Hello, and welcome to Svedbergs Group audiocast for teleconference Q4 2021. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question answer session. Today, I'm pleased to present CEO Per-Arne Andersson and CFO Mats Lundmark. Please go ahead with your meeting.
Thanks so much. Next slide, please. As mentioned, it's me, Per-Arne Andersson. I will start the presentation and go through the start of it, and then Mats Lundmark will present more the financial figures afterwards. Next slide, please. For you who haven't met Svedbergs before or know so much about Svedbergs, we are located, actually, we have four strong brand companies. We have Svedbergs in Dalstorp in Västra Götaland, where we also have the production. The company were founded there a little bit more than 100 years ago. We have production of wood products, medical products, also assembling, warehouse, and all the sales office activities. Svedbergs also have representatives in Finland, Norway, and Denmark, as you can see on the map.
Macro Design in Laholm, who is producing shower walls and shower cabins, is located in Laholm in Halland, west coast of Sweden. Last year in December 2020, we acquired Cassøe in Denmark. It's located in Jutland or in the city Herning. It's sales office and warehouse, customer service. Since first of December 2021, we have Roper Rhodes from U.K. in the group. Sales and customer service in Bath and warehouse and logistics in Bristol. They're located quite close to each other. Sales activities in whole U.K. and also in Ireland. I will describe that company a little bit more in detail. Also since September last year, we have our group office in Halmstad. Next slide, please.
In our brands, we have six brands in the group. We have Svedbergs, which have a total range of products for the bathroom. It's furniture, shower walls, it's brassware, bathtubs, everything you need in your bathroom. Macro Design, as I mentioned, we acquired it first of December 2016. It's shower walls, and since three years ago, also bathroom furniture, some brassware as well. Since first of December 2020, we have Cassøe that is active on the Danish market, and is mainly selling brassware with taps for kitchen and bathrooms, and have a distribution network of retailers in whole Denmark. Some small exports to Norway and Denmark as well. Next slide, please.
In Q4, we acquired Roper Rhodes in the U.K., and they are working with three brands, Roper Rhodes, Tavistock and R2, and they are working on the U.K. and Irish market. All products under these three brands are designed and developed in-house, and the production is outsourced to supplier. Approximately one-third of the total sales in Roper Rhodes is in these three brands. It's a wide range of products in each brand as well. Roper Rhodes is the oldest one, it's 40 years old, and wide range of products. The Tavistock is more specialized to serve the distribution customers. Products are used in the B2B sectors. R2 was the reason for that was to...
It was launched 2011, the subject originally to compete in the lower price point segment in the market. It's most furniture, sanitary ware and brassware. Next slide, please. Some words about Roper Rhodes. It was founded 1979 by the family of Roper. It was before we acquired it, family-owned. Mark Roper and Paul Roper, sons of the founder, was the owner. As I mentioned, three strong brands in U.K. and Ireland. Plus 4,200 retailers in the whole U.K. and Ireland. It's national merchants, buying groups, bathroom distributors, and online partners. A broad range of products in all categories in bathroom. So we.
They develop product for furniture, brassware, bath tubs, mirrors, things, all the things you need in a bathroom, and they're selling that in a total package in that case, and a strong management team. It was an external management team when we acquired, and the team is still in place, and we believe very strong in them. That is also one reason why we acquired them, to have the strong management team. The growth and EBITDA result for the year before, in 2021 is in line with where we have communicated earlier. The turnover was SEK 826 million, and the EBITDA of SEK 136 million, and margin of 60%+. The financial performance is in line with our previous communication in the interim.
Each of the brands has a dedicated sales team, so there are three different organizations out in the market. Next slide, please. Yeah, highlights for Q4. We have a strong organic growth. If we exclude acquisition, it's 16%+ organic. Then EBITA result of SEK 32.7 million. It's 61%+ compared with last year. Acquisition of Roper Rhodes, it was a big step for Svedbergs Group. In months we double our size and also get a strong position in the U.K. market with that acquisition. It's also in line with our strategy, our acquisition strategy to be a market leader in selected markets in Europe. As I mentioned in the Q3 report, we have a strong development in Norway under the Svedbergs brand.
The investment in product development and also with Halvor Bakke are deliver very good result. Additional to that, our agreement with Vivat, Norway. I expect that Svedbergs continue that growth in Norway, so I'm very happy to see that performance there. Very proud of the way that we have handled the delivery performance during this year. It has been very good and had a strong delivery ability, even if it's been a quite big challenge with delivery performance from suppliers and availability of freight and freight carrier, things like that. Next slide, please. For the whole year, we continue to work very close with our distributors and their partners. We develop digital tools. We do marketing activities and training, as an example.
