Good morning, welcome to this presentation of the fourth quarter and the full year for the NCC Group. My name is Tomas Carlsson. I'm the CEO, and with me here I have Susanne Lithander, that our CFO. After the presentation, we will open up for questions from the internet. With that, and with no further ado, the summary of the year and the quarter. It was a stable quarter for after a more mixed year. The way I think about it is this. We have good orders received for the year, strong order backlog towards the end of the year, but however, we have lower earnings. NCC Infrastructure, stable earnings improvement quarter-over-quarter for 16 consecutive quarters.
Building Sweden with a fundamentally strong core, an impact from the write-down in the number of residential projects in the third quarter and the consequences of that. Building Nordics, Denmark really strong. Finland impacted by restructuring costs by closing one department. A really challenging year for industry. EBIT earnings around 0, as communicated earlier, several actions taken and ongoing right now. Property Development finishing the year with strong earnings in the quarter. However, the market situation for Property Development really pending. That's the summary. Let me walk you through the details of or some parts of the details of the company. Overall, our sales SEK 54 billion.
Fewer employees than we were last year, as a consequence of actions taken, still sales on the same level. Sweden representing just short of 60% of the of our operations. Denmark growing a little bit. Orders received for the full year, little bit less than last year, and last year was a really good year, so good order backlog. Orders received in the quarter on a normal variation level, but on the lower side, and the impact we see here is from residential building, primarily in Sweden. However, on less, with less impact than you might have expected given the macroeconomic situation.
These orders received and the net sales means that we have a book-to-bill for the year of 1 and ending the year with almost SEK 55 million in order backlog. Net sales in Q4 on par with last year. There's one thing that I think is important to recognize, and that is the sales of in PD is almost or very low, almost none. That is because the largest piece of real estate that we sold were in the form of joint venture where we only recognize our part of the profit and no sales. That has an impact when you compare year of year after year. EBIT in the quarter 3.4% SEK 544 million.
For the reasons that I just laid out on Building Sweden and the restructuring costs in Finland, a little bit lower than last year. For the full year, SEK 1.358 billion, 2.5%. If we try to break this down into the components, in the quarter it looks like this. Infrastructure increasing again, 16th consecutive quarter. Building Sweden lower due to write-downs in the third quarter in a number of residential projects, but from a very high level. Building Nordics also from a high level quarter for 2021, impacted by write-downs in Finland, but also some other provisions in Finland and Norway. Property Development increasing compared to last year due to fundamentally facing issues over the quarter.
Industry a little bit better in the quarter but from a very low level. You have to understand the starting point here. Overall, SEK 544 million. Earnings for the full year, pretty much the same pattern. You see the impact on Building Sweden from the third quarter. You see the full impact on the industry, leading us to the slightly disappointing and lower earnings of SEK 1,358 million. Now, that's the history. Let's look at the future. What we see right now is a significant uncertainty going forward. Many different possible scenarios, and you cannot rule out any of these scenarios, but fundamentally, we are well-positioned to deal with any type of development going forward. You see both positive and negative development in the market.
Office and residential market significantly slower, and that should be expected given the interest rate situation and the cost of building. Property market difficult, both concerning the transaction market and letting, and we really don't know where that is going. We have a strong market when it comes to infrastructure, all sorts of infrastructure. Rails and railways and roads, of course, but also water treatment facilities, energy production facilities, energy transmission and that type of infrastructure. Then we also see a good market when it comes to public buildings and the green transition development in the industry. Mixed picture.
What we expect to see is that we will have, good and positive and negative development, but more variations, between segments and over geographies. As always, for NCC that means that we continue with diligent project selection. In this business, it's really important that you understand what, who your client are, what kind of project you're dealing with, what's the risk profile. Using our segment strengths, continue to use our segment strength, continue the execution discipline in the projects that we are building, and adapting resources when needed. We've done that in 2022, and we are prepared to do it going forward as well. With that, I hand over to Susanne.
Thank you. Okay. Since it's the end of the year, we want to share with you the split between our businesses. When it comes to the net sales part, we can note that Building Nordics has increased while Property Development has decreased or dropped a bit. On the earnings side, there has been a couple of swings, both Infrastructure and Property Development has increased their share of earning, while Industry and Building Sweden has dropped on the back of lower performance during the year. Our operating capital, Industry stands for SEK 4.4 billion, and Property Development now has capital employed of almost SEK 8 billion as they have several large projects in a late state with a high completion ratio. This is the contracting order backlog.
