Avolta AG (AVOL) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Dufry's Q3 Results 2023 Conference Call and Live Webcast. I am Elli, the chorus call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Xavier Rosen, CEO of Dufry. Please go ahead, sir.

Thank you very much for the introduction. Good morning, good afternoon, everybody, and thank you for your interest in Dufry soon to become Avolta. We are presenting today the first 9 months results; I'll go straight away with the presentation in Slide 4 with some of the key highlights. Dufry has a clear strategy, Destination 2027. That is going to provide both growth and resilience on the profitability of the company. This quarter and the first 9 months of the year confirm once more, these positive effects of the strategy. We had a strong organic growth of 16% in the quarter, no slowdown, neither versus the first quarter, the first half of the year and the remaining of the year. Comparables are more difficult, but still very strong growth and also strong growth on the profitability and the equity free cash flow. The quarter 4 of this year started with similar growth that we have seen in August and September. And all our intelligence points out that will remain similar levels for the remaining of the year. That's why we have updated once more our full year outlook, both in revenues and profitability. Part of it is also thanks to another successful step on the integration between Dufry and Autogrill. We are now more diversified and resilient. That's a key idea we will repeat in today's presentation. Geopolitics remains challenging. Economic cycles change from one area of the world to another, but the demand remains strong because we have the widest portfolio that any other, than any other company in our industry. We are also progressing well on the generation of synergies. We confirm once more, we will get the 85 million savings on cost, full effect 2024 and already CHF 30 million this year. And we expect tomorrow the general assembly to approve the change of the name from Dufry to Avolta. As a result of this clear strategy that delivers both growth and resilient cash flow generation, we published today the capital allocation policy of the group. We will combine at the same time, growth, deleveraging and return to shareholders. Our debt is 1.5 to 2x net debt to EBITDA. From time to time, could be a little bit higher than that, up to 2.5x after big business development or some bolt-on acquisitions with the target to go back to the expected 1.5 to 2x as soon as possible. On the yearly cash flow, 2/3 will go to growth and deleveraging and 1/3 to dividend to shareholders. Starting already in 2023 financial statements, the Board of Directors will propose in the next ordinary general assembly to distribute a dividend of CHF 70 per share already, as I said, based on 2023 numbers. Let me now have one slide on the industry and how resilient this industry has proven over the last 4 decades. Passenger growth, airport passenger growth is in the range, 4%, 5%, 6% with a CAGR of 10%, for example, between 2006 and 2019 and is expected to grow ahead of 4% per year. And this is the basis of our business. That means that in 15 years, a number of global passengers will easily double. And that will happen across the different regions. We have a graphic here on the growth per region, but this is origin and destination. Of course, or is in China or is in APAC, it could be also destination Europe. And that's why we believe that being as diversified geographically as possible in the segment of travel, it's a key element to cope better and better and benefit, better and better from this growth of passengers. Also, history proves that, the expenditure when people travel is less affected by economical cycles than the highest street consumption. And the reason is because when people travel consumes because they need something that could be food or beverage, it could be because they are buying a gift or something to remember. When people travel either by business or leisure, their mindset is different from the one they have when they are shopping in downtown. So both passenger growth and consumption are more resilient than the general economic frame. Going to Page 6. Also after the merger, and I think sometimes it's underappreciated how diversified in the travel experience world, but how diversified we are after the merger between Dufry and Autogrill. Geographically, 75 countries in 1,200 locations and 5,500 points of sale, but also on business segment, which is important both on the growth and the resilience. Now we can offer passengers, duty-free, duty-paid and F&B. Different nationalities, different destinations, my want one thing or the other. Now we are able to adapt our offering to the changing of the trends. Also makes us less affected by geopolitical crisis that are geographically limited. The change rate changes that might change the capacity of people to travel. All these effects are less thanks to our wide portfolio. I'm not saying we are immune to everything that happens in the world, but we are less affected than the general consumption. On