Thank you. Thank you everyone, and good afternoon, and thank you for joining today's call on the Nine Months 2021 Results of Newlat Food S.p.A. I'm Benedetta Mastrolia, I'm Investor Relations at Newlat. Joining me today to discuss the results are Angelo Mastrolia, our Executive Chairman, Giuseppe Mastrolia, CEO and Chief Commercial Officer, Rocco Sergi, CFO, and Fabio Fazzari, Group Financial Director at Newlat Group. Before we start, I would like to remind you that this presentation may contain certain forward-looking statements that reflect the company's management's current views with respect to future events and financial and operational performance of the company and its subsidiaries. These forward-looking statements are based on Newlat Food S.p.A.'s current expectations and projections about those future events.
Any reference to past performance of Newlat Food shall not be taken as a representation or indication that such performance will continue in the future. Now we move on to slide three, where the actual presentation starts. We have the key financial highlights for the period. Revenues. Starting from revenues, we have consolidated revenues in 2021 of EUR 383.2 million, which show an increase vs last year, where we had EUR 325.7 million in revenues. If you look at the pro forma revenues, which actually include both Symington's and CLI from the 1st of January , 2020, we see that the revenues were 420...
GBP 52.5 million in 2021, which is a decrease of 2.2% vs the first nine months of 2020. Despite the small decrease, we actually had very good results if we take into consideration that last year we had an exceptional growth and we actually recorded some very good growth in some specific business units or areas such as Vero, where we had an increase of 21.1%, despite we also had a very strong increase last year and even the year before. We've been growing basically double-digit every year for the past 4 or 5 years in this particular business unit, and we're really happy that we continue this growth.
We also had a very good growth in Germany, where we grew 4.6%, despite the fact that last year, actually, Germany grew the most. This year we were able to even further increase our revenues there. In terms of Q3, we can see sort of a change of direction in terms of growth. We actually at Newlat level registered a growth of 3%, which kinda counterbalances the first six months performance where we had a slight decrease in sales. As a result, we can see that the first nine months, the organic growth of Newlat Food was actually just -1.7%. It was a much lower decrease vs the 3.9% that we recorded in the first six months of the year.
Now we move on to EBITDA. EBITDA at consolidated level was EUR 36.4 million vs EUR 36 million in 2020. We recorded a pre pro forma EBITDA of EUR 43.5 million and a pro forma EBITDA margin of 9.6%, apologies. There was a slight decrease in the pro forma EBITDA and pro forma EBITDA margin, but these were not as huge if we compare these to even the reduction in sales, the sort of natural reduction in sales that we had. EBIT, so we see that the consolidated EBIT was EUR 16.6 million vs EUR 9.5 million in 2020, and we had a return on sales of 5.3% vs 4.8% last year.
Net income, the consolidated net income was GBP 11.5 million, which is an increase of 9.8% vs last year. The pro forma net income was 11.9 million, which compares to the 13.7 million recorded in the first nine months of 2020. The return on equity was 7.7% vs 8.6% last year. Free cash flow was equal to GBP 9.8 million. We had an EBITDA free cash flow conversion of 66%, which is slightly lower than our average, but this is actually a positive result for us because we actually invested in working capital in order to increase the loyalty of our key suppliers since we've been in a period of shortage of raw materials.
We tried to shorten the DPOs in order to sort of have raw materials in order to, you know, keep our sales stable to actually as you can see, we've actually been able to increase our sales in this period. It was a good strategy which didn't really affect our free cash flow. Net financial position is equal to EUR -72.8 million vs EUR -83.1 million in 2020 on the pro forma for financial year 2020 on the pro forma basis. If we look at net financial position without the effect of IFRS 16 lease liabilities, it would have been equal to EUR -34.2 million.
