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

[Foreign Language]

Good morning, everyone. Thank you for joining -- being today for attending physically. And to those connected remotely, thank you for joining today's call on our earnings results for the year 2024. I'm Benedetta Mastrolia, I'm the Investor Relations Manager for Newlat Food. And I would like to introduce you to our speakers today. So just going from the closest to me will be Simon Harrison, Princes CEO; Giuseppe Mastrolia, CEO and Commercial Officer of Newlat Food. Our Chairman Angelo Mastrolia just give his introductory speech, and Fabio Fazzari, Group Financial Director. We also have our CFO, Dr. Rocco Sergi, who is sitting at the front. So before starting, I would like to make the usual disclaimer, so that this presentation might contain certain forward looking statements neither reported results nor -- sorry that don't reflect the company's management current views of future events and financial and operational performance. And these forward-looking statements are based on Newlat Food S.p.A. current expectations and projections about future events. And any reference to past performance of Newlat Food should not be taken as a representation of this or any indication that this will continue in the future, and this presentation is not an offer or a decision of an offer to buy new stock. So now we go on with the presentation. We go directly to the agenda for today. So we have 5 main areas. So the first one will be the financial highlights and the structure update on our group. Then we will have the usual results breakdown and analysis. We will go over deeper in this integration the future plan for Princes. Then we will head over to commercial. So giving you a commercial update. And finally, an update on our business plan and our future opportunities with the group. So now we move directly to the financial highlights. So this time, as we did for the 9 months results, we will present the combined figures, which means that the Princes -- because Princes financial year was ended in 2024 in March 2024. We had to combine them. So this is not a usual performance is the combined results from -- including Princes from the first of January of post-2024 until the 31 of December '24 and the same happens for the 2023 results for the comparison year. And this will allow us to shift the financial reporting period for Princes from 2025 to be aligned to that of Newlat 1st of January to 31st December. So going over to the next slide, we have the financial highlights for the period revenue. So I would like to say that we are really happy with the results. These exceeded our expectations and the guidance that we gave a couple of months ago. So really happy with the results, and we are really happy with the way that our management team has been able to develop and integrate the companies together. So in terms of revenues, we had basically a flat performance versus last year. As you know, 2024 was affected by a deflationary situation. So we had to lower our prices compared to 2023. That means that -- despite this, we were able to basically keep a good performance, meaning that we had some increase in volumes as well. Looking at Q4, we actually had a very good performance, both at new Newlat's stand-alone and including Newlat, CLI and all the other companies that are included within the group, excluding Princes, we had an increase of 8% -- 8.3% versus Q4 in 2023. And the same has happened within Princes. So Princes has actually had a very good performance of almost plus 6% in Q4. Looking at the early results, we had some categories that performed really well. So we have milk, which grew 6% versus last year, especially in the second half of the year. There, you also grew 5.2% grew almost 9%, especially in the U.K. Drinks also grew 5% and Italian, so all the Princes Italian products, meaning the pasta, sauces and olive oils and Italian legumes grew 2.4% year-on-year. So really good results. In terms of EBITDA, we actually -- we also had a pretty good result considering the situation and so considering the integration that's going on. We had an increase in terms of EBITDA margin, which is 6.4% compared to 6.3% last year, and we also had an EBITDA of EUR 177.6 million. And this is also really good in terms of the progression from the 9 months results. And just to highlight, as we said earlier, that these figures are in line with what we gave as a guidance back in November with the 9-month results. EBIT which, of course, is, let's say, influenced by the business combination income from business combination was really positive, and we had an increase of 10.1% versus last year. Same with net income, we had amazing growth of 5.3%. And compared to the 2023 results. But I would say one of the most striking and the most exciting parts of the business was actually the free cash flow generation because we had an underlying free cash flow of EUR 225 million, so really high, especially comparing it with the EBITDA result. And this is due to many factors. So one is -- as you know, here, that we have a good cash generation just as a business, but also because of the integration with Princes and the stronger sales being done on the net working capital position within Princes. So this led to actually -- to also having a very good improvement in our net debt. So looking at the net debt figures, we had a net debt, excluding IFRS 16 liabilities of EUR 246.2 million as opposed to EUR 332.7 million just at the end of September, so we had almost EUR 90 million improvement in just 3 months. Same if we look at the net debt, including IFRS 16, EUR 346.2 million as opposed to EUR 436.8 million at the end of September. So EUR 90 million, an improvement of EUR 90 million in just 3 months. Also looking at the net debt-to-EBITDA ratio, we have amazing results. So if we look at the one including IFRS 16, we had a result of 1.95x, which is well below the guidance that we gave the target that we gave a couple of months ago below 2.5x times. Now just to remind you who we are as a business today after the acquisition of Princes. So we are -- as we explained also with the video our Chairman said, we are one of the leading producers in the European food and business sector. We have 31 state-of-the-art facilities. So we are a very industrial of so heavy asset company. So we are able to produce much virtually anything that we have in our portfolio is produced by us, which means that it gives us also a competitive advantage compared to our competitors who sometimes need to resort to other manufacturers in terms numbers, we just said EUR 2.8 billion in terms of revenues, EUR 177.6 million EBITDA, a workforce of over 8,000 people and 31 plants as I just said. The plants are distributed as follows of 15 plants in Italy, where we have 7 factories making milk & dairy, 4 factories for pasta and special products and some milk as well, 11 factories in the U.K., which produce oils, produced, can foods, instant products and more and drinks and more. In terms of Mauritius, we have 2 plans in Mauritius just for the processing of tuna, so we are first of the biggest tuna producers, I would say, in Europe, for sure, I would say, one of the soft ones in the world as well, but in Europe, for sure. We have one production facility in Germany for German pasta, one in Poland for Oils, with a joint venture and then one in France where we produce home baking products. So looking at this week, you can see a bit of the breakdown of our channels as well. So we are mostly selling through large retailers, both through branded and private label products. we also have been increasing our share in the B2B partners channel that would be co-manufacturing, so producing for other companies that come through us, as I said, because we have a lot of potential in terms of production capacity. Normal trade, which would be traditional shops and then food service, which is hotels, restaurants, et cetera. In terms of revenue breakdown after the Princes acquisition, we've to being more present in the U.K. So have more or less half of the of the revenues are generated in the U.K. Then we have 23% in