Hello, and welcome to the SPIE Full Year Results 2022 Call. My name is Laura, and I will be your C oordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Gauthier Louette, Chairman and CEO, and Jérôme Vanhove, the Group CFO, to begin today's conference. Thank you.
Good morning, ladies and gentlemen. Thank you for attending SPIE's Conference Call for 2022 Full Year Results. In 2022, we did deliver an excellent performance. For the first time, we cracked the EUR 8 billion revenue and EUR half a billion EBITDA marks. In the context of sharply rising energy costs and growing evidence of the climate crisis, we provide highly valuable services for industry decarbonation, e-mobility, building efficiency, or smart city. We are definitely part of the solution. Let us discuss some good examples to highlight our expertise. In Germany, we designed a new gas pressure regulator suitable for both natural gas and hydrogen. This project will allow a hydrogen share of up to 100% to be fed into the production process, steadily reducing the level of CO2 emissions, provided obviously that the hydrogen is green, which is the trend nowadays.
Our client is Deutsche Engineering Group, with whom we share a long-standing partnership for some 30 years. Hydrogen is increasingly seen as a key element on the road towards climate neutral industrial processes. On slide four, in Dubai, SPIE Oil and Gas Services is supporting TotalEnergies under a three-year maintenance contract for solar farms. We are in charge of preventive and curative maintenance with real-time performance monitoring, a preventive maintenance program, including the deployment of cleaning robots and intervention in case of failure or underperformance of the infrastructure. With such a project, SPIE Oil and Gas Services is continuing its diversification into renewable energies, tagging along its main customers. On slide five, in Poland, for the Lublin municipality, we install modernized street lighting. We are replacing more than 1,600 sodium luminaires with LEDs. We install photometric measurements to optimize the luminance and illuminance.
With this project, we target more than 600 MWh of saving per year, roughly 50% of saving compared to the previous situation. Slide six. Now in France, we'll install components in the 62 towers for the Saint-Brieuc offshore wind farms with a total capacity of close to 500 MW. It will be able to produce clean energy to cover, on a windy day, 9% of Brittany's total consumption. For SPIE, this project will involve the mechanical and electrical assembly of all of the internal parts provided for the towers of the wind turbine, and we also coordinate logistics on the folder. With this project, we are now present on all the offshore farms being developed in France. You will remember that last year we were present in Courseulles and Second.
Before moving to the key highlights of the year, I would like to thank our employees for their commitment. They are our main assets and also our first shareholders. Our last SHARE FOR YOU program, the sixth since our IPO in 2015, was a great success with 13 countries involved and 11,000 employees participating. At the end of 2022, nearly 15,000 employees are shareholders of SPIE, and altogether, employees at management hold 8.5% of the group. We are also very pleased to have two long-term shareholders, Bpifrance and at 5.6% and Peugeot Invest at 5.2%. Let's move on slide 9 to the key highlights of the year.
In 2022, we did deliver excellent performance, showing once again the relevance of, and the strength of our model, and once again, delivering on our guidance. We achieved a record level of organic growth, a continuing EBITDA margin improvement in an inflationary context, another year of strong cash generation, and a significant increase in our free cash flow, while our leverage ratio reached an all-time low. A sustained M&A activity with five bolt-on acquisition completed and with Worksphere being now fully integrated. Our sustainability KPIs evidence a strong dedication of all our teams to deliver on our commitments. Finally, we concluded the strategic review and successfully disposed of our U.K. operations.
Overall, 2022 demonstrated once again the agility of our model, our unique positioning, proven pricing power, and permanent focus on operational excellence. We enter 2023 with a record order backlog and very strong market fundamentals. I am in no doubt that the commitment and expertise of all our teams will bring further value to all our stakeholders. Looking at our key numbers on slide 10, I'm very pleased to report an excellent set of results and best-in-class cash generation. Organic revenue growth reached 6.9%. This is a record level for the group. Total revenue growth was at 16.1%, enabling the group to break through the EUR 8 billion revenue mark. Our EBITDA margin was at 6.3%, up 20 basis points. Our EBITDA is now above EUR 500 million at EUR 511 million.
EPS was up 23% with adjusted net income slightly above EUR 300 million. In 2023, we also had a sustained M&A activity. We acquired EUR 155 million of revenue through five bolts on acquisitions, plus EUR 400 million of revenue coming from the integration of Worksphere in the Netherlands. We generated EUR 315 million of free cash flow, and our leverage reached the all-time low level of 1.6x at the end of 2022. Thanks to our strong results and in line with our dividend policy, we will propose a dividend of EUR 0.73 per share at our next AGM, up 22% versus 2021. On Slide 11, let's have a look at our organic growth. We did show an acceleration throughout the year. 2022 started with many uncertainties worldwide.
