Good morning, ladies and gentlemen, and hello. It is 11:00 A.M., so we shall start our presentation discussing the consolidated results of Grupa Kęty SA for Q3 2023. The presentation will be kicked off by the Chairman of the Board, Dariusz Mańko, and the individual segments will be discussed by the individual directors responsible for them. In conclusion, we shall pass to the financials and then answer your questions. Mr. Chairman, the floor is yours.
Good morning, and welcome to another meeting about the results for Q3 2023. We are glad to present these results. Since we were quite anxious about this year, and when we were drafting the budget, we were accompanied by some very negative emotions.
However, it turns out that another quarter, the third quarter of this year, has not brought a collapse in sales, as we would have potentially expected, despite the negative signals coming from the European markets and from the Polish market. Especially from the German market, if you are talking about the rest of Europe, we have been able to cope. And I will tell you a bit about where I see this success, which, w ell, we can say in these conditions that the third quarter has been a success. But from what we present to you, results at the demand level is below expectations. There is a huge pressure on margins.
However, the positive aspects include a decrease in the price of raw materials, and this is a significant aspect which we can examine in some more detail, because this is a situation which is, by all means, favorable for the aluminum systems segment. Our products are simply much cheaper. Obviously, also for the Extruded Products segment, this is favorable because we can eliminate or at least be competitive in a decent way against the substitutes for aluminum. Good things are going on at the company. No problems when it comes to investments. The biggest tasks, namely the new production shop, the paint shop in Złotów and the new press, 4,000-ton press, is going on as planned.
We don't have any shifts here, no slip-ups, no problems, and we are hoping that these two investments will support us in the achievement of the assumed results for the coming year. 80% utilization of capacities is still very good, ladies and gentlemen. We were afraid when we were budgeting that we would have to actually decrease the capacities utilized, especially in the Flexible Packaging segment and the Extruded Products segment. So this is a positive surprise for us, but it, this doesn't come out of nowhere. And definitely, strong sales organization in the individual segments has definitely given us this advantage, namely, that we can search for orders and find them where others can't. We are also capable of adopting some non-conventional measures.
So the presses are actually working and the capacity is utilized, and every month, virtually, ends with you know, a positive result. First, we fear, there is a fear and trembling whether the capacities will be utilized. However, at the end of the day or the end of the month, we kind of push it, to say colloquially. You know, we kind of squeeze it in and and we utilize these capacities, and we manage to sell good quantities in the individual segments, which, which then translates into a good result. But this is with a bit of pain, actually, with with a bit of stress.
We struggle every month, initially, and it can be tiring, because in the last two years, that was more about diplomatically refusing to some customers or about diplomatically reducing the production allocations to the customers because the orders were so big that they would exceed our production capacity. So the situation has, as you see, reversed in just a dozen months or so. It has actually made a 180-degree turn, so this mobilization costs us more efforts than before, than ever before in history. And this struggle in sales, these achieved successes in the area of commerce and production, because we have to admit that we have made many minor innovative changes. However, still, we saw to some costs in the utilities consumption area, for instance.
The savings versus the budget in the Extruded Products segment. So these in-house actions, these in-house measures, actually translated into excellent EBITDA of PLN 257 million and a net profit of PLN 170 million. So this is an amazing result, especially under these market conditions. And we are actually fighting for Q4, and to keep going to close this year, as well as possible. However, we can't say, as we sit here today, we can't tell you, "Okay, let's have some coffee because the year is over and done." Obviously, we've raised the forecast, but this will be a fight until the very end, until the thirty-first of December, to implement the forecast, to deliver on the forecast we actually signed.
Among the events that took place, well, payment of PLN 20 of dividend per share. Another tranche, I would like to remind you that it will be paid in November. Well, I will pass to the increased outlook, the increased guidance for results. Obviously, with meeting our press, we are actually, we have to admit we're couple, you know, we have to change this as a result of 2023. We have to, we have to increase this budgeted result. I will remind you, I will keep reminding you today that the budgets are actually done on a bottom-up basis. Nobody is forcing anyone to do anything in terms of budgeting in this company.
The model we developed is that all the individual divisions and departments present their ideas, their capacities for action, for production, controlling, finance, then translate this into Polish zlotys. And so department by department, segment by segment, division by division, we gather it all together here at the head office. And at the end of the day, Rafał Warpechowski comes to me and says, "This is the amount we're talking about." So obviously, this is usually less than we expect or less than the market expects. The market is always optimistic in its outlook. But the sentiments in October and November for the 2023 budget were really tragic.
You know, if we're talking about the meetings which came later, they are usually supposed to motivate, and they are supposed to, w ell, not create, let's not use this, this bad word when it comes to budgeting, but it kind of forces people to be creative, maybe to, kind of, manage to squeeze something out, of the budget. Well, those were arguably that was the most difficult year in terms of budgeting, one of the most difficult years. Because earlier, but that's, you know, a long time ago. Earlier, it used to be even more difficult. However, over the last five or six years, this was the most difficult budget to draft at this company. Because usually we would need, two or three meetings at the level of, the, segment heads to, well, in a nutshell, negotiate, a better budget internally and better guidance for next year.
