Start, it's 1:00 P.M.? Okay. Good afternoon, ladies and gentlemen, and thank you for joining us for our Half Year 2023 Earnings Conference Call. Krones with successful first half year 2023. That was the headline of our press release in the morning. We want to present you the figures and more details about the first half year 2023, and give you also the possibility to ask questions. I think you are very familiar with Teams and need no technical advice. As mentioned, after the presentation handled by Christoph Klenk and Uta Anders, you have the possibility to ask questions. You can send me a short email, and then I will hand over to you. Or if you have no possibility to send emails, just raise your hands or unmute the line. Let's start with the presentation.
I think we are all interested in the details and explanations about the figures. With that, I hand over to you, Christoph. The floor is yours.
Yeah. Olaf, thank you very much. Warm welcome, ladies and gentlemen, to the conference call for the first half-year of Krones. Pleasure to have you here. Uta and myself, we present, as always, the numbers. We share it, and we run you very briefly to the deck we have, because we are looking for the Q&A later on. That's the reason why I skip page 1, where the summary is, because we go in any detail, even those numbers you certainly have seen. I can say, comment to that, we are very happy with what we have achieved in the first half-year of 2023, and we are quite optimistic for the remaining outlook for the remaining year. All in all, we are standing here today being positive and happy what numbers we can present.
Now, first look on the order intake. If you look to that, we are in line with the planning we have made. I mean, don't forget, we have all the time stated that the order intake in 2022 was an extraordinary, with pick-ups effects. We had certainly after COVID, after COVID-19. When we see the order intake right now, we see in particular the Q2 as a new normal. This is actually the size we do anticipate looking forward for the remaining year, that we believe that a quarter will be between EUR 1.2 billion and EUR 1.3 billion per quarter. Q1 was good. We, we know all about that. We don't think it will go to that level, but again, I would say the new normal should be between EUR 1.2 billion and EUR 1.3 billion per quarter.
We wanted to bring that chart to your attention because it gives you a bit of a reflection where we stand with the real order intake without having those pick-up demands we have seen in 2022. I would say what you see here is, that even in case we state that the order intake was going back by 10% from last year to this year, half year to half year, that this is still a very good growth and outperforming the years before. Because if you look to the good years, 2017, 2018, and 2019, which have been on the profit side, not so good, but on the order intake side, in terms of volume, they have been very good. If you see that line and you draw that further down to 2023, you see that we are outperforming order intake.
That's the good message we have. I mean, we have all seen a drop in share price this morning, which created headaches for both of us. We were quite desperate, of course. No joking. I would say most probably, my interpretation, Uta and mine, is that the 10% decrease, if you look that isolated from 2022 to 2023, might have caused some of those, let me say, things we have seen this morning on the share price. Again, we believe this is a very good path we have in. It's a sustainable one, and as I said, if the outlook is per quarter, we see it approximated by EUR 1.2 billion-EUR 1.3 billion.
Let us have a short look on our markets, and I don't go into categories or whatever, but the important thing is here, if you look to the 2.7% growth of the beverage markets all over, and this is in billion of liter, it's, 1.75 trillion liter beverages, which we see around the world in total. If you see a 3% growth, it's actually 40 billion liter per year. This is what is standing here, and this is an outstanding number, because you can assume that we have 8 billion people around the world. We serve around 60% of the needed beverages and, liquid per day, so this is what is packed bottles, and 40% is still tea and coffee.
If you add all that up, you come to the numbers I just said, and this is a remarkable number in terms of liter, in case we have a growth of 2.7%. If we translate that in bottling lines, I would say there is a good potential for all of us being in the industry that investments are going on. Now, another look is what are the different packaging types are doing, and we see there a clear recovery of the PET bottle. We have stated that several times already, but here you see it definitely, let me say, in the analytics.
You see a slight decrease of the can, which we interpret, there was a shortage of cans at all in the market, and in particular, because of the shortage, and second, because the PET bottle is, in terms of the CO2 footprint, a very attractive product, and recycling gets momentum. I would say those three things are leading to the fact that we see PET further growing. Now, if you look to, let me say, where we are with that, these are Krones numbers, and our development since the nineties might be a, be a long term, but if you see how nice PET has developed in our portfolio, this is the orange line you see there, and has outperformed the other packaging categories, even if they have been not really going back. And this is something important.
