AMP Limited

Good afternoon. This is the Corusco conference operator. Welcome and thank you for joining the Amplifon first quarter 2024 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, Madam.

Thank you. Good afternoon and welcome to Amplifon's conference call on first quarter 2024 results. Before we start, a few logistic comments. Earlier today, we issued a press release related to our results, and this presentation is posted on our website in the investor section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release. I have to bring your attention to the disclaimer of slide two, as some of the statements made during this call may be considered forward-looking statements. With that, I am now pleased to turn the call over to Amplifon CO Enrico Vita.

Thank you, Francesca, and good afternoon, everyone, and thank you for joining us today. I'm pleased to comment on a simply excellent report. Definitely the best way to start 2024. I'm very happy not only for our financials, but also because we see the results of all the hard work we did last year in response to a market demand which in Europe, as you know, was weaker than expected. The further good news is that at last in Europe, in Q1, the market demand finally seems to have started to normalize and it was back to growth. We estimate something in the region of plus 1%. Also, it is important to remark that this growth was impacted by the early Easter of this year compared to last year when the Easter occurred in April. Obviously, we will have a benefit in April of this year for the same reason, but I will come back to this at the end when we talk about the outlook. So let's immediately review some of the quarter's key numbers and achievements together. Revenues were up circa 9% at constant exchange rates and circa 6% at current exchange rates. The composition of the growth was excellent. And in fact, the organic growth was at a remarkable of 5.6%, especially considering what I said about the early Easter. In addition to the usual mention of our performance in the Americas, today I would like to highlight our performance also in Asia Pacific, which delivered circa 9% of organic growth. The M&A contribution was also strong, at around 3% overall. accelerating further during this first quarter, also thanks to more targets willing to sell at attractive multiples for us. In particular, I would like to mention the continued growth of our directly operated stores network in the U.S., thanks to the recent acquisitions of two of our main franchisees. Today, we can count on a network of directly operated stores of nearly 400 stores. Hence, we are moving forward with conviction and at full speed in one of our strategic priorities. Regarding the EBITDA recurring, we delivered around 137 million euros thanks to a record margin increase of 100 business points versus 2023 while in absolute terms the increase was of circa 11 concerning profitability i wanted to mention again the apac result where we see and we are now reaping the fruits of all the work done over the past over the past month and where we now see the benefits of the full integration of bay audio Finally, we posted a net profit recurring of circa 36 million euros with a margin at 6.2%. As said, all in all, we are very happy about our results in this initial part of the year. And now I will hand it over to Gabriele to give you more information about our financials.

