Morning, everyone. This is Benedetta Mastrolia. I'm the Investor Relations at Newlat Food, and thank you for joining Newlat Food's first half 2023 earnings call. Joining me today to discuss our results are Angelo Mastrolia, our Chairman, Giuseppe Mastrolia, CEO and Chief Commercial Officer, Rocco Sergi, CFO, and Fabio Fazzari, Group Financial Director. Before commenting on our results, I would like to remind you that this presentation may contain specific statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on Newlat, Newlat Food's current expectations and assumptions of future events, and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied by these statements. We're moving straight to page seven, where we have our key financial highlights.
Before commenting on our results, I would like to highlight that the 2022 and 2023 figures are presented on a consolidated basis. That means that EM Foods is included within the scope, only starting from the first of January 2023. So it's not included in the 2022 results. Moving to revenues, we recorded revenues of EUR 413.3 million, which is an increase of 23.2% versus the first half of 2022. If we look at organic revenue growth, however, we also had a very good growth of 19.1%.
We had very good growth in all our business units, especially in instant foods, where we had an increase of 36.3%, in bakery of 35.1%, and in special products of 36.1%. All our main geographies recorded a very good growth, especially Germany, which grew by 24.3%, Italy, which grew by 21.5%, and the U.K., which grew by 15.7%. Moving to EBITDA, we're looking at adjusted EBITDA, which was EUR 39.8 million versus EUR 28.3 million in the first half of 2022.
Looking at EBITDA margin, adjusted EBITDA margin, we had an overall margin of 9.6%, which is quite a good increase compared to last year's results, which was 8.4%. As can be seen here, we had a further recovery of margins compared to the 2022 results, as well as an improvement since the last first quarter results, which we published earlier this year. Moving on to EBIT, we had an increase of 197% versus the first half of 2022, which means that we went from EUR 7.7 million in EBIT to a EUR 22.9 million in EBIT figure.
This was achieved by a mix of different factors, as can be seen from the consolidated financial income statement. We didn't have an increase in the administrative and sales costs, which helped us keep EBIT pretty high compared to last year results. Net income also grew, particularly well, by 391%, and we increased our EBIT by EUR 8.5 million. So we went from just EUR 2.2 million last year to over EUR 10.7 million this year.
As can be seen in the results, we actually had a very strong operational leverage, which helped us to offset, more than offset the higher net financial costs that we incurred this year, caused by the interest rate increase. Looking at free cash flow, we had a free cash flow of EUR 17.4 million. The result is pretty excellent, and this was achieved again, thanks to very good management of the operations. We had also an EBITDA free cash flow conversion of 76.1%, which is pretty in line with previous year results. If we look at net financial position, we're looking at net debt, excluding IFRS 16.
In this period, we recorded EUR 23.1 million of net debt, as opposed to EUR 63.1 million at the end of 2022. So we had a EUR 40 million improvement versus the end of the year 2022. If you look at the figures excluding, including IFRS 16, we had pretty much the same improvement by EUR 40 million, and we were able to do this again, thanks to the very good free cash flow generation that we had this year. Moving on to the next slide, we have wrapped up some of the results that our peers and competitors within the wider market, so in Europe and in the world, have achieved in the last year.
So we have actually been able to basically outperform the market as opposed to some of the most well-known players such as Unilever, Ebro, Nestlé, Emmi, and so on. This was again achieved thanks to a very good performance of our volumes, so a very good commitment from our sales team to increase volumes, as well as a very strategic mix and price contribution, which helped us place ourselves among the best in class in terms of organic revenue growth. Moving on to the next slide, we have some a summary of what we've done in the last few months in our major geographies in terms of sales and marketing. So we look at Italy right now.
In the Pasta and Instant Food segment, we are currently in the process of launching Naked Ultimate, which was launched last year in the U.K. Now, it's being launched in the main retailers in Italy, and it's being very well-received by retailers. We just recently, actually, a couple days ago, won the tender to become Amazon's sole pasta supplier in Europe. That means that we will produce the circle pasta by Amazon, which will be sold all across Europe, and we have a very good project that will be unrolling in the next few months. Moving on to the bakery segment, we are in the process of including the Crostino and Granfetta brands under the Delverde umbrella brand.