We are taking some step closer to them. We are very interested to learn more on the market. That's been very good work during 2021. For the whole year, the growth is 30% organic growth, and all segments are performing well. I'm very happy with that as well. The EBITA margin is improving and we get closer to our financial targets. If we exclude acquisitions, it's 14.7%. It's close to our targets of 15%. The delivery performance, as I mentioned, has been very good during the whole year. We have also succeeded to adjust our prices to compensate the increase of cost for material, but also the freight costs. We have improved on the gross margin level as well.
All the brand companies have performed well, but we are not satisfied with that. We would, of course, like to continue that work with improvements, and we see that it's still possibility to be better in different areas. Next slide, please. The operational highlights. Even though we've only worked with Roper Rhodes for a little more than two months now, it's a very good cooperation. We have a strong feeling that the culture fits very well with the Svedbergs Group culture, and that is a strong management team and also very skilled people. They have a strong focus on organic growth and we are very pleased that they're performing very well. Also happy to see that Cassøe.
It was our, if I say, the first acquisition in the new structure here. They're performing very well, and that's worked very well together. We're working under the cooperation without confusion. We're happy to see that that works, that model is functioning. We're really happy to see that Cassøe has got in a good place in the group. We're also launching awesome new products. The product is one of our most important things to develop and invest in innovative products. It's really crucially important for us. We're happy that we have done that both in Svedbergs and in Macro.
We have succeeded to improve our gross margin with even if it's been quite challenging regarding both the material supply but also from a cost perspective in that perspective. Next slide, please. Our sales per segment in geographic area. Here is Roper Rhodes just one month, so we can expect that the U.K. area, Great Britain, and also Roper Rhodes part of this will grow quite a lot. But we can see that Denmark is passing Norway here and soon to be our second biggest market at the moment. We can see that also Sweden for the 2021 is the biggest market and also Svedbergs segment is the biggest brand in that case. Next slide, over to you, Mats.
Thank you very much, Per-Arne Andersson. Good morning, everybody. If we walk on a high level, the full year financial performance summary looks like this. Net sales increased by close to 34%, of which acquisition part is roughly 21%. There is a small impact on the currency and the organic growth is rounded to 13%. Orders have been good. The book-to-bill index is about 100 for the full year, 2021. The EBITDA level is at SEK 119.3 million, which is better of course than the previous year of SEK 78.2 million. The percentage level is 13.7%, which is an increase of 1.7% versus 2020.
Cash flow for operations is at SEK 25.1 million compared to SEK 33.4 million in the previous quarter. Year to date at SEK 100.1 million and then compared to SEK 94.2 million. The cash flow is highly influenced by acquisition costs, where there's also, of course, impacts of profit before tax. These are in our P&L, impact of one-offs or EBITA as it is not called in Swedish. Next slide, please. If we talk about the sales level, the quarter-on-quarter increase is close to 52%. Sales in the quarter amounted to SEK 280.6 million. The currency effect is largely positive at 0.4%.
In the quarter, sales in the Swedish market were at close to SEK 160 million, an increase of close to 18% in the quarter. Norwegian market had a great growth in the month, sales increased by 31.2%. Increased mainly in Svedbergs with 43.1%, but also Macro Design performed well after a slightly weaker Q3 with an increase Q4 over Q4 by close to 24%. Finnish sales decreased by 11.6%, as a result of the acquisition of Roper Rhodes, sales in U.K. amount accounted for 70% of the group's net sales in the last quarter and are our second biggest market in quarter four. Sales outside Sweden accounted for 43% in the quarter versus 27% of the net sales the year before.
If we talk about the full year performance, sales amounted to SEK 868.7 million, which means an increase of 33.8%, as mentioned before. The currency on a full year basis had a negative impact of 0.2%, so it's very small. Sales in the Swedish market amounted to SEK 562 million compared to SEK 485.3 million previous year, an increase of close to 14% in the period. The Norwegian market is growing and sales increased by close to 70%, and the full year amount was SEK 96.4 million. Finnish sales increased by 1.3% on a full year basis and an absolute value of SEK 65.1 million.
As a net result of the acquisition of Cassøe, as mentioned before, sales in Denmark now account for 12% of the group net sales full year and are the second biggest market. Sales outside Sweden account for 36% of the group net sales on a full year basis compared to 25% last year. Next slide please. If we talk about growth, on the summary page, total growth Q4 52% close to, and for full year 33.8% as said before. If we talk about Q4, the acquisition of Cassøe, who was only in for only one month for the last quarter in 2020, that accounts for 10.2%. Acquisition of Roper Rhodes accounts for 25.2%, so close to 36% in value for the acquisition growth.
