Thank you. Good morning, ladies and gentlemen. We welcome all of you to our conference call this morning. The underlying presentation for the call has been published this morning at 7:00 A.M. CT on our website. Today, we released a statement for the first three months of financial year 2023/2024. We are going to present the highlights of this period and revisit our full year guidance for business year 2023, 2024, that has been raised again today. Following the call, we are going to answer your questions. A recording of the call will be available on our homepage shortly after the call. Now, let me hand over to Südzucker's CFO, Thomas Kölbl.
Thank you, Nikolai. Ladies and gentlemen, also a warm welcome from my side to all of you. As mentioned, I would like to give you a brief overview about the strong performance in the first three months of financial year 2023, 2024, and details about the increased guidance for fiscal 2023, 2024. Let me start with the highlights of the first three months, which starts on page five. We are happy to report a very good start into fiscal 2023, 2024. Having stated that, it's important to add that there are still nine months to go. I will also take this up again later when explaining the forecast. In the first quarter, group revenue showed an increase of about EUR 250 million or 11%.
Group EBITDA was up by EUR 120 million to EUR 356 million, or 51%, and group operating result by EUR 119 million to EUR 282 million, or 73%. Cash flow increased by 61% and reached EUR 295 million. EPS, after three months, came in at EUR 0.80, against EUR 0.43 last year. Net financial debt, end of May 2023, came in working capital-driven, EUR 594 million above previous level, and EUR 88 million higher against end of business year 2022, 2023. Standard & Poor's holds a long-term issuer credit rating of BBB-, and Moody's of Baa3.
In light of the continued improvement of financial ratios over the last year and the favorable guidance for fiscal 2023, 2024, both rating agencies have decided to increase the rating outlook from stable to positive in June 2023. Let's have a first look into the segmental performance on page six before we get into more detail, segment- by- segment. Group revenues increased significantly by EUR 243 million to EUR 2.5 billion, mainly driven by the Sugar, Special Products, and Fruit segments. Group operating result increased by EUR 119 million to EUR 282 million. This increase was driven by the Sugar and Special Product segments. Let's continue with segment Sugar on page eight. First of all, let me revisit our view on the global sugar market.
In its latest update in April 2023, S&P Global has changed from expecting a surplus to expecting a balanced market for the current sugar marketing year, 2022, 2023. The stock-to-use ratio stays low at 35%. For the next sugar marketing year, 2023, 2024, the forecast shows a rather small surplus of only 0.7 million tons, with no impact on the low stock-to-use ratio remaining at a level of 35%. 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 9. The European market has changed to a net importer since campaign 2018, which has led already to several steps of price increases in the last three sugar marketing years.
Looking at the significant further price increase on the spot markets in the last 12 months, we monitor several reasons. First, the world market price as the fundamental pricing starting point has increased. Second, another year of limited EU acreage, combined with continued difficult weather conditions, leads to uncertainty about the expected output in autumn 2023. Third, it is still important to mention that the overall cost inflation leads to higher procurement prices for the whole industry and alongside the whole value chain. Now, let's have a look into the complete development in segment sugar in the first 3 months on page 10. Revenues in the sugar segment increased significantly despite declining sales volumes as a result of the poor 2022 harvest, due to significantly higher prices. Operating results shows a very strong performance.
The drastic increase in costs, particularly for raw materials and energy, was offset by higher revenues since the end of the last fiscal year. Let me continue with the segment Special Products on page 11. Also, segment Special Products had an excellent start in the new fiscal year. In the first quarter, revenues increased significantly due to higher prices, while volumes showed a mixed picture. The operating results showed a significant increase, reflects higher margins overall. In quarter one, we were more successful in covering the burdens of significantly higher raw material, packaging, and energy costs through higher selling prices. Let me now turn to segment CropEnergies on page 12. Revenues in segment CropEnergies were down sharply. In addition to significantly lower sales volumes due to scheduled maintenance shutdowns in two factories, this was also due to a marked decline in ethanol prices.
Operating results followed the development of sales volumes and selling prices and fell significantly short of the exceptional strong prior year quarter. CropEnergies was still able to benefit from the positive effects of early price hedging for raw materials in the prior year quarter. The price increase on the markets in the meantime, was now also reflected in the net raw material costs. Co-product revenues couldn't fully compensate for the significant increase in raw material costs, so higher net raw material costs had a negative impact. The average ethanol price in the first quarter was at EUR 843, against EUR 1,155 per cubic meter in the last quarter, 2022-2023. The average ethanol price in June was around EUR 775 per cubic meter, against EUR 1,274 per cubic meter in June 2022.
