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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Hello, everyone, and welcome to the presentation of ASSA ABLOY's 2022 Year End Report. My name is Bjorn Tibell, I'm heading Investor Relations. And joining me here are ASSA ABLOY's CEO, Nico Delvaux; and our CFO, Erik Pieder. We will stick to the normal format today and start now with a summary of the report before we open up for your questions.
So with that, over to you, Nico.
Thank you, Bjorn, and also good morning from my side. We can report a very good Q4, a very good end to, I think, a very good 2022 for Assa Abloy. We had a strong organic growth of 9% in the quarter with all divisions contributing in a strong way, with the exception of APAC, wherein APAC, it's mainly Greater China where we continue to see challenging market conditions, COVID-19 related and, of course, construction market crisis in general related.
Also good complementary growth through acquisitions of 5% in the quarter. A strong EBIT margin of 15.7% and a strong EBIT improvement. Very active in the quarter when it comes to acquisitions with eight acquisitions signed in the quarter. And then a strong cash flow, almost double of a year ago at SEK6.6 billion.
So if we look in the numbers, top line close to SEK33 billion, 28% up, 9% organic, 5% acquisition and then also helped by currency in an important way. An EBIT margin of 15.7%, on the same level as the same quarter a year ago. And then an EBIT of almost SEK5.2 billion, 28% up. And our earnings per share 23% up. If you look a little bit into the different regions, a continued very strong North America with an organic growth of 19%, where we continue to see good market conditions on the commercial side, but I would say also on the residential side.
It's true that newbuild residential is down. But as you know, we are not so affected by newbuild residential in North America. It affects a little bit our garage door business in Entrance Systems. It also affects a little bit our OEM business in general and our window hardware business in particular. But we still see very strong momentum on the residential side aftermarket and like I said, on the commercial side. So I would say for North America, the market is perhaps not our biggest concern. It's perhaps more the high comparison with a year ago.
If I go to South America, minus 9%. If you look at our core businesses, our core markets there, it was only down very low-single digit and that was against a very difficult comparison a year ago. You know that in South America, we were growing very high double-digit now for many quarters, a couple of years in a row. So at a certain moment, it becomes difficult to further grow against that high comparison. Then of course, we have some challenges, political challenges in Brazil, in Peru, but the minus 9% was mainly because of a high comparison with a high -- or a big HID project in Brazil a year ago.
Europe, plus 3%. I think a good quarter in Europe. Perhaps market conditions are a bit less clear than in North America. We still see very good strong momentum on the commercial side. Also with our spec business still up double-digit, whereon the residential side, it's a little bit more fluctuating. Africa plus 5%. Oceania plus 3%, despite all the floods and all the challenges in Australia and New Zealand.
And then Asia, the only one -- or the other one negative, minus 5%. And like I mentioned, mainly because of a continued challenging situation in Greater China by COVID-19 was still very much around in Q4 where the construction market continues to be very depressed. We also had some challenges in the quarter in Southeast Asia, but that was mainly because of a very high comparison with a year ago in Southeast Asia.
Some market highlights for the people that were interested in the FIFA World Cup. Erik, I know that your country was not there, and we were back home very fast, the Belgians. But we provided all the paper tickets for the World Cup, more than 2 million paper tickets. It's now the third time in a row that we do that service. So definitely a very high profile type of a project. An important critical infrastructure win for our electromechanical CLIQ solutions for a European gas network. And then some energy saving solutions from Entrance Systems for a global multinational for its manufacturing plants in Mexico.
It's also good to see that our R&D effort continues to be rewarded in the market. Our Yale Unity Screen Door Lock won the Good Design Award in Australia. And then also this quarter, several new products around green sustainability, this ThermaGuard glass for our entrance system product, increasing energy efficiency in the doors. And then we further extended our Incedo Cloud offering where we now integrated also the battery less PULSE digital cylinders on that platform.
So now eight consecutive quarters with strong organic growth, and the last couple of quarters also complemented with very strong growth to acquisition. So you could say an acceleration of our top line. Our margin still below the band which we aim for in the quarter at 15.7%, for the year at 15.3%. So working hard to get it back within that 16% to 17% bandwidth.
