Hello everyone, welcome to the presentation of Husqvarna Group year-end report for 2022. My name is Johan Andersson, responsible for Investor Relations at Husqvarna Group, I will be the moderator today. As we have announced, very sad to repeat, is that our CEO, Henric Andersson, is not likely to return to active status as CEO. Pavel Hajman has been appointed acting CEO, today we have Pavel and our CFO, Terry Burke, to present the report. After the presentation by Pavel and Terry, we will open up for a Q&A session, you're welcome to ask your questions over the phone conference. You can also use the web interface to post your questions there, I will read them here in Stockholm. With that, again, welcome to today's session, I will now hand over to you, Pavel.
Thank you, Johan. Before I start, I would like to take the opportunity to welcome everybody to this session. I would also like to say that I'm truly sad that Henric Andersson is not here presenting the report today himself. In my temporary assignment as acting CEO, my ambition is now to lead our experienced organization and continue the implementation of the strategy that was formed under Henric's leadership. I would like to thank Henric, the full team, and our business partners for their dedicated work in 2022. Together, we've taken a number of important steps to build an even stronger group and also to strengthen our sustainability leadership in this past year. Moving on to the report for the fourth quarter and the full year 2022.
Starting with the quarter, we closed the year on a strong note and delivered an 8% organic growth, which was driven by our core segments, robotic mowers and battery-powered products. Subsequently, adjusted EBIT is the best quarter four result in many years. Looking at the full year and in the face of global challenges, I must say that our teams have come together in a very good way and delivered for our customers. As a group, we delivered a stable result for the year, and importantly, we executed on our strategic priorities despite macroeconomic and supply chain concerns that we've had. Our direction is clear. We took an important step in the group's ongoing transformation this year when we initiated an acceleration of our strategic transformation to lead our industry to low carbon solutions. We're stepping up our initiatives and investments in robotics, battery, watering, and professional solutions.
We're also strengthening our technology leadership. We have made several moves this year with groundbreaking innovations. Gardena EcoLine, Husqvarna Construction 94V PACE battery platform, and also the CEORA robotic professional mower being some of our successful launches. We have a strong product portfolio line up for 2023. We're committed to deliver on our customers' high expectations. With this introduction, let's take a closer look at the quarter. Looking on the left, top left side, sales was up 26%, whereof organic growth was 8%. As I said, the key driver was robotics, both from the professional segment as well as the consumer segments and also battery products. Subsequently, as these are main products for the Husqvarna Forest & Garden division, their organic growth was 15% in the quarter.
On the more challenging side, Gardena experienced continued destocking by our retail partners in the quarter also, this leading to a -11% organic sales growth in the quarter. Construction division achieved a -1% organic growth due to somewhat lower volumes. We managed to deliver a close to zero EBIT result, which is strong looking at our historic performance for quarter four. Terry will further discuss this in detail, the key drivers were really our success with substantial price increases, implemented during the season, that offsetted both the raw materials as well as logistics increased costs. Both sales growth and improved mix have also contributed to the result, of course, while we had a negative currency effect in Q4 .
Cash flow came in at almost a similar level as in quarter four last year. Still we have a too high working capital level driven by both receivables and high inventory. We have a lot of activities in place now to reduce our inventory levels for the season 2023. Furthermore, the board has also proposed an unchanged dividend for the year at SEK 3. Robotics and battery achieved an improved growth in the second half of the year. This drove up the share to 15% for the full year. As you recall, in previous years, we have been on a higher level. Now our ambition is to continue this recovery. We have had a better supply chain situation and product availability during the second half of 2022 that now will go further into 2023 also.
Importantly, we have a strong robotics portfolio and also many new battery products for the season 2023. With that summary, I leave it over to you, Terry, now to go through the numbers a little bit more in detail. Please.
Thank you, Pavel. Hello, everybody. Terry Burke here speaking. The Q4 result, I think overall was a solid Q4 performance from a financial perspective, and that was really driven by the Husqvarna Forest & Garden division. Organic sales growth in the quarter was some 15%. Operating income of 4%.
The improved sales and also the operating income was really driven by our robotic mowers. Both as a continued solid performance with our professional robotic mowers, really with CEORA, and also an improved supply chain situation, which enabled us to fulfill some of our back orders in the residential robotic lawn mowers. Price increases have continued to be good, they have also continued to offset the higher raw material and logistics costs that we've faced during the year. Husqvarna Forest & Garden division did have a negative currency effect of some SEK 60 million, which impacted the operating income negatively, of course. If we look at it from a full year perspective, organic sales are flat and an operating income of 10%.
