M&A Announcement

Mar 4, 2016

Good evening, everyone. Thank you for participating in this conference hosted by the management of SENSENAI International F. A. We have the Chairman, Mr. Kim Hapeng CEO, Ramesh Tanwala and CFO, Mr. Kyle Jang Yolff joining us today. I will now turn the call over to management. Please. I think I mean, I'll just open it. Tim Parker, the Chairman here, by saying this has been a very big day for us. It's a seminal acquisition for our business. I think it's a very extremely neat fit, both from a product and from a geographical point of view. We feel as a business, we've delivered over the last 4, 5 years since flotation. I think our share price has increased by 75 percent. So the company has got a good record of sales growth, profits growth and our delivery to shareholders, and we think this could be a major step forward for our group. And I think also we have experienced over the last few years of assimilating this. This is a larger company, but the team is hand ready and have got, I think, very well thought through plans around how to take Sumi into our portfolio. So we're very pleased. It's been a long haul. It's a company we've wanted to acquire for a very long time. And the team are standing ready, I think, to give you a good presentation of what our plans are. Ramesh, over to you. He hasn't slept for very long, so he's still going. Okay. As Tim said just now, we feel that we is a very, very attractive proposition for Transnite. It is truly a transformation deal for us, which can fundamentally strengthen our brand portfolio. If you look at it, today we have 2 key brands in our business. One is SunSunite, which is operating at a mid-30s in the market, covering 5 point 100 dollars going up to $300 price point. And then we have American tourist services operating at its entry price point, which is $100 and below. So there was always this constructive section of the market which is sitting above $300 and we always wanted to have a play in that segment, but we have never been able to do it in a very credible way. In the past, we have tried to have a play in this segment by creating our own brand called Black Label West Samsonite but with limited taxes. I mean, since those days, it's almost a few years back. We always had this desire that we would like to acquire a brand like SUI, which should be able to complement our existing food plan in the travel luggage and the business for equipment and make our entire offering much more complete. When we look at once we acquired Tumi, Tumi is a very well run business. Let's just give you a little bit perspective of their business. Today, Tumi is basically a very well run business. The difference between their business and our business are that bulk of their business is sitting in North America. 2 third of their sales and revenue is coming from North American market and 1 third is coming from rest of the world. For us, our revenue per distributor is almost opposite of that, that more than twothree of our business is coming from other markets than North America and that 4th of our business is coming from North American markets. That is what gives us one of compelling opportunity that when we acquire this business, we can we believe that one of the biggest opportunities that we would have is we can use our global Mitsubishi network, both in retail as well as in the wholesale channels to expand the reach of QV in Asia and Europe. We have it's not that QV doesn't know that that opportunity exists. It is just that we have enough people on the ground in these markets who have local understanding of this market and the consumer preferences. So we can deploy the machine of centralized to make grow faster in markets other than North American market. That does not mean that we are lowering the potential of North American market. Our own belief is that North American business of to me is very well drawn. So it will continue to grow, but we continue to grow more in line with the industry growth, which is estimated to be at a little bit more than a certain kind of growth number. That is what we can expect to come out of the North American market. Any attempt to grow faster than that only will come at the cost of somewhat diluting the brand activity over medium to long term that we would not like to do it. So by diluting the existing profitability that we have in North America, So that is one of the biggest, let's say, the revenue synergy or revenue opportunity that we see in this acquisition. The other thing which Tumi can do to our business, we have been rolling out our own multi plan strategy. We have recently acquired rolling luggage that we also have in house of dumps and contracts, which we have been rolling out globally. And we see when we are doing that rollout of our multi brand stores with our carrying luggage in that, we find that the presence to me will make our offering once again much more credible and thereby will also have direct influence on the profitability and viability of Prisma and Zugunsson. The second opportunity that we see in Tumi when we acquired the brand is one of the weaknesses of the Tumi has been that they do not have a credible half side luggage. If you look at today's net business, the check-in luggage component of the F02 revenue is less than 20%. Whereas in our case, check-in luggage component of our business is almost about 60% plus. Why they are losing out that opportunity is mainly because they do not have credible sharp side offering, whereas the markets that we believe, more particularly in Europe and Asia in the premium price segment has almost entirely moved to the half price. U. S. Is only market where still the first price has a market. That is the reason why the