Good day. My name is Paulie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Alimak Group Q2 2022 presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Finally, I would like to remind everyone that this presentation is being recorded. Thank you. I would like to hand over to the CEO, Mr. Ole Kristian Jødahl. You may begin your conference.
Thank you. A warm welcome to everyone for this quarter two, 2022 call for Alimak Group. With me today, I have, as always, Thomas Hendel, the CFO. If we turn page and we look into the business highlights, we had a strong quarter two from an order intake perspective and also good profitable growth. I'm happy to see that the strategic initiatives that we are driving with the New Heights program are accelerating and we are gaining more traction. We have also during the quarter worked more on the M&A efforts, as I have talked about earlier, and I'm happy to say that we have then signed the acquisition of Tall Crane Equipment Ltd., which I will come back to, announced last night.
We also saw an increased EBITDA and a margin in line with the same quarter last year, even though it's a challenging, of course, business environment. I would also like to say that I'm very proud of the way this entire organization have been able to work as a team and serve our customers foremost, and also to continue to drive the New Heights program during these challenging times. If we turn the page and we look at the group quarterly summary. Order intake was up 37% in the quarter, up 24% organically, so also stronger than currency impact in the quarter. Then we also have one M&A impact from Cento that we did the first of July last year.
This will be the last quarter where we also have an M&A impact from that done a year ago, which is something we see in Facade Access . Strong equipment order intake of 56%, up 44% organically overall, and solid contributions from both Facade Access, Construction, and Industrial in the quarter. The revenues were up 13%, 2% organically. The increase is driven by Industrial, Construction, and also Facade Access. Wind were down as expected due to then still an effect of the exiting of tower internals. EBITDA increased to SEK 141 million , up from SEK 126 million last year at a margin of 13.1%, slightly down from the 13.2% the year before.
Effects of increased costs we have been able to mitigate, I think, in a good way through active price management in the quarter. If we turn page, we move to Facade Access. Order intake was up 78%, a very strong quarter for Facade Access, up 57% organically. As I also said in quarter one, you know, we will see fluctuations between months and quarters, and the quarter one was a little bit softer. Now we have a very strong quarter two, which also puts, you know, the full year in a solid position for Facade Access. We had strong equipment order intake in general, but also including a major project in the Middle East. Overall also Asia was doing well. We see good activity level in Europe and U.S. continuing to improve.
The revenues was up 24%, 7% organically, and is driven by stronger equipment and service revenues both in Europe and U.S.. EBITDA unchanged to SEK 6 million, same as last year, and the margin then was 2% versus 2.5%. Here it is a challenging situation with the cost inflation and also especially our factory in Germany, highly exposed to Eastern Europe. I think we have managed well, and I'm happy to see that we have been able to come in the way we did despite this turbulent quarter. Of course, we also continue our work to improve our margins, and from that perspective, nothing changed to before.
If we turn page and we look at a little bit more general business update, we see lots of things ongoing in Facade Access. We are working on improving the efficiencies in our factories through a lean manufacturing program. We are standardizing the CoxGomyl product range to be more effective and streamlined in the way we work both with engineering and production. We have consolidated the 1,000 series from CoxGomyl into Dubai. We have also made a more standardized and more fit for purpose product, the 4,000 series that can fit into the Hong Kong residential market, where we also start to see nice orders coming. We are working on strengthening continuously the commercial terms to, of course, mitigate risk exposure, and we are also constantly reviewing our costs and improving the profitability overall.
If we then turn to the next page, and we move into construction. Order intake was up 27% in the quarter, up 19% organically. Also a strong quarter for construction. Strong new equipment sales in several markets and also especially North America having a strong quarter. We also see increased order intake of rental in Europe. The revenues were up 11%, 3% organically. It's good revenue development in rental, in new equipment, and also in installation services. EBITDA ended at SEK 64 million, up from SEK 61 million last year, and a margin of 18.8%. It's driven by higher volumes and activities to mitigate supply chain cost increases. If you turn page and look into a short business update of construction.
We see that we have secured several important orders during the quarter. We see sizable, nice orders coming back a little bit, you could say, after the pandemic. We have increased distribution of the STS 300 product. Now we are expanding the markets where we promote this to also U.K., Sweden, Norway, Denmark, and the Netherlands. We see that we're really starting to gain traction with this product. We have launched a more standard product out of China to more meet the domestic China market needs. We have also done the acquisition of Tall Crane Equipment out of Canada. If we turn page.
