Good morning, ladies and gentlemen. It's 11 o'clock on my, it's not a Swiss watch. We would like to start in time. I would really like to welcome you on our analyst conference of the year 2022. You see at the first picture a roller coaster. This should describe a little bit the situation that we were facing last year. We started very good into the year. We were faced with situations such as the Ukraine War, supply chain challenges that probably almost everybody was facing, energy price increases, inflation. These were major topics that we had to deal with. Long delivery times because of the higher order intake we had in the year before with a big backlog starting into the fiscal year.
What we want to do today is we'd like to give you an overview of our entire group. After that, we will give you more details on the results and the ad hoc that we have issued this morning. This is going to be done by Mr. Heinz Hössli, our CFO. After that, we will talk about the backbone, how we get through the situation last year and what is now in front of us when we talk about production, and this will be done by Jens Strüwing, our Executive Vice President for Product and Technologies. After that, we will take care about our most important topic, our customers, and Mr. Maurizio Catino, our Vice President for Sales and Solutions, will give you an idea of how we approach our customers and how we get into long-term relationships with our customers.
Finally, I will go for a wrap-up and also an outlook. Then we are open for questions. We have, by the way, physically a lot of people here, we really appreciate that because we like the interaction also physically. This year we also have a digital channel open, so we have also partners on the digital channel as well. Talking about the group figures. You read it, I guess almost everybody of you. This year we achieved CHF 664.4 million of sales, the highest sales ever in the history of Interroll, whereas our order intake just landed at CHF 572.6 million order intake. Mr. Heinz Hössli will dive deeper why we achieved that order intake. On the EBIT, we achieved CHF 105.2 million EBIT.
This is the highest EBIT we ever achieved, this equals a EBIT margin of 15.8, which is 0.3 points above the value we achieved last year. Talking about the order intake and the distribution amongst our product portfolio, 8.5% on pallet handling, 14.5% on conveyors and sorters, our solution business, 31.6% on drives, our product business, 19.4% on rollers, also our product business. You see that these numbers shows our long-term strategy and supports our long-term strategy that even in uncertain times, we were capable of dealing with these kinds of challenges . Talking about growth. Our growth is being based on three major pillars. One is the solutions, second is customer and markets, the third pillar is service. What does it mean?
Last year, we were really looking into our solution business, we put a lot of effort into developing our portfolio further on. Last year, we issued in almost this time in the year our new food conveyor platform. This is just a logical step because with our drum motor business, our product business, we were able to enter the food market, now we extend this with our product platform business even further, Mr. Strüwing will give a detailed view into that. We extended our controls family. Based on the semiconductor shortages, we made a decision to come up with another controls family because we wanted to differentiate ourselves a little bit have a brighter possibility to source semiconductors not just rely on one semiconductor supplier. On top of that, we also upgraded our MPP platform.
We just recently issued our new platform for pallet handling just three weeks ago. This is what we really dealt with last year, and I'm very proud of that. More so, we are now going to issue in the LogiMAT in Stuttgart in beginning of April our new HPP platform, which is for the high transport business in the e-commerce and parcel business. Here, I must say we will come up with a product that nobody else has. We have really a big differentiator compared to our customers. Mr. Strüwing give you more details on that afterwards. On the region, we, you know that we plan to invest over the last three years a total volume of CHF 150 million in capacity increase.
We postponed a couple of things last year because of the difficult situation that we were challenged. This is now planned for this year, depending on the development of the market. We invested further on in our plant digitalization because we see this as one of our major strengths, especially when we talk about our own Interroll Production System, which does help us. In Americas, we are now gaining back market in Mexico. This is for us a very high developing market, and we just restructured our facility there with new people on board, and we extended our facility in Brazil. Asia Pacific. In Q3 last year, we opened up our new facility in Suzhou, completely new plant that went quite smoothly.
Unfortunately, we had not had the chance to really celebrate it because of the travel restrictions, but I think this will change now. In Australia, in the Asia Pacific region, we see a higher demand for project business coming up. Service, I'm happy to say that we have now our service organization full up and running in Europe with our spare part facility in Ketsch. We started to work already last year now for the rollout for the service business in the Americas, and Mr. Strüwing will give you some more details onto that. What I'm really happy about is that with the high installed base that we're having, for example, more than 500 sorters in the field, we now have also the possibility for retrofit business in our service area.
I talked about the long-term strategy. I just wanted to show you what we mean with long-term. You see now a picture that is lasting back until 2000. This is what we understand as a long-term strategy. We're thinking in decades, and we are now in the 3rd decade of the strategy. In this decade, we are basically focusing on 3 major topics. 1 is modularization and digitalization, 2nd is industry solutions, and the 3rd one is business excellence. What do we mean with modularity and digitalization? When you were young, I guess almost everybody of you played with LEGO. This is what we understand as modularization. You can buy a brick, or you can buy the full set of LEGO. This is not just a mechanical topic that we're dealing with, it's just also electrical topic.
Now we are also investing into software. We go really into the digitalization here as well to come up with a platform strategy for the software. The second major topic is we derive out of that a complete system architecture. If you buy a sorter from us, you can say you can buy it as a mechanical part, as probably, as a mechanical and electrical or mechanical, electrical, and software-wise. Second topic, under that topic is the customer value. We really focus not just on selling him a product, it's really selling him a solution, understand the customer pain and give him the respective product or solution for that. We call that customization by configuration. Having a setup of modules and products, combining that and create good solutions.
We talk about industry solutions, for us, it's a deep understanding of the customer demand. Talking, asking, understanding, then delivering. That's for us very important. Second major topic here is sustainability. You know that we have issued first time ever, Mr. Hössli will go into that, our sustainability report, we mean it as we say it, right? You will see a video of what we think the future in our industry is going to be, it's sustainability and energy. We really need to take care of the energy consumption. This is where we put focus on the total cost of ownership in the future with our customers. Also in industry solutions, we're also trying to sell more of our solutions with the customer.
Getting in contact, for example, into the food business with Drum Motors and then open up doors for additional products and solutions out of our food platform. On business excellence, for us, two things are very important. Learn from the best internally and externally. That is something that we are really taking seriously. We are looking into every industry to learn how to get better. The second one is implementing global standards. Interroll is one of the companies that has a global footprint, and we'd like to get really global standards in place for that. Second one is productivity and transparency. If we talk about digitalization in production, we take that seriously. We'd like to get more transparency into our processes to improve ourselves and to increase efficiency. The third topic is service business.
We feel responsible for our customers, therefore, we don't just wanna sell the product, we also wanna take care of the product if there is a demand out of the market. Having said this, I now would like to take the chance to give you an overview of the detailed numbers and the achievements of this year. I would like to welcome Heinz Hössli on stage.