In this case, in the case of the 2023 budget, the meetings were numerous, and we didn't really move forward because the arguments were very strong from the sales point of view. And we were really expecting the market to collapse, and that was the outlook in November last year. But of course, the guidance is different, and it might, you know, nobody should really care, because that's our job, right? This isn't anyone's business but ours. And we are there to guarantee that the forecasts and budgets are prepared in such a way as to fit the actual reality in the following year. So, in my history of work with this company, usually the actual figures were in line with the forecast, or they exceeded them slightly.
This year, we actually exceeded them more than slightly, and this is, well, this is our error in the forecast, and we have to, well, admit it, to put it bluntly. We perhaps could have done more. But where does it come from? Well, the EBITDA versus the forecast for 27th of July , where we actually increased the results. We are increasing by 7%, the EBITDA to PLN 870 million, a nd so 7% increase. So this is based on several elements. In the Flexible Packaging segment, there is a struggle, struggle and struggle, and the budget will be implemented in accordance, in line with the expectation, maybe slightly exceeded. In the Extruded Products segment, we were expecting a worse Q1. It turned out better than expected. And what can I say?
Well, definitely the decreasing prices of aluminum, the decreasing prices of billets, and this actually has been helping the Extruded Products segment. And so this is hard work of the sales department, dragging these orders, extracting them immediately. Basically, gave the segment on top of this area of employment and definitely utilities, and that was the biggest savings level in that area. And this is an advantage for the Extruded Products segment, the exceeding of the budget. The biggest surplus in the aluminum segment, the aluminum systems segment, but this is based on many aspects, and this is actually the hinterland, the works. You know, I'm not going to talk to you about that. These are certain actions within this segment of systems.
Apart from natural ones, seeking the largest possible number of orders and work within the company to reduce costs. Apart from that, particularly important is something we need to bear in mind. Certain mechanisms were in operation, and I will repeat this. I'm not going to elaborate on that. This is, you know, this is the works. This is our internal mechanism. I actually felt that when I was President of Aluprof. They are perennial, actually, they are always there. And I will tell you about two phenomena, however. The Polish market, it would have seemed that the aluminum segment increased its share in this market. How to explain it, and what to try to? Well, the market shrank.
The construction market is indeed weak, and maybe it's I might just suspect it is the case. It's a question of a strong brand, a strong company, a strong financial partner. Above all, a financial partner that in a way looks after these customers. First seeks to win them over and then looks after them. It's good to be with Aluprof for customers, it seems. At this day and age, when they struggle for orders, they have few orders, sometimes there are fluctuations in the financial area. And here, a strong partner is a great advantage, hence the expansion of the customer base. This poor situation in the construction industry worked well for Aluprof. And another thing, in our opinion, is the matter of export. The German market, for instance, let's use this example, are very hermetic.
Launching entering with products onto those markets is hard, and manufacturers of plastic materials, plastic windows, manage to attack Europe quite strongly. Poland, obviously, is a strong producer of plastic windows. While aluminum, well, we are still not a big hegemony when it comes to Europe, and we are actually, we are actually not a major player there. We are only entering this segment. And another thing, when there is a marketing crisis, where there is a tough market, there's another aspect. Customers who are actually well embedded in Western Europe. When the market is weak and something bad is happening, they are quite willing to look at different products.
They are willing to meet with suppliers from other countries, not only the countries they were used to, and they are open to talks and negotiations. So this, in the case of conversation with our customers, has found confirmation, namely, that maybe the market is weaker, but talks and the possibility of supplying products from Poland, aluminum products from Poland, it's easier than before. And this is as to where it comes from, because it doesn't come from the fact that Aluprof has been selling so much, because it's selling on the Polish market, where all data speak to the weakness of the construction industry. Nothing big has happened.
So in brief, you know, our customers, they actually export these products mainly to Western Europe, and they go to Western Europe because Western Europe is more open to talks and it's seeking cheaper suppliers. It's seeking alternatives to make sure that they will survive in these tough conditions. I don't have to tell you who's following us and who's actually participating in our conferences and knows the group. You know, this market is merely a drop in the ocean. It might seem to us that we are a big country, but look at the Netherlands, look at Belgium, and we have huge consumption of aluminum. It seems incredible when you compare it to the number of inhabitants and number of people living there.
Aluminum continues to be a metal of the future, to put it briefly, and we still have a lot to do in Europe, and we will definitely continue on this journey.
Directly and indirectly via our customers. One more word of comment, since I've got the microphone. When we were publishing, announcing that starting on first of January, Roman Przybylski will start working as the Vice President of the Board, responsible for the development of Kęty Group and investments, in other words, growth and development in general. Just to justify it and just explain the situation, why this decision? Well, we are ahead of a new strategy for another five-year period, and therefore, this. We should have it in autumn next year, when Mr. Roman joins us. He will be involved in preparing it, and in order to be involved in it, he needs to work in a company for some time to learn about its specificity and about its operation.
