Okay, somebody turned off my microphone. Sorry for that. I start again. So net sales decreased in the first quarter with 1% to SEK 2.2 billion, operating profit increased by 15% to SEK 223 million, and profit after financial items increased by 20% to SEK 221 million. Profit margin before tax EBT was 9.9%, which is a record for AQ, and profit after tax was SEK 185 million. And then the cash flow was really good at SEK 244 million, and profit per share for the first time was about 10 SEK per share. And the board for the AGM that will be held later today has proposed a dividend of 6.66 SEK per share and a share split of 5-to-1. So it's a double dividend that is proposed. So it's really good, I think.
Hopefully you heard it, but the earnings per share growth for AQ has over the last 10 years been 15%, but if we take this rolling 12-month after Q1, it will actually lower to 14%, CAGR. It's still really solid. And if we look at the earnings per share growth versus first quarter 2023, it was 17%, and compared to quarter four in 2023, it was 37%. So it's, I would say, really good improvement. And in quarter one, we had a net sales of SEK 2.2 billion, as I said, and it is a slight decrease compared to the same quarter last year. We see, and there also, we had a positive effect of 1% of currency as well, so really a volume decline of 2%, which is not that much, but it's still a decline compared to the increases that we've had previously.
We see that capacity and demand are more balanced. We are starting to catch up on our deliveries, and also our productivity then becomes higher, affecting the margin. We have a little bit of decreased order backlog now compared to the same period last year. If we look at organic growth, as I said, it was -2%, which is below our target of 10% growth. We have lost some business in our battery systems factory in Bulgaria, as I communicated already in quarter four. We have some lower sales in certain market segments. We can see some decreases in inductors for frequency drives, also mechanics for that, and components for construction equipment vehicles. The increases are mainly in, because we are increasing in several market segments as well, and we see increases still in electrification, defense, industry, and railway and marine, which is positive.
Acquired growth, we have zero still. The acquisition of JIT Mech that was announced in quarter one will be within the AQ family from quarter two, and we expect that it will add about 1% growth in 2024. We get more to that later on in the presentation. We have a lot of prospects in the pipeline, as always, but we are very picky with what we buy. But I hope that we can close some more deals during the year. It's our target, at least. And margin-wise, it is our best margin that we have ever had in AQ, earnings before tax. We are happy with that. It is due to we have lower costs for late deliveries and quality non-conformities in the quarter. We have implemented several process improvements to improve our delivery performance and our productivity, and also our quality.
We see big improvements in Finland and China in the quarter. And it has been also hard work from our purchasing departments, which have a great impact in the quarter. However, we still have some sites that we can still improve. But as I have said previously, with AQ, you can expect a stable margin between 6% and 10%, and it is very clear that if you look on these quarters that are in the picture, you see that the margin is really in between there. We have now been several quarters, 5, where we have been above our target of 8%. But in the picture, it's actually more quarters that are below, so. We are still fighting for our margins, you can say, even though the margin in this quarter was really good. Inventory background, turnover development, I think it's very stable.
We are seeing a little bit increased inventory in the quarter. We have several projects that are supposed to be delivered out in quarter two. Yeah, I think it looks good, even though our target of the inventory turnover is 3.5, we are at 3.1, and I think we will see improvements during the quarter. We have a very dedicated team that is working on this, and we see that we have made improvements before, so we will continue with our improvement work. It's really important for our cash flow, but also for the risk of the companies. A lot of the balance sheet is in the inventory, so we should work hard with this. It's really super important for us. Net cash from operating activity is very solid.
We usually say that we should be around EBIT, and it is really close to EBIT here in the quarter, our net cash from operating activities. So we see also that our net debt is actually not a debt anymore. It's that we have money in the bank, more money in the bank than we have debt, so it's really stable and good. But we should know that in quarter two now, we plan to pay a dividend of about SEK 122 million and also do the payment for JIT Mech of SEK 40 million, so then we will be about zero. But this is a really strong balance sheet, and I see that we have a lot of dry powder to invest in growth with our current customers, but also to buy other companies, I mean, to acquire them. So that's a really good situation to be in, I believe.
Quality and delivery precision, we've been looking at the delivery precision, and we see that it is getting better and better. It is still very far from our target, but we are happy with the improvement that we are doing. We still have a number of companies that we focus very, yeah, a lot on that they should get back on track. I really believe that we will have maybe two companies left after Q2 that still are struggling, but we are working hard to improve all our companies to reach our target of 98%. It is, I think, super important also for our customers that we are improving, and it is happy to see that it's going in the right direction. Some examples on future growth then. I want to show you a little bit about our newly acquired company.
