Ladies and gentlemen, welcome to the Analyst and Investors Full Year 2022 conference call and live webcast. I am Alice, the Chorus Call operator. I would like to remind you that all participants will be listen only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Eva Borowski, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead, madam.
Thank you, Alice. Good afternoon, good morning, everyone. As you know, earlier today, Landis+Gyr issued its financial year 22 results, a talk release, and the company presentation. You can find these documents on our website. Before we get started, we want to emphasize that some of the information discussed today contains forward-looking statements. We want to explicitly emphasize that there are numerous risks, uncertainties, and other factors, many of which are beyond Landis+Gyr's control, that could cause Landis+Gyr's actual actions or performance to differ materially from the forward-looking information and statements made on this conference call or on this presentation. Consequently, Landis+Gyr can give no assurance that those expectations will be achieved. For more information, please see page 2 of the presentation and our press release issued today.
This conference call will follow the presentation. We suggest that you have it on your screen or otherwise available to follow along with our remarks during the first part of this call. Afterwards, you will have the opportunity to ask questions and Alice will provide further instructions as we start the Q&A. With that short introduction, I'd like to turn over the call to our Chief Executive Officer, Werner Lieberherr.
Thank you, Eva. Good afternoon, good morning, everyone, and welcome to our financial year 2022 results. I'm here with Elodie Cingari, our CFO, and we are very pleased you have all been able to join us today. This year we are doing the call a little later than usual, so our U.S. participants don't have to get up in the middle of the night. During our capital markets day three months ago, we discussed our strategy in detail and I'm convinced that we have the right strategic focus to drive leading-edge innovation, continue to transform the company, and deliver sustainable shareholder value. Let's dive right in and start with an overview of the key messages of today's call.
We are pleased to announce another intake of almost $2 billion driven by Americas and EMEA, resulting in a book-to-bill of 1.15 and a new record backlog of almost $3.8 billion. We were able to deliver strong net revenue growth of over 20% year-over-year in constant currency, driven by strong backlog execution and supported by improved component availability, making the second half of the year our best half year ever. Adjusted EBITDA margin came in above the guided range with 8.3% and was impacted by supply chain-related costs as guided. In order to convert our record backlog, we have made strategic investments in inventory largely of temporary nature, resulting in a negative free cash flow of -$22 million.
Net income of $207.9 million was boosted by a gain from the divestment of our minority stake in Intellihub early in the financial year. We are proud of our strong balance sheet with low net debt to adjusted EBITDA ratio of 0.47 times. On June 22nd, a progressive dividend of 2.2 CHF per share will be proposed to the AGM. We are proud that Landis+Gyr is positioned in the sweet spot of the energy transition with a strong focus on decarbonizing the grid. Moving on to slide 4. Our portfolio of software services, grid edge sensors and EV solutions enables us in a unique way to have a direct sustainable impact.
In FY 2022, we were able to avoid over 9.5 million tons of CO2 emissions through our installed smart meter base. By signing up to the Science Based Targets initiative, we continue to improve our performance on our journey to reduce carbon emissions. In addition, 20% of our short-term incentive for all eligible employees is based on ESG targets. On May 26th, we will publish our sustainability report as part of our annual report and invite you to take a look on our website once these documents are published. In summary, we are working actively towards a greener future as we continue to manage energy better. Let's turn to slide 5 and have a look at the developments in each region. I'll start with the Americas, led by Sean.
We have seen a lot of good news from the Americas region over the last few months with some major wins promising federal investment plans to modernize the grid and upcoming refresh cycles. We were able to book a sell or intake of $1.2 billion, a book-to-bill ratio of 1.31, resulting in a backlog of over $2.8 billion. With 129 agreements signed in FY22, we see good momentum for future growth while the pipeline remains strong.
