Earnings Call: H2 2020

Mar 16, 2021

Okay. Good afternoon to everyone, and welcome to the conference call of 2020 Financial Results of Elan. Today's call will be recorded and before, there will be opportunity for questions at the end of the conference call. With me on the call, Andrea Candrill, Elen's Managing Director and Enrico Romagnoli, Elen's Chief Financial Officer and Investor Relator. Before we begin, please note that there is a remark that management makes on the conference call about future expectations, plans and prospects and forward looking statements. Certain statements in this call, including those addressing the company's beliefs, Plans, objectives, estimates or expectation of possible future results or events are forward looking statements. Forward looking statements involve known or unknown risks, including general economic and business conditions and condition in the industry the company operates and may be affected should the assumption turn out to be inaccurate. Consequently, no forward looking statement can be guaranteed, and actual future results, performance or achievements may vary materially from those expressed or implied by such forward looking statements. The company undertakes no obligation about contents nor to update the forward looking statement to reflect events or circumstances that may arise after the date year off. But at this time, I want to turn the call to Andrea Candiuli. So please go on, Andrea. Thank you, Nicolas, for the introduction. Thank you, Bianca, also for this introduction. Good afternoon, And welcome everybody to this earnings call that are holding after the release of the 2020 financials and the release of the guidance for Fiscal year 2021. As usual, Enrico Romano is joining me in the call. In a few minutes, he will go through the financial details after my brief introduction. Once again, we are very pleased with the performance of our group. In the most challenging environment we have ever faced, overcoming the restrictions The limitation that are still deeply impacting our businesses and our lifestyle, we managed to register a sales volume increase and a profit generation, which we did excellence in the circumstances. Our Q4 performance has been outstanding, Beating our own forecast and the fear of the impact of the restriction that were enforced in early November in Italy, Germany, France, among the others. Anticipating that notwithstanding the general economic problems that are evident and in front of everybody, Our activities are back on the path of solid growth of revenues and income that we had planned for the group. The pandemic hit us hard and forced us to deviate from that path. It slowed down our pace and cast A shadow on our performances. During this same earnings call that we held 1 year ago, I was reporting about the Chinese lockdowns that had forced us to close the plants in Puhan, Guizhou and LiDing. A few days later, Italy would have followed the Chinese model and we were forced to close or abruptly slow down in Italy and France all our activities. If I now look at the performance of this Q4 and compare it To our internal quarterly budgets, as we prepared them in late 2019, I noticed that we are aligned, beating them in certain segments. And finally, if I look at the momentum that our various business units Now in terms of orders intake, I see a situation that is very close to where we wanted and plan to be today when we did our planning prior to the pandemic back in 2019. I would like to spend a few words on what enabled such A strong comeback because we are, of course, happy of our latest results, but we are even more proud and happy for the grounds on which the results Are and have been constructed. The brightest evidence is our vision in planning our logistic and production infrastructure, who has been with us in the last years knows the extent of the investments that were put in place in order to expand our production capacity, both in the medical and the industrial area, but more heavily in the laser cutting business in Italy and in China. And of course, when I see that in Q4 2020, we doubled the number of systems delivered with respect of Q4 2018 in China, I'm aware we are aware that this could not have happened without the bold strides we have taken before. But the most important factor sits in the general capabilities of our organization, capabilities that are based on a very solid construction Developed new innovative devices, but the severe test of the pandemic brought out the resilience and the strong commitment that our people are dedicated to the company. The company played its role in setting up all the safety precautions and procedure that allowed The employees to work safely and most important to feel safe in the workplace. The response we had in terms of effectiveness Of the deliverables was outstanding. No single development milestone was missed even during the months in which we had to extensively Apply payroll protection programs that reduce available hours for the company and income for the employees. I believe that for myself as Managing Director and