Earnings Call: Q4 2019

Jan 16, 2020

Good morning. I'm the ArcoDine operator for this conference. Welcome to the Geberit Conference Call on the First Information 2019. Please note that for the duration of the presentation, all participants will be in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. This call must not be recorded for publication or broadcast. At this time, I would like to turn the conference over to Mr. Christian Bull, CEO, accompanied by Mr. Roland CFO and Mr. Roland Wiedler, Head of Corporate Communications and Investor Relations. Please go ahead, sir. Thank you for the introduction. Good morning, ladies and gentlemen. Welcome to Geberit's full year sales conference call. We will first comment on our Q4 sales figures, then review our full year sales performance, followed by an outlook for the building industry in 2020, and finally, summarize the key priorities for Geberit this year. I'll start with the Q4. Geberit achieved solid sales growth in the last quarter of 2019. Sales in local currencies grew by 1.9%, negatively impacted by 1 working day less and weak ceramic sales at the end of the year due to the phase out of 2 further brands at the beginning of 2020. In Swiss francs, sales decreased by 1.1 percent to CHF 702,000,000 negatively influenced by weaker foreign currency. Sales in Europe increased currency adjusted by 2.1%. Positive sales growth rates were achieved in Eastern Europe with 7.9%, Italy with 7.4%, Switzerland with 4.5%, Iberia and Indelab with 4.4%, Nordic region with 3.5%, Benelux with 2.8%. Sales in Germany were of previous year levels. A sales decline was recorded in Austria with minus 0.5 percent, in UK, Ireland with minus 1.2% and in France with minus 5.9% driven by strong comps and the brand fair payout of the local ceramics brand. Outside Europe, we achieved a growth of 1.5% in America. Sales in Far East Pacific decreased by 2.3% driven by a sales decline in India. And in Middle East Africa, sales decreased by 1.3% driven by the weak market environment in the Gulf. Turning now to the product areas. In the 4th quarter, installation and flushing business sales were on previous year's level after a very strong Q3. Piping Systems grew by 5.3% and Bathroom Systems grew by 0.5%. I will now comment on the full year 2019 sales performance. Group consolidated sales reached CHF3.1 million corresponding to previous year's level. Sales growth in local currencies reached 3.4%. Sales in Europe increased by 3.4%. All markets recorded positive growth rates with the exception of France where sales remained on previous year's level. In Germany, sales were up by 3.2%, driven by strong growth in installation and flushing and piping systems. Sales in the Nordic region grew by 2.6% with growth in all countries, driven by strong growth in installation and flushing systems and piping. In Eastern Europe, sales were up by 2.9% with strong growth in installation and flushing systems. Sales in Switzerland grew by 3.9% with positive growth rates in all three product areas. Panadol sales were up 7.4% with strong growth rates in Belgium and the Netherlands. In Italy, sales grew by 1.3%, negatively affected by a sales decline in bathroom systems due to the phase out of the local ceramics brand in 2020. Sales in France decreased slightly by 0.4% with strong growth in installation and flushes. But the sales decline in bathroom systems due to the exit of a low margin business in ceramics and the phase out of the local ceramics brand as of 2020. In Austria, sales grew with 5.2% with growth in all product areas. The UK recorded a sales increase by 5.3% with strong growth in Piping Systems. On the Iberian Peninsula, sales grew by 4.9% with sales growth in Spain and in Portugal. If our specific sales grew by 9% with double digit growth in China. Americas, sales were slightly up by 0.5% in a weaker than expected environment of the institutional markets. Sales in the Middle East and Africa region were up by 1.3% with strong growth in Southern Africa and a sales decline in the Gulf region. Let me now comment on the sales development per product area for 2019, again adjusted by current dividend. Installation Flushing Systems sales increased by 4.5% with strong growth with behind the wall flushing systems. Tightening systems grew by 5.8% with strong growth in both product lines, supply piping and drainage piping systems. Bathroom Systems sales were previously at levels negatively affected by weak market environment in the Nordics, lower sales due to the phase out of selected local ceramic brands and the exit of low margin ceramics business in France. I come now to our guidance for our 2019 financial results. The EBITDA margin for the full year is expected to be around 29%. The full year tax rate should reach around 30% and CapEx is expected to be in the range of CHF 170,000,000 to CHF180,000,000. The share buyback program has been continued in 2019. For end of 2019, 765,000 shares have been bought back for a total consideration of CHF 323 1,000,000. Let me now comment on our outlook on the building construction industry in 2020. The geopolitical risks increased significantly, creating more uncertainties and volatility in the economy channel. However, the building industry is expected to remain rather stable, but globally with a mixed picture. In Europe, we noticed since 1 year a decline of residential building permits, leading to a slowdown of the new build segment this year, partially compensated by a robust renovation