Welcome all. Some people just joined, so I think most people who want to join are now in the call. I will start the presentation. I've placed everybody on mute for now, as I will start by giving an introduction based on the slides that can be downloaded from our corporate website on the half year figures. I will share my screen in a minute to take you through the highlights of that presentation. I will try to limit my part of the story as an introduction to 30 minutes, so we at least have ample time to answer questions there might be. Please bear with me for the introduction through the sheets, and then I will give the opportunity to ask questions.
I hope you can all see my screen, and let me run you through the highlights of the profit and loss account for the half year. To start with the turnover development. What we've seen in sales is, of course, a tough first half year, once again, as a result of the impact of COVID on our markets. The restrictive measures in place, both in the Netherlands and Belgium, lasted for 20 weeks in the first six months of this year. In the Netherlands, we were not allowed to have private individuals shopping at Sligro, which we had the opportunity last year. All in all, a more tough environment in 2021 than we saw in 2020 even. That resulted in a total decline of sales of another 16% compared to 2020.
As of this year, during the COVID development, we started to compare quarters also to a pre-COVID level, so more or less 2019 levels. As you can see here also on the sheet, in the first quarter, we were still 43% behind on the pre-COVID levels. In the second quarter overall, we were 24% behind pre-COVID levels. Of course, in the second quarter, a remarkable difference between the first half and the second half, so to say. The first six to seven weeks of the second quarter were comparable to those of the first quarter. Still in full lockdown with the limited sales development, an amazing recovery in most of the segments in the second half of May and the month of June.
In the mix that ended up to the -24%. But towards the end of that period, we were already above 90%, so less than -10% on pre-COVID levels. That's of course a good development, which we expect that will continue also in the upcoming period. The mix has changed significantly. In customer segments, there were quite a lot of difference. The hospitality sector was hit very hard. The petrol segment, hospitality care and cure was hit less. Also in the mix between our cash-and-carry and delivery service, quite some difference as cash-and-carry continues to grow. Last year during COVID, also this year during COVID, year-over-year growth this year without private individuals, and last year they were still included. We compensate the loss of that turnover this year.
On the other end, of course, the big push downward from COVID is on the delivery side of the business. The mix which was moving over time towards a 70/30 split. 70% delivery, 30% cash-and-carry, is now back to almost 50/50, as a result of the growth in cash-and-carry and decline in delivery. We see that also on the next sheets in these graphs. If we compare the cash-and-carry development over the multiple years, we see a gradual increase. If we see the delivery and if we compare it in the 2020 setting to the 2019, you see the big dip as a result of last year as a result of COVID. Also on the green line, the recovery that we see in the second quarter, especially in the last part of the second quarter. Belgium, more or less similar pattern.
We show here the combination of cash-and-carry and delivery as our operations are set up in a hybrid mode. In the Netherlands, we have a clear split. Here, we see as from the second quarter onward, mid-second quarter onward, a gradual recovery moving towards the levels we saw in 2019. Overall, happy to see that we are in this trend. Of course, these big mix effects on sales also have an impact on gross margin development, more so in the Netherlands than in Belgium. In Belgium, we see a positive mix effect as a result of the cash-and-carry/ delivery mix. Cash-and-carry has taken a huge flight In the COVID period, a lot of new customers joined Sligro, which we, of course, aim to hold on to in the post-COVID period. In Belgium, the pressure was in delivery.
In the Netherlands, we see multiple mix effects. The positive one is also there. The improvement of cash-and-carry versus delivery. On the other end, we've seen that the tobacco segments were still doing quite well, even during COVID. Of course, tobacco sales for us is a need-to-have product in some specific customer segments. Of course, gross margin-wise, not very attractive. On the other end, our service turnover with a high gross margin. For instance, the deliveries on behalf of our partner HEINEKEN were close to zero in some of the months in this year. That had 100% gross margin. That depresses overall the gross margin. More lasting effect, of course, is the pressure on inventories and the wastage on that. We got to grips with that, even in COVID period.
Very limited pressure on gross margin as a result of increased shrinkage. Only a 0.1% impact of that. Moving in the right direction, and with the recovery of the market segments, those mix effects will, as we expect, be gone in the second half of the year to a large extent. We will see a further uptake of the gross margin and development going forward. Other operating income, not a spectacular difference compared to last year. Last year, we sold quite a lot of real estate, and on some objects, we had a small book profit totaling of EUR 3 million last year. This year, we sold one asset held for sale, so it was no longer in use. It was one of the last items on the balance sheet.