We've been able to successfully navigate through the macroeconomic environment, and our organic growth has been accelerating quarter after quarter to reach 10.2% in Q4. For Q3 and Q4, the good momentum is driven by volume and the more significant prices effect, compounded with a low comparison basis, as these two quarters were still impacted by the last wave of COVID infection in 2021. Looking at EBITDA. At group level, EBITDA margin improved by 20 basis points to 6.3%, with progress in all key regions. It is interesting to note that France and Germany, the two major contributors to EBITDA, achieve also the best margin with a 6.5% level. Northwestern Europe recorded the best improvement of 80 basis points. Oil and Gas and Nuclear maintains that margin at a high level of 9.5%.
We are convinced that our margin will continue to increase in 2023. As evidenced by our results, our plan to tackle inflation did succeed. Let me go back on the key levers to protect and even increase our margin in an inflationary context. Regarding protection, we had efficient levels of action, such as indexation clauses in the contracts, shorter validity of our offers, the usual short-term cycle of our activities, and of course, the close monitoring of procurement costs and the daily updating of the relevant database. Regarding increase of the margin, we benefit from proven pricing power, combining a growing customer demand or mission-critical positioning and added-value innovative solutions. Pricing, discipline, and quality of execution remain outstanding, and the market dynamics allow us an even more selective approach.
Regarding bolt-on acquisition alongside organic growth, as you know, it is the other key pillar of our value creation strategy. We'll see organic growth at good margins. In 2022, we completed 5 acquisitions, one in France, two in Germany, and two in Poland. The cumulative full-year revenue acquired is EUR 855 million. As you well know, our markets are very fragmented, offering many acquisition opportunities, and we have an active pipeline going forward. We conduct a proactive sourcing of targets locally and centrally in concurrence with our aim to offer the whole spectrum of SPIE services in every country where we operate. On top of bolt-on, this year has been very busy with the acquisition of Worksphere. It has been a key strategic move in the Netherlands. This mid-size acquisition is very interesting.
It is highly synergistic, low risk, and it offers the capacity to quickly replicate the SPIE model. We are now the number one player in the Netherlands with EUR 1.3 billion in revenue, 5,800 employees, and the partner of choice for over 2,500 customers throughout the country. For this integration, 25 work stream were organized to make this integration a success, with 50% of cost synergies already delivered. EUR 6 million of other intake related to cross-selling opportunities. A good illustration is our support for ASML, for engineering and maintenance project, where we brought together the expertise of SPIE ICT, SPIE Industry, and the newly acquired Worksphere, now called SPIE Building Solutions. We registered a very low level of resignation linked to the acquisition.
Stronger employer brand is attracting new highly skilled technical talents. We have now a high density of our local networks. I will now go more into the details of our four business segments. Regarding France, on slide 16, we enjoyed a strong dynamic across all our markets. We further increased our EBITDA margin. Revenue grew by 9.6%, of which 7.6% was organic and 2% came from acquisitions. Our Tech FM activities benefited from a growing appetite for energy efficiency solutions and energy performance contracts. In the industry, electrification and decarbonation is now a major trend and is a key driver for the dynamic of our services. Building solutions is boosted by energy renovation requirements and the new approaches in office buildings that implies a densification of technologies per square meter.
City Networks is mainly driven by e-mobility and smart city solutions such as public lighting and traffic management. The 30 basis points improvement of our EBITDA margin demonstrate our operational excellence and our pricing power. In Germany and Central Europe, we recorded a strong performance with 11.2% revenue growth, of which 5.3% was organic and 5.8% came from acquisitions. In Germany alone, organic growth was at 5%, and we further improved our EBITDA margin by 10 basis point to 6.5% in Germany on par with France. In Tech FM, we enjoyed a high success rate in renewing our extending contracts. Here also, we have strong demand for energy efficiency solutions, and we gain numerous contracts in the logistics sector. ICS was boosted by managed services and unified communication activities, as well as digitization projects in healthcare.
I would like to stress that our order backlog in this area is at an all-time high, fueled by multiple projects induced by the change in energy mix. In Central Europe, we recorded a double-digit organic revenue growth, with Poland and Austria leading the pack. The strengthening of our positions for acquisition over the last two years is bearing fruits. In Switzerland, the ICS activity is still constrained by some supply chain delays. On slide 18, Northwestern Europe, we recorded a significant EBITDA margin increase of 80 basis point to 5%. Revenue growth was at 39.5%, fueled by acquisition, we see at 32.6% with Worksphere, while organic growth was a solid 6.6%. In the Netherlands, we enjoy the strong momentum in high voltage activity and industry services.
Worksphere, now SPIE Building Solutions, brought a dynamic level of activity in Tech FM. Our EBITDA margin continued to improve, thanks to performance initiatives conducted within the historical parameter. In Belgium, we posted good trends in building industry services. The EBITDA margin was broadly stable. Finally, the disposal of the U.K. business was completed on December 19th. The U.K. was still consolidated for 12 months in 2022, with an EBITDA margin back in positive territories. Now looking at our oil and gas and nuclear division. Overall revenue rose by 14.2%, including 11.9% organic growth, 11.9. The positive 3.6% impact from currency was mainly due to the USD/EUR parity. EBITDA margin was stable at a sustained high level of 9.5%.
