Hello and warmly welcome to Orthex financial statement release for 2023, and especially, of course, concentrating on Q4 of last year. With me I have our CFO Saara Mäkelä and our CMSO Hanna Kukkonen, and we'll take you through today's presentation. There's a chat where you can post questions meanwhile we are presenting, and at the end we will facilitate the questions and try to answer as many as possible. So let's move ahead with the presentation. First we're going to do the normal introduction and then comment on 2023. We'll spend a little bit more time on strategy and especially strategy in action at Orthex, and then Saara will help us to deep dive a little bit into the financials, and as the last point we'll give you the opportunity to ask questions through the chat. The map of our operations is quite familiar.
We're a Nordic leading housewares company, and we are a branded goods company with three strategic brands: SmartStore for storage products, GastroMax in the kitchen segment, and then Orthex for the company and the rest of the products. I think what's new on this map is actually a dot in the Benelux where we nowadays have our own local presence in the market. Otherwise, not many big changes here. Still, we both produce and sell 90% of what's available in the stores, so more than 90% on own brands and around 90% produced in our own three factories in Finland and Sweden. Our mission is to make everyday life easier for the consumer, for the households, and that we are doing in four categories. Storage, especially home storage, is the largest one, and the percentage and the importance of that category has grown during the years.
Now it's up to 69% of sales. There we provide storage solutions both in places where you cannot see the storage but also beautiful storage, high-quality storage products that you can have visible in your home or in your kitchen. The kitchen segment is the second largest, at 21%, and here we concentrate on mainly the food preparing and the food storage, not so much the serving or the other things you have like plates and things to eat from. The two other categories which are more of local nature, especially in Finland but also in the Nordics, are the home and yard products and plant care products. For us, sustainability is key. We take sustainability into consideration in everything we do, and that's an important point, and we'll dig a little bit deeper in that later on in the presentation.
But first of all, of course, on sustainability, the main point here is that if you make products that last for a long time of high quality, it means you can use them for a long time. And if the design is timeless, hopefully you will not throw them away because you get bored of them, but you can keep them in your home. So very brief on financial 2023. In the end, we managed to grow. Despite a quite tough start of the year, we had a strong finish to the year, and that gave us a constant currency growth of 5.3%, which is actually in line with the guidance for our long-term targets that we should grow the whole company at above 5%. Then I would say continued strong growth outside the Nordics, and especially in Europe, we focus a lot on the European market.
That's key for us. If ignored for a long time, it's time to consider Europe being our home. And then, yeah, commented already on the strong last quarter on profitability. We almost doubled the profitability compared to a quite weak last year. Quite happy with the development on this side. On the raw material price side, during last year there was an incredibly high peak in cost on raw material or raw material price. This year we're on a more normal level, however a bit higher than the long-term average, but still a stable environment to operate in, especially towards the end of the year. So looking at a bit more in detail, so here are the numbers: almost EUR 86 million in sales, and in that sense quite happy. And if you take into account the currencies, the Swedish krona has been fairly weak.
Actually, the growth is a bit higher for the full year, so at EUR 88 million. On EBITDA, we were EUR 11 million, ended at 10.9 compared to last year, 5.5. And the EBITDA margin as well almost doubled, so going in the right direction. Leverage much under control, and actually our target is to be below 2.5, and we are well within that boundary. And cash flow at EUR 10.2 million, quite in line with the result, I would say, and a strong cash flow. Q4, this is a nice slide to show because we made record sales in Q4 compared to any quarter. So even if the comparison is fairly weak from 2022, at the end of 2022, especially the Nordic retailers held back on their buying. I believe that there was inventory management going on, etc.
Favorable for us, but at the same time it's nice to point out that actually sales were record high by any standards, increasing by 15% or in constant or without the currency effects, even 16.2%. On the EBITDA side, we reached EUR 2.9 million in EBITDA, and this is clearly, it could have been higher, but as you can see in the picture we have done a lot of campaigns. We have made our products available to our customers and our partners to actively make campaigns with, and this has paid off in that sense that the top line has grown nicely. And of course, when consumers are sitting a little bit on their hands and not wanting to spend money, it's quite important that your products are visible in the store, and that's where we've had the focus to actually remind people of our good products.
Moving on to the next slide, looking at geographies, we had for the fourth quarter a really strong Nordic development that you can see in the left-hand side graph. Then the rest of Europe still grew by around 11% and fairly good. The EUR 5.4 million is in absolute terms a good sales in this area, so very much in line with what we had expected in that sense. Rest of the world , really small numbers, so in percentage quite big changes. We have a customer which is quite a big part of that sales, and that particular customer has their own problems to attract the shoppers to the stores. So we are getting a little bit of effect from that. Looking at the full year numbers, Nordic still clearly a majority of the business.
