Compagnie Financière Tradition S.A.

To be better, we have a mic on, so sorry about that. So I'm just repeating, but surely you must have noticed that I'm not on my own. And today, Johan Ruppert, Chairman, Jérôme Lambert, CEO, Burkhard Grund, CFO, Cyril Vigneron, Partier CEO, and Nicolas Boss, Van Cleef & Arpels CEO. As usual, the company announcement and financial presentation can be downloaded from richemont.com. And the replay of the webcast will be available today from 3 p.m. Geneva time. Before we begin, please take note of the forward-looking statements in our ad hoc announcement and on slide two of our presentation. So what you do, just a few personal words. As many of you know, I'll be retiring later this year, and so this will be my last results presentation.

Thank you.

Thank you very much. So over the last 22 years, it has been incredibly rewarding to build and lead the investor relations function. and interact with world-class sell-side analysts and highly knowledgeable investors. I would like to express my gratitude for your insightful questions and constructive feedback. I would also like to thank the Chairman for his trust and support and all my many inspirational colleagues in the Richemont family. I'm pleased to say that you'll be in good hands moving forward with Alessandra Girolami, who will lead the department from September. So, turning now to the slides, Jérôme will take you through the year's financial highlights and sales, and then Burkhart will review our business areas, group financials, and key ESG initiatives. He will then hand back to Jérôme for the conclusion, which will be followed by a Q&A session open to participants present in the room. I will now head over to Jérôme.

Thank you, Sophie. Good morning, ladies and gentlemen. Thank you for joining us today. Throughout the year, we faced continued macroeconomics and geopolitical uncertainty, unfavorable foreign exchange movements, and demanding comparatives. Amid these challenges, we nevertheless achieved all-time high sales of 20.6 billion euros, an increase of 3% at actual exchange rate and 8% at constant exchange rate. Operating profit came in at 4.8 billion euros. On the reported basis, operating profit was 5% lower than the previous year, resulting in an operating margin of 23.3%. The currency impact was quite significant. At constant exchange rates, operating profit increased by 13%, and the resulting margin rose as well, as we shall see on the next slide. Excluding non-recurring charges of €58 net, reported operating profit was close to €4.9 billion. Profit from the year from continuing operation was solid at 3.8 billion euros, down 2% on the previous year. Cash flow from operating activities was strong, reaching 4.7 billion euros, while the group net cash position continued to be robust with a 0.9 billion euro increase from the previous year to 7.4 billion euros. Richemont delivered a solid underlying performance in a challenging context. Sales growth was fueled by all regions, led by Asia-Pacific in value terms and by Japan in percentage terms, as well as double-digit growth at Jury Maison and in the retail channels. We saw a strong performance in Q1 and Q3 and a 2% increase at constant rate in the fourth quarter against a particularly challenging comparative of Last year, 21% on the previous year period. The fully operating profit from continuing operation of 4.8 billion euros was affected by significant foreign exchange movements. At 68.1%, our gross margin included a 200 basis point of negative foreign exchange impact. At constant exchange rate, gross margin was up 130 basic points, while operating margin increased by 100 basic points. At the business area level, the jewelry maison maintained the highest operating margin at 33.1% reported. Over the year, Richemont strengthened its approach to ESG with several milestones reached. The group was proud to have obtained global gender equal salary certification from the Equal Salary Foundation, recognizing the response commitment to ensuring a fair and equal wage policy between women and men for more than 38,000 colleagues across 39 markets. Let me now walk you through the group sales performance, first by region and then by distribution channel. Unless otherwise stated, all comments refer to year-on-year changes at constant exchange rate. It is worth noting that sales grew across all regions for the third year in a row. Also in terms of individual markets, the U.S., benefiting from its strong growth rate over this past year, has now become the group's largest contributor, just ahead of mainland China. Europe delivered 3% growth on top of 27% in the prior year, mainly supported by local spending. This including increase in France, Switzerland, Italy and Spain, more than offsetting softness in some other locations. The fourth quarter was strong, with a 7% sales increase on a demanding comparative. Turning now to Asia-Pacific, the region grew double-digit for the year and contributed the most. to the absolute increase in group sales. Growth reflected the strength of Hong Kong and Macau, which benefited from an increased travel from the mainland Chinese. Most other locations in the region showed growth for the year. Fourth quarter sales were down by 12%, primarily reflecting the particularly strong comparative of plus 26% in the prior year period. The Americas. We see the very solid performance with a 5% growth rate benefiting from strong domestic demand sustained by a favorable microeconomic environment and repatriation of spend. Fourth quarter sales growth accelerated to double digits. The America was the second largest region after Asia-Pacific with sales of 4.5 billion euros. Japan posted the strongest sales increase for the year at plus 20%. This was primarily driven by tourist spending, notably from Chinese clients. Of note, auto sales in Japan saw extremely strong growth exceeding 40%. And this again, this against a challenging competitive. Middle East and Africa. had a very robust performance with sales up by double digits, benefiting from higher spending by both locals and tourists. This was particularly the case in the United Arab Emirates and Saudi Arabia. Fourth quarter sales also rose by double digits, continuing the strong growth momentum recorded during the year. Let's now turn to the sales by distribution channel starting with retail. where directly operated stores contributed 69% of gross sales, up from 68% in the prior year. The retail channel outperformed all other channels with an 11% sales increase, building on the double-digit growth rate of the prior year. This strong performance was driven by double-digit growth at both the jury maison and specialist watchmakers, as well as mid-single-digit growth at the fashion and accessories maison. All regions posted sales growth, with double-digit increase in Asia Pacific, Japan, Middle East and Africa. Retail sales benefited from 81 net new stores opening, mainly in Asia Pacific and in the Americas. Fourth quarter retail sales increased by 2%, building upon a sharp 24% growth in the prior period. The online channel, comprising the group's online sales of the Groups Maison and Watchfinder, contributed 6% of group sales, in line with previous year. Sales were 2% lower as growth in most regions was more than offset by softer online sales in Europe and Asia-Pacific. The F&M Maison posted limited growth but included double-digit increases at Petromiller and Alaya. The reduction in online sales was partly due to the strong resurgence of brick-and-mortar shopping as clients returned to physical stores. Sales in the fourth quarter were in line with the previous period. Finally, wholesale sales. Comprising 25% of group sales, wholesale sales increased by 4% on a solid performance from the jewelry maison, particularly offset by softer sales in the other business areas. Fourth quarter sales rose by 2% on demanding comparative. The group proportion of direct to client sales, which includes sales of our directly operating stores and online, increased by 1% per page to 75% of full sales. The increase was driven by the specialist watchmakers and fashion and accessory maisons. Indeed, direct to client sales, the specialist watchmaker increased by 4 percentage points to 60%. This follows a 5 percentage point increase in the period reflecting the success of the group's ongoing retailization strategy that complement the focus on key strategic multi-brand retail partners. The jewelry maison continues to have the highest rate of direct-to-client sales at 82%. Burkhart will now take you through the year highlights by business area. Over to you, Burkhart.

