Hello, and welcome to the SEB provisional 2023 sales conference call. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Stanislas de Gramont, CEO, and Olivier Casanova, Senior Executive VP, CFO, to begin today's conference. Thank you.
Thank you very much. Good afternoon, everyone. Welcome to this provisional presentation of the sales results for 2023. As said, I will be managing this presentation together with Olivier Casanova. We'll take you through a short slide deck, and then, of course, we will take, as usual, your questions. Let's go to the agenda page, which is page three. We will cover the key highlights of 2023, the performance by segment and geography, and then we'll conclude on the outlook for the year in terms of profits. Starting with the key highlight, I'm in page number five. The first point is that we've beaten the EUR 8 billion sales mark for 2023, and that's driven by a positive organic growth momentum.
In more details, as you can see, we post 5.3% like-for-like growth for the full year, and 0.6% positive reported growth, with a fourth quarter stronger at 8.5% like-for-like, and 3.1% growth in reported. That is driven in Q4, both by a consumer business recovery that started in the second quarter, and a continued outstanding commercial performance in the professional business. That means that our like-for-like sales growth is fully in line with the full year outlook, or guidance, which I remind you, was a mid-single digit growth for like-for-like sales. Moving on to page six. That full year organic growth of 5.3% has been counterbalanced by a negative foreign exchange impact.
On this bridge, you can see the sales 2022, EUR 7.96 billion, 5.3% growth, EUR 420 million. As a coincidence, the currency effect is exactly the same, EUR 420 million negative. You see that we have a positive scope effect of 0.6%, EUR 46 million, that is driven—that reflects the contribution from the recent acquisitions done in the professional sector, in particular during 2023, partial integrations. Moving on to the next slide, and to zoom on that currency impact, we have a marked impact in 2023. As we said, EUR 420 million euros, that's a pretty high number, probably the record number for the group.
As you can see in the little box in the middle of the slide, that has been skewed very much towards the second half of the year. While the first half was EUR 121 million negative foreign exchange impact, on the second half it was EUR 299 million negative. When we look at the currencies, the main responsible is the Chinese yuan, the RMB, that accounts for around EUR 160 million, followed by Russian ruble, the Turkish lira, the Egyptian pound, and to a lesser extent, the U.S. dollar and the Japanese yen. So very strong currency impact that we are, to say the truth, almost expecting, because we did say that organic growth mid-single digit would be followed in reported by the FX impact.
Now, when we move on to the next slide, which is the sequence of our sales, this is total group sales like-for-like. We've said that we would return to organic growth in the second quarter of 2023, which we did, and that we would confirm that like-for-like growth recovery in Q3 and Q4, and we've done exactly what we said we would be doing. So the year has gone from a sales point of view pretty much as planned in our expectations. Now, if we move next page on the performance by segment and geography, if we move to page 10 directly, the summary of the year is an excellent performance in the professional business.
We grew professional business by 32.6% full year reported, 26.5% like- for- like, with a strong fourth quarter at 19.6% reported business against a very solid base in 2022. While in consumer, the full year is 3.3% up like for like, and the fourth quarter is markedly improved like for like sales growth at 7.7%, posting a positive reported at 1.4%. If we walk into a bit more details in the professional, that is really outstanding achievements. I won't repeat the numbers. What we can say is that it's a record year, both in machine sales and in service. That growth appears in all key geographies, the four biggest markets in the world: China, U.S., U.K., and DACH regions.
But that is driven by good success in large deals with top clients, but also a robust flow of recurring business in smaller customers. The Q4 performance, as I said, confirmed the full year momentum on a pretty more demanding comparison base back in Q4 2022. Moving on to the consumer business, page 12. We have, I think that performance is explained by a pretty efficient product strategy that has fueled the organic growth in consumer. As I said, full year +3.2% like-for-like, Q4 at +7.7%, that was fed and, or, fueled by a dynamic flow of new products introduction that has supported this organic growth in all regions.
