Fnac Darty SA (FNAC) Earnings Call Transcript & Summary

Ladies and gentlemen, hello, and welcome to the conference for the semester results of Fnac Darty. I will give the floor to Enrique Martinez. You have the floor.

[Interpreted] Thank you very much. Hello, everyone. I would like to thank you for being connected today with us for this conference call dedicated to the results of the first semester of Fnac Darty. To present the semester results, I have Jean-Brieuc Le Tinier with me today. Before we start talking about the details of our financial elements, I would like to talk about a few elements which were in the headlines for the past few days. We confirmed yesterday that a certain inquiry was ongoing after the irregularities, which was observed in a very limited numbers of Darty shops. After a series of internal control reviews, we made sure that the public prosecutor of Paris was aware of it since January 2021. And of course, we lodged a complain. This judicial inquiry is not targeting the Fnac Darty Group, but is targeting individuals, which were at the origin of those actions. A few collaborators decided to benefit from a few loopholes existing in our internal control systems in order to act this way. The group is condemning the store-level practices. Even if it's not significative at the scale of the group, it remains illegal and completely unacceptable, especially if we take into account the practices and the ethic of the group and its collaborators. We are actively cooperating to the current inquiry, and we made sure that an external audit firm, PricewaterhouseCoopers, can help us in order to make sure that such accidents can't happen again. I'd like to talk about something else. The group wished to co-participate with a few e-commerce -- French e-commerce stakeholders to the E-Commerce Charter, which is supported by the Ministry of Ecological Transition, Barbara Pompili; and the Secretary of State for Digital Economy, Cédric O, we have signed yesterday this common charter, which aim is to reduce environmental impact of the e-commerce activities. With this project, the group would like to make sure to reach ambitious actions regarding its e-commerce processes and also direct companies and customers in order for them to have more knowledge when it comes to buying online. We would like to work for a more sustainable economy, and we are very proud to be one of the stakeholders of these projects. So now we will start to dive into specific details and talk about the different elements of the financial elements for the semester 2021. As usual, you will be able to find those documents on the website of the group. So now let's have a look at the third slide. I would, first of all, remind you that this semester was reimpacted by the fact that we needed to carry on the health restrictions in all the different territories where Fnac Darty is present. It is penalizing the operating conditions of our different shops and businesses and restricting our usual activities in the -- because we needed to close down a few shops of our group, a few aisles sometimes, depending on the territories. For example, in France, more than 90 Fnac and Darty shops were closed. And all the Nature & Découvertes shops were closed for more than -- for 1.5 months. And as you know, the ticketing services were already impacting, especially during the first semester because of the cancellation and the massive postponing of shows and cultural events. Today, the restrictions are also -- they are not as stringent, but we need to abide by the personal protective measures, especially when it comes to the possibility to have access to a few shops. So now Slide 4. We are really happy of our activity level for this past semester. The different markets remained very dynamic. The online activity remained very important in parallel. And on top of that, we had a good performance in our different shops during this period. And we managed to, once again, attract new online customers during this period of time. So just in a nutshell, we had sound results, which were registered for the first semester of 2021. And now we managed, for the first semester, to have an income of EUR 3.465 billion, which is an increase -- represents an increase of -- by 21% in comparable data with -- due to our sound operational execution and thanks to the work of all the regions and the fact that the different product categories remained attractive. More than 28% of the group were done, thanks to the -- our digital platform, and our sales activity of our platforms remained at -- in present. Our gross margin was reduced -- was maintained. And gross margin rate was -- for this part, was 29.7%. And we managed to have a very important product mix. We managed to compensate the lowering of the sales for the ticketing service for the first semester 2021 because of the governmental measures and also because of the withdrawal of the activities within Nature & Découvertes shops and because of the dilutive technical effect of the franchise. During the first -- second semester, the group managed to change around the trend for this gross margin rate with the dynamic for the second quarter, which was better than during the first quarter. Then the operational result was EUR 34 million for the first semester 2021 with an increase of EUR 92 million compared with the first semester of 2020 for the same perimeter and in spite of the ticketing service and the activity of the Iberian Peninsula, which was impacted by the crisis. So to conclude, we are very happy by the results, which are allowing us to [indiscernible] income and the expected operational results. So now Slide 5, we managed to really focus on different product categories, which was really a boost for our income during '21 semester, especially because the technical and IT equipment really seduced our -- attracted