Cabka N.V. (7GW.F) Earnings Call Transcript & Summary

[Audio Gap] 2024 full year results presentation. I'm Nadia Lubbe, and I'll be your moderator today. First off, I'd like to extend a warm welcome to all our guests joining online. We greatly appreciate your continued support and interest in Cabka. I'm joined here this morning by Alexander Masharov, our CEO; and Frank Roerink, our CFO. Our webcast today will cover the operational highlights as well as our financial performance for the full year of 2024, followed by a Q&A session. [Operator Instructions] And without further ado, I'd like to hand it over to Alex, who will provide an introduction and the operational highlights for the year.

Thank you, Nadia. Well, thank you. And welcome once again to this webcast. A little bit about who is Cabka. At Cabka, we transform challenges and opportunities. We are at the forefront of sustainable innovation, driving the transition towards a circular economy. As a market leader in sustainable plastic pallets and transport boxes, we have established a fully integrated process that spans from recycling to manufacturing. This positions us [ at ] the preferred partner for companies committed to sustainable logistics. Our vision emphasizes the importance of closed-loop logistic solutions that leverage sustainable material streams, ensuring minimal waste and maximum efficiency. What actually sets us apart is our backward integration. This enhances our ESG leadership and technical expertise. We process the know-how in product and material testing, ensuring that we meet performance expectations while continuously developing innovative solutions. This combination of capabilities not only strengthens our market position but also aligns to the growing demand for sustainable practices in logistics. How our vertically integrated value chain looks like. Our process starts with our feedstocks consisting of various plastic waste streams, which includes post-consumer waste, post-industrial waste and waste that we buy back from our customers at the end of the lifetime of the product. These recycled materials are then used in our innovation and manufacturing processes, where we combine our material and engineering expertise with product design and injection molding technologies to ultimately create sustainable products like pallets and containers. Again, our backward integration ensures complete control over quality and sustainability, enhancing operational efficiencies and meeting high environmental standards. This approach allows us to deliver superior products that meet our customer needs while driving positive environmental impact. Our commitment to sustainability and innovation positions us as a leader in the circular economy. If we look into the market trends of RTP. The global reusable transport packaging market was valued approximately at about $107 billion in 2023, with plastic holding an average of 12% market share, give or take. If we look toward the market trends, especially those sustainability, digitalization And growing need for efficiencies in the logistical chain, we expect that these trends would even more so accelerate the transition of the RTP to more sustainable plastic application. The current RTP market is growing at an estimated 4% year-on-year, and we expect that trend to be continuing going forward. I won't spend too much time on this slide, but packaging and packaging waste legislation, better known as PPWR, has just entered into force this year. And we believe it will -- significant multiyear driver of growth for us. I'm moving over to our strategic pillars. Cabka's transformation is driven by purpose, ensuring that sustainability and profitability go hand in hand. Our strategy is built on 3 pillars that drive our sustainable innovation and growth. The first one is basic strengthening market leadership. We focus on [ nurturing ] customer relationships by understanding their needs and providing products and services that fit their logistical challenges. By strengthening our core offerings; fostering customer intimacy; and expanding our market presence, especially in the U.S., we ensure our products remain valuable and relevant. Expanding recycling. As said before, we are backward integrated. And this is why we are dedicated to enhancing our in-house recycling efforts and establishing new material partnerships by leveraging our extensive material and formulation databases, integrating into global recycling [indiscernible]. We develop optimal material formulas for our product. Our focus on in-house recycling, extrusion technology and innovation in recycling products ensures a sustainable supply of materials and one that can contribute to circular economy. And the last one is innovative -- innovation for tomorrow. What do we mean? We aim to create products that are designed for circular systems, transitioning from low-value- to high-value-added products. Our exceptional product design skills guarantee sustainability and efficiency, enabling our customers to transport goods with maximum efficiency while minimizing environmental impact. We lead in sustainability and innovation, ensuring regulatory readiness and leveraging data-driven agility to enhance operational efficiency. We are very proud of the innovation center we have in Valencia to support us with that mission. If we look into the products we offer, starting from the top left corner. Our RTP products vary from very lightweight pallets such as nestable pallets, to more robust, durable pallets such as Endur range. We also sell large containers and products we especially designed for customers' needs and seen as customized solutions. On the right-hand side are our ECO products. These products are mainly used within the building and the construction industry and road safety. At Cabka, we are very proud to serve a diverse range of blue chip customers across various industries. Our clients include some of the most respected and well-known companies in the food, beverage, chemical, retail, pharmaceutical, automotive and obviously pooling sector. We work closely with each of them to understand their unique needs and provide products that fit the purpose, enhance their operational efficiency and reduce their environmental impact. By partnering with Cabka, our customers benefit from our expertise in material engineering, product design and ESG leadership, ensuring they receive the best possible products and services. A few examples of the products we recently developed. The first one is Euro E7.2. And I would like to take the time -- I would like to take your time to look -- to watch a movie of 2 minutes, something about pallets and specifically the Euro E7.2. [Presentation]

