Welcome to the Nimbus Q1 presentation. For the first part of the conference call, the participants will be in listen only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the CEO, Jan-Erik Lindström, CFO, Rasmus Alvemyr, and Head of Investor Relations, Gunilla Öhman. Please go ahead.
Thank you, again, welcome. Strategic acquisition and healthy sales characterize the first quarter of 2023, is the headline. You have already switched. Some highlights from the first quarter, 2023. It increased by 6% up to SEK 304, compared with SEK 287 last year. We can see that the organic growth actually decreased with 2%, please bear in mind that this is affected by the timing of the new US business model. We are selling through our US office before we sold directly to the dealers. We will have a lack of time there. This is a one time thing, still affects these figures. Bear that in mind.
We improved the EBITDA to 7.7. Maybe then more important, the EBITDA margin increased to 2.5 compared to 2.2. We have a good order book of 953 million SEK. Especially worth mentioning there is that North America then representing 26%. It's in line with our expectation and the plan. Order book, of course, strongly affected by the continuous lower demand for what we call the low-end boats or the smaller boats, below 1 million SEK. Further on from the quarter, we have this signed the agreement to acquire EdgeWater Power Boats and expected closing actually very soon now during quarter two, 2023.
During the quarter, we have also started then to take on all these dealers that has been waiting for our boats. It's then roughly 10-12 dealers that we have taken on during this quarter then, and there is more to come. The supply chain has stabilized then, and that, of course, then contributes to the productivity improvements. If we then look a little bit about who we are. Again, then, we are founded in 1968, a lot of experience, old company. Already from the start, we have started the international trade then, so we have a long history of international sales, as we say here. We have our true house of brands then.
The house of brands then is all so far, now we have EdgeWater, of course. From the Scandinavian perspective, it's well-known brands, and they all score very high in the brand awareness, and actually then globally. If we jump to the end there, what has happened during 2023, in January, we presented the Nimbus 465 Coupé. Of course, very exciting for us. We are actually then entering a new segment with the Nimbus brand. It was very well received. In March, again, then the agreement to acquire EdgeWater Power Boats, which will give us an excellent platform for the further U.S. expansion. A reminder again then, also a little bit, who we are.
Our footprint today then we can see that we have still by our own four factories and then five factories where we buy complete boats outsourced. You have who has followed us knows that the target is then actually to have slightly more than 50% outsourced. That is a part of what we talk about when we say flexible production. In the middle there, you see that we talk about the scalable cost base set up, and that is of course an important key, and it's about scaling up or scaling down, and it's based on time or based on days, as we say here. This is then of course, important then since the recession is visible. Again, it's a recession.
It's not the financial meltdown, it's more about adjustment than anything else. We have our production efficiencies, which we work very hard with a modular boat building process then. We want to of course achieve synergies of different kinds. Of course then without jeopardize the brand, the integrity, which is important for us. If we look at the drivers that we're still working for, they are still valid, the overall wealth is increasing. We can say that as an average then we are well above 2.5 times more money in our pockets if we compare to year 2000. We talk about the staycations. The staycation is an old trend.
It started well before the pandemic hit us. Inside this, we have this outdoor trend then that continues, and we as human, we tend then to spend the extra money that we talk about close to where we live. We're buying summer houses, we're buying things to use for the outdoor living, among that, of course, boats. If we look at the industry itself, we have this aging boat fleet. We talk quite a lot about North America. It's exciting for us. From that market, we know that it's above 40% of the fleet in U.S. is actually older than nowadays 23 years. They are built before year 2000. As you all know n ow probably, North America is 50% roughly than of the world market.
If we then look at the technical development, also a good driver, the industry itself, due to the development these days, and what we're aiming for then is, of course, to make it less stressful for the captain and also for the passengers, of course, to be out there, even if the weather is slightly rougher. We have this auto trim, and we have the electronic charts and et cetera. It's also about the easy boating. It should be easy to actually have a boat and to own a boat or to rent a boat or whatever. It's about service, it's about information in real time about the status, and it's about winter storage and things like that. We have the maybe most important thing, that's the in-water handling.
