Thank you. Good morning, everybody. Warmly welcome to our webcast where we present our third quarter 2022. I am Henrik Perbeck, and with me I have our CFO, Johan Dufvenmark.
Good morning.
In addition to the overall performance and developments of the Beijer Alma group, we will also present our reporting segments, our three main subsidiaries. These are Lesjöfors, a full range supplier of standard and customized Industrial Springs, as well as wire and flat strip components, acting globally with majority of sales in Europe. It is Beijer Tech, which specializes in industrial trading and manufacturing within Fluid Technology, as well as components, consumables, and machinery to Nordic industrial companies and also building automation. Beijer Tech is also a platform for acquisitions into new industrial niches.
Habia Cable, which was divested in October, but it's reported as discontinued operations in this report. We can go straight to page four, please. The third quarter, the group's growth was mainly acquisition driven. Demand was varied in a fairly uncertain economic climate. In general, demand was fairly good, but varied really between regions and segments. The continued high inflation has led to increased costs, which have been compensated through price increases. On a relatively more positive note, we can see that the trend that the supply chains are stabilizing. In Lesjöfors, the chassis spring showed significantly lower volumes versus last year. Partly this is due to the suspended sales to Russia, but also in other parts of Europe.
For Industrial Springs, we see the Nordic region remain the strongest together with the U.S. whereas Asia and Central Europe have showed weaker demand. Beijer Tech had a stable demand in the Nordic markets in both business areas, especially the Norwegian market. We're also very happy to see a good contribution from our recent acquisitions. The important and strategic acquisition of John Evans' Sons into Lesjöfors was completed early in this quarter. This doubles our presence in the U.S. and also increases our sales to interesting medical device market. The Turkish spring manufacturer, Telform, was acquired in early October. Habia Cable was divested according to plan in early October as well. The next page, five, please. Now continuing with an overview of the group's financial performance.
Since Habia Cable has been divested in this report according to the IFRS accounting rules, Habia is reported as discontinued operations and not part of these consolidated accounts and comparables in the report, nor in this presentation. Below left on this slide, you can see how the split of revenues has changed with and without Habia Cable. In general, we are still facing tough comparables due to the strong performance in 2021. In this quarter, we can see that order bookings grew by 22%, which was a decrease by 3% organically. Net revenues grew by 30%, of which 3% was organic, which of course also includes price increases, implying that overall volumes are somewhat down versus strong Q3 last year.
Operating results before items affecting comparability increased slightly to SEK 200 million with a margin of 13.5%. There are no items this quarter reported as affecting comparability only in the comparables and the historical numbers on the block. Moving on to the performance of our reporting segments, our subsidiaries, we go to next page six, please. Lesjöfors, our spring manufacturer, is organized into two business areas. These are industry with mainly customized products to a very diversified customer base globally. The other is Chassis springs, which are standardized replacement springs sold to car parts wholesalers, mainly in Europe. For Lesjöfors, order bookings increased by 27%, supported by the acquisitions and some currency effects. Organically, order bookings decreased by 4%.
Net revenue grew by 30%, also with a decline of 4% organically. For Industrial Springs, the largest business area, growth was 51%, where, as mentioned, the Nordic region was the strongest together with the U.S. In Central Europe, volumes have been lower and more volatile, and also in China, the economic uncertainty affected demand. The recent acquisitions, with some contribution from Alcomex, Plymouth and also John Evans contributed strong performance, and they are reported into this business area, Industrial Springs. For Chassis Springs, the demand was significantly lower in Europe in addition to this effect from the suspended operations in Russia. This had an impact on net sales and order intake.
There was a lower-end customer demand, and this was amplified by the destocking at the wholesalers, which is not uncommon in this market when the demand changes. This led to a decline in net revenue of 24% compared to last year in the quarter, which is quite significant. The operating result of Lesjöfors declined to SEK 154 million, which corresponds to an operating margin of 14.8%. However, there are some one-time effects related to the acquisition of John Evans of SEK 17 million. Adjusting for this, the margin would have been 16.4%. To summarize, in addition to this, the key drivers of reduced profitability in the quarter when comparing to last year.
First, the direct effect from the sales to Russia and lower volumes in Russia in the contribution in the Chassis Springs business area is lower than previous periods. As you can see on the graph on the slide on the right lower the share of revenues in the quarter from Chassis Springs was 70%, which is lower than usual. Further, as mentioned within Industrial Springs, volumes and profitability in Central Europe and Asia had an impact also on profitability. Finally, as we have made price increases to offset cost increases, there is still a margin effect that is not fully compensated. Next, page seven, please. Beijer Tech operates in two business areas, F luid technology and Industrial products, both acting within Industrial Trading and Manufacturing.
Further, it's a platform for acquisitions into new attractive industrial niches, such as building automation, which is reported into Industrial products. Growth in order bookings amounted to 9%, with a decrease organically by 2%. Net revenues grew broadly by 32%, of which 19% was organic. Within both business areas, Industrial products and Fluid technology, growth was broad over the Nordics, and revenue grew organically with support from price increases. In addition, the recent acquisitions of Swedish Microwave and Mountpac contributes to profitable growth in the Industrial products business area. The challenges in the supply chain are stabilizing, although some lead times continue to be long. Beijer Tech delivered a strong operating result, which increased to SEK 52 million, with an operating margin of almost 12%. Next page, eight, please.
