Okay. Good afternoon, everyone, and thank you for joining today's call on the first quarter 2021 results for Newlat Food. I'm Benedetta Mastrolia. I'm the Investor Relator at Newlat. Joining me today to discuss our results are Angelo Mastrolia, our Chairman, Giuseppe Mastrolia, Deputy CEO and Chief Commercial Officer, Rocco Sergi, CFO, and Fabio Fazzari, Group Financial Director. This is not working. Okay, good. Before commenting our results, I would like to remind you that this presentation may contain specific statements that neither report the financial results nor other historical information. Any forward-looking statements are based on Newlat's current expectations and assumptions of future events and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied by these statements. We're moving on to the first slide, which is the key messages. We'd like to start off by highlighting some key facts for this first quarter. The first one is that we had an excellent bottom line performance. We had a positive increase in net profit, and we also managed to improve overall profitability and free cash flow generation. In terms of sales, we actually had, despite there was a decline, which was previously expected, we were able to actually exceed expectations, both at analyst consensus level, but also at looking at our business plan budget, we were able to exceed those expectations. We can say that we had a very good first three months of 2021. Another key point to highlight, which we get asked on a few times, and the last call was the Kraft Heinz contract renewal. We can confirm that the Kraft Heinz contract was renewed. We signed an amendment in the last couple weeks, which extends the current co-packing agreement for the baby food and special products for another three years, until the end of 2023. This new amendment actually implies better economic conditions for Newlat and also will impact the profitability in Newlat Food. It's extremely important result that we got in terms of this particular contract. Looking at the strategy and market overview. 2021 strategy for Newlat would be to keep the current positioning. Last year, as some of you may know, we had an enormous increase in sales because of the COVID lockdowns, stockpiling. What we've done this year is trying to keep the current market positionings and trying to focus on new product development and products that can actually enlarge and improve the product mix. We are trying to keep the promotions low again. It's really working on those new products and trying to keep margins high. We launched some products successfully. Last time you saw some of the products that were about to be launched in this month, and they will be launched in the next month. You'll see later on some pictures that will be done in the last two months. Another point that we would like to highlight is that this year we had to sort of reposition the shelf-stable products. Basically UHT milk and products like pasta and bakery, which are shelf-stable and which had an increase last year because of, again, of the stockpiling. This year, we're going back to sort of historic baseline levels. If we move on to page four, we have the key financial highlights. If you look at revenues, we had EUR 121.5 million in revenues, which is a decrease of 4.6% versus last year. We look at the pro forma data for last year, which includes CLI and Newlat on an aggregate level. Again, as I mentioned earlier, we actually had better results versus the analyst consensus and the budget expectations. We had a very good growth in dairy. We actually grew 30% in dairy. Despite the actually really difficult comparison base for the first three months of last year, we actually were able to even further improve this particular business unit. We also look at gross margin, which remained at the same level of 2020. Despite the decrease, we were able to work on the bottom and on the lower lines and to really work on the profitability and margins throughout the whole net income. In terms of EBITDA, we look at the EBITDA for 2021, which was EUR 11.04 million, which is a slight decrease compared to last year, but the EBITDA margin was actually a lot higher, it is 9.1%. Last year was 8.8%. In terms of net income, instead, we were able to further improve this. Again, despite the decrease in sales, we actually had a very good net income, which grew 2.4%, which went from EUR 3.1 million to EUR 3.2 million. If we look instead at free cash flow, we generated EUR 8.8 million in free cash flow, and we had an EBITDA free cash flow conversion ratio of 75.1%. This again confirms our ability to generate cash and to altogether improve the net financial position, which also improved, actually basically doubled. We went from EUR 5.2 million at the end of 2020 to EUR 11.8 million at the end of March 2021. If we look at it without the IFRS 16 lease liability accounting standard, we can actually say that net financial position would be positive by almost EUR 30 million. We had also an enormous improvement in this particular figure. As I mentioned earlier, we just wanted to show you some of the products that we launched in the last couple of months. This one, which wasn't actually a new product launch, but it's just us trying to expand the business for Pezzullo, especially in Italy, which Pezzullo, before this year, was mostly based on the export market. Now we're trying to really push into the Italian market as well. We were able to stock this at all supermarket around Italy. Most big pan supermarkets have Pezzullo pasta now. Also in [Auchan] was in the Liguria region and some other smaller supermarkets. This one we saw last time, actually, it's the Mukki Special Donna, which is the special milk for women. We were able to launch it a little bit ahead of time, in April. Here you just have a picture of what it looks like. Again, I guess all the other Mukki products. Bifetta as well, we're just showing you some more pictures. Bifetta is the pre-portioned rusks that we