Hello and welcome to the Beijer Alma Q4 2021 report. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. Today, I'm pleased to present CEO Henrik Perbeck and CFO Erika Ståhl. Please go ahead with your meeting.
Thank you. Good morning, everybody, and welcome to our webcast where we present our fourth quarter 2021. I'm Henrik Perbeck, and with me I have Erika Ståhl, our CFO. In addition to the performance of the Beijer Alma group, we will also discuss our reporting segments, our three subsidiaries. These are Lesjöfors, a full range supplier of standard and customized industrial springs, as well as flat strip components acting globally with the majority of sales in Europe. Habia Cable, one of Europe's leading manufacturers of custom-designed cables for customers in telecom, nuclear power, defense, offshore, and other industries. Beijer Tech specializes in industrial trading and manufacturing within Fluid Technology as well as consumables and machinery to Nordic industrial companies and also building automation. Beijer Tech is also a platform for acquisitions into new industrial niches.
Next page, straight to page four, please. Today we conclude what has been a record-breaking year for Beijer Alma, and the last quarter shows continued growth supported by additional acquisitions. We saw continued strong demand in most customer segments and geographies. It was broad-based growth with strong organic order bookings and sales, supplemented by additional growth from acquisitions. Operating margin has been somewhat impacted by increase in operational costs. The supply chains in the industrial sector continues to be under pressure. For Beijer Alma, the impact is mainly in the supply of certain raw materials and input goods. This has been a daily challenge for our companies, but overall, they have done a great job of resolving the situations and delivering to our customers, which is always the main focus.
To manage the inflation, further price increases have been implemented since year-end, and, despite some uncertainty we see in the world around us, demand has been strong in the beginning of the year. Briefly looking at our subsidiaries for Lesjöfors, both order bookings and sales continue to grow in both business areas, industrial springs and Chassis Springs. Growth across regions, but particularly strong in the Nordics, where Central Europe and U.S. showed some, but slower growth. In Habia Cable, key drivers was within industry and telecom, where demand was strong. We also saw high activity within defense projects, which continues to be a focus area going forward. Beijer Tech, active in the Nordics, delivered a broad-based organic growth within order booking and sales. This was supported by profitable growth from acquisitions, which overall drove improved margins.
Finally, the group is continuing to focus on acquiring attractive companies that can contribute to our profitable growth. This quarter, Lesjöfors acquired Plymouth Spring, a U.S.-based industrial springs manufacturer. Further, after the quarter end, we welcome two well-managed companies to Beijer Tech, Swedish Microwave in Motala and Mountpac from the Gnosjö region. Next, page five, please. Now continuing with an overview of the group's financial performance. Looking at the performance, we can see that order bookings grew by 38%, of which 23% was organic. Net sales grew by 33%, of which 16% was organic. With fairly limited currency effects, the contribution from acquisitions is significant, with some 15% growth on the net revenues. Operating results increased to SEK 189 million, with a margin of 13.2%.
This was partly impacted by increased operational costs, but also due to some effects in Lesjöfors, which I will come back to shortly. Moving on to the performance of the reporting segments, our subsidiaries. Next, page six, please. Lesjöfors, our spring manufacturer, is organized into two business areas. These are Industry, mainly customized products to a very diversified customer base globally. The other one, Chassis Springs, which are standardized replacement springs sold to car parts wholesalers, mainly in Europe. Overall, order bookings for Lesjöfors increased by 29%, of which 13% was organically.
Net revenues grew by 32%, of which 13% was organic. For Industrial Springs, the largest business area, the growth was 29% broadly across geographies and customer segments, but in particular, Nordic region was strong, whereas Central Europe and U.S. growth was lower, partly due to indirect effects from customers lacking other components. Alcomex, acquired last quarter, is reported into this business area. Alcomex has a somewhat different seasonal profile than Lesjöfors with less contribution in the fourth quarter. For Chassis Springs, demand in the aftermarket was strong despite that fourth quarter is the low season. The operating result was SEK 135 million. Comparing to last year, we should note one-off effects of SEK 18 million in Q4 2020.
Aside from that, operating margin was impacted by the seasonal effects from Alcomex just mentioned, but also direct acquisition-related costs for Plymouth in December, and some impact from increased cost for material and production. Plymouth Spring Company, a U.S.-based manufacturer of industrial springs and stampings, was acquired in December. This provides an exciting platform for growth in the U.S. for Lesjöfors. Also on the topic of acquisition, the integration of Alcomex is going well, and its strong fit with Lesjöfors is very clear with synergies between the companies. Next, page seven, please. Now to Habia Cable, a specialty cable manufacturer. Habia is not organized into business areas. However, the sales to nuclear power, defense, and offshore customers are usually strongly project related. This can create more volatility, and that is why we show the dynamics of these customer segments down on your left on the screen.