Thanks, Enrico, and good afternoon to everybody. Moving to chart number four, we have a quick look at the group financial performance in Q1, which, as already commented by Enrico, posted a truly excellent start to the year. In the quarter, revenue at constant effects increased by around 9% versus 2023, with a strong and above-market organic growth at 5.6%. Despite the negative impact of early Easter in March, which occurred last year in April, with one trading day less in the quarter, equivalent to circa 1.5% growth. The very tough comparison days, in fact, the revenues in Q1-23 were 9% higher than in Q1-22. And then the global market demand still driven by a strong U.S. market with Europe back to growth and progressively normalizing. M&A contribution from Bolton's, primarily in Uruguay, U.S. and China, strongly accelerated and was over 3%. FX was negative for 2.7%, primarily due to Argentine peso, US dollar, Australian dollar, and New Zealand dollar depreciation versus Europe. EBITDA recurring came in at circa 137 million euros. with a record margin of 23.9%, up 100 basis points versus 23, thanks to the field productivity measures successfully implemented in H2 2023. Moving to slide number five, we have a look at EMEA's strong performance. Revenue growth at constant effects was 4.3% versus 23, with a solid and above-market organic growth of circa 3%, despite the early Easter and the 130-day loss in the quarter. M&A contribution related to bolt-ons mainly in France and Germany was 1.4%. We posted solid growth across all core markets. EBITDA amounted to 109 million euros, up over 9% versus 23, with a record margin of 29.1%, up 130 basis points, thanks to the already mentioned field productivity measures significantly paying off. Moving to chart number six. We have a look at another outstanding performance of Americas, despite a very challenging comparison base with revenues in Q1-23 growing 20% versus Q1-22. Revenue growth in the quarter was over 20% at constant effects, with an excellent organic growth at around 13%. driven by a continued very strong performance in the U.S., especially miraculously our direct retail and Amplipon hearing healthcare. M&A contribution, primarily related to U.S. and Uruguay, was over 8%. The effects impact was minus 11.4%. Inflation accounting impacted less than 2 percentage points negatively on FX and positively on organic growth. EBITDA amounted to 26.2 million euros with margin at 23.7%, up 6% versus Q1-23, reflecting the business mix with a fast growth of miraculously direct retail, the integration of recent acquisition and the strong reinvestment in the business. Moving to slide seven, we have a look at Asia-Pac performance where we posted an excellent revenue growth as well as an outstanding profitability expansion. Revenues were up 13.5% at constant effect mainly driven by the outstanding organic growth reported across all main markets, and despite a very challenging comparison base. M&A contribution was 4.7% related to China, where today we count on over 410 points of sales. FX headwind was significant at over minus 5% due to the appreciation of Euro versus both Australian and New Zealand dollars. EBITDA reached 24.2 million euros, increasing by 11.2% compared to 2023, with margin at 28.1%, 80 leaps higher versus Q1 23, also after the very strong growth of China. Moving to slide number eight, we appreciate the Q1 profit and loss. In the quarter, total revenues increased by 6.1% to 573 million euros with a strong 5.6 organic growth versus Q1 23. EBITDA recurring came in at around €137 million, increasing circa 11% or over €13 million, with margin at all-time high level of 23.9%, 100 bps above Q1 2023, thanks to the field productivity measure taken in H2 last year. EBITDA reported was around 136 million euros, up around 20 million versus 23 after 1 million euro one-off costs. DNA, including PPA, was 71 million euros versus 62 million 23, increasing 9 million in light of the growing investments made during the last years in network, digital transformation, and innovation, leading the recurring EBIT to 66 versus 61 million euros in Q1 2023. Net financial expenses amounted to 14.4 million versus 11.9 million in Q1 last year, primarily due to the increase in interest rates on short-term and on the limited portion of long-term facilities at variable rates, since, as you know, most of our long-term debt is at fixed rates. The higher figurative interest expenses on network leases following the application of IFRS 16 the non-monetary negative impact of inflation accounting on the Argentinian subsidiary. Tax rate, as usually slightly higher in the first quarter versus the following quarters due to seasonality, posted a 10 basis point reduction versus 23, leading recurring net profit at around 36 million versus 35 last year. Moving to slide number nine, we appreciate the cash flow evolution. Operating cash flow before lease liabilities was in the period equal to 97 million euros, roughly in line with the 101 million euro level achieved last year. After repayment of lease liabilities, growing by 2 million, operating cash flow was equal to 67 million euros. At capex, increased by over 3 million to 30 million, leading free cash flow to over 37 million euros. Net cash out for M&A increased significantly, nearly doubling, to around 71 million euros versus 39 million last year, following the significant acceleration of bolt-on M&A primarily in France, Germany, Uruguay, the US, and China, with over 150 shops acquired in the quarter. NFT ended at $883 million versus $852 million at year-end 2023. Moving to slide 10, we have a look at the debt profile trend and key financial ratios. As mentioned, The net financial debt closed at 883 million, with the liquidity accounting for 215 million euros, short-term debt accounting for around 376 million, and medium-long-term debt accounting for around 721 million euros. Following the IFRS 16 application, lease liability amounted to around 507 million euros, leading the sum of net financial debt and lease liability to close 1.4 billion. Equity ended up at around 1.14 billion euros. Looking at financial ratios, net debt over EBITDA ended at 1.52 times stable versus December last year after the strong CapEx and Bolton M&A plan. Net debt over equity ended at 0.78 times. I would now hand over to Enrico for the outlook and the closing remarks.

Thank you, Gabriele. So we are at the end of today's presentation, which contains several very positive messages. First, the market demand in Europe is back to slight growth after several negative quarters. Second, our field productivity measures are delivering very strong results. Third, we are progressing fast and delivering on our strategic priorities. Hence, we are very pleased with our performance in Q1, a great quarter, which strengthens our confidence in a very positive 2024 even further. Finally, I wanted to share that April was a very strong tool up by a remarkable high teens, also thanks to the early Easter in March 2024. Regarding Q2, please also note that due to a very peculiar calendar situation in June, we will have five weekends in the month. So at the end, we will have only one more working day in the quarter than last year. We are therefore confirming with even more confidence our guidance communicated two months ago and say that all in all, let me say a strong set of good news for today. With this, I wanted to thank you all for your attention and we look forward to answering your questions. Francesca, over to you.