sector. Let me now comment on the individual company outlooks. We remain confident about the construction demand in Germany, although the limited qualified installation capacity remains a bottleneck. In the Nordic region, we expected and met the second 18 market supported by a modest growth in Norway and Denmark and negatively affected by a decline in Sweden and Finland. In Switzerland, we expect a slightly declining market driven by a softer neuro residential segment. We remain positive for Austria where the construction market should slightly grow. In Italy and France, we expect for 2020 a stagnating market environment with a declining residential newbuild segment in France. The construction markets in Eastern Europe remain to be mixed with positive markets like, for example, Poland, a stagnating environment in Russia or a challenging market in Turkey. We expect in the U. K. A stabilization of the declining market environment in the last 3 years. We are positive for Benelux with a solid growth in Belgium and only a flattish market in the Netherlands due to a stricter enforcement of environmental regulations. The building construction sector on the Iberia Peninsula is further recovering, although at a lower pace than in previous years. In North America, the most important market segments for GetRig, Institutional and Commercial Sector, are expected to decline slightly, mainly driven by the commercial segment. In the Middle East, the natural region, we expect overall a difficult environment for the building industry in 2020. There is no real visibility and predictability in the Gulf region, driven by the political uncertainties and risks. We do not expect any upside. We are also cautious for South Africa due to the economic uncertainties and decrease in building permits. And the market environment in Northern Africa and the near east region remains mixed. Let me finalize our market outlook for 2020 with Asia Pacific. We expect a continuing moderate growth of the Chinese building construction market. The growth expectations for the building industry in India are limited due to the lack of liquidity. In Australia, we expect a decline in the production market and the picture in North and Southeast Asia remains to be mixed. And now, few words about the raw material price environment. The increased geopolitical risk make an outlook for the raw material market very difficult. However, we expect for Q1 2020 slightly increasing raw material prices versus Q4 2019 driven by higher metal prices. Let me now comment on some of our business priorities this year. Besides regular new product introductions, we want to highlight 3 important topics for 2020. Firstly, and as announced already last year, we will further execute on our brand harmonization roadmap and replace 3 former Sonic brands by the Geberit brand. These brand switches will lead again to extraordinary marketing costs of CHF 10,000,000. Secondly, we will further expand our digitalization efforts with dedicated initiatives, including the buildup of additional IT capacity. In total, we will increase our spending for digital initiatives by CHF 15,000,000 this year. And thirdly, we will focus on various efficiency projects as part of our continued improvement program to mitigate the again significant wage inflation in 2020. Despite the challenging market environment, we are confident to deliver also in 2020 decent results based on our strong market position, especially in Europe, our innovative product portfolio, our strong relations to customers and our efficient and performance oriented organization. This is the end of our introduction. We are now ready to answer your questions. The first question is from Andrea Kukhnin, Credit Suisse. Your line is now open. Good morning. Yes, it's Andre from Credit Suisse. Thanks so much for taking my questions. I'll go one at a time. Firstly, on Germany, could you maybe give us a bit of color on what drove that sequential slowdown on easier comparison in the country, maybe across residential, nonresidential? And was there any change in the run rate of activity as you went through the quarter, please? No, we have not seen any fundamental change in the market in Germany in the Q4, also in the second half of the year. But indeed, we have a stronger first half of the year compared to the second half of the year, also driven by a stronger price increase in Germany last year, the first half of the year. But fundamentally, we have not seen any change in the market, also not during Q4. Got it. And in terms of products on the piping systems, that strong growth, I think, clearly beats the market in Q4 and the second half. Was this the result of your new product introductions early in the year? And would you expect that effect to carry through to 2020? Or was there anything kind of more one off nature that we should be aware of? The strong growth of hypersistence in Q4 was not specific, that was just quarterly volatility, which we always see from time to time. Of course, for the full year growth, the new products which we introduced the last couple of years were very crucial and very important, they contributed substantially to the growth rate of 5.8% in the full year. And in terms of continuity of that effect of new product introductions, could you comment on that? I mean, have we seen the effect in 2019? Or is this something that is more of a multiyear driver? I'm not sure if I understood your question. Can you ask again, sorry? Yes. You launched some successful