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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, welcome to the publication of Full Year 2021 Conference Call and Live Webcast. I am Ira, the Chorus Call operator.
I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Edwin van der Geest, Investor Relations. Please go ahead.
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 found all the documents and the presentations on our website or the ones who are in the webcast to have it in front of you. We have with us Thomas Reist, CFO and Jens Fankhänel, 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 2021. If you look at the figures, then the bookings grew very strong. This has two main reasons, one is the catch-up effect of the investments of the 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 global supply chain.
Resulting backlog 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 very long visibility. The gross profit margin suffered mainly from inefficiencies in the production. Those who joined the Capital Markets Day, they heard us describe how difficult it is to produce machines currently because of non-availability of components, but this leads to these inefficiencies. But on the other hand, the gross profit margin was also affected by price increases from our suppliers.
The cost, so our OpEx have seen an underproportional 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 EBIT margin remained stable, this despite the ramp-up cost of the new activities, which we also communicated later on, and which amounts to roughly €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 overall ESG strategy, made a first step and became a member of UN Global Compact. If you look at the key figures there, I can make it very short. 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 mainly based on the advance payments from our customers. Year 2021 for all the other key figures ranks number two after the last pre-COVID year 2019.
If we look back three years, the net revenues, EBIT and also net profit is slightly below 2019. But the conclusion of this is that despite the challenges we have in global supply chain, 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, €186 million, coming to bookings level of €603 million, never seen figure 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 €370 million. And this €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 in absolute figures plus of €43 million. And the reason for this slower pace, as I mentioned before already, is the non-availability of components and in the first half of the year of raw materials. Gross profit went up by €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 1.2 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 impacts due to the travel restrictions, so if you want the positive effects of the COVID crisis, this led to a lower level of travel cost and also lower level of trade fair cost. Resulting EBIT amounts to €61.1 million being an up of 10.1% or €5.6 million and we see that EBIT margin is exactly on the same level as 2020. If we look at the second page of the income statement, there we had a positive impact on the financial result level. There we profited from positive impact from cash management of roughly €400,000.
The tax rate went up quite heavily if we compare to the previous year, but this is mainly based because 2020 we had extraordinary positive impact because of tax losses carried forwards. 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%. Result for the period amounted to €43.7 million, represents a margin level of 9.6%, slightly below previous year's level but comparably good. Based on the good result for the period, the board will propose an increased payout to the shareholders of CHF 4.30 per share. The proposal will be done at the Annual General Meeting, which will be held in April.
Now having a look at the balance sheet, there we have two main effects. One of this is the increased equity based on the result for the period and also the advance payments, which went on quite dramatically, advanced payments from our customers. This leads to an expanded 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 €20 million. What you also see here in the balance sheets that we did some reallocation of our cash position. This 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 €51.4 million. This is almost a bit more than double than the free cash flow we achieved the year before. And this is mainly due to the increased advance payments from our customers. This level went up year-by-year by €35 million, so we achieved to increase the cash level from our customers by €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 €38.6 million and the €41 million, this amounts to roughly €80 million operating performance in regards to cash flow. And if you compare this to the roughly €50 million of 2020, this is an up of €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. There we see that the bookings went up by one-third even compared with the pre-COVID area.
The order backlog went up by roughly 70% whereas we have in 2019 visibility of roughly bit more than six 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 €16 million and we are also are below at the pre-COVID level in regards to gross profit margin where we are 0.5% points behind 2019 levels. In the OpEx level, we see that we became more efficient where we spent in 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 impacts 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 had in 2019 special effect of our new activities, so the ramp-up costs of our new activities. This amounts to €3 million. And if I add up this €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 the 2019 level.
Now having a look at the financial talks, new financial targets, which have been published during the Capital Markets Day in November last year, there we see that we -overall we increased the targets. On the other hand, we reduced the bandwidth for [ph] the spend (00:12:54) for the two – for the EBIT margin and financial targets of the two divisions, Kardex Remstar and Kardex Mlog. Main reason to reduce this bandwidth is that even though we went through this COVID-19 crisis, we remained at the upper end of this range we communicated earlier. And that's the reason why we reduced this bandwidth.
