Good morning, ladies and gentlemen. Welcome to our full year 2023 results call. Thanks to Montega for hosting this call, and welcome also Oliver Schwegmann, Ralf Brühöfner, CEO and CFO of the Berentzen Group. Good morning, Oliver. Good morning, Ralf.
Morning.
As always, Oliver and Ralf will guide you through the presentation, and afterwards, you have the possibility to push your questions. And I will moderate the question session. And you can start with your questions even during the presentation. Please use the chat window for this. Don't raise your hand. Use the chat window, and I will read out your questions at the end anonymously. That's it from my side for now. Oliver, Ralf, the stage is yours.
Yeah. Thank you, Thorsten. This is Oliver Schwegmann, the CEO of the Berentzen Group speaking. Together with my colleague and CFO, Ralf Brühöfner, we, as the executive board of the Berentzen Group, would like to welcome all of you to our full year 2023 results video call. We hope that you are all very well on this spring morning. Also, I would like to welcome our colleague and Director Investor Relations, Thorsten Schmitt, who has already given the introduction to this session. After our presentation, Thorsten will share your questions, and Ralf and myself will do our best to answer to all of them to your satisfaction. Ladies and gentlemen, dear shareholders, this is our clear mission statement. We are very proud of our more than 260 years of tradition.
This is the fundament on which we will continue to build the Berentzen Group for the future. On the other hand, we are an innovative beverage company, always driven by a spirit of curiosity and opportunities. Both tradition and innovation are our motivation to delight our consumers with the most diverse beverages, from fresh orange juice to sweet liqueurs, from tasty lemonade to indulgent premium rum. We are part of people's life and accompany them from morning to night. Here you can see the key facts about the Berentzen Group in a nutshell. As most of you know them already by heart, I would like to directly dive into the financial year 2023 highlights. You will find them briefly on the next page. Looking at our overall financial key figures, we see a heterogeneous picture.
Revenues show a strong growth of +6.6% to EUR 185.7 million compared to 2022. However, this is also part of the truth. In the overall perspective, this growth was largely driven by significant price increase effects. The massive cost rise in energy, raw material and packaging, logistics, and staff forced us to also push through significant product price increases to our customers, mainly the German retailers. Over the course of the year, we succeeded in fully offsetting this costs and this cost increase that we had to face since the beginning of Russia's cruel war against Ukraine. In terms of sales volume, we saw a slight decline in 2023.
As Germany remains our key sales market with roughly 75% of our turnover, and within Europe, especially the German economy, suffered most from the cost increases and high inflation rates, this tough market environment hit the Berentzen Group disproportionately compared to global beverage companies with worldwide footprint. The entire consumer goods market in Germany was characterized by consumers' overall reluctance to spend money. Moreover, the shoppers generally switched their purchase behavior towards the discounter channel and cheaper products. Likewise, the beverage segment Spirits and Non-alcoholic Beverages suffered from this volume losses, which are significantly beyond Berentzen Group's moderate volume decline. Therefore, we can generally not be satisfied with our volume development. However, we were still able to gain market share also in volume in overall declining market segments. In 2023, as mentioned before, massive cost increases had their first full year effect on our P&L.
We managed to completely pass them on to our clients. However, this happened step by step over the year. This delayed cost compensation, together with a slight overall volume decline, are the main reasons for the 2.5% decline in gross profit to EUR 77.3 million. As a result, our gross margin fell from 44.3% to 41.5%. Considering the full year effect of our price increases accomplished in 2023, we will even see an overcompensation of cost coverage, which will eventually lead to better gross margins in 2024 again. We already ended the year 2023 with a pleasing final quarter. It goes without saying that this temporary dilutive cost versus price increase ratio also had an impact on our earnings figures, consolidated EBITDA and consolidated EBIT, and therefore, as you can see here, also on the corresponding margins.