Next, I would like to zoom in on some of key developments for 2024, categorized into 4 main areas: market demand, product pricing, operations and cost developments. Notably, we are facing increased global economic uncertainty, which has influenced a part of our top line performance. Despite the challenging market circumstances, the portfolio segment has shown impressive growth nearing double digit, indicating strong market performance and also solidifying the success of our commercial strategy we have implemented. In our product pricing, we have implemented intentional price reduction, which had a revenue impact of approximately 4%. However, in most segments, this was more than fully compensated by volume growth. In our operations, we have made significant margin [ strengthens ] as a result of key initiatives we rolled out. On costs, our fixed costs remained relatively stable, with main increase in personnel costs as a result of expanding our sales team and also wage inflation. As mentioned, our initiatives are still ongoing and is aimed at boosting operational efficiencies, are crucial for sustaining our growth trajectory. On the following slide, I'll explain which initiatives we have ongoing and the progress made, so far. In 2025, Cabka is committed to continue on initiatives we have started across various departments to strengthened our execution. It's all about execution in '25. During 2024, we have notably see -- increased our sales force across all regions. This strategic move was aimed to tap into high-potential industries and expand our market reach. In operations and procurement, the focus has been on improving production capacity and implementing cost-saving measures, including a new extrusion technology and automation, to strengthened our effectiveness. In people and culture, we have started a leadership development program to prepare the leaders of Cabka for tomorrow. Financially, we are seeing positive trends of our initiatives already, especially in portfolio with an 8% sales growth in Europe and 10% in the U.S., alongside a 5% improvement in overall OE. Our capital expenditure remains under control. And our working capital has remained well within the guidance range as a result of our focus on cash and cost control. We have reallocated responsibilities to boost sales efforts globally while creating efficiencies in our back office. I would like to hand over to Frank, who will take you through the detailed financial performance for '24 and the outlook for '25.

