Natuzzi, S.p.A.

You are now rejoining the main conference.

Ladies and gentlemen, please stand by. Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi Second Quarter 2022 Financial Results Conference Call. As a reminder, interested persons can join this conference call live via telephone by dialing in the following number, plus 1-412-717-9633, then passcode Natuzzi. All participants are in listen-only mode. Following the introduction, we'll conduct a question-and-answer session. will be provided at that time for you to queue for questions. Joining us on today's call are Mr. Antonio Achille, Natuzzi's Chief Executive Officer, Mr. Jason Camp, President of Natuzzi Americas, Piero Direnzo, Investor Relations, and Mr. Pasquale Natuzzi will join us in a few minutes. As a reminder, today's call is being recorded. I will now turn the conference over to Piero. Please go ahead.

Thank you, Kevin. Good day to everyone, and thank you for joining the Natuzzi's conference call for the second quarter 2022 financial results. After a brief introduction, we will give room for a Q&A session. Before proceeding, we would like to advise our listeners that our discussion today could contain certain statements that constitute forward-looking statements under the United States securities laws. Obviously, actual results might differ materially from those in the forward-looking statements because of risks and uncertainties that can affect our results of operations and financial conditions. Please refer to our most recent annual report on Form 20-F filed with the SEC for a complete review of those risks. The company assumes no obligation to update or revise any forward-looking matters discussed during this call. and now I would like to turn the call over to the company's chief executive officer. Please, Antonio.

Thank you, Piero, for the introduction and good morning, good afternoon, all respected investors and analysts. So, as usual, let me start sharing a bit what has been the quarter results. As you've seen from our press release, we close the quarter on a positive note. Both in terms of sales, which were a single digit above 2021, that is, you know, has been a very strong year for the industry, as well for Natuzzi. We closed 2021 30% above 2020, so having a quarter, an alpha, which closed 7.8 on first half, I believe, has been a good result. And of course, we are very much higher than 2019, which has been the last year or normal condition for the market before COVID. We closed roughly 27% above 2018. The driving force of the growth has been the branded business. We will be commenting more in detail, but our branded business now represents 90%. As you know, this is the future of the company. We are on a journey to become a brand retailer. and the branded business now is more than 90% overall turnover. It's also the sixth sequential quarter with positive results after quite a significant track record of investment of the company that resulted in negative operating profit. We close with 1 million Operating Profit in the second quarter. We spell out that in comparing this figure to 2021, you need to take into account the one-off measures that were still in place because of COVID that accounted 1.5 million in 2021. So, in other words, the operating profit of 1.1 million For the second quarter, compared to 0.1 operating profit of 2021, once the official number is netted by the one-off measures. We continue paying significant attention to cash, also given the uncertain times every business is running through. Our cash position is close to 60 million, roughly the double that we need to manage our daily operation. And this is a bit the picture, in essence, of the business. We will be discussing the specific action we're taking as a leadership team to face a market contest that remains not only for us, but I would say for the full For the whole furniture industry, and I would say for the whole economy, quite challenging because of multiple factors. Those factors have also been affecting our business in terms of orders. In fact, last week we have seen a trend less positive than what has been at the start of the year. And we are taking, and I will discuss later, both the top line measure and cost measure to ensure that these difficult conditions are not impacting our financial and our long-term plan. Let me stop here. I'd rather, you know, continue the discussion in more Q&A fashion rather than, you know, in this opening.

Thank you. And now we can open your question and answer session. If you'd like to ask a question, please use the raise your hand feature. Once again, the question and answer session is now open. One moment, please, while we poll for questions. Our first question is coming from Steven Regan from Regan Analytics. Your line is now live.

Yeah, good morning. Morning. Good morning. Good, we have connection here. Or should I say good afternoon, rather?

Okay, well, enjoy your evening after this call.

Can you please just explain your FX strategies? Obviously, we're in unprecedented times in the FX markets globally. Can you please explain how Natuzzi is taking steps to mitigate that? And where is most of our money? Is it in the Euro? And I thank you for taking my call or my questions.