Regarding Tall Crane Equipment, we have then made an agreement, signed an agreement yesterday that we will acquire 100% of the shares in Tall Crane Equipment Ltd., which is then a Canadian hoist and crane rental service provider, headquartered out of Langley in British Columbia, Canada. This is a company that was founded in 1980, so it has more than 40 years of presence in this market, and it is a market leader in this region. It's a licensed elevator contractor providing hoist and crane rentals with lots of qualified licensed personnel, of course, and also doing repairs and maintenance on-site and off-site. They have been a customer of ours for more than 30 years and is today an important customer, and they will also become now then part of the group's construction division.
The purchase price amounts to approximately SEK 250 million, CAD 27 million on a cash and debt-free basis and a condition-based additional earn-out setup, where the maximum can be up to SEK 105 million or CAD 13 million. It's based on the fulfillment of certain performance goals regarding sales and profit over the next two years. Tall Crane Equipment's revenue in the last yearly closing amounted to approximately SEK 130 million or CAD 16 million and will contribute positively to the construction division's EBITDA margin. Closing of the transaction is then expected to happen during quarter three, 2022. The company is a market leader in this region. It will also give us for the first time access to the Canadian market.
We will get a presence there with the group. Of course, a good base for us to expand the business, both within construction, but also for the other divisions, Industrial and Facade Access. Mostly, we see potential and will use this as a base for further expansion. The group has 47% employees and of course, a good presence in service and something that we can then continue to build on. It should be a good base for us to work out from. Then it's also, as I said, a good and nice EBITDA contribution. If we then turn page and we move into Industrial, we see that order intake continues to be strong and it's up 35% in the quarter, 24% organically. Again, driven by higher equipment and service order intake globally.
We see positive developments for our traction technology solutions, which we are driving out of Norway, and especially in the marine segment. Increased order intake in parts and service sales globally. Revenues were up 56% or 44% organically, and a strong revenue growth due to the strong order intake, the backlog coming in, and also our focus on services globally. EBITDA increased to SEK 52 million, up from SEK 35 million last year, and a margin of 17.7% versus slightly down then from the 18.7%- 17% last year. The higher EBITDA is driven by strong revenues, and also we see that ongoing investment in sales and R&D is paying off and helping fuel growth. Next page, industrial business update.
We have now done a global launch of this SL range in quarter two. It's an industrial lift for emerging markets. I've talked about this before. It was developed first and foremost for the Chinese market, and then we saw that we could start to sell it also more in the neighboring countries in Asia. Now we have really made this a global launch for emerging markets. A product which has been selling very well for us for quite some time now. We also see that the divisional structure that we have built up is starting to gain momentum and strength. We get higher activity levels in more countries and, you know, which is then resulting of course in more business.
We also see that more structure and improved processes is also helping us gaining momentum in North America. During the quarter, you know, the increased activity in the energy segment is something we see all around, and that's also something we expect and we also start to see some effects of. We have traditionally been strong in this segment. We also continue to see a nice progress for our solutions for these offshore support vessels supporting wind turbines. Quite a unique solution that we have there. If you turn page to wind. Order intake was down 6% in the quarter, 15% organically, and China continues to be challenging, affecting by the COVID-19 restrictions.
You know, the shutdowns and closures of especially Shanghai has had an impact in the quarter and overall on this market. We see an increased order intake in Europe and from an order intake perspective now this tower internals is not something that is an issue anymore. That's behind us. The revenues were down 35% in the quarter, down 41% organically. This is all as expected, due to the lower backlog coming in and the year-on-year decrease in the revenues. We also still had some effect on the tower internals there, and it was SEK 23 million in the quarter. EBITDA decreased to the lower size of the business to SEK 19 million from SEK 23 million last year.
We are, you know, working hard to mitigate the effects and very happy to see that we are able to continue to lift the margins. It was now 14.4% up from 11.1% last year. Good pricing and cost management in the wind division. Turning page to a business update, wind. As I said, you know, this is, as we all know, a quarter where a lot of things has happened on the energy segment, which also really going forward puts energy back on the agenda and also should mean much more investment also into the wind tower segment. Global Renewable Energy Outlook upgraded us as for these energy challenges that we see.
We have a tight cost follow-up and of course, prioritize, you know, the lean concepts to protect our profit. Also then the strategic review of the wind division is still ongoing. As soon as we have something to conclude or announce there, we will of course do that. Then if we turn page and then moving a little bit into our digital world. I would say, you know, it's something that we have been working on quite intensely since I came here. It's really about this thing that it's not only, you know, trying to make the best product that we are after, but it's really to help our customers to do the jobs they do even better.