It always scores among the three top things that boaters all around the world wants to have a good performance on. There we have, of course, the auto trim. We have the dynamic positioning systems, bow thrusters, auto docking, supported docking of different levels, et cetera. This is good because for us it's good because that's is a very good driver, and especially then if you combine it then with the aging boat fleet because 20 year, over 20-year-old boat doesn't have these things. If we look at the order book development, the order book then decreased by 23% compared with last year, mainly then driven by lower sales on low-end boats. The order book is now, as we say then, well-balanced geographically.
I already mentioned that North America is 26%, you can actually say roughly one-third then is in North America, one-third in Europe excluding Nordics, and one-third is in the Nordic countries, which then is big difference from the situation before. Order book in 2020, 2021 and beginning of 2022 then of course still then boosted by the pandemic effect, today then we have this normalized situation then. Remember, it's still a high order book. The prepayment amounted to 20%, same as last year then actually, of the total order book value.
Also worth mention, below on that page there, the order book in North America has increased to then SEK 245 million, increasing rapidly, actually 60% year-over-year and setting a new record. The investment starts to pay off. With that, I leave it to you, Rasmus.
Thank you, Jan- Erik. The net sales in the first quarter amounted to SEK 304 million compared with SEK 287 last year, which was an increase by 6%, the organic growth was -2%. Sorry, I think I got the wrong page there. The sales in the Nordics and Europe was in line with last year. We only noted that small changes on those markets. In Nordics, the sales amounted to SEK 72 million, in Europe, SEK 100 million. On other markets, including North America, the sales increased by 59% to SEK 65 million, which was the same trend as we have seen in the previous quarters.
Our investments on the U.S. markets during 2022 has started to somewhat give effects during the sales in the first quarter. But this is expected to increase further in 2023 and 2024. As Jan-Erik Lindström mentioned earlier, our new business model has also been implemented in North America that temporarily has delayed some of the revenue recognitions in the first quarter. In Sweden, sales dropped by 5% to SEK 68 million due to weaker demand on mainly used boats. The sales of new boats was fairly stable, but the ordering take was lower than last year, especially related to smaller boats. Now I go to the sales development.
As I said then, the net sales in the first quarter amounted to SEK 304 million, compared with SEK 287 last year, which is an increase by 6%, the organic growth was minus 2%. The difference in between those is fully related to currency and then mostly the euro. Important to have in mind when looking at the first quarter isolated is that this traditionally is the smallest quarter, together with the fourth quarter due to seasonal effects in Sweden and the Nordics. On LTM basis, net sales ended up in at SEK 1,769, which is an increased by 40% compared with last year's LTM figure and by 91% compared with the IPO from 2020.
Distribution of sales through own dealers decreased by 4% compared with last year and ended up at 22%. The share of own branded products went up, which contributed positively to the consolidated gross margin. The EBITA margin in the quarter was slightly improved and amounted to 2.5% compared with 2.2% last year. The EBITA margin is traditionally low in the first quarter due to the seasonality swings. The gross margin increased up to 16.3% compared with 14.9% last year. The change mostly refers to improved production efficiency, as Jan-Erik mentioned earlier, where previous supply chain disturbances now has been sorted out and underlying routines and processes has been stabilized.
On LTM basis, the EBITA 2022 amounted to SEK 194 million, which is an increase by 16% compared with last year's SEK 167. The EBITA margin remained at the same level as the fourth quarter and ended up at 11% compared with 10.8% last year. OPEX in relation to net sales has decreased from 9.7% last year to 9% this year, mostly referring to leverage from the increased sales. We go to working capital. The net working capital increased in the first quarter by SEK 120 million to SEK 520 corresponding to 29.6%.
