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

Good evening, and welcome to the update for the end of the year of the fashion house, Brunello Cucinelli. The speakers will be Brunello Cucinelli, the Executive President and Creative Director; Luca Lisandroni, Ricardo Stefanelli, both CEOs; Moreno Ciarapica, CFO; and Pietro Arnaboldi, Head of Investor Relations and Corporate Planning. [Operator Instructions] And now I'd like to give the floor to Brunello Cucinelli. The floor is yours. Over to you.

Yes, here we are, good evening. We are extremely pleased and glad to be here. We are all gathered here. We're very happy with holding this call because, first of all, last one, we held was in October. And we thought that letting 5 months lapse between now and the next one, we thought it would be too much. So we like this idea. We didn't want to spend 5 months without reporting to you. A special year, yes. And we did something that we are very delighted with. We started in Milan at the Casa Cucinelli, where we met with about 25 investors. Then our analysts, we met them during an evening when we also introduced and presented the wine we make in the village and we did with journalists and analysts, and this was the dinner of gratitude. Then in Milan, 25 investors, then Paris a few days ago, London. And now next week, we will conclude this round with New York. So we really like this initiative because next year, you see personally speaking, there are a couple of important things that I need to do. I will be on the travel on the move quite a lot, and I wanted to meet you in person. And hopefully, we hope that we can hold something like this in China, too. It's been 3 years without going to China. We have defined these meetings, dinners of gratitude or Thanksgiving, giving thanks to say, heartfelt thanks for everything you have done for our company, 10 days after the listing for our land Italy, for myself, for our family, for our foundation. And as I keep saying, we would not have been able to do all this had we not listed. So we sold part of the company to be able to do special things for creation -- to support creation. So what about this call? We have all the time in the world available. We'd like to talk about 2022. We have reached the end then -- because then on January 9, the day before [Indiscernible], you will receive your figures about revenues, investments and net financial position. So here we are. So forecast for 2022 -- just a second. I need to read out the following. So the excellent sales in October and November, following this excellent magnificent results in the first 9 months of the year basically lead us to envisage for 2022 a beautiful, magnificent growth of revenues of about 28%. The very important order intake for the spring/summer 2023, both in terms of quantity and quality enables us to envisage 2023 that is extremely interesting with a healthy growth of around 12%. And the achievement of the significant goal of EUR 1 billion revenues. So just a few days ago, we received an international price from Neiman Marcus, and this will be -- it will be presented with it in Paris next March, March next year. And then I will -- we will talk about this contemporary license, a 10-year license with EssilorLuxottica to further develop our offering in eyewear, and then I'll tell you why we call it contemporary, and we still keep working on what we spoke about this morning during the great project about the universal working conditions for the human being, the beautiful factory within this idea of a humanistic capitalism and human sustainability for the environment, for the economy, for the culture, spirits and moral. Then as you know, we have this great project that we envisaged with the then Prince and current King of England in Himalaya. It is something very appealing. You see Ricardo went for lunch a few days ago and our esteemed King sent his greetings, saying that he would really love to come to Himalaya with us. So thank you. And so this is basically the time we are living in. So we have harvested a lot in this 2022, the year of the full rebalancing for our fashion house, thanks also to the serious creative and manufacturing country we live in Italy. And we are honored to belong to it. And we also have to thank its important welfare state. During the last 2 years with the pandemic, we have not made anybody redundant, which has certainly allowed us to maintain production and commercial facilities in full efficiency. And this has also put us in a position to meet the demands of the world market where it seems to us that demand exceeds supply. So such are the extraordinary conditions that allow us to envisage a splendid end of the year with an increase in turnover of around 28%. In the forthcoming 2023 that we want to call it a new time for mankind. Well, the 11th 5-year plan, 2023-2027 of our company is being launched. And above first and foremost, we want to talk about labor, balance through a project that we define the universal working conditions for the human being and our idea of a beautiful factory. Just a few days ago, we had the wonderful news that we were awarded for 2023, the prestigious Neiman Marcus Fashion Awards for distinguished service in the field of fashion. It is about 100 years old, this recognition, and the awards ceremony will take place next March. The orders in portfolio for spring/summer '23 are very remarkable, both in terms of quantity and quality, and this leads us to envisage a very, very interesting next year 2023 with a healthy growth of around 12% and a healthy and fair profit in keeping with our culture. As a result, it is reasonable to envisage that we can reach a very important milestone, namely EUR 1 billion turnover, and it is something pretty serious for us to be cheerful about. So the forecast. So 2022 and then, of course, we'll talk about markets, prices, raw materials. But first of all, our idea of 2022. So 2023, pretty good visibility. 