Hello, welcome to NOTE's Capital Markets Day. My name is Martin Nilsson, and I will be today's moderator. We are extremely happy that so many of you are here today. In addition to that, this is broadcasted over the web, so we welcome all viewers also there. Today, we have an agenda that looks like this. First, the CEO of NOTE, Mr. Johannes Lind-Widestam, will have a presentation, introduction of the company, but also current trading. We have a presentation by the Managing Director of the Lund factory, Henrik Andersson. Johannes will come back and talk about the financial targets and sustainability targets. In the end, we have a Q&A.
For you here, you will just raise your hand to do an Q&A, and we will answer in the best way we can. If you're looking at it, on the web, you can send your questions, and we will answer them in a orderly way. Once again, welcome to NOTE's Capital Markets Day. The floor is yours.
Thank you, Martin. This is always so interesting. What do you say to an audience like this? It's, as Martin said, an honor to be here and have so many guests here and also on the web. I think last year we had, like, 200 guests on the web. I think it's gonna be similar number this year. What do you want to convey? If you talk about the quarterly report, it's always like, okay, it's a very fixed agenda, you need to say all the right things. Capital Markets Day, this is our day where we can present what we think about the future. We can set the floor for how we want to develop the company going forward.
Last year was the first time we held a Capital Market Day, so this is now we are very well trained in this process, so this is gonna be interesting. Last year, we introduced new targets and new financial and sustainability objectives, and we are confirming them this year. We think we are a bit ahead, I will come back to that, but we did not update them this year. We will probably come back next year with an update and looking at the longer horizon. Today, I will talk, like Martin said, about this, but I will also cover something that I think is missing in many of the Capital Markets Day. What about next year?
Often you talk about the quarter, then you talk about five years ahead, then there is an, how should I say, a blurry journey until you reach the five-year horizon where everything normally is very good. There is a journey to get there as well. I will try to show you a little bit how we think and what will happen in the NOTE picture going forward. For those of you that are also updated, you saw that we also give a guidance today. I will come back a little bit about that and talk about how we think about how we see about the quarter and so on.
Once again, I will start my quarterly reviews stating that this has been a very turbulent year, or I often say it has been yet another turbulent year. Since I started late 2018, we had 2019 was fairly stable. We had the COVID outburst. We had in 2020. When that recovered, we get into freight and semiconductor shortages. When we felt that, okay, now we get a bit out of this, there came a war, and we are seeing what will happen 2023, because it cannot be a smooth year, if you put it like that. We see inflation and increased interest rates. How will that affect us, and so on?
I will come back to all of that, see how that will how we build the picture of the future. It's also like this. We have a lot of the capital that owns NOTE is here. I think we have more than 35%- 40% of the capital is represented only in this room. This is fantastic. Very pleased to have the honor to safeguard your investments and do whatever we can from NOTE to make them grow. Thank you for joining us here. I have to say also we have actually the founder of NOTE is here with us, Erik Stenfors, now CEO of HANZA, one of our colleagues in the industry. Very pleased to see you, Erik, and also your chairman here. Welcome. Okay.
Many of you have seen this. I will go through it anyhow. What you haven't seen is the numbers because they grow every year. Our current trading in the last 12 months is up to SEK 3.5 billion. Last year when I was standing here, we were SEK 2.2 billion. It has been a quite extraordinary development. Employees were 1,400. This is a number that, for those of you that remember, I think we said that we were 1,300 last year. Our growth comes with very little headcount increase, and that is a trick that we will talk a little bit about how we manage costs. This is something that I'm very proud of.
We don't mind growing with headcount. We want to grow with headcount where it's needed, not just because we grow. I will come back to that. We have also added one more site. It's Herrljunga in Sweden. I will also talk more about the acquisitions and how we see upon that. Last year we were nine, now we're 10 sites. Let's see how many we are next year. I hope that we have added at least one more at that time. Profitability, 9.5%, last 12 months reported. If we look at our what we see our underlying profitability, we are higher than that. I will come back to that when we talk about the numbers. 9.5% is, in my opinion, a fairly strong number as reported. Equity, 39%.
We have a target to never be below 30. I think I always want to be above 40, then you know that you have all the room to maneuver when you see opportunities on the market. You can make acquisitions, you can invest if you get new customers and so on. You don't need to consider your depth side. I think strong equity is very important for us, and I will come back to that also. Now we have four sites in Sweden. You can argue, are we too big in Sweden? I would say no. Sweden is a fantastic country to be in, not only to live in, but also to have production in. We will talk a little bit of where we grow. Sweden is growing 30% organically this year, even more last year.
To have four sites in Sweden with that growth, that is not a bad position to be in, as I see it. I will throw out a lot of numbers, so you don't need to remember them. I like Sweden a lot, and we have seen production has came back. I was at Flextronics some 20 years ago. If I would have said that we would invest in new sites in Sweden, they would have said that you're stupid because that was not at all on the agenda. Everything was supposed to move out of Sweden and down to China at that time. Today, I think the wind has changed, and there's a good opportunity to be strong in Sweden. We should not forget the rest of the world because that's even bigger and stronger.
Nevertheless, Estonia, one site, 300 people. This is also a bit extraordinary. When I started, we were 340 in Estonia, we were doing EUR 26 million. Now we're doing above EUR 50 million, we are less headcount there. I will also tell you a little bit about how that has been done. We call it efficiency programs. That's a very fancy word, but I will explain a bit how those are working. Finland, quite small site, 60 people. U.K., we have three sites now. U.K., we have had, U.K. has had a very problematic year as I see it. For those of you that are not so familiar in the broader economy, you can say that they have a shrinking working population.
Brexit came and then COVID came, a lot of the workers that had work permits left, and they were never allowed back. You can say U.K. today has, I heard a number that they have half a million less people working in U.K. today compared to 2020 before the COVID outburst. That's a lot. Say that we would lose in Sweden 200,000-300,000 workers, that would create a big gap in the labor market. Inflation in U.K. is a bit tougher to fight than it's gonna be in the rest of the world. U.K. has, yeah, slightly bigger problems as a country, as I see it. If I look at our sales, this year we will grow in U.K., but not as much as we expected. U.K. is our slowest growing market.
Next year, we have a very good outlook for at least two our sites there. We see demand is coming back there, but a bit more problematic. Sweden, we have not even seen the negative effects of the higher interest rate and inflation. We will see where that takes us. For us, we feel that it's fairly straightforward. China. China, we were also, I think, 360 people when I started, and we're doing not double, but maybe 20% more in sales this year. Fantastic development. Those were not bad performing sites when I took over, but we have done a lot with them to make them even better. This is basically NOTE. What should I talk about now? Okay, how did we get here?
First of all, we were founded in 1999 by Mr. Erik Stenfors here, so thank you for that. We had, like everyone else, we grow through acquisitions. That was how EMS industry was founded. The larger ones, they acquired more sites from customers. We acquired sites from different individual players, so to say. From maybe 95 until 2006, a lot of acquisitions took place for us and for a lot of other companies. Great development for everyone. NOTE had, I don't know how many, but six, seven, eight acquisitions, and we were a group that were turning almost SEK 2 billion, SEK 1.7 billion something is the record year in 2007, if I recall it right, until the financial crisis came, and then a lot of other things happened.
The whole industry were moving into some kind of recession and restructuring phase. A lot of sites were closed. The industry suffered from extremely high overcapacity. A lot of underbids on business were done. Profitability among all the EMS players, say from 2009 until 2013, 2014 was really poor. Luckily, companies like NOTE and others took the opportunity to actually close sites. The capacity went down and were more matching the demand from the customers. I would say already 2015, 2016, we saw that business was not moving out of Sweden and out of Western Europe in the same pace that it had been doing the last two decades. Suddenly, they were gaining some momentum.
Henrik and Lund is a very good example of how this has reflected in our numbers. Wait until Henrik's presentation, and he will show you the story of Lund. Say 2016, 2017, we saw that, okay, now the industry was stabilizing. Margins were starting to come up a little bit. We felt that, okay, this is time to grow. We changed from restructuring, cutting costs, trying to survive until went into some kind of offensive approach. We started to do acquisitions. Our first one was in Windsor. We acquired them in November 2018. We acquired Haddenham, 2021, and this year we acquired Herrljunga. I also have a section about acquisitions and how we think about that, I will just hold that thought until I get there.
Very interesting time, and I think a lot of our colleagues in the industry are seeing the same things. We see acquisitions, we see smaller companies getting absorbed by the larger ones. We see also mergers between quite big companies now also taking place. What I see is that the growth is there for almost everyone in industry, and that allows us and others to have this approach. This is also something that has changed a lot over the last, say, four-five years. What do we do then? That's a very good question. We offer the service of production. How do you define that? What we do is saying we say that everything we do has to contain an electronic board or a PCBA.
We start our processes with production of the electronics. Sometimes we sell the boards as just assembled boards, or in many cases we sell them as finished products or semi-finished products. We call it box build. Sub-assembly or box build is today standing for more than half of our sales or a bigger portion than the PCBA sales. We should also say that in the box build section, we also have PCBAs included because we sell them in the product. If you look at our value add, I would say we have more value add in the PCBA production than in the box build, but we measure it this way. We have about 5% of our sales is some kind of service. Normally, that is NPI, product introductions. Could be...
We scan through the bill of materials to see that if you're an automotive company, for example, that there are selected components that will stand for the durability test that is needed for the temperatures that can be exposed. We also look through so they don't design in old components that we foresee an end of life discussion. That's very tricky for if it's an important component in the construction. All of that is something that we do as an NPI. What we have decided in the past is to not do product development. We call that design. We do NPI, we do volume manufacturing, we do maintenance, and we do aftersales. I also have a customer case.
