Earnings Call: H1 2019

Aug 28, 2019

Good evening. Chorus Call operator speaking. Welcome to the presentation of the First Half twenty nineteen Results of of the Brunello Coccionelli Group. I'd like to remind you that all participants are in listen only mode. Following the presentation, there will be the opportunity to ask questions. Speakers will be Brunello Puccinelli, President and CEO Moreno Charapica, CFO and Pietro Arnabaldi, Head of Investor Relations. In order to receive help from an operator during the conference call, And now, I'd like to give the floor to Brunello Guccinelli. The floor is yours. Here we are. I welcome everybody. It's a pleasure to speak to you. I hope you've had some interesting and relaxing holidays. Well, as usual, I'd like to say that personally, I'm very fond of these conference calls because it is basically a time when we can talk to each other, discuss things and also draw conclusions, positive or negative. But before starting this time, I'd like to convey to you my big satisfaction, my satisfaction in particular for this historic agreement that the important listed companies in New York have signed a few days ago. And I'd like to read out what it says. In order to create value, one needs to also take a look at the environmental impact, the respect of the community and the dignified conditions offered to employees. So I wanted to congratulate all these companies with no exception. And I think that this is a great step in the 21st century. So it is a great thank you from my behalf because it is a great gift that you have done to the coming generations. Well, this call is very important for us because it occurs at a very special time for mankind. So thank you again for being here. So as usual, we are all here for you. And I'd like to give you the financial highlights and then the CFO, Moreno Charapica, will dwell on the details, will give you a bit more of a drill down. Then I'll resume the floor again in order to, 1st of all, give you visibility about 2019. So we are at the end of August already, The important initiatives ongoing. And then I'd like to give you quite a solid visibility on 2020 because the SpringSummer collections have reached their conclusion and also dwelling on the 3rd 3 year period until 2021. So I'd like to read out the financial highlights. Net revenues, €291,400,000 plus 8.1 percent the current exchange rate, 7.2 percent plus net constant exchange rate, visavis €269,500,000 at 30th June 2018. EBITDA €49,900,000 17.1 percent on sales. Net profit, EUR 22,800,000 with 7.8% incidence on sales. Italian international markets, plus 9.5 percent Italian market, plus 1.1 percent sales Europe, plus 9.7 percent North America, 9% percent China 15.9 percent and the rest of the world 5.3 percent all plus positive territory. Increase in all distribution channels, retail 12, mono brand wholesale adjusted 1.7% and multi brand wholesale 6.5%. Investments EUR 18,800,000 and net financial position EUR 46,600,000. This is my comments on the results. We are fully satisfied with our first half results in terms of both financial performance and the brand's image and buoyancy. We like to be identified as a made in Italy ready to wear luxury brand. Since it is the end of August, we can very serenely confidently envisage a particularly positive 2019 with revenues increasing in line with our long term expectations. The well famous 8% annual growth resulting, well, hopefully, obviously, in double sales over the next 10 years, along with a more than proportional increase of EBITDA with healthy and rising profits. The feedback following the order intake for the new springsummer 2020 men's collection as well as the first kidswear collection has been very, very positive. The latter is a great project we have put a lot of trust and energy in. The order intake for the springsummer 2020 women's collection has been just as good, and it is drawing to a close. As you know, it is very important the fact that we work in August, we are open for business. The current taste of the market, a very important element at least for us, is becoming very similar to ours. So we keep claiming the importance of investments to support the brand And the above strengthens our well founded optimism for 2022 when we expect further growth in revenues and profits in line with our long term guidance. And now I'd like to give the floor to the CFO providing you with the details and then I'll resume the floor again. Thank you. Good evening, ladies and gentlemen, and it's a pleasure to hear from you. Following the communication of the preliminary results on last July 11th confirmed in the final results, I'd like to start from Slide number 10, highlighting that the figures as of 30 June 2019 have all been reprocessed and presented eliminating the effect generated by the application of the new IFRS 16 principle in force as of January 2019 in order to allow for the comparability of figures with June 30, 2018. The impacts of the IFRS are reported in the slide of the annex on Pages 18 19. As of June 30, 2019, sales grew by 8.1% at current exchange rate and 7.2% at constant exchange rate with a positive impact of currency that was just below 1% because of our very careful hedging for foreign risk. Because as you know, its objective is always that of neutralizing the impact of currency fluctuation on the absolute value of EBITDA. Considering the current level of exchange rates and ongoing hedging, existing hedging, it is reasonable to expect a positive ForEx impact in line with the trend of the first half. The EBITDA in the first half of twenty nineteen amounted to EUR 49,900,000 with EUR 3,700,000 growth