Ladies and gentlemen, thank you for standing by. Welcome to the Maytronics Ltd. Fourth Quarter and Full Year 2022 Results Conference Call. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded March 22, 2023. With us online today are Mr. Sharon Goldenberg, CEO, and Mr. Meni Maymon, CFO. Before I turn the call over to Mr. Sharon Goldenberg, I would like to remind everyone that forward-looking statements for the respected company's business, financial condition, and results of its operations are subjects to risks and uncertainties that could cause actual results to differ materially from those contemplated.
Such forward-looking statements include, but are not limited to, product demand, pricing, market acceptance, changing economic condition, risks in product and technology development, and the effect of the company's accounting policies, as well as certain other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. Mr. Goldenberg, please go ahead.
Good morning. Thank you for joining us. I'll start with a summary of 2022. Meni will then continue with a review of the financial results. Afterwards, I will go into more details about the regions, products, the competition, and our outlook. I'll start with a short review of the pool market. We estimate that at the end of 2022, the global pool market reached around 30 million pools. 19 million in-ground pools, 10 million above ground pools that are suitable for robotic pool cleaners, around 820,000 commercial pools. 2022 was a volatile year and not a homogeneous one. Just to remind you, at the beginning of the year, we were still very much in the COVID crisis. In the first quarter, we dealt with the outbreak of the Omicron variant.
As we entered the 2022 season, and at the start of the season, the distribution channel, distributors and dealers, had low inventories following the strong demand in 2021 and the challenges to deliver in accordance with the demand due to the supply chain crisis in that year. These factors, combined with low interest rates, led to a record high of early buys for the 2022 season. With the late start of the pool season due to a longer than usual winter, the lifting of COVID restrictions, high inflation, fast-paced interest rate hikes that began mid-year, and the war in Ukraine all jointly led to relative weakness in the second half of 2022 and to relatively high inventory levels in the distribution channels.
2022 was marked by a quite significant difference between sell-in of manufacturers to the distribution channel, distributors and dealers, and sell out of the distributors and dealers to the end users. An analysis of the results of major distribution and retail companies in the industry, which reflect sell out more realistically, shows that the market grew by around 10%, which mostly reflects the rate of average retail price increases. Based on an analysis of the results of major manufacturers in the industry in 2022, several points emerge. Sell-in, meaning sales by manufacturer to the distribution chain, dropped by a high single-digit rate to low double-digit rate. The average price increase by manufacturers was double-digit, about 10%-15%. New pool construction dropped about 20%, which is a significant factor that impacted the business results of manufacturers in the industry.
Maytronics, as a manufacturer, has delivered results that stand out, and we continued to grow in 2022. Our organic growth was 20%. Taken together with the effect of the ECCXI acquisitions, we grew 27%. This year's growth follows aggregate growth of 66% in the two prior years. In 2022, penetration of robotic technology on account of other cleaning methods continued to grow, and we estimate that it accounts for 21% of all cleaning solutions, compared to 18.5%-19% last year. The install base of more than 23 million pools without robotic cleaners is the foundation for the resilience of the robotic market and a platform for our future growth.
During the year, we retained our high market share in the private pool robot segment, and we estimate that Maytronics continues to hold the 48% market share of the number of robots sold this year. What's more important is that the company's share of the overall pool cleaner market rose to 10% compared to 9% last year and reflects Maytronics' success as market leader in driving and playing a meaningful part in converting consumers from other cleaning technologies and methods to the robotic technology. We expect this trend to continue, in particular in today's macro conditions with rising energy prices and labor costs. The value proposition of robots compared to other cleaning methods is growing stronger.
Later, I will refer to our estimates regarding end user demand in the forecast for 2023 and thereafter. In 2022, the company's margins were affected by significant operational challenges in the supply chain management. We experienced a considerable raw material inflation, a surge in freight rates, import and export alike, that led to a significant increase in shipping costs, which account for a substantial part of the relative increase in the company's expenses. These increases affected the gross margin due to raw material import costs and the operating margin due to the cost of shipping to customers. As of the end of the year, the order backlog for private pool cleaners was ILS 414 million, down 31%.
