Interpump Group SpA

MIL:IP

Earnings Call Transcript 2019-Q4

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Interpump Fourth Quarter and Preliminary Full Year 2019 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.

[Paolo Marinsek, executive]

Thank you. Thank you, and good afternoon, everybody, and thank you for joining us. Well I'm proud to say that we closed a very good 2019. We closed the year in market a contest that turned out to be much more difficult than we expected one year ago, a contest that brought some of our most respected competitors to post negative growth, while Interpump has grown, maintaining a very high profitability with outstanding results in some areas.

Not only we grew organically, but we enriched our basket of companies with a few changes that will give a significant contribution to the future of our group. On this topic, by the way, organic growth versus external growth, I will make some further consideration later on.

As you probably know, we closed the year at EUR 1.3686 billion, up 7% from last year. 1.4% came from organic growth, another 1.4% from currency exchange and 42% from the first 12 months of acquired companies.

The 2 division. Sales in Hydraulics were EUR 902.2 million or 6.9%. The market comes from the addition of the newly acquired companies, but even organic growth remained positive at 0.8%, and the FX contributed with 1.1%. Sales in Water-Jetting registered at EUR 466.4 million or 7.2%, with organic growth contributing for 2.5% and FX for 2%.

This, really, I think, are very good results for such a challenging year, which also marked our 11th consecutive year of positive organic growth, including, but if you want, at the same time, I would say, despite the double-digit growth embedded in the comparable figure last year.

The fact that this is a very good result, I think it will become even more meaningful when we address the topic of margin. But let's address first the quarterly figures.

It was a very particular quarter with a completely different trend in our 2 regions. A worldwide hydraulics market has experienced a strong slowdown, which also of course, impacted Interpump. And now somewhat lesser than some of our most renowned competitors. And on the other hand, Water-Jetting behaved very, very positively in the quarter. This is yet if you want another indication that adding the 2 divisions, which be careful only represented the tip of the iceberg in our diversification is one of the Interpump's most important asset.

Total consolidated sales in the quarter were EUR 342.5 million, up 5.2%. The contribution of organic growth was negative 4.7%. However, to help put things in the right perspective, let me remind you that the comparison quarter included the highest ever organic growth at 15.5%.

Special division. Hydraulics closed the quarter with sales for EUR 221 million, up 3.2%. Thanks to the addition of and Hydra Dyne Tech and Reggiana Riduttori, our sales are higher than one year ago, even in one of the toughest quarters in our recent history, with an organic negative growth of 9.7%.

Water-Jetting on the other hand, continues its acceleration with a very positive 5.1% organic growth, which become 9.1%, or EUR 121.5 million after accounting for the exchange rates and adding FLUINOX, the new acquired company in Water-Jetting.

However, the positive effect of 2019 are not over with 3 beautiful acquisitions and growth in sales even organic. The highlight is on the profit margin that Interpump has maintained. We closed the year with EUR 317.9 million of EBITDA, a margin of 23.2% of sales. Strengthening the effect of IFRS 16, this corresponded to 22.1%. Not only this number is remarkably close to last year 22.6%, but nearly half of the difference is due to the minor dilution from Reggiana Riduttori and Hydra Dyne Tech.

In the quarter, consolidated EBITDA margin was 22.7% and in under the sales capitalization. If we take out from this 22.7%, the effect of IFRS 16, but also the slightly dilutive effect of this year's acquisition, the corresponding figure, which is comparable with last year's 21.1% is 22%. So with the difference in organic growth on more -- of more than 20 percentage points from Q4 '18 and Q4 last year, our margins are higher.

This kind of organic growth is critical for many other companies. Because it has a direct and sometimes dramatic effect on margins. As you can see, very clearly, this is not the case for Interpump. EBITDA margin in Hydraulics was 20.7% for the full year and 19.2% for the quarter. In Water-Jetting, 27.9% for the year and 28.6% is the right word -- figure for the fourth quarter.

At this point, as usual, I will give you some indication of sales trends by country and by application. However, the more I do this, the more I am convinced of 2 aspects. The first is that the market situation can shift very quickly. So this information is not very meaningful. The second and most important is that the impact of these rapid changes on Interpump performances is very lean. Let's have a look at to them anyway, please remember that all the comparisons are in euros, and they do not include the acquisition. So sales in Italy went down 10% in the quarter, rest of Europe a bit better, minus 5%. Growth in Europe remains slightly positive for the whole year.

