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Good afternoon, everybody, and welcome to Detection Technology Fourth Quarter 2021 Financial Statements review. My name is Hannu Martola, and I'm the President and CEO of Detection Technology and pleased to inform you of the -- how we performed during the fourth quarter. So fourth quarter, in general, so we had nice growth, 24% growth and reached the sales of roughly EUR 25 million, quite much more than last year, but actually a little bit less what we expected. And as we announced, we had some postponements because of the component shortages and so on. Roughly about EUR 3 million of sales were postponed to the further quarters because of not being able to get enough semiconductors' active components mostly. We made operating profit or EBIT, EUR 3 million. That's up about EUR 700,000 from last fourth quarter and reached an operating profitability of 12%. One factor here when we are looking at the comparable numbers is that actually last year, we had fairly recognizable subsidies because of corona that -- where we got during the fourth quarter, and they were estimated like EUR 400,000 last year. So a clear improvement, but actually the sales, some extraordinary costs affected that we did not yet reach the 15% target level of the EBIT. If we look then that -- what happened in our various businesses, I think excellent thing is that all business units grew strong, so the percentages were starting from -- with the 2. So industrial was 22%; medical, 24%; and security, even 27% to the comparable quarter. So as a company, we are back alive from corona and looking excited than the -- what goes on and what can we reach during '22. In the Industrial segment, actually, the demand was quite unchanged. Industrial sales was specifically -- it was hit because of the component shortages, so we have had for fairly long lead times to our customers, and that is then hurting the sales. Overall, I think we strengthened our position in the strategy execution of beyond hardware. Medical sales, the strong boost in computed tomography in the global health care space continued. So we enjoyed a nice, nice growth there. Some deliveries also in medical business were postponed due to the shortages. And overall, I think the -- our market position in the health care computed tomography segment actually remained unchanged. Then security sales, I mean security is getting back on track. So this business actually -- we dropped to 50% what we had due to the corona, so now it's starting to grow. And demand for fourth quarter still was very much driven by the non-aviation application, but also aviation took a positive turn. Security, so far, has been less impacted by these component shortages. But unfortunately also, in '22, that will a little bit change, and we foresee some challenges there. Out of the, let's say, new opportunities in the security's -- this Green Channel that we talked about, this is relating to that in China, they are planning to build an infrastructure of scanning stations that are scanning trucks, carrying all kinds of food and so on, and these then are exempted from the highway tariffs. And this is something that, for some years, will bring some new business opportunity for us. So the profitability improved year-on-year. It was a little bit below the third quarter level due to some fixed cost one-timers and increases that affected a little bit for the fourth quarter. On the risk side, I think the -- we all know what's going on in the geopolitics. That remains the same, but actually this semiconductor shortage intensified during the fourth quarter, and that's something that we must note as a risk. On sales by quarter, here, you see that we -- practically, we reached the same level that we had in fourth quarter 2019. 2019 was the best year in DT's history, and if we think that the mix now is more medical-heavy, thanks to the medical growing so fast, so that when we get back to security and industrial back on track, so then we really should be able to provide some nice growth in the coming quarters.The profitability, it was still under the target level of 15%. So we made 12% and that is for the full year. It's below the said 15% threshold, and we believe that then during this year for the full year, we should be getting back on the sort of roughly on the targeted level.On the sales split, the MBU is fairly sort of heavy here, 55% still out of the full fourth quarter sales, reaching EUR 40 million roughly. Security's a bit less than 1/3, should be getting higher in the future. And now I think IBU is already 14%. So that's very good news that we have. We are starting to get a new strong third leg into our business portfolio. The annual growth, as mentioned earlier, where all business units were -- performed excellent on -- above our 10% target. On sales by region. Here, we see that it's fairly strong in APAC. So even 33% in Asia Pacific, Europe, Middle East were still negative growth affected by corona. And then Americas, okay, it's a smaller sales. The percentage is fairly, fairly big, but also Americas grew sort of nicely and we should be getting back on track there. On the full year, we were roughly EUR 90 million. It is, let's say, a slight disappointment for us, I must state. I mean, due to these component shortages, we were looking at stronger performance at the beginning of the year. Still, I think, to these conditions and especially the growth that we have sort of been able still to execute and achieve, we should be fairly, fairly happy for last year, even