VusionGroup

Good afternoon, everyone, and welcome to our first quarter 2025 sales presentation. With me today are Thierry Gadou, our chairman and chief executive officer, as well as Thierry Lemaitre, our deputy CEO, finance and corporate. Thierry Gadou will make some remarks on the group's business performance and financial performance in the first quarter, as well as our full year After these remarks, we will be happy to take your questions. As a reminder, some of the information to be discussed on our call today is forward-looking and subject to important risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the Safe Harbor Statement included in our press release and on slide three of this presentation. This evening's release was issued a short while ago and is available in French and in English on Vision Group's website The slides of this presentation can also be found on our website in the regulated information section. A replay and a transcript will also be available on our website after the call. And with that, it's my pleasure to hand you over to Thierry Gadot for his opening remarks.

Thank you, Olivier. Good afternoon, everyone. Thanks for joining our conference call. I'm very happy to present our sales figures for the first quarter. In a nutshell, Vision Group achieved an excellent Q1, slightly ahead of our guidance, with 31% growth in adjusted sales. Order entries nearly doubled in the first quarter to $532 million, driven by the strong momentum in the United States. Vast sales reached $33 million, up 71% versus Q1 last year. And we reiterate our full year outlook of 40% adjusted sales growth and improved profitability. So let's now go into a bit more detail. So the group's IFRS revenue reached €215 million in the first quarter and €233 million on adjusted basis. And that is up 31% compared to the first quarter of 24. This is slightly above the guidance that we communicated during the presentation of the 24 annual results, which was around 25%. And by the way, it's also our best first quarter ever. In terms of geography, in this first quarter, growth was driven by Americas and Asia-Pacific region. In this region, adjusted sales reached 143 million. up 100% compared to the first quarter of 24. This performance was driven by the rapid expansion in the U.S., our first market today, and particularly the deployment at Walmart U.S., which is continuing according to plan. The fluctuating tariff situation was, of course, discussed with our U.S. customers, and that led to unchanged rollout plans due to the strategic importance of digitizing stores in a context of increasing price volatility. So our forecasts for the year are kept unchanged and confirmed. In Europe, we achieved adjusted sales of 90 million, and it's down minus 15% compared to the first quarter of 24. So the business in Europe is Again, not yet benefiting in Q1 from the contract that we signed at the end of last year and more recently due to normal manufacturing lead times. Deliveries will increase sequentially in Q2 and over the following quarter, so we do confirm our target of resuming growth in Europe for the full year. The pipeline is strong. We see increasing focus from retailers on improving the efficiency of stores across Europe. If we now look at order entries, Q1 was a very strong quarter with new orders increasing by 94% year on year to 532 million. And over the last 12 months, that represents 1.9 billion euro. This record figure is in large part explained by the recent Walmart contract extension. And this number includes a part of the new 1 billion euro order announced at the end of the year. and which will be booked in our orders over the next quarters of 2025. So the group expects this good momentum in order for entries to continue for the full year, also driven by signing of new contracts in both the United States and Europe. Let's look at VAST now. Revenue from software services and non-ESM solutions reached 33 million in the first three months of the year, up sharply by 71 percent compared to the first three months of 24. Both recurring and non-recurring revenues grew strongly. Recurring revenues in particular reached 17.2 million, up 38 percent year-on-year, and represented about 52 percent of the total vast revenues. Note that our cloud install base grew rapidly during the first quarter of the year. to reach approximately now 26,000 stores and 188 million labels. This dynamic will accelerate in the coming quarters. And as a reminder, the Cloud NISO base was around 19,000 stores and 94 million labels a year ago at the end of March 24. Our outlook for 2025 is confirmed. I'd like to just comment a little bit the situation. On the one hand, for sure, the fluctuating tariff environment may lead to slower investment decisions for some retailers, those who are still in pilots or just evaluating business case, those who have not yet measured the benefits at scale, and those may wait until there is less uncertainty on tariffs and costs of the technology. On the other hand, though, Retailers who have already decided and launched rollouts are clearly determined to move forward and are not changing plans despite the current tension in global trade. More than ever, this proves that in today's environment, our solutions are providing retailers with measurable benefit, efficiency, and resilience, enabling them to increase the return on capital employed of their most important asset, their stores. Our technology perfectly fits to the present challenges of our customers. So with an order book at an all-time high, with strong visibility, and we reiterate our growth and profitability improvement objectives announced on February 26, which are a revenue growth rate of around 40%, an annual adjusted revenue target of 1.4 billion euro, split between around 600 million in the first half and 800 million in the second, an 80% growth in vast revenue for the full year, an adjusted EBITDA margin improvement of 100 to 200 basis points in 2025, and a positive free cash flow generation. With this, I thank you for your attention and give you back the floor for questions.

