Fagerhult Group AB (FAG) Earnings Call Transcript & Summary

Hello, and welcome to the Fagerhult Group Year-End Report 2021. My name is Lauren, and I will be coordinating your call today. There will be an opportunity for questions at the end of the presentation. [Operator Instructions] I will now hand you over to your host, Michael Brüer, to begin. Michael, Please go ahead.

Thank you, Lauren, and hello, everyone, and welcome to our presentation of Fagerhult Group's Q4 and full year results for 2021. My name is Michael Brüer, responsible for Strategy and Communications at Fagerhult Group, and I will be the moderator here today. On the call today, we have our President and CEO, Bodil Sonesson; and our CFO, Michael Wood. The presentation will be outlined like our previous calls. Bodil will start with a brief update of our Q4 and year-to-date numbers. Following the financial, Bodil will also give an update on our business model and the new structure we implemented last year, including a brief introduction to our business areas. Michael will then give you more details about the performance of the Group, and Bodil will conclude with a brief recap and afterwards, we will open up for questions. We will first allow for questions from the conference call, and then we will allow for questions from the webcast. So if you would like to post questions in the webcast, please do so in the chat window on your screen, and I will read them up. Before we start, let me also remind you that today's session is recorded and will be available on our homepage later today. With that, I hand over to you, Bodil, and please go ahead.

