Hi everyone and welcome to the presentation of the first quarter 2024 results for Alleima. My name is Emelie Alm and I am Head of Investor Relations. I am joined by Göran Björkman, President and CEO, and Olof Bengtsson, CFO. Göran and Olof will take you through our results and then we will have a Q&A session. You can ask questions through the conference call and you can also write them in the field below the webcast. You can download the presentation from alleima.com. As always, we have safety as a top priority and I trust that you are safe where you are located and that you know the safety routines of where you are. With that I would like to hand over to you, Göran.
Thank you, Emelie. Hello everyone, thank you for listening. Okay, let me start with the Q1 highlights. I will go deeper into numbers on coming slides. It has been a somewhat challenging quarter with negative organic order intake and revenue growth, although of course compared to very strong quarter one last year. Market demand is still mixed and the chemical and petrochemical and industrial segments are still challenging, especially in North America. However, we are noticing some positive signals in segments where demand previously has been soft, for example in the consumer segment of the Strip division. Nuclear and medical both showing continued strong demand and all in all our backlog is solid in most key segments. As we said now for a number of quarters we are consuming backlog in some segments while building in others. We've had some temporary delivery challenges in the quarter.
I'll look back to that later on. Despite this headwind with temporary delivery challenges and underabsorption effects on lower volumes, we are showing our resilience as a company, showcasing an Adjusted EBIT margin of 9.6%, which I think is an okay performance given the circumstances. In these more challenging times I believe it's even more important to stay true on our strategy. Even though there's room for improvement, we have been flexible in our production to accommodate lower volumes. We also maintain our price leadership strategy, which has in the shorter term had a negative impact due to underabsorption but will benefit us when higher volumes return. We've also seen how sustainability trends continue to benefit us and I'll look back to that in more detail later. Let's start looking at sustainability in our operation. I think overall we continue to do good.
We continue to prioritize our safety performance, actively implementing measures to maintain safety as a top priority, resulting in an improved development during the quarter. Our utilization of recycled steel remains high, however decreasing due to the product mix. I would say we have a higher share of special grades today versus normal stainless steel. Our CO2 emissions continue to stay below 100,000 tons for Scope one and two, overall in a 12-month period. So reduction of 6%. And this is despite Söderfors Steel wasn't in the numbers in Q1 last year. And we are increasing the proportion of female managers. Of course, recognizing this is just one perspective of our broader diversity and inclusion initiatives. I'd like to give a few comments on how we drive sustainability through our offers.
For more than 40 years we have been at the forefront developing modern duplex grades, which are typically stronger than standard austenitic stainless steel and with superior corrosion resistance. In February this year we launched our next generation umbilical tube grade, it's called SAF 3007. Built on the success of the market-leading SAF 2507, which has become the industry standard for the umbilical application. This further advanced the duplex revolution that Alleima has pioneered decades ago. This grade, SAF 3007, offers a +15% increase in yield strength, which will make tubes both thinner and lighter, something that this industry has been requesting for quite some time as this is an important prerequisite for deeper wells. Thinner tubes lead to lower material consumption, meaning there's a win-win situation for Alleima, for our customers, and not least for the environment.
I think this is a good example on how Alleima contributes to making traditional non-sustainable industries more sustainable as we increase energy efficiency, reduce CO2 emissions with our highly durable components. Which brings me to another industry where our products can make a big difference. Can't stress this enough. About 75% of industry furnaces used today are fossil-free driven. As legislation on polluters tightens, we believe that the transition to fossil-free heating will ramp up even more going forward, therefore creating long-lasting growth opportunities for Alleima. During the quarter our Kanthal division received an order for Fibrothal heating modules for downstream applications in the steel industry. The modules will be used in a furnace in a new green steel plant in Europe. The steel industry is a fast-growing and key niche for Kanthal's industrial heating offering.
