Elica S.p.A. (ELC) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call operator. Welcome, and thank you for joining the Elica First Quarter 2024 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Giulio Cocci, CEO of Elica. Please go ahead, sir.

Thank you. Welcome. Thanks for joining our quarterly call. Let's go directly through the agenda, new formats, new colors, [ simply that ] colors of our new brand positioning of Elica, which is an important part of the -- important investment that we are putting in place to change the, I would say, the business model, the approach, the perception and moreover, the attitude of the company. We will quickly go through the result highlights, not only our 2024 plan, but what is the context and what is vision of these plans [ are into ]. If you move to Slide #4. Quarter highlights. EUR 117 million net sales, meaning an organic drop of 8.5%. So below the double digit that was a mantra, I would say, starting from the second half of 2022. This doesn't mean that the market is better because the market, and you will see later on in the presentation, keeps on being negative. I would say, it is worse than in the previous year in North America, with a strong pressure on all product categories and with a strong pressure [ on both ] divisions. What we see instead is a positive contribution, mainly in North America, driven by OEM, but mainly driven by the new distribution strategy that we implemented last year. So what we see, the takeaway is that the project that we started [ up in ] [indiscernible] and we will see the numbers later on. Motors division is comparing, probably with the best quarter ever, not only for our division, but for the sector itself. I followed yesterday a comparable quarterly release where the message is for sure that the comparison is not favorable, but moreover, there are a lot of question marks in terms of regulation that are -- that need to be clarified in order to relaunch the sector. On the other side, what we see is a constant growth of market share and a lot of projects that we are starting to codevelop with some of the key names in the sector. So the outlook remains in the midterm, exactly how we shared in the previous conversation that we had together. Margins are under pressure, and we will probably remain under pressure. Adjusted EBIT is roughly EUR 2 million, 1.5% revenue, so with an important drop versus last year. We were expecting that because the volumes are weak because the pricing, the promotional environment is even worse than it was last year and because despite this, this is a [ newer ] investment. This is [ a nearing ] which the priorities are to add new products, new tools to our product offer to drive the rebranding, to complete the direct distribution, that is the site is already paying [in back to us ]. We started it from September, October last year. And of course, we need to respond in some markets to this promotional environment because we want to defend our market share, waiting for the market to come back. In this scenario, our net financial position remains more or less like it was at the end of 2023, which are good news because there is a negative seasonality that we have offset through, I would say, an intelligent management of managerial working capital. At the same time, to support our midterm investment strategy, creating also some free cash, we have signed a EUR 70 million new loan that Stefania will describe while discussing about the net financial position. Again, a quick summary. Difficult market momentum that goes on since, at this point, almost 2 years a good reaction. The plan is going in the direction that we expected. Moreover, some positive signals are already starting. If you move to Slide #5, these signals are a progressive quarter-by-quarter revenue increase in both of the divisions because if we say that quarter 3 2023 was probably the worst quarter in the last 2 years, where together with the cooking market drop arrived -- a strong stop in the heating sector that affected our Motors division, regulation, high rates, high inflation, very low real estate transaction. What we see is that project by project, share gain after share gain of EUR 2 million, EUR 3 million per quarter, we are approaching the EUR 120 million. Quarter 2 outlook that we put in the slide seems pretty solid, despite there are some situations that represents a risk frontside. So very weak Cooking in German and French market, but I would add also in Italian market, it needs to be understood. But some other opportunities coming mainly from OEM and coming mainly from North America, but also the Motors division. So the trend is slightly recovering and the good thing is that it's recovering through projects, not through market dynamics. So the things that we are doing are working. This is the message. In a scenario that is still very bad, but that we expect in the midterm because this is a midterm roadmap to improve. And our priority, this is why we are insisting so much with the word investment that myself coming from finance, not always likely to say. But it's -- we want to be ready for when the growth will come back because it will come back. Now, if last year, I was getting a mortgage, I would have been paying 5%, 5.5%. Today, I'm already in the region of 3.5%. So the housing market fundamentals are starting to stabilize. Now, in this time, it will take time. It will need some fresh move by the Central Bank, but the direction necessarily is that one. At the same time, and I also saw in Whirlpool presentation, there is a structural undersupply for what concern the leading sector of new houses that is in the U.S., but it's also in Europe. Basically, supply -- the undersupply was also probably the main factor for the resilience of the housing prices, and this especially in the big urban cities where the demand is already more than the offer. This is also coming from the fact that new housing prices are still growing. Again, the overall situation [ and here I mention ] Europe, of the European economy, despite the last 2, 3 years were tough from its perspective. It's positive in the outlook. 600,000 new jobs, wage growth accelerates and we see also in some countries even too much. But the perception, the outlook, that doesn't -- it's not even included in our estimate, is that there is an opportunity that sooner or later will come, and we want to be ready to catch. Why I'm moving from quarter 1 to the next future because we still believe that our vision will work. And we believe that the projects that are behind our strategy are the right one. This new rebranding, this extraordinary cooking strategy, so Lhov for the full new range for the kitchen, the new cooktops for U.S. market in a larger product range, we want to have Elica completely different from what it was before when things [ were set back ]. Same for Motors where there are some opportunities that are not in our revenues, but the project, the assembly lines are already there, ready to deliver. The distribution is already growing in a market that you will see later on in America [ it might fit ], okay? So what we are doing with the distribution, what we are doing with the Arietta brand that will allow us to be stronger and more independent also in the big American chain we work. It's already partially working. But again, we are seeing a step-up phase. Same for what we see in our Motors division. Now, Motors division in this quarter is still suffering. A very less demand and a very huge customer stock, but we see that the performance is absolutely better than our comparables. Why? Because we're gaining share. Geographic expansions. We are doing the same boots on the ground products, so our people, our priorities, our products also in Netherlands. Why? Netherlands is the second market in Europe for [indiscernible]. And we were not there if not with indirect customers, we want to manage where there is [ activity ] and sales for [ also some ] models with some big customers, we are developing products in order to approach using, of course, their brand, the American market. That was an opportunity not taken so far. We see a positive performance, we will see later on OEM. OEM are a key part of our business. They have the 40%, we are more and more, and we will be even more a brand company, but OEM feeds the factory. And the factory that is [ feeded ] it means that it's a competitive factory. So this helps OEM as the whole group, but there's also the branded product competitiveness, so our margins. Same is happening for Motors. And of course, we are an innovation-based company. So scalable innovation is the mantra for the next future. Induction growth in the U.S. We started to have the first sales, not huge, but it's the first one of induction hobs produced in Mexico. The internal development of electronics becoming more and more a cooking company, which is Lhov, which is very much electronic product means competitiveness and means drive of the main features of the product. Same for [ developments in models ] when we understand that our solutions are good for the boilers, are good for the heat pumps, of course, homologated for hydrogen that can be used, and this is what [ we have in filtration ] also for the other domestic air movement systems, especially in Northern Europe are becoming, I would say, an interesting business to look at. These projects on a flat market allow us to believe in a midterm vision of an Elica coming back above the EUR 500 million revenues and with a margin above what we scored in 2021 and 2022, but with a completely different content in terms of products, in terms of geographies and in terms of, I would say, power to grow in our specific sectors. This without considering what we see as upside potential, first of all [ a positive ] market. Sooner or later, this should be a plus. Okay -- but also accretive M&A, our leverage is low and will be lower. So there is space when we've found the perfect partner to do something together. The induction acceleration in U.S., the dynamics will be the one that we have seen in Europe. In Europe today, induction versus gas is in the ratio of 25% to 30%. In some countries, it's 45%. In U.S., it's 12% in that space. There is space in the logic, the sustainable path, the electricity pattern, will be the same transformer trend, that's the direction it [ spans ]. Same story, American market and the incentive strategy that sooner or later, the European Commission after the election, after the new European government will be [ formed ]. It's something that we do not count in sharing these figures with you. But we know we can. Why? Because there are at least EUR 4 billion or EUR 5 billion investment, only in the heating sector based on these stats. So somebody will write it up and then we say we need the money. Otherwise, the story of the [ zero ] is -- yes, of the net energy impact is a huge [ space ]. Let's move on. Let's come back to quarter 1 2024. Stefania?

