Welcome to Kitron's Second Quarter 2022 and Half -Year Report. I'm Peter Nilsson, CEO of the Kitron Group, and joining me today is Miss Cathrin Nylander, CFO. I'd like to remind you that we have a short Q&A directly after the presentation, so please post any questions you may have in the Q&A section of the webcast. Thank you. Let's kick off the review. Some of the highlights in the quarter. Revenue in the quarter was record high, reaching close to NOK 1.6 billion, with a growth of close to 60% compared to the previous year. The NOK 1.6 billion of sales generated over NOK 100 million in operating profits.
EBIT margins showed strong improvement compared to the first quarter, 2022, but continue to be under pressure from cost increases and some inefficiencies driven by uneven incoming supply chain. Order levels continue very strong for 2022 and 2023. This has led to an increase of inventories and affected cash flow. We expect the reduction of net working capital as a percentage of revenue as improvement programs deliver further efficiencies. Next slide, please. Slide three. Taking a look at the market of operations, as I said, demand continues to be very strong in all market sectors. The main drivers are market sectors, connectivity, electrification, and industry.
The expected improvements in the component market deliveries over the rest of the year have led to a more favorable outlook on the introduction and ramp-up of several projects within Power Grid Technology, e-Mobility Solutions, Energy Storage, Heating and Ventilation Solutions, and Smart Home Technologies. Currently, the top 10 customers, measured as forward-looking 12-month demand, amount to NOK 3 billion. On average, their growth is over 50% year-on-year. Now I'd like to turn the mic over to Cathrin Nylander, CFO. Next slide, please. Slide four.
Thank you, Peter. Now to the revenue. In summary, I said in total for the quarter, we had a growth of 59%. The growth like for like, as if we had owned BB last year as well, is 28%, and the organic growth about 2%. However, if we compare to last quarter, which makes more sense, revenue is up 11% with a growth of over 20% for Connectivity and Medical Devices, and just under 20% for Industry. Connectivity and Industry currently, are the distinctly largest sectors and strong growing. We have grown more than we expected in the first half of 2022. For Electrification, we have supply interruptions on some larger programs that have affected the quarter.
Medical Devices are normally quite stable volumes. The increase in the quarter is some catching up on deliveries. Defense, which is quite slow-moving in that sense, has some development as the result of some supply-related difficulties, which we hope to soon have cleared out. Slide five, please. Business sectors. BB, our recent acquisition, has delivered revenue, profits, and profit margin higher than planned. They have strong growing customers and have been able to source the necessary material to deliver on the growth. Revenue grew 11% from last quarter. All business sectors had good growth, 7% in the Nordics, 10% in the CEE, and 17% in the rest of the world, which contains U.S. and China.
The EBIT margin compared to last quarter increased to 6.3% from 5.5% last quarter. EBIT margin for the Nordics ended at 6.4%, down from 6.7% last quarter. This is mainly a result of some disruptions in supply chain. CEE ended at 7.5% EBIT margin, a good improvement from 6.6% last quarter. The rest of the world improved to 6.6% from 5.3% last quarter. Energy cost and some currency has affected the results in the quarter, but has been partly compensated for by price increases. I also have to say that we had a strong finish to the quarter, improving month by month. In summary, the EBIT margin is improved from preceding quarters, but still affected by cost increases and efficiencies.
As for the employees, in total, 2,812 is up some 24 employees from last quarter. We see a buildup, particularly in the CEE, in preparation of the fall. I also have to comment that number of FTEs are adjusted continuously based on the load of the facilities. Slide six, please. Cash flow and net working capital. Although net working capital has increased in the quarter, operating cash flow ended at a positive NOK 21.7 million, compared to a positive NOK 109 million last year. Compared to previous quarters, it's a stabilization. Further improvements are expected as improvement programs deliver on advancements in supply chain resource management, cash, and deliverables.
The buildup of working capital is due to delays in material but to a larger extent has been compensated for by customer deposits and consigned material by the customers. As mentioned, in addition to the inventory we carry in our books, off our books, we are carrying several hundred million of inventory of our customers. Finally, the acquisition of BB was finalized very early in January. Net payment was NOK 878 million, partially financed by the share issue made late December 2021 of NOK 340 million, and the remainder loan, which is NOK 500 million, a term loan in euro over five years.