Thank you, Alex. We experienced in 2024 an 8% sales decline, reflecting broader economic challenges. 4% was due to intentional price reductions passing on the benefits of lower raw materials and energy prices to our customers. The remaining decline was due to significantly lower volumes in our U.S. customized solutions business; and continued soft demand in contract manufacturing in Europe, where our customers faced sizable declines in sales. Our commitment to sustainability is evident, with 88% of our materials being recycled significantly higher than the market average of 14%. Operational EBITDA stands at EUR 20.5 million or 11.3% of sales, down 1 percentage point versus last year. As this is not where we believe our margin should be, we will continue to optimize our organization to enhance EBITDA levels towards our guided range in 2025. Net working capital is at 14.6%, which is well below the guided range of 20%. Net income from operations is reported at minus EUR 4.5 million, a significant decrease from prior year. This is entirely driven by the lower sales in 2024. Looking into our regional performance. The accompanying map pinpoints the locations of our production facilities, emphasizing our strategic presence in the key markets North America and Europe. While North America experienced a significant revenue decline in customized solutions, the impact in Europe is a bit more mixed. The solid growth in portfolio could not offset the decline in contract manufacturing. We were able to expand our footprint in the rest of the world compared to last year. The pie chart on the left illustrates the sales distribution by product segment for 2024, with portfolio segment leading at 54%, followed by our customized solutions segment. This slide highlights the development in each of our product segments, showcasing a bar chart that illustrates the sales growth across the various categories. Notably, we achieved a 4.5% growth in our key segments, with the European Union or the EU and the U.S. portfolios nearing double-digit growth rates. Customized solutions in the EU has shown resilience, with a positive indicator of our adaptability in that market. Additionally, we saw robust growth in ECO and material sales, reflecting our commitment to sustainability. However, it's important to address the challenges we faced in the U.S. customized solutions and in contract manufacturing, which have been significantly impacted by our current market conditions. Both accounted already for 20 million of sales decline in the first half of 2024. As well, in the second half of 2024, it showed a slowdown but still adding up to 25 million in total sales decline versus 2023. This duality of growth and challenges underscores the need for strategic adjustments as we move forward into 2025. In Europe, our portfolio business demonstrated strong growth, increasing by 8% year-over-year to reach more than EUR 77 million, up from EUR 72 million in '23. The customized solutions business in Europe remained relatively resilient to the market conditions, with a slight decrease in revenue bringing it to EUR 34.5 million compared to EUR 34.7 million last year -- revenues primarily from new products we launched from our co-developments together with our key customers. Our ECO business delivered robust growth of 4% year-over-year, resulting in EUR 26 million sales in 2024. However, we must also address the challenges we faced in contract manufacturing, where we faced weak demand throughout the year. This resulted in a significant sales decline of more than EUR 11 million, reducing the total sales to EUR 18 million from EUR 30 million last year. Included in this decline was also still some revenue impact from the exit from our PVC business which we announced in 2022. The following highlights the performance of our U.S. portfolio showcasing a significant contrast between portfolio, on the one hand; and customized solutions, on the other side. The portfolio demonstrated a robust growth of 10%, increasing from EUR 18 million to EUR 20 million this year. And this growth is first an indication of our adjusted sales strategy, which is beginning to yield positive results as we started to gain back some of the market share that we lost during the flooding. On the other hand, the customized solutions segment faced substantial challenge. This downturn of more than EUR 14 million is largely due to key customers in the U.S. restricting their capital expenditure. However, we are actively engaging in proof-of-concept trials with potential customers, but it's too early to tell what these will all yield. I would now like to zoom in on the key financial metrics for 2024, emphasizing our gross margin, our operational EBITDA and cash generation. As you can see from the bar chart, we have made significant enhancement in gross margin since 2022. We increased it from 44% in '22 to almost 51% again back in 2024, which is a good indicator of improved efficiencies in our operations. However, the shortfall in sales impacted our operational EBITDA, bringing it down from 12.4% to only 11.3%. This margin is below the guided range of 13%. Initiatives to further reduce our cost base and enhance our operational efficiencies are still ongoing. Last slide is the cash generation from operations -- and also, the last bar is the cash generation from operations. It declined with EUR 11 million, which is partially driven by a lower EBITDA and but also a final settlement payment that we made for the machines and equipment that were installed in the U.S. that we committed to in 2022. In 2024, Cabka experienced an 8% sales decline, totaling EUR 181.9 million of sales, primarily due