Orsero S.p.A. (ORS) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Orsero Full Year 2021 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Paolo Prudenziati, President of Orsero. Please go ahead, sir.

Hi, everybody. Good morning. Before I pass the word to Mrs. Orsero, I just would like to say a couple of words. Of course, we are pretty much happy about the results and the future expectation of the company. But let me draw your attention to one item, which is not strictly correlated to the operation. It's very simple. It's our communications side. In a way, it's a little bit low profile comparing with other companies. We do not sell dreams, but we have proven over the years, we make things happening. And this is particularly -- we're particularly proud about this. Now let me pass the word to Ms. Orsero about more specific things. Thanks.

Good morning, everybody and thanks for coming. Since Paolo has just said that we are very pleased that here having delivered extremely positive results, that even exceeds the 2021 guidance. All economics are improving compared to last year. Total revenue up plus 2.7%. Adjusted EBITDA increased to EUR 52.9 million, up plus 9.3%. Net profit of EUR 18.5 million, plus 50%. Net financial position of EUR 84.3 million, even having made a significant investments. On the distribution side, we had strong sales, plus 1.8% versus 2020 and plus 5.2% compared to 2019. Unlike volumes are slightly lower than last year, but more than balanced by the price mix effect. The fresh cut market just recovered, we have over although performed the market trend. And according to recent data, we established ourselves as Italy market leader with a 30% share. Talking about profitability and distribution, we have seen that some fruit campaigns have normalized their returns after the outstanding results of 2020. The adjusted EBITDA margin slightly declined settling itself on 3.5%, which we named a very good performance. We feel that we have achieved good stability in our core business, and we believe to be well positioned for further organic growth in the medium term. On the shipping segment, we have reached an excellent operational and economic performance. Revenue increased by 9%, thanks to growing carried volumes and better freight rates. Adjusted EBITDA margin went up to 23.5% with an increase of EUR 6.7 million. We believe it can be more evident today as the vertical integration of our bananas and pineapples business with shipping is a real competitive advantage. On the one hand it's a protection for our core business, while on the other hand, it's a cash generator to support growth. We believe that our strategic plan is gain through it, and these results give us confidence in the achievement of the ambitious targets affected for 2022, even in the unpredictable moment we are all -- we going to see us. Let me say something about the first month of this year. Up to now, the distribution volumes are substantially stable and prices are rising quite every week in response to the increasing cost pressure even if with a temporary lag. The shipping is performing according to the forecast. On the bunker subject, we can say that we are pretty covered. First, our third-party customers are all covered by BAF clause. And second, about 50% of our consumption is covered at accretive conditions. Like everybody has, we are monitoring the ongoing geopolitical and economic situation. However, it is difficult to predict today if and what impact this may have on our business. Obviously, if there should be any deviation of the group result from the guidance in 2022, it will be promptly communicated to shareholders. Now Matteo will continue to the presentation.