Now we move on to the next few slides, where we can see some of the key actions in terms of marketing and commercial activities that we've done in the last months. As you will be able to tell, we've been working a lot on the sort of Symington's integration and the launch of the Naked, especially the Naked brand or the U.K. brand into our reference markets, which are Italy and Germany especially, but we're also working on the export side of things. We've been working really hard on this, and we've been able actually to secure already a place for Naked at the Esselunga supermarket in Italy starting from March 2022.
We'll be able to sell these products in one of the largest supermarkets in Italy, which is Esselunga. At the same time, we've been working on trade presentations, which will go out by the end of November. We think it's in the next two weeks, our commercial teams will start presenting the Naked range both in Italy and in Germany. We're looking to launch these products, so the whole noodle and rice range both in Germany and in Italy at the most important retailers in both countries. We estimate that the launch date would be around end of March, beginning of April 2022. We've also been working on the sort of export of the existing pre-existing Newlat products into the U.K. market.
We've been working especially on the Delverde brand. We will launch actually this brand into the U.K. market at the top four British retailers, and we already secured a place a few days ago with Lidl. We're really excited about this opportunity that we had with the arrival of Jim and Dan so that you actually grow in this market. Update on the baby food contracts. As we mentioned last time, we've actually finally started to produce the commercial products of the baby food contracts. We started at the end of October, beginning of November.
We also have been working on our own baby food range, which is the Mukki Bimbo range, which is both powder and liquid milk for babies under the Mukki brand, which is very well-known, especially in Tuscany. It's been doing really well at Co-op. I'll show you some pictures later. We also launched the Optimus lactose-free mascarpone. So Optimus is one of the top SKUs, top mascarpone brands in Italy. So of course, it was the next step for us to launch a lactose-free product, which has been doing really well. We are also working since there's been such an increase in sales in the dairy business.
We are working on installing a new production line, which will increase the production capacity for mascarpone and, of course, enable us to even grow further in this market. We're also working on plant-based drinks. We're launching some new recipes such as coconut and almond or organic almonds, organic oats, et cetera. We're trying to enlarge our plant-based presence. We also started a new Naked campaign. We also started having the campaign shown on buses in London and in Manchester. We also opened a pop-up shop called Remedy Rooms, which was in Shoreditch, London, and where people could go and try the products but also cleanse yourself.
I'll just show you the picture, which is easier to see. You could go here and sort of cleanse yourself from other noodles that you tried before, and actually try the best noodles which were the, of course, Naked Noodle products. It was a really good strategy. It drew a lot of attention from local people there, and it was really well-accepted. We're also working on the Mug Shot recyclable packaging. We launched the 100% recyclable packaging for Mug Shot, which is HPP, which is not really easily recyclable. And we're also working, which is more of a thing that hasn't happened yet, but will happen in the future, is we are working on a Naked premium range.
Something that is even more premium than Naked, which is already considered as a premium brand. We're trying to launch an even more premium brand, range, which will launch in 2022. Here are some of the pictures of what we've done. These are the buses that have been going around in London and Manchester. Some ads that you see. This is the Remedy Rooms. Here is a picture of the Mukki Bimbo range in stores and also a picture of the Mug Shot recyclable packaging. Now we move on to slide six, where we have an update on raw materials, which is quite positive because we have seen a durum wheat prices are starting to stabilize.
We've been able to stabilize our effective raw material costs and renegotiate with clients. We've also already defined sort of an action for next year in order to ensure a cost pass-through and not suffer from, you know, this year's hike in prices, sorry. We will also see a benefit from the price increases in Q4, probably. Milk and cream is pretty straightforward, so we've seen prices quite in line with expectations, so we haven't had any particular impacts on this side.
