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L'Oreal SA
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Ladies and gentlemen, welcome to the L'Oréal sales as of 31st of March 2018 conference call. [Operator Instructions] I would like now to hand over to Mrs. Françoise Lauvin. Mrs. Lauvin, please go ahead.
Thank you, Theodora. Good evening to all. [Foreign Language] Welcome to the conference call for the release of L'Oreal's sales for the first quarter of 2018. With me tonight are Chairman and CEO, Jean-Paul Agon.
Good evening.
CFO, Christian Mulliez.
Good evening.
And Sophie Gasperment, in charge of Financial Communication and Strategic Prospective.
Good evening.
I hope you had a chance to read our press release, which was issued earlier tonight. Let me briefly review the highlights of the first quarter before we open the call to your questions. The key highlight of the quarter is obviously the strong like-for-like organic growth of plus 6.8%, after taking account of a 0.6% positive impact of the changes in scope of consolidation, that is the acquisition of the U.S. skincare brand, CeraVe, in March 2017, the increase at constant exchange rate was plus 7.4%. Reported sales of EUR 6.78 billion were dampened by a negative currency impact of minus 8.4%, given the strength of the euro against all major currencies over the same period last year. The strong organic growth continues to reflect sharp contrast, both by division and by region. By division, L'Oréal Luxe accelerated once again and delivered an outstanding performance of plus 14%. Active Cosmetics also reached double-digit growth at plus 10.2%. The Consumer Products Division started the year with a more moderate growth of plus 2.6% and the Professional Products Division was up 1.9%. By region, the highlight of the quarter was the return to strong growth of the New Markets at plus 14.9%, driven by the 21% surge in the Asia-Pacific region; the 18.3% rebound of Africa, Middle East; the continued 6.7% dynamism of Eastern Europe; whereas, Latin America remains stable at plus 0.2%. At plus 0.4%, Western Europe showed resilience in an overall lackluster market and North America delivered a 2.5% progress. Two of the 2017 growth drivers were once again powerful in the first quarter. First, e-commerce, with further increase of plus 33% to 8.8% of sales. And second, Travel Retail, advancing 28% to more than 7% of revenues. As usual, a few words to help you with your forecast as the foreign exchange markets remain volatile and the headwind is likely to persist. Extrapolating the end of March currency rates against the euro or EUR 1 at USD 1.22 until year-end, we dipped to a negative currency impact of minus 5.2% over full year sales. And looking at the interim stage, the impact on the first half sales would be negative by around 7.7%. Nevertheless, the year is off to a strong start. 6.8% is actually the highest quarterly organic growth we've achieved since the first quarter of 2010, and it bodes well for the future as it reinforces our confidence in the group's ability to outperform the beauty market in 2018 and to achieve significant growth in like-for-like sales, while increasing once again our profitability. Thank you. We are now ready to take your questions.
[Operator Instructions] First question...
I have 2 questions, please. Firstly, on the U.S. market, I wonder if you could give us some color on the market growth of the U.S. market. And then secondly, great performance again in Luxury. I wondered what you thought the normalized growth for Luxury might be. It seems that we're getting extraordinary growth from China tourism, so I wonder what small level of...
All right. So we didn't hear very well your question, but I'm going to try to answer anyway. So on the U.S. market, it's a bit early to tell the market growth. But what we see is that the market globally for the last period for mass has been pretty flat or slightly positive. The market in Luxury is better, probably growing probably about mid-single digit, something like that. And the market for professional division in fact is improving period after period, so we think it's going to get -- it's getting better. So that's what the market -- in the U.S. market. I take the opportunity to say that on this market, on the -- for the consumer division, in fact, we had some very good period in terms of sell-out. For those who get the Eastern panels, we were up mid-single digit in term of sell-out on the market, which is on the panel, roughly stable. In Luxury, we're growing a bit less than the market, and we had some good performance on professional, where we are growing again on the U.S. market and very good performance on Active Cosmetics, also thanks to the recent acquisition of CeraVe, which is proving to be very, very successful. Regarding your other question on Luxury, so the Luxury market is, as you said, really flying right now. We estimate that probably the market is probably around 10% worldwide or maybe slightly even higher. And it's, as you said, mostly due to the great appetite of Chinese consumers for Luxury beauty brands, not only in China, as I explained several times. It's true in -- for Chinese consumers in China, in Hong Kong, in Travel Retail, in Japan, in many parts. But some of the parts of the world also are pretty positive for Luxury, not as strong, of course, but I would say that the market in some countries like Russia is also positive, so the -- globally, the U.S., as I said, is positive too, maybe a bit higher than what I said, probably a high single digit. So globally, the Luxury market is pretty positive. And of course, we are outperforming the market in the first quarter significantly, but we are also enjoying a very positive market.
