Operator, thank you all for joining this audio cast. I'm Erik Stenfors, the CEO of HANZA, and we have several interesting things to review today. Let's go directly to page number two. Here is the presentation of today. I will start with a short strategy recap to put the latest development in context. We will walk through the highlights of the third quarter. Next, we will look at the acquisition we did just a couple of weeks ago, a company named Beyers. I leave the floor to Lars Åkerblom, our CFO, who will talk about the financial development and also the financial impact of this acquisition. We have a look at the future, and we end with a Q&A session. We move to page number three.
We started the company in August 2008. Then we focused on Nordic customers, and we grow rather rapidly. We see the graph to the right. After 10 years, we were almost up in SEK 2 billion in annual sales. At that point, we decided to take the next step and launch our concept in the large economy of Europe, Germany. Did so by the end of summer 2019, and the work with expansion during the autumn of 2019, then came the pandemic. It was quite hard on us. We had one customer who lost half of its volume, and later on it was the shutdown, and in Germany, it was quite severe. Couldn't do any customer meetings, couldn't do any factory audits.
By the latter half of 2020, we sat down and did analysis how to proceed, and we concluded that the market will return eventually. We also think that the need for HANZA's offer will increase. Why? Because the pandemic points to the weaknesses of a global and complex supply chain. Therefore, we decided to make a quite extensive activity plan, which we call Roadmap 2021, the largest we ever did in the history of HANZA. Let me turn to page number four. On this page, you see the six places where we have put down the HANZA flag. That's where the areas where we try to collect different kind of manufacturing technologies, building small industrial parks we call manufacturing clusters. In this Roadmap 2021, there was a lot of activities.
We started already in January to build a new production facility in Estonia. 12,000 sq m will open up in just a couple of months. In Finland, by the end of first quarter, we acquired a really high-tech company when it comes to treatment and mechanic structures. We decided to move to a larger facility in China, and we opened up in Sweden a new department for conformal coating. That's when you protect electronics from harsh environments. Now the latest move was the acquisition in Germany, which we did just in October 26. A lot of activities, and if we then turn to page five. We can summarize the third quarter with one word, busy. Busy because all of these activities.
We have an organization which is decentralized, meaning that we have excellent presidents of the different clusters. You see the organization chart to the right. Actually, we can work in parallel with all these activities, meaning that we're moving HANZA forward quite quickly now. We have a modular organization, meaning that we can add the acquisitions without the need to redo the whole organization. That was, of course, a large part of the work during third quarter, especially to the negotiations with this acquisition. We also have some group priorities. We are working with the global HR function. Our aim is to create the industry's best workplace. We're also working with sustainability.
If you look down to the right, you see how we then transform product-owner companies from a setup with traditional contract manufacturers to the cluster structure of HANZA. By doing that, you lower the cost, but you also lower the CO2 emissions because you do reduce number of shipments. Now we are working to do an analysis exactly how much CO2 you can save by moving manufacturing to one of our clusters. We are also working with information security. There's a cyber war going on, and we have to protect not only HANZA's factory, but also our customers' documents. If we turn to the market situation, Lars will talk more about this. We had an upturn in sales. We see a strong position. We see new orders coming in. Good sales in the Nordic regions.
In Germany, it's a good order intake, which comes before the sales, and Lars will tell more about this. It's a turning point, so it's really good, the order growth in Germany. We are, of course, having the battle with the material shortages like the rest of our industry. It has impacted our sales and our earnings. Then again, we hear a lot from our customers' feedback that we are doing fairly well under these difficult circumstances. Let me turn to page number six. The acquisition. Beyers, as it is pronounced in German. This is a model acquisition. We have talked about this many times that we do not acquire companies to become bigger, but to become better. We have a list of acquisition criteria. You see them in the middle box here. Geography.
We were located in Remscheid, that's just east of Düsseldorf, this company. Beyers is located in Mönchengladbach, just west of Düsseldorf, so the distance is only 70 km. Ticking that box. Technology. What we have then in Remscheid is a factory focusing a lot of R&D. We're not only contract manufacturers, we're also selling contract design. We have a manufacturing of mechanics, final assembly, and also a portion electronics. But that's the smallest part of our previous factory. That's why we were aiming to get more electronics. That's also what we got from this acquisition. It's a state-of-the-art manufacturer. You see the building up to the right. Been doing electronics since 1985. A lot of competence, good machinery, a modern tailor-made building from 2009. We really got the technology increase we wanted on the EMS side. Culture management.