though the sales was not what was expected. So double-digit growth of 10% and EBIT of roughly 12% for the full year. And for the full year then, sales split by businesses. Medical, a bit over 50%, growing 25%, so that's a nice annual growth. IBU, 10% growth, the same as the full company. And SBU, due to the fairly weak first half, we were still negative, and that's something that will be fixed this year. On sales split, APAC also for the full year is strong, about a bit over 70%. SBU, a bit less than 1/5 and IBU -- sorry, Asia, about a bit above 70%; Europe, a bit less than 20% and then Americas, a bit less than 10% for the full year. And Americas and Europe, clearly, we can see the, let's say, corona effect here, so that both are declined for the full year and hopefully then, things get back to normal during this year. On a little bit the -- more precisely, of the financials, I think a couple of things that could be noted here, so that R&D costs were roughly 12%. R&D costs were a little bit higher for fourth quarter affecting the profitability. Cash flow from operating activities for fourth quarter, it was positive; also full year, EUR 7 million. This could have been better. We have increased a little bit our net working capital. Actually due to this component shortage and the situation, so that has included and tied in capital, which I think, in a way, is even a bit positive in this if we think what's going on in the world today. So as I use the sort of a word that we are a little bit fat in here and probably remain a bit fat until we get more normal in this supply chain topics. Investments were fairly low. I mean, compared to our normal running rate, we were at EUR 1.3 million for the full year or EUR 1.4 million and about EUR 700,000 for the fourth quarter. So we -- basically, we did sort of the necessary maintenance investments. We did not increase the capacity. We look forward that we will then do some capacity increase in investments during this year. And also the investment side, we get back on the level that is sustainable and supporting the growth. Earnings per share, that increased from last year to EUR 0.64. Last year, it was EUR 0.47. And the return on investment, I mean, it's -- we have a fairly heavy balance sheet on the asset side, so that is affecting on the ROI, so it's a bit lower than historically. Our strategy highlights, I would want to point out 2 product families. There is the DT standard computed tomography products for medical health care space. We have both the 16-slice X-ACE 16 and 32-slice X-ACE 32 that we launched during last year. Also for this -- an addition to our CMOS product portfolio, we launched an X-Panel-2222, which is a new product for the mini C-arms and surgical applications in medical space. Also due to various -- I mean, also challenges relating to getting top talent for firmware software in Beijing in this Megapol area so we decided to establish a new talent hub, which is managed by -- I mean, by Beijing R&D, and we established it and have even the first employee recruiting has started already working there so that we should be able to also have our network, and let's open to the talent in this Jiangsu province, Nanjing area. Nanjing has played a very important role in the history of China, and it's quite conveniently between Shanghai and Beijing, also easy to access through high-speed train. On this, then what we expect from this year. So this is the sales expectation for various business units. So in Industrial, we expect a strong double-digit growth. We call it boosted double-digit growth. On Medical, Medical grew quite much. I mean, 25% last year, so we expect the nice demand to continue, but the growth would be single-digit level, and then security boosted double-digit growth for the first half. So all these -- I mean, Industrial, Security businesses should be growing on double -- strong double digits for first and second quarters, '22 and then medical single digit for first quarter and second quarter in '22. There are some risks related to here relating to component shortages and so on, but also we have taken into account some buffer that in these numbers. What it then means for the full company, so what we are now guiding as official guidance and business outlook, as we call it, we are expecting the DT Group to grow double digit, both first and second quarters. And again, sort of a disclaimer relating to the component shortages. Overall, market growth outlooks are -- we keep them same. Actually, there's very little, let's say, reliable information available due to this, let's say, discontinuity that we are going through also in our industry. And sort of we think this logically, I mean, Security went so much down, so that most probably, Security, well, now it's starting to recover. The growth is a little bit faster also from market-wise. And Medical probably did grow a little bit more than 5% just during last year. And Industrial, probably 5% is quite good sort of an estimate on industrial growth. On earnings per share and payout, so our guidance is 30% to 60% of the net proceedings are the targeted dividends, and there is a proposal for the Annual General Meeting, AGM, that there would be 55% of that proceedings paid as dividends, which would account to EUR 0.35 per share. On the financial targets, these remain the same. So at least 10% growth, at or above 15% EBIT and dividend returned capital between 30% to 60%. So I would like to thank you for your attention, and I would be ready and very pleased to answer to any questions that might arise.
