Pernod Ricard SA (RI) Earnings Call Transcript & Summary

Good day, and thank you for standing by and welcome to LATAM EMEA conference call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would like to hand the conference over for our speaker today, Florence Tresarrieu. Please go ahead, sir.

Good afternoon, ladies and gentlemen. We're very pleased to welcome you to our EMEA LATAM conference call. We are today hosted by Gilles Bogaert, Chairman and CEO of Pernod Ricard EMEA-LATAM. I guess most of you would have seen the video we posted on our website this morning. So in the interest of time, I suggest we go straight into the Q&A session. Operator, could you please open the call to the first caller.

[Operator Instructions] And your first question comes from the line of Simon Hales from Citi.

Two questions for me, please. Sir, I wonder if you could talk a little bit about how you see the midterm growth algorithm across both the Europe and the LATAM region sort of panning out from here. Is there any reason to think it will be different post-pandemic to what you're expecting sort of pre-pandemic. Now you've got a little bit sort of 12 months under your belt since we last had one of these calls. And secondly, I wonder if you could talk a little bit about sort of net revenue management in the region, perhaps how that's changed over the last 3 to 5 years as you've got sort of better digital tools to lay to manage those processes. And if you could give us any sort of numbers, perhaps to sort of show how NRM has improved over that time period. That would be very interesting.

Sorry, Simon, do you mind -- I mean, repeating the second question because the line was not very clear, we couldn't really hear you? The second one.

Sure. It was just around net revenue management, how that's perhaps changed in the region, how you've managed sort of pricing and realized price has perhaps improved over the last sort of 3 to 5 years? Just to give us a flavor of how some of your digital tools have enabled you to sort of better manage that sort of revenue portion of your business?

Yes, that's clear. Thank you, Simon. Thank you, Florence. Your first question was on midterm sales growth. I think what we have said in the past when we launched the Transform & Accelerate plan is that our midterm topline objective for EMEA LATAM was close to mid-single digit topline growth. We have not, I would say, updated any midterm forecast so far, and I will let the group to do so when relevant. What I can say is that the first year fiscal '20 after COVID, we -- in EMEA LATAM, we were down 4%. Last year, fiscal year '21, we were up 12%. And obviously, we'll see what growth we'll post this year, but it will likely be a strong growth with -- and we had a Q1, which was up 33%. I don't expect, obviously, this type of topline growth to remain at the same level for the quarters to come. We'll start to have easier comp in second half. But I think just looking at the sequence of those growth since COVID gives a good idea of the type of underlying trend that we have today. And on revenue management, well, we've been quite busy over the last few years on that. We've been very active on different fronts. First, on the tools. We've been equipping our market tools with new tools, data driven, allowing to better help us to monitor our promotions, as you know, the debts, the frequency measuring data the return on the investment, the return on the promotions. And we start to further improve that with predictive data. So this is something which is being deployed in all market cos. That's definitely something quite important. And we have also strengthened the process of review of price increases with each market co during the year. Obviously, in the context when inflation is up, the demand is strong, the supply is tight. So with a view to try to obviously maximize our pricing, which has always been part of our premiumization strategy. So nothing new there in terms of intent, but we start to be far better equipped. We have also hired revenue growth managers in most of the biggest markets, so that we also equipped from a commercial planning standpoint with the right expertise to help us to keep improving on that front.

Sir, your next question comes from the line of Edward Mundy from Jefferies.

Three questions from me. First of all, just coming back to digital, I think Alex laid out his vision for this business to be a conviviality platform. As you look out over the medium term, what are the behaviors or processes that you're not doing today that will be implemented and help you with your commercial strategy? Second question is really around Finance 4.0, could you talk about how richer data is allowing you to better forecast and improve resource management across perhaps sales, COGS, A&P, structure costs, however you think it's right to think about Finance 4.0? And then the third question is around the low and no opportunity where you've launched Ballantine's and Beefeater Light within Spain. Could you talk to the level of cannibalization for those brands relative to the other brands? And is there an opportunity to roll this out into other markets?