Thank you, Ingo. Ladies and gentlemen, also a very warm welcome from my side to this conference today. I have the pleasure to present you the figures of last year. I would like to start with the orders released. The figure is not new, it's just confirmed. We published it in January already. To some of you, it looks somehow awkward in the picture, and I try to give some explanation to it. If you look at the 5-year chart, you see very much what we said last year. 21 order intake is an outlier. Too many things have come together. We see this has to be flattened out. It all started in 2020, where we have seen many project postponements during the COVID crisis. People have not released projects, even though the product business was doing good.
On the project side, we have seen a lot of postponements. Suddenly, spring 2021, this golden knot was loosened, straightened up. We received a lot of orders in a very short period of time. This is what is reflected in this peak of 2021. At the same time, the supply chain issue started to really get bad. Customers, as we also did, we increased our inventories. Our customers did exactly the same. They ordered like there is no tomorrow. This is reflected in the order intake 2021. This was the case. Nobody knew exactly. Nobody was transparent. Nobody was really open to say, "Yes, I doubled my stock," because then probably they would not have gotten the entire quantity. This was the case. 2022, we have seen that there is a normalization in supply chain, especially in the H2 year.
It came very fast, not really something what we have foreseen when we had the webcast beginning of August for the first 6 months. This was good news for us. We could reduce our delivery times to pre-COVID levels. Also, the entire supply chain improved a lot. We reduced our backlogs, so we could get risks out of our business by reducing the backlog which we have accumulated with old prices. Since September, on the product, we have new price in the market. This was supporting. What we have seen is the project business, same situation like 2020. Postponement, postponement. Strong pipeline. Probably, we have the strongest pipeline ever in the history of Interroll, but projects are on the timeline, just skipped 1 month, postponed 2 months, postponed 1 month. This is why it led to this order intake.
On the right side, you see the distribution. This is just a reflection of what I said. It's not one product group. It's across all 4 product groups. There's no big difference between the project business or the product business. It is really almost the same. We come to sales, you see a different picture. The picture on sales is quite good. We have 3.8% growth in CHF. We have 8% growth in local currency, we have also faced a negative currency effect. The highlight, clearly, EMEA, with a growth of 14.5%. This is the highlight of last year. Americas, a growth of 4.1% is also very good we have to consider that Americas has grown more than 30% the year before. It was a steep growth.
Now, slower growth, but still on a growth path and keeping the high level. Asia-Pacific, -35.5%. This region really faced a lot of headwind last year. It was the lockdowns. It was the COVID situation in China, this zero COVID policy. Suddenly, everything was changed late last year. Also the travel restrictions. Everything came together, bad environment, and this is the result on the order intake. I come later on a little bit what my personal thoughts are about this region. When we look at the split, you can see that now EMEA with this huge growth is again 58%. Americas could keep the share at the 33%. This is the same like last year. Asia-Pacific lost from 15% to 9%, 6 percentage points, which is quite a lot.
Nevertheless, Asia-Pacific as a region mid-long term is clearly the region which has the biggest growth potential for us. This is the less mature region. Europe, EMEA is clearly the most mature region we are in. Americas has caught up a lot. Asia-Pacific is the region where we have much potential to go midterm. The entire Asia or ASEAN region is also, in general, a region which will most likely grow over-proportionally in the future. I'm confident that we will still keep this 50/50 promise, that we want to come back to 50% EMEA, 50% from the other two regions, this will be the target unchanged to what has been in the past. This is hopefully a hiccup, then we go in the other direction again and gain market share in Asia-Pacific.
I would like now to come to the profitability. Start with the EBITDA. The EBITDA grew 5.6% to CHF 129.3 million. The really good thing is that the EBITDA growth is higher than the top-line growth. The key driver for this is really our cost discipline, our cost fitness, our ability to react fast to changing environments. This has underlined in 2022, which was a difficult year for Interroll, as for many other companies as well. The other part was clearly the improved supply chain, which helped us a lot in the H2 year. You see, if you go through the figures, you see this, it's easily visible how the H2 year has been. On the profitability side, very high.
There we had factors which came in from the supply chain improvements, from orders which have been postponed, where we could realize the sales in the last two months of the year, where it was always unclear, do they get postponed into the new year? Are we in a position to deliver still in 2022? This helped to improve this in the H2 year of 2022. When we look at the EBIT, it grow 5.9%, it's slightly higher than the EBITDA. The reason is because even though amortization and depreciation in absolute amount is higher than the year before, also due to the investments we have done, has not grown proportionally with the top line.
Slightly under proportional growth, slight increase on EBIT. When I come to the result, to the net profit, you see an increase of 2.7 to 82.8%. This is a record value, and there is just one impact, and this is what I mentioned already last year. The tax rate last year was incredibly low with 18.8% if you consider our big operations in Germany, which is also the highest tax rate we have. This was very low, not sustainable, and we are now coming back from this. We are now at 21%. The long-term rate is between 22 and 22.5%, and we see that we will also go back to these levels if there is no big change in tax rates.
Operating cash flow developed very positive, +51% to CHF 71.4 million. The base was clearly the result. We started to reduce our inventories. We have reduced CHF 18.7 million in inventories, which was the key driver for this improvement. We have paid a little bit less tax, income tax, this is just shifting from one year to the next. Overall, it's clear higher profit, you will also see increased tax. The key driver, reduction of inventories, this is something which is ongoing in the industry. When we look at the free cash flow, this has increased a lot. We had a negative free cash flow last year when we have built up net working capital. We have now CHF 49.2 million free cash flow.
The investments, you will see, are far below the CHF 50 million we always talked. The investments with CHF 32.5 million. It's not that we saved a lot on the investments. We made savings on the investments, but we have postponements. My colleague, Jens Strüwing, will elaborate a little bit on the postponements we have. When we come to these two KPIs, and we see this over the time, you can see that both return on equity and return on net assets have slightly come down compared to last year. Return on equity actually is positive. It's not a negative development because the reason is that we have the highest ever equity in the balance sheet. The equity is more than 70%. This is good from our view. We are fully independent from any financial institution. We can run our business.
We have the freedom. This is what we want to have. This is what we want to continue. Looking at the return on net assets, we clearly still see the higher net working capital is having an impact there. This should also improve when we go into normalization. Some words to the dividend proposal from the board of directors to the annual general meeting. The dividend is proposed at 32 CHF, so it's 1 CHF more than last year. If we look at the payout ratio with 33%, this is basically unchanged. I think this is exactly what the estimate also was. We have a clear policy, one-third dividend, two-thirds we invest in the company. We keep to this, and this is just a reflection of it. It's nice to show that we can increase dividends over time.
On this long-term chart, you can see this, the only time the dividend has been decreased was after financial crisis. Otherwise, it was flat or increasing. If you look at the value, 2002, 2003, CHF 2.50, now CHF 32 per share, and there was no change in the. It's the same shares. Nothing has changed. It's a pure reflection of the development of Interroll, of the profitability of Interroll. This is, I think this chart shows it very well. It's a huge compound growth if you calculate this from the CHF 2.50 to the CHF 22 and shows the strength of the company. Now, some words to the sustainability report. We announced this a year ago. It was a journey. It was not always an easy journey. It is a lot of work involved.