So stable operating margin accelerated top line, therefore, also accelerated operating profit. Record profit in the quarter, for the first time above SEK5 billion. Very active quarter when it comes to acquisitions with eight acquisitions signed in the quarter. 21 acquisitions completed for the full year. That's also a record. And those 21 acquisitions represent an annualized sales of around SEK7 billion.
An update on HHI, we are still preparing for the court case, which will take place in April this year. And as part of mitigating the concerns DOJ has raised, we then also came to an agreement to conditionally sell our Emtek and Smart Residential business in the U.S. and Canada to Fortune Brands, of course, conditionally based on closing the HHI transaction.
Zooming in on two interesting acquisitions: D&D Technologies in Australia, a gate hardware manufacturer with sales of around SEK475 million; and then Janam, a leading provider of handheld mobile computers and readers. They used those readers also at the FIFA World Cup to control people entering a perimeter around the stadiums and making sure that people have the right ticket. They have a sales of around SEK200 million in 2021.
If I then zoom in into the different divisions, starting with EMEIA, an organic sales of 2% with very strong sales growth in Middle East, Africa and India, the more emerging part of EMEIA. Strong growth in Benelux, good sales in East Europe, U.K., DACH and Scandinavia, but then a sales decline in Finland, South Europe and France. An operating margin of 15% with a very strong operating leverage, dilution of FX because of the weak SEK and also a stronger dilution of M&A, mainly linked to acquisition costs, integration costs for two important acquisitions in EMEIA for Door Bird and Arran Isle.
We then go to Americas, another very strong quarter and, I would say, a very good excellent year for Americas. Organic sales in the quarter of 11% with all business areas, all regions contributing in a strong way, with the exception of a small sales decline in Latin America, like I mentioned earlier, and then sales decline in Electromechanical Solutions, mainly linked to some shortages on electronic chips and also a very high comparison with a year ago. An operating margin of 21.3%, very strong operating leverage 200 basis points, FX neutral. And also here, M&A, strongly dilutive, 90 basis points, that's related to acquisition costs for HHI, which amounted to SEK90 million in the quarter.
We then go to Asia-Pacific division, the more challenging division, with an organic sales decline of 10%. Good growth in South Korea, slight sales decline in Pacific and then a significant sales decline in Southeast Asia because of a difficult comparison with a year ago and also in China because of continued very difficult market conditions. We had a higher double-digit negative growth in Greater China.
And yeah, therefore, we don't have the necessary volume mainly in Greater China. We also posted an operating margin of minus 4.7% with a negative operating leverage, again, because lack of volume mainly in Greater China. And then FX, slightly positive; M&A, slightly negative, and that's linked to integration costs for bigger acquisitions with it in Australia, Caldwell and D&D Technologies.
We then go to the Global division, starting with Global Technologies, a very good quarter, strong end of the year, organic sales of 24% where I would say all business areas and as well HID and Global Solutions were contributing in a strong way with the exception of Extended Access, where we were also able to further reduce the backlog buildup on Physical Access Control because we get now the chips in for our redesigned products, and we are working away that backlog.
We also saw a good return of the travel related businesses and Hospitality in particular. An operating margin of 17.1%, that's a level where we want to be, what we aim for. Good volume leverage 140 basis points helped by FX 50 basis points, because of the stronger dollar, and then 50 basis points dilution also here mainly because of acquisition and integrated related costs.
And then last but not least, Entrance Systems. Also here, a strong end of a strong year with an organic sales of plus 10% with three of the four segments contributing in a strong way, Residential, Industrial and Pedestrian; and a sales decline in Perimeter Security against a very high comparison a year ago. Also very strong double-digit growth in service where we deliver on our ambition to grow the service business high-single digit. An operating margin at 16.5%. Good operating leverage 30 basis points, slight help of FX and an M&A dilutive 40 basis points.
And with that, I give the word to Erik for some more details on the financials.
