Yes, there. Now it's 2:30 P.M. and let's kick off this brief earnings call for the year end. Let's see here. I will do like that. I guess that you can see my screen now. See if I can just blow it up. There we go. Okay, I will have a quick welcome to AQ Group's year-end report for 2021. I'm glad to see that so many are interested in our performance. Here is myself, James, and Christina, our CFO, and we're here to answer your questions that you might have after reading the report. I assume that everybody who is here in the meeting have read the report. I will not go through it all in detail. I will just push on some key points that I see. Yeah, let's go.
First I will go through a little bit quick facts about the AQ Group. I think all of you know it. I will do it really fast. We'll go into the fourth quarter, full year, some highlights and lowlights, some key numbers, a little bit about market segment development in brief, and then Q&A. Let's go. AQ Group, quick facts. We are now roughly 7,000 employees. Our turnover for 2021 was about EUR 550 million, a bit less. We have seven business areas. We are present in more than 15 market segments. We have manufacturing in 16 countries, and we do deliveries globally. We have shown profit every quarter for 28 years, I think now.
We have had 16% earnings per share growth per year the last 10 years, and also in 2021. We do normally two to four acquisitions or factories per year. We're part of UN Global Compact, which is our ESG initiative, and we've been that for quite some years, since 2012. Then we go into the fourth quarter. We can say that we are super happy that we managed to break our own record and achieve record net turnover. Now I have some people waiting in the lobby. That is not so good. The net sales increased year-on-year by 19.2%. And our goal is 15% growth. We achieved that, and we're happy about that.
We're a little bit short of SEK 1.5 billion, but yeah, very close anyway. I mean, we have been struggling a lot with components and personnel because it's hard to get everything at the moment. So, we're really happy that we managed to get this much out. I can say that December was really a big push out for us of components and products that we delivered. Our operating profit, EBIT, decreased by roughly 9.4% to SEK 130 million, which is lower than the year before. I would say it's a bit disappointing, but it's yeah, I will dig into it later in this presentation.
We had our profit after financial items decreased by 0.5% to SEK 110 million, and that makes our profit margin before tax at 7.4%, which is, if you look in history, not a bad quarter, but considering the big one-offs we've had in the quarter, it is a little bit disappointing, I would say. Our cash flow from operating activities decreased by 164% because we're building a lot of stock because we have a lot of orders that we want to deliver, and we cannot really get all the components. Earnings per share after tax decreased by 5.4% compared to the same quarter last year, to SEK 4.76.
If we go into the full year, I mean, it's highest profit per share ever, with increase of 16% yet again, which is exactly on our average the last 10 years. Net sales increased by 13.5% compared to 2020 and by 7% compared to 2019. And our goal is 15%, and I can tell you it's not easy to grow at this pace, in this situation with component shortages that we have. We're really positive because our customers really want to do more with us and want to buy more. I mean, that is a really nice situation to be in, we're not complaining. Operating profit increased by 11% to SEK 446 million, which is also, of course, a record.
It is very close to SEK 500 million, which is quite good, I would say. Profit after financial items increased by almost 20% to SEK 441 million. I mean, we have a goal of 8% EBIT margin, and we beat that by delivering 8.1% in the full year. Cash flow from operating activities decreased by 60% to SEK 238 million, and it's mainly tied up in inventories and accounts receivable. Earnings per share after tax increased by 16%, as I said, to almost SEK 20 per share.
Our equity ratio is way above our target, and the board of directors proposed a dividend of SEK 3.33 . It is a little bit below our policy because we see that we will continue to grow at a rapid pace during 2022. So we believe that that was a good number, and also it is a little bit symbolic for us because that is the amount that we were listed on Aktietorget several quite many years ago. We were listed at SEK 3.33 per share. We think that's fun. Highlights in the quarter, as I said, record turnover despite shortage of components and personnel, and I mean, this is really a fight. Our supply chain people are really fighting to find material everywhere possible in the world.
At the same time, we see that it's really hard to get personnel into the factories also in both Europe and in North America because there have been a lot of subsidies from governments and so on, and also the movement across borders has been a little bit more tricky than usual. Despite that, I mean, we have a really high demand, and I think that we could have delivered out even more in quarter four, and it's the same message as in quarter two and quarter three. And we are doing a lot of investment to increase our capacity to be able to deliver more, and we're working hard with our supply chain to be able to deliver more.
Then we see also that the price increases are starting to give desired effect, but we need to do even more. I'm also very happy that we have received our first big order for battery storage system customer in Europe, where we deliver AC, DC cabinet, and it is a breakthrough order for us, and we believe that this customer can be a really big customer for us in the future. Now though that order will be delivered during February and March of this year. Then we have a really strong order intake in the marine segment. We're basically following their, and that is mainly through our transformer and electrical cabinet segments.
