Interpump Group SpA
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Interpump Group SpA
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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Interpump Fourth Quarter and Full Year 2018 Results Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Mr. Paolo Marinsek, Deputy Chairman of the Board. Please go ahead, sir.
Thank you. Thank you. Good afternoon, everybody. Thank you for calling. And a warm welcome to all of you, to the familiar names and to those who are joining our call for the first time.
There is no doubt that I'm happy and excited about the numbers we announced today. 2018, despite some more worries, turned out to be an amazing year. I say amazing because we have been working hard, but we achieved a historic result. And also because on top of these, the last 2 quarter registered even further acceleration. As certainly you have already seen, we closed the year with EUR 1.28 billion in sales. It is nearly EUR 65 million higher than the high end of our guidance.
Unlike other years in the past, where a significant path of growth came from acquisition, in 2018, the main driver was an incredibly strong organic growth, an organic growth at 13.7% for the full year. This number was not impressive enough. We also registered an accelerating trend quarter after quarter, despite the fact that the comparison base got harder and harder. With this acceleration, it is becoming increasingly difficult to see any kind of correlation with the industrial cycle or to see any impact of the trade wars on our business. So basically, in other words, all the worries expressed and discounted by the market during the year were groundless as far as Interpump is concerned.
But let's start, as usual, with our quarterly numbers. The currency exchange, for the first time in the year, had a slightly positive effect and brought our 15.5% organic growth to 15.7%. The perimeter expansion represented by GS-Hydro and, in a smaller scale, Ricci Engineering, brought our totally quarterly sales to EUR 326 million, representing a reported year-on-year growth of 21.6%.
Now if we look at the 2 division, I'm pleased to inform you that Water-Jetting posted another quarter of double-digit organic growth at 12.9%. It was raised, this 12.9%, to 13.6% by the currency exchange and finally reached 14.3% with the inclusion of Ricci Engineering.
Hydraulic grew organically by 16.9%. Be careful that incidentally, this is the highest organic growth that I remember in recent years. Then we have a currency effect that in this case was a minus 10 basis points, and total reported growth came to 25.7% due to the increase in perimeter represented by GS-Hydro.
Moving on to the consolidated year-to-date figures. Total sale -- total sales reached EUR 1,279 million with an organic growth of 13.7%, a negative currency impact of 2.6% and a 6.6% increase resulting from the differences in perimeter. Those differences are 1 month of INOXPA, 5 months of Mariotti & Pecini and Ricci Engineering and a full year of GS-Hydro. Summing up everything, our total yearly growth in sales amounted to 17.7%.
Now -- let's now see the growth by area for the quarter, the geographic distribution of our 15.5% organic growth or, to be most precise, 15.7% since the comparison I am about to make included the currency exchange. You can expect that all, all major areas gave a positive contribution as now, of course, with different shares.
Here, we see once again that there is very little correlation, if any, with the macro trend that you may be aware or be afraid of. And this is due to the extreme diversification of our sales into countless combination of countries and sector, coupled with the flexibility of our products and production processes. Really, I consider market trends as an almost irrelevant oversimplification because they actually summarize spectrum of very different performances. Interpump have a presence in every corner that allows us to read the signals from the market. We have a lean structure, allowing us to react quickly to those signals, and we take advantage of our flexibility to shape our focus where it's most worth it. In short, I think that this is really the structural reason why we regularly overcome the market trends.
Our own continent, to start from Europe, so Europe is up 11% organically. And what about Italy? I say that because Luca Mirabelli text me that many of you have expressed that their worries about the link between the weakness they're seeing in Q3 and the development in Italian politics and economy. As we anticipated in our previous call, a weak recovery for Italy was exclusively due to an unusually strong comparison base and to seasonal factors. The growth we had in Q4 was plus 14%. If you want, as I said, a reminder in Q4 why we did the plus 14%, GDP growth was actually negative.
North America. North America is up 17%. The growth in the United States doesn't show any sign of weakness, so really, no impact from tariffs. Latin America. Latin America shows plus 13%. And just like the rest of the year, it would be even stronger in local currency. China is up 19% after the weakness in Q3 growth that was mostly due to the unusually high comparison base. And then I like to save the best for last. India is booming. Really, India's year-on-year growth in Q4 was plus 52%, is plus 70 -- 67%, sorry, 67% in the peers. And I think it's important to remind that this growth is entirely organic.