launched actually in the second half of 2020, but starting from April 2021, we launched it into the major supermarkets in Italy. Here you just have an idea what it looks like on shelves. It's very visible on shelf and even I would say the design is really nice compared to the other products on the shelf. It really stands out. Also one thing that I'd like to mention is we'd actually run some marketing. We did some research, and the consumers are really happy about the product, and they like both the fact that it's pre-portioned, and it's easy to eat out of home and also at home. Also the product itself has been getting a good recognition. Now we move on to the Q1 2021 sales breakdown and analysis. On page nine, we have an overview of the revenues. Here, as I said earlier, we actually had a better-than-expected performance. Of course, Q1 2020 was a particularly difficult comparison base because of the stockpiling, because of the panic buying, because of the lockdowns that happened last year. One thing that impacted last year is that last year we only had a lockdown starting from March, which didn't affect all the food service and the normal trade channels. This year, of course, we had more widespread lockdowns all over Europe and throughout the world. Of course, that also was not a good start of the year. Of course, we were able to really perform really well, and we increased some of our marketing and store activities versus last year. We kept really good profitability, as you saw in the figures. If we look at Q1 2019, pro forma with CLI, we can see that we actually had a very good performance. We actually increased revenues by 2.4% versus 2019, and we can say that we have a CAGR of 1.3%. This is to say that although last year we had an exceptional growth, which some of you may have thought was not sustainable, we were actually able to keep a good level of revenues that were generated from the lockdown. Even if we look at EBITDA, you can see here that we actually increased really considerably from €7.8 million to €11 million in EBITDA. Again, we can say that overall, we had very good results. If we move on to page 10, we have the revenue breakdown by business unit. In general, this period saw a slight decrease in consumer spending versus 2020. Again, of the lockdowns that were impacting 2020, this year, there was sort of a stabilization in terms of large retailers especially. There was a lower traffic in big supermarkets. If we look at pasta, this particular business unit, which last year increased considerably, remained pretty stable. This means that despite the high increase last year, we were able to keep those listings throughout 2021. This for us is a great result. It's showing that our commercial team has been working really well with our clients and has made all the commercial efforts in order to keep those listings and to perform really well. In terms of milk, this particular business unit decreased by 10.7%. This was both the impact of lower sales volumes and also lower sales prices. Again, this is against the 2020 lockdown and stockpiling and pandemic breakout. Bakery also decreased by 5.9%. This is an overall drop in the market in general, but also we saw a decrease in the private label sales for the bakery sector. Instead, if we look at dairy, this grew by 30%, almost 29.6%. This is mainly linked to the increase in mascarpone sales. Our team really worked on the relationships with our customers, especially in Italy, France, Eastern Europe, and Benelux, where we've been able to increase our sales and our products are getting more and more recognition. We're really happy that this particular business unit is doing so well despite all the increases that it saw in the last three, four years. Special products remain stable, there isn't much to talk about in this particular business unit. Other products decreased by 7%. This, again, is a consequence of the restrictions that affect restaurants, bar, and out of home eating in the first three months of 2021. Moving on to page 11, we have revenue breakdown by distribution channel. If we look at large-scale retail distribution channel, this went down by 1.4%. B2B partners channel also decreased by 4.5%. This is a consequence of a decrease in the average sales price, which is linked, however, to lower raw material prices and stable volumes. I'd say there's a double effect on this one. In terms of normal trade, we had a decrease of 17.9%, again, linked to the lockdown period, which made this particular channel suffer more than others. We look at private label. Private label also decreased 8.3% compared to the previous year. Again, this was in sort of a stabilization effect from last year, and food service also decreased by 5.4%, again linked to the lockdowns all over Europe. If you look at geography, we have pretty much the same weights in terms of geography, we didn't see sort of an increase in particular markets versus others, or decrease in some particular markets. Italy decreased by 5.3%. This is mainly linked to the milk decrease because of Centrale del Latte d'Italia, which is basically our main business, which is milk. We saw a decrease in those products, especially as a mixed effect of prices and volumes. In terms of Germany, this decreased by 5.2%. There were volumes in pasta and bakery sales. If we look, however, at 2019 sales, Germany saw an increase of 9%. Again, although there was an overall decrease, if we compare it to the 2019 results, we can see that this is just a normalization of volumes and it's completely expected and normal to see these numbers. Other countries remain pretty much unchanged. There wasn't much of a difference versus last year. If we move to EBITDA margin. Here we see another EBITDA margin, an EBITDA breakdown by business unit. As I said earlier, the EBITDA margin actually increased by 0.3%, so we went from 8.8% to 9.1%. This is again, a confirmation that we're really working on keeping margins high, and overall profitability high. The pasta