Earnings Call: Q1 2021

Apr 29, 2021

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Amplifon First Quarter twenty twenty one Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations Director of Amplifon. Please go ahead, madam. Thank you. Good afternoon, and welcome to Amplifon's conference call for first quarter twenty twenty one results. Before we start, few logistic comments. This morning, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial in details, which are always on Amplifon's website as well as on the press release. I have to bring your attention to the disclaimer on Slide two. Some of the statements made during this call may be considered forward looking statements. Please also let me drive your attention to the fact that from this quarter, we are also reporting 2019 income statement data for greater comparability purpose given the impact of COVID-nineteen outbreak on 2020. The commentary will be therefore also based on these figures. With that, I am now pleased to turn the call over to our CEO, Eric Oviatt. Thank you, Francesca. Good afternoon, everyone, and thank you for attending our conference call on our Q1 results. So we are at the beginning of what I believe is going to be an important year for our industry. And in fact, we are at the beginning of a year that I'm pretty sure we'll see some players emerge stronger from the pandemic and some other get weaker. And we feel we are well very well positioned. We are well positioned, thanks to all the work done last year by our organization, by our teams to become even more efficient and effective. And also thanks to our confirmed commitment to the pillars of our strategy, keeping investing significantly on our people, on our brands, on our Ampliform product experience and also on our M and A strategy. So we started off the year in a very strong way. We are very happy in a very strong way and even stronger than expected just at the beginning of this year. All the three regions reported strong growth despite some markets were affected and are still today affected by some sort of restrictive measures. And they refer, for example, to markets like Germany or Italy even. And we estimate we have once again grown share in all the main markets. So let's now go to see our numbers for Q1 in the next chart. Since the performance of Q1 twenty twenty was already affected by the pandemic, I will comment with you our results primarily in comparison with Q1 twenty nineteen, which I believe is a more meaningful base. As you can see, total revenues were up 12.5% at constant ForEx, and we reported a very strong organic growth, which was over 8%. Very positive is that, as said before, all the three regions contributed significantly to these results. Meaningful was also the contribution from acquisitions around 6%, mainly related to the acquisition of PGIC Hearing in The U. S, Aptune in Australia and the bolt on acquisitions in EMEA. With regards to the integration of PGIC Hearing in The U. S, I'm also very happy to share that everything is going well so far. The team there is doing a very good job, and I'm very confident that this business will be a great addition to our business in The U. S. The currency effect was negative by 1.6%. At the same time, we have been able to increase our EBITDA margin by 180 basis points from 20.1% to 21.9% and even after significant increase in our marketing investment of about 15% in the period. A material contribution to these results came from Spain, thanks to the synergies related to the integration of Geis. The cash flow generation was excellent as well. Our operating cash flow increased double digit versus Q1 twenty twenty and almost doubled versus Q1 twenty nineteen. So all in all, I believe today we are presenting a very strong set of results, and we are very pleased about these results. I now hand over to Gabrielle to give you more colors about our performance in numbers. Thanks, Enrico, and good afternoon, everybody. Moving to chart number five, we have a look at the EMEA outstanding financial performance. As Enrico mentioned, since the performance of Q1 twenty twenty was already affected by COVID -nineteen outbreak, especially with regards to EMEA and APAC, I will comment our result primarily in comparison to Q1 twenty nineteen, representing a much more meaningful comparable base. In Q1, revenue growth was 9.5% at constant Forex, with a well above market organic growth at 6.8%, despite restrictive measures still in place in several markets. M and A contribution was 2.7% for bolt on, primarily in France and Germany. Very strong organic growth was reported in France also driven by the recent regulatory change, Italy and Spain. Weaker performance was instead recorded in Germany and UK due to the more severe restrictive measures still in place. EBITDA amounted to €82,800,000 up around 34% versus Q1 twenty nineteen with margin at 26.6%, up four eighty basis point versus Q1 twenty nineteen, thanks to improved efficiency and productivity as well as to the outstanding performance of Spain following the synergies stemming from the GAIS integration. Moving to slide number six, we have a look at Americas' excellent performance. In the quarter, revenue growth was around 34% at constant Forex versus Q1 'nineteen with an organic growth at 17%, thanks to an excellent and well above market performance in The U. S, driven by the very strong performance of Miracolier. Double digit organic performance was also reported both in Canada and LatAm. M And A contribution was around 17% versus Q1 twenty nineteen, primarily reflecting the recent PJC hearing acquisition. As anticipated by Enrico, this amount