This decline reflects the gap between the nature of buildup orders stepping into and at the start of the 2022 season, following the pandemic and the supply challenges in 2021, as I mentioned, as opposed to the process of inventory adjustment and changes in inventory buildup in view of the macro market conditions on entering the 2023 season. It's important to point out that if we look at the demand patterns that were typical of the industry before COVID, this backlog is 37% higher than backlog at the end of 2020, a COVID year, and 136% higher compared to 2019 before the pandemic came into our lives. Maytronics has grown and expanded a lot in the past few years, following the desire to overcome production challenges and realize the company's strategy.
In 2022, workforce grew. Growth was more moderate. We continued hiring in the digital, marketing, and technologies arenas, while remaining sensitive to the number of people employed in production to be sure it is adequate to handle the robot production quantities planned for 2023. This year, we made progress in our digital transformation in the deployment of infrastructure as well as the assimilation of processes and systems that will help us connect Maytronics and the end users. I will now pass to the mic to Meni, who will review our financial results in detail, and then I will go into more details regarding trends in the major regions, products, the competition, forecast for 2023, and our revised forecast target for 2025. Meni, please go ahead.
Thank you, Sharon. Hi, everyone. I will review the main items in the financial statements and present the relevant highlights. I will start with a few important points regarding Q4. The growth in this quarter, excluding ECCXI merger was 11%, and including ECCXI revenues grew to ILS 239 million, up 32%. In this quarter, we saw early buy sales in North America, a region where we grew 90% in U.S. dollar and excluding the effect of the consolidation. The uptrend in sales in the public segment continued in the fourth quarter, and we achieved 27% up.
These positive trends were offset by a 36% decline in revenues in Europe, following a decline in the robot segment and in the safety and other related pool product segments, where exposure to the pool-building segment is relatively high. I want to point out that the decline in Europe is also the result of very high comparative figures last year. In Q4 2021, Europe grew 90% and reflected very strong early orders for 2022 season. Revenues in the safety and other related pool product segment grew 73%, mainly due to the consolidation of ECCXI. The effect of changes in foreign currency rates on sales compared to the last year contributed $12.5 million, mostly due to the increase of the U.S. dollar by an average of 10%.
The gross margin in the quarter was 38.1% compared to 36% last year. The improvement of 210 basis points in the gross margin is mainly due to the result of a high single-digit effect, sale price increase and positive forex effects, as I mentioned. It's also important to mention that Q4 is a weak quarter relative to the scope of the company's yearly business. In terms of manufacturing infrastructure, the fourth quarter carries the weight of infrastructure for yearly operations that are significantly bigger, so at this point, it does not have the potential to positively impact the growth in terms of volumes beyond fixed overhead, as reflected in other quarters.
Regarding the operating expenses in the fourth quarter, the following should be emphasized. One, regarding the R&D expenses, we see a moderate decline of 3%, reflecting mainly a tight budget control in the second half of the year. Selling and marketing expense rose 57%. Excluding the effect of ECCXI consolidation, the increase was 29%. Increase in this item is largely due to the shipping cost and higher spend on Piscine Global this year. G&A rose 10% in the quarter, mainly due to the consolidation of ECCXI. The operating loss in the quarter was $23.9 million up 2.7% compared to last year, and includes the negative effect of ECCXI consolidation and the PPA amortization.
Regarding finance expenses, they amounted to ILS 26 million, compared to a finance income of ILS 6.2 million in the same quarter last year. A sharp rise in the exchange rate at the end of the fourth quarter and the weakening of the shekel against the euro by 7.7% when comparing the exchange rate on September 30 to December 31, caused relatively high net finance expense following the revaluation of foreign currency transactions. The currency effect on the finance expense was amounting to ILS 15 million compared to ILS 8 million income in the fourth quarter. This will be the place to say that the company's operating results in 2023 will be favorably affected by the weakening of the shekel, which we see in these days.
