Hi, everyone. Welcome to the presentation of the Q4 and full year 2022 results for Alleima. Excuse me. My name is Emelie Alm, I am Head of Investor Relations. I'm joined here by Göran Björkman, President and CEO, and also Olof Bengtsson, CFO. Göran and Olof will take you through the results, we will then have a Q&A session. You can ask your questions through the conference call, you can also write them in the field below the web call. You can download the presentation from alleima.com. Safety is a top priority for us, as you know. I trust that you are safe now and that you know the safety routines of where you are located. With that, I would like to hand over to you, Göran.
Thank you, Emelie, and also from my side, a warm welcome to this call, where we will present the Q4 results for Alleima. Let me start with the quarter four highlights. Start with an overall solid market sentiment, strong order intake, organic growth on 17%, and strong order growth in several customer segments. For instance, oil and gas offshore investment materialized now into significant orders. This is where we had a delay in quarter three that was catched up in quarter four, and the trend is continuing to be positive. We'll also see continued subdued demand in the short cycle business with flat sequential development. This is mainly referring to our business in the industrial segment. Revenues grew 14% organically, and the backlog continued to be solid.
We improved earnings, adjusted EBIT margin of 10.8% versus 9% last year. High revenues, improved product mix, and positive contribution from currency helped that. Of course, also successful price execution that now fully offsetting cost inflation. I think this is something we've done really, really well. We have a strong sequential cash flow improvement. It's been a eventful quarter. We have committed to the Science Based Targets initiative. We are capitalizing on the green transition by exciting new orders, and I think it's nice to see that this trend is continuing to drive business within Alleima. Was acquired Endosmart, a nitinol expert for medical devices. If you look at the full year 2022 highlights, a year with record high revenues.
Organic intake grew 19% for the full year, organic revenue growth of 30%. We have positive book-to-bill on 120% for the full year. Meaning, of course, we enter 2023 with a good backlog. We improved earnings, adjusted EBIT margin 9.1% versus 7.6% a year ago. Also here, high revenues, improved product mix, and for the full year, price increases fully compensated the cost inflation. Board proposes a dividend on SEK 1.40 per share, which corresponds roughly to 38% profit for the period. Of course, adjusted for metal price effects. Other highlights, well, it's been a very eventful year for Alleima and for the organization with the listing on the Nasdaq Stockholm, rebranding to Alleima. We made 3 acquisitions, now Endosmart in Q4.
We did Gerling, a German company in hydrogen business in the first half year. Also one of the acquisitions was where we bought out the minority stake in a joint venture for our extrusion business in U.S. We continue to do footprint optimization and also growth investments. In just a few weeks, I will travel to India and inaugurate our latest growth investments on our Mehsana plant, where we now have a factory for instrumentation and hydraulic tubes. Look at the performance versus financial targets. First of all, one needs to say that this is one year, and we, all these targets are over time, but still I think it's a good result. Organic growth, 13%.
It's not an exact science, if we look at the total serviceable addressable market, that grew by 13%, but that includes also metal prices. In our organic, we exclude that. If we add that on, it would be then 24% for us, well over the market. Earnings 9.1%. We basically have no debt. As I just said, the board proposes a dividend on SEK 1.40. Looking a bit deeper into sustainability, during fourth quarter, we committed to the Science Based Targets initiative. We continued to focus on improving our safety performance. I would say this is the only thing in the report I'm not satisfied with, despite that we put a lot of effort into locally drive safety behavior, safety performance.
This is an area where we have not developed in the right direction during the fourth quarter, we need, we just needed to try harder. We have an increased share of recycled steel. Also looking at our green gas emissions, they are going down, and the number of female manager has also increased. Apart from safety, all the sustainability KPIs are really developing in the right direction. Let's take an example of sustainability, but when it comes to our offering. We had a breakthrough order for tubes for carbon capture and storage, and actually this application is more towards storage.
