Newlat Food SpA
MIL:NWL
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
5.6
13.16
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Newlat Food SpA
You don't have any saved screeners yet
Thank you, everyone, for joining today's call on the Q1 2022 results of Newlat Food S.p.A. My name is Benedetta Mastrolia. I'm the Investor Relator at Newlat. And joining me today to discuss the results are Angelo Mastrolia, our Chairman; Giuseppe Mastrolia, CEO and Chief Commercial Officer; Fabio Fazzari, Group Financial Director; and Rocco Sergi, CFO.
Before starting, I would like to remind you that this presentation may contain certain forward-looking statements that reflect the company's management's current views with respect to future events and financial and operating performance of the company and its subsidiaries. These forward-looking statements are based on Newlat Food S.p.A.'s current expectations and projections about future events. Any reference the past performance of Newlat Food should will not be taken as a representation or indication of such performance will continue in the future. And this is not an offer to sell or solicitation of an offer to buy Newlat Food Securities.
Now we move on to the actual presentation on Slide 3, where we update Q1 2022 key financial highlights. As usual, we have just some highlights of the key figures. So starting from revenues. We see that revenues were equal to EUR 165.4 million, which is a growth of 7.7% versus the first 3 months of 2021 on the same basis.
So on a pro forma basis, including maintenance from the first of January of 2021. In particular, we had a very good growth in pasta, which grew by 22%; milk, which grew by 5.2%; and the dairy, which grew 27.3%. We also had very good growth in Italy by 7.7% and especially in Germany, where we grew almost 18%.
If you look at EBITDA, it was equal to EUR 13.1 million, which is a slight decrease versus the EUR 14 million of EBITDA in the first quarter of 2021 as well as EBITDA margin decreased and went from 9.1% to 7.9%. This, of course, was expected due to the very ordinary period in terms of inflation and inflationary way about the hitting not only raw materials, but also the production costs, such as packaging, energy, logistics prices and so on.
Despite that, we were actually able to still record very good double-digit margins in bakery, dairy and special products. And in general, we were able to not dilute our EBITDA and our margins in general too much. EBT, so pretax profit was EUR 3.1 million versus EUR 5.2 million in 2021.
If we look at the financial actually, you will see that the -- there is a clear difference in the financial expenses that we had to bear this year compared to last year because, as you all know, we issued a bond in February 2021. So of course, the first 3 months of 2022 saw a higher impact of the financial expenses linked to the volume just -- as opposed to 2021 when we only had a few less than a month left in the first quarter.
So of course, if we sort of exclude that the EBT would have been very similar to 2021 despite the fact that we had all these increases in prices and in cost. If we look at free cash flow, we were actually able to generate quite a lot of free cash flow, which was equal to EUR 9.3 million. And we recorded an EBITDA free cash flow conversion of 82.6% which again, confirms our ability to generate cash from the operating activity.
Looking at net financial position. For this period, we had a pro forma net debt of EUR 42.8 million versus EUR 52.9 million at year-end 2021. So it was a great improvement. And we actually almost went neutral on IFRS 16 net basis. So if you exclude the IFRS 16, the net debt would have been around EUR 4 million versus EUR 13.8 million by the end of the year 2021.
Moving on to the next slide, Page 4. We see just some key messages of this period that we wanted to highlight. First one being the strategic and commercial initiatives and highlights of the period. So in this period, we were able to list make it in some of the important retailers, both in Italy and Germany.
Some retailers already have Naked in stores, some others will see the actual launch of the product in the next month. In the U.K., instead, we actually -- we launched a new product, which is called Naked Ultimate, which is a higher sort of more premium range versus the original Naked range and which has been listed in Sainsbury’s, Tesco, Asda, Morrisons. You will see actually a slide on that after this slide.
In the U.K., again, we also launched the Ragu pasta range. So Ragu used to be just a sauce, tomato sauce brand, but with the -- with our acquisition, we were able to integrate our production from Italy into enlarge the portfolio -- the product portfolio of PR Group brand by launching this past range, which has been launched at Iceland U.K., which will be introduced to more retailers starting from the second half of the year.
