Dexelance S.p.A. (DEX.MI) Earnings Call Transcript & Summary

Welcome to the Dexelance 9 Months 2025 Financial Results Presentation. Before I hand over to your host today, please be advised… [Operator Instructions] I now have pleasure handing over to the CEO, Andrea Sasso. Please go ahead, Andrea.

Thank you. Good afternoon, everyone. Let's go to Page 2 of the presentation. where we can see that in the 9 months sales are around EUR 20 million in comparison with last year is minus 5% from an organic point of view. Then if we are talking with the consolidation mode, we achieved EUR 273 million sales that is plus 18% versus last year. When we are talking about profitability, still impacted by unfavorable effects. And 2 of them we discussed during the presentation of the half yearly report. It means 2.1 percentage points due to the unforeseen events and also 1.2 points due to strategic investments. Then we to 1.4 percentage points due to the luxury slowdown that was positive 6 months of the year. But the main reason is that due to the postponement and even the cancellation of the store openings of some of our important clients. You have to be noticed that we are not losing any single point of market share. This kind of openings, I mean, still are not moving to some other supplier, but I mean, some important customer even canceled because they are thinking also to reduce some of the number of stores that we have through the other world. Talking about the full 9 months adjusted net income, we are talking close to EUR 3 million sales equal to 1.1. Talking about the net debt is around EUR 76 million that is growing to EUR 152 million, including and then EUR 191 million, including the IFRS 16 principle. But then Alberto later on will go more in details. Please, Giorgio now your time to speak.

Thank you, Andrea. Good afternoon, everybody. Now we have prepared for you move to Page 3, it's just a short selection of those activities that our company put in place in the third quarter, both on the retail side and on the project and soft corner side. Once somebody said, when the going gets tough, the tough get going, market is not supporting us, and we are accelerating in terms of number of activities that our companies and our team in each company is putting in place. This example here is Turri. Turri basically, as you all know, I think, is a company with a twofold purpose. On one side, there are a retail well-known and well-reputed brand. And on the other side, there are a subcontract bespoke kind of supplier. On the retail branded side, we performed this year the relaunch of the brand new brand image, including new logo, new product connection, new way of presenting both in the and in the flagship store downtown Milano in [indiscernible]. In order to follow up with the start and the new brand positioning that we kicked off, performed kind of road show in China, knowing that China is the most important market coming from the part of the Turri brand. And basically has 3 presentations in 3 different cities with the 3 stores that they have in China. Basically, the good news is that the new brand, the new style and new positioning of the brand has been pretty much welcomed by the retail and architect community. So we have expectation that the relaunch that we have in Turri on the retail side is going to continue. Page 4, another important event involving our Meridian brand. You probably know that Merani has a flagship store downtown Paris -- we did an agreement with another important Italian brand, Free, where basically we furnished their flagship store just in front of the Palace and they basically decorated the Median store with Fe product. They have organized a huge event in the front store and then we exchanged with another store. And nowadays, we are exchanging customer one another, bringing already this year to quite positive sales result of the Median flagship store in Paris. If we move to Page 5. One of the last companies and brands joining our group, the outdoor specialist. Ra is pretty much active in the yacht business by supporting and furnishing with the outdoor sofas chairs, tables and other furniture stuff. They participate to the 3 most important European events in the yachting industry [indiscernible] , the Genoa and Morocco, [indiscernible] with quite good success presentation. Page 6, another brand in our portfolio, Gamma. Gamma is as much as is another brand pretty much exposed both to the Chinese and to the North American market. In China, after having opened all of our store a couple of years ago in Shanghai and another one in Wuxi, kicked off this year another MOHD store in Xi'an. Also in the case of Gamma, we are relaunching the brand with some new initiative in order to reboost the confidence in our, first of all, retail partners and ultimate growth in the end consumers. And this opening in Xi'an is a good example of the path that we are undertaking in order to rest the brand and regain the level of sales that Gamma used to experience in the past in that market. Coming to more commercial stuff, Page 7 in U.S. in New York, Meridian furnished a kind of up apartment in a high tower high skyscraper promoted by one of the most important l real estate developer in New York. But on top of that, we also opened a couple of shop-in-shops in San Francisco and Boston that just started last month enjoying the first sales. This is a more retail connected part. I forgot to say that real estate in New York will come sorry. Page8, Again, we just opened in September a MOHD store downtown Tokyo inuyama owned and managed by, say, a long-lasting partner of our group called [indiscernible] . It's a historical partner to the Gazi brand that decided to undertake also the Merian venture by opening at the same time this MOHD store downtown Tokyo inuiyama 2 shop-in-shops in Osaka and Nagoya. We just opened them. So we are expecting and waiting to see the kind of sales result that this brand new spaces will be able to generate. Page 9, the real estate project I was mentioning before. basically one of the most important luxury real estate developer called Global Wealth Office developer is about to sell a huge number of apartments. We furnished the apartment and it by using almost all of our brands, and some other stuff. The idea is that by this display, the real estate developer will be able to sell the other apartments as many times as possible, fully furnished with our group. So it's a kind of investment that should generate a return in the first and second quarter of next year. Coming to some projects moving to Page 10. This is just a selection of a few of the furnishing and lighting projects that we have done in Q3. In Page 10, you see in downtown Athens, the Grand Hyatt Hotel, 5-star hotel, the outdoor and partially indoor part has been all the have been provided by the contract brand of Gervasoni. I don't know how much familiar you are with this brand, but basically, it's a brand of the Gervasoni that is totally devoted to this kind of soft contract or important supply to other residences. Page 11, another interesting project by Gervasoni. In this case, they fully furnished this 19th century well-known that is going to be kind of flagship brand in other project like this. Last that's all. We have shortened the list of the project. We move to Page 12, and I leave the floor to Marella.

