Good afternoon, everyone. We are welcoming you to our conference call with institutional investors. Now I'm giving the floor to Eugen Comendant, Chief Operational Officer at Purcari Wineries.
Good afternoon, everyone. My name is Eugen Comendant. I am Chief Operating Officer at Purcari Wineries. Today we'll present the preliminary results for 2021, but of course we start today's conference call with a bag of emotions driven by the crisis in the region. You can imagine that we are so close to a region covered by war and this is of course what we see deepens, deeply affects us.
The whole team of Purcari here in Moldova from the start of the situation in Ukraine on Thursday morning have mobilized themselves to try and help as many refugees that are fleeing from this war that are passing the border at the Palanca border crossing, which is very close to Château Purcari. The team. I want to thank the entire Purcari team that has done an amazing job of helping the refugees. Some people have not slept for almost two straight days. We are proud with the fact that we've been able to help over 200 families directly and indirectly, even more than that.
The way we managed to help these refugees was at the Château Purcari itself, as well as we paid for accommodation in the region to make sure that families that need shelter have that shelter. We helped the refugees with setting up a tent that was giving out free food, free water, free SIM cards, blankets, and other things that people in need may need. It was heartwarming to see a reach out from partners not only in Moldova or Romania, but even from across Europe to offer in different ways to support the crisis or to support refugees in this crisis that we have at the moment. Of course, we're all moved.
You can tell that I'm also moved by this and the entire team, of course we are. We have to do of course two things. One is make sure that we have business continuity and we stay focused on the business. At the moment, of course, a big effort is going towards helping the people that are crossing the borders and are trying to escape this war. We can discuss more about the situation at the end. I'm sure you may have many questions.
For now, I'll get into the presentation of today and I'll focus on the numbers as I have to, and then at the end, I'll open for questions and answers regarding of course the situation, the current situation that we have in the region, but also potentially regarding some of the numbers that I'll present today. We have today's presenters. Myself is Eugen Comendant, COO. We have Eugeniu Baltag, the Head of Investor Relations, Victor Arapan, the CFO, Vasile Tofan, Chairman, and Mr. Victor Bostan, the CEO and the founder. Look, we have some slides here that are slides that we've used quite a bit.
I'm sure that most of you that are present in this conference call are aware of the overview of the group. You know the main market that we sell into and the brands that we offer. I will not spend too much time on these slides. I will go as quickly as possible into the numbers.
I arrive to this first slide, and I think it's an important slide because the numbers that we are presenting. I can imagine that to some of you and to the analysts that are perhaps not in this call, but that have reviewed the numbers and the financial reports, perhaps there was some difficulty in trying to compare apples to apples. Because what happened is that on the fifteenth of September, we increased our participation in the company called Ecosmart Union. It's a company whose core business is waste recycling management. We've increased our participation in this company from 27% to 65.75%.
What this has done has moved this company from being an equity accounted investee to a company that gets consolidated as part of the group. We have done this for multiple reasons. Many reasons, one of the reasons being that we want to increase our stake in the sustainability direction and the control that we have on this direction. The way the management or the way the Ecosmart company was being managed led us to the decision that we want to increase our participation. The positive thing from the way that we increase this participation is that it was for a relatively small amount.
Our initial investment was RON 108,000 for 27% of the company. We've already received over RON 500,000 as dividends from [Babydream. Babydream] initial investment is already covered. We've allocated another RON 340,000 to acquire the rest of the stake to reach a stake of 65.75%. It's a relatively small investment, but into a company that has a very high potential. From our perspective is we are increasing our stakes in the sustainability direction, but on the other hand, is we do see that this could turn out as also as a strong financial investment in this company.
I will get into the implications when it comes to the consolidation and to the numbers in the slides that are following. We are overall very happy to post these results. The revenue overall on a group level has increased from RON 203 million to RON 245 million. This, of course, includes the revenue that is generated by Ecosmart of just over RON 7 million. The EBITDA of the group has increased from RON 60 million- RON 69 million. This, on the other hand, includes a negative impact that is coming from the consolidation of Ecosmart.
We have the net income here, which we've tried to present it in an informative way, and we've tried to keep it as simple as possible. Perhaps I will have to go even deeper into the figures a bit later, because again, this is an amalgamation of, on one hand, the consolidation of Ecosmart, and on the other hand, some one-offs that we had both in 2020 and in 2021. Very quickly on some operational highlights. We are happy to show an increase in revenue of over 70% year-over-year. This is exceeding our guidance, which was 12%-14%. We have strong rebound in Moldova.
Moldova has recovered its revenues to the levels of 2019. We do see some stagnation and on a yearly perspective, some decline in Poland and Czech Republic, but I will get into that in a slide that follows. Bardar has had a very strong performance, +23%. That's due to the recovery in Moldova, but also even though from some small base, an increase in sales in Romania. We are showing an increase in group EBITDA. It's a 14% increase to RON 68.7 million . This is an EBITDA margin of 20%.
Nonetheless, again, I will go into some detail into trying to explain the difference between what we now call the core business EBITDA and the EBITDA that comes from the impact of consolidating Ecosmart. We presented this also in the previous presentations, that we have an additional close to EUR 1 million cash proceeds that came from the sale of Glass Coatings & Concepts company. We are happy to say that overall our balance sheet position now is extremely strong. Not only this is good for overall to have a strong balance sheet, but particularly now in some uncertain times, it's even more important that we have a strong balance sheet.
If you remember two years ago when it was in the same call, the reporting of the yearly results that we had, we had a crisis, another type of crisis ahead of us. Then also what was important is that we had a strong balance sheet to get into this crisis. Some quick, just quickly covering some activity on acquisitions. We've done acquisitions earlier this year, earlier in the year 2021. We've done acquisition of 10% stake in 8wines.com. This is an important acquisition for us because on one hand we are entering the online or the e-commerce in wine business. It's something that of course, it's obvious that we should be able to see a future in this.
Also, not only we invested from a financial perspective in 8Wines, but also from the fact that we are able to have some insights into how the e-commerce business working in the wine industry and take some key learnings from that. Ecosmart Union, I've mentioned that, so we've increased our stakes from 27% to 65.75%. More recently, we've acquired a company called Vinoteca Gherasim Constantinescu. It's in Romania, it's in a prime location in Dealu Mare.
