Hello, everyone, and welcome to the presentation of ASSA ABLOY's 2022 year-end report. My name is Björn Tibell. I'm heading Investor Relations, and joining me here are ASSA ABLOY CEO Nico Delvaux and our CFO, Erik Pieder. We'll stick to the normal format today and start now with a summary of the report before we open up for your questions. With that, over to you, Nico.
Thank you, Björn. Good morning from my side. We can report a very good Q4, a very good end to, I think, a very good 2022 for ASSA ABLOY. We had a strong organic growth of 9% in the quarter, with all divisions contributing in a strong way with the exception of APAC, where in APAC it's mainly Greater China, where we continue to see challenging market conditions, COVID-19 related and, of course, construction market crisis in general related. Also, good complementary growth through acquisitions of 5% in the quarter. A strong EBIT margin of 15.7% and a strong EBIT improvement. Very active in the quarter when it comes to acquisitions, with 8 acquisitions signed in the quarter.
A strong cash flow, almost double of a year ago at SEK 6.6 billion. If you look in the numbers, top line close to SEK 33 billion, 28% up, 9% organic, 5% acquisition, and also helped by currency in an important way. An EBIT margin of 15.7% on the same level as the same quarter a year ago. An EBIT of almost SEK 5.2 billion, 28% up, and our earnings per share, 23% up. If you look a little bit into the different regions, a continued very strong North America with an organic growth of 19%, where we continue to see good market conditions on the commercial side, but I would say also on the residential side.
It's true that new-built residential is down, but as you know, we are not so affected by new-built residential in North America. It affects a little bit our garage door business in Entrance Systems. It also affects a little bit our OEM business in general and our window hardware business in particular. We still see very strong momentum on the residential side, aftermarket, and like I said, on the commercial side. I would say for North America, the market is perhaps not our biggest concern. It's perhaps more the high comparison with a year ago. If I go to South America, minus nine.
If you look at our core businesses, our core markets there, it was only down very low single digit. That was against a very difficult comparison a year ago. You know that in South America, we were growing very high double digit now for many quarters a couple of years in a row. At a certain moment it becomes difficult to further grow against that high comparison. Of course, we have some challenges, political challenges in Brazil, in Peru. The -9% was mainly because of a high comparison with a high Orbix HID project in Brazil a year ago. Europe +3%. I think a good quarter in Europe. Perhaps market conditions are a bit less clear than in North America.
We still see very good, strong momentum on the commercial side. Also with our spec business still up double digit, where on the residential side it's a bit more fluctuating. Africa +5%, Oceania +3%, despite all the floods and all the challenges in Australia and New Zealand. Asia, the only one, or the other one, negative -5%. Like I mentioned, mainly because of a continued challenging situation in Greater China, where COVID-19 was still very much around in Q4 and where the construction market continues to be very depressed. We also had some challenges in the quarter in Southeast Asia, but it was mainly because of a very high comparison with a year ago in Southeast Asia.
Some market highlights for the people that were interested in the FIFA World Cup. Erik, I know that your country was not there, we were back home very fast, the Belgians. We provided all the paper tickets for the World Cup, more than 2.2 million paper tickets. It's now the third time in a row that we do that service. Definitely a very high profile type of project. An important critical infrastructure win for our electromechanical eCLIQ solutions for a European gas network. Some energy-saving solutions from Entrance Systems for a global multinational for his manufacturing plants in Mexico.
It's also good to see that our R&D effort continues to be rewarded in the market. Our Yale Unity screen door lock won the Good Design Award in Australia. Also this quarter, several new products around green sustainability. The Stammer Garter glass for our entrance system product. Increasing energy efficiency in the doors. We further extended our Incedo cloud offering, where we now integrated also the battery-less pulse digital cylinders on that platform. Now eight consecutive quarters with strong organic growth, and the last couple of quarters also complemented with very strong growth through acquisition. You could say an acceleration of our top line.