Thanks, Enrico. I kindly ask the operator to open today's Q&A session. Please kindly limit your questions to maximum two initially in order to give everybody the opportunity to ask questions. Now I turn the call over to Judith in order to open for the Q&A.

Thank you. This is the Coral School Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Nicola Storer with Kepler. Please go ahead.

Good afternoon. Thanks for taking my two questions. The first one is on growth in Europe. If you can share with us some comments by country, in particular referring to France and Germany apparently demand said that France is negative while Germany back to more reasonable growth. Can you confirm these numbers and elsewhere if you can comment also on other key markets for you? And the second question is on M&A. You have out the guidance for above 2% contribution. Considering the strong start to the year and the fact that in one quarter you already spend more than in the last three accumulated, do you think that maybe this above 2% could become easily above 3%? Thank you.

Thank you, Nicola, for your question. So with regard to the growth in Europe, let me say that, first of all, that the good news is that Europe was back to slight growth. uh which is in my opinion a good news in consideration of the fact that as we shared with you many times in the last quarters europe showed a negative performance in the last three four quarters in a row so the good news is that europe is back to growth and also In order to evaluate this growth, in my opinion, it's also important to take into consideration the fact that the early Easter effect, which is a major one in countries like France, like Italy, like Spain as well, of course. So these plus 1% that we estimate should be seen more as a plus 2%, plus 3% on a let me say, working base adjusted basis. And we see similar trends in basically all the different markets. I wouldn't mention any market which is more positive than others. And all of them in the region of plus 1%, I would say. So we do not see anything, any market which is performing clearly differently from the average. um with regards to the second part of the question and therefore the mna clearly we are very happy about our mna contribution in the first quarter definitely also in the second quarter as you know we have already completed the acquisition of another of our major franchises in the us so i would say I wouldn't say easily go above 3%, but definitely we are very – I wouldn't, but definitely we are confident about reaching something more than 2%, 3%. Perfect.

Thank you, and congratulations on results. Thank you.

The next question is from Robert Davis and Morgan Stanley. Please go ahead.

Thanks for taking my questions. My first one was just jumping into, I guess, the growth rate you've seen in the Americas. Can you give us a little bit more color what you're seeing from that region? What's sort of driving the strength and the growth? My second one was just on, you mentioned the benefits of some of the productivity measures you've taken last year. Can you just give us a bit more color on the phasing of those productivity benefits over the year, whether they're sort of front-end loaded, back-end loaded, equally weighted, et cetera? Those are my two questions. Thank you.

Thank you. Thank you so much for your questions. So with regards to the first part of the question and therefore our growth in the Americas, from a market point of view, in the first quarter, we have seen still a strong market growth in the U.S. According to HIA data, the U.S. market in the first quarter grew by about 10%. I would also take into consideration in this regard the fact that these are selling data, so they are less affected by the Easter, can be affected by product launches, by selling, stocking, etc. stocking in, and so on and so forth. But definitely we have seen a strong market in the U.S., which also coupled with our strong performance in our directly operated store network and also our amplifying healthcare were the main drivers of the growth in the region. With regards to the second part of the question and therefore the productivity measures, you know that I've been anticipating the fact that we were working on this since now some months. I am extremely happy to see that the work that we have done are now delivering stronger results. So I would expect similar benefit also going forward. Of course, this is not a guidance on the total EBITDA of the company because we might also decide to reinvest part or things like this. But definitely we are very happy about all the work that we did last year, which was... very well executed and which are now paying a very strong dividend.

Thank you. Could I just squeeze one follow-up in just around the strength in the APAC region? Some of the hearing aid manufacturers seem to say there is some softness in that region. I'd just be interested in what you're hearing on the ground within China specifically.