Thank you, Nico. And also from my side, a very good Friday morning. As you all know, our target is to reach SEK150 billion by 2026 in sales. And if you look on the full year, I think that we have done good progress in order to reach that target. The full year ended at almost SEK121 billion. Yes, we are helped by currency, but you can also see that the organic as well as the acquisition growth was 14%. The 14% is similar to what we had in the quarter. It's a different mix where the organic piece was 9% and the acquired part was 5%.
And the operating income, as previously explained by Nico, was record high above the SEK5 billion and increased with 28%. Income before tax, you see that one is slightly lower with an increase of 25% and that is that we also experienced the higher interest rate cost that is now all over the world.
One of the highlights, operational cash flow almost doubled from an okay -- or rather weak Q4 last year, but still is the best cash flow that we have had in the quarter ever. And then I would say also another highlight is the return on capital employed, which almost reached 17% for the full year of 2022.
If we then dissect it a bit and look on the bridge. Price of the 9% is 5%, volume is 4%. We have a good operating leverage of 22.3%. If you take into account that we still have supply chain issues still, I mean, we are suffering from higher inflation as well as higher energy costs, but we have been able to mitigate that by operational efficiencies.
And like, for instance, the Manufacturing Footprint Program had a saving in the quarter of SEK200 million. We will now -- in Q1, we will launch the ninth program with a total restructuring cost of SEK1.2 billion and have an annual saving at the end of the program of SEK700 million. The payback period is about two years.
On the currency, we are helped a bit by the stronger dollar. So that's a 20 basis points improvement. And acquisitions, I think -- I mean there, you've heard Nico talk about acquisitions and integration costs for HHI, it's SEK90 million. But if we also would add the other ones, the dilutive impact would have been 30 basis points instead of the 80 basis points that you see here on the slide.
On the cost breakdown, it is we see that the direct material is improving with 40 basis points. The 40 basis points is mainly -- it's related to the mix where we have a stronger Global Technologies and a weaker APAC. But over the full quarter, the cost versus price or the material cost was actually flat.
On the conversion side, we were up with -- or let's say, we had a better performance of 70 basis points where, I mean, I talked before about the operational efficiencies and also the higher volumes have helped us there.
On the SG&A, slightly lower, 40 basis points there. Yes, we have higher inflation. We have continued to invest in R&D, but we have been able to offset this by efficiencies within our sales and admin cost.
As I said before, this is, once again, one of the highlights of the report, the operational cash flow, almost SEK6.6 billion, where we had, I mean, we had high EBIT and an EBITDA, but also we have also been able to manage our working capital with a reduction in receivables as well as in inventory. The cash conversion on the quarter was 138%. We have seen especially good performance within Entrance and Americas in the quarter.
The gearing and net debt to EBITDA is now at 1.4 versus 1.5 last year. The net debt to equity is also down from 39% to 37%. In the quarter, we increased the debt with roughly SEK1.1 billion. Yes, we have been quite active on the acquisition front as well as we have paid dividend.
If you look on the full year 2021 versus 2022, we're up with -- we have increased the debt with SEK4.6 billion. But out of that, SEK3.4 billion is related to currencies. And then, yes, we have also done 21 acquisitions during the year. But all in all -- yeah, you can flip the slides. It's no problem. Yeah, all-in-all, I think that we have a very solid balance sheet, and therefore, we are ready to absorb the HHI acquisition as well as continue our acquisition strategy.
Now you can flip the slide, Nico. Thank you. And earnings per share ended at SEK3.36 for the quarter and is up as, you've seen before on the slide, with 23%.
And with that, I hand back to the one who was actually with his team in Doha.
So as a conclusion, a strong quarter, strong end of a good year for us and an organic sales up 9%, complemented in a good way, strong way with growth toward acquisitions of 5%, a strong EBIT margin of 15.7% and an operating profit up 28%. Record cash flow, almost double compared to a year ago. So overall, financially good result. And it's clear that we live in an uncertain economic climate.