entirely reported in the M and A line reflects both the consolidation impact of PJC since January 2021 as well as the very strong organic performance of PJC in the quarter. Total ForEx was negative for 11.5% due to the euro appreciation versus U. S. Dollar and LATAM currencies. EBITDA amounted to EUR16.3 million with margin at 21.2%, up 100 basis points versus Q1 twenty nineteen, also after continued reinvestment in the business, thanks to greater efficiency and productivity. Moving to chart number seven, we have a look at APAC, which showed an outstanding performance across all markets. In Q1, revenues were up 18% at constant Forex, driven by a strong organic growth of over 8%, also despite localized and temporary lockdowns both in Australia and New Zealand at the February, early March. M and A contribution is related to Atune and accounted for 10% versus Q1 twenty nineteen. Forex was slightly positive. In the quarter, New Zealand and China posted double digit growth not only versus Q1 twenty twenty, but also versus Q1 twenty nineteen. Australia also reported a positive performance versus Q1 twenty nineteen with a significant acceleration throughout the quarter. EBITDA amounted to €16,000,000 with a 14% increase versus Q1 twenty nineteen. The EBITDA margin came to 30.2, down 130 basis points versus Q1 twenty nineteen due to the very challenging comparison base. Moving to slide number eight, we can appreciate the profit and loss evolution. Total revenues increased by 12.5% to €441,000,000 with an excellent 8.4 organic growth versus 2019. The structural efficiencies and the productivity enhancement derived by the decisive measures implemented last year led the EBITDA margin at 21.9% with an improvement of 180 basis points versus Q1 twenty nineteen. Total recurring EBITDA increased by 22.3% around €18,000,000 to €97,000,000 Reported figures include €2,400,000 cost related to Geis integration and to the redefinition of the corporate structure of Amplifon SPA. Following the strong investment plan during the past quarters, D and A increased by around €8,000,000 leading the recurring EBIT to around €44,000,000 with a growth of 27% or €12,000,000 versus Q1 twenty nineteen. Net financial expenses accounting for around €7,000,000 led profit before tax to €36,000,000 from around €28,000,000 in Q1 nineteen, posting a 31% increase. Tax rate, as usual slightly higher in the first quarter versus following quarters due to seasonality, posted a 130 basis point reduction versus 2019 from 32.2% to 30.9%, leading recurring net profit at €25,000,000 with an increase of 33% versus 2019. Moving to Chart nine, we can appreciate the cash flow evolution. Operating cash flow after lease liabilities was in the period equal to €68,000,000 versus 61,000,000 last year, which already reflected the action implemented in March to mitigate the COVID-nineteen impact, posting an improvement of €7,000,000 or 12%. The comparison versus Q1 twenty nineteen shows an outstanding improvement of €33,000,000 with operating cash flow almost doubling versus 2019. Net CapEx decreased by around €1,500,000 to around €15,000,000 leading free cash flow at €53,000,000 versus €44,000,000 last year, posting a growth of €9,000,000 around 20% versus last year. Versus Q1 twenty nineteen, the improvement of free cash flow is over three times. Net cash out for M and A was €32,000,000 driven by bolt on acquisition in EMEA versus €42,000,000 in 2020, primarily related to Atune acquisition last year. The share buyback program executed in the quarter absorbed over €30,000,000 leading net cash flow for the period to over €7,000,000 positive versus €2,500,000 negative in Q1 'twenty, leading NFP at €625,000,000 with an improvement of around 165,000,000 versus Q1 twenty twenty and further improving despite seasonality versus €634,000,000 at the end of twenty twenty. Moving to chart 10, we have a look at the debt profile trend and key financial ratios. As mentioned in the previous chart, the net financial debt closed at €625,000,000 with liquidity accounting for positive €558,000,000 shorter debt accounting for around €121,000,000 and medium long term debt accounting for around €1,060,000,000 This confirms the very strong financial profile of the group with over €800,000,000 financial headroom, including undrawn revolving credit facilities after the continuous improvement of the net financial position and the completion of the financing program executed last year. Following the IFRS 16 application, lease liabilities amounted to €428,000,000 leaving the sum of net financial debt and lease liabilities to 105,000,000,000 Equity ended up at €831,000,000 with an increase of around €30,000,000 versus December. Looking at financial ratios, net debt over EBITDA ended at 1.44 with a further reduction versus December 2020 by around 20 basis points, representing the best result after the completion of the successful Geis acquisition. And net debt over equity ended up at 0.75 posting a reduction versus 0.8 at the end of twenty twenty. I would now hand over to Enrico for 2021 outlook. Thank you, Gabriela. So as usual, we are at the end of our presentation for today. Looking ahead, even if some degree of uncertainty still persists, I now believe that the visibility on the next month is improving day after day. April trading is going well, and we expect our market to continue to normalize during the year as COVID-nineteen vaccines are administrated. In light of this situation, we now expect revenues for the full year in the region of €1,930,000,000 And of course, as said, this target reflects and takes into consideration some caution due to the fact that