Good morning, everyone, and welcome to our Q4 report for 2022. Yeah, what can we say about this? It's very turbulent surrounding as usual. We see that inflation and currencies are a bit challenging for us and for most of the companies around. We see that, yeah, everyone talks about the semiconductor crisis to be more or less over, and I will come back to you a little bit upon that. It's very. How should I say? It differs a lot between different types of products and in some areas the availability is back to normal. In other areas, it's almost the same problem as we saw last year or for 2022.
We believe that it will continue to improve, but it's far from over, which is a bit surprising when you, when you listen to all the discussions around the media place where we see that the semiconductor producers are actually laying off people and so on. That's a lot related to what I would call the, yeah, the handheld units are down, and that means that the ones that are consuming the biggest quantities on the smallest types of semiconductors, they see that the, that the crisis is over and the availability is good. For car industry and for industrial use, we still see a lot of issues with getting components. I always start with being a bit pessimistic, which is I don't know why, but that's what keeps me awake in nights.
If I put that aside, I would say that this quarter has been yet another fantastic quarter, I would say. It's, we're up 13% or 12% in growth in sales up from Q3, which was the strongest quarter before that. We managed to reach the milestone of SEK 1 billion in sales. Fantastic. I think it's, what did we have? 28% growth in the quarter. Big help from currency. We had some tailwind also on the acquisition part. Our acquisition in Herrljunga has been performing really high, above expectation. We have 8% in growth on organic growth. This number can seems a bit weak.
We should remember that we had, if I recall it right, 48% organic growth in Q4 last year, so it's a quite tough comparable number. I would say that if you look at the trend, and I will come back to that as well, our sales is going, it goes a bit, it fluctuates a bit. Some quarters we have very strong acquired growth. Next quarter, we have good organic growth. It's a bit of which projects were delayed. If you look at the fourth quarter, we ended up that quarter with maybe SEK 200 million still delayed. All of those delays are currently coming from the old units, so to say. If we would have managed to get that out, we would have been continuing on the 20%+ on organic growth.
I know that this number may seem a bit low. I'm not nervous at all. We see that the demand is really strong, 40% up on order intake this quarter again. This number also do not include the acquisition, so this is purely the organic site, so to say. We still believe we have a very strong future also for 2023. Guidance, yeah, we are as I heard that from I heard it twice this morning that you're always so pessimistic in your guidance. I would say that we are not. We are always stating our lowest estimated number. We believe that we will, of course, be above it. Otherwise, we would say that we would be around the number.
We always say that we will be above it, and then we will, as usual, come back after first quarter and give you a bit more, more detailed guidance for the year. At this moment, with the surroundings that we see that to guide higher than the SEK 4 billion, we don't want to do that. We should always see this as the lowest estimate in our books. That's how we treat guidance. Yeah. We are really enthusiastic about this report. It is, if I move over to the numbers, we are the best quarter we have had. I think we are 40% higher than that in operating profit. We have some, again, some tailwind on some one-offs.
Also the Q1 for the year, we had some positive on the currency translations, not much, SEK 3 million, if I recall it right. If we look at the underlying profitability in the quarter, I think we're up 41%. I think that is significant. Then we should know that the strong organic growth we had in Q4, it was also the best quarter we have had on OP. It's not only the sales that were strong in Q4, it was also the best operating profit. To beat that with one percentage unit, that's really amazing. I'm so proud of all the sites and the work that is done out there.
We should not forget that behind all these numbers, it's actually actual work that is behind it. It's very easy for me to stand here and talk about all these numbers. For every SEK 1 million we sell, it's a lot of production, a lot of efforts that's done in the sites, and especially years like this when we have this extremely tight component market. Really impressive to see these numbers as I see it. Also, very glad that we could see that the profit after tax came with us. You should know that our profit after financial items. When the currency, Swedish currency loses or loses in strength to U.S. dollar and euro, we also lose some money on that conversion.
That has also been a bit reducing this number. Q4, very, very good numbers all through the P&L. We also see that our cash flow came in positive, that this is a number that we have been talking a little bit about in this year, that it has been weak. We're still not where I want it to be, SEK 39 million in cash flow with an SEK 83 million or SEK 99 million in profit after tax, that's a bit weak. Should note that the growth is eating cash flow. That's just how the nature of the game. We will see that our cash flow will be a bit constrained also going forward as long as the growth is there.