Thank you, Raffaella. I would like just to, let's say, go deepest on some figures, because Raffaella gave a really wide and complete explanation about our figures 2021. First of all, I would like to highlight the comparison between the guidance 2021, that we reviewed a couple of times and the actual figures 2021. On sales side, we were helped in the last quarter by the price effect. Actually, we had a big boost on the fourth quarter in terms of sales. This happened both because 2020 fourth quarter was really affected by the third wave of COVID, where we actually had lower sales and the mood of the consumers was really low in general. On the other hand, because in December, we started to feel the cost pressure, the inflationary pressure, and so we were able to start to put the price higher. So this is the main effect on sales, and that's why we beated our guidance on values. Adjusted EBITDA is over our guidance, specifically thanks to the better performance of the shipping activities, then we will go deeper in the analysis of the EBITDA between one business unit and the other. Net profit is the combined effect of the better profitability in terms of EBITDA and the better tax regime we adopted beginning 2021 on the shipping activity, then we will be focused on that later on. CapEx wise, we are slightly over. The main effect -- the main reason why we are slightly over is that during the year, we decided and we had the opportunity to optimize our operations in Portugal. And actually, we dismissed our warehouse in the North of the country in Oporto. This -- let's say, this mission comes with the enlargement of our operation in Alverca near Lisbon. So we decided to speed up this investment that was already planned. And given the fact we had some cash-in even with the selling of the warehouse in Milan that actually was planned within the guidance 2021, we decided to speed up some investment plans even in France and Spain. Net financial position is probably the figure that we have to better analyze. We tried to put some notes. As you remember, we reviewed our guidance in -- during 2021, even regarding the net financial position. At the end of the day, the best way to look at our financial position guidance versus the actual is to look at the situation without the IFRS 16 effect. If you look at the figures, we are around EUR 45 million net financial position excluding IFRS 16 -- the last figure on the left column on Slide 4 of our presentation. But we have to compare with the previous guidance that was between EUR 49 million and EUR 52 million. So this actual figure is considering 2 effects. One is the investment on Agricola Azzurra, EUR 7 million roughly of cash investment, and the buyback that was not considered within our guidance, EUR 1.6 million. So all in all, we have to consider EUR 9 million of major, let's say, cash out compared with what we consider within our guidance. So we say -- we can say that our cash generation was usually better than what we forecasted. If we go to the net financial position reports that includes IFRS 16, this is slightly lower -- slightly up than our guidance just because we are having, let's say, accounting effect due to the IFRS 16 accountability regarding the fifth ship we hired for 2 years. Actually, the fifth ships is running, industrially speaking, beginning 1st of January 2022. But given the fact that we have to insert the fifth ship within our system, we had to sign the contract and to take the responsibility on the asset at the -- around middle of December. That's why for the accounting international standard principles, we have to consider the IFRS 16, let's say, investment already in 2021. I think this is really easy to understand. It's an accounting effect. What is really important to analyze is the net financial position without IFRS 16 because this gives you the real impact of our cash generation, working capital activity and, let's say, cash flow in general. Going on some other figures, I would like to highlight the attention to -- drive the attention on the dividend proposal for 2021. The proposal is EUR 0.30 per share that amounts to roughly slightly over EUR 5 million dividend is more than 50% up compared with last year. And let's say, this approach on shareholder remuneration, the shareholder payout policy is showing, obviously, a correlation with better results. But on the other hand, it's showing the fact that the company still want to invest most part of its cash flow generating and, let's say, cash out power through external growth. So using the money for M&A activity. If we go a bit deeper on the figures, and specifically on the adjusted EBITDA variance of 2020 with 2021, we will see that looking at the different business units, we have a slightly decreasing effect on distribution. But still, in terms of the percentage of revenues, it's very, very