Okay. And then one small follow-up, please. Are you still experiencing any inventory reductions that have been ongoing across the U.S. market for the last 3 quarters or so? Are you still experiencing any inventory reductions from the retailers?
Yes, it's true. It -- we have seen some -- obviously, there has been a difference between the sell-out, the sell-in, especially for the consumer division. That's one of the reason of the relative weakness of the consumer division numbers in this first quarter as on the U.S. market, there has been a reduction of inventories by retailers. Sorry, so there was something on the line. So there was -- there has been a reduction of the inventories by the retailers, probably due also to the adaptation to competition with e-commerce. And so it explains why [indiscernible]. So I'm going to finish by saying that, in fact, there was a big discrepancy in this first quarter between the sell-out and the sell-in for the consumer division in -- of the U.S. market due to the reduction of inventories by the retailers. Next question?
Next question, Mark Astrachan, Stifel.
Wanted to ask about China more specifically. I guess, maybe, I don't know, perhaps you're all also as surprised to sort of some of us that the growth just continues to accelerate at this point. I'm curious how you think about what has led to the acceleration this time versus maybe growth in, call it, 2015-ish time frame and just thoughts on what you think the overall luxury market in China is growing and just generally how sustainable you think it is or what is more of a normalized rate of growth in the market going forward.
Okay. Well, it's always difficult to predict. What we are seeing in China is it's not only a growth of the luxury market. The Luxury market is definitely flying, but for sure, like what we have seen last year, so that's fantastic. But as considered, the mass market is also growing nicely and even, I would say, that our Active Cosmetics division, this category of product is also growing. So it's -- what we are seeing, in fact, is an increase of the consumption by Chinese consumers generally with, of course, a special mention for Luxury. It's difficult to predict how long it can last, but you know it's not impossible that it could last for a while because there is, in China, as you know, an increase of middle and upper class consumers. These consumers have a disposable income, which is growing year after year. They don't always have many other areas to spend their money and this appetite also for beauty products could really be sustainable for a while. So how long? I will not take a bet, but it could be something very solid and robust for a while.
Okay. And just following up, your comments on the U.S. Luxury market, so growing a little bit below the market is what you said about your business. Your principal U.S.-based competitors growing less than you are in the market. I guess I'm just curious, who do you think is actually accounting for the incremental growth in the market? I mean, what -- obviously, not companies, but how do you reconcile mid-single-digit growth with your growth a little bit less than that with Estée Lauder's growth at basically flat at best?
Because there are many new brands on the U.S. market. I mean, what we are seeing clearly is some other players, some other brands, Indie brands that are growing but are not part of large companies and that has been growing pretty nicely these past few months very clearly. And also, I would say that...
Do you think that's sustainable too for those brands?
And also, I would say that these Indie brands take advantage of not having the same footprint as some other bigger players, for example, us or the Lauder company. They don't have the footprint in department stores. And so maybe they, for the moment, they enjoy an easier work than we do.
And just lastly, do you think that's sustainable? Do you think that ultimately the big brands go back to driving the growth?
Again, it's difficult to predict, but what's interesting is that if you look at a very advanced market like China, the -- what's really interesting in the past few quarters is that the brand that has gained the most in China has been the biggest brand. So it's true that there are less Indie brands in China than there are in the U.S. But still, what we are seeing with the development of the consumption with the acceleration of digitalization, with the increase of e-commerce, is that, in fact, big brands are becoming even more powerful. For example, in China, we now have 4 brands in the top 10 of the luxury brands in the market. That's Lancôme, #1, Kiehl's, Giorgio Armani and Yves Saint Laurent, and they are getting more powerful year after year. So I think that the -- there is a case about the fact that the digital world and with -- in e-commerce world, big brands has a big role to play.
Next question, Marion Boucheron, Raymond James.
