Brunello Cucinelli S.p.A. (BC) Earnings Call Transcript & Summary

Good evening, and welcome to the presentations of the revenues for the first 9 months 2022 of the fashion house, Brunello Cucinelli. Speakers will be Brunello Cucinelli, Chairman, Executive Chairman and Creative Director; Riccardo Stefanelli, CEO; Moreno Ciarapica, CFO; and Pietro Arnaboldi, Head of Investor Relations and Corporate Planning. [Operator Instructions] Now I'd like to give the floor to Brunello Cucinelli. The floor is yours.

Good evening. And first of all, thank you, thank you for introducing us as a fashion house. So thank you. So I would like to greet you all with pleasure, analysts, investors. And usually, there is some members of the press, too. So as you might know, we always attach a lot of importance to these calls so much so that we have already notified to you that another one will be organized for December 6 because you see having another appointment for next March 15, we thought it would too long. So we will have it in December. So we are all here, as usual, except for our esteemed Luca Lisandrori, who is in Korea for 3 days, the first trip after the end of the -- at the beginning, sorry, of the pandemic. So before I begin, I would like to bring to your attention something that I don't really want to boast, but last week, the La Sapienza University of Rome acknowledge to me a very great recognition. It is a very important recognition because, as you know, La Sapienza is one of the major European universities, and it was actually set up 5, 6 years before the Perugia, Perugia University, and I was awarded an honorary PhD in management, banking and commodity sciences, but actually, it is as if it was for my capacity as a CEO of the company. What I, actually we, felt honored above all was the fact that the magnificent director with her speech and then the Dean and the Department Director with their 2 laudations and praises. Well, they were really fascinating speeches. It's fascinating for what they said about our company. And at the end of it all, we were acknowledged or recognized, this idea of working with humanistic capitalism and human sustainability, and you know it all. So truth be told, we are working with a very good attitude, with a good spirit. So I don't know about you, but what's there, but it's like 22 degrees Celsius today. It's like spring here. I don't know what the weather is where you are. So how the call will unfold. First, I will read out the highlights to you, then we would like to comment on the manufacturing Italy, and today and also about the politics because the new government is now forthcoming. We will comment on the first 9 months of our business. We will be talking about markets, the forecast closing of 2022, then the forecast for 2023 with orders in-house for the Spring/Summer 2023, the wholesale orders. And also, we will mention this new 5-year plan and because we have changed the date once again, it's '23, '27. And then last but not least, 4, 5 minutes to what we consider the most important theme, and we mentioned it during the Board meeting. We called it a great plan for a great future, universal working conditions for human beings. So we attach really a huge importance to this. And I'll tell you why later on. So now the highlights. Net sales amounted to EUR 642 million with a splendid growth of plus 27.7% at current exchange rates, plus 23% at constant exchange rates compared to last year. Then we enjoyed very good growth in all channels and geographies with sellouts of the Fall/Winter 2022 collections that actually have a very high value. Very, very good growth in all regions. Americas, plus 45%; Asia 22%. Well, in here, I will tell you later, we break down or break out of this China, which amounts to 13% out of 22%. Europe 21%; and Italy 10%. Very strong results in both the retail channel, up 43%, and the wholesale channel, too, up 10.5%. So very, very interesting. So these results and the great appreciation reported for the collections currently in the stores, all this leads us to imagine a wonderful growth in revenues in 2022, close to 25%. Just let me drink a sip of water. So this is my comment. The results of the first 9 months of 2022 really are splendid. We are indeed achieving great results, thanks to the image that the brand enjoys worldwide for its style, way of working and humanistic conception of business. The above, lets us envisage an extraordinary prodigious end of the year with a growth in sales close to 25%. We continue to support our great project for a great future, universal working conditions for human beings. There is no doubt that having our production and sales facilities at full capacity, having not laid off anyone during the last 2 years, well, this allows us to cope with a large quantity of goods requested by the market where, in general, demand exceeds supply. The weakness of the euro and the short production chains are rewarding not only us, but the entire Italian fine manufacturing sector, proving just how strong our welfare state is -- the order intake for Spring/Summer, Men's, Women's 2023 was excellent, both in terms of image and quantity. All this makes us envisage a 2023 with sound sales growth of 10%. So before we start, I'd like to spend a couple of words on Italy as a manufacturing countries. The day we met with Milleri, the CEO of Luxottica, and talking in general about eyewear and projects, we will just say that there is a strong request, a strong demand for special products. And he said, well, yes, we have a large demand for horn, a horn that comes from Agordo that is very special. So what is happening in our view? Well, first of all, the demand is stronger than the supply. And why do I say this? We can say this [indiscernible] this better if you have wholesale to compare because the wholesale clients