Thank you, Giorgio, and good afternoon, everyone. Please note that the numbers we will see in this slide and on the following 2 slides are 2024 considering the old Dex perimeter, so excluding any mode effect that we started consolidating in Q3, while 2025 numbers are pro forma. So they are benefiting from the consolidation, both in the third quarter numbers and in the full 9 months numbers. This is clear here in the breakdown by SA, where you see that there is a new business area that has been created called omnichannel go-to-market. The 9-month revenue of Mall amounted to roughly EUR 53 million, recording single-digit growth with respect to the same period in 2024. Organically speaking, so talking about the other business areas, as announced and as already commented by Andrea at the beginning, after the still strong first half fueled by the 2024 order backlog in the third quarter, luxury contracts started a slowdown, shining a sharp decrease of roughly 30% year-on-year. This is due to the client more conservative approach towards refurbishing and new openings. And of course, this is the result of both the market cycle that the world of luxury is experiencing as well as of specific factors connected to the internal reorganization that some of the key clients of the group are experiencing. We, therefore, expect another negative quarter in luxury contracts, also due to the tough comparison from 2024, which will remind that luxury contract in 2024 started the strongest quarter ever in Q4, leading to an overall double-digit decrease in the area in Q4 with respect to last year record performance. And considering current order backlog, we believe that the area will also have a weak start going into 2026. With regard to residential business, Furniture recorded another negative quarter, closing the 9 months, down almost minus 13% on 2024. This is a combined result of both weak market conditions in retail as multiple times commented that are affecting more or less all the companies and a slowdown in the soft contract channel, as we will comment in the next slide. This trend is, however, partially compensated by the performance of Lighting and kitchen, which despite the slowdown recorded in Q3 with respect to the active state in the first half, confirm progressive healthy growth of respectively, plus 2% and plus 7% in the 9 months year-on-year. In particular, the third quarter in Lighting was down almost 10%, which is, in fact, less than EUR 1 million decrease, mainly due to a weaker backlog in projects coming in from the previous quarters in the U.S. when the currency introduction created some uncertainty for longer-term orders as they are -- as projects are. So going to Slide 13 and commenting the breakdown by channel, we can see that in the third quarter and as a consequence in the 9 months, positive performance is shown in both retail and subcontract, and this is driven by Meridian consolidation. With a reminder that the company is generating roughly 65% of its revenues through design projects here included in the subcontract channel and the remaining 35% through online and offline high-end design distribution, namely the proprietary e-commerce platform and the 6 directly operated stores, which are here included in the retail channel. Organically speaking, retail was single-digit negative, both in the third quarter and in the 9 months. This is in line with the trend that we had in the first half of 2025. While soft contract was strongly negative in the third quarter, partially in lighting, as previously commented, but mostly in furniture due to the longer lead times that we have -- we are experiencing in project confirmation, in particular, in luxury cruising and in residential end markets. But overall, organic soft contract will be down almost 10% in the 9 months. High contract perfectly comp with the luxury contract, so it's already commented in the breakdown by business areas. Going to Page 14. and talking about the breakdown by geography by different regions, we will comment directly the results for the first 9 months. And we can see that Italy closed up 8% year-on-year after a weak third quarter. This has been the result for -- from some shift experienced in luxury counter projects. Organic growth in the domestic market has been recorded on the other hand, by both lighting and kitchen companies. Europe, up overall 19% excluding contribution would be in line with 2024. And that's thanks to the better performance of residential business in southern countries like France and Spain, which partially counterbalanced the overall weak conditions of other key markets like Germany and Switzerland that since the beginning of the year have been having a negative -- some negative trend. North America, despite all the tariff dynamics, closed single digit up also organically speaking. Of course, the number we see here plus 29% is the result of contribution. This is because of the good performance that residential businesses are recording in both Canada and U.S. and some positive signs with respect to these are also coming from the local -- group local commercial subsidiary that we have based in New York, which keeps growing year-on-year. The current tariffs have been confirmed of 15% with a net retail impact of roughly 5%, which we believe is manageable in terms of price elasticity. Of course, we hope that no further measure will be taken on our product categories in order to progressively reduce the level of uncertainty that we have been observing in the past quarters from both specifiers and retail partners, and we will need to monitor carefully the evolution of the situation. Rest of the World, up almost 12% in total growth will be negative if considering only the organic perimeter, and this is the result of mostly of the slowdown in residential soft contract projects in furniture that we commented before. On the contrary, in the rest of the world, there is a strong contribution from some luxury contract projects, some important luxury contract projects that we have in Japan and the United Arab Emirates, where there has been a couple of differences in 2025. China remains weak and challenging despite some few positive signs coming from recent openings and events like the opening of the new group headquarter in Shanghai in June, but also the activities commented by Giorgio from Turi and Gama and the continuous work and effort that the local team is doing in order to catch more and more opportunities in the area. And going to Page 15, I will leave the floor to Alberto.