I will come back a little bit about that and tell you how we can do this if we have large customers that want us to also manage their logistics and the supply chain. That's what we do. We believe this is a good split. You can say that we have moved a bit. Some years we have been 50%- 55% on PCBA. Now we're 50% on the box build and sub-assembly. I like this split. It's 50-50 is a good view what I think is driving profitability in the best way. It's, you need to have both, but you cannot be too large on any one of them as I see it. We like this. Yeah, our vision.
We say we like to combine local presence with global reach, I think that's a very good way of putting it. We say that we have a global footprint. That's a bit of how should I say? It's maybe not the full truth. We are in five countries, four of them are in Northern Europe. Then we have China. We are of course looking at adding more dots on the map, if I put it like that. What I think is important is that to run business, it's easier to do it close to where you have your head office or where you have your staff. If you would buy something in, for example, Brazil, how the hell should we learn that market?
We should put all the trust in that company we buy, and then we just have to hope for the best, basically. We like to grow where we actually can manage it in a good way. We might be a bit, how should I say, defensive in this, in this approach, but I like it. That makes it very easy for our management to run. We have a small head office, but we think we have a good grip of what we do. If we would spread out too thin, it would be a different story. I might end up here saying next year that, "Okay, we bought something in South America and India," but then we have that. You at least know that that was not part of the plan. Let's see where we end up.
We also want to be the obvious choice. This is something that we never talk about it, but we do it in basically every day of our life. We try to be very easy to work with. That's something that I often highlight to our customers that if you want to. If you don't feel that Henrik and his team in Lund are doing a good job, call me and we discuss what to do. Yes, Lund, that never happens, but we have other sites, of course. My point here is that it should be easy to access also management. If we are discussions with how to finance inventory, for example, that's a quite relevant question.
Frida and her team in our finance head office, always happy to get involved in those discussions. That makes us easy to work with. There is not. We don't say no. We just see how can we assist our customers, and we can see that some of our customers has grown a lot due to that we have had this approach. I think that's obvious choice. I think that's a very, very good way of putting it. I heard one of the podcasts talking about the NOTE as being we had so simplistic way of putting it, I think it's good. We make things work, and I think that is what it all comes down to. That's basically where we are on this.
This is NOTE as a company. Let's go into some current trading, a lot of numbers as the ones that follow us knows, we actually made it a bit even more complex now when we were introducing the wording of underlying operating profit. I think this year it was very important. Normal years, you have a bit swings. You can have a few million SEK plus on your currency, a few million SEK loss, it's often is of such small value, so it's, it doesn't add any value to show it. This year has been really different. First of all, we have something called the spot buys. I think that the ones that follow the electronic industry knows what that is. That means that the semiconductors are very hard to get a hold of.
What you have to do is to go to so-called broker companies, and they buy in components, and then they sell it for like 20 times the price we normally pay. We don't buy that and just add it to our cost. If we buy those products, we have asked our customers, "Do you think that it's worth the cost to buy this component, and are you prepared to pay the extra price?" That what we call extraordinary material costs in our reports because we invoice that without any margin. That represents about 5% of our sales this year. We try to be open with that. That means that our sales is roughly 5% too high, but that also dilutes the margin.
If you have 9.5% in margin, take away 5% of your sales, then you have 10%. I believe that those extraordinary material costs will disappear during next year. They will gradually be smaller, and sometime Q3, Q4, we will not even talk about them. This is important to understand, and this was one of the reasons why we felt that to give you the proper picture of how NOTE is performing, you need to understand this. That was very important for us to highlight. What is also challenging this year is that when you have big swings in the currency, that gives us some kind of, how do you say? The conversion effects are quite big. The US dollar has had to gain from like $9.50 - $11.30 in the third quarter.
We lose money on that transition because we buy components in dollar, then we have like 90 days of payment terms and say that the US dollar is SEK 9 when you buy it, and it's SEK 10 when you pay it, then you have a loss in that period. That corresponded after third quarter to SEK 15 million in our books. That's, in my opinion, significant loss. Now we're on the other hand of this. Now we see that the US dollar is getting weaker, so we are actually gaining now. We reported that in our guidance today that we have SEK 6 million in positive numbers in October and November, the US dollar has even got less or weaker today than it was at the end of November.
Today it would be even a higher gain in the fourth quarter. It's also important when you analyze us that you understand that this has an effect. Normal years, very little. If the US dollar fluctuates more, less than 20 Swedish öre compared to the Swedish krona, it doesn't really matter. It's a few SEK million, you will not even see it in the numbers. When you have these big swings, it actually matters when you look at it in a bigger picture. We believe that this year is actually a very strong year, even though I have understood that some of you that follow us have seen it differently. This is why we introduced the term of underlying profit. Clear? Yeah. I think that's worth mentioning.
If you look at this our underlying profitability is actually at our long-term target. It's roughly 10%, 10.2%. Extremely good as I see it, we are very proud of reaching that level. If you look at the next part that we see, cash flow. I think if you look at anyone in the EMS industry and you look at the balance sheets today, they are fully loaded with inventory. We are no different than them. We have our inventory turnover has went from five 1.5 years ago to three. If you add a growth in two years of almost 100%, our inventory has went from maybe SEK 400 million - SEK 1.1 billion.
You can say that, okay, we have an overstock compared to that with roughly SEK 300 million, that has to be financed. That's what you see in our poor cash flow, the inventory buildup. I think that our colleagues are suffering similar inventory buildups. What is good with this number is that we have a quite filled availability of cash. We have not seen any constraints there. Our equity, as you saw, is still almost 40%, also very good as I see it. We have managed this period fairly good. We have also managed two acquisitions in the same period, it has not even put any constraints in how we want to grow business.
We have, I don't know if I should put it as a record, but we have a record high investment pace in 2022, and we had a record investment pace in 2021 as well. We see that we still can run the business as we want to run it, even though we have had this unfortunate inventory buildup. What is good is that if you see it in the longer period, we will have an inventory reduction, and we will soon starting to come back to higher inventory turn numbers. The logic is that we will see quite decent cash flows coming in the quarters to come.
We are, yes, it's a, it's a part that we are not fully pleased with, but we are very happy that we have managed to do this transition or run the operation in the same way without having to put a lot of the strategic objectives on hold. This is also important for us that we have managed to run it this way. A lot of numbers, but those are, in my opinion, the most important. We have an inventory build-up that has been affecting our cash flow. Also, the growth is affecting the cash flow, of course, because you tie up more in your ARs. The overall picture is that we think we're performing fairly well, so we're quite happy with that.
If you look at our margins, because I think this is important. First, sales. If you look at Western Europe, it's very easy, our what do you call it? How we split our sites is quite easy. It's low cost or rest of the world, Estonia and China, then it's the rest, Sweden, Finland, and U.K. If you look at our sales, we're growing with 44% in Western Europe and 35% in rest of the world. I think that's good numbers. Again, we have some effects. We have, like, acquisition and currency, 20% of it, we have the 5% of extraordinary material costs that we have invested.
The underlying growth is somewhere around 20% so far this year. Still, I think that's a good number in a year with a lot of problems on the material. When we reported Q3, we said that we had SEK 200 million of direct delays. That means that we have planned for ship them in the third quarter or earlier, but we had to push them out because we couldn't get the semiconductors. I would say that the number is even higher, but that's how we measure it. We might have moved them already once or twice. A lot of production are scheduled, and we have the 99% of the components in warehouse, and we have the manning, we have the machine capacity to do this, but we couldn't get the last component.
I think that Erik and your team will say the same. This is how the problem the industry have seen this year. We could have done it even better, but still, 20% underlying organic growth is a number I'm very pleased with. Rest of the world, 42%. A bit more currency. I think we had 14% in China and 6% in Estonia. Say that we have 10% of the growth is currency, and then the same, maybe 5% of material. They also have 20% underlying organic growth. Still very good. This year, Estonia grows faster than China. Last year, China grew faster than Estonia, so it's a bit of some lagging effect, if you put it like that. Profitability, yeah.
7.4% in rest of the world. It's a decline from last year. We have seen that we have been a bit slow of increasing the prices to our customers when we have seen the price increases. That has costed us maybe 1% of the profitability in the rest of the world. This is tricky. It's not so easy. It's easier to stand here and say that this is how it should be done and everyone should follow. The customers are not always so happy to get the price increases based on material. It's some kind of you need to massage them a bit until you get them implemented. I would say the Western European sites are better in that process than Estonia and China has been.
I think 7.4% is not bad for a weakest performing segment. I think that's also something to keep in mind that if we go back 4 or 5 years, we was being so happy if we would have made 7.4% as a group. Now we think it's bad. It's a bit of a how you define your, your vision. We can do better, just to be honest. I still believe we can do 10% also in the, in the, in the rest of the world, but it's gonna take 1 or 2 more years than it will do for the, for the Western Europe sites. You also see that the underlying profitability in the Western Europe sites are actually above the 10% target. We are reaching on to 11%. Really, really pleasing to see.
If you slice the cake in another way, looking at the segments, the customer segments. I think ever since I started, some of you in this room are asking, "You're too dependent on your industrial segment." I would say when you look at it like this, I would say, "Yeah, you might be right." You should know in the industrial segment, you have automotive, you have, like, DeLaval cow milking systems, you have ABB, you have Atlas Copco, you have a lot of things. You could split the industrial segment in 10 segments if you want to. We have just said that this makes more sense to put them in this. The Nasdaq governance people think that four-five segments is a proper number to report.
Otherwise, it gets too spread out. We see industrial every product, there are some kind of industrial use, but it could be sliced in another way. Very strong segment. We're very happy to see that it's growing in this way. 42% is something fantastic as I see it. The strongest growth this year we see in communication, 79%. We have to be honest, it also comes from a low level. 2020 and 2021 were quite poor numbers on the communication side. These are like high-speed internet systems that you install in cities, trains, subways, and so on. They were very hard to access those sites during the pandemic. Our customers in this segment had a few quite poor years during the pandemic.