In addition to reduce CO2 emissions and improve energy efficiency, electrical heating also means more temperature-accurate heating. This is only one of many examples on how Alleima's product offering is making a sustainable impact. Let's look in how we view the market development. Overall, as we have communicated now, several quarters continued mixed market sentiment. We did see some stabilization in the short-cycle business but on low levels. The underlying demand in some customer segments remains strong. I will quickly walk you through our outlook for each segment. I start with oil and gas. The underlying demand is still growing from already high levels. I would say the project list of upcoming tenders and potentially future orders is very strong, even stronger than before. Industrial, we see signs of a continued recovery of low-refined products but still soft in the distributor-characterized North American market.
It looks like Europe has troughed now. Chemical and petrochemical, strong demand in Asia as seen for a long time now. Underlying demand is really there. Demand is somewhat lower in Europe and there's still some uncertainties and slow order booking. But here we have a nice backlog. North America also down year-on-year, but we see some early signs that market might have troughed with end of the quarter better than the beginning. Industrial heating, a slightly weaker demand year-over-year and some hesitance in placing orders for some customers at the moment. Total order intake remains high. Consumer, this is still a soft market but clear signs of recovery from low levels. And this is mainly driven by the white goods industry. Mining construction trend continues to improve year-over-year, especially mining is strong, but we also see construction picking up.
Medical, continue strong positive underlying development from high levels. Demand in the medical segment continues to show strong momentum with growth driven by remote patient monitoring and catheter lab instrumentation application. Really good news is that insurance coverage is expanded to cover both type 1 and type 2 diabetes in the U.S.. Nuclear, underlying trend is continuously growing. It's long lead times but high and growing activity among customers. Transportation remained on a stable level with high activity in the aerospace and space industries. Here we have really long backlogs. Hydrogen and renewable energy, segment noted a continued momentum and certifications regarding key products were obtained during the quarter. These are related to different aspects of material approvals for heat exchanger tubes that we produce for hydrogen refueling stations. This allows us to certify to certain standard, which is required by some customers in order to place orders.
So that's important progress. Business for coated strip steel for the hydrogen fuel cells is still experiencing headwinds as customers, not only but mainly automotive OEMs, have delays in their ramping up of their production. Let's look into the order intake and revenue. As you might have noticed, we have changed our disclosures and we are now only disclosing order intake on a rolling 12-month basis. As we said many times, order intake in isolated quarters can be volatile due to timing of orders and the nature of our business with a lot of project business. Order intake in a single quarter does not really correlate with near-term revenues and it gives an indication that is not valid or applicable for our performance. Order intake rolling 12-month, on the other hand, it gives a better understanding of our future performance.
Yes, you can still calculate the quarterly order intake, but shifting to rolling 12 months is a way for us to shift focus in our communication on what we perceive as important, which is valid both up and down cycles. When looking at the rolling 12-month order intake, it's not really necessary to adjust for major orders, which is why we have removed that measure. To the numbers, organic order intake growth was -8% for the rolling 12-month period. This is mainly driven by a weaker order intake from the chemical and petrochemical and the industrial segment in North America. Also oil and gas saw a lower order intake, but from high comparables and we still view, as I said before, market as very strong with either, I would say, impressive project lists from customers. Absolute level in order intake is high and is above SEK 20 billion.
Total revenues, SEK 4.7 billion. This is an organic growth of -2%. I think we believe that we have reached the trough in the short-cycle business in industrial and consumer, but they're still showing negative growth compared to a year ago due to a thin backlog. We've also been highly affected by implementation of the implementation challenges of a new ERP system, which hit revenues by low- to mid-single digits. Big part, and we will not lift that up and comment in a quarter report unless it had some significant impact. And big part of tube and all of Strip and Sandviken did go live with the new ERP environment during quarter one. And there have been issues. And that has affected both revenue and EBIT margin.
