Esprinet S.p.A.

Good morning. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the SBIRNET fourth quarter and full year 2020 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference Over to Ms. Giulia Perfetti, Investor Relations Manager of EspritNet. Please go ahead, Madam.

Good morning and welcome, everyone. Thanks for being with us. I'm Giulia Perfetti, Investor Relations Manager of EspritNet, and with me is Alessandro Cattani, CEO of EspritNet. Today we have the pleasure to share and comment the preliminary data for Fiscal Year 2020 announced last Monday. I would like to remind everyone that the relative press release, the presentation that we will use shortly, and the podcast of today's call will be available on the ESPRIT website in the investor section. I let Alessandro start the call and present the preliminary fiscal year 2020 results. Alessandro, over to you.

Well, thanks, Giulia, and thanks, everybody, for joining us today. There's always a word of notice about the usual regulatory notes, which you can find here on page number two. So, well, let's dig immediately into our preliminary numbers and results. Well, it's been a really great year for us, both for the fact that we celebrate our 20th anniversary But even more, because not only we consolidated our market leadership in Southern Europe, but definitely we celebrated the best year ever for our group, with a very strong performance in P&L, beating estimates, with the strongest balance sheet ever as well. But let's look into the numbers. Well, we exceeded our 2020 expectations. Sales were up for the whole year 14 percent, with a total growth of more than half a billion in revenues, topping almost 4.5 billion as total revenues for the group for the year. What's even more remarkable is the performance of our profitability. A bid adjusted grew to roughly €69 million, up 24 percent against comparable numbers of 2019. It's been an year of growth in all our geographies. Italy grew 9 percent, Spain 21 percent, Portugal 75 percent. And even better, we grew market share in all countries, and we recorded the best market share in recent years. After a long time, we had double-digit growth also thanks to the excellent performance of Q420, which recorded an increase in percentage on sales against the Q419. a big change in the evolution of one of our key metrics on profitability. Basically, all product lines grew in terms of gross profit margin. So we're pretty pleased to see that the activities that we put in place In terms especially of customer satisfaction but in general all the activities aimed at improving our profitability are getting traction and providing good results. As I said before, strongest balance sheet ever. We focused in 2019 and in 2020 in improving our return on capital employed, mostly through better management of our balance sheet and for the second quarter straight in line. We recorded a cash cycle of eight days, so in line with Q3 2020, with an improvement of 16 days compared to Q4-19. That drove an improvement in the net financial position, which at the end of the year stood positive for roughly €300 million, that after roughly €100 million of impact of IFRX-16 numbers. a really solid number with an improvement compared to December 2019, where we posted a positive position of 272 million euros. And last but not least, return on capital employed, which has been the metric on which we have built our strategy, marks a significant increase, standing at around 24 percent, compared to 9.8 percent in 2019, and weighted average cost of capital of around 8 percent. A couple of things worthy of remark. Well, we believe that we have achieved these numbers mostly thanks to a team which is now standing at around 1,600 people, 1,600 professionals. And I want to give praise to this great team, which show the ability to cope with a very difficult environment. And we supported it by a strong and active inclusion policy that led us, among other things, to achieve the Great Place to Work certification in Italy, and we want to aim at the same certification for the other regions where our group is operating as well. That's one of the targets for 2021. I'm pretty pleased to say that we have been a source of stability for both our customers as well as our suppliers in very difficult market conditions. We provided funding to our customers. We provided stable business continuity, delivering products, and to our vendor partners, I think we have shown the capability of being a reliable partner, which in times of difficulties has been able to support their policy, driving products, driving marketing initiatives down into the market, aiming always at providing the best customer satisfaction. And last but not least, we have, in the middle of the pandemic, executed three strategic acquisitions in the advanced solution market. that gave us a strong boost in the growth of our advanced solution business in Italy as well as in Spain. So, digging into the numbers of the sales evolution by geography, as you can see, Italy grew 9%, Spain 21%, Portugal 75%. Overall, we grew in market share. I want to remark especially Brilliant performance of our Portuguese team. We are getting really traction over there. We began our