It came with 50 ha of high quality prime vineyards and another 22 ha of good land, very good land that we will be able to plant and further extend our vineyards that are used for producing raw material for Crama Ceptura in Romania. We're very happy to announce. Of course, this probably has totally not been picked up by the press, given the other more stringent topics or one topic at the moment. We're happy to say that we have been included in the FTSE Global Micro-Cap Index. Basically, as of March, we will be included in that index.
That's a great achievement for us because it further establishes Purcari as an investable company. It expands, in a way, the array of investors that could potentially choose to invest in Purcari. You remember we awarded a dividend of RON 0.65 per share, and we have also awarded free shares or bonus shares, one bonus share for every share held. These were done in August and September of last year. Then there were some buyback programs that we've successfully concluded. Okay, now going a bit more into the figures.
We've tried again to split the figures into a palatable manner that will give, let's say, a good base for also for the models that are used by the investors or the analysts to evaluate our performance. If we go from the top line, we see that here we showed that the overall revenue for the group is RON 244 million. However, if we were to just look at the wine business, and here I think for a bit, we need to focus a bit more on the wine business, we'll show that we'll see that there's a revenue increase of 70%. Then we have a cost of COGS of RON 125.5 million.
This is again for the wine business. The COGS increased slightly at a higher pace of 18%, and that has led to a gross profit margin of 47%. The SG&A has increased by 10%, and here there are quite a few components. If we were to again just focus on the wine business, we have the marketing and selling that has gone up by 36%, so now it's RON 31.2 million . However, if we were to look at the because we also had some reallocation of costs from G&A to marketing and selling.
The good thing is that in Q4 of 2021, this is the last reallocation that we've done for this kind of cost, so we will see more clean numbers going forward. One of the reason of this, you see, let's say 36% or one component of that increase is also this reallocation. Another component is the fact that we have recognized the cost or the expense of the stock options, which is part of this management incentive plan. We've recognized it in this year or in year 2021. This again has led to an increase in this marketing and selling line.
If we were to exclude those reallocations and this recognition of expenses, then in fact the marketing and selling expenses are growing more or less in line. They're around 20% or just over 20% increase year on year, if we were just to look at the actual expenditure into marketing and selling. The G&A in fact has gone down, so this also has some effect of that reallocation. Here probably the best is to look at the sort of the SG&A figure as a total. And then we see that we have this 10% increase.
Nonetheless, again, it's I have to mention that also in 2020 we had some recognition of expense which was attributed to the share award which was again part of the management incentive plan, and this was done in 2020, a good chunk of it. Now moving on, if we look at other income or other expenses. So here we have the adjustment of the fair value of biological assets. This year we had a positive effect of RON 2.7, last year we had a negative effect of RON 2.9. We have this impairment loss on the trade receivables. This is something.
We have a few receivables that the auditors and in fact the management considered that it is a correct approach, more conservative approach, to recognize these impairment provisions. Even though, if you may remember in previous years we've done some impairments or some provisions for impairments. We've included them in the P&L that we've reported, but we've managed to recover those trade receivables. Similarly here, the management is relatively confident that we'll be able to recover these trade receivables. Nonetheless, we thought it's more prudent to mention them here.
We have some other income, which is some release of deferred income, particularly that's coming from some grants that we have received. We arrived to an EBITDA of RON 72.4. Now, here, I have to actually mention that in fact, when you see the EBITDA of RON 72.4, and remember, I'm still staying in the column of wine in 2021. Then, lower, you see a net profit of RON 45.0. In fact, here, we have omitted in this presentation. Perhaps we'll have to make a little adjustment to the presentation or we'll republish it.
We have not taken into account, in fact, recognition of loss from the Ecosmart share of 27% that we had before we have acquired the additional stake and made it a subsidiary and have consolidated the numbers. Because of the process of evaluating the company, there we had a portion of the negative impact from Ecosmart that we have taken in from the 15th of September 2021. However, there was another portion, which was RON 2.2 million that has not been taken out or added back into this column.
In fact, the net profit, if we were just to take the wine business, would be around RON 47.2 million . If we were to look from this perspective, I know maybe some of you are analyzing the quarter performance year-over-year. And I'll quickly open up for myself here an Excel. The impact, the negative impact on the net income from the Ecosmart consolidation and acquisition is RON 6.2 million . Now, of course, this is not a direct negative. This is not an operational negative impact.
This is more of a P&L negative impact because we have, again, done some provisions for impairment on some of the prepayments there, some of the current assets. We are confident that we'll be able to either regain those prepayments or give the services for them. But nonetheless, again, prudent approach we have made, sort of a very conservative, which in this sense shows a negative impact on the acquisition of Ecosmart that now is being consolidated. If we were now to look on the left side, if you look at group total, or perhaps let's look a bit on the right side. We look at the recycling column.
Right next to the wine column, there's the recycling column. You see that we start with a revenue of RON 7.3 million. Then we have a gross profit. After cost of sales, we have a gross profit of RON 2.2 million. That's again, I'm speaking about Ecosmart here. We have a net profit of RON 3.9 million. Again, here, we should have added another RON 2.2 million. This actually changes the situation a bit. In fact, it shows the wine business as it should have been with a net profit of RON 47.2 million. The P&L that's attributable to the Ecosmart business at RON 6.1 million in negative terms.
I've tried to explain it in concise terms because I don't want to stay on this slide for too long, but I'm happy to take some questions. This is the situation at the moment when it comes to our financial results. We believe that this is a strong result. Again, I remind you that adjusted from the Ecosmart. If we wouldn't have consolidated Ecosmart, Q4, the fourth quarter alone, net profit margin or net profit would have been close to RON 7.5 million. Of course, this would have shown a different profit margin overall for the group or for the wine business. Good. Let me continue further.
I'll speak a bit about the market. Romania keeps performing well. You see here that we've grown in Romania with 70% year-over-year. Purcari has shown a very good result. Part of it was also the launch of Nocturne which is, it's a series designed for HoReCa and launched only in the HoReCa channel. We also launched some other SKUs. Overall, Purcari has done very well. Bardar also, you can see here, plus 52% and, Bardar overall looks very promising for Romania and we expect that we'll be able to grow at this kind of rate going forward. We have launched Domeniile Cuza in Romania. It's a new brand. You probably saw it.
It's also somewhere in one of the notes where you see the mix of sales in the financial report. The numbers are still low because we recently launched it with some ramp up in Q4, so it was just in [Carrefour] at the beginning, and then right now it's being listed in other key accounts. Moldova, we're seeing an increase of 61%, pretty much on par with 2019. This is worth to mention that it's on par with 2019 despite some channels not going back to previous numbers.
