Good afternoon, ladies and gentlemen, and welcome to the CANCOM SE Earnings Call for the Third Quarter Results of 2022. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Mr. Bucher
Dear ladies and gentlemen, welcome to today's earnings call. Today with us for the first time presenting the major events of the quarter is Rüdiger Rath, our new CEO. With him, Thomas Stark, our CFO, who will guide you and lead you through the most significant events of the quarter and present the financial KPIs. Without further ado, Rüdiger please take over. The floor is yours.
Many thanks, Sebastian. Dear ladies and gentlemen, welcome to today's earnings call for the Q3 results. My name is Rüdiger Rath, and I took over the CEO position from Rudolf Hotter just a few days ago. I'm proud to lead this incredible company with a great business model and passionate employees with high expertise. From now on, as CEO, and first of all, I would like to express my deeply felt respect for the success of Rudolf Hotter, who was part of the CANCOM success story over more than 17 years. You as analysts and investors of CANCOM can expect from me that I will participate regularly in capital market events, and that I will be available for investor dialogue as much as my schedule allows me.
Nevertheless, the main part of our investor communication activities will still remain on the desk of my colleague, Thomas Stark, who you know already since many, many years. I'm very pleased to be able to present to you for the first time the financial results and main events of the reporting period. Especially as we, the management team, think that we see a business development to start in the right direction. The demand for IT and cloud solutions remains high, and the availability of infrastructure as well as services and skills is crucial in the market environment. The delivery capability in total has become a competitive advantage. You will see it later, we increased our inventory and our staff to be capable to deliver and resilient in the competitive landscape. Clearly, we benefit from our financial strengths and also from our great relations to our partners.
We in Q3 went back on the top line development to the growth as we expected early this year. The public sector starts to normalize, but yet has not fully returned, but we expect to increase to a normalized level in Q4 and latest in 2023. The private sector continues in a good performance. We see, as I mentioned before, the strong demand in our order books and as well our backlog increased. We see still a high demand on that. We have on the cloud solution parts, you will see later in detail, as well, a strong growth, and that is followed by our strategic intention to drive the as a service businesses. We expect that the availability of products, services, and skills needs to be increased.
It was unfortunately not enough in Q3 to allow reduction of the order book or overcompensate of the negative impacts from the first half 2022. You see, as you mentioned in earlier conference calls from Tom, we did the acquisition of the S&L Group, which is now included in the financial statements, and we sold the U.S. businesses from CANCOM. Clearly, in contrast, the revenue improved, the EBITDA, as you see here, is under pressure by higher cost. In particular, we cut back on other expenditures like travel and other items to pre-COVID levels. On the other side, we have increased our normal energy and gasoline and other costs.
We have to focus on rebalancing in the next quarters of our income and cost base during the next months to show as well growth here, not only in the top line, as well on the EBITDA. The main driver, as I like to repeat, we have the normalization of the orders from the public sector delivery capabilities. We have, and we see a strong demand from the private sector, and we need to be able to fulfill that demand. If I go to the cloud segment, we are on track with the ARR and showing a great growth full speed. That is a clear indication for our competitiveness of our managed and as-a-service offerings. If you see, we are more than well on track here in the normalized view.
Here, we expect high growth, and that underpins the strategy and the market demand that as-a-service solutions are expected from the customer base, from the market, from us. We see as well in the next quarters that the demand will be as well high. On the IT segment, clearly, as you already know, the impact of the current year, we have supply chain issues which are not really over. We see an improvement from several parts from different vendors here. The revenue development here is much more representative of the customer demand than we showed in H1. As you saw and see the 10.9% or 11% gets closer to our expectations we had early this year.
As I mentioned before, we have to focus on the rebalancing of income and our cost base during two months to also show a healthy growth on our EBITDA. Strategically, as I mentioned, you know, S&L, we acquired as a bolt-on acquisition and enriching our portfolio with SaaS and security, compliance and managed services. But as well as in regional part, we got some additional customers here, especially for IT projects in general. While revenue is returning to more normal levels, putting pressure on profitability. 11% margin in Q3 2021 was extraordinary. The 8.8% today is still okay. For the group, still okay. But we clearly, as a management team, have the task now to manage the cost base as some of us, as I mentioned before, just returned to pre-COVID levels, like travel costs and others.
Some of it's new based on inflation and rising costs for energy, IT products, and clearly for skills and wages. We already started, for example, to adjust our prices for services. We increased our price level for consulting here, and as for services as part of dealing with the situation. We expect that to get a normalized level here in the next quarters. The ARR, as I mentioned before, the growth from 23.9% here, whereof it's 21% is organic, yeah, shows that our offering, our capabilities are in line with the market demand on one side. On the other side, we put a lot of investments in to build solutions to fulfill the demand and be able and capable to deliver, which I mentioned is crucial in the current situation.
It goes in line with our strategic intention to drive the hybrid IT service provider here, where as-a-service solutions and managed service solutions are getting bigger part of our businesses. The demand in the market is still strong, and we see as well from our partners, yeah, as well from our vendors that they put as well more and more as-a-service solutions, yeah, where they expect we put managed services on top in the market. The KPIs, the performance indicators here in Q3, yeah. I'd like to hand over to Tom.
Thanks a lot, Rüdiger. My name is Thomas Stark, CFO of CANCOM, and it's a pleasure for me to have you in the call with some insights focusing on financial KPIs and some selected relevant events in the third quarter of 2022. Let's start with the toughest KPIs to talk about at the moment. Clearly, operating cash flow and the corresponding operating working capital are the crucial things in the overall industry. All the peers are affected from those topics, and they are at least similarly affected. That can be seen in when facing the results of the peers in the peer group. We are facing an unusual development, not comparable to the years before. You can see this pretty clearly by just taking a look at the slide, fiscal year 2020 and 2021 on the slide.
