Brunello Cucinelli Spa

Good evening, Costco operator speaking. This is the presentation of the first half 20 results of the Brunello Cucinelli Group. I'd like to remind you that all participants are in listen-only mode. So the initial presentation, after the initial presentation, there will be the opportunity to ask questions by the financial markets. Speakers will be Mr. Brunello Cucinelli, Executive Chairman and Creative Director Moreno Ciarapica, CFO, and Pietro Arnabolti, Head of Investor Relations. In order to receive help from an operator during the conference call, please press star followed by zero. And now I'd like to give the floor to Brunello Cucinelli. The floor is yours. So here we are, and good evening, everybody. I hope you are all well-rested. so good evening investors, analysts, and journalists. You know down well that we always appreciate these exchanges very, very much. We actually spoke just over a month ago, but during this year that we have dubbed a transition year, it was our desire to basically release and communicate data pretty often and also to convey our impressions on how the market and the world is doing. We're all based here in Salomeo and would like to schedule the call as follows. I'd like to read out the highlights of the first half and then my comments and after that the CFO Moreno will delve down and then I'll resume the floor and tackle the following themes. First of all, how the company operates today, then deliveries and winter goods production, then physical collections for spring-summer 2021 and orders of the multi-brand accounts in our portfolio, then our take on the multi-brand performance, e-commerce, Then excess inventory in the first half, but I know you are familiar with this theme. Then the performance of markets, very important. And then a sum up of the expectations for the second half of the year, i.e. the third and fourth quarter. And then one last thing, the sum up of our expectations for 2021 and 2022. I'd now like to read out my comments. slight decrease in revenues expected revenues minus 10% supported by the solidity of the business and of the strong order intake for the spring summer collection 21 with a positive performance expected performance both for the third and for the fourth quarter first half was strongly impacted by the closure of a very high number of boutiques worldwide due to the pandemic. Net revenues, you're all familiar with this figure, as of 30th July, 205 million minus 29.6 at current exchange rates minus 29.8 at concert exchange rates. At the DA adjusted, minus 14.1 million with an incidence on revenues amounting to minus 6.8 EBIT adjusted minus 29.8 million euros, incidence on revenues minus 14.5. Then net income adjusted minus 25.8 million euros, incidence on revenues of 12.5%. Then investments, 22.4 million euros in line with the three-year plan and net financial position 136.5 million so this is the way i have defined or described this half following this half year strongly impacted by the pandemic we are now moving towards the significant trend reversal since july the first we have been looking at the company with a fresh new eye considering this to be a year of transition between a past time and a new time having reached the end of august We can envisage that this trend should result in rising sales compared to last year for both the third and the fourth quarter. Therefore, 2020 should feature a slight decrease in turnover of around 10%. As to the collections, the Spring-Summer 21 collections have been met with much success. and the ensuing sizable order intake prompts us to envisage a good 2021 with revenues increasing by around 15%. In addition, the above leads us to view 2021 as the year of rebalancing. And now Moreno, the CFO, will focus on the details, and then I'll resume the floor. Thank you. Good evening, everybody, and thank you, Brunello. I'd like to sum up some issues that have some topics that are typical of the performance of results in the first half 2020 and of course available for any questions. We'd like to recall that in all these months strongly affected by the pandemic, we have kept our corporate structure unchanged and strongly sound. maintaining and guaranteeing the employment level and the wages of all our co-workers with a healthy cost control in order to resume a multi-year growth plan as early as in the second half. Slide number 9 of our presentation basically shows the income statement and it proposes an adjustment of the items concerning the EBITDA, EBIT, EBT and net income. The adjustment of data as of 30 June 2020 neutralizes the accounting effect of the application of the IFRS 16 principle and of the extraordinary provision of 30 million euros concerning the new project Brunello Cucinelli for Humanity aimed at donating the excess apparel that was the result of the emergency COVID-19 situation and of the subsequent temporary suspension of sales. This provision is mirrored in the item adjustment to the value of assets and it mirrors the estimate by the management about the value of the items above. The adjustment of figures as of 30 June 2019 neutralizes the accounting effects of the IFRS 16 like this year, and the tax benefits arising from the so-called patent box amounted to 2.5 million in the first six months of 2019. Slide 10 brings a detail of the reconciliation between reported and adjusted values. The value of adjusted