Good afternoon, everyone, and welcome to Logista's first half 2024 results presentation. I'm Isabel Troya, Head of IR for Logista, and today Pedro Losada, our CFO, will walk you through results obtained during the period. At the end of the presentation, we will have a Q&A session in which we will answer the questions submitted through the platform. You may write your questions at any time during the presentation. Now, Pedro, we'll go through the highlights of the period. Pedro, if you may, we can proceed with the results.
Thank you, Isabel, and good afternoon to everyone connected today for our results presentation. I would like to start the presentation by going through the main highlights for the period. During the first half of 2024, we have obtained a solid set of results thanks to the growth of different business lines, to the profit on inventory recorded for the period, and the evolution of the interest rates. We have continued our progress in relation to our diversification strategy, maintaining the ratio of non-tobacco-related economic sales higher than 50%. As you may recall, last August, we renewed our credit line agreement with Imperial Brands, and now we have signed a further amendment to partially hedge the potential interest rate risk for the next three years. I would like to mention our ESG commitment, highlighting new targets established for the period 2024-2026 on sustainability matters.
In the following pages, I will give you further details on these main highlights. Looking into our results, despite the adverse macroeconomic environment we have had during the period, where inflation has remained high affecting growth expectations, Logista has obtained sound results in its main indicators. Economic sales have recorded a 4% increase year-on-year, up to a total of EUR 867 million. In relation to the split per area, Iberia reached economic sales of EUR 569 million, Italy reached EUR 190 million, and France EUR 111 million. As per the Adjusted EBIT, it recorded an increase of 5% up to EUR 193 million. I would like to mention that the year-on-year Adjusted EBIT growth, excluding the profit on inventory, is fully aligned with our guidance of mid-single digit excluding inventory revaluations, reaching 5% for the first six months of the year.
Net profit has reached EUR 160 million, which is a 27% against the first half of 2023. It is worth highlighting two relevant items of our P&L account for the period: a EUR 25 million profit on inventory and a financial income of EUR 53 million. Later on, we will dive deeper into each of the regions. We have continued to implement our diversification strategy aimed at reducing the exposure of Logista to tobacco, but without giving away the actual business itself, among others, given its profitability. With this strategy, we seek the resilience of Logista, considering tobacco continues to decline over time. During the period, we have secured two additional acquisitions. The first one was the acquisition of SGEL Libros in Spain. This acquisition was made by Logista Libros, our 50% subsidiary with Grupo Planeta, which focuses our distribution and logistics for the books industry.
This strategic transaction consolidates our position as a leading independent book distributor in Spain. ESGEL adds a relevant editorial client base and the distribution of educational books to our catalog, which we did not distribute before. And secondly, we completed the acquisition of Belgium Parcels Service, a company specializing in the urgent distribution of pharmaceutical products in Belgium and Luxembourg. With this transaction, we expand our business to our Benelux area while strengthening our position in pharmaceutical distribution and the courier segment. BPS provides courier services in Belgium, Luxembourg, the Netherlands, France, and Germany, specializing in the distribution of sensitive products, mainly controlled temperature pharmaceuticals, to hospitals and pharmacies. Since we started our diversification strategy, we have secured so far six transactions which have allowed us to surpass the 50% threshold in economic sales of non-tobacco sources.
We continue to work on implementing the synergies identified in each of the different acquisitions, whether it's route combinations or warehouse consolidations, looking to extract the maximum value of the transactions already executed. Furthermore, we continue to seek new transactions which allow us to secure Logista's growth outside tobacco. Moving on to the next, highlight, we would like to give you further details in relation to the credit line agreement with Imperial Brands. During August last year, we signed its renewal in which we increased the maximum amount of the credit line, to EUR 3 billion from June 2024, compared to the previous maximum of EUR 2.6 billion. Following this new agreement, in February, we signed an addendum to the credit line to partially hedge the interest rate risk for the coming three years. In this new agreement, we have split the credit in two tranches.
The first tranche, which covers the first EUR 1 billion lent, will be remunerated at a fixed rate of 2.865%+ a spread of 75 basis points, totaling 3.615%. The second tranche, which covers all amounts lent above EUR 1 billion and up to EUR 3 billion, will remain at a variable rate of Euribor six months plus a spread of 75 basis points, with a 0% floor to the Euribor. With this renewal, we secured an optimal remuneration of our cash position for the coming years, while we partially cover the risk of the interest rates falling during the next three years. On ESG-related matters, I would like to highlight some new targets we have set for Logista for the period 2024-2026.
