Earnings Call: Q2 2021

Aug 25, 2021

Good afternoon. Welcome to EvroCash Half Year and Second Quarter Financial Results Presentation. Magda Kupil speaking. I'm the Head of Investor Relations at Krupa Eurokes. Today with me, 2 board members. As always, Jacek Gofcharek, our CFO group and Pedro Martino, Board member. Good afternoon. So we start with standard presentation of financial results. Yasser is going to present us our statement for half year. And then we're going to move to special presentation about FMCG market forecast and some inspirations about it. Petrol going to say this part. Then we're going to move to Q and A. So Gentlemen, the floor is yours. [SPEAKER JEAN FRANCOIS VAN BOXMEER:] Thank you, Magda. So welcome officially on our conference, half year conference. Let me summarize briefly [SPEAKER JEAN FRANCOIS VAN BOXMEER:] What was really highlights of the year? So, generally speaking, we just finished the half year. And as you know, [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Already, as communicated before, that was the quarter which was, generally speaking, in hands of discounters in a sense that based on all data Available. The fact is that our addressable market was still under pressure, as we have mentioned before. However, we are seeing some pickup in bigger [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Those happening in the second half of Q2, especially in June, mostly in Eurocash distribution. But still over the whole Q2, the small stores saw mainly clients of cash and credit were under negative trends. [SPEAKER PIERRE ANDRE DE CHALENDAR:] So that's on the wholesale side. And as a result, drop in the result in cash and carry was really fully compensated in other segments like [SPEAKER PIERRE ANDRE DE CHALENDAR:] Distribution, which I mentioned before, tobacco business or gastronomia. On the other hand, the big event of the year, of course, it's Again, as we're mentioning to the market, before the closure of the stores, so we decided to close 59 owned stores of the Likat Asset Centrum. [SPEAKER JEAN FRANCOIS XAVIER BOUVIGNIES:] And I will familiarize you with the performance of the partnership stores and franchised stores versus own stores. You will see, as we I think before the issue with the own stores. As a result, the annualized impact of disclosure is So the provision we provided for, it's around PLN 80,000,000. Out of this PLN 80,000,000 PLN 20,000,000, around €20,000,000 is connected with the right of fixed assets. The rest of the amount is connected with the lease agreements asset from the lease agreements, so impact of IFRS [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] 16. And altogether, if you are reading our financial statement, you will find the number in the other operating costs. And economical impact of this write off is that The stores were, at annual basis, selling around PLN 200,000,000. Annual EBITDA of the stores was around PLN 17,000,000, 1.7 So altogether, that's the annualized impact we are expecting for the future. The fact is that we are going to close all of these stores till year end. [SPEAKER MARCO TRONCHETTI PROVERA:] Maybe one more factor we have to mention due to fact that we're bearing the losses in segment of retail mostly in Own Starts of the Elite Asset Syndrome, [SPEAKER PIERRE ANDRE DE CHALENDAR:] We didn't provide it for any deferred tax asset this year. So those of you who are calculating our effective tax rate probably already spotted that it's higher. Please note that or maybe refer yourself to the cash flow statement. You will see that from the cash flow perspective, actually nothing is happening there. So that's So a kind of movement between the current taxation and deferred taxation. And then the project, of course, that project is So, Frisco, so we are continuing to enter into new cities. We can probably a little bit tell you in advance that next month we are entering another big [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] City in Poland, so the friska is going to be already in the 4 places. The growth rates are quite satisfactory. So year on year basis, We're growing more than 30 percent like for like for the 6 months in comparison with last year, it's 22 So the future, I think, it's in e commerce, like we're discussing very many times with all of you. And at the end, let me tell you that from the cash flow perspective, that was quite good quarter. So we generated around €100,000,000 operational cash flow. [SPEAKER PIERRE ANDRE DE CHALENDAR:] Also, we paid dividend on 7th July. So the fact is that also it happened during just after the quarter end and [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Even taking into all of this into consideration, so we are at very secure and safe levels from the bank covenant perspective. And also, maybe I should mention to you that this kind of the write offs like providing for the closure of the stores, It's taken out from the calculation of any bank covenants based on our agreement with the banks. [SPEAKER MARCO TRONCHETTI PROVERA:] So let's go maybe a few more words regarding the macro economy. Of course, as So if you are following Polish market, the fact is that the economy was bouncing back quite strongly from the perspective of GDP growth and Growth of retail sales, total retail sales, not food only. And the inflation was around 5%. However, I would try to show you