I will not go through too much in details, but it has been issues like, for instance, DC inventory visibility and with problems with our online ordering system. Normally we have automatic generation of certificates, but for migrated orders, meaning orders that were started in the old system, moved to the new system, had issues and we need to handle them manually, which is creating delays in our invoicing. And several more, and people are working hard to solve this. But however, production is running and has been running all the time. However, with a rolling 12-month Book-to-Bill and 102% in the quarter, solid backlog with good mix, we still see opportunities for revenue growth in the upcoming year. Let's look at earnings. Adjusted EBIT margin decreased by 20% to SEK 453 million with a margin of 9.6%.
Of course, I'm not pleased with the decline, but I would say given the circumstances, it's not too bad. We have dilution for underabsorption from lower volumes and we have dilution from the lower revenues from implementation issues of the new ERP system and tube and Strip. We anticipate lower impact from these temporary challenges and our underabsorption going forward. We still had a positive product mix and we have been successful in our price increases. Looking at the margin on a rolling 12-month basis, we are at 10.1 compared to 9.5 a year ago and still on historical high levels. Free operating cash flow, SEK 159 million. I would say a bit on the low side, mainly due to accounts receivable. I'd like to share this graph with you where we show revenue and Adjusted EBIT margin over time. I think in a way it speaks for itself.
We take a closer look at our Adjusted EBIT margin. We say this is a weak quarter, but if you zoom out a bit, we're still on high historical levels. Given what we said about difficulties in the quarter with underabsorption effects and other temperature challenges, we're now at a higher Adjusted EBIT margin rolling 12-month than in 2019, which we considered a really good year. And remember that our contribution business, the low refined industrial segment, has been declining now for seven quarters and capacity utilization in the steel plant are at low levels. And I would say volumes in the steel mill are more than 20% lower now than they were in 2019. Our key focus is to keep price leadership also in a weaker market environment, not filling backlog with orders with low prices. Also done footprint optimization, improve flexibility in the cost base.
But I would say most importantly, we are focusing on growing attractive niches, improving mix. And today we have a much wider span of products contributing to our earnings. And we believe we're only in the beginning of this journey and mixed changes happen over time. And we continue to execute on a strategy to pursue growth within these segments with higher profitability and less cyclicality, which in time will make Alleima as a group just that, less volatile and more profitable. So let's go into and look into the division starting with tube. tube noted an order growth of -7% for the rolling 12-month period. That was influenced by a weaker intake in oil and gas, also in chemical and petrochemical and the industrial segment in North America. This was partially offset by a nuclear segment and a continued strong development in chemical and petrochemical in Asia.
Even though order intake in oil and gas declined, there's a strong underlying momentum in the sector and we will be able to capitalize on that going forward. We are booking orders for 2025 now and the organic order intake decline is rather a consequence of a strong backlog and high comparables from last year when we were building the backlog. The customer project list, as I said, is really positive. For the contribution or I would say industrial segment, we could have booked more orders if we wanted to, but to choose not to because we rather have some spare capacity for more profitable orders. Book-to-Bill of 106% for the rolling 12 months and still a solid backlog. Organic revenue growth of -1%, mainly due to lower volumes in the low refined business in the industrial segment.
Several of the other segments are showing nice organic growth. For example, oil and gas, chemical and petrochemical in Asia, hydrogen renewables actually growing over 100%, but of course still from low levels. We have experienced some headwind in tube during the quarter, mainly due to the underabsorption effects from running lower volumes and also some challenges regarding the implementation of the new ERP system. We expect these challenges to be gradually fade out after quarter one. But the underabsorption effects from lower volume in industrial as well as chemical and petrochemical North America and North America overall could also impact going forward, which is why we have adjusted capacity to adapt. We had a positive product mix and price increases are coming through nicely. Positive effects of SEK 36 million year-over-year.
I would say even though I think we can do a lot better, the fact that we still came out with an Adjusted EBIT on 9.2% shows that we have made some improvements. Moving over to Kanthal. Kanthal also had a mixed quarter, at least on top line where we saw an organic order intake growth of -9% for the rolling 12-month period. Industrial heating started to decline already in quarter four and this has continued, however, not getting worse sequentially. Decline was also noted in the industrial segment, both from high levels. Order intake in the medical segment was strong and with the earlier mentioned expanded insurance coverage as well as successful new product introductions to the market are to continue to support the segment growth both mid and long term.