You see that glass and can is slightly growing, but the majority of the growth in the beverage consumption was absorbed by the PET bottle as such. These are our numbers, and we believe that if you see the linear lines, and eliminate the curves, that we see a further growth of PET in our portfolio, and will have a significant share in the revenues we are generating. Just to underline that, we have done customer interviews in 2023. As you know that from us, we have spoken to around 100 customers around the world, all the big ones, all the significant local ones, some of the smaller ones, and this is the takeaway of it. I would say the takeaway of it is what we have said in earlier calls, that those who have invested in the crisis have outperformed others.
That's one statement, investment is needed in terms of getting costs down, getting sustainability ahead, and getting new products on board in order to allow for new market shares. Of course, automatization and digitalization is playing a huge role in all of the demands. I would say on the downside, I have to mention that, of course, the long lead times are something, if you look to the challenges on that slide, is an issue for us. We are at the moment at 75 weeks. That's too long. I would say our competition is slightly better, not too much, but slightly better. This is something we have codified in the industry, that delivery times will go down. This is something we are working on it, we will let you know later on where we are with that.
Lead times is an issue for us. We are going to bring, let me say, more output, and this is based on efficiency improvements. It's not on, let me say, extending facilities or something like that. It's just because we have utilized our capacities by 90%-95%, and with the further supply of electric components, which is the major bottleneck, we believe that we can increase revenue in the core by around 10%-12% just because of being more efficient and having the people on board. That's a look on how we see the industry, and these messages are here saying, okay, well, there will be a good investment pattern beyond 2023. We do anticipate that this will continue for 2024 and 2025.
Given the order backlog we have, I would say we are on a quite stable fundament to continue in the next 3 to 4 years, that we can manage Crown's in the right direction. That's the, let me say, the takeaway from the market point. Finally, I wanted to talk about sustainability. No new message for you. The only point I have to make. We are working hard on it. It's an every day-to-day job, and it's amazing because it's attracting people. I would say one of the reasons why we get the talent on board we need, is certainly having a reasonable and, I would say, authentic program around sustainability. We're getting this feedback quite good from the people we hire.
It's good to hear, and this is globally, so around the world, and we are very happy that we have people joining just because of that program, addressing different categories, how we do our commitment to address sustainability issues around the world. If you look to that, of course, we have numbers. This is the Scope 1 and 2 footprint Crown is, is aiming to. We are on a good way for 2023, so we are, I would say, better than the planning, which has certainly to do that, we have broad green power. This is an important factor in it, and we all know that as more as we go to 2030, it's becoming more difficult. It's not a linear path to walk through.
We have reserved significant money in our investment plans to get this along, because it will not go without investments, but we are on a good path. Finally, to the sustainability issue, we have been joining the econsense Forum for Sustainable Development of the German Business to see the companies participating there. We have been nominated for the German Sustainability Award. Not yet selected, but at least nominated, which is a great thing for us. Again, I can say, I mean, we are participating in any rating which is available and in any initiative which is at the moment carried out. We take the whole thing on terms of sustainability, very serious, and again, it's driving the motivation of our people. Finally, let's have a look, since we spoke about the markets and what is driving them.
Finally, we have a look on the distribution in the markets. We still see North America and South America extremely strong. This will continue for the year. Europe is a bit on a decline, but I wouldn't say that this is. I would call it stable. There is no concern about Europe, that this goes totally south, so you see that the numbers are still okay. What is a bit of a headache is Middle East, Africa, and this is mainly driven by FX issues. The currencies are weak and I would say to get hold of, let me say, foreign X is difficult for our customers in the regions, which is a reason why this is weak. Of course, we know about the civil wars, which are carried out at the moment in several countries, Sudan, Kenya, sorry, not Kenya, Ethiopia, Niger.
Burkina Faso, and we have some other instabilities in the area as well. This is a bit of a headache for us. Asia Pacific is doing well. They came in latest out of the COVID-19 situation, so they are doing good. Even China, if you look to 8.5 in 2022, to 6.5 in 2023, it's not of a concern, it's more a time, a question of timing. It's going to recover. I would say that order intake in China is okay. This one is revenue, so this comes okay and maintains on the level. Central-- Eastern Europe, Russia, Central Asia, I don't have to name. It's continuing, but you see definitely that since we have pulled out of Russia, that you see the impact into revenue split globally.
That's from my side, just in a nutshell, to give you an overview where we are, let me say, in markets and order intake, and hand over to Uta, go more into numbers.
