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Thank you very much for the introduction. And good morning, and welcome, everyone. I hope you can hear me loud and clear. And as said, today, I am to present Careium's first quarter results for 2022. After the presentation, we will give you an opportunity for a Q&A session. And as you know, you have the opportunity to also write questions in the chat forum that we can read out. And together with me here today, I also have our CFO, Mathias Carlsson. Next slide, please.
So let me start to give you some highlights on the quarter. I would say the first quarter for Careium of 2022 and actually the first full quarter as a stand-alone company has been a mixed picture. We've taken several positive steps, but of course, not without some key areas that needed our attention during the quarter and still will, in the quarters to come. One thing that's very positive is the sales development that we saw in the quarter, which is a continued sales growth in the first quarter, both compared to the same quarter last year, but also to the first quarter, actually achieving the highest quarterly sales in a single quarter for Careium.
We also continued our efforts to broaden and strengthen our product portfolio with the launch of new products such as Eliza S, which is a slim version of our leading welfare hub Eliza and also a few different sensors that I will tell you more about. The first real external version of our service platform is all ready for the market with customer activities ongoing. And then the restructuring that we initiated during the fourth quarter, we have continued with sort of enhanced efforts during the quarter, where activities in the quarter have included largely new management [ team ].
We have consolidated our offices and reduced the number of sites we have in the U.K. and also implement one common contact center platform, with [indiscernible] to finalize the integration of our acquisitions and ensure long-term profitability in region in United Kingdom. I'd also would like to say that we are, of course, very concerned and troubled by the situation in Ukraine and our thoughts go to all the individuals, both in and outside Ukraine that are suffering as a consequence. And from a business perspective, we do not have any direct or indirect operations in Ukraine or Russia and as a result of limited impact. The main impact for us to date is more from a supply chain perspective where the situation in Ukraine has put extra pressure on what was already, to some extent, a fragile global supply chain situation.
Next slide, please. The sales and gross margin in the quarter. Net sales in the quarter was SEK 178.5 million, which is an increase of close to 30% compared to the same period last year, and around 10% above the fourth quarter of last year. And as you can see from the graph, the fourth quarter last year was the best sales quarter ever in the history of Careium. And this quarter, we beat that with, as I said, close to 10% and was very positive, of course, that we managed to accelerate our growth, which have been hampered in recent quarters by the pandemic.
We also saw a very good organic growth in this quarter of 18.4%, which is also at a historical high. And especially in the Nordics, we grew strongly organically in the quarter, which is also positive from a sales perspective is [ both all ] regions and also both products and services contributed to the growth. So we did see a growth, sort of, you could say, across all aspects, both from a regional and from an operating perspective. Sales of services have increased by close to 24% to SEK 139.4 million, with a number of new contracts implemented in the Nordics.
And then also [indiscernible] acquisition of Innocom in the third quarter of last year. In services sales also, we saw a good growth in number of connections where connections increased by 8.1%.
So also a new all-time high for Careium with a total of 401,000 connections at the end of the quarter. Sales of products was SEK 39.1 million, which is a clear improvement by 54.2% compared to the first quarter of 2021, which is driven by mainly a good growth in United Kingdom in product sales as we start to see increasing sales of digital equipment as the digital shift is increasing its pace. Gross margin, we managed to keep at 39.2%, with maintained good quality in our service delivery.
And this is despite that we in the quarter have faced sort of some continued challenges with higher cost of goods sold due to both higher component costs and higher transportation costs, also due to higher costs in both our contact centers and field services as a consequence of, I would say, hopefully, the final wave of the pandemic at least from a European perspective in the quarter, resulting in higher sick costs and overtime. But also the sales mix, where the good [ sales ] in the quarter have given us some difference in sales mix also impacting the margin.
But I said, despite those elements that we sort of needed to ensure that we managed in the quarter, we kept gross margin at the reasonable level of 39.2%. Next slide, please. We continue to focus in strengthening our portfolio and our offering to the market. And in the quarter, we launched a number of new products.
