Kardex Holding AG (KARN) Earnings Call Transcript & Summary

Yes. Hello, everybody. Good afternoon. Good morning in the United States. Good night in Asia. It's nice to have you all in the call today. We have, as usual, you might have find all the documents and the presentations on our website or the ones who are in the webcast, they have it in front of you. We have with us Thomas Reist, CFO; and Jens Fankhanel, CEO. So, let's start with our presentation. Please, Thomas, can I hand over to you?

Yes. Thank you. Hello to everyone. I would like, as always, start with highlights and key achievements of 2021. If you look at the figures then the bookings grew very strongly. This has 2 main reasons, one is the catch-up effect of the investments of COVID-19 crisis and also that we see recurring trends in automation in the intralogistics. On the other hand, net revenues, the growth pace was not as fast as on the booking level, mainly due to the shortages in the supply chain. Resulting backlog there is very strong currently. At the very end of the year, this has substantially increased compared to the beginning of the year and provides us for a very low visibility. The gross profit margin suffered mainly from inefficiencies in the production. Those who joined the Capital Markets, they heard, as described how difficult it is to produce machines currently because of non-availability of components. This leads to these inefficiencies, but on the other hand, the gross profit margin was also affected by price increases from our suppliers. The costs to our OpEx have seen an under-proportional increase and this despite the investments we do in our strategic projects, which we communicated quite a while ago already. The absolute EBIT increased by roughly 10% and the EBIT margin remained stable. And this despite the ramp-up cost of the new activities, which we also communicated later on and which amounts to roughly EUR 3 million in 2021. Also, during the Capital Markets Day, we announced already that we increased our financial targets. Later on in this presentation, I will also again give a wrap-up in regards to these financial targets. I'm happy to announce that we, as part of our ESG strategy, made the first step and became a member of UN Global Compact. If you look at the key figures, there, I can make it very short, and except to the free cash flow where we see that the free cash flow has more than doubled compared to the previous year and this is mainly based on the advance payments from our customers. Year 2021 for all the other key figures, ranks #2 after the last pre-COVID year 2019. if you look back 3 years to net revenues, EBIT and also net profit is slightly below 2019. So, the conclusion of this is that despite the challenges we have in global supply chain, the 2021 was a very successful financial year. If you look into more details and have a look at the income statement, there we see that the bookings went up by almost 45% or in other words, EUR 186 million. Coming to bookings level of EUR 603 million ever seen in figures at Kardex in the history. And there we achieved a book-to-bill ratio of 1.3. The order backlog also went up by 66.5% to almost EUR 370 million. And this EUR 370 million they stand for visibility of roughly 10 months. The net revenues, on the other hand, also grew double digits to 10.3%, but not at the same pace, as I mentioned before. There, we could achieve an absolute figures plus of EUR 43 million. And the reason for this slower pace, as I mentioned before already, is the non-availability of components in the first half of the year of raw materials. The gross profit went up by EUR 10.3 million or by roughly 7%. And there, we see the impact I mentioned before. So, the gross profit margin levels went slightly down by 1.3 percentage points. Also here due to inefficiencies in our production processes and due to price increases from our suppliers, which we could not immediately hand over to our customers. On the OpEx, on the other hand, the growth rate is only in brackets, 4.8%. There we still had positive impact due to the travel restrictions. So, if you want the positive effect of, call it, crisis, this led us to a lower level of travel cost and also lower level of trade fair cost. Resulting EBIT amounts to EUR 61.1 million being an up of 10.1% or EUR 5.6 million. And I see that the EBIT margin is exactly on the same level as 2020. If you look at the second page of the income statement, there we had a positive impact on the financial result level. There we profited