value amounts to minus 14.1 million euros as of 30 June 2020, and EBIT adjusted amounts to minus 29.8 million euros before moving to commenting the balance sheet would like to report the stability of the first margin on slide 11 amounting to 67.1 percent as of june the 30th 2020 against 66.6 percent last year whereas The operating costs performance is linked to the initiatives ongoing, which keep supporting future growth plans and keep the strength of the corporate structure. We'd like to point out some cost benefits linked to some reductions in leases for the lockdown confinement periods offered by some landlords in Asia and Russia, as well as some contributions issued by the government to support employment and wages. These savings, as a whole 7 million euros, basically accounted for an incidence on revenues of 3.5%. As far as net working capital is concerned, slide 13, the inventory reports an increase linked to two main effects. The first one is the confinement effects with the deliveries of the winter collections that were postponed by the very same amount of time, but it was, however, very effectively caught up with a lot of work. Secondly, the development of the business, the expansion of the network, including five new direct boutiques in the last 12 months, two hard shops, and sizable Expansions in selling spaces, the development of the new kids collections and the Sartorias Romeo project and finally increase in the digital channel. The reduction in receivables mainly mirrors the performance of sales during the lockdown and the concession of some deferred payment terms to some of our multi-brand clients. This activity resulted in receivables past due, as of June 30, 2020, increasing by 11 million euros vis-à-vis last year. In the past, we made the same choice when, for example, in 2001 and 2008, we managed our receivables with the very same availability and flexibility. And the result of that was that short-term we went back to normal without compromising business opportunities. Considering our receivables healthy and payable, we have prudentially set aside the provision for doubtful receivables in amounts of 840,000 euros. Therefore, the balance now amounts to 1.9 million, balance of the provision. And the use of this provision for losses occurred in this period was very limited and amounted to 235,000 euros. As far in line with our history, which usually losses on receivables were always 0.1% of revenues. As far as trade payables are concerned, no changes in the payment timing vis-à-vis suppliers, co-workers and advisors. In the first half 2020, we thought it was a priority to maintain the strategic investment plan supporting the brand, production, and the exclusive presence on markets. Investments over the time concerned, on slide 14, therefore amounted to 22.3 million euros, up against the 18.8 million euros invested as of 30 June 2019. As far as the financial position of the group is concerned, Slide 15, the net financial debt, the characteristic figure amounts to 136.5 million euros as of 30 June 2020 against 46.6 last year. Including the financial debt for leasing as required by the IFRS 16, the net financial debt amounts to 621 million euros vis-a-vis 436 million last year. Due to new leases contracts, the performance of net debt over the time was strongly impacted by the effect of the pandemic. That can be summed up in three main streams. The increase in networking capital, the extraordinary inventory write-down, the lower contribution margin produced by the decrease in revenues as of 30 June 2020. All considering the above and the need to have additional funding sources, during the first half 2020 new loans have been taken out, granted by banks on a trust basis, i.e. without triggering the business support measures made available by the Italian government. Starting from March, The new loans granted, amounted to, taken out, have amounted to 116.5 million euros with competitive interest rates, and therefore with a balanced impact on the income statement. This is the end of my presentation. Thank you very much, and I give the floor back to Brunello. So here we are. So basically, since July the 1st, we want to look at our company with a new fresh eye without being subject to what happened in the first half. We consider this time as a transition year between the past and the new time. As of today, we can say that we have led our company to a safer shore and we have conveyed to our esteemed employees physical safety at work, and also the security of having a job. Across the company, the awareness is strong that we need to be quick, flexible, pragmatic, brave, as we know that it is important to be able to live with the virus that can evolve on a daily basis. So the company is basically fully operational today with a 2024 deadline. With 2,224 employees, they're all at work. As you know, with COVID tests carried out every two weeks, this project started back in April and will end when the pandemic ends, hopefully soon. But this way, we can work in the company feeling more secure. And now, deliveries. We have completed all the deliveries of the winter goods according to the timing that we had set. Everything had been caught up with by July the 30th. All stores worldwide are only displaying fall-winter 2020 goods, as it has always been the case. And this is translating into very positive results in terms of both sell-out and image.

