Ladies and gentlemen, 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 difficulty hearing the conference, please press zero, followed by the hash key for operator assistance. May I now hand you over to Claudia Nickolaus, Head of Investor Public Relations and ESG Communications at Medios.
Welcome, everybody, to our conference call on our results for the first nine months 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 Gärtner, 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 nine months of 2023, as well as on the outlook for the current fiscal year. And 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. Ladies and gentlemen, welcome to our conference call on the results for the first nine months of 2023. We already published our preliminary key figures for the reporting period on the 21st of October. I'm happy to give you some more insights now. The first nine months, and especially Q3, were again very successful for Medios, especially against the background of the ongoing global challenges. Let's go directly to slide 3, providing an overview of the highlights for the first nine months of 2023. First, both segments are doing well. Pharmaceutical Supply had an excellent third quarter, not only benefiting from the sale of inventories. Furthermore, we managed to compensate the headwinds from regulatory changes since September 2022 in the patient-specific therapy segment. The business development shows that we are well positioned with our Specialty Pharma platform and our two operating segments.
Additionally, we increasingly benefit from the diversification of our customer group and have strengthened our position as a reliable partner in the specialty pharma sector. One good example is that we offer highly specialized parenteral nutrition care for prematurely born babies, and therewith prevented an impending supply bottleneck. The integration of bbw and the sterile manufacturing volume of AFS in our lab as part of this acquisition further advanced successfully. Following the strategic sale of ..., we have centralized all eastern activities in bbw's lab near Stuttgart. Second, we posted strong nine months and Q3 figures. Revenue for nine months grew by around 11% and EBITDA increased by almost 6%. Excellent Q3 results and record quarter. Revenue up by almost 17% to EUR 490 million. EBITDA increased by almost 13% to EUR 17.2 million.
Operating cash flow was positive for the first nine months and extremely strong in Q3 with EUR 86 million. That allowed us to fully repay our loan liabilities. Medios is debt-free and therefore has a strong financing power for growth and potential M&A. We are confident for the development of the fourth quarter and narrowed our forecast 2023. Revenue is now expected to reach EUR 1.8 billion and EBITDA to come in at EUR 60 million. Falk will provide some more insights on the financials later. And third, we are making very good progress with the implementation of our extended growth strategy 2025, especially regarding the internationalization of our business. The current focus is on value-enhancing acquisitions and on developing mutually benefiting partnerships in Northwestern Europe. Regarding our ESG activities, we can announce Medios' participation in the UN Climate Ambition Accelerator program.
The six-month program supports us in setting ambitious climate targets and provides guidance on aligning these targets with the Paris 1.5 degree target. Furthermore, we are currently working on the implementation of the Corporate Sustainability Reporting Directive, abbreviated, the well-known CSRD and EU Taxonomy requirements. Elements will already be included in our non-financial reporting 2023 for Medios, still on a voluntary basis. Finally, we are proud to have received another award in October. In addition to the M&A award, and just topped with the Future Award in July, we received the Employer of the Future Award in October. In a nutshell, in Q3, we made progress as planned, despite some headwinds. The strategic inventory build-up in the first half of the year has paid off and resulted in a strong cash flow. We were also largely able to compensate for the effects of regulation.
This positive development is reflected in the good financials for the first nine months, and especially in Q3. Furthermore, we continue to successfully integrate bbw and intensified work on our internationalization strategy. Let me now share a short summary on the financials for Q3 and the first nine months, as illustrated on slides 4 to 6. Slide 4 shows the quarter-on-quarter development of our 2 KPIs, revenue and EBITDA pre. Q3 was the best quarter ever in Medios history. Record revenue and EBITDA pre. Nevertheless, the ongoing regulatory price adjustments impacted our PS business to some extent. Consequently, the EBITDA pre-margin for the third quarter was 3.5%, or slightly below last year's level, but above Q2's margin. This slide is a wonderful example of how regulation offers great opportunities for Medios.
While our financials were affected by the regulatory headwinds in Q4 2022, we posted record KPIs three quarters later. I would like to stress that regulatory changes may have negative effects in the short term, but have positive effects for Medios as the market leader in the mid to long term. They also offer opportunities that we know to use, like, for example, the changed distribution process of hemophilia products in the past. Revenue in the first nine months increased by around 11% to a new record of EUR 1.3 billion, and EBITDA pre also amounted to a new record level of EUR 46.3 million, as shown on slide 5. Most of this growth was attributable to organic growth. Despite the regulation and difficult framework conditions, such as high interest rates, Medios has once again recorded sustainable growth.