from a positive impact from cash management of roughly [ EUR 400,000 ]. The tax rate went up quite heavily when compared to the previous year, but this is mainly based because 2020, we had extraordinarily positive impact because of tax losses carry forward. So, the current tax rate of 26.7% is exactly in the range of the tax rate we communicated earlier. The range amounts to 26.5% to 27.5%. Results for the period amounted to EUR 43.7 million, represents a margin level of 9.6%, slightly below previous year's level, comparably good. Based on the good results for the period, the Board of Directors re-proposed an increased payout to the shareholders of EUR 4.30 per share. The proposal will be done at the Annual General Meeting, which will be held in April. By having a look at the balance sheet, there we have 2 main effects. One of this is the increased equity based on the results for the period and also the advanced payments, which went up quite dramatically, advanced payment from our customers. This led to an extended balance sheet. This then, as a conclusion, led to a reduced equity ratio. Last year, we had an equity ratio of 62.9% and this year down to 57.4%. But on absolute basis, you see that we almost increased the equity level by EUR 20 million. What you also see here on the balance sheet that we did some reallocation of our cash position. This is mainly due to prevent negative interest rate effects. If you go further to the cash flow statements, there, again, we see the very good free cash flow of EUR 51.4 million. This is almost, well, a bit more than double than the free cash flow we achieved the year before. And this is mainly due to the increased advanced payments from our customers. This level went up year-by-year by EUR 35 million. So we achieved to increase the cash flow from our customers by EUR 35 million. If we look at the operating performance, so what I look at is the net cash flow from operating activities before changes in current fixed-term deposits. So, the sum of the EUR 38.6 million and EUR 41 million, this amounts to roughly EUR 80 million operating performance in regards to cash flow. And if you compare this to the roughly EUR 50 million of 2020, this is an up of EUR 30 million, which is quite a substantial increase. What I always like to do is compare the current performance with the pre-COVID years. So here, this is why I brought with me the income statement of 2021 compared with 2019 -- 2019, sorry. There we see that the bookings went up by 1/3, even compared with the pre-COVID area. The order backlog went up by roughly 70%, whereas we had in 2019 a visibility of roughly a bit more than 6 months, now, as I mentioned before, it went up to 10 months. But you also see that the net revenues level we have not achieved the level of pre-COVID. So we are down by roughly 3% or [ EUR 16 million ] and we also are below the pre-COVID level in regards to gross profit margin, where we are 0.5 percentage points behind 2019 levels. On the OpEx level, we see that we became more efficient where we spent 2019, 22.9% of our net revenues in OpEx. Now it went down to 22.4%, but we need to keep in mind that we still have positive impact due to the COVID crisis, as I mentioned before. EBIT level, also there, you see that we are roughly 4% behind 2019. But as I mentioned before, we also have in 2019, special effect of our new activities. So the ramp-up costs of our new activities, this amounts to EUR 3 million and if I add up the EUR 3 million to the 61.1% in 2021, then there is an easy calculation that we are above 2019. And also, the EBIT margin goes up to 14.1%, which is above 2019 level. I'm having a look at the financial targets, new financial targets which have been published during the Capital Market Day in November last year. There we see that we -- overall, we increased the targets. On the other hand, we reduced the bandwidth or the span for the EBIT margin financial targets of the 2 divisions, Kardex Remstar and Kardex Mlog. Main reason to reduce this bandwidth is that we -- even though we go -- we went through this COVID-19 crisis, we remained at our bandwidth of this range we communicated earlier, that's the reason why we reduced this bandwidth. We also introduced the bandwidth for the Kardex Group and we replaced the return on capital employed by return on invested capital mainly to improve the comparability before the companies. On the other hand, the dividend policy as well as the debt factor remained the same. With this, I would like to hand over to Jens.