We also had a good increase in orders. We've been receiving more orders for special -- for the special formulas for babies, so the infant formulas with the additional new markets around the world. And very last point on the strategic and commercial initiatives is the good growth of Delverde in Germany -- of the Delverde pasta in Germany. That, for us, is a very good signal and it's proof -- actual proof that -- there is no significant Buitoni exit risk, that's what we called it.
So despite the fact that Buitoni no longer exist on the packaging, we didn't see a decrease in sales. We actually saw an increase in the overall sales in Germany. So that's very good news for us.
Moving on to Symington’s. We have been investing in Symington’s in the last few months. We've been evaluating the current state of the Symington’s plans and we have made some investments in order to improve and to work on the efficiencies, especially on the automation side at the plants in order to drive efficiencies and further reduce costs.
Especially important is to highlight that we've been working on re-organisation of the Consett plant. Consett is one of the plants of the Symington’s Group that wasn't as you should utilize as it should have been. So we have been able to invest in the last month in this plant, and we will put it back into a sort of production -- not full production, but definitely driving the production intensity in this plant.
And we expect to actually double the profit by the end of the year 2022 versus last year. Very last point in this slide is about raw materials and the inflation -- and inflation. So as already mentioned, in 2022, we had a general inflationary wave, which not only impacted us but also all the producers in our categories. And it impacted raw materials, but also packaging materials, logistics and other additional costs. And for this reason, we have been working on increasing our price list.
So adapting those prices to the increase in costs that we've been bearing. And we have been able to successfully increase those prices. Of course, some of them will be delayed. So you will see that there's been a slight dilution in margins because, of course, there is a slight delay in the moment to communicate a price increase in the moment those will go into effect.
But in general, we've been really successful at introducing new prices. And we already informed, and we warned our clients that there may be possible new increases in the second half of 2022.
So next slide is Slide 5, where we see the newest product launch, which is the Naked Ultimate noodles. I already talked about briefly. So as mentioned, it's been -- this range has been introduced to Sainsbury’s, Tesco, Asda, Morrisons and more retailers in the U.K.
The difference between this product and the original Naked range, that this product, first of all, is 100% recyclable, which go hand and then with our ESG commitments and the fact that we want to increase our sustainability of our products at stored. So we want to reduce as much as possible the users with any plastics or non-recyclable materials.
And for this reason, these cups are made out of 100% paper and cardboard instead of using plastic. This product, of course, has a more premium positioning versus the original product. As you can see also from the sort of visuals, it's a lot more interesting and it's a lot more premium than the other one -- than the original one. Also, we worked on flavors.
So our R&D worked really hard on developing a flavor that's really rich. And also, the new noodles are a little bit thicker than the original one. So we've made improvements in the recipe there which can be noticed when you eat the 2 noodles, you will see a huge difference. However, this doesn't mean that having richer flavors, we will have to sort of sacrifice health and deem ingredient list.
So we've been really cautiously using all natural flavors and no artificial ingredients. So this is also a very healthy option to all the other noodle brands on the market. This product is also vegetarian. So it is, we say chicken flavor. It has chicken flavor and beef flavor, but it's also -- it's actually just vegetarian. So we use all these spices to sort of recreate the taste of different products, but it's all vegetarian. So it's very -- also understands very eco-friendly because we don't use any meats.
Moving on to the breakdown of the sales. Moving on to Slide 7. We have the pro forma revenues. So as I mentioned earlier, the sales grew by 7.7% versus last year on a pro forma basis. This period was characterized by 2 main factors, which -- the first one being an increase in demand in all the business units, but mainly in pasta, milk and dairy, and an increase in the average selling price due to the higher raw material prices.
We can give more of a light on the month of April, which has ended. We've seen a positive sales growth in this month as well, which is quite similar to what we saw in the first quarter of 2022. As regards to costs, it's just very difficult to talk about a stabilization of costs at this stage, but we have been seeing very encouraging signals of a slowdown in inflationary trends, both in raw materials and other production costs.
So with this in mind, we think that this is a very good signal that by the end of the second quarter, we might be able to bring back marginality to normal levels, what we expected last year. And we expect to end the year with the levels of marginality as well.