You capture the CO2, you pump it down in old gas or oil wells, then you need to pump down water to keep the pressure so there's no CO2 leakage, and that is that application we sold tubes for. I think it's interesting to see that this is existing products within our, within our portfolio that now also fit into this sustainability world. I mean, sustainability really drives our business. Looking at the market development, as you see on the arrows, some are up and some are down. Most customer segments remained on a positive or stable trajectory, so supported by long-term trends. Oil and gas, offshore investments, as I said, it's a catch-up from a weak quarter three. The ongoing trend is continued to be positive with good investments in that sector.
Chemical and petrochemical, this is positive in all regions, but I would say Asia is leading that development, important for our application tubing. Industrial heating, strong development and looking at what kind of industry sectors that is supporting that. It's business like semicon, solar, glass, steel. Transactional sales may be slightly down. Transportation, this is mainly aerospace. Strong recovery from the big drop during pandemic. Aerospace is back on track. Medical, strong underlying development, as I said before, one major order of SEK 350 million in the medical segment. Hydrogen renewable energy, still our smallest segment, but a very positive trend. As I just explained, we're finding new opportunities. Some of them are down. The short cycle refined products down, but important to state, flat sequentially.
This is mainly Europe, also America, it's for our low refined products. In Europe, it's mainly billets for wire rod, while in America it's mainly hollows, meaning starting materials for another one to make tubes out of it. Consumer is negative in the quarter. This is mainly to the products that you don't need to buy on a regular basis, like white goods. We're also seeing knife steels is slight, this is slightly negative on a quarter-on-quarter. Mining and construction, negative. Our view is that it's mainly stock reduction at our largest customers. Overall, Asia is still positive, I think this slide really shows the strength of Alleima, where our wide exposure means that if some are down, others are up, which is a clear strength.
Let's look a little bit deeper into order intake and revenue. Order intake, growth of 17% and total order intake in the quarter of SEK 5.8 billion. Organic revenue growth of 14%, total revenue close to SEK 5.2 billion. A strong book-to-bill in the quarter, 113%, and for the rolling 12, 120%. Well above 100 means that we enter 2023 with a solid order backlog. Let's look a little bit deeper into order intake and revenue, what it consists of. You see both on order intake and revenue, the orange line is the rolling 12 months trend, and in both cases, it's going up. You can also see that both alloy surcharges and currency are bringing up the numbers, but both on organic...
Both on order intake, on revenue, the organic growth is quite strong. Let's move into earnings. Excuse me. We have an adjusted EBIT of SEK 555 million, roughly SEK 200 million more than the quarter for 2021, which gave a margin of 10.8%. It's high revenues and favorable product mix that is driving this, but also slight positive impact from currency on SEK 14 million. I mean, our price increases are now fully compensating for the cost inflation, both in the quarter and also for the full year. I think this is something that the Alleima organization done in a very good way. So that 10.8% still, since our KPI is that we reduce metal impact from EBIT, but not from top line.
With the high metal prices, this is diluting our margins, and in the quarter, it was diluted by 80 basis points. Looking at the full year, the EBIT margin came in on 9.1%, and the other dilution was 90 basis points. Excluding that, it would have been 10% then. Reported EBIT on SEK 407 million. The difference, of course, the metal price effects of total of minus SEK 149 million in the fourth quarter. I'd also like to state that we have a strong sequential cash flow improvement in the fourth quarter. Let's look into the division, starting with the largest one, the Tube division. Organic order intake growth on 19%. We have several umbilical and also OCTG orders for oil and gas segment.
We reported major orders of totally SEK 755 million. We also see strong growth in precision and titanium tubing for the transportation segment. Tube is where we see the demand for the low refined products in the industrial segment, which declined year-over-year, but it remained stable on a sequential level. Organic growth of 12%, mainly driven by the oil and gas segment, as well as application tubing, to chemical and petrochemical, mainly in Asia. Adjusted EBIT margin, 10.2%, same as for the group, increased revenues, of course, and a positive product mix, also price increases offsetting cost inflation. For the Tube, in the Tube case, we actually had a negative currency effect on SEK 50 million, the reason for that is due to project hedges.
