Hello. This is Masahiko Mori of DMG MORI Company Limited. Today, I would like to explain the financial results for the fiscal year 2022. First, the financial summary. From January to December, consolidated order intake was JPY 542.4 billion, 19% higher than 2021. Only looking at Q4 from October to December, orders amounted to JPY 110.4 billion, 5% lower than in 2021. Order intake for Q4 was below the level of Q1 and Q2 last year, but we are by no means experiencing a recession. Due to conflicts, the willingness to invest has declined. I will go into details later about the inquiries, but the extent of decline is far less severe than during the global financial crisis or the Corona shock. Order backlog climbed to JPY 254 billion.
Orders for service and spare parts and group companies are stable, totaling around JPY 150 billion. Our targets for 2023 are already within reach. Sales revenue for 2022 was at JPY 474.8 billion. Unfortunately, operating profit came in below the target JPY 45.0 billion at JPY 41.2 billion. I will explain the reasons later. Operating margin was at 8.7% in the full year and at more than 10% in Q4. Net profit amounted to JPY 25.4 billion. For both operating and net profit, we achieved all-time highs. In Q4, sales revenue came in at JPY 141.7 billion, operating profit at JPY 14.5 billion, and the operating margin was 10.2%.
With more than 10%, this makes the highest quarterly margin in our history, excluding one-time gain like sale of securities. We aim to keep this level with the price revision for new orders in 2023. Due to inventory adjustments and other factors, we expect some fluctuations in Q1, but we target a total operating margin of 10% or higher for full fiscal year 2023. Average machine unit price has become JPY 49.8 million. This was a great increase from JPY 39.4 million in 2021. The factors were partly FX related, but mostly due to strong demand for Process Integration, automation, digitization for high value machines and systems alongside lower discounts. We further accelerate our investment in human resources. We conducted a large-scale salary revision globally.
As a result, personal cost increased by JPY 11.8 billion, so higher than planned at the start of the term. Of course, some companies pay even higher salaries, but we believe we pay the highest in the machine tool industry in Japan, Germany, and the USA. We raised the salaries for approximately 4,000 Japanese employees in July 2022, with an annualized increase of 24% compared to 2021. Our 2023 forecasts and midterm business plan are already reflecting this salary revision. The midterm business plan is currently being implemented. Only one month has passed so far, but everyone is motivated to make it a success. These are the financial highlights. Please have a closer look. Here is the quarterly progression. Thanks to higher added value and lower discounts, we achieved more than 10% profit margin in Q4 2022.
Here is the operating profit bridge. The reason for failing to achieve JPY 45 billion and coming in at JPY 41.2 billion was due to the global employee salary revision. We unfortunately needed to add up the JPY 1.5 billion impairment loss of our operation in Russia. In 2023, our aim is to achieve 10% operating margin. The cash flows. In the full year 2022, free cash flow amounted to JPY 24.9 billion. Let us look at the balance sheet summary. With a lot of assets in euro or U.S. dollar, total assets inflated by JPY 45 billion due to the weak yen. While skipping over some of the detail, we see that equity ratio has slightly increased to 36.1%. Net debt excluding hybrid capital was at JPY 47.6 billion. Business environment.
Here we see consolidated order intake over time. In 2022, Q1 and Q2 were the highest, followed by a step-by-step decline. We feel that it will not drop any further than this. Based on the newest order intake results for January, Europe was performing better than expected with good numbers. Japan also remains on a good level. We expect Q1 2023 to be on par, if not slightly above Q4 2022. Looking at the right, we see the breakdown by section with service and spare parts achieving stable JPY 100 billion. This benefits our operational resilience, and this becomes especially apparent when comparing to 2018, 2017 or 2016. This is due to various efforts, such as making customers rely on us for purchasing spare parts instead of using Internet sites and third-party providers.
For example, while a limit switch ordered externally takes one month for delivery, we have stocked up our supply to provide such parts within just one week. In these uncertain times, we have trained and stationed our service staff in all regions around the world, and this leads to stable sales growth for our company. Here we see order intake by region. Currently, none of these regions are showing any declines. However, keep in mind this is only the situation after the first month of 2023. In January, I had business trips to Australia and Indonesia. I was also in Germany in February. Based on my experience, I feel that the machine tool orders look better than previously expected. Japan is performing strongly with a lot of interesting projects. The mood in Germany is a bit pessimistic on the market, but the order results were positive.
