Earnings Call: Q1 2019

Apr 30, 2019

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's 1st Quarter Sales Publication Conference Call. Gen. I would now like to hand the conference over to your speaker today, Laurent De La Barre. Please go ahead. Good morning, ladies and gentlemen, and welcome to our quarter 2019 sales call. I am with Louis Philippe de Baileur, our Head of Investor Relations. As you know, we decided last year, in line with French market practice, to switch to quarterly sales in Q1 and Q3 and half year and full year results. For this presentation, we'll focus on our sales performance, about which we will provide some greater color. Call. I will start by focusing on some key highlights, then take you through our geographical performance. Before the outlook and the Q and A session, I'll also come back to some achievements in the quarter, including the refinancing operation and the progress With the key highlights of our Q1 sales. Rexel posted another strong quarter with sales growing for the 10th consecutive period This represents 10 day growth of 3.1 percent or 5.1% if we exclude the effect of the asset disposals and turnaround measures. Indeed, the transformation measures we took in Germany and Spain to refocus our business had a 1.7% unfavorable impact While the disposal of the Rockwell Automation business in Australia had an additional 0.3% negative impact. This strong performance comes despite an unfavorable copper contribution in the quarter of minus 0.5%. While copper has a positive impact of 0.8% in the comparable period last year, so our underlying business trend is quarter. Our 2021 performance reflects the continued successful implementation of our strategic plan, On slide 4, I will focus on the perform part, which is delivering satisfactory results in all of its key pillars. Market share gains in major geographies, including France, the U. S, Canada and the Nordics, All the while improving our service level and customer satisfaction. We are now implementing Net Promoter Score or NPS 2nd, we are But also by strengthening our industrial business offering in all three geographies as illustrated We are also getting an increasing contribution from the self help measures we have implemented to drive growth. We are seeing positive momentum in Germany and question. As a result of the reposition business and a good ramp up in sales in the U. S. For the 52 branches That has been opened in 2017, the refresh of the existing networks as well as recovery underway at JEEXPO. The second aspect of our strategic plan is our transformed strategy to enhance customer experience and productivity, We are putting in place the latest generation of sophisticated digital tools to improve our business operations. Strakaount rates is now fully operational in 3 different countries, representing 45% of our sales in the region. And our ambition is to increase this to 8 countries, representing 70% of European sales by year end. This deployment comes with improved IT Know how in order to be able to interact with outsourced delivery services To ensure an enhanced customer experience. Also our eMelt with DI functionality is ramping up And is already used for 80 large customers in France. The Cement to EBITDA initiative contributed to the 130 bps improvement Media sales in the quarter in France. As part of our digital transformation, we are also rolling out predictive analytics tools in On Slide 7, we take a closer look at our Q1 sales performance, Which as you see on the graph on the top right hand side on the slide represents our 10th consecutive quarter of same day growth. At €3,300,000,000 our sales are up 4.2% on a reported basis and up 3.1% on a same day basis. We benefited in the quarter from a positive currency effect of 2.4%, thanks to the euro's appreciation versus the U. S. Dollar, While facing an unfavorable scope effect of 0.4% and a negative calendar impact of 1%. Please note that the calendar impact will remain negative in Q2 at minus 0.5% EBITDA growth by circa 2%, which will be reversed at group level in H2. Concerning currency and assuming spot rates remain unchanged, we expect foreign exchange to have an impact of +1.6 percent On sales in full year 2019. Concerning scope and taking into account previously announced disposals, The expected 2019 impact stands at minus 0.4%. As mentioned earlier, copper's contribution With the recent copper price increased to close to US6,400 dollars per tonne, we expect similar negative impact in Q2 quarter and a favorable impact in H2, assuming no further fluctuation in copper price. Turning to slide 8, you see that we posted sales growth in 2 of our 3 geographies: North America, which accounts for 37% of our sales, 10 day sales were up by a very strong 8.5%. In Europe, which represents 55% of our sales, same day growth was 0.4% or 3.4% Let's now look at our sales by geography starting on slide 9 with Europe. With sales of €1,800,000,000 Europe Up by 0.4% on a constant and same day basis in Q1. However, if we exclude the impact of branch closure in Germany and Spain, growth was In our home market of France, which accounts for more than 1 third of our European sales, sales rose 2.7% With good momentum in our project and specialty business. We continue to gain market share in France. In Germany, sales were up by 3.6%, restated from the closure of the 17 branches in Q3 of last year as part of our plan to Our operation on the industrial segment. The UK continues to be a difficult market and sales were down 7.5%, Reflecting our decision to be both selective to protect our margin and the effect of 30 branch closures, quarter. As