Thank you, Marella. Good evening, everyone. In this page, we can see the profit and loss about revenue in the first 9 months 5% less than last year with the same perimeter. If we consider the last acquisition with impact from 1st January 2025, full year revenue are EUR 27.8 million above 18% compared to last year. Adjusted EBITDA is EUR 2.9 million 8.4%. EBITDA percentage difference between 2025 and 2024 can be explained in 4 points: one-off cost related to 2 soft contract projects, 2.1cage. -- project shift and client mix in some contract projects 1.4 pp, increased strategic commercial marketing expense and personnel structure improvement, 1.2 pp dilutive impact on the margin variation, 0.6 pp. The organizational and commercial strengthening program was completed, so no further increase will be expected. D&A are in line with the last period. Adjusted EBIT is EUR 10.6 million, 3.9% and adjusted net income is EUR 2 million, 1.1% of revenue. In the following page, -- on the left, we can see the cash flow change in net bank is mainly due to the change in net working capital and acquisitions. Net working capital is higher than the previous year-end figure related to a limited increase in inventories, a limited reduction in trade payables and lower trade advance payments, partially due to slowing down project. Acquisition referred to [indiscernible] in the last quarter generated a net cash out of EUR 41.2 million and payment of minorities of EUR 10.2 million refer mainly Flex Lighting. CapEx are EUR 7.4 million improvement in industrial buildings and machinery. They are part of our CapEx plan that will be implemented with flexibility over time. On the right, the increase of net financial position without IFRS 16 effect of EUR 152.3 million is mainly due, as I said before, due to the acquisition impact on one hand and change in net working capital on the other hand. You want...