I believe that our stock buildup has ended, so we will see much better cash flows for this year than if it comes in Q1. It's very tricky to say. It's a bit of lagging effects. We know you have quite long payment terms, both to customers and to suppliers, and how that will affect the cash flow is always tricky to give a guidance on. For the year, we expect the cash flow to be a lot better than the SEK 2 million we did operational this year, of course. It's very important because we are still looking at acquisitions. We're looking at continuing our heavy investment plan for capacity improvements and efficiency gains.
We need the cash flow to continue to invest in the business and also to invest in acquisitions. For us, this is a really important number. It may sound that we are a bit reluctant and that we're a bit, yeah, we don't really care about it. We don't talk so much about it, but this is what is financing our growth, so it's really, really important. Therefore, it's good to see that it turning into black numbers and so on. If you look at the year, 39% growth. I remember last year, I think we had 41% for the year, if I recall it right, and everyone said, "You cannot repeat this." We didn't, but we were very close to it, to doing it. Yet another fantastic year.
It's amazing that we could reach it, this number. In this number, of course, we have some effect of both the weak currency and also that we have been selling some spot purchase material, which we call extraordinary material costs that we have invoiced over to our customers. Still, if we exclude those two items, we're still at just shy of 30%, which is still, in my opinion, a quite impressive number. We're really eager to see how this will take us going forward. Not so much to say, we ended the year at SEK 345 million in operating profit, 9.3%.
We have some one-offs in that number and some other, how should I say, one-off or numbers that we should exclude when we look at the underlying performance. If we look at the underlying profitability, we are up to SEK 372 million, which corresponds to 10.6% if we also exclude extraordinary material sales. If you look at us going forward, I would say that this number is more representative from where we are rather than the reported operating profit. I'm very against reporting one-offs. That's not really what I think we should do because it's, you always have issues. It's very few businesses that you run without having any one-off items.
For those that follow us, we have not reported that in the past. We normally do acquisitions, and we take that cost on our P&L directly because we don't see that it's worth mentioning. Say that an acquisition costs something somewhere around SEK 1 million-3 million in consultancy fees and so on. Normally, we just see that as an operational cost because we believe that this is part of our business. Now, with this customer loss that we saw very late in Q3, we had to report it because it was so significant, and it's something that we rarely do in our business. It's, yeah. This is how it is, and we will see if we have more of those.
If they are what I call negligible, meaning that if it's less than, say, SEK 5 million, we will never report that. That's not relevant in our business. We always have those kind of things. Again, order backlog up 40% for comparable sites. I think that's also impressive. We're starting to see that the industry are reporting that the order backlog is actually starting to be reduced. We don't see that in our order books. I said that we will start to see it when the delivery times on semiconductors becomes shorter, then our customers will start to reduce their order backlog in length.
Our industry will also see this, but so far we have not seen it, and therefore, we take this order backlog, we try to transform it into something that we believe in. That's why we always guide, and we often guide a bit under our order book value. We know that it's, it can be some late changes of orders when we come closer to that. If we look at our sales numbers, we have a pretty good picture of at least Q1 to Q3. If we get a hold of all the material, we could quite detailed say exactly what, where we would reach. We are confident that we will reach SEK 1 billion in Q1. For those that follows us, you know that we are often growing sales over the year.
If we look at last year, we started with, I think, SEK 820 million or so in Q1 and ended at SEK 1.04 billion. Of course, we had an acquisition, but we had that in 2021. We are also quite hopeful that we will reach some kind of acquisitions also during this year. When we do, we will come back to you on that one. Yeah, we see optimistic about upon the year. I will come back to the guidance later. Looking at our segments, rest of the world, China and Estonia, we ended the year at 7.6%, a bit down from last year.