As you heard me talking before, we are still quite optimistic of what we see in the market. But as you know, we should be ready for whatever economic situation comes to us. We have our decentralized organization that has helped us in the past to be very agile, which will help us also now this time to be very agile, even when a possible downturn would come. But the agility will also help us to continue to profit from those markets where we see a strong momentum. And then last but not least, the Board proposes a dividend of SEK4.8 per share, split, like in recent years, in two equal payments.
And with that, I give the word back to Bjorn for Q&A.
Thank you very much, Nico. It's time to open up for Q&A now. I know that there are many in the queue, so please remember to restrict yourself to one question and a follow-up. Operator, this means that we are ready to kick-off the Q&A session. Please go ahead.
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Lars Brorson from Barclays. Please go ahead.
Thank you. Good morning. Nico, if I can maybe start with Europe and EMEIA that you're calling out commercial strong specs, up double-digit that's obviously encouraging. I wonder whether you can talk a bit about what you see in the European residential market. I noticed that you have seen strong growth in Benelux and good growth in the UK, organically at least. I presume that might also mean stable volumes, but those were two of the three markets you called out, I think, in the third quarter as a concern together with France.
So maybe you could talk about what you see there and the exit rate perhaps versus the 2% organic in Q4 overall for EMEIA. And specifically, if I can, sorry, just on the contingency plans that you initiated in the third quarter, have they indeed been executed or are they ongoing? Thank you.
Yeah, Lars. I can reconfirm that we continue to see good momentum on the commercial side. I would say no, no slowdown. Also translated in the level of our spec quotations, like I mentioned, still up double-digit. On the residential side, most probably we must make a distinction between newbuild and R&R, so aftermarket. On the aftermarket, also there, we still see good momentum, a little bit similar like in North America, but where definitely newbuild is more challenging. We see that a little bit in our OEM channel where we see things slowing down.
And of course, you always get, and also there, the double effect because if you want people start to destock and the market goes down, you have this double dip. When it comes specifically to the markets you asked, yes, Benelux, we have seen growth, but that was mainly against a very weak comparison a year ago. So I would say that Benelux, the situation is still similar, as I explained in Q3, like it is for France because we saw negative growth in France.
Then it's true that the channel to market can only destock so much. After a couple of months, that destocking is over because there's nothing left to destock. I think we are on that level now. So it will be now more in line with how the market evolves. And like I said earlier, it's very difficult or more difficult to read in Europe than in U.S. But also in Europe, perhaps we are a little bit more positive than what you read in the newspapers or what you hear on the news.
Thank you. Helpful color. My follow-up, if I can, briefly, just on Global Tech operating margins. I think I heard you say where we want to be. If I'm blunt, that sounds a bit unambitious to me. I mean you're calling out very strong operating leverage in the quarter. That's true, but that's obviously on a very depressed comparison from last year on low volumes and high components cost back then. Maybe you can help us a little bit with your thoughts on 2023 with Global Tech margins. There should be better operating leverage coming through mix, particularly as PACs recover, price cost tailwinds, decent volumes. I'm hoping we can do better than what we saw in the fourth quarter.
Yeah, I know that some of you were dreaming, hoping of EBIT margins closer to 20%. I think I've always said that, that is not the case, that, that is not realistic for Global Technologies. I've always said that Global Technologies should have margins above the 17%, in that 17%, 18% range. So we consider this as a good level then. Again, judge if it's ambitious or not. I think what is important for good margins in Global Technologies is that PACs is on a good level in the mix, which definitely is again the case today as they are working away their backlog.
And then what is also important is that our Hospitality business is on a good level. And although Hospitality is coming back and showing a good double-digit growth, they are still lower than the levels we experienced prior to 2019. So that definitely brings it down. And then the other aspect is that we see a very good strong growth on the other verticals in Global Solutions, but those verticals are still smaller. I would say there, we have to grow volume in order to make them margin accretive on the division level. So this margin is above 17%, in that 17%, perhaps 18% level that is something you should consider going forward.
Understood. Thank you, Nico.
The next question comes from Daniela Costa from Goldman Sachs. Please go ahead.