our customers. And we're very successful because of the teleworking context. I mean also in -- and the television was also a key product with the broadcast of the European football game. The cultural dimension was also crucial during this semester, and it was promoted in France, especially because of the Pass Culture. This is launched in the entire territory. And this general addition in the entire territory, we'll help EUR 10 million for -- of 10 million young people of 18 years of age to be able to use a price of EUR 300 in order to buy books, audio products, videos or to buy tickets for shows in all the Fnac shops. Our partnership with the platform, Zeway, allows us to distribute, from different shops and the group e-commerce platforms, swapperOne, the first rechargeable battery scooter, which can be recharged in 50 seconds. The Home & Design segment is really in -- following a good trend and the deployment of our cuisine cooking Darty offer, which was [indiscernible] opening of 11 points of sales, 4 per se and 7 under development as a franchise. And we knew there was an acceleration of the segment of the services. We've launched in June also 3 new offers for the repair services by the subscription Darty Max, which was at the forefront of its new strategic plan every day. So now let's focus on the sixth slide. This semester was truly impacted by the presentation of our strategic plan, Everyday, which has an ambition to be able to help us to embody the new standards of the omni -- of our successful omnichannel retail system of tomorrow. There is a digitalized form and human-focused form. In order to do that, we have a growth of our Europe activities, which would be crucial and at the heart of our omnichannel strategy. We have a gain of 2 million -- gained 2 million of new clients on the web for the first semester associated to the Click & Collect and -- which was very successful. So we really try to have mixed activeness -- the share of the mixed customer -- activeness of customers both on 2 channels, web channel and the brick-and-mortar shops, which was an increase of 4 points on a year by the end of June 2021. And we know that more than 70,000 sales were done this semester, thanks to video conferences or via chats with salers, which shows that we know how to use our new omnichannel trade levels. Also, we carry on with our strategic plan with the opening of 18 new shops and 15 franchise, allowing us to have a new fleet of 923 shops, among them, 359 franchise by the end of June. Then last, but not least, we have a trial period. We led -- it led to the deployment of 4 shops -- shop-in-shops Fnac in the Manor shops by the end of 2020. And now we are going forward in Switzerland, and we announced the opening of 27 shops-in-shops by the end of the first semester 2022. Thanks to these partnerships like that, we're now aiming to have an additional income of at least EUR 100 million in the full year and without a material impact on the free cash flow of the group, expected -- which was expected -- which is EUR 500 million for the period 2021 to 2023 in spite of the investment linked to the implementing of the partnership. Slide 7. So now we really try to develop a series of actions aiming to accompany our customers in order to consume more responsibly and to make sure that our products are more sustainable and for better shelf life. And we have an opening with of WeFix of 16 new points of sales, which will lead to a new number of points of sales of 130 by the end of 2021. So we will try to -- it will have more at-home retail services, representing 560,000 repairs in workshops or at home, which is an increase of 29% compared with the first semester 2020. There is also certain classes, which -- for new trainings, which will be able to work on new apprenticeships of technicians on the integrity of the territory. And for the first time -- for the third time in a row, Nature & Découvertes got B Corp certification, showing its continued commitment with its customers in order to accompany them in a sustainable way of life. And on top of that, the group is carrying on with its actions in other areas linked to its environment and its social responsibility. Because of that, Fnac Darty confirmed its commitment for the climate, especially with the initiative Ambition 4 Climate, showing the concrete commitment of the big companies in the fight against climate change, presenting even projects aiming to reduce the carbon footprint. When it comes to the services, we are trying to accelerate the deployment and the development of the Darty Max. Our subscription repair services for all the household appliances confirm the fact that we would like to go from a transactional model to a subscription-based model. We currently launched 3 new offers in France hence, expanding and covering of new categories of products with small household appliances, TV and cinema, sound and photo and multimedia. This complementary offer is sending us to really meet the expectations of the customers when it comes to the repair services with drive and ambition to reach at least 2 million subscribers for Darty Max by 2025. We are already satisfied by the impact of Darty Max action on the evolution of the customer behavior. We observed that the basket of subscribers of Darty Max is 25% higher than the average basket, which shows that there is an increase, a very crucial increase in value, which is linked to our service-based program. To conclude, I would say that we can keep on delivering the operational point of view, if -- except if we had supplying issues that we anticipated at the beginning of the year. And now we can start to -- we have a good availability of the products for the second quarter of the year. And now there are the first key actions coming from Everyday that are ongoing. And I give the floor to Jean-Brieuc.