Thank you, Jerome. Let me review our business areas with all numbers at actual rates and starting with the jewelry maisons. Building upon very strong growth in the prior year, sales increased by 6%. exceeding a new sales threshold of 14 billion euros. At constant exchange rates, the 12% growth marks the third year in a row of double-digit growth for jewelry maisons. Sales were up across all three jewelry maisons, most distribution channels and across all regions, most notably in Asia Pacific, Japan, and the least in Africa. In the fourth quarter, sales were slightly down, although up by 3% at constant exchange rates, on a challenging comparo basis of plus 26% in the prior year. The jewelry maisons' operating margin was strong at 33.1%. All maisons continued to make long-term investments, particularly in jewelry production capacity and distribution. Communication expenses also rose, notably for high jewelry events. The operating result rose by 1% compared to the prior year, highly affected by adverse foreign exchange movements. At constant exchange rates, the operating result was up 14%, with an 80 basis point increase in the operating margin. Let us look at the key developments during the year. The jewelry maisons generated good growth with iconic collections. In jewelry, this included Trinity, which is celebrating its 100th anniversary this year, and Clash at Cartier, Alhambra and Fauna at Van Cleef & Apelts, and Opretul and Macri at Bucciolati. Good watch performances included Panterre and Benoit at Cartier and Perlier at Van Cleef & Appels. My jury enjoyed a strong performance, supported by international and local events around collection launches. These included Le Voyage Recommencé at Cartier, Le Grand Tour at Van Cleef & Appels, and Mosaico at Buccellati. The retail network was further upgraded with renovations and new openings across the regions. Renovations included the Milano Monte Napoleone store for Bucciolati, Geneva Rue de Rhone for Van Cleef & Apples, and South Cross Plaza for Cartier. New openings took place in New York for Cartier, Hong Kong for Van Cleef & Apples, and Macau for Bucciolati as well as in new markets such as, for example, Mumbai for Cartier. 64% of Cartier's stores are now under its new concept, a material increase from 51% a year ago. To support the strong demand for jewelry pieces across our three jewelry maisons, production capacity is being increased through production facilities being acquired, built, or expanded. These facilities are located in Italy, France, and Switzerland. Let us now review our specialist watchmakers, where sales were 3% lower following a strong comparative in the prior year. On a constant exchange rate basis, though, sales grew by 2% against high single-digit growth in the prior year when they reached an all-time high. Regionally, increases in Asia Pacific, excluding mainland China, Japan, and the Middle East and Africa were supported by both local and tourist spending. Such increases were more than offset by declines in other regions. A mid-single-digit increase in retail sales was more than offset by softness in other channels. In the fourth quarter, following a double-digit comparative from the prior year, sales were 4% lower than the prior year on a reported basis and 1% lower at constant currencies. The operating result of 572 million euros translated into a resilient operating margin of 15.2%. During the year, investments in communication and the store network continued to further reinforce the retailization of the business. As in the first half, the decline in profitability reflected a moderate sales contraction combined with a strong Swiss franc and internalization of external points of sale. Excluding forex movements, which impacted this business area the most, the operating result rose by 3% and the operating margin by 20 basis points. Let us now look at some of the key developments over the past year. Performance was varied across the maisons, yet supported by continued resilience of iconic collections. These included the Lange 1 at Ahlangen Söhne, Portuguese are at IWC, Reverso at Jaeger-LeCoultre, Luminor at Panarai, Polo at Piaget, and Traditionnelle at Vachon Constantin. Our specialist watchmakers have continued to strengthen direct engagement with clients through the elevation of the experience in stores, as well as through events highlighting craftsmanship and artistry, such as Watches and Wonders, Concours d'Elegance for Langue and Zeune, and concerts for Jaeger-LeCoultre, to name just a few. Further development of the retail network included new openings, such as Casa Panerai in Paris, the first internal boutique in Thailand for Vacheron Constantin in Bangkok, and Lange & Söhne in Paris on Rue de la Paix. Other highlights included the internalization of external points of sale, relocations and renovations, the latter including the first Piaget boutique renovated under the new store concept in Taipei 101 in Taiwan. More on the evolution of the specialist watchmaker's business model at the end of the presentation, underlined by the DTC, the direct-to-consumer rate, here on this slide. Finally, let us move to the other business area, which primarily includes the group's fashion and accessories mazons, along with the group's unbranded watch component manufacturing and real estate activities, as well as watch finder. Sales were 2% lower year-on-year on a reported basis and 1% up at constant exchange rates. Resilience in the Americas, our largest region, mitigated softness elsewhere. Higher sales at most fashion and accessories maisons were more than offset by lower performance in other units, predominantly watchfinder. For the fourth quarter, sales were overall slightly down year-on-year, facing a strong comparable base in the prior year. The operating result for the year was a 43 million euro loss. This largely reflects the impact of Watchfinder and our watch component manufacturers. The fashion and accessories maisons broke even, yet at constant currencies, they generated a 30 million euro operating result. Again, let us now look at some of the highlights of the past year. Most fashion and accessories maisons experienced sales growth due to a heightened focus on creativity. Fiscal year 24 was another successful year for Alaia and Peter Millar. Alaia had a strong reception of the latest collections and saw success of leather goods such as the curl handbag and ballet flat shoes. Montblanc enjoyed success with its higher price offer and large leather goods collection. Also noteworthy were the acclaimed first collections of Simon Holloway at Dunhill and Germena Carmani at Clouet. Indeed, Germena's inaugural show was ranked number one by WWD among the top 10 fashion shows in Milan, Paris, and New York City. The retail network was further enhanced with new openings across regions, including Delvaux and Kuala Lumpur's Pavilion Mall, and in Beijing at Wangfu Central, Alaya at the Kingdom Center in Riyadh, and Peter Millar on Madison Avenue in New York. The group also strengthened its portfolio further with the exhibition of Gianvito Rossi, a recognized leader in high-end shoe manufacturing, its proprietary savoir-faire development and production. We will now begin to scale up this unique maison, leveraging the infrastructure and backing of the group. Watchfinder continued its expansion and is now present in four Time Valley locations, including Abu Dhabi and Macau. while being present in over 100 specialist watchmakers and captive boutiques via its part exchange service. In addition, a marketplace offer was launched earlier this year in the United Kingdom. Let me now turn to the group financials, starting with gross profit, which rose by 2% to 14 billion euros. The gross margin declined by 60 basis points to 68.1%, impacted by strong Swiss franc versus the euro and higher raw material costs. Excluding the 190 basis points negative impact from adverse foreign exchange movements, gross margin increased by 130 basis points, reflecting the positive impact of targeted price increases by our mesons and a more favorable geographical mix. Next, let us look at operating expenses, which were tightly controlled to end just 6% higher than the prior year in an inflationary environment. At constant exchange rates, operating expenses rose by 9%, broadly in line with sales. I will now take you through the expenses by category. Selling and distribution expenses increased by 7% at actual exchange rates and by 11% at constant exchange rates, accounting for 54% of total operating expenses in line with the prior year. Most of the increase related to inflation-driven operating cost increases, as well as to the development and enhancement of our retail network and growth in retail sales, notably in Asia-Pacific, Japan, and Middle East and Africa. Selling and distribution expenses represented 24.3% of group sales, and 80 basis points increased compared to the prior year. Communication expenses rose by 3% at actual exchange rates and by 6% at constant exchange rates. The higher spend was more marked at the jewelry maisons to support sales growth, notably with impactful high jewelry events. Nonetheless, investment in communications remained at 9.7% of group sales, in line with the prior year and within our normalized 9-10% range. Fulfillment expenses, which represent the costs of fulfilling online orders from our mesons and watch finder, decreased by 5% at actual exchange rates and by 3% at constant exchange rates and continued to represent 1% of group sales. Administrative expenses rose by 11% at actual and constant exchange rates and represented 9.2% of group sales, 70 basis points higher than a year ago. The increase was primarily driven by salary increases, IT investments, and a strong exposure to the Swiss franc. Other expenses of 103 million euros were in line with the prior year and included non-recurring charges of 58 million euros net, primarily from a 34 million euro impairment of intangible assets and a 19 million euro impairment of goodwill at Watchfinder. Excluding non-recurring charges of 58 million euros, operating expenses grew by 7%. Overall, net operating expenses as a percentage of group sales increased from 43.5% a year ago to 44.8%. At 4.8 billion euros, operating profit was robust, generating a 23.3% operating margin, 190 basis points lower than the prior year. The year-on-year change is mainly explained by the adverse foreign currency movements. Constant exchange rates, operating profit increased by 13%, with the resulting operating margin 100 basis points higher compared to the prior year. Note that operating profit came close to 4.9 billion euros when excluding the non-recurring charges of 58 million euros, which were large in non-cash. Note also that we do not apply hedge accounting, hence the full impact of foreign exchange movements is reflected in our operating income. Let us now review the rest of the P&L items below the operating profit line, starting with finance costs. Net finance costs improved from €136 million to now €178 million. This improvement reflects three main items. Firstly, we recorded a €123 million increase in net foreign exchange gains on the Group's hedging program. Secondly, we benefited from a €62 million positive variance in net interest expense, primarily from high interest income. This positive variance was partially offset by €117 million fair value loss on financial instruments, which comprised a €269 million write-down of the Farfetch convertible note, now valued at nil in our financial statements, as well as a €168 million gain in value on the group's investments in internally managed bond funds and money market funds. Moving now to discontinued operations, where sales were down by 14% over the prior year at actual rates and by 12% at constant exchange rates. The operating loss at 1.4 billion euros largely reflected a 1.3 billion euro non-cash write-down of the net assets held for sale to fair value, considering current levels of net working capital. I remind you that YNAB remains as held for sale in our financial statements. Let us now turn to the profit for the year. Hichemont reported a solid profit from continuing operations of 3.8 billion euros down by 93 million euros. The increase in profit for the year to 2.4 billion euros reflected the reduced 1.5 billion loss from discontinued operations and the 136 million euro improvement in net finance costs that I just mentioned, partially offset by a lower operating profit. Our effective tax rate for the year for continuing operations was 18.1%, in line with the envisaged 18 to 21% range. Cash flow generated from operating activities was up 5% to 4.7 billion euros. This increase was mainly due to a 326 million euro inflow from the settlement of currency forward contracts, compared to cash outflow in the prior year, as well as a lower buildup of inventory. Let us now turn to gross capital expenditure, which amounted to 1 billion euros. As a percentage of group sales, CapEx reached 4.4% of sales in line with a year ago. 45% of gross capital expenditure related to point of sale investments, including internal and franchise boutiques, as well as external points of sale. Most of the spend was allocated to boutique renovations, upgrades and relocations, notably at Cartier. Manufacturing accounted for the remaining 24% of gross capital expenditure, related primarily to R&D and increased jewelry capacity in Switzerland, France and Italy. Finally, other investments, which made up 31% of CapEx, mainly related to IT spend. Let us now review free cash flow, which rose by €82 million to €2.9 billion. This increase was primarily driven by a €205 million increase in cash flow from operating activities, including the cash inflow from hedging derivatives mentioned earlier. It was partially offset by higher net capex and lease liability repayments. Moving on to our balance sheet, which remains solid, with shareholders' equity accounting for 48% of the total. Net cash amounted to €7.4 billion on 31 March 2024, an increase of €0.9 billion over the prior year. This includes the benefit of the cash inflow of €880 million from the exercise of warrants issued in 2020, mitigated by a €2.1 billion dividend cash outflow. The Board has proposed a dividend of 2.75 Swiss francs per 1A share or 10B shares, which represents a 10% increase of the ordinary dividend over the prior year, subject to shareholders' approval at the Annual General Meeting on 11 September 2024. I will now share an update on our ESG progress. This year, Richemont is taking the next step on its journey of continuous improvement to further consolidate the group's approach to ESG. Building on the foundations put in place last year, in fiscal year 24, we completed the development of a group-wide ESG management system, establishing an overarching structure to integrate policies, processes, and actions, providing the framework to execute the group's ESG priorities. This management system has enabled all the activity across the group to be combined into a consistent, harmonized approach across Maison's regions and functions. Our commitment to continuing to build ESG capabilities and increasing ESG professionalism has led to the creation of the Richemont Sustainability Online Academy. The goal of the Academy is to equip all our teams with the right tools and opportunities to grow their technical ESG understanding in a consistent manner across the group. Continuing with our compliance-driven approach, this year our non-financial report has been developed in accordance with GRI standards, with selected GRI indicators independently assured by PricewaterhouseCoopers. The report also complies with Article 964 A to C of the Swiss Code of Obligations. To continue to act on our environmental impact, in 2023 Richemont was recognized by the Carbon Disclosure Project for its environmental performance, receiving an A- score for climate change. We are also pleased to report that CO2 emissions from transportation and distribution reduced by 31% versus 2022. This is mainly the result of a shift from air freight to shipping by sea. Also, as part of the group's ongoing efforts to advance its sustainability operations, Richemont continues to pursue internationally recognized building certifications. Today, 22% of the buildings owned by the group are certified in accordance with the highest building standards. In terms of driving social impact, Richemont obtained global gender equal salary certification from the Equal Salary Foundation. This recognizes Richemont's commitment to ensuring a fair and equal wage policy between women and men for more than 38,000 colleagues across 39 markets. In addition, this year the group's human rights statement was published, supported by a dedicated internal human rights task force. The statement reflects the group's longstanding commitment to respect the human rights of all people across the business and value chain, including employees, customers, partners, and suppliers. It aligns with the United Nations guiding principles on business and human rights and the principles of the United Nations Global Compact, to which Richemont is a signatory. When it comes to preserving craftsmanship, we're investing in the next generation of talent to ensure that we can support our businesses' sustainable long-term growth. Ushma owns and partners with a number of leading schools in the fields of luxury design, jewelry making, fine watchmaking, as well as luxury management courses. We also invest in an extensive global apprenticeship program as part of our deep commitment to preserving special craftsmanship techniques. With this, back to you, John.

