Electrolux Professional AB (publ) (EPROB) Earnings Call Transcript & Summary

Welcome to Electrolux Professional Fourth Quarter 2021 Results Presentation. My name is Jacob Broberg. I'm Head of Investor Relations. And with me, I have Alberto Zanata, who is the CEO of Electrolux Professional; and Fabio Zarpellon who is the CFO. And we'll kick off immediately with Alberto. Please go ahead, Alberto.

Thank Jacob, and good morning to everybody. Q4 is confirming the recovery of the market and the continued recovering of our business. For the third quarter in a row, we delivered roughly 10% underlying profitability despite the increasing challenging that we had to face, the increasing headwinds related to the inflation cost that we had to face in Q4. So we closed the quarter with organic growth, a quite significant organic growth, 4% -- 14%, mainly driven by the recovery of the Food & Beverage business that during the pandemic, suffered much more than the Laundry one. The height of the quarter is that we had record level of our order intake, so collection of order, bringing up our order stock again to a record level. We said that this very high income -- order incoming was probably driven also by 2 elements, in addition to the recovery of the business. One was the fact that customer anticipated order with understanding that from January 1, the price increase was announced. And the second one is that in these days, there is the understanding that lead time and availability of product, the uncertainty on lead time and deliver products that they wanted to book product to make sure that they were available when they were needed. So we were expecting also a decline of the order intake in January, while confirming the recovery of the market in this case, at a continuous recovery market. In this case, we still have a good order intake in January, not at the level of December, but confirming that despite the increase of the price list, we are still getting good order coming in. Consequence of the growth is the improving profitability. I said it, underlying is 9.5%, close to 10% as it was in Q2 and Q3. The actual one is lower because in the quarter, we completed the acquisition of a Unified Brands, a great addition to our business. And in the quarter, we reported all the acquisition cost. Important element is also the cash flow, very strong cash flow with a cash conversion much higher than [ 9% ] that is confirming the strength of this company for what concern the management of the operating capital. All in all, we are also proposing in line with our policy and with our target, the dividend -- to distribute the dividends this year. I think I already mentioned the fact that the recovery is ongoing. These are our sales growing in the different area, flat in the Asia Pacific, where we have different dynamics in the different regions, but very strong recovery in the Americas region, mainly in North America. North America is a market that is back to the pre-COVID-19 level, probably even above that level. And indeed, our sales in that part of the world are very high, in particular, in Food & Beverage, and we will see this later on. Europe is slightly behind the Americas, but quite close to the '19 level already, and we expect that this should be already the beginning of this year. The Asia Pacific area and Middle East is behind. Still, some area in the Southeast Asia are closed. Japan is still difficulties. But what we see during the past days is that also, these area are in a recovery trend. If not at the end of last year, even if also in Q4, the Food & Beverage and the recovery in the area. Beginning of this year, we see many projects revitalizing and getting orders also, from these areas. So all in all, a positive market environment. The fourth wave seems to be not impacting so significantly this business. Personal experience is that still suffering at the travel business. So whatever is related to travel business because still a lot of company out working are keeping people working from home, but the outlook is positive. Going into the detail of the Food & Beverage and then the Laundry business. Not unexpected, the Food & Beverage reported a very strong growth, organic -- and to the organic growth, we also added the acquisition, the net sales of Unified Brands for the month of December. So it is only 1 month. Later on, we will give you more details about Unified Brands performances. Sales, very strong. I mentioned Europe, in particular, some countries in Europe, Italy, first not only, even stronger in United States, 50% growth in the quarter is an amazing one. But as you can see, differently from the past report, even the Asia Pacific and Middle East area delivered growth in this part. Margin in this case is affected significantly by the acquisition costs that have been reported in the quarter. If we move to Laundry, the laundry growth is lower than the one we had in Food & Beverage. Also this one, not unexpected, but I have to say that Laundry in most of the country is already on the 2019 level in Q4. So we are expecting to go over the pre-pandemic situation in the full year 2022. So sales were driven mainly by Europe and United States, again, and profitability is in line, I would say, with the good profitability we had in the other quarters, despite the headwinds. In particular, the material was affecting more Laundry than Food because of the kind of material that is used in the different product. With this said, I would let Fabio comment the financial results.