Thank you, Steve. So let me start from the last part of your question. So we work in 100 markets. When we look at the buying, it's predominantly in dollars because some of our key ingredients, like the wet blue, so the leather, is negotiated in a dollar. And we buy from China, where we source typically motion and other, the same metallic part, in dollars. When it comes to selling, our business has a significant portion in the U.S., which more than offset the purchasing in dollars. So at the moment, we rather benefit than suffering from a stronger dollar. More in general, we're working with several currencies. The way we do through our financial treasury department We don't do covering because the covering will be too costly. We look and develop position short-term to offset the FX fluctuation. So we basically do short-term coverage to offset the FX fluctuation. and I think for what I've seen so far, our Treasury Department has been quite successful in doing so and navigating quite nicely through this FX volatility period.

Excellent. That's really good news. A follow-up question. The stock trading on the New York is trading at cash, basically U.S. dollar, trading at cash. What does the company... Think about that, number one, and what steps can we take to improve shareholder value? And thank you for taking my questions.

So what I think about it, I will use the polite version of what I think about it. I definitely see a bit of a symmetry here, maybe given the past history of the company of not being systematic in providing return to investors. Last year we closed with a 25 million EBITDA. As you said, we traded cash, not even considering the cash that we don't have on our balance sheet, but that we have in our JV, with this 60 million euro, or 60 million dollars right now, where we have a minority, and then an entry is not consolidated in our balance sheet. But also that, in a sense, is part of the broader value creation story of Natuzzi. So let me take the positive angle. I believe as a CEO and as a leadership team, we need to do two things, and it's actually in this order. First is to systematically deliver value to shareholders, and hence ensuring marginality and profit and cash and return on capital employment. And this is, let's say, entirely on our end. Of course, these years are a bit more Exciting that they wish. The second element is that we're trying to as well do to bring some spotlight or clarity on the story of Natuzzi, which, as you know, is a micro cap in U.S. So we run the risk of being neglected for for investors is also not benefiting from analyst coverage. and S. is our duty not to do too much romance about what we are doing, but at least to provide clarity. As part of that, we are doing quite regular calls with potential investors. We are also planning to join some events late October, like LDmicro. Maybe it's not the real time, but again, it's not a whole show. It's simply sharing Thank you. Thank you.

Next question is coming from David Canaan from Canaan Wealth Management. Your line is now live.

Good morning, guys. Actually, congratulations. Congratulations on turning a profit, you know, with all of the challenges that you were facing in the quarter, China, inflation, et cetera. So just to scratch beneath the surface in terms of some of the operating lines, it looks like the operating expenses were down from like $37.7 million down to $35.6 million, despite revenues being up about six and a half. And it looks like That was mostly transportation. Can you just confirm that for me? Or were there other items that contributed to that reduction in OPEX? And as we get into the second half of the year, I mean, when we look at spot rates and container costs, it looks like it's going in the right direction. But can you give us a little bit of update there?

I'm going to start, but definitely I will Jason Jampin, and I'll tell you why. So your reading is spot on, Dave, as typically it happens. So transportation helped us. 80% of our transportation costs, which are significant, in the range of $60 million, are towards the U.S., given the fact the U.S. does not have production and from different region, so Natuzzi Italia from Italy, and then Branded Business from Vietnam, in addition from China, so quite long route. What we are seeing is definitely a significant decrease in freight route chart, not yet at the level of pre-COVID, but significantly lower than what we experimented in the most dramatic part of the industry last year, especially, or last year, also this year, when, you know, during Chinese New Year, the tariffs were reporting all-time records. So there we see long-term trends. On inland, transportation, which, again, for U.S. is a bit of an issue, The fuel and other things are contributing not to have the same sharp decrease. So we are passing some of these, let's say, decrease the cost to our clients, but always in a very cautious manner, not to jeopardize our marginality. Having said that, given the fact that the U.S. is really central for this, maybe I will ask Jason, and if you allow me Jason, maybe you can also share a bit how we deal with freight to Natuzzi Italia as opposite to Natuzzi Edition and take it also from there.

We're happy to. So during last year, we probably adjusted our landed pricing to our customers three to four times depending on the brand as freight was rising. And We're definitely seeing a strong downward trajectory and together with our global freight team, watching things carefully and adjusting our surcharges downward as it seems prudent and keeping a careful eye on our competition as well as they make moves with their with their surcharges and landed pricing. So it's a big focus of ours to make sure that we're protecting our marginality but staying competitive as well.

Okay. So in other words, the reduction in transportation costs is persisting into the second half of the year. Now, when I look at, for example, commodity prices, many of the raw materials that go into your products, we're seeing them decrease now. I know that there's a lag between the price increases and the invoice sale, and when we, through the P&L, start to realize the improved gross margins, but I see every indication that that's going to happen between factory 4.0, reduction in raw material costs, you guys taking price increases, transportation being down. All of that points to better gross margins in the future. So my question is, will we see that in the back half of the year, start to see it, and then will it be better in 2023?

