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 morning. I'm Gloria Martin, Logista's Director of Investor Relations. Welcome to this audio webcast to discuss the results of the 2020 fiscal year, about which you will find more details on our website. I'm joined today by Íñigo Meirás, Logista's CEO; and by Manuel Suárez, our CFO, who will lead this audio webcast together. [Operator Instructions] The document that accompanies this presentation and the observations, which will be made as it progresses, include forward-looking statements and projections concerning future results. I invite you to wait at the beginning of the document the disclaimer, which mentions the various factors that could cause the actual results to differ from the projections or forward-looking statements. I now handing over to Íñigo Meirás. Íñigo?
Thank you, Gloria, and welcome, everyone. During this audio webcast, we are going to deal with the highlights of the results, a review of the businesses and a financial review. And we shall end with an outlook for the forthcoming year. The results of the 2020 fiscal year, my first as a company's CEO, were solid in spite of the challenging environment in which the activities took place, which was so much affected by the COVID-19 coronavirus. Economic sales increased by 0.7% and EBIT by 1%, whereas the adjusted EBIT decreased by 1.9% and net profit by 4.5%. Since the pandemic began, our management has focused on halving the impacts caused by the adverse environment that we face due to COVID-19 basically in 4 directions: ensuring the distribution to our customers, responding to the new needs that have arisen in this scenario with new services, protecting our people and managing our cost. This pandemic has brought about a substantial change in the way of life to which we were accustomed and has profoundly affected the way in which economic activity is conducted worldwide, including, of course, in the countries where we were operating. In this scenario, the principal channels and product sectors in which Logista provides his services were considered as essential. So we have to assure distribution at all times in spite of the difficult situation. Although the adverse circumstances which surrounded the company's operation for most of the fiscal year certainly constitutes a challenge, they also represented an opportunity, which we were able to take advantage of, thanks to the strength of our unique business model. Our lengthy efforts to achieve flexibility and automation in our operations and in the development of a multichannel offer of alternative ordering options have enabled us to ensure continuity in our activity to all out -- all of those months. Our commitment as a distributor specialized in the neighborhood channels was also a crucial factor in the furtherance of our business. The points of sales, which we serve, experienced an increase in consumer demand for other products different from their usual products. And Logista was one of the few companies that was able to warranty to distribute them quickly and simply. Moreover, our traditional investments in quality helped to reinforce our status as the leading partner in certain sectors. For example, what is a reliable distribution services required for our e-commerce sales, an area in which now growing significantly. In addition, the business intelligence services, which we have been offering to all our manufacturing customers, having the appropriate response to the need for information about their products. As we can see, the changes brought about the pandemic have generated new needs among our customers. And at Logista, we have been helping them to satisfy those need like developing new services or by adopting some of those that we were already providing. For example, for the tobacco sector, we have increased the safety stocks in local warehouses so that the supply of these products, which are regarded as essential, will be assured in the event of [ a return of ] confinement within each country. In the case of high-volume consumer goods, we have offered the points of sales and extensive catalog of reference so that they can be able to the end users during containments at home. The pharmaceutical sector and the hospital channel have also seen drastic alterations in certain critical aspects of their activities. So Logista Pharma, together with the hospital pharmaceutical services, devises in record time a solution involving a deliveries direct to the patient homes. This service allowed the sector to continue with the clinical trials that were in progress, which involves substantial investments. It also allowed patients suffering from chronical disease to continue with their treatments without being obliged to expose themselves to the potential sources of infection.The big increase in sales of e-commerce resulted in the manufacturers needed to rely on an operator that will guarantee a flexible, controlled and high-quality delivery service. Nacex adapted his procedures to ensure that deliveries remain contactless and also bolstered the expansion of his network of dropping points and lockers. This kind of remote selling also aided the recovery of the book sector, which Logista also supported by means of the home delivery of purchase from our innovative printing-on-demand service. But without that -- doubt, preventing the expansion