Thank you. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press star 1, 1 again. Please stand by while we compile the Q&A roster. We will take our first question. And your first question comes from the line of Bennett Filman from Berenberg. Please go ahead. Your line is open.

Yeah. Good evening, guys. Can you hear me? Yes, we can. Okay, perfect. Hi, Thierry. Hi, Olivier. I have a couple of questions, if I may. The first one would be on the Walmart rollout. Thierry, you already mentioned regarding the U.S. customers that are currently in pilots, but I was wondering how do your conversations with Walmart go? I remember when I met them in New York, they seemed to be very bullish in rolling out the ESL and the VAERS solutions. Has that changed in the last couple of months because of the tariffs? Any color on the Walmart rollout in particular? Thank you.

Yeah, so no, not at all. No change. I think, as I said, I made a general statement on those customers who had already decided and launched rollout. And those are typically the customers who, you know, have already measured, you know, at scale the benefits of our technology. And those are, the message is very clear. We've been discussing with all of them, including the largest one you mentioned. There is no, you know, no change in rollout plans. So we are, as I said, continuing the rollout as planned with, you know, an acceleration throughout the year, so no change. So that's a very clear message. And this is why we are able to be sort of confident on our guidance for the year, because we have a very strong backlog. and strong visibility, and there is no change on this side. And I think it's very telling, to be frank. I mean, it's very telling because it shows, you know, the very strong benefits if, you know, if there is no change in ROA plans with the type of, you know, situation. I think it's a stress test that is quite a confirmation of the very strong value of the technology we provide.

Thanks. Yeah, makes sense. Thank you very much, Thierry. Maybe another question regarding tariffs. I mean, over 2025, you're ramping up capacity to manufacture the AdSense for particularly Walmart. I was wondering, how does the current tariff environment affect your decision making where to ramp up basically that production capacity? Because if I look at your competitive landscape and I look at Hancho and I look at Soluem, everybody is very much focused in producing or working with EMS that are manufacturing in China, in Vietnam, in Mexico. And I was wondering, given that you work together, for example, with Jebel, what is actually the real likelihood that you would decide to not ramp up the capacity with them in, let's say, Mexico or in Vietnam, but maybe in the United States. You probably have a little bit of higher wages, but you probably save a bit on the lead times. And you as the global number one, is there a real likelihood that you would be the first one to actually manufacture ESL for the US market in the United States?

So it's true that we have a very, I mean, We consider to be in an environment like we have today, we consider that we are by far the safest choice because we have a very balanced now, very balanced geography diversification in the supply chain and a very strong set of partners who are also a balanced geography including, as you pointed out, the U.S., as a very strong geography where they have many, many factories. So for us, this flexibility is a real strength, and we're ramping up capacity. We have some flexibility to decide. With all the partners, both Foxconn, Jabil, you mentioned Jabil, but there is also Foxconn, both have capacity in Vietnam, in Mexico, in the U.S. And so all the scenarios are on the table. And so far we are not changing our plans because, as I said, the customers who are essentially in our backlog, and we have a very big backlog, have said no delays. Right now, we're flexible. We probably would be the first one to do what you mentioned. If we were to, we're not announcing anything. We just have very strong flexibility because we also, as you know, we own our equipment so we can move it easily, et cetera. So there is plenty of factors that are sort of favorable for our flexibility. But the main message we receive from our customers right now is, you know, no delays, continue, you know, keep up with the rollout plans, no delays for relocation. So we have flexibility because some of our, you know, sort of capacity is not yet decided, the geography, so we keep very, you know, very close to all the stakeholders of this conversation, you know, including officials in the U.S. to see how it unfolds. But having said that, in any scenario, we see no change in the growth plan.