We had some one-offs that we carried with us from the first quarter that we reported on why the margins were very low in Q1. I think we reported 3%-4% in Q1 for rest of the world, we have carried that deviation with us throughout the year. Western Europe, 10.7%. It's amazingly 11% on underlying OP. I think that's really strong and proves that what we have done when it comes to efficiencies and the way we think about multi-sites in our strong markets, I think that strategy really pays off. We're really pleased to see that all our four sites in Sweden are growing fantastically, and all sites are also improving the profitability year-over-year.
The investments and the activities we do in this area is really pleasing to see. We see Finland starting to come back, or come back. We had one year that was a bit weaker in 2020, and then we have seen growth 2021 and 2022. We are also seeing that we expect that growth to continue. Estonia, fantastic year. I think I come back to that, but 55% growth or something extremely good. Then we should remember that there is some currency effect of maybe 7% for that. Yeah, really impressive. Moving over to our segments. Last year, if you remember, we had a fantastic growth in Green Tech. I think Q4, we reported 180% growth in this area. Again, that number is a bit tricky to beat.
We should know that in especially U.K., we have seen a slowdown of EV charging units for the year. We saw Q4 last year and Q1 this year really strong. The U.K. government took away the governmental grants for installing these units, and after that, the market has still not recovered in a good way. We believe that the position we have is really strong, so we do expect that the market will pick up and that our sales will pick up very good when that happens. We also have a few new projects there that are really interesting that were delayed over year-end, they will come back in the first half of this year. Green Tech, yeah, a bit pessimistic for the quarter.
For the long run, we have fantastic corporations. We're ramping up heavily with, for example, Ferroamp, Green Tech company here in Sweden. I believe that their sales is enormous at the moment, so we will see about their quarterly report. Med Tech, I've talked about it for many times now. We now actually reached 100% growth. I said +50%, the quarter was even stronger. A lot of lagging effects here. Some component shortages that have been hard to solve that has been delaying the sales increase of this segment. That also means that for the coming quarters, we believe that we will have a really strong growth numbers for Med Tech.
They were pushed down for the first three quarters in 2022, the comparable numbers will be really favorable for us in this segment. Strong growth are expected in this segment. Communication, yeah, we have talked about it before. Some new wins, strong demand, but we also see that 2020 and 2021 were quite weak years in this field. These strong numbers with almost 80%, I don't expect this segment to be at that number for next year, but we'll still see growth. Industrial, our fantastic backbone for our business. A lot of different customers, a lot of different underlying segments. Really strong growth again. Fantastic. We're pleased to see that this segment are continuing to deliver these fantastic numbers.
If you look forward, sometimes we believe that, okay, Industrial will be starting to become lower in importance for the group, but still we deliver these strong numbers. It actually it balance out the growth in the other segments. Again, if you look at this, we have four segments where the weakest one have 18% growth. There we know that we have some trends that have been really unfavorable for our quarter. I'm really, really pleased to see these strong numbers, and I still believe that it's the balance between the segments that are our biggest strength. This comes from that we have very low single customer dependency. I've said it before, but our largest customer is roughly 6% of our sales.
That's many companies in our industries, they have one customer dependencies, and it can go up to maybe 40%-45%. For those companies, if that customer would have entered the same problems that we have seen for the EV chargers in UK, for example, then that company would have lost significantly. For us, we can still deliver really strong growth numbers, even though one of our biggest segments in one big market has been suffering. I think the, what do you call it? The all the different customers and the different segments that we can grow this well in all is that is what I believe is our strength. We will see that going forward. The full pictures is the strength. I don't want to highlight any one of those.
Some operational highlights. We talk about it, quality and delivery performance. Top class, I would say. We got our customer satisfaction index continue to grow, really strong number. Order intake continues to grow. We have some, we call it timing considerations. I think that's a very vague terminology, but what I mean with that is that a lot of our customers that we win, we have a startup time of maybe 6- 12, 15 months. That means that we may get the order, but we may get orders in the Q4 that we will actually deliver in Q1 2024. That's how long time it takes given the complexity of the component market. We believe that it might be shorter, and then we will see steeper growth in the second half of the year.
We still, we are placing the orders when we believe we get components and together with the customers. Some timing consideration, which is why we are guiding lower than the order intake support us and the order backlog is telling us. Again, some numbers. Sweden, really strong. China, 31% domestic customer, but we also have quite a significant part of this is actually currency growth. I would say it's half of the growth. I don't remember the number in the back of my head. Estonia, 50% also, but I think here we have 7% currency growth. Still, really strong numbers. Yeah. Our CapEx reached another record year last year. If I recall it right, it was just below SEK 80 million invested in new equipment.