We, as announced earlier this week, we were approved by the authorities as well, so now we can go ahead and acquire JIT Mech as planned. JIT Mech is a supplier of big welded and machined components for demanding industrial customers. When I say big, it's quite big components that they are doing, and it is new for AQ. We don't have really a workshop that do these types of big products. It's low volume, high mix. Customers are in electrification, defense industry, and agriculture automation, and customers are in the north of Sweden. JIT Mech has very high technical competence, and they work extremely closely with the customers' R&D to develop this product that they produce. I would say that they have good and well-maintained equipment machines with factories in Robertsfors and Örnsköldsvik, where Robertsfors makes, I would say, medium-sized parts, and Örnsköldsvik makes really big parts.
They have about 75 employees, had net sales of SEK 130 million with profitability in line with AQ Group, and it is a cash out for SEK 40 million at closing for AQ. As I said, they will be included in our group after Q2. You can say when going to this factory, this is the type of products you will see that you see on this photo, and it is really you fall in love with the people and the products that they produce because they are super difficult to make these types of parts. The people are dedicated and really passionate about what they are doing. You can see also on the customers there that there are a lot of customers here that are similar to what AQ Group have today, but here we add something more.
And I think together with JIT Mech, we can come with some financial firepower and invest more in these people up here in the north of Sweden, and then we will grow this company a lot, I believe. So this is a really exciting opportunity for us, and we're very happy with this acquisition. And they're doing crazy things. You see this yellow part here on the bottom. It is a contact for connecting underwater sea cable. And you can imagine how difficult that is, that six-meter-long connection welded part, which is for one of the customers. And yeah, it is really cool. Cool products that they do, and super nice and smart people up there, dedicated. So it's fun. So very happy with this acquisition. So our acquisition team have done a lot of good things. So now I try to today also to speak a little bit about electrification.
Electrification can be so many things, but some of these things we have shown before. We, on the top left, we call it Project Korv Kiosk or Hot Dog Stand, if you're in the U.K., because it looks like a hot dog stand, but it is a big cabinet for inverter, for solar power and wind power. It is a new product that we will start to deliver in Q2 and from our factory in Pernik, and it's a lot of welding, painting. It is a really cool product, and it will go to Germany. In the end, the customer is there. On the top right, we have a nice battery system or a battery module, I would say, that we are now working with several customers to sell. We bought the IP really cheaply for like SEK 1 million from a Gothenburg-based company that went bankrupt.
We see a good potential in selling this product to several of our existing customers. This is really nice, and we have met several, and it's a big interest, in fact. We think that it is really fun. In the middle is also batteries, and that is enclosures and batteries for data centers, where we have the first order now for those red enclosures there. But we are also offering wire harnesses and copper bus bars to these customers. It's also in Germany. On the bottom left is also kind of a battery. It's a rack for a supercapacitor that we are doing for one of our customers here in Sweden. But they have won their first projects now, and we believe that we will start to deliver those racks by the end of the year.
But there will be a lot of these types of racks, so it's really fun. Then on the bottom, we have a battery for an electric bike, and it is the Bosch electric bike, and we are doing the complex parts, the end parts there, you can see, both ends. And we have won now 3 more projects from them from our factory in Hungary, and it's plastic injection molding in this case. So a lot of battery storage in this picture here, but in different forms, so to speak, what we do. If we go to the next slide, we have, and this is an accident, actually, but almost all the trains here are red and white. It is funny. But these are projects that are ongoing at the moment, where we have a lot of content, both electrical cabinets, drive controls, and inductive components.
So it's an EC 250 on the top left. It's a TRAXX locomotive on the bottom left. It's an Italian train on the bottom right for Hitachi Rail, and then it's on the top, it is Deutsche Bahn, German train, where we deliver a lot of sheet metal boxes, electrical cabinets, and hopefully also the driver desk. It's a lot of new products and fun stuff. And then the last slide for today is that we have secured a lot of orders in China for electrical cabinets for RORO ships. It is an existing customer to us that builds this. In these kinds of ships, you can lower and higher the ceiling or the floor, and the electrical automation for that, we are delivering the electrical cabinets from our plant in China. You can see a Höegh Autoliners there.
They are delivering a lot of cars, and then you need this kind of RORO, roll on, roll on, roll off technology. And on the right, you see the nice, beautiful Wasaline hybrid ship, which lowers the carbon emissions from this ferry line in Finland by 50% by using batteries in the propulsion. And we have delivered both the big transformers for this ship, but also the inductive components for the drive units for Danfoss. So it's really nice. You can watch films of this on Danfoss' website. It is really a nice ship, and it is good also for the environment. We believe that we will grow in this year quite a lot in the shipping business, in our shipping business, marine business. And that was the last one. So why to invest in AQ Group?