Also, if we take a look at the trend in our largest application sector, we have very good news. Construction is up 16% and the same is for truck, of which OEM, so the tractor manufacturers, are up 30%; agriculture and earth moving come very close to plus 15%; industry, plus 11%, they're the contractors; lifting, plus 10%; food, cosmetic and pharma, 7%; cleaning, plus 2%.
So saying that I think it is time to talk about margins. There was an EBITDA margin came to 21.1% as a combination of 24.5% in Water-Jetting and 19.2% in Hydraulic. This 19.2%, if we consider net of GS-Hydro, would be 20.2%. Now despite the natural seasonal decrease in Q4, we closed the year with a very satisfactory 22.6% margin. It is the second best result ever. It's only 30 basis points down from the record established in the full year. But be careful that this includes the dilution brought by GS-Hydro. If we consider an unchanged perimeter, so without the GS-Hydro, our EBITDA margin for the year is, and really unprecedented, 23.6%.
And I think that the quality of these numbers is even more evident when calculated into absolute values. EBITDA of EUR 68.7 million in the quarter, closing the year at EUR 288.5 million. That is EUR 13.5 million more than the high end of our guidance. So I think very good number.
Net income for the quarter came to EUR 35.9 million, bringing the total year-to-date to EUR 173.2 million. As a reminder, this incorporates a nonmonetary fiscally neutral one-off that is a recognition of a negative goodwill from the acquisition of GS-Hydro companies, amounting to EUR 11.4 million. Adjusting for this one-off, we get to a normalized bottom line of EUR 161.8 million, 25% higher than the normalized figure of last year, and we have a corresponding tax rate of 29.2%.
Let's go to free cash flow. Free cash flow in the quarter amounted to EUR 16.1 million compared to the EUR 20.1 million registered in the same period last year. Breaking down the major components, we had: EUR 6 million improvement in cash flow from operation, EUR 35 million, again, versus EUR 29 million; a marginally better release of working capital, EUR 9.9 million versus EUR 7.3 million. And this, I think, is not the best value for the quarter, where growth was really about our already high expectations.
But on the other hand, we had nearly EUR 7 million more in CapEx, EUR 23 million versus EUR 16.4 million, which brought our total for the year to EUR 68.2 million. EUR 68.2 million represent 5.3% of sales, and this is slightly above the total of our historic trends. But I think you will agree that this investment in growth is fully justified on a year with the highest organic growth ever.
The buyback of treasury shares was EUR 17.9 million in the quarter, along with EUR 9 million spent in acquisition, basically FLUINOX. But also, our final net financial position to EUR 287 million, and EUR 287 million is almost exactly like our EBITDA for the year. On top of this, we have commitments for the past year subsidiaries, which stand at EUR 44.5 million.
Starting from this year, we will enjoy deflation experience of IFRS 16. So the upcoming application of the new accounting standard, I think, will likely attract more attention on our free cash flow. So please keep in mind that this year's figures, EUR 82.2 million, reflects the increasing working capital, which is momentarily unreversible and the boost on CapEx, boost on CapEx that I really think is proper and right for a year with such extraordinary growth and basically does not reflect any structural change in our [ year ].
In conclusion. In conclusion, I can say that I'm -- can only be very happy about the year we just closed. Each quarter was better than the previous one and much better than the corresponding one in 2017. And let me remind you that the 2017 was already a year of very strong growth.
Below the surface, while we strive to serve our customer in the best possible way, at the same time, we also successfully increased our production capacity where it was most needed. This brought about a reduction in delivery times and, so with this, a further [ and accept ] our reputation with our clients.
I will say that -- let me say that after many years spent in my life in the world of manufacturing, this is the result that impressed me the most. To give you the idea, this is the industrial equivalent of running a race and lifting weight at the same time. The extra effort required to increase capacity would typically result in sacrificing performance or sacrificing margin. Instead, when you look at our result, you will certainly see that there is no sign of any negative effect in this, let me say, situation.
Anyway, despite this increase in production capacity, our order portfolio are still significantly, significantly higher than the ones at the beginning of 2018. And today, order intake is really very satisfactory. You understand that there's -- of course, I already know the result of sales, that for January, and I can compare that our expectation are met in full.
