Lalique Group SA (LLQ) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Annual 2023 Results Conference Call and Live Webcast, I'm Sasha, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Roger von der Weid, Executive Vice Chairman. Please go ahead, sir.

Good morning all, and welcome to our conference call in connection with the full year 2023 financial results of Lalique Group, which we published earlier this morning. My name is Roger von der Weid, I'm here on the phone together with our CFO Alexis Rubinstein and our new CEO, Nina Muller. As we communicated in December, going forward, I will be focusing on my role on the Board of Directors as Executive Vice Chair after 18 years as Chief Executive, and I'm pleased to introduce you to Nina as my successor.

Thank you, Roger, and good morning to everybody on this call. It's a real pleasure for me to be here and to have this opportunity to connect with you and to share some exciting updates from the Lalique Group. I would like to thank each and every one of you for joining us today. Since assuming the role of CEO in February, I have visited many of our locations. Our manufacturing site in Wingen-sur-Moder, Ury and Ury, our subsidiaries in the U.K. and the U.S., retail boutique in Paris, London, Miami and Zurich. And of course, I spent lots of time in our offices in Zurich and Paris, I will continue to flow the Lalique universe and my aim is to visit all operational entities in the first 6 months. So I have encountered and talked to as many people as possible. most importantly to my colleagues, to our employees, but also to customers and stakeholders. What I have experienced within our company is a very, very good team spirit, with a lot of passion and commitment to the brand and they will drive to move forward. I really continue to be inspired by the richness and the diversity of our people and of our business. I've been warmly welcomed, I would say, and I can honestly say that I already feel like home. Lalique Group is an incredibly exciting company, and I'm looking forward to working with my team to establish the Lalique Group as a first-class player in the luxury goods market. We have a rich heritage, a diverse portfolio and broad international presence to build on. So I see a huge potential to grow. Thanks for having me here. So let's move on to Page #2. As it is early days for me, just over 2 months ago at Lalique, it will be Roger, Alexis and myself to present the full year results of the Lalique Group. Roger will start with a summary of the past year, then Alexis will provide a more detailed overview of the 2023 financial results. And I will then turn to our business priorities and the financial outlook. After the presentation, we will be happy to take your questions. I now hand over to Roger again for the first part. Thank you, Roger.

Okay, Nina. Thank you. And to start, let me remind you that the slide presentation is available on the Lalique Group website. And as usual, we will go slide by slide. So let's now go directly to Page 4 of the presentation, which summarizes key takeaways for our business performance in the past year. In terms of growth, the group delivered a solid performance in 2023 despite a challenging market environment. Total sales amounted to EUR 179 million, corresponding to a 5% growth compared to the previous year. All our segments contributed to this growth, which, of course, reflects the strength of our brand portfolio. That said, we were confronted with difficult production conditions, especially in the first half of the year. This included longer lead times for product components for our perfume lines in particular. In the first quarter of the year, unfortunately, we were also confronted with an electrode manufacturing defect of our new melting furnace. And although our business performance improved in the seasonally stronger second half of the year, we could not fully compensate the shortfall from the first half. With regards to cost, it is no surprise that 2023 was characterized, in particular, by general inflation and significantly higher energy costs, which almost trebled. We managed to partially offset these inflation effects by price increases, albeit with certain delays for the various concerned businesses. Profitability at EBIT level amounted to EUR 7 million in the period under review, with an EBIT margin of 3.9%. Net group profit was EUR 2.4 million compared to EUR 9.6 million in the prior year. Based on these results, but also in view of further planned investments in our production capacity and new projects coming up in 2024 and 2025, the Board of Directors have decided to propose to the upcoming AGM, Annual General Meeting on May 29 that no dividend to be paid. With this, let's now turn to the next page, which summarizes key business developments in the past year. First, in a perfume business. We achieved solid growth overall following the strong growth in the 2 previous years, 2022 and 2021. I've mentioned before, perfume production and thus, our sales efforts as well were temporarily affected by supply shortages for certain components. As a result, we significantly increased inventories over the course of the year, which obviously came at a price in terms of working capital. Second, our crystal business ended the year with good momentum. And we were very pleased to see that crystal sales saw a strong rebound in the second semester on the back of a high order backlog and increased capacity at the manufacturer, enabling more efficient and swifter product shipments. The third point I want to highlight is our sun protection brand, Ultrasun, which continued to recover after the setback during the pandemic. In 2023, we achieved further growth, which was mainly driven by two of our key markets, namely the U.K. and Switzerland as in the past. In addition, we saw a good momentum in Germany that we are eager to further build upon. Fourth, and turning to the whiskey distillery, the Glenturret. We saw continued strong whiskey sales and the demand for the distillery's tourist and gastronomic offerings also developed well. Let me also highlight that our Glenturret Lalique Restaurant was awarded a second Michelin Star in February 2024. As a last point on this slide, I'd like to highlight that we acquired a majority stake in the Chateau Lafaurie-Peyraguey vineyard in the [indiscernible] of Bordeaux last year. And similar to the Glenturret, the aim is to more closely integrate the vineyards into the world of Lalique, leveraging synergies with its crystal glass and hospitality business. As you are certainly aware, of course, we have been operating a Lalique hotel restaurant in the winery chateau since 2018. And with this, let me now hand over to Alexis, who will give you a more detailed overview of our financial results in the past year.