Thank you, Burkhard. Before closing, I wanted to bring the attention to our specialist watchmakers, their business area, to take stock of the qualitative transformation that has taken place since the creation of the division at the end of the calendar year 2017. Specialist watchmaker Maison have evolved toward a sustainable business model based on client centricity and through demand. Many of the eight maisons have reached a new scale, and together have generated incremental sales of more than 1 billion euros since 2018, an absolute 39% sales increase. The disciplined approach and execution of the strategy, nurturing the desirability of the brands, perpetuating and developing the savoir-faire that goes into the crafted timepiece in careful look-step with an evolution of the commercial and operational model have progressively instilled resilience in the business areas economic model. As a result, The operating margin rose to 15.2% this year, up 550 basis points from 9.7% in financial year 2018, while the euro depreciated from 1.14% to 0.96% versus the Swiss franc in the same period. Let's dive deeper into the levels at our SWM Maison. have used to embed resilience in pursuit of sustainable growth and value generation. First, by nurturing the brand equity and desirability of our Maison with continuous investment in visibility while fostering craftsmanship, creativity, invention, innovation and high watchmaking savoir-faire that gets into developing the most exceptional timepieces. Strong and enduring demand for many collections previously mentioned in the presentation has led them to reach an iconic status. The recent product launch at 2024 edition of Watch and Wonders also showcased our maison quest to pursue the boundaries in high watchmaking. As an example, Vacheron Constantin unveiled the world's most complicated watch, Le Cabinotier, the Berkeley ground complication comprising 63 oerological complication and 2,877 components. And yeah, it took indeed seven years. Second, by accelerating direct engagement with our clients. Notably, through the development of directly operated stores in prime location and alternative format of distribution such as the Vacheron Constantin Suite, 1755 in Dubai, alongside ensuring that provides the highest standard of client service. Our share of direct-to-client sales has reached 60% in this financial year, up from 39% in financial year 2018. And if we include our externally operated franchise store, the total share of sales in a monobrand retail environment increased to 79%, up 27 percentage points compared to financial year 2018, serving, in fact, two out of three clients today in Cannes. We continue to pursue a disciplined approach to our network evolution with a strong focus on productivity and alignment with true demand. By establishing a network footprint and distribution ecosystem, our Maisons are able to access full client potential and reach across markets. Our Maisons also rely strongly on our strategic retail partners to achieve this ambition. whether in monobrand franchise store or multi-brand stores, which also includes the Time Valley concept. Third, by applying a non-compromising focus on clients to know and serve them better. We strive to offer and deliver a more personalized and creative engagement and omni-channel experience with greater satisfaction throughout all touchpoints. Finally, by further focusing on local clients across geographies. developing multi-market strengths and mastering excellence in our end-to-end operation with shorter response cycle times in order to constantly offer our clients the product they desire in the right place. We have strengthened our teams across the organization, reinforced the agility and flexibility in our operation, accelerated our time to market, and managed our inventory effectively with a strict adherence to the SOZI, sell-out versus sell-in, at 100% over the cycle, aligning supply strictly with demand. We will remain focused on these principles and we progress in our ambition to drive sustainable and profitable growth. Now, a few more words to conclude before we move to the Q&A. Pechmont delivered another year of solid financial performance while facing a continuing uncertain geopolitical and macroeconomic environment. We recorded sales growth across all regions at constant and actual exchange rates, leading to all-time high sales of €20.6 billion. Our dual-maison and retail distribution channels performed strongly. Both our specialist watchmaker and fashion accessory maison showed good resilience over the years. Our financials were equally very solid. Our operating margin increased by 100 basic points after excluding the significant adverse foreign currency movement, but including the non-recruiting charges. Cash flow from operating activities was robust and contributed to the further strengthening of our balance sheet. We now have an increasingly balanced regional and nationality within terms of sales. Finally, Richemont further consolidated its approach to ESG and reached several milestones during the year. Our maisons are strong and agile with resilient iconic collections. They have developed strong relationships with local clients and increasingly rebalanced their clientele mix. Their growth potential and strength of the group balance sheet give us confidence in our ability to generate long-term sustainable value creation, whatever the new-term uncertainties. I would like to close this presentation by thanking all our colleagues for their commitment, responsiveness throughout what has been an intense year, which has enabled us to deliver these solid results. And this concludes our presentation. Thank you.

Thank you, Jérôme. Before we start the Q&A, just please announce your name and company name and try to limit yourself to two questions. Thank you. Okay, so first Suzanne, then Thomas, and then afterwards I must say I'm a bit lost, so we'll see who has afterwards. So maybe we'll go that way and thereafter. Okay. Susanna, thank you.

Thank you. Susanna Push from UPS. Maybe before I ask my questions, Sophie, thank you so much for all of your help over the past years. I'm sure we will all miss you. And congratulations to Alessandra on her new role and Nicola as well. So I'll stick to two questions. The first one is on something that you mentioned during the presentation. It's on the performance by clusters. So maybe if you could mention what was the performance of the Chinese, American, and European clusters in Q4. But specifically related to this, I wanted to check if you could tell us broadly what is the mix of the various clusters right now. The reason why I'm asking, because I think there's still this misconception in the market that the group is heavily reliant on the Chinese consumer, which I think was the case probably in the past, but it is not anymore, at least as per our estimates. So I wanted to double-check that. And the second question is on maybe margins. I think it was pretty impressive. You've seen a very good cost control, so Burkhardt, well done on that and to the team. But obviously there was a big FX impact. But it seems that at current rates, given that you don't use hedge accounting, FX will be broadly neutral or maybe even slightly positive in FY25. So I wanted to double check that. Sophie, can I ask a small third question, please?

No, if you don't mind, because I've seen so many hands.

We'll come back to you afterwards.

Thank you. I'm following the rules. And thank you very much for your message, by the way, Susanna. Appreciate it.

Well, in terms of your question on our reliance on mainland China.

Some two years ago, I was quite unpopular with my colleagues who saw their share price drop by 15%. It was in this meeting two years ago when we expressed the view that it would take longer for the feel-good factor to return in China. I also said that I totally believe in the medium to long term. Firstly, in China, in the Chinese consumer, they're smart, they study, and they work. And I don't think the ascent of China will stop. But we did express... the view that the feel-good factor would take longer to return. And we have been explaining for decades now that luxury goods sales really depend upon the feel-good factor. The disposable income and the availability thereof, obviously, is a determining factor. But if people don't feel good, It's a natural instinct. And we felt that the lockdown would have a longer-term effect on the general feel-good factor. A deeply cohesive society. It was a jarring and scarring effect. So we seen... where people travel, obviously then they feel good. The same propensity is there. But people act rationally, especially intelligent consumers. They are still a six-wallet group of people, both grandparents and both parents. And the majority of the people are not that affected by the bigger issues. You know, we look at the real estate problems, etc., etc. But they're acting rationally. So we said, please, let's not rush to think that they're going to get back. And that has proven to be the case. But over the years, what we've tried to do is, you know, for 30 years, we've been trying to say, that our business really is in creating desirability for products. And that depends upon the brand equity. And there is the danger, luxury should not be ubiquitous. Because if it's everywhere and available, people start thinking, well, hang on, that's not luxury. So one has to put the handbrake on at times. That does not mean by creating false scarcity. We had the issue where, you know, I'll give you an example. Lange & Söhne had to shut their waiting lists on some of their products. And I said to Valerian, then stop advertising because ultimately I'm the person who gets the phone calls. Because a friend of a friend of a cousin of another friend would say, don't you know Johan Rupert? Well, I want the Odysseus. You're causing an upward funnel to me. We had to explain to the people that This was not artificial, but you need 15 years of experience to build the watch. And 15 years ago, there were not that many people in Glasswood who rushed into the watchmaking business. But, for instance, my wife wanted a car where the grandchildren could fit in. And she wanted an SUV, a Range Rover. 18 months later.

