Ferretti S.p.A. (F3T1.F) Earnings Call Transcript & Summary

Welcome to the 2023 full year preliminary results for Ferretti Group, presenting today is our Chief Executive Officer, Mr. Alberto Galassi; and Chief Financial Officer, Mr. Marco Zammarchi. The Q&A process will be explained once we reach that portion of the presentation. Mr. Galassi, the floor is yours.

Hi, everybody. Good morning. Good afternoon. We're here in the new shipyard of Ancona, they just renewed. And I'm very pleased to give you what I consider the best results in Ferretti Group history so far because the best is still to come. So let's start from giving you some highlights on the double-digit growth of the main KPIs of the company. So on track -- definitely on track to meet the midterm targets that we gave to the investors. The revenues of the group reached EUR 1.111 billion in 2023 versus EUR 996 million of 2022 with a growth of 11.5%. The adjusted EBITDA grew of 20.9% to reach EUR 169 million from the previous year of EUR 140 million. It's interesting to see that the guidance that we gave of growing in 4 years around for 100 basis points has been not only met, but beaten in '23. So we grew from 14.1% to 15.2%, so 110 basis points. And the important numbers because we want to have visibility and credit to fund the future of the order backlog that reached nearly EUR 1.5 million -- billion, so EUR 1.491 billion, with a growth of 15.1% versus 2022. Now we ask external sources to give us a positioning of Ferretti Group, where do we stand, where do our position versus the competitors and the Phil Draper & Associates Database is one of the most reliable sources. In the latest release, on -- with a focus on composite, so above 30ft and Made-to-Measure yachts, we still have a leading position with 15.8% of the market, 4.3% up versus 2019, 0.9% up versus '22. This is not including superyachts. But if you go to the following page, we've been showing this since the Capital Market Day of 2023. We give you an update on the latest one, and it's confirmed that Ferretti Group is still positioned in #1 place between 80 and 99 feet. So this is what we call the high end of composite yachts and on the made-to-measure. So again, tracking not including the superyachts, we still track the #1. But the good news is that we just received, and I would say a few days ago in the following slide, an interesting external source, which is the SuperYacht Times research. It was released in February 2024. And it's -- first of all, I like the use of word delivered. So the top 5 super yacht builders ranked by #1 -- number of yachts, 30 meters plus delivered '22, '23 sees Ferretti Group leading globally with 36 yachts above 30 meters delivered to the market versus 26 of 2022. And let me jump on this saying that this is driven also by the manufacturing capacity. I mean the investments that some of you that are present with me today in Ancona and I hope to invite and have 1 day a Capital Market Day in this shipyard, physically, you can touch that size in our industry matters. You need to have the space and industrial capacity in order to grow with the most profitable segment, which is the made-to-measure, the super yacht and the high composite. So this is the -- we're compared with the other competitors. But it's interesting because it's the same source, SuperYacht Times says splits the 36 deliveries in the brands. So when we say and we took the quote. The quote of the research says that within Ferretti Group, Custom Line delivered 14 yachts, closely followed by Riva with 11, Ferretti Yachts contributed with 7, Pershing with 3 and Wally, the newcomer in the family with 1. When we say that one of the strength of Ferretti Group is to have 7 brands, the 7 notes on the pentagram, it's confirmed by the data and the sales because the client that picked the wallywhy, bigger than 30 meters. And it was, by the way, a sailboat, if I'm not mistaken, and the Pershing, it's not the same client that buys a Ferretti Yacht or a Custom Line or Riva. So we're actually addressing an incredibly different customer base in terms of age, in terms of geography, in terms of taste, in terms of new passion or old passion for yachting. This don't underestimate the importance of given any kind of customer, the newcomers, especially in the new areas of the world, which are approaching us. And you will see by geography, some areas had an incredible growth in our customer base. They've been approached and they liked the differences between the styles, the design and the performances of our brands. So order intake of 2023 is a very healthy order intake. Why I use the word healthy because, first of all, as you can see, we don't have seasonality. Every quarter, as we kept saying once you sell in 71 countries at the end of the day, seasonality is shrinked and limited to the minimum because you don't have to wait for the summer in some areas and you don't have to wait for the winter in some others. But the interesting point is the huge jump of the Q4 2022. 2022 last quarter gave us 106% growth in collection of orders. We collected EUR 245 million of new orders versus the EUR 119 million of the previous year. This is driven by the fantastic season of the shows that we had in September and in October. This is driven by the fact that the new models that will be well and extremely well received by the market. Order intake by segment, we'd like to give you this as well. As you can see, usually, more or less we're in line with the previous year. As you can see, the biggest chunk is driven by the composite yacht, but the EUR 527 million, representing 47% of the order intake by segment, 50% of this number is driven by the high end above 80 feet yachts. Basically, I keep highlighting and saying this is where the high marginality and the high profitability lays. So made-to-measure yachts and superyachts, they declined, but this is driven by obvious consideration: one, over performance of the previous year; secondly, time for the deliveries. Some of you that have been today in the shipyard of Ancona, you've seen the ships, all of them are sold. And once you have on super yacht to make an example, the first available delivery in 2027. Well, I can tell you that the decision to postpone the order because 3 years from now is a long time frame, it's a decision which should not surprise any of us. This is one of the reasons why in the shipyard of Ancona and the shipyard of La Spezia, where we do the made-to-measure and superyachts, we will continue making investments. Order intake by geography. This is very interesting because we've been -- we're seeing a surprise. We've seen that an area is not surprising at all. The Americas, you've seen also our competitor is not performing as the previous year, minus 25%, but then we have to give a highlight on the Americas. But what is very interesting is that the Middle East, Africa region increased in an important number dramatically from 242 to 274 in the made-to-measure and it's risen to 13.2% by the performances of the GCC countries, namely the Arabian Gulf, Abu Dhabi, Dubai, Bahrain, Saudi, which is not in the Gulf, but if we consider in the same area and -- sorry, Qatar -- sorry, and important presence of Turkey. To give you a reference of the United States, the reason why Stefano De Vivo is not with us today is because Stefano is coming back from Miami Boat Show that finished and completed -- I think it ended yesterday, and he's stuck somewhere in the airports because, of course, connecting flights are not the best what we're famous for, at least not in this country. And I can tell you that Stefano is bringing 3 sales coming from the boat show. So it's -- we're not worried at all about the U.S., but we will deep dive in that. Order backlog and net backlog. Following slide says that the order backlog is breaking the sound barrier of nearly EUR 1.5 billion, so plus 15.1%, which gives us a clarity and a clear visibility on the future revenues. In 2023, we collected more or less EUR 1.120 billion of orders and corresponding into units interesting, 244 units. And in the same period, this company delivered 212 units. Don't underestimate the delivery of the ships, please. We have a focus on this in this industry. 2023, as you can see, versus 2022, there's been a growth of 14.3% in the net backlog, so we continue to grow healthy -- healthily. I will give you an example, Marco will deep dive into that. We have to deliver for the season in Europe and Middle East in our 2 regions, 150 boats -- yachts within this now and the end of the season, with the end of the season is going to be in the summer. So just imagine the kind of industrial effort, the kind of effort in working capital this company is doing in order to meet the expectations and to meet the order intake that we have.