for all of you as shareholders Of the company, it's important to know how solid these base grounds of our business are. And during these times where Sustainability Infrastructure is very, very strong. The stronger traction in revenue growth is coming from the laser cutting business. We are active in this business in Italy with Elan, Venezuela is a company based in Bohang, Wenzhou and Linni. What has determined the sustained growth of this segment It's technological innovation and subsequent application breakthrough. The laser power available for laser cutting systems increased Exponentially in these last years, a couple of years ago we were thrilled of being able to use a 10 kilowatt laser source. We are now installing laser equipped with 30 kilowatt laser sources. At the same time, the cost of the laser sources progressively decreased, widely improving the cost effectiveness and both technical and economic productivity. As an effect, we are enjoying the opening of new application market, which become reachable, thanks to higher laser power. And we're talking of heavy duty applications in construction and also for manufacturing of large technical vehicles as an example. And we're also enjoying of the widening of the existing application markets due to the superior performance and affordability of the systems we currently offer. And we are enjoying this favorable phase based on our superior capability in integrating high power lasers on our system and based on our infrastructural and distribution footprint created by the investments I was mentioning before. Also the trend in Medical Laser Systems sales is encouraging. We did not reach the same volumes As we did in Q4 2019, in this Q4 2020, but Q4 2019 was a record quarter. But we had strong sequential growth in all the segments. Aesthetic was up in Q4, driven by the new hair removal products, which are also the backbone of our current order bookings, also driven by the sales demand for the products we locally distribute. As I mentioned before, the high volumes of sales booked for these devices, which bear A fairly small gross margin are one of the main reasons behind the gross margin reduction that we are showing on our 2020 financials. Urology and surgery are still struggling. Still the focus of the hospital systems is on COVID And the new ways of hospitalization are not helping since we will need a normalization of the situation in order to resume our growth. Neurology, we did very well in the consumable side. The sales of single or multiuse optical fibers used in each surgery where we mark a sales increase over 2019. Key new products launched in the second half of twenty twenty The new renewable device by DECA called again, the new chrome device by Quanta System, a Q switch Platform for dermatology and a new range of body contouring devices with of muscle stimulation by high intensity magnetic fields and the improvements of the existing devices based on microwaves, Onda or on superluminescent led matrixes. In the urological field, fiberDASP, the new system based on fiber technology is being launched covering a range gap that our competitors were trying to leverage against us. And finally, While we don't have exciting results in terms of sales for certain products like Monoriza Touch or the new acne, Acura Akin device, I can tell you that the good news there is that our excellent performance was obtained without a material contribution of these items And that the activities aimed to the launch or relaunch of these devices will eventually allow their material contribution That is not yet factored in our annual guidance. Prior to getting the details of the financials with Enrico, please consider one general Point that in Q4 2020, we incurred in a onetime non monetary expense of €2,100,000 due to our shares allocation to the managers of the Chinese entities. Net of this expense, Consolidated EBIT margin for the quarter would have been 10% and EBITDA margin 12.2%, beating Q4 2019 in these metrics, 2. I'm done with the Thank you, Andrea. And as usual, I'm going to give you some details on our last financials. Thanks to the record turnover of the Q4, the turnover of 2020 reached €408,000,000 of euros Exceeding the result of the previous year by 1.8%, and therefore recovering the gap that Head forward in the first half of the year. The gross margin stood at €141,600,000 Showing a decrease of 9.2% compared to the last year and the impact of gross margin on turnover goes from 38.9 percent in 2019 to 34.7% as of December 2020. The decrease derives from a reduction in margins that the crisis has induced on both the medical and industrial sector, all based in a different way. In the industrial sector, the goal of expanding market shares was also pursued by choosing To give up some marginal points, especially when competitive pressure in China becomes stronger after the pandemic. In the medical sector, the mix of products sold saw a lower impact of the higher margin segments such as surgery and Physiotherapy. While in the Aesthetics, the turnover remained at the level of 2020, also thanks to the significant