Ladies and gentlemen, welcome to the Medmix full year results 2022 conference call and live webcast. I am Moira, the Chorus Call operator. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Sheel Gill, Head of M&A, Strategy, and Investor Relations of Medmix. Please go ahead, madam.
Thank you, Moira. Good morning, all, and welcome to Medmix's Full Year 2022 results call. Today with me in the room is our CEO, Girts Cimermans, and our CFO, Jennifer Dean. For this call, we have prepared a presentation which you can find on our website. Please note that if you'd like to ask questions following the presentation, you have to dial in via the phone number that was sent to you when you registered. As always, I want to draw your attention to the Safe Harbor statement on slide number three. The presentation may include forward-looking statements containing risks and uncertainties. These statements are subject to change based on known or unknown risks and various other factors, which could cause the actual results or performance to differ materially from the statements made in the call.
Having said that, it's now my pleasure to hand over to Girts for the presentation.
Thank you, Sheel Gill, and good morning, everybody. Let me talk about the highlights of 2022, which was in many aspects, very far from business as usual. The momentum that Medmix had throughout last year continued into early 2022. The world was enjoying recovery from a pandemic when the Russian invasion of Ukraine brought with it unforeseen geopolitical and economic effects. Supply chain constraints, rising freight, commodity and energy prices and their impact, followed by COVID lockdown in Shanghai that limited our output and sanctions in Poland late April that led to the suspension of manufacturing in our plant in Wroclaw. Despite this backdrop of volatile geopolitical and market conditions, we delivered a strong performance for the year 2022, our first full year of independence from Sulzer. We delivered a record revenue of CHF 477 million, which means 5.7% year-on-year FX-adjusted growth.
All segments except industry delivered accelerated growth. Industry segment, after some incredible efforts from commercial and operations teams, outperformed our revised expectations in terms of the speed of relocation of production. The result was revenue above the top end of adjusted guidance. As a note here, if we adjust for the CHF 28 million revenue impact of the sanctions, Medmix would have delivered 11.8% year-on-year FX adjusted growth, which is above the top end of our original guidance. We delivered 22% adjusted EBITDA margin in line with our adjusted guidance. This is 290 basis points lower than 2021 due to a combination of effects. Cost inflation, where we were successful in securing price increases, but with some time lag. Mix and the impact of sanctions in Poland.
We generated free cash flow of CHF 10 million, lower than our 2021 result, reflecting higher inventory levels and capital investments made to minimize supply chain disruptions. In terms of innovation and commercial successes, a couple of highlights for me were the launch of PiccoJect, our auto-injector platform, and our micro-bristle applicator for cosmetic and other applications. In terms of our healthcare strategy, we achieved an important milestone for our U.S. customers with the signing of a lease for a new production facility near Atlanta, Georgia. We also gained traction on our local for local strategy in China, announcing the intention to acquire Qiaoyi Plastic, a beauty manufacturing business. I was very proud of our teams in their decisive response to sanctions in Poland to ensure customer service. This included, 1st, a rapid ramp-up of alternate production across our existing factory network.
2nd, the acquisition of a plastics business of Universal de Suministros. 3rd, the subsequent leasing of a new site in Valencia to create a strong future production base for industry, which should be up and running in the second quarter this year. Slide six, as a brief reminder, here are a few key statistics on Medmix. Slide seven, let me talk about the revenue performance of our segments. I mentioned, all segments demonstrated accelerated growth in 2022, except industry, which nevertheless delivered a strong result thanks to rapidly deployed mitigation plans. Dental delivered CHF 125.1 million in revenue, meaning growth of 5.8% year-on-year, a strong performance, especially in the United States and in the first half of 2022. Demand began normalizing in the latter part of second half of 2022.
Drug delivery achieved an impressive CHF 47 million in revenue. 21.4% growth year-on-year, with higher demand from customers consistent with underlying market trends. Surgery revenue at CHF 12.8 million was slightly up year-on-year, reflecting strong growth in tissue bank revenue and rebound in elective surgeries. This was offset by one large customer who overstocked in 2021. Industry revenue at CHF 148.2 million declined year-on-year by 8.2%, with a CHF 28 million impact of the sanctions in Poland. Underlying trends remain strong, with continued demand from key industries, especially construction, automotive, and aerospace. Beauty revenue grew strongly to CHF 144.1 million, 18.6% year-on-year, driven by new product launches and market growth as this segment was the last to emerge from pandemic restrictions and is now back to pre-pandemic levels.