For example, HoReCa is still not back to the 2019 level and duty free, which is also a channel for us, has not recovered to the 2019 levels. Bostavan has shown more or less flat numbers for Moldova and Purcari has shown positive numbers, particularly. Purcari has shown very strong numbers of course 76%. Bardar has shown +55% and Bostavan +36%. If we were to compare to 2019, then Bostavan is fairly flat and Purcari and Bardar with a slight increase. Poland, we are posting now where we're showing here a decrease of -15%.
In fact, for the fourth quarter we are flat and basically the impact that we see in Poland has a few components. Some components is of course there was some price war, particularly at the beginning of the year, with where our competitors have been in promotions for longer period of time. There's also the impact that we had from the Biedronka. If you remember, I've mentioned this also in previous presentations. We had some stall in our sales in the Biedronka. However, we are now back in that key account. That shows that in Q4 we are flat comparing to 2020.
In a way we are recovering the sales, but we were not able to recover, let's say, the loss of sales that we experienced in the earlier part of the 2021. In Asia it's difficult to still do business. We experience high restrictions from the state when it comes to doing business there. Exports, there's some friction when it comes to exports. Friction when it comes to local sales and events and participating at even wine expos and so on.
Overall, we managed to retain a relatively flat position, so we have -2%, but nonetheless we are -2% versus 2020, but still -44% versus 2019. Czech Republic and Slovakia, we still are impacted by the Tesco restructuring and, yes, you know, it's a very competitive market. Still the segment that we're in, Czech Republic is very competitive, is relatively highly sensitive to price. We've managed to retain a flat sales position versus 2020, -2%. In Ukraine, we did well, so we managed to increase +20% versus 2020 and +33% versus 2019.
Of course, we're yet to see how 2022 will progress. We are looking at how we'll manage sales in Ukraine and how we'll manage operations. Remember, we've also opened a representation in Ukraine. Now, more focus is being given towards addressing Ukraine as a humanitarian crisis before a business crisis. Nonetheless, if you were to look from a share of sales, Ukraine is at 4%. Even if we were to, let's say, fully lose the sales in Ukraine, it would have an impact on the business, but it would be limited to around 4% of the total share of sales.
If we look at other markets, a small increase at +2%. If you look at brands, overall Purcari has done very well, +28%, very strong growth. That's good because Purcari is still the more profitable brand in our portfolio. Bostavan, it's flat. We'll call it flat, -2% versus 2020 and -3% versus 2019. The main effect from the decrease comes from Poland, most and, to a certain extent from Czech Republic and Slovakia, where primarily the sales are for most of them in all these countries that I've mentioned.
Crama Ceptura has done relatively well, plus 9%, and Bardar with a good recovery in Moldova, + 23%. Okay, I will not say too much on this. Of course we've been active, very active, in 2021. We've launched new brands. This is important because premiumization is still a key component to our growth and to maintaining our margins for the long term. We've launched some new brands. The approach that we see that we have with the new brands is number one is to ensure that we take most use of the synergy. Well, let's say we use the synergies that we could use from the fact that we have a very strong presence in Romania, that we have strong relationships with our distribution.
At the moment, the main sales are Purcari and Crama Ceptura, less so Bardar and other brands. What we're trying to do now is to capitalize on the presence that we have in Romania and to introduce these new brands in Romania to capitalize on our presence. This it holds true for Domeniile Cuza, which it was launched in Romania and for Winefind. At the same time, we are developing brands that would be marketable to consumers in the region, in Europe, but even in the world. The new rose line that we've launched is such a line. But even the Nocturne for HoReCa, which we've already started to promote in the HoReCa channel in Poland.
I'll have to mention it, probably mention, now just quickly. Some of you don't know. This is a very proud moment for Château Purcari. Château Purcari has become the most awarded winery in the whole world. We speak here about very reputable wine contests in the world. It has managed to get 333 gold and silver medals. This is a new record. We're very proud to have such a recognition from the experts at these competitions. Okay. I'll move to the guidance. As you can see now, we've slightly extended the range that we give the guidance.
We've given the guidance on the one hand for revenue growth for the group overall, which includes Ecosmart, and we've given the guidance for the wine business for revenue growth. Then we're giving the guidance for EBITDA margin for the group and for the net income margin for the group as well. We may seem a bit conservative here, but if you look at the guidance that we've given in the beginning of 2021, we prefer to be conservative when it comes to guidance. We've given a guidance of 12%-14%. Of course, we've managed to beat that guidance with the numbers that we presented today.
We have shown a guidance of 28%-30% margin for EBITDA and 18%-20% margin for net profit. For EBITDA, we are within the range that we've provided. In fact, we've beaten this range at 31.4%. And for net profit, we are within the range of 19%. Overall, our approach is to rather be conservative rather than overpromise, rather underpromise and overdeliver. What's worth to mention, and I've mentioned this already, that we are in a strong position when it comes to our balances.
You know, with crises like this, of course, it's a humanitarian crisis and this is the focus. But nonetheless, in crises like this, companies that are strong and are healthy, they manage to go over this crisis and become even stronger. For Purcari, this has counted or holds true, even from 2006, first embargo from Russian embargo, 2013, the second Russian embargo, where we have come out even stronger than we entered into those crises.
We believe that even after the whole coronavirus pandemic, we have revisited how the company operates, and we believe that we have come out stronger with higher market shares in key markets for us. We were able to communicate our messages in markets such as Romania, for example. To some extent, we believe that even from this crisis, we'll be able to come stronger. Most important, of course, we believe that the region will come out stronger, Ukraine will come out stronger from this crisis, and the world overall, we believe that we'll come out stronger from all this.
Our messages, we believe, will come through in a manner that appeals to the empathy of the audience. We are in a way involved, we are in the middle of this crisis. There is a product which is the manifesto for exactly the crisis that we have at the moment, which is Freedom Blend. It's a blend of three local varieties. It's Rară Neagră from Moldova, Bastardo from Ukraine, and Saperavi from Georgia. This is a manifesto for the freedom that the countries of Moldova and Ukraine and Georgia deserve to have and need to have.
We believe that we have a message to pass to the world through the wine, through this blend that we already have. Good. I will close it here. I want to say thank you for listening and let me open for questions and answers.
Please feel free to address any questions via chat, or you can turn on the camera and address it directly.
Hi. Quick question. On the recycling business, what's the plan there? Obviously now you have a majority stake. It was previously mismanaged, but what's the plan there? What's the game plan there?
