El En SpA

MIL:ELN

Earnings Call Transcript 2021-Q1

[Bianca Fersini Mastelloni]

Good afternoon, or good morning to everyone, and welcome to El.En's. First Q Financial Results of 2021 Conference Call. Today's call will be recorded, and so will be an opportunity for questions at the end of the conference call.

With me on the call, Andrea Cangioli, El.En's. Managing Director; and Enrico Romagnoli, El.En's. Chief Financial Officer and Investor Relator.

Before we begin, please note that there is a remarks management makes on the conference call about future expectations, plans and prospects and forward-looking statements. Certain statements in this call, including those addressing the company's belief, plans, objectives, estimates or expectations of a possible future results or events are forward-looking statements. Forward-looking statements involve known or unknown risks, including general, economic and business conditions and the condition in the industry we operate may be affected, should our assumptions turn out to be inaccurate. Consequently, no forward-looking statements can be guaranteed, and actual future results, performance or achievements may vary materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation about the contents nor to update the forward-looking statements to reflect events or circumstances that may arise after the date hereof.

But at this time, I want to turn the call to Andrea Cangioli. Please go on, Andrea.

[Andrea Cangioli, executive]

Thank you, Bianca. And thank you, everybody, for joining this call we're holding after the release of the first quarter financial report in 2021.

As usual, I'll provide you with an update on the most relevant themes of the quarter, and then Enrico will guide you through the details of our financial performance.

Before beginning with my comments, I'd like to mention 2 very significant events that took place in the very last days. A very joyful one. El.En. just overcame it's 40 years of life milestone. It's quite an age for a high-tech company. We are a technology-based fast-growing company with a deep heritage. Our age 40 means that our knowledge, technology and organization are based on very, very solid grounds.

Sad side of this celebration and also reason why there was no celebration is that one of the founders of El.En. Professor Leonardo Masotti passed away just a few days before the anniversary. I know that many of you met Leonardo in person and were as all of us fascinated by his vast knowledge and his ability to transfer it to his students as well as within our organization. We'll miss him a lot, and we'll miss his insights. And we'll have of him a thankful memory.

In correspondence with these 2 events, a celebration of the past and the loss of one of the strongest contributor to this past, I'd like to further comment that while our organization has deep roots in values, technologies, know-how that make it what it is today, at the same time, it is very flexible, very proactive, adapting itself and renovating its structures and function to the needs of the current and future times.

And I believe this is also a good key to reading the current performance of the group, in which, needless to say, we are extremely of which -- needless to say, we are extremely satisfied. The pandemic hit our markets and our facilities with an unprecedented blow early in 2020 in China, later on in Italy and in the rest of the world. Our operation displayed an outstanding reaction to the adverse conditions, an excellent response in terms of commitment of all our functions and all our employees in putting the company back on the growth and profitability path where it was smoothly running before the pandemic blow.

And the group was on such an outstanding path due to a mid- and long-term planning that from 2017 on, redesigned the approach to several activities setting up all the needed inputs, the requirements in terms of expansion of the R&D capabilities, operational and logistic structures, which are allowing our current brilliant results.

As you know, we are still far from having a normal day-to-day and business life. COVID limitation are still quite strict in Italy and elsewhere though the pressures is being gradually lifted, and hopefully, we're on the right track to get out of it. Thanks to vaccines that were not in the picture at the beginning of last summer when we had the same hopes if not expectation that we have today, we now really hope to be closer to end.

And let me again express my satisfaction and appreciation for the way our organization reacted to all the inconveniences led by the pandemic. EUR 116 million in revenues for the first quarter is a record figure and EBIT so close to EUR 13 million, more than 11% on revenue is a record achievement for our first quarter as well.

I'd like to remind that for all our markets, the first quarter is seasonally weak. Since it follows the end of the year when capital equipment investors typically anticipate purchases due to tax reasons and also due to the holidays at the beginning of January in Italy and the New Year break in China.

Comparison with the first quarter of 2020 is highlighting phenomenal revenue increases, but we are comparing with a quarter when our production sites and activities were down in China for more than 2 months. Industrial manufacturing was slowed down in Italy by traveling limitation and eventually halted in March and the same happened to medical and aesthetic center activity. This is also the reason why gross margin on revenues appears to decrease so sharply in 2021, but it's predominantly a mix effect. Since Q1 2020, sales in China in metal cutting typically high-volume and low-margin were extremely low, therefore, allowing the higher margins of the other segments to dominate in the total margin.