Italy, 16% in Germany and 7% in the rest of the world, but we would like to increase, of course, our exposure to international markets, especially through the new group assets and the new opportunities that we have of cross-selling our products worldwide. Then we go over this slide, which is what we have done and what we've been working on for the last couple of months trying to combine and not within just one strategic vision and for guiding our mission and our strategy in the next years 5 or 6 years or so. So we have come up with a purpose mission and vision, which will be applied to the whole group. Our purpose is making the right choices never tasted so good. So that, I think, explains it. Or our vision is bringing everyone together to enjoy quality food and drinks. Pretty straightforward. And our mission is probably producing authentic and affordable high-quality store capital essentials from across the world. So we have, as I said, an international vein. We want to export to many countries, and we are able to offer products that go from breakfast to lunch going for snacks and everything we can literally get to see a need in terms of later needs and et cetera. We have also found 6 strategic imperatives to reach our 2030 ambition. So one is unlocking our competitive edge as we had with the large group, we have many more opportunities across the group and being understanding our water contain understanding our ability to capabilities helps really proceed to and gain market share versus our competitors. Driving commercial value, which grows on an end with what we just said, leveraging our industrial know-how, also we just said. So we have a big asset of the assets of industrial facilities. And we have to recognize that much more potential to unlock this by using our current facilities, driving a winning culture among our people. So really infusing a people sector, we are a big business, a growing business and we have many opportunities to grow in the future and to be proud of who we are and what we do. That goes without saying that, of course, we operate sustainably and ethically. That is something we have to recognize as a business, there are missions and things you have to take into account. So we are really continuing to improve our position in terms of sustainability. That's something we've been done for the past few years. And then the last one is integrating and leveraging our group capabilities, which again after the printer acquisition has been I would say one of the most important focuses for the business as a whole. Then we have our values. I want to read everything otherwise it took to long, but distrain the headlines to the customer first always lead with integrity is parent and that what we grow boldly. I think this one is pretty consistent with who we are and what we've done to process and then performance. Moving over to the group structure, which I think will clear some ideas. So new latitude, but we will change our name legally on the 28th of April with the shareholders' meeting. So Newlat Food will be renamed new printing grouping 28 April 2025. Newlat Group -- Newlat -- New Princes Group/Newlat Food will remain the main company, and it will continue to have the same companies underneath 67.6% of Centrale del Latte d'Italia, which is listed, 100% of Symingtons 100% of Princes France, which is in EM Foods because we changed the name in the first of January and 100% on Newlat Deutschland. And then we have 100% of Princes Group, which, at the same time, owns 100% of Princes Italia. 51% of Princes Tuna and Mauritius, 50% of EOL so the oils company in Poland and 100% of Princes Foods BV in the Netherlands. Now we want to share some of the changes in our structure, let's say, in the last couple of months. So from the first of January 2025, Newlat Group new Princes Group has leased its assets to Princes Italia, so the ones you see highlighted. So its has leased all the pasta, bakery and special product sites as well as the past the employees under Princes Italia. So Newlat will remain, as I said, as itself, but Princes Italia will be the operating company operating pasta, bakery, dairy et cetera, bakery and special products, et cetera. Same with Symingtons and Princes. So Symingtons as leased assets to Princes Group. So Symingtons remains the legal owner of the assets, which have been leased to Princes and we remain the owner of the remarks and the brand. However, Princes is will be operating these assets and using the brands and also the employees have been transferred from Symingtons to Princes. Why is this? So we have some really good opportunities in terms of cash in. So on a stand-alone basis, Newlat Food/Princes Group will benefit from a really good cash flow from operating -- from the operating assets under these lease contracts. So you will see that we will have a cash in of EUR 10.5 million, which is it by a fixed income coming from the yearly rent of early end of EUR 5 million and then a 1.5%, so a variable on revenues, which will be around EUR 5.5 million coming to EUR 10.5 million as a result. And plus, we will have the full amount depreciation, which will be paid by the lessee to the lessor. So in that case, we will have an additional cash in of EUR 8.5 million per year coming to a clearly casing overall of EUR 19 million. It is important, of course, to highlight that Newlat Food/New Princes will remain and will maintain a strategic control of the group. Nothing will change in that regard. And as an owner of the brands, Newlat Food were mainly exclusive benefit of the potential value creation coming from these -- from the future development of the business. And same time near the owner of the tangible assets and the real estate. Now we move over to the sales breakdown and analysis for the period. So we are looking, as we did for the 9 months results, first at the Newlat categories and then at the Princes ones from next year, from the next reporting season, we will be trying to combine these into bigger categories to make it a bit easier to present and you understand the overall group. So in terms of pasta, we had an improvement compared to the 9 months 2024. As you know, we had a an impact coming from -- mostly from the decrease in average selling prices and also a slight drop in volumes. However, we had a good performance compared to the 9 months results. So we are really hopeful that 2025 results will be positive compared to 2024. So '25 results will be positive compared to 2024. For milk, we had a really good performance of plus 6% compared to last year, as we said, especially in the last 6 months, we had an increase of 64% and especially normal trade. So traditional shops where we had an increase of plus 36%. Ready meals, which is the Symingtons, so instant noodles and baking mixes as well improved compared to last year to the 9 months results and had an improvement of 3.6%. We will see a good contribution coming from ready meals in the next year because of some restructuring in the sales -- sales of the Symingtons, let's say, group and also thanks to new opportunities coming from repositioning of Naked, which is our main brand and Relaunch of new products such as TipTop Oats in the U.K. again. Bakery Products was -- had a slight decrease as well. It was pretty flat compared to the 9 months results, and this was affected by lower volumes and a lower average selling price in Italy. However, we see a stabilization in the last quarter. So hopefully, next year, we will see a positive result. Special products, as you know, we had ongoing investments last year, which lasted from the last quarter of 2023 to basically a couple of months ago. We've seen a good -- a very good improvement in terms of sales and volumes as well. So we had an increase of 17.5% as opposed to the 9 months results. And we also had an increase of 44% compared to the last quarter of last year. So really good performance. We should see more coming in from new contracts and new opportunities coming as a co-manufacturing business and also potentially from future opportunities, let's say, that we will have. We will share later on. Moving on to Princes. So the Princes categories