Well, there are no official figures about China. What I can tell you about the Asia-Pacific in general is that I am extremely happy about our performance. I think that in Australia, for example, we are growing definitely much faster than the markets. With regards to China, as I said, there are no official figures. We see a strong organic performance. we see a very strong organic performance in our business. I think that our strategy to move through a number of smaller acquisitions in the spot that we wanted with the right target, et cetera, et cetera, now, this kind of strategy is paying a very good dividend. Our performance in China from an organic viewpoint was very, very strong.

Great. Okay. Thank you. Those are all my questions. Thank you.

The next question is from Veronica Dubajova with Citi. Please go ahead.

Hi, guys. Good afternoon, and thank you for taking my questions. I will also keep it to two. My first one is actually on the U.S., and Gabriella and Enrico would love to hear what the U.S. growth rate was for you specifically. If I kind of strip out the Argentina hyperinflation accounting contribution from the America's growth rate, it seems like this is another quarter where you might be just going in line with the U.S. market, not ahead of it. So curious if you can provide some clarity on that. And then I guess related to that, is the managed care business outgrowing Miracle-Era or vice versa, or are the growth rates pretty comparable? That's my first question. My second question is also about Americas and the margin contraction that you experienced in the quarter. Is there anything unusual that happened in T1 that explains this, or is this a broader trajectory of travel for this year given investments or makes? If you could explain that, that'd be helpful. Thanks, guys.

Sorry, Veronica, I took note about the first two. While I was taking note, I missed the third one. Can you tell me the third one again, please?

Yes, Enrico, it was about the margin compression in the Americas and whether there is anything unusual or is this reflecting some investments or will be here for the rest of the year?

Yeah. Okay, so with regards to the first part of the question and therefore our growth in the U.S., we believe that we are growing faster than the market. And as I say, in my opinion, you should not compare our performance directly with the HIA data because these are selling data which can be affected by selling for product launches, by selling for any reason, etc., etc. So, Our estimation is that in the U.S., we are growing faster than the market. Definitely, our Amplifon heating healthcare business is growing very fast and above the Miracle Year. But also, we are super happy about our growth with Miracle Year, in particular with the growth in our directly operated store network. With regards to the margin compression in the Americas, I wouldn't take this as an indication of the fact that we are suffering in terms of profitability in the region because this was mainly led by the fact that we are acquiring many, many, many stores. Clearly, when you acquire stores, you have a transition. When we acquire, of course, we also acquire companies which in general have lower profitability than the average. And then, you know very well that from a percentage viewpoint, directly operated stores have a lower percentage than franchising. Of course, we want to improve our profitability in the US. I would like to stress once again that our priority in the US is growth. We want to maintain our profitability. So maybe one quarter can be below, one quarter can be up. The overall target for the Americas region in consideration of all of what I said is to have a stable profitability.

That's very clear. Thank you. Thank you.

The next question is from Oliver Metzger with Odoo BHF. Please go ahead.

Good afternoon. Thanks for taking my questions. The first one is on the contributors to your margin improvement. Can you give us some indication which share came from operating leverage versus your efficiency program? Second question is about also your strong M&A activity. How far are you away from considering yourself as well scaled in Germany and France? Thank you.

Yeah, thank you. Thank you for your questions. So with regards to our margin improvement and the split between operating leverage from efficiency, I can't give you this kind of detail, of course, but clearly there is a positive effect coming from operating leverage, and there is also a positive effect coming from efficiency. deficiency measures that we took starting from the second half of of last year in particular in europe which are including optimization of the agendas of our audiologists protocols training efficacy and so on and so forth so forth which allowed us basically to reduce the number of people that we needed to be hired in order to deliver this growth so in a way this kind of efficiency and productivity measures are amplifying the operating leverage. With regards to the second question, and therefore how big is the room for a further expansion of our network both in Germany and in France, still there is a significant room, in particular in Germany. Today in Germany we can count on something like 600 stores, while in France it's more towards 700 stores. But definitely, I would say there is still a significant room in Germany. For example, we are quite weak in the south part of Germany. So there is definitely room to increase the network in both markets.

Okay, thank you. Just a follow-up to my first question. So I understand you don't want to give exact details, but you mentioned Europe and the strong improvement in Europe. So is it fair to say that in Europe the major share has come from the efficiency program?

In Europe, the major share is coming from, absolutely, yes, absolutely, from labor cost efficiency, absolutely.

Okay, great. Thank you very much. Thank you.

The next question is from Julienne Ouadour with Bank of America. Please go ahead.

