Ermenegildo Zegna NV (ZGN) 2024 Q1 法說會逐字稿

Hello, all, and welcome to Ermenegildo Zegna Group's first quarter 2024 revenue. My name is Lydia, and I'll be your operator today. (Operator Instructions)

I'll now hand you over to Paola Durante, Chief of External Relations to begin.

Thank you and good afternoon. Good morning to everyone. Thank you for being here with us for this -- Ermenegildo Zegna Group first quarter 2024 revenues conference call. All the materials for today's presentation is on our website and you should also have received it.

Just let me introduce the management. Today on the call, we have our Group CEO, Mr. Gildo Zegna; and our Group COO and CFO, Gianluca Tagliabue.

Before we begin, as usual, I need to point out that we will make certain forward-looking statements during the call. Our actual results may be materially different from those expressed or implied by these forward-looking statements, which are also subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statement cautionary statement included in today's presentation.

After this boring part, I leave the floor to our Chairman and CEO, Mr. Gildo Zegna.

Hello everybody. Good morning and good afternoon. Thank you for joining to the conference call on the first quarter 2024 revenue results for the Ermenegildo Zegna.

A few weeks ago, as you recall, we shared how the group is continuing to develop our three brands for the long-term. And how we are tackling, what we believe our short-term challenges in the luxury sector.

You will see today that our Q1 revenue came in line with what we had anticipated. But let me give you an overview of our performance this quarter. Then Gianluca will go through the numbers in detail.

I want to underscore that our Q1 results, led me reassured. The Zegna brand continues to show its strength with a solid 7% organic growth this quarter and double digit organic growth in most markets, including the US and EMEA, where the brand is delivering outstanding results.

I'm also confident on the strength of our other two great brands. One, Tom Ford Fashion is only beginning its journey with a group and some key projects will be announced in the coming months. Thom Browne is opening an important new chapter, which I want to provide some color on.

Thom Browne has been a critical factor of our success, since it became part of our group, delivering sounds double-digit growth every year, tripling in revenues. Its superior performance has been fueled by the capacity of the brand to closely engage with this community and capture certain sectors, trends, especially in Asia. In the recent months, we have made the difficult decision to reduce Thom Browne exposure to the wholesale channel. We took direct control, the brands' operations for the year where the brand has a strong recommendation and just performing ahead of the sector.

In China, we have reinforced our regional management team. We've also worked on the collection themselves to protect the exclusivity of the highly recognizable products. All these returned enhanced Thom Browne long-term value. While it will take some time to reap the rewards of the decision, our indicators already confirm that the brand is strong and that our action will make it even stronger.

Some of the evidence we have of that includes the success of the Saks activation for top client in the US, largely focused on women ready-to-wear, proving that would respond to this category, and on accessories.

The strong response that we achieved on the Frette partnership, which we just launched it an exhibition during the Salone Del Mobile in Milan. The endless success of Thom Browne Fashion Shows and the many friends of the brand will continue to be attracted to it, search for it, and proudly wear it constantly proving their loyalty. And last but not least, the brand's continued success in the very important Japanese market.

Let me also say a few words specifically on China, in general and for the Zegna brand, in particular. The Chinese market is currently experiencing a normalization phase post-COVID, which is good news. For Zegna, the China market was the last to launch one brand strategy. It is also where the entry to luxury offer was higher than other regions. We're still working on brand awareness, client experience in store, and merchandising. But even more we are working on creating brand experiences.

At the end of May, we had an important private event in Shanghai, the first ever client-focus event organized in China. It is by invitation-only and reserved for our very important client, customer, and the prospects. Alessandro Sartori, Executive Director; Leo Wu, the Brand Ambassador; and my two Tucson (technical difficulty). It will be an immersive experience Zegna world. The brands, the legacy, essence, and authenticity.

And we just did in Milan, we bring Oasi Zegna and we also will bring the Oasi Lino Aussie Lima project to Shanghai. We know that what Zegna started with a one brand strategy is a journey, which I like to think of like building a house. It's brand house with strong foundations, now we need to build the floors. We know this will take time, but we also know that Zegna houses was built on unique foundations that can't be replicated by anyone else. And it is a brand's unique legacy that will continue to foster for success in China and around the world.

Earlier I mentioned Oasi Zegna Milano. Let me use the last few minutes to explain what we'll be doing in Salone Del Mobile, something I'm really extremely proud. The launch of Oasi Zegna Milano.

