Welcome to the NOTE Audiocast for Teleconference Q1 2022. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present CEO and President, Johannes Lind-Widestam. Please go ahead.
Thank you. Well, how do we start a presentation of this quarter? First of all, I think that we have done, yet again, another fantastic quarter. Sales is highest ever, and we also ended this quarter with the strongest month ever, with more than 10% of the second-best month ever in March, where we did over SEK 310 million. Before we go into the presentation, if you take a look around us and we have had two years of COVID outbursts that have been limiting a lot of the potential. After that, we just barely came through that. Then we had the war in Ukraine. On top of that, we see the component crisis, we see the freight restrictions or constraints as we have in the market.
With all this said, I think it's amazing that the industrial production in the world is going in this speed, and also that we as a group managed to get so much produced and sold every month. When I walk around in our factories and see the level of production and the level of productivity and the enthusiasm that we see, I get very proud. With all the constraints and problems in the world that we can still deliver numbers in the way we do, I think that's just amazing. I will come back to that. Looking ahead, I think that we have the best is yet to come. We are not harvesting on things we have done. We're still making a lot of investments.
We are attracting new customers, we're attracting new programs to existing customers, and we are supporting our customers throughout this very turbulent time. It's just remarkable to see how NOTE is handling all these surroundings. I just wanted to have that said. For those that don't have the possibility to look into the sites and so on, it's fantastic. That's for me extremely pleasing to see. Okay, moving on. First slide. Let's see here. Sales 64% up. In that number we have somewhere around 5% is currency and 35% is organic, and 24% roughly is coming from the acquisition of iPRO. Solid numbers throughout the whole segment. I will come back to that.
Also very pleasing to see that the operating profit is continuing to increase 1.3 percentage points. It's to me just remarkable. First quarter is always a bit tricky. We have the Chinese New Year, and this time this year we did also have the first closing of our factory for five days due to COVID restrictions. We have the closing of our Shenzhen area. That also costed us some productivity. We managed that lockdown very well since we have dormitories where about 90% of our staff is staying. We run the factory throughout the lockdown with about 90% capacity. The loss in sales in the quarter is less than SEK 10 million from the Chinese operations, probably more around SEK 5 million.
We had good recovery in that. It cost us some money. We will come back to that when we see the margin per segment. When we look at the rest of the world, we see that margin is a bit down this quarter. Still overall fantastic result. Profit per share SEK 1.95. I think that's the second best we have ever done. We did a bit better in Q4. For those that follow us, you know that Q4 is seasonality a better quarter margin-wise than Q1. It has always been that way. This year is also following that trend, but still very good.
Cash flow at least positive SEK 9 million, not so much to write home about, as we used to say, but it's still positive. Very pleasing to see we're still building inventory. Our direct delayed value has increased from SEK 50 million roughly to SEK 100 million. What I mean with that is deliveries that we have scheduled for the quarter that we did not ship out. Then we have the indirect delays, meaning orders that we have received where the customers wants to have delivery in the first quarter, but we have already confirmed, I mean, maybe second or third quarter. Those I often refer to as indirect delays. The value of the indirect delays is significantly higher than the SEK 100 million in direct delays.
Our order book from what the customer wanted in this quarter is significantly higher than what we managed to get out. Still, SEK 821 million is our best quarter ever. Very strong sales anyhow. Moving to next slide, our margin, and here you see what I mean. We got a new record for Western Europe, 11.4%. I think it's first time we're about— Oh, we were over 10% in Q4, but the second time we're there, but the highest ever at 1.7% up. This is of course mainly an effect of the strong organic sales growth in especially our Swedish and Finnish site. Very pleasing to see. Rest of the world also very good, 43% up.
Here we have a bit higher currency effect. I think that is around 8%-9% of the growth is currency. We also see a decline in the margin of 2.6%. This is, of course, China cost us a few million to recover from the lockdown and all that. We also saw that we had some lagging effect of price adjustments in our Estonia site. We had a one or two month delay in getting the new pricing for the increased material cost in Q1.
