De Longhi Spa

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the De'Longhi Full Year 2021 Consolidated Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Massimo Garavaglia, CEO of De'Longhi. Please go ahead, sir.

Thank you. And good afternoon, ladies and gentlemen, and welcome to the De'Longhi Group 2021 Full Year Results Conference Call. I'm here together with Marco Cenci, Chief Strategy and Control Officer, Stefano Biella, CFO, Fabrizio Micheli, Director of M&A and Investor Relations, first of all let me remark that we are profoundly shocked by the current situation in europe and all our thoughts and deeper sympathy are with the people in the conflict areas especially our colleagues and our family we make sure in first place to secure our people in that area supporting the move of ukrainian employees to poland And now we are closely monitoring the situation, working with a focused task force both in our headquarter and in Poland. Moreover, we have approved a total donation of 1 million euro in favor of NGO partners as a support of the population in Ukraine affected by this terrible war. Focusing now on the evolved area, in 2021, Ukraine accounted for around 34 million sales, while Russia revenues were around 125 million, that brings a total exposure of around 160 million, i.e. 5% of total revenues of the group. At the moment, we probably estimate zero revenues for now onwards for the Ukraine and Russian businesses, with a slightly negative impact at the BDI level due to some fixed costs. The current situation in Russia is rather complex and we are carrying out further evaluation, but for the moment we have paused all our investment in the area and we are not delivering any more additional products to our local warehouses. No other direct effects have been spotted, and both our subsidiaries, the border countries and the factories in Romania, are working without any interruption. Moving now on the 2021 results. My first comment is that the key pillars of our strategy are driving the business growth with a focus on the expansion of our core categories, in particular, in the coffee area and the strengthening of our international presence where we are working to increase the penetration in America and in Asia and reinforce our leadership in Europe. These drivers have been reinforced by increasing investment in communications such as the global ambassador campaign, in innovation such as the completion of our very successful La Specialista range in new capacity as for the new factory in Romania that will be specifically dedicated to our coffee segment. Before going into more details, let me remind you that the group's scope of consolidation in the 12 months of 2021 has included also the American group, Capital Brands, and starting from April 1st, the Swiss group, Eversys. Talking about 2021, I would like to mention the exceptional contribution of all our employees that in the last two years have been showing an extraordinary commitment and dedication, allowing the group to achieve record results with revenue above €3.2 billion and an adjusted BDA above €500 million. I would like also to thank all our business partners, distributors, suppliers that have helped us to overcome the difficulties arising and that we had to face in the past years. Consolidation revenues for the 12 months of 2021 were up by 37%, with a strong expansion and constant perimeter of approximately 24%, and always at a constant perimeter, a growth of 11% in the last quarter. Looking at slide 10, and looking at the markets on a constant perimeter basis, South and Western Europe achieved double-digit growth in both the 12 months and the fourth quarter, thanks to an important contribution from the main countries in this area, such as Germany, France, Italy, and the Iberian region. Similarly, the northeastern Europe grew strongly, with almost all the countries in the region realizing a double-digit growth in the 12 months and maintaining a significant pace of expansion in Q4. In the full year, the weight of Russia and Ukraine on the total revenue, as I said, was around 5% of the new perimeter. The Americas region achieved a remarkable growth of 30% in 