Purcari Wineries Public Company Limited (WINE) Earnings Call Transcript & Summary

Good afternoon, everyone. We welcome you to our conference call for institutional investors. And now I'm giving the floor to Eugen Comendant, Chief Operational Officer at Purcari Wineries.

Good afternoon, everyone. My name is Eugen Comendant, Chief Operating Officer at Purcari Wineries. Today, we present the preliminary results for 2021. But of course, we start today's conference call with a bag of emotions driven by the crisis in the region. You can imagine that we are so close to a region covered by war. And this is of course, what we see deepens -- deeply affects us. The whole team of Purcari here in Moldova, from the start of the situation in Ukraine on Thursday morning, have mobilized themselves to try and help as many refugees that are coming from -- that are flying from -- fleeing from this war, from -- that are passing the border at the Palanca border crossing, which is very close to Chateau Purcari. The team -- I want to thank the entire Purcari team that has done an amazing job of helping the refugees. Some people have not slept for almost 2 straight days. We are proud with the fact that we've been able to help over 200 families directly, and indirectly, even more than that. So the way we managed to help these refugees was at the Chateau Purcari itself as well as we paid for accommodation in the region to make sure that families that need shelter have that shelter. Also, we helped the refugees with setting up a tent, that we're giving out free food, free water, free SIM cards, blankets and other things that people may need. Also, it was heart warming to see a reach out from partners, not only Moldova or Romania, but even from across Europe, to offer different -- in different ways to support the crisis the crisis -- or to support the refugees in this crisis that we have at the moment. Of course, we're all moved. You can tell that I'm also moved by this and the entire team, of course, we are -- we have to do, of course, 2 things. One is make sure that we have business continuity and we stay focused on the business. But at the moment, of course, the big effort is going towards helping the people that are crossing the borders and are trying to escape this war. We can discuss more about the situation at the end. I'm sure you may have many questions. For now, I'll get into the presentations -- the presentation of today. And I'll focus on the numbers as I have to. And then at the end, I'll open for question and answers regarding, of course, the situation -- the current situation that we have in the region, but also potentially regarding some of the numbers that I'll present today. We have today's -- the presenters, so myself is Eugen Comendant, COO; we have Eugeniu Baltag, the Head of Investor Relations; Victor Arapan, the CFO; Mr. Vasile Tofan, Chairman; and Mr. Victor Bostan, the CEO and the Founder. Look, we have some slides here that are slides are we've used quite a bit. I'm sure that -- most of you that are present in this conference call are aware of the overview of the group, you know the main market that we sell into, and the brands that we offer. So I will not spend too much time on these slides. I will go as much -- as quickly as possible into the numbers. So I arrive to this first slide, and I think it's an important slide because the numbers that we are presenting, I can imagine that to some of you and to the analysts that are perhaps not in this call, but that have reviewed the numbers in the financial report, perhaps there was some difficulty in trying to compare apple-to-apple, because what happened that on the 15th of September, we increased our participation in the company called Ecosmart Union. It's a company which is -- its core business is a waste recycling management. So we've increased our participation in this company from 27% to 65.75%. What this has done, it has moved to this company from being an equity accounted investee to a company that just consolidated as part of the group. We have done this for multiple reasons, what many -- so many reasons, one of the reasons being that we want to increase our stake in the sustainability direction and the control that we have on this direction. And the way the management -- or the way the Ecosmart company was being managed led us to the decision that we want to increase our participation. The positive thing from the fact that we -- or I think the way that we've increase this participation is that it was for a relatively small amount. So we -- our initial investment was RON 108,000 for 27% of the company. We've already received over RON 500,000 as dividends from validation. So that initial investment is already covered. We've allocated another RON 340,000 to acquire the rest of the stake, which has a stake of 5.75%. So it's a relatively small investment, but into a company that has a very high potential. So from one perspective is we are increasing our stake in the sustainability direction, but on the other hand is we do see -- so this could be from a -- this could turn out as also as a strong financial investment in this company. We'll get into the implications when it comes to the consolidation and to the numbers in the slides that are following. We are overall very happy to post these results. So the revenue overall on a group level has increased from RON 203 million to RON 245 million. This, of course, includes the revenue that is generated by Ecosmart of just over RON 7 million. The EBITDA of the group has increased from RON 60 million to RON 69 million. And this, on the other hand, includes a negative impact that is coming from the consolidation of Ecosmart. And then we have the net income here, which we've tried to present it in an informative way and we'll try to keep it as simple as possible. But perhaps I will have to go even deeper into the figures a bit later because, again, this is an amalgamation of, on one hand, the consolidation of Ecosmart. And on the other hand, some one-offs that we had both in 2020 and in 2021. Just very quickly on some operational highlights. So we are happy to show an increase in revenue of 17% year-over-year. This is exceeding our guidance, which was 12% to 14%. We have strong rebound in Moldova, so Moldova has recovered its revenues to the levels of 2019. We do have -- we do see some stagnation on a yearly perspective, some decline in Poland and Czech Republic, but I will get into that in a slide that follows. And Bardar has had a very strong performance, plus 23%, that's due to the recovery in Moldova, but also even though from some small base and increase in sales in Romania. We are showing an increase in group EBITDA. It's 14% increase to RON 68.7 million. This is an EBITDA margin of 28%. Nonetheless, again, I will go into some detail into trying to explain the difference between what we now call the core business EBITDA and the EBITDA that comes from the impact of consolidating, of course, with Ecosmart. Then we have -- we presented this also in the previous presentation that we have an additional close to EUR 1 million cash proceeds that came from the sale of Glass Container Company, and we are happy to say that overall our balance sheet position now is extremely strong. Not only this is good for overall to have a strong balance sheet, but particularly now in some uncertain times, it's even more important that we have a strong balance sheet. And if you remember, 2 years ago, when -- it was in the same call, the reporting of the yearly results that we had a crisis, another type of crisis ahead of us. And then also what was important is that we had a strong balance sheet to get into these prices. Some quick -- just quickly covering some activity on acquisitions. We've done acquisitions earlier this year -- earlier in the year of 2021. We've done an acquisition of 10% stake in 8Wines. This is an important acquisition for us because on one hand, we are entering the online or the e-commerce in wine business. It's something that, of course, it's obvious that we should be able to see a future in this, but also not only we invested from a financial perspective in 8Wines but also from the fact that we are able to have some insights into how the e-commerce business are working in the wine industry and take some key learnings from that. Ecosmart Union, I've mentioned that. So we've increased your stake from 27% to 65.75%. And more recently, we've acquired a company Vinoteca Gherasim