We sold that for EUR 6 million with a book profit of a bit over EUR 3.5 million in 2021. Under usual circumstances, other operating income is limited to around EUR 1 million, so really low. These book profits are, of course, more incidental of nature. No big effects to be expected going forward. We have a clean balance sheet, and we do not intend to have any major sale or leaseback transactions going forward. We will keep the portfolio as it is, as we expect for now. Of course, in times of extreme pressure on sales, and as a result, gross margin, we have to be very conscious on costs. You see here the effects of our efforts. Of course, this is also supported by the government grants for temporary wage support, which of course, has a significant impact.
As a benefit of that, we were able to hold on to the staff, which we now need in the restart phase of the business. Indeed, those measures have had the desired outcome as far as Sligro is concerned. Besides the support that we received, we also took quite a lot of measures to push down costs and in wages by not fulfilling vacancies, by postponing training, except for the bare necessities, if it concerns safety, for instance. Also in terms of re-engineering of the overall structure, we have pushed out quite a lot of cost. Integration of HEINEKEN has helped to do that. The integration of the De Kweker has pushed out quite a lot of overhead positions, but also reorganization of the supply chain, centralization from Belgium to the Netherlands has helped to put cost down, also in a more structural fashion.
Of course, going forward in a situation of growth, we should be able to benefit from those cost redesigns. As far as the support measures go, we don't expect to use any of it anymore as of the third quarter. The support we received on the first and the second quarter is what you see here, and we think it's limited to that. In Belgium, we might use some of the support, but to a very limited extent. No major effects to be expected going forward from that part. On the cost to sell, these are on the one hand, marketing expenses. On the other hand, the cost of customer events. The third cost of, for instance, bad debt. Well, the cost of bad debt was really low.
We didn't have any major breaches there. No big problems in the customer portfolio, which is a positive, and I think also the effect of the partnership that we have shown during this COVID crisis. We have reduced marketing expenses. Some of it temporary. Some of it more structural, as migrating from physical marketing equipment to digital, of course, also brings us a more structural cost saving. A big chunk of this decrease was caused by different types and different cost structure on customer events. As some of you may know, who knows Sligro, we organize large scale events for our customers multiple times a year: musicals, music concerts, big events. Of course, these were not possible during the COVID period. We organized alternatives with less cost than usual, and that also contributed.
From three areas, positive contribution on the cost to sell. As a result, this extremely low number that will normalize to some extent going forward. Of course, logistics as the last part that moves together with the development of delivery sales. On the one hand, we do see some increased costs as the volumes increase and there is scarcity in this market. On the other hand, we have used our partnerships with the transportation companies to make sure that we have access to sufficient transportation capacity. For that, during the COVID period when they were not in use, we compensated them with a fee for fixed costs totaling EUR 2 million in the first half of this year.
That investment proves to be worthwhile, because in this situation of scarcity, we have access at least to the fleet, which is important for us, of course, in the restart phase. Depreciation, amortization. The specialties are more in last year. Last year, of course, we had the impairment in Belgium. This year, no impairments. Overall, of course, as a result of reduced CapEx in last year and the beginning of this year, we see a gradual decrease of depreciation charges to the P&L. Financial income and expense. Worth mentioning that the associates, so the participations that we have, these companies have done also a little bit better in the first half of the year, resulting in higher contributions from associates for EUR 2 million. On the taxes overall, not a lot of specifics to mention. But underlying, we think, a very important quality improvement.
We have struck deals with the Belgian and Dutch tax authorities, resulting in a transfer pricing agreement for all the years up to and including 2019. We have settled all the older positions, and basically, we have got the opportunity to deduct all the startup losses that we had in Belgium from the Dutch tax position. That means from a cash flow perspective, that we don't have a huge receivable tax asset. That we immediately could convert it to cash by deducting it in the Dutch tax position. That will also be the situation going forward. That means that the losses incurred in Belgium can be transferred to the Netherlands. Once, of course, and we expect to do so, get Belgium to a profitable situation in the next years. Then, the excess profitability over a certain amount will be charged back to the Netherlands.