Thank you, Roger, Nina. And also from my side, I would like to welcome you all to this conference call. So to look at our full financial results, let's go to the Page 7, where we can see an overview of our P&L for 2023. Here, we see that the revenues went up by 5% and 6% if we exclude the one-off extraordinary income from 2022, but we will take a closer look at our top lines by segment in the slide that will follow. The gross profit margin decreased from 58% to 55.5% reflecting the significant inflation, in particular with the energy costs during the first half of 2023. And also, we had some, as Roger said, some issues with the Crystal facilities and [indiscernible] during the Q1. These issues have been solved during Q2 and allow to the Crystal factory to recover very well during the second semester. In addition, as Roger said as well, the sales price increase was only effective during Q2 and Q3 and only partially offset the inflation of cost and energy costs during the first semester. Cost increased personnel cost and cost increase reflects inflation and as well the recruitment of staff in both factories in order to increase capacity during 2023. The depreciation and amortization decreased in relation to the impairment reversal of EUR 1.5 million related to the revaluation of u Lafaurie-Peyraguey. The EBIT decreased down to EUR 7 million compared to EUR 13.2 million in 2022 including this reversal of income. The financial expenses went up in relation to the interest rate increase as well as the increase in financial liabilities during 2023. With this, the net profit ended up at EUR 2.4 million in 2023. So let's now turn to the Page 8 with an overview of the result breakdown by our business segments and brands. So here, you can see our performance by business segment, and also the new segment creating this year with the wine and spirit consisting in the whiskey distillery and also the newly acquired vineyard Lafaurie-Peyraguey Sarl in November 2024 -- '23, sorry. We see here that Lalique brands still represents 54% of the total business and that the main contributors for the EBIT, once again, the perfume business, Jaguar and the other brands. The other brands segment, which is now composed by Brioni, Bentley, Gres, Lalique Beauty Service, our perfume filling factory, Lalique Beauty Distribution, the company in charge of the distribution in France for perfume, also Lalique Tamer Beauty for the Middle East, and when we see that the Superdry license and Mikimoto new license will be included in the segment of the brands in '24 and '25. So let's now move to the next slide to Slide 9 to take a closer look at our -- at the Lalique segment. Here, the total operating revenues increased by 3%, 5%, excluding the EUR 1.7 million one-off extraordinary results. And despite the perfume sales decreased by 5% due to the challenges we had in the Middle East distribution. Crystal sales increased by 5%, 7% excluding this one-off effect of 2022 across almost all markets, thanks to a strong performance of the factory during the second semester after having resolved all the issues with the electric furnace. Hospitality grew by 16%, mainly driven by growth of the Lafaurie-Peyraguey hotel restaurants in Bordeaux. Personnel cost increase reflect the inflation as well as the recruitment of staff for our production facility in Wingen and cost increase reflects also the recent investment done in Wingen in order to increase the capacity of our crystal factory. So after a very difficult first semester and Q1, in particular, Lalique achieved EUR 2.9 million EBIT during the last 6 months, to end up with an EBIT of EUR 1.2 million on a full year basis. With this, let's go now to the Slide 10 with the Ultrasun segment. We see here revenue -- that revenue went up to EUR 16.4 million in 2023 plus 10%, especially thanks to the U.K. market. And despite the step back in China related to the change in distributor in the region. So China will be, again, a strong driver for the growth in 2024. The gross profit margin rate slightly decreased in 2023, reflecting higher production costs but as well as the devaluation of the GDP against the CHF and euro. Total costs have decreased by 3%, consequently, EBIT reached EUR 0.6 million compared to EUR 0.5 million last year. So now let's go to the Slide 11 and the Jaguar segment. Operating revenues increased by 7%, mainly to positive development in the DACH region, but also in all other markets. We have here a decrease in gross profit margin, reflecting inflation and also production costs increased during the year 2023. Consequently, EBIT decreased to EUR 2 million this year. Let's now turn to the Slide 12 and the Wine & Spirits segment. So here, the segment consisting in Glenturret and the newly acquired Lafaurie-Peyraguey vineyard. The Lafaurie-Peyraguey vineyard contributed not materially this 2023 because it was -- the closing of the transaction was only done in November 2023. So The Glenturret increased its revenue by 21%. Every development contributed to this performance, touristic activities, restaurant, wholesale as well as retail and as well as private sales of Lalique decanters. Personnel costs increased due to inflation in all other segments, while OpEx increased reflecting inflation and growing business in all the segment of Glenturret distillery. EBIT was at plus EUR 0.8 million versus minus EUR 0.9 million in 2023, including the reversal of EUR 1.5 million impairment at Lafaurie-Peyraguey Sarl. Let's now go to the Slide 13 with Other brand segments on which we can see that apart from Bentley Fragrances for which sales were down by 25%, after a strong performance in '21 and 2022 by increasing its revenue by 64% and 43%. We see that all other brands like Gres achieved a plus 42% increase in 2023. Samourai increased its revenue by 11%, Brioni by 17% as well as Lalique Beauty Service, which increased its revenue by 24%, reflecting also an increase in the third-party sales in 2023. So EBIT ended up at EUR 3 million versus EUR 5.4 million in 2022. So to conclude this part, let's go to the Slide 15 to take a closer look at our balance sheet. Here, we see that the increase in net working capital and especially in the perfume stock due to supplies issue has affected our liquidity by EUR 16 million in 2023. The increase in property, the investment in property and financial in our production facilities have been financed by financial debts and the increase in financial liabilities reflect this financing of investments in 2023. The financial debt has been also significantly increased in 2023 due to the restatement of the license minimum payment commitment as financial liabilities instead of current liabilities. Our balance sheet remains solid, and our equity ratio remained strong at 47.3%. So with this, let me hand over to Nina with the last part of this presentation.