Recently, we were able to announce a few fantastic wins like EPCOR Water, providing AMI technology and related services for water meters in the city of Edmonton, and WEC Energy Group based in Wisconsin to expand the AMI coverage for over 200,000 G480 ultrasonic gas meters, 750,000 AMI gas modules, and more than 100,000 electric meters. To extend the existing managed services agreement through 2038. Of course, we are proud that after regulatory approval, National Grid will deploy 1.4 million of our Revelo grid sensors across its Massachusetts service areas. On top of that, our Gridstream Connect platform will provide a Wi-SUN certified network, providing edge intelligence, enhanced access to energy usage information, and grid analytics. Furthermore, our large AMI rollouts are scaling up nicely with several new deployments kicked off.
On the technology side, we continue to focus on edge computing platforms, software solutions, and market-leading sensors. In summary, we are proud to be a provider of critical infrastructure, supporting resiliency and modernization of the grid, cybersecurity efforts, and initiatives to decarbonize the grid. Let's move on to slide 6 and take a closer look at EMEA, led by Bodo. While EMEA was hit hardest by supply chain and FX headwinds, we continue to drive innovation. Over the last year, we have seen some fantastic wins in the region, positioning EMEA well to capture significant growth in the coming years. In Israel, we have been awarded a tender by Israel Electric Corporation to supply over half a million residential smart electricity meters, and this amount may increase substantially in the future.
In addition, we are also providing the Heron system and a set of services for the maintenance of the existing meter data management system and related applications. In Finland, we have won the majority of the KV Alliance tender with half a million metering points. In France, we were selected as one of Enedis' major partners to develop a new family of industrial meters. Next to this selection of major wins for large AMI rollouts, we continue to expand our reach in heat and smart ultrasonic water and in the EV infrastructure market. Just last week, we announced a framework agreement with Allego, leveraging our EV solutions to support decarbonization efforts, and we are also deploying our charge point management software in Iceland for ON Power. Now let's take a look at Asia Pacific, led by Steve, on slide 7.
Our Asia Pacific region was able to increase revenues by more than 20% year-over-year, mainly driven by growing business in Australia and the execution of smart metering projects in Hong Kong. Generally, we see good momentum and growth opportunities in Australia and New Zealand with strong orders from key customers for the latest generation E360 series smart meters delivering true grid edge intelligence. In addition, the further expansion of our smart water offering across ANZ resulted in a growing customer base. Some of you may recall Lara Olsen from Southeast Water speaking at our Capital Markets Day in January to share our successful journey to combat water losses together. In Southeast Asia, we see good traction while we have repositioned our business focus in India.
As we continue to deploy AMI technology and expand our reach in ultrasonic smart water, we are also excited to commence business development activities for our EV solutions and expect to see results starting next year. Overall, we see a continued positive trajectory driven by recent portfolio releases that allow us to drive new business. Let's move on to slide 8 and talk about the supply chain impact in FY 2022. We continue to see an impact on our supply chain, and EBITDA results include around $56 million in supply chain costs, impacting all regions, but more significantly, EMEA. In EMEA alone, we saw a $32 million increase in cost and an additional $6.4 million in FX. To date, we have had no cancellation and continue to work in partnership with our key customers and suppliers.
In H2, we saw improved availability of components that supported our strong growth, and we expect the situation to improve throughout 2023. Let's turn to slide nine and take a closer look at our consolidated results. We saw strong revenue growth led by Americas and APAC, despite FX headwinds in EMEA, and continue to see positive momentum based on our record backlog, demonstrating the trust our customers have in us and our solutions. Adjusted EBITDA decline was driven by continued supply chain cost pressure and ramp-up investments to support the conversion of our record backlog and future growth, partially mitigated by strong volumes. As mentioned before, free cash flow was negatively impacted by increased operating working capital requirements due to largely temporary inventory buildup.
With the divestment of our minority stake in Intellihub, we received proceeds of around $235 million, on which we paid $53 million in taxes. Overall, despite the current challenges, we were able to deliver a solid result. Now Elodie will give you a more detailed review of the financials. Afterwards, I will come back to our guidance before we open up the call for questions. Elodie, please.
Thanks, Werner. Good afternoon, good morning, everyone. I'd like to walk you through the financials for the financial year 2022 in more details. As mentioned by Werner, order intake was at approximately $1.9 billion. This results in a book-to-bill ratio of 1.16 for the company, driven in particular by the Americas with key wins like National Grid, AEP, and APS. At the end of the financial year, we achieved a new record factor of $3.8 billion, which represents an increase of approximately 10.6% versus the prior year. We look at our revenue on the next page, our net revenue results for 2022 was $1,681 million. This represents a 14.8% growth year-over-year, equivalent to 20.8% growth in constant currency versus the prior year.