This segment comes from a quite weak position, it's more normalizing the level. Even though I think this is the best year ever, of course, also for this. The growth is seen higher than it actually is in my mind. Half the growth is catching up and half is, as I see, growth. MedTech, it's a segment where I have to be honest there, I've said the last three quarters that I have high expectations of MedTech, we're still only doing 34%. I thought it would be up to 50%. It will be, give me a few more quarters, it will be there. We have so many good programs that are in the process of being implemented. MedTech is an area that I have very strong expectations on.
I can also say that many here thinks that MedTech has higher margins. I would say that they don't. What is good with MedTech, if you produce, is that it's very hard to move. That's the advantage with MedTech. They are basically allergic to changes because all of this is often audited. It might be certified by notifying bodies. You can have FDA registrations, you're not allowed to change one single thing. That means that you will run this program until the product dies. That's why everyone likes MedTech, as I see it. Margins are actually maybe even weaker, you have less changes, and you have very high certainty of what you will produce. Therefore, we and everyone else are thinking that MedTech is so good.
When I look at these segments, we don't see any trend in which segment that makes more profit than anyone else. In the broader picture, you can say that growth in any segment will add similar fall-through and additional profit. That's very good when you run a business. You don't even need to consider which customer that grows. As long as you grow, you will see better profitability. We have Greentech. Last year, Greentech was fantastic. I think we ended like 140% up. Again, iPRO was an acquisition that had a big portion of their sales in the EV charging station. Now they are organic. Last year, we had like acquired growth was like half the % growth.
I will also show a picture of how a company called Charge Amps, their growth, I will show them as a showcase later. Very strong growth in Greentech, and we still expect Greentech to grow fast. We're a bit disappointed with 39% this year. Nevertheless, it's a good segment. You can also say there is quite big differences between the segments. If you say industrial products, normally we do more boards and subassemblies there. In Greentech, we do almost exclusively box build to finished product. Many products that we do in the Greentech segment, we ship to our customers. It's new companies, they don't invest in a production facility, they ship or they use us as their factory, they ship it to their customers.
I often say that when you have a customer that comes to your site, They bring their own customers with them. They say, "Look at our production," then you know that this customer will never move because they feel that you are the production facility for them. We have several of those. Every time I take part of that, I get very pleased. That's where you want to end up with all your customers. You will probably not do that, but for many, you do that. Some highlights for the year. Quality and delivery performance. Ever since I started, I have said this, these are the two most important KPIs that I look at whenever I see the monthly reports. Did we have any quality problems? How much, how many deliveries were delayed?
I had a CEO when I was head of sourcing at Nobel Biocare. We were hitting 99.7% of our order lines on time. She said, "Okay, Johannes, but how many lines did you not ship on time?" She said, "Okay, let's forget about percentage. We will count the number of lines that you did not ship in on time." We're not there yet, but when we are at that level, we will also start to count the number of lines. She said, "There is an unhappy customer behind every single line that you actually missed." That's one way of looking at it.
If you study like logistic literature, you say that, oh, if you go above 95%, 96%, then the cost of every new line that you hit is gonna be too high because then you have to have more capacity, you need to have more inventory and so on. I think that we can do better than 96%. 96% is our target. This year, we are at 92 point something. Still in this market, I think that's something that I'm quite proud of that we can achieve. On the quality side, we are running our business at somewhere between 500 and 600 PPMs. That's also a very good number.
Our customers that are also coming from the automotive industry, they are all of them are saying that if you are below 1,000 PPM as an EMS provider, then you are a world-class supplier from a quality point of view, also for the automotive industry, because one board from us contains maybe 500 - 1,000 components. It's very hard to get everything of that to work as it should. We perform quite well there as well. Order backlog, we have talked about this so many times, but we have actually 50% higher order book when we ended Q3 than we had one year earlier. We have only grown with 45%, there's more order book to go out.
Again, I've also said that the order length is has been extended during this time. That's why we always guide on what we think. We net out what we believe is going to be, the longer order horizon and also what is related to the component shortages that we will not manage to get out. For Q4, we have guided lower, but we have this order book. We still expect that we will end Q4 with an unshipped order backlog that we have confirmed of roughly SEK 200 million. We will not eat anything of that in the fourth quarter. It's a shame. Otherwise, we would have got even higher in sales. From the positive side, we will have that also to work on for next year.
We also have some unhappy customers that have not got the products. Now, I would have to say that the customers has been really supportive in this process. It's not that they don't understand that there is a semiconductor shortages. We chase component together with them. In many cases, we're actually grown much closer to the customers. They understand all these problems. It's still every misdelivery, as my old CEO said, is a miss and unhappy customers. That's also worth keeping in mind. Yeah. I've talked about most of it. Sweden excluding Härnösand, 30%, Western Europe, 20%, China, 20%, Estonia, almost 70%. It's the best year ever in Estonia.
We took away return on operating capital as a KPI last year, so but I, when we had it, no one asked me about it. For three years, we reported it, everyone saying, "Okay, what's your OP? What's your profit margin?" We said last year, we changed it to that we aim for our operating margin. This year, I've had some questions of, "What's your return on operating capital? That's the only thing we look at." I said, "Okay, you should have asked me last year, then we may not have changed it." We report it, and it's in our every quarterly report for those that likes the number. 24, it's the lowest we have had the last year.
It's the reason is, of course, that we tie up a lot of capital in our balance sheet. Yeah, as we said, solid liquidity situation. We have sufficient amount of cash. We can still shoot for our strategic projects. We are having an active acquisition pipeline, as I call it. You can think about what that means until the Q&A comes, and I will answer it. I will get back to that. That's very good to see. Also the balance sheet, as I talked about, 39% is good. We expect to be higher when we end the fourth quarter. Okay. We also guided a bit of this quarter.
Most of this is said. What is important is that today we underline that we are going to reach the SEK 1 billion. For those of you that were here last year, we had guided that week. We then said that we would do 60%, but we ended up at 75%. We will see where we end up. I don't foresee that much, how should I say, air in our guidance. I feel very confident that we will re-reach the SEK 1 billion for the first time. SEK 1 billion it's a lot of money.
We had a discussion at the office and I think Frida said that, "Okay, when I started, we were doing less than a billion." You have to put things in context. Very impressive, I think. We also believe that we will hit the 10% OP margin in this quarter even and without the currency and I saw that some were out stating that we will only do 10%. We expect we will do more because we think the currency is positive, and we did not add that in. We also have the provision that we did for our customer loss that we took some hit for in the Q3, that customers or that business is taken over by another company.
We expect to pull in or put back some of the provision we did. We have promised to get back to that in Q4. We did not put that into our guidance today. There will also be an positive upside on that. Q4 will be a very good quarter as we see it. We also stated that we were well-positioned to achieve the sales level of SEK 5 billion. We will get back to that. These are two charts that we always like to show. The top one is our sales from 2016 until today, and we are trending quite nicely upwards. We, the last two years, we have been about 40% growth if you just add everything in and you just measure it.
When we prepared this presentation, we looked at we were doing SEK 1.874 billion in 2020, and we are aiming at SEK 3.65 billion this year. Almost doubling the company in two years. I think that's just remarkable. When you run a company like this, you don't look at it because you look, okay, what will we do next quarter and next quarter, and how do we gain this customer? How can we get more out of that? And so on. You very rarely sit down and reflect on what you actually do. That's why this presentation is very good also for us that do that because we learn a lot of things that we should learn, but you're so focused on the future, and the past is just behind you.
That's a good reflection, so that's what is hidden behind these numbers. I always stress that profitability, the best way to gain higher profitability, that is to grow. I always tell everyone that follows us that if you have 10% or more organic growth, then it's your responsibility to add better profit margins. If you don't succeed in that, then you're not running the company as good as you could because you have a fixed cost base. I call it a fixed cost capacity for further growth because you have that. If you add too much cost into your P&L, so you don't extend your margin when you grow, then the owners should come back and say, "Hey, guys, you're doing something wrong here.
This is not good enough." You need to be able to capitalize on your fixed assets better than you do. You can have sites that are in, like, steps in your fixed cost build-up. You can have a lost customer in a site, maybe that's gonna, so to say, be some kind of delay in that. If you look at it in longer period of time, you have to have that. I tried to put this in. Why are we constantly growing our margin? Fixed cost capacity or fixed cost expansion or whatever you call it, strong operational performance, I think if you focus on quality, then you get less reworks. That's gonna save you money. If you're always on time with deliveries, then you don't have extra costs to catch up.
You don't have rush freight and so on that you have to carry. You avoid a lot of extra costs. Be good at operational performance, then your profitability will actually come as a given. That's also something important. I also said that I would come back on some efficiency programs, what we mean with that. When I started here, I went over to China and Estonia, and what I saw was that we were running these sites, in my view, as more or less standard setup as you have in low-cost countries. That means that if you have problems, you add people because people are quite cheap. If you look at salaries in Estonia, we're up to maybe EUR 1,500 for an operator. That's not cheap in the long run.
It's cheaper than Sweden, yes. It's too expensive to just add people. We put in place a program where we said that if a customer goes to Norrtälje, Torsby or Estonia or China, they should see the same type of setup. We have the same type of machines, we have similar automation level in also our local sites. That's why we have avoided to add people in these sites when we have grown. I think that's very important. That's a very important message that even if the cost for automation is higher in relation to this, to the cost base in low-cost countries, but it's still worth the effort.
That's what we have done, and that's what we see in these sites, that we have managed to do this transition in these sites, even though it is low-cost c-sites. That's what I mean with efficiency programs. We had, I think we invested, yeah, EUR 1.5 million in Estonia the first one half year in that, in that program. Extremely well done. We cut out maybe 30 heads in our setup. Then when we grew, we have not had to add people because we have built on that culture that we created in this program, so they are running a lot of efficiencies internally. That's what we see in the P&L today and why we don't see that the headcount has gone up. Same with China.