maybe do tell you that they are receiving less winter goods. And this is something that you would never notice if you only run your own stores. So what we say is that a welfare state that enabled us not to lay off anyone, not to fire any workforce, and we mentioned this during the Board meeting this morning, too, well, we believe that there is a strong production structure. There is a strong commercial structure. And this way, we can be present internationally, and we can cope with this demand, with this increase in demand. You see, GDP, it was 3, then now they say 2. So we started 3, then 3.2, the national GDP. Now they say 3.4. But there's no doubt that what we are seeing now is the great availability of products, thanks to our production facilities. Currently, we have an unemployment rate in Italy, which is about 7%, 8%. And in the past 20 years, similar rates happened in 2008. So for us, it's something very, very special. And also, we have a short production chain, and this is very important. Another factor there is the weak euro. We are exporters and manufacturers. And we believe that these great benefits perhaps could be there to stay also for next year. So as we were saying this morning, I don't know what will happen to the GDP next year, plus [ 0 3 or 0 5 ], but we will have advantages because the production chain cannot be built overnight, you need expertise for that. So this is the advantage of manufacturing Italy. Then sales. So in the first 9 months of the year, sales went very well. And so they are also for the first 15 days of October. You see, I said this because sometimes we are asked how the last week, how we performed the last week. So for those of you who are interested, things are going well in October, too. So now it's been 3 -- or 3 months that the new Fall/Winter '22 collections are in the boutique, so now you can have an opinion about the appeal of the product. And this is very important, the fact that you know that people like the product whereas if your product is less interesting, you see that's a problem. What is really strongly felt is the demand for exclusive, special, high-quality, handmade garments. In our opinion, luxury means well-made garments, exclusive garments, garments that can be handed down to the next generations. And it seems that customers are looking for garments that they will never throw away. This is a very strong feeling. Perhaps you see it especially among young people, the fact of reusing, reconditioning, repairing, this is very, very strongly felt. Perhaps it's just for us because our garments are pretty expensive. Then markets, in general, we would say that all markets are performing very well. So U.S.A., very strong. Europe, very strong, too. Asia, strong with China. And for us, it is doing well. But mind you, you should note that it is about 13% of our business. So our business breaks down roughly as follows: 35%, U.S.; 40%, Europe; 25%, Asia, of which 13% China. Then a special word about -- so a special word on Europe. You see the -- even regular customers, even in small towns, are performing very, very well. So local customers are doing well. Then as far as the digital world is concerned, we are enjoying a good and balanced growth of around 25%, 7% direct from Solomeo. And overall, our estimate is for about 13%, 14%. But you see our website is still a very interesting communication tool. 2, 3 months ago, our finding was that 60% of customers arrive in the physical store with the image they actually saw on the website. This is very important. So in this important channel, we see a healthy and robust growth over the years. Of course, somebody, 2 years ago, said that perhaps we would not need the physical stores anymore. I remember, a member of the Board even said that maybe we wouldn't even need the ladies or the staff to make coffee. But physical stores are, however, very important for the image and for the business. And we see it in our retail. We see the results that we achieve with Mytheresa in terms of numbers and taste. It is true that they have a very good taste, that MR PORTER, great results, a company with a lot of taste, I think. You see they are beautiful online store, and they will have a future, but provided that they are fresh, modern the way in which they mix and match the way in which they display, but I really like them. Congratulations. Then physical stores, we have returned to a basic importance because customers, first and foremost, they want to be advised, especially for menswear. The many wives actually call us asking us to advise their husbands to what to wear. Of course, also well off or rich people need to look good when they go out so they need reassurance. And by the way, our business currently is menswear and womenswear is 50-50. It's just slightly higher for the women in terms of price. And then another important thing is kindness, the people meeting you in the store, the people stuffing the store because the idea that we nurture is that of never, never pushing. So if you turn up at the store, the sales associate will welcome you. Sometimes, they even become your adviser, then maybe you can have a cappuccino, a coffee. You see physical stores, they play a very important role. Then the taste of stores. A few years ago, the first store to be opened was Saint-Tropez at the -- in the early 2000s. And we wanted these stores to be somehow some sort of living room where the larger stores, they have a bar, like in the Madison London, Paris. Then we have the middle-sized ones 270, 280 square meters, and they have a mini bar -- sorry, an average bar, and then the small stores have a minibar. What does this mean? It means that you turn up at the store, you can have a cappuccino while your wife is shopping. And at the Madison, we have customers who basically turn up for a cappuccino