Thank you, Alexis. So let's move on to Slide 16. We'll start by looking at our -- at the 4 priorities that I see for the whole group. First, I said it at the beginning already, we will continue to work consistently on establishing the Lalique Group as a first-class player in the luxury goods market. And I'm very confident because we can build on our rich heritage, savoir faire and we really have a strong brand. Second, we will pursue growth opportunities within our existing businesses and maximize synergies between them. The dynamic and the thriving team that I have met in the past give me the confidence that we will excel in that. Third, especially in an uncertain environment, more and more challenging, we need to strive for efficiency and operational excellence, embracing a culture of operational excellence will help us to maintain a competitive edge, deliver exceptional value to our customers and ultimately achieve sustainable growth. And the first priority, and this is one that is particularly close to my heart is one that I believe in deeply. Together with my team, I will promote a culture of sustainability, respect and diversity in all aspects of our organization. Why is that? Because I truly believe that by prioritizing these values, our organization will not only create a positive working environment but also contribute to a long-term success and a positive impact in the community. So let's move on to Slide #17. Here, I would like to highlight the activities we will focus on in 2024 and '25, I have grouped all our activities into 3 businesses across the Lalique Group. So our Lalique Crystal business, the Beauty business and the Hospitality business. Let me start with the Lalique Crystal business. This is our heritage. We are known for excellence in craftsmanship and design, and I repeat, we will build on this. I have started working with a diverse internal team from different parts of the organization already to sharpen our vision and our positioning of the brand. This will then be the basis of all the strategic work that we are doing. We are currently also optimizing our strategic product offering and will explore untapped opportunities. I'm optimistic that we will be able to do that with the competent and passionate people I've met already. We will strengthen our strategic market presence, expanding in the right markets and channels, always with an omnichannel approach. We will open our flagship store in New York by the end of 2024, very exciting. This will be an important step to strengthen our positioning also in the U.S. market. And finally, I mentioned operational excellence in the group priorities. We will invest in production capacity and innovation in our manufacturer in Wingen. So turning to our Beauty business. We are planning new launches across all brands in our portfolio, as always. But there are a few highlights that I would like to mention. In August, we will launch the Superdry fragrance, a collaboration with this very strong global fashion brand, and we are coming up with a very exciting new concept. We will continue to prepare for the launch of a wonderful luxury Mikimoto fragrance in 2025. We will establish nurture and maintain our strong licensing partnerships and we will explore new ones. Again, to maintain our competitive edge, we will invest in manufacturing capacity and innovation at Ury as well. With Ultrasun, we will expand in the Muller drugstore network based on the success we achieved in Switzerland, and we'll move into the DACH region and Eastern Europe. We also furthermore, we will launch with our new distribution partner in China and looking and expecting strong growth in this strategic market. Last but not least, returning to the hospitality business, which includes all our restaurants, hotels, but also the Wines & Spirits, everything that allows you to indulge and enjoy. So what are we doing here? We will continue to exploit synergies with the Lalique brands and create exceptional immersive experiences. This is what makes our offering truly unique and distinctive. We will also capitalize on the cultural differences of the regions in which we are operating. Wherever we are, be it the Glenturret, our oldest working whiskey distillery in Scotland or Villa Rene Lalique in Alsace, we are always deeply integrated with our neighbors and local partners. We will continue to drive innovation and expansion at Glenturret. Here, I'm talking about projects and expansion plans like the Glenturret gin. And we are all very excited about the project Villa Florhof. We're in preparation for the opening of this attractive hotel restaurant bar concept in Zurich which is due to open in May '25, a new concept that will appeal not just the locals but also to international guests. So as you can see, we are still aiming and shooting for the next star. Let's move on to the last page in the presentation. It is about the financial outlook. Before I start talking about financial outlook, I want to make a few remarks on the market environment. The past year has been [indiscernible] and again that the current global economic environment and the geopolitical situation is characterized by uncertainty, and we do not expect that this will change for the foreseeable future. That said, from today's perspective, we expect the impact of inflation to be less pronounced in the current year than in '23, and particularly, we expect the energy costs for Lalique Group to be significantly lower than their peak level last year. This brings me to our financial outlook. Looking at the current year, we expect sales growth in the high single-digit percentage range -- in the high single-digit percentage rate. And we expect profitability in terms of EBIT margin to increase compared to 2023. Regarding our midterm goal, we stick to our midterm goals. We remain committed to achieving a gradual increase in the EBIT margin to between 9% and 11%. And as previously communicated, we expect to reach the target range in 2026. As always, the outlooks are subject to unforeseeable events. With this, I would like you to thank you very much for your attention. We are now ready to take all your questions. Roger?

