Coty Inc. Class A

Good day. My name is Chelsea, and I'll be your conference operator. At this time, I would like to welcome everyone to Cody's fourth quarter and fiscal 2022 question and answer conference call. As a reminder, this conference call is being recorded today, August 25th, 2022. Please note that earlier this morning, Cody issued a press release and prepared remarks webcast, which can be found on his investor relations website. On today's call are Sue Nobby, Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Cody's earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from those forward-looking statements. In addition, except where noted, The discussion of Cody's financial results and Cody's expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release. With that, we will now open the lines for questions. If you would like to ask a question, please press the star and one keys on your touchtone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star one to ask a question. And our first question will come from Stephanie Wissink with Jefferies. Please go ahead.

Thank you. Good day, everyone. We have two questions. The first is just on travel retail, China, and e-commerce. Those really stood out to us in the quarter and the year as big drivers of growth. So can you talk about your expectations for those drivers in your fiscal 23 guidance, specifically China, if you can give us some sense of what you're assuming is And then, Sue, I'm going to ask you a tough question I'm hoping you're willing to answer, but there's been a lot made about the caring relationship and that portfolio of brands. And I'm hoping you can share a little bit about, since you've arrived at Cody, how that relationship has changed, the commitment you have to those brands, and maybe some of the performance indicators that you're looking at to reinforce that relationship. Thank you.

Yes, good morning. Thank you so much for your questions. So first, let me start with the first part, which is around the strength of the business. Indeed, the travel, retail, e-commerce, and China, and I will say a few words about China later, are clearly for travel, retail, and e-commerce key contributors to this industry. I would say, best-in-class performance that we had in Q4 and in fiscal 22. I really hope that everyone will recognize today and now that these eight quarters of results empower ahead of expectations of our guidances and, of course, most of our peers. is clearly hopefully going to be recognized as a great achievement. That's a very important point. When it comes to travel retail, and the fact that travel retail has been a key contributor, it's true that for all of us, specifically those who've been traveling, we've seen there is a huge surge in terms of travel worldwide. And this surge of travel, of course, translates into, you know, beauty figures, if I may say, specifically at Coty. Our travel retail channel has been doing fantastically well during the quarter. In EMEA, to take one example, it's three times triple digit growth, sorry, in terms of what we are seeing there. This is across the full board of categories. Our fragrances, and specifically our highest-end fragrances and more artisanal or niche fragrances, are doing fantastically well, gaining market share, thanks to the level of innovations. our, you know, new category, because we entered the, you know, before the pandemic, Traveritel was a one category channel, it was mainly fragrances. Now Traveritel is fragrances, prestige makeup, and of course skincare. And on prestige makeup there, we've been doing also fantastic figures, thanks to, you know, the different brands, be it Burberry makeup, Gucci makeup, or more recently, Kylie Cosmetics, which had fantastic results in the top airports around the world. And last but not least, this channel is now fully benefiting from the repositioning of Lancaster from a sun care to a skin care brand that started first in Hainan, but that's currently spread into mainland China at Sesora as an exclusive partnership. And we've seen that this brand has been posting a double-digit growth in fiscal 22. which overall also had to do a lot with the travelability performance. Eclonaf is clearly doing very, very well. This is clearly, I would say, the case in the prestige division. It's even more the case on the consumer duty division. And this, honestly, I have to say, it's a big satisfaction for us because our brands are becoming darling brands on social media, specifically, you know, Carole Girl, of course, but also we know. We've done a recent launch called Food Seeker that happened at the end of the quarter and beginning of Q1. That's doing fantastically well, 100% co-created with TikTokers. So clearly, this part of the business is a key contributor. And you can imagine that in the coming quarter, it's going to continue to be a key contributor. When it comes to the China topic, China, of course, like everyone, we've been impacted by the lockdowns at the end of Q3 and during Q4. But what we are seeing in Q1, now two months into Q1, is that China has, for 30 at least, strongly rebounded. You know, we are seeing a double-digit growth, not at the level of what we had inside, prior to the first, I would say, slowdown because of the restrictions, but very, very strong performance. And overall, China had a plus 11% performance in fiscal 2022 to be compared to a market that was minus one. So that's what I can tell you on the business side. Now, concerning the second part of your question, you know, first of all, I'm not going, as you can imagine, to do a lot of comments on speculations. But what I can tell you is that our long-term partnerships with our top fashion houses are continuing to be of great quality. And the other thing that I would like also to stress, now that you're asking me the question, is that I'm taking, again, this opportunity to repeat that no key license is up to renewal before five years. So everything else is speculation. But these are the two key elements I wanted to share with you today.