Thank you, Roberto. Okay. Let's go to the last page of the presentation. So from the point of view of the organic growth in the residential sector, we have a small drop in order intake. which with the mod become double-digit positive naturally. Luxury contract is also seeing a drop in orders for the third and the fourth quarter, as already announced from Marella, which will bring total sales in this sector to around EUR 70 million at the end of the year as we already announced during the first semester. For 2026, we think that luxury contract will settle at this level, including the decline of some important customers. It means that we are recovering with some other customers. And you know that in this special sector, we have visibility store openings in the next 12, 15 months. So we can say now that I mean, in 2026, the level of sales could be around 2025 and then we hope to recover the situation because new customers are coming and some of the old customers that we never lose, they start to open and to modify the fantastic shops and stores. Talking about the residential sector, I mean we see also some positive signal that's already been seen in this sector from some of our customers. So it means that we are thinking that the market could start to resume growth starting from a single-digit growth in residential areas. And naturally, we think to follow to be, I mean, such a positive understanding that we have. So there are also some positive things at the end of this year from a market point of view in the residential. I mean luxury contract particular luxury contract where we have, I mean, still some important customers are thinking not to do new stores, but even to cut some of our already. So thanks for listening, and now it's time for Q&A.

[Operator Instructions] The first question today comes from Carmen Novel.

I'm Carmen Novel from Banca Akros. I have a quick one on profitability. Given the current market conditions, especially regarding luxury contract, of course, can we expect in 2026 some cost savings strategies for 2026 or for the next quarters? And then my second question is about your statement in the press release on potential waivers. I don't know if you can give us some more details on that.

Thanks, Carmen. Okay. Yes. I mean for sure, we already start to see if there are some possible savings in terms of cost. As you know, in the last 2 years, we are investing a lot in people and also in marketing and commercial activity, some mobile but not only. And you have seen following us in many presentations, especially what Giorgio was showing even today that we are very active on this point. And we believe that despite the market condition, I mean, we do the right job in terms of visibility of our brands in terms also market share in the residential above all sector. Then the result of profitability this year, unfortunately, is due in 2 main companies. One, due to the fact that some key customers in luxury contract, they stop or they cancel or postpone, I mean, the opening stores despite they are not choosing any other suppliers. And then we have the famous unforeseen event in one company, I mean, in the residential area where, I mean, we are affected for a couple of projects that will be one shot that we are recovering next year. So despite these kind of things, I mean, we are thinking also to stop, for example, to cancel some stores that we open in Central where I mean, we don't see an immediate coming back of profitability. You know that when you manage the stores as a DOS, sometimes it's a kind of advertising campaign more than a profitability point. And then in some parts of the world, I mean, we are already thinking to do some savings from this point of view. And then I mean, even talking about some fares, including Mobile, we want to be there naturally, but then we will be very careful many important brands that they will not come. We are thinking that for companies of our dimension, despite that we achieved more than EUR 300 million sales even more this year. In reality, you have to traction this kind of sales company now. So it means that for this dimension is viable to be there, but we can do in a more economic way. These are the main actions that we are taking -- then with regard to a question onto... Yes, about our financial covenant, we are talking to the banks to get the covenant waiver before the end of the year. And we think we will get the waiver.

The next question comes from Vandita Sood.

I just had 2 questions, please. The first one, I don't know if you -- I know you gave the margin impact of Mode acquisition being dilutive. So when I try to work it out, it seems like it was a EUR 3 million to EUR 4 million contribution in your results. Is that -- am I kind of right? Or if you can help with that? And secondly, you list out always a lot of projects, which is really nice to see it sort of come to life. But if you could pull out maybe 1 or 2 things that you're most excited about, which you think is something you're doing different from before or which will sort of be margin accretive? Or yes, just keen to hear what you're most excited about.