We had good growth in pro handheld during the year, and particularly during the second half of the year, we had an improved situation with our robotics. We are still down overall from a volume perspective in robotics, but at least during the second half of the year, we were able to catch up. I think one thing to really call out there is around the CEORA launch, which was extremely successful during the year, and we reached our target with regards to sold units in 2022. The result was impacted by lower volumes and unfavorable product mix. Overall, there was a currency effect of some negative SEK 50 million for the year in Husqvarna Forest & Garden. Moving over to Gardena. It's been a challenging year for Gardena, and Q4 was a more or less a continuation of that.
What I mean by that is organic sales 11% down as the retailers have continued to destock, and an operating margin of a -21.4%, which is an improved situation compared to Q4 2021, which had a -25.3%. The lower volumes have clearly impacted the operating income. Price has offset and compensated for the higher raw material and logistics costs. Orbit had a solid Q4 and contributed to 26% of the sales and no dilution effect. Taking the full year perspective, overall, a -7% organic growth for the full year and an operating income of 8.6%. We've talked about this in previous quarters. Clearly, there has been a retailer destocking during the course of the year in the retail channel, impacting Gardena.
What has been positive in the sense that we have improved our market positions. Whilst our sell-in has been challenged, actually from a market perspective, we've improved our situation slightly. Orbit contributed to 31% of sales and for the full year, they had a dilution effect of 1.4 percentage points. Construction, they had a negative 1% sales development in Q4 and an operating margin of 6.1%. They were clearly impacted by the lower volumes and the negative mix during Q4 . We did have good growth in demolition robots and diamond tools and the price increases have continued to offset the raw material and logistics costs. Moving on to the full year perspective, organic growth of 2%.
We've had a particularly strong year in power cutters, which has been really great to see. That has really helped us with our organic growth of 2% over the course of the year. Unfortunately, construction have been impacted by negative supply chain disturbances, which have really driven up costs, and also the lower volumes have impacted the operating income. Operating income for the year landed at 10.4% versus 11.7% 2021. In Q3, we announced our strategic acceleration program, and this was really to take another significant step to make the group more competitive, sustainable, and increase focus on value creation levers. I'm happy to say we are on track with our program.
Of course, it's still early days, but so far we are on track and things are moving according to plan. We talked about wanting to increase our investments in these value creation levers and an additional SEK 400 million per year to be invested in the four areas that you see on the right-hand side, being robotic mowers, battery-powered product, professional solutions, and watering. We will also proactively exit around SEK 2 billion of low margin petrol-powered consumer business from 2024 and also reduce our installed capacity. This will deliver yearly savings of some SEK 800 million with a full year effect by 2025. In Q4, we booked SEK 1.8 billion of the one-time costs. In Q3, we announced approximately SEK 2 billion of one-time costs for this program, and we've booked SEK 1.8 billion of those during the Q4.
Moving on to the bridge. First of all, let's keep the perspective. This is our smallest quarter by far. We have a solid performance during the quarter, moving from a negative -2.2% margin to more or less a flat margin, slight negative 0.1% in the quarter. We have a positive mix effect during the quarter, really driven by the robotics. Again, we call it recovery rather than growth. Really driven by that robotics recovery, improved our mix. Price increases, as you can clearly see on the chart, more than offsetting our raw material and logistics pressure. We continue with our transformational initiatives. We continue to invest some SEK 110 million in the quarter in this area. We have the negative currency effect of some SEK 45 million.
Full year, we moved from a 12.1% EBIT to a 9% EBIT for the full year. Obviously, during the course of the year, and particularly during the first half of the year, we were really impacted by the negative supply of robotics, which impacted the mix and the financial result. Lower volumes throughout the year and some higher costs, you know, around our operational costs and such like, they have all impacted with a negative SEK 1.4 billion. We've had very robust price increases during the year and getting very close to SEK 3 billion, which I think has been a very solid performance by the group in price, which again, as you can see visually on the chart, more than offsets the raw material and logistics pressures.