However, the rest of the Europe business is growing nicely and becoming more and more important for the company, and that's exactly what we want to do and achieve. So in that sense, the 11.2% growth full year outside the Nordics is quite in line with the long-term strategy as well. Then if we go into the product categories, we put a lot of efforts and fire in home storage and in the storage category, and that's also the category that performs well and is, let's say, the spearhead when attracting both new and old customers outside of the Nordics. And that's working well. Storage is growing according to plan, and we are quite happy with the development here. Then on the other categories which are more present in the Nordics, you can see that the full year development has been a bit slow.
This is a lot due to Nordic retailer behavior and consumer behavior, which has been a bit slow during the year. However, if you look at Q4, we already see some nice uplifts in the kitchen and the plant care category, even though these categories are, especially plant care and home and yard, quite small in the big picture, but important categories on the local Nordic markets. If we move ahead to the strategy, and here the idea is actually to tell you a little bit more about what has been going on. The strategy is we are aiming to become the number one brand in Europe, and we are aiming to strengthen our already fairly strong Nordic houseware company position. Those are the main targets here when it comes to sales and commercial strategy.
Of course, the overall purpose of the company is to make everyday life easier with good, high-quality products for the home. So if we look at these different parts in the picture, Hanna will take us through the clear category strategy, showing the way in sustainability and then maintaining a high innovation rate in the next coming slides. And then I will come back and tell you about the blue boxes, the one, two, and three in this picture. So if I hand over to Hanna now so she can tell you about category strategy, etc.
Thank you, Alexander. Yes, so let's start with our aim to be the clear category, to have a clear category strategy in focusing on storage. And among other things, what we did during 2023 is that we rebranded our GastroMax food storage product under SmartStore brand, and this is really helping us to increase the listings of our storage products also in the kitchen category. And of course, it expands our already wide assortment of storage products, and this rebranding also is helping us to concentrate and have more efficient investments in the brand building. And then moving to showing the way in the sustainability. So we want to be the industry forerunner in sustainability by producing long-lasting, high-quality products that are produced safely in our factories in Sweden and Finland, and we use recycled and renewable raw materials always when it's possible.
It's not only that, it's also about certifications, reporting, and commitments, and there we have put quite a lot of effort during 2023. For example, all Orthex factories have the three different ISO certificates for quality, environment, and occupational health and safety. We have our near-term emission reduction target, and it's approved by the Science Based Targets initiatives . Last year we introduced an ESG working group so that we are well prepared for the coming CSRD reporting that is coming ahead in a couple of years. We are using SEDEX and Amfori BSCI so that we can guarantee an ethically and socially sustainable production. Then we are reporting in many different sustainability reportings and ratings. For example, last year for the first time we reported for the EcoVadis and received a silver level rating last year.
The CDP reporting, we actually improved our rating from the B level to a leadership level and received an A-minus score last year. We also use a lot of product labels, well-known product labels, to prove when our products are produced from, for example, renewable and recycled raw materials. The Q4 last year, so during the Q4 we renewed all our ISO certificates, and then we participated in a competition for the most sustainable product in Finland. We had two products in the competition: our Collect Slim sorting solution and our Pauliina flowerpot. And with the SmartStore Collect sorting solution, we were among the 16 finalists. And much more information about sustainability will come out during week 12 when we will publish our annual sustainability report. The third step in the strategy was to maintain a high innovation rate.
Here are a few examples of the launches that came out during 2023. So from the left, there is the SmartStore Collect Slim version of the sorting range, then the new SmartStore Collect Biow aste bin, then SmartStore Vision dry food containers, the round ones, and then our really high-quality SmartStore Bedroller . Much more is on the working table at the moment. Now I'll hand over to Alexander to continue with the rest of the strategy.
Thanks, Hanna. I'll jump quickly into the boxes one, two, and three in this strategy presentation. The building blocks for growth, and the first one is the solid action to keep winning in the Nordics. Just wanting to give you an example of how the shelves look like in Nordic stores. These are just a few of them, but it's clear that if the stores are well organized, if your brand is really visible both in the physical store and in the digital store, then you get noticed by the consumer and the customer. We are really happy to partner up with our customers to make sure that the shopper is interested and knows how, what, and when to buy products. Really a lot of effort going into this side of work.
