Good afternoon. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the Biesse Full-Year 2023 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Pierre La Tour. Please go ahead, sir.
Thank you. Good afternoon, everyone. So as some of you may know, this is my last conference call with Biesse. And I'm here in Pesaro, at Biesse's headquarters. I'm joined by Nicola Sautto, who, as of tomorrow morning, is Biesse Group's new CFO and Investor Relator. So, of course, I welcome Nicola, and wish him all the best for the coming years. Regarding the financial draft, 2023 financial statements have been approved during today's board meeting. Let me just provide you a quick summary. And then, of course, we can switch on to any questions that you may have. Now, starting with the highlights regarding the fourth quarter.
As you may have read from the press release, Biesse closed the fourth quarter with consolidated net revenues that were just below EUR 190 million. This is a decrease of some EUR 20 million versus the previous year's fourth quarter, and presents approximately a 9% drop in terms of revenues. Moving on to EBITDA, the fourth quarter closed with just over EUR 14 million. This is below 2022's fourth quarter that was just under EUR 20 million. So this is a drop of some EUR 5.5 million, which represents approximately 28% in terms of reduction. EBIT adjusted closed at EUR 6 million.
This is an improvement of EUR 1 million versus the fourth quarter of 2022. So it's a 21% increase. Moving on to the full operating results, so that is including non-recurring events. We have a negative EBIT of approximately EUR 4 million, which compares with just under EUR 7 million in the fourth quarter of 2022. Now, this is due to some significant accruals that we decided to provision for. We had already started, you may remember, in Q3 of 2023, setting aside reserves for a restructuring that encompasses our activities in Italy, and in Q4, we completed that accrual, and on top of that, we also reserved for the closure, so the, let's say, the exit from the Russian market.
So these are the main non-recurring items that are impacting our operating result in Q4. Moving on to our net result. Net result for Q4 was negative by some EUR 6 million. This compares with a positive net result in Q4 2022 of some EUR 5.5 million. So overall, the variation is close to EUR 12 million. And of course, the underlying reason behind this is, of course, the accruals that have been set aside. If we move on to our full year result. So Biesse closed 2023 with revenues of EUR 785 million. This compares to EUR 822 million in 2022.
And, so there is a reduction in terms of revenues of close to EUR 40 million, which in turn represents 4.6%. - 4.6%. EBITDA closed at EUR 77 million. So, this compares with almost EUR 91 million in 2022. So, EUR -14 million in terms, in absolute terms, and - 15% in percentage terms. EBIT adjusted closed at just over EUR 40 million, and this compares with close to EUR 48 million. So there's a EUR 7 million reduction, which is approximately a 15% reduction. Moving on to the full operating result, which bears the brunt of the accruals that we made. As you can see, there's a significant difference between EBIT adjusted and EBIT of approximately EUR 16 million.
Operating result was EUR 24.2 million. This compares with just over EUR 50 million back in 2022. Finally, in terms of net profit, we closed the year with EUR 12.5 million. EUR 12.5 million compares with just over EUR 30 million back in 2022. If we move on, switch over to the balance sheet, we closed 2023 with a significant, still very significant, very strong Net Financial Position. A positive Net Financial Position of EUR 93 million. This compares to the previous year's Net Financial Position, which was close to EUR 117 million. During the year, we have absorbed cash for close to EUR 24 million, and this represents a 20% reduction.
Nonetheless, overall, our net financial position remains very solid and very strong in the course of 2023. This is, in a nutshell, our performance during the year. For those of you who have had a chance to read the press release, the overall comment is that, of course, 2023 has been a difficult year, especially in terms of order entry, and so, of course, the combination of geopolitical tensions on the one hand, and on the other hand a tightening overall global monetary policy, have led to a cooling of demand, and this, of course, has been reflected in lower order entry.
On top of these phenomena, of course, if we look at our domestic market, which benefited from a boom in, especially in 2021 and 2022, there was a contraction in our domestic market, and this is mainly due to the reduction of government incentives that somehow distorted our domestic market in previous years, so all these factors altogether have resulted in lower order entry, which for 2023 stands at just under EUR 670 million. EUR 666 million, to be precise, and this compares with an order entry of EUR 768 million in the course of 2022.