Thank you, Alberto, and good morning to everybody. As anticipated by Alberto since quarter 2 last year, we have been able to increase consistently both the top line, but also the EBITA value quarter-on-quarter. In Q4, EBITA grew close to 16% year-on-year. Like-for-like, meaning excluding Unified Brands and associate integration and acquisition costs that accounted for SEK 56 million in the quarter. EBITA was approximately SEK 210 million, meaning SEK 70 million better than quarter 4 2020, with a quarterly margin closer to 10%. Volume growth, as well as the benefit from 2020, the structural plan cost savings were the main driver of this EBITA increase. When reading through the P&L, gross margin increased to 32.7%, 1.6 points higher than 2020, thanks to higher sales and production volumes. Productivity in the factories also positively contributed to the improvement of the margin. The impact from price was positive in the quarter. We had a positive contribution from price, but it was not enough to compensate the material and transportation cost income increase. And the gap between the contribution from price minus the additional cost in material and transportation cost was negative by SEK 35 million. When it comes to this year, we expect material cost as well as in the minor term transportation to increase during the first quarter of this year. We anticipated during last call an additional price increase since January 1 of this year, the price increase is in place. Such price increase should bring the company to compensate the direct material cost increase from quarter 2 -- already quarter 2 of this year, but we expect still a negative gap between the contribution from price and the increase of raw material components in an area of minus SEK 60 million to minus SEK 70 million in quarter 1. When it comes to sales administrative expenses, the increase in value quarter-on-quarter, even excluding the additional acquisition cost, but the weight on sales was reduced to roughly 24% on sales. Business activity [Technical Difficulty] to support the volume growth and the SG&A includes also year-on-year, the additional accrual for the variable pay. In the quarter, the government subsidies was around SEK 10 million compared to SEK 18 million of quarter 4 2020. And the benefit from the restructuring contributed with additional SEK 16 million in the profitability of the quarter. When it comes to the development of operating working capital, at the end of December, operating working capital was reduced by 5% year-over-year, the same perimeter, meaning excluding the Unified Brands that was a remarkable achievement, considering the sales growth we reported for the quarter and the full year. Average operating working capital and sales, therefore, was decreased to below 15%, with reported 14.9% at the end of last year, a result that is in line with our financial targets, but also, as you see from the graph, showing a pretty consistent improvement quarter-on-quarter since September 2020. After the acquisition of Unified Brands, our financial position remained pretty solid, with a ratio of net debt to EBITA below 2%, meaning at 1.9%. And at the end of December, Electrolux Professional had a liquidity fund for SEK 849 million and revolving credit facility available for close to EUR 100 million, meaning that we are fully equipped to support also, from a balance sheet perspective, the development of this group. As anticipated by Alberto, cash flow was pretty strong in the quarter, but I would say pretty strong also for the full year. During 2021, we delivered over SEK 1.1 billion in cash flow. I would call it quite remarkable results that is bringing this group to the cash generation we enjoyed before COVID, in the year 2017, 2018 and 2019. So overall, I would call it, a positive quarter where Professional delivered a significant EBITA and a strong cash flow. The balance sheet remains strong and adequate to support the business and the margin expansion of this group even after Unified Brands acquisition.

Thank you, Fabio. A couple of words about Unified Brands that is now part of the group. So you can understand that I'm personally very happy to have this company becoming part of the group because it's clearly addressing one of our strategic priority, that is the development of the business in North America and the development of the business with a [ chains ] that are mainly or at least, the largest one are headquartered in North America. So I'm very happy to have this team on board, a great team of people that is in the business, very experienced in the business, with strong and well-recognized brand in the market. We are talking about a company with roughly 600 employees, with the 2 facilities, 1 in Michigan and Mississippi. R&D capabilities, both obviously, to develop the product, but also to serve chains with customized solutions. That is important and strategically important to address these kind of customers. It's a company with more than SEK 1 billion of turnover, Fabio will give us more details, and with 2 major brands that are growing and round out, that are typically serving the institutional market with cooking solutions and the chain market with customized prep tables. So a lot of the big chain company are now our customers. We are a trusted supplier of this company and we surely intended to leverage this organization to develop the business in that part of the world. But Fabio, please, with some additional figures about the financial of this company.

