Thank you very much, operator. Good afternoon, everybody. This is Ingo Middelmenne from Investor Relations. Thanks for joining again today on behalf of our H1 2023 earnings call and webcast. The title already says, we will present to you today our H1 2023 figures, as released this morning. In the next 15-20 minutes, we will talk about the most important events in the first half year of 2023 from an operational and financial perspective. Following this, there will be a Q&A session. If you're not able to follow today's call via the webcast, the presentation slides are also available for you for download at wackerneusongroup.com/investor-relations. Please note that the entire call, including the Q&A session, will be recorded and made available publicly on our corporate website in the course of the day. I'm now handing you over to our executives, Dr. Karl Tragl.
Karl Tragl and Christoph Burkhard, who will, as usual, lead you through this call.
Thanks, Ingo, and welcome also from my side. This is Christoph Burkhard, CFO of the Wacker Neuson Group, and thanks for joining our earnings call today and for taking the time.
Ladies and gentlemen, welcome and thanks for joining from my side as well. I'm Karl Tragl, CEO of the Wacker Neuson Group. The economic and political environment in which we all operate remains challenging. Some of the extreme conditions of the previous year's developments are continuing to improve, particularly with regard to energy prices, supply chain performance, and inflation. New challenges like uncertainties, have to be added now. Overall, we are all doing a better job of adapting to this new normal as best as we can. That's why my sincere thanks again, goes to our staff around the globe, who have once again worked hard to ensure our success. As you know, our customers, suppliers, and business partners are also an important part of our team. As always, my thanks also goes to you.
Following a strong start to the year, the Wacker Neuson Group continued to grow dynamically in the second quarter. Over the first half of the year, group revenue increased by 27% year-on-year to EUR 1.37 billion. This positive development is supported by our high order backlog. At the same time, after a robust development in the first quarter, the expecting cooling off in order intake is now becoming apparent in the second quarter. Despite the expected slowdown in demand, we once again demonstrate that our unique product portfolio makes us significantly less dependent on the general cycle of the construction industry. We have a strong position in the still growing segment of infrastructure modernization, as well as in landscaping and agriculture. At 12.9%, our EBIT margin was again, significantly higher than in the previous year.
We continue to benefit sustainably from last year's price increases and efficiency improvement actions. However, I would like to remind you once again of the positive one-time effect in the first quarter. That means a sale of fixed assets was completed in January, which led to an extraordinary contribution to earnings of EUR 50 million. Operationally, there's good news to report with regard to supply chain. The situation has improved significantly. Nevertheless, we are still having to contend with selective supply problems, which in some cases are significantly complicating our production processes and impacting our margins. Net working capital ratio is at 31.6%, which is still above the level we are aiming for. However, development of our free cash flow already shows that we are moving into the right direction in this respect.
At -EUR 30.5 million, it improved significantly in the first half of the year compared to the previous year. We therefore remain confident that we will continue to catch up step by step. Looking at the regions, Europe and Americas continued to maintain the growth momentum. In Europe, revenue rose by 24% to a good EUR 1 billion in the first half of the year. Once again, our home market, Germany, as well as France, developed very positively. Many Eastern European and Northern European countries also recorded double-digit growth rates. It is furthermore encouraging that demand in Southern Europe has risen again significantly following a subdued prior year. By contrast, the market declined in the United Kingdom, which was still characterized by double-digit growth rates in the last year, 2022. In the Americas, revenue increased by 48% to EUR 300 million.
Demand in this region remained strong in US and Canada, but also in the Mexican market. Asia Pacific, on the other hand, reveals a very heterogeneous picture. While our growth engine in this region, the Australian market, continues to record significant double-digit growth, most of our sub-markets declined. China and Southeast Asia being the most prominent amongst ones. Our revenue, therefore, declined slightly in the first half of the year from EUR 43 million to just under EUR 42 million. Nevertheless, our Chinese affiliate is important for us because it is serving as production and export hub for the entire region, as well as for low-regulated markets like Africa and South America. The next couple of minutes, my colleague, Christoph, will give you some more insights on the financials.
Thank you, Karl. As mentioned by Karl at the beginning of the call, free cash flow has significantly improved year-on-year from -EUR 124 million to -EUR 31 million at the end of June 2023. The dynamic revenue growth during the first half of the year, in combination with a few supply chain issues, has contributed to the still negative free cash flow. However, the trend in Q2, with -EUR 13 million free cash flow, is going in the right direction. Equally, with currently 1,600 unfinished machines, we are below the level of machines at the end of Q1, which was 1,900. At the same time, we believe that there is still room for improvement towards year-end.
Despite an increased net debt at the end of June, amounting to about EUR 350 million, our leverage year-on-year has remained constant on exactly the same level of 0.7. This is attributable to our increased profitability, which also generated a significantly higher annualized EBITDA number compared to the first half of 2022. With this, back to you, Karl.