When I went down there, they were running two new SMD lines and two old ones. They were over 15-years-old, they were so proud that they could run these machines. After that, we sat down in the conference room, I said, "Okay, can you show me the output from the new lines and the old lines?" They were starting to put together some sheets, and then they said, "Yeah, we run 92% of the volume comes from the two new sites and 8% from the two old sites or two old lines." We agreed that if we can cut the setup time in half for the new lines, we could add all the capacity from the two old lines into the two new lines, and we could make 20 people redundant per shift.
We could add 40 people into the business that we could free up for running these old machines because they're very tricky to run. That's also something that never run your old machines too long because that even though it's a sign that you're a very good you have technical skills, but it could cost you a lot more than you think, even if they are fully depreciated. I said, "Throw them out. Whenever you need a third line, we will buy it." Now we put a new line in last year, so now they have three lines, and we have a lot of spare capacity, and the SMD is fantastic there. It has the highest placement rate per hour than all of our sites in the group. Extremely pleasing to see. That's what I mean with efficiency program. It's not just a fancy word.
We have done a lot of underlying things that have been supporting our P&L. Henrik will tell you a lot about machine upgrades when we talk about Lund, so I will soon let him in. Also, if you look at the mega trends, why I think that NOTE is in a position where we should continue to grow. It's easy to say, "Okay, we have done almost doubling the business in two years. We should just continue." There is a lot of things that actually supports that. If you look at the long-term trend, I've been in and out of this industry for more than 20 years, so I've seen all the numbers.
In the 2000s, the first 10 years, we were looking at 1%-3% growth on electronic manufacturing in the world. A lot of that growth were in China, the rest of the world basically lost. We came into the 2010 century, we talked about 2%-4%, sometimes 3%-5% growth. Now we actually see that a lot of the service that are done they are looking at European EMS production will grow 7%-10% year-over-year for from 2020 to 2030. 2020 was a loss, now it's even more to catch up. We see this.
A lot of new business is being introduced in Europe, We believe that this is driving our sales. You can look at any of our colleagues in the industry, basically all of them are growing 5%-10% year-over-year. It's not because everyone is taking market share from everyone, it's because the market is growing. I would say 5%-7%, then you're just barely keeping up with the industry. 7% or more, my guess is that you take market share. I still don't believe that we are at 10%, so hopefully we'll get there, then we will grow even faster, or the industry will. Yeah. Outsourcing trend.
Many of the new companies that are starting the business, they will not start factories, they will buy complete products. That's just how the industry goes. There is a word called reshoring. I don't know who invented it because it's not a very good word. That means that everyone expects that the industry will start to bring back production closer to the main markets and closer to the assembly units. There is a trend of that because today political, different political environment has became a problem for many. Take the automotive industry in the early phases of COVID. You could do your, yeah, your bumper in Italy, and then you knew that you couldn't get anything out for three months. You had this just-in-time flows.
Your production line stopped 24 hours after they closed the factories due to COVID. That became a big problem. Now everyone look also about how do we ensure that our supply chain are managed in some kind of similar political region. Now you can say that European Union has to be treated as a political region, otherwise it would be very tricky. China, for example, for those of you that have own companies where they have had a big footprint in, for example, Shanghai, you have had some issues in hitting your numbers because Shanghai has been forced into lockdowns, not once or twice, but maybe 5x, 6 x. Those lockdowns has been going on for month, not just a few days or a week. Shanghai has been the worst region in China.
That's also something to keep in mind. When I talk with our management teams or the customers, they look at how do we ensure that we don't get in here. Political re-regions are also important when you assess where to put production, and also to keep your supply chain short. Doesn't matter if we produce in Sweden, if all our components are coming from Shanghai, then we have the same problem. That is something you can work a little bit around with inventories. Then we have something that is very often you forget, is sustainability.
Today, if you want to market a product that are good for the environment, if you have produced it in China, you air freight it to Sweden, and you make it in a factory where you don't know if there is child labor and so on. If that pops up, your product is dead. You need to also consider how do you take your social responsibility, and how do we ensure that we as a producer can stand up for our customers, say, "If you put your products at our end, we will ensure you that we don't do mistakes here." That was one of the reasons why we introduce sustainability targets last year. I will also update you on them when we get to that.
This is also driving production back to Europe because freights is something that many companies are looking at negatively. Okay. This was my last slide of the introduction. As you see, I can speak forever, so I will hand over to Henrik, and we will listen a little bit about Lund.
Thank you. I'm gonna talk a little bit about Norrtälje. South of Sweden, we have this site. It's a total number of employees of 125 people. We have 5,000 sq ft in meters in the main building, and then we have additional 2,700. We have all the standard processes for contract manufacturing, like SMD, selective soldering, through hole devices, box build, potting, coating, press fit, and a system for traceability, warehousing, et cetera. We are working with dedicated teams for new product to the customers, so they feel very committed. We have the after-sales services for spare parts and repairs, as Johannes presented earlier. Our split is very similar to the group.
It's 45% PCBAs and 50% box builds, 5% services. We have the certificates of ISO 9000, 14000 and 45000. Standards we are working with is, for example, it's very customer adapted, so it's ATEX for explosive things and UL in metro, et cetera. This can be different, based on what products you do and or where in the world you produce them. A little bit about the history. The company was founded in 1988. It was acquired by NOTE in 2002, as presented earlier. It has a quite long history, I will take big drafts here so to understand the history.
In 2009, it was a little bit, it was a trend to move production to low-cost regions and the low-cost site, as Johannes presented earlier, we produced, moved a lot to them in NOTE. We moved over 200 products in 2009. In 2011, we did a major reorganization where we focused more on small business, prototypes, and then also to trade these products that were produced in the low-cost regions. We did that for several years. A lot of customer support for production. In 2016, we decided to focus more on the local production and expand that in the building.
We had a big building with 5,000 square meters, so we have a lot of room. Then we started to work and focus on that, so we have invested a lot since then. We started 2017 with, yeah, grade up the existing machinery, you can say. We switched out the assembly machines to newer ones and started to move production into the facility again. In parallel with that, we won new businesses here in this region and started to grow. It was a success, we continued invest a lot. Very much different things, but personnel is one important that was, we were down to around 23 people in 2016, at the lowest count on the company.
We started to hire, and now we're up to 125, so it's quite a long journey to find all these people and train them to our industry. After we switched to new machine, then we needed more machines, so we need to reconstruct the production area and focus on different locations and try to find usage of every square meter. That's what we have done since then in different areas. We have invested more than SEK 30 million in machinery over until now, 2022. Last 12 months, we have invoiced out SEK 397 million. This year, we predict to reach SEK 400 million. We started, as you see, in line with the timetable we looked at.
Here you also see the split where we the blue in the diagram is the local production in Lund, and then we have the trade, as I talked about, in orange. The share is less and less of the trade. We still have some, but not as much anymore. To continue to grow in this rate, we see that we need to focus on continue invest in automation based on what the customer demand is, and find the best solution to be competitive. We have also in this journey added area of 2,700 square meters. That's very important to have space to work with.
We have an experienced management team and employees. We continue that all the time to train and educate new people coming in, learning this. Very high focus on automation where we can. We find ways with machinery to do things faster. We can also utilize the personnel better, so we don't need to train as many. This gives very much efficiency improvements and a focus on keeping it on the right cost level to our customers. Yeah, quality and delivery is very important things for us, and we keep a good level in Lund. We have been stable on that. On the OP margin side, we have had some challenges this year.
We actually reached for a little bit higher turnover as well, due to the market situation on material, we couldn't reach it fully, and it also impacted a little bit on our OP. Within 12 months, we are back on the... in line with the group on those. I have finally a few pictures, just to show a little bit how it looks like. Up on the left side, you have SMD line, complete, full assembly and reflow. We have four complete of those lines in the Lund facility. We have selective soldering in the upper right corner, which we have 4 of those machines as well. 10 nozzles going all the time to solder components.
We have automated warehouse handling towers, which pick out components by automated, so we don't need operators to go and find components and count and so on. We have two coating lines, very well used. Example of that in the right down corner. Thank you.
Okay. Before we move into the financial and sustainability run-through by Johannes, I'll ask you to come up on stage. I will just run a couple of questions from the web before the official Q&A sessions that we will have in the end, as I said. I imagine that your industry, you have to be flexible, and that's what I learn in life too. I hope that's okay. The first question is to Johannes. How do you look at the next year, 2023? We see here in the Lund presentation a fantastic growth trajectory. How do you view that with the current situation, geopolitical risk, et cetera, in the world?
I think I was a bit. I answered it partly earlier on, but I look very optimistic about 2023. It's a year where I believe that the market will be a little bit slower. I think that the component shortages will clear up quite nicely. That means that we will have the opportunity to get all the delayed programs out and also start up production for the programs that we have not yet been able to start up. I will show you a little bit how much annual value that we have won the last two years and how many programs that we are trying to get into production. I'm very optimistic of 2023, and I think that it can surprise us positively, in my opinion.
The next question is also to you. You already mentioned this, but are you expecting that the semiconductor shortages is going to ease in the coming years that we have seen over the last years?
Our new head of sourcing has promised me that first of January it's over. No, just kidding. This is a very tricky question to answer. I've said it now two quarters in a row that I foresee that in the next six months it will ease up, and I believe it should. I will touch. You can put it like this, that this shortage is a bit different than what anyone we have seen in the past, where the electronic industry is struggling on component side every, like, five to 10th year, but in different areas. Now it's semiconductors. This year it has been, or this time it has been quite long, that means that the, some kind of parallel business modules are being introduced.