this basis, we have a very clear strategy that explain every quarter, but I think it's important to remind it. It's absolute travel centricity based on our point of sales, restaurants or shops and it's based on an increased digitalization and an increased digital engagement with these passengers. This has changed completely the way we address business and is changing the way we are addressing the future business. Very clear geographical strategy, reinforcing the key markets we have in North and Latin America, in EMEA and growing more and more in Asia Pacific where we have the lowest market share. We always said this is a process double day a few years, but we already have some early indications that is also moving ahead. Operational improvement culture. Once more in this quarter, in the first 9 months, we have shown that we are really delivering operational improvements. Part of them because of the synergies that we have started seeing in our P&L and part of it on this culture of always trying to do the cost basis a little bit more optimal than before. Last but not least, we are trying to make ESG tangible for our communities and our people. All that is with one target, increase shareholders' value, increasing the top line growth and make it more resilient, improving the profitability and the cash flow, not only the operational improvement, but also on a very active portfolio management. We said very clearly that if we need to exit a contract, even if it might have a negative effect on the change of scope on turnover, if it's going to deliver better profitability and cash flow, we are going to do it because we are here not to sell more for the sake of selling more, we are here to generate profitable growth. With the cash flow generation, the liquidity we have and our focus on the deleveraging, we will keep strengthening our balance sheet and liquidity. It will explain that in more detail. If we go now to Page 8, but the strong numbers, CHF 9.4 billion sales on the first 9 months, an organic growth close to 25%, as I said, in the quarter, 16%, but is not a slowdown. Let's remember that in 2022, the first half was still easy comparable because the traffic had not come back. EBITDA close to CHF 900 million with 9.5% EBITDA margin, 11% in the quarter, again, very strong and an equity free cash flow of CHF 305 million for the first 9 months of the year. Thanks to this performance, we are updating our expectations for the full year and if is going to explain that a little bit later. If we go now Page 9, by regions, very strong performance across all 4 regions. In Europe, Middle East and Africa, leisure destinations had an extraordinary summer. And also, those locations in the north of Europe, U.K. that depend more on Asian traffic that have been lagging behind the rest are also catching up nicely, still not at the level we would like, but catching up nicely. Several business development opportunities. You have some of the key names there, but also several examples on the new way we think commercially from concepts that don't go on traditional categories, but product pricing like the outperformer already some combined F&B and retail concepts like the one I had the pleasure to visit the day before yesterday in Malpensa, Milan, Hudson Cafe, powered by Baci, one of the most well-known chocolates in Italy. And also new stores with a new generation of retail in Orlando and in several other locations. North America, again, very strong performance, very strong performance in passengers and spend per head in domestic, both in convenience and F&B. We know that the only thing that is lagging behind is duty-free and duty-free because some of our key duty-free locations in Canada are based in Chinese passengers that are still not coming back. But overall, very strong performance. And as you can see, increasing number of renewals and new business development opportunities, some of them already with the initial discussions on combined concepts of F&B and retail. Latin America, another extraordinary quarter, Argentina, Mexico, the Caribbean, great performance. Brazil recovering fast. You know Brazil has been one of the countries behind the curve. Argentina, of course, we are vigilant to the political situation. There are elections and the macroeconomic environment there remains challenging. Next year could be a difficult year. But what is important, thanks to our, the size of our concession portfolio and the size of our geographical portfolio, we do not expect anything happening in Argentina to have a material effect on the overall portfolio even if the performance of the country could be lower than this year. Again, a significant number of business development opportunities across the region. Last but not least, Asia Pacific, of course, the fastest-growing performance, comparables in '22 were easier, still less Chinese passengers than in 2019. But what is interesting is that some other nationalities in some other business so catching up very nicely. And on business development, we have made some announcements, but more to come. We always said that the growth in Asia will be a 3 to 5 