Hello, ladies and gentlemen, and welcome to the conference call of Medios AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press zero, followed by the hash key for operator assistance. May I now hand over to Claudia Nickolaus, Head of Investor and Public Relations and ESG Communications at Medios.
Good morning, everybody, and welcome to our conference call on our results for the first half of 2023. As always, all relevant documents can also be downloaded from our investor relations website. Additionally, this presentation can be followed in parallel via the internet link provided to you in the invitation. Today, with me is our CEO, Matthias Gaertner, and our CFO, Falk Neukirch. Matthias will start with an executive summary, followed by Falk, who will then provide details on the financials for the first half of 2023, as well as on the outlook for the current fiscal year. Finally, Matthias will comment on Medios' growth story. Both gentlemen will be then available to answer your questions. I would now like to hand over to Matthias.
Thank you, Claudia, good morning from my side as well. Ladies and gentlemen, welcome to the conference call on the results for the first half of 2023. The first half of the year was again successful for Medios against the background of the ongoing challenges. We managed to achieve a fast and strong recovery in the first half of the year, after a weak fourth quarter 2022, due to regulatory changes since September 2022. More important, we have laid the foundation for a strong third quarter. I can say today that the expected strong business development was already visible in July. We expect a very strong third quarter, driven by the strategic build-up of inventories in the first months of this year.
Accordingly, we are fully on track to achieve our targets and clearly confirm our guidance for 2023, with revenues up to EUR 1.8 billion and an EBITDA pre up to EUR 63 million. We continue to implement our Growth Strategy as planned and are well positioned for a strong second half of 2023. Here, also, the expected price increases in the pharma market will have a positive impact on our financials. Let's directly go to slide three, providing an overview of the highlights for the first half of 2023. First, we further strengthened our Patient-Specific Therapies segment through the sterile manufacturing collaboration with AfS as part of the acquisition of bbw, vista and Baden-Württemberg, as of January 2023. Following the strategic sale of Kölsche Blister in June, we have centralized all vista activities in bbw's lab near Stuttgart.
This is an important step to realize efficiency gains in blistering over the next year. Second, we posted good half-year financials, especially when taking into account regulatory headwinds since September 2022. Revenue reached around EUR 854 million, and EBITDA pre amounted to EUR 29 million, with a group margin of 3.4%. This development is based on sustainable growth of both business segments and the acquisition of bbw, included for 6 months. First half-year results are impacted by the strategically driven inventory build-up. Operating cash flows were correspondingly negative. Falk will provide some more insight on the financials later. Third, the implementation of our extended Growth Strategy 2025, is making very good progress, especially with regards to the internationalization of our business. We have identified several targets across Europe and are in ongoing talks with some attractive potential targets.
As briefly stated in our last call, we now also offer highly specialized parenteral nutrition care for prematurely born babies, and service prevents an impending supply bottleneck. We benefit from the diversification of our customer groups and strengthen our position as a reliable partner in the Specialty Pharma sector. Furthermore, we are already adapting our ESG reporting to the new European rules and regulations. For Medios, still on a voluntary basis this year. In a nutshell, in the first quarter, we set the course for 2023, and in the second quarter, we continued this path as planned, despite some headwinds. We built up inventories in expectation of higher prices later in the year, continued to successfully integrate NewCo Pharma and bbw, and intensified work on our internationalization strategy. As said, we expect a very strong third quarter.
On Slide 4, we summarize the most recent sale of Kölsche Blister, which was a strategic decision. Please be aware, this transaction had no material impact on our financials. Now let me share a short summary of the financials for H1, as illustrated on Slides 5 to 7. Slide 5 shows the quarter-on-quarter development of our 2 KPIs, revenue and EBITDA pre. Q2 recorded revenue growth and a slight decline in EBITDA pre, compared to the prior year period, due to regulatory price adjustments impacting our PST business since September 2022. Consequently, the EBITDA pre-merging for the second quarter of 3.3% was slightly below last year's level, but we expect margins to recover in the third quarter this year.
Revenue in the first half increased by around 8% to a new record of EUR 854 million, and EBITDA pre also amounted to a new record level of EUR 29 million, as shown on Slide 6. Most of our growth was attributable to organic growth. Falk will provide the details later. Slide 7 shows that we stick to our strategy of focusing more on the higher margin, Patient-Specific Therapies segment, to sustainably increase the margin of the entire Medios Group over the next year. Year-on-year, the EBITDA pre contribution of the PST segment remained stable, 43%, and is above our target share of 40%, as shown on Slide 7. Now let's move to Slide 8, which you probably already know very well. Our network of specialized pharmacies has grown further and now includes 750 partner pharmacies.