Our margin still below the bandwidth we aim for in the quarter at 15.7%, for the year at 15.3%. Working hard to get it back within that 16%-17% bandwidth. Stable operating margin, accelerated top line, therefore also accelerated operating profit, record profit in the quarter for the first time above SEK 5 billion. Very active quarter when it comes to acquisitions with eight acquisitions signed in the quarter. 21 acquisitions completed for the full year. That's also a record. Those 21 acquisitions represent an annualized sales of around SEK 7 billion. An update on HHI.
We are still preparing for the court case which will take place in April this year. As part of mitigating the concerns DOJ has raised, we also came to an agreement to conditionally sell our Emtek and Smart Residential business in the U.S. and Canada to Fortune Brands, of course, conditionally based on closing the HHI transaction. Zooming in on two interesting acquisitions, D&D Technologies in Australia. A gate hardware manufacturer with sales of around SEK 475 million. Janam, a leading provider of handheld mobile computers and readers.
They used those readers also at the FIFA World Cup to control people entering a parameter around the stadiums and making sure that people had the right ticket. They have a sales of around SEK 200 million in 2021. If I then zoom in into the different divisions, starting with EMEA, an organic sales of 2% with very strong sales growth in Middle East, Africa and India, the more emerging part of EMEA. Strong growth in Benelux, good sales in East Europe, UK, DACH and Scandinavia. A sales decline in Finland, South Europe and France. An operating margin of 15% with a very strong operating leverage.
Dilution of FX because of the weak SEK, and also a stronger dilution of M&A, mainly linked to acquisition cost integration costs for two important acquisitions in EMEA for DoorBird and Arran Isle. Go to Americas, another very strong quarter and I would say a very good, excellent year for Americas. Organic sales in the quarter of 11% with all business areas, all regions contributing in a strong way, with the exception of a small sales decline in Latin America, like I mentioned earlier. Sales decline in electromechanical solutions, mainly linked to some shortages on electronic ships and also a very high comparison with a year ago. An operating margin of 21.3%.
Very strong operating leverage, 200 basis points, FX neutral, and also here, M&A strongly dilutive, 90 basis points that's related to acquisition costs for HHI, which amounted to 90 million SEK in the quarter. We go to Asia Pacific division, the more challenging division. We have an organic sales decline of 10%. Good growth in South Korea, slight sales decline in Pacific, and then a significant sales decline in Southeast Asia because of a difficult comparison with a year ago, and also in China because of continued very difficult market conditions. We had a higher double-digit negative growth in Greater China. Therefore we don't have the necessary volume, mainly in Greater China.
We also posted an operating margin of -4.7% with a negative operating leverage, again because lack of volume, mainly in Greater China. FX slightly positive, M&A, slightly negative. That's linked to integration costs for to bigger acquisitions we did in Australia, Caldwell and D&D Technologies. We go to the global division, starting with Global Technologies. A very good quarter, strong end of the year. Organic sales of 24%, where I would say all business areas and as well HIDs Global Solutions were contributing in a strong way, with the exception of Extended Access.
Where we were also able to furtherReduce the backlog build up on physical access control because we get now the ships in for our redesigned products, and we are working away that backlog. We also saw a good return of the travel-related businesses and hospitality in particular. An operating margin of 17.1%, that's a level where we want to be, what we aim for. Good volume leverage, 140 basis points, helped by FX 50 basis points because of the stronger dollar, and then 50 basis point dilution also here mainly because of acquisition and integrated related costs. Last but not least, Entrance Systems, also here a strong end of a strong year. We have an organic sales of +10%.
We have 3 of the 4 segments contributing in a strong way, residential, industrial, and pedestrian, and a sales decline in perimeter security against a very high comparison a year ago. Also, very strong double-digit growth in service, where we deliver on our ambition to grow the service business high single digit. An operating margin at 16.5%, good operating leverage, 30 basis points, slight help of FX, M&A dilutive 40 basis points. With that, I give the word to Erik for some more details on the financials.