we can't say that the situation is 100% solved yet. Also, I can confirm that in terms of profitability, we expect to continue to reap the benefits of our actions implemented since Q2 of last year. And therefore, we aim to achieve a significant margin improvement compared to 2019 in the region of 180 to 100 basis points. Looking further ahead, we remain very positive, as usual, on our prospects of growth as we confirm our strategy and our investments, and therefore, we confirm what is crucial for the medium and long term development of our company. And now let me now hand over to Francesca again. Thank you. Thanks, Enrico. Before I turn the call to the operator, please kindly limit to your questions to maximum two initially in order to give everybody the opportunity to ask questions. Now I turn the call over to the operator in order to open the Q and A session. Thank you. Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Session. The first question is from Niccolo Stoehr with Kepler. Please go ahead. Hello, good afternoon. Good afternoon, everybody. I have two questions for you. The first one is on your revenues guidance. In Q1, you grew 8.4% organic. And if I make some calculation, your guidance implies lower growth versus 2019 compared to the one of Q1. So I was wondering why you are adopting such a cautious stance given the fact that probably going forward the comparison should become easier and easier versus 2019 of course. The second one is on profitability Probably also with stronger than previously expected top line, you're still guiding for the same 180, two hundred bps increase. Why this? And also, so why this, I mean, you planning further expenses offsetting the operating leverage effect that you're going to have? And related to that, on profitability in APAC, which was down compared to 2019, you spoke about a tough comparison base. But if I look at 2019, '20 '19 was already lower than 2016, '20 '17, '20 '18. So if you can give us some color also on this drop in profitability in APAC. Thank you. Thank you for the questions. So with regard to the first question and therefore to the guidance on revenues, I would say a couple of things. The first one, you need also to take into consideration that the comparable base in the second half of this year versus the same second half of twenty nineteen is going to be definitely much more challenging than in the first half. And in some way, our guidance reflects this. But also, I would say that, as I mentioned during the presentation, our guidance in terms of revenues reflects and take into consideration the fact that we can't say that the situation is yet solved 100%. And therefore, in this guidance, it's also included some sort of caution for that. So at this stage, we believe that this is quite a fair assumption for the full year. With regards instead to the profitability, we said that our target in terms of profitability was not depending so much on the level of revenues. We said this during our last conference call also because we could flex our cost according to those. And in this case, I believe that a target of 180 basis to 100 basis points versus 2019 is a real and remarkable, remarkable target and very strong target. With regards then to the third part of your question and therefore, the profitability of APAC, I would say that this also is reflecting the investments that we are making in the APAC region, following from one side our switch from the local brand National Hearing Care to Amplifon, which we have mentioned now for a few times. So we have in Australia, we have rebranded all our stores to Amplifon. Now Amplifon is our brand And in order to support these activities in terms of rebranding, are investing quite a lot in terms of marketing, and we are very happy to do so because from one side, we are building a much stronger brand, a global we are present in Australia now with our global brand. And from other from the other side, I believe that these investments, which have been quite significant in particular will be quite significant this year, will support also our objectives in terms of growth in the private market. Finally, let me say that I'm more defined with a region with profitability above 30% in a low seasonality quarter. So I'm more than fine with that. Sure. Thank you. The can we say that to conclude that you're not facing any kind of price pressure in the No, no, no, no. Not at all. Not at all. It's just I mean, the profitability, which, again, is above 30%, is just reflecting of the fact if you have time, you can go to YouTube and look our new advertising in Australia. We are on AIRA. It's the biggest investment on airing TV, I mean, and it's the biggest investment ever done in Australia on TV. And as I said, it's a very decision that we have taken in order really to build the brand in a market, which is, of course, a core market for us and where we see the opportunity actually to build likewise in many other markets the number one brand of the market. Thank you very much. Very clear. The next question is from Aisha Noor with Morgan Stanley. Please go ahead. Great. Thank you for taking my questions. I have two please. The first is on The U. S. Market. Could you talk about your growth reference market in The US and what's driving the strength in Miracle Ear given we've seen other market players report much lower growth rates relative to you? Question number two is more of a longer term question around lead generation. In the last few quarters, we've seen a few companies come to market. They're offering digital or online hearing care with a strong focus on digital lead generation. So I guess my