Now I think it's time to speak about the guidance, to speak about what we expect for 2019. So let's start with the sales. For this year, we expect that sales for EUR 1.35 billion, plus or minus EUR 15 million. Considering that we have no marketable expectation on the current exchange, the midpoint correspond to an organic growth of 5%. This number is in line with the one in last year guidance. But please note, it is expected to come on top of the cumulated 24% organic growth registered in the previous 2 year. So I think it's a good and important number. We expect to reach an EBITDA of EUR 305 million, plus or minus EUR 5 million. And last, we expect a net financial position at the end of the year of EUR 215 million, plus or minus EUR 15 million. These 2 numbers do not take into account IFRS 16, and as usual, they do not consider any upcoming acquisition or share buyback.
So I think that this is what I had to tell you. Of course, I'm ready to answer any question that you want to put us. Thank you for your attention.
[Operator Instructions] The first question is from Matteo Bonizzoni with Kepler.
Two question, basically. The first one is related to this CapEx step-up that you've had in 2018, EUR 68 million, so more than 5% of revenues. Just if you can provide a little bit more color on where you allocated precisely this CapEx across the 2 division or geographies and what could be the CapEx level in the next 2 years or at least in 2019. Second question is I was trying to elaborate -- to extrapolate from the press release the profitability evolution for GS-Hydro. If you can just, say, update what is the current state of the art for GS-Hydro margin and the outlook going forward.
Yes, Mr. Bonizzoni. CapEx. CapEx is really everywhere, everywhere. I think that the beauty of our business, and so that's the reason of our result, is also that we have a very good utilization of our equipment and our plants. But following this growth that is lasting a long time, we had also to build up new plants. And we did it in China, we did it in India, we did it in Italy. So really, let me say, it's difficult to say where we didn't need to increase our capacity. And as I told you, this is not only this time, as usual, happening in the past. It's not only for machine tools and equipment, but this time was also for real estate because we needed also to increase our plants, not only our production line. For the future. For the future, I think that we will stay, as usual, in the range that we have used to stay. So I think that the range between 3% and 5% is what allow us to stay with the best of technology, to guarantee the capacity increase that we need and to substitute old machinery, so not expect the changes in this number for the future. The difference could be to stay at the low end or at the high end of the range, but within this range. The second question, request, if you want some consideration more, the evolution of the profitability of GS-Hydro. Because I think that the situation of GS-Hydro is not so simply to give you a number, because for sure, it's much more complex. At the end of the day, it will evaluate the real result of the company. We have to enter many different components. The first thing that I want to tell you is that we are very happy about this acquisition. And not only happy about the acquisition, but also very happy about the work we have been doing on this acquisition because this will bring us very important result. It was clear, since the beginning, that the integration process would have been much more complex, much more, how to say, articulated than usual because this one is not a bolt-on acquisition. Since the beginning, we knew we had to go through a more traditional industrial integration process. For example, we have relocated the production of [ lenses ] to I.M.M. plant in Atessa in Italy, in Atessa, canceling significant deep cost. Recently, we assigned the Chinese branch of GS-Hydro to Hammelmann, and this gave Hammelmann the ability to pursue new business in the Shanghai area at no cost, so with a big potential. During this time, Fabio Marasi cut logistic and personnel costs by something like EUR 2 million a year. So really, we did a very good job. Now -- by the way, there is something also important. During the year, GS-Hydro didn't cost us a penny because the company paid for its own restructuring cost, and to be honest, the EBITDA margin kept showing signs of improvement. So if I put those numbers together, the figure for the fourth quarter was close to 6% EBITDA margin. But it still doesn't incorporate all the cost cutting. And let me say that even the monthly trend is very encouraging. Then you have to consider then on top of this, there is cross-selling. GS-Hydro is expected to buy, in this moment, at least EUR 2.5 million worth of products from other companies in the group, which represent, of course, the fact that benefit for the group's consolidated EBITDA. So, so far, so good. So far, so good. Of course, there is still room to improve further the company, and we will work on that. But since the characteristics of this acquisition, let me say that even if that EBITDA generation in the future was stuck at 6% for GS-Hydro, which is absolutely not my expectation -- it has to be clear, it is not the expectation. But even if it was, it would still need more than 50% return on our EUR 6 million investment starting from this year. So let me say, I'm very happy on the acquisition. The trend is positive. The trend is growing. There is room for better performance. We work on it. And the integration within the group is becoming more and more efficient.
Your next question is from Alessandro Tortora with Mediobanca.