In terms of sequential comparison to Q4 2020 performance, revenue is lower in Q1 2021 due to the reason I just mentioned of seasonality. Moreover, in China, Q4 was somehow exceptional since it was also gathering pent-up demand coming from the first months of the year, marking the fast recovery of the Chinese economy.

Profitability increased due, first of all, to increase margins, both in the medical and in the industrial sector and also due to the onetime expenses related to the employee cost, which totaled up more than EUR 2 million in Q4 2020. The most relevant of which was the stock-based compensation allowed to certain employees in China.

The very high sales volumes was joined in Q1 2021 by a very high level of orders bookings. As we mentioned in the press release, our backlog is at its highest level ever, substantially over the board in terms of geography and market segments. The very good news here is that all this bookings well is coming in without the extensive support of international travel, congresses and fair, which, especially in the medical business, are very significant lines within sales and marketing expenses.

Japan and China were the only countries where we could attend trade fairs in person in the last month, of course, on a local basis and without any international travel. We, therefore, have a very strong momentum going into the second quarter, and we also expect leverage effect to play a significant role in the next quarter.

Now a few words on the main trends that we experienced in this quarter. Demand in laser metal cutting systems remained strong in China and in Italy and in their export markets. The underlying drivers of such demand growth are the decrease in the cost of the laser sources and the concurrent increase in maximum available laser power. This is increasing the technical abilities of the systems on one side, allowing them to perform application that laser simply could not perform well enough before. And at the same time, on the other side, it decreases the price of the laser systems, allowing more and more customers to afford a high-power laser system for their own facility.

The market is, therefore, growing, as you can see from our results and growing very fast. But our results are paired by other competitors benefiting from this trend, making the segment extremely fast growing but also quite competitive.

[Bianca Fersini Mastelloni]

Andrea, sorry. But someone is typing on the on keyboard.

[Andrea Cangioli, executive]

It is the keyboard. There is a person typing on the keyboard, please turn off.

[Bianca Fersini Mastelloni]

Yes, because he is not [Foreign Language]

[Andrea Cangioli, executive]

I see.

[Bianca Fersini Mastelloni]

Sorry.

[Andrea Cangioli, executive]

Okay. Let's see if it goes away. So I would say we -- I talked about industrial laser cutting and now about aesthetic. Demand for aesthetic applications was also very strong led by our innovation and product releases in hair removal and body contouring applications. The aesthetic segment quickly gained traction in the post-pandemic transition, gathering demand also as a reaction to the limitation as willingness to invest on physical wellness and appearance.

Demand for surgical application is expected to recover throughout the year as it is still suffering from the focusing of hospital and national hospital system structures on the COVID pandemic. The segment was also affected in the quarter by an issue in the optical fiber production process that affected sales in Q1 as reflected in the decrease in the period of medical service sales, which include consumables like optical fibers. This issue will be overcome in the second quarter when regular flow of optical fiber sales for urology is expected.

Finally, the first quarter was an excellent quarter for physiotherapy back to revenue and profitability levels typical of ASA, our company incharge for this segment before the pandemic.

We need to highlight the increasing difficulties within -- with our supply chain. Shortage of metals, optoelectronics and electronic components now to wood and plastic is making very difficult to timely feed our production lines with the appropriate components. This is causing some efficiency problem in the production processes, increase of purchasing costs on several components, and the need to increase our inventory of parts in order to prevent a further lengthening of lead times.

Our level of attention on accurate programming of the purchasing process is very high. But in the period, we cannot count as much as we could in the past on a reactive and flexible supply chain.

To wrap up all these comments, we can summarize saying that the pace we are able to keep today is in line with what we had expected prior to the COVID impact, what we had expected for today prior to the COVID impact. Having reached that sales volumes level contingently without the need of certain extensive sales and marketing expense, profitability is even higher than we were expecting, let's say, 2 years ago.

Now I turn to Enrico for the comment on the financials.

[Enrico Romagnoli, executive]

Thank you. Thank you, Andrea. In the first quarter 2021 and continuity with the end of 2020, the growth progression of the group continued after the (due to the effect of COVID) with a level of turnover and profitability back in line with the forecast outlined before the pandemic.

