Good day. Thank you for standing by, and welcome to MEKO AB Q4 Report 2022. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question, you will need to press star one one on your telephone. If you'd like to withdraw your question, please press star one one again. I would now like to end the conference over to CEO, Pehr Oscarson. Please go ahead.
Thank you. Good morning, and welcome to the presentation of the Q4 and year-end report for 2022. I'll now guide you through the results. Our CFO, Ola, is not joining us today, but will of course be back on next occasion. We continue to deliver organic growth in the quarter and have had a strong development in most markets. However, there has been some challenging market conditions in Denmark. We are taking actions to mitigate the effects in Denmark, as well as intensifying our effort in all markets to increase our profitability.
I will get back to our actions within respective markets shortly, but one example is Norway, where we have optimized the organization further, including the branch network. With this will create better efficiency, cost control for the future business. We have once again proven our resilient business model. Our strong cash flow and financial position creates value for our stakeholders, meaning that we are able to invest in the core business, new business, and future growth. I'm also happy to announce that the board of directors propose a dividend of SEK 3.3 per share for 2022.
Looking at page three, as stated, I'm very satisfied with our continued solid growth. Our strong cash flow continues to improve, and the adjusted EBIT and earnings per share in Q4 are in line with the same quarter last year. Looking closer to the EBIT bridge for the quarter on page four. We deliver in line with very strong Q4 last year, despite the weaker market in Denmark and items affecting comparability.
The RIS mainly refers to one of efficiency measures in Norway that will bring positive effect on the result later this year, and is in line with our strategy to optimize the supply chain and obtain synergies through the country organization. Regarding Denmark, we experience a lower demand in the quarter related to macroeconomic situation. We initiated actions in order to secure our market shares, which I will be back in a short while. Our business in Finland is developing according to plan and the acquired Koivunen and Mekonomen Poland .
Also significant development in Poland and the Pol-Baltics, both due to the acquisition of the Baltic part of Koivunen and a very strong development in Poland. Let's move on to page five. We have managed to hold on to a high gross margin for the full year, around 45%. As we can see, price adjustments have overall compensated for product and customer mix. In Koivunen, we had a slightly lower margin. Going forward, we will see improvements in that due to the purchase synergies. We move over to slide seven and the business areas.
As stated, we experienced temporary challenges from a weaker demand in Denmark, especially in this quarter. In order to secure our market shares, we have met the tough competition in the market with sales activities successfully, but momentarily, we're lowering our margins. FTZ is by far the market leader in Denmark, as well as the most profitable player in the market.
We know that the demand is stable over time. We foresee improvements in the quarters to come. Car is still king when it comes to demand for mobility. Over to business area Finland on page eight, including Mekonomen Finland and the newly acquired company Koivunen. We saw a really good performance in Finland. The intense work with bringing out synergies is continuing according to plan, with gradually ongoing effects and with full effect as from 2024. One of the larger upside lies in Mekonomen Finland using the backbones of Koivunen.
This includes merging Mekonomen central warehouse into Koivunen's, which will result in efficiency gain in the supply chain, and of course, also a much better availability. Over to page nine. I'm satisfied that our strongest growth markets, Poland and the Baltics, are performing well. In Poland, we have an outstanding development.
In the Baltics, we are performing according to plan, still with upsides from the purchase synergies, as well as closer collaboration with the group. We move over to page 10 and Sweden, Norway. We delivered decent result in Sweden and Norway and with stable growth. The somewhat lower margins, however, are temporary, and this is something we focus on to improve. As I stated earlier, we have optimized the branch network and central functions in Norway. This is in order to improve availability, create efficiency, and lower our costs.
This is in line with our strategy, where we always try to optimize availability by merging, adding, and closing branches in line with the market demand. On slide 11, business area service and maintenance. We experienced a weaker retail market in Norway during in the quarter, although we see signs of market recovery in the quarter compared with development throughout the year. We know that the demand will recover over time. Still, in order to reduce the vulnerability towards retail, we continue to take action to address and develop the offer for the business-to-business customer area.
Then on page 13 and looking at our footprint, the number of branches is stable over time. We have grown overall in number of affiliated workshops. Here we are especially successful to attract customers in Poland, which we can see in their growth results. As stated before, the size of the workshops and the number of mechanics are most important for both the workshop profitability as well as ours. Over to page 14.
We recently closed the acquisition of the leading car accessories company Avant. We hereby strengthen our position further by adding new products and new customer segments in Denmark. Going forward, we have a potential to extract synergies with the purchasing area of accessories in the Nordics. This is a growing segment in the group with a large potential. From our view , to that it's the demand is very stable, regardless of which type of vehicles driving on the roads in the future. For example, electrical vehicles will still demand car care assortment and so on.
Moving on to page 15. I'm proud that we continue to be one of the most equal companies in Sweden. The gender distribution in group management team has been equal since 2018, and we have dedicated focus on increased diversity in the group. The gender perspective is one important part. It's also important for us to have teams that contribute with different strengths and perspectives. Moving to page 16. I'm happy to announce our upcoming capital market today, and during that event, we will go deeper into our strategy, markets and initiatives going forward.
Please save the date, March 21st in Stockholm, and we will send out more information on the event through a press release. To summarize, we look back at the second best full year ever regarding our earnings and the best year ever when it comes to sales. The past quarter, we had a strong growth, strong cash flow, and we were able to defend our market shares despite challenging times.