During our last call, I mentioned that we were going to take over the City of Milan during the design week with the launch of Oasi Zegna Milano. The donation of the flower beds to our home city, and immersive experience at our headquarter open to the public for one week to launch the Born in Oasi book.

This has been an unique opportunity to increase the knowledge of the Oasi Zegna and boost the desirability of the brand. Well, when I told you, we are going to take over the city, I personally was not expecting such an incredible outcome. More than 26,000 people visited the installation in six days.

We also organize special dinners for our friends' circle with the lighting moments for our top customers. Record revenue ever between our Milano stores led by the Monte Napoleone shop. We created also three totes bags, based on the graphics of the book that were given to visit our location of the city and terminated within 50 minutes every day. And we had queues of people waiting to receive one.

The totes quickly became a must-have of the Salone, especially among Generation X and Generation Y attendees. Some 500 articles worldwide covering the event. And last but not least, Zegna also won the Fuorisalone Award of Sustainability.

We noticed that we accomplished all these without talking about product. This was all through providing unique experiences and through living out our values and our legacy. In one word through our authenticity and creating a dream around our brand.

As you recall, giving back has always been a part of Zegna. It is part of our history and embedded in our DNA. This is what the founder taught me and lead by example that we must support and give back to our communities, our cities, and to the planet, and to our home.

I think that we have to give a big hug with the team because of these great accomplishments. And I know this is another step, an important one in building an even stronger brand in the direction we have been pursuing since the launch of the One Brand strategy to make Zegna the best brand menswear timeless luxury.

As I said we just one step, others will follow. After Milano, Shanghai will be the second city where we will bring Oasi Zegna. And you will need to wait to find out the third, which is already planned. And I promise you it will be worth the wait.

Thank you for your attention. And let me now turn to Gianluca to go into the financials in details.

Thank you, Gildo. Good afternoon everybody. Let's move to page 9 of the presentation where you find our consolidated revenues for the quarter and the by segment information.

First of all, let me make a general comment. As you know, Q1 consolidated revenues include Tom Ford Fashion business, which was integrated in the Group since April 29, '23 and includes also the consolidation and acquisition of the South Korean business for Thom Browne on July 1 last year and for Zegna, the Korean business on January 1 this year.

Pursuant to which the Group started to directly operate the business for Thom Browne and for Zegna in that market. Therefore, when we refer to organic revenue growth, we neutralize from the Group perimeter, the effect from TOM FORD FASHION addition and the Korean related changes in scope, and we apply also the constant currency approach.

In line with Q1 outlook provided during the last conference call on April 5, in the first quarter of this year, group revenues reached EUR463 million, up 8% year-over-year 11% when we exclude the 3-percentage-point of negative currency headwind. On an organic basis, revenues were down 5%.

Zegna segment recorded positive growth, plus-2% on a reported basis and plus-4% on an organic basis, notwithstanding the textile product line, which records the flattish performance.

Currencies have been an headwind in the quarter for the group and also for the Zegna segment, mainly related to renminbi and to a lesser extent to the yen and to the US dollar depreciation compared to one year ago.

As anticipated in the quarter, Thom Browne segment revenues declined 30% reported and 35% on an organic basis. I will comment in details later on this performance. Let me only anticipate that the decline has been driven not only by a demanding days of comparison looking at Q1 of last year, namely in wholesale, but also by the decision to streamline the Thom Browne wholesale channel and by some sectors challenges in the Chinese market.

Tom Ford Fashion segment record that EUR65 million in revenue. Given that Q1 of last year, Tom Ford Fashion was not part of the group, we do not have a base of comparison, I will provide some more colors on Tom Ford Fashion later in the presentation. Here I can just add that the performance has been in line with our expectations. The brand CEO and his team are working to set the basis for the future development of the brand.

Moving now to page 10 of the presentation, we can look at the revenues by brand. In Q1 of this year, Zegna brand recorded a solid plus-7% organic growth. The product categories that contributed the most of this performance are, of course, our Triple Stitch Shoe family, which continued to deliver some double-digit growth also thanks to the success of the SECONDSKIN drop.

But also there was a positive trend on luxury leisurewear and our proprietary made-to-measure business. As we already commented Thom Browne brand performance as much as for the segment declined for our decision to reduce the wholesale business and also as a consequence of lower than expected VPC results, in particular in Greater China region.