also the inflation in different categories in our addressable markets of 0 to 500 square meters per store. As I mentioned before, the this 6 months is were in hands of this counter, so they were growing 6.5%. And Except then the rest of the market is flat or negative, with the hypermarkets constantly negative, Supermarkets are quite stable and our addressable market, as you can see on the top of the slide on the right hand side. The small stores, as I was mentioning, so Again, clients of cash and carry, mostly they were suffering during this quarter with the negative trend of minus 5.5%. What's fair to mention, it's also at the bottom of the slide. It's different agency, the research agencies called CMR. And then if you are comparing number of For average transactions in week per month, year on year basis, you can see On the slides comparing June to June that the number of transaction was quite flat year on year and also quite flat in terms of the average basket. However, that was the 1st really month with this kind of the performance, as you can see. And also, as we were Discussing when releasing financial statements for Q1, that was not the case at the beginning of the year. July is still below the previous year in the number Transaction, so also if you ask us to comment shorter performance, the fact is that July is quite similar like June was. So July was quite similar like June. The fact is that still the Small stores are suffering and on the other hand, clients of ECB were growing quite nicely over the July. So if you are double clicking this store 0 to 500 square meters, and then we have some inflation discussion here, you can see that the And foot inflation, it's quite meaningless, I would say, around 0. But what's more important, it's on the next [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Slide, as you know, the main we are presenting here the main categories we are selling tobacco, it's mostly driven by excise tax or prices of the producers. So I think it's less relevant. The alcohol is probably more interesting from your perspective. [SPEAKER SEBASTIEN DE MONTESSUS:] And also, it's more interesting from our perspective because as you know, for example, beer, it's traditionally sold through cash and cash. So as you can see, That's the flat market in beer over year, although we have quite strong summer and comparable in terms of the temperature and weather with the last year. So That's also a little bit signal and explains, I think, what was happening in cash and carryover the last quarter. The rest of the categories, except non alcoholic beverages, which are driven mostly by the sugar tax, which was introduced at the beginning of the year, are quite flat and comparable with last year. So let's go to the wholesale market. Few other items. Number of franchisees working with us on the wholesale side reached 14,700,000. So it's growing quite steadily, as you can see, both on the side of the franchisees [SPEAKER PIERRE ANDRE DE CHALENDAR:] So cooperating with Eurocash Distributes, like also with ABC franchises, cooperating directly with Cash and Care. And also the Very important factor which we are mentioning regular on our calls is connected with Eurocash. Pl, so our effort to digitalize our relationship with the clients. Currently, we have almost 26,000 users. And so and also around 36% of Total sales, it's already done through this platform. So that's the as we're discussing with the release of Q1 results, we had here, Thank you. How it's working and from his perspective, how it's helping him to sell more to the same client base. From the results perspective, as I said, it's visible on the sales evolution side that cash and carry was negative because That's the size of the drop. And as I said, it's fully compensated by service in terms of the sales. But from the perspective [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] For economical results, it's much more ECB contributing to this offset. And also, gastronomia, last year, gastronomia was Fully closed. So of course, we're having some big losses. And right now, this year, it's And base effect that we are improving results on that side. The volume is not yet there, I think around 60%, 70% volume. I came back to gastronomia before COVID, but for sure not fully. And the Retail segment, that's the result for the full year. So the partner stores were growing 3.7%. Franchise stores are negative, but please remember that we're reporting in Q1 negative trend in franchise stores minus 4.4. So in fact, it means that second quarter was around 0. And of course, we have this concentrated problem of own stores So which we decided out of this EUR 429,000,000 to close around EUR 59,000,000. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] All of these numbers are for all stores. So we are not recalculating here something which is already after closures, but we'll report it accordingly with the pace of the closures. Economically, the result in this segment is much weaker year on year and, as I said, mostly driven by the delicatessitentrum OwnStar's performance. And the project, as I said, around 2.1 3rd increase year on year in total sales. And mostly, the sales is growing the Sales was growing in Warsaw, so on our current and historically historical market, but also entry to BracoF was Quite successful. We entered end of 2020. Post 9% of the quarter of Q2 quarter, so the sales here, it's quite slowly picking up as of now. And as I said, you should expect For us to open next warehouses, the next one actually in the next month. And then the second point, which usually we ask for, is Dujiban. So Dujiban like for like double digits, 13.3. And we reached around to 100 we reached 158 stores open. So the network is opening quite steadily, I would say. [SPEAKER SEBASTIEN DE MONTESSUS:] And from that perspective, you can see that we are keeping quite similar investment year on year basis. Right now, the most of the investment is really devoted to fiscal. And in summary, the company Group grew around 2% top line. So again, just to remind all of you, this 2%, 3% growth of top line means that probably at the end, we'll increase our market [SPEAKER PIERRE ANDRE DE CHALENDAR:] Sure, not 1% because we are operating on quite stable market on the wholesale side. And at the same time, due to underperformance of Retail, the net margin is lower than last year, and result is lower than last year. From that perspective also, as we mentioned in our current reporting, we are expecting that Still, Q3 is going to be below last year from for the Ligata Setentrum, and we are expecting some kind of stable result year on year in Q4. Cash conversion, it's quite similar like in previous quarters. As I said, we delivered around €100,000,000 additional cash flow from operations. And net debt, as I said, for the calculation of net debt based on our agreements, we are not counting this $80,000,000 write off, which is treated as a one off. So it's quite stable, as you can see, and the company is in a secure position. So That's all on my side. Of course, we can come back to any issues of your interest during Q and A. So let me pass to Pedro. Thank you. So this time, we decided to share with you a little bit On how we see the world and what we think is happening today that can impact our industry and the Eurocash. [SPEAKER MARCO TRONCHETTI PROVERA:] And also to give you some insight about the way we are thinking and why we are doing certain investments I'm thinking that our business has a future. And when we identify the trends that we can see today for us That are being created and being developed all over the time. So I would like to focus in 4 areas, 2 of them which Relate to the consumer, the impact of COVID in the consumer, but also the impact of New generations coming to the marketplace and starting to build their own families. What this will impact Commerce, grocery commerce in in Poland. The the third one relates to digital transformation that we can See and the kind of company that needs to be adapted to this transformation, Which, how this company should be created and the different structure it needs to have from a traditional one. And the first point, it's the technology and the effect of technology that we can see. Some of it, we think that it's Hype, it's really not something that is important. Some of this, it has the potential to be quite interesting for the development of grocery business. So if I Start with COVID. There is no doubt that the COVID made a strong change in The way people shop and people react to the environment and behave. We are still not sure what of these things are stable and are here to stay. Lots of these things, they are, like, more imposed by the restrictions, but when restrictions go off, go Disappear, they will come back to previous habits. What we can see is that for sure, we came back to more importance of price. Uncertainty that People have about their jobs, about their qualifications, about the the the all the situations, psychological also that Of being uncertain about the future and its own health, might people be more risk averse. Being risk averse means that price is more important. So we can see this clearly, and that is one of the reasons why Discounts have grown under these last months. So we have some doubts. Is this going to continue or people on the other way I will rebound into more joyful way of finally getting over the restrictions and starting to spend again. So this is something that we'll be monitoring in the near future. There is no doubt that more price Stronger price policies are important in this moment. The other thing that we can see is that Stores have to evolve into providing customers with a one stop shop. This is important because people want to spend less time shopping, and they want to go to lesser places than they were going before. They see much more today the shopping as the applies to go quickly, to get everything that they need, and to go home. So we've been we think that Delica Asset Center, for instance, is a format that's very well prepared to cater for this increased needs. Obviously, smaller stores, really small stores that were being in cash and carry, They have more problem with this. So that is why also we see this effect on the last months. But on the other side, We expect some rebound on this starting now from September since Children will come back to school. And in fact, we'll see a coming back of more impulse buying. We also Expect that people start more to travel between work and home. We can see that in Warsaw today with the traffic situation. So it is possible that we come back to some spontaneity in the in the in the purchases, which as we know, it's It's quite important for the kind of stores that that we