In Q1, there was an increase of 59.5%, and we reached a turnover of EUR 116 million. The gross margin stood at EUR 43.6 million, an increase of 38.5% compared to the first quarter of last year. Thanks to the significant increase in turnover. The comparison with the first quarter of last year, shows a market decline in sales margin, 43.2% last year to 37.5% this quarter turned out to be full because the sales mix in 2020 as already said by Andrea was markedly different with almost 0 sales in China in the industrial sector characterized with high volumes with margin lower than the group average.

Instead, the 37.5% gross margin impact on sales is an excellent result, if it was compared to the Q4 2020, when the profitability was up 33.8% and it is due to the improvement in margin in both sectors and it contributes significantly to the operating profitability in the quarter.

The operating cost amounted to EUR 8.8 million and are substantially unchanged compared to March 2020. The impact on turnover on the other end, decreased from 4% on March 2020 to 7.6% on March 2021. Decisive in this cost aggregate are the savings in commercial expenses almost minus 3% compared to the Q1 of last year, such as international travel and trade fair and congress, in particular, in the medical sector. The only trade fairs we were able to attend in this period were held in China for the metal laser cutting sector and in Japan for the beauty treatment equipment sector.

Staff costs equal to EUR 19.2 million are up compared to the EUR 15.6 million of March 2020, but with a lower impact on turnover, decreasing from 21.5% to 16.6% of March 2021. EBITDA was EUR 15.6 million, more than double compared to the EUR 7 million of last year and with an impact on sales of 13% compared to the 9.7%. Amortization and other accrual show a slight increase, but their incidence on turnover drops from 3.5% to 2.3%.

And in Q1 2021, the total amount of fixed cost has operating cost, staff cost and depreciation showed an increase of almost 14%, and the impact on sales reduced from 37% to 26%. Thanks to the increase in gross margin and the reduction of impact of fixed cost, the operating result marks a positive balance near to EUR 13 million, with a strong increase compared to the EUR 4.5 million for the third quarter of 2020, and with an incidence of turnover increasing to 11.1% from 6.2% in the same period of last year. This is a record result for a first quarter, usually characterized by sales volume below the annual average and therefore not able to fully benefit from the operating leverage.

Pretax result was EUR 14 million with a positive effect of ForEx, mainly due to the U.S. dollar, which appreciated against the euro in the period. Net financial position had an increase of approximately EUR 7 million in the period from EUR 69.2 million on December 2020 to EUR 75.8 million on March 2021. Operating cash flow covered the physiological increase in working capital associated with the rolling phase and with those deriving from fixed investment. The capital increase collected by the company due to the exercise of stock option assigned employees amounting to EUR 3.2 million in the 3 months and contributed to the improvement of the financial position. Part of the liquidity will be used for the payment of the dividend of EUR 0.4 per share the next May 26.

Revenue -- looking to the turnover breakdown by business, the overall growth close to the 60% is much stronger in the industrial sector that was almost stopped in the first quarter of 2020. In the medical sector, which, in 2021, accounted approximately 57% of the group turnover, the lockdowns restriction have had more deleterious effect on the surgical segment than on the others, due to the difficulty to accessing the hospitals and the focus of hospital activities on COVID treatment. We hope to be able to recover in the coming quarters.

The decrease in turnover in medical service derives from a temporary difficulty recorded in the production of solid optical fiber, as already said by Andrea. The jump in the sales of aesthetic segment has a very significant value, which is one -- which is only partially diluted in comparison with the first quarter of 2020 hit by the pandemic, and it is based on the solid growth, in particular, in hair removal and body contouring application. Thanks to our offer of innovative system that are able to meet the needs of demand that after the close of the first week of the pandemic has gradually returned to normal.

In the industrial sector, the comparison with the first quarter of 2021 is not a significant benchmark, and particularly for the cutting segment where about 2/3 of the activities are carried out in China. However, this should noted -- this should not detract from the exceptional performance highlighted by the cutting sector, which is working at a very high rates. These are the production and sales volume for which the production capacity has been increased with important investment now used in an increasing manner, also allowing the beneficial effect of the operating leverage of the income statement. The trend was also very positive for the other main segments such as marking and laser sources in rapid recovery from the last year.

In the end, look at the distribution of revenue by geographical areas, we can see the return of the weight of sales in Italy, around 30% of the total sales. Medical sector, we had a strong increase in all the areas of activities with a jump of Italy of 70%, that was partially hit by COVID lockdown in Q1 2020, when the sales on international markets did not decline significantly in the first quarter of 2020.