All together, the oil and gas activities were very well-oriented, with a strong momentum, and this activity now enjoys good midterm visibility, thanks to its record order backlog, including several multi-year contracts. Nuclear services recorded a limited growth due to the changes in maintenance planning EDF had to deal with because the world rippers issue they had to face. EBITDA margin was at the usual high level. Now I will hand over to Jérôme, who will comment on our financial performance.
Thank you, Gauthier. Good morning, everyone. I'm on slide 21. Starting with an overview of our P&L. Once more, we did deliver an excellent performance in 2022. I would like to highlight three figures, especially. EUR 1.1 billion of additional revenue in 2022, translating into a 16.1% of total growth. +20% of EBITDA increase compared to last year, resulting from the combination of a significant top-line growth and an improved EBITDA margin. Finally, +23% in the adjusted earnings per share. Moving to the revenue bridge. In 2022, we recorded a 6.9% organic growth. Contribution from acquisitions accounted for a growth of 9%, of which 2/3 related to the consolidation of Worksphere for 11 months.
U.K. activities remain consolidated for 12 months in our fiscal year 2022, and accounted for EUR 250 million in revenue. The disposal figure refers to two minor divestitures, one in France, one in the Netherlands. Finally, the Forex impact is mainly attributable to the Euro Dollar parity and related to our oil and gas activities. Now looking at the bottom part of our P&L. EBITDA was up 20% and adjusted net income was up 24%. Indeed, adjusted net income increased faster than EBITDA, thanks to a stable cost of our debt and a slightly lower normative tax rate. In detail, our net interest cost increased by only 7% year-on-year, and this is explained by, A, the stability of our gross debt, the cost component of our debt, which is mostly at fixed rate.
The attractive terms secured through the partial refinancing of our debt in October 2022. The adjusted income tax benefiting from a lower normative tax rate as a result of a reduced corporate income tax rate in France, now at 25.8%. On slide 24, net income was at EUR 151 million, with a limited decrease of 10%, despite the one-off negative impact of the deconsolidation of the U.K. for an amount of EUR 105 million. It is a pure non-cash gross accounting impact from the deconsolidation. The total negative impact of our U.K. operations and its disposal in our 2022 accounts amounts to EUR 85 million.
This is in line with what was announced at completion of the disposal, adding the tax saving, the Forex gain impact, and the positive contribution from the U.K. activities to our net results in 22. The positive cash impact of the disposal is EUR 38.6 million, also in line with what was announced. The increase in the amortization of the allocated goodwill is related to new acquisitions, including Worksphere in 2022. Finally, I will mention the tax adjustment, which obviously is the difference between effective tax rate included in our net income and normative tax retained in our adjusted net income. Our working capital stands at a negative 38 days in 2022, in comparison with the negative 43 days last year. This is an exceptional performance, especially in a context of strong organic growth and tougher negotiation conditions with our clients.
In particular, our trade receivables increased by three days and advance payments received decreased by two days. We also maintained very strong discipline on trade payables as well as on our invoicing process. In such a growing activity context, our structurally negative working capital at -38 days translates into a net working capital of EUR -824 million as of December 31st, 2022. This is broadly stable to December end 2021. The group demonstrated once again the permanent focus on cash management. Slide 26. In 2022, we therefore generated an excellent level of free cash flow at EUR 315 million, up 17% based on a strong cash conversion of 97%. I would like to highlight the outstanding average cash conversion since our IPO in 2015, which stands at 110%.
Our financial net debt stood at EUR 920 million at the end of the year, excluding IFRS 16. You can see on this slide, our operating cash flow amounted to EUR 489 million, up 19% compared to last year. Cash outflows related to tax and interest amounted to EUR 151 million. Other expenses for EUR 24 million, which are composed of cash out related to the financial elements of the pensions for EUR 13 million, bank and insurance guarantee fees for EUR 6 million, and restructuring costs for EUR 4 million.
Our free cash flow of EUR 315 million allowed us to self-finance our M&A activity, a net of EUR 260 million cash out. Of which around EUR 200 million dedicated to the acquisition of Worksphere and as well as our dividend for EUR 106 million. While self-financing our M&A activity, as I just mentioned, we further reduced our leverage ratio at 1.6x EBITDA, which is at an all-time low. This is evidencing once more our efficient cash generative model. At such a level, it gives us full flexibility to pursue our acquisition, bolt-on acquisition strategy going forward while maintaining a disciplined financial policy. Slide 29.