manage. Another trend that it was A little bit changed by COVID. It's about sustainability and about locality. We believe that this change is going to help Strongly the stores that are local because not only local Started to be not only local products, but also buying locally and the leaving and shopping around The place where people live. So, and taking care also more and more importance about taking care about The place where I live. So not only the big themes of sustainability like Global warming, other poverty, but also what is happening in my neighborhood They are important for people. And this is a very big plus for local entrepreneurship. Another trend that we see or the fact that is happening is that new generations are entering the marketplace. So people that are digital natives, people that imagine the world in a different way. But also interesting, what we see is that elder consumers are also changing, and they are more digital. They They are more digital than they were before. COVID here helped a lot because people were had the need To come online, to do more things online because they miss the social interaction that they had before. So we can see that also Suburbanization, which shows a big effect on COVID that people were trying to leave from Big cities from small apartments going to the suburbs where they could have some more space to play to be outside when there is restrictions. This is a factor that can help also smaller stores that are located in these new regions. Obviously, There are here a there is here a challenge, which is these are new neighborhoods. We have to open stores there. So expansion is an important point To take advantage of this trend. But what is really important is that convenience is a value, It's a value for everyone, for seniors, for younger people, for people that are working, For kids that are at school, so convenience is a trend that is easier to stay. We expect things to be delivered fast. We expect to make our purchase quick. We don't want to spend too much time looking. We think that it's possible for everything to be Really fast, simple. And this is very important for the formats that we have, which generally, they are more elastic than bigger ones, And they can adapt to the changing needs of the consumer and also to the location where the stores are. Because the fact is that a suburb of Warsaw, it's completely different from a midsized town in Podlasi, for instance. And these changes, which we see, We can also identify another trend, quite interesting in fact, that We'll counteract the need for a one stop purchase. It's that We have much more results of 1 person, and these are expected to grow over the next years, Meaning that people probably will change from buying ingredients into buying meals, into buying solutions. And they want these solutions to be near their own. We can see that the size of apartments is decreasing in Poland, Which is something that no one predicted a few years ago, which is quite interesting. And the reason why this is happening is that Kitchens are being reduced, replaced by kitchenettes. So people are not anymore cooking at home or in the new neighborhoods website. Which is quite interesting for convenience stores like Delicatas Centro, which can present Food solutions, which can present meal solutions further and are located near people homes, so that they can bring this to to their houses quite conveniently. And we also see that, Social responsibility is here to stay, but it's interesting how it is developing. In fact, many, many people, especially young people, what they Expect is to outsource their social responsibility, meaning that they are not so much willing to do themselves certain Certain acts, but they expect companies to do that for them. And they want with their pocket, with their money To this to make this the kind of decisions, I will make processes with companies that are more socially responsible. So in fact, we have to do this job for them. And on this aspect, entrepreneurship, local entrepreneurship is very interesting Because entrepreneurship means that not only the footprint, the CO2 footprint is less, because Local products, sourced locally, sold locally means that we have less transport, means that we have less packaging, and that is one point. But There is another big point, which is we create jobs in the local place, we create profit in the local place, we buy from local Producers and there is a much more fair and equitable distribution of wealth If we divide by several entrepreneurs instead of just 1 or 2 shareholders of big companies. And this, I think it's an important message that relates with younger people that want to live in a more And federal world, a world that is more balanced. And they So once their locality, the place of their leading to develop more. So we think that these are things that we can explore in the future And we can reinforce entrepreneurship as a social value and as a big focus of the social responsibility of small stars. On the other end, the third point that I would like to make is that a company That will survive and will and that will have success in this situation that we have today, which is Very uncertain. It's changing all the time. It's full of ups and downs. Technology is disrupting in many situations from Unexpected places, where you can get competitors every day coming from places where