Welcome to Investors Annual Accounts Presentation for 2019. I would also like to welcome those of you who are on the call with us and also those of you who are listening in or through the web. We will start, as usual, with our CEO, Johan Poechel, presenting our results followed by our CFO, Helena Saxon. And after that, we will have questions from all of you who are participating. And of course, after that, also time for individual interviews with media.
Welcome again.
Thank you, Wielke. And welcome to this presentation about our results for 2019. Let me then start to say a few words about the global economy. We saw during the last year that the economic activity in the world decreased, not only leading indicators, but also we saw that the economic activity went down. At the same time, we also saw that the interest rates remained at very low levels, and we saw that the Fed started once again to lower the rates a couple of times during the year.
The low interest rates we all know has, of course, spurred a very strong stock market that, to a large extent, has been driven by multiple expansion. If we look forward then, we continue to believe that we are in a softer period, and that is why we prioritize agility and also financial flexibility. I should also say, of course, that it is a clear positive that we have the Phase I agreement in place between China and the U. S. And there are also more clarification, of course, around the Brexit process.
So whether we are not as you know, we are not speaking to the stock market or the macro economy, how it will go. But we are prepared. Should it become a little bit tougher, we are prepared for that. And if not, agility goes both ways. Of course, if you are agile, you should also be able to ramp up if we would see improvements.
So we are basically, hopefully, and I believe that we are able to invest in our companies. Moving over to investor. 20 19 was a very strong year. Our total share return was up 40% during the year, which can be compared with the Swedish stock market that was up 35%. Importantly, we had a strong development among our subsidiaries within Patricia Industries.
The sales growth during the year was 13%, of which 4% was organic growth in constant currency, and the earnings growth during the year was 18%. We also had a number of very important activities taking place during last year. Of course, having the right people at the right place is a very central part for us being a large owner in these companies. And we have worked, of course, extensively both when it comes to the board and the management teams. Just to give you a few examples that you know, we have Bjorn Roosengen coming in as new CEO in ABB.
We have Helena Heerblom appointed to the new CEO of Epiroc and then Henrik Andersson appointed as new CEO of Husqvarna. I think these are good examples. Bjorn, we all know, has a very deep and long experience from the engineering sector. And when it comes to Helena and Henrik, they both have about 20 years of experience from their respective companies. So they really know their businesses.
We had a very successful IPO of EQT last year. And we cannot be other than pleased with the development of that, not the least the process surrounding that IPO. Last year, Electrolux announced that they will put the professional business on the stock market and that will happen this year. We invested more than SEK 4,000,000,000 in ABD last year. And the reason for that is that we do believe that they are active in attractive industry segments.
They have strong market positions in those segments, and we see potential for operational improvements going forward. We announced just before Christmas 2 significant acquisitions that were done by our 2 subsidiaries, Laubri and Tead. And these are not small add on acquisitions. The acquisitions that was announced by Laboree, clinical innovation represents about 35% of the revenues of Laboree. And the acquisition of TAVI that was announced by TIAB represents about 25% to 30%.
So these are really strategic acquisitions. And this is absolutely in line with our strategy to use the strong platforms we have. We have great companies with good growth prospects and also high profitability to use these platforms to do these add on acquisitions that and these are the 2 very good examples and now we come back to that. Then the final comment I want to make about 2019 was that we had a very strong cash flow during this year. First, the dividends from our ordinary dividends from the listed core investments was up 10% during the year.
We got the cash flow from EKT of CHF 5,000,000,000 and in Patricia Industries, the distribution from the subsidiary Cen3 amounted to CHF 5,700,000,000. In addition to that, we made a capital of exits. As you know, we did an exit of Alaris bringing in CHF 2,000,000,000 and also a capital of companies within financial investment. In total, exit proceeds amounted to more than CHF 5,000,000,000. So we end the year despite the investments in ABB and despite the increasing dividend, we end the year with a very strong financial position.
And that also made us continue the streak of increasing the dividend from SEK 13 to SEK 14 and that's an increase of 8%. Moving then over to the 4th quarter. In the Q4, our adjusted net asset value increased by 6% and our total shareholder return was 7%, a few percent is below the Swedish stock market. We invested another SEK 1,000,000,000 in ABD in the quarter and the adjusted profit growth in the subsidiaries was 6%. And the adjustment here is only for these 2 the transaction costs related to these 2 strategic acquisitions in La Brea and Tejeb.
