Good morning, and welcome to Arteche's H1 2023 results. This is Paloma Illana, Investor Relations at Arteche. On our company website, www.arteche.com, you will find available a presentation that will be used as supporting material to cover this call, as well as a link to access the webcast. During the presentation, all participants will be on a listen-only mode. There will be an opportunity to ask questions after the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing the star key, followed by 5 on your telephone keypad. I now pass the floor to Mr. Alex Artetxe, Chairman and CEO of the company.
Thank you, Paloma. Good morning, and thanks for joining us today. Welcome to our first half of 2023 results presentation.
I am Alex Artetxe, Chairman and CEO of Arteche, and I am joined today by Luis María Pérez, General Manager of the company, and Iñigo Center, CFO of Arteche. We are very happy today to report the first half of 2023, with record numbers for the group. Good results that are also in line with the vision that we shared in our general shareholders meeting in May. We are living a very relevant time for most of our end markets, and the investments required to drive electrification and digitization for greater efficiency and sustainability will drive growth for the years to come. I believe we have a great team of professionals, and we are very well-positioned with our portfolio and markets to help our customers to make the energy transition real.
Now, I am going to go straight into looking at a few financial highlights of first half of 2023, which is page 3. Let us start with a few highlights. First, orders remain strong in the semester. We are growing 29% year-on-year, which is above expected market growth. All of our four geographic regions and three business lines are growing. We are growing, and we are also strengthening our market position. We have also record revenues of EUR 188 million, which means up to 20% year-on-year, and we are growing by double digits both Q1 and Q2 of this year. As we anticipate, the progressive recovery seen in net margin in previous quarters was consolidated during this half, reaching 33% in the second quarter. Which means an improvement of almost 400 basis points versus the same quarter a year ago.
More important, thanks to our well-defined price strategy together with cost and efficiency actions, we have come back to margin levels pre raw material and logistic crisis. Supported by this strong net margin progression, we managed to increase our EBITDA by 33% in this semester, up to EUR 17.4 million, which means a margin of 9.3% over revenue. This EBITDA margin increase is also in line with the vision that we shared with you in May 2023 during the shareholders meeting. Our leverage ratio is also improving and at the end of June, stood at 1.76 times the reported EBITDA, comparing with 1.9 times a year ago. Finally, net profit reached EUR 4.3 million in the first half or also EUR 0.087, which means it is growing by 41% versus the same period last year. I think this is a good first starting half of the year.
Now I will turn the word over to Luis for him to take through the numbers in detail.
Thanks, Alex, and good morning to everybody. Here you have a quick recap of the first half of our year. Basically, these are the same figures that Alex has described. We will not go in detail since we are going to have specific pages for each one of them in a few minutes. In summary, I would like to point out that all lights are green. All these KPIs are much better than what they were a year ago. We can say that we are fulfilling our commitments. But I would like to draw your attention to two metrics in particular. First of all, I would like to discuss a little bit about the top-line orders. You see that they are growing around 29%, beating the market. We believe that the market is growing probably at high single digits, and we have been able to increase. Sorry.
We have been able to beat the market by 29% in comparison with the market itself, as I was saying, high single digits. The other metric that I think is really important is the net margin. If you remember from previous conversations, that was our basic task back a year ago. We were suffering from raw materials increases. We were suffering for complexity in transportation and increasing cost of energy after the COVID situation. It is fair to say that we have been able to overcome the situation, and we are back even better to where we used to be before the COVID period. We are going to be looking in detail at these numbers in the upcoming pages. Now we will take a look at orders and sales. What you have in this slide, you have on the left, orders, you have on the right, sales.
What I can tell you is that we remain to be a globally diversified company regionally. As you know, we are organized in four regions, Europe, Middle East, Africa, and North America, Latin America, and Asia Pacific. We have been able to grow orders in the four of them. Actually, three of them are double digits, and one of them is single digits. By the way, since these numbers are for now, I am happy to share that by the end of August, Asia Pacific is also in double digits growth. Also, I would like to mention that our book-to-bill ratio is at 1.32 times, and we have been able to reach, and probably an all-time high backlog of almost EUR 219 million. If I turn your attention now to the right of the page, to the sales, you see that we have grown 20%.