Also, we are in the forefront when it comes to new technology, where we have a leading competence within electric cars and digitalization of the business. I'm very happy that the board proposed an increased dividend of 3.3 SEK for the year compared to 3 SEK last year. With that, we'll open up for questions. With my side, I have Camilla Axelsson, Head of Group Business Controlling, who will assist me if there might be any financial details that might come up. Please, welcome with your questions.
Ladies and gentlemen, we now begin the question and answer session. If you wish to ask a question, please press star one and one on your telephone. Star one one if you wish to ask a question. We are now taking the first question. The first question from Andreas Lundberg from SEB. Please go ahead. Your line is open.
Yeah, good morning. Thank you. It seemed that input costs and energy costs were on the high side and put some pressure on your margins. Is it fair to say that your own price hikes are lagging, or are you not taking enough to fully compensate? How are you thinking about own pricing in 2023? Thank you.
Yeah, pricing is There is a big difference in the different markets. There's not one simple answer to that. Where it's possible we of course, increase the prices. Sometimes there is a delay because we need to announce it to certain customer groups and so on. We also need to be careful, so we all the time has a good offer to the customers, and of course we have the competition. That's one side, but the other side of compensating for the inflation is of course to create better efficiency, which, the activities in Norway is an example where we, close down and merge, branches just to reduce costs in that way.
What do you say is the outlook to improve margins in 2023?
We don't guide, forward like that, but, I mean, I don't see any big deviation from this level, both up and down. As I said, there is a lot of things to do with the gross margin, but also on the cost side. We'll see.
On cash flows, you talked about the strong cash flow. Agree with that. Firstly, what was the ordinary CapEx for 2022 and how do you see that in 2023? Can I also comment on the current inventory levels? Thank you.
To start with the inventory levels are still a little bit high due to that we increased the inventories during last year to be more prepared for the disturbances in the supply chain. It starts to be more and more normal. When it comes to CapEx, I will lean over to my colleagues here. Repeat the question on CapEx.
ordinary CapEx for 2022 and then your plans for 2023.
We don't see any big deviations going further, but we'll see what 2022 it was.
Per, perhaps you can ask another question about Denmark and.
Yeah.
particularly challenging here versus the other markets. What's the issue in Denmark? Can you be more complete?
It's a lower demand. We see that when we look at sales of diesel and petrol, which has decreased compared to years before. There is a lower customer confidence in general in Denmark and the when we talk to other industries in Denmark, it seems to be that's had a big question in a more dramatic way. It's more careful among the consumers and among the companies. It starts already in the end of last year, we see some recovery and we still believe that this will at some point bounce back, it's more of a temporary.
There is a tough competition and, so we have, also that has affected the growth market a little bit where we needed to fight, back to keep our market success. Yeah.
Yeah. When it comes to investments, it's we have a new report, we have investments SEK 208 million for, yeah, 2022, and it's slightly more than 2021. I don't think that we want to reveal exactly what we will have in 2022 but 2023, but it's normal investments as we see more than how it was before.
Did you say SEK 200 million? I couldn't hear you.
SEK 208 million.
Oh, okay. Got it. Thank you very much. That concludes my question.
Good.
Thank you for your question. We'll now take the next question. The next question from Mats Liss from Kepler Cheuvreux. Please go ahead. Your line is open.
Yeah. Hi, thank you. Well, a couple of questions. Looking at Norway, and you implement these measures to make it more efficient, could you say something about the payback expected going forward and when it will sort of be fully?
We have, we don't disclose what the actual savings are, and this is also in order to improve availability. The positive effect will be all be in 2023. We took some one-offs regarding rental contracts already in the Q4.
Okay. In Finland then you mentioned the integration process is going on and that you will sort of, well, integrate the warehouses, et cetera. How far out is this process to be finished?
We. The very simple answer is that all the synergies should be fully realized by 2024, and then there is an ongoing effect. It depends a little bit on. I mean, now we are in the middle of the moving process, so we need to create space in one warehouse to move over. It's very difficult to say exactly when it will come, but as from 2024, we will have the full effect, and gradually during this year.
Previously you also indicated that you saw opportunities to adjust the real estate holdings there. Are there any more to comment on that?
No, that's still the same situation. We are monitoring the possibility of to sell some or all of the properties at one time when the market is good for that.
Looking further down the PNL there was some tax loss carryforward coming up in the Finnish operation, in Koivunen. And if it was that, are there more to come there or is it sort of a one-off in the Q4?
It's what we have assessed now, and it's more or less a one-off, and it comes from Mekonomen Finland and not Koivunen.
MEKO Finland. Yeah. Okay.
We'll see.
Yeah. Yeah.
Yeah.
Mm-hmm. Mm. Okay, great. Finally about the Poland, Baltic, Baltics there, they perform quite strongly and, do you expect that trend to continue? I guess it's, well, pretty good development.
We can see the same development in the Baltics as in Poland. I mean, it's a tough market as well as in Poland, the competition in the Baltics is much tougher than we see in the Nordics. It's also an increasing market and a lot of possibilities. I have good hopes that Baltics will follow the same trend as Poland has done the last couple of years. Still, it's very small countries and it's a small market. For when you take it in account for the full group, it might not have that big impact.
Okay. Thank you.
Thank you.
Thank you for the question. As a reminder, if you wish to ask a question, please press star one and one on your telephone. We don't have any further question at the moment. I will hand the conference over to the CEO for closing remarks.
Yep. Thank you very much for listening and have a great day. Bye.
That's conclude the conference for today. Thank you for participating. You may all disconnect.