Yeah. Thank you, Roger. It's a good question, and we wouldn't have acquired this stake if we didn't have a plan over there. Again, what's important to understand that we have invested a relatively small amount of money in this business. This business can have a relatively profitable operations. At the moment, there was some mismanagement, as you've mentioned, and we have even done an impairment, or we've got provisions for an impairment for different current assets of around RON 10 million. Some of them for the whole company. Some of them have fallen in the period after fifteenth of September, when we have become a majority stakeholder or shareholder in the company, and now it's a subsidiary and get consolidated.
Some have moved or were before that, and we have taken only a chunk of that impairment, RON 2.2 million. The plan is very simple, and we have done this already. We've changed the administrator for the company. There is some court cases and some types of penal cases that are now being in dispute and that are under litigation. The lawyers give us very high confidence that we're going to win, which means that if we win, besides the penal implications for certain members of the previous management, we'll also be able to recoup the sums that we have provisioned as impairment.
With the change of management, basically, we put the company into a good operational mode. This is by default a profitable business. Basically, you simply cannot lose money in this business. It's a, you know, waste recycling management service. It's a service. It's more like a broker service, which in a way manages to connect the waste producers with the waste recyclers. You can imagine that there may be many waste producers of different types of waste, and there are many waste recyclers for different types of waste. You can imagine that the companies that produce the waste, they cannot manage to actually take care of the recycling of this waste.
What happens is that a company such as Ecosmart is the sort of broker in between. Number one is change the management. We've done that. Put the company on normal operations. We've done that. Win the litigations. Number three and number four is start acquiring very strong customers. We are looking at customers like, I don't know, Metro, Coca-Cola, and similar customers. We've already had meetings with some of them, and we had very positive feedback. Also because of the fact that in fact, our approach is a very, let me call it, clean approach to waste recycling management is appreciated and is viewed positively by big companies.
We believe that we'll be able to gain some business in the coming months and years back into Ecosmart, and we'll actually make this a successful company. Of course, you know, we'll have to find a way in the future to consolidate or how to consolidate these numbers. Let me just stop the share. Stop share. Of course, we'll have to find a way to consolidate the numbers as we go forward. Because one concern that we have, and this concern is actually taking place at the moment, is that investors will be confused with the consolidation of the Ecosmart numbers. The issue that we have at the...
Right at the moment is that the, because of the so many adjustments that happened on the Ecosmart side, we've had to put in some negative numbers that have impacted, you know, not operationally, but from a P&L perspective, our EBITDA and net profit. Going forward, what will happen is that we still believe that our margins will stay strong. Yes, we will have, you know, because of the guidance that we've given, we may have some margin pressure in 2022 and potentially some in 2023 from the fact that the cost of grapes was higher in 2020 and also to a certain extent higher in 2021. But we'll still have strong margins. This is what something.
This was always a message that we passed on to our investors, that we are both a growth company and a value company. We want to keep growing, but we want to make sure that we stay a highly profitable business. On the core business, we intend to do that. Now, with the acquisition or consolidation of Ecosmart, we can imagine that the waste recycling management business is not a business with the same margins as the wine business. Considering the return on investment of what we've invested in acquiring this majority stake and the yield that it will generate, it will turn to be a very good financial investment. We'll have a very high return on investment.
However, going forward, because if we were to consolidate that lower margin on the Ecosmart, we'll dilute the margin that we'll show as a group, and we'll have to find a way to make sure that we keep the message clear for investors and for analysts that use the numbers. Vasile, that you've raised your hand, so perhaps you want to say.
No, just one comment. Thank you for the comment. I realize we're short of time, but very quickly on this one. All the deals we have done in the past have been very successful. GCC, the glass company, I mean the non-core ones. GCC, we saw an opportunity. We acquired the stake in the glass company for EUR 1.7 million, and within four years we delivered a 5x cash on cash. Given the earn-out component, I think it's going to be more of a 7x cash on cash return. On Hush, remember the winery we bought in insolvency, the debt of, again, within 1.5 years, we doubled our money. Again, opportunistic investment. In this case, it's less opportunistic. It was a need to move in.
To put it in plain terms, the guy running this for us, the shareholders, you know, the companies that have packaging recycling needs, us, other beverage companies. The guy was stealing money from us. Of course, we had to remove him, intervene for a de minimis amount, obtain control in this company. We plan to fix it, as Eugen said, then divest below 50%. That's very important for us because we understand you don't want the mess of going to sort out how our P&L looks adjusted for this recycling business. Our intention is to fix it as soon as possible and then divest it below the 50% so that we don't have to consolidate it in our financials, and that we show you clear financials only for the wine business.
I'm sure we'll make a lot of money on this recycling business. The only regret I have, we intervened too late. We had to intervene earlier and get away with this crook that we had running this business.
Thank you so much. That's very good. Thank you.
Hi, this is Iuliana Tăcară. A question from Ryan. Regarding the impact of the expensive grapes. You're saying that it's gonna have an impact in 2022 and 2023, but how high is that impact? I mean, if we look at your guidance, and if we take into account the higher end of everything, sales, EBITDA margin, net income, it looks to be a significant impact. I mean, you're not gonna. EBITDA doesn't really seem to grow in 2022 compared to 2021 for the wine business.
Yeah.
Can you explain, I mean, where should we see a normal EBITDA? Okay, now these two years, we're gonna be seeing the impact of expensive grapes. On the other hand, you did book already in 2020, if I remember correctly, some adjustment of biological assets. I mean, you did provide guidance. You said that the impact was going to be in 2021 as well. It's quite high. I mean, where should we see a normal margin for Purcari right now? If we exclude, of course, the recycling business.
Yeah. Thank you. Look, for now, because of the small numbers, the recycling business will not have an important or a radical change into the margin that we see on the EBITDA and the net income side. So the gross margin that perhaps you can reference or perhaps you can use it in the models. We're looking at a gross margin of somewhere around 45% or even lower than that. We are looking at somewhere between 40%-45% gross margin in 2022. That will go up because what's happening at the moment is that and we had the impact in the fourth quarter.
In fact in the fourth quarter we had the first, let's say, stronger impact of the fact that 2020 was a difficult year for us. Let me tell you why the 2020 year was a difficult one from the cost of grapes perspective in 2021. 2020 more difficult year for us because in fact we had low yields. Because of the low, relatively low yields that we had on our own vineyards, the cost of grapes was relatively high, so it was higher. In 2021, we had good yields on our vineyards, but then we have acquired at a higher cost. Still the 2021 negative impact is smaller than 2020.