We've invested, continued to invest with just below SEK 400 million in our transformational initiatives. We have a positive currency effect of some SEK 320. That lands us at SEK 4.85 billion and 9% EBIT. Moving on to the balance sheet. We have a very solid financial position. Yeah, I think that's, you know, we have to be clear we are in a solid position here with the balance sheet despite our negative cash flow development during the year, which I'll come on to in a later slide. We have had higher working capital. You can clearly see that. Inventories have increased by some SEK 5 billion when we look at it from a year-over-year perspective.
If I can just spend a minute to explain what that SEK 5 billion, what it consists of. We have SEK 1.4 billion of currency effect. We have SEK 1.6 billion of cost increase. Those two combined are some SEK 3 billion, and I would class them as non-operating increases, if you like. Our finished goods have increased by SEK 1.3 billion and our components by roughly SEK 1 billion. We've talked quite a lot during the year about the golden screw with our supply challenges, and that has really impacted around the components. That takes us to the SEK 19 billion, SEK 19.3 billion. Trade receivables has increased by SEK 2 billion at the end of the year, also be mindful our sales have increased by more than SEK 2 billion in Q4 . That's more of a timing issue.
Borrowings have also significantly increased, and that is really driven by our weaker working capital performance and negative cash flow. Moving on to our direct operating cash flow. Of course, this has been a challenge for us throughout the year, and we've landed the year at a negative SEK 572 million. What I would say is, during Q4 , the cash flow was a more comparable, and we landed at a negative SEK 1.3 billion versus a negative SEK 1.1 billion previous year. A much more stabilized Q4 cash flow. That was really impacted by trade receivables, which, as I explained earlier, is more of a timing issue.
We had stronger sales in Q4, which then also impacted the cash flow as that trade receivables is carried into 2023. Inventory, of course, also playing a part, and accounts payable is lower as we've tried to drive our inventory levels down. Net Debt/EBITDA , we are at 1.8, which is more or less back to the pre-COVID levels. The reasons behind this, we have a lower EBITDA in the year, some SEK 7.4 billion, and we have a higher net debt, which I touched upon a little bit earlier. With our working capital challenges and cash flow, we have increased our net debt quite some. That has, of course, had a negative impact on the development of this ratio. Overall, I would say a solid Q4 .
With that, I will pass you back to Pavel.
Very good. Thank you, Terry. As you know, sustainability is at the core of our strategy. We are on track on delivering on our Sustainovate 2025 program. For carbon, we have reduced our absolute CO2 emission from the value chain, including scope one, two, and three, by 32%. This implies a reduction of 1 percentage points compared with last quarter, I mean, Q 3, and - 5 percentage points further reduction compared to last year. Predominantly this year, the decline is supported by the overall lower volume sold. For circular, the last quarter of 2022 provides a total summary of 10 circular innovations, and we also have 19 nominees in the pipeline. We feel we are on the right path here towards the target of 50 circular innovations. We have two new innovations in this last quarter.
The first relates to ReSpare. This is a new marketplace for dealers to trade used parts and spare parts related to Husqvarna Forest & Garden Division. This is actually also a marketplace that can be used for trading refurbished machines. The second innovation that was approved here is the introduction of recycled polyethylene in blister film packaging in the Gardena portfolio. As for people, we're executing on our target to empower customers employee to make more sustainable choices. We are increasing our assortment of sustainable choices. That is products and solution offerings that has a significantly and a proven lower impact on the use of natural resources and on the environment.
Now with 572,000 sustainable choices sold, we are now picking up the speed on this journey to really empower 5 million people by 2025. Moving over to our operational ambitions. At the Capital Markets Day in 2021, we introduced operational ambitions to further demonstrate our commitment to our strategy for sustainable value creation. The ambitions include to be by 2026, a doubling of the sales of robotic mowers, to double the number of connected devices, and also to increase the share of electrified products up to the level of 67%. On robotics, we ended up the year on par with last year, measured in Swedish crowns. A good catch up in the second half, as we have touched upon earlier in this call, but we need to remember that we have a positive currency and price effect here.
Nevertheless, we still have full confidence in the long-term future growth prospects for robotic mowers, and we are executing on our strategy to change how the world is really mowing their lawns. Our share of electrification shows a decline compared to last year, and this is mainly due to the result of the supply chain challenges that we had in the first half of the year. Connected devices, they grew by 30% in this year. A strong performance, mainly driven by smart watering, but also supported by connected robotic mowers. If we move over to the product portfolio for 2023, we have a strong lineup of products for this year, which supports our strategy and makes us also very well-positioned in several areas. Let me mention a few ones here.