Just one question first on the mass market. I was wondering if you could give us the growth of the division if we exclude Brazil or France? Will your point be quick enough? And also if we could have a bit of replays of what's going on by category in this division? And then could you provide us maybe some colors on the Western Europe deceleration this quarter? Because, I mean, France has been weak for a while, so have there been changes in other markets?
All right. So many questions. So first question, obviously, the growth of the consumer division without Brazil and France would be much better. Next, we have not computed it because we are not trying to find excuses and saying that without everything that doesn't go well, the rest goes very well. So -- but...
France is around 7.5% of our total turnover and negative, though.
And Brazil...
And Brazil, it's much less. It's...
For the CPD.
CPD, yes. Comprises of CPD.
So it's clear. But no, it's true that you were right to say that these 2 markets are and were, until March, the biggest drag to the growth of the division. We think that Brazil will start to get better during the next periods. And we also hope that, at least in terms of comparative basis, that France will also get a bit better. That's why we are pretty hopeful and confident that the consumer division should be able to accelerate quarter-after-quarter as we said at the beginning of the year. In term of categories, the market, the consumer division market is -- at the luxury market, by the way, we see an acceleration of skincare, which is a very productive element. Makeup is, of course, a bit decelerating. The rest, I think that hair color and haircare is flattish or something like that. And your last question was about?
Western Europe. I mean, the deceleration in Western Europe.
Yes, Western Europe is a bit less buoyant than last year, but France is still difficult. The market in France is still difficult. We are not seeing yet any real improvement. Normally, it should come because unemployment is going down, consumer confidence is better. So we should see it coming, but it's not coming yet. U.K. has slowed down compared to last year. The first quarter of last year was a bit exceptional, but the market is a bit down, probably less than last year. And generally speaking, Western Europe was a bit slower than last year. But there again, we are not too worried. Globally speaking, we think that the market will hold, except -- with the exception of France, the market should hold well, and we are -- we have what it takes to grow our market share this year in Western Europe as we did the year before.
Next question, Fulvio Cazzol, Goldman Sachs.
So I've got 2 of them. One is a follow-up on the destocking in the U.S. I was just wondering if you have any visibility on how long this could persist for or whether we should start to see easing of destocking from Q2. So that's my first question. And then my second question is on whether you can give us a bit more granularity on the growth by category. I know that normally you give us a bit of a sense on whether makeup is double digit, and skincare, high single digit. I was wondering if you can give us some comments on -- I know you already said that hair is flat, but on the others, how are they trending, please?
All right. We'll ask Françoise to give you the granularity of the category.
Cheers. So Fulvio, for the 2 strongest growing categories for the group in this first quarter are skincare and fragrances, which are growing both low to mid-teens. And fragrances, I must say it's probably due to the strength of some pillars of some brands like La Vie Est Belle of Lancôme. And we also had the first success of new launches like Giorgio Armani Sì Passione or Polo Ultra Blue in the U.S. And in the French market, in particular, Cacharel. As a category, makeup was up broadly mid-single digits. And as we said, hair, both hair care and hair color, were flattish, slightly down.
And regarding the destocking in the U.S., we don't think that it should last very long because the inventories are not especially high with more a kind of adjustment during the first quarter, also due to its payoff at the end of the year for retailers. So we think that Q2 should -- we should see the end of the destocking...
Normalizes.
Normalizing in Q2.
Next question, Guillaume Delmas, Bank of America Merrill Lynch.
My first 2 questions are for Christian. The line I was wondering about what the FX gains and losses, which last year was a significant headwind of around EUR 95 million. Now that we are in mid-April, do we have some visibility, at least directionally, what's going to happen in that line, whether it's going to be another big negative number or whether we're going to see some easing in that line? And still on the margin front, I mean, you said skincare growing low to mid-teens. Would that generate a nice positive mix effect? Because, surely, you must have higher operating profits or margins in the skincare category, particularly in Luxury. And then on the top line, what's happening with Urban Decay? It used to be one of your very strong growth engines. It had a slowdown in 2017. It seems it's still the case in the first quarter of '18. When should we expect an uptick for that brand? And finally, it's on the new brands. We're seeing a lot of companies launching in-house created brands. You've done that with HOUSE 99 with David Beckham. We've seen French Beauty, Love Beauty and other successful brands being created in-house. Should we expect that trend to accelerate? Or is it simply a function of beauty assets being particularly expensive at this point in time and, therefore, company not willing to take the risk of overpaying?