Thank you, Christoph. Good afternoon, also from my side. Continuing on with revenue development, in the Q2 , Krones recognized EUR 1.122 billion revenue. That's a 12.4% increase in comparison to the comparable quarter of 2022. You can see, including the very good Q1 , we are now at EUR 2.321 billion revenue, which is a 16.9% increase. That's, from our point of view, remarkable also because we are still facing quite some bottlenecks or shortages in the supply chain. That's why that number is, from our point of view, also a good one. Yes, Q2 is lower than Q1.
That's simply because of the fact that Q1 had lower working days, and we had already indicated in Q1 that Q1 was a very strong quarter and that Q2 will be lower. We see an improvement for the second half of the fiscal year, and that's also one of the reasons why we increased the guidance for revenue growth from originally 8%-11%, now to 11%-13%. We will also see later that all segments contributed to the growth. Overall, from our point of view, a very good development, and also a development in line with our expectations. Same applies to EBITDA.
Q2 , EUR 106.5 million, 9.5%, after a Q1 which was slightly higher, but still we are at 9.5% year-to-date, which is a 0.7 percentage points increase in comparison to the same period of 2022. Reason being also that we have implemented all the measures we have started in 2020 and 2021, and that we have now full year effect of these measures. We are also confirming our guidance for EBITDA, 9%-10%, for fiscal year 2023.
Continuing on with EBT, development of EBT more or less follows what I've just said for EBITDA, with one small additional point, that we have a better interest result, which, which, at the end, contributes to the fact that our increase in EBT is higher in percentage, compared to 2022 than EBITDA. 42.3%, EUR 161.1 million, 6.9% overall. We want to mention at this point of time also that we have two, if you want to call them, special effects, both not being relevant for EBT or EBITDA, or not having an impact, or having a net effect of 0.
On the one hand, we have in the financial income, a positive interest effect coming from an income of the adjustment of a contingent purchase price payment. On the other hand, in the depreciation or amortization, we have a valuation adjustment of intangible assets. Both, as I said, equaling out to 0, so no net effect in EBITDA and EBT. Also for, for EBITDA or EBT, we are in line with our expectations. Anna? It nicht? Doesn't work. now, coming to personal and material expense, starting with personal cost. Year to date, 698, which is EUR 83 million higher than last fiscal year.
It comes, of course, from, we will see that later, on the one hand, additional headcount, and on the other hand, and we have mentioned that several times, that we have increases in payroll, which are globally at about 6%. We are at 30.1% payroll or personal cost in comparison to total performance. A slight increase in comparison to Q1 . I want to mention at this point of time also, that we have turned temporary labor, that we have turned temporary labor into own workforce, and that is also one of the reasons why we have a slight increase here in comparison to the Q1 , but still at a very stable ratio. Material cost, EUR 1.146 billion.
Also here, an increase, which of course comes from volume, but we can see that with 49.4%, we are still, still we are stable below 50%. If we are compare that to the Q1 , we are slightly lower. All in line with our expectation, and also the cost increases we are still facing are covered by the price increases we have implemented. Continuing on with employees.... Krones employed as of end of June, 17,746 employees. That's an additional of 582 in comparison to end of December, so 3.4%. The growth far lower than our revenue growth. If looking at the distribution, most of the increase comes from the outside of Germany, 375, 6.4%.
Krones AG, 184, 2.2%, outside of Krones AG, but Germany, rather minimal. Looking at where that headcount increase came from, I already mentioned that we have turned temporary labor into own workforce. We did that to make sure, to ensure that we have the workforce available, in terms of skills, but also in terms of availability, which we need to execute our backlog. We have turned approximately 200 employees into own workforce in Germany, but also in Hungary. On top of that, we have hired additional service technicians in order to execute, first of all, our backlog, but also to make sure that we can service our customers. On top of that, Krones.digital community, as already mentioned, Q1, an increase across the functions. Now, continuing on with the segments.
Here we see for all three segments, a stable development, starting with filling and packaging. Technology revenue is now at EUR 1.927 billion, that's an increase in comparison to the same period by 15.1%. It's slightly below group also because of the supply chain shortages we are still having. Q2 was a little bit lower than Q by the reasons I already mentioned. We increased also here, the guidance for the same reasons I mentioned for the group. Looking at EBITDA, 10.2%, EUR 197 million. Q2 , slightly below the Q1 , a very good development in comparison to 2022. Looking at the guidance, also, here we are within our expectations of 9%-11%.
