Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Alicorp third quarter 2023 Results Conference Call on the second of November, 2023. At this time, all participant lines are on listen-only mode. The format of the call today will be a presentation by the management and IR team, followed by a question and answer session. So without further ado, I would now like to pass the line to Mr. Misael Álvarez. Please go ahead, sir.
Thank you, Michael, and good morning, everyone. Welcome, and thanks for joining us today. Speaking to you is Misael Álvarez, Director of Strategy, Portfolio, and Investor Relations. As presenters today, we will have Mr. Alfredo Pérez, Chief Executive Officer, Mr. Manuel Romero, Deputy CEO and Chief Financial Officer, Mr. Álvaro Rojas, Vice President of Marketing Consumer Goods Peru, and COE of Marketing Consumer Goods Peru, and other members of the senior management team who will join us during the Q&A session. Today, we will be discussing the third quarter 2023 results after the financial results and earnings report were issued on Tuesday. If you have not received a copy of the earnings report, please visit us at www.alicorp.com.pe, where you will also find a webcast presentation to accompany our discussion during this call. Please be advised that today's call is for investors and analysts only.
Therefore, questions from the media will not be taken. If you're a member of the media and wish to direct any questions to the company, please contact our team directly after the call. Before we begin, I would like to remind you that forward-looking statements may be made during this conference call. These forward-looking statements are based on several assumptions and factors that could change, causing actual report to materially differ from current expectations. We ask that you refer to the disclaimer located in the earnings release prior to making an investment decision. It is now my pleasure to turn the call over to Mr. Alfredo Pérez, Chief Executive Officer of Alicorp. Alfredo, please go ahead.
Thanks, Misa, and good morning to everyone, and welcome again to Alicorp's Q3 2023 earnings call. As we announced a few months ago, we are in the middle of a succession process of my role as CEO of Alicorp. I will remain as CEO till the end of December 2023. Therefore, this will be my last earnings call. It has been a real privilege to lead this incredible company and team for over 8 years now, having joined first as Chief Financial Officer back in 2005. Over 18 years now. I would like to thank you all for accompanying me in this incredible journey: to shareholders, the board of directors, clients, suppliers, but special thanks goes to the amazing team of professionals at Alicorp.
The road ahead for our company presents significant opportunities and challenges, and I'm confident that this team will be fully committed to generating value to all stakeholders. With that, I will now turn over the call to Manuel, who will begin the presentation. Manuel?
Thank you, Alfredo. Good morning, everyone. Thank you for joining Alicorp's third quarter 2023 earnings call today. In today's call, we will discuss the third quarter of 2023 results. The third quarter has been challenging for Alicorp, with strong headwinds in most of our businesses. The macroeconomic situation in Peru continues to deteriorate, with signs of a recession. On the other hand, the shrimp industry worldwide took a turn for the worse in this quarter, with shrimp prices reaching all-time lows. Despite this challenging environment, we are starting to see positive trends in our consumer goods Peru business that gives us confidence that the strategy that we began implementing in the second quarter will pay off. I will start by giving more visibility on the strategic changes that we have been executing in our consumer goods Peru business and supply chain.
Next, we will go through our consolidated results, and then we will cover the financial results for each of our business units. At the end, before the Q&A section, I will take the floor again for an update on our guidance for this year. Let's review our strategic priorities for our consumer goods Peru unit in slide number 5. In 2020, the pandemic brought incremental demand for several of our categories. In-home consumption increased, and the market associated to our core categories grew to record highs. However, starting in 2021, consumption patterns began returning to pre-pandemic levels. This trend continued throughout 2022 and has accelerated in 2023, a year in which families' purchasing power has continued to deteriorate.
In this context, where markets return to pre-pandemic levels, we tried to maintain our volumes despite the fact that the volumetric platform that we saw in 2020 and the first half of 2021 was not sustainable as consumption patterns returned to pre-pandemic levels. To do this, we began focusing more on our value portfolio and the modern channel, as it was easier to bring in volumes quickly. We also increased our gross to net in an attempt to bring in short-term volumes. Unfortunately, profitability in these segments and channels, in many cases, were well below healthy levels. On the other hand, to try to compensate for lower profitability and the growing relevance of the value segments, we pushed prices in our top-tier brands, increasing stress due to growing price gaps between our Tier One products and our Tier Four products, especially in the traditional channel.