Thank you.

I hope this answers your two questions. It does, too.

Thank you very much.

Thank you.

Thank you. Our next question will come from Nick Modi with RBC. Please go ahead.

Thank you. Good morning, everyone. Sue, I was hoping you could just provide some context. Of course, you know, I think the resiliency of beauty is pretty clear during downturns, but I wanted to understand within your guidance how you're thinking about the macroeconomic backdrop. You know, do you think this is going to be some kind of gradual, very shallow situation, or are you expecting things to deteriorate further? from here. So that's the first question. And then the second question is just maybe an update on what's going on with inventories at retail, given that they're managing their inventories very tightly right now. So just wanted to get some perspective on what's going on with inventories. Thank you.

Yeah, good morning. Thank you for the question. So again, what I can tell you when it comes to the macro and what we are seeing currently, which is the best indicator of what we will hopefully oversee, is that the beauty category is not showing any sign of slowdown, specifically when it comes to prestige, but also the premiumized part of consumer beauty. Clearly, consumers are more than ever, I have to say, premiumizing, which is Again, I guess for all of us, a kind of surprise in the middle of all this pressure, inflationary pressure, but they are premiumizing more and more. And during Q4, what we have seen is the movement, if I take the fragrance category, moving from eau de toilette to eau de parfum, which are more expensive because more concentrated versions of something, this movement is confirmed and it's only accelerating, I have to say. So we don't see consumers trading down, we see them trading up in prestige behind categories such as fragrances, but also behind categories such as prestige makeup. And on the consumer beauty side, the part that's the best preserved, and if you listen to what some of our partner retailers have been sharing recently during their earnings, It's clearly the premiumized part of the consumer duty that's doing fantastically well. Probably, I would say that in the past, we were putting on one side things that are pricier than things that are very, very affordable. I do believe that in duty today, the market will be all about cool or desirable grants, be it from mass or prestige. and not cool and not desirable grand beats from last time prestige and those that are cool and desirable are by definition willing to be protected over protected probably because this has become i would say uh absolutely we call it the fragrance index or the fragrance effect it's clearly these products that are not only female but also male. Fragrances are really consumed today by men, women, Gen Zs, Latins, etc. in the US, to take this example. And these are categories that I do believe, because they are making you look or feel better, are becoming more and more essential categories rather than what we could consider as categories that you would shop only when you're okay. So I think it's really this that I see in terms of macro trends. In terms of inventory, to answer the second part, you know, the retailers have indeed excess inventories in some other categories, but not in beauty in fact. If you listen again to the earnings from the different retailers, if there is one preserved category, it's indeed beauty.

Excellent. Thank you very much.

You're welcome.

Our next question will come from Aria Escalante with Evercore. Please go ahead.

Good morning, everyone. My question has to do with the consumer division. If you can give us an update with regards to the supply chain challenges that CoverGirl had earlier in the quarter. and also how you see the profitability of the business going forward. It improved at least more than I thought in Q4. So if you can expand that, that would be great. Thank you. Yes.