Three regions are double-digit growth. One is still lagging a little bit. Similar situation to what I just described in orders. In sales, we have also been able to increase those sales in the month of July, and August is looking better right now. To give a little bit of more info on each of the regions, I would like to share with you that the U.S. remains to be our biggest market, followed by Spain, Mexico, Brazil, and France. Situation in Europe is positive. In our markets, all the trends are helping us in terms of growth, digitization, the shift from generation of coming from fossil fuels to renewables, and that you can see in that 19.8% growth. Growth is pretty much spread all over the countries in Europe.
Maybe we can mention a little bit that the Middle East is picking up a little bit more than the others. In terms of North America, 46% up. The U.S., as I was saying before, remains to be our number one market. All the investment in renewables, especially in green fields, is pretty big, and we are benefiting from it. Mexico and Canada, they are also helping to achieve these figures. If I move to South America, it is pretty much recovered after the COVID situation. Brazil is the biggest economy in the region, is doing pretty well, followed by Chile and Colombia. Argentina was really struggling with some of internal economy issues over there. Finally, about Asia, you can see a drop in the first half. This is mainly coming from China. China is our biggest market in the region.
From the point of view of country of destination, not from the production, because as you can imagine, our factories in China produce for all over the world. From the point of view of country of destination, there was a drop mainly coming from Chinese EPCs. Chinese EPCs doing business in countries like Turkey, Egypt, or Africa that are suffering some financial crisis. Some of the projects are delayed. They will be picking up and recovering in the second half of the year. Now, I shift to the next page. Here in this page, we have a little bit of a quarterly view of what is going on in our business. Both Q1 and Q2 revenue has increased by double digit. That is very good news. This is showing clearly the strength of the market demand.
Also very important for us is that in Arteche, we are putting a lot of effort into achieving linearity and stability in the prices. Ideally, we would like all quarters to be more or less equivalent as a way of maximizing productivity and avoiding losing production slots, which, as you can imagine, is very important to execute our backlog, which I was mentioning before, it is an all-time high, our backlog. We have to make sure that we execute the backlog we have in our hands. Now I am going to give you a view from the product line point of view. You will probably remember from other presentations that we are organized in three different product lines. You have them at the bottom of page: network reliability, T&D grid automation, Measurement and Monitoring Systems. The three of them contributed positively to the growth.
You can see that from 13.2% in the case of Measurement and Monitoring Systems, all the way up to 77% in the case of network reliability. I am going to spend a little bit more time talking about our products and our R&D efforts in this first half of the year. If I start with Measurement and Monitoring Systems, we remain to be in high voltage, probably number 2, number 3, worldwide in terms of market share. In medium voltage, we are around probably top 10, since this is a much more distributed business geographically. We have finalized the first world 400 kV gas-insulated switchgear voltage transformers without SF6. As you know, SF6 is a very effective gas in terms of insulation, but it creates negatively to the greenhouse effect, so we have to replace it.
We have been able to replace this gas by another one, and first product available worldwide is ours. Also, we have introduced a new 145 kilovolt inductive voltage transformer with 15% less carbon footprint, which is thanks to a new design that is much smaller in terms of footprint. We have also introduced a new 52kV sensor. Sensors are typically used in medium voltage. We are expanding those sensors now to medium and high voltage. We finalized the opening of our new factory in Turkey. This we mentioned in our previous presentation. Now it is up and running. Very important, we are working pretty hard on HVDC projects. Basically, this is about direct current, high voltage projects as an alternative to alternative current, to AC.
Our optical sensors, or our optical current transformers, they work both in DC and AC, and we have supplied equipment to be installed in nuclear fusion installations, both in the U.S. and Europe. Also, we are delivering equipment for the interconnection of offshore wind farms to mainland and to interconnection between countries. This is one area where we have a technological advantage, and we are playing very hard on this game. Second pillar, T&D grid automation. This represents around 20% of our revenues. What have we done here in the first half? We have a new IEC 61850, which is an international standard for communications in substations. We have a new architecture that we have been installing in several installations, both in South America and in Europe. We have counted up to orders for relays from 72 countries worldwide.