This includes both smart detectors for a safer environment in home, including smoke, heat and carbon monoxide detectors, which can be serial connected for improved coverage and safety at home. We also launched Eliza S, which is a slim version with a different form factor of our market-leading welfare hub Eliza.
And the Eliza S is based on the same powerful platform as Eliza and of course, as a consequence, ready for both today's and tomorrow's solutions in technology-enabled care. We have also, during the quarter, and I would say, in the last few quarters, put significant effort and successfully done so to make sure that we manage sort of the component challenges, keeping our products up to date in order to mitigate component [indiscernible] component changes and different or new regulations in marketing compliance, making sure that we manage sort of the steady supply and high-quality products to the market and to our customers throughout this quarter and also previous quarters. Next slide.
Some market highlights then from our regions, starting with Nordic and United Kingdom. In Nordic, sales increased with 22.3%, equaling SEK 82.3 million, which is driven by implementation of new service contracts in Sweden, and continued market success, especially in Sweden, where we won all tenders that we participated in during the quarter.
In Sweden, we also started to implement our second major customer in assisted living. As I commented in the first quarter, we implemented our first -- started to implement our first major customer in the fourth quarter of last year.
And this quarter, we continued with our second major customer in assisted living. So we continue to build our offering and presence in this segment in line with our strategy. Cost of service delivery have been impacted in the Nordics by the pandemic, especially with high sick leave and overtime as a result, but we managed to continue to maintain our high quality in service delivery in the region. And also, we saw a good growth in number of connections in the quarter, equaling 128,900 connections at the end of the quarter, which is 5.1% up from the first quarter of last year, but also from -- a good growth from -- compared to the fourth quarter of last year.
In United Kingdom, and as I mentioned earlier, we will come back to a little bit later, we are ongoing significant restructure of the region. But sort of despite this restructuring, we managed to increase revenue by close to 13% in the region up to SEK 69.4 million. And especially product sales was good in the quarter with increased deliveries of digital equipment as we start to see a pace of the digital shift is increasing and accelerating.
As I mentioned, we are sort of undertaking a significant restructuring of the region, and we have continued that transformation in the first quarter to address the profitability in the region and to finalize the integration of our acquisitions.
We have, in the quarter, to a large extent, replaced the management teams. Offices have been consolidated, a common platform for our alarm receiving centers have been implemented in the quarter, just to name a few of the activities that we have implemented and carried out during the first quarter. Connections in United Kingdom and Ireland equaled 244,100, which is unfortunately a slight decrease compared to the same quarter last year, but it is an improvement from the fourth quarter of last year, where connections equaled 238,100 connections. So we actually managed to grow connections in the region over the fourth quarter with 6,000 connections.
Next slide. I'm continuing with market highlights but focusing on Central Europe and other markets. Sales in Central Europe also showed good increase in the quarter, growing by 208.4% to SEK 25.1 million compared to the same quarter last year. The sales increase is mainly a result of the acquisition of Innocom that was completed in the third quarter last year, but also a generally good demand for our products in the region and especially from the German market, where we continue to have a strong market position and good development of product sales in that country.
Our first major customer for our Software-as-a-Service platform is ready to go live. We -- I touched upon it when we presented our first quarter. Sort of everything is ready to go live, but the customer has decided to slightly postpone the go-live date, ensure -- to ensure that they manage all the activities they have in regards to or towards their service users to ensure [ smooth ] implementation. The number of connections at the end of the period in Central Europe was 28,300, which is also just as in Sweden, in the Nordics and in the United Kingdom, an increase from the fourth quarter of last year, where the number of connections totaled 27,800.
