Q4 2021 Caesarstone Ltd Earnings Call
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Speaker 1: Greetings and welcome to Caesarstone Limited fourth quarter 2021 earnings conference call.
Greetings and welcome to Caesar Stone Ltd fourth quarter 2021 earnings Conference call.
Speaker 1: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star-zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Cray, in Vesta Relations. Thank you. Let's begin.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Brad Cray Investor Relations. Thank you you may begin.
Speaker 2: Thank you, operator, and good morning to everyone. I am joined by Yuval Daghim, Cesar Stone's Chief Executive Officer, and Nahum Trost, Cesar Stone's Chief Financial Officer.
Thank you operator, and good morning to everyone I am joined by you've all Biggie. These are stern Chief Executive Officer.
And now he chose easier Stern Chief Financial Officer.
Certain statements in todays conference call and responses to various questions may constitute forward looking statements.
Speaker 2: Certain statements in today's conference call and responses to various questions may constitute or looking statements.
Speaker 2: We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially.
We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially.
Speaker 2: For more information, please refer to the risk factors contained in the company's most recent annual report on Form 20-S and subsequent filings with the SEC.
For more information please refer to the risk factors contained in the company's most recent annual report on form 20-F.
Subsequent filings with the SEC.
Speaker 2: In addition, on this call, the company will make reference to certain non-GAAP financial measures.
In addition on this call the company will make reference to certain non-GAAP financial measures, including adjusted.
Speaker 2: including adjusted net income loss, adjusted net income loss per share, adjusted gross profit, adjusted EBITDA, and constant currency.
Adjusted net income loss adjusted net income loss per share.
The gross profit adjusted EBITDA and.
Constant currency.
Speaker 2: The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's fourth quarter 2021 earnings release, which is posted on the company's investor relations website.
The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's fourth quarter 2021 earnings release.
Which is posted on the company's Investor Relations website.
Speaker 3: Thank you, and I would now like to turn the call over to you, Val. Please go ahead. Thank you, Brad, and good morning, everyone. We are happy to report our fourth quarter results, marking the close of a year of exceptional progress and solid growth for Cesarstone. We successfully executed our strategic initiatives and captured demand opportunities in our end markets to achieve record fourth quarter revenue, as well as fifth straight quarter of a year of revenue.
Thank you and I would now like to turn the call over to Yuval. Please go ahead. Thank.
Thank you Brad and good morning, everyone.
Happy to report our fourth quarter results, marking the close of a year of exceptional progress and solid golf, we'll see just don't we successfully executed our strategic initiatives and captured demand opportunities in our end markets to achieve record fourth quarter revenue as well as fifth straight quarter of a year.
Year over year revenue growth.
This allowed us to conclude 2021 with a year of record revenue with more than 600 million dollar sales for the first time, you see just from history.
Speaker 3: This allowed us to conclude 2021 with a year of record revenue, with more than $600 million in sales for the first time in CZRS.
Our strong results were driven primarily by further penetration into the U S. During the fourth quarter, we were thrilled to see significant growth in the U S sales driven by three key areas.
Speaker 3: Our strong results were driven primarily by further penetration into the US. During the fourth quarter, we were thrilled to see significant growth in the US cells driven by three key areas.
Speaker 3: organic growth, big box channel growth and the contribution of our Omicron Grand Tantile acquisition.
Organic growth Big books, chairman goals and the contribution of our Army Corps grandson tile acquisition.
Speaker 3: We saw a continuation of positive momentum in the Big Boss channel during the quote.
We saw a continuation of positive momentum in the big box channel during the quarter.
Speaker 3: We accomplished solid year-over-year growth in the search of scissor stone branded slabs at Home Depot stores.
We accomplished solid year over year growth in the circle C. Just don't branded slabs at home depot stores.
In addition, sales and Ikea continued to recover increasing approximately 50% quarter over quarter.
Speaker 3: In addition, sales in IKEA continue to recover, increasing approximately 50% quarter over mid- Alpha END.
Speaker 3: Looking beyond organic performance, we were pleased to see strong contribution to our results from the successful integration of our Omicron acquisition. This acquisition has proven to be a bright spot within our business, bringing strong synergies and providing us with a solid platform to better serve customers as we continue to deepen our direct presence in attractive U.S. markets.
