Compania de Distribucion Integral Logista Holdings SA
MAD:LOG
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Compania de Distribucion Integral Logista Holdings SA
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Good afternoon, everybody, and welcome to Logista’s First Half Results Presentation. I'm Isabel Troya, Head of IR for the Group; and today, Pedro Losada, our CFO will walk you through the results obtained during the first half of 2023 fiscal year. At the end of the presentation, we will have a Q&A session in which we will answer the questions submitted through the platform. You may write your questions at any time during the presentation.
Now, Pedro, if you may, we can proceed with the presentation.
Thank you, Isabel, and good afternoon to everyone. Thanks for attending this call. I would like to start the presentation by giving you some color or our main highlights for the period.
Focusing on our results, despite the adverse environment that we had during the period where inflation has remained high affecting growth expectations, Logista has obtained outstanding results in its main indicators.
Economic sales has recorded a 40% increase year-on-year. Adjusted EBIT 23% increase up to €183 million, and net profit has reached €126 million, which is a 43% increase. We will give you more details on all financial figures throughout the presentation.
Looking on to the second highlight, we have been focused our efforts during the six months working on the integration of the three companies we announced last year. In the following slides, I will give you more details on the different actions we are taking towards obtaining the synergies we had already identified between the new acquisitions and Logista.
We also wanted to stress our strong commitment towards ESG. During the period, we have not only reconfirmed ratings for Logista, but we also obtained new ones. The outstanding results for the period, including the contribution of the new acquisitions and the profit on inventory booked during the period allows for Logista to upgrade its full year guidance of which we will give you more information at the end of the presentation.
Our first highlight for the period is the excellent results we have obtained during the semester. I will just give you a quick overview, and I will dig deeper into each region in the following slides.
During the period, we have reached close to €6 billion in revenues, which is a 9% growth versus last year's first half. In terms of economic sales, we have reached €834 million, which represents a 40% year-on-year growth. The economic sales split per area; includes Iberia with €48 million; Italy €177 million and France €111 million. All three regions recorded year-on-year increases, reflecting growth coming from the new acquisitions and from the underlying businesses.
In terms of adjusted EBIT, we recorded a 23% increase year-on-year, reaching a total of €183 million, including €24 million of profit on inventory booked as a result of the changes in tobacco prices and taxes during the period in all three regions. This profit on inventories represents most of the expected inventory change for the full year.
Finally, net profit significantly grew, thanks to the excellent performance of the different businesses and to the increase throughout the year of interest rates up to-date.
Moving on to the integration of the acquisitions, I would like to give you more details on some of the actions we have been taking during this first six months of the fiscal year. Speedlink, was the first acquisition we closed and was consolidated into our accounts in February 2022.
With these acquisitions, we expanded our courier business into Central Europe, gaining access to the Netherlands, which is an important logistic hub for many multinational companies. We have focused our efforts on cross-selling between Nacex and Speedlink, and we have secured new agreements for Nacex operations in Iberia through Speedlink clients. Some examples of these new clients includes Rico, Abbott or Bausch + Lomb. We will continue to work on expansion of our courier segments throughout Central Europe, and we aim to open a second warehouse in the Benelux area to ease this expansion within Europe.
The second acquisition we completed was Carbó Collbatallé, which was formalized last October 1. This acquisition has been integrated within our partial business line complementing Logista Parcel by adding new services to our catalog. In terms of the synergies in which we are working, we have focused on the integration of long-distance routes for both companies where they share the same destination.
Furthermore, we are actively analyzing the different platforms, owned and managed by third parties within Spain in order to optimize both businesses. So far, we have already joined the platforms in Tarragona area into one single platform, reducing rent and creating last-mile synergies. And the platform in Victoria are currently in the process of merging also into one single warehouse.