And -- go back, please. And if I may, the coverage offer by our net backlog for 2024 result is 69%. So -- and this is the best result ever for our company. So we have a very significant visibility on our revenue generation for the current year, please.

The order backlog by segment, as you can see, we had the growth. We had a growth of 13.9% in composite yacht. And again, let me highlight that in this composite yacht segment, the high-end composite exceed in 80 feet is the one that is moving the most. Made-to-measure yachts plus 7.3%, super yachts 8.7%, and the other businesses of the company are growing as well at 5.3%. So again, large composite and made-to-measure segment, they can be -- they continue to be the core -- actually, I'm disconnected, I'm realizing just now. I hope somebody listened anyways, are the core of our industry and our business. Revenues, Marco?

Yes. So moving to the revenues. As Mr. Galassi said, we increased by 11.5%. And what we wanted to highlight is that our company has now reached very low seasonality level. In fact, you can appreciate in this slide how stable is the revenues generated by this company amongst the every quarter. And if I will go to the next slide, instead that we can analyze by segment, and we can appreciate 3 major points. First of all, the composite that is in line with our expectation and with the order intake that we presented before because according to the production cycle of this kind of boat, the relation between order and revenues is quite immediate. Instead for made-to-measure, we experienced a slow growth. But in consideration of what we said before that is the consequence of the waiting list and the waiting list is derived by the lack of capacity that now with the investment that we'll talk later on about, Ravenna, we suppose to have sold at least for the next 3 or 4 years. And then the 2 other comments about super yacht that is increasing by 23%. Thanks to the contribution made by the flagship semi serial models. So we particularly, as we already shared with the markets, we're taking the advantages of the know-how generated by CRN applied to the brand, so to Pershing, to Custom Line and to Riva. And this is contributing a lot, and this is just the start. And the last point, instead the 10.3% for the others, among this figure is that Wally sailing is starting to contribute in a significant way to our revenue generation, and this is just the beginning.

