Brunello Cucinelli Spa

Good evening, Chorus Call Operator speaking. Welcome to the presentation of the first half 2021 results of the Brunello Cucinelli Group. I'd like to remind you that all participants are in a listen-only mode. Following the initial presentation, there will be room for questions. Speakers will be Brunello Cucinelli, executive chairman and creative director, Luca Lisandroni, co-CEO, Riccardo Stefanelli, co-CEO, Moreno Ciarapica, CFO, and Pietro Arnaboldi, head of investor relations and corporate planning. In order to receive help from an operator during the conference call, press star followed by zero. Now I'd like to give the floor to Brunello Cucinelli. The floor is yours. Good evening and welcome back. First of all, I'd like to say that Luca and Riccardo are not co-CEOs, but they're CEOs. So thank you very much, as usual. After this holiday, I say welcome back and thank you very much, investors, analysts and journalists. I hope that this holiday has somehow regenerated, re-energized us after, at least for me, but for everybody, after more than a year spent in fear. sometimes in pain, at least for me, in hope for body and soul. So best wishes for some sort of moral, civil, human economic renaissance that I think we are seeing in humanity. By the way, about a month ago, I was received by Prime Minister Draghi for a chat, and he was very nice to me when I stepped into his office and said, I'm honoured of having you here. I said, well, actually, Mr. President, I'm the one who is honoured. But just to give you an idea of how a president can be gracious towards someone. So we are honoured to have him as a prime minister. So first of all, I'd like to talk about the vaccines for 10 seconds. The vaccine hub is still working at full speed, even at night for the youngest. And I'm very pleased that also at national and regional level, we have reached 70% of general fully vaccinated people. So the company, in the company, we have almost all been vaccinated. We have about 1% of employees who decided not to get the vaccination for now. But we had an assembly, a general meeting, where we said that the day we can go back to work without masks inside, that will be the day when we will only enter the company with a green pass. As you know, as it is our culture, we don't want to force or even convince anyone to get vaccinated. So if that's the case, we will grant paid leave for six months and then we will see how things develop. But so far, we only have a very tiny percentage of anti-vaxxers because You see, our job is to protect everyone, but it is clear that no one wants to work eight hours a day or to have lunch for an hour in the canteen near someone who is not vaccinated. That's the great truth. So we need to protect 99% of the vaccinated workers. I'd like to dedicate this call, of course, to, above all, in addition to earnings, but that's clear, I'd like to dedicate it to the product, to the Solomeo area, and also to three major markets. The first one, the US, it is doing very, very well, and we'll talk about it. So we will just spend a few words on it. Then Europe, a really interesting market for us, and which we want to consider as it is, perhaps for a year or so. And then China, an immense, very interesting market. a source of work for mankind for the coming 50 years or 100 years. And we always want to devote a great deal of time to it in order to gain in-depth cultural, human and economic knowledge. So this is tonight's call, the schedule. So at the beginning, you see, when we got listed, I was often told that some conference calls could also be made by or run by the CFO alone. but this actually never convinced me. On the contrary, so honestly, I've always wanted many of us here in the office to listen to your questions and observations as an important comparison for common growth. So we are all gathered here, ready, and so we are here available to answer any of your calls. So today we are officially opening a five-people call So it's not that these people were not there before. This has always been about nine of us. But around the table, you can ask questions to Pietro, Investor Relator, Luca, CEO, not co-CEO, because he has not been downgraded, Riccardo, also CEO, Moreno, CFO, and me, the President of Operations and Creative Director. So now I will read out the main results, after which Moreno will go into detail. And then I will come back and discuss these big topics, especially China, in more detail. So we have net revenue, €313.8 million, up 7.7% at current exchange rates, and plus 10% at constant exchange rates. as of 30th of June 2019, compared to 30th of June 2019, and plus 52.9% account exchange rates vis-à-vis 30 June 2020. But this is not really relevant this quarter. That was not really happy, fortunate last year. Then second quarter 2021, reported sales of 149.2 million euros, up 13.8% compared to the same period in 2019. This is a great value for us. A PTA of €80.6 million, 25.7% margin compared to €-3.4 million last year and €79.2 million as of 30 June 2019. A PTA excluding IFRS 16, So excluding IFRX 16, impacts amounted to 39.9 million euros, 12.7% incidence compared to minus 14.1% million at 30th of June 2020 and 49.9 million euros at 30th June 2019. EBIT 25.3 million euros, 8.1% incidence compared to minus 53.3 million last year. Net profit 21.9 million euros, incidence of 7% compared to a loss of 47.7 million euros in the first half 2020 and a profit of 25 million euros in the first half 2019. As you know, we have not made any change to our investment plan, 29.9 million euros in the first half 2021 as part of a multi-year project confirmed even in the presence of the effects of the pandemic and supported to support by the solid capital structure. Net financial indebtedness of 96.3 million euros compared to 136.5 million euros as of 30th of June 2020. So these are the main highlights and this was my comment. The first half of 2021 closed with very, very interesting results. Sales of the fall-winter 2021 collections, and this is very important, got