I have 3 question, if I may. The first one, sorry, I didn't catch your, let's say, guidance on the CapEx side, starting from, let's say, almost EUR 70 million spent this year. Okay? If you can give out -- so without any other -- an absolute level of investments expected for this year. The second question is on the performance of the U.S. subsidiaries. If you can, let's say, elaborate a bit more on your expectation of -- for U.S. subsidiaries, such as Muncie and NLB. And the third question is on the guidance you released on the net debt side. Can you clarify if this is a level excluding production? I guess for sure, it's excluding IFRS 16 impact. But just if any idea is you are excluding or including the production value.
Yes. CapEx, I say that even if this year we are marginally over, marginally over 5%, I could see that the range for the future will stay, anyway, between 3% and 5% of our sales. And so according with the year, it will stay low side or upside of this range. Our expectation, so at this point, for 2019 is around EUR 80 million investment for the year.
EUR 80 million?
Yes, roughly. Our subsidiaries, our subsidiary U.S., everything okay, everything very good. Muncie is over 22%. NLB is over 20%. So they are running really well. We do not see any sign of slowdown. By the way, we are working to increase our production capacity also in the U.S. Our plant in Tulsa will be rebuilt completely. We will enter into a brand new plant. Sorry, because I have Mirabelli interrupting me. Mirabelli is saying be careful that EUR 80 million is around 6% of 100 -- EUR 1,350,000,000, so marginally higher because we have all those investment also in real estate. So for example, Muncie, we will start build up a new plant in Tulsa and another new plant in the area of Muncie, in Indiana, particularly for the needs of American Mobile, our company producing text, that in this moment is suffering for not enough room in their plant. So this -- also, NLB, we will need to start thinking something for expansion also in NLB because all those company are really growing pretty well. They have good orders, so no sign of any kind of slowdown. Regarding the net debt, I confirm you that our guidance exclude, not include, production, exclude production.
Okay, okay. So if I understood well, assuming, let's say, your CapEx level, including the investments that you mentioned before, let's say, of around EUR 80 million, it means that on the working capital side, the strategy of the company will be still to support, let's say, the ongoing business. Therefore, working capital on -- say, should be really close to, let's say, the current level that we saw the last year in 2018. Is it correct?
My expectation is that it should go down a little bit, but I agree with you, not dramatically.
[Operator Instructions] The next question is from Anders Knudsen from SEB.
Just wondering if you could give us some building blocks on the 5% organic growth guidance for '19. And also, I should start by saying that January has been living up to your expectations in full. Perhaps you can also elaborate a bit more about that.
This is a, let me say, a good -- appear very, very simple my answer. I don't want to give you this feeling. But basically, the growth is everywhere, is everywhere. We are expecting a higher growth, generally speaking, in Hydraulics more than in Water-Jetting. But basically, we are expecting growth everywhere. If I should mention some area with an important goal, there is, for sure, India, where we are in the middle of a boom of the orders. But basically, there is not an area that is jumping, that is booming over the other areas significantly. It's general growth. And this is a good sign, a good sign because it means that all the company are contributing for this growth.
And January, how much have you actually grown in January?
Sorry, say again?
So you said that January has [ deduct ] your expectations in full. Could you put a number to that?
Let me think. I do not like to give you one single month. I have better to give the quarter. And so that -- this is an information that, unfortunately, I will give you May the 10th, the 10th. But let me say that it is a little bit over our expectation.
The next question is a follow-up from Matteo Bonizzoni with Kepler.
Yes. Three quick follow-up. One is on the ForEx assumption that you -- is embedded in your EUR 1.35 billion guidance for the revenues. I was doing the calculation, starting from the revenues of 2018, so EUR 1.28 billion, adding a 5% organic growth and adding the small impact of the FLUINOX acquisition that I think has been the only -- that perimeter so far. You should get exactly to -- in the [ reason ] EUR 1.35 billion. So I assume that the ForEx assumption is flat even if we are on the U.S. dollar, for example, significantly better than last year. So I wanted to check what is the ForEx assumption. Then margin guidance. Midpoint EBITDA divided by midpoint revenues remains flat at 22.6%. Just -- can you add a little bit of color on why you expect the flat percentage margin with a 5% organic growth, elaborating also on the cost side? And then if I may, when you see that the backlog is currently significantly above last year, what is significantly, high single-digit, low double-digit currently year-on-year?