In environmental matters, last fiscal year, we surpassed the goal we had set in relation to the numbers of kilometers rolled at Logista Freight, Logista Parcel, and Nacex with sustainable fleet. We now renew this target, including also El Mosca and Carbó within the scope, and extending the target up to 90% of the total kilometers rolled by sustainable fleet. Furthermore, we continue to promote decarbonization in our transportation segment by using renewable fuel as well as increasing the kilometers rolled by electric vehicles, duo trailers, or model transportation combining sea freight and train transportation with the traditional long-distance road transportation. In circular economy matters, we have started our initiative to recycle NGP devices by installing recycling boxes in tobacconists and managing all the recycling process.
We have started this initiative in Italy and Spain and plan to expand to France also, with the target of reaching more than 33,000 retailers involved in this recycling initiative in all three countries. In social matters, we believe in promoting talent as this is a key driver for a company's success, and hence we have set a target for 2026 to reach a 95% talent density in critical positions, ensuring our expansion plan. We measure the talent density by analyzing the employees holding critical positions within the company, and from those employees we measure their potential, expertise, and contribution for the company. Furthermore, we continue to promote our diversity with a new target of reaching 30% of women within upper and middle management by 2026.
We continue to promote agreements with foundations and other entities to integrate and help vulnerable groups such as Fundación Integra or the latest agreement signed with the foundations of Real Madrid or La Caixa. In Logista, we believe in securing and promoting our employees' well-being, aiming for a future with zero accidents. In governance matters, we have started to evaluate our suppliers on sustainability matters, and we have set a target of evaluating all suppliers with a procurement volume above EUR 10 million by 2026. This threshold will represent around 80% of the total procurement within Logista. The final element we want to focus on in governance matters is reinforcing cybersecurity awareness, providing relevant training for employees on the matter. Now, I will give you further details for each of the regions and businesses.
Starting with Iberia, our largest market, we have obtained sound results in all major segments, reaching a total over EUR 2.2 billion in revenues, followed by EUR 569 million of economic sales, which represents a year-over-year increase of 4%. Adjusted EBIT recorded EUR 109 million after an increase of also 4%. Looking at each specific segment in the tobacco-related products, tobacco volumes during the period decreased by 0.9% after a fall of 2.2% in traditional tobacco in Spain, compensated by a strong increase in the distribution of NGP products in Spain and Portugal. During the period, manufacturers increased tobacco retail price by EUR 0.0025 per package, which has led to an estimated increase in the value of stock of EUR 19 million compared to the EUR 22.5 million recorded in the same period of last year.
This segment recorded 1.1% year-on-year growth in economic sales and a 3% increase excluding the effect of the profit on inventory. In the transport segment, economic sales have reached EUR 193 million recording a 7% year-on-year increase despite having seen a slowdown in European demand, which has affected the long-distance results. Furthermore, long-distance has also been partially affected by the conflict in the Red Sea, which has resulted in a relevant increase in transit time.
Lastly, in relation to long-distance, I would also like to mention the climatology during the period has not favored the production of fruits and vegetables, resulting in less abundant harvest campaigns in Spain. In relation to the rest of the transportation segments, we have seen an increase in deliveries both in Parcel and Carbó and in NATHEX, recording a healthy single-digit growth to which we should add the new contribution of BPS in the courier segment.
In pharma, we have increased our economic sales by 5% versus the first half of 2023 by increasing services provided to existing clients and seeking new clients within both the pharmacy and hospital world. Our publication segment recorded a year-on-year increase in economic sales of 7%, supported by the full contribution of the agreements signed with RBA during the third quarter of last year. RBA is a leader in collectibles and magazines in Spain, and the agreements state Logista as the sole distributor in Spain. Moving on to Italy, total revenues reached EUR 2.1 billion and economic sales EUR 190 million, which represents a 5% and 7% increase respectively versus last year's figure. During the first quarter of 2024 fiscal year, the government increased taxes on tobacco, which led to price movements from the main manufacturers during February to April.
The price movements recorded during the period did not offset fully the negative change of inventory recorded during the first quarter of the year, but it has compensated part of it, closing the period with an estimated negative inventory impact of EUR 1.5 million. The latest increases announced will be registered in the third quarter of the year. These announced increases include the price movements announced by JTI, BAT, and Imperial Brands, increases of EUR 0.10-EUR 0.30 per package depending on the brand and the product. The price increases announced by PMI were recorded within the period and are reflected already in the accounts for the first half. In terms of tobacco volume distributed in Italy, total figure recorded a 1.6% growth after the decline of 1.2% in traditional tobacco volume, which was offset by a very good performance of NGP distribution, particularly in Heat Not Burn.