Moving on to the next slide, where we have the breakdown by business unit. We can see that pasta sales increased by 22% versus 2021. This is due to an increase in sales volumes and in prices in Germany and an increase in volumes in Italy, especially in the B2B channel as well as an increase in the private label channel in other countries, which followed a higher demand for pasta.
Milk products recorded an increase of 5.2%. This is mostly due to an increase in the average selling price of the products. The instant noodle category saw a slight contraction of 2%. This is not a something that we expect to see in the next quarter. Actually, we expect to see an increase in volumes in general in sales in the second quarter of the year.
Most of the price increases that have been applied will be visible starting from Q2, and this is worth noting that this type of business is very backloaded. So it's more focused on the second half of the year. Therefore, we will be able to see an improvement in the next month.
Bakery products slightly decreased in volumes. This linked also to a shifting of the promotional activities from the first to the second quarter. So we expect to see better results in the second quarter as result of more promotional activities.
Dairy products increased by 27.3%. This is a combined effect of an increase in sales volumes and the average selling price. Our special products remain pretty much stable throughout the period and other products as well remain quite in line with the previous year.
Moving on to the distribution channel breakdown. We see that large retailers grew by 8.8%. This is mainly due to an increase in the pasta segment sales as well as an increase in the average selling price. B2B partners increased by 8.9%. This is due to an increase in volumes but also thanks to the entry of new clients in this channel.
The normal trade channel was pretty much in line with last year's sales. Private label recorded an increase of 8%, especially in terms of volumes. We saw an increase in pasta and in dairy. But also, we also understand that we were able to increase the average selling price. And lastly, we have food service, which remains pretty much stable throughout the period.
Moving on to Slide 10, where we have the revenue breakdown by geography. We can see that the revenues in Italy grew by 7.7% and thanks to an increase in sales and also in the average selling price. Germany recorded a very good increase of almost 18%, 17.9%. This is an increase in the pasta volumes. As I said, Delverde has been performing really well in Germany in the last months, and we also were able to introduce higher sales price in Germany.
In the United Kingdom, we saw pretty much stable situation, so very similar to last year. We expect, however, to see sales and also a profitability improvement in the United Kingdom starting from the next quarter. And lastly, other countries saw an increase of 7.7%, thanks to higher sales volumes and also on average selling price, which is higher than the last year.
Moving on to Slide 11, we have the breakdown of the EBITDA by business unit. So EBITDA, as I said, was EUR 13.1 million in the first quarter versus EUR 14 million in 2021. This, as mentioned already, is sort of an effect of the higher raw material prices and production costs that we've been incurring. Despite that, we were able at group level to reach a very small dilution in profitability and that was thanks to our portfolio diversification, the industrial efficiencies that we've been able to put in place and also the very good brand positionings that all our brands have in all the different countries.
In particular, we want to highlight here that we were able to -- despite the decrease in sales, we were able to increase special products. EBITDA margin, which is sort of a byproduct of the fact that we've been selling more high added value products versus last year. So we've been selling more special, especially infant formula products, which are added to our EBITDA margin.
And in general, we're really happy that we've been able to maintain pretty good and high EBITDA margins in bakery, which is almost 13%; in dairy, 14.6%; and special products, which is 11.5%. This is very good results despite the increases in raw material materials, especially if we think that bakery, for example, was slightly impacted by the raw material crisis. We had dairy as well and special products as well. So they are all -- we were really good in managing these prices.
Moving on to Slide 12. We have the free cash flow. Here, we can see that free cash flow for the period was EUR 9.3 million. In the first 3 months, we were able to convert into cash around 82.6% of EBITDA. And this is really a good result if we consider that we had an increase in the interest costs and the financial expenses as a result of the bond issued in February last year.
In general, we've been really diligent at managing and -- efficiently managing the net working capital, which gave a positive contribution once again. And in general, we can say that we've spent CapEx to further be reduced in -- on a yearly basis this year versus last year. So that is also really important for us to keep a very healthy free cash flow generation.
