NewPrinces S.p.A. (NWL) Earnings Call Transcript & Summary

So good afternoon, everyone, and thank you for joining today's call on the Newlat Food 2022 Full Year Results. I'm Benedetta Mastrolia, I am the Investor Relator at Newlat. And joining me today to discuss our results are Angelo Mastrolia, our Chairman; Giuseppe Mastrolia, our CEO and Chief Commercial Officer; Rocco Sergi, CFO and Fabio Fazzari, Group Financial Director. Before starting our presentation, I would like to remind you that this presentation may contain certain forward-looking statements that reflect the company's management's current views with respect to future events and financial and operational performance of the company and its subsidiaries. These forward-looking statements are based on Newlat Food S.p.A's current expectations and projections about future events and any reference to past performance of Newlat Food should not be taken as a presentation or an indication that such performance will continue in the future. This is also not an offer or it's a solicitation of an offer to buy Newlat's securities. Now we move directly to the presentation. I believe it's Slide 7, where we have the key financial highlights. As always, we're starting from the revenues. So in terms of revenues, we had EUR 741.1 million in revenues, which is a marked increase of around 18.5% versus the pro forma revenues of 2021. These numbers include same in terms of the, same in terms from 2021 in the pro forma numbers, but we did include EM Foods in this presentation. In terms of increase, we had the highest increase in pasta with plus 41% purchase [indiscernible] and plus 25% in dairy. In terms of the reference markets, we had nice increase in Germany with almost 24% of increase in sales. In U.K, then the second with 18.5% increase and Italy was 16.6%. Now I move on to the EBITDA quadrant, where we have the adjusted EBITDA number of EUR 57.5 million this year versus adjusted EBITDA of EUR 58 million in the year 2021. Adjusted EBITDA margin was 7.8% versus 9.3% in 2021. As already mentioned in previous earnings calls this year, we had a negative impact on the general inflationary trends that we've seen and which impacted all the raw material prices, as well as packaging, energy and logistics costs. And we can see that in the sort of slight decrease in EBITDA margin for this year. In terms of EBIT, we had EUR 20.1 million of EBIT versus EUR 20.4 million in 2021. However, we had a very good performance of EBIT in the last quarter as well as the other sort of financial figures as we had a recovery in margin in the last quarter. And we generated almost half of the EBIT for the year in the last quarter with the increases in price increases as well. In terms of net income, we had a net income of EUR 6.6 million, which compares to an adjusted net income of EUR 7.97 million in the year 2021. Looking at free cash flow, we had free cash flow, which, for this year, we started to exclude the change in net working capital as for the year we had to sort of invest in net working capital for the year. So we're having -- we're looking at EUR 16.8 million free cash flow without the change in net working capital. This impact on net working capital has already been utilized in the first months of 2023. So we expect to have sort of a positive free cash flow, including that -- the change in net working capital going forward from the next quarter. We had EBITDA free cash flow conversion of 72.6%. Lastly, we have net financial position. Looking at the net debt, excluding IFRS 16, we had EUR 34.6 million of net debt, which compares to EUR 13.8 in 2021. Looking at net debt, including IFRS 16 liabilities, we had EUR 81.4 million of net debt compared to EUR 52.9 million in 2021. This year net debt was influenced by a number of factors. The first one being renewal of lease terms, which were expiring this year, which gives us the number of lease liabilities for the year as well as an increased share buyback amount of EUR 28.4 million, which compares to EUR 15.8 million in 2021, so basically doubled compared to last year as well as some lower liquidity levels and -- than last year. Moving on to the next slide, we have sort of a very short summary of the key milestones of 2022 for the group. As we said, despite the very challenging scenario, we had quite a successful year, and we have this sort of interesting remarks that we are sharing now. So the first one being the EM Foods acquisition. So as we mentioned in previous conversations, we acquired EM Foods at the end of the year. And with this acquisition, we acquired the production, sales and distribution platform of the company in France as well as a -- sorry that was a -- as well as a new type of addition in terms of these mixes and making [indiscernible] to the facilities we have. In terms of pasta sales in Germany, we had the best performing year in Italian pasta sales in Germany. Despite the exit of the [indiscernible]. So Delverde was able to set a new record in terms of volumes of pasta -- of Italian pasta sold in Germany. And we had 42,450 tons of Italian pasta sold -- Delverde pasta sold in Germany in 2022. In terms of organic sales, we had a very good organic sale increase of 6%, which is above the industry average and we had the highest increase in pasta sales volumes. Also looking at some of the more interesting topics. We were ranked among the 130 companies, ranked by Corriere della Sera as the most climate conscious companies in Italy and we had the best result in the food and beverage industry. And we were also recently awarded with a leading -- awarded as one of the leading sustainability companies in Italy by -- in the second quarter as well. So this year, we invested a lot more in our brands. We increased our focus on the core brands of our portfolio in the reference markets. We increased our exposure to social media. We had some TV adverts. We did new line extensions and brand relaunches in different countries. And definitely, we can say that the #1 brand that we focus on this year was Naked. Both in the U.K., in Italy and Germany, we had collaborations with influencers in the U.K., which is something that we will come up and initiate that in the next few months. With on-site brand activations we're making with universities in Italy, we've engaged a lot of young people, and we've made sure to make -- so that they make Naked a very well-known brand, which was already well known in U.K., but now we've kind of penetrated the Italian and German market as well. And the brand awareness has grown by a lot in just under 12 months since its launch in these 2 [indiscernible] markets. So we're really happy about that. Lastly, very important for our strategy is M&A. So by the end of 2022, we actually entered into some interesting talks with new companies in particular for the acquisition of a very big company in Europe, which has different categories, kind of like us, that has over EUR 1 billion revenues and EUR 1 billion revenues. And we will still have a -- some talks with another company, which specializes in the special food sector. They are around EUR 200 million in revenues or sales. Now I think there was -- already there was someone that requested to do something, and I can't move my slide, I'm really sorry about that. Okay, okay. So now we move on to next slide, which is about the growth rate in the food and beverage sector. So if we look at the sort of our peers, we selected an example of 8 companies that we can kind of benchmark towards. And we can see that in terms of the growth rate, we had increase of sales, which was the highest between these -- among these players, some of them are really big names, which we already know, really big names. So in general, we had a very good result in terms of sales growth, and we also had a result which shows the very good mix and price contribution that we were able to achieve in the last year. Now we want to -- some marketing activities were done in the last year coming up with U.K. being the #1. So we're looking at the 2 core brands for the U.K., which are Naked and Mug Shot. In Naked, we had a increase in the total market value of Naked was plus 7.5% and a increased penetration of 4% in the market. We launched Naked Ultimate. As I mentioned earlier, we had a campaign revolving around the launch of Naked Ultimate. We collaborated with different influencers. As you can see here in the pictures, and we've been working on new product developments, both in improving -- improvement of the current lines and current SKUs. Moving on to the next slide. We have Mug Shot, which is the other sort of core brand for the U.K. We are category leaders in the instant convenience snacking market, with Mug Shot being recognized among people who really care for their health and their sort of calorie intake and overall micronutrient intake. And we had a total value increase of 3.2%, and we were actually the #1 brand of [indiscernible]. We also had a new campaign, which is the Give It A Shot campaign, which was launched this year, this past year and we engaged with [indiscernible], which we've been associated previously, and we've been having really good feedback from the campaign with a lot collaborations, as you can see here as well. And also with Mug Shot, we're working on new product developments and launching new lines and new different products as well. Moving on to next slide, there's one really interesting news about the U.K. So in terms of performance in the market, Symington's outperformed the market both in terms of