to the reduced demand in the U.S. and contract manufacturing. However, it's noteworthy that gross profit margins improved by 3 percentage points, rising from 48.3% to almost 51%. This enhancement in gross margin is positive indicator of our operational efficiency. Operating expenses increased by 2%, largely attributed to inflationary pressures affecting personnel and other costs. On the brighter note, key vacancies in our sales team have been filled, which should help us drive further performance in the future. The operational EBITDA stands at EUR 20.5 million, representing 11.3% of sales. Further efforts to manage costs effectively, despite the revenue challenges, are implemented as we speak. The accompanying table provides a detailed breakdown of these figures highlighting the changes from the previous year. And this slide emphasizes the importance of transformation in our financial landscape, specifically focusing on our net debt development. We see a significant increase in our net debt of EUR 15.1 million. The accompanying pie chart illustrates the various components that contributed to this change. Notably, cash flow from operating activities stands at EUR 16.2 million, driven by operational EBITDA, while we also accounted for income taxes and net working capital adjustments. On the other hand, cash flow used for investing activities showed an amount of EUR 18 million primarily due to capital expenditures. Additionally, financing activities reflected cash outflow of EUR 3.7 million for dividends that we paid, EUR 4.5 million of interest payments and EUR 5.2 million related to leasing and financing. It's of paramount importance that, going forward, we carefully balance our cash inflow with our outflows. This slide's indicates our effective management of the net working capital, currently at EUR 26.5 million or 14.6% of sales, well below the medium-term guidance. The increase in inventories reflects our choice, our deliberate choice, to optimize production capacity during our low demand, which allows us to ensure swift fulfillment of our customer orders, in particular in response to the shorter order cycles that we've been witnessing in the last half year. Trade receivables has decreased significantly due to a successful factoring implementation, enhancing our cash flows. And the reduction in trade payables is due to the final settlement payments for the machines and equipment at our U.S. plants that we bought in 2022. The table on CapEx shows you a significant reduction in our expenditure from EUR 31 million last year, now down to EUR 18.7 million in 2024. This is one of the first key steps to control our cash outflow. Key investments include EUR 9.4 million of replacement and maintenance investments, underscoring our commitment to operational efficiency. Additionally, EUR 1.7 million was allocated to U.S. investments to finalize and update the machinery after the flooding. And the ECO business investment of EUR 1.7 million underscores our commitment to sustainability. The bar chart illustrates that replacement and maintenance investments will consistently represent about 4% of total sales in 2024, reinforcing our strategic financial planning. As we look ahead to 2025, it is important to acknowledge that market conditions will continue to be challenging due to the current macroeconomic circumstances. We therefore expect sales and EBITDA for 2025 to be at least on par with 2024 levels. However, we foresee a continuous shift towards reusable plastic packaging driven by the upcoming PPWR legislation, which we believe will have a significant multiyear growth driver for Cabka to come. Additionally, we will implement our SHIFT program, which is designed to reduce our cost base and increase our operational efficiencies, which we -- are crucial in navigating these challenging times. We're also prioritizing lower capital expenditure while focusing on next-generation solutions to ensure sustainable growth. The key element I would like to highlight is the 2030 guidance we have provided in November, at our Capital Markets Day, focusing on 5 critical performance indicators that will drive our success. Firstly, we are targeting significant growth aiming for EUR 300 million of sales by 2030. This ambitious goal positions us to outperform the market growth. Secondly, we're setting an operational EBITDA margin goal of 15% to 17%. This ensures profitability while effectively managing costs. Thirdly, our capital expenditure will carefully be controlled with an annual cap of less than EUR 20 million. This approach shall balance our growth and our maintenance needs. Additionally, we will maintain net working capital well below the 20% of revenue, promoting efficient resource management. Finally, our dividend policy remains unchanged with a payout of 30% to 35% of net profit, with an aim to grow to 0.25 per share, reflecting our commitment to delivering value to our shareholders through sustained cash generation. This holistic approach will enable us to reinvest in growth while rewarding investors. That concludes the guidance and the financial information I wanted to share with you. I also would like to highlight our calendar with the key financial dates for 2025 which are important for stakeholders to note. The publication of our annual report for 2024 and the trading update for Q1 is planned for the 15th of April. Following this, we will also publish our agenda for the AGM, which is planned to be held on the 29th of May. On August 12, we will publish our half year results. And finally, the trading update for Q3 will follow in October. With that, I would like to hand it back to you, Nadia, for further Q&A.