As you can see, NCC Building Sweden and NCC Building Nordics have strong backlogs, well above 12 months sales, while NCC Infrastructure is basically on par with the 12 months of sale in the backlog. However, NCC Infrastructure have several large projects in phase one or in early phases with customers. Starting with NCC Infrastructure, they had a very stable quarter, and as Tomas said, the 16th quarter in a row with improved performance. Their net sales grew a bit. Their orders, booking grew slightly in the quarter, SEK 200 million. But, for the full year, the order booking is down almost SEK 3 billion. The difference between the years is that last year or 2021, we had a much more of large orders, so very few really large orders in 2022 for NCC Infrastructure.
The net sales is up 6% both in the quarter and for the year on the back of the strong backlog they had. Also we have a very high volume in some of our mega projects. The earnings increased to SEK 124 million, and the margin was 2.4% in the quarter. It's, for the year, their earnings is SEK 429 million and a margin of 2.5%. The improvements are driven both by volume and an improved project portfolio. Sweden continues to be the largest market, but Denmark is growing a bit. To the right, we can also note that energy and water treatment continues to grow as a share of orders received, and we are continue to have a leading position on the market within this segment.
Building Sweden had an order intake of SEK 3.8 billion in the quarter, slightly below the previous year's fourth quarter. The order backlog is SEK 18.6 billion, quite strong. The net sales increased a bit to SEK 4.3 billion in the fourth quarter, for the year, up to SEK 14.2 billion. Operating profit in the quarter was SEK 98 million in the quarter. For the year, it was SEK 252 million. The margin in the quarter was 2.3%, for the year, 1.8%. The margin is negatively impacted by cost increases both in the quarter and for the year. The big write-down in Q3 that we've talked about also has pressured the margin.
A good thing with Building Sweden is that they have had very strong orders received for public buildings, which now stands for 31% of orders received for the year, covering up for the drop in residential. Building Nordics had orders received of SEK 2.5 billion in the quarter, which is lower than the past two years. On the full year, they had SEK 12.3 billion, which is also slightly below previous year, but still on a very good level. If we look at the countries, Denmark is going very strong and continues to grow, while Denmark and Norway had lower orders received during the year. Net sales grew 16% in the quarter and 14% for the year if we exclude currency effects. Here all countries grew their sales, based on a good backlog from before.
Earnings in the quarter dropped to SEK 95 million, mainly driven by increased cost. Also the, as Tomas already mentioned, the restructuring cost for Finland. For the year, the operating profit was SEK 347 with a margin of 2.6%. Negatively impacted by the material cost, of course. In the NCC Building Nordics, Denmark continues to grow their share, and this now stands for 47% of sales. Also here, we have a strong hold in residential buildings, 36%, and 32% also in residential, which we took in the first quarters. Moving on to industry and showing the volumes, we can see now that we had, both in the quarter and for the year, lower volumes for both stone material and asphalt.
In these numbers, we have excluded Asphalt Finland for 2021 for relevant comparison. Orders received and net sales has grown both in the quarter and for the year for both divisions, and that's driven, of course, by increased customer pricing. Earnings in the quarter dropped to SEK 23 million and to SEK 8 million for the year. Stone material continues to deliver a stable earning, and the low performance is driven by the asphalt operations, and it's primarily within Denmark and Norway that we have poor results. Industry also have a huge negative impact from the fact that they've had to put money into their pension foundation. Approximately SEK 100 million is the effect. Operating capital is SEK 4.4 billion with basically no return. And when it comes to sales, Asphalt is 27% of sales and stone... No, the opposite.
Asphalt is 73% of sales, stone material is 27%. Sweden continues to be the largest market with 56%. This slide shows the volatility in earnings in property development, and in the fourth quarter, we had sales, or we recognized profits from one project, Kineum, compared to two in the fourth quarter of 2021. We had no project started in the Q4, and we had 11 ongoing projects in our portfolio when we ended the year 2022, same as when we ended 2021. 80% of our portfolio is in Sweden. It corresponds to 218,000 square meters. The letting in the quarter and for the first half of the year was really low and slow. In the fourth quarter, we only had five contracts signed, corresponding to 1,700 square meters.
For the full year, we have 32 contracts signed corresponding to 32,000 square meters. On the you can see the green and the yellow bar there shows the completion ratio and the letting ratio, and the letting ratio is now below at 58%, and the completion ratio is at 68%. Net sales in the quarter was only SEK 77 million, that came from additional sales in previously sold projects. As Tomas said, we had no sales revenue from Kineum as that was developed in a joint venture. Last year, we had 2 projects sold in the fourth quarter. This quarter, we only had the additional sales, as I just mentioned. Last year, we had 7 Projects for the full year, only 3 projects for 2022.
Earnings in the quarter was SEK 268 million, which come from Kineum, but also from additional profits from previously sold projects and reversals of rental guarantees and development re-provisions for rent development risks. Capital employed, SEK 8 billion and a return of 6.7%. On the bottom, we have show the timing, the expected timing for the sold projects that we have. For 2023, we have Kontorsverket coming in in the first quarter, and we also in the first quarter have building rights from Femöringen in Solna coming in to have impact. Adding it up for the group income statement, the business segments have contributed with SEK 609 million in the quarter and SEK 1.5 billion for the year.