years' plan, but the level of opportunities that we start seeing is very encouraging to support our long-term strategy. Operations performed well. Business development performs well, but also we are advancing a lot on the travel experience revolution. As we said in the past, our stores, shops or restaurants have to have 5 key characteristics. We are investing time and money on becoming in hybrid concepts, seeing the opportunities of combining F&B and retail that could be in a physical store, it could be on a master concession running all the commercial space of an airport or it could be with doing cross business from one to the other, from cross promotion from sending one consumer to the other from sharing from one to the other. Second is smart, and we have deployed already camera analytics, physical solutions and fringes solutions in many stores. You have some examples at the boat. Fine stores, probably there is a better way to say it, but I like fine stores. The stores we have, have to include entertainment. Our conversion rate in the industry is around 20%. So it means there is 80% of the people who don't find a reason to step into our top stores and restaurants. Making them more entertain, gaming, collectibles show life shows in the store, it's a way to drive more footfall inside the space. Flexible, very important because travelers are very resilient, but the change in nature. They change nationalities they travel, they change the profile. We are investing a lot of efforts on making more flexible concepts that we can adapt to the new profile of consumers when it's needed. And more local, sense of place is becoming both for airports and other travel destination and passengers more and more important. These 5 things that we are deploying across the portfolio. We have a few examples. We know that actually drives better footfall, better conversion, better spend per year, and now we are in the process of scaling up these examples across the portfolio. It will take some time because, in some cases, is making investment is making agreements with the airport. But we are convinced that doing this makes us different. And making us different makes us more attractive consumer and makes us more attractive for business development because the landlords will see that dealing with Dufry soon to be named Avolta, it's dealing with somebody that offers difference. On integration, also, as I mentioned briefly before, on plan or ahead of plan. The new combined management team is delivering on the CHF 85 million synergies, full year full effect already in CHF 24 million, CHF 30 million this year. You're going to see them, you are seeing them on the profitability. You're going to see them on the profitability. CHF 50 million restructuring costs, CHF 25 million this year, CHF 25 million in '24, and we will officially close the integration process at the end of this year. As I said, not only on the P&L and the cost synergies, but thanks to the combination of the 2 teams, we are exploring more and more opportunities that were not available to us before because we didn't have the 2 business together. It could be master concessions like the one we signed in Hubei Airport in Wuhan. It could be combining the existing business doing cross promotion and benefiting both business together, like we can do now in Bangalore, Chicago, Bale, Vancouver, I could name another 50 or 60 locations where we have the opportunities to do that. And last but not least, after the approval of the shareholders tomorrow, we are going to use Avolta as the new corporate name. And I think it's a small change, but an important change because we won the airports, the landlords to understand that we are not just Dufry and just Dufry. We are more than that because of this new strategy, this new consumer centricity, this new digital. But we want the equity markets to also understand that Avolta is more than the sum of the parts that we have the strength of the 2 companies, the knowledge of the 2 companies, but we have a new way to deploy those strengths in a unique way that nobody has ever done before. And you can see quarter after quarter that are yielding both on profitability and growth ahead of expectations. Last point, destination 2027, very clear, which delivers growth and resilient profitability. And as a consequence of that, we have agreed with the Board of Directors on a very clear capital allocation policy. 2/3 of the equity free cash flow will go to deleveraging and growth. Leverage target 1.5 to 2x net debt to EBITDA going up to 2.5 after major business development or bolt-on M&A. Again, we are not planning any big consolidation. We are talking about easy to integrate 1 country, 2 countries, small companies that could help to growth on key geographies. Deleverage and growth and 1/3 of the equity free cash flow every year will go to direct return to shareholders on the shape of EBITDA. For the first year, 20 to be paid in '24, the initial dividend is CHF 70 per share. That's what the Board of Directors will propose to the general CHF 0.70. With that, I hand over to, if for more detail on the financial statement. Thank you.