Thank you, Michael, and welcome, everyone. And as Michael said, I will start with a short summary of Q4. But before I start, I just want to make a very quick comment with regards to today's sad news from Ukraine and also the impact it has on us to give you an overview. We have no local presence in Ukraine. We have 2 businesses in Russia, which is one sales office of Fagerhult and one for iGuzzini. For the Group, we have less than 2% of our sales in Russia. But having said that, it's minor from a sales perspective to us, but of course, we think about our employees, and of course, we care about them. So our thoughts go to them. And we will -- and we are already and have been for quite a few weeks, of course, closely following the situation and we will follow Swedish and European guidelines for how to deal with the situation going forward. So then I will go back to Q4 and a little bit more of a positive tone. And we had, again, very good order intake, and we end the year with an all-time high order backlog of SEK 1.89 billion. So we've seen increased market activities in all our major markets and very well spread over the different business areas. I said in the last reporting for Q3, that we were back to almost normal working conditions on the commercial side and even with Omicron present around us, we have kept to a higher safe activity than earlier in the year, especially of course in our local country operations. The negative part is unfortunately the impact of the supply chain continues and will continue, and we have not seen the end of it yet. The fourth quarter impact by these challenges were higher than anticipated, and we determined that we had SEK 107 million that could not be delivered in the quarter, which is SEK 40 million more than the last quarter. So that shows that the challenges are getting a bit bigger in the supply chain. The biggest -- currently the biggest challenge we have is on the electronics side, and we continue to do our utmost to keep our service levels to our customers, which demands a lot of work internally and the constitution will continue to be unpredictable. Having said that though, we see -- we continue to see very healthy margins, thanks to increased market activities and a good cost control. And you know we worked with these activities all over the year in 2020 and 2021. So that enables us to again deliver a strong EBIT numbers for the quarter. We continue our work on the sustainability side in the Group. We have done extensive work in identifying our baseline, both for Scope 1, 2 and 3 in one of our business areas, and we will continue with this work in the remaining 3 business areas during the spring. And this means that we can set concrete and measurable targets towards -- against the baseline. And our ambition is to communicate this to you on the Capital Markets Day end of August. And we will, of course, come back with invitations to the Capital Markets Day in due time. On the connectivity side, we also continue to see strong interest from the market and a good uptake of our latest launch Sensor from organic response. As you know, this is also an important part of our sustainability offering because with connected solutions, lighting is only used when needed, which has a big impact on the energy use and the climate impact. So we're also in the process of strengthening the team, and we're currently looking for a full-time CTO heading up our connectivity initiatives to be able to further accelerate them. If we then look into Q4 in figures, I would say they're all positive numbers. We have increased order intake with 15.8% organically in the quarter and net sales with 6.9% organically. We add on the SEK 107 million that we weren't able to get out because of the supply chain challenges, that number would have been over 13%. And the EBIT, we reached was SEK 161.1 million, which represents an 8.9% EBIT margin. And a year ago, that EBIT number was 7.9%. And Michael will come back with a lot of more details later on in the presentation. If we instead look at the full year numbers, there is, of course, a very clear improvement compared to last year. Order intake for the full year increased with 13% organically, so a number we're happy about. And that's leading to the strong order backlog that I was saying, SEK 1.89 billion, which is up 49% compared to the beginning of last year. And net sales increased with 7.4% organically and EBIT, as I said, substantially improved from SEK 442 million last year to SEK 706 million this year, which is an increase of [ 60% ] compared to 2020, and we are again back to double-digit operating margin levels for the full year. There has been a lot of hard work done by many in the organization in both lowering cost levels and increasing industrial margins in the challenging external conditions. And of course, this strong results also lead to a very good bounce back in EPS increasing from SEK 2.73 to SEK 2.64. So that was a very quick update on the financials. And as Michael said, today, we want to focus on our business areas. As we are getting a lot of questions about -- and since we did this organizational change, we did on March 1, 2020, we have had very limited occasions to meet you face-to-face to present them and also the why behind them. So if anything remains unclear after today's presentation, please don't hesitate to raise the question later on. So the change in our organization was the result of the numerous good acquisitions that we've done over the past 2 years. And we now wanted to make sure to better capture the market growth opportunities to better and close the collaboration. And I think this became even more obvious after the acquisition of iGuzzini that gave us a true global footprint and access to a stronger stakeholder network of architects and lighting designers all around the world. That also meant that when we outlined the organization, we wanted to base it in the market, so we use the so-called outside in prospecting, started with the market and looking at similarities and opportunities for collaboration and growth. And the different parameters we considered was common customer segments, stakeholders and geographical markets. One additional benefit of this organization is also when we look at potential future acquisitions, there is already a clear structure in place where they belong and contribute to one of the business areas. Then we have been speaking about before that we have a few common group initiatives, which I won't highlight so much today which is connectivity, sustainability and people and culture. We also cooperate in many other group-wide initiatives that we call forums, for example, within purchasing, finance and innovation. But that is, however, nothing new, and it's been a successful working model for us for many years. So we will continue on that. So then let's move over to the third business area being connection. And I think a very common saying is that a picture says more than 1,000 words. And therefore, we have chosen to give you a lot of pictures in this slide, as we believe what is for us evident when we think about the different businesses, hopefully, will give you a sentiment for what kind of brands are in the different business areas. All of our brands are quality lighting brands. We do not do low-end products. And as you call -- and as you know, everything is produced in our own factories close to our markets, and we do a lot of so-called bespoke lighting solutions, customized to specific customers. The brand in collection, as I hope you can see on the pictures are our most high-end brands. And if you look at the map, it's highlighting in dark where you have our own local presence and in other parts of the world, we are represented by partners, because the collection business is very much of a global business. We do both outdoor and indoor lighting within Collection, and we are, for example, #1 in Europe in urban landscape lighting, which means that we are contributing a lot in making our cities more beautiful. So Collection works with several high-end segments, culture, hospitality, high-end residential, urban landscape and high-end offices. The stakeholders are the global community of architect and lighting designers. This means that very often, we are involved very early in the project and all the way through, which gives long-stage cycles and also very strongly specified projects. The many growth opportunities within Collection, we have 2 German brands, 1 and 1 Italian with slightly different focus and own design languages, which gives complementary product portfolios. We also have different geographical footprint between brands, which we can use to grow into new markets. The main opportunity is to become much more successful in North America, where we today have 3 brands presence, and we have started this work and as you might remember, iGuzzini acquired the remaining part -- part of our North American partner Sistemalux in the last quarter. So we will continue our growth from there. And now I will hand over to Michael to give you a short financial update for Collection for Q4.

Hello, and good afternoon. So very briefly then for business area Collection for the fourth quarter. The business area continues, as you can see, to deliver strong organic order intake growth at plus 25% in the quarter and plus 14% for the full year. This growth is slowly, and I used the word slowly deliberately, slowly increasing the net sales with plus 9.3% organic growth in net sales in the quarter, which, as Bodil mentioned earlier on, have been affected by the supply chain challenges. And in business area Collection, it was SEK 49 million of an impact and you can work out for yourselves what that would have given in organic growth in business area Collection, had we have been able to deliver that. Of significance, what I'd like to point out is the full year operating profit has more than doubled in the business area and margins have increased from 3.2% in 2020 to over -- sorry, to 7.6% in 2021. So a very good, strong recovery from what we had in the year 2020 in business area Collection.