Yes. Thank you, Alberto. So as you heard from Alberto, Unified Brands was quite a sizable acquisition for Professional. On a pro forma basis, assuming Unified Brands was part of Professional for the full 2021 year, this would have meant to increase group sales and EBITA by approximately 15%, meaning increasing significantly the presence of Electrolux Professional in U.S. market as well as delivering, I would say, a better geographical balancing. Sales of the company grew 21% year-on-year compared to 2020 and the growth also in quarter 4 was pretty remarkable. Underlying profitability of the company in 2021, excluding the acquisition cost, excluding the integration cost, was around 9%, with a significant improvement compared to the previous year. The company has managed pretty well also from asset management perspective and the operating working capital on sales of Unified Brands is slightly below the rest of the group average. As the rest of Professional, Unified Brands also enjoyed quite an increase of order intake during last year, and that [indiscernible] up of the year with a pretty good order stock. So I would say, I can only reiterate the message from Alberto, pretty happy about this acquisition that can make a change in our present U.S. market. And also, from a financial perspective, an acquisition that has an ingredient to deliver a good 2022 as well. And with that, back to you, Alberto.

Thank you, Fabio. And if we move on, on the things happening in the quarter, I would say that Q4 was a quarter pretty full of important events taking most of our strategic priority. First, for instance, we have been growing for the third quarter in a row, our customer care business. That is an important one. We suffered the missing growth of this part during the pandemic because our technicians were not allowed to visit customers. Now, for the third quarter in order, despite the high growth of the product, the customer care business grew more than the product sales. And we all know how important is this one, and this is one of the cornerstone of our strategy. We brought a new product to the market. We are not commenting this right now, but we will do it in the next step that a product addressing chains, in particular, and mainly that will surely deliver positive impact to our business. We completed the rollout in the first 3 countries of our Digital OnE platform, that is the new platform, connecting product, customers and the company in a digital environment that will make the customer life easier and our performance better, both in terms of service, but also, in terms of efficiency and productivity. But mainly, we have been -- I'm very proud to say that we received the first -- for the first time, the rating from the CDP. This is important because we are the only company in this industry with a rating in this one. It was the first time that we disclosed our climate impact through the CDP, and we got a B rating with that. I have to say that it is a good one. It is a very good achievement also, considering that, that it is the first one. And why I'm underlining these things so much? Because despite the overall importance to be a sustainable company, a company that delivers sustainable product, I believe these days, our focus on this matter is making us even more competitive than what we were. We all talk about the dramatic increase of the cost of energy, the cost of gas, the general cost, and with our range of being so focused on the lifetime cost and not more on the just purchasing price of the cost. So providing long-term benefit to the customer on the savings that the usage of our product can provide, I believe, these days, we are even more competitive than before because energy and gas increasing are important elements in the running cost of our customer and with the possibility to cut in of this cost, thanks to the performance of our product, I believe this makes them even more attractive and more competitive. So very good things, things that is making me proud. And I'm sure it's just the first step in a journey that will make us better and more sustainable as a company. With this said, if I have to summarize what is behind us, but at the same time, what is in front of us, the recovery of the market is continuing. And with the recovery of the market, our growth, our sales have been growing in the quarter, and we expected to have the market back to the 2019 level at the beginning of this year. The order stock is a record level. I said it that it probably it grew so much during the last month, weeks of 2021 because of the announced price, because of the concern of not receiving the product, but it's also true that it didn't drop in January. So we still see orders coming and also the market that didn't move during 2021 are now restarting activities. The performance of the company are solid. So the underlying business is for the third quarter of 10%, also considering that we experienced an increasing headwinds related to the inflation in general inflation, energy, transportation material that was only partially offset by the price increase that we did in 2021. And this is the same for the first quarter of this year. As Fabio said, we still see that even if the price increase that we announced and we implemented from January 1 will mitigate this inflationary cost from Q2, with a growing positive impact average [indiscernible] equal. We see that in Q1. We will still suffer the higher cost -- general cost to run the operations. The acquisition of Unified Brands has been completed. This clearly strengthening our position in the U.S. market that is the one with the fastest trend in the recovery, that is the home of the largest commercial restaurant chains, that is 1/3 of the global market. So all in all, I see the quarter closed with solid results. I see still the mention of the challenges in Q1 that we are set to offset. Sorry to play with the words. And the outlook for the medium, long term is a positive with the recovery of the market and all the things in place to continue to deliver solid results.