It's Matti Riikonen, Carnegie. A couple of questions. First, about the one-timers, the costs that you said that were slightly higher than normal in Q4. Could you explain what they were and how much and is that really a one-time that we should expect to happen only in Q4 and not going forward?
Okay. So thanks, Matti, for the question. So I think it's a little bit -- it's a bunch of things, a little bit here, a little bit there. A little -- part is, let's say, can be considered as one-time. Part is probably sort of more like structural areas or like a little bit more spending on R&D.We're spending more into the actual ramping up of the pixilation process in Wuxi, and then some personnel-related items and so on. So it's -- it was as a monetary number that -- not that big. But of course, I mean, the -- compared to the sales and the percentage, it's probably altogether 1%, a bit over 1%.
So 1% of sales?
A bit over 1% of sales, yes, in altogether.
Okay. And then regarding your guidance, when you say or talk about the boosted growth and in Finnish, you say, basically acceleration of growth, what is the starting point? So are you comparing the growth in Q4, which was 24% that you would expect acceleration to happen from that level? Or what exactly do you mean by the acceleration?
When we talk of the growth, we talk on year-on-year. I think one thing that you also -- I mean, you see in our history, especially the first quarter has been typically in sales, actually the smallest. Due to the fact -- 1 big item for that is the new year that they spend in Asia, especially China, but also other areas. So that affects right now, actually, there's the year of Black Tiger is being sort of celebrated this week and, for example, our employees on holiday and also many customers in other Asian countries than just China, so that affects. So when we talk of this growth, we talk of year-on-year, compared to the year-on-year, not consecutive. If it's consecutive then specifically, we've mention it.
Right. So if you now grew 24% in Q4, and that was year-over-year growth, you're basically saying that in the first half this year, you would be expecting year-over-year growth to be higher than that 24% or something else?
No. Actually, if we look now, I turn in this business outlook. And so what the guidance really is that for the full company, DT Group, we expect double-digit growth for first quarter and second quarter, meaning that also the first half would be double digit. So it's something that 1x in clear numbers.
Right. So you are using the boosted term there to basically say that compared to your previous expectations, you are a bit slower on growth on Medical and a bit faster, perhaps, growing on Industry and Security. Is that...
I mean, I must now refer to this -- what is the official guidance is that we have a double-digit for the full company for first and second quarter. So then if we go back to this, and this is now the, let's say, expectation for business units for first and second quarter, so we are talking here single digit for medical, and we are talking double digit. That can be understood, strong double digit for this both Security and Industrial. And this would then in -- altogether would count as a double-digit growth for the sort of full DT Group.
Okay. And could you explain why you kind of downgraded the growth in Medical? I mean, earlier, you talked about also Medical growing by double digit in the first half this year. Now you're saying that it would be single-digit, so is it due to component shortages or something?
It's very much -- there is -- actually, risks have increased. It's not only us getting the -- I mean, the components, it's also our customers getting to other areas. And of course, they cannot make the end product if they don't have stuff and materials from other suppliers. So it's -- in Medical, we see clearly challenges, both because of indirect reasons. That's our customers not getting other parts they need or materials, plus also, we have some challenges getting sort of active semiconductors to our products.