So, there... It created aberrations. And we looked.

Now, we are fortunate today that geographically, the demand has widened geographically. And as Nicola said earlier this morning, the United States used to be East Coast, West Coast. Today you've got Austin. You've got Charlotte. You've got Chicago. Huge areas that are becoming very viable where the demand is there. I mean, I'll go back to Coco Chanel, my heroine, who said, money is money is money. It's only the pockets that change. And we have to be there in markets where where there's a desirability and the pockets. But luckily we fly on, you know, we're like a plane with six engines. If the one engine is not working as well, then luckily the others make up. So our geographical spread is far bigger than five years ago, let alone 15 years ago. And there's... Our drive is the coordination of, and obviously pricing. You've got to make sure that there is a global pricing. And with foreign exchange fluctuations, the clients are very smart. They noticed Japan was cheaper. Our clients are smart. So our maisons will do well, but the clients will buy in another area. And the Chinese traveling has not yet resumed like before, but it will. We try not to look at Americans, Europeans, Africans, or Chinese. These people all read the same things. They all follow the same social media. And there is a universal... globalization of tastes. Even though the economies are deglobalizing, and I'm worried about trade barriers and trade wars, if you create a universal demand, then the sales will move from geographical area. So, if you look at current, and we were a Chinese brand, Please look at what, you know, I've now nearly been 50 years with Gatier. 1976, an alarm. And all of these people, Nikola, we've been through and we've seen it. So I wouldn't focus on Chinese demand. We, two years ago, said we think it's going to be slower. And it's turned out to be not because of capacity, but I think the lockdown left a big scar, and people are recovering from it. But when you look at, we talk about mainland China, but I don't know when any of you last went to, I would say China-related, Indonesia, Thailand, the Philippines. These are very big markets that are doing very well economically. So I suspect that there'll be new areas. But in simple, pure economic terms, if you take the number of people in mainland China, and you take the number of people, it's a huge, huge place with many people who work very hard and who are successful. So there's no reason to believe that When the feel-good factor starts returning, the numbers will show it. And in terms of... Over to you, Burkhard, for the second question. I'm not going to stick my neck out on that one. No, no, no, no.

I mean, this is a very simple answer. I mean, we're six weeks into... into our fiscal year, so I cannot reliably project or guide, which I won't do anyway, of how the effects will impact our accounts for fiscal 25. I mean, today it's neutral. The dollar is pretty much stable against our average of last year. The yen, however, is significantly lower than our average. It's about 7% lower than our average of last year. The Swiss franc is a bit weaker, 1.5%. So today, at present, six weeks in, yes, it's neutral, or rather neutral. But don't ask me for the full year until 31st of March 2025.

It's a very good question, but I'll just step back. In 2003, when most of you weren't probably born or working yet, I had to step back. That's when we had a chief executive officer with finance, everything reporting. It was the only profit warning we ever had to issue. In that year, our luxury goods business that you know now today, at an operating profit of about, I think it's 155, 156 million euro. And we got 486 million euro from BAT. Our operating profit dropped by 50% that year. And I stepped back But interestingly enough, since then, the Swiss franc has increased by about 40% versus both the dollar and the euro. It's strengthened by about 40%. So those of you who get Swiss franc dividends, even though costs go up because we're Swiss-based, Our dividends are 40% worth more. So this has been carrying on since 2003, that we've had to look at it. Luckily, people who are buying Swiss watches, everybody who makes real Swiss watches are exposed to the inflation, which we... cautioned about you can't have inexplicably stupid quantitative easing with 0% interest rates for that long and then expect to get rid of it in two or three years, especially when you see the fiscal irresponsibility in the United States. If you look at the total debts, it's astronomical. And so we have to look at exogenous factors. Things under our control, I'm very happy about. We couldn't predict COVID. No. We should have known that we were selling too many watches in 2015. The whole industry should have known that we were bumping the market full. And we had to take that remedial action. It cost us a lot. Then COVID. So I wanted to get back to an original CEO role. But every time there was some crisis. And we lost 483 million euro in the first month of COVID in April. So we had a war cabinet. But we went through the stress test of the watch global watch glut, today we have the ratio where we sell up more than we sell in. And I don't know about everybody, but I can tell you that responsible competitors like Rolex and Patek are also not flooding the market. So there's a general responsibility of balancing demand So for those of you who worry about the Swiss watch industry 2015 to 18, it's not that case. In terms of how we have to accept that fiscally responsible countries like Switzerland with a working democracy will be attractive in terms of its currency. It's the perfect working democracy. I mean, I challenge you to know who the president of Switzerland is. We don't have a Biden fighting a Trump. It's heaven. However, we have to realize that it will have an appreciating currency. And we have to, and with Karl Heinz and all of the people, we have to make sure that our supply chain... and the efficiencies in our factories, we have to improve all the time. And Burkart, and maintaining an eagle eye over the cost structure, and that's really all we can do. But I'm answering it so that I'm answering a heck of a lot of questions that are coming over the next ten minutes. Thank you.

Thank you very much for 18, 19 years of fruitful collaborations and all the best to Sandra and the team from September. Two questions please, especially we have Nicola and Cyrille on stage. The first one, broad one on jewellery, your jewellery sales have a bit more than doubled in the last five years, that's 16% CAGR, that's quite impressive. The category, I think, has been maybe more resilient in the last five, ten years than anyone had thought. It bears some resemblance to the trends we've seen in leather goods for the last decade. We all know the story of branded jewelry gaining share over the unbranded segment. Can you talk about the long-term driving force you see from here that could continue to fuel close to 10% growth at your brands? Whether that's the evolution of high jewelry, self-purchase, you're quite, I think, vocal in that, Cyril, at Cartier, bridal, entry-level lines, and so on. And with great scales generally comes... higher profitability, are you still sticking ball cards to your long-term target of 30% to 35% EBIT margin for the Drury Maison? And secondly, on the group and the structure and the important changes within the exec committee and the board today, and the return to a classic CEO role assumed by Nicolas. Congratulations to you. One, what will change for the individual maison under this new structure? Is it further collaboration on transversal issues like manufacturing, distribution, marketing? Is it trying to help smaller brand grow? You've acquired Buccellati and Vernier recently in jewelry. Is it trying to fix some underperforming brands? And two, about you Mr Rupert, I think this morning in a media interview, I don't want to misquote you, you said you were not stepping back, so I assume you're still very committed to Richemont and to the control you have over the group. Thank you.

Thank you.

I'll answer the last one. Somebody asked me how is my working relationship with Nicola going to change. This is not going to change. It's still going to be on having fun and total trust. But if you want to run Richmond, you better understand the consumer. It's got to be a cultured person who has proven success in the field. How do you build brand equity? And no, it's not stepping back as such. Some of the direct line functions that I had, Nicola will be shouldered with now. And I actually asked Nicola to consider the job more than 18 months ago. And he thought about it and he came back and he said, I'm going to have to disappoint you because I'm having far too much fun what I'm doing right now. And I don't need the hassles and the politics and everything of a CEO role. And Anton said to him, that's exactly why we want you. We don't want a unification power thing. We want somebody who doesn't want the job. So, and I joke about it, but Italians do not have a monopoly about Machiavellian tactics. So I thought, how am I going to seduce Nicola? And I put him on the SPCC. And he suddenly saw, it can be fun. The jewellery businesses are run autonomously. Katya is an autonomous, big company. Van Cleef, the same. Buccellati's got its own structure, it's got its own DNA. Yes, we can help them. Van Heer is a totally different... It's not the same DNA as Katya. Katya doesn't have the same DNA as Van Cleef. Different psychographics totally. But, and obviously every single one of the companies have their own supply chain, from designs through supply chain all the way through. If you start mixing and matching and you start joint manufacturing, sooner or later they all look the same. And the client profiles are different. So they'll be run separately. And I think they can talk about the jewelry, but the structures. Lange is Lange. Vacheron is Vacheron. IWC is IWC. They're separate companies. Yes, we can help with access to distribution. And one of the beauties today is for a new maison in the group, where we can help them tremendously, is with access to retail. If we go and speak to a big shopping center, a big mall, when we go there as a group, it's very helpful. Very, very helpful. And maybe, you know, Jerome can tell you about some of the big mall owners. I mean, tell them about Mr. Alaba. What's his turnover?

Everybody knows that Dubai Mall is today the largest mall in the world. And it is the largest mall in the world for luxury as well.

Yes. And we're very close to him. We've been partners for a very long time. So with our relationship, with long-standing relationship with mall owners, that's where the smaller brands can really benefit. I would say that cereal, that would be the biggest benefit, Nicola, for the smaller brands.

And for the smaller brand as well, there are synergies in manufacturing and in relationship with partners. As you know, Dewey is the part where there is a significant manufacturing plant or workshop for craftsmen and artisan. But it will also share. And you know that... The independent. Independent. And with the attraction of Dewey from other competitors, then they try to acquire them. So the more we can work and develop and secure a network of manufacturing, then it helps also the growing brand to have access to the best in class. Otherwise they might have more difficulties because of the new interest for jewelry. And there are a lot of innovation coming in there that might be difficult for them to acquire if they don't rely on us to do so. And we have done some cooperation, very pragmatic, in Milan for Buteletti, for instance, to help them to take over and to grow. And it worked very smoothly because we could do that. So our presence in Italy, in France, and in Switzerland is of great help on distribution as well, having access to the best malls and so forth. So it's an accelerator for growth. And for the question of jury at the hall, it's one of the categories which is the most attractive on client side and the most definition of identity. And the more we grow also to sustainable attitude, meaning use more and waste less, the more watches and jewelry fit that. They are durable by nature and they can continue for a long time. It can transmit to your children in a way which is quite easy and natural. For other things, it's more difficult. So we see that growing interest in this way in basically all countries of the world. We don't see any reason to stop. Mention for also self-purchase. It's true for women and for men. Jewelry is more and more attractive for men as well. A definition of self-identity. And we see this trend growing basically everywhere.

