Getinge AB
STO:GETI B
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Getinge AB
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Hello, and welcome to the Getinge AB Audiocast with Teleconference Q4 results 2021. [Operator Instructions] Just to remind you, this conference call is being recorded. Today, I am pleased to present Mattias Perjos, CEO; and Lars Sandstrom, CFO. Please go ahead with your meeting.
Thank you very much, and welcome, everyone, to today's earnings call. Lars and I look forward to taking you through the last quarter of 2021. And in order to do that, we can move directly to Page #2, please. So let's begin with the key takeaways in regards to performance for the quarter. As expected, net sales declined year-on-year as we had a deliveries of ICU ventilators in Q4 of 2020. But basically everything else in our business is growing. And I also want to take the opportunity to send a big thanks to all my colleagues and especially the ones who work in supply chain for a job, really well done throughout 2021 and especially in a very hectic fourth quarter. We've managed to live up to customer expectations and really make sure our life-saving products were delivered on time in service of the patients. From an order intake perspective, we saw a 6.4% organic increase with growth in all business areas and all regions. And adjusted for currency, our order book is actually more than 20% larger today than 1 year ago, which is, of course, very nice momentum going into 2022. The improvements in the business continued to have an impact in higher gross profit and EBITA margins and also strong cash flow, which means that we strengthen our already solid financial position, and we continue to have room to make selective acquisitions and at the same time, increased our dividend by 1/3 to SEK 4 per share. We can move over to Page #3, please. So we take a step back and look at some of the key activities and other events in the quarter. In terms of our offering, at the end of December, we announced the acquisition of Talis Clinical LLC, a U.S.-based leading innovator of cloud-based software solutions for emergency medical care. Talis Clinical's offering its design to support and document care throughout the perioperative care process, but also have a presence in obstetric care, intensive care and in ECMO therapy. So this will be a great complement to the offering that we already have, especially in acute care therapies, and we look forward to working closely with our customers and continue to expand this business even if the starting companies that it's not expected to have a material impact on the group's sales and EBITA in 2022. And on the topic of acquisitions, after the end of the quarter, we made a minor acquisition of Erasun GmbH, which is based in Munich. Through this acquisition, we broadened our portfolio with innovative solutions for ECMO for surgical confusion and cardiovascular health care overall risk. This acquisition has also not been expected to have a material impact on the group sales and EBITA in 2022. It's more for the longer term.Also very happy to announce that we have 2 new business area Presidents starting 1st of April. This is -- and they will join the Getinge executive team. It is Elin Frostehav and Eric Honroth, and both of them will take office 1st of April this year. Elin has been appointed President, Acute Care Therapies, and she currently works as President -- Vice President of Critical Care, which is part of the Acute Care Therapies business area in Getinge. She's been driving, among other things, the successful ramp-up of ventilators during the pandemic and I'm very happy to welcome her to the executive team. Elin succeeds Jen Viebke, who will, from 1st of April be responsible for our research programs and M&A activities going forward. He will continue to report directly to me. And as you already know, these are really key areas for us, and I'm confident that Jens will do a really great job there, just as we have done already with Acute Care Therapies. Eric Honroth then has been appointed President Life Science. Eric is currently President of North America region for Getinge and he's been with our company since 2018. Before that, he has a combined experience of about 20 years in different global leadership roles in the medical device industry and Eric's ability to create customer value as serving well in previous positions, and I'm sure we'll continue to serve them well in this role as well. This is really a business development and expansion journey that we're on in Life Science. Eric succeeds Harald Castler, who after a long and successful career at Getinge has decided to retire, and [ I give you ] whole conference call talking about the achievement of Harald in terms of what he has done with life science. But I guess in terms of numbers, it's already quite obvious for everyone. So a big thank you to Harald. Then we have completed the capacity increase in regards to BetaBag. So Harald and the team in Life Science have been working hard during 2021 to expand the production capacity of DPTE-BetaBag's by establishing production in Merrimack in the U.S. to meet the increasing demand that we continue to see in Sterile Transfer, and I'm very happy to say that in December, the new production line in Merrimack was in operation and deliveries -- commercial deliveries will begin now in the first quarter of 2022, and we expect volumes to gradually increase during the year.I also want to comment on the MDL mesh litigation settlement. So during the fourth quarter, we entered into the previously communicated MDL litigation settlement agreement regarding surgical mesh implants, which enables us to now focus all our efforts more on future improvements of our business. Consequently, we have made a concluding provision of SEK 600 million to cover the cost of the settlement, and this is reported as an item affecting comparability in Q4. Payments are expected to be made during the first half of 2022, and the litigation against the insurers that we have initiated, would continue in order for us to receive the compensation to which we believe we are entitled. I also want to highlight the milestone agreement in the quarter. So during Q4, we signed an agreement with HealthTrust in the U.S., a leading GPO for getting a portfolio of sterile goods handling and operating group products in surgical workforce. So this is agreement, it's really the result of