products at the beginning of 2019 from what I understand. And I just wanted to get a gauge on whether we've seen the full effect of that in 2019? Or is this something that is still gathering pace or gathered pace during 2019 and hence will have a further impact in 2020? The product which we introduced in 2019 also in Piping Systems did not have a material impact on sales or growth rate in 2019. That takes more time. Okay. Got it. And on digital investment that you just mentioned of EUR 15,000,000, could you talk about the payback expectations on that? And maybe financially, but also in terms of what is this going to bring to Geberis? What capabilities are you investing in? I cannot talk about the payback because we do not have any payback calculation with regards to this digital initiative. It's basically just strengthening our activities, our position in digital area on two sides mainly. One is on the marketing side this year. For example, we will build up or strengthen our team for digital product data, the marketing side, but we also invest in more people in the digital product area. So it's a general execution of our digital strategy and we do not calculate any payback. The payback will be then on top line to market stronger and to have a better quality growth in the future. Got it. And if I may, just final very broad question. In terms of kind of growth rates, you're delivering visavis your midterm targets. And the end market outlook that you've just given for 2020, it looks like it's maybe a touch more cautious versus what you said about 2019 a year ago. So I just wonder, looking at 2020, and obviously not inviting any guidance, I know it's far too early for that. But just conceptually, if you're facing end markets that are slightly less positive and at the same time having delivered sub-four percent growth rates in the prior conditions. Is there something there in 2020 that we can anticipate from kind of Geberit specific drivers or your specific end market mix that can get you into that range? So on a total market perspective, we do not expect a fundamentally different market this year in 2020 versus 2019. Of course, on a country level, we are in some countries a bit more positive, others we are a little bit more cautious. But all in all, I would say we have pretty much the same expectations for the market in 2020 over what we have seen in 2019 already. And in terms of specific drivers, is there anything in 2020 that can be different versus 2019? No. In terms of the Geberit drivers, it's the same drivers as last year. We want to continue to outperform the market, all our markets, either with the penetration of our technology or by upselling of our product portfolio, for example, also upselling the aquacrine initiative in Europe. So the strategy is the same. The priorities are the same. It's all about execution to continue also to outperform the market in 2020 as we did in 2019. Got it. Thank you very much for your time, Christian. You're welcome. The next question is from Danielle Costa, Goldman Sachs. Your line is now open. Please go ahead. Hi, good morning. Thank you very much for taking my questions. I have two quick follow ups. So the first one in your commentary regarding raw material outlook, when you mentioned 1Q 2020, slight increase versus Q4 2019 due to metals. Can you help us out doing the comparison year on year, has throughout the year or to 1Q? And also, you mentioned metals, but I think plastic prices, some of like the s tren and the polypropylene prices have been coming down. When would you see later in the year benefits from that? That's my first question. And now I'll ask the second one once you've addressed that. The answer to the first question depends, of course, on how strong raw materials increase in the Q1 versus Q4 2019. But currently, we expect that the level in Q1 should be comparable to the level of prices in Q1 2018. Lower plastic prices in certain areas that is true that we are seeing that We expect that to have an impact already in the first half of the year. Thank you. And then a clarification on these digitization spend. You mentioned EUR 15,000,000, if I heard it correctly. Is that incremental over and above what a normal run rate of IT or R and D to sales would be? Do you see that has incremental? Or are we just talking in absolutes from a flat base? I'm not sure if I understood your question. Is it incremental? Yes. So do you see maybe putting it another way, I guess that those digitization initiatives fall into R and D spending or IT spending. Do you see the ratio of IT or R and D spending to sales increasing? Is this EUR 50,000,000 incremental? Or if sales would have grown, it would have grown any For that part, which is going into IT, not all the €50,000,000 is IT related directly, but there is true. Then that means that the share of IT costs versus sales is increasing. That is correct. But it's not only €60,000,000 of it right. And just originally, that's what I heard is €15,000,000 Is it 15 or 50? Sorry. 15. 15. 15. 