We have these broker companies, and they are, they're a nightmare for us and also for the producers because now you see that these small companies, often one to five people, they're buying up all the inventory they can get. They suck up the extra capacity that there is, and then they sit on it until it becomes a big under supply, and then they ship it out for 20 times the price. Those companies are earning a lot of money, and the same day that there is a balance between supply and demand, then their business model is done. They cannot sell one single product because we would not like to buy one single product from them and no one else.
It's very tricky, and since this has been going on for almost two years now, these small companies have earned a lot of money, so they have a lot of money to put into the warehouses. They are doing this, and they are destroying for the rest of us. It's, it's really frustrating to see, but I'm convinced that this will come to an end during 2023. It's just a matter of when. We have seen that for some areas, for some producer, the allocation that we, that is the industry term for it, is over. We have seen the ease up of some component types, but not for all. I'm convinced that 2023 is the year where the semiconductor shortages will be gone in total or to a very high level.
Great. The next question.
Now you know where you heard it first. No, yes.
I will always remember it.
Yeah.
Next question is to Henrik. Very impressive growth at the Lund factory. What's been the most challenging when it comes to this impressive growth?
Yeah. The biggest challenge I would say is capacity in two different ways. You need to reconstruct the factory at the same time as you need to fill it up with new personnel who needs training, et cetera. Those in combination, I would say.
Next question, is also to Henrik. Do you have the customers and products for the next three coming years, or how do you build up your pipeline?
The pipeline is built up with the longer route it goes, the more is projective of new sales, of course. In close time, 2023 and 2024 are ongoing in some stages. Those. Yes.
Okay. Thank you so much. I will come back after Johannes' next presentations with the financial and sustainability targets.
Thank you. I think as a reflection on Lund growth, when I started at NOTE, I was elected into the board first, and I worked in the board for, what was it, six to eight months until I took over as CEO. Before I actually were elected into the group, I visited Lund. I wanted to see how our factories were looking. Henrik were my host, and we were walking around then. At that time, we had put out a lot of tables in the factory just to make it look like we had something to do. Now we have this factory is completely full, and we have 2,700 square meters in an external building.
Completely full is the wrong wording because we can still fit in what we want, but it's filled up with equipment, with assembly tables. There's people working basically all over. It's a fantastic change. For me that I've seen this transition, it's just great. I'm very pleased that you could join us today, Henrik, and give you this story. Fantastic. Okay. Financial and sustainability targets. I will start with sustainability. I think that's worth mentioning. Last year, we took on two new objectives here, and I will come back to them. Sustainability for me is a lot of more than just what we put in there. We as a company will not, as I call it, save the world, we can do a lot to help the society to do that.
For example, if you look at the sustainable programs that we see, we're actually one of the companies that are having a. If you look at gender neutrality in our board, we are actually more female than male. It's not that we wanted to do that. It's just because that I say we even for the board, even though I'm not involved in that, but I still take some kind of proud in this. We're three female and two guys that are the elected board members. Also, I reflect, when we were preparing this, I also said, okay, we are also 50/50 in our group management team. It's two girls and two guys. Just one year ago, we were four guys.
Also, this has not anything to do with that we wanted to look at this because my view is always that business comes first. We need to be good. This has just became out of that we have appointed the ones that we feel has the best possibility to perform and are helping the company in the best way that we can. Therefore, it was not by plan, it was more a coincidence. Now I can say that, yes, we are fully aligned here as well, which pleases me a lot. We have a lot of fun discussions at the office and also in the board, I think. Also, we can say that our industry is quite amazing.
We are actually more female than male employed, but on a look at the management level, we are maybe 30%-35% female, and the rest are male management. We're more operators there. We have more female than male. Very good gender neutrality as I see it. We have also been part of the UN Global Compact for, like, 15 years or so, and we're one of the first companies in that, and we have always worked very heavily in that direction. We do a lot of things outside this. Last year, we said, okay, let's see, what can we do to make a difference? We also know that our Greentech segment is growing. We have a lot of customers that are putting their products in our hands.
We said, okay, let's make a statement. We should be 100% carbon dioxide neutral by 2022. Actually, 2021 was easier than 2022 because electricity today is hard to buy CO₂ neutral. Our share has actually went down a bit because we cannot get the whole of CO₂ neutral electricity. What we do is that we are buying or we are compensating through CO₂ climate compensation programs that are certified. We often look at the Swedish banks, and we select any of the programs that any one of the four banks are using. Therefore, we feel that if they can do it, then we can do it.
Maybe that's the wrong. We saw the Danske Bank now got a fine for like SEK 20 billion, and then Swedbank has had their problem the last year. Maybe we should rethink, but that was our thinking. Big companies, a lot of people are customers, so we felt that they should know what they do, and they don't want to get smashed on their fingers, so to say. I think this is an area where we are working quite heavily and also to reduce our energy because that's another way to do it. We also know that if you are producing electro-electronic boards, you need ovens because you heat the products. That's simple fact. We will consume energy. We try to reuse the heat.
We heat the buildings with our heat from our ovens and so on. We do a lot of thinking in those areas. I think many of the industries do the same. Here we are, we were actually CO₂ neutral already last year. We will be this year as well. What we do is that we collect how much non-CO₂ neutral energy we have used, and then we compensate for that. We will openly report that. We also said that work environment, that's often a forgotten area. It's easy to say, okay, we have good working conditions in all our sites. We said every site should be ISO 45001 certified by the end of 2022. Here we will not succeed.
One reason is that the two latest acquired sites are not, we also have one more site that will not be ISO 45001 certified. We will have a leftover into 2023, we will ensure that it gets there. What we can say is that China was one of the first sites that were work environment certified, and also Estonia. The ones that are further out, we focus on getting them first. That's how we think about this. In Sweden, you take this for granted that whatever we do, everyone that goes to work should come back healthy. That's just how we think it. It's not the same way if you go to, I'm just throwing out, like, Bangladesh or somewhere. There is less focus on work environment in those countries.
We said we focus on China first, we take the rest. That's a little bit where we are. We have not updated these targets. We will ensure that we reach the ISO 45000 by next year, maybe we will add more dots on the map, we'll have them as leftovers, we'll come back to. That will be work in progress. Going into our financial objectives, I have to say, when we put this up last year, we had guided for SEK 2.5 billion in sales, "Let's double that in four years." We had the 2022, where we do 40% or so in growth. Then the target becomes a little bit pessimistic or less challenging.
You should know that it's always a lot of, how should I say? It's a lot of details around everything. You can say that, yes, 2021 was a fantastic year. Yeah, but we had the 2020 with only 7%. That was, of course, the big COVID year where the economy basically collapsed. We think we had a poor year. We did only 7% of growth, but the industry was quite a lot worse, if I put it like that. In the context, I think 2020 was also a good year compared to where the industry was heading, but we were very unhappy, of course. You can say that, yeah, 2021 was a bit catching up for 2020, but what about 2022 then? It's, yeah.
What we see is that to reach SEK 5 billion in 2025, we need to have 11% year-over-year growth from where we are. If we take away the extraordinary material content, it's 13%. If I look at the last five year, we have done 20% organically. If I feel, is this a stretch target? No. Do I feel confident that we'll reach this target? Yes. I expect that we'll reach it earlier. When we see that we are on the progress to that, we will come back to you and update our targets. Next year is the year where there could be some turbulence. We have had four years of turbulence, so. Very important.
Profitability, I had some question before we went in here by, I don't remember who it was saying, if you say 10% in three years, you are reporting that you are at 10.2% underlying. Yes, that's how we see it. We are feeling that we also feel confident that we will reach the 10% margin. We believe we'll reach it earlier. We also want to see that in the reported number that we get there before we say, "Okay, we will be at a higher level." If you ask me, yes, I will of course believe that we will reach the 10% earlier, because in my mind, we're already there and looking forward. We need to see that the reported numbers are catching up to where we see the underlying numbers.
Okay? Capital structure, we say that our minimum equity should be 30%. If we are down to 30%, I would be feel a lot less confident. We know that we have a very good relation with our bank, and I think that's has helped us a lot during the years. You should know that even though now it looks fantastic, that has not always been the case. We actually had a bank that really supported us during those years, so we are very pleased with that. I believe that we should have a strong capital structure. That's very important in my mind. Dividend, we had another policy. We changed this, what is it? three years ago now, Ewan.
What we say is that we should, every year, we look at the available amount of cash we have, we look at, can we how should I say, share something out to the shareholders, or how do we see it? Ever since we implemented this policy, 2020, it was like, okay, if we pay dividend, then we had this, the COVID loans and so on in different countries. We said no dividend in 2020, went into 2021, we felt, okay, we have this fantastic opportunity of acquisitions and growth. We said, let's use the money to grow the business. In 2022, we also saw that the inventory build up made us a bit scared. We said, let's use the money internally.
For my view is that we have done a fairly good job of managing the capital that we have actually generated. With it said, there's nothing that are against giving dividend in our industry. That's something that we will of course do if we feel that, say, that we have two years of inventory turnover goes from three-six , we free up like SEK 800 million in cash. Maybe we'll find something interesting to acquire, and then we will do that anyhow. That's not ruling out any dividends. That's very important to say. Often we forget about this as a company because we just focus on the future.
This is our targets. I will describe a little bit how we think about growth, and then I will show a little bit how we think about costs, because I think that's what drives the OP up. This is a fantastic graph. Maybe you don't agree with me, but what you see is the black line is last year, and the blue line is this year, month by month sales. Often you think that companies like us, we have a seasonality. Fourth quarter is always better than the first quarter. You end fourth quarter this year with SEK 1 billion, then you push back to like SEK 800 million and when you start next year. I look at this, and since I started, I always look at where we end the year.