Landis+Gyr India is reporting in U.S. .dollar and therefore exposed to FX fluctuations. In FY 2022, the strong U.S. dollar versus the euro and the British pound had a significant adverse effect on the year-over-year growth rate and impacted our revenue negatively by $72 million. Improved component availability across parts of the portfolio drove growth and supported our ability to better serve customer demand in the second half of the year. Americas revenue performance was particularly strong with growth in all clusters led by North America, Japan, and Brazil. EMEA revenue growth was driven by entities acquired in the prior year that contributed $53 million revenue year-over-year and supported also by robust performance in Switzerland and Central and Eastern Europe. APAC continued to grow strongly, predominantly in Australia and New Zealand. Now looking at our EBITDA.
Overall, our adjusted EBITDA declined from $147 million to $139.9 million year-over-year. This translated into an adjusted EBITDA margin reduction from 10%- 8.3%. 2022 was a challenging year due to constraint availability in H1, a backend-loaded H2, supply chain cost impacts, and FX pressure. At the same time, we continue to invest in our strategic initiatives to transform the company and ramp up our activities to enable future backlog conversion. While our top line was impacted significantly by adverse currency movement, the FX impact on our adjusted EBITDA remained limited due to our natural hedging position and our hedging strategy. With a strong revenue growth, the margin benefited from a volume impact, and this positive effect was across all regions, particularly in the Americas.
Separately, gross profit margin was impacted negatively by $56 million, primarily driven by higher material and transportation costs. As Werner mentioned, this impacted all regions, but more significantly EMEA. Our adjusted operating expenses increased by $43 million year-over-year. Reasons for this development were ramp-up costs related to preparation of current and future backlog conversion, particularly in North America, investments associated with businesses acquired prior year in EMEA, and as well, continued investment in strategic initiatives. If we look at the bridge between reported EBITDA and adjusted EBITDA, it contains three items. First, restructuring. In FY 2022, the restructuring charges are primarily related to our India business operation as a result of the decision to discontinue manufacturing activities. Second, warranty normalization adjustments. This adjusts the warranty provision amounts made in the fiscal year relative to the 3-year average of actual warranty costs incurred.
Due to lower warranty cases in recent periods, the downward trend here continues from prior years. Third, timing differences on FX derivatives. This year, this impact was neutral. Moving on to cash flow. In 2022, our free cash flow excluding M&A was at -$22 million. Main driver for this development is the change in working capital and particular inventory. At the end of the fiscal year, we are carrying higher inventory position, an increase of $139 million year-over-year, to satisfy a strong backlog and to anticipate revenue growth and supporting customer commitments. With a volatile supply chain, some component shortages, and longer lead time, we are holding more inventory than in an ordinary climate.
The higher inventory levels are expected to reduce toward FY 2023 and beyond as we anticipate further easing of the supply chain situation and are committed to deliver on our growth plan. Our current assumption is that this positive development will only start to materialize in the second half of the financial year 2023. Looking at our capital expenditure, it remained low at $28 million and in line with previous year as we continue to stay disciplined in our investments. Free cash flow was at $160 million, considering the Intellihub divestment, as announced during our last call in October, which totaled for a net impact of $182 million. Moving on to net debt. As of thirty first of March 2023, our net debt position was at $65.6 million. In the year, net debt was impacted by the following items.
The dividend payment of $64.7 million that was made in June 2022. The minority stake in Celio divestment with net cash proceeds of $182 million. Lastly, the free cash flow generation ex M&A that was at negative $22 million, FX and other impact being $17 million. All in all, we have further deleveraged in FY 2022, and we continue to maintain a strong balance sheet with net debt to adjusted EBITDA ratio of 0.47 times. This position, together with our undrawn facility of about $400 million that is available, provides a solid foundation and a great platform for further growth opportunities. Moving on to our regional performance and starting with Americas. Here in Americas, order intake was approximately $1.2 billion, resulting in a book-to-bill ratio of 1.31 times.