We do quite extensive due diligence also on the HR side, not only on the legal, financial and tax side, in order to make sure that we have the same philosophy and company cultures that we can make an easy integration, and that box was also ticked. Customer base. They've also been hurt from the pandemic, of course, and they had one customer working with, machinery events, so to theaters and sports events, and of course that was down to zero. It's coming back like the other customers we have in Germany. Also really good customer base. Sales this year is expected at EUR 80 million, and Lars Åkerblom will come back to this. I'd like to stress, this is not only another acquisition, this is a restart for our expansion in Germany. That's important.
With that, I leave it to you, Lars, on page seven.
Thank you, Erik. Looking into the quarter three report, it is a strong report, solid and strong report. What we show is organic growth and continuous margin increase. We could have been even stronger with better material situation. The material shortage has reduced both sales and earnings in Q3. Also as a start to remind that July in quarter three is always a month that takes down the sales and the result. Based on that, we see it as a really strong quarter three report. Looking into the sales, we have a 19% increase of sales. If we take away the acquisition of Levyprofiili and the currency change, it is a 12% increase.
We reach close to SEK 600 million in sales in quarter three. On rolling 12, we are up on close to SEK 2.3 billion in revenue. The earnings are above the financial goal, which is 6%. We reached 6.3% and by SEK 37 million in EBITA. Compared to last year's 4.3% and SEK 21.1 Million in EBITA. On rollin g 12, we are on SEK 119 million with a margin of 5.2%. Then we turn to page eight, looking into the segments. We see a really strong development of main market from a profitability perspective.
Main Markets show a growth of 6% in organic growth, but of a profitability of 9.5% on EBITA level compared to 4.3% in 2020. Other Markets has a really good pace development. We see an organic growth here of 20%, but the same level of profitability as last year, 3.4%. The main reason for not reaching as high profitability in other markets as in Main Markets and what we foresee is the material shortage and the challenges with material in quarter three. That we see in the future that it will even out and not be as big of a problem or such a big difference between the markets going forward.
We turn to page nine, looking into the balance sheet and the cash flow. We see that we are having the same level of equity to assets ratio, 32%. We have a cash flow that is negatively affected by the increased stock at the subsidiary level and increase in work in process, et cetera. Here we see that going forward, we will go into a more normal level of stock and not see the continuous increase of stock. We thereby see that we will continue to have a strong cash flow. The net debt has increased also due to the increase of stock.
If we look into the EBITDA and the fact that we have increased the net debt by the acquisition and also by the fact that we are building a new building in Estonia, we see that going back to the same time in 2020, it's actually more or less the same net debt. If you compare it to the EBITDA, it's less. The EBITDA compared to the net debt has decreased from 3.7 a year ago to 2.9. The result leads to a stronger earnings per share. For the first nine months, we see earnings per share of SEK 1.56 compared to negative figure a year ago. We turn to page 10 and the acquisition of Beyers.
The purchase price of Beyers was equal to the equity in the company, approximately EUR 2.7 million. That purchase price was paid in cash. The reason for that is that we see that we have a strong balance sheet, and we are able to finance this with our own resources. There's also an additional purchase price that can be of maximum SEK 2.5 million, and that is based on increased sales for the fiscal year 2022 and 2023. We see transaction integration costs occurring in connection with this acquisition of approximately EUR 1 million. The main part of this will hit the P&L in the fourth quarter of 2021.
The expected estimated sales for 2021 in Beyers is EUR 18 million, and that is reduced or decreased due to the pandemic with approximately 10%. The result is also negatively affected by the downturn in the economy due to the pandemic and the lower sales. They are right now running on a break-even level. The net debt in Beyers under German GAAP is approximately EUR 4.5 million before any changes due to IFRS. We expect this acquisition to have a positive effect on the HANZA Group, both growth and profitability already in 2022. With that, I hand over to you, Erik, the summary and the outlook on page 11.
Thank you, Lars. The short summary, we saw a very successful quarter. We're increasing sales. We are increasing margin, not only from one year ago but also from the second quarter this year, and that's under very difficult material situation. Also, we finally saw the upturn in the order intake in Germany, which we have been waiting for and forecasted. Also, we did a great acquisition. This is really a perfect fit to our operation in Germany. As said, it was not only an acquisition, it was a restart of our German expansion. This together with the Roadmap 2021, when the other activity kicks in, we really feel that we have an excellent condition for further profitable growth. In short, we are facing a bright future.
With that, I leave over to any questions on page number 12.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Our first question comes from Adrian Gilani with ABG. Please go ahead.
Hi, this is Adrian from ABG. I had a question, first of all, regarding the profitability. In Q2, you mentioned that 70% of your clusters had an operating margin of around 10%. Is that still the case for Q3 or has that figure either increased or decreased since then?