I confirm you that the ForEx is basically flat. In our consideration, ForEx is basically flat. The second question, if I remind -- if I remember correctly is regarding EBITDA. You see the average is 22.6%. But this is the same question of every year. We like to stay feet on the floor. You know me since a long time, I like to stay feet on the floor. And this, I give you a range is because it is normal in the variability of our production to where there's some differences. Anyway, if you consider the range, it means that our EBITDA margin will not be below 22% and possibly about 23%. And this represent, in absolute term, a growth in EBITDA of 6%, so even higher than the growth we gave in sales. And this because basically, it incorporate the mix effect resulting from a stronger growth in Hydraulics than in Water-Jetting, as I said before. So let me say, I do not think, I do not think that we are particularly prudent in our guidance. And certainly, and certainly, this guidance is not reflecting any negative expectation. But I think that you can't consider only the midpoint, but is correct to consider all the range. Otherwise, why give a range? I do not remember if there's a third question.
Luca Mirabelli speaking. If I can add just one more statement on the currency exchange. It's not like we are ignoring the situation of the dollar. But what we have seen, at least for the past couple of quarter, is that the opposite trend in other, especially emerging market currencies, has almost compensated for the performance of the dollar. So the 2 things, at least in the last couple of quarters, have almost canceled each other out. This is why we feel entitled to say that our guidance has no remarkable expectations. Actually, the exception was last year when the situation with the dollar was so evident and so in front of everyone that we clearly could not have escaped giving a guidance without attaching the dollar assumption to it. But we are back to our normal policy, which is to basically disregard the currency. And we believe that with the current situation, we might be quite close to realistic approach.
On the third question, the last point, our backlog, I do not like to quantify the backlog because it could be misleading. It's something that I told you many times. The growth -- or the decrease in the backlog is something, of course, very positive. But many times, if you use this number to calculate the possible sales, it's not a precise operation. So significant means better -- let me say, we have a better position, much better position that -- to the situation that we had at the beginning of last year, so better than that what I have to tell you more.
Also, more than proportionally, even including the growth of sales in 2018. I think it is safe to say that.
Your next question is from Bruno Permutti with Banca IMI.
The first question is on CapEx. If we can assume that 2019 will be a peak year for your CapEx, including the real estate, as you said, and so if we can, excluding possible acquisition, obviously, but if we can assume that from 2020, there will be a decline to around EUR 60 million, EUR 70 million. The second one regards acquisitions, if there is something that you are looking at in terms of industries or also acquisitions, which could help you improve your marginality in terms of manufacturing process. So I was asking if there could be perhaps a trade-off between CapEx and acquisition should you need the additional capacity or additional technologies. And then on GS-Hydro, it looks like you are little bit more cautious on the year, structuring process going on in GS-Hydro. So I would like to understand if you're still pointing to reaching a [ regime ], a profitability not far from that of the whole group. And the last one, sorry, I didn't -- perhaps, I lost your guidance for the net debt, if you can repeat it.
Yes. CapEx, it is, let me say, difficult to predict exactly CapEx for the future. The reason why I consider that knowing our business, the range I gave you is something that works because 3% and 5% allow you -- allow us, let me say, room enough to consider any year where we need many acquisition and many investment and year where you need less. I think that one important difference is being in this period real estate. So probably, what is moving a little bit up, our CapEx is linked to the need of adding new plants to enlarge our existing plants. This is, of course, is not something that happen every year. So in this moment, of course, when we build up the plant, we consider to build it with room enough for the year to come. So I'm expecting that after a couple of year, our CapEx of this level, our investment, could be down, but of course, within the range that I told you. Acquisition. Acquisition is something that keep us always very busy. We are working on more dossier in this moment. We have good dossier on the table. So we have -- you have to expect acquisition in -- within the year. There is no doubt. And I really hope to give you information about that, not in a too long time. And -- but among these, there is no one that give us the possibility of a trade-off, as you mentioned, between the CapEx and the acquisition. So we are not buying a company that is producing exactly what we are doing, where we can use their production capacity for our needs. Usually, what we look for is a company that increase our portfolio of product, a company that increase our presence in markets, in sectors, something like that. So a trade-off at CapEx and acquisition is pretty difficult anyway, is not on the table. GS-Hydro. GS-Hydro, we are managing -- we're managing the business, if you want, in a different way, not only consider this, as I said before, as an add-on company. Let me say, does not need any integration within the group, but we consider that we are able to get more significant goal, more significant result with a better structured organization of this company. So for this reason, we are also splitting this company to get most synergies, to get more opportunities with existing company, with a company that we already have. This, of course, is a little bit more, how to say it, difficult. It take a longer time, but bring, for sure, to better and more significant results. Last point was net financial position. I said EUR 215 million, EUR 215 million, 200 1-5, plus or minus EUR 15 million.