good, 3.5%. It's an excellent result compared with the market that we're dealing with. And we have a big contribution on shipping, EUR 6.7 million, more than last year. As we always say, actually, our 2 business units are separated because shipping activity has different characteristics compared with distribution. But industrially speaking, and even financially speaking, they are really, really synergic and correlated. The main reason is that, as you probably all know, the main client of our ships is our distribution. And in order not to change the rules of the game compared with our clients, we apply the same Bunker Adjustment Factor close as well with our distribution. So we can appreciate the fact that there's a bit of, let's say, flow of profitability between one activity and the others. And specifically, when the bunker price goes up, the shipping activity take advantage of this compared with our distribution. So if we have to look at our situation, all in all, I would say that at least a couple of million euros that we see on shipping actually in our forecast was related to distribution. So the business model is really solid, and it's really well balanced. Actually, as you perfectly know, when the results comes to shipping, we will have a better tax rate all in all as a group. So we don't -- we like it in some terms, but to look at the 2 business units and to be correctly critical about the single results, we have to like the fact that the 2 business units are really working together. So in our view, industrial view, for sure, we have a boost on the shipping activity, but the distribution segment is really, really solid. And this is the most important thing for us. As Raffaella said, for us, the shipping activity, industrially speaking, it's really important for the service. On the other hand, it's a big protection on our core business, specifically in that time being that is really turbulent and shocking sometimes. But on the other hand, it's a great cash flow generator, and this gives us the power to pay out dividends to the shareholder. And on the other hand, to look and scout for M&A opportunities. If we go to the consolidated net profit, it's really easy to read the evolution because we -- last year, we had a reported net profit around EUR 12.3 million with EUR 1.7 million of adjustments, mainly driven by the COVID effect. So let's say, a current result of EUR 14 million. This year, in 2021, we have a current result around EUR 19.1 million than the reported EUR 18.5 million because of EUR 0.6 million of adjustments. The main difference is the better result in terms of adjusted EBITDA. We have higher D&A and provisions, mainly due to the investment plan that we performed over the past year, but now is amortizing year-on-year. We have a better share of profit from our, let's say, subsidiaries not control, consolidate through -- with equity method. And you can appreciate the fact that with the higher profitability of EUR 4.5 million on EBITDA, adopting the new tax regime, we are able to pay EUR 1.4 million taxes less compared with last year. This is, let's say, the effect that we are able to achieve with the new tax regime on shipping. Going on this last chart on figures that is related to an net equity, net financial position. You see that the net equity variance is really simple to read as well. It moves with net profit full year 2021, decreasing by the dividend paid on 2021 results and the buyback we performed. We have a positive mark-to-market on the hedging reserves and then other is slightly lower than EUR 2 million and then EUR 0.4 million of other effects. So it's really, let's say solid and easy to see. Net financial position, we've reached it because it's always important to understand our cash flow generation. So you will see that we have a EUR 41 million of cash flow generation. The net working capital change positive of EUR 7.7 million, operating CapEx was EUR 13.5 million. Other divestiture, that is basically the sell-out of the warehouse in Milan and in Oporto in Portugal, as we mentioned before. M&A activity, the biggest one, and let's say the main one is Agricola Azzurra, the dividend pay and the buyback. So we're passing by EUR 74.4 million to EUR 45.3 million, then we have the IFRS effect that drive our net financial position reporting to EUR 84.3 million. And as I've highlight the fact that within the EUR 39 million IFRS 16 effect, we have to consider the EUR 10 million -- slightly lower than EUR 10 million accounting investments in the ship. I think these are the main figures we want to highlight then in the document we -- and in the press release, we put again our guidance 2022. Raffaella spent few words about that. So if I think it's enough in terms of numbers and detailed explanation, and I will leave the rest of the time for the Q&A session. Thank you very much.