We are basically following the market there, that there is a lot of ships being ordered, and we believe that there will be really good turnover second half 2022, but mainly in 2023 going forward. We see also that we have really high growth in India, Estonia, in our med tech segment, also in our Sheet Metal Processing and Wiring Systems business area for vehicles. That is really nice. But as said, it's really difficult to deliver out everything that we want. The Schaffner Power Magnetics integration of that acquisition is going according to plan. We are getting cost synergies, and I think that in 2022 it will look better, but I think we will be ready completely with the integration in the summer.
It takes basically one year to integrate these companies, and we're doing a lot of activities there, replacing SAP as business system to our AQ more cheap ERP system and also reducing some high-cost individuals that are in these companies. And that will give a good effect. It gives a good effect already now, but it will give even better effect during second half of 2022. We're also very happy that we have made several organization changes, so right now I'm very pleased with my group management team and also the teams that we have leading our plant in Mexico. One of our plants in Bulgaria is new. We have some new people in Brazil, Estonia, and also in some plants in Sweden.
We have done a restructuring of our Inductive Components to our two factories in China to reduce cost and I mean to really reduce white collars there and realize synergies there related also to the Schaffner acquisition. We're happy that is done. Lowlights, I think that we have a decrease in our margin despite large price increases, and we will continue to work with price increases I think for the whole of 2022 due to inflation. Now it's not only material, it's also labor costs that are increasing. We see increase in energy and transportation. I think it's the same for all industrial companies at the moment. And then we still have a low on-time delivery performance.
We see a little bit small improvement, especially in some business area in our component segment, but in our system segment business, we still see that components for electrical cabinets and wire harnesses are very hard to find and to get in time. Also, as you have seen in the report, our inventory is really increasing a lot and that is because we are both growing at a rapid pace organically, but also due to this component shortages. It might seem strange that, okay, there are no components, but you seem to have components on stock, but that is the case that when you find something, you buy that because when you have found everything for an electrical cabinet, you cannot wait until then because then something else is missing.
You have to buy it when you find it, sort of. I think we have good customer agreements in place and we have a strong order backlog that where we can consume this inventory. When the component shortage starts to become stable again, we will see that the inventory turnover will go back to normal. We still have a lot of challenges in Mexico. We have replaced the leadership team there, and we are doing a lot of support activities. We see strong growth in this company as well, but still we have problems with profits, and it's a lot related to how we plan our material purchases there. So, we know what the problem is, but it takes some time to fix it.
In China, we have a bit of a volume problem, especially with our railway customers, where we see that the government railway spending programs have been a little bit delayed due to COVID. They have been putting a lot of money into COVID prevention, I would say, rather than in the railway sector. But we see that there is coming a lot of big government programs there that will stimulate increased rail spending, which will then affect our components that go into the railway sector. We think that volume will come back. We have a bit of productivity problems in some of our Inductive Components factories, but we're working on that, and we have replaced also some management people there in order to increase the productivity. This I've talked about already.
I think it's impressive for a company our size to continue to deliver like this, shareholder value. I think it's impressive. Our goal is to continue on this path also for 2022. Our net sales is increasing, and we would have sold even more if we would have had a supply of components, as you know. I will not comment that so much more. Organic growth, we're way above, but it is a little bit. I mean, we had really struggled during COVID, so they're a bit optimistic, so to say that we're way over. Then also we have price increases that also improve the look on the organic growth. We see that we.
Approximately, we think that organic growth in quarter four was 7%, and the price increases are about 5% . What we can say also is that we have an increasing backlog in several of our system business plans. Still we are delivering out much more than before, but we still see the backlog increasing. If we talk about acquisitions, we had the Schaffner acquisitions last year, and we are working intensely to increase our pipeline, and we have a number of prospects that we're looking at, but we're not really close to closing anything during quarter one at least. We are positive, and we will continue to buy companies, so that's fun.
If we look at the margin, it is stable within the range that we have said during the past meetings and also in our investor meetings. The thing is, in quarter four, we have some one-off profit from this pension repayment in Sweden and also a revaluation of receivables in the quarter, which is related to the bankruptcy of Segerström that happened in 2017.
2018.
2018. Sorry, 2018, where we have got a notification from the lawyer that we will get back a little bit more than we thought from that bankruptcy. If we look at the cash flow, since we are increasing our, we are growing quite rapidly, we are increasing our inventory, and we're increasing our accounts receivables, then the cash flow is quite scrappy in the quarter, to be honest. We think that the cash flow might not be that great in quarter one also because we will continue to see growth. We're not expecting to
We don't expect it to be like in quarter four continuously, but we still will struggle to get back to the numbers we had in 2020 at least, where we were not growing our business, and then it's easier to get cash. We see that the net debt is increasing a bit. I'm not really worried about it, but still it's increasing. We have a program this year also. I can talk about that when we get to the inventory slides. Also, we have a program this year to get back to normal level because we see in several of our business areas, especially in sheet metal and injection molding, that supply is getting back to normal.