Constantinescu in Romania. It's in the prime location in Dealu Mare. It came with 50 hectares of high-quality prime vineyards and another 22 hectares of good land -- very good land that we will be able to plant and further extend the -- our vineyards that are used for producing raw material for Crama Ceptura in Romania. We're very happy to announce, and of course, this probably has totally not been picked up by the press, given the other more stringent topics or one topic at the moment, but we are happy to say that we have been included in the FTSE Global Micro Cap Index. And basically as of March, we will be included in that index. And that's a great achievement for us because it further puts Purcari -- further establishes Purcari as part of an investable company, and it expands in the way of investors that could potentially choose to invest in Purcari. You remember, we awarded a dividend of RON 0.65 per share. And we have also awarded 3 shares or bonus shares, 1 bonus share for every share held. That was -- this was done in August and September of last year. And then there was some buyback programs that we've successfully concluded. Okay. Now going a bit into the -- a bit more into the figures. So we, here, we tried again to split the figures into a palatable manner. We give, let's say, a good base for -- also for the models that are used by the investors or the analysts to evaluate our performance. So if we go from the top line, we see that here, we showed up the overall revenue for the group is RON 244 million. However, if you were to just look at the wine business here, I think we need to focus a bit more on the wine business, we will show that -- we'll see that there's a revenue increase of 70%. Then we have a COGS of RON 125.5 million. This is, again, for the wine business. The COGS increased slightly at a higher pace at 18%, and that has led to a gross profit margin of 47%. The SG&A has increased by 10%. And here, there are quite a few components. If we were to, again, just focus on the wine business. We have the marketing and selling that has gone up by 36%. So now it's RON 31.2 million. However, the -- if we were to look at the -- because we also had some reallocation of costs from G&A to marketing and selling. And the good thing is that in Q4 of 2021, this is the last reallocation that we've done for this kind of cost. So we will see more key numbers going forward. But one of the reasons that you see, let's say, 36% -- or one component of that increase is also this reallocation. Another component is the fact that we have recognized the cost or the expense of the stock options, which is part of this management incentive plan. We've recognized it in this year, in year 2021. And this, again, has led to an increase in this marketing and selling line. If we were to exclude those reallocations and this recognition of expenses, then, in fact, the marketing and selling expenses are growing more or less in line around 20% or just over 20% increase year-on-year if we were just to look at the actual expenditure into marketing and selling. The G&A, in fact, has gone down. So this also has some effect of that reallocation. So you hear probably the best is to look at sort of the SG&A figure as a total. And then we see that we have this 10% increase. Nonetheless, again, I have to mention that also in 2020, we had some recognition of expense, which was attributed to the share award, which was again part of the management incentive plan when this was done in 2020, a good chunk of it. Now moving on. If we look at other income or other expenses. So here we have the adjustment of the fair value of biological assets. This year, we had a positive effect of RON 2.7 million . Last year, we had a negative effect of RON 2.9 million . And we felt busy an impairment loss on the trade receivable, which is something -- so we have a few receivables that the auditors and, in fact, the management considered that it is a correct approach, a more conservative approach to recognize this impairment of distributions even though, if you may remember, in previous years, we've done some impairments -- or some provisions for impairments. We've included them in the P&L that we've reported, but we've managed to recover those trade receivables. Similarly here, the management is relatively confident that we'll be able to recover these trade receivables. But nonetheless, we thought it's more prudent to mention them here. We have some other income, which is some release of deferred income, particularly that's coming from some grounds that we have received, and we arrived to an EBITDA of RON 72.4 million. Now here, I have to actually mention that, in fact, when we see the EBITDA of RON 72.4 million, remember, I'm still saying in the home of wine in 2021. And then you -- lower, you see a net profit of RON 45.0 million. In fact, here, we have omitted in this presentation, perhaps we'll have to make a little adjustment to the presentation or we we'll republish it. We have not taken into account, in fact, recognition of loss from the Ecosmart share of 27% that we had before we -- before we have acquired the additional stake and had made it a subsidiary and have consolidated the numbers. So because of the process of evaluating the company, there -- we have a portion of the negative impact from Ecosmart that we have taken in from the 15th of September 2021. However, there was another portion, it was RON 2.2 million, that has not been taken out or added back into this column. So in fact, the net profit, if we were just to take the wine business, would be around RON 47.2 million. So if we were to move from this perspective, I know maybe some of you are doing the -- or analyzing the quarter performance year-over-year. And I'll quickly open up for myself here an excel. So the impact -- the negative impact on the net income from the Ecosmart consolidation and acquisition is RON 6.2 million. Now of course, this is not a direct negative -- it's not an operational negative impact. This is more of a P&L negative impact because we have, again, done some provisions for impairment on some of the prepayments there. So some of the current assets. We are confident that we'll be able to either regain those prepayments or get the services for that. But nonetheless, again, prudent approach, we have made sort of a very conservative, which in this sense shows a negative impact on the acquisition of Ecosmart that now is being consolidated. So if we were not to look on the left side, so if you look at group total, or perhaps let's look a bit on the right side. So we look at the recycling columns, so right next to the wine column, there's the recycling column. You see that we start with a revenue of RON 7.3 million, then we have a gross profit after cost of sales with a gross profit of RON 2.2 million. That's, again, I'm speaking about Ecosmart here. And we have a net profit of RON 3.9 million. Again, here, we should have added another RON 2.2 million, so this actually changes the situation a bit. In fact, it shows the wine business as it should have been with a net profit of RON 47.2 million, and the P&L that's attributable to the Ecosmart business at RON 6.1 million in negative terms. Good. So this is -- I've tried to explain it in concise terms, because I don't want to stay on this slide for too long, but I'm happy to take some questions. So this is the situation at the moment when it comes to our financial results. We believe that this is a strong result. So again, I remind you that adjusted from the Ecosmart, so if you wouldn't have consolidated Ecosmart, the Q4, the fourth quarter alone, net profit margin or net profit would have been close to RON 7.5 million. And of course, this would have shown a different profit margin overall for the group or for the Wine business. Good. Let me continue further. I'll speak a bit about the market. So Romania keeps performing well. And you see here that we've grown in Romania with 17% year-over-year. Purcari has shown a very good result. Part of it was also the launch of Nocturne, which is -- it's a series designed for HORECA and launched on the HORECA channel. We also launched some other SKUs. Overall, Purcari has done very well. Bardar, of course, plus 52%. And Bardar, overall, looks very promising for Romania, and we expect that we'll be able to grow at this kind of rate going forward. We have launched Domeniile Cuza in Romania. It's a new brand. You probably saw, it's also somewhere in one of the