This situation led us to accelerate tiering down in an already adverse macroeconomic context. Volumes in our emblematic brands in the traditional channel suffered as a result of this situation. For this reason, in May, we decided to reset the business to ensure that we return to healthier price gaps between tiers and channels. This discipline and the recovery of focus in our emblematic brands, with more strategic communication to strengthen their connection with our consumers, is starting to pay off with very positive early results. Now, we will comment on our supply chain transformation plan in slide number 6. As we mentioned before, the volume sold of our Consumer Goods Peru business grew after the pandemic, and to properly respond to that demand level, we adapted our supply operations.
However, as volumes started to decrease, as pandemic restrictions were lifted, we lost productivity as we were not able to adjust our supply chain to the new volume levels that we're seeing today. As can be seen on this slide, our per ton metrics have grown well above inflation levels as a result of this. Several plants have had low utilization factors, deteriorating productivity levels further. Therefore, since 2022, we have been exiting some of these production lines, warehouses that were no longer needed, looking to consolidate production in fewer, more productive, and efficient manufacturing facilities. In this context, in the past few months, we have decided to launch a multi-annual supply chain transformation plan, with the main initial goal of returning to productivity levels we had in 2019, adjusted for inflation.
These efforts will contribute to expanding EBITDA margins through cost and expenses management, while reducing working capital requirements and the need for fixed assets. This should give a relevant boost to our return on invested capital over the next few years. Unfortunately, in the short term, some of these efforts are leading to one-off write-downs. We are confident that this plan will lead us to increase our competitiveness in the industry, and we are making relevant progress towards 2019 productivity levels, adjusted for inflation. In several areas, we are already seeing opportunities to achieve better productivity, productivity levels when compared to 2019. Our long-term goal is to have supply chain as a stronger competitive advantage, which is key in this context.
Moving on to the next slide, let's review the one-off impacts we had this quarter related to the decisions we are making, aligned with our new strategy. In line with our objective of making our business more efficient, and as we have covered on previous calls, during 2023, we have made strategic decisions, mainly related to the optimization of our cookie production lines and the reorganization of our business and support areas, which have caused non-recurring expenses that have impacted our results. So far in 2023, these impacts amounted to PEN 41 million, of which PEN 20 million correspond to this quarter and are related to inventory losses of packaging and supplies purchased in previous years in categories that had significantly higher consumption during the pandemic.
As consumption returned to pre-pandemic levels, turnover fell significantly, and for this reason, we decided to write down this inventory, mainly impacting our consumer goods Peru unit this quarter. It is worth mentioning that these strategic decisions have accelerated over the last years, as we are continuously evaluating the performance of our business portfolio. In late 2021, we decided to exit the Argentina and Brazil operations and recently, businesses such as gloves and sponges and frozen bakery. These strategic initiatives will generate incremental value to our company in the long term, as almost all of these businesses generated operating losses, and we did not find paths for turnaround of these situations. Following to slide 8, we will discuss some of the early results for the new strategy in our consumer goods Peru unit.
As we have already mentioned, this year we decided to reset our consumer goods Peru business. This new strategy aims at improving the operating and financial performance of our business through recovering market share, with special focus on our emblematic brands in the traditional channel, and reaching adequate profitability levels in the modern channel and the value segments. Early results reflect a faster than expected recovery in the core segments' volumes in the traditional channel, where brands such as Alacena, Casino, and Don Vittorio grew significantly when compared to April 2023. As soon as we have adjusted price gaps, volumes responded in a very favorable way. This is a clear sign that consumers still have a strong preference for our brands, and with more discipline and focus, we will be able to recover volumes in these segments.
We are already seeing improvements in our mix between tiers and our mix between channels. This is leading to much healthier levels of gross margin per ton, well above pre-pandemic levels. In the following quarters, we will continue executing actions aligned with our new strategy in terms of trade and marketing, looking to strengthen our emblematic brands and strengthening our revenue growth management initiatives to optimize our gross to net and design to value to meet our clients need, needs in each tier. Initial results are positive, but the road ahead remains challenging, and we still have a long way to go to reach the optimal levels of profitability and return on capital. Now, let's review our consolidated gross profit for the third quarter of 2023 on slide number 10.
Before going through our financial results, we would like to advise that the following figures are being presented on a pro forma basis, excluding the one-off impacts in both 2023 and 2022 years. Official figures reported in our financial statements will be mentioned as well during the presentation. Our consolidated gross profit amounted to PEN 608 million, decreasing 19% year-over-year. This was mainly explained by the performance of our crushing business, and aqua feed to a lesser extent. This negative effect was partially offset by consumer goods Peru, B2B, and international business performance.