We also started to work in a strategic procurement plan for 2022, in order not to be unprepared in case something happens. Now we move on to the next slide, which is quite new for us to show, which is our ESG sort of actions and things that we've done in the last month. In terms of environment, we've been working on packaging and really trying to improve our packaging. We switched from the classic Tetra Pak to Tetra Rex plant-based and rPET packaging. These will drive down the CO2 emissions of our products. For example, we will only have 19 grams of CO2 equivalent per liter for the Tetra Rex pack.
also we will reduce around 25% of CO2 emissions on our milk products. We're trying to reduce plastic as much as possible, so we have decreased our plastic utilization by 10%. from 2021, we've been using plant-based packaging, which is only certified with a Carbon Trust Zero emission certificate. logistic-wise, we already shared this actually before. We've been trying to transport more via trains instead of trucks, and this has lowered our impact in terms of logistics as well, and we're trying to increase this even this year.
If we move on to social, we have some innovation, some things that we've been working on with R&D, such as the launch of the a2 Milk, which is a special milk, that's naturally more digestible than normal milk, which is basically very good even for people that are lactose intolerant. We've been working with only farms that are animal welfare certified, which is also an interesting thing to mention. We are working on some plant-based special formulas for baby food as well. In communication, we've been working with schools especially. We've been allowing schools to visit our plants and also the farms from where we procure our milk.
We give them talks about nutrition and food culture in general, and it's a very well-perceived initiative from schools, especially for younger children. We've been working also with Banco Alimentare and other local charity organizations to manage product surplus. We've been trying to donate the food that would otherwise go to waste to these services. Move on to the governance part, we have a look at the board of directors. Just a reminder that the board of directors has three independent members who are Eric Sandrin, who's the General Counsel at Kering, Valentina Montanari, CFO for Rivian Milano, and Cristina Zoppi, the Director and member of the control committee of Intesa Sanpaolo.
We have three women on the board of directors out of seven, and four out of seven members of the board are non-family members, so they're not linked to the family, so there's actually no prevalence of family on the board. The very last point, which is quite interesting, is that we've been working on the ESG committee. We've been working on this for the last few months. The committee is being coordinated by a very experienced manager in this field that was working at Big Four before. We also have seven managers that are working on this. They all come from different experiences and different expertises such as operations, HR, finance, investor relations, quality and branding and R&D, and budgeting and marketing.
We've been really trying to sort of gather all different experiences to really bring something into this committee so in order to shape our ESG priorities for next years. Now we move on to the sales breakdown and analysis. On slide nine, we have the just a very quick comment on the overall revenues. We're looking, of course, at the pro forma revenues as always. As I mentioned earlier, we had a decrease in sales of 2.2%, and this was impacted by different things. On one hand, we actually had a very good quarter, as I mentioned, which helped sort of the decline that we saw in previous months to slow down.
In fact, we had a good result compared to the last report that we published. In general, we had still an increase in marketing and in-store promotional activities to sort of support this period, which was impacted, of course, by the sort of lifting of COVID restrictions. Again, just saying, it's actually a good result if we take into account all these different things that came into play in this period. If we look at the consolidated figures, we had a CAGR on the last three years of 8 +1.8%. Excluding Symington's, we actually had a good growth despite all these external factors.
Now we move on to slide 10, where we have the Q3 sales breakdown, where you can see actually how we've managed to basically increase our sales in virtually all of our business units except for pasta and the instant noodles, Symington's businesses. We actually have you know an overall organic growth at unit level of 3%. The sort of decrease in these two business units was quite natural because of the very good results that we had in Q3 last year, both at Newlat's pasta level and instant noodles and Symington's level. Q3 2020, we had the record high sales for pasta in our history of Newlat.
So of course we had a decrease here, but it was not huge, and it didn't really impact the overall nine months performance. As you will see actually pasta grew a bit in the nine months compared to last year. If we look at dairy again, we had an extraordinary growth of 44.2%. This again follows the very good performance of the mascarpone business, which we have been trying to invest on even more and to grow in this market even further. Just a quick comment. Symington's, of course, it...