There was, as I said before, the currency effect is slightly positive of 0.4% in the quarter. There is an organic growth of 15.5%. If we talk about full-year basis acquisition, Cassøe accounts for 40%, and Roper Rhodes for 7%, acquisition value of the sales increase or percentage is slightly over 21%. The organic growth is at 12.6% for the full year. Of course, there is also that the organic growth includes price increases. We have implemented price increases throughout the year in some companies twice, and in some once a year. If we talk a little bit as already mentioned about...
The gross margin is positive, as Per-Arne mentioned before, is increasing by 0.6% for the quarter, and for the full year 0.7%. That means that we have been successful in maintaining our margins and offset the raw material price increases and the freight price increases with a combination of better volume, the effect of in-house furniture production as well as successful launch of new products with, as earlier mentioned, implemented price increases. If we talk about the EBITDA level, the percentage is improved by 0.7% for the quarter, and for the full year 1.7%. The gross margin of course has impact on the EBITDA as well.
What we can notice of course that the operating expenses has increased due to the fact that the low level of travel and hotel costs in 2020 has increased in 2021 as well as some organizational changes. In that case also that we had for the full year subsidies in Sweden over half a million Swedish kroner in 2020, which were zero in 2021. Next slide, please. If we talk a little bit of the different segments. First of all, of course, we have introduced new segment which is Roper Rhodes in terms of the acquisition. If we talk about the separate segments, the [Swedish] had a good year.
The change in external sales came in at close to SEK 150 million in the quarter and SEK 560 million on a full-year basis. The performance was somewhat sluggish in the beginning of the year, but sales increased significantly as from February and onward. The indexes are at 121 versus 114 on a total basis, which is a solid increase. External sales in the quarter in the Swedish market amounted to SEK 190 million compared to SEK 96 million, an increase of 24%. The development in the Norwegian market has been very positive with a successful cooperation with the Norwegian designer Halvor Bakke. Sales increased by 43.1%.
Sales in the Finnish market decreased by 12% close to in the last quarter, but the sales in Finland are a little bit irregular. External sales in the Swedish market for the full year amounted to SEK 403 million compared to SEK 354 million the year before, an increase of 14%. The development in the Norwegian market, as I said before, very positive, an increase by 37%. Sales in the Finnish market increased by 1.3%, as earlier quarters were better. EBITDA result for the quarter amounted to close to SEK 24 million compared to SEK 13 million the year before. EBITDA margin of 16% compared to 10.7%, an increase of 5.3%.
The EBITDA result for the full year amounted to SEK 73 million compared to close to SEK 55 million, which is an EBITDA margin of 14.2% compared to 12% the year before, an increase with 2.2%. Macro Design also sales wise had a really good year, going above and beyond SEK 200 million in sales. If we talk about quarter external sales close to SEK 59 million, and the year before was around SEK 55 million, an index of 107, and for the full year, SEK 208 million versus 191, an index of 109. Talking about the quarters and the different markets, the main market of course for Macro is Sweden and Norway.
Sweden external sales amounted in the quarter to SEK 41 million versus SEK 30 million close to SEK 40 million the year before. The Norwegian sales increased by 24% to SEK 16.4 million versus close to SEK 14 million the year before. That was a strong performance in the quarter for Norway, which had a little bit more slower sales in quarter three this year. The EBITDA result amounted to SEK 4 million, close to previous year SEK 4.2 million. A slightly lower margin at 6.8% versus 7.7% last year. If we talk about the full year EBITDA result was at SEK 23.5 million, compared to close to SEK 19 million previous year, and EBITDA improvement of 1.4% ending at 11.3%.
Cassøe was only included one month in 2020, but on a like-for-like basis, the index is 115 for the quarter and 113 for the full year, ending at SEK 25.1 million for the quarter and at close to SEK 100 million, SEK 97 million for the full year. The EBITDA % in the quarter was at 19.5%, and also for the year, it was 22.3%. For the full year, the EBITDA percentage is slightly above the EBITDA margin for the previous year if we talk on a like-for-like basis. Roper Rhodes is only in for one month, and the size is still pretty significant at SEK 47.3 million. The result in the...
