Hello, everyone, very welcome to NOTE's First Quarter Report. I hope that everyone have received the report and read it, we can start with saying that it actually came in a little bit stronger than we had expected, which is very pleasing, of course. I hope that everyone has been able to call in and found the details. If you have the information that is hard to find and hard to log in, please let us know because we are running this as our standard setup, and we have we've done it for a few quarters here. Looking at the numbers, our sales came in stronger than expected, 17% growth. Everything is organic. We had about 2% of the growth is, is currency, and the rest is, is pure growth.
We can also see that we tried to quantify the Corona effect, how much we lost in a quarter, and it's about SEK 20 million. Majority of it is, of course, China. The extended stop in China took some time to or affected the sales. We also had some delays due to late components that were manufactured in China, and we lost that sales in the first quarter, but we expect to catch up going forward. Our order backlog increased to SEK 22 million, or 22%. It's also a record. We can say it's the, it's the strongest order backlog we have ever had. Our operating profit continued to increase, 24% up.
Here, we also see some effect of the Corona. If we would combine the lost profit with the lost sales and look at that in percentage, we would have reached around 7.3% in the quarter. We're continuing to strengthen our underlying result from our operations. Yeah, we had the profit after financial items up 13%. The reason why the financial items is a little higher is revaluation of our customer invoices, and that had some effect due to the Swedish krona reduced the value in the later half of the quarter. Profit of the tax, SEK 22 million, up around 12%. I should also comment on our cash flow.
We had a very strong cash flow also in this quarter, SEK 63 million. You can say that basically SEK 30 million of that is. We changed our factoring, our factoring method in Estonia, that had a one-off effect of about SEK 30 million. SEK 33 million, give or take, is from operations. SEK 30 million is from a, from a, from another factoring method in Estonia. Our equity rate is again about 40%. We were at 37% last year, we are far above our target of 30%, our financial position today is really, really strong as we see it. Going into the different regions, we can see that our Western Europe region is continuing to grow faster than our low-cost regions.
23% growth in the quarter, and we also see that the operating profit is continuing to strengthen in, in this region, and we are up to 9.6% in, in Western Europe. For the rest of the world, we are growing with 6%, and this is a little mixed bag. We have Estonia, that are growing with 20-plus percent, and we have China that has had a reduction in the quarter. If we would add in the lost sales of the extending stop from the, from the Corona virus in China, we would have reached around 20% in, in also in, in our low-cost operations. We, we also see that we have good underlying growth in, in this region.
What we are very pleased to say is that our headcount has increased with just about 4%, our sales is up with more than 15% organically over the last year. Our efficiency programs are having the effect that we have expected. Going over to our customer segments, we still have the majority of our sales is in our industrial segment. The industrial segment has grown at the same pace as we have grown in the quarter. The industrial segment remains at 64% of our sales. As I said before, this is a lot of companies, a lot of different markets.
It's, we can say that we could have divided the industrial into maybe 10 subsegments, and we can say that everyone is very scared of that the industrial segment is a weakness when the economy is slowing down. We don't see that because we have so many different customers in here. It's very pleasing to see that our second target area, which is MedTech, is growing very fast in the quarter. We have more than 80% growth in this area, and it has became our second-largest segment in this quarter. We know that we had some delays of our sales in the communication area, so the underlying sales in this area is higher.
Part of the, of the lost sales in, in the Q1 comes from the communication area. If that would have gone out, the communication would still have been our second-largest area. We are very pleased to see that MedTech is growing. As you have seen in some press releases we have done in the last couple of weeks, we are gaining more orders in this area. We expect that the MedTech is continuing to increase in size in, in this second quarter and, and onwards in, in the year. I also would like to mention that everyone asks me, how big is your single customer, dependencies that we have seen in, in this industry? We can say that our largest customer in the quarter stands for less than 6% of our sales.
We have a very, very good spread of, among our customers, and our dependency on one or, or a few customers is very low. That is part, that, I, I think that is why, part of the reason why we see that our sales is continuing to be so high, because we, we, we don't get so hurt if, if one or two customers are, are going down, because that is compensated from other customers. We're very happy with our, our big spread or, the, the large number of, as we see, fairly large customers, and, and that, that gives us a very good strength, and, and it gives us some kind of, how should I say?