Okay. Thank you for your question. On the first one on the conviviality platform, I think I invite you, obviously, to spend time with Alex and next time you have a call with him on that topic. That's obviously a long-term vision. We are creators of cordiality and we want to leverage digital as part of our transformation to be able to better leverage the power data to engage in a more efficient way with all our key stakeholders, customers, consumers, and with the view that doing so, we should be able, at the end of the day, to be able to activate potentially more brands, optimizing also the allocation of resources between brands, by touchpoints and omnichannel, which is definitely what we want to achieve. And so what it means for us from now on, and we have obviously already embarked on that digital transformation, is to -- we have different initiatives that we deploy across the group to try to help us to be better data-driven company in the marketing area, in particular, the advertising and promotional expenses allocation by touchpoint, by brand by country with a way to optimize the way we allocate investment and optimize the return we get from that investment. And being more data-driven, we have more ability to be guided in the way we should do that, and we have some promising pilots in that respect in some markets, which is just still early days. Also in the sales part, I think we mentioned before, the revenue growth management and definitely, we have some initiatives to help us to better manage pricing and promotions, leveraging the same time of data-driven tools. In the sales part, it's also a way to help us to guide our salespeople on how to spend their time, their money, their activities between the different channels, the different outlets with a view to improving our distribution and to have a better execution of our commercial initiatives. So we are definitely engaged in that transformation. And the end game, the vision is to be able to turn Pernod Ricard into a conviviality platform. As far as Finance 4.0 is concerned, I would obviously invite you also to spend time with Helene de Tissot on that transformation. Let's say, that apply the same type of evolution applied to finance, and we want to go to the next level in terms of data-driven approach to finance. To have more powerful systems with a better granularity, more predictive also and more integrated between the different modules, including with all the SNOP system with a view to be even better in the way we manage business planning. So this is all that it is about. Obviously, it is supported by a lot of IT developments. And this is in progress, and this will continue in the couple of years to come. And your last question was on No-Low. No need to say that conscious drinking is on the top of consumers' expectations. It's definitely a key -- a pillar of our innovation strategy and innovation opportunities. Yes, you're right to say that we've been active there. We launched Ballantine's Lights and Digital Light in Spain. This is the first year. I think they were launched half a year ago. So it's still early days, encouraging results, getting good traction, bringing new consumers also to the brand. I think that we are still in research mode on those results before deciding what we do in the other countries. So definitely, we'll remain active on No-Low on those 2 brands and also on other ones with current innovations and potentially new innovations to come in the years to come to see that great opportunity. I would like also to add the fantastic performance of Lillet, which is also with a lower-ABV and which is definitely addressing this type of trend. So that's across the brands and across the whole portfolio.

Sir, your next question comes from the line of Sanjeet Aujla from Crédit Suisse.

Gilles, Florence, a couple of questions for myself also. Firstly, just looking at your Q1 performance, I think your organic sales across the region were up around 30% against pre-pandemic levels. Were there any restocking or anything which would have caused the shipments to deviate from the sell-out trends across the regions you're seeing? And is this a reasonable way to think about the balance of the year when we compare to pre-pandemic levels?