This is a bit of a one-off effect, so we know that March we did not see this effect, and we are not expecting to have this push on the margin on the rest of the world for the rest of the year. Very pleasing to see. What we also see is our growth in headcount. If you look at the Western Europe, we're growing with 38% in headcount. More than half of that growth is coming from the acquisition. Still, 38% growth in headcount and 73% growth in sales. This is the reason why we are increasing our operating profit quarter- by- quarter, that we manage to increase the sales significantly faster than we are adding more people.
This is not that we are using the people more hours or pushing them to work harder. This is simply because we are managing to get more efficient machines in place. We're automating warehouse, we're automating workflows. We are doing all these activities that we are supposed to do to continue to grow without adding headcount. Headcount is not a bad thing, but we should utilize them in the best way we can. Automation is a fantastic way to continue to increase our margins. This is partly why our CapEx is quite high at the moment, and will remain on a high level for a number of years to come. I still believe this is fantastic.
Despite the decline of the operating profit in the rest of the world, I still believe that our operations in China and Estonia is at the best shape ever when we enter 2022. I would be surprised if we don't close the gap, and we'll close the year with a positive margin development also in the rest of the world group. Next slide, customer segments. I got a question from a journalist earlier today. "Okay, which segment are you most happy with?" I have to say that the answer is all of them. If I look at this picture, the slowest growing segment is MedTech with 48% growth. Just look at the other business.
If you have 48% growth in one segment, you're super happy and this is our weakest segment. GreenTech, 90%. We were expecting this to be strong. MedTech, I've talked about it for a number of quarters, that this is going to come up very strong, and it is strong. I expect it to continue to grow. MedTech is where we have significant new wins that are in ramp-up. Communication, we talked about it also in the last quarters, 69%. It will most likely remain on a very high level for this year at least. Industrial, our bulk of our business, growing 56%, and this is, as you know, a big variation of different customers. All in all, extremely happy to see that all segments are growing.
All segments have an order backlog that are indicating continued growth in similar numbers to what we see. Fantastic start of the year. I don't want to highlight any segment this time. I want to highlight all four of them, because there are fantastic growth and extremely strong opportunities in all of these. I would say that GreenTech will most likely be our fastest-growing segment also this year when we summarize the year. Moving on to next slide, some highlights. Still quality very strong. We're reaching below 500 PPM quarter- by- quarter and month by month. We have and this is a number that we are constantly improving year-over-year. Since I started, we have not seen a year that has been weaker than the year before.
Very, very strong numbers delivered quarter by quarter, and this is one of the parts that the customers are appreciating. We have supply challenges. We have pushed out more than SEK 100 million in sales that were scheduled for this quarter. This means that our delivery performance is still in the numbers of the mid-SEK 80 million, not in the mid-SEK 90 million as we are expecting. We still believe that this is in line or better than any competition that we are looking at. We are still managing to get good deliveries out. Here again, I have to say that all our customers are extremely supportive in the chase of components in trying to reschedule to make the best out of the component availability that we have in our factories.
I think that the cooperation with our customers has strengthened throughout this crisis. I'm very, very pleased to see all the cooperation between us and the customers and how we try to close these gaps. Recently, I think that many of the suppliers has also stepped up and are doing good activities to close gaps in the supply chain. I'm very hopeful for the future. I still believe we will have a really tough situation throughout this year on the component market. So far, I think we are coping with it at a overall a very, very strong level. Order intake, it's very easy to look at this and say that it's fantastic. I mean, we are up 100% in order backlog year-over-year if we don't take in the timing.
This means that our order backlog is now about five-six quarters long. We have very good visibility in what the customers want, at least for one and a half years ahead. After that, we have another six months where we have forecasts that are indicating similar growth numbers as we see. Order backlog for the shipments in Q2- Q4 is up 46% compared to last year, excluding IP`RO. Still we're guiding lower than this. This only means that we're not expecting that we're getting components for all the shipments that our customers are expecting. If we get components, we would grow much faster than what we are guiding for. This is how it looks. I also want to highlight this, how does this look when we look at our home markets?
Sweden, 45% growth. Very negligible effect of currency. This is pure organic growth. Western Europe, 39%. U.K. and Finland are growing a bit slower than Sweden. China, 53%, extremely strong. Estonia, 35%, and here we have seen some delays. Here is one of the sites where we have more pushed out orders than in other sites. The order intake in Estonia is even higher than the 35% that we're indicating here. Really strong. iPRO still performs fantastic. 40% growth in local currency. They are serving several of the EV charging customers. However, if you look at iPRO, we are going to see a bit slower growth in the second quarter.