business in U. S. Is doing quite well. But with sunset's own experience of developing light grid hotplate luggage, I think we should be able to bridge that knowledge gap that we have at this stage and which is another major definitive revenue opportunity that we'll see in the post acquisition opportunity out of 2 weeks. The third thing which we look at is what makes this acquisition for us very compelling and very interesting is this business is very, very similar to our business, right from design, development, sourcing, logistics, channel partners, everything is exactly identical. To the extent that when we were doing due diligence, we were surprised that every single factoryware has no single product. We have an existing relationship with them for our other brands, mainly customized. All their customers, whether whichever at the bathroom stores or the malls they're dealing with, we also have relationships going with them. So looking at all this, the closeness or similarity of our business to them, we believe that we will have some very, very compelling and very attractive cost synergies available to us. Of course, all that will be becoming available to us over a period of next month to 2 years' time once we start to implement the integration of the 2 businesses. In this nutshell, I would say these are the 3 key factors which makes Tumi acquisition very, very compelling for us. I'd like to add on one more thing that when you look at it, lots of people ask us since we have been looking here, but to me for a long time, why is that deal happening now? So I'm just proactively deploying to that. So we feel that one reason why the deal is becoming more viable both for us as well as for Tenet is the cost of money, the cost of debt is also at a level where the deal can be engineered or restructured in a manner this will be very attractive for our shareholders, but we'll also be making good sense for their shareholders. No, I think Ramesh is covering on the financing and that's all fairly well disclosed. But we've got a fully committed facility, which will be led by Morgan Stanley and that will just be SunTrust and make it Tokyo in it. That's one of our next big steps is to go and get that done, but I would say we have good momentum there and are feeling very positive about that. And so that we will make done and I think Keith covered what makes us very excited about the business from those obviously synergies that came in here against the brand that is a perfect fit for our business. So I guess from there we can probably open up to Q and A if we want to go there. Absolutely. Yes. So whoever is moderating the meeting will throw the meeting open to questions. Thank you, management. We'll now begin our question and answer Our first question is Darren Chen from JPMorgan. Just a quick question. So post acquisition, would Tumi be independently managed? And also just a quick follow-up, would we see any management changes post transaction? I think obviously the T Suite management change will happen. I mean it's an obvious change. One of the things we'll be focused on is keeping the GMV brand intact. So the business sits the U. S. Business sits conveniently fairly close to our business on the East Coast in the U. S. So the back office integration will happen on the obvious things like finance and IT over time. Those will naturally fit in. So we'll be very focused on keeping a team plugged in here to manage the brand, which is really what we've done with our other acquisitions. So we will have a central brand management. But I think the real power and Ramesh is talking about feet on the ground, the real power and what we'll be able to do with this thing is against the teams we have in Europe and Asia. So we get to the front end of the business, these local teams will be able to help drive those quite well, while we keep the DNA and the product design development fairly centrally managed for this out of the gate. Okay, thanks. Our next question is Suh Zeng from Mackenzie Investment. Please go ahead. Hi, everyone. Just a couple of questions. The first question is on the balance sheet and the leverage. So what level of leverage do you think you want to get back down to over time? And Kyle, I know you said yesterday or I guess for you guys earlier today on your local call that you may not be able to do any deals for a year. That seems like a surprisingly short timeframe. So maybe if you could just clarify that. And the next question is, to what extent does the recent performance of 20, particularly in North America, concern you? Okay. On the leverage side, we're going to start at around 3.3x EBITDA. And you know, you guys well looked at our business, we generate a good amount of cash. Loma does or Tumi does the same thing. And so this will delever fairly quickly. I would say in handful of years, not to be so specific, we will quickly delever down to just below 2 times. And I think that's a zone that business is totally comfortable with. I'm totally comfortable with 3 times, which is where we'll start. So the reality is this should delever quickly. You'll run your own models. I'm sure the analysts will run models and you'll see that that's what's going to happen. I would just say we have a target leverage level. We'll continue to delever this thing. And on the 1 year timeframe, I'm just it's more around just the interest capacity, right? I actually do think we have capacity to do more, but we'll be very focused on managing this business and integrating it. And I'd say 1 year, the reality is between the next 1 to 2 years, you won't see any large plans come in. But it doesn't mean we won't tuck in some things like we've done last year like rolling luggage and other distribution