SEB SA

PAR:SK

Earnings Call Transcript 2019-Q2

[Thierry de La Tour d'Artaise, Chairman & CEO]

Okay. It is 2:30:00. Ladies and gentlemen, good day, and welcome, and thank you for joining us for the presentation of the half yearly accounts 2019. As usual, I'll be presenting these results with Stanislas De Gramont on my right, who's General Director; and Vincent Leonard, who's the General Director Deputy in charge of finance. I'd like to salute those who are listening to us. We're being webcast -- audio cast I guess. I'm not sure what the difference is but casted in any case. They can hear us, okay, and in French and it's in English as well.Great. So we're going to start right away. We're going to try and fit this into a little bit under an hour, so we can have some time for questions. We'd like to start with having a look at the mixed general environment. We're going to talk about the environment and key figures. I will say a word about events of note in the first half year of 2019. Vincent will talk to us about the figures and sales in the first half year, and Stanislas will have a look at the various countries and what's going on in our countries around the planet, and we'll have a word about a few new products that we've kicked off in the first half year. And we'll talk about prospects.So first, the environment. Perhaps a couple of things. First of all, the environment, in geopolitical context, continues to be a bit difficult. I'm thinking about the geopolitical tensions between the U.S. and China, which are -- there is a real tension there. I don't know how many product families will have customs duties or not. There's also the Gulf. We've had tension. We haven't talked about that much but there's been tension between Korea and Japan with the real economic war and products being blocked. There's a certain number of disturbances there. And as usual or as often the case in emerging countries, there is some uncertainties there as well. We have a new President in Brazil who seems to be making some reforms, but that's not that one. And in terms of Turkey, there are frequently somersaults there and the Middle East and Saudi Arabia as well. And in Europe, there's a certain -- there's sluggish dynamics in Italy, Germany, U.K., Brexit, do we Brexit or do we not Brexit and so forth. So things are a bit difficult, but more directly obviously, this is not a surprise for you. There are some significant difficulties in -- between traditional retail compared to the continuing and violent development of e-commerce and pure players, whether it be Alibaba and Amazon and so forth and click and mortar. So there is a real mutation ongoing that will last over many years until we get back to some kind of a balance, which is not the case yet. So there's a lot of pressure on pricing, and there's a lot of -- it's a promotion-driven environment. We'll see a bit later, when we talk about the different countries, what's happening in that respect.One point about the expected developments in raw materials, it's better than we thought it would be at the end of last year. It's slightly better, and the currency volatility is a bit lower even though we are cautious over the year as a whole, and we're still kicking -- when you look at the figures we had at the beginning of the year.Now as to the figures. The figures are -- seem pretty nice. The sales, EUR 3.337 billion. It's 10.3% growth in euro. That's the published result, and 8.4% like-for-like in constant scope, excluding currency and acquisition notably Wilbur Curtis. When you break this down into our 2 divisions in Consumer and Professional, they're unequal. Consumer is most of our sales, EUR 2.946 billion this is up 7.7% published and 7.2% like for like. Vincent will be saying that I think it's at the 18th quarter, the consecutive quarter growth, very strong growth, but it's always nice to say it even if you know.In terms of our Professional division, which includes hotelry and other professional uses, sales are EUR 391 million, up 35% in published figures and plus 20.1% like for like. And you can see the difference of 15 points between Wilbur Curtis.Other figures. ORfA stands at EUR 230 million. That's up 10.7% in published and 8.1% like for like. Net profit is EUR 100 million, almost 10% growth. And here, these are published figures. We're not looking at it like for like. And net debt is up by EUR 400 million compared to the 30th of June last year. So there is some attractiveness. It's very strong. So there is growth here, EUR 413 million -- I'm sorry EUR 1,313 million (sic) [ EUR 313 million ]. Now this is linked to IFRS 16 with capitalization of rent that Vincent is willing to give any -- an accounting lesson about the IFRS 16 effect if you like.Now events of note. There are 4 events of note for this first half year. First was the acquisition of Wilbur Curtis, which was finalized in January, the end of January. We had already talked about that, but in going back over that, this is an acquisition that was very complementary with VMF -- WMF in Professional division in the U.S. in coffee. We are using our 2 brands, WMF, a German brand, and a Swiss brand as well especially Schaerer in the United States by the type of customer that we have there but which is -- fundamentally, these are coffee machines that are automatic espresso -- fully automatic. You have coffee, cappuccino, latte, macchiato and all kinds of coffee, but these are not filter coffee. So these are machines that are only sophisticated machines. Wilbur Curtis only produces coffee machines that are filter coffee, very traditional. This is the typical American with freshly brewed coffee. We don't like that coffee here, but the Americans love it. And that will obviously be the basic part of the American breakfast in the U.S.So there is a complementarity between these 2 products, which translates by a price positioning that are complementary because Wilbur Curtis machine between EUR 1,000 and EUR 3,000. We stand between EUR 5,000 and EUR 15,000 because we're much more sophisticated.Also, it's very complementary in terms of client portfolios. Wilbur Curtis is around the U.S. everywhere in every state, in every small town with traditional coffee that we all know. Schaerer and WMF are not well known. They're being developed in U.S., but it's still a small market for them. They're going to grow. And we have big customers such as Dunkin' Donuts, Starbucks and people like that, very complementary.We have already said since the acquisition of WMF, by definition, this activity is contractual. We signed contracts. It could be for like 2,000 machines with Dunkin' Donuts. We have a contract we're very happy, but the following year, it might not be as big. This could go down. The fact is you have an activity in parallel, which is not as big. The smaller customers that are stable with a stable inflow is always pleasant because you can keep a bit of stability. And also geographical footprint, we have very big customers [ Thomas ] in the West Coast and Wilbur Curtis in the U.S. And the last advantages is that they are based as we are in Los Angeles, 30 minutes apart from each other, so it's very easy to get together and combine those 2 activities.So the integration process is ongoing. It's going very well. Americans are working with Americans. They get along. They all talk coffee, and we have a personal -- commercial and logistics synergy are starting to develop. Looks good. And sales for WMF, as we've seen, there's very strong development in U.S. because it's a good -- big part of their activity, but also the sales of Wilbur Curtis in June is doing very well. There's a lot of new products in Wilbur and that we have as well in WMF and Schaerer.So this is a good acquisition that should be developing. It might take a bit of time because the salespeople have to learn about both products and sell them. But there's a lot of little coffee shops where they have 2 or 3 coffee machines -- filter machines, and they might start having 1 espresso machine. They can ramp up and have a sort of specialty coffee for sale and vice versa. So we think that there's a real synergy there to develop this American market.Wilbur was #2 in filter coffee. They got a 25% market share. #1 is BUNN with 50%. It's clear the objective in our teams is to very quickly become the leader in the filter coffee market and to have a very strong position in the U.S. because we're already a leader in the full automatic coffee market. So much for Wilbur Curtis.The second point is about Egypt. Now with the signature -- the joint venture with Zahran, the ex agent that takes care of our business in Egypt and has done so for many years. We have a joint venture, first of all, with electrical appliances. And at the end of last year, we talked a lot about Cookware. All of the production was transferred for the culinary activity, the Cookware activity to Alexandria plant and Borg El-Arab, which is 1 hour away from Alexandria, Egypt. That is ramping up very well, very strongly and gives a very strong position in the Egyptian market with 2 brands Zahran, which is a historical brand; and Tefal, which is another well-known brand in Egypt. And we're also starting a production for [ PEM ] in the same plant just next door. With a strong growth in volume and improvement in the competitiveness and already we have a leadership. So we're betting a lot on Egypt.And there have been some political somersaults, maybe economic as well. But we think, in the long haul, this is a very interesting country to be in because of the size of its population, the economic development of the country and the attractiveness of the pyramids and so forth. The last point, a solid momentum in retail business. Zahran opened up 11 stores. They're currently being refurbished. That's more 15% additional sales, very comfortable margins. So Egypt is starting off to a good start.Third point. In the first quarter, we started an employee shareholding plan, and the last one was in 2012. So this is open in 33 countries to employees. This concerns, as you can see, 19,000 staff. So it's not the 35,000 in the group because we don't actually have the right to do that in all countries. In some countries, you can't. There's no interest in doing, for example, in China. A listed company cannot actually have employee shareholding plans. You can't do it in China, but we do it in other countries with a participation rate of 22%, which is satisfying. And you can -- subscription price is EUR 123, which is a 20% discount compared to benchmark price, which was EUR 153.70, very interesting. So EUR 4,400 average invested by staff.So this is a very strong level of share purchasing. EUR 18 million in subscribed capital for 147,000 shares, that's 0.29% of the share capital. It's not going to dilute the shareholders much, but we are happy because it really -- the -- that we've ramped up from 2.74% of in-house shareholders to 3.04%. So in 2 years, we actually only had 1 shareholder on the Board, so we wanted to welcome this before it became an obligation. So this was very welcomed, and it was a very strongly subscribed. We had -- some countries had 95% employee shareholders. Portuguese, for example, was our affiliate with 100% employee shareholders.The last point about 2019 was WMF. You know we had -- we announced a plan to reinforce our competitiveness of our mass market -- our retail market. And now we have a professional coffee machine market there as well, MCP, but we call it PCM, professional coffee machines, very strong development in sales. It's beyond our wildest hopes, plus 43% in 2018. And we also have a big retail activity, which is a bit more complicated. In Germany, the top of the line distribution was suffering a bit. That was minus 8% in Consumer business but we're launching a reinforcement plan with a view to growing the [ MOP ] of the retail business, the Consumer business above 8% with our actions, which are based on growth by internationalization in various countries and also enriching our product offering to have a broader product offering and for differentiation between our stores and classical stores.We're also reorganizing industrially in Geislingen. That's the historical site for WMF. We are lucky enough to need to strongly increase our production capacity for professional coffee in Geislingen. That is the big plant in professional coffee machines in Germany. So we're going to take advantage of that to increase the production capacity and improve the production using pressure cookers and other things. So that's being transferred there partly to [ launch ] in the French and Romania and Italy where we are working under the brand Lagostina.So this is what's going on in our pressure cooker market. We have 3 stainless steel production units. We're also at the last step of optimizing our logistics optimization. We have 2 logistics sites in Bergkamen in the north of Germany and another in Dornstadt, which is right next to Geislingen, 10 kilometers away. We're not closing it. It's a subcontractor, but with the arrival of Bergkamen, it's now transferred to Dornstadt, which will make it possible to offer -- create 400 jobs. There could be 400 jobs potentially affected in Geislingen. We've talked a lot this -- about this at the time of acquisition, and WMF still had cost of a listed company a few years ago but they're no longer listed. And they don't need to have the same expenses. So little by little, we need -- we're bringing WMF to a percentage of cost compared to sales, which is equivalent to the subgroup. So much for the points of note other than -- and I'm going to hand over now to Vincent, who's going to be talking about the figures.

