We should start. I have to say this is our first earnings, so it's the Q1 report we have in an earnings, so forgive us for that that we're not used to the format. Of course, we will present the numbers and the quarters in a good way. Just quickly, Netel, the background, we are a former PE unit. We started 2000. We did the MBO 2010. Since 2010, we have had a growth rate of 20% per year. We keep that growth rate also 2021. We have grown profit to the same extent. We're happy about that. We are a project management organization. We have very little own resources, but we take on projects within mobile, within fixed, within power.
I will talk more about the segment later. We say we have an asset-light model, which means that we don't have much machinery ourselves because we buy the services, which means that we have a good cash conversion. We're also very flexible in volume and in geography. We can move, and we can go up and down in capacity. Throughout the year and the last few years, we have positioned ourselves in good geographies and in good segments. Our backlog has been growing, which happened also 2021 and in the quarters. We are at SEK 3.5 billion, which is a strong backlog for us. Normal backlog a few years ago would more be 1.5, 1.7 billion. It's almost twice as high as normal, which is good for the future.
We have throughout the year, also in the quarter, we signed a deal, done some M&A. We have done the last 12 months 7 to take positions in segments and geographies we like, that we know. They are segment-specific acquisitions. Our three main segments then is first of all, mobile. We build mobile base stations. Here the trend has been strong. 2021, especially in Q4, when it comes to market pickup. We are in the beginning and in the ramp-up phase of 5G. The trend is good. The orders are coming, and we have a very positive outlook for the mobile segment for 2022, given the 5-year rollout. We have our fixed segment, which used to be historically mostly fiber. Now we also have quite a lot of cable TV because these networks are to be upgraded.
We have added through the year. In the beginning of 2021, we had water and sewage and central heating as an adjacent segment. We have done two acquisitions now, within the segment in Sweden. We have now made it the core segment. We have somewhere between 400 and 500 million SEK pro forma turnover. We will continue to do acquisition. We will continue to grow organically. We will move to Norway, where we will add the segment as well, and hopefully in Germany. We have great hope for what we call Infrastructure Services, which is water and sewage, central heating, and related civil engineering work. Fixed is also in a good trend given what we have done. We have also added Germany the last couple of years.
We build fiber, and during 2021, we tripled the turnover. We had good margins. It's actually the highest margin in the group for a country. That was the same in Q4, but Germany contributed a lot to our profit. We have power as well, and power is also a very promising segment. We have old networks that should transmit more power the coming years through electrification. We started 4 years ago. It's now one-third of our turnover. We have done organic initiatives, and through 2021, we acquired 3 companies in Sweden. We recently acquired a smaller company to get to the higher voltages up to 400 kilovolts. We cover cables, we cover lines, we cover stations. Here we also had a good contribution then to growth and to margins in Q4.
All in all, the part actually, I should say that already now, in Q4, we started 2027 by having half of our revenue from fiber in Sweden. Fiber is saturated in Sweden, and we started to diversify. The strategy works because we have high growth rates. However, fiber in Sweden, of course, it's contracting and on the decline. We dropped SEK 50 million in fiber. Despite that, we had growth overall. Without accounting for the fiber, we had 7% organic growth; including fiber, we had -2%. That's all accounted for, and we understand that. We have a strategy to take care of it, but it works very well.
Moving on a little bit, we comment on Q4 that our continuing widening and broadening of the business is ongoing, and it worked very well in Q4, as we can see on growth rates. We had a turnover of SEK 717. We did SEK 575 last year, and much of it is from acquisitions. We had then -2% organic growth. As I tried to explain, we know that fiber is going down in Sweden. We are widening the business in segments and in geographies. Into service, we have, without counting the negative growth in fiber, we have 7% organic growth in the rest of the business then.
All in all, we did +25%, thanks to the strategy we have in the quarter. We have adjusted EBITA margin then of 9.2%, which is a good margin. We're very pleased with the margin in the quarter. We are down a little bit compared to last year, and that's a few different reasons. One is that last year was extremely good. We were happy about that as well. We ended a few very exceptionally good projects. We also this year during 2021 we won two big framework agreements, service agreements, one with Telia in Norway and one with Telenor in Norway. These are average margin projects, but they are in a start-up phase where you have some costs.
Without those startup costs, we would more or less be back on last year's margin in the quarter. These are big projects. They're SEK 700 million a year, and they're 7 years. In the total volume, they're above SEK 1 billion, and we spend maybe SEK 10 million in startup costs in the quarter and then in the costs. We think that's good. We're happy with the margins. When it comes to full year, we think the trends are strong. The market has been strong despite COVID on them. Of course, COVID is influencing the market and the customers in a negative way. Overall, the trends are strong, so we still have a positive market. We expect a positive market next year.
We have been building backlog also 2021, especially in Norway, through the big and long frame agreements, service agreements. We have also won quite some business in Germany. We are building fiber for Deutsche Telekom and E.ON, and we have won towards the end of the year quite a lot of business with Deutsche Telekom, especially around Hamburg, where we now are establishing ourselves. We were previously in the Berlin area as well. Organic growth full year is 7%. Here we still have effects from the declining fiber business, which we know about. Not calculating fiber we have for the rest of the business, we have an organic growth of 16%. We have an adjusted EBITDA of SEK 177 million, which is an increase of 32%. We're very pleased for a year.