Thank you, Nico. Also from my side, a very good Friday morning. As you all know, our target is to reach SEK 150 billion by 2026 in sales. If you look on the full year, I think that we have done good progress in order to reach that target. The full year ended at almost SEK 121 billion. Yes, we are helped by currency, but you can also see that the organic as well as the acquisition growth was 14%. The 14% is similar to what we had in the quarter. It's a different mix where the organic piece was 9% and the acquired part was 5%. The operating income, as previously explained by Nico, was record high above SEK 5 billion and increased with 28%.
Income before tax, you see that one is slightly lower with an increase of 25%, and that is that we also experience the higher interest rate cost that is now all over the world. One of the highlights, operational cash flow almost doubled from a, okay, a rather weak Q4 last year. Still is the best cash flow that we have had in a quarter ever. I would say also another highlight is the return on capital employed, which almost reached 17% for the full year of 2022. If we then dissect it a bit and look on the bridge, price of the 9% is 5%, volume is 4%. We have a good operating leverage of 22.3%.
If you take into account that we still have supply chain issues, still, I mean, we are suffering from higher inflation as well as higher energy cost. We have been able to mitigate that by operational efficiencies. Like for instance, the manufacturing footprint program had a saving in the quarter of SEK 200 million. We will now in Q1, we will launch the ninth program with a total restructuring cost of SEK 1.2 billion and have an annual saving at the end of the program of SEK 700 million. The payback period is about 2 years. On the currency, we are helped a bit by the stronger dollar, that's a 20 basis points improvement. Acquisitions, I think, I mean, there you've heard Nico talk about acquisitions and integration cost. For HHI, it's SEK 90 million.
If it also would add the other ones, the dilutive impact would have been 30 basis points instead of the 80 basis points that you see here on the slide. On the cost breakdown, it is, we see that the direct material is improving with 40 basis points. The 40 basis points is it's related to the mix, where we have a stronger Global Technologies and a weaker APAC. Over the full quarter, the cost versus price or the material cost was actually flat. On the conversion side, we were up or let's say we had a better performance of 70 basis points, where, I mean, I talked before about the operational efficiencies and also the higher volumes have helped us there. On the SG&A, slightly lower, 40 basis points.
Yes, we have higher inflation. We have continued to invest in R&D, but we have been able to offset this by efficiencies within our sales and admin cost. As I said before, this is once again one of the highlights of the report, the operational cash flow, almost SEK 6.6 billion, where we had, I mean, we had high EBIT and an EBITDA, but also we have also been able to manage our working capital with the reduction in receivables as well as in inventory. The cash conversion on the quarter was 138%. We have seen especially good performance within Entrance and Americas in the quarter. The gearing, net debt to EBITDA, is now at 1.4 versus 1.5 last year.
The net debt to equity is also down, from 39 to 37. In the quarter, we increased the debt with roughly SEK 1.1 billion. We have been quite active on the acquisition front as well as we have paid dividend. If you look on a full year, 2021 versus 2022, we have increased the debt with SEK 4.6 billion, out of that, SEK 3.4 billion is related to currencies. We have also done 21 acquisitions during the year. You can flip the slides.
Sorry.
It's no problem. Yeah. All in all, I think that we have a very solid balance sheet, and therefore, we are ready to absorb the HHI acquisition as well as continue our acquisition strategy. Now you can flip the slide, Nico. Thank you. Earnings per share ended at SEK 3.36 for the quarter and is up, as you've seen before on the slide, with 23%. With that, I hand back to the one who was actually with his team in Doha.
As a conclusion, a strong quarter, strong end of a good year for us. Organic sales up 9% complemented in a good way, strong way, with growth through acquisitions of 5%. A strong EBIT margin of 15.7% and an operating profit up 28%. Record cash flow almost a double compared to a year ago. Overall, financially good result. It's clear that we live in an uncertain economic climate. As you heard me talking before, we are still quite optimistic of what we see in the market. As you know, we should be ready for whatever economic situation comes to us.