and a pastry, and then maybe they do not shop at all, or maybe they shop the day after. So every one of these stores has a medium or small library between 40 and 70 books. You see, we would like everything to be somehow a small but pleasant experience. And now I would like to devote 1 minute to the praise given by my friend. I'd like to relay what he said during an interview because this is precisely what we built our brands upon. So I would like to pass on to you a nice judgment given by my New York friend, Robert Berg, who first worked for a decade at my masters Ralph Lauren. And I told you that in 2019, I went to see him and he had tearful eyes. And then he, Robert started working at our wonderful client, Bergdorf Goodman. And now he is a freelance. When we started in the year -- year 2000, we started the total look and Robert Berg had another wonderful friend, Peter Rizo, Michael Bastian, Yuki Kazuda, a 40-year-old gentlemen. And when they came to [indiscernible] you could spot them immediately, and they would come here to Solomeo in the early 2000. And that's when we were starting to put on these garments, we would mix and match them and talk about combinations. And for me, that was really an encouragement to me because they were particularly fascinated by the brand. And Robert, who is now a great expert in luxury retail, he said 2 things. From day 1, the brand presented itself with a very strong identity and remained true to that aesthetic, focused on quality, craftsmanship and exclusivity. And it soon became the benchmark for Italian luxury products. Then he said, I think that today, they have reached the pinnacle of luxury. And then another good thing he mentioned, Cucinelli is extraordinarily focused on the product and his customers whom he knows very well. And then he ends by saying, they have become excellent retailers of their products, and they have created a unique and special experience in their stores. We now see other brands starting to adopt a similar approach to retail, but Cucinelli is ahead of the curve. So what I say, thank you, Robert. You are always -- have always been very [indiscernible] kind to us. But I really wanted to say this because it was the Goodman team at the beginning of my path in the early 2002, talk to me, and discuss with me and choose the path ahead. Then prices. The price structure, you know it's already in the following 100 Europe, 120 U.S., 128 Asia. We change prices twice a year when we release our collection. Raw materials. For everything concerning raw materials, we would like to confirm that we have no difficulty in finding them and because the warehouses and the factory are in place to guarantee quantity and quality. And perhaps this was one of the biggest decisions we took in 2020, Riccardo, Moreno, when we did not cancel any order. We said, let us leave the cashmere orders and the silk orders. And now we have raw material to meet the demand. So likely full year 2022 earnings. Well, we can call this the year of total rebalancing. So 2020, it was minus 10%, revenues, 2021, plus 30%, plus -- sorry, in 2022, plus 25%. We will reach a healthy EBITDA of around 18%; a healthy inventory around 29%, it's healthy for us. You can't have a factory unless you have an inventory, then healthy investments of around 8%, and then we'll see in 2 months' time, but we are perfectly in line, then a healthy net financial position. We basically do not carry any debts and a sound capital structure of close to 50% of turnover. And dividends, as you know are at 50%. Then we have ended 2023 collections with excellent results. So the important orders in-house collections are viewed as young at the same time, beautiful and elegant. And we were saying it is not always easy, but you see, we enjoy what we have. Everybody seems to be in the lookout for exclusive garments. And for now, we have envisaged for 2023 -- we [ vision ] a growth of a healthy 10% as planned. So we think that in 2023, we will return to a nice balanced business. Then a new 5-year plan, a new change here. A few calls ago, we said that we had closed 2021, and we had started the 2022 5-year plan. But we actually realized that 2022 is not really a linear year because there's some products missing. You see the results are rather old. So we decided to leave it as a suspended year. So our 5-year plan, we'll make it start on 1st of January 2023, where -- so everything is extremely positive for us. So now why in this 5-year plan we decided to choose as the main theme this great project for a great future? It will be the most important project for the coming years. We called it a great plan or a great project for the great future, universal working conditions for the human being. You see, as we have heard around, many people actually resign without having another job. Riccardo say this new phenomenon that is called the silent quitting. So people work without passion while they wait for something better. And for all companies, regardless of their size; all companies, they say that they cannot find people to hire, especially young people. So this is a very serious phenomenon. So for us, however, this is not the case for us, but we want to devote all our forces for the coming years to this very sensitive issue. So it's not that we have not focused on it in the past, but we still consider it very important. So what should we look at? Well, workplaces, we can't hide. Well, in this discussion, I would like you to focus on production department in the factories, not just the nice offices. We have 2,500 people, 1,200 on retail, and they receive important salaries, and they staff our stores. So we would like everything to be focused on production, too. So we need to have better workplaces, better working hours and also the fact of being online all the time, wages, especially for blue collar