You next question is from Michele Baldelli with Exane BNP Paribas.
So just one simple one. I've seen on the newspapers from North America, from United States, that the amount of the entire location on the Tusla (sic) [ Tulsa ] plant is amounting to roughly $50 million. But this is news from newspaper. If you can give some details about it, if this is really what you will spend or this amount is an addition. Let's say, there is, let's say, not only what you -- we spend, but there is also the key [ member ] you will move from one plant to the other. So any details about it. And also to understand that what kind of expansion of capacity we are speaking about, 20%, 30% higher or probably doubling capacity. Any details could be appreciated.
Mr. Baldelli, you read a lot of newspaper. You are always, always, always informed. You are fantastic, i.e., had to know that -- this information. Now in Tulsa, maybe is too early to say, but we will got a fantastic opportunity. A fantastic opportunity because in Tulsa, probably, we will enjoy some contribution from the state and some from -- and from some, let me say, activity of improvement for the city. So we can expect that we will get the land for free, the land for free. And probably, with the contribution of the city, of the state for this relocation, we will enjoy other advantage. So the information for the time being that you read is not founded. I don't know where you find it, this information. But I think that the plant, the new Tulsa plant, that we will start buildup probably towards autumn or something like that, will represent a very nice opportunity also in term of cost. Regarding the size, of course, we are going to build up a modular plant, so being able to increase the land that probably we will get for free, has room enough. So we will be able to invest, when needed, and increase the capacity of the plant and, at the same time, moving our production gradually. So this is the situation in Tulsa. Sorry, Mirabelli find out the article. I appreciate reliability of Mirabelli. $50 million in Northeast Oklahoma, Muncie Power Product, this is really fake news.
The next question is from Alessandro Cecchini with Equita.
I have some question. The first one is if you can add some color on net working capital on sales and then if you elaborate a little bit more on this in order to reach your guidance of EUR 215 million of net financial position for 2019. And my second question, if you can, you add more color on the drivers behind the margins for 2019, in particular, considering the purchasing part of costs.
As I said before, net working capital on sales, we are expecting to slow down a little bit, but we are not expecting to cut it dramatically. Of course, for us, it's absolutely important, the control of working capital. But also remember that working capital is, at the same time, a tool for sales and a tool to have low production cost. So even if working capital is, let me say, one of the item that we consider for the bonus of the management is something that we keep constantly under control. We pay also attention to be able to supply the customer pretty well and to have a good production cost, low production cost. For this reason, I do not think that we have, let me say, aggressive working capital. Maybe it could be a little bit less, but it could even penalize our result in terms of sales and in term of cost of production, production cost. The second question regarding, basically, purchasing cost, we -- this year, we had a significant material cost increase. But significant means that according to one company, to another company, it goes to -- from 0.5 to 2.5 or something like that. But -- and anyway, we were able to transfer this cost on the price. So basically, we didn't suffer because of material cost increase. And you see that our margin are increasing. They are not decreasing. This is an ability that is in the DNA of Interpump. So I'm expecting that we would manage correctly also for the future.
[Operator Instructions] The next question is a follow-up from Alessandro Tortora with Mediobanca.
Yes, yes. A very quick follow-up from my side. Sorry, in -- during the conference call, you also say -- gave qualitative outlook by division, mentioning that you see, let's say, further growth potential in the Hydraulic. What I would like to understand is what about the Water-Jetting, if you see in the short to medium term there's a new application that can boost your already high level of this division.
Water-Jetting is performing very well. It's performing very well, and so we are very happy how they are doing, the profit they got. Of course, we are expecting that they will grow as well. The only point that I said that probably, again, this year, we will see a higher growth in Hydraulics more than in Water-Jetting. But it's not -- this does not mean that we have any kind of concern for the growth of the Water-Jetting that will be, for sure, also this year.
Gentlemen, there are no more questions registered at this time.
Okay. So I thank you very much to be with us on this conference call. We will see together the results of the first quarter in May, May 10. And I really hope, and I really think, I will be able to give you again good news because what we see in this moment is -- really, is giving us optimism for the future.
Thank you very much. Have a good day. Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephone. Thank you.