We have our decentralized organization that has helped us in the past to be very agile, which will help us also now this time to be very agile, even when a possible downturn would come. The agility will also help us to continue to profit from those markets where we see a strong momentum. Last but not least, the board proposes a dividend of 4.8 SEK per share, split like in recent years in two equal payments. With that, I give the word back to Björn for Q&A.
Thank you very much, Nico. It's time to open up for Q&A now. I know that there are many in the queue, so please remember to restrict yourself to one question and a follow-up. Operator, this means that we are ready to kick off the Q&A session. Please go ahead.
We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets when asking a question. In the interest of time, please limit yourself to two questions only. Anyone with a question may press star and one at this time. The first question comes from Lars Brorson from Barclays. Please go ahead.
Thank you. Good morning. Nico, if I can maybe start with Europe and EMEA. You're calling out commercial strong, specs up double digit. That's obviously encouraging. Wonder whether you can talk a bit about what you see in the European residential market. I noticed that you have seen strong growth in Benelux and good growth in the UK organically, at least. I presume that might also mean stable volumes. Those were two of the three markets you called out, I think, in the Q3 as a concern together with France. Maybe you can talk about what you see there, and the exit rates perhaps versus the 2% organic in Q4 overall for EMEA. And specifically, if I can, sorry, just on the contingency plans that you initiated in the Q3 , have they indeed been executed or are they ongoing?
Thank you.
Yeah, Lars, I can reconfirm that we continue to see good momentum on the commercial side. I would say no slowdown. Translated in the level of our spec quotations, like I mentioned, still up double digit. On the residential side, most probably we must make a distinction between new build and R&R, so aftermarket. On the aftermarket, there, we still see good momentum, a little bit similar like in North America, where definitely new build is more challenging. We see that a little bit in our OEM channel, where we see things slowing down.
Of course, you always get and also there the double effect because if, if your end people start to destock and the market goes down, you have this double dip. When it comes specifically to the markets you asked, yes, Benelux, we have seen a growth, but that was mainly against a very weak comparison a year ago. I would say that Benelux, the situation is still similar as I explained in Q3, like it is for France, because we saw negative growth in France. It's true that, you know, the channel to market can only destock so much. After a couple of months that destocking, you know, is over because there's nothing left to destock. I think we are on that level now.
It will be now more, in line with, you know, how the market evolves. Like I said earlier, it's very difficult or more difficult to read in Europe than in U.S. Also in Europe, perhaps we are a little bit more positive than what you read in the newspapers or what you hear on the news.
Thank you. A helpful color. My follow-up, if I can briefly, just on Global Tech operating margins. I think I heard you say where we want to be. If I'm blunt, that sounds a bit unambitious to me. I mean, you're calling out very strong operating leverage in the quarter. That's true, but that's obviously on a very depressed comparison from last year on low volumes and high components costs back then. Maybe you can help us a little bit with your thoughts on 2023 for Global Tech margins. There should be better operating leverage coming through, mix particularly as PACS recover, price cost tailwinds, decent volumes. I'm hoping we can do better than what we saw in the Q4 .
I know that some of you were dreaming, hoping of EBIT margins closer to 20%. I've always said that that is not the case, that that is not realistic for Global Technologies. I've always said that Global Technologies should have margins above the 17%, in that 17%-18% range. We consider this as a good level, then you can judge if it's ambitious or not. I think what is important for good margins in Global Technologies is that PACS is on a good level in the mix, which definitely is again the case today as they are working away their backlog.
What is also important is that our hospitality business is on a good level. Although hospitality is coming back and showing good double-digit growth, they are still lower than the levels we experienced prior to 2019. That definitely brings it down. The other aspect is that we see very good strong growth on the other verticals in Global Solutions. Those verticals are still smaller. I would say there we have to grow volume in order to make them margin accretive on the division level. This margins above 17% in that 17%, perhaps 18% level, that is something you should yeah, consider going forward.
Understood. Thank you, Nico.
The next question comes from Daniela Costa from Goldman Sachs. Please go ahead.