question for you is how do you see yourself positioned versus competitors? And do you think online lead generation is the way forward for your business? Thank you. Sure. Thank you. Thank you for the questions. So with regard to the first question about The U. S. Market. In The U. S, the reported numbers are about are telling us that The U. S. Market has grown in the first quarter double digits, I think, in the region of 10%, eleven % or 12%. However, as far as we also understand, these are sell in numbers, in figures. As far as we understand, these numbers are also reflecting the effects of an important stock in by a manufacturer into Costco, into a major retailer. And so this could have distorted in some way the reported number. But our growth was above our market reference. And in particular, is true for miracolier. We are doing extremely well in miracolier. And the kind of organic performance of miracolier was definitely very, very strong. Also in addition to that, we have consolidated PJC hearing, which is also doing extremely well. As I mentioned during the presentation, the integration is going very well. PJC and also our corporate stores have reported a very strong growth. So again, I think that in general terms, in The U. S, we have continued to grow share, in particular with Miracle Ear. With regards to the second question and about digital lead generation, well, for sure, lead generation digital lead generation is part of our core business is how also we do lead generation in Amplifon. You know very well that we have invested progressively more and more on digital channels. We have grown our investments through the years to the recent years quite significantly. So it's nothing new to us. It's definitely nothing new to us. It's part of our way of making lead generation. And of course, it's becoming more and more important year after year. But really nothing new. Great. Thank you very much. Thank you. The next question is from Kit Lee with Jefferies. Please go ahead. Hi, guys. Thanks for taking my question. My first one is just on your organic growth on the monthly run rate in Q1. I'm just wondering if that organic growth has accelerated in March. And if you look at the April run rate currently, how does that compare to the Q1 performance? And my second question is just around pent up demand. I think 8% organic growth versus Q1 twenty nineteen, that's a pretty strong performance. I'm just wondering if you have seen any sort of pent up demand coming through. And how do you think about pent up demand for the rest of the quarters in 2021, please? Thank you. Yes. Thank you. Thank you for the questions. So with regards to our organic growth through the quarter, yes, we have seen some acceleration, although you have also to consider that in March, we in comparison with the same period of 2019. So with March 2019, we had two working days more. But yes, we have acceleration. I would say, as I mentioned that during my presentation, that also in April, we see a very positive trend, so which is in line with what we have delivered in March. With regards to pent up demand, of course, I mean, we have seen quite a strong recovery, and we are seeing quite a strong recovery. And I think that this is also reflecting some sort of pent up demand coming back to estimate how much it is pent up demand and how much it is underlying demand, etcetera, is not that easy. But as we mentioned also in the last quarters, for sure, you know very well that our services are not discretionary services. So what has been lost in 2020 because of the pandemic, we believe, will come back sooner rather than later. Certainly, on returning customers and maybe more in the, let's say, in the medium term on new customers. So definitely, we expect some effect from pent up demand also in the coming quarters. That's great. And just to follow-up on that. If you look at your sales mix today by existing customers and new customers, has that changed so far in Q1? Or is that quite in line with what you have seen in the past? Well, it's coming back to the usual ratios, which is more or less fifty-fifty. So it's coming back. It's coming definitely back to the normal ratios. Great. That's very helpful. Thank you. The next question is from Veronika Dubajova with Goldman Sachs. Please go ahead. Hi, guys. Good afternoon and thank you for taking my questions. I have three please, if that's all right. The first one is just on a full year guidance. And listen, I appreciate that there's still quite a lot of uncertainty and this is an evolving situation. But I guess, Enrico, if you were to look at the blue sky and say, okay, let's assume from here on, we have a smooth rollout of vaccinations as we go through the second quarter and the world does get back to whatever the new normal is by the time we get into summer and there are no big variants. What do you think you could do versus 2019? I mean, what would be a realistic kind of blue sky scenarios that you have penciled in your book that you're thinking about for the full year? That would be very helpful, if you can speak to that. So that's kind of my first question. My second question is for Gabriela, just a financial one, looking at the EMEA margin. I know you called out the guys margin improvement versus 2019. But if you could just decompose that four eighty basis points of margin improvement versus Q1 twenty nineteen between guys and the underlying business, that would be much appreciated. And then my kind of third question is just a follow on to one of the earlier questions. Just your desire to move not just into digital lead generation but into digital care provision? And I know