We have, when it comes to debt, we have 1.4 net debt adjusted EBITDA. We had 2.1 last year, so we generate quite a lot of cash first quarter, and our debt is quite low at the year-end. Important events during Q4, of course, we were listed. We signed the frame agreements with Deutsche Telekom and E.ON, the total amount of SEK 420 million, which means that we are rapidly building our backlog in Germany. We foresee continued growth in Germany in 2022. We also announced the acquisition of JR Markteknik and Täby Maskin & Uthyrning. That's the part of our initiative within infrastructure services. Previously, during the year, we bought Brogrund in Örebro, who's doing similar things, water and sewage, central heating, and related civil engineering work.
Now in this, it's part of a fixed network. In this sub-segment of fixed network, we have a turnover of roughly 450 million SEK pro forma. It's getting substantial. It was adjacent a year ago, and now it's a core segment in Sweden. We hope to, we aim to expand it into Norway during 2022. Important event after the quarter, we signed further projects with E.ON regarding transformer stations in Sweden. There are quite a lot of tenders. The Swedish network is old. We need to distribute more power, and therefore, we need to upgrade and build more power stations. SEKE, our acquired company, they were signing agreements with E.ON during January. We closed JR, and we also announced another acquisition.
We acquired or we signed to acquire Eltek, which is a smaller power company, but they are working on high voltage up to 400 kilovolts. Today, we are working up to 130 kilovolts. We are expanding our scope, and we get more capabilities into to build upon. A little bit on the different segments and cross-countries or segments. In Sweden, we had a big growth year-over-year. We went from SEK 606 million to SEK 954 million. We increased profit from SEK 15 million to SEK 60 million. We increased margins from 2.5% to 6.2%. This is despite the decline of fiber, and we lost or we dropped. We know about this, and this is part of the plan, and this is why we have the strategy we have.
We lost roughly SEK 150 million of fiber. Adding that, the growth is of course very, very high. Most of this from acquisition, but we also have good trends within 5G. We have good trends within service on fixed networks. We have very good trends on the power side. We have a positive outlook in all of these segments. We are quite sure that the 5G volumes will go up because we have a better backlog now going into next year. We're quite sure that there will be high demand and many bids and tenders for power lines and power stations in 2022. We have a very strong backlog going into 2022. Sweden, we have transformed it. 2017, we were totally dependent on fiber rollout.
Today, we're not, and we are growing, and we are now bigger than we were at 2018 in Sweden, despite the drop of roughly SEK 500 million on the fiber side. Norway, very well performing, extremely good. We had growth for many years now in Norway. This year, everything is within the segment we operate. We had demand increase throughout the year, also in Q4. We see increased demand in mobile, of course, due to 5G. There is increasing demands in fixed as well. For us, especially since we this year won the two big service agreements, the frame agreements with Telia and Telenor. 2021, they are not on a full year basis. They will be on a full year basis 2022. Of course we expect growth, and these are big contracts.
We signed some good deals on the power side. We are filling the backlog. We are still looking to fill it more, but we have good hopes for power for next year. To the segment, the outlook for Norway is positive for 2022. Here we are the growth we had was from SEK 8.85 to SEK 10.45. We increased EBITA from high SEK 82 to high SEK 98. We kept our margins high at 9.2%, which is a very good margin. Finland, our smallest segment. We have a very strong position in Sweden and Norway. We are building a strong position in Germany. We are smaller as a company in Finland. The big part in Finland is power. We kept our volume. We have good frame agreements. We have good backlog in power for 2022.
We have decent backlog for 2023, and we will build it throughout the year. We had a weak year on fixed on fiber because there were very little fiber tenders last year in Finland. Hopefully, according to announcements from network owners, there will be more fiber projects this year. We will hopefully take part of it. On the mobile side, we are quite stable. We have contracts, we have volumes, and we will build roughly the same volumes next year. We have an ambition M&A agenda in Norway and Sweden and in Germany. We are a little bit less prioritized in Finland. Then we have Germany as the last segment. We've been in Germany since 2018. This year we tripled revenue to SEK 145 million. We will continue to grow next year. We have a very fine backlog.
We are building organization. We have suppliers. We will add volume this year as well. Germany is different from the Nordics. It's not penetrated at all when it comes to fiber, so there's big demands from the customers. The limiting factor for us is actually our own capacity here. It's not the customer, and it's not suppliers. During Q4, we won big deals, big projects, big frame agreements with Deutsche Telekom and E.ON a little bit. That meant also that we established ourselves. We are now in Berlin, so we established ourselves in Q4 in Hamburg. We will build organization now because these frame agreements are over many years. We can actually build organization in Hamburg. We had a growth from SEK 55 million to SEK 145 million. We will continue to grow.
