Ladies and gentlemen, good afternoon. A warm welcome from Vienna to our conference call on the full year 2022 results. I am pleased to introduce our CEO, Klemens Haselsteiner, who will guide you through the presentation, summarizing the key facts and figures of the year 2022, as well as providing you with an outlook on 2023. After the presentation, we are happy to answer any questions you might have. With that, I hand over to Mr. Haselsteiner.
Yes, welcome, ladies and gentlemen. It's a pleasure to welcome you in my new role as CEO, also on behalf of my colleagues on the management board, to this conference call to the year-end results of STRABAG SE. Before looking back on the past year, I would like to take a brief look ahead. Our planet, our society, and the construction industry are facing major challenges. The good news is that thanks to many important decisions we have taken in the past, STRABAG is well equipped for the future and on a promising track in terms of digitalization, sustainability, and innovation. However, we will not rest on past successes. That's why we set out our new mission with Work On Progress last autumn. We aim for climate neutrality along the entire value chain until 2040, which is perhaps the most ambitious goal we have ever set ourselves.
There is no alternative. There is a lot to do, we are confident to achieve our big goal. Back to the present, to the year 2022. On slide six, you can see that STRABAG was able to achieve the second-best result in its history, despite a highly challenging environment. Both output volume and order backlog reached a new record high at year-end, especially the comfortable order backlog of EUR 23.7 billion provides a sound basis for 2023. In terms of EBIT margin, we saw a normalization after an exceptional high level of 2021. However, the reported EBIT margin of 4.2% is well in line with our target to achieve at least 4% from 2022 onwards.
Overall, we generated a solid earning per share of EUR 4.6, we will propose a stable dividend per share of EUR 2 per share for 2022, resulting in an increased payout ratio of 43%. Let's move on to slide seven. Let me provide you with a brief overview on the main challenges in 2022. We faced significant cost increases in energy, materials, and personnel. As we were also exposed to substantial cost hikes in the past, we have already started in 2018 to gradually move away from lump sum contracts in the private sector. Thanks to our long-term procurement strategy and our own production of construction materials, we managed to cushion these developments quite well in 2022. Due to the interest rate turnaround, we have already seen a shift in our order backlog towards some more public projects.
What has always distinguished STRABAG is, in my opinion, a diversified business model that is able to balance out fluctuations across economic cycles. For example, more than 60% of our customers are in the public sector, and we have a strong market position in the infrastructure sector, which generally has a stabilizing effect. As you might be aware, STRABAG is currently in the process of winding up all activities in Russia, which we expect to be completed by the end of 2023. In any case, the share of Russia in the group's output was negligible at 0.3%. Let's move on to slide 8. I would like to briefly remind me of our strategy of vertical integration, which we have been applying for years and which is paying off, especially in challenging times like these.
Just to give you one example, with our more than 270 asphalt mixing plants, we covered roughly 90% of our asphalt needs in 2022, which can already be seen as an optimal degree of self-sufficiency. Our own construction materials network does not only act as a hedge against price fluctuations. In time of constrained supply chains, we were also able to deliver the required materials, carry out our project as planned, and therefore being a reliable partner for our customers. In any case, increasing self-sufficiency remains a key strategic goal for STRABAG. Let's move on to slide nine. With our 79,000 employees, we carried out work on more than 12,000 construction sites in 2022. On this slide, you can find an overview of important order intakes in 2022.
I will then go into more details on some of these projects in the operational review section of this presentation. I would like to conclude the highlights by taking a look at our sustainability management on slide 10. As mentioned earlier, we have set ourselves ambitious sustainability targets. On the left-hand side, you can see that we have divided our path to zero emissions into five sub targets to be achieved in five-year intervals, making it more transparent for you to track our progress in this regard. Sustainability is on the top of the agenda at STRABAG and firmly integrated in the organization and overall corporate strategy.
To push our sustainability agenda forward, we set up a corporate-wide four-tier governance structure, which creates not only a clear organizational framework, but also ensures efficient communication and decision-making processes, and involves representatives from different areas of competence in order to achieve our strategic goals. On the right-hand side of the slide, you can see our ESG rating. Important to note here is that STRABAG participated for the first time actively in these assessments. Still, we have already been able to achieve decent results, like a B- from CDP. Of course, the goal for the future is set. We strive for continuous improvement of our ESG ratings. On slide 12, I begin my financial review of 2022. We recorded a 10% higher output volume of EUR 17.7 billion in 2022.