[Operator Instructions] The first question is from Dario Michi with BNP Paribas EXANE.

The first one is on the guidance. Which are the potential upsides and downsides you might figure out as of today on the announced figures. Then could you please detail any potential implications of the current electricity and gas prices on your costs? Third question is on the bunker prices. Is there a threshold that may affect your adjustment closes. Fresh cut you detail -- Ms. Orsero detail at the beginning the situation on the Italian market. Here, I was wondering if you could please help to understand which is the situation in the business at the moment, and how the performance is comparing with your budget business plan? And lastly, some cash generation you are experiencing is due to accelerated M&A activity. And more in general, what and where you are concentrating your efforts in scouting a potential place.

Thank you, Dario, lot of questions. Very interesting all of them. I will try to be as precise as I can. Regarding the guidance, potential upside and potential downside. I think it's -- the downside is specifically linked with this electricity and cost increase. We forecasted in our guidance as a whole group, an increase about 60% compared with the previous year because that was the, let's say, the worst case scenario we saw in December, beginning of January regarding all the offer we had for the contract on the electricity. Actually, the mood of the expert of the market was that in April we would have some opportunities to get better contract. So actually, all the extras were totally wrong, but was due to, obviously to forecast the actual dramatic situation. So at the moment, we are experiencing some higher cost, doubling up our expectation. This will -- this could, let's say, cost to our system a couple of million more. But actually, these has to be matched with the price of the product that we sell. Because as you probably know or remember, if we compare the prices of last year same period with the price of this year same period, and considering the fact that during the first 2 months of the year, but I include December as well in the analysis, because already in December, the inflationary pressure was really felt by our activity. Actually, we have the prices up by between 12% and 15% depending on the countries with a different product mix. So actually, this is an effect that is higher than what we expected in our guidance, in our forecast. So then we will have to see if we will be able to cover all the electricity costs and the freight rate cost for external services, thanks to the commercial activity in pushing the price higher. So let's say, the potential downside is related to costs. And at the moment, we can -- the only real cost that we can consider as a reality is the electricity. And I gave you more or less the dimension for the overall. The potential upside, obviously, on one hand is related to -- mainly to the shipping activity because if the inflationary pressure goes up and the freight rates on the spot activity, so the dry cargo activity is going up, actually this would have some better results. But all in all, I think that our guidance at the moment has not to be changed nor up, nor down. So the upside and the downside at this moment is still on the range that we consider as a normal situation. Obviously, as Mrs. Raffaella Orsero said, the actual situation between Russia and Ukraine can give us other indirect effect that actually is very difficult to quantify it in positive or negative. Actually, we have no activity neither in buying products, neither in selling products there, but it's a big market. It's roughly -- Russia and Ukraine is roughly 200 million people, then a part of the people specifically for Russia is more on the East side of the world, so it's not really involved in our market. But a big portion is on the West side of the world. So actually, we have to consider it as a potential dimension that gives up a movement on our activity. But at the moment, it's really impossible to say what is going to happen and which is the evolution of the geopolitical situation. So first 2 questions. Hopefully, I gave you an explanation. On bunker price, I can confirm you there is no, let's say, a roof on our formula. So we're really safe on that. Obviously, the only potential risk from that is that if the price of the fuel will go up in the stars, we could experience some loss of volume because some exporter or importer could decide to increase their programs. We have, let's say, debt trade closed more stable for us. But as you know, when you have a situation of force majeure, it's very difficult to call the closes. But at the moment and for what we see on the next cargos, we have no effect. Everyone is paying is exchange rate perfectly in line with the contract. So I -- the think that [ sensical ] answer to your question is no, we have no, let's say, bunker price problem related to the BAF formula. On the fresh cut, very -- it's a very bad time at the moment to give you the answer because as you probably remember, fresh cut activity has a big seasonality and the seasonality is really starting from, let's say, end of April beginning of May with a peak on the summer season and then is lasting until the end of September and then it's declining again beginning of October. So if we look at our business plan this year and last year, I can tell you that we are in line, but it's a very poor information. But probably we were performing 2%, 3% of the sales at this moment. So this would be a question that I will be able to answer in a better way with the release of our results, let's say, of the first quarter, so mid-May or better with the results of the first 6 months mid of September. Cost generation M&A, actually on that is not that we are pushing on our cash generation to make M&A because we have a lot of room on our balance sheet to leverage the company to make M&A deal, and we have a lot of cash reserve. Just that actually, we are working a lot on credit collection, and we are, let's say, trying to take out of our balance sheet the most cash that we can, because it's the right thing to do. I think this is more or less the way I can answer to your question. If you are okay or if you have some more doubts, I'm here to answer.

Yes, please, Matteo, if I may, is the M&A activity at the moment intensifying at least on your perspective? And EPS, where are you looking and what are you looking for?

It's -- okay, actually, I cannot answer to this question in a precise way, as you know. I confirm you that we are scouting a lot, and we are scouting both in our markets and outside our markets. We're not either close to define one or more deals, but our target is to perform something relevant within this year. And let's say, I think we will have the opportunities on the market, it will depend on the actual situation and on the valuation. Because as you know, we don't want to follow, let's say, the crazy wave of multiples driven the PE funds and M&A, let's say, bubble because we are here to make deals that are made, because we want to reinforce our business and enlarge our activity, but to be profitable and staying and healthy on our balance sheet over the years. So it will depend a lot on the valuation, but we are confident we could deliver something during this year.

The next question is from Andrea Bonfa with Banca Akros.

Very quickly, because a part of my question is being already answered. And I would like to have your flavor on how volumes, or prices are doing in the very first few months. And the second one is I've been reading this, let's say, call them strikes of tier drivers, if that is affecting your business. And then it's more a long-term question that is related to the, let's say, current freight rates or your shipping activity for third parties. At the end of the day, the increases that you've been able to push through to achieve in your business are just a fraction of what is the actual inflation in the container rates. And I'm wondering if that is just the beginning for you or if you believe that the reefer market, which is where you operate, is just completely insulated for the global trend. And then is it a bit, let's say, excessive to have expectation of a similar inflation of that already widening on -- in the container business. So I'm wondering if we will see a 20% increase, maybe for year -- for 2 years in a row or if that is an unlikely scenario.