You'll see some examples on the chart with Ingenio, or versatile vacuum cleaners or, coffee machines. We'll talk about it. We have a very strong contribution from most emerging markets, other European, Eastern and Central European countries, Central and South American countries. We return to organic growth in several mature markets. We'll have the detail of that a bit later on, and we have a slightly positive growth in China in a pretty adverse market environment. The same way as I showed you the sequence, the quarterly sequence in the total group's business, we've done the same, page 13, on the consumer business. If you move on to the next page, page 13. Where, we had, one, two, three, four, five consecutive, negative growth between Q1 2022 and Q1 2023.
We've come back positive in consumer, +5.2% in Q2 2023, moving up to 7.7% positive growth year-on-year, like-for-like, in quarter four. I said that sales dynamism is driven by an attractive new product offering. And I'm on page 14, where we've tried to take out some of the products that have driven or fed this growth, starting with one of our most important categories, rice cookers in China. In China, we make 15 million pieces of rice cooker every year, and we have a continuous innovation flow with the infrared technology precisely this year, that feeds the growth. We've had a pretty dynamic year in oil-less fryers, which is the most booming category in kitchen electrics. It's a dynamic product category.
We've introduced a range of new product initiatives in many European markets in particular, that is driving the growth. You see here a dual drawer air fryer. We've expanded our range in the full automatic coffee machines. Here you see a beautiful machine that is specially designed by Wilmotte, who is a very famous French architect. A beautiful machine under the Krups brand is part of a range extension that happened this year, as pretty much every year. You see here, kettles. We rarely speak about kettles. Kettles is one of the largest beverage category in China and in Japan. You see here the Justine Kettle, which is the model, the most sold model in Japan.
You see a little icon, and this little icon is an anti-spill smart device, which we are some of the first to introduce on the Japanese market, which allows this to limit the spilling at 10 ml when the kettle bends over. And of course, that's a safety and security requirement. And as strong leaders of the Japanese kettle market, we can do—we cannot do anything other than be the first to have this new device. So innovation in kettles, which is great. Moving on to the next slide, page 15. We have in versatile vacuum cleaners our flagship products, 12.60, 14.60, 15.60, which are very successful. New range called X-Force that is expanding in France, Western Europe and Eastern Europe, very successful.
Linen care is a category that has been pretty dynamic for us this year. Driven again and fed by a pretty dynamic flow of innovations. You'll see here a range of garment steamers, handheld garment steamers called Pure Pop, that has been introduced in Europe and in the United States with a pretty positive, very positive first welcome from customers and consumers. So even linen care drives innovation, and we see that, we will see that this category for us has been very dynamic in 2023. We've also been pretty active in fans. Fans is a very popular product, of course, in Europe, but more importantly in the Central and Latin America.
This year, in Latin America in particular, we had the El Niño phenomenon that was increasing the temperatures, and we fed that high demand for fans with a strong flow of innovations, both on desk fans and the stand fans, as the ones you see on that. And lastly, we have a very good introduction in the Ingenio concept of a ceramic coating that you can see in the picture. Plus, a strong flow of innovation in the many product categories. For those who are attending our Capital Markets Day, we told you that what feeds growth and what feeds organic growth in the consumer business is our ability to generate and procure innovation in many product families.
That's exactly what you're doing-what we're doing, and I think that short sample is an illustration of that, together with the performance this has generated. And in fact, if I go to the next page, page 16, which is the evolution of our product categories, you see first that most product categories have shown a good sales dynamic, particularly in Q4. Q4 is the small bubble. The big bubble is the full year sales. The size of the bubble represents the total sales, and the arrow at the bottom represents the evolution between full year and Q4. I know it's a bit sophisticated, but let me start again. So big bubble is the full year, small bubble is Q4, the arrow is the trend.
The first conclusion is that we have dynamic product sales on all categories. Second conclusion is that Q4 is higher than the rest of the year, except in Linen Care, from a very high base, 10% growth full year. The third point is that the Home Care and Linen Care categories are the two most dynamic, put aside on comfort, are the two most dynamic categories that we have this year. That's great because both are, for home care, including a very popular and growing and important category for the market. Linen Care is a very important category for us, and we found ways to reignite growth in that category. Our core categories of Cookware and Electrical Cooking show a positive growth full year and an acceleration in the fourth quarter.