Revenues grew flat organically year-over-year with decreases in industrial and increases in industrial heating and medical. Book-to-Bill declined to 91%. We are consuming a bit of the backlog at the moment, but Kanthal has taken swift mitigating actions to adjust capacity and reduce costs where needed. All of this, of course, to safeguard margins going forward. And talk about margins, I think the margin improvement continues in Kanthal with a margin of strong 18.5% in the quarter compared to 16.4% a year ago. This is mainly driven by a strong medical segment and an overall good product mix as the industrial heating segment is also growing in the quarter. FX had a negative impact of SEK 10 million. I think Kanthal have improved cost position and productivity and the product mix is steadily improving.
Kanthal has established a new margin level and they are doing a really good job. Let's look at Strip. Strip has been heavily affected by the weak consumer-related market, but where we now see some indications of a slight market recovery, especially, as I said before, in the white goods industry where one of our more important products is the compressor valve steel. Order intake declined organically by 30% on a rolling 12-month basis due to the lower intake from the consumer, but also from the hydrogen and renewable energy segment. The offering in hydrogen and renewable energy segment is our coated strip steel for hydrogen fuel cells. As said before, our customers have delays in ramping up their production and therefore we expect this business to be subdued near-term and it will have a negative impact on both revenues and earnings.
In the quarter, revenue declined organically by 19%, which is, of course, a result of the weak backlog and the overall weak market that we've seen for some time now. This had, of course, an effect on earnings where Adjusted EBIT came in at 3.1%, but the weaker margin can also be partly attributed to the earlier mentioned underabsorption effects on lower production volumes across the business and especially in consumer and also in hydrogen renewable energy. And the hydrogen part is a growth opportunity in the future, but I would say growth will not be linear and the challenges with the new ERP system also hit margins for the Strip divisions. And with that, I would like to hand over to you, Olof.
Thank you, Göran. And let's go to the financial summary then and looking at some numbers.
If we start with the bridge to the right, we see a rolling 12-month order intake of close to SEK 20.4 billion then organically and on a rolling basis, we are down 8% meeting high comparables from last year's first quarter. We get some help from currencies and then we have a negative change in the alloys at -4% coming from the lower metal prices in the quarter. If you look at the revenues to the right, they come out at SEK 4.7 billion in the quarter, also impacted by lower metal prices and consequently a negative change in the alloy surcharge of -9%. Organically, we're down 2% against the strong quarter last year and adjusted for the delayed invoicing that was mentioned before. In some of our operations in the quarter, we would have been in a positive organic growth territory.
Looking at 12-month rolling numbers on revenues, we come out just above SEK 20 billion, which gives a 102% Book-to-Bill ratio quarter. Going then down to the Adjusted EBIT, it decreases to SEK 453 million affected by the lower revenues and also the underabsorption effects mentioned. The Adjusted EBIT margin for the quarter stood at 9.6%, then compared to last year's 10.5%. Metal price fluctuations impacted the reported EBIT during the quarter and the reported EBIT margin declined to 2.7% compared to 19.4% last year coming from the swings in the metal prices then year-over-year. And please remember here that the metal price effect that we calculate is a calculation of how changes in metal prices affect our performance.
This is because sales that has an alloy surcharge clause entails a time lag between fixing the raw material cost in the product and setting the price to the customer. And even if we see that over time, the effects normally balance out, but a single quarter can, of course, be very much affected by the metal prices. Going further down in the income statement, we come out with SEK -42 million in finance net in the quarter. And the negative impact here comes mainly from revaluation of financial instruments that we use for hedging of various exposures like metals, electricity, and FX. And we have since 2022 gradually introduced hedge accounting to these instruments to avoid these swings in our books. So swings are a lot lower now, but not all contracts are in the hedge accounting scheme.