Well, good evening, good afternoon, and good morning to go with the sun. This is Jens speaking. And as always, I will briefly explain the performance of the 2 divisions. I will start with Kardex Remstar, then follow with Kardex Mlog. One slide about the new affiliate or the new kids. And last not least, the outlook, which is probably the hardest slide today for all of us. Looking back into 2021, Kardex Remstar had quite a strong performance in bookings as we can see. And what I'm happy to say is that it's not only in LCS in Life Cycle Services, which is typically a stronghold for us, but it also has seen a substantial increase in new business bookings. So, new customers, new segments and new volumes. A total of EUR 460 million or an increase of 40.7% over 2020. Similar to what Thomas just said, we also compared that to 2019 levels, and the bookings are also substantially higher than in 2019. So both comparisons work out quite well. And this is mainly due to the new business bookings, which had been slightly lower in '19 and now we are picking up there as well. Net revenues, I think we keep repeating ourselves. They trail the bookings. We did not materialize our net revenues as we wanted it to be, mostly due to the already mentioned supply chain challenges, material availability and not so much surprising, but the availability of parts, components from all over the world and also due to sometimes -- and that was valid for the second part of the year, restrictions to customer sites, again due to the pandemic, omicron has played quite a substantial role here where we had to postpone or even cancel certain installations and move them into 2022. As a result, on one hand, good news because it increases the visibility. But on the other hand, not so good news because it means not enough net revenues in 2021. We take an order backlog of EUR 238 million into 2021, a record high order backlog, which if we really get the materials, should provide extremely good base for 2022 net revenues. Higher cost of material already mentioned by Thomas hit Kardex Remstar very hard, inefficiencies due to shortages of materials led to inefficiencies, not only in the factories, mostly in the factories where we had scheduled people, trucks, this material did not arrive, so we had to send people home. That's what we call inefficiencies on one hand, but the same applies to inefficiency in the field where we had scheduled service calls or installation force and they on short notice could not enter the site, the customer site and thus effectively had to go home without productive work. And that led to a slightly reduced gross profit margin of EUR 39.6 million versus EUR 40.8 million. EBIT margin still in the upper range of our communicated ranges with 16.6%. So, given the lower-than-expected net revenues, I think we managed the cost in the total organization quite well and managed to secure the bottom line to 16.6%. Number of employees increased to 1,628. What's worth mentioning here is that we are short of people that we actually need to do the work that we have in the organization by about 100 positions. If you look in the total Kardex Remstar world, which is a portray or a reflection of the current talent market, which is actually pretty sparse. So no matter where we look in the world, we have severe problems to actually get the required level of people of competency into our organization and I would say not because we are not attractive as Kardex, it's simply because people are partly not available. And last not least, I think the bookings and the success of new business, in particular, in Kardex Remstar was also a result and a positive result of our strategies to focus on target industry segments. I think we communicated this a number of times at the Capital Markets Day on previous presentations made to you guys that we wanted to focus on industry segments to become better specialists in certain industry segments and that started to pay off, also retail e-commerce to mention one, but also health care and hospitals as we already explained, special applications in these industry segments, which help improve on our position in these industry segments and provide better solutions for our customers in these segments. Over to the next page. You see the key figures for Kardex Remstar from '17 through to '21. We see the net revenue level compared to previous year, but also to 2019. We are even behind 2019 numbers with EUR 365 million versus EUR 392 million. On EBIT, we are almost on -- back to 2019 level of EUR 60.5 million versus EUR 61.4 million. Net revenues mix is not a mistake. It's really exactly the same split. We did verify this quite carefully. It's really the same net revenues mix as in 2020. And the geographical split has also not changed so much, 1% up in the North American market. We lost a little bit in Asia Pacific on the overall numbers and Europe being extremely stable from a development point of view. Over to Kardex Mlog. In the Kardex Mlog, looking back at a very difficult year last year, as you remember, with the one-off effects that actually impacted our results. Kardex Mlog actually picked up quite a lot in terms of bookings. EUR 124 million, that's a number I have not seen in my time with Kardex for Kardex Mlog, pretty strong in new business and also in terms of net revenues, Kardex Mlog increased a fair bit with 38% and also 22%. LCS bookings, net revenues and gross profit have also seen some slight improvement in Kardex Mlog. So the focus on Life Cycle Services pays off also there. Order backlog with these booking numbers substantially increased to EUR 110 million. So, this is not just for 2022. This is projected also stretching into 2023 to put this in perspective, longer running projects of integrated systems that typically have lead times or realization times of more than 12 months, just to put that in perspective. But the EUR 110 million is also a record high number. Gross profit margin improved by 1%, which is also a good achievement for Kardex Mlog. EBIT margin was 6.6% in the medium target ranges that Thomas explained before, 4% to 8%, so we are a little above the middle. The