Okay, let's start. Once again, good afternoon, and welcome to the conference call for the results for the first half of 2024 for TeraPlast Group. I'm Alexandru Stânean. I'm the CEO of TeraPlast Group. Together with me are Alexandra, our IR manager, and Bogdan, our newest colleague, who beginning this week is the group CFO, replacing Ioana Birta. Welcome, and let's get down to business. The first half of 2024 saw a revised structure of the TeraPlast Group.
Besides the, let's say, traditional companies, TeraPlast, which is the mother company and the listed entity of the group, TeraPlast Recycling, one of the largest rigid PVC recyclers in Europe, TeraBio, TeraPack, and Opal, our brands for flexible packaging, and last but not least, TeraGlass, the windows and door producer in TeraPlast Group and the largest exporter by percentage of turnover. We have the new acquisitions that have started to show results in the consolidated financial statements, namely Palplast from the Republic of Moldova, which already had an impact, even starting with the first quarter and in the second quarter exclusively. The Freiler Polytech Group, comprising of Wolfgang... The Wolfgang Freiler Group, sorry, comprising of Wolfgang Freiler GmbH in Austria, Polytech, and Pro-Moulding the production factories in Hungary.
In total, after this acquisition, the group has reached close to over 1,100 employees and close to 200,000 tons production capacity, making us or confirming us as the largest polymer processor in Central and Eastern Europe. We had a market context that was, let's say, that had different fluctuations depending on the market segment that we are acting on. We have had a very positive evolution from the infrastructure projects in Romania. Infrastructure projects have gone very well, financed from government money as well as European money. Especially Anghel Saligny was extremely important in this first half of the year. However, if we go beyond the infrastructure market, the things don't look as good as we have expected.
We see a contraction in the private consumption , of construction material, most likely due to inflation, which means that residential works have slowed down, whether we talk about new buildings or capital renovations. And this has impacted the corresponding product groups for this market segment. Also, we saw, let's say, not necessarily positive evolution from the cable market, although we have managed to increase our market share and have good results from this product segment, namely the compounds. But this is not due necessarily to the evolution of the market, but rather what we did in the market. On the packaging side, we have again, somehow mixed evolutions.
In blown film, we see a slowdown, not necessarily a slowdown, but we don't see a significant growth in the market. However, we have very good results in terms of sold quantities from the stretch film, which has actually gone above our expectation in terms of quantities. Of course, we supported the growth of quantities for the stretch film by having an extremely aggressive pricing policy. Therefore, we managed to actually exceed the ramp-up speed of this business.
Also, we see some clouds over Western Europe in terms of demand for pipes, which is impacting Wolfgang Freiler business because there the situation is not as favorable as it is in our part of Europe, and this puts a lot of pressure on the margins. But it somehow balances out because we have comparatively weak polymer demand in Europe, which means that the prices of raw materials are going down, which is to some extent in our favor. However, as I said, Eastern Europe goes well. This applies for the Republic of Moldova as well, where we have stellar performance. We are well on track on doubling the turnover of Palplast for this year, of course, starting from a comparatively low base.
They are gearing up to start implementing European projects. So from Eastern Europe, the news tend to be extremely positive. Moving on to the next slide, we see that, the business segment evolution, compounds, although, let's say, decreasing as a percentage of the turnover, have a very strong, have a very strong, profitability. We see the increase in packaging generated by the, as I said, acceleration of, Opal, and, we have a decrease as percentage of the turnover from the window division, but this is due to our strategy to shift our focus from, the DIY market to, the custom-made market. And this has positively impacted our, our profitability from, RON -900,000, EBITDA.
We are in the RON +900,000 EBITDA, comparing the first six months of this year with the last year. Of course, we need to keep in mind that in the consolidated financial statements, the sales of the new entities amount to close to RON 40 million. And we still, as I said, we have a comparatively low turnover from comparatively low market prices for our polymers. Therefore, we don't see necessarily a positive sales to third parties of recycled material, because unfortunately, everyone is extremely excited about the recycled material, but it's just, it's just, let's say, an empty statement because at the end of the day, they are looking for lower prices, not necessarily sustainable solution.
However, we are not deterred in our strategy to provide sustainable solution for people and the environment. Therefore, we are continuing to promote the use of recycled material in our products, and we are well ahead of the curve in the European pipe producers in terms of the use of recycled products. For the flexible packaging segment, as I said, we see it's a mix, actually. Starting this year, we have the classic biodegradable and polyethylene bags that we had for the past couple of years in our segment. Here, we managed to drastically reduce the loss that we were producing last year. However, we come with the startup of the stretch film factory, which negatively impacts the result of this business segment.
And regarding the doors, we have a turnaround of this business based on the switch from the DIY market segment to the non-retail customers. Moving on to the next slide, everything that I told you means that we have increased our quantities to well above 50,000 tons for the first half of the year. Close to 60% increase, driven by organic growth, driven by the quantities, the huge quantities in our stretch film brand, Opal, and also by the consolidation of new businesses. In terms of gross margin, this has decreased as part of our strategy to increase our market share. It has decreased to 35%, which means that we have a turnover of almost RON 430 million for the first half of this year, of 34% increase versus last year.