are the ones you see here. So food, as I said, is canned beans, pulses, canned meals and soups. So the foods business was affected by a slight fall in volume because of the very challenging comparison base that we had in 2023 because the year 2023 was performing really well. And that was also affected by lower average selling prices, which were applied to retain some key contracts. However, in this case as well, we will see some good growth with some initiatives that we will see in the next slides in the commercial section. Drinks, this has been really good. I think period for drinks. So we had an increase of 5% year-on-year. And we also had a very impressive contribution coming in from new Capri Sun co-pack contract, which was signed last year and which started in October 2024. So in just 3 months, you gave us GBP 3 million in contribution, and we have more volume expected coming from this particular contract, but also some other contracts that have been signed in the drink business with a co-manufacturing level but to a private label level. For this, we had an impressive growth of almost 9% year-on-year. We had a good performance both in -- within Princes BV so in the Netherlands, mostly with B2B contracts in the U.K. both for industrial and also in -- within the large retailers area with the canned food business. But also in the EU because we've started to explore more opportunities in the EU after the acquisition. And lastly, Italian products -- no, lastly, sorry, on the second Italian products. So we had an increase of 2.4% year-on-year. So -- and especially good performance if we compare it to the last results of the 9 months, we had a in sales of the tomato products under the Napolina brand, especially also from private label and posted with a slight decrease in Olive Oil but overall really good results in terms of the Italian category. Lastly, we have edible oils, edible oils was slightly down compared to Last year because of an offset between the U.K. positive performance and a slightly weaker performance in Poland. However, we have, again, more opportunities coming in the next year. Moving on to distribution channels. So as we said, we have 4 main distribution channels. The large retailers channel had a good performance compared to last year because of the higher sales in fish and Dairy. B2B partners had a slight decrease because of some lower sales in some categories, such as pasta and special products because of what we said earlier with the special products investments and also some lower sales in food. But then that was mainly because of the pricing. However, we see a really positive performance in the B2B channel for the last quarter with a 3% increase year-on-year. Food service was slightly down, but we had a really good performance in last quarter, especially because of the milk and dairy business with a plus almost 15% increase. And in general, most of this channel, of course, as we said at the beginning, we're expected by a lower average selling price. We expect 2025 to be a much better performance because of the easier comparison base compared to the 2023 results. Moving on to geography. So as we said, we have 3 main countries and then the export channel. So all the -- again, all the geographies are the deflationary effect. However, we had some really good performance, nevertheless, in some categories within these market. So in Italy, we had a very good performance in milk, dairy and as we said, special products in the last quarter. And then we had some slower, let's say, delivery of the volumes in pasta and bakery, but again, this will be picked up in the next month. Germany was very positive, especially because of an increase in the sales of dairy. So with dairy -- with that and Italian products is also the smarts that we will see also with some opportunities coming next year. We've had a really good legal performance of plus 13%. U.K. was slightly positive. So in the Q4 with an increase of 1%. And -- but really good performance nevertheless because of the fish, especially, which I think carried, let's say, the growth. But again, we will see more growth coming in the next months. EBITDA breakdown by business unit. So moving on, we have again, split by Newlat and Princes. So looking at the Newlat EBITDA, we had a good performance in the year, especially considering the lower prices, we were able to retain most of the margins. In some cases, we even increased these margins despite the deflationary environment. So really good performance, for example, with pasta with 9.7% in margin. With instant noodles, we were up by 40 bps, so from 7.4% to 7.8%, which is the beginning of a revolution, let's say, in the instant noodles and instant products category because of the acquisition of Princes. And we have a really good performance in the dairy EBITDA as well with a 9.1% in margin. So also maybe worth highlighting that we had a good -- very good result both in Bakery products, so 14% in EBITDA. So slightly down, but still very good performance considering the environment and considering the lower sales. And with special products, especially if you think of the impact that we had from the ongoing investment within Ozzano Taro, we had a really good margin of double-digit margin anyway, of 13.1%. Moving on to Princes. To be easier, we have a less -- fewer categories. So with -- if we look at the results, we can say that there was a slight decrease in margins compared to last year, which was mainly due to the lower average selling prices. However, if we compare these with the 9 months results, we can see a huge improvement, a huge jump in margins compared to the 9 months results. So we are starting to see some of the, I would say, the effects of the strategy that has been put in place in terms of group. So we can say that the -- for example, if you look at some of the main categories, if we look at drinks, we had a very good recovery in margins compared to the 9 months of 90 bps. And that is because of the new contracts coming from manufacturing, especially Capri-Sun but others as well. In Foods, we also had an increase of 1.7%, so going from 7.9% to 9.6% margin. Again, this is showing an improvement compared to the beginning of the year because of the lower average selling prices. Italian products had a huge increase compared to the 9 months results where we had a lower EBITDA margin of 1.9%. We went up to 7%. Last year was 8%, but this is completely, let's say, in line because if we take into account some other things such as the provisions that were put aside last year of EUR 2 million, and we add that up, basically, our margins have remain stable or even increase in some cases. Then we had also an effect of -- in terms of pricing because of last year, we had sold some older stock, which cost less. And we are still seeing -- we are already seeing some impacts from the rationalization of our portfolio -- our customer portfolio in this case or our contract portfolio in this case. And then lastly for me is the net working capital improvement within Princes. So as you know, when we presented Princess and when we saw Princess, we recognized that there was a very good opportunity in improving its working capital position because we had a very positive net working capital of around GBP 400 million. So this was a great opportunity for us to generate more cash, especially when we compare it if you look at the top graph, you can see that the net working capital position of Princes was much, say, lower than the other ones. So that was really an opportunity to increase the days of payables outstanding to really work on the net working capital. And we can see that from the bottom graph that we had a huge improvement in terms of working capital days, going from 85 at the end of 2023 to 95, which was when we acquired the company in July 2024, going down to 54 days. So a huge improvement of 41 days in just a couple of months. So this was done again through some of the actions that were put in place at the group level, and we will have more on that in the next slide. So now I will move away and I will give -- I will introduce Simon as the speaker. So thank you,Simon.