For us, a very good agreement from a cash flow perspective, but also to have the security that we know what we are heading for on this area. The cash flow statement. Of course, our focus point during the whole COVID crisis situation, generation of free cash flow. Again, we had a positive impulse in the first half of the year. A free cash flow total of EUR 40 million. As we are not allowed, as a result of using the government support measures to pay out any dividends on 2020 and 2021, we have used all of the free cash flow to reduce the debt position. That was, of course, to strengthen the balance sheet, which was, of course, sometimes under pressure during the COVID crisis.
I will skip a few slides on the segmentation and go through the financing side, because I already mentioned that the debt was further reduced. As a result, you also see that from a financing perspective, we are now clearly below the maximum covenant targets as we have set them with our funding partners. In the end, although we had created temporary waivers, we can conclude that in none of the formal measurement periods in the last one and a half years, we had to use those facilities or these extensions. We stayed well within the boundaries, and we are now further strengthening the position, of course, also looking a little bit ahead towards opportunities for consolidation in the market. Of course, in later years, restarting the dividend policy as we already knew it.
On this side, at least, although the bottom line results are not yet there at the desired levels. At least from a cash flow perspective, we have done a good job, we think. As a result, net profits still, of course, down. But already a significant step forward, even in a situation where we again lost quite a lot of sales. That is our model within Sligro, high operational leverage. With these volume losses, we see depressed results. We are also convinced that it works the other way around. Once volumes return, we can also convert that then in a fast recovery of profitability, and we expect to be able to show that in the second half of the year already. There may be some more qualitative effects. General economic developments for us, consumer confidence and employment rates are leading.
We see that as we are getting out of this COVID crisis gradually. Still some uncertainty, of course, especially lately, again with new Delta variants, et cetera. Overall, we see that people are recovering from the harsh situation that we've experienced in the last 1.5 years. We also see that with temporary uptake of unemployment, we are again going down. That, I think, is fully reflected in what we also experience in the market, a shortage in staff, both for the warehousing environment, truck drivers, et cetera. I will come back on the Belgian situation a bit later, but more or less similar pattern. What did we do in the Netherlands? Of course, try to stay focused on cost reduction and cash management, be very selective in the ambitions on the big programmes that we had.
Continue on SAP, continue on HEINEKEN, of course, the last parts, and some other topics. For the rest, full focus on the business and cost management. One thing that we've changed, for instance, in the operational model, is to improve our food and vegetable proposition, which is a large part of the turnover and an important group for many of our customers. Together with our partner, Smeding, to make that more effective for the market. On HEINEKEN, I think we've spoken a lot on this. Most of you know, of course, what we were aiming for. We're very happy to see that we could restart with many of our customers in a new situation where they can order everything they like on one platform, have one delivery and one invoice.
We see that the customers are very happy in that situation, and we see some positive side effects now in this restart phase that customers that are already serviced by Sligro for the beer and cider portfolio of HEINEKEN, naturally find their way to ordering other products. That's, of course, one of the big parts of our business case that these customers buy more at Sligro once they have to order through one portal for their beer portfolio. The first results on that part are really promising, and we are very confident that we can make our business case assumptions in the next years. If we look to the customer satisfaction and the overall view on the cash-and-carry, we have a programme focused on both offline and online improvements, as you can see on the right-hand side.
We continue to make progress on all of these axes, resulting, we think, also in a positive development in the cash-and-carry environment, which is, of course, helped also a little bit by the COVID situation. Two years in a row, growth in the cash-and-carry environment, also now the big effects of COVID seem to be gone. We were able to hold on to the renewed customer base that we have found in the cash-and-carry. That, of course, very promising for us. We also restarted the conversion. We put that to a halt as one of the measures in the COVID times. We restarted that programme with some small scale projects in the first half of the year.
Now, as of the third quarter, we are starting the refurbishment of the older outlets to the 3.0 format, starting in Heerlen and later also in Arnhem this year. On delivery side, of course, this was the segment which was hit hardest by COVID. We see an extreme recovery in last weeks, and we spent a lot of time on preparing for that because, of course, together with our customers, we have made many forecasts to make sure that we have product availability, transport availability, and staffing in the warehousing. It is highly under pressure in the market with a lot of scarcity. We feel we have things under control. If we compare ourselves to our competitors in the market, I think we're doing a good and maybe even better job than them, which of course, will strengthen and reinforce our leading position in the market.
