The Bidcorp team, we welcome you. It's our pleasure to update you. Hopefully you've had a chance to read the update that we put out an hour or two ago. These really are fantastic results. I don't wanna use too many superlatives. They are very, very pleasing results. I think first and foremost, I need to pay a tribute to our teams around the world. I think the strength of these results underlies the enormous effort that has gone into delivering these by our teams around the world. I think the numbers make it look easy. It's not easy. It's tough out there in the world at the moment. There are a lot of challenges. There are a lot of things that aren't necessarily going right in the world.
Notwithstanding that, our teams have really taken the bull by the horns, have done what's necessary. They've continued to do what they always do and have delivered an absolutely phenomenal, amazing set of results. Yeah, it's a huge acknowledgement to the 25,000 people around the world or however many it is. I'm sure it's more than that now. They really have done us proud and continue to do us proud and will continue to do us proud in this challenging world. It's not an easy place. The world's not easy. I'm sure all of you know, and I'm sure you've all got lots of very interesting and challenging questions about this.
Let me try head off some of those questions at the pass and talk about what's happened and talk about how we, how we see the future. Basically, we spoke at the end of August, and we spoke about the strong trajectory that had started maybe February or March when the world opened up after the COVID pandemic. Restrictions by and large started ending. We've seen that momentum continue. It certainly continued through the Northern Hemisphere summer of July and August and some of September. Surprisingly, it's continued beyond that, and we're seeing it across all regions of the world. Obviously there is a little bit of seasonality that some of the European businesses do decline a little bit from summer through autumn.
They pick up again for the festive season, and then winter we'll see a slowdown again, and pick up as we head into the summer next year. Notwithstanding that seasonality, the sales growth that we're seeing across the board is phenomenal. We've given you those numbers that somewhere in the region on a monthly basis between 25%-35%. The currency's not really impacting that by all that much. Compared to 2019 BC, before COVID, those numbers are even greater. We're talking 40%+. Of course, some of that's inflationary, but a lot of it is volume growth.
I know you're all gonna ask me to split out exactly the differential of how much is inflation and how much is volume. I'm gonna tell you, like I always do, that we can't actually do that. It's not as simple an arithmetic or an analysis as you may think it is. Unfortunately, these aren't spreadsheet numbers. There are a whole lot of moving parts in very many complex businesses of different product categories, of us moving in and out of categories, of us moving in and out of customers, et cetera, which all have an impact on the inflation volume dynamic. We are seeing very, very, very strong growth in all the regions around the world, with the exception of Greater China.
Maybe let's just talk about Greater China for a while, then, you know, we can get that out the way. Hong Kong have released their restrictions to a degree. There still are quarantine requirements when you visit the country. For three days, you have to home quarantine, and then there's some other stuff you have to do. You've got to get tested. There's still the threat of being sent away to a government isolation facility if you test positive. Hong Kong really hasn't bounced back at all. The numbers we're getting out of Hong Kong are tepid. I'm not sure what other word to use. Hopefully as time goes on, the authorities will release those COVID restrictions, and we will see the same bounce back that we've seen everywhere else in the world.
From a China point of view, from a PRC point of view, I think it's even a little bit more negative than that. The restrictions are very unpredictable. They're very harsh, and there's no clarity as to where this is gonna go. We really don't know. A week ago, you would've said that they were reopening. A day ago, you would've said there's not a chance of them reopening. Notwithstanding the negative comments that I make about it, which are just reality and they're COVID related, our business is still profitable in Greater China. We are still operating. We're still trading. We still have customers. We're still importing product. It's just the volumes are very much depressed. When I say suppressed, they're actually depressed. It's the one weaker area of operation in our business.
