Everyone, and welcome to the Polygiene Group's presentation of the Q4 . I would like to welcome all new people here on the webinar today, and I think we start as we normally do, that we start with the financial performance, and after I will guide you through the highlights of the Q4 . So, Niklas?
So if we start with a brief summary, sales were SEK 30.9 million versus SEK 40 million last year. We had a gross margin of 70.6% versus 64.9%, including inventory adjustments of SEK 0.7 million this year and SEK 1 million last year. We had an operating cost of SEK 25.3 million versus SEK 27.8 million, including one-time cost of SEK 3 million and SEK 2.7 million last year. EBITDA was -SEK 3.4 million versus SEK 1.8 million last year, and that included one-time cost of SEK 3.7 million this year and also SEK 3.7 million last year. The EBIT was -SEK 302.4 million versus SEK 6.4 million, and that included the impairment test of goodwill of SEK 295 million that we communicated in December. We had a negative cash flow of SEK 2.3 million versus SEK 6.6 million, and the cash end of the period was SEK 44.1 million versus SEK 48.2 million.
The sales that was down then from 40 to 30.9, and this was 23%. The main drop was in protection, while we actually saw an increase in the brand sales in freshness. The distribution sales in freshness was negative, so the overall freshness was lower versus last year, but the brand sales was actually up versus last year. Polygiene freshness was 53% of the total, while protection was 47% of the total. If we look at it from a regional perspective, we can see that the main drop was in EMEA, and that's driven by the protection sales, while Americas was also down a bit and APAC was up versus last year. So as we said, sales down 23%. The strong margin of 70.6 versus 64.9 was driven by mix, FX and less inventory adjustments.
Overall cost was down 9%, including the one-time cost, and that was driven by less commission, lower marketing cost, and less FTEs. EBIT of -302.4 versus -6.4, that, as we said, that included the impairment test and the write- down of SEK 295 million. Of those 295, SEK 50 million was driven by FX and FX revaluation since the purchase of Addmaster. We also made an impairment of the withholding tax of SEK 8.4 million, and last year we did that with 4.5 million SEK. The negative cash flow of SEK 2.3 million, part of that was driven by the investment in the new bio product, but also the investment we did in the Addmaster website.
Thank you. Now I will walk you through the highlights during the last quarter of the year. I will start to talk about the Polygiene business, and that is the freshness business that we actually call the textile side of our business. Then I will just give you some update on the product launches that happened in the end of the year. After, I will give you a brief of Addmaster activities, where it happened a lot during the last month. And then, of course, I will introduce you to a new vertical that we signed a big agreement regarding aqua textiles, which is quite a new field for us. Then I just will end with the investment case, a short brief why Polygiene Group is a good investment for the newcomers here.
If I start with the textiles and the Polygiene business, we have seen positive signals from the industry. We've seen from our customers, we see from the suppliers, we have also a general market feeling that it's coming back after a very challenging 2023. And the 2 last quarters, or at least in Q4, that Niklas said is that the brand sales, the sales that actually goes onto fabric was increasing in Q4. And I also think that we will see this continuous development into 2024, which has started very strong, I would say. It's just 1 month in, but we have a very good feeling now that we are having a recovery, which is very positive. We also see some cross-selling between Addmaster and Polygiene. As you know, we have split the communication side, the offering to the market, between Polygiene and Addmaster.
I will come back and comment on that later. But we are still one company, we're still one group, and on the back end we work together and share a lot of common experience behind. So, for instance, this SOFHT, it's the Society of Food Hygiene and Technology. It's a UK-based organization where Addmaster's been quite connected to. And now Polygiene was there, introducing StayFresh and OdorCrunch to this industry. And we got nominated for Best New Product and Service, but we didn't win, but it was very honorable to be a finalist. In the textile industry, the last months of the year is very intense when it comes to trade shows. The trade shows are still very important for this industry. It's where we connect with our customers, we find new prospects, and we discuss with other partners in the industry.
These trade shows were actually very good and a very good timing since we have the launch of the new technologies. Yes, so as we press release, we launched a new bio-based antimicrobial technology as a complementary technology to the silver-based. We've been looking and we've been investigating and vetted many types of product in this field, and finally we found one that we think could have a good fit in the market. For Polygiene, the compliance and the regulation is number 1. And second, we have the performance and, of course, the data and everything around it. And now we finally found a good alternative. We will name this technology StayFresh Bio. And as we speak here now, we have products on testing. We do provide some testing in India and Turkey and China to build the database and also to vet the technology further.