workers. This is another theme. And we want to focus on salaries up to EUR 2,000 in Perugia, perhaps EUR 2,300 for those living in Milan. And then how do we treat each other daily at work? This is a very strong theme. And we see it. We feel it from the people who are coming through job interviews. Often you see our factories are nice with nice offices, but this is not always the case for the production departments. We have been told that in the production departments, there should be very few windows because it is considered a disruption. But I think that there is more creativity if you can see outside. Now going back to wages. I think that all this needs to happen up to EUR 2,000 net per month because it's not the same, whereas instead of earning EUR 1,300, you earn EUR 1,900, your life changes. And especially, you find people who are willing to come to work for you. And then, by the way, a small digression. In June, we have taken action to basically reduce inflationary pressure on those who earn under EUR 2,500 per month for the year 2022. So for us, it is about 1,000 out of 2,500. Then working hours. We must return to balancing working hours as well as the right time spent online. I say it very often. Perhaps we could work for 7.5 hours a day. But as we were saying in the Board this morning, we do work for 8 hours. But actually, we calculated that 1 hour is not for the company because you basically spend time on your device. So we -- all in all, we work 7 hours, although we spend 8 hours in the office plus 2 hours to go to and fro from work, and then 1.5 hour of lunch, you see that means its add up too many hours. So 7 hours should be enough to have enough time for your private life. So in our beautiful factory, you see we allow ourselves to call it beautiful, but you know that Leonardo, before he passed away, he said, our factory in Agordo -- Leonardo Del Vecchio said, our factory in Agordo is very beautiful. We would like that to be a nice climate of extreme respect in people because you see, if I give you esteem, esteem generates responsibility, and responsibility engenders creativity. That's for sure. And creativity in product does not depend on 3 to 5 people. We have 60 people to create the product. But I don't think that creative comes from all 60 of them. There are other people in the company that just with 1 small piece of advice, they can improve conditions and creativity. And then 1 more minute and then we open up for Q&A. How can we imagine our young people coming to work in our factories if we do not give them moral economic activity? So very often, we would like other -- the children of other families to apply specific trades. If you say you see I'm going to work in a factory. I earn EUR 1,250. I work in production with the conditions that I've described before. It is not very easy to suggest these jobs or recommend these jobs to our children. And these great concepts still apply to everyone, not just to us. It applies to pizzerias and restaurants, all activities. And this is what we try to put into practice in a wonderful -- that's how we call them -- wonderful Schools of Arts and Crafts in Solomeo, where this year, we are being very successful because they all found a job after finishing the school. And this year, we would have almost 50% more students. Perhaps in the end, we could say that all this is human sustainability, that our sustainability is broken down into climate-related [ ambitions ], economic stability where you work how much you earn, and what kind of work environment you work in. Then there is cultural sustainability. What does your company do to create corporate culture and also in the community? And then the spiritual sustainability, I think it is very important. You see if you treat me well, my spirit is lifted. If you give me a nice view and nice window, I become more creative. If you maybe comfort me when I'm blue, when I feel blue, my spirit will be lifted. So spiritual sustainability perhaps is the most important one. So to conclude, my dear friends, first of all, before -- so for the future, we imagine that perhaps it will be more difficult to find people to make beautiful garments, rather than to find people to buy these beautiful garments. We are working in a very good atmosphere. So there was the -- we had this assembly of the 100 the other day, and we hold it every 2 years, and we took stock of company. And we said it always went well. But this time, it is going even better. But we have -- we really need to have the courage to improve the workplaces and the wages and especially the work conditions in the production department, and that's what I tried to say when as I discussed at the G20 in 2021, when I talked about humanistic capitalism and human sustainability. So before I forget, tomorrow in the evening, we will have a dinner in Milan, then we will have one in Paris and London and then one in New York and with our investors there. And I hope that I will meet about 100 of you in the coming 2 months. Then if you can come and visit next year, for me, it will be more difficult to meet you unless you come here because we have events in China, America, Northern Europe and I don't know how I will do that. Perhaps I will send the young Luca and others and Riccardo. But you see you have -- so whenever you think of our company, really working conditions rank first. You don't need much, you see. If we can maybe increase wages for the production workers, it really has a very small impact on EBITDA, but it does change their life completely and also the vision of the company because our young people are struggling. Thank you very much. I apologize for being pretty lengthy, but I really wanted to work -- to talk about labor. Let us now open up for discussions and then you can call us or send us e-mails later on. Thank you.

