Brunello Cucinelli Spa

Good evening, Chorus Co-operators speaking. Welcome to the presentation of the 9 months 21 revenues of the Brunello Cucinelli Group. I'd like to remind you that all participants are in listen-only mode. Following the presentation, the initial presentation, there will be a Q&A session. Speakers will be Brunello Cucinelli, Executive Chairman and Creative Director, Luca Lisandroni, CEO, Riccardo Stefanelli, CEO, Moreno Ciarapica, CFO, and Pietro Arnavoldi, Head of Investor Relations and Corporate Planning. In order to receive help from an operator during the conference call, please press star followed by zero. Now I'd like to give the floor to Brunello Cucinelli. Please, the floor is yours. So here we are, and good evening, everybody. Kind investors, thank you for joining us dear investors, analysts, journalists. And we're all here, as always. Luca, Riccardo, our CEOs sitting beside me, Moreno, the CFO, Dario, his junior CFO, and the whole team, eight of us. Well, you know, to tell the truth, I often repeat that I really like these calls. And this is the last one this year. Alas, because there's none else actually scheduled. And we will have the next call in March 2022. And as it is custom, as we did this from the very beginning, when there is a call following the board directors, we have quite we have shorter press releases, whereas when there is no call, they will have broader press releases. So on January 10th, 2022, we will have a very broad press release, whereas in March, it will not be so long. So personally, I really enjoy hearing from you. You see, for us, for me, the best thing would be to speak to you once a month. So the way we did in the past year, year and a half, the toughest year in our life. So how about this call? How will this unfold? So first of all, I will read out the highlights. Then second topic, a few words about the company, which is back to business as usual, as during normal times. Third, worldwide sales. But honestly, they're doing so well, physical stores too, that we just want to devote a little amount of time to it and then to rather devote our attention to more important topics fourth product the designer of the year award 2021 and you know especially i myself are always busy with the product because i believe the products really is key and then the closing of the sales campaign spring summer 2022 fifth topic, the final focus for 2021, and the fairly detailed three-year project, 21, 22, and 23. It's October already, so we have details for you here. And then six, we'd like to devote some time to these new projects for the town of Solomeo and also for the Brunello Cucinelli brand for the coming 50 years. Net revenues of 502 million, up 9.4% at current exchange rates, plus 12% at constant exchange rates, compared to 3rd of September 2019. Excellent growth reported in Asia, plus 18%, Europe, plus 14%, and honestly, I don't want to read The decimals, but America's 7.9%, well, in this case, decimal is important, with a limited decline in Italy of 6.9%, minus 6.9%. Retail channel up 15.6% and wholesale up 3.3%. In the third quarter of 2021, net revenues of 188.8 million, up 12.5%, compared to the same time in 2019. And now the revenues vis-à-vis 2020. So growth of 32.7% at current exchange rates compared to 30 September 2020, 35.4 at constant exchange rates, then Asia plus 35.9, Americas plus 37.4, Europe plus 31.6, Italy plus 21. with the retail channel growing by 56.5% and the wholesale channel by 13.5%. This is what my comments on the highlights. The first nine months of the year have gone very, very well indeed. The autumn-winter 2021 collections are proving very successful worldwide and everywhere we are seeing a strong desire to return to physical stores. we honestly couldn't have imagined such an excellent result just a year ago. And all this leads us to envisage that we will end the current year with a wonderful 25% growth in turnover compared to 2020. Also thanks to the Designer of the Year 2021 award that was given to us by the prestigious British magazine GQ, Our brand is receiving countless certificates of appreciation for its stylistic expression, that's very important, as well as for the way it relates to humanity and the territory, the surroundings. And with the Spring-Summer 2022 order collection now complete, we can now envisage a next year lived in the healthy balance between work and private life, with a growth in revenues in turnover of around 10%. So these are the broad highlights. So I apologize, there's a figure that is wrong in revenues against 2020 growth, 32.7% at current exchange rates compared to 30 September 2020, plus 35.4% at constant exchange rates. They tell me that I misread something. Anyway, so company to start with. So we can confirm that we're all physically at work and 99% of us are vaccinated. For the remaining 1%, there are three doctors have been here from the beginning of the pandemic. They're still with us and they will be with us until the end of the pandemic and they are available daily for swabs. All the stores in the world are open and they're open with the very same stuff as before the pandemic. And, you know, this is very