Even though the Berentzen Group continued to perform solidly in an environment of multiple crises, we can still not be fully satisfied with the 2023 financial results. Therefore, after years of crisis management and defense mode, as our answer to multiple crises, we are now facing a new reality to which we must and will adapt in the coming years. For this reason, we have been working intensively in recent months and presented our new corporate strategy, Building Berentzen 2028, in February. This is our switch from defense to offense. For the first time in the history of the Berentzen Group, the new strategy also includes a medium-term forecast up to 2028. The implementation of first initiatives and measures in this context will be a top priority of the 2024 financial year.
I will come back to this at the end of our presentation, but now let's have a closer look into our different business segments. The overall revenue performance of our biggest segment, Spirits, demonstrates a dynamic revenue growth of +10.6% to EUR 115 million. With this double-digit growth rate, the Spirits segment of Berentzen Group even outperformed the overall German spirits market, which showed a revenue decline of about -1% by far. As I have already mentioned before, this means that we, as a company, significantly gained market share. Our branded Spirits business in Germany grew by +9.1% in 2023, after it already grew by +16.7% in 2022.
Main growth pillar behind this strong performance were, once again, our focus brands, Berentzen and Puschkin, which grew by +9.3%. Even in times of great uncertainty, these two brands are highly relevant to consumers in Germany. It is therefore consequent that we will continue to expand these two focus brands in the future. Our private label business, another important element of our Building Berentzen 2028 corporate strategy, also outperformed the overall spirits market with a growth rate of +14.7% after a growth of +10.2% in 2022. However, especially in times of inflation and cutback shopper spending, affordable price entry offers are enjoying disproportionately increased consumer demand.
Therefore, despite the strong growth of our premiumized private label products at a rate of +7.6%, the private label standard products even grew at +18.6%. Now let's take a look at our Non-alcoholic Beverages segment. An overall top-line development of -2.5% is generally not satisfying. However, it is driven by only one specific non-repeating reason. Our franchise business was significantly impacted by fading out and stopping several artist cooperations. Please keep in mind that this was an opportunistic business back in 2022 that we entertained as long as there was a relevant consumer demand for such products. This has never been a strategic topic on our growth agenda. As such, artist-featured products in many different food and beverage segments turned out to be a very short-term trend.
They today have no more meaning on the consumer market and therefore not for our business either. In contrast, we were very pleased with the continued strong growth of our focus brand, Mio Mio, last year at a rate of +19.3%. In a highly competitive market environment, Mio Mio was once again one of the fastest-growing brands in the segment of modern lemonades. As we have already seen in our Spirit segment, our focus brands will continue to be the real driving forces also for the upcoming years. Our portfolio of regional and other brands also achieved revenue growth in 2023 at a rate of 2.6% compared to 2022.
However, as we already pointed out in our presentation of Building Berentzen 2028, we face margin issues in the portfolio of our regional brands within the Non-alcoholic Beverage segment, especially since the massive cost increase triggered by the Ukrainian war. We must and will take some significant measures here to step by step achieve a margin quality which matches our expectation and ambition. Now let's turn the slide and have a look at the performance development of our business segment, Fresh Juice Systems. Our business segment, Fresh Juice Systems, achieved a turnover increase of +4.4% in 2023, after a strong post-corona rebound of +22.5% in 2022. Accordingly, we reached the pre-pandemic revenue level, and our Citrocasa business suffered the most from the corona restrictions in 2020 and 2021, and the overall challenging economic environment ever since.
Despite being finally back on the pre-pandemic revenue level, we are still not satisfied with the overall performance. As you can see on this slide, growth in 2023 was driven by fruits and bottling systems, whereas the fruit juicers showed a significant turnover decline. On the one hand, this demonstrates that wherever our machines are in operation, the consumer demand for freshly squeezed juices remain dynamic, despite inflation and overall consumer restraint. The global trend towards a natural and healthy lifestyle is unbroken, even in these turbulent times. However, on the other hand, we are not satisfied with the sales of new machines. Especially in some of the Western European countries like Germany, France, and U.K., we observe investment restraints or at least long decision-making processes. Those are often triggered by a significant shortage of staff on the store floor to operate our machines.