Thereby, we were able to clearly exceed the previous record level of EUR 16.6 billion set in 2019. I am pleased to report that the increase in output was achieved across all operating segments. The largest increase in absolute terms was recorded in our home market of Germany, followed by Austria and the United Kingdom, where we are currently completing the two largest projects in our order books, as well as the Czech Republic. Despite rising construction costs and the interest rate turnaround, the order backlog increased by 6% year on year to EUR 23.7 billion, reaching a new record level at year-end. Projects were successfully acquired in our home markets of Germany and Austria in particular, but also in Romania, Italy, and Croatia. Major new projects in these markets can be found in the highlight section of this presentation.
Declines in the order backlog were seen in Bulgaria, Denmark, and the Middle East. Ladies and gentlemen, on slide 13, you can see one of the key strengths of STRABAG, sustainable profit growth with reliable dividend. In this sense, I would like to quote our previous CEO, Dr. Thomas Birtel, who always said, "You see that you don't see anything." Which means that STRABAG constantly delivered solid profit growth even in challenging times, as we have already been able to balance out cyclical fluctuations thanks to our broad-based business model. As communicated and expected, we saw a normalization of the EBIT margin in 2023 after an exceptionally high level in 2021, which was due to multiple positive earning effects in all segments. Nevertheless, an EBIT of EUR 706 million means the second highest in the group's history.
The EBIT margin of 4.2% is fully in line with our goal of achieving at least 4% on a sustainable basis as of 2022. Although net income is lower in absolute terms than the previous year, we will propose a stable dividend of EUR 2 per share for 2022 to the annual general meeting, corresponding to a very solid payout ratio of 43%. Let's move on to slide 14. The net interest income was positive at EUR 10.7 million compared to - EUR 12.6 million in the previous year, which is mainly due to increased interest income. The income tax rate at 33% was slightly higher than the previous year. Earnings owed to minority shareholders amounted to EUR 7.7 million after EUR 10.7 million in 2021.
Net income after minorities was 19.3% lower in 2022 after exceptionally positive earnings effects in the previous year. However, at EUR 472 million, we were able to achieve the second highest figure in the history of STRABAG SE. The earnings per share amounted to a very solid level of EUR 4.6. In the previous year, this was EUR 5.71. On slide 15, I want to briefly highlight our solid balance sheet. Overall, total asset and liabilities increased year-on-end from EUR 12.2 billion to EUR 12.7 billion. As usual, a net cash position was reported at year-end 2022, which remains stable versus 2021 at EUR 1.9 billion. Lower cash and cash equivalents were offset by a reduction in financial liabilities.
This is due to the bond repayment in the amount of EUR 200 million. The equity declined slightly, although it remained above the EUR 4 billion mark, corresponding to a very healthy equity ratio of 31.70%, significantly above our minimum target of 25%. The decrease results in particular from the buyback obligation for our own shares in connection with the mandatory offer, which had to be deducted in the maximum possible amount directly from direct, retained earnings at year-end 2022. As ultimately a lower number of shares were acquired, EUR 291 million will be retransferred to retained earnings in 2023. The rating agency Standard & Poor's also assesses STRABAG's financial strength very positively. Therefore, our solid BBB investment grade rating with stable outlook was again confirmed in August last year.
To conclude my financial review, I would like to draw your attention to STRABAG's cash position on slide 17, which was again very high at EUR 2.7 billion at year-end 2022. The cash flow from operating activities decreased year on end as a result of lower cash flow from earnings and a notable increase in working capital from EUR 1.2 billion- EUR 0.8 billion. Due to rising interest rates, a significant reduction in advanced payments and an associated increase in working capital, which had already started in 2022, can be expected in the coming reporting periods. As expected, the cash flow from investing activities was more negative, in particular, due to higher investments in intangible assets and property, plant and equipment, including the expansion of our Stuttgart location.
The cash flow from financing activities came to minus EUR 504 million, compared with - EUR 744 million in 2021. The reduction in the dividend payment following a special dividend in the previous year, more than compensated for the repayment of the bond in the amount of EUR 200 million. With slide 18, I would like to begin my operational review of 2022. Here you can find a short overview on our three operating segments. The North + West segment carries out construction work of nearly any kind and size with a focus on Germany, the Benelux countries, and Scandinavia. Ground engineering can also be found in this segment. In 2023, the segment was expanded by Switzerland, previous reported in the South + East segment.