2022, it's been a record-breaking year for us. We will have about 28% growth rate of our turnover. So minus 10% in 2020, plus 30% in 2021 and plus 28% approximately in 2022. So we could say that since 2019, we have grown by about 50%. Then, of course, we will generate EBITDA of around 18.5%. Net profit is around 10% and dividend is around 50% of the profit. And this 10% -- this kind of profit is what we view as just fair profit. It comes from our culture over the years where we have always envisaged as Italian that a profit of 10% in our beautiful Italy is somehow a great result. We were saying this morning in the past 5.5 years, we have had a tax rate of 22% because I can't -- we can't say that we are living in a country where tax is unbearable. So at the end of 2022 -- so why are we saying that? Because at the end of 2022, we basically closed our projects, and we will start on January 1, 2023. So that you can have a proper idea. So what about the breakdown of revenues? 35% U.S., 40% Europe, 25% Asia, of which 13% China. As you know, 60% retail, 40% wholesale. Then menswear in terms of numbers of SKUs, 50% like womenswear in terms of revenues, ladies 54%, 55% because the price is on average higher. So at the end of 2022, we can say that the old plan 1923 is over. We actually -- 2021, '22 were very special year. That's why we decided to close the plan in 2022. So now 2023, this is the first year of the new 5-year plan, '23, '27 to date, the 11th. So this will be the 45th financial statements. And we are starting the 46th year of our business. We see it as a very interesting year in general. And we believe very interesting for our fashion house. We see it with a growth of around 12%. EBITDA always around 18% and then perhaps it could improve along the way. And as we were saying before, we think that we will achieve EUR 1 billion in turnover and a very, very interesting time for the taste and the products, and we will talk about it later. So 2023, we already have orders in-house and just 2 days ago, we came out with the fall/winter collection '23 women. First results are excellent. So it is yet another plus here, but a lot depends on the sellout. So the sellouts on the full collection was great. And the collection is good, is beautiful as it seems to be the case, we can definitely achieve great results. Then 2024, of course, not as much visibility as in 2023, but pretty strong. We'd like to grow by 10% in revenues. EBITDA starting point is 80% investment. As you saw in the past, it's always around -- it's always hovering around 8%. So between 22% and 23% is 8%, then it can be 8.5% or 7.5% and then dividends 50%. Another important point, we -- in 2024, we should be able to double the revenues that had been planned -- the 10-year plan X in advance or earlier by 3 years, that is to say in 2024. And there is no doubt that the way we behaved during the pandemic has perhaps underpinned, supported us the way we behaved with customers, suppliers with the market in general. So these are the highlights for 2022, '23 and '24. Then something about prices. What we want to say here, prices are changed twice a year. When the collections are released, the exchange rate is fixed and prices, Europe, EUR 100; U.S., EUR 120; Asia, EUR 128. These are the rules about prices because you see we have the impression that there is somehow some discomfort or unhappiness disappointment and word level about the way the prices are made. And this is also the case for very wealthy people because if you -- even if you are wealthy, you don't want to pay, you don't want to be ripped off. You don't want to overpay. So this becomes -- makes you uncomfortable. And we hear these kind of comments because at the end of the day, we can say there is a certain morality even in having a fair price than markets. Well, we can say very, very well across the board. Actually, I don't think any of us expected anything so good this year. It is a special time, particularly for Italy. So you will have seen that today, they said the GDP in Italy will grow by 3.9%. And my take is that we will reach 4% because the supply of product worldwide is lower than demand. And we see this very much in our multi-brand stores, where talking to them, even today, there is no doubt that they have not -- they're still not receiving 100% of the shipments. The 80%, 85% is being delivered. So the fact that we have strong production facilities well, this has enabled us to achieve these results. But you see this is across the board, not just for us. And then we can say that perhaps even in 2023, the world production chain will not be fully rebalanced. So it could be still a bit an advantageous year for Italy. So I don't know how much the world will grow, but Italy, perhaps it will grow a bit more because of its manufacturing nature. So about markets, maybe I can hand it over to Luca, so he can provide a good vision about China. But you see this is a call that we are holding before Christmas, but we do not want to shape your thoughts of what you know and think about China because it is 13% for us. It's a very small one. Luca?

