Good afternoon and welcome to the conference regarding quarter three results of Teraplast Group. I see that we should be, give or take, all present. Therefore we will start. I'm together with Ioana Birta, who is our CFO, as well as Alexandra, who's our IR manager. Just a quick reminder. Teraplast Group has several business lines. Main one, as of now, is the installation business, where Teraplast is leader in the soil and waste segment. With the investment that we have made during the course of last year and this year amounting to more than EUR 20 million, we have now the production capacities to become market leaders in water and gas pipes, as well.
We have the compound segment, where we are mostly exposed to the cable business, where we have over 50% market share in cable insulation compounds, as well as a hefty component of recycled compounds for especially for window profiles. Speaking of recycling, there is of course the overarching business of Teraplast Recycling, which is vertical integration of the group. Teraplast Recycling is one of our major suppliers of raw material for the piping business as well as, in Teraplast Recycling we also produce compounds to sell through the compound division to third parties. As I said, especially window profile recycled compounds. The packaging business which is split between TeraBio Pack, our biodegradable packaging business, which was set up last year and began operating early this year.
Present in the biodegradable packaging market especially for, let's say, business to consumer use is the packaging that you can find in supermarkets and various shops for fruits and vegetables or carrier bags. TeraPack, which is the polyethylene packaging part of the business, especially exposed on the industrial packaging. Producing shrink film, stretch hood and this type of products. Last but not least, TeraGlass, our window and door division, the largest exporter by share of the turnover, with over 70% of its production being exported throughout Europe. Quarter three was a fairly busy quarter for us.
We have established as part of our international development strategy the Hungarian subsidiary in Berettyóújfalu, Hajdú-Bihar County, which is give or take right across the border from Oradea. This is going to constitute a logistic base for our expansion, our ongoing expansion to Hungary. During the third quarter also, the members of the boards were elected as well as the president for a new term of one year. We have terminated the real estate agreement with Alfa Construct Partners for the development of the project on our former location near the city center, because considering the evolution in the real estate market, our appetite to be exposed on that market as well has diminished. We are still open.
That land is for sale, and it is our intention to sell it to a real estate investor. We have no interest in taking part of the investment itself, so it's going to be a cash transaction. Also this quarter we launched the underfloor heating system NeoTer. Kind reminder and warm invitation to attend the Investor Day event, which is going to take place next week in our main production site in Sărățel. Last but not least, we have completed the assessment of the group's carbon footprint, Scope 1 and 2, which resulted in a total CO2 equivalent emissions per year of a little bit below 23,000 tons.
Although they are not comparable measures, these CO2 emissions are more than offset by our recycling activity as well as our solar panels. It is our firm intention that once we complete Scope 3 CO2 footprint assessment, also to come up with a carbon neutrality plan for the following years, but again after we finish Scope 3 assessment. Just a quick update on our major development projects that we have announced. We have the strategy and the focus to go abroad. Just two seconds please. In order to implement those plans as I mentioned, we set up the subsidiary in Hungary. We are going to open a logistics center and operations will begin even this quarter, namely quarter three, of this year.
The photovoltaic plant, the 4.5 MW power project that we announced earlier this year is going through the authorization phases. We estimate the start of the construction for this project to be the first quarter of next year. Till then to get all the authorizations for it. The stretch film factory is currently undergoing the specifications for the tender process for the equipment. Production for this project is going to start in the second half of next year.
On the M&A side, what we see in the market as opposed to the previous quarters, we see a decrease of the sellers' expectations, which brings us in a range that we feel that will bring value to our customers if we execute transactions at the current pricing in the market. Therefore, we are in a comfortable place to say that, based on the ongoing discussions, at least one deal will be closed during the first half of next year. We are going through a challenging economic environment. Engineering works where our infrastructure business is mostly present from the installation segment have decreased the first eight months by 3.8%, according to the National Institute of Statistics.
We still don't see any movement in water, sewage and gas projects financed through either Recovery and Resilience Plan or Anghel Saligny Plan. There is no, let's say, clear visibility when these projects will start. Also there are changes in the flexible packaging market, namely a contraction throughout its two segments, both a decrease in private consumption as well as a decrease in industrial production in the sectors which we have pursued homologation with the customers. However, we see this, let's say, situation in the flexible packaging market is hindering our road to reaching break-even point.