Slide 6 shows that the share of the PS segment increased, especially regarding EBITDA pre. We are now roughly at our target share of 40% for PSP. This slide also clearly illustrates that we are very well positioned with our two segments. The ratio can be 10, and does always change, just as the therapies change. The good thing about our setup is that we can use synergies between the segments and compensate for any possible weakness or influences. Now let's move to slide 7, which you already know very well from my various references. Our network of specialized pharmacies now includes 760 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 approximately 400,000 individualized preparations in 2023, depending on indication areas and margin profile. This is all from my side for the moment. I now hand over to Falk to provide more details on the financials for the first nine months of 2023 and on the guidance for 2023.
Thank you, Matthias. Also welcome from my side. I will now give you an overview on the financials for the first 9 months of 2023. As always, the full financial statement can be found on our website. Let's start with slide 9. As Matthias already said, it was a successful first 9 months and an outstanding third quarter. Revenues increased by 10.9% to EUR 1.3 billion. 9-month records due to continued organic growth in both operational segments, as well as inorganic growth by the acquisition of bbw in January 2023. Gross profits increased by 2.6% to EUR 83.6 million, with a lower gross profit margin of 6.2%, compared to 6.7% in the previous year.
This is due to the already mentioned regulatory price reductions and the higher portion of revenue, as well as gross profit originating from pharmaceutical supply segment, which shows distinct lower gross margins than PST segment. The increase of personnel costs by 7.1% to EUR 26.1 million is a result of the acquisition of bbw, the ramp-up of manufacturing at PST segment, the continued build-up of central functions and scheduled salary increases, as well as performance related variable payments. Despite the constantly growing Medios group, organically and inorganically, we were able to freeze other operating expenses in the amount of EUR 16 million at previous year level. Mainly rising IT costs were offset by savings in a handful of other expense categories.
EBITDA pre grew by 5.7%, resulting in an EBITDA pre margin of 3.4%, which is below the margin in the previous year of 3.6%. As already mentioned, this is caused by the regulatory price adjustments in September 2022, and also by the higher contribution of the PS segment, which delivers lower EBITDA margins. The EBITDA pre was adjusted by extraordinary expenses in the amount of EUR 4.8 million, thereof for stock options EUR 1.1 million, EUR 4.3 million for M&A transaction costs, and EUR 3.4 million for performance-based payments for the acquisition of compounding volumes. Depreciation and amortization slightly decreased from EUR 16.1 million to EUR 15.8 million.
Depreciation and amortization effects of the latest acquisition in the amount of EUR 2.6 million is compensated by meanwhile fully depreciated PPA assets of former acquisitions. In the nine-month reporting periods, drawings under the RCF to finance the latest acquisition and stock building to benefit from price increases triggered an increase in financing costs by around EUR 800 thousand to EUR 1.6 million. The amount of EUR 45 million drawn under the RCF end of June were fully repaid in the third quarter. Undiluted earnings per share increased by 3% to 0.69 EUR, mainly driven by the strong third quarter with a 20% rise in EPS. The first six months were burdened by the already described regulatory impacts, performance-based payments for the acquisition of compounding volumes, and the just mentioned rising financing costs in the reporting period.
The very strong operating cash flow in the third quarter of EUR 86.0 million is mainly a result of the significant inventory sell-off in the PS segment. In contrast, operating cash flow in the first six months was negatively impacted by the corresponding buildup of inventories. We expect to reduce our inventory by an ongoing sell-off during Q4, a further positive impact on operating cash flow, and still expect an operating cash flow of roughly EUR 37 million for 2023. Investing cash flow of -EUR 16.5 million resulted primarily from the cash component for the BBW acquisition of EUR 19.2 million, less acquired funds. With no cash outflows or inflows from significant investments and divests occurred in the third quarter, investing cash flow was almost unchanged compared to the first half of 2023.
Financing cash flow of EUR -3.7 million resulted mainly from repayments of financial liabilities from rental agreements amounting to EUR -1.8 million, and interest paid on loan liabilities amounting to EUR -1.6 million. Free cash flow before M&A amounted to just under EUR 10 million in the first nine months, and around EUR 86 million in Q3, as CapEx spending was minor. The higher level of inventories of EUR 71 million compared to the end of 2022, is a normal pattern, as stock level in PS segment normally lowers at the end of the year. This we do also expect for end of 2023. Cash and cash equivalents amount to roughly EUR 70 million, which is one financing pillar for future firms.
The equity ratio decreased from 77.8% by end of 2022, to 74.4%, mainly because of an increase of trade payables to EUR 88 million, an increase of EUR 32 million by end of the reporting period. On slide 10 and 11, we provide a breakdown of the organic and inorganic growth by segment for the first nine months of 2023. Let's start with the slide 10. Revenue grew organically by EUR 91.2 million, or +7.5%, almost entirely in the PS segment. Inorganic revenue growth amounted to EUR 40.9 million, or +3.4%, driven by the latest acquisition. Around 82% of the inorganic revenue growth developed, are allocated to our PS segment, and the remainder to PST segment.