Collections.

spring-summer 2021. These collections were displayed physically in the showrooms in Shanghai, New York, London, Munich, Milan, Salomeo, in the time when it was decided, that is in July, like every year. I'd now like to focus on this interesting topic. It could be perhaps we have designed the most beautiful collections in our heritage, in our 40 years of history. This is the judgment passed by our multi-brand clients and also our store managers. The press has not yet seen them. This usually happens in September. And this is a great result also supported by the new trend in taste products. that is very akin to our taste. Order intake, very important. It is close to 60% and I would like to say that it has been exciting. And all this augurs well for an important pickup and recovery in the second half of the year, as well as a great start to 2021. Our impression is that many multi-brand clients, you know, we have 500 accounts, are strongly selecting their suppliers, both based on the taste of the collections, which is the way it usually goes, but also, at this moment in time, based on the soundness of the company. And this relates to timely deliveries, special help with weekly restockings, And also the fact that it was possible to physically see and touch and feel collections was very important. You know, buying a $7,000 suit without even touching it is not the same thing. So as far as collections are concerned, drawing to the conclusions, we can say that these true beautiful multi-brand accounts we'd like to pass a very positive judgment on them because what is happening with them is that they are redesigning, reshaping their business. And they are trying to now sort out the companies, sorting out their partners, and trying to single out the reliable companies they want to make business for in the next three to five years. So we are very happy with their new planning, very interesting for us. because we want to always have a mix between multi-brand and retail business 45 and 55 is the percentage and we are investing on this we have been for a long time then e-commerce the excellent performance of this channel is continuing over the past few years we have invested heavily in this channel, both in terms of money, but also in terms of time and mind. And of course, it's a fundamental channel for communication. And as you know, the structure is also equipped, the facilities are equipped to grow, to also sustain an important growth in the coming years. The conversion rate is extremely high in the e-commerce sector. A couple of words on the inventory, first half, the excess inventory. And we had done the write-down on this. Everything is closed. We don't need to do any more impairments or write-downs. I know you're familiar with this project, but I'd like to add two very positive notes that, frankly, moved us somehow. The first remark is that over the past 30 years, we have been contacted by a wealth of people worldwide who are really concerned and keen on improving mankind. Just to mention one, the beautiful and very humane Sharon Stone. The second important thing is that we have given very important interviews on this topic The latest one happened yesterday with the very prestigious New York Times. And tomorrow, we have another important interview scheduled with an important Chinese television channel on the very same topic. And as of today, we can say that this extraordinary project concerning this year, Ronello Cucinelli for Humanity, really is a great resource for mankind and for the company itself.

Markets.

Towards June, I was impressed by a great statement by the Japanese Premier, or maybe someone who is very close to the Prime Minister, who stated, we have to get used to living with the virus. And this, we were very impressed with this statement. And today, we keep working with this spirit because there's nothing else that we can do. So, starting from July the 1st, why do I always mention July the 1st? Because on that date, all our stores were open. So it was a kind of resumption of activities and secondly because we would like to forget the results of the quarter April to June so across the board we are working hard with local clients and local customers are very happy to go back to the boutiques in their own cities and they are also reshaping new human relations with the SIS assistance someone said that dry leaves always fall close to the trunk of the tree so when the tough times come along we stay close so you see how we have rediscovered the value of being close to one origins and this restart is happening with some caution it is just the way it is I am frightened myself. Ten minutes ago, I took another swab. It is a bit of a nuisance, I know, but this way we can be more secure. And this resumption of activity basically is informed by everyone's desire to go back to normal, to rediscover the love for beautiful things, for dressing well, for buying beautiful things, possibly exclusive objects. And always considering where things have been made and where the damage has been caused to mankind. And I believe that as we were saying this morning in the board meeting, there is a desire to support one's area of origin. So now if I have to buy a present, a gift for my daughters, I prefer to go to the city of Perugia here nearby rather than anywhere else. So we are now once again enjoying the pleasures of life with some due caution, although this fear is decreasing on a daily basis. So what have we noticed about customers worldwide? Well, loyal customers, have come back with pleasure and plain paying compliments their behavior is the same for our company it is the same average price and the same value of transactions this is very very important the conversion rate is much higher also in the physical channel so as you know it is true that our stores very much look like a home so once you step into the store you can grab a bite to eat you can sit down the brand ambassador will show you around so this is a very important way of handling our customers and as I was saying the visits to the website have risen strongly because the customers like to preview what they can buy in the physical store. So in terms of areas worldwide, Russia and China are performing well.

So let's say everything is going well.

