Good afternoon, ladies and gentlemen. I welcome you to the audio conference call for the half year 202 3. I hand over to Daniel Lutz for more.
Okay, good afternoon, ladies and gentlemen. We'd like to welcome you to today's analyst and investor call, as a report on ORIOR's 2023 half-year results. With me in Zurich, I welcome Andreas Lindner, CFO of the ORIOR Group, and Milena Mathiuet, Chief Corporate Affairs Officer. I will start with the CEO statement on page four. We were able to continue our growth course. ORIOR Group grew organically by 2.4% in the first half of the year. This is good in the context of ORIOR's volatile sales markets and categories, where some outperformed pleasingly, some others did not quite meet our expectations. More on this later. Sales growth amounted to 0.9% and is composed of organic growth of 2.4% and a negative exchange rate of -1.4%.
The main drivers were to implement the price increases due to higher raw material and input costs, the strong double-digit growth of casual food, and the continued good performance of Culinor in the Benelux. It was also pleasing to see that various food service channels continued to develop positively, despite acute shortage of skilled workers. Inflation rates in Europe and the USA had a negative impact, affecting consumers' purchasing power. We felt these effects, especially in our export markets in the U.K., mainly. This also explains the disappointing sales performance with our British partner, Kiss. In Switzerland, plant-based sales are okay. Even in this country, it is not on the same strong growth course as it was in recent years. We are working intensively on new creations, on innovation, on productivity, and on opening new channels and sales markets.
So far, we haven't managed to come up with a big hit customers outside Switzerland. However, we have been able to hold promising talks with foreign customers and have already started to develop customer-specific recipes. Low pork prices continued to depress net sales. Towards the end of the first half, we felt a slight recovery for the first time for years. Overall, the refinement segment recorded stable sales volumes, outperforming the market, which suffered slight losses in the categories we serve. EBITDA increased by +0.8% to CHF 30.5 million , which corresponds to an EBITDA margin of 9.8%. Growth with higher margin product segments due to the business model and continued efficiency enhancement measures had a positive impact on profitability, too.
High input costs and reduced purchasing powers in the sales market due to inflation had, on the other side, a negative impact. In the first half of 2023, we were able to successfully advance various important group initiatives. I would like to briefly mention some of them now. We are consistently working on the implementation of the ORIOR 2025 Strategy, and will take stock at the investor day on September 19th this year at Casualfood in Frankfurt. Within ORIOR New Normal, we have begun planning for plant development or operational footprint 2030, with the goal of looking at all operations over the next 12 to 24 months and to develop a roadmap until 2030. Finally, in the area of ORIOR responsibility or ESG, we submitted the SBTi commitment letter in June this year, launching another important initiative.
We move now to page number five. Our setup is characterized by the decentralized competence center philosophy, which is supported by autonomous and regionally anchored companies with their own product and brand words. This creates proximity to the market and makes the individual competent centers, which specialize in their product categories fast and agile. The breadth of our product range and our diversification in categories, sales channels, customer portfolio, and geographical market coverage makes us resilient and gives us stability. Sales to customers outside Switzerland increased, as expected and in line with our strategy, to 30.9%. We are convinced of this positioning and the strength that comes with it. Because it forms the resilient and stable basis for the successful further development of the ORIOR Group in the coming years. We go to page number six.
We acknowledge the ongoing geopolitical challenges with great respect, and we are addressing them consistently and proactively. In the following, I would like to discuss some important topics and already started or planned ORIOR measures. In the area of input costs, we try to proactively manage or minimize potential price increases along the entire value chain. We have taken several measures in this regard. We strengthened our purchasing function by establishing a strategic purchasing group with responsibilities for each major commodity or purchasing item. We operate a flexible, active inventory management system, particularly in response to rising raw material prices. For example, due to announced price increases for pork in Switzerland by end of March, we purchased, starting April, more pork products at lower prices, and will benefit in the second half of the year.
We have already locked in the energy costs early for both 2023 and 2024, and included them accordingly. We are also proactively addressing the challenge of the loss of purchasing power in the sales market by strengthening and expanding both the entry-level price and the premium price ranges in the area of innovation, such as shown by Guldenhof with its low price, fresh menu range at Albert Heijn in Holland, or the expansion of large format offerings for promotions. We also work consistently on white spots in the areas of new customer acquisition or the establishment and development of new sales markets. For the successful implementation of the white spots, two important things are needed: intuition and timing. Regarding the plant-based business, we remain fully convinced of the future viability and growth potential, and see the current development as a temporary bear market.