So the result of this being that our year-end backlog went from EUR 385 million at the end of 2022 to EUR 278 million at the end of 2023. Now, in the course of the year, of course, we have continued to implement the so-called One Company project. And of course, this is a multi-year project that is and that will bring about a greater level of flexibility, higher speed, and of course a reduction, ultimately a reduction in the structure that is based in Italy, and more specifically, at our headquarters. And at the same time.
A strengthening of our structures around the world, so of our subsidiaries, that will allow for a greater level of independence and who will progressively have a higher degree of responsibility for delivering in their own markets. In the course of the year, we also worked on the acquisition that was completed at the end of January of 2024 but this was, of course, something that started in the summer of 2023 , and that saw our efforts in the second half of the year, and of course, this acquisition will have a significant impact starting this year in 2024 and for future years, and at the same time, of course, we continued to promote innovation and research.
And we continued to invest in our activities in order to ensure the future of the group. So this, in a nutshell, is my comment as far as 2023 is concerned. I think we can now move on to the Q&A part of the call. So I am at your disposal if you have any questions that you would like to tackle, if you have any doubts, or if you would like to dive a little bit deeper into our numbers. Thank you.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star, then one on their touchtone telephone. To remove yourself from the question queue, please press star, then two. Please pick up the receiver when asking questions. Once again, if you would like to ask a question, please press star then one at this time. And our first question comes from Luca Riboldi of Banor . Please go ahead.
Hello, good afternoon, and thank you for the call. I have a couple of questions. The first one is regarding the implementation of investment in India. Some time ago, when we met, we were preparing or supposed to invest some money in the development plans in India, or increasing the existing plans in India. So if you could update where you are in this point, and how do you see the market behaving? Second question, talking to some of your customers or the main customers you have in Europe, we have heard that there are some new competitors in your business, coming out of China.
I would like to understand if it's really something we should do. Not worry, but at least we should, considering when we look at the Chinese, or you think at the moment there is no chance for them to compete in Europe or even in Asia? Thank you very much.
Okay. Thank you for your question. So let me start from India. I reiterate what I had anticipated and what you were referring to. So yes, India is very much a strategic country for us. It's and of course our plant in India is very much a strategic investment. Now, the Indian plant has been consistently growing, and we are extremely pleased with the performance of our operations in India. Now, of course, the size of the Indian market is, for the time being, still relatively small, and so it does not have a significant impact on our bottom line, nor on our top line, for that matter. However, our investment in India has primarily been a, let's say, a production hub thus far, for export.
Although we're seeing some very encouraging results, and of course, over the years, we expect the Indian domestic market in India to develop significantly, to move away from what is today a highly manual processing, especially of the wood market. Of course, and so we expect to start reaping significant benefits from this market in the coming years. Now, regarding India, yes, we have a very successful operation there, a very successful plant. Unfortunately, we are still, until today, renting our facilities in India, and the objective is to invest and to have our own wholly owned plant in the future.
So in our plan, we have foreseen a significant investment in terms of PP&E, so the production plant and equipment related to India specifically. So that is very much one of our one of the stepping stones in our long-term plan. Moving on to competitors from China. Now, yes, we do face some pretty fierce competition from Chinese competitors in the Wood segment. And Chinese competitors are coming up. There's evidence of that. So they started off a few years ago, and they weren't a threat, and over recent years, they have been developing successfully and they have been pursuing an aggressive export strategy, probably government-backed. And so they are on our radar.
In particular, two competitors, both listed companies, in China. One is Nanxing, and the other one is KDT. These are players in the Wood segment. I want to emphasize this. Now, as far as our main markets are concerned, for the time being, their presence is not significant. So if we look at European and let's say the European and the North American markets, their presence is still marginal, but they have been moving very aggressively in their own domestic markets, so the China market, and they have been moving aggressively in Asian markets, by and large.
Now, of course, with the latest developments, we have been de facto giving away the Russian market to them, because we can no longer, of course, export to Russia. So they have moved in, and they are basically they have no competitors in Russia, so they're just taking over the full market there. Now this mainly impacts Wood. There are, of course, also competitors in the Glass and Stone businesses, although I would say their presence is less relevant, especially on international markets, and so we have a healthier competitive environment in those business segments versus Wood. Now, again, just a final comment. China, for us, is very much a marginal market. So China represents approximately 1.5% of our net sales.
Of course, we are much less hit versus our main competitors, which is HOMAG that has a very significant historical presence on the Chinese market, and that is where HOMAG is currently facing fierce competition from Chinese competitors.