To put it into perspective, though, to the end of October, Greater China accounts for about 3% of our operating profit for the four months and less than 1% of our EBIT. It's not a significant impact, and that's because Greater China's obviously decreased in size and the rest of the world has increased in size quite dramatically. From a numbers point of view, it's not having a material impact. For us, it's a positive story because at some point in time, Hong Kong, China will open up and the bounce back will be exceptionally strong as we've seen in the rest of the world. That's the China, Hong Kong story. As for the rest of the world, it's been phenomenal. Month after month, we've seen record sales numbers.
Our sales for last week were at an all-time record on a constant currency basis. I don't think the currency is making too much difference to the results. David will talk a little bit about that later. But we are each week, we're hitting records, we're hitting new highs, and that's coming out of almost every business around the world. It just really is a wonderful set of circumstances that we face ourselves, that we're facing at this stage. I suppose the question is why? That's a very, very difficult question to answer. We probably don't know the reason. We can speculate as to why it's happening, but we actually don't know why. There's no doubt that demand is strong. There's no doubt that there's revenge spending going on.
There's no doubt that people are getting out there and enjoying things that they might not have been able to enjoy, for two years because of COVID. I think there's more than that. I do think our strategy is working, continues to work as it has for many years. Our focusing on the correct customer segment is freeing up capacity for us to grow into the more profitable areas of business and, you know, determine where we want to take this business, as opposed to being dragged along a certain path. I also think the capacity we've put in over the previous years has absolutely put us in the position that we're in. We've had the ability to grow into some capacity.
We can especially see that where we spent big amounts of money in historical years, where we might have been criticized for spending too much CapEx, which I don't think we ever did, by the way. We can see the growth being strongest in those areas that received the most amount of CapEx. That CapEx was all infrastructure CapEx. It was all facilities that we created, which has enabled us to grow. There's no way to grow 40% from 2019, even with inflation. Inflation, I don't know where inflation is running on a blended basis. Maybe it's somewhere around the 10%-15% mark over a few year period.
Let's bear in mind, we probably had deflation at the beginning of COVID, and then we had no inflation, and we've had very little inflation before then. We've got to catch up now of inflation. I still think maybe it's 10%-15% over the full period, which still means there's a lot of volume growth that's come through our business. We'll continue doing what we're doing in that regard because we believe that investment in CapEx is the safest in-investment decision we can make. We know we'll get the organic growth, if we invest significantly enough. That's what's happened in the past. We've invested in the infrastructure, and we certainly are getting the rewards.
If we just run around the world quickly, and I'll give you some brief highlights, which are all fully detailed in the announcement we made. Australia and New Zealand have both performed absolutely phenomenally. That is a superlative I'll use. Probably surprised us as to the strength of the rebound. They're both operating at fantastic levels. We, we see no reason that that won't continue barring anything unforeseen and a macro type shock. We've exited some logistics business in both New Zealand and Australia, and I'm pretty confident we won't see the blip. We won't see any blip as a result of that.
In a very short period of time, we haven't sold the capacity, but we've certainly been able to maximize what we're doing elsewhere and open up some very good capacity for profitable growth. It really, you know, we've taken out between the two of them is probably about AUD 200 million or NZD 200 million worth of business, and I don't think that will have any impact whatsoever on profitability. Does create a further opportunity for growth in many businesses that were constrained. The Australian and New Zealand businesses are performing exceptionally strongly. The teams are highly motivated. They're in a good place. The biggest challenge they face, which I won't repeat, but it, that's faced in all our businesses, is labor scarcity.
It just is tough finding people to work, and particularly in the, in the lower paid, the warehousing and the driver type of roles as opposed to the admin or management roles. We really are struggling, and it really is taking a toll on our people. It's very stressful. When you've got the growth coming at you and you can't find adequate staffing, it is a, it is a difficult pressure cooker. They're also facing the issues of supply chain disruptions and product shortages. Some of it's agricultural, some of it is just shortages of product. We're working through that. That's just business as usual, caused by droughts, caused by floods, caused by whatever else, demand shortages. If we move over to the U.K., they continue to have record sales weeks as well.