[Vincent Leonard, Senior Executive Vice President of Finance]

Thank you, Thierry. Let's begin with sales. You see the breakdown here, plus 8.4% in organic growth and a scope effect, which is with the consolidation of Wilbur Curtis and the extended joint venture now including Cookware in Egypt for total of EUR 43 million and a reported growth of 10.3%.The currency effect, you have the breakdown here, quite contrasted between the plus EUR 15 million, which is split between a very robust relationship between dollar and yuan and the Japanese yen. But what we're penalizing is the emerging countries, we see them all there, all the important emerging countries for us which are deteriorating over the second quarter.Now this is a quarterly view. Solid growth continued throughout, as I said, 11.5% for the Q1, 8.6% for Q2 and this is in line with previous years, which were also already very dynamic. And as Thierry said but let me repeat, it's the 18th consecutive half year with growth. One day these days it'll stop, but it is nevertheless a tremendous illustration of our position as leaders in the business. And that's why we are very pleased to repeat this. Yes, in other words, the end of the year is going to be good.Now this is a regional view. This is the 8.4% -- the second column on the right, plus 8.4% organic growth. You can see that all regions are growing quite robust in most regions. We are very pleased to see North America positive and China at plus 12.8%, is doing what we expected. It's a 2-digit growth, and we hope to -- and expect to see this for several years. And a somewhat softer growth in the other Asian countries but Stanislas will explain it's essentially in fact Korea, which is pulling this figure down. And then Professional, 20.1% like for like, this is driven by the professional coffee contracts essentially in the U.S. And the last column, you have the performance for the Q2, and this doesn't call for any comments because this is perfectly in line with what we have seen for the half year.This is a breakdown of the portfolio by region. You see there's a balance between emerging and mature countries, 50-50 pretty much. And something to be noted is North America, which is growing a bit, which is -- were 8% a few years ago. It is now 10%, and that's thanks to the Professional Coffee, which is growing very strongly there, but otherwise figures are pretty stable.Now the top 20 countries. The -- I think, in fact, there are 14 experiencing growth, the ones in green on the top of the slide. And there are just 2 markets, which are in a downturn, which I won't comment because Stanislas will be doing this. But this is a great dashboard for the 20 -- top 20 countries with the vast majority of them growing.