Hi. Good morning. Thank you for taking the question. I wanted to start out just with pricing trends and what have you done with pricing list in the beginning of the year and sort of what is the plan and the trend you're seeing in the market, given we have the offsetting moves, I guess, of raw materials and labor costs. And then just a follow-up from that, if you can talk through how big the potential tailwind from cost inflation coming down in things like raw materials. Is that enough to get you, ex the HHI deal, into the 16% to 17% margin range this year, do you think?
Yeah. So like we said in Q3, we were a little bit afraid with steel prices going down that, that would come more strong pressure on prices and eventually negative pricing for everything what is steel related. So it's good to see that steel is up again in the last six weeks or so. As a matter of fact, if you look at steel price today in the U.S., they are still 100% above the steel prices two years ago. And that's good because that means that we can keep prices for our steel related products on a solid level.
Apart from that, we have continued to increase prices in Q4 and now also in Q1 because we also see other materials going up. Again, if you take copper, nickel, zinc, you name it, they are also still 40% or so higher than two years ago. And next to material inflation, we have, of course, general inflation, energy inflation, logistics inflation and labor inflation, in particular, where we see -- where we have seen higher labor inflation last year, however, we see definitely higher labor inflation this year as well.
So we continue to increase prices, I would say, on an ongoing basis. That's also why in Q4, we were perhaps a little bit earlier than anticipated neutral cost versus price because for the Q4, we were on zero level, no accretion, no dilution. And so it's good to consider, I would say, a tailwind now going into Q1 this year. And that tailwind should continue under the condition that markets stay where they are, indexes stay where they are. So that should definitely help us also on the bottom line and our ambition to bring our bottom line as soon as possible back within that 16% to 17% bandwidth.
Thank you. The next question comes from Andre Kukhnin from Credit Suisse. Please go ahead.
Good morning. Thank you very much for taking my question. Could we talk about Asia Pac? And I wonder if you could quantify at all how much of that kind of drop-off in performance in Q4 was due to China specifically and that kind of J-curve effect of the lockdowns where I'm sure you had some impact from absenteeism as the country went through the kind of pandemic. If we could start with that, please?
Yeah. Perhaps if we start top line, we had high double-digit negative growth in Greater China. But you have seen in the deck also that the sales performance for the rest of the division top line wise was not so good. If you take Australia and New Zealand, we had, of course, continued problems with floods, disturbing a little bit the market. And then as we have illustrated also, window hardware business to OEMs, I also explained in the presentation that we have seen there a negative trend.
We also have Southeast Asia, which had a challenging quarter. And that translates, obviously, in the bottom line. I've always said that you should take it back two parts: you should take Greater China with, in the good old days, very low-single digit positive margins; and then the rest of APAC margins in line, you could say, with EMEIA. As we had lower volumes on the rest of the division, obviously that had a negative effect on the overall margin for the division.
But I would say the biggest contributor was definitely Greater China where we are, you could say, subcritical today and where we had a higher negative margin -- double-digit negative margin for the quarter. And we have chosen there not to further cut into the muscle because we see good opportunities to deliver on our strategy and grow that business again once the market condition turns. We are a little bit more positive now because COVID-19 is clearly also behind in Greater China. They have changed their policy in a very important way.
Construction market is still, in a way, depressed. But also there, there is some early positive signs. Too early to see strong improvement now in Q1 because Q1 is the Chinese New Year quarter. But definitely going into the second half of the year, we believe we should see improvement on the Greater China market conditions and, therefore, definitely also on our results. I think you should see the bottom line where we are today as really low for that division. We are confident that from now, we should see improvement.
That's helpful. Thank you. Yeah, I was just trying to get an idea of how much of that sort of one-off effect is in there, but I think we can work with what you said on the high double-digit negative margin in China. And a follow-up, if I may, just on the North America or Americas division, could you give us an idea of how your specified activity is trending in North America or across the division?