So, I will take the question. So, hi. So, consumer beauty, first question on supply chain. And I would say, you know, it's not specific to consumer beauty. I will make a comment, you know, global on supply chain. So, number one, indeed, I mean, the issue we raised last time, you know, last time, this is resolved. And, you know, when we had the call, we were telling you that this was, you know, really in good progress. So, now this is resolved. However, from a global standpoint, Obviously, as our peers, we are not immune from current supply issues. But definitely, we are well protected, and we have a service level which is in the low 90s, which is a good performance. Why we are protecting this is definitely because we work now for several quarters on dual sourcing. on local sourcing, and also we have some contracts on freight which could protect us. So this is really the combination of all these areas. And as you can imagine, and as you know, this is the daily focus from all the teams need to keep strong improvements and control on supply chain. There is another angle on, you know, on supply chain and current stable. Even so, the demand is actually higher. So even so, you know, you have the both elements, and it is indeed what we have to manage. But we are really in control and managing nicely the current constraints. Second part, indeed, you are absolutely right. Consumer beauty, profitability, you know, moving, you know, better than expected. I mean, the reason is very simple. When I talk every time, you know, about the virtuous cycle, we apply, you know, this approach for both segments. This is the case for prestige, but this is also the case for consumer beauty. So the recipe which is really improve the gross margin This is something which is really, you know, absolutely in the DNA of consumer duty teams, thanks to all the labor mix. Sue, you know, rightly just mentioned that we are premiumizing all the new innovations, kind and free. So this is really a key element. All the new innovations we are launching are really, you know, premiumized and really helping definitely the mix and the gross margin. We are doing pricing in the current context. But I'm insisting every time is in a very granular manner, in a very detailed manner. So it's very, very precise. And also optimizing cost of goods because, you know, rationalization of the portfolio is platforming. This is really a key element that we raised a few times that when we are doing, you know, as true innovation, for example, on CoverGirl, we can use, you know, the same platform then to replicate on Max Factor and on V-Mail and by doing this easily. So that's really the virtual cycle and then of course we are using this money to inject media and the NCP. And you remember this is what we did in Q3. Since you had the question that you did in Q3, the level of the NCP was rather high in consumer duty. This was a constant, you know, a conscious decision to support all the initiatives. And then we did now delivery in a sustainable profitability and consumer duty. And obviously, we continue in fiscal 23 and beyond.

Thank you. Our next question will come from with Raymond James.

Please go ahead. Thanks. Good morning. My first question is on fiscal 23 EBITDA expectations. I see continued strong margin expansion plan. It looks like they're expecting about 200 basis points of margin improvement in the first half, but five from the second half. So I was wondering if you could expand on that and what's driving the first half versus the second half expectations. And then my follow-up question is around your view on celebrity, influencer-led brands. It's obviously a space that you have great color into, but it is becoming more and more crowded. So I'd love to hear your views in terms of relative success of your brand versus others, and how these brands differ in terms of growth expectations and support levels relative to the rest of your portfolio. Thank you so much.

Thank you. So I will take indeed the first part, you know, on EBITDA expectation. And first of all, I really want to remind that, you know, on the metrics, on top line, and EBITDA, indeed, I mean, our fiscal year 23 guidance, is completely in line with the mid-term guidance that we gave, you remember, in November. So this is really confirming the robustness of the model and really the strong achievements of fiscal 22. We continue in fiscal 23 in a very consistent manner. So, definitely, the maximum guide implies that this, but I would say it's still a little too early to go more in-depth between H1 and H2. So, it's really, definitely, we continue the gross margin expansion, DCP and fixed cost, investing and ANCP, and delivering this full year guidance. Now, you know, navigating H1 and H2, it may be something, you know, that we adapt during the year, depending on, you know, evolution of all the metrics. So still too early to debate on this. Yeah, I'm going to take the second part of the question, which is around celebrity and influencer-led brands. So if I remember well, the question was around, is it more competitive? The answer is clearly yes. This is a very, very competitive part of the business. I think all of us, we see a lot of brands launched on a daily basis almost a day. So it's very, very competitive. I do believe that there is a place where there is a kind of moment of truth, which is the Britain Lockdown. you know there is a selection that's happening because the ability to have a go-to market that's strong as a pretty go-to market you know to be present in hundreds or if not thousands of stores globally this is clearly an element that selects a lot of btc brands as potentially becoming bigger brands, and by definition makes the competition less important. In terms of right level of investment, as you can imagine, these brands are born on social media. They have natural ANCP, if I may call it like this, because of the reach of the different, you know, people who are reaching to their communities on a daily basis, and therefore there is less need to overinvest in media like we do it on classical brands. So it's really this kind of, I would say, compromise that we need to find depending on the brand and depending on the kind of innovation.

Thank you. Our next question will come from Chris Carey with Wells Fargo Securities. Please go ahead.

Hi, good morning.

Good morning.

So new launch activity was a, you know, a theme that, you know, came up throughout the prepared marks and a little bit in the Q&A session here. And a lot of focus was on the Kim launch in the front half. You noted that you're at 20% of your full year sales expectations already. Is there any way you can frame what the contribution from the Kim launch will be to the outlook this year and, in general, what the contribution from new launches will be to your fiscal 23 overall on sales and potentially on profits? And I have a quick follow-up.