substantial improvement over 2020, keeping in mind that 2020 had a one-off write-off. So we are -- like-for-like, we're probably on the same levels. Sales funnel, that's the good news in terms of looking into 2022. Sales funnel remained strong. The order intake start to the year is also pretty good for Kardex Mlog. So, it seems that the market holds up, the market trends for automation and demand for Mlog Solutions and by the way, also for Remstar Solutions, I did mention it there remains fairly stable and supportive of our development. Number of employees in Kardex Mlog also increased a bit by 6%. Also here, we struggle with the same challenges in the -- especially in the German market to get the right talent on board and that will accompany us for the years to come and I'm sure the scarcity of available talent. What's also worth mentioning is that we won the first project with Mlog with the new technologies, Rocket and AutoStore, which is good news. So, we managed to have Mlog as an integrator for either of these 2 new technologies that we presented in the Capital Markets Day as our new technology acquisitions. Key figures, I already mentioned net revenues being above '20 and also 2019. EBIT and EBIT margin, not quite on EBIT margin level of 2019, but in absolute terms, higher than 2019. Net revenues mix what looks like a little drop here from 38% to 30% of Life Cycle Services is due to us reassigning some of the business that previously was reported on the Life Cycle Services now under new business. We have a business line there, which is called refurbishment. So existing installations of customers where we do modernization upgrades and refurbishments and we decided that some of these projects are not really service projects. They are more like new business projects. And therefore, they have been reallocated to [indiscernible], the 70% and that's why it looks like the shrink in actual terms, we did not trim, we did partially increase also our service business compared to 2020. The geographical split, almost the same, except that Europe has actually picked up with 83% over 80% in 2020. What we need to mention here is also there is one-off sometimes in parts of this world, which somehow impact the -- given the relatively low numbers, which impacts the distribution of revenues over the world. Next page, a very short summary of our new activities, the new activities being out of store business, Robomotive and Rocket solution. We as already mentioned in our statement today that we have about EUR 30 million bookings with these 3 new companies or ventures achieved of which EUR 19.1 million are shown in our consolidated results. The AutoStore business is fully consolidated in the Kardex reporting. Automotive is consolidated in our financials. Rocket solution, given that they have a minority share there, is not at all consolidated in our numbers. And if we summarize our ramp-up cost, ramp-up cost being mostly people that we build up organizational -- organizations that we build up like in AutoStore, the sales teams, realization teams where revenue is not fully covering all the total cost add up to about EUR 3 million in 2021. And if we eliminate that, you can also see that the total EBIT of Kardex without these extra costs would have exceeded the previous years by quite a bit. All right. I already mentioned in the beginning, the most difficult slide to all of us. I think you're hearing the same story wherever you attend a major conference these days. I think, so far, we see positive market conditions, which should, under normal circumstances, support a pretty positive bookings development. Start of the year was, as I said, pretty promising. So, there seems to be relatively little impact so far in January and in February from the external environment, even though the supply chain issues continue to be a major problem. Based on the strong backlog, we expect also both divisions to show increased net revenues in 2022 over 2021. It's pretty logical. If you look at the backlog numbers of both Remstar and Mlog they have to carry forward into increased net revenues unless something completely breaks apart. The only major concern, like probably all others have, except maybe for the political environment is supply chain shortages, which compared to Q4 and Q3 of 2021 actually increased in terms of shortages, problems and uncertainties from our main suppliers who sometimes don't even commit to delivery base, never mind delivery volumes. So that seems to be on the increasing side rather than the declining side. And that is -- if I would have to mention one main topic, that is the main concern for all of us in terms of reliability of expectations towards net revenues and results. Nevertheless, as we strongly believe in the future of the intralogistics market, we will continue with our key strategic elements for Kardex's portfolio extension. So, first step will be to develop these 3 new activities from the previous page into stronger organizations into a more sustainable operation, increase bookings, but also improved results of these 3 companies and then look further with our strategic activities, whether we can find similar add-ons to Kardex's portfolio that help us to serve the intralogistics market and our customers even better. By the same token, as we believe in the future of intralogistics and Kardex, we continue with our strategic investments in our supply chain, our, I would say, refurbishment of our supply chain in Remstar, the expansion of our supply chain in Remstar, we invest into technology. So new products for the Remstar portfolio and also into digitalization. And last not least, we see current challenges, but we believe that for the mid- to long term, Kardex is well positioned to benefit from the global intralogistics automation trends, increased demand for automation due to shortages of labor because what we suffer from is also what our customers suffer from, and they need automation to help their logistics parts. So, we believe the future is pretty bright despite the current challenges that we are suffering. And with that, I'd like to hand over or hand back to Edwin.