Europe, it has two speeds. There is Austria, Germany, Switzerland, Holland, are going, normalizing slowly. Mediterranean countries, Italy included, and France, a bit more tough there. And then we would like to make a distinction between large cities and average towns. For example, the distinction between London and Hamburg, on average cities, everything is you see the situation is much better. Then the US, this was the last country hit by the virus or maybe the one with the longest tail but we actually see visible signs of restart and we see this not just in our boutiques but also in our multi-brand presence. The first sign is the fact that there are many visits to the website and a very positive mood they talk to us and so it's a really good situation and then the strong domestic nature of their market but so in our opinion As soon as fears are assuaged, we believe that all the conditions are there in the US for a very, very appealing business. But I say it once again, this is just our take on things. Then investments. As far as 2020 is concerned, the second half, we confirm that the investment plan is unchanged. All the plans that we had discussed on July the 14th, they have been implemented. And I'd like to remind you that the Paris Avenue Montaigne store was due to open on September the 12th. We will double the spaces in the very expensive Madison Avenue in New York. So it's 600 square meters store. Then we will double the store, the size of the St. Petersburg store and the same Tokyo Omotesando and also in Las Vegas. And these projects will take place between November, December and then the beginning of the new year. So now moving towards the conclusion, we can say that we now are at the end of August and we can say that as we said before there has been a significant trend reversal of course many stores were closed and in the third quarter we should deliver a growth against last year and also a margin level of around 13-14% in the third quarter since it is the end of August, we are pretty sure. Fourth quarter, the very same thing. So the two coming quarters will be in positive territory and as a result, 2020 will feature a slight decrease of 10% in revenues. Well, 10% is not slight, but For the time being, we would be very happy with this result. A couple of words on 2021 to say that since we have had a strong order intake for spring-summer 21, we believe that revenues will deliver 15% growth vis-à-vis 2020, a BTA around 13-14%. We will invest 6% instead of 8% because 1.5% will be pulled forward this year for the project that I mentioned before. And for next year, we envisage a rebalancing of inventory and net financial position. So 2021 will be the year of rebalancing. So to conclude, this morning during the board meeting, I was very firm in saying that, especially to the pessimists, that I recall the fact that we need to be pragmatic, focused, humble, and quick. and I am particularly happy with the fact that I don't know why but lately in the company there is a lot of creativity going around and this way we were able to focus on important projects for the future of this company so thanks to the above we can be particularly excited about our business, of course, those things considered. But we want to once again restate that on the one hand, we apply all the due caution on a daily basis. And on the other hand, we are becoming more adjusted and accustomed to living together with the pandemic. And I have to say that I have been subject to six different swabs to screen for COVID since April. So this is what we think of the company. Thank you very much. We open the floor for questions. We are very confident and of course, we're trying to forget what happened until June the 30th. So when we give you figures, oh yes, another important thing, we will On October the 8th, we will be releasing the figures on the next quarter. But that's when we will tell you how the quarter went. We will try not to mix it with the beginning of the year. So thanks for your attention. We are here for you now. Whatever you need, of course, you can also call us whenever you want. Carlos, call operator speaking. We will now start the Q&A session. Whoever wants to ask a question, please press star followed by 1. In order to exit the waiting list, press star followed by 2. Please ask your question speaking into the microphone.

Whoever wants to ask a question, please press star followed by 1 now. I'd like to remind you that if you want to ask a question, you can press star followed by 1 on your keypad.

So since there are no questions, we'd like to thank you very, very much. We have been listed since 2019. Sorry, 2012, the speaker corrects himself. And it is the first call when we've had no questions. It is true that we actually have contacts every month or a month and a half. Sometimes maybe we repeat ourselves, but this year we want to keep really organizing calls very often. There is a question from the English Conference School.

Antoine Berge. Yes, hi, can you hear me?

Yes, they can hear me and the interpreter. You can go ahead. Thank you.

Hi, good evening. It's Antoine Berge at HSBC. I've got three questions. First of all, I think you mentioned you are not seeing much difference in terms of your consumer behavior. If you could elaborate a little bit on this.

Sorry, can you please repeat? Because they were talking in Italian and I couldn't hear your question. Can you please start again? Thank you.