increase in sales of some products but without lower marginality. Operating costs amounted to €34,000,000 Down compared to the EUR 43,000,000 of 2019 and the impact on turnover reduce from 11% to 8.4 The savings derived mainly from S and M expenses due to the limitation to travel and from the cancellation of all fair and congress events. The amount of staff in 2020 was equal to €66,700,000 On the same level of last year, but as already mentioned by Andrea, there was a onetime cost of €2,100,000 registered by Pentel Azerwind. And excluding it, the reduction in labor cost is mainly due The government payroll protection program, such as the Casa Integrazione in Italy, used also in France and in Germany, mainly in the 1st 6 months of the year. On December, the employees of the group were more 1600, and the new hires We're mainly in China, where the factories are working at a full capacity with a volume exceeding the volume of last year. EBITDA was €40,800,000 down by 11.9% compared to the $46,300,000 last year and with an impact on sales of 10% compared to the $11,600,000 over last year. Amortization and other accruals increase of DKK2.6 million due to the relevant investment made In 2019 and in 2020, and today, increase in provision for bad debt represent In the most balanced way, the possible deterioration of some credit position. The increase can be split in €1,600,000 has bad debt and risk accrual and €1,000,000 has more depreciation and amortization. In 2020, the total amount of fixed cost as operating cost of cost and depreciation Showed a decrease of 2% and the impact on sales was 27% compared to the 29% of last year. So thanks to the reduction of that impact. The profitability the reduction of profitability in terms of gross margin level, We can see a decrease of 4% was reduced to 2% on EBIT level, and we had a positive balance Of €30,100,000 of euro, down from the €38,200,000 with an impact on sales of €7,400,000 compared to the €9,500,000 But improving the profitability in the second half of the year in accordance with our last Net tax result was €27,900,000 with a negative effect of ForEx and a negative contribution of associated companies. Net income was €20,200,000 with a tax rate of 19% versus 26 of last year. In 2020, there were some one time benefits such as the remission of the IRAP The balance of 2019 together with the first down payment 2020, IRAP is an Italian income tax And the accounting of deferred tax asset of some assets were evaluated in accordance with the Italian law. The total amount of those benefits were around €3,000,000 In the 4th quarter, We're registering a record of turnover of €140,000,000 and we can mention the same The information used for the whole year to explain the decrease in gross margin profitability in Q4 too. In the meantime, we had a recovery in profitability with an EBIT margin of 8.6% lower Then Q4 2019, but the best result achieved in 2020 and higher in total value The operating result of Q4 of last year. The impact on negative ForEx reduced the income before tax to €11,000,000 on the same level of Q4 2019. In terms of Net financial position, we had a positive balance of €69,200,000 compared to the €61,400,000 over last year. And about €20,000,000 plus €5,000,000 as possible earn out were invested in the acquisition of an important minority stake in And the amount of investment in technical fixed assets were around $30,000,000 down on 2019. We had a strong cash generation in the quarter for €19,000,000 thanks to the good level of activities and to a reduction in net working capital compared to the 1st 9 months of the year. In looking to the revenue breakdown by business, you can see that in Medical sector, which is in 2020, account For approximately 56% of the group's turnover, the sales trend was affected by COVID I'm sure with a decline of about 5%, slightly more as sensitive in the sale of system than in that of after Services and Consumables, which benefited among other things from the growth of revenues from optical fibers for Horological Surgery. The resilience of the aesthetic sector is extraordinary, showing a slight growth compared to the 2019. 2 main reasons behind this result. The first one is the launch on the market of new system for high removal, as already mentioned by Andrea, And for body and skin treatments with a high degree of inhalation who have found great success. The second one is the good performance of our Japanese We have upgraded on the installed base and sales of interesting volume of locally produced equipment through the same channels. On the contrary, sales in surgery and even more markedly in physiotherapy was affected by COVID pandemic As the attention of medical health structures was concentrated mainly on the treatment of COVID problems. In the industrial sector, sales increase of 23% 23 30% is the increase of the accounting, the industrial increase of 13%, a brilliant result Given the condition, in Q4, the increase was 52%, thanks To the excellent performance of cutting segment. The cutting segment grew of 23% in 2020, thanks to the 2 last excellent quarters