The main reason for my statement lies in the fact that more and more people are committed to the flexitarian diet. That is why we continue to work consistently on the implementation of our plant-based strategy along the following topics. Rigorous focus on building and developing new export sales markets. A continuation of the high innovation cadence along all price points and channels in Switzerland. Increased competitiveness in general, and especially in exports, thanks to the new wet extrusion formulation in the price entry area developed, and continuous optimization of cost structures and efficiency in production. We turn to page seven. We do sustainability not because we have to, but because we want, and because it secures our future viability. Sustainability has long since ceased to be just about saving electricity or going organic. Sustainability encompasses all process steps, all areas, and the entire value chain.
It is about improvements at all levels. We are pursuing this path out of conviction and because it makes us better, bit by bit, in terms of sustainability and also in terms of cost, efficiency, and also opportunities for new sales. On this page, you can see some examples of what we worked on in the first half of this year. A lot of reporting, rating, and data collection. There will be some new legal requirements in Switzerland, as well in Europe, regarding sustainability. That will tie up resources and costs. Reporting, ratings, and new legal requirements do not per se, make us better in terms of sustainability, but they teach us a lot and show us gaps, and they create the baseline at the new level that applies to everyone. They create also some common understanding and transparency.
We are trying to build on the positive momentum from these developments as best as we can. In all of this, it is important to me that we do not lose sight of the actual progress of sustainability, because that is what counts in the end. I will now hand over to Andreas Lindner for the financial report. Please, Andreas.
Thank you very much, Daniel. Ladies and gentlemen, I would also like to welcome you to this call, and will be happy to guide you through the financial results of the first half of 2023. I will start my review on the first six months with details on the sales development on page eight. We were again able to grow organically. A look over the last three years shows the continuous growth trend that we have been able to achieve, thanks to our business model. The increase in sales of 0.9%+ is composed of organic growth of 2.4%, and was driven by the good growth of the international segment. Last year, we saw more volume growth than price growth. This year, the reverse is true. Most of the sales growth comes from price increases.
The exchange rate effect was strong, influenced by the Europe devaluation, amounted to -1.4%, which corresponds to CHF 4.4 million. I come to the convenience segment on page nine. Our four convenience competence centers showed growth of +1.5%, adjusted for special items. Excluding special effects, sales just reached the previous year's level. In the Swiss domestic market, the segment performed well and met expectations. Exports, however, were disappointing. The convenience companies accounted for around 35% of total group sales. Our pasta company, Pastinella, has shown positively in all channels. Overall, convenience companies in the retail channels as well as in the food service, generated an increase in sales. Export business, however, did not meet our expectation in the first half.
Plant-based shipments to the U.K. were weak, and Biotta exports also suffered from weaker consumer demand due to inflation. Due to the closure of the Urdorf plant last year and the transfer of certain products to Rapelli, there was a shift in sales from the segment convenience to refinement of CHF 1.7 million. On a positive note, the various product highlights include, in addition to the good pasta performance, the growth of the poultry specialties and fresh menus in the food service channel and travel gastronomy. Additionally, three Biotta SPRIZZ innovations, refreshingly light organic lemonades with vegetable content, were launched. I switch to the Refinement segment on page 10. The Refinement segment did not meet our expectations in the first half, and fell short of the previous year result by -4.3%.
Adjusted for special effects, that is the sales transfer from convenience refinements of CHF 1.1 million, the decline amounted to 5.2%. The segment realized sales of CHF 119.3 million, and thus contributed 35.3% of group sales. A major factor influencing the sales decline in half year one, was the persistently low pork prices, which only recovered slightly in June. Exports of our Bündnerfleisch competence center, Spiess, also suffered from weak demand in France due to inflation, which led to lower intercompany sales. About half of the refinement sales decline comes from these intercompany export sales. Volumes developed in a stable fashion despite lower promotional activities. In terms of volume, the segment does perform better than the market, as the categories we were serving were in decline.