Revenue increased by 25.7% to $888 million. The expansion was really driven by three markets in the region, North America, Japan, and Brazil. Adjusted EBITDA margin declined by 210 basis points to 13.4%. The effect from stronger volume was offset by increased supply chain costs, further ramp-up investment to support future backlog conversion, and investment in strategic initiatives. Looking at our EMEA region. In EMEA, we recorded a solid book-to-bill ratio of 1.03 times. This was supported by order intake in the Nordics, in the acquired businesses, and in Germany. Revenue increased by 13.8% in constant currency to $602 million. Throughout the reporting period, EMEA was adversely impacted by FX movements.
Combination of strong USD and a weak EUR and GBP caused an adverse impact of $61 million. Operationally, revenue growth was driven by prior year acquisitions, which contributed $53 million year-over-year, and strong demand in Switzerland and Central Eastern Europe. Adjusted EBITDA declined to -$14.1 million, resulting in a margin of -2.3%. The reasons for this development was significantly higher supply chain costs, which impacted EMEA very strongly, investment in acquisitions from FY 2021, and strategic transformation initiatives. Moving on to our APAC region. APAC order intake was approximately $140 million, resulting in a book-to-bill of 0.73 times. The top-line impact of our decision to cease manufacturing activity in India and drive margin improvement is reflected in the year-over-year decline of order intake, as it contributed historically about 15% of revenue annually.
APAC revenue increased by 20.8% in constant currency to $191 million. Growth was predominantly driven by strong demand across the region, and particularly in Australia and New Zealand. Adjusted EBITDA margin expanded to 6.9% due to operating leverage, operational cost out, which was partially offset by higher supply chain costs. With this, I will now hand it over back to Werner for the guidance.
Thank you, Elodie. Turning to slide 19, let's talk about the guidance for FY 2023. We expect low double-digit organic net revenue growth and an adjusted EBITDA margin between 9% and 11%, assuming the supply chain situation further normalizes as we move further into the year. We project free cash flow, excluding M&A, to come in between $60 million and $90 million, and a progressive dividend of 2.2 Swiss francs will be proposed to the AGM on June 22nd. As outlined during our Capital Markets Day, we will continue to drive our strategic transformation forward by managing costs diligently to mitigate supply chain exposure. With that, we open up the call now and look forward to your questions.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Anyone who has a question may press star and one at this time. Our first question comes from the line of Michael Roost with Baader Helvea. Please go ahead.
Yes. Hi, good morning. Can you hear me?
Yes, very well, Mike.
Hi. Hi, good morning. Thank you very much for the question.
Good morning.
Good morning.
Yeah.
Good afternoon rather.
For us, yeah.
Yes, exactly. My first question is a little bit more on the supply chain. I know you mentioned that a little bit during your presentation. Could you maybe give us a little bit more granularity in terms of what you're seeing, what you're hearing from your suppliers, as we're starting to hear a little bit more that things are starting to cool down a little bit, so that might be positive? My second question is on the order intake for the full year. Obviously we expected a normalization, so order intake did drop compared to the record last year. It was a lot better than what I expected. Are you expecting a further normalization, and what are you generally seeing in the market? Thank you.
Yeah, very good. Supply chain, I would agree with your sentiments. You know, when we look at the supply chain, we definitely see increased availability, which I think is very important. You know, last year we sometimes even couldn't operate the plant for a certain period of time. We also see further normalization of costs. You know, just to put things in perspective, you know, we had an increase of $30 million in 2021, and now another $56 million in 2022. Going forward, we expect a relaxation of about $25 million-$30 million. I think that's very positive. About 1.5%. That will actually continue then also going into 2024. That's how we view the supply chain.
intake, I would say, obviously, as you mentioned, Mike, last year was a phenomenal year, you know, in terms of book-to-bill 1.8 and so on. I think we have very good momentum in the market. You know, I think when I start looking into the U.S., you know, customers like our technology, like Revelo, but we also won a larger order with Wisconsin Public Service Corporation for G480 gas meters. So, that's really cool, you know, actually, that we are able to achieve that. And so good momentum in the Americas. Also Europe, I expect 1-to-1 or maybe even a little bit better. In Europe, it just takes a little bit longer when you look into Germany.