Good morning, everyone. I'm Simon Harrison, I'm CEO of Princes. Delighted to be with you here today to share some of the key focus areas within our business. Starting with procurement which has absolutely been a key focus area for us over the last 6 months. We've centralized our procurement. It was decentralized previously. And created our central focus now on procurement. That's had some great benefits towards in many areas of the business. By centralizing our procurement approach, we've been able to leverage the scale the group and also drive some synergies and consistent terms across the group. So starting with kind of cost reduction. We've been able to approach -- take a group approach to our procurement contracts. That's seen more consistent terms applied to all of our key suppliers. And through leveraging our scale, we're starting to see lower cost of goods coming into the business, which certainly benefits us, but also benefits our customers in our private label contracts. The other thing we've done is start to use the data and analytics we have much better than before. We have a SAP system to manage our procurement activities. And through that, we're able to analyze where we have some risks or opportunities in our supplier strategy and derisk some of those areas where we have perhaps overreliance on any one supplier to have some contingency approaches to make sure that we don't have carry too much risk on our supply of inbound goods. So it's been really useful. The other area we're really focused on within our procurement team is around sustainability and innovation. By having a more strategic approach to our procurement function, we're able to talk to our suppliers about how they help us reduce our carbon footprint. Interestingly, about 90% of our carbon footprint comes from our supply base. So working with them really carefully and strategically is probably the best way and quickest way that we can get towards our own targets. So a real big focus on procurement, centralized, leveraging our scale and driving through some of the commercial benefits that Benedetta just shared. So a big focus for us over the last 6 months and a continued strategic focus on procurement moving forward. The other area of big area of focus for us is operational excellence. As Benedetta said, we've got 11 factories in the U.K. And actually, we produce in our factories almost everything that we sell. We're not a big trader unlike some of our competitors. And we see the fact that we own our end-to-end supply chain has been a real key competitive advantage for us. Why is that? Well, I was just to focus on our cost base. the fact that we make everything we sell and deliver everything we sell, gives us total cost ownership, and we can really drive efficiencies through factoring excellence. Using it does is it allows us to focus on service, so as a big private label supplier, service is one of the #1 priorities of our customers. The fact that we have focused on our own supply chain allows us to really focus on delivering on time in full our customers, which helps us retain contracts and win new contracts moving forward. And of course, having a real focus on operational excellence allows us to improve our quality levels. That's good from our customers' perspective. We're right first time more than ever now with our focus on operational excellence, and it's good from a cost avoidance we waste less products in the production cycle. So real laser focused on being a manufacturer, and you've seen in the plum on the page that Benedetta shared leveraging our industrial know-how is one of the strategic imperatives. And this is why because as a large manufacturer of private label, operational excellence has to underpin everything we do. So a continued focus on this area. We also are focused on growing our top line. Now that's very, very clear through our business. We have to get our top line into an accelerated growth. Now part of the way of doing that is just to win more within our core categories. And if you look at our kind of go-to-market model on the left there, the left-hand side of that chart is really around our existing product categories, either on the bottom left, winning more share of the existing product categories with existing customers or selling our existing products to new markets, which are easier to do now as being part of the new Princes Group. So the left-hand side of the chart is very important to us. But the right-hand side of the chart is also very important. We want to diversify and innovate to expand our portfolio. And that's very important for the long-term future of our business. And we have a plan to do just that. We've identified 5 category drivers that we think we will focus on diversification and innovation. We want to expand our participation in Italian food products. We want to look at new pack formats and modernize our food business, our Tinned food business. We also want to move away and diversify a little bit more within our seafood business away from just standard tuna, for example. And in drinks, we only participate in a small number of consumption occasions. We know there are more occasions out there for our drinks business that we can take advantage of. And then finally, entering into new segments, complete new segments. So there are drivers. That's what our team are absolutely focused on in terms of driving innovation and diversification. The good news is it's not just a plan on a PowerPoint chart. We have a very precise and very granular plan to deliver across those 5 areas. Importantly, when you look at those 5 areas, that will grow significantly our top line. We estimate there's about GBP 110 million of additional revenue from these 5 areas of innovation alone. I won't run through all of them as much as I'd like to because I'm very passionate about them, but I'll just pick a few just to dwell on. Maybe starting with win in Italian. At the moment, we are installing a new capability into our tomato plants in Foggia to make cooking sauces to complement the range that we sell. We obviously already sell pasta. We sell Tinned tomatoes. We sell olive oils, but cooking sauces is a big gap in our portfolio. So investing in providing that capability will completely round and complement our Italian food portfolio. Maybe on the second one on ambient foods. Most of what we sell in our Food division is tin food, and that's very successful for us, but there are other opportunities outside of tin food using the same ingredients. What we found quite interesting is when we came together as part of New Princes is that within the Newlat Group, they had capability in Symingtons in some interesting pack formats. So pouches and microwavable pots. So we're starting some trials already. In fact, those trials are underway to look at what of the products, the pulses, the beans, the peas, the pulses that we sell in tins could be sold in alternative pack formats. And we started some really interesting work around that to modernize and expand our packaging portfolio. And then maybe I'll skip just to the last one, which is new category entry. Again, been great to be part of this new group to see some of the capabilities that we have within Newlat. So categories such as baby food, which Newlat has been extremely successful in, but we're starting to look at, well, why couldn't that be sold in the U.K. as well. So looking at new category entries for Princes as well. So hopefully, what you can see is a very precise, granular detailed plan to drive innovation alongside winning our core market share. But we need to win our core market share as well. And so what are we doing about that? Well, one of the things that characterizes Princes Group is the large amount of private label or customer owned brand contracts that we have. They're very important for our factories. Our factories are very big, high-volume factories and private label gives us that scale in our business. Historically, those private label contracts have been quite short and both ourselves and our customers spend more time renegotiating those contracts than talking about how to drive value for us and our customers. By expanding the terms of these contracts and moving across multiple categories, it puts us in a very different strategic partnership with our customers. By having a contract that spans multiple years, it allows us to do a number of things with those customers. It allows us to talk about recipe formulation. How can we maybe either add new value into a recipe or take cost out of a recipe? Packaging, what can we do about light-weighting packaging to really help with our customers' sustainability objectives. So by having these longer-term contracts, it works for us as Princes. It gives us stability and security, but it works for our customers, too, as it allows us to move to more value-added conversations and strategic conversations about developing their business with them. And we're doing that both across the U.K. and our European customers. Maybe the final thing just for me to update you on, and Benedetta mentioned it earlier, is our drinks business. Our drinks business, if you look back over the last 10 years or so, has been quite a volatile and unpredictable business. So we've won contracts and lost contracts. So we started about a year or so ago reevaluating our drinks business and the strategy behind it. And we made some key choices. We decided not to prioritize our own brands competing against global powerful drinks brands is very difficult. So we decided not to really focus on owning our own brands in drinks, but rather than that, focus on manufacturing other people's brands. So we started to talk to many drinks manufacturers and brand owners about them outsourcing their production to us. The benefit of that is these are typically very long-term contracts. We lock in together as a partnership. And we had some great success. The most notable success very recently is Capri Sun. Capri Sun is one of the world's biggest children's drinks brands. And for many decades, those Capri Sun pouches had been produced by Coca-Cola. As of last year, they moved their business from Coca-Cola to Princes. And we've installed 4 production lines, 2 are operational right now and started up in October last year. And the other 2 lines go live over the next 2 or 3 weeks. This has been a huge success for us. It utilizes our factory in the north of England, where we had spare capacity and spare space. And it gives Capri Sun, our partner, a really focused and invested business partner in Princes. So it's worked for both parties. Outside of manufacturing people's brands, we continue to focus on private label and really look at how do we create more value add for our private label customers. And we're doing that in a number of ways. Firstly, we're investing in some new production facilities at our juice factory in Cardiff. We're putting in some new production lines that will allow us to produce more premium and differentiated packaging. And then secondly, we're looking at different occasions in drinks that we don't currently participate in. So that could be functional drinks. It could be low or zero alcohol drinks, looking for new opportunities to work with our retail partners on expanding our private label drinks business. So hopefully, a bit of a flavor of some of the key focus areas for Princes. I'll now hand to Giuseppe to talk about our commercial strategies.