So we are working on this, which will be launched by end of autumn, beginning of winter this year. In terms of pasta in Italy, we're also increasing our marketing spend and marketing activity for Delverde, the original Delverde range. We've increased our outdoor and indoor ads, as well as done some magazine ads, and we're also increasing our exposure on social media. Moving on to milk and dairy, we've launched different products in this segment. Mukki, we've launched lactose-free milks with added vitamins, as well as the A2 milk, which was previously only produced in the Turin within the Turin brand, Tapporosso.
We're also relaunching the Optimus mascarpone, so our very well-known mascarpone in the Italian market. This new packaging will set us aside from competitors, which have a much more, I would say, dated age type of packaging. And this will help us draw in more customers, as well as having a dedicated campaign and marketing digital marketing campaign as well. Moving on to another very exciting news is that just a few months ago, we won, let's say, the position as the only milk supplier for Starbucks in Italy with our brand, Polenghi. So we will be providing Starbucks with its milk with just the Polenghi brand.
So this will be across all the Starbucks coffee shops in Italy. And in general, we've had a very good, let's say, six months in terms of communication in all the milk and dairy segments. So we've increased our communication both online and offline, so in by hosting real events like the Giro you can see here, and we've been hosting, for example, Mukki Day, well, just recently, and we're really trying to cover both online and offline presence within milk and dairy. Just a quick update on Naked, as we've talked about Naked in previous presentations. So this is just an update of what we've done in terms of online presence. We're really working on the social media presence of Naked, so both on Instagram, TikTok, Facebook, and so on.
We've engaged in an influencer marketing campaign during the months of May and June. We've engaged with some very well-known TikTokers and influencers, and we've reached very good results in terms of views. So more than 5 million Instagram views, more than 4 million TikTok views, and we reached more than 2 billion with just these influencers. We've also shot a campaign for Naked, for the original Naked range, which was online in, again, in May. Again, together with the influencer campaign, we've had a very good reception with this campaign as well. So our ad was seen by 49 million people, and the full video was watched by more than 400,000 people.
Moving on to the U.K., we have an update on Naked. In the last year, the Naked brand increased its value by 5.3%, and in the last two years, it increased by 11%. This was supported by different launches, product launches, as well as different commercial tactics. We just recently launched a very exciting product, which is the Naked Rice Sriracha product, which is particularly, let's say, on trend, compared to especially the very well-known Asian players like Nongshim, for example. This will drive more customers in, and this is also a good product to use on social media, reactions, et cetera, et cetera. So we expect to see very good performance of this product alone.
We've seen very good performance as well in the Naked Ultimate product that was launched last year. And, we are in the process of relaunching the original Naked range, so we will have our best ever product, which sees a reformulation of the original product with longer noodles, more punchier flavors, and a revised packaging, which will draw in more customers. We've also run a panel test, and we've made sure that this product is very well-received and liked more than our competitors and more than the original product. We've also rolled out a plan in terms of communication, both on digital platforms as well as TV.
So we will be on TV, also on-demand TV, with a dedicated Naked, like Naked commercial that can be seen here, and we're also working on new products for 2024. Moving on to Mug Shot. We have also some updates on Mug Shot. So we've seen, in a Nielsen study that Mug Shot is the results as being the highest units per trip in the category, so that is a very good achievement for us. We've launched two new pasta pots, and we're also focusing more on communication, and we're launching our new TikTok channel for Mug Shot as well.
We've also partnered with some influencers, and we've increased our press presence in as we are approaching the colder months, and being Mug Shot one of those products that you really buy during the winter and the colder months. We've also had, we also have some new products in our pipeline, so the limited edition carbonara, which we'll be launching in November, and the Pigs in Blankets Christmas flavor, which will be launched before Christmas. We're also working on new products for the year 2024 as well. In the next slide, we have an overview of our private label business within Symington's. As it is well known that Symington's is a private label player as well as branded player. We've how...
We've outlined our performance within the market, as opposed to the U.K. ambient market. So as can be seen in the charts, Symington's being the blue, the blue bar, we can see that in terms of sales, we increased 14%, and in terms of volume sales, we only decreased by 1%, as opposed to the U.K. ambient market not performing as well, so both in terms of sales and volumes. And own label in the year 2023 so far has actually grown by 23%, and volume has actually grown by 4%. We've launched into a number of different categories across both across own label, especially in the home baking and colors and flavorings, flavorings, and cornflour, which is being produced at our Leeds site.