Well, yes, net sales were up 33% in the first quarter, largely driven by the strong rebound of on-trade whereas off-trade was still resilient, but boring at a lower pace than in the previous year. So that's the way you should look at it. Obviously, the demand was very strong and as evidenced by the sellout and that you can see in the new cell. At the same time, there was in some channels, in particular, indirect-to-market, some rebuilding of inventories to be able to deliver this new type of course. But let's say that a large part of that performance is directly linked to sell-out. Obviously, this is Q1, so ahead of Christmas. So this is definitely a period of time when we, I would say, have a higher level of inventories to be able to deal with the Christmas sales. It is impacted also by the way, that supply is quite difficult. So we are delivering this type of performance with a low level of let's say, internal inventories at market core level and also at the level of some customers. So this is something that we try to monitor as well as we can in the current tight supply constraints. So I'm not comparing here with the pre-pandemia trends or figures. I'm just highlighting the channel dynamics as compared to what we had last year. Just to give you a flavor, when we look at volumes in Q1 as compared to what they were 2 years ago, that is to say the last first quarter before pandemic, in the region on average off-trade is at an index of more than 120%, when on-trade is slightly above 100%. So it means that in Q1, on-trade is almost back to the situation we had pre-pandemic, and it's in a way, normal because we almost did not face in Q1 any adverse [ century ] constraints or very limited, I would say. We still need to make sure that it will remain the case in the months to come. Some countries were above that. Some countries were still below a [ 20 ] levels like Spain, for instance, but it gives an idea of what the business looks like today as compared to the pre-pandemic situation. Another example, e-commerce was almost multiplied by 3 between the 2 periods. So at the end of Q1, all channels are above the level that we had 2 years before.

That's great color. And just a quick follow-up on margins. I think in the presentation, you called out organically, margins up 400 basis points against fiscal '19. Can you just talk a bit about how much of that is from gross margin versus A&P and structure costs and where you see future opportunities coming from?

Well, yes, I think it's over the last 3 years. We've been very busy also in not only during the topline, gaining share, but also improving our margins. And that's what we've done. As you said, we've organically improved our operating margin by close to 400 basis points. Definitely 3 main levers the gross margin level, thanks to some improved price mix. The A&P, let's say optimization doesn't mean that we invested less, but we invested better behind the best priorities. And as I said earlier, we are today in a better situation to be able to properly allocate our investment behind the best opportunities. And obviously, structured costs which remained almost flattish on average in, let's say, the last 3 years, including the current fiscal year, which show our ability to remain very disciplined on structure, while net sales was up. So I would say that probably the main driver has been the structure cost discipline, as followed by premiumization. So price and mix, positive price and mix and smart A&P allocation in that order.

Sir, your next question comes from the line of Trevor Stirling from Bernstein.

Florence. Two questions from my side, please. Gilles, I think you mentioned that your sales up 33% in the first quarter. Europe, as reported, which I appreciate includes France and Ireland, a different footprint was about 17% pre-COVID. So clearly, the region is in good shape compared to pre-COVID. But I was just wondering, is Spain basically the only one that was still below pre-COVID? And maybe just a little bit of color there would be great. And then the second thing you also talked in the -- on the call on your presentation about supply chain constraints. And is that both of ocean freight to places like LATAM and Africa and ground transportation in Europe. So maybe a little bit of color on that would be great as well.

Yes. Thank you for those questions, Trevor. On the first one, I would say, yes, Southern Europe and in particular, the Spain are probably the only countries which are still today below profit. It's market-driven. It's as you know, markets which are a lot exposed to on-trade. It's more than half of the Spanish market. And the recovery of on-trade has been far more recent. And even in Q1, at this stage, the on-trade is not back to the level of 2 years before. So it will take probably a bit more time even if we remain confident of the potential of Spain to go back to good growth. And very clearly, in the first quarter, Spain was back to a good level of growth, and it was a 22% topline growth, whereas last year, it was still down 13%. So as you can see, we are on the right track there, leveraging, in particular, the rebound of the on-trade. Most of the other markets, not to say all of them are now clearly above the business that they had pre-COVID. On supply, yes, it's a tense situation, and it's not specific to Pernod Ricard. It's even not specific, obviously, to the industry. But we just need to deal with it. We've been increasing our production capacities to be able to bottle at a very high space -- high pace sorry, in particular in Chivas Brothers or in the Absolut company. And I would say that today, we are running full speed there. The other main bottlenecks, obviously, are our supply from dry goods and some weight goods also and logistics, which are probably the biggest bottleneck that we see today. Have we lost sales? I would say that, yes, we have some out of stock in some SKUs, in some countries. I would say Spain has been probably the most impacted market so far. But the net, I would say, business impact so far is not too significant. We are just working with minimal inventories in the market, which makes things more difficult and we may have some time to change plans from a supply standpoint and just a point from 1 week to another one. It's not easy to find trucks. It's not easy to find drivers. It's not easy to find boats. And that's definitely a tough situation we have to deal with, and we probably -- we still have to deal with in the months to come. But let's say, so far, it has not prevented us from posting strong growth.