The energy crisis is still putting a lot of pressure and in keeping high or fairly high the raw material prices throughout Europe. The tight monetary policies means that the cost of debt is on a sharp increase. On the other hand, we don't see any pressure towards the increase of the prices, rather a resistance because of the energy prices towards the decrease of the price of raw materials. We are now in a phase where these raw materials are going through a very stable period with extremely low downward trend, but it's close to negligible, the downward trend, I mean. This is very poor for European prices.
All these factors combined resulted in a turnover of RON 563 million with a 25% increase. A decrease of 25% to RON 48 million of EBITDA. The main factor or one of the main factors that contributed to the reduction in EBITDA was the reduction of inventory that we enforced, I would say, quite aggressively, especially during July and August because the level of demand in terms of quantity is lower than that anticipated. Therefore, we did not want to have extra stocks in the event we will see a sharp decrease in the raw material prices. This decrease is underway, but its amplitude is somehow halted by a barrier imposed by the energy costs.
We have managed to implement the increase in exports for the previous nine months. After a doubling of exports last year, this year we see a further 51% increase in exports, which means that the total export share in the turnover has rose to 16% versus 13% in the previous year. After thorough analysis, we decided not to give up on our development plans. We are going along with everything that we announced, and we are still working actively to new development plans because we feel that the complicated situation that resides right now in the market is not going to be long-lasting. I mean, we are not going to discuss about the 10-year prices that is going to happen.
We are a lot more optimistic than that, and we want to have in place new production capacities for when the market trend is going to shift to be in a position to reap the rewards of that increase in the markets. The context continues to be volatile. I would like to point out in the segment reporting that, although the macroeconomic context is not necessarily favorable to our installation business due to the decrease in infrastructure works, we have managed to increase in the installation business. Turnover is up by 20%. EBITDA is up by 6% versus the record figures of last year.
This is because considering our new production capacities, we are pursuing a path of increasing our market share, which is, by all indications, succeeding. Also, I'd like to point out that as opposed to the previous quarters, we see TeraGlass marginally turning around. We are no longer in the negative EBITDA segment for this business. After the price increases of which were implemented at the end of last quarter, second quarter. For the third quarter, the profits compensated the loss in the first two quarters, and we have a positive EBITDA. In compounds because they are the most exposed to the raw material fluctuations, we see a slight decrease in turnover and a sharper decrease in EBITDA.
This business was the one that took the biggest, let's say, hit from our policy of reducing the inventory levels. Regarding the flexible packaging market, as well as I said previously, we still have not reached a breakeven point for this business. However, we see an upward trend in the sales, both in terms of quantity as well as value. We have started supplying, I think it's the biggest, at least in terms of number of outlets, network of international key accounts businesses. This supplying started, I think, this month.
We still have at least two contracts, two big contracts in Romania and another two big contracts abroad, that are on the way of being implemented to increase the quantities in TeraBio Pack production, therefore to bypass or to get over the breakeven point. We are anticipating a positive contribution of this segment to the results for next year. However, the sum of the context that we are going through right now makes us obliges us to come with a new forecast for this year. We are estimating a turnover of RON 727 million, which is not far from what we initially anticipated.
However, we see an EBITDA level which is down by 20% versus the record results of last year. Installation business still remains the champion, our major pillar for the remainder of the year. Here we see a positive evolution in terms of turnover positive and above average evolution in terms of turnover as well as EBITDA versus last year. It's mostly the same situation in the window and door business. Here we see also a very sharp increase in volumes as well as a slightly more positive outcome in terms of profitability. Compounds will remain at a good level. We are still talking about a business with an overall EBITDA margin of 10%. However, in decrease versus last year.
The flexible packaging market, of course, in terms of quantity, we are increasing dramatically because we are talking about comparing business that's well on the way to be established to a startup, early startup, I suppose, at the end of last year. Still, it will not bring a positive contribution to the group results. On the contrary, we will still have operational loss that is inherent with the start of the business. I will hand over the presentation to my colleague Ioana to continue and get into the details with the numbers. Then, I'll come back for the Q&A.