Looking beyond organic performance, we were pleased to see strong contribution to our results from the successful integration of our Army Corps acquisition. This acquisition has proven to be a bright spot within all business, bringing strong synergies and providing us with a solid platform to better serve customers.
Continue to deepen our direct presence in attractive U S market.
Speaker 3: Separately, our integration of Lioli Ceramica is proceeding as planned and will remain on track to launch an innovative new global post-flav collection under our ScissorTone brand in 2020.
Separately, our integration of Yodlee Cirami gum is proceeding as planned and we remain on track to launch an innovative new global poll Slim collection under a couple of Skus don't brand in 2022.
Speaker 3: Overall, we are pleased with the 2021 performance of these two accretive acquisitions, which were both completed in the fourth quarter of 2000.
Overall, we are pleased with the 2021 performance.
These two accretive acquisitions, which were both completed in the fourth quarter of 2020.
As we look forward, we are seeing continued momentum and demand for Caesars Don premium best in class products and are excited to further augment our track record of innovation with the introduction of new multi material product offerings in 2022.
Speaker 3: As we look forward, we are seeing continued momentum in demand for CZSTON Premium best-in-class products and are excited to further augment our track record of innovation through the introduction of new multi-material products offerings in 2012.
Speaker 3: To that end, following a year of solid results as well as meaningful progress with executing our strategy, we have a clear path forward into the next stage of our growth journey and are excited to introduce today a long-term financial goal for 2025 which includes...
Was that and following a year of solid results as well as meaningful progress with executing our strategy. We have a clear path forward into the next stage of our growth journey.
Excited to introduce today and long term financial goals for 2025, which includes revenue growing to $1 billion based on the expected benefits from our multi material strategy you will go to market capabilities as well as incremental revenue from all of the <unk> connect platform.
Speaker 3: revenue growing to $1 billion based on the expected benefits from our multi-material strategy, new go-to-market capabilities, as well as incremental revenue from our CS Connect platform.
Yeah.
Speaker 3: and adjusted EBITDA margin in the mid to high 10%
And adjusted EBITDA margin in the mid to high Teen Percents range boosted by a combination of a stronger gross margin and SG&A leverage. These long term goals reflect our confidence in our strategy and our ability to leverage the foundations for growth we have developed as we implement our multi material.
Speaker 3: boosted by a combination of a stronger Gauss margin and SGNA leverage.
Speaker 3: These long-term goals reflect our confidence in our strategy and our ability to leverage the foundations for growth we have developed. As we implement our multi-material offerings, increase our addressable market and broaden our footprint in the U.S.
Offerings increase our addressable market and broaden our footprint in the U S. We.
Speaker 3: We expect to accomplish these targets to combine benefits from our technological transformation, enhanced production and supply chain efficiencies, augmented go-to-market strategy and premium brand recognition.
We expect to accomplish these targets two combined benefits from our technological summation enhanced production and supply chain efficiencies augmented go to market strategy and premium brands with recognition.
Speaker 3: We are delivering results from these initiatives as part of our Global Growth Acceleration Plan, and we expect to continue to do so. The plan can be categorized...
We are delivering results from these initiatives as part of our global growth acceleration plan and we expect to continue to do so.
Glenn can be categorized into three strategic pillars.
Speaker 3: a premium multi-material offering, customer experience and engagement, and global footprint expense.
Premium multi material offering custom.
Customer experience and engagement and global footprint expansion.
Speaker 3: In regards to our multi-material offerings, we have leveraged our acquisition of Leoli and Ohmic.
He got to have a multi material offerings, we have leveraged our position of the yodlee and only going.
Speaker 3: to design products that incorporate new materials. And our teams are working to enhance our position in quartz, ocelone, and natural stone products, all under the C-stone brand name. As the premier—
So these aren't products that incorporate new materials and all the teams are working to enhance our position in quotes all cylinders and natural stone products all under the brand name <unk>.
The amount of choice for countertops.
Speaker 3: Our initiative to become a multi-material counter to players, which also leverages our leading craftsmanship, engineering knowledge and global salesforce has more than doubled our addressable...