Despite the longer lasting recovery period from multiple crises for Citrocasa, we remain ambitious and confident. Moreover, in order to approach this market with new growth impulses, we are just about to launch a totally new machine generation with many innovative features to defend our quality and premium leadership. Additionally, we are currently restructuring our sales organization in one of our focus markets, Germany. Last but not least, we are in a distributor pitching process to prepare a market entry in the new region, Middle East. Now, I would like to pass on to my colleague, Ralf Brühöfner, who will give you more insights about the group's financial performance.
Thank you, Oliver, and good morning, ladies and gentlemen, also from my side. Note at the beginning, when I talk about millions below, I am referring to millions of euros. I hope this makes it a little bit easier for you to listen to my numbers. Yeah, Oliver has already explained revenues, gross profit, and EBIT of 2023. Let me explain a few more details about our P&L that may not be obvious at first glance. You can see here that other operating expenses remained almost stable compared to the previous year. This means that they, in total, neither improve nor worsen our 2023 earnings. As we were able to reduce operating costs in some areas, personal expenses increased in the last year by EUR 1.3 million to over EUR 30 million.
The personnel expense ratio, however, remained stable since 2020 by 16.4%. We have therefore succeeded in keeping our personnel efficiency constant, even though we are confronted with more and more aggressive wage demands, not only by trade unions. In contrast, the increase in other operating income had a compensatory positive effect last year. In total, however, this was not enough to fully compensate the decline in gross profit. That's the reason why a consolidated EBIT declined by EUR 0.6 million only, compared with a EUR 10 million decrease in gross profit. In addition to the lower consolidated EBIT, higher interest expenses are the main reason for a lower net profit, coming from EUR 2.1 million in 2020 to EUR 0.9 million in 2023. Let me now explain the reason for this.
The negative impact on the 2023 earnings coming from the financial result has more than doubled from EUR 1.7 million in 2022 to EUR 4.0 million in 2023. The higher interest expenses are the result of higher net debt on the one hand, and a sharp rise in interest rates on the other. This means that we are seeing both a volume and a price effect here. To illustrate this, we have shown both the average increase in our net debt on the left side and the increase of the average three months EURIBOR on the right side. In 2023, our net debt was on average EUR 16.4 million higher than in the previous year. This development is mainly due to significant increase in capital tied up in trade working capital and the lower cash flow from operating activities. I will come back to this later.
If we now look at the right-hand side of the slide, we can see that the average three-month EURIBOR has literally exploded from 0.23% in 2022 to 3.35% in 2023, as a result of the ECB's interest rate hikes. Since May 2023, the rate is near 4%. The three-month EURIBOR is our base interest rate for our borrowed capital. The massive increase is therefore directly reflected in our interest expenses. All of this has left its mark on the balance sheet. At first glance, the balance sheet seems to be more or less unchanged. The balance total is again at EUR 145 million. Due to a lower equity, the dividends exceeded the net results 2023. The equity ratio dropped from 34.2% to 32.6%.
Nevertheless, this ratio is still quite solid, meaning that one-third of the assets are financed by equity items. In addition to that, the total of equity plus non-current liability raised from about EUR 60 million in 2022 to approximately EUR 68 million, exceeding the non-current assets by approximately EUR 8 million versus EUR 2.3 million in the previous year. This development is due to the extension of the syndicated loan facility by a long-term bullet tranche of EUR 10 million. As a result, the Berentzen Group was able to establish a financing structure with matching maturities. But if we take a deeper look into the assets and liabilities, then we see that the long-standing net cash position has now become a net debt position due to higher financial debts and lower cash. I will explain the two main reasons for this on the following slide.