2021, also confirmed by a strong performance in the last quarter, plus 23%, supported by significant acceleration in the coffee segment. The near region recorded a growth in the 12 months of around 43%, higher than the group average. And finally, Asia-Pacific grew by 10.3% in the 12 months, thanks to the expansion of double-digit rate of the main market, such as Australia, New Zealand, China, and Hong Kong. Now on slide 11, looking at the main product segment, 2021 witnessed a significant expansion of our core categories, in particular the coffee segment. that has achieved more than $1.6 billion in revenues and is accounting now for 50% of the total new perimeter revenues. Always on a constant perimeter basis, we are reporting. Double-digit growth of the coffee maker sales in both 12 months and four quarters, supported by a robust expansion of fully automatic and manual machines. A double-digit growth of the cooking and food preparation segment, driven by an expansion of the main product families, such as kitchen machine and blenders, both growing at a double-digit rate in the 12 months. A more moderate growth of the comfort segment, portable air conditioner heaters, and the substantial stability of the home care segment, cleaning and ironing. On slide 14, As regards to the margin of evolution in the 12 months, the net industrial margin improved in terms of percentage of revenues from 49.2% to 49.7% thanks to the efficiency action and the positive contribution of the pricing strategy and mix. Adjusted EBDA amounted to €515 million, an increase of 40.5%, equal to 16% of the revenues, improving from 15.6% in 2020. As a result, even more significant considering the increase of more than €100 million investment in communication and marketing. In more detail, the fiscal year 21 adjusted BDA margin at cost and perimeter remained at 15.6 percent thanks to a positive impact from a price mix of around 121 million and the efficiencies implemented that have more than offset the cost inflation worth around 100 million and despite the increase of AP investment which went from 12.5 percent in 2020 to 13.5 percent of revenues at cost and perimeter. This percentage of new perimeter will be 12.5%. Looking at the quarter four, always at cost of perimeter, the adjusted EBDA margin was 14.4%, including a higher spent on AMP at around 16.6% of revenue in the quarter. versus 14.6% of last year, and this is mainly due to the launch of the new global ambassador campaign. On slide 19, as to the balance sheet, the net financial position of December 34th was positive by 425 million, improving by 197 million in the 12 months, Before dividend and acquisition, the cash generation proved to be even stronger, equal to 407 million in the past 12 months. Bear in mind that the free cash flow figures include investment for 132 million, that is an increase of 43 million euros compared to 2020, and an impact of the net working capital that is essentially neutral. Now, finally on slide 21, as a general final overview, let me say that we have delivered a great and a record set of results which testify the success of the long-term strategic vision. This approach will lead a good strategy also in the following years, as we can count on strong structural trends in our core segments, on the effectiveness of our investment in innovation, communication and marketing, and on the strengths of our brands. Unfortunately, the recent geopolitical developments, together with the criticalities arising in the supply chain, are making the macroeconomic context more difficult to read in the near future. More specifically, the geopolitical development in Ukraine led us to bring to zero the expected contribution of the two markets involved in this terrible conflict for the remainder of the year. Therefore, forecasting organic revenues of 2020 for the group now in line with 2021. The management intends to give continuity to the investment plans in communication and the strengthening of the organization and production structure, which overall will bring the expected adjusted EBITDA for 2022 to around €450 million. We can now open the floor to the questions. Thank you very much.