Hi, good morning. Thank you for taking the question. I wanted to start out just with pricing trends and what have you done with pricing lists in the beginning of the year and sort of what is the plan and the trend you're seeing in the market given we have the offsetting moves, I guess, of raw materials and labor costs. Then just a follow-up from that. If you can talk through how big the potential tailwind from cost inflation coming down in things like raw materials, is that enough to get you X the HHI deal into the 16%-17% margin range this year, do you think?
Yeah. Like we said in Q3, we were a little bit afraid with steel prices going down that there would come more strong pressure on prices and eventually negative pricing for everybody's steel related. It's good to see that steel is up again in the last six weeks or so. As a matter of fact, if you look at steel prices today in the U.S., they are still 100% above the steel prices two years ago. That's good because that means that we can keep prices for our steel related products on a solid level.
Apart from that, we have continued to increase prices in Q4 and now also in Q1, because we also see other materials going up. Again, if you take copper, nickel, zinc, you name it, they're also still 40% or so higher than 2 years ago. Next to material inflation, we have, of course, general inflation, energy inflation, logistic inflation, and labor inflation in particular. Where we see, where we have seen higher labor inflation last year, and where we will see definitely higher labor inflation this year, as well. We continue to increase prices, I would say on an ongoing base. That's also why, in Q4, we were perhaps a bit earlier than anticipated, neutral cost versus price.
Because for the Q4, we were on, you know, zero level, no accretion, no dilution. It's good to consider, I would say a tailwind now going into Q1 this year. That tailwind should continue under the condition that, you know, markets stay where they are, indexes stay where they are. That should definitely help us also on the bottom line and our ambition to bring our bottom line as soon as possible back within that 16%-17% bandwidth.
Thank you.
The next question comes from Andre Kukhnin from Credit Suisse. Please go ahead.
Good morning. Thank you very much for taking my question. Can we talk about Asia Pac? I wonder if you could quantify at all how much of that, kind of drop off in performance in Q4 was due to China specifically and that kind of Jacob effect of the lockdowns where I'm sure you had some impact from absenteeism as the country went through the kind of pandemic? If we could start with that, please.
Because if we start top line, we had high double-digit negative growth in Greater China. You have seen in the deck also that sales performance for the rest of the division top line wise was not so good. If you take Australia and New Zealand, we had of course continued problems with floods, disturbing a little bit the market. As we have in Australia also window hardware business to OEMs, as explained in the presentation that we have seen there a negative trend. We also have Southeast Asia, which had a challenging quarter. That translates obviously in the bottom line. I've always said that you should take APAC 2 parts.
You should take Greater China with, in the good old days, very low, single digit, positive, margins. The rest of APAC margins in line, you could say with, you know, EMEA. We had lower volumes on the rest of the division, obviously that had a negative effect on the overall margin for the division. I would say the biggest contributor was definitely Greater China, where we are, you could say subcritical, today, and where we had a higher negative margin, double digit negative margin for the quarter.
We have chosen there not to further cut into the, you know, into the muscle because we see good opportunities to deliver on our strategy and grow that business again once the market condition turns. We are a little bit more positive now because COVID-19 is clearly also behind in Greater China. They have changed their policy in a very important way. Construction market is still in a way depressed, but also there is some early positive signs. Too early to see strong improvement now in Q1 because also Q1 is a Chinese New Year quarter. Definitely going into the second half of the year, we believe we should see improvement on the Greater China market conditions and therefore definitely also on our results.
I think you should see the bottom line where we are today as really, a low for that division. We are confident that, from now we should see improvement.
That's helpful. Thank you. Yeah, I was just trying to get an idea of how much of that sort of one-off effect is in there, but I think we can work with what you said on a high double digit negative margin on China. A follow-up, if I may, just on the North America or Americas division. Could you give us an idea of how your specified activity is trending in North America across the division?
Yeah. Our spec business in Americas was only low single digit up. You know that it was higher single digit up for many quarters, it was also very difficult comparison. Like I said earlier, I'm not so concerned with that as an indicator. I'm also not so concerned with ABI indexes now down for a couple of months. I think what it does it perhaps reduces a little bit the backlog on projects we have. What I think is important is that those indexes in the coming months start to go up again, activity can and will remain strong on the commercial side.