I think we will continue to try to increase earnings per share with 15%, like we have done over the past 10 years. You can see also that we are increasing the profit per share also in quarter one. We have been very stable and showed profit every quarter since the foundation in 1994. You can say that it shows that we have good control of our company, and yeah, we are very fast to act when things happen up and down. And then we have exposure to these underlying growth segments and companies that I have told you about just now. And we will continue to acquire factories, and that will be fun. And then we have an extremely strong balance sheet as well, so it's really a low-risk investment. And then we move on to maybe the most exciting part, the questions.
So if you raise your hand, then we will try to answer your question. Karl, please go ahead.
I was muted, sorry. Good morning, James, and congrats on a strong margin here in the quarter. So I was wondering a little bit on the margin side here, since it was surprisingly strong, if you could talk a little bit about how sustainable you think the margin is given, yeah, lower sales, and how much is maybe driven by a mix that some of your maybe larger customers with lower margins are decreasing more, so to say.
No, but I mean, it's a lot of factors affecting the margin, of course, but I think that we try to say it in the quarter. We have screwed up less in the quarter, which improves our margin, so we have been delivering on time with better quality, and then we get also higher productivity when we have control of our production processes in the shop floor. It's really easy to lose 1% of the margin by not doing the right things in the factory. So I think that is good, but of course, there are different margins in different segments as well, but I think in general, it's more of a productivity thing this quarter. And I think, as I've said before, we promised to be between 6% and 10% because that's what we have done over the long term.
And then we are, of course, trying to move ourselves upwards so that we can have stability between 8%-10%, but we want to prove that. So it's maybe not to answer your question, but we will, of course, try to keep this margin because I think the more there is, in a way, also that we're trying to shift to do more difficult parts all the time. I mean, get more demanding customers that have more demanding parts, and then I think we add more value, and then we should be able to have a higher margin in the long term. But it's a long journey, so.
Yeah, there's no one-offs in the quarter impact in the margin positively, it seems.
No, there are no one-offs in the quarter. Then we would have said so.
Yeah, yeah, that's great. And then I was wondering a little bit on the sales situation, on the demand side. What are you seeing right now? I mean, are you seeing that sales are continuing to weaken, or is it at quite stable levels right now, you would say?
It's a very big mix between the different market segments. I think that it is easy for you to read in our customers' reports. We can say that, I mean, construction equipment for Volvo is not good at the moment. It is clear, I think. I think buses are quite good for Volvo. The trucks are quite stable, I would say. And I mean, that is a big part. And then Penta is quite low. So I think that's. And then if you listen to ABB and look at them, they are still increasing the sales in quarter one, and they are, of course, our second biggest customer. And then we have Hitachi, which is growing like they should go 5x , I think, over the coming three years or so.
So I think there are a lot of growth potential there, but it's mostly down to us to be able to catch the new business and work with our customers and win new things and increase our market share. So we are still not big enough to just say that it's market up and down. It is down to us to win new business, really. So we have to run and fight with the competitors and be good at what we do.
Yeah. Just on the pricing side, is it possible to quantify how much price contributed to your organic growth here in Q1?
It is a little bit tricky. I think we still have some spillover at some customers, but I would say it is quite flat in the quarter compared to the same quarter last. So not decreasing, not increasing. So it is volume 2% down, I would say. That is what you read in the report.
Okay. And then just the last one from my side on receivables was up quite a bit year over year, I noticed, in the balance sheets, despite lower net sales. Is it a specific reason for this, or?
I think that we are learning from our customers that we need to work on our, yeah, sorry, receivables, you said. No, but we are working hard to get, and it is different payment terms with different customers, I would say. So I think that is the main reason. So it is a little bit up, that is correct.
Okay. That's all from me. Thank you.
Yeah. Johan, please.
Yes. Good morning, everyone. Just James, a question on the order book. You talked about lower order book year-on-year. If you were to sort of adjust for that energy storage business that is not in the books, I guess, is it still down, and approximately by much, would you say?
Oh, but I would say that it is, as I tried to explain in Karl's question, I think some of our customers have lower sales, and some are increasing. But if you adjust for the lost customer, I think it is 2% exactly. So then we are quite flat versus last year. But it's more going back to normal after having two years where all our market segments, all our geographies except China, and we won a lot of new projects made us grow over 30% in, or 27%, I think it was in 2022, and then quite a lot in last year. It's not the same now. So some things are down, some things are really strong. It's more back to normal, I would say.
Gotcha. It just seems as many of your clients, the way they place orders have pretty much normalized. Would you say that visibility has decreased for you guys compared to one year ago?
I would say yes.
All right.
We still have the forecast and so on, but the orders for the big projects are not placed as far ahead as they were a year ago.
Okay. Just a final one on the margins. It just seems as if delivery precision, it's extremely important for your margins, just looking at the year-on-year progression. And still, a significant opportunity to continue to improve on delivery precision is. I'm just curious why you're not more optimistic on margins in that sense, as there seemed to be significant improvement potentially here?