and margins in line with last year and amounted to 17.1%. The first margin increased significantly, I. E, 130 basis points from 65.3% to 66.6% due to a positive impact of like for like growth, I. E, 3.7% as of June 30, 2019, and the incidence of the retail channel shifting from 49.7% of last June to 51.5% of this June. This figure increased thanks to the new direct spaces among which three boutique openings and 2 conversions the last 12 months, some extensions of existing boutiques and 5 new spaces directly operated in concession within the luxury department stores. These spaces were previously managed with the wholesale formula. Operating costs also increased, mainly personnel and rents. And these costs have to do with the development of the business, the higher incidence of the retail channel and the new initiatives, in particular, the natural extension of the collection offer to kidswear starting from the next seasons and also the Made to Measure Suits initiative and the digital investments. The incidence of D and A increased from 4.4% of June last year to 4.8% June this year. And this, the LASA value is in line with our expectations for the full year visavis an incidence at the end of 2019 2018 that amounted to 4.6%. The incidence of net financial charges amounted to 1.0 percent visavis 0.4% of last June. This value had been positively impacted by the valuation of put options on minority stakes of subsidiary companies. We'd like to highlight that the incidence of net financial charges had been of 1.1% of 31st December 20 17 and 0.8% in the 31st December 2018, in line with a full year expectations. If we exclude the estimated tax benefit ensuing from the so called patent box highlighted in the box on the bottom right on Slide 10, the adjusted net income in the first half twenty nineteen amounted to EUR 22,800,000 visavis EUR 23,800,000 last year with a tax rate adjusted at 31.1%. This adjusted tax rate at the end of last year amounted to 29.5%. At the end of the year 2019, we expect an adjusted tax rate in line with the incidents reported as of 30th June, 2019. As you know, our group most of the group's taxable income is generated in Italy and the increase of the taxes in the first half was impacted by the effects of the repeal of this started this year, repeal of the ACE legislation, which is the economic growth aid. And then now moving on to the working capital on Slide 13. There was an increase of its incidence from 25.8 percent to 27.9 percent. As to inventory, incidence from 30.2% to 31.3% is really linked to the openings of new direct boutiques, extensions, conversions from the mono brand wholesale channel to the direct channel and the new spaces directly managed within the luxury department stores. On top of this, there was there were the following factors, an expansion of collections to children, kids wear, starting from springsummer 2020, but with an initial capsule collection for winter 2019 in selected spaces starting from the end of October, then made to measure, suits and the digital initiatives. Considering the healthy management of cash collection, the increase in trade receivables incidence from 12.0 percent to 13.9 percent is ascribable to the development of the wholesale business, whose sales as of 30 June 2019 improved by 6.5%, and it is also due to the increase of retail sales within the luxury malls and the payment terms. The organic increase of trade payables in Sweden from 13.1% up to 13.9% has to do with the increase in the business volume in the first half and in particular, it is due to the new initiatives besides the new important investments, including communication investments. As to the other credits and debts, negative by EUR EUR 19,800,000 visavis EUR 17,800,000 last year. And they have to do the valuation at fair value of the outstanding hedging derivatives. Investments and net financial position. Investments on Slide 14 of our presentation amounted to EUR 18,800,000 included in the multiyear plan to maintain our company modern over the long time, supporting our presence on the market and availing ourselves of the most innovative and modern productive logistic and IT structures. Commercial investments amounted to EUR 12,900,000 other investments EUR 5,900,000 and the latter includes investment for production, logistics and IT digital. In 2019, the bulk of investments happens and occurs in the second half of the year with an incidence of investments on the total revenues amounting to 8% approximately, as already mentioned previously. On July 29, as a long standing North American partner has accepted to sell their minority stake, we have acquired 30% of the share capital of the subsidiary company Brunello Cucinella USA Retail amounted to €4,500,000 and 30% stake of the Brunello Cucinelli Canada Company, EUR 2,200,000. These transactions enabled the parent company to hold 100% stake in both companies and the effects will be accounted for in the equity reserves in compliance with IFRS And the level of expected debt as of 31 December, 2019 will increase by the same amount. The net financial position as of June 30, 2019, Slide 15 amounted to EUR 46,600,000 against the EUR 44,030 June last year with a positive cash generation of the operating activity and a very healthy management of working capital. The NFP achieves its usual peak in between June September and then it drops towards the end of the year. Therefore, the debt expected at the end of the year, including the new ongoing initiatives and the impact on the working capital. So the debt is expected to be between 5% 6% of total sales. So this is the end of my presentation. I give the flow back to