Some highlights from the conference call
Gustavo Paz (CEO)
I set myself 2 major objectives to achieve during my first 90 days. First, I have dived deeply in all areas driving our competitive situation. And second, I started developing a plan together with my team which will accelerate the execution of our strategy.
I have visited almost all our core manufacturing sites, distribution centers and commercial offices, connecting with our people, assessing our capabilities and jointly identifying opportunities. I have also started to meet some of our top customers, both retailers and in health care. I have visited several points of sales, elderly homes; and meet with top suppliers, so all these information and insights gathered during this deep dive now fits our acceleration plan and give us confidence on what we can do and achieve in the next 3 years. We will be sharing more about this plan in the next few months.
The key to acceleration of our plan will be a drastic reduction in complexity, impacting growth, profitability and eventually strong cash flow generation.
Restoring the balance sheet is one of my absolutely key priorities, particularly in the current macro uncertainty.
Net debt will come down, thanks to the completion of the Mexican divestment early Q2.
While we continue to work on the divestment of the other businesses, we expect this to be contributing positively to EBITDA and free cash flow.
And the commitment of myself and the team is very, very high. I can tell you it's very, very high, to deliver on the expectations.
Would you believe that the net proceeds for the remaining assets will be higher or less than the EUR 160 million?
Maybe you can give an indication where you see a fair equity value for these assets.
And do you believe that these net proceeds will come in then in H1 '24 or maybe later?
Peter Vanneste (CFO)
Yes. I think, on the first question, on the assets held for sale, important to note, first of all, we continue to make good progress on the projects that we're having Especially in the area of the Middle East. So with Pakistan and Algeria and Turkey, we made progress on the projects, and we've talked about that in the past. So we hope and we assume that we can make some steps soon on that.
As to your number in terms of the asset value, I'm not going to comment on what we're looking at in terms of potential proceeds from it, but of course, we have been making some impairments in this year, which does give a signal, but again I'm not going to comment on the the exact numbers there.
On Brazil, also there, we're making progress. It's a more complicated assets, as you know, but also there we keep a line of sight on
divesting. Important to say is that all of these markets that I just mentioned have stepped up strongly in terms of cash generation and EBITDA generation so that doesn't change the strategy, but that makes them more strategic and also contributing to our numbers for as long as we have them within the portfolio.
And it's important to note that, once we have divested soon Mexico, we will pay back the term loan, so the carrying size of the loans that carry the covenants will be limited to the RCF only. And on that, actually we are already starting discussions with the banks about extending the maturity of those of that RCF because it matures mid-'24 and we want to be ahead of time there.
There's a few opportunities that we see, not in the least with some of the things that Gustavo has been mentioning about simplification, so we'll certainly work very hard on that. And we do believe that the cash flow is going to be positive next year, as it has turned positive in the second half of this year already as well.
Gustavo Paz (CEO)
I have to say that personally I'm highly, highly encouraged by the turn that we have, this company has done during 2022, in the second half, especially in the fourth quarter.
@ keffertje could you post the ING report?