We also introduced a bandwidth for the Kardex Group, and we replaced the return on capital employed by return on invested capital, mainly to improve the comparability with all the companies. On the other hand, the dividend policy, as well as the debt factor remains 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 two divisions. I will start with Kardex Remstar, then follow with Kardex Mlog, one slide about the new affiliates or the new kits 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 substantial increase in new business bookings, so new customers, new segments and new volumes, a total of €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 2019 and now we 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 of pricing, 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. We have 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 a order backlog of €238 million into 2021, a record high order backlog which, if we really get the materials should provide for 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 and 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 crews, and they, on short notice, could not enter the sites, the customer site and thus effectively had to go home without productive work and that led to a slightly reduced gross profit margin of 39.6% versus 40.8%. 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 is 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 at the total Kardex Remstar world which is a portray or reflection of the current talent market, which is actually pretty scarce, 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 probably 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 strategy to focus on target industry segments. I think we communicated this a number of times in 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. Wholesale, retail, e-commerce to mention one but also healthcare and hospitals as we already explained, special applications in these industry segments, which help improve our position in this industry segment and provide better solutions for our customers in these sectors.
Over to the next page, you see the key figures for Kardex Remstar from 2017 through to 2021. We see the net revenue level compared to previous year, but also to 2019, even behind 2019 numbers, with €365 million versus €392 million.
On EBIT, we are almost on – back to 2019 levels of €60.5 million versus €61.4 million. Net revenues mix, 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 too much, the tick 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, looking back at a very difficult year last year. If you remember we have the one-off effect that actually impacted our results. Kardex Mlog actually picked up quite a lot in terms of bookings, €124 million, that's the 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 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 €110 million, so this is not just for 2022, this is projects 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 €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, the 6.6% in the medium target range that Thomas explained before, 4% to 8%. So we are a little above the middle, substantial improvement over 2020, keeping in mind that 2020 had a one-off write-off. So we are – like-for-like, we are probably on the same levels.
Sales funnel, that's the good news in terms of looking into 2022, the sales funnel remains strong. The order intake start to the year is also pretty good. For Kardex Mlog, 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 [ph] didn't (00:23:04) mention it, they remain fairly stable and supportive of our development. Number of employees in Kardex Mlog also increased a bit by 6%. Also here the struggle with the same challenges, in the – especially in the German market to get the right talent onboard 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 protects with Mlog with the new technologies Rocket and AutoStore, which is [ph] new (00:23:45), so we managed to have Mlog as an indicator for either of these two new technologies that we presented in the Capital Markets Day as our new technology acquisitions.
Key figures, I already mentioned that revenues being above 2020 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 under 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 refurbishment and we decided that some of these projects are not really service projects, they are more like new business projects.
Therefore, they have been reallocated to the blue, the 70% and that's why it looks like we did shrink. In factual terms, we did not shrink, we did largely increase also our service business compared to 2020. And the geographical split almost the same, except that Europe has actually picked up, was 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 impact the distribution of revenues all over the world.
Next page, very short summary of our new activities. The new activities being AutoStore business, Robomotive and Rocket Solution. We did already mention in our statement today that we have about €30 million bookings with these three new companies or ventures achieved, of which €19.1 million are shown in our consolidated results. The AutoStore business is fully consolidated in the Kardex reporting. Robomotive is consolidated in our financials. Rocket Solution given that we had a minority share there is not at all consolidated in our numbers. And if we summarize our ramp-up costs, ramp-up costs 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 €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, now – I already mentioned in the beginning the most difficult slide for all of us. I think you're hearing the same story wherever you attend a video 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 it seems to be relatively little impact so far in January and 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, that's pretty logical. If we 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 dates, 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 three new activities from the previous page into stronger organizations, into more sustainable operations, increase bookings, but also improve results of these three 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, 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, Jens.