Our biggest concern or our biggest challenge in the U.S. is definitely our very high comparison, now in Q1 compared to Q1 a year ago.
Got it. Thank you very much.
The next question comes from Vivek Midha from Citigroup. Please go ahead.
Thanks very much, everyone. Good morning. I just want to follow up on last question around the channel. We talked about the stocking in areas like Benelux, in Q3. In terms of the bigger picture globally, are you concerned with where channel inventories are, or do you see any signs of overstocking? Thank you.
Well, obviously, if a slowdown then happens, you will, you know, see that in your OEM channel where, you know, the OEM customers will start to destock, postpone, orders and that comes on top of then the slowdown that they see in the market. Definitely the OEM channel is something to watch out for. That's something we have seen a little bit in Q4, like I mentioned earlier, in the U.S., mainly for window hardware, a bit for garage doors because, you know, they also sell that hardware or those garage doors for new build. Like I explained on the R&R side, on the aftermarket side, we still see very good strong momentum.
Apart from that, I mean, we don't see it as a big concern. Everything depends, of course, on if the market would turn and how fast that market would turn, because that we have seen in France, Benelux and the UK. Again, I think in France, Benelux, UK, we are through that destocking cycle now.
Thank you very much.
The next question comes from Gael De Bray from Deutsche Bank. Please go ahead.
Thank you. Good morning, everyone. Can I start with China? Where are you exactly on the journey to move away from residential more into commercial and from, you know, new build more into renovation from big projects more into smaller ones? I mean, can you provide a bit more granularity on the mix in China today?
Of course, we are still very much exposed to residential. Our commercial part is still relative small. We are still too much exposed to new build. That's also why you see that higher double-digit negative growth on the top line. If you look underlying, I think we see very good results on our underlying strategy. We see a move from new build to more replacement retail on our Pan Pan business where, you know, both are down but where our retail business is definitely much less down than the market. We see that shift. We see definitely also good momentum on the commercial side where we have positive growth despite the market being down.
Unfortunately, those positive signs are in a bigger picture too small to compensate for what we lose on new build residential. One, because of the market, but two, also because of a conscious decision that with some of those customers we have decided not to do business with anymore because the end of the day, the aim of doing business is to get paid sooner or later also for what you sell. We believe that the risk is too high with some of those bigger contracts. Therefore, you have a double negative effect, I would say, on the top line. One, because of the market, and two, because of our conscious decision not to work with some of them.
Okay. Thank you for this. Can I switch to Entrance Systems? I mean, it appears that the organic growth there decelerated pretty sharply this quarter, you know, from Q3 to Q4. I wondered if this was only due to perimeter security declining or if you've started to see a sequential deceleration in some of the other segments as well. Then on perimeter security itself, does the drop in revenue come from volumes or prices or actually both?
I would say, you know, Entrance Systems has had very high growth for 7, 8 quarters in a row now. So the comparison becomes more challenging. We have seen still good growth in residential, in industrial, and in pedestrian. We had indeed seen negative growth in perimeter. That's not because of price. We were able to keep price. We were not obviously able to further increase price, but we were able to keep price. In perimeter, it's 2 things. It's comparison with very high double-digit growth a year ago. And 2, some slowdown on the residential side because we also still make the more commodity type of fences on the residential side, and that is clearly down because that is also new built residential.
The other downward trend we have seen is on the residential garage doors for new built, like I explained earlier. I think everything what is new built residential it became more of a challenge. I think everything that is aftermarket residential is still good momentum in the U.S. In Europe, yes, it's also a more difficult comparison. I think we still see good momentum, I would say, in line with what you see about industrial manufacturing in Europe.
Would you agree that, I mean, with the kind of comps you're facing now going into Q1 2023 and with the exit rate that we can see right now in Q4, I mean, Entrance Systems will likely start the year in negative territory when it comes to growth?