The U.K. government is discontinuing the contributions to install EV charging stations, and this will have an effect in April as we see it. In the overall picture, you will not see it, but it's something that everyone that works with EV charging stations should be aware of that this will have some kind of effect in the market. Overall, the expectation is that the EV charging market in U.K. will grow 50%+ or even higher. It will be a month or so that we will see some lower numbers. Moving on, CapEx. We were talking about this earlier. I think our budget for investments is roughly SEK 70 million. We did SEK 60 million last year, and we did just shy of SEK 60 million in 2020.
What we do is that we are investing in new equipment to increase capacity. We are utilizing more automation, and we are investing our way out of quality-sensitive processes. If we have processes that are delivering a bit lower quality, we try to invest our way out of that because that eats capacity when we're not getting full yield when we produce. Floor space is something that we talk very little about. I see some others are talking about it, but we have increased the floor space capacity in Sweden, Estonia and U.K. in this quarter. We are doing a lot of activities also here, and we are expecting to continue to increase floor space in several sites.
As I've said, we always have capacity to cope with at least four or five quarters growth ahead. That's where we are standing. We could fairly easily do SEK 1.1 billion per quarter if we had the component at the moment. We still have spare capacity given the current mix that we have. Yeah, we have talked about global component market. What is fascinating is that we still see that the semiconductor suppliers are increasing their production. Last year, semiconductor volume grew with over 20% and still we're not seeing any easing of the market. The electronics industry only grew with 7%-8%, the last number I saw.
There are inventory build up somewhere in the world, unfortunately not where our some of our customers want it. This is the reality that we're facing. Sooner or later, we will see that all this production capacity that the semiconductor companies are investing in and getting out will come to us. This will be yet again the topic of the year in the electronics industry. I hope this is the last year we will talk about the supply shortages. Again, return on operating capital. We discontinued that as an objective for the group. I want to highlight it. We are up to 30%. Until last year, we had 25% as our target. Now we're at 30%. Fantastic.
Also a new record with big margin. This is also a KPI where we are improving a lot. Balance sheet, strong equity, 41%. Good liquidity situation. We can easily cope with one or two acquisitions in the IPO size for the year if we find the right targets. This is of course one of our focus areas. Outlook. What can I say that has not yet been said? Very strong order situation. We see that all customer segments are growing. There is basically no change between the market segments except for that, for sure the GreenTech segments are having a bit stronger growth potential. We are expecting that our working capital levels will be stabilizing. Our inventory has grown.
It has doubled, I would say, in the last year. We also have advanced payment and so on from customers. Our exposure to bad inventory, we see that as fairly low, and our auditors are seeing that we're doing a better and better job with that. We have not seen big write-offs in the recent years, so we are not that nervous about it. We have a strong balance sheet to work with. For us, this is just the way we are serving our customers in a strong way. Again, there are some positive mega trends that are in our favor.
We have talked about them before, but I think today to have a solid footprint and an increasing footprint in Europe is going to be very important in the eyes of our customers. Supply chain constraints are very challenging for our customers. I don't expect that freight will be in balance in the short term. I also see that political decisions are affecting companies' ability to serve their customers. If you have a very diverse supply chain with shipments from many different countries in many different regions, you will see that political decisions like the Chinese very strong restrictions on COVID that will affect your ability to meet your customers' demands.
My view is that we will see more and more companies moving their production or the suppliers closer to where they have their end market or where they have their final assembly sites. This will play in our favor as we see it, and we have many good dialogues with the customers in this area. Yet again, 2021, our strongest sales year ever. Our wins were up like 30%, and all that volume is still yet to be implemented. We know that within this year and next year, we will implement SEK 800 million-SEK 900 million more sales in our pipeline that has to be produced. Fantastic opportunity also here. The only constraint here is that we see that the component availability is pushing out the start of production.
