Warmly welcome to Orthex Interim Report for January to September 2022. I have with me here our Marketing Director Hanna Kukkonen, and Finance Director Saara Mäkelä. We'll go through what has been going on during the third quarter. As always, there's a chat function where you can post your questions, and we will be happy to answer them at the end of the presentation, so feel free to use that one. We'll start here. The normal flow, first a few words about the company, then the result, bit of strategy, and then we'll do a little bit more of a deep dive in sustainability as there are a lot of interesting things to share with you. We'll look at the financials in some detail.
Then for all the questions that you might have, we'll answer them at the end of the presentation. Just as a small reminder, Orthex is a household goods company that's producing about 90% of the products that we sell, and we produce them in our own factories close to the markets. We have one factory in Finland and two in the south of Sweden. We do branded goods under the strategic brand SmartStore for storage products, GastroMax for kitchen, and then Orthex for the rest. That's, of course, the name of the company as well. We take great pride in being very focused on sustainability, and also our ambition is to be the forerunner in the industry when it comes to sustainability.
If we look at what we do, the mission we have is to make everyday life easier for the consumer. That means that all the products needs to have a clear function. It needs to solve an everyday need that the consumer has. That's why we strive to have the best storage assortment, the best kitchen utensils for the home chef to really succeed in the kitchen. The two other categories for us are home and yard, which is basically everything you need in terms of plastic and home and goods products for your home, and then plant care, mostly flower pots. Storage is the biggest category, about 64% of turnover and kitchen just about 20, and then home and yard and plant care around 6%.
The idea here is to produce products that are of high- quality. That in itself is already sustainability because they will last for tens of years even more, and at the end of the life, they can be recycled. Sustainability here is a key for us and also the design. I mean, the design is not only the functionality, but also hopefully the product is in a way nice to look at and you won't get bored with it, so you won't throw it away, but you can actually keep it for a long time. Innovation is also part of the strategy, and our ambition is to bring about 10% of our turnover through new products. That was a very brief view of who we are.
Looking in more detail on the period up till now this year. I think what is positive here, starting with that of course is that the hard work we have done and the investment in growing our business in Europe outside of the Nordics is starting to pay off. We had good customer pipelines, good distribution build up, and that's clearly visible in the numbers we have to show in the third quarter. When it comes to purchasing behavior and customers, of course, our customers are the big retailers in the market.
They clearly are uncertain of how the shoppers will behave and what the shoppers will buy, especially now that there's a big cost inflation going on in and around, especially Europe. Our customers are a bit careful in their buying behavior, some more, some less. What we can still see today is that the consumer is clearly still interested in Orthex products. As the Orthex products price point is still fairly low compared to many other household goods, we don't see a very clear trend. We don't see any big reactions from actually the shopper or the consumer limiting their purchases of our goods. Hopefully, that will continue. Cost inflation, then I think mentioned already. We all know that raw materials have peaked.
They have been at extremely high levels. They still are, by the way, at very high level. The same goes for purchased goods, transportation, energy. Everything is quite high at the moment. That makes, of course, both our customers and the end consumers worried and it also clearly impacts the way we operate on the markets. In addition to that, of course, we have quite a big business in Sweden and the Swedish crown is something which is affecting us. The Swedish crown has been quite low for quite a long time during the third quarter that continued. That's also affecting us both in terms of sales and results. A small comment on the raw material.
I think the indexes are widely available, and public information may be interesting to know is that the period between December 2020 and September 2022, we've sort of commented on the index development, and it was up as much as 75%, even 80% at some point. Now let's say the lift is at about 45% higher than normal. This is still extraordinary high levels compared to any historical average. Clearly, we are actively working with a long-term strategy to be in balance when it comes to pricing our goods. Going into the hard facts. Net sales grew by 1.4% in the whole company a nd that's EUR 22.1 million.
Invoiced sales grew a bit less at 0.6%. On EBITA, I think, and clearly an improvement from last quarter, which was a disappointment to us, landed at EUR 2.2 million. And then, the adjusted margin was at 10.1%. Still affected by many factors, as mentioned below, before. Cash flow was on a EUR 4.4 million level. When we look at inventories, it's clear that when you have high raw material cost also the goods in inventory will have a higher value than normally. So that can be seen in the inventory values.
Commenting a bit more on the longer term period in terms of on sales, and there's still a decrease of about 3%. We did EUR 63.7 year- to- date. On EBITA level, the margin is now at 6.1%, and the absolute number at just below EUR 4 million in EBITA. Leverage at 2.5x, and cash flow from operating activities at almost EUR 6 million. I think this slide is at least to me quite interesting, and I would like to highlight the second bullet point on the left where commenting on the invoiced sales in strategic European markets grew by 7.4%. That's something which we are clearly happy with.
The strategy we have consistently implemented is showing results in the third quarter. Commenting on the home markets, clearly the development is a bit slower there. Of course, the growth comes from price increases, the small growth we can see. That's the situation. If we look at the rest of the world, it's a few customers outside Europe which at the moment are actually quite careful in their buying patterns and their running of campaigns. There's no lost distribution in any way. It's just a slower takeoff than we are used to. Still clearly focus in our strategies on Europe and on the Nordic home markets.
