Welcome to Robit's Q4 2021 and full-year 2021 results analyst and press conference. My name is Tommi Lehtonen, and I am Robit's CEO. I have here with me Arto Halonen, Robit's CFO, who will give one part of the presentation. Let's look at first Q4 full-year 2021 highlights. We had strong top-line development. We reached our internal key milestone, EUR 100 million in net sales during 2021. Also, excellent orders received development during Q4, so over EUR 30 million in orders and more than 3 0% orders received increase. Naturally, this gives us a good foundation to take the company forward during 2022. Looking at the freight costs and logistic challenges that we faced during 2021, freight costs impacted negatively our profitability development. Impact during Q4 was around 2 percentage points on EBITDA level from increased freight costs.
If you look at net working capital development, as we have communicated throughout 2021, we prioritized heavily our customer service levels and ensured availability to our customers throughout the year. This impacted negatively our net working capital levels, and right now we are changing our approach in relation to this and starting to drive these levels systematically down. We launched our ESG priorities September last year, and I will give you a little bit more details about this area later in the presentation. Our Top Hammer investments in Finland and Korea are progressing well. Some of these are already in production use, and they will be in full use early Q2. We continue to invest to our supply chain efficiency. One of the key actions ongoing, we are currently implementing new state-of-the-art tools for our availability management. Let's look at the financial highlights for 2021.
Again, strong growth with our Top Hammer business. This continues to be the trend, and we have a strong momentum with this business and also outlook is good. Down the Hole business, we actually saw negative development related to our Down the Hole project business during last year, and the mining related Down the Hole business was flat compared to previous years. Naturally, we are not happy with the top-line development of the Down the Hole area. Again, strong orders received, 13% increase year-on-year 202 1. So strong top-line development really we saw, and that development kind of even started to get stronger towards end of the year. EBITDA improvement continued 7.5% last year, and again, this was fairly heavily impacted by increases in the freight costs mainly. Q4 impact, as I already stated, was around the range of 2 percentage points at the EBITDA level.
Cash flow was -EUR 4.2 million, and naturally this was due to increases our inventories and receivables. As I stated earlier, we are already taking actions to turn around this development. Equity ratio is 42.2%, and Arto will give more details about our balance sheet in his part of the presentation. So strong sales quarter to close the year. Again, really strong growth on Top Hammer business, 41%. Comparison period was a bit soft, but anyway, of course, this is very strong growth for our Top Hammer business. Again, Down the Hole business, the same reasons I explained earlier for the full-year for Q4, and we saw 6% decline in this area. Orders received 30% increase is, of course, a real milestone for us and shows kind of a strong growth trend, and gives us a really good foundation for start of 2022. EBITDA during Q4 decreased to 6.3%.
I highlighted the 2% impact from the freight costs year-on-year. Arto will give a bit more details. There are some items that are influencing the result, let's say comparability between the quarters. Cash flow more or less slightly negative due to our net working capital increases, where we are now taking strong actions to turn that trend around. Let's look at the sales development per region. Really a great performance from our Americas region, over 40% growth year-on-year. North America actually over 50% growth. Really, we are now seeing many of our growth initiatives starting to deliver results, and we expect this strong trend to continue. Americas is really a key focus area for us for future growth as well. EMEA, good growth, 13%. We continue to see strong performance in Nordics and South Africa that have been strong areas for Robit already earlier.
Also, Middle East, strong performance. We start to see initial results from West Africa from our new distribution partners in West Africa. In this area, I expect to see good results already 2022. Australasia, fairly flat development and continues to be the area where we are focusing on turning really the trend, and we are behind our ambition levels still in Australasia. East saw fairly significant drop in the project part of the business. Demand related to some of our Down the Hole project business offering was very strong 2020, and we didn't see similar demand 2021. Drop is mainly related to that. Asia, we saw still first half some issues related to COVID restrictions. But in Asia, the trend started to clearly improve towards end of the year. The trend in Asia is looking clearly better for 2022.
As stated earlier, we launched our ESG initiatives during September, during our Capital Markets Day. "Your Partner for a Sustainable Tomorrow" is the theme. We have four main areas that we concentrate on. Sustainable partnerships. In our business model, partners are really important for us. We work a lot with subcontractors and our distribution partners. We look for long-term sustainable relationships, and that our partners commit to same sustainability targets with us. Of course, we focus on our direct CO2 emission reductions as a key target. Happy and healthy workplace, we want to be an excellent employer for our employees. E fficiency throughout the product life cycle, h ere we focus on helping our customers to be more efficient with their processes. These are the key focus areas for us. Here some results already for the areas that we launched September last year.