So then let's look at Premium. And as the name indicates, Premium is also high-quality lighting solutions, but with a very different focus on segments and geographical coverage. The 2 brands are Fagerhult and LTS, which have their home base in Sweden and Germany. In all countries on the map, Fagerhult or LTS have their own sales companies that focusing on selling to 2 brands, which means a strong presence in the Nordic and Western Europe. The focus segments, as you can see on the pictures are office, health care, retail and outdoor in some parts of the area. The business area also has a close cooperation with many large retailers, which we work and serve globally. The stakeholder focus is also here on lighting designers with a strong focus on that good light brings a difference for us as users. We're also working with high technical knowledge in close cooperation with electrical consultants and with a strong focus towards easy installation for the installer community. What brings opportunities here is that in many of the countries we have so far only have focused on 1 or 2 segments and have still not started proactively working with other segments. The most obvious example here is Germany, where LTS has a very strong retail portfolio and good presence. Fagerhult as a strong offering in office lighting, but it's not selling anything to the German office market today. The work is undergoing -- to this collaborate to capture this opportunity. And as you might have heard before, the German market for office lighting is the biggest in Europe. So then over to the financial picture for Q4.

Okay? Obviously a slightly different delivery today with the business area. So first of all, happy to talk about business area Premium. In the business area, for the fourth quarter, we report a 16% organic growth on order intake and 13% for the full year. Profitability is consistently good. It remains strong, and the quarterly trend, as you can see, has been very positive for the last 2 years. And with that, 14.9% operating margin in the quarter, the business area is clearly leading the way. For the full year, profits have increased 47% in business area Premium.

Okay. And then let's move over to Professional. And this area Profession is a little bit different from the other ones as they have a very strong national focus. And in the businesses we're having today, they are present in the U.K., Turkey and Australia, and all of them have main focus on indoor products. That means that their cooperation possibilities are different, less from direct sales cooperation into different international markets and more from sharing best practices in corporate in different initiatives that could be around market understanding or different segments. As you see there, you can see from the pictures, all of the bands are very strong in health care. And therefore, they can also share product ideas or R&D initiatives, where one is licensing products from the other one and then produce it locally. An example of such an initiative has been the work on strengthening their decision on sustainability and how to develop solutions that are Cradle to Cradle certified. In that way, we can make the move much quicker. And you can see from the picture, they have in common that they're strong in the same market segments, which are -- I mentioned health care, but also office and education. And they also work more -- they work towards the same stakeholders, being a little bit different from Premium, also electrical consultants, but a lot with construction companies directly again. To then look at their financial position for Q4 as well.

Okay. Professional covering Arlight in Turkey, Eagle Lighting in Australia and Whitecroft lighting in the north of the U.K. And the key metrics in the fourth quarter that I'm not going to go through because they are very similar to the full year. So I prefer to give you a full year, where all 3 businesses contributed to an 18% full year organic order intake growth, combined with a 25% organic net sales growth and a fairly significant 178% increase in profitability. The full year operating margin, again, in the business area Professional, more than doubled from 3.7% to 8.4% and what we would like to point out here as well as a comment that's equally as relevant to the other business areas is during 2021, we saw a much improved consistency and predictability with the quarterly results coming through, not only from Professional but from also the other business areas in the Group.

And with that, we come to the fourth business area, which are -- which is Infrastructure, that has a clear focus on Northern and Middle Europe, which are the respective home countries of the brands on Finland, the U.K. and Netherlands, and they also have their own sales organization in Germany and Sweden. Sometimes they follow their customers from their own countries around the world in specific competent segments like paper mills and heavy industry. The name of the business area Infrastructure is very well describing the customer segments. As you can see on the picture, being critical infrastructure industry and distribution, very different from what we saw from Collection. Veko has a specific product solution for the horticulture market in the Netherlands. The growth opportunities exist here in all segments and in all markets. Some of the initial focus areas of corporation is that the range of I-Valo and Veko has very complementary product ranges. For example, an industry, the I-Valo product solutions will be used for the heavier industrial side and Veko more on the logistics side, but they can very well go into the same customers. Therefore, we've also decided I-Valo have started to sell Veko solutions in Finland, and both companies have together invested in sales resources in Sweden. So with those words and pictures, I hope we've been able to give you a better view of why we went for the business area structure, their different market focus and markets, geographical markets as well some of their growth opportunities. So with that, let's look at the numbers for Infrastructure as well.