The recent two refinancing we made, one in 2022, the other one early in 2023, allowed the group to maintain a sound financial structure based on a diversified debt profile, long maturities, and attractive financing conditions. In October 2022, we completed the refinancing of the EUR 600 million term loan associated with the EUR 600 million undrawn revolving credit facilities with maturity extended from 2023 to 2027. Early in 2023, we successfully issued a 2028 ORNANE of EUR 400 million, as you know, and consequently early redeemed our bond 2024. Let me also point out our high level of liquidity, reaching EUR 1.8 billion at the end of December 2022, as well as the upgrade by Standard and Poor's of our credit rating to BB+.
Finally, the average cost of our debt for 2022 was at 2.36%, thanks to a large portion of debt being at fixed rate. Slide 30. Let me come back on the successful offering of our sustainability-linked ORNANE, issued in January 2023. It is our second sustainability-linked financing based on SPIE's 2025 ESG targets. First, it enable us to early refinance our EUR 600 million 2024 bond and extend the maturity to 2028. Second, we reduced the group's gross debt by EUR 200 million from EUR 2.1 billion- EUR 1.9 billion in total. Third, the ORNANE carries a very attractive coupon of 2%.
If we compare to 3.125% of our 2024 bond or to the cost of a straight bond of circa 5% at the time of the transaction, it implies an underlying cash cost saving of circa EUR 10 million per year. The ORNANE structure allows for a very limited potential dilution as the conversion mode in cash or in share is exclusively at SPIE's option. For illustrative purpose, the dilution would be 1.69% only with the principal redeemed in cash and if at the time of the conversion, the share price of the group is at EUR 42.86. I will now conclude my part with our recommended dividend. I'm on slide 31.
The board will propose to the Annual General Assembly a dividend of EUR 0.73 per share to be paid in cash. This represents a 21.7% increase compared to 2021 dividend at a steady 40% payout ratio of the adjusted net income. An interim dividend of EUR 0.18 was already paid in September 2022, and the remaining dividend would be, therefore, EUR 0.55 per share to be paid on May 24th of this year. As per our policy, an interim dividend will be paid in September 2023, amounting to 30% of the approved 2022 dividend. This concludes my part. I will now hand over to Gauthier.
Thank you, Jérôme. I would now like to turn to a topic that is at the heart of our strategy, our corporate and social responsibility. We are fully mobilized to deliver on our CSR 2025 roadmap, and we have defined specific action plans with quantitative yearly targets that are implemented across all our business units. It is important to underline that managers are incentivized on those targets in their variable remuneration, as well as in their long-term incentive plans. In 2022, we made good progress on our five key targets. First, 46% of our revenue is now aligned with the EU taxonomy. Aligned, which is more stringent than eligible. This compares well with the 42% in 2021, and we are well on track to achieve our 50% target in 2025.
Regarding our own carbon footprint, as a pure service provider, we have a limited direct carbon footprint. Scopes one and two emissions represent only 17 g of CO2 per EUR of revenue. This decreased already by 9% since 2019. Our major lever is the renewal of fleet towards electrical vehicles, and we are continuing to meet our 2025 target of 25% direct footprint reduction. On scope three emissions, we are committed that 67% of our suppliers by emissions will have science-based targets by 2025. In 2022, this share was at 29%, already up from 17% in 2021. Finally, regarding people, safety, as you know, has always been and will remain a priority. We are targeting to have zero accidents compared to 2019.
In 2022, zero accidents were down by 31%, the absolute accident frequency rate continued to decrease to 8.2. Regarding gender diversity, we continue to proactively promote both attraction and retention of female talents. We target to increase by 25% the share of women in key management positions. By the end of 2022, we were already up 14%. Looking at our green share, as you know, we did pioneer the use of the European taxonomy. We've been calculating our taxonomy-aligned revenue for four years now with consistent progress starting at 35% in 2019. In 2022, our 46% share of revenue has three components. 27% for energy efficiency solution with HVAC and electrical system in buildings and industry facilities.
17% for the shift in energy mix with the connection of the renewables to the electrical transmission and distribution grid. Since 2022, it also include 1.7% for nuclear activities. Two percent for clean mobility, primarily charging infrastructure for public transportation and electric vehicles. On slide 35, via being a services company, we aim at valuing our people a key asset, the first asset for the group. I already mentioned our health and safety performance, our target to foster gender diversity, and the fact that our employees are the first shareholders of the group. Recruiting and developing our people in the context of scarcity of workforce is key to further grow our business. In 2022, we recruited close to 6,400 people with permanent contracts.
In particular, we incentivize our employees to propose new talents for competition, and this has proven very successful. We're also very active to attract young professionals and around 1,100 new apprentices joined SPIE in 2022. Finally, we work a lot to retain our talents. Our voluntary turnover was stable in 2022 at 8%. Our strong ESG focus and our progress towards our objectives are well recognized by external rating agencies, as we show on slide 36. In 2022, we were rated by CDP for the first year, and we obtained a score of A-. It correspond to the leadership level, the highest in the scoring methodology, representing the top 16% companies in their sector. We have a score of 54 at S&P Global, bringing us in the top 6% of the rated companies.