Next slide, seven, please. Ratios. Positive development in the key ratios. The three main capital efficiency ratios, net working capital as a percentage of sales, return on operating capital, and cash conversion cycle, see improvement the last three quarters, although there is a decline compared to the comparable period last year, which was the last quarter before the material inflation really started to show. Net interest-bearing debt to EBITDA increased to 3.6 from 1.7 same quarter last year, and slightly up from 3.5 last quarter. The net debt ended at NOK 1.768 million, up from NOK 1.613 million last quarter. The net debt development follows the increase in EBITDA, and hence the ratio has been fairly stable.
Equity as a percentage at 24%, affected by the net working capital development. Just as a reminder, we had the share capital issue in Q4, and we had the acquisition of BB in Q1, so it increased the balance sheet in Q1. Covenants in Kitron are now based on loan to value and net interest-bearing debt over EBITDA. Finally, earnings per share increase compared to last year, an increase of 22% in the quarter and 8% year -to -date. Next slide, please. Slide eight, and over to you, Peter.
Thank you, Cathrin. Before we review the outlook, I'd like to again remind you about the Q&A session just right after this next section. Go ahead and post any questions you may have. Now let's start with the customer demand outlook and order backlogs. Next , slide nine please. To give a more complete development over the next 12 months, let's review the outlook from two angles. First, we have the 12-month forward-looking customer demand. As lead times are extended in the market, it's more relevant to look at the R12 to understand the trends for the immediate future. As you can see, the 12-month forward-looking customer demand is NOK 7.1 billion, with a growth of 80%.
On a pro forma basis, like for like, the projected growth is 33%. Secondly, the order backlog containing all firm orders, but only the first four months of customer forecast, grows from NOK 2.3 billion to NOK 4.9 billion, a growth of more than 100%. Many of you are interested in how Defense and Aerospace is developing. Let me tell you, many customers want deliveries as soon as possible. In fact, several are prepared to take the entire order book immediately. We're comfortable in raising our growth outlook from previous annual growth rate of about 5%- 15% for existing programs. In addition, we're working on several new opportunities. This 15% annual growth rate is not for next year.
It's the annual growth rate for the coming five years. That's our best current review and outlook. Next slide, please. Slide 10. The outlook. While the supply chain delays have improved during the second quarter, contributing to our record revenues and our positive margin trend compared to the first quarter, we expect continued improvement over the rest of the year, leading to a more favorable outlook on several product introductions and ramp-ups. For 2022, we previously indicated a revenue of between NOK 5.2 billion and NOK 5.8 billion and an operating profit between NOK 330 million and NOK 430 million. Now entering the second half of 2022, we see strong demand from customers and continued ease of supply constraints.
Profitability is improving compared to the first quarter when rapid cost increases challenged us. We therefore raise our revenue outlook to between NOK 5.7 billion and NOK 6.1 billion. Operating profit is expected to be between NOK 330 million and NOK 400 million. Next slide, please. Some of the key takeaways. While customers continue to communicate growth for 2022 and throughout 2025, the order backlog and the 12-month forward-looking demand supports continued strong growth. In addition, new programs are being introduced to solidify and increase opportunities within strategic market sectors. The revenue outlook is increased. Next slide, please. Slide 12.
Again, reminding you to put any questions into the Q&A section, and we're gonna wait for about a minute here to make sure that the questions come through. Cathrin, as we wait for the questions to come in, you've been leading much of the integration work between the original Kitron Group and BB Electronics.
Yeah, I've been working on the phase, the first phase, yes, which is a lot about integrating bank facilities, insurance, reporting, also sustainability actions, making sure that we're aligned because we will be talking about that as a group for next year. We see some effects of that already. In addition, there is work going on between the supply chain and sales, where they've been working on the same type of procedures with the customers and customer processes and also aligning on the supply chain contracts that we have. Unfortunately, you know, the lead times are very, very long, so I think they're still working out their old contracts basically.