Brunello. Thank you for your attention. So here we are. So what about 2019? Because of course, it is drawing to a conclusion. In terms of product, it is a very important momentum for us. There is a very good momentum. As I was saying, the winter collection sales have set off to a good start. And an important thing is that we are shifting towards a men's and women's wear taste that is very suitable to what we feel is proper. You see, following many years of strong taste, we are now moving towards something that is less garish, more chic, more understated. And this is basically our nature. And we are happy with that because this way we can work with more serenity because for the less young among you at the end of the 80s there were exceptional Italian brands, Marmani and Versace, whose taste was exactly the opposite that and you see this is a very strongly perceived feeling. There is a lot of demand for luxury ready to wear, ready to wear, mind you. And for us, of course, this is very positive news. So we can say that in the coming years, well, in terms of taste, these years should be very favorable, very much in keeping with our taste. So we have just started our first discussions on the 2020 winter collection and we have stated the same. We have to keep pursuing novelty, a special visual merchandising able to describe your world. Stores and showrooms must be very fresh, new. And stepping into a store must be a great experience, experiencing the products, the manual skills, the creativity. This morning, we said something that I find very special. Undoubtedly, you see, as time passes, basically objects acquire, take on more value. And this is true. And this is something that you, especially you young people, value, you see. I'll just give you an example, just a couple of seconds. There's someone here in the village who loves cars. And he says to me Brunello, I really like this car because I changed one of its slides, I changed this and that, some different parts. But now since it is more difficult to actually act upon things with your own hands, you feel that these things belong to you a bit less. And the fact of being able to touch things is very important. Then the Internet, we have a great organization. We are very much poised and prepared for the coming years. This is actually a culture for us, not so much a technology. And we would like this technology not to steal our soul. We keep repeating this. And now I'd like to devote 3 minutes to the value of physical stores. We actually attach a lot of importance to the brick and mortar stores, especially for the luxury segment. Of course, it must be very welcoming, but what really matters is that the people working at the store must be fascinating and charming. We basically call them our brand ambassadors, the sales assistants associates. And because of this, we have started a school here at the village. You are well familiar that we are at same craft schools and by the year by the way, we're going to start this course for the fashion lady women's wear fashion, the so called premier in French. So basically, garment. So we have started this brand ambassador classes. Now for the time being just for men's because it is very important that when you basically step into the physical store, you are met with someone who is very friendly, elegant, refined representative and brand ambassador, someone who knows the brand down well. So this is a new initiative. And I'd like to mention 2 further important initiatives, the Sartoria di Solomeo that you're already familiar with. And it has already it is already developing nicely. We are already very satisfied with this initiative because we have many young people who opt for a made to measure suit or jacket, which means that maybe if you have a pattern textile, so not the whole suit, just the jacket, you are 35 year old and you wanted made to measure. This is precisely this was precisely our aim last year. You see The New York Times defined us as those who were able to dress the new 21st century CEOs. So we were very pleased. So the Scuola Satoria di Sonomeo is really developing nicely, taking on its suitable identity. So as you might know, 2.5 years ago, what we started conditioning, reconditioning garments. We have a great team, skilled team and we are also very pleased to recondition the garments made by other brands and we're very happy with that because if you actually recondition them, you have a new garment in your hands. Of course, this is especially true for menswear because if you have a great coat dating back to 18 years ago, maybe the lining is ruined. We can replace the lining and the coat is less brand new, is as good as new. For example, I usually wear the same 2 coats. 1 is 18 years old, the other one 20. I changed the lining twice because that's what basically lasts less. I started my business with colored cashmere, but also because I wanted to make products that were never to go to waste. I do not like to throw away things. I bought a bicycle and my hope is for my granddaughters to use this bicycle one day. So maybe you have a small flaw, a small defect and you go to the Beverly Hills tailor's shop. Send you ship your garment to us. It takes one day to mend and then we ship it back to you. And this is very interesting. Another project ongoing, we have devoted a lot of energy to it. It is the kids wear collection. We have dealt with this project in a very serious manner, 250 items for boys and 250 for girls. But numbers aside, I believe that this line is very important for the brand, for its image. There will be some dedicated spaces in stores for these items. And at run rate, we believe that