We grow our EBITA from 6 to 18, and that means that we went from 10% to 12.5% EBITA, which is the highest in the group. The project we run, we have been running similar projects now for a long time for those customers. We start to be confident about what we have in the backlog. M&A, we shifted strategy 2017 or shifted. We started to widen our scope into more segments, and we looked at more geographies. 2020 roughly, Peter here, our CFO, arrived, and then we also stepped up on the M&A. Our M&A strategy is that we should take position in segments that we like and know, and we should take position in geography we want to go to. It's quite specific areas where we do investments into or M&A into.
The focus we have now is on fixed side. For Sweden, it's infrastructure services, and we have done quite a lot this year or last year. We've done one this year, actually, ER. We continue to look, and we have a promising pipeline. In this sector, there is a lot of work in the sector, so the companies are doing well. We have the same focus in Norway. We are looking for water and sewage, central heating, and related civil engineering work. We have a good pipeline. We hope we can go ahead soon. We are looking, and we're building the list of opportunities in Finland, but Finland doesn't have priority compared to Sweden and Norway. We are doing the same initiative in Germany. In Germany, we are building a pipeline of infrastructure services companies because we want another leg in Germany for the future.
We're also looking at power companies in Germany. Sometimes companies have these segments in combinations. When it comes to power, we've done lots in Sweden the last two years, the last year. We have very good companies. We have very good positions. We did Eltek this year. We might do a little bit more, but we've done a lot already, and we have good positions. Norway, we did Nett-Tjenester, and that built our position in Norway. It's a very strong company. Now we are looking to expand power in Norway also through acquisition. We hope we can get the culture there. Power in Finland, we also have opportunities, but it has not as high priority. In Germany, power is also interesting, and it's part of our opportunity list.
Then we said a year ago that infrastructure services was adjacent to Netel and more it's a core segment. Right now we don't have an adjacent segment. Of course, we will, but now we have so much to do within infrastructure services and power. So we have many, many opportunities, and that will take up our energy, and it will also take up our available cash, which we think we can spend wisely with M&A. We have financial targets and dividend policy that we communicated. We communicated revenue growth that we should grow up to 10% including organic growth and M&A. We did 31% in 2021, so we fulfilled that. We had 7% on organic growth.
Not including the decline on fiber, which we know, which is part of the strategy, which is why we founded the company, why we started 2017. We would have organic growth rate for the rest of the business of 16%. Margin target, we set an adjusted EBITDA margin above 7% in the medium term. We did 7.3% for 2021. That was fulfilled. Capital structure, we said we should have net debt in relation to adjusted EBITDA LTM below 2.5. Calculating this now with the correct leasing and everything, we are now at 1.0. We are at very low levels of debt, and that's part of the explanation is that we generate quite a lot of cash in Q4. Good position on that.
We have a dividend policy saying we should pay out 40% of group's net profit considering other factors such as Netel's financial position, cash flow, M&A, and organic growth opportunities. We do think that we have M&A opportunities, or we know we have good M&A opportunities. We also know that we recently brought money at the IPO from the shareholder, and we think we can use all our cash wisely with M&A, and we might even need to ask for more cash because we have more opportunities than cash. We think that it wouldn't be wise for us to pay out any dividends. The suggestion now to the board and the suggestion that the board will have is that we pay out zero then in order to cater for the good business we can do this year.
That was, I think, most of the highlights. I know, Peter, that we have in our presentation, which we don't show now, we have some numbers and so on. Is there any numbers you would like to comment on about what I have said already?
We can go through some points. We can jump to. Let's see, slide 18. When we are up from SEK 1,845 million to SEK 2,433 million. We can say that 2021 our revenues 55% is coming from frame agreements. That is quite interesting, of course, that is because a lot of our backlog is derived from frame agreements, so that is important. It gives us the stability over time and to focus and be very selective on new projects. We can also touch that Sweden and Norway are about the same size, SEK 2,021 million.
That is also interesting because we are increasing the Swedish operations with our acquisitions. The backlog is up SEK 1.1 billion from SEK 2.4 billion 2020 to SEK 3.5 billion 2021. That is also very interesting. It's all-time high levels. Drivers in the backlog is of course the frame agreements with Telia in Norway, and Telenor Norway, and as Ove has explained, the frame agreements in Germany. We have a very good situation going into 2022. On page 19 in the presentation, we can also explain that we have adjustments of SEK 50 million 2021, and around 37 million is IPO-related costs. M&A is around 8, and other SEK 5 million. Other is also we have a transition of the owned fiber business in Sweden that we have faced.
We have had some more work in 2021. Going forward, we expect, as we know today, it's only M&A going forward. So it's clean. Cash conversion also on page 19, we can touch that also. The CapEx in 2021 is SEK 28 million, of which 14.8 is related mainly to Telia and Telenor frame agreements in Norway where we have done a lot of works with system integrations and related work in order to get this project or frame agreement up and running. They are very long in time, so we think it is necessary to do it, and we will use it also for other projects and frame agreements for the future. We are really. That is a good investment that we have done.