opportunities across the globe that are easier to integrate because they're not really brands that we have to keep alive, but they help us fill in our distribution story in markets like Europe. So you shouldn't be surprised if we do some of those, but they're small in nature, as you want to go through some actually. Coming to the North American business of Sydney, I would say that the North American performance have been not the time, especially when you factor in the macro issues that the business has been faced with. So when we really map their performance versus our own performance, we can really pin it down and see that 2 markets there have been some challenges, but there has been same as everybody else has faced, which is Florida and New York market where the tourist traffic on account of strong U. S. Dollars has been materially low. When we look at our own like for like growth in these two markets, it's been like mid-20s negative. This is similar what makes these or any other guys have done in this market. But other than that, you feel out these two markets, all of the places like for like growth for llama of 2 means, which is solid llama, some people are referring to it like that, has been flat to positive, which is not so bad. The other thing we should also keep in mind is that since 2014, Tumi has been implementing a strategy and we are very supportive of that and we feel that's the right move for them to do it. We used to operate a second brand called C Tech by Tumi, which was operating at a lower starting point and it was created basically to drive more volume out of services. But I did realize that that was also damaging and damaging the brand equity of the program because nobody was buying Detect as an independent brand because it was called TETAC by TETAC. People are mostly buying TETAC, the thing that they were buying TETAC and which was over 0 time was that with their brand equity. Another thing is they have changed their target since 2014 to be reflecting on their numbers partly in second half of 'fourteen and 'fifteen is they also took that call to cut down the promotional business. In the period of 'twelve, 'twelve period, they were also very aggressive like many other plants in that category in the segment of bags and luggage, including likes of couch and market course that they've become also very, very aggressive in running promotions and too many sales happening through factory outlets that is rapidly expanding the footprint of the factory outlet. All those there started to correct it as of second half of 'fourteen and have continued to 'fifteen. When we look at business today, I think bulk of this cleaning up has been done. About 95% of that has been achieved. So when we are going to be acquiring the business, we will get a cleaner business and a business which is strategically oriented to not only profit the profitability of the business, but also protect the brand equity of the business, which is very, very important for a category like this. So, I would say, Lucknow, our own view of what business was to be there that they have done a little bit jobless, but they have not done it right in there. This is our judgment. Probably they have not been guiding their market well enough. So the guidance always have been far in excess and they have in time not corrected the guidance. Everybody knew that there were some headwinds which were there in the market. It is not correct in guidance. The market was always caught getting quite surprised with the numbers, and the result of that has been that it's been that they have had a good performance. Okay. Thank you. Our next question is Hossein from McKinsey. Sorry, this is the last one for me, I promise. So just Tumi's growth strategy over the last number of years, a big part of it has been centered around new store growth in North America and in Europe and also expanding the wholesale part of it, but the retail expansion of the retail footprint has occupied a lot of CapEx. Do you envision I know you may not be able to give us all these details, but do you envision any change to that growth strategy? And would that have an impact to their CapEx whereby you could bring it down to a level closer to yours? Yes. There is a small change in our strategy for the business. We believe that they have kind of maxed out in the North American distribution footprint, both retail as well as the wholesale. So any attempt to now grow their reserves in North America faster than industry growth, industry growth is expected to be in North America in the range of around 4% to 5%. So, any attempt to grow faster than that will come at the cost of either diluting the brand or diluting the profitability of the business. When we are modeling their next 5 years, let's say, outlook for the business, we are expecting a more moderate growth from marketing and business, more in line with industry growth, whereas we feel that their business is underrepresented and under managed in Asia and Europe. I'm not even speaking of Latin America as I say. But if you look at it in Asia, 40% I mean, half of that, Asia delivered 40% of our sales. Grossly under managed or under pegged the market for them in China. I think we feel that in spite of whatever, let's say, a little bit of losses that is there in China, still it's a very, very compelling market. It offers great opportunity for us to really looking at the market. We would be putting more emphasis to get higher growth than what's ever getting it out of Europe and Asia. And our confidence is based upon our experience in these markets. Plus, we are structured naturally in the kind of a federal structure wherein our business units at the country level are capable to take decisions to ensure that