Lastly, we are obtaining last mile delivery synergies in Madrid and Barcelona, combining the transportation for shared distribution channels between Logista Parcel and Carbó. In terms of future synergies, we continue to work on the combination of platforms I've just mentioned, and we are working on cross-selling between both companies, as an example, expanding Carbó's business into Portugal, Galicia and the Canary Islands, where they had little reach.
Besides, I will dig a little bit deeper into Transportes El Mosca, the last acquisition we made. El Mosca has been integrated within our long-distance transportation business together with Logista freight. In this case, most of the synergies will come from optimization and route integration. And in order to execute this, we have already installed security systems into 55 trucks and more than 80 trials from El Mosca allowing for transportation of high-value products such as tobacco.
With these newly equipped trucks, we are transporting fruit and vegetables from the south of Spain to the north of Europe, and we returned to Spain full of tobacco or high-quality goods such as Sony or Apple. We have also obtained a good distribution practice certificate for El Mosca to enable the distribution of pharmaceutical products.
Looking into the sea freight business line of El Mosca, we have integrated certain routes of tobacco, both internationally and to the Balearic and Canary Islands, reducing the transportation of containers, which may not be full. We will continue to work on more route integration, and we will equip further trucks with security systems.
At Logista, we continue to have a strong commitment towards ESG, which has been recognized by some of the most relevant ESG ratings and inclusion in several ESG indexes. I would like to highlight a new rating and a new index inclusion, we have achieved in this six months. During the period, we obtained a silver medal from Ecovadis, and we have been included within the 9% of the best value companies in our industry and taking into account the environmental aspects. It plays Logista within the top 1% of its industry.
During this first half, we have also been included within the Bloomberg Gender Equality Index for the first time, which tracks the performance of public companies committed to disclosing their efforts to support gender equality through policy development, representation and transparency.
Furthermore, Sustainalytics improve Logista's risk rating versus 2022, assigning to us a risk rating of 13.7 points, which shows a low risk of experiencing material financial impacts due to ESG factors. That rating places us at number 11 of 365 companies in the transportation industry.
This rating can be added to our recently renewed AA in the MSCI ESG ratings to our inclusion for the third consecutive year, the CDP supplier engagement leader board and a CDP rating of A minus. In addition, this year, we have yet again recognized by the Financial Times as a leader in diversity. We are also a member of the IBEX Gender Equality and the FTSE4Good Index.
Moving on to the next slide. Let me dig deeper into each of the areas where we are present. Starting with Iberia, our largest market. We have obtained standing results in all major segments, reaching a total of over €2.1 billion in revenues, followed by €548 million of economic sales, which represents a year-on-year increase of 62%. Adjusted EBIT recorded €104 million after an increase of 35%.
Looking at the specific segment in the tobacco and related products, tobacco volumes during the period remained stable with a strong increase in the distribution of NGP products. This segment recorded 19% year-on-year growth in economic sales reported by an estimated profit on inventory of €22.5 million as a result of the price increase by tobacco manufacturers, the increase in distribution tariffs and a double-digit growth in economic sales in the convenience products distribution.
Even though the retail segment in Iberia has performed well in economic sales with double-digit growth, there has been a certain one-off costs associated with the change to a new warehouse in Madrid, which has reflected negatively at EBIT level for this segment.
In the Transportation segment, the good performance of the underlying business and the addition of the new acquisition have translated into the segment duplicated in last year's economic sales up to €336 million. Within the different transport business lines, all of them have recorded healthy growth rates, thanks to the increase in tariffs, new services sold to existing clients and the healthy performance of the underlying business.
In Pharma, despite the strong reduction of COVID-related sales, we have managed to grow our economic sales by 4% versus 2022, increasing services provided to existing clients and seeking new clients within both the pharmacy and the hospital world.
Our publication segment was the only segment which recorded a slight decrease year-on-year in economic sales, but it is worth highlighting the new agreement signed with RBA, leader in collectibles and magazines in Spain to become the sole distributor in Spain. This contract will come into effect during the third quarter of this year. Total adjusted EBIT in Iberia, which reached €104 million, recording a 35% year-on-year increase.