Excluding the crushing business, gross profit per ton, gross profit amounted to PEN 662 million, and gross profit per metric ton reached 1,247 million, for 1,247 soles per ton, increasing 9% and 16% respectively. If we consider one-off expenses related to the write-down of inventory acquired during the pandemic, that was mentioned before, gross profit would amount to PEN 642 million. Let's now review our consolidated EBITDA for the second quarter of 2023 on slide number 11. Consolidated EBITDA reached PEN 297 million, a 37% year-over-year decrease, explained by the results of our crushing and aqua feed businesses. This was partially offset by the performance of consumer goods Peru, B2B, and international businesses.
Excluding the crushing business, EBITDA amounted to PEN 364 million, and EBITDA per metric ton reached PEN 686, increasing 14% and 21% year-over-year, respectively. I would like to highlight that in a very adverse macroeconomic environment, our CPG and B2B businesses in Peru performed very well. Including one of the impacts, EBITDA amounted to PEN 276 million in the third quarter of 2023, decreasing 36% year-over-year. Excluding the crushing businesses, the crushing business, EBITDA reached PEN 343 million, increasing 15% year-over-year. Now, let me pass the floor over to Álvaro, who will discuss the operating results for our consumer goods Peru business.
Thank you, Manuel. Let's move on to the financial performance of Consumer Goods Peru unit on slide 13. Sales in the third quarter have decreased by 10% compared to 2022, driven by market contractions due to Peru's economic context. Comparing year-to-date 2023 to the previous year, consumption is regressing in all our most relevant product categories, such as edible oils, down 7%, cookies, down 10%, pastas, down 4%, sauces, down 10%, and detergents and laundry soaps, down 1% and 5%, respectively. Additionally, aligned to our new business strategy, implemented since May 2023, we have consciously foregone non-profitable volume and focused on volume that generates higher value and gross margins for the company. Consequently, while our sales have reduced compared to last year, if we compare them with the second quarter 2023, we delivered revenue growth of 5%.
Our strategy to regain volume with our higher value segments is working. Furthermore, we have focused growth on our core brands, which gained 4 percentage points in our sales mix versus the third quarter 2022, and do so through our traditional distribution channel, where, for example, sales mix is up 4 percentage points in edible oils, three percentage points in edible oils, I'm sorry, and 4 percentage points in pastas. This is reflected in our higher gross profit per metric ton, which has increased 28% compared to last year, also capitalizing on lower prices of commodities. These changes in our mix and our focus on our emblematic brands is already helping us generate more value, as evident in the absolute gross profit, which increases by 20% compared to the same quarter last year.
Finally, higher gross profits translate into EBITDA growth of 18% compared to the third quarter of last year, excluding one-off impacts. This has been achieved despite an increase in SG&A expenses compared to last year, which is explained by marketing investments in our core brands to generate tiering up and administrative corporate expense reallocations. We are optimistic that with our new strategy and with efficiencies in our supply chain, we will continue delivering strong results and healthier profitability and mix in our portfolio. Now, I'll pass the floor over to Manuel, who will cover the international businesses, B2B, aqua feed, and crushing units, as well as our liquidity and debt metrics.
Thank you, Alvaro. Let's move on to the performance of international businesses on slide 14. EBITDA exhibited a positive performance in the third quarter, reaching PEN 12 million, an increase of PEN 6 million compared to the third quarter of 2022. This result is mainly explained by edible oils in Bolivia, which exhibited an PEN 8 million increase when compared to last year, as commodity prices start decreasing below the price control of 11 BOB. And other geographies, which registered an increase of PEN 11 million in the third quarter, mainly explained by higher gross profit. It is important to mention that in the third quarter of 2022, we also had one-off expenses related to bad debt expense related to our Argentina operation of around PEN 12 million.
In Ecuador, the positioning of some core brands has weakened, impacting the performance of our business, leading to a year-over-year decrease of 6.1% in volume and PEN 8 million in EBITDA, as we continue the implementation of our go-to-market strategy, which has higher expenses but should help us accelerate growth in the medium term. Including the one-off inventory losses discussed before, EBITDA would amount to PEN 10 million soles. Let's move on to Slide 15 for an update on our B2B financial performance. Despite market contractions, we managed to increase our sales volume 5.8% compared to 2022. This increase is mainly explained by categories such as flour, shortenings, and margarines.