Chorus call operator speaking. We will now start the Q&A session. [Operator Instructions] First question by Flavio Cereda, Jefferies.

Congratulations on your numbers and for all that you said about labors that you know these are themes that are very dear to you. So I'd like to focus now on the growth expectations in particular because there is this plus 25% and then 10% next year. So that's what you were expecting a few months ago. Where does this driving force come from? From the U.S., from men's, women's, maybe more retail? And to conclude, I think that you will double your revenues in 6 years, not 10. So I'd like to ask, what changed?

Well, Flavio, what has changed? That's a great question, first of all. Well, it comes from all markets, I would say. You see now, menswear has the same value as womenswear, but there's something special on the market. I was saying this to some ministers the other day. You should not underestimate the Italian production structure. It is really at run rate. If you go to any multi-brand client and you ask them, what about the shipments from companies? They say that they are receiving 80% of what they expected, which means that there's a product missing on the market, there's a lack of product. And we were not expecting this because the first semester see that the stores were closed, the second semester was better. But we were not expecting this. And you do not actually -- you're not able to see this in the retail store because if it -- if there was 10% less in our Milan store, you wouldn't notice it because we did not basically stock up. We waited before placing the order, and now we are struggling because demand far exceeds supply. And we are -- that's why we are achieving this result because you might say why these people, they get all the budgets wrong. No, this is not the case. That's why we have decided to separate this year to see it as a stand-alone year because we want to restart with our normal growth this year. For 2021, '22, these are special years. The first year, instead of losing 25, we lost 10. Last year, we caught up with facility. This year, we are having a very special season. And probably what you say we will double our revenues in completely different -- within completely different timing. But honestly speaking, in '21, '22, '23, we were not expecting this revenues growth. But this year is very special, let me tell you, and you can feel it everywhere. You just need to talk to multi brands. Why? Because production is an issue. Very often, Flavio, we'll talk about sales, but production is a true strong problem. Raw materials, you say there's a lack of it, there is a shortage. It's not true. If we do not buy the white cotton from our suppliers 6 months in advance, we can -- we do not have the cotton for the white shirts. And when the pandemic broke out, we all did that. What I was saying before, Flavio, thanks to our Italian government, you see Milleri was saying that all the production facilities are full. In other countries, they laid off workers and now reconstructing the production in the company, it's not something that you can do in 3 months. That's why I'm saying that when in March and April, we said our GDP would probably have reached 3% now maybe 3.2%, 3.4% because there is demand for that, and I believe that we will have a great advantage in 2023, too. But you see, Flavio, I'm not saying here that the GDP in Italy will grow by [ 0 3 or 0 6 ], but I'm sure it will grow more than other countries because we have the production commercial facilities. Our company today is stronger than 2019. Then in 2019, we lost money, but we did not -- 2020, we lost money, but not the facilities. And if we had had million EUR 30 million, EUR 40 million more of money in our pocket and 10%, 15% less production capacity, we would not have this. I don't know whether I was clear, but you see it takes long to train people. And I will say it once again this in Milan, London, Paris and New York, this is typically Italian advantage. I spoke about this with someone who is very close to Draghi. This is thanks to our wealth estate. Yes. Thank you. And I didn't say this, but the new government is coming 2, 3 days. Do not get frightened. I'm 69, and I have witnessed 64 governments. Last night, I was reading something interesting. After Caracalla in Rome in 100 years, they had 27 emperors in Rome. So the idea that 1 emperor or 1 prime minister in our country spends little time, the government comes from ancient Rome.