This shows that we have good sales arguments with our specialties, high quality, regionality, and also organic, sustainable. In particular, products with organic or other sustainability labels increased again in the first half of the year. Among the product highlights, we can certainly mention the terroir specialties of Rapelli, as well as the grill assortment with regional specialties. I will now turn to the international segment on page 11. Our four foreign competent centers exceeded the high expectations at, and achieved a sales of CHF 94.2 million. That means a growth of +6% compared to the first half of 2022. The share of the international segment amounts to almost 30% of group sales. Organic segment growth was a +11%.
The FX effect was a considerable -5% in the first half of the year, due to the strong Swiss franc. Casualfood delivered strong double-digit sales growth, thanks to rising passenger numbers and outlet openings. Culinor grew very well, in particular, thanks to price increases, that is, the passing on of the higher input costs. Gesa and HBS Europe fell short of the previous year's level due to inflation and correspondingly lower purchasing power in the sales markets. Highlights of the first half were the opening of further outlets at the BER Berlin Airport and the new listings of menu concepts.... The realization of bridges, "...", such as the Biotta, the Spiess sticks between Casualfood and the Swiss units were also a highlight. We now turn to the consolidated income statement up to EBIT level on page 12.
ORIOR Group generated net sales of CHF 312.1 million in the first half of 2023, an increase of 0.9% year-on-year. Absolute gross profit increased by 7.9%, and the gross margin increased by 314 basis points to 48.8%. The main driver is the growth of the international segment, with travel gastronomy and the higher gross margins due to the business model. Also important was the pass through of the higher input costs and efficiency gains at the factories. EBITDA increased by 0.8% to CHF 30.5 million, which corresponds to a constant EBITDA margin of 9.8%.
EBIT declined by -4% to CHF 16.8 million due to higher depreciation and amortization in connection with investments in future high margin and innovative product categories, like the plant-based. Accordingly, the EBIT margin was 5.4% versus 5.6% in the previous year. I turn to page 13, and thus, to the consolidated income statement below EBIT. Financial expenses decreased by a total of CHF 0.5 million. The higher interest charges due to the rising interest rates were more than offset by lower foreign currency losses. At CHF 15.4 million, group profit before taxes was slightly below the previous year's level of CHF 15.5 million. There was no change in the income taxes.
The tax rate of 16.2%, slightly above the previous year's level of 16.1%, but within the median term expected range of 14%-18%. We no longer had any minority interest in the first half of last year. We still had a small casual food share. Consolidated net income attributable to ORIOR shareholders amounted to CHF 12.9 million, virtually unchanged from the previous year level of CHF 13 million. Now, page 14 shows the consolidated balance sheet according to Swiss GAAP FER. There were actually no particular changes in the balance sheet compared with the previous year. Property, plant, and equipment, and intangible assets decreased due to the ongoing depreciation and amortization. Borrowings and also current assets are slightly lower due to the increased business activities at the end of the year.
The equity ratio at the end of June was at 21.4%, thus still above the 20% threshold that is important for us. The equity ratio, according to the shadow calculation, that is taking goodwill into account, was at 37.7%. I turn to page 15. Here we see the development of our debt ratio since 2013. Until 2019, the leverage ratio was always remained below 2.5 x, despite various acquisitions. Due to COVID-related effects, the debt ratio was higher in 2020, at 2.87 in the short term, then was reduced again significantly in 2021 and 2022. Now, as of the first half of 2023, the leverage ratio is 2.18, we will continue to pursue a consistent deleveraging policy.
The declared target of our leverage ratio is clearly below, below 2.5. I turn to cash flow and dividends on page 16. The operating cash flow reached CHF 18.8 million in the first half of the year and was characterized by deliberate build up situation, amounted to 61.8%. As far as the dividend is concerned, a slightly higher distribution of CHF 2.15 per share was again approved this year. This is also in line with the attractive dividend policy, which provides for a steady increase in the absolute dividends. Since the IPO in 2010, ORIOR has always significantly increased the dividend in absolute terms. We have also committed ourselves to this attractive dividend policy for the future as part of our ORIOR 2025 Strategy.
We are proud of our shareholder base, which is characterized by long-term, oriented, and solid investors. With these words, I give back to Daniel.