We remain focused on sustaining healthy gross margins, with an increase of 6.4 percentage points year-on-year for the third quarter, mainly explained by lower cost pressure due to lower commodity prices. As a result, our gross profit per ton reached 823 PEN, which represents a strong increase of 24% year-on-year, despite lower revenue. EBITDA for the third quarter reached the amount of PEN 94 million, which represents an increase of 47% compared to the third quarter of 2022. Let's move on to Slide 16 for an update on Aquafeed performance. The global shrimp industry is going through one of its worst market crises in the last decade. As stated recently by Royal Bank specialists, roughly 80% of the global shrimp industry is selling below cost.
Although Ecuador stands out for its cost competitiveness, as prices have dropped even more during the second part of the year, a large proportion of Ecuadorian shrimp farmers are also facing negative margins. Some smaller farmers are now even closing operations. In this context, farmers are shifting to lower tier feeds while searching for larger discounts and more lenient commercial terms. Vitapro Ecuador has been focused on supporting our farmers, where possible, with additional discounts. Despite these short-term headwinds, we still firmly believe in the fundamental, in the fundamentals of the Ecuadorian shrimp industry, and expect Ecuador to be in an even stronger global competitive position when the market recovers. In terms of business performance, Vitapro had a 14% revenue drop, mainly explained by a reduction in volume in our shrimp feed business units and by price reductions due to the aggressive competitive environment.
Gross profit per ton decreased 18%, mainly due to portfolio mix and by price reductions in Ecuador to support our clients. It is important to mention that thanks to our conservative management in accounts receivable, we have not experienced relevant bad debt expense, unlike several competitors in the industry. EBITDA decreased 32% year-on-year, mainly as a result of the reduction in volume and lower gross profits per ton, partially offset by the reduction in SG&A. We expect these headwinds to continue throughout the rest of the year and early 2024, with impacts from El Niño. Next, we will cover the crushing business financial performance on Slide 17. During the third quarter, our gross profit decreased, mainly explained by the drop of soybean oil basis and lower prices of sunflower oil.
Soybean oil basis decreased from 1,100 cents per pound to 2,300 cents per ton. Both values are negative, minus 1,100 cents per ton per pound to minus 200-300 cents per pound, which represents a reduction of $263 per ton, and sunflower oil decreased 37% compared to 2022, from $1,400 per ton to $880 per ton. As a result, EBITDA for the third quarter saw a decline of $53 million. Part of the negative impact has been offset by a positive exchange effect of $3 million, generated by exchange arbitrage opportunities during the quarter, directly impacting our cash flow generation. This effect is not considered as operating results and therefore as EBITDA, due to accounting policies.
Moving on to Slide 19 to comment on our leverage, debt, and liquidity metrics. Regarding our debt metrics, the third quarter of 2023 continues to be challenging, yielding a lower EBITDA than expected. As a result, our net debt to EBITDA ratio increased from 3.9 times as of the second quarter of 2023, to 4.2 times as of this quarter. Such increase was mainly explained by the performance of our crushing business. We expect to reach lower leverage levels over the next quarters due to the recovery we're seeing in our consumer goods business unit, as well as an improvement in our working capital metrics.
In the third quarter of 2023, our net debt, excluding readily marketable inventory related to our crushing business, was PEN 3,816 million, PEN 283 million more than the second quarter of 2023. Excluding one-off impacts on RMI from our leverage, the ratio would be 3.2 times. Unfortunately, since our cash conversion cycle for our CPG and B2B business is negative, the reduction in volumes and cost experienced this year has put temporary pressure on our cash generation. Since our volumes have stabilized and we are reducing our days inventory outstanding, we expect cash generation will be strong in the following quarters.
Regarding our liquidity levels, as of September 2023, we exhibited a cash position which amounted to PEN 589 million, PEN 52 million more than as of June 2023, a level that we consider is near the optimal under the present scenario of interest rates. As of September 2023, our cash position covers 0.38 times our current debt. If we include both our committed credit line of $420 million and the undisbursed $140 million of our syndicated facilities already committed, such ratio would be 1.03 times.... Also, let's turn to slide 21 to wrap up today's presentation with a glimpse of what we expect for our full year 2023 results.