Thank you, Alberto. And with that, we open up for questions. Please go ahead, operator.

[Operator Instructions]. We've received the first question. It is from Karri Rinta, Handelsbanken.

I just wanted to ask a few questions about the Unified Brands. If we look at your North American business, before Unified Brands, it was probably quite a bit of Laundry and Beverages. So specifically about the Food part of the business, how much bigger will Unified Brands make you in North America compared to what you -- the position that you had before? That's my first question.

Yes, Unified Brands is making us a significantly larger than what we were before. We are not disclosing the separation between the Beverage and Food, but you're right that Beverage was an important part of -- a significant part of our Food & Beverage business in North America. The Beverage business is the one that we got through the acquisition of Grindmaster-Cecilware. And I would say, that the acquisition of Unified Brands is bringing us to a level that is much higher than what it was. It's bringing us to a different level, also in terms of relevance, in front of the reps, the dealers, the network in North America, the distribution network in North America.

Perfect. And then, the higher underlying margin that Unified Brands had last year compared to what you had in Food & Beverage. Is that -- or maybe, more specifically, have you said anything about what percentage of Unified Brands, or their sales comes from after sales or from customer care?

No, we did not disclose that one. We can say that there is room to improve also the percentage of sales coming from customer care in Unified Brands. So we know that the margin of the company was higher in the pre-pandemic period. The company went through a restructuring in the years before the pandemic period, moving from consolidating in the 2 current factories. They have also done some disruption related to this consolidation that resulted in some problems that have been addressed. So now, quality of the product is a great service to the customer despite the current, obviously, long delivery time related to the components availability, the problem that everybody has, are okay. And the trajectory to grow back the profitability is good, and we are expecting this to be delivered by the team that came together with the company.

And then finally, what should we expect to be our key priorities for Unified Brands in 2022? I guess, in the early part of the year, it will be a lot about sort of technical integration of systems and so, but will there be any scope for -- I'm trying to -- I know that there will not be any cost synergies and even the cost selling synergies are a bit way out. But -- so what will you focus on this year, when it comes to Unified Brands?

Yes. So the first part of the year, you rightly said the focus is to complete the separation from the Dover Group. We have been going through a separation from a group being a division of Dover and becoming independent. So focus is on their, completed the temporary service agreement, completing the separation, getting a stand-alone operation model with all the function operating in the proper way. Then clearly, and I'm not saying that we will do -- we will not do this in parallel, but we'll start looking at what we can get, how we create value with this company, making sure that 1 plus 1 makes more than 2. Again, don't think that we didn't think about that already. Obviously, it was part, also, the business case to justify the acquisition. But now that we are all together, we are start grouping and understanding how we are able to create value. And I believe there is a lot, the meaning that, that chains served that in the United States, we can -- thanks to the [ Atlas ] Infrastructure serve also abroad or thanks to the legacy relation that Unified Brands has in North America with dealers, reps or chains further increase the business that we currently have.

I have a follow-up question from the web connected to Unified Brands from [ Rodolfo Zeidler, Paradigm ] Capital. He's asking about our expectation regarding normalized long-term EBITA margin of Unified Brands. And if we can explain the difference between ePros, Food & Beverage target margin? Is there a difference?

What we can see and what we can say right now is that Unified Brands is perfectly aligned to contribute to reach our overall target in terms of profitability. So Unified Brands is a company. You see the underlying EBITA that we had in the quarter is align with the overall company EBIT. That is a mix between the Food & Beverage and the Laundry business. So I would say that the contribution of this Unified Brands will be positive in the -- even in the short and medium term.

Please, operator?

Then we go to the next question. It is from Johan Eliason, Kepler Cheuvreux.

Yes. Just a question while we are on the subject of the margin. You obviously have a long-term target to reach, 15% EBITA margin someday. We heard your German competitors sort of saying that they expect margins to improve going forward, but it will take years until they are back at the pre-pandemic margin level. What's your sort of view on the timing of you hitting your target, which is sort of above what you reported or pro forma indicated before the pandemic?