They do seem to be picking up a lot of volume, we would suggest that that's market share. We don't know that for sure. We don't wanna be so arrogant to say it's definitely market share, it certainly would feel like it's market share. The U.K. business is performing well. The one comment we do make about the U.K. business is it has a much larger proportion of larger type of accounts. Those larger accounts are generally on fixed pricing contracts for a longer period of time than a smaller contract, which means you have a little bit of a lag effect in your pricing review.
We probably haven't seen the full extent of the increase in profitability in the U.K. operation yet, and there's a little bit of a time lag, but that absolutely will catch up. Now through all the turmoil in the U.K., if you think about it, in these four months, they've had three prime ministers. When you read the newspapers, you would think there's, you know, there's just no U.K. left. Week after week, our guys have delivered. Results have been phenomenal. Record weeks. The business is in good shape. We've got some good wins under our belt. We made a small acquisition. We are looking at some other acquisitions, and things are going very nicely in the U.K.. Turning to Europe, that's a very, very similar story.
All our businesses are profitable in Europe, even the problem children who are no longer problem children. Well done to the teams in Spain and Germany. We're certainly out of the, out of the worst of it, and now we face the future with great optimism in those markets. You know, we're faced with the, with the opportunity of what we do with those bases that we have. How do we, how do we grow, and how do we, how do we gain scale in those markets? In the core markets we operate, Netherlands is doing very, very well. On a cycle basis, their improvement will accelerate now because if you recall last year, the Netherlands went into lockdown sometime in November and got out of lockdown sometime in January. It was awful.
Whereas now we're trading at very strong levels. The business is doing well. Belgium, we exited a large national customer at the beginning of July. I looked last week, our sales numbers are about 28% higher than they were for the same week last year. You know, once again, it's freed up capacity. It's enabled us to move our resources around, use them more effectively and grow the business. Yeah. I'm very confident to say there's no blip as a result of exiting the business we chose to exit. Czech. Our Czech and Slovakian businesses is doing exceptionally well under the circumstances, bearing in mind that about 30%-40% of what they sell is to the retail segment.
What we are noticing is that the retailers are under far more pressure than the out-of-home market, and that's a global phenomenon. We are struggling a little bit in passing on the price increases to the retailers on the product that we manufacture, which is all the product we sell into the retail segment in the Czech Republic and Slovakia. Everything we're selling to retail is basically manufactured, which is feeling the impacts of inflation. We are having a tough time on passing that through the retailers. We're confident that that's a short-term issue. It will normalize. It will stabilize. Having said that, please don't get me wrong, the business is still most probably performing at the levels of prior years. It just isn't seeing the same growth that some of our other businesses are seeing.
The Italian business is doing phenomenally. We're strong growth, strong profit growth. We had a very good year last year. We're having a great year this year. We certainly are seeing good growth. Sales growth, I think is somewhere around the 21% that we're seeing sales growth. Profit growth is a lot more than that in the first quarter, in the first four months. Thailand continues the great story. We've got a business now that's operating at world-class margins, getting good sales growth. Fortunately, the horrible Ukrainian war doesn't seem to have had an impact on customer demand out of Thailand. That business has done well. Similar story for Baltics, doing well. Spain, Germany, profitable.
Portugal, we've got a great business there. Our only regret is we didn't invest more in infrastructure a few years ago because we are operating at over 100%, and there is a time lag as to how quickly the new infrastructure can be brought on-online. That is being done at the moment, it does have a one year, 18 months time lag. That business is a phenomenal business, a phenomenal base, is doing great and will become a sizable business in the years ahead. I don't think I've left anybody out of the European cluster. In the emerging markets cluster, generally, it's a great story. I've spoken about Greater China, which is off.