In watering, first of all, with Gardena, we have launched several interesting products which are addressing the resource scarcity. One is the extension of our well-received Gardena EcoLine product range. This is high-quality tools made with significant shares of recycled materials. In this range, we are now additionally launching a new watering hose made of recycled material. Another launch from Gardena is the new Micro-Drip-System with water conservation, so making watering much more efficient for gardeners. Within robotic mowers, the Husqvarna CEORA is now entering its second season, and we are introducing a new low-cut cutting deck as an add-on, and this is specifically targeting the golf courses, which increases the application, the area of CEORA, of course. Husqvarna Automower by the name of NERA is actually our first virtual boundary robotic lawnmower for the residential gardens, which we are introducing here in 2023.
This is based on our proven professional EPOS system. This NERA product now will cater to lawns up to 5,000 sq m with a precision actually down to around 1 cm to 2 cm and with no physical boundaries needed. As for battery products, we are launching several new battery-powered products that will play an important role in our electrification journey. In the United States, we launched the MAX series for residential customers. For construction, we are launching the BLi-X battery system. This is a powerful 36V system that really makes a big difference, and we are adding products to that line. In line with our collaboration with Bosch and the Power for All Alliance, we are also introducing a new range of battery solutions that will be launched for residential customers in Europe by Husqvarna and Forest and Garden Division.
In our professional segment, we also will launch several new products, among them new powerful chain saws, actually, which has also an improved emissions reduction. Summarizing our presentation and the year, it is so that we delivered a strong end of the year. We delivered a strong quarter with a high sales growth, mainly driven by key categories such as robotics and battery. We are progressing well towards our Sustainovate targets. The CO2 reduction is now on minus 32%. I'm also proud that during a full year of challenges, we have made good progress on our strategy execution, as well as delivering on our accelerated transformation. We have a strong product lineup for 2023, and we are well-positioned for the coming years. With that, I hand over to you, Johan, then to start the Q&A session.
Thank you very much, Pavel. Before we initiate the Q&A section, we also have a section on the dividends. I hand over to you, Terry, to go through that.
Thank you, Johan. The board makes a proposal for a SEK 3 dividend for the 2022 year. We are confident in our long-term strategy and the execution of our strategy. We continue to strengthen our positions in value creation levers. During 2023 and onwards, of course, we expect an improved cash flow situation and working capital. I think that's wrapping up the 2022.
Thank you very much, Pavel. but Terry. Now we're done with the presentations. We will start to kick off with the Q&A session. Just to remind you can ask your questions over the telephone conference, and we also have a web interface here in Stockholm that you can ask your question through as well, and then I will read them here. Please, operator, do we have any questions on the telephone conference?
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the queue, you may press star and two. Participants are requested to use only headsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Gustaf Adrian from SEB. Please go ahead.
Thanks, operator. This is Gustaf Adrian with SEB. If I may start on price increases rolling into 2023, and if you could put that in perspective to your own cost basket for logistics and raw mats. It seems as if external cost pressure has eased and maybe will decline year-over-year in 2023. As you write in the report, you fully compensate, thank you, for higher costs with own price increases. Could we get some color on that delta as you see it with current market conditions this year? That'd be helpful.
Hello, Gustaf. What I would say is, first of all, our outlook for 2023 from a raw material and logistics is relatively flattish. We see some positive developments, but we also see some continued negative developments, like for example, energy and such like. So overall, we're really looking at that from a flattish development price. I think we've talked about, we've had a very good price performance during 2022. High single-digit price. There will be a carryover, some carryover positive effect of price going into 2023. In addition to that, of course, there will be more normalized annual price increases. They will not be to the levels we had during 2022, but there will be some price activity also.
That sounds to me like a mid or low single digit net price increase to top line this year. Is that reasonable on a flat cost base?
Yeah. Yeah. I would say more or less reasonable assumptions. Yeah.
Mm-hmm. With the improved supply chains now, has that also impacted unit costs, as you see it, or is that included in what you refer to as external costs? Also, I guess, warehousing costs might add to unit costs.
The increased costs, of course, have impacted us throughout 2022, and that is now built into the unit costs.