off to a very good start and the brand seems to be gaining broad consensus, both in its stylistic expression and in the way it relates to the local community and to humanity as a whole. Another important thing, order intake for the spring-summer 2022 men's and women's collections, now almost at an end, was excellent. All this prompts us to envisage a strong rise in turnover of around 20% for the current year and to view this time as a sort of year of rebalancing. And for 2022, we expect a return to a healthy growth of 10%. These are the highlights, as I said. So, Moreno, you can give us more detail, and then we will talk about strategy. Good evening, ladies and gentlemen, and thank you, Brunello. I'd like to analyze some of the issues that characterize the performance of the first half 2021 results. Slide number eight of our presentation summarizes the income statement figures highlighting the values as of 30th of June 2019, 2020, and 2021. Clearly, the direct comparison of the results of the first half of 2021 with those of the first six months of 2020 is of limited relevance, the latter being strongly affected by the pandemic. And since we chose to preserve the solidity of our corporate structure with the confirmation of all the activities and investments we had planned. When comparing this with the first half of 2019, we must take into account the following. the continuing effects related to the pandemic in the first six months of this year, the dynamics development related to commercial initiatives, the development of the network in the presence of the new direct boutique openings, 112 boutiques as of 30 June 2021 compared to 102 in 2019, the 12 conversions to direct boutiques, management of health shops in luxury department stores that last 12 months, and the major expansions of certain sales spaces. Net revenues for the first half of 2021 are in line with preliminary values communicated on July 13th. We would like to point out that as of 30th of June 2021, the income statement item, either revenues amounting to €2,162,000, has been classified under other operating costs. slide 17 in the annexes, instead of being entered under revenues from sales and services as in previous communications. For the sake of uniformity and comparability of data, the same reclassification has also been made in the presentation of the income statement figures at 30 June 2020, where other revenues amounted to 1,347,000. And the first margin, 30 June 2021, amounted to 66.8%, a slight increase compared to 66.5% as at June 30, 2019. In relation to EBITDA, we have proposed an additional table that sterilizes the accounting effects of the application of IFRS 16. And as regards 30 June 2020, it also sterilizes the accounting effects relating to the custodial provision of €30 million relating to the item inventories for the Brunello Cucinelli for Humanity project. The EBTA margin as of 30 June 2021, excluding IFRS 16, amounts to 12.7% compared to 17.1% on 30 June 2019. Considering the impact of the pandemic that continued in the first six months of 2021, and also considering costs whose benefits on sales and results will be progressively visible in the coming months. The net profit of €21.9 million as of 30 June 2021 benefits from the recognition of deferred tax assets for a total amount of €9.2 million calculated on the balance of the inventory write-down provision for the Brunello Cucinelli for Humanity project. We'd like to remind you that the 25 million euros of net income as of 30th of June 2019 included 2.5 million euros of tax benefits related to the patent box as the last year of this benefit. Details of personal costs, rent, communication investments and depreciation are analysed in slide 10. I'd like to highlight the progressive increase in our human resources with the number of FTEs rising from from 1,842 to the current 2,237 people, supports growth projects, growth in the digital world, and the expansion of the network. As to the rental cost, the evolution of the network is... is behind the increase here. The first six months of 21 include costs related to the expansion of sales spaces, new boutique openings, and new hard shops managed directly within the luxury department stores, with the relative benefits on sales and results that will be progressively visible in the coming months. We now turn to the balance sheet, and so we analyze three working capital investments and net financial debt. So slide 12 with the dynamics of inventories showing the complete recovery of the increase reported as of 30th of June 2020 mainly related to the lockdown period and a balance in June 21 equal to 208.8 million euros influenced by the growth of the retail network. Five new openings and 10 hard shop conversions in the first six months of 21. Then the expansion of some existing boutiques, the expansion of the digital channel activity and the development of the new initiative related to the kids' collections and the Sartoria Solomeo project. As to trade receivables, we'd like to point out the return to normal terms of payment of some wholesale customers to whom we had granted payment extensions to help them deal with the effect of the pandemic. With regard to trade payables, we point out that the payment terms to suppliers, collaborators and consultants remain unchanged. Slide 13 shows the great attention we continue to devote to investments, amounting to 29.9 million euros as of the first half of 2021, with net financial debt, the classic one on slide 14, of 96.3 million euros on 30 June 2021, compared to €136.5 million reported at 30 June 2020, which had been impacted by the effects of the pandemic. Already at 1 December 2020, the NFP showed a significant recovery, and we expect for the end of 2021 a further improvement compared to 30 June 2021, considering the dynamics of cash generation in the second half of the year, And also remember the seasonality of sales, which leads to the peak of the NFP between June and September. This is the end of my presentation. Thank you for your attention. Give the floor back to Brunello. So here we are. First of all, let's talk about product. Fall, winter. Sales, so it's August. So we have been selling this for a month and a half. Sales in multi-brand and multi-brand stores of the fall, winter season. 