Demand was good in the quarter with order bookings amounting to SEK 261 million, up organically by 61%. This was mainly driven by telecom and industrial customer segments, but also a good activity in defense projects. Net revenues grew by 20% organically, mainly in the telecom and industrial segments. At the same time, as you can see in the graphs below, the share of defense, nuclear, and offshore remain at a lower level, which created somewhat negative product mix effect. Together with challenging material supply, we've had some negative impact on the operating margin. Operating results improved and increased to SEK 15 million in the quarter. Next page eight, please. Beijer Tech operates in two business areas, Fluid Technology and industrial products, both acting within industrial trading and manufacturing.
Further, it's a platform for acquisitions into new product and business areas such as building automation, which is reported into Industrial Products. Thanks to a continued strong demand, growth in order bookings amounted to 45%, where 25% was organic. Net revenues grew broadly by 44%, of which 23% was organic. In both business areas, Industrial Products and Fluid Technology, growth was broad over the Nordics, and revenues grew organically with the additional contribution from the acquisitions. Challenges in the form of longer lead times and price increases are handled proactively in the companies and are expected to continue. Operating results increased to SEK 48 million with a good underlying operating margin. There was a good impact in the quarter from recent acquisitions. I will come back to the events after the quarter later in the presentation. Next page nine, please.
I'll now hand over to Erika for some further comments on the financials. We go to next page 10, please.
Thank you, Henrik. I know this page 10 is a very busy page. It includes a summary of both the fourth quarter as well as the full year. There's a few things I would like to highlight in addition to what Henrik has already mentioned. 2021 was a very good year. Our revenues were up by 27% and the operating result up by 42%. This gave us an operating result of SEK 820 million, if I exclude the one-off item from the sale of the business in Germany.
This is then corresponding to a 15.2% margin, which is very high on a high level that we have not seen in very many years for the Beijer Alma group. Cash flow in the quarter, as well as for the full year, has been affected by a higher pace in investment in our underlying business. I think that we need to keep in mind that 2020 was a very special year in which we then had very low investment. We're now back at a higher run rate, which is more in line with our usual pace from pre-pandemic years. Additionally, I'd also like to point out that the change in cash flow from the working capital has been higher than last year as we are tying up more capital now that the business is up quite a lot.
Net debt versus previous year is also up, and that has been mainly driven by the five acquisitions that we made in 2021. We have Plymouth Spring, we have Alcomex, Källström, Novosystems, and Noxon that have been added, and of course then affected our net debt situation. With regards to the last numbers on this page, I just want to highlight that the available liquidity from last year is then of course affected by the fact that we in April 2020 added SEK 300 million extra in credit facilities. They were not extended after year-end 2020. That is not included in the 2021 numbers. I think that based on this situation, we have a very good room for additional acquisitions.
As you know, we did actually two more acquisitions already now in the first two months of 2022. Please go to page 11, please. This is then a page showing the suggested dividend, and this is a proposed dividend for 2021 is SEK 3.50 compared to the SEK 3 we had in 2020. This is then 37% of our earnings per share, which is in line with the policy that we have to give one third of our net result of the period to the shareholders. We also believe that this level of dividend supports our focus on acquisitions as well. Please move to page 12. These bridges we have seen for the last quarters as well, showing then the development of order bookings and net revenues in the quarter.
Compared to what we saw earlier quarters this year, we now have tailwind from currencies in the first quarter. Our total growth for order bookings was 38%, of which then 23% was organic growth. For net revenues, we saw a 33% growth, of which 16% was organic. As you see, we have 14% and 15% respectively growth from acquisitions that then are the ones made in Beijer Tech and Lesjöfors. Also worth mentioning again is then that in the fourth quarter, all of our subsidiaries report double-digit organic growth for both order bookings and net revenues. Go to page 13, please. These bridges are then showing the contribution from subsidiaries on net revenue and operating results. As we see, all three subsidiaries report growing net revenue. As mentioned already, Lesjöfors and Beijer Tech had then additional support from acquisitions.
On the operating result side, as Henrik has already mentioned, we have a bit of a mixed picture, where then the 2020 numbers are including some of the one-off items important to keep in mind. For Lesjöfors was actually SEK 18 million from 2020. That one should then keep in mind when looking at the year-over-year comparison. As we already mentioned, we have in Lesjöfors an impact from a slightly different seasonality in Alcomex. We have had acquisition costs, and we then have increased cost in material and production. We have also seen some impact on Habia from material supply situation.