2020 is the year with a higher impact on the cost of grapes, on the cost of goods sold. In the fourth quarter, that was the first impact, and then we expect somewhere the gross margin going forward to be 45% or slightly under 45%, in 2022. If you look at the previous margins, they were, you know, in the higher 40s or around the 50% mark.
I mean, but if we were to look at a normal year, I mean, okay, from this I understand that 2022 will not be a normal year.
Yeah.
You will have this impact from a very weak harvest in 2020. What should be the normal? Because
We should revert to the margins where the gross margin is around 50%, and then EBITDA is around 33%, or between we'll take 30. Let's call it 30, 33, let's call it 30. And the net profit of 20. This is sort of the formula that we see in the long term for us. Of course, the future can take different turns, but the normal business or the normal margins that are, let's say, normality for our business, for the wine business is 50% gross margin, 30% EBITDA and 20% net profit.
You don't see that in 2020. Basically, you're gonna see a very strong impact in this year and milder impact in 2022.
Yes.
Probably afterwards.
2023. Yeah. By 2023, of course, we'll be looking at mitigating the impact with the price increase.
Mm-hmm. Uh, in two thousand and twenty-three?
Yeah. By 2023.
By then.
We'll look to attenuate or to cover the impact from the higher costs through price increase. We believe that even though you know in a crisis the purchasing power you know decreases now with all the inflation but the crisis in fact show to be good for wine sales. I'm not referring to the current crisis in Ukraine because of course we do not want to refer to such a horrible humanitarian crisis and make a link to business. I'm just saying in general. Overall crises are you know historically in our business and in general for the wine business crises have been have not had a negative impact on the sales. We're already observing competition increasing prices.
We believe that, even though it's always difficult, there's always that price stickiness, and it requires negotiation with our distribution partners. We believe that, as the time passes, we'll be able to more and more pass forward price increases.
I understand. Regarding the sales guidance, first, regarding sales in Romania, they were actually quite weak in Romania in the fourth quarter. I mean, I think year-on-year, they were kind of flat. I understand that. I remember you were saying that fourth quarter 2020 was very good, but still flat sales is not-
Yeah.
It's not something that we expect in Romania.
Well, the fourth quarter in Romania was a growth of just over 6%. Just the fourth quarter, year-on-year.
4%. Yeah.
Six.
But, uh-
Okay.
Okay. I have four, but no matter. It's very small still. I mean, compared with what you've delivered so far, in Romania, it's very small. At the moment, Romania is a very large part of your sales. I'm just wondering what is your capacity to grow in Romania going forward. Because actually the sales guidance that you're providing right now, of course, is way below what the guidance that you've provided in the past. I mean, yes, we had 2020 crisis year, 2021 crisis year, 2022 apparently crisis year again.
Yeah.
Still, I'm just wondering where is the growth capacity of the company? Where should we see this growth capacity? If you're no longer growing that much in Romania, that will have an impact. That's why I'm asking about Romania, but it's all correlated.
In Romania, we do plan to keep strong growth, double-digit growth in Romania for 2022. Yes, you know, one may wonder how we can grow further, and there are many ways that we can grow further. We're yet to grow strongly in the HoReCa channel. With Lidl, by the way, if you remember, we had some halt in sales with Lidl that happened at the beginning of the year. In a way the 2021 sales in the majority they lack Lidl sales. We are looking at, we are in talks and to a certain extent we'll be restarting the cooperation with Lidl.
That will have an impact, sort of a true up there. We have Barder, which is picking up sales. We have the introduction of other new SKUs such as the new rosé and Domeniile Cuza that we're launching in Romania. Overall we still have space to grow in Romania. Besides Romania, there is some unrealized potential still in Poland. We see Pokal picking up there to a certain extent. Of course, we have the sales of, let's say the mainstream brands, and we'll continue pushing those. For us, what's important is to start sales of Pokal in key markets such as Poland.
We are doing very good progress when it comes to sales in the other category, in the mix of sales based on regions. We have good progress when it comes to sales in U.K., in the Nordics, in Western Europe. We should see some growth coming from there. We believe that China at one point will start recovering at a faster pace. Overall, there are some growth directions that we believe will provide that growth and will be successful. Nonetheless, still from the growth perspective or from the growth that we show in other figures that we show in our guidance, we believe that it's realistic, but somewhere on the or with the principle of underpromise and overdeliver, as we always do.
What's the scenario that you took into account regarding Ukraine? It's 4% of sales, but still 4% is significant.
With Ukraine, we'll have to see how the situation in Ukraine goes. We haven't done a scenario so far when it comes to sales, but we are assuming up to 4% share of the sales being lost in Ukraine. It depends on how the situation will go in Ukraine. At the moment.
If you have the interview here, colleagues. Look, I actually am one of the 100,000 refugees because as you know, I was raised in Kyiv. I somehow got into Moldova last night. Look, very quickly on Ukraine. The reason we provided such a broad guidance is exactly because we don't know what's going to happen in Ukraine. I saw the market overreacted to the guidance we provided. I think it's unjustified. I think the company is in very good shape. Yes, we have development ability in Ukraine. We're trying to do everything to minimize any damage there. On accounts receivable side, we don't realize much cash there because we've been selling primarily on prepayment. Financially the exposure is not large. Yes, we run the risk of losing some sales there or all the sales.
We don't know how it's going to evolve. That's why we provided a broad range for the guidance. Now, in terms of Romania, we keep getting these questions, how guys are going to grow in Romania. I keep repeating, we're number four player in Romania with a market share of 11%. We are number four player with a market share of 11%. There's enormous growth potential for us in Romania still. I'm talking only about wine. In sparkling we are very low market share. In BIBs, which we are growing at triple digits rate, this is branded, we have very low market share. We just started. We have enormous potential in Romania.
Again, I think if you do your math in terms of the guidance and you adjust for the effect of this recycling business that is a little bit messing up our financials and makes it difficult to apprehend for you analysts because I can imagine you have a lot of companies, you'll see that the company is in a very good shape and will have a very strong 2022. I cannot say it stronger that, look, the market has dramatically overreacted. I still don't understand why this happened, but I hope our results will show that the market has been dramatically wrong.
No, I was just wondering in the guidance what was taken into account regarding Ukraine. I mean, you see revenue growth 10%-15%. I was just wondering what you accounted for when it comes to Ukraine. Just so we know. I mean, of course the sales in Ukraine could be zero. I'm just wondering what you reflected in the guidance. Did you reflect zero growth there or zero sales or 2% of your sales there? I was just wondering what it reflects.