Hi, good afternoon. Thanks a lot for taking my question. So I have two. The first one, so in France, so missed comment about the French market from the two manufacturers who already reported. And one of them I think this morning mentioned the fact that they expect the French market, I mean like the growth to be flat. I think in the past you were more talking about plus 2%, plus 3%. Any reason why this assumption would have changed for you after what you've seen so far? I mean, you've been pretty positive about the market recovery. Or should we maybe see a sort of company-specific issue for your main retail company in the country? Second question about the U.S. So, again, strong quarters like in America. Yes. you seem to be ahead of plan when it comes also to like miracle year franchises acquisitions, or at least you're like ahead of my plan. So even if you've done already a lot of M&A in the US until now this year, should we expect more acquisitions for the remainder of the year? And if you can comment about where your discussions are with the largest franchises owners at the moment, that would be, I mean, that would be helpful. Any, any large M&A in the short term. Thanks.

Okay, thank you for your questions. With regards to France, in my opinion, what is important to mention is that in the first quarter, France was not negative. And this is, in my opinion, good news. Again, in consideration of the fact that there was an impact, which was not minimal, in my opinion, coming from the early Easter. Now we need to see in this second part of the year if this trend is confirmed. So let me say that to have France in positive territory is already good news. Then to say if France will be up to 3% or 1%, to be honest with you, is very difficult. For us, let's say, the fact that it's positive is already quite good news. With regard to the U.S., definitely, you know, our expansion of our network of directly operated stores is one of our strategic priorities, so I expect to go ahead. With that, I can't really comment anything on a specific or a target or... see something like that. Definitely we have the goal to continue to expand our network of directly operated stores in the U.S.

Perfect. Thanks a lot. And if I may squeeze like a very quick follow-up, just like on the margin, so you started the year with an impressive plus 100 bps EBITDA margin improvement year over year. I mean, of course, you maintain the guidance of at least plus 60 bps. Should we expect, I mean, either less margin expansion in the coming quarters or could the margin could be seen a bit more, I mean, like a bit conservative this year?

Look, in terms of profitability, we have issued our guidance for 2024 just two months ago. Things are going well, perhaps better than planned so far. So if things will continue to go well, and you know very well that in the last couple of years we have seen the European market in particular to be quite volatile, but this first part of the year has been good. If this trend in terms of European market to, in terms of growth, will continue in the remainder part of the year, we will see. But let me say that so far we are happy under this point. It's not our guidance at the moment. Our guidance is the one that, you know, we'll see in July if this trend confirmed if there is the opportunity, of course, to do better, which is what we always strive for.

Perfect. Thank you very much.

The next question is from Hugo Solvay, BNP Paribas. Please go ahead.

Hi, hello. Thanks for taking my questions and congrats on the results. Most have been answered, but I'm left with a couple now. Maybe you can comment on the IT growth for April. Can you maybe for us suggest that for hyperinflation and also should we expect just the Easter effect of 1.5% to reverse? That would be helpful to have a end up to have a clean number to work with for April. Second, maybe you can give your thoughts on the probe into the Italian market now that the outcome is known and has been published. That would be helpful maybe to clarify here. Thank you very much.

Thank you. Thank you for your questions. So with regards to the first part of the question, Clearly, in April, we have delivered growth which was very strong. Up 18% versus April last year, of course, benefiting from the fact that Last year, we had the Easter occurring in April. The impact of this is easy to be calculated. It's about circa two days on a monthly basis. So I would say the impact should be something in the region of high single digits. With regards to the second part of the question and therefore about the current market analysis from the antitrust authority, I think we commented the last time about the output of their market analysis. Since then, no further news. Of course, we have taken the report from the antitrust authority very seriously, and we are working on it in order to identify if there is room for improvement our proposition to clients. We are definitely working on it, but no further news since last time we commented on this.

Okay, thank you. And just hyperinflation impact on April growth in the IT? Sorry, say again? The hyperinflation impact on the IT growth in April, sorry.

I think it's impossible to say at this stage. I don't know.

I mean, very much in line with what we saw during Q1. During the first, I mean, three months, we saw this impact in the Americas in the range of two percentage points. So it shouldn't be different also in April. Thank you.

Thank you.

The next question is from Shubhangi Gupa with HSBC. Please go ahead.