Yeah. Our spec business in North America was only low-single digit up. You know that it was higher-single digit up for many quarters. So it was also a very difficult comparison. But like I said earlier, I'm not so concerned with that as an indicator. I'm also not so concerned with ABI indexes now down for a couple of months. I think what it does, it perhaps reduced a little bit the backlog on projects we have. What I think is important is that those indexes in the coming months start to go up again and then activity can and will remain strong on the commercial side. Our biggest concern -- or our biggest challenge in the U.S. is definitely our very high comparison now in Q1 compared to Q1 a year ago.
Got it. Thank you very much.
The next question comes from Vivek Midha from Citigroup. Please go ahead.
Thanks very much, everyone. Good morning. I just want to follow up on Lars' question around the channel. So we talked about destocking in areas like Benelux in Q3. In terms of the bigger picture globally, are you concerned with where channel inventories are or do you see any signs of overstocking? Thank you.
Well, obviously, if a slowdown then happens, you will see that in the OEM channel, where the OEM customers will start to destock, postpone orders, and that comes on top of then the slowdown that they see in the market. So definitely, the OEM channel is something to watch out for. That's something we have seen a little bit in Q4, like I mentioned earlier, in the U.S., mainly for window hardware a bit for garage doors because they also sell that hardware or there's garage doors for newbuild. But like I explained on the R&R side, on the aftermarket side, we still see very good strong momentum.
Apart from that, I mean, we don't see it as a big concern. Everything depends, of course, if the market would turn and how fast that market would turn, but that we have seen in France, Benelux and the UK. But again, I think in France, Benelux, UK, we are through that destocking cycle now.
Thank you very much.
The next question comes from Gael de-Bray from Deutsche Bank. Please go ahead.
Thank you. Good morning, everyone. Can I start with China? Where are you exactly on the journey to move away from residential more into commercial and from newbuild more into renovation, from big projects more into smaller ones? I mean can you provide a bit more granularity on the mix in China today?
Of course, we are still very much exposed to residential. Our commercial part is still relatively small. And we are still too much exposed to newbuild. That's also why you see that higher double-digit negative growth on the top line. But if you look underlying, I think we see very good results on our underlying strategy. We see a move from newbuilds to more replacement retail on our Pan business where both are down, but where our retail business is definitely much less down than the market. So we see that shift. And we see definitely also a good momentum on the commercial side where we have positive growth despite the market being down.
Unfortunately, those positive signs are, in the bigger picture too small to compensate for what we lose on newbuild residential, one, because of the market; but two, also because of a conscious decision that with some of those customers, we have decided not to do business with anymore because at the end of the day, the aim of doing business is to get paid sooner or later. Also from what you saw, we believe that the risk is too high with some of those bigger contracts. And therefore, you have a double negative effect, I would say, on the top line, one, because of the market; and two, because of our conscious decision not to work with some of them.
Okay. Thank you for this. Can I switch to Entrance Systems? I mean it appears that the organic growth there decelerated pretty sharply this quarter from Q3 to Q4. So I wondered if this was only due to Perimeter Security declining or if you've started to see a sequential deceleration in some of the other segments as well. And then on Perimeter Security itself, does the drop in revenue come from volumes or prices or actually both?
I would say Entrance Systems has had very high growth for seven, eight quarters in a row now, so the comparison becomes more challenging. We have seen still good growth in Residential, in Industrial and in Pedestrian. We had indeed seen negative growth in Perimeter. That's not because of price. We were able to keep price. We were not obviously able to further increase price, but we were able to keep price. In Perimeter, it's two things: it's a comparison with very high double-digit growth a year ago; and two, some slowdown on the residential side because we also still make the more commodity type of fences on the residential side, and that is clearly down because that is also newbuild residential.
The other downward trend we have seen is on residential garage doors for newbuild, like I explained earlier. I think everything what is newbuild residential is it became more of a challenge. I think everything that is aftermarket residential is still good momentum in the U.S. And then in Europe, yes, it's also a more difficult comparison. I think we still see a good momentum, I would say, in line with what you see about in industrial manufacturing in Europe.
But you -- would you agree that, I mean with the kind of comps you're facing now going into Q1 '23 and with the exit rate that we can see right now in Q4, I mean Entrance Systems will likely start the year in negative territory when it comes to growth?