Okay, sounds good. Then maybe third question from my side. So, order intake numbers look actually pretty good. I think it's the highest book to bill you have at least since my model reaches back, so that's quite encouraging. I know you don't disclose numbers on a per customer level, but could you maybe guide us a little bit how much of the Q1 order intake was driven by Walmart?

As you said, you said the answer in the beginning of your question. We don't disclose specific. But what we, you know, what you know is that we just got a very, very big order at the end of the year, and we said we would, you know, we were booking it in the firm orders as we, you know, received, you know, sort of nominative, you know, sort of stored orders. And so it would be spread over the whole 25 years, so a year of 25. So it gives an indication. But I think, again, it's a big part, of course. It's a very big customer, so big part. And we have part of this $1 billion in here. That's what I can say, because we don't disclose customer specific data.

Yeah, fair point. And then maybe final question, and then I go back into the queue, would be on IFRS 15. uh the adjustments you have um we currently have the situation that adjusted revenues is larger than reported revenues and at a certain point in time that should basically reverse right so if i assume that you're capable of doing 100 of the walmart us stores by the end of 2027 let's say is it fair to say that those ifrs 15 adjustments will basically reverse someone in like late 2025, early 2026, so that we should expect that maybe by Q3 or Q4 numbers that adjusted revenues will be lower than reported revenues.

Hi Ben, Thierry speaking. Just be careful because within the adjusted revenues you've got two impacts, one stemming from the warrants, another one coming from the price decrease. That's related to the price decrease. We said it's going to reverse in the course of H2 this year. So yes, you're right. In H2 this year, you should see this amount reversing, but we don't disclose the split between the two adjustments. But yes, of course, the part on the wall will keep having impact until the end of 2029. and the impact relating to the price decrease will reverse in the course of H2D0. Okay.

Okay, cool. That's it from my side for now. Thank you. Going back to the queue.

Thank you. We will take our next question. Your next question comes from the line of Valentin Pourjahan from Stiefel. Please go ahead. Your line is open.

Good evening, everybody. Do you hear me well? We do. Perfect. So three kind of questions for me, please. First, could you please give us more granular view about the order index momentum in Europe? like which countries are driving it and also what is your feeling about the momentum in the UK market? Is it starting to take off from your point of view and if so what tangible evidence do you have to share to back this up?

Yes, so as I said Europe is again there is good signs in Europe since already a number of months, and we were already happy with the performance in Q4. We had sort of a growth in order entries overall last year. And so there are several geographies which are sort of good. You're specifically, and you're probably right to point out the UK because it's a country where there is a bit more, I mean, it's a bit more lagging behind continental Europe in terms of adoption and penetration. So it's where we see a catch-up sort of dynamic. And it's true that those who have been, for instance, at the recent RTS event, you know, the retail trade show event, could see the very very significant interest of all the retainers. I think those who follow a little bit the press know that we've been mentioned by a lot of journalists who've seen our pilots here and there. And so we're expecting sort of things to unfold clearly this year, a number of deals. So we're quite optimistic on the UK. It's the but there are other regions where the pipeline is is big. I think you know the the the and so far I mean the the tariff situation is not, you know, impacting the the the let's say the decision time. So at least we won't have that that topic. So but dark region is is also has also a good good strong pipeline even in France. Supposedly, mature market, we see growth opportunities, so plenty of things going on. When we will announce, we will announce, but right now, we are, let's say, positive about the momentum.