Right. Good. So now when you think about the component shortage and the impacts, do you think that you will miss some revenue permanently? Or is it going to be delays and you will eventually get the orders that you were supposed to deliver to your customers at some point?
That's a good question and I must -- I mean it's -- a little bit of this answer also is common sense. Of course, if there's sales that is delayed, it's always -- I mean, time is not good, so it is a little bit at risk. So I mean, meaning that it might be that the end business doesn't have because of some reasons, it could be that there's some competitor who can catch faster if they happen to have material better or it can mean just that things are, let's say, postpone our deal. So I mean, putting it all together, I believe that most of it is postponements. So meaning that we had a little spill from Q4 to -- Q3 to Q4, and we will have some spill to Q4 further for this year. Industrial area, probably there could technically be also because the clock speed is faster and there are no regulatory approvals. So Industrial, theoretically, they could be -- if there's some competitor faster, they could be able to grab it for a little bit. But mostly Security and Medical, the regulatory authority and approvals actually make it -- it's not easy to get products from anybody else, unless you have 2 suppliers. You have a very big customer and they have 2 suppliers, and then they can choose whoever is able to supply. So I repeat, so mostly, we believe it will be postponing sales.
Right. So have you so far seen that any of your competitors would have taken some volumes from you because of the better delivery capacity?
We have seen some threats in Industrial, but not -- I mean, not to any sizable sort of effect so far.
Nick [ Rangars ] from SEB. Could you elaborate a little bit whether the increased component prices have affected your profitability? And have you been able to transfer those to your prices? And then also whether you have included some price hikes in your guidance?
We have participated, actually, in the fourth quarter, a little bit more into this, what can be called the spot market component meaning that there's components in the spot markets at much, much higher prices than the -- actually, if I call the virgin components from the suppliers would be. That has a little bit affected our cost base, not so far to any sort of significant level. And out of these, we have a little bit been able to agree with some of the customers that, hey, they share the pay or they pay the extra. So that's the situation. We believe that the need to buy spot market components a little bit increases in our first quarter. Second quarter, we don't know yet. That can a little bit affect and increase our cost. We, of course, try to push those into our customers. But sometimes, it's so fast and so on that you don't have time to agree with the customers. It's -- then the components are gone. So it's very -- it's a true market economy, the spot market. And relating to this kind of like price increases and so on, I think it's -- we have been able to, a little bit, increase our prices. We also have some threat and some true cases on increasing material costs. And some, we still are negotiating for this year, both on the material side and the customer side. It looks right now that it should not have a big impact on our sort of profitability level.This -- so in larger extent, I'm more actually worried then for '23, what -- probably, the situation will be a little bit changing for '23, but it might also be that this kind of a shortage is totally out in that effect. But there are inflationary pressures, as everybody knows also.
Yes. So despite the [ shortage ] and challenges, so you believe that it will be possible to reach your operating margin target already next year?
Yes. So I mean, this year, I mean the target is 15%. That's what we are hunting. And I don't see any -- I mean, in our business and how it goes, it's -- we need the top line to grow. I mean, so the business model scales -- and at 90 level -- EUR 90 million level, we can't still yet make 15%, and -- but I mean, we expect growth for this year if we get enough components and that should help on our path to get to the target level.
Yes. And then another question on the Nanjing talent hub. So how big cost do you expect from that side annually?
It's not -- I mean, it's a fairly small office that we have rented, by the way, it's right in the downtown, right in the center of the city so that there's a close, close distance. I mean, actually, the railway station main beside. So it is not big. I mean this kind of like -- and probably -- the salary levels actually are higher in Beijing. So what we probably lose in, let's say, rents and so on for the small office, there can be some -- it's at least offset-ed because of the salary differences and so on. So it's more like -- this is more like a way of getting the talent and the, let's say, impact and results of using these talents to our R&D sort of efforts really, really exceed whatever the pain is, and the extra cost is very minimal.