journey in the Portuguese market a few years ago with the Greenfield operations. and we really are growing nicely, and there's a lot of excitement. We're really happy of what's happening there. Obviously, we're doing very well in all our other areas. If I look at the performance by product category, IT clients, which means PCs and printers, were the hottest growth area for our business, driven especially by the strong market demand of PCs. But we had excellent performance in consumer electronics and we outpaced the market in advanced solution as well. And last but not least, we kept on growing in our share in the retailer and e-tailer market, but even more remarkable is the acceleration that we had in the coverage of the IT reseller and system integration market, marking a clear path. towards growth in more profitable areas, and testimony to the good work that our team has been providing and doing, especially around customer satisfaction metrics, which has been a key driver of our strategy in these last years. Let me drill down one second on the advanced solution market. Advanced solution is an area which is particularly interesting in terms of profitability. There are other areas that are even more profitable, such as certain areas in consumer electronics with accessories, for instance. But definitely advanced solution is the key area where we, it's the only area where we are not yet the market leader, so we are putting a lot of attention here. I'm pretty pleased to say that if we combine our organic growth with the acquisitions of the GTI Group in Spain and Portugal and in Italy and Spain as well, with a small presence in France and Germany, Our performance sales in the advanced solution market for 2020 exceeded 780 million euros. It's a great achievement. We are really excited on what we are seeing in the market, the momentum that we are getting, and we do believe we are more and more a driving force, especially in new areas such as the cloud space, where we'll launch a new proprietary cloud marketplace propelling the growth of this area. And we are really active and will soon deploy in the market also our solutions for the devices and service offering. All in all, providing new solutions in this advanced and higher margin area, which is really of paramount importance for our strategy. Let's have a quick look at our financial structure. easy to say, we have never, ever had such a strong balance sheet that is giving us lots of flexibility and opportunity of accelerating our growth, providing security to our vendor community, as well as to our customers, where we can stand right by their side, supporting them in their growth programs, and obviously to our financial partners. Our cash conversions cycle closed at eight days. eight days as we had in Q3 20, and 16 days better than Q4 19. We had very, very good performance in inventory days, good performance in DPOs, and substantial stability in ESOs. We're now in a maintenance mode here. We don't believe there's a lot of improvement possible. We're even ready to trade off between the cash conversion cycle and profitability, if needed, always aiming at return on capital employed improvement. Net financial position positive by €300 million, €400 million pre-FRS-16, and return on capital employed at 24 percent. If we look graphically at the evolution of the four-quarter average evolution of our working capital metrics, you can see that since we kicked off in late 2018 with the implementation of this return on capital employed or ROSI-driven strategy, The first target to optimize the cash cycle has been definitely achieved. We are now at 40 days inventory, 40 days of inventory. But that's the average of the last four quarters. In reality, the last quarter closed at 26 days. And we had stability in our DSOs that stood at roughly 37 days. We got support from our vendor partners. We reverted part of the support from our vendor partners down into the market, either as proposed and sometimes accepted longer payment terms or extra discounts for those who preferred margins rather than payments. The support ended essentially at the end of Q2, and then we had the normal seasonality of Q4. But definitely we're pretty pleased in what we achieved in terms of working capital metrics. You can see it on a quarter-by-quarter basis. metric here. You see that in Q4 we achieved 26 days. DPOs stood at roughly 72 days and marked a decrease against the 77 days of the previous year. But we had the special support, and we want to thank our vendor community in Q2. We expect our running DPOs to be between 60 and 70 days, being the 60 days end of month more or less the average now with the vast majority of our vendor community. No particular news on the customer and good performance as said before in the inventory days. Well, obviously, the increase in profitability teamed up with this strong performance in terms of balance sheet draw significantly up our return on capital employed at 24 percent is the best return on capital employed track in these last four years and more, and so definitely The best. All year combined is the best year ever. I think we hit on all cylinders and we're pretty pleased of the results that we achieved. The ROCE-driven