Andrea Randone, Intermonte.

I have 2 questions. The first one is going back to the fact that these extraordinary staggering numbers this year, I'm sure there are also exchange rates-related components. I believe that there must have been the need to increase production of garments during the year because from what I remember, you have -- you plan for an 8% volume growth and 2% price. This year, although prices will have increased more, volumes actually grew more than 8%. So how do you manage this? This is my first question. And the second, on labor. How do you act or intervene with the third-party contractors if you do? And they work nearly exclusively for you, right?

Yes. Yes, I'll tell you now. So first of all, a few days ago, Larry Fink actually paid tribute to Italy and its structure. And we should not underestimate that last year, we were awarded the Fashion Designer of the Year 2021 in U.K., and this really boosted menswear. The recognizability of a taste that only 3 or 4 fashion designers received this. So -- and also to answer Flavio's and also Andrea's question, yes, of course, taste is actually playing in our favor. But we have a production facility. Well, we have all third-party contractors that we met in last September with 6,800 people, 3,900 of which work for us and the other half works for Chanel, Hermes, Dior, so true textile industry. This is where growth comes from. The fact that there is a lack of product on the market. Go to the multi brand -- ask the multi-brand clients, and they will tell you that there is a shortage of delivery. Then labor, Andrea. This is very important. We want it to rank first in our next 5-year plan because we have to build the new artisans of the coming years. But we have decided, you see, that a young person, a young tailor needs to make some money. They have -- they're honing their trades. And we have to give back economic dignity to certain trades. You have come to our factory, and you see, you saw the best workstations are those where workers work on the -- basically on the machine, on the knitwear. And if you can look out of the window, that's much better. So Andrea, you should always expect what I basically said on work. So it is true. We got the -- we underestimated our growth forecast, but we are not talking about great changes here. But there is a shortage of goods on the market. We started delivering the Fall/Winter as per habit. And this year, many multi-brands wanted the goods months in advance because they -- because they have had issues in Spring/Summer, too. So we have a good production facility, 75% in Umbria, then we have Tuscany. My worry is to how to train artisans for the coming years. And we must give them through money. They need to be proud to be artisans. So if you pay them EUR 2,200 a month, 24 years of age, beautiful facilities, they can see the sky and work on quality product, you see, because this does not happen for the retail, for the people staffing the stores, you see those who come for job interviews for manual work, they want to know about their working conditions and about their wages. Just imagine sending your child, your son to work or your daughter to send to work for EUR 1,200. You should know that we work differently.