value and volume growth. So as you can see here in the slide, in the graph, you can see that we had a robust 6x better results than peers. So the total U.K. grocery market in the U.K. was 16.7% increase in value growth and as well as the increase of 4.4% in volume, which compares to a negative 6% for the overall market. So in general, we can see that these numbers kind of confirm the ever evolving and everlasting brand awareness on back of the competitiveness of the Symington's range in U.K. and confirming us as one of the best performing food players in the U.K. Now we move onto Italy. Italy is where we had some very interesting launches and line extensions. We've worked on Crostino Dorato line extensions. It is particularly interesting because we are incorporating some of the Symington's production. So these -- some of these products that you can see on the right side are -- on the left-hand side, sorry, are being produced by Symington's. And we also launched a new pasta for Delverde, so we've seen increased interest towards high protein and gluten-free pasta in Italy. So we've enabled our existing production to implement those very quickly, and we're launching Delverde 100% legume pasta, gluten-free, high protein pasta and a gluten-free pasta range. We're also launching different products such as Cappuccino Lovers oat milk and other products. We will be launching Naked Ultimate in the next few months in Italy as well. And we've launched different products in the dairy sector. And as far as the communication here, you can see some pictures. And moving on to the next slide, where you can see sort of the investments that we've done in communication in Italy, we focused on our core brands. So in terms of milk and diary, we focused on Optimus and Polenghi as we collaborated with Bake Off Italia, which was -- where they used our [indiscernible] our milk and our milk and dairy products to bake their cakes in Bake Off Italia and it was really, that's really a success and was one of the most watched TV shows in Italy. Granfetta and Crostino Dorato, we collaborated with Chef in Camicia, which is a online platform, sorry, social media online community platform with different channels, they have Instagram, Facebook and all the sort of social media platforms you can think of. And we had a lot of very good feedback. We had more than 2 million impressions overall and Facebook impressions as well. In Italy we also really tried to push the Naked launch. So we collaborated with different universities as well to launch the product. We had some brand activations on-site at the most important universities in Italy, like Milano, Roma and Bologna. We did interviews with people around the cities and we had over 500,000 impressions on Facebook and Instagram with this campaign. Moving on to Germany. We had a line extension of the Birkel line, like Mezzi which we already presented last year. We are also launching Hafer, which is the oat pasta in Germany and Trulli. Minuto was redesigned last year, and we had a very good reception, very -- really good reception with increased sales. You can see -- you will see later on the increase in sales since the Minuto redesign. And also, as mentioned briefly as well on the last presentation, we are working towards the Minuto range expansion with baking kits from EM Foods. And we will incorporate the EM Foods production into -- to create a new brand Birkel Minuto and which we will launch in the European market as a alternative to [indiscernible] mixes brand. The next slide, you can see some of the pictures from the Germany retailers, where we've been pushing a lot for the launch of Naked as well as Minuto, maybe worth mentioning, which I forget to mention earlier, the Minuto is now being produced at Newlat plants. So we're also working on the sort of savings aspect of the product, which was previously produced by a third-party producer. And we had really the good reception, as you can see in this very interesting slide, where you can see that the volume growth in the last year has been up 48% since the brand relaunch and brand redesign. So we had really good reception in Germany and the product has been really appreciated by customers over -- throughout Germany. On to the next slide, something I mentioned earlier on is the very good performance of Delverde in Germany. So 2022 was sort of a bet for us because it was the first year we're returning. So of course, we didn't know what to expect. But as you can see from the numbers, we were really successful in the [indiscernible] from returning to Delverde. And we had the best performing year in terms of volume. So this is really volumes in Germany, with 42,451 tons of pasta being sold in 2022 and this beats the kind of record that we had in 2020. Bear in mind