We mean it serious, it's not only the paper what you see on the desk. It's really all what has gone in. We have it now. It's the first sustainability report with GRI 21 Standards. We have developed our materiality analysis. We have 12 material topics which we describe. We have also the policies on the internet publicly available with all the KPIs per topic. With this, we clearly show again a strengthening of our commitment to the UN Global Compact and to the sustainable development goals. It's really something we want to live. We drive it forward. This is how we have structured it. This, ESG, so number two, three, four is clear. Everybody has it. We have added one, and particularly as number one in, even though they are all equally important, but the economic is an important factor.
If the company is not doing economically well, then ESG is on the paper. It is important that the company's doing well, can invest in doing better, and this is why we have these four pillars and not only three pillars in the framework. On the bottom is the purpose and the value. It is fully embedded in the corporate strategy, which in my view is key. This is the only way this can go into an organization, and this is a lot of change management in the organization. Then we have built this framework on top, and there is clear we have outside-in views, we have ratings, we get rated, and we are really looking forward now how we, how this will change. In the past, it was very clear ratings purely done on KPIs you publish, we were on close to zero.
When ratings were made on the stories we had on energy savings topics, then the ratings were quite good.
The MSCI rating is still an A, which is good considering that we have never published any qualitative figures. You see the four impact areas, and you see our 12 topics. I will not go into details. If you're interested, you're very welcome to read the report and go through the report. Before I close, I would only make one hint that we have now everything on our online digital platform. Sustainability report with all the documents. We also have the annual report there with all the documents. We have content, which is online only, so you will not have it in the printed version. It's multimedia content. It's a video with our CEO, Ingo Steinkrüger. Please have a look at it, and we would also appreciate your feedback about this.
It's more and more the way to go into full digitalization also on this end. The video you will see now is somehow a good bridge when I hand over to my colleague, Jens Strüwing, because it is about sustainability, and it really makes a good bridge to his topic, the backbone of Interroll. Thank you very much.
The Triumph company in Obernai, Alsace. A huge, complex delivering machine with more than 7 km conveyor lines for the more than 12 million stock keeping units. At Obernai, it's not all only about throughput. Triumph International has been setting ambitious benchmarks when it comes to energy efficiency, be it heating, cooling, lighting, or material handling. Finally, the team in Obernai opted for a smart retrofit. The profiles were kept, and just the decisive parts have been modernized with highest expectations.
We hope to achieve a 50% energy reduction in a conveyor renovation between the old and new versions.
Thanks to the modular concept of Interroll's RollerDrive, it was a breeze to conduct this retrofit for Triumph with its own team and just in time. The new solution of choice is Interroll's EC5000. It stands for zero maintenance and provides zero pressure accumulation. The energy usage was also measured in detail.
I placed energy meters for a one-week measurement on both phases of the delivery. The old version with the asynchronous motors, which consumed a bit more, and the new phase with the Interroll motors in 24 volts. The sum of the results already allows us to confirm a reduction in consumption of around 43%.
After finalizing the measurements, more than 48% of energy reduction have been achieved. Proven.
Ladies and gentlemen, also warm welcome from my side. Thank you very much, Heinz, for handing over. I really do think that the video really shows one of our focus topics we are dealing with at the very moment. One focus topic is energy saving. Here we can combine our activities of our service organization going into retrofit and providing for the customers a significant decrease in energy consumption. The second focus topic we are dealing with at the very moment is digitalization. Digitalization in terms of product digitalization and process digitalization. I will come to these topics later during my speech. Going first into the operational challenges, 2022. I think you all do know where we have been coming with the COVID crisis. Material availability was really hurting us.
It was not just the semiconductors, but it was also some other product groups like the polymers, but even some steel materials have been short. Having recovered this, we really have to focus on our P&L and balance sheet. Looking into the figures, what Heinz Hössli did just show you, I think we have been quite successful in the last year. We were looking into four major initiatives. The first initiative is the flexibilities and capacities. Our customers are asking for shorter delivery times, for shorter lead times, and this is where we have to go into adoptions of our production system. The so-called perfect factory is key, and this is exactly what we are focusing on at the very moment.
The perfect factory goes absolutely in line hand in hand with digitalization, with information availability from the customer side but also going into the production side. The second hot topic for 2022, but going into 2023, is the inventory reduction. You all do know 2021, with the semiconductor crisis, we were not able to serve all of our customers. What we did do that time, we did significantly increase our inventory level just to secure the availability for our customer base. As the situation did change, at least for most of the parts, we have to decrease now our inventory. In 2022, we had a decrease. You were pointing out the pure financials with CHF 18 million. It is a decrease of 16.6%, what we have achieved in 2022 and more to come.
At the moment, we're also changing our order pattern, going into a more intelligent planning method. On the purchasing side, we did also lose some % in 2021 with the material shortages, the material prices were getting up. In 2022, we were focusing with our purchasing organization to win back some of the points we did lose. I also do think it's a quite good result with 6.5% material cost reduction, which is reflected as well in the result Heinz-Hermann has been showing. We were also looking into alternative technologies because especially the electronic crisis is no more the semiconductors, but the small MLCCs, whatever goes into a cabinet. Even motors, you have a lead time up to three quarters of a year. This is exactly what we're doing.
We are at the moment re-engineering some of our products to have here a second product line, to be more independent from the one or the other supplier of these electronic components. Last but not least, process optimization is a major topic. We have our internal Production System in place, which we are at the moment trying to get more digitalized. We are looking into innovative products, but this is a topic I will want to tackle later in my presentation. First of all, I want to give you an insight on the capacities we are investing into at the moment, especially into last year and ongoing into the year 2023. We are focusing on a certain growth pattern for the next year, and this has to go in line with having the respective capacities that you can serve the customer demands.
We had the possibility in Europe, in the wider area of Düsseldorf, in our location at Baal, to purchase a neighborhood building, which was a warehouse. This one is being transferred at the moment into a production location, especially for our food, conveyor platform. We will have an additional 7,000 square meters there. In Asia-Pacific, we did start in the Q3, our own production facility, moving from a leased one into our own with 22,000 square meters. In China, we are producing there the rollers, the drives, and the conveyor systems, for the boxes and for the pallets, as well as the sorters.
Last but not least, at the moment, we are heavily investing into our South American facility in Brazil, where we're extending our factory with a small additional production space of around about 800 sq m for the products we are producing there. Going into the innovations. Last year, I did focus on the food. I can tell you from the food platform, two parts are in the market. It is the UHT and the SHC, and a third one will come later this year. The one which is missing is the so-called Open Food Platform, and this one will be launched later this year. I want to focus on the control solution. Vertical integration was our buzzword.