For those of you that are not so involved in this industry, there are unforeseen demands on semiconductors, you have one-two years lead time. If you develop a new product and you want to have components for it, you will have to wait at least one year to start production. This is just madness in my opinion, but this is how the market is working. Therefore, we will see that implementation of these wins will take some more time. I still believe that we have a very good possibility to meet or exceed our growth targets that we have communicated. Here we talk about that we are expecting to have a sales growth of at least 30%. When we started this year, our guidance were 15%-20%. Now we're up to 30%.
We have a very strong first quarter where we exceeded our outlook, and we are seeing that the order books are getting even fuller than we saw when we started this year. We expect that our sales will continue to increase stronger than we expected when we started this year. We also believe that with growth, with the automation initiatives, with the new equipment that we buy, we will have a good possibility to continue our positive earning trend. We are getting very close now to our long-term objective. I think we're at 9.5% or 9.6% on the trailing twelve-month operating profit level, so very close to the 10% we communicated.
Also if we look at the long-term objective of SEK 5 billion in 2025, I would say that currently we are a bit ahead of that plan. With the guidance that we see and the order backlog that we see, we see that it may be possible to reach that level earlier than communicated rather than later. Next slide. I always end with this slide because I think it's just fantastic to see how the link between sales growth and profitability is. For those that have listened, I always refer to 10% growth, then you will by definition see positive operating margin development if you handle your operations properly.
I'm very pleased to see that this link is so stable, and we see that when the growth has increased in the last three years, we have 20% organic growth year-over-year and 26% including acquisitions. This is just fantastic in my opinion. I also see that our order backlog indicates that we can continue to be in line with these numbers, which is also fantastic to see. If you look at the operating margin, how well this is corresponding to the sales growth. If we take the last three years, we have gone from roughly 7% up to now 9.5% I think it is, or 9.6%. So fantastic. How can this happen? What is driving this?
We see the long-term trends of electronic production in Europe is now forecasted to grow 7%-10%. A lot comes from electrification, smart applications, but also from reshoring where many companies wants to move back their supply chains. I expect that Europe will be a very good place to be when you are producing electronics in the coming decade. This is very important for us. I said we are investing in ensuring that we are in operational well-functioning supplier to our customers. That is the cheapest way to maintain as a supplier.
If you deliver good quality with a reasonable number of deliveries on time, we will get the opportunity to quote on all the new products that our customers are launching. This is something that we're very proud of to see that our retention rate on new generations are significantly high. When we measure it, we are up to 98%, 99% on this. I think if you're below 90%, it's going to be a problem. Many companies are running this at maybe 80% or even lower. You have maybe 10% of your volume is going out every year, and then you have to replace that, and that is really tricky and it eats up your resources.
For us to be a reliable and trustworthy supplier is so important, and this is where we put a lot of our focus. What can be said more? If we look at the future and I think what the quarter is what it is, as I say. It's very good sales. We are pushed a bit on margin due to some lagging effects and some political decisions in China. But all in all, we're managing to get 1.3 percentage units up. If I look ahead and I would say that the global economy is now predicted to take a bit of slower turns than it has in the last years. What will that give us?
My view is that this will lead to somewhat more that the component market will ease up a bit when the level of production is slowing down. How strange that may sound, this will be positive for us because then we will get more components to eat off our big backlog that we have. The best that can happen, as I see it, is a bit of a slower economy that will ease up the component market, that will allow us to get more component availability in the near future, meaning the next, say, four-six quarters. That would increase our sales, how strange that may sound. It's a very unique situation that we are in with this fantastic backlog and the high win number that we see.
Despite all the issues that we see in the world around us, our operations and our customers' operations seem to be coping very well in this turbulent surrounding. With that said, I don't have so much to say. Maybe I should touch the subject of acquisitions. I only touch about it very briefly, but we always have, say, one-three acquisition targets that we are discussing with, and that's the situation today as well. We are in close dialogue with at least two. We will see how those materialize. We will come back to you when we have anything new to say. It's a constant dialogue and we are very attractive as a buyer.
We are financially stable. We are often expecting that all the management are continuing to run the operations. We are helping acquisition or acquired company to get better availability on components and so on. They are still allowed to run their operations in a fairly similar way as they have been in the past. Therefore, we are expecting that we will close at least one for the year. It would be a good guidance. That's at least our expectations internally. Okay. With that said, I think I can stand and talk forever, but I would open the floor for discussions and questions.