Here in the network, we did some changes already, preparing for an integration of the fish production company in Belgium into that of the Netherlands. That's fully finalized. Everything is settled also in Belgium in terms of the lease, and also the staff that needed to go as a result of this closure. That's all done and also scheduled for the remainder of the year is some further changes in the network and a renewal of our fresh distribution center. Still, we expect that the CapEx will be rather limited in the second half of the year, so totaling to roughly EUR 20 million. Of course, if you compare it to recent years, a much lower CapEx number than we were used to. That's going to be more normalized also in the years ahead.
Developments in Belgium, well, similar picture on consumer confidence development, a bit strange and unnatural movement as we see it, at least on the unemployment rate in Belgium. We are not sure. We can only guess. It seems that there's a tendency not to be on the payroll, but still go to work on the side a little bit. That seems to be the major effect because we experience the same levels of scarcity and availability of staffing in the Belgium market as we do in the Netherlands. These figures do not fully reflect what we experience in the actual market today. In Belgium, also there, a big uptake on the cash-and-carry side, of course, also important for our outlets in Ghent, Liège, and Antwerp. Growth in cash-and-carry, but of course, delivery also there fully down.
We try to focus on improving both, of course. Now, business also returns in Belgium. We can again restart there as well and show further growth. There in the network. We completed the adjustments in the Antwerp locations, so more room for delivery and reduced the number of square meters for cash-and-carry, which fits the operational model there, we think. The dismantling of Océan Marée, as already mentioned. We are now in the process of preparing for a delivery center in Ghent and a new cash-and-carry in Leuven. As we have experienced, as a result of lengthy permit system, that is the process we are in now. We will see when we can actually commence in building those locations. Both of them well on the way. Some things that are more for the group as a whole.
Of course, we are working on the new IT platform, for which we have the overall programme name [HANA], as you can see here, but it of course also involves the SAP launch. After the new website launch last year, we launched a new article master data environment in the beginning of this year. What we planned initially is to go live with the core ERP system in Belgium in at least one location before summer, and we didn't make it to achieve that. That is the result of a combination of things. One, the complexity of the integration. I think in timing, we underestimated that complexity a bit. We are on the right track. The system that we are building is robust and of good quality, but it takes a bit longer to factor in all the items that we need.
That is cause of a delay in that sense. Also, which is not helpful, is of course, the restrictive measures as a result of the lockdown, especially if you are in a rollout phase and preparing for testing and training. It is highly inconvenient to do everything from behind the screen. Bringing people together is an important part of this. If we look forward, then we think that we should not try and force it into the second half of 2021 for two reasons. One, there are still some work to do, and we don't want to do any concessions on testing the system to make sure that we don't expose our customers to any potential problems as a result of this migration.
On the other end, we are fully focused on restarting the business after a period of COVID. That also requires a lot of attention, also to some extent of the people that are involved in this project. We have decided to pull that over the 2021 border into 2022, and then we expect to go live with all the Belgium outlets in the course of the year. Also a lot of attention towards our team and our people. We already had a programme for that pre-COVID, but it proved to be even more effective and worthwhile and necessary during COVID to keep everybody on board, to keep everybody motivated and safe in that situation. I think if we compare ourselves to benchmarks in the market, we did a good job by holding on to the level of satisfaction that we had.
With the overall number, we're still not satisfied and there's room for further improvement. The things we have done are highly appreciated by our staff. We tried to avoid pressure on the staff during the COVID period, that's what we get in return today. I think a good development on that perspective. My last slide on the outlook. If we look to the market conditions, yes, we do see, of course, some increased uncertainty around new variants coming in. We do, however, also see some positives in the combination of the vaccination strategy in Western Europe and the fact that that does not lead to huge numbers in the hospitals. Of course, we are not doctors, we have to see what happens. For now, we plan on scenarios where there are no large scale reintroductions of restrictive measures.
That means that in most of the segments that we operate in, we will see a recovery towards 2019 levels in the second half of 2021, which is, of course, a very big step forward for us. We also see that this is paired with quite an uptick in inflation. In the beginning of the year, we saw very limited movement in that area. That has clearly increased. We see now that as a percentage of sales, overall cost inflation could go up towards 1 percentage point, which is significant, and 3x - 4x the levels that we're used to experiencing in normal times. Quite an uptick of inflation. Fortunately for us, the structure of our market is so that we can typically pass on inflation towards further parties in the chain.