And in other markets, sales grew by 79.4% compared to the first quarter of last year, but this is still a small region. Total sales in the quarter equaled SEK 1.8 million. Next slide, please. The profitability in the quarter has, of course, been significantly impacted by the restructuring that we are committed to succeed with of the United Kingdom and Ireland region. And also, to some extent, the effects from increased cost of goods sold and higher cost of service delivery that impacted the gross profit margin negatively in the quarter.
But if we look at EBITDA, and we adjust for restructuring costs in the United Kingdom, and other costs impacting comparability, which also is predominantly related to the transformation that we're undertaking in the U.K. equaled SEK [indiscernible] million, which is actually an increase compared to the same period last year.
Then this includes, as I said, the restructuring costs in -- for the United Kingdom of SEK 20.9 million, which includes the write-down of accounts receivable of SEK 15 million but as well also the other items impacting comparability, which was mainly related to United Kingdom of SEK 6.9 million.
So as I said, if we adjust for the restructuring costs and the other costs impacting comparability, EBITDA was roughly SEK [ 4 ] million higher first quarter 2022 compared to the first quarter of 2021. If we adjust operating profit or EBIT for restructuring costs and other costs impacting comparability, that number was SEK [ 3.5 ] million in the quarter. So if we include -- sorry, if we exclude, I would say, the intent efforts that we are putting in place and that we're driving to build an integrated, a profitable region in the United Kingdom and the resulting restructuring costs and transformation costs, we delivered an operating profit that was roughly in line with last year. Next slide.
To give you some more sort of the meat on the bone on the U.K. restructuring, which, of course, is a big focus area for us at the moment.
We communicated during the fourth quarter that we have initiated a significant restructure of our U.K. operations. [ Sorry, it's sad ] to say that, unfortunately, local management have not managed to integrate and build one business after the acquisitions that we've done throughout the last 4 years in the region. Of course, this has been increasingly challenging during a pandemic situation where especially if we look at United Kingdom, the country has been in complete lockdown for a large period over the last 2.5 years.
But nevertheless, we have not managed to undertake the cost as we wanted to. Of course, the pandemic, as I said, a lot of the focus has been on making sure that we focus on the safety and well-being of both our service users and our employees. But now we are addressing this issue and making sure that we are restructuring United Kingdom. We aim to complete the integration of our acquisitions and to create long-term profitability in the region to sort of maintain and strengthen our position as the leader in the digital shift in the market.
Our ambition as a consequence of the restructuring is that we will improve profitability with approximately SEK 35 million to SEK 40 million on a yearly basis. In order to do so, we expect that this will result in transformation costs of approximately SEK 15 million to SEK 20 million, excluding the write-down of accounts receivables in 2022.
And of this SEK 15 million to SEK 20 million in restructuring costs, we have -- the first quarter has been affected by SEK 12.4 million of the total restructuring costs. And activities completed during the first quarter includes consolidation of our offices, implementation of one common system for alarm handling and the new and strengthened management team. And the focus for sort of our restructuring in the U.K., we expect that the total cost for transformation will be completed during Q2 and Q3 this year with the complete sort of integration and transformation of our U.K. entity to be finalized in the beginning of the fourth quarter this year.
Next slide. Cash flow from current activities during the quarter was SEK 22.1 million, which is a clear improvement from the same period last year. The improvement in cash flow and actually both current activities, but also if we look at the free cash flow, which was SEK 5.5 million (sic) [ SEK 4.5 million ] in the quarter, also a clear improvement from the same quarter last year and most of the quarters last year is a result of efforts we've taken to improve working capital. Net debt at the end of the quarter amounted to SEK 158.4 million. Next slide, please. As I said in the beginning, the first quarter for Careium was sort of a quarter with a mixed picture.
A lot of positive elements with strong sales and good organic growth in the quarter, total sales almost 30% above the same quarter last year and a clear improvement from also the [ first ] quarter, reaching the highest quarterly sales number in Careium's history.