I think in Asia Pacific, there it's important obviously with India manufacturing closer, you know, that we are able to capture, you know, new orders in our key markets, Australia, New Zealand, Hong Kong, but then also actually in Southeast Asia, plus CV, plus water. Overall, I would say, Mike, definitely see for this year also, a little bit above 1-to-1 book-to-bill for 2023.
Okay. Maybe one last thing, if I can just add on, if you don't mind.
Sure. Sure. Yeah.
On the M&A side, obviously we've talked about supply chain starting to ease, the general economy may be a little bit starting to weaken a bit. Is this translating on the M&A side to potential targets becoming a little bit more attractive or available?
I do think so. You know, I mean, when you look at our balance sheet, it's, as Elodie said, pretty unlevered. I think it's really perfect actually to pursue M&A. It's not that we are not doing it. We just stay very disciplined because obviously we want to do, as we said in the past, a large acquisition, preferably in the U.S., which would also be earnings accretive. You know, we are very selective. To your point, Mike, I do see M&A opening up more, and I think that's positive for us, you know. I would say, we will find the right target. We just need to really very disciplined to actually pursue our M&A strategy.
Thank you very much.
Thank you very much, Mike. Thanks a lot.
The next question comes from the line of Urs Emminger with Research Partners. Please go ahead.
Salut, Urs.
Mr. Emminger, your line is open.
I think, Urs, can you hear us?
I think maybe your line is muted.
Can you hear me?
No.
Yeah.
Yeah. Can you hear?
Okay. Sorry. Great results. Well, well done. Nevertheless, I have some smaller questions. Let's start with personal costs. How did those develop over the year due to the inflationary pressure also on the salary side? You just mentioned that you're optimistic about APAC regarding new bookings, new order intake. Perhaps you could elaborate a little bit on that, because otherwise, in about seven, eight months, you're running out of orders. Also detailed question, perhaps, what was your financial expense last year? Just for comparison reasons. Perhaps you could give us an update on Japan. There are a few big orders looming around the corner, and perhaps you can give us a little bit color around that. Thanks.
Yeah. Very good. I give you an answer on three, you know, on the personal cost, APAC, Japan, and Elodie, I will ask you later then talk about the expenses. What we can say in terms of personnel costs, we had last year, we had around $10 million of personnel costs, you know, which is not little, but it's very important. We still are in an environment where, you know, resources are scarce. I think this year we probably, I would say, in terms of the upcoming salary increase, is probably $8 million. These are not small numbers, but we need to keep in mind that actually, you know, my view is that most external important asset are the customers, and the most internal are our employees.
While these are numbers which I would like to see, frankly speaking, as a CEO, a little bit lower, important is I think we will end up with about these numbers, Urs, because it's really just a labor market, you can look in the U.S. but also Europe or Asia for that matter, which is just pretty much, you know, low unemployment. APAC, you're right. When we look into the order situation, obviously, I think it's important that we are winning key orders in our markets like Australia, New Zealand, Hong Kong, but also in Southeast Asia. I think we have good prospects in Southeast Asia. I think that's something which is very important.
What I also believe is for us critical is water. You know, the water meter W370, which we are pushing as a launch into Australia with South East Water. I think that also will be very good for us in terms of order intake. The other thing was, which I also would like to say is EV. You know, the electrification takes place around the globe. Australia in particular is extremely advanced, and I think we will also be able to capture good opportunities in Australia. That's from an order intake. You're absolutely right. Important, it's on top of the list. We just had this morning, as I do every month, the Energize meeting.
You know, since we already published the numbers at 7:00 in the morning, I wanted to address our Asian employees already at 8:00, and that was actually really the top item on my agenda for Asia-Pacific. Japan, I think very well positioned. I was slightly nervous, you know, with the phase out of Toshiba when I actually joined the company. We made a phenomenal hire with Eizo, who is the general manager in Japan, and he does a fantastic job, you know, with the team. I think, as you know, Ross, we won at the Head-End system, which was a huge win for us. I also feel that we are very well positioned with the communication module. Japan well underway, customer happy. We are executing well, so I'm really pleased, you know.