If we look at product categories, storage is in this quarter, I would say almost flat. However commenting on that one, storage in Europe was growing nicely. Storage on the home markets in the Nordics were performing a bit slower. The kitchen category grew as a total, which we're of course happy with. That's mostly driven by our home markets in the Nordics. That's that development. Plant care and home and yard categories, one could say were flattish during the period. That was the detailed comments on the categories. A small reminder about our strategy. I think no major changes here. Very straightforward.
We are striving to be the number one brand in the storage category throughout Europe, and we are also wanting to strengthen our leading position in our Nordic countries. The remainder of the strategy there are I think, three organic building blocks. The first one being continuing the good work in the Nordics with solid action, so a clear category strategy. Showing the way in sustainability. I think that particular issue is getting more and more attention, and we are getting more and more traction in what we are doing. There's a lot of good development in that field which we will go into soon. We need to maintain the high innovation rate as well overall.
The building blocks, if we take the second one, that's the European markets. There, clearly there are good opportunities for growth. We have landed quite a few of the major European retail customers. In those, we still have a lot of opportunities to widen our assortment and to get into more of the stores of these newly opened accounts. If we take our market share in Europe, it's clearly much lower than in the Nordics. We believe that by growing our market share in Europe, we can achieve much growth. The online business clearly interesting to accelerate the online business. Here maybe I mention our key focus in the online business is actually to look as good online as we do in the best normal retail stores.
Our focus is on the big platforms that sell our type of goods. On the omnichannel as well. We are happy to partner up with customers who have both own stores and their online universe. We hope that we can add value in how to sell our type of products in the online universe as well as in the stores. This area is interesting and clearly the trend is such that we can expect growth in this area. The fourth one which is a bit of a let's say extra growth box is not organic, it's actually market consolidation. We've been careful there.
Clearly the market at the moment with the valuations we see, I think, it's hard to get a real good grip of where to act or and when to act and when it's strategically the best timing. As well, of course, since the market is challenging we need to have our own strategy working well for us before we take on additional risk. Still a very interesting area to keep in mind. The ambition to be the number one storage brand in Europe and the leading player in the Nordics. If we go into sustainability and I'll let Hanna take over at this point.
Thank you, Alexander. There's actually quite a lot of sustainability activities to report for the last quarter. If we start with the products. We started using the ISCC-certified renewable raw materials by applying a mass balance approach in our very popular SmartStore Compact and Compact Clear ranges. This means that from now on, 20% of the content of the raw material is made from renewable raw materials, and in this case, it's used cooking oil. We extended our also popular SmartStore Collect garbage sorting range by launching a new smaller size of a sorting bin to the range, and this sorting bin is made of completely recycled raw materials. We also participated in a competition for the most sustainable product in Finland. We took part in that competition with two products.
Of course, the bucket made of old fishing nets and then the SmartStore Collect sorting product. Out of the 291 screened, pre-screened products that took part in the competition, the jury selected our fishing net bucket as one of the 11 finalists, and we are very proud of that, of course. We have been quite active on the work to increase the use of sustainable raw materials. That means renewable and recycled raw materials. We're actually at the moment involved in two significant research projects. One is a 2.5-year project that started in September, and the aim is to increase the use of recycled plastic and especially to find solutions for recycled plastics, which are suitable for contact with food.
The second research project is a seven-year project starting in January, and it's a large cooperation with several companies where the aim is to increase the knowledge and usage of renewable plastics and then to promote the circular economy. Very happy to be on board also with this research project. We announced yesterday that the Science Based Targets initiative has approved our science-based emission reduction targets. We are happy to announce that Orthex's emission reduction targets are now aligned with the Paris Agreement to keep the global warming below 1.5 Celsius degrees. Those were quickly the sustainability activities and I'll pass on the word to Saara and the financial details.
Thank you, Hanna. Our net sales increased 1.4% compared to last year. Swedish crown has been weak compared to last year, and in constant currency, the growth was 1 percentage point higher, so 2.3%. We've been communicating that we have made two price increasing rounds during this year, and growth was driven by the price increases. In Europe, storage category customers were growing and sales increased 7.4%. We were able to open new customers and increase order sizes and widen distribution in existing customers in Europe. It's great to see that we start to have many impressive store installation in Central Europe.
In Nordics and U.S.A., we had less campaign volume in some key customers, and that was affecting the sales in Nordics and outside Europe. High inflation and energy crisis are generating, of course, uncertainty within our customers and consumers. It still seems that the sell-out of this kind of reasonable low-price products is growing in value. Quarter three adjusted EBITDA was EUR 2.2 million. Raw material prices are still on high level, not as high level as during the quarter two, and many other cost items are still affecting the profitability. Electricity prices are on high level. We were able to limit that effect by hedging but also Swedish crown affected the profitability. EBITA was EUR 1.1 million below last year level.