Andrea, thank you for your question. Actually, I will go through the first one. Volume of the first month. Let's say that we are experiences -- we were looking at data yesterday on distribution. We are up between 1.5% and 2% in volumes in the first month. This is an effect that is mixed as well because as you probably remember, last year, we decided to avoid to participate to some banana tenders. This year, we were able to -- specifically in one country that is Portugal, we were able to win at a decent, let's say -- at least decent profitability or at least not losing money on that country. So we decided to get in, because Portugal need bananas activity to succeed even with other products. Actually, so it's -- the volume increase is in line with our expectation. But then as Raffaella stated, then the price effect is really high, but this time with inflection. So we are -- on volume wise, we are, let's say, in line of our expectation. Regarding the strikes on the trucks activity, actually, obviously, it doesn't impact and it had an impact for 3, 4 days, specifically in the South of Italy a couple of weeks ago. Actually, the impact is not that relevant in order to affect -- really affect our activity both in terms of sales and profitability, specifically because it's not an impact that is related to Orsero. It's an impact that is related to all the operators of the business, because it's for everybody. So normally, when you have this kind of effect, it's not really touching you that much. But to tell you that this is totally in influence is not true. It's a logistic headache. The focus on that days was to be able to deliver at the minimum some trucks to our main customers, but it was an impact of a couple of days -- in 3, 4 days, the real ones. Now Spain as well is starting to have a problem in this -- on the truck deliveries. I think this is really related, all in all, with the situation of the oil price. And the speculation that we have on the gas line. Actually this come with then government decision, with some help to the sector. And at the end of the day, it comes with the fact that the final prices will be higher and this has to remunerate all the chain of value. Truck is up and relevant and important piece of the chain of value in Europe, because as you know, the goods are shipped not really by boat or by -- its shipped by boat overseas, but then when it comes to Europe, it's mainly by a truck. So it's an important ring of the chain of value, and we have to remunerate them for the job they do and it comes with higher prices. The reality is that the challenge this year is to keep and push the price higher compared with the previous year, because costs are real and there. Regarding your last question on the reefer activity. First of all, we have to split the market looking at -- first of all, the index you look worldwide are index that sometimes consider some routes that are not, let's say, within our business. So East-West, for example, and so on, is not comparable at all. For sure, the spot market now compare -- in the reefer activities of what is concerning with fruit. What we're seeing now that a freight rate that was last year around $6,000 per container regarding, for example, peers from Argentina or South Africa, now is touching $3,000 -- $10,000. So we have the spot market that is higher compared with the full year contract. But you have to consider the fact that we are dealing on the full-year contract with bananas and pine. Banana strategically is a real commodity group. So basically, we are on the market. I think we are making for this year the correct price. Then obviously, if we have respace the spot market now it's slightly higher because we are touching the peak season, then probably during the summer would peak slightly lower. What we expect for next year? Really difficult to say if we will experience higher freight rates, if the market will be higher, we will push the freight rate higher because it's a market. But I think we can be really satisfied even with this level of remuneration for our investment and activity. So let's say that in our view, I can say that given the fact, actually, we are a fruit distributor, fresh produce distributor, we are not really willing cost of freight rates to be that high, that it comes with lower volume in distribution. Because at the end of the day, our focus is the distribution of fruit and vegetables. So the actual scenario, it's -- for us, it's really good because we can have a very good remuneration and cash flow by our shipping activity. And on the other hand, still the costs are at the level that are, let's say, acceptable in order to maintain the volume. I think that specifically on bananas, if the freight rates will be the double of this year, we will make a lot of cash through the shipping activities on the paper, but then we will have to see how many banana will be imported in Europe because it comes with -- this cost increase at a certain point comes with decreasing volume. So I think that we have to be balanced. And at the moment, we don't see or forecast a further massive increase in our rate. If you look at the dry activity that is for us it's complementary and is the backhaul of our activity. There actually, now let's say, we can consider that the dry freight rates doubled up over the last, let's say, 18 months. So there, where we are more linked to the dry container worldwide activity because it's the shortage specifically there. Then we saw even in our niche, in our single route, an increase that is really higher compared with the reefer activity. Last thing I can tell you that anyway, the reefer activity was depressed, but not that depressed like the dry. To give you an example, 3 years ago to ship a container from Europe to United States was -- like dry container -- was $500 per container. This is really different. We never -- we were never under $2,000 per container on the reefer activity. So you even have to understand if you look at the percentage of increase, the baseline of the 2 different activities.

[Operator Instructions] The next question is from Luca Arena with CFO SIM.

Actually, I've just one question left. As a consequence of the extension of the useful life of the 4 ships owned, when is reasonable to expect another round of dry-docking and what's the after-date, the scrap value of the ships at current market value.