It's really to focus on our customers and helping them become more productive. We have just wanted to show you a little bit of a timeline here. You know, this the basic hoist was actually having a system which could also make them able to connect back in 2010, but then not so much happened, you know. From 2020, we have done quite a lot on this digital agenda. We launched the Alimak BIM gallery for the BIM Alimak r ange in 2020. In 2021, we started to connect the BMUs so that they have this connectivity ability. We also in 2021 released the first customer portal, digital portal, where the customer can get access to all information they need, and we did that for this STS 300 launch.
We launched the BIM gallery for all the facade access products. In 2022, we made this online tool so the customers can make an easy calculation and of course in a smart and safe way of how to install mast climbers and construction hoists. We also pilot released now recently My Alimak for the construction hoist with a large Swedish rental customer. We have now recently signed a letter of intent with OO Software to have a strategic partnership for how we can develop an FSM system supporting our service engineers globally going forward. If we turn the page. Just a couple of words about the BIM gallery. Basically, you know, all standard machines and lifts now available to download free of charge.
That enables our customers to really be able to choose the best solution. It simplifies and reduces risk, of course, for the customers and in the selling process because everything can be simulated. As an example, you know, I spoke with one important construction customer of ours not long ago, and they were very, very happy with the overall Alimak solutions. But they saw, you know, when they come up in height, they have not really calculated enough lift capacity. Because when you start to move up in height, you know, of course, more time will be spent on running inside the hoist. You lose some sort of capacity there.
Again, if you would have a BIM model, you could simulate all these things before you kick off the project, so you would know this and not something you experience on the way. Also from an industrial perspective, when you have a BIM model, you can also define it into the overall plant instead of being something you add on to the plant afterwards, which will also take down the need for infrastructure or structural type of design, you know. You're actually designed into the whole thing. We have more than 3,500 downloads since this was launched last year, and it's also something we use as an important lead generator, of course. We see and we can follow up on those that are in and download.
If we turn page and little bit more about My Alimak. My Alimak, it's actually then a webpage where you get as a customer you get your own page where you get access to all relevant information. This is, you know, something we now have started and more and more, you know, the information we get, we can also, of course, store inside this place then. Improving the customer value from order installation, use and service, and the content that we have now in the first releases are basic machine information then. They can get access to all technical documents, to calculation tools. They also see analysis of how the machine operates, and of course, also service and contact information.
This, basically here, we digitalize, we make it easy for our customers, we provide them better service, we give them lower cost, and we also create stronger ties with our customers, et cetera. A way forward for this business. If you turn the page to say two words about this cooperation, about strategic partnership that we will have with OO Software. It's a web-based tool for service management, a field service management system. When I came here, we were working on a bigger supplier to actually do this for the group, which would make us more restricted on actually how we would manage, and it will have a high cost.
We have now a small player out of Borås, which then work close with the rest of our team. This will help us make a flexible and fit for purpose field service management tool. Of course, for us, we're service development, and we have service engineers all around the world, and it's something we want to expand upon, of course. It's both related to installation, it's related to service, maintenance, refurbishment projects, et cetera. This is, of course, an important strategic thing for us to make sure that we have digital tools to make it easy both for ourselves and for our customers. Then if we turn page, we move into the financial summary, and then I leave the floor for Thomas.
Thank you, Ole.
As always, the financial summary of the quarter and also the year to date now, half year. As we can see, we have an increased backlog year to date of about SEK 300 million now, supporting a further revenue growth, which is very good. The EBITDA increase year to date is 30% in absolute numbers, and the cash flow softer, but it's a timing issue, and I will come back to that. Next page, please. Earnings summary. The EBITDA margin is in line with last year, as you saw, but we definitely with the help of an active price management, which offsetting a challenging market situation with very high cost inflation in many product areas, product types.
The financial net, if we compare quarter-over-quarter, it's a slight negative interest net in comparison, but a positive currency effect of SEK 7 million. Regarding the tax rate for the quarter is 22.2% now, and it's basically reflecting the country profit distribution. Next page, please. Earnings per share results for the period. The result for the period, 98 versus 78, and it's actually an EPS growth of 26% versus the EBITDA growth of 12%. It's very nice to see the drop through all the way to the net income. Next page, please. Cash flow. Yeah, cash flow from operations, SEK 37 million versus SEK 151 million corresponding quarter last year. It's basically three areas that explains the lower cash conversion this quarter.
It's the first is the timing of project payment milestones, and we also have some selective inventory build-up to secure deliveries going forward, critical components.