Our Sustainalytics rating improved further to 11.7, and we are now among the top 3% of the rated companies. We're also in the top 7% at EcoVadis with a gold rating. Finally, we are rated BBB under MSCI ESG. It is also worth mentioning that in January 2023, we joined the CAC SBT 1.5 degree Index, the new climate-focused version of the CAC 40. This new index focuses on robust and ambitious emission reduction targets in line with the 1.5 per degree goal of the Paris Agreement. Our inclusion in such index evidence our ambitious climate strategy. Now before I come to our outlook for 2023, let me remind you why it is such a good time to be an electrical engineer.
We are ideally positioned to accompany the energy transition and the digital transformation of our economy. With the growing electricity needs, SPIE is more than ever part of the solution. Some figures to highlight how strong the trends are in our business. For the shift in energy mix, more than EUR 150 billion in investment in energy transmission and storage will be required by 2030 at European level. In energy efficiency, building renovation is a major challenge, with reduction in energy consumption expected at up to 60%. In clean mobility, 32 million of EV chargers will be needed in Europe by 2030. In the digital transformation, we should have 40 billion connected devices by 2035, meaning a huge need for 5G connectivity and data center.
Looking at our outlook. As I said, we entered 2023 with a record order backlog and the very strong market fundamentals that I just described. We target for 2023 a mid-single digit organic growth, a further EBITDA margin increase, a high focus on bolt-on M&A, which remains at the core of our business model. We'll keep our payout ratio at circa 40% of our adjusted net income attributable to the group. I thank you for your attention. Now with Jérôme, we'll be very pleased to take your questions.
Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Rory McKenzie at UBS. Your line is open. Please go ahead.
Good morning. It's Rory here from UBS. Firstly, well, congratulations on the best year for organic growth since, I think, about 2006. Good to deliver that. Can you estimate how much of the growth this year was due to price increases, and are pricing still increasing sequentially at the moment, or has it stabilized? Secondly, you added headcount, I think at the fastest rate ever. 6,400 new hires is about a kind of 14% gross addition compared to about 11% run rate, pre-2019. Has that been a drag on group margins or productivity? Can you talk about what you're budgeting for next year in terms of headcount?
Finally, since we last spoke, the EU laid out its Green Deal Industrial Plan on the first of February. While I appreciate it's still undergoing lots of discussion, I'm sure you've had a look. Can you share what your thoughts were and what are the key areas that you as SPIE will be tracking as governments try and translate these plans into reality? Thank you.
Thank you, Rory. For the first part of your question, as you know, it is very difficult for us to split between volume and price impact when we look at our growth. Obviously, since we're extremely efficient in passing on inflation, there is a higher component of price impact as the year goes, but that would be really hard to quantify it. Regarding inflation, Well, it is somewhat abating in certain areas regarding supply. However, we're facing salary increases and which are usually agreements at national level. It is the case in Germany, in the Netherlands, in Belgium.
It is slightly different in France, but salary increases for 2023 are a bit higher than in the past. It is a further challenge to pass on this cost going forward. Well, we are not worried. We have, I think, demonstrated sufficiently our ability in this area. Going forward, well, we think we see a very good start to the year. The comparables will become tougher as we go. All together, we're very confident regarding the growth guidance that we have given. Regarding headcount, well, obviously, we're talking of a larger perimeter now with Worksphere being there as well, huh?
We, well, I think it is a reflection of our efforts to match the demand of our customers, and it also is contributive to our organic growth. There's no way you can grow your business without more people. Our efforts are extremely strong in this area. We are an attractive employer for, and not the least for the reason of the shareholding plan we propose, but also the fact that we are part of the solution and it really gives sense to what we do, and it is a strong feature of attraction for talents to our business.
It doesn't have the detrimental effect to the margins, I would say on the contrary, because you see it supports our own growth, and as you see our growth is done at a very good margin. We do not compromise organic growth. Sorry, margin for organic growth. We have never done that and we'll never do. But it's really good that we're able to find people. No, we do not budget headcount as such. Obviously, it is a function of the demand we have to meet. We try to anticipate, but only for so much. But well, clearly it's growing headcount going forward.
Regarding the Green Deal, I think, well, a lot is already in the minds of our customer. It's not in the pipeline of the call for tender. I expect probably the most significant impact towards industry. We are starting to look at hydrogen project. I think it is something, it is a very interesting technology for the future. Clearly, various deals in Germany and new laws try to accelerate the shift to renewable energy. We will benefit from that. As you know, we have already a very strong backlog in this area, so it just adds to the fundamental, very solid trends of our business.
That's great. Thank you very much. I just want to follow up on those new hires. Is there any difference in, you know, productivity between engineers you hire in year 1 and once they've been in SPIE for two-three years, or because you're hiring qualified people that there's not really that same kind of ramp up in productivity?