Iuliana, that's exactly what I'm saying. Because we include in our guidance sales in Ukraine from 0%-4% of our sales, it's 0%-4%.
Oh, okay. Now I get it.
That's why our range for the guidance is so broad. It's 10%-15%, again, for the wine business, and 15%-20% including the recycling business.
Mm-hmm. I understand. Regarding Asia and China, you don't really see China picking up this year. I mean, from this guidance, it doesn't really show that you're actually seeing much growth in China right now. Is this how we should treat it?
China is also a market where there's quite a bit of variability in what the sales will be. China was historically 7% of the share of sales. Now it's at 3%, so this buffer or leeway that we may have in terms of sales is also included in that guidance. Of course, we could not give a guidance of 10%, ten percentage points difference. We believe that somewhere in the guidance that we gave with the five percentage point difference between the lower and the higher thresholds is something that takes into account possible variations that may come from ups or downs for Asia and Ukraine and even other business.
Can you comment? Sorry, one, just one question on my side. Regarding Moldova, what you're seeing in Moldova, what you're expecting for Moldova.
In Moldova, we expect higher single digits or low double-digit growth in Moldova.
Is this sustainable? I mean, the growth in Moldova, do you see this as sustainable? Because I guess competition is quite high in Moldova in the end.
Yes. Yes.
Assuming, I mean.
Yes. Yes. We see it sustainable because remember, and this is again on the conservative side, the number that I mentioned. Because remember that the growth, our growth has two components. One is price and one is volume. Historically it was around 1/3 was price and 2/3 was volume. Now it may turn where, somewhere around half of the growth may be price, or even more than that.
Thank you. If there are no more questions, can I ask some more?
No problem, Iuliana. Of course.
Regarding marketing and sales and G&A.
You're probably asking all the questions that everybody else wanted to ask, so it's fine. Yeah.
Regarding where do you see marketing and sales and G&A for 2022 and going forward as well as percentage of sales? I know I usually ask these questions, but I just want to know if anything changed here.
We're looking at marketing and sales to be around 11% of sales.
Mm-hmm.
G&A also around 11% of sales.
Okay. Nothing changed from this. I guess going forward, probably around the same.
Yes. Yes.
Are there any one-offs we should be seeing in 2022?
No. No more one-offs. We have the considerable one-offs happened in 2020 and 2021.
Hi, Peter Grgašević here from InterCapital Asset Management.
Hello.
Can you comment on your second largest shareholder, Horizon Capital, which is situated in Ukraine? Does that impact your business in any way?
Maybe I'll take the question as the.
Yeah.
.....[d] The situation doesn't impact our holding in Purcari. We are blessed to have assets also outside of Ukraine, which diversifies a little bit our exposure, though we're really exposed to Ukraine, of course. Short answer to your questions, there's no plans to divest of that stake. I want to make sure that that's a very clear message.
We may buy more.
Thank you very much. What are your tools to battle the inflation? How have you managed it so far?
We've increased the prices, but relatively modestly so far. We have passed some increases for Purcari, which is around 5%. Also some price increases for Bostavan. It ranges from 3% to even 30%. On an average, it should be somewhere around, maybe around 5% as well. Of course, the partners are. There's definitely an understanding of why the prices should increase at the moment because we experienced, to a certain extent, some increase in costs. There is a clear understanding that in the world there is an inflationary effect going on.
For now, we've made the first increase in prices, but we are monitoring how the situation goes, and we may decide to go the road of a secondary price increase. Of course, that depends on variable factors. You know, we cannot. We need to increase the price in such a way where we have the most net positive effect from it. We want to make sure that we increase the price in such a way that it doesn't reduce the sales to an extent where in fact we have a negative impact on the overall figures. We will see further in the year how and where and when we apply a further price increase.
Thank you very much. One more question from my side. Your Purcari Freedom Blend is made partly from Ukrainian grapes. How many varieties comes from the Ukrainian grapes, and what percentage of COGS would it be?
I don't have the exact percentages of the blend. In the overall figures, the sales of Freedom Blend does not have a significant impact. I hope we'll get to sell more of them because it's not just a wine, it's a wine with a message and with a statement. Overall, the cost of production of this wine is very significant in the overall figures, of course. Vasile, did you want to say something?
Just to confirm that, I hope everybody understands these are grapes indigenous to Crimea, to Bastardo from Ukraine, and Saperavi from Georgia, indigenous to Georgia, and Rară Neagră from Moldova. They all grow in Moldova, so we source all the grapes from Moldova. We don't bring grapes from Georgia, we don't bring grapes from Ukraine because you cannot transport grapes at large distances. Grape is a fruit that is transported at, you know, like 30 km, 40 km max. We don't risk any supply shortages of course.
Okay. Thank you very much. That was very clear. Thank you.
Hi, I'm Justin Tetcher from BT Capital Partners. I have four questions for you. The first one is related to why COGS rose so much in the fourth quarter of 2021 to 63% of sales. Do we see here only the impact of Ecosmart or were other factors that impacted this? The second one is related to whether the company expects to perform better in markets such as Poland, Czech Republic and Slovakia in 2022. The third one will be, what should we expect in the first quarter of 2022 in terms of sales and COGS? The last one will be related to any updates regarding the M&A activities performed by the company. Thank you.
Thank you. Yes, if you were to look at the consolidated cost of goods sold, indeed, we have. On a consolidated level, we have this RON 130 million, out of which RON 125.5 million are coming from the wine business. You asked about why they're so high in the fourth quarter. There are a few things. One was the impact of 2020. The first one was the impact of 2020 higher cost of grapes.
The reds that are starting to be sold in 2021 come with COGS from 2020, and that was the first, let's say, quarter with sales of inventories, so to say, or produced from 2021. Number two, we had the effect of Ecosmart, which of course the gross margin of Ecosmart is far smaller, so it did have that impact to a certain extent. And also we had some impact from slightly higher depreciation in that or from PP&E that we have put into use in the fourth quarter. These were some of the components of the COGS. Yeah, sorry. That was number one. Number one.
Number two, Poland, Czech Republic, and Slovakia. We see a positive outlook towards Poland because we regained the Biedronka and we went back to a flat position versus 2020 in the fourth quarter. From there on, we should be able to generate increased sales. Nonetheless, Poland is a relatively difficult market because we are competing in the mainstream segment, so prices are decided for the customers. Even though we are very good and very active in, you know, trade activities and making sure that we generate sales from the shelves, even though it's tough, we are positive about Poland. Czech Republic and Slovakia, we have to see how the sales go.