Okay. I've got three questions. The first one is I think you mentioned that in terms of consumer behavior, you are not seeing many changes, but yet at the same time, you saw quite a big surge in online sales. Do you think that for a business like yourself, especially where there is more apparel and when customers need to try clothes, that it's a trend that could be sustained? My second question relates to current trading. I think you mentioned you were expecting Q3 to be positive. So is it already when you take July and August, so quarter to date, are you already in positive territory or do you expect that it's September that will bring you there? And thirdly, I'm not sure I understood what's your outlook for the margin in the second half. I think you mentioned 13%, 14%, but I wasn't sure if it was for Q3, Q4, or the second half as a whole. Thank you very much.

yes so very very well let's start from the last question yes it is precisely 13 14 and this concerns the second half of the year which is basically what we would like to envisage for 2021 then the second question on the positive territory actually we already are in positive territory so we expect the third quarter to still be in positive territory as far as the change in behavior or the online behavior of consumers. So as I was saying before, we already have the facilities ready and equipped to maybe increase growth by five times. Maybe we just need to add a few staff to deal with the shipping. But my special thought on this, and we said this this morning, I think that this year we all across the world, we will achieve a level of online business that is unprecedented and will not also repeat itself. This is just my impression, mind you. This will not be repeated in the future. Because what happens is that people need to go back to the physical world. We actually see it from the orders that are made physically in the showrooms all around the world. compared to the ones online. The online orders are always, always slightly less fascinating, so to speak, because you don't have the possibility to touch and feel. So it is true there are platforms that show the things better. But somebody, a client said to me the other day, oh, while he was placing an order, oh, I like the pair of trousers. leather trousers and the sales assistant said well this is not leather it is fabric so I think that we have really binged on the online channel so personally I myself I need to go on a diet I need a physical channel now so it will still be important the online channel but we also give a lot of importance to the physical store then in September we will also organize some libraries in the stores with books of the same language of the market, just to convey this idea that you can sit down in the store, maybe the husband waits for the wife to read the book, with corners and spaces that are more exclusive.

So this is just my impression, obviously.

We have shopped online so much that we will shop less. By the way, Jeff Bezos said something very interesting when he came to Solomeo last year.

He said, well, of course, my delivery of a parcel cannot be charming or fascinating.

of course if you have to buy some dog food then of course online shopping is fine but I think that when shopping you also need to touch and feel the different objects and you also maybe need to be advised because maybe you receive your parcel at home you put on a suit and who tells you whether the suit suits you or not you see it is not the same thing that if somebody else tells you, somebody in the business, like the sales assistant. But by the way, this is just my take on the situation.

Next question from the Italian conference, JP Morgan. Good evening and thank you. I have three questions. The first one is on the trend for July and August. Positive. But we know that there is some help from the wholesale delayed shipment. Sorry, I couldn't get the question.

The second question is on the inventory. I was surprised to see such an increase given the impairment.

I know that there's a shipment on the wholesale I apologize, but the question is not clear at all. Since you have a lot of visibility, some more colors on the EBIT. Since you have visibility on the top line, can you tell us how you see the EBIT? So, in terms of

July and August, I think that we all had a plan for the restart. And our plan for the restart has outperformed our expectations, has been better than we expected. So the like for like was better than we expected. Because I think that we are working with four budgets. We have the best budget, then the second, the third, then the fourth. We are working on the second budget. We have one better and two worse. So much better compared to what we expected. Then the second question, I didn't really get it.

The second question, inventory and receivables.

So as far as receivables are concerned, we have had these 500 clients forever. They never caused any issues. And in some cases, we actually offered a longer deferment because we have known them for a long time. But you see, this is translating into good results not just for the spring-summer collection, but also for the plans and the spaces that are being allotted to us in the coming five years, precisely because we delivered perfectly on time, as far as the inter-goods are concerned, and some other companies are struggling with deliveries, and they need goods for their business. So this is a very important aspect. As far as inventory is concerned, once neutralized from the extraordinary provision to the fund, there is an increase of 14 million vis-a-vis December 31st, 2019, and 39 million vis-a-vis 30th of June, 2019. As I explained in my speech, but I'm here to repeat myself, the increase in inventory originated from two factors.

The first one has to do with COVID. In March and April, we were in confinement.

