Beiersdorf Ag

Thank you, Nathalie, and welcome to Biostoff's first quarter earnings call. With me today are Vincent Warnery, our CEO, and Astrid Herrmann, our CFO. We will share with you Biostoff's results of the first three months of 2023. Due to ad hoc regulations, we already pre-released our main sales figures on April the 5th. Before we start, let me make some technical remarks. Throughout today's presentations, all participants will be in listen-only mode. The presentation will be followed by question and answer. When you register for Q&A, please remember that there is a limit of two questions per caller. And with that, I turn the call over to Vincent.

Thank you, Jens. I would like also to welcome you to today's conference call, and thank you for taking the time to join us. Over the next few minutes, Astrid and I have the pleasure of taking you through our performance in the first quarter. As you are probably already aware from our pre-release at the beginning of April, we had an excellent start to the year and have continued along our successful path. In the past, our performance in the consumer business segment depended heavily on Nivea's business in Germany and on the success of the La Prairie brand. Yet, alongside Nivea in Europe and La Prairie, our main drivers now also include Nivea business in emerging markets, and our successful DERMA business. Our two-wheel drive has become a four-wheel drive. If one wheel loses some of its grip, the other keeps the vehicle moving. Our remarkable Q1 results demonstrate this four-wheel drive is working. Our consumer business segments outperform the market with a broad-based and balanced growth of 14.8%, driven by a strong 18% increase in our Nivea business 26.9% in our derma business, and 7.6% in our healthcare business. Our Nivea business in Europe and in emerging markets, as well as our derma brands, are showing extremely strong and stable growth, strong enough to compensate for the challenging quarter we had with La Prairie. And that's not all. The volume and pricing part of our sales growth was positive throughout the entire consumer business portfolio and despite the difficulties in La Prairie business. These well-balanced pillars and businesses give us greater stability and security in a time of volatility and crisis. Our Tether business segment managed to increase its sales since June 1, 2023 by a moderate plus 0.9%. Although the electronics business in China had a slow start, the rest of the portfolio, including automotive, showed good growth rate throughout the quarter. All these achievements culminated in double-digit growth of plus 12.2% for the group in the first quarter. The hard work we have put into transforming Nivea is beginning to show results. March was actually the best month in the history of our iconic brand. The brand's broad-based growth in all categories is particularly noteworthy. Growth was led by son Lee Pandeo with double-digit growth also reporting on body and face. Although we can attribute this growth primarily to pricing, we can also report a positive volume contribution for the entire Nivea portfolio. We are seeing upward trends across all regions, with North America leading the way in the body business, emerging markets continuing to outperform, especially in Latin America, Northeast Asia and Europe having double-digit growth and experiencing a strong acceleration in Q1. This European growth is what I would like now to look at in greater detail. We are excited to report a strong acceleration of Nivea in Europe with a 14.6% growth driven by a balanced volume and price mix performance. A double-digit jump in such a highly competitive European market is quite extraordinary. Pricing initiatives have yielded positive results, and we have also seen a positive volume contribution in Europe. Moreover, we are happy to share that our most recent price negotiations went well. We have already agreed new prices with the vast majority of retailers. Our base assortment has performed well thanks to the good start of the sun season and an ongoing success story in our body category. We are constantly gaining market share in this category and are seeing strong retail sales with the body category up more than 20% in the first quarter. Another growth driver is our innovations. With Nivea Derma SkinClear, we have not only entered a new segment in the face cleansing category, but also reached younger consumers, making us launch one of our best-ever launches in the skincare market for younger customers. Now I'd like to turn our attention to Nivea business in China. During the first quarter, we managed to grow our business despite the challenging market conditions caused by the sudden ending of corona lockdowns. One reason is the premiumization strategy, which is also gaining momentum both on and offline. We are concentrating our resources on driving premium and high-margin products. We are placing a strong emphasis on face care, and we have experienced great success with Nivea Luminos 630, which we handle via cross-border e-commerce. As a result of our efforts, our face care market share reached an historic high. Over the past year, we have increased the average selling price in the face care category to €22.8 compared to €4.5 in 2020. At the same time, we are continuing to premiumize our core portfolio in our current categories, men, face cleansing, and body, both on and offline. Although we have an established business in China, we have had to optimize our portfolio and focus on more premium products. Our Nivea dual serum is a prime example of this approach, leading the body category and helping to increase the average selling price by 24% from 2020 to to 2022. In summary, we are delighted with the progress we have made in Nivea business in China. Our premiumization strategy is yielding positive results, both on and offline. The momentum in our derma business with the Usuin and Aqua programs has maintained, and we continue to generate high growth rates. In fact, we once again outperformed the market globally, recording double-digit positive growth of close to 27%. Our success in the derma business can be attributed to many factors. First, we are continuing to experience high demand in the United States for Eucerin and Aquaphor products. Additionally, our derma business has developed strongly in emerging markets such as Latin America, where we see already a fantastic sun season. Furthermore, we also have a good start to the sun season in Europe. We were able to act quickly and have increased our market share and our sales in this region. One of our most successful innovations continues to be Eucerin Tiamidol. Products containing our patented ingredient Tiamidol have achieved a remarkable 50% growth in Q1, being thereby one of the main drivers of the total growth. Most recently, We have relaunched and enriched our eucerin hyaluron filler plus elasticity range with Tiamidol. This has enabled us to capitalize on the increasing market trends towards anti-aging products. With plus 29%, the online growth was yet again one of the drivers of our overall growth. This underscores the importance of our digital strategy and our success in engaging with our customers in the online market. With our La Prairie business, we faced a challenging start to the year due to the low traffic in China after the change in COVID policies at the end of 2022. However, with the lifting of the zero COVID policy and travel restrictions, we saw a significant acceleration in retail sales in Hong Kong that started already in January. Shortly after, in February, the brick and mortar retail sales in China mainland began to benefit from increased mobility. And finally, the traffic around Hainan picked up sequentially in March, we already saw a rapid increase in demand. All this good news make us confident about the further development of international travel retail in the remainder of the year. Supported by strong innovation such as Skin Caviar Harmony, La Prairie will benefit from the normalization of traffic in and out of China. We will continue to consistently execute our luxury strategy of focusing on strong innovation, refusing to engage in dilutive promotional activities, accelerating our successful online business, and offering our consumers the highest possible level of service in China and around the world. As I said before, With our well-balanced four wheels, the Nivea business in Europe, the Nivea business in emerging markets, our Dama brands and La Prairie, we are looking ahead with greater stability. With that, I will hand it over to Astrid to go through the financial performance of our consumers and Teza businesses in more detail.