kids should account for 4%, 5% of revenues. But what really matters besides sales, what really matters is the identity of the taste. And we have tried to achieve some sort of a mini me ready to wear. So we are very happy with this children collection for the identity, for the taste and hopefully for sales too. And then the Internet, you are already familiar with it. We still attach a lot of importance to this culture. In China, we have our own warehouse, China on China. And so we at the end of July, we decided to restyle the website we had created 2.5 years ago, so 7 years for the first website. And the second one, we felt the need to upgrade it 2.5 or to revamp it 2.5 years down the road. So at the end of September, beginning of October, there will be the e commerce on the one side. And then on the other side, we have tried to clearly identify the great themes that we value human sustainability, harmony with creation and the idea of humanistic capitalism because I don't want to repeat myself, but what happened 4, 5 days ago in America, you see I was very, very favorably impressed by it. I was struck by it. So this website will show very clearly what the values are on which our company rests. And that's basically what you analysts investors were asking from us. Because at the end of the day, I have the following impression. We were just talking about it today. We want to make a fair profit, but we also want to be useful. And in Italian, useful and profit is the same word. We want to do something useful for the word. We want to make profit and then we're to profit from it because maybe the positioning of the company comes before the positioning of the product, obviously. If the product doesn't work, the company does not work either. But if the product works, the company positioning has an extremely important value. We have made a great investment in London, a store to be opened next year. We are very happy, very pleased and we're also happy with the surface, 500 square meters. This is the typical size for great stores in great position, great prime position. And of course, the rent was not that low, but we never had this agreement with low rents in Milan or New York either. But I believe that the great location is very important for our brand because it will resonate also in the rest of the world. And that's our important transaction. Well, Moreno told you about, we reacquired 30% of the American company. So you see the ideal conditions happened with Massimo. Massimo is 52 now. He's been with us for 20 years. He has always been our man in the United States in North America and he's been with us for 20 years as I said. And we hope that we can keep managing together this great market, top market, 33%, by conveying this culture, this Italian American culture that is always very much appreciated. So to wrap up, we think that 2019 can be a very positive year. But for us, it is a year with great change for mankind. You see, I think that this overall idea of sustainability pervades everything. So we expect EUR 6 100,000,000 revenues in the years ahead and more the proportion of EBITDA, a fair profit. And just a couple of words on the tax rate. On average, over the last 7 years of a listed company, we paid 30% more or less more, right? But over the last 5 years, the patent box thanks to the patent box, we saw the tax rate drop to 22%, 24%. What I mean is that we do our business in Italy and you see I'm very much in love with my Italy. I want to keep manufacturing in Italy. So I'm very pleased with this tax rate. So if at the end of the day, the result is approximately 30%, 30%, it's fine by us. The dividend 2019, 10% more and they should represent 45% accounts for 45% of our profit. So investments around 8% for the year. But as we said a year and a half ago, do you remember when we mentioned that maybe luxury and fashion maybe because of technology or others? Well, I think that it needs massive investments. And then personally speaking, I'm always scared of my brand aging. So I keep saying I've always been scared of debt. As you know, my father says that debt works on Sundays too. But be careful, we must always be modern and contemporary. We very often mention the fact that you need to revamp your showrooms every 6 months. Your website, we thought it would last for 5 years whereas we have to upgrade it up 2.5 years down the road. So the net financial position could be around 5%, 6% of revenues. But honestly speaking, we do not feel that we carry that much debt, which means that if an important opportunity arises, we might seize it. For example, it's been we have been looking for spaces in Paris for many, many years and we haven't achieved results yet. But if it does happen overnight that a space becomes available, then of course, we will seize the opportunity. Of course, you can't always budget for unexpected opportunities. So 2019, a very interesting year. And now a couple of words on 2020 because we have a very high important numbers in terms of orders for men's, women's and kids. Since the collection has been extremely successful by with multi brands and press and the press, we feel that the collection is very well liked. And if the collection receives a positive feedback, then you basically face the following year with a smile on your face because of the positive feedback. That's why we feel that we are we're very confident about 2020. For 2020, we envisage the following: an 8 plus 8 percent revenues, more than proportional EBITDA, more than proportional profit. Yes, I wanted to mention something on this. When I talk about net income, of course, that because I base my consideration on the tax