Yes. As a preliminary comment, this is my last earnings call. And given that Nina started only 2 months ago with the group. As in the past, I will answer general questions regarding financial year 2023. And Alexis will provide explanation to specific finance-related matters and questions. And of course, Nina will take questions related to her position as new CEO as well as questions related to her plans, strategy and outlook for the group. So let's start. And operator, please who is the first.

[Operator Instructions] First question comes from the line of Patrik Schwendimann with Zurcher Kantonalbank.

Patrik Schwendimann, Zurcher Kantonalbank. You have a lot of projects for '24 like the mentioned better distribution for Ultrasun in Europe, but also new distribution partner in China. You have this new perfume Superdry and other projects. Could you please give us some flavors how much additional sales you expect from all these projects? That's my first question. Then second question regarding the energy costs. Could you remind us how much this was in '22, in '23? And what's your best guess here for '24 in terms of energy costs? Then number 3, regarding the margin guidance for the current year '24. You have mentioned that you expect an improvement versus '23 at a very low base with this 3.9% EBIT margin, what does this mean for the current year? Should we expect something like 5% to 6% EBIT margin? Where do you expect a substantial improvement in terms of EBIT margin for the current year in which segments? And then finally, you just -- you confirmed midterm guidance for '26 to reach 9% to 11% which is a substantial gap to the current performance. What assumption do we have here for the Lalique brand in terms of EBIT margin for the midterm?