Lastly, we move on to the last slide, which is Slide 13. We are giving you sort of an outlook on 2022. Again, we are reiterating what we said 2 months ago. So the first month of 2020 have been characterized, but this inflationary wave, which has impacted all businesses alike in our sector. And of course, the war in Ukraine and Russia has been impacting not only businesses, but life in general.
And despite this very challenging environment, and we feel that by the end of 2020, we will deliver a low to single -- low to mid single-digit organic revenue growth. We also confirm that we expect a stable profitability and a good cash flow generation and enough cash flow generation to drive the group back to net cash position.
We see that in this period, we were actually able to almost go back to a neutral position. So we definitely expect to go back to a net cash position. And we reiterate the fact that we have negotiations in place, which put us in the position to confirm once again that our aim by end of year to get to EUR 1 billion of consolidated revenues, which are, of course, pro forma, including the 12 months revenues of the target, and this will be performed by the end of the year.
Okay. So now we can move on to the Q&A. [Operator Instructions] So thank you.
Can you hear me?
Yes.
I have a few questions, just want to start with. First of all, during the presentation, you have mentioned that the efficiencies you are implementing at Symington’s, reorganization at the Consett plant. So my feeling is that you are probably a bit more confident or, let's say, at least starting the implementation now of this plant whilst in the previous call, it seemed that the inflationary environment has been driving you to postpone EBITDA, the investments needed to achieve these efficiencies. So did I got it right last time or instead there's actually more confidence from your side now?
Are you maybe able to get these efficiencies a bit earlier? And how could this help for profitability for the current year. Still on this -- on this point of profitability for the year. In fact, you are confirming your guidance of stable margins in spite of -- from what we understand, a weaker margin in Q1 and an evolution of the inflationary environment, which has gone further since your previous guidance. So I'm wondering whether we should take this indication of stable profitability as applicable just for the second half, what was the meaning of the sentence?
And in any case what -- I mean how are you -- what kind of attitude are you seeing from your customers from especially larger retailers with the price increases you have been applying and the farther that you are anticipating for the second part of the year.
Maybe last question instead is about the pasta segment, actually, which is the only performance in your among your segments, which is a bit positive for me because we have seen a strong acceleration in volumes that you have commented, mainly driven by the German market, but also by Iceland. I see, however, on the other side, that profitability in this quarter has been a bit weaker than we saw in the fourth quarter. And this is even a bit more surprising to me because actually the inflation trend in -- particularly in durum wheat started even earlier. And so I thought of is was a bit less meaningful now as a problem in terms of cost for you. So what is behind this weaker performance of pasta both year-on-year and also in comparison to funding level.
Thank you, Paola. So starting with the first question on Symington’s. We said during the full year presentation that some investments would be postponed, especially the investments linked to the automations for plants that are already working well but could gain additional profitability through automation. For Consett, the situation is different because Consett is a plant that was focused in the pasta to particular set of recipes and products. For example, it was and is still the plants that we have that is producing products for the Ministry of Defence for the U.K. Army. And with several bottleneck in different parts of the production side.
What we made are several investments to try to transform part of the production of Consett to more interesting products in terms of profitability than the Ministry of the Defense, especially on the B2B side, we already got interesting contracts. We substantially are going to double revenues this year, consider to last year generated around GBP 6 million of revenue, GBP 6 million. This year, with the orders that we already get, we are a bit above EUR 12 million.
And this is the reason why we accelerate these investments because our investments that we can cover, substantially, we can get the return to cover the investments in a bit less than 12 months. So it's a different type of investments than the other plant that we have for the other plants in U.K., and this is the reason. And we expect to have a good positive contribution also from Consett this year in terms not only of revenues but also in terms of EBITDA.
About the general question on profitability. I think that what is different versus the scenario that we described in December before the start of the year. And also in our latest call is that the scenario in Q1 was characterized by a continuous increase of prices for -- not only for raw material, but for everything related to the production. And you know that it's not possible to negotiate with the retailer every week, the price increase. This means that we needed to manage the buffer that we created at the beginning of the year with the first negotiation.