Process technology, EUR 215 million revenue. Q2 , slightly higher than Q1 , with EUR 115 million. After the six months, we have an increase in revenue by 23%, we also increased the guidance from originally 50% revenue growth to now 20%-25%. EBITDA margin, also, in line with our expectations, in line with our guidance, 6.9% after two quarters, EUR 14.9 million. This we can also see quite a substantial increase in comparison to 2022. We have very minimal effects here from the acquisition of Ampco Pumps, because it's just one month in 2023, we expect more, of course, during 2023. Continuing on with intralogistics.
Also here, EUR 179 million good performance in revenue, although, as we mentioned several times, the first half year in intralogistics is usually less strong than the second half, still, we are having a 30.8% growth in comparison to 2022. Also here, the Q2 was slightly higher than the Q1 . We are keeping here the revenue growth in 2023 of 10%-15%. Looking at EBITDA margin, here applies the same as mentioned for revenue. It's usually a better second half of the fiscal year, with 5.3%, we are above what we had in 2022, and we are also in line with our expectations. Continuing on with equity and liquidity.
As you can see, Krones has added another EUR 38 million equity, and that's despite of the fact that we have paid out EUR 55 million dividends in the Q2 of 2023 out of the equity. I mean, with a net income of EUR 121, we had some FX changes. We came to the EUR 1.636 billion equity. That's a 38%, solid 38% equity ratio. We increased total sum of assets and liabilities also only by 3.3%. Looking at liquidity, cash, EUR 329, net cash, EUR 325. I will comment later on when talking about working capital and free cash flow on the change, on the decrease. Free credit lines at EUR 156.
Taking all together, close to EUR 1.2 billion liquidity for Krones, so a very solid position. Working capital, overall, looking at the average of the four quarters, we are at 17.2%, so below what we had in 2022 and still very low. You can see where the sources come from, and it's more or less what we had in all the other quarters. We are still carrying a high number of received prepayments from the high order intake. We had 22.9% and also slightly higher than end of December. Inventory is 15.5%. I mean, we want to make sure that we are able to deliver, so that's why securing the supply chain. Payables, 14.5%.
If we are looking at the overall figure, it's more or less stable. In percentage points, it's a little bit less. Receivables, here is reflected a higher business activity, 40.6% increase in comparison to 2022. Looking at the overall value for working capital, end of December, Krones carried a working capital of EUR 594, and we already mentioned at that time that this is historically low for Krones. We are now at EUR 851, and that's also the reason, coming now to free cash flow, that our free cash flow in the Q2 , but also in half year, is negative. I mean, also here, we want to mention, this is in line with our expectation, with our expectations, and as I said, main reason being change in working capital.
Coming to the various sources, I mentioned earlier the change in cash. We can see that at the second from the bottom line of EUR 346 in the fiscal year. Three sources, I mean, free cash flow before M&A, minus EUR 131. Q1 was minus EUR 21, Q2 being minus EUR 110. As you can see, main source, the negative change in working capital, where we are executing the backlog, but on the other hand, we are also on a growth path, which leads to the fact that we are increasing working capital. Other non-cash changes, mainly a depreciation. Other assets and liabilities also pay out from a course. CapEx on normal level and other in not that relevant here. Free cash flow, minus EUR 31.
M&A activities, that's the 90% of Ampco we have paid out. The third point, which led to the fact that we have a change in cash of EUR 345, that's EUR 100 million other financing activities, and this is, first of all, the payment of the dividend, EUR 55 million, but it's also lease payment, EUR 17 million. We had cash effects and foreign exchange because of devaluations. Christoph mentioned about Africa, so we had some effects there, which were EUR 26 million. Overall, bringing us to a cash at the end of the period of EUR 329. As we have said several times, all has to be seen in relation with the extraordinary high free cash flow in 2022 and 2021, with cash conversion rates well above 1.
I want to say also at this point of time, for fiscal year 2023, we are expecting a negative free cash flow, as we have it already. We expect a stabilization for the second half of the fiscal year. We have set a upper range, two-digit negative figure for 2023 whole fiscal year. Looking at 2024, we expect that free cash flow comes back to a normal, positive level. Last but not least, from my side, return on capital employed, stable at 17.8%, also in line with our guidance we have given, or even slightly above our guidance, 15%-17%, and in line with what we have forecasted or guided for, for midterm planning.