Yes. Thank you, Chris, for the question. When it comes to the first part, which is the contribution, as you can imagine, we do not share figures of how much this grant is going to contribute to the growth of the company. But clearly, the start of this new line is very good. We are above our expectations. And something that's for me and for all of us is a very, very strong sign is that the best-selling item is not a single product. The best-selling item is the full line of nine SKUs, which is priced at $575. So for us, if consumers are ready to spend $575 on a set of nine products, it means a lot in terms of how they trust us, the brand, how they trust what we are doing together on this brand. So this is clearly something that we wanted to share with you. What I can tell you about the system from its pre-guide, it's not dependent on this launch. It's clearly very broad-based. And this is another item I would like to insist on a lot. It's really that my job and Laurent's job and the job of all the people at Coty is to build a growth that's as balanced as possible in terms of geographies. You've seen that insect not being overexposed to China protected this recently. In terms of categories, we are working hard to make sure we have all categories in hand so that whatever happening in one category or the other, we can accelerate in one category versus another in terms of brands not being dependent from any brand. And clearly, this is something that's a key element that is part of the way we are building the net revenues not only for fiscal 23, but also into our algorithm that we presented to you a few months ago. In terms of what are the key building blocks for our fiscal 23, fragrance launchers and category growth are clearly the biggest building blocks that we have embedded into this idea.

Thank you, Sue. The quick follow-up would just be, Laurent, you did note some buckets of gross margin in the prepared marks. It was also noted that Cody's expecting modest gross margin expansion for the year. I wonder if you could maybe just frame the cadence of gross margin expansion over the course of the year, and then perhaps any of the key buckets, the puts and takes as you see them. Thanks so much.

Yeah, so, I mean, first of all, let me remind, as you noted, I mean, gross margin expansion in fiscal 22, close to 400 basic points. So, you can really see that all the actions, all the initiatives that we put in place delivered strong results. Now, definitely, we continue the journey. We still have some initiatives that we are implementing to continue gross margin expansion. Definitely not at the same rhythm as we had this year, and it confirms really, as I just shared, you know, that we are very confident in moving to the mid-60s gross margin by 2025. What are the ingredients? What are the buckets? So let me take the key elements. Number one is mix. Mix is a key driver of the gross margin. And again, you will see concrete results of what we have achieved in fiscal 22, which is really the premiumization of fragments, either in fragments and also makeup. And the next phase, indeed, is in the skincare. But also in consumer duty. We are definitely, all the new innovations that we are launching are margin-accurative, and sometimes even at the same level of prestige. So meet the driver, and we continue in fiscal 23, and it's part of the strategy and all the initiatives that we are having. Number two is definitely pricing. And I can elaborate a little on this because this is a key element. We implemented a low single-digit price increase at the beginning of calendar 2022. We are currently, as we speak, implementing mid single-digit price increase And this implementation is doing very smoothly, so there is no impact on values. And again, it's really quality of execution. And we're also working, you know, preparing a new round of pricing for each and every single digit in the beginning of calendar 2023. So we have definitely, from a top-end standpoint, these values. Then on cost of goods, definitely there is a strong headwind, which is inflation. It's about roughly slightly above 2% of net revenue. This is what we have in Q4, and we have the same assumption for fiscal 2016. We have some strong and tangible actions which will help the gross margin. Number one is we get the effect of the closure of the factory, fragrance factory in Germany. As you know, we announced 18 months ago this decision. We executed during the 12 months, and this was perfectly executed without any disruption, and we are now getting the savings starting now. We are also working hard on you know platforming value analysis reviewing all the formulas either consumer beauty or prestige and really with the objective you know to simplify the formula to start to standardize and also to have late differentiation and by doing this we are making savings in procurement but also in manufacturing so here you know these are really the the elements of, you know, of all this growth margin expansion. This is uncaptured in the all-in-two-in umbrella, and this will keep supporting growth margin expansion in 2023. And again, thanks, I will, to keep fueling all the initiatives that we have in the close agenda.

Okay, great. Thank you both.

Thank you. Thank you. As a reminder, that is star one to ask a question. And our next question will come from Steve Powers with Deutsche Bank. Please go ahead.