It's not something we'll do every year, but we have done it now, so that should be taken in consideration. We also have SEK 5.4 million which is financial fixed assets. That is also not a normal course of business. It's more one-offs. If we adjusted for these positions, we are about 96% 2021. We are at about the same level as the years before. We still keep a very good cash conversion in our business. Page 20. Net debt is of course we are happy with that. It's low as we have explained earlier. As you know, we have done refinancing during the 2021 related to the IPO process.
We have of course also made new share issues in connection with the IPO, which we have used to lower the net debt. We are in a good situation going forward for doing acquisitions. We have a good pipeline as Ove has explained. We can also tell you that the two acquisitions that we have made n the ER and in tech they will increase our debt with around SEK 100 million in Q1 2022. That is also good for you to know. Let's see if there's something. I think that is the major part that we can add in the presentation. Okay. Ove, do you have anything more to add?
No, I don't think so. I think we had a good quarter, a good year. We have good trends, good segments. Margins we think are good. We know the deviations from last year. We know that fiber is going down. We know it will continue to go down next year. That's part of the whole story. We started 2017 diversified to go into new segments, to go into new markets. Now we have quite good growth. We topped that up with good acquisitions, and we will continue to do that. No, I think we touched on most of it. I think we're done.
Thank you. We'll now begin the question and answer session. So if you have any questions, please dial zero one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find your question has been answered before it's your turn to speak, you can dial zero two to cancel. Currently, we have a couple of questions come through. The first is from the line of Carl Ragnerstam of Nordea. Please go ahead. Your line is open.
Hi, it's Carl here from Nordea. A few questions. Firstly, it's a little bit on the margin here. It's down 160 basis points year-over-year. So could you help me bridge the margin? I mean, what was sort of the mix effect in the quarter, raw material headwinds, et cetera?
The effect. I mean, there are many effects. There are ups and downs. The main things, if we summarize, are first of all, we closed a few extreme projects last year. We were building backbone in Norway, so that adds a little bit. We don't have those projects this year, but you know, we still have good projects. The main difference is that we are starting up with Telenor now, the big frame agreement. It will run for several years. Together with Telia, the frame agreement, it's more than SEK 1 billion in turnover. It's overall good margin. When you start such a project, first of all, you start it quite low on the margins because you never want to adjust downwards.
If I come back in a year and I tell you I reduced it with a couple of percent, we will have a quite sad discussion. We start low. We expect them to go up. Secondly, you need to invest a little bit into them, both in systems and in time. This quarter, we have some costs for starting them up, which explains if you want, wouldn't we have had those costs, we would have roughly had the same margin. That's a very high margin, and we're very pleased with it, actually.
Okay. Perfect. Very helpful. Also, I think that we have seen a few in a few sort of service companies that the increased sick leaves due to the spread of Omicron is hampering at least end of Q4, also in going into 2022 here. How do you view this potential impact on your business?
We have impact, but we haven't talked about it, and I don't think we will come back. We might come back and say, "Okay, we had more than we expected." We expect it to be okay. We do so.
Okay.
Yeah.
You cannot see any increased sick leave rates currently?
Yeah, we can see a little bit, but not enough to actually sort of influence enough so that we have to talk about it. It might have been even better, but, you know, it's a little bit. Lots of the projects are outside.
Yeah
You are outside, you do construction, of course, there are sick days. Now with this Omicron and everything, yes, you have a little bit of a cold, but you're still outside. You are home for a day, and then you can work again. It's much more problematic if you have to go home to other people, if you have to go into apartments and so on, and there you see a little bit of effect. You saw effects from that you were sort of restricted from traveling in Norway before. You don't see those restrictions anymore.
Mm.
So far we will not claim COVID or anything actually.
Perfect. That's good. Also on the backlog, it's developing very nicely, still. How do you ensure that you have a decent profitability level, considering sort of various inflation or quite high inflation on everything more or less currently?
Mm-hmm. On some. Well, when you place a bid, you have to account for it, and you have to put the prices you want in order to safeguard yourself for inflation. On longer contracts, in most of them, there are KPIs, and they are not perfect. There are labor inflations, and you have a KPI for that in the big service contracts, for instance. In some contracts, you don't. In some contracts, they even tell you that, "Okay, if you're gonna build this power station, and if you're gonna use ABB material, materials is your problem." Very few companies are accepting that actually. They might even say.
Okay. Is it the minor parts of your project?
It can be big, but not so far. At least in Sweden, we have basic construction contracts that everyone is using as a base for contracts. There you have the right to get compensation for unexpected price increases, such as, sort of, steel cost increase with 100% and so on. It will always be a discussion. It will always sort of be a negotiation.
Mm.
So far, okay.
Okay, perfect. The final one from my side is you propose zero dividend, or the board did. You said that you have a really strong M&A pipeline. Could you give some flavor on the M&A pipeline, given I mean-
Mm-hmm
In terms of size of the companies you have, if you have any non-binding LOIs or something in it?