Regarding your question about Mall contribution to the group margin. In fact, so the company is contributing to the EBITDA of the group for roughly EUR 5.5 million. And in this sense, it's not dilutive if you look at the first 9 months results, but it's dilutive if you comment on the percentage change that we had looking into the 9 months 2024 numbers and the 9 months 2025 numbers. So if you look on the percentage point change between the 2 years, of course, being less than we had 13.9% EBITDA margin in the first 9 months 2024 and 5.5% on the EUR 53 million that Modi generated in sales less than 10%. Of course, it has a dilutive effect in the change, but not in the 9 months results. I don't know if I answer that, if it's clear if I answered to your question regarding this.

Yes, perfect. So it's EUR 5.5 million contribution to adjusted EBITDA for the 9 months.

Exactly which is less than more or less, less than 10% considering the total sales generated by the company in the -- and regarding the second question, I think that, for example, the initiatives that Giorgio commented before with the New York-based real estate developer is one of the opportunities that we are really looking at for the development of the business outside Europe because if you think about the distribution network in Europe is mostly based on retail partners. So having the chance to get into a new retail partner is tough, especially in this moment where the market is quite weak because it means for them to invest in your brands, in space and buy your products to dedicate space to your layout. So it's not that easy. While outside Europe, distribution is quite different. It is somehow also more concentrated. And we think that the real upside may come from initiatives and partnership with developers like this one in New York. Of course, getting the credibility and the brand awareness for this type of initiatives is not that easy. It's not coming in a minute, but it's also that type of thing that comes to -- if it starts, may definitely bring some interesting results for the different brands because it's also a multi-brand initiative created by...

One side of the coin, like the one you saw in New York, you invest money this year in order to get a result in sales at least the year after because real estate development projects normally have quite a longer lead time rather than sales. So in this respect, I mean, we have a negative in year 1, we have a positive in year 2 to make it simple.

By the way, I mean, these kind of things and activity that we do in North American market it during this year despite the various announcements in the custom duties to be positive in the U.S. market in the residential sector. So I mean, despite what happened until now, I mean, we have a positive sign in this market organically and also you can see with the more consolidation even more. So I mean, until now, as we already said to you, the North American market is vital for us, important, and we have a positive sign in the business.

The next question comes from Paola Carboni.

I have a few questions. The first one is on the performance of the luxury contract business. You made the point that clearly, you are trying to compensate the lower business with the clients who are downsizing their opening plan with new clients. This is something you said also in September. We know that usually new clients are less profitable, but I was wondering if you can share with us some color on the possible ramp-up curve, let's say, you usually see or you expect with this new clients in order to approach let's say, healthier profitability for the luxury contractor business regardless, let's say, of the lower business with some of the past existing clients. Another question, sorry, is if you can give us some comments on current trading for the residential business. And in particular, if you can come back on your previous message, if I got it right, that you are seeing some positive sign at the end of this year in the residential segment from a market point of view. So if you can elaborate a little bit more on that. And -- another question is possibly on -- just a clarification, if I may, on your comments about the possible savings for next year. I was wondering whether your comment on store opening was indicating, let's say, the stop of some new projects or rather some closure, sorry, just to be clear on that. And if there are other, let's say, other areas apart from marketing you have mentioned where we might see some more efficiencies.

Okay. Paola, let's talk about the luxury contract. Your question is quite complicated to answer because I mean, in terms of profitability are not only the profitability of single customers, but also the mix that we can have. This year 2025, we are impacted from mainly one big, big -- I mean, of our customers that decide to stop, I mean, some openings already planned some was postponed in 2026, some already canceled. And you know that having in particular in one customer, a lot of relationships within 10 years and so on, I mean the profitability was bigger just because we are doing always the same things. When we are recovering the business with some other customers, the profitability is lower, you're right. But on the other hand, what happened, I mean, keeping the around EUR 70 million in 2025 and 2026, the profitability that you will see in 2025 will be lower than the profitability in 2026 because one company in particular of our 2 will be impacted quite heavy this year, losing just one company is losing around EUR 20 million sales. You understand that the fixed cost you have when you have a sharp drop in a year is impacted a lot. So the profitability of this company this year in terms of EBITDA will be not breakeven even slightly negative. So it means that in this company recovering with some other customers possibility to have again a positive EBITDA next year. So I mean that's the mix that we will have during the. So for 2026, despite the same, I mean, level of sales in luxury contract, 2026 EBITDA will be better than 2025 EBITDA.