Although the initiatives to become a multi material continental player, which also leverages, our leading customer chip engineering knowledge and the global sales force has more than doubled our addressable market.
Speaker 3: In conjunction with product development, our marketing teams continue to define Caesarstone as a trendsetter and design innovator, allowing our sales force to accelerate growth of our global share in the content.
In conjunction with product development and marketing teams continue to find Caesar stone as a trend system and these innovative allowing our sales force to accelerate the growth of our global ship in the continental be industry.
Speaker 3: unique offerings that utilize our proprietary technology has been to drive superior value
Unique offerings that utilize our proprietary technology has been to drive a superior value proposition.
Speaker 3: As it relates to customer engagement, we are seeing continued positive reception of our CS Connect platform, which launched nationwide to our kitchen and bath retail partners in the US during the third quarter of 2020.
As it relates to customer engagement. We are seeing continued positive reception of our <unk> connect platform, which launched national wide to our kitchen of the best retail partners in the U S. During the third quarter of 2021.
Speaker 3: Our rollout of CS Connect platform has performed in line with our strategic vision to leverage technology to own the countertop value chain and to create new revenue channels while bringing us closer to our customers and business partners.
Our rollout of <unk> connect platform is performing in line with our strategic vision to leverage technology to own the countertop value chain and to create new revenue channels, while bringing us closer.
All of our customers and business partners.
Speaker 3: Now, over the over 700 retail partners and counting, we expect to generate significant revenue on Fusio foray into presenting?
Now over the oldest 700 retail partners and counting we expect to generate significant revenue for us.
Yes connect over the coming years.
Speaker 3: While our long-term financial targets primarily reflect organic growth, we do continue to view M&A as a key part of our capital location.
While our long term financial targets, primarily reflect organic growth. We do continue to view M&A as a key part of our capital allocation strategy and we will take disciplined approach to review value enhancing opportunities that can provide us with attractive synergies.
Speaker 3: And we will take disciplined approach to review value enhancing opportunities that can providebidden users with attractive seniors.
Speaker 3: Overall, we are proud to share our 2025 financial goals with you today and believe that we have entered an
Overall, we are proud to show our 2025 for next year and goals with you today.
And believe that we have entered an inflection point of growth with a clear strategy in place and multiple levers to drive year over year growth in revenue and profit.
Speaker 3: with a clear strategy in place and multiple levers to drive year-over-year goals in revenue and profit.
In the coming years.
Speaker 3: looking ahead and remain confident in the actions we are taking to capture demand and to be the first band of choice for countertops all around the world.
Looking ahead I remain confident in the actions, we are taking to capture demand and to be the first brand of choice for countertops all around the world.
Speaker 3: We believe our well-defined strategic initiatives, strong balance sheets, proven record of cash generation, recent pricing actions, and continued demand tailwinds collectively provide us with confidence in our ability to navigate through the current cost environment as we further advance our position as a global counter-
We believe our well defined strategic initiatives strong balance sheets proven record of cash generation recent pricing actions and continued demand.
Wins collectively provide us with confidence in our ability to navigate through the current cost environment as we further advance our position as the global Countertop leader.
Speaker 3: With that, I will now turn the call to Nahum to discuss more details on our financial results and outlook.
With that I would now turn the call to know who will discuss more details on our financial results.
And our children.
Thank you.
And good morning to everyone.
I will start by discussing our fourth quarter results.
For the fourth quarter of 2021 .
Speaker 3: For the first quarter of 2021, global revenue grew 25%
Global revenue grew 25%.
Speaker 4: to a record 171.1...
They call it $171 1 million.
Speaker 4: compared to 136.9 million in the
Compared to $136 9 million in the fourth quarter of last year.
Speaker 4: The increase included a 13.8 million contribution from our acquisition of Omicron. On a constant currency basis, 4 Milton Churchill's
The increase included 13 point in tape media contribution.
Look with dish and a phone call.
On a constant currency basis.
Fourth quarter revenue was higher by 24, 2% comp.
Compared with the same period last year.
But immediately.
Speaker 4: primarily due to the contribution for MOMI-CON acquisition as well as
The contribution from Omi clinic acquisition as.