Moving on to Italy. Total revenues reached €2 billion and economic sales €177 million, which represents a 15% increase versus last year's figure. During the first quarter of 2023 fiscal year, the government increased taxes on tobacco, which led some manufacturers increasing prices during the second quarter. This price increase has not offset fully the negative change of inventory recorded during the first quarter, but it has compensated most of it, closing the period with a negative inventory impact of €2.6 million.
In terms of Tobacco volume distributed year-on-year variations recorded an increase of close to 2% backed with -- by a strong performance of NGP distribution, particularly in hits which has offset a decrease in traditional tobacco volume of 1%. Looking to the Convenience Distribution segment, we continue to have a strong year-on-year double-digit growth, thanks to the adding new products into the distribution catalog such as beverages and selling NGP products, particularly e-cigarettes, which doubled its distribution versus 2022. Adjusted EBIT in Italy reached €50 million after a 6.5% increase against the first semester of 2022.
In France, revenues recorded a slight decrease of 1.6% up to €1.8 million. But year-on-year growth was achieved at economic sales level, registering €111 million and a 5% increase. Like in Italy, in France, there was also an increase in taxes by the government which was followed by the increase in selling price of tobacco manufacturers. In some cases, offsetting exclusively the tax increase of $0.50 a package and in order -- in other cases, increasing up to a maximum of €1 per pack. These changes in taxes and tobacco prices had an estimated positive impact of €3.9 million in the value of our inventories.
Looking into tobacco volume distributed, France continued to show a faster pace in the decrease in volumes distributed with 4.6% less tobacco distributed compared to the same period of 2022. Nevertheless, I would like to highlight the double-digit growth of electronic cigarettes in the country, although total volumes of these are still small to offset the decrease of traditional tobacco.
In the sale of convenience products, segments have recorded a single-digit growth, supported by the strong increase in e-cigarettes we have just mentioned. Total adjusted EBIT for the period in France amounted to €29 million, which represents a 15% year-on-year growth versus 2022.
And as given you details on -- of each regions, let's move into the consolidated figures for the first half. The consolidated adjusted EBIT increased by 23% to €183 million, supported by a positive performance of the activities both underlying and from the new acquisitions, the net positive impact of the inventories valuation and a contained cost increase, despite the general inflationary pressures.
The positive impact of inventory is mentioned already includes the majority of the expected impact for the full year 2023. Dig bit into the differences year-on-year, Economic sales grew versus last year by €236 million, backed primarily by the income from the new acquisitions, the changes in inventory value and the good performance of the underlying businesses in the different regions.
The increase in logistic costs reflects the incorporation of the new businesses into the group's accounts, changing the consolidated scope and resulting in a decrease in margins by 300 basis points, given the fact that the transportation business has lower margins compared to the tobacco industry.
Despite the reduction in margins, Logista advances with its strategy of lowering the weight of tobacco into our accounts, through our new acquisition, but keeping the existing tobacco business, which has been the core of Logista and offers unique returns.
Reported consolidated EBIT reached €146 million, which represents a year-on-year growth of 14%. The main impact of this metric comes from the provision of the cost associated with the closure of our warehouse in the South of France.
The closure of the asset is part of the strategy to optimize the French operations and structure it according to its real needs given the fact that the tobacco industry is declining at a faster pace in France compared to the rest of the markets.
Bottom-line, net profit of the company grew at 43%, thanks to several factors, such as the increase in reported EBIT of €18 million or the elimination of the one-off effects related to the super group discontinued operations, which was effectively sold in fiscal year 2022.
Apart from the two effects I've just mentioned, the largest impact on the net profit increase comes from the financial results, which have increased by €18 million year-on-year, thanks to the strong increase in interest rates.