Thirdly, when we look into the balance sheet, obviously we had very high invoicing late in the quarter, leading to a high level of trade receivables. It's a timing issue, but moving forward in the cash flow cycle in the quarter. Next page, please, net debt. Yeah, improvement versus Q2 2021, but we had an increased debt in the quarter from the lower cash conversion, as I said, due to timing and also the fact that we had our dividend payout in May, SEK 176 million . Leverage is still strong and continued strong financial position, and we have about SEK 2 billion in unutilized credit facilities. The capital allocation, repeat again, the priorities. One, profitable growth, as you have seen, sales and development if we compare year-over-year. Number two, M&A increased activity.
Now also, very clear when we saw last night, the acquisition of Tall Crane Equipment Ltd. The payout according to the dividend policy this year, 59% of net income in the higher range of our policy. By that, back to Ole.
Yeah. Thank you. If we turn page to the summary. The focus is on profitable growth. If you remember, you know, we had a three-step in the New Heights program. First, to fix the base, which was something we said we should do 2020, and we did. We said 2020-2021 is the year where we focus on the profit side and really ensure that we have the right things on board to grow and that we delivered upon. Now we are in this profitable growth phase from 2022 and onwards. I'm happy to see that, you know, already as expected, you know, first half of this year, we are really in that mode. Also that this means, you know, that we have a more solid organization.
We have the base in place, so we can also now accelerate our M&A activities and that we see them now with the acquisition of Tall Crane announced yesterday. All this is still managed then in a challenging business climate where supply chain disturbances has been quite high during the quarter. We also have, of course, the cost inflation and interest rates going up, and it's a lot of macroeconomic and geopolitical uncertainty around us, which we also foresee that will continue forward. I feel that we are, you know, we have managed it well so far, and we are in a good position to continue to manage this.
It's also times, you know, like this where good company like ours should be able to gain ground, which is also what we have as our target. We are well set for further profitable growth. We will continue to expand our solutions portfolio. We further drive our service penetration strategy. We are continuing to accelerate the efforts in R&D, digitalization and also M&A, and all to be done in a safe and sustainable way. With that, I say thank you, and we turn to next page and Q&A.
Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Again, that is star and the number one on your telephone keypad. Your first question comes from the line of Kenneth Toll from Carnegie. Your line is now open.
Hello, Kenneth. Are you there?
Yeah, sorry. Now I'm unmuted also. Two questions, please. First one on order intake. You had good order intake. The question is regarding how it developed during the quarter. Could you say that it was stronger in the beginning and softer in the end, or the opposite, or was it quite an even picture? Do you have any indications like that?
Yeah. I would say it's relatively even during the quarter. You know, I can't say that we have had any, you know, see any special trends during the quarter in either direction or not.
Mm-hmm. Okay. The second quarter is the driver of margins in construction in the industrial. There have been cost headwinds and so on. Do you think you will be able to return to the 2021 levels again? Do you think that is achievable in the longer term?
Absolutely. I think it's, you know, there will be some swings here and, you know, we have invested quite a bit in R&D and sales, you know, and also into this organization that can be even stronger market-focused on its right segments, et cetera. We have not seen, you know, all the effects, of course, on this from an order intake and sales-wise perspective. Definitely I would expect a drop through when we move forward on this.
Mm-hmm. Great. Maybe thirdly on acquisitions. You announced one late last night. Is that the type of acquisitions that we might see also going forward? Sort of smaller niche players that are strong in the local field. Is that what you are looking for?
I think that's one thing of what we're looking for. That means that you could see more of this, but it's not everything that we are looking for.
Mm-hmm.
We are having quite a wide, you know, agenda as I talked about before, you know, both geographies. It's related to product categories, it's related to technologies, it's related to maybe, you know, or a new leg to the group, you know, et cetera. That could be, yeah. The funnel is quite nice, you know, both from smaller to medium and to some larger opportunities.
Mm-hmm. Yeah. Then also on the wind side, you have set that under strategic review. Now we also see that both, I mean, orders are recovering. We see that more GW is recovering here. Maybe you don't need to stress decisions on that as long as you have an improving trend. Would that be a fair assumption that if you were to keep this for a year or two longer rather than maybe divesting it wouldn't be such a bad thing?
Yeah, you know, of course what you are saying, you know, the macro around us has changed.
Mm-hmm.
Since we announced this. That's of course something we take in. We have the strong, you know, agenda we have had for a long time on what we needed to do with this business and that we saw, you know, and have been following and seeing. You know, we took a decision to exit the tower internals, but the rest of it, you know, is nice.
Mm-hmm.
You know, or it's something you have control over.
Mm-hmm.
That we have proven, I think, quarter by quarter, you know, that if you disregard this political thing, you know, with COVID restrictions, et cetera, in China and the tower internals, which we purposely are moving out from, this is a very stable business.