In industrial sector, the most market increase in turnover were recorded in China, which practically didn't work in the first quarter of 2020 in China. In the Q1, we achieved the EUR 28 million of turnover, while last year only EUR 7 million was realized. And also, we had a good performance in Italy, thanks to [indiscernible] center that was hit in the second half of March of Q1 of 2020.

Andrea, please go ahead.

[Andrea Cangioli, executive]

Thanks. To close our presentation with the guidance, as you know, we have always been very cautious in guiding into the expected financial results. As I mentioned before, in this year, we are contingently experiencing an extraordinary pre level of orders bookings, a good level of good gross margin on sales and a material savings in sales and marketing expenses. We are living in a very unstable environment. We adapted very well to this phase of the pandemic and it's hard -- but it's hard to tell now how the post-pandemic politics and policies will impact on us and on our markets.

For the time being, assuming we can roughly maintain the pace we recently reached, which is possible, the EUR 500 million consolidated revenues is an actually achievable target. At the same time and under the same assumptions, maintaining an EBIT margin around 10% is something we could definitely achieve in 2021.

We are done with the introductory presentation. I believe, we are now ready for your questions.

[Andrea Randone, analyst]

Hello, do you hear me?

[Andrea Cangioli, executive]

Yes.

[Andrea Randone, analyst]

I'm Andrea Randone. Sorry, because I'm with the phone because I wasn't able to connect with the Zoom, I'm sorry. Congratulation for the results, first of all. Really, really strong.

I have a few questions, if I may. The first one is if you can provide a sort of comment on current trading for the second quarter? You mentioned some factors that if you can summarize. The second question is about if you can again repeat the underlying assumptions in your guidance for the second half and especially in terms of pricing volumes, if you can provide us an idea of what you are assuming? And then if you can provide a comment on the recently announced transaction takeover in the U.S. on the Soliton that seems to be in an area of business similar to yours, if you can comment on this transaction. And finally, last question, if you can update us on possible M&A activity this year, also reading across with this transaction?

[Andrea Cangioli, executive]

Okay. I hope I remember everything. 2Q expectation, as I was saying, Q1 is typically one of the weakest quarter of the year. We are getting into Q2 with a good volume of orders. Therefore, we expect Q2 revenues to beat Q1 revenues. And this is, of course, assuming that one of the items I mentioned during the call will not affect us, I mean, the production problems due to supply chain issues.

The assumptions I made when outlining EUR 500 million revenues guidance and around more of 10% EBIT margin guidance are that the environment doesn't quickly change in its determinants that are currently allowing us to do very well in terms of sales on our markets and at the same time inhibit us from traveling and therefore, allow us to save a lot in sales and marketing expense. Those assumptions are, let's say, critical in terms of marginality because as Enrico mentioned during his document, when his exposed vision, we are saving a few percentage points on revenue currently in sales and marketing expenses that we are not bearing as compared of what was our sales and marketing life prior to the pandemic. And of course, another assumption of this guidance is that increased volumes in second quarter should improve also our leverage effect.

Last question was M&A. There's no update on M&A in this moment, we are looking around. But as I always said and I think that the results are every time confirming it, our most important M&A is investing in ourselves. We are growing at a pace, which is double digits, but more on the 20s than on the 10s due to the investment that we are making on ourselves, on the articulated structure that we have, and this is today our main goal. Continue to run the structure, which is itself quite complex and to bring it to the best efficiency in terms of sales growth and also profit growth.

For what concerned the Soliton deal, it has been extremely surprising. Actually, Soliton has always been extremely surprising for us even prior to getting bought by Allergan because they -- Allergan paid 25% more than the market price, so for USD 150 million compared to the roughly USD 400 million change that was the market price the day before the agreement was announced. But we are talking of a nonrevenue company and sincerely, we are very curious to see and to know how well this shock wave technology will be able to reshape the body shaping the market, excuse me, for the word, the repetition. They claim they have a breakthrough -- they had a breakthrough technology for body shaping. They claim this technology will reshape the market.

We know the technology, so we don't know how -- and we have been selling shock wave system for cellulite and body contouring over the time. It seems like they found a very significant technological combination or maybe simply, Allergan will be able to find a very effective market combination in order to sell this technology. I don't have any other comment. We'll have to see, and we'll let you know if this technology will actually become affect on our markets, a threat for our market positions that we expect to grow in the body contouring business.