In this performance, there is centrally the decision to protect the Thom Browne key branded products and their desirability by limiting their exposure in particularly online. Looking at Tom Ford Fashion, let me make a quick comment on the new collections designed by Peter Hawkings, which has been introduced in stores from February with good sales performance. Of course it is still early, but I would say that the initial signs are positive.

A quick word on textile. The flattish, which is minus-one organic performance of this product line reflects the cautious outlook that we are observing in this B2B sector with many companies being cautious on their raw material orders. Under the other revenue line, we now include mainly the revenues that we generate with third-party brands.

This line of business can now be considered marginal since with the acquisition of 100% of Tom Ford International, we integrated the Tom Ford Fashion business within the Group, while before it was accounted within the third-party brand revenues. This explains the substantial decline reported given the change in scope.

Moving now to revenues by distribution channel at page 11. I would limit the comments here because we will then analyze this performance by channel, specifically for each brand, which I believe will provide you more insight. Still a couple of quick comments.

DTC channel grew 20% year-over-year or 3% organic, driving the Group performance, thanks to Zegna brand positive contribution and thanks to the integration of Tom Ford DTC channel. In the quarter, DTC accounted for 71% of Group revenues or 77% of the three brands that is excluding textile and other revenue lines that are by definition, B2B and wholesale.

The wholesale performance for the three brands, Zegna, Thom Browne, and Tom Ford Fashion was negative 12% year-over-year and 26% organic, reflecting the negative performance at Thom Browne Wholesale. And we already mentioned the acquisitions of the Korean businesses, which were converted from wholesale to retail. Of course these two effects have been partially offset by the positive contribution of Tom Ford Fashion addition.

Moving to page 12 with the split by geography. Before commenting the performance by region, let me underline that we have partially revised and I believe simplified the way we report revenues by geographical area, in line with sectors best practice. We, therefore, now report EMEA, the Americas. We continue to report revenues from the Greater China region and the rest of Asia, rest of APAC altogether.

Looking at EMEA. EMEA recorded a negative 6.5% growth organic, exclusively related to Thom Browne performance, in particular, for the wholesale channel, while Zegna was double-digit positive in both channels in the region and Middle East continued to drive the growth of the region with outstanding double-digit growth.

Moving to Americas. This region recorded a strong plus 10% growth on an organic basis and plus 58% including the Tom Ford Fashion integration. Zegna DTC revenues significantly outperformed the organic growth of the region, US, Mexico, and Brazil have been the best performer markets. US in particular, the most important market, of course of the area, reported organic growth higher than the average of the region, thanks to Zegna brand outstanding double-digit performance in US. Greater-China region revenues declined by 13% organic with Thom Browne significantly below this mark, and Zegna down single digit.

As Gildo mentioned in his introductory speech, the sector is seeing a normalization phase in GCR after the immediate post Covid bounce back, and we are seeing a more cautious consumer outlook, especially on the side of the aspirational clients. With Zegna brand, we can confirm that the high-end market is overperforming.

For instance, our SECONDSKIN drop performed extremely well in China, and the Uber Luxury Trunk Shows we are organizing are delivering above expectations result and also make to measure orders are growing nicely. So Thom Browne also is working on its top of the pyramid clientele. And more importantly, we have reinforced the management team, and I expect that some initial results should be visible towards the end of the year.

In the rest of APAC, let me underline the strong performance in Japan for all our three brands. In terms of cluster of nationality, I will anticipate a question that I know you might ask. For Zegna DTC, the US cluster keeps on growing on a solid double-digit pattern compared to last year, while the cluster of Zegna clients from Greater China is slightly negative versus Q1 of last year, even if Chinese are buying more outside China, both in Europe and even more in Japan.

But you know that for Zegna brand, in particular, the largest part of Chinese buys domestically. Therefore, the trend of revenues in GCR as a region is not that different from the trend of the cluster of Chinese residents itself. Let's now move to the brand breakdown by channel, starting at page 15 by Zegna brand.

In Q1, Zegna DTC revenues grew by 6.3% organic accounting at this point for 85% of the brand revenues, the DTC channel recorded sound double-digit organic sales growth in EMEA, in Americas, and rest of Asia Pacific, while GCR was, as I said before, mid single-digit negative.