Normally, net working capital increases significantly in the first quarter and reaches the peak level because of this time of year contains the highest level of demo boats and stock levels at own dealers. In relation to last year, we now have higher stock levels at the dealerships due to this softer market situation compared with 2022 and 2021. Overall, our impression is that the stock levels are reasonable levels in relation to total sales and the dealerships and the softening market. Compared with last year, we have somewhat, we are somewhat ahead in the production and the delivery schedule. In addition to the increased the level of finished goods of boats, net working capital is also affected by higher levels of safety stocks that related to the previous supply chain disturbances.
The levels are expected to be normalized gradually during 2023, even if some minor improvements also was noted in the first quarter. The temporary effect from the foreign VAT, value-added tax from the fourth quarter has continued and amounted to SEK 47 million as per the first quarter, affecting the net working capital in relation to LTM sales by 2.7%. The expectation is that this effect will be clear out during the second quarter. We come to our financial targets. We say that the organic growth should exceed 10% over a business cycle, including acquisitions of dealers but not brands. As per the first quarter now, the organic growth was 11.3%. The EBITA margin should reach 10% in a medium term, and our actual figure is 11.0%.
We should have no senior debts, except for real estate related debts and a check limit. As per today, we don't have any other financial debts beside this check limit since we now has repaid this real estate loan of 60 million SEK that we previously had on the Gothenburg facility that was sold in April. We have a dividend policy to pay out up to 30% of net earnings, taking into account financial position, cash flow, growth opportunities of the company. When the EdgeWater acquisition was announced, the board decided to withdraw the previous proposed dividend of 1.50 SEK per share. Over to you again, Jan-Erik.
Thank you. Again then, North America, some keys. We have this acquisition that we have mentioned before of the EdgeWater Power Boats, where we actually then get a full functional setup in U.S. with everything you need for the further expansion. We have several new product launched then during the quarter one, 2023, three that is actually then also supporting this expansion. We have strengthened the dealer network and also the group presence, then with our local organization and then actually a headquarter. The headquarter is not only for North America, it's actually for America.
We're from on that point, we still feel that we need to focus still on North America and later on, we will look into South America, which is also an exciting market, where we actually now with EdgeWater and but also with our current portfolio has suitable products. We also get a broader participation in relevant boat shows. We get it through our dealers now. When we are expanding the dealer network, we will also then attend more boat shows through the dealer. That is also important to get out this brand awareness, of course, but also to show our products. Some market key takes away then, Nimbus Group order book again, record level, in North America, 60% growth year-over-year.
We are talking about the world's largest boat market. We have talked about the aging fleet. Last year's figures was 46%. We know that it's still well above 40% that is built then before 2000. Today's market are well below record if we look at the total market and the world market and the North American part of it, as we still have, we still haven't reached the peak. We're also talking about, and Rasmus talked about the how we have grown, the growth for us from the IPO, but you can also look from earlier on, from 2014 or something similar.
We can say that the North American market has growth by 4.6%. We have a figure that beats that figure. We can also say, today we know a lot, as we can say that the North American market is well-suited for our products. With that, I think I leave it to Gunilla Öhman to talk a little bit about the ownership in Nimbus.
Yeah. This is fairly the same as we have seen before. Our major shareholders remain R12 Capital, the family office, and Håkan Roos the next one. That was the situation end of March.
Good.
We're open for questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Victor Hansen from Nordea. Please go ahead.
Thank you, operator. Hi, Jan-Erik and Rasmus. It's Victor here.
Good morning.
A couple of questions from me. Hi. First off here, so you signed several new dealers in North America recently. Do you expect a ramp-up period here, or should it materially support your sales already in 2023?