Also for the finance expenses, the cost of credit increased following the rise in the interest rates and the increase in credit level, which were ILS 725 million compared to ILS 345 million at the end of 2021. That's it for the quarter. For the full year, the company's revenues totaled for ILS 1.79 billion, reflecting significant growth of 27% and 20% excluding the effect of the ECCXI merger. The effect of changes in exchange rate on sales compared to last year amounted to ILS 23 million in sales, mainly due to the increase of ILS against the EUR by an average of 7.4%. Sales of robots for private pool in 2022 amounted to ILS 1.5 billion, up 26%.
This is due to the ongoing demand for robots in the main territories, mainly North America. Of course, ECCXI's first-time consolidation and a high single-digit average increase in sales price in all regions. For the territories, I will talk in local currency. In Europe, sales grew 13%. In North America, sales grew 53%. Ex cluding ECCXI transaction, the growth in North America is 40%, and in Oceania, sales grew 15% in local currency. The gross margin decreased by 190 basis points to 40.2%. By raising prices and increasing production quantities, we succeeded in offsetting the negative impact of a double-digit increase in the rise in raw material and electronic components prices, as well as shipping rates.
At the end, gross margin erosion is due to negative foreign currency effect of about, 100 basis points and the consolidation of ECCXI, which contributed, 60 basis points down, of course. Operating profit, amounted to ILS 293 million, up, 5.4% compared to 2021. Excluding the foreign currency effect, it's, an increase of 14%. The operating margin dropped to, 16.4% compared to 19.7% in 2021.
The decline is mainly due to the foreign currency effects, the rising costs of shipping to customers mainly, and the consolidation of ECCXI, whose consolidation in 2022 had an adverse effect since ECCXI was consolidated during its weak business months when profits are not generated, combined with the recognition of one-time expense related to the transaction of ECCXI and the PPA amortization. EBITDA amounting to ILS 362 million, up 8.5%. Regarding the income tax expenses, the effective tax rate decreased to 13.6% compared to 14.8% last year. The drop in the effective tax rate is due to tax revenue in respect of prior years that was recorded in the reporting period, and the recognition of Kibbutz Yizreel Industrial Park as Development Zone A.
Net income attributed to shareholders of the company was ILS 218.3 million, down 2.5%. Cash flows from operating activities consumed by the company amounted to ILS 260 million, compared with ILS 131 million generated last year. The decrease is largely due to an increase of ILS 483 million in operating working capital. An increase of ILS 486 million in inventory balance is largely due to, one is, of course, the consolidation of ECCXI with ILS 84 million. We see a increase of ILS 107 million in raw materials and work in process inventory.
As you know, in late 2021, the company decided to make earlier and larger purchases of components and raw materials in order to ensure a response to market demand and maintain manufacturing continuity as much as possible, of course. This caused an increase in the value of the raw material inventory. In addition, the prices for raw materials, shipping rates, and the U.S. dollar exchange rate rose over the past year, which also contributed to the increase in inventory value.
In view of the expected trend of improvement in the supply chain and the availability of some raw materials, along with the return of demand in the pool industry to a typical pre-COVID level, the company is already working and will continue to work in the next few quarters on adjusting raw material inventory volumes to the volume of demand for its production capacity. We see, of course, an increase of 295 million in finished goods inventory. A short pool season and the change in the nature of the buildup in the distribution chain are reflected in higher finished goods inventory, which is mostly held by the subsidiaries and is designated for 2023. Inventory days were 279 days, compared to 177 days in 2021.
The balance of trade receivables increased by ILS 71 million due to sales growth and the mix of dates on which they were created. Average customer days rose to 77 days, compared to 65 days last year. The balance of trade payables rose by ILS 17.5 million due to a business growth and higher inventory. Average supplier days for the year, at average is 95 days compared to 83 days last year. Last point is the board of directors of the company decided yesterday on a dividend payout of ILS 44 million. That's it for me. I will now return the floor to Sharon.