Thank you very much, Xavier, and good afternoon to everybody on the line. As mentioned Xavi, resilience and growth is one of the key themes we want to and pass over today. This is also clearly visible when we look at our P&L and also about our cash flow statement, looking at the revenues, the profitability and also the cash flow. We have a highly flexible cost structure, and it's especially relevant when you look at the first 2 lines, cost of goods tolls on one hand side and also the concession fees, which amounts for the 2 most relevant lines of our cost structure. Both of them are fully variable. They are fully depending on the revenues. We have a similar setup when you look on the other side around about our cash flow statement. The cash conversion benefits from Dufry's asset-light business model and the variable cash flow structure on most of them. Our interest costs are largely fixed. On the other hand, we consider this as an advantage as we benefit from attractive rates, which are mostly fixed in nature, we depend to more than 80% on bonds, which have a fixed rate coupon, which basically means we are protected against any fluctuations of interest rates. Moving on to the next slide, Slide #16. the diversification of our portfolio. Xavi has mentioned it, but just a couple of comments from my side as well. We have a very well-diversified portfolio. Looking at the geographical mix, around half of the revenues is coming from EMEA, with North America contributing to 31%, LatAm 12% and APAC, 4%. This is for the 9 months this year with Autogrill contributing 8 months. We have closed a transaction in February [ and Dufry 9 ]. Looking at the business lines, the different business lines, duty-free, duty paid, our convenience and food and beverage contribute evenly to the revenues. On the top right, airport remains the biggest channel with around 80% of revenues of net sales, followed by motorways, railway stations and border shops as well as cruise lines, ferries and some other channels. As per product categories, performance and cosmetics, confectionery and Food and Beverage remain the most relevant contributors. To summarize that, our diversified approach on channels, business lines, geographies and product categories, which significantly add to our group resilience while driving growth at the same time as it allows us to adapt fast to any evolution in demand by our customers at any moment in time. Moving on to the next slide, Slide #17. The 9 months turnover of the combined group amounted to CHF 9.383 billion. Please consider that this includes 9 months letter Dufry as well as 8 months of Autogrill. We consolidated Autogrill as of February this year. The third quarter came in at CHF 3.668 billion. Organic growth versus the same period in 2022 was for September year-to-date and a strong plus 16% for Q3 against the comparison. What is important to remember, many restrictions were lifted at the beginning of Q2 2022, and we have seen an increase in capacities and prolonged summer since Q3 as well as Q4 2022. Xavi, has mentioned that already earlier. Related to the revaluation of main currencies against Swiss francs, our reporting currency, we had a translation effect on turnover of around 5% to 7% for the first 9 months and Q3, respectively. We expect a similar effect for the full year. This is purely translation, not affecting EBITDA margin or cash flow conversion. Core EBITDA for the 9 months period came in at CHF 893.5 million or 9.5% over turnover. The strong result is supported by our operational performance on one hand side, productivity increases and also the synergies we have already generated this year. On the other hand, equity free cash flow came in at CHF 305 million. There are no surprises on the cash flow statement, so there is a clear number in that sense. For Q4 this year, in line with the usual seasonality, we do expect to see a slightly negative equity free cash flow for the quarter. Again, and that's important. This is the usual seasonality, so nothing new in that regard. Moving on to Slide #18. The group shows a significant deleveraging over the last quarter, reaching now 2.57x EBITDA over net debt. This is supported by the combination of Autogrill and the financial structure for the combination on one hand side. On the other side, I'm also supported by the good operational performance for the combined group. As mentioned by Xavi, we are targeting a level of 1.5 to 2x net debt to EBITDA. We have a well-balanced maturity profile with no refinancing risk. The next upcoming maturity would be the CHF 800 million bond in 2024, which, by the way, has a coupon of only 2.5%. Given the strong liquidity position of close to CHF 3 billion, there is no immediate refinancing requirement of that bond. And also, this is supported by the rating agencies. The active interest profile is appreciated, and we will look into a refinancing at the appropriate moment in time next year. The company has a well-structured debt profile, also in that regard to product mix and exposure to fluctuation of interest rates. I've mentioned it before, around 82% debt is linked to bonds with a fixed rate coupon. So there is no relevant exposure to changes in interest rates. Moving on to Slide #19 and my last slide. Should the current performance continues through the last quarter. We project the full year 2023 organic growth of around 20% versus the previous year. This refers to a turnover for the pro forma combined business, which stood last year at CHF 10.805 billion 2022, considering 12 months for Dufry and 11 months for Autogrill. I think this is important. As mentioned earlier, we have a purely translational effect on our growth related to the devaluation of some of the relevant currencies, including euro, U.S. dollars and sterling against our reporting currency Swiss francs, which stood at the area of 5% to 7% for the 9 months. Based on this, we expect our reported growth for the full year to be around 15% versus the previous year for the reported pro forma business. It is important to emphasize, again, that this translation effect does not impact EBITDA margin nor cash flow conversion. We expect a further improvement in the margin related to our performance of 8.5% to 8.7% for the full year 2023, while equity free cash flow should come in around CHF 270 million to CHF 290 million for the year. We provide this upgrade in our exchange.