Thank you, Frank. [Operator Instructions] And I see actually some first, a few questions coming in. I will start off with the first few question which is directed to Alex.

Alex, you mentioned PPWR as one of the growth drivers for outgrowing the growth -- the market. How much impact do you estimate will be in 2025?

Well, on PPWR, we are fully dependent on our customers actually, so we don't build our strategy on the legislation, but we are here to help our customers to navigate through the challenges, so we have a full team ready to support our customers with whatever they need in terms of meeting the legislation whenever they choose to [ meet it ].

Thank you so much, Alex. Next question is to Frank. "With regards to the 15% to 17% EBITDA medium-term guidance, can you provide a buildup of how you expect to achieve this guidance by 2030?"

Sure. First and foremost, growth is a crucial driver. We want to grow, which allows us to basically benefit from the economies of scale in our operation. Secondly, it is clear that our SHIFT program, which is focused on cost cutting, shaving off costs and focusing on operational efficiency, shall be the second driver, but let me reiterate growth is crucial to get to the guidance of 15% to 17% margin.

Thank you so much, Frank. Next question is for you, Alex. Could you kindly indicate if there is any development on the U.S. customized solutions segment, especially the loss of business there? Do you see any other clients stepping in to replace the sales?

Yes, we are working on different customers that we'll -- I cannot say here, but obviously we're going to focus on larger customers in the U.S. to replace the loss in customized solutions that we had. A few meetings are in place as we speak. There are a few future opportunities that we look in 2025. How fast they'll materialize, it depends on the customer as well as on us.

Excellent. Thank you so much, Alex. I think the next question is also for you, Alex. "Could you discuss as to what you see as an impact of the dividend cut? Do I understand correctly that this is only ones-off for the year?"

You mean for 2024...

2024, yes.

Yes. So we have decided not to pay dividends in 2024. That was enhanced by the Board. However, it's still to be approved in the AGM meeting in May. And we -- yes, for 2024, we have decided to do it as onetime. In 2025, it's all about the results. Let me see how it looks like, and then we decide.

Excellent. Thank you so much, Alex. The next question is on the financial covenants. I'll point that to you, Frank. "Could you provide some color on the financial covenants that has been waived? Is there any limit to such waivers? Or they can be extended easily till 2026. Do you see it as a big risk?"

Well, due to the confidential nature of the contract, I can't disclose the specific numbers, but we've indicated to the market that we discussed with the banks in August a waiver for a certain period of time, which was granted to us. What we basically did -- they gave us a waiver or a -- for a certain period; and a suspension in one instance, also a further buffer in the covenant. We have drawn up to now -- we've got a facility of EUR 80 million. And out of the EUR 80 million, as you can see from our balance sheet, we have drawn about EUR 58 million, so they're -- in facility itself, there's still sufficient room.

Thank you so much, Frank. The next question is for you, Alex. How is Cabka intending to increase shareholder value in light of the current share price, no dividend payment for 2024?

Well, we are looking at different options, and all of them are on the table. Obviously liquidity or other options are always there. It is a difficult market time, but we're going to navigate through that. This is why we have a plan for 2025 to execute and actually meet the results that we have in our plants. And I believe it will strengthen our shareholder value.

Thank you so much, Alex. Next question is for Frank, "Given at least the guidance, what is the bandwidth you are working with internally?" Is that the same as last year, equal -- sorry. I'm a little bit tongue tied. "Given your 'at least' guidance, what is the bandwidth you're working with internally? It seems at least equal to last year or even a flat market. Is that what you're seeing right now?"

Yes. I wish I had that famous crystal ball. And I think many of my colleagues and my competitors would like to see the same. It's a very difficult market to assess right now. And who would have thought where the markets will be right now? Even if you would look back a week ago, there's a massive change, so it's quite difficult. And we see the same uncertainty with our customers. And that uncertainty is always difficult for people to commit to large sums of money. We are very comfortable with the current performance that we see on a day-to-day business. We do see our orders coming in, as we saw last year, so in that sense, we feel very comfortable about the short-term outlook. The difficulty that we have, we -- in the past, we used to have a much longer view on the order book, but at the moment, our customers are keeping their cards close to their chests. So in that sense, we feel comfortable with the products that we have. We feel comfortable about how customers are talking to us, but the real commitments are not there. In that sense, we feel bandwidth is not appropriate, at this point in time, to give, but the guidance has been deliberately chosen in 2 ways. One, we feel that we should be able to deliver at par versus 2024. And we still continue to commit to our mid-term strategy for 2030 of high single-digit growth.

Thank you, Frank. I think also the next question is for you, Frank. So we talked about program SHIFT. How quickly do you expect the effects of this program to take effect...