Thank you, Meni. I'll go into a little more details about the industry trend in the regions, about the products, the competition, and our outlook. I'll start with North America. Overall, this year, we experienced solid demand in spite of the drop in new pool constructions and less favorable weather conditions, which led to a late start and a relatively short season. We also saw encouraging demand in the public pool market as the pandemic died down. Taking an overall look at the market, inventory levels are generally high industry-wide, and this will most likely continue until the end of the first half of 2023. The trend of pool owners switching to automatic tech-based connected products continues to drive growth of the robotic cleaners market overall, particularly robots with IoT connectivity.
Higher spend on digital marketing by both Chinese e-commerce competitors and Maytronics has led to greater awareness of robotic technology and has boosted robot penetration to install base of pools, including above-ground pools. Sales in the fourth quarter, excluding the effect of ECCXI's consolidation, grew 110% in ILS and 89% in dollar terms. Yearly sales in North America were ILS 807 million, excluding the effects of the ECCXI acquisition, up 40.6%. The Sunb elt states remain a significant growth driver and continue to grow nicely, although we didn't realize all the potential due to lost sales in the first half of the year following supply challenges. Generally, we're pleased to have delivered significant growth both in the professional channel through dealers and the online one.
These results were achieved thanks to outstanding work by the team in Maytronics U.S., our North American subsidiary, and by successfully leveraging our strategic collaborations with leading industry players, first and foremost, POOLCORP and Pentair. In terms of the competition, the Chinese presence continues to be felt mainly in the online channel. They are broadening their offering and increasing their digital advertising budgets. Fluidra is also showing increased focus on e-commerce. Few words about ECCXI. The timing of the acquisition led to the business consolidation in the five months beginning at the end of July, which is ECCXI's weak period. As a result, combined with acquisition costs and accounting amortizations, the contribution to the group profit in 2022 was negative.
ECCXI closed the year with revenues of $145 million, up 42%, which is indicative of end user demand in the pool market in 2022. The implications of the acquisitions were managed on an ongoing basis vis-a-vis our partners in the distribution network. We can say that we do not feel there has been any adverse change in the relationships with the company's customers. Specifically, our relationship with POOLCORP remains strong, with the partnership working across several channels in North America and Europe. Effectively, we expect to grow with POOLCORP in 2023. I will conclude this section by saying that we are in an ongoing process of integrating ECCXI into Maytronics. This is a project that is expected to deliver incrementally as we move forward. I'll now switch to Europe.
In Europe, 2022 was a more complex year, with cold, wet weather that led to a late start to the season, growing uncertainty on the continent due to the war in Ukraine, and an economic slowdown accompanied by soaring inflation and increases in energy and food prices, all of which affected consumer sentiment. The surge of 6%-12% in inflation rates, depending on the country, and rising interest rates from 0% to more than 4% in 2022 and nearing 5% at the beginning of 2023, have impacted consumption in Europe. End user demand varied between different markets in Europe. In Northern European markets, which were more strongly affected by the war in Ukraine and rising energy and food prices, demand was softer. The market in Southern Europe experienced stronger demand, also following the return of tourism and warmer weather.
In the industry overall, we're getting indications inventory levels are high in products like above ground pools, heating pumps, and spas. As a result of these trends, we ended 2022 with a moderate growth of 3% in Europe, and excluding currency effects that reflects our business in the market, we grew 13%. I remind you that, as we have said in the past, in Europe, we have some stronger exposure to new construction, and the downturn in this segment has caused a decline in sales of pool covers in France during the second half and in sales of other products by our German subsidiary, which specializes in distribution to pool builders. The positive growth we achieved in Europe in 2022 is exceptional in the industry and reflects the unique nature of the robotic pool cleaner segment.