strategy, as you know, is the pillar of our, is the guiding light of our day-to-day action. In terms of capital employed optimization, we have already We don't expect major improvements. We could even accept certain tradeoffs if better margin is coming, provided that the tradeoff improves our return on capital employed. We are all focused on profitability improvement. Customer satisfaction is one of the key aspects of our strategy, as you know, and it's paying off. We improved our profitability of a few basis points. The gross profit margin was up a few basis points. line of business by line of business because we provided the superior quality of service to both our vendor community as well as to our customers. And we want to double down on customer satisfaction activities. We contained our fixed costs and we were therefore able to profit from the higher volumes coming especially from PCs and smartphones And we do expect, at least for the first part of this year, to have additional volumes coming. And we will keep a tight control of our cost structure to profit of the operating leverage. And as you have seen with the acquisitions, but expect more activity moving forward in the advanced solution and the high margin niches of consumer electronics. We are looking at acquisitions. We are looking at organic growth. Cloud in the consumption model area is one of our key strategies. And obviously, devices as a service and management services are other areas where we want to invest and grow. We have already deployed our cloud platform. And very soon, we'll be up and running with our devices as a service. And then we're looking at outsourcing. Let's close this quick analysis of our numbers with the outlook and the final remarks. We outpaced the market, and we achieved numbers better than our expectation in 2020, mostly because we received more volumes. than the ones that we expected. So we were able to ship more products and overperform our top line. And then we had above expectations performance in the gross profit margin, keeping a tight lead on cost. So those are the key reasons of our overperformance in 2020. And if we look at 2021, Well, the year kicked off with a very solid backlog in PCs. And generally speaking, the demand of mobile computing devices is still hot. And we believe it will be hot, at least for the rest of H1. For the rest of H1. the PCs and even printers, and generally speaking, all products, are still showing low product availability. That's apparently due to a shortage of components, which is forecasted to last probably, we have said, until late spring. Well, there are visions that say even into summer. But definitely, we will still be as an industry constrained by the shortage of components and so the shortage of product availability. But still demand, especially mobile computing for the first part of the year should be still stronger. Last year, infrastructure spending, so advanced solution in the hardware area, service storage specifically, was particularly weak. But there was a sort of recovery, especially in Q4, which we expect to continue in H1, even if volumes here should be still a little bit subdued compared to history. We are noticing, anyhow, a very strong resilience in the cloud model and in cybersecurity spending, and we are active in this area even more now after the acquisition of GTI, so we want to profit from this trend. If we look into H2, we think that consumer spending on one side and mobile computing sales on the other could reduce their growth rate. Most probably this could be linked also to the hope that the pandemic, thanks to the vaccines, should come to an end or at least to a reduction of the constraints to open market. And in that case, we expect households to spend more in travel, entertainment, and reduce the quota, the share of wallet dedicated to PCs especially, but TVs as well. And we expect public investments in education, in digitalization of public administration and health system to be a major driver in the second half, as well as the area of corporate spending. So, all in all, we expect to have a favorable environment for demand with stronger fundamentals in the ICT market. The IDC 2021 predictions, quote, growth in digital investment will outstrip the GDP recovery by a factor of three. So we have entered an era of accelerated digital spending, even more in southern Europe, where historically the ratio of IT spending on GDP has been historically lagging behind the same ratio of northern countries or the U.S. So there's a huge opportunity to close this gap. Things are happening, and we are at the forefront of this change, so we have a positive outlook moving forward. We'll have to fight harder to grab the opportunities, but opportunities should be there. In May we will present the guidance for the year and most probably the three-year strategic plan with the related economic and financial objectives for the following time. Well, that's all. We have a packed agenda of upcoming events, which you can see on slide 14. Our team, Investor Relations team, is available for any kind of information you might need. And with this, I hand it over to the operator for the Q&A session by thanking everybody for your attendance.