of the disease and assuring the safety and security of everyone around us at all times, this had been among the priorities in our management this year. We have used all the means at our disposal to maintain in our activity safety for our employees, numbering almost 6,000 and for our 9,000 partners and in general, for the communities in which we are a part. Again, the big investments in IT, resources and technology, which Logista undertakes every year, have facilitated the implementation of a smart working policy since the moment when the authorities first recommending teleworking. These smart working policies still in operation in the group today. Depending on their type of work, it can allow the employees flexibility in their timetables.This new reality, which are facing all, has also affected by the company's cost structure. Digitalization. We started from a solid base has, without doubt, facilitating many of the adaptations to have been necessary investments to assure the correct performance of the administrative tax, although in some cases, it has involved a [ certain ] increase in cost. Restriction of movements of the retail confinements have necessitated reassignment of the stock to warehouses, which do not normally undertake warehousing tax. So some transport routes had to be redesigned involving, in some cases, higher transport costs. Additional costs have also appeared due to the new health and safety procedures. Moreover, some activities has been seriously damaged, and their profitability has suffered. For all these reasons, big efforts have been needed to manage cost and to seek increased efficiencies in those processes in which action was possible, something to which we are adjusting because, as you know, is part of Logista's DNA.I would like to conclude this review of the main trends with leap day mark on the 2020 fiscal year by affirming that Logista was stable during yet another year to maintain a performance that was in line with his objectives of creating value that is sustainable in the long term. We acted through the 4 building blocks, which support the achievement of that objective: providing high-quality, added-value services, both which already existed and other newly developed ones, which, in turn, enable us to expand the business base even in these complicated times. And we achieved this at the same time as we introduced improvements in efficiency and maintaining our strong cash flow.Let's now review the progress of the business, both overall and by geographical area. The results of the fiscal year were solid. The adjusted EBITDA reached EUR 257 million compared with the EUR 262 million in the 2019 fiscal year. The adjusted EBIT figures is increasingly slightly without considering the changes in the valuation of inventories compared with last year, which amounts to EUR 7 million, even considering the estimated impact on the EBIT resulting from COVID. If we do not take into account of those adverse impacts, which accounted for EUR 14 million in the fiscal year, the adjusted EBIT from the normal operations increased by 6% compared with that of the previous year. That increase was in line with the middle single-digit increase in adjusted EBIT that was forecast in the outlook for the 2020 fiscal year that we communicated to you at the close of 2019. Performance in Iberia was positive. The recorded increase in economic sales was almost 1%, which brought the total to EUR 558 million (sic) [ EUR 585 million ]. By activity, the economic sales in Tobacco and related products increased by 2.9%. The economic sales from the distribution of tobacco were slightly higher than those of last year despite the reduction of 3.8% in the volumes of tobacco distributed in Spain, which was due to the smaller number of arriving tourists and the smaller number of cross-border sales because of COVID. The economic sales in Transport increased by 0.6%, and there was disparity in performance depending on the business. In Long Distance Transport, they remain almost stable. In Parcels, they decreased, while in Courier Services, they were increasing, and we're benefiting from the big increase recorded by the sales through e-commerce. The economic sales from Other Businesses were similar to those of last year, increasing pharmaceutical distribution being recorded because of the new customer and services, which compensates for the falling sales of pharmacies and the disruption to the normal activities in the hospitals. The economic sales from the distribution in periodicals decreased, sales in new stands having been seriously affected since the beginning of the pandemic.Total operating expenses in Spain and Portugal increased by almost 1%, making the adjusted EBIT EUR 120 million, which is one -- which is -- was 0.4% less than the figure in 2019 fiscal year. We estimate that the overall impact of COVID on Iberia results was negative by EUR 11 million.Performance in France was negative. Economic sales were EUR 264 million, a decrease of 5%. By activity, the economic sales of Tobacco and related products decreased by 1.3%. Economic sales from the distribution of convenient products plus electronic transactions were slightly positive. The performance in electronic products being very positive, which compensate for the weaker sales of convenient products, which were affected by, among other factors, the