It's all coming from growth in EBIT, because capital employed, average capital employed, is more or less stable at a little bit more than EUR 1.6 billion.
All right. Thank you, Uta. Just to guide you through the outlook 2023, here you see the new target in terms of revenue growth, which we changed from previous 8%-11%, to 11%-13%. We confirm EBITDA on 9%-10%, confirm, of course, ROCE at 15%-17%. As I said earlier, we have a quite good view on the remaining year, and quite positive that we are going to achieve those numbers which we have laid out here. If we look to the segments, Uta mentioned that before, but here is a summary to say the revenue growth in filling and packaging technology is about 10%-12%, so this is a slight increase from 7%-9%. We confirmed a 9%-11% EBITDA margin.
You move to process technology, you see a growth of 20%-25% instead of the previous 15%-20%. We confirm the EBITDA margin of 6%-70%. Intralogistics remains as we have it guided already at the beginning of the year. If we sum all up, we are optimistic at 2023. We have a very good base for 2024, and we certainly might talk in the Q&A section about the backlog and how we see that. This gives a good fundament for 2024 and even for, let me say, our midterm targets we have in terms of growth, and even more important, in terms of profitability. For us, point number 3 is the essence of what we definitely need is an improvement of our supply chain, and in particular, electronic, electronic components.
All the rest seems to be okay. We have still one or two suppliers which are, I would say, in a, not weak, but not in, in an optimal position, so this will go away until the end of the year. That's our assumption. We have good programs in place. We have a very strong service business. This is a good fundament for the profitability in all regions, so there is no region where we have concerns about our service business. I would say after the excellent generation of the good free cash flow in 2022, as we said all the time, 2023 is not as good as 2022. However, we are definitely on the way to get that back in 2024 and optimistic for that.
I would say, as I said already, the guidance 2023 is good to reach our midterm targets. That's, in a nutshell from us, where we are after six months with Krones, and now we are happy to hear your questions and go into Q&A. Thank you.
Thanks to Uta and to Christoph about the market details and additional informations for the figures. Sorry, I, I was on mute. Thanks a lot to Uta and Christoph for the details. Yes, we have already some questions. The first questions are coming from Sven Weier from UBS. Sven, your questions, please.
Yeah. Thank you, Olaf. Good afternoon.
Good afternoon.
The first question I had was on chart number 8, where you show the annually installed filling capacity.
Mm-hmm.
3-year sales are still growing, but the annually installed filling capacity, the chart basically says it's lower than last year. Just was trying to make sense of that. That's the first one. Thank you.
Yeah. Yeah, that's, that's very easy to explain. If you look here, I would say usually we have experts in, in mind. We are looking to what is really at the customer, fully commissioned and six months after, because we have usually a period of six months after final commissioning at a customer, once we start the service. This was a few on, let me say, when the service gets into the, let me say, into the point where they can digest the installed capacity. That's where you see a bit of a deviation between, let me say, the good year. You see, for example, that the peak of 2018 and 2019 comes into the market 2021 in two services, because that was the view in it.
That's why you see a, a slight move on where things were going into the market or not. That's the only reason. The, the, the, the thing we wanted to say here is not so much about the predictability. You saw some of the deviation, how PET was going, and that PET is still on a stable basis, and our expectation is mid and long term, that it will continue this way.
Could you quantify how big the growth in your installed base has been or is at the moment, given the strong growth you had? Can you quantify that?
Good question. I mean, I, I, to be honest, I don't have a detailed number, but if you look to it, even with the low numbers of machines we are going to install 2022 and 2023, or get them into service, I have to call it this way, because of the low, low output, 2020 and 2021. It's the machine base we serve is still significantly growing, because usually we are serving 15 years. That's our calculation. If you look 15 years back, the installed base was much smaller. We get, let me say, smaller years away, where we have lower installed base. Even, let me say, the lower years right now, in, of 2020 and 2021, are significantly higher than the old one. We have no concerns in terms of the installed base for the services. This will continue.
Maybe for the next time we're going to prepare that, that we, that we get an overview of how big the growth is in the installed base we are going to serve. There is definitely a continuous growth, and this is a quite linear curve if you look to it.