We are seeing good progress with this partnership area, and big number of our partners has already formally committed to our sustainability targets. CO2 emissions, we are early stages of this process and continue to work there. Happy and healthy workplace, our key metrics employee engagement survey result is fairly small decline, fairly flat. We are working with our employees to ensure that we are a good employer with many initiatives. LTIF, we ended up with 2.1 for 2021, and I'm happy to tell you that 2022, January, we reached a key milestone. Our LTIF is now zero. Efficiency throughout product life cycle, w aste recovery ratio is already on a good level, getting close to our target.
And then really a key area for us is this consultative sales training, where we train our peoples to train customers to operate more efficiently, which is impacting significantly the energy efficiency of our customers' operations. We see really good development here. We have recorded over 900 hours of sales training in this area. Now I move to Arto Halonen, who will give more details about our financials.
Thank you, Tommi. Key financials really developed positively in 2021. We grew 10%, and our EBITDA improved by EUR 2.5 million in 2021. As Tommi mentioned, quarter four net sales grew 11%, and in fixed currencies, 9%. The EBITDA was negatively impacted by the increases in the raw material and the logistics costs, and all in all, declined from the quarter four 2020 by 19.6%. However, it's worth noting that in quarter four 2020, we had a +EUR 0.5 million impact on the EBITDA from a remission of an R&D loan that we communicated already when the results were published for last year, the 2020. That affects a bit the comparability here. EBITDA for the quarter four was + 1.2%, and the full-year was 2.1% + EBITDA.
All in all, the result for the full-year 2021 was positive, and we are very pleased in that it was the first positive result since 2016, so c learly a kind of a year of a turnaround in that respect as well. Net working capital grew in 2021, as has been discussed. EUR 8.7 million of the increase came from inventories, and it was affected on our decisions to focus on availability, prioritize good customer service levels, but also the logistics challenges in the world market. All in all, in many places, we are seeing two- to five-week delays, for example, in the sea shipments. Those are then directly impacting on the, let's say, money tied into the inventories as a lot of our goods move on ocean freight. Receivables increased to EUR 25.3 million as a result of strong sales, especially towards the end of the year.
This will be a focus area, as Tommi said, in 2022. We have several actions to tackle net working capital. We will reduce the number of SKUs, both by stocking decisions as well as focusing on offering rationalization, harmonization. We will also increase the share of direct factory deliveries to our distributors and customers, and therefore reducing the need to carry regional stock in our sales entities. We are also doing a review on all the payment terms, supplier and customer payment terms, and see if there are some actions that need to be implemented on that front. All in all, there is going to be a tight management control on this matter in 2022. Cash flow improved before changes in net working capital. As a result of the net working capital increase, the operating cash flow was negative. Cash flow from investing activities was EUR 3.9 million.
All in all, if we factor in also those investments that we financed with financing leases, our investments last year were EUR 5.9 million and, as been communicated, focused on increasing primarily our Top Hammer capacity in the Finland and Korea factories. All of the investments will be commissioned latest during this quarter, quarter one, and some of the capacity already was ramped up in the quarter four. Cash flow before changes in working capital, you see here it's been now developing all in all for the year positively, now stabilized a bit. Obviously through our profitability improvement actions, we will focus to improve this as well. The rolling 12 months cash flow from operating activities, turned negative now that the strong quarter four 2020 dropped out of this. Clearly a focus area for us in this year on the net working capital side.
Cash and cash equivalents at the end of the year, EUR 9.5 million, and the total interest-bearing loans EUR 41.5 million. Out of that, EUR 7.7 million IFRS 16 liabilities. The increase on the IFRS 16 liabilities is coming from this financing of the new investments that we have, mainly from that area. Net debt increased to EUR 32 million. The investments that were primarily geared towards the latter part of the year impacted on that, as well as the cash flow development impacting on the growth in the net debt. Equity ratio, 42.2%, as Tommi mentioned earlier.
All in all, loans from financial institutions is EUR 30.4 million. As we have communicated already during 2021, we signed a new financial agreement in June for EUR 30 million. Out of that, we have still EUR 3.5 million that remains to be raised at later stages. We have loan amortization biannually, EUR 1.5 million, and then we made also in December 2021, we made amortization of EUR 1.5 million.
Thank you, Arto. Let's look at outlook and a bit forward. As a reminder, our Robit's long-term financial targets, 15% organic growth and 13% EBITDA. At the bottom there, you can see our track record, which we are steadily developing towards our targets. So 2021, 10% growth and a 7.5% EBITDA. Guidance, we don't see that COVID-19 has any major impact to our business during this year, and we guide that our net sales for 2022 will grow, and comparable EBITDA profitability in euros will improve compared to previous year, assuming that there is no significant changes in exchange rates. Naturally, we expect the positive trend to continue, and as such, we want to speed up the development and are impatiently pushing towards our strategic targets. Now, headline profitable growth focus. Clearly, we are adjusting our focus from previous year towards this headline.
To start with, we still have very good top-line leverage for our EBITDA performance. As we have communicated earlier, we can grow with limited increases in our fixed cost structure. Actually, if you look at our track record on this area, you can see that our productivity metrics in this area has continued to trend towards positive direction, and continue to do so. Naturally, the sales development is key to us, and we are positive that we see growth again during this year. We have done price increases. Our target is that the price increases will mitigate the impact from our material cost inflation. We did first round of price increases during mid last year. We did a second round end of this year, and we continue to do one-off changes in the areas where we see need for improvement continuously.
Price increase focus is very strong at the moment. Again, we have communicated our initiatives related to sourcing from cost-competitive countries and improving our competitiveness with more competitive material sources moving forward. This initiative is moving ahead, and we expect to see around 2% + EBITDA impact from these actions during this year. As stated multiple times, this is a year of taking a very strict approach related to our net working capital levels, and we target maximum 40% net working capital level in relation to net sales. There are several actions ongoing related to this area. I'd like to highlight a few of those. Of course, debottlenecking our supply chain related Top Hammer will help us to reduce inventory levels. When we get the lead times to our target levels, it will allow us to lower inventory levels.
As Arto already mentioned, we have strong initiatives to narrow down our active offering, so all of our businesses are already moving ahead with offering rationalization programs. That will reduce the number of stockable items that we carry. Additionally, we have very strict controls and targets for Robit entities for this year, where we are driving per entity receivables and inventories towards our targets. So we will drive the net working capital levels clearly down in relation to net sales this year. ESG initiatives, they are already part of our daily lives and decision-making, and continue to develop this part. We are really happy that our employees are engaged with these initiatives and actively participating to improve this area of Robit.
As a summary, we have good top-line development. Always, good growth gives you a good environment to continue to develop the company towards the strategic targets, and with focus on clear initiatives to drive relative performance towards our targets, and this year at the same time, with tight net working capital control driving positive cash flow. We will take another step towards our long-term targets. Now it's time to move to the questions and answers part of our event, and please go ahead.
Hi, it is Erkki from Inderes. A couple of questions from me. First, about your materials and services were 67% of sales in Q4 . It's normally around 64% or 65%. Can you tell us what was the division between the material cost impact and the freight cost impact in there?
Arto, will you take that?
Yeah. If you take the kind of change from a typical level that we have there, you could say that on that line, we show there our purchase freights. The impact from freights is a bit more than 1 percentage point, and that's coming there on the freights. Yeah.
The rest is from materials?
The rest is from materials, yes.
Coming still back to the freight costs, you suffered both from freight price increases and, I would say, more expensive freight mix, as you said, the air freight, et cetera. What is the outlook now as the, for instance, Baltic Dry Index has come down 50% since last quarter of last year?
Yeah, if you think kind of for us, the freight from Asia out is a fairly big part of our freight cost, as Korea is one of our major supply hubs. I think as we see it today, still, the freight costs in today's environment, all in all, continue to be at high level. But as said, we have operational actions that we can implement and we can impact on regardless of what is the general market level.
For example, mentioned these direct shipments that we don't do two sets of transportations, we do only one, impacting naturally the kind of the transportation cost in the total chain, but also the inventory levels and also optimizing the fill rates of the containers and so forth. There are operational actions we can also take. Generally, still what we see is in today's market, the freight cost all in all remain to be at a high level, and let's see what the development is during 2022.
I'd like to add that we still see that during Q1, we will see continuing challenges in this area.