Then if we look at action to keep winning in Europe, here are a few pictures and maybe also a few logos of big customers that we have acquired and where we have already quite a strong presence in store. And it's quite crucial that we do this work and that we help with the sell-out of products. I mean, selling in is one thing, but then getting the products to actually move out of the shelf, it's interesting for us and it's also interesting for our partners. And if we can prove a good development uplift both in value and in volume, then we hope that we are the preferred partner going forward. This is just a small sample of that. Then if we take the third box, which is accelerating the online retail distribution channel, here are some pictures, screenshots of how the web store can look like.
This is just an Amazon example where you can see that we're really using this environment to build the brand. If we want to look good in the physical store, we also want to look extremely good in the digital store. This channel is growing. It's not only the retailers which do pure e-com. It's also the normal customers who have a multi-channel approach where they have their stores and then they have their digital solutions or their internet stores. There we want to be the best partner to grow our categories together with our customers. This is also moving nicely ahead. This was just a small snapshot on the strategy we have and the boxes that we have decided to focus on. Now I will actually give Saara the word, and she will take us through a bit more of the financial details.
Thank you, Alexander. Our net sales during the last quarter were highest ever. We were able to make a record sales despite the challenging market condition in the consumer goods sector. Our net sales increased by 15%, and it was EUR 23.4 million. Last year we had some of the biggest customers limiting a bit their purchases. I mean, they were trying to decrease their inventory levels. This year the purchasing behavior in the big customers was normal, but we were also very active in campaigning and very visible in the stores. Our full year net sales were EUR 85.9 million, and growth was 2.3%. Weak currencies in Nordics were affecting the sales performance, and without currency effect, growth was 5.3%. That would have been in line with our financial targets.
The sales in the rest of the Europe group were 16.4%, and total growth outside Nordics was also in line with the financial target level. So it was double-digit and +11.2% compared to last year. Profitability continued to improve compared to last year. Adjusted EBITDA increased to EUR 2.9 million, and it was 12.4% compared to net sales. The profitability was driven by sales growth and more normalized commodity prices and leveling of the cost inflation in general. I mean, last year we had very high pallet costs and many other factors affecting the profitability on top of the raw material. But we also had a lot of marketing activities, sales and marketing activities, and that's visible in increased fixed costs. The full year EBITDA doubled both in absolute value and percentage-wise, and adjusted EBITDA was EUR 10.8 million and 12.7% compared to sales.
Now we are back on more normal levels in EBITDA after a very challenging 2022 level. I mean, that's due to lower raw material prices, which are now on the more normal level compared to long-term averages. But on the other hand, the weak currencies are affecting the profitability currently negatively. So Swedish and Norwegian krone has been weak during the year. Then we also received a EUR 700,000 subsidy for electricity costs in Sweden. Then the chart regarding the raw material price indexes. Prices have stabilized closer to long-term average levels and fluctuation is currently, I mean, normal fluctuation what we have on a yearly basis. The tension in the Middle East has continued, and that is keeping the uncertainty on a high level. But on the other hand, the demand in Europe is low in general, and polymer prices have been stable due to that.
Our investments were EUR 800,000 during the last quarter, so almost EUR 1 million less than last year. That's mainly a phasing thing. So some of the projects will land during the first quarter of 2024 instead of last quarter of 2023. And full year investments were EUR 2.6 million. Most of the investments were related to novelties and new product molds, and we are continuing to invest in novelties also during year 2024. Long-term investment plan is the same. So the idea is to invest on long-term 4%-5% compared to net sales. The net debt was EUR 22.3 million, and the leverage was 1.5. So from higher levels in 2022, it has stabilized back to 1.5 level. And on the next slide, we have the long-term financial targets. They are the same as before. So we are targeting yearly sales growth above 5%.
Without currency effect, we would have been on that level. After currency effect, the sales growth was 2.6% and outside Nordics 11.2%. So that's in line with the target. Profitability target is 18% as before. We were able to double the adjusted EBITDA and our current debt level of 12.7. Payout ratio of the dividends of the proposal for the annual general meeting is to distribute EUR 0.21 per share, so a bit more than 50%, 54.1% of the net sales. Here we have our financial releases for 2024. The timing is quite the same as before. So next time the release of quarter one will be 15th of May, then a bit after mid-August and in the middle of November. The company will publish our sustainability and annual report during week 12 in March. The Annual General Meeting will be held on 9th of April.
It will be a physical meeting here at the Espoo office. I will now hand over to Alexander to summarize the.
Thank you very much, Saara. It's quite easy and straightforward, especially the fourth quarter with record sales, I would say, recovering demand and then a very strong profit performance as well. Not much more to say than already what we have said. This actually opens the floor for any questions you might have.