Symington's, especially because it's in the U.K., was impacted by the lifting of COVID restrictions, because as you know, probably U.K. is one of the countries in which the COVID restrictions were actually lifted. Of course, that impacted sort of grocery shopping and eating at home or just eating ready-made foods to favor sort of restaurant eating at restaurants, etc. Now we move on to the revenue breakdown by business unit of the whole nine months. Here you can see that there is this different sort of breakdown even in terms of sales, because now with Symington's, with the Symington's acquisition, we actually have 90% of sales which account for Symington's. Pasta is just 23.2, 27%.
We have milk products, which are still our biggest business unit, which is 38.24% of revenue. We've sort of had a different weight now because of the acquisition. The pasta sales increased slightly in this case, as I already said, increased by 0.6%. This is mainly due to the increase in sales in Germany. We had sort of a counterbalance because of the decrease in sales in the B2B business in Italy and a decrease in private label sales for the rest of the world. Milk decreased by 5.9% as a result of just lower sales and higher promotional activity vs last year. Bakery products contracted slightly.
It wasn't actually a relevant decrease. Dairy products, as I already mentioned, increased 21.1%. This was both just organic sales volumes increase, but also the acquisition of new clients. We work with and sort of developing our existing market and working with new clients. Special products remain substantially unchanged vs last year. Symington's, the Symington's products or what is called here Symington's instant noodles products decreased by 4.3% as a result of the U.K. market having a lower demand vs last year. If we move on to distribution channels, there was sort of a decrease in most distribution channels. Again, this is a natural effect of this period.
We had a decrease in large-scale distribution of 2.5%, especially for the milk sector, in which we work a lot on in the large-scale retailers channel. B2B partners also decreased, especially as a result of lower pasta sales. We have normal trade which remained quite stable. Private label decreased slightly as well. Private label, however, now accounts for over 17% of our sales, vs before, which was around 8% because of the Symington's acquisition. As you know, they produce quite a lot of private label bakery especially. Just to highlight it. Food service also decreased by 10.3% as a result of a decrease in the milk sector.
Now we move on to the geography side, which is slide 13. In terms of geographies, as I mentioned earlier, Germany was the geography that performed the best, and it increased 4.6% vs last year. Italy decreased 3.5% as a result of the decrease of both milk and pasta sales. Other markets, which include the U.K. market, decreased by 3.5% as a result of lower sales in the Symington's business especially. Now we move on to the EBITDA, the pro forma EBITDA figures by business unit, the breakdown by business unit.
As I already mentioned, there was a slight decrease in EBITDA and also in EBITDA margin, which was 9.6% vs 9.8% last year. The pasta EBITDA went from GBP 8 million to GBP 7.1 million in 2021. The milk products EBITDA was down as well compared to last year, and the EBITDA was 9.2%. The Bakery Product segment actually increased slightly because of the better mixed contribution, and the EBITDA margin was 15.6%. Dairy products also increased as a result of the increase in sales volumes and in particular of sales volumes of mascarpone. We had a very good increase also in the EBITDA margin, which was 15.6%.
The EBITDA for special products remained in line with last year. The Symington's EBITDA remains pretty much in line with last year, but there was actually an increase in EBITDA margin, which went up to 10.8%. The last part, which is other products, there was sort of not a huge change between last year and this year in terms of other products EBITDA. Now we move on to slide 15, which is the free cash flow and net financial position improvement slide. As mentioned earlier, Newlat Food tried to work on its net working capital in order to increase the supply of raw materials by suppliers.
We took the decision to reduce DPOs in order to improve this raw material procurement. This allowed us not only to get raw materials, but we also get better prices because we were paying faster. There's another point here, which is the Symington's working capital. Of course, the Symington working capital isn't in line with the usual Newlat Food working capital. We expect a material improvement of the Symington's working capital in the next quarters and to have sort of a harmonization of the working capital policy between Newlat and Symington.