North America, minus 6% despite some help from the currency exchange, but closed the year with a solid plus 5%. China, as anticipated in previous calls, had a very strong Q4 at last 46%, which brought the full year growth into positive territory. Latin America was up 11%. India showed some improvement going from the minus 40% of the previous quarter to minus 27% in closing the year at minus 13%.

Looking at sales by application, the best-performing category is shipyard with nearly 30% increase. By the way, we have a very strong increase in the last quarter, we had almost 200%. So it's a very nice situation.

Next comes industrial with plus 20% and so on. Sales in trucks adds the 2 different opposite trends. The not too cyclical application, which make up roughly half of the total. So I'm speaking about garbage, sewer cleaning, firefighting, snow and [indiscernible] -- and so on, went up 14% during 2019. The other half of truck sales made up by direct sales to truck and gear box manufacturers. Together with vocational vehicles used in cyclical industry like [ crane ] trucks, concrete mixer and so on, they were down 15%.

I think those are the most important things as an achievement, I don't know, contractors, that, for Interpump is important is plus 9%, the listing, plus 8%, construction plus 6%.

Okay. I think this is all regarding our sales and our margins. Let's say something about our net income. Net income came to EUR 45.2 million. Bringing the yearly total to EUR 180.7 million, our highest ever with an increase of 11.2% over the normalized figure for last year.

The corresponding tax rate, this is the nice news for the year, has gone down to 26%. And I am very happy to tell you that this is not a one-off. Most of the decrease is resulting from the interim acquisition of Industry 4.0 compliant machinery installed in Italy. The effect will last 7 years, and we still have some machinery as the last certification stage, which will give a benefit starting from next year.

Another part of the decrease, minor part, of course, is due to a new, more favorable fiscal treatment of dividends coming from our German subsidiaries, in particularly, Hammelmann, of course, and [ this is ] forever. Of course, we'll always have some country mix effect. But it is safe to say that our tax rate will be lower than expected, at least through the year 2025.

Looking at cash flow. Cash flow from operations reached EUR 233.4 million. The quarterly decrease of sales net working capital, as expected, was particularly strong this year, and freed up EUR 34.2 million compared to EUR 5 million in Q4 last year. As demonstrated in the past, and particularly I remember 2009, our working capital is really a very reliable bank. And this bank give back cash when there is no organic growth. So I'm favorable of the situation.

Capex. CapEx ended up to EUR 73.7 million compared to EUR 68 million last year. And everything included, everything considered, free cash flow, since the beginning of the year peaked the record amount of EUR 124.8 million, nearly EUR 50 million was generated in the last quarter. And since the positive effect of organic slowdown, working capital comes with a delay, and this is a very encouraging indication for 2020 cash generation.

As you know, we went on with departures [indiscernible] EUR 30.2 million in the quarter, totaling EUR 79 million for the entire year. All these brought our net financial position at the end of the quarter to EUR 370.8 million, on top of which, we had EUR 54.3 million of commitments related to our opposition.

Okay. Those are the numbers. Now we have reached the point where we usually share our expectation for the future. And as you know, in the recent past, we have always given a very precise guidance with a very narrow tolerance relative to only next year or only to the new year. We have made, as you thought, a few consideration about this topic. As you know, the majority of growth in the history of Interpump comes from acquisitions. So the most important consideration is a fair assessment of the differences between organic and acquired growth, and the 2 aspects of cost and benefit.

In terms of benefit, the kind of acquisition we do, companies that are a good fit for the group without any need of radical changes certainly offers more opportunities than organic growth. We have new products, new markets, new customers, creation of new chances for cross-selling. Moreover, the addition of the company's structural while organic growth is by definition more volatile. In terms of cost, there is a common but groundless belief that organic growth comes for free. While acquisitions are very expensive because of the price paid and the cost of the reorganization and restructuring that follow, our history demonstrates the opposite.

As you know, we have always bought at very reasonable prices, certainly much lower than the multiples seen in the market. And in our model, we spend very little, very, very little in restructuring because we aim at keeping and announcing all the positive characteristics of the company we acquire. So we don't want to change everything to introduce an Interpump model.

Analyzing the last decade of data, we made the comparison. The cost of acquisitions can be precisely measured. Sometimes it is even lower than the price tag because of the book value of treasury shares that many times are used for part of the payment. On the other hand, organic growth involves both CapEx, most of our spending is related to capacity expansion. And the proportional long-term increase in the net working capital.

Our conclusion, which may sound surprising to those of you who are less familiar with our model is this. These 2 types of growth, employ a comparable amount of capital.