Good afternoon to everyone. Moving to the next session related to the industry trend starts from Slide #9. So we have really said that overall, the situation, the dynamics have not changed. Here, you have the market for the European countries started from cooker hoods, excluding the Russian market. As you can see the Q1, the market is still negative for [ 9.7% ]. With some important countries, markets like France that are the second market in terms of size in Europe, still has recorded a negative double-digit loss versus the last year. So overall, for cooker hoods, 2 years of consecutive negative market demand. Well, in the first part of 2020, the impact in terms of net sales was not so relevant. Thanks to the fact that was a period where all the company was really in a price [ increase ]. But now the impact of this market demand negative is more relevant. It's more affected the trend of the net sales since we are facing a very aggressive promotional market activities. In the below part, we had the trend of the market for the aspiration hobs. We are using them to see this category growth year-on-year since the launch of this category. But in the last 1 year, it's softer to grow with an important change in the trend. So that [ the target ] negative of some important markets like Germany and Netherlands that are the 2 biggest markets for this category. Moving to Slide #10. Here, you have the trend for North America related to the ventilation part. As Giulio has anticipated, it's confirming that the market is still not improved, which is still an important group versus the last year close to this minus 20%. And also if you take holiday cooking category [ in the total cooking data in AHAM ], if you look at the Cooking category, the market is recorded a minus 10% versus the last year. Moving to Slide #11, and moving to the heating industry sector. That also this quarter in Q1 is still not recovering the demand of the last year, due to the certainty of regulation related to the energy transition, how the new directive will be implemented in the European country in terms of incentive to reach the target relating to the greenhouse directive. Overall, the demand in this quarter is minus [ 16% ] and is related to the boilers, the condensing boilers. Going forward to share the trend of our sales dynamics starting from Slide #13. Our performance in terms of net sales is sequentially improved -- improving quarter-by-quarter with a comparison versus the Q4 2023 that is recorded a plus 4%. But compared versus the last year is minus 9.2%, out of which EUR 11 million coming from the organic drop, and there is also slightly impact -- the negative impact of currency for EUR 0.8 million. If you go to [ specifically ], which is the best performance between Motors and Cooking, we see that model recorded [ basically see a ] sequential improving versus the last quarter is still negative double digit, minus 18%, while cooking division, minus 5%. So a single mid-digit drop versus the last year. Slide #14. So moving in the performance relating to the region performance with a positive contribution of America that finally turned positive, thanks to the results of our brand strategy with the new China [ new ] product -- boots on the ground product distribution and enlargement also of our customer base for the OEM customer. OEM performance that is positive also in Europe, not only in North America. And you can see also in the graphic related to the performance of OEM that started the last year is positive for 1.7%. While the OEM brand is negative minus 9.5% due to the pressure on price/mix, but also due to the fact that there's some important market for us, as I said before, like France, they are recording a very negative market demand, a double-digit pull-down versus the last year.