I think that worth mentioning is also then that the insurance case has been closed, if you recall, regarding the data intrusion in second quarter this year, and there was no additional impact on the result from that. I think all in all, we are now ending the fourth quarter at an operating result of SEK 189 million. Next page, please, which then is handing it back to you, Henrik.
Thank you. Concluding on the key developments in the quarter, strong demand broadly across business areas and geographies. Increased operational costs, affecting somewhat the operating margin. The challenges in the supply chain remain, but are handled flexibly. Finally, Plymouth Spring was acquired by Lesjöfors in the U.S.. Going to next page, 16, please. I will now comment on some events after the quarter. During the quarter, we maintained a high focus on further growth by acquisitions. In the new year, two transactions have been closed within Beijer Tech. Firstly, on the 14th of January, Beijer Tech acquired 80% of the shares in Swedish Microwave. It's a high-tech developer and manufacturer of equipment for global satellite communication market.
Based in Motala, Swedish Microwave is a well-managed growing company with revenues of approximately SEK 50 million and high profitability. On third of February, Beijer Tech acquired 85% of Mountpac with revenues of approximately SEK 50 million on good profitability. Mountpac is a manufacturer and supplier of customized component based in the Gnosjö region in Sweden with a strong track record of profitable growth. We're very happy to welcome these two companies to our group. Finally, yesterday, we announced the initiation of a strategic review of Habia Cable, which I will now comment more on next page. 17, please. We have decided to carry out a strategic review of the group's holding in Habia Cable. The review is intended to ensure long-term value creation for Beijer Alma's shareholders and to ensure that Habia Cable has the right conditions for growth, considering the company's leading position in its niche.
For Beijer Alma's strategy for active ownership, the goal is to create profitable growth organically and through acquisitions. In recent years, the strategy has most clearly been shown through our largest subsidiaries, Lesjöfors and Beijer Tech. We continuously evaluate how the subsidiaries contribute to the long-term value creation in accordance with our strategy. In light of this, we have decided to initiate the strategic review to ensure that Habia Cable has the right conditions for growth, either as part of Beijer Alma or under another owner. At this moment, we can, of course, not speculate or comment further on the outcome of the strategic review, but it should be completed during the first half of this year. Next, page 18, please. I would also like to wrap up these concluding remarks by reflecting on the record-breaking performance in 2021 as a full financial year.
We saw a strong recovery and high demand, which has characterized the development over the year. This has meant high production volumes, but also, as mentioned, strained supply chains. With growth of order bookings of 34% and revenues of 27%, we also entered the new year with good momentum. The operating results before items affecting comparability grew by 50% in 2021. Next, page 19, please. On this slide, long-term slide, we can see how the trend of profitable growth has been restored after the special situation in 2020 and the effects from the pandemic. Much in line with the strategy, approximately half the growth is organic and the other half coming from acquisitions. Next, page 20, please. Finally, on the theme of acquisitions, we continue to see this as an important path to profitable growth.
We have now welcomed 16 companies in the last three years, adding new product groups, new geographies, and brand-new industrial niches. I conclude here, and thank you. We now open up for questions. Page 21, please.
Our first question comes from the line of Carl Ragnerstam from Nordea. Please go ahead. Your line is open.
Good morning. It's Carl from Nordea. A few questions. First, you mentioned that Lesjöfors was negatively impacted by seasonal effects in Alcomex. Could you remind us on the seasonal variations in Alcomex? I guess they generated just about the 10% margin in Q4. They should have 16% on a full-year basis. That's the first question.
Yes, correctly. Or rather, the seasonal effect is. It's not uncommon in some companies, including Alcomex, that the end of the fourth quarter it's somewhat weaker contribution. This is, we know from the company and the trend and the forecast. It has, of course, in this comparison, it gives a negative mix on the margins. Yeah.
Could you remind us of the seasonal variations otherwise in Alcomex?
Of course.
Would you say that Q1 is better than Q4?
It's yes. Apart from that, it's very much in line with Lesjöfors as a group.
Okay. Q1 is a better quarter than Q4 or seasonally in Alcomex.
Yes. Yes.
Yeah. Okay. Perfect. Very helpful. Also on raw material headwinds, which you mentioned is one effect as well. You also said that you implemented price increases during the quarter. Would you say that they are fully materialized during Q1, meaning that they will neutralize the impact from the raw material headwinds? Or is it more of a Q2 thing when we'll see the full impact?