[Interpreted] So let's talk about the retail performance, the situation before we talk about the operational performance and the financial performance of the group. Let's start with Slide 9. The France and Switzerland zone is in [ the moat ] for us. So we have a strong growth of 22.6%. So as it was -- as Enrique said, there was a closure of different shops in commercial -- in malls of more than 10,000 square meters for weeks, which led to the closing of -- the closure of 90 Fnac and Darty shops. On top of that, the Nature & Découvertes shops selling products, which were deemed nonessential, led to penalize the sales on the semester. But thanks to new distributor channels, we can make sure to -- make sure that the -- to move the sales from the closed shops to shops which were meant to stay -- could remain open. And also, the performance contribute to progression even if there is a high comparison base and also the different equipment linked to -- the -- what has to do with TV, the telephones and IT products were increasing as -- even if there was a shortage of components mentioned before by Enrique. And also, people also try to be more comfortable at home, so that's why they started to buy product of better quality. The air climatiseur was the only category, which was not as successful, because there was not so many heatwaves as the past year. And also the editorial products was -- expanded to a strong growth, led by the book sector. We benefited from the maintenance of the possibility of shops to remain open -- more shops to remain open compared with the last year and the launch of the Pass Culture for the young people of 18 years of age in all the Fnac of France. The services are increasing. It is linked to the franchise, which is showing an increase of more -- by -- up 63% of the sales on the semester, which is held by the new proximity-format and also by a new reciprocate system on the first semester and also a very good level of sales by the end of 2020, the ticketing services and also showing the impact of the semester after the government measures and forbidding people from gathering and also compared with the beginning of 2020, before the first lockdown period, which was not impacted by those measures. These strong dynamism of this income with a good management of professional costs allowed us in France and Switzerland to have an operational result -- recurring operational result of EUR 33 million, which means an increase of EUR 78 million compared with last year. So now Slide 10. Let's talk about Iberian Peninsula. There was a growth of the -- of income of 18.2% compared with the last semester. I would like to remind you that those shops were opened later than the other regions. And after the first quarter, the growth was 3%. The area has a strong growth of 30% on the second quarter. Also all the product categories were experiencing a growth, especially phones and television, sound systems and the books. IT had a very strong growth, which is more normative because of the basic very high effect. And then there is also macroeconomic environment, which is penalized by the health crisis in Spain and Portugal and also strong competition this semester, especially for technical products. So that's why we penalized the operational -- the recurring operational results of the area, which remain negative on the first semester with minus EUR 4 million. But it is increasing -- increased compared with the past year with plus EUR 8.5 million. So now let's talk about Belgium and Luxembourg in Slide 11. So the Belgium and Luxembourg areas is impacted by a very strong growth of its income, an increase of 13% for the comparable data of the first semester. It is helped by this sound performance of different shops and the dynamic of the online sales. There is also the help of the teleworking systems which are implemented in different companies, boosting the sales for the -- also appliances and books. So there was a [ pure and commercial ] result of plus EUR 5.6 million, an increase of EUR 5 million compared to first semester of 2020. So now let's talk about the P&L results in the Slide 15 -- Slide 12. So I won't talk about the gross margin rate, Enrique talked about at the beginning of the conference call. So let's talk about the cost we mastered. We controlled the operational costs during the semester, which allowed us to have the income of 300 points of -- as a base with 28.7%. This reduction was realized in spite of the increase of the personnel charges. And as Enrique said, if the operational result is higher than what's going in the first semester of 2018, which was EUR 32 million, that's the same scope and taking into account Nature & Découvertes for the full year and outside of BCC, [indiscernible]. It shows off the ticketing services into Southern European countries. So this performance allows the group to reach the growth -- the recurring operational gross margin rate for the first semester 2021 on line with the one of the first semester 2019 for the comparable scope. So that's why when it comes to the nonrecurrent operational cost, it is EUR 3 million, which is really below what's going on for first semester 2020. We had depreciation of the Darty brand for EUR 30 million and the cost directly linked to the health crisis of EUR 6 million. It means that the operational result is EUR 32 million. So we had a new financial structure, which is an extension of the RCF budget line -- tax line, thanks to the extension of the -- of payment extension of the guarantee of state-backed loan numbers last March. But second half compensated the interest gained -- registered [indiscernible] of our debt in 2021. So the net result of the group of the consolidated system is a growth of EUR 136 million compared to the first semester 2020 with EUR 60 million after second [indiscernible] on the first semester 2021 with a tax adjustment [ related to ] divestment of the Dutch subsidiary, BCC, in November 2021. So now let's talk about the available free cash flow by the end of June in Slide 13. So the operating free cash flow outside of the IFRS 16 are EUR 577 million, which is a decrease compared with last year. This withdraw -- this decrease comes from the negative evolution of the working capital. So the first semester 2021, we really constituted our stock with the -- to account the sales in growth. And we anticipated the fact that we needed to buy new goods because there were shortages of a few components necessary to the manufacturing of a few products sold by the group. So when it comes to the capital expenditures, the group maintained a good management of its operational investment in the semester, which was a decrease of EUR 4 million when compared with last year and reaching EUR 46 million compared with the Everyday plan. The group is trying to maintain it in yearly investment spending with a normative level of around EUR 120 million outside of the investment dedicated to amortization of logistic equipment, which could be impacting -- which could have an impact during the fiscal year and outside of investment linked to the partnership with Manor. So the group remains confident of the fact that we would be able to reach EUR 500 million of operational free cash flow generated in the period of time 2021-2023. So now let's say a few words about the financial structure, and you will be able to see all of that on Slide 14. The financial situation of the group is healthy with more than EUR 1.4 billion of equity by the end of the first semester. The financial debt -- net debt -- financial debt of the group was positionally higher at the end of fiscal year because of the seasonality of our activity. So by the June 30, 2021, our financial -- net financial debt of the group outside of the IFRS 16 was EUR 454 million. On top of that, just as a reminder, the group announced last March the success of its new financing strategy, which was reimbursing of all the state-backed loan up to -- which was up to EUR 500 million and to extend the credit line -- liquidity of credit line to EUR 500 million with a maximum maturity in 2028. And also, we really tried to ramble the senior term loan facility of EUR 200 million, which we had reached EUR 209 million in April 2021 and also placed convertible bonds of EUR 200 million by 2021. Thanks to this new financial structure that the Fnac is optimizing the average cost of its debt with no major deadline for the reimbursement before 2024. Therefore, the group is now, by the end of June, around EUR 500 million of free cash flows, allowing us to have an RCF of EUR 500 million, which makes us very trustful regarding the uncertainties to be able -- in order to face the -- by trusting our positions, the potential negative evolution of the health crisis. Then by the end of June, the lever -- that net EBITDA outside of the IFRS 16 calculated on 18 months was 1.1x. So it means that we will communicate once the annual year-ended results, after the shareholders come back with the -- the feedback result of the shareholders for 2021. And I'll give it back -- floor back to Enrique in order to back the group...