And this also means then that we get some revaluation effects in the quarter. But I should also mention that we, of course, have a positive interest net coming from our large cash balances that currently yield around 3.9%. Looking at the tax rate, the normalized tax rate comes out at 24.6% in the quarter. That is well in line with the guidance that we have given. If you look at the reported rate, however, it comes out very high. It comes out at 38%. And the effect here comes mainly from the fact that the metal price changes affect the tax calculation when you just look at the plain reported rate. So I prefer to look at the normalized rate and also it can be difficult to look at a single quarter when it comes to the tax because single items might have a big effect on tax rate.
Operating cash flow comes out at SEK 159 million in the quarter and I will come back to that in my later slides. Going to the bridge then, Adjusted EBIT decreased by a total of SEK 114 million compared to the first quarter last year. This is mainly then driven by a SEK 137 million organic decline from the volume decreases and underabsorption effects. We estimate approximately 100 basis points dilution from the underabsorption and then 100 basis points from the temporary ERP issues that we experienced in the quarter. If we are to look a little bit ahead, we still think we will have some underabsorptions effect from the volumes in the next quarter. However, we do not expect any significant effect from the ERP problems in the second quarter. We get some tailwind from currencies, SEK 24 million and that coming from a weaker Swedish krona during the quarter.
If we look a little bit at the parts, the tube impacted by the lower volumes in the upstream production, that's causing this underabsorption that I just mentioned, but also the lower volumes in North America and the temporary ERP problems, however, helped by positive currency effects. Kanthal defends its margin well with a good product mix despite the lower volumes and negative currency effects. Strip, besides the ERP challenges, the lower volume, of course, has an impact on the absorption. No contribution from Söderfors and Söderfors in this case is the acquisition we made in May last year of Söderfors Steel. That's not a positive contribution on EBIT as their external market demand has been low. But you should remember that the main reason for this acquisition was access to the fine production capabilities in small-sized bars to serve our medical and aerospace customers.
So the impact of Söderfors going forward will be seen elsewhere in this description. Looking at the balance sheet then, net working capital is lower than last year and slightly up sequentially. Year-over-year, it's mainly the lower metal prices impacting the numbers. The sequential development is impacted by a few different factors. One is currencies as the weaker Swedish krona in the quarter increases the value of the net working capital. Another factor is slightly higher physical inventories from seasonal buildups, but also from the delay in invoicing caused by the ERP change. This effect is compensated by lower metal prices. Overall, no big changes in inventory values. However, in addition to this, our accounts receivable have increased and I will come back to that when I talk about the cash flow.
As percentage of revenues, net working capital came out at 36.3%, which is higher than a year ago when it was at 32%. This is partly due to the combination of lower revenues already explained and the weaker SEK having a direct impact on the net working capital numbers. Year-over-year, capital employed in the right graph then decreased to approximately SEK 15.5 billion from SEK 16 billion last year. The change comes mainly from the lower net working capital then year-over-year. Gross excluding cash based on the operating profit then, including the metal effect, was 7.1% in the quarter based on a rolling 12-month basis. The decrease is attributable to the change in metal prices, which impacts the reported EBIT significantly in the quarter.
Cash flow then on the next slide came out at SEK 159 million in the quarter, lower than last year, coming mainly from higher accounts receivable as we see the Easter holiday coming right at the end of the quarter impacting our receivables collections. And this is confirmed at the beginning of April when we saw good cash flows coming in from our customers. So a bit unfortunate, but it has improved. CapEx is higher than last year, coming from several ongoing growth investments. And last year was, if you look at the working capital changes, it's quite a change and that comes mainly from the higher metal prices during the first half of 2023. Our financial position then, in summary, we have a continued strong net cash position. We continue to be well below our financial targets on the capital structure.