This is why we resolve business, from now on, to include acquired sales and EBITDA in our guidance and to extend the time horizon to 3 years to reflect that and predictability of the timing of our acquisition.

Well, our expectation for the end of 2022 are for a solid increase in sale, around 1/3 more than 2019. This will be done presenting our excellent profitability, with an overall EBITDA margin around 22%, because it could be even more because we account for some potential dilution because companies we acquire are now very good, are usually running at a lower margin than our average, at least initially for sure. Finally, we expect to achieve these results maintaining our prudent financial leverage between 1 and 1.5x EBITDA.

I think you will like this indication, which will, hopefully help the market to gain a more realistic view of Interpump growth. I think this is everything I wanted to tell you. So at this point, I leave room for you for questions, if any. Thank you for your attention.

[Operator]

[Operator Instructions] The first question is from Matteo Bonizzoni with Kepler Cheuvreux.

[Matteo Bonizzoni, analyst]

I have 3 questions. So for the first time, you are providing an indication over the next 3 years with this 33% cumulative increase in the revenues, that is a 10% revenue CAGR, that is exactly in line with, by the way, your track record over 2005, 2019. So your long-term track record. So just to understand that you have not commented about the kind of opportunities that you are going to see. So Hydraulics versus fluid and we keep them versus potentially other segments, in which we are not present, Italy versus a broad size? And also quite importantly, the ability to continue to buy at this low -- relatively low multiples, 6x to 7x EBITDA, it is well below where you're trading.

Are you confident to continue to buy at this limited margin? So this is the first question. Then, okay, you are not providing an indication onto '20, but clearly it is also another issue. We have seen this slowdown in Hydraulics with decline in excess of 9% in the fourth quarter. The market environment seems to remain challenging at least for the first half of the next year. What do you see in that area? On the contrary, clearly Water-Jetting was very, very strong both revenues, but also margin. What are your expectations for the 2 divisions for 2020?

[Paolo Marinsek, executive]

Yes. First of all, the kind of opportunity. We have a lot of opportunities on the table. And so that we are in the duty situation to have the chance to make a choice among different opportunities. So that -- believe me to find the opportunities is not a concern. I think that we are more and more well-known in the market for our acquisition. And so many times, we have even companies that ask to be considered. So I will confirm you that the opportunity will last. The other point is the low multiple we pay. The low multiple is not by chance. It's because, really, we offer to the seller something more that usually the company offers.

We offer the chance to stay with us, to manage the company for faster [indiscernible], to have the chance to gain more money during this phase. So we are offering a chance to define a way out, and this is, many times, very important for entrepreneurs that have this consideration to make. So for this reason, I think that also in this point, because of the characteristics of our acquisition, we will go on in a situation like this. Yes, you are right. We are not giving indications regarding 2020. My personal feeling is not pessimistic, absolutely. I'm expecting the 12 organic growth here. Of course, it is tough to tell this exactly in this moment because of the virus in China, because of the slowdown of the international market because of this situation.

Nobody knows what will be the effect of this situation. But anyway, I will tell you that I am optimistic again as I was last year. I am optimistic, again, also for 2020. You are speaking about Hydraulics. We have used -- we are used to have 1 sector that is going up, 1 sector that is suffering. The beauty is what you see in this number. The ability of Interpump to reduce their sale less than competition and the ability to maintain the margin. And I think that this is in our DNA. So for this reason, no concern even there.

[Operator]

The next question is from Alessandro Tortora with Mediobanca.

[Alessandro Tortora, analyst]

I have 3 questions, if I may. The first one, so I saw, let's say, your 3-year targets from now. Coming back, sorry, to the point of my colleague on, let's say, organic development for this year. I understood that China and all the consequences from the trailing supply chain impact is something still to be assessed. I would like to understand, from your standpoint, what is happening, for instance, in your, let's say, plants in China. If all are running at, let's say, reduced capacity are closed the door. So just to have an idea from your perspective, what is happening for Interpump from these risk? Wild risk. The second point is on the margin, let's say, expectation for the year? Because last year, we had, let's say, these huge CapEx you spent in order to optimize the production footprint. So I would like to understand if -- as we saw in the last quarter, if we can consider sustainable, the 22%, let's say, EBITDA margin also for 2020?

The last question is on the CapEx. Clearly, you came out with a guidance on a net financial position, debt-to-EBITDA financial target for 2022. Can you give us an idea of, let's say, sustainable run rate for the recurring CapEx for Interpump?