The Beyond Mascara strategic initiative gained solid traction as the team has started to work on six new customer projects involving the new microbrush applicator. In the next slide, let me talk more about the healthcare business area. Healthcare business area revenue at CHF 184.9 million is up 9.2% year-on-year, capitalizing on a recovery in scheduled treatments and elective procedures. Healthcare business area revenue represented 39% of Medmix revenue in 2022, up from 37% the previous year. Dental remains the largest segment with 68% of healthcare revenue. Business area gross profit margin at 61% is up 20 basis points year-on-year, reflecting successful negotiations for price increases with some time lag and margin upsides on closeout of customer projects. Now a few words about the consumer and industrial business area.
Consumer and industrial business area revenue at CHF 292.3 million is up 3.6% year-on-year despite Polish sanctions due to the successful launch of new products and post-pandemic recovery in beauty. Business area gross profit margin declined 470 basis points year-on-year to 36%. This decrease was driven by cost inflation passed on with some time lag, unfavorable mix effect, and higher temporary costs in industry following the relocation of production. A few words on our progress in the area of sustainability on slide 11. Medmix understands and embraces our responsibility for the environment and society. Therefore, we have continued accelerating sustainability efforts to minimizing negative impacts, maximizing benefits, and future-proofing growth. In this respect, we completed our first CDP climate change assessment and obtained an awareness C rating. This means the company has already achieved its 2025 goal.
With a vision beyond climate change, we also committed to the United Nations Global Compact by making its principles part of our business strategy. Completing the journey which was started by our beauty segment, Medmix committed to the Science Based Targets initiative Net-Zero Standard and to setting a robust emissions reduction target. The company also joined the Business Ambition for 1.5 degree C campaign, the world's largest and fastest-growing group of companies that are aligning with 1.5 degree C to help halve global emissions by 2030. According to EcoVadis, Medmix has secured strong ratings for select manufacturing sites, with 1/3 already having achieved our 2025 targets. We are committed to achieving the EcoVadis Gold rating for all our manufacturing sites by 2025, ensuring the same sustainable level across the worldwide network, and are making good progress towards this goal.
We continued our journey by launching new sustainable products like Natural Mascara, a brush made of 100% post-consumer recycled resins. The brush stunning look is made of vegan and bio-based fiber composed of 100% renewable raw materials made from castor oil plant. PiccoJect is our first drug delivery product developed according to our ecodesign principles, resulting in a design that features low carbon intensity material as standard. Industry customers welcomed and showed high interest in GreenLine cartridge made of 100% PCR. Over to operations highlights on slide 13. Continuing from last year's addressing COVID, the operations team again had a busy and successful year in 2022.
The work on our new industry manufacturing hub in Valencia is underway. This 148,000 sq ft facility will create 300 new jobs, and we aim to start operations there by mid-2023. We signed a lease agreement for our new healthcare site in the vicinity of Atlanta, Georgia. This 300,000 sq ft facility will create 200 jobs in the area. We aim to start operations there in the first quarter of 2024. As many of our healthcare customers are U.S.-based, this facility positions us favorably in the world's largest healthcare market. Now I hand over to Jenny for further details on our financial performance in 2022.
Thanks, Girts. Turning now to slide 16. As mentioned, a strong performance in all segments resulted in record revenue of CHF 477.1 million in 2022, meaning 5.7% year-on-year FX adjusted growth. This was above the top end of our adjusted guidance. Correcting for the impact of lost revenue while our Poland facility was closed, we would likely have delivered 11.8% year-on-year FX adjusted growth, which is above the top end of our original guidance. Our business area gross profit margin % and gross profit margin % decreased by 250 and 280 basis points, respectively, versus 2021. Primary drivers here were the time lag in price increases versus cost inflation, adverse mix effects, and higher temporary costs in industry due to the relocation of production.
Adjusted EBITDA margin percent decreased 290 basis points versus the prior year, driven by the pressures on gross margin mentioned previously, our investment in headcount to support our strategic initiatives, and the cost of setting up infrastructure and shared functional teams to position ourselves as a standalone company. Net income reflects the negative one-off impacts of CHF 24 million due to the deconsolidation from group accounts of our Polish legal entity reported within OpEx, and CHF 6 million incurred in relocating production from Poland, reported in cost of goods sold. Free cash flow of CHF 10.3 million reflects higher volumes in Medmix in 2022, driving higher working capital overall, higher inventory levels to secure customer deliveries, and elevated capital investments in industry. Moving on to our walk for year-on-year adjusted EBITDA on slide 16.