I can only confirm definitely the synergies are about supporting mutually. between the brands and supporting the smaller brands. It's not about applying a recipe, it's not about having the same workshop, the same teams working for different brands. But as Cyril said, and as we are seeing more and more, it's really about supporting each other and also supporting the category. We are co-investing in professional schools, for instance, which we don't run directly, but this is absolutely key in order to make sure that we have the next generations of craftsmen. And this is the way we're going to continue to work together. As for the category, you were saying, yes, there is the old story of branded and unbranded market, but it's still a very, very valid story. It's still a category where the unbranded share is still extremely high, and the brands continue to gain share, and I think there is a lot of potential in the years to come in that area. There are, and they were mentioned, not new markets, but definitely new markets for brands international brands. And yes, we're talking about Thailand. We're talking about some European countries. We're talking about Australia that has developed tremendously. So we're talking about Vietnam in the last few years. So we see more and more countries opening up to international jewelry. And it's one of the oldest categories in the world, I think, without going into history. But a few years ago, there are archaeologists found in Morocco a series of 33 shells that were pierced that date back 115,000 years ago. And this is the first necklace that was ever found historically. So we are a category that dates back 115 years ago. It has gone through a lot of cycles, for sure, and we never can predict the future, but if we survive 150,000 years, we might survive the next few decades and probably continue to grow. So that's quite promising.

Thank you, Nicolas. I think we can move to the... Does that answer?

Yes, maybe just on the point inside... I do not allow anybody to comment.

Sorry, you mean the indication.

No. For a simple reason. I hate it. Because our clients know they're buying value. If you look at the last thing people want is buying an electric vehicle, and the moment they drive it out of the dealership, they lose 40%. We want these to be loved and valued over very many years. So I hate this margin, margin. Yes, it's nice for you, but it's not very nice if you're a client. So that's why we look, if you look at Christie's and Sotheby's, and if you look at the sales there, Katia and Van Cleef dominate in terms of value and what people get a decade later or 20 years later. And that's what we'd like to have clients know that they don't lose 30% when they buy it. So I urge people, please don't stress how much money we make out of something. But we wouldn't carry on buying if we didn't think it's not a growing category.

Thank you.

Just after. Louise Singlehurst from Goldman Sachs. Thank you for taking my question. We'll obviously ask Burkhard later offline about the margin question. We'll come back to that later.

But just to ask, I wonder... Which I've just given him blanket ear cover for he doesn't have to answer.

She will still ask, but I love it. Thank you so much for all the commentary this morning. I wondered if I could just follow up on a couple of points from Mr Rupert. You very explicitly, which is absolutely something that we can care with in terms of feeling about the feel-good factor for luxury goods. And you talked in detail about the Chinese consumer. I mean, when we look at the numbers this morning, the plus 7% for Europe, plus 12 for the US, fantastic numbers. You must all be absolutely delighted. But I wonder if you can just talk to us about the strength of that cohort. and what you're seeing, because obviously the economic data wouldn't necessarily lead you to a plus 12 for the US. That would be very helpful. And then secondly, you were talking about the knowledge of the customer. Many congratulations to Nicola this morning. But the knowledge about the customer and servicing that customer, how the group has changed. What are you seeing in that cohort? Are you engineering the group more towards that higher-end cohort in terms of service culture? Thank you.

In terms of service culture? I get all the complaints about service. So, you know, every dinner party, not that I go out a lot, somebody's friend had bad service in that boutique. So, and you will remember 20 odd years ago, I started this thing of mystery shopping, where I'd grow a beard and walk in, because the sales assistants tell you all the truth. And I'm still doing it. Obviously, during COVID it was impossible. Yes, service, service, service, service. You know, when I grew up, when I started and I joined my father's company, in every elevator, and this was before all of the modern work, there was a sign saying, The customer is your king and queen. He and she pay our salaries. You know, and I constantly tell my people, I don't pay your salaries. Burka doesn't. We just handle the money. The clients pay our salaries. That is a mantra. They pay our salaries. So service, it has helped us immensely our whole collaboration in terms of e-commerce and online, plus the longer... A few years ago, our factories, car lines and these people, the return on the warranty became so Minimum. Because the quality. That we were able to extend the warranty by five years. But, obviously the clients had to register. Because before then, watches being a wholesale business, we only captured 15, 18%, less than 20%. Today, the people are so willing because of this long-term guarantee of service that we're getting hundreds of thousands of willing people willing to share their data. The And yes, it's helped as a group, and it's continually growing. And now with AI, if you don't have the data, you're going to be lost. Totally lost. Because what do you interrogate? You interrogate data. And you can start predicting trends. In terms of the cohort and the 10% and 12% and 8%, Somebody could tell me whether President Trump is going to be found guilty or not guilty in the next three weeks. I will get a pretty good understanding of what the presidential election is going to shape up to be. And the divisive... I love the United States. I've never seen it as divided. And that will affect their feel-good factor. I mean, you've got to read what Ray Dalio in the FT today, what are his fears, he's a very smart man. So, all things being equal, we're content. But things are never always, and the volatility internationally has increased so much, geopolitically, that we will continue to have a strong balance sheet to withstand, because there will be a next crisis. We didn't see COVID coming. That was a real stress test. We can only control the controllables inside. With everything as it is now, I'm happy that from supply chain through to distribution, through to actually making sure we don't produce more than we can sell. But it's taken a lot of work by an enormous number of colleagues to get there. And you know, we believe warehouses, optimised warehouses. Until COVID broke out, or the only tornado ever to hit Italy, Hit the bloody warehouse of our online business. Don't laugh. We're building another warehouse for Pidimala. Not in Raleigh, North Carolina, but in Columbus, Ohio. And I thought it's the hub. It is a hub. Until somebody said to me, until Scott said to me, it's also outside the Hurricane Belt. I had never thought of the Hurricane Belt. So, That beautiful book, Active Fragility, really became true during COVID. Suddenly, when we were really optimal and efficient, it created fragility. So there's so many moving parts. I cannot tell you what the Americas will look like post-election. Yes, it's still... The economy is showing a remarkable resilience. And I think some of it can be ascribed to their home financing and how they've gone for long-term mortgages. Whereas, for instance, the UK... Inflation is quicker, a lot quicker, when people are on shorter mortgages. So it depends upon how consumers finance their major investments, their home ownership, for instance. And that's, I guess, country by country, society by society, how does inflation affect the consumer? Because I suspect we're going to have inflation for longer than the central bankers thought. We predicted that a year ago because we could see it. And there's sticky inflation, which means we've got to look at our cost structure. It also affects all of our leases, as you can imagine. over a 10, 15 year period. But please don't ask me what the cohorts are going to do. We just want to be there like Coco Chanel says. When the pockets change, we want to be in the other pocket. Or we want to be there. You know, but I'll tell you, the UAE, I mean, it's an astonishing growth. And I don't know how many Australians there are here, but I always tell my Aussie mates that thank God for them because they're the only Anglo-Saxons that South Africans can frown upon culturally, but Australia must have a lot of immigrants because... Sorry? They're all immigrants, but we have... Nearly all. Well, all Australians are basically immigrants, but new immigrants. And you have places like Melbourne and Sydney. So, as long as we're there, and as long as we desire it. I can't tell you. Europe. We have had a fantastic... Well, it's far better than I expected. appreciation by local clientele. So we are still local. And that's why, for instance, as I think one of Cyril or Nicola pointed out, we have to look after domestic Japanese consumers that are very, very loyal. So we didn't just raise the prices to cope with the Chinese buyers because we would have affected our local clientele. So we look at servicing local clientele because in the end they're the bedrock. So it's a very good question but it really it's like a lot of moving parts. You have a foreign exchange movement Now the first instinct is raise prices. The problem is your local clientele who are not buying in a foreign currency, they get affected. So we're not greedy. We like to look at what is the effect in three years, five years' time.

Thank you, Mr. Melania. To comment on service.

He's commenting on service because that's where I get most of my complaints from.

To understand the issues that can come with the volatility, meaning there are some areas that can be quite mild in traffic and some areas becoming really, really strong. Even in Switzerland, you can have in mind that the cities dealing with Chinese groups, like Lutzen and Delacan, are quite soft. But Zurich is booming, and local customers don't want to wait, so we have to adjust the site and service. It's quite difficult. In Japan, there are more and more non-Japanese buyers, so you have to address both Japanese and Chinese, and the rest of Asian coming increasingly to Japan, and then have to have some staff speaking Japanese and Chinese and English and having different expectations. In the Middle East, Doha is quite quiet, and Dubai is very strong. But in Dubai Mall, you have Emiratis expecting people to spend as much time as needed, meaning hours, and Chinese as little as needed, which is minutes in Chinese, and Russian something different in the same store, and some don't want to queue outside. So dealing with this service is quite difficult. So we have more and more complaints. I don't want to wait. I don't want to have this. I was not treated properly. And we are making our best effort to adjust. And that's why our retail is becoming increasingly know-how, not only for treatment, service, knowledge, data, and so forth. But the current context is quite challenging.

So first of all, good morning, everyone. This is Melania Grippo, BNP Paribas. I would like, first of all, to thank Sophie for your help during this year. So wish you good luck for your future. And also good luck to Alessandra and James for also there. uh future developments so i have two questions first the first one is on the appointment of mr nicola boss and congratulations also to you i would like to know i would like to go back to the leadership also the ceo of one cliff will someone be appointed soon or will you will continue will you continue to oversee also that brand specifically also as the role of ceo And my second question is on the OPEX growth at constant effects that we should, you know, input for March 25. Thank you.