the focused efforts over a long period of time by the GPO team in the U.S. and several other colleagues around the world, and it's expected to provide a solid platform for long-term growth in the North America region for us. We can then move over to Page #4, please. So if we look at the order growth in Q4, we had an increase organically of 6.4% in the quarter. And from a net sales perspective, we had a 9.6% organic decrease. And as I mentioned previously, the positive order growth momentum from previous quarter continued in Q4 with growth in all regions and business areas, taking us to the 6.4% organic number. This is due to a combination of comeback effects outside of critical -- all the critical sites and a new and higher normal level for ECMO therapy and products for development and production of biopharmaceutical drugs. From a regional perspective, EMEA and APAC order intake is growing strongly as a result of good performance in all business areas, while Americas growth was not as high as a result of tough comps for ventilators in late 2020. And as I mentioned, net sales decreased maybe as expected due to the challenging comps that we had from of 2020. However, the organization delivered really strong growth in APAC and especially in East Asia. We can then move over to Page #5, please. So based on what I just said here, we have the following outlook for 2022, saying that the organic net sales growth is expected to be at the upper end of the 4% to 6% range for the full year. And we can continue then to Page #6, please, and look at the cost line momentum of the group. So order intake amounted to SEK 7,629 million in the quarter. In Acute Care Therapies, we had a 4.4% organic increase and order intake remained strong in ECMO therapy products. Growth in order intake for ventilators was negative but recovered a little bit towards the end of the quarter as a result of the new pandemic wave. But if we adjust for orders in Critical Care, where you find the ventilators, the order growth was actually in the high single digits for Acute Care Therapies overall. When it comes to products for planned cardiovascular intervention, this increased in the quarter as well despite the ongoing pandemic. So that's also good. When it comes to Life Science, we had a 7% organic order intake increase in the quarter. We saw a very strong organic order growth in sterilizers, while sterile transfers and bioreactors did not fully reach last year's record-breaking order intake in Q4, but the order book is going into 2022 is much larger today compared with 1 year.We also saw significant growth in the U.S. and large parts of Europe, while challenging comps in China had a negative impact on order growth in APAC when it comes to Life Science.If we then look at Surgical Workflows, we had a 9.5% organic growth in the quarter or organic order growth in all categories and regions. And the order book was in Surgical Workflows more than 30% larger at the end of the quarter compared with the same period 1 year ago. And order intake was particularly strong when it comes to digital solutions and products for operating groups. We can then move over to Page #7, please. So net sales amounted to SEK 7,987 million in the quarter. In Acute Care Therapies, we saw a 22.1% organic decline as expected. The decrease in sales in Acute Care Therapies is mainly due to the challenging comps in ventilators that I have already addressed. And if we adjust for this, the net sales is actually up more than 10% organically in ACT.We have continued strong growth in ECMO therapy products, cardiovascular intervention products continue to grow organically compared to 2020, but we still see that it's being negatively affected by the ongoing pandemic.When it comes to Life Science, we had a 29.1% organic growth in the quarter. Organic growth in net sales continued to be really strong in -- across the life science product portfolio as a whole. Bioreactors developed most strongly in the quarter, growing more than 70%. Net sales also increased in a healthy way when it comes to service and spare parts, which is, I believe, is a good sign from an overall business perspective and also in terms of access to customers despite restrictions imposed by the pandemic. We saw growth in all regions in Life Science with particularly good development in Asia Pacific.In Surgical Workflows, we had a 4% organic increase. So net sales here increased despite the challenges linked to the pandemic and the ability of hospitals to receive deliveries. So that's really good. Operating room products developed the strongest with an organic growth of over 6%. We can also see that the organization's focus on the customer offering and service and consumables continues to contribute positively. When it comes to currency, there was a minus SEK 7 million effect over 0.1% negative impact on net sales for the group in the quarter. We can then move over to Page #8, please. So if we look at the margin development, we can see that adjusted gross profit in the quarter decreased by SEK 406 million to SEK 4,150 million in the quarter were a positive FX effect accounted for SEK 35 million. For the group as a whole, the gross margin improved despite the lower volumes compared to Q4 2020, mostly thanks to higher factory absorption and the overall productivity improvements that we've talked about for several years now. They're clearly generating a strong benefit for us. When it comes to Acute Care Therapies, the gross margin improved by 1.4 percentage points despite the lower volumes. Here, we had strong absorption in production, combined with a favorable business area mix contributing to the improvement. For Life Science, the adjusted gross margin decreased by 0.2 percentage points as a result of mix effect. And as you already know, we have significant customer demand when it comes to our high-margin DPTE-BetaBag. But we do run the factory in France at 100% capacity, making it a little bit harder to increase the output that much in the short term. So this will be taken care of going forward through the new production line in Merrimack, where we expect to ramp up gradually the output throughout the year. In Surgical Workflows, the adjusted gross margin increased by 4 percentage points as a result of higher volumes, a good contribution from increased productivity and also a favorable mix inside the business area. So with that, we move over to Page #10, and I leave over to you, Lars.