Vertical integration means besides the hardware, what we have been offering with our products and solutions, we are now more going into electrics, electric installations, but also into software, and here, especially the controls. We did upgrade our MultiControl with a new bus system, which is quite popularized well in the market, the so-called RB bus system. Last but not least, we have our LCP AMR Top Module, and the LCP AMR Top Module is an extension of our Light Conveyor Platform, where we will combine the robot systems, the AMRs, the autonomous mobile robots, with the stationary conveyors, our LCP. We want to offer, starting in the Q3 of this year, a new product.
This is called the top loader module, which will be a standardized module, which is then really connecting the different drive motors with the stationary conveyors. We are testing this at the very moment with some of the major suppliers of these AMR robots. I do think the highlight, which will now be launched at the LogiMAT in April, is our High Performance Conveyor Platform. The High Performance Conveyor Platform is the missing gap to our sorter platform because you have to feed the sorters with a high-speed conveyor. This throughput on those conveyors is quite high. It is a different setup than the MCT. We did run an innovation process, which is now finished, which is close to the market launch.
The beta tests are done. We got a real good feedback already from our customer base. The specification of this platform is speed up to conveying speed up to 2.5 meters per second. especially, it's a modular platform as we do know it from Interroll. You can really plug and play the different modules, and you can set up your own solution here, your own conveyor system. The center heart of this platform is the so-called MultiBelt Switch. Ingo Steinkrüger was talking about the unique selling proposition, and this is exactly the unique selling proposition. We have here a conveying capacity for this so-called diverter of 6,000 parcels per hour, which is basically double the speed that the competitors can offer today.
It is a proven Interroll solution that means easy to blend with our digital Layouter tool, easy to install with the modular platform, but also easy to service at the end of the day from our service organization. Going into digitalization, Ingo was talking about a system architecture framework. This is our backbone of digitalization. That means this is basically our bible, which we have defined how digitalization should look like. We are working on three pillars of digitalization. One, you have the product, you have the processes, and you have the production. On the processes, we want to be a partner easy to deal with. Easy to deal with means our product should be easy to be blend, it should be easy to install, and it should be easy to service.
This goes for sure into a digital approach with the respective tool. We have here online workshops where the customer can order with. We have a CRM, where you can follow up your projects, and where you can give the customers all time information on the respective lead time. Looking into the product itself, it's all about big data. We really want to serve the customers with the information on the actual status of their systems, so that they can really go into preventive maintenance where we can also then support our customers with our service organization. This is all connected with data collection, what we are going into this one. Last but not least, we are looking into our process optimization.
This is strongly connected with our Interroll Production System, which is now going to be fully digitalized. My last slide is a wrap-up of what I did present last year. The INTRO service, and I really can say MEA is done. We have now our central warehouse for Europe in the center heart of Europe. In the center heart of Europe is nearby Karlsruhe, where we have around about 4,000 parts on stock, and we can serve the entire customer base in Europe from the very south to the very north, from the very east to the very west, within 48 hours with a service above 92%. This goes here, especially in the spare parts logistics, but this goes also into maintenance activities.
We have here a network of maintenance teams, located in Europe, and this goes into installation support for the systems as well. More to come. As Ingo did say, Americas is on the way. We did start in quarter four. We want to finish in quarter four, 2023. As you can imagine, the Americas going from the very North Canada to the very south in Patagonia is not that easy to handle than in Europe. There's not just one central warehouse you can set up. This is a little bit a big, bigger challenge what we are facing, and this goes especially into our maintenance activities and the spare part activities. We are looking forward to get this one finished in 2023.
The last region which is missing is then Asia, which goes into our strategy plan for 2024. It's not just ramping up the business in the regions. We also want to extend the business. One topic we are looking into is the consulting. We really want to support our customers in optimizing their own systems, in finding new ideas when it comes to conveying. We want to offer training to our partners. That means the system integrators and also the maintenance teams of our customers.
Last but not least, and this closes the loop of my presentation, retrofit is one important topic, and I think this is really one of the most important topics for the future, because retrofit will lead to severe changes if you take a look in the total operational costs, which will be much, much more important in the future than the CapEx to be spent. It was a pleasure to give you a short insight about the operations and the products within Interroll, and I do want to hand over that point of time to Maurizio, giving you some insights on the customer promises. I have here a message I want to give you. If there are some questions, please post those questions after our presentation. We have some room for a Q&A session. Thank you very much.
Good morning, ladies and gentlemen. Also from my side, I'm Maurizio Catino, in charge of the sales organization. I'm here to explain you where are we with our customer journey. We believe that obviously our customer is the most important asset for the company, and I wanted to show you what are we doing in this direction and where we see our opportunity for growth in this direction. One of the very first move that was done a couple of years ago in regards to the sales organization was to move from the so-called transactional sales model into the solution sales model. In a nutshell, what does it mean? Mainly business-to-business sales organization in the last 20 years were built on the transactional, let's say, model.
The transactional model is, sees the sales organization like a sort of consultant on the level of product to the customers. The customer has a problem, very shortly, the sales people tells them what product can solve this problem. The movement into the solution sales is a radical movement. The customer doesn't know what problem they have, but the sales organization is able to tell them what he can do better, how he can improve his process and flows. Therefore, this creates a completely different trust with the customer. Easily, as a last step, we can move the customer from a normal partnership into a strong partnership. You know, I will show you how a partnership can drastically influence our results into the sales team. Very briefly, I have some example here.
These customers are customer where we have actually open partnership. Why? I mean, this partnership and why we are so optimistic and positive about this. Well, for our customers, especially system integrator and OEM, these are the two core customer for Interroll organization, as you know. Digitalization is one of big topic. Automation is another big trend. There are no people available. More and more companies want to automate. Obviously, they start to see that their core business is not anymore building conveyors. Their core business is digital solution, software, connection with the high level, let's say, end user systems. Therefore, they are willing to cooperate with companies which are good in that, where the core business is building conveyor.
Therefore, they're approaching more and more Interroll Group, and they want us to cooperate and to outsource their, the conveyor technology to us. This goes in completely different market, because if you look at these three companies, viastore is part of the Toyota group, and they are in the general material handling. Schmitz Automation, they are in the airport business. Morel, in the food business. As you see, this is a clear trend, and this is not specific to any single market. You know, we have also, in parallel, a partnership program called Roll on Interroll. This is a proof of what I was telling you. You can read the number yourself, but at the end, this community is growing. The spending of the customers in this community, in average, is much higher than all other customers.
This proves they are really, really close to us and, let's say, the share of wallet of these customers is completely 100% on Interroll portfolio. They don't even evaluate any competition solution when wait, they know that Interroll is the solution. On top of that, they are also giving us a lot of opportunity in regards of the innovation because they are telling us what their customers are willing to have, and therefore, driving also our innovation process in the right direction, being much more target-oriented with them. Another pillar for the sales organization in the future will be the digitalization. We are moving in this direction quite strongly. I'm a big fan of the fact that sales is not only on the past. Sales needs to see and look at the future.