whether it's our products out here, market strategy are guided towards what will serve the consumer interest the best. But we have enough number of people, what we call is that we have enough foot soldiers in each of this market really go out and optimize the business and look for driving to a strong potential in this market. Growth in this market for us, we believe is much more. I would not hesitate to see, but I would be personally disappointed if we cannot double the business and more than double the business in this market over the next 3 to 4 years' time because there is an opportunity there. Because they do not manage both of these markets directly themselves. They have distributor arrangement there. Then you have distributors there. Distributors looking at, he wants to make money today, Who's going to invest behind the business? Distributors don't want to have a vision where you will make money after 3 or 4 or 5 years' time because you also only take bets with the 100% stake business. So that's the only track. It is separately our intention that for a period of time, through process of negotiation, strategy negotiations, we will move this business to more directly operated business the way we do our business today for our own brands. This will also give us an absolutely good business process. Coming to CapEx, in reality, the CapEx numbers that they have in the business today, so you're looking for modeling the business, the CapEx numbers will be more or less same as what they used to be sending it in the past, which is on 15 and 14. It's just that it's allocating will happen differently. There will be less money spent in North American market and more money will be allocated to Europe and Asia. I must also add to that that particularly in Asia, the bulk of their premium bag and luggage sales are happening from the department stores. Our department store still plays a very, very important role in key markets like Japan, Korea, China. That's still the main channel where the premium products are sold. So maybe the retail rollout may be somewhat more, right? Because we're pushing more shop in shop kind of a thing in the customer store. But overall, you can model your business to say that retail CapEx or the overall CapEx number would remain same as what they have now. So the pacing would be a difference to what they were doing in the past. Okay, great. Thank you very much. Our next question is Josh from Westwood International. Hi, sorry. It's actually it's Thomas Pinto Basso from Westwood. Two questions, if I might, on, I guess, at the end of the day, what your product lineup is going to look like and also what we can draw from the Hartman experience. The Hartman experience seems to have seems to have taken longer to integrate, to roll out across. So I'm just curious as to and I think you kind of answered the question earlier on, but how this integration is going to be easier than Hartman? And secondly, how does Hartman fit now in your product pyramid? They were the premium product. I know they're slightly they're obviously different to Tumi, but can you just talk a bit about how your existing premium products now will fit with Tumi coming in? Okay. Let me look at it from there. How do we see their product strategy evolving over the next 3 to 5 years time? I would say Tubi currently is doing a very good job in terms of their ability to design and develop business product more particularly and more suited for the North American market. That has been their core strength so far, which has delivered them exceptionally good results. They have also done a very good job over the last 3 years in developing the women business act segment, where they also see one of that segment is today and I'm reading from the context of Jerome that it was addressing after the Gooligay Admiral reserve announcement a couple of weeks back that has been everyday used to this tax payment they are doing extremely well. So our intention is to basically continue what they are doing. So there are areas where we believe we would like to see changes in the product strategy. And one of the major areas, as I said before, was the half size category, because you do not have a compelling and a competitive hard side offering to really meet the requirements more particularly for Europe and Asia in the chicken nugget segment. To give you an example, today in the premium nugget segment, it is $200 per segment. In Europe and in Asia. Asia, 100% of that market has now moved to half market. Whereas in North America, it's still only 20% of the market is half size. So to me, Gantt continue to do well for their collective role, Alba, and does very well. It continues to do extremely well in North American market. But that is not the kind of collection that is cutting eyes with the consumer in Asia and Europe. That is where we intend to come in and bring new hard site collection for them. And I must admit it that what we are talking about is not that they do not know that we can, they do not see they do not know about their opportunity. They are 100% aware of that opportunity. They have not been able to develop a credible offering there. It is just that they have some knowledge gaps. They do not have enough experience in this category and they have some stumbling block in terms of knowledge and technology which is required. And that is what we did great because concern has deep understanding of how to design and develop lightweight half size luggage because Asian and European consumers, apart from looking for a very compelling design for half size, pipe. We're also looking for something that is very, very lightweight. So that's one change we will bring about. It may take, let's say, today we're looking at