The geographic focus of the South + East segment is on Austria, the Czech Republic, Slovakia, Hungary, and Southeast Europe. The environmental technology activities are also handled within this segment. In 2023, the segment was expanded by Poland, previously reported in North + West segment. The International + Special Divisions segment includes the tunneling activities as well as the concession business. The construction material activities, with the exception of asphalt, are also part of this segment. The real estate business, ranging from project development and planning to construction, operation, and also property and facility services, completes the wide range of services in this segment. Additionally, most of the other services in non-European markets also reported here. Let us move on to slide 20, and let's take a closer look, starting with our largest segment, North + West, on slide 18.
Here we recorded a 10% year-on-year increase in output volume to EUR 8.7 billion in 2022. This was mainly achieved in our home market of Germany, both in building construction and civil engineering, and in transportation infrastructure. Declines were recorded in Poland, the Benelux countries and Denmark. Looking at the EBIT, we have seen a growth of 11% to EUR 493 million, maintaining the very good EBIT margin of 6.1%. Earning improvements were generated in the German building construction and civil engineering business, among others. The already high order backlog was expanded by 2% to EUR 11.8 billion at the end of 2022, mainly due to growth in Germany.
Notable additions to the order backlog in Germany includes the construction of the corporate headquarter of Volksbank Raiffeisenbank Bayern Mitte in Ingolstadt, and the expansion of Berlin-Köpenick Rail Station. An increase in the order backlog was also recorded in Poland. Here, we will continue to upgrade the S19 motorway in two sections. Coming to our South + East segment on page 19. Output volume in this segment increased significantly by 11% to EUR 5.5 billion in 2022. The largest increase in absolute terms was generated in our home market of Austria, followed by the Czech Republic and Croatia. With a few exceptions, including Bulgaria, the remaining countries of CEE also recorded increases in output.
Due to provisions as a result of strong cost inflation in Southern and Eastern Europe, the EBIT decreased to EUR 153 million compared to EUR 195 million in 2021. A strong growth of 13% to EUR 6.3 billion can be seen in the order backlog. The largest order intakes were generated in Romania, Austria, and Croatia. These include the expansion of the Romanian A3 motorway, the construction of the sustainable residential project Grünblick, with 340 apartments here in Vienna, and the modernization of the rail line between Zagreb and Rijeka in Croatia. With the exception of Bulgaria and Serbia, the order backlog also increased in the other markets. The order volume in Switzerland remained virtually stable, while that in Russia decreased significantly as a result of our ongoing exit from this market.
Slide 21 shows our International + Special Divisions segment that generated an output volume of EUR 3.4 billion in 2022, 9% higher than the previous year. This is mainly due to the ongoing fulfillment of large orders in the United Kingdom, Chile, and the Middle East. Due to large and mega projects, the segment is regularly exposed to fluctuations, as you might recall. In this respect, the diversification of the facility management portfolio and the infrastructure development business, among other things, made a positive contribution to earnings, although it could not compensate for adverse effects in the volatile international project business.
Accordingly, after an extraordinarily high increase in the previous year, there was now a reduction in EBIT to EUR 92 million, so that the EBIT margin declined from 9%- 2.6%. Last but not least, the order backlog increased by 5% to EUR 5.6 billion as year-end 2022. Italy contributed mainly to the growth of the order situation thanks to contracts won in the transportation, infrastructure and in road maintenance. In addition, the construction of 140 wind farm foundations in Chile opened up a new business segment. In contrast, a notable decline was registered in the Middle East. With that, I conclude my review on 2022. I would like to move on to slide 23.
As you know, at STRABAG we do not only speak clearly about our position on the Russian invasion of Ukraine, but also about our shareholder structure. After the outbreak of the war, we quickly and decisively took far-reaching measures to strictly prevent any possible, even indirect influence on STRABAG by Oleg Deripaska, who controls the shareholder Rasperia. As you might know, an asset freeze was imposed by the EU on Rasperia. Oleg Deripaska and Rasperia have no voting rights, no right to information, no right to participate, no rights to propose solution, and very importantly, no dividends are to be paid out to Rasperia. By law, Rasperia's asset freeze triggered a restriction of the voting rights of the Austrian core shareholders, the Haselsteiner family and UNIQA Raiffeisen, which could only be lifted by making a mandatory offer.