We don't like the world negative. I'm optimistic that, you know, also in Entrance Systems, we will continue to see, you know, positive development. That's definitely our ambition. It's definitely a good assumption to assume that the percentages of growth will slow down. In the first place because of the difficult comparison, in the second place also because some weaker market conditions. Yes.
Okay. Thank you very much.
The next question comes from Mattias Holmberg from DNB. Please go ahead.
Thank you. Could you please quantify how much of the Global Tech sales in the quarter related to the PEM backlog impacts from the earlier ship issues? Also how much is left of this backlog, please?
Yeah. It's a bit difficult to estimate, but I think a rough number, 400 million SEK, of the backlog that we recovered. I would say that we are two third to three fourth done in the backlog. There's still some backlog available now most probably in Q1.
That's very clear. A second one. I'm gonna try this, but it's still early days. If you could give some color on what you've seen so far into 2023 would be very helpful.
I can say that, Of course, January had 1 working day more, so we should take that in consideration. January had, if you compare with the year ago, January growth rates that were very similar to, Q4 on group level.
That's clear. Thank you.
The next question comes from Celine Cherubin from Morgan Stanley. Please go ahead.
Hi. Good morning, Nico, Erik. Thanks for taking my questions. The first one is around cash flow and obviously very impressive performance in the Q4 . I wonder if you can talk about what's been the main driver of that. I think you mentioned that Americas and Entrance were also very good in terms of cash flow. It seems like every single division also performed very strongly. What was the main driver of that cash performance? If you can break that down a little bit. Do you think there's still some catch up to do in terms of improving working capital terms? I'm just trying to think about the conversion going forward from here. That'd be the first one. Thank you.
Yeah, I mean, as I mentioned before, I think that we had a good EBIT performance, and that was then helped by good efficiencies done on receivables and also inventory, which sort of that made that we had a very strong cash flow. I mentioned specifically because they stand out, Entrance and Americas, but you're absolutely right. We could also see it in a number of the other divisions. I think that we have momentum on the working capital, especially when we talk about inventory also going forward. Of course, remember that we're also seasonal here, which means that we always have a stronger half year and especially then in Q4 during the year.
That's helpful. Thank you. The second question is just picking up on some of the comments, you were making on Global Solutions and the travel related segment. I think Nico, you mentioned that that's still below prior levels. I wonder if you can give us a hint of how much below or how further below you are, relative to pre-COVID levels in that travel related business within Global Solutions.
Well, we don't comment on individual different business areas, but you could say that we still have some way to go on hospitality to be back at pre COVID-19 levels. Same is true for citizen ID. Same is not true for marine business, where we are back in above 2019 levels.
That's helpful. Thank you.
The next question comes from James Moore from Redburn. Please go ahead.
Hello, everyone. Hopefully you can hear me. Thanks for taking the questions. I've got 2. One is on momentum in China. I understand what's happening with the reopening, and there's a lot of absenteeism going on, and we're seeing it across many companies. Obviously, it's difficult to uncouple that from general market weakness. Have you noticed in January improving sequential daily rates of revenue with less absenteeism? That's the first question. The second one is a hypothetical question, really, which is if your steel index, which is double the pre-COVID, were to drop all the way back down, do you think you could hold on to prices or do you think you'd have to lower prices?
On China, the answer is no, because everybody was on vacation in January. As you know, it was Chinese New Year. It's true that if you take some of our factories at a given moment in time, we had 70% of our people or more of our people at home because they had COVID or their relatives had COVID. January is a holiday month, you know, it's too early to come to different conclusions for China. When it comes to steel, I think it's a very hypothetical question. We are convinced steel will never go back to the levels of two years ago.
It's clear if steel would drop 100% of where we are today, that there will always be people in the market that see an opportunity to do better by reducing prices. The risk is definitely there that we would have to reduce prices for things like fences or garage doors or specialty doors. Again, this is an hypothetical question. The fact that steel went up again, even 20% in the last 6 weeks or so, gives us again a good buffer, a good argument to keep prices up. Because like I mentioned earlier, it's not only the steel inflation, we have strong labor inflation in general, definitely also in the US, and we have, you know, strong general inflation still.