Overall, we have worked throughout the year proactively with managing the increase in raw materials. As I mentioned, we have further increased in the beginning of the year. This is a broad portfolio of companies we have with a very diversified customer base. There are recent increases as well to manage the raw material increase and the general inflation. On the topic of where inflation is heading, I think there are, of course, other experts commenting on that. I think we certainly see overall the inflation continuing in the near term, and we need to manage that, and we are doing so continuously, including now also from 1st of January.
Do you expect the same headwinds the coming few quarters compared to what we see, say, in Q4? Should we expect that price increases will offset some or?
Certainly the purpose of the price increases is to offset such increases.
Okay. We'll see effect of that already in Q1 then?
Yes. Of the price increases that are in the beginning of the quarter, yes.
Okay. Perfect. Also looking at this G&A level, SG&A increased by almost 200 basis points as a % of sales in Q4 versus Q4 2020. It's actually up a bit since Q4 2019 as well. Would you say that you are back to normalized cost levels currently? Or should we expect you to ramp up SG&A even further going forward? 'Cause it looks like at least that you're back to pre-pandemic level.
That's a correct analysis. Looking at, you know, 2020 was a very special year with a lot of cost savings. Then during 2020, the demand increased and many of our factories was in full production. Over 2021, we have, of course, adapted to manage these higher level of volumes. I think we are back with a strong production platform and can deliver on this growth. Yes.
Okay, perfect. The final one from my side is a bit on M&A. As you said on page 20 here that you've been able to ramp up quite nicely in 2021 the M&A pace versus historical levels. Would you say that the M&A pipeline, as you see it currently, is sort of big enough or at least good enough to sort of sustain the high level of acquired growth also going forward?
Our mission is certainly to generate continued profitable growth through acquisitions. The market and the pipeline is good. We are working, you know, both in more proactive approach in building relationships with companies that we think could be a great fit in the Beijer Alma group in the future. There we see an interesting pipeline. In addition to, as I mentioned, there is also the market with a lot of interesting incoming prospects of companies being sold. Overall the market level is good in terms of acquisitions as well.
Perfect. Sounds great. Thank you.
Good.
Thank you. Our next question comes from the line of Johan Wattenström from Erik Penser Bank. Please go ahead. Your line is open.
Hi. Thanks for addressing my question. You mentioned that the Nordic markets for Lesjöfors industry were strong in the fourth quarter, while the rest of Europe were a bit worse. Could you elaborate a bit on the start of 2022? Have they started in a similar manner for these markets, or do you see any shifts in the sentiment across Europe?
I think, as I mentioned, there was somewhat less growth in the two areas I mentioned, Central Europe and the U.S.. We are also active of course in other markets such as Asia and the U.K. and Nordics of course. In general, we see a strong start of the new year with continued growth, continued strong demand, at least broad rather than a specific region.
All right. Thank you. Also, with regards to the acquisition of Plymouth Spring, this opens up, as you mentioned, for additional acquisitions in the U.S. Could you perhaps elaborate a bit on particular industry segments that you find interesting, for future acquisitions? Perhaps also elaborate a bit on the level of competition that Plymouth Spring is facing in the U.S.
In general, the U.S. market is interesting for, in particular for Lesjöfors, of course. We had already before that one company in the U.S., and now we add the Plymouth Spring. We see that this as a good platform and starting point to identify further companies that fit well into the Lesjöfors group. It's generally within industrial springs and also some niche products within industrial springs area. It's a good step forward on our presence for the U.S. market and we've become a more active player. That's...
Overall, of course, you know, the U.S. market, just as in Europe, is a competitive market, but I think our group is a good platform for companies to join, to develop within our group. We see we have a interesting position to elaborate further on, and it's certainly an ambition to push it further there.
All right. Thank you very much.
Thank you. Once again, if there are any questions, it's zero one on your telephone keypad to register. As we have no more telephone questions registered, I hand back to our speakers.
Yes. We've received a question in writing then from Johan Lindstedt regarding the administration costs in the fourth quarter. I think that Henrik has already elaborated on that. We're more back on a pre-pandemic run rate now. However, we have also of course then had acquisition costs, which are booked under admin, and there were some certain projects that were then concluded in the fourth quarter, which is also then affecting our admin costs. As a share of sales, however, on full year basis, we are in line with last year. That's a comment on that question.
Okay. If there are no other questions, we thank you very much for joining us and have a good day. Bye-bye.
This now concludes our conference. Thank you all for attending. You may now disconnect.