And we're also increasing our production within the Consett site, with new products in the wet grain sauces and soup pouches segment. Moving on to Germany, here we also have some good updates. We had a total volume increase of 14%, and a total value increase of 25%. In terms of... Can you hear me?
Yes, yes, yes.
Yes.
Okay. So in terms of market share, we have an increasing importance within the pasta segment, so we have increased our promotion within retailers. This has made us really competitive both in terms of a brand exposure and brand growth, and also brand equity. So we've really been able to increase our exposure versus competitors. And in terms of instant products, we've also relaunched Minuto, and we're in the process of launching the sweet products of Minuto, and we've also seen a very good performance in this segment as well. We've launched new products, such as the Birkel spaghetti and mezzi rigatoni.
We've seen very good performance in terms of tonnage growth, and we've also launched new products such as the oat pasta, which is using the sort of trending ingredient of oats as opposed to wheat as the main ingredient for pasta. This can also be a gluten-free alternative in some cases. We've also launched a sort of done a test with cardboard boxes for Delverde within German retailers, and it's been perceived very well by both retailers and consumers alike. We launched some pasta kits within the Minuto range, with vegan ragu and different pasta kits. Moving on to the next slide here, we just have a picture of what we've done in terms of promotion.
Bear in mind that in Germany, it is very well received to have running promotion within retailer, retailers. That really helps, grow a brand value and brand recognition in the long term. We've seen that, in previous, in the previous years as well. Moving on to Minuto. So as I said earlier, we've relaunched Minuto both in the savory segment with new pasta and new sauces, and we've also- we're also in the process of launching, the sweet products, especially, so that you can see here, which will be, available very soon, within German retailer, stores. Now, we move on to the sales breakdown and analysis. So on to the next slide, we see just, an overview of our results. As I said earlier, we increased our sales by 23.2%.
We saw, in general, an acceleration in sales growth, and the year was characterized by different things, one of them being, as said earlier, an organic growth of over 90%. We had new launches and listings, which can be seen also, which could be, you know, can be seen in the previous slides as well. So we've had a very strong, strong commercial commitment by our sales team to increase our exposure within retailers as well as other clients. We have had a very good operational result. So EBIT margin increased to 5.6%, as opposed to 2.3% in the first half of 2022.
And we had an increase in net income of 391%, which was very significant, considering the higher interest costs. Moving on to the breakdown by business unit. As can be seen on the right-hand side, we've had very positive results in all the different business units. In particular, if we look at pasta, we had an increase of 18%, which was propelled mostly by an increase in sales in Italy and in Germany. We also saw an acceleration of sales growth in the milk segment, with an increase of 17.1%. And we had an increase of instant noodles and bakery mixes.
Of course, this is also influenced by the EM Foods acquisition, but if we disregard that, we also had very good performance in this segment as well, in terms of organic growth, of course. If we look at bakery, dairy, and special products, we also had very good performances of 35.1, 26.3, and 36.3% increase. We've worked mostly with new customers, adding new products within existing customers, as well as gaining new business both in B2B and private label businesses. Moving on to distribution channels. So also in this case, we've had a very good performance in all our distribution channels, with large retailers increasing almost 30%.
This, again, was driven by new clients, as well as new product launches within the different geographies. If you look at B2B partners, that's where we had the highest increase, which was 43%. This was driven by two factors, one of them being the acquisition of EM Foods, of course, because it's a mainly B2B business, but also by an increase in B2B partnerships within pasta and other products as well. Moving on to geographies. As said earlier, we had very good performance in all our geographies. In particular, if you look at Italy, we had an increase in bakery, milk, and dairy, and instant noodles, as well as pasta, which impacted our sales very positively.
In Germany, we had an increase in pasta and in instant noodles, and instant food in general, which drew our performance. In terms of U.K., we had an increase in sales as well, which is attributable both to the new launches of different products within Symington's, as well as new business within the home baking private label business in the last year. In terms of other countries, this again is impacted by the EM Foods acquisition. However, if we disregard that, we also had very good performance, and we've been able to increase our exposure into different export markets in the last year. We've also had, of course, an increase in average selling price overall in our different markets.