Okay. Finally, our last but not least, business area Infrastructure has grown well in 2 years. Despite COVID and the supply chain difficulties, in 2021, the business area grew organically order intake almost 5 percentage points. And a reminder that this also was on top of the 10 percentage point growth in 2020. Business Area infrastructure was the one business area that continued to go forward during the COVID year 2020 unlike the other 3 business areas. So it's year-on-year growth that we see in business area Infrastructure. The operating results, you can see the line on the chart to the right-hand side is very consistent and reliable. However, note the spike in the middle was the release and the reverse of an accrual for an unearned earnout in Q4 2020 related to the Veko business. This sum of money was SEK 41 million as a one-off adjustment. Other than that, very consistent, very reliable EBIT stream coming through from business area Infrastructure. Okay. I will carry on now with a little bit more detail on some of the financial side. First of all, though, let me say, we are pleased with the results that we delivered not only during the fourth quarter but also for the full year. We operate in difficult times. Times which have made more difficult from many external events from COVID and supply chain to geopolitical aspects, non-more true than where we are today, as Bodil has already mentioned. The recovery continues to make good progress. However, on a positive note, during 2022, we shall no longer use the word recovery in our description as this has negative connotation. So we prefer to use the word continued growth and development of the results of the Fagerhult Group that's an indication of how we see the Group now moving forward. Turning to the numbers. First of all, just to remind us that I communicate that the net profit and earnings per share for 2020 Q4 and full year 2020 have been adjusted because of the significant impact of the Italian tax decrease that we took advantage of during Q4 2020. We now view the numbers here on a lot more like-for-like basis with each other. The quarterly organic net sales grew 6.9%, which would have been in excess of 13% for the supply chain. And that 13%, this is much more in line with what we achieved in order intake. Despite the supply chain difficulties and the dark winter months of the fourth quarter, it was the second highest net sales performance during 2021. The operating profit of just over SEK 161 million delivers 8.9% margin, contributing to the full year rolling 12 months double-digit of 10.0 percentage points. The quarterly operating margin would have been in excess of 11 percentage points but for the drop-through that we lost from the supply chain challenges. Earnings per share, operating cash flow, I'll come back to a little bit later on in a slide or 2 time. Looking at sales development, it's clear to see the development in the rolling 12 months net sales is clear to see, we are on a journey to get back to pre-COVID levels, and we are making good progress in that trend. As stated earlier, if this chart was looked at with regard to order intake and not net sales, we would already be back to the pre-COVID level of activity. On the margin development and the quarterly operating margin positive is trend -- sorry, the trend is positive. Of course, the fourth quarter faces some challenges, especially for our businesses servicing the outdoor application areas. And furthermore, the impact of the supply chain challenges and the EBIT drop-through of the delayed sales is not insignificant, approximately 2 percentage points to 2.5 percentage points in the fourth quarter was the effect of this. Other than that, operating margins are healthy compared to what we see on the market for large-scale luminaire manufacturers and luminaire groups. Coming to the cash flow. Good -- the operating cash flow remains strongly positive. The Group has a good process and a good culture for profit cash conversion. During the year, the Group has invested in inventory levels by approximately SEK 200 million, and this was done specifically to support and service our customers during these difficult supply conditions. The cash conversion in the 2021 year was 114% of the operating profit. For the full year, the operating cash flow at just over SEK 800 million is additional to what we generated in 2020 and 2019, both of which were in excess of SEK 1 billion. Not surprisingly, such positive cash generation has an impressive impact on the net debt development. And you can see there from the highest point in the chart in Q1 2019 with the acquisition of the iGuzzini, we've come down now to an adjusted net debt of SEK 1.85 million and a net debt-to-EBITDA ratio of 1.87. A reminder that this chart is presented on an adjusted basis, adjusted for acquisitions and disposals to a pro forma basis and also ignoring the impact of IFRS 16. So the summary here is adjusted net debt down to below SEK 2 billion. Liquidity in the Group is at a good level and the balance sheet provides room for further investments. Earnings per share. The earnings per share number, we have adjusted this chart, and we're now going to stick with this format of presentation. If you do remember it from the earlier presentations, Q4 2020 where the adjustment took place, you can see the asterisk there on Q4 2020 and the adjustment relates to the impact of the large positive Italian tax decrease, which was not from a genuine trading point of view, not particularly realistic. So you can see the quarterly EPS development shows a strong trend. And in the quarter, SEK 0.61 per share was significantly ahead at the SEK 0.28 from 2020. And for the full year, a strong recovery to SEK 2.64 per share, which is more than a factor of times 3 the earlier year. Our ambition here of course is to remain at a higher level. Before handing back to Bodil for closing and [indiscernible] to grow, we should remember that continues to grow strongly. The order backlog position is at an all-time high. Net sales and EBIT drop-through are temporarily affected by the supply chain. Cost levels are under control, and operating margins are healthy. And when the supply chain challenges disappear, we will be shifting from -- sorry, from recovery to full ahead growth mode. And with that, I hand back to Bodil for summary.

