B&S Group S.A. (BSGR) Earnings Call Transcript & Summary

Hello, and welcome to the B&S Half Year 2023 Results Call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Peter van Mierlo, CEO, to begin today's conference. Thank you.

Good morning to you all, and thank you for calling in to our Q2 2023 update. As said, my name is Peter van Mierlo, CEO of B&S. With me here on the call is Mark Faasse, our CFO. Looking forward to working together with you and being transparent about the course of action and achievements of our B&S Group. First of all, I'd like to take the opportunity to invite you for a meeting on November 21, 2023. In this meeting, we will present our ideas and our plans for the future of B&S. B&S has 6 segments with strong and experienced commercial leaders, all active in branded consumer goods and at the same time, operating in different commercial markets and in different market segments. The market dynamics across the segments do differ quite a bit. Within the segments and across the segments, the group is realizing synergies in purchasing and sales markets. All segments are serviced by the same service organization, realizing synergies in the back office. Today, we will take you through the highlights of our first half year results announcements. And after that, we will open the call for Q&A. So let me turn to the presentation. As said, we will present our strategy for '24-'26 on November 21. We will present the strategy per segment as well as for the holding company or the service organization. Our first thoughts are around a structure where we have -- where we will be working with independent segments and the service organization at the top. Working capital has improved, but at the same time, still needs focus. Due to the inflation, branded consumer goods markets have been difficult, which we believe will continue over the next 2 quarters. I think, we'll be thinking through a financing structure, more focused on the ability to do M&A, but also respecting the seasonal pattern of our business. As you know, Q4 is a very important quarter for the full year for our organization. And we do believe that there's room to gain from a mean and lean holding organization with priority around roles and responsibilities. And last but not least, we have strengthened our governance procedures without impacting the entrepreneurial spirit of the group centered around intuitivity increased creativity. The executive team as well as the Supervisory Board today are, except for one, all independent from the majority shareholder. The financial highlights, I would like to mention, first of all, that we crossed the EUR 1 billion mark with revenues of EUR 1.057 billion, a growth of 7.6%, mainly -- the growth mainly realized in the first quarter, as you know. While the Liquors and Food segments were down on last year, all other segments contributed to this growth and continued strong performance with Personal Care significantly outperforming last year. The impact of currencies was limited as was the impact from acquisitions. The acquisitions of the Europe Beauty Group in May last year contributed EUR 8 million to revenues over the period. The largest part of this growth, as said, was realized in Q1 while turnover growth in Q2 was limited to 0.3%, mainly as a result of the already mentioned challenging market conditions. EBITDA ended at EUR 42.2 million, up from EUR 40.6 million last year as reported or EUR 47.8 million when we normalize for provisions for doubtful debtors. Mark will give you the details later on in the presentation. Our net cash from operations improved to negative EUR 0.3 million coming from EUR 23.8 million negative last year. As you know, we are building up our working capital in this period of the year for the Q3 and Q4 periods. Let me zoom into our segments, starting with B&S Liquors. The top line in Liquors declined as a result of decreased demand in the second quarter, both in the international market as well as our wholesale markets within Europe. Consumer demand decreased on the back of inflation and combined with increased product availability resulted in decreased gross profit margins. The segment showed an EBITDA of EUR 1.3 million which includes the EUR 3.6 million in provisions for doubtful debtors, which I mentioned in the beginning. Second segment, Beauty. In Beauty, we continued our growth despite the inflation and declining consumer confidence, which we were also -- which were also notably there. Of the 9% top line growth, 5.8% of the organic, driven by our B2C markets. There are still some product scarcity in the market. Margins tightened compared to the high prices of last year, especially in the B2B market. EBITDA for the segment decreased by 15.3% to EUR 16 million. EBITDA margin being 4.6%. In Personal Care, we delivered a 33% growth, driven by the broad variety of in-stock items, including the enhanced private label assortment, enabling to meet increased demand of our customers. Margins were up mainly due to portfolio changes. EBITDA more than doubled on the back of this to EUR 21.3 million or 11.7%. In Food, revenues declined somewhat, but gross profit and EBITDA were significantly up, mainly due to the absence of the provisions we had to take last year. The decrease in turnover worsened a bit from Q1 to Q2, partly a deliberate choice to focus on margins at the expense of revenues. We saw this recovery, especially in the cruise business, post-COVID, and we're able to significantly grow our digital turnover through our platform King of Reach, which is an important value driver for this segment. In B&S Health, the market conditions improved compared to 2022, although continued shortages of supplies in the market limited growth. Turnover increased by 11%. With the travel-related vaccine business continuing to recover. Gross profit margins were stable. Last but not least, the B&S Retail segment. Although there is a further recovery of passengers since the COVID pandemic which led to 30% increase in turnover next to the newly opened stores, the passenger mix has changed across airports due to economic challenges if you compare that to pre-pandemic passenger mixes. High ticket prices and the closed aerospace above Russia led to a slowdown, the slow return of Asian passengers which, in combination with the operating expenses base led to a significant drop in our EBITDA, turning negative over the period. That concludes my comments on the 6 different segments. And I'd like to over the hand to Mark, who will give you some insights on the financial aspects, even a little bit further -- in further detail.