Luca, very technical question. I'm happy you made it. First of all, next round of -- to enlarge the usage of our ships, it was a decision made together with our technical adviser. And actually, we made a study considering how many investment we have to make on the 4 ships in order to last at minimum lifetime for the 4 assets, 2030. So other, let's say, 8 years of usage. And actually, what we will have to do basically it's another round of dry-docking in 2024, first 2 ships; and 2025, the other 2 ships. In this case, roughly the investment will be $2.3 million at the current situation of raw materials per ships. So it would be roughly, let's say, EUR 4 million per year, 2024 and 2025. With this round of investment that is basically just slightly over what we paid for the last dry-docking. We are able to last our ships minimum 2030. Then we will see the situation of the ships. So it is, let's say, the first -- the first answer. And I'm sorry, Luca, the second one?

It was -- is related to the scrap value.

Sorry. Yes, actually, the scrap value -- at the moment we decide not to review the scrap value, because we took, let's say, an aptitude a conservative aptitude on the scrap value, because for IFRS 16 principle you have a total value for your assets. And you have, let's say, depreciation flow that comes with the value you give to your asset renewals. And then you have a final value that you do not depreciate that is a scrap value. Actually, we decided to be conservative on the scrap value for 2 reasons. First of all, to give stability to our depreciation flow because what happen is that if the scrap value goes up or down, because you are really on the fair market value year-on-year of the iron and other materials, then you have year-on-year to review the value of your amortization flow. And we don't really like it, because it's really impacting our capabilities to forecast our guidance and so on. On the other hand, because we don't want to have any risk at the end of the lifetime usage of the ship, then we will have, if we are too high with trade value, then we have to -- and we sell the ships or scrap them, then we have to compare our final value with a loss on our P&L. So given the fact we don't need it, we don't want to blow our P&L with a nonrecurring effect, we decided to maintain basically the scrap value we used to have until last year. Obviously, if you make now the comparison on the value of the iron and so on, we can add a 50% more, but we decide not to review it.

The next question is from Gabriele Berti with Intesa Sanpaolo.

I have just a couple of questions. The first one is about demand. Going forward, will you see any potential pressure on consumption of tropical fruits due to this price inflation? And more in general, how much is the consumption of tropical fruits sensible to the price inflation according to your experience. And the last one is about shipping. How much is more or less the level of revenues generated from the transportation of dry containers on the back -- yield back from Europe to Latin America.

On the demand, the first question on the demand of tropical fruit. Let's say that for, let's say, tropical fruit -- for a second, if your question is related to the luxury products, so let's say, mango, avocados or papaya, the exotic segment. Actually, at the moment, we don't see, let's say, a decrease in volumes because it's, let's say, premium segment that could last because the typical consumer of ripen mango, let's say, it's a person that have some power -- some cash power. So we don't really see this segment attacked by the cost pressure at the moment. Obviously, we will have to see how it goes on. If we're talking about, let's say, the other tropical, so bananas and pines, it comes with more or less commodity situation. So as I said before, at this level, we are not seeing -- we are seeing at a certain point, a different positive effects compared with the total situation because the cost of importing a container of bananas is a bit controlling the market. So it's more difficult to take the risk that we import the container of bananas because now you have to pay a really high price for the shipping. Until 2 years ago, it was really easy because the price of the shipping was really low. But all in all, now as I answered to Andrea before, we don't see massive, let's say, difference in our product mix. Then we will have to be -- to keep you posted and updated on the evolution of the situation looking as well on where the cost pressure goes. But at the moment, I think there's no alert to make. On the shipping activity, I'm sorry, can you repeat the question? I'm sorry.

Yes, the portion of...

The backhaul. Okay, the backhaul, I give you some figures. I think some KPIs to understand. Normally, our backhaul stays around, let's say, 150 units per voyage. So it's 150 containers per voyage. And it comes with, let's say, we have now around, I think, $1,150 per container. So the average is something like this. This is -- let's say, that this is not our core business, but in a way it's core because since 20 years that we ship as well these containers. Obviously, here, we are on the stock market, so the lower end of the rate where 3 years ago around $550 per container, and now for sure, we are around the top. That's why I said before that here you have a fluctuation that is difficult to define in our budget because it goes with the stock market. It can go to $1,050, and then it can, goes down to $750. It depends on how many containers and how many, let's say, free space we have on the route. So that's more or less the KPI I can give you.

The next question is from Roland Konen with Value-Holdings.