And this is what we were saying, Slide 15 about the Americas now. So good performance of the OEM where, let's say, the benefit besides the market is strongly negative of entering the Do It Yourself channel with The Home Depot. That started at the end of quarter 1 last year which is still growing. But also where we are working, we implement the strategy of feeding some of the big brands of U.S. -- big players of U.S. with our Arietta brand. We are already a sales organization following this. We have already started the [ proper compensation ] if it's the right word, of the new products, and we are challenging ourselves to staff by the end of the year in order to see the first results already in 2025. But the very good message in my point of view because it's new actions in the performance of the B2C. B2C scored EUR 4.6 million in the first quarter in the market. It's always minus 20, as you saw before. EUR 4.6 million was the sales -- the branded sales, so the B2C sales of 1 year in 2019. So let's take out the -- [ call it ], which doesn't count. It means that the potential is to arrive close to EUR 20 million. And again, these 2 distribution companies are -- have been starting since September/November last year; November, Canada; September, the American one. So it's a model that works. It's a model that is already growing and paying us back. It's a model that wherever there is an opportunity of a distributor that doesn't work well or of an area which is not properly covered, we want and we will replicate during the year and the years to come. Before arriving to the financials, just a snapshot of our Milan Design Week participation. As you probably read on the newspaper, it was a successful edition of the Salone del Mobile. More than 360,000 visitors, of which more than half foreigners. Our stand was built in order to show, represent all of the product and brand transitions that we are planning and that we are investing in. So [ we stared off ] with the more complete lineup in the market. Cooker hoods, which is our core business, which is our awareness specialists and for Lhov, the full investment that brings us in the cooking room, which was the last one and which was very much appreciated as a strategy, as coherent, as opportunity in a moment of strong traction of the market also in terms of brand [ measures, empty spaces ] from our visitors. Our visitors was 30,000. We don't have references versus the previous years, but we understand that the fact that the 10% of [ media guests ] than the full visitors of the Salone del Mobile came and registered in our showroom means a lot, considering that the Salone del Mobile is not only appliances, it's kitchen, it's bath furniture, it's a lot of that. So strong media [ presence ], strong visibility. This is a starting point, the first chapter of a long book. We know that the book is very long. We know that the story that we have to tell is interesting, is told at the proper moment and will work. Slide #18, of course, Elica is not only appliances, Elica is the company that made [ up in appliance ] a design [ offer ]. So our Straordinaria, our FuoriSalone showroom accounted for 70,000 visitors. Strong visibility, brand awareness, okay, what is the special mention in the [ awards for the FuoriSalone ]. It's not the normal, of course. But it's what we wanted to see in Milan. This is a transformation that needs to start louder with the proper visibility and with the proper media investment that we will put in place in the next months.