And I will come back to those acquisitions later in my presentation. So Patricia Industries. You saw that in the Q4, the value change was minus 3%. And I think it merits a few words here. We had profit growth in the quarter, and we had a good cash flow.
That was clearly a positive and increased the value of our holdings. But in this quarter, we have multiple contraction and also the Swedish the strongest Swedish krona versus the euro and the U. S. Dollar also had a negative impact. So you can say that the profit growth and cash flow was mitigated by even bigger multiple contraction and some negative currency effect.
If we look on Patricia Industries, the value change for the full year 2019, I think this is an important picture. The value change was 23%. But if you look what drives that value change, more than 2 thirds of the value change is profit and cash flow in the underlying companies, while less than 1 third is multiple expansion. If you compare that to most of the stock markets, in most of the stock markets, multiple expansion corresponds to something like 8% to 85% of the increase. So I think we have a lot of substance behind the value change within Patricia during the year.
Moving then back to the Q4. The organic sales growth was 2%, the reported sales growth was 9% and adjusted profit growth was 6%. We have continued good growth in a number of these companies like Lavery, BraunAbility, Permobil, all growing between 4% 8% organically. The slightly lower organic growth in this quarter compared to the earlier periods is related to Nelikis and Novantija, but I will comment on those specifically because there are a couple of reasons for it. Starting then with MELLYKES.
Organic growth amounted to 1%, wound care grew 1% and surgical grew 2%. We expected, as you know, that we would see a lower growth rate in the 4th quarter that I also mentioned when I presented the Q3. And the reason for that, if you look on the blue bars, is that we knew that the Q4 2018 was a record level. So it was a tough comparison. So we expected to see a lower dose in this quarter.
There was a second thing also to mention that the growth in the emerging markets was while it was above the group average, it was clearly lower than what we have seen in the preceding quarters. And there are 2 specific reasons why the emerging market growth was lower in this quarter. Number 1, we saw destocking in China. And number 2, the company made a change of distributor in the Middle East. So we expect when it comes to margin markets that we will come back to better growth going forward.
The profit margin was essentially flat, and the company continued to deliver strong cash flow, which made it possible to distribute 2,600,000,000 to Patricia in the quarter. Permobil, organic growth of 4%, both power and manual growth. Seating and position had declined slightly in the quarter. And if I look on the geographical mix, North America and Asia grew, while Europe was more or less flat. The profit margin was down compared to last year, and that is not related to the gross margin.
It's related to OpEx. And within OpEx, there are 2 key reasons. 1 is that we are continuing to develop and expand within sales and marketing, But the other is also that we have an additional impact from initiatives to reduce the cost base. And also, Paromobil could distribute SEK 500,000,000 during the quarter. Lamborie had a very strong development during the Q4.
The organic growth amounted to 8% and that was driven both by strong development within urology and gastrointestinal. If you look on the profit development, it looks good even on a reported basis. But if we adjust for the $6,000,000 in transaction costs related to Clinical Innovation Acquisition, the underlying profit margin was actually 37%, which is a record level since we bought the company. And that is driven by that we are now seeing full good effects of the Cointix synergies, the synergies related to the Cointix acquisition and also the successful restructuring of the European operation. One thing for you to know here, we are saying that we are the price for this company clinical innovation is about SEK 5,000,000,000 or $525,000,000 Out of the SEK 5,000,000,000 we will inject roughly SEK 4,000,000,000 in equity and the remaining SEK 1,000,000,000 will be new debt.
So we will have a cash outflow of about SEK 4,000,000,000 going forward. And we expect this transaction to close during the Q1. So what is then clinical innovation? It's a provider of single use products for delivery and also in intensive care units for the babies and is mainly related to complicated high risk births. And to give you a few examples on what the products are, the biggest product is this one called Kivi and that's a vacuum assisted delivery device that is used when you basically bring the child out.
And the 2nd biggest product is the koala, and that is a product that measured contraction during birth. So then you have a pretty good picture, single use products related to high risk bars. We believe this has a good growth dynamics. First of all, high risk births go up and they do that because the ones having children in certain countries have more obesity. And secondly, people are getting older when they have their children.
And that leads to more complications. The second part, of course, is this there is an under penetration in emerging markets. And with the business within urology and GI that Laboree has and also with this business, it gets a bit the company gets a better critical mass to really go after certain emerging markets. So that is, of course, a potential and we know how to do that because we have done it in many other subsidiaries. This is a company that has had a good organic growth.
