Good morning, ladies and gentlemen. We welcome all of you to our conference call and wish you a happy New Year. The underlying presentation of the call has been published this morning at 7:30 A.M. CT on our homepage. Today, we released a statement for the first nine months of financial year 2022, 2023. We are going to present the highlights of this period and revisit our full year group guidance for business year 2022 and 2023 that has been raised once again on 2nd of November 2022. Following the call, we're going to answer your questions. A recording of this call will be available on our homepage shortly after the call. Now let me hand over to Südzucker CEO, Niels Pörksen.
Thank you, Nikolai. Ladies and gentlemen, also a warm welcome from my side to all of you. We wish you all a successful and sound 2023. Stay healthy. As mentioned, I would like to give you a brief overview about the business performance in the first nine months of financial year 2022, 2023, and details about the guidance for full financial year 2022, 2023. Let me start with the highlights of the first nine months results on page four. First of all, let me point out that we are still facing challenges and uncertainties linked to the Ukraine war that started February last year. This situation will certainly impact all the rest of the fiscal year and last into fiscal 2023, 2024. Despite these challenges, we have seen a very good performance in the first nine months.
Group revenue showed an increase of EUR 1.5 billion or 26%. Group EBITDA was up by EUR 286 million to EUR 805 million and group operating result by EUR 275 million to EUR 536 million. Cash flow increased by 59% and reached EUR 659 million. EPS after nine months came in at EUR 1.30 against EUR 0.33 last year. Net financial debt end of November 2022 came in EUR 401 million above prior year's level and EUR 187 million higher against end of business year 2021, 2022. Now, let's have a first look into the segmental performance on page 5, before we get into more detail segment by segment. Group revenues increased significantly by EUR 1.5 billion.
All segments contributed to this growth. Group operating result increased by EUR 275 million. This increase was driven by the segments CropEnergies, Starch, and Sugar. Let's continue with segment Sugar on page seven. Let me revisit our view on the global sugar market. This latest update in December 2022, IHS Markit has increased its deficit outlook for sugar marketing year 2021, 2022 to 2.6 million tons. The stock-to-use ratio decreased from 39% to 37%. For the current sugar marketing year, 2022, 2023, the forecast shows a surplus of 1.7 million tons, with only a small impact on the stock-to-use ratio that remains at a low level of 37%. This confirms a stable fundamental global market environment for the next 12 months. Let's have a look at the European sugar market environment on page eight.
EU market has changed to a net importer since campaign 2018, which has led already to three steps of price increase in the last three sugar marketing years. Looking at the significant further price increase on the stock market in the last six months, we monitor several reasons. First, the world market price as the fundamental pricing starting point has increased. Second, another year of decreasing EU acreage is officially confirmed, combined with weather-driven weaknesses leading to reduced output. Third, overall cost inflation led to higher procurement price for the whole industry and alongside the whole value chain. As a result of the persistent widespread drought in almost all of Europe, below average beet yields are expected. However, the above average sugar content due to the many hours of sunshine cannot compensate for this.
Therefore, we expect a campaign length of about 103 days against 124 days last campaign. The resulting overall sugar output from beet is expected at 3.4 against 4.2 million tons one year ago. As of now, we have signed about 90% of expected volumes of the 2022 campaign to an average price increase against last year of about EUR 300 a ton. This exceeds our original target of spring and our elevated target back in Q1. As a consequence, we raised our forecast beginning of November 2022. Now let's have a look into the concrete development in segment Sugar in the first nine months on page nine. Revenues in the Sugar segment increased significantly mainly due to higher sales revenues.
Operating results show a very strong performance, resulting in a positive operating result delta of EUR 104 million in quarter three, leading to an accumulated increase after nine months of EUR 142 million. The performance in the third quarter favored in part the sale of sugar inventories with lower costs from the 2021 campaign at the beginning of the new sugar marketing year. Let me continue with segment Special Products on page 10. In the first nine months, revenues in the Special Products segment increased significantly due to an overall positive development in sales volumes and higher prices. The operating result decline in quarter one and quarter two was stopped in quarter three. This reflects the first success in passing on cost inflation to customer level. This is due to continue in quarter four and financially at 2023/2024.
Let me now turn to segment CropEnergies on page 11. Revenues in segment CropEnergies were up sharply. Higher sales volumes and in particular higher sales revenues contributed to this revenue growth. Operating results developed in line with the development of sales revenues. The significantly higher sales revenues more than compensated for the considerable increase in raw material and energy costs. Despite higher raw material costs and decline in ethanol sales revenues in the course of the third quarter, earnings in the third quarter were on the same high level than in the same period of the previous year. The average ethanol price in the third quarter was at 882 against EUR 1,019 per cubic meter in quarter 3, 2021/2022. The average ethanol price in December was 722 against EUR 1,061 per cubic meter in December 2021.