We have a plan to invest more in 2023. We are growing. We need more capacity. We are a bigger company, meaning that we have more sites to support. This is in, it will continue to grow as long as we continue to grow. I think here is one of our strengths. We are using CapEx to reduce the labor content of our products. For me, this is a given. This is how we should run business. I know that others are still running with quite old equipment because they are still functioning. We are investing in new equipment, even if we are having equipment that works because we believe it's more efficient. We always look at this, how can we become better?
One number that I often try to mention is that during the last 4 years, we have tripled the company in size, and during that time, we have increased the headcount with 40%. We have increased the headcount with 40%. That includes also acquisitions. Really pleasing to see. For those that missed it, we acquired our property in Torsby. It's not more than that. We believe it's easier to extend the building when we own it. We were the municipality's largest tenant or what you call it. We had long discussions with them how to develop the site, and we believe that this is better for both parties.
Also this is also to support future growth in this site. Yeah. What should we say more? Yeah, our return on operating capital is something I often get the question of. It's now up to 25%. This number will, in my opinion, continue to grow when we see that the balance between supply and demand is getting more in sync. We also see that increased profitability will, of course, drive this number up. Funny, when we had this as one of our objectives, no one asked about it, and everyone asked about our operating profit. Now, when we don't have this as one of our key objectives, now everyone asked about it, therefore, we try to highlight it a bit.
Also good equity, 40%. I think our target is to have at least 30. I think 40 is a better number. It gives us flexibility. It gives us strength. It gives us a good, solid relation with the bank. We also see that we have enough cash to run the business. It's very important and give us flexibility and room to maneuver. A few words about Herrljunga. It's one of these fantastic stories. We thought they were gonna do around SEK 140 million in sales for the year. They did SEK 154 for the second half of the year when we owned it. You can say how, what will happen in the future.
I think that when we took over them, they get a little bit more access to material and so on, so we could close some of the supply gaps they had, so. I think the run rate is going to be a little lower than what we had in the second half, but significantly higher than what we thought they were gonna be. Yeah. That's where we are. Outlook. What should we say about that? There's always, you can stand here and say, all this, the mega trends. You have the component shortages, we have the inflation, we have the weak Swedish currency and all that. I still believe that this will be a really strong year for Note.
If we exclude all these negative surrounding areas, I think our operations still look as good at, as it has the last two years. Our new wins when it comes to customers were at a record level, I think were 25% higher than our second-best year, which was in 2021. We know that there's a lot of new customers that we have in our pipeline that will start to be implemented in the, in the coming year. That quantities are going to add up to what we see. Despite all the challenges we see, and I know that everyone perceives that NOTE as an EMS should have a really high dependency on how the world economy goes. We don't see that at the moment. When I look into the books, it looks really, really solid.
You start to read about what all other companies are saying, then you get a little bit cautious with what you say. It's, we don't see that. We see, yeah, fantastic. With this, we have guided with the statement that we should reach SEK 1 billion also for the Q1. Q1 last year were a bit over SEK 800 million, this corresponds to 25% growth. For the full year, we guide at SEK 4 billion, that would correspond to some 8%. We should also remember that we had about 5% of the sales, this year are actually our extraordinary material costs, we expect that that will actually start to go down a little bit this year.
It will not disappear, but maybe it's going to be half that number or something, if I would just take a number from the back of my head. We also believe that we are where we want to be when it comes to margin development. We had a lot of discussions about this of the second quarter and third quarter last year. We tried to make this picture more clear to everyone that follows us that we, even though the reported numbers were a little bit below expectations, the underlying numbers were actually above expectations. We will see where this leaves us for the year, but we believe that we are in a positive earning trend, and we expect that to continue for 2023 as well.