it 1 or 2 years' time. The second area where we feel we can make an improvement to what our current offering is, even in the business category, The current offering is very, very compelling and very fast for the North American market and in other markets for the banking community or the investment banking community. They are all used to using They all like the product. But if you leave the parties who are not associated with the banking and the investment community are very good for the banking people, but for other consumers, they do not find them attractive. And we as a company, we have that experience of how to design and develop products which are more suited for individual markets like Japan, like Korea, like China, even for that example, what will work in Germany and what will work in Italy. But close to voice, there are local nuances, which we have to address, which we know how to do that. So that will be another thing which will bring about the change in their current product offering that they have it. All that will happen over a period of next let's say next 1 to 3 years' time. Coming back to Hotman. Now Hartman experience, I must admit it that we are very satisfied with our current performance of Hartman. Hotmail and Q and A are not something there's very little correlation between the 2. When we bought Hotmail, we just bought a brand, a brand which was getting substituted and the brand was getting busted. When we really bought the brand, it took almost 2 years' time to clean the brand and to clean all the shipments lying around. And then 2015, we relaunched the brand. So plus we did not have any management balance. There was no design funded. So we had to create the design right from the scratch starting from the consumer study to marketing freeze and then developing the product. So it's a weekend much, much longer. But when we look at today's performance, I would say they are very, very satisfied with the Huffman's performance. And Hotmail, I'll cover up as to how we see Hotmail saying better with 2 weeks. I can give you an example. We see Hartman as more of a kind of a classic heritage, American heritage kind of brand, little bit like a Polo Ralph Lauren. And to me, it's a little bit more like a Georgia or Barney kind of a thing. You feel that both these brands can coexist with each other. It is true that the size and scale of Hotmail is very different than to me. And the current franchise of Hotmail is basically limited to North American market and in Japan. So it is definitely our intention to continue to build on the goodwill of Heartland, which exists in these two markets and will continue to develop the products which continue to retain the top end DNA, which is tan leather, vecting leather, of Hotman, which we can still appreciate. But the scale will be very different. The number of cases of Hotman is that in the next 5 years' time, we want to grow Huffman to be around $100,000,000 tonne and we know that definitely it will get there. The Tumi is already a $150,000,000 brand and the business over the next 5 years will be probably from where it is now. So there are 2 different cases. Coming to the delay of Aspen, as I said, 2 years coming in with already a well structured of negatives. We know they have that design funnel, which is today working on the teams are working on design, which will be needed for the market in 2018. They work like how we work on it. So, we know that if you have to work on something which is completely new, that some new technologies are getting also incorporated, to lead almost 2 to 3 years' time before the product will be able to take the boxes. At Huttmann, there was nothing there. So we will start from the strategy to the PSI and the team get there. Whereas we already have existing products which are building in market, but at the same time, we already have collections. We have been and these are the challenges we have been presented. They have a collection which is going to get to the market in the fall winter of 2015. They have the connections ready which is being hit in the market in December 20 17 and they are doing at this stage some more engineering work on the factory for automotive sector in 2017. And right now, we are still in the design brief for The result of that is there that they will not have what kind of a it's not a fair comparison as a business has managed. Thanks. So just to follow on, just to make sure I understand correctly, as far as the heart side category and introducing something from Tumi, you're saying that's within the 1 to 3 year timeline as well or was that 1 to 3 year timeline specifically for the non business offering from Tumi? I would say hard time 1 to 2 years ago, we should look at it from the payment to specific business. Once it's let us say, they have the design packages ready with that. So but we do not have the truth to that how far they are and how suitable they are in terms of our understanding of what are the enduring complexities in mortgage. So the design packages are well advanced, but we can enter the market with new products for them, new hub sites within a period of 1 year. If we find that there are more enduring challenges, then we should be talking about 2 years to operate. As far as business products and other close to body products are concerned, It will depend upon how we start to convert those markets from distributor markets to directly operated markets because it's no point in going out and doing the same thing with your distributors. So one of the first markets that was product development we had in Japan was as of January, they have already commercially confirmed that market into a fully owned market. But in that market where post integration, we can move