Mm-hmm. Okay. Looking into 2023, you're right that the or as I interpreted, robotics still has some way to go to catch up with market shares you had before the pandemic, as some Asian competitors seemingly have had an easier time to get hold of components. What's the magnitude of that delta in terms of recouping your lost market shares just from being able to supply in order to fulfill demand? Is that something you could try to quantify a bit?
Yes. We have had a good, of course, improvement in the delivery of robotics here during the second half of the year, as we have told earlier. The supply chain issues have been mitigated. Of course, still risks remains. As we look at it right now for the year, we feel confident that we will be able to deliver upon the demands of our channel partners that they have posed on us. Of course, this is something that will stepwise take place here in Q1 and then potentially into Q2 also as the season starts. Exactly how that will play out in the end is, of course, difficult to say as we don't know exactly how the season will go.
We feel that our delivery capability is on a good level for next year in relation to robotics, both on the consumer side as well as on the professional side, I should say.
My last question related to the professional side of robotics. CEORA, seemingly sort of a nice end to the year. I think you referenced earlier that you're hoping to exceed 1,000 units 2022, if you can confirm that that was in fact the case. Secondly, if a optimistic yet reasonable assumption for 2023 might be some 3,000 units-4,000 units of CEORA, that'd be helpful.
Yeah. Well, yes, we can confirm that we reached our ambition of approximately 1,000 units in 2022. We see a very strong interest for these products. I mean, our customers are appreciating the productivity that they are getting through this product. Given also that we're launching the cutting deck, the low cut cutting deck now for this year, we think that we have even a greater application opportunity and we have ambition in this product. I wouldn't like to maybe necessarily confirm your numbers, but we are aiming at high growth of this product.
Great. Those were all my questions.
The next question comes from the line of Christer Magnergård from DNB. Please go ahead.
Hi, Christer Magnergård from DNB. Getting back to the balance sheet. You mentioned that you had a clearly higher borrowing in Q4. Is that only to, well, make sure that you have enough capital or cash during the Q1 season where you normally high capital? Secondly, interest cost going forward, given the very high interest cost we had here in Q4, what should we expect for 2023?
Yes, the borrowings have increased as a consequence of our cash flow situation during 2022. As I stated earlier, we are much more optimistic of an improved cash flow situation going forward, really heavily impacted by the net working capital and inventory buildup. Q1, if you refer back to the cash flow chart that we talked about, Q1 typically is at best a small negative. Of course, we need to be in a good position with liquidity and in quarter one can be a negative cash flow development. We're trying to be geared up in a good way for that.
Of course, once we reach Q2 and the season starts, we really expect to see that improved situation from an inventory and cash flow.
Thanks. What kind of net interest costs?
Oh, sorry. Yes.
Sorry to cut you off.
Yeah, yeah. Sorry, I've missed this one. The net interest cost. Yes, that has increased. Obviously higher interest rates as you say, higher borrowings has impacted. For 2023, we expect some SEK 700 million-SEK 800 million during the year.
In terms of, you mentioned that cash flow should be positive on the back of working capital release. What kind of production cuts should we expect during Q1, Q2, in order to free up the inventory?
I mean, of course, we are adjusting our volumes to drive down inventory. We obviously have to do that. So there will be some volume impact to the financial results as a consequence of that. That's in our plan and we feel confident that we will manage our working capital in a much better way during 2023.
Okay. Thanks. Finally, on, in Q4, you took a SEK 221 million write down on inventories, related to this restructuring program. That write down, is that components that should have gone to products that you won't produce or is it obsolete products or what kind of inventory write down is it?
It's a mixture. It's a few little bits and pieces that all go in. You're right in what you're saying. There is some component write-offs and some write-offs of inventory that we, you know, we will take as a consequence of our plan of exiting some of the consumer low margin petrol business.
Okay. Thank you.
It's all according to the plan.
Mm-hmm. Thanks.
Thank you very much, Christer. We have one question from the web here. It's from Anton Brink at Antaurus, and he wonders, would you dare to give some qualitative comments on 2023? How should we think around consumer demand?
I think we're all aware of the macroeconomic uncertainty looking into this year. If we look into our own ability, we have strengthened that substantially over the last year. I wouldn't say that all problems relating to components and transportation are fully solved, but we are in a much better situation. We have also geared up our production during the second half to be able to deliver on that so to say, input supply into our operation. We are prepared now. We are prepared also with a certain flexibility, both to take a potential smaller downturn as well as a smaller upturn in the demand that could happen. I think that the macroeconomic uncertainty can play out in various ways. The pressure on consumers and their wallet is potentially there.