21 collections are going very, very well. The collections are viewed as youthful, modern, chic, very luxurious and exclusive. So it's really, we are experiencing a great time. In all sincerity, these 21 collections were really, really very beautiful. And this echo that statement by Einstein that fascinates me so much. In difficulties, genius unleashes its creativity because we have spent a year in difficulty. We spent a year when we worked in physical presence all the time except for six weeks of a total lockdown in March and April 2020. And the concentration, dedication, courage and humility led us to the, and maybe some luck too, led to the creation and designing of the really special garments for which We will receive a truly unique award next week in London. We can't tell you exactly what it is, not officially, and if you're happy, you'll receive it once in a lifetime. So I have my father, who is 100 years old, who lives opposite me, and I said to him, Dad, do you remember when you used to work those fields with oxen and the soil was made of 50% of stones and the wheat was small? And I said, Dad, I told him about the award, and he was moved, and so was I. And he told me what he always says to me, be a good man. So this is about the collections and the prize next week. It's something we're really honored by. We'll let you give your details very soon. So next new collection, Spring Summer 22. The men's collection is now completed. The women's collection is almost at the end. The results have been really, really special. We do not have the judgment, the feedback from the press because we will collect this in September in Milan. There is no doubt that all this and the order intake gives us a glimpse of a very interesting and very positive 2022. And jokingly, I say, let's hope that this mood about the brand continues for a few years, even for a few decades. I wouldn't mind that at all. But you know that when you start the year knowing fully well that you received positive feedback on the product, this really is a good start. Then what happens in the world, you can really but the product, you can vouch for that. Then the Solomeo area. We have talked at length about the value of the territory and its support for the brand. I honestly believe, and I'm telling you this because of the question you asked us, what happens after Brunello? Well, let's hope that business goes on even after Brunello. But I believe that Solomeo gives and is giving the brand some sort of limited immortality. And why is that? Because it will survive with its buildings, its epigraphs, its identity, its history. It will survive the passage of time. So I believe that this Hamlet will remain for long decades, hopefully centuries. It will still be the Hamlet of Kashmir and harmony and the history and humanistic capitalism. I'm telling you this because At this moment in time, the brand is benefiting from the value of Salomeo. And I'm telling you this because after the restoration of the Hamlet, you saw that we built the theater in 2008, a secular temple of art. In 2016, we built the winery as a tribute to the earth, who will be there for a thousand years. Xenophones says everything comes from the earth. In 2018, we built the monument to the dignity of man. And always, always as a family foundation. And it is always very much separated from the listed company, whose company invests in the territory 0.2% of revenues. The rest is taken care of by the foundation for the 1,000-year project. Now, on October the 28th, if you happen to be in Italy by any chance, in Milan, at the Piccolo Teatro in Milan, we will present a project for the next thousand years. It will take about three years to complete this project, but I think it will keep giving something very important, contributing something important to the hamlet. So, I believe that even the cultural chain of the territory and the Kashmir artifacts will also enjoy some sort of immortality. because these micro-companies, high-quality companies and workshops, they can really be a source of satisfaction for the future. As to turnover, profit, NFP, EBTA, investments, shop-store expansions, we confirm everything and everything is clear. Now, we wanted to talk about markets. I'd now like to open a nice and interesting window on the whole world. So at the end of the year we'll have 32% Americas, 44% Europe, 24% Asia, of which almost 15% China. So China for us is starting to become quite a good business. Do you agree with that? Yes. So if we were to envisage this breakdown in three years' time, we would like to envisage the following. 30% U.S., because it is a very important market for absolute luxury, both for men and women, and also in terms of taste, because they have a very special taste. We'd like Europe to account for 40%, very important, as some sort of showcase for international taste in Paris Saint-Tropez, London and Milan. 