As covered in previous calls, 2023 is being conditioned by significant economic and market challenges, which decelerated our recovery in the consumer segments. In addition, the volatility of the international commodity market played an important role regarding the performance of our crushing business. This situation, coupled with our strategic focus on our core portfolio, as well as optimizing production processes, led us to update our expectations for the last quarter of this year. Taking these factors into account, we expect our consolidated revenue decrease between 8%-10% year-over-year. Excluding the crushing business, the expected decrease would be 6%-8%. Regarding EBITDA, we expect a 25%-30% decrease. For 2023, crushing will probably have a negative EBITDA for the year, after posting around $120 million EBITDA last year.
This dramatic reduction in profitability is responsible for almost all the reduction in our consolidated EBITDA. Excluding our crushing business, our EBITDA will remain flat, as our CPG and B2B businesses will probably compensate lower profitability in our aquafeed business for the year. As for our investments for the year, capital will reach $125 million. Finally, for leverage, we expect a net debt to EBITDA ratio between 3.0 and 3.2 times, as we expect to improve our cash flow generation in the last quarter of 2023. I would like to end the presentation by thanking Alfredo for your leadership and support all these years. Your energy and passion have inspired all of us at Alicorp.
You definitely leave a relevant mark at Alicorp, and we will strive to continue strengthening our digital platforms, innovation, while executing our new strategy launched in the past months. Thank you very much for your guidance and warmth. It has been a pleasure to work with you all these years. This concludes our presentation, and we welcome any questions you may have.
Thank you very much for the presentation. We will now be moving to the Q&A part of the call. If you are dialed in via the telephone, please press star two on your keypad. That is star two on your keypad, if you have any voice questions. You may also ask a voice or a text question if you are dialed in via the web, and we already acknowledge one or two text questions that already came in. Thank you. We'll take a voice question from Mr. Alonso Aramburu from BTG Pactual. Please go ahead, sir. Your line is open.
Yes. Hi, good morning, and thank you for the call. First of all, Alfredo, best of luck on your life after Alicorp. Let me ask a couple of questions. First, on crushing, I mean, obviously this is a very cyclical business, and you know, this is the bad part of the cycle. But margins, I think, as long as you've had the business, has never been this low. I think you're at 10% negative EBITDA margin is lower than what you were experiencing in the previous cycle. So I'm just wondering if this quarter was especially bad, and do you expect some improvement in margins even, maybe still negative, but closer to breakeven in the next couple of quarters?
Regarding consumer goods Peru, if you can give us maybe some update. Are you done with setting these pricing gaps? Has that been completed, or do you still have some more work to do in that respect? How much more write-downs should we expect, or are you done with the write-downs in this quarter? Thank you.
I would pass the floor to Lutro for the crushing business, and then Álvaro can give a little bit more insights as to price gaps in consumer goods, and I will, I will answer the last question regarding future write-downs. Lutro?
Thank you, Manuel, and thank you, Alonso, for the question. Yes, effect, as you have mentioned, Alonso, given the reduction on commodity prices, we're, you know, we're entering. I wouldn't say entering a low cycle, but for sure, we have significantly lower prices in commodities associated to the crushing business, if we compare them to last year. What happened in particular this quarter was that, after finishing pricing the bulk of the, what we call the summer, the summer crop, which is the largest harvest that we have in Bolivia, the basis component, as Manuel mentioned previously, dropped significantly.
The price of the commodities that we trade in the crushing business are hedged with the futures component, but there is a component of the price that we call the basis or the delta that is not hedgeable. We have certain hedging instruments, but they're not as liquid as the futures market. And that, in a very short period of time, dropped significantly. That market, that component of the price, Alonso, it's beginning to recover. So, we expect that probably is gonna be better, a little bit better than what we have faced on the third quarter in the future.
Okay. Thank you, Lucho. Moving on to the question regarding pricing in our CPG business in Peru. I would say, Alonso, that we have already done the vast majority of the adjustments that we needed to do, regarding price gaps between Tier one and Tier four products, and also regarding channels. We've adjusted also pricing between modern and traditional trade. Those actions have helped us re-regain growth in our emblematic brands, our most profitable brands. Obviously, moving forward, we'll see how the costs evolve and we'll take further action. But adjustments, the vast majority have already been made.
Okay. Thanks, Alonso, for your question. Regarding our crushing business, I would just amplify that. Our view is that through the cycle, the crushing business should generate an average EBITDA of between $40 million-$50 million. Unfortunately, we're seeing that volatility has increased in the past few years, and we believe that volatility is here to stay. So unfortunately, it's possible that we will continue having these EBITDA swings that we have seen in the past few years. Moving on to possible further write-downs. We are not expecting more write-downs this year. However, as we continue our supply chain transformation program, it is possible that we might consolidate operation in larger plants, and that could lead to further write-downs in 2024.