In January, we see so far a confirmation of the lower price level of about EUR 700 per cubic meter. Let's move on to segment Starch on page 12. Revenues in segment Starch came in significantly above previous year's level due to substantially higher sales revenues, especially due to the ethanol pricing. In line with development of revenues, operating results after nine months increased significantly too. In quarter three, lower ethanol prices and higher costs strongly burdened the performance. Let's move on to segment Food on page 13. Revenues in segment Food were no exception in the general positive segment revenues development, showing a significant increase too. It was in particular price related for both divisions. Operating results came in on prior year's level following a significant decrease in quarter three. Let me now turn to the main point in the P&L on pages 15 and 16.
The results from the structuring and special items was mainly attributable to the Food segment totaling minus EUR 48 million, mainly due to the impairment of goodwill and property, plant and equipment in quarter two. The impairment test of goodwill was significantly influenced by the ongoing Ukraine war and the sharp rise in the cost of capital. The equity result was almost exclusively driven by the segment Sugar and Starch. The financial result came in at minus EUR 38 million. It contains the net interest expense of minus EUR 24 million and the other financial result of minus EUR 14 million. Let's continue on page 16. Taxes on income came in at EUR 107 million, after EUR 64 million in the same period last year. Earnings per share came in at EUR 1.30 against EUR 0.33 in the prior year.
Let me now turn to the cash flow, working capital and investment development on page 18. Cash flow increased in the first nine months by EUR 244 million to EUR 659 million. Cash flow against revenues ratio improved after nine months to 9.3% against 7.4% last year. The cash outflow from the increase in working capital of -EUR 368 million is mainly due to the higher trade receivables and the buildup of inventory as a result of higher raw material and energy costs. This temporary increase was only partially offset by an increase in liabilities to beet growers. Investments in fixed assets reached EUR 263 million against EUR 199 million in the last year.
Investments in financial assets and acquisitions represent mainly the announced acquisition of Meatless and Orange Nutritionals Group in the Netherlands in the total amount of EUR 57 million. Let me now move forward looking at the balance sheet on page 20. Cash inflow from operating activities of EUR 290 million includes the cash flow of EUR 659 million and an increase in working capital with a cash outflow of minus EUR 368 million.
The financing of investment in fixed and in financial assets totaling EUR 320 million and profit distributions for EUR 137 million led to an increase in net financial debt by EUR 187 million from EUR 1.46 billion end of February 2022 to EUR 1.65 billion end of November 2022, or EUR 401 million compared to last November 2021. Yielding is at 39% unchanged against last year. Equity ratio is also unchanged at 44%. Let me now turn to the outlook on pages 22 to 26. After continued good performance, we have adjusted once more our full year forecast upwards on 2nd of November 2022.
Today, two months later and in a still difficult environment, we can clearly confirm this strong outlook 2022, 2023. Ladies and gentlemen, let me put the forecast in the context of the current environment on page 22. The Ukraine war, which has continued from the start of fiscal year 2022, 2023 to the present day, has further intensified the already high volatility in the target markets and price increases in the procurement markets, particularly in the raw material and energy sectors. The resulting economic and financial impact, the security of supply, and the duration of this temporary exceptional situation are difficult to predict in fiscal 2022, 2023 and beyond. Risks may also continue to exist with regard to the corona pandemic. Having said that, now to the concrete numbers on page 23.
Following the group earnings increase on November, we would like to explain the new breakdown of results, which are largely influenced by the higher expectations in Segment Sugar. The forecast is as follows: Group revenues should come in at EUR 9.7 billion-EUR 10.1 billion and group operating result in a range between EUR 530 million-EUR 630 million. That means an increase of around EUR 250 million against last year. In Segment Sugar, we expect an earnings range between EUR 150 million-EUR 200 million. Segment Special Products operating result is expected to come in significantly below the per year level. Segment CropEnergies operating result is expected to range between EUR 225 million-EUR 255 million. Segment Starch should see a stable operating result.
Segment Food expects significantly lower earnings. Let me continue with page 24. EBITDA range of EUR 890 million-EUR 990 million should follow the positive operating result development. Capital is expected to increase. Net financial debt is expected to be significantly higher prior year's level, reflecting the temporary higher working capital needs in light of the inflationary environment and the higher investments. Ladies and gentlemen, let me summarize our forecast for fiscal 2022, 2023. The presented figures clearly underpin that Südzucker Group is back on track, delivering strong and well-diversified structural cash flows on level of EUR 500 million. I would like to refer on page 26 to our first guidance for fiscal year 2023, 2024 we announced on 15th of December 2022.