Digitalization is the best way to look at the future. We have taken a lot of initiative in this sense. The first was to establish, one and a half year ago, a business intelligence team, which is now up and running. They are constantly working on our competitional escape and on our potential market growth. They are feedback our sales organization on where are the areas of growth that have the highest potential. Therefore, I mean, targeting specifically where we have highest chance to win customers. The successful rollout of CRM is another big topic. We have now this CRM system, customer relationship management, globally rolled out, giving us a clear picture on the future forecast.
We can really now see in the coming months what is the market trend, in which area we are doing okay, in which area we need some specific actions. We have implemented a digital platform online where customer now can do two things. One is buying online our products, but even more important, we have the so-called headless approach, where the sales and purchasing connection toward our customer is automatically, and there is no human interaction in between. This goes automatically from system to system, freeing up our people time and obviously giving more resources into the real sales activities. What is our customer promise? I have summarized in these three words, and these are the three words that Interroll, since a few years now, is showing: quality, speed, and simplicity.
Quality is also not only going into the product quality, it goes into the team and people quality. It goes into the quality of our tool towards our customers. Secondly, speed is not only delivery time, it is how much we help our system integrators to be faster in their planning, and this is a big value for them. This is money, pure money for them. Finally, simplicity. I mean, simplicity, it means we have to make our customer life easier and simple, and this is the way to the success for this organization in the future. Thank you very much. I give the word to Ingo for the conclusion.
Maurizio, team, thanks for your part. I'm impressed. Ladies and gentlemen, just give me the chance to do a quick wrap-up before we go into the Q&A session. You've seen what kind of efforts we put into our organization, our company, and I was asked like, "Mr. Steinkrüger, how can you achieve that?" I said, "This is hard work every day. It's not flying by." It's really the ambition that we're having, the motivation that we're having, and we have good pillars that support that. First of all, we're taking care of our customer and market. Like Maurizio showed you, we are trying to extend our strategic partnerships, which is of essence for us.
The Rolling on Interroll program now having 125 Rolling on Interroll partners globally, from Uruguay, from Chile, to Australia, all in this program. We're extending this. The digital sales platform, headless approach, no person interacted, so we can take care of our customer, listen and understand. It's so important for us. The global lifetime service, not leave the customer alone after he has bought the product, no taking care of him afterwards, is of the essence. The strong innovation pipeline for us is a must, because we'd like to keep ahead of our competition, so the good food convenience platform we discussed. The software and controls is of a core discipline that we're trying to extend right now. The HPP platform, with the High-Performance platform that we just showed.
For me, a highlight is as well the LCP top loader. It's not just a small product. It is more. It's a connection of the physically installed convening to the flexible installed robot business. We are actually doing is we're diluting the system, the borders. We open it up, we create interfaces for these two worlds working together, the extension of our sorter family is of the essence. Business excellence, two major things: cost-fitness and breathing facilities. This makes us reliable. This gives us the ability to react on whatever is coming along. The capacities for future growth are in place. We have a financial strength impressively shown by Heinz, our own internal production system gives us the ability to increase our efficiency.
The platform strategy for us, it's quite clear. We'd like to deepen our platform strategy even more so to give more value to the customer. We also wanted to, with the digital tools that we put in place, accelerate the working together with our customers, enable our customers to do more business easier with their customers, with the digital Layouter, for example. For us, as impressively being showed, sustainability and energy saving, and here we start discussion with our customer about Total Cost of Ownership. It's not the investment at the front, it's the entire life cycle he needs to put into consideration, and this is what we are working on. Last but not least, for us, what's the most important thing is we'd like to be reliable. Our solutions are proven.
Not just the product itself, also the interaction that we have in our organization and with our customers. Giving you an outlook, for us, it's quite clear. The fundamental drivers of the markets are intact, and we are monitoring further the supply chain as this is developing. In principle, we are cautiously optimistic, but we also watch the economic development that harbors uncertainties as the global markets have not stabilized yet. Now we are open for questions. Thank you very much. First question.
Without microphone or?
If you speak up loud or I repeat your question.
When you had the order intake at around the middle of last year, all queries were about U.S. e-commerce, but looking at the revenues you generated with conveyors and sorters in particular, there's no such effect in the revenue figure. Is there yet a decline to come, or is there some magic in there?
I didn't get the beginning of the question, sorry.
There was a very weak order intake at, in the first and H2 of last year.
Yeah
from U.S. e-commerce.
Yeah.
I think that was the reason for a profit warning, but looking at the figures, I'm impressed by the conveyor and sorter revenues.
Yeah. If, again, everybody comes up on the stage because I guess we have more questions. Coming to that, right? We told you in the, especially in the profit warning that we were not able to get all the prices into the market yet, right? We had a lot big backlog, especially with bigger projects. Sorry. With bigger projects. We have worked that backlog off, and we were able to input the prices now into the market, and this is major, the major impact of our profit increase in the H2, as we said.
With regard to volumes, we see no remaining weakness from U.S. e-commerce now in your volumes. You produced in the H2, and you're producing in this year.
Now maybe I jump in here. When you refer to it, no, the profit warning we did because we have seen
In the project business, a shift started in May, June.
Yeah.
This has not recovered. We did never mention that this is coming from pure e-commerce. This is the general media, what you get from the media.
Yeah.
Everybody's talking about Amazon. We did clearly say that, also in the US, clearly, one thing is clear, Amazon, yes, they did stop investments. They did kill also greenfield announced investments where they have not even purchased the land. Our customers are much closer to this. The integrators, they are really suffering from it. We did not suffer any cancellation out of the US, out of this area on order intake. It is clear, yes, these were the projects which also were in execution postponed, postponed.
Yeah.
This is what was I referring to. In the last 2 months of last year, we could deliver quite a bit of such equipment to the customer and realize the sales. Does this answer?
Yeah. Also, because this e-commerce topic is always coming around. You know that e-commerce is like 20 to 25% of our entire sales. We're not just depending on this one, right? Next question.
Yes, good morning. Serge Rotzer from Credit Suisse. First question about backlog in the H2 and orders in the H2 on the CapEx. First, in H1 you mentioned to us that you have CHF 150 million backlog. Can you tell us where this number is today, more or less?
Yeah.
With that, I'm wondering then you had CHF 270 million orders in the H2 of last year. Normally, the sum of orders of last year H2 and the sum together with the first 6 months of this year gives about the sales of the current fiscal year.
Yeah.
To remain stable, you would have to achieve about CHF 400 million order intake. Can you help me? Will you not grow this year, or will you have such a nice order intake, or do you still have such a high backlog, or will help me to understand the potential?
Okay, good. Probably start with the first part of your question. The backlog, that we had last year, was on a very high ratio. I think the book-to-bill at end of December, Heinz, was 1.28.
CHF 1.26.
1.26. This was the order backlog. We started this year, end of December, with a book-to-bill of 0.88. You know that we have. Our business is not just related on the book-to-bill. Like, in the system integrator business, we have a really short turnover from order to delivery. What we're currently seeing is that we basically are on track with our budget for this fiscal year. We are quite confident that if that goes ahead and the market develops like it is, that we will achieve our target that we have set ourselves for this year. This looks quite good.