30% Asia, of which 20% in China and the rest in the other Asian countries. I think that Asia is super important now for many companies and for the time to come and also valid for international taste. We have these young celebrities You see, they wear exactly the same garments as in Los Angeles, as in Shanghai. This is very interesting. I'd just like to remind you that 85% of our business is accounted for by ready-to-wear. So the taste is important, the shapes, the colors, and the lifestyle. and I really like to call our company a company, a business of fashion and of lifestyle. So let's start from these three large markets, US. Just a few words, a very important reference market for us, also in terms of taste, recovering both, so recovering both in terms of numbers and also psychologically. as we can see from the wholesale orders of the important major department store for the Spring-Summer 2022 collections. And it is a market that we have always considered and viewed as a domestic market. Then Europe, a big market for us. There's two, very important as a world reference, performing very well in average cities. with their wealthy customers well-off customers so very positive performance overall well more difficulty in the largest cities but generally speaking really important as a reference point for taste visual merchandising and major cultural changes because Sometimes when I'm in London for two, three days, you take a look at the street and you see how the taste is changing. So we see Europe as it is for the coming year because I think that the pandemic will be with us for the coming months and we will coexist with it. But you see Europe... we have always considered it a large domestic market. Let us now move to China, a very important country, and I think that it will provide us with important satisfaction in this century. But as to China, we would like to tell you how we started, how it all started in China. I would like to make some major considerations. First of all, China will be the great driver of growth for all humanity. Yes, you all agree. I see you all nodding. Then we have always wanted to have a special relationship with these people because I started working my business with Germany and I was welcomed there because I knew their culture. I did the same in America and we tried to do the same with China too. we started to work together not more than 10 years ago as exporters of manufactured goods. And since then, we have called this special project Celestial Empire. You see, our Chinese friends love this definition. We started out as cashmere pullover manufacturers about 40 years ago, and clearly the finest raw material in the world comes from Mongolia and China. And of course, we have all been influenced by these people. We, of course, live with Kashmir. We met a thousand of times to discuss the quality and quantity of Kashmir. You see, the colder it is, the better the Kashmir is. Then we discussed the relationships with the producers, with the shepherds. And this has allowed us to see China from a different point of view. I have always thought that enjoying a good lawyer and fruitful relationship is possible if you know each other's customs and cultures. So for me, the experience of being a supplier and customer for very long years has been very important. When about 10 years ago we decided to start the reverse process, that is exporting our products, we considered this very distant country as a foreign market because it was further away. So we had Japan domestic market, Europe and America domestic market. So when we started about 10 years ago, we started with important fundamentals. First of all, it had to be a long-term project, but we have always done that and we have always told you about this, so long-term projects for us and for China, too. So we wanted to start with a homogeneous international taste, Los Angeles, Shanghai, Milan, and London. And we also wanted good economic growth, but also cultural growth, and also human relations had to be pretty special. we tried to forge long-term projects there. From the very beginning, we have viewed, we have seen in this world something extraordinary for this century. At least for me, you see a fourth of the world population resides there. So I like this very much. Then what about taste? So first of all, one single taste on an international level Our first partner was saying, why can't we have some striped polo shirts? And our answer has always been no, because we need to sell an international single taste. Then, not because we wanted to be arrogant, but I remember one anecdote. And when an American customer wanted to have wider-legged trousers, we would answer, this is not our culture. We can't do that. I said, well, how come you cannot do larger, you see, leg trousers? Whereas the truth was that we wanted to maintain the identity of our brand because in clothing, either you have it or not. It's not the same as in accessories. So we wanted an understated product, handmade, because we have... 52% is done by hand, you see. As you know, we are a no-logo company. And also with a healthy visibility. That's how we wanted to tackle this market. Trying to convey the idea of product, culture. This has always been the way in which we communicate. And also an exclusive product. And a pretty... expensive too. We have always wanted to manufacture here in Italy with craftsmanship. So we see a lot of young actors. You should know that we have no brand ambassadors or paid brand ambassadors where we see many younger celebrities and who dress exactly the same as their peers in Los Angeles, for example. So this is very interesting taste-wise. than economic growth. When we started at the very beginning, also following on your recommendations, we wanted to have, yes, definitely a faster growth than in other markets, because it was just the beginning compared to US, Europe, and Japan. But at the same time, we wanted some sort of balanced growth. We wanted to have a fair price, and also compared to Europe. and this has always been an issue for all the markets, the idea that America has plus 20% compared to Europe, China 27, 28, Japan 33, plus 33. Why? Well, you see, there's communication there. I remember an interview in Shanghai when there was a young member of the press with two iPads and an iPhone saying, And I was really impressed because she was asking me questions and she was showing me the prices of the single items in Shanghai, Milan, and San Francisco. And I was very impressed with that. As usual, we believe in multi-brands. And still today, we believe that Chinese multi-brand stores can be leaders, teachers. They know the size. They know the taste. So we basically follow on their footsteps. And also we wanted to have a very clear and sincere relations with the landlords as we have had in America and Europe. Because as you know, in the beautiful high streets, in the cities, those are the prices. They might also behavior