Moving on to EBITDA, we had an adjusted EBITDA of EUR 39.8 million in the first half of 2023, which is an increase of 40.7%, and EBITDA margin was 9.6%. Overall, we had a very good performance, especially in the pasta business. So we had an increase of EBITDA of almost 200%, and EBITDA margin of pasta jumped from just 4.5% to 11.4%. So we went from just below 5% to even having a double-digit margin in pasta, which is very, which is a very good result, especially looking back at previous years. Bakeries EBITDA was increased significantly.
We had an increase of 65%, and we also kept a very good margin of 13.5%, as opposed to 11% last year. Overall, we saw an increase of most margins and most EBITDA figures. The only one which was negatively impacted in this period was the instant noodles and bakery mixes, because this includes the EM Foods business. And EM Foods at the moment has a lower EBITDA than our instant noodles existing segment. So we're working on actually improving margin in this period, and really we are in the process of running different operational and I would say production improvements to really work on increasing our EBITDA by next year.
In general, we can say that our results are especially good if we look at all the other segments. Overall, on an average base, we actually had an improvement versus last year, but also compared to 2021 levels. We've been able to really work on the margin that was lost in 2022. Moving on to the next slide, we have an overview of our free cash flow generation, as well as an overview of the last quarter's performance, both in EBITDA and free cash flow generation.
So if we look at the table, we can see that we had an underlying free cash flow, which is operating cash flow minus CapEx, of EUR 17.4 million. This was thanks to a very good performance of cash flow from operations. As can be seen here, we had EUR 33 million, and this really helped us to offset the higher interest costs, which were recorded this year. As can be seen in the bar chart on the right-hand side, we have had an improvement in all our, in all these factors, so both in terms of EBITDA, underlying free cash flow, and EBITDA margin.
So we went from 7.13% of EBITDA margin in the second quarter of 2022 to having over 9.86% in EBITDA margin in the second quarter of 2023. So that's a very steady important improvement in margin. And we've also had very good performance in free cash flow, as can be seen, in the second quarter of 2022. We had a negative free cash flow of EUR -3 million, and we've been able to work it up to EUR 7 million in the third quarter of 2022, to working it up to EUR 10.2 million in the second quarter of 2023.
So very good result, compared to last year, and, in general, having an EBITDA, which went up, to twenty point three, in the second quarter of 2023. So exceptional results, again, thanks to operational leverage. Moving on to the next slide, we have an overview on net working capital and cash conversion cycle. So, some may remember that last year we had to sort of invest in net working capital in order to offset the very unfavorable input costs that we were incurring. So this, in this first half of 2023, we were able to actually, let's say, improve net working capital once again.
So we went from almost EUR -21 million to almost EUR 28.3 million in the first half of 2023. In general, we can see that we have higher inventory levels. We've been able to actually stock up on some long shelf life products to take advantage of some lower prices compared to 2022. And we've also had lower receivables, which is thanks to a progression to normal levels of raw material input costs. So we've been able to actually work on both sides in terms of commercial sales. In terms of cash conversion cycle, we've had an improvement. Last year, we had -9 days.
Now we're back to - 73 days, so we're actually able to take in cash before we give it to our suppliers. This, again, is a very good result compared to 2022. Moving on to the next slide, we have the M&A overview. So this year, as said in previous presentations, we're still working on the M&A, on our M&A strategy.
So we find that this period is particularly advantageous for Newlat Food because of different factors, being interest rate increase, having less private equities take part into M&A activity, the current credit market environment, which help us having lower opportunity for having leverage structures, and having financial investors looking for targets with a clear growth profile. In this environment, we're still working on our transformational acquisition of over EUR 1 million turnover. We're in quite an advanced stage, and we have some clear synergies that will be immediately visible if we close this acquisition. But on the side, we're also working on different opportunities, so we have a lot of opportunities coming in every day.