First of all, congratulations to your figures, very impressive. The first question would be on the working capital. We saw a huge decrease at the end of the year. Is this just a turn back of the increase the year before or what is behind this decrease in 2021? The second question would be on the sale of some real estate in the last year. Do you see something similar also in this year maybe with some gains and also in the last year? And the last question would be on the guidance. Could you break this guidance down on the segment level? Am I right that the distribution business unit will be more or less stable on the EBITDA line? And the bulk of the increase in 2022 will come from the shipping business unit. And if so, I guess the tax rate will be as low as in the last year, I guess, isn't it?

Roland, thanks for your nice words. Let's go to your question. So first one, working capital. Actually, we are working since a couple of years, actually, it's a project that is beginning to an end of 2019, but then we stopped in 2020 because of the COVID situation. We did not want to push on our clients to better cash in the, let's say, our credit. And so that's why you see a big difference in 2021 related to 2020 because we put in place a lot of action in order to optimize our working capital. As we described on our, let's say, balance sheet documentation, actually, we decided even to make working capital instrument together with our strategic bank in order to optimize the, let's say, the cash in of our credit specifically on certain clients that pays out with longer period. Let's say, it's a really complex, let's say, instrument that we put in place, and it's country by country. So at the end of the day, another effect -- I'm sorry, I have to highlight is that specifically in some countries, for example, like Italy, when you grow a lot, given the fact that in Italy, normally the market pays around 60 days compared with our country where we are paid 30 days, 32 days or 40 days maximum, in Italy is like this. So when you grow a lot in revenues in Italy, it comes with working capital absorption. When you grow a lot in Spain or in France, it comes with a normalized working capital effect. So last year, we did not grow in terms of revenues in Italy. We grew on other countries. So this is another mix effect and on the other -- and obviously, when it comes to shipping and we grow in shipping, there, you have no working capital. So all the shipping activity is paid when the ships is growing is touching the single, the first porting in Europe. So if we grow in shipping and we grow in countries outside Italy, normally, the cash generation is really better. That's why for Italy, in specific, we decided to put in place, let's say, a strong working capital plan in order to optimize our cash flow, specifically when it comes with growth. For example, in 2022 guidance leading to prices, we aim to grow a lot in terms of revenues, and it will come with a certain working capital effect. That's why we are really focused on that because we don't want to leave EUR 150 million of credits in the pocket of our clients, if it's out of the, let's say, defined rules and the defined agreement with them in terms of payments. So this is working capital. On the warehouse sales, actually, our business is to invest and to maintain our warehousing platforms all over Europe. The reason why we decided to sell out Milan is that actually in Italy, we have a lot of platforms, and we optimized during the first wave of COVID our distribution, avoiding to use Milan. Milan as well was an old warehouse with some huge investment to make in order to give to the warehouse all the potential and both the capability that we have around Italy. So we decided to sell Milan to a large Verona. With Oporto, it was roughly the same situation. We had a problem with the warehousing of Oporto because we had to make huge investments in order to optimize our operation there. So we decided to sell out that warehousing to enlarge Alverca. So it's not that we will have lower dimension of square meters for our operation. We have more or less the same square meters, but we optimize our activity. So there is no idea of selling other warehouse in 2022 or 2023. So we don't expect any impact positive or negative on our profit and loss due to let's say, real estate activity. For the guidance breakdown, actually, we do not disclose in that details our budget because it's too difficult as well to forecast in our activity, giving you a big number in terms net profit and adjusted EBITDA. So we do not want to give this detail or breakdown. For sure, you can imagine that a relevant part of the better result is driven by the shipping activity. On distribution, our goal is to maintain stability in 1 year where we will have probably EUR 4 million, EUR 5 million of higher energy costs in our -- for our activity. So at least if we are able to cover this cost, we will be really happy then. We will see with the actual figures. Tax rate 2022, hopefully, will be slightly better because given the fact that the profit will be higher and the shipping activity will drive mainly this higher profit. At the end of the day, you will have probably a better tax effect on the mix, but at least it will be the same of 2021.

[Operator Instructions] Ms. Orsero, gentleman, there are no more questions registered at this time.

Okay. Thank you very much. So we would like to say -- Raffaella, you want to say few words?

No, no, thank you very much. The same Matteo.

Thank you to everybody. We will have the next catch up in a couple of months for the first quarter results. All the best to everybody.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.