[Interpreted] Thank you very much. As you understood, it's very complicated. The first half needs to be encouraging. We want to review our expectation for higher expectation. The first half is quite encouraging, but our activity is still impacted by the health -- the sanitary conditions. The new French government announcement seems to mean that there will be an impact on how to access big shopping centers. And this could have, in turn, impact on the exploitation of our stores. So we are very careful about these measures. The economic turnover in the Iberian Peninsula is slower than expected. In consequence, Fnac Darty stays confident, but still careful on how we will perform on the second half. And we will stay focused on our commercial execution to fulfill the big commercial meetings we will have, the big events we'll have to also manage our costs and to generate cash flow with our objective from the Everyday plan. And that is why with the first half that is encouraging, but within the unsure sanitary environment, the group will review the expected 2021 with higher ones. We await turnover to increase by 5% in comparison to 2020. And we expect an operational result -- current operational result between EUR 260 million and EUR 270 million. That is all I wanted to tell you today, and I am available with Jean-Brieuc to answer your questions.

[Operator Instructions] We have our first question from Clement Genelot, Bryan Garnier.

[Interpreted] I have 3 questions. The first one is about the upgrade of the guidance on sales. Is it due to the very good performance on the second half? Or is it because the future performance will also be higher on the second half. And what is the schedule? Is it between May-July? What are your expectation? Is there a strong reducing of our activity with the opening of bars, restaurants and others? And final question about the cash flow. There is a risk here. The cash flow could be lower than in 2020. In your opinion, will the [ BFR ] change? Will it be positive or negative? Or will we need to renew our inventories again?