The European Central Banks continue with its strategy of raising interest rates to alleviate the current inflationary environment, having announced the latest rate hike up to 3.75% yesterday, although, this increase does not affect the financial income for this first half of the year.
The European Central Bank's average rate for the period was 2.3% to which we had a spread of 75 basis points as per the terms of the credit line with Imperial Brands. The average credit line balance during the first half was €1.8 billion.
On top of that, the increase in profit, before-tax translated into a €7 million higher tax expense, despite the reduction of the corporate tax rate from 26.8% to 25.6%. The positive business performance during the period and the consolidation of the acquisitions in the result led to a 27% increase in EBITDA compared to the same period of the previous year. Besides financial income increased by €28 million compared to the previous year, given the high interest rates.
On the other hand, restructuring costs paid during the period amounted to €5 million and normalized taxes reached €50 million. CapEx for the period amounted to €28 million and it includes investments made in new installations in warehouses in Italy and in the main pharma warehouse in Spain. These investments will allow for higher capacity while optimizing the productivity of the warehouses.
To give you some color on these investments. In the Pharma warehouse, we are installing 60 automated robots in 22 floors, which allow us to prepare 43,000 boxes daily fully automatically. Leases recorded for the period of €28 million were higher than the €17 million recorded last year, mainly due to the new acquisitions included within the scope.
And to finalize, let's move on to the closing remarks and our expected outlook for 2023. As we outlined throughout the presentation, we have been focused during these six months in integrating the acquisitions we announced last year. We have also started to implement synergies between the different transportation segments and expanding activities through cross-selling activities now that we have added several new services to our catalog.
We continue to look for mid- to small-sized acquisitions in order to grow the company and continue diversifying from the traditional tobacco industry. The results for the period shows not only the integration of these acquisitions, but the strong underlying business performance with respect to continued registering sustainable growth rates.
We have also benefited from higher interest rates which has translated into a significant growth in our financial income through the credit line we have with our major shareholder Imperial Brands. And lastly, our results have been positively affected by the change in inventory value as a result of changes in taxes and tobacco prices in all three regions. In terms of ESG, we continue to be fully committed and it reflects not only the reaffirmation of several ratings and the inclusion of value indices but as well as by adding new ratings for Logista such as EcoVadis.
Now finally, we would like to conclude by reviewing our full year 2023 guidance. This guidance upgrade possible -- is possible, thanks to the solid performance of the underlying business during the first half, the strong contribution of the new acquisition and the profit on inventory booked to date. We remind that it already includes the majority of the total figure expected for 2023. All these circumstances allow us to increase our guidance for the fiscal year 2023 where we now expect adjusted EBIT growth of around 14% compared to 2022 figure.
Now, we will proceed with the Q&A session. Thanks very much for attending this presentation. Isabel?
Thank you, Pedro, very much for the presentation. Now we will continue with the Q&A reading and answering the questions that you have written through our platform. First question is from Pallav Mittal of Barclays. I have a couple of questions. The credit line agreement with Imperial is until June 2024. How is the negotiation with Imperial brands under the renewal proceeding? And the second one is how should we think about growth going into full year 2024, excluding M&A.
Thank you, Pallav. With respect to the first question, just a reminder, we have this loan contract with Imperial, as you mentioned, until with the conditions remain until June 2024. This is a loan for up to 2.6 billion with remuneration of the reference rate of the ECB plus 75 basis points. If it goes through 2024, as I mentioned at this stage, any potential change in terms will be negotiated by June 2023, and we are already in conversation with Imperial for this renewal, although the terms have not yet been agreed. We expect to renew on similar terms to those included as of today, but we are still under conversation with Imperial.
And with respect to the second question, we do not provide guidance for 2024. I guess one of the things that should be in mind for when you look at further this fiscal year, it's several things related to the one-off impact of the profit on inventory of 2023. So we have no clue about which could be, if any, the numbers or impacts for 2024.