Mm-hmm.
We are also managing it in a solid way.
Mm-hmm.
You know, we have announced a strategic review, but of course, in the end, the Board will make sure that we make also solid strategic decisions about what we do here.
Mm-hmm.
Taking in all these perspectives, of course. Yeah.
Mm-hmm. Mm-hmm.
I'm sure.
Okay.
Great. Yeah. That's all for me. Thank you.
Again, if you would like to ask a question, please press star then the number one on your telephone keypad. We'll just hold to compile the roster. Your next question comes from the line of Tony from KRB Capital. Your line is now open.
Yep.
Hi, it's Tony. I just wondered on the Facade Access orders, is the commercial terms now in line with today's cost and your target of improving margin in this segment?
Yes. Hi, Tony. Absolutely. We make sure now that, you know, the business and the contracts we are taking now is in line with the cost situation and the market conditions we see today. Absolutely. If it's not, we stand off.
Yeah. Basically a year and a half, the old legacy of the contracts in Facade Access, that should be washed out if you understand me, then gradually we-
Yeah, I understand you great. Of course, it's the further we go down the line, you know, the more we will have contracts where we where you know I know that we have better control over, you know, the cost element and the profit element of these contracts and let's say all legacy stuff will be more cleaned out. Absolutely, that's the way it's moving. Yes.
Mm-hmm.
For Alimak as a company, I mean, looking at your orders, is it the market that helps you with the growth, or is it Alimak increasing the market share?
It's always a little bit difficult to say because it's also, you know, the, you know, it's not thousands of the same product, so it's not so easy to calculate market shares day by day. You know, it's project business most of it. I clearly feel we have a very strong momentum. We are where we should be, and we are developing, and we are the natural choice, et cetera. That we are, you know, yeah, in a good position and leading the way here, I feel confident on. We also have a huge potential going forward to further develop, you know, all divisions as I've been highlighting many times, you know. But if-
And, and then-
You know.
That potential, that is from my understanding, that potential is kind of. That doesn't mean you don't make any assumption on the market. That's more that you internally have a lot of things. You have control in your own hands to increase the profitability and the turnover for the company, if I understand you correctly.
Correct. I'm not basing my destiny on market development, even though, you know, of course, we know that we have the, you know, some global trends and market fundamentals with us, you know, which is nice for the base of the company. That's not what we base the growth plans on, et cetera. That's driven by the strategic activities and operational activities that we're having in the company each day now.
Yeah. When acquiring Tall Crane, I mean, when you look at the company, what do you find the most appealing?
I think it's the things I mentioned. You know, it's first of all, they have been. It's a way, you know, also if you list what I said, it's the thing that, you know, it's not about the product itself, you know, that we want to make the best of. We want to also, you know, change this business and make sure that we help the customer in the best possible way with the challenges that the customers are having. You know, and then maybe you instead just purely look at do you want to sell a hoist or you know, maybe you more look into what are the logistical problems, you know, and how can you help develop these type of concepts, for the customer. This brings us, you know, from that perspective, closer to the market and closer to the customers.
We do not have anything in Canada today. Of course, we sell into Canada, but we are not there ourselves. This gives us a solid base. This is a company that has a, you know, a solid portfolio of Alimak products already. It's something, you know, very obvious for us to continue to build upon. They have had 40 years of history in this market. They lots of service engineers, capable people, you know. That's something fitting us very, very well. Of course, a base that we can grow the rest of the group offerings from also.
The base there, you talk about the base to extend your market ing in Canada. How? If you think five years, 10 years, 10 years down the road, how big do you see the market for those Alimak in Canada?
Oh, I don't have any clear figures on that. Clearly, you know, the Canadian market, it's a huge market altogether. It's a natural western type of market.
Is it fragmented?
With solid positioning.
Sorry, Ole. Is the market fragmented today in Canada, or is it consolidated by a few players?
No, it's quite fragmented, actually. It's a nice opportunity from that perspective, yes.
Mm-hmm.
This company here, it's, they are strong in this region, you know, but they are not really present in other parts of Canada. This business in itself, you know, we could further develop. Yeah.
Okay, thank you. That's it.
Yep. Thank you.
Thank you again. If you would like to ask a question, press star then the number one on your telephone keypad, and we'll hold for a few seconds to see if there are any final questions. It looks like there are no further questions at this time. I would like to turn the call back over to Ole.
Yeah. Thank you. Thank you everyone for listening in and for the questions. I just want to wish everyone a nice summer. Until next time. See you. Thank you.