important. And perhaps it also has a very positive effect on our sales. As you know, in March 2020, we decided, we made actually three important decisions, very important ones. The first one, not to lay anyone off. This was March the 12th. And also, we decided to guarantee everyone the same salary as in 2019. We also decided not to ask for a discount. But, you know, you see, I keep saying that this is part of who we are. And with all the surplus goods, we set up this project called Brunello Cucinelli for Humanity that you are familiar with. And it really gives us beautiful human experiences. So another important thing is that we don't have any trouble or difficulties with raw materials, you see, because we have always believed in a healthy stock of raw materials. And even in 2020, it is true that for us, many raw materials really are the staples for us. So you have raw cashmere and you need to dye it afterwards so it's easier. As you know, all production is imperatively made in Italy with a true manual labor rate of 52%, which means a needle, thread, scissors, the true manual work. And then we have not reduced any major investments over this time, including investments in communication in 2020 and 2021 it was always between five and six percent and it stayed the same and during the pandemic in short we would like to call this time the year of rebalancing practically in all but a few points on a bda but i think it will be back it will go back to balance next year we feel you see inside the company, you can breathe that collective creativity on a daily basis, which I think you can only generate by working in a physical presence on site. Because if you work on site, there is a very clear cut distinction between family life and work, collective creativity and young people, young staff can really learn the corporate culture. Then onto sales, as we said before, We attend to things that are going very, very well, I would say all over the world, including in Europe. And as we were saying today at the board meeting, Europe is always very, very important for the taste and the way we showcase the product. You know that we believe in a collection that brings along the same taste anywhere in the world. Maybe sizes change. You would have more small sizes in Japan and large sizes in Germany, but the taste and the design is the same. And in general, whoever you talk to, everybody says that things are going very well. There is a great deal of confidence, positivity, new projects in physical stores, some people redevelop the store and there is a great craving to see touch try on garments and also get advice from the sales people especially for men's but also for women's it is important to talk about one's wardrobe on how to mix and match the different garments this is really true so just a few seconds on sales but it doesn't really need any more time because everything is going well. Product and sales campaigns bring summer 2022. So we can say that our products and consequently the brand, they are really experiencing great momentum. We won the Designer of the Year 2021 award from the British magazine GQ. And I have to say that this award makes us very proud. And it also gives the brand a very clear-cut connotation of taste and identity. And as a result, perhaps it also contributes a longer life to the brand itself. Since when we were young, you know, have always drawn inspiration from Ralph Lauren. You see, Ralph Lauren's taste is still the same. you see, still there after 50 years. So it seems to me that there is a very strong demand for particularly well-made clothing, and we have 85% ready to wear, a kind of clothing that is very handcrafted, exclusive, expensive, but that lasts over the years. Like if it was something you never throw away, that you can reuse, repair, recondition and mend. This is something very, very contemporary. We have finished now 20 days ago, finished collecting orders for men's and women's spring summer 2022, and the season went super well. And we also received excellent feedback from the press. And you know that if the feedback from the press matches the feedback from the clients, then it's easier. If there is a mismatch there, probably it means that the brand somehow, well, you need to work on it. So to conclude this first part, we can say that all this leads us to look forward to a very positive 2022, and we can say that we are continuing along our path with a very, very long-term project. taking care of the way human beings work and the workplace everything needs to be special there we try to stimulate creativity by trying to give human dignity and responsibility because this really ranks high on the agenda if i empower you you are more creative then we try to take care of all the micro enterprises, 365 of them, the third-party manufacturers that cooperate with us, and we try to give them a kind of long life to the enterprises and to our territory because this value chain, well, we can say that all together that we are attaching some sort of supply chain immortality to it. So, to conclude on this, we can say that the... You see, with this supply chain of Kashmir products, we hope that it will definitely be