The one I've already mentioned, that we are capitalizing on the green transition, entering to a new market with OCTG tubes for carbon capture and storage projects. Kanthal, strong order intake growth on 23%. We had our first-ever order, major order in the medical segment, a value of roughly SEK 350 million. Also strong industrial heating, mainly in Asia. This is, as I said before, glass, solar, semiconductors. Lower demand, however, for the heating materials related to consumer industrial segments, mainly in Europe and North America. This gave an organic revenue growth of 30% with a broad-based positive development and record high revenue for the medical segment.
If you look at the medical segment within Kanthal and look at the full year, last 2021, we in was SEK 375 million, and in 2022, it grew to SEK 650 million. Strong EBIT margin on 18.7% in the quarter, both increased revenues, product mix, also price increases offsetting price inflation. Kanthal had a positive currency mix, currency effect of SEK 11 million year-over-year. Once again, a high activity within the medical segment. We have now, during the quarter, acquired the company Endosmart, which is a nitinol expert, and a manufacturer of medical devices and components. Strip, organic order intake growth of minus 11%. They are so related to the consumer segment, so this is where we see a downturn.
I have to say, it's in minus 11% on high levels. Industrial and medical segments remain solid, but the negative development is in the consumer segment due to lower demand for mainly stainless compressor valve steel in Asia, but also for knife steel. Organic revenue growth of 33%, very good, driven by broad-based positive development across the division, reaching record high revenue numbers. Strong adjusted EBIT margin on 17.0%. Very good production output, I mean, what's giving the results, of course, the output, the increased revenue, improved product mix. Strip is a division that took longest time to, with price increases, to offset the inflation due to the sort of the nature of the business. They book very often annual orders, but now they are catching up.
In the fourth quarter, also Strip compensated for inflation. They had a positive impact on currency on SEK 90 million. In Strip, we can see that the medical sector is important. Booked an order for orthopedic implants during the quarter. Mr. Olof.
Thank you, Göran. Yes, let's take a look at the financial summary for the quarter and the full year. If we start in the upper right-hand corner, we see the growth for the quarter broken down, the order take and the revenues. A total growth of 37% on order intake and 31% on revenues. Organically, 17% up on order intakes, so very strong, and revenues as well, 14%. Currency is helping us, 9% positive on order intake and 7% on revenues. Alloys, still high. Alloy surcharges, 9% for order intake and revenue respectively. Summing up to 37% and 31% for those two lines.
Looking into the income statement, we have an adjusted EBIT in the quarter of SEK 558, corresponds to a margin of 10.8%, as Göran has mentioned, slightly diluted from the metal price effects on the top line. This is a clear improvement from last year, which was at 9%. This is an increase by 58%. Looking at the full year, we come in at SEK 1.6 billion, SEK 681 billion, corresponding to a margin of 9.1%. Also a clear improvement from last year. Metal price effects, SEK 149 million negative in the quarter, coming mainly from the beginning of the quarter, when metal prices took a dip.
Since then, metal prices have come up again, and so the effect is much less at the end of the quarter. The full year, we have a positive effect coming mainly then from the first half of the year at SEK 695 million. We have no items affecting comparability in the quarter. For the full year, we have SEK 250 million negative. That comes down from the separation and listing project that we have been through during the year. Net financial items, positive in the quarter, negative for the full year. This comes mainly from the valuation of FX hedges relating to orders, and obviously the currency, mainly the dollar then has moved in different directions if you look at the full year or the quarter.