closure of the HORECA activities in the café tabac. The economic sales from the distribution of tobacco were slightly less than those of last year. Therefore, on distributed volumes of tobacco being 3.1% due to the big increase in the sale prices of these products. In accordance with the calendar for the increase in the excise duty fixed by the French government, so that the price of a pack of 20 cigarettes will reach EUR 10 by 2020, in this fiscal year, the tobacco manufacturer increased their price by between EUR 1 to EUR 1.2. After those increases, the price of the pack of the leader selling brand of cigarettes in France is already EUR 10. These changes in taxes and prices translating to a change in the valuation of tobacco inventories, the impact of which on the results of the fiscal year was at approximately EUR 3 million. In the previous fiscal year, that impact was about EUR 2.5 million. The economic sales from Other Businesses decreased by 21.5% compared with the previous year. That performance was due to the weakness, which the activity was already shown and to the fact that it suffered the biggest impact from the pandemic. Most of the establishment to which we distribute products in this segment were not regarded as essential and remained close during the period of confinement. Total operating expenses in France decreased by 0.6%, resulting in adjusted EBIT of EUR 62 million, almost 70% (sic) [ 17% ] less than the figure obtained in the 2019 fiscal year. The impact of the difference in the valuation of the inventories between the 2 years was reflected in the margin for these segments. We estimate that the adverse impact of COVID-19 on results in France could be valued at approximately EUR 3 million. Of the 3 geographical segments, Italy recorded the most solid performance with an increase of 6.3% in economic sales, which reached EUR 304 million. The economic sales from tobacco distribution were higher than those of the 2019 fiscal year because of the higher value-added services to manufacturers and because the volumes of the distributed tobacco were maintained at level similar to those of last year, thanks to the solid increase on heated tobacco. The changes in the valuation of inventories of these products, which were the result of changes in the taxes and prices, had a positive impact of about EUR 1 million, similar to the EUR 2 million of last year. The economic sales from the distribution of convenience products increased by a double-digit percentage due to the good performance of cigar's rolling papers, which from the beginning of 2020 had to be sold through the tobacconist shops in Italy after the addition of the excise duty. The trend since the beginning of the pandemic towards a greater use of neighborhood shops resulted in increase in sales through tobacconist shops of other fast-moving consumer goods and related to tobacco. Total operating expenses in Italy increased by 4.1%, and the adjusted EBIT reached EUR 91 million, which was almost 12% more than in 2019 fiscal year. We estimate finally that the COVID-19 did not have a big impact on the results in Italy, thanks to the measures adopted to counteract the increase in expenses, which were related to the pandemic. And now I give the floor to Manolo Suárez, so he could continue the financial review of the fiscal year. Manolo?
Thanks. Good afternoon, and thank you to all attendees to this presentation of Logista 2020 results. The financial statements we are presenting here closed at September 13 (sic) [ September 30 ] are already audited and backed with a clean opinion by Ernst & Young, external auditor of Logista. As Íñigo has explained segment by segment, the activity of the company has grown in revenues and a slower path in economic sales, even in this economic environment marked by the pandemic and in our case, by the French movements in [ travel ] prices. The evolution by region has been uneven in terms of economic sales being Italy the best performer, that, together with the growth in Iberia, compensated the negative performance in France. During the year, tobacco tariffs in all countries were upgraded in order to include the track and trace services that were rendered to our clients from the moment this traceability became compulsory for the manufacturers under the European Tobacco Directive on May 2019. This year has been absolutely marked by the management of the situation created in all our markets by the COVID-19 crisis. Although practically, all the networks we worked through having kept open during the pandemic, there is no doubt that there has been an impact in the activity of the company due to this reason that we estimate in EUR 30 million in economic sales, mainly focused in Spain and secondarily, in France. These and incremental expenses, consequence of the management of the crisis, have been dealt with through a program of savings efficiencies that has kept the evolution of costs very much in line with the evolution of economic sales, net of price movements. The net effect of all these post a slight decrease of the adjusted EBIT in EUR 5 million, absorbing the negative impact of the different evolution in taxes and retail sales prices and the one of the COVID that we estimate in EUR 40 million (sic) [ EUR 14 million ] at EBIT level. Net of these 2 effects, the growth would have been in the highest part of the