We should start to see that we get back into normal inventory turnover there. That should at least lower the increase. Then we are working hard to get the components for the other business areas, but there we see that there is really no improvement there on the availability, especially on low voltage components, connectors for wire harnesses and other components that go into our system products. We can also say that, of course, the raw material price increase also has an effect on our inventory. I think that was almost it. We see also that our delivery performance is improving a little bit in December from an all-time low of 90%-92%, but it follows a little bit trend.
Normally, we have a little bit less deliveries in December because customers don't want to have it, have their goods on Christmas Eve. So normally, we improve a little bit in December, but we think that we are coming back a little bit at least to a better level now. We have these component shortages that really limit our delivery performance. If we look at the segments and how they are going, I can say that we are very positive on our vehicle deliveries. We win a lot of new orders, but those take time before they get into serial production. We win orders both in sheet metal and wire harnesses, and we are very positive about that. And we have also capacity in those factories to take those orders, so that's nice.
We see that the buses, especially these long distance buses, haven't really come back. Markets where we are dependent on that business are not really growing at the moment. In the electrical power and automation, we see a lot of activity and a lot of projects, and here if we combine this with the renewable segment, we see a big potential for growth going forward, both in stabilizing the net in storage of electricity from these renewable sources, but also in transforming the voltages from different levels. I think that these segments will grow quite rapidly.
In the railway segment, we see quite big growth in India, as I said, and also in the U.S. we see a big growth in the railway sector, where they are also switching from diesel locomotives to electrical locomotives. There we have a big role to play in the U.S. transition for lowering their CO2 footprint in the railway sector as well. In healthcare and medical, we see a strong growth, and we will try to add capacity in this field even further in 2022. Food and beverage is actually quite flat at the moment, and the same for vending machines and parking meters. That was it. Now we go into the Q&A. Now I'll see if I can get you. Let's do like this so I can get you. Let's see.
We have a raised hand there. Johan Dahl, you want to say something?
James, we can ask a question.
Yes, please.
Just very quickly, the activities you talked about for your Schaffner business that you acquired.
Yes.
Those cost saving actions, how far will that take you in terms of profitability in that unit, or do you need sort of a lot of more support from the market to sort of achieve a decent profitability in that business?
I think that we are very much on the way because the thing is that this Hungarian factory in Hungary and the one in the U.S. add a lot of capacity for us, and capacity is something that we have been missing. To give a little bit flavor on that is that we deliver today a lot of components from our factory in Estonia to the U.S., and those products we want to now transfer into the U.S. factory. The same is that our factory for railway products in Bulgaria is pretty full, and we are winning more projects in Europe. We can put projects both from AQ in Bulgaria and Estonia in Hungary.
We are transferring products from Estonia to the U.S. because our customers want us to be local there, but also it gives us more capacity because our customers in Europe are growing rapidly. We see that we are filling up those factories, and then we are reducing some especially white collar costs. At the same time, we're reducing our IT spending because they've had this SAP, which I don't understand how any company can have that because it's anything you want to do in the system basically costs EUR 100,000. We have a very much simpler system that is enough for contract manufacturing that we're implementing now in those sites. We see that as a big benefit.
Then we're realizing synergies in China between the two factories, and we will specialize the Schaffner old Schaffner unit in Shanghai. It will be specialized on inductors for drives and renewables, while the other factory in Suzhou will be specialized for railway. Previously, both of those factories have been doing a little bit railway and a little bit of the other. I think it is, to me, what I can see today. I'm really positive about this. I think that we also got that quite cheap, so quite happy about that.
Okay. Also finally on the delivery precision.
Yes.
Is it correct to read into that specific metric that you give us on precision? Is that sort of the missed volumes due to supply chain problems? Also can you explain why this becomes order book or a backlog for you guys? I would assume that your customers need immediate sort of delivery.
Yeah.
Would take it from someone else, I guess. Just explain that. Thanks.
Yeah. Well, no, I mean, normally most of the products we deliver, the customers can't take it from anywhere else. I mean, it's customized products. It's not standard stuff. If we are delayed, then they are also delayed to their customers. I mean, there is a huge pressure in many ways that we deliver. On the other hand, the customer normally has specified also the components that go into these systems. If we have a concrete example, for instance, if I take Tetra Pak, which is a quite big customer for us, they have specified that it should be Rockwell drives in an electrical cabinet, and then Rockwell cannot deliver. It is like, yeah.