Also another thing worth mentioning is that part of the free cash flow has been used to buy back 1.559 million shares with a total investment of EUR 7.6 million. We could consider this as the dividend shares with around 2.7% return for each shareholder. We've been trying to work on a different sort of way to pay back our shareholders instead of giving out dividends. That's really it for this presentation. We can open the call for questions. I kindly ask you to ask questions by either unmuting yourself or by sending a message via chat that we'll read and then answer for you. Okay. Thank you.
Hello, it's Victoria from SocGen. Can you hear me okay?
Yeah.
Yeah.
Hi. My first question is on, in the release, your target for EUR 1 billion sales by 2022. You seem quite confident that you're going to add over EUR 300 million of sales. Is this because you've got one or a number of deals in the pipeline that you're confident of closing? If so, can you be specific about whether it is one large deal or a number of smaller deals? I guess also related to that, based on sort of previous transactions, and assuming EBITDA of around maybe 10% on average for acquisition would seemingly imply pro forma net debt EBITDA getting to 2.5x by the end of the year. Does that sound logical to you? Then maybe just a couple more actually.
I also just wanted to ask how the Symington's integration has been going over the last few months. If you're able to sort of talk about what's already been achieved and sort of remind us of the profitability outlook impacts of the integration, just in terms of cost savings plans. Actually one more, sorry. Can we just confirm what you paid for Symington's GBP 60 million equity, but did you adopt their debt or was there none at the company when you bought it? Thank you.
Thank you, Victoria. About the first question related to our confidence about the EUR 1 billion revenues in 2022 as a target of Newlat, obviously. I think that we have today on the table several potential deals. There is one among the others that is enough alone to get this target. We are going on with this deal. I think that for what we have on the table at the moment, this could be a deal for the Q1 of next year. Obviously, we are not alone doing this because probably in this case, we already closed this deal. We need to wait because the counterpart is an important multinational corporation.
We need to wait for the end of the internal process of the counterparty, but we are very confident about this. Apart from this one, as I said before, we are always looking at other dossier for other potential deals. In this case, a bit smaller than this one specifically. On this basis, we are absolutely confident to get this target next year. About the level of net debt to EBITDA, I think that a material part of the increase of debt is related to IFRS 16. It is not a financial net debt. Despite that, considering a conservative progression of the EBITDA for the end of the year, we will be very close to 1x-1.2x.
That is a level that, also considering the cash flow generation of the company, is something that continue to allow us to be very flexible on the financial side. In this sense, I think that could be worth to highlight a couple of things, considering the free cash flow generation of the first nine months, in the sense that this is an exceptional situation for us to have these negative contributions coming from the working capital. We already anticipated at the beginning of the year that in case we would like to use the cash available to try to get maybe better price and to improve the loyalty with our supplier. This is absolutely what happened, in particular in Q3.
Because especially for durum wheat, there was a material shortage of raw material. We need to try to negotiate better days of payable outstanding to get a better, especially the loyalty of the supplier, and also to negotiate better prices, considering the spike that you saw that you read on all the newspapers that impacted all the raw materials, I have to say, also on the packaging side. In particular, the durum wheat. We use this flexibility to maximize substantially our return in this difficult situation. Our expectation is to come back to a normal trend of working capital already in the coming months.
In particular, it's important to highlight that also on the Symington's side, we are working to try to create the same similar harmonization that you saw last year after the acquisition of CLI. Also in that case, after a couple of quarters, we have been able to align the working capital policy to the one we have in Newlat Food. In this sense, I think that our capability in terms of cash flow generation remain unchanged and the net debt EBITDA level is not something that would be seen as an issue or something that could reduce the financial flexibility we have.
In terms of the Symington's integration, as we said in the press release, we have been really able to eliminate other emergencies in the past month, renegotiate immediately new prices with our clients, and being able substantially to complete the pass-through and to face successfully this particular negative situation in terms of raw material inflation. This means that we are fully focused today on the Symington's integration to try to develop synergies in two ways. One is the cost way, and we can confirm what we anticipated at the date of the announcement of the deal, GBP 10 million of cost synergies.