First, we deduct the cost for headquarters and the subsidiaries and associated companies that don't belong to BA. Normally, that have a negative impact, the same goes for this year. The big difference between the years is due to the fact that last year we had huge refunds from pension and insurance, sickness and pension insurances. Next line, internal gain, is where we eliminate the profits in the PD profits during the construction phase, and we reverse them when we take our profit, recognize our PD projects. The last year, we, as I said, we had 7 projects, while this year only 4, that explains the difference between the years.
In other group adjustments, we have various accounting matters, and the big effect between the years here is due to the fact that we reverse the cost for the cost that industry has to take for paying to the pension foundation. We have, according to IFRS, to reverse that, and we do that on other group adjustments. Financial items, on the same level as previous year, even though we've had increased interest rates and an increased net debt, and that's explained by the fact that we have capitalized more interest to our property projects. Tax rate is 18%, and that gives us a net profit for the quarter of SEK 407 million and for the year of SEK 1,069 million, and an earnings per share of SEK 10.9 for the year.
Our cash flow for the quarter is slightly over SEK 1 billion, which is good if you look back. Of course, we get lower contribution from our operating activities due to our poorer results or lower results. Property projects also contributes negatively as we have sold off fewer projects. The positive effect we get from other working capital, where we have increased our accounts payable significantly in the fourth quarter. In investing activities, we have a lot of movements in the quarter or in the quarter last year, we received our payments for Asphalt Finland, which skews the number in 2021. In 2022, we have received cash from NoDig, the NoDig business we sold and also the rebar factory that we've sold, but also the land sale we did in 2021.
For the good quarter, for the year, a negative SEK 136 million. Our corporate net debt is SEK 1.56 billion, compared to last year when we had net cash of almost SEK 800 million. That's driven, of course, by the lower cash flow before financing. We have a target to be below net debt to EBITDA to be below 2.5 times, it was 0.8, well below target. With that, hand over to you again, Tomas.
Thank you, Susanne. Let me wrap up with a couple of other items before we open up to questions. First of all, health and safety. We had not that encouraging trend in health and safety this quarter. It's few accidents in a limited number of departments, but this shows that we will have to work even harder and continue with this with the health and safety work going forward. Targets, financial targets. Let me start with the dividend policy that says roughly 60% the profit of the tax. The board proposes to the AGM SEK 6, that is the same as last year, and that is 55% of the profit of the tax. Unchanged dividend as proposed by the board.
Net debt, as Susanne said, well below the target of 2.5 of EBITDA. Lots of headroom there. Then we have the target of SEK 16.00 EPS for this year. We came from 14 last year to 10.3 this year or 2022. The target remains, let's be clear, it is tougher to reach than we originally anticipated. It's depending on some kind of opening in the real estate market, and it's depending on that we get traction on the improvement projects for industry, but the target remains. We executed a repurchase program for during 2022. The program concluded in November when we reached the 10% threshold of the number of shares that we are allowed to own.
NCC has repurchased share for approximately SEK 1 billion and currently owns a little bit more than 10 million Series B shares. Some practical information. The Annual General Meeting will be held on March 31 at Space Conference Center in Stockholm. That's in the exact center of Stockholm. More information will be published later, no later than 4 weeks ahead of the AGM, that is beginning of March. The Annual Report will be published at the latest on March 10. Before we end this, let me summarize this. We are fundamentally strong in a good position for a market which is really a mixed picture with strong parts and more challenging parts. We have a stable financial position, overall good position, but there's a substantial uncertainty about the current economic climate.
you know, our market as well as macroeconomic impact and residentials and commercial properties most exposed on the negative side. That is to be expected. With that, operator, we open up for questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star followed by two. Participants are requested to use only handsets while asking a question. One moment for the first question, please. We have the first question from Markus Henriksson from ABG. Your question, please.
Thank you very much. Good morning, Tomas and Susanne. Three questions from me. First off, could you elaborate a bit on how you think about 2023 for industry, given that you remit the tender period in the asphalt business?
Well, that's a question that I really can't answer for the reason that I don't want to answer it and also for the reason that I can't answer it, because we just started the tendering period, and it's way too early to say anything about that. In general, we have taken lots of action in the asphalt business, and have a clear target of improving the business in 2023.
Thank you for that. You mentioned restructuring costs in Finland in Building Nordics. Could you highlight the amount here taken in the quarter? Actions taken, you mentioned closed one department, but a bit more detail there would be helpful. Timeframe, frame before you think you could see some results from this restructuring.