EBITDA actually went from EUR 2.25 million in 2020 to EUR 2.006 million in 2021. This is, however, a very exceptional increase if we look at the 2019 results, in which we had EUR 1.8 million in EBITDA. Milk products also is pretty much in line with first quarter 2020, however, the margin increased to 10.1%, so this is linked to a better procurement policy. EBITDA related to the bakery products decreased as a decrease in sales volume. It was a consequence of the decrease in sales volumes, the margin was 13%, a bit lower than last year. I would say one thing to add is that the first quarter is never the most, I would say, brilliant quarter in terms of performance. There is definitely margin for improvement in the next quarters. Dairy products also, this one actually increased because of the good increase in sales and it's also an increase in margin, it went up to 15.5% versus 15.1% in 2020. That special product segment also decreased due to the greater push in terms of promotions, and EBITDA margin was 10.2%. The other products segment remained pretty much unchanged versus last year. Now we have a look at the net profit figure. As I mentioned earlier, despite the overall decrease in revenue, we were actually able to improve net income versus 2020. We see here in the circle that we had EUR 3.155 million in net profit versus EUR 3.080 million in net profit last year. We grew 2.4% in this particular figure, and of course, this was also impacted by lower financial expenses and a decrease in taxes. This is the overall result if you look at the other lines. Just distributing our cost and expenses in a different way that would benefit us in general. In terms of EPS, if we look at it's pretty stable versus last year, so it's EUR 0.06. Now we look at free cash flow and net financial position improvements. Here we have the cash flow statement with the free cash flow figure excluding M&A. Again, this confirms the strong cash conversion of the company. As you see here, we made EUR 8.8 million in free cash flow. The EBITDA free cash flow conversion post-tax was 75.1% at group level. We had a further improvement of the net financial position, which basically doubled. It went from EUR 5.2 million at 31st December 2020 to EUR 11.2 million at 31st March 2021. We also had a positive contribution of the net working capital to free cash flow, as you see here. Despite the very strong performance in 2020, we still had an improvement in this particular figure. Now we move on to the last slide, which is the key takeaways for this call. The first one is that the management's really confident that the vaccination campaign and the slow reopenings will give a positive environment for the food service to recover and to sort of normalize the modern trade volumes. This gives us hopefully a better performance, at least in those particular segments. New product development and innovation. As you saw, we launched some new products. We have other products soon to be launched, which will be probably launched by the end of June. Some of them will be launched in the second half of the year. Those products are really value-added products that we're trying to launch. We expect these products to improve the product mix. We look at milk and dairy aggregation. We are likely to see the milk and dairy lease to deliver better, I would say, improvements between Q3 and Q4 of 2021. In terms of M&A, we confirm that the company is involved in three important and strictly confidential M&A processes, which are in Italy and around Europe. The very last point is on baby foods and development of this particular segment. With the Kraft Heinz contract being renewed and the new contract that we signed last year, we are hopeful that we will be able to see a gradual positive contribution of these contracts starting from the second half of the year. This is mainly it. Now we can open the call for questions. I think I saw some questions popping in, so maybe I can close the screen, and then we can move on to the questions. Thank you. Okay. Okay, there's a few questions coming from [Dario Micci], I believe. I don't know if, [Dario], you want to ask them yourself? Can you hear me? Yep. Yes, we do. Sorry. I'm afraid I'm not able to switch my monitor on because to a PC from the office which hasn't the webcam. The first question is on the operative leverage. I saw volumes went down in Q1, but margins were up. It's quite surprising, as a trend, how were you able to reach this goal? The second question is on M&A. You mentioned three potential targets. Could you please give us some update on this? In the latest call, you were referring to two options on the table. On the milk price, we saw press articles referring to the dynamic of the situation with potential claims from the farmers about the dynamic of the feed for cows and the low price on the markets. Are you experiencing some kind of pressure in this direction? Do you feel some clue here and there trying to point to an increase in the milk price? Thank you. Thank you, [Dario]. About the first question relating to the operating leverage, it's important to highlight that what we put in place in the first quarter is a particular focus to increase the quality of our revenue base in terms of the mix contribution, the profitability contribution from the single products. Since we get a lot of important positioning in the past months, we want to consolidate this position. We avoided, for example, to participate to some aggressive promotional activities because we want to have in our portfolio a better contribution in profitability for a single product. This is the reason why, together with all the other positive contribution coming from the integration and the synergies of CLI. This is a most important point that create this positive trend in terms of gross margin. You see this similar trend also in EBITDA and in the EBIT. About the second question on M&A, I'm afraid that it is really important for us at this stage of the negotiations not to share