rate. But of course, if the government changes something, this does not depend on us. So 8% investments. As for dividends, we'd like to achieve 50%, the optimal level and net financial position improving in 2020 because 2019 is the most important year for investments. Then 2021 end of the 3 year period. And we keep envisaging for this year plus 8% sales, more than proportionate EBITDA, the same for profit, dividends 50% as established and an improving net financial position. So to conclude this call and before leaving the floor for questions, we'd like to say that 2019, 2020, 2021, the 1st 3 year of this 10 year plan are very important years in terms of numbers. But my dear friends, they're also very important in terms of taste because we are moving towards that kind of taste that really represents the identity of the brand. So we work at peace, knowing fully well that there are great changes taking place in the in mankind at large and we have to go with the stream. So thank you very much. And we open the floor for questions. We are available. First question from Flavio Cereda. Good evening, Brunello. Hello, hello, you. AC Milan Saposa. Well, I found out that I can actually ship you some garments that are not made by Brunello Castanelli and you reconditioned them. Well, seriously speaking, Flavio, for us reconditioning a sweater by some other brands really is nothing. But you cannot really understand, fathom what customers say to us when they receive this communication. And I think it is a very important thing. It will just be 2 or 3 garments at the end of the year. But what matters is the service. Sorry, I really wanted to apologize for interrupting. Well, after the call, there might be more than 2, 3 garments. No, it's been 3 years Flavio that we've been doing it. So I wanted to touch upon 4 themes. So this one for Moredo. So as far for the working capital, what about the reserves at the end of the year? And then the trade receivables, what is the risk especially with your North American customers? This is the first question. The second question on CapEx second half of the year and the transaction with Massimo that although you said he's 52, I hope he's definitely on holiday and there's some fancy destination. I don't know if he's at work now. So I wanted I was wondering why now? Not that I'm worried about it, but just out of curiosity, why now instead of a year ago? And the third question, over the last 12 months, you mentioned that there is more demand for understated garments. But are there some distinctions between menswear and womenswear, for example? And then if you also agree on the fact, that this is not your problem, it is an industry wide issue because of customer acquisition is growing especially for the industry. So one needs to spend more to attract more customers. And then last thing on sustainability. If you can disclose more of what you do. Yes. Moreno, the floor is yours. So North America receivables. As to the working capital, as of 30th June 2019, as far as well, we can imagine that the figures at this time of the year can be projected also for the full year. As far as trade receivables for North America are concerned, there has never been any losses on trade receivables in North America. You see ultra hyper selected customers never provided for any unpleasant surprises. Safav, I'd like to add that over the years in our business, we usually lose 0.1, 0.15 of our revenues without an insurance. Just think if we had paid an insurance for that. So we have always worked without worrying about the trade issue because we are talking about the most well, the wealthiest customers in the world. Of course, our most important customers, Niman Marcus and Saks, they are very serious and confident. And so we feel very confident about the payments are very regular with the payments and very punctual and very, very positive, very timely. So Flavio, as far as Massimo is concerned, we have known each other for 20 years. I have known him for 30 years. He's 53 years of age. So we discussed with him, maybe it is high time for you to have gained something for your family. We keep managing the company the same way. And I think it is the ideal solution for him and for us. As for the product, this is all this has always been the rule of fashion. As you can see from the demands of customers when they make their orders, Well, you can tell that the taste is going that way. The customers keep clients keep telling us that we will become some sort of beacon in the coming years because fashion is going that way. So we are the beacon reference company, not of course in terms of quantity, but because of the way we combine garments because the fit is more useful. And then I would but I would like to boast too much about this, Flavio. And then sustainability, a very important topic. As you know, you see, we did not use any plastics 20 years ago already because we prefer to use glass, for example, when we had lunch. By September, we want to disclose all this online. And then we will also provide employees and suppliers with a booklet about this, subcontractors. But we thought it was high time to actually talk about this. There are 2 or 3 articles on the press, one on the Avenirre, an Italian newspaper, and they all talk about sustainability. So hopefully, all this will be circulated online. It will be easier to find. At one point, I said, we I said that the company must come before the product. Of course, the product must work, otherwise the company shuts down. So the product comes first, but we have actually we are actually noticing that before making a purchase many customers or potential customers want