Our equipment has been installed in the new high-speed trains in Mexico. As you may know, Mexican government has launched a very aggressive plan of investment for high-speed trains, and we are delivering those protection and control equipment for those substations from our Mexican factory. Finally, I am happy to announce that we have achieved EUR 10 million in orders from our online store. We are not Amazon, of course, but trying to sell this equipment through the website. I think it is something that tells a little bit about our capabilities to be flexible and to adapt to customer needs. Finally, network reliability, the product line that has grown the most, 77%. Now, it is around 13% of our total revenue. We have been launching a new product, power quality switch, kind of a breaker, able to connect and disconnect capacitor banks.
We have supplied several wind projects and harmonic filters both in U.S. and Canada. We have also achieved several orders from Australia as well. Reclosers, we have extended our customer base to Peru, Argentina, and Guatemala. Finally, we can say that our service revenue has grown 25% during this first half of the year. Having said that, I am going to pass the floor to our CFO, Ixone Vicente. Please go ahead.
Thank you, Luis. Hello, everybody. Thank you for joining us today. Turning to page 8, we have here the evolution of our direct margins. Remember that the last two years, the direct margin has been one of the main focus of the management. Today, we are very happy to show you the consolidation of the recovery because our direct margin has been improving quarter by quarter, reaching pre-crisis levels, and the peak of 33% of operating income in the second quarter of the year, and in the first half of 2023. This means an increase of around 400 basis points compared to the same quarter of 2022, and more than 340 basis points of improvement compared to the first half of last year.
On absolute terms, and moving to the graph of the right, our direct margin increased 46%, more than EUR 20 million, and this is a result of, first, the revenue increase that Luis María explained, our price recovery strategy, and the implemented internal efficiencies. On the top of this, we have the negative impact of currencies, EUR 2.8 million, because at constant currency, the direct margin increased more than 50%. On next slide, we saw the evolution of our reported EBITDA. That increased 33% in the first half of the year, and this is a result, again, of the revenue increase, our direct margin recovery, thanks to the price strategy and the productivity improvement, and also the structural cost improvement. Because in an inflationary environment, the ratio of incomes has decreased 50 basis points. All in, our EBITDA margin goes up to 9.3% versus 8.4% of the year ago.
Our expectations are to continue increasing and improving this ratio and return to double digits in the following months. On the next page, we have the bridge that goes from the EBIT to the net income. Starting with the operating profit, this has increased more than 60%, as is our result of the revenue increase and the guidance margin on an EBITDA improvement. Then we have the financial results that are more negative than a year ago, mainly due to the lack of a positive exchange rate differences, as you can see in the small charts of the right side, and also because the higher interest rates in the market. All in, the net income has increased 41%, reaching EUR 4.3 million in the first semester.
Finally, I would like to remember that last June, we remunerated our shareholders with a 30% payout of full year 2022 net profit that amounted to EUR 2.3 million of dividend. Turning to page 11, we are going to see our leverage ratio that has, again, improved to 1.76 times the EBITDA and a net financial debt of EUR 60.5 million. Here we have a chart to explain the evolution of the net debt. We have in green color, the positive impact coming from our reported EBITDA, and then in red color, the negative cash flow or the cash out. We have first the CapEx, that includes maintenance, capacity increase, and also R&D. Then we have financial and tax expenses, and the evolution of the working capital. Negative, mainly to the activity increase, 20%, as is explained, and especially because of the increase of our finished goods.
We see improvement opportunities in our inventory days that should start having a positive impact in the cash flow in the following months. This was the operational cash flow from the EBIT to the working capital that is positive in the last 12 months year in EUR 5 million. Finally, we have two negative impacts. The first one coming from the M&A. We have the last payment of the Cita Group. The second one, the cash out for the dividend paid in the last 12 months. Moving to the graph on the right side, we have the gross debt and the breakdown by different financial sources. We have been continually working in the diversification of our financial sources, and also in the maturity and in the interest rate variation of our debt.