[Stanislas De Gramont, Chief Operating Officer]

Thank you, Vincent. And now is my mic working? Yes, it is. Now let's go around the world with a focus on a number of countries. And let's begin with Western Europe, where we have good performance the order plus 3.6% in the first half, and this compares to plus 1.3% in 2018. France, the market is stable and business driven by our core business and also the loyalty programs, which in Europe and in other regions are extremely dynamic this year.So overall, the business is good with a focus on France now, which was a source of concern in recent quarters. France is, in quarterly sales, stable with respect to 2018 with a slight pickup in Q2 and in a legacy situation where our growth had been very -- had been slightly up in first quarter but disappointing in the second half. And in France also, we have the Cookware market, which is declining and significantly so, but we are still winning market share, in particular, thanks to our strong promotional efforts that we mentioned at our quarterly results.And for the domestic appliances, there, it's very dynamic, and we are continuing to grow our market share driven by our flagship products such as Cookeo, Cake Factory and Steampod. Other Western European countries are generally growing with increasing market share. Our growth levers are usually the same, vacuum cleaners, blenders, and so they're very strong dynamic across Europe, except in the U.K. where the market is depressed and our sales are depressed, our customers are depressed and the Brits are just depressed and depressing. And -- well, that's the way it is. But what can we say about the U.K.? Well, it's a market where of course everybody is waiting to see what's going to happen, see whether the -- there are going to be really negative consequences from Brexit and so on.Now if we move a bit further eastward. And if you look at Europe, Middle East, Africa, the scope here goes from Poland, Central Europe, Russia but includes Turkey and Egypt. And there, things are going very well. We had a like-for-like half year to -- plus 9%, which is very good and driven again by customer loyalty programs, driven too by the retail sales, which have very strong growth in Turkey and Poland. And this is generating 2-digit growth, and we're gaining market share in pretty much all our markets and in pretty much all our categories. And also in Central Europe, we have growth in online sales. One point of attention is the constant volatility of the currencies in Turkey in particular and you've seen in Vincent's table.Now if we cross the Atlantic and go to North America, here, I'm using North America to talk about the tension that exists in the distribution sector. Now I won't go over the whole story, but the constant growth of the Internet sales, Amazon and others and the pressure they're putting on services and prices across the whole distribution sector, is having a very strong impact on our promotional tension and on the competition as well. And we're seeing this too in France and in Western Europe and also in Central and Eastern Europe and Russia and of course, above all, in the U.S. And we are seeing this with the promotional tension and also destocking and even shutting down of some of our stores. I was talking with one of our customers this morning, who is one of our great specialists in the U.S., is announcing a reduction of head count by 7% because a -- of a half year results down 7 percentage points compared to last year. Now these are phenomena which are there, very clearly obvious in the U.S. because of the weight of Amazon, and we are having to cope with that.Now right now, we're in the eye of the hurricane, and eye of the storm in this respect. Now the good news for us in North America is that we've managed to stabilize sales growth in the U.S. and Canada. We are putting the 2 together because in U.S. and Canada, we have good Cookware performance driven by our core business of Tefal but also by our own client in the U.S. and also Lagostina in Canada.We're suffering in linen care, which in the U.S. was the major part of our SDA business there. And it's a difficult market but also because we're going through a transitional phase. Things will be better in the U.S. in the second half, but this first half has been somewhat sensitive in linen care. And then we also have a currency effect that's positive, however, between dollar and euro, which explains the difference between the performance on constant exchange rates.But Latin America, strong growth of sales with a strong acceleration in Q2. It's Brazil that is driving this between good and a bad year. You see in the first half of plus 12% and the second at 19.9. Here, there's a very strong base effect. Let me remind you that in the second quarter of last year, there was a 3-week strike of transformers and it was a very difficult year last year. Now we must -- they expect some of the base effects still being felt in the Q2. I don't know quite how we should be drawing the line here, but it's maybe up and down.Now certainly things are doing better in Brazil and where we've recovered strong growth dynamic in several categories, in fans, which is our core business but also on blenders and cookware and kitchenware, appliances and so on, which are going to be seeing very visibly improved figures already this year. So the Brazilian business is doing well. It's healthier and in a very tense context in terms of the competitive aggressiveness with very strong aggressive local competitors. But we are nevertheless very satisfied with the recovery of the dynamic of our sales, but we're keeping an eye open on margins and pricing.Another country that is significant for us is China. In China, we have a growth of the order of 12.8% for the first half. And this is a market, which is increasingly driven by e-commerce. And e-commerce is increasingly driven by one-off promotional expense 18th of [indiscernible] the Chinese New Year and so on and so forth. And this is pushing hard on the promotional business. It's something that we are nevertheless able to master, but it does create a certain volatility in the market. These are markets that are nevertheless very dynamic, and we have a performance of between 12% and 13% which is very interesting in Q2, I mean -- and plus 30% in fact.And we have a very balanced portfolio of course. We have new categories, which are strongly growing like the water purifiers, extractor hoods and so on, kitchen equipment. But in the traditional categories like woks and frying pans, saucepans and pressure cookers or new categories such as mugs and conservation boxes, all these are doing very well with a very strong dynamic in our core business. And we have some flagship products such as blenders, especially the high-speed blenders, which are selling extremely well; and also with health pots for special herbal teas and so on. So we're doing very well, and we are very happy with the Chinese performance and with performance that is constantly improving.In the other Asian countries, well, there is some good news and there's some not-so-good news. We have quarterly sales on a like-for-like basis following a slightly downward turn in Q2. In Japan, it's the fifth country in the group, plus 5% like for like in first half with the flagship products such as cookware, kettles but also new categories, the creases; the Cook4me, which is the Japanese version of Cookeo. And this is all performing very well. And we shouldn't also forget our own directly operated store network, which is also doing very well. We've opened 4 more stores in first half to a total of 33 now. So Japan is very robust there.We also have South Korea, which has a disappointing first half with the sales down compared to the previous year, very bad month of June with strong commercial tension also between Korea and Japan, and this is having a full-on effect on consumers who are tending to spend less. We don't have a sufficient stand-back view of all of this because it's more of a wait-and-see attitude right now. We'll probably see things clearer by the end of the year. But our teams are already working on the necessary plans to be able to cope with this situation both in terms of sales and their consequences on profits.But then another good country is Australia. It's the 25th country in the group, so small. But nevertheless, after a difficult commercial period last year, we have been picking up in distribution and we're picking up accounts with key distributors and also with a strong plus 6% performance. In other countries, things are doing well. Some disappointment in Vietnam and Singapore but other countries are doing well.And let me finish with this general overview with a quick overview of our professional ware. And here, just to remind you that in the Professional sector, we have professional coffee machines, 90% of the business and 10% is services to hotels driven by WMF. Now there's a very strong dynamic in professional coffee in the first half. Now with 2018, which admittedly was rather modest because in the second half of 2018 we saw the big contracts arriving for Dunkin' Donuts and so on and -- but here, too, we have a quarter that is benefiting from those big contracts that will not be seen in the second half. So there's a base effect, which is very positive of course for this half and which will be negative in the second half if I'm not getting all mixed up. But yes, then that is correct. And it's driven by several markets, the U.S., China and other Asian countries and with a family -- a local shop market, which is doing well and which [indiscernible] for the big contracts.Wilbur Curtis, I've already mentioned that. The integration there is doing well. Sales are in line with our expectations. And for hotel equipment, also good growth in the first half, in line with expectations. There we are.