Yes. There are questions in the chat. Let's start with sales and marketing costs. Why have the sales and marketing costs increased?
Good question. It's been a conscious decision during times when the consumer sits on his or her money to actually be more visible in the store and to push campaigns. We have given a lot of our customers the opportunity to do major campaigns with our products, and that can clearly be seen on the top line. In addition to this, we have strengthened the international organization with more resources, more people concentrating on sales. Yeah, we have done more of commercial activity, as you know, Hanna.
Yes. You've been very active. Okay. Then on the FX rates, how does the FX influence the results?
I can take that question. So Swedish krona and Norwegian krone were quite weak during the year, and to the sales, the effect was a bit more than EUR 2.4 million. So quite significant. We have, luckily, some natural hedging as we have two factories in Sweden. So that was sort of mitigating the effect, the net result. But it is unfortunately also quite significant. But I mean, less than half of that definitely is hitting to the bottom line.
Yes. Thanks, Saara. Next question is about the sales of the rest of the world. So what are your plans for the rest of the world going forward given the sales decline? Will you give up efforts there, and are there considerable costs related to the business?
Yeah, good question as well. And especially as you can see that the sales are fairly small. We are still selling to a lot of countries outside of Europe. We have one dominant customer, which is a big part of that sales. I would say the positive thing here is that we haven't put much effort into this area. We still have the business ongoing, and the margins and the conditions we use are such that we earn at least as much as we do in the other places we do business. So we are happy that it's ongoing, but let's concentrate on Europe. And then at some stage, it might be time to expand outside of Europe as well. So let the business grow.
Thanks, Alexander. Yes. Next question is about concentrating in Europe and European customers. So could you elaborate on new customer listings as well as expansion within existing European customers?
Yeah, happy to do so. That's clearly, let's say, in the main parts of our strategy and our sales strategy, when we develop our sales organization, when we develop our products, our branding is to make Europe into a home market for us. Clearly, part of that is to both gain new customers and also to expand in existing ones. I'm quite happy that we are present in quite a lot of the customers in Europe where we want to be. But we have to remember that the efforts to grow in Europe are fairly new. So many of these customer collaborations are still in early stages. I'm pretty sure that with existing customers, we can grow a lot by showing that our products sell out of the stores. We can widen the assortment. We can get into more stores.
We can grow internationally with customers who have shops in many countries. There's a lot of opportunities with what we already have landed. Of course, there's a lot of dream customers where we would love to have our products as well. We are working hard to get into the assortment of those customers. A big growth potential in Europe.
Thanks. Then about raw material prices, that's a must question every time. So raw material prices have recently been rather stable. Have you been able to hold up moderately increased prices, or is there downward pressure?
I don't know. Saara, do you want to comment on that one? Maybe we already said that the prices were stable. And of course, part of what we do is a long-term pricing strategy. So we are building a business which is sustainable both in terms of margins and prices, both for the customers and for ourselves. And we can see customer profits going up quite a lot in their annual reports. So I think the situation is quite interesting from many points of view. But the idea we have is, of course, to invest into building our brands, building our new products, etc. So I think everyone is happy if we can keep the price levels and invest back into the business for growth.
Yeah. Of course, I mean, with the current more normal price levels, we have a bit more room for campaigning. That is, of course, visible both in margins and especially in the sales growth.
Good point, Saara. Okay. Then about the campaigning that you mentioned, Saara. So there's a question about campaigning in Q4. So could you give us some insight on what's the level of campaign sales you did on Q4 compared to the comparison period?
We are not sort of publishing exact figures regarding the campaigning volumes, but it's been high. It's also the fact that last year we had slightly declining sales as some customers were limiting their purchases. But campaign pressure was visible throughout the Nordics and Europe, and sales were on the highest ever as stated. And that's driven by the campaigns, of course.
Okay. And then last question about capacity. So your sales increase seems to be very strong. So what kind of capacity or extra capacity and room for growth do you have left in your factories?
In that sense, the question is fairly nice because the more we grow, the more we need capacity. I believe that even if at some point there's not room in the current factories, we are more than happy to invest in more capacity either through more machines, more lines, etc. Then eventually probably as well through more buildings when that time comes. At the time being, we are able to supply the demand in the market, and we are able to cater for the growth. We can do quite a bit more with the structures we had before bigger investments need to be taken.
Thanks. I think that was a good question to end up the question session today.
Thank you very much, Hanna, for facilitating, and to all of you for listening in. Hope to see you in May for our Q1 presentations. Wishing you a nice beginning of spring.