The good news in this respect, Paola, is that company that Andrea mentioned of our 2 companies in luxury contract basically this year experienced on one side, this sharp decline in sales to this most important customer. But at the same time, they already experienced this year with some of the new customers that we plan to give more relevance in '26, they already experienced this year the development of the store #1 and in some cases, [Audio Gap] also store kind of businesses. Therefore, [Audio Gap] customers in personal jewelry and fashion has already been done this year. That's why technically speaking, Andrea mentioned the fact that at comparable level of sales overall EBITDA is going to be better in '26 when compared to '25 because the cost of the start-up has already been undertaken by this company. About current trading, what Andrea said before, actually, what we experienced is that definitely in the last 1.5 months, we just got some, let's call them weak signals from some of the most important markets, not all of them, but some of the most important markets that also the retail business start -- seems to be starting recovering a little bit. customers, retailers in China, in U.S., in South Europe, U.K., not that much in Central and Northern Europe, as said, that were even refusing to sit down this year to discuss about long-term projects about investment since after the summer break, I would say, they have started sitting down for discussing these kind of things, which does not mean that we have a clear, stable and fully trustable understanding that is turning into positive, but we have kind of got feeling that '26 could be a year where the overall retail market could come back to a low single-digit growth, let's say. We are just -- we are still in the area of the weak signal to be clear. So we don't have a real number of signals that we capture and we gather from all over the world in the Positivity.

With regard to, I mean, the selling cost, Paola, that we are mentioning about the closure of some shops you understand well. I mean, especially it's too to indicate, but especially in Milan and in London, where we have more than a London, we are planning to close do in U.K. and one in Italy also. So one in Milan and one in London because, I mean, recognition of brand visibility and so on are quite enough. And then after 2, 3, 4 years that we start to have more and more doors, I mean, that's the time to do some selling from this point of view. Then we are acting not only in closing on these 2 doors, but also in some other areas...

And in some cases, we are -- this process is taking a little bit longer time because we are trying instead of fully closing some of the stores that Andre is mentioning to give them to a third party in order to manage them. So if we can avoid to close the store and to take down the standard on the brand, of course. But there are areas the 2 that Andrea mentioned, where having a third party managing -- running a store professional retail third party is far better than having a direct store.

So we are working on a couple of possibilities in this respect in order to have some savings, but preserving level of sales and brand visibility. Exactly. So the example is showing us that that's the way...

Very clear -- just a follow-up on the previous answer about marketing investments. Are you, let's say, to some extent, prioritizing some brands or some division versus others? Or would be quite a broad-based, let's say, downsize of your efforts, let's say?

Some simple fine-tuning. I mean we want to participate to Mobile, but we want to save some money there. I mean, despite that all our companies will be there, but we don't need any more to build the capital when we are there. So I mean, we are planning to do some different spend with high visibility of our brand, but in a more economic way or simply we are not participating in the of the world. I mean we want to be selective in this approach. Then in terms of, I mean, commercial activities and marketing activities, this is not a sector that we are investing a fortune nor the sector nor us, but some fine-tuning in that area could be -- and it's fully explained in all the world nat.

The next question comes from Arturo.

[Technical difficulty] I have a few questions, if I may, on actually on your debt side. I would like to know how much is basically your RCF? Is it fully drawn? Is it not fully drawn? That will be the first question. I'll take them one by one.

Sorry, Arturo RCF?

Yes, your revolving credit facility, is it fully drawn or is not fully drawn yet?

But we don't have revolving.