where in Europe, we saw very good trends, notably in the Benelux countries North America on slide 10. We continue to see strong growth reflecting both The positive effect of our transformation in U. S. With a more regional customer centric approach, but also robust activity in Canada. Overall, in the region, sales were up 8.5% on a constant and same day basis, Reaching €1,200,000,000 In the U. S, representing 80% of our North Our new business approach and various business initiatives continue to drive market outperformance. By end market, industrial is up in double digits and residential and commercial are also strongly up. Our investment in sales reps, inventory, branch opening and branch refresh are clearly paying off, And we have added 1.1% in sales from the 52 branch openings in 2017 as well 2,700 new customers in the last 12 months. In Canada, we also saw good growth of 3.4%, Driven by the commercial and industrial end markets, notably mining potash. We have a solid backlog, Notably, thanks to Transportation and Commercial Infrastructure Projects. On Slide 11, we take a closer look at How our regional growth approach in the U. S. Now divided in 8 regions is paying off in terms of growth and market share gains. Our Electrical Distribution business is growing in double digits in key regions such as California, Texas, Florida and the Denver area, We want to follow the view on Slide 12 with Asia Pacific, where sales were down 1.9% on a constant and same day basis, But we are actually up 1.9%, excluding the Rockwell Automation business in Australia that we disposed Off at the end of April 2018. Also restricted from that disposal, sales in Australia were up 2.7%, driven by industry. Overall, in Pacific, sales were down 4.8% on a reported basis, but up 2.3% reflecting call for the Australian disposal. In Asia, sales were up 1.5% and up by a strong 8.2% in China We have focused our business on promising markets and are seeing good results in that country. Asia was also impacted by the non repeat of a large contract in Middle East that brought €7,000,000 in Q1 of last year. On slide 13, we wanted to share more with you on our product mix and performance by key product category in Q1. As you can see, our 2 key categories, Building Automation and Industrial Automation, Performed well in the quarter, both in terms of pricing and volumes. After years of decline in prices, quarter. That was more than offset by the positive volume effect. As you know, beyond our product offering, as part of the evolution of its business model, Rexel question. Increasingly moving towards a provider of solutions and services. For example, data allows us In the Industrial segment, we offer end to end solution for smaller customers who don't have direct access to supplier. In addition, in the lighting space, we provide energy efficiency solutions. On Slide 14, we take a look at our breakdown of our debt maturity after the recent refinancing operation that quarter. We successfully refinanced our 2023 bonds with the €600,000,000 And our average maturity has been extended by around half a year to about 4 years. This refinancing helps us optimize our financing costs and mitigates a slight increase in short term interest rates. We expect our recurring 2019 financial results to be slightly below €100,000,000 Sustainability is a key priority for Rexel. And on slide 15, we detail a few highlights. Rexel is included in a number of leading sustainability indexes. And in 2018, we gained 2 ranks in the DGVSI, The Dutch Volumes Sustainability Index. The group's efforts also in fighting climate change were recognized by the CEPI, the carbon disclosure project, which gave Rexel A grade in 2018 versus a B in 2017. Rexel is included in the list of 137 companies that are the most engaged in the fight against climate change globally. And Rexel was rated gold by Ecovadis with a grade of 71 out of 100. This puts Rexel among the top 5% of companies evaluated by EcoVadis and among the top 4 1% industry. On Slide 16, we wanted to update you And a few changes in our management team. In the continuing sector to ensure that our management team is a very operational one, Our CEO, Patrick Darragh, recently announced a few new appointments to our Executive Committee. Roger Litter, the CEO of Hotel Canada has joined the executive committee to provide greater North America weight Alongside Pierre Baker, the CEO of the U. S. Pierre Benoit also joined the COMEX and added responsibility for the UK digital transformation, as added overseas of the Nordic countries to our responsibilities. We join Sebastien Turey, Corporate Secretary Frank Wallman, Director of Human Resources Eric Gauthier, CEO of Asia Pacific and myself as members of our 8 person executive committee reporting to Patrick. Let me now conclude on Slide 17 with our outlook. Nothing in the current environment led us change the guidance we provided in February. Consistent with our medium term ambition and assuming no material change in the macroeconomic environment, We target for 2019 at comparable scope of consolidation and exchange rate, a 2% to 4% same day sales growth, excluding and estimated unfavorable impact of 1% on 2019 from branch closures in Germany and Spain, 5% to 7% increase in adjusted EBITDA, a further improvement of the net debt to EBITDA ratio. That ends my presentation. Thank you very much for your attention. I'm now happy to take your questions. Question. And your first question comes from the line of Ben Zekiras. Please ask your question. Question. Good morning. Thank you very much for taking my question. You mentioned that you've