Net debt to equity to be below 0.3x and we're currently at -0.03x at the end of the quarter. So we are in a cash position. If you were to look at the net debt to Adjusted EBITDA, we stand at -0.17x. Looking at the components then, the net pension liabilities, they increased to SEK 722 million from SEK 461 million a year ago. This is mainly then coming from lower discount rates applied to the pension debt. However, sequentially, the net pension liability decreased from higher asset values and slightly higher long-term discount rates on the Swedish pension liability. Leasing liabilities stood at SEK 480 million. That's an increase from acquisitions and from renewed leasing contracts in some units.
Then our net cash position was SEK 1.7 billion and that has improved by close to SEK 600 million year-over-year and SEK 119 million in the quarter. The total net debt position, actually a net cash position is SEK 507 million compared to SEK 256 million one year ago and SEK 242 million at the end of 2023. All in all, we are financially strong with a net cash position and an unutilized credit facility of SEK 3 billion. I should mention that subject to approval on our AGM next week, we will pay out our annual dividend of SEK 2 per share for a total of SEK 502 million. Looking at our guidance, how well did we manage to guide you for this quarter? Well, CapEx was at SEK 141 million. We don't specifically guide on the quarters, but we are guiding for SEK 950 million for the full year.
Remember that the second half of the year is normally stronger when it comes to CapEx or entails higher CapEx expenses. Currency and translation effects came out at -11% and we guided for -SEK 60 million. The total bridge effect, including the hedges and revalves, were +SEK 24 million. The Swedish krona, it was the weakening of the Swedish krona during the quarter that caused the deviation from our guidance here. The Swedish krona was very strong around year-end, as you remember. Metal prices, -SEK 328 million versus a guidance of -SEK 300 million. We were fairly close there, I think. Tax rate normalized at 24.6% and the guidance is in the range 24%-26%.
If we look into following this quarter that we're in now, Q2, CapEx, we still keep our guidance for the full year of SEK 950 million, including investments like our announced investments in China and our announced investments in Kanthal with silicon carbide. Also remember that around SEK 400 million is maintenance. We also have some IT investments this year on the ERP side. Currency effects in translation and transaction, we guide for approximately SEK 25 million compared to the same quarter last year. Metal prices, negative SEK 100 million for Q2. And this is based on the metal prices at the end of quarter one. And if metal prices increase, the effect will be lower. Same goes, for instance, if the U.S. dollar strengthens further. Tax rate, we keep our guidance for 24%-26% on a normalized basis. All from me. I hand back to Göran.
Thank you, Olof.
So let's look at the outlook for the second quarter. Well, despite mixed demand in our markets during the quarter, underlying megatrends are expected to continue to mitigate the impact of uncertainties in the macroeconomic environment in the coming year. We have a solid backlog in key segments and we have good visibility on our near-term deliveries. We are, as always, of course, continuously taking measures to mitigate potential impact from cost inflation and underabsorptions. For instance, if we have lower volume production volumes in certain segments. One example is Kanthal, who has reduced capacity and cost through flexible solutions already in quarter four when they saw a weaker order intake. And if needed, they can do more and they are prepared to do so. Product mix is expected to be similar to the one of the first quarter.
Cash flow is normally lower in first half of the year compared to second half of the year. If I should summarize, I think we can conclude first quarter with mixed sentiment, having successfully navigated headwinds, yet acknowledging areas for continued improvements. We've encountered challenges in implementing our ERP system, resulting in reduced invoicing, and it has also impacted margins negatively. Also, the lower production volumes has led to underabsorption effects. But as a result of this, I believe one of the most important takeaways moving forward is the building of a track record of stronger margins, credit due to our diverse exposure, and also consistent execution strategies targeting highly profitable and less cyclical segments. And even though we are consuming backlog in some areas, in total, our backlog remains solid with a good product mix looking ahead. And we remain committed. This is really about the executing strategy.
I want to emphasize our price leadership and that our aim is to stick to that. This will be a clear advantage when broad market demand and volumes return. And with that, thank you and over to you, Emelie.
Thank you, Göran, and thank you, Olof. So now it's time to start the Q&A session. So operator, please go ahead.
We will now begin the question and answer session. Anyone wish to ask a question may press star and one on the telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only hands while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Adrian Gilani with ABG.