So I would say that we can expect sales from this business maybe end of the year or definitely in 2025. And then I also want to just mention the innovation project of the Polygiene ShedGuard. ShedGuard is a textile finishing that is designed for keeping the fibers to the fabric. And this had 2 good side effects. One is, of course, to address the microfibers that are polluted while washing. But it also has a good side effect of anti-pilling, which is a very good benefit for the user of the garments, that it looks more fresh longer. We do this in collaboration with 6 open innovation partners, and it's a mix of brands and partner mills. And we also collaborate with EOG, SOG, and BSI, and the University of Manchester. So it's an innovation project.
We are in the first phase, the phase I, and that is the testing. So we will do textile testing together with these open innovation partners. I think in 4-6 months we can have some result to see how we can go commercial with this product, depending on the results, of course. So I would expect earliest in the H2 of this year that we can see any revenue from this product. But it's very interesting. There are so many people interested. We have a long list of companies who are interested to test this if the first initial test will turn out to be positive. So very exciting product, I would say.
Then if we go to Addmaster or the product protection side of the business, they had a rough last quarter, as Niklas said, and we know that this is the trend of the industry. I mean, I think between -30% to -35%, the market in general. So Addmaster has actually been following this trend of the industry. We haven't lost any customers. It's more that we follow this market. And when we see upside or positive signals, this will also affect Addmaster to the positive side. We also had a very positive start in Addmaster. So the first months, 1 and a 1/2 months, it looks quite positive for 2024. As I said before, we're still working together as one company. So we have Polygiene agents. In their local markets, we have introduced the Addmaster technologies to be able to strengthen the sales team of Addmaster.
We also, in the end of the year, we decided to dedicate a marketing manager just for Addmaster. Addmaster is working very closely to the partners and to the industry, and it needs 100% focus on that area. We also added an additional business development manager. This is also part of the plan and the strategy to separate the offerings. As you know, Addmaster can be used on all materials. That's why we have to focus on where we go after, because we can't go everywhere to spread us thin. We decided to focus on automotive, industrial, and the packaging. This is because we see we have a very good offer and we have very good benchmarking into these categories.
Sometimes I get questions about the automotive, how it's going, what's happening after NIO, and we are still working on to get new brands on board. We have very interesting discussions ongoing. But it's a long-term sale because the big companies, it could take quite a long time to get into a beyond-nominated technology in their portfolio. But we're working on it. We see actually a big potential here. And as I just mentioned, we have restarted Addmaster going forward to be able to make a stronger, more clear offer to the industry. When we acquired Addmaster, we thought it was a good plan to put everything under the umbrella of Polygiene. But after some feedback from customers, we understood that it's better and stronger if Addmaster goes all in in Addmaster and then Polygiene can go all in in the textile industry. Yeah.
Yes, and as was the comment. We have another interesting new field in the pets category where we have a new customer who do odor-free cat litter, which is a very interesting product. This is also something we would like to investigate further because we know the pets industry is very big and has great potential for the kind of technologies we offer. Then in the beginning of the year, we launched the new website, and it's actually a relaunch of the old Addmaster website. That's why we could do it very fast and very cost-efficient. We used the same marketing agency that built the old one, so it was very fast and quick to get it back. The key metrics we have seen so far, it's only been 1 month, is very positive.
And also customers have been commenting very positive that having these documents and this communication back again. And of course, all other marketing assets and other toolkits, they are reused from that we had before. So this has been quite a quick rebranding back to the old Addmaster and hasn't cost a lot for us. And going into the interesting part now with the aqua textiles. So there is a large amount of oil released on roads every day. And this oil will contaminate water when it's raining. So there is a need for using these kinds of aqua textiles to manage these stormwater runoffs. And an aqua textile, these are technical textiles that are specifically designed to manage water. And Addmaster have developed the technology that you can put inside this textile to actually stimulate the growth of bacteria who break down the oil.
This is like a reversed antimicrobial since it's actually making the bacteria grow much faster, and the bacteria will degrade the oil. We signed a new 3-year exclusive agreement with the largest geosynthetic company in the world. And sorry. This new partner has capabilities to scale up this business. The technology was developed by Addmaster a couple of years ago. It has been on the market in small regions in Europe. Actually, in Sweden, it has been successfully. I think there are quite a lot of projects using this technology in Sweden. It got an award in 2022, I think. But it's been quite small scale. But now with this new partner and this new agreement, we think that this new area could be very, very important for the future success of the group.