We managed to maintain a decent gross margin despite the challenges we've seen with higher cost for components and with service delivery. We strengthened our offering with launch of several new products, both -- different smart detectors and -- sorry, the slim down version of our welfare hub. And also our platform is ready for deployment at external customers and several market activities have been initiated during the quarter. But it's not a quarter without a few challenges. I think the key one, as we mentioned, and a focus area is the development in the U.K. and the challenges to sort of integrate the acquisitions we've made and ensure that we capture the synergies to create the long-term profitability in the region, which we are now addressing heavily.
Of course, we also see continued increased cost for components and service delivery, where -- and [indiscernible] U.K., we had to take a number of both restructuring costs and other costs sort of affecting comparability in the quarter. So the focus going forward is, of course, making sure that we get the United Kingdom to where United Kingdom should be, integrating our acquisitions, creating a strong entity in the U.K. that can lead the digital shift and the digital transformation and ensure long-term profitability in the region.
We'll continue to broaden our offering and build presence in assisted living.
As I mentioned, we are already in this -- in the first quarter, started to implement our second large customer in this area in Sweden. And of course, we'll continue to carry out our strategy and purpose to become the market leader in technology-enabled care in Europe. Thank you very much for attending and listening. And we now open up for a Q&A session.
[Operator Instructions] The first question we've received comes from Rebecka Gärderup, ABG.
Yes, Carl-Johan. I have one question regarding the strong organic growth in the quarter, where you largely grew the number of subscribers. And are there any contracts pending now waiting to be rolled out? Or have you been able to catch up on that area?
Sorry about it. Maybe I'll rephrase the slide, I heard your question. You said the -- are we up to date with implementing on tenders? Or are we still sort of in a catch-up mode?
Exactly.
I think we managed to catch up better. I wouldn't say that we're completely sort of -- we're completely caught up yet with all the contracts that we won, but we managed to deliver quite a lot in Q1 of the contract that we won in the second half year of last year.
All right. Okay. So there's a few left, if I answer that correctly?
Yes.
And also a question regarding the price increases and the transportation costs, do you expect continued price increases and component shortage going forward?
It's a very good question. And I think that's a big debate for every company. Our view is there is still sort of a challenge with components. We have sort of seen or heard that there might be sort of continued price increases in certain areas, certain components. Having that said, we're not out of the woods yet. But I would say that we're starting to see sort of light at the end of the tunnel, if you would express it in that way.
And a lot of sort of people we talk to in the market [indiscernible] supply chain perspective, and now we're starting to seeing that we are -- probably not this year, but if we look sort of beyond this year, seeing that okay, we will end up in a situation where there might be more components than there are demand, and we need to sort of find the soft landing to find a good balance between demand and supply.
There are no further questions at this time. [Operator Instructions].
Okay, we have -- and I can -- we have a few questions here sort of -- digital questions. One is regarding our service platform. And [indiscernible] good deployment of external customers. And if we can give some more -- sort of more light on this. So -- of course, this -- our software platform is something that we'll continue to develop over time, making it sort of more complete of bringing new type of services, new functionality. But we now have a good base offering where we see that our platform is competitive.
And I would say in certain areas, better than other offerings in the market that we can take to the market and implement with external customers. And our platform can be used in several ways. One way is, of course, it's a platform that could be used as a Software-as-a-Service, supporting other service providers and then our customers to deliver their services and taking care of the sort of the alarm handling and alarm management. But it's also an offering where we can say, bundle both hardware, connectivity and the platform from our perspective, giving sort of a [ full ] solution to other service providers.
And of course, if we take the total European market, there are sort of roughly 5.5 million connections in Europe that needs some sort of platform to be sort of maintain and manage. And then there's a second question given the write-down of SEK 15 million. And it's sort of to give some more [indiscernible] sort of if it's related to one customer, several customers, if it's related to sales or products or services. And if we could give some more detail on that and also some more details around the savings of SEK 35 million to SEK 40 million.