Thank you, Brunello, and good evening. Luca speaking. So our year in China was undoubtedly a good one because we were -- we gave further continuity to growth, and we consolidated our positioning with increasing effectiveness. Of course, our result must be read taking into account that in China, we are still a very young brand that produces about 12% to 13% of its total turnover in the country with a short network of direct shops and concentrated in large cities. And because of exclusivity, we have a very limited digital exposure there. We believe that ready-to-wear is becoming more and more important. And we are very happy to see a growing number of customers stepping into our stores, looking for both special garments and also everyday clothing and testifying to an ever-increasing culture of quality and an international taste. You see, we believe that the Chinese market is still evolving and the end customer is increasingly more sophisticated, and we believe that China retains all the structural features that make it the main engine of development for the entire luxury industry, not just for us and also for the coming decades. And even in the current scenario, still impacted by the pandemic, we believe that one of the clearest evidence is the confirmation that luxury has become increasingly important in the lives of millions of Chinese customers and that nothing has dampened their desire to join and feel welcomed by large international brands. As in other parts of the world, it seems to us that during this year, the clear distinction between absolute luxury and more -- and how can I put a more extended luxury with an increasing appeal of the [value activity] is also becoming increasingly clear in China. I must say that never before this year, have we recorded a great interest in our brand by many magazines in the industry and not -- and we have received beautiful writings, great humanity and poetry that, in some cases, have really impressed us also from a spiritual and human point of view. On the one hand, we had many covers dedicated to us by fashion magazines and they have offered a beautiful image of our product offer and taste, style, too, and a no-logo style. And at the same time, there are more and more frequent requests for interviews with Brunello by Chinese newspapers and economic newspapers to deep dive into the idea of humanistic capitalism that with just profit, fair profit, harmony with creation, fair growth and balance between profit and giving back, this has obvious points of content with the confusion thoughts. So as you will have understood, we are still very positive about China and confident in our progressive development plan based on the idea of continuing to let us be discovered little by little by whispering about quality and above all manuality and giving a lot of value to creativity and exclusivity.