EBITDA growth in Q4 of 75% and Q3 of 43%. The other The 3 main segments, marking, source and after sales service, continue to suffer the effect of the pandemic And recorded double digit decrease without any significant improvement in the quarter. Looking to the distribution of revenue by geographical areas, the countries that have contributed most strongly to grow Are those outside Europe? In medical sector, we performed very well in Japan, where COVID had a less incisive impact And where our Widows branch has set a record to another €45,000,000 in the year, plus 60% over 2019 and in the U. S. Market where our distributors in the mechanical sector performed well It's a very adverse environmental condition for most of the year. The drops recorded in Italy and in Europe Are to be considered excellent result in light of the extended lockdown periods and various restrictions suffered. In industrial sector, in China, the activity of cutting sector maintained a record Space in the second half of the year and Cadillac Penta 2 showed with a brilliant performance on Italian and European Markets. Chinese company registered for the World Year 2020 at turnover of €107,000,000 plus 21% Yes, L'Oreal. And plus 106% in the Q4, Catalent Penta 2 registered a very brilliant year With a turnover of €50,000,000 plus 80% year on year and 20% in the Q4. Andrea, please go ahead. Okay. Thank you. Thank you, Rifo. Just to close the presentation, we close with the Guidance for 2021, which please let me comment the pictures here. We have the before and after. We have before and after as aesthetic effect. The before and after for this Frisco In the Casa de Che in Pompeii that we have to clean up from the CapEx positions and I believe it's really turned to new life. Anyway, we are enjoying a phase of positive overall momentum, notwithstanding the continued uncertainty cast By the pandemic on the economic environment and the difficulties that we continue to encounter in certain of our business segments. Our business positioning seems very promising at the beginning of this 2021, and we confirm that we're looking forward to continuing our aggressive growth plan. Under the slide, we target for 2021 revenue growth over 10%, which will lead to an increase in EBIT and we hope and we're going to work hard for an increase in EBIT margin. Thank you for your attention. I believe we can go ahead with the Q and A session now. I kindly invite investors to introduce themselves before asking the questions. Thank you. Hi. Sorry, I don't know if I can start like that. I'm Francois Robillard from Intermonte Speaking. Can you hear me? Yes. Hi. Good afternoon, everyone. Thank you for taking my question. First one is about your guidance. If you Can you give us some more granularity about the composition of your 10% over 10% sales growth target, Given it by segments and if possible, what are your expectations per business units? And finally, as well, In terms of short term versus long term visibility, how much do you expect it to be achieved in the first half versus the second half, for instance? The second question is on gross margin. Can you give us a hint of your gross margin for Industrial and Medical Activities On the full year, and what kind of margins are you expecting within your new guidance? In that, Can we expect some kind of return to previous years levels, especially in the Industrial segment? And final question is on fixed costs. What kind of savings seen in 2020 do you expect to remain Structural in 2021. Thank you very much. Thank you very much, Francois. On the mix, I mean, we also got to consider what kind of year we are running against now. So we are running against 2020, which I mean has been quite a weak Here in absolute terms, we are happy for what we are going to perform what has been weak, especially for medical. In this moment, our development plans are continue to be bullish in the industrial business. And even though the industrial business grew in 2020, we believe That it will grow more than the makeup business in 2021. Also due to the mix Our sales that we had in 2020 that we expect to be rebalanced with less contribution Of the sole distribution component, for what we can see today and we I mean the model is For 10% being, let's say, with a sharper growth in Industrial. What concerns long term and short term view and where we will get we're going to get the gain, of course, After Q1, there will be a huge gain in industrial because Q1 is the quarter in which we had close to 0 revenue in China. And in this moment, China, As I mentioned during my introduction, it's running at full steam. We have our own the 4 factories running At full at almost full production rate, we still have some headroom. But our plan is that we will be in the need Our 5th factory coming up during the year in Limi in order to continue growing and to Continue to be able to manufacture the increasing volume that we are being demanded. In the Q1, The comparison will be tougher for the medical because Q1 of 2020 was fairly strong in medical because the demand shortage happened right after the end