Okay, we'll meet you later on again. Second question on CapEx. You mentioned that you have postponed some investments. Can you give us more flavor here?
Yeah.
What has it changed? This would be question number one. Question number two is you mentioned in the slides that you have CapEx of CHF 32.5, but when I look into the annual report, I only count CHF 26, but probably, I don't know what happened here. The third here on CapEx is you mentioned that you want to increase investment into software. What does this mean for CapEx, or do we expense this? So also accounting treatment, what are the plans here?
Okay. First and third question, Mr. Strüwing, and second question, Mr. Hössli.
Looking into the CapEx, it just mainly goes into buildings and machines, and there are two major projects which we have postponed. This is the extension of our Wermelskirchen operation. That means the RollerDrive production. This was the one I did present the extension or the renovation of this building, what we have purchased. Putting here the food conveyor into operation has been postponed from 2022, and we are doing this now in 2023. This was the postponement basically on a roughly CHF 12 million investment.
If it comes to software, is I think you do know that two years ago, we did acquire this small Austrian company, which has been grown significantly since that time, and we are investing a lot in software operation, which goes here into especially into controls. Not just the sort of controls which we have in place right now, but also in the decentralized controls for all of our conveyor systems. This goes more into an own investment into products.
Good. Just, going on this, third question. Everything what we do, which is R&D related, is fully expensed at the time.
Yeah.
We have never capitalized any R&D cost. To the other one, Mr. Rotzer, this is the view. The CHF 32.5 are the gross investments. What you look in the cash flow is the net, and we also have sold assets.
Yeah.
The CHF 32.5 is gross investments, really new. Yeah. Just where the mic is.
I have also three questions. One on this project delays. I am not sure if I understood it correctly. You said, the delay of the delay was solved a bit by the end of the year. Has this to do with the supply chain, or are that orders that you talked or not firm orders that you talked about that there could be orders and are coming now in? Can we expect that these talks are going to continue and you will book some of those delays project orders in 2023?
Thank you very much. It's a very good question.
Yeah.
Sometimes there is always this, what is it? It is always the same. When we talk, we see postponements in the market, it means we do not have a PO. It is not yet a firm order.
Now we are in the project, we have very high visibility. We know discussions are going back and forth, but we are not sitting on a PO, it's important.
This is why also we did not have any cancellations, whereas the integrators clearly had cancellations.
We can expect that this postponement of talks, that they are.
Yeah
through this year?
Yes.
Yes.
This is what I said. The list of projects is the best we ever had.
We call it opportunities, right?
Yeah.
The opportunities that are transferred into an order.
Yeah.
Yeah.
A second one is on services. How much of your current sales is coming now from services? Maybe also how much is coming from retrofit? Can you also give us a margin indication on your retrofit business?
Actually, what we are achieving right now is a service business of around 10%, right? On long term, we are aiming for more. The margin in the service business, we are aiming like, 50% higher than the usual margin that we're achieving.
Maybe last one on Brazil, if I may. I mean, you're investing there heavily. What's the rationale behind that? How much sales you're generating in Brazil right now, and how much exposure do you have?
It's a good question.
Maybe.
Probably you can answer that. Yeah.
Let's put this because it's a typical question. Our business is based on several, let's say, topics. One is e-commerce, as you said, and the other one is food. Brazil has 200 million people, so we see a lot of potential coming out of Brazil. They are growing stably, and we see more and more opportunity there. Also, our customers are investing locally there in their facility. Therefore, we will keep following this trend in that market.
Hey, Colin, you were first.
Also, on the call with people, right. A follow-up on the CapEx plans. Originally, you stated an amount of roughly CHF 150 million.
Yeah
over three years.
Yeah.
Stated that this would be enough for a capacity of roughly CHF 1 billion revenue. Now you invest a little bit less. Does this mean that your capacity assumption for the next 3 to 4 year changed, or is this misleading?
It's not misleading, because we did not stop the investments, we just postponed the investments. With the growth, we will also release the investments furthermore. That's not no contradiction. We're still on a plan.
The other one, another question is on your customers, the system integrators. They're suffering currently a lot on margin side and everything. Do you see the trend that they're producing more own products, that they do not anymore rely on third-party products? That they produce more rollers and everything by themselves, or is this not a trend?
We saw the trend last year when the supply chain were a little bit disturbed. We see it actually, honestly, the other way around because they need to focus what is their core competency. This is what they're aiming at right now, and this is project business. The digitalization part becomes more and more important for them, and therefore, we seldomly see it the opposite. They're really thinking about, "Okay, what can we outsource to focus with the people that we have on board for their business model?
If I may add here one point, looking into the production volumes. We are a manufacturing and engineering company, and therefore we are focusing on volume production. This is something what a single system integrators cannot do for sure. This is our strength for sure.
Thank you.
Yeah.
Remo Rosenau, Helvetische Bank.
Your operating margins in the H2 were up about 340 to 380 basis points versus the prior year H2. If I understood you correctly, this was mainly due to the improved supply chains, which made productions more efficient again. Now what does this mean for this year, huh? I mean, supply chain is still okay. You get efficient, more efficient anyway every year. Raw material input costs are raw. They're coming a bit down. Okay, on the other hand, you have a bit higher wage costs.
That's
You know.
Yeah.
In balance, okay. You have a spillover effect on pricing still, a positive one. Probably you could quantify that. In balance, it doesn't look that bad for the margin, right?
The correct answer on this is we'll see how this year is going to develop. I can tell you, it is a hard effort to stabilize the situation as it is, honestly, right? We see the energy costs not knowing where this is coming, this is all going. We have a lot of counteraction that also work against our EBIT margin, we are cautiously optimistic, as I said, with this year.
Okay. cautiously optimistic on all levels, huh? Top line. Margins.
No. Honestly, we watch the market, how this is developing. Because last year, we made some experiences last year, therefore, we are a little bit cautious, put it this way.
Okay. Correct. On Rolling on Interroll, that is very, an interesting program. Do I get that right? This is with the end users, huh?
Yeah.
Is that with the system integrators?
This is both OEM system integrator, and these are our customer base. There are no end user in our program.
Okay
as we don't technically sell directly to the end user. We consult end user to let them specify our product to be bought by system integrator and OEM. In the program, you only have our co-customer, system integrator and OEMs.
Okay. Okay.
Your efforts the last 10 years to approach end users and to, you know, educate them on how important your products are to get efficiencies up for them is one of the reasons probably why you didn't have cancellations, whereas your direct clients had.
Yes, you are right. I mean.
Absolutely.
We have still a very strong focus on visiting and talking with the end user.
Understanding the customer.
That's absolutely the case.
Great. On the briefing production, which you mentioned a lot in the press release and here.
Could you make a few examples how that is achieved? You know, I mean, temps is one thing. Okay, of course.