Yes. Thank you very much, Jan, and thank you very much, Thomas, for going through the figures and going through the business and give us an outlook. May I hand over now to the operator, please, to start the Q&A session.

The first question is from Remo Rosenau from Helvetische Bank.

Could you give us an insight about the split of the growth in 2021 between price and volumes?

Remo. Yes, that's a question for me. The effect of our price increase is not very substantial. If you look at the sales maybe in the net revenue level, we see there an impact of around 1%, which is based on our price increases. If you look at the bookings level there, the impact is a bit higher because we -- the growth rate is higher, and there we see an impact of around 2%. Does that answer your question?

Yes. And I mean, your gross margin only came down 1 point something percent. So, it's actually quite a low impact given that you increased prices only slightly. Most at all compensated by internal efficiency measures or could you go into that a bit?

Remo, I must admit, I did not understand your question. Can you say it other words?

Yes. Well, the gross margin only declined by [ 100, I think, 30 ] basis points. Given the input price increases in general, not only raw materials or the transportation cost and everything, it seems like a pretty low decline of the gross margin given that you only increased your prices in average by 1% in your sales.

No, no, we did not -- sorry, this was a misunderstanding. Our pricing -- we communicated this already. In 2021, we applied 2 price increases. One was in main where we increased prices by 4% [indiscernible]. These 4% are only effective after a certain time lag. This time lag is around 4 to 6 months. So you can consider that this price increase has only hit -- only had a positive impact during the second half of year. Then in December, we increased the prices again by roughly 6%, but this has no impact at all on the level of net revenues based on bookings. And this is [indiscernible]. If you look at the P&L currently 2021 and you look at the net revenues in 2021, then you can consider the increase of the net revenues compared to last year is impacted by 1% from our price increase. Same on bookings level, the increase there is impacted by roughly 2% from our price increase. This was my statement. Sorry. I misunderstood your initial question.

Okay. But that means that the price increase will have a stronger impact in '22 than in '21, right? Because of the timing...

Yes, they will. But at the same time, our suppliers have increased prices already again. So we are confronted with quite substantial price increase from our suppliers now in the beginning of the year 2022 already. This, as a first indication, I mean this depends on supplier to supplier, but this is around 8%. This was the communication we already had from our suppliers. So there -- you see that in a market where price has increased from our suppliers, we always are behind with our price increase. So, the effect has been negative, until the prices will stabilize and only then and after a certain time lag, as I mentioned before 4 to 6 months, then we will have to see a positive impact on our P&L.

That's perfectly clear. But, first, you try to estimate how sales could develop and there, the price effect is one of the elements in the [ strong ] volumes. So what element pricing will be substantially higher? Just looking at sales, not at margins and everything [indiscernible]. So you said you increased 4% at one stage. When was it again exactly, 4%, and then 6% or even more? Could you just repeat that number?

4% May, 6% December.

Okay.

Looking forward, as mentioned 1% for sales and 2% for bookings, they will go up. That's clear. On the other hand, the impact on the gross profit level will also go up. Either volume driver will remain, and there will be a volume driver in regards to our price increases, but we will also have the negative impact on the gross profit also.

Yes. So all in all, we will have some stronger price impact. You will have still -- I mean, you expect higher volumes, right, to some extent, if things remain more or less normal. However, the margin will be somewhat under pressure, the EBIT margin at the end of the day.

That's a perfect summary of our discussion now.

You are seeing in 2021, Remo. We have the same in '21, prices going up or the inflation going up quickly, and we are only able to react later on. So the selling is going up with prices in mainly selling machines at that higher price as of September, October, but then still continuing prices of what we ever buy and that continues and we'll only stock. It will only stabilize when this whole cycle is stabilizing and [ then it effects ] [indiscernible].