So let me start answering for what I have visibility on. As you know, Dave, we don't provide guidance, but let me try to be explicit to your question. In quarter three, we see benefit also because our price increase. typically are embedded in the system in March-April will start being visible in terms of top line. So the second half results don't yet include the impact of 2022 price increase for the business cycle of our order to revenue business that you mentioned. So that will happen. Transportation, I share the direction, the trend. Material, I keep reviewing that with our team. It's a bit of a mixed picture. There are some materials which are start decreasing, notably leather. Other, like fabrics, they're not decreasing. Motion, they're not decreasing. Because, yes, there is less demand, but also those industries are quite energy-intense. and we all know the dynamics about energy these days. So on material, the picture is more the average. They are material where there is less demand and as costs start normalizing They clearly inverted the decreasing trends, like leather, which is a byproduct of meat production. Fabrics, which again is quite relevant to our business, and other metallic parts, they're not decreasing because of the cost of production for those materials that suffer from higher energy costs.

Okay.

But Dave, sorry, maybe it's a long story. Let me give you a short story. Clearly, the idea is to keep managing the company for March, and that's obvious.

Understood. And then a quick question for Jason, then I'll go back in queue. Can you give us an update on the North American branded product expansion, in particular Italia products? How we're doing? Any stores that have been open subsequent to our last update and what the next six to 12 months looks like?

Happy to, Dave. So by the time 2022 ends, we'll have opened seven stores, six of those additions and one Italia. and then in the first half of 23 with signed leases, we'll open another five stores, all of which will be Italia. And so that's maybe a quick summary of the openings ahead. and happy to kind of answer any more specific questions that come. The six openings that will open in Italia will include locations like La Jolla in the suburbs of San Diego, Manhasset, Houston, west side of Atlanta. So we're really excited to get this going.

I'm sorry, Jason, you partially broke up. So tell me how many have you opened so far this year and then the six new openings, when will they be complete?

So in total for 2022, we will open seven stores, six of those which are Natuzzi editions and one which will be Italia. that our first Italia opening will be right around December 1st of this year in La Jolla, UTC. And then in the first half of next year, all with signed leases and design complete, we'll open five Italia stores in key markets around the country.

Understood. Thanks, guys.

You bet.

Once again, the question and answer session is now open. Please use the raise your hand icon in order to ask a question today. One moment, please, while we poll for further questions. Once again, the question and answer session is now open. Our next question is coming from George Menes from MKH Management. Your line is now live.

Good morning, guys. Good morning, George. Good morning. Can you guys give us an update on the China JV? I don't recall whether you actually give information on the revenue of the JV, but maybe you can tell us. I think you have 25 DOS stores there, the rest are franchises. Help us remember how the JV is constituted and maybe also what cash the JV has.

Okay. I will start, or maybe I ask Piero. I know them by heart, but I want to be sure I quote it rightly, to pull out the information on the U.S. and the U.S. storage on China. And also, if we discuss it before, also revenue in 2021. So the GV, George, has been constituted at 49.51. So we don't consume the data line by line. We just get benefit of it historically in two ways. And now I mention a third way we are implementing this year. The two ways is the selling margin. So the GV source products from us. and as any third party pays our industrial close to pasta margin and that's the first way we get benefit from it. The second way is dividend, so every year the GV distributes dividend and 49% of that goes to Natuzzi and those are the historical avenues that were used to distribute value to Natuzzi. We discussed and agreed with the board a third way, which is distributing some cash that is sitting in the GV, which is not needed for sustaining his business, in form of capital reduction. That has been approved, is on the way, in time of execution. We are all working to make it happen within this year. I will disclose the amount as the delegate Let's say finalized, but that is something which has been agreed by the board of directors of the GV based on my proposal to do some capital reduction. Those are the more short-term, let's say, ways. Mid-term, as I discussed, I believe the GV is quite interesting in terms of growth, and maybe Piero now can comment because it's been almost up in business every year. So there might be some long-term Thank you very much. Thank you. Piero, if you can share The stores, and remind me if we disclosed the revenue as well in the past. If so, please do it again now in the score, 2021 revenue.