Singapore, Malaysia are doing amazingly strongly, both in Singapore and in Malaysia. Vietnam is very, very small and we're operating more or less at a break-even level there. We need to determine how we scale that business up. The Middle East is performing strongly. They're expecting a very, very strong November as a result of the World Cup. It would appear that it's not just a Qatar issue. We don't service the Qatar market. It's benefiting the whole Gulf region. Hotel occupancies are very, very high. There's a lot of money being spent as we speak. That will go on for another month. Notwithstanding that, the Middle East is doing very, very nicely, seeing some very strong growth.
Turkey is one of those wonderful stories where over many years we've struggled, and suddenly we're. Yeah. Suddenly you turn the corner, and when you turn the corner, it's full steam ahead. We've had a great season there. It is quite a seasonal business. That summer is a lot better than winter in terms of the out-of-home market. There's a big differential in temperature and consumption and primarily driven by tourism numbers. The Turkish business is sustainably profitable now. Notwithstanding the fact that there is hyperinflation and there are other challenges there, I think that gives you the opportunity to trade and make some money if you're a good operator. Africa. Our South African business is operating at record levels.
Once again, in a very tough environment with load shedding and whatever other issues you have going on. It is a story of two halves. The Bidfood business, the traditional food service business, is performing exceptionally strongly. The Crown business is struggling a little bit, primarily as a result of that retail story. It's the exact same retail story. The retailers are a little bit under pressure. They put us under pressure. That squeezes margins slightly. Having said that, once again, don't get me wrong, it's nothing to panic about. They're just not seeing the growth that we're seeing in the other parts of the business. They had phenomenal growth last year and the year before, and the same as the Czech business.
We really rode the coattails of the retail boom. Now we're just paying a little bit of that back in the retail-centric components of the businesses that we operate. Moving over to South America. I'll start with the smallest one first, Argentina, which is a real surprise package. That business is flying. It's really doing well. I guess that creates a dilemma as to how much investment you wanna put into Argentina. It's not big in the scheme of things, but it is a more volatile type of environment. What we are seeing, once again, is the ability to make very good money. If you have access to capital and you're a good trader, you can make exceptionally good returns in those environments. Our Brazilian business is certainly much improved.
We've made a couple of acquisitions. We're putting them together. That comes with a little bit of pain, which essentially we've been through. We've got a much bigger business now. I think the political situation is also a little bit, has been a little bit unstable in Brazil, in the lead-up to the elections. Hopefully that stabilizes now. The business is profitable. It's almost at our acceptable levels of profitability. It's trading at all-time highs. We're very happy with that. Chile is a slight challenge. Now, I don't wanna sound too negative because all of these, you're measuring them against their peers, and their peers are performing absolutely phenomenally. Chile is probably one of the laggards, and they're going through some, what I would just term growing pains.
We've started with a greenfields operation there, it's maybe 10 years ago, and we've built a national presence of scale. That comes with a little bit of pain here and there. We got into the meat segment, and that's requiring a little bit of learning and a little bit of adjustment as to what we do. We'll get there. They had an ERP change, which about one year ago, which disrupted the business for about six months, which we're now well and truly around and are doing okay. I think that's everywhere, I've covered off the world. Where do we see things going? Like I say, on a week-to-week basis, we're seeing the sales numbers come through. They're tracking exactly where they should be tracking.
We think we'll be in for a very good festive season around the world, barring anything absolutely unforeseen happening. I don't wanna talk too much about the negatives because it's real. There is inflation, although we do see inflation slowing down. I said the same thing a few months ago. Energy prices generally are easing. They're not getting worse. I see oil, the price of oil is coming down quite sharply. Europe appears to have enough gas for the winter. You know, we seem to be tracking the right way. There still are inflationary pressures. We still have labor pressures. We still have supply chain disruption. We still have product shortages. Where we see it at this point in time, you know, the trajectory that we spoke about in August has continued.