We work together with Tetra Pak to get as much components as we can to be able to satisfy Tetra Pak's end customer, which is in a dairy factory in most cases there. I cannot say that it really translates into direct backlog, but I roughly it becomes that we. I mean, our backlog is growing, especially in this systems segment and it is a substantial amount of volume that we could have delivered out, but I wouldn't say that it directly translates because it's measured on order line and it's not a. I don't know if that was a good answer or not, but yeah.
Yeah. An approximation of this then.
Yeah.
Thanks so much.
Okay. Do we have any other questions? Sindre, you can maybe unmute yourself. Yes?
Yes, I did. I hope you hear me, James. Thank you. Very clarifying presentation. Just a few or two questions from my side.
Yeah.
You said that orders had increased. Could you give me even if you don't give a specific number, let's say in kind of an indication of your order book in percent of sales or and how that has progressed over the year?
I mean, normally you want to be quite steady in the delivery. I don't know how to answer it really in a good way, but basically we see it from all of our systems plants, and this is our Wiring Systems, electrical cabinets and system products, that they have an increasing order book and a lot of the goods that we see also in our inventory is semi-finished or the increase is semi-finished and waiting for a couple of components, and that can be quite big values. As soon as we get those components, then we can deliver out.
I assume that our turnover will be quite choppy over at least over the months, but of course you don't see that. We don't do forward-looking statement, but I can say like this, I would be very disappointed if we cannot continue the growth that we have had in 2021 versus 2020 in 2022 as well.
Okay. Then you're, let's say, alluding to this 11% organic growth, of which slightly less than half were price. I guess price will be a quite significant, let's say, component of top line growth as well in 2022?
Yes, we will continue to increase prices as well, because we have to.
Okay. Then let's say you are late for some deliveries. You have a strong order book, demand is good, and again, you don't give forward-looking statements, but if you think about it as like 5%, let's say, volume related growth and then 5% price growth, then we're at 10%. It sounds like that might be, let's say, lower than your ambitions or your expectations looking for the full year.
Yeah. I mean, it's always difficult. The way I see it now, I think we will have a strong growth in 2022. That's the way I see it.
My second question, CapEx was very low in 2020 due to, let's say, natural reasons. It has started to pick up somewhat. So this level now last year is slightly about SEK 200 million or like 3.5% of sales. Would that be a, let's say, good indication going forward?
Yeah, I think so. I mean, we are doing capacity increase investment and we have a big project that we are almost finalizing now, a new factory in Lithuania that we have built. It will be finalized in March, April, and that will increase our capacity in our Wiring Systems segment. I think that we will continue to do capacity increase investments during 2022 at roughly the same pace as 2021.
My final one here is you've also spoken about the working capital and that's, let's say, elevated for some very logical reasons. Let's say a half a year from now, a year from now, and let's say supply chain is normalized. Should there be any reason that working capital in percent of sales should not come down to, let's say, historical averages?
I don't see any reasons why it wouldn't come down.
Okay. There will be no kind of, let's say, new policies of having, let's say, increased inventory. Okay. Okay.
No, no.
Okay.
That's not the idea. We, I mean, the inventory is somewhat of a risk, but I mean, in a way, we're also happy that we have a very strong balance sheet that we can actually do this also. Because now it's so hard to get components out, so it's, I can say that the components are not getting cheaper. They are getting more expensive by the day, so it's not so bad to have some in inventory, to be honest. Of course. Okay. Thank you, Sindre. Any more questions?
I think there were some questions on the chat, James.
Sorry. I didn't see. From Fredrik, he asked, "How well invested are you?" I would say it varies a lot between the different factories, but I would say that we are quite well invested, in fact. We have. Of course, there is like a normal distribution of age of our equipment. Normally I would say that our factories are well-equipped with efficient machinery. Of course we need to do some reinvestment every year, but I think that fits well in this 3.5% of CapEx. Regarding leasing of machines, we have.
Of course, we have some companies that we have acquired with leasing of machines, but we feel that is not a very efficient way of doing things. We believe it adds a lot of bureaucracy and administration in many areas. We think that then we share our margins with the leasing companies. We don't really see that as a good option for us. Yeah, hope that answers your question. I think there were no more questions in the chat, right? No, that was it. Do we have any more questions?
I mean, if you have questions also later on, I mean, both me and Christina, our telephone numbers and email addresses are in the report, so feel free to get in touch with us if there is anything else that you think about after this call. We are available and we will reply. Okay. Thank you for listening and I hope you come back when we do the next run. Yeah. As I said, feel free to contact us if you have any questions going forward. Thank you.
Thank you.
Bye-bye.
Bye.