Yes, hey, thanks, and good morning. Sue, maybe building on your comments earlier around balance across the portfolio, I guess I was hoping you could frame – for us in a bit more detail, just base case expectations in terms of the contributions from Prestige versus Consumer Beauty within the 23 outlook. And given the macro comments you made earlier and current momentum, I'm guessing Prestige is to, again, be an amplified driver of growth, but perhaps you could just talk through the magnitude and sensitivities there, number one. And then separately on China, I guess just a little bit more around your perspective on how that market is expected to grow in the year ahead and just how dependent your own business is on resumed market growth in China at this point in its evolution in China. Thank you.

Good morning, Steve. Thank you for your question. So let's start with the first part, which is around, you know, how we are building in statistical 23 growth. And I think part of the answer was in your question. As you can imagine, there is what we call the fragrance index that's happening as a lifestyle. This is clearly about This category clearly supporting the growth of the duty category not only in the U.S. but globally. This category is 20% above the levels of 2019 globally here again. And we see it continuing to premiumize to command higher pricing with a lot of innovations either from artisanal new brands or more mainstream brands. This is going to hold us, you know, clearly during fiscal 2023. Clearly, we will continue to execute on our make-up strategy, prestige make-up strategy. There again, the brands that we are having in this area are growing super fast, and therefore they are going to be key contributors, even if the base is smaller. So by definition, in absolute value, it's just a contributor, but still it's a key one. And last but not least, we are for the first time starting to operate a food skincare line in China. I'm thinking about Lancaster. That's hopefully going to slowly but surely become a key contributor in our growth agenda. So prestige by nature because of the markets and because of the fact that we're adding categories is going to be In a way, a key contributor to Fiscal 23. I remind you that the prestige business is 60% of our net revenues, while consumer beauty is more or less 40%. But we are also quite bullish on consumer beauty because we have incredible launchers. Some of them started at the end of the quarter. uh beginning of q1 i'm thinking about free seeker that started in uk behind the vina brand that's having fantastic first part it's the first product that has been co-created 100 percent with tick tock in mind it stickers as not only creating the products that are so part of the campaigns holding and facing the campaign in front of consumers But also in the U.S., CoverGirl, we are activating one of the most powerful franchises behind CoverGirl, which is Simply Ageless. Simply Ageless is a one-of-a-kind line in the U.S. It's really the only line that's so modern in terms of approach of the question around age. It's all about mixing beautiful skincare ingredients together with performing makeup ingredients. and this line every time we put money and investment behind we see it growing super super fast and we are also seeing including recently in the most recent nation so clearly this is i would say the way i would describe how we have built fiscal 23. now when it comes to china what we are seeing is that you know of course there have been lockdowns they have been pressure on consumption including on e-commerce But what we are seeing now two months into the first quarter of fiscal 23, at least for COTI, is that the spike in our sales is back to, I would say, levels that are not the same as the ones we had beginning of calendar. but very, very strong double-digit levels. So this is clearly something that we will count on. And again, for us, think about something quite simple. China is so small property that anything we do, just doing the right things, is a potential upside for the whole business there and therefore for the company.

Thank you. Our next question will come from Corinne Wolfmeyer with Piper Sandler. Please go ahead.

Hey, good morning and thanks for taking the questions and congrats on the quarter. So I'd like to first kind of push you a little bit more on what you're seeing in color cosmetics. Now, could some of the recent strength be coming, you know, from reopening and, you know, the summer season, having lots of weddings and events? So is there any way to kind of parse out, you know, how much could be coming from the reopening and how much, you know, is more sustained strength going forward? And then just touching on the recent AMP partnership that was announced, first we were excited to hear that. But can you just expand a bit on what this partnership means for Cody? How can we expect this to kind of help the China and travel retail parts of the business ramp faster? And then any financial implications here that you can share with us would be great. Thank you.