Okay, Antonio, we generally disclose once a year within the 20F. I mean, I'm talking about the revenue of the AJV, because they are listed as well. And as for the number of stores, as of June, we have in China, we have 378... Stores, of which 25 are directly operated by DJV itself, and 353 are FOS. The bulk of the stores are Natuzzi edition stores versus Natuzzi Italia.

Can you remind, otherwise I can pull it out, but can you remind that we closed 2021 in the 20F?

Yes, in terms of revenue, the revenue of the JV were 96.3 million of euros in 2021 and during the prior year revenue was 62 million of euros. So 50% more.

This year, as you know, China is the last big continent still affected by COVID. So we had until May 18 stores that were closed. Now stores are open, but the COVID-related procedures are not really encouraging for shopping in the sense that, to my latest information available, if a case of COVID was reported in a specific department store, all people entering this apartment store and that they would have need to quarantine. That, of course, does not create a strong excitement to be in the apartment store. So that is something which is still affecting our traffic in the store. This year, we opened, I believe, 38 stores in China, no, Piero?

Correct, correct, 38 stores.

You're in the first six months. In the first six months, we opened 38 new stores. So even in these, let's say, circumstances which are not really favorable, still our retail progression in China is continuing. Antonio, I'm here. Hi, Pasquale. Welcome. We mentioned you were in a client call.

I'm sorry for being late, but I had a call with the chairman of a big company where we are trying to do business with.

Fantastic. We were just commenting. We just shared a bit the status of the art, and now we're getting questions from our investors. Okay.

And also, maybe, Antonio, remind us how much cash there is in the JV. and of course 49 of that really is yours.

Yeah, isn't there in the range of 60 million, but again, Piero, if you can help me to be honest under the figure? Again, we cannot disclose how many are... No, no, but the one on 21, the one on 21, the one we closed on 21.

Oh, sorry, sorry, sorry. Yes, I can. It was... Okay, the JV had 62 million roughly of euros at the end of 2021 versus 43 million at the end of 2020.

Going back to my initial point, Giorgio, and thank you for pointing to that, that's clearly, I believe, one of the early investors pointed out that we're trading almost at parity with our cash, that without... calculating what is the share, which is 49% of those 60 million. As I mentioned, eventually, which I believe is a significant progression or progress, we agreed in the Board of Directors of the GV to do this year a first capital reduction because the nature of the business in China, which is based on retail but mostly in the form of franchising, does not require Thank you very much, George.

Thank you. As a reminder, the question and answer session is open. Please use your raise your hand function to ask a question. Our next question is a follow-up from David Kanin from Kanin Wealth Management. Your line is now live.

Yes, can you give us an update on your High Point property? I believe it was on the market for sale. Have you been able to consummate a sale lease back?

Thank you for the question, Dave. You are absolutely right. We are working to complete a potential transaction. We are entering in the final round of discussion with potential investors based, as you rightly mentioned, on a sales in this back frame. I'm not able at this time to disclose much more than that because discussion is ongoing as we speak. We're working and we hope that in the fall of us and Walter Coles, we can announce a positive outcome. That is part of our strategy to focus on the investment that makes a difference from the long term, which are our restructuring plans, accelerating the factory 4.0, and our retail development. So the plan of doing, you know, dismissal of non-strategic assets, the largest being a point continuous. There are other tactical assets that we might look at selling, including some production units that we have in Italy which are not strategic. But of course, we are very careful to put those assets on the market in a moment where the market is clearly not in a buying mood.

Okay, thank you. You know what? I've got another follow-up, I'm sorry. Just, again, to me, sort of the bright spot or silver lining here is the reduction in operating expenses as a percent of revenue. Because if I model going forward, if you would have had a 35% gross margin, we would have made like $5 million for the quarter, okay? So my question is, Aside from the transportation cost, which we know continues to come down, was there anything anomalous in OPEX that benefited the quarter that we would not expect going forward?