At the same time, we also know that during the last couple of years, due to the pandemic, there has been a great interest in gardening. Many people have picked that up, have invested in their gardens, and potentially they could also continue with that, even though they would cut back on other kinds of spending. As you know, we are very early into the year. Only January has passed. Our season doesn't really start until April, May, so it's really very, very difficult to give any kind of, let's say, statement on how we think the year will go.
I think to add to that, Pavel, I would say, you know, we have been doing some scenario planning because of the high uncertainty. You know, we've built the business around certain scenarios for 2023. Depending on how we see that play out, obviously we'll follow the scenario as close as how the market develops.
Many thanks, and many thanks for your question, Anton. Please, operator, should we go back to the telephone queue?
The next question comes from the line of Johan Eliason from Kepler Cheuvreux. Please go ahead.
Yeah, good morning. This is Johan. I was just wondering about this sourcing situation. You mentioned that it has sort of improved. Have you taken any decisive factors? Have you moved some of your sourcing? I understand it was the semiconductors that was the issue from China, for example. I mean, we are hoping China will perform better this year, obviously, but who knows? Have you changed the geographic sourcing or dual sourcing or anything similar to make your supply more robust should these challenges come back?
The simple answer to your question is yes on all of your, so to say, statements there. We have worked very actively with the component supply. We have started actually to deal directly with main manufacturers of components versus previously going through various kinds of dealers and also partners that are producing, let's say, subassemblies into our products. We have also broadened the span of suppliers. That is based on the fact that we have also over a longer period now redesigned our products so that they actually can take in a variance of components of similar types, so that we simply reduce the dependency on one single supplier, one single component.
Indeed, we have taken, let's say, decisive actions on this, that has, basically led to the improvement that we have seen here during the second half of the year also.
Does this imply that your sort of gross margins will be negatively affected going forward? Or are you still achieving these good gross margins, especially on the robotic side?
I'm confident we would maintain our gross margins and price will of course offset any of the material cost increases.
Okay, excellent. Could you just repeat, how you see the inventories at your retailers for Gardena and the dealer networks for Forest and Garden, as well as Construction? Is it high, low, normal?
Yeah. I would say that from a general perspective, I like to express it in the way that we see a normalized level, but then it also depends a little bit more specific on which retail partner. If we talk a little bit about the dealer network, as you know, we have had some difficulties to actually supply into the dealer network earlier in the year. The supply that we managed to increase during Q3 has mainly been going out to customers, whereas I would say the majority of the supply that we have managed to deliver into the dealer channel during Q4 is stock filling to be prepared for 2023. At this point of time, I would say that we are coming to a more normalized level in the dealer channel.
Still, so to say, some, let's say, lower levels of robotics, which we mentioned here earlier, which will come in during Q 1. At the retailers, and especially when we talk about Gardena's retail, channel partners, as you know, there has been a destocking, throughout basically the full second half of the year. And this has led to a situation where we see that in some of the retailers where we have the insight into their, into their stock situation, that it is a little bit below, on watering and of course subsequently also on robotics. And that will be then filled up here. Given, of course, their view on how they want to position themselves versus the potential demand for the future.
As for construction, there has also been a shortage of deliveries of certain products throughout the year. We have been improving our ability also subsequently going over the year, and I would say that the levels at the construction dealers and customers today is more or less on a normalized level.
Excellent. Many thanks.
Good. Thank you. We have a few more questions here over the web. I think here's one important for Terry from Henrik at Carnegie, and he asks, "What are your concrete actions to take down the net working capital by 2023, and are you confident to achieve that even if if there might be a negative volume development?" What's your view there, Terry?
Yeah. Yes, we are confident. Of course, one of the big impacts that we had during 2022 was the golden screw, and the component buildup as we were waiting for this one or two golden screws to be able to complete a product. We, you know, that situation as it stands today. Now, I must say supply challenges can come very quickly, so, I wouldn't say we are completely out of the woods for the rest of the year. As it stands today, we are positive. That golden screw issue disappears, and that will help significantly to drive down components.