Well, I'll answer it. I'll help you. I'll help the first one. Nikolai has identified an individual, but nothing's gone further than that. So I don't want to announce or ask him to announce it before that has actually been put in place. Opet, that's you, baby. Over to you, Burka.

Yeah, I mean, okay. You know I would never give you a range or whatever going forward with all the... with all the volatility that we currently see. We try to keep obviously OPEX growth and sales growth aligned and not a linear alignment, which does not mean that we will not at times invest more than we see in the short-term sales development. So I'd say the same rule applies. We'll invest what's necessary and for the mid-term we've always had a relationship between sales growth and OPEX growth.

I can have a small follow-up also on the cost side. Given the increase in the gold price, if you could please remind us what percentage of your COGS is gold and how you offset it.

Well, we're not breaking out that for obvious reasons. But what we do, once again, has been the pricing policy over many, many years, many decades. use pricing to offset raw material price increases. Now, people are looking a lot at the recent increase in the gold price. Remember, it recycles through our P&L over 12 to 18 months, right, in the future. So it's not an immediate hit either way, up or down. And, you know, it remains consistent with our approach over the long term.

Thank you. The next question is from... Go ahead, Luca.

My question, it's Luca Sulca from Bernstein.

Luca, I think we all know you by now. Thank you for saying you are.

Thank you. It's also for the benefit of webcast watchers, that's why.

Thank you, Johan. Thank you, Sophie. I'm interested in getting your thinking about lab-grown diamonds. Because we see that they are starting to become relevant, at least in some markets. We saw that in volume, for example, they now represent 50% of the market in bridal in the US, not in value, clearly. But the fact that you have big, perfect stones... in a price range that is from $5,000 to $15,000 could potentially have an impact also in the entry price jewelry market, I guess. We've seen new players coming into the market like Pandora with the punchline diamonds are for everyone rather than diamonds are forever. So I was just wondering what you see as the, let's say, next five to ten years implications from this development that could potentially change the jewelry category in many ways. The second question is about multi-brand digital distribution. We saw recently a couple of deals that made me thinking because for example the purchase of Matches.com has been very difficult and it has been basically going nowhere and when Coupang bought what remained of Farfetch We saw a number of big brands, for example, the Caring brands, move out of the Farfetch assortment. So I'm thinking about what is your perspective on the divestiture of wine up? Are you looking at a clean cup divestiture or are you looking at a more complex deal potentially like the one you had in place for Farfetch? And how do you see the difficulty of selling a company that loses money? Thank you very much.

Lab-grown diamonds.

We, 30-odd years ago, we were having quite a few fake, and it used to be cut here in those days, watches. and I'll never forget discussing it with Joe Carnouille and Alain Perrin. And Joe, being the wise man that he was, said to me, one, when people buy a fake watch, fake Cartier or fake Rolex, and their friends say to them, ah, beautiful watch, they either lie to their friend, but they're a little bit embarrassed, and then Guess what? They eventually buy the real one. And in terms of, and you wouldn't give a fake watch to a friend or a girlfriend or a wife or a daughter without saying it's a fake watch. It's highly embarrassing because when I had no money, lived in New York, and I bought my sister a Cartier watch, it turns out that it was a fake watch. It's still a family joke. But I was so embarrassed, I thought I'd bought a real one. It was in the 77 or somewhere. Now, if you are going to Give somebody a lab-grown diamond. You're going to say, this is a beautiful lab-grown diamond, it's five carats. Do you tell her it's lab-grown, or don't you? You tell her it's lab-grown. That's fine. But when somebody else then says, what a beautiful ring. Ah, it's lab-grown. Trust me, it's not got the same effect. You and I are too old, but you've got to propose to a woman. You say to her, I'll give you a beautiful ring, X, or you can have that. But by the way, it's lab-grown. I am not sure it's got the same effect. Who knows in five or ten years' time? But the second problem with that is, unless you're building it with hydroelectricity, Unless you are using electricity that is carbon neutral, you've got real issues. I know they had a Pandora, they own it very well. And as, and he plays in the Duny links, and I sing, you know, We don't normally have competitors here. And he looked at me and said, Juan, I'm not a competitor of yours. My market is totally different. I am not competing with Capiero Van Cleef. Trust me. So I think in his words, he said, I've got a totally different market segment. He's a very smart guy. But he basically tried to get re-invited to the Daniels. He's a lovely guy, but it's a different business. So, do we poo-poo it? No. I would suspect that the first place, logically, would be on pave diamonds on watchers. That's where I suspect that if people buy... Oh. let's, I wouldn't say Patek Philippe, I wouldn't mention a name, but they'll still think I'm buying a watch. But when you buy diamonds in jewelry, and it's not real, I'm not sure, I mean, we've obviously discussed it, but not Van Cleef, and certainly not Van Cleef or Cartier. You would be undermining all of the DNA, but that it will grow in certain categories. You know, it's very much like AI. You basically need a new power station if you're going to build a very, very big data center for AI. It consumes enormous amounts of electricity. So, the carbon footprint is going to be very big, and that's something we watch very carefully. They are not too open about that. But the current processes, you've got to remember that the beers had, they were the first creators, long before anybody else. They had a company called Bort. They had the technology 30 years ago, 40 years ago, which they used for industrial machinery, for grinding and polishing, etc. But Bort manufactured cultured or artificial diamonds. The beers had the technology. The company was called Bort, B-O-A-R-T. But they did it because it was a way of creating, grinding for industrial purposes. So it's not a new technology as such. My biggest fear was that people would get a natural stone and then grow it with chemical vapor deposition. So our buying is very specific. We've got to... Because can you imagine buying an artificial stone? And somehow it finds itself into a necklace. And you bought it. And looking under the loop, you could see the impurity. And it looked like the real thing. And we sell it to a client. So we've been studying the real... And Nikola, we've been stunning this from an integrity point of view for a very, very long time. And in terms of our whole blockchain, our whole traceability, especially after Russia with the mining, we did turn to the bears because they can certify that These are the diamonds. And they've helped us. So, it's not something that I poo-poo. I mean, poor Elon Musk must really wish that that CNBC or Bloomberg interview when I asked him about BYD and he started laughing and he said, have you seen their cars? 12, 14 years ago. We never laugh at our competition. I'm a bit like Ralph Lauren. We had dinner and we both agreed we're both paranoid. So we're not joking, we're not ignoring, but currently I just don't think consumers... I don't think you're going to have the same effect proposing... to a lady or to a man, whatever, in today's world, and say, by the way, I got you this beautiful lab-grown diamond. I'm not sure it's the same effect. But you asked another one there, Luca, you said the lab-grown, and then?

The multi-brand digital distribution. Sorry?

Oh, YNAB. All I can say about that is when I read a recent blogger's comment that all the buyers have disappeared, I immediately called my son in Burkhart and I said, no, they haven't. So there are still more people interested. But you know, we also have a moral obligation to the very many small people who are using it as a platform. And you know, you don't just dump people. So there will be a marketplace where we made the mistake was the business model of actually owning the stock was wrong. Because basically you're a speculator. You buy and you think you're going to sell it. And frankly, I didn't know how really short the fashion cycle is. If you ask people in the true fashion business how long things stay on full price in the stores, it's like this. So the far-fetched model, and I actually feel sorry for Jose. He didn't cash out a tie to the market. He didn't monetize when everybody wanted it. And he was a true believer. So actually for one guy I feel sorry for him. But the world changed. If when I asked in 2015 for the whole industry to get together and to support a single platform instead of everybody trying to do their own thing it would have been

a good platform.

And Amazon owned by the supplier, by the trademark owner. Unfortunately, everybody went their own way. And today, we've learned an enormous amount. But you know, we keep on focusing about it.

If you look at our cash cost,

We spend more, to my utter horror, on consultants. We used to spend more on consultants. Used to, that's no longer the case. Then our investment, I'm talking as a group, in YNAB. So, we cannot predict, I cannot predict, but there are a number of people were interested for various reasons. And it's progressing well.

Thank you very much. Thank you.

Thank you, Patrick. What's the current percentage of sales with the younger consumers, like up to 33 years old? What was the recent development? What are your expectations here? Because I can imagine this was quite a substantial growth driver, also for Fonclay, for example, and Cartier. And second question, why don't you have paid another special dividend despite the huge cash pile? What were the reasons behind this?

why haven't we paid another special dividend? I think a 10% increase this year is very good if you look at our competitors that have less than that. Who's had a higher dividend increase this year? I don't think anybody. And two, we're comfortable having our capacity. You know, when I got to Wall Street, Milton Friedman was the guru. And Jack Welch with General Electric embodied it. Shareholder supremacy. Everything's about shareholders. And he and I knew him well. We had a disagreement about the philosophy of how to run companies. And Six Sigma. And I said, a company is about more than just the shareholders. It's about all the colleagues. It's about the communities you live in. It's about, obviously, the clients, but the communities you live in. And it's got a far bigger social role. than just shareholder return. And I had a debate about him, about how is it possible, when you're a proxy for the US GDP, that you increase your profits every quarter, every quarter, every quarter. And that Six Sigma went to Boeing. And they replaced aeronautical engineering by financial engineering. We see what one of the great companies in the world, what happened there. And if one day I give you a compilation of all the investment banking suggestions that we got over the years. Merge here, buy that, do this, buy your own shares back. Now, when do people ask companies to buy their own shares back? At the top of the cycle. Just when they've made a lot of cash. And then, bad times arrive. In Anglo-American, when I got to Johannesburg, controlled 44% of the Joburg Stock Exchange. About 20% half of it was Anglia and the beers that really they inherited. But people forget when Mr Oppenheimer became the boss in 38, they missed their preference share governor. They built that up. But the second 24%, they built. I feel still, I can give you a list of great companies that they built. Then what happens is They move, they get a change, the non-executives start running the company, and they appoint a person that's never been in mining. A lot of these senior executives leave to other companies, and then they were at the top of the cycle, and investment bankers and non-executive directors persuaded them to do a share buyback. I think of about $12 billion. The cycle turned, and suddenly they had $12 billion worth of debt. And this unbelievable company now, when they're investing five to eight years, the mines that they want to buy happen to be developed by the current CEO, the current chairman, the Chilean copper mines. And there was an eight to ten year cycle Payback. What they're doing with fertilizer is 8 to 10 years. Now they're getting raided. You need the fat for when the bad times come. And we've, years ago I said to the shareholders, we've tried to grow our dividends by 15% per year.