rather quickly to start developing products which are more suited for the mid market. For example, one of the popularity of Japan, which is very easy for us to understand is that we want to sell any product with the business model which is above 500 dollars. But the critical minimum must say that is roughly equal to sports made in Japan. That is not made in Japan very Secondly, it's not like you need to put a label on that. If it's letter being used there, that's all vegetable tanda advised. Diet. So you have no other countries specify that. It's not that that's a legal requirement in Japan, but it's a consumer preference there. The department is so intent on you to qualify that. So if your products are not using vegetable pie, they will just not place the product. And the popular store are the key channels where the product was installed. In Japan, hopefully, we can get started much deeper post integration. I would say we would aim to develop some of the collections based upon our past experience in this market, maybe in a heated or fun year time. The other market will also go by as we will introduce those projects, convert them into more variety of rigid projects, and then we will start to tweak their close to growing product strategies. Our next question is Alex from Saracen and Partners. Hi. It's actually Simon Steele from Saracen Partners. First of all, congratulations. It looks like a great deal. So well done. Can you hear me? Yes. I always can hear you, yes. Okay, great. Well, I said firstly, congratulations. It looks like a great deal. Actually, some of the questions has already been answered in the previous question, but just curious to know your thoughts on how many of the points of sales that you have in Europe and Asia do you think could be appropriate for Tumi? And to what sort of regions would you go for first at all? And also to what extent you think the existing supplier base can cope with the additional resources, particularly with new products not that far away on the horizon? Yes. Let's look at it in terms of the channels. I would say that today we have about 100 odd multi brand stores in Europe and Asia and program in U. S. They are all right platform to also be selling to me. Rather than we have one chain store called Rolling Lake EBITDA, the airport stores in UK and a few other European markets. They already sell that to me and we actually contribute to those stores almost about 60% to 70% of their sales. And we have been making and we can continue to sell. There are other multi brand stores that we have, we have got 100 point of sales like that, which can right away start to sell to me. But we have also one of our vision which we have been expecting over the last couple of years is that we believe that, especially in Europe, but also increasingly now in Europe, in Asia and U. S. As well, the department stores are actually not making money. And we feel that the department stores, which has it's the main channel for our distribution. That position is becoming more and more precarious. So as a result, it is becoming almost important for us and method of critical for us to have our own multi brand stores. And with our experience of growing that we see that we can make very significant contribution to bring additional things to our multi brand store and which can have a clear impact on the profitability of this store. So I would say post acquisition of TUI, we will have more conviction in order to expand our multi brand store concept much more rapidly than we have been doing so far. So that is an opportunity we can look at it from a specific point of view. But I must also warn you that in Asia, we've done quite a few small start plant stores. Like, they have their own brand store in North America and 2 of them in Europe, most of them here in the UK. So we have no intention to sell SunSmart in 2 million brand stores, our 2 million tons of brand stores because the brand stores are not only serving the purpose of making a sale, but they're also an important very, very important tool to build the brand experience. We would not like to confuse the consumer between 2 different brand, it would be a 2 different brand DNA of Sunstein and Tumi. I don't know what the need for the side. Yes. Sorry, the second part of the question was just about the suppliers and their ability to scale up to maybe additional resource? Yes. If you look at it, we do evidence what we found out. We always knew about that. That each one of their suppliers, without any exception, is a supplier where we have existing relationships. And probably our relationship is bigger than their relationship just because now we have the scale advantage. So we definitely would be able to leverage this common supply chain that we have. So that would have some ceded, that is because in the past we have chief manufacturing experience and we still operate 3 of our own plants which gives us a better understanding of how to run the cost. So we start out costing our product from a detailed steel of material, and we are still doing our due diligence. SME doesn't start that way. We will target cost because they will give more action and desonorated people. As a result, we feel our supply group feels that there could be some very significant cost savings in terms of working with the same vendors to get better book fees out of them than what we are able to get it today. And part of it is also because we can take advantage of the things Like many of our raw material like the formicarbonate and the nylon that we use it, we tend to push all our vendors in order to combine our quantities with 1 or 2 suppliers and then we hit on the supply to pass those on to us. So we combine our requirements with Ziffer