immortal, Kashmir products. We continue to believe in our way of communicating, starting from solo mail, which we define as the hamlet of Kashmir and harmony. So we keep repeating that our hamlet is the hamlet of Kashmir and the place where we try to live in harmony. And we claim that it is important to live and work in harmony with creation. This is something really important. This is actually what we mean by human sustainability. So now, Before moving on to major topics for the years to come, so the project for 21, 22, 23, the plan. As we are almost at the end of October, we are trying to give you our final thoughts on this 2021, which we keep saying we have defined it as the year of rebalancing, because apart from a BTA, everything went back to normal. Turnover up by around 25%. We grew slightly compared to the last call, but things are going so well that we feel pretty confident there. A BDA around 13%. Then inventory around 30% of turnover. And we consider this to be totally rebalanced. Net financial position, we should close with around 65 million. compared to 93 million in 2020, so we are going to rebalance here as well. Investments, always around 8% of our turnover. Clearly, sometimes you are waiting for an opening in a specific high street, and then when this does happen, we seize the opportunity and we pull forward our investments for the year but usually with 8% we can feel confident with 8% investments of turnover so that we can have modern stores, modern showrooms. Dividends around, going back to around 50% of profit as per the ongoing plan. So this is 2021. Well, hopefully God will help us. Now, a few highlights for 22 and 23. So this plan envisages a growth in turnover of around 10% per year. You see in the past we mentioned 8%, but we thought that we have to recover minus 10% last year. So this year 25% and the coming two years 10% per year. So that together we might then go back to our plan for the second five-year plan. So, to resume our path of the 2019-2028 project. So, the 2023 was the first milestone. I think that maybe we can reach that at the end of 2022. So, for the coming two years, what we envisage turnover of around 10% per year growth. Then a PDA that is rebalanced, an inventory that is balanced as it is already this year, with interesting stocks, as we were saying before, continuously improving net financial position, investments around 8%, then advertising between 5% and 5.56%, dividends around 50% of profits. My esteemed friends, these are the coming three years that we are working on. And we feel pretty confident. Now, on to some major projects that we have for Solomeo and the brand. First of all, as I was saying, we were awarded this important prize in London. It is an important prize for the taste, because one day maybe the company might suffer for a season or two, but the taste is always very well identified. Solomeo is very strongly identified as a place of Kashmir and also identified as a way of working. Kashmir, human capitalism and human sustainability, that is very, very important. So we keep working on this project. Then next week in Milan, we will be presenting to national international press this big project for Solomeo, and as you know, it is taken care of by the family foundation, not by the listed company, and we think that this project, and we can't reveal anything about it, but we'll let you know in a few days, we think that it will give Solomeo further strength for the coming 50, 100, maybe 500 years. Then in this village, you know, in this hamlet, we have the forest or the wood of spirituality on the hill. Then coming down to the village, we have the secular temple of the art, the theater. Then we have the headquarters in the valley. We have the winery with the monument to the earth, to Xenophon. Everything comes from, all things come from earth. And then we have the monument, a tribute to human dignity, something really fine that you saw. And then on Thursday, next week in Milan, we will present this new charming project. A bit on the expensive side, but I hope that you see our children and grandchildren will keep believing in this fascinating project. So as far as the project that is important for the brand and for Solomeo. Then we have another project, a 50-year project for the company. so why you might say always talk about 50, 100 years ahead. This is the 43rd balance statement of financial statements this year. And the first 43 years of the company, we went through COVID and we are about to restart. As you know, the place where we work, the places where we work, the buildings where we work, there's nothing new there. They have all been reclaimed These are former buildings of the 60s and the 70s that have been adjusted to modern life, modern working life. And I spoke about this with the Prime Minister Draghi too, because we in our surroundings, you see, we have 40% of buildings that are absolutely not in use. So I said to Draghi, if the government can give us a hand there, we should try and redevelop these properties, these buildings. Otherwise, our peripheries, our outskirts will be suffering. And truth be told, we had this chance here, very close to Solomeo. There