Okay. And then 1 last question for me. You say that the component shortages have affected the least SBU. So is that the decision you have made prioritized to its rebound? Or is there are some other reasons for that?
No, it's -- this is a good question. It's not sort of our own decision in a way. Of course, there's -- some components are shared, but actually, typically, we use different type of semiconductors in medical than we use in security. And so when -- and security has not -- the sales have been fairly, fairly lowest and -- where the growth has -- the products that have grown the most in security, we have not had issues so far with these components. But we foresee that for the coming sort of quarters, the situation is getting also, in Security, challenging. One reason really is that as we said that, hey, we were prepared for this growth even during the corona times. We also told it that, hey, we are -- we have higher stock than normal. We are prepared to buy more materials so that we have stock. But we never thought that there will be total shut. I mean for fourth quarter, certain components just were not available. So we have consumed that stock now, and now it's also hurting Security.
Art [indiscernible] from [ Everlane ]. Could you open up the situation of the price competition in the medical markets? Has the competition increased and how it is positioned to answer the competition?
That's a good question. Thank you. So the question is that how has the competition -- how is the competition in Medical? I think it's -- in broad scale, it sort of stays -- has stayed about the same. So there has not been an increase we see. Not -- there is still a heavy competition, but let's say, it's more on the normal level. One must also note that actually, the demand growth has been very strong overall in health care. So typically, in this kind of situation, the customers do not want to, so much, sort of play these suppliers against each other and so -- because everybody is wanting to and fighting for getting the products.
Okay. Then another question. Could you comment the progress of the aviation standards, where they are going and...
The aviation standard, so the use of a special computer tomography at the airports, I mean, it's going forward. U.S. is, to my knowledge, are preparing some new sort of a request for quotation rounds and that is going forward that U.S. is installing to their airports, this computer tomography. China still -- it's the same thing then -- after third quarter -- so that -- our information is that they come out with the standard during first half. And Europe is doing some installation, new installations. But nothing, let's say, drastic and a big size. It's airport by airport. But U.S. is running these with -- through their central organization, which is under U.S. President, part of the Department of Homeland Security organization called TSA and -- Transportation Security Authority, and they are centrally buying for full sort of U.S., when Europe, it's country-specific, even though there's an organization that is specifying the standards, but then it's more like country and airport-specific, these.
Okay. Then last question. This is a straight quote from the report. "We have also strengthened our position in new areas in line with our beyond hardware principle." So could you open up this comment? Do you mean that bids and orders in the IBU business have seen some growth? Or is it just a concern in the Nanjing talent hub or internal capabilities?
Yes, that's a good question on IBU. I think, I mean, we reached the level of 370 active customers last year. We got some over 30 new customers. So -- and most of these are in the IBU area. And we have been actively now working in -- with various customers and also various opportunities. Also thinking that could be positioned for new business models and so on. We've established the IB organization. I mean, there's now more software competence and also these kind of things. Also in the IBU plus then what we have in our R&D, so from that point of view, we are going forward with this, "beyond hardware" strategy. There's a lot of, let's say, unmet needs, but let's say, the offerings by the -- our customers to the end customers is not always so clear and so on, and there's a lot of this kind of business development need to be done there.
Jerker Salokivi from Evli. My question is a bit upon the kind of customer demand, let's say. But maybe could you give an idea about the postponement, let's say, looking at the past year or past half year? Firstly, maybe is how much is kind of due to the customer and how much is due to DT?Then second, in terms of maybe, let's say, revenue and delay times, how has this changed during the last period of time?