[Paolo Marinsek, executive]

I will tell you regarding China. China is in bad situation. For the time being, we didn't suffer any loss. Our plants until last week were totally closed. Now we are expecting somewhere, following very precise and very respective indication by the government and taking, let me say, some responsibility in the sense that we have to check the health of our worker. They have not to come from -- they are not to move during the new year in other areas, so that we have to check the situation of each of them. And basically, I would say that, in this moment, we are working, maybe 30% something like that. To be honest with you, I think that the situation will not last a long time.

I note -- I have no concern for the Chinese market because the Chinese market is closed. And when it will resume -- all the Chinese manufacturers are in the same situation. I have a little bit more concern for logistics because my expectation is that when the virus will be over, we will suffer some problems, some issue with logistic ships and so on. But anyway, if we consider that, in a couple of week, we could start working, again, I would say that we would not suffer any particular negative effect. Margin expectation. Margin expectation 22%, the reason of the expectation of 22% is taking into consideration also the possible dilution of the acquisition of some companies. So of course, this number is valid also in 2020?

The first question related to CapEx.

[Unknown Executive]

[indiscernible]

[Paolo Marinsek, executive]

CapEx for 3 years really is not something that we put exactly in our calculation, but you know that usually, we always are between 3% to 5% of our sales. And I think that this will remain a very reasonable number according to the specific situation. You see that the investments we did in Italy are giving us also good results in a fiscal point of view.

[Alessandro Tortora, analyst]

Okay. And just, if I may, a quick follow-up on you've got power submission, the recent acquisition. Considering also the last deal, Transtecno, do you believe that this is, let's say, enough size for this new segment or probably -- or let's say, you expect some other deal in order to boost the critical mass of this new division?

[Paolo Marinsek, executive]

No, no. Nonexclusive. Not excluding some other deal. So there is as other room there. For the time being, the 2 companies that we bought are among the most profitable in absolute term. They are complementary because one is making the big product, and -- the small one. So I think that this will represent a very important opportunity for Interpump for the future.

[Operator]

The next question is from Michele Baldelli with Exane BNP Paribas.

[Michele Baldelli, analyst]

I have a couple of questions. The first one relates just to, if possible, any kind of guidance on the free cash flow generation, net debt, as you may prefer? And the second one, it's about the M&A, given that you gave 3 years targets that are let's say, giving a lot of visibility on those. I would like to just have more color on these short-term timing shifts in 2020. You expect already something material and so on. So if you can give us some color?

[Paolo Marinsek, executive]

Yes, regarding net debt, I think that telling you that we will stay between 1 to 5x EBITDA is everything I can tell you, in the sense that is, let me say, our usual situation. Regarding M&A, we are working. We didn't stop working because we did, very recently, 2 important acquisitions, particularly important for the venue as product is marketed in the year. So we are still speaking, let me say, even more, negotiating. If you want with as other companies. So I think that you have to expect something in 2020. Why not?

[Michele Baldelli, analyst]

Okay. So I mean that's the target on the net debt-to-EBITDA, 1.0%, 1.5% is any way post acquisition?

[Paolo Marinsek, executive]

Absolutely.

[Operator]

The next question is from Domenico Ghilotti with Equita.

[Domenico Ghilotti, analyst]

A couple of questions on Q4. So first of all, I was trying to understand how much of the Water-Jetting margin was due to Hammelmann? If you want, how would margin performance of the rest of the group? So the -- such a beautiful performance was concentrated from a single star or more spread over the group? And how sustainable is this water-jetting margin for the full year, I'm not say the Q4 that was a bit exceptional. The same question on the Hydraulics division. So I'm trying to understand if Q4 trend was homogeneous among the different sectors. And third question, maybe I'm trying to understand because I read the comment from your key competitors. They were providing a bit of, say, light at the end of the tunnel. So they were seeing some recovery, at least, in terms of order intake compared -- less negative trend compared to Q4. Check if you had the same feeling in the Hydraulics division?

Last question is -- so I'm trying to understand what is the most critical target for you? What is the most critical achievement that you are really focusing on for 2020?

[Paolo Marinsek, executive]

Yes. Water-Jetting? Yes, Hammelmann has outstanding performance, but not only Hammelmann did very well, performed pretty well also INOXPA, and very well also NLB. So it's not only the case of Hammelmann even if Hammelmann had a good situation. I would like to remind you when -- at the beginning of the year, you had, I think concern regarding Hammelmann, because we had some 0-point less something it was affecting and I tried to explain to you that I have no concern about that because it's very, very normal that one company has a little bit some slowdown and some acceleration according the order, the timing, the delay and so on and so on. The basis is that we have really beautiful companies. We have the best European, the best American, and they are performing very well. So even speaking about the mass [indiscernible], I do not consider that there is something unique in this number. I think that those are numbers that our company are able to perform.