For the month is negative, which is in line with a normal year. The December month is historically the lowest month for the year and is in line with the expectation. Next slide please. If we talk about the balance sheet and cash flow, I've said before, cash flow for the quarter is at SEK 25.1 million, which is an increase from the previous year. Cash flow is highly influenced by the acquisition cost for Roper Rhodes as well as planned stock build-up for the Chinese New Year and especially the ability to be able to supply. This has been planned. If we talk about the acquisition cost, of course, this also impacts our profit before tax.
Among other things impacting these acquisition costs is that you are obliged to pay a stamp duty in the U.K. of 0.5% of the acquisition value, which is quite a significant amount. If we also talk about the profit before tax, we are also impacted by the financial cost due to the acquisition as well, which means that the profit before tax is negative in the quarter. If we talk about working capital, as said, it follows the pattern except for the stock, where the stock has increased. That is, I said before, to be able to supply during quarter one this year and avoid any hiccup with the Chinese New Year and the shortage and difficulties in some sourcing areas.
The equity ratio for 2021 includes the dividend, which it didn't do in 2020. However, the equity ratio, which is 11.5%, is the biggest impact. There is obvious, of course, the acquisition of Roper Rhodes, where we for the moment have a bridge financing, which is intended to be financed in the end with a rights issue. The net debt/EBITDA increases up to 3.3 from 1.1 in quarter three, which is also impact of the acquisition, and the number is on a pro forma basis and not on the numbers presented in the quarter four report. Next slide, please.
If we will then go into the area of sustainability and leave the numbers for a while. Sustainability is our overall objective to reduce the environmental impact of our products, reduce the greenhouse gas emissions, resource efficiency, wood from sustainable and durable forestry, and responsible business. Next slide, please. The main activities done in 2021 is that we have done the GHG Protocol reporting Scope 1 and 2. We have worked a lot with heating efficiency and energy consumption. A lot of time spent on environmental assessment and, for example, M1 certification of furniture. Some KPIs is 92% of our energy consumed is renewed in 2021. 14% reduced energy consumption in relation to net sales. We are measuring our health presence.
That is close to 96%. We have zero out of 45 accidents with more than eight hours of absence per 200,000 hours of work. Next slide, please. I return the word to Per-Arne Andersson.
Thanks, Mats. On this slide, you see the big stock index for the Swedish market. As I mentioned, our previous presentations during Q3, we are delivering with a delay of around 12 months. We see now that the big stock index here on the projects and construction business is starting to go above zero if you have 12 months delayed. We see a positive trend in product business, and we can also see that in some figures as well. We quite see that as a positive thing. We will continue to invest in product innovations. The product is very important for us to spend money there and also have new products and innovating in the bathroom business. This is the heart of our business.
There is some uncertainties in the world. You have the pandemic and there is price increases, supply chain challenge. We are tracking that as close as we can. As I mentioned before, I'm quite happy how we have handled that during 2021, and we continue that and see if we can are prepared, and we can respond very quick if something has happened. In summary, we believe that the trend to invest in your home will continue. Now even if the society will open up, I think during the pandemic everyone has invested in their home, and they spend more time home, and they see it's quite nice and happy to have a nice and how to say, updated home. Next slide. Next slide, please. Over for Q&A.
Our first question comes from the line of [Ann-Sofie Davidsson] from ABG. Please go ahead.
Hi, Per-Arne and Mats, and thank you for a good presentation. I have a couple of questions, but I'll start off with the margin. In Q4, as you said, you reported a margin of 11.7% and a full year margin of 13.7%. You have a financial target of 15%. How do you see, about fulfilling this goal or towards it at least in 2022 when Roper Rhodes also become a more visible part of the whole group?
As I mentioned, if you exclude the acquisition, we are at 14.7%. We have one month for Roper Rhodes. The figures we have announced in our press release when we acquired Roper Rhodes, the turnover was SEK 826 million, and the result SEK 135 million. That will be 16.3%. Actually, Roper Rhodes full year 2021 is above 15% of our target, and we closed with a 14.7%. With the growth we have and also with this acquisition, we see that we will be in that line.
All right. Fair enough. Thank you. also, continuing in the report and also now you mentioned there is a continued strong momentum for the underlying construction market but also new building. could you perhaps elaborate a little bit more on this outlook for the U.K. market, given that, you know, it will become a more important and crucial market for you during 2022 and onwards?
You can see that the U.K. market were more, how to say, hit by the close down of the dealers and distributors. It was the market was closed during the year 2021. We see there is how to say, an underlying demand for product of this. All the predictions is seeing that the market will grow and picking up to the where the level was before. We see that it will be a positive development on the U.K. market as well.