And we're looking at other deals between EUR 15-EUR 20 million in revenues. And we're also still working on the acquisition that we announced last year in Europe, in different segments, with a multinational corporation. However, it is currently on hold because of an internal reorganization of the seller. So we're still in the process, but we're not actually seeing too much progress at the moment, but we're still in. Moving on to the last slide, we have our outlook for the year 2023. So we are, as a management, committed to achieving double-digit growth in terms of revenues. We expect to have an adjusted EBITDA margin of at least 9%, so pretty in line with what we've seen today.
We expect to surpass EUR 30 million in free cash flow with a free cash flow yield of 14%. And as just said, we have a very strategic focus on M&A, and we are hopeful that we can close an acquisition relatively soon. So this is the presentation, and now we can move directly to the... Okay, so we have a question from Arianna Terazzi. You can go on, please.
Yes. Thank you. Good morning, everyone. Arianna Terazzi from Intesa Sanpaolo. Thank you for the presentation, and congratulations for the results. I have a couple of questions. First, with reference to the top-line performance, maybe I lost it during the speech, but as usual, could you share the split between price and volume effect? Then just to better understand your expectation on margins, I would appreciate a comment on selling prices, namely if you are seeing any downward pressure, and given the slight increase in cost of goods sold-
I'm not sure if you're talking, but I cannot hear you. I'm not sure.
I am, I am speaking, yes. Can you hear me?
Yes, we are hearing, Arianna.
Okay, I'm going forward. So, I was wondering if you could comment on selling prices, if you are seeing any downward pressure. And given the slight increase in the cost of goods sold, if you could elaborate on the raw material cost environment. Then, a third question on the production capacity. If you could comment on the spare capacity, also considering all the launches and contracts you have been awarding in 2023. And lastly, on the dairy performance, which was strong for several quarters in a row, could you comment on that, and what are you seeing for the next quarters, if possible? Thank you.
Arianna, good morning. So starting with the top line, also in the second quarter, and this was also the average for the first half of the year, we got a contribution from a volume that represented the 30% of the reported growth, while the price contribution, price mix was around 70% of the reported growth. At the moment, we are not experiencing particular pressure on the selling price, and this is related also to the fact that the general environment, especially thinking about raw material, is not defined and a homogeneous picture, in the sense that there are different trends for different products, different areas.
I think that in current environment we do not expect to have soon a particular pressure on the selling price. This doesn't mean that we cannot enter in particular promotional activities, especially thinking about the last quarter of the year, that usually is full of promotional activities from the retailer due to the particular period of the year. In this case, if we will have the opportunity under the right condition, we will try to also to get maybe this opportunity, and this could have a bit of reduction in terms of growth rate. But this is more opportunistic and decided from our side not linked to a particular pressure coming from the retailer or in general from the market.
At the moment, the situation is quite stable. And I think that I already answering that is a summary about the question that you mentioned on raw material. The scenario is not linear, is not defined. There are different situations for different raw material, different market, but nothing that could put in a serious pressure the price level. As a general statement-
So, sorry, Fabio, I want to join. In any case, our view for the end of the year is more stable for the cost of the raw material, because we have a good cover for this next four years. Sorry, Fabio, just for give the information for this cover raw material. Thank you.
Yes, thank you. And, as a final statement, on this point, I would like also to highlight that, our underlying profitability level is, between 9% and 10%. This means that if we are going in the future to face, particular pressure from the retailer on prices, because there is a real reduction of, all, the raw materials, this, will not impact our profitability. So our first, objective when we made, in the past two years, this, strong, policy on the pricing, was to protect, our profitability and to continue to improve margin with structural, improvement, not just because we can, manage, with maybe, an aggressive, approach, particular situations that may happen, into the market.
This means that the visibility that we have on our profitability and the sustainability of our profitability is really, really high. About the latest question linked to the daily performance, the performance is linked to several things. In particular, we made an investment for a new line in mascarpone with an increase of our production capacity. This obviously allow us to create additional volume and to get to have the opportunity to get the strong demand that we found into the market. And the consequence of this new line and new capacity was the acquisition of new clients, and this was positive both on volume and on the possibility also to manage the business with better prices and better profitability.
Thank you.
You're welcome.
Hello. Hi, everybody.
Hi, Paola.