Yeah, of course, this puts us in a really good position to reach our long-term objectives that are SEK 5 billion at least in 2025 and to reach 10% in operating margin at latest in 2025. I got some questions that, underlying you are already above that target. I still say what I said then, that I will come back to this to where we expect us to be when we are at the 10% for a full 12-month period on a reported number. Yes, we are expecting that the number will be strong for this year and that we will improve the under or the profit both in terms of money and in terms of percentage. Yeah.
I've talked about these slides many times before, but what we see is that we try to, with these dotted lines, show where we would have been without these effects, and we are at almost SEK 3.7 billion. Underlying, it's SEK 3.5 billion, still really good. Operating margins, we are at 9.3% reported, and I think that we also, if we exclude that SEK 50 million in write-off, we are over at 9.6% or something like that. Really, really strong numbers also if we look at the reported numbers. Long-term trends, electronic manufacturing in Europe really, really growing. 7%-10% is the latest information I saw. I listened to, I think it was Infront, had some capital market data.
They were talking 6%-8%. You can basically pick a number, but all the numbers we see are around twice as high as they were about two, three years ago, when China was a more important part of the supply chain into the Industrial customers in our, in Europe. I still believe that this is really going to be strong for Europe. This also puts in place if we talk about acquisitions, where do we want to become stronger? I mean, Europe is a really good place to be. We still see that U.S. are an area where we get a lot of questions if we can put something up there that would be favorable.
Again, I'm, as you know, it's much more tricky to run an operation that is further away from your home office. It's easy to run a business in Nordics. We're very close to it. We understand the business climate. U.S. is a bit more tricky than it's more that we have to be more relying on the local management to be really strong in also strategic positioning and so on. Sooner or later, we will be there. I think that's that's not an a bold statement as I see it. Yeah.
We believe that this is, we will continue on these trends, as you see, there are some swings up and down also on both on sales and profitability, even if the curves look very positive. I believe that we will see that we will have quarters that are a bit weaker, we will have quarters that are a bit stronger, the trend going forward is still going to point in the right direction. We will see how far we get on that. I would not be surprised if we reach the 10% in operating profit this year, if I put it like that. I think I end my presentation there.
For those that are on the web, please send in your questions, I've got two questions here. For those that are in the room, we will have a microphone circulated. I start with the questions I've got from the web here. I've got from Tor Egil: What about energy costs bringing in Europe versus other places? Yeah. Energy is one area that is really, how should I say, problematic. We're not one of those companies that are using a lot of energy. If I recall it right, we are using maybe 10 million kWh . I think that normally it's a cost of roughly SEK 10 million. This year, it will be higher, not significantly.
Even if this number would double, it will cost us some money, but it's not going to be Something that will tip us over into some kind of negative result development. Of course, energy cost is something we put a lot of effort in. I would not be surprised if we start to see solar panels and so on on our, on our buildings. That is something that we have in our plan to do. We are not alone, so there's lead times also on those kind of investments, if I put it like that. I believe that trying to be if you can produce your energy by yourself, that's gonna be a very good investment over time. That's how I see it. We have a question from Alvin.
What's the main reason behind the discrepancy in operating margin between Western Europe and rest of the world? Could we expect operating margin for rest of the world to rise with time? Very good question. Normally, we run a bit higher volumes in our rest of the world units. They are set up for that. That means also that we have a lower material margin, so we have less money to work with after we have, so to say, taken away the material. I don't expect that rest of the world will reach Western Europe margins. I expect them to be a few % lower, but I expect both areas to continue to improve. That's how I see it. We have from Philip.
Do you see any risk of oversupply on the EMS market since almost every EMS is investing heavily? Currently, I would say no, I don't see that as a risk. I would say that the market is still in balance, or I would almost say that there's a relative undersupply at the moment. It's also very expensive to build such sets to set up a new, a new factory. My view is that the situation we have today, it will be fairly well-balanced for at least three to five years to come. That would be my best assumption. This has actually became, I would say the balance is actually more favorable for the manufacturers than the customers at the moment, and that has also changed over the last, say, two, three years.
If I would grade it's more in the process of becoming more favorable than less favorable for a manufacturer. If the economy slows down a little bit, it might become more balanced. I guess that if the economy slows down, it will be a short slowdown, and then it will bounce back. That's how I see it. A question from Carl. Please discuss how much your increased production capacity could lead to attracting new, bigger customers. Is there a potential inflection point? Yes, I think that our capacity is well-balanced. We have, for example, in Torsby, which is our largest site, together with Norrtälje, we have in Torsby, we have three quite brand-new lines. Everyone is set up to be fast and set up, but also have high capacity.