Yes. Good morning. So yes, I will now talk you through our financial developments. As indicated previously by Peter, our overall turnover increased by 7.6% and amounted to EUR 1.057 billion. Gross profit increased by 13.5% as a percentage on turnover. Reported gross profit was 14.9% as compared to 14.2% half year '22. The gross profit was impacted by provisions for doubtful debtors in our Liquor segment amounting to EUR 3.6 million. These relate to 3 separate cases for which the common denominator concerns the fact that deviations were made from the regular procedures and controls. [ Postponingly ], procedures and controls measures have been strengthened to mitigate these risks. 2 of the 3 cases have been provided in full and for the third case, an exposure of EUR 1.3 million remains. Please note that, as you will remember, unfortunately, also during the first half of last year, we had to take an initial provision of EUR 7.1 million of the total EUR 12.6 million provision stemming from the business partnership we ended in the Middle East. In order to better understand and follow the underlying trends, we have normalized for the impact of these provisions in the normalized columns. As such, it can be noted that the normalized gross profit margin increased from 14.9% last year to 15.3% for the first half of '23. Operating expenses increased from EUR 98 million over half year '22 to EUR 115.5 million over the first 6 months of this year. The increase occurred across all categories. We continue to grow our workforce also as a result of the acquisition of Europe Beauty Group last year, as you remember, May last year. Further, the opening of new logistics center in the U.S. and the newly opened airport shops in our retail segment. All in all, this in combination with the aforementioned inflation and the tight labor market, led to an increase of 16.7% in staff costs. During the first 6 of the -- 6 months of the year, we needed to absorb one-off advisory and review costs amounting to approximately EUR 2 million with regard to the reported governance matters. Excluding these, the other operating expenses increased by EUR 4 million or 13%. As such, we have normalized these within the operating expenses to show the underlying EBITDA trend. As indicated in the normalized column, the normalized EBITDA amounted to EUR 47.8 million as compared to the reported EBITDA of EUR 42.2 million. Depreciation of tangible fixed assets and amortization of intangible fixed assets amounted to EUR 18.1 million. The financial expenses increased by EUR 3.7 million to EUR 7 million in total as a result of the increased interest rates. This resulted in a profit before tax of EUR 17.1 million as compared to the EUR 21.5 million during the same period last year, a decrease of EUR 4.4 million. Now let me show you the elements that together led to the turnover increase for half year '23, hitting the EUR 1 billion turnover mark within the first 6 months. So the overall turnover increase, as indicated previously, 7.6%. On the turnover growth, 6.1% or EUR 59.7 million was realized organically. Growth realized over the first half of the year was mainly achieved in the first quarter, as Peter also previously indicated. While the growth rate decreased significantly over the second quarter on the back of more challenging circumstances. The [ Euro ] U.S. dollar exchange rate had a positive impact of EUR 6.7 million or contribution of 0.7%. Then zooming in some more on the turnover development of Q2, as indicated, turnover growth during the second quarter was limited when turnover increased by 0.3%. This was mainly due to the challenging market circumstances. With reference to our Q1 trading update, when we talked about inflation and corresponding impact, it will not have gone unnoticed that these factors are very persistent, impacting consumer behavior. Over the second quarter alone, FX had a negative impact of EUR 4 million or 0.8% on turnover. All in all, turnover for Q2 amounted to EUR 531.6 million. That brings me to our financial position. Solvency ratio stood at 27.1%, mainly as a result of the movement in the deferred payments for minorities. Our net debt decreased as compared to the same period last year, down from EUR 440 million to EUR 349 million as per June 30 this year. Net debt-to-EBITDA stood at 3.8 or when calculated in line with the definition of our banking covenants at 3.6, which is within our covenant of 4. Interest coverage ratio being the last 12-month earnings before interest and taxes, divided by the LTM interest expense stood at 4.3 or when calculated in line with the definition of our banking covenant, at 4.7, which is both within a covenant of a minimum of 4. Inventory rotation improved from 95 days in '22 to 87 days in '23. For the return on investment, working capital, again, it makes sense to look at our normalized return, which stands at 21% compared to the 22.8% over '22. That brings me to the net debt development. Now let me briefly elaborate on the bridge of -- for the 6 -- first 6 months of the year. Looking at year-end '22, net debt stood at EUR 335 million. Operating cash flow had a neglectable impact on debt in contradiction to prior year. Investing activities in fixed assets, mainly related to new stores in the Retail segment as well as improvement of our warehouses, increased net debt by EUR 9.1 million. Lease changes and dividend paid to minority shareholders completed the limited movement in net debt during the first half of '23. Then briefly turning back at our working capital. Inventory stood again at EUR 456 million as per June 30, with inventory in days decreasing. Trade receivables decreased from EUR 205 million to EUR 175 million, decreasing average day sales outstanding from 37 to 28 days. Altogether, working capital decreased to EUR 467.7 million. And that ends my part of the presentation, and I will now hand over back to Peter, who will take you through our outlook before we will take your questions.