Thank you. Hello. Hello, everyone. Thanks, Simon. I was really exciting. So now I will speak a little bit about what is the commercial update, what we do and where we see the synergies. What that I want to highlight is that I've seen that thanks to Princes and our integration between Newlat and Princes, we are working a lot on integration and innovation. And I will take you through all these points that we are trying to optimize between the company. So first quick win that we have done is the integration of Napolina. Napolina was sourced by Princes from a third-party manufacturer. And from July, we were able just in 3 months to install the machine, starting the production and deliver the products directly to Princess U.K. So it was a really strong success. And we are really happy and we want to grow in the Italian business, continuing to be the #1 Italian brand on the shelf, Napolina. So we are now working on new product development. As Simon said, one of the key factors will be the integration in the production facility of Foggia of the sauces product that are complementary to our current portfolio, adding new opportunity for the current market, but even to be expanded to other important markets. So this was a really huge success. You can see here some of our new product development projects and what we want to increase as our capabilities. Okay. Another quick win. The first 2 slides are a quick win we have done in the last months is the integration of Delverde into our German portfolio. As you know, in Germany, we have a leading position in the pasta business. And so it was immediate for all the large retailers to accept us as a supplier of tomatoes as well. We will be in the stores now in a few weeks. With the launch of 5 SKUs, mainly Tinned tomato, concentrated tomato and passata, and we are already listed in the major retailers. So we will have now the first challenge in the supermarket, but we are sure of the great success. And I think the commercial strategy behind that is really well structured and will take us to hopefully a good win. As you can see, Germany for us has been in the last years always growing at an average of plus 4.5%. And now we are implementing a new warehouse to enlarge our portfolio, pasta, tomatoes. Now we are talking already about tuna and all other segments that we have in our portfolio. So it's really exciting. Then talking about Italian products. In Italy, we are really strong in the bakery in the milk, as you know. So we are now working on innovation and sustainability on our bakery products. As you can see, one of our main products is the Crostino Dorato that we sell under the Delverde brand and our rusk in which we are both in the top 3 producers of these 2 categories. So we made a packaging innovation with 100% recyclable packaging on Crostino. And as well, we are on our way to do it with our rusk business. As well, we are investing in new packaging lines in the rusk business to improve our offer in the next years. New product development, we already developed -- we talked about 2023 investment. We already developed several products in our new oven we installed in the factory of Ozzano Taro in which we have several new potential and strong projects, of which now we launched the new Sfoglie that is a growing market in the bakery business in Italy. NPD milk. Milk, we have a lot of products of new product development. But as you see, we are working a lot of new trends. So you see all the Barista Special, for example, the lactose free products are increasing in protein -- high protein products. We have milk now launched with 70 gram of protein on 100 gram of product and on healthy snacks as well. So we will be the first on the market with Kefir with a top hat that contain and add some cereals to your Kefir yogurt. So it's -- and of course, the last one is Coffee plus milk, so double espresso, so double shot espresso and triple shot espresso that are really famous and are becoming more and more popular even on the Italian market. These are some commercial updates and some -- just to show you what we do in the U.K., our Branston is the brand of beans. I would say it's one of the best -- is one of the best brands in beans in the U.K. So I'm showing here some activation that we are doing in the stores, and we see an increase on AWOP in the stores that we want to do, and these are some applications we are doing on the U.K. market. Talking about fish that we produce in our factories in Mauritius, we have 2 main brands in which we are market leader. So Princes is leader in Holland and the U.K. So together, Princes and Statesman are #1 in Holland and Princes is #1 in the U.K. in terms of volumes. We are getting Tuna shoppers to prefer Princes versus the private label. So what the retailer ask us is to improve our brand strategy in a way that we can sell much more brand compared with private label. We are doing that. We are improving all our quality, and we are improving our shares in U.K. In Vier Diamanten, there is a really well heritage brand in fish in Tinned Tuna. We are market leader in Austria. And of course, we are looking to new opportunities in other markets in the DACH geography. Oils, just to show you, we are activating influencers campaign and TV ads on Crisp'N Dry was already done last year was really successful. The uplift of the sales was really strong. And so we are willing to let the consumer pay more for the brand compared with the private label. And we are in a good way, I would say, to do that. Then we have some new opportunity and new innovation that we are doing really important in the instant food. We are not -- we can't share what we are doing, but now we are relaunching Naked totally because it's -- now we analyze and we are following new trends and evolve the brand positioning. So the brand will be positioned in a new area of this category and the retailers are really willing to sell those products. We already listed in the major U.K. retailers. And the same is done with Mug Shot, where we have -- we are trying to increase our penetration and increase the number of buyers per trips. Minuto that is our home baking that we produce in France is the brand that we launched in Germany last year, and we were awarded Product of the Year, and now we are trying to optimize on that. Now what's the -- on these 2 segments, instant food and bakery products, what we want to do is to enlarge the portfolio to all our commercial branches, Italy, Germany, France, Netherlands, Poland to integrate everything and try to sell as much as possible on these brands in the European market. And then just to show you a little bit what we do in Italy, some consumer advertising, some outdoor advertising and some things that were done in last year. And some -- we made some good -- I'd like to underline, we made some good charity for hospitals and for babies last year in Firenze, thanks to Mukki collaboration. So there's a lot that we do even in CSR. Just last slide from my side. We are really strong in the shopper marketing. So what we want to do, we want to be present where the consumer makes their choice. So that's why we are investing in the best and the more high performance and ROI marketing that we can. So on the place where the consumer make their choice. So as you can see, our shopper marketing team is really active to be persistent on the shops and on supermarkets to let the consumer be attracted with good offers and good presentation of our products. So that is everything from my side. Now I leave the stage to Fabio Fazzari, and thanks a lot.