I was indeed looking for the tail effect that we see in the service business, right after the installation, how many years it usually takes until you get the first kind of, you know, relevant service revenues out of the installation.
It's I would say it's between 12 and 18 months afterwards. If, if you, you look to really when revenue is closed, because then in most of the cases, the customer has a set of spare parts delivered with, and change parts, more spare parts, delivered with the machines once they are new. He can run it for the first six to nine months without help of Krones, and then the business starts. That's what we usually take as once we do service contracts, that we wait this half a year because we want to definitely, in many of the cases, decouple it from the new machine business.
I mean, on the new equipment side, you keep a certain discipline on new capacity, right? Which is also limiting, combined with the supply chain, the revenue growth to some degree. I mean, do you also have these limiting factors on the service business, or do you have enough people to cater for this service growth?
Yeah, the limiting factor is the service people. If you look to Uta's numbers, where you see the increase outside of Germany, a big proportion is service technicians. Let me say, to keep them on board became more difficult because traveling. I do not talk about Germans, I talk globally about around the world, that traveling becomes more of a problem for the people. That one of our biggest focuses we have, is to get good service, qualified service technicians on board, because we need between 2 and 3 years before they are really until, qualified on level 2 or 3, that are really good in the market. We need that for our service business in addition.
I would say the limiting factor is service technicians, but nevertheless, I would say we are on a good path to get them on board, and I wouldn't see that growth is limited by that. At the moment, we can manage that quite well.
The final question I had was on the chart on page 5, and thanks for the charts. They are, I think, quite useful, where you show the trend growth since 2006. I mean, I guess if we deduct your, I think, total temps and price increase from the order intake, right? I mean, it would show that even this year is actually slightly below the trend. I think we cannot see any kind of overinvestment or something that you would maybe think if you look at the 2022 figure.
Well, I, I mean, even in case you deduct pricing, I would say it's a linear growth you see, and a good growth, but nevertheless, it's not on a level that we would say we are now significantly increasing capacities. We are doing that even with a few on pricing, because, I think we all know the economical environment we are facing might become a bit more difficult, and pricing might become a question, and we want to be stable on pricing, and we don't want to, let me say, put ourself under pressure with having capacities which we have to fill, and then we have to do something on pricing. This is one of the reasons why we want to keep the track for the future.
I meant really that also, when you look at the 2022 bar, some people might be afraid that there's been some overinvestment, right? But I think if you look at it in real terms, right, it's, in my view, it's probably not, so.
Yeah.
Yeah. Okay.
We can perfectly fill the gap in 2020 and 2021.
Thank you.
Yeah, welcome.
Thanks to you, Sven, for the questions. I got some questions from Benjamin Thielmann, from Berenberg. Benjamin, could you ask your questions, please?
Yeah. Hey, good morning, or actually good afternoon, everybody.
Good afternoon.
Maybe one or two questions from my side. Do you actually see any order postponements going on so far? I mean, you have quite some exposure to carbonated soft drinks. Are you seeing any order postponements over there, or maybe a little bit of color on that topic?
Yeah, yeah. I would say we see both. We see cancellations, but... I have to say, cancellations are on the level which we have seen 2017, 2018, and 2019. This is not unusual that one or two lines are going to disappear. Let me say, that's on a very, I would say, normal level. Postponements, we see hardly any. Why? Because with the long lead times, the customers are usually anyway in desperate need of their lines.
Then I would say there is one factor coming into play, since we have, for example, in Africa, some, some critical circumstances in some of the countries, customer are redirecting, if they are multinationals, the equipment they have ordered to other countries, and this might lead then to, let me say, 2 or 3 months of postponement, but this is still on a very small scale. I would say, giving the big order backlog we have on one side, and let me say, the uncertainty forward we all see in the economy, I would say it's an extremely stable base we see right now.
Mm. Okay. Maybe one more question. You were mentioning that you currently have delivery times of probably 75 weeks, and that your competitors are doing slightly better over here. Can you give us a rough proxy, what lead times do you expect maybe at the end of the year? You were mentioning that everything should ease a little bit in H2 2023. Can we expect... I know it's hard to say a rough, a hard number-
No, I can say it.
Okay.