Under this mandatory offer, shares amounting to 2.7% of the share capital were tendered for sale, which were acquired by STRABAG and we now hold as treasury shares. In any case, a further reduction of the free float was not intended with this mandatory offer. Finally, we would like to provide you with an outlook for 2023 on slide 24. Times will remain volatile and the overall conditions will stay challenging. It is true that the turnaround in interest rates is having a negative impact on the construction business. However, we are coming out of an unusual zero interest rate policy phase and a related boom in construction. I would describe the development of the construction industry as a normalization rather than a crisis. We therefore do not foresee any major setbacks in 2023.
We expect to be able to maintain the output volume at a high level. Specifically, we expect EUR 17.9 billion and therefore a slight increase. All three operating segments should make a solid contribution to this amount. We assume that the trend towards shifting our order book towards more public projects will continue. Especially in times when individual construction segments experience declines, our proven strategy of diversification is paying off. We therefore expect to be able to generate an EBIT margin of at least 4% also in 2023, and to sustain this level in the long- term. Ladies and gentlemen, this concludes my presentation. We are now open for your questions. Thank you very much.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, then you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question comes from the line of Michael Marschallinger with Erste Group. Please go ahead.
Yes, good afternoon. Congrats to the good results, and thanks for taking my question. I have two. The first one, a bit more general. You took over as CEO, as I mentioned at the beginning of the year. And I would like to ask you, where do you see at the moment the biggest challenge for your company right now? And the second question would be on the guidance. Basically, you confirmed the output guidance you gave in February. However, you added some more cautious wording in my view that the situation remains turbulent, that you're seeing in some segments some declines.
Has something changed now in this, in this two months that, you're becoming more cautious? Do you see something in your order intake or start getting projects delayed at the moment? Yeah, this would be great if you could give us more, more color here.
Well, thank you for your questions. On your first question, I would say the biggest challenge we have to manage is personnel. War on talents is the term that also I hear every day. We actually managed to increase our workforce in our core markets by a decent amount last year, which we are very happy about, but this remains the main limit for growth. Personnel, be it blue collar or white collar is remains the main issue for us. To your second question, I would sum it up as I did in the presentation. The circumstance in the construction industry became more challenging.
We are confident that we will nevertheless be able to follow our guidance and provide our solid results in the future and also a solid dividend. Nothing has changed besides the circumstances which we are very confident that we will improve, be able to manage as we have done in the past.
Okay. Just a follow-up, because you mentioned that dividend, so you can also mention, this payout ratio for T3 also going, forward.
Our goal is to at least to have a dividend between 30% and 50% of earnings, and we will keep this guidance in the future.
Okay. Okay. Okay. Thank you very much.
Thank you.
The next question comes from the line of Patrick Steiner with Kepler Cheuvreux. Please go ahead.
Good afternoon, Patrick Steiner from Kepler Cheuvreux. Thanks for taking my questions. I always have two. The first one is, in the presentation, you mentioned that the strong cost inflation in the South + East segment impacted EBIT margin development negatively. Can you elaborate a bit further on that? The second question will be what will be the impact of higher interest rates and net working capital going forward in terms of customer prepayments? Thank you.
As I already mentioned, we started to change our approach after 2018 and tried to find new contract models with price escalation clauses. This was quite successful, but especially in some markets in South in Southeast Europe, we did not manage to have all the contracts. That was an impact that we still had some fixed price contracts in that in that segment. The second is in difference to Germany and Austria, where we have a quite stable labor contracts and labor costs with negotiation.
This is not the case in some of our southeastern markets where it was necessary to increase our personnel costs in order to avoid losing our people there. That was the one thing. Well, your second question, the increased interest rates results in. In the past, we have been, as our CFO also says, we have been used as a bank with negative interest rates or zero interest rates. Our clients were happy to park the money with us, and we have seen a decrease in that, which doesn't worry us, but it's still something that we have to be careful about and which will be monitored.
Okay, perfect. Thank You very much. Very clearly.
Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone. Once again, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I hand back to Marco Reiter for any closing comments.
Ladies and gentlemen, thank you for your time and dialing in today. The next earnings release will be on the 31st of May, where we will publish our trading statement for the first quarter of 2023. For today, we wish you a nice remaining afternoon. Goodbye.