plays a role in assigning one place space or another you see the prices are very very high the rent prices and so since they have a lot of demand the landlords can choose how to allot their spaces and behavior plays a role here then cultural growth there we have a team of 200 people and only local Chinese people. So our team in China is made up of only Chinese people and they come to us in to Solomeo. We meet up with them. We try to gain insight in our mutual cultures. We are part of the Italy-China Foundation and I'm also part of the Unione Filantropica Italy-China Foundation. and I have always had a passion for philosophy. If you come to our village in the square of the Wisemen in Solomeo, we have Leonardo on the one hand, then we have Confucius and Plato. When Confucius and Plato, they lived at the same time. One is the father of the West, the other is the father of the East. And for a Chinese person, Confucius... is extraordinary. So before leaving the floor for questions, I'd like to tell you that we have a very positive attitude towards this market, and we need to be gracious towards them. So a year down the road, after the start of the pandemic, we wouldn't have imagined this kind of level that we have achieved. So I'm saying this to you, analysts and investors, listening to you, 2021 is a year of rebalancing. The only thing that is missing is a few points on EBITDA, but inventory, investments, we have gone back to our balance. So we are very confident And in the company, there is a very fascinating mood around, but this also is the result of the time we experience in terms of taste. So to conclude, the usual warning I always have for you is the product. Our product needs to be youthful, exclusive, contemporary, cutting-edge, and chic and luxury. This is what we think matters the most. We have spoken at length about China because we wanted to convey to you the way in which we tackle this very important market, this special culture that is destined to rule in this century. So I am not in my prime anymore, but I am convinced that this is the way ahead. So thank you very much once again. We wanted to really convey to you some of our culture without only relying on numbers. And now the floor is open for discussion. Then the next call will be around October the 20th. But we already have July and August already with the order intake. So we are pretty confident. Thank you. Thank you very much. Carlos, call operator speaking. We will now start the Q&A session. Whoever wants to ask a question, please press star followed by 1 on your keypad. In order to exit the booking 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. First question from Flavio Cereda, Jefferies. Thank you. Good evening, Brunello. Good evening, everybody. Good evening, Flavio. So there's a bit of rain in your England. Yes, let's forget about it. But you see, that's why people are going to buy cashmere in August too. Yes, but you see, everybody prays their own God. You see, we are not very unhappy with this kind of rainy climate. So I have two quick questions. to be original on China. Number one, your typical customer, let's say, what is the difference between your Chinese and European customers in terms of age? And secondly, if you can remind us of the price difference on average for you between purchasing a garment in Shanghai or in Milan? Very well. So, starting from the second question. So, on average, it is 28% higher than in Milan. And the objective is to have about 25-26% in a couple of years' time, which is the balance that I would appreciate. When the young member of the press told us, why does it cost more here? So you see, this is part of the idea of balance between profit and giving back. As far as the average customer is concerned, it is slightly younger because there are many young, well-off people in China, so we are pleased with that. In the U.S., we have young actors, but we are very happy with the clientele that we have in China. Of course, we have an expensive product, but also this idea of exclusive, no-logo product. As you were saying the other day, Luca, you had come up with a good adjective. We were talking about a silent kind of growth, a balanced growth. that we hope we can replicate in the coming years, not just from the economic point of view, but also from a cultural point of view of integration with our team and with the Chinese people, and also in terms of brand positioning. We have to say that at this moment in time, we see a growing interest for ready-to-wear, in a market that was natively driven by accessories. And also this idea of no logo really is becoming attractive for many, many people. Yes, we are happy, Flavio. I wanted Luca to say something too, because you have to feel really free to talk to everybody. So if one day they say to you, Brunello died because he was old, You see, my time is over, so we need to have the responsibility for those who come after us. Yes, thank you very much. Thank you, Flavio. Next question by Guido Lucarelli, Exambe Beparibas. Good evening, everybody. Good evening, Brunello. Good evening, Guido. I have three questions still pending. on China. The first one has to do with the latest statements of the Chinese president on redistribution of wealth, also possibly a taxation on the wealthy, on wealthy people. I'd like to know whether this raises any concern that this can have an impact on the Chinese consumers. The second one has to do with China and the latest COVID hotspots, whether this can have any impact in terms of store closures. And then to conclude, what about the weight of China between now and three years' time, 20% of sales? And considering the importance of the multi-brand channel, what could be the retail-wholesale mix of the 20%? I'll start From the last question, currently we have 15%. In two, three years' time, we could achieve 20%. So there will be growth, some wholesale, some retail, because it's not that we expect that much, but three or four points. Then as to hotspots, so far there is nothing that really affects us.