Unfortunately, I can predict that quite well, because if you look to our book-to-bill ratio, if we are what we say at EUR 1.2 billion-EUR 1.3 billion per quarter, the book-to-bill ratio is above 1, this would lead that the lead times will stay where they are. I would say they are not slightly slipping further away since we are increasing, let me say, performance and revenue for our core in the second half, but they stay where they are. Maybe it's the first time that I'm saying I would look more to a book-to-bill ratio closer to 1, that we get one day rid of those long delivery times. Nevertheless, I would say for 2023, we hardly see any change, and even 2024 is given more or less.
I would say this is something we are working on, and by increasing capacities, by efficiency measures, not by investing, let me say, in additional capacities, we might see, during the year 2024, improvements, but not before.
Okay, okay. Then maybe my last question in terms of passing through price increases. I mean, you passed through 6% and 4% in the past. Is there maybe an update on whether you're into current negotiations and passing through another price increase in 2024? Sorry, 2023.
Yeah. No, we, we, we do not do at the moment. What we have done is we have, in, in certain areas, we have done slight adjustments, but there is no general price increase. We believe that with what we see on the cost side and developments we see there, we are, in a good position for 2023, 2024, and beginning of 2025. That should be in good shape, and we didn't see that at the moment you could push prices higher than right now through. This is where we are.
Mm. Okay, maybe one follow-up then. Given that lead times are relatively high, do you see the risk that your margin gets diluted, kind of that the order backlog is at prices? Let's say, when you order nowadays, including the 10% price increase, and you wait 75 weeks for your machine, then the delivery date is due in roughly one and a half years. Do you see the risk that these prices are diluting your margin?
No. I mean, I explained that. First of all, when we source material, then we know the order once it's getting on board. I would say we are starting to execute around 12 months, maybe 10 months, before we have the whole thing Ex Works. This is far closer than you think, because you think now about the 75 weeks where we have to anticipate costs. We have to anticipate costs on the material side, when we have 75 weeks in around 30-40 weeks from today, by the latest. I would say, with the contracts we have in place, with the relationship we have with our suppliers, we have a pretty good visibility on material cost development. I would say, with the order backlog we have on board, we are on, on the safe side.
What we do, and this we have learned over the last 3 years, that we have review every 3 months how costs in the individual areas, personal costs, material costs, OEMs we buy, service technicians we need to hire, that we are reflecting those costs and build them in into our prediction on the timelines I have just said. With that, we are pretty sure that we don't have a dilution effect once we are executing those orders.
Mm. Okay, lovely. Thank you very much.
Yeah. Welcome.
Thanks to Benjamin for the questions. I got also, or not some questions, but the, now let me say, Jorge, Jorge Gonzalez from Hauck & Aufhäuser are asking to ask questions. Jorge, may your questions, please?
Yes, thank you very much. Thank you, Christoph and Uta, for taking my question.
Pleasure.
In fact, you answered most of my questions already, but I have one regarding the margin for the second part of the year. With your current guidance, obviously, this implied a stronger output in the second part of the year, and I was wondering if this means that you can improve the 9.5% margin you achieved in the first part of the year, or if we should be careful with this consideration? What you can tell us in this regard, please?
I mean, at, at this point of time, we are keeping the between 9% and 10%, and we also believe that we will be stable at what we are right now.
This is, related to the seasonality, and maybe that, you need to, to use additional-
Yeah
... or what is behind this, please?
Yeah, it's also related to the fact that we will have a higher new machine business in the second half of the fiscal year, which is usually then a negative mix effect. That's one thing. The other thing is that our segments will also contribute further, and that's also a little bit lower than the group margin.
Thank you very much, Uta, for the call. I go back to the line.
Thank you.
Welcome.
Welcome.
I'm looking for further questions. I have got some question received from Sebastian Growe from BNP, who is on a business travel. I will try to read his questions and ask you, Christoph and Uta. The first is about the order pipeline in brewers. Some brewers have started to see a decline in sales volumes as customers are more hesitant to accept implemented price hikes. Do you see a risk that slowing consumer spending might impact the timing of CapEx? Or do you see an investment mood as unchanged? It's related to the brewers, I think, more.
Yeah. I mean, we anticipated already that even with what I was saying, the EUR 1.2 billion-EUR 1.3 billion, since I would say that the brewing business as such was quite good in the first half-year, that this would go anyway down to a certain extent. Not, I would say, to a significant extent, but we will see maybe a couple of investments less than we have seen in the first half of the year. This is anticipated for the brewers, and this is overcompensated by the other segments we have. I would say, all in all, we still strongly believe in the EUR 1.2 billion-EUR 1.3 billion per quarter, and see, I would say, minimal impact on, let me say, the statements.