We have 60% of our long-term loans hedged, and we have a maturity of more than four years. All in, I want to remark the strong financial position of Arteche, with a leverage ratio below 2.5 times the EBITDA. That is better than our guidance. Now I will turn the word to Alex to talk about ESG. Thank you, everybody.
Thank you, Ixone. Yes, we are delighted to turn the eyes to our ESG commitment. As you know, ESG are deeply embedded in our values and in our way of doing business. We are committed with the 2030 Agenda, and we have a roadmap that has been approved by the board of directors with our ambitions and goals for this period. On this slide, you can find a summary of our ESG scorecard. Let's go through some of the KPIs that we are managing. If we go through the three letters of ESG, the E, environmental goals, our ambition is to become a net zero carbon company. We have several KPIs, but I'm going to go through these three, which are probably the most important. First, we are working on having ecodesigns.
Here you see that actually, almost 75% of our designs are ecodesigns, and we are working in mainly changing our fluid insulations. We have already have some new designs that are already being tested and are ready for the market. The other one is to reduce the Scope 1 and 2 carbon emissions. We have reduced them up to 38% year over. Regarding electricity consumption, we have the goal of being 100% renewables, worldwide in all our factories. Actually, we are on the level of 32% in the different factories in the world. Regarding the S, social, our main focus is on equality and diversity. One of the key KPIs is the women in front line management, which are 20% to 25% in the group, for a goal of being at 40% in this period of time.
Also, we are taking care and are very attentive to safety, and we have had barely no impact in that sense of employees suffering from serious accidents. In the G, in terms of governance, ethics and transparency are the drivers in this case. Now we are progressing in the implementation of a new system of internal financial control space, as well as risk management maps that will help us to improve further our governance profile. As part of this commitment, also we are being evaluated by third parties with the goal of transparency and also to benchmark and learn from other companies and institutions. We have selected two international ratings, CDP, to measure our carbon footprint and EcoVadis as ESG global evaluation. In CDP, we are evaluated since 2022, and our CDP global score report is still at the average of our industry peers.
With a score of A-minus, which is above the average in supplier engagement, which is key for the Scope 3 carbon emissions reduction. In Arteche, we put a lot of effort in selecting our suppliers. 100% of them have been evaluated based on environmental criteria. In addition, last May, we were awarded by EcoVadis with silver medal, with regards to our sustainability performance, which means being considered within the 70th percentile. As you know, this is a long-term run for all of us, and in Arteche, we have the ambition to be an impact company, and we will keep making sure that ESG is part of everything we do at Arteche.
After reviewing the performance and achievement during the first six months of the year, I would like to share in this page 13, which is our view, our expectation for the whole year, which confirms the good trend that we anticipated in May. On the top line, we are seeing a continuation of a strong and dynamic market demand, which is driven, as was mentioned, by structural needs in the field of electrification, decarbonization, and the shift towards renewables and limitation of slash waste. The top line is also supported by our current footprint that is well-positioned and prepared in terms of geographies and portfolio, which is reflected in the fact that all of the geographies and business lines are contributing to the growth of our earning take, as we have seen before.
Also, in the coming months, as a result of our investment in R&D and innovation, we will start seeing in the market our new products and solutions that will contribute also to the growth of sales and to increased profitability. Luis also has mentioned some of those new lines. Our business model, as we have seen, has already demonstrated its resilience, mainly through the implementation of a price recovery strategy, as well as the acceleration of our efficiency and cost-saving programs. Margin have already come back to levels pre-crisis, even going ahead. On the other hand, coming from a challenging period during the last 24 months, we feel now that supply chain constraints are easing, and therefore, we feel confident to share that we expect both our price margin as well as the EBITDA margin to continue improving progressively through the coming quarters.