But already today, I may say that one of the main points of this strategy, this is a public conference, so everybody gets the information simultaneously. We are definitely ahead of growth via acquisitions. The company cannot escape this move. The company is so big that several billion of revenue, EBITDA at the level of PLN 1 billion. This allows us, or authorizes us, to make a bolder decision. Why am I talking about that? Well, this organic growth, when we have, when our company is so large, this will not change a lot. Every additional press, printer, paint shop, it won't change too much at this scale of investment. Even, this might even go unnoticed, so the company will not be growing. I'm dreaming of Kęty that is twice as big as it is now, with strong hubs in other European countries.
I'm speaking about Europe, because mentally and culturally, we're closest to European countries, so I think we can count on less error than in other countries that are culturally distant. And this well, thought over strategy of attacking European markets by building a base, and to build a base in specific countries, we probably need to buy, to acquire another entity. And these should be our, our goals, that in six years' time, we can say to ourselves, "Yes, we have this and that percentage of the market in Belgium, in France, in Germany, and Spain, in Great Britain, in the Balkans. We've got our foot is already there. We are present there. We are a player on that, those markets." Investment errors, well, we won't probably count them, those made by Polish companies investing abroad.
You know me well, and you know that I don't make abrupt decisions. We will definitely think them over, and we'll build teams that will be able to handle such a capital investment. If we proceed with this investment, I hope that Roman Przybylski, who will be joining us shortly, will be able to build such a team, so that in case anything goes wrong after such an acquisition process, if there's any conflict with the management of the other company, that's probably that actually condemns all the investments of that. I mean, this lack of understanding with the other management, there's no team spirit. Everybody wants to go their way. That's when such investments go wrong. Lastly, the return on investment is very prolonged, or it's simply canceled, the whole process.
So we need such a team. We need to build a team that, in case anything happens, will be able to go in that company and set things up in accordance with the Kęty Group organization, but then so that all the puzzles go together, because this will be a responsibility upon us, spending all the funds of the shareholders for such an investment. It's a responsibility. We need to make sure that we double our forces in making, in doing all things right, and we want that to be effective, so it cannot be prolonged. This assimilation has to be quick. Therefore, we're strengthening the Management Board. That's why we're having Mr. Roman Przybylski coming and joining us, who is experienced in commercial activities and acquisitions in the previous company where he worked.
So I think he'll be able to cope with it, and so we'll be able to think about building strong Kęty Group in Europe. Thank you very much. I'm now giving the floor to Michał.
Thank you very much. Thank you for this, introduction, comprehensive introduction. Before we move on to the next part, let me remind you that the presentation is announced in the investor relations, shareholding structure on the website. I know that some of you are interested in having to look at it. Not everybody is aware of where to find it, but you can find it on our website. Let's move on to the operating activity of segments. Piotr Wysocki, please. Extruded Products segment. Piotr, the floor is yours.
Good morning, ladies and gentlemen. As you said, Michał, we'll be, as usual, starting from the aluminum curve.
You see this rebound, the level of 2,000-2,200. It's a good, acceptable level, acceptable to the whole market. There's no fluctuations here in terms of supply. There was a peak, there was some panic. We did not know where it would go, but we are at this level. The second diagram shows the drop in the billet premium. A year ago, we were at the level of 1,100, now we're at 30% of that value, which proves that the market is weak, and the producers, there's oversupply of billets on the market. And a year or two years ago, it was a huge challenge for the billets, well, to find them, to find enough billets on the market, the amount that we needed. Now, PMI index for Poland remains low. In Germany, that's below 40 points.
In Austria, that's the same. If you have a look at sales of our competition in Germany, extruded profiles, in all the extrusion companies in Germany, year-to-year sales are lower by 12%. Now, moving on to the results of the Extruded Products segment. Michał, please. Thank you. We can see that there's, it's less by 18%, but let's not worry about that. It's not about volume, because in sales, we are, the exchange that we function at causes lower value of sales. But tonnage, that's a ton sold, that's the unit that we refer to. So and here, you find an improvement. Let me mention the diversification between domestic and international sales, because for now, we were pulled forward by international sales.
You could see it in accumulated results for the 3 first quarters. Now, domestically, it was, like, 20%. Now, look at 20%. Like, September, it collapsed internationally, and the country is at a moderate low towards higher level. This diversification allows us to, when we don't, when we don't do fine in international sales, we have domestic sales, and vice versa. Austria is dropping. There's a huge, one large contract there. We have exports to Slovenia, to Austria, and these contracts result in a growth year to year, but that's the construction of Fisker electric car. That's the, the off-taker, which causes a, 2% increase on the Austrian market. Could you please change the slide, Michał? Thank you.
Utilization of the capacity, 83%, which is a good projection, because when the market wakes up and we finish the investments that are ongoing, we're estimating our capacity to be 110,000 tons, 125,000 or 130,000 tons with the extra press we're planning to add. So we'll have this potential on the market, and I hope that the market will wake up soon, and we'll start working really intensely. Looking at Ukraine, we're talking about a. It's a fact that the company is in a country with war operations. It's difficult to find. It's difficult to project results for a company that is in a war zone.