We have a total of EUR -169 million of operating cash flow in 2022, still heavily impacted from supply chain constraints. Meaning, unless all parts required for a customer's projects are available, we have to store the goods for the customers before delivering them. We additionally are often required to store goods on behalf of our customers for assuring a complete rollout for our customers, and so on. Still, supply chain issues have improved. Nevertheless, they are not vanished. They have not vanished. They are still in the market, and we are all affected by those impacts, and that can be seen best when you take a look at the operating cash flow. There's a peak in Q3. That is not unusual.
Operating working capital of about EUR 240 million, including AR position of EUR 405 million, and inventories of 143 million, for us definitely is. Well, apart from the supply chain issues, one more special one-off effect has to be taken into account. You all know that we are about to migrate our ERP system to SAP. Migrating to a new ERP system always is a serious topic to handle, and an organization always suffers from such a step. Q3 was the quarter with the biggest volume to migrate. Highly transactional business was migrated. At the end of the quarter, about 80% of the overall volume has been handled in the new ERP system, which is a big success.
Evidently, we are mastering the migration successfully, proven by a 10% increase in revenue handled basically in the new system. However, all the new processes, and particularly order to cash, are first less efficient than usually. Secondly, this means having to handle goods and processes redundantly in two systems. We are planning to have completed the overall migration by the end of the year to 95%, and then be able to handle operations in one ERP system significantly more efficiently. With regards to the fourth quarter, we are expecting a very strong positive cash inflow, just as in the previous years. With regards to CapEx, we can see a reduction. The development is well on track. For the course of the year 2022, we indicated at the beginning of the year a decline starting with Q3, which actually happened.
EUR 6.4 million represent the lowest CapEx number in the last 5 years for a single quarter, which is just as foreseen. This level would equal a CapEx to last 12 months ratio, sales ratio of less than 2%, which is pretty much in line with our expectations. In Q3, we've also seen an acquisition. Rüdiger has already talked about the acquisition of the S&L Group. The key facts we have already explained when presenting the financial statements of the second quarter. About EUR 15 million of revenues and about EUR 1.8 million of EBITDA generated by 94 employees. The first time consolidation was first of August, including three different legal entities, and the corresponding PPA is preliminary, and all the preliminary data are fully included in the Q3 statements. Effects on amortization are not significant.
The total impact is EUR 0.3 million in 2022, fully allocated to the IT solution segment. Amortization is going to decline to EUR 2.5 million in 2023, given there will be no further transaction. Finally, a few on EPS. In Q3, we also canceled 3.176 million shares. The new number of shares now is 35.37 million, with a positive impact on EPS going forward. We had classified our U.S. business as discontinued operations in the course of the second quarter. In the third quarter, effective 31st of August, we actually successfully sold our U.S. business. The business did not contribute in a noteworthy way to the results. The 2021 revenues were about EUR 18.5 million. EBIT was about EUR 1.5 million negative.
The discontinued effect in 2022 was minus 1.8 million, and you can find this shown in the line discontinued operations in the interim statement as of thirtieth of September. From a P&L perspective, except for minor advisor invoices, the divestment should now be fully included in the financial statements. Just as usually, we provide you in the earnings call presentation, and for sure on the website, with all the comparable data for 2021 and 2022, excluding U.S. business on a comparable basis to, well, enable you to model your models. Finally, to end from my side, we would like to provide you with a quick update on ESG in the third quarter. As the rating cycle for 2022 comes to an end, let's take a brief look at our ratings.
We have improved our ESG ratings, taking into account our most important rating agencies. Sustainalytics and ISS have already classified CANCOM as one of the top performers in the ESG arena. MSCI too significantly improved our score. We are participating in the CDP this year again, and are confident to reach the C awareness level as well. Finally, with regards to our sustainability strategy and our goals, we should achieve all the goals set, and communicated in our statement as of end of April. With that said, thanks a lot to all of you, and I would like to hand over back to Rüdiger.
Many thanks, Tom. Yeah. I like the next topic, the forecast 2022. As you know, we have already pre-released the group forecast and in general, we were not able to overcompensate the development in the first half in total. We are not far off either with regards to the segments development or the total development. Yeah. As you see here, we have the 2021 figures adjusted due to the sale of the U.S. and U.K. business in 2021. We expect that the cloud segments to be above EUR 280 million, so higher than expected, with EBITDA at least hitting the target of significant growth, and I explained it before to fulfill the market demands. The ARR is out of discussion, will be a perfect development this year and we believe as well in the future.
The IT solution segment topics have been discussed intensely with Rudi and Tom in Q1 and Q2, and this segment carries the lion's share of the weight of the higher cost base to its size. Our order book is still on record level. The order intake is good and shows no signs of any structural slowdown yet. We will close the year as best as possible. December is always the most important month for us of the year, and then push into 2023 with all the difficulties here of the first half of 2022 behind us. In total, it means we expect a growth in Q4 2022. To summarize as well, I thank Sebastian.
We will show now, as I mentioned earlier. I like to be available for investor dialogue, and as much as my schedule allows, I like to show progress on it. We have the financial calendar here on the 15th of November here at the BNP Paribas Exane MidCap CEO Conference in Paris, and end of November on the NLS conference with the German Equity Forum in Frankfurt. Many thanks.
Well, ladies and gentlemen, then thanks for your time, and hope to see you, maybe in person, again at some of the conferences. If this is not the case, have a good rest of the year and, yeah, bye-bye, and talk to you next time on the earnings call of the full year 2022. Bye-bye.