Thank you very much. Very clear. Just a follow-up question about the competition in Asia. Considering that you are going to have a much higher production in the Indian plants, if you have to compete in India with the Chinese.
You think you can compete on the Wood segment, of course, I'm talking about. Do you think you can compete at the same level or even better? And do you think that talking to some of your customers, the problem of the Chinese competitor seems to be they've known the maintenance business behind the selling of the machine. So probably it's difficult for the moment for the Chinese to enter the European and the U.S. market, but I would like to understand what is your view also on this point. Thank you.
Yes, I agree with you. The reason why their presence is still marginal in, let's say, European and North American countries is that they do not have a service network. So, of course, we have a competitive advantage there. Now in terms of cost effectiveness and cost competition versus Chinese manufacturers in India, at the time, and I'm referring to 2019 , when we decided to close our operations in China, it was specifically, we had made a comparison between production costs from our Chinese plant versus our Indian plant. And our Indian plant had some significant savings, was significantly lower in terms of production cost versus our Chinese plant.
And so this was one of the reasons that led us to the decision to close our operations back in 2019. So to answer your question, yes, I believe we can effectively compete with Chinese manufacturers on the Indian market with our given our manufacturing base in in India. Now, of course, a lot also depends on government incentives. Now, in the Chinese companies benefit from all kinds of hidden incentives that are provided by the Chinese government. Now, to what extent are they willing to go? This is an open question. But overall, I'm quite confident that we can effectively compete with the Chinese on the Indian market.
Very clear. Thank you very much.
Thank you.
Once again, if you would like to ask a question, please press star then one. And our next question comes from Andrea Bessone of UniCredit. Please go ahead.
Good afternoon, everybody. Well, as the first thing, I would like to thank Pierre for your great job in these years and your kindness that you always show in front of us, and I wish you the best for your next opportunity.
Thank you.
As a question, I would like to go a bit through the levers that Biesse can use in this 2024 to sustain its economic performance, and if these levers can help.
Sorry.
No, no problem. In the coming, like, coming years, in the medium- term or also in 2024.
Okay. Now you've seen, we've just commented on our 2023 results, so of course, the most evident result is the, sorry, the most evident phenomena that I highlighted in our numbers is the accruals that we have set aside for restructuring. Now, those will have an impact this year. And so, the, let's say, the impact is in terms of headcount reduction in Italy, and this headcount reduction, of course, will generate savings in the course of the year, and of course, these savings will be fully visible in 2025. You will have the full year impact of these, let's say, headcount reductions in Italy.
This is, I would say, one lever that we can expect to see in the course of the year. Another lever is, of course, the addition to our figures of the GMM Group. So the GMM Group represents net sales of approximately EUR 120 million. So between EUR 110 million and EUR 120 million in terms of net sales. This is an important lever, and of course, the GMM Group is engaged in the Stone business and in the Glass business. And also, thirdly, in what we refer to as the other materials business.
So the acquisition is coherent with our strategy, which is, of course, to strengthen the non-Wood businesses, because we believe that we have an established leadership in the Wood business, where we are de facto number two in the world after HOMAG, which is the undisputed leader, of course. But if you look at our figures historically, you know, 70% of our revenues were coming from Wood, and the remaining 30% was split between Stone, Glass, and other materials.
So we want to grow in these other business segments, where we believe that these other business segments have some pretty interesting features from a competitive level point of view, because they tend to be, in some cases, less crowded than Wood. And so, of course, there's an intrinsic advantage, and we believe that we can express a good potential in those other businesses. Thirdly, I think that the third main lever is of course the progressive implementation of the One Company project. Now, the One Company project started back in 2021.
So 2024 is really the fourth year of the implementation of the One Company project. And of course, this umbrella project brings with it a whole series of streams that have the objective to really make the group lighter on the one hand and faster on the other hand. So our bottom line should start expressing some of this potential in 2024, although of course not only partially still. But nonetheless, we should be in a better position to react to market changes, given the actions that we have put in place over the past three years. I think that the main levers are these three levers that I have just commented.
Okay, perfect. Many thanks.
There are no more questions at this time.
Okay. So if there are no more questions, I thank everybody for attending this call, and, and of course, we are at your disposal in case you want to further discuss. You know how to reach us, so we are, w e're here, and we're willing to answer any questions you may have. Thank you very much. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephone.