Thank you, and good morning, ladies and gentlemen. We welcome all of you to our conference call this morning. The underlying presentation of the call has been published this morning at 7:30 A.M. CET on our website. Today, we released the statement of the first six months of the financial year 2023-2024. We are going to present the highlights of this period and revisit our full year group earnings guidance for the business year 2023-2024, that has been raised again today. Following the speech of Mr. Kölbl, we are 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'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 business performance the first six months of financial year 2023-2024, and details about the increased earnings guidance for the full year 2023-2024. Let me start with the highlights on the first six months, results on page 5. First of all, let me underline very clearly that Südzucker Group has achieved an outstanding performance in the first six months. Group revenues showed an increase of almost EUR 500 million or 10%. Group EBITDA was up more than 274 - 739 million euro, or 59%, and group operating result by 276- 592 million euro, or 87%.
Cash flow increased by 64% and reached EUR 592 million. Earnings per share after six months came in at EUR 1.69, against EUR 0.62 last year. Net financial debt, end of August 2023, came in working capital driven, EUR 334 million above prior's level. It is important to note that the increase was EUR 260 million lower compared to quarter one level. The overall very successful development once more confirms the positive rating development. Standard & Poor's holds a long-term issuer credit rating of BBB-, and Moody's of Baa3. Both rating agencies increased the rating outlook from stable to positive in June 2023. Now, 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 454 million to more than EUR 5 billion, mainly driven by the sugar, special products, and fruit segments. Group operating result increased by EUR 276 million- EUR 592 million. This increase was mainly 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 from July for the last sugar marketing year, 2022-2023, S&P Global has confirmed its view change from formerly expecting a surplus to expecting a balanced market. The stock-to-use ratio stays low at 35%.
For the current sugar marketing year, 2023-2024, the forecast shows a rather small surplus of only 0.8% of global production, with no impact on the low stock-to-use ratio remaining at a level of 35%. This framework confirms a further stable, fundamental global market environment for the next 12 months. Now let's have a look at the European sugar market environment on page nine. The EU market has changed to a net importer since campaign 2018, which has led already to several steps of price increases in the last sugar marketing years. This confirms that the market mechanisms envisaged by the EU, which is to be based on supply and demand, is working. This was true in the face of market surpluses and lower EU sugar prices, as well as in the current phase with market deficits and high European sugar prices.
Looking at the significant further price increase on the spot market in the last 12 months, we monitor several reasons. First, based on the mentioned global market environment, the world market price, as the fundamental pricing starting point, has increased and confirms this high level until today. Second, another year of limited EU acreage, combined with uncertain weather and growing conditions. Uncertainty has been transforming into certainty of a good campaign, with average sugar output for some time up to the current campaign start. Third, it is still important to mention the overall cost inflation leads to higher procurement prices for the whole industry and alongside the whole value chain. Since it certainly occupies many these days, let us now turn to the topic of potential further sugar imports from Ukraine. To put this in context, let's first take a look at the harvest expectation in the EU and Ukraine.
Despite the difficult sowing and growing conditions in the EU, conditions and harvest prospects along the way have improved. Also, with the expected recovered production level, EU will remain net importer in 2023, 2024. Südzucker expects to increase campaign days and respective sugar output significantly from 107 to more than 120 days in its 2023 sugar campaign. In parallel, Ukraine expects a significant increase in sugar production from 1.3 million tons to more than 1.6 million tons in the 2023 campaign. This more than covers the country's own requirements and increases the export potential accordingly. EU has decided to suspend customs duty and quantity restrictions on sugar imports from Ukraine since June 2022 until June 2024.
As a result, about 390,000 tons were imported in sugar market year 2022-2023 so far. To what extent this will influence the already anticipated export volumes of each sugar producer remains to be seen, and must be closely monitored along the development of monthly imports volumes from Ukraine. Nevertheless, it is all the more important to underline, especially in this market environment, that we have succeeded in achieving our original objective of keeping sales prices stable at a high level in the contract negotiations for the sales period from October 2023 to September 2024. Now, let's have a look into the complete development in segment sugar in the first six months on page 10. Revenues in the sugar segment increased significantly due to the significantly higher prices, despite declining sales volumes, mainly as a result of the poor 2022 harvest.
Operating results shows a very strong performance. The drastic increase in costs, particularly for raw materials and energy, was offset by higher prices since the end of the last fiscal year. Let me continue with segment special products on page 11. The first six months, revenues in the special product segment increased significantly due to substantially higher prices. The operating results showed a significant increase. It reflects higher margins overall. In H1, we were better able to pass on the impact of high raw material, packaging and energy costs to the market in the form of higher prices, which hadn't been the case in previous year. Let me now turn to segment CropE nergies on page 12. Revenues in segment CropE nergies were down sharply. Significantly lower sales volumes due to scheduled maintenance shutdowns and substantially declined prices contributed to this.
Ethanol prices in the corresponding prior year period were at a record level. Operating results followed the development of sales volumes and selling prices and fell significantly short of the exceptionally strong prior year H1. The main driver of the decline in earnings was the significant drop in prices due to normalized prices for renewable ethanol. In addition, significantly lower volumes contributed to a decline in earnings. Higher raw material costs had a negative impact, while higher prices were realized for our co-products. The average ethanol price in the first half year was at EUR 793, against EUR 1,161 per cubic meter in H1 2022-2023.
The average ethanol price in September was 786, against 997 EUR per cubic meter in September 2022, and in October, we see so far a price level of about 800 EUR per cubic meter. Let's move on to segment starch on page 13. Revenues in segment starch declined moderately. Overall, higher prices were unable to compensate for the significant decline in sales volumes. While prices for ethanol were down significantly, prices for products in the starch segment were higher overall than a year earlier. Operating results were sharply down. Overall, price increases could not fully compensate for declining sales volumes and higher costs. Let's move on to segment fruit on page 14. Revenues in segment fruit showed a moderate increase. Sales of both divisions, fruit preparations and fruit juice concentrates, increased due to price factors.
This offset a significant volume decline in fruit juice concentrates. Sales volume of fruit preparations remained stable at the previous year's level. Operating results came in significantly above prior year's level. The profit contribution from fruit preparations increased, despite a slight decline in sales volumes and higher costs due to significantly higher margins. The profit contribution from fruit juice concentrates also increased. Higher prices more than offset the increased costs and the significant decline in sales volumes. Let me now turn to the main points in the P&L on pages 16 and 17. The result from restructuring and special item was marginal, yet equity result was almost exclusively driven by the sugar and starch segments. The financial result came in at EUR 965 million. It includes net interest expense of -EUR 45 million and other financial expense of -EUR 20 million.
The increase in interest expense was due to the temporary significant increase in average debt and higher interest rates. The other financial result was impacted by exchange rate losses and the devaluation of a minority interest. Let's continue on page 17. Taxes on income came in at EUR 115 million, after EUR 69 million in the same period last year, with a reduction to the underlying tax rate down to 22%. Earnings per share came in at €1.69, then €0.62 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 six months by EUR 230 million - EUR 592 million.
The cash flow against revenues ratio improved after six months to 11.7 against 7.8% in 2022-2023. Cash outflow from increase in working capital of EUR 225 million was mainly due to a reduction in trade accounts payable, in particular, as a result of the final beet payment for the 2022 sugar campaign in March and June this year, and the sales-related further increase in trade accounts receivable, which was only partially offset by the cash inflow from the sale of sugar inventories. Investments in fixed assets reached EUR 199 million against EUR 157 million in the last year. Investments in financial assets and acquisitions were marginal. Let me now move forward, looking at the balance sheet of page 21.
As said, net financial debt, end of August 2023, was EUR 1.9 billion. As expected, the year-on-year increase in net financial debt decreased significantly from EUR 594 million at the end of the first quarter, down to EUR 334 million at the end of the second quarter. The temporary year-on-year increase is mainly due to the higher working capital financing requirements in segment sugar, as mentioned before. Overall, group working capital increased temporarily by 30% or EUR 756 million, from about EUR 2.5 billion - EUR 3.2 billion in comparison to last year. Gearing is at 44% against 37% last year. Equity ratio is at 48% against 50% one year ago. Let me now turn to the outlook on pages 23-27.
After very good performance in quarter two, 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 the general context. Also, we are all tired of following the now numerous ongoing crisis. It is also our duty as management to point out to stakeholders again and again, that this crisis still exists and can have a significant impact on our business. The direct impact of the situation in Ukraine on the sugar market mentioned before, is just one example. Having said that, now let's continue with the concrete numbers on page 23. Ladies and gentlemen, as stated at the beginning of the presentation, let me put the adjusted forecast in the general context. Also, we are all tired of. Sorry, I put this wrong page.
Sorry for that, ladies and gentlemen. Coming now to the forecast for 2023-2024, which we published for the first time in December 2022, increased that forecast in April and July 2023, and is now being adjusted again in this half year financial report. For fiscal year 2023-2024, we now expect group revenues to come in between EUR 10 billion and EUR 10.5 billion. The reduced expectations follow from adjusted segmental revenues outlook. For group operating profit, we now expect the range between EUR 900 million and EUR 1 billion. This means we increase the midpoint by 50, from the old EUR 850 million - EUR 950 million range. It reflects the increase of the expected earnings range of segment sugar, which is raised by EUR 50 million too.