We start with the baseline of 2021 adjusted EBITDA of CHF 114.5 million. We saw a very nice uplift this year of CHF 18.9 million resulting from volume and price. A significant portion of that uplift was the result of price increases implemented to compensate the exceptional level of cost inflation. Those higher costs, in addition to the temporary costs reported in cost of goods sold related to the relocation of Poland production and our slightly unfavorable mix, resulted in a combined negative impact for margin and mix of CHF 24.7 million. OpEx, with an increase of CHF 10 million year-on-year, grew in line with our plan.
Primary drivers here were the hiring in sales and R&D to drive our strategic initiatives and a step-up related to headcount and infrastructure to operate Medmix as a standalone company. This OpEx increase in 2022 included CHF 3.6 million of non-operational or temporary costs being spin-off related expenses for legal costs, signage, and IT, and costs associated with M&A. For clarity in the bridge, I've shown separately from other OpEx costs the one-off impact of deconsolidating our Polish legal entity. Primarily due to the impacts related to Poland just discussed, we had a large year-on-year increase in non-operational costs of CHF 31 million. I've included a small table at the top right of the slide to break this sum down for your reference.
Ultimately, we delivered adjusted EBITDA of CHF 105.4 million in 2022, a net decrease of CHF 9.1 million versus the prior year. We now move to the bridge from 2022 adjusted EBITDA to net income on slide 17. Depreciation and amortization were stable year-on-year. Nothing to highlight here. Our non-operational costs are broken into two for clarity. CHF 30 million related to Poland, as mentioned previously, six in cost of goods sold and 24 in OpEx, and CHF 3.6 million related to the spin-off and M&A reported in OpEx. Financial expenses at CHF 7.4 million were CHF 1.2 million lower than the prior year, a good result achieved by establishing our new funding arrangements.
Income tax was at a relatively low level in 2022, impacted primarily by the deconsolidation of Poland and impairment in investments. Our effective tax rate was 5.1% and on a normalized basis, 14.2% compared to 15.1% in 2021. Moving on to slide 18 and our walk from net income to free cash flow. Depreciation and amortization, as mentioned earlier, were stable versus the prior year. The net movement in working capital and current assets in 2022, including the Poland deconsolidation effect, was relatively low. We saw an increase in working capital due to higher volumes and increased inventory to secure customer service levels. This was offset by increases in accruals and non-cash items, especially related to Poland deconsolidation. Capital expenditure was close to guidance at 8% of revenue.
As events in Poland unfolded, we diverted resource and capital investments towards relocating industry production to other sites in our factory network while preparing for our new site in Valencia, Spain. In parallel, we continued to develop our new US healthcare site in Atlanta, Georgia, and invest in our exciting innovation pipeline. With free cash flow at CHF 10.3 million, we converted 90% of our net income to free cash flow, a very good outcome in line with historical norms. Finally for me on slide 19, we see that net debt decreased by CHF 46 million to CHF 157 million, reflecting higher capital investments and working capital. Our net debt to adjusted EBITDA ratio remains strong at 1.5x . Back to you, Gits.
Thank you, Jenny. This brings us to the financial outlook on slide 21. In 2023, we expect revenue to grow 5%-7% organically as demand continues to normalize across the segments. With respect to the adjusted EBITDA margin, we expect to deliver 23%, which is 100 basis points increase from 2022. Gearing up to full capacity in the course of the year in our new facility in Spain will mark the start of return to a more normalized cost base in industry. We also anticipate an improved revenue mix overall. CapEx will stay at around 9% of revenue, excluding the exceptional spend for the new Valencia plant ramp up, and 14% of revenue in total. Our midterm aspiration of 8% revenue CAGR and 30% adjusted EBITDA margin remains unchanged.
The timeline is delayed short term by the closure of our site in Poland, but reinforced medium-term by our new setup in Valencia. Finally, to my takeaways for the past year on slide 22. Despite the geopolitical headwinds, we achieved a record revenue in 2022. Teams around the world did an amazing job, and I am proud of their achievement. Healthcare business area continues to enjoy strong momentum. The new PiccoJect auto-injector platform has generated strong interest in the market with the first customization order within the first 6 months after its launch. We demonstrated focus, speed, and strong execution abilities as the recovery plans in consumer and industrial business area progressed. Strong post-COVID growth in beauty brought business back to pre-pandemic level. Our patented micro-bristle applicator, launched in 2022, proved to be a success for existing and new customers alike.
Valencia ramp up for industry was and remains on track. We executed on our local for local strategy in China by announcing our intent to acquire Qiaoyi, a local beauty manufacturer. It was yet another year of extraordinary events and extraordinary performance of teams across Medmix. I'm pleased with 2022 results of Medmix and proud of our committed and dedicated employees worldwide. With this, I would like to thank you and open the floor for questions.