to know about the company, how the company is doing. Next week, I'm going to China and we have 4, 5 events there. And all the great journalists keep saying to me, you should talk to us about mankind, the way you work, your craftsmanship. So it means that there is a great change in the offing. And that's why we said that this call is very, very important because I would have never expected these 200 companies to do this thing. Yesterday, I received a very important call from a Londoner. And he said, since you just faced that your friends came to your place in May, is that when they change their mind? I said, well, no, we're talking about companies that really represent 20% of the world GDP, mind you. But there is actually a need to make a profit, but also to make others profit from this. Oh, yes, investment, sorry, I forgot the last question. A year and a half ago, I said you see, I was inspired by Andrea Guerra, who used to say that a company should always invest 5%, 6% of sales to stay young and contemporary. And a year and a half ago, I said to you that I think that this is maybe not enough to be contemporary. You see every 3 days, you need to have a new video. And once upon a time, we would change the showroom once every 3 years and the pity stand once every pity booth once every 3 years. Now it's once every 6 months. In stores, you need to renovate at least once every 6 months. So I've always said that I've always feared those who are to hesitate and do not want to invest. If you invest enough, you will definitely be safeguarding the modernity of your brand. I'm 65 years of age and I have seen many, many companies with a lot of cash, but the brand was aging nevertheless. So I say to my young managers, let's invest. Of course, we're talking about net financial position of EUR 20,000,000, EUR 30,000,000 of €600,000,000 revenues, not €300,000,000 net financial position. Otherwise, I wouldn't know what to do with it. When we went public, we had EUR 45,000,000 EUR 46,000,000 net financial position and it was out of a smaller revenue. So it was higher than now. But that's why we need to seize all the opportunities that arise. But I'm always in favor of innovating, changing. This morning, we started working on the winter collection next year and we have made some changes inside the showroom. For example, the we have changed the armchairs from a dark gray to a lighter gray because we think that the colors will be lighter next winter. But I attached a lot of importance to this. Thank Next question from Paola Carboni, Equita. Good evening. Yes, hi, here we are. I have a few questions. First, if you can give us an update On what is happening in Hong Kong and Mainland China with your company, although you are less exposed than other players, but we wanted to have a feedback on this geography too. Then another point on the mono brand channel in franchising. What can we expect for the full year based on the timing of the conversions that have already taken place or of the coming conversions? And then one last thing on the working capital. Well, the inventory has been clearly explained and the trade receivables. But if I'm not mistaken, this is not a temporary development. So I'd like to know whether this is the incidence of net working capital we have to expect on a non annual basis. Yes. So CFO answering. As of the net working capital, as I said before with Flavio, envisaging that the incidence of June 30, while the incidence of June 30 of the inventory will be the same also usually it's the same for the full year. Trade receivables, there's a peak on June 30, and there will be some dwindling towards the end of the year because of the usual developments in the year. This is something we've always written on our report to the financial statements. It always normalizes towards the end of the year. Franchising channel, adjusting the conversions, we expect a full year growth that is the same as the healthy like for like between 3% 4%. Organic, an interesting figure for us because this means that we do not have to stress these stores. Well, I'd like to add, the CEO says that our franchising is we adopt the franchise formula for regions that are more difficult to reach or maybe there's not worth to set up company. So we have the best partner in Bulgaria, for example, and we enjoy a great relationship with them. Then China, we are very happy with the way China is performing. Things are going well for us. Hong Kong situation, you see for us, there is not a lot of business in Hong Kong. But Paola, I'd like to say that when we actually set up the budget at the beginning of the year, there is all we should always take into account some one off events, New York or Paris or an earthquake. Now there is the Hong Kong issue. But you see Shanghai is performing very well, Beijing, Chengdu as well. So it is not a problem for us. So at the end of the day, Hong Kong is not a large business. It's EUR 1.4 billion, EUR 1.6 billion. So even if you lose something there, our beloved China is nevertheless giving us 16%. It is already the end of August, so that's why we can have a view on the full year. Sales are performing well. So we are confident. We are confident. Thank you very much. Thank you. If there are no further questions, thank you very much for everything. Well, you see, I know that I have spoken a bit more at length than usual, but I really wanted to tackle the issues of sustainability and the great companies signing this agreement in America. And I hope that our children and grandchildren can maybe live in a better way. Whatever you might need, please give us a call. Thank you very much. Thank you. Goodbye.