Thanks to this consumer focus, enhancing profitability, thanks to these cost discipline, this operational improvement culture and the synergies. But at the same time, a profitable growth, resilience on that growth, thanks to the size and diversification of our portfolio in geographies, in point value creation. And quarter 3 '23 and the first 9 months of the year, if we go to Slide 22, confirm once again, everything I just said. The strong organic during the year, but also in the quarter and continuing quarter 4, expansion of the margins, expansion of the equity free cash flow, updated forecast for partners, landlords, our brand partners. We can only do what we are doing, thanks to all of us working on the new strategy. Big thanks to the Board of Directors and the key shareholders that are really supporting very strongly and guide very strongly to this new strategy and very special thanks to my colleagues of the GC and every single team member of Dufry, Autogrill and Avolta. If we are here, it's only thanks to your daily effort, and I highly appreciate that, and I want to say it public. Now a short video to make sure that everybody gets into the Q&A properly excited. We will be back in less than a minute. Thank you. [Presentation]

Thank you for your questions. Look, if you look at the expectations for the full year, you will see that what we are saying is to keep last quarter to what we have 14%, 15%, 16% organic. Of course, nobody can fully anticipate what will be the translation effect that unclear. But the organic growth that is the important one for us, it should remain similar to what we have seen in the quarter versus ‘22 and similar probably to 2019. Also, the seasonality 4 years later, I mean, it's a long time, but I will focus on the growth versus prior year. [ Stellate ] look, as you very well pointed out, they are one brand on one category on one segment of business. So we have many more. The beauty of Dufry, Avolta is that we can adapt the offering to whatever the public wants. We can change the brands. We can change even on the brands, the product. We can change the categories. There are places in the world that were very strong in one category and the consumer has changed and now it's another category. There are some very big nationalities that might want to consume more F&B than retail. We can adapt. So we are not seeing the slowdown you are mentioning. But we don't disclose sales by brand. So we could be seeing one brand, and I'm not saying that's the case, going down, but more than compensated by another brand or even another category. And that's why it's more difficult to, no, it's not easy to see the consequences of one run in our portfolio because we have many other things to sell. The cash flow conversion, look, we said what we said for the full year 2023, we will keep working on the same philosophy. We need to grow more than the passengers, and we need to keep expanding our profitability year-on-year. We are not going to give at this stage specific percentages, but 24 and 25 should be better we should have organic growth, and it should be better in margins than what we have this year, both in EBITDA and in cash flow conversion. Thank you.

The next question comes from the line of Manjari Dhar with RBC.

It's Manjari Dhar. I just have 2, if I may. The first is on sort of spending demographics and maybe which nationalities you're seeing spending the most in travel, given we haven't really seen the Chinese or the Russian spend has come back in to 2019 levels? And then secondly, on the new store concepts. I was just wondering if you had any learnings to share from the new concepts that you've opened this year and anything you're sort of looking to ramp up the rollout of.

One of our many but one of our key competitive advantages is precisely that we are in many more places than anybody else, and we have more information about passengers and passenger profile than anybody else. Being a public company, we typically speak a lot, and we realize over time, the competition picks up. So we know perfectly well. And you're pointing out something very important. In Europe, for example, that we've been 7, 8 months ahead of 2019 numbers without some of the higher expenditures, which shows that we've been able to replace those high expenditures by other type of nationalities, adapting our offering. And it's not only how much it spend also is relevant the duration of the flight. Also it's relevant if that airport is a transit airport, it's not a transit airport. It's also important if they have more or less time if it's domestic or international. So all these, the age group is also relevant. So there are so many variables that is really complicated. But the reality is today, we are where we are because even if in some geographies, we've been missing, the higher, traditional highest expenditure, we have been able to replace those by other people. And I think that's what we bring to the table that we didn't have before the merger. On the new store concepts on the 5 key elements I explained, we have in all 5 clear examples, and we have ramp-up plan in most cases, is ahead of 100, 200 relevant stores in all of them over the next 24 months. So yes, there are clear plans to keep ramping up. But as I said, sometimes, it's something you can do by yourself, for example, put more entertainment in a store. But sometimes, if you need to touch the physical store, you need the permits of the airports, sometimes you permits it's not something you can do overnight. But the direction is very clear. And we have examples that confirms the direction we took when we defined a new strategy with this consumer centricity is absolutely the way to go. Thank you.

The next question comes from the line of Jörn Iffert with UBS.

If it's okay, I would take them one by one. Maybe to start with the first question. Can you tell us what you observe regarding the consumer behavior in your shops? Do you still see some trading up? And do you see maybe also better momentum in Food & Beverage versus basic retail? And also if the consumer, for example, is going for the same products can also buy on the high street or it's more going for products which are unique in zero retail and shops? So maybe just some interest here would be highly appreciated.