I hope you liked Luca's analysis who speaks to our Chinese friends 6 times a day. Now a couple of things. Well, you know almost everything. We'd like to confirm no problem with raw materials, no issues with production and the relations with dressmakers, no investment issues, but we can say that in 2021, '22, we did not stop any investments. And it is very likely that this has produced today's results. In total, we opened 2 to 3 stores a year and 4, 5 restyling or extensions per year. But what we would like to confirm is that we believe firmly that even boutiques are performing well, they need to be refurbished very, very often. There's not -- there's no way around it and the fact that everybody is online all the time, it is very contemporary on the one hand. Well, let me make this comment -- he said, can I show you my boutiques? Yes, he showed me the boutique with the video and then said, are you coming to visit? No, why should I have already seen it, it's on the screen. So it is very important for stores to be contemporary than product. You know that we always place it at center stage. The Designer of the Year Award last year that by GQ U.K. in 2021 has given the brand and in particular, menswear a great value. We have been recognized a taste, style and identity. And I think that this will keep giving also in the years to come. Then a few days ago, this award by Neiman Marcus and it has been awarded to Coco Chanel, Dior, Valentino, Armani, Miuccia Prada, Karl Lagerfeld and others. We believe it is a great recognition that honors us and it will also help us in the time to come. And then about product, we have about 60 people working on products. Average age is 40. And there's a rule, no decision can be made alone. So it means that if many of us consider that a garment is valid, then this is the case. But this idea of making decisions together applies throughout the company. It's not just in the product department and we also think that womenswear, we have a lot of room for growth there. But for menswear, perhaps even more. 3, 4 years ago, The New York Times said something very appealing. They said that our taste is the way young CEOs want to dress. And I think it is a fresh, useful refined way of dressing. That has not only apply to the Silicon Valley people, but across the board, to all young CEO. 52% of our garments are made only with our hands. What really matters is how long your garments last. They should almost be there to be left as to the following generation, quality and then exclusivity, a very important topic for us. But I think there is always a big difference between uniqueness and exclusivity. I always say that my iPhone is one of a kind, but I cannot say that it is exclusive. So what is exclusive? Exclusive is a product that is not always easy to find. And then the great project, just 20 seconds on this, the working conditions. We spoke about this at length last October. And this is an issue for everybody that works in the -- that applies humble trades. And we wanted to let you know that we have made 2 wage supplements. The first one in June, about 4% inflation. And the second one in December for Christmas. The June supplement was only for those earning up to EUR 2,500 per month whereas the December one is for everyone. But we can say that it's close to 1 month wages, this wage supplement. We know that this is what we have to work on in the coming 10 years, the working conditions. So we are very happy with the partnership with Cariaggi, great growth there, great revenues. But you see it was a decision that we made at a tough time in June 2020 when we decided to acquire Cariaggi. And when we -- basically, the banks asked us some extra warranties. And this year, the revenues will be pretty good and with a wonderful product. And we are very happy because it is a 70-year-old company, but very high quality. Then a couple of words on eyewear, this is a beautiful cooperation with EssilorLuxottica for the next 10 years, and we call it contemporary license. So we are forced to call it a license because that's the way it is. But it is a different way of working. Last week, we had -- their people -- style people here, we talk about style, we talk about packaging, we talk about distribution. And luckily enough, we have Luca with us who worked in this field, but this is not your ordinary license because everything is made together with a mutual esteem. Of course, it is a different trade and we can't possibly think of doing it just by ourselves alone. But this packaging style, distribution, everything is very well looked after. So to conclude, I believe that this has been -- well, as far as I'm concerned, it has been a difficult 3-year period for the soul and the body, but also perhaps one of the most painful times, but also exciting times of my life. It's been a 3-year period of ideals, values and responsibilities. And hopefully, we have tackled it with humility, courage, creativity. And I want to also add what our [Indiscernible] once said with seriousness. We think we have tackled the 3-year period with seriousness. Of course, do you remember, Moreno, when we drafted the budgets in April 2020, we drafted 4 versions. And I still remember saying to myself, I would give away 20% of my company, if you had a guarantee that everything will go well. So 2022 has been an intense year, full of great human content. And last night, we had a dinner with the member -- the Board members, and I had my 2 granddaughters sleeping there on the couch and we are looking at them and thinking that we are perhaps building a better world for them. So to conclude, we would like to say that we are extremely grateful to workers. They come first because perhaps they are the ones that make you see a bit less money, then suppliers, banks, customers, journalists, analysts and thank you, investors. That's why all these dinners at the end of the year, we call them dinners of gratitude. So best wishes from the deep of my heart. And this new time, you see -- I hope it brings us some more reflection, joy serenity first in our families. And this is what we did when we were farmers. You see just 20 seconds on this. But at this point of the year when we were farmers, we had sown the wheat, we just had to harvest the olives, then we would go to the owner of the land to make all the different accounts. And when my grandfather and my uncle came back from this chart with the land owner, he never -- they never mentioned how much money they made. They just say, yes, wheat went well; corn, so and so; olive oil, okay. In order to give us hope for the coming years. So thank you very much. Let's open up for discussion before wishing all the best after the end of the call. Thank you for everything that you have been doing for us in the past decade. Thank you.