Okay, understood. And maybe about value-added services, could you please give us more detailed explanations of the factors behind the strong growth in non-recurring value-added services? I mean, is it coming from the expansion of vision OX licenses or from computer vision camera? that you can sell before or from other services and hardware? Is it possible to have more details on it?

Well, details I don't know, but clearly there is something that we've been talking about is the fact that exchange is a vast rich platform. This is why one of the things we're doing nowadays is to transition you know, as many pilots as we can from ESL pilots to, you know, to EdgeSense pilots. So, and as you know, Fusion OX is, you know, is the operating system, so the software that powers this solution, and which is the next generation operating system. So this is a big contributor to the increase of the so-called non-recurring, but it's not one-off because it's going to continue. But yes, the ramp-up of Fusion OX. Generally speaking, the whole growth in VaaS is really driven by software, whether it is recurring or embedded one-off licenses of software like Fusion OX, it's still essentially software that drives really the growth of VaaS. So it's a very positive momentum and a momentum that's going to stay. It does include also a number of other things, by the way, but the key driver in Q1 is around this type of software. That's why I mentioned also the growth of the cloud install base.

Okay, understood. And maybe last one about tariff. So in terms of profitability, tariff are a factor of uncertainty and they could affect the gross margin in the coming, I don't know, quarter. You can manufacture in Mexico, Vietnam or in the USA, like you said, thanks to your EMS. but could you tell us what maybe what proportion of your purchases correspond to components versus the proportion that corresponds to the payment of the assembly work i would say and maybe among components what proportion of components you buy from chinese company located in china if and which would not benefit from another source of supply from another country. I mean, what I mean is that even if you manufacture in the US, you will need to buy components from China, right? So it can still be cheaper to produce in Mexico than in the US, given the price of components and the share of components total cost of your solutions.

So there are several aspects to your question. So maybe, Thierry, on the first aspect, which is the impact of gross margin, I understand it's because of the re-invoicing of taxes that you were talking about, the sort of mechanical impact on the gross margin. Is that what you were talking about? I understand. I mean, the first part of your question seemed to be related to that. that if we re-invoice because the increase in tariffs so is it that mechanical impact?

My question is basically the fact that within the total cost of your electronic shelf labels or digital shelf labels there is some components and there is assembly work.

I understood the second part of the question, but I thought the first part was relating to something that is more the mechanical effect of re-invoicing a component which is no margin. Obviously, it's tariffs, so re-invoicing tariffs to customers, maybe putting a little pressure, a small pressure on the total margin rate. which is true because you have a part of the, so I just wanted to, Thierry, to comment on this. In fact, your question is all about the component versus finished product. It's okay. I may have misunderstood. Tell me.

Yes, but I think that maybe, maybe, Valentin, just to answer your question, because first of all, you know that the largest customer, which is currently subject to tariffs, is Walmart in the U.S., And with Walmart, you've got a pass-through clause. So currently for the next coming months, and of course for the full year 2025, tariffs should have no impact on our profitability. The only impact that could potentially raise from the tariff is the fact that, yes, we're going to recharge at zero margin the cost of the tariffs to the customers. But that is a very limited impact. We don't consider that it should have any impact on the profitability target that we have already guided the market with. So we confirm the capacity to deliver the profitability improvement that we are targeting for the full year, even in the current context of the tariffs. uh that's the the situation so far of course no one knows what the type is going to be in the next coming three four months so currently from what we know and from what we see in the situation we confirm the capacity to deliver the expected improvement of the profitability yes but my question was more about uh beyond walmart because then in the us you have yeah Valentine, you know, we are on Q1 2025 revenue conference call. So yes, we can try to give an estimate of what the profit will be in the context of tariffs that no one can already anticipate. But I'm afraid that it's a little bit fiction so far.