We're not seeing the savings realized yet.
No. No, we can't see them realized because of that.
Okay. Well, let's jump into some questions. The first one is have you thought about buying back shares? Or what are our thoughts when it comes to share buyback?
I think we have to be in a lot stronger cash position to start with that, basically. We're now at a net interest-bearing debt to EBITDA of 3.5x, where the bank wants us to be over the longer term. We have a higher covenant right now, so I think we need to have a stronger cash position before we can think about those things, basically and our target over time is to be below 2.5x, at least.
I can take the next one. Karl-Jørgen Flun, "Are there any one-offs included in the other losses of item NOK 9 million in the P&L?"
The NOK 9 million is all revaluation effects that has been done in the quarter. Normally, over a year, they go a bit up and down in the quarter, and this one is the result of the strong change or late change in the dollar in the quarter. They normally reverse and, like last year, we had in total about NOK 3 million at the end of the year. It's revaluation of balance sheet, typically. There is no one-off that is sort of one cost. It's more of a reversible item, I would say. Peter?
Question we have here is on the defense sector. What's our current growth in this sector, and how do margins compare to the group average? What is Kitron's global share, market share in this sector? What is the competitive environment in this sector?
That's a lot of questions. Let's just say that normally, the growth rate that we've been expecting is around 3%-5%. That's been our normal growth rate year-over-year. Between quarters, it tends to vary a lot because many of these defense orders are project related for specific markets, for specific customers. It's seldom an even flow. The most even flow we have probably is on some of the aerospace programs where there's a build schedule for many years. From that point of view, I'll just answer it the way I did during the presentation, 3%-5% is our normal expectation. We're raising it now to about 15% year-over-year for the coming years.
Our global market share is tiny, right? Barely measurable. If we're talking about the NOK 1 billion that we have in the rolling 12 demand outlook right now, that's barely measurable when you look at the global part. When you look at regional, I'd say, we're the number one player in Sweden, we're the number one player in Norway. Meaning we have somewhere north of 70% of available market from the customers. That's my best guess, really.
What is the current footprint utilization? How does that vary between regions?
We currently have pretty good utilization. We have some spare capacity in China. We have added additional footprint to be able to capture very quickly and grow. There's some footprint available there. We have the new site that we put in place in Poland, still under ramp-up. When you walk into it, you'd probably only see about 30% utilization, but all that capacity is booked up for the next nine to 12 months. That site will be completely full. We're full basically at all the other sites. All other sites are looking for how do we increase efficiency and footprint efficiency, meaning how do we redesign production flows and work with automation and things like that to be able to get even more revenue out per square meter.
I think when I look at the industry average here, and there are averages for small companies and medium-sized companies and large companies, and in this context, Kitron's a medium-sized company. On invoicing per square meter, we are well above the industry standard. We're already efficient, but I believe we can do a lot more.
Any update on European expansion, capacity expansion plans earmarked for 2023-2024, size and estimated cost?
Yes, we're probably gonna double our site in Poland. Decisions to be made during beginning probably of next year to be able to get that capacity in place by late 2023, early 2024. It's probably 88,500 sq m additional footprint.
The estimated cost, what do we think ?
It's the hardware that goes into the factory really. Since this is a leased facility, the new lease will come in on top of the existing one. We have a competitive rates on our lease costs, so. The cost for it will be, well, what we normally invest in line with revenue, right? We don't have any spare equipment sitting around at any point in time, so we continuously invest. We don't speak publicly so much about every individual investment we do, but it's, you know, 2%-3% per year of top line.
Are we experiencing any challenges in the recruiting process? If so, in which region? What's the wage inflation currently?
I think the wages are okay in the Nordics. You know, the contracts and agreements are negotiated more on an annual or biannual basis, so it's more or less under control. Costs are increasing in Central and Eastern Europe, definitely, as many others are attesting. We've tried to not be the leader in increasing those costs, so I think we're fairly modest compared to many other industries, especially the OEMs. The EMSs try to be more cost-cautious. It's different by nation. Looking at the Baltics, there's a huge wage inflation, but I don't want to speak to exactly how much we're raising our salaries. We're below market, significantly below market. Let's move on to Frank.