[Operator Instructions] First question, from Flavio Cereda, Jefferies.

So since you here, 3 topics. The way you work now, to what extent has it changed after COVID? Are you more efficient? Hasn't there not been the pandemic, do you think you would be in the very same position? Or has something changed? Yes, we'll answer this beautiful question. Second question. Well, it is very widely said that you see consumers want a more understated product, more elegant and -- what do you -- what's your take on this, not just in China, but in general? And third question, in order to achieve the kind of growth that you achieved and you keep doing this. This requires an agile, flexible production chain. Are you worried in the medium term -- are you worried about the production chain, meaning are there any risks of bottlenecks because given also where you are positioning yourselves? Or do you think everything is manageable because you have the schools, obviously. So I was wondering whether you can say something.

Yes. Very interesting questions, Flavio. So the way of working, I have to say that the way of working has not changed as far as we are concerned. But there is no doubt that not having us for any discount. The fact that we mutually supported each other during the pandemic -- well, the results of this is an even stronger relationship, we shipped full winter with 10 days in advance, which means that if you behave properly, you see more than half of these workshops only work for us, and the other half work for others, too. And if you can set up a serious relationship with them, that's the result. So we work in the very same way, but the relationship has grown stronger. Then also the taste. I think the taste has changed compared to 2, 3 years ago. In fashion, it's always the case that a specific taste lasts for 5 years and then it declines, another one comes up. But what really matters is that there is demand for durable goods. Your consumers are even willing to pay a bit more, but you want these garments to be passed down to the next generation. Gwyneth Paltrow came here for dinner together with Cameron Diaz. She came to us -- and they said, "I only want to buy from you. Because now that I've seen how you make these garments, I only want to wear your brand." So there is a very different opinion nowadays. People want to know where things are made, how workers are treated, how much money they make, especially for young people, this is very important and also especially for wealthy people. Then the production chain, you see, Flavio, we are not worried at all about this. In fact, our production chain, well, the people working there are on average 43 or 44. So -- but obviously, you need to engage with them in a completely different manner. You need to be fresh with them. And what is the problem nowadays to train young people who are willing to work in the production chain. And these schools are really yielding results. You see in the past few years, all the students of our school, they have all found the job. But then there's another thing. You see Flavio, when we go -- how much are we willing to pay the manual workers because there are some humble trades. And so you can -- you must offer moral dignity because if you are a tailor, you're 23 and you make EUR 2,000 a month, and you work in a beautiful environment with the windows looking out, it is different. So the labor conditions are important for the production chain. But as Leonardo Vecchio used to say, who passed away recently. He said, you see, I want to see the production department to see that there are windows. So Flavio, we are very, very confident in this sense. We need to attract even more young people. You must be always polite and nice, and you -- you also need to invest properly. We say it publicly to you, investors and analysts with just 1 or 2 points of EBITDA, you can really change the lives of your workers and especially the people working in the production department, not in the offices. You see your parents are never happy to have the children work in the production department. But this is something we need to change. This is a mindset that needs to change. But luckily enough, this does not affect us well to date. But you should know that we want to work and focus on this. And you see it only requires 1 point of EBITDA to improve their lives. So instead of making EUR 1,000 a month, you are a dressmaker and you make 1,900, everything changes for you and your approach to life changes accordingly.

Next question from Andrea Randone, Intermonte.