So your EBITDA around 19%?

No, no, no, Andrea. Yes. Similar to 2019, I didn't say 19. Yes, yes, full rebalancing, full rebalancing because I -- when everybody is back to their balance, I don't think that we will have the same growth rates. But you remember, when we said in May, June, you see that we will have good quarterly results, half year results, 9 months results. And until now, my esteemed [ Vuitton ] has had unexpected figures. Then you might say what will happen in November. But you see whatever happens, we will all close the year with wonderful growth vis-a-vis our predictions or estimates because growing 20%, 30%, you see my esteemed [ Vuitton ] 30% on billions, you see. So it will be an exceptional year. I'm sure about this. Thank you.

Antoine Belge, BNP Exane.

It's Antoine Belge at BNP Exane. 3 questions, if I may. The first one is about China. I looked at the numbers for Asia in the third quarter. I think they are up around 14%, 1-4, with some positive contribution from currencies. So probably growing less than double digit at constant currencies. So can you maybe tell us if China was growing and by how much?

Excuse me? Can you please restart the question because we couldn't hear the beginning. If you can ask the question again? Thank you.

Yes, it's about China because you don't disclose China but you disclosed Asia, and Asia was up 14%, 1-4, in the third quarter with some positive contribution from currencies. So it seems that, overall, Asia, in the third quarter, was slowing to less than double digits. So is it possible to tell us a bit more precisely what was the trend in China? My second question is about the U.S. consumer. To what extent have you seen a lot of sales to U.S. tourist in Europe? And are you seeing this now still happening now that we are in the month of October? And finally, on the EBITDA number of 18%, I'm a bit surprised that it's not revised up because you already had 18% when you were forecasting 15% sales growth, and now it's much stronger, 25%. So I would have expected stronger sales to lead to a stronger margin in 2022.

So as far -- so American tourists in Europe. Yes, this year, Americans have invaded Europe, but now in October, Americans have gone back to America, and Europe is still performing very well. And the U.S. is performing very well, especially local customers, as we said before. As far as the growth in China is concerned. So as far as growth in Asia is concerned, we have a first half with 27%, whereas we have a third quarter with plus 14%. So we know that in Asia, for example, in Japan, there is an opposite effect of currency. So this does not involve Asia because in Japan, it is absolutely the opposite. So the 14% growth in Asia with -- in China, some lockdown phenomenon, we feel it is a very positive growth. Yes, of course, Brunello says because Antoine, we always start from a very important second semester. Then as far as profitability is concerned, yes, we have declared 18%, and hopefully, we can do it well. But it's not that we have changed our budgets for hundreds of millions. There is a good mood on the brand, and this all goes well because we have a good mood now. We have orders in-house for the Spring/Summer. And as you know, it's the sellout of Fall/Winter is important. Now it means that in January, they will have better budgets. That's why you feel that we are very confident because today's confidence means that this will still be there in 2023 because clients will be coming with the budgets that are in line with how the previous season went.