We have LOIs. We don't announce those. We only announce the signing. We have LOIs about to be signed. What we do, we meet the companies, and then we always start with sort of a valuation discussion because if we not agree on valuation, why spend all the time, which I think is normal. When we sign an LOI, we are sort of agreeing on valuation. In terms of financials, we are quite far in the process. We are looking for Eltek. Eltek was quite small, but they were in a place where we are not, like 400 kilovolts. That would be considered very small. We wouldn't do many of those. We would still now look at 100 to 300 maybe, I would say.
If you go, for instance, to a new geography, we are touching a little bit about on U.K. We have. If you look at Germany, we saw Sweden were declining on fiber. Those people are now in Germany. We are now from the Norwegian organization start to look a little bit about Norway. There you might say, "Okay, it's not SEK 100 million. It might be SEK 80 million or slightly smaller companies to start with." The general theme is, like, SEK 100-300 million in turnover. It is in Sweden, it will be infrastructure services, a little bit power. In Norway, it will be power we look for and infrastructure services. In Germany, it is fiber a little bit, but it's also infrastructure services and power.
If we get to speed up and if we get going in the U.K., it would in the first instance be fiber because we know this, and it's a booming market.
Okay, perfect. Very helpful. Thank you.
Okay.
Thank you. Our next question comes from the line of Stefan Göthlin of DNB. Please go ahead. Your line is open.
Yes. Hello, Ove, Peter.
Hey.
I would like to just follow up a little bit on the M&A agenda. I think you gave a pretty deep answer there. Given your comments regarding withholding dividend and also you mentioned that you might need to ask for more money from shareholders, do I read it correctly that you're stepping up your ambitions on the M&A agenda, or how should we view that?
Yes. I think that we do. I mean, we are in the bank. We are an operating company. We are from TeliaSonera. We have processes. We have routines. I mean, we are sort of a real company. We are not just doing M&A. We started 2020 again because historically TeliaSonera had M&A, but we started with Peter. I think we are in a ramp-up phase. We started just, you know, one and a half year ago to take position. What we do, we take position. We just don't do M&A. We take position, and we see good opportunities in infrastructure services. We see opportunities in Sweden and Norway. We think we see opportunities in Germany. We have a pipeline. We have an advisor. We are making contacts.
We are quite sure we see opportunities in that geography as well. We need capacity. We need to expand the initiative internally. Right now, just to give you a flavor, we in infrastructure services, up till now, Peter and I has been working with acquisitions. In infrastructure services now, Johan Palmér, who was starting Brogrund and was the CEO, he's now responsible for infrastructure services in Sweden, and he's also taking part in M&A. We are expanding capacity there through M&A. In Norway, Edvard was running Netel AS, and Lars-Erik Sundell, who's running Net change, they are also taking part of it. They're more or less running all the M&A in Norway. When we look at Germany, Anders in Germany is now part of it. When we cautiously look at U.K., it's actually Edvard.
We are expanding our internal capabilities, so we should be able to grow.
Okay, perfect. Sounds good. A little bit on the mobile in Sweden. During the IPO process, you talked about that it was basically only Telia that had started the 5G rollout and that the other ones was about to start in the later or in the end of 2021. How can you give some additional comments so that we understand how you're developing in the mobile side? Are you working with all the operators in this space? Should we expect a quite dramatic ramp up during 2022?
We should expect a ramp up. It's gonna be the limiting factor here now is partly actually installers, because all of Europe are installing 5G and a little bit ourselves. We should expect to ramp up with Telia, really. Telia is actually doing more themselves than we expected. They have Ericsson as a rollout partner. Telia is doing more and more themselves, and that might indicate that they are not very patient anymore. They want to increase the speed. We will, I hope, work with Tele2. They haven't really started, but, you know, a little bit, but they're not in the steep ramp-up phase. Then we see how much capacity we have for the others. We are in a ramp-up phase with Telia. We will get there with Tele2, I'm quite sure.
Until now, they have seen a little bit of material shortage, but now they say they have actually radio equipment and so on. Now one of the big fights now is actually to get the agreements with the property owners, and we're part of that as well. Especially in Stockholm, it's quite difficult. That's a big pressure to get more agreements so they can build more.
Yes. On the fiber side in Sweden, you say that there's still some fiber or that you have some fiber revenue left in 2021 that will be phased out. Do you believe that you can compensate for this loss from cable upgrades to Tele2 in Sweden?
I think maybe. I think we said we're gonna lose SEK 100 million next year. I mean, we did the SEK 150 million 2021 on fiber. Partly it's FTTH and partly it's backbone. We will build the backbone next year. We think we're gonna lose SEK 100 million. I see the German operation is actually almost a Swedish operation because it was Swedish people who formerly built fiber in Sweden and went to Germany. And they will compensate. And there you have very high margins.
That's perfect. Thank you.
Thank you. Our next question comes from the line of Karl-Johan Bonnevier of DNB. Please go ahead, your line is open.
Good. Good. We continue to take market share in the region here. Ove and Peter, just looking at getting the numbers right for 2022. You're starting the year with a record backlog, but obviously it's slightly different compared to your historic backlog. How much does that tell us about what kind of revenue growth you will have in this year, and how much would you expect to see of revenue to be created within the year rather than coming from the backlog?