15. All right. Okay. Thank you very much. Those were my questions. The next question is from Martin Hutzler, Zurcher Kantonalbank. Your line is now open. Please go ahead. Yes, good morning. Just an add on to this digitalization again. So it's all OpEx. Do I understand this correctly? It's not CapEx? Yes. It's personnel costs and other OpEx, but it's all OpEx, correct. Okay. At this stage, any CapEx guidance for 2020? We expect CapEx this year to be around SEK 180,000,000 to in France for 2020. Okay. And then my question to 2019. Of the sales increase of 3.4 local currencies, what's your best guess on mix between price, up trading and volume there? Price has definitely an important impact. The 3.4%, we have had a price increase of around 1.5% in 2019. And we will have positive effect also from product mix in 2019. So higher product mix. So of the rise, let's say, the 2%, it's rather product mix than increased volumes? No, no, no. I didn't say that. There is a positive effect on product mix, but the large part is still volume. Okay. Thank you. And maybe just a last one. The outlook for the U. K, it was too fast for me. What's the outlook for 2020? We expect for us a stable market environment in the U. K. For this year. Okay. So no Brexit impact so far? No. We believe we hope that we hear that the decreased uncertainties now, we have an increased decreased uncertainties that should help also the construction industry. Therefore, we are a bit more positive for the U. K. This year compared to last 3 years. Okay. Thank you. You're welcome. The next Again, a follow-up question on your product development, particularly the strong piping. So it was quite an unusual year, Piping growing stronger than Insulation business. If you could rank the growth rate of the 3 product groups for 2020, do you think installation would again be back to the top? Or would you expect a similar picture? This will be my first question. I disagree with your view that pricing was especially strong 2019 versus installation and philosophy. Also the year before, we had similar growth rates in installation and flustered systems and pipe systems. So there is no structural difference in 2019 between the 2 product areas compared to the previous years. So you think structurally pipe, you can grow same pace as insulation systems? Sorry, can you repeat? So you think structurally, piping can grow at the same pace as installation systems? I do not make any guidance, of course, for 20 20 if you refer to that. But fundamentally, the potential to outperform the market with Piping Systems is similar as the potential to outperform the market with installation and flushing systems. Okay. Okay. Thank you. Then a second question. Earlier, you stated about the 2 brand plays outs this year in Q1 and another one in Q2. Is this still the road map? And Can you tell us which brands this will be the next ones? Yes. Nothing changed. We started to phase out 2 brands now as of January this year. 1 is Alia, that's the brand in France and the second one is Boccinoi, that's the brand in Italy. And in the Q2, we will start to phase out the brand in the Netherlands that's fixed the local brand. Okay. And so a last one on industrial, which was quite a success story for the over the past years. And you expect again a difficult 2020. You mentioned liquidity. Can you elaborate on the Indian market? Is it all kind of macro and liquidity driven? Or is there any other thing product wise here to mention? Can you also give us a bit of feeling of the sales share in India? How important is this of your APAC revenues? So India is one of the important markets in Asia Pacific. The challenge this year is that we have seen several projects which have been stopped or delayed due to liquidity reasons. It also reported that the number of unsold apartments in many of the top cities is decreasing substantially. That doesn't attract, of course, more money or investment into new projects. And generally, the economy, as you know, is somewhat weaker than in the past. Therefore, we are more cautious and we only expect a limited growth also for us this year 2020. Okay. Okay. And you say okay. Okay. Thank you. You're welcome. The next question is from Arnaud Lehmann, Bank of America. Your line is now open. Please go ahead. Thank you very much and good morning gentlemen. My first question is regarding Q4 sales. You mentioned in your introduction that the phase out of this of 2 further brands. Do you have an estimate of what the organic growth or the gross ex currency would have been without these two factors? Or how much it contributed to the Q4 growth? I have an estimate for the working day effect. One working day in Q4 means around 1.5 percentage growth. So if you adjust for the working day, the growth rate was around 3.5% in Q4, which was more or less in line with the full year or the 1st 9 months. I can't quantify the impact of the ceramics phase out because we don't really know it exactly, but we just see that the sales was lower than what has been in the beginning of the 1st 9 months of the year. Okay. Okay. Makes sense. Thank you very much. So the second question is on the Asia Pacific region and the Middle East Africa region. Sorry for it's a little bit of a basic question. But could you please remind me what are the key countries in each of these two regions that we need to keep track of? The key companies in Asia Pacific are China, India, Australia and North Southeast Asia, that's Indonesia, Singapore and also South Korea included in there. The key countries of Middle East, Africa is, of course, the Gulf with all the countries in the Gulf, in Southern Africa and then a basket of smaller countries in Northern Africa and Near East. And just to conclude, are you at this stage giving an indication of what your net debt position will be at the end of 2019 or it's too early? No, that's too early. We do not provide any guidance for that. Okay. Thank you very much. You're welcome. The