At this moment, if we see what's happening on the consumer side. Our customers, they are really pricing in some of the effects of COVID they've experienced. That's not just price increase, but also the opportunity to price in to gain back some of the revenues and earnings lost. There's also a widespread acceptance among consumers for this. People are actually happy or proud to pay a little bit more. There's money because everybody saved money in the last couple of years. For the next 6-12 months, we don't foresee that that will be a problem. We can keep passing on through the chain this type of inflation. On the other hand, we know that at some point, of course, that will change. That will lead to some form of recession.
We don't think that's on the really short term, but somewhere towards the end of 2022. Maybe beginning of 2023, there might be a small dip in the market as a result of some further decline in the spending of consumers. Of course, visibility still remains low. We do expect a significant recovery of sales in the second half of the year, and we do expect to go out with a profit this year in total. Yeah, with all the uncertainties and with also from our side less visibility than usual, it is not wise for us to make any firm predictions on the results of this year. We will not do that. That concludes my introduction based on the presentation, and we can now switch to questions if you'd like.
I can see all the participants in my screen. If you use the hand facility in Teams, for those who know it, then please use it. I will give you the opportunity to ask questions. Please go ahead if you like. I see [Christophe] with a question, and if you can unmute yourself, [Christophe].
Yeah.
Question. Yes, go ahead.
Hey. Very quick question is simply, can you give a bit more insight on, of course, we have visibility on how H1 did. It's clear that the last six weeks did contribute to most, let's say, in terms of kicking in operating leverage? Can you a bit guide us how the result for that month was?
Yep. Yeah. I think I mentioned this before. In the pre-COVID situation, we had an EBITDA of roughly EUR 120 million-EUR 130 million. If our sales return to those levels, then we will go back to those levels. On a monthly basis, on average, EUR 10 million or so. We've seen that recovery in June immediately led us to those levels again. We were helped, of course, a little bit in June with the book profit, which made the result even a bit better. Yeah, we see that we can return to the normal levels we saw in 2019, at least. Of course, that's still not at 100% turnover.
Yeah.
Relatively, we're doing a bit better there even.
Yeah. That's absolutely, of course, but and in terms of relatively?
Well, yeah. Relatively that leads towards a 5.5% EBITDA level, where, of course, our longer-term target is to go to 7.5%. We're not there yet. At least, of course, recovery from almost 0% in the last months to jumping back to those levels again is, of course, promising. We remain on our target for the next three, four years to reach those levels of 7.5%. That we reconfirm, but that's still a way to go from where we are today, but at least we're going back to the levels we've seen already in 2019.
Okay. Then one last question, and then we'll queue in. Océan Marée, let's say, the building, is it owned by Sligro?
No, that was a lease.
Okay.
We have already settled the lease, and the provision for that was also part of the provision that we took in 2020. Both on the staffing side as on the dismantling of the lease and other items as a result of this closure, they are all incorporated in the 2020 figures already. We don't expect any further cost in this year as a result of that.
Okay, perfect. Thanks.
All right. I see a question of [Dirk]. [Dirk], if you can unmute yourself and you can ask your question.
Yes. Thank you. A question in regards to the gross margin. For the full year last year, you gave a split between the positive and negative effect in figures for tobacco between cash-and-carry. I don't know if you can provide something similar in the first half, for this year, which was a positive effect?
Yep. Yeah, it is more or less the same type of effects. These mix effects are almost similar to what we showed last year. We've seen that the tobacco percentage, which is usually around 10% in our mix, is now up towards above 15% in the first half of the year, because of this mix impact. Of course, yeah, gross margin on tobacco is less than 2%. That's a big depression on the mix. On the other hand, we have the service fees. For instance, for HEINEKEN, that means 100% gross profit as a percentage of sales. These were down to almost 0% in the first four or five months of this year. That had also a big impact.
We expect already that in the second half of the year, that will be normalized quite a lot, where, of course, we've seen gross margin percentage for the group above 25% even. We expect that we will return to those levels in the second half of the year quite fast.
If we go a bit longer term, because you have the balance now between delivery, cash-and-carry, which was distorted by COVID.
Yeah.
How do you see that evolving in the future? Also relating then the impact there on the gross margin?