First of all, we are replacing the manager for division Building Finland. That's the first step. We have the business area now acting as interim manager of Building Finland. There's a recruitment process ongoing. If you think you're a candidate, please raise your hand at some point. We have large variations of the earnings within the Finnish business. This department that we decided to close is in central Finland. It has a long history around the performance. We see that the market for foreseeable future will be relatively weak in that area. We expect to see an impact from that, you know, all during this year.
Thank you. The amount taken in the quarter?
Well, we really don't wanna give the exact amount. We have several. I mean, it's not big enough for that, but it's also a part of, as Tomas explained, a lot of other things not going in the right direction within that department. We have lots of other costs as well in that specific that are not restructuring cost by as we say.
Okay, fair enough. The way to see it, probably no more restructuring costs, but as Tomas mentioned, it's gonna be affecting the coming quarters as well, looking at...
We think that we've taken all the restructuring costs for that now.
Thank you. Last question. You highlighted the office market is significantly slower. Could you elaborate a bit here in terms of, investor appetite, leasing activity, and in terms of potential order intake in building?
Well, Yeah, raising interest rates going up has an impact on financing costs for new projects. This has an impact of yield requirements for the clients. That's one side of the equation. Then on top of that, you have increasing building costs in general. You have more expensive development, and then you have higher yield requirements from the investors. On top of that, you have what we think is some kind of development in the tenant market or how you think about an office. We've learned throughout the Corona how to use the office in another way, and we think that they will be more developed into, you know, meeting spaces and places where you develop thoughts and ideas together with your colleagues.
On top of that, you have a general uncertainty in the market. Right now, you know, low letting, low activity on the transaction market dependent on several factors. We have to act accordingly. You know, being more careful and making sure that we develop what we have, lease what we have and being cautious, starting new projects.
Thank you for that. Those were my questions.
Thank you.
The next question is from Erik Granström from Carnegie. Your question, please.
Thank you. Good morning. I had two questions, starting with . You mentioned that you're in a situation where volumes are fairly high. We can clearly see that in the numbers as well. You also state that profitability is still affected by early stages large projects. All things equal, how do you view this going into 2023? Should we expect EBIT to start to increase now as these projects are more mature? Is this a situation still where you're too early in some of these projects for us to expect much more than this?
Well, we have reached the end of some of these large projects, just recently, but there are a couple still remaining, and they will be with us for. They are large, and they will be with us for, you know, many years to come. We expect the infrastructure business to continue to develop and to be, you know, gradually better and better going forward. We still have some large projects that we have zero profit recognition on.
Okay, thank you. My final question is regarding your net debt situation and also the share buyback program. You now obviously have a little more net debt than you had a year ago. How do you view your financial position in your ability to, for example, continue a share buyback program if that was to be asked during the AGM?
That's an AGM question. We will publish the material for the AGM in a couple of weeks. Fundamentally, we have a strong position. We want to retain, you know, capability both for risks that you can see in the future, but also opportunities that you can see in the coming year or years going forward. That's the ongoing discussion. We will get back to that for the AGM.
Okay. Then perhaps quickly a follow-up on that. You mentioned that you're sticking to your target, but you also said that it is gonna be dependent upon the property market in specific, but also your ability to turn industry around. You did not mention whether or not it depends on, for example, a share buyback program. Does that mean that you think that it's reachable with these two areas in mind, even without buying back more shares? Or is that also something that you expect in order to still have a possibility to reach the target?
Not really. For me, those are unconnected.
Okay, that's perfectly clear. Thank you very much.
Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star followed by one. There seems to be no further questions from the phone, and I hand back to Tomas and Susanne.
Okay. We have some questions from the web. We have a question from Simen Mortensen at DNB. How do you look on the surplus values in property development, the yield on cost and any potential risks for write-downs?
That's pending on how the property development develops. We have a couple of good projects. We can keep them for as long as it takes to get a decent price for the buildings.
I think a follow-up to that, what would we, it says in the report that there are high standard requirements for starting new projects. What criteria are they? I think you've mentioned that, but...
Even more focus on the not that big projects, higher, pre-letting and a clear path to exit.
Finally, the impairment in Building Sweden, how will they impact margins in Q4? How much of that is impairment or just higher cost?
They sort of connected because it was higher cost that made us make do the write-downs in the third quarter. That means that we have a lower margin in the order backlog for a couple of projects. That has an impact while we continue with the projects. I expect that we will be, you know, towards the end of Q2 or Q3, that will be out of the system.
Okay. No further questions from the web.
Very good. Thank you. Mixed picture with strong parts and more challenging parts for the NCC Group. Overall good position for NCC, stable financial position, but also a couple of darker clouds on the sky for at this time. Overall, a stable quarter at the back of a more mixed year. Thank you all, and see you today or at the time, we don't know yet. Thank you very much and have a good Tuesday. Bye.