Yes. So talking about our outlook. As said, we expect that consumer buying behavior will remain impacted by inflation, just as it was in the second quarter. Despite this, we will continue our top line growth by the last steep level compared to the first half year. And we do expect to be able to realize slight margin improvements. This growth will be realized organically, and we do not expect to realize any large acquisitions for the remainder of this year. To mitigate the more challenging circumstances that we are currently experiencing, we'll retain our strict cost control and aim to keep our operating expenses under control, so to say. Considering all of this, the effect of the margin and cost aspects, we expect the reported EBITDA for this year to be around 5%. And as I started this call, I'd like to mention that we intend to share our updated strategy with you on November 21. Before that, on November 6, we will publish our third quarter trading update. And with that, we conclude our presentation on the first half year 2023 results. I would like -- I would now like to open the call for questions and hand over to the operator.

[Operator Instructions] We'll now take our first question from Tijs at ING.

Yes, my one of the question is about the loss provisions, as you can imagine. Yes, earlier this year, of course, the extensive review into the business was being finished and mainly focused, of course, on the governance practices within B&S, but I assume that you also did, let's say, a full review of these kind of risks. So the question is, what is the likelihood going forward that more of these doubtful debtor contracts pop up? And are you, let's say, taking actions once it is, let's say, becoming clear that these debtors are not paying, so that you're basically waiting for the legal payment term to end? Or are you more proactively looking at more contracts within B&S in which, let's say, the risks are quite high. So if you could provide me a bit of information on how you view and deal with these contracts within B&S, it will be helpful.

Sure. So let's take that one first. So looking at the full year announcement regarding the governance review, which we applied clearly, regards other topics than the provision for doubtful debtors stand-alone. But looking at the risks which now occurred, the common denominator, as indicated for these 3 cases concerns the fact that the internal procedures have not been followed. Having said that, of course, that measures have been taken to prevent this from reoccurrence. And with regard to your question, proactive approach. Yes, we clearly always view our portfolio and review our portfolio on an ongoing basis. And once these type of risks pop up, then we will clearly directly and proactively take action and not wait until the legal last day, as you indicated in your question.

So if I understand correctly, it is, let's say, a cultural awareness in the sales force team of B&S?

I would say a little bit broader than that, but also the sales force, definitely, but the whole internal procedures need to be followed and adhered to strictly in order to prevent ourselves for these type of risks. So we have very clear policies on how to mitigate these risks. And of course, we will only be able to mitigate those risks if those type of procedures are being fully adhered to. And that's what we have implied.

Tijs, just to add on this. So the governance review was focused on the related party issues that became transparent in the beginning of this year and last year. I feel that, that is executed very well and that risk has been -- well, the risks are never eliminated as we all know in life, but are strongly mitigated through that through that review that has taken place. So that's one. Secondly, it's the -- and I'd just like to reiterate what Mark just said. It's the internal controls that are in place and the discipline internally to follow those rules. And that is something that we have definitely strength, we strengthened our internal communication around that topic. Now obviously, we're not going to say that -- we can't tell you that there will never go anything wrong anymore, that's impossible. But we are working towards risk mitigation in this record.