We see that beverage is pretty dynamic, between around mid-teens performance with the Q4. Here, again, that is stronger than the full year. And we see that even on food preparation, which had a hard time in the year, we post a positive fourth quarter on this category. Now, I'll leave it up to Olivier Casanova to take us into more details of the quarters and the geographies.
Thank you, Stanislas. So let's take a look at, in more detail at our commercial performance in the consumer division by region. As you can see on this chart, starting in the middle, we achieved in the full year a 6.6% organic growth in EMEA, a modest 1.4% in Americas, and a slight decrease in Asia at -0.6%. But as this chart shows, this was in fact the sum of two very different stories, very different halves. Starting with EMEA, you can see that we had a strong 9.3% growth in H2. Similarly, a strong 11% growth in the Americas, and we return to a slight positive territory in Asia, as we had explained, particularly thanks to China.
And I will comment on to these regions in more detail in the next few slides. So starting on page 18, with Western Europe. First, full year, you can see that our sales, as I mentioned, are slightly negative at -0.4%, like-for-like, impacted by, of course, a difficult general economic environment. Although, we can say that the small domestic equipment market showed some resilience, and in fact improved in the second half, and particularly in Q4. And you can see that our growth in Q4 is 6.1%, like-for-like, driven interestingly by France and Germany and also Spain, which has been dynamic for all year. So let's take a look at our big markets first.
We have achieved mid-single-digit sales growth in France in 2023 at around 5%. Of course, we benefited from a large loyalty program in cookware in H1. But if you exclude this loyalty program, in fact, the good news is we have seen a gradual improvement of our quarterly performance quarter-on-quarter, supported by a successful rollout of new products, which have driven, in particular, the growth in Q4, and we'll talk about oilless fryers, versatiles, and full auto. In the DACH region, the DACH region, of course, has been weak overall in 2023, but the good news is that it turned positive, slightly positive in Q4. We have seen some market share gains, in particular in full auto and linen care.
We have benefited from a strong sell-out, good Black Friday sales, in particular in air fryers, OptiGrill and full auto. Moving on, we have achieved a good commercial momentum in Spain, Belgium, and the Nordics. And to conclude, as you know, we have been, let's say, impacted by the destocking, impact by our retailers in many markets in 2022 and in the first part of 2023. The good news is that this is mostly over at the end of 2023, and from now on, we expect sell-out and sell-in to be more in line. Moving on to the next slide, to other EMEA.
Starting with Q4, as you can see, we have achieved, in fact, a very strong Q4 sales growth, like- for- like, in line with the full year trend at above 20%. If you, let's say, take into account the FX variation, in fact, our actual sales are up only 4.5% after accounting for currency evolutions versus the euro, notably the Turkish lira, the Egyptian pound, and the ruble, as we explained. So overall, in this region, we have seen dynamic markets in 2023.
In Eastern and Central Europe in particular, we have seen strong sales growth on the back of close partnership with local retailers, in particular, electro specialists and pure players, and generally a strong commercial execution, both online and offline. We have improved our market positions in several core categories, oil-less fryers, of course, floor care in all categories, linen care, in particular, with the success, as Stanislas explained, of the Pure Pop handheld garment steamer. But we have also benefited from the rollout of our successful innovations, such as OptiGrill, Ingenio, and Cookeo. Overall, in Turkey and Egypt, we have demonstrated again our ability to pass price increases in high inflationary markets. The market in Turkey has remained very dynamic, in particular on oil-less fryers and cookware.
In Egypt, we have progressed in fans, in linen care, in food prep, and in cookware with the titanium range, with stainless steel cookware and pressure cooker. Moving on to North America. Overall, across the region, you can see that we have achieved -2.8% full year like-for-like growth, but with an improved performance in Q4, a slightly better position. If we look at the U.S., we have seen a softer Q4, but on the back of an outstanding Q3. So overall, the good news is that we are growing 5% like- for- like in the second semester, with good sell-out performance, in particular for Black Friday. We have to point out, however, that we've seen a soft replenishment after this good sellout of Black Friday.