of the Q1. Of course, we plan to see a very large increase In revenue in the first two quarters and we plan this increase in revenue versus 2020 to progressively decrease when we will be faced to Q3 and Q4 2020 that have been To good quarter, especially the Q4 has been very good. Concerning gross margin, Which is tied to profitability and is also tied to our cautious guidance in terms of profitability. We are very pleased with the results that we're having with gross margins in the Industrial business. We had We maintained the gross margins even with increasing volume. This gave us a very good leverage effect, which was evident on the We are cautious on the medical business because during 2020, The weight of our sales to the U. S. Grew into in our group. So we were Very happy with the achievements we made with our main distributors in the United States, which are Cynosure Sure. And Cartesa for medical aesthetic application, international medical business for Surgical application and the link was for urology. But what we need to take into consideration is that the weakness of The U. S. Dollars has already harmed our marginality in medical system sales at the end of the year And we model our gross margin with a 1.21 4 year exchange Great for 2021, which of course given the fact that most of our costs are in euro even if Some of our costs are anyway in U. S. Dollars. So we purchased something offsetting the 4 year changes losses we get on sales. We I mean, the impact of the weakness of the dollar will limit our ability to improve Our gross margin, should we see the dollar again strong again in 1.1 or Even better, 1.0506 area where it has been over 2019 and the 1st months of 2020, Our marginality would be materially improved. In terms of fixed cost, the model that we have is a Slow return. So we are modeling a small increase of fixed cost. 2020 under this point of view has been, let's say, amazing because the savings that we had In travel, congresses, I mean, meals and lodging Has been extremely, extremely material. In a way, we hope that these savings will go away because it would be a Sign of getting back to normality. On the other side, we know that It will take a long time. And unfortunately, I'm not sure if 2021 would be enough To see life to return as it was before, and I believe the Business travel will take a while before it will get to be normal as it was at the end of 2019. Therefore, We are not planning to maintain the same very low level of expense under this point of view, but we are modeling Some increase of expense without getting to the levels we were 1 year ago. I believe that I've answered all your questions. Yes. Thank you very much. Just a quick follow-up. You mentioned the €2,200,000 impact of the A Chinese manager's sale of shares, was it done in the Q4? Yes. Yes. Okay. So it's a share capital increase at a low price. Thank you very much. Are there questions? If nobody else is going to ask any questions, I might have some more. I don't know if you can hear me well again. So yes, just on the new product launches you've announced, can you just come back on that? And how much of these new products We'll contribute to your guidance. Then on working capital, so in 2020, it was back down to 18% of sales. Can we expect a return to a more pre COVID level of over 20% as soon as 2021? New products, yes, we have several products that will contribute to the Sales growth, we are especially confident in the new Hermo products, which are The EGAIN laser system for DECA resolution network and the ELISA Q installation system that we Excuse me, Hermo considers that we provide on our own basis to our long term partner, Sandozhir. This will be one important piece in the sales growth for 20 We now have a very wide range of body shaping devices. Remember, we were out of the minimal invasive or the non invasive body We entered the market with Onda Cool Wazers. It was 2018 And after that, other systems have flagged in this segment all the good ways. Specifically, We had the super Lamex Syntymetrix products, which are called Vistar and Physique, which after a period of study are now being launched in the United States. And so we are very hopeful to have a very good year With these products in the United States, while for Europe, we launched the systems which apply muscle stimulation based on the high intensity magnetic fields. Those new technologies are extremely interesting both for their ability to generate revenue and also because They are a fairly interesting profitability and so this is one of the So they are one of the backbones for our expansion both in revenue and in market. Concerning Industrial and as a business, There, the new products are the introduction of very high power laser systems. In Q1 2021, we have installed the first 30 kilowatt systems. And as progress never stops, I believe that for in the next months, we will start handling 40 gigawatts laser systems. I mean, all this run To higher powers is allowing us, as I mentioned before, to enter new market segments. And the research in providing higher power laser sources is also