&D efficiency, and expands into new horizontals like smart cameras and 3D vision-guided robotics.

• Electrification benefits from strong market tailwinds: EU renewable targets, grid expansion, and offshore wind growth, with unique sustainable cable designs and high win rates in tenders.

• Digitalization/fiber optic divestment ongoing, with proceeds to support automation strategy.