Good morning, everybody. Thanks to be here and also thanks after one hour presentation not to leave the room. I'm -- we start now speaking about the future, about the numbers that we plan to get through the strategy that Giuseppe and Simon explained to you before we plan to get. But before to speak about the future, I'm very proud to summarize what happened in the past. That is very important because sometimes it seems that we have exciting and challenging target on the table. But the reality is that this happened also in the past. And fortunately, we achieved this target. I want to start when 5 years ago, in this building, Mr. Mastrolia, Giuseppe and Benedetta rang the bell with the IPO of Newlat Food. At that time, the company was a very small company compared to today with EUR 321 million revenues and only EUR 28 million of EBITDA. During that presentation, Mr. Mastrolia said that we aim to reach EUR 1 billion revenues in the medium term. And today, we can say that it was a good plan. So we were able to reach that target. But in these 5 years, a lot of things happened. First of all, immediately after less than 6 months, we made the first acquisition was Centrale del Latte d'Italia. CLI reported at the end of the 2020, an EBITDA of EUR 6 million, while at the end of 2021, the EBITDA of the company inside our group was EUR 18 million. In August 2021, we made an important acquisition in U.K. was the first important step. We acquired Symington’. In 2 years, the revenues increased to EUR 625 million, and the EBITDA got EUR 58 million. But it's also important to highlight that in 3 years, we got a 55% increase in the EBITDA of Symington’ stand-alone, thanks to all the initiatives that we put in place on the cost base on the commercial side and the integrations with the our part of our structure. We face difficult years considering the strong inflation waves that impacted all the players, not only in the food business, but in all the businesses in 2022 and 2023. Despite that, in only 6 months, we have been able to get again a margin above 9%, recovering all the temporary impact that we needed to face considering the strong inflation impact. And in 2024, we got the very important step with the acquisition of Princes Limited, our revenues are at the end of 2024, EUR 2.8 billion. Our EBITDA, EUR 177 million. This means that exactly 5 years after the IPO, we increased revenues by 750% and EBITDA by 550%, a good, very good results that we hope to replicate in the next 5 years. Another important point I want to highlight is the feeling that the group is creating with the market and also the strong answer that we are receiving from the market. We made in February the second bond issue of the Newlat Food history. At the beginning, our plan was to issue EUR 300 million. It was a challenging target because last time, the issue was EUR 200 million. So it was EUR 100 million more than the bond issue we made in 2021. Fortunately, after only 1 year -- after only 1 day of trading, we closed -- we collect all the EUR 300 million, and we decided to reopen for an additional EUR 50 million that has been collected in the second day. So we are really satisfied for the answer that we received from the market because this means that this appetite could support further the liquidity also during the trading days of the bond, but we are also very, very happy because this issue allow us substantially to reduce materially the cost of debt, the average cost of debt, considering that we reimbursed fully the acquisition financing and it's also important for the higher flexibility that we reach because now the full reimbursement of this EUR 350 million is bullet after 6 years in 2031. This will allow us to have a lot of flexibility for additional strategic step. And this is what we expect for the future. This is the slide that we presented last June. Compared to that date, we can confirm what we expect on the revenue side, supported by what Giuseppe and Simon explained before, product innovation, increase in branded product sales contribution on the total revenues and increase of the average duration of private label contract. These are the main 3 pillars of our strategy. But on top of that, most important, the fact that we continue to look for external growth and our plan through acquisition is to reach EUR 5 billion revenues in 2030. The EBITDA, the target was a bit improved versus the previous target announced last June. And the driver for the EBITDA remain the delivery of the integration synergies. Part of that I'm going to show was already achieved, important saving in procurement that we plan already for 2025 and the operating leverage. On the net financial position, I think that what we delivered in 2024 obviously support the confirmation of the target we have, and we expect to reach 0.5x net debt on EBITDA already in 2026. While in terms of free cash flow, in 2030, we expect to reach EUR 170 million without any working capital contribution. This is just for the operating activity. Starting with the revenues. So it's clear that this big improvement that we expect on the profitability will be driven by several different actions that we already start to put in place. And just to show you what we expect for this year in Princes, this is -- so the movement of the EBITDA level in Princes. You can see that on procurement side, on price mix, on direct material deflation, we have a lot of drivers that could materially improve the result for 2025. This is a very important chart because it's a summary, first of all, of what we expect in terms of strong cash flow generation and the leverage that obviously is supportive for the M&A activity that we aim to do in the next months. And the second chart is very important to show that we already start after 6 months of the acquisitions to go out from the J card effect on the return on capital, and we are still growing with the aim to reach the 27% in 2030. This chart is very important if compare with this one, the value map that substantially summarize what is happening in the food sector, Europe, U.K. in terms of return on capital employed and the valuation of the company. If we consider the return on capital employed that we expect for 2025, it's clear that the valuation of Newlat Food should be more close to the 10x EBITDA than the valuations that we have today into the market. And this substantially is to support, I would say, investors that the stock is still a good opportunity with a lot of potential increase in terms of market valuations that at the moment is not substantially considered by the market. The other target also is very important because I like that our aim is to have in 2030, more than EUR 1 billion cash available. This means that along the period of time of 5 years, we have a lot of flexibility to go on with additional acquisition. And this is the chart that substantially we are very proud to show you after 6 months of the acquisition of Princes because despite this big step, we are ready and we are already involved in several discussions on the M&A side. The first one, it's an acquisition that we hope to close very soon. I think that all the newspaper, even if I don't mention it, but all the newspapers spoke about this opportunity, and we can confirm that we are inside this deal. The other are opportunities on which we are already in discussions, especially in the B and the D side. And as you can see, are important milestone, not only to further diversify our portfolio and our platform, but also to continue to grow versus the target of the EUR 5 billion in 2030. To conclude, 2024 guidance we gave is achieved as we explained, and we can confirm what we told you at the end of the 9 months result as a guidance for 2025 with more than EUR 2.8 billion of revenues and EBITDA between EUR 210 million and EUR 220 million. On the consolidated net debt, you can see that we are very close to this target and probably we expect to improve further. But all in all, I think that we are fully satisfied and we can confirm all the aims of growth that we announced in the past month. Thank you.