Slide 11 shows the organic and inorganic EBITDA pre-breakdown by segment for the first nine months of 2023. EBITDA pre increased inorganically by EUR 1.9 million as a result of the BBW acquisition. Thereof, EUR 1.1 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 12. Those operating segments contributed to an increase of external revenue of around 11%, but mainly driven by the PS segment. In the PS segment, external revenue increased by almost 12% to about around EUR 1.2 billion, of which EUR 33.5 million were contributed by BBW. External revenue generated by the PST segment increased by 5% to EUR 175 million.
EBITDA pre for PST segment increased to EUR 33.7 million, which corresponds to an increase of +19.5%. EBITDA pre for the PS segment declines to EUR 17.8 billion, 7.8% below the previous year. The decline in margin is mainly due to the already described regulatory headwind. So overall, the margin in relation to external revenue, PST, was up 4.2% to 2.9%, where the PS margin is still double digits, but decreased from 11.6% to 10.2%. As outlined by Matthias, we are well positioned with two operating segments, so that temporary adjustments in one segment can be compensated by the other.
On group level, the EBITDA pre-margin of 3.4% is slightly below previous year margin of 3.6% as a result of the already described effects. Slide 13 provides an overview of our current financing power. In total, we have more than 140 million EUR of free funds available, resulting from available cash and the RCF. Medios' net leverage ratio, net debt to EBITDA, still offers further headroom for debt financing. Let's now switch to Slide 15. Matthias has already briefly presented the further narrowed guidance. We now expect the revenue to reach approximately EUR 1.8 billion, which should be at the upper end of the forecast corridor of EUR 1.6 billion-EUR 1.8 billion.
EBITDA pre for the fiscal year 2023 is expected to be approximately EUR 60 million, reaching a value in the middle of the forecast corridor of EUR 56 million-EUR 63 million. The key message remains the same: the Specialty Pharma market is resilient and will grow steadily. Also, our growth course will continue. The summary of our strategic priorities is outlined on slide 16. For this, I hand over to Matthias.
Thank you, Falk. Now some words on our extended growth strategy 25, starting on slide 16, showing the three pillars of our strategy. In addition to strengthening our core business in Germany, we intend to build the European Specialty Pharma platform and expand drug compounding operations into other European countries. And we plan to further diversify our business model by entering the production of Advanced Therapies. All this should lead to more than EUR 2 billion in revenues and an EBITDA pre-margin in the mid-single digits in the medium term. We remain confident that we are well on the way to achieve these targets. Our statements on how we intend to strengthen our business in Germany remain valid. We still want to close the wide spots in our geographic coverage by acquiring respective labs and/or conclude cooperation agreements. And we will further diversify and expand our indication areas.
For example, we started to provide parenteral nutrition for premature babies nationwide at the beginning of 2023. I would like to give you more details on our European growth ambition, shown on slide 17. Our strategic priority is to create a pan-European platform for compounding. By internationalizing our activities, we will create synergies and cross-selling opportunities, while we will also be able to leverage our extensive platform of over 750 specialized partner pharmacies in Germany, by far the largest pharmaceutical market in Europe. We execute a disciplined M&A approach focused on five criteria. First, the target should be a leading top three player. Second, the target should generate revenues of maximum EUR 160 million and realize an EBITDA margin of at least 10%, or should get there in maximum 24 months.
Third, the target should have a nationwide coverage or platform and operate in an attractive regulatory environment that allows outsourcing of compounding. Fourth, the target should also have an experienced management and a cultural and strategic fit with Medios. And fifth, in the context of a successful transaction, scale synergies and cross-selling opportunities should be realized in less than 24 months. In a nutshell, the deal has to be clearly value accretive. We are currently in discussions with a handful of targets that meet these criteria. We are excited about the developments and will inform the market when the first transaction materializes. Now, some information on the third and last pillar of our extended growth story. Entering the groundbreaking market of 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. We have also made progress in this area. We are currently working on the target operating model for the Advanced Therapies division. We are happy with the new high-profile manager, who will be responsible for the new field Advanced Therapies, is about to start soon. Besides that, we are in discussions with potential strategic partners. As outlined by Falk, we have a strong financial basis that enables the financing of our extended growth strategy. I would like to conclude the presentation with an outlook and a summary of the key messages, see also slide 18. We have achieved an excellent performance in the first nine months, and especially in Q3. We further strengthened our market leadership in Specialty Pharma.
As outlined, we were able to mitigate the impacts from regulatory changes by diversifying our products and by focusing on synergies. We focused on strategic inventory management. This has paid off. We are confident about the rest of the year and narrowed our guidance, and expect EUR 1.8 million in revenues and EUR 60 million in EBITDA pre. In addition, we are in ongoing talks with several potential M&A targets in Europe. In a nutshell, our growth story is well on track. Thank you very much for your attention.