Thank you, Vincent. And good morning also from my side. I'm happy to take you through our first quarter results. Let's start with a quick look at the sales figures of the group and best segments. As pre-announced, the consumer business grew organically by 14.8%. At 14.9%, nominal growth is almost on the same level. The TASA business grew organically by 0.9%. Nominal sales were slightly below the previous year's level due to structural effects. In total, the group generated approximately 2.5 billion euros in the first quarter and achieved organic sales growth of 12.2%. Turning to our regional sales split of the consumer business, our three main regions, Europe, America, Africa, Asia, Australia, all grew double digits in the first three months of the year. Europe saw life-to-life growth of plus 10.8%, Western Europe grew 8.4%, and Eastern Europe was even stronger at plus 20.2% growth compared to the previous years. In those sub-regions, we saw strong positive impact from last year's pricing initiative. The successful start of the sun season was another driver for our Nivea and Derma businesses. The Americas, again, were the strongest region in Q1, with organic sales growth of plus 23.7%. North America's performance continues to be driven by ongoing high demand of our Derma brands, Eucerin and Aquaphor. In addition, Nivea recorded double-digit growth in the first quarter, led by the very good development of the body categories. At plus 32% organic sales growth, Latin America continues its successful journey in 2023. The strong performance in the sun and face care categories in Nivea and in Derma fueled the growth this quarter. Moreover, both businesses continue to gain significant market shares in Latin America. The Africa, Asia, Australia region grew by plus 13.3%. Vincent already mentioned the difficult conditions around China at the beginning of the year. Strong sales for Nivea and Jerma offset the weaker LaParis performance in this region. Japan, Hong Kong, Korea, and Thailand reported very strong sales in the first quarter. As we have already informed you earlier, Teza's electronics business in China got off to a weak start at the beginning of the year due to lower demand for smartphones and tablets. Looking ahead, however, we are very optimistic that the market will pick up again significantly with the next generation of devices. Except for China Electronics, all KESA business areas performed well in the first quarter. The automotive business showed a particularly strong performance in all regions, driving double-digit growth in the quarter. we were able to win new projects based on innovations and thus further expand our business, especially with adhesive solutions for e-mobility. To finish the presentation, let's look at our full-year guidance. Due to the strong start of the consumer business, we already increased our sales guidance when we pre-released our Q1 sales on April 5th. Recent trading makes us very confident to reach mid- to high-single-digit organic sales growth for the full year while increasing our EBIT margin by 50 basis points in the consumer segment. At TAISA, we have kept our full-year sales guidance at mid-single-digit organic sales growth, despite a slower first quarter. We continue to expect the EBIT margin to be slightly below the previous year's level. For the group, this means mid- to high-single-digit organic sales growth in the full year 2023, while increasing our EBIT margin slightly. Thank you for your attention. Back to Jens, who will start our Q&A session for today.

Thank you. At this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. Please remember that we have a maximum of two questions per caller. The first question comes from Ian Simpson at Barclays. Good morning, Ian.

Good morning. Thanks very much and congratulations. A couple of questions from me, if I may. Firstly, when we think about the phasing of La Prairie, you've clearly highlighted very strong exit rates for China in the Q1. Should we think about projecting those rates forwards into Q2, as in how much of that is just a kind of one-hit boost on reopening and how much of it is the fact that consumers' demand has come back and you have easy comps and that actually that probably is the growth rate until the comps normalise. And then the second question, if I may, you've clearly had a good start to the sun care season in Q1. Certainly, in terms of the weather in London in April, it's been slightly on the colder side. How should we think about your sort of expectations for sun care going through Q2 and Q3? You know, the weather comp in Q2 last year, was that a fairly normal season or was it warmer weather than usual? Thank you very much.

Thank you, Yann. On your first question, as I mentioned, we are pretty happy with the retail sales of La Prairie. And you see this evolution first from Hong Kong, then China, mainland Hong Kong. Still, we have to absorb, you know, some stocks. So I think we'll be... pretty clean at the end of March. We are clean at the end of March with the brick and mortar business. We still have to absorb some stocks in the travel retail. We are still very negative in Korea. You know that there was a change of market conditions for Daegu, and we are not willing, like other competitors, to subsidize this business. So we are losing in Korea. So all in all, we are expecting the start of the turnaround in June. And clearly, very big and much better turnaround in Q3 and Q4. So don't expect a magical Q2. It will be a good one, but clearly the turnaround is starting more at the end of the Q2 than at the beginning. On your second question about sun care, we are, as you rightly say, we are more into the setting phase. We are preparing the summer. What we can see that in the countries where we are already the summer, and especially the southern part of Latin America, we have great results. We have also been lucky enough to have a great service level, so we have zero out of stock and we are ready with a point-of-sale material for the whole country. So far, so good. As you rightly said, the sun season is also linked to the weather forecast, but we are pretty positive and optimistic regarding our ability to seize the sun when it comes on both Nivea, Usuin, and also Coppertone.

Thank you very much. Thank you. We move on. Next on the line we have Kate Rusanova at UBS. Good morning, Kate.

Good morning. Thank you for taking my questions. So first of all, I wanted to ask, with the full effect from pricing materializing in Q2 and past acceleration in China, would it be fair to assume that your growth in Q2 will be at least as good as the one you reported in the first quarter? And then my second question is on La Prairie. North America was a little bit soft in Q4 last year for the Brent. So I was just wondering if you have seen significant changes in trends in this quarter. Thank you.

So on your first question, the Q2 is looking good. So the current trading is good. So we might have also a good quarter. We still have two months to go, but Obviously, we are pretty optimistic and we just answered to Yann. Obviously, the Sun sellout will also play a key role. But all in all, a good prospect for Q2. On La Prairie, what we are seeing is clearly, as I said, the acceleration of China. And we have an ecosystem which is also much more positive. We used to rely only on brick and mortar a few years ago. Then we moved to Hainan, and here we have 10 points of sales. And also, two years ago, we started to invest in strongly in e-commerce, first with Tmall, then JD.com, and in the next month's TikTok. So all in all, we believe that we are in the perfect situation to seize the turnaround of China. What still remains complicated is travel retail. Travel retail, obviously, as we have seen some good back-to-growth in the neighboring places from china the question is will it go also in europe will it go also in in america this is a question that we are asking ourselves so that's something we are ready also to see the the the second question is the us you might know that you know the the way the the luxury development is happening in in the us is more you know uh having this those uh uh those perfumery channels, like Sephora, like Ulta, opening point of sale in channels that are totally different, Target, Kohl's. In this market, the average price is $20. This is not really where we belong. So we are highly investing on the department store, where we have also a very strong relationship. As you might remember, we are the only brand having access to the data, so we are able to do CRM programs with all the clients of those stores, which is a very strong tool in order to boost the loyalty and increase the size of the basket. So U.S., I would say, difficult environment for us, but we will stick to where we are good at, which is, you know, department store, upper end of department store, developing further the loyalty of our consumers.