We have an EBITDA that has increased 15% versus last year, of course, with a decrease in margin versus last year. Because of our drive to increase market share, and which means that, we are reducing our margins to give better prices for our products and to, again, increase market share. EBITDA margin stands at, six point three percent. Because of the non-recurring costs generated by the acquisition, by the integration of our subsidiaries in the group and aligning their accounting policies to IFRS standards, we have and the ramp up of stretch film factory, we have a loss for the first six months of a little bit above six million lei. However, we have been successful in implementing the part of our strategy about geographical diversification.
Namely, we have managed to sell on foreign markets, we call foreign markets everything that's outside Romania, of over 20%, 24%, actually, which is an all-time high since we divested the steel division. Romania stands still at 76%, but as we increase the businesses that we purchased abroad and increase the exports for the businesses that have manufacturing sites in Romania, we will grow sales outside Romania and reduce dependency on the Romanian market. Also, it's... I think it's more important to point out that the sales outside Romania have doubled in the first half of this year. Moving on to the next slide, which shows a little bit how we achieved this growth. Starting from...
On the base of the six months of last year, we had a decrease in prices generated by the decrease of the prices of the raw materials, as well as our pricing policy, a more aggressive pricing policy to increase market share. But this has been more than compensated by the increase in volumes, which resulted in an extra RON 81 million. We have the stretch film factory, which brings a very important contribution to the growth of sales of close to RON 28 million, and of course, the M&As, which have been consolidated for the last quarter, which are close to RON 40 million in terms of turnover. I will hand it over to Bogdan now to enter into some financial details, and I'll be back for the Q&A.
Thank you. Hello to everybody. We move on to the analysis of the results versus the budget. Due to the factors presented previously, namely the increase in volumes of installation segment and the stretch films and the M&As, the turnover is 13% above the budget and 34% above the similar period from 2023. The gross margin had a slight decrease as a percentage due to the strategy of increasing the market share and the use of production capacities. On the expenses side, we show an increase compared to the first semester of 2023, especially due to the M&A operations. Both the consolidation of the expenses of Palplast and Freiler Group, as well as non-recurring expenses of approximately RON 1 million incurred in the context of M&A.
Expenses with employees' benefits have increased both due to the salaries increase in 2023 and 2024, which are fully impacting 2024, the current financial year, as well as due to the integration of the 130 employees of Freiler Group and 27 employees of Palplast. The TeraPlast Group is in a very good position at six months, showing a 34% increase in turnover compared to only 29% that was budgeted for the entire year 2024. As I previously presented, the reasons are the increase in sales volumes and the strategic investments. I'm referring to the Freiler Group and Palplast, which had a significant positive impact.
Another positive aspect is the expansion of the export markets, where the sales have doubled, reaching 23% of the entire group's turnover. In the second half of the year, we remain cautious in the context of macroeconomic environment, macroeconomic uncertainties, and we maintain the conservative budget, but we expect to continue the positive trends that we incurred in first semester of the current financial year. Continuing the presentation with the activity segments, it can be seen that the installation segment contributes decisively to the growth of the turnover. We maintain an EBITDA of almost 9%. This is due to the expansion of the product range and the increased demand of the infrastructure works. The compounds segment presents a solid EBITDA of 9.7%.
While the window and door segment, due to the repositioning on the non-retail projects, we present a positive, significant evolution, generating a positive EBITDA of 3.9%. In packaging, due to the accelerated ramp up of the Opal brand, we have doubled the turnover. On the balance sheet, quarter two is the first one in which we consolidate Freiler Group. Consequently, there is a slight increase in working capital compared to December 2023. In fact, due to this consolidation, TeraPlast is incurring increases in the majority balance sheet lines, while the impact in P&L it's covering only the three months.
Due to the positive evolution of the group, as well as due to the consolidation of the Freiler Group's financial results, the debt ratio will drop below five at the end of the current financial year. Looking at the cash flow, cash flows, it can be seen that in 2024, TeraPlast paid RON 79 million for the acquisition of Freiler Group. Also, out of the RON 54 million budgeted for CapEx for this year, we already paid RON 24 million , mainly for the last components of the second stretch film line and the improvement of TeraPlast production capacities. The significant investment that will be implemented this year are the photovoltaic power plant and the implementation of the PVC pipe production in Moldova and Hungary.
In terms of subsidy, we collected RON 16.9 million in subsidy for investments in stretch film factory. Another very important aspect that I want to highlight is, or I want to mention, is the share capital increase, which is taking place in quarter three 2024. Both the capital increase and the collection of the subsidies will contribute to the significant improvement of the cash flows, and eventually the reduction of the debt ratio by the end of this financial year. Moving on to the questions. I see there are no questions, so Mr. Stânean? Okay.