To what extent was the recent USD strengthening played a role in our outlook update?
Cathrin, what do you think? It's not something we've talked about.
Not very much actually. It's not the major point in the update. Yes, there is some currency calculations in there, but it's not.
Most of the data is from early June where we really had the rise in the U.S, dollar towards the end of June and beginning of July. Yeah, I mean, if you want to, you could consider that to be an upside. On the other hand, who's to say where the dollar versus kroner or dollar versus euro will be in Q3 and Q4? I think we always try to take the conservative approach on currency development.
You say you expect improved profitability in second half. Still you lower the EBIT outlook midpoint. Can you help us understand the mechanism here?
Well, I'd say that I like to say that the first quarter was not a lost quarter, but we underperformed according to our expectations in the first quarter. Very rapid cost increases. Usually we compensate and raise our prices once per quarter. We did that in beginning of January, and then the cost ran away from us. During January, with a lot of energy cost increases in the beginning of the quarter, and then other costs starting to take off. Now, all of that was reviewed again and implemented in April, and now again, we've done the same thing for July. That lost earnings in Q1 pressures us for the rest of the year.
Our planned EBIT margin for the midpoint guidance for H2 is higher than the EBIT margin that is for the first half or higher.
We have probably the same question from Morten also. Can you elaborate why the 2022 guidance on the EBIT is lowered?
I think there was a lot of optimism when the target was set for the top end of that EBIT guidance. The market has not supported.
We come to Petter. Wow . Petter, you have a short memory, can you tell me the difference between like for like and organic?
Well, organic would be, just Kitron. Just Kitron year -over -year. Like for like is the pro forma with had we done the acquisition a year earlier? That would be like for like. I hope that clears it up. Then there's just where we are today. Usually the highest growth or the highest something will be where we are today. Organic will be lower. Like for like will be in between when we look at key ratios.
Backlog. How long is the duration of the majority on the order backlog, and has that changed since first quarter of 2022?
There's been some change on it. Some of the big customers that have had difficulty during the first and second quarter on supply chain have tried to secure by placing orders for the full year next year. Previously, they would have had orders for maybe four to five months, and then forecast for another 12 months on top of that, bringing the total window to about 18 months. Now they're trying to keep a window between, let's say, 18 and 24 months. Right. That's where they try to keep their window. Not that they place orders for 24 months out, but some of the big customers have placed orders for the next 18 months. Yes, that drives a little bit, but it's those numbers we see anyway in our forecast, so I feel pretty comfortable with it.
How should we view the total demand backlog and revenue recognition compared to each other, and what segments contribute to the total demand?
Well, the total demand is what our customers are telling us for the next 12 or 24 months. That includes all forecast on top of whatever they have on order. When we talk about total demand, it's limited for the next 12 months. It's not beyond that. We're looking for sort of a rolling year forward. In there is past due or replanned backlog, not as a big lump sum, but as material becomes available. Which means we could have things that we didn't deliver in the second quarter, but they've been replanned to Q4 next year. Theoretically possible. It's not like we're pushing a big mountain ahead of us. Tried to put a schedule in place which reflects where we think the component market is going.
What segments contribute to the growth?
Well, I spoke to that earlier in the presentation. So far this year, if we look at what we've done in the first half of the year, Connectivity most definitely is the big driver. Why? Because Connectivity, traditionally, has several product life cycles a year. It tends to be more modern equipment. It tends to be more modern components. It's easier to source. It's easier to redesign the product for whatever parts are available. The most difficult products to do that with are Defense, Aerospace, and Medical because of certifications and lengthy validations of those products. Usually you don't even do redesign, or you do it when you have to, absolutely have to.
Looking at the next 12 months, Electrification is going to be a big driver, as is Industry. Industry driven by automation and some Smart Home Technology, other type of sustainable products that supports sustainable energy. As well as within Electrification, the power grid products are loosening up on the supply chain part. Those will be introduced. We're already now into the third round of prototyping on e-Mobility Solutions. That'll ramp up during the third and fourth quarter and go into real high volume next year. Yeah, I think I touched upon those things, so.