Okay. We move on. Next in line is Jeremy Fialkow at HSBC. Good morning, Jeremy. Please go ahead.

Hi, good morning, everybody. Thanks for taking the questions. So a couple from me. The first one is if you could talk about what you think the growth rate of your end markets were, either across the different, like the brand segments, so the markets for Nivea, the markets for Derma in particular, so what your degree of outperformance was. And I think the second point is that we've gone through this Q1 reporting season. You and all of your peers seem to be reporting numbers that are somewhat better than we'd expected at the beginning of the year. So maybe you could just give us what your take is on the overall consumer environment, their spend levels within the category, and how sustainable you think this consumer environment is or the degree you see a slowdown. in subsequent courses. Thanks.

So Astrid, we'll take the first question and we'll answer after to your second question.

In terms of growth rates, obviously, I'm not sure whether you were asking sell-off performance or sell-in performance. You see, noticeably, the key competitors that have already published their results, and there we certainly are at the very top end of that performance and clearly believe that we're outperforming the market. In terms of sell-out and the market shares we are tracking, we're also seeing very, very strong performance across all of our brands. We are gaining shares very, very broadly.

On your second question, the question The feeling we have, looking at the last two quarters, and you remember we had this question about price sensibility, we are pretty optimistic. We have been increasing prices, like most of our competitors, and the positive things is that it has succeeded in the sense that we increase, obviously, the value of our brands, but also we increase volumes. And all the key categories for us, you know, and not only, by the way, skincare, if you look at deodorants also, we see clearly that the price increase was not done at the expense of volume. So we are pretty optimistic on the fact that, you know, we have a very sustainable growth in this beauty market. Obviously, face care remains the top category in growth and also for us potential of growth, and we are optimistic. As you might remember, we are very European with our face care business, and we are expanding it across the world. So we believe, to answer your question, that the current growth is pretty sustainable. We will not keep the double-digit growth of the market that we have seen over the last quarter, but I believe that there is one market which has shown some strong resilience facing inflation. This is a beauty market, so we are happy to be strongly focusing on this market.

Okay, thanks very much.

Thank you. I can see here next we have Chris Pitcher at Redburn. Hi, Chris.

Good morning. Thank you very much. A couple of questions, please. Following on slightly from the previous question on pricing, given where we are now with Nivea, are you more encouraged about the ability to take the product up the premium ladder, not just purely in price, but in terms of more mix? If you were to index Nivea last year? I mean, where do you think you can take the brand to? And then, secondly, a bit more color on La Prairie. Can you give us an update on how distribution expansion is happening in China in terms of doors, etc.? Did that pause because of the COVID disruption, or is that still on track? Thank you.

Thank you, Chris. I think on your question, yes, I think we have demonstrated the ability of Nivea to be more premium. You know, the the best success ever of Nivea is the Luminous 630 that I was mentioning, and we are selling the product, according to the country, between 25 and 29 euros, and we used to be more, depending on products sold, between 5 and 10 euros. Is there a limit to this premiumization? Yes, I think we have absolutely to respect the equity of Nivea, which is a value for Monet Brands. So this is why when the price increase we have done in 2023 are more reasonable in comparison to 2022, also because the ICP The cost of goods increase was not as high as 2022. So I think we are looking at that with a lot of scrutiny in order not to cross the line and to become too expensive in the eyes of consumers. Regarding the rest of the portfolio, of course, no limit on La Prairie and Dermat. Also, I would say we have also to be sure that we have to connect price to the skin performance we are bringing to the consumers. On your second question about the distribution in China, so we have opened in the first quarter of 2023 ten locations, out of which five in China. You remember that one of the changes or the developments we announced last time, that we want clearly to expand the distribution of La Prairie in China. We are today only in 35 cities. In China, we want to be in 42 cities by the end of the year. We want also, eventually, so by the end of 2023, we want to be in 100 stores, which is still very small in comparison with or competitors, but we believe it's the best way to tackle the development of the upper class in China. At the same time also, we are developing, as I said, our approach with e-commerce, so very successful with Tmall, very successful with JD.com, and both brought new consumers, younger consumers also living in those cities where we had no point of sale. And I think the same size of basket, which is also good in terms of efficiency. So we will continue to develop those e-retailers. And we are also working with TikTok, which is also a new channel for us. So all in all, we will deliver what we promise in terms of slow distribution buildup in China. but this ecosystem, combination of brick and mortar, high-end and e-commerce, allowing us to really touch our consumers where they are and where they buy.