Coming back to the results of the Q1 in terms of financials. Going to Slide #20, margins are under pressure, with a GAAP versus the last year for the EBITDA of 3.3 points and for EBIT margin, 3.7 points. This gap mainly related to the half of this amount -- more than half of this amount is related to the price/mix and promotional activity that has affected the market. In addition to our strategy investments that we started in this quarter with the rebranding, the sponsorship and also some of this related to the EuroCucina, that is slightly positive, offset by a slightly positive effect from raw material impact on [ facilities ] cost and cost management that we continue to improve our margins. In term of financial costs and in line with our expectations. We also -- if you go directly to the net profit, there's also tax revenue profit for [ 0.4 ] related to deferred tax, coherent with the statutory profitability results of our facilities. We closed the quarter with a net profit of [ 0.4 ], with a group net profit, considering the minorities -- the impact of the minorities at the [indiscernible]. In terms of financial position, Slide #21, we are aligned with December 20 -- almost aligned with the closure of December '23. And in terms of Lhov, in terms of absolute value with definite of EUR 43 million versus EUR 41 million of the closure of December. As Giulio said before, generally, the Q1 is the quarter where [ a bomb of ] cash. But thanks to an efficient and intelligent working capital management that you can see as the next slide 22, we were able to offset the pressure of our EBITDA margin. In fact, going to Slide #22, we are keeping under control our managerial working capital with the same percentage with respect to the last year. All the line related to this KPI [ for strong ] inventories [ are stable and ] are under control. We closed the Q4 with the same level of inventory of December. Generally, the Q1 is a quarter where we start or the company started to generate inventory to [ feed ] this year, but we are able to keep under control these KPIs. Related to the new financing, as Giulio said, so we signing today financial loan with a pool of 4 banks for a maximum amount of EUR 70 million. That is available till the end of 2025 with a maturity date of 5 years. And the loan is a principal intended to support our investment strategy, medium, long-term investments to rebalance the mix between the longer, short-term debts and also to give us more flexibility because if you are considering our debt structure and also the medium term needs, we have additional cash -- additional liquidity for EUR 25 million, EUR 30 million to catch additional opportunity [ on additional needs ]. This kind of loan is characterized by 2 years of [ pre ] amortizing. So I'm leaving the stage to Giulio for the closing.