But we're projecting- s ince we've got good results, this company contributes to it. It does operate under these war conditions. They have totally different problems than those we have here, like the market prices, competition. There, we also need to fight with the internal situation of the warfare state. A few words about the other production company, EMMI, in Slovenia, very stable. I say that the contract, that is really important for us, I mentioned that already. That's production for the Fisker electric car. So today, it's 200-250 cars per day, I mean, pieces per day. The project is speeding up. We've got more nominations to other projects by showing that we are able to do such things. As for investments, the 2,000 press is speeding up. It's getting into its operation rhythm.
It's not like we turn it on and it starts being fully operational. It has needs some time, but it's going in the right direction. 4,040, that's we planned delivery by the end of the year. But here, you can see the core, the main part, the main body, and we are getting new elements. We're assembling it. It's delivery plus assembly. We're starting to assemble the device, and I think at the beginning of next year, we'll start productions. And I think this is it. No fireworks in the Extruded Products segment in the last quarter.
Okay, so we should pass to the aluminum system segment now. Mr. Tomasz Grela.
Ladies and gentlemen, good morning. I'm glad to present the results for Q3 in the aluminum systems segment, especially since these are historic results. These are record results. A couple of words about the market environment in which we managed to achieve them. A couple of words have been said by the chairman here. According to industry analyses, the whole sector, windows and doors, recorded a 30% decrease after the first half of the year. The result for the whole year will be around -15% y ear- on- year, will be an excellent result, actually, the estimated one. In the facades segment, 19% decrease year-on-year. -16% is the year-on-year estimate in terms of aluminum facades for the whole year.
This is the market environment in which we have managed to achieve record results, as I've mentioned just now, in terms of sales and profit and operating profit, as well as the net profit. What happened over the last quarter and what we would like to boast about? Well, definitely the process that started many years ago is related to the dissemination of our fireproof products in the European market, and this is, well, coming to an end. This is nearing completion. Nearly every country which, according to our analyses, required these certificates, has been certified, and we have individual national certifications in every European country, basically.
This is important since, as you know, this year, starting this year, in export markets, you can sell a system but also fire-resistant glass, which we have been producing this year in our plant. So, actually, we see quite a lot of motion when it comes to production of a new facility, especially the new Green Deal, when the new Green Deal is concerned, so environmentally friendly solutions. We have been showing this to you gradually over the years at subsequent conferences. We have been showing the direction in which our company is developing in terms of the products, and these products for many years have been focused on energy savings, and not only savings, not only of energy, and this is confirmed by many green certificates in Poland and abroad.
It seems that today, as of today, Aluprof and the systems we offer are ready for such projects in the future, too. Now, a couple of words about our sales. Our sales volumes, PLN 640 million, nearly PLN 640 million. This is the figure in PLN 640 million in Q3. This is still less than last year after three quarters, obviously, but this seems, according to our, t his is more, actually, than last year, sorry, but this is the change of 8%. So we have managed to actually recover some of the market we're working on. So this is an increase in Poland and abroad, even though this increase abroad, as you see, is lower than the increase in Poland.
But, taking into account the worse situation in the export market, especially in the German market, it seems that our company has achieved a very satisfactory result in this respect. What's the outlook until the end of the year? Well, until the end of the year, we would like to see the sales result of last year, so we still have some catching up to do a bit, but hopefully this will actually Q3 will give us a possibility of approaching this. In terms of EBITDA profit, well, you can see PLN 133 million. This is 70% more than in Q3 of last year. So, here, after three quarters, we have managed to exceed last year's EBITDA, as opposed to the other figures, which for the first three quarters were lower than last year.
So hopefully, we'll be able to end the year with a similar result. Also, it is a surprisingly high margin at EBITDA level, to nearly 21%. The industry is not used to such a high level of EBITDA margin. Where does this come from? Well, in the first place, a volume increase, the lower batch price, lower stock price, and actually some enigmatic aspect. I don't want to talk to you about this. Can we expect a similar level to be maintained until the end of the year? Well, for obvious reasons, December definitely not. But looking from the point of view of the coming month and of October and the assumed sales, we can assume that the sale, the sales in October will be higher than the September sales.
So the margin level should approach this margin of September, which we would like to see very much. As far as the product breakdown is concerned, the structure is very stable indeed, and we can see that the architectural and roller blind systems, this is still a similar level, and we can see that in both segments, we are coping very well indeed in this difficult period. The same goes for the breakdown by country and the export sales. This is also slightly different. This is a difference of just 1%. In our most important markets, we are keeping the status quo. There's no situation in which any of the markets would bring some supernatural, even superaturally high sales, or low sales. It's status quo maintained.
So as far as investments are concerned, well, they already mentioned one major investment related to the construction and the equipping of the production shop in Złotów. And the end of December, we're estimating this as the time of handing over for use of the shop. At the vertical paint shop, works are nearing completion. They have been completed, actually, and hopefully the investment we're expecting to actually be completed before the deadline. And just to conclude, one product-related remark. Well, these products, over the year, we have been releasing very many products, and I could dedicate a separate meeting to a discussion of all these products.