Regarding the commercial segment, demand has been encouraging following the return of tourism and reopening of most public pools after the pandemic, leading to sales growth in the segment in Europe. For the Southern Hemisphere. In Australia, demand for fiberglass and small dipping pools grew at the expense of concrete pools due to highly inflated real estate prices, as well as interest rate hikes from 0% to 3% and more. Additionally, we identified an ongoing trend of converting from suction to robots and growing demand for automation and connectivity in pool products. We also experienced very high growth of more than 50% in online sales, even though the numbers are low, as this market is a brick-and-mortar based market, this is still indicative of a trend. In Asia, trends were positive, mainly in the commercial segment.
We are wrapping up 2022 with a nice growth of 15% in local currency in Oceania, where Q4 was relatively weak, with negative growth of 2%, mainly due to unfavorable weather conditions. That's it for the regions. I'll now talk about the products and the competition. In terms of products, private pool robots such as [HiRunner] and the S Line continue to enjoy from high demand and experience encouraging growth, with premium products, including the M700 and the S400 we launched last year, growing at even higher rates. At the Lyon show in November, we presented the LIBERTY product line.
LIBERTY is a meaningful addition to Maytronics mid- to premium lines, since these robots delivers a cordless battery-powered version of all filtration, brushing, and pool coverage capabilities offered by Maytronics traditional robots. Thanks to the combination of Poolside Connect and integrated aesthetic solution for the pool builder segment that delivers powerful, always-ready cleaner performance through an induction socket in the pool wall. The LIBERTY family with solar charger and a unique solution for cleaning the pool steps that will be on sale in the coming years. Maytronics is retaining its technological advantage and offering customers convenient solutions for an upgraded user experience. At Lyon, for the commercial segment, we presented the Wave 90i, a robot with IoT connectivity.
Maytronics offers the broadest spectrum of solutions for commercial pools in the industry. The Wave 90i broadens it even further, preserving our technological advantage in this segment. On the same subject, as I said, with the recovery of tourism, the public segment has experienced strong demand, not all of which we were able to meet, mainly because of constraints in the availability of segment-specific electronic parts. We improved as the year progressed and succeeded in achieving solid growth of 26%. Even with these numbers, we estimate that our market share has risen to 36%. In Australia, along with strong growth in robots, we are benefiting from pleasing growth in our water purification products. In terms of the competition, it has remained significant, mainly by Fluidra, which is focusing on competing with Maytronics, mostly in Europe, but also in the U.S.
Fluidra has also launched a cordless robot, something that we expected in the past two years would happen before the Lyon show. We have mentioned in the past, we believe that our LIBERTY line will compete strongly with Fluidra in this aspect as well. Far as the Chinese competition is concerned, we have been coping far more successfully in the online arena, also because of our supply capabilities, which have improved significantly in relation to demand. The Chinese are expanding their product range, and they too introduced cordless offering this year. They are investing in marketing efforts in penetrating the brick-and-mortar channel, and are also growing their presence in other regions beside the U.S., and are now more noticeable in Europe and in Australia.
To sum up the year, we estimate that Maytronics and Fluidra have retained their market share in the residential pool segment, and Winny, the Chinese brand that has been leading the Chinese competition in the past two years under a number of sub-brands, has grown its market share from 14%-18%, mainly on the account of BWT, Hayward, and other Chinese manufacturers. To sum up, a few words looking ahead. Firstly, I want to emphasize that despite the significant challenges, 2022 is another year of growth, a year in which we've met the revenue range outlook we announced at the beginning of the year and later updated. From a general perspective, looking at the next few years, we believe that the pool market is a growing, healthy market. Overall, the trends are positive, and we believe that for Maytronics in particular.