notes where you see the mix of sales in the financial report. The numbers are still low because we've recently launched it in -- with some ramp-up in Q4. So it was just in [ Poland ] at the beginning. And then right now, it's been listed in other key accounts. Moldova, we're seeing an increase of 61%, pretty much on par with 2019. And this is worth to mention that it's on par with 2019 despite some channels not going back to previous numbers. So for example, HORECA is still not back to the 2019 level. And the Duty Free, which is also a channel for us, has not recovered to the 2019 levels. Bostavan has shown more of a flat numbers for Moldova and Purcari has shown the positive numbers, and particularly -- sorry, Purcari has shown very strong numbers, of course, 76%. Bardar has shown plus 55%, and Bostavan plus 36%. If we were to compare to 2019, then Bostavan is fairly flat. And Purcari and Bardar with slight increase. Poland, we are posting -- now we're showing here a decrease of minus 15%. In fact, for the fourth quarter, we are flat and basically the impact that we see in Poland has a few components. Some components is, of course, there was some price war particularly at the beginning of the year where our competitors have been in promotions for a longer period of time. There's also the impact that we had from Biedronka. If you remember, I've mentioned this also in previous presentations. We had some stlal in our sales in Biedronka. However, we are now back in that key account. And that showed that in Q4, we are flat comparing to 2020. So we are recovering the sales, but we were not able to recover the loss of sales that we experienced in the earlier part of the -- of 2021. In Asia, it's difficult to do the business. There is -- we experienced high restrictions from the, let's say, from the state when it comes to doing business there. So exports, there's some friction when it comes to exports, friction when it comes to local sales and events and participating at even wine expos and so on. But overall, we managed to retain a relatively flat position. So we have minus 2%. But nonetheless, we are -- so minus 2% versus 2020, but still minus 4% versus 2019. Czech Republic and Slovakia, we still are impacted by the Tesco restructuring. And yes, it's a very competitive market, still the segment that we're in. Czech Republic is very competitive. It's relatively high sensitive to -- highly sensitive to price. So we are -- we've managed to retain a flat sales position versus 2020, minus 2%. In Ukraine, we did well. So we managed to increase plus 20% versus 2020, and plus 23% versus 2019. Of course, we're yet to see how 2022 will progress. We are looking at how we'll manage sales in Ukraine and how we'll manage operations. Remember, we've also opened a representation in Ukraine. But now, more focus is being given towards addressing Ukraine as a humanitarian crisis before a business crisis. Nonetheless, if you were to look from a share of sales, Ukraine is at 4%. So even if we were to, let's say, fully lose the sales in Ukraine, it would have an impact on the business, but will be limited to around 4% of the total share of sales. And if you look at other markets, small increase at plus 2%. If you look at brands, overall, Purcari has down very well, plus 28%. Very strong growth, and that's good because Purcari is still the more profitable brand in our portfolio. Bostavan is flat, we'll call it flat minus 2%, versus 2020 and minus 3% versus 2019. This -- the main effect from this decrease comes from Czech Republic were -- sorry, from Poland, most and to a certain safe extent from Czech Republic. And Slovakia, where primarily the sales are for Bostavan in all these countries that I mentioned. [indiscernible] is relatively well, plus 9%, and Bardar with a good recovery in Moldova, plus 23%. Okay. I'll not stay too much on this. Of course, we've been very active in 2021. We've launched new brands. This is important because premiumization is still a key component to our growth and to maintaining our margins for the long term. So we've launched some new brands. The effort that we see -- that we have with the new brands is, number one, is to ensure that we take most use of the synergy. Well, I'll say, we use the synergies that we could use from the fact that we have a very strong presence in Romania, that we have strong relationship with our distribution. And at the moment, the main sales are Purcari Crama Ceptura, less so Bardar and other brands. So what we're trying to do now is to capitalize on the presence that we had in Romania and to introduce these new brands in Romania to capitalize on our presence. And this is -- it holds true for Domeniile Cuza, which was launched in Romania and for Wine Crime. At the same time, we are developing brands that would be marketable to consumers in the region, in Europe, but even in the world. The new line that we launched is such a line, but even the Nocturne for HORECA, which we've already started to promote in the HORECA channel in Poland. I'll have to mention it or I'll mention now, just quickly, some of you don't know. This is a very -- it's a proud moment for Chateau Purcari. Chateau Purcari has since become the most awarded winery in the whole world, and we speak here about very reputable wine contest in the world. It has managed to get 333 gold and silver medals. This is a new record. So we're very proud to have such a recognition from the expert of this competition. Okay. I'll move to the guidance. We -- as you can see now, we've slightly extended the range that we give the guidance -- we've given the guidance. On the one hand, for revenue growth for the group overall, which includes Ecosmart, and we've given the guidance for the wine business for revenue growth. And then we're giving the guidance for EBITDA margin for the group and for the net income margin for the group as well. And we may seem a bit conservative here, but we -- if you look at the guidance that we've given in the -- at the beginning of 2021, we prefer to be conservative when it comes to guidance and we've given a guidance of 12% to 14%. Of course, we've managed to beat that guidance with the numbers that we presented today. We have shown a guidance of 28% to 30% margin for EBITDA and 18% to 20% margin for net profit. For EBITDA, we are within the range that we've provided. In fact, we've beaten this range at 31.4%. And for net profit, we are within the range of 19%. So overall, our approach is to rather be conservative rather than overpromise -- so rather, under promise and over deliver. What's worth to mention, and I've mentioned this already, that we are in a strong position when it comes to our balance sheet. So we quantified this. Of course, it's a humanitarian crisis, and this is the focus. But nonetheless, in crises like these, companies that are strong and are healthy, they managed to go over this crisis and become even stronger. For Purcari, this has -- this counts or holds true even from 2006, first embargo from Russian embargo in 2013. The second Russian embargo where we have come out even stronger than we entered into those crisis. We believe that even after the whole coronavirus pandemic, we have revisited how the company operates, and we believe that we have come also stronger with higher market shares in key markets for us. We were able to communicate our messages in markets such as Romania, for example. And to some extent, we believe that even from this crisis, we'll be able to become stronger, but most important, of course, we believe that the region will come out stronger. Ukraine will come out stronger from this crisis. And the world overall, we believe, that we will come out stronger from all this. Our messages, we believe will come -- will be passed through in a manner that appeals to the empathy of the audience. We are, in a way, involved. We are in the middle of this crisis. And there is a product, which is the manifest for exactly the crisis that we have at the moment, which is Freedom Blend. It's a blend of 3 local varieties. It's Rara Neagra from Moldova, Bastardo from Ukraine, and Saperavi from Georgia. And this is the manifest for the freedom that the countries of Moldova and Ukraine and Georgia deserve to have and need to have. So we believe that we have a message to pass to the world through the wine, to this blend that we already have. Good. I will close it here. I want to say thank you for listening, and let me open for questions and answers.