So Slide 24. Before getting your questions, you can say that the Extraordinary Cooking transformation is successfully launched. There is the plan of attack. There are the products, the customers are engaged, the visibility is growing week after week. Now it's our responsibility to distribute the product. We expect the timing of the launch to achieve the plan of growth in the next 3 years. It will be tough, it will be longer, it will be costly, as we said. But we know that this is a priority and will completely change the product, the brand, the profitability of the company at the end, making a very [ something ] the trend probably was just a couple of years ago. We may say that quarter 1 sales are in line with our expectation, which were [ no good ] for the first half of the year. We see a persisting demand weakness in Motors division in all geographies. So we see the positive effect of the project that we are running. We are still counting on the second half of the year that should be in the region of neutrality or just slightly negative. As we said, strong pressure on margin, partially driven by an increasing amount of investment, but partially driven by market pricing that especially in the aspirational segment is going down quarter after quarter. And then we need to follow through price, through promotion and also through new product specification in order to defend our margin in the midterm in order to preserve our market share. The investment plan goes on -- will go on to defend the strategy to support our road map because as we mentioned also in other occasions that we had to share our strategy, a new product, a new range, a new image of the company needs to be, for sure communicated, for sure announced, but also needs to be in the display of our customers, need to be explained to our customers in order that they will explain it probably to their customers. Needs to be visible for our final customer, which was not, let's say, our problem today. So it needs to be supported until [ it starts ]. And then we know it will come back. Why? Because we are everywhere with our sales force because our brand is already a leading brand in terms of specialists and because all of the major [ features major ] know you trust on [indiscernible]. What does it mean for 2024? In Italy, at this moment, if we see quarter 2 dynamics, and we imagine also through customer feedback, what could be the second part of the year. We see revenues in line with market expectations. Despite, there are some things to be better understood. As I mentioned before, a very weak German, but a very weak French market and also some negative signals that may be only temporary or seasonal in the Italian market. On the other side, we see opportunities from a Motors division perspective, but also in other regions/product lines across the Europe. Transformation will continue because the priority this year is to go on with the transformation plan. We see, at the same time, two opportunities. The first one is that through a -- I would say, an excellent management of the net working capital, our debt will stay where it is. So we do not see variations -- material variation versus how we closed 2023. On the second time, as we mentioned in other calls, in the second part -- in the second quarter, we will start the discussion of the asset that it was written in the shareholder agreement of our Indian joint venture. We know that that's an opportunity that will hit not the operating margin but the net profit. But we also know that those are resources. And this year, we need to manage resources wherever they are to support our plan. So we see the opportunity to respect our guidance in terms of net profit, catching this opportunity while investing in what we believe is more important than the 2024 itself, which is our product, brand and [ overall ] strategy [ in the midterm ].

[Operator Instructions] The first question is from the line of Alessandro Cecchini from Equita.

The first one actually is on your sales guidance between EUR 465 million and EUR 470 million. And just to compare with your guidance for the second quarter that is EUR 190 million. So basically, you expect second half sales in absolute terms slightly below the first half. So just to better understand, what are the drivers of this given that you were expecting -- so you are executing some small quarter-by-quarter improvement? So this is my first question. The second question is that it's very difficult to provide an outlook, but given your guidance in terms of sales, what could be, I mean, range in terms of adjusted EBITA margin for the year? And secondly -- and then my third question is that about financial charges if we needed to account additional more financial charges, given the new structure?

Thank you, Alessandro. Thanks for the questions. So the guidance is, I wouldn't say total achievement. I would answer, frankly, that it's very difficult to understand what happens in the second part of the year from a demand perspective. So starting from the consensus, which is basically there, we have the perception that we can meet the consensus even if the market, let's say, is slightly negative. So it's probably too early to take a commitment to say we will do more. It's too early also to say we will do less. So that seems a reasonable number. That means that we will have maybe an additional incremental quarter or maybe there is an unexpected quarter drop because demand was down. What we know is that we expect America to keep working well. We expect some OEM projects to enter, so to positively hit our revenues. We expect in the very last part of the year, also some good signals from the Motors division where we are codeveloping projects, and we are gaining market share. So we are entering in some -- let's say, we are grabbing shares from other producers. We know at the same time that there is a persisting risk in Germany, in France and the situation in Italy, that we need to understand if it is purely seasonal or if maybe there is something that we need to manage to take into account. Also the promotional environment is hugely negative. So here, the decision is to stay where we are defending our pricing and our unit margin or to be driving. We are doing it with some products, less specified products that allow us to be aggressive without losing marginality. But in some case, when there is a famous name of [ latter ], of the appliances that goes on with the pricing at minus 40%, you need to respond if you want to defend your market share. Again, in the midterm perspective because if you lose share, it takes years to come back. So in that case, case after case, market after market, we will make an evaluation, and we will understand what is the best strategy. This is the reason why, let's say, EUR 470 million, EUR 465 million seems reasonable because it allow us also some promotional strategy in case there is some attachment that needs to be stopped. In terms of operating margin, again, we see a quarter 2 where considering the investment of EuroCucina from a side, considering some cost containment activities that we are doing and also considering the fact that in the first quarter, we didn't see, I would say, the full effect of the efficiencies on the raw material and components because a part of the materials, the components that we use, we're already in [ we're stocked ] and there is also a matter of [ P&P ] evaluation. We see an added margin that is, I would say, in continuity with quarter 1. Quarter 2, we expect considering that the promotional pressure, the communication pressure will decrease, considering that the big event of the Salone del Mobile is gone and paid. And considering also that we expect to see the effectiveness of some cost containment actions that we have in place and again, the major path of the savings that we have planned in terms of raw material and components, we see an improvement of the margin. Now a lot of the balance show a full year [indiscernible] percentage will depend on market pricing. So on the first line of the profit and loss. Why I'm saying this because I insist on saying that this year, we will invest what is planned. We cannot step back because it will be just a delay. There are things that we need to do, and we need to do them when we have Lhov, which is new. The cooking range, which is completed on the market, on the catalogs and just arrived. If we wait 1 year because maybe we lose 1 point of margin [ it means ] we will support something that is not any more new. So it's better not to do it. So this is why I'm being cautious and need not give [ still ] commitment on what could be the full year operating margin. On the net profit, again, we know that there is the Indian operation that may help us, let's say, that we have not made, that will help us achieving a net profit that will allow us to remunerate our shareholders as planned.