Yeah, we confirm, you know, for sure, we confirm our, you know, our guidance for the year, which is, I remind, you know, you know, relatively precise when I compare the guidance of other companies, frankly. So that's confirmed. What you need to have in mind is that because, you know, we would be on equal, I would say, basis here is that we need to stay very humble about what would be the outcome because you seem to have already a certainty about what's going to happen with China. I'd be a little more careful, you know, Because we've seen a number of things over the past six weeks, including this morning, we don't know where things are going to end up. So, you know, making plans on, you know, depending on the relative cost of components and the relative, you know, the relative tariff on components versus finished goods, depending on whether you put your, you know, these cases of some manufacturing products where where the suppliers and the assembly line is crossing the border of Canada seven times before they finish good. So you can't make simulations on that. What I think is really interesting about the stress test that we went through is that so many customers say don't change anything. Why? Because this world that we enter is a fundamental world of volatility. I don't want to disclose any of our customers' data, but I can tell you the cost of volatility, managing volatility in the store, the manual cost of that is massive. So what is the only protection? You know, it is the digitization and the automation. So at the end of the day, you know, you need to make, you know, sort of choices not on like, you know, sort of, super short-term volatility of decisions around tariffs because that's not an industrial policy. We have gotten closer and closer to the U.S. We may operate in the U.S. That will not be for, you know, it will be for many reasons if we do. And it will be for reasons that will stay. So it may happen. We will do it, maybe. We will certainly get closer and closer to America, for sure, in many ways. But we're taking decisions in a sort of reasonable way. Those things are not volatile. Production is a big decision. So the good news is right now, none of these things are going to impact the growth plan that we have for this year. And so that's the good news, really. So we're staying flexible, we're looking at things, but right now nobody knows where the tariffs will land for any country, including China.

Okay, understood. Thank you for your answers.

Thank you. We will take our next question. Your next question comes from the line of Adam Gildea from Bank of America. Please go ahead. Your line is open.

Hi. Good evening, guys. Can you hear me okay?

Yes, we can.

Oh, perfect. Thank you so much for taking my question. I really appreciate it. This is also sort of on the timing. You mentioned that it's possible and it's very flexible to move production around, whether it's to the U.S. or to another third country outside Vietnam or Mexico. I was wondering if you can just elaborate a little bit on The timeline there, because as I understand it, the new Walmart pre-financed lines that are going live throughout this year are located in Vietnam and Mexico. And presumably the process of getting those up and running is already ongoing now. So does that mean that that's essentially committed for 2025 if, let's say, tariffs are going to go into effect two to three months from now after the 90 day pause? And how quickly could you react and move that to the U.S.? ? in terms of keeping the 2026 and 2027 timelines together?

Yeah, sure. So you're absolutely right. So the flexibility, we're still in the process of setting up these lines. And some of them still have a bit of flexibility in terms of the final location, given it's the same EMS on both ends, Vietnam and Mexico. And if we were to go to the US, it would be the same EMS. That provides another element of flexibility. It's true that if we were to decide, and we haven't done that, to move as soon as this year in America, it would delay some of the ramp up of this capacity. And that's why even though it would be possible, there would be a delay. And that delay, you remember I mentioned no delay was the answer of our customers. And so precisely those who are already expecting, you know, sort of rollouts to happen because those decisions have been taken, they said no delays for the reasons I mentioned. So no delays means not relocating, right? Now it doesn't mean that for 26 we would take a different decision, but right now we're not planning to relocate. We already have, you know, dual location. We have a bit of flexibility of load balancing between those locations, by the way. and still now, but for 25, all the discussions have taken place. Every scenario has been analyzed, shared with our customers, and the answer is no change in plans, and we deliver. That's what they expect us, and so we will deliver our growth.

Okay, that's very clear. Thank you.

Thank you. We will take our next question. Your next question comes from the line of Flavien Bourdemont from Bernstein. Please go ahead. Your line is open.