So you mean just in OPEX? So in OPEX, we have, let's say, three main items. One is the transportation, as we commented before. where the picture seems to be starting a more positive trajectory. The second is material, where we discuss here the trend is not homogeneous. On some material, like wet blue, we see decreasing cost. On some other material, like fabric or motion, whose production is high energy consumption. We don't see homogenous trend. The third, let's say, element is our transformation cost that I don't know if you mentioned or not, but that is an important element we're working on. We're working on in two major ways. One is to have an optimal industrial production allocation. As you know, we have multiple sites which include directly operated sites in Italy, Romania, China and Brazil, and outsourcing, the largest one being Vietnam and starting in Mexico, but also Portugal and EMEA. So the first strategic decision is reconfirming the location among those industrial platforms, and that is based on multiple factors, which include the transformation cost, The tariff and the production cost. The second big levers, which is more controllable, is the production cost, the transformation cost in our own factory. Here you are aware of the Factory 4.0 project I discussed before in Italy, which is delivering interesting results and is becoming the standard for all factories. We're also looking at a way to accelerate The transformation especially for Italy, where we produce Natuzzi Italia and Devani Devani, the sub-brand of Natuzzi Edition for Italy. Here we still employ 1,200 people and we're carefully looking at ways to accelerate the restructuring. still being compliant with all the agreements that have been taken by the company with trade unions and the public minister, which are important stakeholders in the local work environment. So, long story to say, transformation is also an important part of that, and we are working to make better industrial strategic sourcing decisions and to continue lowering our transformation costs, especially in Italy.

Okay, thank you guys. I'm sorry.

No, it's just, right to summarize Dave's question, I think, you know, cost came down, operating cost came down about 400 basis points year over year. And I think maybe in summary his question is, you know, Is that the new baseline for our costs, or was there kind of some one-time benefit that we can't count on on an ongoing basis?

Since you phrased it, you're very free to answer that question.

Well, honestly, at a global level, I'm not sure I have enough visibility to answer it, but that obviously was great news for everyone to see those costs come down year over year like that.

So, as I said, this is a complex equation because they are conflicting forces. So, transportation, we discussed, it seems pretty much taking a direction. It was clearly a speculative bubble, and as demand is decreasing, that is decreasing, especially for shipping. For inland transportation, where the fuel has a higher relevance, the trend is less sharp. When it comes to material, there are conflicting forces. I believe I already answered to that. In the sense that, in general, for the suppliers that serve durables like furniture or the car industry, the demand is less stronger than 2021. So it's providing, let's say, a benefit in terms of potential reduction in cost. But at the same time, some of these producers, like fabrics producers or motion producers, they intensively use energy in their production process. And as you know, energy has hit a record high. So the net effect, I've been reviewing the cost trend with our purchasing team this morning. There is a diverging trend. Wet blue, where the energy I've been also exchanging views with some of my peers CEO of an industrial company and they also are witnessing the same reality, so there is no single answer. Their answer is it depends, which means it depends on the specific material, and it depends on where you source it, and it depends on the timing of your question, because out there is very much still a volatile market when it comes to energy costs and raw material costs.

Thank you guys. Good luck in the back half of the year.

We don't want to project any false reassurance on this because we are just taking what the market is delivering on the materials. What I can reassure you is that we are working to have a better control of the dynamics of those costs and how they impact our final unit costs. For instance, we just launched an internal project with our IT department as part of the broader digital transformation to immediately recalculate the unit cost of a specific product based on the latest information on the raw material dynamics. So that in the pricing and in the margin calculation, we don't use any more standard cost which in a more stable world were somehow useful to take this kind of decision during the year, but we are trying to use punctual information on real cost for individual product to take any pricing or margin decision.

Thank you. As a reminder, the question and answer session is open. Please use the raise your hand function to be placed into question queue. One moment, please, while we poll for questions. If you're not connected to the web and would like to verbally ask a question, you could also press star one. One moment, please, while we poll for questions. Once again, use the raise your hand feature, or if you're dialed in over the phone, please press star one. One moment, please, while we poll for further questions. We do a follow-up from George Melas from MKH Management. Your line is now live.

Great, thanks. Antonio, I think that you unveiled a new store concept in Milan a few months ago. Can you tell us a little bit about it and maybe what's the reception that you've had? And also, you know, what would be the plan to propagate that store concept? Maybe sort of, first of all, what you learned and how you think that's going to impact other stores. How are you going to roll out the lessons that you've learned?