Thanks. Excuse me. This is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove your question, please press star and two. Please pick up the receiver when asking questions. The first question comes from Francois Robillard of Intermonte. Please go ahead.

Hi, everyone. Good morning. Thank you for taking my question. First one is on GTI. So you gave your guidance previously excluding the addition of GTI in the fourth quarter. Can you give us some more color on how this new division, this new acquired company, performed in the fourth quarter. I mean, in terms of both revenue, gross margin, and especially EBITDA, if you can give us some more color on that. Second question is on market share. You mentioned markets were growing. Can you give us basically your estimate of your market share and how it evolved respective to last year? Then looking at 2021, you mentioned the IDC expectations for ICT investments exceeding GDP growth by three times the growth rate. Is it for the global demand or is it more relative to South Europe? And I limit myself to these questions for now.

Thank you. Okay, well, thanks for your questions. For IDC, those are European data. We are working with them to analyze the specific performance of Southern Europe. On a general tone, I would assume, we would assume that the performance should be in line or even better because of the historical, for two reasons, basically. the historical lack of digital investments in Southern Europe compared to the rest of the market, the rest of Europe. And second, because one of the key drivers of this acceleration is linked to the next-gen EU plan. And Italy especially, Spain as well, but definitely Italy is one of the biggest, if not the biggest net recipient of these funds. If the new government, Draghi government or whoever will be in charge, will spend the money wisely, there should be a strong boost in government spending. And we are trying to see how many of these opportunities could be grabbed by us. If I look at market share, both Italy and as an aggregate, we normally don't give this number, but as an aggregate, we grew a little bit less than 1% market share. with Italy and Spain north of 30 percent full-year share, and Portugal, which is now well above 5 percent, with the last quarter being above 6 percent. So Portugal is truly accelerating. Just to give an idea, in Q1 2019, we were less than 3% market share. In Q4 2020, we have more than doubled our share in Portugal. So that's for the market share. On GTI, well, we'll release all the details in in March 1st, when we will provide the market with the full details of our financial statement. But all in all, GTI performed pretty well in Q4. If you take full year expectations based on the numbers that we provided during the acquisitions, they were in line with our expectations. well north of €1 million, and sales in line with normal seasonality. So they had a good performance. But the vast majority of the EBITDA improvement comes from organic performance. Thank you. Okay.

The next question is from Marco Vitale of Mediobanca. Please go ahead.

Yes. Good morning, all, and thank you for taking my question. I have two questions, basically. The first one, a clarification. In your opinion, which segment of your business should benefit the most from the government investment in digitalization? that you see in the second half of the year. And second, a second question on the PC segment. Is it reasonable to assume a normalization demand starting from the second half of 2021 to drive sales of this division below 2020 level?

Okay, so interesting question. As a matter of fact, we will answer in detail these questions when we will, in May, present our targets. But definitely, if I look, I start with the PCs, market analysts and our vendor partners are all together in saying that on one side the first part of the year should still benefit from a long wave of, a long tail of orders, both backlog orders that we were not able as an industry to fulfill in Q4 2020 because of the shortage of products, as well as new orders flowing in. because of still robust demand for this kind of technology. Moving forward, what we tried to say before is that there are a couple of things that could impact the overall performance of PCs, and we have not yet a clear position here. The first one is a general trend. We moved from essentially one PC per family to one PC per member of family. That's one mantra that is flowing through the industry. And definitely there are expectations of acceleration of the still a lot of market that has not been penetrated by the PCs. And there is also, on the positive side, a lot of demand in education, especially, as well as in digital innovation in governments that could and should be fulfilled. And it's a positive on the PCs. On the other side, PCs were driven by family as well as companies. Companies will probably keep on driving digital investments, probably less in PCs and more in infrastructure, and have come in a moment in the segment that should benefit more of this digital innovation. Families have spent a lot of their available disposable income in renovation of their family, of their houses, and they spend a lot for the kids and for themselves, buying PCs as well as TVs and other stuff. If the pandemic will be over, part of the spending will be reverted back to hotel, travel, restaurants. So all in all, there's a big debate on whether full-year PC sales should be slightly up or flat. Consensus is in this moment apparently that for the full year PC sales should not be below previous year. But we're still in uncharted territories, and we need some months still to go better the situation and have better discussions with our vendor partners. One last point is also linked to the availability of components to build PCs. And there's a lot of activity going forward to improve the factory output, but we have not yet clear messages from our vendors. Let's say that all in all, until September most probably sales should be still very strong. Q4 could be a challenging quarter, and we'll have to see if it will be as challenging as to impact the overall performance of the year. Hopefully, in May, we'll have better indications and we'll definitely take a position on this. As per your first question, which is the segment or which are the segments which should profit more from this digital innovation, well, definitely cloud, cybersecurity are in the top positions. There's still room to go for PCs as well, obviously, and then software, definitely. Those are the key areas, cloud, cybersecurity, still PCs. We see an opportunity in consumer space because there is, especially in Italy, they change over in TV with the change in the digital TV standards. So probably there will be a small round of innovation there as well. And then gaming, there's been a new round of video game consoles that could drive growth as well. But if I stick to the professional market, cybersecurity and cloud are the hottest areas in everybody's view.