Some of them are already implemented. So the SHIFT program is -- has to deal with basically reallocating our resources, whether it's financial or our people. And we've already started this last year. And last year, we commented also, where we said we would move our -- bring our focus for our teams more towards a sales angle and less on the back office. That has been implemented. Definitely, some of the other elements such as -- what we're doing is automation and robotization in our plants. That takes a little bit more time to implement. Basically you have to buy the robots and implement it in the factory. And then you will see the savings in -- for instance, in labor costs coming a little bit later, so it's a bit of more of a phased element that we will see coming in throughout the year. Some of the activities, we will continue to look at the organizational structure. And they will hit the P&L throughout 2025.

Perfect, thank you so much, Frank. Next question is for you, Alex. It's a little bit more looking again back to our customers that has for now paused their capital expenditures. Do we see any signs that customers is preparing to resume their postponed CapEx programs that could benefit our customized solutions arena?

Well, if the question is about the business we have lost in the U.S., then -- we don't see a few customers renewing that specific CapEx. However, we see new customers coming in with a different investment approach. And we are quite confident we're going to have that business in house because we are tendering for it actively. And we have some new opportunities, not all the opportunities, that I believe will hit in 2025, maybe more towards the second half.

Excellent. Thank you so much. Next question is for you, Frank. So it's coming back to our working capital. How large was the impact of factoring on our trade receivables?

We had a factoring program installed that was about EUR 9.6 million in 2024. And it's a program that we've agreed to with the banks, and it helps us to manage our cash flow in a much more effective way.

Thank you much -- so much, Frank. Next question is for you, Alex. You mentioned ECO business as an outlet for chemical recycling on Slide 8. What does it actually entail?

Well, we -- our ECO business have currently a few outlets. As a future outlet, it can be also a chemical recycling. It's something that we are exploring today because chemical recycling is a bit of a future, but it's something that is constantly on the table. Because I believe that ECO is a very important part of what we do. This is our key strength as to being backward integrated. And there are a few outlets out of the ECO business. Chemical recycling might be one of them.

Perfect. Thank you so much, Alex. Frank, the next question is for you. "Do you expect a positive effect from the use of tax losses for your 2025 tax rate?"

Yes. As you -- as the person who asked the question probably saw, that we have taken a conservative approach on taking a renewed position of our tax -- the deferred tax asset in the U.S. During the flooding, we had created a -- deferred tax assets. And on IFRS, which is very strict in its application, you need to make sure that you still comply with the assumptions that you had before. With the comment that Alex made before on the U.S. customer, we've decided to take a bit more prudent approach from an IFRS point of view. And it doesn't mean anything in terms of our commitment to the U.S. It doesn't mean anything to our growth ambitions in the U.S. All -- our fiscal position is completely protected. So for those who know, our fiscal losses in the U.S. have an indefinite period of carryforward, so there's nothing changing there. It's making sure that we comply with IFRS standards, and therefore, we have taken a conservative and realistic approach to saying we will kind of reduce the current deferred tax assets in the U.S.

Thank you, Frank. Next question is for you, Alex. "In your guidance 2030, you have high single-digit sales growth target in order to reach EUR 300 million by 2030. Is that still realistic as organic sales growth target, or does this anticipate also acquisitions moving forward? If not, will you be adjusting your target in the near future? And if yes, what are you looking at, over what period?

For now our guidance for 2030 stays the same. It's EUR 300 million. We are looking at single-digit sales growth target year-on-year. For us, we have not specified whether the growth is going to come from natural growth or it's going to come from merger and acquisitions. Both of them are open, but we keep the plan as it is for now. What we need -- what we are primarily focusing is to making our company larger and to -- than it's today, more sustainable; and to have more value for our shareholders. So we have to grow. There is no other option for us.

Thank you so much, Alex...

I think, if I may build on that one is I think that we -- some analysts have asked the question before in terms of our capacity. I think we've got a really good setup right now whereby we've got sufficient production capacity, so with very little CapEx, we can produce much more products. And in the end, in our industry, it's all about capacity utilization. And that's what our aim is. As Alex said before, operational efficiency is -- predicates the fact that you need volume growth. And if we can acquire growth or if we can grow ourselves, that's almost less of an issue, as long as we can get our assets to be fully utilized. That is the perfect way to improve your margins.