Sir, your next question comes from the line of Olivier Nicolai from Goldman Sachs.

Just a question. Actually, 3. You flagged a strong sales growth in the prestige category across the region during your presentation. In that context, should we interpret this as the beginning of a strong premiumization trend in Europe post-pandemic. And the reason I'm asking this is because the percentage of premium brands in Europe is much lower than the U.S. So that would be great to have your view on that. And secondly, on e-commerce, you mentioned was 5% of your net sales, which market within EMEA LATAM are leading on that? And also may I ask what have you learned so far from the whiskey exchange deal. Any thoughts on how that acquisition might impact your e-commerce strategy?

Thank you. And on prestige, it's not new. It was one of our key transversal battlegrounds for EMEA LATAM already in our plan 3 years ago and to remain so. I think our intent at that moment was to grow at twice the speed as before, and that's what we've done in the last 3 years. Adjusted, obviously, from the COVID impacts. And I think it remains our objective going forward. So I -- we are a strong believer of the premiumization. We were a strong believer before COVID. We are still strong believers today. I wouldn't say that it has further strengthened the potential. The potential was there. It's still there. And I think we are organizing also ourselves to fully seize that potential, including with the creation of some prestige teams, dedicated teams in more and more relevant markets. E-commerce, yes, you picked up the 5% share of sales of the region, I think very similar to the level of the group. It was far lower 2 or 3 years ago. So we probably did 2 or 3 years of e-commerce growth in 1 year, post-COVID, and we believe it's a strong trend that will continue in the region, countries like U.K. or Germany are already very, very strong in e-commerce, but it starts to be -- it start to drive growth in, let's say, most of the key markets in LATAM in Italy, for instance, this is also a big trend, obviously. And unfortunately, there are some markets where we still cannot do e-commerce, and that's the case of Poland or Russia. But elsewhere, it has been a booming trends. And there also, we have organized ourselves to have some dedicated e-commerce teams to be able to seize that potential as well as possible. It's about e-retail and working better with e-retail. It's about working also with pure players like Amazon, Glovo, Rappi or Jumia in Africa or potentially also the risk exchange, and that was your last question. This business will be managed, we'd say, separately from the rest of the group and on the core business. So we'll be a supplier -- we'll remain a supplier to whiskey exchange as other spirit players. And I think the intent for us is to try to build a strong marketplace for wine and spirits for all players, for all brands, bringing premium products with a very good level of service. That's the vision.

[Operator Instructions] And sir, your next question comes from the line of Laurent Whyatt from Barclays.

Three also for me. You mentioned in response to one of the previous questions that the structure costs were flattish on average over the past 3 years, and that shows your discipline, and you also mentioned structure cost discipline in your prepared remarks. Should we assume that going forward, that discipline will remain and we shouldn't really expect to see an increase in structure costs across that -- across your part of the business? My first question. Secondly, you mentioned in the prepared remarks your innovation hub, but I was wondering if you could give us a bit more information on how that works and what sort of data goes into driving which innovations are made and which ones are left on the drawing room floor? And finally, in your remarks, you mentioned that you increased the number of women in Band C and above roles from 90% in 2018 to 30% in 2021. And I was wondering if you could let us know what policies or procedures that you put in place that really drove that change?