I've already talked about the increased financing requirements, in particular, due to developments in working capital. Let me explain this issue in more detail. Inflation and growth have triggered the working capital level massively. The so-called trade working capital of the Berentzen Group increased from EUR -1.1 million in 2021 by approximately EUR 14.5 million to EUR 13.4 million at year-end 2023. Higher material prices had a huge impact on the inventory value, which raised from EUR 39 million by approximately EUR 12 million to EUR 50.9 million. And the, of course, to be financed, peak during the year was even higher by nearly EUR 58 million due to a very active stock management, we succeeded in reducing inventory value then to 50.9 million at year-end 2023. As in the year before, this was caused by higher material prices only.
The quantity of stocks remained more or less unchanged, or was even lower than in the year before. Sales prices and sales volume growth in the non-factored business, like non-alcoholic beverages and spirits in Turkey, have led to a high level of trade receivables as well. The increase from 2021 to 2023 amounts to EUR 5.7 million. The simultaneously increased total of trade payables and alcohol tax liabilities were at least under proportional, as the alcohol tax has no inflatory effects, and it depends on the unchanged alcohol, alcohol tax rate only. These short-term liabilities were not helpful for the counter-financing of the higher short-term assets. On the contrary, this effect even decreased by EUR 4.1 million. But... And this is very important to keep in mind, the good news is that we are seeing this trend stopped. The second reason is the cash flow level 2023.
The operating cash flow was quite positive and it amounted to EUR 9.7 million. But as already mentioned, it decreased by around EUR 2.6 million compared to the previous year. This is due, in particular, to the decline in net income. Nevertheless, the operating cash flow was insofar sufficient to cover the capital expenditures of EUR 9.4 million, but the amount was not enough to refinance the working capital investments of 8 million. Thus, the free cash flow was negative by EUR 12.5 million. Of course, we're not satisfied with the situation, but I can assure you that we are focusing very intensively on improving free cash flow on a level we had before the Ukrainian war and inflation.
But in this context, and expecting that prices will not come down to historic levels again, the decision to extend the syndicated loan credit facility by approximately EUR 10 million was a logical step. In the medium term, however, and as a part of our Building Berentzen 2028 strategy, we will systematically eliminate earnings and cash flow burdens. I will now hand over to Oliver again.
Let us now take a look at our dividend proposal. Together with the supervisory board, we will propose the payment of a dividend of EUR 0.09 per share to the upcoming Annual General Meeting. This would represent a payout ratio of 98% of consolidated net profit. We have decided to take this step because, on the one hand, we want to make a very clear commitment to our dividend policy, and on the other hand, we remain convinced of the positive path of the Berentzen Group, in line with our new strategy, Building Berentzen 2028, despite all remaining short-term challenges. This new strategy, Building Berentzen 2028, includes not only clearly defined pillars, but also, for the very first time, a midterm guidance for our key figures. On this slide, you can see our ambitious goals for 2028 in terms of revenue, EBIT, and EBITDA.
We are confident that we will achieve these targets with our comprehensive package of measures and initiatives. We are starting immediately, particularly with regards to a significant expansion of our marketing activities and our sales organization. In addition, we will also be taking important steps this year to significantly improve the efficiency of our structures and processes. All of this is reflected in our forecast for the 2024 financial year. We expect to generate consolidated revenues in a range of EUR 190.0 million-EUR 200.0 million. Consolidated EBITDA between EUR 17.2 million and EUR 19.2 million, and consolidated EBIT between EUR 8.0 million and EUR 10.0 million. Thus, we are targeting significant growth for each of our key figures. One last time, I would like to hand over to Ralf for final information.
Now, finally, let us take a very brief look at our financial calendar, which you also can find regularly updated on our corporate website. As you can see, we are taking part in many conferences also this year, to get in touch with our shareholders and to inspire new shareholders for the Berentzen Group. I would also like to take this opportunity to point out that we decided to hold a virtual Annual General Meeting after carefully weighing up the pros and cons. Of course, this was very important to us when making the decision; all your shareholder rights are also fully safeguarded in this format. We also want to enable the many shareholders who live further away from a possible venue to participate in the AGM. We'd be delighted if you would attend the event. Thank you for your attention. Thank you.