In July, we see so far a price level of about EUR 750 per cubic meter. Let's move on to segment Starch on page 13. Revenues in segment Starch were stable. The significant overall price increase largely offset the substantial decline in volumes. Operating result was moderately down. Overall, significantly higher raw material and energy costs, declining sales volumes and higher other costs could not be fully offset by substantial price increases. Let's move on to the segment Fruit on page 14. Revenues in segment Fruit showed a significant increase. The increase in sales was price driven for both food preparations and fruit juice concentrates. The slight decline in volumes for food preparations and a significant drop in sales volume for fruit juice concentrates were offset. Operating result came in significantly above prior year's level.
The profit contribution from food preparations increased despite a slight decline in volumes and higher costs due to significantly higher margins. The profit contribution from fruit juice concentrates also increased. Higher prices more than offset higher costs and a significant decline in volumes. Let me now turn to the main point in the P&L on page 16 and 17. The result from restructuring and special items was marginal. The equity result was almost exclusively driven by the Sugar and Starch segments. The financial result came in at EUR -27 million . It contains the net interest expenses of EUR -23 million and the other financial result of EUR -4 million . Let's continue on page 17. Taxes on income came in at EUR 56 million , after EUR 38 million in the same period last year, with no change in the underlying tax rate.
Earnings per share came in at EUR 0.80 against EUR 0.43 in the prior year. Let me now turn to the cash flow, working capital and investment development on page 19. Cash flow increased in the first three months by EUR 112 million to EUR 295 million. The cash flow against revenues ratio improved after three months to 11.7% against 8% in the last year. Cash outflow from increase in working capital of EUR 296 million was mainly due to the reduction in liabilities, in particular as a result of cash payments in March 2023, and the further increase in trade receivables, which was only partially offset by the cash inflow from the sale of Sugar inventories. Investments in fixed assets reached EUR 79 million against EUR 65 million in the last year.
Investment in financial assets and acquisitions were marginal. Let me now move forward, looking at the balance sheet on page 21. As explained, the cash outflow from operating activities of EUR 3 million includes a cash flow of EUR 295 million and an increase in working capital with a cash outflow of EUR 296 million. The financing of investments in property, plant and equipment and financial assets totaling EUR 80 million and profit distribution of EUR 6 million, resulted in an increase in net financial debt of EUR 88 million from EUR 1.86 billion end of February 2023, to EUR 1.95 billion, end of May 2023, or EUR 594 million higher compared to end of May 2022. Gearing is at 45% against 33% last year.
Equity ratio is at 45% against 48% one year ago. Let me now turn to the outlook on pages 23 - 27. After a very good performance in Q1, we adjust once more our full year forecast upwards today. Ladies and gentlemen, as stated at the beginning of the presentation, let me put the adjusted forecast in a general context. Although it might be rather calm in our private or business environment and one or the other negative scenario has not set in, we all have to remind ourselves again and again that there's still a war in Europe. The situation around topics such as energy and inflation or the poor economic development is far from being solved.
If we continue to hold a comprehensive disclaimer, this is not an overcautious approach, but a well-considered and justified decision. Can only urge everyone to remain equally attentive and prepared and not to take anything for granted. Having said that, let me now continue with the concrete numbers on page 23. The group's forecast for fiscal 2023, 2024 was published for the first time on December 22, increased on April 23, and is now being raised again today. For fiscal year 2023, 2024, we continue to expect group revenues to come in between EUR 10.54 billion - EUR 10.9 billion. For group operating profit, we now expect a range between EUR 850 million- EUR 950 million. This means we increase the midpoint by EUR 100 million from the old range.
It reflects the increase of the expected earnings range of segment Sugar, which is raised by EUR 100 million too. In segment Sugar, we expect now an earnings range between EUR 500 million - EUR 600 million. The old range was EUR 400 million-EUR 500 million. No adjustments were made in the other segments. Segment Special Products operating result is expected to come in significantly above the prior year's level. Segment CropEnergies' operating result is expected to range between EUR 95 million-EUR 145 million. Segment Starch should be significantly lower in operating result. Segment Fruit earnings should come in on prior year's level. Let me continue with page 24. Group EBITDA range has been raised to EUR 1.2 million-EUR 1.4 million, reflecting the increase in the operating result expectations.