providing cheaper laser sources by the same manufacturers and is allowing us to reduce costs, maintain more or less the same margin, therefore, to enlarge the market. Concerning the net working capital, we are very pleased with what we Have been able to do in 2020. Quite weird to say In the areas where we have not had problems, where the market maintains Its size or at least remain vital. We are customer making Better payers than in the past. And so the other piece comes from the management of inventory. The management of inventory, of course, led to very strong increase in working capital after the sudden fall Demand in the first and second quarter we are covered. And then what I noticed is that in these last months we had Again, to increase our inventories and I believe this is something we need to do in the future even more because we are And also some difficulties on our supply chain. There are certain components which Our critical, even it's not very expensive. They are critical for the manufacturing of Systems, I'm talking of some electronics and chip and or some other electronic components, which suddenly Switch to their change in lead times, changing from a typical lead time, which was between 8 10 weeks up to sometimes 24 or 30 weeks. You understand that you have to plan an increase Our production volume based on an increased on an expected increase of sales. In order not to have customers wait for months, we have to buy before, taking both Financial burden because you got to buy before and probably pay before and the risk because of course there's a market risk That the plan that volumes those sales do not actually take place. Unfortunately, there's no other way We can manage the situation because in this moment, in which, as I mentioned, we have been a very Solid order books. We are struggling with our production facility in order Timely deliver according to the expectation of the customers. But should we start delivering in a longer term, the customers We'll see return and go to Safran. So we need absolutely to give a certain level of service in terms of delivery To the customers and we're ready and willing to increase the investment in working capital in order not to miss that opportunity. And it won't be easy Because at least as it has always happened after periods of deep Economic downturn, all the supply chain is I mean, it's not I wouldn't say it's fully disruptive, but has certain areas in which delivery times become much longer Okay? Just a quick question, if I may. Andrea, hello. Andrew Dorford here, Matzior Research. Just a bit well, first of all, congratulations for the results, notwithstanding what must have been a very challenging 2020. And could you give us an update on CapEx expectations for 2021 and also if you have any large investments that you're Planning for the coming years. Thank you. Yes. CapEx will be More or less, I believe, in line with what we did in 2020. We already started 2021 With the largest investment planned for 2021, The cutting manufacturing facility here in Braco near Florence bought another building in order to expand its production Footprint was absolutely needed. It was planned. Actually, we the transaction was already Disclosed in 2020, but for accounting purposes, it took place beginning of 2021. It's a €5,000,000 investment in fixed assets. Then during the year, we will complete our 2nd building in Lini. Lini is the last of our factories that we Initiated at last of our ventures, let's say, that we initiated in the region of Shandong. Shandong is a Regions between Beijing and Shanghai is a very industrialized region. So it was appropriate We have a production facility in the area. It will be an investment of about 2,500,000, 3,000,000 More than 2.5, the 3 to be born in 2021. Then we will have other investments because as you know in the last year we have been investing A lot in all the infrastructure, our business is very dynamic and we need to remodel and refurbish also the older infrastructure. For instance, in this year, we are planning a fairly large investment in a building which is on the other side of the road here Here in Calenzano, it's a building that were mainly used was mainly used as a deposit. During 2021, we're planning to Refurbish it to turn down the roof and make a new one with solar panels. I mean it will be a green building, sustainable building and it will be more surface for us, for our operations which are slowly increasing. So, on the bottom line, CapEx should be more or less on the same order of magnitude of 2020. We are not planning any other large investments in terms, let's say, of M and A or Of internal restructuring, we did quite a lot in 2020. I remember you, we gained a larger share Our joint venture in China by purchasing most of the minority shares from our initial Financial partner, as of today, we own about 85% of Pan Palisio and Job, which is the headquarter Of the whole Chinese activities and today also owning Cadillac Penta in Italy. So we have a unique A unit controlling the whole laser Cutting Business. But we don't plan at least we don't have today any