Yeah, but it is always hard with statistics because we see that the delivery performance is improving in percentage, but I would say the delivery performance is improving more if we count the days that we are late. So as you say, there is a big improvement potential there to both improve the inventory turnover, but also to, I mean, even get more happy customers, if I say like that, by improving the delivery precision more.
Thanks a lot.
Thank you, Johan. Okay, Sindre.
Yes. Good morning, James. Congrats with good results and fantastic profitability. Just touching upon actually here the same topics as Karl and Johan did, but also listening to peers, which most of them have alluded to decreasing demand and also less visibility as you do. But they're all pointing to destocking among customers, partly as opposed to, let's say, real underlying demand. And what's your take on that situation? Is it more a demand issue, or is it more like just a kind of inventory correction?
I would say it's not. We are delivering a little bit where there can be, let's say, for small motor drives, there can be a destocking effect in a way. But I mean, there is no stock of trucks or buses or construction equipment, really. There is no destocking effects there. It is demand-driven. And the same with the trains and ships. There is no stock of that either. So I think the customer products that we have is not what you would carry in stock. So I don't believe it is a destocking effect in our case, at least.
Okay. Great. Thanks. Just on capacity utilization, I mean, I believe this is the first quarter with negative organic growth, at least since 2020. Should we be worried about capacity utilization in any of your factories and then leading to underabsorption of costs?
We are fast in decreasing our costs. If the volumes would turn down, then we are quick to adapt to new situations, and we have a flexible cost base. So I think we showed it in 2020 when the volumes were quite low, that we were really good at adapting our cost base. So I don't, you never know what happens, but I'm confident that we will be very quick and resilient in that case. And then, of course, we have some capacity now to sell as well because we have invested quite a lot during 2022 and 2023. So that's a good situation to be in as well because there are still a lot of companies that I've tried to show that want to buy significant volumes of parts and that are searching for suppliers.
So I didn't even mention the defense segment because I have done it now a number of quarters in a row, but I mean, it is growing like crazy. So I think there are opportunities where we can fill our factories with more difficult products, especially then electrification, defense, medtech, these kind of things.
Okay. Final from me on M&A. During the past six months, you've been, let's say, quite forward-leaning about closing acquisitions before the end of the second quarter. And now you did a JIT Mech acquisition, and I mean, that looks very interesting. But at the same time, as you have grown rapidly, it's only like 1% of the turnover. So is that the one you have had in mind, or should we expect to see more acquisitions in the near future?
I mean, my team here, we are working very hard to close more deals. That's what I can say. But then again, it's very hard to promise if we are able to close them or not. I mean, we want to make good deals for ourselves because we don't want to be sitting with shit afterwards. So we cannot be too stressed either that, okay, we need to grow in quarter two or something. We need to buy nice companies that we will want to have in AQ for 20 years more, and that will continue to grow. So I think we have opportunities, and we are finding opportunities, and we are trying to make deals. So that's all I want to say. But yeah, for sure, I have said that I will eat my hat if we are not SEK 10 billion turnover in 2024 with 10% EBT margin.
This is internal target. And let's see if I get to eat this hat on my wall or not, but I will try my best not to. That's what I can say.
Okay. Because that was my final, final, the 15% growth target, which you clearly expressed like at least no more than three-to-six months ago. How does that look now in light of, let's say, recent market dislocation?
No, but of course, it will be super tough for us to do it. I think I have expressed it before as well. We will fight and do everything we can to reach the target.
Great. Keep on fighting, James. Thanks.
Thank you. Any more questions? Very good questions today. Fun.
Hi. Karl again here. May I ask a question regarding China? You were quite positive about, or quite positive, but you said that you expect China to turn around here during 2024, last time we met. Are you seeing improvements in China, or can you say?
Yes. The team in China have done a fantastic job in adapting the cost base, working with the customers. And I think China looks much better, in much better shape. It is really fun to see, but we expect also that we will start to grow in China again. So that is still on the cards. But operational-wise, it looks really good, I think, with good leadership there. So it's fun.
Then just a question. I know it's hard for you to answer this maybe, but on the electrification side, you mentioned you have several growth products, etc. Is it possible to say what electrification, your electrification offering, how much it grew here in Q1?
I draw out. No, I can't say, actually. So sorry about that, but it is.
No problem. It's growing.
Yeah. Yeah. It is really growing. So that is really a very good segment to be in. And I would say especially this power in the power grid segment, there is a lot of business to be won, and it will continue to grow as well. So we are very positive in that regard. So I think, yeah.
Yeah. That's good.
Yeah.
Good. Any more questions?
With that, I can only say that AQ is celebrating 30 years this year, and we have our annual general meeting today, and it will be a pleasure. I hope I will meet several of you there. So yeah. Wish you a great day. Thank you. Bye-bye.