Okay, thank you.
I can take next one. [Nick Rogov] from SEB. Your Top Hammer growth was really good during this quarter. Is it driven by new distribution contracts, or did you have any individual clients that affected it a lot?
It is coming from many locations. It is a combination of many things. I would say the main driver of our Top Hammer business last year and during last few years actually have been mining industry and underground mining. Some of these contracts have been won directly by Robit and some together with our distribution partners. It is a combination of things. These contracts we are winning really globally from all over the world. I cannot pinpoint one specific country. Overall, we are really happy with the Top Hammer business development, which we see that it will continue strong also this year.
Okay, great. Thank you. Then another question on the Down the Hole segment. What is the outlook for this segment for the next year? Do you have any high individual projects in the comparable numbers for next year? What is your target level for next year?
Yeah, naturally, we are working hard to really drive this business also towards double-digit growth numbers and towards our strategic growth targets, and certainly we are committed to that. If you talk about the project part of business that has some natural fluctuation, we see that the year outlook is decent in that area, that we see fairly positive demand on that project Down the Hole construction-related project business.
Okay, thank you. Last from me. Could you open up a little bit more on the net working capital increase? How much did it come from increasing the buffers to service your client and manage the supply chain issues, and how much from all the other actions?
I would say there was a major impact from what Arto described earlier, that when the ocean sea freights lead times are two to four weeks longer. Basically, already you can calculate mathematically the impact almost from Top Hammer that that development had. At the same time, yes, we had more buffers basically in every stage of the funnel because of the supply chain constraints. There was more safety buffers at the sales entities and so on, when the lead times for logistics were uncertain. Now we maybe start to learn more of the ways how to manage this situation and can optimize those levels better.
Yes. Thank you.
Still coming back to the pricing dynamics and management. The lead times from material price increases to your own product price increases. How actively do you currently update your pricing lists? You said that you raised prices twice last year, but are you more active these days?
Yeah. We have big price increase programs that are global, where we implement globally targeted price increases impacts mid-year and end of the year. But we are continuously looking at then smaller areas, for example, areas where we are not satisfied with the profitability levels, and we do case-specific increases towards those. At the moment, the idea is that, of course, our Top Hammer business is developing so favorably that we want to ensure that we also capture the whole value from our offering.
Okay. Another issue. On top of my head, you are planning more geographical expansion. You talked about West Africa, but what has happened in, for instance, Kazakhstan, Malaysia, countries like that?
Malaysia, it is a construction-focused country. As a market, the potential is fair, but not huge. There, our new distributor has started up well and just placed a fair size stock order January this year, and that is bringing growth to us. West Africa is a significant growth opportunity for us and a very large size mining market. Our strong partners, BIA and APT, the work with them is moving ahead with systematic steps, and we are confident that that area will deliver this year growth and also growth during coming years. Kazakhstan, sorry. You were mentioning—
Yeah.
Sorry, I missed you. Kazakhstan, we have a new Eurasian Machinery that we signed last year, and again, they have now become operational related to our business, have stocked our products and placed stock orders already, and that is also moving ahead. As we closed, as you know, our own offices in Kazakhstan last year.
[Nick Rogov] from SEB. I can take one more question then. Could you remind us how much investment needs do you have for the next two coming years?
Arto, would you take that?
Yeah. Generally, we say that investments needs for this year, for next year, they will be lower than our depreciation. I think what we saw now this year, or last year, sorry, 2021, I think that is a notch higher than we expect to see this year and then in 2023.
Okay, thanks.
Just a housekeeping question. You talked about the competitive sourcing that is moving ahead. Did you say that you expect 2 percentage points EBITDA margin impact in 2022?
Yes.
L ast year.
Targeting that level in savings impact. Yes, I expect it.
Sounds pretty good. If no one else is posing any questions, I will still ask about new customer openings. Are there any that you could name or hint to?
Yeah, I don't want to name customer names, specific names, but obviously, it is a continuous process for us and our sales funnel remains at a good level and we have good customer project activity. We expect the kind of the momentum to continue. Of course, we are working hard to really turn this Down the Hole trend around, and we have specific actions related to that trend. Of course, our expectation is that we see that trend changing already this year. Okay. Any more questions from the audience here? Okay. Thank you all. Thank you for the participation, and see you again when we come out with our Q1 results. Thank you all. Bye.