that in 2020, we had the highest number because of COVID. This year we just had an increase because of our really committed marketing and the sales team in Germany, and we -- and they -- we successfully transitioned from -- returning to the [indiscernible] impact on the pasta sales in Germany, which is the #1 country for the, especially new Delverde pasta, so I'm really happy with that. Now we move on to the ESG updates. In terms of environment, we've been working on different actions. One of them being the installation of photovoltaic cells and solar panels. We are working on a new system towards recovery. As already mentioned, we have been recognized as one of the most climate conscious Italian companies by Corriere della Sera [indiscernible]. This year, we recorded a decrease of 25.7% from 2020 in terms of energy intensity. And we've achieved, half of the sites having over 90% of recycled or recovery, which is really important for us. In terms of logistics, we've avoided 788 tons of CO2 emissions by using train transportation instead of truck transportation. And we're also working towards a more sort of sustainable future for our employees with a training program aimed at increasing awareness and skills and knowledge about sustainability in general with our team. Brings us to social, we've been doing a lot of different things. Some of them we already talked about in previous conversations. We're also working on the sort of generational change, if you recall this year. So we've increased our headcount of people under 30 of about 40% in the last 3 years. So we've been really working on investing in newer generations and young people and build skilled people to sort of invest for the future. And we've been working with different schools and in fact and with different schools and we've been arranging visits to plants and farms and arranging lectures about food and nutrition in general. And moving on to governance. We had a quite nice adaption of the sort of governance in terms of sustainability policies. So we adopted a group ESG policy as opposed to different separated policies. And we also are adopting a common group -- Group's Code of Ethics. Now we move on to the sales breakdown and analysis. So as mentioned already quite a few times, we have increased our sales by 18.5% this year. This periods of different solid acceleration in sales growth, of course, which is shown in the overall increase in organic sales at 6% which confirms sort of the strong underlying demand. We have new launchings that you -- new launches as you've seen. We have new listings as well in different supermarkets and grocery stores. And this is kind of proving the commercial commitment and -- that our sales have had last year. We had also some, of course, some strong price increases to face the increase in costs that we've had in the last year since the outbreak. And in terms of the raw materials, as I said, we had increase in production costs, which has been sort of partially almost relegated to consumers -- to customers, sorry. And we have some new price increases that have been implemented in the beginning of 2023. Now we move on to revenue breakdown by business units. So as you can see here, all the categories had a positive -- positive growth. In general, we can say that we had roughly 1/3 of the increase was influenced by pure sales volume increase and 2/3 by price increases. In general, pasta sales went up by almost 41%, and this was due to, thanks to new sales volumes and new customers as well. And Germany as mentioned, has been the #1 country for pasta growth and we also increased our exposure of pasta sales to large retailers as well as B2B customers. The Milk segment grew, thanks mainly to an increase in food service and normal trade sectors. Bakery products went up, especially thanks to an increase in Crostino sales, as well as an increase in the private label and B2B sectors. Dairy, as always, has been kind of carried by mascarpone growth, which grew, especially in Canada with almost, with 62% increase, USA was 31%, France was 35% and Netherlands was 25% increase. So we had a really good year for mascarpone as well this year. Instant noodles, as we said, has been pushed into new markets like Italy and Germany. So we had an increase in -- which is attributable to the new launches in new markets as well as new product launches such as Naked Ultimate and generally better sales conditions than last year. In terms of special products, we had an increase, which is thanks to the development of baby food and special products contracts in the sort of B2B channel. And they're going to increase in this segment as well. Moving on to distribution channels. So also here, we had a good increase in all the distribution channels with large scale, large