We are not disclosing the timing, but we see that performance are improving. They've been improving, thanks, also, to the recovery of the market at the beginning of the year, or let me say, since the half of the year before. But then, we had these headwinds related to the raw material price increase, to the transportation cost increase, to all the inflationary item, now adding the energy cost increase. We took actions with a price, both during the summer and beginning of this year. We have to say it is clear, it is in front of us, and Fabio was clear about that, that the action taken with the increase of the price didn't offset completely the too rapid increase of the cost that we experienced in Q4, particularly during the last part, and are staying in Q1. So we also see that, starting from Q2, this action will give us the benefit, meaning that offsetting the inflationary items and as a consequence, gradually giving us even a positive contribution. If look -- if we remove this effect, the trajectory is positive and Unified Brands will help to accelerate this one because, as I said, it is in line with the total company profitability, also Unified Brands has a positive increase in trajectory. And being in the U.S. market with the chain customer, we are -- we have good expectation on the matter.

Excellent. And your comments on Q1 margin, is that mainly related to that in Q1, you will mainly deliver off your current backlog and then the new orders, with the new pricing will sort of only hit your revenues by Q2 going forward? Or can you do anything about the pricing in your backlog?

Obviously, it is hard to get -- to change the price with the back -- on order that we already confirmed, even if in particular, the order that we received during the past -- the last part of the year, we have been clear that if the customers will not get the product within a certain period of time, we are going to apply the price increase. It will be a matter of negotiation, but it is. I think it's important, this one. Majority of the sales in Q1 will be done with orders that have been confirmed with the old price. But it is also true that gradually, orders are kicking in with the new price. And this is important. If you look at also, the mix, the contribution for price is increasing along the quarter, and we are expecting that it will further increase in Q1 and Q2. Sorry to say, not enough in Q1 to cover the extremely high inflationary item.

And then, talking about the inflationary items. Remind me, do you have any sort of hedging policy regarding stainless steel prices or steel prices or anything?

Yes.

And have you changed that policy this year?

No, we are hedging. We are hedging the stainless steel, the base of the stainless steel. So we have been hedging the price of the base for the first 6 months because clearly, the hedging was done during the last part of the year when the price were already pretty high. The point is that, for instance, the nickel that you cannot hedge and that is backed in mainly the stainless steel is -- it was touching the record level, I would say, in the past days. So the big part is hedged, but there are still variances. And the hedging it is for the 6 months. The uncertainty is still high, so we don't know what is going to be expected in the second part of the year, possibly better situation, but that is our policy and we are sticking.

And then, just on components. Do you have any specific components like the car industry talks about semiconductors that is causing you supply disruptions? Or is it just the general cost inflation and logistics costs, et cetera?

It's general cost inflation, but components, I would say that in some way, we have the electronic components in general. There is scarcity. In this moment, we are able to run production at normalized full capacity, in the meaning that we are working on one shift in every factory as normal, let me say. The thing that we have trouble to do is, for instance, to plan further increase of capacity, that in some cases, would love to do, because I repeat we have a record order stock. So we could increase, further increase capacity. I still believe that we have to wait some weeks, not months, but some weeks to go for that one because of the uncertainty for what concern the supply gap, but it's much better than what it was at the beginning of the last quarter.

Okay. Excellent. And then, maybe, a bit more forward-looking coming back to Unified Brands. They seem to have a pretty broad product portfolio, but I understand part of the idea is that it will be a sort of an access to distribution network, also, for some products you have already. Are there specific technologies that you already had before that you think will fit quite well to this customer segment, the big chains that Unified Brands now give you access to? Or will it have to be developed by using your larger R&D platform?

No, no, no. I believe we have everything that could match the needs of the customers. And as you rightly said, we can leverage the strength of this organization to further expand the business in North America and with this customer. Then in particular, when we talk about chains, many times, chains are looking for customized solution, but that would be independently from Unified Brands and independently from us. For what concern that the product technology, as you rightly said about technology, I believe that everything is set.