And I think that was actually quite a good way of summarizing it and that when we look at all the Q4 numbers, I think they were all positive compared to last year. So a lot of positive and a lot of indicators in green. And also the fact that Q4 was confirming the trend of good recovery that we've already seen in the past quarters. So I think with ending 2021, we would not mention the word recovery anymore, but we will look into the future and be positive for that side of it. And I think we can say that also when we look into 13% growth in order intake and with record high order backlog, that is very positive. And also the fact that, thanks to all the good work, thank you to all the -- also all the people within the Group that have been doing the hard work we have returned to a margin level of 10%. We mentioned, of course, like everybody else, that the global supply chain challenges continue and unfortunately getting a little bit worse than they were before, and we don't see currently any changes in this, until at least mid-2022. We will try to do everything we can, to mitigate that. We will do every possible work for it, what it demands, but it will have an impact going forward as well. We also see very good progress with our strategic initiatives. We have good collaboration regarding our sustainability and connectivity initiatives, that continue to progress according to plan. I also hope that we gave you a good picture of the business areas, and of course, with a focus on collaboration, I think we're looking very much forward to, and that gives a little bit of feeling of hope, that we will be able to meet more internationally, because that's going to make it easier as well. So we have -- that's been more difficult during the COVID period. Actually, if we look this week, we have people leaving for Australia and Monday, which was the first day possible, and it hasn't been possible for a long time. And we also have a big team in place next week in Montreal, in Canada to start the work there. So I think it's a positive way to end, that we will be able to do more than we've been able to do the last 2 years. So with that, we will end the presentation part and open up for questions. So I hand back to the other Michael, to see if we have any questions from the session.

Thank you, Bodil. And with that, we ask Lauren to open up for questions from the conference call.

[Operator Instructions] Our first question comes from the line of Mats Liss from Kepler Cheuvreux.

Yes. A couple of questions. First, I was thinking about -- you mentioned the impact of guiding issues and so on, 2% to 2.5% on EBIT margin, I thought. But going forward, would you expect this to sort of ease off, and maybe also if you can include a commentary, if you have been able to increase prices, so it was more to balance the cost, so it was more related to the supply chain constraints, this 2% to 2.5%, please?

Sure. Bodil is going to take the pricing comment, Mats, and I will follow up with the supply chain.

I will start with the pricing side of things. Yes, we have been working with price increases. And I think you can see that also on our industrial margins, and that work that was ongoing for all of last year. We don't -- the way we operate, we then do one. It's different into the different businesses, and there will also be a variation into different national markets, because we also see different inflation rates, very different inflation rates in different places. So we look upon it from a local perspective. Yes, there has been a lot of work ongoing. There's also been work ongoing at the beginning of the year, and I think it's something we will live with and have to work with, because I don't think it's something that's going to go away in the short term. Does that answer your question on the pricing side? So I can't give you one single number, because there is no one single number. There is a lot of different numbers in the different. But all of the business is working very actively with it.