scale, large retailers being the #1 channel with 61% of kind of [ weight ]. And this was positively attributed to new customers and also an increase, of course, in average selling price. And we had overall increase in the pasta and dairy products in this segment in particular. In terms of B2B channels as well as mostly in food service, we had a increase, of course, in our selling price as always but also an increase in demand, especially in B2B, we had an increase in bakery and special products segments. And in terms of private label, we had an increase in the pasta private label business. Geography, so as we mentioned earlier, the geography that grew the most was Germany this year. In Italy, we had an increase in volumes in the pasta and instant noodles and bakery sectors in particular. And we also had the additional new customers for the other categories. In Germany, we had an increase in sales volumes, especially in pasta and dairy sectors. And we also, as I mentioned, we launched instant noodles segment. So of course, we had an increase in that, which is -- which was thanks to both Naked and also the Birkel Minuto relaunch. In the United Kingdom, we had a 18.5% increase which is attributable to pasta and instant noodles for the most part. In the U.K., the instant noodles kind of growth was carried by the Naked Ultimate launch as well as some new relaunches of existing products. And we also launched the Ragu pasta in the U.K. as our own brand, Delverde. In other countries. Other countries had really good performance, especially in the Q4, in Q4 with an increase in the pasta and dairy businesses in particular. We had -- the countries that grew the most were Netherlands, Sweden, Israel and France. In the next slide you can see more of the increases by countries. So if you were looking at the countries where we did -- really most, with a sort of significant revenue -- revenue amounts by countries, so Netherlands, as I said, grew the most by 242%. And we had the total of revenue of EUR 6 million this year. Sweden, 137% and Israel 62% and obviously as you can see, we grew all around the world, especially in Europe. We also grew in Canada, U.S. and also in Israel. Now we move on to slide about EBITDA, in a bit, EBITDA and sort of the EBITDA margin. So we're looking at adjusted EBITDA of EUR 57.5 million in full year 2022, compared to EUR 58 million in 2021. The adjusted margin was 7.8% versus 9.3%. In general, if we look at the breakdown by business unit, we can see that bakery maintained more or less the same EBITDA margin of around 17.3% EBITDA margin versus 17.9% last year. And we also saw an increase in special products segment of margins of about 1.4%. So we had -- we went from 10.8% to 12.4% -- 12.2%, sorry. And this was mainly due to an increase in the sale of some B2B baby food products, which had a higher EBITDA margin than the average we had in last years. So and moving on, if we look at the results, we can see that despite a very challenging scenario, we were able to sort of maintain margins to a good level despite, of course, the dilution that was, of course, almost inevitable, in the increase in prices as well for the mismatch between the cost increase and then the sort of cost rebates to your customers. However, we are really confident that we will recover all the margins to normal levels in 2023. And as a matter of fact, in the first 2 months of 2023, we actually recorded an EBITDA margin of 9.45%, which is well in line and even above the 2021 levels. So we have good expectations for 2023. Now looking at the 2023 numbers, as we said in the first few months of the year, we saw an increase in our sales volume as well. So we saw an increase in milk of 15%, in dairy 5%, pasta plus 25%, bakery was plus 40% and instant noodles plus 15%. In terms of year-to-date, end of February revenues, we had EUR 126.7 million of revenues versus EUR 102.6 million in 2022 with an EBITDA margin, as I just said, of 9.45%. If we look at this result, we can say this has been particularly successful, particularly good because usually the first 2 months of year are very flat in terms of sales growth. So we can say the year has 2023 started with the right path of growth path. In terms of margin recovery, we'll see, we believe a sort of stabilization of margins at about 9% by the end of Q1, 2023 with the final sort of prices of the calculations that will be put in place in the -- that are being put in place in these ones. Now we move on to next slide, where we can see more about the free cash flow and sort of margin improvement by quarter. So as I just mentioned earlier, we are looking at the free cash flow conversion that we call the underlying free cash flow conversion -- free cash flow, sorry, which is EUR 16.8 million. In this