Now I would like to hand over to Elodie in terms of talking a little bit about the expenses. Yeah.
Right. Hi, Ross. I understood your question was around financial expense, and if you look at our cash flow statement, you should hear that in FY 2022, we had about $6.7 million in trust payments. This compares to the prior year at $3.1 million, so it's a bit more than double. This is really driven by our credit facility and the increase of the interest rates that we saw in the market. You know, some of the interest rates obviously are variable rates, and so we had to bear the impact of these increasing interest rates. About $6.7 million in the cash flow statement this year.
Yeah. Very good. Thank you, Elodie. good. Thank you once again. We would go to Daniel, I think. Yeah. Hi, Daniel.
The next question comes from the line of Daniel König with Mirabaud. Please go ahead.
Yes. Good afternoon. I have a couple of questions. You probably know that there is soon elections in Turkey. I was wondering, A, how the perspective is for Luna. Because I looked in the old annual report, they had sales of $6 million and an operating loss of $2.4. I was wondering how that was now in this past fiscal year. I was wondering also what the perspective is of Luna, because the Turkish economy seems to have problems. The trade balance is increasing. I'm wondering if Luna, the competitiveness is really increasing because of all those problems in Turkey.
Yeah. Yeah. Yeah. Yeah. Totally understood, Daniel. What I can say is I'm very happy with Luna. It's a workforce who is very dedicated, very hungry. A great example for the Europeans in particular, and they really do a great job, you know. Yes, they have been impacted last year quite a bit. The plant was down for around four months due to actually, you know, due to supply chain shortages. I can tell you they are firing on all cylinders and also in terms of margins, we really see they do really well. You know, what I also think is that importantly that we are able actually to push technology into Luna, we can actually really help them to successfully compete in their markets.
Also, for example, in Turkey, they will go, you know, also smart over time, and I think we can help them. Last but not least, I also see Turkey as a big low cost platform. We clearly want to push actually really, you know, also that we actually can products for other markets, that we can really successfully produce them actually in Luna. You know, when it comes to election, actually you're right. You know, Erdogan is, I think interesting enough, still relatively strong position despite the earthquake. We will see who will win. What I can tell you, Daniel, the way I look at it, for me, I compare it a little bit with Philippines, you know.
One president or the other, it didn't impact the business much. I'm bullish on Luna. Remain bullish. Just three weeks ago, actually, our board was also in Luna, and they were really excited about it, about the prospects, what we can do about the leadership, the people. Daniel, from our perspective, really both thumbs up.
Mm-hmm. Okay. I have a more philosophical question, because I looked at the expectations for this result, and it looks like EMEA was the region where expectations were a little bit missed. I'm kind of wondering, you know, you had in H2 almost $100 million more, but the margin was nevertheless negative, about 1.4%.
Yeah. Yeah.
I'm wondering what it really takes to get to the 10%.
Yeah.
You had already strong operational leverage, you know?
Yeah.
I'm wondering.
No, I think it's a very, very fair question, Daniel. The way we look at it is this. First of all, I'm convinced that we bring EMEA to 10%. That's our mission. How do we see that? You know, when you look into FY22, we had Out of the $56 million supply chain challenge, we had $32 million, which really happened in EMEA. That was just due to the setup, actually, of the supply chain. Then we had around $6.3 million in FX. Just these two factors alone actually contributed, between 6% and 7%, you know. That's quite a big number. Then, what we also are doing, you remember I talked in the past with you also about lowering R&D.
The R&D will further come down. That's another %. We are thinking about operating leverage, pure operating leverage due to higher volume. Last but not least, the first question, which you asked, is also Luna. Luna, leveraging Luna as a low-cost platform across Europe. We also push Varta. Varta is a product which really get great reception, as we just talked about Australia. EV, which we are pushing, so also the newer technology in the portfolio. All that together, Daniel, I feel absolutely confident that we will push EMEA sustainably to 10%.