Yes. Maybe I can [indiscernible] -- I mean some of the delivery sales are delayed now and have you been able to sort of balance that in pricing, in the contracts? Are you affected in that sense also, that maybe the costs have increased during the lead time there, between order and delivery?

No, I wouldn't say so that that's impacting us. We've been working with where we see also, quite a big part is on transportation side. So we've been working with some special transportation parts as well. And if you -- I think it is the way of looking at it, is looking into our industrial margin, and you see that is better -- it's increased in 2021 compared to 2020. But what you'll see a little bit, of course, maybe some of the price increases, you will see them -- when you do -- when you work like that, you will see the effect of them coming a little bit later, from when the cost increase has started.

Right. Okay. On the supply chain, it continues to remain mixed. I think Bodil mentioned earlier on, Mats, the challenges with [ LED ] electronics. So many of the other components and materials have settled down a little bit, and we do begin to see some of the cost pressures on some of the other raw materials coming off the peak, like steel and aluminum, for example. LED electronics, service and delivery remains mixed across our 3 largest suppliers, from semiconductor availability through to COVID, in the factories. There's no one common factor for all 3 of our largest clients. It is mixed. We continue to service it as well as we possibly can, and I think actually, we're doing a pretty good job to service our customers and projects. Indications we have and -- one, they are indications. The indications we have are, Q2 and onwards into Q3, is when we can expect to see some improvement in this position. So we think we're in for -- continue working hard at the problem during Q1, and then as we enter through and move through the second quarter, we should, is the words that I'm hearing, we should begin to see some relief from some areas of the LED electronics side.

And what's right there. I mean the interpretation -- I heard you said the 2% to 2.5% impact on the EBIT margin?

Absolutely, the EBIT drop-through from the delayed sales would have had a 2% to 2.5% impact at that level.

Good. Then I had a question -- well, more like a bookkeeping or whatever you say, there will be some change in the U.K. tax -- well, taxes next year, corporate taxes, and will that affect your sort of tax level somewhat?

You probably calculated it already, Mats. You've probably done the sums looking at the Q4. Effective rate of tax was quite low for the Group, and that then brought down the tax rate for the full year 2021 to 24.5 percentage points. This was partly due to the U.K. situation, but also partly due to other areas around the Group of good efficient tax planning, that we've been doing progressively in the last 2 to 3 years. So we're pleased that 24.5% was the result for the full year. We're happy about the level of that, and anticipate going forward to be in line with what you might expect. It's going to depend upon the mix, of course, where we generate our profits. But I see no real reason why we should expect a significant change.

Okay. And then finally, I guess, we experienced some high energy prices there and you have an energy saving offer to the customer. Do you see any sort of pickup there in the changeover to -- I mean, I feel it's a pretty low level of LED lighting solution in Europe. At least you have sort of indicated it, it's about 1/3 or something like that. Do you see that changeover to pick up due to these high levels, the experience from time to time?

I think the combination of, I think people -- it might make the people speak more about the energy side of things, so it's becoming a high awareness [ service ]. But I think for us otherwise, it's the more long-term climate goals, which are the really important ones and the need for renovation in Europe in order to have energy-efficient buildings, but maybe that discussion is going to become more present. And I think it is already more present than it's been before about it. But then to translate that into numbers is more difficult. But we hear more about it than we used to do. So we have quite a few requests from people who want us to do better assets and higher extent and as quick as possible. And then from our side, we know that for us is what I said in the beginning, I mean, the focus on the connectivity side is extremely important, the knowledge of understanding that you can take down by using a connected solution, your energy, the footprint is going down with 73%. So the best thing people could do short time to get it down their energy bill is to make sure they have sensors in their bid, but also having sensors into them.

Okay. Thank you very much.

What we also see is that when you look into -- from the industrial side, for example, when all the big companies start to look into scope one, 2 and 3 for same day targets, one of the easiest things to do for a big industry is to change lighting to lead lighting. It's something that will pay off very quickly as an investment and there we see also more discussions that we've seen in the past, both from an industrial perspective but also from a renovation of normal buildings.

We currently have no further questions on the telephone line. You can now proceed with the webcast questions.