Looking into a convenience distribution segment, we started a new business line linked to the recycling of NGP devices, installing recycling boxes in more than 28,000 tobacconists to date, with an expansion plan to continue adding further tobacconists. This initiative was launched in November after an agreement with the Italian Tobacconists Federation and the Ministry of Environmental and Energy Security. Furthermore, through the acquisition of Gramma Farmaceutici last year, we started our business line of Pharma Italy. We continue to work on integration of the acquisition while we start its organic growth through an agreement with a new laboratory. Finally, adjusted EBIT in Italy reached EUR 54 million after an 8% increase against the previous year. In France, revenues recorded an increase of 1.5% up to EUR 1.8 billion and economic sales recorded a slight decrease of 0.4% year-on-year up to EUR 111 million.
In France, there was also an increase in taxes by the government, just like in Italy, which was followed by the increase in selling price of tobacco manufacturers, in some cases offsetting exclusively the tax increase of EUR 0.50 a package and in other cases increasing up to EUR 1 per pack. These changes in taxes and tobacco prices had an estimated positive impact of EUR 7.6 million in the value of our inventories. Looking into tobacco volumes distributed, France continued to show a faster pace in the decrease in volumes distributed than Spain or Italy, with close to 11% less tobacco distributed during the period in comparison to the previous year. In the convenience products, we record a continuous growth in the economic electronic category business, which is a growing business line in the country.
We continue to gain tobacconists who include our software and hardware as cash registered in the shops. The total adjusted EBIT for the period in France amounted to EUR 31 million, which represents a 6% year-on-year growth versus 2023. After giving you details of each region, we will move into consolidated figures for the year 2023. The consolidated adjusted EBIT increased by 5.4% to EUR 193 million, supported by a positive performance of the activities, the strong positive impact of the inventory's valuation, and a contained cost increase despite the general inflationary pressures. Digging deeper into the year-on-year differences, economic sales grew versus last semester by EUR 33 million, backed by the good performance and the businesses in Iberia and Italy. Despite the increase in logistic costs, we managed to improve slightly our adjusted EBIT margin versus the first semester of last year by 30 basis points.
Finally, reported EBIT reached EUR 168 million, which represents a year-on-year growth of 15%. The main impact of this metric comes from the capital gains resulting on the sale of the warehouse, which we closed in France during the fiscal year 2023, following the strategy to optimize the French operations according to its real needs. Bottom line net profit of the company grew by 27% thanks to several factors, such as the increase in reported EBIT of EUR 22 million or the increase of financial results by EUR 23 million year-on-year, supported by higher interest rates for the period. The European Central Bank announced the latest rate hike up to 4.5% back in September last year and up to now. It has not yet started an interest rate decrease strategy.
The European Central Bank's average rate for the period was 4.5%, to which we should add the 75 basis points spread contemplated in the credit line with Imperial Brands. The average credit line balance during the year was EUR 1.9 billion compared to the EUR 1.89 billion in the first half of 2023. On top of that, the increase in profit before tax translated into a EUR 11 million higher taxes expense, despite maintaining the corporate tax stable at 25.6%. We concluded the period with an earnings per share of EUR 1.21 versus EUR 0.95 in the same period of last year.
The positive business performance during the period and the consolidation of the acquisitions in the business led to a 5% increase in EBITDA compared to the previous year. Additionally, financial income increased to EUR 52 million compared to the EUR 28 million in the previous year given the current interest rates.
On the other hand, restructuring costs paid during the period amounted to EUR 10 million and normalized taxes reached EUR 60 million. The payment of restructuring costs included expenses related to the closure of the French warehouse and booked in our accounting for fiscal year 2023. I would like to emphasize that during the period, we sold the warehouse closed in France last year, which added further EUR 11 million to the cash flow and which is registered below the normalized cash flow. CapEx for the period amounted to EUR 25 million and it included, among others, investments made in transportation elements such as installation of security systems in vehicles or new semi-trailers or temperature control systems for vehicles. CapEx for the period also includes IT systems and maintenance, which is necessary for the optimal functioning of the warehouses, such as the optimization of picking systems.