We think that the longer-term trend is towards a more 70%/30% split. 70% delivery and a 30% cash-and-carry. At this moment, our efforts are focused, of course, on improving also the margins, not only gross margins, but also bottom-line margins in the delivery side. If we return to more normal situation, we don't expect a big further dilution on gross margin levels as a result of that mix change. We think that somewhere around 30/70 will be more or less. Yeah. I won't call it an optimum situation, but a more equilibrium that is more or less also representing the level in the market. That is what we think will happen, more or less.
Because I thought in the past at some point you mentioned gross margins. We have to take as from 2019 adds 20 basis points, 30 basis points per year. Is that still something trajectory that you see or?
Yeah. In general, yes, because that's more or less just the development of the pricing, and the improvement of our purchasing conditions lead more or less to a effect of 20 basis points- 30 basis points a year. Yeah.
So we should-
The underlying effect, we've also seen such improvement this year. Of course, with these strange mixes in volumes and you can imagine that there are big differences in types of articles, on which you do have those effects and not. Like for instance, very low on tobacco, better on fresh produce. These mix effects now, of course, distort the picture. Quite a lot even. In a normalized situation, the underlying improvement is as you mentioned. Yeah.
We can easily assume for the future to support the 7.5% EBITDA that you would have at least-
Yeah.
... more than 25% gross margin?
Yep.
Okay. Thank you.
Okay. I see a question by [Hans]. [Hans], if you can unmute yourself, then you can ask your question.
Yes. Thank you, Rob.
I'm sorry, [Hans]. I'm not able to hear you. I don't know if that's just me, I hope not? Can you repeat? Yeah, now I can hear you.
Now it's better?
Yes.
Thank you. I've understood the tax rate you were referring to going forward. You made some comments, the effects, with the arrangements you made with the Dutch and the Belgian tax base. Could you please repeat what you expect, going forward?
Yeah. It was a little bit scattered, your question, but I will repeat it and you can nod if it's okay. You want me to repeat what we agreed with the tax authorities and especially for the way going forward, right? Yes. What we agreed that, we have a very simple transfer pricing set up per scheme, where we basically determine based on the risk profile of the Belgian activities, and c ompare to what we do in the headquarters in the Netherlands, what the level of profitability from a fiscal perspective could be in Belgium as a percentage of sales. That's going to be fixed.
From a fiscal perspective, a fixed percentage of sales will be the taxable amount in Belgium. If Belgium, from a commercial perspective, makes for instance, a loss, then the difference between that loss and that normative percentage of sales is transferred to the Netherlands. Then that is then deducted from the Dutch tax position, and we can immediately regain that tax asset. In future, if we are profitable in Belgium, from a fiscal perspective, that will be topped then at that same percentage. All the excess profit will be transferred to the Netherlands as well, and will be taxed in the Netherlands. That's the agreement that they've made. That leads to one-off taxation for Sligro. In this stage of startup losses, immediate compensation of the tax assets. From a cash perspective, for us, that's very convenient.
What we will do in our reporting, we will simply report the commercial results, of course. Then explain, in the tax paragraph how that translates because, of course, from a commercial perspective that would be a very easy target for our Belgian colleagues, because they know upfront what the profitability will be. We will show the actual commercial development. From a tax perspective, we know that we can use this very simple methodology.
Which does not help us to put a general overall tax rate, or it should be so over the last six months?
I'm sorry. Could you repeat that question, please?
It's scattered, I suppose.
Yep.
Tax rate you had over the last six months, a tax we could relate for the next six months or the next year-
Indeed, the visible lane in the normal P&L and reporting cycle, the visible tax position, it will remain the same, as you've also seen it historically. The rates between Belgium and the Netherlands are also the same. From a commercial perspective, we will report as we have done so in the past. It is a completely technical exercise behind the screens, which we will of course disclose also with our annual accounts on how that is transferred. From a commercial perspective, you can see it. In the end, the net result is more or less taxed on 25%, with a small number of facilities that lower the tax percentage a little bit.
If we remain on that, I think the last couple of years, roughly 23% on the results without associates, that is more or less the level that we project. No major changes there. The rest is just a shift between the Netherlands and Belgium from a tax perspective, but nothing material from a P&L commercial perspective.
Thank you.
All right. Okay, I see no people signaling, at least at this moment, with any questions. If you have any further questions, just put up the hand. [Dirk] has another question. Please go ahead.