Yes. Okay. That is helpful. And then just to be -- from my understanding, I mean, it could be that, let's say, prior to when you were running the company, some of these uncollectible receivables are still standing out. Is that the case? Or have let's say, all these kind of sales deals from the past have now been resolved?

This is the risk we have now emerged and as you can also see from the outstanding debtor amount and the aging that most of the items from the past have now emerged.

Okay. Okay. Yes. Then another question about the Personal Care segment, quite strong improvement and not only in the top line but also in profitability. In the press release, you gave some explanation for this and a variety of in-stock items, including private labels. But could you provide us a bit more insight in how that is exactly, let's say, driving the results because it's indeed quite strong. And also if you could give us a bit of a feel for how it is going to develop in the second half, that would also be helpful.

So first of all, regarding the assortment, that's something they build on for quite some time now. So the deviation between regular assortment, private label and the private label brand has been built over the years and have increasingly come stronger. This is what you now also see in the results, having those products available as well as the product mix enhancing the realized gross profit. Having said that, looking at the sustainable growth of the segment, those building blocks, of course, are very I would say, long-lasting. So we expect that to continue in the -- at least in short term, definitely and expected also for the medium term. Does that answer your question, Tijs?

Yes, it is. So part of it is also because you addressed some issues, it's kind of a strategic change. And then a follow-up to that because you're relatively new to the company or just started the management, I assume that you then, let's say, address the low-hanging fruits, so to say, the easy things first. And do you see, let's say, additional opportunities for improvement in any of the other business segments, which you will address going forward?

Yes, that's a super good question. And we will definitely explain bits and pieces of that on November 21. In general, yes, I do believe that there is opportunity for growth as well as margin improvements, especially in the Travel Retail business, Liquor business, although that's partly also definitely market circumstances that we can't influence, obviously, that much. And I do believe that Beauty with a very nice mix of activities across the globe, working in different market segments is also an interesting segment in terms of performance into the future. Food is stabilized, is in control, the way I view it and on the back of what they currently have, growth should be possible. Health is a bit of a thinner market, I would say. And as a result, also more -- well, let me phrase this differently. There are still things to do in terms of the segment. We believe that the segment would further benefit from independency to a certain extent because these are different segments in different markets, as I said in my introduction as well as working across different segments. So still a lot to do.

Okay. That's [ posing ]. And maybe one follow-up for now. I give someone else the opportunity to ask question but I also read, I think in the Food business, that there was a recovery of the maritime market and specifically in the cruise vessels. I'm also under the impression that after it went to 0 in the pandemic, that to be a step out of this niche completely but it seems that you're back in?

Yes, definitely, definitely. Well, there was not so much to be -- I don't know whether we were completely out. But if there are no cruises, it's difficult to sell food to cruise vessels. And we're definitely back. And actually, yes, they are in a very uptick season actually.

You might indicate the Retail cruise business, Tijs. That's where we stepped out completely during the pandemic.

We'll now move on to our next question from Patrick Steven at Kepler Cheuvreux.

My name is Patrick Roquas. A couple of questions and probably best if I ask them all together, all at once. So the first one is on organic sales growth. And given the inflationary environment, is it possible to kind of roughly break down organic sales growth in volume and price. And then on the outlook, which you've guided for a reported EBITDA margin of around 5%, why are you not guiding for underlying EBITDA or, let's say, underlying absolute EBITDA number? You've kind of collected consensus but did not share it with us. So what I've seen on Bloomberg is consensus at around EUR 105 million. So how do you consider this with regard to your guidance? That's the second question. And then on Liquor, yes, I've heard your explanation but it will be helpful if you provide a bit more in background and information. So what happened? What explains the big decline in Liquor? Is it a combination of a big volume decline and pricing pressure? And then finally, on the updated strategy, which you're going to give us in November, so you highlighted a focus on operational excellence, but what's new here as I think this kind of has been and will be a key focus for element of your business?