We have seen that impact from Tesco. This Tesco restructuring just keeps changing the figures. For sure, in 2022, we'll be comparing with already lower figures from 2021. Because in 2021, we were comparing to strong figures of 2020, where Tesco was still relevant in the sales that we were doing through Czech Republic. In 2022, that delta will attenuate, so we'll be able to compare to a more apples to apples. Starting from that baseline, we should be able to generate growth in sales. When it comes to fourth quarter expectations of sales and costs, I've mentioned that we are looking this year for our gross margin to be around 45%.
We expect to start the first quarter with a gross margin of 41%. From then on, we're looking to stay within the guidelines that we presented in this presentation in terms of top line. Top line and then EBITDA and net profit. On the M&A side, the effort that the team is doing on the M&A side is not yet seen in the results. Yes, we have some results, but I would not consider them, you know, actual M&A transactions as the way we would understand it.
The fact that we bought a minority share in 8Wines.com, we don't see it as an M&A transaction, even though it was a transaction. The increase in stake in Ecosmart, it's an acquisition again, but it's not in the core business. Then we've acquired the Vinoteca Gherasim, but it was more of an acquisition of assets. We've acquired the vineyards that company had. It was more of an asset acquisition. The typical M&A transaction that we are referring to or that we have probably when we discuss about M&A, we've done, you know, very good efforts in negotiating with a few companies. These companies are in the Republic of Moldova or in...
Republic of Moldova, in Romania and in Bulgaria. This is the area that we're focusing on. We have some targets. Pretty much the targets that we have in Moldova, in Romania, in Bulgaria are at the stage before the binding offer. In fact, with one, we've already done the due diligence because there was an acceptance of the non-binding offer. We're yet to see based on the due diligence results what the final offer will be and whether we want to put a final offer. Just giving you here sort of an insight into, for you to have a feeling of where we are. We do have targets in all of these three markets.
In all of these three markets, we are close to either a binding offer or starting a due diligence process. We are close to a potential transaction. Whether any of them will happen, I cannot say. One thing that I can say is that we want to make sure that if we do make a transaction, that it's a transaction that is beneficial to the group. Particularly when we compare, you know, some of the multiples that we trade on, we want to make sure that the acquisition is done at multiples more favorable than the one that we trade on. That sort of we, by default, simply through the transaction, we give our shareholders a decent benefit.
Some of these businesses are in a more solid situation. Some are healthier, some are less healthy. Expect that if we make a transaction, could be of a target which is relatively healthy when it comes to margins. Also there are targets which are very unhealthy when it comes to margins, but we see potential. Expect different if we do a transaction, but this could take different shapes.
Thank you. All your answers were well taken. This was all by my side. Thank you.
Thank you. Thank you, sir.
Sorry, can you repeat what markets you're looking at?
Romania
Bulgaria maybe?
Romania, Bulgaria, Moldova. We have targets in each that are close to, let's say quite advanced, close to a binding offer. We haven't put forward any binding offers so far.
Regarding CapEx for 2022, that's the question I've got.
CapEx 2022. Because we've done some recent changes, we are looking at total CapEx of around RON 40 million. However, why 40 million? Remember that we mentioned that we need to do two irrigation systems. Only the irrigation systems alone are around half of this CapEx. And then we are doing a relatively large CapEx at Crama Ceptura, which will receive 50% of reimbursement. A good chunk of this investment, I will tell you even how much. Around four to five million RON of what I've mentioned will be reimbursed through grants.
If you remember from the previous when we discussed in previous presentations or conference calls like this, we discussed the necessity for investing in the irrigation systems. The mathematics is extremely simple. Whereby investing and increasing the yield of the vineyards, the breakeven point of such an investment is around three years. For us, let's say the investment in irrigation is a no-brainer. It's something that we need to do. In fact, any modern winery going forward and given climate change should have this. We will be actually the first winery in Moldova to have irrigation systems. Purcari and Bardar will be the first ones to have irrigation systems.
At the moment, there are irrigation systems for grapes or for vineyards, which are table grapes, not for making wine. Let's say the irrigation system for technical grapes will be the first ones in Moldova to have such an irrigation system. We believe it is not only important for the future, but in fact, it will actually create even stronger margins going forward because of the increased yields from the vineyards that we manage.
In 2023, with CapEx, you mean, similarly high?
Yes. No. We see it in fact falling strongly. We're looking at around RON 5 million going forward.
RON 5 million? CapEx.
Yeah. Yeah. What could happen is, of course, we are planning this CapEx spending in 2022. What could happen is that what I've mentioned now are all the projects that we are initiating in 2022. What could happen is that some of these projects fall into 2023, and then some of the figure would be diminished this year and would be passed on to the next year. Other than that, we do not have major, let's say, CapEx plans for 2023 at the moment.
Going forward, look, some other directions that could, let's say, change this prognosis for CapEx that I've just mentioned for 2023 is if we decide to go more sustainable because we're working now on the ESG side, so working on having this internal audit when it comes to our situation and our position on the sustainability. We'll have a sustainability roadmap. Part of that, what we could have is that we may want to say, "Okay, we want to invest more in photovoltaic panels and other, you know, maybe water recycling systems and this." At the moment, based on the, let's say, maintenance, because our maintenance CapEx is around the figure that I've mentioned, that's the maintenance CapEx.
RON 5 million is maintenance CapEx?
Yes.
Okay.
That's maintenance CapEx, yes.
Thank you. Just follow-up question on M&A side. Just what level of enterprise value to EBITDA are you looking for when making the transaction? Or do you have some other multiple you're using when making acquisition? Do you have some target of debt when making one?
Target of debt?
Yes. Debt target, like when you're making acquisitions, so you'll go, 60% debt, then 40% equity or something like that.
When we speak about multiples, it depends. In some cases, we can compare multiples. The you know, the EBITDA are positive, and we can say, "Okay, there's a multiple of, you know, of X." In some cases, the EBITDA is negative, and then we may have to take a multiple of sales or in general, in fact, the approach that we have is not necessarily from a multiple perspective. It's from a perspective of the assets that we acquire. We're looking at vineyards, we're looking at the winery, we're looking at brands, we're looking at market share, and we're looking at opportunity costs.