Working capital. How do you talk about improvements expected in the second half. Are you talking about relative to sales or in absolute figures? Why don't you talk, Cathrin, a little bit?
I would say definitely in relative compared to sales, and we're working hard to get it down too. The first, absolutely, and the second, hopefully.
The problem, it's not a problem, right? The challenge is there's growth. Right? Growth is driving more material, more components coming in. We need to be sort of balanced that all the time. There's the guidance and the midpoint, EBIT.
There's a question, is this because of lower gross margin from buying components in the spot market?
There's a bit of that going on. Right? Primarily, I'd say a big difference has been from Q1. There is a bit of conservative outlook also in regards to what you're talking about with price increases and spot market buys, where margins tend to be much lower than normal.
When do we expect to be below 2.5 x on net interest-bearing debt over EBITDA?
It's hard to expect exactly, but I would say second half next year.
We'll hold you to that.
Thank you.
That's been documented now.
Yeah. Strangely to the wolf.
Finally, if all plants are at full capacity that you can deliver over time, what is the revenue potential in the existing footprint? I think we've answered this question many times before. We've said that all of our sites can deliver EUR 100 million. Not so probably in the Czech Republic. That site is too small, as is the site in Denmark. I think we've said that we have capacity for our strategic plan. The issue becomes where do customers want to be, right? They may not necessarily want to grow where we have capacity. We're extending some capacity now. I said we're extending in Poland.
We're starting to offer in India through the facility we put together with BB earlier this year. It's a small startup still. There's still no production going on there and not any cost to speak of either. It's getting ready to roll out and grow also.
We'll expand capacity where needed, right?
We do that continuously. We're probably gonna be where we are and over the next 24 months, I don't see us going into a region or a place where we're not based today.
Yeah, we have about an hour's worth of questions here today, so.
Yeah. That's good.
Good to hear from Johannes that supply issues are easing. You've got your guidance on EBIT margins around 6%. What should we think about the path going into 2023? I mean, yeah, not gonna swear on anything, but I'm not happy until we're somewhere between 7% and 8%.
I see the potential for that. I see many of our companies delivering in that region today or above. Then we have some stragglers that are not performing to that level, and we need to make sure that we can get them there also.
In order to meet order backlog, are you considering increasing production lines?
Well, yes. I mean, we do that continuously. There'll be another couple of lines over the next 18 months installed into Poland. Over the next six months probably, there'll be one more line installed there. In the Nordics, it'll be more of increasing the shifts. We still have available shifts in the Nordics. Or putting one or more machines into an existing line, thereby increasing capacity also. Again, it's all part of investment versus revenue, the 2%-3% that we normally do.
Ben asks about our outlook for EBIT is unchanged despite higher growth. Can you disclose the margin drivers for this year?
Is that so, Peter, when we've been through almost every EMS company and we're struggling a bit. Everybody's about 1% slower than they were expecting or have been before, and so are we. I think the major point here is the inefficiency that we suffer from, basically, when we can't steer the production the way we want. When it comes to that, basically a comparison to last year. If you look into the general going forward, we should see slightly less inefficiencies in the second half than in the first half. Also we have increased energy costs and some currency deviations, which we think that we will have.
Probably the energy cost we think will stay in our expectations going into second half of this year. Then we have some currency deviations. We think that they will probably end up slightly more positive than in the first half.
What's our five-year revenue growth target?
Yeah, we never said it.
We never, so I can't repeat because we've never said it.
No. We've always talked about the 10% annual growth. We will come back to the more certain numbers when we see the outcome of this year and how we will be managing. The demand is there definitely, and we hope to be able to deliver on it going forward.
Vincent has several questions.
Yeah, I think I answered the first one now before.
The strong outlook on Defense, Aerospace. What's the impact on profitability due to mix? What can one expect?
Usually we're a couple of percentage points higher. Basically all Defense, Aerospace is in our Nordics. Either Denmark, Sweden, or Norway. So that'd be a strong contributing factor to success for those facilities. They're running a little bit lower than the others right now, so. I don't want to get into details here.