Normalized tax rate is on the low side in the quarter, coming mainly from some U.S. effects. It comes in at 21.7%. For the full year, it comes in at 24%, which is more in line with our guidance. We take the next slide. Looking at the quarter and breaking it down into some bridge components, we see an organic development of SEK 185 million. That corresponds to a leverage of 33%, which we think is very good in the current high inflationary environment. We have some help of the currency and also some help of an acquisition. It's a German acquisition. That takes us to the SEK 555 and 10.8% margin adjusted EBIT.
If we take the next slide, looking at the balance sheet, starting off with the net working capital, it has increased year-over-year by roughly SEK 2 billion, and this comes from mainly than from the higher metal prices, but also from our growth during the year. This, of course, affects both inventory accounts receivables and with some relief on the accounts payable side. Sequentially, we are down on working capital, and this comes partly from lower inventory, but also a little bit higher accounts payable. I think all the divisions have done a very good job in reducing their physical inventories. In relation to revenues, we are up to 33%, compared to 29.7% a year ago.
Looking at the capital employed, it has increased with the same number as the net working capital. That is the main explanation then. This means that ROCE has come down a little bit in the quarter, but for the full year, that's actually increased to 13.2%. Next slide, please. Cash flow. Cash flow from operations amounted to SEK 1.1 billion, which is up from last year. Free operating cash flow, as is shown in the table below, SEK 801 million in the quarter, which is a very strong development, coming out of higher earnings and improvements in working capital. Sequentially, we are normally stronger in the fourth quarter compared to the third quarter, and higher earnings and also lower payments for raw materials compared to Q3.
If you remember in Q3, we had substantial payments to our suppliers coming out from the high metal prices in the spring of 2022. CapEx has also increased year-over-year and quarter, and this comes mainly from growth investments in the US and India and maintenance investments in Sandviken. Go to the next slide, please. The outcome of the good cash flow then is a very low net debt or almost no net debt coming out of Q4 2022. We have a very strong financial position. Looking at the components, we have pension liabilities of SEK 530 million. We have leasing liabilities, then in accordance with the IFRS 16 rules, SEK 391 million.
From this, we deduct our cash, and we have a strong cash position at SEK 883 million. This gives a total net debt of SEK 21 million or very close to zero then. The gearing ratio and the net debt adjusted EBITDA is also zero then. Looking at how well we guided you for the fourth quarter, if we start with CapEx, we guided for less than SEK 600 million in full year 2022. We came out at SEK 656 million from a higher level in the last quarter. As I just mentioned, this comes from some growth investments in India and the U.S.
In terms of currencies, we guided for SEK 100 million in Q4. We come out at SEK 148 million. However, the total currency effect is SEK 14 million post the hedges. Metal price effects, very close. SEK 150 million was the guidance, we came out at SEK 149 million. Tax rateWhen 54%-26% is our guidance, which we still have as our guidance, we came up with 24.3%. Quite close as there as well. If we look ahead into 2023, the first quarter and also some full year numbers, we estimate CapEx to come up further to around SEK 800 million. We are reaching more normal levels now for our CapEx spend, about SEK 400 million of that is related to maintenance.
Looking at the currencies, always difficult with volatile currency rates of course, but we expect them, the effect to be around SEK 100 million positive in the first quarter of 2023. Metal prices may be even harder to predict. But looking at the situation right now, we think that we will have a positive effect of SEK 300 million in our results in the first quarter. We keep our guidance on the participant rates. Few words about energy. On the right-hand side, as a reminder, we have our estimated energy consumption for total Alleima. If we look at 2022 versus 2021, we have seen an increase of approximately SEK 200 million, and this comes mainly from Europe. Asia and U.S. are not that affected as Europe is.
Of course we have been fairly well hedged throughout 2022, but of course, on the part that we are not hedged, we have an impact of course. Looking into 2023, this is mainly done for Sweden, which is the main consumer of energy. We have hedged electricity to 90%, natural gas to 60%, and propane to 50%. Of course, we have an active management of our energy consumption. We do hedging. We continuously monitor the markets and try to take good opportunities hedging ahead. We also have some flexibility in our production of trying to avoid the peak hours when electricity is as most expensive.