This announcement was unavoidable as the regular still ongoing budget process showed that a further significant increase in the group's earnings figures should occur in the majority of possible scenarios we calculated. Against this background, the initial forecast for 2023, 2024 assumes a further increase in group revenues. Group EBITDA is expected to be in a range between EUR 1 billion and EUR 1.2 billion and group operating result in a range between EUR 650 million and EUR 850 million. The expected further significant earnings increase will mainly be driven by segment sugar. The overall underlying group assumptions are that the energy supply situation will stabilize.
Südzucker will continue to benefit from the energy prices that were hatched early on, even before the start of the Ukraine war, and the achieved favorable sugar price level of autumn 2022 will be confirmed in autumn 2023. Ladies and gentlemen, further information with first guidance for 2023, 2024 will be provided as the case may be, and certainly in detail on the annual balance sheet press conference in May 2023. At this point in time, it is important to point out again that this positive development, certainly confirming the achieved high and diversified structural cash flow level of around EUR 500 million, also supports our strategic ambitions shared with you the last quarters. Thank you all for your attention.
Ladies and gentlemen, thank you for your patience. Let me hand back to the operator to open up the floor for your questions.
Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. Our first question is from the line of Oliver Schwarz from Warburg Research. Please go ahead.
Good morning, gentlemen. Congratulations on the strong results in Q3 2022-2023. I've got some questions. I will take them one by one. Firstly, the tax rate was down to 22%. Is that sustainable? What would you expect for the full year of 2022, 2023, please?
We expect for the full year, let me say, and then tax rate on the level we published for quarter three, 22%-23%.
Thank you. Can you elaborate, how this rather low tax rate, is compounded? Because it's a bit lower than it used to be. That's why I'm asking.
Yeah. We have the situation in the current fiscal 2022, 2023 that we profit from tax losses in some areas, for example, in ethanol, in Zeitz plant as well as for Südzucker AG that we can use this tax losses in the current fiscal 2022, 2023. Clearly looking forward, we have here high potential if sugar operations will further be on the projected, forecasted, to save taxes going forward. That is the main reason and the further reason for this low tax rate, 2022, 2023 is the increase in the tax at equity result in 2022, 2023.
Thank you for the clarification. In regards to the oncoming periods, obviously you should have a lot of taxes carryforwards from the rather meager years, especially in the sugar segments, from the losses that were generated in the segment. How much of that can be employed? Will we see, let's say, an asset in the balance sheet from those tax loss carryforwards that is then to unwind in the coming periods? Is that something that you would only, let's say, implement once the European sugar market is basically a structural deficit market and not only a deficit market due to adverse weather conditions like we had in the last two years?
Oliver Schwarz, we have to make our assumptions, our adjustment, also looking on the IFRS rules at the closing February 23, how we foresee sugar operations midterm. If the environment, as you said, is as positive, then there is a possibility to calculate these tax losses, there is clearly the possibility of a EUR double-digit million amount that we can book in. This is too early to give you a clear signal that we can do that. You know, we are here more on the cautious side, this is possible.
Thank you for that. Last question, is on raw material and energy hedging. Obviously, prices, especially for natural gas, has come down quite substantially in autumn and also in the beginning of winter 2022. Obviously not where they used to be, but much lower than, for example, in summer 2022. Also we saw some movements in prices, for example, of corn and wheat. Can you elaborate how much of your energy for the coming periods is now fully hedged? The hedge rates in that regard would be mostly interesting. Thank you.
I can make it very easy. We discussed that also in the quarter two and quarter one call, Oliver. Hedging rate has slightly increased for the year 2023. On group level, we talk about an hedging rate of 68%.
Okay. 68%. Got that. Thank you very much.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by one on your telephone. There are no further questions at this time, and I hand back to Nikolai Baltruschat for closing comments. Oh, sorry, I need to correct myself. We have a follow-up question from Oliver Schwarz again.
Sorry, I wasn't in the know that the other participants were fully loaded with information, and I was the only one lacking. To expand on my last question. When looking for example, at CropEnergies' business model, obviously, bioethanol prices, and you elaborated on that, have come down quite significantly from their peak and now seem to stabilize somewhere in the high 700 EUR when looking at let's say, the future markets. That's price points that are available on Platts.
When looking at the raw materials, can you give us, let's say, an indication or feel how much of the raw material prices have already been locked in for the oncoming fiscal year at CropEnergies?
Oliver, for the current fiscal year, we can say that for the raw material needs are more or less fully hedged for 2022, 2023, and for the next year only, let me say, a smaller portion of the raw material needs of CropEnergies are hedged.
Okay. Thank you. Last but not least, looking at fruit, obviously, there is still some potential for earnings accretion giving the recent developments and expectations for the current fiscal year, which are rather depressed. Is there, let's say, anything in the cards that you could do to structurally improve the earnings from the fruit segment besides, let's say, the usual fluctuations of supply and demand that may lead to higher earnings in some years and lower earnings in some other years? Is there anything structural you are planning to implement to, let's say, increase the operating profits of that segment structurally?