Thanks, Nico. Thanks.
The next question comes from Alexander Virgo from Bank of America. Please go ahead.
Thanks very much. Morning, Nico. Morning, Erik Pieder. Just a couple of clarification ones, really. I wondered if you could just run through or clarify exactly how much pricing was in the quarter. Maybe I've just completely missed. Apologies if I have. But actual pricing contribution would be really helpful. Then I wondered, is the World Cup impact in Q4 in GT growth? How much of it was in the number of that very strong 24% growth you printed? Can you break that out for us? Thank you.
Eric showed it in one of his slides. Surprise was 5, volume was 4 in the quarter. Like we said earlier, the two divisions that are above the 5 is Entrance Systems and Americas, and the other ones are then therefore below because the 5 is the average. When it comes to the FIFA World Cup contract, I would say that it's a little bit spread in invoicing over a wider period, and it's, I would say not significant in the result of Q4 for Global Technologies. Like I mentioned earlier, the main drivers are the PACS, and definitely the working away part of the backlog and then hospitality, which had nice strong double-digit growth in the quarter.
Brilliant. Thank you.
The next question comes Andreas Koski from BNP Paribas. Please go ahead.
Thank you, and good morning. I would also like to ask on pricing. I want to understand what the pricing impact could be in 2023. I think we will have a carryover effect from price increases that you have done in 2022 over around 1%. You mentioned that you have increased prices in December and January. Do you plan to raise prices further throughout 2023? Is it fair to assume that the incremental price increases will add another 1-2 percentage points to the carryover effect, or is that far too conservative in this inflationary environment and pricing will be even higher than 2-3% for the full year?
As we continued also to increase prices, like I mentioned in Q4, we believe our carryover will be a little bit higher than the 1% you mentioned. It will be more around 2%, around that level. Definitely we have the ambition to further increase prices. I would say for everything that is not strong steel related. With steel, we'll be happy if we can keep the prices like I mentioned in Q3. The rest we have the ambition to further increase prices. Yes, our price effect this year should be, you know, should be higher than that 2% carry over. How much higher?
Let's see, let's see how much price we can realize and where, indexes and inflation goes now in the first quarters of this year.
Yep. That's very clear. Thank you.
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I lost him.
Gentlemen, so far there are no more questions.
Well, thank you very much.
Sorry. We have a last second registration from Olaf Larshammar from Danske Bank. Please go ahead.
Hi. Yes. Hi, hope you can hear me. I have one question regarding the bridge that you showed in terms of the... I think you showed SEK 1.3 billion in sales contribution from acquisition and roughly SEK 30 million negative on EBIT from those acquisition. I, you know, Could you know, elaborate a bit on, you know, the HHI impact and then also, you know, what one should expect in terms of profitability from, you know, the acquired companies that, you know, came in during this quarter?
Yeah. like Eric mentioned or like I mentioned before, we booked 90 million SEK acquisition related cost for HHI. We were very active, as you have seen, in the quarter. We had a lot of other acquisition and integration related, you could call it one time, of cost. We had the D&D acquisition, we have Arran Isle.
Doorbird.
DoorBird. I mean, Caldwell. We had many acquisitions, some of them also a bit bigger. Normally the big acquisitions have also a bit higher acquisition integration related costs. If you dissect a little bit, 80 basis points dilution we have in the acquisition column, you could say that around 50 basis points, sorry, is related to this, because, say, one-off costs and HHI, and then around 30 basis points would be the dilution of the underlying business.
Yeah. Yeah.
Yep. Brilliant. Thank you very much.
Gentlemen, so far there are no more questions.
Well, in that case, it's time to round up this conference. We hope it has been helpful. If you have more questions going forward, feel welcome to reach out to Carl or myself at Investor Relations. We would, in that case, like to thank you for your interest and participation. We look forward to speaking and seeing many of you in the coming weeks. Thank you.
Thank you.
Thank you.