you were not Expecting is a company that has to be hyper resilient. And this is against big companies. This is more A fact that is saying that small companies, entrepreneurial companies that are Prepared to be more elastic, prepared to absorb shocks to and take profit of them and adapt, They can they can be much more adapted to this situation. One example that we have clearly within Rokesh, it's The way our best franchisees are reacting to this situation, and we have very interesting, like for like, growth Growth is in the companies that are more willing to react, adapt, and to change the to the existing situation that we have. So we believe that, in fact, today, our model with much more decentralized decision, with Much more smaller stores, even smaller warehouses, but located near people houses That is more capable of changing the assortment, the pricing, the promotions and everything that we do Works better than 1 big one model that is more focused on efficiency, on repetitive tasks And in Korea, in the expecting that the future will look like the past. So there is a need here to have some slack, to have some capacity to be able to be more elastic, and that is Very important. And finally, technology, which we can see that there are many things happening. One is for sure that People with the future of retail, it's personalization, even hyper personalization. I think that our The tower customers, they understood that many years ago, and they established Personal relationships with shoppers. So now what we are doing, for instance, like in with Delicarta It's giving them tools for them to continue with this relationship. So while in other retailers, this might come Now, and they don't have the enough experience to personalize relationships and they do not have Business models or operating models, Galer, that enable for this personalization. We have completely prepared franchisees and small store owners that are personalization. They have made it for all their lives. So what we are going to what we give them now, it's new tools how to do this, it's loyalty programs, it's Mobile apps, it's different ways of knowing the customer, but they know how to implement these things. So this is very interesting. Also, another interesting aspect is that we know that AI will become an important part of the business. We know that digital analytics and digital processes have the potential to reduce Work, so the and increased productivity. And this is great news For small stores, because if we look at the what is the share of labor costs that we have Against the ones of, for instance, discounters, it's obvious that a decrease in Labor, increase in productivity made by digital technologies will have much bigger impact In this format, small format than in discounts, because the weight of the costs, it's much bigger here. So we see this as promising, and we see this as a way to go forward to make Our customers even more competitive than what they are today. Everyone is talking about B2B marketplaces and how they are growing and are predicted to grow. Well, we know that Because for many years we have developed Rokesh Payl and we have a big business digital already. And it is a fact that the B2B market digital in Poland is much bigger than the B2C, Which as we know, it's the leader is Frisco, but the fact is that it's not more than 1% of the retail grocery styles. But while in B2B, it's much more, much more than that. But we still see Lot of potential in our B2B marketplace, in our B2B digital solutions with Ipera and other solutions in the development of Rokesh Payel. We think that this is a trend also because our customers, They they are becoming much more digital than they were before, and we see that we can derive value from the data, From analytics and from providing them with great service. And We think that we have that experience all over time since we developed a Rocash payout, and so We can learn faster than others. In terms of logistics, we think that there are very interesting trends, Which go into the way of micro fulfillment, which go in the way of having smaller warehouses that are near consumers, Which in fact is all it's what we always believed. Our places, they are not so big as our We believe that we should be near where people are. So we are much more prepared for this trend, Which is delivering fast to consumers, delivering fast to stores, be quick to respond. And this is something that we can see all over the world. Fortunately, technology is helping because the price of technology for this Automated warehouses or other automated solutions, not the full warehouse, at least part of the solutions It's going down. So you see this as a big opportunity also for Frisco, but not only also for our wholesale business. So these are opportunities that we can see clearly to Vineyard customer to reduce costs, Especially the personal costs. There are others technologies which we think that they are more like I we really don't think it's the right moment yet for autonomous stores, for instance. We still believe that this is a market niche, maybe for big cities where there is traffic During 24 hours, but generally, that is not the case in Poland, in most of the cities where people live. But we'll be watching all these Trends will very carefully and will be monitoring if they develop into something that can be more sustainable as a business