Okay, thank you very much. You're welcome.

As a reminder, if you wish to register for a question, From the conference call, please press star and one on your telephone. Written questions may be submitted as well through the webcast. The next question is a follow-up from Francois Robillard of Insurmonte. Please go ahead.

Thank you for taking my second set of questions. Just a quick update on the cost control. You mentioned that some actions were taken to keep tight control on fixed costs. Can you remind us what these actions were and to what extent they are structural? And finally, both on your fourth quarter and looking ahead in 2021, what are the costs of your recent acquisition streams that we might see materialized on the P&M? Thank you very much.

Okay. So, on cost control, Well, basically, we worked hard on keeping a lead on travel costs, obviously. And so they essentially disappeared, at least for a few months. We're now traveling a little bit more, but not that much. And there has been also a reduction Consequent reduction in certain cost for the utilities, but so light and energy and so on. Moving forward, what we are planning is to reduce the number of square meters used for our office space. We will close the Madrid offices of INSEO and GTI and We'll consolidate the people in new offices probably in April, May. The offices, the lease expires, so there's no additional cost. We'll move the people over there. And we have rented a new office which will not have space for everybody, because we will work with the concept of hot seating and constant smart working. That's an area we have worked hard to optimize the cost structure in our warehousing. We have installed new machinery to improve the cost of packaging with a new machine that reduces the cost of packaging by creating custom-made boxes with less waste, and we have furtherly optimized the cost in the area of peaking. So those are the key area in the cost control. For the new acquisitions, well, I would refer to the pro forma data that we provided when we acquired the company in . We expect the cost structure to remain substantially stable. We don't expect the major synergies. In GTI, we will move the company to the new offices, and we will have an integration of the IT systems in May. So there could be some savings over there. We are still in the phase of budgeting, so I prefer not to give specific figures in this moment. I would suggest to use the data that we provided with the acquisition, and then there will be some fine-tuning when we will release our targets. Very clear.

Thank you very much.

The next question is from Gabriele Berti of Banco IMI. Please go ahead.

Hi. Hello. Good morning, everybody. Thank you for the presentation. Just one clarification on growth related to the previous question. You stated that the gross profit margin improved year-on-year in the past few while. When I calculate the full view at the margin, I see a slight decrease of around 10 bits in spite of the contribution of GTI, which was the reason behind that. There was an integration post or something else.

It's mostly a matter of mix. We grew far more in PCs and smartphones than everything else. So if we take the individual line of businesses, with the only exception of a line of accessories, PC accessories, everything else grew in terms of gross profit margin. But the mix was more towards the PCs and smartphones, which, as you remember, provide us with a significantly lower gross profit margin compared to everything else. So that drove eventually the number to a lower amount. And last but not least, we had significantly less one-off profit or charges at the end of the year. You remember that we have this policy by which during the year we accrue credit notes to be received or to be paid to customers, received by vendors and paid to customers, and with a caution, with let's say, a conservative, in a conservative way, and then we make the exact calculation at the end of the year, where normally we release always an extra profit. It goes up and down year on year. This year was a little bit less than what we had the previous year. But the key reason is a matter of mix. The individual line of businesses provided better gross profit margins.