case, we are neutralizing the net working capital impact because of the material change that we had in the net working capital this year to sort of support the latest round of CPI passthrough. And we -- in this case, so we had an extraordinary impact on the operating cash flow, particularly in Q4. And as I mentioned earlier, we will be seeing a normalization of this number. And in 2023, we're already seeing some good results now. If we look at the margins by quarter, so here, we have sort of recapture the margins that we had in the last year by quarter. So we can see that we had the lowest point in Q2, which is when we had the outbreak, outbreak wherein all the increase in prices being at the sort of beginning. So there, you can see that our margin was 7.50% and then slightly -- a slight recovery quarter-by-quarter until getting to Q4 where we had 8.24% of EBITDA margin, which is basically to show that the price increases have been implemented. And there's, of course, as I already said about, time lapse between dissemination of price increases and the acceptance of cost increases, which we had to account for in the first, I would say, 9 months of the year. Now we move on to next slide, which is about net working capital. Here, you can see more about what we've done in terms of net working capital. We're also working -- looking at the cash conversion cycle. So as a result of the inflationary environment we lived in 2022, we had to sort of invest in our working capital to account for the higher inventory levels. This was mainly due to buying larger amounts of ambient and long shelf-life raw materials to sort of account for, to have more room for lower purchase prices, so we bought more in order to pay a little bit less. And also higher receivables, we use sort of a negotiation point to have consumers kind of accept the steep price increase and have our increase in prices and be able to sort of set the margins. And for this reason, we have actually a shortened number of days in terms of cash conversion cycle, which went from negative 43 days to negative 9, which is still in our favor. So at least, however, we shortened it with the results. And this, as I said, was sort of implemented to help with the increase -- price increase rebate. And as well as the purchase of raw materials at good prices with shorter payment terms. And in general, as we said earlier, we will see a normalization in Q1 2023. Now we move on to M&A -- the M&A slide, which is quite interesting because as we mentioned, we have 2 new targets in pipeline at the moment. In general, we can see that M&A has been really interesting for the Newlat Food strategy for a few reasons. The first one being that interest rate level -- the interest rate level increase is less room for private equity activity. And also, the current credit market environment has less -- lower opportunity for heavily leveraged structures. So that kind of clears the deck for us, where an industry player like Newlat and because financial investors, we've seen in last months are looking at targets with higher growth profiles than the average traditional food players. And therefore, their interest has been shifted from this segments -- from this sector to high-growth sectors, high-growth companies as well. So I'll be finally seeing some sort of good synergies for us in this respect. So as we said earlier, we have 2 deals that we've -- recently been talking with the targets. And one is the -- quite a transformational acquisition in Europe with over EUR 1 billion turnover. And this company is active in different categories and has very good synergies because they had some very complementary products with ours, and these synergies are very, I'd say, immediately actual and realizable. We also have another acquisition, which is in the special products sector in Italy with around EUR 200 million in turnover. And with these 2 in line and with -- actually the one we've been working on for the past 1 year, 1.5 years, we can say that we have some really exciting opportunities for the next few months and we hope we can close 1 of these acquisitions this year. Now on to the last slide, which is about sort of the 2023 outlook. So the Newlat Food management is really focused and really committed in, #1, further price increases, so we are working on further price increases as we speak. And that will allow for a recovery of margins to more or less 2021 levels. We're also working on industrial efficiency and new product innovation plans. And we're just reconfirming our focus on the M&A arena and with the 2, especially M&A targets we have mentioned, we are really confident that we will be able to bring on something really interesting in a few months. So that's it for the presentation. Now we can start the Q&A.