[Thierry de La Tour d'Artaise, Chairman & CEO]

Thank you, Stanislas. I'll just say a few words about the products now. We look at the product lines. There are 2 things to say. Linen care is down 1.8%, and you have steamers as well. We are moving towards the steamer market, which gradually will be taking over and ramping up. For the moment, the market is slightly down.Another comment is that all of the other activities are up or in growth with, in addition, domestic comfort which our vacuum cleaners is very strongly up because we are developing -- and fans, El Niño. This is a very hot air fan, whereas in Brazil, there are very strong winds. It's the little sister of La Niña, but now it's El Niño.Now housekeeping, very strongly up, which is a lot of growth on the vacuum cleaners. That's doing very well and has been doing well for 4 years. A few new products, the Steam'Up, which you might have seen we just kicked that off. Now Steam'Up is a category of steam cookers, a very healthy way of cooking and good. So the steam is going the other way around. We have it go down, which enables us to keep the goodness and the taste of the food in a better way. Now this has received the Janus de L'Industrie. It's a very product -- it's a very easy product to use, and we hope this is going to kick off a category, which had been slightly down in the past year.Now vacuum cleaners with the Air Flex (sic) [ Air Force Flex ], we have flexible, versatile vacuum cleaners with the advantage is that this is much more autonomy, a lot quieter, a lot more powerful than everything else on the market today. So we're counting on this product to continue to develop our presence in this segment of versatile vacuum cleaners, which are developing very strongly. We are already leaders in the other types of vacuum cleaners, but here, we are far behind our competitors. But we are not likely to despair with a product like this.Now the third product is a coffee maker. This does Turkish coffee. In Turkey, as you know, you don't drink coffee. You eat it. So this is a habit of the population. We wanted to have one because it doesn't concern only Turkey. There's nothing to say, in our business, we need to adapt wherever we are. And we bought -- sold products that people want. And the second point, it's a product that is designed by our technical teams based in Istanbul with subcontractors and a very big industry that's been there forever in Turkey. There's big players such as Arcelik and others. So there's real local skills, which makes it possible to have a very good product manufactured in Turkey and sold in Turkey, which makes it possible to benefit from local skills. But also you have a lower cost in production in Turkey than in other countries where currencies tend to be volatile and can go down. Since this local competition is harder to raise prices when there's a change in external currency, so it's better to be local for local and have costs that are local.The next product. This is an example of a rice cooker. Now this product is interesting. It's sold not only in China but elsewhere, but it takes care -- doing healthy cooking by strongly reducing the diameter. This is increasingly a problem in China and the pressure on the Chinese market. Now -- we used to be selling these at EUR 50. Now it's EUR 150. There's a trade-up, which is continuing to contribute to growth, and we have a lot of hopes in China for our sales. It'll be sold for roughly EUR 150.We are continuing to develop a big activity for us in Cookware. Our competitors are generally -- we think they're complementary because have a new product line here, All-Clad. It sold roughly [ 100 ] for the 5 covers and pans. It's a very good activity in the U.S. These are manufactured in Canonsburg in Pennsylvania, made in U.S.A.

[Vincent Leonard, Senior Executive Vice President of Finance]