In the quarter, the brand opened 24 net new stores from 253 at the end of last year to 277 at the end of March of this year. Within this, 24 net openings, 16 are the store converted in Korea from wholesale to retail for our shopping shop converted into concession in North America, and the remaining net four are two in travel retail, Zurich and Shanghai and the last two are openings in China, Naijing, and one in Paris, La Samaritaine.

Wholesale for Zegna brand recorded a plus 9% organic, again deducting the effect of Korea with good growth in all markets. I remember that since spring '24, we are moving the merchandising calendar of our collections towards a by-drop approach, which will influence the time of deliveries in the quarter. As anticipated, Q1 has benefited of some shift of deliveries from Q4 of last year to Q1. In any event, we anticipate that for Zegna brand, the wholesale business in the year is expected to be flattish versus 2023 in organic terms, which means, again taking aside the Korean takeover effects.

Moving to page 17, the breakdown by channel for Thom Browne. In Q1, DTC grew by 4.4%, which is a minus 14%, excluding the effect of the conversion from wholesale to retail of the Korean business. The rest of the APAC for Thom Browne outperformed, especially in Japan. Americas performed better than the average, GCR underperformed versus the average.

Commenting the wholesale performance, let me underline that it has been impacted by three main effects. Demanding base of comparison, Q1 of last year was a very important quarter of shipments. Spring '24 deliveries that have been accounted in Q4 of '23 and more importantly, by the decision to rebalance the channel. The first two factors should be less relevant in the coming quarters, in particular in Q2 and Q3, while with regard to the wholesale selection, we expect it will continue also in the next quarters. However, the magnitude of this selection should be significantly lower.

Let's now move to page 19 for a few comments on Tom Ford Fashion, which reached EUR65 million with a DTC contribution close to 70% for the brand. You know that quarterly performance cannot be considered as a proxy for a year. And the results, this is true for most of the business, and it is even true in this case for many reasons.

First of all, Tom Ford Fashion delivered some spring -- wholesale orders in April. The new collection designed by Peter Hawkings, hit the stores only March, contributing for revenues for only a few weeks. And last but not least, some important new openings are expected in the second part of the year. Therefore, to help you understand the trend of this brand, I would just add that Q1 contribution to Tom Ford Fashion yearly revenues should be assumed closer to 20% rather than 25%.

Before moving to Q&A, let me just comment on page 21 that at the end of the Group. At the quarter, the Group has 417 thus an increase of 27 net versus December, which we already commented 20 are coming from the wholesale to retail conversions of Zegna, while Tom Ford Fashion in the quarter opened three small stores.

And now I hand it over to the operator for the Q&A session.

Thank you. Operator, you can open the Q&A session.

Chris Huang, UBS.

I have three. Firstly, on current trends, can you maybe give us an early indication of how things have shaped up recently as we're three weeks into the quarter? If it's too early to comment, maybe perhaps add some sense of how March has performed relative to the overall Q1?

Secondly, on trends by consumer nationality for the Zegna DTC. I know you commented a little bit high level, but is it possible to further quantify is it fair to say that Chinese is probably down low to mid-single digit year-over-year? And how are the local European is doing for Zegna in Q1?

Last but not least, on Thom Browne. I know you commented that you're expecting some more wholesale impact for the coming quarters, but with a smaller magnitude. Can you just maybe deep dive more a little bit into what magnitude are we expecting here? Is it still going to be double-digit, high-teens? Any color on that would be super helpful.

I think there are all questions for Gianluca. Just on the first one, when you asked about the exit rate, did you ask China or in general? Sorry, I didn't get it.

If possible, in general and also in China the more color, the better.

The March exit rate at Group level was roughly in line with the quarter a trend, of course here, it makes sense. My comment is more on the exit rate of the DTC because wholesale follows its delivery schedule. So I would say that DTC is basically not different March versus the quarter.

In terms of nationality, I think you asked about China. We are closer to the mid-single digit, double digit, not double digit for Zegna. We have observed a good increase in Europe and Japan. As we have already commented in other terms anyway more than 90% of the spending of residents in Greater China fall into the stores of Greater China itself.

So we are talking about an important growth on a smaller part of the business because as we have already commented, our clients tend to appreciate more the service on a local basis, also considering operations for instance. So it's an important growth, but on that slice of the business, which is slightly less than 10%.