Norrtälje, we have one new line. We get the second new line coming in in, I think, week five, so this week or next. We have capacity in those two sites that will be sufficient for the next year at least, potentially two years. We can probably do almost SEK 1 billion in Torsby supporting, supported from these three lines. I think we have plenty capacity and those lines are very fast. We could almost do handle units and be competitive if you put it like that, which is the most margin-squeezed business in the world in the EMS area. We're not focusing on those customers, but just as a reference.
We believe that the capacity and capability are in place to have larger and customers and longer series and still be competitive. Yes. We have from Staffan. How far in the future do you see demand still being strong? Would you say 30%-40% growth is sustainable for the years to come? I think 30%-40% is very high. We need some acquisitions to reach that number. We don't see that the market is slowing down. We have had a few very strong years. If we can continue with the, say, 40% growth, I think that would be a stretch. I still believe that we will outgrow the industry. I still believe we will have very good growth, 30%-40% is a high number.
Let me put it like this. Let's close Q1, and we get back to you and see where we are heading for the year. We expect the year to be strong. We have from Peter Hermanrud. There was a large merger of Nordic EMS peers in Q4. Will this have a strategic implication for NOTE? Very hard to say. We haven't seen it yet. I would say the effect will be marginal. Both of these two, should I say, colleagues or competitors were still there before they merged, so the difference is very slim. So I don't see this as something that will affect us, but it's, I think it's a good sign.
It shows that there is a genuine interest for our industry, which has not been the case if you go back some five, six years. This is actually good that there is big players that are entering the market, and there is big players that are acquiring each other that will strengthen the industry as such. I still believe it's good. Yeah. The last question from Turi Gil. Keep up. I would say thank you, and we will. That was the easiest question I got today, thank you for that, Turi Gil. That was the last question I had from the web. Yeah, we have one here.
Thank you. First one on Herrljunga. Is it possible to give a more of a comment on what is driving the strong growth? You mentioned that they got a bit more supply, is it any specific industry or where is the growth coming from?
Very good question. I think Herrljunga has products that are in a fast-growing area. We're not allowed to talk about the customers, but it's the customer has a strong position in the market, so we believe that they are well-positioned to have very strong numbers. Then again, it's we have to remember that they over-delivered this year, so. I expect it to be a very good year in Herrljunga this year as well. We are looking at investing in more capacity to meet that demand. We are increasing the headcount to meet this demand, so we have high expectations for Herrljunga this year as well.
Okay. On the margin side, I think you mentioned that you should improve the underlying or the margin at least. Could you say anything about that? Do you think you could increase the underlying margin in 2023 versus 2022 or from 10.6%, or is that a stretch?
If I look at our numbers internally, we're of course looking at numbers that I believe is gonna be in that aligned with that or better. Again, it's business has a tendency to always come in with some surprises. If you take those into account, I would say that if we reach that margin for as we reported, I think that would be a good way of looking at it.
Yeah. Agree. Then is the question on the quarter or in the last quarters, you have had quite weak development in the U.K. markets.
Yeah.
I guess is it possible to say something about the margin development in the business in the U.K.? Because I get that should have been at least negative in the fourth quarter compared to if it was performing like last year.
Now it's three sites, and they had very different development. If you look at the 2021, we had extremely good performance in iPRO with the strong sales in the EV market. Q4 this year, we had very good sales from the two other sites, and they were delivering quite significantly higher margins than they did in Q4 last year. I haven't looked at the numbers, so I can't give you a picture, but I would say that my best guess is that we were fairly flat if you take the operating profit in U.K., comparing all the sites together or adding them together, but very mixed picture compared to last year.
Okay. Then is the last one on the Med Tech side. I think that was very nice to see that growth coming, which we have spoken about a lot of times. Can you tell us a bit more, is that sustainable or was there only like one-off effects in the fourth quarter?