Okay. Thanks a lot.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Star followed by one. The next question comes from the line of Jeffrey Osborne with Cowen and Company. Please go ahead.
Hey, good morning. Thanks, Werner, for changing the call to accommodate the U.S. investors. Appreciate that. Couple of questions on my side. Maybe one on a clarification. Can you disclose, and I might have missed it in the slides, but can you disclose what the for the fiscal year, the aggregate revenue and OpEx was from the acquisitions and how to think about leveraging the model from the increased OpEx from the acquisitions that you've made over the past 18 months or so?
Yeah. Jeff, generally speaking, we don't disclose, but I can tell you that the OpEx of the acquisition contribute about 13%. That gives you a little bit an idea, you know, about the acquisitions which we did.
Got it. You think that'll trend down, throughout the next, few periods here?
No, I think, because when I think about Luna, when I think about, you know, EV, we run them as standalone business because obviously, it's a good setup as a business unit. I would say, on a percentage basis, yeah, that will go down as they increase revenue, but as an absolute number, I think it's a good number.
Got it. I think on the last call, you had mentioned that 30% of the recent bookings in North America had some elements of software to it. I was wondering, you know, of the $2.8 billion in backlog, if you would be in a position to share, you know, what the software percentage of the backlog is in aggregate?
Well, what we can say on this, on this newer office, Jeff, absolutely. As we discussed in the past, it is 20% to 30% are software and services related. That's a positive for us, mainly also because as we just have seen in this supply chain situation, obviously, we don't have crunch time from a availability perspective, but that's still correct, yeah.
Got it. Just two other quick ones. I was perplexed on the concentration of the semiconductor impact in Europe. Is that just more microcontrollers for PLC as opposed to the RF that you're having or had difficulties getting access to? As most of your competitors seem to be highlighting more challenges with the 950 megahertz RF chips.
Yeah. Yeah. Yeah, yeah. No, I know. It's really I would almost say it's just the way the supply chain has been set up, Jeff. It was not by design. You know, Europe has to some degree different suppliers also due to legacy reasons, but that drove the whole, actually, more cost. You know what I mean? Aside from the FX. It's really that that's the main driver. It's really the selection. There's also some corrections which we are doing now going into 2023, because obviously, some suppliers perform better than others.
Last question is just, could you give us an update on, you highlighted two wins in the EV space in Europe, I believe, but, any progress or momentum in North America?
Overall, I think we made good progress. you know, I would say, when you look at the markets, at the different markets, EV, as you well know, has slowed down a little bit due to the energy crisis and so on. We make good progress in EMEA and then Europe, as you know, we are really reviewing that market and then see how do we enter the market or, in which form and so on. I think, yes, opportunities are definitely there and Itron successfully competing in these markets.
Understand. Thank you. Appreciate it.
Thanks a lot, Jeff. Talk to you soon, huh? Thanks a lot.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Lieberherr for any closing remarks.
Okay. Thank you for your questions. We highly appreciate that. You know, I'm going to close the call in a moment, but before that, I would like to leave you with this slide as a reminder of the key takeaways of today's call. First, our record backlog of almost $3.8 billion is a testimony to our leading technology and motivates us to keep developing and delivering leading-edge innovation to our customers. Second, we were able to deliver robust growth and overall solid results despite the global cross-industry supply chain challenges. Third, we are confirming our guidance for FY 2023 as we continue to transform Landis+Gyr by expanding our software services and EV solutions offering, while our solid balance sheet provides investment capacity for acquisitions.
Look, in a nutshell, Landis+Gyr as a recession-resilient energy efficiency company is positioned right in the sweet spot of the energy transition, further amplified by the current energy situation by playing an active role in decarbonizing the grid. With that said, I'm convinced that we have the right strategic focus to drive future profitable growth, and I would like to thank all of our customers and shareholders and all of you on the call here today for your continued trust, and our employees for their continued dedication, passion, and hard work. Thank you for joining us today. Stay safe and healthy, and I look forward to meeting all of you soon, virtually and in person. Goodbye, and have a very good day. Thank you very much. Thanks a lot.
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