Yes. As far as currency impact is concerned as Françoise said and as we said in mid-February, the conversion impact on the turnover should be negative, extrapolating the present current rates should be around minus 5%, minus 5.2%, on the turnover for the full year and around minus 7-point-something, minus 7.7% in H1. You know that the structure of L'Oréal P&L such that an impact of 8% on the turnover of the sales will be about -- should be about the same on the EPS is not new. They've been like that for many, many, many years. In term of transaction, it should be considering the hedging contracts that have been set up for the full year 2018. It should be slightly negative, but manageable. This, of course, have been integrated, if I may, in our guidance for the full year that we published mid-February, which is, once again this year, an improvement of the profitability. And regarding the mix of it, whether it comes from skincare or fragrance or makeup, this year, it's likely to come off from skincare, but it's already including in our guidance. So no reason for modifying anything. But for the currency and then the small brands, HOUSE 99 and...
Yes. There was a question about Urban Decay. In Urban Decay, it's pretty clear that this -- the brand -- the growth of the brand has decelerated in the second half of last year and it's still pretty slow right now. I think it's quite the standout, the life of the brand. You don't -- you can't grow very fast all the time. You have some cycles. Then we are -- we have to start a new cycle of growth, and we are pretty confident about that. The brand has been extremely successful for...
7 years, 6 years.
6, 7 years in a row. So it's time now to reach another cycle, and we are doing everything it takes in term of new products and new launches, new ideas, new marketing mix to move to a new speed. So we are pretty confident. And regarding your last question, it's true that, right now, several companies are launching some new brands. That was not the case a few years before. It's partly due to what you say because it should -- when you see the prices sometime of some acquisition, you may -- we may think, why are they not -- why not that they're all launching our own initiatives, but it's also a question of opportunity. When -- for example, in the Beckham case, there were no other option if we -- the best option in order to wake up the men's grooming market was to launch something with David Beckham because he's an iconic person to do it with and there was no existing brand in the market exciting enough to do it. So it's not only a question of price, it's also a question of opportunity.
And just my second question for Christian. It was less about the FX impact by category, much more about the fact that you have higher margins in skincare. So with skincare growing faster at the group level, do you get a substantial positive mix effect?
No, I answered your question and that was my -- and I confirmed my answer. That was included in our guidance.
We have no other question. [Operator Instructions] Next question, Jonathan Feeney, Consumer Edge.
Just a bigger picture question. When you see -- is there ever a time in this quarter or broadly that you allow currency fluctuations to change your approach to a market like, say, the U.S.? In this case where you have such an extreme currency situation, does that drive your pricing? Does it cause you to reduce investment? Or is it everything purely done on a constant currency local basis? Because it certainly will be tempting. I think many other stable companies do manage based on currency, but I'd love to hear your thoughts on that given the destock in North America and the weak currency.
We really manage country by country on the long term and on the perspective of increasing our position, our market shares, our leadership. And we don't change this policy every year based on the evolution of the currency. And I think it's the right way to do it because I have been in this business for 40 years and every year, the evolution of the currency between the euro and the dollar, or before, between the franc and the dollar, if we had changed our policy every time that the currency was changing, honestly, we would never have been able to build the position that we have now in the States. So -- and again -- and also, if you look at the situation today of the currency between the dollar and euro, it -- okay, it's less favorable than it used to be these past 2 years but after all, it is not also terrible when the euro was created. If I remember well, it was at EUR 1.17 fixed and we are today at EUR 1.22, which is 4% less than when it was created. So honestly, we have no reasons to panic. We are hedging. We are adapting our policy. And we are absolutely able to deliver what we have planned to deliver.
Next question, Pierre Tegner, Natixis.
Pierre Tegner from Natixis. I have 2 questions, the first one is on the South Korean market. Could you tell us what are the denomination in this market because when I used to hear good things on these. And on top of this, they made -- and Unilever announced during the last 18 months some acquisitions in this attractive market, maybe on the premium segment. So is it something you are seeing looking at or are you still focused on the organic development? So that's the first question. And the second question is about Facebook because, as you know, and as it was highly relayed by the press, there have been many noises around the Facebook kind of scandal. Is it something that is changing your view on the way to use social media for the long term? Could you share a bit your thoughts on this? And is it something that could change the way you are looking at your marketing investments between digital and more commercial on media?