model And then we will take our proper decisions. For sure, we will not go just for the technology for technology sake, but we believe that Some of these, they have the potential to disrupt and to really help our customers in their businesses. And in this case, we are there to help. And one thing that is now very clear in all world is that There is a big opportunity in co creation. There was industrial logic before, It's meant that the company had to produce its products by itself. Today, it's not like that. Today, the value is in the partnerships. The ecosystems that we can create, the the know how, the innovation that you can from others, even the Platforms and the assets that from others that you can put to to your service. And we really believe that at Herocache, We are very prepared for this role because partnerships is what we do for 25 years. We understand partner Chips, we understand franchising, we understand what is to cooperate between suppliers, franchisees, other entities, how to reach the consumer. So The world as a partnership, it's something that is not strange for us. And we really believe that we can derive value From the innovation that we can see today in several startups, in new ideas that are being formed, That this can help us and we as our experience in M and A, in partnerships can really help us in this new world. So we think we are well positioned for this. So this is what I would like to share with you, A little bit of how we see the world, how we start to think, what drives our investments and Why we think that the market of small stores, of convenience, of proximity, But also the market for digital, for e commerce as a future and why we think we are And very well positioned to take profit of these trends. Thank you. Thank you very much, Pedro. Now we can go to the Q and A session. Please enter your question on the in the place. You can see it on your screen, and then I will publish it. The first questions comes from Adrian, for Nick from Benem. Unfortunately, he had some technical issues and he sent me via SMS. So I will read right now. So yes, a question for you. Was the 2Q2021, the worst quarter for Eurocash? And what's about the 3rd quarter expectations? So first of all, I think we have one isolated problem called Own Stars [SPEAKER PIERRE YVES LESAICHERRE:] In reality and also performance slightly of segment of retail. But generally speaking, I don't think that it was very bad [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] On the wholesale side, as you are covering us for quite a while, you know that sometimes one segment is going better, another one is going worse. This [SPEAKER KARL HENRIK SUNDSTROM:] It's timely now. Cash and credit is weaker, but on the other hand, we have strong rebound of distribution business. [SPEAKER MARTIN PEREZ DE SOLAY:] So I would not count it as a structural weakness or structural change rather [SPEAKER KARL HENRIK SUNDSTROM:] Then something which we are trying to show you here, the based on the market trends, temporary phenomenon, which also Pedro was mentioning here. The fact is also but the fact is that on the retail side, as I said during my speech, the fact is that still we are expecting the Q3 is going to be below last year. [SPEAKER PIERRE ANDRE DE CHALENDAR:] And we want really to stabilize the picture here being stable year on year in Q4. So I don't think that short term, you should expect big changes here. On the wholesale side, as you can see, we are keep growing Something like around 3% to 5% at the EBITDA level, which I don't think is going to change in coming quarters. Okay. Next question about inflation impact on our basket. Could you comment, Jacek? Yes. So the fact is that you have some luck in inflation in our basket. And also, please Remember that also we are buying in different parts prices. So usually, when we are comparing, and I think you do the same in the analyst [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Well, the inflation between us and, for example, moderate rates like discounters [SPEAKER PIERRE ANDRE DE CHALENDAR:] Discounters segment, the fact is that our inflation is usually lower. So there is some natural gap [SPEAKER PIERRE ANDRE DE CHALENDAR:] Yes. And I don't think that it's going to 1 to 1 to our growth. As you remember, on our slides, you have this presentation on our website. The inflation reported by GOS was around 4%, 5%, when in reality in the segment of 0 to 500 square meters [SPEAKER PIERRE ANDRE DE CHALENDAR:] So it was much lower, around 1%, which I was presenting during the presentation. So there is a gap and there's No such a strong direct correlation. Maybe, Pedro, you can add a point here as well. Yes. We Yes. The situation in the beginning of the year, which was exceptional, which was the increase of taxes for the sugar tax and also The tobacco one? And small volume vodka. Yeah, and the small volume vodka, but for now, that was one off. So now it's going to stabilize and we don't see the inflectionary pressures in the categories that are the most Significant for our for our sales, which are like, Yate Seq told, they are quite different from [SPEAKER MARCO TRONCHETTI PROVERA:] The ones of modern trade, and that is why this difference in mix provokes this difference in inflation. Thank you. Next question from 2 analysts, in fact, when you release the results of strategic options