It's very profitable. The profitability is actually somewhat above the level in Laboree, and the company has an excellent cash flow conversion. It's a capital light business. So we like this business, and this is a company that fits very well in Laboree. Moving down to BraunAbility, good development in the quarter, 5% organic growth.
Profitability improved quite a lot compared to last year. And in this quarter, we saw very strong growth on the commercial side. Also, the consumer valves grew nicely, while lifts was down slightly in the quarter. And also here, we saw a very good cash flow here. They were very successful on the working capital side.
Moving down to Piyag, where I need probably to do some explanations. The organic growth was minus 9% during the quarter. If we look on the geographical split, Americas actually grew slightly in the quarter. So the fall from a geographical perspective is related to Europe and Asia. If we then look at the different divisions, you know that the biggest division within TEAD is vacuum automation.
That's the classical suction cups. That business actually grew slightly in the quarter. But all other divisions were actually down. And the biggest fall continued to be within robotic gripping. And you know we have a plan or the company has a plan to address the problems that we have within robotic gripping, and they are doing that right now.
But that is the biggest. The other reason that we didn't put in the report is within ergonomic handling, but that is not related to poor performance because ergonomic handling was also down quite a lot in the quarter. The reason here is just a comparison. Last year in Q4, there was a big deal to Heathrow Airport that did not repeat this year. So that is basically the key explanations for the weaker growth.
Then if you look on the profitability, adjusted for the transaction cost, the margin was 24%, which is down and that is mainly related to the sales drop. So moving down to TAVI. What is this? You have a nice picture where you can see the product. The revenue is SEK 350,000,000, which can be compared with TEABS revenue of about SEK 1,300,000,000.
So it's a sizable acquisition. We see strong sales growth potential for this company due to e commerce logistics. And if you look on the profitability of TAVI, I can say it's a they have a very good profitability, but it's slightly lower than the profitability we have in Piyad, but it's a good profitability. Sironova reported an organic growth of minus 2%, but adjusted for the ambitransition that I discussed last quarter, the underlying growth was 3%. And adjusted for that, the profit was more or less flat.
You saw in the Q3, we had a big extra positive effect, and in this quarter, we have a negative effect. 3 had a strong development. The net subscriber base grew by more than 50,000 in the quarter. The underlying service revenue grew by 5% and the underlying profit growth was 8%, so strong performance in the quarter. Moving then to EQT.
The value change in constant currency in the quarter was 11%, and that consists of 24% stock price increase in equity AED on the stock market and 1% change in our funds. But here I should stress the 1% development is not the 4th quarter, it's the Q3. Because after the IPO of EKT, we will have to report the fund performance with 1 quarter lag. So the Q4, you will see when we report our Q1 results this year. And then you saw the extraordinary strong cash flow SEK 2,700,000,000 in the quarter that took the full year to SEK 5,000,000,000.
More than half of this SEK 2,700,000,000 is related to a very successful divestment in China. LBX is a company. And that is an older fund Greater China too, where we had a large part of that fund. So that is one of the key reasons. But the underlying cash flow, as you understand, was also very good.
To summarize, 2019, as you can see, was an extremely strong year also from a historical perspective. But we will continue to do whatever we can to let these graphs continue in the right direction. And with that, I hand over to you, Helena. Yes.
Thank you, Johan. I will start with the development of the net asset value. And you can see here on the graph that both our reported and adjusted net asset value grew, and we landed the quarter at SEK 4.85 billion. Looking at the listed companies, some 70% of the portfolio SEK 345,000,000,000. We can see that the contribution to net asset value was SEK 30,000,000,000 in the quarter.
And the TSR for the listed portfolio was 9% compared to 6 Rx, 10%. And the performance in the portfolio was mixed. Some of the companies had great TSRs like Afaf Copco and ABB, while other companies had a more challenging quarter like Wartsila and SEB. Looking at Patricia Industries, Johan already explained that the growth in the quarter was negative and this was not due to performance. You can see here at the left hand side of the graph that performance and cash flow was actually strong, while multiples contracted and we also had a negative effect of the krona strengthening versus the dollar and the euro.