And then the underlying business should be hopefully in line what we have seen today, but getting more synergies from our acquisitions embedded in our businesses, particularly in freight and parcel. On top of that, looking for that growth that you mentioned, also the – its going to be a key part, the way interest rates are going to evolve. We knew from yesterday that there has been another increase of 25 basis points.
In our case, with this reference rate that goes up to 3.75% at the base rate plus the 75 basis points, but we obviously don't know whether it's going to be more increases during this fiscal year and definitely not on 2024. But this will have also an impact on the growth and particularly on the net profit. Thank you.
Continuing with the next question, which is from Francisco Ruiz of BNP Paribas [ph]. I have three questions on my side. First, could you quantify the payback of the €10 million restructuring made in France? Second question is, in order to understand the underlying growth of the business, it would be quite useful to have a view on how much the new businesses have added to the growth seen in the quarter. With the profit on inventory and the changes in M&A, the underlying growth trend is a bit blur. Third question is we have seen already some coordination between the new businesses like the GDP certifications in Moscow. Would you be able to, at some point, to quantify the level of synergies that could be achieved from the acquired business -- on the other way around, the current margins ex profit on inventory has upside.
Okay. Thank you, Francisco. As you're right, there has been the reorganization costs for France for this first half of the year. As we are in process of closing the warehouse of Columbia, they will have a -- will be effectively by fiscal year-end. We have already reached an agreement with the unions and has been sent to the relevant government department for validation of that.
And as you can -- you may imagine is we are -- this is a very sensitive circumstance that we prefer to provide this type of information by the year-end, where we are going to have more info. We are -- more than 50 people -- is involved. We are trying to also find relocation for most of the workers. And also, you need to bear in mind for the sake of this number, you're asking that the warehouse is owned by Logista. So that should be included in the -- this payback number. But as I said, please bear with us, we will keep you updated on this matter on full year results.
With respect to your second question, well, I don't know the growth trend is blurred. As you mentioned, we are -- something that is probably be repeated from now onwards, we have been working, as we mentioned during the presentation in the integration of the companies are pretty much embedded in our underlying business as of today.
So -- but just to give you a sense on how you would think on this underlying growth, particularly on what we used to call organic growth. This -- as we mentioned in the last full year results, we should be keeping the same pace despite the fact that the volumes in terms of particularly traditional tobacco should be seen as a decline in business over time. That is something that we have mentioned several times.
We think that we have -- with the other business and the diversification, the way to maintain the kind of the same levels of growth that we were offering probably in the area of 4% for that, so to say, traditional and organic business that we've got.
With respect to your third question, it's true that this coordination that you mentioned in with El Mosca is one of the things, as we explained during the presentation that we are doing with El Mosca and Carbó and also with the Speedlink
There's upside in margins, hopefully, yes, because what we are saying is from the beginning, despite that we are not giving a certain amount of synergies that we are expecting. What we've said is that we are expecting to capture 100% of the synergies by the end of the third anniversary after the acquisition. So we are just five to six month and El Mosca in November 1. So still too soon, and we should be able to increase the level of capturing more and more synergies over time, and that should have an impact on margins.
And there's other things related to how we can explore our additional services in our current businesses, for example, including pharma, including the transfer, particularly after the pandemic situation where e-commerce and B2C grow a lot in Nacex business, but now we are moving towards a more profitable business, which is more focused on B2B. And also, obviously, as you have seen in these results, the continuous cost control that we are imposing all of our business in all of our regions. All-in-all, we hope to keep on maintaining and improve the margins over time.
Thank you, Pedro. Moving to the next question from Javier González, JB Capital. First question is, can you give us the impact of M&A in the period of economic sales of EBIT.
Second question, you registered €11 million restructuring costs in second quarter, 2023 million, mainly in France. What should we expect for the coming quarters?
Third question is on dividends due to the rise of ECB rates, are you having some extra financial revenues? So would you expect to keep payout unchanged, or would you think of other instruments such as share buyback as a complement?