Please go ahead.
Yes, hello. A couple of questions from my end. I'd like to start regarding the delivery issues for the new ERP system. You mentioned 100 basis points margin dilution from it. And am I correct to assume that these sales are just delayed and will come in Q2 instead? So effectively, we should get a 200 basis points positive effect quarter-over-quarter in Q2.
Most of it is delayed. I explained two examples. One was with the certificates that we had to handle manually. That has created delays. That should come back in quarter two. The problem with visibility in our DCs and the online ordering system, you really don't know if a customer will come back when it works or if we lost them. So I think I would say two-thirds of this is we know will come back and maybe one-third could be lost.
Okay. I understand. And then a more broader question on industrial heating, given its exposure to many different end markets. Is there any specific area there that is sort of driving the weakness right now or would you call it a broader weakness across the board?
I would say it's the broader weakness. We've looked into this more carefully. We studied, for instance, glass. We studied electronics and semiconductors and also solar. And when we talk with customers and also read reports, it's fair to believe that quarter one is a slow quarter and at least customers expect a stronger second half of the year in those, I would say, subsegments then. So from that point of view, I would say normally careful, but I'm pretty optimistic that that will turn back again.
Okay. I understand.
Then on the contribution business, you said that it has likely troughed but will still be down year-over-year in coming quarters. Can you give some rough indication on the sort of underabsorption effects on the margins? We had 100 basis points this quarter. Is it going to be roughly half next quarter? Is that reasonable?
It's always difficult calculation. If I should do the calculation, I mean, it takes time to fill the backlog again. I think it's fair to believe that the underabsorption effect in quarter two will be similar to the one in quarter one.
Okay. I understand. One final one from me as well regarding Kanthal cutting costs. Is this an ongoing thing that will continue into coming quarters as well or have the measures mostly been taken, would you say?
That really depends.
I mean, we have and we have that in the other divisions as well, flexible solutions. And that means that they can act fast in which they have done. They've also sort of summarized what more could be done if needed and that will mean they're going to follow the order intake closely. And if needed, there is more that can be done and that could be done pretty fast then. So it really depends. But they have more ammunition if needed.
Okay. Perfect. In that case, that was all from me. So thank you for taking my questions.
Thank you.
The next question is from Viktor Trollsten with Danske Bank. Please go ahead.
Thank you, operator. And hi, Göran, Olof, and Emelie. Firstly, perhaps on the nuclear decision, we discussed it in last quarter, I think, and you said that it could be something for the first half.
Could you just update us on where you stand there given the still strong momentum in that area?
Yes. I mean, the project is ongoing because we run this as a project. We have not come to any conclusions yet and the first half year hasn't gone yet. We are looking for a decision early autumn and it has to do, of course, how much needs to be invested, how do we view the market, what are potential competitors doing. I think one of the more delicate questions would be how would we scale it up? We're not done yet, but we're working with it a lot. Still something for the first half, potentially? I think internally we will come to a decision just after the summer.
Okay. That's super.
Then also on a strategic note, just on your M&A agenda, you now have net cash of, let's say, SEK 500 million. Could you update us where you stand there?
Yes. We are looking at a couple of acquisitions in one of the key segments. I'm pretty positive on those, but you never know. It has to be finalized, and there's a lot of work to do until we do that. We are actively working with a couple of targets.
Okay. The pipeline, has that sort of changed in any view or in any way?
I think the main way it has changed is the one I referred to has come further in the process. I think that is the biggest change.
Okay. That's super. Then on margins again, I just try to sort of understand how that can play out.
You said in Q4 that underabsorption was 100 bps impact. It's now 100 bps. How did it look in Q3 if you can remind us? Did you have a headwind also there, i.e., for the second half this year that headwind could fade or how should we sort of think around that?
Honestly, I don't have that number in front of me, Viktor. Yeah. We can get back to that later on. But I guess that, as you pointed out, that Q2 sort of similar impact as in Q1. But it feels like in Q3 sort of comps will look better from that perspective. I think what I mean, we have reported from a market point of view roughly the same thing now in a number of quarters. Some segments strong, some segments weak.