bracket of the guidance provided at the beginning of the fiscal year, mid-single-digit. The effort in offsetting COVID negative impact has led the company to increase its customary optimization effort, and the restructuring figure was finally of EUR 12 million, fully financed by some capital gains. All this translated into an EBIT figure 1% above last fiscal year. 2020 has been the first year of adoption of IFRS 16. Apart from the effect that this application had on the EBITDA figure that we will comment when reviewing the cash flow statement, the IFRS 16 impacted the financial expenses in EUR 2 million. The rise of these expenses contributed to a net reduction of financial results of EUR 1 million. This, together with the expected increase in the tax rate, consequence of the extension of some deductions and reaching a 27.9% corporate income tax net rate, resulted on the net profit declining by 4.5% compared to last year. The cash position followed a very normal trend during the first part of the year being affected at the beginning of the lockdown period and by lower volumes and -- since summer, by other -- the other way around, helped on one side by the stabilization of consumers' and retailers' patterns and on the other, by some temporary modifications of the payment rules of excise taxes that altogether provided extra cash. That made the average for the year to grow to EUR 2.3 billion and to a maximum of EUR 4.8 billion. That compares with an average amount of EUR 1.9 million (sic) [ EUR 1.9 billion ] and a maximum of EUR 3.1 billion on fiscal year '19. The temporary increase in the cash position caused as well as temporary uplift of the limit originally set in the treasury agreement that Logista has with its majority shareholder to accommodate the cash-pooling operations during this period to that situation. The total amount invested in the period returned to normal figures for our recurrent business once the country's operational and the related investments have been deployed. As we always comment, half the investment figure is devoted to IT to develop value-added services for our customers and doing efficiencies in our operations. This year, the percentage has been higher, 55%. It's worth to note that not only our operations, but the investment programs were maintained despite the lockdown. The company has kept, even improved the profile of high cash flow conversion, which is one of our financial characteristics.Looking at the cash flow statement, you can see that the EBITDA figure is higher than in 2019 due to the effect of the adoption of IFRS 16 in 2020. The main impact in the P&L for this adoption were the increase of the EBITDA figure in EUR 34 million, of the EBIT in EUR 1 million and of the financial expenses in EUR 2 million. But if you prefer to do analysis on a pro forma basis, for 2019, the figures would be very similar, increase of EUR 33 million in EBITDA, EUR 1 million in EBIT and EUR 3 more million in financial expenses. So the evolution of the EBITDA net of rental payments has been slightly lower, in line with the adjusted EBIT evolution, while the lower CapEx and financial revenues have more than offset the higher restructuring payments and normalized taxes.Working capital variation improvement of EUR 600 million is linked to the delay of conditions of payment of excise taxes granted by some administrations that are expected to revert shortly. While the cut-off effect on taxes is the consequence of not having received this year until the month of October the return due on fiscal year '19 corporate income tax, while in fiscal year '19, instead we received 2 returns, one in October [ '18 ] and another in August [ '19 ]. Since Logista IPO in 2014, the dividend policy stated by the Board has been to maintain a payout of at least 90%. And together with it, it was stated that the Board highly appreciated the sensitivity of our shareholders towards dividend and would be very attentive to make sure that this remuneration would not suffer punctually for unexpected events of nonrecurring nature. Keeping all this, the Board proposes to dedicate all net income for 2020 to dividend, keeping the same dividend than in fiscal year '19, EUR 1.18 per share. The policy mentioned has been applied in a consistent and growing manner since 2014, having shown in the last 3 years payout ratios of 95% and 99%, being the dividend collection by our shareholders close to 50% of the value of the company at the IPO. All analyst recommendations on the value are either strong buy, buy or outperform. There are no hold or no sell recommendations. The target price is kept as consensus in EUR 23. The dividend yield at present prices is over 8%, but the fact is the correlation with the rest of the Spanish companies seems to be stronger than the fundamentals when fixing the price. All this is consistent with the main financial characteristics of Logista. Resilience. The company has been able to show a growing result in very tough economic conditions, thanks to its business model. Predictability. Logista consistently delivers the announced results. The company tends to be underpromising and overperforming in its financial communication, and robust cash flow profile to fund our dividend policy and to finance growth without jeopardizing it.I'll let you now back with Íñigo Meirás to conclude the presentation.