And what is key in our message is the new price increase that we plan for the second half of the year because we got the opportunity to negotiate every 6 months. And obviously, if the situation remains like the scenario that we had in mind at the end of 2021, probably this second wave of price increase would have been necessary because we were already at the [indiscernible] level of profitability. Considering the scenario that we experienced in Q1, we already planned this new -- the second round of price increase to cover substantially the buffer that we need after this new increase that we experienced in all the production cost.
What we are seeing now is not a change of direction, but a reduction of the intensity of the inflation trend, and this is important. We believe that the new harvest season for -- on the raw material could play in a positive way for us, and this is obviously positive because what we have also to consider is that we believe that with a stabilization with the second round of price increase, we could get the similar margin of last year. We have to consider that when this really strange and exceptional wave of inflation will finish.
The same delay that we experienced in terms of price increase, we could experience the same in terms of review of pricing linked to the decrease maybe of the raw material price. So it's a game in which now you are giving something and you should recover in a second period of time. What I think is important to highlight is that if you analyze the performance in terms of profitability, we have been able to realize a good increase and a good performance in the sub sector in which we have a strong brand and value-added product.
In area like milk in which we have a strong brand, but obviously, milk is milk, nothing particular different than other products. We have been able to realize a very small dilution versus what happened in the milk market, and this tends to the positioning of our strong brand. And for this reason, we are really happy considering the really strong storm that we experienced in Q1. We are very happy about the performance. And for this reason, we are confirming the expectation for the full year.
Speaking about pasta, pasta is experiencing a very strong trend, especially in Germany. And I think that this is positive, not only for the economic impact in this quarter, but because it substantially canceled any schedule about what could be the situation after the exit of Buitoni from the German market and the result is really strong and encouraging because we didn't experience any kind of weakness related to the change in brand there. With the packaging very similar to the previous Buitoni one is performing very well, and we substantially anticipate also the skill to a single brand because in reality, we could maintaine the dual branding also for this quarter, but we decide accordingly with the retailer to anticipate that because the demand for Delverde was already very, very strong.
In terms of the profitability, the profitability was impacted by the fact that first of all, in Q4, we continue to benefit from our contract in Germany for durum wheat, that was a fixed price. While in Q1, we started to adapt also that part of the raw material to the new price into the market. And this substantially is the main impact that we experienced in Q1 and also the fact that in some cases, we have to face additional change in terms of pricing, in terms of agreement that we need to take a new agreement to cover the needs and to accelerate maybe in some guys in some cases, the buying of the needs for the first half of the year.
We are absolutely confident that with the new acquisition, especially considered that this year, there are more field dedicated to durum wheat. Also the basis of the return that they are experiencing with these level of prices. The scenario in the second half could be different than the one we are experiencing now.
Arianna Terazzi from Intesa Sanpaolo. Can you hear me?
Yes.
Okay. A couple of questions. The first one, I would ask you if you could elaborate more on the increase in volumes in dairy products. And if it is a kind of a seasonal effect. And if you -- the second one, if you could provide an update on the M&A activity besides the negotiation unknown that would allow you to reach EUR 1 billion revenues.
Yes. About the dairy product, we experienced a good performance, not only in volumes, but also if you see also in terms of profitability and this is related to substantially new demand, new contract. The recent seasonality effect, to be honest, the Q1 is always one of the -- is always the weakest quarter into the year because we -- generally is usually weak for food and especially this year with the Easter in Q2, I think that the seasonality in Q1 2022 was playing substantially a negative effect. So the dairy performance is real performance related to volumes and to new contracts.
About the M&A, we can confirm what we explained during the full year results conference call, we are in negotiation with multinational corporation for an important deal in a new category. We are reviewing some documents, and we substantially can confirm you what we mentioned in the previous call.
So the fact that we believe that in the second half of the year, we can substantially close this deal. Unfortunately, I cannot share additional details because now the situation also considering the phase in which we are. It's really important to avoid any kind of issue because also the other counterpart is listed, is a very big company, and we want to avoid any kind of potential issue because we are going on very well, and we are very happy to try to get this transformational opportunity for our group.
[indiscernible] some questions.
Yes.