Now going back to the P&L with the ORfA bridge. No surprises there, a lot -- a big favorable impact on the growth in sales. The volumes are very strongly up, EUR 56 million in ORfA. The price mix favorable to the tune of EUR 25 million. That's due to the price mix. Now this is -- this compensates, in fact, the increases in cost of sales and currency effects, EUR 18 million and EUR 5 million, very moderate currency effect.We continue to invest as a percentage of sales -- investments in percentage of sale in growth drivers and SG&A, which represents a lot of retail investments in terms of administration and comm expenses in various markets. So these investments are -- appear here. And a small scope of -- a like-for-like effect, a scope effect due to Wilbur Curtis and Egypt and also this IFRS 16 effect. So the first effect of that, which we talked about several times, was -- and that effect stands at EUR 4 million.As to the growth drivers are in line with the increases in sales, up 8% whether it be in R&D, marketing and strategy, what we call innovation and marketing. So we are not -- we're keeping our foot to the pedal.In terms of operating profit, operating results and activity not much to say. Other operating income and expense, 2 little things. It's quite fragmentary. We have in there costs linked to the acquisition of Wilbur Curtis and some costs linked with Egypt. Nothing significant that is worth going into detail about. So for an operating profit, up by 14.5% standing at EUR 213 million. In terms of net profit, there's an interest cost that goes from EUR 16 million to EUR 21 million. Here, we have mainly the recognition of financial interest in IFRS 16 retreatment for -- to the tune of EUR 7 million, which means that our interest expenses are actually down if you consider the rest of it. And other financial expense, this also up by EUR 5 million. We include in here the fair value of ORNAE, which half yearly is some EUR 8 million, which is unfavorable. So it was EUR 2 million favorable in the same semester last year, so it's a swing of EUR 10 million. And other financial expenditures, other than fair value for ORNAE are down. I hope that's clear.Tax, EUR 40 million, which is in fact the rate that we used to protect the cash tax cost over the year, 24%. I think that's roughly what we should be landing at. A little bit of volatility but there's also noncontrolling interest. So this reflects the excellent performance.Our net profit is significantly up under the effect, first of all, of IFRS 16, which we see here in immobilized assets for EUR 150 million and in debt for the same amount and the consolidation of Wilbur Curtis, which represents some EUR 100 million, I think, of immobilized assets. That's about it. Otherwise, it's business as usual in CapEx, recurring CapEx. So these are the big changes.And this balance sheet, with respect to net debt, here we are comparing net debt to the end of 2018, so we are feeling the full seasonal effect compared to the -- what Thierry was presenting earlier. What should we note? Well, perhaps the investments, we talked at the beginning of the year that we would have in 2019 and also to a lesser extent in 2020, we'll have increased in the level of investments a bit higher than the usual level of investment, is maybe 3% of sales usually from 1 year to the next. This year, we will stand below 4% and in any case above 3%. So the investments are slightly up compared to last year. But that's really the capacity to ramp up in China. And also in Professional Coffee, there's investments in [Ponte Vecchio and regular ].In China, these are also large kitchen appliances in VMF and our historical activities. The working capital requirement is strongly up. We are not -- to be honest, we are not perfectly happy with that. That's not what we are expecting. We mainly have work to do on outstanding customer debt and the recovery of customer debt. At the end of June, we have several delayed payments that we're working on. This is not a source of concern but we have to go after it. And a mix of -- business mix, which is a bit unfavorable due to the fact that the MCP is growing on big deals, where we generally have more unfavorable payment terms that penalizes us here. The increase in South America which has long-term payments, so it's hardening basically of trading conditions with our customers.We have a lot of work to do on that. We have action plans to get back to a normal situation by the end of the year. And we have other operations, increase of debt other than operating. We have -- here we include the acquisition of Wilbur Curtis. And IFRS 16 here again does have an increase of some EUR 382 million on debt.The next page. Since we're not happy about our WCR as of 30th of June, we wanted to console ourselves by the chart at the top which represents our performance over 10 years. As you can see, we have had some great change. We're working on it and working hard on it as always even if that is not quite what we wanted or it's not quite as good as in 2018. But we have some work to do on that, and our teams are mobilized in that respect. And our famous net debt-to-equity ratio, adjusted ratio, you can see that other than IFRS 16, this is improving to 2.4 as it stands at the end of June.

[Thierry de La Tour d'Artaise, Chairman & CEO]

So now a couple of words about our guidance. No big change in terms of the environment as we've seen. It's somewhat more favorable than envisaged originally. And this will avoid unnecessary price rise, which is a good thing in the present context, and a very complex environment because of the geopolitical tensions and also in particular, by the disruption of classic distribution. And this won't be changing in the coming months.So in this context, we're expecting an organic growth above 7% for '19, looking at the figures of this first half, and then based on the currency exchange compared to 2018, which was very demanding, because may I remind you that a lot of the results of last year, EUR 487 million, there was EUR 208 million in the first half. And then, it's, all of a sudden, EUR 675 million for the full year. So a very strong impact on the second half. But also because of our intention to continue to strongly invest in our growth drivers because we like having this strong growth, and remember that last year, we said that we would be looking at these strong growth drivers, and we're continuing to massively invest. And we are expecting increase in operating results from activity and ORfA of the order of 6%. So much for what we wanted to say. We managed to keep it under an hour, and now we're here to answer any questions you may have. Are there any mics around? Yes, there they are. There's one over there. So who wants to start? Well, big surprise.

[Nicolas Langlet, Research Analyst]

Nicolas Langlet, Exane BNP Paribas. I have 3 questions. The first, concerning France. In your budget, what is your assumption for the H2 because of the relatively favorable base for the first half? And the second question, of the EUR 18 million rise in COGS, you talked about reduction in the European side. So could you tell us what you're expecting in H2? And the third question, concerning China and the use of your cash there because you ended 2018 with EUR 500 million in net cash. Of course, you have some CapEx, but your cash position is going to continue to grow in the coming years. What do you intend to do with it? Do you have any potential acquisition projects? Or is it just pursuing organic growth? Or do you intend to pay some of that cash back to the local investors?

[Stanislas De Gramont, Chief Operating Officer]

Well, concerning France, we're stabilized in the first half. We're in line with our road map, and we're expecting a second half which is going to be positive in terms of sales with the recovery of growth, which isn't going to be brilliant compared to the full 2-year period but nevertheless compensating the base effect of 2018. And there's some concentration on margins with respect to what we've been aiming for over the last 3 to 4 quarters. So the situation is improved. It's stabilized. The good surprise is the SDA positioning. The bad surprise is the Cookware, which is down. And we are smiling a bit more, not as much as we would like to be if we were fully optimistic, but we're on the way.

[Vincent Leonard, Senior Executive Vice President of Finance]

Now concerning our production sites. Yes, in the first half, we have a level of activity which was relatively low in a number of European sites. And obviously this weighs on our unit cost. We mentioned linen care, which is a declining category, and there's -- we're selling less of these products in Europe. We also talked about Cookware, Cookware in France. And obviously, this does have an impact on our level of activity in our European plants. Now in the second half, we're not expecting the same level of underactivity. So to simplify my answer, I should say we're expecting improved situation.

[Nicolas Langlet, Research Analyst]

But in the 6 million, you said that the weight of the raw materials is stable, the commodities?

[Vincent Leonard, Senior Executive Vice President of Finance]

Well, yes, for the year, we're expecting it also to be neutral. So contrary to what we are seeing at the beginning of the year, in view of what we could see at the time and also because of the changes in commodity costs since then, we are not expecting an unfavorable effect in terms of commodities for the year. We reckon that it's going to be basically neutral.Now concerning China. Well, indeed, the Supor is generating a lot of cash, which is excellent news. The second very good news is that we are -- we can freely bring the cash back. We're distributing dividends every year and in recent years, twice a year and with a payout level which is high. So yes, we do have cash in China. And as you say, yes, it could may be used, as you mentioned, for some local acquisitions. Some time ago, we had approved the use of a share buyback tool because we thought that this could also be one way of using the cash. Now we've set the share price or the seeding price based on local regulations, which was -- exceeded the very next day. So we never activated the program, but it is a possibility. So there is no real concern with the cash in China because we can always bring at low cost because we only pay 5% of the withholding tax on this cash.