Feel free to address any questions via chat or you can turn on the camera and address it directly.

Quick question. On the recycling business, what's the plan there? So obviously, now you have a majority stake. It was previously mismanaged, but what's the plan there? What's the game plan there?

Yes. Thank you, [indiscernible]. Look, it's a good question. And we wouldn't have acquired this stake if we didn't have a plan over there. So what -- again, what's important to understand is that we have invested a relatively small amount of money in this business. But we -- this business can have a relatively profitable operations. At the moment, there was some mismanagement, as you mentioned. And we have even done an impairment of around -- we provisioned for an impairment for different current assets of around RON 10 million. Some of them for the whole company. Some of them have fallen in the period after 15th of September when we have become a majority stakeholder or shareholder in the company. And now it's a subsidiary and gets consolidated. Some have moved or were before that, and we have taken on a chunk of that impairment of RON 2.2 million. So the plan is very simple, and we have done this already. So we've changed the administrator for the company. And we are -- there is some court cases and some penal cases that are being now in dispute and that are under litigation. The lawyers give us very high confidence that we are going to win, which means that if we win besides the penal implications for certain members of the previous management, we will also be able to recoup this -- the sum that we have provisioned as impairment. And with the change of management, basically, we put the company into a good operational mode. And this is by default a profitable business. Basically, you simply cannot lose business in -- lose money in this business. It's a way to recycling management service. So it's a service of -- it's more like a broker service, which in a way puts or manages to connect the waste producers with the waste recyclers. And you can imagine that there may be many waste producers of different types of waste and there are many waste recyclers for different types of waste. You can imagine that the company that produces waste, they cannot manage to actually take care of the recycling of this waste. So what happened is that a company such as Ecosmart is sort of the broker in between. So number one is change in management. We've done that. Put the company in normal operations. We've done that. Win the litigations, number 3. And number 4 is start acquiring very strong customers. So we are looking at customers like Metro, Coca-Cola and similar customers. We've already had meetings with some of them, and we have very positive feedback also because of the fact that -- in fact, our approach to a very, what we call it, clean approach to waste recycling management is appreciated and is viewed positively by big companies. So we believe that we'll be able to gain some business in the coming months and years. Back into Ecosmart, and we'll actually make this a successful company. Of course, we'll have to find a way in the future to consolidate or how to consolidate these numbers. Let me just stop the share -- yes, stop share. So of course, we have to find a way to consolidate the numbers as we go forward, because one concern that we have, and this concern is actually taking place at the moment, is that investors will be confused with the consolidation of the Ecosmart numbers. The issue that we have right at the moment is that because of the so many adjustments that happened on the Ecosmart side, we had to put in some negative numbers that have impacted not operationally, but from a P&L perspective, our EBITDA and net profit. But going forward, what will happen is that we still believe that our margins will stay strong. Yes, we will have -- because of the guidance that we've given, we may have some margin pressure in 2022 and potentially some in 2023 from the fact that the cost of grapes was higher in 2020, and also to a certain extent, higher in 2021. But we still have strong margins. And this year was something -- this was always a message that we passed on to our investors, that we are both a growth company and a value company. So we want to keep growing, but we want to make sure that we stay a highly profitable business. And on the core business, we intend to do that. Now with the acquisition or with the consolidation of Ecosmart, we can imagine that the waste recycling management business is not a business with the same margins as the wine business. But considering the return on investment of what we've invested in acquiring this majority stake and the yield that we'll generate will turn to be a very good financial investment. So we'll have a very high return on investment. However, going forward, because if we were to consolidate, that lower margin on the Ecosmart will dilute the margin that we'll show as a group and we'll have to find a way to make sure that we keep the message clear for investors and for analysts that use the numbers. Vasile, I see that you have -- you raise your hands and perhaps you want to...

Just wanted to comment. And I realize a short of time, but very quickly on this one. So all the deals we have done in the past have been very successful. GCC and The Glass Company -- I mean the noncore ones. GCC, we saw an opportunity. We acquired -- that's taken The Glass Company for EUR 1.7 million and within 4 years, we delivered 5x cash on cash. And given the earnout component, I think it's going to be more of a 7x cash-on-cash return. On [indiscernible], remember, the wine that we bought insolvency, the debt of -- again, within 1.5 years, we doubled our money. Again, opportunistic investments. In this case, it's less opportunistic. It was a need to move in. So to put it in plain terms, the guy running this for us, the shareholders, the companies that have packaging recycling needs are the [indiscernible] The guy was stealing money from us. So of course, we have to remove him, intervene for a de minimis amount obtained control in this company. We plan to fix it, as audience said, then divest below 50%. That's very important for us. Because we understand you don't want the math of going to sort it out how our P&L looks, adjusted for this recycling business. So our intention is to fix it as soon as possible and then divest it below the 50% so that we don't have to consolidate it in our financials and that we show you clearer financial quality for the wine business. I'm sure we'll make a lot of money on this recycling business. The only regret I have, we intervened too late. We have to intervene earlier, and get away with it. So with this crook that we have running this business.

This is Iuliana Ciopraga. A question from my end. Regarding the impact of the high -- of the extensive grapes, you're saying that it's going to have an impact in 2022 and 2023. But how high is that impact? I mean if we look at your guidance, and if we take into account the higher end of everything, sales, EBITDA margin, net income. It looks to be a significant impact. I mean you're not going to -- EBITDA doesn't really seem to grow in 2022 compared to 2021 for the wine business. Can you explain? I mean where should we see a normal EBITDA? Okay, so now these 2 years, we're going to be seeing the impact of expensive grapes. On the other hand, you did book already in 2025, I remember correctly, some adjustments of biological assets. I mean you did provide guidance. You said that the impact was going to be in 2021 as well. So it's quite high. I mean, where should a normal margin for Purcari right now, if we exclude, of course, the recycling business?