Energy cost and percentage of sales last year, and what was it in Q2 2022? Where do you use natural gas?
Not so much natural gas. I would say the energy costs in China and in the U.S. have not changed that much, first of all. Where we've had energy cost changes have been in Sweden, Norway, Lithuania, and Poland, and some in Czech, not so much. If we start with Sweden, I'm not gonna give a number, but if I look into rent and facility costs that we have, basically include the expenses for energy. It's about 0.9% last year and this year too, so they're about the same. They haven't changed that much, but top line has increased as well. We use, in Sweden and in Denmark, we have district heating, which helps with the cost in total. I don't know that we use any natural gas of any scale at all, honestly.
I think the biggest has been in Norway. After that we talk. It'll be Lithuania and Poland. We have the numbers reported by site. It's just we don't have them in front of us now.
Finally , with third price hikes in the beginning of July. I mean, I don't wanna talk about price hikes, right?
We review the price and cost, and we review the price every quarter, and we've always done that. Some products theoretically could be cheaper, lower price. Some will go up. Most likely, most will go up now.
Do you think to offset negative cumulative effect of price inflation for 2022?
I mean, I'd like to do that, but it's a matter of negotiation with customers also. Every cost, we have open book policy, so every cost has to be proven.
Bobby asks us to comment on 2022 margin. I think we've commented on the EBIT margin there. The margin improvements for 2023 from the defense industry. Yes, we expect that. I'm not gonna talk about specifics.
More broadly, there seems to be positive trends in the short term. What keeps you up at night? What developments could significantly affect 2023 and beyond in a negative way? Not much keeps me up at night. I sleep like a baby for at least four or five hours.
But what do we think about? Well, we think about, you know, what's happening with interest rates. How is that going to help me? How does that affect the general economy? What is the ECB going to do? There's a lot of speculation ECB is not gonna let the economy crash in Europe. They're not gonna increase interest rates as rapidly as maybe some of the Nordic countries have done. We'll see what happens on that, but that's a concern, how interest rates will affect investments in general, in Europe. Remember, even if a lot of the products we build are business to business, many of those businesses are small businesses and they don't do well with high interest.
So that's a concern. We don't see much of it now, but it could be something that trends in. I think we have so many opportunities when we look at next year that we're not too concerned even if something turns south in the general economy. I think we're still well positioned to grow within those market sectors that I've spoken about.
Okay, let me see. Do you evaluate M&A? Do you say something about multiples at the moment? Have multiples come down? We've seen a couple of deals go through.
Some large one too, I think.
Yeah. We saw the GPV/Enics, which is one of the bigger deals valued at about EUR 1.8 billion or so. I don't think so. It was a euro value. Think about EUR 60 million cash and EUR 120 million in equity. That was a big one. I'm not sure what the multiples were on that. I mean, I have calculated them myself. They looked reasonable, to what extent I know. I thought they looked reasonable. I would expect some multiples to come down, especially on small acquisitions, because smaller companies now, they are struggling when it comes to carrying a lot of inventory and the customers may be pressuring them on payment terms and other things like that.
On the small side, on the sell side, there's a lot of small stuff out there, and we're not really that interested in that. I've looked at probably 24 deals over the past four months. Much of it is too small for us to get involved with. We continuously look at it.
What are our expectations on net working capital when they are normalized? I think you addressed that, Cathrin. Petter, any more dividend this year? No. We paid dividend already this year. There's only one dividend payment.
This year. We had two the year before. Again, the same answer. We are at net interest-bearing debt to EBITDA at 3.5xx. We wanna grow, so we need to make sure that we gain as much cash as we can in the company in the next six months to make that happen.
I mean, it's put to the general assembly in April each year, right?
Yeah.
Only one decision point so.
We can have an extraordinary, but it's not the time and the moment for it, I think.
Do we expect margins to continue to improve, and do we expect them to be steady going into 2023 despite high growth? Yes, I expect them to improve. Yes, I expect them to be steady and continue to improve into 2023. Are there risks? Probably, right? You know, when you grow, are we able to keep control? Are we able to execute every plan on time? I'm specifically speaking about the Polish facility where we will see tremendous growth over the next 36 months. But we have a really, really strong team there. They're allowed to add more to their team if they want to, if they need to.