[Bianca Fersini Mastelloni]

Andrea, we have a question from [ Marco Riva ].

[Unknown Analyst]

I've written on the chart, if it's okay. It was regarding raw material, which is the impact you can expect and in terms of supplies -- term of supplies, in terms of time. Second one, how this element could influence on your expectation, you show a few minutes ago?

[Andrea Cangioli, executive]

The issue is the following. Each laser is made of hundreds of components. There are optical components, metal components, machine parts, electrical components, LCD display. And there are several of these components, which currently is experiencing, let's say, a total shortage. For instance, LCD displays, LCD display is used, LCD display, you need one for every machine we manufacture. Now in order to get them, I believe we are getting into deliveries over 18 or 20 weeks where we used to have 8 weeks.

Plastic parts, we are having problems in having the raw material that allows our plastic part printers to purchase appropriate volumes of plastics for manufacturing our parts, and we are not a huge manufacturer. We are, at the very end, a small manufacturer. Metal parts, the cost is increasing.

There is not one single component, which is giving us trouble. We're having troubles in several segments. Maybe the most significant trouble we have today is in laser lamps. Lamps, we use at least 1 lamp for every solid state laser system. Laser lamps is another item, which is very difficult to source in this moment. The guidance is factoring in that we will continue not to be perfect in our production system, I mean, that we will not be 100% efficient as we would. So we will not be 100% productive as we would. But it's not factoring in any disaster scenario, like you have seen on certain car manufacturers that had to stop production for 1 week or 2 weeks due to the missing of certain critical components.

As of today, as I mentioned, we work closely trying to fill the gaps, but it has been a very difficult period. Moreover, finally, there have been 2 events which are negatively affecting supplies. One is the Suez channel block, which slowed down several deliveries coming from Far East and -- I mean, delayed several deliveries and the other one is the Brexit, which indirectly has put more stress on the Italian custom offices, which are very slow in adapting to this new volume of work, which is now falling on them. And we had several problems nothing, again, huge, but a few weeks of delay of goods that were stuck in the customs rather than coming directly from the U.K. as they were coming before.

[Bianca Fersini Mastelloni]

Kindly asking you to introduce yourself before asking your question. Any other question?

[Unknown Analyst]

Yes, please. [ Rita Lucchesi ], ABS Consulting. Could you please give us some comment on the next step on dermatology product -- for the dermatologic treatment, sorry, in U.S.A. and in Europe and some update on the commercialization of Monna Lisa Touch, that's the first question. The other question is just a curiosity. If there is any impact on the temporary closing of the states in Italy in April? Thank you very much.

[Andrea Cangioli, executive]

Let's start going over acne. Acne, we finally sold the first units. They should be -- they will be sold for revenue in the second quarter. Again, here, we know that the sales activity currently is not expected to be booming and to be really starting until the United States doesn't get the FDA clearance. Because we will be able to sell a few units in Europe, we know, but it will be a few units and the big splash for this unit is expected only after the FDA clearance and the full marketing, let's say, effort will be displayed in the United States.

We do not have a date yet. We hope that enrolling of patients and also execution of the treatments, which are part of the clinical study, which is needed in order to get the FDA clearance, will be able to move quickly, but we are not thinking of anything at all in year 2021.

For what concerns, Monna Lisa Touch, sales of Monna Lisa Touch were decent. But as you know, everything is tied to a very expensive multiyear clinical studies to be performed in the United States. We are reaching an agreement. We do not have the official announcement yet, but we hope to reach finally the agreement with Cynosure, which is our exclusive distributor for the United States and for other -- for a few other countries worldwide to share the cost of this multiyear and multimillion program in order to be able to sell Monna Lisa Touch back again in 3 years from now.

In the meantime, for all the markets, but the U.S., we are launching a new release of the CO2 laser, which is used for the Monna Lisa Touch application. The name is Monna Lisa Glide. It's actually a laser with similar performance in a new, more attractive box with a more attractive guided user interface and with an option to use a second wavelength, which could be used effectively in order to improve the effectiveness of the treatment. This is for Monna Lisa Touch.

And then the third question was...

[Unknown Analyst]

It was about the temporary closing of the [ industry in Italy ], is there any impact?