is a huge area, a giant company of 50 years ago and until 30 years ago. And then as things go, so we were able to buy this from the court, from a tribunal a few days ago, 50 hectares. Everything needs to be reclaimed, obviously, because we are talking about factories and plants of the 70s and 80s making paint. But this will enable us, will enable us company to expand for the next 50 to 100 years, because we can build 70, 80,000 square metres, so over the years it will be very interesting. So it is a great momentum for us, because on the one hand we have the prize that we were awarded, on the other hand we have this project of the foundation that I'll disclose next week, and then I'd really like you to send us an email with your feedback on this, with your opinion. I like it or I don't like it. We'd really like to receive feedback from you. And then you should try and really understand. For us, this is, you see, these buildings are not for logistics. This is a true factory. This is a plant we manufacture here. We want to defend our know-how, our production system. So tomorrow, we have visiting us from the European community we have the ministers of agriculture because I had the pleasure about 20 days ago I spoke at the G20 talking about human sustainability so they're now coming to visit tomorrow but this area I mentioned before it really gives us the possibility to imagine factory for the coming 100 years. So it is some sort of collateral or guarantee as far as spaces or surface areas concerned. So there will be a growth in Solomeo, of the brand. We feel very confident because of that. Now, I wanted to tell you something with some emotion, actually. I'd like to disclose that at the end of next week, I have been called to contribute, to give a contribution on humanistic capitalism and human sustainability in front of an audience that I would never have imagined in my life. So I cannot really disclose what it is all about, but this really honours us because in front of this kind of world audience, we will have a chance to speak about humanistic capitalism, human sustainability and relations with human beings because you know that this topic of sustainability, well, what I really am keen on is human sustainability, because very often we talk about emissions, and of course it's just fair and right. We try to recover, to collect rainwater, but you see human sustainability is a great, great topic. So on October the 31st, I have been summoned to give this contribution, and I cannot sleep at night, and hopefully the heavens will protect us, but I think it is a good thing for the company, for the corporate culture, for Italy, for Umbria, because you see calling an entrepreneur to speak in front of such a worldwide audience to talk about humanistic capitalism and human sustainability really it is an honor for us and hopefully I hope that you will get to know this is something very very serious and important to us so to conclude so then you can ask all the questions that you want we would like to consider this current year for these great events that have taken place as the some sort of golden year for our company, I don't know if you agree, Luca and Riccardo, a golden year for the prize, for the Best Designer 2021, for the brand, for Solomeo, and for the acquisition of this area that secures us for the next 100 years, and also the participation in this great world event. So, very well for the brand, very well for Solomeo, But you should know that we work always focused but in a healthy mood of serenity because going back to work a healthy amount of hours with the right focus, with the right amount of online time, I'm really happy with that. So this is the end of my speech. Please ask all of your questions. then Pietro on Friday morning after the Thursday the 28th event please send them all the communication and then so they can receive everything so thank you very much for your attention let's open up for questions we are here about of course not just tonight you can ask away any time of the day of course You can feel there's a lot of positivity in our words, but I am fascinated of the way our Italy is doing. I'm fascinated by our President of the Republic, of our Prime Minister Draghi, who I think they represent the best qualities of an Italian individual. Then I want to tell you something really interesting. The roadshow that we had in London about a month ago in presence when we were given the prize, and it was the first Rotor after a year and a half, for the first time you analysts and investors, you told us that Italy is a credible nation, because you yourself told us that credibility is in the nation first and in the business later. And I said this to Draghi, I said this to everyone, you see investors now say that Italy is credible. So invest in Italy, hopefully we will always behave well and I'm very, very confident. Chorus Call Operator speaking. Let us now start the Q&A session. Whoever wants to ask a question, please press star followed by one on your keypad. In order to exit the booking list, please press star followed by two. Please speak into your microphone when you speak. Whoever wants to ask a question, please