Hello. Can you hear me? We can. Yes. Okay. Thank you. Hello to all of us. I'd like to have a bit more color on one of your comments. You said that there is a wait-and-see attitude for your clients that are currently in pilot phase. Does their decision are motivated by weaker pure return on investment projection or more on higher uncertainty on future retail prices? And if I had to say my question differently, does this wait and see attitude from retailers will disappear once the U.S. tariff will be settled? And if not, what is the main concern currently from U.S. retailers?

No, I think, yes, I mean, you did understand me correctly in the sense that the situation in tariffs is, you know, is creating uncertainty on a lot of, let's say, on the cost of technology, on the future cost of technology. And so when you are at early stage in pilots or even before, you know, sort of evaluating business case and you have to put in your model cost and everything and all of a sudden you don't know if it's, you know... you know this level of 40% plus etc all these are you know indicating to you know creating an uncertainty on the models and we expect and we may be wrong but you know we expect on these type of customers that they will probably there may be a slowdown in the speed of decisions also there is another factor the current fluke in the current situation is not only creating an uncertainty on cost, but it's also creating an uncertainty on recession, on inflation. And those are very significant concerns for retailers in general. So again, this is pushing for that. So that's why I said it's a contrasted situation, because on the one hand, we had this incredible good news that those who were already sort of planned rollouts want to absolutely It's either stay on plan or even go faster. But there is, on the other hand, this situation which is creating uncertainty on the macroeconomic growth or recession and also on the cost of technology that is imported. And so those uncertainties will logically defer some decisions. we're on the right side of the market because, uh, we happen to have, you know, as I mentioned, a lot of our, uh, you know, sort of, uh, revenue plan is, uh, you know, is in backlog or in, in, in customers that have already sort of made decisions. And so that's why we're able to, uh, you know, to, to, to, to have our guidance, uh, you know, confirmed. Having said that, but it's true, there is this reality, this contrasted reality. Let's say the good news is we're on the right side of the market right now.

Okay, great.

Thank you. Thank you. We will take our next question. Your next question comes from the line of Laurent Galbart from BNP Paribas. Please go ahead. Your line is open.

Yes, good evening gentlemen. Laurent speaking from BNP. So a couple of questions on my side. The first one regards your exposure to the U.S. market. Can you share with us what is the first question? Are you shielded from tariffs with all your U.S. clients or only Walmart? And if not Walmart, I mean if others are not shielded from tariffs, what is the size of the backlog you have to deliver? at, let's say, past prices, was the first question. So second one relates to Walmart and Captana. Could you share with us where do you stand in terms of the pilot regarding this technology and if you expect them at some point to sign a contract with you? And the third one, Thierry, relates to VAS services. So recurring VAS are up 38% in first quarter. Do you expect the level of growth for recurring VAS to accelerate throughout the year?

So, yeah, so regarding, I don't know if Thierry wants to, but the first question was about the tariff. I think the situation is relatively... the same in a lot of our customers that I described. In fact, we described the situation of the customers who had already decided rollouts and as roughly the same, regardless of the impact, which is not fully known at the moment, but they're asking us essentially to to continue as planned, even though they might incur some pass-through of those. And in most cases, we have the same provisions. So there are, I would say, no difference here. And so, yeah, we've seen most of each situation, and that's why I wouldn't make a different statement here. for a given customer. It's mostly the difference is really the customers who had already decided or already launched their rollouts, and they're not changing plans. You know, it's also true for a retailer we had mentioned in December, like the Fresh Market, et cetera. Regarding Captana, I mean, the computer vision projects, we have several computer vision projects. which are developing on plans. They are still in pilot mode, so it's too early to say we're going to sign a contract, but they are a very, very important project. They are developing well, and so we'll certainly talk about it when we can. But right now, they're developing well.

I'm just regarding the last point regarding the recurring VAS. Yes, we said that we wanted to grow the VAS approximately 80% in 2025 versus 2024. And given 31% increase in Q1, yes, you're right, that should probably accelerate over the course of the year 2025.

Okay, thank you.