Europe demand is very solid. I think our growth is across all the markets, it's above the double-digit mark. So we are in Europe, Continental Europe. I think we always detached the good performance in Middle East and Dubai, but also in Continental Europe, we are seeing a very, very healthy trend. So I think that is on the Zegna side, the only point that Gildo remarked was the execution of the One Brand strategy in Greater China and where we have a positive sign of traction on the on the high end consumers and the rest of the world is performing extremely well.

We'll see them browner the next quarter.

The next quarter, we are not expecting a 50% decline, much lower, probably still in the double-digit range.

Okay. We can go with the second question.

Anthony Charchafji, BNP Paribas.

I just have three questions, please. So the first one, if you can tell us the price increases year-to-date by brand. That would be the first question.

My second question would be on Tom Ford Fashion at EUR65 million in Q1. Would you be able to say if it was up year-on-year versus the pro forma of Q1 '23? And as well I mean I understand that there might be some delay in terms of spring/summer deliveries. So maybe it can be beneficial to Q2.

And my third question would be on marketing. It's very interesting, the activation in Milan with great traction. Oasi Zegna sales are highly concentrated to a few customers. Do you think that opening the brand to a greater audience is the way to go? Or do you prefer to further increase the business with existing clients? So in a way staying very exclusive. Thank you.

The first one is for Gianluca, and then I'll leave for the third interesting one on the marketing to Gildo.

Anthony, so the price increase after fall, winter '24, we anticipated that our price increase would be on the low single-digit side. So more to offset costs rather than increasing really the price on a price strategy positioning.

So we are growing with this pattern. We have gone with this pattern on spring '24 and also for '24 is following the same logic small adjustments. So the big step up we said is already behind us. In terms of EUR64 million for Tom Ford Fashion, yes, as I said, the 20% and not 25% includes the fact that we are expecting the next quarters, Q2 to be higher than Q1 also through timing of deliveries, but also thanks to all the actions openings that we are planning to do. In terms of marketing, I think Gildo do you want to take it on the market side whether we are exclusive or not.

On marketing, I think that what we have done in Milan proves our authority and the opportunity that we have to increase the visibility for the brands. So I think we'll be acting in two avenues. On one side, increase our forte in very important clients. Today, we have 5% of the client that gives us 40% of the revenue. I think that we probably can grow slightly higher than that in the future.

By doing what we did in Milan around the world. So I think the Shanghai event, we expect quite a lot. We will have in September, another important event in New York to go in the same direction. And so that will take advantage of our personalization project that takes in consideration bespoke, take in consideration specialization, take in consideration a very high valuation that the customer can buy and they cannot find it in the store. And so, I think that this is one thing. The other side is icons. The Triple Stitch, SECONDSKIN has been the highlight of the season in terms of icons product. And I must say that an industry part of those customer knew it. So that surely will drive an additional business. And the goal is to have those customers come back to us, not only sticking and buying one product.

And I do believe that amplification we want in Milan with all these young people can drive additional customers into the store and into the online business. I must say that the e-tailer business, this season has been quite good for the Zegna brand. I'm surely all these promotions helped to go in that direction.

Oliver Chen, TD Cowen.

This is Katie on for Oliver Chen. Congratulations on the strong growth within the US. We just want to ask a quick question around that US growth and how much of that is related to strength within the DTC channel? And how would you characterize the relative health of the US consumer versus other clientele across the globe between Europe as well as China and Japan? And then the follow-up to that is really around tourism. What are your expectations for tourism this year specifically from China?

The first question is on the US market or the nationalities? It was not that clear to us.

The first question is on the US growth. And what were the key drivers for the growth in the US market?

Clearly, for Zegna.

Zegna brand. I think we are quite unique in the growth. If you see the traction, we gave last year and this year, we have proven quite different from most of other brands because we decided to focus on the high end of the market. And we decided to become more retail than wholesaler. And I think that we increased the specialization factor. We increased the service factor and we have created this incredible part of outreach phenomenon by which we can attract customer by an application that our sales associates have and they can propose a new starting direction or the new drop that we receive on merchandise on a monthly basis. So I think that it has been a mix of focus going on hand and converting more wholesale into concession.

And so I can make it the last example of the Saks Fifth Avenue store that will be converted, what, last year has proven to be extremely productive. We'll be converting one major customer in Canada, Harry Rosen several doors in the second half of the year. And this doesn't mean a drop the wholesale customer its working with them because I do believe that there is a number of good customers, a wealthy customer likes the shop at Saks and at Nordstrom.