On a sustainable basis. And we've managed to do that

on a sustainable basis. But in order to do that you need cash flow. In order to get cash flow you need to have brand equity to support the demand for your product. That is the mantra. But I've seen too many companies get into trouble during good times. And guess what happens when you really have bad times? People have to sell their best assets. Because nobody is going to buy the rubbish. So we'll try to equalize it up. But I think a higher than our competitor increase in dividends in Swiss francs. Thank you.

And regarding the consumers...

So we have, and I guess the same for Van Cleef, a broad range, meaning attractive to all generations. It can be, of course, the difference in the wealth distribution in different regions. And so for millennial customers, we're more than two-thirds, and for Gen Z, about 20%, and some areas, more than 30%, and some others can be, of course, in Europe, you have a higher wealth distribution for people who are more mature. But who wears in some way is quite broad as well. So we are present in all age brackets in all parts of the world and that's what has to be done. If it's too dominantly on some, either too mature or too young can be a problem. When you can have a broad view that all generations like something basically similar, it's the best. In generation buying together or sharing things in family.

There are recent changes in the last couple of years that the young generation is Is it really increased in terms of percentage contribution?

Not so significantly. We have a higher range of young generation in the Middle East and in China compared to, for instance, Europe or Japan. But then it's a question of market mix. We cannot say sometimes of having a much higher proportion in one segment compared to another.

I think there is always quite a wide spectrum of customers. There is always a new and most recent generation. So probably, to me, the customers look younger today than they did 25 years ago, but maybe it's me. Yes, I think so. And then you have some phenomenon, if I'm thinking purely about Van Cleef & Apples, for reasons that we didn't even... imagine or try to provoke it we see a very strong recognition and appeal among very very young people for the Alhambra collection for instance and even you know people that are 15, 20, 25 they're not necessarily buying but they're referencing that collection as desirable although they are not necessarily knowledgeable about precious jewelry so sometimes you have you know an impact which is a generated by the social media, whether it's going to transform into sales, we'll see. But at least it's a good indication of just a high level of desirability of all brands and traditional collections, even to very, very young generations.

We can see even for Europe, in university students, now they all want Cartier or Van Cleef. My daughter's friend all want Cartier Van Cleef. It's a good sign. That's good news.

Thanks a lot.

Thank you. I think there was Pihal. Sorry. If Pihal can ask. It was just before Patrick. Thank you. We'll go back to you Carol after this. Thank you.

Hello, Peral Dadania from RBC. Thank you. So I had one long-term question and a shorter-term question. Mr. Rupert, you've been quite good at calling the China trends. My question is on the longer-term demographic evolution that we're expecting to see over the next 20 to 30 years. it looks like it will be less favorable than it's been in the last 20 years, give or take. So I just wanted to see how you envisage the demand environment for luxury progressing with fewer customers to naturally speak to or to sell to. And then on a shorter term, just a question on inventory availability. I think comments were made that the overall demand shift is much faster these days with customers buying different locations, obviously. I think at the 3Q earnings call, one of my colleagues had some trouble purchasing a Christmas gift. So I was just wondering what changes have been made and is the product more available, particularly at Van Cleef in the key locations where you're seeing increased demand?

Thank you. Well, thank you very much. Normally I get that phone call. Why can't I get this there? I really wanted to talk about demographics when we talked about the younger consumers and percentage with the early. The one thing about demographics, you can't fight it. And we are seeing Japan being the leader, for instance. They had the most sophisticated... but the demographic plateau is inverted. And obviously with a one-child policy, China is going to face an inverted plateau.

However, we've seen in the most advanced countries

market in Japan, a growth in the domestic clientele. So I think that lead-lag effect is not imminent. It's really medium to long term. But I think in most of our traditional client Countries. We have ageing populations. Europe. Without immigration, the United States would have been in that position. China, for historical reasons. Japan. But we haven't seen that affecting us. Yet. I'm more worried about the lack of saving that if you listen to Larry Fink, how people are living longer, healthier, and that their pensions and their savings may not be sufficient. And another thing we have seen during this... helicopter money period, with national balance sheets being leveraged with more debt, and that money not being spent on long-term projects, whether they be of educational or infrastructural nature, but more on consumption. So there is a fair... amount of intergenerational theft that has taken place. And people with capital, like us, like me, we were offered free capital. And the people who really needed access to it were starved. Therefore, if you recall, I predicted social disharmony These people are not stupid. They're intelligent. And they realize now that there was a wealth shift that was... And I warned about it in 2015 and I got criticized. How can the cartier owner worry about the poor? But it was wrong. And therefore we see all this strife, the political tension, social... Fabric being torn. That to me is a bigger concern than demographics at this stage. And the clients who can afford to will not wish to be seen. That's why quiet luxury. You will recall a few years ago we said less bling. And we went to less bling. Quiet luxury if you wish to call it. But if you're Child who's at school, parents lose their job. And it's your child's best friend's father. Do you really want to drive around in a Lamborghini? I would say no. You'd go for an Audi. So it's... It is... That is a trend that I think will continue. That people will become more sober. In general... Hopefully, that will help to abate some of the tensions. But I see social tensions as more worrisome for the total, especially the conspicuous consumption.

Thank you, Mr. Rupert. On product availability, I don't know whether... Sorry. Nicolas Thierry. Nicolas, maybe. Thank you.

Yes, I mean, if you can give me exactly the reference of what you're looking for. But we have shortages that are not organized. They are mostly linked to the scarcity of some raw materials, some precious stones, and also some high-level craftsmanship. We've been developing quite nicely over the few years, so basically these capacities of production and craftsmanship have improved, not always at the same pace as the desirability of the collection. Very difficult to predict, so we are working a lot. I think there were a lot of mentions of investment in workshops and facilities, and they are quite significant for the many years to come. But it will take years also to really build the capacity we need to the right level. So I hope in a way that we will keep some forms of scarcity because it means that the zero rate is still high. But we're trying to compensate that because, as the chairman mentioned, we don't believe in organized scarcity. So we try to deliver the best possible service and the best possible satisfaction to our customers.

Maybe you can tell everybody this. I have trouble in sourcing things. It's not only the clients. I sit on waiting lists because I try not to take preference over clients, especially in limited editions. I pay full price limited edition and I have to wait, which is irritating. But on the other hand, I can't tell them don't. built 20 new factories, and then in two years' time we have a crunch, and then they look at me and they said, do you remember that? So it's not deliberate. It's not manufactured. It's really in the end, because these are not mass-produced machine products. There's a human skill and craft involved, so you can't just open a tap. And what I can tell you is not deliberate.

Thank you. Carol, Mandy, if you could, thank you. Given the time, I suggest we stop after Carol. It's already 11.30.

It's your last one, Sophie.

Sorry, I thought Ruggiero was okay. So we stop after Ruggiero then. Thank you.

Hi, good morning. from Barclays. Two questions on the watch space, please. Could you share with us how you think about the path of recovery for the watch sector? I think you mentioned that the industry should not face the same issues it was facing 10 years ago, and that there is no structural issue. So do you expect to see better trends, so positive growth from this year onwards? And then you mentioned, I think, Vacheron Constantin and Languinson, as well, that are doing well. So it's fair to assume that watches at lower pricing points are a bit more under pressure today. And lastly, you also mentioned that pricing power helps you sustain your margins. So what kind of price action have you taken last year? And how do we think about price increase this year on both watches and jewelry?

Thanks.

We were laggards. In taking pricing, some of our competitors, especially, should I say, leather goods and other categories, massively increased their prices. We were more reluctant because if the economy turns, you can never drop your prices. Start dropping your prices. Somebody doesn't want to. I mean, if you look at the Tesla thing, People buy Teslas and then they drop prices by 15%. How happy are the people who bought a month or two before? So we are cautious in increasing prices because of greed. And we were slower than our competitors in using price.

We shouldn't only say Lange and Vacheron.

And they are... I mean, they've both done very, very well, and Vacheron particularly. But it's a five... It was a five, eight-year positioning, having clarity... everybody knows the patrimony. And they have done extremely well. But it's not because of a recent sudden shift. They're now part of the Holy Trinity. To give you an idea on pricing, the Odysseus, I had to ask the people to raise the price of the first steel Odysseus, Lange. We took it from, I think, 28 to 34,000 euro. A year later, a former client, who will not get another watch, sold the watch at auction for 92,000 euro.

There was an artificial... speculation.