[Foreign Language]

Yes. Just to clarify. We will take the questions coming from the room first, and then we will open the questions coming from the online to as well. So if there's any questions coming from the room, please. Go ahead. I think we have mic there. So you'll be able to answer -- to ask your questions. Thank you.

[indiscernible] Canaccord Genuity Agri-Food analyst. Obviously, you talked a lot about white labels. So I was wondering -- and now this is a big part of your business. I was wondering how much...

About 50% of all the total revenue.

Yes. So I was wondering if how much CapEx you need to kind of implement and increase the production capacity or how much of the capacity at the moment [indiscernible]?

Capacity is very important. The CapEx is very low because of the in particular, Mitsubishi to invest a lot before our acquisition. In fact, we buy the very factory sector in a very good condition for growth without a particular investment on the CapEx, okay. Maybe Simon to confirm this.

Yes, absolutely. So private label or white label is still a growth opportunity for us, but we're very clear on where we have existing capacity in our factories. So whilst our factories are relatively full, there are certain lines that have capacity or there are certain lines with changes in shift patterns can release capacity. So we have headroom for growth without any further CapEx through better line utilization or better shift patterns so that that's our first priority is to fill the capacity that we already have.

Maybe I want to clarify that our strategy is very different from many multinational corporation because in the last the multinational corporation to see they invest on the factory on the product capacity. Our strategy is totally different. We buy the big capacity to produce the product we buy the factory. In this situation, we believe we are the main company in Europe with a big, big capacity to sell the product to our customers with brand with product level of B2B. Don't assist at the moment, the capability producer company in Europe. We have this big portfolio to capacity offer from our factory, not just brand.

And obviously, maybe a question for Fabio as well.

I would like to add one thing. It's very important on what Mr. Mastrolia said because multinational corporations try to have a different strategy because for the management, it's very important to improve in a short period of time, the return on capital employed. So it's very easy to improve the return on capital if you don't have assets. What I want to highlight is that what we are trying to do is totally the difference. So to improve the return with a lot of assets, real estate, factories, a lot of assets.