It's a good and difficult question. No, you're right. The backlog doesn't say as much about next year as it used to do because you have longer contract in time. It tells you that we have much more volume two to three years now than we had before. We do think. I mean, we had the question and we said we're quite sure on 70% that we have them for next year. We need to still get another 30%. Part is new projects, we need to win them. Other is actually volume from frame agreements. You have the frame agreements, you don't exactly know what you get out of it. You don't know exactly how much, but it will come from agreements you already have with agreed prices and so on.
We think we are confident to have growth next year. Absolutely. Good growth as well. Given what we have-
To understand it fully, looking at framework agreements, there you haven't really put anything into the backlogs or from those or an assumption how much it should come out, or it's just a conservative assumption lying on framework agreement in the backlog.
It's a conservative assumption. The closer you get to actually doing the project and the further in you get through the year, the more volume you add. We haven't fully done because we have new companies in and we want to be very convinced about their backlogs before we put anything in. Since we are still taking in companies, we haven't included everything in the backlog because of practical reasons. We might even have a little bit of an upside there in the backlog.
Excellent. Just to say, follow on to an earlier question as well, looking at the backlog and obviously the inflation we are seeing in cost items out there for the moment, and I guess you are seeing the same thing when you need to compensate your sub-supplier on these kind of things. Is there a margin risk in the backlog or do you feel confident that the backlog is still, say, monitored on a level that supports your financial targets?
If there are enormous price increases or big price increases, if they continue, there is risk, absolutely. In terms of quality of that business and in terms of the pricing we have there, would we have normal inflation, we would have a very good situation. There is inflation and let's see. I can't say we are totally insulated against inflation. That wouldn't be correct.
If you take like this, what you see for the moment, you're standing in the middle of February, the order backlog should still support the margin target of about 7%.
Yeah, absolutely. I must say that, absolutely.
Excellent. Coming a little deeper on Germany as well, please. Looking at your trebling the size of the business in Germany during this year, have you felt that you have been able to grow the business in, say, according to the right kind of parameters or for you to keep control of what you see that the clients are paying you on time and all these kind of things? Say your lessons in Germany is still for continued growth, or?
I think when we talk to Anders and the people in Germany, we can only tell them that this is very impressive. This is very well done. You have grown the business. You have brought in sort of the biggest clients you can, the most complicated clients. You are turning out margins, and you are now triple the turnover. However, we would like to do more. We would like to get to sort of EUR 50 million, not 250, not EUR 25 million. How do we want to do that? We can get more organic growth. We will next year. We will compensate for the decline in Sweden. We also said, okay, that might be, we should maybe not push it more. Let's look at M&A.
M&A can have a good spill over to Anders' business as well, because let's say you get a very good infrastructure service company, and they know many things. They know how to do things that Anders needs to learn all the time. How do you handle taxes? How do you report things? How do you... I mean, so he's quite aligned. He thinks it's a good idea. He will support this. We will, yes, see organic growth, but our aim is also to do M&A to get to sort of EUR 50 million, maybe not next year, but the year thereafter. Again, we have done a great job in Germany, but we would like to do more.
Excellent. Looking at infrastructure services, could you give us some idea about the total addressable market within your footprint or, say, what you would see as your market opportunity? Obviously, you built an operation already with about SEK half a billion in revenue. I guess that's probably still a very small part of the total market opportunity, or how does it make out?
You gave me that homework before. I know this. I'm sorry. It is a big market, but you can't address all of it because you have Peab, NCC and those companies. I mean, there are segments there. We said if we are successful, we should be able to, within 1-2 years, if we continue, if we're a little bit lucky, to get in the proximity of SEK 1 billion in Sweden. This is sort of what we aim for. It has to be those companies with good margins, because there would be no use to sort of start buying companies with low margins. Now we are maybe SEK 450 million in that specific segment. There is some way to go, but we have a good pipeline.
It doesn't give you a feel for the total market, but it gives you a feel for our ambition at least.
That was the next question for me. It was even better you answering it that, like, that way. Just a final thing as well, Peter, if you could, when I look at the volatility in the working capital affecting cash flow, it was obviously huge movements intra-quarter during 2021. Is that a similar pattern or was it exceptional things that made it look like that during the last year?
In the end of the year, it's normally quite good for us, and it was of course very good this year, 2021. I think it's a seasonal effect that we have in our business.
We should expect the same kind of pattern going into next year that it's gonna be lumpy, so to say, from an operating cash flow perspective.
It's more or less. It's very difficult for us to say, especially in December. Many things can happen because it depends on projects going to end and new projects is starting up. It depends on our clients, how they are acting. Normally strong in the end, last quarter and in December especially.
Good to know. Thank you.
Yeah. Yep.
Thank you. We have one final person in the queue, that's Stefan Bilén of Kepler Cheuvreux. Please go ahead, your line is open.
Thank you very much. I have a few questions.
Hi, Stefan.
Hey. So just to follow up on your answer regarding what you expect in terms of growth. Well, basically that you talked about, expecting growth for 2022. Is that organic or was it including M&A?
I include everything there.
Okay. It's how do you see the potential?
The reason-
Yep.