Leases recorded for the period of EUR 33 million were above the EUR 28 million recorded last year, mainly due to the full consolidation of the acquisitions. We concluded the first half with a cash position of close to EUR 1.8 billion. To finalize, I will go through the closing remarks and our expected outlook. The results for the period reflect the integration of the acquisitions and the good performance of the underlying business. Our results have been positively affected by the change in inventory value because of the changes in taxes in France and Italy and changes in tobacco prices in all three regions. We have also benefited from a high interest rate environment, which has translated into a significant growth in our financial income thanks to the credit line we have with our major shareholder, Imperial Brands.
The diversification strategy continues to progress while maintaining the hurdle of 50% economic sales coming from non-tobacco businesses, which we surpassed last year. Dividend continues to be a priority for Logista. And even though we continue to look for mid to small-size acquisitions in order to grow the company and execute our diversification strategy, we will continue to distribute dividends according to our policy. In terms of outlook, we expect our business to continue registering sustainable growth for the rest of the year. We reiterate the full year 2024 guidance we gave last November of mid-single-digit over Adjusted EBIT. This expected growth does not consider the profit on inventory recorded in 2023 or 2024. Now we will proceed with the Q&A session. Isabel, please, if you may.
Thank you, Pedro, for the presentation.
We will now continue with the Q&A session by reading and answering the different questions that you have sent throughout the platform. The first question comes from Enrique Parrondo from JB Capital. Hi, good morning. Thank you for the presentation and taking my questions. I have two, if I may. First one is the evolution of transport revenues. Could you provide more color on the main drivers behind the small year-on-year decline? And the second one is related to tobacco sales in Italy. I assume you had all the negative impact from the tax increase in Q2 2024, yet you should have a price tailwind this quarter. Any color you could share on timing and impact would be appreciated. Many thanks.
Thank you, Enrique, for your question. On your first one with respect to the evolution of the transport revenues, this pretty much comes from the road long-haul transportation and seafreight. When you look at the results of NATHEX, for example, we increase in expeditions that our focus is more and more growing on B2B segments. But also we have a certain growth in e-commerce, gaining even a little weight and market share. So in that front, we are fine as well as on Parcel and Carbó. In terms of temperature control, frozen food, pharma distribution, as it's been done by Parcel, it's going more or less as expected. We see a bit more restrictions in the demand for non-branded products versus branded, so to say, gourmet products, but not very significant.
However, the most transportation in this division from economic sales lines comes from the long-distance business, both road transportation and sea freight. As I mentioned during the call, there's a decrease in the European demand affecting the volumes distributed by our Logista Freight business during the period. All the geopolitical conflicts, and besides the conflict on the Red Sea, have had an impact on transportation sales due to several factors. And the main one being the relevant increase in transit times. So new routes have to divert through South Africa, for example, increasing transit by even 14 days. That has an impact on the demand and even on when you are receiving the final payment with much more delay.
And this is an impact that you can see worldwide, even with the big forwarders companies like DSV and Kuehne+Nagel and other ones that have reported also some restrictions in that front because of the same reasons. It's also true that there's another element like the fruits and vegetables campaign this year. By the end of the calendar year 2023, it was not very good due to weather conditions. And besides, in this final part of the semester, also it was a few days less than 2023 due to Easter here in Spain. Those are the main reasons of the slight decline on transport revenues. On your second question related to the tax increases in the second quarter or the first quarter in Italy, we have received all the, so to say, the negative impact from tax increases in Italy.
In this first half, we have received also the positive impact from some of the price increases from one of the manufacturers, particularly. So we are expecting still to receive a little bit more positive impacts on POI in the third quarter of 2024.
Thank you, Pedro. Next question is from Francisco Ruiz of BNP Paribas. What is the reasonable level of POI for the year taken into account the Italian impact on Q3?
Thanks, Francisco, for your question. It's quite difficult to foresee the exact number. I think that is a fair assumption based on the experience when we compare same level of price increases and the final impact that we have had in the past. On POI, we should assume probably that we should be in the same levels around the same levels of 2023 in terms of POI.
Thank you, Pedro. Next question comes from Pablo Cuadrado, Kepler Cheuvreux. He has the first question relating to POI on Q3, which I believe we've just answered. Additionally, shall we assume further gains from price increases in Spain, Italy, or France? Next one is, can you maybe comment on the M&A pipeline opportunities that you're looking at the moment? Are they focused on pharma distribution, on transport segment, in which markets? And the last question is, can you detail which portion of the second tranche of the credit line is currently hedged for June 2024 to June 2025 period? What is the strategy here? Which percentage of the second tranche will you aim to hedge?