Now also briefly some comments on Habia Cable, which as mentioned, is reported as discontinued operations, but was still a part of the group in the third quarter. Demand continued to be good in the quarter, and order bookings amounted to SEK 261 million, up organically by 7%. Also, net revenues grew organically by 17%. Profitability improved, and margin was 11.8%. An operating result improved to SEK 29 million in the quarter. This will be the last time we discuss Habia Cable in our reports and webcasts. With the divestment of Habia, our leverage has decreased, and with a strong balance sheet, we can continue to both invest in our current companies as well as add new companies when interesting opportunities arise.
Finally, I would also like to thank the management and employees of Habia for excellent work and cooperation in the last 5 years in my role as CEO, and also, of course, for the 30 years ahead of that. Thank you. Next, page nine, please. I will now hand over to our CFO, Johan Dufvenmark, for some more comments on the financials.
Yeah, next page 10 , please. Thank you, Henrik. As mentioned in the report, Habia Cable is regarded as discontinued operations and is not a part of the consolidated group in most cases. Looking at the numbers for the remaining group, net revenue is up SEK 350 million compared to last year. Acquisitions contributed with SEK 230 million, which was an increase of 20%, while organic growth was SEK 35 million. Organic growth in Lesjöfors was negative, while Beijer Tech showed a strong development. The low organic growth in the quarter was mainly related to lower volumes within Lesjöfors Chassis Springs, as Henrik mentioned, but price increases have had a positive effect. Compared to last year, the currency effect on revenue was at SEK 85 million.
Order bookings increased to SEK 1,377 million compared to last year, where acquisitions contributed with SEK 204 million, an increase of 18%, whereas the organic growth was negative. Next page 11, please. Now a short look on the segments and how they contribute to revenue and operating results. As you saw on the previous slide, net revenue increased, and with Habia Cable included, it was SEK 1,724 million in the quarter and SEK 1,483 million excluding Habia. The increase is mainly related to acquisitions in both Lesjöfors and Beijer Tech. The total increase in Lesjöfors was SEK 240 million, and Beijer Tech contributed with an increase of SEK 105 million compared to last year.
As you remember from the last slide, the increase in the remaining operations was 65% related to the acquisitions, but also with some contribution from organic growth and currency. In the operating results for last year's third quarter, we had an item affecting comparability of SEK 45 million related to the divestment of the company in Germany. Operating profit before this item was SEK 220 million last year. Beijer Tech had a strong development both related to acquisitions and organically, and had an increase of SEK 80 million. Development of operating profit in Lesjöfors was -SEK 30 million when comparing the quarters, the main reason being lower sales in Russia, U.K., and Germany. Next page 12, please. Now let's take a look on some of the key financial ratios.
We've already taken a look at the revenue, up 31% compared to last year, mainly driven by acquisition and price increases, but also good development in Beijer Tech. As mentioned by Henrik, operating margin before items affecting comparability was lower than last year, down 3.9 percentage points. Cash flow before acquisitions was SEK 93 million, affected mainly by higher inventory and lower accounts payable, while accounts receivable have improved. Net debt increased compared to last year, which was an effect of the John Evans acquisitions, but some of the increase is related to currency effects as well. Please note that since the close of the quarter, we have received the proceeds from divestment of Habia Cable, so net debt have decreased substantially in them. Thank you. Back to Henrik for a look at events of the quarter and some final remarks.
Page 13, please. Now, I would finally like to mention two positive events after the quarter. On 6 October, we completed the acquisition of Telform. Telform is a successful manufacturer of Industrial Springs in Turkey and fits very well into Lesjöfors Group. This expands opportunities for cross sales and also gives Lesjöfors a further footprint for low cost production. Finally, as mentioned, on October 14, the divestment of Habia Cable was completed according to agreed terms and conditions. Next, page 14, please. Go to page 16 actually. Just a brief recap of today's messages. Still, demand in general favorable but varied across geographies and segments. Growth this quarter, mainly from acquisitions. Price increases have offset cost increases.
The acquisition of John Evans' in our early in the quarter strengthened Lesjöfors position and builds further scale, not the least on the U.S. markets. The new acquisition in Turkey to expand sales and production footprint for Lesjöfors. Finally, the divestment of Habia Cable gives strength for further acquisitions. In these uncertain times, we need to be agile to capture opportunities and react to changes. Next page 19 and open for Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we'll just pause momentarily to assemble a roster of questioners. Thank you. Your first question comes from Carl Ragnerstam from Nordea. Please go ahead.