We buy the factory, we don't sell. This is -- that's very clear.

And also maybe also on -- also, you're sitting on a part of cash now. Are you thinking to do any buybacks or any dividend payments anytime soon? Obviously you didn't mention anything.

Honestly, like main shareholder, maybe also for me is interesting this is. But at the moment, we wanted to create value for to grow. the next 5 years, excluding the dividend because I believe we create more value with investment. In any case, we have a very strong activity on the buyback. This is indirect activity to create value for our shareholders.

On the cash side, because I want to get these occasions to clarify because I know that investors are always focus on the right balance between debt, between cash and whatever. So it is most important -- it is very important to understand the strategy that we have. And I want to highlight one thing. If we didn't have the portion of cash that we had in April, May last year and sometimes someone say, but why you keep all this cash in the balance sheet, it would have been impossible to buy Princes. So if you have a strategy so focused on M&A, it's very, very important to have this kind of flexibility. Otherwise, it's impossible to think about these kind of deals.

Paola Carboni from Equita SIM. I have a few questions. The first one is about the impressive job you made with working capital, especially in the last few months to understand to what extent is this sustainable if there is maybe further room on some of the main lines? Then I have a second question on the start of 2025. You mentioned a good start to the year with a positive trend in revenues. I don't know if you can give us more color on that? And also, what are you seeing in terms of the pricing environment in your main markets? And the last one is on the synergies. You had guided for EUR 36 million. We understand that you are well on track with your plan, but just to have an idea where we are, let's say, in this total EUR 36 million up to now. So what further room is left?

Our answer about the sustainability is on this data. This is comparable. We have the space to improvement in the future the cash because we remain at the moment, with 85 days positive. It's correct 54 comparable, you see the competitor like neighbor, like Premier Food is a negative. This is a normal situation in general of the company. In fact, when we buy the Princes Group, the main focus in this -- there are some people know this. I see immediately the Japanese approach is to pay very short term, and we expect the 60 days coming the payment from customer. This is not in line with the market. We have the space, I believe, about plus EUR 100 million in the next 6 months. to balance to net working capital is totally sustainable because we don't have any stress with our supply. If we imagine in 2020 to Princes Group to give approach with some supply. I pay immediately because please you give me more discount. This is a Japanese approach for. This remains as when the interest rate to change. Now this is approach when the interest rate is 0. But they maintain this approach is not in line with normal market. This is my -- the other question, maybe I don't remember Paola?

[indiscernible] The pricing environment?

The start of the year was satisfied. I can say that it's absolutely in line with the expectations, and we don't have at the moment any particular pressure on the price.

True. The first 2 months is particularly strong in Germany, in also Italy for main business, also in some business in the U.K. We have -- the first 2 months is a very, very strong start with the volume with the revenue. At the moment, we have all -- the feeling is very positive.

[indiscernible].

At the moment, we believe we have in this year, the strong put in place all synergy because we started with the new organization, the integration. We have a very strong synergy regarding different aspects to integration the Princes Italia with the rest of the business in Italy to eliminate many overlapping costs. And we have a very positive fiscal impact because, in fact, we have the Princes Italia have a very good situation regarding the previous losses. And also in U.K. with Symington, we have a very -- we eliminate many functions because, in fact, when you make the merger with the 2 entities, you don't need the -- for example, on the ITC system with the first of the January with integration on the subsystem on Princes Italia, all our system from Newlat. In fact, we eliminate one total cost on the ITC system. This have an impact only on the ITC system, EUR 4 million every year, also the figure are the people to involve in accountability to general service for -- on this year, we believe we have a very, very, very strong synergy we have on the table to registration in the next period.

Arianna Terazzi, Intesa Sanpaolo. I have a follow-up on net working capital, in particular, in inventories. We know that base on inventories increased. So I'm sorry to see if I stress the point what I was wondering, it is related to the centralized procurement policy. Could you -- we have more granularity on that?

No, the situation of the inventories is just linked to the seasonality in the sense that in the 2 bulk at the beginning fiscal year 2023, this is the end of March 2023 and July 2024, while December 2024 include substantially the full season of tomato, for example, also in we have a seasonality that create a peak of inventories in this period and going forward with the sale of these productions that are tomato is one shot of production during the year. Obviously, we will have a decrease in inventories. Inventories is an area on which...

In general, this contract, we don't have the fixed price. We have the open book approach maybe to please, you're explaining the model.

Yes, absolutely. So we've extended the length of contracts the strategic partnership so that the contracts are not being tendered continuously. But we have a very flexible approach in terms of how we manage the commodity price changes. we have a very different approaches from fully open book transparency, to track commodities and we have fixed windows within each contract when we agree new pricing for new season or anything substantially changes. So whilst the relationship is over a long period of time, we still have a very flexible approach to how we pass on either inflation or indeed deflation in those fixed windows.

Are there any more questions coming from the room? Or should we take 1 or 2 questions from the online tool -- so we just have 5 minutes left. So I'll read a question, which says, could you provide more details about the acquisitions you're currently negotiating, particularly any that involve tuna or seafood category?

No, the acquisitions that we presented in the last slide are not on tuna and fish area. for now because, obviously, we can -- we are fully open and we will -- we can consider also on this area. But at the moment, not. I think that, generally speaking, this could open us to new sector in which we are at the moment, not present, but with important synergies with the sector in which we are playing. It could be a big opportunity to reinforce our leadership in pasta and in baby food, as we said before.

Okay. So are there more questions coming from the room? Perfect. So we finished right on time. So thank you to everyone for coming over, as I said, and thank you for connecting to the online tool. So we will have a lunch being offered just outside the room, and we will see you next week. We'll be at the STAR conference next week, 25th and 26th of March. So hopefully, we'll see many of these faces again next week. Thank you. And any questions, let us know. Thank you.