And so we'd like to make sure that stay with us, but with a different approach, more utilizing all the strength of our brand and making sure that we can create scale in sales staff, in merchandise, in marketing and following I mean the different journey of the customer. So, I think that this has been the strength that we utilize in America, and we see that we can only go better. I probably forgot to tell you the most important thing that are branding. The fact that Zegna decided to move not away from power suit into luxury leisure wear wardrobe, which is in line with the new trend of not only of America, but top customer.

And we have done it very, very well. I think that really is worth the starter. I must say that the fact that we went IPO Wall Street surely was quite an incredible marketing tool because American like to invest in the brand they believe in and so I think that was a good support. I think these are the reason why America journey has been ahead of many other countries.

And last but not least, the team, I think that we have a super high-end retail-oriented team, very customer-centric that has been able to accelerate what we started a couple of years ago. And I think that in many successes, the team is playing an incredible part. And so when we said that we are relatively positive on the outcome of the other brands, we are taking some measures to make major changes into the retail world and to follow what they had done so well in the United States.

Just one point to be sure. So the growth in America is due to of course the conversion but there is also very positive comps. So it's not just about moving wholesale dollars into retail, but the like-for-like more of Zegna brand are a very solid team, positive.

I think it's something that was referring that when we become retailers, not only we convert, but actually, we accelerated the growth of those.

The productivity, we said the productivity, we increased 50%. And to be honest with you, there is an opportunity also to open more store. Yes. That's another. We have done some opening this year and most probably more will come next year.

And on tourism, how we see the tourism flow in the globally for (inaudible) and in general?

We are seeing Americans very present in Europe like last year, also in Q1. We are seeing Chinese very present in Japan to a lower extent, Southeast Asia, of course Hong Kong. Probably less so in Macao, probably less so than it used to be. That is the area where we are not seeing yet solid traction. We are seeing Middle Eastern, very solid in Europe.

We had a record season last summer in Europe with America and Middle East, and we do expect to have a similar traction this year in particular, because in Europe, we have several openings in some good resort areas, some resort area which we were not. And I can tell you that the few winters out there have proven to be successful. There are small stores, but the customer sees the brands and relate to that. And I think this will accelerate.

Louise Singlehurst, Goldman Sachs.

I'll stick to two please. Just in terms of the outlook, I wondered if you could just confirm, I'm obviously happy with the above 10% sales CAGR, the 20% EBIT CAGR at medium term? And if there's anything in the period that you've seen that makes you feel differently about any of the regions. Obviously we've talked about the China, US, and European cluster.

And then my second question, just given the weakness in China, which isn't a surprise given the tough comp base, but is there anything that we should be considering for the margin implications for the Zegna brand with a negative drag from China for the first half?

So yes, we are confirming the outlook for the midterm we disclosed in New York. So there are no changes in our outlook. And as it refers to China, of course being cautious, we are activating also actions to protect the bottom line on the cost side without hurting the long-term health of the brand. So for instance, the big event in Shanghai in May we keep on doing it. We are not changing totally the direction.

But there's of course some discretion OpEx that we can control are in our target in order to offset the revenue softness also working on the cost line in China.

I think that one important point is that we are managing the inventory in a careful way this year. And so probably some special attention will go to the level of inventory to make sure that we have the right things, but we don't have too much. I think that the fact that we manage -- we never talk enough about the fact that we have an integrated chain, thanks to also the Textile platform. And I think that through this integrated supply chain, we can surely do a good job to control the level of inventory. And I think that is probably the area in which we are moving a lot of potential.

As a matter of fact, we will have our headquarter team traveling to several cities in China to understand if the merchandising degree among cities has to be changed or what we can do to enhance the attraction of our brand, and in particular, to contribute to the new development of the new Zegna branding as we did in the space.

Okay, I think we are -- I don't know if there is any last question, otherwise, I think we can close the call. Operator, is there any follow-up questions?

No follow-up questions at the moment. (Operator Instructions)

In any case, I just get the opportunity to thank everybody. I'm sure that there will be a follow-up question for us. So first of all, thank you for all the questions that as usual are very, very interesting for us. We are here for any follow-up questions if you need, just call us. And we will together convene in this call for the first half of 2024 preliminary revenues on July '25. Thank you to everybody. And speak to you soon. Thank you.