And then there's a fourth question relating to the credit line with Imperial, which we have already answered.
Okay. Thank you, Miguel. Well, as I mentioned in my last answer, we will try to keep on talking about this new M&A companies as part of the embedded business. In the case, let me give you some that are more related to the eco sales. Again, EBIT is quite difficult since we are already integrating the companies and getting some synergies is much more difficult and we prefer not to share not very accurate number. But in terms of eco sales coming from these new acquisitions of 2022 and 2023, it's roughly above €160 million in eco sales. Out of that number, €125 million comes from El Mosca. Remember that we are consolidating in these results five months and €31 million from Carbó, the rest of the number comes from Speedlink.
On your second question with respect to the restructuring costs and whether we should expect for the coming quarters, does not relevant additional restructuring for H2, and we have been working minimums on this closure as a big pick restructuring. We are continuing doing some cost control in, as I said, in any of our businesses and all regions. And I'm maintaining that level of costs in the places that we come, but nothing really relevant respect for H2.
On your third question and with respect to the payout and the rising of linked to the rising of ECB rates, we maintain our dividend policy to distribute unless 90% of the net profit. Now it's true that what you're saying that this increase on interest rates goes directly after taxes to increase the net profit of the company and as for the dividend payment.
Again, we maintain the policy and what we should understand is to the extent that we maintain the -- it's maintained the levels of interest rates we will be able through the loan with Imperial to maintain this positive impact in our net profit as with respect to the profit on inventory, which has an impact also at the end of the -- at the bottom line of the P&L with the additional increase on net profit that has an impact on dividend. But potentially, we are not going to have for coming years or at least we don't know. But the ideas of today is maintaining this dividend policy at the same time that we are maintaining our M&A growth strategy with more inorganic growth rather than to our share buyback. Thank you.
Next question comes from Jacob Declaire [ph]. It seems like NGP volumes contributed strongly across the regions, offsetting the cigarette declines. Why was France distribution cigarette volumes so weak versus Italy, Portugal and Spain? Is this something you would expect to continue for the rest of 2023?
Yes. Thank you, Jacob. The -- it's quite different to see the different dynamics on NGPs. I would say, Italy versus the rest. Italy in NGPs, particularly when we are talking about IQOS and heat-not-burn the rest of the brand heat-not-burn products, is specific a good one.
Italy, I believe, is the second or third largest market in the world for H&B products and the contribution for the total tobacco volumes in Italy is quite significant. We are probably above 15% of the total volumes in tobacco in Italy coming from this H&B. In the case of France and Spain, it is still not significant. We have seen during this first half of the year, quite a good growth and impressive growth in some of the cases with these products, but still are not significant from a P&L perspective.
Thank you. Next question comes from Pablo Cuadrado of Kepler Cheuvreux. A few questions on my side. First question, the growth in Iberian convenience has been very strong during H1. You have talked about new selling channels. Could you please provide a bit more color on what is driving the growth?
Second question relates to the contribution of the M&A, which I believe we have already answered.
Third question is the bulk of the transportation assets have printed double-digit growth during H1. What is driving this performance despite some deterioration in the European economic outlook?
And the third and the last question is, you have reflected in the presentation that after the integration of M&A, you are now working on synergy development. Is there any positive impact already included in H1 2023? When do you expect to be able to set up synergies to enhance further the performance?
Okay. Thank you, Pablo. There are several reasons and a lot of commercial efforts behind the convenience growth in Iberia are many different pieces, including more sales to the restaurant channels, maintaining our good numbers with gas stations like Repsol or Kuwait. Also in the tobacco needs with more beverage as we mentioned before, NGP products and e-cigarettes, and that's probably one of the things that it's driven this growth, the sum of many different things.
With respect to your second question of the transportation, despite the transportation growth, double-digit growth, despite some of the deterioration in the European economic outlook, I agree with that, meaning that despite the current situation, despite inflation pressures and interest rate hike probably impacting the purchase capacity of many people and companies. We are maintaining this growth.