Overall, we have consolidated our part, our leadership in cookware in the U.S., in a market that has been, let's say, characterized by, soft consumption and, prudent procurement strategy from retailers. And we have seen market share gains, in our three complementary brands. Tefal has consolidated its number one position, overall for non-stick. All-Clad remains the number one premium brand, and IMUSA, the number one ethnic brand, in the U.S. In Mexico, we have seen double-digit organic sales growth in a, structurally growing market, but we have seen also, we have demonstrated our ability to gain market share across categories. We can talk about linen care, cookware, blenders, and also fans, of course, and we have also benefited from, the successful innovation, introduction of new product in full auto coffee machines. Moving on to slide 21.
In South America, overall, as you can see, full year, we have seen a strong like-for-like sales growth at 11.5%, and with an even stronger performance in Q4 at +26% on the back of strong seasonal sales of fans, in particular, given, of course, the El Niño phenomenon in Colombia and Brazil. So starting with Colombia, the market, in fact, remained challenging, marked by high inflation in particular, but Groupe SEB has demonstrated, let's say, a strong performance. We are, of course, the historical leader in cookware, and we have continued to gain market share, but we also interestingly gained a number one position in SDA this year, driven by a strong performance in fans and also in blenders. Moving on to Brazil, we have seen steady growth in Brazil, in particular in Q4.
As mentioned, we have benefited from strong sales of fans, driven, of course, by the, again, the El Niño phenomenon. But we have also benefited from successful new product launches, in fans, of course, but also in oilless fryers and a robust performance of our coffee partnerships. Moving on to China on slide 22. First, the good news is that we have achieved low single-digit but positive, as expected, for the full year, at 1% on the back of a more positive 3.3% growth in Q4. Overall, of course, as we've mentioned many times, the consumer sentiment in China remains overall weak, but in this environment, Supor has outperformed significantly, on the back of reinforced leadership in cookware and kitchen electrics.
Thanks in part, of course, to our more resilient product mix, as we pointed out in our Q3 sales conference call. As you know, we are stronger in the more resilient product segment, and this is benefiting Supor. We can talk, of course, about our position in rice cooker, for example, or kettles. But we have also benefited from strong product innovations again. We can talk about portable semi-auto coffee machine or the auto frying machine with a stirring feature and connected, or the titanium no coating wok, which is proving very successful, including in the premium segments in China.
Overall, we continue to benefit also from an excellent execution of our omni-channel strategy, and success in social commerce, in particular, for example, in the Douyin platform of TikTok. Finally, we're also expanding in new product segments. 2023 was marked in particular by our entry into the floor care segment, which, as you know, is a very large market segment in China, and we're expanding progressively our range of products. And we have also been quite successful in mugs, in the drinkware segment, driving double-digit growth in this segment. If we move on to the next slide, in other Asia, to conclude, so we have seen an improving trend, as you can see, in Q4.
Overall, for the full year, the like-for-like performance is disappointing at -6.5%. But we ended on a more positive note at +1.6% in Q4. So, starting with Japan and South Korea, we are, of course, let's say operating in markets which are characterized by weak underlying demand. Although, we have seen, let's say, a small light at the end of the tunnel in Q4 with, let's say, a less negative performance in Q4. We are benefiting, of course, from the commercial successes of our kettle range, as explained by Stanislas, with Justine product, and a positive momentum for cookware in South Korea.
We're also experiencing solid, let's say, positive growth in Australia in Q4 with market share gains, particularly in oilless fryers, linen care, and cookware. And in the rest of the region, we have seen, in fact, a mixed performance in Southeast Asia, although, as I said again, a slightly improving in Q4. I will hand over now to Stanislas for the conclusion.
Thank you, Olivier. We can go straight to the page 25. Well, the outcome of 2023, what is it? First, it's, we've delivered our, our full year organic sales growth guidance, 5.3%. We guided mid single digit. We said we would recover organic growth, from Q2 onwards in the consumer business, and we've done that despite an uncertain environment, volatile environment, let's say. We would, we would confirm, a strong momentum in the professional business, and we've done that. What is changing is that we, we see our ORFA growth, to be at least +15% or 15% growth versus year ago, when the guidance was, 10% growth previously.