The question? I've been told by somebody on the line that sometimes the slide and the mics and the sound is not perfect. So if...

Okay. We'll share it.

Is microphone not working?

Okay. Okay. Just one minute. Okay. Good. So if we will move to analysis by geography, instead -- okay. First of all, Europe is just a confirmation of the prior year result with an increase of 2.5%. But the big junk -- but the big jump, as Mr. Galassi mentioned before, is represented by Middle East and Africa and especially is coming from GCC countries and Turkey with an increase of 143%. And the same trend, significant better is 37.2% from APAC, Asia Pacific. Instead AMAS decreased by 13.1%. Before we go to the following slide, we want also to highlight that in this year and because the backlog goes in 2024, AMAS will benefit of the contribution of super yacht because it's -- in the last 2 years, we have sold a significant number of units of super yacht in this area. And so it was able to compensate the slowdown in this market. So offering -- we want also to offer the view of the AMAS market in the following slide, that as we said, we had a decrease in 2023, representing 29% of our total sales. But again, if we compare with the prior year result of this company, it's the second year ever of this company because we were better of 2021. And in terms of percentage, we're significantly better of the 2019 and 2020. So we're quite confident that this market, yes, in one end, slowed down, but in the other end, is continued to generate a lot of revenues and a lot of profitability because this market, we have to say, is quite profitable for us being some sales that we operate in a direct way without any dealer. So -- if we can move to profitability. In terms of profitability, as we said, we increased 110 basis points, reaching 15.2% that represents a growth of nearly 21%. And the same path, we appreciate in terms of net profit, where this company reached EUR 84 million with an increase of 140 basis points, an increase of 38%. The rationale behind this increase is, again, provided by the brand power, the product mix, so the strategic position that see our company more and more focused on the most profitable segment that it is a high composite, made-to-measure and semi serial of super yacht and also industrial scalability. So the very efficient fixed cost absorption continue to generate a lot of profitability, but not only on 2023, but we expect it continue to contribute in the following year. CapEx. In terms of CapEx, this company has invested EUR 147 million in 2023. It's definitely a big jump versus prior year, but we want also to offer a breakdown of this figure because 62% of this amount is represented by Ravenna. We have a specific slide on Ravenna later on, but we want just to tell you that this is representing an additional capacity of 30% of our company that at the end of 2023 is -- has 96% of full utilization of this place. And on the other hand, we want also to highlight that the maintenance CapEx is just EUR 23 million in consideration that because our fleet now is younger and younger and also the new shipyard that we completed in prior year are at the state of-the-art. We can also think that maintenance CapEx can be lower in this step. But as we said, we wanted to offer a good site -- a good deep dive on Ravenna shipyard because it's representing a very important milestone in our growth plan.

Okay. Thank you. The Ravenna shipyard is the shipyard in San Vitale we acquired in March of 70,000 square meters in the area. And in January 2024, fully paid in 2023, we acquired an additional area of 30,000. So total is 100,000 square meters. We will, as Marco said, increase the production capacity of 30% and by the way, the shipyard, you can see the rendering of the -- it will look like at the end, but it's already operational because we're building actually under construction, we have the Ferretti InFYnito, and the 90 and also the new model. And the total investment in 2023 was at EUR 77 million. So made-to-measure, composite and sales segments of the Ferretti Group and Wally will be built there. It's an incredible site close to the headquarter of Forlì. We can have the same manpower that we use in the other areas. It will help us to optimize some decisions that we have to take, namely we'll have our focus today with the Board. We're considering also what to do with Taranto because the delays on the process are getting very, very long. It gives us flexibility in case we take a decision of a no-go. Important for you to have -- I think we have a short video that will give you a status of where do we stand, what it was looking like and you can see the boats inside. [Presentation]

Thank You. Marco?

Yes. If we move to the following slide, we can talk about the net financial position, net working capital. The net financial position at the year-end, it was EUR 281 million. In this net financial position that is decreased -- represent a decrease of nearly EUR 80 million versus prior year. We have to include that this company has distributed dividend for EUR 20 million, paid taxes for EUR 12 million, and you have seen the EUR 147 million of CapEx, of which EUR 77 million related to Ravenna. Another point -- another comment about the net working capital that we consider quite healthy being still negative is that we temporarily decreased to minus EUR 2.7 million in order to be ready in a satisfactory way for the next season deliveries in Europe and EMEA that we foresee more than 150 units. So we want to be ready for this season. So we'll take the benefit later on. So if we can move to the business highlights.