Also, you need to take into consideration that definitely the new acquisitions are also part of this double-digit growth, but it's true that we are having quite a good first half of the year in terms of transportation. We perceive perhaps that we are getting in some of the cases, additional market share, not really relevant, but probably that explains probably why we are having this such a good growth in H1.
And with respect to your last question on synergies, the answer is yes. Some of the synergies that has been already captured in the first month are embedded in this H1 2023 results. Just as I mentioned before, we are starting with this integration process. We are starting to get in synergies and applying some of them.
We -- during the presentation, we have mentioned some of them, for example, just to put an example, while we are doing with the appropriate security equipment that El Mosca trucks and trailers need to transfer high-value products such as tobacco and in order to optimize routes we set when we were explaining the rationale one of the things behind the acquisition of El Mosca was that optimizing those routes coming from the South of Spain to the north with fruits and vegetables and coming down from North of Europe with tobacco.
So maintaining a full load truck with high value-added most of the time and that is one of the examples that we are getting, we have equipped a few numbers of trucks and trailers, but we keep on going. Just an example that we are just only five to six months far from the first – the day number one. So to the extent that we mentioned that we are expecting to grab 100% of the synergies in three years. There's more to come and has been a good starting point.
Next question comes from Francisco Ruiz, BNP. You have commented on tariffs increase in tobacco. Could you give us an idea on how much they have grown?
Thank you, Francisco. Sorry, but we do not share this data about tariff increases, there are many different clients involved. And what we -- I think that we are demonstrating this how that tariffs really have this pass-through of different costs related to inflation, gas prices in some of the cases, salary or as much as possible, that pass-through has been done, but we do not publish our tariffs. Thank you.
Thank you. The next question comes from Marc Matt [ph]. Will transportation business be expanded to other countries in Europe? The needed CapEx will imply a decrease in the payout, is expected that Logista report separately tobacco and transportation business in the future periods if the segment keeps growing in relevance? And what percentage of the net profit is due to the Transportation segment?
Okay. Marc. Thank you. Will transportation business be expanded to other countries? Well, as part of our M&A strategy, there's, many different businesses in the small, mid-size area where we are focused as a complement of our current businesses.
And that includes also transportation, and that includes also other countries, particularly the ones that we have already presence. So, I guess, the answer is yes. There could be options that we are looking that also imply transportation businesses in other countries, in Europe rather than Spain.
The needed CapEx as of today and, with the numbers that we have and the type of transactions and the size of the transactions that we have now on the table, that doesn't imply any decrease in the payout as of today.
With respect to the speed of transportation business, where we'll see how will, this evolve in the future and to decide whether it makes sense, because of the way that at some point in time, the transportation business will imply a change in the way of reporting, but not as of today. Thank you.
Next question here, it's making supply chain more resilient, more digital in Spain and across South Europe have benefited from grant, for example, next-gen from EU. Going forward, what benefits, do you expect to accrue to your margins?
Okay. Thank you, Melista [ph]. Well, it's true that the grants and some subsidies have helped our sector. We are not aware as of today or I am not aware to going forward, additional benefits. The underlying performance of the business is the one really leading the results of the company.
Obviously, having some help as we have had with gas prices and this stuff is also really helping, particularly the maintaining the level of margins. But we don't know going forward whether we are going to have additional helps on this. The situation probably requires so, but we will see in the coming future. Thank you.
Next question from JB Capital, is there any impact in the OpEx level from the new installations in Madrid and Italy?
Well, there's, no new -- not new installations in Italy and Spain. We mentioned some of the upgrades that we have done in pharma warehouse and others in Italy, but in this H1, 2023, there are not new ones.
Thank you very much. That was it. There were a couple of questions which have been already answered throughout the presentation. So with this, we will conclude our presentation. Thank you very much, everybody, for joining our first half results.