As wireless growth Norwegian.
In the Americas constant currency sales were up 33, 7%, mainly due to the growth in the U S.
Speaker 4: In the Americas, constant currency sales were up 33.7%, mainly due to the growth in the US. In the US, sales were up 44.8%, driven by our...
In the U S sales were up 44, 8% driven by our acquisition of forming called <unk>.
Speaker 4: organic growth and strong growth in the big box channel.
Organic growth and strong growth in the big box channel.
Speaker 4: We experienced solid growth in sales of our products also in Home Depot stores during the first quarter and our sales in IKEA stores were up 50% quarter on quarter.
We experienced solid growth in sales of our product also in the home depot stores.
The full scope there.
And I will certainly Nike is those with a 50% quote unquote too.
Speaker 4: In Canada, sales were up 5.8% on a constant currency basis, driven by both better core business performance and an increase in sales.
In Canada sales were up 5.8% on a constant currency basis.
And by both the better coal business with four wins and an increasing sales to Ikea.
Speaker 4: In the APAC region, constant currency sales were up 4.4% in the last year.
In Datebook region constant currency sales were up four 4%.
Speaker 4: Australia accounts for the majority of ourselves in the region and so year over year growth.
Australia accounts for the majority of fellow citizens the region and so you'll have a real close.
Speaker 4: In the EMEA region, constant calisthenics have grown 27%
In the EMEA region constant currency sales grew 27%.
Well, they may really reflecting strong performance in the U K as well as in narwhal indirect smoke.
Speaker 4: primarily reflecting strong performance in the UK as well as in our indirect market. In Israel on a constant currency basis, sales were up 20.1% in the fourth quarter, reflecting our strong performance as well as an easier comp.
In Israel on a constant currency basis.
Sales were up 21% in the fourth quote.
Afflicting <unk> strong performance as well as an easier comp given the Jewish holidays.
Which took place in the fourth quarter of the previous year.
Looking at our fourth quarter P&L performance.
Speaker 4: Our gross margin was 23.2% for the quote.
Our gross margin was 23, 2% for the quota.
Speaker 4: Adjusted gross margin was 23.3% compared to 28.6% in the prior year.
Adjusted gross margin was 23, 3% compared to 28, 6% in the prior year quarter.
Speaker 4: The year-over-year difference in gross margin was in line with our expectations.
The yields are the yield difference in gross margin was in line with our expectation.
Speaker 4: and primarily reflected higher raw material prices, mainly in polyester.
And primarily reflected higher raw material prices.
Mainly in polyester.
In addition to increasing shipping prices.
Speaker 4: partially offset by price increases and favorable product
Which was partially offset by price increases and favorable product mix.
Hopefully I think expenses were 21, 2% to five and you.
Speaker 4: Operating expenses were 21.2% of revenue.
Speaker 4: compared to 22.2% in the prior year growth.
Compared to 22, 2% in the prior year quote.
Excluding legal settlements and loss contingencies.
Speaker 4: operating expenses were 21.9% before
But I think expenses will anyone 0.9% of it.
Speaker 4: compared to 21.2% in the prior year quote.
Compared to 21, 2% in the play real quota.
Speaker 4: in line with our expectations as we return to normalized levels of marketing and selling expenses.
In line with our expectations.
We returned to normalized levels of marketing and selling expenses.
Speaker 4: and investments related to initiatives under our Global Growth Acceleration Plan.
And the investments related to initiative.
Our global growth acceleration plan.
Adjusted EBITDA in the fourth quarter was $11 5 million.
Speaker 4: The adjusted EBITDA in the first quarter was 11.5 million, representing a margin of $7.5
And I think a margin of six 7%.
Speaker 4: compared to 18.8 million or a margin of serving from 7% in the prior year.
Compared to $18 8 million or margin of 13, 7% in the prior year quarter.
The yields are a little decline primarily reflects the lower gross margin compared to last year.
Speaker 4: The year-over-year decline primarily reflects the lower gross margin compared to last year.
Speaker 4: Adjusted diluted earnings per share in the quarter was one.
Adjusted diluted earnings per share in the quota was one thing.
Speaker 4: compared to adjusted diluted earnings per share of $0.05.