Regarding the incoming orders. No -- in -- also Hydraulics, you mentioned the recent trend, and it is true. In this moment, we see absolutely less pessimistic situation that we had some months ago. I wouldn't say now it's booming, but I'm telling you, absolutely, that now the situation is becoming better. So our portfolio is smiling again. And you said that the most critical goals?

[Domenico Ghilotti, analyst]

Yes, I mean 2020, there are many moving parts they are not providing guidance, but clearly, there are maybe some issues or some opportunities that you are focusing on more than others?

[Paolo Marinsek, executive]

Nothing special. Nothing that is creating a different concern. If you want, the China situation is something that everybody is looking with attention because nobody know how much it will represent. But even there, we are not in a critical situation as many other companies. So anything should happen, we should suffer probably a little bit less. But for the rest, I think that the situation is the usual situation that we are used to manage.

[Domenico Ghilotti, analyst]

And I had a question on the -- so on Q4 for the Hydraulics. So on the trend, it was homogeneous, so similar to the Water-Jetting. So if it was spread over the different segments in a quite homogeneous way? Or if you had some best performance and some worst performance?

[Paolo Marinsek, executive]

Well, it is basically in the same situation.

[Domenico Ghilotti, analyst]

What about filling this and what so ever?

[Paolo Marinsek, executive]

Point less point more, but not big differences among the companies.

[Domenico Ghilotti, analyst]

So very macro driven. So market-driven, nothing really specific.

[Paolo Marinsek, executive]

Yes, I would say so. Yes.

[Unknown Executive]

So yes, so I would just remind you of India. India, of course, is -- it's not a company, it's a geography, but of course, that was the odd one out. And also in the fourth quarter, it contributed negatively to the average performance.

[Paolo Marinsek, executive]

And also there, I remember that [indiscernible]. Is it fit for our exploration there? A centralized situation -- master finish. And even there, the trend is less negative than in the past month.

[Domenico Ghilotti, analyst]

Okay. And last, just a clarification, when you were speaking about tax rate that is the structural improvement because of the benefit that you were mentioning. So we should assume the 26%, 27%, as a -- at least for the next couple of years at a sustainable level? Is it correct?

[Paolo Marinsek, executive]

Yes, it is correct.

[Operator]

[Operator Instructions] The next question is a follow-up from Michelle Baldelli with Exane.

[Michele Baldelli, analyst]

It's about the -- what adjusting the vision? Because I remember that you were speaking on the last conference call about good orders in Asia in the oil and gas. So I was thinking about the margins. Could they have been impacted by these contracts? First. And second, are these kind of products and the projects still ongoing and contributing also in 2020, probably for other clients? But anyway, should we expect it to be continuous with in the coming quarters?

[Paolo Marinsek, executive]

We are checking an acceleration in this area. So since we are touching an acceleration, we have a positive feeling. I think that this business will become more and more important. If you want the problem of this business is any regular timing, if you want, in the sense that many times, you have a big job and so that there is not, let me say, continuity. And I know that the monthly situation is creating a few concern, but it's not creating concerns for me. [indiscernible]

[Michele Baldelli, analyst]

No, no, no. I'm not concerned. I mean just curious to understand the.

[Paolo Marinsek, executive]

The indication is positive. It's a positive indication.

[Operator]

[Operator Instructions] Our next question is from Bruno Permutti with Banca IMI.

[Bruno Permutti, analyst]

I have a question on the free cash flow generation that you expect, in particular. If I have well understood, do you expect to have some benefits on the net working capital. So on one side, you expect still to grow, on the other side, you expect to have some benefits in terms of net working capital, also related to the general slowdown. So I wanted to understand -- I would like to understand where you are focusing your attention to eventually reduce the net working capital in -- so feed the free cash flow generation? And the second question was related to the Capex. So in the last year, you had some -- to implement some investments and some inefficiencies related to that.

I was wondering if this is completely over? And if your production capacity, what -- which is the level of utilization of your production capacity? And the last one was related to the treasury shares buyback program. If you can remember -- at which point you are, and do you have a deal and if you are planning for 2020 to continue?