Our expectations is that this will limit our, exposure to, slower market effects. Okay. Our highlights in the first quarter, you can say that we, we have a lot of highlights, so it's very hard to, to select which ones, which ones to, to mention. We are very proud of our quality and delivery performance. We, we can say that the delivery performance in the first quarter were, if we would exclude China, because we had since the, since the extended stop in China, caused some, some delays in, in deliveries. If we exclude that, we're still above 96% in average. That is very, very strong, and we get a lot of recognition for this from our customers.
I think this, combined with the, with the high quality performance, is the two most important criteria's for us when we are winning new customers. These are the things that they are looking for, high operational performance. Therefore, it's very pleasing to see that we are continuing to receive awards for best quality or best supplier awards. We, we, we have quite a few of them every year, and this, this one is from our largest customer in China. This has also meant that we have gained quite substantially more business from this customer going forward. If we look at our organic growth, we have yeah, it's, it's a mix between increasing share of wallet from existing customers.
I, I would like to mention our wins, and we don't, we don't quantify it in this, in this presentation, but our wins last year were at a record level. We were up more than 40% from our second-best year ever in wins of new business last year. We can also see that the sales in the first quarter, that 10% of the sales came from customers that we did not have one year ago. This is really, really strong, in my opinion, and this is why we still see our high level of growth. We can also say that our expectation of these customers, that this 10% will continue to increase going forward, because we are in the earlier phase of production and production ramp up here.
We will continue to, to get a good growth out of, out of this group of customers. That, in combination with, with the strong wins that we had last year, and several of those are not yet in production, so that is still yet to come. We, we, we have high expectation of the future. A lot is due to our, our high pace in, in winning new customers and winning more business from existing customers. To me, I think this is, this is a, this is a sign coming from our strong operational performance, combined with our easiness to do business. We are very, we're, we're very easy to get access to as, as management. The sales staff is out and, and working very closely with the customers.
We see that this in, in combination, is providing us with a very strong pipeline of new customers and, and new quotes that are in, in the, in the negotiation process. Our expectation is that even still, the Corona's virus spreading, we still expect that this year will be very strong, also in, in new customer acquisition during the year. This in combination, is, has given us a very strong order backlog, and, and that is something that we expect, that we will see get paid off for, for the quarters to come. If you look at our operating margin, 7%, it's, it's the strongest Q1 ever. As we've mentioned before, we had some negative effects of, of the, of the virus, but still, it's a very strong quarter.
We also see that Western Europe is at record levels. A lot comes from the continued growth. It's easier to earn more money when you grow. Also, it comes from our efficiency progress in China and Estonia. Estonia had its best quarter in several years in the first quarter. We have worked a lot with efficiencies there. Also, China, if we look at March isolated, it was a very, very strong March in China. We are seeing the effects. We have high expectations going forward through the year. Our return on our capital remains to be on the target level, 20%. We're just a little bit above it. Yeah, 20%.
Our CapEx plan, we have a strong CapEx, CapEx plan for the year. We are, we are growing, we are extending our factories, and we need more machines to produce the capacity that we need for the new customers. We talked a lot last year about our inventories. We, we had a big buildup of inventories in the, in the first half of 2019. If we look at the inventory today, we see that it's fairly well-balanced. We are at an inventory turnover of just above four. In our industry, with high mix, low volume, we, we believe that four to five is a good level to be at. We are happy to see that we are on the lower end now when the component market is a little bit more tricky.
We see that we have quite good availability. We spend a lot of time, of course, to work with our, with our component sourcing, but it's we see that it's not affecting us so much, and we are meeting our customers' expectations to a very high degree. I think this is the inventory level, combined with strong work from our sourcing teams, both centrally and at all sites, are giving us a good foundation for the growth that we are seeing to come. Also important is that we, we draw our dividend proposal. We did it because we did not see, clearly how this Corona virus would affect our, our industry and our, our factories.