Okay. And now about the ramp-up costs. Will they reoccur, get higher or be offset by the revenues and the contributions of these businesses? Or what should we think about that?

For these 3 new ventures, we plan to reduce them in the current year because we expect that increasing revenues -- I mean, we reported on bookings for 2021. These bookings should turn into revenues, and that will offset the organizational costs. So, we expect that they should not be at the same level like in 2021. So, we don't expect another EUR 3 million for these 3 companies. If we have another venture, that would add up again, but so far, there is none.

Okay.

Positive impact on EBIT.

Okay. So still some impact but lower and that is on a net level. So adding up, what comes in and what you invest in that? Okay. Okay. So I mean, the EBIT margin, it's anybody's guess, I mean, it's very difficult to say, but it could be under pressure by anything between 50 basis points and 200 basis points.

Anybody's guess, as you said.

But you wouldn't exclude also the higher number?

Very clearly, that's -- it's the wrong answer, but it's not my biggest concern. If we get our supply chain back in operation and in operation, I mean, the global supply chain and the shortages of materials will not be an issue anymore, then we will not talk about EBIT margins if we continue to see the problems. And we have suppliers like Siemens who do not commit to delivery date before 60 weeks. I mean, we just need to think about it. It is more than a year, and we don't get any commitment. That is, for us, the operational day-to-day challenge. I've never seen my purchasing so busy like the last year and has continued. And what effect that will have in terms of stoppages of production, maybe inefficiencies in our supply chain, that's very hard to assess because it's really much dependent on how long the supply chain issue continues to be an issue.

Okay. No, very clear. Fair enough.

The next question is from Stefanie Scholtysik from Mirabaud.

I mean, you stated in your press release that you have underutilization of your production run in the US. And if I understood it rightly like everywhere, and that underutilization, is this mainly because of labor shortages? Or is it because you don't have the components you need for production? Or is it both? And then also maybe what do you expect in terms of wage inflation going forward? I mean that sounds like a real big issue for you. So what can we assume in terms of wage increases on the bottom line?

First thing is an easier answer because it's both of them, Stefanie. This is Jen. It's really a component and same what we experienced in our European factories, the experience in the US for now. And I mean, this is partly -- this is all the components. It's raw material like steel, but it's also electronic components. It's no surprise, it's the same design of our product. It's a standard design using the same components in these machines leads to the same challenges. And the procurement market in the US is almost the same like it is in Europe for -- at least in our experience. And labor shortages is also something. This is very funny -- not funny, but it is really a challenge. People opt out from hard work in the US these days. I spoke to one of my colleagues in the US, and he said, people now rather go work with McDonald's because they pay excessive hourly rates. I'm not saying something that seems to come up now new. So it's also a challenge to get the people on board. We are in the process to -- and then also loyalty of people. They come for a couple of days and they are gone again. So we go -- I think we go through all the learnings that other companies have made there as well. But I think we're now reaching a point where we at least see a stable organization going forward. And now it's about getting the parts in and ramping the production up. And we also have some challenges, to be fair, with our ERP system there. So, that is also an element, our S/4HANA, which contributes a bit, but that's not the major blockage. It's really the availability of parts and getting the operation up and running. Second was wage increases. That's an interesting topic. We have our averages that we assume for the year, which typically is also -- what we do in the budget period, we expect increased wages, salary levels, which we typically expect to be offset by productivity gains. So, that is our rule of thumb. Whatever we increase in terms of salaries, we typically offset with revenue increases and/or efficiency increases. That's our typical target in the organization, so straight. It should not have a direct bottom line impact. However, in this scarce market, it may be that we are confronted with higher than normal salary requests by certain talent, and that's where we need to be careful in terms of who we opt for, whether we need the competence and we probably have to pay a little more than in the years before. That's currently the situation. And it varies interesting enough, it varies by region. The demand in the US is substantially higher, so the demand in terms of salary levels and salary expectations. Demand in Europe, mostly in our manufacturing is typically driven by the unions. And the -- I'm not sure they came up with -- I'm not sure, did they come up with something like 4% to 5% demand? In Europe, I think. And that is normally negotiated down by the employers card, but we will have to see. Not a straight answer, I know. Some of it could carry through if we are not able to compensate for by higher sales margins and/or higher efficiencies.