You don't have revolving credit facilities? Okay. So to look at it in another way, you asked for a waiver. Clearly, you had 2 lines, which were going by memory impacted. It was UniCredit and GDP going by memory again. Perhaps you can remind us which is -- which are the covenants on these 2 lines? And what are the covenant levels that you are actually working on?

Our covenant with UniCredit and deposit is 3x debt and EBITDA. we think that we want to respect this covenant. So we ask for something more 4.

Just to better understand, is it a 5x net debt to EBITDA or...

Closer to 4, closer... More than 3, getting closer to 4. And this is specifically to 2025 covenant.

Is higher because in our -- because this impact is due to on the one hand, the acquisition, especially the acquisition mode where we have effort. And on the other hand, the impact of EBITDA this year. So in our plan in 2026, we will respect the covenant of 3x net financial EBITDA... So basically... We consider the issue for this year.

Only for this year. So you should go back to 3 at the end of 2026. Is that correct?

Yes, correct. Our expectation is we expect the covenant in 2026 of 3x, yes.

Okay. Can you remind us which -- how much were the advanced payments in luxury in 2024?

We had a difference more than EUR 12 million because last year, we had a significant impact of new orders at the end of the year. And for this reason, we received million payment. This year for the reason that my colleagues said before, the intensity is different. So at the moment, we have less than EUR 12 million compared to last year.

Considering the same...

Okay. I presume the MOHD acquisition will be involved in the covenant of 4x. Is that correct?

MOHD has a big impact because obviously, we don't buy a company 3x EBITDA. So the impact in the year of the acquisition is a negative impact for the company . We pay also the full option for Flex Lighting, for example, and then also for the 25% of R.

Given that the current results, can you remind us whether there should be any impairments on the assets that you fully own at this stage?

About [indiscernible]. We will see.

But we are still in the process of creating the next 3 years plan. So we are working on it.

Now we are working to complete our 3-year plan. So at the end this month, we evaluate the correct... And usually, the impairment test is performed at the end of the year. But at the end of the first semester due to the one-off extraordinary event that this company has been experiencing in the first half of the year.

We -- on a comm base, we did the impairment test before and decided to do the impairment and that's more or less what we had to do for the full year 2025. And at the end of the first half, we don't –

[indiscernible] we didn't have other issues on the other companies, but only in one company.

Okay. How much did we spend or you spend in marketing this year in the 9 months, including Salone del Mobile, if I may?

Between 4% and 5% of our revenue is something more last year, but a reasonable level in our market.

And that could be cut a couple of points next year?

Absolutely not. It's not necessary. But we do the fine-tuning as already. Consider that this 4%, 5% includes many things, also commercial things, not only is a very small fraction of this amount of money. The bulk of the money has to do with the other players with cat commercial expenses all the trade expense. You can be smarter in handling this kind of cost, I'm sure you cannot.

So basically, if I understood correctly, next year, EBITDA should be normalized by the negative impact in luxury that you have this year. Would that be a fair assumption?

Most of all, then it should be -- it should benefit from the reabsorption of the negative impact that we had in one company in Furniture that had some problems with a couple of projects that incurred -- made us incurred in almost EUR 5.5 million of extraordinary costs that are expected to be absorbed in 2026. Then as previously commented, the margin to improve margins also in luxury contracts despite will be not reaching back the 2024 levels in terms of revenues because of the reasons that Giorgio commented before. But the big impact of reabsorption will be from the furniture company that has a progress with the contract projects.

Okay. One last comment, if I may. With regards to working capital, how should we expect the working capital as we move forward towards the end of the year? What do you expect? Do you expect any absorption, some releases? Given the fact that the luxury contracts are lower, should we expect a lower working capital? Just give us a bit of sense, if I may.

Expectation is something especially on trade payments of our suppliers and maybe inventories and trade receivable may be the same. And payment at the moment, we can't say anything because we don't know what exactly could happen about new orders. So our expectation is an improve, especially in trade.

There are no further questions. I will now hand back to the speakers for any final comments before bringing this presentation to a close. Please go ahead, Andrea.

So simply, thanks for listening us, and see you next time. Thanks a lot.

Thank you. This presentation will now come to a close.