outperformed the market in the U. S. And that you've continued to take market share in France. Question. And I was wondering how you see the kind of underlying yen market developing in these two regions. And more broadly, whether you've seen Any changes in your expectations in terms of growth in different geographies versus when you first issued your 2019 guidance? That would be my first question. Thank you for your question. I mean, first, on France, We are really happy by the performance of France in Q1. We can see that the residential Mostly driven by the nonresidential market fueled by our large national customer and also By our industrial sales. So we are quite happy and I mean so far so good For 2019, we don't see any negative signal so far. And mid term, We will be helped also by all the large infrastructure projects such as Grand Paris and OMPKs That are going to support the construction market business in France, probably more in 2020. I mean, it's still a soft quotation yet, but this will show into our figure of next year. With respect To the U. S. And you have seen over the weekend the release of the GDP of the Q4. I mean, the market It is really very strong, and we are grasping market share in that environment through all the various We have taken for more than 2 years now. And clearly, our backlog Very high level, and we are very confident for 2019. Okay. Thank you. That's very helpful. And my second question is around your digital revenue. So they've been clearly growing quite well. They now represent a quarter of your sales in Europe. And I was wondering whether you could update us on How you see that side of the digital side of the business growing in coming quarters and whether you see that growth coming from any geography specifically? And If you could perhaps touch on some of the digital investments you've made and perhaps any productivity gains to kind of offset that as you've mentioned in previous calls, That would be much appreciated. Well, I mean, the growth is mostly Driven by European countries and countries such as France, which were compared to the average of Europe, A bit behind despite very good system. It was more a question of adoption. But really, for example, France has a growth of 40% of digital sales In the quarter, all of Europe is above the group. And so we are ramping up in our key countries in Europe. And then North America, we're starting from a Slightly lower base because digital sales is around 10% in those countries, But they are growing also significantly. So altogether, it's well appropriated Around our country. So we are quite happy that it's I mean, it's a top priority for us, and it's Discussions on all the level of our organization, so that we can push as much as we can to grow this figure. Thank you. And just a very quick follow-up. How do you see the level of investments that goes into this digital side of your business progressing? Well, in line with what we said in Feb, I mean, key priority on the CapEx side, roughly 1% Of our sales, IT and Digital represent roughly 2 thirds and we will continue on that. On the OpEx side, it is still a large part of the investments. You have seen that we had a bridge on the EBITDA In 2018, and we will continue also on the OpEx side thank you. And your next question comes from the line of Andreas Weidley. Please ask your question. Yes, good morning. Thanks for your time. I just wanted to follow-up on your comments earlier on the U. S, which are clearly the outstanding growth quarter. Maybe you could help us understand it a bit better in terms of what was the contribution of price, particularly also some kind of pass through of tariffs, raw materials and what was the volume growth in the U. S. And you said earlier, very confident, a Good backlog, but you're also facing now tougher comps as of Q2. Would you expect growth to moderate? Or is Momentum is basically strong enough to maintain this kind of high single digit organic growth in the U. S. Yes. First, the pricing environment is good. We have a bit more In Q4, we are excluding cable around 3% price impact in North America in Q1. The trade war has not broken, but That seems the announcement increase in March did not happen and it has So far, very limited impact on our business. So pricing is 1. 2nd is all the initiatives around the branch, the additional branch. So we opened 4 branches in Q1 2019, but we have the benefit of the 48 we had opened up to the end of last year. That is bringing 1.1% in Q1, and it will continue all over the year to contribute positively. Then we did what we call the refresh, which is a repositioning of the offer plan and the inventory In the branches, we refreshed around 25% of the branches there. And with additional SKU and inventory, We see a good traction on the sales side. Then we had some headwinds in the past. GIS headwinds is behind us. It's not at full development capability, But it is improving. Logistics supply chain is not fully operational, but really improving. And GIS will be a self help for 2019 and also GIS, it's a supplier. On the customer side, the G impact, we were really at a quite low basis last year. In 2019, we have better momentum. So we are growing with GE as a customer, especially on the wind. So we have a lot of positive signal and the economy is facing lack of manpower. So I mean, the ultimate peak has not has never been reached. And we see that there are still a lot of business, and it At this moment. My follow-up would be in terms of the branch openings. Given the better demand, should we expect to see a pickup again in branch openings in the U. S. Over the next 12 