The contract is valued to a minimum of SEK 23 million over these years. Then my last slide is just to give you a brief insight in the investment case. The value proposition we have with our joint companies has very strong drivers, and it's perfectly timed. If we look at the textiles, all companies, and especially the ones in the garment industry, they have to have sustainability stories, claims. They have to show that they actually do everything to prolong the lifetime of the garments. And if you look at the Addmaster side in a post-COVID world, it has been a raised awareness of hygienic, of bacteria, virus, etc. And the business model is very scalable. We have a high financial leverage, which means that when we increase the sales, the cost will not proportionally grow. We are a very asset-light company.
We don't have any production in-house. We're not manufacturing our technologies by ourselves. That gives us a very high flexibility. As Niklas showed before, we have high margins, and that enables a profitable business. Cash flow, we are almost on a positive cash flow, but that limits the financial risk for us. The most important thing, we have a very strong financial position without any debts. That's a very good position to be in at this point of time. As you saw, the cash, the net cash, actually enables us to make investments without external funding. I think the cash is almost the same as it was 1 year ago, even if you have quite a tough year. That also shows and proves that we have a strong case. Then last, it is an established business.
We have strong values and ethics in the company. We've been here for more than 17 and 23 years together in this business. We have recurring customers, and we have a very strong team, which is very tight and efficient now, which gives us a lot of flexibility when we move on board. Okay. Thank you.
We're going to see if we have some questions. We've got some questions before this presentation. So we will start with them, and then we'll see if there will come any more questions during the time here. So one question is, what is the biggest risk we are facing in our business, and what are the biggest opportunities?
Yeah, I would say if you look at the risk, I would say if it might be a setback in the slow recovery that Ulrika was talking about and that we are seeing, that, of course, could impact us. And also as we have our new product coming up, which we think could be really important for us. We are really testing it and working hard with our partners here to ensure that we meet the expectations that we have.
I also would like to comment that with the risk. As we can see now after COVID, nothing has been as expected. That's also why we communicated in December that the financial goals, we put them on hold because the business climate is still very uncertain and it's hard to predict external factors. That is a risk moving forward because we don't know what's going to happen.
Our plan then to mitigate this risk and seize the opportunities to, of course, be close to the market and try to adjust as soon as possible, as we try to do during the tough 2023 that we had and still coming out with the strong cash situation that we still have, and then work closely with our partners to do the testing and registrations.
Yeah. And as I said, we are a small company, which gives us a very, very high flexibility to adjust to the conditions like we did in 2023. Even if the sales dropped, we actually managed to have the 2 last quarters with almost positive EBITDA without these extra costs. So I think that is the strength we have as a small entity.
Are we looking for new investors? And specifically here, I'm talking about in the U.K.
We're always looking for new investors, of course. We haven't been very active on the IR market because we had so much things to put the company together and really mitigate all these, navigate through the hard times in 2023. Of course, we're going to do some IR marketing. We will go to road shows. We will start to talk about the company now when we feel a little bit more comfortable.
We got the question about India. How it's going and a little bit what the target is with sales in India.
Yeah, we signed up with a distributor. But we also realized it's a new market for Addmaster's technologies down there. It has been challenging with price levels a little bit, and it is a long sale. And we're working on it. We still believe that there is business down there, but it will take time until we see the results from that investment.
And then there were questions about sales, specifically then in the, I would say, outdoor and then training category. Yeah, I think it's been tough for everyone, all the customers during 2023, but we see a slow recovery overall, as we said, in all the categories and freshness and for the brand sales end of last year and going into this year, so.
Yeah. Now with this new bio-based technology in the portfolio, we can actually go to new regions that haven't been very interested in silver, like Scandinavia, Sweden. This market is quite interesting to approach now with these new technologies in the portfolio.
Then we got a question about Addmaster, how big part of it is. And as we said, it's 47% during Q4. I would say it's almost around that number. It's around 50-50 with the two different segments we have, freshness and protection, or Addmaster and Polygiene. And then a little bit of question about the new deal and on the margins, etc. I think you presented a lot about it.
Yeah, it's a super nice deal. It's a company, the biggest geosynthetics company in the world. We signed this partnership, but it's a true partnership. We have given them exclusivity because we think to go with the biggest partner is the smartest strategy for us. I would say the margins are in line with the margins we have in the group. We're never competing on price. That is not the value proposal we have. We always add something else to the offering. Yeah, it's exciting. I'm really, really I feel very comfortable now moving into 2024 and leave 2023 behind. It has been challenging, but now we really can see the market is recovering. The team is very positive. We get positive signals, as I said. I think this could be our turnaround year.
I really, really hope that we can start to see growth again and also to deliver profitability on the bottom line. Did we get any new questions?
No. No more questions right now.
Okay. Then I think we'll see you again in April when we report the Q1. Okay. Thank you for listening. Bye-bye.