[Interpreted] Thank you for your questions. I will answer the first one, and then I'll let Jean-Brieuc answer the others. The first half, as we see, was very encouraging. And for the second half, just to remind you of the fact, last year, the second half was really huge. We had an increase of 8% and a real increase of our results. And our forecast here shows that we could have a similar result or a slightly lower result. So we expect the end of 2021 to be as 2019. But we think that we were very strong on our first half. We will be strong as well in the second half, but slightly less strong. And we take into account a lot of characteristic of features to calculate that. So this is just a forecast. We cannot be too precise. We think that we are on a good path. And we will be able later to give you more details on the end of 2021. But we think that the turnover will be around 5% of increase. For July, we cannot comment because as you know, it's still current. We cannot comment on the current situation. But we do not anticipate brutal changes in the current growth. So of course, we stay very careful. But today, we have a turnover that is higher than last year for the same period. And I think that the next week will be decisive for our group's success.

[Interpreted] This is Jean-Brieuc. The [ BFR ] the end of the year, it's a bit lackluster. It will depend on how we do in December. And of course, it could mean anything. It could go in any direction. We can see that -- on that -- for the last half of last year, we had a great [ BFR ] because we had low inventories. And now we have higher inventories. So it might impact the [ BFR ] negatively. As for the -- so for the real estate, it well depend on the end of the year. As for the cash flow, there will be an increase of the EBITDA compared to last year. There will be, in 2021, the decrease of [indiscernible] and a decrease of corporate tax. So we will benefit from that. Usually, we pay 40%. And here, it's going to decrease, and then it would be 30%, 35%. As for cash loan, it will also decrease. So that will help with our cash flow. And again, the working capital requirement will probably decrease, too. So yes, the few details I can give you about how the cash flow will look at the end of the year. I can't give you all the details.

There is another question from Florent from Midcap.

[Interpreted] Congratulations for the results you presented tonight. I have a question around the guidance. To go back to the July performances, I know that you don't want to communicate them, but can we have a trend for April, May, June maybe? Are there any differences between those months? Because as you know, we have a minus 5% on the second half. So did you see any slowing -- slow -- any decrease like in Maisons du Monde? As for current operating margin, is it 5.2% for the second half? Is it -- it would be level and seen since 2016. So what could explain that 5.2% margin? That's very, very low margin. I know that the ticket sale has been impacted, but we also integrated Nature & Découvertes, and we also split with BCC. So a bit -- this should have an impact as well. I would like more clarification on that.

[Interpreted] As for April, May and June, the comparison is really not easy to make because last year in June, we had a very, very successful month, so we cannot compare. However, what we've seen here is that we've expected less, and we had a very good trimester, a very good quarter. And of course, sales have helped, but it's not as much as for our competitors. So yes, we could be at the same level of 2019, and that would be very satisfying because it means that we've overcome the crisis and we've succeeded to have sales online and in stores. And we could have the same profitability rate as in 2019. So we would be very happy with that. And we're very satisfied with the performance we expect.

[Interpreted] And can we have an idea of the impact of the ticket sale on the EBIT to know what the margin would be?

[Interpreted] Well, we won't give you the numbers, but it's quite significant. Two years ago, like-for-like, we had EUR 278 million. So that would be our level for 2019.

[Interpreted] Another question, please. How about online sales profitability. Can you tell us -- can you isolate that number and tell us how much it helps the margin?

[Interpreted] It's a very important question. As you can see, the profitability of the group is not an issue. It depends on many, many factors, on services and accessories and goods. However, we showed already at the end of 2020 that with 25% online sales, we can gain 7 to 8 points more in comparison to 2019. So if you see, we've shown that our online sales system is working. It's a system in itself, and that's also our orientation at Darty to do more -- to a subscription system. We need to have a cost margin profitability rate that is positive, and that's the case for the sales on the online sales.

[Operator Instructions] We have a question from Geoffroy Michalet from ODDO BHF.

[Interpreted] Congratulations for this online performance that is still growing. That's very impressive, even if the stores might close and the ratio has been turned. I want to talk about the online performance at the end of the year. What could it mean in terms of additional logistical costs?

[Interpreted] The logistic CapEx are not a concern here. For this year, the system is already in place, thank God. It will really depend on the new or the new sanitary restrictions, will store close or not. It will depend on that. Because at-home delivery through stores can be impacted. We have a mix, it's about 50-50. It's quite important. We hope that the stores will stay open to sale, of course, but also to maintain online sales. So we think that it will stay coherent with 2020. We'll sure wait and see. But one thing is sure, we've grown, we've matured in -- between 18 months, we had 7 million more clients on our online platform. So of course, this has an impact on our online sales, and it didn't happen overnight. So we think that there will be more and more hybrid behavior by our customers. And this would probably be the consequence of the COVID crisis. We will have a new generation of clients, of customers who maybe don't go to stores.