Okay, thank you, Pablo. Let me go with your first question related to further price increases. As you recall, this is not under our control. Are the manufacturers the ones deciding when and how they increase the prices on their products? If we make a bit of history, we have this year price increases. Last year, we have also price increases. Before that, the last one, I think, for example, in Spain was in 2021 and a couple of years even earlier. Before, we have another one. So the reality is that we have no idea on the evolution of the price and we shouldn't make any assumption on that. With respect to M&A pipeline opportunities, we keep on working hard on finding the right opportunities. You are right on our focus on pharma distribution and in the transportation segment.
Remember that we have said many times that when we look, for example, in Spain to the Logista Pharma and increase our growth in Logista Pharma in Spain or NATHEX from an inorganic perspective, it's much more complicated than outside. So when we are looking to pharma and courier, that's why we used to look outside Spain. We can find some niche opportunities in Spain, but our business model makes this very difficult in our own country. That's why we are looking farther our borders. Like you can see the transactions that we have closed, like Speedlink or BPS, and as well as the pharma distributor in Italy. So in that front, we should be following the same steps that we have done during the last couple of years. But we are also looking for other transportation opportunities, particularly in the temperature control or frozen products transportation.
High-value products, trying to get advantage of our capabilities and to differentiate ourselves from other competitors. Our other areas where we are focused and the geography more or less remains the same. So Spain, Portugal, France, Italy, Benelux. And sometimes we can also see other opportunities in other European countries. But those are the main ones. In your third questions are related to the credit line. Let me probably clarify and recall what we've got. So from June 2024, we reached an agreement with Imperial to increase the credit line from EUR 2.6 billion to EUR 3 billion. That's number one. Then we changed the reference rate from ECB reference rate to Euribor six months, but maintaining the 75 basis points margin. And then afterwards, what we agreed with Imperial is to hedge the interest rate risk. And we decided to hedge partially.
Basically, the number is around 50% of the average cash that we've got is already hedged with this new agreement. To your question, not only for June 2024 to June 2025, it's also till June 2027 where we, as of today, have hedged 50% of our exposure and leaving non-hedged the remaining part of the loan. Thank you.
We have another question from Enrique Parrondo, JB Capital. Another question, if I may. Considering the increased penetration of NGP in countries such as Italy, especially, and Spain, how big is the economic trends, the recycling opportunity? What incremental benefit could imply over economic units?
Okay, thank you, Enrique. Yes, it's true that in Italy is probably the main market for NGP products. We have said several times that probably we should be in the area of around 20% of the sales in the country comes from this new generation product. In terms of the recycling opportunity, we just started. Probably it's too soon to understand which is actually the success of this exercise that we are doing with many tobacconists as well as with the manufacturers. I think that it's going to be successful, but it's a little bit premature to give some numbers. And to the rest of your question, yeah, same thing. Be with us. We just spent several months with this opportunity. We will give you much more details by your end.
Thank you, Pedro. One question from Francisco Ruiz for BNP. Could you give us more details on the exposure to the Red Sea conflict?
Okay, thank you. Well, it's difficult to quantify exactly what is the impact and a percentage coming only from the Red Sea conflict. In terms of economic sales, probably around and I'm talking about Elmosca, which is the one doing this business line. It's a rough number to say probably that around 50% comes from maritime business and another 50% of this business comes from international one. And out of this international one, not all of the routes go through the Red Sea. So probably it's a limited impact, probably no more than 15%-20% of our P&L.
Next question from Andrea Fernández of CaixaBank. Thank you for taking my question. Despite the slowdown in long-haul transportation in the second quarter, do you expect some recovery in the second semester?
Yes, thank you, Andrea. This is a good question. I think that it's complicated. I mean, it's complicated to understand whether we are going to have better conditions from a geopolitical perspective and even conflicts like the Red Sea going forward for the rest part of the year. Remember that it's in combination with an excess capacity in the market affecting particularly the long-haul road transportation. So this is probably a tightening time for the business. What we can do is trying to control on the cost side, try to make management decisions that allow us to maintain the level of margins and growth that we are having. We are not pessimistic during the rest of the year, but again, it's too premature to understand whether these conflicts that are really affecting directly this business are going to end during the second half of the year.
Thank you, Pedro. That was the last question we received. Thank you, everybody, for joining us on our first half results presentation. We're available at Investor Relations if you need anything. Thank you. Goodbye.