In segment sugar, we expect now an earnings range between EUR 550 million-EUR 650 million. Adjustment in the non-sugar segments were only made in the fruit segment. Segment special products operating result is expected to come in significantly above the previous level. Segment CropEnergies operating result is expected to range between EUR 95 million-EUR 145 million. Segment starch should see a significantly lower operating result. Segment fruit earnings are now expected to increase significantly. Let me continue then with page 24. The group EBITDA range has been raised to EUR 1.3 billion-EUR 1.4 billion, 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. 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. Let us now come to the end of the presentation on page 27. Ladies and gentlemen, the percentage figures are strong and clearly underpin that Südzucker Group is back on track, delivering strong and well-diversified structural cash flows on a level of about EUR 750 million. Last year, we explained that we want to increase the headroom by improving earnings and thus bring up funds to proactively shape Südzucker's future. Sooner than expected, we have reached this milestone with an expected EBITDA of EUR 1.3 billion-EUR 1.4 billion in fiscal 2023-2024.
Well-considered and continuing to keep a clear eye on reducing net debt, we intend to use the opportunities to systematically pursue our strategic goals. This will enable us to safeguard what we have achieved, prepare the company even better for the fluctuations of the future, and thus contribute to sustainable increase in profitability and create long-term value. Ladies and gentlemen, thank you all for your attention. We are now looking forward to 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 the touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using a speakerphone today, please lift the handsets before making your selections. Anyone who has a question may press star followed by one at this time. The first question comes from Oliver Schwarz from Warburg Research. Please go ahead.
Good morning, gentlemen, and congratulations for the exceptional numbers for Q2. Well done. I'll take my questions one by one. Firstly, Mr. Kölbl, could you elaborate a bit on the impact of Ukrainian exports on a duty-free basis to Europe? What do you expect for the next sugar season? So basically going over from year two to, let's say, end of October 2024, in regard to volumes. I see that you stated in the quarterly report that sugar production is expected to be up in Europe by one million tons, still will remain a deficit region, but some of the imports will basically be tariff free and hence may make, let's say, a sizable dent in regard to pricing. Can you shed some light on that situation, please?
Yes, Oliver, thank you for the start up. I would like to widen the topic that everybody has the concrete set up on that. In the past, it was so that the Ukraine had only a duty-free import quota of about 20,000 tons into the year, into the EU year- by- year. In June 2022, the EU granted unlimited duty-free imports rights to Ukraine, and this was initially until June 2023, and now it's extended until June 2024. And for sugar marketing year 2022-2023, we have more or less good concrete numbers, and the imports in that period was about 390,000 tons.
Yeah, in 2023, 2022-2023, the EU market was tight and the additional imports were absorbed by the EU market and were also needed to supply the EU market. Now, looking on the current sugar market year 2023-2024, what we know today are only limited figures. That is, one is the expected campaign volume, which will increase in Ukraine from 1.3 - 1.6 million tons, so 300,000 tons sugar more than in the last year. When we add up that all together, there could be, in sugar market year 2023-2024, an increase of this import in the last sugar market year, up to 0.5-0.7 million tons.
And this clearly would then reduce the need for other imports as from refining and will make additional exports reasonable, maybe into close geographies, which you like pricing potential. But clearly, this is a very volatile, uncertain situation, and we have to follow and monitor that development and assess it month by month.
Okay, thank you very much for that. Secondly, this is probably not really directly related to results, but to your statements regarding the strategic changes that are now earlier enabled than expected due to the favorable development in Südzucker's results. Obviously, CropEnergies is making huge strides in regards to, let's say, expand its value chain and reduce the dependency on the mobile market for an outlet of its product, namely bioethanol. I haven't seen yet any additional information regarding its parent company, so Südzucker itself seems after buying into participations of rather small companies seems to be in a wait-and-see position.
Are we likely to see something coming up anytime soon now that the progression of earnings allows for, let's say, more strategic room for maneuver, or is that something that will take more time? Thank you.
Oliver, fair question. Clearly, we-- one, one, one goal is, is having clear, clear, clearly this, this eye on reducing net debt, in this situation of temporary higher working capital needs due to favorable pricing. Clearly, we are now in a good position to use opportunities, and we are beside the projects which were published on CropEnergies level, also on group level hard, to, to, on projects to further, let me say, strengthen our portfolio. Looking on the overall CapEx we spent in this year, we have more than 50% increase in CapEx to increase the current factory structure, et cetera.
So we are in a good way, but we have not this, let me say, lightning approach projects, et cetera, as you as you asked for. And not forget also the ESG CapEx, we have to spend across the whole divisions.