Thank you.
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?
We will now begin the question-and-answer session. [Operator Instructions] The first question is from Remo Rosenau from Helvetische Bank. Please go ahead.
Yeah, hi, thank you. Good afternoon. Could you give us any insight about the split of the growth in 2021 between price and volumes?
Hello, Remo, yes, that's a question for me. And the effect of our price increase is not very substantial. If you look at the sales maybe in the net revenues level, we see there an impact of around 1%, which is based on our price increases. If you look at the bookings levels 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. Was that 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 in other words?
Yeah. Well, the gross margin only declined by [ph] one hundred I think 30 (00:33:40) basis points.
Yeah.
Given the input price increases in general, I mean not only raw materials, there was 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. So...
No. No. We did not. Sorry, this was a misunderstanding.
Yeah.
Our pricing, we communicated this already. In 2021, we applied two price increases. One was in May, where we increased prices by 4% [indiscernible] (00:34:22). These 4% are only effective after a certain time lag. This time lag is around four to six months. So you can consider that this price increase has only hit – only had a positive impact during the second half of the 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, a bit on bookings and this is the reason why I said, 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. Well, that means that the price increases will have a stronger impact in 2022 than in 2021, 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 from supplier to supplier, but this is around 8%. This was the communication we already have from our suppliers. So there you see that in a market where prices increase from our suppliers, we always are behind with our price increase. So the effect will [indiscernible] (00:36:18) be negative until the prices will stabilize, and only then and after a certain time lag as I mentioned before, four to six months, then we will have – see a positive impact on the whole 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 and then you've got the volumes, right? So one element, pricing will be substantially higher just looking at sales not at margins and everything than in 2021. So you said you increased 4% at one stage. When was it again exactly? 4% and then 6% or even more? Could you just give...
May and December.
4% May, 6% December.
Okay. So...
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. [indiscernible]
(00:37:30)
...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 margin. [ph] This is also related (00:37:43).
Yes. So all in all, you 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 perfect summary of our discussion now.
Okay. [indiscernible]
(00:38:10) in 2021, Remo, we have the same in 2021 prices going up or the inflation going up quickly, and we are only able to react later on so the selling – so going up with prices in May means selling machines at that higher price as of September, October, but then still continuing prices of what you ever buy and that continues and it will only stop – it will only stabilize when this whole cycle is stabilized and then it takes four to six months to be able to see it.
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 this?
For these three 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 your organizational costs so we expect that they should not be at the same level like in 2021. So we don't expect another €3 million for these three companies. If we have another venture that would add up again, but so far there is none.
Okay.
That should have a...
So still some...
...like, positive impact on EBIT.
Okay. So still some impact but lower and that is on the net level. So...
Yeah.
...adding up what comes in and what you invest in there.
Yes.
Okay. Okay.
Yeah.
Okay. So I mean, the EBIT margins, it's anybody's guess, I mean, it's very difficult to say, but it could be under pressure by anything between 50 and 200 basis points.
Anybody's guess as you said.
But you wouldn't exclude also the higher number.
Remo, very clearly that's – it's a wrong answer, but it's not my biggest concern. If we get our supply chain back in operation and in operation, I mean, if this global supply chain and the shortages of material 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 days 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 this continues. 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 this supply chain issue continues to be an issue.
Okay. No. Very clear. Fair enough. Thank you very much.
Welcome.
The next question is from Stefanie Scholtysik from Mirabaud. Please go ahead.
Yes. Hello, everyone. 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 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 one is an easy answer because it's both of them. Stefanie, this is Jens.
Thanks. Hi.