Good morning. It's Carl here from Nordea. Firstly, looking at Lesjöfors EBIT margins. Fell a bit year-over-year here. I mean, is it possible by any chance to quantify what is actually the impact from the sort of exit from Russia? I guess also, if you were to exclude Russia at all in both this quarter and the comparison quarter as well, I guess you still have a sort of negative sales mix from lower chassis share of total sales, right? I mean, what impact did you have from that? Also you mentioned that you're still not on par with raw materials. Did it have any substantial impact, or is it primarily Russia maybe an underlying negative margin mix impacting?
Morning, Carl. In terms of quantifying Russia, we don't do that quite on the bottom line level. As we have discussed before, it's around 15% of the sales within the Chassis Springs business area. In our previous quarter, we mentioned this as one of the key drivers, as you recall, of the reduced profitability. It continues to have an impact. In this quarter, the overall lower demand in the chassis business area, also in key European markets, drives the volume down. As you can see, it's 24% down, and that's also including price increases, right? Volume-wise, it's a little bit more. That is, you know, a combination of those both Russia and European markets. Yeah. What's the other part of your question?
Raw material. Let's see. You mentioned that you still have raw material that way...
In terms of raw material, we have, as I stated, compensated, but it still gives a margin impact. You know, not compensated fully for the margin, but compensated for the cost increases. Yeah.
Do you still get price increases from your suppliers or are they a more stable situation? Also with your, I guess, announced price increases, should we see a sort of a more neutral situation when we're entering Q4 here from a raw material point of view?
That's a good question. In terms of raw material, we have seen a stabilizing environment, and we can also see on the, you know, on the metal markets that it should start going down now during the autumn. Of course, there are some other components in more general inflation that we, as everyone, expects to continue for now in the quarter and also going forward. The peak of metal pricing we have passed. Having said that, as Johan mentioned, we did increase our working capital and the inventory, and that is mainly still driven by more expensive materials having sort of come in during the last periods. That should also, from that perspective, level out from the raw material part of it.
A more neutral situation in Q4 than, or going forward at least?
Yes. In terms of raw materials, yes.
Okay. That's good. Also, you mentioned that you saw wholesalers or distributors taking down inventory levels a bit. Are they still a tad high or, I mean, are they normalized now post Q3, or should we expect the inventories to come down still in Q3 or Q4, sorry, and then through next year? Or when are they sort of normalized, do you think?
The dynamics in the chassis business area is that our customers are the wholesalers. This is not an uncommon development. We have seen it also previous years. When the end consumer demand drops, we do get a kind of amplified effect when the wholesalers quickly they try to adjust their stock levels. I would say that this took place a lot in Q3, meaning by the end of the quarter we should be in a more normalized situation versus the end consumer demand, which of course, we don't know exactly what that will be. In terms of the destocking, a lot of it seems to have taken place during Q3.
Okay. Very good. The final one from my side at least is about. You mentioned the orders are down a bit. I mean, I guess it's down slightly more on a volume basis compared to the organic figure you disclosed. Are you planning any cost out measures in order to adapt to the sort of more muted market situation?
Well, absolutely. I mean, the situation is very varied. This is I try to use that word. It's not, you know, overall the same. We have many production units and, you know, in those, the units that are affected by volume decreases, we are of course very agile to adapt the cost to control costs. Of course, as you could understand, you know, units that are involved in the production of Chassis Springs will have such an impact. Also as I alluded to in Central Europe, there are such areas as well where we do this. Absolutely. That is, you know, part of every day managing the business effectively as soon as you see volumes changing.
Once again, it is a varied picture and you know, there are also several companies in our group that have high demand, really strong volumes still. You know, it's not some kind of corporate program. It's really being agile, acting on the market. This is a lot what our decentralized model is built that you know, each MD around the group acts and should act immediately when with these kind of changes.
Sounds fair. Thank you.
Thank you. Once again, if you do wish to ask a question, please press star then one on your phone.
We also have one question coming in on email, and it's. The question is regarding inventory levels and the thoughts going forward. Inventory is of course two parts of that. You have the value, meaning the method you put into inventory, and also of course the volume that actually have in inventory. We can see on the metal market that the price is going down on steel. We are pretty much the third in line for buying the kind of material we are buying. Meaning if this should prevail, prices that we meet on the raw material side probably will go down some, meaning then that if this is true, inventory level should drop a little bit in the future.
Still, this remains to be seen. Also when it comes to volume, we are of course always adjusting inventory levels according to demand. We did last year take some active decisions to keep up inventory volumes to be able to deliver on time, also related to strained supply chain. This is of course something we kind of look on all the time. There could be some adjustments being made to this when supply chains clear up a little bit.
Thank you. Just confirming, we currently are showing no further telephone questions either.
Yes, we do actually have one more question from the internet. This is for Henrik. Please elaborate on organic growth in Beijer Tech, the split between volume and price increase?
We had a strong organic growth in Beijer Tech in this quarter, very positive development. Of course, it is contributing both from price increases and also volume increases. I would say maybe majority is from price, but definitely also in certain segments or certain companies, we have a clear organic growth, thanks also to volume. It's a good combination of both.
We have nothing further, in from the internet.
Thank you. As we are showing no telephone questions either, we can close the call there. Thank you everyone for participating. You may now disconnect your line.
Thank you.
Thank you.