2 quick questions. The first one, in retail, how important are private appointments? So we wanted a comment on this from you. And the second question, you have provided all the different characteristics and breakdown of revenues, maybe a further comment on the age of your consumers because it seems to me that young people appreciate the values of sustainability. And at the same time, I wonder how young people approach the brand in Europe or in the rest of the world. Also, given the price of your product.

So as far as private appointments are concerned, nothing too big there because actually, when you come into our Madison store -- at Madison Avenue store, maybe your wife tries on some garments and you have a coffee, we kind of call these private appointments. These are ordinary sales that happen at the store. But what we do is to try and look after these customers in a different way then, of course, there are the personal shoppers of the celebrities. So my daughter and her husband are currently in the West Coast to meet up with the young actors and celebrities, but we can't call these private appointments. What we saw is that there is a great craze for the physical store. Of course, when we decided to have -- to install a bar inside our stores. Well, this way, -- it changes your shopping experience. And then we have the Casa Cucinelli, where we organized private dinners where we invite you, investors, analysts, private individuals, but we can't call these private sales. It's a way of you see pampering our customers. As to young people, the pilot Leclerc came to visit, and he was fascinated by the corporate culture. You see he's 24, he is a pilot. And -- only later did we talk about clothes. But first, he wanted to see how people work and live. You see there is a growing attention and focus by young people on this, and we like this very much. So if we were to say an age, we can say 40, 41, but we have a huge wealth of actors, for example. The other pilots with his wife, George Russell was wearing our brand. So of course, we don't pay them to wear these garments, but they are fascinated by the way we treat people. I think this really makes a difference. You should know that we do not sponsor, maybe if they buy maybe 10 garments, you give them something for free.

Next question from Chris Huang, UBS.

This is Chris from UBS. Congratulations on the accretive growth and outlook upgrade. I have 3, please. My first question will be on top line. As now in the last month of 2022, the market is naturally moving focus to 2023. Today, you upgraded your top line outlook for 2023 to now 12%, which I think is a very positive signal of the strength of the business, especially now against the certain macro and also given your exposure to the [indiscernible]...

Excuse me, could you start again, please? I couldn't follow at the beginning.

Yes, sure. So my first question will be on top line.

Yes, can you start again, please?

Yes. My first question will be on top line. We're now in the last month of 2022. So the market is naturally moving focus to 2023. Today, you upgraded your top line outlook for 2023 to 12%, which I think is a very positive signal of the strength of the business, especially now against a certain macro and also given your exposure to the ready-to-wear category, which tends to be less resilient and a slowdown. Would it be possible to hear your view on what really underpins your confidence in the company's performance in 2023 and 2024? Is that the unique consumer profile the brand positioning or any comments will be amazing. Secondly, on margins. We know that the company prides itself in a humanistic capitalism approach. But I'm just trying to understand your thoughts on margins. As now on the one hand, we see H1 results, your first margin increase, of course, probably due to FX, but also higher mix. And on the other hand, the brand is reaching the EUR 1 billion sales mark already next year. So I would expect some more significant operating leverage to come through, as we benefit more from economies of scale. I think consensus is now assuming 30 bps margin expansion from 2023 onwards. And that seems quite conservative. So any incremental color on that margin front would be very helpful. And lastly, on China, if I may. So the region has been going through very strict COVID restrictions. But also, it sounds like the fourth quarter of this year, you all had positive results in the region. So I guess the question will be now, if China starts to reopen next year, what should we expect for 2023? And are you able to quantify the performance in China in 2022? Any quantitative comments will be very helpful.