Excuse me, this is the Coral School Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Luca Baccoccoli with Intesa San Paolo. Please go ahead.

Hi, good afternoon, everyone. A few questions from my side. The first one regards Russia. So what is the trade receivable amount left against Russia counterparties at the end of 2020, if any? I saw that maybe there were some write-offs in 2021. one balance sheet, but maybe there's still something to write off. The second question regards the networking capital trend because there's quite a large increase on inventories, but at the same time it was almost offset by payables and receivables, so what should we expect this year? And finally, a question on the adjusted BIDA guidance for 2022, just to try and reconcile the 450 million Euro target. This means basically 65 million Euros lower EBITDA with the same revenues of last year. I was wondering to what extent this is related to the increased raw materials and freight to what extent is that related to the Russian and Ukraine business freeze and the increase in advertising and promotion. Thank you.

Thank you Luca for the question. On the receivable in the area, as you noticed, we have been taking already, we were very prudent, we've taken already the 10 million euro in 2021 to cover all the exposure of our working capital, receivables and stock in Ukraine. Therefore, that's already taken. For what is concerning Russia, at the moment, we are carrying around 15 million euros of receivables that we have been able to reduce sharply and these are receivables that are all insured by a primary international insurer and therefore we are in a position today with all the information that we have today to say that we consider that to be on the safe side. We would like to see the evolution of the next days and weeks. But again, on that side, we don't see an exposure today of Russia in terms of receivables. What I would like to stress is that while we are collecting this remaining amount, we also decided already to suspend all deliveries of our products to Russia, and we have decided to suspend all investments in the country where we are operating. We don't have factories. We are operating through a subsidiary. For what is concerning the BDA 2022, the $450 million that we have indicated, they are incorporated from our original plan, a reduction of around $35 million impact coming from the situation in Ukraine and Russia. I mentioned before that in the course of the year we are expecting to have an impact in terms of top line of around 150, 160 million since we decided to suspend all the sales in the two countries. And therefore, you know, this impact of 30, 35 million would have both, obviously, you can make the calculation, our initial estimation to a higher number in the region of the 485, probably 490 million. The difference is due to the fact, as I mentioned before, that we are planning to continue with our very successful strategy in terms of communication. As you all know, we have started our global campaign last year in September, so there was quite a big impact obviously in the last quarter of last year. We want to finance this campaign in all the geographies in the first semester of this year. So we are expecting to have around 1% that will be dedicated to the global ambassador campaign to our communication plan. We cover all the cost and inflation that we estimate to be 100 million with our pricing strategy and our mix. And what is left will be some additional OPEX and effects impact that we can estimate to be below 1%, around half percent. If I can, on the networking capital, we had a clear strategy that has been initiated already in the past to bring down our operating working capital that now is at around 6% coming from slightly below the 10% in 2020. and 20% in 2019. We have been doing that, remaining very prudent in keeping the necessary inventory to face the disruption that we have been seeing in the past year on the supply chain side. So there was a prudent approach to have the right level of inventory and the right level of stocks. and managing the other two components of the net working capital both on the payable but also on the receivable that have been helping a lot to offset the planned increase in inventory. We want to be extremely disciplined in managing, continuing to managing our working capital also in this new year. We want to do it putting obviously a lot of effort in managing well the stock, but at the same time continuing our policy on the payable and on the receivable side.

So this means basically you expect that this level of

the 6% ratio as a percentage of sales is going to be sustainable going forward?

We have been reaching the 6%, targeted to be below 10%. The ambition for us will be to continue to target that level. Obviously, as you can imagine, especially on the supply chain side, there have been quite some challenges, and obviously we need to continue to monitor. But I would tend to say that our target should be to stay below the previously communicated objective, below the 10%.

Okay. Thank you.

Thank you.

The next question is from Lorenzo Margiotto with Bank of America. Please go ahead.

Hi, guys. Thanks for taking the questions. Three from me, please, if that's okay. The first one, I think you said you were planning this year for something like $480, $490 million of EBITDA, and obviously your guidance is now a bit below that. Either way, if I look into 2023, the midterm plan, had implied an EBITDA margin of around 16% or something like this, which is quite a lot higher than both of those. I know you're not updating the midterm plan today, but do you think that sort of high 15%, 16% EBITDA margin range is still realistic? Or, you know, with the headwinds from everything really, should we be thinking about that differently? That would be one. The second question is just, I think you commented in the remarks that coffee in the US had seen a marked improvement. I think that's an opportunity you've spoken about for some time, but it's still fairly nascent. Is that something you're starting to get more excited about on the next two or three years, or is it still very early to comment on that? And then, I guess, thirdly, if you could just confirm what you think sort of AMP penetration as a percentage of sales could do next year, assuming your guidance proves to be accurate, what would you expect AMP to be?

Thank you. Yeah, thanks for the answer.

On the... Yeah, on the... Looking at the 2023 where we have planned obviously to have our margin in the range that we have been indicated, definitely we will come back on that. Our plan will continue to be in that direction, in the sense that we will continue to the growth driver that we have been identified, coffee being one of that, the international splash should be another one. And therefore, as I said, now after this situation that happened in Ukraine and Russia, we decided to postpone our course specifically on the MTP, but we'll come back shortly. Our strategy remains unchanged. Our plans remain unchanged. And we will come back on more details. For sure, the 2023 will see, I can already say, stabilization of our AMP spend because we know that we started the campaign. We have to complete now our campaign in 2022. But the 2023 will not see that additional impact anymore. So that for sure will benefit the possibility to bring additional margin. On the coffee U.S. that will add also coffee Asia and China, absolutely, we are very excited. We have been seeing a very strong growth this year, and we plan a strong growth also in 2022 in both countries. I must say that what we have seen is that our investment, our new launches gave us the opportunity to increase again in coffee the market share basically in all regions. We increased in 2021 in a fully automatic machine that is a core of the espresso coffee business. We increased by 2% our growth. And we see, as I was mentioning, a stronger penetration in the U.S. We are seeing a strong market activation in China and in Asia in general, but definitely in China. So we will continue to support it with investment. And this is also thanks to the campaign and the Global Ambassador campaign. On the INP, for this year, as I mentioned before, We foresee to have on the total revenue around 1% additional spent that mainly is meant to complete the H1 global campaign that we have initiated last September. And then we believe that at this level we will enter in 2023 where we will not have additional increase on AMP because we believe that on a full year basis, an additional 1% is very functional for our strategy and for our pledge.