Good. So let's continue with questions from the webcast. I think we have answered a few already, but we have one more, the bookkeeping here with [indiscernible] positive figure on the line cash flow from investment activities, which is SEK 58.9 million, okay?

It is an easy explanation. And it does relate to the monies that we pay for the 30% acquisition of the Sistemalux minority share and it has been after consultation with PWC has been a reclassification in the 2 lines, cash flow from financing activities and cash flow from investing activities. So SEK 129 million has been taken from investing activities to making it a positive in the quarter and then put to cash flow from financing activities in that same quarter, making that SEK 290 million negative from the SEK 129 million reclassification from the line above. So nothing magical about it, just the reclassification from the line just on top of it.

Good. And then we have one last question more from a business perspective. Regarding the large iGuzzini acquisition, which was now done 3 years ago and how is it going compared to what you expected?

I've spent a lot of time in Italy during this last 3 years, even though less during the COVID period. And I would say that also, whether we look from a general people perspective, from a financial perspective, I think it's been a very successful, I wouldn't call it integration because it's not that they're very well integrated into the group today. I think there's also been a lot of activities and changes in iGuzzini. There has been a lot of transformation. So there is a new management team in place who is working very closely together and it's now been working through during the last 2 years. I think also one of the other parts is when I was there last time, they have a very high level of activity on the innovation, which is what we expected from them. So I think it's even more than the expectation, which is very good for us as well. So I would say, all-in-all, a lot of positives, a good team, a strong culture that fits well into the fallible group culture and a very proactive agenda for the future. So I'm very happy that we did the acquisition of iGuzzini. And also, as I said before, in the collection team, it's added on a global network for us, both from a geographical footprint, but also from the stakeholders in terms of many relationships and contact builds over years with a very well-known architects and lighting designers.

And I think we've got much to learn from each other. So the acquisition and bringing to the group of our Italian colleagues there'll be learnings for our Italian colleagues, but there will also be learnings for the people that exist in the group before the acquisition of iGuzzini. You would expect that to be so given it was such a large acquisition with its own practices and its own philosophy and its own go-to-market type of approach in that high-end segment. So now we are coming through COVID and we can get out and about a little bit more, we do expect those learnings to begin to accelerate.

And my Italian is getting much better.

And just one last question just came in here regarding organic growth. And you mentioned that you target to increase your marketing year 2022 outlook. You mentioned that you target to increase your market share. Can you be a bit more specific on this specific geographies or segments?

I think I mentioned with you when you look upon it, I think it's depending on the different segments. It is a combination of segments in national markets. So we saw, for example, we worked very well in retail in 2021 and we will see that continue. Then from a national market perspective, I was saying much more work to do in Germany. And also long-term, we see, as I've mentioned, North America is one market where we can do much more than we're doing today. And then it's in all the different business areas, there's opportunities in all of them. So it would be a pity to highlight any with you. Anything to add, Michael?

No. I think it's not a general comment that we make. It's that we don't do general sort of stuff. We are very specific in what we set about doing and there are a list of maybe 6 or 7 core key strategic projects for us where we do seek to increase our market share. So some of this growing what we've already got for some good reasons and then some are where we have a little bit of a white spot in terms of our activity level, but we've got super brands to take advantage of that. And now with the global footprint that we now have, we're putting processes together to capitalize on that. So behind the comment, there is a whole big list of activities within the businesses and the business areas that were set about working upon. Should get easier [indiscernible] getting easier with regard to COVID slowly ebbing away. Hopefully, the troubles that we experienced this morning are short term for that, but we don't know.

Great. Thank you. And with that, we're done with the questions. So just before we end, any last reflections from your side, Bodil.

Maybe repeat a little bit, but I think that's good as well. So I would say another good quarter. Last time we speak about recovery, but it was a recovery in 2021 and we entered the year with a very good order intake, record high order backlog and many financial indicators being green. We of course also has a very strong focus on doing utmost of dealing with the supply chain challenges. And I would say, in general, I look very much forward to 2022. So some hope in our spirits and what we see happening in the organization, many projects going in the right direction.

So thank you, everyone, for joining today's conference call and Q4 presentation. We hope to see you again at our Q1 presentation on April 26. So again, thank you for today.

Thank you.

Thank you, everyone.

This concludes today's call. Thank you for joining. You may now disconnect your lines.