It's really components and same with the experience in our European factories, the experience in the US for now. So, and I mean, this is partly – it 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 products, it's a standard design using the same components in these machines that leads to the same challenges and the procurement market in the US is almost the same like is in Europe 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 kidding, it's just something that seems to come up now new. So, it's also a challenge to get the people onboard. We are in the process to – and then, also loyalty of people. They come for couple of days and they're 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 had 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 what we do in the budget periods, we expect increased wages, salary levels, which we typically expect to be offset by productivity gains. So, that is our rule of thumb. Whatever the 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 competent 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 demands in terms of salary levels and salary expectations. Demands in Europe, mostly in our manufacturing is typically driven by the unions and I'm not sure they came up with, I'm not sure, did they come up with something like 4% to 5% demand?
US?
No, here in Europe, I think and that is normally negotiated down by the [ph] employer standard (00:46:18), but we will have to see. Not a straight answer I know, some of it could carry through if you 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 €7 million in 2021. I would have expected something like around €15 million. 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 2022?
Yeah, sure. Hi, Stefanie. This is Thomas.
Hey.
That's a question for me. It is a mix. On one hand you did not consider all the CapEx, so the total CapEx amounts to €10.1 million. But this is very much below our guidance. We guided €18 million with the half year result presentation. This is substantially lower. This is mainly based on availability of resources. So postponement of projects and non-availability of resources, so we wanted 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 lower delivery times. The machine delivery takes longer and this is a clear sign, so. It is simply postponed, so it's not decreased. So we will see higher CapEx in the upcoming years.
Okay, thanks a lot. So how much CapEx would you then expect in 2022?
Yeah, 2022 it's expected with high uncertainty in regards to the availability, we expect around €20 million for 2022.
Okay. Thanks a lot. [Operator Instructions]
The next question is from Sebastian Vogel from UBS. Please go ahead, sir.
Hello and good afternoon. 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 this 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 a talk here? And the last one and a 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. Just shuffling the questions around. Hi, Sebastian, this is Jens. Number one was the expectation on positive contribution of our new kits.
Yes.
To the bottom line, it's – let me think, it should be late as 2024 as simple as that.
Got it.
And now the second was price increases. We are, of course, discussing those and I think we will go with a price increase, I think we discussed 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.
Hi, Sebastian. This is Thomas. Third question is for me, inventory levels, yes, you have seen it correctly. [indiscernible] (00:50:52) inventory levels went down, but mainly due to the advance payments from our customers. The net working capital in total decreased year-on-year by €24 million, so last year we had a net working capital of €68 million, now this amounts to €44 million, so quite a substantial increase, not meaning that our inventory levels dramatically went down in 2021 compared to 2020. But as I've said before, the advance payments from our customers have reduced the inventory levels. 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 the 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 the level of sympathy to our price increases. It's relatively low because they suffer from same things. I would think that we travel between 4% and 6%. As I said, we are in discussion with our divisions of how much we can afford before we start losing contracts or projects due to the two heavy price increases.
Understood. Many thanks.
Welcome.
The next question is from [indiscernible] (00:52:45) from AWP. Please go ahead.
Thanks for taking my question. I want to know what influence does the current war have for Kardex? Do you expect to 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 version 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, we are in the evaluation, I mean we are 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.
If I can add here, we already assessed if we have a direct impact. We have seen that we have no major supplier either – nor in Ukraine nor in Russia.
Thanks a lot.
Thank you very much.
We have a follow-up question from Sebastian Vogel from UBS. Please go ahead.
Actually, there will be two 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's something on the positive or negative side related to particular regions, industries or customer groups that you could share with us? And 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'll take the easy first, Sebastian. This is Thomas. The second one, the FX impact on bookings level is €3.5 million, our net revenues is €2.5 million and on EBIT level is €500,000 negative impact. Thank you.
Thanks.
And that means he leaves the more difficult one to me. I think I understood that you wanted to know what the booking or the channel market sentiment is by region? [indiscernible]
(00:55:42) industries that are standing out and if it is on the retail or on the logistics side, any sort of stand out 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. It was 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.
Thanks. That was my question. Many thanks.
Yeah.
There are no more questions at this time.
Okay. Then thank you very much everybody for....