Good morning, Corinne. Thank you for your question. So let me start with the first part, which is around what we are seeing in color cosmetics and how much of this is driven by reopening versus, you know, something that's more sustainable. So what I can tell you is that what we are seeing is on top of the strong categories that were, you know, booming during the lockdowns and post-pandemic, Think of anything that has to do with eye products, be it mascaras, brow products, lash growth serums, eye shadows, etc. We are seeing the rest of the categories back to growth, including lip color. But not any kind of lip color, interestingly. The launches that are doing the best at QWERTY, and specifically, I think, about CoverGirl in the U.S., It's, you know, lip balms. Lip balms that probably are mixing the right things that people are looking for, which is on one side a hint of color and on the other side a lot of care. And this is, for me, a sustainable trend, if I may say. And this is clearly going to be here to stand the test of time. There will be moments where people are going to look for more pigmented makeup, moments where they will look for less pigmented makeup. But whatever will happen, what I call skin-side makeup or healthy makeup, whatever is the right name, this is the key trend behind the consumption of this category in the U.S. that we also see the same things more or less around the world in other regions. Now when it comes to the partnership that you are referring to between Antel and Alibaba, What does it mean for CRETI and for the Travelling Momentum? We are, of course, studying the consequences of this partnership. The only thing I can tell you is that there is something very strong, is that we are all waiting for the Chinese consumers to be back to travel, and therefore to add on to the travel retail huge figures. Remember, I shared with you that travel retail is back to the levels pre-pandemic, but this is still with a minus 30% less passengers. So having, you know, all these consumers back to this channel can only confirm the importance of travel retail. And I can tell you that this partnership also means that travel retail and China are more or less telling us the same story and are extremely linked to each other.

Thank you. Our next question will come from Mark Draken with Stifel. Please go ahead.

Yeah, thanks, and hello, everyone. I guess first just on marketing spend or ad marketing spend, at 20% of sales in fiscal 22, how do you think about where that goes in 2030 and beyond? Is there any particular benchmark you're using? And then sort of more specifically, is it up to kind of basis points as a percentage of sales? year-on-year obviously contributed to strong growth, but how do you think about the need to continue to increase that and the correlation to sales growth going forward? Thank you.

Yes. Hi, Mark. So, indeed, as you saw, in 2022, I mean, we were able to step up significantly our level of ANCP and now to be in the range of a high 20. We are making very clear that high 20s, you know, is really for us, you know, the accurate level. And definitely, you know, within our flywheel, this is something that, you know, we are taking also for fiscal 23. now definitely you know within high 20s you know is really the way and again the granularity is really how we spend the money so definitely is really the quality of execution so we are more than able to focus on roi so definitely the allocation of this money Everything is defined, you know, through ROI KPIs, both in prestige and in consumability. And definitely, you know, capturing the trend that Sue has just explained. And I want to build also, you know, on the, you know, well-balanced footprints, because then we can allocate the money per geography, you know, in a balanced manner, per category, and also per brand. So this is definitely what we are doing, and allocating, you know, per initiative and really per ROI. Another element also, because of course we are talking about percentage, about dollars, that is also, you know, within ANCP, we have also, you know, some productivity and optimization initiatives. Definitely, if I take an element that, you know, we are calling other ANCP, which maybe is less visible, of course, you know, media is very visible, but there are also some other areas which you know, are, I would say, are non-working, where we have also within the All In to Win umbrella, some strong productivity initiatives. I can just give you some examples, you know, but sample, testers, marketing materials, which are definitely areas where we have some optimization. But always with the same mindset, that optimization productivity we are doing on this line, we can reallocate in the working media and push definitely, you know, the business agenda.

Thank you.

Hello?

Yes, we're good.

Great.

I thought I got cut off there. I wanted to ask about just how to think about margin profiles across the prestige businesses. Any material differences in thinking about the licensed versus fully owned brands and by category makeup, skincare versus fragrance? Thank you.

We don't enter this level of detail, but what I can tell you again is that, of course, prestige, gross margin, as you know, is higher than consumer duty, so this is a fact. But again, as I shared several times, the gross margin agenda is valid for both segments. we'll avoid a little more within prestige but also consumer beauty. Definitely that all the initiatives that we are making, so prestige makeup, e-commerce, but also geography, we mentioned about China, all these initiatives are really driving gross margin accretion. So this is really the way we are taking the gross margin agenda. Thank you Laurent, thank you everyone. So again, Thank you, Mark. Thank you, Mark. So, again, we are ending the call right now. Super happy, again, to report these results. Again, best-in-class results. And we hope to talk to you soon about, you know, what's happening in Q1. Thank you so much. Thank you. Bye-bye.

Ladies and gentlemen, this does conclude today's call and webcast, and we appreciate your participation. You may disconnect at any time.