As to the impact,

You see, it's been a few years now that I maintain that going ahead with the collection and everything, we will have to really find a balance between profit and giving back. So what I say is, would you buy something if you knew that that brand is making a possible profit? You wouldn't. That is the truth. What we don't like, they don't, either don't like either. So this idea of healthy profit, of growth of mankind, this idea is always something we highlight, and we have always highlighted in our company. So personally speaking, in our company, we are not worried about anything. I believe that it will be the market for the next 100 years, China. Thank you very much. Thank you, Guido. For further questions, please press star followed by one on your keypad. I'd like to remind you that if you want to ask a question, you can press star followed by one on your keypad. Next question from Paola Carboni, Equita. Good evening, everyone. I have two questions. ...changing, shifting focus away from China. The first one on profitability, that is, yes, still lagging behind to 2019, but in this first half it did catch up by 10 points. And I saw in the press release that you were highlighting that some marketing initiatives will be more concentrated in the second half of the year. So I was wondering also for personal costs or rents, was there some sort of temporary developments linked to forced savings for COVID or some other aspects to be taken into account? So will the cost dynamics be different in the second half of the year? I can understand that there will be more benefits on the top line from the stores, new stores, but that's my question anyway. And then the second question on the U.S. market, if you can give us more colors also on the attitude of customers over there if there is something still brewing there or if there is some sort of slowdown so in America there is a great mood over there you can feel it from the daily sales but Paola you can also feel it You see, they started at the end of June with the collections, and they bought the spring-summer collections with a lot of fascination. So we see a lot of positivity in the United States. As far as the impact of costs, there is no change there, Paola. We have the very same business that we had last year. We did not fire anybody. We did not close any stores down. So we are ready. We called it the year of the rebalancing because apart from a BDA, we have a true rebalancing, rebalancing of the NFP with investments, with investments in advertising. So you shouldn't expect any different things. So we are very, very confident in that. So I expect a higher PDA margin in the second half of the year. Well, you see, Paola, we all hope for an improvement. But you see, Paola, we should never be carried away by stuff that is COVID. And then, of course, if we are able to improve it, then we will all be happy. But at the same time, we must be cautious all the time. And we want to be cautious in China too. That's what I wanted to say. If we are cautious when drafting our budgets, then in that way, we can live and work with serenity. Whereas if we exaggerate, if we stretch out our budgets, then it is difficult. This is what really matters. When we went public, We said it from the very beginning. We want to have a healthy growth. And you see, in the past 10 years, we were always able to grow by 10%. This last year, we lost 10%. Next year, we'll have 20%. And next year, we will have a usual 10%. So I want to be cautious in everything I do. I don't want to be frightened by the fact that maybe something happens tomorrow morning and we lose 0.2% and this becomes a debacle. Because then, Paola, you work, you know, in a hasted, in a pressured manner in the company too. If you always need to chase the 0.01% OBDA, that's when it gets difficult and part of creativity goes away with it. So, of course, we always try and be Confident, yes. Thank you. Thank you very much. Thank you. I'd like to remind you that if you want to ask a question, you can press star followed by one on your keypad. Mr. Cucinelli, there are no questions. Yes, so thank you very much. This idea of holding this conference call with five people should really convey the idea that you can talk to us any time of the day or during the conference call. And if someone comes down with the flu one day, then there will be four of us left. Thank you and best wishes for everything. And we'll speak to you soon. Have a nice evening. Goodbye.