review? [SPEAKER MARCO TRONCHETTI PROVERA:] Yes. As we said, we are running this project. And of course, we're releasing the information to the market based on the development. So I don't have any new developments [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Except the fact that the process is running. So I can answer at your time. Okay. Thank you. And question from Thomas. Could you explain second consecutive quarter with negative like for like in cash and cash. As I was showing during the presentation, the Impact, the stores, the smaller stores were decreasing. I can't remember right now exactly the number for the Q1, But it was Q1, it was around 7%. Right now, it's a little bit slowed down to around 5%, if I'm recalling 4%, 5%, if I'm recalling correctly. So So the fact is that unfortunately, you know, we cannot or you can go against the market trend only up to a certain point of Time, especially in the small clients who are missing sales of imports, which also Pedro was mentioning that the fact is that during Pre holiday, I would say, period we are missing and even during the holiday period, if you are not running the shop, which is seaside or In mountains, probably in the smaller, bigger or bigger cities, simply part of your regular consumers are actually out of the city. So the fact is that you don't have here the traffic yet. And I think it's really proven in all of this data which we are having right now. And even as I said, we don't see the big change in July. So it was The same trend still in the small stores. Okay. Next question about Contigo. What are your plans regarding Contigo? The chain is far below breakeven point of 50 stores and its development is not progressing. Yes. So as I think we discussed in one of the quarters, category issue, the fact is that At the time when during the first COVID phase, I mean wave, so probably it was quite long ago. So let me just Come back to the starting point. The fact was that when the shopping malls were closed, our strategy before the COVID was reopening flagship store In the big shopping malls and prominent shopping malls that after trying to go through online. So what we announced during The time and what we reviewed as a strategy for Contigo last year. So and we are still keeping and trying to do it is to shift sales to online channel from offline channel. And in fact, Contigo is decreasing offline and increasing in the online, so it's happening. [SPEAKER PIERRE ANDRE DE CHALENDAR:] But from the perspective of big global numbers, this change is too slow. So generally speaking, the like for like seen online are not yet satisfactory, I would say. And So, and on the other hand, also what we did, we closed unprofitable stores in the last 6 months. So it's quite similar Stage like in the Likat Asset Central. So what I would expect is really the shift. And maybe we can commit here with Magda that we'll [SPEAKER MARIA ALVAREZ PALLETE:] Try to split for you for the next quarter how it goes, both online and offline. Yes, exactly. Next question, I think we already answered. How do you see like for like in cash and carry in coming quarters? Yes, Right. I can repeat twice. So and the next question, how did EBITDA look like in cash and cash alone in the second quarter 2021 and half year 2021. We do not publish such No, no. We are not publishing forecast regarding 20 It's below last year because, as I said, it's compensated by other clients in different subsegments of wholesale. I even can't remember the number. The fact is that cash and cash flow is still quite profitable, more than €100,000,000 So [SPEAKER MARCO TRONCHETTI PROVERA:] It's lower, but I don't think it's very tragic situation. Okay. We've got no further questions right now. Guys, we are waiting for your questions on the chat. Okay. If we don't have any other questions, of course, you know the e mail Address and telephone number for Magda, so we can take it offline or try to meet on the other occasions. Thank you for your time you spent with us. [SPEAKER PIERRE ANDRE DE CHALENDAR:] So we're trying to have a little bit different discussion right now, not only about numbers, but as [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Every quarter to bring something new. So in past, we were discussing eurocash. Pl or we were discussing Frisco. I think also the trend, especially this post COVID The situation on the markets regarding what's going to happen with consumer is probably of interest of all of us, and that's probably the topic [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We'll be able to follow in the coming quarters. So if we don't have any other questions We have one. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] But the answer is quite short. Do you see possibility of further closures of retail stores. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] No. As of now, we closed all stores which are below the certain [SPEAKER PIERRE ANDRE DE CHALENDAR:] Internal KPIs, and as we announced with Q1 results, we're doing this review for a while From December last year. So we don't have any other plans currently to do whatever with the next stores. Okay, so no further questions. Thank you very much. Thank you very much, Jose, from my side. All the best. Thank you, gentlemen. If you have any further questions, please contact me via mail or via mobile phone. Thank you very much. Bye bye. Bye.