plan in making other large financial investments in 2021. Thank you. It's Tremend Fitzgerald from Investment Management. Yes, thank you for a great result. I'm just intrigued about the permission to buy back stock. Could you just give us a walk through about the thinking there about the buyback, the size of the buyback and the mixture between dividends and Returning cash to shareholders in this way. Fredrik, thank you for the question. The back of share is no big deal. We always had it ready for any circumstances. So we have also The subcontract with certain managers which provides that we pay them share. So we need a provision for buying share in order to be To give share to the managers rather than payment in cash, we have this kind of arrangements. And for other reason in this moment, there's no real compelling need as we did in the past. Last time, we had done it was, I believe, 2 years ago. We keep this tool open if Any other question, please? Hi, good afternoon to everybody. It's Andrea Bonfranco, Bancaaco. If I may, I would like to have to ask a few questions. Is that okay, Bianca? Sure. Yes, of course. Okay. Good afternoon to everybody. So very quickly, Andrea, I would like to know if The mix for medical aesthetical will improve because, let's say, Japan will be more, You say your own product sales and third party products. Well, this is my first question. The second one is, let's say, the shares are given to the Chinese manager. Is there something that can be repeated also in 2021 or is that one shot item? The first one, if I'm going by heart, your 2020 tax rate was pretty low. Is that sustainable or not? And in term of, say, new product, if you can just Remind us very quickly again, I know you mentioned it before, what are the new products which You are going to launch this year, which are not present last year, I mean 2020. Thank you. I wish you didn't contribute. Thank you. Andrea, I didn't get Your very first question, what did you ask about the medical segment? Yes. If I'm correct, in Japan this year, Sales were very good because you distributed the 3rd party products. So if this year, Japan mix will be more Elan Products and photography 1. So let's say the mix for medical aesthetic will improve because of that at the end of the day. Exactly. Yes. The answer is yes. The model we have for now is that as much as this kind of sale helped the Sales volume in 2020, we are modeling a decrease of that kind of sales In 2021, since we're modeling faster growth of sales of all the other systems, we will see A very interesting growth in sales in medical in 2020 and for the Mix balance, reason we will see also a margin increase. The only issue with margins In the medical system where we have a better mix, we have a better mix and we have new products very higher margins is that A large part of our sales is directed to the U. S. And in the U. S, we have contracts In U. S. Dollars on which we cannot change the prices or at least it is not appropriate for us to change the prices. So Marginality will suffer a little bit from the weak power. The new products we are counting on for 2020, 1, excuse me, that have not Being great contributors in 2020 are this body shaping system that I was mentioning before We're starting to sell in big volumes at the beginning of 2021. And the hair removal devices, The new hair removal devices I mentioned before, again, and Elite, which have been entered in startup production and Decent volume production only at the end of the year. So the hits are from financials In Q4 only, while we're expecting their contribution to be constant and material throughout all 2021. I don't remember whether other question are there. There is a question Great. If you want, I can ask. Yes. The tax rate of 2020 benefited of some onetime As I mentioned during the presentation, so it's not recurring. Indeed, the tax rate of 2020 is 90%. Last year was 26%. So if you need to project this tax rate in the future, you can stay From the 25% to 28%, more or less. And what about the shares to the Chinese management, is that a one off or you is that something? It's I mean, actually, it's a plan that has 2 pieces. I believe this first batch is about 3 or 4 times larger than the 2nd batch. So there will be a 2nd batch, but I won't say that It's negligible, but it's much smaller. I hope it will be negligible in face of the increased revenue Okay. And if I may ask the last question, is it possible for you to just remind us more or less what are your U. S. Sales For 2020? Yes. Roughly just below €50,000,000 Okay. In euro wise, that's euro wise Of $50,000,000 Okay. Thank you very much, Andrea and Rico. No worries. Some more questions? Then if there are no more questions, we finish this conference. Andrea? Excellent. Thank you for being with us. I believe I will be seeing most of you next week at the STAR Conference And some of you I know I will be also talking soon. Anyway, thank you for being with us And have a nice night. Bye bye. Bye bye. Thank you for attending the conference. Bye. Bye. Bye bye. Thank you, Thank you. Bye. Bye bye. Bye. Bye. Thank you.