nothing, because we are seriously involved in three process, and we need to maintain sort of confidential informations to avoid to start with speculation or other maybe article or something that could create a damage in our negotiation. I'm afraid, at this stage we decided to be very, very cautious because we want to go on with this process. What I can tell you is that one of these is really advanced, and this is the reason why we are confident to close at least one of these three by the end of the year. The third question on raw material, I have to say that, as we already explained last time, we experienced some movements, especially on the wheat side, starting from 2020, the second part of 2020, but nothing special. We are not experiencing any particular trend that could create a material impact so far on our income statement. Maybe [Paula] will- Hi, everybody. I have a couple of questions. The first one is about the stronger uplift in dairy revenues. You mentioned fast growth, significant growth in mascarpone. I was wondering whether this is related to the agreement you announced with Amazon for the supply of the Amazon Fresh business, and if so, should we be aware of any specific impact in this quarter, which might maybe normalize in the following month? How should we read in this buoyant growth, which seems a bit exceptional, let's say. Second point is about what you mentioned for the Kraft Heinz contract. Is it possible for you to give us some more color on the meaningful benefit that you are expecting from those new economics of the contract? What could we see in terms of revenues or margins for this business? Thank you very much. Thank you. About the trend in dairy, is not particularly related to the Amazon project, is a trend related to the normal business. There is also an impact related to the fact that we got this year the Easter in the first week of April, and this is a category that is sensible to this kind of holiday or situation. It's fully related to normal business, no particular action or particular contract or specifically this Amazon initiative. About the Kraft Heinz contract, we didn't disclose any quantitative element because obviously there is an agreement of confidentiality, because the information are really sensible in terms of on the commercial side. What I can tell you is the agreement, we highlighted the positive impact of the agreement, because it's not just simply an agreement for a price improvement or a price increase, a general price increase. Is an agreement with a structure equation that is really important because it's creating a better development of the profitability of Newlat inside the contract. Also there are also other points inside the agreement that create an additional protection on our profitability, also thinking about a potential volatility of volume. We achieve a more structure contract with a material improvement that we will achieve starting from the second part of this year on our profitability. You will see the number, but unfortunately, I can. I cannot share with you more because we have this confidentiality agreement. Thanks. I believe these two questions come from Gabriel Colominas. I'll just read them out if you like. The first one was: which is the strategy in private label? The second question was: what is IFRS 16 CapEx, and where is this coming from? On the private label strategy, I can give an answer. During this period, we want to support our customer with some private label. That's what we are running. We are managing some good new private labels in 2021 in bakery and some other products that can give us a good marginality as well. We do private label where we find the opportunity to reinforce our relationship with the customer. The strategy is to avoid private label where we can improve our impact in the brands as well. Which was the second question? Yeah. The second question was: what's the IFRS 16 CapEx, and where is this coming from? Yes, the IFRS 16 CapEx is a definition for sort of contributions in terms of investments that you do every year to have this right of use of the asset. Trying to be more clear with you, when you calculate the free cash flow, starting from the EBITDA, this EBITDA is higher than the normal one because includes the fact that you don't consider the cost of rent, of leasing, and this obviously must be factored in the free cash flow calculation. What you see in the table is the portion of cost of leasing, cost of rent, that you have to eliminate from the EBITDA to calculate the real cash flow that the company achieved. Perfect. I was asking that because when you take the numbers directly from the cash flow statement, you get that the free cash flow is about EUR 9.8 million, with the last figures of the quarter. It's EUR 1 million higher, which is significantly for Newlat, if you take just the numbers in the cash flow statement. That's why I was asking that. Okay. Yeah. About the first question, on private label, was Centrale del Latte was doing some private label before, or is doing some private label now, or it's not related? Any of the activities of the Centrale del Latte is related with private label? What do you mean, sorry? There was some private label activity in Centrale Latte? Yes, there were some private label activity already done, but as you may know, our focus was always on our brands. As our relationship with the customers is to achieve new customers and new markets and new goals, maybe if we find the opportunity to start first with the private label and then afterwards with our brand, this could be an opportunity. It's a door where you can start a dialogue with the new customer, maybe in some countries where we are not so strong, maybe are a bit weak or something like this. Okay. That was the strategy, more or less. This always improve the relationship with the brand as well. Our strategy is this. One final question. There is no expected policy in terms of KPIs for 2021, right? There's no information about objectives