It's difficult because I need to say yes and no to all the questions you've asked. So in some cases, we see trade up in some categories, and we already discussed that, perfumes, wine and spirits, there is a clear segment of the population that is going to a trade up. We can see the perfumes typically price at $100. It could go now on a new segment ahead of $300. We have the outperformer addressing that. But in other geographies, you see new population travelers that maybe want a perfume and cosmetics at 999. Of course, domestic or international is a completely different behavior. We see very strong F&B in the U.S., for example, and in other geographies. But you also see people that are more on the convenience food that you can get in a convenience store. One thing we're generally seeing is that the takeaway is something that it's maybe one, another trend we are seeing. The food sometimes is decreasing in the planes. And therefore, people is more motivated than before on buying some of those products before they fly. So. I would say we see trade up in certain categories, but we also see new consumers that benefit or that they appreciate lower pricing products. Also, we are introducing a lot of Indie brands in Perfumed Cosmetics, more makeup. So I can tell you, our commercial team and the team of the regions are making an amazing job because we need to adapt locally to the local trends. And it's a very complex topic, but it's something we have that is unique because we are the ones now having the widest portfolio of commercial concepts. Your second question, because this is now.

May I follow up on this? Xavi, if I may, regarding food and beverage and classical car retail, are there currently differences in sales momentum and margin momentum?

No. No. In relevant geographies, no. Of course, you have to do it in a comparable way. So for example, if you have a Northern European airport where Chinese are very important and Chinese are not there, F&B is more independent of the nationality. So if you have a German consumes food, but it consumes less high-end products. So you need to exclude these things. But if you exclude this exception, no, in the U.S. that is very comparable. We have a very strong in Travel Retail and very strong in travel F&B.

And second question, if I may. Let's assume we have tougher macro. Let's assume sales for Autogrill be just flat next year. With the synergies, you're creating, I mean, would you still be comfortable to extend margins a little bit and also on cash flows. Is there anything we need to consider regarding timing of CapEx, timing of concession fee payments or anything which could negatively impact the cash flows next year year-over-year if sales are just flat?

Our target is clear. We don't expect flat sales. We expect growth of sales, but even if there will be flat sales as you put, we will expand the margins. We have the synergies. The synergies will come back independently of the increase of sales or not. And we still see some room for improvement on the margins and the cash flow. And I think it was clear, we do not expect neither this year or next year, extraordinary things.

And the last, if I may, just a quick one, interesting update on the capital allocation. With the new leverage targets, I mean does it also mean and you explicitly mentioned smaller bolt-on deals. Avolta not looking anymore for larger deals. This is over now. So you want to focus on the organic business more versus M&A in the next couple of years and strategic period.

Since September ‘22, when we presented the new strategy, we were very clear, and after the merger between Dufry and Autogrill, we reinforce that message. The focus #1 was to successfully integrate the 2 businesses. Target #2 was to deliver on Destination 2027. And that includes some bolt-on, easy to integrate acquisitions, but we are not looking at any major transformational business right now. I think the focus has to be on what we have and what we can grow in a step-by-step way.

The next question comes from the line of Tatiana Velandia with Stifel.

This is actually Simon speaking for Stifel. Two questions, please. First of all, looking at next year, consensus point to revenue of around 13.6 billion, so basically in line with the 2019 pro forma revenue. Are you comfortable with where consensus is? And any reason that you could not achieve a better equity free cash flow than in the '19 based on similar revenue given synergies, portfolio management and so on? And secondly, can you just give us your exposure to the wider Middle East region? And do you see any impact from the conflict at this stage?

You want to take the first one?

Sure. So look on the first one on the consensus. As Xavier has mentioned before, it's a little bit too early to talk about 2024. We have provided a very clear outlook and actually increased it on revenues, EBITDA and also cash flow for this year. In regard to next year, it's a little bit too early. Having said that, look, overall, with the consensus, we do feel comfortable based on where we stand today and what we see. So there is nothing specific to be mentioned there in that regard. In regard to the cash flow, look, we have answered that question before. Xavier, was very explicit on that. We have provided an outlook for this year. We feel comfortable with the CHF 270 million to CHF 290 million for this year. Next year, we do expect to see a growth, but it's too early to quantify that or to mention specifics in that regard.