Thank you so much for adding, Frank. Next question is for you, Frank. "The share price is a little bit of a drama. [ However, we would ] like you to comment on the share price." And I've got a connecting question to that, but I'll first maybe have you comment on the share price for now.

Yes, I fully understand and acknowledge the disappointing share price. And let me reassure you that this is high on our radar screen. We monitor quite carefully what's happening in the marketplace. And the only thing that we as a company can do is be very transparent of what we are going to do and execute on the strategy. In the end, the market will see the results and, hopefully, will judge it based on the output of our strategy. And that, hopefully, translates into a much better share price performance, but that is our company -- we can only do what we can do as a company to execute. And that's what we will do.

Also there's a question about the liquidity that is still extremely poor as the share -- and that has also an effect on the share price. Is there any opportunity for additional investors to take a stake?

As always, as a good company would do, we always look at opportunities to strengthen the balance sheet. And if that would require bringing new investors on, whether it's through primary or secondary shares, we always look at them to make sure that we've got a healthy balance sheet and sufficient means and financial flexibility to execute on our strategy.

Thank you, Frank. Next question is for you, Alex. "For a number of years, I already hear that Cabka is facing challenging market conditions. Please elaborate on this, as the U.S. market and also the EU market constantly grew the last couple of years."

Grew -- well, it's just a fact that we have challenging market conditions. And despite the fact that we have probably said it a few times, we are still in that position. Does that make us -- is that an excuse? No. This is why we are creating the SHIFT plan in the organization, because we want to be agile to the market conditions. It doesn't matter that if they are difficult or not. We need to be at the right size to grow in that market. Now this is why we've created the SHIFT plan. This is why it kicks in more in '25 but also, you heard Frank, in '24. And I'm very positive that, whatever market conditions are providing us, if you are an agile company to adjust to that, you'll be fine. You can grow. Market conditions are, for everyone, the same, for us and for the competition. We just need to do what we do better.

Thank you, Alex. [Operator Instructions] I will take the next question, which is directed to you, Frank. To what extent is the current listing supportive of our shareholder value?

It's a tough question to answer in a very short period of time, but I'll do my best. The listing has brought the company a lot. It has brought us to much more transparency. It brought us to a place where the company is now in a much better state in terms of its processes, procedures, its governance. And it also most importantly brought a lot of new cash injection into the business, which allowed us to grow and to deal, for instance, with the U.S. flooding. Yes, for a smaller-sized company like Cabka, there is a certain [ price tag ] to being an listed company, but we believe that the benefits still outweigh the cons. And it's up to us -- to Alex's earlier point, size in that sense is a crucial element because all the -- also size in the company will help us being a solid performer on stock markets. In the end, a listing is a mean of getting access to capital. And that, what it has provided to the -- I think, to the company. For our customers, I think there's also benefits. We are a very reliable partner for our customers because our customers can look at our financials. They can judge our company. And they know who they're dealing with. And we get back from the market that it helps that we are very transparent on our -- on what we do as a company; for example, what we do on ESG, on CSRD reporting. That is highly valued by our customers. And we see that our customers more and more start to approach us with help on how they should deal with packaging and especially reusable transportation packaging in their reporting needs. So it's a mixed bag. Sometimes and especially in the finance discipline, you would like to have it less, but from a company point of view, the listing has brought us a lot of good things.

Thank you, Frank. There's also actually a connecting question to the listing. Has the company ever considered a delisting?

The respectful answer is that the company always needs to look at every single option that it has to improve its performance and to improve and create value for its shareholders. And that requires us to look at anything that comes along, whether it's an M&A opportunity; whether it's a raise, capital raise; or whether it's a dividend payment. All the elements that are of essential value to the shareholders is something we consider and review.

Thank you so much, Frank. Yes, I don't see any of your questions coming in at this point, so I think we will close there. If you were not in the position to join our webcast this morning, we will have a recording uploaded on our website this afternoon. And with that, I would like to thank Alex and Frank, for presenting today, and also our guests joining online. We look forward to hosting you in the future. Thank you and goodbye.