Thank you. That's very clear. When you say flat on 23, do you mean as a percentage of sales or flat in an absolute sense?

That's AMP.

There we will be absolutely for sure flat in terms of percentage and probably and you know we will have to look at it will be something that we will now assess correctly but for sure in terms of percentage of sales there will not be any increase. We will come back with our plan looking at the growth that we can for 2023. Okay, great.

Thank you very much.

The next question is from Alessandro Cecchini with Equita. Please go ahead.

Hello, everybody. Can you hear me? Hello?

Yeah, there you are.

Okay, thank you. Thank you very much for taking my questions. The first one, if you could elaborate a little bit more on what you are seeing until now, until the end of February, first of March, of course, in what kind of organic trends are you seeing globally for your company, for Delonghi, of course, excluding the two areas that are eaten. And if you could elaborate on coffee and the food preparation, if it's possible. My second question is on inflation costs. So you basically said, if I am not wrong, that you expect 100 million of additional headwinds coming from raw material, freight, and so on. This kind of situation is covered by hedging, so you still see this kind of number reasonable considering the current situation. And finally, what I would like to better understand is on M&A strategy, we know from public press releases that actually your main shareholder is owner of Lamarzocco, that it's a company that fits very well with you, and it's very coherent with your strategy, your footprint. So I would like to better understand what kind of obstacles you see for a merger between De'Longhi and this company, also considering that there are not many companies in the world in the professional coffee, and it's for you one priority. And finally, on the balance sheet, you executed a very strong cash generation this year, much more than what you were expecting. Do you think that it's possible also to use this cash to effectively execute buyback, or is something just on paper? Thank you.

On the current trading and the two months, we started very strong, better than our expectation, considering that we had a calm basis versus last year of where we increased our sales by around 60%. So we have seen a good start of of the of the year uh and uh obviously now we are looking at uh you know uh evaluating well at the next the next month in the next future on the first two months reconfirming again very strong uh growth driver in the coffee uh and here also again the market activation in all in all regions have been very good and the campaign has supported very well the sales, especially with the automatic machine. On the food preparation, we see after a very high performance of last year, a more regular pace. because it is comparing with the very strong performance that we had in the prior year, while the Sedum coffee, the growth has been very good and in line or even above our expectation. On the cost, we have mentioned this $100,000 additional costs that we are seeing between roads, components, and freight that we are covering with a price increase that has been already applied and a price mix. Similarly to what we have been doing last year, also last year we had $100 million in costs. We generated then between our price strategy and the mix around $121 million 121 million. So also this year we are very committed, the price increases we have already put in place at the beginning of the year to offset these 100 million and today what we see is the 100 million that will be impacting us in 2022. For what is, you mentioned the professional coffee business in Mazzocco, for what is concerning Mazzocco, as you know, is not in the perimeter of De'Longhi. I cannot comment on what will be eventually the decision that will be taken by the holding companies in Mazzocco. While I can comment is on Eversys that entered the perimeter of De'Longhi Group this year in April. and we have seen a very strong development of the business. We have a record order book for the company, and therefore we believe that we are set to have a very good year with Aversys in our professional coffee business. For the buyback, the last information here, that we have mentioned this is more no buyback is foreseen where I can tell you that obviously there has been an improved liquidity of the stock that is keeping the volume higher. So this is what I can comment on. on your questions.

Thank you. On the coffee side, so what I would like to better understand is basically do you expect that to maintain growth, to increase market share even if people are going out or the situation in the state home is potentially different this year versus previous year thanks to this investment. So I would like your view on this. So you are still seeing really good trends even if in the coffee, even if the economy is opening up and basically if you think that this is sustainable and if it's driven by your investments in marketing of course and product launches.