Thank you. We will take our next question. Your next question comes from the line of Gilles Crespel from LA. Please go ahead. Your line is open.

Good evening, Thierry and Thierry. Can you hear me? Yes, we can. Great. Thank you very much for all your comments and congratulations for the results. A few questions if I allow. If you allow me, one is there has been great development in the US backed on Walmart developments. It's a little more muted or a little less recovery on the European side. Could you give us a little color on this? That would be my first question and how you expect the following quarters to evolve. The second question is, there had been some strong recruitments in 2024. Could you give us an idea where we stand at the end of the first quarter of 2025? Where does the headcount stand, or has your recruitment program been continuing or more stabilizing? And then technical question is, I have in mind that the whole of Walmart rollout would be something like 4,600 stores. Could you give us or remind us the date for completion of the rollout as it was signed per the last contract?

Thank you very much. The first question was about the European recovery.

I hope I'm not paraphrasing something I already said. Let me say it differently. The European situation is good. It's still a modest quarter in Q1 after a good quarter in Q4. The thing is, you know, we have usually six, nine months, you know, sort of manufacturing lead time. So when all the Q4 other entries in Europe are going to be, you know, visible, you know, throughout the – towards the end of Q2 and in H2. So again, that's the thing. And we have also other entries in Q1 that also would impact more H2. So that's why we're absolutely, you know, confirming one of the things we mentioned in our guidance was that Europe in the full year would be coming back to growth. It would be more visible in H2. However, sequentially you know, quarter after quarter is going to be growing. So deliveries will increase, you know, sequentially in Q2 and then in Q3 and then in Q4. So that's the dynamic we see. The plan of deliveries is lower in H1 than in H2, and so in total will be, you know, resuming growth in H2 and for the full year. So that's what I can say, and I gave a bit of color on some regions in Europe which have a good momentum and where we expect new winds in the coming quarters to continue to fuel growth, not only in 2025 but also in 2026. So that's for Europe. Regarding... No, I think HR was the third one. The second one was... The second one was HR. Yeah, yeah, HR, yeah. Well, you know, we have passed, I think, not long ago, our 1,000th employee. So we are... I think we finished a year at something like 960 or something like that. 960, 960. Yes, 960, yeah. 950 950 950 yeah and so uh in the meantime we've passed our our thousand and we we should be you know uh recruiting uh uh like uh like last year uh you know another 200 this year and so it's uh two to three hundred so it's uh it's moving well and uh it's uh particularly growing the team in the in the us and uh finally one more timing completion oh yeah this is something we we we didn't i mean precisely disclosed uh we we did say uh i think when we signed the framework contract which was in uh 23 that it would be uh around five to seven years so you know that's that's still the the the case we were we're still uh you know sort of uh On the on the planning phase of all the years right now. Obviously the plan for 25 is Completed but plan for 26 and 27, you know are still so right now. It's a We should be we should be done. I would say roughly we should be done in 27, right?

Thank you very much Thank you, we will take our next question and Your next question comes from the line of Aureline Sauvinon from OderBHS. Please go ahead, your line is open.

Good evening, gentlemen. Two questions on my side. Firstly, I just wanted to touch on the impact of a weaker U.S. dollar. I was wondering if that could change how you see VCM evolving for the rest of the year, and perhaps with higher stagflation risks in the U.S., do you see this as a tailwind for further adoption of VAS with the retailers who are currently rolling out in the U.S.? Thank you.

Maybe just on the first point, Aurélien. So yes, you're right. It can have a limited impact actually because the impact is more on the revenues. So since euro is getting value or dollar is losing value against euro, it's true that the revenues in dollars are a bit less significant. Nonetheless, we are still very comfortable with the 600 million euros revenue guidance for each one. and the 40% revenue growth for the full year. And on the profitability, yes, it can have a limited impact. We said that we had quite a natural hedge between the revenues and also the cost in dollars. So we consider the impact to be quite limited in the gross margin.