Compared to adjusted diluted earnings per share of five cents in the same period last deal.
Speaker 4: same period last year on a similar chart.
On a similar share count.
Now looking at a little full year financial performance highlights.
Speaker 4: Now, looking at our full year financial performance highlight.
That's for the full year went up 72, 4%.
Speaker 4: On a constant currency basis, server up by 28.1%
On a constant currency basis says put up by 28, 1%.
Speaker 4: This increase included a 68.6 million contribution from our requisitions of Omicron and Loyola.
This increase included the 60 816 million contribution from our acquisitions of forming Continental aioli.
Speaker 4: Adjusted gross margin was 26.8% compared to 27.7% last year.
Adjusted gross margin was 26, 8% compared to 27, 7% last deal.
Speaker 4: The difference in adjusted gross margin mainly reflects higher raw material prices, particularly with the polyester.
The difference in adjusted gross margin, mainly reflects higher raw material prices.
So take it literally the poly I still am.
And shipping Pos increased which was partially offset.
Speaker 4: were partially offset by favorable product.
The favorable product mix.
Selling price increases and more favorable exchange rate.
Speaker 4: selling price increases and more favorable exchange.
Speaker 4: I'll reiterate the point we've made in previous quarters, that raw material cost pressures increased as the year progressed. So, we took long on this subject.
I'll reiterate the point, we've made in previous quarters, that's all material cost Bush sales increased as the Euro poke list.
In line with our expectations.
Speaker 4: giving the ongoing tight supply environment impacting our...
Given the ongoing tight supply environment impacting gobbling them differently.
We continue to experience material impacts from housing costs, which.
Speaker 4: We continue to experience material impacts from rising costs which impacted us in the
It impacted us in the fourth quarter of 2020 one.
Speaker 4: We expect that higher raw material and shipping costs will be an ongoing headwind to our margins as we enter 2022.
We expect to tie all material and then shipping cost would it be an ongoing headwind.
Margins, if we enter 2022 .
So we expect to partially mitigate this impact.
Speaker 4: price increases that went into effect on January 1st, 2021.
I think it says that went into effect on January 1st 'twenty to 'twenty two.
Operating expenses, excluding legal settlements and loss contingencies was 21, 9% of revenue.
Speaker 4: Operating expenses, excluding legal settlements and lost contingencies, were 21.9% of revenue compared to 21.2%
Compared to 21, 6% in the prior to Gail.
Speaker 4: primarily due to cost cutting efforts in the prior year to mitigate...
Primarily due to cost cutting gaffle seem to bother you.
So medium gate pandemic related impacts.
Our full year 2021 adjusted EBITDA was $68 2 million at 10, 6% margin.
Speaker 4: Our full year 2021 adjusted EBITDA was 68.2 million at 10.6% miles.
Speaker 4: compared to 62.1 million last year or a 12.8% mile senior.
Compared to 62.1 million lost deal Oh, it's what one 8% mulch.
Speaker 4: The year of the year changing margin primarily due to lower ghost margins and higher operating expenses.
The change in margin, primarily due to lower gross margins and higher operating expenses.
So revenue growth.
Speaker 4: as well as the result of our requisitions in the fourth quarter of 2020.
As well as the result of our acquisitions in default.
20th Duane.
Speaker 4: Adjusted a loed earning to share, while eighty three.
Adjusted diluted earnings per share was 83 cents compared to 48 cents in the prior year on the seeming a little shelf com.
Speaker 4: compared to 48 cents in the prior year on a similar share count.
Turning to our balance sheet.
Speaker 4: This was spent balance sheet as of December 31st 2021 included cash.
He's a SUNS balance sheet as of December 31st 2021 .
<unk> cash cash equivalents Shelton bank deposits and short and long term marketable securities of $94 2 million was the total debt to financial institutions of 12 five meters.
Speaker 4: short-term bank deposits and short- and long-term marketable securities of 94.2 million.
Speaker 4: with the total debt to financial institutions of 12.5 million, providing us with a solid netcash position of 81.7 million.
Providing us with a solid net cash position.
$81 7 million.
Our strong balance sheet leaves us confident.
We have ample resources in place to execute our strategic initiatives into 2022 .