Yes. Look, for now the -- because of the small numbers, the recycling business will not have an important or radical change into the margins that we see on the EBITDA and the net income side. What we -- so the gross margin that perhaps you can reference or perhaps you can use it in the models. We're looking at the gross margin of somewhere around 45% or even lower than that. So we're looking at somewhere between 40% and 45% gross margin in 2022. That will go up. Because what's happening at the moment is that it already we had the impact in the fourth quarter. So in fact, in the fourth quarter, we had the first, let's say, stronger impact of the fact that 2020 was a bit good for us. So let me tell you why the 2020 year was a difficult one from the cost of grapes perspective on 2021. So 2020 is more a difficult year for us because, in fact, we had low yields. So because of the relatively low yields that we had on our own vineyards, the cost of grapes was relatively high. So it was higher. Then in 2021, we had good yields on our vineyard, but then we have acquired at a higher cost. Still, the 2021 negative impact is smaller than 2020. 2020 is the year with a higher impact on the cost of grapes, on the cost of goods sold. So in the fourth quarter, that was the first impact and then we expect somewhere the gross margin going forward to be 45% or slightly under 45% in 2022. And if you look at the previous margins, they were in the higher 40s or around the 50% mark.

And I mean -- but if we were to look at the normal here -- I mean okay, from this, I understand that 2022 will not be a normal year. You will have this impact from a very weak harvest in 2020. What should be the normal? Because...

We should revert to the margins where the gross margin is around 50% and then EBITDA is around 33% or I'll say 30%. Let's call it, 30%, 33%, let's call it, 30%, and the net profit of 20%. This is sort of the formula that we see in the long term for us. Of course, the future can take different terms. But the normal business at the normal margins that are, let's say, are normality for our business, for the wine business, is 50% gross margin, 30% EBITDA and 20% net profit.

But you don't see that in 2023. Basically, you are going to see -- based on impact in this year, and milder impact in 2023. It's only afterwards...

2023, yes. And for 2023, of course, we'll be looking at mitigating the impact with the price increase.

In 2023?

Yes. By 2023, we'll look to attenuate -- or to cover the impact from the higher COGS through price increases. And we believe that even though the -- in the crisis, the purchasing power decreases now with all the inflation. But the crisis, in fact, show to be good for wine sales. I'm not referring to the current crisis in Ukraine. Because of course, we do not want to refer to such a form of humanitarian crisis and make a link to business. I'm just saying in general. That overall crisis are, historically, in our business and in general for wine business, prices have been -- have not had a negative impact on the sales. And we're already observing competition increasing prices. So we believe that even though it's always difficult, there's always that price stickiness and it requires negotiation with our distribution partners. We believe that as the time passes, we'll be able to more and more pass forward price increases.

I understand. Regarding the sales guidance. Let me -- no, first, regarding sales in Romania. They were actually quite weak in Romania in the fourth quarter. I mean I think year-on-year, they are kind of flat. And I understand -- I remember you were saying that fourth quarter 2020 was very good, but still flat sales is not something that we're expecting in Romania.

Yes. So the fourth quarter in Romania was a growth of just over 6%, just the fourth quarter. So year-on-year.

4%. Yes. Okay. But okay, I have 4%. But no matter. It's very small, still. I mean with what you delivered so far in Romania, it's very small. And at the moment, Romania is a very large part of your sales. So I'm just wondering what's the -- where is your capacity to grow in Romania going forward? Because actually, the sales guidance that you're providing right now, of course, is way below what the guidance that you've provided in the past. I mean yes, we had 2020 crisis year, 2021 crisis year, 2022 we're going to be crisis year again. But still, I'm just wondering what -- where is the growth capacity of the company. Where should we see this growth capacity? If you're no longer going that much in Romania, that will have an impact. So that's why I'm asking about Romania, but it's all correlated.

So look, so in Romania, we do plan to keep strong growth. So double-digit growth in Romania for 2022. Yes, one may wonder how can we grow further. And there are many ways that we can go further. So we're yet to grow strongly in the HORECA channel. With Lidl, by the way, if you remember, we had some halt of sales with Lidl that happened at the beginning of the year. So in a way, the 2021 sales in majority, the Lidl sales. And we are looking at -- we are in talks and to a certain extent, we'll be restarting the cooperation with the Lidl. So that will have an impact, sort of a true-up there. Then we are -- we have Bardar, which is picking up sales. We have the introduction of other new SKUs, such as the new Rose and Domeniile Cuza that we're launching in Romania. So overall, we still have space to grow in Romania. Besides Romania, there is some unrealized potential still in Poland. We see Purcari picking up there to a certain extent. Of course, we have the sales of, let's say, the mainstream brands and we'll continue pushing those. But for us, what's important is to start sales of Purcari in key markets such as Poland. We are doing very good progress when it comes to sales in that other category, in the mix of sales based on regions. So we have good progress when it comes to sales in U.K., in the Nordics, in Western Europe. So we should see some growth coming from there. And China has to -- we believe that China at one point will start recovering at a faster pace. So overall, there are some growth directions that we believe will provide or will provide that growth and will be successful. Nonetheless, still from the growth perspective, but from the growth that we show in other -- figures that we show in our guidance, we believe that it's realistic, but somewhere on the -- or with the principle of under promise and over deliver, as we always do.

What's the scenario that you're taking to account regarding Ukraine? It's 4% of sales, but still 4% is significant.

With Ukraine, we'll have to see how the situation in Ukraine goes. We haven't done a scenario so far when it comes to sales, but we are assuming up to 4% share of the sales being lost in Ukraine. So it depends on how the situation will go in Ukraine at the moment.

[indiscernible] Look, I actually am one of the 10,000 refugees because as you know, I was [indiscernible]. Somehow I got into Moldova last night. Look, very quick on Ukraine. The reason we provide such a broad guidance is exactly because we [indiscernible] going to have in Ukraine. So I saw the market were reactive to the guidance we provided. I think it's unjustified. I think the company's in very good shape. Yes, we have the [indiscernible] in Ukraine. We're trying to do everything to minimize any damage there. On account receivables side, we don't raise much cash there because we've been selling primarily on prepayments. So financially, the exposure is not large. But yes, we run the risk of [indiscernible] in some sales there for all the sales. We don't know how we're going to evolve. That's why we provided the broader range for the guidance. Now in terms of Romania, we keep getting this question on how guys are going to grow in Romania. And I keep repeating, we're #4 player in Romania with the market growth of 11%. We are #4 player with a market share of 11%. There's enormous growth potential for us in Romania, still. And I'm [ not only talking about wine ]. In sparkling, we have very low market share. In evinas, which were growing at triple-digit rates, this is branded. We have very low market share. We just started. So we have enormous potential Romania. So again, I think if you do your math in terms of the guidance and you adjust for the effect of this recycling business that is a little bit messing up our financials and makes it difficult to apprehend, for you analysts because I can imagine [indiscernible] companies, you'll see that the company is in a very good shape and we'll have a very strong 2022. I cannot be -- I cannot say it's stronger that look, the market has dramatic over you don't understand why it happened. But I hope our results will show that the market has been dramatically wrong.