[Operator Instructions]

Good afternoon, everyone. I am Arianna Terazzi from Intesa Sanpaolo speaking, can you hear me?

Yes, we can hear you. Yes. Yes.

I have a couple of questions. You already mentioned this topic in the speech but I would ask you to elaborate more on them. So first, in terms of outlook, we understand that the scenario is still tough. So you are not experiencing any kind of on the inflation side with the price. And if you could give us a clarification then on where does the recovery in margins over the 2023 comes from? Then on sort of the margins with reference to energy prices. Could you update us on whether you are planning to do some sort of long-term contracts at these prices? And then the last one, moving to M&A, in light of your statements and given the type of the potential transaction, sir, could you give us more color on this, the favorable rating and in doing that what are the effects on our financial structure, the finance -- financing are you thinking about and do you have that type of target leverage?

Okay. Thank you, Arianna. So about the general outlook and comment on the inflation, we could say, as we show in the presentation that the year started very, very well based on strong underlying demand in terms of volumes. And this I think is part linked to a general positive environment. And I have to say also, most of it is also linked to the first results we are getting from the several commercial initiatives that we started last year and that Benedetta show in details during the presentation. This is a general outlook, very positive, in all the countries and in all of the sectors. So there are no particular, have any particular issue in the portfolio. In terms of inflation, what we are seeing now is, first of all, a general stabilization. The positive news is that we are not seeing the volatility of last year. And I think that this is also visible in the preview that we made in terms of the expected margin recovery in the Q1 because last year, we suffer due to the fact that every week we experienced additional improvement and additional increase of cost that were a lot of -- there was a lot of volatility in terms of inflation. And this obviously didn't allow us to put in place the right size of investment. This changed this year in the sense that in Q1, we have been able to put in place the right size of investment already planned at the end of last year. And the result is, it was and is immediately visible in the margin. On this basis, we believe that in 2023, we can definitely come back to the margin of 2023 year before the start of the inflation wave that characterized the second part of '21 and the whole year 2022. And this means that also in terms of output we are also very positive in terms of growth because we still see -- we are still seeing slow underlying volume growth, together with the contribution from the price increase that we already implemented in Q1. About the M&A, we enter in 2 main process at the beginning of the year. We are obviously in an early phase of these 2 process, and we cannot share at this stage a lot of details for several reasons and in particular also because since we are in the primary stage of this process, we don't want to, I would say, maybe discover some process that we can use in the negotiations. But we wanted any way to make you inform and make you updated about the fact that M&A remain one of the most important area in terms of strategic area for the group, it's true that we are thinking about a sizable deal. But is also true that, in particular for the deal that we presented as a more than EUR 1 billion in revenues, apart from the sizes, there are a lot of synergies really visible that we can implement it immediately, that we can implement immediately. And this is obviously part of the very quick leverage that we have in our plan after this position. About the leverage target. You know that we have gone into the markets and we disclosed very clear covenants for the bond that remain strategic for the company. And I think that our action will remain substantially in line with the covenants that we announced at the time of the bond issue. But I repeat, even if the first look of the target could be, so somewhat would to be impressed by the size of the deal, I can tell you that there are a lot of synergies and the leverage would be very quick.

We have few questions in the chat. First one is from [ Gabriel Colominas ], who is asking what financial tools or sources will be used to finance M&A in case that any of the commented acquisitions are closed successfully during the year?

At the moment, we are comfortable with the support of the banks that are following the company and our partners, and we don't need at this stage for what we are planning any other source of financing. Also because I think probably the other source like, sort of the bond market or other areas are not interesting at the moment also in terms of momentum, in terms of pricing but we are confident with bank financing at the moment.

Okay. So we have another question, like Benedetta said, [ Mr. Ivan Perez], that is saying hello, thank you for the call. Two questions from my side. Do you think that the 2023 year-to-date growth and EBITDA margin figures can be kept for complete 2023 estimation or there was a specific situation getting this bigger than expected? And second question that you can find in the chat is regarding the possible big acquisition, how would you plan to finance these activities? Thanks, Mr. Perez for the questions.

Now about the last one, the combination will be the cash that we have available and bank financing. About the first one, we are seeing, as I said before, still a strong underlying volume growth. This means that, considering that we had in the first half already, a round of CPI pass-through with a contribution in terms of pricing, we expect to have also mixed contribution during the year. I think that -- so we expect to maintain a solid growth also this year, not only in the first quarter, but along all the quarters.

Yes. So I want to add something to the first question of Mr. Perez is that even despite the fact that we made all the price increases, you see that we had an increase even of the organic growth. And what I can tell you is that not only despite the price increase, we kept all the core customers, but we even increased the customer portfolio that we have in our company, as you see by the growth in all the countries. And for 2023, we are targeting even new potential -- new potential area like the Middle East and all and improve all the European market. So we can say that we see the margin figures can be kept for the complete 2023 year estimation. Mrs. Carboni, I think she wants to... Thanks.