We've done that for the first six months, thereof a lower profitability from the Polish side than the budget, and I'm perfectly okay with that, because this is an investment into next year. Yeah, my answer is yes, I expect profits to improve and profitability to improve.
Emil says, "Congrats to the great Q2. How much are you growing versus competition, and who do you see as your strongest competitor in the Nordics?" I did a pretty substantial review of basically all listed EMS companies that I could find, and I don't know if there was very many. I'd say the growth varies between negative growth to growths of 50% or so with acquisitions. Organic, it seems to be somewhere around 20% growth. Again, some of that growth or a lot of that growth, depending on who the competitor is maybe due to a lot of spot buys.
Increased material prices, which has driven down margins, and we saw that in the first quarter. It'll be interesting to see. I think we're one of the first out to report this quarter for the second quarter, and it'll be interesting to see what the competition are doing.
Who's our strongest competitor? Scanfil, Zollner, privately held German company, KATEK, listed in Germany. Those are some of the ones we meet on the typical size of contracts that we quote on.
You could add Plexus and Fideltronik too, to the list.
Yeah, yeah.
Labor in the Eastern Europe.
American Plexus and Polish Fideltronik. All really good companies. Yeah, that was that one. Okay. Okay. Can you break down like for like growth in volume and price/mix?
Yeah, that means that they would like to see what the price increases are when you add BB into the expectation for last year. We have not done that, but I can tell you that BB is growing in volume for sure. It's not price discussion.
Yeah, I know. We're extremely happy with the acquisition. Finally from Ola, last question, I think.
Yeah.
Did you reschedule the Capital Markets Day?
No
We did push it out. We have not set the new date for it.
No. I mean, coming into the fall, we will look into and see whether it's relevant to have it in the fall or in the next March, depending on how can we say it, how volatile the market is, coming into September, October. We remember last year, it was a pure havoc in the marketplace after summer. If we see that things are firming up, then we probably try to do it before Christmas, I think. If not, we will wait until next year.
I think we're open all the time in our communication. Very good. That would be interesting to share some new targets on five-year outlook, goals for 2025, things like that. That still are a little bit fluid, not that we see any weakening at all, but fluid, so we need to decide on exactly what our targets should be and how does that sit with capacity, and do we need to formulate expansion plans, things like that have changed since earlier this year. Very good. Thank you all. I think our questions are all set, and hopefully we'll come back here in the third quarter.
Final question from Naveen: "Is there any focus on ESG factors within the total business segment?
What's ESG?
Yes. Is there any focus on this, on ESG factors?
I mean, ESG, yes, of course. The environment, social, and.
Are you talking about maybe the E.U. nomenclature in that?
There are several aspects of this. Of course we are focusing. There is a quite strong demand from the customers to have their own requirements pushed down on suppliers like Kitron. We're working hard on, for instance, the CO2, but also on the very many different aspects of the whole ESG setting that we need to have fulfilled by our customers. We can see that the growth in the Electrification sector is extremely hard on life cycle assessments, on CO2, et cetera, which is going to be the focus for the future, I think, in general. What we do as well, I think you're looking into the taxonomy as well.
The taxonomy is based on the customer end products. It's basically what customers we have and what type of products we sell. Currently, our taxonomy, we have, we're aligning at around 20%-23% last year. I think it's going to end up at 19%-20% end of 2022, I think. Yes, there is a lot of focus. There's a lot of different types of regulations that we need to fulfill. We are also doing so. We have a score on the EcoVadis, a silver score. We're working hard to get it on the gold level. We are in the WASH nomenclature. I would say that we are doing a lot of work in this area.
We have to remember that we did a lot of work on it before as well because we were ISO 14001 certified, and we have been sorting everything that we've been doing in our facilities, et cetera. Many of these things are not new. We're happy to work with them and happy to work with our customers fulfilling those requirements, I have to say.
With those final words. Thanks for being with us today, and we'll be on the Q3 webcast. Thanks so much.