All in, I am happy to share with you a guidance for the full year in which we expect revenue to keep on growing up to a range at the end of the year of between EUR 305 to EUR 405 million, and EBITDA to keep on growing also up to a range at the end of the year between EUR 36.5 to EUR 40.5 million. Which would result in a margin close to the double digit, between 9.5% to 10% of our revenues. We are seeing then, as you see, a good year. Let us go finish time for the question and Q&A. Let me wrap up the presentation. We have a brief summary on 15 with the main conclusion of the press member. In the first half, we are having a sound growth in order intake. We have seen the growth, 29 in orders, 20 in revenues.
We are seeing that the market is still strong, and we believe that this growth is solid and will continue in the following months. Also, as we have seen, we have come back to margin, the normal margin. We have managed to consolidate the growth we discussed in our price margin. The growth has been more than 340 basis points. So we are now in a normalized margin, and it will be continuing improving, as I explained just before. Energy transition is opening opportunities in our business, and we are investing in new products and solutions and new market development that will support our growth in the coming years. Technology and innovation will help us to deliver high growth and better margins. We are starting to see some of our new lines in the market. We also have, as I have just explained, a long-standing commitment to ESG.
It remains in the forefront of what we do every day. Also we have a clear focus on cash flow generation. This year, as a result of the growth, as Ixone Vicente has explained, we have to look especially to improving vendor management in order to reinforce our balance sheet to face a disciplined approach to M&A, which is also really adding value to the company as seen in our head. All in, the strong demand trends, the good results of our internal plans, and everything we have seen in the market is what led us to feel comfortable to share our guidance for the full year, which is in line with the commitments compared to the market at the time of our IPO. We have seen, as I said, a good ending of the year.
This year, by the way, 2023, our current 2020/23 Strategic Plan comes to an end, and we are now working hard on the next one. We are looking forward to share with you soon our plans and expected figures for the next three years. We will keep broadly informed. With this, we conclude the presentation, and now we are happy to address your questions. Thanks for your attention.
Ladies and gentlemen, the Q&A session starts now. As a reminder, if you wish to ask a question, please press star followed by five on your telephone keypad. Our first question comes from Alberto Celorrio from JB Capital. Please, Alberto, the floor is yours.
Hello, good morning, and thank you for answering my questions. I have a few, so if it is okay with you, I will address them one at a time. First, I think Luis Mari said it in the call, but I could not really hear it well. Could you please repeat how much the market has grown? My question in this sense was, if you could please explain the reasons behind your outperformance to the market.
I would say that the market has probably grown, I think, a bit. We are beating. Why are we beating that figure? Basically, we are increasing our market share in two of the pillars where our presence is more regional, let me say. For example, the pillar that we have grown the most, which is the network reliability with 77%, which is obviously much, much more than what the market is growing, is thanks to our efforts basically in Australia and U.S. in order to position ourselves as a supplier for this kind of equipment. Why are we beating the market? We are beating the market because of new regions, new geographies. Also I would like to say that customers really appreciate what we did for them during the tough times of the COVID.
At that time, if you remember, we decided to stick to our production capabilities at any cost. We put as a priority to make sure that we deliver our products on time, no matter how much the cost increased. I think that our customers are basically thanking us for that, and we are increasing our market share in our product lines. I think you have another question, Alberto, right?
Thank you. Absolutely, yeah, I have some more. The next one is regarding profitability. We see that you have been recovering margins. I would like to know what to expect from here. Are we still targeting an EBITDA margin of 13%? In this sense, are you continuing with your price renewal strategy? So in the backlog that you have, are prices and margins higher than what you are seeing today?
Okay. Go ahead. Yes.
Maybe Ángela can start and you continue.
Yeah. We'll do it.
Okay.
Hello, Alberto Celorrio. During the first quarter or the first half of the year, we have been consolidating the progressive increase of the gross margin. We are still seeing that we have improvement opportunities in the next months. We expect the gross margin to be at the end of the year around 200 basis points better than last year or maybe a little more. We have been continuing with our price recovery strategy, and we have continued, and in some cases, restart our total cost out project and our programs of internal efficiencies. Yes, we expect to continue with this improvement in gross margin and also in EBITDA ratio.