We are clearly the number one outsourcing partner for Specialty Pharma. This is an excellent basis for our further German expansion. Based on our increased capacity and the agreement of manufacturing for AfS that we mentioned before, we target to expand our compounding up to more than 400,000 individualized preparations in 2023, depending on indication area. On Slide 9, please find an update on our ESG activity. We intend to voluntarily adopt a non-financial consolidated statement to the new international standard, and requirements already for the current financial year, in particular to the rules of the Corporate Sustainability Reporting Directive, abbreviated CSRD. A further review of Medios S&P and Gaïa ratings was carried out in the first half of the year, leading to a rating improvement in both cases.
We are also proud of the award of Best M&A Production for the successful acquisition and integration of the NewCo Pharma Group. This was only possible thanks to the efficient organization and cooperation of all working groups on both parties. Teamwork at its best. In July, we were also honored with the Germany's Best Jobs with a Future 2023 Award. This recognition is based on an analysis conducted by the Institute for Management and Economic Research, IMWF, and Deutschland Test. They award companies that are both sustainable and economically successful, and offer their employees a pleasant working environment. We are also very proud to be part of a peer group, including very renowned companies like Roche, Bayer or Sandoz, and even outperform some of them. This is all from my side, from my side for the moment.
I now hand over to Falk to provide more details on the financials for the first half of 2023, and on the guidance for 2023.
Thank you, Matthias. Welcome from my side. I will now give you an overview on the financials for the first half of 2023. The full financial statement can be found on our website. Let's start with Slide 11. As Matthias already said, we had a successful first half, 2023. Revenues increased by 7.7% to EUR 854 million. A new half-year record due to continued organic growth in both operational segments, as well as inorganic growth by the acquisition of bbw in January 2022. Gross profit increased by 1.8% to EUR 54.4 million, with a slightly lower gross profit margin of 6.4% compared to 6.7% in the previous year. This is mainly due to the regulatory price reduction since December 2022.
The increase of personnel costs by 8.9% to EUR 17.8 million, results from organic growth in both operational segments. The acquisition of bbw continued build-up of central functions and scheduled salary increases. The increase of other operating expenses by 3.7% to EUR 10.7 million, was mainly driven by higher IT costs, especially for software licensing. EBITDA pre grew by 1.9%, resulting in an EBITDA pre-margin of 3.4%, which is slightly below the margin in the previous year, with 3.6%. As already mentioned, this is mainly caused by regulatory price adjustments in September 2022.
The EBITDA pre was adjusted by extraordinary expenses in the amount of EUR 3.1 million, thereof for stock options, EUR 0.7 million, EUR 0.1 million for M&A transaction costs, and EUR 2.2 million for performance-based payments for the acquisition of Compounding Volume. Depreciation and amortization slightly decreased from EUR 10.7 million to EUR 10.6 million. This includes already depreciation and amortization effect of the latest acquisition in the amount of EUR 0.4 million. Drawings under the RCF to finance the bbw acquisition and working capital needs in an environment of rising interest rates triggered an increase in financing costs by EUR 0.4 million to EUR 1 million.
By end of June 2023, an amount of EUR 45 million were drawn under the RCF, which is expected to be redeemed during Q3 2023. The decreased earnings per share are a result of the already described regulatory price impact, performance-based payments for the acquisition of compounding volumes and rising financing costs in the reporting period. The negative operating cash flow of minus EUR 75.2 million is a result of the build-up of inventory in preparation for expected upward price adjustments in the Pharmaceutical Supply business. The development is also attributable to the sales-driven increase in receivables and performance-related payments for the takeover of compounding volumes in the amount of EUR 5.7 million, related to the bbw acquisition.
The inventory will be reduced significantly by a scheduled sell-off, mainly in Q3 '23, with a corresponding positive impact on operating cash flow and margin. As stressed by Matthias, we expect a very strong third quarter, already visible in July results. Investing cash flow of -EUR 16.4 million resulted primarily from the cash component for the bbw acquisition of EUR 19.2 million. Financing cash flow of EUR 42.6 million resulted from the net drawings under the revolving credit facility of EUR 75 million. The drawn funds were used to finance the acquisition, the inventory build-up in PS segment, as well as the payments for the takeover of compounding volumes.
Mainly because of the inventory build-up, cash and cash equivalents decreased from EUR 79 million at the beginning of the year to EUR 30.3 million at the end of the reporting period. The equity ratio decreased from 77.8% by end of 2022, to 72.9% as a result of the loan draw. On slide 12 and 13, we provide a breakdown of the organic and inorganic growth by segment for the first half of 2023. Revenue grew organically by EUR 33.2 million, or +4.2%. Inorganic revenue, revenue growth amounted to EUR 28 million or +3.5%, driven by the acquisition. Around 82% of the inorganic revenue growth were allocated to our PS segment, and the remainder to PST segment. Organic growth of EUR 33.2 million occurred almost entirely in the PS segment.