It's been a phenomenal four months, four and a half months. I think we'll continue that for the next, into the future. I think the business has undergone a step change. We're in a, we had two years hiatus through COVID, and probably when you normalize all of that, we're probably where we should have been if we didn't have COVID and we had our regular growth. You know, I think we're back on that trajectory. Once again, full thank you and credit to our teams around the world. They really have done phenomenally. I'm gonna hand over to David to talk you through some of the more financially focused numbers.
It's David. Just on the sales, I'm not gonna talk about that. I think we've covered that well. Gross margins are down slightly compared to the previous period, but when you factor in like the chip issue, a little bit in South Africa, and a little bit in the U.K.. Overall, margins generally are holding up very well in this really unique space. In terms of operating costs, the businesses are managed that particularly well. We can see that the cost of doing business and the measurements have come down quite a lot compared to the previous period. Despite all the cost pressures we are seeing, the businesses are really managing that as well as they can.
I think encouragingly despite the slight margin pressure, we are seeing some benefit on the cross-line and we've seen a pickup in trading margins. In terms of the EBITDA, just to clarify something that may not be clarified. We compare that against the pre IFRS 16 EBITDA. That's the traditional EBITDA reported. We've seen that pick up to about 5.9% in the four months to October. If you just on vision, the current vision and predictions in terms of under IFRS 16, it's about 6.6%. The EBITDA margins are nothing to be really deeply. In terms of working capital, that is up. It's absolutely in line with our expectations, considering the current circumstances of inflation, investing ahead of the Christmas period, so we've got the stock on hand.
Typically in this period we used to go absorption, which is normal, but this year's not. Although that's up, we're not concerned about it, but obviously are watching it. The other measure that we do look at is what we call our working capital as a percentage of average revenue. That's tracking at the high end of our range, as we indicate, somewhere between 4% or 5%, but still absolutely under control. Nothing really to add on the CapEx other than as Bernie has indicated, it's according to expected creation. As George said it. You know, that's under control. There's been a few acquisitions, nearly ZAR 300 million spent in the period on a few businesses.
Free cash flow as we would expect in this period, there is an outflow, a little bit above where we were, you know, in 2022. A lot of that has been indicated just within the working capital absorption. In terms of the company and debt covenants, there's no real issues to talk about there. We've got significant headroom within the group to obviously make investments organic and acquisitively. We remain well within our debt covenants. The only covenants I mentioned are not met, that is really not somewhere.
Well, thank you, David. We don't have too many questions. If anybody does have a question, I don't know if you know the process of just, you can send it through the Q&A box. I can only see two questions at the moment, of which one I don't think we can answer right now. I'll tell you what both questions are. The first one is how much of the growth is due to your initiatives offering well-priced options to customers, etc, as opposed to just COVID-19 recovery? Once again, I wish I could answer your question, but I can't. Yeah, it's all over the place. Who knows? We don't know how much is from where other than almost every sector is experiencing growth. Yeah, the travel sector is booming. The sporting sector has bounced back.
I'm not sure it's totally where it was, but it has bounced back. The cruise line industry is bouncing back at a phenomenal rate, and capacity is coming back. All segments of the economy are sort of bouncing back. Who knows where that's from. All I know is we are taking whatever we can and doing what we can, and that's reflected in these numbers. We've seen phenomenally strong sales numbers. That's I think is just a Like I said, it's a reflection of the market is strong, there's no doubt. I think we can see that in our peers around the world. Although our growth does seem to be a little bit more than in our peers.
But we also have this understanding, which might be wrong and might be right. I think it's right, that we are gaining market share in most markets. You know, we're just happy to take the growth wherever we can get the growth and move on from there. Okay, I've just got a few more questions. Sorry, they're just moving here. Let me start at the top because they're going the other way. What is the thinking around increasing the div payout considering a very strong performance? We'll talk about that in February. Yeah, we have a div payout ratio, and obviously if there's a strong performance, you're gonna get a higher dividend at the same payout ratio.