Relating to the third question -- relating to the last question for the financial items, last year, we closed with around EUR 6 million of financial items with a negative impact of the exchange rate items due to the [ raw material ] impact. So for the current year, we expect to have the same level of financial items without a negative impact from freight exchange items. In term of this new loan, in terms of spread, we closed with a very good spread, better also than other short term loan that we closed in the last year. So partially, the increase of the tax rate due to -- on the loan was affected also the last year in the shorter term loan. So we don't expect additional financial costs for the current year. This partially was a bit impact that affected those last year from short-term loan.

Okay. That's very, very quick. Midterm, we need to assume '26-'27 just to have an idea.

Midterm guidance?

Yes. Midterm -- when you say midterm, '26-'27, it's...

Yes, yes, '25-'27.

Our next question is from the line of Emanuele Negri from Mediobanca.

The first one is on new products. Which kind of revenues do you expect from new products in the Cooking division from '24 and '26? And the second one is on the Motors division, which came in a bit higher than expected. Do you see this level of revenues that we have set in the first quarter to be overall sustainable in the coming quarter? Or there were some kind of one-off or special spaces or something like this?

Okay. Maybe we didn't catch the second question. Starting from the first question relating to the revenue for new products, so we confirm what we see -- what we said at the beginning of this year because our expectation in term of new product for the current year is to have around EUR 3 million of net sales that's coming from the launch of Lhov that will be available in the second part of the year or when induction of [ the wine cellar ]. In term of margin, the impact will be lower since the impact of these sales would be focused on display. To push the sales out of this product also, we needed to grant a special sales incentives to our customers to the trade to push the sales out of this product. And the target for the current year is to list in this new product in all the kitchen specialists at [Indiscernible] that is in term of -- so EUR 3 million in term of net sales, but with a very lower impact in term of margins because we have to push this kind of products in terms of investment.

What's concerned with the Motor, if I understood the question because the line was not good at the moment. We see quarter 2, again, where there are opportunities to grow. We see quarter 3 and quarter 4, that should be, I would say, slightly positive versus last year. Why I'm saying this because last year, quarter 3 was probably the worst quarter for Motors division ever because it was fully catching the destocking process of our customers and the stop of the incentives in Italy as well as in other important countries from an industry -- from a demand perspective. We know because we're talking with them that our customers have still some important stock, and this represents a risk because the market has stopped suddenly. So it's hugely lower than they were expecting to serve. But at the same time, we have, let's say, a very good visibility on quarter 2 and visibility of the beginning on quarter 3, that make us believe that probably we can do better than our initial expectations, and we can count excluding some calendar dates may switch from a month to another on at least, I would say, a stable level of revenues versus what is already included in the presentation. I don't know if I got your question answering this way.

Yes, yes. Thanks, Giulio.

The next question is from the line of Carlo Maritano of Intermonte.

I just have a couple of questions. The first one is related to the EuroCucina event. So you were mentioning the quite interesting -- interest from your clients. I was wondering, based on your experience, how long does it take generally to translate these interest in orders into revenues? And the second question is on M&A. So you estimate a flat net financial position by year-end and the deleverage in the following years. So I was wondering if you expect any potential M&A to complete the product range? Or if at the moment, you're more focused on your organic business and so we do not have to expect in the short term anything from this side?