Thank you, Manolo. Well, during the presentation, we have reviewed the measures taken to confront the new reality, which has risen due to the pandemic and as well as the performance of the company's businesses and the changes in his financial situation. We'd now like to mention the progress that we have made in the fiscal year in terms of ESG.Despite the adverse circumstance that have characterized this year, Logista has wanted to make sure matters as important as the environment, gender equality and social policies. Indeed, for the 4 consecutive year, we have been included on the CDP's A List. In the fight against climate change, we have continued to form part of the FTSE4Good index. And we have signed the manifesto for a sustainability reconstruction, and we have participated in local initiatives and associations whose aim is to support post-COVID recovery.We have also made good progress in the matters of women's presence, not only on the Board of Directors, where 42% of the current members are women, but also in the management committee. Logista also introduced a smart working policy during the fiscal year.To summarize, 2020 was a positive year for Logista in spite of his challenging environment. The solid set of results, which are presenting to you today, was possible, thanks to the company's successful business model, which is customer-centric, flexible and asset-light approach.Looking ahead to the 2021 fiscal year, it appears that the solid progress since the beginning of the COVID crisis could result in a single-digit percentage increase in the adjusted EBIT compared with the 2020 fiscal year. However, I would like to emphasize the uncertainties about the impact of the economies of our main markets and about the measures for which to confront it will have an adverse effect on our activities. For these reasons, this outlook will be reviewed quarterly through the fiscal year.Before ending, I should also like to say that in any scenario, the dividend will be a priority for the company. Let's now proceed to the Q&A session, and with Gloria will read out the questions that we have received, and we'll identify the person who has the message from. Gloria?
Thank you, Íñigo. [Operator Instructions] First question from Pedro Alves, CaixaBank. It's a generic question for Íñigo. How do you see Logista in the next 3 to 5 years in terms of portfolio segments and geographies? Considering the strong ESG pressure on tobacco industry and the depressed valuation of Logista, it seems clear that the change in perception is much needed. What are your plans to grow and position the company?
Well, Pedro, first of all, thank you for your question. I have to say that I agree with your perception. I think it's one of our biggest concern in the company. The current value of Logista in the market is depressed or another adjective that I can use, but definitely, as you can imagine, it's a big concern for the management of the company.And in terms of how I'll see Logista in the next 3 to 5 years, I think that, clearly, I'll see Logista in 3 to 5 years more diversified, less tobacco-related company. And I think that in that context, I think that we are now more active to consider the expansion of our current nontobacco businesses to new geographies because, as you know, we were mostly focused in Spain until now. And now we are considering to expand our nontobacco business to Italy, France and Portugal as a first step. And having said that, I think that there is a second way for this looking forward, which is why not to consider M&A opportunities in the logistics sector, okay? We are not saying that we will see us -- you will see us looking for a transformation opportunity. But that is clear that we have the ability to, for the time being, to be more active looking for M&A opportunities that can help us to be more diversified and well positioned in the current market where we are because our focus is still in Europe. But you'll see us more active on the M&A market for the time being, okay?
Okay. Second question from Pedro Alves. Once the macro visibility improves, do you think the dividend policy could be revised? Is share buyback is -- under equations?
Well, I think that as a -- as the Board of Directors, we have to review the dividend policy every year is one of our -- this is one of our main tasks at the Board. But for the time being, I think that share buyback is not an option in terms of -- to increase the remuneration to shareholders. And probably, the reason for that is because now, one of the difference of our stock is the -- is slow liquidity in the markets. And because of that, I think that buybacks -- share buybacks is not an option. I think that we do -- something needs to be a little bit more aggressive on dividend policy, but this is a matter to be discussed at the Board level at the right time.
Question for Manuel. Can you estimate what was the impact of the -- charge, sorry, of track and trace services during the Q4?
We do not disclose this kind of information. What I can tell you is that there is an impact is -- you know that we have had an uneven impact during the year. For track and trace, that was fully regularized in the fourth quarter. So the year is fully charging. The track and trace is a very high-value service and that has the margin it deserves. No more than that. In fact, I can take advantage and comment that the fourth quarter has been very favorable results because of this track and trace is true, but also because the volumes of travel were quite well especially in Italy and also because other businesses behaved quite well, especially Pharma and Courier and provide a very good estimating results in combination with last year.