I just want to say at this point that from my point of view, in my position and from the point of view of the sales and marketing people, it seems to us that product-wise, we are ready today to be able, over the next couple of years, to be able to look at the developments in the market calmly and to compete, successfully on the domestic and on the export markets. Just two words about the U.S. market to conclude this part. As you see here, these are pictures of some example facilities being implemented now and historically. Just want to remind you where Aluprof was in the past and where we are now.
Our sales in the U.S. market started 15 years ago, and these sales and our activity have been based on the functioning in the form of a joint venture with our American partner. And there, over a dozen years or so, we have managed to implement large contracts successfully by selling ready-to-use products made in Poland. And for a couple of years now, we've been changing the concept, and now we are functioning independently on the U.S. market. And the change of the concept involves being a system provider, a European system provider in the U.S., selling a premium product. So what we do in Poland and in the rest of Europe.
As you see, we've been successful in this endeavor because these facilities, compared to what we've showed to you in the past, these are done with our U.S. partners, so they actually install these prefabricated systems at sites in the U.S.
Thank you for your attention. Now the Flexible Packaging segment. Rafal, the floor is yours.
Okay, the Flexible Packaging segment, Q3 2023 is over. A good quarter since we recorded increases in sales volume in both segments we cater to on the market compared to Q2 2023.
You see, there's a certain rebound in recovery in terms of the raw materials prices, the raw materials used by both our businesses, and this resulted from a limitation on, supply by PP and PE, granule, manufacturers because they would shut down their production, plants in the recent times. Unfortunately, it's not a result of increased consumption, of increased demand. This still, stays at a limited level. An example, the largest, apart from the Dutch market, is the German market, which has been reporting for some time now, decreases in retail sales of foodstuffs at fixed prices. The last data for July talk about an over 4% decrease, and in August, these decreases accelerated to the level of over 6%. We don't have the data for September yet. What can I say?
We feel affected by these decreases very strongly, especially in the PP film segment. Looking at the market environment, we have to appreciate all the more the results for the last three months. Since actually the increase compared to the previous quarter is by 12% in operating profit, and this was related, obviously, to an increase in volumes, but also it was linked to the achievement of very high margins in both segments of the market we cater to. In the packaging business, these margins at the EBITDA level exceeded 22%, while in the PP film segment, they reached nearly 14%. In September, this margin at Alupol Films exceeded 16%. Let's have the next slide. Thank you.
Now, when we look at these results, they were worse than the results achieved in the same period of last year. However, the effect of an actually overstated base last year that was related to the migration wave, to the situation across our eastern border, and to the low availability of raw materials. I talked about this extensively at the results conference after Q1. So this topic, I'm not going to elaborate on this today. However, what we do observe is a clear erosion in unit price in the packaging segment and in the BOPP foil segment. And this is a result of decreases of the average quarterly prices of raw materials.
We've been seeing this for a year and a half now, but this also results from the change of the structure of sales in our core business, that is Flexible Packaging, which we have been observing for a couple of years. This is actually related to the increase in the pace of changes, changes in, towards, you know, the greener packaging with a lower environmental impact. Let's have the next slide. Well, these new products, which you can see here, well, this is a, an extensive portfolio. Please note that the changes on the packaging market, which used to be implemented only in the food concentrate segment, that is, you know, desserts and, and powdered soups and, and fixes, you know. This basically now extends the whole packaging segment on the market.
We're talking about coffee, tea, animal food, children's nutrition, and also crisps and snacks, and also hygiene products. We have to openly say that we are proud of being at the avant-garde of these pro-environmental changes with our customers. Please note, these are top brands which function on the market, and you definitely meet them on a daily basis while shopping.
Ladies and gentlemen, this noble goal that accompanies the new trends, unfortunately, has its dark side as well in terms of margin levels that we can generate here in for the new projects. Because those new packages, based mainly on PP foil, polyethylene foil or paper, that is easy for recycling, that has less impact on natural environment, they are much less processed than the packaging that our group was famous for. Highly processed, high barrier and high-margin packages that were common on the market. Ladies and gentlemen, like I said, this trend cannot be reversed. We need to be happy to be in this train that is speeding up.
However, we need to know that the value of the chain of added value within the segment has been cut down even more so that new packaging base, based mainly on substrate, that we are obliged to buy from specific suppliers, under specific terms and conditions, and at specific prices, strictly defined prices. And due to their simplicity, there's a lot more competition, because these simple technologies allow them to co-produce those simple structures than before. Next slide, please. Thank you. As for performance of plan, it's according to schedule. The outlays were related mainly to investments that maintain the production potential of the segment. Obviously, increase in volumes translated into an increase in the utilization of our production capacity.
It's been the highest level in the last 12 months, and we've been observing this increase, like I said, at the beginning of this meeting. We've been observing it in the segments of the on the market. This is the optimistic piece of information at the end of my presentation now.
Thank you very much. All right. Now, thank you. Let's move on to financial results. Mr. Rafał Warpechowski will present them. Consolidated financial results.