Latest price increases are visible in the reported figures that even if we are not yet on a level where we are expected to be on the long term, but compared to quarter two, the improvement is significant. The familiar graph regarding the raw material price indexes. Plastic raw material price index have decreased from the highest peak levels, which we had during the quarter two but it's still on a high level compared to average long-term historical average. Price index is 45% higher compared to end of 2020. That effect is visible also in our inventory level, which are on a higher level. The supplier margins have stabilized, but there's a lot of unpredictability and very hard to estimate how the raw material prices are developing in the near future.
There seem to be signs that the demand is weakening, and that might cause pressure to decrease prices, but on the other hand, inflation and energy crisis might cause pressure to increase the prices. Availability is on good level, so there are no issues regarding that. Investment level has been on a more normal level this year than last year. Last year, we did a significant investment in Tingsryd factory during the quarter one, which is visible in a graph. Now, the investments are coming mainly during the quarter four this year. Investments are related to new products and new product molds and some capacity and automation investments. Net debt was EUR 23.7 million and leverage 2.5x.
We had a weak quarter two, and that was affecting the leverage, and it's temporary on a higher level compared to the long-term targets. Our long-term targets, they are kept on the same level as before, so no change, and we don't see any need to change the targets. Even if it's been challenging times and situation has been exceptional, especially during the quarter two we still are committed to deliver the long-term targets. I'll pass on to Alexander to summarize the presentation.
Thank you, Saara and Hanna. I think summarizing this time as well is fairly easy. The world and especially Europe and our industry is seeing cost inflation. The positive side, we are quite happy that our strategy is working in Europe, and we see some improved momentum there. There's the uncertainty in how the big retailers treat the uncertainty on the market, how their buying behavior will develop over time. I think that concludes the world we are living in at the moment. I think now it's actually time for questions and answers. Happy to take those.
Yes, I will start. There are some good questions in the chat. We'll start with the first one. Congratulations on the strong quarter. Regarding your sales, did Europe, excluding the Nordics, benefit from a significant one-time boost from new customers filling up their inventories with your product or products? Can we expect a pullback from the Q3 level in their demand going forward?
Yeah, that's of course a very good question, and I wouldn't say a one-time effect. I would say that we have built our footprint, and the result of that is visible. It's not a campaign in and out, but it's a real work with the shelves and so on. So systematically, we are building the distribution throughout Europe. I think that's visible. Commenting on what to expect for the near future, we can't really do it but I have to still raise that the world is very uncertain, and the shopper and the customer behavior is uncertain.
Thank you, Alexander. Gross margin in Q3 was decent. Can you elaborate on that? How should we look at that going forward given plastic price development?
I can start commenting at least. Of course plastic raw material prices have a significant effect on our figures. We benefit now from the slightly lower raw material prices and the price increasing effect. It's worth mentioning also that the raw material price increase, there's a sort of lead time before we see it in the figures. I t's not visible right away. The stock levels are high currently, and it takes some time before the stock rotates, and we start to see the price development.
Yes. Thank you, Saara. Flat selling and marketing expenses year on year. What have you done when it comes to sales effort, fairs, and so on?
That's a very good question. Of course the best for us at the moment, the best way to drive good sales is to have our stores in order to be an easy partner to work with, to always be eager to partner up with our customers and add as much value to their work as we can. I think the philosophy for us is that if we are successful together with our customers in selling out goods from the stores, then we all benefit from the situation.
A lot of that work. Clearly new products as well. Then, commenting on fairs. Unfortunately there has been a long time of Corona and fewer fairs than normal. Now lately we've had some customer fairs, some fairs internationally, and we are now looking forward to have the biggest fair of the year next year in February in Frankfurt.
Exactly. Good. How has the development of new and existing customers in Europe developed?
More of the same one, yeah. Clearly what we have done on the European field is that we have strengthened the organization in terms of resources in many ways, and maybe some of you remember that we also have a change in management on the European markets. I think the momentum is key here. We have worked for many years to establish our sales organizations. We have put up our own warehouse on the border between Germany and France to be able to be a good partner for the retailers in Europe. I think that trend is gradually being visible. We have a strong intention to be a number one on the market, and we are taking the action to become that.
Yes. About the end customer demand. What kind of insight do you have into sell-out in general in the end customer demand?
Yeah. It's mostly what we get from our customers. Actually cashier data on how our products go through the cashiers, and that we follow closely. From some customers, we get it very detailed. From others, we get it on a more aggregate level. Clearly, we also follow the card data that we get on some markets on how the market in general is developing.
One final question. Net working capital down EUR 2.2 million quarter-over-quarter. Should we see similar trend in Q4?
Well, we are not giving a short-term guidance, but this year also the quarters have been quite different compared to each other. Also the fact that some of the payables are overdue during the quarter for more than last year is affecting the figures and t hen the other fact is that we've been postponing slightly investments, and investment phasing is more during the quarter four. That is affecting the figures as well.
Thank you, Saara. These were all the questions this time.
Okay. We take the opportunity in wishing everybody a nice autumn.