The install base has grown considerably in the past three years with the addition of 2.5 million-3 million pools. This is, of course, a very significant for Maytronics from a long-term perspective. The uptrend in automation and connectivity continues and strongly supports Maytronics's value proposition. Even after growing 100% in three years, we estimate the market potential in terms of number of pools without robots has remained stable, and our estimated sum consists of around 16 million pools in Maytronics target markets. This is a huge potential that we are working to realize and is the foundation for our long-term future growth.
We expect that the first half, and especially the first quarter, will be marked by adjustment to the inventory, and the length of the time needed will be influenced by the length of the pool season and when the season will start. The implications are industry-wide, including Maytronics, the comparison to the first quarter of 2022 is very challenging. In general, distribution chain ordering patterns are influenced by the market behavior in the prior year. The first quarter last year was marked by very high early buys that reflected the then current situation. I remind you that the strong early buys last year were the result of the nature of the 2021 season, when the world was still deep into the pandemic, demand levels were very high, the response to the demand was partial, and all this was accompanied by logistic supply chain challenges.
We are now in a different situation as we return to normal patterns with adjustments arising from macroeconomic conditions. Sell in is lower. The 2022 pool season started late and was relatively short. Should the 2023 season begin early, sell out by the distribution chain to dealers and pool owners will start earlier, which might lead to more relevant comparative figures later on in the year due to repeat orders from manufacturers. In terms of the regions, from Maytronics aspect, as we explained in the prior quarter, there is a difference in the expected sell in between Europe and the U.S. There is a significant difference in the number, size, and financial strength of the distributor, because in Europe, we work with a number of distributors in each country, and some of them are relatively small businesses.
Nevertheless, we are seeing very tight working capital management by distributors both in the U.S. and Europe, due to the cost of inventory financing and general uncertainty regarding consumption levels. In terms of sell-out potential to pool owners, there is a notable difference between Europe and the U.S. In the U.S., the high market potential and relatively low penetration so far of robots, our digital tools and organization capabilities and know-how of implementing them, our online presence, our online capabilities in general, and especially after the ECCXI acquisition, all support our ability to continue to convert pool owners who use other cleaning solutions to robotic cleaners. Europe, on the other hand, is likely to be more restrained compared to the high growth we experienced in recent years. The reasons are mostly macroeconomic, and when taken together with certain countries where robot penetration rates are higher, create a more challenging environment.
At the same time, we are encouraged by the improvement in supply capabilities we built in the past year, which will allow for better responsiveness to market demands during the season. We are also encouraged by the highly positive response by the distributors to the upcoming launch of the LIBERTY, our new cordless robot line. In terms of price impact, moving into the 2023 season, we estimate that the effective impact will be in the mid-single digit range. Regarding the competition, we expect and are prepared for it to continue at high intensity by both Fluidra and the Chinese. Finally, exchange rate levels since the beginning of 2023 are higher than those that prevailed throughout 2022, and this will result in a positive impact.
After weighing all these parameters, we forecast revenue growth of 13%-20% in 2023, and excluding the effects of the ECCXI acquisition, revenue growth is expected at 0%-6%. In light of the ECCXI acquisition and forecast for 2023, the company is revising its goals for 2025. These revised goals are based on the expectations for a return to double-digit growth in private pools robot sales from 2024 and thereafter, estimated revenue of ILS 50 million-ILS 100 million from future M&As and from the water technology segment. Profitability targets have been adjusted accordingly, considering the consolidation of ECCXI. In view of the above, we have revised our targets for 2025 to a revenue of ILS 2.7 billion and an operating margin of 15%-19%. That's it from me. We'll be happy to take any questions.
Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to decline from the polling process, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. I repeat, if you have a question, please press star one. If you wish to decline from the polling process, please press star two. Please stand by while we poll for your questions. There are no questions at this time. Mr. Goldenberg, would you like to make your concluding statement?
Yes. Thank you, all for joining us today. We look forward for your participation in our future calls. Thank you. Have a good day.
Thank you. This concludes the Maytronics Ltd Fourth Q uarter 2022 Results Conference C all. Thank you for your participation. You may go ahead and disconnect.