Whether we wanna carry on increasing the payout ratio or reinvesting in the business is a different debate that needs to happen. I think that absolutely reinvesting in the business is a very smart move at this stage. That we will, we'll continue to do. What is... This is from an anonymous attendee. What is the current standing on share buybacks given attractive valuation? I'm not sure what. Yeah, maybe the valuation was attractive at ZAR 270 million, and we missed the boat. I'm not sure what an attractive valuation is. You have to look and see if it's gonna be accretive or not accretive to do a buyback. It is something we do look at relatively regularly. Yeah, our view is not to overly jump into it.
We are conservative in our gearing and our balance sheet. We'll continue to be so. Are you seeing wage pressures alleviating as the broader economies are slowing? Yes, we are. Yes, we are seeing some more availability of labor. There's more of a normalization happening. Having said that, it's a very, very slow process. It's probably not getting any worse, is the best way to explain it. It's not getting better in leaps and bounds, but it's certainly tapering off. Maybe we're just getting used to it. We definitely are seeing that the pressures are normalizing and are a little bit easier to cope with. Can you talk us through any M&A activity that you're seeing in the industry? There's nothing overly major.
There was a deal done in the Middle East on a competitor of ours that we declined to participate in the process for numerous reasons. A company in the U.S. called Chefs' Warehouse purchased them. It was about a $100 million business. We are looking at a couple of acquisitions. Some of them are a little bit larger than our normal bite-sized chunks that we take. They're still not monumental and aren't gonna shift the needle dramatically, but they are bigger. Yeah, there's a 50/50 chance they'll happen. We will keep you informed. We've mentioned the countries that they're in. We are seeing opportunity out there. They are fairly priced. I.e., there's no bargains.
You just need to be a little bit careful in this environment because valuations are maybe coming down, not going up as interest rate rises. You know, we're just in that, in that phase at the moment, but there is some traction on some M&A that is a little bit larger than before. Could you give an idea of how important LATAM is now, and are there good inorganic growth opportunities there? Absolutely. I don't know what the, what the size is. Maybe David can quickly just tell us what the percentage of EBIT that South America contributes. Not a big number. There's a huge amount of potential, both organic growth and acquisitive growth. We really are scratching the surface. There are lots of product lines we're not in.
There's lots of areas we're not in in terms of geographies. There's lots of customer segments we're not in. We will build that business and scale it up quite significantly in the years to come. You know, we have been taking a relatively cautious approach, which I think is correct because some of those markets are a little bit more volatile than others. Over the time, you know, I think we've performed relatively well. We've got good bases from which to grow, and I think we'll see some good growth coming out of the area in the years to come. Given rising interest rates and eroding spending power in some of your key geographies, how do you reconcile that with the strong growth that you are seeing across the board? We can't. We can't reconcile it. Yes.
I do think, though, that there's good demand for out-of-home consumption. I don't think we're the only ones who are feeling it. Try get on an airplane. Try book into a hotel in the U.K. or in Europe or in Australia or New Zealand. You're gonna pay top dollar. Clearly, people are spending. Maybe they've shifted their spending. There's no shortage of demand out there at the moment. In August, the question was exactly the same. Everybody was expecting a calamity in September at the end of the European summer. That certainly didn't happen. The sales trajectory carried on exactly on the same path. How is the health of your customers reporting? I was saying that some restaurants are closing, but it's difficult to gauge based on a few anecdotes. Restaurants are closing. New ones are opening.
Poor operators aren't surviving, and good operators are thriving, which is a normal story in the market. There's no doubt that our debtors' position will deteriorate slightly because for two years you've had government support around the world. Businesses have been supported, and government have been there to ensure their continuity. That support has been withdrawn. People are on their own, and they're funding growth. Our good customers are growing pretty rapidly as well and are faced with the same pressures we're faced with in terms of rising costs and labor shortages, et cetera. We certainly, at this stage, aren't seeing any real stress. We're seeing nothing significant. There is an uptick. There absolutely is an uptick in call it delinquency or stretch payment.