The same in EMEA as well. In the USA, we have projects including installations for machines purchased in 2022, but due to large-scale reorganizations of human resources and other reasons, some companies are postponing their investment decision making. In China, we will have to see what the future holds after the new year, but order intake in January was positive. This time the largest growth is in Asia. Usually, Asia is the first region where investment declines, but now customers are shifting production from China to other countries, such as India. European and U.S. companies are enhancing their productions in Malaysia, Vietnam and Australia, where they produce parts for the aerospace and semiconductor industry. Indonesia has finally started to become a market for 5-axis machines.
The future is of course unpredictable, but speaking from my current impression, 2023 appears to develop more favorably than we thought at the end of 2022. At least after the first 40 days of 2023, we can say that. Next, consolidated order composition. There has been a strong demand for space, aircraft, medical and EV related applications. Especially space is highly active with at least one rocket per week launched in the U.S. many of such rocket components are made with DMG MORI machines, so space companies are very eager to invest. Small companies with under 50 employees are currently more reluctant with their investment decisions. However, in general, we see a continuous trend of future-oriented companies gradually replacing their 20-year-old machines, such as 3- axis machining centers and 2-axis lathes with the latest process integration machines such as simultaneous 5-axis and mill-turn centers.
Looking at the average order unit price in Japanese yen, we can see a sharp increase partly due to the weak yen. In euro, we can also see distinct growth showing that our strategy has been paying off. We focus on sales of highly accurate and robust simultaneous 5-axis machines and mill-turn centers that enable Process Integration. On top, we offer automation with robot and pallet handling systems and the necessary software such as CAD, CAM, post processors, measurement software, MES, a software that connects ERP systems with machines. All of this is contributing to the increasing average price. Now I will explain the forecast for 2023. This is the underlying concept of our midterm business plan. We call it MX Machining Transformation. It is based on Process Integration, automation, DX which is digital transformation and GX stands for Green Transformation.
It not only means to reduce carbon dioxide emissions, but also to reduce unnecessary work in progress parts and intermediate inventory at customer factories around the world for lean and resource-saving production. All together makes what we call Machining Transformation. Here is our forecast for the fiscal year 2023. We are expecting JPY 500 billion of consolidated order intake, JPY 500 billion of sales revenue, and JPY 50 billion of operating profit. We plan to achieve JPY 32 billion of net profit with around JPY 240 in earnings per share and JPY 80 for dividend per share. Depreciation charges, which include our investments in buildings, equipment, software, and other assets, are planned to be JPY 27 billion. We will reduce our capital expenditure aiming for JPY 35 billion.
We assume an exchange rate of JPY 130 per USD and JPY 140 per EUR. Compared to 2022, we forecast -7.8% in order intake, but target +5.3% sales revenue and +21.3% operating profit. Here is the breakdown of our JPY 500 billion sales target. JPY 254 billion come from our order backlog. JPY 146 billion from service spare parts and group company sales. The remaining JPY 100 billion will be achieved from sales translated from orders within the same period. We will be able to gain JPY 40 billion-JPY 50 billion through new order intake in January and February, so we believe that the necessary JPY 100 billion will be achievable. Next, our net debt reduction plan.
We are aiming to reduce our net debt to around JPY 150 billion, including hybrid capital by the end of 2023. Until the end of 2025, we would like to pay back all our debt excluding hybrid capital. Currently, our annual open house event is being held at Pfronten, Germany. I also went there last week. There is not much snow in Pfronten this year. It is only about 10 centimeters high. Please take a look at the movie. The machine highlights DMU 40, DMU 50, the larger DMU 65, and also DMF 300, to name only a few of our latest simultaneous 5-axis machines made in Germany that are on display this year. Another highlight, 5-axis with integrated grinding and turning functions. Of course, all of our machines come with automation. For example, robots such as AMRs.
We apply our digital twin technology. Paired with smart glasses such as HoloLens, we can run various simulations. Our open house this year is thriving with many guests from Europe and all around the world. A great success. Finally, ESG and CSR. HR investment. We revised the entry-level salary of the Japanese employees upwards. This led to an overall increase of the salary level of the existing workforce. Our goal was to make a competitive salary system that can last at least for the next three years. The entry-level salary of a university graduate is JPY 300,000 per month. With an annual bonus of about JPY 400,000, they will earn JPY 4 million in total. A university student who works as a trainee at DMG MORI earns JPY 2,000 per hour. This is equivalent to an annual salary of JPY 4 million.