Hi. I go ahead with a couple of questions as well. So I would like an update on the integration process for EM Foods, and also, if possible, a bit more of detail on the contribution we saw in H1 in terms of revenues and profitability, and what we can expect in particular in terms of commercial initiatives and the integration going forward. Then I would come back on what Mr. Mastrolia was just highlighting for raw materials. It seems that you have a good visibility, thanks to the stock you have for maize and wheat, for example. So do you think, if you can share with us how much visibility you have in this respect.
So for how long are you covered, and so what kind of visibility do you have in this, on this side? And a further question, sorry, is on volume, where you started to mention right now that you have gained new clients on mascarpone. In general, I am quite impressed by the volume growth that you are confirming in spite of the strong inflationary environment. Can you help us understand to what extent is this volume growth driven by new listings, new accounts, and also in terms of geography, where and categories is coming from? And if to what extent do you expect these new listings to be confirmed, to be maintained? Thank you.
Yes. Thank you, Paola. In terms of EM Foods, as we explained last year after the acquisition, EM Foods is an integration phase that is based on the integration on our structure, especially considering the commercial platform of Newlat that could help EM Food to find new volumes and new business. And this was visible in the presentation when Benedetta shared the slide that presented the new products linked to the brand Minuto. We have also additional opportunity coming from U.K. branded and linked to the private label business, because our colleagues in U.K. are also developing a new business for EM Foods. This means that we are absolutely in line with our expectation of integrations and development of EM Food.
It's clear that this year is a year in which we don't expect any kind of contribution from EM Foods. But the goal of the year so to create the base of new volumes, new business for the next year in this case, so we are absolutely in line with our plan.
No, I, Paola, maybe Giuseppe to, to-
Yes, so-
We have with the brand Minuto in Germany, and we start.
Yes
... just next days with the very-
Yes
... important range on the Edeka in Germany is biggest retail in Germany. Maybe Giuseppe to give a-
Yes.
Sum up.
So, Paola, thank you for your question. So what even Mr. Mastrolia would like to underline is that we are already we already listed products produced in the EM Foods, and we start the delivering in week 40 in Edeka. That is the biggest account on the German market. It represent roughly between 35% and 40% of market share in Germany. So this will be a really good really good start, and now we will launch the first five items that represent for us a really good opportunity. Then we are starting. We already started discussing with the other retailers in Germany. We have a good talk even in France, where we are present with our...
Because the retailer in France already know our capability, because the plant of Ludres is really well known in France since many years for the quality of the products. So first, the first launch will be done in Germany from week 40, so beginning of October. We start delivery from beginning of October. We will present everything in the trade show fair in Anuga, in Cologne, first week of October as well. There is a lot of excitement... we get requests from European territories, so like Netherlands, like Italy, Germany, France, and the U.K., as Fabio mentioned. But we get interest even from overseas.
We made offers to big retailers such as Walmart and Aldi in the U.S. as well, for products produced in EM Foods. And what I can tell is that we have a really strong R&D team that can develop different kind of recipe, and we have a team of chefs in the plant that support the R&D to create all the new, all the new recipes demanded for the products, in both in pastries and in savory business as well. We are trying to dig into savory products, not only sweet dishes.
Giuseppe, you remember also in these weeks, we have to move some technology in France for to increase the capacity Naked in Europe?
Yes.
We start also in factory in Ludres, because this factory is a very biggest factory. We start with the Naked in Ludres, because we need to improve the capacity. In any case, we want to have the best platform for distribution in Europe, because it's very important to have the best rate on the transportation and the logistic, and Ludres is a fantastic place for the Europe logistic in distribution. We started these weeks to buy the new technology to improvement the new plant in the Ludres, also for produce the Naked brand.
Absolutely, yes.
This is a very, very good opportunity for the development of the Naked brand in Europe. Thank you.
Yeah. So as Mr. Mastrolia said, as we are developing really good our brands Naked, Germany, and all across Europe, we will now, we will now start with this new line in Ludres that will produce and pack all the cups under Naked and Minuto products, using our own pasta to make the finished goods. And this will create an immediate interaction between Ludres, U.K., and Germany and Italy all together. What I would like to underline as another, this will be seen maybe in the first quarter 2024, is that we are starting even a collaboration with our milk and dairy plants. So we were able, thanks to the know-how of Ludres to produce in the Firenze plant, panna cotta, using panna cotta and tiramisu, so ready to bake.