So I was just wondering, in the guidance, what was taken into account regarding Ukraine? I mean you see revenue growth 10%, 15%. I was just wondering what you will account it for when it comes to Ukraine? Just so we know. I mean, of course, sales in Ukraine it could be 0%. I'm just wondering what you reflected in the guidance. If you're reflecting your growth there or 0% sales or 2% of your sales. I was just wondering what is flat?

[indiscernible] exactly what I'm saying. So because we assume in our guidance sales in Ukraine from 0% to 4% of our sales. So it's 0% to 4%.

Okay. Now I get it.

And that's why our range for the guidance overall, it's 10% to 15% [indiscernible] for the wine business and 15% to 20% including [indiscernible] .

I understand. I understand. And regarding Asia and China, you don't really see China picking up this year. I mean from this guidance, it doesn't really show that you're actually seeing much growth in China right now. Is this how we should treat this?

China is also a market where there's quite a bit of variability in what the sales will be. So China was historically 7% of the share of sales. Now it's 3%. So this buffer or leeway that we may have in terms of sales is also included in that guidance. . Of course, we could have give guidance of 10 percentage point difference, but we believe that somewhere in the guidance that we gave with the 5 percentage point difference between the low and the higher threshold, it's something that takes into account possible variations that may come from up or downs for Asia and Ukraine and even other business.

And can you comment -- sorry, just one question on my side. Regarding Moldova, what you're seeing in Moldova? What you're expecting for Moldova?

So in Moldova, we expect -- we expect higher single digits for -- to lower double-digit growth in Moldova.

Is this sustainable? I mean the growth in Moldova, do you see this as sustainable? Because I guess competition is quite high in Moldova in the end and Romania.

Yes, yes. Yes, we see it as sustainable because, remember -- and this is, again, on the conservative side, the number that I mentioned. Because remember that the growth -- our growth has 2 components. One is price and one is volume. And historically, it was around 1/3 was price and 2/3 was volume. Now it may turn where somewhere around half of the growth may be priced way even more than that.

And if there are no questions, I'll ask some more. Regarding marketing and sales and G&A...

You're probably asking all the questions that everybody else wanted to ask. So it's fine. Yes.

Regarding where you see marketing and sales and G&A for 2022 and going forward as well as a percentage of sales? And I know I usually ask these questions, but I just want to know if anything changed here.

So we're looking at marketing and sales to be around about 11% of sales and G&A also around 11% of sales.

So nothing changed from there? And I guess going forward, probably around the same.

Yes. Yes.

Are there any one-offs we should be seeing in 2022?

No. So no more one-offs. So we have considerable one-offs happen in 2020 and 2021.

[indiscernible] here from InterCapital Asset Management. Can you comment on your second largest shareholder, Horizon Capital, which is situated in Ukraine? And does that impact your business in any way?

Maybe I'll take the question and then [indiscernible] longer capital and the senior partner there. So that doesn't impact -- the situation doesn't impact our holding in Purcari. We are blessed to have assets also outside of Ukraine which are diversified, a little bit our exposure that we're really close to [ Ukraine ] of course. So short answer to your question, there's no plans to divest that stake. And that's all I want to make sure that that's a very clear message. [indiscernible].

And what are your tools to better the inflation? And how have you managed it so far?

We've increased the prices, but relatively modestly so far. So we have passed some increases for Purcari, which is around 5%. And also some price increases for Bostavan, it ranges. It ranges from 3% to even 30%. But on a average, it should be somewhere around -- maybe around 5% as well. Of course, the partners are -- there's definitely an understanding of why the prices should increase at the moment. Because we experienced, to a certain extent, we experienced some increase in costs. There is a clear understanding that in the world that there is an inflationary effect going on. So for now, we've made the first increase in prices, but we are monitoring how the situation goes. And we may decide to -- we may decide to take the or go the road of secondary price increase. But of course, that depends on variable factors. We cannot -- so we need to increase the prices in such a way where we have the most net positive effect from it. So we want to make sure that we increase the prices, such way that it doesn't reduce the sales to an extent where, in fact, we have a negative impact in the overall figures. So we will see further in the year how and where and when we apply a further price increase.

And one more question from my side. Your Purcari Freedom Blend is made partly from Ukrainian grapes. And how many varieties comes from the Ukrainian grapes? And what percentage of COGS would it be?

I don't have the exact percentages of the blend, but -- this is -- we don't sell a very large number of this. So in the overall figures, the sales of Freedom Blend does not have a significant impact. I hope we'll get some more of them because it's not just a wine, it's a wine with a message and with a statement. But overall, the cost of the production -- cost of production of this wine is very significant in the overall figures. Vasile, did you want to say something?

Just [indiscernible] that I hope everybody understands that these are grapes indigenous to Crimea, to Bastardo part of Ukraine and so there are [indiscernible] Georgia and [indiscernible] Moldova, but they all grow in Moldova. So we source all the grapes from Moldova. We don't bring grapes from Georgia and we don't bring grapes from Ukraine because you cannot transport grapes at large distances. So grape is a fruit that is transported at 30-, 40-kilometers max. So we don't waste any supply [indiscernible], of course.

I'm [indiscernible] from BT Capital Partners. I would have 4 questions for you. The first one is related to why COGS rose so much in the fourth quarter of '21, roughly 53% of sales. Do we see here only the impact of Ecosmart or there were other factors that impacted this? The second one is related to whether the company expects to perform better in markets such as Poland, Czech Republic and Slovakia in 2022? The third one will be what should we expect in the first quarter of 2022 in terms of sales and COGS. And the last one will be related to any updates regarding the M&A activities performed by the company.