Then I have another one, and then I'll go back in line. I was a bit surprised looking at your CapEx number. So, you actually only spent EUR 7 million in 2021. I would have expected something like around 15%. Was that just a miscalculation by me? Or did I miss something? Or did you put something on hold? Or this is going to be catched up later or in this year, or in 2022 or going forward? Maybe can you give us some indication on CapEx in '22?

Yes. Sure, Stefanie. This is Thomas. That's a question for me. It is a mix. On one hand, you did not consider all the CapEx. So the total capital amounts EUR 10.1 billion. But this is very much below our guidance. We guided EUR 18 million during the half year result presentation. And this is substantially lower. This is mainly based on the availability of resources, so postponement of projects and non-availability of resources. So, we want it to go forward with certain projects, but did not achieve to get the resources. So the construction company did not show up or did have long delivery times. The machine delivery takes longer and this is a [ crisis ]. It is simply postponed. So it's not used. So, you will see higher CapEx in the upcoming years.

Okay. Excellent. So how much CapEx would you then expect in 2022?

Yes. 2022, it's expected with high uncertainty in regards to the availability. We expect around EUR 20 million for 2022.

The next question is from Sebastian Vogel from UBS.

I wanted to come back to the new ventures that you have outlined in the slide deck before. By when do you expect to see a positive EBIT contribution from these ventures on your P&L? That would be my first question. The second question is on price increases. What are your plans there for 2022? Do you have something or you already planned? Or will you react [ and talk here ]? And the last one and our third one would be on inventory levels. It seems to be rather low for year-end. I was wondering what is there behind? And in general, how do you see net working capital for 2022?

Okay. We're just shuffling the questions around. Sebastian, this is Jens. Number one was the expectation on positive contribution of our new kits. At the bottom line, it's -- let me think. It should be latest 2024, as simple as that.

Got it.

Now the second was price increases. We, of course, are discussing those. And I think we will go with a price increase. I think we discuss something like next month to -- or April. April is the next targeted price increase that we are currently discussing to follow suit with the cost increases on the purchasing side.

Sebastian, this is Thomas. Third question is for me. Inventory levels, yes, you have seen it correctly. Balance sheet, inventory levels went down, but it's mainly due to the advance payments from our customers. The net working capital in total decreased year-on-year by EUR 24 million. So last year, we had a net working capital of EUR 68 million. Now, this amounts to EUR 44 million. So quite a substantial increase, not really that our inventory levels dramatically went down in '21 compared to 2020. But as I said before, the advance payments from our customers have reduced inventories. So the expectation going forward, this will go up clearly because we received the cash, and we are working on the projects and then we are going to deliver. And whenever we have delivered, then the inventory levels will be neutralized again. So, you can consider that the net working capital will go up in future.

Understood. And just one quick follow-up with regard to the price increases. When you said it will follow suit to the price increases from your supplier, I guess, you were alluding to this 8% you mentioned earlier in the call, right?

Unfortunately not, because there is a limit to what our customers expect. Their level of sympathy to our price increases is relatively low because they suffer from same thing. I would think that we travel between 4% and 6%. As I said, we are in discussion. We are in discussion with our divisions of how much we can afford before we start losing contracts or projects due to the 2 heavy price increases.

The next question is from [ Melina Cailin ] from [ AWP ].

I want to know what influence does the current war have for Kardex? Do you expect a further deterioration of the supply chain because of the war?

First of all, the direct impact to our top line would be relatively low or very low, to be specific. Of course, we currently don't sell anything in the Ukraine and almost nothing in Russia. The other question is a good one. We are assessing right now the impact on supply chains, reason being that some of the suppliers went on rail instead of ship and/or plane. And that could have a shorter-term impact until they eventually go back to ship or to planes for delivery of parts. But for now, that's -- we are in the evaluation. I mean, we are a week into the situation, and we are assessing with our procurement guys what impact, if any, we will encounter in the next weeks before we can react to it and reschedule things in terms of bringing it into Europe.

It's [ Thomas ] here. We already assessed if we have a direct impact. We have seen that we have no major suppliers, either -- nor in Ukraine, nor in Russia.