So if we start with the write-down, I would say, so it's related to not a specific customer, not for any specific element, sort of in general because we did sort of identify and when we started the overview of U.K. operations that we've experienced problems with invoicing processes and claim procedures in our sort of U.K. subsidiaries, which increased the amount of overdue receivables.
And during this quarter, we've taken sort of a very close look at it and make sort of an audit of our accounts receivable, resulting in sort of a prudent approach in writing down our accounts receivable of SEK 15 million. Then the second question relating to savings of SEK 35 million to SEK 40 million.
And I said that savings from -- profit for savings, that's improvement from a profitability perspective because what we want to achieve is a more efficient service delivery as a result of -- as we said, creating one common platform, one sort of consolidating our offices, improving service delivery and efficiency in general that will drive gross profit margin improvements, but also integrating streamlining operations and processes in the U.K., which were reducing sort of operating cost increases. So that's the element that we're driving to make sure that we will improve our profitability on a yearly basis with SEK 35 million to SEK 40 million.
Then another question, there's more digital questions today. It's related to the increased product sales in the U.K. in the quarter sort of that we say it's due to the transformation from analog to digital.
And if we could give some more flavor. Yes, we have started to see that our customers are starting to ask more and more for digital equipment instead of analog equipment, and also the new customers are coming to us by our digital equipment as they have initiated the digital shift. Okay. I have a few other questions. I'll keep on going. So -- and then next question was related to the platform, I think we already answered that one. Question regarding Norway, if there's any major change.
So I think Norway in the quarter, they managed -- they managed the quarter well to a large extent from a sales perspective. They are in line with last year in the region. They have suffered from, as we mentioned, in the region, Nordics and also Norway, they have suffered from some, you could say, pandemic effects with high sick leave and overtime in service delivery. I'm just trying to read all the questions. I think there's a question when you look back, where did you go wrong [indiscernible] in the U.K., what did you underestimate? Sort of a good question.
I think we just need to look ourselves in the mirror, did we do sort of well enough job making sure that we integrated the entities in the U.K.? Did local management sort of take responsibility to ensure that we integrate the acquired businesses in a good way that we capture the synergies? The simple answer, of course, is no.
Then there are factors that explain sort of why it hasn't gone as wanted, especially with pandemic. But it's sort of -- it's not good enough explanation. And now we need to make sure that we do the job to get our U.K. entity to where we want it to be. But I am still confident that being in the U.K., having a strong U.K. entity is strategically the right thing to do and that we will have a strong and profitable U.K. region.
Then sort of another question [indiscernible] since you have long contracts or the opening to adjust price to [indiscernible] increased costs. I would say you could break that down in 2 elements. There's one element where a lot of contracts we have the opportunity to adjust pricing typically based on different sort of -- you can call it inflationary measures. If it's general consumer price index or other indexes that we can increase prices with and that we've done. The second element, of course, and that we have continuous dialogues with our customers saying, there are lots of increased costs in our operations in our service delivery that are sort of not yet visible in, for example, general consumer price index as well as other indexes.
And to take a discussion with our customers, how we can find a good way for both us and our customers to try to mitigate and compensate for those increased costs.
Then there's a question, can you comment on the covenants or covenant we have to the bank. I think the only thing that we can say, we're not in a situation now where we have problems with our covenants with our bank. And I think that's the -- that was the final question if there's no questions from any participants on the phone. Okay. It looks like there's no further questions.
I thank you very much for listening in. As we said, it's been a quarter where we've experienced the highest sales in the history of Careium. It's the sales where all regions and both products and services contributed to the high sales growth. We managed to maintain a decent gross margin despite some challenges. We're putting pressure on the gross margin in the quarter. And we are making significant efforts to restructure our U.K. operations.
And if we exclude for the cost that we've taken in the quarter in restructuring our U.K. business, EBITDA is actually higher than the first quarter of last year, and also our operating profit is in line with last year. So I think with those concluding remarks from my side, I thank you very much for listening in and have a great Friday and a great weekend when it comes.