Thank you. So yes, if you were to look at the consolidated cost of goods sold, indeed, we have -- so on a consolidated level, we have this RON 130 million, out of which RON 125.5 million are coming from the wine business. You asked about why they are so high in the fourth quarter. There are a few things. So one was the impact of the 2020. So the first was the EBIT of 2020 higher cost of grapes. So the reds that are starting to be sold now in 2021 come with COGS from 2020, and that was the first, let's say, quarter with sales of inventory, so to say, or produced from 2020, number one. Number two, we have the effect of Ecosmart, which Ecosmart, of course, the gross margin of Ecosmart is far smaller. So it did have that impact to a certain extent. And also, we had some impact from slightly higher depreciation in that or from PP&E that we have put into use in the fourth quarter. So these were some of the components of the COGS. Yes. Sorry. That was number one. Number one. Number two, Poland, Czech Republic and Slovakia. So we do see -- we have a positive outlook towards Poland, because we gained Biedronka, and we went back to a flat position versus 2020 in the fourth quarter. And from there on, we should be able to generate increased sales. Nonetheless, Poland is a relatively difficult market because we are competing in the mainstream segment, so prices are decided for the customers. So even though we are very good and very active in trade activities and making sure that we generate from the shelf, even though it's tough, we do see -- we are positive about Poland. Czech Republic and Slovakia, we have to see how the sales go. We have still that impact from Tesco. So this is Tesco restructuring just keeps changing the figures. For sure, in 2022, we'll be comparing with already lower figures from 2021, because in 2021, we were comparing 2 strong figures of 2020 where Tesco was still relevant in the sales that we were doing to the Czech Republic. In 2022, that delta will attenuate. So we'll be able to compare to a more apples-to-apples. And starting from that baseline, we should be able to generate growth in sales. When it comes to fourth quarter expectations of sales and cost, I've mentioned that we are looking this year to -- for our gross margin to be around 45%. So we expect to start the first quarter with a gross margin of 41%. And from there on, is we're looking to stay within the guidelines that we presented in this presentation in terms of top line and the EBITDA and net profit. Okay. And on the M&A side. I would say the effort that the team is doing on the M&A side is not yet seen in the results. Yes, we have some results, but I would not consider them actual M&A transactions, as the way we would understand it. So the fact that we've got a minority share in 8Wines, we don't see that as an M&A transaction even though, okay, it was a transaction. The increase in stake in Ecosmart, okay, it's an acquisition again, but it's not in the core business. Then we've acquired the Domeniile Cuza but it was more of an acquisition of assets. So we've acquired the vineyard that, that company had. So it was more of an asset acquisition. So the typical M&A transaction that we are referring to was the [indiscernible] we probably understanding what we discussed about M&A. We've done a very good effort in negotiating with the 2 companies. And these companies are in Republic of Moldova, Romania and are in Bulgaria. So this is the area that we're focusing on. We have some targets. Pretty much the target that we have in and in Moldova and in Romania and in Bulgaria are at this stage before the binding offer. In fact, with one, we've already done the due diligence because there was an acceptance of the nonbinding offer, but we're yet to see, based on the due diligence, the results, what the final offer will be and whether we want to put the final offer. But just giving you here sort of an insight to be to have a feeling of where we are. So we do have targets in all of these 3 markets. And in all of these 3 markets, we are close to a either binding offer or starting a due diligence process. So we are close to a potential transaction. Whether any of them will happen, I cannot say. But one thing that I can say is that -- we want to make sure that if we do make a transaction that is a transaction that is beneficial to the group and particularly when we compare the -- some of the multiples that we trade on, we want to make sure that the acquisition is done at multiples more favorable than the other. We trade also that sort of we, by default, simply through the transaction, we give our shareholders decent benefit. Some of these businesses are in a more solid situation, some are healthier, some are less healthy. So we expect that if you make a transaction, could be of a target which is relatively healthy when it comes to margins. But also there are targets which are very unhealthy when it comes to margin, but we see potential. So expect different -- if we do a transaction, but this could be -- this could take different shapes.

Sorry, can you repeat what market you're looking at for Romania?

Romania, Bulgaria, Moldova. And we have targets in each that are close to are close to, let's say, quite advanced -- close to a binding offer. But we haven't put forward any binding offer so far.

Regarding CapEx for -- the portion I've go, CapEx for 2022?

So CapEx 2022. So we are looking at total CapEx of around RON 40 million. However, why RON 40 million? Remember that we mentioned that we need to do 2 irrigation systems, so only the irrigation systems alone are around half of this CapEx. And then we are doing a relatively large CapEx at Crama Ceptura, which will receive 50% of reimbursement. So a good chunk of this investment, I will tell you even how much. So around RON 4 million to RON 5 million of what I've mentioned will be reimbursed to [indiscernible]. And if you remember from the previous -- when we discussed in previous presentation or conference calls like this, we'll discuss the necessity for investing in the irrigation systems. The mathematics is extremely simple, whereby investing and increasing the yield of the vineyards where the breakeven point of such an investment is around 3 years. So for us, let's say, the investment in irrigation is a no-brainer. It's something that we need to do and in fact any modern winery going forward and giving climate change should have this. We will be actually the first winery in Moldova to have irrigation systems, so Purcari and Bostavan will be the first ones to have irrigation systems. At the moment, there are irrigation systems for grape or vineyard, which are table grapes, not for making wine. But let's say, the irrigation system for technical grapes, we'll be the first ones in Moldova. to have such irrigation system. And we believe it's not only important for the future, but in fact, it will actually create even stronger margins going forward because of the increased yields from the vineyard that we manage.

In 2023, with CapEx, you mean, been very high?

Yes. No, no, no. We see things are falling strongly. We're looking at around RON 5 million going forward.

RON 5 million.

What can happen -- what could happen is because we -- of course, we are planning this CapEx spending in 2022 what could happen is that what I've mentioned now all the projects that we are initiating in 2022. What could happen is that some of these projects fall into 2023 and then some of the figure would be diminished this year and would be passed on to the next year. But other than that, we do not have major, let's say, CapEx planed for 2023 at the moment. Going forward, look, other directions that could, let's say, change this prognosis for CapEx that I've just mentioned for 2023 is if we decide to be more sustainable because we're working now on the ESG side. So working on having this audit internal audit when it comes to our situation and our position on the sustainability. We'll have a sustainability road map. And part of that, what we could have is that we may want to say, okay, we want to invest more in portable take panels and other maybe water recycling systems and this. But at the moment, based on less the maintenance because our maintenance CapEx is around the figure that I've mentioned [indiscernible].

So RON 5 million is maintenance CapEx?

Yes. Maintenance CapEx, yes.

And just a follow-up question on M&A side. Just what level of enterprise value to EBITDA are looking for when making the transaction? Or you already have some other multiple you're using making acquisitions? And do you have some target of that when making one?

Target on debt?

Yes. The target like when you were making acquisitions, so you'll go 60%, 40% equity or something like that.

Okay. Okay. Okay. So when we speak about multiples, it depends. In some cases, we can compare multiples, so we can -- the EBITDAs are positive. And we can say, okay, there's a multiple of X. But in some case, the EBITDA is negative, and then we may have to take a multiple of sales. Or in general, in fact, the approach that we have is not necessarily from a multiple perspective. It's our perspective of the assets that we acquire. So we're looking at vineyard, we're looking at the winery, we're looking at brands, we're looking at market share, and we're looking at opportunity costs. Because if we look at the markets such as Bulgaria, there is a strong business case to do greenfield where you recoup 50% to 90% of your investments through subsidies. So this is how we evaluate. We don't necessarily have a specific rule of doing multiples. For sure, we're not looking at buying higher multiples than the multiples than we have for Purcari already.