On the commercial side, Benedetta also anticipated in the presentation the fact that we already got interesting listing in Italy, in Esselunga for Naked, in the U.K., in Lidl for Delverde. This is the way on which we are working to try to maximize the interaction of the two companies. We are really confident that 2022 will be a very interesting year also for Symington. About the acquisition price, yes, I can confirm you that we pay GBP 63 million.
There was no debt, sorry, when you bought it?
No, no debt.
Thank you.
Hi. Good afternoon. Jeremy, BNP Paribas. I have a couple of questions. The first one is on the press article we saw a couple of days ago on the increase in prices on the milk side. It seems that an increase has been agreed at the government level, which entails both the mass distributors and the transformation company to pay a sort of emergency tax on to the farmers. Can you please comment on this? Then the second question is on the competitive landscape at the moment, which is the role the private label is playing at the moment.
Lastly, if you could give us an update on the spare capacity at the moment and the potential benefits related to an increase in the operating leverage. Thank you.
Thank you, Dario. About the milk price, generally speaking, I have to say that we don't have any kind of material issue on this point because you know that we already negotiate a fixed price for the midterm. As the chairman anticipated during the previous conference call for the first half result, we are anyway negotiating with our client to try to get an improvement in price and to try to help our supplier in this sense, so to try to do a contrary pass-through. Because we think that is a company responsibility also to be close to all the stakeholder of the company and the suppliers are part of this, and suppliers are very important, are strategic for our company.
In this sense, we are doing negotiation with our client, but differently than the semolina, the durum wheat case, for milk, we don't have particular pressure because we are managing very well at the moment our supply chain. I think also that it's important to highlight the fact that our brands, especially in milk, are all regional brands with a very high level of market share. In Tuscany, we are about 50%-55% of market share. In Piedmont, above 30%. In Campania is another region in which we are market leader because we cover with two important brands, the two most important province in inside the regions.
This means that in case we have pricing power to do negotiation with our client and we are not under pressure in this sense on the milk side. In terms of the competitive landscape, I think that especially in this particular situation in which there is this particular increase of raw materials everywhere, not only agricultural raw material, but also speaking about packaging, all the players are experiencing increase. I think that this situation is something that put more pressure on the private label side because private label to be competitive need to be at very discount vs the branded product.
I think that this is a scenario in which the companies like you that owns important brands, regional brands or also national brands, with a strong loyalty from the consumer, I think that could get some advantage in this case.
Hi, good afternoon. May I ask a few questions?
Yes.
Hi. My first question is about the tone of Mr. Mastrolia's statement in the press release, which seemed quite positive, mentioning in particular the good trend in October. I was wondering if you can give us a bit more color on that. What you have been seeing in the last few weeks, whether this is already benefiting from price hikes, actually. In relation to that, what kind of trend were you referring to in the sense that I'm wondering whether parallel with the price hikes, are you experiencing any declining volumes or any potential trade down which might a little bit mitigate the benefit of price hikes at group level?
Also, if you can comment on profitability for the fourth quarter, given the price hikes you are implementing for doing that. My second question is about the dairy business. You commented the strength of this segment, mentioning also some new clients. I was wondering whether we should bear in mind kind of concentration of buying in this quarter because of this new contract starting and maybe should we expect this segment to normalize a bit in the following months? Further question on Symington's because we have mentioned a bit of normalization of the trend with lifting of restriction.
I was wondering if you can give us an idea of where Symington's revenues were in 2019, just to have a normalized reference, and so what we can expect for further year. Thank you.
Thank you, Paula. Maybe I can start answering to the other question and about the dairy business, probably Giuseppe could give you on the mascarpone side a better picture of our success, not only in Italy, but also outside with this particular product. In terms of the organic trend that our chairman mentioned in his statement, this is a general indication about the group, and he's referring to the volume trend, in the sense that after what we experienced in the Q3, also the beginning of Q4 continued to give us confidence about the volume rebound vs the first half. We are achieving growth.