But we're not expecting any additional write-downs this year.
Okay, thank you very much. We'll be moving to a couple of text questions. First one is from Gerard Ford, from AFP Integra. Are you expecting more one-offs related to inventory losses or production sites optimization for the next quarters?
I believe I just answered that question. We're not expecting more inventory losses. Inventory losses, I think we have already written down everything we have, so I'm not expecting any further inventory losses. In terms of write-downs related to production facilities, that is possible, but that would probably happen in 2024 as we continue with our supply chain transformation program. We have some facilities that are operating with very low utilization levels, and in those cases, we will look to optimize our production sites.
Okay, thank you very much. Next question, text question comes from Mr. Hector Castro, from ONP. I believe it was already touched on as well. What would you do to avoid the decreasing of revenues in 2023? Have you forecasted how much revenues would there be in 2023? Is it going to be higher than 2022?
Sorry, could you repeat the question, please?
Yes, the question is regarding the full year revenues. How would you avoid the decreasing of revenues in 2023? And have you forecasted how much revenues are going to be in 2023?
So I mean, we have provided some guidance for 2023. Most of the reductions in revenues are because with lower commodity prices, our price per ton is obviously being reduced, and obviously, the changing strategy that we have implemented this year has led us to forgo some volume that was not profitable. If we look at 2024, we're not seeing more reductions in revenues, but obviously, that will depend on commodity prices that might force us to reduce some prices.
Okay, thank you very much. Just a reminder, star two for any additional questions. We have a couple of questions from Alexandra Ramos, from La Positiva. Do you expect the El Niño to continue affecting the company's results for the next year? What impact do you expect to have on the business?
I'm assuming that's Fenómeno El Niño? Okay. So, regarding El Niño, so far, most of the impacts have been related to our aquaculture business, where changing temperatures have affected some shrimp farmers. If we look to 2024, we might see some logistic disruptions in the north of Peru, but we should be able to navigate those disruptions in 2024, and we are already preparing our logistics, trying to increase some inventories in our warehouses in the north of Peru. So we should be able to navigate that situation, perhaps with slight increase in our freight expenses. Most of the impacts I'm expecting are in the aquaculture business in Ecuador.
But other than that, I believe that we should be able to manage El Niño.
Okay, thank you very much. There's a follow-up question from Alexandra. The company has an amortization schedule that is concentrated on the short term. How do you expect to manage it?
So we on Tuesday issued a new program that should help us refinance some of the debt that is amortizing in the short term. We have committed lines of $120 million and $140 million that should also help us refinance any portion of the debt that is due in the following 12 months. But between the committed credit lines and the program that we are issuing in the following months, we should have no issues to refinance short-term debt.
Okay, thank you very much. Our next text question again comes from Mr. Rodrigo Godoy from Tradicore. Regarding the eventual acquisition of Refinería del Espino, when is the company expecting to make a decision on that front?
We're still in our due diligence process. We're still analyzing several factors of the target. We will probably close the transaction in 2024. And we're obviously focused on executing the transaction when our liquidity and leverage ratios look a little bit more healthy.
Okay, thank you very much. We have a follow-up question from Gerard Ford from AFP Integra. Can you give us a little bit more color on how you are going to reach the 3-3.2 times net debt over EBITDA guidance for 2023?
Okay. So in terms of EBITDA, we're seeing a more positive fourth quarter, so that should help a little bit on the EBITDA front. Regarding leverage, as I mentioned during the call, the crushing business in the third quarter had a higher readily marketable inventories that should have a reduction in 2023. We're also seeing the opportunity to optimize our working capital to increase cash flow generation. As I mentioned, during 2023, the reductions in volumes that started in May with lower costs, given that our cash conversion cycle in CPG and B2B is negative, is putting short-term pressure on our cash. And we expect cash flow generation in the fourth quarter will be much stronger, as we should be able to ...
Since our volumes have already stabilized, in the fourth quarter, we should be able to see cash inflows. That should help us, reach a level between 3 and 3.2.
Okay, thank you very much. We'll give perhaps a moment for any additional questions to come in. That's star two for any additional questions. Okay, it looks like we have no further questions at this point. I'll pass the line back to the team for their concluding remarks.
No. Thanks everyone for joining the call, and thanks for all the questions.
Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.