Press star followed by one now. First question from the English Conference School, Antoine Belge.

Yes, good evening. It's Antoine Belge at Exxon BNP Paribas. Three questions, if I may. First of all, regarding China, in the third quarter, there's been some restriction due to COVID. So is it fair to say that you may have had a bit of a weaker month in August and since then, I think I've recovered it in September and also a few words about how the Golden Week went for you in October. My second question relates about potential new product categories for Brunello Cucinelli, especially I think in maybe areas like eyewear or perfume or jewelry. And finally, a bit of a more technical question, I think the There was some impact of conversion of some doors from wholesale to retail, notably in the U.S. Is it possible to quantify what was the impact in EuroMillions, both in a negative way for wholesale and positive for retail? Thank you very much.

So, Antoine, I'll answer you the first question as far as China is concerned. You see, revenues, 32% in the US, in the Americas, 44% in Europe, 25% in the East. This is a breakdown in sales. And 15% of the 25% in China. I have to say that we didn't feel anything of what you mentioned earlier. On the contrary, things are going very, very well. But you see, Antoine, we can say that the most important thing here is that the brand is very healthy. And the taste is very healthy, too, because as you know, usually there are five-year cycles when there is a louder taste, and then followed by five years of a more understated, softer taste. And this seems to be the time of the understated taste. That's why we are going well. We're not impacted. Then other categories and eyewear. So we started this great partnership with this exceptional company belonging to Luxottica of my esteemed friend. And we did something very nice, we think. They have Oliver Peoples, this great company, about 100 million in the West Coast in the US with a fascinating style. that is very much along our lines. And we have partnered together to design this collection, but it's not a license, mind you. It is, you see, the eyewear pieces will show the logo, Brunello Cucinelli and Oliver Peoples. Things are going very, very well there, and especially taste-wise, because I always like Hermès when they say, c'est notre métier, it's a different trade. we are ready to wear and this experience, eyewear experience, we are very happy with the partnership. Maybe Luca, we can talk about the conversion in the US. Yes, as far as conversion of stores in the US is concerned, in America we refer to Nordstrom and we are now switching some doors from wholesale to concession with them. As you can see from the general figures, Antoine growth is common in both retail channels and growth channels that the effect of this conversion is not very much material in the first nine months of the year. Of course, we keep looking at both channels with a lot of interest and we are always ready to operate in most cases with wholesalers And if the structure of our clients or their strategic positioning foresees a switch to concession, we can then accept this is not something we're looking for, but it is an activity whereby we can adjust to the people and their strategic orientation. Yes, I'd like to add one thing. At the end of the year, our revenues will be 60% retail and 40% wholesale. You know that we always attach a lot of importance to wholesale, because precisely the other day, talking to a very fascinating company, one of the best in the world, they were saying, when you discuss with competitors, you grow. And discussing with a wholesale, talking about the collection, and you see there is less risk if you talk to your wholesalers. Thank you, Antoine.

Thank you very much.

Next call from the conference call in Italian by Flavio Cereda, Jefferies. Thank you. Good evening, Brunello, and congratulations on the prize, first of all. Thank you. Yes, thank you. So I have four questions. Four questions tonight, no problem from us. So the first one, you spoke about the importance of physical stores. So you said that all stores are open now, or were they open the whole quarter? No, no, the whole quarter, the whole three months they were open. That's what I said by, you see, when I summarized, they have been open for quite a while now. And then new openings, new spaces. What about the plan there? Has anything changed there? Absolutely no change there. We want to have two openings a year always, then maybe an extension of two, three beautiful stores, as it will happen in Madison Avenue in 15, 20 days, as it happened, as was the case in London. This is the plan and it has not changed at all. So for the whole of 2022 too, It is all secured.

We are very pleased to say that.