Apologies that I wasn't able to dial in before. My first question is on the 7.7% growth that you announced for the quarter. Would you be able to split the contribution between price and volumes? First -- that's my first question. Second question is, I think, if I didn't get it wrong, you managed -- you said during the presentation, you managed to increase prices pretty much everywhere, but in the U.K. Is that correct? And if that's the case, why the U.K. wasn't able to receive higher prices?
And then in terms of Symington’s performances and what you said in terms of the success that you have achieved with Naked. Is there any contribution from Naked or any other Symington’s products that have been listed outside of the U.K. in the Q1 figure? And at the same time, is there anything that you might have achieved in terms of Newlat's products sold in the U.K. that you can share with us?
Thank you, Doriana. So in terms of the 7.7% growth reported on the top line, it's equally split between volume and value. Obviously, it's different category by category. But generally speaking, and this is what we could share is 50-50. In terms of the U.K. and the impact on the price increase, in reality, we already made some price increase in the first -- sorry, in the last quarter, the third quarter, in particular, of 2021. But for what I explained before, so the fact that the inflation wage was really, really strong, amazing. This buffer that we created, obviously, is not enough.
And in the U.K. budget, we have and we'd be visible in the second quarter, the impact of the price increase that are mostly concentrated in the second quarter of the year. And this is a decision that has, in particular, 2 explanations. First of all, in U.K. is working different than Italy. You have to negotiate, explain, justify in several meetings and you need more time to get the agreement, but the application of the price increases.
Secondly, you have to manage the price increase, the launch of the new product, et cetera. So obviously, there is a strategy that is full of different aspects, marketing cost, introduction of new product, et cetera. So the balance of these -- all these things together create this situation in which we are going to -- not we are going because we already saw in April, a double-digit growth in revenues for Symington’s. And this obviously is linked to the price increase that was -- that started. There are no other particular reasons, but it's a matter of market and a matter of other initiatives that you have to combine. But we are very confident in U.K.
As Benedetta said in the presentation, the budget of U.K. this year is back-end loaded for several reasons for the launch that we plan of the new products for the impact of the price increase and also because the comparison base in Q1 was very strong because Q1 last year was strong for several reasons related also to the different profit time, but also because last year in Q1 was a key quarter for the selling process of the company.
And you know better than me that when you have to substantially to approach a potential buyer of the company, you have to show the best situation you can have. And this is the reason why last year, we had substantially the reverse of the performance that we expect this year. Last year, the first half was stronger than the second half of this year in a normalized situation, we expect substantially the reverse.
But as I have said before, we are very, very confident on the U.K. performance. U.K. is a very trumpet for our group because the company is full of expertise, products, recipes, industrial know-how. There are a lot of things that we can develop in the future. And it's very exciting, the situation. And U.K. market is also an interesting market to -- for a commercial development also for other products.
And answering to your third question. In Q1, we don't have any kind of material contribution from the new launches in Italy of the U.K. products and in the U.K. of the pasta. But going forward, during the year, we will start to see the contribution from these initiatives. Obviously, this year is a year of development in the sense that we are also dealing for new contract also in the B2B with the retailer in the U.K. But this kind of deal is a deal of 6 months, 7 months between the beginning and when you sign the contract, you start to produce for this retailer. And this is the reason why we believe that considering what we have on the table today, next year in terms of U.K. initiatives could be a better year because we can received the contribution for several initiatives on which we are investing now.
If I can add something concerning the commercials maybe. Or Doriana, do you want to say something? Maybe you were asking...
No, no. Giuseppe. Yes, I do have a follow-up question, but please go ahead, and I'll ask the follow-up question later.
What I would like to tell is that the experience that we are making now, of course, we acquired the company from August and then we have the start-up process. And -- but now we are really on board with the new -- with the current into this, now in Symington’s, we established a really great team starting from the CEO and all the management. Now the new team is really confident, they are really committed to the business. We are working daily on new opportunities. And concerning pasta to give you just an example, now we are in deal with 2 big retailers in the U.K. to do them private label because U.K. is mainly the private label market.