Thank you, Giorgio. So, about the new store concept, for those who were not able to see it in Design Week, in Milan is a concept for Natuzzi Italia, our ambassador brand, which is intended to be propagating the DNA of the brand. As you know, the brand speaks about Italy and especially speaks about our reality of Apulia, which is a magic region, and we try to convey that magic in the product and the retail experience. So the concept is about light colors, about, you know, resonance with our territory. That, George, is the standard for any new opening. And in fact, in China, the figure we mentioned before, the store for Natuzzi Italia has been opened with the new concept. The new store for Natuzzi Italia that will be open in the U.S. will be open with the new concept. So that is the image and the feeling that the customer globally will get from Natuzzi Italia, which is a global brand. This question allows me also to make a very transparent way another element. As you know, Natuzzi has heavily invested to become a brand and a retailer. The two things go hand in hand. We are still with a lot of improvement on both areas, and we are realizing that retail experience is very important, is paramount importance. Retail experience is of course made of the infrastructure, which is the store that I mentioned before, but it's made of a lot of other details that we are learning across geography and we are trying to standardize in a blueprint that can become the standard not only for our US, but also for our franchising partner, which is still and will remain the predominant of our distribution. Here I'm talking about the way in which the product is shown, the merchandising, the visual merchandising, all the clienteling that is happening in the store. I've been working with companies that take decades to learn the job. We aspire to go through a faster cycle, but we are very transparent that we still have a lot of hard work to do in that direction.

Great, okay. Very helpful, thank you.

But again, just to be factual, and again, we will talk a bit, if you don't ask me, I will do about the business trajectory, but if I look, for instance, at U.S. retail, where U.S. has been in this quarter, a market which suffered, especially on the wholesale side, if I look at The performance up to date, retail of Natuzzi Italia is up 60% versus 2019. I'm talking like for like. And it's also up, you know, again, if I look at year to date, it's also up versus 2021. So there's a lot of work to be done, especially in Europe and also in the U.S., but those figures confirm us that Natuzzi has the legitimacy to run retail.

Thank you. As a reminder, the Q&A session is open. Please use the raise your hand function if you're on the webcast or you could use star one if you're dialed in via telephone. One moment please while we poll for further questions. Once again, use your raise your hand function to ask your question via the webcast or star one to verbally ask a question over the phone. One moment, please, while we poll for further questions. And if there are no further questions at this time, I'd like to turn the floor back over for any further or closing comments.

So, gentlemen and ladies, thank you for your attention. In closing, I might remind you a bit what has been the theme of today. So we are closing a quarter nicely in terms of growth, and also we are satisfied by seeing that this is the sixth consecutive quarter that we close with positive results, notwithstanding the issue reported in China. which created some shortfall in production. We feel that our cash position of roughly 60 million in the S.p.A. plus the one we own in China is a good platform to sustain the adverse headwinds of this day. In the same times, we've been transparent that Natuzzi, as other players in the furniture, has been reporting since I would say late April a softening in the demand. This is for the reason that you know about the economy cooling down because of multiple factor. We of course are taking very seriously this and reacting at least with four major interventions. The first is about commercial focus. We are staying closer than ever to our clients. And when I say we, it means the full organization, starting from the chairman down to the last regional manager. We are reviewing the organization where it makes sense to review the organization. We are taking any single opportunity, like the upcoming iPoint market, to show what are the latest innovations in our retail and product offerings. So, commercial focus is very important to us. We're also launching new growth opportunities. Just to name one, trade. Trade is the business we do in our store, that we do with our architect and designer. It's an important component in some stores, not so important in others. We just hired a senior manager. to support creating a common methodology in an accelerated part of the business. And I can mention other initiatives here to support growth, like the GV in Vietnam. So two major actions on growth and top line. Equally important two actions on our cost structure. We keep a very high attention on margin. As I believe you captured from the discussion on the cost of material and transformation, margin is not something we can give from granted. It's a continued fight against external elements, like the cost of material, and against internal elements, which is our unit per minute production. So we need to stay very focused on margin. And that is the third point. The fourth point is Accelerating Restructuring. We have several wall streams to optimize our internal costs, and those have been always there, but we're looking at those elements with an appetite to do more short-term. The last point, which we somehow touch upon with FX and other dynamics, we keep monitoring very closely our financial and our cash position. We believe that this turbulent time is very reassuring for us as managers and I believe as shareholders to know that we are using the lens of cash to prioritize any decision we do in running the business. So that was my final comment. I don't know if Pasquale, Jason, Piero, you have any final comment. Otherwise, I can thank the audience for their patience this morning.

You did a good job, Antonio. You did a good job. Thank you very much. Very clear.

Thank you so much, everyone.

Thank you so much everyone. This concludes the conference call today and please contact us for any requests you might have. Thank you again for joining and have a nice day. You may now disconnect. Thank you so much again. Bye bye.