[Thierry de La Tour d'Artaise, Chairman & CEO]

Yes. And also in terms of invested cash, the terms are much higher, much better than in Europe because I think it's in the order of 3%. So we get more from our invested cash than from other sources. But yes, as we said a moment ago that we're going to have some big industrial investments to undertake. And contrary to what we've mentioned in 2006 when we acquired Supor, we were going at the time which was the idea, it was developing the Chinese market, which is what we've done because we've gone EUR 100 million to EUR 1.8 billion. But you see also that we've been using the Supor manufacturing possibility to bring in-house into Supor. And the Supor plants in Shaoxing in particular produce all the kettles and the coffee machines of the group and all the toasters and all the fryers, deep fry, so we have significantly increased our industrial investments. Because clearly, when you produce 15 million kettles in a plant, you get better production costs in particular when you're buying very strategic components the -- like the regular coating for them. And we are continuing to invest in this way, and we are bringing in-house more and more families. And we're also developing local marketing. And we've also this year decided to start production of all of our last kitchen appliances that we've been sourcing until now, and Supor will also be taking these on board. We started subcontracting because we were reckoning that Supor didn't have a lot of innovation capacity. But now we are bringing it in-house because we are seeing now tremendous possibilities of innovation and with very strong investment, industrial investment in China, and possibly later in other Southeast Asian countries where Supor is present now. And then of course, you never know, there could be some acquisitions. But that is somewhere in the pipeline.Any other questions? One in the second row here on my left.

[Unknown Analyst]

A question on WMF consumer. Could there be a risk in terms of the goodwill that you have there?

[Thierry de La Tour d'Artaise, Chairman & CEO]

The answer is no. Well, I should let the CFO answer this. But sorry, my no was too clear-cut.

[Vincent Leonard, Senior Executive Vice President of Finance]

No, no. It was very clear. It was -- as the CFO, it was indeed a no. Yes, WMF consumer is in UGT that is producing a lot of cash. Professional coffee machine is in a separate entity.

[Charles-Louis Scotti]

Charles-Louis Scotti, Cheuvreaux. Three questions. First could you give us the spread between volume and price in your organic growth in the first half and also give us the weight of the loyalty programs? Second question on China, how do you explain the slowdown in organic growth between -- since Q4 2018? And the third question concerning the professional coffee machines, are you gaining market share in this activity? You talked about increasing R&D expenses, could we maybe expect automatic machines for consumer applications?

[Vincent Leonard, Senior Executive Vice President of Finance]

Well, let me take the price volume aspect. Well, in terms of price volume, it is essentially a question of volume. To simplify, it's 80/20. And then by price, I mean the price/mix. Yes, it is the price/mix. Does that answer your question?

[Charles-Louis Scotti]

Well, we seem to understand each other. So that's the main thing. Well, at least there's 2 of them, but there are others who've seemed to have said yes.

[Thierry de La Tour d'Artaise, Chairman & CEO]

Okay. Now for the loyalty programs, you may remember that 2018 was a sort of a low-trough year. But in 2019, we're picking up and going back to the same level as we had in the years before that's still in H1. This is significantly contributing to our growth, almost 1 percentage point of our growth is to the loyalty programs especially in Europe.

[Charles-Louis Scotti]

What can we say about China?

[Thierry de La Tour d'Artaise, Chairman & CEO]

Well, we often said that we shouldn't dream that trees don't always grow in the sky. And that we didn't feel the 25% growth will be sustained over the long term. But we did believe, nevertheless, in a 2-digit growth on a lasting way, but with figure that was not multiplied by 2. But one of the reasons which we are now seeing growth at around 15 rather than 25 is that for 2 or 3 years, we've had 100% of the growth coming from online. And it's online that has been eating up that growth. Now we've come to a rate of online between marketplace and direct sales online which is absolutely huge. And I guess that by definition classic distribution is in a resistance position and will experience less growth.Secondly, I believe that the repeated operations of 11/11 and now in June because you have the equivalent in June. And then with such degraded margin levels that some players, including ourselves, have decided to not stay with it because some competitors in China are going too far in reducing their margins. And this year, we have clearly chosen not to go down that path. As we say that cash is reality for us. And there is a time when people are just doing crazy things. In particular, some of the big competitors in China who are sometimes pushing things too far, we will not follow. We have chosen not to follow. Now obviously we're observing the situation. But I think there comes a time when we need to have a lower growth but preserve margins that make it possible to continue to invest. So that's the main reason. But in the long term, well, we're absolutely convinced that China is going to experience strong growth because, as we've said, the trade-up in the mature parts of China but new categories also that we now have with last kitchen appliances and the new categories in terms of vacuum cleaners. And the third point of course is the opening into the -- into China where -- I mean there's almost nothing to be competitive within product. So we sell between the Western China and the Eastern China, it's 2 different worlds. And so the trade-up starts in the mature area region today, in the West. But as the middle class rises and spreads, we will be seeing this positive development, but I would say in 2-digit figures, but the way the first digit is a 1. Now yes, we will continue to invest massively both in R&D but also in terms of our service teams because it is a market where -- what the key element is reliability. When you have a merchant called Dunkin' Donuts or Starbucks, the price of the machine isn't so important, but the reliability of the machine is absolutely fundamental. And so now for the last 2 years, I think we mentioned this before, we're developing the connection of our machines so that we can have preventive maintenance programs where you have all the machine data, and this makes it possible to intervene before breakdowns on our strategic components. And this, of course, is generating a lot of R&D. And it means a lot of people in the field looking after the machines. So yes, we are gaining market share for all the markets where we're present. I am trying to think is there one may be where we're losing, I really don't see. No, I don't think so. Even in Germany, we are gaining market share. In Switzerland, too, not a lot but we are gaining. In the U.K., we're gaining. I think pretty much in all markets, and we shall continue to invest massively in particular in professional coffee that we believe very strongly.And then as for the full automatic consumer mat under the WMF brand, well, obviously, it's going to come but it's going to take time because the WMF brand is an extraordinary brand. And if we want to sell espresso -- fully automatic espresso machines under the WMF, it's not going to be below EUR 1,500 or EUR 1,800. And so they have to be perfect, and so our professional coffee teams in WMF based in Geislingen and the consumer based in Mayen have to work together to find a common project there.And these would be machines that will be both consumer and could be also used in some professional channels. You don't necessarily have to consume 2,000 cups of professional coffee a day. No, I mean even in a lawyer's office, you're drinking only 15 coffees a day. But unless you got a lot, a lot of clients, but well, that's interesting. Does that answer your question? There are 2 here. Madam, I think you had your hand up first.