Yes. Business highlights. What have we done in the market with the products. So we splashed 11 new products this year, not 11 boats, 11 new models, 7 of them was range expansion. So models that we never had with the brand before. We did edit to Riva, the InFYnito 90, I'm just mentioning the range expansion, the Pershing sport utility yacht, the GTX116 and then the wallywhy150, interesting also the full custom. We splashed and delivered the 72 meters motor yacht with #139 CRN, as you can see and also the wally101 full custom sailboats. The others were range update. Well, what's going to happen in 2024 is as challenging as '23 because in 2024, we have splashed ready to, but this is what's going to happen. You can see new orders, the El-Iseo , the first model of the range E-Luxury of Riva has been presented in Düsseldorf Boat Show. We will have in the water, the 67 meters CRN 100 serial number or #143, wallypower50, wallyrocket for competition like the Ferrari competition or Corse Clienti equivalent for the Wally owners, the wallywind sailboat 110, the GTX, which is the entry level of the sport utility yacht, Pershing GTX, brand new Navetta 38, some of you maybe saw it when she was docking today, the prototype, as she will be presented very soon. And the very important Custom Line 50 #1 is being sold to South America. Now what we've done in Venice in December, we presented the Wally 100. The Wally 100 is the entry-level model of the why series we presented in an incredible event that we had with the charity with Sir Elton John at Teatro La Fenice, and it was incredible to see docked in front of Punta della Dogana in Venice in a beautiful sunny day of December, the Wally 100 that by the way, is being sold immediately. And very important, Venice will be also the location for the launch of the Custom Line, Navetta 38 #1, this is the prototype, which is currently under testing. And she will start and she will be the leading edge and the cutting edge of the new Navetta range for the future, incredibly well received by the market with so many technical solution and features that I can't show you now, but you'll be very surprised when you see it in 2 months from now. Very important step because people talk and they're those and people that talk. We did the El-Iseo, we use the best brands we have in the world, which is Riva. There's no comparison in terms of history and heritage and fame and allure. And we decided to go electric with the El-Iseo. The prototype has been tested for more than 1 year. Some of you may have seen it. Now the final version is being presented in Düsseldorf in the month of January, very well received by the market, especially Swiss market, Austrian market and believe it or not, Saudi market. Next to me on the left, finally, back from an interesting -- from being a mother, we have Margherita Sacerdoti, which also not been -- she is not only our Investor Relator, but she's also in charge of sustainability. And she will talk a bit about what we're doing. Thank you, Margherita. Welcome back.

Thank you. Good afternoon. Just a quick overview of our sustainable solutions on our yachts. So you can see here a list, 4 out of 5 solutions described here are being already installed on our products. The first one is in the InFYnito line, the first of the InFYnito line. It's a mix of solar panel sustainable materials, and this is already a product that anyone can buy. We have the hyper propulsion system that is already being sold on one of our CRN yacht that is able to optimize the extra load from the main engines, the heat recovery system that is able to capture extra energy and transform it into thermal energy, heat waters, pool and the main cleaning system. And finally, we have an offer of solvent-free resins that can be used on our ships. We also have the architecture ready for fuel cell system whenever someone will ask for and when the market will be ready to offer green methanol in harbor to be loaded on the yacht. So this has not been sold yet, but it's ready for whenever the right time comes. And it's been certified by RINA already. I'll give the word back to Mr. Galassi for our social responsibility part.