Shubhangi Gupa Hi. Thanks for taking my question. I just have one question on the April growth trend. Could you please elaborate how is the growth pattern in the different regions? Is it similar to QM, like the U.S. is still strong and EMEA is recovering? And for EMEA, should we think about sequential recovery through this year?

Sequentially, sorry, again?

For email, should we think of recovery as more like sequentially progressing through this year, so Q2 better than Q1, and so on?

Okay, of course, we wanted to give you a flavor about Q2, giving you our growth in April, also because this year there was a very significant effect related to the Easter. We do not want to give you a guidance about quarter two specifically, but in general terms, let me say that you should expect a similar pattern to what you have seen in Q1, which means America being the fastest growing region and then the others.

Thank you. The next question is from Domenico Ghilotti, Equita. Please go ahead.

Good afternoon. My first question is on the bolt-on M&A contribution. So I'm wondering if, given the visibility that you have on the pipeline today, you can share with us what can be, say, a reasonable amount or a ballpark indication on investment that you are expecting for this year, also because this will be supportive also for next year. And second question is on the inflationary environment. So if you can give us some color on what do you see in terms of persistent inflation, maybe particular on labor costs or if you see really this easing into 2024.

Thank you for your questions. So with regards to the first one and therefore the Bolton acquisitions, what we see, since I would say six months, is that we see more targets willing to listen to us and to sell. And also what we see is the multiples that maybe were growing just after the COVID euphoria, now are going backwards. So definitely this kind of environment is positive for us, and definitely we see the possibility for sure to be above the 2% now, It's early to say if it can be three or whatever, but definitely we are very confident that this year can be a good year for our M&A activities. With regards to the second part of the question and therefore inflationary environment, I think that the labor cost has gone back to the usual pattern. inflation rate, which is something in the region of, let's say, 3%, while, of course, last year we were more in the 5%, 6%. So I definitely see a situation where labor cost has gone back to the usual inflation rate growth.

Thank you. And if I may follow up on... Q1, in general, your assumptions for price contribution, are you sticking to the idea that price will be limited?

Yes. Yes, absolutely. Absolutely.

Okay. Thank you. Thank you.

The next question is from David Edlington with JP Morgan. Please go ahead.

Hey guys, thanks for the questions. First up, maybe just on CapEx, your CapEx has gone up quite a lot and therefore your depreciation also gone up quite a lot, up 17% year on year. Just wanted to give a bit more colour in terms of where that CapEx spend is going and do you see that moderating at some point in the future and also the outlook for depreciation? And then secondly, just in terms of trading days, I know one extra trading day in the second quarter. Just wondered if any comments on Q3 and Q4 as well, please.

okay thank you so with regards to the first question and therefore the capex clearly capex have grown about the 30 million versus last year 26.6 million capex are related to our investments in in the network i.t innovation And for the full year 2024, what you should expect is a total amount of capex basically slightly lower than 2023. Because in 2023, 2023 has been a year of extremely strong investments. So in 2024, you should expect a lower number for the full year than in 2023. Last year, we were about 140 million. So lower than the 140 million of last year. With regards to the second question and therefore trading days going forward, not a meaningful, let's say, difference versus previous year. We will have one trading day more in Q2, one trading day more in Q3, and also one trading day more in Q4. So positive from this point of view.

That's very clear. Thank you.

question is from Giorgio Tavolini Intermonte please go ahead Hi good evening thanks for taking the questions I was wondering if you can comment more on the EMEA mix of returning customers compared to new customers just to have a better understanding on the margin from let's say higher portion of returning customers if so and the second question is on the managed care business since I didn't see many comments on the Medicare Advantage. How do you see this segment growing and contributing to U.S. profitability? I guess higher profitability compared to the Miracle Year and the rest of the business. Thank you.

Thank you. Thank you for the question. So with regards to the customer mix, now we are back to the usual mix. So I would say that we are back to where we were some time ago, and the situation in this regard has been totally, totally normalized. With regard to our growth in the Medicare Advantage, certainly we are growing in this segment. We were not playing at all before. But I would say this has not been the main engine of the growth for Amplifon in healthcare industry. Also in this first part of the year, we are also growing in the private part. So definitely we are growing there, but it's not the main driver of the growth.

Many thanks.

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