Thank you, Carlo. So that would be the artificial intelligence to be able doing this projection [ over each. ] But let's say that differentially versus the other years, there are some specific things that may be colorful to discuss. So the presence in [ the stemware ] there were the specific customer [ in EuroCucina ] where there were 100 customers. 100 customers is 3x what they were in 2018 when I first entered EuroCucina. So what we are seeing is commitment. So they didn't visit the stand, go to the restaurant and say, fantastic. We already started to discuss pricing, we already started to discuss the presence of our products in their catalog because this is the Step 1, a kitchen maker, a kitchen shop, a kitchen specialist needs to put your product in its catalog. If he doesn't, you have to wait till the following year. And this is going to happen within, I would say, July, because 80% of the catalogs with the exception of [ certain ] customers are then copied and printed by mid of the year. The direction is the right one. So now it's on our side to expect the delivery date to have the full range rated, and this is why I would say there is this huge focus on product marketing and [ induction ] delivery and production. So to give the first signal that we need to give is that we made a promise. The first part of the promise is achieved. The products are beautiful, good, they work and they arrive in time. Then we will have to support them in showing the products, so in their displays [ or following ] their catalog. We will supply them in terms of learning. So we will teach them with our people how to explain the product, what is the value proposition of the product that they need to sell to their customers. And then, let's say, the championship will start. So they will see that the product works, they will see the product rotating and they will start to order with, hopefully, growing quantities. We believe that there is space because the pricing strategy -- the blind, I would say, pricing strategy of some competitors. They merge between [ we have pulled actually ] the industry [ top ] point is clearly reached at the end, creating space for an distinctive brand. And the message, how can I say, the morale of the money that we are spending on the product and on the brand are distinctive. So we see an opportunity driven by the fact that these products are new. And that Lhov it's a product that if you want even only to try, if it works or not, if it's sellable or not, you can buy only from Elica. So that's an important thing. In our estimate, we are being also alternative, because Lhov is a fully new product. So we see a lot of interest, but it's very difficult to say we will sell 1,000, 1 million or one. We are sure it's not one because we have some orders already, but there's an opportunity more than a risk. M&A, which was your second point. As you mentioned, there is [ a great ] space, so even tomorrow in our net financial position. The driver is always the same, it's product and strategy. Now our Cooking offer, let's say up for the next couple of years is what we have codeveloped together with [ NikolaTesla ]. Good company, good products, very solid. The steel that they use, I'm in the sector since 25 years now, is what it was used at the beginning of the 2000 and now it's 1/3 of the thickness. And so they are distinctive, let's say so. And the functionalities are the functionalities that are in line with market progress. Now what is next? Next is to do power cooking, meaning with a content of innovation or functionalities of whatever will be needed to be distinctive in our product. So of course, this is something that you cannot develop with a supplier because if there is somebody selling new strategy means that already exists. No, it's not new, by definition. So we can and we are look to some operations -- extraordinary operations that will allow us maybe to enter in the know-how and then we can develop with it our vision. That is, how can I say, an open point. But again, we know that the focus now is to deliver what we promise that is already in our hand. We know also that looking to the future, as we are doing for the strategy, we are looking for a partner or an acquisition or a joint venture that can allow us to go faster in the second step of our Cooking development. There are not so many companies. We understand that multiples are going down. But in some cases, we mentioned a couple of times, this is not exactly true. So we -- I wouldn't say we are taking time. We are looking around, but we need to be perfect. Now we cannot allow ourselves to do a mistake in a moment in which there is so much investment and so much focus in the priorities of the company. Because, otherwise, then we will have to start to make a choice, and this is not what we want to do. The direction is clear. We know that with the current supply, we can arrive exactly where we need to arrive and with this, let's say, written in, I guess, the third or the fourth slide of the presentation, we are, of course, working in terms of intelligence [ context ] adviser in order to find another opportunity to go faster and maybe to learn how to do something that we today will not do internally.

Mr. Cocci, there are no more questions registered at this time. You have the floor for the closing remarks.

Thank you. Thank you for joining our call, and thanks for attending this 1 hour with us. Have the good rest of the afternoon. Thank you.

Thank you. Bye.