We'll have to share the microphones. The company is -- the best secrets of this company, actually, we have 5 secrets, people, people, people, people and people. The best secret of Ferretti Group is people, and we do believe that it's mandatory to invest in people. The Scuola dei Mestieri is an Italian way of describing, it comes -- it sounds a bit like renaissance. We wish to be like Michelangelo or Leonardo Da Vinci, we're not definitely that good at the mestieri, but Scuola dei Mestieri is a project for -- from 18 years old to 29 years old students or anyone that wants to start to have a career in high-end Italian luxury. We believe that our artisans are unbeatable. Our workers are excellent. And so you basically train them and teach them on the [Foreign Language], it's very hard to translate, [Foreign Language] the well doing, Italian well doing between on-job training and classrooms. The first addition, we've done it in Forlì, and we launched it in the Mondolfo, the Pershing site and Sarnico site, where we do the Riva up to the size of 18 meters and we kicked off the second edition in Forlì. Why we want to spend some time in this because we're preparing the people that will actually work in Ravenna shipyard. And believe it or not, of all the students and kids that compared to me, I'm a dinosaur compared to them that are joining that are willing to learn, driven by something that you cannot live without in this industry, which is passion. You can't do my job if you don't have a passion for this. Well, if you see the way they learn, how quick they implement the technical solutions that the expert and artisans or engineers are telling them to do and the fallout in the manufacturing line is the best investment that the group could have done. By the way, because that's investment for the future. It's something that you will actually harvest in a few years, but you have your own people trained by you, working on very expensive, very delicate, very sophisticated machines. It's not only stat, there's a lot of technology. And again, I hate to say that the maestro of the mystery was Enzo Ferrari. But the first one, who did this quality from Dino Ferrari, School in Maranello, to train young mechanics to join the factory, he's been him. And he was absolutely right because you actually train your own people with the same passion and the same blood for the products that we do. Sorry if it took longer than expected, but I thought it was very important.

Okay. So about the final remarks, we wanted to share with the community, our annual guidance, it's the first time for us. And we also take the occasion to confirm the midterm guidance. In terms of annual guidance, we believe that our company, also thanks to our product portfolio of order backlog, the net backlog is covering 69% of our revenues. We've foreseen revenues between EUR 1.220 billion and EUR 1.240 billion, representing a growth between 10% and 11.6%. And in terms of EBITDA, the result should be between EUR 195 million and EUR 200 million with a growth between 15.2% and 18.2%. And as a consequence, the EBITDA margin will be increased slightly below 100 basis points. So we've foreseen something between 16% and 16.1%. As I said, the midterm guidance at the moment is confirmed, but we don't exclude that to review the -- this guidance with the half year result. So Mr. Galassi, I think....

There is one important decision that the Board of Directors took today. The Board of Directors stated and declared and resolved actually on the implementation of buyback plan with, of course, the normal purposes of a buyback program. And I received a mandate to prepare the buyback plan to be submitted to the next Board of Directors in the executional form by March 14 and it will go to the shareholders' meeting approval by April 22. Now the elements of the buyback plan are driven by everything, which is written there plus something that I will say on top of it. Number one is the rules are maximum amount of shares, 10% of the company ordinary shares. The financial commitment to repurchase the shares will be equal to market price not exceeding 105% of the average closing market price of the 5 days preceding the relevant purchase. The purchase of the shares, as you know, we're listed in both markets, Hong Kong and Milano will take place on both markets. And that your maximum duration of buyback program will be of 12 months from the shareholders meeting approval. Now what I want to add on top of this bullet points is that we will start immediately. And we made some calculations today. If you see the average volume of Ferretti Group shares trading, recently it's around EUR 1 million, today, I think it's EUR 1.5 million now lost somewhere. It's very easy to calculate that by the end of the year, we will be able to buy up to EUR 50 million. So technically, the driver of this is that we have an excess of liquidity and we don't see any better investment than buying our shares. I think we're one of the best capital secrets in the stock market today. I think that the numbers that we're -- in terms of execution constantly providing to the market are not only real, but are actually -- the delivery has been there since 2014. And we don't understand it goes beyond my comprehension, I'm not probably very smart. But we believe that buying our own shares today is the best investment that the company can do better than using shares to buy somebody else at different valuations. We're in a very reasonably low valuation compared to the performances, the backlog, the fact that we do not sell to the dealers. Something that I would like to highlight, our backlog is healthy. We don't sell -- we don't stock. We sell to the end user to the end customer. So we don't see and the Board and the shareholders, they don't understand that they don't see a better investment than buying our own shares, given the current market valuation. So we will try to buy as quick as possible and buy as much as possible, volumes is going to be most likely the only limitation that we have in order to make it quick and to make it now. Sorry for the beginning of the presentation with the mic that was off. If we've got lost in -- you missed something, I'm here to repeat with Marco or now it's ready -- we're ready for Q&A.

[Operator Instructions] We will now commence with the room.