No, I think we constantly work on productivity. And in fact, when we are helped also by the market situation in our business, people are always worried about what their next job is going to be, their next assignment is going to be. When there's a lot of work, they tend to work a bit faster to finish the job on the site and move to the next contract. It's it helps in a way. We people are constantly trained. You see that the technologies evolve fairly fast, and they have to adapt and discover new technologies. There's always a bit of a ramp up impact on this side.
You see the fact that we have many apprentices or these younger ladies and gentlemen, they take a bit of time to come up with a standard productivity. It's a continuous cycle in this regard. I think we have been very successful in 2023 to save the demand of our customers.
That's great. Thank you very much.
Thank you. We'll now take our next question from Oscar Bell at JP Morgan. Your line is open. Please go ahead.
Yes. Good morning, Gauthier and Jérôme. I have three questions. The first one is following up on Rory's question on the kind of the employee side. Is it possible to give a bit more color on the magnitude of wage inflation you expect to see in 2023? Is it mid-single digit or is it above that level? The second question is on Germany. You talk about some timing delays on some of the transmission work. Do you have a sense of when that will come back? Is that kind of a Q1, Q2? Is it kind of H2 next year? The final question is around the competitive background in the market. Given there's a lot of growth in these industries, are you seeing any changes in competition for new bids?
In particular, one of your competitors, I guess, has merged and is publicly talking about higher margins. Have you seen any change in the competitive background for bids? Thank you.
Regarding wage inflation, I think a short answer is mid-single digit, with a little bit of variation country by country. It will be slightly higher this year in the Netherlands if we look at the current discussion. you know, 6%-7%. It has been very reasonable in France and Germany, around 5%. Again, these are general agreements at you know, branch or country level or union level. For instance, in Germany, it is really driven by the metal in the Netherlands as a branch dealing with a collective labor agreement. It doesn't create any competitive disadvantages compared to our the players in the market.
The obviously, the challenge is to pass on this inflation, which we have done, and we anticipate in every single budget and all the tenders we prepare, we see work with the anticipated rates at the time where the work will be done. Clearly also, we have revision price formula, which, as you have seen in 2022, do work well. Not a huge worry per se, but something that we have to deal with on a very timely manner as we did last year. Regarding transmission in Germany, I think we are looking at a very active market, and we have orders in hands, in hands are huge.
It is the question of when we can start the work, and there's been some postponement with the planning permission, etc. I think we should keep a good picture of this business. We had a very strong growth in 2021 and we achieved roughly the same turnover in 2022. We are on a high level with a huge order backlog. It will kick in this year and probably as, you know, first quarter the winter hampers a bit production. As soon as second quarter, I think, we will have a strong production in transmission in Germany.
As you know, one of the move of the German government to tackle the energy issue is to reduce the bureaucracy for planning permission and try to accelerate the project. New law has been passed and it should produce effects. Kind of very confident on this on this market. Regarding the competitive background, I think two things. First, everyone is busy, so most of the people are reasonable and understand that when you have a lot of work and resources are scarce, it's not the right time to sell them at a cheap price, huh? We see this this more reason in the market. As you mentioned, the change of strategy at EQUANS is very clear, huh?
The, you know, the surprise, Now mentions that they want to go for margin over volume, and monitor the working capital. These are very good news, and we do hope that it will to produce effects on the market rapidly. As we said in the past, the big ownership will bring a difference in approach, and it has been very clearly stated by EQUANS recently.
Very much.
Thank you. We'll now take our next question from Christophe at ODDO. Your line is open. Please go ahead.
Yes. Good morning, gentlemen. Christophe Tadié ODDO BHF. Again, congratulations for the, for the results. I've got three questions, please. The first one is on the margin guidance 2023, further improvements. U.K. disposal, according to me, is attractive, let's say, on margin. Would you say as well that excluding the disposal of U.K., the margin will improve? Could you tell us in which area, in which geography the margin improvement will be, let's say, the strongest? The second one is on M&A pipeline. Usually you say that you buy EUR 250 million of sales. In 2023, it seems that you want to put the focus on, let's say, on M&A. Do you have, let's say, a rough envelope of sales that you, let's say, monitor closely for 2023?
The third one is related to the working capital. It was flat in term of days, 22 days, if I remember well, in H1. In H2, the pace of organic definitely accelerate. Why should we see a decrease in term of working days in the, in the working capital? If I may, is there any specific reason? Thank you for that.
Yeah. Christophe, I didn't understand the very, very first part of your, of your question?
Okay, you say on the guidance for the margin, operating profit margin in 2023, that it will improve. As far as I remember, the U.K. disposal is actually for the margin, probably by 10 days. Excluding the U.K., are you going to improve the margin and in which geography?
Okay, understood. I think you have all done the math and faster than me. The margin, the 2022 margin excluding UK is in the range of 6.4%. Clearly, when we say we're going to increase further the margin, this is our starting point, huh? This is what we are going to work at in 2023. Where is it going to come from? I think a part will come from the Netherlands with the total synergies kicking in from the acquisition of Worksphere. I think we will see further progress in France and definitely.