Next question is from Marie-Line Fort from Societe Generale.

[Interpreted] I had 2 questions. The first is, have we gained market share on the first half, especially in comparison to Amazon? And second question, I would like to better understand if in your forecast for the whole year, you -- and especially for the second half, if you've integrated an increase in prices, which probably will happen at the end of the year? We know that for the fourth quarter, prices might increase. So is it something that you've included? And can you tell us more about what it means for the fourth quarter? Or will it be rather for the first quarter of 2022?

[Interpreted] Well, thank you for your question. Amazon is very difficult to -- it's really difficult to have the results of Amazon. They're not really transparent. So I can't really comment. We need more information. But if we look at what we have, I think our performance has been really good, better than everyone in the country because of online service, also because some of the stores managed to stay open. So we're very satisfied with our place in the market. I can't compare our position to Amazons. But I think that in comparison to the whole market, we are doing quite well. As for increase in prices, yes, we've heard the same thing. I think the increase will be quite insignificant and the impact as well. For the past few months, we've benefited from an average increase in prices, not for the same products, but there's a mix. There are higher entry products. And it's happened for the past few months. And I think this will also have consequences for our group to build a longer-term strategy to be more viable. So I think it's a good thing for us. It goes in the right direction. And the inflation we're forecasting, again, we think it's going to be very low. And of course, it will be up to the customer to pay for us retailers. We cannot absorb this increase. So the customers will have more products to choose from, but some of them will be higher prices. And this might help us to absorb this inflation. We think, however, that this phenomenon is linked to very concrete and contextual elements such as raw material -- lack of raw materials, but we're not worried.

Next question, Clement Genelot, you have the floor.

[Interpreted] A question about inventories. With cargoes, with -- are we at risk of lacking our star products or not?

[Interpreted] Thank you for your question. I think that our supply chain is under pressure since 2020. It stops, it increases, and it's also under pressure because of the growth. If you look at 2020, there were lots of pressure because our product categories were highly demanded. Today, we have an inventory level that is at its highest since the beginning of the crisis. So our inventory pre-COVID is the same as during now. So we're better placed today than during -- at the beginning of the crisis. We are very careful for the next few months. We're going to keep an eye out. We are looking at our orders. We are ready to face our demand. And we hope that the phenomenon that we've seen during the crisis will slowly disappear. Of course, some supply chains will be under pressure, but we hope that our inventories will make up for that pressure. If there are short-term pressure or significant pressure for some group, some stores, we will be able to absorb them. We are really careful about our availabilities for products.

We have a question in English now. Yes. We have a question from Adam Crocker from the Logbook Investment. Please go ahead.

Hopefully, you can hear me. I had a question about the Culture Pass. And if you could just talk generally about the longer-term impact that it might have. And if there are any programs you have in place to maximize the potential there.

It's a French program for the last 4 years. So Fnac has been one of the first players as in cooperating with the French government to create this program in terms of technology offer and the way we have being -- proposed for the young. So the pilot runs for 2 years, and now they decide to go for a full rollout. So the first figures are quite impressive because the young -- the potential is around 10 million new youngs every year. And for each of them, this EUR 300 available to expanding culture products through stores. So this is dedicated to address this young generation for the stores, and in particular for the culture products, with big impact on books category, in the other categories like gaming and records and themes, too, but books in particular. But it's quite [indiscernible] because this is the main -- I would say, this is one of the main objectives for the government is to put the reading back on the young generation's hands. So the way to optimize that is to be inside this platform, open the global inventory online for the young, geolocate on the -- for the whole stores. I think -- in fact, it's the only channel national-wide that is able to propose of this level of inventory and catalog for the young. That's the main reason why we are able to catch a significant part of these programs that give us a good impression that how much it can be on the next coming month. And it's a program that is proposed that not just for this year, it's to be projected for the following one. So it's a pretty good news for the cultural products. But probably you know that Fnac is the main leader in all of them, both for records, movies, games. So for us, it's a good decision.

We have no further questions.

[Interpreted] Well, thank you to all. Thank you for being here and for all those questions. I wish you all good holidays and a good summer time. And we will see or we will hear each other in October for a quarter meeting as usual. Thank you, and have a good evening, everyone.

Ladies and gentlemen, the conference has now ended. Thank you for taking part. You can now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]