Welcome everyone to Elmera Group's fourth quarter results presentation. My name is Morten A. W. Opdal, Head of Investor Relations at Elmera, and I will be guiding you through today's presentation. Today's event is a webcast only. The presentation will be held by our CEO, Rolf Barmen, and our CFO, Henning Nordgulen. We will conduct a Q&A session at the end. As there is some delay on the broadcast, we encourage you to submit your questions during the presentation. Please welcome the first speaker, Rolf Barmen.
Thank you, Morten. Good morning, everyone. Let's start with going to the page number 2, start with the highlights of this quarter. The quarter has been a challenging one, with extreme market volatility and product migration in the consumer segment, which has impacted the group's results significantly. The group's net revenue was NOK 372 million this quarter, and EBITDA adjusted was NOK 28 million. This is in line with the communication and stock exchange notice from December. The customer growth was solid with more than 20,000 new deliveries in the consumer segment, and the business segment continues its strong performance with a pipeline into 2023 that is at an all-time high level. The Nordic segment has developed in line with our expectations and guidance from the third quarter.
The results are still affected by the residual profile costs from the fixed price contracts in this segment. As stated in Q3 presentation, the volume on contracts with profile risk is significantly reduced as from the Q2 2023. The decrease in number of deliveries in the Nordic segment is due to the deliberate phase out of non-strategic customers. The cooperation with Telia is progressing according to plan. When it comes to dividend, the board of directors have proposed a dividend of NOK 1.5 per share for 2022. Next page, please. Page three. Export prices have been highly volatile in Norway also in this quarter, not only in the southern part, now also especially notable in central and northern Norway, where supply conditions in Sweden led to an unprecedented price increase in December.
Pursuant to a regulatory change from 1st of November, all contracts now have a mandatory 30-day notification period for price increases. However, as customers have no corresponding binding period, future delivery volumes have become less predictable in faces with high-price volatility and shifts in consumer preferences. This has hit the variable product portfolio. Both Gudbrandsdal Energi and Fjordkraft has assisted customers in migrating from variable to spot contracts and has experienced a significant shift towards spot contracts in Q4 . At year-end, variable contract customers represent 11% of the consumer segment, down from approximately 27% at the beginning of the quarter. Let me explain a little bit more on why this migration affects our results. In order to manage price risk in the variable contract portfolio, the group enters into forward contracts on parts of the estimated delivery volume.
With decreasing export prices through October and November, the value of the for-forward contracts for the variable products these months was negative. Due to significant product migration, which is made possible due to the fact that the customer had no binding period, the remaining contract volume was not sufficient to absorb the negative impact from hedges. In addition, the rapidly increasing prices in December has had a negative margin impact on the remaining unhedged volumes on these contracts. The group now has stopped sale of variable contracts and have also initiated a soft phase-out strategy for the product. The reduction in the contract portfolio through fourth quarter reduces the margin risk associated with the product category going forward. Next page 4, please.
As disclosed in the stock exchange notice in December, we have entered into a cooperation with Telia on mobile customers, where Telia is taking a 39% stake in Fjordkraft Mobil. The purchase price is estimated at NOK 120 million, subject to number of successfully migrated customers. The customers will be operated through Telia's network, and Fjordkraft will deliver services like customer service, operations, billing, and branding. Through this setup, we ensure an attractive mobile offering to Fjordkraft's mobile customers, and it also has a positive effect on profitability. We have recently hired a general manager for Fjordkraft Mobil AS and expect the transaction to be completed during the first quarter. The customer migration will take place in the second quarter. Next page 5, please. The deliveries and volume development in our three main segments are presented on this slide.
As mentioned, we are very satisfied with the delivery growth in the consumer segment, which now constitutes 685,000 deliveries. The business segment grows by 3,000 deliveries quarter-on-quarter, while the Nordic segment decreased 13,000, as mentioned, driven by a deliberate phase out of non-strategic customers. Next page 6. When it comes to our new growth initiatives, they are developing well. We are enthusiastic about the traction we are getting on our sale of solar panel solutions and have therefore increased our sales capacity significantly in order to meet the demand. We see great potential in local electricity production and look forward to provide the market with an update as this part of our business progresses.
Alliance volumes are down 12% year-on-year, and network deliveries decreased by 5,000, as one of our partners was a part of a merger into a vertically integrated company. The number of mobile subscribers is flat from 3rd quarter. Next page 7. On the regulatory side, a standardization of general terms and conditions for spot contracts is expected to be ready in February. This is supposed to be a revision of S tandard kraftleveringsavtale or standardized power delivery terms and will clarify terms and conditions for all players. Further, the industry organization Fornybar Norge slash Renewables Norway, formerly known as Energimarked Norge and Enova, advocate increased capital requirements and closer monitoring of electricity retailers. This is also gaining political support. The intention is to ensure that the market consists of professional players that comply with rules and regulations.