months? It will well, the existing network will contribute around this 1%. On the other side, we are quite vigilant into the opening of branches. And with the success of the refresh, which are carrying far stronger payback, The 100 openings we are seeing ultimately and for which we are at 52 today, probably we will not go up to that figure. So we are tactical. It's a case by case review. Patrick is spending still a lot of his time with U. S, making sure that with the local management, they take the right decision. Thank you very much. Thank you. And next question comes from the line of Lucie Carrier. Please ask your question. Hi, good morning, gentlemen. Thanks for taking my question. I have three questions. I will go one at a time. The first one is a bit of a follow-up On the visibility you have, so I think you've already commented extensively around the strength of the business you've seen in the U. S. I was hoping if you could give us maybe a bit more indication in terms of the current trading and visibility you have in Europe and in Asia Pacific, also because some of the macro data we are seeing, of course, around Europe is not necessarily positive. So just wanted to have your feedback on that. That's my first question. Thank you, Lucille. Well, based on what we can see again in April, North America, again, we are quite positive. We have also, compared to Europe, some backlog, which give us some visibility Yes. Our backlog is still very high level, even historical level in Canada. In Europe, so far, I mean, I commented France. Germany, probably when you look at the macro indicator for England, but with all the restructuring we have done and the refocusing into C and I in the south part of the business And also on industry, and we are not we are a mid sized player. Now you see that we have Some traction. The rest of Europe with the visibility we have It's okay so far in April. You can question then U. K. I mean the market is sluggish. And As already commented by Patrick in Feb, we want to be very cautious in that environment. So we have some We have reduced our footprint. We have closed some branches and we want it to be smaller but more profitable. And we have a huge approach to be very selective on customer base. And that is why, I mean, The top line is so shy because we have increased price and we have been more really more selective On our customer base. So overall, based on the view on April, We continue to be quite optimistic for the rest of the year. So that was your first question? Yes. The second one, thank you for providing the sales mix slide, which I think is a new slide. I was just wondering, now that you kind of provide that, can you comment maybe in terms of whether that mix could be positive for earnings momentum. How should we think about that? Because you just provide kind of the mix and the weight, but we don't really have any indication in terms of what it represents for the earnings. And considering it's a new slide, we don't really have a track record on this. Yes, yes. Well, the breakdown of the product mix is something that was communicated in the annual report. We added the visibility on price volume and service. As you know, I wanted to move into data and service driven company. So the The link between products and services is important to understand. Really what is important is the price environment. We were coming from years of Very low inflation and even some strong inflation in polycrop like lighting. It's important to see on the lighting side that We are close to reach a floor and now the decrease in price are less and less. With building installation, it's our biggest group of product. Here, it's important to see that The pricing environment is up after a year of flattish price effect. So we start to see some inflation coming from the supplier that we are passing through. Industrial Automation, we discussed that it's a strategic pillar for us. We want to continue to reinforce our expertise in that. With the backbone of strong country, I mean, North America, which is a 3rd distributor of Rockwell product, Germany and China being very strong with cement. We are the 3rd distributor of cement In China, and you see that on those line of products with all the new activity around service and solution, We are progressing. Pricing is positive and volume as well. And then we wanted to bring in this slide the fact There are services associated with those products. Some of them already embedded in the price of the product, but that This is why the customer is willing to go through us because it's not only a product, but it's all the Rexel Ecosystem and other That are build to the customer in some line of For example, as administration, service and solution are already representing 10% of the Automation business in Canada. So it's a small in the global Rexel Galaxy, but it shows that we are trending into building more and more services. So that was your question. Yes. Thank you. Just the last question is more for the model. Thanks for the slide on the refinancing operation. I was just wondering if we should kind of add exceptional cost related to this refinancing because it had been the case in the past and whether you could give us the quantification of any potential exceptional cost here. Yes, yes. There is a €21,000,000 one off personal financial charges with, of course, a direct cash impact And it was a good I mean, the rate we get was very good with that. And the net present value of the operation is It's north of €20,000,000 so it was a very good refinancing operation. Thank you. Question. Thank you. And next question comes from the