Good morning, ladies and gentlemen. That's the first quarter this year when compared to the analogous period of the previous year, the results are better. We are happy to see those results at increasing volumes, and the very drop of revenues in terms of value is due solely to the fact that the prices of the main resources dropped.
In petrochemicals, 30% drop year-over-year, aluminum, 20% drop. Increase of EBITDA by PLN 4 million, 257 in very difficult environment, and its composition has transformed in this quarter. As Mr. Grela has said, the driver in this quarter is Aluprof, the aluminum system segment, that's PLN 54 million higher EBITDA year-on-year. To this regular level, for the normal base, that the Flexible Packaging segment decreased by PLN 33 million, so it returns to the previous basic, to its baseline, and Extruded Products segment, PLN 4 million less. And that's the difference in EBITDA. Interest is growing. Weighted average cost of debt has increased by 1 percentage point, and we see a decrease, significant decrease by 40% of debt, which translates into PLN 7 million less on the results.
The other element I would like to point your attention to is this low effective interest rate, 12%, which is due to the fact that we've recognized, we've identified, deferred tax assets, PLN 13 million in this quarter. This is related with the investments that we have ongoing in the Extruded Products segment and the Aluminum System segments, under the main projects related to tax relief. Very good information in terms of our cash flows. PLN 330 million of operating cash flows, that's the highest result, as you can see, in the presented period. PLN 82 million , that's the support under the operating working capital. Three-fourths is the decrease of inventory, which is the matter of optimization, but mainly of decreased prices of raw materials that I mentioned already.
As for investment outlays, expenses, they are lower in this quarter, which is due to the payment schedule. Now we're focusing on finishing payments for the main investment components, mainly Extruded Products segment, 4,000-ton press. So we expect higher outlays in Q4. But as for the work schedule, the segments are confirming the performance of works, and of the investment program for this year. The payment in the Q3, in September, of the third tranche of dividend, PLN 193 million, that's an important fact. And despite this event, we have very high operating cash flows, which allowed us to reduce indebtedness by PLN 45 million in Q3. The level of debt is very low, PLN 653 million.
This level, to a high degree, is due to the working capital optimization, because in the last nine months, it's PLN 300 million. And as before, again, two-thirds of this amount is due to the reduction of the level of inventory. Well, the structure of debt is, has not changed. We are still financed by euro debt, which is the natural hedging for our operating exposure. As we look at the nine months, the reduction of indebtedness by PLN 400 million , these are strong operating cash flows that allowed us in, with some access to finance investments and the remaining part, we almost, we paid almost PLN 200 million of the first tranche of the dividend.
But we need to emphasize that the projections for Q4 are an increase in debt, PLN 1 billion or PLN 150 million, which is due to the fact that we need to finish the investment program and pay PLN 410 million of the second tranche of the dividend, and we still assume there'll be a good EBITDA in Q4. A few words for our closest projections for Q4. We're not expecting any major fluctuations in terms of prices of raw materials. After this significant decrease year-on-year, this level has been stabilized, it seems. And all the studies that have been mentioned already by my colleagues point to a difficult, persistent, difficult situation, uncertainty in terms of growth and development, and reduced demand.
And under these conditions, as we declared, we're trying to, w e're planning key investments, which are important events in our and items in our budgets by PLN 150 million , which is 3x as much as in Q3, so it's a huge challenge for us. But like I said, the work goes according to schedule, and we focus on utilization of our capacity, because maintaining the level above 80% of utilization of our production capacity guarantees economic effectiveness. In fact, economically effective use of our resources and assets. As for finances, like I said, we have an ambitious plan, because the yearly prognosis projection is increase the EBITDA by PLN 70 million , and we are planning on paying PLN 410 million of the second tranche of dividend, which will maintain our secure financial indices. We're not planning on any specific demand for working capital increase.
We are to renew two new contracts, credit agreements, one ongoing loan contract for PLN 535 million in Pekao S.A., that's the bank. We're also renegotiating another revolving credit for PLN 400 million, which will become a long-term credit after we are done with negotiations.
Thank you very much. This was the last part of the presentation. Now, let us move on to questions. President Mańko opened the Pandora's box regarding acquisition, so let's go with the questions on acquisition. Which directions, which segments, how will it be financed? Is the company envisaging any issue of shares to gain money for the acquisitions? Maybe these four topics.
Okay, so all of that will be included in the strategy that we'll present in autumn. Thank you. That's all I can say. It's too early to talk about that.
In terms of directions, the financial director has showed you that we have good credit worthiness, so we don't need too much money for acquisitions. As for directions, we would like it to be directions somewhere in Europe. I would like to mark our presence in other European countries, so that we have a observable share in the Benelux countries, in France, Spain, Germany, the Balkans, the United Kingdom. We'll see. It all depends on the potential entities that could be acquired. When you're asking about the size of the transaction, for now, we'll see during. A new member of the management board is coming, we'll be doing the market research. This work is yet to be done.