Thank you very much.

Thank you. I can see here that Karel Zuter is next. Kepler, good morning, Karel.

Yes, good morning all. Thanks for taking the question. I have two questions. The first one is on the Shantakelli, which is now part of the organic growth, I think, during the quarter. How did the brand perform organically? And then also, yeah, if you could look at the US and China performance. And the other question is a bit more high level. You see that the derma businesses are going from strength to strength for a while now. Of course, you have the luminous innovation, but we see similar trends at competitors. Why do you think that derma is now structurally growing at 20% and taking a lot of share within the overall skincare market. Thank you.

Thank you, Karel. On Chantecaille, we are consolidating Chantecaille only for the first two months. We're looking at the growth only the last two months of the quarter, February and March. because we bought the company last year in February. We have a good quarter in terms of retail sales, particularly in the US. We are growing high single digits in North America. We are growing strong double digits in Western Europe. We are also doing a great job in China cross-border. This is the only place where we are in China, and we are even growing 60%. So we are preparing a launch in China mainland, and that's something we are doing with the The complexity we have like many other brands is Korea. We have a strong decline in Korea again because of the change of regulation and we are again not willing to subsidize the Daegu in Korea. It is a negative for the last two months of the quarter, but we are seeing some good recovery in the months to come because, as I said, retail sales are very positive. What we have done, which was absolutely essential for us also, is to build the right Chantecaille operating model so we recruited you know the the all the leaders of the company starting with the ceo but also ceo cfo hr marketing and and supply we also achieved an extremely good service level and when we bought the the brand you know the service level was extremely bad i think in the first quarter we have 98 service level which is absolutely essential to succeed so we are in a positive situation we are also moving to sap so we are doing i would say all the basics with Chantecaille in order to benefit from the growth of the market and to also expand the distribution of the business. On your second question, that's a great question. I've been managing DERMA since seven years. I would say what is driving the strength of DERMA, first I would say the fact that consumers want to have safe products, products which are recommended by dermatologists, recommended by pharmacists, you know, and that's obviously the best category for that. The second element, I think all of us, all the competitors we have in mind, but also by ourselves, we did a pretty good job in... preserving, you know, the strong equity of our brands, of doing a good job in terms of connection with dermatologists, in terms of also being true with our products. And the last thing which we are particularly benefiting from is when you come with top innovation, and Tiamidol was the top innovation we initiated in 2018, then you have an immediate reaction, not only from dermatologists, not only from pharmacists, but also from consumers. And when you consumer you know which has found the right product you know to deal with his or her acne his or her atopic skin his or her dry skin is is loyal to the brand and is buying the brand and you don't need to over promote the brand to do that so this is you know what we are delivering we are so very lucky in the sense that we still have a lot of white spaces we want to occupy as you might remember we Launch that you screen in Brazil in in China. We are launching in Poland We have launched last year. You screen soon in the US. We have some some great project also in the US So I would say for them are for by party for you through in the aquifer. The the sky is really the limit Interesting, thanks.

Thank you. I Can see here next call is Olivia Nikolai Goldman. Olivia. Good morning. I

Good morning Vincent, Astrid, and Jens. Thanks a lot. Just a couple of questions, very briefly. First of all, on your margin guidance, with a strong Q1 and good trading in Q2, with a rebound in La Prairie, presumably less input cost inflation in H2, is it fair to assume that the gross margin is going to increase quite significantly ahead of EBIT margin, and therefore are we going to see marketing spend increase ahead of sales this year? That's the first question. And then just a second one. On Nivea, you talk a lot about Luminous. I was just wondering, within Nivea Skin Care, what's the proportion of your cells coming from Luminous, Q10, and then the more mainstream products like Nivea Soft, for instance? Thank you.

Nivea, I will take your first question regarding emerging items. And yes, you are right. Our first margin is looking to be ahead of our overall margin guidance for the year, which we are obviously very happy about. And yes, we continue to very much want to invest in the business and including, obviously, in advertising and media.