Yeah. In terms of pricing actions, of course, they are different depending on the product line and depending on the geography. Overall, we believe we have increased prices around 8% in the first half. Remember that we have inertia, right? For example, in high voltage transformers, we have deliveries of three, four, five months. So we still see those prices in the second half of the year. Of course, we'll monitor the situation. We're still in some kind of inflationary environment, and we'll monitor the situation, we'll monitor our margins, and we'll take actions as needed. We still believe that we're going to be seeing price increases until year end.
In Turkey and invested in some capacity in the U.S. It's two questions here. First, the demand. Is demand in both countries progressing as good as you expected? Looking at the expected growth, do you think that you will need any further capacity increases anytime soon?
It is true that we have seen that some of the private investors for renewable projects, they are suffering because of higher interest rates. Okay? As I am saying, the fundamentals of the business in terms of change of the generation from fossil fuels to renewables remain the same. We are still positive in terms of having strong demand, not only for this year but also for the years to come. Our capacity has been dimensioned to address that volume. We already did the investments basically in Asia. We are doing the same thing in North America, and we will do fine-tuning of those investments in our Strategic Plan that we are defining right now. At the moment, we have the capacity that we need in order to address our customers.
As I was saying, probably we will do some investments here and there in the next months as part of our Strategic Plan for the next three years that we will be hopefully sharing with you in a few months.
Great.
Alberto, I think the first part of the question was a little bit cut. We do not know if you were asking about Turkey and the U.S. Is it okay?
Yeah. If the demand is progressing as good as you expected.
Yeah. Turkey, we finalized the movement of the old factory to the new factory, increasing capacity significantly around July, where there were few weeks of delay, but nothing out of the normal. We are seeing the orders coming, and I think that we are very optimistic. I think that the combination of the capacity in that country and the install base over there from a supply point of view, with the name or reputation of Arteche, I think that is a winning combination, and we are increasing our sales significantly in Europe and other countries thanks to that. Very positive about it.
Good. Thank you. In terms of inorganic growth, do we have any updates? Are there any advanced processes, and maybe what segments are you targeting or is there none, is there?
Sorry, Alberto. It is difficult to Were you asking about M&A?
Yeah, on M&A, do we have any updates there? Are there any advanced processes to this effect, anything, and if so, what segments are you targeting? Probably just an update on M&A.
Alberto. The guidelines that we have over the M&A strategy that you remember is to work on the two pillars, with the focus in the automation and also with cell PC. The pipeline, we have several opportunities. Taking into account basically the value creation for each opportunity. We are working on them. There are some things in the pipeline, but we will inform as soon as something is ready for it.
Okay. Thank you. Yeah, thank you. That was all from my side. Thank you very much.
Thank you.
The next question comes from Nicola Elia from Norbolsa. Please, Nicola, go ahead.
Good morning, everyone, and thanks for taking my questions. Two questions from my side. First one, in terms of guidance. Taking the mid-range of sales, you expect growth for the second half of the year to be at 9.5%. Could you give us some more color on the lower growth you expect versus first semester, mainly because you see that the demand continues to be strong and you are gaining market share? Second, regarding capital allocation. After doubling your capacity in Turkey last year, also increasing capacity in North America, having made the last payment of Esitaş's acquisition, what is your strategy now in terms of capital allocations for the coming months? What should we expect in this sense? Are you going to be more focused on M&A, reducing debt? Thanks.
CapEx? Let's start with CapEx.
Okay. With CapEx and cash flow. CapEx and cash flow. Remember that during the last 24 months, we were affected by the supply chain disruptions, and as Luis Mari explained before, in Arteche, we took a decision that was to increase our inventory levels. I think it was necessary in order to not stop the supply chain of our customer. This means an increase of inventories, sometimes extraordinary inventory levels. That means investments in working capital. Also remember that we have been, all those months, growing. So also this means an increase in working capital. Now, as Alex has remarked, we are very focused on the inventory management because we see improvement opportunities that should start having a positive impact in the cash flow in the following months. Okay? So we expect that in the coming months, we are going to start improving this ratio. Okay?