[Unknown Analyst]

Societe Generale. Could you help us a little bit about the impact on the ORfA? And the second point, could you go into the effects of pressure around prices for the distributors? How does that materialize? These purchasing groups that pressure you, is it impact on the margin? Is it impact on working capital? How do you -- what's your response going to be? What's your strategy? And you were talking about the success of cooking robots launched by Lidl. What impact does that have on the sector?

[Vincent Leonard, Senior Executive Vice President of Finance]

About currency, Thierry spoke about that earlier. We remain more or less on the estimates and the forecasts that we had talked about at the beginning of the year. We talked about EUR 20 million, EUR 25 million. We're sticking with that, which since the beginning of the year however what's occurred is that the dollar, in particular, continues to get stronger, which is not good for us. However, on the contrary, a lot of emerging currencies, even if they are weaker in the first half year than last year, they're actually getting better as well which is favorable. Nonetheless, we are very cautious about this because it's very volatile from 1 week to the next. You can see the figures moving all the time.And also the improvement from emerging currencies are by definition, volatile. In addition to that, important movements in currencies from emerging countries, as you know, we talk about it often. We have the possibility, and we're used to passing those on to the market very quickly. When the ruble goes up or down, if it's down, it means we increase prices; if it goes up, we're going to be doing promotions, very short term. So we don't keep them very long. We don't keep the products long. So a slight improvement we're observing overall since the beginning of the year, we consider that this is negligible. And we are staying with our estimates from the beginning of the year. It's subtle, the movements of the ruble. I think it's not obvious. Do you want me to redo it? I think we should have another look at it.When the ruble goes down to preserve our margins because our costs are generally in dollars or in yuan, locally we have to increase prices. And the other way around, when the ruble goes up, our customers will ask us, give me back my money. So we'll have to -- it doesn't -- we don't really lower their prices, but we do a lot, many more promotions. That's a good transition.

[Stanislas De Gramont, Chief Operating Officer]

You're asking a very simple question, and I think a lot of people share that question in food and retail and a lot of products and so forth. Now your question was in what is the tension created by retail materialize in our margins, what are the mechanical effects that influence those margins? I'd like to consider this perhaps in 3 levels. The first level are trail terms. [indiscernible] that these are 2 customers, they get together to buy together. And they're saying, okay, I bought 10, he bought 6, we're going to buy 16. What can you give me if we buy 16 instead of 10 and 6? Well, this is more -- well, it's kind of a French impact even if we see the European purchasing centers. But we see the impact of that. Doubtless there is an impact, a one-shot impact, maybe in 1 or 2 years, maybe some brands get together, but these are controlled. They're under control, and it creates a tension, but it's not really significant.Either -- neither on the scale of the group nor every country. There's also a phenomenon that the intensification of pressure on the part of competition, which is characterized by promotions. When a competitor decides to increase their market share artificially on a given product line, they're going to be running 25% off rather than 20% off. And when yesterday you had the catalog, undoubtedly, today, everything is in Amazon, you have a price that is 25% down but then only went 20% down. So you have a choice, either you align with the discount, other promotional discount, so you spend more to get more market share, or you don't align and you lose your market share.So that's what Thierry was describing when he was explaining the trade-off and making that choice between market share and margin in activities such as the 18th of June. We did 26% growth on the 18th of June in China on our sellout sales. So things are doing well. Thank you. But we only did 26% growth. Others, we might have done -- others usually might have done 30% or 40%. So the intentional in promotion is a factor of your health and your own category, your market share, the strength of your margins, you have to factor it's a new brand, the relative weight of your market share compared to competitors and so forth.And the third factor that influences prices, which is the hardest one to get control over, is the influence of pure player onliners. Yesterday, 5 years ago and 10 years ago, when you had a price you're fighting over, when Carrefour was doing a price, okay, let's say EUR 25 for a frying pan. Auchan was at EUR 30. Auchan would go down to EUR 25, and Leclerc would go to EUR 25. And this happened in a week, 3 weeks, 10 weeks, depending on their activity. Today, the price posted on Amazon anywhere in Europe is visible throughout Europe. So if you have a filter coffee unit which is sold in EUR 29.99 at Amazon in France, the same product is sold EUR 19.99 at Amazon in Portugal or in Poland, Amazon France is going to align their prices automatically. They're going to automatically issue a discount for Serb or for Italy or whatever. So they'll set the same price. We don't pay every time because otherwise we go bankrupt. But -- so it does create a tension on prices. And so it has double tension both on price management and comparability of prices throughout Europe. And on the other hand, the promotional intensity with competitors that choose to invest or to overinvest and price discounts on a one-off basis. So what do we do to handle this? First of all, we steer this very closely. We steer our promotions very closely, the promotions that do generate volume and value. There are other promotions that don't generate much volume, so we tend not to do those. We also control -- or have a certain level of control when steering price discipline. In other words, we make sure that the products are sold by us because we can't control reseller prices, comparable or identical prices, in all countries in Europe. And especially we're also controlling the renewal and ramping up of our product ranges, which makes it possible for us to run forward in the promotional war and the price war. We showed you the Air Force 560, we launched 560 6 months ago. The 460 a year ago and the 560 in March this year, and we have the 760 coming in, in the fourth quarter this year and others will be coming in future years. So what do we do? We launch a product. We establish it. The product gets into promotions, and we fight on it for prices. So we increase our promotional investments. Then the next product will be positioned higher in price, which makes it possible for us to manage that price/mix. So that's why when you talk about price/mix, I laughed because is it the price, or is it the mix? Well, it's a little bit of both. And behind that, we try to steer our margins to control our margins to having a very fine-tuned comprehension country-by-country, product-by-product based on volume drivers and price drivers.Sorry but I'm trying to do it simple. Life is simple. That's everyday life. Lidl. Well, Lidl's robot, for those of you who don't keep up on this, they sold a heating robot at EUR 299, I think, under their own brand. And we did a campaign for public relations, a very intense campaign, and we ran out of stock after 72 hours. And today, customers are kind of unhappy by this product. That's their product, I'm sorry. We have a heating robot called the Cuisine Companion from Moulinex, EUR 599 or EUR 1,099 depending on what equipment you actually get and accessories you get with the product. So reselling of those products in France, the sales are plus 15% compared to last year.So we're following that with great interest because when somebody shows up in the market with a product like that, with an offer like that, necessarily you need to learn things. But for the moment, we haven't been unduly affected. We continue to be impacted every time they launch something for a few days. We should loan them our engineers.In the back.