Question from Francisco Ruiz, Exane. What is the reason behind the strong increase in cash taxes this year? Can we understand that the margins on Q4 are recurring, taking into consideration the absence of some cost and the impact of track and trace?
In terms of cash tax, I think it's been covered during the presentation. Basically, we do have -- we're waiting for the return of corporate income tax of year '19 final liquidation. That was finally received in the month of October this -- that is year '21 for the company. So that's basically the reason and even movement or in the period movement of payments and returns.And in terms of the margins, no. I mean, nothing can be thought as stable in these times. We have to closely follow everything for the coming weeks.
Question for Manuel. Miguel González from JB Capital Markets. Could you please provide how much of Transport revenues represent Courier Services? After the solid performance of this division, partially driven by the entry in e-commerce, do you expect this to be a temporary activity because of COVID-19? Or could you look for further opportunities in this segment?
We provide disclosure of all the transport activity. In general, we'll not disclose into the particular business lines within this activity. But you're absolutely right, Miguel, that the behavior has been very strong. It's very promising, and we think that there are opportunities that we are examining, which can be done in the future and getting on it to strengthen our business in e-commerce.
Questions from Juan Ros, InterMoney. Any new major Pharma contracts signed recently? Can you provide Pharma's growth for Q4 fiscal year '20? Can we expect the rollout of the Pharma business in other markets? Are you considering at present entering new markets in tobacco distribution? Will that be organic or inorganic growth?
Okay. Thank you for your question, Juan -- no, questions because the -- regarding the first question, if any new major Pharma contracts signed recently? Yes, we signed in the last quarter 2 or 3 big contracts. But put in context that, in any case, a big contract in the Pharma sector means probably on yearly basis and in terms of eco sales, EUR 2 million each, which means that it is important in terms of growth for Pharma businesses within Logista. But in terms of the eco sale at the consolidated level is not huge.Regarding the second question, can you provide Pharma growth for fourth quarter of 2020? Manolo, I don't know if we have that information available or not?
Yes, we did. I do so...
Okay, yes. Manolo is checking the number. Can we expect a rollout of the Pharma businesses in other markets? Yes. I think that now we are more open to consider the internationalization of our Pharma businesses and not to be only in Spain and in Portugal, okay? And clearly, you can imagine, the focus for the time being is to analyze the Italian and the French market.And the last question is, are you considering at present enter new markets in tobacco distribution? Will that be organic or inorganic growth? It's not a priority of the company at present to analyze new markets in the tobacco distribution sector. Back to Manolo. Do you have the information on Pharma?
Yes. We will not provide the growth in the other business of the -- of Pharma in particular. But again, I mean, the growth in year has been a very good one. During the year, we signed 25 new contracts with customers, and there are new customers in corporate that we'll release soon to do his activity.
Some questions from Pablo Cuadrado, Kepler. Restructuring charges. During Q4, you have deployed more restructuring activities than probably expected. Why is that? Is that response to COVID-19 crisis or something already planned before the crisis? Which are the expectations for restructuring costs during new fiscal year? Indeed, I think you have closed a real estate disposal in Spain, which is still not booked. Which is the level of book gains that we should expect for this year? I do partially the questions. Manuel, this is yours.
Okay. Its true that during Q4, we faced an important restructuring of an optimization plan within the company. That -- I mean, we see the opportunity, honestly, partly because of COVID and particularly constantly are analyzing the opportunities to improve our operations and efficiencies.In terms of the new fiscal year, we expect the cost to be lower because, I mean, the execution is going to be down in the year, but most of it is already accrued. We have to see how opportunities arise and how things evolve.And in terms of the disposal of the real estate in Spain, yes, it's being secured in the first part of the month of October and still some capital gain will arise in the year '21, but most of it has already been incurred in the year, in '20.
Okay. Second question from Pablo. Guidance. You have targeted mid single-digit adjusted EBIT growth during new fiscal year versus last year, assuming no new relevant lockdowns in the countries which you operate. Can we assume that this reference of growth could also be replicated at the net income level?
Well, as I mentioned, it's going to be -- to heavily depend on if there appear more opportunities of restructuring or not. If things are as this seems to be now, the increase would be higher as the restructuring expenses would be lower.