That is driven by, of course, a satisfactory top line performance, but also but by a continued generation of gross margin, and a stronger pace discipline that has been pursued throughout the fourth quarter. A year that ends in line with our guidance in the top line, and 15% above last year on the bottom line, against an expectation of 10%. Now, I think we're done for this part. We can take your questions from now on.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one now on your telephone keypad, and to withdraw your question, please press star two. The first question comes from the line of Charles-Louis Scotti, calling from Kepler Cheuvreux. Please, go ahead.
Yes, good afternoon. Thank you for taking my question. I have four, actually. The first one, I know the visibility on top line is pretty low at this stage of the year, but could you tell us how are the negotiations with clients going so far on the volumes and pricing? And what do you expect also in terms of destocking, restocking impact in 2024, if any? My second question on China, if we strip out 2020, I think it's been the second worst year in terms of growth after 2012.
Do you think it is related only to the overall cyclical, gloomy environment and real estate crisis, or have you seen any structural changes, notably in the competitive intensity, that could potentially point to a structurally lower growth there? And if you could give us some color on your sales outlook for 2024, in the country, it would be also super useful. Third question, you guide for a margin closer to 10% by year-end, while the visibility on demands, I guess, remains pretty low. So I think you have at least a good visibility on your cost base. Should we expect continued raw materials and sea freight cost tailwinds, despite the recent uptick in sea freight cost as well?
If you could help us forecast the different building blocks, it would be also of great help. Finally, sorry, I have a long list of questions. Can you come back on yesterday's announcement regarding your professional hub in China? If you could tell us if production capacities will only aim at addressing local Asian market, or should we expect made in China import for some of your professional brands going forward? I think the professional margin will probably end in the high teens range in 2023. I guess with a more competitive setup in China, do you think professional margin could exceed 20% as the division is gaining share as well and gaining scale? Thank you very much.
Okay. Thank you, Charles-Louis. Bonsoir. I will take one, two, and four, and Olivier, you'll take number three. Is that okay?
Okay.
Maybe starting with the fourth one, I think, the professional coffee machine market is really booming. We see a gap in the entry price products or mid-price products in China in particular. And, as we said, we want to consolidate and strengthen our leadership in that segment. So we have decided to take that strategic move and expand our production capabilities and capacities in China to precisely be able to tackle this market. We don't change our view on the global margin of the professional coffee market at this stage. I think you should see that as a further evidence of our commitment to continued development of the professional business, and in particular, driven by the coffee market.
For what regards sales outside of China, I think it's pretty premature to comment on that. We just want to make sure we cover the market and the right price segments of the market in the best possible way. Staying in China, moving on to consumer, we haven't given. You will have noticed, shall we, that we haven't given a sales outlook for 2024, so you will not be surprised if I tell you that I don't even neither give you one for China in 2024. I think it's very premature. It's not, it's not because we want to be difficult, it's because it's very early in the year.
We have the Chinese New Year, which is creating a lot of perturbations, as you know, in the early months of the year in China. Now, when it comes to China, we, we pretty much stick to what we said in the Capital Markets Day, what Vincent Tai shared with you in, I think, a pretty convincing way, which is we see China as a market where middle class households keep growing. We see China as a market where we have pretty much non-discretionary equipment, which consumers need regardless of their purchasing power, and that explains a better performance of Supor.
You will note that in a quarter Q4, where a lot of people talk about negative numbers in Supor, we post a 3.3% positive like-for-like growth, so that confirms that Supor is doing substantially better than the market. So the market is pulled by the product mix of Supor. The market is pulled by a healthy evolution of the number of middle class households, and the market is pulled by a strong innovation by Supor and our ability to cover better and faster than our competition, the changing evolution of the distribution sector. So in summary, the current situation is probably more linked to the overall gloomy situation in the Chinese market than 2026 specific.