The next question is from Marco Vitale, a follow-up from Mediobanca. Please go ahead, sir.

Yes, thank you. I'm sorry. Just a quick follow-up on factoring. Should we expect factoring utilization to be in line with previous year, or are there material differences?

From a percentage standpoint on sales, it's down. It's slightly up in absolute terms against the previous year because we sold so much more. But not that much. And if you make the calculation on the amount of factoring on sales, it's constantly decreasing.

Okay.

Thank you. because we are moving payment terms, nominal payment terms of our customers. We have achieved to reduce nominal payment terms of certain customers.

The next question is from Louisa Premi of IR Top Consulting. Please go ahead, madam.

Good morning, everyone. I just have a quick question on the new cloud marketplace. I would like to know what you think it represents for you in terms of the competitive advantage.

Well, thanks for the question. Yes, the new proprietary cloud marketplace is something we have been working on for a long, a long time. It's something that should hopefully create a difference in time between the way we were working before and in the future. Running, if you are a system integrator, dealing with a bunch of different cloud providers is very complex. You have to provision cloud solutions on different portals, normally in English, very often with cash payment by credit card, it's complex. It's very difficult for your sales teams to get a good quote. With our system, we have created a single environment in Italian, Spanish, or Portuguese where with a single common interface you can put virtually in a shopping cart, different cloud contracts, and our system is interfaced with the cloud providers and activate everything for you. So it should be, in our view, a tremendous accelerator for cloud adoption by especially the less experienced system integrators on one side, and it should turn into a source of loyalty in time. Let's remember that these kind of cloud solutions are providing us with recurring revenues. The GTI team in Spain is using a cloud marketplace provided by a third party. It might well be that in time we might adopt our marketplace in Spain as well. First, we obviously need to change their IT system to our standards and then we'll evaluate what to do. But there might be sources of synergy there as well.

Thank you very much.

At this time, there are no questions in the queue, sir. Would you like to take the questions from the webcast?