CapEx is expected to increase to about EUR 600 million, mainly driven by measures to achieve sustainability targets, especially in the Sugar, Special Products, and CropEnergies segments, for example, as within the SBTi framework. Let me continue with page 25. Net financial debt is expected to come in about the prior year's level. However, it must be clearly marked here that the degree of uncertainty is still high, as working capital requirements, for example, can fluctuate strongly. That has now come to the end of the presentation on page 27. Ladies and gentlemen, the percentage figures clearly underpin that Südzucker Group is back on track, delivering strong and well-diversified structured cash flows on high levels. Last year, we explained that we want to increase the headroom by improving earnings and thus freeing up funds to proactively shape Südzucker's future.
Than expected, we have reached this milestone with an expected EBITDA of EUR 1.2 billion-EUR 1.4 billion in fiscal 2023, 2024. Well considered and continuing to keep a clear eye on reducing debt, we want to take advantage of the opportunities to systematically pursue our strategic goals. In this way, we can safeguard what we have achieved, prepare the company even better for the fluctuations of the future, and thus contribute to a sustainable, profitable increase, creating value over time. Ladies and gentlemen, thank you all for your attention. We are looking forward to your questions. Thank you.
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. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. Our first question today is from Oliver Schwarz, from Warburg Research. Your question, please.
Thank you. First of all, gentlemen, congratulations for the good results. Happy to see that, obviously some questions remain. I will try to ask them one- by- one. First of all, related to the strong increase in working capital, can you shell out how much of that is volume related and how much of that is basically a function or results of the higher costs incurred?
The main driver, Oliver, for the working capital increase, are the higher costs we have.
Okay.
Some volume effects; but the main driver are the higher costs.
Okay, understood. Thank you. Second, can you please elaborate a bit more on the situation with Ukrainian imports to the EU? I found, let's say, a statement in the quarterly report referring to that issue. I think that a lot more than originally anticipated, sugar, had been imported into the EU last year, on basically on a, on a non-t oll agreement. There seems to be also an expansion of that, let's say, agreement with the EU into this year and probably also into next year. Could you please elaborate on that and the likely impact on European sugar prices from that?
Yeah. Yeah. For the whole auditorium, I'd like to widen a little bit the story. Until 2022, the Ukraine had a duty-free import quota of about 20,000 tons per year into the EU. In 2022, the EU granted unlimited duty-free imports rights to Ukraine, initially until June 2022, now extended until June 2024. Yeah. In the meantime, imports from Ukraine increased to almost 350,000 tons in the current sugar marketing year, 2022, 2023. Ukraine prohibits exports since 5th of June until mid of September to secure food supply in Ukraine. With the coming to the market situation, the EU, in the current tight market, the additional imports are absorbed by European market and are needed to supply the European market.
Imports from Ukraine are expected to remain at least on the current level, or maybe even increase from September 2023 onwards. This will then reduce the need for other imports, as from refining or my, made my additional exports reasonable, in particular in Eastern Europe. This is, I think, the answer.
Okay. Perhaps lastly, then I go back into the line. Can you elaborate on the decline in sugar volumes? Is that, let's say, a Südzucker specific topic? Is there more to it, or is that just a function of the overall market conditions —
Mm.
— in the EU? Is that more, let's say, a market thing?
I think overall in Europe, we had a really poor harvest 2022, so the volumes for sugar are substantially lower than in the past, and that is the main driver for the lower sales volumes we have seen in the first quarter.
Okay, thank you very much. I go back to the line.
The next question is from Setu Sharda, from Barclays. Please go ahead.
Yeah, hi. My first question is about the sugar prices. Like, why shouldn't you achieve more than the EUR 300 per ton uplift in sugar prices for the next marketing year in sugar, given you have a tight EU supply and a strong world prices backdrop, particularly with El Niño? My second question is like, about the starch cost. Like, why are you unable to pass on the production cost for starch? Has the supply-demand conditions materially changed here? Does this reflect ethanol or weaker industrial Starch demand?