There might be a small mixed effect with oil and gas growing a bit faster than the average. That's what I see for. Clearly the headwind is to pass on inflation. We have to work on that. I'm confident that we will make it, and that's why we target further margin increase. It's not, it will seem, not, it doesn't make things easier. This is my view for 2023. Regarding M&A, well, we are basically working in all our countries towards M&A.
Now that we have done this large acquisition in the Netherlands, since the integration has done very, very well and very, very quickly, we are also, we're also in the Netherlands, again, bandwidth to look for bolt-on acquisitions. At the moment, we're working in every major country of SII on a good M&A pipeline. I don't think that it should be dissimilar to what we do usually. In my view, also due to Worksphere, 2022 was a bit on the low level regarding M&A. I do hope that we will fare better in 23. Regarding working capital, I'm sure Jérôme will be pleased to answer.
Yeah. Good morning, Christophe. Yeah, regarding the working cap, as you rightly pointed out, which we had, we had a slight increase by 5 days, from minus 43 days, up to minus 38 days, at the end of December. Again, in this context of very strong dynamic and very strong organic growth, also in a context of rising interest rates, with definitely much more focus from all our clients across all sectors on cash. Also in a context where we had to lead negotiation on price increases with our clients. We definitely believe that in the end, this slight increase by 5 days is very, very minimal.
If you also look at the historical pattern, historical performance at December end, it is a fact that December was slightly better at -43 days, but still -38 days stays a very, very good performance. If you look more into detail on how did it translate throughout the various working capital items on constituting the net working cap. As I mentioned, +3 days on trade receivables. I think this is very clearly the effect from the growth. I would like to point out that in terms of overdues, we maintained a very good quality within our balance sheet. Overdues even reduced slightly from December 2021 to December 2022.
Uh, and we also, uh, lost, let's say, two days of, uh, uh, advanced payments from our customers from, uh, from ninety days to seventeen days. It's not, it's not a drama, but probably reflecting quite well, uh, the tougher condition context I, I mentioned. So from our point of view, the, the, the, the working cap stays and will stay, uh, structurally negative going forward. And this, uh, this five days, uh, difference in a context of higher growth translated in the end, as you have seen, uh, into a very stable, uh, level of working cap in value, negative three hundred, uh, sorry, negative eight hundred and twenty-four million in comparison to eight hundred and thirty-four million last year. I think, uh, this is the rationale behind.
Okay. Thank you very much for those answer. A quick follow-up, if I may, on oil and gas. The organic growth, obviously in 2022 was very strong, yeah, at 12%, and the margin was flat, 9.5%. Is there a reason why the margin is flat? I mean, is it a mix effect versus nuclear versus oil and gas, or is there other factor that could explain that? Thank you very much.
No, I think in both segments, the margins didn't really change. It's a high level of margins. The oil and gas customers are have become very tough in the past years, and they have not forgotten their message. It's not always easy negotiation with them, and I think we're looking at a good level of margin.
Okay. Thank you very much again.
Thank you. We'll take our next question from David Cerdan at Kepler Cheuvreux. Your line is open. Please go ahead.
Yeah, good morning, Gretchen, Jérôme and Audrey. I have a few questions for you. The first one is regarding the staff. Do you think that there is a risk of staff constraints for the next years? What could be the good solution to attract further people within this industry? My second question is related to, yeah, your performance in 2022 was good for the top line growth. Do you think that you could keep the same kind of organic growth for 2023? Because you say that wages should continue to increase. You expect acceleration in oil and gas.
All in all, is it possible for you to repeat your organic performance in 2023?
We have given the guidance for 2023, you know, so far I will stick to the guidance. Regarding people, it's yeah, it is a major challenge to attract people. Well, we've been faring well because we, for the reasons I described. I think we are an employer of choice in many countries. We offer a good purpose for people to come and work for SPIE being part of the solution. We have deployed many different toolbox, and this year we shared, we created this HR toolbox to which we shared throughout the group with giving all the good practice, allowing us to attract and retain people.
We have also foster the sharing plan for the employees. We are working a lot trying to tap different sources and people who come from not exactly the same business, but not too far away. Apprentices. We're trying to increase also the attraction for female employees, which are still in a low proportion within SPIE. It is clear and effort all across the group to attract and retain people. It is really something everybody's working hard at. We've not been unsuccessful this year in the contrary. As you see we have a record level of hiring, and we continue on that path. Clearly, this is a challenge which is on top of our mind.
This is also why it is very important that we sell our services at the right price, in the context of scarcity of resources. There's no way that we want to sell them cheap, and the clear message within the group is, you know, margins, in this context, there is no reason why the margins should not continue to go up. We have to be extremely demanding on price level.
Just to be clear, do you think that there is a risk for this industry to face some deficit of staff in the future, and as a consequence, do you think that wage inflation should continue to be stronger than the local inflation just because this industry has to attract some new talent?