And the second question.

potential recessionary impact on US retailers?

Well, I mean, again, this is something I touched on just before, the fact that the current situation is not only a tariff situation, it's also a macroeconomic uncertainty about the evolution of consumption. and purchasing power and GDP growth. So in theory, as I said, it might delay decisions of investment, not specifically affecting one or the other components of our business, but maybe delaying some other entries. Again, we are, you know, this doesn't call into question our guidance because, you know, it's, on the other hand, a number of things are absolutely confirmed and they are, you know, and so I don't think it's something that, you know, would affect the course of business in 25. So we've taken it into account, you know.

My question was more about if with a higher stagflation risk, it could be a tailwind for further adoption of VAS with the retailers who are currently rolling out in the US.

A tailwind for the retailers who are... So you mean a positive factor...

Yeah, absolutely.

You mean recession would be a tailwind for, yeah, I think, you know, well, I mean, I hadn't thought of that. You're right. It could be. But no, I think we have, you know, already, you know, sort of included a very positive momentum on VAS. As I said, we expect to, you know, we expect to grow very rapidly VAS and already in Q1 it's happening. But it should, as we said before, it should accelerate. So already we are anticipating a strong demand on vast sand and a strong acceleration. So no doubt this is happening. Now, even more, you know, I wouldn't, you know, go as far as that in a pure, you know, sort of improvisation. But so we try to stick on our... you know, to the course of our business and to our plan right now.

Okay. I appreciate the call. Thank you.

Thank you. We will take our next question. Your next question comes from the line of Hubert Massett from Massett and See. Please go ahead. Your line is open.

Good evening, Jay. Just one clarification with H-SENS. do you have still pilot running in Europe with the, uh, with that chance of not yet?

No, no, we have, you have.

Okay. And so what, and what's your, let's say normal scenario to, to convert those pilots in orders is that, you know, end of 26 or, or sooner than that without, you know, making any forecast, of course.

Uh, Yes, I mean, we are hoping to convert pilots to rollouts in, I mean, maybe towards the end of the year or next year. So, yeah, I mean, it's, there is, we don't see a big difference between Europe. It came later, so we started projects later, but it should happen. We already have a, sort of pilots which are in the phase of expansion to many stores. So yeah, there should be decisions towards the end of the year and during next year for sure. We have several.

And technically, do you have the extra capacity to fulfill these orders given the fact you will be at nearly full blast for Walmart at that period of time?

completion of their own of their order yeah we have we have dedicated capacity to to to other customers yes we have a we have dedicated capacity okay that's all for me thank you thank you thank you one last question thank you we will take our next question and the question comes from the line of Valentin Paul Jehan from Steiffel please go ahead your line is open

Thank you, it's me again, sorry. Just the last one. I have the feeling that Trump tariffs between Mexico and Canada and the US apply to non-USMCA compliant products as well as automotive and steel, but it seems that there are lots of product categories that are USMCA compliant. Among these product categories, there is one category which could eventually be used to cover ESL type products, in my view. Do you think you could make your products USMCA compliant just to avoid tariffs? Is this something your legal teams are working on? What is your opinion on this subject?

Yeah, so it's something we were. We are definitely working on at the moment. For sure there is a list which is called an HTS list harmonized tariff schedule. So HCS codes are covered by a number of HCS codes are covered by the exemption and our products are not important under those codes. So that's the current situation. Now we are working, you know, on I mean. Those lists and those codes are not stabilized. So, you know, any, we need to, and they are still moving. And, you know, we, of course, are doing everything we can to, you know, to justify a number of exemptions. But we're working on it. So it's something, right now it is not, right, exempted.

Okay, okay, perfect. Thank you.

Thank you. This concludes today's question and answer session. I'll now hand back for closing remarks.

Yes, so thank you for your attention and all your great questions. We wish you a very good evening and we will meet you, I think next now is that... Yes, well end of July and of course for shareholders at the AGM and on June 17 so there's going to be thank you very much bye bye