We look at this level, October to November, yeah, SEK 260 million a month, give or take SEK 70 million. Look at Q1. Where did we start? We start at the same level. Now we are at SEK 375 million in September, best month ever, and say that we are at the SEK 350 million level to be somewhere. My expectation is that next year we will start up here, so we'll not be pushed down here. That's what I like with this slide because it shows you could actually, I don't know how to do it, but you could connect the dots from here to here, and then you would see that it actually follows the logic.
I actually tried to put this graph with also 2020 and 2019, but then it was too hard to read, so we took that away. That's what I like with it. Then we can see, in here we see, okay, what, how has the quarters built up? It's we see a gradual growth. You also know that Q3, we have the Swedish or the Western Europe vacation. It takes away roughly SEK 100 million in sales in July compared to the run rate. Q1, you have the Chinese New Year. Some years ago, we thought that that was a big thing. Now we lose maybe SEK 20 million in sales, so that's not, basically not even visible on the top line. Nevertheless, it's interesting to see how this is built up.
Last year, we had fantastic growth in Q3 and Q4. The growth numbers are a bit weaker, then again, 36% and 23% is not weak, but weaker than the first quarters. Yeah, that's how we see it. Really nice picture. Wouldn't you agree? This is also interesting. We try to put some context into this. How has the years developed? Yeah, 2017, 2018, 2019, bit growth. 2020, as I said, very poor year if you look at it like this. If you also look at how the world economy developed in 2020, it was a fairly good year compared to that. We had 2021, which was fantastic, 2022 even stronger. Our, yeah, we tried to just put in some kind of balance on how the growth could look like.
We put in that next year we expect to have at least SEK 4 billion. Here we show a little bit more, it's more that it should be reflecting how it looks. This also is important that if I look at our organic growth that we see, we will end up at over SEK 5 billion in 2025. That also means that we are not visible on the acquisition market, that's not where we are having expectations there as well. My guess is that we will come back next year to give you a new and upgraded guidance of where we will end up in then maybe 2027, because that's what you do on these kind of days. You put in a nice picture on four years away. We think the picture next year is also bright.
This is also, during five years, our organic growth has been 20% year- over- year. When I started at NOTE, I thought that that was impossible. I have to be honest on that. Now, I think that that's normal way of doing business. You change your perspective. I look at Henrik, and Henrik is not the only one. If I look at last year, we had the Torsby, and that journey is basically similar to what we do in Lund. Lund started from a lower level, you also see similar growth. If I would put up Pärnu, I would see the same numbers as we see in Lund, also the same trend. Everyone that are in having had this fantastic growth, you get a little cautious. Can it actually happen one more year?
I also know the backlog that we have from the customers, I know what kind of forecast they put in. I see a very optimistic picture from our customers, and that's the only thing that I can look at because we don't sell. We are only producing. It's our customers that do the selling. It's very nice picture that they draw up. I showed this picture last year. We have three avenues to grow. Very simplistic. This could be a consultancy picture, but it's not. It's actually done by us. Existing customer, easiest way to grow. You get more and more share of wallet and that's the cheapest way to grow because you only have to perform well and quote well, then you get more business. Very simple.
New customers, you actually have to convince them to put their faith in us. That's a little bit more tricky. But it's something that we focus a lot on. I have to say that in Sweden and Finland, now we're not, we have our head of sales here, Kamran. I will not say anything bad, but we have more customers calling in than we call out. We have a lot of calling in customers. Kamran's task is very easy, I would say. He, he do a fantastic job, so don't get me wrong. You understand my view here.
Growing with existing customers and growing with customers that call in, that's fantastic because they actually want to work with you. If you do cold calls, you have to convince them to work for you. That's the difference, it takes a lot of more energy to convince them than for those that are already convinced. Existing customers, we grow with more than 10% year-over-year with them in the last five years. Half our growth comes to existing customers that are extending their portfolio to us. That's fantastic. Roughly 10% comes from new customers also. Yeah. Come on, come on. Fantastic job. I admit to that. Sorry for that. Acquisitions, I always have a slide of that. The last four years, we have actually acquired almost SEK 700 million in annual sales.
Again, we take it for granted one year acquired growth, then it's just standard, and then you never look at it. So we also took the time to take that out of our P&L and say, okay, what has had it been without this? Also very, very good progress. Only three acquisitions that are 2022 adding almost SEK 700 million. Also impressive. Six years ago, we did SEK 1.1 billion as a group. This is one of our customers, and for those that follow us, we have talked about them a lot. The name is Charge Amps. They do charging stations for electrical vehicles. I have to say it's the best EV company in the world, but they are our largest customer, so I have to say it. No, I actually think so, too.
Look at these graphs because this is what it comes down to. We started here, 2018, basically nothing. 2019, we started with some volume production, SEK 20 million. Really problematic customer, I have to say that, even if they're not listening. A lot of changes, a lot of problems in the supply chain, software updates or firmware updates. There was rework. Rework was the name of it. 2020 still. We saw something happened here from 2020 to 2021. There was an inventory buildup in 2021 as well, so their sales were not corresponding to this, but extraordinary. We also started to do production in dual sites in 2021 due to redundancy. Instead of having them go to two, we agreed that let us go to second site.
If something happens in Norrtälje, we can produce the same volumes, the same products in Torsby. Now we have two Swedish sites doing business with Charge Amps. The good thing if a customer decides to do dual sourcing within one company as us, is that we can be 100% transparent in anything. If we have a new innovation on how to produce things, we would share it with Charge Amps. If they would have two suppliers, we would not have shared it because then we know that they would just mirror it to the other EMS, and they will learn some things that we think is a competitive advantage. This means that transparency is complete.
We are, I think the last year we have had more than 10 visits from their customers visiting our site in Norrtälje. I think, as I said before, that's what you want to achieve. You know that they are very proud of your factory. I was also invited to them when they had a new launch of the new product. I was at an exhibition, yeah, one and a half week ago where they introduced a new product that we will of course also produce. That's also where you want to be, where the customer invites you and they bring you into their strategy. You know that you have done something good. We have, yeah, monthly calls with their senior management on all levels, so we know exactly where we are heading.
We have that with more customers, but Charge Amps has been openly saying that you can share this with you. Some other customers are more conservative when it comes to information sharing. I just wanted to show you that this is something that we do as a company for our customers whenever we can. This is also one of the reasons why I feel so confident in that we will reach our numbers because we have so many of the customers that are thinking like this. Acquisitions, also something that we actually, this is the part that every time I do a presentation, there's always come a question about acquisitions. Let's see if I can manage to answer all the questions that comes in on this slide then. We have done three acquisitions in the last four years.
Actually, it's four years and a month today, but I add that as four years. Ever since I started then, I think the first day I took over as CEO, I and the old CFO went to U.K. and negotiated the deal with Speedboard. That was a very good journey. Combined sales, we're up to almost SEK 700 million in 2022. I would say that that will grow. We have only a half year of Herrljunga in 2022, so if you add a full year, it will be even more. Also we see here that 2019 was a fairly good year in Windsor. We had, yeah, COVID. U.K. was a lot.
We had to close the factory for six weeks, and then we run it with like 25% staff for one month, and then 50%, and then 75% It's a problematic year in 2020. 2021, yeah, decent growth, and then this. This is, acquisitions are 20% of our sales in the last four years. I think that's fairly good. Why do we acquire? I've always said that we will not be another Storskogen or some of this because I don't think that this adds value. I think you have to. Business is something you have to maintain. You have to deal with it. You have to make it better, you have to work with it, otherwise it will only be another site, and then you forget about it, and you hope for the best.
We don't hope for the best, we try to make it better. That's what we think is our core value from the head office. What we say is that we should if we acquire something, and believe me, there is a lot of acquisitions that are open. There's a lot of people that are owning like a one factory site that are turning maybe EUR 10 million-EUR 20 million. They're normally like 60+ years. They don't have a son or a daughter that wants to take over, so they simply want to sell out at one certain point of time. All our three acquisition has been that, 60+ years of owner, and they want to gradually phase themself out.
A lot of these, I get at least two or three cases every month with companies that could fit into our portfolio. You can argue, how the hell do you select the ones that you buy, and are you selecting the best ones? That's the trick. What we do is that we try to we have a easy strategy of this. We say that they should either add new market, that could be Germany or U.S. or something. It could add capacity. Herrljunga was one of those. We saw the growth in Sweden. We felt that our floor space was getting a bit small, we felt, okay, let's buy a site that we're doing only SEK 150 million with the 5,000 square meter production facility. That can never go wrong.
We added capacity in a country that grow. Then we could buy something that bring in new technology. It could be, I cannot think of any case because I think we're very strong at technology, but it could be if there is a new technology to produce something that we don't have, then let's buy someone that have that instead of trying to develop it internally. We have not found any one of that. It could be that if we want to do, yeah, machine parts, then we would buy something that do that, not try to make it happen. I'm not suggesting that we will do that, but that could be the case. The fourth is that we could gain momentum in a targeted segment. iPRO last year in U.K. was that.
60% of the sales was in the EV charging stations. That was a fantastic opportunity in 2021. 2022, U.K. economy has been weak, and the sales of charging stations has been weak. We have seen a decline in the sales there. We believe that it will come back, but 2022 has been a fairly weak year. They have earned more than they said for 2022, but we felt it should be even better. So it could have been better. I still believe that that was a very good acquisition because we got the foot into a lot of nice companies. Those are the four segments that we look at. I also add one more that is more of a...
You have to avoid buying the wrong companies. If you do that, you will spend a lot of time to make them right. What I mean with that is if you buy a company that are producing old revisions of products, they could be extended quite some time, but sometime in during time, they will start to be phased out. When that happens, you will lose sales. You have to first replace that sales and then grow. That's always tricky. What we look a lot on when we look at acquisition targets is to see what products are you producing. We try to find information about how, when were these products released from the customer side.