line of Martin Lukey. Please ask your question. This is Martin from Citi. So the first question was just coming back to the U. K. And I appreciate you've got to be nimble if the But just on your current plan, are the branch closures that you announced in Q1, are there additional branch closures already Targeted during Q2 or should we see it that what you've closed up until the end of March is sort of your new baseline in terms of Just thinking about growth in the UK going forward. So that was the first question. Thanks. Thank you. Well, On that field, we year to date, we compared to a year ago, we closed 30 branches. There is No huge process to close a lot of branches in UK, but We have small branches. So tactically, again, as always, if we have a good opportunity with a Short payback to close the branch. We may have some adjustments, but no big reorganization projects 14 so far. Really, the game is the selectivity of the customer base. And also with Yelp, I mean Pierre Benoit, you have seen Pierre Benoit is a very hands on I mean about the same kind of profile than Patrick of turning around businesses and he has been very Successful in Belgium and then in the Netherlands and he's putting his feet on the ground in UK, We're working the product offering all the customer data and making sure that we can rebound in UK. So maybe slight adjustment of the footprint, but no big closure process. Okay. Thank you. And then perhaps a second question just coming back to GEIS. You mentioned it's improving And it will also be a self help for 2019. Now obviously, we know from ABB, the new owner, that they see as a self help from their side. But To clarify, is there self help from your side as well? I mean, do you need to do things to the JETs growth or distribution route For GIS, so when you're talking about self help, do you mean in terms of the product and what ABB is doing? Thank you. Well, we are one of the 3rd distributors in the U. S. So it's a matter of adding the right product offering. We are switching GEA's product and fueling them with ABB products. So it was a matter of product availability with A bit of supply chain disruption, especially in one plant in Monterrey in Mexico. But that is improving yet, not at full efficiency what we would like to have, But improving to last year. And I mean for us, GIS is a very important supplier, And we have to make sure that we are giving a better momentum. Probably, it It will take time, but we are confident. Okay. Thank you very much. Thank you. Next question comes from the line of Alfred Glaser. Please ask your question. Yes, good morning. I wanted to ask you about pricing, excluding cable. Could you comment a More in detail by region, how the prices have evolved. And then I would like to know if you could give some more color on France. The Q1 numbers have been quite good, better than the market actually. How long do you expect you can go on outgrowing the market in France? Do you have enough projects in your backlog to do so? Could you give us some color on these items, please? Okay. Good morning, Alfred. So On the pricing effect, in Q1, in Europe, we are close to 1%. So a bit lower than in Q4. North America, we are higher than in Q4, call, close to 3%. And in the APAC, we are at 1%. So the mix of that GIVA Group at 1.6% I'm talking about inflation excluding cable, of course. Okay. In terms of evolution in France, I mean, we have Very healthy top line. I remind you that in Q4, there was a big effect with an export contract, and that's why The top line was a bit shy and then there was some disruption between the yellow Gillette and the cutoff of The Prisma vacation. And so this Q4 was a bit low. I mean, Q1 in France is very good. The market is there, but we gain market share. So it means that the team has done some very good job. So we are quite pushy. We have some great evolution, I pointed out, on the digital sales evolution That are now at 16% of total sales. So the adoption is paying And we have great results with some large national customer, Which I'll pass in the non residential market. So it's mainly non resi and industry. Resi It's going, but at a lower pace. But overall, we are very satisfied with your performance in France. Question comes from the line of William Mackey. Please ask your question. Yes. Good morning to you Laurent and all. A couple of questions if I could. First of all, With regard to the restructuring this year, when we think of branch closures In the U. K. And then some ongoing transition and transformation costs across Europe. Can you just give us an idea of if there's any change or at least what you're thinking with regard to the nonrecurring cost in the current year Acceleration. Just a couple of questions. Firstly, have you observed any changes or what Sort of changes do you observe as your customers transition onto the digital platform With their buying behavior, is it in different product groups? Are there different volumes or quantities, which might explain some of the market share gain. And also with regard to digital, how simply do you explain Such a big difference between the penetration in Europe, if we exclude Switzerland and North America. So why is there such a big difference and perhaps how can you catch up with that digital difference penetration difference And then lastly on mix with regard to profitability, I know this is a sales call. But last year, we had the profit mix. Last year's figures incorporated obviously the drag relating to the branches in Germany and Spain and also perhaps some drag from limited price effects. So when we look at this The revenue mix in your Q1, is