However, if I'm asked personally, I prefer investments which are not very large, so the size is, like, EUR 50 million-EUR 100 million, because this allows us to sometimes brusquely go into the company to cure the relations and maintain the company in our structure under our terms and conditions, and not having a company that is too big and has too many subsidies, and it's too difficult to handle. So there's always this risk of a bigger transaction, though I'm not trying to escape from such decisions. We are yet to work on this. Perhaps there'll be an entity that already has a well organized structure that does not require much involvement to adapt it to the Kęty Group. An entity which could would allow us to create some synergy of our products and gain together. I'm not excluding it. This is it. Thank you, for now.
Next question about the future, and more specifically, about the guidance for 2024. The first topic, will the forecast be published in December?
Well, this is the rhythm we adopted, that schedule-wise, we are planning to draft the budget and discuss it with the supervisory board. For the last couple of years, we've been doing it in December, and this is our intention also this year.
Thank you. The chairman has mentioned at the start that, when preparing, when drafting the guidance for 2023, the sentiments were rather poor, and so this influenced the level of the guidance and the conservative nature of these forecasts. One of the attendees points out that currently, as you gentlemen have emphasized, the sentiments, the mood is not really that better, is it, compared to October, November last year? And so consequently, the guidance for 2024, will it be equally conservative?
Well, I said it earlier, after two excellent years, all of a sudden, there comes November last year, and our representatives of one of the segment went to a trade show in Germany, and there, cold water from the tap and dark because everybody was saving energy. So there was a psychosis, a general, general kind of, mood in Europe that a crisis was coming that we had never heard of before. So this, this fear, this, psychosis, after two excellent years, this is something that caught on also in our company, and we are not seemingly the only ones in the capital market where, you know, who, who have, submitted to these negative sentiments. And those were the moods in which, the budget for 2023 was drafted.
This year's, well, this year's budget for next year will definitely be drafted under different conditions. Well, humans are creatures that adapt to changing conditions, so we've got used to the fact that the market is weak, and we've been working with this. I believe that such a situation is actually better when it's constantly, when it's a constant, that the market is weak, and we know what we're dealing with, compared to the situation last year, that it was excellent, and all of a sudden it was a black hole, and we wouldn't know what would happen in the future. So definitely we have proven our strength in these difficult conditions, and we have proved that we can do it, and that we are coping under these difficult conditions.
So in brief, I believe that the sentiments when drafting the budget for 2024 will be extremely different.
Thank you. Well, for the time being, the last question about the guidance for 2024, since the chairman has mentioned that, the publication of the strategy might be shifted to Q3 to the autumn. So consequently, since there will be no new strategic themes, investments, investments for 2024, will they be at a relatively modest level?
As I said earlier, we're not expecting major investments in production capacity since we are utilizing 80% of them currently. So we don't really have a need to do it, or some extensive investments, organic investments to be implemented.
This organic growth, as I have mentioned, in a sense, we, we believe that it has been exhausted in a way, because these production capacities are sufficient. We are definitely a big company. It is a company in the segment of industrial production. So for instance, these recovery investments actually constitute quite, account for quite a significant share of our expenditures, so we have to be ready for this.
Our budget is PLN 380 million, more or less, for the investments. And so from this point of view, definitely on this new things surface, the ones we are thinking about, certain continuation or some standard level of maintenance expenses, we are at the level between 250, 250+ million a year. Unless new ideas, new investment ideas surface.
Thank you. And now a more technical question for the aluminum systems segment. Mr. Grela has mentioned about the lowering of the price lists in Q3. So if you could elaborate what kind of scale we are talking about?
We have this question from one of the attendees. Yes, this is formal information actually. For the first time in the history of this company, we were forced by the market expectations to reduce the price lists. And I further mentioned this, this was less than 6.5%, less than 6.5%, in the price list of architectural systems. So these are not all products, 70% of the products, more or less.
Since August, the reduction prices in the rollers and shutters, and since November, the remaining 30% of architectural systems products have been affected by the decrease in prices.
Thank you. Another question linked to whether the effect of these decreases can already be seen in the results, and whether the margin which was presented by this segment in Q3 and achieved by this segment in Q3, whether this margin in Q4, in October and November, whether it is sustainable?
Because we know that December is a totally different month. It's an atypical month, right? So the comprehensive impact on our prices will only be visible starting from November, because the final part of the market decrease is planned to take place from the first of November.
But as I mentioned earlier, sales, October sales make us optimistic to the point that, you know, it will definitely be higher than last year, and it seems that it will be higher than what we assumed in the budget. And this should contribute to the margin obtained on sales in October and possibly also November, to contribute to a high, a high good margin. Whether it will be a two, something margin, it's hard to say at this point, but, well, we'll do everything we can to make sure that the margin obtained in Q3, can be sustainable and, and maintainable.
So the last question for the ASS system for the time being, it's about Glassprof company. In Q3, Glassprof added to the EBITDA of the segment, or, at the start of its activity, it actually reduced the EBITDA for the segment?
Q3 is a quarter in which Glassprof did not reduce the EBITDA for the segment. Of course, there is a slight addition to the EBITDA of the whole group, as expected. On top of that, there's depreciation rate to that net profit. It's generally a negative figure. However, we need to take this into account in the information which you should be getting. On the products we manufacture through Glassprof, we earn twice: first on manufacturing, and second on sales, and Aluprof sells the product. Consequently, summing these, aggregating these two amounts, we can say with all responsibility that we earn on fire-resistant glass at the EBITDA and net profit level. So Aluprof has earned money, earned money in Q3 on fire-resistant glass products.