Well, if we compare third quarter and fourth quarter, first of all, I think the net, let's say, postponement, because, of course, I mean, third quarter, we let something into the fourth quarter. It would spill further. So it's very important that you don't double count the same demand. So if we take this kind of like -- we take a consolidated look to that, I think we were talking third quarter a bit like EUR 3 million -- up to EUR 3 million. It's a little bit more for fourth quarter. I still use EUR 3 million, but a little bit more than third quarter. That's the -- what's postponing further. So -- and then regarding our lead times to our customers, also due to this shortage, so the lead times are getting longer. So -- especially, and that is challenging if we think that what is the situation for Security business. It was very like a standstill after drop due to the corona and companies that were mid-sized companies, small companies that were really...I mean, they didn't see, let's say, when it will turn when they start to get orders and so on, and they were quite mentally, in a way, paralyzed and so on. And now they're coming back and they're seeing some business opportunities, and they have not been able to forecast anything before. And they have 2 challenges then. Where do they get their detectors because of these long lead times? Of course, if we have no forecast from our customers and so on and we can just, in broader scale, to guess due to that there is no sort of a supply. So that might, let's say -- in my opinion, it slows down the overall Security sort of business to get back to its level where it was.
Okay. Maybe a quick follow up. Have you seen any kind of project cancellations?
No. Not this -- I'm just thinking -- not something that I'm not -- I've not heard any of that. It's very much discussing on negotiation or lead times and so on, and especially the customers that have had tough times and now they can't understand that, hey, we have now orders. We can't you supply? So it's a bit -- of course, bigger customers don't have that. They have been forecasting through the sort of pandemic time, even though some have forecasted a bit too conservative, in my opinion. So I think that's a surprise that, I guess it's overall that how -- were not companies and investors being able to see through this so that when things are dark, there's always a sunrise coming.
It's Matti Riikonen from Carnegie again. Coming back to the aviation security demand. You say that it is now picking up. Could you explain in which areas you see the most picking up at the moment? Is it in the U.S.? Or is it in Europe or elsewhere?
I think it's a bit both Europe and U.S.. U.S. probably is more probable because it's more, let's say, visible due to the central organization doing -- if we try to guesstimate on fourth quarter, probably the Aviation sales out of the Security sales was a bit over 1/3. And historically, that's a fairly still low number. So I expect this share of the sales increase in '22.
So 1/3 of Security sales in Q4 was from Aviation.
A bit over 1/3, Aviation.
And in normal circumstances, that has been around 50%, I guess?
50%, a little bit on -- of course, on a quarterly basis, you have a lot of these orders affecting. It's not -- but I mean, in balance, a bit all the 50% probably is a good number.
Right. And now that TSA has ordered the second round of equipment, when do you expect that those will be delivered?
We expect to get business on our customers to install city equipment in the U.S. during this year. So that's in our forecast and part of this sort of expected SBU sales for '22 first half even, end of first half.
Good. And if U.S. is kind of more predictable because it's based on TSA's orders, what has been your experience so far with the European airports and their kind of capacity and willingness to invest?
That's a tough, tough one because, I mean, the passenger sort of quantities have been fairly -- I mean, down, I mean, last year, 2020. Especially also last year, it was much less and airports typically get their money through travelers. So I mean -- and when there's less flights, there's less cash for the airports. And how -- I mean how are then they subsidized by the governments -- local governments and governments and how does it affect their, let's say, activity on investing into new technology? It is a question mark. There's both forces on -- positive forces that -- why they want to and why they should, like, touch-free sort of scanning and capacity increases and productivity improvements, et cetera, especially in these tough labor times. But then also, there is this cash -- money and investment constraint. So it's -- I would think that it recovers, but sort of slowly. We expect to have a fairly strong position in all these in Asia, China markets, also in Europe and also in U.S. for this.
All right. Good. Then you mentioned the heavy traffic kind of improvement or investments in China. Could you kind of discuss what kind of demand opportunity is that for you? So are we talking about multiple locations? Is it starting from small and then gradually developing into more places where are you doing those routines? And what kind of revenue potential that presents for you?