We don't see anything specific on our categories at all. And maybe before handing over to Olivier on the margin evolution, as I said, we have still little visibility on the top line. Negotiations are, as usual, difficult. I mean, negotiations are difficult when you want to put price increase, and negotiations are difficult when retailers are looking for price decrease. We don't expect that to have a material implication of our business. As we said, we manage our margins and our margin levels, not only pricing. So, yes, we have tensions and requests from retailers to drop pricing. We try to do it, or we try to respond in a way that we manage and pilot our gross margin, deliveries.
This is what we've done throughout 2023, this is what we've done in Q4, and this is what we intend to do in 2024. Last, your question on the destocking. Difficult to answer because every year we think that retailers have stopped destocking. They are at all-time low levels on our categories. So I would tend to say, when I look at the numbers, except maybe a sporadic retailer in this or that country, we don't expect any material destocking effect on our business, which means that we expect our sellout to be pretty much close to our selling, or our selling to be pretty much close to our sellout. Olivier, margins?
Okay, so first, thank you, Charles First, a question, sorry, a response on the Red Sea issue. So the Red Sea, let's say, disturbances have impact potentially on two things. First, on the cost of transportation, and secondly, on disruptions to supply chains. On the cost, we have managed to, let's say, limit drastically the impact, thanks to, generally, a yearly contract that we have with the shipping lines and the freight forwarders. And we have been able to, let's say, mostly rely on those yearly contracts to in January. Regarding supply chain disruptions, the good news is that we have inventory at retailers and also safety inventory, and of course, we are relying on those.
We have also managed to, let's say, transport the bulk of what we wanted to ship in January. Of course, the impact would be limited if things come back to normal after the Chinese New Year, as is, I think, expected or hoped for for the time being. But we are monitoring the situation, of course, closely, and the situation could be different if it were to, let's say, last for a longer period. But that's not what we are hoping for, expecting at this stage, and so we can, let's say, hope that the impact will be quite limited on our profits.
In terms of the margins, we have seen, in fact, the bulk of the, let's say, readjustment on both purchasing cost, but also raw material and freight in 2023.
This, of course, has helped to rebuild our margins. Hence, let's say the expectation that was shared by Stanislas of an over 15% increase in ORFA. There will be a small tail in 2024, but this is not where, let's say, this is not going to be the biggest driver of growth. As, let's say, in previous years, this industry will continue to rely on its ability to pass price increases and to generate, let's say, a positive impact from mix improvement. And this is going to drive, let's say, the continuous performance that we expect this year and in the coming years.
Just a follow-up question on foreign exchange. Are you able to, you know, estimate what will be the foreign exchange headwinds at this stage, at spot market level? I think it's a couple of dozens of million euro negative.
Well, we're not going to give you a number, but we say that it's going... You know, at this stage, we are expecting this impact to be lower in 2024. But of course, we are exposed to many different currencies, and it's far too early in the year to be able to give a precise guidance. We have on the twenty-second of February a full year results presentation at the SAS, so it would be the opportunity to really dig into the bridge, understand what happened in 2023, and I think this will be the moment where we can really dig in the detail of those questions.
Okay. Thank you very much.
Welcome.
Second reminder, if you would like to ask a question or make a contribution on today's call, please press star one now on your telephone keypad. The next question comes from the line of Alessandro Cecchini from Equita. Please go ahead.
Hello, everybody, and thank you for taking my questions. The first one, actually, it's still about the stocking. So, you stated about that in Western Europe is almost completed. Just if you can provide some comments on the U.S. because, according to your statement, you stated that in the fourth quarter, retailers remained a little bit cautious. So just to understand if your comment on the stocking by clients is just for Western Europe or for overall group, and if you can elaborate a little bit on on the U.S. market.
Then, my second question is about, I mean, the Chinese market, in particular, if you could, there's some flavor on the Chinese New Year, or it's too early, or you don't want to provide, but just if there's some flavor around this big event for you. And the final on the cost base, just on a qualitative base, for next year, you said about small tailwinds, probably from raw material purchasing, logistics. So just to understand if you see instead some areas where there is some inflation, I presume probably still labor costs, but just to better understand on this. Thank you.