Thank you very much. About the Ukrainian company now. In the context of potential changes on the reserves, on the provisions made, for that company, the current situation, does it actually make the management board inclined to release these provisions by the end of this year? Is there any risk of these provisions being increased, potentially?
Well, as far as the risk of increase is concerned, it's basically not there, because we actually established provisions on all property, plant, and equipment, and a part of the working capital which is pre-war capital, which has not been collected or paid. So there is no risk because our current exposure is very strongly controlled. So we basically bring the products together in the same amount, so we don't increase our exposure.
In terms of the solution, well, every quarter we check whether there are premises in terms of impairment tests, value impairment tests. So in the case of continued war, hostilities, well, the situation makes us inclined to keep these provisions. Once the situation becomes calm, we'll be able to discuss this, but this is a question of PLN 12 million or so of write-downs that we actually are keeping.
Thank you. So a question for the Extruded Products segment. Which elements for electric cars are manufactured at EMMI and at the Kęty. I understand it's about type or the whole chassis or?
Well, it's hard to say really which elements we produce. Well, aluminum elements, generally, which are responsible for, you know, depending on the make, on the application, but generally, they are responsible for safety.
So these are crash elements, crash alloys, and this is what we use the most in the construction of electric cars. Simplifying, we can say that these are shock-absorbing elements in the case of a crash, so that absorb the collision energy. Also, finishings, trimmings, decorative elements, broadly understood, also luggage compartment elements and luggage carrying. You can build a whole car, you know, using aluminum to carry luggage and so on and so forth. So this is about segment electric cars, electric vehicles, we're talking about big segment, you know, or we talk about big utilization in internal combustion engine cars. It's hard to say in one sentence what we produce. Well, the bumpers. We produce a bumper for one well-known make, it's crash elements.
We manufacture it with hard alloys, some sleeves, you know, pistons, engine pistons, you know, brake pistons, fitting blocks for the air conditioning system. So, so this application of aluminum in cars, vehicles, not only electric vehicles, mind you, because most of the production now is for internal combustion engine cars, and so, so this is fast, this application.
Thank you very much. A question, a general question about the costs. Generally, cost reduction in Q3, to what extent is it temporary, and to what extent is it permanent? Well, I understand that it's about the raw materials cost. This was the only item that, that went down. Maybe the CFO will answer that.
Yes, this is indeed, as we look at the income statement, as such, the remaining costs related to volumes or to remuneration or third-party services, which indirectly also depend on remuneration costs, these are growing by about 10%, which is an answer to the normal market situation. But if we're talking about raw materials, they have helped in this quarter, obviously, especially. You know, in the aluminum system segment, as Mr. Grela said, and this is the market situation. We are expecting in the nearest future, stabilization in terms of raw materials prices, so that's the only answer I can give. We're not expecting changes in this department. We're not expecting actually relinquishing the costs with for no reason.
If we are talking about the costs, let's pass to electricity. We have a question about the level of security for the coming year. The company, the group, have they started any purchases? Can we let you in on any info on the pricing level this year in the second half in terms of the market? What is the expected level hedged for next year?
As for prices, I cannot share this information. These will be good prices for, for sure. They can be better, of course. We have a procedure, we follow the procedure. The closer we look, it's Q4, it's closed in terms of energy. We're talking about purchase for Q1 next year, Q2. So we buy it step by step, small amounts every day, being close to the market. But it's difficult for me to talk about prices. Is the competition asking? So it's difficult to talk about prices, right?
We have had a request to add some more precise information in terms of components, the construction of electric engines. Do we do that?
Do we do the casing, right, for electric engines? Yes, we do, but not for vehicles. Electric engines in a car, that's cast element.
Thank you very much. Do you see any option of exceeding the currently increased projection of EBITDA by 5%, 10%, if hypothetically, the aluminum systems segment had a very good result in December, and Flexible Packaging segment, if there were an increase in margins in Q4 in the OPP sector?
Well, with this scenario, obviously, yes, we've earned PLN 250 million of EBITDA in Q3, and we know we want to earn PLN 170 million in Q4, which reflects the specificity of this quarter. These will have to be very great two months, and December, if it's a regular month, these business activities, due to Christmas, it shrinks a little bit, these operations, so it's like 0+ period. Though, in the last few years, we had better results in those months.
So if it happens, so, yes, but for now, Q4, in today's conditions, that's well, two good months, designed in the same way as in Q3.
Thank you very much. I'm just trying to see if there are any other questions, because I read the last question regarding the hypothetical situation of abrupt improvement of situation on the market in Q4. I don't see any other questions. Therefore, I would like to thank all of you for today's meeting. I would like to thank you, gentlemen, for excessive, comprehensive answers. And let me invite everybody to another conference, which will probably take place in December, when we present the projections for 2024. Thank you very much.