Of course, an increased focus on our inventory management and also driving that down in a good way, to really drive a positive cash flow will also be part of 2023 plans. On a trade receivables perspective, it's more of a timing issue in the sense that during Q4 we have higher trade receivables, but that really is a consequence of the higher sales, and that will correct itself and normalize during the course of 2023. Overall, yes, I'm confident we will manage our working capital in a good way for 2023.
Thank you very much. Maybe this is a question for Pavel. It's from Michael Johnson, it's basically two questions around Bosch. One is, of course, your battery collaboration. How important is that, and how has it developed, and how do you see that going forward? Of course, the other one is, do you have any other comment on that Bosch has, so to say, committed to buying 12% of the shares here?
We have an ongoing cooperation with Bosch, under the name the Power for All Alliance. We created this together with Bosch already in 2020, and the purpose of this was, of course, to ensure that we will be able to quicker drive the transformation versus electrification, and also enable customers to actually have one battery that gives them a versatile use over many products, Husqvarna as well as Bosch, but also other brands that are within the alliance. The ecosystem from a sustainability perspective is, of course, a very, should we say, sustainable thinking and has proven to be successful for us.
We have a good cooperation with Bosch in this respect, and we have also taken since earlier a decision to actually launch an additional product assortment for the Husqvarna division. The previous cooperation or the existing cooperation is for Gardena. We have now taken a decision also to actually introduce a new product line for Husqvarna Forest & Garden, a consumer line that also builds upon the one battery within the Power for All Alliance. As I said, over the years, this cooperation have proven to be very good. The ecosystem thinking is something that we strongly believe in enabling our customers to have a much more flexible, versatile use, and again, the sustainability aspect there.
We have, of course, also taken, in the news, of their, shareholding in Husqvarna in the recent days, from last week. We have no further information of what any potential ambitions from Bosch would be.
Thank you very much. A quick clarification from Henrik. What was your sales volume target for CEORA for 2022? Is it right that you're not putting out a specific number for 2023?
Our ambition for CEORA was to reach above 1,000 units in 2022, and we achieved that. We were above the 1,000 units. Definitely on track from that perspective. I don't think for 2023, I don't think we've ever been specific on a given number. I mean, yes, there's been numbers around, but I don't think we have officially communicated anything. What I would say is a significant increase and a ramp-up from that 1,000 units. As Pavel mentioned earlier, demand is strong. It's been very well received in the market. Now we bring the low cutting deck to the market as well, which will even further enhance the application and demand for the product.
We're very confident about CEORA, and we're very proud of the product.
Follow up there on CEORA from Steven Walker. With CEORA, are you seeing any competition out there today, or is it more you're competing with the more traditional, larger ride-ons?
Yeah. There are certain attempts to enter into the professional segments also from other competitors. We, at this point of time, do not really see any strong competition. I would say that still mainly the competition is among the traditional ride-on products that are out there.
Yes. Another one from Nicolas at Moneta. Your SEK 1.8 billion in restructuring cost that you have taken out of the two, how much is cash and how should we see, so to say, cash impact here, going forward, through the years you're executing on that?
At the moment, it's purely a provision booked into the accounts as a, you know, in accordance with accounting principles. At this moment, very little is actually cash out. We believe over the course of the next two, three years, there will be approximately SEK 900 million of cash out. Within the 2022, nothing really, or very small.
2022?
2022, there's been very little. 2023, there will be some, a small amount, but some.
Thank you very much. Operator, do you have any further participants in the telephone conference for questions?
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Karri Rinta from Handelsbanken. Please go ahead.
Yes. Good morning, Karri from Handelsbanken. Two questions from me. First is, regarding our EBIT bridge, these transformational initiatives that I think the total was close to SEK 400 million in 2022. Can you discuss or give us a few specific examples? What are these initiatives? Then maybe an outlook for 2023. Will these investments accelerate, stay flat or go down compared to last year? That's my first question.
Yeah. Hi, hi, Karri. What is in that? I mean, if I just was to give you an example, it would be something along the lines of our robotic investments. For example, CEORA investments would be in there. Some other, you know, go-to-market investments, electrification. Those type of things are already in there. I think we talk about on average some SEK 400-SEK 450 in transformational initiatives every year. We expect to maintain those kind of levels maybe a little bit higher. As we execute on our acceleration program, then we will increase that, and as we stated earlier, an incremental SEK 400 million per year once we get to 2025 and achieve the savings and so on and so on.