Should we start with the ones that have been sent in, and then we move over to the ones that have verbal questions? Okay, we have one from Carl Norén. How is the current lockdowns in China and especially Shanghai impacting you in April? According to our Chinese staff, we don't see that the Shanghai lockdown will impact our April at all. What we are seeing is that the lockdown in Shenzhen in March will affect the first two weeks of sales in April because we had a hard time to get material into our site. That we will gain back during April and May, so it will not show on the quarter, but we have some delays of incoming material.
So far Shanghai is not impacting us as we have seen it so far. We have a second one from Carl. How is the market for EMS services? Is there any signs of oversupply in the market, or is the picture rather the opposite, that supply is too low in Europe right now? This is a very good question. I have earlier said that today we have a situation where I would say that supply and demand of the EMS market is fairly in balance, and I still believe so. We have capacity to take on some more production. Our peers also have the same situation, so we can take on more, but there is not a huge oversupply as there were some 10 years ago. It's a very good balance, I would say.
I think this is healthy both for us and for our customers. That's how I see it. We have a third from Carl. Can you talk a bit regarding how the long lead times impact the ordering pattern from your customer? It's clear you have a longer order book right now versus two years ago, but is there a risk that some of this demand is driven by pre-ordering versus normal ordering? Yes, of course it is. I would say that our customers are a bit over-ordering, and that is one of the reasons why we are constantly guiding lower than our order book is indicating.
We try to balance out the over-ordering versus what we expect that they are actually wanting when we communicate to you in the market. In the near future, they would rather have more than less, if I put it like this. Yes, there will be an over-ordering situation for some of our customers. Still, we are not in that shape. We are not building inventory at any of our customers as we see it. We are rather eating off their inventories and there are shortages in supply due to the component shortages.
Even if there is over-ordering, I would say that the overstocking that may occur will not happen in 2022 at least. This is a scenario that may happen in 2023 or later as I see it. I think that was the last one from Carl. This was the last question we have. We got one more here from Mattias Montgomery. When market research says EMS market 7%-10% growth per year, is that before or after a roughly 2% price reduction customers have over time? I would say that this estimation is on volume. You will probably have to reduce the price reductions from that level. Say that it's 5%-8%.
I would say that in the current market surroundings, we're rather looking at price increases rather than price reductions. If we take, say, 2020 as some kind of baseline, I would say that it will take several years until the component pricing will come back to similar levels, if ever. I see that there will be a price push upwards rather than reductions over the next coming years. Maybe 2022 will be some kind of peak on component cost, but there will not be a fast reduction as I see it. We have Anders Rudolfsson. Congratulations to a fantastic report. You are not worried that order book is inflated due to component shortages? Yeah, Anders, I think I touched upon this subject a few times.
I think that it is, and that's why we're not guiding up to the full value of our order book. If we now have 46%+ iPRO in order book and we're guiding at 30%+ growth in total, I think that we are netting out more than the over-ordering that we see because we are expecting that we will not get everything out that the customers wants. We are seeing this, but we are always trying to balance this by giving a netted value to you guys what we are expecting that we can deliver. I think this was the last question we have on the chat that have been sent in. Is there any questions on the phone?
Thank you. Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. There seems to be no questions on the phone, so I'll hand it back to you, Johannes.
Okay. Thank you. I think I've said it all. We had a fantastic quarter and very, very strong outlook. As always, we will update the outlook per quarter and but in overall terms, we are looking at a very strong year as we see it. If you look at this in the longer picture, we're not losing any customers. We are attracting several new customers, and we are expecting that the customers we have will continue to grow within their own business. For example, look at customers like Plejd and Charge Amps and these. They are growing very fast, and we know which position we have together with them.
We are looking at a very strong order intake situation in the quarters and years to come as we see it. As long as we continue to deliver strong operational performance, we are expecting that this trend will continue. We are very pleased into the situation that we are in at the moment and with all these fantastic customers that are allowing us to produce their products. I think that makes me very proud. I have to say thank you to all of those. I think those will be my closing remarks for this call. Thank you for listening.