Patrik, thank you for questions. I'll start answering the first one on the various projects '24. Yes, as you said, we have various new projects, but we don't consider Ultrasun and Superdry being totally new, given that Ultrasun has been in China and of course, than the pandemic hit and we were set back and we started now with the same distributor who -- that distributes our perfume brand. So we know that team, and it's a very -- it's a good company. So it's a little bit challenging to tell you exactly what -- how much this will reflect in additional sales in '24. But I anticipate that the growth in sales for Ultrasun alone should be in the same range than we saw in '23 compared to '22, which was roughly 10% or 11%. As far as Superdry is concerned, the launch will occur in July, August in selected Superdry stores and, of course, more importantly, in our own global beauty network. So we -- of course, the brand is totally new in the fragrance world, so it will be time to build up. But the forecast for '24 is roughly at EUR 2 million. And of course, depending on the sellout in the first month, we'll see how many reorders we will receive before the year-end. I hope that answers your question, of course the other projects, be it our Fabric Frontline, this is only due to start in 2025. And we have also won major projects on the Lalique retail side, which is our flagship in New York, but that will open around November this year. So it won't have a huge impact in sales, but definitely a huge impact in terms of brand visibility and PR, et cetera. On your second question, you asked for the evolution of energy costs. So back in '22, we look -- the energy costs for the whole group were approximately EUR 1.8 million or EUR 1.9 million. In '23, they skyrocketed to EUR 4.8 million. So as I said, it's almost trebled. And for '24 and '25, we have -- last year, we have signed new forward contracts. So we expect that in '24, energy costs will decrease to EUR 3 million approximately and in '25 to EUR 2.5 million. Of course, this is subject to general pricing evolution and also to gas, which we were not able to fully cover since we still operate our old put furnaces in the crystal manufacturer on gas. That's for your second question. On the EBIT forecast '24, yes, we said that, obviously, we expect an increase compared to the low '3 EBIT margin of 3.9%. But of course, we don't expect to get near or very close to that midterm guidance of 9%. But let us keep this range and let's not comment any further for the time being. And then your last question is the EBIT '26 and the assumptions, in particular of the evolution of the Lalique segment EBIT. So looking back, I think it's interesting to look back at '22, where we had a very good year in particular, in the Lalique segment, even though there was an extraordinary income, but we had an EBIT margin of 4.5% back in '22. I think that for us in order to achieve the group overall EBIT guidance, that 9% to 11% range we would need to go back to this level in the Lalique segment, meaningful to ideally 5%. I would say that should be the target range.

The next question is from [indiscernible]

My first question is about the higher debt ratio. And this would be, do you reach any bank covenant with this much higher debt ratio you have now? And then second question, also a follow-up on this topic. Do you consider a capital increase regarding the high debt? And what is the opinion of -- and the shareholder, Mr. Muller on this, would we participate in a capital increase? And last question, last question for Nina Muller while repositioning Lalique Group, do you consider to sell any bad performing brands like the crystal business? So do we have plans for -- other plans regarding M&A?

Yes. I will answer the first 2 questions. And then, of course, I'll let Nina answer the third one, which was asked directly to her. Yes, our leverage ratio increased to close to 5 if I'm not mistaken, that's, of course, mainly due to the increase in working capital, which was necessary to ensure shipments of finished goods, especially in the perfume segment. We expect working capital to decrease especially in the second half of the year. So we are confident that the leverage ratio will also return to a more acceptable level. Now of course, we have some financial or credit contracts with banks and some of them have covenants in there. These are twofold. Most of the time, it's the equity ratio, where, obviously, we have no issue at all. And then in some of them, not in all of them, we have, of course, a covenant related to leverage ratio. And we already contacted those banks. These are 2 banks in France, actually, and prewarn them about what was coming. And basically, the answer was, okay, no problem for this time, especially given our 2024 forecast and budget where, again, we expect leverage ratio to go down, especially also given that we anticipate a higher EBITDA. So we don't anticipate any issues on the bank front, if I may put it this way. In terms of capital increase, no, we -- right now, there are no plans for any rights issue or capital increase. As surely, you recall, we increased the capital to finance the acquisition of Lafaurie-Peyraguey last fall. But of course, this was only [indiscernible] who subscribed to new shares -- so no plans at the time being, but of course, with Mr. Muller on board with a 25% stake in the company. If there are any -- if any such considerations come up in the future, then of course, we would have him on board and discuss this any such project with him because obviously, if we did a capital increase, I'm insisting if we did, there are no plans as we speak today. Then of course, it would only make sense if anchor shareholders like Mr. Muller, but also DS Group, they own 12% or Mr. Hansjoerg Wyss who holds approximately 6%. I hope that answers your first 2 questions. I hand over to Nina.