The certification Safe Electricity Retailing or Trygg Strømhandel in Norwegian by DNV now prohibits door-to-door sales and stand sales on the street. Elmera discontinued its door-to-door sales and stand sale on the street activities in the Q2 2022. This does not require any actions from Elmera's brands. The Norwegian poor support scheme has been revised and extended to also include 2024. From the first of September this year, the support scheme for private households will mirror the hourly rate its spot price is instead of using a monthly average and cover 90% of expenses exceeding 70 øre all months. We look upon all these matters as improvements and are highly supportive. I will leave the floor to Henning who will present the financials.
Thank you, Rolf. Please go to slide 9. Starting on the left-hand side, net revenue adjusted decreased by 80% year-on-year to NOK 372 million. This was primarily driven by losses on variable contracts in the consumer segment, but partly offset by an improvement in the business and Nordic segments compared to Q4 of 2021. On the right-hand side, EBIT adjusted in the quarter came in at NOK 28 million. This was driven by the net revenue reduction in the consumer segment, so cost increases and also here offset by the positive comparative figures in the business and Nordic segments. As a result, the EBIT margin over the last 12 months contracted from 35% to 27% in the fourth quarter. There are 2 non-recurring items that have been identified through internal control processes.
These are explained in detail in note 15 in the quarterly report and in the breakdown on slide 19 in the appendix to this presentation. I will therefore not go into the details, but to summarize, we have identified deviations in historical revenue estimates, and we have identified incorrect revenue accrual related to portfolio of fixed-price contracts. This has led to a restating of historical figures against group equity totaling NOK 198 million. Next slide, please. Page 10. The net revenue development in the consumer segment reflects the change in the product mix during 2022. The share of variable contracts is reduced from 34% at year-end 2021 to about 11% at year-end 2022. It also shows the effects of the unprecedented market conditions in Q4 of 2022 that Rolf has covered initially.
Extreme price volatility in combination with significant product migration from variable to spot-based contracts resulted in negative EBIT of NOK 40 million in the quarter. Despite the challenging conditions, we were successful in retaining the majority of the migrating customers. The soft phase out of variable contracts reduces the associated price and volume risk compared to the effects that we experienced in Q4 of 2021. The business segment shows a growth in adjusted net revenue from NOK 143 million in the fourth quarter of 2021 to NOK 169 million in this quarter. Both value and the services product margins improved versus last year. Volume sold was stable year-on-year and EBIT adjusted increased by NOK 7 million year-on-year. Next slide, please.
Page 11. The net revenue in the Nordic segment improves indefinitely from Q4 2021, even though the figures are still influenced by profile costs related to fixed price contracts. I refer back to our Q3 presentation for a description of how profile costs arise. EBIT adjusted is negative by some NOK 35 million in the quarter, which is a slight improvement from our NOK 40 million loss guidance in our Q3 report. The share of fixed price contracts with profile risk drops notably from Q4 to Q1, then tapers off significantly from the Q2 of this year. Turning to the new growth initiatives, net revenue increased, driven by alliance, while EBIT adjusted decreased marginally. Next slide, please. Page 12. The net working capital was NOK 533 million at quarter end, up from NOK 491 million per third of September.
Volumes increase seasonally, the working capital level at quarter end is dependent on the power purchase settlements for the previous months, as well as being subject to fluctuations in invoicing and payment patterns. On the right-hand side, you can see the development in net cash. We started the quarter with a net debt of NOK 1.4 billion, ended with a slightly increased net debt of close to NOK 1.5 billion. I'm happy to report that payment behavior in all our segments remains very strong. I will give the word back to Rolf, who will continue on our outlook.
Thank you very much, Henning. Please go to page number 14. It's the page with the text from the outlook. Regarding our financial outlook, we have decided to discontinue the practice of nominal guidance targets as the current L-spot price volatility associated market risk and regulatory uncertainty makes this kind of guidance less accurate and relevant than before. As stated, we have initiated a phased plan for variable contracts with corresponding reduction of risk and consider this the optimal balance between risk and profitability. The profile risk from NGE or the Nordic segment's fixed price portfolio is reduced into 2023, and we have a positive view on the longer-term prospects in the segment as the market is moving towards spot-based products and we can capitalize on existing know-how and technological solutions from our operations in Norway.
Our B2B segment has performed well historically, and we expect this development to continue. Regarding our mobile business, as I said, the cooperation with Telia is progressing according to plan and is progressing very well. We are also launching an explicit target on cost efficiency, targeting NOK 100 million in run rate OpEx reduction at year-end 2023 compared to year-end 2022. Next page, please. Slide 15. Finally from me, some words on our strategic focus areas and activities. Those of you who have followed us for some years and read our annual reports thoroughly probably recognize how we work on key matters like net revenue growth, cost efficiency, and new business. When it comes to net revenue growth, we are very focused now on increased penetration of our Norwegian concepts in Sweden and Finland.