We have a follow-up question from Sebastian Vogel from UBS.

Actually, there would be 2 follow-up questions, if I may. And the first one would be, how do you see demand currently in terms of more specific, if there is something on the positive or negative side related to particular regions, industries or customer groups that you could share with us? And the last one would be a little bit more of a housekeeping exercise. Can you remind me of the FX impact on the Remstar sales that you have seen in 2021, please?

I take the easy one first, Sebastian. This is Thomas. The second one, the FX impact on bookings level is EUR 3.5 million. On net revenues, it's EUR 2.5 million and on EBIT level, it's EUR 500,000 negative impact.

And that means you leave the more difficult one to me. I think I understood that you wanted to know what the bookings or the general market sentiment is by region.

If there's some industries that are standing out, if there's some retail or on the logistics side, any sort of standout on a positive or negative compared to what you expected so far?

No, that is an easy answer, no. We see the same mix in segments so far. So it's not -- I mean I already said that we had an enjoyable increase in wholesale, retail, e-commerce in 2021, specifically for Remstar. And we see this continue. But you also see other industry segments remain strong for now. And therefore, we don't see a shift. We don't see a shift in this.

There are no more questions at this time.

Okay. Then thank you very much, everybody, for....

I'm sorry to interrupt you, sir. We have a follow-up question from Stefanie Scholtysik from Mirabaud.

Okay, Stefanie. Go on.

I'm sorry for coming up with 2 other questions, in fact. I mean, perhaps could you please maybe elaborate a bit on AutoStore? I mean, AutoStore, yes, they reported great order intake. So how much can you profit from it? Or how much can you book on that for yourself? And can you give a bit, an outlook on AutoStore? And then a second one would be on your Asian strategy. At your last Capital Markets Day, you stated that you were not so pleased with the Asian business. What are you seeing currently? And maybe if you could give us some flavor on this.

The second is -- I think I mentioned on the Capital Markets Day that we are in the process of revising our Asia Pacific strategy. We are in the process there. We have our midyear Board Meeting, where we will discuss of how we want to continue our business in Asia. So that is maybe our target for further discussions and decisions to be taken. Given that we haven't done much, there is no much change to the business itself, I mean. And we also see that the market itself is stable, but not booming with the numbers from China, with the GDP in China, with all these. With all these things, we think the market environment has not much changed. What we need to change is our go-to-market strategy, working on it, to be decided midyear. The first one, I'm not sure I understood. You referred to a booming order intake of AutoStore in general, did I understand that correctly?

AutoStore in general. And then maybe also, when I looked at the AutoStore results, it looks like they're going to increase their partners they're working with. I mean, how is this affecting you? And what's your outlook in terms of future revenues or orders and revenues with AutoStore solutions?

Number one, AutoStore should thank all of us as partners that their revenues go up because they don't have direct business. So everything they achieve, they achieve with us being partners. They have very substantial growth plans that they sold their business plan to the new investors, SoftBank. So, they have to meet these targets. And it's very clear that they add one or the other partner, integrate a partner for their technology on the globe. When it comes to us, we made a business plan for our own development of this business unit. And that I don't think is in any form affected by AutoStore adding partners because we focus on certain regions, we focus on certain industry segments and certain existing clients from Kardex, which was one of the things we could bring to the table as a potential integration partner to AutoStore. So, so far for now, I don't think our plans to grow our own business based on AutoStore technology is not effective. Do I want to disclose how much? No, I don't want to, like always. Just to maybe answer the follow-up question -- on the follow-up question is the most prominent one.

But you have seen, Stefanie, that we've actually started quite well, if you look at the order intake, which is mainly AutoStore and what we published.

So if this was the last question, I would like to thank, everybody, for joining us for the earnings call. I'd like to thank Jens and Thomas [indiscernible]. So it's not so easy to a discussion that was more focused on the future than on the past. But I hope that we have our next discussion together with you and again, with a good past and maybe a better and clearer outlook on the future. By then, I wish you a very nice afternoon and stay safe. Thank you very much. Bye-bye.

Thank you.

Thank you. Bye-bye.