[Andrea Cangioli, executive]

Yes. We are having a very good year in aesthetics in Italy. You know Esthelogue the company that is based here in Florence, close to us, I mean, together in the same buildings, had a very good beginning of the year, even though in some areas and during in the red and orange areas, the shops were closed, demand was very, very high due to our offer, which is really the top of all the offer in the medical aesthetics segments, both in medical for hair removal application, where we have top level hair removal lasers, the MeDioStar from Asclepion. We have also an entry-level hair removal laser system called [ Prime ], which is extremely interesting. And we have at least 3 technologies effective on body shaping.

We have the Icoone which is a mechanical massage. We have the B-Star, which is a body shaping system deriving from superluminescent led matrices. And we have the high-intensity magnetic fields being -- having good traction in the first 3 months. So in the aesthetic market, both in the professional aesthetic and also in the medical aesthetic, has been extremely, extremely buoyant in this first month of the year, both in terms of sales and in terms of order bookings that I was saying before.

[Bianca Fersini Mastelloni]

Another question? We have [Foreign Language] okay some other question, please? Andrea Bonfa.

[Andrea Bonfa, analyst]

Hope you can hear me?

[Bianca Fersini Mastelloni]

Yes.

[Andrea Bonfa, analyst]

Okay. Andrea, I got one question essentially for the performance of the medical aesthetic. In the sense that the previous quarter, the Q4 '20 quarter was affected by lockdowns across Europe and the world. But more or less, the situation was about the same in the first quarter. So how much -- I mean how can we explain this kind of performance from the medical and aesthetical sector? Is that an anticipation from, let's say, operator, from your clients over the, let's say, openings to be, let's say, achieved in the following quarter? Can you explain this kind of performance or is this kind of pent-up demand which was not expressed before? I mean, just an idea because if these are the kind of trends you are showing in a quarter which was heavily affected by lockdowns, especially in Europe, I would say, I would dare to say that the following quarter should be, by far, stronger even for next year, this -- I mean, should bode well for next year performance.

[Andrea Cangioli, executive]

Thank you, Andrea. It's hard to make projections, especially long-term projections. I can tell you that what we have seen in this quarter is high demand internationally. We did very well in U.S. We did very well in the Middle East. I mean we did decently in Italy and in Europe, but it was especially from international markets that we received very strong demand. And we believe in this case, we are getting to the level of demand can be a little bit less, can be a little bit more that we were programming because in several countries like the United States, notwithstanding the pandemic situation and limitations, people have learned to live with it and so are acting almost like if the pandemic wasn't there, at least, in terms of purchasing.

Moreover, I believe in the aesthetic, there has been a rebound in terms of demand, which, I mean, this is what we feel. When people -- the very end users, not our customers, the users, the clients, the ones that buy the services from the doctors, that buy laser systems from us are willing to spend more in this typical phase for their body wellness and their aesthetic because it's a reaction to the stress of the pandemic. And it also is a way of spending their excess monies because there are several layers, social layers which maintain their revenue, but decrease their expense due to the possibility to parties and possibility to travel and the possibility to dress up. And so they have more money saved to spend on their body.

So we have something which could be contingent. I used the word contingent several times during my presentation. At the same time, this contingency is putting us where we were more or less expected to be when we're thinking about 2021 in 2019. If this contingency will continue in something stable, we hope, and I think it will be at least for the very next month and then as usual, what's going to happen 6 months from now, it's beyond the visibility of our order bookings and it's only based on assumption, which -- I mean, are what we are. We believe that we can achieve the results I mentioned, but of course, none of our results is based on solid order backlog.

[Andrea Bonfa, analyst]

Okay. If I may ask a follow-up question on the, let's say, acne new machine and that's for the U.S. clearance. What was the timing for it as of today?

[Andrea Cangioli, executive]

The timing is expected -- the expected timing as of today is something in between the last months of 2021 or but more likely at this point to be in the first month of 2022.

[Bianca Fersini Mastelloni]

Some other question? No questions? So if there are no more questions, we finish this conference. And if you are -- please do not hesitate to contact Enrico Romagnoli, he will be happy or Andrea Cangioli, he will be happy to answer your question if you have some more questions to investigate. Thank you for attending this conference, and we hope to have you all at the next occasion. Good afternoon to everybody.

[Andrea Cangioli, executive]

Thank you.

[Bianca Fersini Mastelloni]

Thank you and good afternoon.