We have also applied energy surcharges and to some extent also base price increases, covering the energy, the increased energy costs. I hand back to Göran for an outlook.
Thank you, Olof. Obviously, I mean, we see a positive momentum in several of our customer segments, and supported by underlying trends. This is expected to mitigate impact of uncertainties in the macroeconomic environment during 2023. Demand is expected to remain subdued in the short cycle industrial segment and consumer segment near term, and this is especially in Europe and North America. We're going into the first quarter with a product mix that is expected to be similar or maybe slightly improved compared with the fourth quarter, and we do that with a solid order backlog. To comment on cashflow is normally lower in the first half of the year compared with the second half due to seasonal inventory build-up ahead of the summer stoppages.
If I should summarize, I think this is a strong quarter from Alleima, and I think it's very good execution from the Alleima organization. We see positive sentiment among several customer segments driven by strong underlying trends. The ongoing work for reduced cyclicality and mix shift is in progress. As mentioned a few times on the subdued short cycle demand and increased uncertainty staying flat on a sequential basis, we have a solid order backlog. One thing that has been very important during 2022, and I think we have done it in a very good way, is successful price execution. That will of course also be important going into 2023. We have a very solid financial position, and it's nice to see that sustainability continue to generate business for Alleima. Thank you.
Thank you, Göran and Olof. It is now time to start the Q&A session. Again, you can write your questions in the web first, or you can ask them on the conference call. With that, operator, over to you.
For questions over the phone, please press star followed by one. The first question comes from Fredrik Agardh from SEB. Please go ahead.
Yeah. Thank you. Hi, everyone. Just starting with a question on momentum on the top line. You're saying that you have positive momentum now. I mean, obviously that was the case in Q4. You're saying that this is gonna mitigate the weakness you're seeing. Does that mean that you expect flat demand, unchanged demand through 2023?
I mean, if you would ask me a year ago what I believed in 2022, I would have been wrong. Things happen. From what we see, we don't see a sequential downturn quarter by quarter in the industrial segment. Yes, we believe that's going to be flat, but it's difficult to predict.
Yeah, sure. Absolutely. I guess that means that you have good momentum in your niche products or where you have. You refer to it as the long-term trends that work in your favor. That's, I guess that's gonna be mixed positive then from the order intake through 2023, unless you're wrong, obviously, on what the cycle throws at you.
I mean, that is right, Fredrik. I mean, we, apart from the weak quarter three, we view oil and gas be strong 2023. We see the medical segment being strong.
Transportation.
Transportation. yes.
Okay, thanks. Just a brief question then on the drop through of 33%. Is there any mix? There's a slight mix in that, I guess. It's also volume, right?
I missed that. In what?
In the 33% drop through, the operating leverage that you have. I mean, obviously it's. Could you split the drop through, the margin accretion between volume and mix in that? Is there any chance of doing that? I guess the follow-up question then is, if you look at the base 2022 and look into 2023 and assume flat volumes, is the backlog so far mix positive that you have?
Yes, it is. Yes, it is.
Okay. You, from that base, you expect strengthening mix in the order mix through 2023 then?
Yes.
Okay. Excellent. Just, yeah, just one question then on the dividend policy here. You have 50% and you're paying out or you're suggesting 38%. I know this is a board and shareholder decision ultimately, but I guess they lean on the guidance from you. Why deviate from the dividend policy when you're debt free? Is there anything I'm missing here? Any M&A pipeline or any investments that we should consider?
No, no. I mean, Fredrik, you're right. This is, of course, the board decision. I support it. I mean, the target is not for every year, it's over time 50%. We have only existed as a listed company for five months. We are in a volatile industry. I mean, the view is it's better to start on the conservative side. I think that's a wise decision.