Before we move to the next question, operator, I have a follow-up question from [ Stellan Hellstrom ] of [indiscernible] Capital, and it's also related to price and raw material costs. And his question is, if we can comment on how we see January price increases are accepted by the market, and how much of the raw material cost increase we expect to offset. It's related to what I think Fabio discussed before, if you can repeat that cost range, how much we expect to have extra costs in the first quarter?

Yes. I believe Fabio, you can comment again about that. The only comment that I can say about the customer accepting, obviously, it is different, customer by customer. There are customers with whom we have a long-term contract that is more challenging. There are customer that wants to negotiate, as usual. At the same time, we have to say that there is a general understanding that everything is costing more. So the general understanding is there. So from this point of view, I don't mean that it's well accepted, but at least it is understood. Please, Fabio.

Yes. So let me just remind what happened in terms of material and price increase during 2021 and now, beginning of 2022. As a reminder, we have put in place a first price increase in July 1, 2021. And then, we proactively took the decision to communicate to the market a second price increase in the autumn of last year with effective date, January 1, this year. The raw material and together with transportation costs at the same time, have had an accelerated cost increase, in particular in quarter 4 of last year. As I mentioned earlier, in quarter 4, we reported a negative GAAP between additional price positive contribution and raw material and transportation cost in the area of SEK 35 million. So quarter 4 results, in terms of EBITA was negatively affected by this amount when we look into the margin. This direct material cost increase is expected to further enhance during this first part of this year. Price will start to kick in, as Alberto anticipated earlier, the majority of the sales of the quarter 1 will be after the 2021 pricing, meaning that the gap between price and cost will be larger to from SEK 60 million to SEK 70 million year-on-year. At the same time, we are confident and Alberto commented earlier about the price stickiness that already from quarter 2 of this year, the additional contribution on price will be able to compensate the material cost increase.

Thank you, Fabio. Operator, please go ahead.

Then we go to the next question. It is from William Macaulay, Morgan Stanley.

So for the first one, sorry to return to price cost. We have a negative balance in Q1, and then it gets positive in Q2 and increasingly positive through the year. So overall, for 2022, do you think the balance should be positive or negative based on what you currently see?

With everything staying the same. Sorry to repeat this one because really the fluctuation that we see in the price of the raw material these days is -- energy and price is quite significant, but considering stable elements at the current value, we see that the overall impact along the year will not be negative. It will be slightly positive, but it will not be a negative. The purpose was exactly this one to balance with the price increase applied January 1 to offset the inflationary item that was at our knowledge in place right now.

Okay. That makes sense. And I know this is a difficult question for you to answer because the price increases are different levels across different products. And then the net effect you get is always a bit less in the gross because of rebates, but how should we think about the overall price increase you have? The price benefit you're going to have in 2022? And maybe, if you can't give me the actual number, could be bucket perhaps between mid-single digits, high single digits and low double digits?

But I think, first, we don't give the element of the price increase, but it's not only because we don't disclose this number, but because it's very different, product by product and region by region. There are different habits. For instance, North America and Europe are, in some way, the extreme cases, where in North America, both the applications, so the implementation, the execution of the price increase, as well as the magnitude of increase is different from the one that you can expect in Europe, where in many cases, you are -- you have limited the possibility because of the long-term contract with the public institution and other things. So it's very different by region, and also by product because I think Fabio mentioned that the impact on Laundry in Q4 was higher than the one in Food & Beverage. Now, we have the nickel going up, that is mainly impacting the stainless steel and as a consequence, the Food product. Beverage is mainly plastic. So according to the kind of product, we have a different impact and we apply -- we don't go flat on everything, but we do category by category, different increases.

Okay. Sure. And maybe, finally, are there any further kind of integration costs or uniform restructuring cost for Unified Brands in 2022? And against that, are there any savings you can expect to come through?

Yes, there are, and I would let Fabio comment about that.

Yes. We expect this year to have roughly SEK 10 million between integration costs and inventory step-up falling into quarter 1. For the remaining part of the year, we expect to have no additional cost regarding the integration.

Okay. And any additional savings for the business as a whole that we can expect?