Thank you, Christoph. Now, let me summarize some of the most important milestones of our recent business development. As you well recall, a few weeks ago, we published our new mid strategy, 2030, which was received with great interest by the market. We have already gone into details in our last call. We aim to expand our revenue to EUR 4 billion by 2030, while our EBIT margin should exceed 11%. Net working capital ratio shall reach a level of 30% at maximum. As you see, we are committed to profitable growth for Wacker Neuson, despite the current uncertain environment. Supply chain issues are showing signs of improvement compared to 2022, as already mentioned. However, we still have to contend with selective delays, so we cannot yet shelf this issue.
On the product side, we have once again launched a number of innovations on the market. I would like to highlight our new electric telehandler, which recently received the Silver Innovation Award at EQUITANA, the world's largest equestrian trade show. We are happy to perceive this as a nice proof for horsepower in our zero emission product portfolio. In May, we opened our new steel fabrication factory in Serbia. By 2025, it shall become our benchmark plant for steel constructions. Parallel to the opening, we already started to work on the expansion of the . Concluding our presentation, let's talk about the outlook for the year. The publication of preliminary results for the first half of the year on July 13, we raised our guidance for the full year.
We now expect group revenue of between EUR 2.5 billion and EUR 2.7 billion, with an EBIT margin of between 10.0% and 11.0%. We continue to expect a net working capital ratio of around 30%, while we now anticipate total investment of around EUR 140 million. On one hand, the revised guidance reflects a positive development in the first half, while at the same time taking into account a possible economic slowdown in the further course of the year. Business climate indicators have started to turn south. As expected, in our regular health checks, we see a cooling down of order intake compared to last year.
Nevertheless, we have raised our guidance for 2023, as we are confident for the full year due to our still good order book, despite the emerging deterioration of the economic environment. That's our briefing. Let's now move on to the Q&A. We're looking forward to your questions and a lively exchange with you. Thank you.
Thank you, Karl and Christoph, for the update on the first half of 2023 and Q2. Operator, I'm now handing this back to you to explain the Q&A procedure.
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 speaker equipment today, please lift the handset before making your selection. Anyone with a question may press Star and one at this time. Once again, to ask a question, please press Star followed by one. The first question comes from Stefan Augustin from Warburg Research. Please go ahead.
Yes. Hello, gentlemen. Thank you very much for taking my question, or my questions at this point. Actually, the first one would be, can you a little bit elaborate on the pricing situation? You mentioned in the last call that you suspect that pricing will become a little bit more difficult in the second half of the year. What is your sales channels telling you at this point in time? Is it commencing? Is it stronger than you expected or less? What kind of effect will that have on 2023, or will that all be seen in 2024? That would be my first question.
Okay. Thanks, Stefan, for the question. Basically, we have raised continuously over the last quarter, our pricing in our dynamic pricing systematic. We are seeing now the benefit of that, because as you know, it always has a lagging effect of at least one quarter, because that's the minimum lead time of most of our machines. We are still seeing positive effect on those price increases. In the markets, we currently see that the demand can be fulfilled, so there is more opportunity for the customer to choose. That's the first point of pressure, basically, on the prices.
We are expecting for the first step, doing it in the second half, some minor price reductions, which then in the end of the year will have some effect, and we have figured that into our effects.
Okay. Great. The second one is a little bit on the one-offs. I think there are two one-offs. You mentioned the first one, the sale of the real estate, and there should be some sale of intellectual property to Deere. Is that, is both effects cash effective in H1?
Stefan, this is Christoph. No, the second part, which is the completion of the IP sale, is, has been effective in April, so Q2.
Sorry, that one my line was just bad in this, in the last sentence of the answer.
The, the second, the second effect, so the second part of the IP, IP, sale to John Deere was effective in Q2, in April.
Mm-hmm. Also, cash effective then?
Yes.
Okay. Then I have a question, just a, just a reminder, actually. The IG Metall tariff expects a step up in wages for the second half of the year. Is that an effect that is more or less exactly mirrored at your premises, or is there some deviations?
Basically, this is a, something where we are legally, we are legally obliged to that. That was signed in the original, when we were in a tariff, and we now have a company-specific tariff with the IG Metall. We are part of that, so we are obliged to that. To my knowledge, I just wanted to look it up here.
No, this is, but this is...
The same number-.
Part of our... This is, has been included in our assumptions, Stefan. No, no.
Yeah.
No.
No, no. Okay, but, but it is happening, right?
It will happen.
Yeah, yeah.
That's the point.
Yes.
It will happen.
Okay, I go back in the queue. Thank you very much.
Thank you.
Ladies and gentlemen, as final reminder, if you would like to ask a question, please press star, followed by one on your touch-tone telephone. Gentlemen, so far, there are no more questions on the phone.
Okay, that looks like it was a short Q&A session today. Are there really no further questions from your side? No, it doesn't look like it here. Thank you very much for participating again today. We've reached the end of today's call. As usual, in a couple of hours, we will have the recording on the website in case anybody would like to listen to parts of the call again. That's it from my side. Thank you very much for listening, and until next time.
Thank you very much.
Thank you. Bye.
Bye-bye.