Yeah. We don't like the word negative. So I'm optimistic that also in Entrance Systems, we will continue to see a positive development. That's definitely our ambition. But it's definitely a good assumption that -- to assume that the percentages of growth will slow down in the first place because of the difficult comparison and, in the second place, also because some weaker market conditions, yes.
Okay. Thanks very much.
The next question comes from Mattias Holmberg from DNB. Please go ahead.
Thank you. Could you please quantify how much of the Global Tech sales in the quarter related to the pent-up backlog impact from the earlier chip issues? And also how much is left of this backlog, please?
Yeah. It's a bit difficult to estimate, but I think a rough number, SEK400 million of the backlog that we recovered. So I would say that we are two-thirds to three-fourth done in the backlog. So there's still some backlog available now most probably in Q1.
That's very clear. A second one, I'm going to try this, but it's still early days. So if you could give some color on what you're seeing so far into 2023, it would be very helpful.
I can say that, of course, January had one working day more. So we should take that in consideration. But January had -- if you compare with the year ago, January growth rates that were very similar to Q4 on group level.
Okay. Thank you.
The next question comes from Aurelio Calderon from Morgan Stanley. Please go ahead.
Hi. Good morning, Nico, Erik. Thanks for taking my question. The first one is around cash flow, and obviously, very impressive performance in the fourth quarter. I wonder if you can talk about what's been the main driver of that. I think you mentioned that Americas and Entrance were also very good in terms of cash flow, but it seems like every single division also performed very strongly.
So one is, what was the main driver of that cash performance? If you can break that down a little bit. And the second would be, do you think there's still some catch-up to do in terms of improving working capital terms? I'm just trying to think about the conversion going forward from here. That would be the first one. Thank you.
Yes. I mean, as I mentioned before, I think that we had a good EBIT performance, and that was then helped by good efficiencies done on receivables and also inventory, which sort of -- that made sort of that we had a very strong cash flow. I mentioned specifically, because they stand out, Entrance and Americas. But you're absolutely right, we can also see it in a number of the other divisions. I think that we have momentum on the working capital, especially when we talk about inventory also going forward. But of course, remember that we're also seasonal here, which means that we always have a stronger half year and especially then in Q4 during the year.
That's helpful. Thank you. And the second question is just picking up on some of the comments you were making on Global Solutions and the travel related segment. I think, Nico, you mentioned that that's still below prior levels. I wonder if you can give us a hint of how much we led or how further below you are relative to pre-COVID levels in that travel related business within Global Solutions.
Well, we don't comment individually the different business areas, but you could say that we still have some way to go on Hospitality to be back at pre-COVID-19 levels. Same is true for Citizen ID. Same is not true for marine business where we are back and above 2019 levels.
That’s helpful. Thank you.
The next question comes from James Moore from Redburn. Please go ahead.
Hello, everyone. [indiscernible] Thanks for taking the question. I have two. One is on momentum in China. I understand what's happening with the reopening, and there's a lot of absenteeism going on, and we're seeing it across many companies. Obviously, it's difficult to uncouple that from general market weakness. But have you noticed, in January, improving sequential daily rates of revenue with less absenteeism? That's the first question.
And the second one is a hypothetical question, really, which is if your steel index, which is double the pre-COVID, were to drop all the way back down, do you think you can hold on to prices or do you think you'd have to lower prices?
On China, the answer is no because everybody was on vacation in January. As you know, it was Chinese New Year. Then it's true that if you take some of our factories at a given moment in time, we had 70% of our people or more of our people at home because they had COVID or their relatives had COVID. But January is a holiday month, so it's too early to come to different conclusions for China.
When it comes to steel, I think it's a very hypothetical question. We are convinced steel will never go back to the levels of two years ago. But it's clear if steel would drop 100% of where we are today, that there will always be people in the market that see an opportunity to do better by reducing prices. So then the risk is definitely there that we would have to reduce prices for things like fences or garage doors or specialty doors.