Slide 13 shows the organic and inorganic EBITDA pre-breakdown by segment for the first six months of 2023. EBITDA pre increased inorganically by EUR 1.5 million as a result of the bbw integration. There, EUR 1 million were allocated to our PS segment, and the remainder to PST. The increased IT and personnel costs for central functions are reflected in the segment services. Let's now switch to slide 14. Both operating segments contributed to a sales increase of around 8%. In the Pharmaceutical Supply segment, its external revenue increased by 7.6% to EUR 734.1 million, of which EUR 23.1 million were attributable to bbw. External revenue generated by Patient-Specific Therapies increased by 8.6% to EUR 118.9 million.
EBITDA pre for the PS segment increased to EUR 19.9 million, which corresponds to an increase of 13.9%. EBITDA pre for the PST segment declined to EUR 12.5 million, -5.5% below the previous year. The decline in margin is mainly due to the already described price changes in this segment. Overall, the margin in relation to external revenue in PS was up 4.1% to 2.7%, whereas the PST margin is still double digits, decreased from 12.1% to 10.5%. On group level, the EBITDA pre-margin of 3.4% is slightly below previous year of 3.66%, we expect group margins to recover in the third quarter 2023. Slide 15 provides an overview of our current financing power.
In total, we have more than EUR 100 million of free funds available, resulting from available cash and the revolving credit facility. Medios net leverage ratio, net debt to EBITDA, still offers further headroom for debt financing. For example, by taking advantage of the step-up option of the existing revolving credit facility by another EUR 15 million. On top of that, we still have authorized capital that could be used for capital increase, which would further strengthen our financing power for future growth. Let's now switch to slide 17 and 18. We again confirm our guidance for 2023. Despite ongoing economic and regulatory uncertainties, we expect revenue to reach the range of EUR 1.6 million-EUR 1.8 million. EBITDA pre is expected to reach EUR 56 million-EUR 63 million.
The guidance takes into consideration assumptions as outlined on slide 18, for instance, regulatory price changes. The key message remains the same, the specialty pharma market is resilient and with growth stability. Our growth course will continue. A summary of our strategic priorities is outside on slide 19. For this, I hand over to Matthias.
Thank you, Falk. Now some word to our extended Growth Strategy 2025, comprehensively presented several times, so I will only provide a short update. Slide 19 shows the three pillars of our strategy. In addition to strengthening our core business in Germany, we intend to build a European platform and expand drug compounding operations into other European countries. We plan to further diversify our business model by entering the production of personalized medicine. Our statements on how we intend to strengthen our business in Germany remain valid. We still want to close the white spots in our geographic coverage by acquiring respective labs and/or conclude cooperation agreement. We will further diversify and expand our indication areas as implemented at the beginning of the year, where we started to provide parenteral nutrition for premature, mature babies nationwide. Now, I will update on the second pillar of our strategic priorities.
We are dedicated to geographically diversify our activities with the objective to create a Pan-European platform for compounding. By internationalizing our activities, we will leverage our knowledge and capabilities, create synergies and cross-selling opportunities, while at the same time becoming more independent of German healthcare regulation. The focus is on value-enhancing acquisitions in Europe and on developing mutually benefiting partnerships in Europe as well. We are currently in ongoing talks with several European players active in the compounding space. We are excited about the development and will inform the market immediately when the first transaction materializes. Now, some information on the third and last pillar of our extended growth story. Entering the groundbreaking personalized medicine market, summarized under the term advanced therapies, meaning medicines based on genes, tissues, or cells, all expensive and complex therapies.
This fits well as we are already a trusted partner for high-value drugs in Germany. Here, we are also already in talks with potential high-profile people that would join Medios. Besides that, we are in conversation with potential strategic partners. As outlined by Falk, we have a strong financial basis that enables the financing of our extended Growth Strategy. All this should lead to more than EUR 2 billion in revenues and an EBITDA pre-merging in the mid-single digits in the medium term. We remain confident that we are well on the way to achieving these targets, as outlined on slide 20. I would like to conclude my presentation with an outlook and a summary of the key messages, see also slide 21. We have achieved a solid performance for the first half and further strengthened our market leadership in Specialty Pharma.
We were able to mitigate the impact from regulatory changes by diversifying our product and by focusing on synergies. In the first half of the year, we already focused on inventory management. This has paid off. First success are already visible in July. We expect a very strong third quarter. We therefore confirm our guidance with full confidence, up to EUR 1.8 million in revenues and up to EUR 63 million in EBITDA pre. In addition, we are holding ongoing talks with several potential M&A targets in Europe. In a nutshell, our growth story is well on track, and we are looking forward to a good second half of 2023. Thank you for your attention!