it right to interpret that this is favorable for gross margin and margin mix year on year Because of the elimination of costs, but also because of a move positive move in pricing and mix. Okay. Thank you for your question. I will take it 1 by 1. The first one on the restructuring, you have noticed that last year, we had a EUR 90 million restructuring cost because of the big restructuring in Germany and Spain. What we guided in February call That this year, we will come back to a more normative, what we're doing, an envelope of circa €50,000,000 So there are no big, I would say, big country in the radar in terms of big downsizing so far What is it that it is improving the loyalty and the fidelity of the customer when we reach and in the case Not in all our country, but in some of them, because shopping with Rexel is easy And this easiness is driving some kind of feasibility of the customer. And then we can see that So of course, the growth of the digital sales are part of cannibalization on the existing Outside sales, but sales that are easier to grab and are then easier To operate in our system less manual interfaces. So at the end, they are driving good profitability. The penetration rate between Europe and North America is very much Link to the mix of the business, whereby in North America, there are a lot of industrial sales that require, of course, less of digital web shop solutions. So that's why there is such a gap. But clearly, We can still improve. I mean, North America, altogether, is around 10%, And probably we can still double this figure. And in Europe, we are at 25% digital sales. And probably we can add still at least 10% on top of this Around this 24% in the midterm. That is a 1st milestone we have. And as pointed out, it is really a priority. So we are improving our tools. We have a common web shop on the SAP Everest platform That we are rolling over our countries. We are developing tools around the web to improve the efficiency of the business. I commented on track and price, something very Right now, on the B2C, in the B2B, it's not everywhere. So we are improving that field. I commented also on email to EDI, which allow us to do the business in a more Mr. Wade, we are our customer. So that's very, very important. The third question, well, sorry, The mix of profitability in Germany. Will, can you please repeat your question? Sorry, I'm your last question, please. Of course, sorry. Yes, sorry, I'm sorry. You're right. So we don't sell Germany and paying The Vantas Ghi part has been made end of Q3 last year. We got rid of loss making business. So yes, it has positive impact this year. We guide in February and explain that Those two countries will bring an additional 10 basis points at group level in terms of EBITDA margin. And this is ramping up October 2019 with the contribution that will be growing over the quarter The H2 contribution is a bit higher than the H1. Thank you very much. Question. Thank you. And the last question comes from the line of Pierre Bossier. Please ask your question. Yes. Good morning. Two questions, if I may. I just would like to know if you have an update on IFRS 16. In your annual report, you mentioned a potential €900,000,000 additional debt. Do you have any more details on The consequences of IFRS 16 on your account. And second question is just a follow-up on France. Is Mr. Berra still managing France directly? Or do you plan to have at some point someone in charge of France? Question. Thank you. Okay. IFRS 16, it's very important to note that IFRS 16 had no impact on the guidance we provided in Feb because we are on a gross percentage. The impact on IFRS 16, so we disclosed the IFRS 16 at the end of June for the first time with the comparison The 2018 figure. The debt impact is around €900,000,000 The EBITDA impact because you get rid of the rent is 150 bps on the EBITDA. On the EBITDA, you are adding back the depreciation, so it reduced the impact. The impact on the EBITDA is EBITDA is 30 basis points. And then below the EBITDA, you are adding back financial expense. So it is a very it has a very limited impact on the net result. And I have also the question On the cash flow statement, we will present cash out on rate expense, so it should have no impact on the cash flow And on the net debt to EBITDA, we the debt will be considered As the IFRS lease debt that could be excluded for the calculation of the ratio. Okay. With respect to France, France is a very strong contribution to the group and Patrick has a lot of proximity Physically and fundamentally on this platform and that he knows very well. And yes, he's still spending quite team of complementary young people, I mean, very experienced, We have a very strong Commercial Director. We have a very strong IT and CFO in terms of finance and IT. We have a very strong HR and good logistic guy. So there is a very close team that get along very well together and that is at this stage managed by Patrick, yes. That is working. When you see the performance, I think it's very good to be like that. And there are really high high potential into that French team. Okay. Thank you, Laurent. Thank you. Question. There are no further questions at this time. Please continue. Well, thank you very much for attending this call. Happy to report for the time on the sales evolution at Rexel and to share with you this performance. I mean, we are All are committed to the strategy of the combination of Perform and Transform, And we'll be happy to report more in detail at the end of July. Wishing you a great day. Thank you. Bye bye. Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.