Okay. No, no accelerated CapEx for expansion or acquisitions that you're factoring into this that we should be prepared for?
No.
All right. Okay. Well, thank you very much. I'll leave the floor to somebody else. Thanks.
Thanks.
We have one question on... from the webcast. If you look at the product mix in Kanthal, is there any unusual mix that explains the high margins in the quarter? If you look at the trend for different segments, order book, outlook, et cetera, how do you think the mix will develop short and long term for Kanthal?
I mean, obviously, Kanthal had a very strong EBIT margin in the quarter. That was partly driven by, I would say, almost unexpected good result from sort of the normal weaker part of Kanthal, we call it, heating materials. I mean, they had a very strong quarter. Over time, medical growing fast. Over time, Kanthal should have a positive mix development by growing medical, and medical is the most profitable part of Kanthal. Once again, it was an unusual strong from heating materials in the quarter.
As a reminder, if you wish to register for a question, please press star followed by one.
We have another question from the webcast. The price increases are seemingly compensating for cost inflation. How sustainable is this? For how long do you think you will be able to raise prices, and is it necessary?
It's a good and almost impossible question to fully answer, but let me think out loud. I think first of all, cost increase is already happening quarter four 2021, mainly related to energy. We start focusing this early in the year. Since quarter two, we have been compensating by own price increases, and the full year was so. Of course, it's easier to increase price in a good market. We start to see in some of the segments where it's a little bit weaker, that it's more difficult to get the price increases. It will be as much focus on this also for next year. I guess it will be more hard work to achieve it during 2023.
The next question comes from Viktor Trollsten from Danske Bank. Please go ahead. Thank you so much, operator. Hello, Göran, Olof, and Emelie.
Hey, Viktor.
Maybe firstly on margins, also and on divisional margins. Just the Kanthal, the Kanthal margin in the quarter was, as you mentioned, you know, fantastic. Just to sort of try to understand you, as you point out, medical, one of the most profitable areas where you have taken, you know, the largest, you know, medical order, ever for you, if I'm not mistaken, which are going to be executed on in 2023, you still speak about, you know, positive mix effect, et cetera. In terms of, you know, margins for 2023, wouldn't there, you know, be upside from that perspective?
Yes, that is what we believe as well. When you do that equation, maybe you should not look only on quarter four. Look at the full year Kanthal instead, because quarter four was, as I said before, a little bit unexpectedly positive.
Yeah. Yeah.
With the strong growth in medical, your conclusion is correct, yes.
Yeah. No, okay. Also on cost inflation and maybe for, you know, the broader group, as you point out, you know, you're basically fully hedged on electricity, et cetera, which has been a main, you know, cost driver. Now when, you know, electricity falls or at least for the moment falls, you know, how will that play out if we assume the prices stay at this level? You know, will you still have a higher cost level than for 2023 also, or how would that play out?
Well, in the end, it depends a lot on the spot price development. Let me put it this way. We are higher hedged than we have been normally before. Of course, the hedging is not for free, so we are hedged on price levels that is higher than sort of historical numbers. Of course we always have the opportunity to stop the most energy consuming operation if the spot prices are really high. I don't think we should expect the same increase 2023 as we had 2022. I think you should expect slightly higher cost for us due to the hedging. That is to reduce the risk.
Yeah. Of course also depending on where the spot prices end on the unhedged part.
Mm.
That also has an implication, of course.
Yeah, of course. It's a, you know, clear answer. Just to understand, you know, sort of where you are in the cost or in a hedging cycle. That's clear. Then finally on, you know, capital allocation, and as, you know, Fredrik pointed out, maybe a bit conservative, you know, dividend, this year. Could you comment a bit about, you know, the M&A opportunity and where you would like to, you know, allocate, you know, the cash that you have? You know, how is the M&A pipeline, you know, looking?