this is a question that we've debated a lot, but I'm just kind of curious if your thought process on that has changed at all as we've gone through the last twelve months and you've seen your customers become more comfortable with the digital world, if not necessarily full outright remote sales, but some more hybrid models. Is that something that you're working on in the background and something that you're considering? Thanks, guys. Thank you. Thank you, Veronika. Thank you for your questions. So I will start with the last one. I would say that the pandemic did not change at all. And I want to say again at all our view about our services, about the customer journey of our customers. I think that we mentioned many times that our vision about the customer journey is an omnichannel experience where the physical interaction is still the core. But it's a customer journey where we can definitely that we can enrich adding to the physical touch points in the stores also digital touch points. And this is exactly what we are doing. This is exactly what we are working on. And also, in a way, this the pandemic has changed and switched many, many different businesses to digital propositions, which is something that did not happen, I would say, almost at all in our business. So in some ways, a confirmation of the fact that given the nature of our customers, given the nature of the hearing loss, which is a quite complex pathology, the best experience, the best results for our customers can be delivered through, let's say, an omnichannel experience made of physical interactions in the stores as well as additional new digital touch points in reaching the customer experience. With regards to the first question, and then I will leave to Gabrielle. As I said, I think that at this stage, our guidance is a fair guidance. It reflects definitely some level of caution because, as I said and as you know, the situation is not 100% solved. So if I have to imagine the rest of the year with no other issues, with no other problems, etcetera, etcetera, I think that definitely there is a possibility to go even over that. But I think that at this stage is a quite fair assumption. With regards to profitability of EMEA, leave to Gabriela, profitability. Profitability in general? Yes. Yes, yes, absolutely. No, Veronik, I mean, during the conference call a couple of months ago, what we said is that we do not give any guidance in terms of sales. Despite this, we can deliver 180, two hundred basis points EBITDA margin improvement. While not giving the guidance on sales, we gave a very strong communication in terms of current trading because we say that sales were very positive during the first couple of months. And today, of course, we confirm they are very positive, a little bit higher than what we saw during the first couple of months. So I understand and in your reasoning. So now your sales are probably higher than what was expected, during, the last conference call. So why operating leverage is not materializing and why you are not increasing the one eighty, two hundred basis point? The point is that, I mean, of course, as you can imagine, we, I mean, developed a strong ability in managing cost and investments during the last year. And we believe that this kind of margin expansion at this level of turnover can be achieved even after a very strong reinvestment in the group. We want to build up not only the quarterly profitability, but also a medium long term advantage versus competition. And so in our understanding, 180 to 100 basis point over 2019 means an EBITDA margin ranging from 24.5 to 24.7. And with such a number, if we are able to overinvest in the business, we prefer to do so to build for the future than delivering another ten, twenty bps in the quarter. That's the reason. Apologies, Gabriela. I think my question was much more specific to Europe and just looking at the significant margin improvement you delivered versus Q1 twenty nineteen. And I was just trying to understand what the contribution from Gaius was to that versus the underlying business. And if I can just a follow-up to my first question, Enrico, and I don't mean to be facetious, but why not sell digital? I mean, I look at some of the players Sorry, sorry, it again. Why? Why? Why not go digital and direct to consumer? I mean, yes, I look at some of the players, you look at the financials that Eargo is delivering, it seems like they're tapping into a new consumer market that wasn't there before. They're growing the total market. They it would be creating a funnel of consumers. I mean, I appreciate most of your customers are 70, but there obviously is a vast untapped market. And I guess I'm just a little surprised by your and just the general industry's reluctance to engage with that if it's creating a new incremental market opportunity that doesn't exist. Where is that reluctance coming from, I guess? Because I mean, ergo doubled sales in twelve months' time. It's a small number, but it's growing very healthily. So I'm just trying to understand why is it that you don't want to participate in that channel in that market? The answer is very simple to this. And the answer is that because we are planning to stay in this business for a long time, and we believe that you can deliver in particular. And when I say the peculiarities of our customers, I'm not relating only to the age, but also relating to their degree of hearing loss. Our customers have moderate to severe hearing loss, which is quite a complex pathology. And since, as I said, we want to provide to our customers the best solutions, the best services, the best customer experience