Thank you, Mattias. Adjusted EBITA decreased by SEK 94 million compared to the last -- same period last year, while the margin increased by 1 percentage point to 21.6%, more than offsetting the impact on the lower sales of about 10%.Adjusted for currency, gross profit had a negative impact of 0.1 percentage points on the margin there and due to the lower volume, a very different VA mix compared to last year. As mentioned by Mattias, both ACT and SW have improved GP margins in the quarter. OpEx is down SEK 237 million year-on-year. But this positive development could only partly offset the negative volume effect on the margin year-on-year. And the OpEx contribution to the margin is consequently minus 1.3 percentage points. As you can see, we continue to have lower levels of depreciation and amortization due to asset rolling off the balance sheet. And consequently, G&A adjusted for FX is impacting the margin by plus 0.3%. Currency had a positive impact of 2.1 percentage points on the margin, mainly due to both the revaluation of operating receivables and liabilities in foreign currency. This is affecting other OpEx by plus SEK 125 million year-on-year, mainly due to negative devaluation last year with a negative impact of minus SEK 112 million in that quarter. The impact in the P&L this quarter was actually plus SEK 13 million. And as you know, with the way of guiding on future FX impact, what we can say is, if the closing rate in December will stay on throughout 2022, we would have a support of around 2 to 3 percentage points on net sales compared to the average rates in 2021, given the even mix we expect. All in all, this resulted in adjusted EBITA of SEK 1,723 million and a margin increase of 1 percentage point. Over to Page 11, please. Free cash flow continues to be strong. Even if we don't reach last year's level that was impacted by the high level of operating profit and prepayment. This year, working capital had more of a normal seasonal pattern with increased receivables after higher year-end deliveries, not fully offset by reduced demand. All in all, the free cash flow amounted to SEK 1.3 billion in the quarter. This is a result of a healthy operating profit in combination with continued good focus on working capital. Working capital days continues to be well below 100, and we are now at 88.2 days, down more than 40 days from the peak in Q2 2018. You also see a continued strong operating return on invested capital, where we are at 19.4% on a rolling 12-month basis, and we expect to reverse the trend, the long-term trend on that net debt that has started to move more into normal territory. Let's move to Page 12, please. Net debt was positively impacted by the free cash flow, taking us to SEK 3.6 billion, and this was after the payments made regarding acquisition of Talis in Q4. And if we adjust for pension liabilities, we are at SEK 0.2 billion. This brings us to a leverage of 0.5x EBITDA. And if we adjust for pension liabilities, the leverage is 0x EBITDA at the moment. Cash amounted to approximately SEK 4.1 million at the end of the quarter. Let's move to Page 14 and over to you, Mattias.
