Okay. Good afternoon again. I think we can start. Welcome to our teleconference for the 2022 preliminary results. I'm Alexandru Stânean. I'm the CEO of TeraPlast. Together with me are my colleagues, Ioana, our CFO and Alexandra, our IR manager. Let's get right to it. First of all, very briefly about us. TeraPlast Group comprises of the mother company, TeraPlast, listed on the stock exchange for 15 years. One of the leaders in what everything has to do with plastic pipes for infrastructure and inside the building. Cable protection systems through our existing product range and new product range, as well as the compound division where we supply most of the Romanian cable industry with insulation, but also to a lesser extent, other applications.
TeraPlast Recycling, which is in top five European recyclers of rigid PVC and one of our main suppliers of raw material. TeraBio Pack, our new company, active in the flexible packaging, both biodegradable and compostable as well as, let's say classic polyethylene packaging with or without recycled content. TeraGlass, which is our subsidiary producing windows and doors. In relative terms, the largest exporter in the group in percentage of exports in the turnover. 2022 as well as 2021 have been full years for us. We have commissioned investments worth close to RON 220 million, which enabled us to launch in the market new products like NeoTER which is a new brand for underfloor heating, hot and cold water, for inside the building applications.
TERAduct, which are ducts for fiber optic protection. We increased capacity in TeraPlast Recycling. We are ramping up TeraBio, the new factory for packaging as well as increasing the capacity on infrastructure products in polyethylene and in PVC which will enable us to aim for the top position in all segments of infrastructure products in Romania as we control right now as leaders the sewage market. All these investments contributed to TeraPlast becoming the largest polymer processor in Central and Eastern Europe with a production capacity around 100,000 tons per year. Our vision aims at delivering double-digit growth each year through organic as well as M&A activities. In order to do this, we are investing continuously.
We are diversifying our product portfolio, also we keep in mind, an eye on sustainability by integrating sustainable solution in our business and in our products, especially through the use of recycled material. What we are also aiming at is the international development. We took steps towards that goal in 2022. We launched logistics center in Hungary to better supply our customers there. Everything we do, we do with the discipline in capital allocation because we are, basically paying a lot of attention to the, to the shareholders' money.
We aim to deliver performance above market level no matter if the market is good or not so good, because one of our goals is to be market leaders on every segment that we are active on, which implies constantly increasing our market share. Our business model has proven its resilience as we have strict monitoring of risks, especially credit risk, but not only. We have a worldwide supplier base which enables us to be quite flexible and take advantage of various differences between the geographical markets in raw materials. We have a brand-new factory which enables us to be competitive in terms of cost due to the high productivity of our machines. We are having a diversified product portfolio and we aim constantly at achieving cost leadership for our products.
Our strategy is based on the huge potential of the infrastructure market, where according to a study by EBRD, Romania needs to invest EUR 20 billion in expanding its water and sewage networks in order to comply with the European Water Directive. This need has been in the market for some time, but now also financing, consistent financing has been allocated for it. Namely, total budgets amount to EUR 8 billion plus. They comprise of the remainder of POIM budgets, which is allocated by the European Union, Recovery and Resilience Program also by the European Union, and Anghel Saligny Program, which is by the Romanian government. Due to the fact that we increase the production capacity, we are in a very good position to serve this increase in demand.
We are keeping an eye not only on the infrastructure market, but also on other markets through the diversification of the portfolio, which enables us to, let's say, spread the risk throughout various product groups. 2022 has been a year full of challenges. However, these challenges have proven to be not as acute, I would say, as they could have been. 2022 is still the second best year in the Group's history. Although, again, it was challenging, it has not caused us to change our strategy. We feel that all the premises are there for our growth. The money for infrastructure works are still there. The packaging market still has a constant shift towards biodegradable micro compostable solutions. Therefore, we are committed to delivering on what we have promised. We keep investing.