On top of this, you have to consider that in Q4 we will have the first contribution from the price increase that we put in place in August and in September. This means that we are absolutely confident to achieve another quarter of growth for the latest three months of the year. In this sense, we don't want to guide about the profitability. What we can say is that what we substantially described to the market during the first half presentation, so the fact that despite the pressure on the raw material side, we will be able to maintain the profitability in line with last year and also to drive a recovery in terms of revenues to match at least what we reported last year.
I can tell you that, especially on the basis of Q3, this target is confirmed. We are absolutely confident on that. We don't want to enter in details of profitability because I think that in this particular situation of the market, probably it's better to avoid to guide a precise number, a precise level of margin, because you know that maybe tomorrow we could face another unexpected external situation, and we don't want to have numbers to manage. What we can do is to confirm what we told during the presentation of the first half.
About the Symington's trends, you have to say that it's important to highlight and to remember, apart from the trend that you saw in the reporting today, that when we announced the acquisition of Symington's, we presented Symington's as a company of GBP 105 million of revenues, and with an EBITDA around GBP 8.5 million. This is a normalized level on which we substantially negotiated during the deal. This obviously is something different than the reported figures in 2020, because 2020 was, for Symington's, a year materially impacted by the extraordinary contributions from COVID. If we consider this level of revenues, that is a level that is substantially also in line with 2019.
I have to say that the company is all in all in the organic terms also a bit positive vs the 2019 level. The reason why we reported today this mid-single digit negative trend is because this is vs a comparison base that is materially impacted by the COVID impact. In 2020, the company reported, obviously, this is another attenuation that you have to do. The company before was closing the fiscal year in August. August 2020 closed with GBP 120 million revenues. This, I think that could give you better understanding about how the 2020 was extraordinary for this company.
This is the reason why also we announced the acquisition, speaking about GBP 105 million revenues, because this is the normalized level of the company, and we are absolutely in line with this. What is important for Symington's is that, considering apart from the organic trend related to the normal business of the company, we are really, really confident and also excited about the strong opportunity that we have for this product in Italy, in Germany. The opportunity we have for newer product in U.K., as we mentioned, we already got the first listing in Lidl for the beta, and we are negotiating with the other retailers. I think that the potentials of Symington's are really exclusive, and we are really excited to continue this integration process.
Yeah. Maybe, Fabio, thanks for all the explanation. There was a question concerning the dairy, right, Paula. You were asking about our increase in sales concerning the dairy. What I can tell is that the consumption of mascarpone is increasing in different channel. We are trying to gain all the opportunity that we get in different channel. It is increasing in the retail and the consumer channel. For the house usage, it is increasing in industrial usage, so B2B, and we are producer of mascarpone 10 kilo, so for this kind of usage. We are increasing our export. We are focusing our strength in the last months. We are developing more sales in North America.
We develop more sales in China, Japan, South Korea, in Europe, in consolidated market like Germany, Holland, France, and we gain a new opportunity in the U.K. In Italy, we gained two customers that are the two biggest retailer. One is Esselunga with our brand Optimus, and the other one is the group Selex with their own brand. The product is increasing much more due to two factors. One is that the quality that we can give to them is really good and really appreciated quality. That of course, the consumption, as I told you, is increasing year-on-year so much. Last but not least, the commercial sales. I can tell that my team is doing a really great job.
They're really focused, and they're working so hard to get new customers. It's even dependent on the team commitment.
Giuseppe, I want to add just one thing to try to transfer, to fully transfer to you why we are so excited thinking about the Symington's integration and the Symington's development. During this week, we discovered, for example, analyzing the Consett plant of Symington's, and Giuseppe was in particular analyzing this plant. We discovered that we have an important line that is today fully unutilized, that is ready to produce dessert. In this sense, what we have on the table today is to try quickly to start to produce using our mascarpone tiramisu directly in Consett to be sold in the U.K. Also considering the fact that tiramisu is one of the most sold dessert in the world.