Okay. So let's start with the first one regarding organic sales growth regarding the breakdown of volume and prices. As previously, we do not have -- and not able to share that at this stage on the volume and the price component as we haven't done in the past as well, unfortunately. Then regarding your second question regarding the outlook of the reported EBITDA margin and not sharing a turnover consensus. The consensus, of course, will be shared. We were gathering the information and completed that quite late in the process as such, could not be shared previously. But -- and based thereon, I would say that all the information would be there, but more than happy to discuss in more detail with this regard. Then the Liquor segment decline as you state, what we try to indicate is the 2 market circumstances, which we see there is, first and foremost, the decline in consumer demand, decreasing the demand for the products we have, combined with the fact that there's more product availability as compared to previous periods. So those 2 factors combined also provide the margin pressure, which is notable in the segment. With regard to the updated strategy, the fact that operational excellence is being indicated, of course, is one of the components which we will highlight, but of course, a very much broader review will be performed and shared with yourselves, I'm sure of that. Peter, do you have anything to add on this one?

Well, if we would already know what we wanted to say on November 21, then we would have already told you today. So that's the way life -- but just to give you a little bit of insight, we shouldn't be too difficult. So this is my 91st day, I believe, in this company and...

I stopped counting.

Yes, I also, but I did some endeavors over the weekend to get to a number. I think it's the 91st day. And in the last 2 weeks, a lot of people were on holiday. We will start to review the segments and come to an analysis of future potential in the next 2 months, and then we'll discuss it obviously with the Supervisory Board, et cetera. So that's the reason why we aim for the 21st of November.

All right. Just a quick follow-up. Any thoughts on where Bloomberg consensus is today for full year EBITDA?

I don't know if somebody else on the call has -- I didn't look at Bloomberg.

[Operator Instructions] And we will now move on to our next question from Robert at ABN AMRO.

I'll start with a follow-up on Patrick's question on the outlook. If you reach your outlook statement, modest growth in the second half, and you specifically say to expect a reported EBITDA profitability of around 5%. It sounds to me as if you expect reported EBITDA of around EUR 110 million. If that's a fair assumption, that is my first question. And related to this, that is quite bullish about second half, EUR 68 million EBITDA or so. Why is that? And, yes, which segments should particularly drive this improvement in the second half? That's my first question.

Faasse?

So first, let me briefly highlight that the deviation -- the compare -- the composition, sorry, of the EBITDA between first half and second half of the year has been, I would say, 40-60 over the past few years. After the addition of the business-to-consumer business in the U.S. with FragranceNet, importance of the fourth quarter, and as such, the second half of the year, increased even more. So basically, the figures, as we've seen last year when it was more or less 45%, 55% share, we expect to go back to the 40%-60% indeed, more or less in those ranges. Then with regard to the outlook, we explicitly state that we expect a marginal turnover increase over the second half of the year as compared to the second 6 months of last year. That covers, I think, the main part of your question, please help me out whether...

No. I think additionally, so just to make this very clear, this is all the 5% or around the 5%, I believe we said in the range of 5%, that's the language we used, for marginally improved revenue levels. And why are we stating this is just to make clear that the revenue overall is marginally, but the components of that revenue will change. And the 2 segments that drive will substantiate that in the range of 5% comment is Beauty and Personal Care. So we believe that Personal Care will continue its performance. And we believe that Beauty, on the back of the B2C U.S. market will have a strong Q4. And yes, that's our best guesstimate with all the know-how that we have today.

All right. That's very clear. I have a few others if I may.

But if you look at the historical EBITDA margins across the segments, and you would exchange Personal Care and Beauty for other segments, then that's improving your overall performance.

Okay. Sorry to come back on the provisions again, but I still do it. Although the magnitude is materially less than last year, the whole wording is not too different. I think last year, you also spoke about procedures that were not followed or internal procedures that were not followed. So how can you reassure us that things have now really changed because we had a -- you had a provision in the first half of last year, the second half of last year, albeit in Food, this time in Liquor. And again, in the first half of 2023. So how can you reassure us that, that this will not become reoccurring. So that's my question on that.

Yes. Well, let me assure you that we are doing our utmost that it will not, but at the same moment in time this is business. So last year, if I understand everything well, this was a business partnership. These are just better positions that -- where there are problems with the debtor. So the risk is also -- this is not an open-ended risk. The EUR 4 million -- approximately EUR 4 million, and Mark is going to correct me if I'm wrong, but I believe that these are 3 positions of which 2 of them have been 100% provisions. And one of them, there are still of value in that position of a little bit north of EUR 1 million.

Yes. EUR 1.3 million to be precise.

And we do believe that we are going to take the right steps to recover that. And there's also a plan for it. Whether that all will work out, our best guesstimate that it will. Is this a risk-free business? Obviously, it's not. But I must say that in the past, it seems that there have been -- and I'm not talking about 2022, but before 2022, there haven't been that many one-offs, so to say. So yes, we're working towards an organization that will not have too many one-offs every year. That's true. Am I going to give you a guarantee on that? It would be foolish [indiscernible]. But it definitely has our intention. You can -- I can assure you that it has, and we're taking the right steps, I believe.