The reason for our mindset here is the history. We know 2027. We knew, I mean, we had something big ahead of us, and we
Yeah.
We are still going with 25%.
Mm-hmm.
This is sort of in the quarter and 31 throughout the years, and this is the number we look at. Then, yeah, I think you can appreciate the history there.
Okay. All right. Thank you. On the startup costs in Norway, would you say that those are done by now? Or will we see some of that in Q1 as well?
I think they're done by now. They are done by now. If we start to get the volumes we promise, if we start to deliver those volumes, then we have the organization we showed, we are at the efficiency, and we don't have costs that we are not using. We start to approach that, absolutely. Because when you get.
All right.
You need to build the organization, and you need to prepare for volume. If you don't get the volume, you're slightly overstaffed, and you get the cost you shouldn't partly.
Mm-hmm.
You might be compensated for it, but that's a long discussion. I can come back to that maybe in a quarter.
Yep. Okay.
More.
Next question. Can you go through the acquisition prices and the valuation, up front and earn out, for the recent acquisitions that you have made?
Yeah. I think I can talk a bit, and then you should take over because you have much more details there. The last one was
Yeah.
You can have this, Peter. You know this better. We had an initial purchase price of SEK 113. They have an EBITA of SEK 25 million 2020. What's that? 4.5.
Yeah.
We have an earn out on that as well.
How-
On the same multiple. If they now during the next two years on average make more profit, they get the same multiple.
Was it two years or how many?
Two years.
Two years, yeah.
Two years. Okay.
And two, two, two year earn out. Uh-
Mm-hmm.
When we pay around, because when we are buying somewhere between 25% and 35%, we pay in shares when we're buying the companies.
Mm-hmm. Okay.
We have earn-outs normally between one and two, three. Normally two years, but it could be. We have a case that's where we're gonna talk about three years. We have done three years and some with one year. It depends on the company, how they are set up and what we're going to do the next couple of years.
Mm-hmm.
How the plan will look like. The earn out is in. It's very important for us in that we have a very good common goal.
Yeah.
Peter, we signed the Eltek. That's a smaller company. It's profitable.
Yeah.
The multiple is lower, right?
Yeah.
Yeah.
We are around. With the smaller companies like that, we are around four. Multiple at four.
We are looking in Norway. That is slightly higher than in Sweden.
Yeah.
It might be due to the market, it might be due to us. Add one, what you say, one turn or something.
Yeah.
Something like that.
All right.
We haven't gone close enough in Germany to know yet. We will quite soon. We can come back on that.
Mm-hmm.
Yeah. We have decent multiples at the moment. We can. The companies we are finding, it's normally companies that wants to join companies like us. We have a long history. We have something that we can actually share to the companies. They are. Often they have been approached by other compounders, so to say. They don't want to get into this kind of companies. That's. We have a good situation because we have our niche of companies that we can find that suits us very good.
Still, Stefan, there is quite high interest in the market. Yeah, for instance, we just managed to get it because we told them. We knew them since long, and we said, "Okay, you want to sell the company. Either you can run your courses or we can maybe do it here and now." That was lucky.
Mm-hmm.
In other company, similar companies in Sundbyberg, for instance, it was recently acquired. There we didn't want to match the price, so.
Mm-hmm. Okay. You have a wide pipeline, so should be enough anyway. All right. By the way, on the M&A, can you just go through the performance of the acquisitions that you made last year?
Yeah.
You were pretty optimistic and, you know, happy about what you saw.
Yeah.
Half a year ago. Did that materialize? Have you seen any hiccups or issues?
Going forward in those companies?
Yes to all, yes to all of those questions. Overall, it's good. I mean, it could have been even better and much worse of course. We have a few high performers. We have CK and Brogrund, really well done. Oppunda, which is so and so, but still okay. We had Moberg, the first one we did, and that's frame agreements for low distribution network for Mellerud Energi. We were not in good shape, so we have introduced new resources. It's sort of restructured because we have lots and lots of orders. We need to prepare for that. We had less profit than we hoped for at Moberg, but I think this year we will have more profits than we hoped for if this is working well. For 2022 we have good positions in all of them.
And the first-
All in all.
Yeah. The first month with YE now in January. I mean, we know them since a month now, and it looks good. Good backlog.
All in all, like we say, like I was saying, it's not a big deviation. All in all, they are performing as planned as a group.
Mm-hmm.
Yeah.
Okay.
High margins in all of them.
Yeah. Okay. Do you have any comments regarding the legal disputes? Any progress there? I think we saw something similar with Transtema. I think they
Yeah
... basically won some kind of arbitration.
Yeah. They were a slam dunk, I think. These are the same vintage of projects, same year, same type of projects.
Mm-hmm.
Same disputes, same arbitration. I think we have much, much more documentation than they have. I think we have roughly the same arguments, because this is about do you have the right to prolong the project? Were there good enough reasons? There were Trafikverket, there were landowners, and those are permitted reasons why you can have a longer project. We are very happy about what happened with Transtema. Very happy.
Okay.