Maybe a long answer then, a typical dealer, especially the North American market, doesn't work the same, we have talked about that before, as the European market. In North America, they are selling from stock. So far, we don't have built up any stock in U.S. To begin with, we have that effect that will then of course be a ramp-up. The demand we have on the dealer, we talk about it's an important boating district that our boats fits in the market, et cetera. Of course, if the dealer then should be able to live on our brands, then he needs to sell maybe, let's say, 10, 12 boats per year.
It's important of course, that we get these stock levels in place of course, but also that we have the capacity to produce these boats.
You're correct in that perspective that there is an onboarding period. It takes some time until.
Absolutely
... until the dealer is fully up and running and have the boats at the yards, et cetera, and relevant models, et cetera.
Absolutely.
Mm-hmm.
Absolutely.
Okay, great. You mentioned this in the report that you had, inventory build up among dealers. What regions are you mainly talking about here?
Here I take the opportunity to say it's not too high, and that is important to keep in mind. But for now, when from quarter three, we have start to decrease the number of produced boats. We don't want these levels to go up further. The region we're talking about, it's the Nordics, but especially then Sweden actually. If you look out for in Europe, for instance, we're always following how many boats is actually in stock at our dealers. If you look at the picture in Europe, there are low levels in Europe. If we should call it a problem, the problem is then the Nordic countries where we have this soft market as we have talked about earlier now.
Yeah. Got it. I'm wondering here, how much of your backlog consists of low-end boats now, and what was it in Q1 last year?
Oh, it's very low. Actually, I don't have the figure to give you, but it's very low. It, it's, I should not say nothing, but of course we have a couple of boats there, but very low. It, it has disappeared more or less from the order book. We still, and that's also important to keep in mind that it still is the sales, and that is more of in for out, which is normal during this part of the season. The lack in the, in the order backlog that was created, already in October, November, where you usually see this increase from the smaller boats now in the order book.
That is in addition to Jan-Erik's answer, I can also mention that this is a difference compared with what we have seen in the last years, because at that time we have had an order book also for smaller boats because of this high demand in the, in the Nordic market. That is a difference in in the size of the order book.
Yeah. Makes sense. Two more questions here. You did a sale leaseback here of your Gothenburg property. Do you plan to make any more SLBs?
No, we don't have any further.
We don't have anything to sell. No, that is a part of our strategy. We should focus on our core business, and we should not, so to say, have a lot of properties to take care of. It's about focusing. Of course, when we bought EdgeWater, for example, we bought also the property, and that may very well happen also in the future with other deals. We are not afraid and we're not, so to say, despite to owe properties, but it's not in our core. I think that could be guidance for you.
Okay, great. Only one question remaining here, I'm wondering how fast can you change your production from small to larger boats? This should also lower your outsourcing production share. Is that correct?
Yes. If I start from the second part of the question, it's not that easy so to say because your different factories, that is, not equally good on everything. It's about the physics actually than, if you have a factory where you built for smaller boats, then you cannot build bigger boats there because it's, the roof is too low or the other things. The travel lift could not, lift the boat, et cetera. You have to look on what type of factory is it that we are looking at. That is important. It's not a quick thing to do.
At the same time, we started already, if we're looking at Nimbus now, we started already during the end of quarter 3, we could say then. Already now we, in for example, Finland, we have actually done two out of totally four factories. Even if we say it's one factory, it's three different buildings in what we call Kuopio. Where we actually done already have switched in two of them. One of them is building only the bigger boats, and one of them is still because we still need some capacity on the smaller boats then. It's actually done building smaller boats. This will continue, this is something is more or less daily business.
It's not that big thing, but it will take a couple of months if you switch. Absolutely. I hope that was-
Okay.
Yeah.
Yeah.
That's right.
That's very helpful. Thank you for all the answers. That's all from me.
Okay. Thank you.
There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
There are no more comments or questions, in the web either. I'd just like to remind you, that our AGM is on May 16th, you're very welcome, if you're a shareholder. Our second quarter report is due on July 18th. Thank you.
Mm-hmm. Thank you.
Thank you.