And just one more on the gross margin. So would you say going forward that gross margin would be lower than historical of plus 50%?

Yes. Yes. So we will have a pressure on the gross margin for the 2022 and, to some extent, potentially for 2023. We're looking at 2022 gross margin to be, let's say, 45% plus, minus -- more minus. So I would say somewhere between 40%, 45% or 40% and 47%, depending on how we manage to change that with price increases.

Would you say somehow in the future, you could manage to go also above 50%?

Normal business. So if we didn't have the very difficult year 2020. At the moment, we'll still be looking at a gross margin of around 50%.

Okay. That's it. The last question from my side -- so the last question. I didn't hear, I was somehow disconnected when you talked about Ukraine. Just what kind of implications does war in Ukraine impact your daily operations?

Well, it's true, this -- well, there's 3 implications. Number one is humanitarian. We have an office in Kyiv, and we have team also in -- team members in [indiscernible]. So we have people -- Ukrainian people that work for us in Ukraine. We have offered all the support required to bring them in Moldova to take care of them. So that's the humanitarian aspect, that's number one. Number two, the second aspect is sales. So at the moment, 4% of sales of the group is Ukraine. So there's this leeway of what the sales will be in 2022. It could be -- it could stay at 4% share of our sales, which means that we maintain our sales in Ukraine or it could become 0. For some reason, we're not able to export to Ukraine at all. So the impact #2 is sales. And impact #3 is the receivables. Well, at the moment, we do have some receivables from Ukraine, but they're not extremely significant to -- we need to take care of them, of course, and we are looking to collect them. And we'll have to see if the situation becomes -- or it stays difficult in Ukraine. They may appear on the audited accounts as a provision for an impairment on those receivables.

Can you comment how high these receivables would be?

Yes. So these receivables will be around RON 4.5 million. And by the way, here, I'm saying RON 4.5 million, it's 3 countries. Because we're looking at 3 countries that we are -- that we take into account as a risk at the moment. So #1 is Ukraine with RON 2.9 million, it's Russia with RON 700,000 and Belarus with RON 850,000. The good thing is that these -- all these receivables are in currencies such as euro or U.S. dollars. None of them are in local currencies.

Anything on the dividend? Can you say anything about dividends? And you're probably paying out of the net profit, excluding one-offs, where one-offs haven't worked. All the good ones.

Well, the policy -- our internal policy states that we give out up to 50%. We may decide even to do more than that. So we have managed to retain strong earnings in 2021. Our general intention -- so I cannot give too much information. But general intention is to give our dividend. However, let's remember 2020 when we had to hold on the dividend given the fact that there was this uncertainty ahead of us, which was the coronavirus. Now we have another uncertainty going forward. I cannot say that we have made a decision. So generally, the intention is to pay out a dividend, but we'll have to evaluate and to see if, and if yes, then how much of a dividend we want to issue. I'm sorry to not be more specific, and in fact, it's still internal discussion. But generally, of course -- look, generally, we want to keep paying our dividends because we just want -- we want to keep our stock attractive to our investors. The yields that it needs to be generated to our investors need to come both from the growth that we generate as a company and thus, the growth in the share price, but also through dividends. So generally, we want to keep that discipline of giving dividends every year. It's unfortunate that we have a second crisis in 2 years. Thank you so much. Okay. Are there any more questions?

Look, if there are no questions, maybe I'll make a very short closing remark we [indiscernible]. So of course, everything that is happening is real, unimaginable and believe it would be a little more [indiscernible] on the ground than from what you may see in the media. At the same time, I want to send the strong message that while we step up our involvement on humanitarian aid, because this is the right thing to do, our operations continue as normal. So we keep producing, we keep shipping, we have stilll the government to make sure that the borders are facilitated for the trucks to go. So everybody understands. We have [indiscernible] authorities, everybody understands that the business needs to run as usual. Business as usual. Now more than ever, we need this money. The country needs the export revenue. So in that sense, Purcari is doing very well. So there's no disruption on the operational side. I just want to make sure everybody understands that. Now in terms of what's next. Probably many of you think, okay, would Romanian be next? Would Moldova be next? So again, I think we won't be getting any more, but our strong view is that Moldova and, of course, even more so Romania, but let's talk about Moldova maybe there's where you have questions, is in a complete different [indiscernible] from Ukraine. Moldova has neutrality written its constitution, one. Second, Moldova doesn't fit Putin's narrative of [ de-nazzification ] and demilitarization. Our army is like 1,500 people, you understand. So we are like the Switzerland in Europe. So this completed the narrative. If it's not crazy enough to go after Moldova, then he just shows the whole world that what it's doing and Ukraine does it -- It's completely against his narrative, basically. So that being said, I think anything related to Moldova is extremely, extremely stable. Just want to make it that [indiscernible]. So for us, look, it's -- operationally, it's almost business as usual. Of course, we have to dedicate some resources to have the help people in need. We have tens of our colleagues who have hosted -- who are hosting refugees at home. So I think we have to do the right thing in that sense. But the message -- clear message to our employees is that now, more than ever, everybody has to step up. Everybody has to do his/her job as well as possible and contribute to the success of this region to the success of Moldova, to the success of Purcari by doing our work well, by making more money, by earning more money and showing that even in this region -- volatile region, unfortunately, you can build very successful businesses, which we have done until now. Every such crisis has -- get us stronger. In 2013, '14 we were on the brink of collapse when the war in Ukraine started. That led to a reinvention of our company. We went from 30% of sales dependent on Russia to 0% dependent on Russia. From '13 and '14, we grew at very high double-digit rates. Also because kind of we all mobilized, I feel the same kind of spirit this time around. So I'm very confident that several years down the road, we'll look back and will say that, "Look, this crisis was tough, like really put us to test, but the company has emerged stronger from it." So I want to give you this message, and I hope very might this will show in our share price, too. Thank you very much, everybody.

Thank you very much. Okay. Thank you, Vasile. I will not add further to that because I think the message is impact there by Vasile. I want to thank you all for the presence today. I want to thank you all for being beside us as investors. And now also, I want to encourage you to be beside the Ukrainian people with everything that you can to help this humanitarian crisis be passed in, so to say, the easiest way for the Ukrainian people possible. Thank you very much to everyone, and I wish you all health and a very good day. Thank you.