Right. Again, I'll take immediately your question on the OpEx. I mean, it's too early to plan on OpEx. I think we will take those questions probably more on the 22nd of February. I mean, the general line is we don't expect massive tailwinds, we don't expect headwinds. I think things are normalizing and the variations or the amplitudes we've seen in the past two or three years we don't see them at this stage for 2024.
Chinese New Year, my friend, is on the 10th of February, so I can comment on something that's happened recently, but it's hard for me, it's hard for us to comment on something that is gonna happen in 10 days from now. The Chinese are still working. They will start their holidays in the next few days. There is no real projection of the prospects of the consumers. If I have to look at the very, very, very short-term evolutions, it is more driven by the absence of 12th of December, 12. 12 promotions that have bounced back in the latter part of December, then a soft early January.
You know, I can give you the weekly sales or the daily sales. It won't give you much indication on that phenomenon. No information on Chinese New Year, because it's on the 10th of February. Your first question was on the destocking. Destocking is in Western Europe and the United States. I think the comment in the deck, and I thank you for pointing it out. The comment in the deck is that retailers, when they plan for promotions, maybe two, three, four years ago, they would take an order of what they expect to sell + 10, 20%. This year, they've taken an order of what they expect to sell, maybe - 5%. This is what we call a prudent procurement strategy.
It is not an intentional destocking. It is just making sure that they are not left with high leftovers after promotional periods. Does that answer your question, Alessandro?
Yeah, yes. Yeah, yes, of course. On China was just flavor. Of course, I know that is in 10 days, but it was just about your flavor, about clients and so on, but it's okay. Thank you.
I understand your appetite and your anxiety to get the answers, but I mean, don't ask us to give you the result before the game.
Okay, okay. Thank you.
All right. Thanks, Alessandro.
We currently have no question coming through. As a final reminder, if you'd like to ask a question, please press star one now. We have another question. The next question comes from the line of Fraser Donlon, calling from Berenberg. Please go ahead.
Hi, hi, Stanislas, Olivier, it's Fraser here from Berenberg. I just had one question on professional. How does the order book look in that business? Because I guess on the one hand, the absolute growth looks high, but then compared to the past peak in 2019, plus, let's say, price inflation, it may be, not so high, or you could make that argument. So I just wondered, like, what your feeling is, either kind of objectively in terms of orders or just kind of subjectively, in terms of how you think about the base you have for the year ahead. Thank you.
Is your question? Hi, Fraser, Happy New Year. Is your question relating to 2023 or 2024 prospective? I didn't hear part of your comment.
Yeah, sorry. But yeah, basically like-
2023
No, more relating to 2024, just in terms of like, if you have any kind of visibility or sense of where we are in the demand cycle for professional?
Well, thank you. I think it's a very valid question. As we said, we see the professional business as one that will enjoy a steady growth short, mid, and long term. We see this business is growing healthy, because it's driven by pretty strong demand factors. The expansion of coffee consumption, let's remind ourselves, expansion of coffee consumption, the versatility, ease of use, and cost reserve of the full auto coffee machines. Our penetration in key markets, China, U.S., DACH, U.K. So we see that the professional business is bound and meant to grow pretty steadily, over and over again. Now, we've had a remarkable 2023, you've seen that.
We do not guide on 2024, only, only to say that we see 2023 as a year where the market has been maybe particularly buoyant, but we don't see any sign of a decline or recession or drawback on this market. So, I expect, we expect a positive 2024. Very difficult at this stage to say... Well, it certainly won't be in the same magnitude as 2023, because putting +30 on +30 would be really, really demanding. But we are optimistic and ambitious for 2024, as well on the professional business.
Perfect. Thank you.
Thank you very much, Fraser.
Last reminder, if you'd like to ask a question, please press star one now. There are no further questions, so I will hand you back to your host to conclude today's conference.
Right. Ladies and gentlemen, thank you very much for your question. Thank you very much for your interest and support. Our next appointment will be on the 22nd of February. That will be a live conversation, a face-to-face conversation in the SFAF meeting in Paris. In the meantime, I wish you all a very nice evening and a Happy New Year. We are still on the 3 1st of January, and in France, we are allowed to say Happy New Year until the end of the month. Thank you very much, and have a nice evening.
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