Speaker 4: that we have ample resources in place to execute further our strategic initiatives into 2022.
Moving to our outlook.
Speaker 4: We are pleased to introduce 2022 guidance for revenue to be in the range of 710 million to 725.
We are pleased to introduce 2022 guidance for revenue to be in the range of 710 million to 725 million.
Speaker 4: This implies growth of approximately 11% of the 2021 at the midpoint of the rest.
This implies growth of approximately 11% over 2021 .
Meet the point of the range.
Speaker 4: The drivers of growth are volume and price improvements in our key mode
The drivers of growth of volume and price improvements in all of the key markets.
Speaker 4: We expected just to de-bedize the percentage of sales to remain similar to compared to 2021. We anticipate higher sales
We expect adjusted EBITDA as a percentage of sales will remain similar to compel to 2021 .
We anticipate higher sales and selling prices to offset the increased cost in connection with all materials and shipping.
Speaker 4: to offset the increased cost in connection with raw materials and sheet.
Speaker 4: Our outlook also includes the investment cost associated with our global growth acceleration.
Our outlook also includes the investment cost associated with our global growth acceleration plan.
Speaker 4: With that, let me turn the call back to Yuval for closing comments.
With that.
Let me turn the call back until you file for closing comments.
Speaker 3: Thank you, Nahum. In closing, I'm happy with our 2021 results, which demonstrated tangible progress in executing our global growth accelerate!
Thinking at home in closing I'm happy with our 2021 results, which demonstrated tangible progress in executing our global growth acceleration plan.
Speaker 3: As moving to 2022, we enter an inflection point in our journey to become a $1 billion kind of top leader and see multiple growth leaders available to us to drive long-term value creation in our
As we move into 2022, we enter an inflection point in our journey to become a 1 billion dollar countertop leader and see multiple growth levers available to us to drive long term value creation in our business.
The integration of our New Orleans dummy clinical positions of expanding our addressable market.
Speaker 3: The integration of our Lioli and Omicron acquisitions are expanding our addressable market and we continue to carefully evaluate additional M&A opportunities that can bring meaningful synergy.
Continue to carefully evaluate additional M&A opportunities that can bring meaningful synergy as well.
Speaker 3: We are pleased with the successful rollout of our CS Connect platform in the US, which is helping to create a step change in the way we manage customer engagement and
We are pleased with the successful rollout of our <unk> connect platform in the U S, which is helping to create a step change in the way, we manage customer engagement and experience.
Speaker 3: based on the upward trajectory of our business and the strategic initiatives we have in place. I have utmost confidence in our ability to deliver on our near and long terms.
Based on the upward trajectory of our business and this was dziedzic initiatives. We have in place I have utmost confidence you know ability to deliver on our near and longer term goals I look forward to updating you further on our progress in the coming quarters. Thank you and we are now ready to open the call for questions.
Speaker 3: I look forward to updating you further on our progress in the coming quarters.
Speaker 1: Thank you. Ladies and gentlemen, at this time, we will begin conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad, a confirmation tone, indicate the line is in the question queue. You may press star two, if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hand set before pressing the star two.
Thank you, ladies and gentlemen at this time well be conducting a question and answer session.
Like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the Q4 participants using speaker equipment. It may be necessary to pick up your handset before pressing the starkey.
Speaker 1: Our first question comes from the line of Roving Gardeners with the Benchmark Company. Please proceed with your question. Good afternoon.
Our first question comes from the line of Reuben Garner with the benchmark Company. Please proceed with your question.
Good afternoon, everyone. This is Thomas Henry on for Rueben Garner.
Speaker 5: You mentioned both price and volume driving the double digit growth in 22. Could you give us a better sense of how much of the 11 points is attributable to both price and growth?
You mentioned, both price and volume driving the double digit growth in 'twenty two.
Can you give us a better sense of how much of the 11 points and attributable to both price and growth.
Yeah.
Speaker 3: Hi Thomas, thanks for the question.
Hi, Thomas Thanks.
Thanks for the question I think.
It's better to start with what we're experiencing as we all as we have now a much clearer path.
Speaker 3: Better to start with what we're experiencing as we are, as we have now a much clearer path of our global growth acceleration plan. We see a great outcome of this plan that we introduced in 2020, so in 2019.