Adrien Duverger from Goldman Sachs. So I have 3 questions for you, if that's okay. The first one, I was wondering if you could please comment a bit more on what you see in terms of consumer outlook in the different regions, particularly in Americas and in Asia Pacific following the numbers you released today? The second question would be in terms of the share of new versus returning customers. You gave those numbers when you did your Capital Markets Day this year, and I was wondering if you could update us on them if it had changed or if it was still the same trend? And my last question will be on the EBITDA margin. So of course, we still have the same midterm guidance of 18.5% adjusted EBITDA margin. This year, it was plus 110 bps to 15.2%. And next year, you have guided to 80 to 90 bps of improvement of the margin. Could you please walk us through a different kind of stepping stones to get to these 80 to 90 bps? And in the coming years, do you still see the same level of improvement of margins?

Okay. Let me start. I think we -- if you can display the annexes, I think Page 39, if you can display this page. It gives you an idea of the customer base that continues to grow globally. Okay. Let's go -- first of all, let's go generally. There's very limited penetration of our industry into the wealthy community. This one tells you basically that the Americas will always play the leading role. Europe and Middle East, very important and Asia Pacific as well. Very interesting point in the following slide in the annexes before getting into the detail of the Americas, this is interesting. There's enormous growth potential, that the market is still totally underpenetrated. Even if there's been expansion in supply in recent years because all the shipyards that went well, there's still huge room to align with the growth rate of the addressable customer grade. If you see the number of Ultra-high-net-worth individuals and the penetration rate, it is basically nothing. We're talking about 1.5%. So the potential is still there for many, many, many years to come. On the United States, interesting. If you make a combination of interest rate going up, even if we don't have a lot of financing actually at Ferretti Group, the clients they don't go with financing. But if you go with the election date, if you go on what's ever been going on in America and generally speaking, you've seen that the last quarter has been a little bit a slowdown, but Stefano De Vivo, which maybe could be also on the line is back from Miami Boat Show. And Vivo seen in Miami, inquiries, customers and contracts, 3 boats have been sold in the Miami Boat Show, Pershing 66, Pershing 7x, not by chance Pershing is #1 brand in the United States and Ferretti 720. So if you consider that in 4, 5 days of a boat show, we had 3 contracts signed, it tells you that we have no expectation not to meet the budget numbers of the United States and Americas in general. To make another example, I showed you the Navetta 50 meters, the ship that we deliver -- that will be delivered in this year, that boat goes to Mexico. So Americas inclines and includes the super huge potential of South America. Interesting question on always the revolving, the repeating, non-repeating -- repeating clients are always -- our -- in my opinion, is the backbone of our company. And repeating clients switching from one brand to the other is the secret of our success. You have many clients that keep one boat and switch from A to B or they decide -- and I can make an example of one of the most important shareholders that we have in the company, if not the second largest shareholder of this company, which is actually switching from Riva to Wally, compete a bigger sailboat and keeping a Wally as a tender. So this is absolutely the strength of this company. The percentage-wise, whether it's higher or lower at the Capital Market Day, I think in the quarter, we'll be able to provide you the latest number. But at the end of the day, the body language of the CEO and the smile on the face of CEO tells you also some more thing, one more thing. When we highlighted 143% more sales in the area of the Gulf and Turkey, namely Bahrain, Abu Dhabi, Dubai, Qatar, Saudi and Turkey, this young generation of owners is going to be, in my opinion, one of the best assets of this company. So what is changing in this industry are 2 key elements: duration of the stay on boat, they spend more and more, more time on boat everywhere because of the connectivity. You can actually work from boat. Two, the fact that the young comers are entering to this business with a huge financial potential for growing, changing, upgrading or having even more than one model. This is a strong signal that you have to read from there. This is not 3x -- 3 generation of people owning a yacht. They just came to this market. And for us, it's a very strategic market. Gulf is very important. Sorry, Marco, on the EBITDA. Now, you have your own mic. CapEx. Question on CapEx on the microphone.

In terms of EBITDA, as we said, this year will increase by 110 basis points, in line with our midterm guidance. The rationale is again the pressing power, product mix and economic scale or better fixed cost absorption. And in the guidance that we provide for 2024, we believe that these are the 3 elements that continue to play the important role. But if I have to choose the best one, it's the fixed cost absorption because we're continuing to grow without increasing in a significant way or better in a very -- increasing with a very light way, the fixed cost. So that's the reason behind this margin increase. And we believe also in the midterm that now is 1 year shorter, the 18.5% is still in our target and as we said in our mid entire period, we're are not taking into consideration in this result some M&A upside, especially from side businesses or ancillary business that we're looking for to announce, most likely this year.