Imagine that, for example, Barillas a share of -- from 3% to 4%. So brands are not so important like in Italy or in Germany, but we are experiencing now in the short term, the possibility to be the partner of one of the big 4. So we're talking about Sainsbury’s, where we talk about the potential production for them of 18,000 tonnes of pasta. And then, of course, the biggest, the #1 that is Tesco Express. Tesco, the big stores and Tesco Express as well when we talk about the potential business of 44,000 tons, but this will be seen if we can gain it in September. Why? Because they have, let's say, session of listings. And so we -- now we're already talking about the retailers and it depends every retailer when they have the session of listing available for their own private label.
What I can tell you is that the news that there is a new pasta the supplier in the market is really well recognized and welcome from the U.K. retailers because now U.K., as you may know, there is no pasta producer locally. And the other companies, the competitors, they do not know one of them have a structure in the U.K. like we have now with Symington’s. So on my too much positive opinion, I think that we can gain a good market share in private label and in brand as well in short term. But of course, we need the time to make all the assessment, we can -- it can take around 12 months.
But I think that we will be really a big -- we can take a big share in the U.K., thanks to our commercial team that is there and our production capacity that I always remind that it's full of all the products, gluten-free, low protein differentiates lasagna sheets. So we produce everything compared with our competitors. We do not have to ask to no one else to produce for us any product. So this is an advantage compared with all the peers.
Okay. I think my follow-up question is coming back to the contribution between volume and value. I think Fabrizio said that there was a different situation across different categories. I wonder if you can give a little bit of more color in terms of how prices and volumes might have changed across the different categories, please?
We can say internally because there is also -- the reason why we don't disclose this particular detail is also -- there are also commercial reasons. But generally speaking, I can tell you that on pasta and dairy, there is substantially that impact of volumes. And in the other categories, we have mainly impact in terms of value.
Yes. But one thing that I want to tell you in the long term, high volume on pasta can improve our -- so improve, let's say, improving our fixed costs, the volume on pasta can improve our contribution margin on a long-term basis. I don't know if you understand what I want to say.
Yes. Giuseppe is referring to the fact that in pasta is one of the area in which we have spare capacity and this strongest step forward could allow us to receive from volume, a similar benefit than a value contributions.
Concerning the launch of Naked, if I can tell you something else, it's just in Italy. As we said, we had this launch in the main supermarkets, these are Coop, CONAD and the [indiscernible]. Of course, it's taking a bit of time because now with the storm of price increases, it's really hard to list new products. But meanwhile, we are ready in [indiscernible] and you can find the product inside the stores. We are making the first 2 promotions. So the products start moving on and to show itself out of the shelf. So -- and we listed in both CONAD and Coop.
Of course, the distribution, as I told you before, is going a bit slowly. Because in this period, really talking about as they have all this price increase to manage talking with the new products with the buyers really have, we made a strong presentation, and the product is really well recognized.
In terms of marketing, we saw that the target needed is really low age. So we are talking about 13, 22 years old persons, and we will make -- we will execute some dedicated market initiatives of testing and sampling in front of school, universities to let the people taste our products. This is really, really good. All the team in Italy is going forward to support the launch of Naked. And then as a trade part, we -- they are all really -- there is a lot of enthusiasm. Is this correct English?
Yes.
Concerning the launch of Naked everywhere. So I am really confident that could work really good.
Just a quick follow-up, sorry. About Symington’s, just to have a bit more of detail, when you confirm your guidance for stable profitability for the year. Do you think this might apply to both at organically, let's say, and Symington’s? Or should we imagine a different path for the 2 segments, let's say?
I want to say that the indication is for the consolidated figure. Obviously, there are different store inside for Symington’s what we said we expect to anyway, reach an improvement year-on-year versus last year.
Can I just sort of confirm that the guidance is for EBITDA margins to stay stable and not for EBITDA to be stable in the full year?
Yes. The margin -- the indication is for the market, not for the absolute number.
So if there are no other questions, we can close the call, I think. Benedetta, do you have other questions written?
No, I don't see anything unless let me just check. No, I haven't received anything. So I think that's -- or unless someone else wants to ask something now, we can end the go. We have -- we're at you disposal for any further follow-up questions, send us an e-mail or call us, we're available for further information. So thank you, everyone, for joining today's call and have a nice evening. Thank you.
Thank you.
Thank you, all. Bye, everybody.
Bye to all.