next question is from Martin Flucke at Kepler Cheuvreux. Your line is now open. Please go ahead. Yes, good morning, gentlemen. Thanks for taking my questions. I have 3 and I'll go one at a time. My understanding is that in the UK in 2019, you have seen some inventory buildups ahead of Brexit, which was originally planned for end of October and now it looks or it's going to be this month. Do you expect any destocking post Brexit going forward? That will be my first question. Difficult to know exactly what the stock level is currently. But if you look at the last 2 months in the UK, and I would say it's bigger, they were very weak. So I would assume that we currently have more or less normal stock levels in the U. K. And therefore, we do not expect any specific effect in Q1. Okay. And then secondly, you've just mentioned earlier on that selling prices were up 1.5%. What is your expectation for pricing in 20 20? Because the 1.5% was rather high compared to historical standards. Are we going are we going to go back to 1% or are we going to stay at 1.5%? You're right. 1.5% is rather on the high end compared to the last couple of years, especially in an environment where the raw material prices were decreasing. And that is the reason why for this year we plan currently for the normal price increase around 1% in 2020. Okay, perfect. Thanks. And then my third question, and I'll go back in line. You were mentioning the brand phase outs, which started to which were also prevalent in Q4. And my understanding is that this was also an issue at least in the first half. Now with the reference to brand phase outs in Q4, you're referring to the 3 or the 2 extra brands, I. E, Eylea and Sphinx or Positginaire? Which ones are you referring to with having an impact in Q4? That's true. In Q4, the 2 brands which we start to phase out at the beginning of this year, as I said before, both did you know in Italy, Alia and France, these two brands had an impact in Q4. So the phase out had an impact on the sales in Q4. Okay. Thanks. And sorry, just to clarify, do we have any indication on what you expect to be the impact on your organic growth either in bathroom systems for the group on the whole? Because I seem to remember that in 2019, there was somewhat of a negative impact from the Caramag brand. As I said before, we can't quantify the impact, no. The next question is from Charlie Fermak, ABP. Your line is now open. Good morning, gentlemen. Regarding your sales growth target over the cycles of 4% to 6% and given the fact that building industry in Germany the last few years was on a very high level as well as in Switzerland? And regarding also the fact that you didn't reach this 4% to 6%, five out of 7 times in the last 7 years. Wouldn't it be more realistic to put this target down maybe a little bit to 3% to 5% or something? Question 1. And question 2, you may could repeat your building construction outlook for Germany and Switzerland. I didn't understand this correctly. Thank you. Your first question, you are right. The building industry in Germany and Switzerland is on a high level, but it's on a high level, which means it's not growing. And that is the fundamental reason why we are currently not in the range of 46%. 50% of our sales exposures is in markets where the markets are not or only slightly growing. Switzerland is on a high level, maybe in slightly declining, not in a growth phase like between 2,007 2014. The Nordics, another 10% of our sales exposure is at best stagnating, very much driven by cyclical declines in Sweden and also in Finland. And in Germany, the market is not growing as far as it did in the past, driven by the bottleneck of installation capacity. So that is the reason why we are not achieving the 46% over last year. Your second question about Germany, we are confident about the demand, but the bottleneck, as I just said, of installation capacity remains stable growth. And Switzerland, we expect a slight decline in 2020 of the building construction market. Thank you very much. You're welcome. The next question is from Christian Arnold, MainFirst. I One, two follow-up question on the phase out of the 2 brands, Alia and Potichinori. I mean, you clearly stated that Alia had a negative impact in the development of France in Q4. However, when I look at Italy, Italy was doing quite well in the 4th quarter despite the phase out of both the January. Is that just a base effect? Or do we have here some different aspects we have think about? There are 2 effects. 1 is the base effect. It's true. We had also a very weak or easy comps in Italy in Q4. And the second one is the phase out in Italy will not be only in Q1. It will be over half year, the first half of twenty twenty. Therefore, the effect in Italy was also less or lower than in France. In France, we will do it the phase out in 1 quarter and in the Q1. And in Italy, we will do it over 2 quarters in H1 2020. Okay. And in the Netherlands next year? That will be in Q2. That will be again only 1 quarter in Q2. Okay. And talking about the phase out of KLMARK, which already happened, did it have a negative impact on Q4 performance in Germany? No, we do not believe, no. We have seen the negative impact of Cerro Main in Q2. That was the phase out quarter last year. We do not have no signals or signs that in Q4 there was a negative impact. I have a change to be able to you. You said Q2? The negative impact in Kellamad was in Q2 2019? Yes. Okay. And looking at your intended price increase of 