I mean, we can name it Heineken here today and in, in the Hunters plot, a big statement where they see themselves. On the other side, they have made significant investments, which will help us to have our revenues achieved. I would say that's okay. Yeah, brewing seems to be a problem, in particular because of some for the brewers. I said it earlier, Africa is an important market, and this is not performing well. This, this might have a slight impact, yes, but all the other markets are, I would say, doing to the expectation in the brewing section, and therefore, we believe that the other investments we see and we have in the pipeline are becoming due.
Thanks to Christoph. The next question is more or less similar to the question we already got from Jorge, but I read it again. We have seen EUR 25 million higher EBITDA per quarter in the first half year versus 2022. The question is, are there any reasons from a mix or cost structure? And what is the perspective for the second half year? Uta, I think you already have answered this, but perhaps you can elaborate.
I want to just reiterate that. I mean, we will have some mix effects because new machine business, because we are adding or we are freeing up the efficiency or the capacity we are having there, so new machine equipment will be more, and so that's a mix effect. In addition to that, higher revenue from the other two segments, which also come with a slightly lower margin. That's why we are confirming Q1 , approximately, the first half year, approximately where we there, where we were there.
Thanks to Uta, and the third and last question from Sebastian, was about the working capital and the midterm growth. We have seen an increase in working capital at the moment, also for the growth. The question is: What would be the development here in the net working capital in the next, up till 2024?
I mean, first of all, let's look at the current fiscal year. I mean, as I said, we are at EUR 851 after 6 months now, as of end of June. We are seeing that there will be a slight, further increase in the second half of the fiscal year, and, after that it will stabilize, and, and or it will only grow with the volume increase we are expecting, and also for 2024 and 2025. Stabilization in terms of percentage then also for 2024 and 2025.
Thanks to Uta and to Christoph for the question from Sebastian Growe. I see someone is Michał Majewski from Poland is raising his hands. Michał, your questions, please.
Yes. Hello, good afternoon. Can you hear me?
Yes, good afternoon.
Good afternoon.
question about your order intake. As you do not provide guidance on this KPI, but I am wondering, taking into account low level of manufacturing PMIs in Europe, this figure was down in first half. You mentioned it's from extremely very high base of the previous year, but how do you see development of order intake in coming quarters? Do you see any weakness on the market that may trigger that, for example, order intake can fall below this long-term trend line?
Well, well, I, I just want to confirm what I said earlier. We believe that, let me say, with the outlook we have, and this is for the next six months, qualified by the quotation pipeline we have out at the customers and a good understanding when, when they are going to close those orders. I would say that we are looking for an average per quarter of EUR 1.2 billion-EUR 1.3 billion. This would lead then, let me say, between EUR 4.8 billion and EUR 5.1 billion total order intake in a year.
If, if I say that that's for the remaining 2023, and this anticipates all up and downs, let me say, that Africa is performing not at the moment as assumed in the beginning. For that, I would say Asia and North America is still very strong. We have anticipated, as I said earlier, that brewers might order less in the second half of the year, and we have anticipated what is coming, let me say, in other areas, in other segments. In addition to that, we have gone through our core business quite in deep to understand the investment schemes of our customers. We have gone through the life cycle business, that we understand how this is going to develop over the next six months, and of course, we have been in processing and into adjusting, done the same exercise to understand.
Once I'm saying here, the average will be between EUR 1.2 billion and EUR 1.3 billion per quarter, then it's a very qualified statement I made with all the, let me say, the background I have just said of the various segments, of the markets, of the regions that we, we really are aware of where we are with that. I hope that helps you.
Yes, thank you.
Yeah, welcome.
I have a look in my mail folder. I don't see any questions here. Perhaps somebody who wants to raise his hands and ask some questions? Not at the moment, Uta and Christoph. I don't see any further questions.
Yeah.
Oh! No, no, it was just a thank you by Sebastian Growe.
Okay.
Okay.
Good.
No further questions.
All right.
I think.
Yeah. Thank you very much for joining us. I hope some of you still have your summer vacation in front of you and find some relaxing days. We hopefully as well. We are looking forward for the second half of 2023, and going to see you in after Q3. Thanks a lot. Have a good day.
Have a good day. Thank you. Thank you.
Thank you. Bye.
Bye, folks.
Bye.