of sales and everything, or I don't remember if there's one. No, we are up compared with the budget, as we said. No, we don't have KPI fixed. Perfect. Fabio, if you want to give more light. No. Are more linked to the general development of the profitability and the return on capital. Yes. Not simply to the volumes or to the revenues. Okay. This also because, as you know, the history of the company and the strategy of the company is linked to M&A. There is a big focus on M&A. Yes. For this reason, it's really important to consider the value that you are able to create in the aggregation despite the single volume of the size of the business, because this could create confusion when you add company every year. For sure. Do you plan to publish the ROIC, the return on invested capital, on a yearly basis? Yes, usually we do. Okay, perfect. Thank you very much. You're welcome. Hello, it's Victoria from SocGen. May I ask a question, please? Yes. Hi, Victoria. Thank you. Hello. My first question is on pasta. You talk about higher promotions. I just wondered if you expect continued high promotion activity in the second quarter, or whether there was some pull forward of promotions into the first quarter. Equally, we were wondering whether you'd be able to comment on the initial customer reception to the Buitoni packaging, since Delverde has been added. Then my second question is on input costs. Just wondered if there was an update on any of the farmer contracts to secure milk prices. Thank you. On the first question, if you want, Fabio, just a quick light on the fact that the difference between last year and this year in term of promotion, Victoria, is that last year there was no promotion at all due to the pandemic issue. The price was sold full price everywhere. We started with, let's say, normal promotional campaign as always we always done in the past. Let's say, not so much pressure on promotion compared with the normal year. Last year, the sales were done without any promotion in relationship and in a link with the supermarket chains. Okay. Thank you. Maybe, Giuseppe, you want to give an update also about Buitoni Delverde, the introduction of the- Yes. This is really positive on my side. The introduction started. We were starting with 22 to distribute the product, and so on all over the German market, we have some feedbacks on our customers that are really happy. They're really appreciating our new strategy because they see Delverde more potential and a new opportunity for the consumer and for the market to develop and to have a brand awareness and brand development. They see in Delverde more potential than in Buitoni because it's a more new, more healthy product. The fact that we can build up our own product structure, to be able to complete our portfolio with some other products that could be shelf-stable, or related to the pasta brand, makes our customers really happy. Now we ensure with the three main customers of Germany. Germany does not have 50 customer. We have large retailers, as you may know. We have a really positive feedback from the three major one already done in these months. The feedback is really positive until now. About the last question, Victoria, which contract are you referring to? The baby food contract we got in the summer? No, with the farmers for the milk. To provide the milk. Substantially we definitely signed the contract that we announced, and we are substantially defining other new contracts with other farmer to try to close substantially the circle also with the other supplier. The positive news is that today, the average price of the raw material in milk remains substantially stable. Thanks. I think probably there are no more question. I think someone raised their hand, but I don't know who it is. I don't know if that was an accident. There's no name though, so I don't know who it is. Hey, yeah. Just one question if there was some minutes left. Coming back to the point of the agreement with farmer and the sourcing prices for milk. Since your contract for CLI is at EUR 0.36, if I'm not wrong, per liter. Whilst milk prices are currently a bit low, do you think this might be a threat in terms of more aggressive attitude from peers, from competitors, which are instead in the position to benefit from a bit lower pricing of milk? I don't know if I've been clear. No, I think that, generally speaking, if we analyze our competitor, Granarolo is a cooperative, and this means that they are not so accustomed to play on t he milk price volatility in the short term, and generally speaking, the average price in the midterm is substantially more or less the same linked to the average in the sector. The reason is attitude to play with a speculative approach on the short term. Also because what we need and what also the other player need is to try to create a partnership with the retailer and with the supplier. For this reason, it's important to try to get an agreement, in which both parties are happy to sign, because otherwise in a different situation and unfortunately happen also, the situation in which the milk price is growing, you don't have any kind of substantially options to open a negotiation and to try to find something to dilute this negative effect. This is the reason why we, everywhere in wheat, in milk, we always try to build a strong relationship with the supplier to try to have always a negotiation, to talk with them, and to try to define a midpoint that could satisfy both parties. Okay, thanks. Thank you. Good. I think that probably there are no further questions. I would like to remind everyone that, for any kind of follow-up, we are always available to answer your questions. You can contact directly the Investor Relation office with the email that you can find in the presentation. We are available to try to answer you very quickly. Thank you so much for joining the call, and hopefully we'll see you next time. Thank you. Thank you, everybody. Thank you. Bye. Bye. Thank you. Bye-bye. Thank you.