Our global growth acceleration plan, we see a great outcome of this blend that we introduced in 2020, so in 2019.
Speaker 3: And now few gold engines are working in our direction. So it's more than just price increase. We see that our visible market for us is more than doubled as we are now servicing our customers with post-colon and metro stone
And now few growth engines are working in our direction. So it's more than just the price increase we see the visible market for royalties more than doubled as we all know.
Servicing our customers with the wholesale and <unk> still.
Speaker 3: together with Quarles. We launched a new go-to-market tool in the market based on technology advising our K&B business partners with a tool to manage the consumer journey or consumer purchase journey.
Together with with golf and we launch new go to market to them in the market based on technology.
Advising overcame be our biggest partners with a tool to manage the consumer journey or consumer purchase journey, we have now.
Speaker 3: We have now direct access to two new areas or regions flowing down high value in the US after the acquisition of Omicron and it's going well and we are growing them. And obviously we are now executing a much accelerated plan of our big box strategy in the US.
Direct access to two in U S.
Areas of regions flow, we don't have any in the U S. After the acquisition of only gone and it's going well and we are growing them and obviously, we are now executing a much.
Our accelerated.
A blend of our big box strategy in the U S.
Speaker 3: All you know, you see that kind of for all those gold engines together with new collections that we're going to be launching in 2022 I'll bring us to a double digit digit gold organically second year in a row and I believe it says sustainable for the coming years as well
All in all you see that kind of all these growth engines together with new collections that we're going to be launching in 2022.
Bringing us to a double digit growth organically second year in a row and I believe it is sustainable for the coming years as well.
Speaker 4: And to add to that, for 2022, the price increase that we introduced to the market January 2022 will have its impact gradually over the year. So the increase in revenue is partially attributed to those price increases that will impact up gradually and also to quantities, to higher quantities and higher demand.
And.
And to add to that full 20 twenty-two.
The price increase that we introduced to the market are generally a 2022 .
We will have it impact gradually over the year. So the increase in revenue is partially attributed to those but I think that will impact us gradually and also to to quantities to higher quantities and Io demand.
Speaker 5: All right, thank you. And just a quick follow up. Is there a flat margin outlook for 22? Is that implying that you will be trying to catch up with inflation as that pricing flows through the earlier part of the year and that will see improvement in the latter half?
Alright, Thank you and just a quick follow up is there a flat margin outlook for 'twenty two is that implying that you will be.
Trying to catch up with inflation as that pricing flows through them.
In the earlier part of the year and that we'll see a improvement in the latter half.
Speaker 3: Pretty much, as you...
Pretty much and as you as you are.
Speaker 3: just mentioned. I think it's important to say to mention that we are bringing back guidance to our revenue as we have a much greater confidence in our growth journey as we are becoming more the growth company and we issue the guidance of $710-$725 million in revenue.
Just to mention I think it's important to say to mention that we are bringing bad guidance brings back to guidance to our revenue as we have a much greater confidence in our growth journey.
Becoming where all the growth.
Company, and we issued the guidance of $710 million to $725 million in revenue.
Speaker 3: In language that, with the volatility that we've seen in the market, in commodities and in the market economic inputs, we will be demonstrating quarter of the quarter of the margin improvement and growth and growth margin improvement.
None with that with the volatility that we've seen in the market in commodities and the monthly economic.
Inputs, we will be demonstrating quarter over quarter on the margin improvement and growth.
EBITDA and gross margin improvement, but at the moment, we are catching up with the <unk>.
Speaker 3: But at the moment we are catching up with the EBITDA margin, so we believe it's going to be quite similar to the year before.
With.
The EBITDA margin. So we believe it's going to be quite similar to the year before.
Speaker 5: Excellent, thank you. And one final question from me. Are there any geographies outside of the US that you're expecting to be material leaders or laggards from a material volume standpoint?
Excellent. Thank you and one final question for me or.
Are there any geographies outside of the U S that you were expecting to be material leaders are laggards from a material volume standpoint.
Speaker 4: In 2021, we saw improved demand in all territories and we expect this trend to continue into 2022, not only in the US but also in other regions as well.