Yes. Thank you. CapEx, you mentioned in the second half, EUR 20 million. I believe that was purely for the Netherlands and for the second half, or is that a year figure?
No. In the first half of the year, we roughly had a EUR 15 million gross CapEx. Then, the EUR 6 million-
Sale
... sale of that Van Hoeckel location. I think in the second half, we will have a roughly EUR 20 million CapEx level. Going forward, as I already guided, I think somewhere between 2%, max 2.5% of sales is the level going forward. That includes everything, maintenance, CapEx, refurbishment of the outlets, and every now and then a new location that's part of our business model. The area EUR 45 million, EUR 50 million CapEx a year for the next three, four years is more or less the average that you can expect.
That includes all the programmes, the IT programmes-
Yeah.
The refurbishment as well? Okay.
Yeah.
In terms of further question on operating cash flow, the working capital, I had the impression that was still very positive contribution in the first half. Is that correct, and how do you see that evolving?
Yes, that's correct. We see that each time when we go into a downturn in the COVID period, that's negative for working capital. Once we start increasing again, it's positive. We're still in that increase. More than the overall gain in working capital occurred in the last five, six weeks of the first half year.
Okay.
That's because we simply start buying more, and we have a 60-day payment term with most of our suppliers. Our customers have a short payment term. That reduces working capital, so that's a positive cash impact. We're still in that ramp-up. That's a positive on that side. What is going to be a negative in the second half of the year is that we use the opportunity at the end of 2020 to postpone tax payments on the fourth quarter, and that's a little over EUR 30 million. That's still on the balance sheet as per 30/06. We will repay that in July and August. By the end of August, we will have completely repaid that outstanding debt position. That's a little over EUR 30 million in drain on working capital.
Still overall, I feel confident that we can have a net slight positive impact on working capital also in the second half of the year.
Yeah. Is it fair to assume that the second half in total of free cash flow will be similar to first half, or it will lower because you have higher CapEx a bit, but operating should be better?
Well, I think we would have a better operating result. I think more or less a similar effect would be reasonable to expect. Indeed, a different setup. A bit less from working capital, a bit more from actual operations. Higher EBITDA levels. A bit increase in CapEx levels, but potentially with the same outcome on a net basis indeed. Yep.
Okay. Thank you.
That's not a strange assumption, no.
Okay.
Okay, I see another question by Hans. Go ahead, Hans.
Yes, I'm unmuted, I guess now.
Yeah.
How do you see the market in terms of M&A potential? We are, well, being out of the depth of market circumstances. I suppose you have a better view on how competition is evolving, what competition is doing well, other that might stop or be in a weaker position? Are we seeing opportunities in the Netherlands?
Well, indeed, we see opportunities both in the Netherlands and in Belgium. I think it's all of the usual suspects, I would say, as we've mentioned before. We see quite a number of mid-size players in the Dutch and Belgian market that have been struggling with COVID, as everybody in this segment, of course. What we see now in the restart phase. That many of them are also struggling to restart business, as it requires an investment in inventory levels. It requires investing in the capacity for transportation and employees in an inflationary environment. Market conditions are, of course, from a volume perspective, tremendously improved. From a inflationary and scarcity, quite challenging. Relatively, we are one of the stronger players now in the market.
Although also we had some tough times, our balance sheet is in the meantime quite healthy. That's not the same for all of the competitors. We think the pressure will increase in the next period. We'd be very surprised if in the next 6 - 12 months there won't be any deals out in the market. We at least done our homework on this, so we have all our files updated. All our contacts restored. We've reached out to some of those players and said, "Well, okay, if there's anything you would like to discuss, you know where we are." I think the market, the players are aware that we would be interested to be a buyer in case they want to sell. Now we just have to wait and see a little bit on who will jump first.
We will be actively seeking opportunities if they occur. Yeah.
Okay. Thank you, [Sir].
Okay. Any remaining questions going forward from one of you? I see no new remarks. Okay then. I would like to thank you all for joining in on this call. I hope I gave you a good overview on where we are, and you had the opportunity to ask all your questions. I hope to speak to you somewhere later this year, either in an event or a call or whatever situation. Hopefully a little bit more in a physical environment as well, because that would signal that we are indeed on the improvement track in our regions. Thank you for listening in. For those who are going to enjoy their holidays, enjoy them. Hope to see you in good health soon. Thanks for your attention and until next time.