Because, you know, if we look at markets such as Bulgaria, there is a strong business case to do greenfields, where you recoup, you know, 50%-90% of your investment through subsidies. This is how we evaluate. We don't necessarily have a specific rule of doing multiple. For sure, we're not looking at buying to higher multiples than the multiple that we have for Purcari already.
Thank you very much. Just one more on the gross margin. Would you say going forward that the gross margin will be lower than historical of plus +50%?
We will have a pressure on the gross margin for 2022 and, to some extent, potentially for 2023. We're looking at 2022, the gross margin to be, let's say 45% ±, more minus, so I would say somewhere between 40%-45% or 40%-47%, depending on how we manage to change that with price increases.
Would you say so, somehow in the future you could manage to go also above 60% or?
Normal business. If we didn't have the very difficult year of 2020, at the moment, we would still be looking at a gross margin of around 50%.
Okay, that's it. Thank you very much. The last question from my side. The last question. I didn't hear. I was somehow disconnected when you talked about Ukraine. Just what kind of implications does war in Ukraine impact your daily operations?
Well, there's three implications. Number one is humanitarian. We have an office in Kyiv and we have team members in Odesa. We have people, Ukrainian people that work for us in Ukraine. We have offered all the support required to bring them in Moldova and to take care of them. That's the humanitarian aspect. That's number one. Number two, the second aspect is sales. At the moment, 4% of sales of the group is Ukraine. There's this leeway of what the sales will be in 2022. It could be, it could stay at 4% share of our sales, which means that we maintain our sales in Ukraine, or it could become zero.
For some reason, we're not able to export to Ukraine at all. The impact number two is sales. Impact number three is the receivables. Well, at the moment we do have some receivables from Ukraine, but they're not extremely significant to. We need to take care of them, of course, and we are looking to collect them. We'll have to see. If the situation becomes worse or it stays difficult in Ukraine, they may appear on the audited accounts as a provision for an impairment on those receivables.
Thank you very much.
Any comment how high these receivables will be?
These receivables will be around RON 4.5 million. By the way, here, I'm saying 4.5, it's three countries, because we're looking at three countries that we take into account as a risk at the moment. Number one is Ukraine with RON 2.9 million. It's Russia with RON 700,000, and Belarus with RON 850,000.
Thank you.
The good thing is that all these receivables are in currency such as euro or U.S. dollars. They're not in local currency. None of them are in local currency.
Anything on the dividends? Can you say anything about dividends? You're gonna be paying out of the net profit, excluding one-offs, with one-offs, how does it work? Audited ones.
Well, the policy, our internal policy, states that we give out up to 50%. We may decide even to do more than that. We have managed to retain strong earnings in 2021. Our general intention, I cannot give too much information, but general intention is to give out dividend. However, let's remember 2020 when we had to hold on the dividend given the fact that there was this uncertainty ahead of us, which was the coronavirus. Now we have another uncertainty going forward. I cannot say that we have made a decision.
Generally, the intention is to pay out a dividend, but we'll have to evaluate and to see if yes, then how much of a dividend we want to issue. I'm sorry to not be more specific. In fact, it's still internal discussion.
Thank you.
Generally, of course. Look, generally, we want to keep paying our dividends because we just want to keep our stock attractive to our investors. The yields that needs to be generated to our investors needs to come both from the growth that we generate as a company, and thus the growth in the share price, but also through dividends. Generally we want to keep that discipline of giving dividends every year. It's unfortunate that we have a second crisis in a row just in two years.
Thank you so much.
Yeah. Thank you, Iuliana. Okay. Are there any more questions?
Look, if there are no questions, maybe I'll make a very short closing remark with your permission, Eugen. Of course, everything that is happening is really unimaginable, and believe it, we feel it more here on the ground than from what you may see in the media. At the same time, I want to send a strong message that while we step up our involvement on humanitarian aid because this is the right thing to do, our operations continue as normal. We keep producing, we keep shipping. We also appeal to the government to make sure that, you know, the borders are facilitated, you know, for the trucks to go. Everybody understands we have very good professional authorities. Everybody understands that the business needs to run as usual, business as usual. Now more than ever, we need this money.
The country needs the export revenue. In that sense, Purcari is doing very well. There's no disruptions on operational side. I just want to make sure everybody understands that. Now, in terms of what's next, probably many of you think, okay, could Romania be next? Could Moldova be next? Again, I think we won't be guessing anymore, but our strong view is that Moldova and of course even more so Romania, but let's talk about Moldova, because maybe there's where you have questions, is in a completely different category from Ukraine. Moldova has neutrality written in its constitution. One. Second, Moldova doesn't fit the Putin's narrative of denazification and demilitarization. Our army is like 1,500 people. You understand? We are like the Switzerland of Eastern Europe. This completely doesn't fit the narrative.
If he's so crazy enough to go after Moldova, then he just shows to the whole world that what he's doing in Ukraine that it's completely against his narrative, basically. That being said, I think anything related to Moldova is extremely remote. Just want to make it. For us, look, operationally, it's almost business as usual. Of course, we have to dedicate some resources to help the people in need. We have tens of our colleagues who are hosting refugees at home. I think we have to do the right thing in that sense. The message to our employees is that now more than ever, everybody has to step up.
Everybody has to do his or her job as well as possible and contribute to the success of this region, to the success of Moldova, to the success of Purcari, by doing our work well, by making more money, by earning more money, and showing that even in this region, volatile region, unfortunately, you know, you can build very successful businesses, which we have done until now. Every such crisis has gotten us stronger. In 2013-2014, we were at the brink of collapse, you know, when the war in Ukraine started. That led to a reinvention of our company. We went from 30% of sales dependent on Russia to 0% dependent on Russia. From 2013-2014, we grew at very high double-digit rates. You know, also, because kind of we all mobilized.
I feel the same kind of spirit this time around. I'm very confident that, you know, several years down the road, we'll look back and we'll say that, "Look, this crisis was tough, like really put us to test, but the company has emerged stronger from it." I want to leave you this message, and I hope very much that this will show in our share price too. Thank you very much, everybody.
Thank you very much. Okay. Thank you, Vasile. I'll not add further to that because I think the message has been passed very well by Vasile. I want to thank you all for the presence today. I want to thank you all for being beside us as investors. Now also, I want to encourage you to be beside the Ukrainian people with everything that you can to help this humanitarian crisis be passed in so to say the easiest way for the Ukrainian people possible. Thank you very much to everyone, and I wish all health and a very good day. Thank you.