Therefore, the production times were postponed and also the shipment times were postponed. So on June the 30th, we had some extra raw materials for full winter, 5 million more vis-à-vis last year, and finished products that were ready for delivery. And as Brunello said, deliveries were completed in August. So in July and August, we completed the deliveries of the winter goods, And last year, they had happened in May and June. And as a result, this was the reason of the increase in the inventory. The other factor is the increase in the business vis-a-vis June 2019. We have five new openings, two openings in the department stores and the expansion, the extension of stores. mentioned by Brunello without increasing the number of stores but just expanding the existing spaces to accommodate the larger collection and also accessories and the children collection so there were these expansions and also the new lines of Sartoria Solomeo and kids collection that as of 30th of June 2020. So what I would like to say is that at the end of December, we will have the normal management of the inventory once the write-down of the first semester happens. And we will no longer have the effect of these deferred deliveries to our multi-brand clients like we had in June this year. For multi-brand deliveries, there has been one month deferment in order to have a new balance in the goods on display so we display the goods in July and not in June and this is something already well established because maybe we had exaggerated the other way before in showing coats in the shop windows at the end of May and we think that every balancing has taken place very well thank you thank you Melanie I apologize for not understanding the second question I want to wish you all the best because I know that your parents are fine and you were worried three months ago. This is something very, very important for your family. Thank you. Thank you. Next question from the Italian conference called Paola Carboni, Equita. Yes, good evening and good evening, Brunello. We thought there would be no questions, and I was about to say it's the first time in nine years, so we are very happy to be here.

Paola. The first question is on the first margin that has improved. I was expecting operating the leverage.

another question the optimism for the second half of the year and in particular looking at the wholesale where you have more visibility I was wondering whether you will see a similar performance also for the restocking that will mostly happen in the fourth quarter. So orders were confirmed and delivered on the second part of the season, i.e. restocking.

Do you expect the same growth trend? Can I carry on? Yes, of course. The other question is on savings.

the cost of leases and personnel for government aid. I wondered whether in your guidance of 13-14 EBITDA margin in the second half, if you are assuming the same support in the second half too for leases or did you assume that you will keep benefiting from these measures?

And the last question.

Inventory in December by deferring the shipment towards the sales season Do you think that the summer deliveries will also be postponed to January? So first of all, the increase in the first margin is limited, half a percentage point. so it's close to nothing, we can say that it goes to show that we did not apply any discounts. There has been a reduction in revenues and we explained and grounded it, but since the fact that we maintained the first margin means very clearly that we did not apply discounts. So from this point of view, nothing new. Stable situation. and it goes to prove that we made any discount then savings limited savings thanks to proposals that we received from landlords in Asia and Russia because it is a habit and widespread habit for them so we welcomed this situation but we're talking about 3.8 million in rents but this will not be true for the second half and the same also goes for the savings in the cost of labour 3 million euros there and they were all linked to the first half because with the resumption of business and the full employment since July, we do not expect any benefits on the cost of labour. As far as advertising is concerned, the second half, no changes there. We maintain our plan and at the end of the year you will see that the A&P investment is the same, 5.5%. Then another interesting topic is reassortment or restocking. You know that due to production issues, since our production only happens in Italy with 364 suppliers, our company is very flexible. So we thought that it would take the whole of August to catch up, but we ended it all by the end of July. So now we are ready for the first reassortment, restocking. So you know that by nature, multi-brands cancelled 15-20% of orders. It did not happen with us though. The 25-30% of orders were cancelled cancelled by companies due to production issues on fall winter of course now many clients have a shortage of goods and of course we are in an advantageous situation because of that so our idea here I know sorry one last thing you asked us about the deferment in the spring-summer collection, I would say not very much. In early December, they will display the resort items when you go on holidays in different parts of the world, so there is a rebalance in there. Of course, as I said before, we have

uh budget number two and we are working as if we are supposed to live with the pandemic so this is the situation thank you i'd like to remind you that if you want to ask a question you can press start followed by one In order to ask a question, press star followed by one.

First of all, thank you very much because we thought that there would be no questions and the questions are always useful. So thank you. For anything you might need, give us a call. Maybe we might even be boring with a call every month and a half. But at times like this, that's what we preferred to do. So we wanted to really speak to you very often. So what I am certain of is that we will have two main changes due to the pandemic. First of all, to conclude, since we were scared and we were frightened, now we do not want to come across arrogant people. This is the general idea. And as we were saying yesterday with the New York Times, probably what we feel even more strongly is the sustainability. Environmental sustainability, obviously, but the human sustainability is changing. People want to know whether products are manufactured without wreaking havoc in the environment and mankind. So I think that just to conclude, something very interesting, we called all our raw materials suppliers, Zegna, Loro Piana, the important producers. And since they did not have much time to design the Winter 21 collection, we told them, do not worry. we can meet up and we will try and recover this missing month, month and a half, without asking for any discount on textiles, although we worked on them together. And this is actually translating into a huge benefit. And then, another huge benefit from the multi-brands, We are already talking about the plans for the next three to five years with our multi-brand accounts. Best wishes and please strike up a contact with us whenever you feel like it. Thank you.