Okay. That makes sense. I have 2 small remaining questions. Retail reported negative EBITDA. You did some explanation already in the prepared remarks, the passenger mix, still, the revenue increase was quite strong. So personally, I would have expected a bit more positive operating leverage. But yes, you explained that. Is it -- what can we expect for the remainder of the year in this division? Do you expect it to be EBITDA positive? That's my first small remaining question. And the second one, last one, sorry, to be very long. But can you help us estimate what the dividend to minority, to noncontrolling interest will be going forward. It has been a bit volatile past few years. So you paid EUR 2.5 million. How can you help us forecasting this going forward?

Okay. I will take the first question. Mark will take the second question. Life is easy. If I -- Mark is taking the difficult ones. Now -- so the first -- so Retail is also in terms of performance an interesting segment, Robert Jan. Although overall for the business, not extremely important, but nonetheless. In the past, the Travel Retail has seen performance of EUR 10 million EBITDA levels, right? Now whether the world will turn to normal in terms of traveling, that's a bit of a mixed bag, if you look at everybody in the world. It is true that it's -- that people expect the Chinese and the Asian travelers to come back, who are spending a lot on airports in general. So that's a positive. The business travelers are coming back, but still not on the level of 2019, I believe. So that's one comment. Another comment, which may not be -- which is made in the comments, is the fact that the increase in revenue is for a large part due to new stores. And new stores also have a time, they also need a certain amount of time to get up and running. But that effect is also in the numbers if you look at it. And secondly, the numbers are also influenced by renegotiating concessions and agreements across the different stores we have. So those are the things that will impact. If we look at -- I mean we're not giving forecast per segment, but it wouldn't surprise me if negative turns to positive in the second half year.

Then regarding your question on the dividend to minorities, sir Robert Jan. So that will clearly, as dividend to minority as well as dividend in general, will be depending on both the performance of those segments or those individual companies, I must state, as well as the investment planning for those companies. We'll get back to you on this in more detail also in the November 21 strategy update, where we also have a clearer part on the investment parts of those segments and those companies. Would that answer your question, sir Robert Jan?

Yes. That's fine.

We will now have a follow-up question from Tijs at ING.

Yes, on the remarks about the Bloomberg consensus, the Bloomberg consensus aiming for EUR 105 million and it includes 3 estimates and ING's at EUR 100 million and the high in the consensus is EUR 110 million. So I think that Patrick and Robert Jan can figure it out, knowing your own estimates. And I was myself late in handing in the -- yes, that's an easy one. And I myself was late in handing in the consensus estimates to B&S, so I apologize for that, Patrick. Just in time for the morning meeting on Saturday, I would say. For next time, it will be here all time. Yes, that is a background. I had a follow-up question on the net interest expenses increased, I think, to EUR 7 million. Is that completely, let's say, interest charges on gross debt and leases? Or were there also some other financial costs with a kind of one-off nature in it?

Now the interest on the bank debt, so to speak, is approximately 90%, 95% of the amount and with the remainder being the interest charge included in the lease liabilities and some other minor individual amounts.

Yes, this is a good number as a proxy going into the second half of the year, I guess.

Exactly.

Okay. And then also what I had -- yes, maybe I missed it, but the EUR 2 million advisory costs, are they, let's say, allocated -- spread equally over the divisions? Or are they in the holding cost line item?

That's mainly in the holding line item indeed.

Okay. So there's a normalization in the second half versus that number? Is it fair to assume?

Correct.

Yes. Okay. And then one final. You mentioned the EUR 1.3 million outstanding only provisions. Is there, let's say, a timing? Is there an agenda? So did you know that there is, let's say, a settlement coming on this for the third quarter or the fourth quarter?

Not so sure.

No, I would say before the year-end anyhow.

We have no further questions in queue currently. [Operator Instructions] I don't see any further questions in queue. I will now hand it back to Peter for closing remarks. Thank you.

Well, thank you all for joining the call and showing your interest in our company. It was my first call. So everything I did wrong, then I do apologize, but I enjoyed it very much, and I'm really looking forward to the trading update in the beginning of November, but definitely hopefully meeting you all personally on the 21st of November. Thank you.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Continue to stay safe. You may now disconnect.