Yes. Thank you, Lars. I will just briefly summarize the key takeaways for the fourth quarter before we move to Q&A. And we have a very good activity level and progress on strategy implementation, resulting in high customer satisfaction, healthy organic growth in all business areas and regions, which makes us expect organic net sales growth to be in the upper part of the 4% to 6% guidance range that we have issued when it comes to 2022.Margins also continued to improve, and we expect to be close to the same adjusted EBITA margin for full year 2022 despite the unsupportive BA mix that we have already highlighted a couple of times. The cash flows are strong, and we have a solid financial position overall, enabling us to increase the activity when it comes to M&A in strategic and selected manner. So all in all, this makes me looking forward to the coming quarters with further improvements in line with our strategy, and in order to deliver more value to hospitals, clinicians and to patients. And once again, thanks to all my colleagues around the world for a really great work during 2021. With that, I open up for questions.
[Operator Instructions] And the first question is from Karl Norén, Danske Bank.
So 3 questions, if I may. Firstly, on your Capital Markets Day, you guided for relatively flattish organic growth in acute care therapies in 2022. And I was wondering if this picture has changed since? Or is this still your best assessment? And then in Surgical Workflows, you state thinking now that the order book is more than 30% higher than the same period last year. I was just wondering if you currently see any problems for customers are not able to take deliveries due to Omicron or personnel shortages or anything other than that could impact net sales or deliveries in the first half of '22? And then just lastly, on the cardiovascular side, what kind of trends you've been seeing in January? You seem to be doing relatively well despite Omicron in December. So I'm just wondering if things have changed now during the last month, basically.
Yes. No, thank you. Tying back to the Capital Markets Day outlook for Acute Care Therapies. You can say still from a volume perspective, the outlook is rather flattish here. So the growth will come from other parts of getting in 2022. From a margin perspective, though, things look maybe a little bit better than we expected at the Capital Markets Day, I would say. So that's the only small change compared to November last year.When it comes to Surgical Workflows, it's correct that the order book is 30% higher, right now. I wouldn't say that we have any material issues in terms of customers being able to receive deliveries and so on. We do expect though that this whole supply chain situation both when it comes to availability of materials and components from suppliers but also when it comes to logistics operations, it will be another 6 challenging months ahead of us here. So we don't guide in terms of the order book materializing to net sales, but no significant disruptions right now, but -- so we expect to continue to work hard on this for the next 6 months, basically. When it comes to product for cardiovascular elective surgeries, we see rather okay development, I would say, given the Omicron wave that's been going on. So we do expect this momentum to pick up further as the Omicron wave subsides, hopefully during the next month or so.
Okay. And then just a follow-up question on ventilators. You said that you saw a small increase in orders in late Q4. I'm just wondering if this was delivered in Q4? Or should we expect maybe a slightly higher delivery rate of ventilators in Q1.
I will not guide on exactly the delivery patterns in -- when it comes to ventilators and the pickup was more a reversal the negative trend from the beginning of the quarter. So you shouldn't read too much into that. When it comes to ventilators for 2022, we expect back to a normal prepandemic year, that's our outpatient scenario.
The next question is from Rickard Anderkrans from Handelsbanken.
Can you start off with helping us a little bit with sort of sustainability of the margin trajectory here for Surgical Workflows already well ahead of 2025 target here? What's the trajectory for ramping up sales costs? And can you help us a little bit there?
Yes, it's a really great development for Surgical Workflows in the fourth quarter, it doesn't materially change the message from the Capital Markets Day that we will send for quite some time now that once we get back to prepandemic levels in volume, this should be a double-digit EBITA margin business. So we expect that to be the case. Having said this, always, I think it's really great to see that the -- all the productivity work, the team at Surgical Workflows has been doing now for several years and especially intensified during the pandemic is really paying off quite clearly in the Q4 results. So we enter with a very strong order book and also with a really great level when it comes to productivity.
All right. It's very helpful. And the final one for me. Can you give us some flavor on your sort of the trajectory and ability to offset inflationary pressure here, the price increases? And also, if you can comment on the risks you see for component shortages here?
A little bit of color, possibly. I think it's -- we -- like everyone else, we do experience both disruptions that we've been able to mitigate so far, they haven't had a material impact on our operations and, hopefully, we can keep it that way. The team has done a great job so far, at least. We do see increases in component prices and material prices. If we look at the great work that has been done in the group in different categories, a lot of these benefits have been offset where we could see that that's kind of baked into the results of the fourth quarter as well. So this will be a, I think, a continuing fight. We are able to pass on a lot of the price increase as well. It's a rather complex environment though depending on which we look at from a geographic perspective and so on. And you should keep in mind that we have both products that are under longer-term contracts. We have some that are priced per tender and so on. So it's very difficult to give kind of a general picture. But if you look overall from a Getinge perspective, we've been able to pass on to customers a significant part of the increase. We expect to continue to do that and, at the same time, continue the active work with suppliers. So that's the best picture I can give on this part of the situation.