So we are trying to develop all the synergies possible between, with long, long shelf life. So we mean a UHT product based tiramisu and panna cotta. These are two new products that will be launched in the Anuga, will be presented and launched, I think, end of the year, beginning of next year. Maybe, Paola, I can even answer to your question concerning dairy. So concerning dairy, we are talking about new customers, so we mean the new accounts, and is mainly driven by new markets, new markets and new listings in both. So we are developing much in new countries, because we extended the shelf life of our mascarpone, thanks to the new technology. So we are able to export in foreign countries, so it's real far away.
Now, we are in a record shelf life for a fresh product that is five months, and we develop even the UHT, that it means, a long shelf life mascarpone, that we will launch on the next period. This is not yet in the numbers of this first six months. So we have all new accounts, and the new accounts are all developed in new countries, and the listing will be, I hope, for a long, long term. We have a contract at least for six-nine months with all the new accounts.
Okay, thank you. Yes, the last point was on the stock of raw material and the visibility you might have in this respect, if possible.
We don't expect, as also our chairman said before, we are well covered on the raw material side, and we don't expect, on the basis of current scenario, to have material swing by the end of the year. As I said before, the scenario is not linear and homogeneous. It's well diversified, products by products, and country by country. But we are, I think, in a good positions with high visibility for the end of the year.
I would like to underline one point on this matter, that when we talk about stock, we don't talk about only physical stock. We make good contracts, so we don't have physically the raw material, let's say, in our plants. This is a small detail that I want to underline. So it's a contract with a good price for a medium, long term.
Good. Okay.
And-
Thank you.
Thank you, Paola. We have a question in the chat coming from Ivan Perez. First one, the first point is related to the administrative cost, if we expect a big increase in the future. In reality, not in the sense that we have internal plan also to try to manage as better as possible administrative and general cost. And I think that the results that we achieved in this period are also showing the benefit that we are getting from this internal plan that maintain always high the the attention in these topics. So on this basis, honestly, we don't think that in the future, we have to manage higher cost from this side.
The other question was related to the increase in the interest paid, how we can forecast and we plan to manage in the future this item. So it's clear that the increase of the interest paid is related to the movement of the interest rate in the monetary market. We also made on the other side, since, as you know, we have a lot of cash because our increase of gross debt is related to the fact that to be able to be very flexible in our M&A strategy, we try to get in the past a lot of opportunities in terms of financing.
What is important to highlight is that our average interest rate that we are paying is, considering the current market condition, really good. Because you have to take into account that we have EUR 200 million of debt that are linked to the bond, and the bond is a fixed rate of 2.6%. This is obviously materially below the current level of the monetary market. And the other important point is that in the past our company made always a very good agreement with the banks due to the high financial flexibility that we show and the very low level of debt.
This means that the spread, the average spread that we have in our floating financing is around 200 bps, 210. And this obviously help us to mitigate the impact of the variable part linked to the Euribor or so the floating part of the interest rate. Having said that, we also manage the cash with very basic instrument, like a time deposit, to try to get mitigation thanks to the increase also of the active part of the interest rate. For the future, we expect situations that should be similar, like this one, for the remaining part of the year.
According to the forward rate in 2024, we should see a starting of reduction of the interest rate, but obviously, this is something that we cannot manage directly. We have to see what will happen into the market. It's clear that we are now sitting at the table and try to complete a very big acquisition. This, thanks to the cash and the liquidity that we have, that obviously is key to support us in this acquisition. Without the previous strategy that we put in place in financing, probably in the current environment should have been impossible for us to take to sit at the table and to discuss about this deal.
This to highlight also, so the positive side, to have this level of gross debt inside of our balance sheet. If we will be able to successfully close this acquisition, as we hope, obviously, we will use a part of the cash available also to finance this acquisition. There are, there are someone with another questions? No. Nobody?
None.
No. Okay. Benedetta, I, I believe we can close the conference because-
Okay. Yes, so, okay, so thank you everyone for joining today's call, and we remain at your disposal should you have any follow-up questions. Have a nice day. Thank you.
Thank you very much.
Thank you. Bye.
Thank you.
Good day to you.
Donna.