Yeah.
certainly, much more.
Absolutely, yeah. Jens?
Yeah. I think the most important topic is here really the flexibility agreement we have with the workers council. If I take a look into our factories, we have working time models from -500 hours up to last 500 hours on the individual work accounts. We have the possibility to switch from one shift model to the others with a pre-announcement lead time of 2 days. With this one, you can basically brief about last -3 months. This is the success factor on 1 side, but on the other side it's also the planning, which is more digitalized, where we have more reference points on the production itself, and having there the possibility to steer and to control our production much more closer.
Yeah.
Okay. Thank you very much.
You're welcome.
You're welcome.
There's one other question. We also have online questions. We now need to start also distributing that a little bit.
Thanks. Sebastian Vogel from UBS. I've got three questions. I will ask them one by one. The first one would be on the current order momentum in your key verticals. If you can just guide us through at the moment what you see there, that would be great to hear.
Would you like to answer that?
You mean the momentum?
Yeah.
-actually?
Yeah.
Okay. The momentum actually, as we said, we have a pipeline which is quite full. Obviously, there is uncertainty in the market, so we don't have any cancellation, but we see a focus which is quite good. On Q1, we have a quite good, let's say, outlook, that we can achieve our budget for Q1. This is what we see now actually.
Got it. The second question would be on price increases. What sort of price increases you have in plan for 2023 or already introduced, and how much of your backlog is already priced or not been yet priced?
Can I take this?
Heinz.
We have no backlog on the products which have old prices. This is what I mentioned in my presentation. Everything what we sell new and rollers and drives has new prices in the market fully. On the project business, we only have a handful projects which come out of this peak order intake, first 6 months 2021, which will be delivered in the first months of 2023.
Yeah.
Basically, the pricing is in the market. This is also, we did not do a price increase per se. First, we only increased a few components, mainly because of semiconductor parts in it. The rest, we did not do a price increase. We did also not do a price decrease in fall 2022 because especially steel price dropped. We were saying we keep it stable and we absorb the inflation basically on the salaries, but also on even higher energy costs, much higher energy costs, especially in Europe. This is somehow flattened out. We are confident if there is no new shock, we will not need another price increase. We are not planning a price increase for 2023.
No.
Got it. The last one would be on the net working capital. You mentioned inventory already in the presentation. If I would look more on the, on the payables and receivables side of things, how do you see the situation there in terms of normalization over the course of 2023?
Yeah. I gave you a hint already. No, we invoiced a lot in November, December. The accounts receivable balance you see end of December is on a high level.
Yeah.
You can assume that, customer pay within 60 days.
On the payable side?
On the payable side, you can also look and compare. We have been on the very low side.
Yeah.
Got it. Thanks.
Good. There's one question then we need to dive into the digital.
We only have one question from online.
Okay, good. Yeah, but...
Thomas Ronk from GAM. I have still a question about your project business.
Yep.
We understand that last year the projects have been stuck. You were involved in many pipelines. What are the factors that really de-stuck the projects? Maybe it's from customer to customer a little bit different and also from region to region a little bit different.
Yeah.
that we can really understand what makes the project stuck and what makes them flowing.
Yeah.
You want me to ask? Well, first of all, I have to say that most of the projects are stucking independently from the region, so it's a real trend in the market. What is the reason? Is obviously the uncertainty in general into the market. There is no any fear from our side that this will be released simply because the market we are in, we are very confident that this is keep growing. E-commerce is a trend which is keep growing. We see more and more the last mile discussion, which will increase our potentiality, and our new product goes also into this direction. Therefore, I would say that when the situation globally is becoming a little bit more safe.
All this will be released. There is no cancellation actually in our pipeline, which is, anyhow, a good case.
Probably it's also the time factor now. The project is on and at some time simply it gets realized. If I completely mistaken.
No, I think this.
No.
The projects are on.
No.
What we have seen, for example, in general, we could realize some of the projects which have been postponed.
Yeah
very early.
Yeah.
Last summer already, step by step. The projects, they are hot. Sooner or later they will come. The insecurity of our customer and of the end user at the end, it's the end user. A lot goes at the end into the B2C business. The feeling that we could go into a recession, that the purchase power of the e-end customer is going down, this is what causes insecurity. Do I really now go into a capacity expansion if I'm a distributor like Amazon, or do I wait and see what's happening?
Probably on that, what we also see that it's talking about the Amazon or whatever, we see also other parties going into that direction. There's a lot of discussion currently that are not physically feelable. We can't see that right now. There's a lot of things going on as a hidden agenda. Once what Heinz explained, once the markets are coming back, this is quite good business opportunities for us coming up.
Okay. Thanks.
Rotta. Yeah, maybe we have to ask.
Yes, sir. I have a follow-up question on the margin. Can you remind us, what's the margin levels of the different regions when we talk about EMEA, Americas, and Asia Pacific in regard to the group margin? Because you have still an impressive jump in Europe, and you guide us that, Americas and Asia Pacific will grow again. What does this mean for your profitability?
Thank you very much for your question, but as you are well aware, we do not disclose these figures.
You don't have to disclose it, but you can give me some hints, you know.
We-
Whether this had a positive impact or a negative impact.
I can give you some hints. No, the margin, really, what this is what we disclose, the margin is different from we talk about product business or project business.
Yeah.
The margin globally, it's not so different. If you have a comparable project in Asia or in the Americas or in Europe.
Yeah
the margin is comparable.
Okay, got it. Very helpful. Thank you.
That's it.
Okay. I'll go into the online question. Could you discuss how you see 2023 unfolding on order intake standpoint, perhaps discussing by end market, and more specifically, what are you seeing in e-commerce? Could you comment on what was your order book end of 2022 and 2021, I think we discussed that one, to get a sense on revenue visibility you have. Thank you.
Yeah, we kind of answered already. I mean, what I wanna say, which is pretty important, obviously, for whatever reason, everybody is associating Interroll and e-commerce, Interroll and e-commerce. We're not only in the e-commerce. E-commerce is part of our business, but we have, I mean, a quite big food also revenue, and this food revenue is absolutely stable, if not growing. We have investment in this food area, which we have just released this year with a new platform there, where we are also optimistic we can market this. At the end of the day, the impact on the e-commerce drop is somehow visible. I probably have to add another detail. It's not only e-commerce which is in a critical situation.
It's part of the e-commerce, I don't wanna go into the detail, which is struggling. The strategy of the big e-commerce provider is changing from big hubs into smaller hubs which are closer to customer. They want to achieve faster delivery. Faster delivery means equipment which are flexible and not as big as the, let's say, equipment that some big system developer are producing. This fits 100% to Interroll portfolio. For us, this is an extra opportunity in reality that we see.
Yeah. I just wanna elaborate on this. Not everybody is stopping big investments. Though it's a little bit like competition is coming along, so we can feed these ones with our product portfolio. The good thing is, because we have such a wide product portfolio, we can high speed, we can low speed, we can low investment, we can do high investment, we can give our products or supply our products into these demands that are upcoming. This is a big strength of Interroll compared to others. Mark.