The next question is from Edward Day, Redburn.
Congratulations on a great year. Looking forward -- looking back to Surgical Workflows, maybe to put the question in a different way. Due to the work you've done in the last couple of years, as you say, you've accelerated growth a little, you've seen excellent operating leverage. Can you give us some more color on perhaps the product areas or regions where you've seen top line improvement in Surgical Workflows? That would be my first question. .And then certainly, the U.S. GPO win is certainly interesting. Can you remind me where you are with the other major GPOs in the U.S. And if with premier innovation that would be helpful.
Yes. When it comes to the first part of your question when it comes to the top line dynamics of Surgical Workflows. We've seen throughout the pandemic, infection control has been affected a bit less. Then if we look at the Surgical Workplaces as part of SW and also digital records, we can see the other -- the opposite pattern right now with great momentum when it comes to digital health and when it comes to Surgical Workplaces.Geographically speaking, it's rather broad-based, difficult to call out any particular area, I think, over longer period of time at least. So it's very, very nice to see a broad-based comeback. There's some resilience when it comes to infection prevention and good growth in the other parts of Surgical Workflows. On GPOs, I can't give you, on this call, any granularity when it comes to the contract situation with the -- regarding GPOs, but something we would have to come back, we haven't disclosed that yet.
Fair enough. Just a quick follow-up. Can you remind us what your market share in the U.S. in infection control?
Well, in the infection control, we have the part of sort workflows where we have had the best over the years. So I would have to go back and look at the slide exactly, but we have a stronger market share in the infection control compared with the Surgical Workplaces and digital health.
The next question is from Kristofer Liljeberg-Svensson, Carnegie.
Okay. It's Kristofer from Carnegie. Sorry I couldn't hear you. Three questions for me. First, could you comment on the plan for further expansion of the BetaBag production and whether you have taken a decision if this will be China or France? The second question is if you have hedged away part of the positive FX impact due to sudden sales? And my final question is, if you could remind me how much extra boost over normal that you have from ventilator sales in the first quarter 2021. And it will be helpful if you can give a similar figure for the second quarter as well?
Yes. Thanks, Kristofer. When it comes to the first question on BetaBags, we have not decided where the next step and expansion will be. That the decision, I think, for the first half of this year, but no, we haven't got to put down yet. When it comes to ventilators, the full year number for this year was 13,482 ventilators. In Q4, we had 2,822, which is almost 6,000 less than back in 2020, and it's also a little bit lower than 2019. I don't off the top of my head, remember the numbers for Q1 and Q2. We'll have to go back and look at that. And when it comes to the FX, I'll pass that question to Lars.
Yes. So the question there on our hedge. I can say that we are very -- we have not hedged very much at all going into 2022.
Okay. So did you say cost could impact 2% to 3% or around 3% in current operates.
As I mentioned there, compared to the average rates that we had in 2021 compared to say, closing rate at the end of 2021, there is around 3 percentage point impact on top line given the geo mix and the currencies that we have in our revenue. Then after you all know what has happened after year-end here, but house -- so then our view on the future currency rate that is not committed to -- it's more for you. You know that even better than I am.
The next question is from Victor Forssell, Nordea.
Circling back to one of the first questions here today. You commented on rather flattish volumes for ACT, but also that workflows will be a bit more challenging in the coming 6 months from here. So just trying to circulate here what that means in terms of net sales here in first half of the year. Does that mean that we will expect even stronger Life Science sales here? Or any sort of help here would be interesting to hear.
Yes. Thanks for the question. We don't give guidance on a quarterly basis here. We will remain with the 5.5% for the full year. And I did not say that it was going to be a particularly challenging first [indiscernible] work. It's an ongoing hard work when it comes to supply chain, but we don't know yet if it will have an impact on the first half of the year or not. So far, it hasn't really, but it's a daily side. So we refrain from giving guidance on the quarter or half year basis.
No. Understood. And sorry if I misinterpreted that. And just on the ACT margins, I think you commented as well on that margins were a little bit better than expected. Could you provide some granularity on what you foresee there at least in terms of that statement? What's the...