Well, it's a decision by Chinese authorities. It's a countrywide decision. So it will be implemented through nationwide in China. What is the rate? I mean, we don't know. They have not published it. It should start, I mean, second half. The equipment and also the detectors are verified and approved. So there's this kind of like approval there. Then it's very much dependent on the local governments, how they are then actually implementing the equipment. It is -- of course, it's much less than aviation. I mean it's -- aviation market is huge, but it is a sizable market. And we have a good position right now and let's see how we can hold on to that. And this is also -- all this new business, unfortunately, is related to these component challenges that are we able -- then how much are we able out to supply to that, that we can actually conquer otherwise. But it helps the SBU growth and also that's 1 reason that we can be fairly positive on the SBU outlook, aviation and also this opportunity.
Right. Did that come as a surprise to you? I mean, this was the first time that you started to talk about it.
This is -- it's a quite innovative idea, and it is sort of -- from that point of view, it is a surprise. We didn't have any -- of course, I mean, we've heard of some quarters ago, but I mean, it was still at that level that we were not able to talk about it because it was not so sure. There's all kinds of ideas in the world going on. But from that point of view, I mean, we -- if you look a year ago, and so we could not foresee that this kind of thing would be coming. Probably nobody, nobody could.
Okay. And is the technology that Chinese are using there, is it pretty much the same as you would be using at normal customs?
It's -- yes, if you talk customers for cargo and for heavy, sort of -- it's a bit heavy energy side. It's on the side of the heavy energy, so we have a, let's say, version of our cargo type of technology, what is our solution to that. So the energy levels that they're using for scanning are higher than they would be at aviation or some other critical infrastructure. So it's closer to this kind of cargo, truck, train at customs, for example.
And what kind of chances do you think that you will have in that particular market space? Is it -- do you have better products than your competition? Or have you already done quite a lot of those so that you can basically expect that the technology is pretty much what you already know and then it's up to the local standard buying processes.
If the market stays as we see it right now, if it's a fair game for everybody, and if we are able to get components, we have a pretty strong position there.
It's Nick [ Rangars ] from SEB again. You have launched some new products and expanded to some price levels. You have had smaller coverage before. So does this affect your gross margins in any way?
We have actually. It's -- we have a wide portfolio of products and fairly also wide differences on margins per product and so on. And in big scale, we believe that we can hold on to our margins if we look that way. There is, of course, both positives and negatives. But as a total, we should be able to -- also through these inflationary pressures and so on, we should be able to hold on to this gross margin. Then if we really -- I mean, if we look at the production fixed cost and so on, part of this gross profit, above gross profit, of course, that's very much then scales with the volume. But we expect the volume to increase. We have this double-digit growth for second and -- or first and second quarters, so that should sort of help to keep also fixed in control.
Okay. And then about Green Channel, you a little bit elaborate already. So how big impact do you expect it to have the whole market if it goes on?
For the whole market, it's -- for the global security market, it's probably fairly small. But for DT, it should be a bigger impact compared to the market.
Okay. Let's take some online questions. So as the company doesn't give any guidance regarding the profitability, so could you please provide us some rough estimate about the possible development of your cost structure? How much pressure there is in personal and other fixed costs?
That's -- so the question is about the cost structures. I think I touched a little bit on that. But I mean, looking then more into the fixed cost and also the, let's say, the profitability. So we have a target of reaching the 15% EBIT or operating profit. And that target is valid also for the '22. If we look then the years behind us, I mean, so typically, like the first quarter has been a little bit less. I mean, smaller sales than the other quarters, and that then also affects on the profitability just for the first quarter, but then the profitability actually increases toward the end of the year. And for the full year, we have -- the target is 15%. There will be some pressures on salaries, for example, fixed and what -- due to the things that are going on, especially in Asia and so on. But I mean, overall, we also look forward for the double-digit growth, and that should help reaching the -- closer to the target.
Okay. So do you think that you are well positioned to meet your financial targets in 2022?
That's what it looks like. Like from today's point of view, that's the target for this year. And from that point of view, I don't think the situation is any different than it was, for example, after third quarter.
Okay. How do you think the growth rates? Are they likely to increase towards the end of year due to improving security demand and then again easing component supply?