Yes, sir. Would it be fair to assume that some verticals like postal systems, airports, and so on, due to the need of automation and the reopening of some, geographies, do have nice, order intakes as well?
This is what we're currently assuming, this goes up. We see it already partly.
I think the demographic effect is playing an important role because the logistics tasks and the logistics operations are the first ones which will be affected by this effect. This has to go into automation without any doubt.
We see that, if you compare that last year or the year before last year, I think there was a statistic, and this was being shared with amongst ourselves with our American colleagues. A truck driver earned like $90,000. They are now on $150,000-$160,000. McDonald's, $12 per hour. They are now at $18,000 or $19,000. What you see is we're giving an example. We're in discussion with suppliers for fast food, fast food restaurants, how can food being supplied out of the kitchen directly in front of the desk to the operator? This kind of discussions do start right now.
With the product portfolio that we have in place, we position ourselves like, okay, if that trend goes along, we have the appropriate product portfolio to get into that. Automation next to digitization is the key success factor, and we see that especially now because of the shortages of human resources.
Well, department with a follow-up question. Can we talk about product groups? Rollers was the only one with declining sales last year. Is there an easy answer why it did not move in sync with the other product groups?
Yeah. The easiest explanation is if you look into the order intake the year beforehand, our customers still have a lot of rollers on stock. A lot of rollers on stock, right? This is probably the easiest explanation for that.
Also regarding product groups, can you rank them by profitability? Is that profitability narrowing now as you have more controls also for the more sophisticated product? Or is it still that there is some deviation between the different product groups?
What we generally say is that the profitability on products, right, is higher than on our project business, and this is still the same. Generally, we differentiate between products and projects, and projects is lower. Yeah, it's quite lower than a little bit lower than on the product business. There's another question coming in. My impression is that until late demand was solid. As orders were still strong in H1 2022, can you indicate whether you had been at a CHF 100 million run rate in Q1, and can you comment on the order pipeline in regards to the underlying volume versus last year? Maurizio.
I'm trying to get the question first. So we're still strong in H1 2022. Can you indicate whatever you had been?
At CHF 100 million run rate.
Q1 this year.
In Q1.
This year.
What is our.
Exactly.
Let's say Q1 this year.
Exactly.
That's the question. Okay. Let's put it this way. We have seen the book-to-bill ratio going skyrocketing last year, as you can imagine, 1.22, and this obviously had a drop later on, it was going below 1. Now we are again back above 1. This to answer the question that we are kind of going up. Then as Heinz said, the balance between how big was the peak and how is the bottom now is still quite positive if you made the math.
Yes.
Maybe there was the, on the other online question. This is also somebody of you addressed it indirectly. When we started the year 2022, we had record high order backlog. We had CHF 200 million-plus in backlog. When we closed the year 2022, we have worked on a lot of this backlog. If you take what I have shown, the book-to-bill ratio 2022 compared to 2021, you flatten it out, you will have a good picture where we are.
Yeah.
We are below CHF 100 million when we started the year, which is a figure which has been also the case in the previous years.
Yeah
before. The 200 was more a burden than a good thing when we started in 2022.
We never said no to our customers. Or the only thing we said is the delivery time is longer than usual, right? This is what we handled quite openly. There is another question. What is your view on APAC after the 35% drop down in fiscal year 2022? Is momentum improving in the region? Maurizio.
APAC, as I said, is in line of what I mentioned before. The Q1 looks in line with the budget, actually. We see that, I mean, there is some improvement there.
I can tell you, I've been and all of us have been into Southeast Asia just recently talking to customers and end customers, it's almost the same picture that we see in the U.S. and also in Europe. This pipeline is there. You know, people are, "Okay, we wanna do this, we wanna do that." It now counts on, okay, when will this be released? Yeah. Another question. Your focus remain on organic growth, not M&A, right? Did we say that? No. No. What we actually do is, we are watching what's going on in the market. For us, it's quite important to really look into what's out there and what is attractive for us because we are judging our own M&A projects based on three major topics.
One is whatever we'd like to get on board needs to extend our product portfolio. It needs to fit in our product platform. Otherwise, it doesn't make any sense because we'd like to stay focused. Second of, if we do an M&A, it needs to culturally fit because we'd like to get it in very fast because this is what our strength is. Third of, it needs to be price attractive. It needs to be price attractive. I can disclose that we have seen the one or the other company that we are discussing with, but criteria number three is very important for us as well. We keep cautiously watching what's going on out there. More. Can you please confirm us that you have no client risk, biggest client below 5%?
How much are doing your 10 biggest clients in turnover, I guess? Our client risk, we have 28,000 customers. We have a very good spread, I would say. In this overall regions, in all the regions. We have major big ones, we have small ones, and this gives us an opportunity because we're trying to serve all of them. If someone drops down, we have the opportunities to go into the other areas. We have clients that are just specifically in specific industries. We can also play this game. The risk that we have, exposed to just one customer is very, very limited.
To be specific, we don't have a client more than 5%.
No.
Yeah. That is true.
Another one. The gross margin improved from 51% in H1 to 6% in Q2. Can you comment on how much of that improvement is related to volume, CHF 311 to CHF 345, versus tailwinds from price mix?
Okay. I would not say that there is a volume effect here. Most of this was the fact that we have been able to proactively push the price increase into the market. We have been smart or lucky enough, make it as you want, to fix our offers at, let's say, H1 of the year with an index, so that our customer were indexed on the material price. Therefore, we have been able, in several cases, to renegotiate these orders. This is why, I mean, we have increased so much in the H2.
Two more. Okay. Then I think we should go for.
No, pero.
Two more. How many new employees do you plan to hire in 2023 from where you are, from where are they coming from? Peers, Google? Okay, this is a Zurich question, I guess. Jens, will you?
Looking into our operations, we are going into production digitalization, production automation. On the production we will stay quite flat. Where we are going into hirings is for sure on the innovation. Especially into software, electronic development. This is one of our key topics we are looking into at the very moment.
Okay. The last question, are there some disruptive startups kicking into your business, especially on the software side? The honest answer is yes. There are always startups kicking into our software. We were clever enough to buy one of these startups quite early into beginning of 2021. This is now part of our company. Therefore we have this startup's mentality within Interroll. Startup is easy. If you nowadays looking for AMRs or AGVs, who's manufacturing AMRs and AGVs, you get a long, long, long, long list. It's always how can you translate that and how can you industrialize this?
I think with the clever step of us buying a startup, that was the right step because we are now industrializing this solution, and you have seen how many products we already got out of that step. Okay. Thank you for all these questions. Thank you for sitting here for one and a half hour. It was quite interesting. I really appreciated you being physically here. We would now like to invite you for a one-to-one over in apero for the discussion and further questions. You're more than welcome. Thank you very much.
Thank you.