On your question about face care and within face care of Luminous and Q10, so face care is still... small, at least not one of the top categories. You know, the categories like body, like deodorants are still much bigger. But this is obviously the one which is going the fastest because we are launching face care across the world. So within face care, we have a business which is pretty well-spread. We have Luminous, I would say, which is one-third of the face care business. We have Q10 that you mentioned, which is also one-third. And we are also having a good momentum on Q10 because we just launched a top product for the eye area, which is flying in Europe. And the third category are more accessible products, which allows us to be also always accessible. You might remember that in face care, we have a range of products from 25, 29 euros with Luminous. down to three euros, you know, with our essential, so covering also all kinds of consumer expectations. So, clearly, face care is the place we will continue to invest on in order to develop the brand, also to develop the equity of the brand.

That's very clear. Thank you.

Thanks. I have the last caller here today, Rogerio Fujimori of Stifle. Rogerio, good morning.

Good morning. I have, thanks for taking my, I have two questions on IVEA. First one on the very strong growth in North America. I was just wondering if you could talk a little bit about the price versus mix and volume contribution. Was selling aligned with sellout? And have you seen any changes in terms of month on month and also April in terms of pace of growth in the U.S.? And then my second question is on Nivea in China and the impressive ASP gains in the last couple of years. Do you expect ASP to also grow at double digit rate in 2023, given your innovation pipeline to drive humanization in China. Thank you.

So on your first question about the US, I think what we have done in the US, we have been refocusing on the right categories. There were some mistakes, you know, for example, to start to try to invest on shower gels, and we have honestly no right to win in shower gels. We are a very small player, so that was a waste of energy. We refocused on body, we refocused on men, and we came with the right mix of innovation, of digital marketing activities, and we are a brand which is also very strong in the African-American community. So we are benefiting also from the fact that this is a population which is developing in the U.S. So all in all, you know, a very successful business. The mixed volume price is pretty in line with the rest of Nivea. So we go double digit. I would say one third is volume, two thirds is price. We will continue to invest in the U.S. We are also looking at other opportunities for the brand, as you mentioned. There are many categories in which we could develop the brand Nivea, but this is something we'll do when we have developed a very sustainable position in the two priority markets, which are body and men. On Nivea China, you're asking the right question. We have done the work, you know, moving to a price, you know, of around 20, 25. I'm not sure we can go much higher. The story on face care is more to be able to offer a regimen to consumers, to be able to complement this top product, Luminous, by, you know, the famous seven products that the Chinese woman is using. And the fact that we have an R&D center in Shanghai, so a factory in Shanghai is helping us developing against this roadmap. On the other categories, clearly we have room for what we call this premiumization. We used to be highly represented in cheap personal care offline categories. We want to be much stronger in premium online skincare categories. It means increasing prices. It means launching new products with a much higher price. It means also stopping existing franchises which are not adding to the equity of the brand. This is what we are going through, and we will continue to do that, again, benefiting from the fact that we have a strong R&D facility in China.

Thank you very much. Thank you. We have a new entry, actually. Michael, or not, Misha, please go ahead.

Hi, just a quick one from me. So, you know, Q1 was very strong. You commented on good trading in Q2 so far. There will be a benefit of China reopening starting from June. Is it fair to say that your top line guidance for the full year is somewhat conservative? Yes. Very clear.

Thank you. Okay, that was a brief one. Okay, so we have Kawan Rashad at Morgan Stanley, currently the last caller. Good morning.

Hey, good morning, and thanks, gentlemen, for taking my question, and congrats on the results. Just a quick one from me. Is there any update you can give us on the cash deployment front? I know you've been quite vocal around the pace of discussions you've been having with the board. So if there's anything you can share there, that would be great. Thank you.

We are working with the board, with the supervisory board. We are working with the shareholders. I mean, of course, you would be surprised if I was telling you that we are moving to quarterly dividends. So dividend is not something we'll discuss before next year when we close the year. But there are many other discussions we are having on M&A. on the way we can better, you know, use the capital, the cash we have at our disposal. So I hope, you know, to come, as I said, to come with news on this area, but especially in the area of M&A, as you know, this is also a very competitive environment. So we might be interested in some acquisitions, but we might also not be able to get them. So I hope that it will come soon.

Very clear. Thank you.

Thank you. I don't see any new callers here. So this actually concludes Biostoff's first quarter earnings call. Our next investor relations event will be the six-month results call on August the 3rd. We appreciate your interest in Biostoff. Thank you and goodbye.