For this year, we are going to invest RON 100 million in two, let's say, facilities, the stretch film factory, as well as the new photovoltaic power plant. Again, our aim is to become leaders on all market segments that we activate on. As I said, the challenges of this year are, let's say, mostly connected to what's going on in Ukraine. The war there has caused tremendous shifts in the raw material market, which put pressures on our margins, which in turn have been reflected in our financial results. Also, we saw below expectation infrastructure works. Of course, the increase in interest rates accounted to over RON 8 million in additional costs for us, which of course affected the bottom line. However, as I said, nothing fundamental from the premises that we built. Our business scenarios have changed.
We so far are committed to carrying on as planned towards the development of the group. The financial results amount to an increase of 16% of the turnover. This increase was generated by the inflation because volumes have decreased by 4%. As I said, we had pressure on the margins, which meant a reduction of 29% of EBITDA with an EBITDA margin of 7.4% decreasing from 2021 margins. These, let's say, extraordinary pressures are going to slowly disappear. We'll get to the perspectives a little bit later. In terms of, let's say, the work that we have done, we saw a 17% increase in the meter of pipes that we have produced. We have produced 24 million meters of pipes, which amount to more than half the world's circumference at the equator in pipes that we covered with the production of last year.
We have an increase of 20% in the number of doors and windows that we produced. We have an increase in the tons of flexible packaging, but this is normal because we are at the start of this business. We have increased the amount of recycled material that we have processed. As I said, the pressure on the infrastructure market caused decreases in the number of fittings and independently of the infrastructure market, also the quantity of compounds that we produce have decreased. If we look through our business segments, we can see that the installation has even exceeded the record year of 2022 in absolute terms in EBITDA. Okay, marginal increase, but still an increase. We see a depreciation of the results, especially in the compound market, where the pressures on the margins have been extraordinarily high.
We reacted to a large extent in order to not to have an effect on the market share. Also the negative impact of the flexible packaging ramp-up phase, which incurred minus RON 11 million in EBITDA. I think that we hope it's over and towards the second half of this year, we will see a positive contribution to the consolidated EBITDA from this segment. Let's say for the whole year to see the positive contribution starting with the second half. Also what I would like to point out is that our development also is centered on the sustainability of our growth. We have, I would say a minimal footprint, CO2 footprint, as calculated on Scope 1 and 2, and this year we are going to calculate and make public Scope 3 emissions.
In order to offset these, we are investing heavily in the production of energy for self-consumption with the extension of the photovoltaic plant. We are increasing the amount of biodegradable packaging that we put on the market. It is to be noted that this type of packaging has a 95% lower carbon footprint than the classical packaging calculated throughout the life cycle of the product. We are integrating more recycled material in our products. We are increasing the capacity of the recycling business, and also we are very driven towards digitalizing as many aspects of our activity as possible in order to have a positive impact on our carbon footprint.
Having this in mind, we are aiming at close to 90,000 tons of products to be sold throughout this year, which will cause almost 20% increase in the turnover to close to RON 850 million and an EBITDA level of RON 75 million for this year. As I said, we are continuing our plans to develop by investing RON 100 million in the stretch film factory and the new photovoltaic plant. We are basing our budget on a very strong infrastructure market where we are going to start seeing massive deployments of funds out of the EUR 7 billion that are allocated through the existing budgets, European or national budget.
Window and door division is going to profit from the new renovation wave, financed by European money. The funds for this for this financing are EUR 2.2 billion. Flexible packaging market, it's a consistent market in Romania worth close to EUR 300 million. We are focusing also on increasing exports for this market. The compound business is going to have benefits from all infrastructure investments, which are calculated at EUR 18 billion throughout Recovery and Resilience, various Recovery and Resilience programs that are going to be deployed in the market hopefully as soon as possible starting this year. That's why we are confident that we are going to see an increase in our activity and in our results.
I will let my colleague, Ioana, to get into some details on the financial side, and after that we are going to be happy to take your questions.