Yeah, I have to say that we still see an important growth of the coffee. It's evolving strongly. It's a market that, especially in the espresso area, double-digit growth since many years. And we see the same for the fully automatic coffee machine that is our core within the espresso coffee segment three. the relevance of the fully automatic coffee machine in the espresso coffee market has been increased by four percentage points in units in the past three years. And we have seen that evolving. Why we believe that the trend will continue independently from modification that will be due to the pandemic situation is because it's really an underlying trend coming from many years and at the same time we have seen that this solution of coffee maker is adopted more and more by different geography. That's why I mentioned before our intention to expand with investment our business also in geography outside Europe. And at the same time, referring to our communication campaign, we have seen that it has really helped a lot the market activation, also in areas where the penetration of the fully automatic coffee machine was a bit lower, like it is, for example, in Spain and in Italy, we have seen a significant growth of the reaction to our campaign. So our positive mood on the coffee motivated on one side of the things that we are doing being the leader in the market and at the same time on the international expansion that we are seeing in, as I said, especially in U.S. and in Asia. Then talking about the changing of habits that you have been mentioning, we have seen that some of the changes that have been forced in a certain way by the pandemic will remain, are remaining also in the new normal. Therefore, overall on the coffee, we see big opportunity to grow. We are growing and will be very committed to support the growth. That's why, for instance, we have also now invested in a new plan that will be state-of-the-art and fully dedicated to coffee machines to reinforce our network in Romania.

Okay, thank you.

The next question is from Murad Lamidi with BNP Paribas. Please go ahead.

Yes, good evening gentlemen. Thank you for taking my questions. So I have two. The first one is on your input cost, more specifically roadmap components and FRET. Could you give us some kind of, what is the visibility that you have on the cost of these components in terms of months of sourcing. And beyond that visibility, at this point, would you say that you will see another step up in input cost or stabilization? considering the hedging. And I have another one on pricing. It seems that pricing has picked up quite significantly in Q4. You also mentioned that you lifted prices in the beginning of the year. Could you give us a magnitude of the price lift that you implemented since the start of the year, please?

Sure. No, thank you for the question.

On the input cost, as I mentioned, we have this $100 million, and at the moment we believe that that is the impact that we are having. Obviously, we will continue to monitor the situation, but it's too early now to say if there will be eventually an additional rise. We are, as I said, covering this $100 million reduction that we've been taking on pricing at the beginning of the year and with our mix, as we did last year. In terms of pricing, to give an indication, we talked about a price increase between around 3% for the year. And obviously, there have been selective price increases depending on different parts of our portfolio. But on the average side, we can talk about a 3% increase for 2022.

Okay, thank you very much.

The next question is from Isacco Brambilla with Mediobanca. Please go ahead.

Hi, good evening everybody. Thanks for taking my questions. I have two. The first one is on your strategy for Eastern Europe. Looking beyond the decision to zero the contribution this year, what's your strategy for this market longer term? Also, can you recall us if your business in Russia and Ukraine is particularly skewed to some specific product categories? I mean, coffee makers, food prep, or home comfort. Second question is on cash redeployment. You closed also 2021 with an outstanding free cash regeneration and now sit on a net cash pile situation. above 400 million euros, which are the priorities for redeploying this cash? Also, can you provide some comments on the environment in terms of multiples for acquisitions? I would be interested especially in professional coffee, but also in other areas of interest for you.

On Eastern Europe, as I said, we continue with our plan in the region. As I speak, we are not seeing impact on our plan. On Russia and Ukraine in general, where I mentioned the total impact or exposure in our revenue was around 5%, it was a bit across the different category with a level of profitability that was somehow in line with the rest of the group, but spread on similar, let's say, composition in terms of portfolio. For what is concerning the cash, as you know, we have, and also we reconfirmed it today, we have defined a clear policy on the dividend side, and we are committed to that. We reconfirmed that, and today we reconfirmed the 40% payout ratio. At the same time, as I mentioned in the past, we are always looking at opportunity to expand our business also through possible acquisitions. Last year, I would like to remind, in the last 18 months basically, we have been making our move in the U.S. with Capital Brands, and we have made what we believe is an important step with Eversys in Switzerland, in the professional coffee, also their fully automatic machine for professional coffee market. On the multiple, as you all know, today the situation remains a bit volatile, and we will continue to look at opportunities and we will continue to look at targets that will fit with our strategy.

Okay, many thanks.

The next question is from Francesco Brilli with Inter Montesim. Please go ahead.