[Paolo Marinsek, executive]

Okay. Working capital, you know our company, and you know that working capital is always a sort of argument. In the sense that always -- we recognize that we have not today worldwide champion in working capital. And the reason is that we consider working capital very important. It is in the goal of all our managers. But it is also a tool to have low industrial cost and the ability to serve very well our customer. If you consider the situation of China today, not to be changing in working capital, giving us an advantage, not to run the risk of slowdown our delivery to our customer because we are importing something from China.

So we manage the situation in the same way, paying lots of attention not to increase our working capital but also not to reduce it too much. But when you have -- your sales are going after dramatic like it happened last year, of course, you need to increase working capital at a very high level. And then the reduction is, let me say, more what we used. For this result, I say that I'm expecting also good result in 2020. CapEx, basically, we are always running at full capacity. There is never a situation -- also because our production is extremely diversified in the sense that we are not using a specific production line for a specific product. And for this reason, we are always running basically at full capacity.

And regarding the amount, as I said before, between 3% and 5% is the average that I consider proper for our needs. Treasury shares. Treasury shares, we are at the limit. We are allowed after the commitment that we gave for the acquisition of the last 700,000 shares, we need the next approval of the shareholder meeting. So in the shareholder meeting, of course, we will ask again the chance to buy, again, treasury stock that we also need for the stock option plan. And for sure, for further acquisition.

[Operator]

The next question is from Roberto Casoni with Otus Capital.

[Casoni Roberto;Otus Capital Management;Partner;Manager, analyst]

A couple of my questions have been already asked. But first of all, congratulations. It's a very good one.

[Paolo Marinsek, executive]

Thank you, Mr. Casoni. I appreciate it.

[Casoni Roberto;Otus Capital Management;Partner;Manager, analyst]

Now I just want to understand a bit more some of the variables in your EBITDA and debt-to-EBITDA targets. I'm assuming that those targets include dividends. And in terms of final debt because the final debt by just putting down the numbers should be between EUR 400 million and EUR 600 million give or take, 1%, 1.5% EBITDA in 3 years' time. Growing 33% from current level is around EUR 400 million EBITDA. And then we get to between EUR 400 million and EUR 600 million of debt. Including in this number, I'm assuming that the results of 3 sets of dividends, say, EUR 25 million each. And also maintenance CapEx, which I can only assume is around EUR 80 million. Can you be a little more precise on which are the variables included in your numbers in your targets?

[Paolo Marinsek, executive]

I'm not sure I understand properly. Okay? [indiscernible] the numbers that you mentioned are...

[Casoni Roberto;Otus Capital Management;Partner;Manager, analyst]

For example, in the. I understand that in net debt-to-EBITDA ratio. What kind of -- I'm assuming that you also include the dividend you will be distributing in next 3 years and CapEx. Do you have a sense of what's going to be the maintenance CapEx and the dividend you will be distributing in the dividend?

[Paolo Marinsek, executive]

Our history is basically growing very little bit every single year so I consider that we will have this kind of stability. And the maintenance Capex is included in the CapEx. So basically, the CapEx is that 3% to 5% that I mentioned before. Those are the numbers.

[Casoni Roberto;Otus Capital Management;Partner;Manager, analyst]

Okay. But those are numbers -- and that's fine. Okay. I know -- I think I understand. I need to [indiscernible] in the numbers and [indiscernible]. Otherwise, I'll call you later.

[Operator]

The next question is a follow-up from Matteo Bonizzoni with Kepler Cheuvreux.

[Matteo Bonizzoni, analyst]

Just one quick question. So you have not elaborated on, clearly, it's understandable in which areas you would like to buy -- or better in hydraulic, you have already built a very broad portfolio, so with this many acquisitions, you have -- now we have penetrated different segments within hydraulic, and now as of late also with these 2 past acquisition of Reggiana and Transtecno and other segments inside this market. Are there any segments, in which we are still not present in which you would like to enter? This is through Hydraulics and also potentially outside Hydraulics.

[Paolo Marinsek, executive]

Yes, absolutely. Yes. You have no idea of how big is this world. And really, we have still some product missing, and so this could be useful to be added to our portfolio. And at the same time, with the history of WALVOIL and Hydrocontrol, you understand also the importance of reinforcing your position in an area where you are already present. And so that even there, we are still looking for additional opportunities.

[Operator]

[Operator Instructions] Mr. Marinsek, there are no more questions registered at this time.

[Paolo Marinsek, executive]

Thank you very much, and I thank you all the participants. Thank you for calling. Bye-bye.

[Operator]

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.