It's nothing to get concerned about at this stage. This was probably trending back to a more normalized level of where it was pre-COVID, pre-government support. We are currently investing. This is my quote. We are currently investigating acquisition in New Zealand, Brazil, Belgium, the U.K., and the Baltics. What size are we talking about? Could you give some color, total value material? They're definitely less than 5%. I don't know which of them are gonna come off. Even if they all came off, it would still be less than 5%. There are in-country bolt-on acquisitions that are quite, I think would be quite important, for the continued growth of those businesses. We remain infused.
Once again, we're not betting the farm, we're not making outrageous bets, taking outrageous positions, and are being relatively conservative. I presume there is no reason why gross margins won't bounce back, and you won't just absorb this pressure. Furthermore, I assume cost of doing business can be kept around these levels, and hence paves the way for further margin expansion. Maybe being a little bit optimistic. Yeah, in high inflationary times, it is quite a difficult and tricky balancing act on the margin. Sometimes you give a little bit away, and sometimes you make a whole lot more. Yeah, you've got to trade your product, you've got to trade your customers and find the adjustment. Our margins have improved, and we will continue to see very slight improvements, efficiency improvements, but there are cost increases.
There's just no doubt that inflation, inflationary cost increases are there. Energy costs more, diesel costs more. Although it's now costing less. New infrastructure costs more. I'm, you know, all I'm trying to say is don't get too carried away with thinking we're gonna see a massive margin expansion. We're currently tracking just under 6% EBITDA margin. Yeah, 6% is probably a very nice number. You get a couple of the other businesses performing to that level and a little 0.1%, 0.2% increase, and you're, yeah, you've got very attractive margins. Confident in your ability to get Australia margins back to 7.5% this year? Yes.
You spoke in the past about the long-term ability to scale operating margin to the 7%-9% reason by scaling own brand, getting the customer mix right as markets mature. Is this a fair assumption? Absolutely. That's a long-term game, not a short-term game. I think you'll see it coming out of the regional analyses when we present that to you in February for the six months. We'll give you more color on that. That's a process. We will absolutely strive towards that, and some of the businesses are already at that. There are one or two businesses that are above that. That does give you a framework as to where we wanna take this thing in the medium to longer term.
How is the new customer growth in Horeca segment in the overall business? Are new restaurants, cafe or hotels openings back to pre-COVID levels? Is it expected to continue? That's the first part of the question. Second one is, private label growth, has it been strong, especially with shortage issues, or is branded products still demanded by the customers despite high prices? I'll answer the second one first. Private label has been hit just as hard in terms of product shortages as branded product. There has been a lot of substitution both ways, into branded and into house brand. There's a french fries shortage around the world at the moment, basically you take what you can get. That's gonna be repeated on some other products, which is an agricultural issue.
It's caused by droughts and floods and issues like that, which will normalize over a period of time. Our house brand strategy has been the same. We are growing our house brand, and we are seeing growth, and we'll continue to drive that to get to the correct equilibrium. I don't have the numbers here. We'll probably not even give you the numbers in the middle of the year, it is one of those important issues that we focus on in the business, we absolutely are getting house brand, greater house brand penetration, and will continue to do so. On this issue of Horeca, I think there's a little bit of a misnomer.
We're not only in the Horeca segment, because we do a fair amount of what we sell around the world is into the non-discretionary part of the market. We absolutely sell to hospitals and nursing homes and childcare centers and universities and educational facilities and boarding schools and defense forces and navies and I'm just trying to think of what other segments makes this up. Aged care, which is quite a big component of our business. It's probably somewhere around about 40% on average, which isn't impacted by Horeca. Even within those segments, there are some very, very correct customers. Some of it is national, a lot of it's not national, and fits perfectly well within our target market and our target aim of where we wanna grow the business.