It is like Bitcoin. In the watch business, for the pre-loved watchers, obviously that's returned back. That was related to scarcity or not. So we don't use pricing. We could have doubled the price of the Odysseus and it would have sold. But we look at The cost, we look, so we're not short-term greedy in pricing. Yes, we have to adapt pricing in terms of inflation, in terms of cost structure, but Burkhardt, we've not used it to increase margins. We want to remain desirable, and we want to, and I think the key thing, a few years ago, we reset

what we thought the Swiss watch industry.

And I said to my colleagues, I don't think, forget about 20%. Think of 8% to 10%. That will be a natural, normal growth for us. And let's now look and remember, Please remember that it's got a very big supply chain implication, all the way through our factories. And I don't want to hire a bunch of new colleagues and then, because we overestimated three or four years later, tell them, sorry, we don't have enough jobs for you. So I think the thing that should happen calm everybody down when they look at quote-unquote Swiss watch exports. It's not 2015, 2016, 2017, where everybody sold as many watches as they could. And suddenly the Hong Kong democracy, you can mark the date when the democracy protest started. That's the day the biggest watch market in the world was Hong Kong in those days. It suddenly froze up. And suddenly all of us realized that people react to incentives. And we incentivized our people by sell-in. Guess what? We should have focused on sell-out. Now with proper data management, and proper communication with our wholesale and high-stress partners. Because if they don't do well, we don't do well. We have a bigger grasp of the total market. And the system, so we have real-time data that we never had eight years ago. So I would say, and our competitors as well, I think Rolex can sell in hundreds of thousands more if they focus on sell-in. But they've also... We have good relationship with the other Swiss manufacturers. So we kind of know, because we talk to the same dealers as well. And I think the industry here is in a totally different shape to what it was in 2015-16. But if you want to really grow over high single figure, you're going to have to win market share. I think that is a given. Whereas in jewelry, the unbranded universe is still so big that you don't have to compete only against other international jewelers. Because the universe is far, far bigger. Unbranded jewelry is still a very, very big percentage of global jewelry sales. But you know, we had...

The quartz watch industry nearly killing the Swiss watch industry.

And then mechanical watches. But then there was a total boom, growing at 30% per year. Now those were abnormal times. I think we're back to normal times. And... It's still a very well-run, and I'm talking the Swiss watch industry, and increasingly well-managed business. Is that enough?

One more thing that it used to be also done through the watch fair, Baselworld or Watches and Wonders now. And so the many makers used to take orders based on the past sales and projecting and having a year or more than a year of worthwhile of order. If you expect 30%, you would push 30% in front. But if it comes down to 15%, when there is the anti-corruption in China, and that market shrinks by 50%, or when Hong Kong shrinks, it shrinks right away. So if you have placed older, based on the plus 50% assumption, and it comes in the 12 months or so forth, at some point you have a cliff. And so the industry has learned from there and now has to have some sound in the market, but not trying to place firm orders and to push whatever you have in production to have this adjustment. So we have to learn from these things and be more realistic.

You know, and one of our directors, I can tell you it's Bram Schott who used to run Audi. yesterday he explained it to another non-executive director and he said, there's a big difference between selling and helping with buying. Our auto industry was helping with buying.

Then COVID came and they had a natural restriction on

the volume that they could produce, and helping with buying, free discounts, etc., etc., etc., disappeared. And guess what? The profits exploded. So, if you are producing more than the natural market, then in the end, you either have grey market or you have discounts. You have what he calls helping with buying. I think we're all focusing today on selling. I thought it's beautiful. I told him I'll give him credit when I quote him, so I have credited him.

It will be in the transcript, so definitely credit. Rogerio, so we'll conclude the presentation with you because given the time.

One more. One more.

Yes, absolutely, from Rogerio. Please go ahead.

Thank you, Sofia, and thank you very much again for all the help over the years. I have a follow-up on the jewelry maisons and retail KPIs. I think one of the positive surprises, I think, to the market today and in recent years has been the consistent outperformance and resilience of the jewelry maisons with local clients in the U.S. and Europe. Is there anything standing out in terms of retail KPIs when I think about average transaction value? or conversion or customer retention rates to explain this consistent outperformance versus some of your key peers, of course, in addition to all the iconic product lines that you have. And probably related to that, with both Cartier and Van Cleef, 14 billion sales today, much bigger than pre-pandemic levels. I was curious if the percentage of repeat customers is materially different to pre-pandemic levels. Thank you.

Thank you. First of all, the 14 billion do also include Buccellati. I think, you know, there was historically all of these companies were really built for domestic customers and progressively also they served, you know, international travelers along the decades. And a couple of decades ago, the importance of international travelers became so strong, especially in Europe, that sometimes, you know, at a certain company, if I talk for Van Cleef & Apples, we somehow lost track also of, you know, domestic clientele. And it's true that that was one of the positive impacts of the COVID period is that we had to really come back to welcoming, treating, understanding domestic clientele in Europe, in Japan, in pretty much all the countries where we had had very, very strong success because of tourism before. And at the end of the day, the teams are very good and they are retailers and they do sell and they do understand their clients and adapt to the specificity of the market. So yes, in certain areas, for instance in Europe, the price point will not necessarily be exactly the same. The taste will not be exactly the same as international travelers, Americans, Middle Eastern or Chinese in the past. And we need to really reconnect with the market. And I think that probably for Cartier, it was, let's say, a bit easier because they had a very, very stronger historical footprint with domestic clientele. For Anclair Pharmacos, for instance, it was really a reconnection in the past few years. But now it's definitely an asset that we're going to protect. We hope that in the future we will see traveling customers coming back, but definitely we will keep very, very strong attention to domestic clients.

And for the element of the maison, I think what comes first is what Johan said, is brand desirability. And for you, it means having distinctive style. If you think of Van Cleef, you know it's something. Alhambra or Perle, but there is a style. And when you think about Cartier, you can have the iconic collections or also some other iconic lines. On the high Jewy, people will think of a Tutti Frutti or they will think of Panther and for iconic line of Love or Justin Clou or Clash or Trinity. And there are several. In Jewy, you don't put your name on the product, so you must have a style and you must be consistent with that. If you try to be a little bit of everything... At some point, you may have some coup, but it doesn't last. If you want to build in time, you have to build strong brand equity, and you have to make it recognizable style. And that's why we do year after year to do that. Do the same for Cartier watches. At some point, trying to do too much of everything, then it lost appeal. So let's bring it to what makes the Cartier style distinctive from everyone else. And now people think of Cartier watches as something distinctive. more than before even if it's kind of a not necessarily new model but when we launched the panther it became kind of a young product worn by young women even if it was dormant for some some years and it's one of the best growing collections for the past eight years so at some point you have to be true to what the maison is about and cultivate that at the end we are what we sell So that's what we try to do. We have a rather high level of repeat customers, but of course to grow that level we need to also try constantly new customers. So, if you say the highest percentage comes from new customers, but the repeat customers are quite steady, growing, and their repeat value is increasing, which is a good sign. And the repeat value also on the, you can see on auction, is also growing for all categories. And for one question before, the resale value of lab-drawn diamond is zero. It sells only once. In auctions, our products sell pretty well.

But it's very interesting if you look at the auctions. The people are not buying gold and diamonds and platinums and rubies. They're buying a product that's distinctive and recognizable as Cartier style or Van Cleef style. Mr. Harry Winston... At first he was very close to Mr. Oppenheimer and he had at the sightings he got preference in terms of stones. Oh, in the 70s and 80s. But they didn't develop the distinctive style. They sold beautiful diamonds. And if you look back the Those companies, they were selling stones. They weren't selling style. Whereas if you look to me, you've got the tutti frutti there. I mean, everybody knows that's a tutti frutti. And I'm sorry to say, whenever Cartier has gone off piste with a product that doesn't say Cartier, it didn't sell. People have the imprint, and they have the imprint... of consistency in style. So that's really, it's not just being a businessman, it's actually having the nose and knowing this is the style. And, you know, I knew Karl Lahrfeld quite well. He was a genius. did well at Chloe and brilliantly at Chanel. But Karl Lagerfeld himself, with his own brand, could never work because he was so inventive. It's this, it's this, it's this, it's that. There was never a single style that was maintained. So, But Madame Wertheimer said, Jim, there is your picture frame and you're not moving out of that frame. That's where you stay. So you saw Chanel. I could see Chanel. I can see it a mile away. So they innovated. They contemporized brilliantly. But Chanel remained Chanel. And that's really... We have welcoming products. So... In America, especially when young ladies turn 13, 14, the tradition is, I'd like a love bracelet.

And life is about our whole past.

Everything is just about memories. There's no past. Future is about fears or hopes. Philosophically. And it's about good memories. And it's about rites of passage. If you graduate from university, your father takes you and he buys you a Cartier watch. That is, amongst friends of mine in the United States, still a rite of passage. So when you wear that watch, you remember the love of your parents that they gave to you. It's moments of history. So when you look at history and you look at watchers, on their own, it doesn't really matter. But my daughters were my late mother's watchers. Those are memories of the time they spent together. So it's very deeply emotional. And as a friend of mine says, life is about moments. And you can't plan a moment, then it's always boring. Plan bonhomie and fake bonhomie is the worst thing. But somehow, and it's not necessarily luxury, it's seeing a beautiful sunset. It's what do you remember? And that's where if we can memorize with our clients those beautiful memories, then we'll continue to be successful. So that's really the overarching philosophy. It's about seeing something and having a happy memory. And that's why, sorry, I'm not sure you're going to look back at Culture Diamond and say, oh, I had a wonderful time. Thank you. Now, Sophie, before you're allowed to go, can you bring that No, man.

The flowers. Wow. Fantastic. Thank you. No.

She asked me this morning, and I said, well, me too, no. Thank you all for coming.