I will first point out that, the new products had a 5% contribution to the increase in turnover. By new products, we mean the flexible packaging, both the biodegradable films and the standard traditional polyethylene films. We also include here the tubes for fiber optics and for floor heating systems. It's only 5% increase in turnover generated by these new products last year, but these product groups are the basis for our increase in the following periods, having only 50% utilization rate, these production capacities. This increase, however, was offset by the decrease in volumes on our mature product lines.
Therefore, the increase in turnover, 2022 compared to previous years, was generated by inflation, so the increase in cost of raw materials mainly, which was passed in the market to our customers. This transfer of the increase in costs was only partial, was with some delay at some product groups, mostly windows and doors. That is why the decrease in the operating margins. For this year, however, the significant increase in turnover comes from the increase in volumes. We are talking of 24% increase in the volume sold. This increase in volumes is going to be on all the product groups. On installations, which is going to be still the growth engine of the group, the increase is going to be from infrastructure projects.
The most significant increase, namely, doubling of the volumes, is going to be at the flexible packaging product group. Here we are relying on the contracts that are already in force, both on the domestic market and foreign markets, both on the consumer segment, bags that we see in the traditional markets and on the industrial segment. For this year, we are targeting EBITDA that is slightly higher in absolute terms compared to 2021. However, we need to take into account that 2021 was the best year in the group's history. Like in all comparisons, it's important to have in mind the base. Given the challenging circumstances in the market, the percentage EBITDA is going to be, however, lower.
Considering the significant investments, that we've already put in function, RON 120 million, the significant investments that we are going to make this year, and the high cost of financing, the financial result, will be even increasing burden on our bottom line. Therefore, net profit, it's estimated to remain at 2%. Again, the biggest part of our business performed well. Comparing to last year, the installations and recycled PVC, had an increase, slight increase, in EBITDA as well. For this year, 2023, profitability is going to be higher at all segments. The biggest improvement being at the flexible packaging business.
This is due to the volumes and to reaching the break-even quantities by mid this year. Net working capital as a percentage of sales, it's gonna stabilize at 24%. Traditionally, historically, this is about 20%, 22% of our sales. This is a period, especially 2022, where we launched new product lines. We've built up inventory. We had receivables for sales that started sometime throughout the year. We are also launching the stretch film product line in 2023. Besides the impact of the new products on net working capital in 2022, we also had the impact of increasing prices, therefore, higher inventory, higher receivables.
Considering the RON 100 million investments this year, net debt to EBITDA is going to decrease to a level which we consider to be very comfortable. What we've done with the money last year, most of the operating cash was distributed to shareholders through dividends, while the fixed assets were financed through loans and subsidies. This year, the net operating cash is going to be similar to last year. While for the investment in fixed assets, again, we are going to use subsidies and loans, bank loans. The subsidies here refer to the investments that we've already put in function in 2022. It's subsidies that are going to decrease bridge loans.
The stretch film factory is also financed through state aid, 50% of it. The subsidy is going to be received after we put in function the facility that is in 2024. We are also waiting for an answer from the authorities regarding the grant for the green energy investment. To conclude, it was a challenging year, with significant volatility, with the shifts in the market demand. Still, the second best year in the history of our group for this year, though the challenges continue to a lesser extent we believe because we estimate the prices to stabilize. We are targeting volumes that are higher than in 2021, which was our best year. We continue to invest and develop.
Again, we are expanding into a new product line this year. Do you have questions?
Please, if there are any questions, feel free to either speak up or just write them in the chat. We'll be happy to answer them. Okay. If not, just to sum up for this year, we are going to have a year of significant increases both in terms of quantity as well as turnover, exceeding 800 and closing in on RON 850 million, EBITDA. Turnover, we will have a record EBITDA in absolute terms of RON 75 million. We are continuing our development. We are confident in the market perspectives, especially for the segments that we are mostly active on.
We are looking forward to seeing you in about three months' time for the first quarter results. Thank you very much, have a great afternoon