Hello, Adrian, this is Erik speaking. We haven't revealed those figures. That was more a way to explain that our top clusters are having higher margin than normal contract manufacturers. But what we have said, and what I think is important from this quarter is that we only had two solid months since July is the vacation period. If you compare quarter two to quarter three, there is an upturn in the margin. Maybe Lars, if you'd like to add to this.
No.
Okay.
No.
Sure. Also regarding the other market segment, just how much did costs associated with building the new factory in Estonia affect other markets in this quarter?
Actually, there is no impact on the P&L. That is purely on the balance sheet. Of course, there's some work with the construction, but it would not affect the figures on the other markets in the P&L this quarter.
Okay. As for the market in general, when you say that raw material prices and component challenges should persist into 2022 in your report, do you expect these issues to have an even impact across all your markets? Or should we factor in a harder hit on some markets than others?
I guess, Lars, I think that we have guided also that initially, because of the almost extreme growth in the other markets, we had higher challenges there, but we're also coming to terms with those, meaning that it will be, let's say, more even challenges or less challenges in total. I don't know, Lars, if you'd like to add something?
No. I think what we see and what we expect is. That is, of course, hard to predict, but that they will not be also hitting one of the segments harder than the others. We foresee that to even out going forward.
Just another question on the recent acquisition of Beyers. So you say it's roughly at break even right now, and is expected to contribute positively to profitability in 2022. What kind of margins can we expect for Beyers, first of all in 2022, and also how long do you expect it will take for them to reach sort of mature profitability of around 10%?
I mean, we cannot give any numbers, but what we have said is all the activities we're running now on this Roadmap 2021 is to build capacity. We have a very strong market position, and we know that the electronics parts we have currently in Germany is not large enough for the order intake. That's the beginning of this. This combined with the return of the customers for Beyers should give a decent margin. Of course, we cannot give you an example. We have said that already next year this will contribute both the sales obviously, but also with the margin.
Okay. Just one final question on the cash flow. Obviously working capital weighed on operating cash flow in this quarter. Can we expect this to somewhat be reversed already in Q4, or will the supply chain issues force you to hold more inventory for a couple of quarters going forward?
We don't give any forecast on that. What we say is that we foresee that this rapid need of increased stock will even out, and that will lead to a more normal cash flow. If that also leads that the material situation leads to possibility to decrease stock and free up working capital, and when that can happen, we are not able to give you any answer right now.
Okay. Just as for the current trading, you haven't been able to decrease inventory right now in Q4, at least?
In Q4, we haven't released the figures, but in Q3, we still have to increase the stock and invest into working capital, partly due to the fact that we're also increasing sales, of course, but also in order to secure material. The material situation is hard, as I said, to predict. What we see is that most likely or what we predict is that we will come into more normal cash flow situation and a more normal need of working capital going forward.
Okay. Thank you. That was all for me.
Thank you.
Our next question comes from Fredrik Nilsson with Redeye. Please go ahead.
Hello, everyone. I want to start with the differences between the main markets and the other markets. I mean, you seem to have handled the material shortages in main markets very well, however, other markets did not. Looking at the change in margins relative to last quarter, the difference is quite substantial. Could you tell us a bit about why is there a big difference?
I can start, Lars, and just highlight that you saw also that in the other markets, we had a 20% organic growth, which is also quite high. Starting new projects and expanding under these circumstances is quite hard. We only had 6% organic growth in the main markets. Now we say that most likely the best of both worlds, we will increase the growth in main markets, and we will increase the margin in the other markets. That's what we are stating when we say it will be more similar in the future. It was a special situation in this quarter.
Okay, thanks. One more question from me. Very high margins in main markets. How did Germany perform during this quarter?
As Adrian noted, we have previously said that we have about two digits margin. Of course, if you look at this, there must be not too much added from Germany. We have said that we are not really restored in Germany yet. It is fair to take the conclusion that Germany is lowering the margin in this segment.
Okay. I see. I mean, it was quite a substantial increase in the margin compared to the second quarter this year, for example. If it's not Germany, then I suppose it's Sweden and Finland doing even better. Is that the right conclusion then?
I cannot make any other conclusion.
Okay, that's all for me. Thank you.
Also a reminder. Thank you, Fredrik. Just a reminder that we did some good activities in Finland in the beginning of the year. Of course, that will also help the situation. Like, if this we do in Germany will help us in a couple of quarters from now.
I remind you that if you do wish to ask a question, please press zero one on your telephone keypad. We have no further questions. I hand back the word to our speakers.
Okay, thank you. We turn to page 13, and I'd like to thank you again for joining this audio cast, and I hope that you will follow us in the future. Final reminder that all you need is one. Thank you and goodbye.