Thank you very much, Andreas. We move to page number 17 in the outlook. For H2, we expect significantly stronger organic growth than in the first half. The general conditions with the international distortions will continue to be the main influences on business. However, our broad positioning will help us to counter these headwinds in the second half of the year. Overall, we expect the second half to be stronger than the first half. Accordingly, we can also confirm the guidance for fiscal year 2023 at constant exchange rates. On the channel side, the food service sector, including travel gastronomy, is expected to perform particularly well. In retail, we anticipate a development on par with the previous year in Switzerland and further growth in the Benelux. Profitability continues to be affected by the international upheavals. These cannot be fully compensated by price increases.
The comprehensive measures to increase efficiency and the sales mix with growth in higher margin products and customer groups will support profitability. Ladies and gentlemen, the general conditions in the second half of the year are challenging. There are also many opportunities. Based on our business model, we are able to realize these opportunities quickly and efficiently. Thanks to the initiatives already implemented and the new opportunities of which we are now aware, we are confident that it will be a good second half of year 2023. We move to page 18 into the segments. I would like to briefly touch on some of the H2 growth initiatives in the three segments. In the convenience segments, we expect good growth for H2.
In the plant-based sector, we succeeded in concluding two exclusive partnership agreements for Switzerland, One with Juicy Marbles from Slovenia, and the other one with Redefine Meat from Holland and Israel. Juicy Marbles offers a high quality, thick-cut filet steak. This innovation was launched in spring as an in-out promotion at Migros. Due to its success, this product was subsequently listed in the fixed range of Migros and has also been now available at Coop for one month. The second exclusive partnership we have concluded with Redefine Meat for the food service sector. Redefine Meat also offers enjoyable meat substitute products. Among them is the flank steak, the first commercial product from the 3D printer. With Biotta SPRIZZ in the beverage area, we have ventured into the healthy, vegetable-based, carbonated beverage sector with the three varieties: cucumber lemon, carrot tangerine, and ginger lemon.
The drinks are supported by a casual and very fancy modern design. Page 19. In the refinement segment, we expect slight growth compared to the previous year. Here, a few examples. Small households with one to two persons are also growing rapidly in Switzerland and accounted one year ago for around 70% of all households. In line with this trend, Rapelli has introduced a lead range in the small portion area of 30 g in sustainable cardboard packaging. This range will be listed nationally at Migros, starting from October this year. Albert Spiess, on the other side, has produced and innovated the new Salsiz Stretg, according to traditional recipes with traditional craftsmanship in the Surselva region. You see this product is this curved type of sausage you see on the right-hand side.
This novelty impresses with its high-quality ingredients and traditional recipes handed down from generation to generation, typical of the local area in Graubünden. The Salsiz Stretg can be re-listed and found in several channels in the second half of this year in Switzerland. We go to page number 20. We expect continued strong growth in the international segment in H2 as well. Also here, two examples of growth. In spring, as mentioned at the beginning, Culinor introduced two entry-level price point products at Albert Heijn in Holland, spaghetti bolognese at EUR 2.49, and penne with grilled vegetables at EUR 3.29. Within a few months, especially spaghetti bolognese has become a top seller, with over 20,000 portions sold each week and amount rising. There is also a news from Casualfood.
Casualfood opened just this week, namely two days ago, its first food concept at the train station at Hamburg Central Station, Germany's busiest, most frequented train station. It is about the successful pasta concept, where we offer crispy pizza slices and fine Italian pasta dishes. The first food-only concept at the train station is another milestone for Casualfood, as it will open doors for further positive development at train stations across all Germany and most probably also outside Germany. This brings us to the end of our presentation. At this point, I would like to mention that the ORIOR Investor Day will take place on September 19th, 2023, at Casualfood in Frankfurt. If you are interested in attending, please contact us as soon as possible.
As you will spend part of the day airside, visiting all the outlets, we need at least two to three weeks lead time for approval batches. Thank you very much for your attention, we are happy now to answer any questions from your side. Elena, please.
Ladies and gentlemen, we are happy to answer your questions. If you have some, you can raise your hand, or you can also post the question in the chat section. I don't any question at the moment. We wait just a few sec. Are there any questions? This is not the case. I hand back to Daniel for the closing words.
Okay. Thank you very much for your attention, the time invested into ORIOR, and I wish you a great afternoon and after a nice evening. Thank you very much, and see you again. Bye-bye.
Thank you. Bye-bye.
Thank you. Bye-bye. Bye-bye. Bye.