I would say it was during the second half of last year where sort of the weakest segments from an order point of view started to impact revenue. But I'm not sure exactly how it was in quarter three. We have to come back on that.
Yeah. That's fair. And then final one on my side, just Book-to-Bill and your new disclosures. You have 102% Book-to-Bill on a rolling basis and a better indication for growth ahead. And you mentioned during the call here that still revenue growth in the cards for this year. But how should we think around Kanthal at 90% Book-to-Bill? How does that sort of set that division up for organic sales growth for the coming quarters?
First of all, if we look at Kanthal, medical continues strong. So that has a nice impact on Kanthal.
And then I think the comment I made to a previous question, when we look into sort of the subsegments of industrial heating, we believe. I'm normally, as I said, I'm normally careful of saying too much on this. But I am, and actually overall for Alleima, more positive on the market now than I maybe was a quarter ago. I think the weaker ones have looked as they have stabilized. Some of the weaker ones have improved. And with the insight we have in Kanthal, we believe that, for instance, second half of the year will be stronger than the first half of the year.
Okay. And follow up on that, sorry, but on the margins because I guess slide 10 was very good to see with our industrial volumes that are 20% below 2019 level, still strong margin.
But I guess is it fair to say that despite a bit weaker industrial heating, this is sort of a trough margin from that context if short cycle recovers?
I will not state that this was a trough margin. We don't make commitments to trough margin. But if I put it this way, then this was a weaker margin than I expected and I expected to be better going forward.
Okay. That's super. Thanks a lot. Thank you all for back.
Operator, do we have another question?
Yes. The next question is from Fredrik Agardh with SEB. Please go ahead.
Yeah. Thank you. Hello. I was just also following up on Kanthal. So partly the question has been asked. But I mean, there's been a magnificent recovery in margins or increase in margins in the past couple of years.
And we say that they have readiness to mitigate what weakness there is. Should we use 2023 margins as a base for that? Is that sort of where you think you will be even in a weak scenario and with the actions they can take? Or is that heading lower if we see continued weakness and no refill of the backlog?
Oh, that's a good question, Fredrik. I don't foresee any larger margin declines at all. So maybe I think maybe your estimation is a fair estimation.
Okay. Thank you very much. I think that's it. Just one more question if I can. The alloy surcharge impact top line, would you expect that to be in Q2? I guess that's just mechanical from what you see in contracts and doesn't affect earnings, but it does have a margin impact. So could be helpful.
It's mid-single digit, negative mid-single digits.
Okay.
Thanks. Well, that's all for me. Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Igor Tubic with Carnegie. Please go ahead.
Thank you, operator. And thank you, Göran, Olof, and Emelie. I just have two broader questions also. I remember that you mentioned once that in terms of M&A that you might start to look at larger acquisitions compared to what you have made before. Is that still fair to assume or how should we think about that?
I don't recognize that comment. I think what I've said at some point is that they don't necessarily need to be at the size they've been. It's more the nature of the business where we looked like.
I think I've said at some point mentioning one example, if that would have been twice as big, we still would have looked for them. So it's not necessarily that we're looking for larger. It's more the kind of companies we're looking for are normally in the size where we have done acquisitions.
Okay. Thank you. Just a broader question, the next one as well, in terms of industrial segment. If I remember it correctly, you mentioned in Q4 that the demand among some larger customers has started to improve. Is that still the case or has the demand widen, so to say, among other customers as well?
Yeah. It's the same comment. I think one of the larger customers are a little bit more positive now than before. Yes.
Okay. Thank you.
Once again, to ask a question, please press star and one on your telephone.
There are no more questions at this time.
All right. Should we give it another few seconds maybe? Let's see. No, don't seem like it. So with that, I would like to say thank you for listening and hope to see you all again soon. So thank you and goodbye.
Thank you, everyone.