So the growth profile for this year, of course, it's very much up, also down to the -- what is the underlying quarter and there might be some changes. And of course, there can be changes between the quarters with no reason, some sales might spill over and so on. But basically, it's -- the growth outlook, I think, it's -- if we look last year, the first half was -- the sales was less and especially security went down. So making nice percentages a little bit easier, for example, for this first half on the other side. Then first half, we have, hopefully, the situation so that this component shortage is getting less severe for the second half. So in a way, we have a little bit more challenge for the first half to offset this, let's say, "easier to make growth" point of view. And then second half, even the underlying numbers are a little better, but then hopefully, we have better availability of components. So it's -- we'll see.
Okay. Thank you. Then we have another question about Intel chips and assumption that the company is utilizing quite a lot of Intel chips. And do you have any update on your visibility to this issue improving going forward? Or are you being able to cope with other suppliers? So what are the measures that the company is taking to tackle the supply issue?
Yes, it's -- so relating to this component shortage, overall semiconductor is 1 area that is a special difficulty. It's actually the Intel FPGAs. So the programmable logic checkers and -- we are using in our sort of products also Intel, and that has been a big constraint on getting those. I mean, visibility, what will happen. I mean, we know as much as basically the market knows. I mean if you go to media and look what various large semiconductor player CEOs talk about the market, I think it's quite confusing because there are very conflicting opinions and so on and depends on what type and who gets where and so on. Basically, big players all buy from these large foundries who are the contract manufacturer for them, like TSMC in Taiwan and so on. Actually, it's fairly few amount and politicians also have been surprised how concentrated that manufacturing base is. It's then up to, also, that who gets the capacity. I mean, which of the semiconductor players get capacity from the fairly few sort of fabs. And now there's big subsidies. There's decisions in U.S. to subsidize semiconductor, I mean, manufacturing fabs. There's also talks that Europe should do it. Japan has decided. South Korea has decided. Taiwan is also doing. So everybody seems to be boosting up their capacity. And -- I mean, for full fabs, it takes time, but also there's a lot of investments to -- for bottlenecks and buying various equipment to increase the capacity. So the situation, very much, it's up to the -- what happens to the demand and how much can the supply grow and even can the companies -- also us, I mean, how can we change and replace, designing new stuff and so on. So it's a lot of things affecting. We think that situation is -- for DT, our point of view still is it's a very difficult first quarter and even second quarter. Beyond that, it's -- we have more hopes than visibility.
One clarification still. When you said that in Q3, you basically had some EUR 3 million revenue loss due to -- Matti Riikonen again. One final question, when you, in Q3, said that there was some EUR 3 million sales being postponed because of you couldn't get deliveries to take place, were you able to deliver those orders in Q3 -- Q4?
Yes, that's -- I mean, I don't have earmarked sort of that information in my head. But part, yes, were delivered Q4, and part then also the fresh demand from Q4 is then moved into the sort of this year, so first quarter and even beyond. So it sort of -- it goes layer by layer. But I mean, when I was talking of roughly EUR 3 million and a bit more than EUR 3 million for fourth quarter, that's sort of the net impact. So that has taken into account that there is no double, let's say, accounting and so on. It would be -- so that's the net spill for the first quarter and beyond.
Sure. But in practice, that also would mean that the lag to revenue would not be more than 1 quarter.
But I said partly, there's also fresh. I mean, even though we were able -- so there's also fresh. So the lag is actually -- putting it the other way around, we would have made more than like, let's say, EUR 6-ish million revenue last year in the normal conditions. So EUR 90 million plus, the third quarter and fourth quarter, loss because of component shortages.So thank you, everybody. Thank you for very, very interesting questions, and I would like to conclude and this fourth quarter announcement and wish everybody a very, very happy start of the year and happy year of the Black Tiger. And I think at DT, we look -- despite all these challenges and risks, we are very confident that we can have a nice growth this year and look forward to the new opportunities that we will be also getting into our businesses. So thank you, everybody, and goodbye.