Oliver, I think the fruit management is doing a great job and is working hard to improve the resilience of the fruit overall segment. Clearly in the current fiscal 2022-2023, this is the segment of food preparations, which is the most negatively influenced from the Ukraine war due to the assets they run in Russia, they run in the Ukraine. Therefore, this is, let me say, unavoidable, this negative influence, and these are regions with extremely high profitability.
Measures are clearly to look for new applications, for new, let me say, customer areas, to increase, let me say, sales price mix, and as well on the other side, also to reduce, let me say, overall costs in the whole structure of this global business. This is clearly say on the, let me say, one of the top priorities for the food management.
Okay. Thank you so much for that. Lastly, perhaps on starch. Obviously, they got hit by higher raw material costs in Q3, but overall the 2022 to 2023 development was rather beneficial, I would say. Is that, let's say, the result of all factories now running at full capacity, or is there still some, let's say, room for improvement? Again, is when looking at raw materials, is the raw material price locked in, and how long do you think will it take for starch to pass on the higher raw material and energy prices to customers to basically bounce back to a higher level of profitability?
Oliver, a lot of questions. First of all factors run more or less at full capacity. The team is working hard to pass on, let me say, the higher cost basis energy, raw material to customers. In the current fiscal up to Q3, let me say the good development we have seen in starch was also backed by the high ethanol prices. The forecast implies for the full year, also now this lower ethanol price level we have seen over the last weeks to be here really clear on the safe side.
Okay. Thank you very much. That's it for my questions.
The next question is from the line of Fritz G. Eggert . Please go ahead.
Good morning. Thank you, Thomas and Nikolai. Well, I can confirm that the beet campaign this year ran surprisingly well. In regards to natural gas availability, you have taken as far as I know, a lot of precautionary measures to secure the energy supply of your sugar beet factories this year. They were not mainly not used. Can these precautionary measures be useful for the next year's campaign in 2023, 2024?
Fred, thank you for this really important question. Yes, we made really hard work to be flexible on the energy side and therefore, we bought very early heavy oil as well as light oil, and especially the heavy oil we stored. This is one of the points why the working capital has increased so extreme. We can profit from that reserves going forward in the next campaign, 2023, if there would be a shortage in gas or in other usages. This is very important that we have here a safety net for the next campaign, 2023.
Super. Thank you.
Thank you. That seems to be the case that we don't have any further questions. In case you have further questions, certainly there's no problem that you can also contact us after the call. I just see that Alex is sneaking in. Alex, please go ahead with your questions.
Yeah. Hi. Thanks, Nikolai. Sorry, I was slightly late onto the call. Just.
No problem.
Just in terms of the unchanged guidance, obviously you've raised it a number of times already. After the very strong nine-month delivery, it does imply, I guess, a much weaker Q4 relative to the isolated Q3. I'm guessing sort of, you know, ethanol is obviously a, you know, prices are a big part of that. I mean, is there any other kind of particular call-out for quarter four?
Alex, first of all, clearly we raised the guidance, second of November. Yeah?
Yeah.
Now clearly we released this really strong quarter three numbers.
Yeah.
We have now two months, we are now two months later. Let me say, first of all, I think it's very, very strong message to say that, environment with this extreme volatility, that we can clearly confirm, this increased guidance from 2nd of November. You have to, you have in mind clearly, that quarter four is every year the weakest quarter from the volume side.
Sure.
In nearly all our divisions, you know. Then we have to clarify it. I mentioned it in my speech also. Really, we have seen a really strong quarter three in sugar. This was clearly positively influenced by the sale of stocks from old campaign.
Yeah.
The campaign 2021, with clearly lower costs. Yeah. We could sell them with a new increased price levels, yeah. Not for the whole quarter, but for two months. Yeah. In segments, CropEnergies and starch, we saw now already in Q3 weaker results than in Q1, Q2. Then we have to also to take into consideration the significantly decreased ethanol price. Yeah. We are down from EUR 1,000- EUR 700, and this is also reflected, let me say this, in our guidance, and the weaker performance in Q4 than in Q3. The other case is the ethanol price would have been stayed at EUR 1,000, yeah. Now it is at EUR 700.
Yeah.
This is, let me say a further point. Then segment food also is looking for a weaker performance in quarter four. That is, let me say, the main points, why we are, let me say, on the same level than in November 2022. Yeah. That are the main points why we speak-
Yeah.
Why we speak to that guidance.
Yeah. That's very clear. Thank you. Thank you for that.
Okay. Alex, further questions or seems not to be the case. Now thank you all for your participation today and, yeah, we're also happy to take your questions after the call and, we all wish you again a very good start into the year. Stay healthy and well and, we'll talk to you soon. Thank you. Bye-bye.