And you might find it strange that the multiples are contracting in a quarter when the stock market is so strong. But just to remind you that when we estimated market values, we use the volume weighted average of the share prices of the peers for the full period to make the estimated market values more stable and less volatile. So this is the explanation for the multiple contraction, the main explanation. Looking at the full Patricia portfolio and the consecutive development in the quarter of the market values, you can see that the companies developed differently. Some of them actually grew their market value and some of them shrunk, while we also had very strong cash flow in terms of dividend.
And you can see that the Patricia cash position increased by SEK 6,500,000,000 in the quarter. Looking at the main drivers, of course, the market value of Mannlicue decreased by 7.3%, and this was mainly due to the multiple contraction that I talked about and the currency impact. But this was partly offset by cash flow and SEK 2,600,000,000 distributed in the quarter to Patricia Industries. Permobil market value also declined SEK 1,500,000,000 due to lower multiples, but was positively impacted by growth, the strong growth in the company. However, also here, the currency impact was negative.
LABORI decreased somewhat despite strong earnings growth and lower multiples and currency impacted negatively. Sorry, I was actually wrong here on Permobil. The earnings was impacting negatively. We will I will revert to that later. Well, 3 had a higher profit and also multiples contributed to the valuation of the company.
In the quarter, both Sarnova and Pia were market valued for the first time because 18 months has passed since they were acquired. We usually value them at the acquisition costs for a period of 18 months, but now we have market values of these 2 companies. And the combined effect is an increase of SEK 700,000,000. And looking at financial investments, the portfolio is now SEK 4,300,000,000, which is a significant decrease. And as you know, the realization of this portfolio is continuing.
We have, in the quarter, received SEK 1,600,000,000 in cash from both Enes Focus, which is our Chinese investment that is now finally fully exited, but also 2 exits of U. S. Companies, HireVue and Acquia. Looking at our financial position, you can see in the graph that our leverage is now well below the target range, which is the gray area in the graph, 5% to 10%. We're now at 2.8%.
Net debt is as low as SEK 12,000,000,000 and our gross cash position is almost SEK 25,000,000,000 at the end of the quarter. Johan talked a lot about the strong cash flow in 2019. This year is especially strong. But looking at the longer period since 2015, we can see that this portfolio has generated SEK 85,000,000,000. And you can also see from the left hand pie that all areas are contributing to this cash generation.
It has underpinned dividend policy. So we have this year then announced that we will grow the dividend by SEK 1 per share for the 10th consecutive year. And we have also been able to invest in 4 new subsidiaries. And there, of course, we will inject some SEK SEK 4,000,000,000 in Laboree as the transaction with clinical innovation closes in the middle of February. But we've also been able to strengthen our positions in selected listed companies, last year, mainly ABB and the year before that Ericsson, for example.
And all of this has been done while we have been able to deleverage and are now at the 2.8% that I just mentioned, which means that we enter 2020 with a very strong balance sheet, where with an opportunity to then invest in the situations that may arise during the year. So with that, I hand over to Vivica. And I click to our purpose.
Thank you, Johan, and thank you, Helena. Now it's time for some Q and As. And I want to start with any questions, if we have any here in the auditorium, followed by any possible questions from the call and then on the web. So, and if you raise a question, please also state your name and company.
Yes. Thank you. Derek Lalleboet here from ABG. I had a question because in a relatively short period of time you've made or Patricia has made 2 investments from EQT Funds or they've acquired companies from EQT Funds. So I was wondering if like anything has changed in how you collaborate with the EQT or if the company is being sold by the funds are more on your radar?
I was thinking about Puyab and now Clinical Innovation by Lavery. Thank you.
Thank you for the question. And there is no change in the way how we work. It just happens to be that we like the company clinical innovation and they happen to own it.
Joakim Gunal from DNB Markets. So a question for you, Johan. On Wartsila, how well do you believe they are prepared for the energy disruption? Is the performance as of lately market related? Or is it on their own hands?
And how do you see them improve operationally going forward?
Thank you for that question. Here, I have to say that I am in a silent period because they will actually release the results on January 30. So I have to be very brief. But if I should say a few words what the situation was up until the Q3. I would describe it as followed that on the one hand, the performance that we have seen with the weaker profit and also, of course, a weak share price is partly related to weak demand.
As you know, Wartsila is active in 2 segments, the Marine segment and the Energy segment. On the Marine side, normally the contracting of ships, the normal level might be around, let's say, 2,000 ships per year. I think it peaked roughly at 4,000 ships, and now we are rounding at about 1,000. So it is a weak demand situation, has been a weak demand situation on the shipping side. On the energy side that you say, we all know that we are in a transition.