In in in 2020 , one we saw.
Improved demand in all territories.
And we expect and we expect this trend to continue into 2022 .
Not only in the U S. But also in other regions as well.
Alright, Thank you very much everyone.
Thank you so much.
Our next question comes from the line of Stanley Elliott with Stifel. Please proceed with your question.
Speaker 1: Our next question comes from the line of Stanley Elliott with Steeple. Please proceed with your question. Hey everybody.
Hey, everybody. Thank you guys for taking the question.
Speaker 5: Quick question, can you talk about how you guys are operating at the plant level? Through-put yields just curious.
Quick question can you talk about how you guys are operating at the plant level throughput yields just curious to see how the footprint is performing and then any update on what's happening in Savannah in terms of adding additional capacity down there.
Speaker 6: The footprint is performing again. Do any update on what's happening in Savannah in terms of adding additional capacity?
Yeah.
Hi, Stanley good to hear good to hear from you and me and gave me.
Speaker 3: Hi Stanley, good to hear from you and in CABE. I will start with Richmond Hill facility and then I will be completing the rest of the question. We are experiencing quite a nice improvement in our efficiencies in Richmond Hill plant and we are adding capacity from quarter to quarter.
I will start with the Richmond Hill facility and then we'll be completing the the rest of the question.
We are experiencing a.
Quite a nice improvement efficiencies in the Richmond Hill plant, and we are adding capacity from quarter to quarter.
Speaker 3: The capacity is not, we are not utilizing full capacity yet in 2022, but we are approaching that full capacity over the, I would say 24 months or so. So all in all, the Richmond University is helping adding more and more capacity and volume to our business to serve our customers in the US as our business is growing and growing quite rapidly in the US.
The capacity is not we're not utilizing full capacity yet.
22, well, but we are approaching that.
Capacity over the I would say 24 months or so so all in all the which went in facility.
Adding more and more.
Capacity and volume to our business to serve our customers in the U S. S business is growing and growing quite rapidly in the U S.
Speaker 4: And for the Israeli plants, Q4 was a good quota in terms of utilization without any major changes from prior quota.
And for a win for the Israelis.
And standing for the Israeli plants Q4 was a good quarter in terms of utilization.
Oh without a without any major without any major changes from prior quarters.
Speaker 6: Great. And with transportation costs be an higher. I mean, how are you guys doing in terms of finding alternative sources for some of your material inputs? Just kind of thinking about the supply chain impact.
Great and with transportation cost being higher I mean, how are you guys doing in terms of finding alternative sources for some of your material input.
Just kind of thinking about the supply chain impact.
We are constantly looking before.
Speaker 3: We are constantly looking for subject materials and locations so we can maintain our efficiency and the maximum. Yet we are experiencing increasing in cost.
Substitute materials and.
Locations. So we can maintain the efficiency.
And the maximum yet we all experiencing increasing in cost something we are intending to mitigate with the price increase we issued effective on the third of the generally and it's in the it will be manifests itself too.
Speaker 3: Something we are intending to mitigate with the pricing to is we issued effective on the 3rd of January . And it will be manifest itself to the P&Ls quarter with gradual improvement until year end.
The P&L is quarter after quarter with gradual improvement until year end. So all in all I believe we are mitigating those costs and we are not at the moment, we're not taking any any potential upside in our view is that we'll be advising us it will be on the top of our ongoing improvement from quarter to quarter.
Speaker 3: So all in all I believe we are mitigating those costs and we are not at the moment, we're not taking any potential upside in our view. If that will be advising us, it will be on the top of our ongoing improvement from quarter to quarter. Perfect, everyone.
Perfect everybody. Thank you so much best of luck.
Thank you.
There are no further questions in the queue I would like to hand, the call back to management for closing remarks.
Speaker 1: There are no further questions in the queue. I'd like to hand the call back to Matt as a Missile Closing remark.
Yeah.
Speaker 3: Thank you for your attention this morning. We look forward to updating you on our progress next quarter.
Thank you for attention. This morning, we look forward to updating you on our progress next quarter.
Thank you.
Speaker 1: Ladies and gentlemen, this does include today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Thank you. Thank you.
Yeah.