volume and then we are now looking for Ziffer volume to pay. That's another thing that's possibly benefit to me and which would get reflected in some cost benefits that we could find in kidney business which will improve their profitability. But I would not say that maybe we also feel that as we work to improve the profitability, part of the saving, it is very much our intention. We think they are also somewhat underinvested in terms of the marketing investment so far they are doing it. So part of the savings we may like to have that into their marketing sense. So if you look at our own business, our marketing spend is in the region of around 6.5%. Their marketing spend is much lower than there we are. And as we were trying for medical savings, we would tend to invest some part of that savings into additional marketing spend. Things. Our next question is Ian from Investecal. I had some questions relating to the funding side and whether you can give some broad guidance on what you expect in terms of funding cost? And also just on the denomination of the debt as well, given that I suppose roughly 50% of your sales are in U. S. Dollars? Yes. We haven't we're not giving guidance on the cost because it needs to play out. What we've been telling folks is, we're at historical low levels for debt. And I think we will optimize and end up in as good a position as we can. I think if you look around at deals that have been happening, we've got a good chance for that. But it's hard for us to give you a specific number. I'm feeling highly confident with the bank team that we have, we will have a good execution. But I can't So that's a good number. So as far as debt, we will it will largely be U. S. So we've left ourselves the opportunity in the newspapers to fill in a euro tranche and we will watch and see how the syndication process plays out and decide if that's beneficial for us as well. So there's a chance we will have a euro component to the debt, but I would say that's not played out yet either. Okay. So that's a big part for us to give you the cost of debt number. We'll be working to get that square to ourselves in the next few to a week. Great. Okay. Thanks. And then I had a question for Tim. I think you've been quoted Tim in the press as saying that historically that Timi is too expensive. I guess at that time, probably interest rates were quite low at that point. So what's changed your mind since then? Well, I'm trying to think where this quote is dredged up from, but I haven't it probably relates to a question that was put to me at the time of the IPO or roundabout the time of the IPO. And at that point, their business was obviously less well developed than it is today and it was owned by they had private equity owners who were indeed, I think, seeking a very ambitious realization for the business. And so it was really, I suspect, if I said that, it was to do with the situation at the time. My mind, however, hasn't changed around the attractiveness of the business. And I think there are several factors that make this a very good transaction to do today. The first is that I think we feel pretty confident about the capacity of our business to build brands in Asia particularly and also in Europe. The second is that we ourselves, I think, are a more mature business with a highly efficient, well developed model that works on a normal basis across the world. We have made a number of smaller acquisitions, and we've gained some very good experience there. And I think our understanding of the capacity, the future opportunities with Tumi is also much more developed today than it would have been a few years back. And if you couple that with what I think are very good conditions in terms of financing costs, I think this adds up to an extremely attractive deal. I was saying to some people not earlier on this evening that this is a deal we would have been happy to do at a slightly higher price had it happened. So we're not we feel that where we're at the moment is it's not a cheap deal, but I think it's value for our business. Certainly, after a couple of years, we'll be in very positive territory. I suppose one other question that I had is just it seems like the big opportunity is to grow the brand outside the U. S. And you've said that you need to evolve the product to do that. What gives you the confidence that the brand equity is strong enough to support the much higher price points that exists for me? Because I guess otherwise, you don't want to end up competing with your existing brands having to charge a lower price. Yes. So let's say, to me, it's a brand which has a market of some very strong brand equity Because it's not that whether it's China or Hong Kong or Japan or Korea or Germany, they have risen there in all these markets. It is just that the share of their business in these markets is much lower than what you could actually achieve it. What's really missing is, I would say, the team on the ground. Like I can give you the concrete example that in Madrid, I was there a couple of weeks back, you have 2 stores. And the guy who is providing those stores is coming from Paris. It's also difficult for them to hire a person in Spain just to manage 2 stores. Whereas in Spain, in our team, they are 32 people. Because we have a sizable business in Spain. Our business in Spain is close to around 50,000,000 euros whereas their reserves in Spain is about today is about €2,000,000 So how do you do that? For us, in that business, it will be great case with our own current business. Now people can service those markets much better and that's where we have no more questions. Now I'll pass back to management for conclusion. Thank you. Thank you very much. Thanks a lot. Thank you.