Okay, to the first question related to pricing. We've reached a substantial price increase in October 2022 for the sugar marketing year 2022, 2023. Our assumption going forward for the next sugar marketing year, 2023, 2024, is, let me say, more or less stable pricing environment, and that will, let me say, then bring the average price up, as you mentioned. So far, we have no, let me say, downside or the upsides in the pricing. We stick to the old guidance for the price increase. The Starch segment, we have a mixed picture from the volume side here.
The recession in Europe kicks in in some of the business — businesses we deliver, for example, in the construction industry, paper industry, et cetera. Volumes are going down. We have the second negative influence on the business field. This is the significant drop in ethanol prices.
Thank you. Just a follow-up, like, what is the ethanol prices assumption you are expecting for this year in your guidance?
Yeah. Likely above EUR 800.
Okay. Thank you. Thanks very much. Okay.
We have a follow-up question from Mr. Schwarz. Mr. Schwarz, please go ahead.
Thank you for taking my additional questions. Firstly, I've been trying to prepare around what you said about volume development and also about the Ukrainian import parts. Let's just say, from here onwards, there is no more, let's say, changes to the sugar price for the current and probably also for the next fiscal year. If volumes continue to be weak, but the global markets is, let's say, again, back into a well-supplied or slash probably even oversupplied situation, despite, let's say, inventories being on a very low level. Is in the medium and longer term, let's say, the low volumes that you are able to sell based on the, let's say, disappointing harvest volumes, might that be a threat to the overall guidance?
Is that something that you can handle by just sticking to, let's say, the current price level? That would be my first and last, basically, volume-related questions. Then I have two additional ones. Can you please elaborate a bit about the development on the rating side? It seems like the rating agencies have become more positive on Südzucker, following the favorable business development, and also in relation to energy hedging. Obviously, energy costs, related to the spot market, for example, natural gas, have come down quite materially. Have you locked in those prices, or are you, basically, more in a wait-and-see approach and are hoping for the current price level to, let's say, decline even further before going into the market and trying to secure your energy costs for the oncoming periods?
Thank you.
I will start with the last one. With the energy side, as you know, Südzucker have is running a long-term strategy on the energy side. We have locked in for the next three years, let me say, hedging rates, starting with 80%, 70%, 60% group-wide. Therefore, we are monitor the market development spot prices very carefully. For the campaign 2023, it is too early, let me say, to fix the open volumes of 20%, because we need them more stable figures for the campaign. Now that it's still very early to make here assumptions for buying energy.
This we have a robust hedging rate to very low prices, and it will help the company going forward on the energy costs. Rating agency clearly, they see the over- time strong development of the financial ratios, and this is, for us, a first positive sign that they increased the outlook to positive. We're on a good run. We have now, to say, increased guidance for 2023, 2024. Let me say, that will help us, is not included in the, in their last assessment from June. We are on a good run and hope that we see a further improvements on our journey. Volume side, Oliver, it is difficult in a very volatile business framework.
We elaborate in our presentation, the global market. What we have is that what analysts are guiding, and they are guiding, let me say, for 2023, 2024, this is really starting from October. A stable, let me say, stock-to-use ratio, and this is really the important ratio on a global market. Therefore, we see from the fundamental perspective and really on good ground, and we don't foresee here many changes, and that should help also, that prices will stay on this good level on the global market. In Europe, let me say, we have three drivers. This is, let me say, the consumption. Yeah. Here, now, we are in the middle of the summer months. We have to see how the customers are demanding.
The other side is the production, the European production, here is much too early to how will be the final outcome. What we see is a slight increase in acreage, maybe assuming a higher yields than in the last year, taking the average. Maybe the output then could be 10% higher than the last year, that would not be enough to cover the European demand, therefore, we need those imports. The open point is how will be the development of the Ukraine imports from September onwards. Putting all points together, we are still confident that we can keep prices from October 2023 onwards. There are no signs that we have to adapt it.
It's a good pricing environment, and If that would work, then we would have really also a strong, a strong fundament in the sugar business for next fiscal 2024, 2025.
Very clear. Thank you for that. I'll go back into the line. Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one. It seems to be no further questions at this time, I hand back to Nikolai for closing comments.
Yeah. Thank you, ladies and gentlemen, for joining today's call, and we're happy also to take your questions, should you have additional ones, following today's publication and our call today. Thank you and goodbye.
Bye-bye.