Yeah, I very much appreciate that, and I mean, not wanting to talk down on your current investment, but I guess a lot of the CapEx expansion is driven by what CropEnergies is currently doing. And I just wanted to know whether some of that is also, let's say, Südzucker investing in its recently acquired participations, or whether we are likely to see, let's say, a further round of acquisitions enabling the company to broaden its portfolio.
Yeah. Oliver, only to give an example, when we are looking on the 600 for the current year, there is CropEnergies in with close to 15%.
Okay. Thank you so much.
Yeah. Okay.
Thanks.
The next question?
As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Setu from Barclays. Please go ahead.
Yeah, hi. I have a few questions. The first one is about the sugar prices. Like, what is, what was the achieved average price in sugar marketing round? Was it in line or some uplift from last year?
When we are looking on the sugar marketing years, we are running from October to September. We reached that we could put forward the achieved pricing from 2022-2023 sugar marketing year, also in 2023-2024, so prices are stable. Looking on the financial year 2023-2024, this is converting into an increase in pricing of around EUR 300 on comparing financial year 2023-2024 against 2022-2023.
Okay. So, EUR 200, you mean, right?
EUR 300 in the financial year, higher on average across the whole assortment, et cetera, against last fiscal year. But looking on the sugar marketing year, pricing is stable, but on a very high level.
Okay. And the second is like, about this Ukraine supply. What impact do you see on the prices and, like, what is your exposure to spot prices moves over the course of the next 12 months? Like, what is the volume of sugar you have to sell, and how much of that is contracted?
Sorry, the line, the line is not very good. Could you please repeat the, the question?
Sure. So, what impact do you expect from the Ukraine supply to have on European prices? And like, what is your exposure to the spot price move over the course of the next 12 months?
Yeah. I elaborate, let me say, in the question from Oliver Schwarz at the beginning, the Ukraine situation and the risk assessment we have to make month by month. But the good news is that we already have contracted 90% of our expected sugar volumes out of the campaign 2023. So it is a very robust, a very safe number, and 90% of the volumes are contracted and as said on the pricing we had in sugar market year 2022-2023.
Sure, thanks. And the third question would be like, where is your starch capacity utilization in Europe right now? Like, how big an issue is Chinese competition?
The whole European starch industry is facing a lot of pressure. Main is the recession, especially in the paper and construction industry, and there is also pressure from the importers in the European market. Overall, let me say, starch capacity usage is down, as well as also in our starch operations.
Okay, thank you. Yeah.
For any further question, please press Star followed by one. We have a follow-up question from Oliver Schwarz, from Warburg Research. Please go ahead.
It's basically just a clarification questions. Mr. Kölbl, you stated that you've locked in 90% of your volumes in your contract by now, and I also read that basically the price of sugar is expected to be basically stable from its current level, which indicates that's basically what you locked in in the respective contracts. Firstly, I'd like to ask whether you have made some multi-annual contracts like you did in the past, or whether the situation doesn't allow either side to commit to longer periods of time than one year.
Secondly, I'd like to, when looking basically on the spot market, it seems like we have already seen the peak level in the spot price, indicating that sugar availability due to the new harvest, which just has begun, may be a factor here. Maybe imports from Ukraine and other countries may play a role here. But all in all, as far as I know, on the first of January, you'll be making your annual contracts with the retailers, which might also take into consideration the recent development in the spot market. Would you expect those prices to, let's say, reflect the current average price level in the EU as well?
Or might we see some, let's say, deviation from that in those prices? That would be my question.
First of all, to the first part, in the contracts we have made for the current sugar market at 2023- 2024, there's as always, a minor part of long-term contracts in... It's not a big deviation to that, what we have seen in the past, that we saw in the past. And to the spot markets development, yes, it's, it has to - they have come down over the last months. But really, it's every year when campaign started, sugar is available and spot prices are going down, that's normal. But really, spot prices are still about the contracted prices and are also higher than what we fixed then, than ...
Let me, the spot prices are still higher. We have, we follow that, and clearly what I flagged at the beginning and the first part or the first question around was, that we have to assess what is coming in from Ukraine, et cetera, how the market will develop. Yeah, and we have to clearly differentiate what, between that what we contracted and that what, at the end of the day, will then be sold.
Very clear. Thank you. And, could you, completely different topic, I admit. Could you please shed some light on your view on your perpetual bond, given that, let's say, yields or interest, interest rates, better to say, have gone up quite substantially, and you're basically paying premium on that, making that payment, let's say, more and more sizable. Any ideas on whether you want to change something in that regard, or whether you're fine with how that develops?
Oliver, clear answer, no change. It's a major cornerstone of our financial structure, the hybrid.
Very clear. Thank you so much for that. That was. Was it in regard to questions?
There are no further questions at this time, and I hand back to Nikolai Baltruschat for closing comments. Thank you.
Thank you, ladies and gentlemen.