Third question. Can you provide us a reference of a range of the pure cash hosted by Logista's balance sheet, excluding the cash in transit linked to tobacco invoicing?
We always give the same reference, and it's very difficult to say as such. But what we say is, I mean, we consider at the moment of the IPO the balance sheet of the company to be the one we wanted. And since then, we accumulated something like EUR 150 million in cash. So this is broadly the cash you could consider as being ours.
And there was a last question from Pablo, but is not properly written. So Pablo, if you want to repeat the question, I will ask it at the end of the presentation. Okay. So now we move to questions from João Safara, Banco Santander. In the Q3 '20, the impact of COVID was minus EUR 17 million and now in full year is minus EUR 14 million. What is the driver behind the lower impact, higher cost savings or higher revenues linked to COVID-19? Manuel?
Yes. What is basically best reaction of our businesses towards, in some cases, that appear new opportunities in terms of business, in case of e-commerce, for instance, and the reduction of expenses that have been relevant in terms of optimization. So it's both of them.
Okay. Second question has been partially already answered, but is something that you can clarify, Manuel. Can you quantify the impact of track and trace in adjusted EBIT for the year? Considering that in your release, you mentioned an uneven impact, how much left of this impact can we see in 2021?
Well, we mentioned the uneven impact. It was taken in periodically during the year. So in the full year, the full impact is taken. What I can tell you because we do not enter into detail on the tariffs, but in value-added services, and it deserves and it has a high margin -- higher margin than the normal activity.
Third question. What role do you believe you'll play in future distribution of a COVID-19 vaccine in Spain? Do you have the infrastructure to be the key distributor of this incremental revenue stream? Can you help us understand where is your positioning versus competitor?
Okay. Now it's Íñigo. And regarding the COVID-19 vaccine in Spain, I think, first of all, that's for sure that we are well positioned to manage the distribution and the logistics of the new vaccine. But I think that having said that, it is a question of time to see whether the vaccine will come to the Spanish market first. And second, I assume that probably there will be a public tender by the Spanish government, by the regions. But I think that we are well placed to consider that this is an opportunity for Logista.
Okay. Next question from Alvaro Lenze, Alantra. Sorry. 4 question is to be repeated, but that is good information to be repeated. Besides the dividend, which are today the key capital allocation priorities for Logista?
As I said before, Gloria already said, I think that -- I don't know if it's a -- and the first priority is to pay dividend of the company. It's one of our priorities, and then this is the first one. The second one is to invest in growth in the company, whatever that means, which we have the idea to invest in organic growth. And as I say, at the beginning of this Q&A session, why not to consider from now on M&A transactions?
Okay. Next question from Alvaro Lenze, Alantra. Now that some brands in France are already at EUR 10 per pack, do you expect further price increases, maybe other brands catching up in fiscal year '21? Has the French government announced any plans to continue increasing prices of tobacco via higher excise duties?
Yes, it's Manuel. Well, I mean, the price in tobacco is something that the manufacturer has to decide, so we don't make any comment on it. In terms of the taxes, which is true that there is an agreement by the government with tobacco associations not to stay -- to keep stable the taxes until December '21. This is in principle -- and intention -- sorry, December '22. This is in principle and intention of the [indiscernible].
Next question for Manuel from Patrick Jousseaume, Societe General. Where is your firepower for M&A?
Well, you can assume what you want. I would say on that, that clearly, our firepower is over the present opportunities we have in front of us. So there's nothing particularly to comment on that for that we do not see a limitation on that for our growth.
And there is not a decision already taken by the Board of Directors regarding in terms of capital allocation. It is a question to look for opportunities in the market, sizeable but not so big. And then it's a question to discuss at the Board of Directors the different opportunities.
Okay. Some questions from Oriana Bastianelli, Kairòs. For the CEO, after almost 1 year from your arrival, can you share with us your assessment in terms of first, key strengths; second, potential weakness; third, what could be potentially managed better than before, if any; and 4, which opportunities can the COVID bring?