This is an example of the strong potential that we are finding every day something new in Symington and the reason why we are so confident about this integration.
Yeah. Yeah, yeah.
Thank you. Giuseppe, if I may add, can you give us an example of how your Naked Noodle will be positioned in terms of pricing?
I'll just give you an idea.
compared to the leader?
We have an idea to go up on the ladder. We are a real Asian favorite product, so we want to be at the price level that is roughly on the shelf higher than. Are you asking me for Italy, for Germany, in general? Tell me which is your target, and I can tell you which is our idea. For example, on the Italian market and on the German market, as in the U.K., Naked is seen as the most known brand in the Asian flavor noodles. We want to position it really high compared with the other competitors. Our idea and the product that we listed now will be on the shelf on an average price of EUR 2, but EUR 1.99 per cup.
This is the position from where we want to start. Really well appreciated by the consumer and the customer itself, and the demand came directly from the customer. We will launch roughly 13 SKUs. So it means 13 articles on the Italian and the German market within March 2022, and we see a really strong potential of growth in this product. Concerning Naked. Concerning the other products that we do here in Leeds, we produce here in Leeds, even on the ready meal pasta, we see on the sachet ready meal a strong opportunity in the German market because the market value is already over EUR 200 million. The market value in Germany.
The market value for Pot Noodle in Italy is small, but it's growing between 30% and 40% year-on-year. We're talking about a market value that is more than EUR 30 million, Italy, and EUR 230 million, we talk about Germany. We think about strong opportunity on the two markets. We are focusing all the team to be really quick. On the other side, as Fabio said, the integration of pasta in the U.K. Is going really fast, quick. We have a daily dialogue with the customers, so we gain a lot of opportunities. Within beginning of next year, we will participate to the main offers for the main retailers like Tesco, Sainsbury's, ASDA. We have already on the table everyone.
Thank you very much.
The products are really good. If I can tell you something, the product taste is really good. Noodles, ready pasta, everything. I talk as an Italian. They are really good.
look forward to tasting it.
I think, Giuseppe, if I'm not wrong, we should be ready to be on the shelf first of April 2022.
Yeah. This is the deadline. Another thing I just want to add, then I stop talking, is that even the opportunity. I was thinking about that there is a huge market concerning the ready meals of pasta on the frozen market. If you think about the Italian shelves, a lot of people eat frozen ready meals. Our idea is that to gain into the market with the ambient, so without frozen and so on, ready pasta as well, maybe with some recipes that are more similar to the Italian taste. This is something that at the beginning I was not believing in it, but then tasting it and eating it, I'm thinking that this could be feasible for us.
Okay. Other question?
Paula, I think you're talking to us, but you're on mute, I think.
No, I think it's not working. The microphone, it says no. Okay. Next time.
Want to write something in the chat if you like.
Of course. Yeah. Okay. 'Cause you continue to be on mute.
Maybe you can write us the question if you want. Let's write on the chat.
I saw a question follow up from Paula related to the special product margin. You have to consider that the profitability that you are seeing in the first nine months for the special products substantially did not include any kind of benefit from the new products, but the cost from the prototype activity that we made in the past months. You should start to see something in Q4 in terms of additional contributions to the profitability of this division. Now we know that the chat is working. Okay.
Okay. If we don't have any more questions, we can end the call. I'm not sure if there's any other question coming from someone else. If not, we're gonna end the call here. Thank you so much for joining the call. We're at your disposal for any follow-up questions that you might have. You can email us, you can call us, and we will be happy to answer all your questions. Thank you. Have a nice evening.
Thank you. Bye-bye.
Thank you.
Bye-bye. Thank you.
Thank you.