Horeca is not for us all about restaurants. It's a much broader definition than hotels, restaurants and catering. I'm not sure what catering really means in the context of Horeca. We're seeing the, you know, the business is back to the trajectory of where it was. You've got restaurants coming back to life. You've got office functions happening again. We haven't had Christmas office functions happen for a couple of years. Those are happening again, office parties. People are actually getting back to the office, although I'm sure a lot of you are still at home. The world's getting back to normal. We're just seeing the benefit of that across the board. I don't think we can stratify it and, you know, target out exactly where the growth is coming from.
The growth is actually coming from everywhere, which I think is a great position to be in. You are exiting some low-margin logistics business in Australia, New Zealand. What % of total group sales still remain in these lower margin logistics business? As I've explained before, it's a moving feast. What starts out as a little customer, you pick up one guy who's got a hamburger shop, and then he grows into two hamburger shops, and that's great. Then he's at five, and that's good, then it's at 10, and then it's okay, then he's at 40, and that's, it's average. Then he's at 100, and it's not so great. He's at 200, and it's time to go. This happens all the time. That keeps moving. There's nothing. In Belgium, there are a couple. Sorry.
In Belgium, there are a couple that we do need to exit over the next few years. We are having conversations with them. It's not that easy because there's not a whole lot of capacity in the market. We do wanna be a partner, an honest and transparent partner as to why we're doing things. You can't necessarily, you know, instantaneously turn these things on and off. There's a big customer in Belgium which once again won't shift the needle in any way from a group point of view. None of this shifts the needle, but does free up capacity for us to continue doing what we need to do. Our views on Christmas trade, weather in Europe has only recently cooled down, although it doesn't seem to be showing in your November trends.
Do you have line of sight on Christmas bookings? What we're hearing is everybody's expecting a good Christmas. If you recall last year, Christmas was canceled. There was the Omicron outbreak. The Netherlands went into lockdown. The U.K. basically went into a self-imposed lockdown. I think it was the middle of December, and Christmas was canceled, and it was the same impact through the rest of Europe. What we're hearing from our people is that Christmas is back, and people are gonna spend. We're very optimistic at this point in time about where the festive season is. Quite a lot of our sales at the moment are actually in relation to festive season. Like I say, last week was a strong week 'cause it's record levels once again.
We remain positive about it. Okay, I think that's it. We've answered the questions.
contribution is about 70%, 30%.
At operating profit.
Then.
That's south of 3%. That's certainly got the opportunity to be a whole lot bigger and will be a whole lot bigger. I think in summary, once again, it's a phenomenal set of results. Our thanks go out to the teams around the world under very, very difficult circumstances. They've delivered once again. They will continue delivering. We don't think this is a flash in the pan. There's nothing in here that's one-off. It's coming across almost every single geography, every business, wherever we look, we're seeing a very similar trend. Very strong sales growth, maintaining of margins, controlling of the expense base, then you get the appropriate leverage as a result of that. You know, our teams have focused on what they need to focus on. They're not focused on the negative.
My advice is don't read the newspaper, don't watch TV. It's certainly not as bad as, you know, the press and the media and the harp makes you out to believe. There still seems to be a whole lot of spending going on out there. We'll continue down this positive way. We'll continue investing in the business. We'll continue down our strategic path of what we wanna do in terms of the direct customer, our house brand strategy and import strategy, a value add manufacturing strategy, geographic expansion, bolt-on acquisition. If anything suitable in new geographies come along, we'll certainly have a look at it. We're in no absolute urgent rush to get into new geographies.
We think there's still heaps and heaps of runway growth ahead of us in our existing markets as we've shown once again. You know, they say boring is beautiful. These boring numbers are beautiful and long may they continue. Thank you, everybody. I thank you for your attendance, and I look forward to seeing you all again in February and continuing the story. To be continued. See you soon. Thank you.