We are going to decrease our necessities in working capital. Okay. I think Nicola was also asking on capital allocation, with that cash that is going to improve in the second half, which are our plans for the future in terms of M&A, debt reduction? Okay. We will continue with our strategy of CapEx. Remember that our CapEx is around 4% of our revenues, more or less, EUR 15 million in the last 12 months. But this amount will continue growing because we still see that we are going to grow our revenues. Then we have to be ready to be able to have an M&A if the things, as Alex explained, go in a good way, or in a good final.
Yeah. Okay. Let me turn to Alex. Sorry.
Regarding the M&A, as I said, we are keeping in mind the M&A strategy as one of the guidelines of the company, but we have to be sure that it creates value for the company. Regarding the capital allocation, we have in mind that it is going to be used for the M&A, but in the meantime, we have to assign the balance sheet in order to prepare to do it as soon as we are sure that it creates value for the company. Going back to the first part of the question. In the first half of the year, we have done, Nicola, EUR 888 million of sales, right? Our guidance in terms of sales goes all the way up to between EUR 385 million to EUR 405 million. Okay?
In the low range of our guidance, we will be beating our first half by around EUR 10 million. Right? Meaning that our forecast is that we are going to be doing a little bit better than in the first half. In the high range, we are talking that we are going to be beating our first half by EUR 30 million, which is significantly higher. This is what I meant by saying that the market remains strong. If you compare with what we did last year, which 2022 was extremely good year in terms of volume, our low range is basically similar to what we did back in 2022, while the high range is around 10% more. That is basically the logic of the guidance.
Okay.
Okay. Nicola, is that all from your side?
Yes. Thank you.
Thank you.
There are no further questions from the conference call, so we will wrap up the questions received by written format to the webcast. Basically three. One of them that, Luisma, you mentioned somehow before. Someone is asking if we would be able to say that the positive dynamics of the markets that we have been experiencing are intact, despite some of the obstacles that the renewable energy sector is facing, as you mentioned, the high interest rates or the lower prices of electricity.
Yeah, that is true. As I was saying before, the dynamics remain the same. I would say that the only major difference in the last months is the cost of money, right? Interest rates. How does it affect our industry? First of all, there is probably more difficulty for promoters to do smaller, small renewable projects.
Also there is an impact maybe on the low voltage part of the electrical business, which we are not present, right? That may have a little bit of a negative impact, but other than that, the basic remains intact. So we remain very positive.
Okay. The remaining two, maybe this one is for Alex. One asking if Arteche during this period has received any merger or purchase offers from any company in the sector? If so, would they be studied?
We think that Arteche is an attractive company. We are well-positioned worldwide. We are an international company. We have a good brand reputation. So you can imagine that during these 75 years, we have received contacts for these sort of things.
Regarding what happened, I remarked that this is a family-owned business, private company, and the family has mentioned it is with the aim of continuing with the business. During the M&A process, we are analyzing opportunities. Mergers and acquisitions could be also in the options. Again, coming back to what I said before, it has to create value for the company, for the business, and for the shareholders.
Okay. The last one is, when we expect the next step to the continuous market?
To jump into the continuous market is one of the goals that we have in mind, as we explained since the beginning when we started with the IPO. Now we are preparing the next Strategic Plan for the next few years
In this business plan, what we are going to focus is on creating value and to prepare the company for this next step. Then we will see what is the moment, depending on the value creation, the moment, and so on. Interest, obviously, of the shareholders. In this Strategic Plan, we have to create value to be prepared for the IPO.
Okay, so there are no further questions. I will hand over the call to Alex Artetxe for him to close and finish the presentation.
Thanks for being here with us. Thanks for your attention. In the following days, we are going to on road show with the investor relations team, and also, we will be available to address your follow-up questions. Thanks again for the time. I think we are facing a good ending of the year.
See you soon, very soon, and thanks for your support and your attention. Thank you. Thank you very much.