As that Alberto anticipated, we are working on 2 sides. First are the priority from Unified Brands management and ourself is to complete the separation from Dover group and have Unified Brands working as a stand-alone operation within Electrolux Professional group. This is priority together with business development. At the same time, we are working to understand which are the additional value we can implement from this acquisition, both on the sales side, but also looking into opportunity on the cost side. I would say that expectations are more going into the top line development, as Alberto mentioned, in particular, into U.S. and the chain business.

Yes. Please, operator, go ahead.

The next question is a follow-up question of Karri Rinta, Handelsbanken.

Just a simple modeling question. What kind of depreciation and amortization rates we should have for 2022 on the back of Unified Brands?

I can take the question. I would say that in terms of depreciation, the weight of depreciation on sales due to the Unified Brands acquisition will not change, whilst we see somehow a significant increase linked to amortization.

So significant or insignificant?

Significant.

The next question is from Henrik Christiansson, Carnegie.

Yes. Two questions, please. First one on FX effects. You had the Swedish krona weakening quite a lot here recently. Do you have any major FX effects or benefits from that or negatives coming through in your EBITA into 2022?

I'm not going to speculate on currency at all into 2022. We are living clearly in an environment that is pretty much volatile. We are seeing, in particular, in these days, what is happening on the U.S. dollar, getting stronger against Euro and other currencies. So we are really in a pretty volatile environment, where it is also difficult to give direction. If I can give a comment instead on the quarter 4, I will say that the overall impact between currency transaction and translation was pretty neutral in terms of EBITA, summing up the 2, vis-a-vis currency translation being negative and compensated by positive currency transaction mainly linked to U.S. dollar.

And based on current -- you don't have to speculate, but based on current FX, will there be any material impact or will it be similar to Q4?

Difficult to give a direction in this moment. Let's see how currency will develop along the first part of this year.

Okay. Great. Second question. I mean, you talked about markets being back to 2022 levels here, this year. I mean, could you provide a bit more color around what segments are driving that? If I look around, both flash business travel seems to remain at low levels, conferences, big gatherings are also at low levels. Which segments are back or above pre-pandemic levels? And what segments are still to recover?

Yes. Okay. In general, the Laundry segment, specifically Laundry segments are back to the '19 levels, so the pre-COVID. So the [ launderette ] segments, apartment laundry, all these ones are back, I would say, even better than the pre-COVID situation. Another segment that is in better condition than the pre-COVID is the one related to the commercial restaurant chains. I would say, all over the world, so not only North America. Even if this segment is huge in the North America market, and this is also explaining the different dynamic of the market in that part of the world. We see that also, the hospitality in general, so the hotel restaurants are starting investments. So during the summer of last year, the main part of the business was a replacement. So these operators are restarting their activities, just replacing similar items, but postponing the larger investment to -- for the complete refurbishment of the kitchen or of the laundry operation. Now, these investments are coming back to life. And as I said, also at the beginning, geographically, and they are not limited only to the countries that recovered earlier. Oceania, China, North America, some European countries, but it's expanding also to the Middle East, also the Southeast Asian countries. So the only segment that the only -- the main segment that we still see suffering is the one related to travel. So travel business, restaurants in the airports, hotels, also, mainly used by travelers and obviously, the restaurants related to travelers. That is still suffering quite a bit. And I would say that also, personal experience, if you look at overseas flights, before Christmas and after Christmas, before -- because in some way of the second wave was limiting this move, not stopping, but limiting. The other segment that is still suffering, but in some way, they converted themselves is the one related to the restaurants that were in the business centers. So with the fact that still a lot of people work from home, the places that were mainly working with the employee going out for lunch during the business hours is still suffering. I have to say that in this case, the segment converted their business to the delivery one. A lot of them are now working more on the delivery. We have been talking about the delivery business growing during the pandemic because people were not able to go out for dinner, for lunch or whatever. That is something -- is a habit didn't change. People restart going to the restaurant, but at the same time, they didn't give up the habit to get food at home. So many restaurants that were not used to deliver and they started to do deliver and they are still continuing to have this one because they discovered that is a good and profitable business, as well as the increasing share of the business that -- the dark kitchen. So the kitchen that are not visible to customers, but are used only by the delivery company is also growing quite significantly.

Okay. Thank you. I think we have no further questions. So with that, I would like to say thank you for today, and have a good weekend when it comes, and speak to you next time. Thank you, and goodbye.