Okay, Oriana, thank you for your questions, but not with easy answers of that because, I -- first of all, I'm not here to criticize what happens in the past and with the previous management of the company. But in terms of the first question, the key strengths, I think that Logista is the largest logistic and distribution company in Spain, which is a good platform as a starting point. And we have a very good position in France, Italy and in Portugal as well.And I think that the perception of our customers and in the market and that we are the best-in-class in terms of providing logistics and distribution services to big companies. We are reliable, value for money. We can compete with anyone in the market, and this is probably one of our key strengths.Regarding the potential weaknesses, I don't know if it's weaknesses, but I think that I already answered a question where I recognize the perception in the market and probably the perception is right that we are a tobacco-related company. And we have to do something to change that perception of the market regarding Logista, which means that we have to accelerate the growth on nontobacco activities, but always saying that, in any case, tobacco today is a very important, profitable business for Logista. Regarding the -- what could be potentially managed better than before? I think that as I said at the beginning, I don't have the area to compare the new Logista if I can say with the Logista a couple of years ago. And if COVID can bring opportunities to Logista, I think that COVID has, in any sector, pros and cons. I think there are some opportunities for Logista because I think it's the time for the leaders in our markets, in the distribution sector and logistics, they are well placed to deal with the crisis. But at same time, as Manolo said before, we recognize a negative impact in our number, which means that we prefer a world without COVID.
Next question from Oriana for Manuel. Is the impact of track and trace already annualized in your numbers? If not, can you provide a sense of the tale into 2021?
The track and trace is fully in our numbers for this year. So you will see it from now on constantly.
Next question from Oriana. M&A. This has been on the year since long time, but never happened. Are you now closer? And which are the reasons behind?
I think we are a little bit more closer to the M&A opportunities. And the reason behind is there is a new management of the company in place.
Okay. Next question from César Sánchez-Grande, Renta 4. Could we see a positive impact in France, Iberia and Italy due to potential agreements to distribute the COVID vaccine during 2021 has happened in 2002 with the Europe?
I think we'll see an opportunity on that concept, okay, the distribution of the COVID vaccine, but it is a question of time to say what happened. But in any case, even if at the end, we are the provider of that services, working for the Spanish government, French and Italian. In any case, I think is -- I think that we are well placed to run with that service. But in any case, it's not -- we cannot consider a huge impact in our accounts of the services.
And final question from Jorge Losa, Cartesio. Is there a system of value-added services in Pharma? For example, like track and tracing from COVID-19 potential vaccine?
Yes, I think so. I think that for the time being, I think we learn a lot with our experience of track and trace for tobacco. But sooner than later, you will see the track and trace approach to new products. And clearly, in the Pharma sector is clearly an opportunity for the time being.
I'm sorry. There -- it was not the last question. We received a couple more. Next question from Patrick Dolan, Redburn. Looking at roll your own, make your own in Italy, can you provide some color on the improved performance sequentially from Q3 to Q4? Is the strong growth in the category mainly due to the shift to tobacconist consumer shopping locally? I want to make only a clarification in terms of roll-your-own and make-your-own numbers. When we report those on our announcement, we include as well heated tobacco units in this category.
Well, in fact, roll-your-own tobacco, I mean, it's constantly behaving better, particularly in Italy, in all countries, but particularly in Italy. So it's a constant behavior -- I mean, constant improvement in the sales of this constantly gaining market share. So we don't see any special thing. That is one.
Okay. And I think this is now the final question from Mikel Navarro, Santalucía Asset Management. Congratulations. A couple of questions. Which free cash flow amount Logista have generated with a normalized working capital? Second, is it possible to know the net cash position?
Well, this is Manuel speaking, Mikel. In terms of the free cash flow, let's say, assuming, as you say, by normalized working capital is the working capital without this temporary change in payments of this -- of some administrations, then you would having slightly positive, but in the range of EUR 100 million, something of this side. No more than that. So, you have to make the corrections, the figures you already have to have the correct number. And then the net cash position is the question I've already answered before, which could be the cash that is belongs to the company and the cash that belongs to the tax business or banking business of the company, which is difficult to say. And the same as we give always a rough explanation that we consider around EUR 100 million, EUR 150 million.
Okay. So thank you very much for joining us in this result presentation. And as I said before, any further questions you may have, please contact the Investor Relations team. Have a nice day. Bye.
Thank you.