that, in our opinion, in my opinion, can be delivered, I don't want to say only, but mainly through a customer journey, which is made of a part which is physical and a part which can be also digital. As you know very well that we have also we are also working on this now for a while, and we will continue to work in order to enrich the customer journey of our customers with digital touch points. So and I think that for us to deliver the best service, the best customer experience to our customers is definitely the priority number one, which is also what has allowed us also in the past to detach, if you want, in a way from a pure logic of price. Regards to the EMEA? The EMEA, sorry if I understood about the global profitability. Regarding EMEA, as Enrico stated, there are the two contributions. So Gaius is a significant portion, but, of course, may account for 20% to 30% over the overall improvement of EMEA, while the remaining part, so let's say two third, is linked to the efficiency and productivity measures that we implemented last year, we put on our, I mean, ability to deal with the cost base, and, you you will see this improvement, I mean, going out, through the different quarter of the year. So, guys, as Henrico stated, that he is really performing very strongly. Actually, compared to the initial guidance we gave of 20 to 25, then €25,000,000. Today, we are in a completely different order of magnitude. And in the medium term, there will be further improvement because as we say that at the end, Spain is not so different country compared to Italy in terms of potential profitability, thanks to the very good average selling price, thanks to the lower cost base, and also thanks to the very strong, I mean, market share around 50%. But, I mean, there is still a potential in improving this profitability. But today, we already achieved a significant portion leveraging on, I mean, COGS reduction, the first reorganization at the February, and also, I mean, indirect purchasing, reduction optimization. So, today, the the the initial guidance is beaten. But, again, Spain is just a part of the improvement. Also, other countries are performing very well. Also, some of them are reaching the the critical scale, on a country base. Okay. Thank you guys so much. Thank you. Thank you. The next question is from Julien Wadour with Exane BNP Paribas. Please go So I have two, please. The first one, speaking of profitability again. So you did achieve 180 bps margin improvement versus 2019, and it was despite a very strong investment and especially in marketing. I think where you're spending was 15% above 2019. So I guess you you Correct. Yeah. So, I mean, you could achieve even more, like, without such strong investments. Just to help us to understand the outcome of this investment, especially given now your marketing is much more efficient than pre COVID. Just what have you seen so far in terms of the impact on the business? And will you say that you could be able to generate an even higher organic growth in the future than you did pre COVID because of that, because of this higher marketing spend? And just to finish on that, could you help us to forecast the corporate cost for the remaining quarters of the year? Should we expect around €20,000,000 spending every quarter? And the second question is on your guidance, so €1,930,000,000 top line revenue for 2021. It represents approximately 24% sales growth year on year. Could you maybe help us to understand how much is organic and how much from M and A? Thank you very much. Very good. Thank you. Thank you for the questions. So I will take the number one and the number three, and then I will leave to Gabriel about corporate cost. Well, yes, absolutely. I mean the objective of our very strong marketing investments is to ensure the sustainability of our future performance in terms of organic growth in the medium and long term. Our objective is very clear. We want to have the number one brand in all the main geographies in which we are operating. And this is, for example, what we are doing in Australia, as I mentioned before. In Australia now we rebranded National Hearing Care, which was a brand known in the market but not so strong in the market. And therefore, we rebranded to Amplifon in order to build and to leverage on our global brand. And now we are investing significantly in Australia in order to strengthen the awareness the equity of the brand. I think that I mentioned a few times that in our sector, having strong brands, having trusted brands is of paramount importance. And this is what we will continue to do also in the future in order to ensure the sustainability of our growth in terms from an organic viewpoint also in the future. With regards to corporate costs, Gabriela, maybe you can give some more. Absolutely. Absolutely. So corporate cost is something on which, of course, according to the market condition, we can play to push more for, I mean, improving our organization, transforming our organization and something that, of course, in particular quarters or period such as last year when COVID was there, I mean, you can act in order to reduce a little bit the speed of development. So what we did during Q1, of course, given the positive market condition, given the positive performance, we went on full speed with big corporate projects, meaning projects for global marketing, global IT, global purchasing in order, I mean, to build up all these level of capabilities that we need in order to grow and perform better than the market. All in all, this resulted in around a €20,000,000 cost, which represents around 4% of our revenues. Moving forward, I