The first one is the status on the integration of EM Foods. So what should we expect in terms of contribution for this year from the long-term supply agreement that you signed in the matter and that ramp-up of profitability we should expect and also the other side of the timeline of your investments compared with what they -- you're planning some additional CapEx on that? Second question, if you can elaborate on the performance of the bakery and special division in the last quarter. It seems to me that they were the main driver for this recovery of profitability in Q4. So what were the dynamics behind that? You have mentioned in particular for the special business, the contribution of B2B contracts. I wonder whether these contracts have an even split during the year or they had for example, kind of a one-off contribution in Q4, which we should be aware of going forward. Third question, if possible, is a breakdown of the 23% top line growth, as you've mentioned for the Q1 so far, how much of that is the pricing and pricing mix and how much of that is volume? And the last point, if you can update us on the expected CapEx at the group level? I remember that in one of past press releases, you were anticipating that potential plan of investing more for expansion of production capacity at some of your plants. So if you have taken any decision in this respect and what should we expect for 2023?

Thank you, Paola, about the integration of EM Foods, we started at the beginning of January. And we believe that this year will be a year of integration, we will have in 2023 around EUR 35 million of additional revenues. We are making, obviously, investments there to reorganize the company and the big contribution of EM Foods will be in line with the communication we made when we complete the acquisition is -- in expected for 2024. And the other question was about the performance in these 2 months of the first quarter. The performance is everywhere, organic in bakery is mainly due to some B2B contract that we signed. And I would say the one-off in this case is related to the fact that we start with this new contract, but it's not I want one in the sense that going forward, we will have this kind of contribution substantially for -- so until we keep this contract. And the in special products, we expect to continue to maintain this year-by-year and quarter-by-quarter improvement because this is related to the implementation step by step of the contract that we have with a famous pharma multinational corporation. We started -- so last year and the implementation of this contract is giving us improvement in terms of revenues and in terms of profitability because the margin of this product is generally particularly higher than the current profitability of the division. About volume and price, I would say that the split during the year was around 30% volumes and 70% price contribution. In the first quarter should be around 60%, 65% in terms of pricing and the remaining part in terms of volume. This -- it's an opportunity to highlight once again, the fact that it's not just a matter of price increase but there is an underlying business that is very solid, is very strong. We continue to get success with all the commercial implementations that we made last year. And we are absolutely so happy for these results that we hope and we believe that they will continue also in the next quarter. About CapEx in general, speaking to say that the CapEx of this year already includes some investments that we made, especially in the U.K., linked to the integration and the improvement of the efficiency of Symington's. This means that we do not expect going forward, on a yearly basis, a different level of CapEx to be a bit lower, but not higher than the level that we reported this year because on one side, we will not hold investments that we plan for the group between all the different plants and the different companies. On the other side, most of the investments that we announced in the past [indiscernible] are supported by government. And this means that we don't have a net impact on the CapEx spending. On the other side, I want to add that, for example, this year, we got some room to start several initiatives in other plants because, for example, we ended all the investments that we finished in the past years in Centrale del latte di, for example. This is the proof of the active management that we make on the CapEx to maintain a decent level of CapEx spending. But on the other side, we want to support all the initiatives that we have on the table to improve capacity in some case, to improve efficiency in other cases, et cetera.

One question to ask again about the energy contract that [indiscernible] kind of elaborate on that? How you have negotiated your energy exposure around 2023 and beyond?

At the moment, we didn't close any long-term contract for energy. We still have in place a long-term contract in U.K. that will expire in September. We are -- so waiting to have maybe a better clear view on the situation. Generally speaking, I have to say that most of the [indiscernible] that we experienced in [indiscernible] I think that now is no more pleasant because the prices are stabilized and in some cases, also materially reduced. So now we are -- try to find a view for the future and then we will think about maybe a long-term contract synergy but nothing happened at the moment.

If there are no more questions, we may end the call. In case any one of you has any follow-up questions, we're available via e-mail or by phone or however you prefer and we're already -- we're at your disposal is you have any doubts. So thank you so much for joining today's call and we hope to see you again soon. Thank you. [indiscernible]

Thank you.

Thank you. Thank you, everyone.