We're looking here at the evolution of our turnover. The biggest factor with the increase in turnover was inflation, the increase in prices as a result of the increase in production costs. Notable, however, is the 4% increase in volumes of new products. The flexible packaging and the new microducts lines for fiber optic and floor heating. This increase is not significant in this year's turnover, but it's gonna continue to increase over the next years and bring also positive contribution. On the volume side of our mature businesses, the net effect is zero. We had different evolutions. We've increased the quantities of windows and doors that we've sold, and also the installations for sewage, water, gas.
However, this increase was counterbalanced by the decrease in the volume of compounds that we sold. Looking now at the full- year's results compared to last year's, we do have this margin deterioration. Again, it's important to note that we are comparing against the best year in the history of our group. Also it's important to note that better prospects are for the following business lines. TeraGlass, which increased both the volumes and the selling prices, has better prospects to more favorable results in the last quarter and also in the next year. Because now, the selling prices are appropriate to ensure that we have the targeted margins at the current production costs. TeraBio Pack, the volumes are steadily growing.
We have increased our client portfolio and we will continue to do so, being in the contract phase with a number of clients. Still, we will reach the quantities that enable breakeven only next year. The PVC compounds are very much related to the market fluctuations. Therefore, we had a low profitability in the last few months. There are better prospects after we marked the losses from consuming and selling the stocks that were at a high price. There is a significant gap between the operational profit and the net profit. This is due to the financing costs. Now financing costs will decrease in the following months because of two factors maybe.
We still have RON 25 million to receive from the state aid for the investments that we've already done, and this is going to decrease the investment loans. The second factor, we are now optimizing working capital and that will decrease the use of the credit lines. Here's a summary of the segments performance. The installations, 70% of our business, has also improved operational margins compared to last year. The other businesses do have a negative contribution to EBITDA compared to last year. Better prospects of improvement in the following quarter and the following year. We'll focus on optimizing the net working capital.
This will stabilize at 27% of sales at the end of the year, which is normal historic figure. Working capital was higher as of September because of the increase in sales and because we built up inventories and receivables for the new product lines. Net debt to EBITDA is at a comfortable level, less than three. Again, it is going to decrease due to the decrease in debt after we optimize working capital and we receive the state aid for the investments that we've done. The three major projects amounting to RON 154 million that we started in 2021 will be fully operational by the end of this year. This is what we've done in terms of cash.
We invested, we paid for investments RON 85 million, out of which half were covered by subsidies, the rest by loans. We've used the operating cash to pay dividends. We'll now answer your questions.
For the English conference, we got no questions in writing when the participants joined. Yes, please. I wanted to say that we can either put them in the chat or just by speaking. Please, Ellen.
Hello. I just wanted to ask if you could maybe provide us a little bit of color on your financial costs, given that these seem to have since doubled since 2021. This seems like a very significant and large increase. Can you just.
The biggest factor in this increase is the evolution of the loan balances. We need to remind ourselves that part of 2021, we were on net cash because it was a time gap between when we received the money on the sales of the steel division and were paid dividends and made investments from it. Part of the year, we were not using at all our credit lines, but we also had some deposits. This year, as I was explaining, we did have a temporary increase in loans due to this gap between the time we make the investments and the time we receive the subsidies from the state.
The increase in working capital due to increase in sales and due to the launch of new products which needed a working capital investment. Now, 60% of our investment loans are on interest that is very competitive and fixed. The overdrafts are all on variable interest rate. The only way that the cost of overdrafts is going to be reduced in the following period, because I don't know, I don't think that the interest rate is going to go down in the following months, is by optimizing working capital and using our cash from operations to finance the working capital.
Okay. Thank you. What about what is the maturity on these loans, and what is the rate, both the fixed and variable? Thank you.
The short term are mostly the overdrafts, and all our overdrafts are on variable interest rate. The average long term for the investment loans is seven years. 60% of the investment loans are fixed interest.
Okay. What is the rate?
Well, the rate differs from loan to loan. We did not make public our financing costs by loan and bank. I mean, in our financial statements, you can see the details on investment loans, banks and maturity. We did not make public the actual interest rates. We are talking about very competitive interest rates.
Okay. Thank you.
Is there any other questions? Okay. We are off the hook easy this time. Thank you very much. Thank you very much for attending this conference. Just a reminder, next week is the Investor Day in Teraplast. You are more than welcome to come. Please register first so we make all the necessary preparations. Have a nice afternoon. We'll hear each other in about three months or so with our results for this year and the budget for 2023. Thank you very much.