I assume the same goes for Ireland also where Roper Rhodes have exposure to?
Yes. We can also mention that even if there is a strong pressure on the market, the industry is quite fragmented. There is a potential to grow and, of course, to increase your market share. That is possible. That is another way to see that we are aiming all the time to be a little better than our competitors and better than we were the year before, even if the market is flat, if I say so.
Okay, thank you. And also touching upon what you recently mentioned also about the cost inflation and supply chain disruptions. You have indeed handled it quite well during 2021 and posted a gross margin of 41% in Q4. In December, and also in the beginning of this year, we have seen a surge in electricity prices, for instance, but also energy prices. How do you see this affect you and your gross margin outlook into 2022?
Yeah. It's correct that there are pressures on the market, and therefore we have already announced price increases for 2022, where we actually go with different price increases in different markets. We announced price increases of up to 8% depending on what market and what company or segment we operate. On top of that, of course, we are constantly evaluating our supply chain to offset both raw material costs where possible and of course the impact of the disruptive container shipping market actually.
Perfect. Thank you. Also, I know last quarter we discussed a little bit about timing issues. Is this something that you have noticed during this quarter as well or anything now we are one month into 2022 also regarding that?
You mean the price increase in general or?
No. You discussed a little bit, I know, last quarter in Q3 about timing issues.
Yeah. Well,
If you have had any problem with that.
We have a small. If we talk about specifically about Roper Rhodes, we can say that there was an impact on our shipments in December, as a matter of fact, due to that there was a COVID-19 outbreak in U.K. or uncertainty during December, which means that all the small shops or these people who are in installing actually were closed from Christmas and onward and even before Christmas. That impacted sales with, say, roughly around half a million pounds actually. So it was some kind of disruption, but I mean, on a full year basis, we can't say that it has had so much impact more than that.
We could not see that in other markets actually. There was this more generally linked to UK.
All right. Thank you. Then I have one more last question, just touching upon Roper Rhodes once again. Now, it's been two months since it was consolidated into the group. I know you mentioned a little bit about it during the presentation, but how is the integration going so far, and what's your feeling now after two months?
We are very happy. As when you are a quite good company, it seems to be better than it was before, if I say so, when you saw the figures. We are very happy the integration is going well. We're not integrated so much, but the cooperation is very well. We have bring the management team over to Sweden, look in our production facilities here and see what there is potential cooperation as well. We are working very close to each other and it's going in line with the plan and it's good.
Perfect. Thank you very much.
Thank you.
We have one more question from the line of [Johan Högberg] from Axis. Please go ahead.
Good morning, [Johan Högberg], Axis, Barn here. Just a few follow-up questions. Can you say anything about Roper Rhodes sales mix in terms of consumer and project? How important?
If you look on a year-over-year figure, it's around between 10% or 15% of the turnover in that case. There is actually a potential for Roper Rhodes to improve that area. They're working there, but we can improve that. Around 15% you say of the total turnover is in a project business or construction business.
Okay. Thank you. You mentioned that Roper Rhodes has a budget brand. How important is that for Roper Rhodes? Is it an option for you going into the budget segment in your other brand?
If you compare the market outside Scandinavia, I will say it's a wide range from low-end products to high-end products. That's more that you would like to take a bigger part of the market. I will say that you have brands in mid-high and mid-low. It's quite in the middle anyway. That's the position of Roper Rhodes. If you compare with the old structure, Svedbergs and Macro brands that we have that kind of furniture product, there is a range price-wise, especially in Svedbergs , but it's from a lot more, how to say, lower specified product or more mid-high specified product in that case.
We have a quite good range there.
I will say already today in Scandinavia.
Okay. You recently discussed a rather large investment in a new factory, wood processing. Is that linked to acquisitions you have made? Is the plan to insource or is it more, increasing capacity for growth in general?
It's two reasons for this, actually. It's one thing is that the machine that we have today is old-fashioned, and it's built for another kind of production, which it will be more mass production if I say so. With this new, we will be more flexible, and we will also improve the capacity as well. Even if we not work on synergy, it's of course good for the whole group when we have a factory that is very good in wood production, that they also can work with an internal client or customer, if I say so, in that way. We're looking to see how we can improve internally in different kind of projects together to save costs and improve our margin as well. That is not the main reason.
The main reason is to replace an old, how you say, outdated production line in that case. It will give us possibilities to improve in other areas as well.
Okay. Thank you very much. That was my question.
Thank you.
As there are no further questions, I'll hand it back to the speakers.
Okay. Thank you very much, and wish you all a happy weekend.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.