1% for 2020. Does this include price increase in Switzerland? Or rephrasing the question, do we have to think about the price decrease in Switzerland on the back of the Swiss franc strength we currently observe? No, currently not. This 1% includes also price increase in Switzerland. We do not have any plans currently to decrease prices Switzerland driven by currency. The next question is from Bernd von Thom Browne. Your line is now open. Please go ahead. Yes. Good morning, gentlemen. Two questions, if I may. Firstly, on Scandinavia. Here, we saw some improvement of your growth momentum. Do you believe this was due to easier year on year comparables or fundamental market improvement? Or is this rather due to an acceleration of your sales synergies? And then the second question on wage inflation. Do you already have any early view on the level of wage inflation in 2020? Thank you. We expect in 2020 wage inflation of around 3%, so same as what we have seen in 2019. To your first question, can you repeat which region you were talking about? Scandinavia Scandinavia, there we saw some stabilization or improvement. And is this more market driven? Or really are you benefiting from your synergies of the improved offering? You referring to Q4 or to the full year 2019? Yes, second half of last year, I would say, yes. Okay. There was no material difference. There was more or less volatility, nothing specific in the second half twenty nineteen versus first half twenty nineteen in the Nordic region, just normal volatility. Okay. Okay. Thank you, Christian. You're welcome. Next question is from Christian Krog, HSBC. Your line is now open. Please go ahead. Good morning. Thank you very much. I have three questions. The first one is, I would like to ask if you have an update from the order backlog of plumbers in Germany currently. Secondly, on the scope of efficiency measures you mentioned, when you said that you plan to mitigate the wage inflation, is it fair to assume that these various measures combined will have an impact of around CHF 10,000,000 to CHF 20,000,000? And thirdly, I would like to ask if you have an early indication where the tax rate could be in 2020? Thank you very much. First question, the installer backlog is at 11.7 weeks. That was in autumn 2019. That's a slight decrease from summer, but that's just seasonally driven. If we compare the figure with year on year, it's rather a stable outlook. It's a stable figure regarding the installed order backlog in Germany. But I can give you a second reference to this bottleneck issue in Germany. The wait and see time in Germany, so the time it takes to fill an open installer position has increased in Germany to a new record level of 200 days. It takes in average 200 days to fill the note consultant position. That's the highest among all the professions in Germany and it's much higher than a couple of years ago. As a reference in 2014, it took around 115 days, 115 days to fill an open installer position. So it's another indication that installer capacity issues not solved in Germany. Question number 2, we do not quantify our continuous improvement program. So I can't confirm you a subject of €10,000,000 to €20,000,000 And question number 3, we estimate or we expect the tax rate in 2020 of around 16%. Thank you very much. You're welcome. The next question is from Laurent Lecher, Exane Asset Management. Your line is now open. Please go ahead. Gentlemen, thank you. I was raising a question on wage increases, which has been addressed. I just wanted to check if there is new development expected for trying to gather more rights in North America? Sorry, can you I think it's a lot more in North America? Yes. I just wanted to check if you have additional plan to try to get to a bigger size in North America? Or you're still following the same path? Understood. No, there is no change of strategy in North America. We are following the existing strategy. Nothing new there. And second question regarding Frank, how would you break down the low number we got in Q4 apart from the phase out of the brand. Do you believe that they had some consequences on whatever social unrest? Or is it mainly one day left and lower housing starts? There are 3 reasons in France in the Q4. 1, the working day effect number 2, the phase out of the brand and number 3, that they consciously decided to exit some low margin business in France and that also an impact of course in Q4. Okay. Thank you very much. You're welcome. We have a follow-up question from Martin Flucier, Kepler Cheuvreux. Your line is now open again. Please go ahead. Yes, many thanks for taking my follow-up. Just one actually. Haven't talked about shower toilets yet. Could you talk a little bit about the performance of that business in Q4 and whether you still expect double digit growth in 2020? Thank you. We are very satisfied with the shareholders' wallet business. Also the performance in 2019. We have been growing double digit according to our plans also Q4 but also for the full year. We are very happy with the acceptance of the new product, which we introduced not only last year, over the last couple of years. So doing very well on the charterset side and also positive for 2020. Okay. Does that mean double digit again in 2020? Yes. Perfect. Thanks. At the moment, we have no further questions. Okay. I think there are no further questions. Thank you for participating. We wish you all a great day. Goodbye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.