Yes, thanks. I see a first question from Mr. . For question first one, what is the pro forma consolidated turnover of 2020? Is it, including the acquisition, is it 4.67 billion? Well, it's 4.49 plus, you can see on slide six of our presentation, 116 plus 74. So, it's 4.68. So, you made the right calculation. You mentioned an improved gross profit margin in Q4 versus Q4 2020 versus Q4 2019. Shall we say that the gross profit margin cycle has turned, the trend of deterioration has been finally inverted, that we should see an upward trend in gross profit margin in 2021? Well, that is part of what we will say with our targets in May, but definitely It's a tremendous good sign that our strategy, which is exactly aimed at reverting this trend, is starting to pay off. So I don't yet commit on this, but this is one of the long-term targets that we had set internally. So it's something that is giving confidence that the strategy is going in the execution of the strategy is going in the right direction. And in 2020, you posted record earnings, lower capital employed. What are the aspirant priorities in terms of capital allocation? Look at the 21-22 given the financial firepower that you have. Well, again, we'll be more precise when we will discuss the final results of the group on March 1st. Definitely we have three avenues we can go by. One is to use this firepower to keep on growing, either organically or through acquisitions. There's a lot of investments that are out there waiting with a potentially good return in our view, both in terms of acquisitions, small or midsize and niche companies in high-margin areas, both in advanced solutions and even more in consumer electronics or accessories, generally speaking. But there are opportunities also in verticals for organic growth. will definitely use our financial strength to go on with our growth plan. And it's always something that is always important for our vendor community as well. The more they see us as strong, the more they will feel confident to use us as their preferred go-to-market route in countries where we are active and offered them a safer haven to exploit their, to execute their strategy compared to smaller players that might be in shakier financial situation. Then, obviously, we are discussing about the dividend strategy, which we interrupted for security reasons, I would put it this way. in the middle of the pandemic, but we have always paid the dividends, so we are making hard questions among ourselves what to do in terms of dividend policy, which has always been a landmark of our way of rewarding our investors, and obviously buybacks. always an opportunity of giving back capital to our investors by investing in our company. We have strong expectations. We have executed well on a clear strategy. So we look at these three ways of putting at good use the capital that we have generated and the capital that you investors have asked us to shepherd. And treasury shares, you wisely bought back your shares with stock price when the stock price was low. What do you plan to do with those shares? Do you have any idea plan, cancel sale, shareholders, acquisition currency? Well, a bunch of those shares have been put aside for the long-term incentive plan, which is due to... to come into action in April this year. So part of them will be used to pay the beneficiaries of this long-term incentive plan. Not all of them. The other will remain as Treasury shares, and we'll see what we will have to do with them. More news anyhow. on March 1st when we will disclose all the details of the plan. Well, the second question is from Alessandro Cuglietta of MidCap Partners. Good morning, Alessandro. I have two questions regarding the improvement in gross margin. Could you tell us if there was any positive impact from your increased highs in Spain and Portugal? Could you maybe be able to get better purchase prices? On some minor deals, yes, with minor vendors. But all in all, the better margins that we got are the results of the combined activity of being a bigger player, sounder from a financial standpoint, so giving more security to our vendor partners. being able to provide top quality delivery capabilities to our vendor partners and especially having demonstrated to our customers that we have more and more superior customer service and so they were eager or ready to accept sometimes a few basis points of better opportunity for us within the single product categories, we sometimes were able to optimize the tradeoff between one manufacturer and the other, when some manufacturers were not willing or ready to support us as we deemed useful or right, given the level of support that we were giving them. So that's the key reason, I would say. Second question, could you also give us some color on this dynamic of the white goods market? Are you still seeing an increasing share of white goods going through distributors? Well, yes, there are signs that something is happening, but it's always a very slow process. If I look at what happened in the IT industry 30 years ago and in consumer electronics 10, 15 years ago, It took off slowly and then accelerated in a sort of exponential way. They still have to digest the fact that if they optimize their go-to-market using more extensively distributors such as aspirin, they could get enormous savings. But that obviously comes at the cost of initially a painful restructuring. Some of them, some of the vendors, white wooden vendors are going through this process, others not yet. We see something happening with certain vendors, so things have improved a little bit, but there's still room to go. It will be a long journey. Claudio De Ranieri asked, I did adjust the figure for Fulio 2020. What should we expect in terms of adjustment, apart from the already accounted for the first nine months, so for Q4 2020? Well, basically, the overall adjustment will give the right figures during the presentation of the full year results. But anyhow, the adjustments are essentially, the one-off charges are essentially three. There's the one-off impairment of $1.1 million on Celli, which we already reported before. That's the cost of layoff of the former CFO. And then the 2.7, 2.8 million euros of the supplier of sport technology products, which we took as a charge when we closed the dispute that we had with this company, which eventually went into Chapter 11, let's say. Those are the only charges that we have, and all of them were already booked in our Q3 numbers, with the exception of the mobile, the electrical mobility, the sport technology supplier. Consider that the Previously we had booked as non-recurring the cost of acquisitions, and we have restated them as running costs, ordinary costs, because we are now a sort of serial acquisition company, serial acquirer. And so we decided to restate them as ordinary costs. So we've taken them out of not recurrent, and so they are into normal EBITDA. These numbers are still subject, obviously, to audit, so that's our position with the auditors. We don't think, we don't expect them to have any problem, because we are considering recurring cost before considering one-off, but that's where we stand in this moment. Apparently, there's no other question. I turn it over to the operator to see.

Yes, sir. I confirm there are no questions on the conference call. Would you like to make any closing remarks?

Well, if there's no other question, I want to thank everybody for joining us in this call and for their support during this year. We will be again with new numbers to present on May 14. Look forward to talk to you in that date or if any during one of the stock conferences that we will be having before that date. Thank you, everybody. Stay safe and speak to you soon. Thank you.

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