But again, this is a hypothetical question. The fact that steel went up again, even 20% in the last six weeks or so, gives us again good buffer, a good argument to keep prices up. Also because, like I mentioned earlier, it's not only the steel inflation, we have strong labor inflation in general, definitely also in the U.S., and we have a strong general inflation still.
Thanks, Nico.
The next question comes from Alexander Virgo from Bank of America. Please go ahead.
Thank very much. Good morning, Nico.
Good morning, Erik (ph).
Just a couple of clarification ones, really. I wondered if you could just run through or clarify exactly how much pricing was in the quarter. Maybe I just completely missed, apologies if I have, but actual pricing contribution would be really helpful. And then I wondered, is the World Cup impact in Q4 in GT growth, is it -- how much of it was in the number of that very strong 24% growth you printed? Can you break that out for us? Thank you.
Sure. Erik showed it in one of his slides. So price was 5%, volume was 4% in the quarter. And like we said earlier, two divisions that are above the 5% is Entrance Systems and Americas, and the other ones are then, therefore, below because the 5% is the average. When it comes to the FIFA contract, I would say that it's a little bit spread in invoicing over a wider period. And it's, I would say, not significant in the result of Q4 for Global Technologies. Like I mentioned earlier, the main drivers are the PACs and definitely the working away part of the backlog and then Hospitality, which had a nice, strong double-digit growth in the quarter.
Thank you.
The next question comes from Andreas Koski from BNP Paribas. Please go ahead.
Thank you and good morning. I would also like to ask on pricing. I want to understand what the pricing impact could be in 2023. I think we will have a carryover effect from price increases that you have done in 2022 of around 1%. And you mentioned that you have increased prices in December and January.
Do you plan to raise prices further throughout 2023? And is it fair to assume that the incremental price increases will add another 1 percentage points to 2 percentage points to the carryover effect or is that far too conservative in this inflationary environment and pricing will be even higher than 2%, 3% for the full year?
So as we continue also to increase prices, like I mentioned, in Q4, we believe our carryover will be a little bit higher than the 1% you mentioned. It will be more around 2%, around that level. And then definitely, we have the ambition to further increase prices. I would say for everything that is not strong steel-related, we still we -- we'll be happy if we can keep the prices, like I mentioned in Q3.
But the rest, we have the ambition to further increase prices. So yes, our price effect this year should be higher than that 2% carryover. How much higher? Let's see. Let's see how much price we can realize and where indexes and inflation goes now in the first quarters of this year.
It’s very clear. Thank you.
[Operator Instructions] Gentlemen, so far, there are no more questions.
Well, thank you very much...
Sorry, sir, we have a last-second registration from Olof Larshammar from Danske Bank. Please go ahead.
Hi. Yes. I hope, you can hear me. I have one question regarding the bridge that you showed in terms of the -- I think you showed SEK1.3 billion in sales contribution from acquisition and roughly SEK30 million negative on EBIT from those acquisitions. And could you elaborate a bit on the HHI impact? And then also what one should expect in terms of profitability from the acquired companies that came in during this quarter?
Yeah. So like Erik mentioned or like I mentioned before, we booked SEK90 million acquisition related costs to -- for HHI. But we were very active, as you have seen, in the quarter. So we had a lot of other acquisition and integration related, you could call it one-time off costs. We had the D&D acquisition, we have Arran Isle. We had...
Door Bird, Caldwell.
Door Bird. I mean -- Caldwell. We had many acquisitions, some of them also a bit bigger. And normally, the big acquisitions have also a little bit higher acquisition integration-related costs. So if you dissect a little bit 80 basis point dilution we have in the acquisition column, you could say that around 50% -- 50 basis points, sorry, is related to this, you could say, one-off costs and HHI, and then around 30 basis points would be the dilution of the underlying business.
Yeah. Brilliant. Thank you very much.
Gentlemen, so far, there are no more questions.
Well, in that case, it's time to round up this conference, and we hope it has been helpful. If you have more questions, going forward, feel welcome to reach out to Carl or myself at Investor Relations. So we would, in that case, like to thank you for your interest and participation. And we look forward to speaking and seeing many of you in the coming weeks. Thank you.
Thank you.
Thank you.