If they are like 10 years old, then you know that there will be new revisions coming out, and we don't know that we have those revisions. You buy something that you, in your heart, you know that these companies will start to decline. All the cases we find that they only have old products, we say no to without asking any more questions. We just walk away because we don't want to buy them, and that excludes maybe half of the acquisition targets that we get. I still believe that that's the right strategy. I don't know if the board and so on do that, but I think that avoid buying the wrong ones is so important because we have such a beautiful organic growth. Why should we jeopardize that with buying, with being...
If we lose one or two good ones, I can live with that, but I don't want to have one bad one. That's how I see it. Again, there's still a lot of companies to buy. We always work with what I call, we have an acquisition funnel. Normally, we are in discussion with one to three or four companies at all times. An acquisition takes three-nine months, maybe more if you sometimes have to convince the seller to sell as well. Sometimes you need to massage the price tag a bit and so on. Sometimes it takes longer, sometimes it takes shorter. Normally, some four-eight months from the first call until you close it. We always have a few open.
You can say that we step out of two out of three that we start with. In either we don't agree on price or we find something that we don't like and so on. Still, that has given us roughly one acquisition a year. Looking forward, we will most likely keep some kind of momentum here if it's faster or slower. I would say, as a rule of thumb, I would say maybe one acquisition a year could be something that we are targeting. Could be more, could be a year where we don't do anything. That's how we think, and we think acquisitions should, if it just add more of the same, we're not so enthusiastic. It should add something on either one of these. That's how we think.
Could of course be argued, but I still believe that what we have done in the last couple of years, it has actually been well thought through, and it has paid off very, very well. This is tricky. You will make some mistakes here, even if you are thorough and you step out of a lot of ones. It's hard to assess these companies because you don't know them. If I go to Lund, I know that, okay, I know it by heart, I know the customers, I know why this product should grow and not the other one and so on. I don't know that with the new targets that we look at. We believe that we have a good selection process.
I've said this before, I have to this is probably my most favorite slide because this adds how I think a business should be run independently of what industry you are in. If you add the ingredients of organic growth, you should see that all the lines should go in this direction. We have our four cost sides. We have white collar, we have direct labor, other cost, then you have depreciation. What I would say is that white collar is a some kind of fixed cost. It's not dependent on how much volume you do. You can add more through the same fixed cost. You can add fixed cost at a lower pace than you add volume. If you look at this graph, we were up to maybe 13% in 2016.
We're down to 7.3% or something. That is 6% of better profitability by utilizing your white collar cost in a better way. I think that's remarkable. Other cost, that's like lease, it's energy and so on. Here we can actually see that inflation has pushed this up, so we're 0.2% higher this the last 12 months than full year 2021. We are not, how should I say, immune against the inflation. We also see that. Not so much, but we see it. We have direct labor. It has started to be pushed down a bit. Here I have adjusted our top line with the 5% of extraordinary material sales. Otherwise, this error would look too nice, so it would give the wrong picture.
What we can see is that depreciation, yeah, we started to invest more in equipment here in 2018. It has gone up. I would say that the depreciation has gone up with 0.5%. The total cost that we are adding have been declined with 10%. If that's the price you pay for getting the rest of your cost down with 10 percentage units, I think it's a very reasonable cost to pay to get to that level. What we have also seen is during this time, we have increased our operating margin from like 5.5 up to 10.2 as we have in underlying profit.
We have given away half the cost increases to our customers, which I also think is fair because that is if we would have had the same price level, we would have been at 15% now, but that's not, that's not how we want to do business. You can also say that how can you use this scenario? When I started, we had a hit rate of quotes of maybe 5%-10%, and 10% is probably higher, too high, say 5%, 6%. Today, our hit rate on quotes are probably in the range of 35%-45%. Often, you re-quote one job maybe 10 times because the customer changed their ratios and so on. It's a bit hard to assess.
We can actually see that when we quote using the new cost base that we have, we see that we win a lot of quotes. Last year, we won new business on an annual value of SEK 700 million that is still to be implemented in our production. This year, we will be, Cameron said SEK 885 million, I say SEK 900 million. We will be at roughly SEK 900 million of new sales that comes in, half existing, half new customers. We have not even started to implement that. That is gonna come in 2023 and more likely in 2024. That's why when we look at the pipelines, it's not that we sit there and say, "Okay, yeah, with this growth we have had, we will grow." We have the business.
We have been elected for producing these volumes. There will, of course, be some of these customers that will decide to cancel a program, that happens. Say that out of the SEK 700 million, we will implement SEK 500 million-SEK 600 million. Out of the SEK 900 million, we will implement maybe SEK 700 million-SEK 800 million. It can take a year longer, but it will come. I would say that already today, we have been awarded the business to reach the SEK 5 billion in the next three years.
It's up to us, together with the customers, to ensure that we implement it and get it operational and don't fall into any traps with quality problems or that we can maintain cost and so on, maintain quality, and actually that the customer can find a way to program the products to actually do the job that they want to do, especially when it comes to MedTech products, that they're often very, very complex. Some of them are actually never launched because they don't get them in through their own qualification processes and so on. I would say that all the things that we do, it summarizes up in this slide. When I started, we implemented a KPI that I still believe is very valid.
We said that out of all our new business that comes in, if we grow our top line with SEK 100 million, 15 of those SEK 100 million should fall down to the bottom line because we have to show that we can actually grow our margin when we grow our top line. That's why we see that all these cost trends are going in the right direction. I would say that we are better in our new product introduction phase. We're better in managing the projects count that comes in because we have more resources to do it. Even though we managed to keep a good part of the new contribution margin, we have also managed to increase our number of engineers, of project managers, and so on.
We believe that where we are is very favorable. I would say that we measured last after 2021, we measured our fall-through, and it was almost 17% on organic growth, and it was 15.1% including acquired growth. This year is a bit of how you calculate it. If we would take the underlying OP, it's still over 15%. I believe that the model still works. If you, if you're fast in your head, you say that we are SEK 3.5 billion, and we add another SEK 1.5 billion, and you have 15% drop-through, you will add another SEK 225 million on bottom line when we reach SEK 5 billion. That's just a mathematic exercise.
Yeah.
It's a lot of work, but a lot of things that we do supports our way of how we look on this. As you know, I can speak forever, so I will say thank you for listening, and I hope that you got some insights out of joining this day.
Thank you so much. Thank you so much for all the questions that we have received. We might not be able to answer all of them, but Johannes and his team has promised that they will use their Christmas holiday to go back and answer all questions that have been sent in. I hope they deliver on that. I'm certain they are. If you want to ask a question here, just raise your hand, and you will be handed a microphone. I will start with two questions from the web. First one is, as you have described, NOTE has been winning market share and outgrowing the market. What separates you from competition? What's your unique selling points?
This is something that is very hard to reflect on, so it's not an easy answer. I would say focus on your internal efficiency, deliver on time, good quality, and I would add also easy to deal with, that we are easy to access. Everyone in the management team, everyone in our production sites management team are involved in the customer dialogues. That means that we can always sort out the problems that occur, and all the customers that we have are feeling that they are seen and that we are giving them proper attention. I would say those are the best ingredients. We have learned to not overprice when we quote. I think that's also a very important thing.
Great. I will merge 2 questions into one because they're very similar. The first one starts with impressive developments. It seems like it's a shareholder, happy shareholder.
Yeah.
How do you look at the competitive situation? Have it increased, stayed the same or getting tougher? That's the first question. The second question is, could you highlight the three most threat for competitors?
Oh, if I start with how I see the competitive landscape, and I would say that if you remember my second slide, I was showing you a bit how this industry has, have developed, and it has moved through a few different phases. I would say the last couple of years and how I envision the future is that there is a good balance between capacity and demand. So we see that basically all our competitors are producing quite healthy profits and healthy growth. There is not overprofits. Some are making more money than others, and some are making less, but it's a healthy level. Everyone is extending their footprint and extending their site. We are building capacity in a similar speed as where I expect that the capacity are needed.
There will not be under capacity. If that were the case, then I would see that new entries would be a bit of a problematic, but I don't see that. I think that the couple we have in the room are from HANZA. They do the exactly same as we do, extend the sites, build out capacity, invest in new equipment. I think everyone is doing more or less the same, that means that the competitive landscape is staying fairly the same as I see it. I don't see undercuts of price so often. In like 2006, you saw it all the time. You lost production, you could think about how on earth are they gonna make even SEK 1 on this price? You lost business anyhow.
It's, I think it's a good balance. If I look at competitors and how should I see this, I have to say HANZA is of course fantastic. I have to say that today since they are here. We have a lot of, I think all the listed players are good. I think there are no one that are performing. I would say that maybe I would say Scanfil is not growing, and I think they also have lost valuation. The multiple is lower on them. If you look at Kitron, done some good things the last year. Incap, fantastic profitability. I would say that some of the of our peers are growing without adding margin.
I would say that if you follow them, that would be a problem because then with higher inflation, that will start to eat off margin. If you see companies that have good growth with flat operating margin, they will probably start to lose margin in the coming years. That would be my view. Watch out for fall-through. I think that's the word that you should learn and use when you look at companies like us.
Speaking of growth, what's your strategy related to capacity? How are you securing capacity for the fast growth?
I have a funny story. It was when I started, we had an old head of operations that left two, three months before I joined. In his room, he had a whiteboard where it said, "Stretch capacity," what he felt that the group could do. I think that ended at some SEK 1.7 billion. Now we're doing SEK 2.8 billion with the same sites. We had some more to take out from the sites. I would say when it comes to capacity, our vision internally is that we should always be able to produce. Now we're in Q4, we should be able to produce our forecast for Q4 next year within our existing buildings and with our existing equipment.