Thank you, Roger. So the question was with regards to the portfolio of our businesses and whether we are planning to sell our crystal business. I can confirm here that we are looking at the overall business portfolio and are trying to increase profitability in all our businesses. There are no plans to sell off certain businesses and with regards to the crystal business, your question I outlined it before, the crystal business, the Lalique Crystal business is our core, is the core brand is the brand is a heritage is the savoir faire that we are building on and that has -- is like a red thread throughout the whole company. So in my outline with regards to priorities of the group and the priorities within the business is that Lalique brand plays and will play a very important role for us. I hope that is a good answer to your question.

Just 1 short follow-up. Do you have any interesting acquisitions in mind? Or is it -- this no topic at all?

So where we are looking in the future where we are always interested within the beauty business, acquiring new licenses. That is what I also mentioned is we are working on nurturing the existing partnerships, and we are also looking into acquiring and starting up new licenses. But that is too early to talk in detail about.

The next question is from Manuel Lang with Vontobel.

I have 3 questions for now. The first one is that you mentioned price increases last year to have offset the inflationary pressure on costs. Could you quantify this? And do you expect the pricing impact on the top line to come down this year given the lower inflation? Then the second one would be on inventories, and they were increased significantly. Is that only a reaction to the higher demand in the perfume business, especially for Lalique perfumes. Or what do you expect for inventories this year, meaning what inventory level do you perceive as reasonable for 2024? And then the third and last one would be on hiring, marketing and sales costs, they increased disproportionately to sales. My question would be in which segment was the pronounced. My assumption would be in Ultrasun and Glenturret. And what do you expect as further costs this year in those segments?

Thank you, Manuel. I will take the 2, first questions, Alexis. So regarding the price increase in 2023 as mentioned, so we increased globally the price for Lalique by 10% to 15%, but this has been only effective during Q2 and especially in the second semester, where we've seen an impact on the profitability of the Lalique segment. And this will going forward in 2024 as we see clearly, as Roger mentioned, that the mining cost, except personnel costs are energy, and this will decrease significantly in '24 and onwards. Regarding the perfume business is exactly the same. We increased the prices by 7% to 8%, but this has been impacted only the sales figures in our distribution network on during the second semester. So we sincerely think that due to inflation decrease in 2024, or our gross profit margin in all the segments will increase significantly. Regarding the inventory level, the second question, the increase is mainly in the perfume segment, both in components and finished goods. This is, I would say, mainly due to the supply issue that we had, especially on perfume bottle and with the increased lead time on perfume components during 2023. So as Roger mentioned, we don't expect a strong decrease during the first semester of 2024 because we need to build up especially our inventory for the new license Superdry. But in terms of components, especially we expect a decrease in the second semester to be back to a normal level of inventory that will allow us to improve our net debt-to-EBITDA ratio, in particular, thanks to the decrease in net working capital and increase in EBITDA.

Manuel, it's Roger speaking. I will answer your third question on the increase in operating expenses. Generally speaking, not only marketing and sales, which you rightly pointed to that there's a disproportion on the increase of those expenses compared to the sales growth. And so the segments where this has been the case is, in particular, in digital since we think we have put a particular focus on our digital transformation strategy since the new Head of Digital came in 2 years ago. Then, of course, Glenturret is one of the fastest-growing brands in our portfolio. So obviously, that needs to -- we need to be ready and to -- we hire new people. And of course, inventories increased, of course, aging whiskeys as we pursue our growth. Then very importantly, but this is not new, but we are still in the process of increasing capacity at both factories, meaning Lalique in Wingen where, as you know, we always -- it's always a challenge to hire new glass workers, train them, retain them and of course, also at the Lalique Beauty services factory for perfume filling and logistics as we have seen a huge growth, especially in '21 and '22, where -- so we also need to ramp up capacities there, both in terms of equipment, of course, production lines as well as staff. Then you mentioned Ultrasun, but this is, to a lesser extent, that's a smaller team, but reinforced the team with some marketing and sales person, but that has not a big impact. I hope that answers the question.

I will just add 1 comment maybe also is that we have this one-off cost related to the transaction in Lafaurie-Peyraguey end of 2023 as well. That impacted our cost level in the second half of the year.

[Operator Instructions] We have a follow-up question from Patrik Schwendimann with Zurcher Kantonalbank.

Patrik Schwendimann again. So my additional questions are regarding CapEx for the current year '24. What's your best guess here maybe also midterm? And then also for the financial results, what's your best guess here for the current year '24? And again, Regarding the midterm guidance, you just have answered my question that for the Lalique brand, you would expect maybe a 4% to 5% EBIT margin. Could you also give us some indication to what's your best guess midterm for the Ultrasun brand for the perfume divisions and also for the Wine & Spirits division?