No, I think we got one of the large customers. We started up the business there. We came up to the level we should be, and that was one of the customers I've talked about in a few quarters that have been pushed out and pushed out in time. I think they will not go down. They will. That customer specifically will most likely continue to increase. We have growth in several other Med Tech customers. I believe that we will beat the sales in Q4 this year. We will beat that number significantly also in Q4 next year. For the first three quarters, I foresee very good comparable numbers compared to 2022.
Okay. Then just one more, if I may. On the expansion products, I think both in Q4 you announced that you're expanding capacity in Norrtälje.
Yeah.
Also in Torsby now, or you're not saying you're going to expand it, but you buy the plant. I guess that says something about the future at least. Can you give us some more maybe flavor on why you choose to, yeah, expand? Is it some specific customers or is it just the general outlook is quite strong?
I would say Norrtälje we have had, we have had some space constraints over some time. This, we have been in dialogue for about a year until we closed, or we agreed to do this expansion. It, it was, how shall I say, something that we really needed. You should know Norrtälje has also tripled in sales the last three and a half years. It's, so we are a bit running out of space. We have been, as I said before, we have been leasing some external warehouse capacity in Norrtälje just to cope with where we are. This was very needed.
We still believe Norrtälje will continue to grow in a very fast pace also for this year and the years to come. Norrtälje is, we will very soon also grow into this expanded facility, so we will see if we have to do more there. The building is a bit tricky to expand more, so maybe we need second factory if that happens. For Torsby, it's more of a, we see that the growth is strong. We see that our customers there are having very strong, say, 3-5-year outlooks. This is a preparation for future.
If you say we expanded Torsby in 2021 with 2,000 roughly new square meters and to say that we need more one year later, that could be a signal of that we were not very strategic when we did this extension. At that point with the forecasts we had, we saw that this would be sufficient for at least the next five years. Today, we don't see that. If our growth are coming the way we expect, we need more space in maybe two years. It's much easier to build or extend a factory without being or a municipality-owned landlord. We believe it's easier to do by ourselves.
We felt that this was a good move for us, then we have control over the process in a much better way. Of course, Herrljunga, we have a significant growth potential. I think we have. Yeah, if you look at it the way I look at it, we have half the production site is empty. Again, there's some crap standing there, but that is easily removed. That's how normally you handle space. If you have it, you use it. We have a lot of good capacity growth there. Lund is an area where we're looking at how to grow the business more. We are, in my opinion, full in the site, so we need to do something there, but we will get back to you on that.
All these sites have a very good prospect how we, how we grow. Finland, the same. We need to do something there. We are also stretching on our footprint capacity there, so we can cope with it for one or two more years, then we need to have more space. Estonia, we do constant footprint improvements. I was down there last week, and we have capacity to grow. We can grow for the expected growth for this year and also for 2024, then we need more space. If we come to that, to that, we will start to also in the short time frame lease some external warehouses to get more production space internal and so on. There is ways to cope with it, but, yeah.
We need to be expanding in the coming years in most of our sites to cope with the growth, which is a fantastic position to be in. No more questions here. The questions from the web is answered. Some closing remarks. I say, I would put it like this: 2021 was an extraordinary year for us, and 2022, in my opinion, was an even stronger year because we should know that 2020, the COVID year in Sweden was to grow 40% from that is easier than to do that growth from a fantastically strong 2021. In my opinion, I think 2022 was even stronger than 2021. Yeah. What do I expect from 2023?
I expect us to continue on the path we are at. Growth should come in favorable, and margins should continue to grow. The customer dialogues that we have are very optimistic, I expect 2023 to be another year that are building us up to another level. I think the SEK 5 billion mark that we talk about, that's important to reach there. I would be surprised if we're not there earlier than 2025. Margins, we still believe that there's a lot to do. If you look at our internal cost of sales, it declines every year. We grow much faster than our build-up of fixed costs.
That's a very favorable position to be in because then you can be even more aggressive when it comes to pricing to your customers and still increase margin. I believe that we are where we want to be. We have a strong team, we have strong sites, and we are getting a lot of appreciation from our customers. Yeah, very pleased where we are, and I'm really pleased with the numbers that we have been able to present today. Thank you, everyone, for listening.