We will get the next round of answers in March, and then it's scheduled to start after the summer. We haven't changed bookings. Yeah, we have changed the view on it. We are slightly more positive, of course, since Transtema had a slam dunk on it.
Yeah. Okay. Sounds good. A couple of more questions. One is on the Finnish fiber rollout. You mentioned that you hear from network owners that they are activating themselves. What are they basically saying? Are they, you know, planning to ramp up rapidly, or is this gonna be, do you think, relatively slow?
We all the time think that they will, and they say that they will. Now Cinia, I think the state-owned network, they are. Because you pay, I think, EUR 2,000 to get the connection in Finland, but they offer that for free now.
Mm-hmm.
If they want to build, and they say it's a good business case, and the competitor says that's not allowed, you're state-owned. They say good business is allowed even if you're state-owned. We hope that there will be more tenders. They have to be, say, this year, we have to see them soon.
Yeah. Okay.
We have to build almost nothing 2021.
Because I think you mentioned earlier that they had to do door-to-door selling before they
Mm-hmm
Was just curious to understand if that has commenced and if there is a demand really for it in a very
I think so.
in a market with a very strong mobile network infrastructure.
I think so. It's only true if it converted into sort of tenders for building the networks.
Mm-hmm.
Hopefully we see something during Q1 here.
Okay. Thank you. Last question. More long term. Basically now that you are listed, would you say that you are actively seeking to, so to speak, over time, reduce your relative exposure to rollouts? Because, you know, trying to, let's say, lowering the volatility in your revenues and profits, simply because that could be something that is more appealing for the equity market? Or are you still so happy with the margins that these kind of rollouts offer that you wanna continue to drive that part of the business long term?
I think we drive other parts even faster. Maybe the exposure will go down. We're very happy to grow in Germany, and that will be a rollout. If we get a foot in the U.K., that will be a rollout. In the established markets, it will be less. That, you know, 10, 15 years from now, it probably, or 5 years in Germany, it might be the same story there. It's sort of a development. Because if you're new, it's easier to go there and win projects rather than to go and do big service contracts where you need a lot of people.
We are going up. We are 55% from frame agreements to 2021 revenues. We are going up in this kind of longer contract with the service parts in it, which is more stable. It's not up and down in that case.
Norway is definitely moving there. Sweden is as well. The rollout is going down. Finland is quite stable. Germany is rollout. On the total, I guess you're right, Peter. On the total right now we are going in that direction. But if you get a big boom in the end, hopefully we get lots and lots of rollout as time goes on.
It's to achieve a good balanced mix, that is the best, of course.
Yeah. Mm-hmm.
Okay. Just to follow up, now that you are phasing out of the fiber in Sweden, is that a bad business for you or do you manage it from a profitability perspective?
It could be worse, but it's not bad because you have less business and you have more overheads, so the margins are lower. Absolutely. We had good margins in Sweden, and that's partly due to telecoms. We have good service margins, actually. That's well, that's fiber networks. The new companies are adding as well. The old fiber business is nothing like it used to be.
All right. Will that phase out take the whole year or is it something that's gonna be over in the first half or so?
No, it's gonna take the whole year, but it's probably gonna be more first half year than second half year. Let me. I have the papers. Let's see here. So we're still gonna have some revenue next year in fiber, but the drop's gonna be SEK 100. There's gonna be sort of SEK 50 left, but that's backbone, and that's okay business.
Okay.
The backbone's gonna remain all through the year after. These are long projects.
Right. Thank you very much. No more questions from my side.
Thank you. As we have no further questions from the phones, I'll hand the floor back to Ove and Peter to conclude the conference.
I think we have received a question on the email here from Stefan Lindblad for Ambergate Invest. He's asking about if you can elaborate a little bit more about Sweden and the power market in Sweden. It has been a lot of discussions, of course, about the power nets and transmission of electricity in Sweden. He wants you to elaborate on that. Also, if you can talk a little bit more about the 5G in Sweden and how we are looking at the development for 2022.
Mm-hmm.
If the run rate would be on the same level as Q4 or higher.
I think 5G first, yeah, it will increase. The run rate will be higher on the telecom side on 5G because they are ramping up. We are ramping up. We don't have all the teams working yet. It will increase. Power is a very interesting. Demands are high. We don't have enough distribution capacity in Sweden. We have lots of framework agreements. We will get volume. We are now in a period because the whole pricing of bidding or getting returns from networks are regulated. This period will go on for another two years, then there will be a new period. If the interest rate for the network owners will go up, then you will see a more big increase in investments. We still see an increase, or we see quite some good order intakes now.
To add to that, Vattenfall new agreement for stations in Sweden are starting now. They start to hand out new stations to put tenders on. The first one actually last week. We will see. Hopefully, there will be lots of stations from Vattenfall as well. Right now, we are building lots of station for E.ON. There are great hopes, but again, it's actually political. This is a regulated market, so things can happen. I hope that was enough of an answer. Any more questions, Peter?
No, I haven't received anything more on the email.
Okay.
The only one.
Okay. Thank you, everyone. Thanks for all the good questions. Thanks for calling in. We are looking forward to this year.