Yes. It was only relating back to the Capital Markets Day, longer-term target for ACT, where we had a lot of questions, all from the Capital Markets Day and so I just wanted to reconnect there. We can see -- because we did say at that time in November that we wanted to come back once we have kind of closed out 2021, where we would have a best visibility of the situation. And we can see now that the long-term margin guidance for ACT that we gave at the Capital Markets Day was maybe a little bit shy. I think there is more resilience in the business than maybe we expected from a margin perspective, back in November.
Understood. And just finally, it would be interesting to hear your thoughts now on the aftermarket opportunity for Critical Care, how you see that play out already in 2022, especially given the placements that you made in 2020 of your ventilators?
Yes, I think that's one of the more exciting opportunity that we're working on now. We have a significantly bigger installed base than we did 2 years ago, a bigger portion of the installed base is connected as well. So we have a completely different possibilities to work with customers when it comes to the digital part of our offering. So everything from predictive maintenance and to remote monitoring further on remote support when it comes to decision-making and so on. So that's an intense part of the work that we're doing now together with the product experts in the business area and with our global sales team to make sure that we really have an intense dialogue with customers on the opportunities that is present. So we continue to be positive about the business lift when it comes to critical care that we -- going forward, we will have a larger portion of both service and spare parts, but also software upgrades and some of the digital solutions that we offer. But like we said at the capital markets that this hasn't changed that much things since then. This is something that we will see a gradual improvement from now and for several years to come.
Just follow up, but you can confirm there that indeed you have an invoicing opportunity this year from the 2020 installed base due to the warranty?
Yes, we -- yes, that opportunity will start to materialize. That's correct.
Next question is from Erik Cassel, ABG.
Many good questions asked and answered already, but I have some housekeeping ones left. So you mentioned in report the Sterile Transfer and bioreactors did not reach last year's order intake, but could you possibly provide some more color on the performance in Sterile Transfer specifically? And then also how much of the capacity for '22 that is covered by the current order book? Then secondly, could you briefly explain the relatively low sales cost this quarter. Is that, for example, driven by lower sales bonuses or something else? And then lastly, a question for Lars. On the revaluation effect in OpEx that provided quite a nice boost to your EBITA. You mentioned it very briefly in the report. So just interested if you could provide any more information on that effect.
Yes. Okay. Thank you. Maybe Lars, we can start with your question and then I come back to the others.
Yes. Now when it comes to regulation, it's normal as in all companies, you have on internal flows, you have in different currencies than your reporting currency and then when in every closing, you will reevaluate those. And we had large impact last year when the Swedish krona was weakening there, where we then had significant impacts in the quarter, and also high volumes went some to the balance sheet, very much connected to the high volumes of ventilators. So that was the main reasons would impact last year. And this year is actually the balance sheets have been decreasing and also the currency movement is much more. So there is very little impact in the result of these of 2021 Q4, the main impact was actually late in 2020...
Thank you, Lars. When it comes to the Sterile Transfer bit, I just wanted to remind everybody then that the -- there is some lumpiness when it comes to order intake of this business. Several of our customers place larger contracts for longer periods of time. So that's the reason for the lumpiness when it comes to order intake. Our outlook when it comes to sales and the picture we gave at the Capital Markets Day hasn't changed in any material way. We do expect continued strong growth when it comes to our Sterile Transfer offering, partly driven by continued vaccine program rollout, but also more and more business related to normal production development of biopharmaceutical drug suite. So we stand by the picture that we gave at the Capital Markets Day when it comes to this part of the business.
The next question is from Craig Mcdowell, JPMorgan.
The first one is around the order backlog and in particular, in Surgical Workflows. How should we think about the margin on the backlog contracts that you're delivering in 2022, which signed 6 to 12 months ago when input costs were at a very different level. Is there any hedging or a mechanism in those contracts that protect you against this? Or do you have to swallow the inflation in your margin? And then secondly, thanks for the indication on the currency impact to sales. But can you give -- based on year-end spot rates versus 2021 average, can you comment on the impact of currency to EBITA margins in 2022?
Yes. Thanks for your questions. I think they're both currency related. Yes, I'll hand those over to you, Lars.
So when it comes to our offering and the order backlog, our sales organization worked very extensively to ensure that they have that cover when they do offering to the customers. So we're monitoring track of development in raw materials and also other impacts. So we -- when doing offers to customers that is handled in the pricing in the offering set. So I think we are rather well in line with -- on that. And the second question, I missed a little bit. Could you please repeat?