Thank you for those very diverse questions. On structure cost, when I say it would be flattish on average. So it's for fiscal year '20, '21 and '22 is the one that has started. And it has been flattish, yes, because we've been very disciplined in -- during COVID times and also because we want to keep a very tight T&E strategy. And for instance, people will not travel as much as pre-COVID because we adapt to the new hybrid ways of working. It's also the consequence of some important adjustments of our organizations over the last 3 years that are not directly linked to COVID. Just to be a better fit for purpose, to be more efficient. We try to leverage better our management entities. This is the way we are organized with -- we have 11 in the region with the lead market, which is the biggest one and some smaller ones reporting to the lead market with a view to share expertise and share some of the teams in support functions. Also potentially in marketing, like consumer insight or digital central of excellence for instance. So this is -- these are things that we've been doing. We've been also putting some countries together like Benelux, like Peru and Andina, like the Balkans, just to give a few examples with objective to pull resources and to be more impactful in those markets. But with as a consequence, an optimized structure while remaining consumer-centric. So going forward, what you can expect, obviously, is for us to accompany the rebound. So yes, after freezing the headcount during the COVID times, we plan to recruit again the needed jobs, particularly in the sales area. And after also 1 year of freeze of salary in fiscal year '20, we are back to, I would say, normal salary increases in the context also of higher inflation. So this year, this fiscal '20 structure cost will logically be up. But this is definitely our objective for this year and for the years to come to keep decreasing our ratio structure costs to net sales within the EMEA LATAM. Your second question was on the innovation hub. So you had some -- a quick summary video accessible to you on Internet. The purpose of the innovation hub is clearly to be more consumer-centric and to be able to leverage more consumer research, consumer insights to better assess the new opportunities, size them and arbitrate with objective to have fewer but bigger and more successful innovations. And then to involve the brand companies and the brands at a later stage once we have identified the opportunities. So both innovation hubs, we have one by region and one for North America, one for Asia Pacific and one for EMEA LATAM. It has been operational since March. We have close to 20 people now based in 3 different locations. London, Madrid and Berlin. And those people work very closely with the consumer insight teams, very closely also with the market to identify the best opportunities and then to come with some ideations that are then tested and then arbitrated before the brand companies actually work on launching those products on the market. So we believe it will help us to get bolder on innovation. Innovation is already delivering quite good results because last year, it was an incremental 3% topline growth to EMEA LATAM. And our intent is to -- for innovation to represent an even further growth or share of the growth of the region going forward. And your last question was about our diversity agenda. So you rightly noted the progress we've done in the last years. And women now represent 30% of our, let's say, top management. You know the group objective by 2030 is to be a balanced organization that is to say between 40% and 60% male-women or women-male. And how did we do that? It has been a continuous process to put far more focus on diversity, a mix of work on the mindsets, obviously. And also the very strong tone from the top to make it happen, to also make sure that we have the right pipeline builds over time, to be able to have more women in top positions through internal promotions, but also through external recruitment. And I think that my colleague from the [indiscernible] and Mukherjee is a very good example of it. And our -- it's not the end of the game because we're at 30%. We need to go above 40% in the years to come. So be sure that whenever we have our discussions on HR talents and on moves, D&I is one of the top priorities and top criteria.

Ladies and gentlemen, we're going to take the 2 last questions.

Your next question comes from the line of Celine Pannuti from JPMorgan.

My first question is on the consumer, both in Europe and in LATAM, if you could reply separately on that. Obviously, you have had a very strong first quarter, and you kindly shared with us the off-trade doing very well, while the on-trade has been also resilient. As you look into next year, yes, the next 12 to 18 months, how do you expect the consumer to behave given the externalities that we know about from on the other hand, macro rebound, but as well, is there a bit of an issue that you foresee in some countries we're dealing with the level of inflation overall for the consumer? My second question is on digital. You were talking about your sales force and they were equipped. Could you explain a bit how your digital -- how the go-to-market has been digitized and what does it change in your relationship with your distributors or your end customers? And could you just tell us about data collection and how would that work? Do you get your first direct data? Or do you have to rely on your customer data?