Hello, good evening. Thanks for taking my questions. A couple of quick questions. The first one is a more general one on the guidance, and I trust you have assessed very carefully all the moving parts in assessing and providing the guidance. I was wondering if you can share with us the kind of sensitivity on which factors could trigger an over performance compared to these guidance you provided and on the other side what could be a threat to this. And the second one is on price increases. Assuming on average a 50% cost increase in your raw materials and I mean, based on the gross margin you have, you will need some kind of 25% price increases to offset this increase. Is something that is fair? And if so, at which point you are on this price increase, consider also the price increases you deployed in the last six months.

Thank you.

On the guidance, there obviously, you know, the opportunity that we could see It's linked to the situation that we had to face and that we took into consideration in a very prudent way that is the situation in Ukraine and the Russian. As I explained, we took the measure to erase basically our expectation in terms of revenues and profit in the region. We indeed see that the start of these two months that had a very strong comparison with last year because we were plus 60% has been very good. Also, we see that the elasticity of the demand created by our investment on the campaign and the ambassador campaign that we are doing is very promising. So these are all elements that have been taken into consideration, but we have also to see a bit what will be the development then in the next month. For what is concerning the sensitivity and elasticity of the demand to the prices, our decision, similar to what we did last year, has been to cover fully the input cost with the pricing strategy and the mix. This is important to mention. We've been very successful last year where we also, through some efficiency, were able to more than offset the cost increase. We will go in with the same approach of this year and obviously always very carefully looking at the positioning of our in our portfolio, in our core and so on to continue to grow and to continue to maintain and grow the market share in the core area for our products.

If I may, a quick follow-up on this in terms of pricing and pricing environment with your competitors. Are you seeing some pressure from competition in specific areas?

Now, we see an environment where, you know, everyone is increasing prices. We see an environment where everybody has to face high input costs. And we believe that, you know, the action that we have been taking will continue to allow us to be in position in the market.

Thank you.

As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Fraser Donlon with Barenburg.

Please go ahead.

Hi there, Maximo. That's Fraser here from Barenburg. Thanks for the presentation. Just two questions from my side. One has kind of already been covered a little bit, but I just wondered if you could color a little kind of the indirect impacts of the Russia-Ukraine crisis on the longer things that you would be monitoring. Is it kind of like aluminium price? Could there be an impact there? Or are you kind of not so worried at this point? And then the second question is more of a kind of longer or midterm one. in terms of new product development, which are the kind of big categories which you're looking to develop in the next years. Obviously, coffee has been a great beneficiary of the pandemic, but I guess there could be other areas in, like, home care, like cordless vacuums or robot vacuums, air purifiers. Like, maybe you could just kind of bring to life a little bit what you're planning to do there, if anything. That's all from my side. Thanks very much.

Thank you, Fraser, for the question. On the indirect impact, I have to say that it's too early to comment. What we are seeing, as I mentioned before, that we see our plan continuing in all the markets. We see all the activation that we have been doing that is taking place as normal. On that side, I think we will have eventually to elaborate after we will see Obviously, we all look, we all do our different scenarios, but this is really too early to comment. We don't have any specific impact to make. In the medium term, as you know, De'Longhi always in the past and the history has been very active on exploring new opportunity. We have a very strong innovation team in our innovation center. We are considering obviously always different option but I would like to mention that we will see big opportunity to continue to grow for the reason that I mentioned below in the coffee area that is far from being still exploited. We still have a lot of plants. We still have launches. We still have a lot of innovation that is coming in and innovation that are specifically dedicated to the new geographies that we are targeting, as I mentioned before, Asia and the U.S. in particular. At the same time, we see a big potential growth coming from Eversys that I was mentioning is performing very strongly. They record all the books for Eversys and for this year. And also there we see innovation. We see the introduction of telematics in the machine. to make it more interactive, to make it more controllable. So coffee is a big area where the group has a very strong leadership, a very strong know-how, and where we still see a lot of opportunity to grow. I mentioned before that we gained 2% market share in the growing market last year in the fully automated machine. We have seen a strong growth in the first two months of this year. with a strong sell-out also from the data that we are receiving. So I think it's very important that we remain very focused on that. We will continue to remain very focused on the other core category for us, that is the food category.

Perfect. Thank you.

Mr. Garavaglia, there are no more questions registered at this time.

Thank you all. Thank you very much. And, yeah, to the next one, to the next call. Thank you again.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.