If we can do that, we know that we can always catch up if we get the additional orders in any site. We try to be one year at least ahead of our predicted sales. That's how we think about capacity. We also think that we should never run 24/7. We run 24/5 in some sites. We always have the weekend to catch up if we have disturbances. We never want to fill up something completely. We'd rather invest in more capacity if that's the case.
Another question regarding capacity. What's your view on the capacity for EMS production in Europe? Do you see the increased capacity is enough to meet the increased demand?
Yes, I think so. I don't foresee that we will have an undersupply of EMS capacity in the next 10 years. I would be really surprised. There will. I mean, we will invest. If we double us in two more years, we will manage. It's gonna be like Henrik has managed in Lund. It's gonna be a lot of challenges, but we will, we will sort it out. I would say like this, that for us that have what I call a generic production process, it's quite easy to duplicate and extend that. It's much trickier if you are a customer, and then you have installation, you have the aftermarket, you have firmwares and softwares that you have to maintain. Then you have much more things to think about when you grow.
We just have to add more, more machines, basically. We can run them with less headcount. For us, it's, yeah, fairly easy. I know that that sounds really, poor, but, in my mind, we have shown that it's doable and I think that another doubling would be fairly easy.
I think we have one question, but I will just go in through with one more question from the web. Regarding U.K., do you expect growth and profitability to catch up in 2023, even though the economy in the U.K. Might be slowing?
Yes, I would say that. We are seeing a strong order books in at least two of the three sites, and we are seeing that the outlook is very optimistic. I would say that U.K. You should know that U.K. has basically never recovered well from the COVID. They were one of the countries in Europe that were actually taking the biggest hit in the COVID when it came to production. I would say that we're still measured from really low levels. Even though I think that they will have a tough year, I think the production out volume will be higher next year than it has been this year. That's my view on that market.
Question here.
Yes. Collin Rehn from SCB. One question on the margin side. What is your customers accepting in terms of margins? Are they accepting you to expand margins beyond 10%, or how do you think one should see upon that?
The easy answer on that is to say, "Okay, let's ask the Incap customers because they are running at 14." I would say that 10% is a healthy level, and I think that our customers are seeing that. I would say that if we would have high dividend, low investment pace, then I would say the profitability would have been a bigger problem to our customers. They see that every time they visit our factories, they see new and more efficient equipment. They see that we make use of the profit that we make to become better. As long as our KPIs are moving in the right direction and that we can keep and also give back some of the cost savings we do to our customers, they will be happy even if we make 10 plus something.
Great. A question on the cash flow. I mean, you have tied up quite a lot of capital this year. When can we expect a substantial working capital release?
Oh, that. You're asking some nice questions. No, I would say like, we will have a decent cash flow in 2023. If it comes already in Q1, hard to say because we still see constraints on the component side. You can say that when you read less about semiconductor shortages, you can say that then our cash flow will come two months later.
Okay. Then a question for Henrik on the Lund facility. Could you tell us a bit more maybe about what type of customers you have in that facility and which kind of customer segments you expect to maybe grow the most during the upcoming few years?
We have no MedTech in Lund. Let's start with that. The other segments we are working with in more or less scale, we have a base on quite a lot with industrial, but also some Greentech coming up as well. And I see the future is a mix of them as well, I would say
Yes.
Okay. Just the last question from my side, on 2023 and the guidance for that, how secure can you be on that you will achieve SEK 4 billion in sales in 2023? What kind of a recession scenario have you penciled into that figure?
It's a very good question. I would put it like this, that we're not used to over-guide. That will be my answer on that. We have a good confidence level on that. We have the orders to be there, we just expect that the component market will not get worse, and that the recession, if it comes, will not be steeper than what the outlook is today. We have some air in that guidance also to have some worse scenario than our main scenario, if I put it like that.
Okay. Thank you.
Okay. I will merge two questions again. The first question is regarding acquisitions. You talked about that before. Maybe you could elaborate a little bit more about the potential gaps in your offering. Another person wants to know what plans you have for expansion when it comes to Asia ex China. That person is also referring to non-name competitor with really high margins due to India.
Yeah, a very, very well-hidden competitor then. Let's start with the first question. You could say that any big market is a gap. I would be thrilled to have a good sizable site in Germany that are not focused on automotive. That would probably be my first preference. That's a fantastic market. They are, in the business mind, are quite similar to Swedish people. We will normally you never get fooled in Germany, if you put it like that. Germany would be my first preference if I would add another market. I think two years ago, we measured that we have 30% of our sales to American-owned companies.
Of course, U.S. is a blank dot on our map, and we could potentially gain more business from our existing customers if we had a good facility in U.S. I would say those two are our main markets where I would like to enter. I would rephrase this answer, I would say that I much rather add more capacity in Eastern Europe rather than go to Asia. Eastern Europe is the same time zone. We also see that they have been technology-driven. They are being better and better every year. If I look at our Estonia factory, it's a very nice facility. If I look at some competitors' factories in also Eastern Europe, they're as good as we see in Western Europe. I would rather put another dot on our Eastern Europe map, preferably a bit south of, say, Czech Republic.
Great. Moving on, a new question regarding how big is your sales exposure when it comes to private consumer compared to enterprise products? How do you look at these two segments for the next coming years?
This is very good. We don't measure it, so to be fair, so whatever I say is a, is gonna be some kind of educated guess. By far, we have more production and sales focused on commercial use rather than private use. We have some of the products that we do for EV chargers, for example, are targeted for private persons. We have played targeted for private persons and so on. If I would, without being challenged, I would say that less than 30% goes to private consumers, and it's probably a lot less than that.
Great. Next question, how do you look at different growth when it comes to different regions? What's the reason behind these differences?
Yeah, that's a very good question. It's, I stated before that production in Europe will grow quite significantly, and it will be differences between countries in that region. I would say production in Europe will probably grow faster than it will in Asia and U.S. Asia have the problems, China is, has some trade issues and so on with some regions. I would expect that region to grow a bit slower than Europe. U.S. has a similar problem as U.K., shrinking work society. There are less people working, and that will be a big restrictions on growth as I see it or on production for within U.S.
I would say Europe, and I would say today, Sweden is growing nicely, but also Eastern Europe is growing nicely. I don't know, but either one of those will be the fastest growing, the next coming years, I would expect.
My friend from Carnegie has a question.
Mattias Montgomery from Carnegie Fonder. I assume a lot of your customers have increased their inventory as well, and perhaps even placed orders in advance to secure capacity. What's your visibility here, and is this accounted for in your sales forecast?
Luckily, they have been struggling with getting semiconductors as well as we have. I would say the inventory buildup is more related to surrounding products to the boards. I think, when I look at our customers, most of them are waiting on our boards. When they have them, they will get their production out. We don't see so big inventory buildup among our customers on our products.
Just one more question. In terms of reshoring, what are you actually seeing? Do you think this will be a significant driver for the next few years, or are we talking five years plus?
I think there will be a lot of trends that will be broken after COVID and the transportation costs and also the political way of treating both the war and also the COVID. My view is that inventories will not be seen as a negative thing. My guess is that there will be changes in how we and others go to market. With that said, I also think that you will try to condense your supply chain, have it shorter, and have more value created in the same region where you are. That means that my view is that Europe has a lot of good companies that are growing, and that means that our region will grow also from a production point of view.
Reshoring as a word is here to stay in the next decade. That's my view. If it's gonna be stronger in the next year or stronger in the later part of that trend, I don't know. The price difference between China and India is less than it was some 10 years ago, and that is gonna be driving the reshoring as well as the political risks that you see. Very, very tricky question. That's how I see it.
Thank you.
Okay. This is actually, I think, the last question. You seem to have managed the component shortage better than many competitors. Are you less reliant on components that has been most under pressure, or do you think you have a more robust and diversified supply chain?
I would say that our exposure to semiconductor shortage is as anyone else. I would say that we had some advantage at the start because we foreseen, we foresaw this shortage a bit earlier than some others. We started to build up inventories already in the fall in 2020. We saw that this would probably be something, we started to buy up some. We started early to force our customers to place longer orders and so on. We were a little bit ahead of the industry at that time. That combined with that we have a less aggressive target on inventory turnover, so we started with some more inventory than average. I would say that.
Then I think it has been a fight for components with everyone. We have been, in my opinion, fairly successful. We have customers that have suffered a lot, and we have customers that have went through this without basically any delays. So I would not say that we have been less exposed. We have had the same exposure as everyone else. We went into this with a quite healthy balance sheet, and I think that has been one of the reasons why we have been able to buy earlier and allow suppliers to ship in earlier, so we could have crossed out shortages that would occur half year later. We have allowed that to happen, and that has been probably the reason why we have been chasing less component closer to the production start.
That's just my view.
Once again, thank you so much for all the question. I leave Johannes to a final remark.
I would say like this is a very exhausting day by lot of words has been said. I think you when you leave from today and when you log out from the web, you should keep a few things in mind. We have had a fantastic journey and it's time to reflect upon that. We have fantastic sites. We saw Torsby and iPRO last year. We see Lund this year. Everyone have this enormously well-thought-through way of how we should grow and what will happen in the coming years, and how do we make sure that it happens.
I'm, as a CEO of a company with all these nice factories and all the staff that we have that are making this possible, I'm very pleased to run a company like this. I would also say that the market is fantastic. If I would say that we have a market share globally that are 1%, I would probably be above what is true. The opportunities are fantastic. I would say that we are looking into the coming years with very high optimism, and I would be surprised if we are not performing well in the coming years. That would be really frustrating and something that I don't foresee at the moment.
I have good confidence when I stand here and present these numbers for you, and I feel confident that we will reach or even beat the numbers that we present here. That's how I see upon our business. Also keep in mind that we are not very used to over-guide when we talk about this. That's how I see it. Thank you all for coming. It has been a pleasure to see all of you here, and also for the ones on the web that you have taken two hours of your time to listen to this. Thank you.