So, the other question is... So, considering your long-term view, what about the dynamics, menswear, womenswear, clothing, accessories? Are there any trends that you envisage maybe different trends to the past, or have we just gone back to normal in terms of the way people shop? Yes, it's a great question. Thank you, Flavio. So what we notice is a great attention, a focus on menswear, because you see, in the past three or four years, menswear maybe was a little bit out of focus, perhaps because because taste was coming along for us. For example, in number of pieces we do SKUs is half and half, whereas in value is 58 and 42, but because women's wear costs slightly more, it's more expensive. So the most fascinating trend I would say is that men and women both want to dress well. So then events, social events have started. So presentations and stuff. So it is very good. It reminds us of 1920, the roaring 20s, when in the UK you see the Prince Edward said we need to go back to dressing well. And then there was the famous decade. What we are seeing very strongly is that what we mostly sell is exclusive garments, expensive garments. But garments that are not very easy to throw away, that are long-lasting, durable goods, although you see ladies will definitely keep shopping. But as opposed to three years ago, they keep saying, this is a kind of garment that I can keep in my wardrobe, I can use for the years to come. So there is a lot of different awareness nowadays. You see yesterday, Riccardo, you went to speak to Prince Charles in the UK about sustainability, so elegance, and then garments that you do not throw away, high quality that can be reused, so a lot of attention there. So what I say, Flavio, is that this is something we were not envisaging in the physical You see that people crave entering into stores, you know, touching and being advised. Two more questions. China, as my colleague said before, so you have a no-logo product and a kind of luxury that is not loud, it is understated. Do you have any concerns or worries about About the populism we are seeing nowadays in China, or do you think that you are pretty confident? Well, this is something that we mentioned also during the board, the meeting of the board today. I see a huge future giant for us in China, but for everybody. But one thing is for sure, we need to get to know their culture better. and we need to maybe approach them in a slightly better way this is what we want to do in our company we hold courses and classes on chinese culture on how to approach them and maybe luca you can dwell on this on what the council yesterday said this great meeting in milan it's very interesting listen to luca yes i liked it very much luca i like to flavio I like to hear the Chinese consul that just took up term in Milan, who met different people from different companies active in China and Italy, and he said, we do not want to dominate at all. We just want to offer our citizens a good life. And we will keep doing that by... paying a lot of attention to the balance between economic growth and social stability. And in these words, we do not see a threat at all, Flavio. No way. On the contrary, we believe that it is the natural development model of a country that has a lot to offer from the cultural point of view. We belong to this association, Italy-China. What I say And please be careful, but be mindful of this. We want to approach China the way we did with the US and Germany years ago, a lot of respect for their culture. Because you see, there is a golden century ahead for them, for us, for mankind. But at least in my case, I want to display respect for them. Because if you don't have respect, everything changes for the worse. I can see it from the interviews. We had a lot of interviews with them this year. They're really seeking sustainability, beautiful things, exclusive things, the great values, especially the younger. You see, there is a change underway, a strong, a powerful one. And we want to have an amiable approach to this celestial empire. That's the way we dubbed it. And my contribution on the 31st of October, I can't tell you where I will hold this speech, but there will be some important representatives of Chinese culture too. The last topic I want to touch upon, we have all the time in the world. Solomeo project and this event and you'll give us the details but about the industrial project the timing do you think that you will start with that in 2022 well no no thank you for your question so as we said until 2023 we are catered for the place the space that we have is enough this is we have made the purchase of the land now we will start reclaiming in 2022, and we will start the first redevelopment works at the end of 2023, so that already in 2024 there will be something, but we will not build, you see, many, many cubic meters. We will expand 10,000 meters a time, following on the growth of the company. The idea is that In 2028, we will have doubled the revenues vis-à-vis 2018. So it is a constant gradual growth, and it is not too challenging in terms of investments because it is sometimes made stepwise. Thank you very much. Thank you. Now, Milan is playing very well. AC Milan is playing very well, so you will be happy. It's true. That's Italy too, isn't it, Flavio? Italy won many different medals and trophies. We are Italians, and we won the first prize there too.