Yes. So thank you for the indication of the currency impact of sales. But I'm wondering whether you can give the same sort of indication at the EBITA level?
No, I will not do that. But what I can say is that, as you know, we have a very heavy exposure towards the U.S. dollar both on top line but also on the bottom line. So that -- if the U.S. dollar strengthening versus SEK, that has a positive impact all the way through. But more than that, I will not guide you on.
Okay. Just one more clarification then. I think, Mattias, you said you expect an adjusted EBITA margin at a similar level in 2022 as was in 2021. Can you just comment on that's based on FX rates at the end of the year. Is that correct?
That was meant to be in organic guidance...
Okay, so that's underlying.
The last question is from Virendra Chauhan, AlphaValue.
[indiscernible].
I can't hear your question. You may be on mute or it wasn't clear. Who are you letting through here?
You know, the last one in the queue.
Yes. But who is it?
I think it was...
This is Virendra from AlphaValue and I have a question. Can you hear me?
Yes, yes, we can hear you now.
Yes. So I wasn't really sure if I was to call out, but yes, I have a question. And so my question, one was on margins, which I think we just touched upon in the previous answer, but just so that I understood it correctly, 2022 margin should at least be level with the 2021 level? Is that the straight assumption? That would be the first question. And the second one is regarding the recent recall that we saw with respect to the IABP which was also recurrent older issues related to that product. So my question is more about how confident are you regarding the quality system in place given that we saw this issue pop up in December. And now this extension, is there any possibility of this recall that you saw in December or was flagged in December, growing up into a bigger issue with regulatory bodies?
Okay. When it comes to the first question, it is correct that we believe that the adjusted EBITA margin organically will be in line in 2020 with the outcome on 2021. So that is correctly understood. When it comes to the recent recall on balloon pumps, this is related to a product that was developed and released in 2011. There has been a number of recalls historically related to this, and this is another one of those. We don't indicate or we cannot guide on what the future may bring when it comes to recall. But there are areas here that we are reinforcing when it comes to this platform to make sure there is a more stable product. So that's continued ongoing work but I really cannot guide on what you will see going forward. I want to point out that it's not quality management system related like the early issues that we had when it came to quality and remediation in this part of the business. And we started already back in 2013 based on a dialogue with FDA remediation program. Then we had the warning letters in 2018 related to this business, which were more than quality management system related. Now this has been a pure product-related recall. And I really cannot guide whether this is the last one or whether we will see more going forward.
Just to follow-up. So the question is that do these kind of -- have these kind of events in the past led to think like FDA decrease or are these 2 unrelated?
Sorry, I didn't quite catch your question. Can you repeat, please?
Yes. So my question is that has these kind of events in the past also led to things like FDA decrease and the remediation that we saw? Or are these completely different events?
No, the -- when you look at the cardiac assist part with the balloon pump product is belongs to, we've been on this remediation journey. Just to refresh the whole journey then. When Maquet at the time entered into the warning letter started remediation in 2013, we expected when the Consent Decree was activated in 2015 that, that part of the business was remediated. When I joined in 2017, we did a round of internal audit ourselves in the different factories. And then we found that there were still issues related to the quality management system at the relevant side when it comes to cardiac assist. So we started the remediation program ourselves with this. Then when we had thought at this remediation work, we did have FDA inspections in the 2 factories in Denmark and in Fairfield, New Jersey, which led to the warning letters. And then under those warning letters, we have been on the remediation journey and work that is still to be completed really. So it's -- I'm not sure whether you're asking about the quality management system remediation or if it's product quality related. But all I can say is that the work is still ongoing. We expect to finalize the remediation work sometime during 2022. And we should then be in a completely compliant state when it comes to our quality management system. And we're also gradually working with anything that comes up in terms of customer complaints related to the product itself. Of course, we address either through a recall through Q2 terms.
There are no further questions. I hand back to the gentleman for some closing remarks.
Yes. All right. Thank you very much. Thanks for listening in today. So key takeaways, I would say, from today's release of our fourth quarter report, is that we have seen a healthy organic order growth in the fourth quarter. .We continue to improve our margins, and this has translated also into strong free cash flow, improving our already very solid financial position. We entered 2022 with an order book that is about 20% higher than the same period last year. Very good momentum, and we look forward to continuing to work closely with our customers throughout 2022. So thank you very much.