Well, I don't think the wage inflation so far has been stronger than the local inflation. On the contrary, I think we managed to keep it at a very, you know, reasonable level and below general inflation. It's again, it's a challenge. We will work on it. So far we've been able to cope and to deliver, and we'll continue to work in this direction.
Okay. Thank you.
Thank you. We'll take our next question from Augustin Sandray at Stifel. Your line is open. Please go ahead.
Augustin Sandray at Stifel. Thank you for taking my questions. I've got three, if I may. The first one is on the bolt-ons. I would like to know how the pipeline is evolving for you now and whether you still see some opportunities at interesting valuations. Second, question for me is on the Northwestern Europe division. Could you give us a split of the revenue between the U.K., Netherlands and Belgium? How much did the UK account for this performance? Finally, as a follow-up on the working capital, it has improved a lot since 2019, and I would like to know whether you could share with us a normalized level going forward. Is -38 days satisfactory, or do you see yourself going back to -34 pre-COVID levels? Thank you.
Well, regarding Bolton, we, as again, as I say, we have a good pipeline. We remain very disciplined on the valuations. It's, we have, I think we've been communicating on our average multiple for a long time now, and you do not see any major deviations. Strong discipline is kept in this regard. When I look at what's in the pipeline right now, the indicative offers we have made, et cetera, it's, there's no difference. Regarding Northwestern Europe, well, as Jérôme mentioned, in the revenue bridge, U.K. was in the range of EUR 250 million, and obviously we will not give a further split between Netherlands and Belgium.
Netherlands is significantly larger than Belgium, obviously. Regarding working cap?
Yeah, regarding the working cap, I'm not sure I can fulfill your model so specifically. Just bear in mind that we did minus 43 days last year, and if it has been done in such a way, in a very straight and comfortable way, meaning no stretch on specific working capital items, it means that this is probably something we can do again. It's not that precise for us. Permanent focus on working capital management, especially regarding early invoicing on all our projects and contracts. Permanent focus on cash collection, therefore minimizing overdues as much as we can. Very strong effort in negotiating permanently some satisfying commercial conditions with our clients, including cash advances. This is all what is in our toolbox on a permanent basis.
In our opinion, minus 38 days is really good performance again in such a specific context I stressed earlier. We'll maintain exactly the same level of focus on the cash management going forward. I think you have here regarding what we've done historically, what we've done again in 2022, where is the range of what we could consider as a normalized level.
Thank you very much for your answers.
Thank you. We'll now take our last question from Eric Mura at CIC. Your line is open. Please go ahead.
Yes. Hi. Good morning. Thanks for taking my question. I got three actually. The first one on regarding your midterm guidance, in terms of the EBITDA margins, in terms of 6.7% of EBITDA margin. I was wondering, you know, in this current environment, with a lot of demands, the divestment of the UK, the good momentum of oil and gas, do you think this midterm guidance could be upgraded? A second question on your capital allocation policy. I have seen the dividend and the dividend yield of SPIE is quite good. I think it's around 3%, which is pretty high. Would you ever consider some share buyback? The last question on nuclear. You mentioned these difficulties of EDF.
Do you see any improvement in 2023, or do you think 2024 is more likely to be the year of improvement of on that side? Thank you.
Well, we have given the midterm guidance which obviously we do not revisit on too often. Well, clearly we have a ambition for 23 which is very current with this guidance. We'll eat the elephant one bite at a time. Regarding capital allocation policy well obviously we create the most value by when we do good acquisition as we have evidenced also this year and remains the primary focus huh. As you said we have a strong dividend policy we'll see as we go on.
For the moment, clearly priority for this year is to try good opportunities of acquisition where we can spend our cash in an accretive manner. As you might remember from yesterday, the ROIC from M&A is above 20%. Regarding nuclear, it's, I think you are right. To 2023, we're not sure huge growth in the nuclear activity. Well, EDF is still dealing with the issue which has entailed a complete disruption of the maintenance program, huh. We'll have to deal with that at a good level of activity because there's a lot going on in terms of maintenance.
Well, it's a matter of reshuffling the program, but I'm not talking a major variation one way or the other, but in terms of top line for nuclear. The prospects for the future are extremely strong. We were already working on call for tenders for EPR2, for the first tenders are already been launched, and we'll be answering them in the weeks to come. Clearly the midterm trend is extremely strong. We are very well positioned. We're one of the major player for EDF, we'll benefit from these trends, not in 2023, it's a transition year, but definitely for the future.
Thank you.
Thank you. There are no further questions in queue. I will hand you back to your host to conclude today's conference.
Well, thank you very much to all of you for attending this conference. Thank you for the, for the interest you take in SPIE. We will endeavor to deliver on our guidance once more in 2023. You can rest assured that all the employees of the company are extremely dedicated to delivering and offering the best service to our customers, while keeping clearly a close eye on our CSR targets. Thank you very much. Have a good day.
Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.