We are moving to more solar and more wind. That will for sure take place in the coming decades. But that also means that sometimes the sun is not shining and sometimes the wind is not blowing. And we also know that there will be a lot of decommissioning of coal during period, which means that there will need to be a lot of balancing, for example. There is a big debate and discussions out there, how will this play out, what technologies will be used.
And that has also led to some customers being a little bit uncertain and postponed. So we have basically seen weak demand on the 2 main segments. So that is one explanation. The other explanation, unfortunately, is that there has also been some internal projects that have not performed in line with what we want. And that is unfortunate, but that is the fact.
So I would say weak demand and also some internal things that we need to adjust. The focus from the Board and the management right now is very clear. Make sure we have the right cost base for the demand situation, make sure we improve the situation, how we run, how we follow-up the projects and of course, develop the company and try to improve the situation. So that is the focus.
That's clear. And on PIAB perhaps for robotics or robotic gripping, Can you elaborate a bit further on what you see, I mean, on the ground or on the floor that's really driving the weakness, so to say? And what signs do you see of that momentum shifting in, say, 2020?
Yes. It's Rohit Gripping came into PIAB through 2 acquisitions before we acquired it, SASSA and FERBA. And then the plan was to integrate that in the distribution out to the customers. And we can conclude that, that transition, the way we're handling, has not been handed in a perfect way. Now Klas coming in as the new CEO and also, of course, with the support of Roni Liet and Astrach, they are working heavily with the management team to try to find the right way forward for that business.
So it's I think it's a product group that fits with the company. We also need to improve the performance.
Thank you. And just finally for me then. On the split of Electrolux as we approach that, for the RemainCo, can you please remind us just how exactly it fits your investment criteria, so to say, in terms of market positioning, EBIT stability, etcetera?
I mean, I think that if you start from it, if you look on a historical perspective, you can say, number 1, the margin is lower than we normally desire. But on the other hand, Electrolux also has a very strong cash flow generation over a period. Also, I think the company are continuously working to improving the positioning in the market, improving the mix, and that has been a very successful job in Europe and that we have also seen in the performance in Europe. Now the challenge that they need to tackle is the other side of the Atlantic is to fix the U. S.
Operations. And they are working on it. Unfortunately, there was some disruption in that transformation. As you know, they announced that previously when it comes to moving 2 plants into 1. But we believe, as the lead owner here, that the Board and the management are doing the right things, improving the production footprint in the U.
S. So we get the productivity and a better cost base for that, improving the price points, the development with innovation in the products. And they're also taking a big grip on sustainability, which is important for this business as for other businesses. So we believe that with the actions going on, even though for sure it's a tough market out there, we believe that they are doing the right thing.
Thank you.
Alexandra Berganoz, Kynuren Markets. Could you just give us a little bit of an update and maybe elaborate a little on the remaining companies in the financial investments portfolio as you've now done some exits in it and sort of what your plan is for the remaining companies in that portfolio as well? Thank you for that question. It's an area which we don't normally go into a lot of detail. But as you see, the strategy to reduce the size of the portfolio has been very successful in 2019.
We have sold off several holdings and especially the Chinese holding, which there were some administrative hurdles to get through and also to repatriate cash to the U. S. Has taken some time. We're now down to a portfolio where half is the 5 biggest, and then there is the tail end of companies that are maybe not as easy to sell. But there are also companies like ATLAS antibodies and AFI bodies where we believe there might be a future and we want to keep them.
And as you know, Doctor. Schisidera is also part of that portfolio that we're working on to develop further.
I think that's a good answer. And also maybe just to add that during 2019, we divested about SEK 3,700,000,000 in that portfolio. And now you saw the remaining part is SEK 4 +1000000000. And out of that, we actually have a couple of companies that we are working actively with, at the Santebode and Atebode and so forth. So you should, for sure, expect the strategic direction is still there.
The companies that we do not decide to be sort of have the potential to be a golden egg, and we will continue to work on it. But the size, of course, will be smaller going forward than it was in the last year. It's just mathematics.
Any more questions here from the auditorium? No? Then let's see if we have any questions from the participants on the call. Thank And at the moment, there are no audio questions. Thank you.
No questions. And let's hear from Magnus if we have any questions from the web participants. No questions. So by that, we say thank you and thank you for attending our presentation today.
Thank you. Thank you very much.