This goes both for the consumer segment and in particular for the business segment. Our cross-brand and cross-country business sales organization is definitely speeding up, and we already see results both in Norway, Sweden and Finland. Product management will always be a big part when it comes to growing net revenue. We have started to reduce complexity in our product mix, but even more important is to strengthen our value propositions by introducing new products and services. Our risk mitigation product introduced to the consumer market in 2022 has been very popular, and we will introduce new concepts this spring for the Norwegian consumer markets. When it comes to cost efficiency, we have, as I said, introduced a cost efficiency program which targets a NOK 100 million run rate reduction in OpEx at year-end 2023 compared to year-end 2022.
Accretive acquisitions also play an important role to our cost efficiency agenda. After all, this is a numbers game, and a thumb rule is that investments in IT systems require increasing customer base to be profitable. Finally, new business brings us new net revenue streams. Our joint venture with Telia will put us in a situation which is beneficial both for the customers through improved value propositions, but also for the profitability of our mobile business. Demand for solar panels in the Norwegian market is really picking up, and we have partnered with Solcellespesialisten, the largest player on the market space.
Together, we will win market shares both in the consumer and the business segment, both by increasing our sales activity significantly and securing procurement and installation capacity accordingly. Our rating and billing company, Allrate, which you know has offered services to smaller electricity retail companies, is now piloting rating and billing solutions to grid companies who prefer to outsource rating and billing services. This is an exciting opportunity for the group, as this is a market which is currently underserved, and therefore represents a very interesting growth potential. Steady Payments will later this year start offering payment solutions also to Gudbrandsdal Energi and other retail companies. We certainly believe that the services offered by Steady will help consumer customers to level out the burden of the electricity bills.
Metzum, our software company, which we own together with Rieber & Søn, 40%, will the coming years increase annual recurring revenue outside the Elmera Group significantly. The company offers cloud-based rating and billing software to both retail and grid companies that do not want to outsource these functions. To conclude, our revenue streams are diversified, and we will increase penetration in the Nordic and B2B segments. We will revise our product mix and strategy. We will improve our cost efficiency. We will pursue accretive acquisition opportunities, and we will increase contribution from our new revenue streams. Historically, we have succeeded in utilizing retail know-how and experience to grow our revenues and EBIT, and we have great confidence in our ability to continue to create value for both our customers and shareholders in the future. Thank you very much.
We are now moving over to the Q&A session, which Morten will conduct. The floor is yours, Morten.
Thank you, Rolf. We have received a couple of questions on our discontinuance of our guidance regarding how was the outlook for Q1 2023 and full year 2023? What has changed from our profit warning, et cetera. Maybe you want to give some comment on that, Rolf.
Yes. I think, as everyone understand, as you have seen, the market condition has changed a lot since we were listed, both due to global developments and political decisions made. This causes a much higher volatility than we have experienced before, reduces ability in future elsewhere prices, cost of financing, and political risks, hinders us from being as precise in our guiding as before. Our focus is every day to optimize our operations, optimize our performance under the prevailing circumstances, and of course, cultivating new business opportunities in this landscape. As mentioned in the section on strategic focus areas in the presentation, we have confidence in our ability to create value for shareholders also in the future.
Okay, we have a question on dividend and how our dividend policy will be for the next years. Maybe you want to comment that, Henning.
I can do that. The current dividend policy stands. At this time, we see no reason to change the dividend policy in the coming years.
Good. A question, on, whether we have any plans on starting a bank or sell, bank products.
I know this is a bank man. Our new CFO is a bank man. No, we have no plans for time being, entering a new market. We will concentrate and focus on what we now have in our NGE, which are related to the electricity market, of course. No such plans for time being.
Good. Question on the cost reduction program. What's the main contribution, area and how much has historically been associated with personnel sales and what should we expect going forward?
Yeah. Take the last part of the question first, I guess this is about the, about the direct sales cost, and that is in the net working capital slide. It was NOK 61 million in the fourth quarter. The project or the cost efficiency program is a program where we will look at all sorts of costs in the whole group. We will look at operations, efficiencies, IT, procurement, and we will also look at the total capacity in the company. Really an project to cover all of our expenses.
A question on contract product mix. Variable contracts have historically been a high margin product for electricity retailers. How do you plan on compensating for this going forward as you are now phasing them out?
Yeah, I can say something about that. Product range will always be a dynamic. Obviously, we gain a lot of attention and a lot of profitability also with the new products that we launched last year, and we will come, as I say, with new products this spring in the consumer market. We always are in this game of having new products. I wouldn't be too scared about that. The variable products has been more of a liability to us now than performing very well when it comes to profitability. I think that we have a balanced view on this, and we work on our product range continuously.
Thank you. Slightly more detailed question on the variable products. What was the contribution of variable contracts in 2022? How does this affect margins going forward?
Well, we have not disclosed the historical contribution on volume breakdown on a product level. As Rolf said, it's a fact that variable products has historically carried a higher gross margin, however, also, evidently, a higher risk. In addition to that, it carries a higher complexity and implicit more operating expenses. As Rolf said, we will compensate by both by growth and by increasing on other product lines.
All right. I think that, was all the questions we have received. We'd like to thank you all for your attention and wish you all a nice evening.