If we look at it today, we have a very strong financial position, we have communicated that we, we, when we see that we are through the virus, we intend to, to evaluate where we are, and if the financial situation allows, we will, we will call for a, for an extra annual general meeting to, to confirm a, a dividend. It's not withdrawn, it's rather postponed. Last bullet here, we have stated before, today we are expecting to cancel the one million shares that we bought back about a year ago. It's subject for the AGM later today. Okay. Future, I think this is maybe the most important question for today's report and for where we are today.
We normally do not guide very, very detailed. We normally would say that we, we, we see that we have a good order backlog, and we have good expectations to reach a good sales, about 10%. With where we are today, I read a lot of reports the last couple of days, and many of our companies out there in the Swedish media are saying that they don't know how to guide for the second quarter, so they'd rather not guide at all. We have taken another approach. We are looking at our order backlog.
We are looking at the speed that we go into the second quarter, and what we see is that we have a strong position, and we are happy to share that with our shareholders and the market, and we expect to have good growth. We ended the first quarter in March with our best month ever in sales, and we go into the second quarter with that speed. We have some negative effects coming from especially Windsor, of course, that are closed. Even if we take in consideration that we expect maybe 50%-60% output from that factory, we still believe that we will reach SEK 500 million in sales, corresponding to maybe 12%-13% in growth.
If we manage to get all our orders out, we will be higher than this, but this is a balanced number that we are, that we are willing to share. We can also say that if we see that we have, that we are below or above this, we will come back with, with, with information during the quarter. We, we think that during these tricky and uncertain times, it's much better to try to be open and guide as much as we can to provide all of you with the information, the best information that we have, so you feel comfortable in, in where we are heading.
We also see that the financial situation that we are in, it's very pleasing to go into one of these crises with strong profitability, strong growth, and also strong financial situation. We know that some of our competitors and colleagues out there are struggling a little bit, and we might see good opportunities to do some structural deals going forward in the quarter and in the year to come. But of course, we are in a strong position as of now. Yeah, so we don't know exactly what will happen with the spreading, but with the impact that we see today, we still believe that we have a good quarter to come.
I got a question here before the meeting: What happens in the second half of the year? It's, of course, very hard to say. If we look at our customer forecast, we, we still see that that is in line with the +10% growth that we expect for the year. It's too far in the future to say, "Okay, we will definitely reach this." We are looking at what happens in a very humble way and try to adjust accordingly. We see also that the second half of the year looks very promising as of today, but we, we come back to that in the second quarter report. This is a slide that we like to, to end all our presentations with.
We see that on the, on the graph to the left, we see that our sales is continuing to increase in a very good way, we are actually closing in on the two billion Swedish mark. We're at 1.83 billion as of now, in the 12-month rolling, and we still see two billion as a reachable target for the year. That is what, where we are aiming at least. If you look at the operating margin, it, it is flatter, we still see that it increases, and we expect that we also will see increases on the, on the, on the profit side going forward. With that, there's not so much more to say, so I open the floor for questions.
This is Thomas Tang from Mediuminvest. First of all, congratulations with yet another great quarter. I have a couple of questions. First, just maybe a small clarification. You say that March, in the, in the month March, you actually were above estimated, above your, your, your budget. That's before-- That's your budget or your, your expected revenue and earnings before any Corona impact, I assume?
No, it's, it's included. We, we can say that March, in, in the, in the month of March, we did not have so much corona effect because China was, was already going with full speed, and Windsor only closed the fact, the production, like April 27th. We maybe lost two, two days in- or, or March 27th. We lost two, three days in Windsor, and, and that was maybe SEK 2, 3 million only. It was a very small, small effect. March was a quite clean month with strong China and Windsor open more or less the full month.
Okay, you were above your expectations that from last year, actually?
Yeah, yeah.
Second, you, you had, yet another great quarter in, in cash flow. When we look at the, the part of your cash flow that comes from working capital, where obviously a couple of years ago, your, your working capital started to increase in share of revenue because of a strained components market, and, and now it has been coming down. Is it now at a, a normalized level? We should expect that the cash flow going forward should not be extraordinarily good, but just follow earnings, more or less?