All right. Thanks. That's very helpful. The comment that you made about reducing installed capacity as a part of this restructuring program that you are executing, when should we expect to see something on that front? Are you referring to potentially closing down some of your factories?
Well, as we of course, ramp up our investments into the areas which are our, let's say, future value creating levers, we of course also have to adapt our overall operation where we are predominantly petrol-based. Our ambition to adapt this is of course the whole organization, also manufacturing units. Now, we are producing in a number of places in the world, we are right now looking into how do we actually ensure that we have the best possible efficiency within the units that we have. How do we in a good way consolidate? How do we get the scale and the efficiency out of that? The exact conclusion on any potential close down of units is something that will come later.
Eventually that will also something that will come towards the later period of the, of the three-year program.
Right. Thank you. Finally, what's your go-to-market plan for NERA, the virtual boundary lawnmower? Are you doing a Europe-wide launch in 2023, or is this more of a local launch at this point or regional launches at this point?
No, it is a European launch. Absolutely, this is a European launch.
All right. Thanks. That's very helpful.
Gentlemen, we have a follow-up question from the line of Johan Eliason from Kepler Cheuvreux. Please go ahead.
Yeah. Hi again. I was just curious a bit, talking about this NERA and then the consumer robotics. We, a few years ago talked a lot about the U.S. opportunity. What are you seeing there? Any changed ambitions in the U.S. consumer robotics now, potentially with this NERA technology? I think you have some competitors entering the U.S. robotics like Toro with their plans around the visual site sort of robot as well. Do you think it will support the market to finally take off or have you become more cautious to the U.S. opportunity again? Thanks.
Our ambition for establishing robotic mowing in the U.S. continues, of course. We have done a good progress in the past year with our products. We also see that the CEORA is very well-received as a professional product on the U.S. Market as well. Not only in Europe, but also in the U.S. We continue to launch new products there as well. We continue to invest in go-to market. We continue to invest in our dealers to be able to help us with the establishment of the Automower market. We do not really see that competition yet. We know that there's a lot of competition being marketed, but we do not really see it in the market.
I think that once it would come, I would say that it is a mixed feeling about that because on one hand it is competition, but on the other hand, yes, I think it will help us to build the acceptance and understanding of the robotic mower in the U.S. Overall, our ambitions are there, they are remained for the U.S. Please also be aware of the fact that there are also other markets which have a low penetration of robotics as of today. In Europe, U.K., for example. You also have Australia on the other side of the globe. We can also increase our penetration in other European markets as well, where we already have the product.
I think it's just also worth pointing out as well, you referred to the Toro robot coming in North America. That's actually a residential robotic, not a professional robotic. We don't see that as competition against our CEORA, but of course, competition against maybe perhaps our residential robots. I think it's worth clarifying given the Toro brand is normally a professional brand.
Yeah. That's good. On the subject of U.S., Orbit, are you seeing any synergies from Orbit and Gardena this season, or will that be further out? I think you have mentioned you want to take the Gardena robots into the U.S., for example, through Orbit's distribution network or retail partners. How is that looking this season?
Yeah. Well, if we start on the 2022 side, we have, of course, worked with Orbit to ensure that the integration into the group suits well. As we have pointed out, Orbit has certain difficulties on the cost side, on the supply side, but the demand for their products have been there, and they've had a good growth throughout the year. They are now launching a number of new products, and we continue to believe that Orbit will make a good platform for the Gardena brand launch into the US. Of course, we will be planning to address this with robotic mowers as well.
Exact details of how to, let's say, tap into the existing channel partner structure of Orbit, and potentially also how to coordinate this with the establishment of robotics through the Husqvarna Forest & Garden division in order to actually have a larger, should we say, penetration and awareness in the market. Those things are still being worked on, but they will come.
Okay, excellent. Then just finally, you had this chart on connected devices, going from looks like just below 3 million last year to 3.6 million. The delta here, is that Orbit's installations primarily of connected watering systems, or is it the robotic volumes in 2022?
It is mainly Orbit, but also the Automower Connect from our robotics. Mainly Orbit.
Okay. Thank you very much.
Okay. Thank you very much. We have a few additional questions over the web here, but since the time has become 11, we will reach out to you through email and answer them separately. I think with that, we take the opportunity to thank you everyone that was joining here today, and looking forward to see you soon again. If not, we will talk to you when we report Q1 in April then. Thank you very much.