Okay. And just 2 words on the Facebook story. Of course, we have been informed like all the whole world about the Facebook story. What -- number one, we are always extremely cautious and careful about data privacy and the way that data are used. And so this -- I think this will reinforce, in a way, the caution of Facebook and other players in the way they use data. And I think in a way, it's a positive thing that happened. Of course, it's a big noise, but it will make every player even more aware of the absolute importance of data privacy and the way to manage data. And so based on that, we are not considering to change our policy regarding Facebook. We think it's a very useful media for us and we keep partnering with them. But it's clear also that we are one of their closest partners, and we want this partnership to be absolutely well executed in the perfect respect of consumers. Regarding the South Korean market, the market itself is not especially dynamic. If I'm not mistaken, the market must be flat. So it's not a very exciting market in itself. And we are -- our business on the market is also more or less flattish. We, as you know, probably we are especially strong in Luxury division and I think that it's one of the countries in the world where our Luxury division represent the vast majority of the business. Nothing else to say.
Next question, Chas Manso, Société Générale.
You posted strong 6.8% organic sales growth. And if I've got your messaging right, you're sort of indicating that you expect the momentum in North America to improve as the year progresses and you don't see any reason why the Luxury Asian dynamic should slow. So does that mean that overall, you see no reason why that the total group dynamic shouldn't slow that, i.e. the Q1 is not the peak organic sales growth for the year?
That's a smart question. You know very well because you know us very well and you follow us very well, that every year is a different, I would say, a mixed gift bag and some years, some divisions are growing faster. Some regions are growing faster and the year after it's maybe different. So we just -- I just said that if we look at this first quarter, we have seen some very contracted results and that we have reasons to believe that some of the weak parts of these contrasted results could improve, not -- it doesn't mean that the total should increase. So we'll see in the next quarters. But as we said at the beginning of the year, we said that we are pretty confident, and we even said that in our press release today that we are confident in our ability to outperform the market and achieve significant growth. So it means that we are confident.
Understood, understood. Also, could you tell us where you're seeing the sort of global beauty industry growth is right now? I mean, normally, you say sort of 4% to 4.5%. Has it changed very much, particularly with the growth in Asia?
No, it's too early to tell because, as you know, we are the second manufacturer to publish our numbers. So we don't know the -- we don't know yet the numbers of the others. The only thing that we can say at that moment is that we estimate that there is no reason to believe that the growth of the market should be lower than last year. Last year, it was between 4 and -- 4.5% and 5%, close to 5%, and we believe for the moment that it should be more or less the same.
Okay. And perhaps you could just highlight the key sort of new launches that you think are the most important ones to drive good growth for the rest of the year.
Yes. But we have many, so it could take a lot of time. In fact, we have, as every year, a good vintage of great new products. In the consumer division, we have some very interesting new skincare products. For L'Oréal Paris, Revitalift, we have some great innovation in terms of makeup with the new mascara, Lash Paradise, the new lipstick for Maybelline, new mascara also for Maybelline, a new -- a complete new Elsève line for shampoo called Dream Length. For Luxury, every brand has something very important, and we have 1 or 2 strategic launches. One of the most strategic launches, even if it will not maybe be the most important in terms of sales is the first-ever, how do you say that, natural hair color launched by L’Oréal Professionnel called Botanéa. It's interesting because in 109 years, we never launched a natural-based hair color yet and it's going to be a first. So that's going to be very, very strategic, even if it's maybe not the most important in terms of sales. So it's -- in all divisions, all categories, we have some great new products coming.
Okay. Just a quick follow-up and I'm done. Does that mean that your sort of new products as a percentage of sales, looking at your 12-month CAGR, which is normally high teens, has that moved very much with this activity? Was it more or less in line with previous years?
Around 16%. No, no, no, it's around, for the quarter, we...
Usually don't discuss it by quarter, but it's close to 16%, so it's a normal range.
It's almost -- it's always between 15% and 18%. And again, to be honest, the percentage of business made with new products is not always the most relevant criteria because the most important criteria is how successful they are. And because a launch that -- a product that we launch now, the -- when you already make a big difference is if success is growing period after period and so that's what we hope to achieve. We have a new launch also maybe interesting for you. We are relaunching completely our L'Oréal haircare in the U.S. because the launch that we did a few years ago was moderately successful and didn't reach the level that we wanted. So we are launching it right now, and apparently, it's off to a good start and this could be significant in the years to come.