Well, about China, Chris, Luca will be giving you a few comments. First of all, we wanted to pay complements to you because you read things about our company, and you are so savvy about it. Then we do not think that we actually gave a conservative prediction or estimate. You are young Chris, but you see since the year 2000 and 2021, we grew by 11%. And since the listing in 2012 and today, we grew by 12.3% between 2012 and today. This is the way we run the company. You see, Chris, you should not think that 30% of '21 is a trend because it comes off the pandemic or 28% of 2022. These are extraordinary results, meaning that they're out of the ordinary. You see, Chris, remember that there is a shortage of goods in the market because there are no manufacturers. So we think that our growth plan of 12% is healthy and balanced. So this is the first answer. Then as far as the operating leverage is concerned, we actually start as a basis to have a healthy EBITDA that should translate into a healthy net income of 10%. Then if there is some operating leverage that's even better. But the objective of this company is not that of working in order to achieve '18, '19, '20, '22 in 3 years' time. You see we discussed this topic a long and hard at the Board meeting today. You see sometimes companies tend to worry too much about profits. And along the way, they lose products, they lose fascination, charm and also exclusivity. We do not want to compromise on that or on exclusivity. Of course, if -- since we carry no debt, we could open 4, 5 stores instead of 2, but what would happen then we would lose exclusivity. So Chris, you should always see this company that you know, that starts from an idea of healthy profit, which is 10% in Italy and not in other markets where you can spend less for maybe your workforce because we are Italian, and we want to stay here. So I wouldn't want you to consider this a conservative estimate because the instinct is you have 38, 30 then 28, next year 20. No. You see the truth be told, and now Luca will answer on our performance in China, what we envisage for that. But you see, we do not see any slowdown in absolute luxury. We do not feel it for ourselves and no for the other beautiful brands. So thank you for your understanding. Luca?

As far as China is concerned, Chris, yes, we expect a positive fourth quarter in China. And I have to say that taking a look at the coming developments, we consider time as a great ally in our development project. As far as the weight of this market in the coming years, we realistically envisaged that it could grow by 1 percentage point a year, and I have to say without wanting to force growth. And by that, I mean that we have no plan to try and improve the notoriety of our brands. Instead of that, we want to opt for a deep knowledge from our customers more than being famous to them. I had to say that gradual growth has always paid off for us also this year where sales did not at all -- were not impacted at all by the natural turbulence of the pandemic. So we envisage a linear development of our business. We envisage to have still the very same idea of taste and value so that we can gradually grow this market over time. And we will close the year with a good growth in China. But you see this is 13% of our total revenues. We wanted you to know that.

Yes. Can I just go back to your first question because I think it sounds like it didn't come through the way I want it. My question was on -- because you upgraded your guidance, your top line guidance for 2022 and 2023, so what I wanted to know is can I hear your view on what's really underpinned the confidence in the company's outperformance in 2023 and 2024. It's probably maybe, I don't know, the consumer profile, the brand positioning or the growth strategy. It's more about to understand the driver behind your confidence in growth for the next 2 years.

Well, Chris, confidence is pretty clear to explain. Last year, we won a very important award that makes a difference. This year, yet again, another important prize, which means that if you are presented with that kind of prize that means that your brand is healthy. It means that the taste that you are proposing is exactly the taste that is now working the most. So we received this award in 2021 for menswear and menswear is performing very well. So -- and because this is a special style way of tracking in the world. And for example, for menswear, there are not many brands that are able to design elegant polished refined taste. Not many brands around doing that. So for us the brand is extremely fit and healthy, which does not mean that we should achieve preposterous growth, but we are very confident, I say it again. And still on China, I think that China for us for the coming 50 years for everybody, it will be ranked first and foremost because as Luca was saying, to start with, they bought accessories. But now that they travel, they want to wear international garments, also wearing beautiful, high-quality daywear. So you want to buy a beautiful suit, a beautiful shirt because when you are at the airport, that's what you want to wear. And we feel this very strongly. We feel it from the young journalist, the direct Editor in Chief of Vogue China came to visit, 26 years of age. We had dinner with her, and they have such a great vision of sustainability of the way in which you should really look after things.

No other questions for the time being.

Very well. So thank you, thank you, immensely and best wishes, seasonal wishes. And hopefully, this year, we can close this special 3-year period due to the pandemic. Best wishes and Merry Christmas, happy seasons, happy holidays to everyone. Goodbye.