Very well.

You see, it's part of the really good mood that surrounds Italy nowadays, the government and less arrogance. And today, too, the Ministry of Finance, who does not speak a lot, but he also said we can enjoy good growth. We like this momentum for Italy.

Next question from Paola Carboni, Equita.

Good evening, everybody. Good evening, Brunello. I had two questions you already answered. The first one, the investments vis-à-vis the new industrial plan. So this has been answered. Well, I was intrigued to understand if you can give us a few colors on the positive surprise for you in this strong performance of sales. We had a plus 20 for 2021. That was the guidance, and it's plus 25. Yes. Thank you. Well, Paola, we can say that the first good surprise was Europe, first and foremost, because we had many local customers there. You see, they would say Europe without tourists, and that was the first to suffer. But then, secondly, America is also performing very well. But if you were to ask me, are any countries lagging behind, I would say none. So maybe you see there are companies that really make billions in those countries, and then that's when everything becomes more sensitive. But it is not our case. As you will have seen, we only spoke about sales for one minute. And even at the board meeting this morning, we said, let us talk about sustainability, 10, 20 years plans, and not sales, specific sales at this moment in time, because Sales are going even too well, I might say. And in terms of distribution channel, was retail stronger than expected? No, I have to say the wholesale, too, is going very, very well. They have a whole range of events, beautiful windows, shop windows. I know that we keep talking about wholesale, but I am fully convinced that, you see, you can actually feel how contemporary your brand is from them. So things are really faring very, very well. Well, Paola, then, of course, the prize that we received has definitely bolstered the visibility of our taste, that's for sure.

Thank you very much. Next call. Good evening.

Thank you very much for taking my questions. I have three ones. So the first one, could you please elaborate a little bit about demand by nationality, especially on a two-year basis? So Chinese, Americans, Europeans, what have you been seeing there in particular? So not just by geography, but by nationality. My second question would be, Could you please talk about how significantly Italian revenues were impacted by wholesale timing and deceleration versus any weakness in the retail channel that you might be seeing because of lack of tourism or how, like, can that drop be best described quarter on quarter? And also a small housekeeping question. What's the constant currency growth in the third quarter on a two-year stack?

Because the algorithmic calculation... Can you repeat the last question, please?

Yeah, yeah, yeah, of course. Yeah, so it's a housekeeping question. So what was the constant currency growth in the third quarter on a two-year stack? Because the numbers that you report, constant currency, are slightly different from the algorithmic calculations. So I just wanted to confirm.

Thank you very much.

Well, the last question was not really clear on the calculation So as far as the weight of China in the world, so we have 15% in that world in China. Then 4-5% might come from Chinese customers that travel the world. This is not very easy to have a breakdown because we have the wholesale too, but today we can say that 20% of our revenues comes from that magnificent place. Then as far as Italy is concerned, we have more or less 12%, 13%, but Italy plays a very important role for us because nearly everybody comes to Italy and to France and to London to see how the goods are displayed, how the brand is faring, and you can see it very clearly from how this happens in some stores. And then for the last question, I did not understand it properly. So if I understood properly, Luca said, I think that the difference vis-à-vis the recalculation of the basis of 2019 can only be linked to the different geographical areas in 2019. we still had an area that was the rest of the world. This area does not exist anymore because it is part of the three continents. The only exception to continents is Italy because this is a domestic market, so we keep keeping it apart. Then as far as the whole figure is confirmed, I can confirm the growth to 2019 in the quarter is 12.5%, and vis-à-vis 2020, it is 9%. Was it clear for you? Or if you want, you can ask some more questions.

So versus 2019 in the third quarter is 12.5%. Okay.

Thank you.

Yes, 12.5%. That's right. Yes, we can say that in... We now break down the world in three geographies, Americas, Europe, including Italy and Asia. This is the new breakdown. As I was saying, Asia, 24, 25 points at the end of the year. We estimate that 14 of this is China.

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