Last question, Marion Boucheron, Raymond James.
Just 2 additional questions. One, on the Luxury acceleration, would you say you're gaining more market shares than before? And was it only driven by China or was other markets in the mix or is this the market, in your view, that accelerated? And then could you -- just a word maybe on the ModiFace acquisition, what's your plans, which is still in other brands, I mean, outside the group that you're able to use the technology? And do you have any other interest in that respect in that area to do acquisitions? And then maybe if you could give us the BRIC growth.
Okay, the BRIC growth will be, François?
Yes. Volume per order. The BRIC growth, so we talked about China, and obviously, the Asia-Pacific region being up 21% cannot be achieved without very strong China. So I would say China is even a bit higher than this number. India was up low teens. Russia was very slightly down but it's -- this is rather temporary because this is more a question of calendar of phasing, so we don't expect that to continue. And Brazil was down, as we mentioned, it was mainly of CPD, Consumer Products Division.
So regarding Luxury, as I said before, the market is very strong. The market is, as I said, around 10%, 11%, which is very strong and is obviously relatively stronger than last year and the year before, so that's a fact. We are gaining market share because, as you could see, our growth was above the growth of the market. It is, on one side, due -- the growth of the market is due to the -- to China, but the fact that we overcome the growth of market is due to the strength of our brand. We have 4 brands right now since the beginning of the year that are growing really extremely strongly, which are our 4 big brands. In fact, in the Luxury, the billionaire brand, it is Lancôme, Lancôme, which is accelerating. It's high mid-single digit, which is pretty amazing for a brand of this size. Yves Saint Laurent, double digit; Giorgio Armani, double digit; Kiehl's, double digit. So in fact, these 4 brands are really accelerating, which, by the way, proves the point that I was saying before that, in fact, in the -- in this division, like in others, big brands are not at all -- there is no possibility that big brands should lose power. On the contrary, in fact, all big brands in Luxury are accelerating. Exactly, by the way, like -- I'm sorry, no, Lancôme is double digit, sorry. Lancôme is amazing. I will tell you exceptionally the growth of Lancôme. Lancôme is plus 15%, which is the best growth of Lancôme ever, I think, which is absolutely amazing. So we have 4 brands double digit and it proves the fact that big brands are really more powerful than ever. And it's true also for L'Oréal Paris and Maybelline that are back to mid-single digits. So in fact, the -- what we see across the portfolio of our brand is that our big brands are really accelerating, which is extremely good news for the future. To finish with ModiFace, so ModiFace, you know that it is -- you know what is ModiFace. It's a Canadian company that is, in fact, the champion worldwide of augmented reality and artificial intelligence applied for beauty and this is, of course, a completely new type of acquisition for us. It's the first time ever that we buy a tech company and it's -- why did we do it? Because, obviously, it's -- we think that it will give us a very strong competitive advantage in the market -- in the digital marketing of our brands and also in the e-commerce, which means, obviously, that eventually ModiFace will work for all our brands but only our brands. So we have 2 contracts for the moment with some other partner that will, of course, we'll respect. But the idea is to use the knowhow, the savoir-faire and the expertise of ModiFace to boost the digital steadiness of our brand.
Next question, Anubhav Malhotra, of Liberum.
I just had a couple of questions. Firstly, if you could give us the mix of organic growth between volume, price and mix. And if you could also tell us in China particularly, I am interested in knowing which of the product categories that are growing the fastest. Is it skincare or it's makeup, both in consumer division and in the Luxury Division?
We are not going to give every detail in every market because I'm sure that also some competitors are pretty interested. So just to let you know that in China right now, there is a very strong move of makeup for Luxury, but at the same time that the skincare market, which is by far the biggest market, is also growing very nicely. And in terms of volume and value, François?
And so the split in the 6.8% organic growth, the split is 1% for volume, so 14% or 15%, and the value component, which is a combination of both price and mix improvement, is 85% of the total volume.
Like in 2017.
That has changed?
Sorry?
No, I'm sorry that was not for you.
We have no other question.
Okay.
Okay.
All right. So thank you very much to all. Thank you for participating, and we will be happy to talk to you again very soon. Thank you. Bye-bye. Good evening.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.