[Steve Levy, Analyst]

Steve Levy, MainFirst. 3 questions about PCM, MCP. Do you have a vision about H2 in terms of the probability of having new deals? I know you're not going to give us indications, jumbo deals, jumbo deals. Are you relatively confident about H2? About WCR, do you do deconsolidating factoring in the second half year and with the sequencing with respect to last year? Third question is about your own stores. What about the stores? Is it real to open more stores or to have many showrooms in countries where you're not yet open?

[Thierry de La Tour d'Artaise, Chairman & CEO]

About the MCP -- about PCM, it was plus 20, which was translated into a big contract in the second half year, and this is significant. So we should be in a slight growth situation because if we have growth in our average customers in 2019. And 2018 was a year where we had very strong -- small H1 and a big H2, and now we have a big H1 and maybe an H2 that won't be as big. So it's a big growth compared to H1 last year, which is pretty good because it was good growth last year. So I should -- so I can say that. Does that answer your question? Second question is WCR. That's for you. The answer is yes, we do some factoring, some EUR 80 million in factoring.This is off mic.

[Vincent Leonard, Senior Executive Vice President of Finance]

Well, yes. The levels we experienced in the past, it's down compared to December, EUR 80 million. But the interpreter is sorry, we didn't hear the question which wasn't asked into the mic.

[Stanislas De Gramont, Chief Operating Officer]

So in terms of our own stores, WMF in Germany, we have -- and in Switzerland and Austria, we have a store that is halfway between a showroom and a retail store, and we can expect margin levels of between 3% and 4%. There's a second level, which is Home & Cook, Tefal, Rowenta, which sells all of the SEB Group products, which now present in some 30 countries. And this is a very dynamic network, and it's profitable. It's a network where the first replacement is in outlets, in brand outlets and with tremendous profitability. Each time there's an outlet village opens, we're there. And we're in the top 3 of the yields in per square meter in outlet villages. And that means that we are aiming for that, but not only, we also have high-street formats in malls and normal commercial centers. And there, too, we found the right key for profitability. And we do want to accelerate the installation in countries like in Japan, Poland, for example, countries where we see a real opportunity for profitable growth of our revenues.Fourth point that I wanted to mention is in Japan, we have 12% of our sales in retail. And you can see that once you overshoot that threshold, you get a much stronger and longer-lasting growth, where you get that aspect, where the development of the brand is supported by retail.Supor have some 800 franchise points-of-sale where they can present products in small cities of 1 million to 2 million inhabitants in China. They've got some 800 stores. Yes, these are villages after all, aren't they? Yes, small, backwards villages with 2 million inhabitants. But yes, Supor is going to be seeking to develop their own stores. And then of course, we are -- have over 50 million consumers who are coming into our stores every year. And we have 500 million people who pass by these stores. And they've all got smartphones and telefaxes, and so the temptation to studying the possibility of retailing with this piece either physically or digitally is certainly growing. And this is B2C online.

[Unknown Analyst]

Two questions if I may. Could you come back to the slowdown in Cookware in Europe? Do you have the impression that in France it is properly covered by the group? And is it a cyclical effect? Or is it a problem with innovation? Is this an issue for the group in terms of its markets? And secondly, on your growth drivers in H2, what are they going to be? Is it going to be advertising or store efforts?

[Stanislas De Gramont, Chief Operating Officer]

Well, for Cookware, this is a distinctly French phenomenon. The market is down in France. In other words, it's good in volume but is slow in value. When you have this in particular, independent supermarket chains that has a negative impact on the market in terms of value. As I've said, we did a huge operation for the recycling of -- titled Tefal thanks you, and this has doubled our sales. So this is rather good. We don't have any particular worries for Cookware articles in France in the long term and certainly not in Europe. It is a dynamic market. But the weight of the loyalty programs is growing. And of course, the fact is that this covers several million euros and cover more one-shot operations and also very cyclical, which creates a volatility in our figures.

[Thierry de La Tour d'Artaise, Chairman & CEO]

Because the year when you have such a program, it's doing well, and then when you don't have them, well, it's down. But what we need to understand is at the group level, it is overall a relatively stable mass, representing pretty much the same percentage in revenue. But it does create volatility, significant volatility from 1 country to the next and from 1 year to the next. But with Cookware, it is a business which is profitable and where we have market share that is very strong. So we're not at all worried. About the sustainability of the product, there'll be lots of [ MDDs ] in Cookware, but there will still be plenty of room for big brands such as Tefal, where -- which has a very strong market share in France as you can imagine.

[Stanislas De Gramont, Chief Operating Officer]

Yes. And we also have very strong market positions in the U.S. as well, but all our Cookware brands are very strong.

[Unknown Analyst]

Now what about the growth drivers?

[Vincent Leonard, Senior Executive Vice President of Finance]

Well, Thierry was referring to this earlier. Towards the end of last year, the second half of last year, in the context that was rather tense, we had moderated our efforts and invested less than in previous years in the second half. And the second half was down compared to the first half also in growth drivers for sales and particularly in sales percentage.But that is not our intention this year. So in H2, we are expecting growth driver investments exceeding those of last year coming back to more normal line compared to past years. And in terms of mix, media versus other investments. Well, it really is both in second half because we've got some innovation. So you get media -- quite a lot of media in H2. But we've seen in recent years too, we're strengthening our positions in the store. So my answer will be we're aiming for both. The mix is not going to be changing between media, and other growth drivers is going to be changing.No. Well, simply the only shift really going to be towards more digital. I mean digital is 46% of our investments anyway. So this sales direct to consumers via digital is our main effort for investment. And then we'll see how we adapt as we go.

[Thierry de La Tour d'Artaise, Chairman & CEO]

Are there any other questions? Everything is fine for you gentlemen, ladies? If not -- if there's nothing, it will be 2 more minutes, it's going to be 4:00, so don't worry. But otherwise, we can stop here. Thank you very much, and we'll see you for our annual accounts in this format and of course over the phone for the quarterly results. [Statements in English on this transcript were spoken by an interpreter present on the live call.]