think that this is a sound percentage when market is performing. Of course, you can see maybe the same percentage on a quarterly basis because of seasonality. So some quarter turnover is higher, especially q two, q '4. Some percentage may be a little bit lower. Some other quarter are a little bit smaller, q three. But all in all, this is a sound level of investment when we see that the market is there. With regards to the third question about the, let's say, the split of the total growth between organic and M and A, I would say roughly, you can consider about 60%, two thirds being organic growth and the rest acquisitions. Thank you very much. The next question is from Oliver Metzger with Commerzbank. Please go ahead. Hi. Thanks a lot for taking my questions. The first one is on the M and A opportunities. Just you talked about PJC, which is might be something extraordinary, but the normal course of acquisition, so normal stores and the chains. Where are you right now? Is it already a pickup in M and A activity? That's the first one. The second one is, you mentioned that U. K. And Germany were still impacted by restrictions in the first quarter. If you look right now on these markets, is it already a normal situation? And is also your comment related to the fact that both markets showed a higher result in the first and second quarter of last year? And finally, also a quick question on your marketing expenses. So right now, are you already on a normal level? That's all. Thank you. Thank you so much for your questions. So with regards to the first question about M and A, yes, as I also mentioned at the beginning of my presentation, I think that the pandemic will bring some changes in the market. I think that the strongest players will get stronger, other players will get weaker. So it is our intention to exploit this moment, this situation and also in order to accelerate on our M and A activities. For sure, we will continue to invest in Germany, in France, where we still have room for increasing our network. We will as we mentioned a few times, we are also aiming to enlarge our footprint in China. So definitely, we envisage an acceleration in our M and A activities as well. With regards to UK and Germany in the first quarter, yes, both markets were affected heavily by the situation. In the recent weeks, whilst in The UK, we have seen a significant improvement, but you know that The UK does not represent a large part of our business. Today, The UK accounts for something like 2% of our total revenues. In Germany, we have not seen yet a material improvement. So in Germany, still, the market is not recovering as we have seen in other markets. The last question was about marketing investments. Yes, we have we are now definitely restarted now since a few months to reinvest significantly in terms of marketing. Also, building on what Gabrielle was saying before, given also the very positive trend that we have seen in terms of revenues, we are even accelerating our investment. I think that this is something that you should see as very positive because we wanted to really build in this moment the best brands, the best positions in our market in order to leverage on our scale, on our possibility to invest and to overinvest some time in order really to create even a bigger competitive advantage to our competitors. So this is exactly what we are doing and what we will continue to do. Okay, great. Thank you very much. Thank you. I think we have time for one last question. So I kindly ask the operator for a last question. Thanks. So the last question is from Domenico Gilotti with Equita. Please go ahead. Good afternoon. Very few questions. The first is still on the margin and profitability because in Q1 you were back in line with your guidance. I wonder but the mix was a bit, let's say, different from area to area. And so I wonder if you expect to be more balanced on a full year basis. So we should expect, despite the marketing investment in APAC, to have a recovery and maybe also an acceleration in North America or Americas. And my second question is a follow-up on the M and A. You're running more than €30,000,000 in Q1, and your comment is very, very pushy. So I would expect the full year to end with investments, say, north of €100,000,000 or 120,000,000 I wonder if you can confirm this. And the very last is your commitment on the Capital Market Day. Should we expect Capital Market Day in the next few weeks or months? Yes. Thank you. Thank you, Domenico, for the questions. So with regards to the margin mix, I would say that directionally, you will see the same kind of margin trend. Definitely, EMEA will be the biggest contributor. Definitely, we'll in Asia Pacific, as I mentioned, we will continue to invest strongly in terms of marketing this year in the year of the rebranding to Amplifon. Americas will be, let me say, in the middle. So more or less, you will see the same kind of shape in terms of margin development across the three regions. With regards to the second question and therefore, M and A, I think that your assumption is quite fair. Of course, M and A does not depend only from us, but you say you rightly say that we are definitely quite keen on that. And therefore, the assumption that you have made is, I think, is correct. With regards to the Capital Market Day, yes, it is our intention to hold this event for the financial community before the summer. Definitely, yes. Okay. Thank you. Thank you. Thank you. Many thanks to all for participating in our call, and I kindly ask operator to disconnect. Thank you. Thank you, everyone. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.