Yeah, I would say that you are in, in, in some kind of balanced answer, I would say, yes, you are probably correct. We are expecting our inventory turnover to, to gradually continue to improve a bit, but not much. You are correct. We know that the coming quarter and the coming quarters will be a little tricky, so, so we might see deviations from that statement. Yes, we are, we, we have a, a working capital situation that we are fairly pleased with as it is, also without the, the coronavirus spreading.
On your order backlog, it was at 25% higher at year-end, and now it's at 22% higher, which is a very modest decline, all things considered. Any flavor you can give on, on the development would be appreciated. Is it Any flavor on how your, your customers are reacting would be appreciated.
Yeah. Okay, we can say that the reduction from 25 to 22 is mainly coming from effect of one customer. We, we're working with some defense customers, and we, we got a large order about a year ago that we have been producing and selling, and we are getting to the later third of that, of the sales to that customer, and that's why the order backlog is reducing. If we would exclude that order, we would still see that our order backlog is at the same level or, or rather increasing a very small bit. The overall picture is very strong. We can say that there are some shifts in this, and we, we have some MedTech customers that are, are working with the products that are, are getting a positive effect of the, of the virus.
Of course, our MedTech part of our order backlog has increased in share. It also increased already in production, but the share of the order backlog is even stronger than the share it has increased in the sales in the first quarter. Besides that, most of our customers are confirming that their sales to their customers is still at a good level, and they are confirming that they are still seeing positively on the foreseeable future, meaning the next three, four months in their world. We, we expect that we will have a quite good quarter, and given that our customers are not going into more difficulties, we also expect the second half to be at a fairly good level.
Mm.
That's a general picture.
Now you already touched on my next question, which, which is MedTech, where you had the 83% growth, and now you just mentioned that the share of the order backlog increases even more. Maybe you could, could take us through the journey you've been on, on MedTech and, and, and what you expect going forward.
Yeah. It's, we, we started some years ago to, to talk at this as, as a specific target area. We can always discuss if this is a good or bad area to be in. We, we believe it's a good area. One reason is, of course, that it's, if you have been awarded business, it's, it's a business that you can expect to have going forward because all the MedTech production is always surrounded with this regulatory approvals and, and authority approvals. Therefore, it's, it's convenient to be in because you know that it's very difficult to move away from, from. We see that margins are stable.
They're not that much higher than any other segment, but it's, it's good and stable margins, and it's often that customers are very stable in their demand. It's, it's, it gives a good foundation for, for your sales in, in every month that you have a, a bigger part of MedTech. What we did was that we started to get the medical ISO approvals, and, and we started to build up capacity around clean rooms and, and stuff like that, to be able to, to bring in the MedTech customers that we need. This has given a good effect, and we see that we have attracted some new customers. We have attracted more volume from the customers we have, and, yeah, we are still expecting that this segment will continue to increase.
Lastly, you briefly mentioned in your presentation, that you have a, I think your wording was a strong CapEx budget for this year. Could you, could you be more, more concrete on, on your CapEx budget, or maybe give some general rule of thumb about how much capital is needed to, to continue your growth journey?
Yeah, it's this depends a little bit on where we win new customers. What we see is that we need to invest in more SMD capacity. We have a few more machines that are gonna be bought and implemented. We have had a CapEx level the last two years that have been just about SEK 30 million per year. We will be quite much higher than that. Maybe SEK 50 million-SEK 60 million is our expectation for CapEx this year. We are a little hesitant to push the button on all the investments due to the uncertainty in the environment. We are still expecting to be at this level.
I think you have to look at the CapEx level in combination with our headcount. We, we are always looking at what positive effects do we get out of, of more investments, and how can we reduce cost by, by investing more, more, in more efficiency. I think this is, this is something that we have worked a lot with the last 12 to 18 months, and, and we expect even more benefits to come out of these efficiency programs that we are we're using. On the other hand, that those are consuming some of, some CapEx, of course.
All right. Thank you very much. Stay safe, and keep up the, the great work.
Thank you, Thomas. Any other questions? If not, we will close the meeting, and I thank you all for listening, and I hope you're all safe out there and that we are getting through this difficult situation in a good way. Thank you for listening.