I cannot disclose that in detail, as you well know. We have an M&A pipeline, as we have said before. Of course, we're focusing the segments where we have priorities to growth. Look at 2022, two acquisitions, if I exclude where we bought the minority part of the JV, is one in renewable hydrogen and one in medical. Those are the typical areas where we look, where we have the pipeline. I mean, it's not only capital allocation for M&A, it's also capital allocation for investments, and we have some ideas also there.
Okay. No. I'm sorry, maybe just one final, if I may.
Sure.
On maybe I take things a bit in advance, I guess we'll see in the annual report. On sort of, you know, the portfolio shift, are you ready to already today point out a couple of areas which should have seen or, you know, become a larger part of the group compared to what we can see in, let's say, the 2021 split? I guess medical is, you know, more substantial part of the et cetera.
Yeah, it's a science of big numbers. It still takes time. I mean, the medical part in Kanthal, I mean, they invoice SEK 375 million in 2021, and SEK 650 million in 2022. The total company has grown a lot as well. The share is a little bit difficult, and it sort of swings or develops quite slowly. You also need to look into the thing, recovery in oil and gas, recovery in aerospace, et cetera. Clearly.
Okay.
Clearly the development is in the direction where we want it.
Yeah. No, I guess that's what I tried to allude to. Thank you very much. Thank you. We have a follow-up question from Fredrik Agardh from SEB. Please go ahead.
Yeah. Hi. Thank you. Sorry for being back. I just have 2 follow-up questions. One on the... Sorry to be opinion on margins here, but I guess the main question, one main question here is what underlying margin sort of you can stage looking forward or going ahead here. You say you had 80 bips margin dilution from alloys in the quarter, and obviously very good strength in the alloys on the top line. When we roll this into next year, what would we use as a alloy surcharge component in the bridge on the top line, just looking at spot prices today? I mean, obviously they were up quite substantially in 2022, but looking into next year.
That's a really difficult one. I would say. I mean, We guide on the metal price effect in the result, but you're looking for the top line. I would say that's.
No, what I want to understand is that if you had dilution from top line on the upside, then obviously-.
Yeah
... if we get a stabilization or even contraction next year, that should give support to margins. Is that the wrong way of looking at it?
Yeah. Right now, I mean, metal prices are coming back to a high level. We have guided for a positive effect on the EBIT. I guess that will be, I would think some sort of a slightly positive metal price surcharge next year as well.
Right.
I can't really give you a firm guidance on that one.
Metal prices shift so fast, it's difficult.
Yeah. Sorry.
Just need to be prepared.
I know. Sure. That's fine. Trying to understand, sort of sort out what's underlying and what comes as a function of that metal pricing. The final one then on capital allocation, SEK 400 in growth CapEx. Is that something we should extrapolate then? SEK 800 million. Obviously, you're quite well invested in Hallstahammar and in Sandviken at the moment. I mean, you have SEK 400 million in maintenance CapEx, and you double that with growth. Is that a new level?
If you look back, I mean, both last year and a couple of year before that, I mean, we have pushed down CapEx to safeguard cash flow in the pandemic, and it takes time to ramp it up again. You're right, we need roughly about 350, 400 for reinvestments or maintenance investment. That can vary between years because sometimes some of those projects are quite large. The rest, yes, that is growth and also improvements. I mean, I will, in a couple of weeks, travel to India to inaugurate a new factory. I mean, all investments does not end up in Sandviken or Hallstahammar.
Sure. There is more growth CapEx to be done. I guess-
Yes, there is.
... 800 is a new level that you anticipate being at.
There, there is more growth CapEx. Yes.
Yeah. Okay. Well, thank you very much, guys. That's all I had for now.
Thanks, Fredrik.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Emelie Alm for any closing remarks.
Yes. With that, thank you all for listening, and thank you for all your questions. We're looking forward to meeting some of you in our upcoming roadshow. With that, thanks for today.
Thank you.
Thank you.