Therefore, a university graduate should earn at least JPY 4 million in the first year at DMG MORI. Graduates with master or doctoral degree join with more experience. We set the entry-level salary of a graduate with doctoral degree much higher to show our recognition for their degree. However, we cannot rest assured that this salary raise will be enough in Japan. In case of further yen depreciation, this salary system may require another review to keep it globally competitive. We will work hard to make our business profitable enough to support our competitive salary system. HR investment. Salary revision globally. During the COVID-19 pandemic, we had to cut our salaries to overcome the challenges. However, the good news was that we could improve our productivity during that time. We learned from Germany how to be more productive. We invested in digitization. We eliminated unnecessary procedures.
We made a lot of small improvements, and now we are more productive and deliver more added values. We wondered in 2021, our profit recovered, but why our salary remains low? This was because our old salary system rewarded employees for overtime work. We launched a new salary system in July 2022. The annual salary of our Japanese employees in 2023 will be approximately JPY 9 million. At the bottom of the slide, you can see what is included in the salary. Some allowances and fringe benefits are not included. The average age of our employees in Japan is 40 years old, which is the basis for the annual incomes displayed in the graph. This slide shows the average salary and profit margin development at DMG MORI China.
I strongly believe that by 2030, the users of high accuracy, high-end machine tools with automation and 5-axis will have the same requirements regardless of their location. A machine tool requires stable power supply. For production, the to-be-machined material must be delivered according to schedule with a reliable logistics network. The finished products must be transported and shipped from airports or harbors. Those who perform the machining, the operators, must have high programming skills and knowledge of measuring deviations and statistics. The production requires daily supply of cutting tool inserts. The location must meet a lot of requirements to properly utilize machine tools. Of our customers, many are based in G20 member states.
Even in less developed regions, you find factories that are very well managed and advanced, may it be in certain parts of Asia or China. Therefore, the salary level of people working in such factories should be almost the same by 2030. Being able to shift production to regions with cheap labor cost will no longer be possible. The times are changing. As you see in the graph, the black line shows that the average annual income at DMG MORI China has been increasing a lot, and the employees stay with us as a result. Today, the average machine sales unit price in China is approximately JPY 40 million, while in Japan it's only JPY 35 million. China has become higher. In the past, DMG MORI China sold much cheaper products.
We encouraged DMG MORI China to focus more on profitability so that the company can pay higher salary to the Chinese employees. Now, DMG MORI China's EBIT margin is 6% or 7%, and we, the company, pay higher salaries to reward these efforts. We will roll out the same policy to other countries too. By doing so, a DMG MORI employee should be able to earn the same level of salary regardless of their working locations, whether it's Japan, Germany, or the USA. Of course, we need to take the difference of living cost in each country into consideration, especially when you work in a high-cost country like the United States. I believe that we will have a global salary system established in the future, maybe not fully by 2025, but in the long term by 2030. Healthy work environment.
We would like to maintain the total working hours at around 2,000 hours. As for paid leave days, employees may not be able to use more than 20 days per year because the business is very busy right now. Still, our goal is to come close to 20 days as much as possible. Gender diversity initiatives. The key message here is that average annual income by gender is almost the same. There is no difference in the salary table between male and female employees. We never had a separate salary table between men and women, not at any time after our foundation. We encourage women to continue with their careers after childcare leave. We will continuously improve our internal systems to support women at work. The next challenge after gender equality will be elderly care.
This means that our employees will have to take care of their parents, and so on. They come from all over Japan to join DMG MORI. How can we support them when they have to take care of elderly family members away from their locations? This will be the next important topic. Efforts for carbon neutrality. Looking at other companies' commitments toward carbon neutrality, you may wonder who certified this. DMG MORI makes it very clear. We follow European standards, the SBT, Science Based Targets. You can find all the details on this slide and in our integrated report. Thanks to our company structure, we can easily access information from Europe and have our efforts for carbon neutrality audited by a third party. New director candidates. With approval by the Annual General Meeting of Shareholders on March 28, we'd like to appoint three new directors.
First, an internal candidate Ms. Irene Bader from Austria. She is our Senior Executive Officer for Global Corporate Communication. She usually works in our office in Munich, Germany, and she is a business expert with an international mindset. We have two external candidates. Mr. Mamoru Mitsuishi, Professor Emeritus at the University of Tokyo, Faculty of Engineering. Ms. Eriko Kawai, Professor Emeritus at Kyoto University, Faculty of Letters. The three new directors will make our board even more diverse. The ratio of external directors to total directors and corporate auditors will be 47%, and the ratio of female directors and non-Japanese directors will be 20%. This is the end of my presentation. In 2023, we will continue our efforts to achieve the targets we disclosed today. Thank you very much.