Thank you for your questions. In terms of consumer behavior, it's fair to say that in the last 6 months, we've seen some, let's say, euphoria of consumers after so many months of lockdown, people being able to go out. You had what some call the revenge will come back, the strong -- very strong comeback of congeniality, let's say, that people fully and fully understood and felt as a pain during lockdowns, how congeniality is important. And I think that obviously, after that period of time, they came back very strongly to sharing good moments of congeniality with friends, with family, and it has been something positive for our brands. So -- and also part of it is linked to the fact that most people didn't do anything else. They could not travel. So there were not so many other types of entertainment that were possible at that time, at the moment when some have saved also monitor during that period of time. So yes, probably it helped, I would say, the very strong boom that we are currently seeing. That's it, I think that we've seen some trends that seem to be, I would say, sticky or sustainable. For instance, the pleasure to indulge a good drink at home, the cocktail trend that we've seen at home is something that is still there, even 6 or 8 months after on-trade has reopened. And I think this is definitely something encouraging. So in terms of other trends, this local leading is something that we still want to capture with our brands and with our communication platforms. This consumption at home is definitely another one that we want to keep leveraging going forward. We spoke about the No-Low before. We have not spoken a lot about the sustainability and responsibility road map. But definitely, this is another expectation from our consumers and our brands. On top of the corporate commitments, our brands need to play a role and to be socially responsible. And it should also feed the way we look at the next campaign and the way we look at innovation in the months to come. In terms of digital, let's say that our salespeople are far better equipped than they were. And it's a process. So it will take time before all markets, I would say, get those new tools. It's a mix of new SFA tools powered by the stronger data with also changed management so that our salespeople are able to leverage the power of those data to help them to increase the distribution of our products to better manage the activation of our brands on the last 3 Feets, better merchandising, also classical, I would say, initiatives that salesman needs to have. Obviously, when we speak about data, it's our internal data, but it also some data we get from Nielsen is that we get from our customers and getting the right set of data with the right granularity, the right frequency is a key objective. Going forward, we need to work more and more with our clients, including the retailers, so that we can get more data and grow our business together in a more efficient way. And this is definitely one of the objectives we have for the months and the years to come. At a time when many customers and retailers that start also to engage on that digital transformation. So this is something that we'll need to do together.

Sir, your last question comes from the line of Javier Gonzalez from Gossler.

A couple of questions on my side. First one on margins. Sorry to insist on this one. you've shown a very strong performance through the pandemic on the margins of the European business, the 400 bps you alluded in the presentation. You've mentioned structured costs are a big driver behind that. But I just wonder, is this a permanent new base from where you expect to grow? Or would it be reasonable to expect some of that -- those gains to be reversed or given back as marketing investments increase in the post-COVID environment? My second question is on Lillet. I just wonder if you could talk a little bit about the success of the brand, not only in Germany, but in other markets and how exportable is that brand to most of the other European markets? And how successful is the brand at taking share from the big spirits players, Aperol? And lastly, I was curious to understand or learn the reason behind or the reason why Ireland and France are outside the scope of the EMEA division?

Okay. So your first question on margins. Let's say, I think I invite you to look at the group, let's say, indication on margins, which is an improvement -- an annual improvement of 50 to 60 basis points. Obviously, EMEA LATAM is part of that. We've delivered a very strong improvement of margin in the last years also because we consider that the level was too low and that we needed to work on some of levers to be able to bring it to a higher level, in particular in Europe. And that's something that we have delivered. And so there was a kind of one-off initiative on our organization to leverage better our management entities to have more fit-for-purpose organization that has delivered some significant savings over the last few years. Now going forward, and I think fiscal -- after fiscal '22, we'll have a more normative basis. The objective is obviously to keep improving our operating margin through a strong price and mix, and this is definitely a hot topic because of the high inflation that we faced on some input costs. And we'll keep optimizing, allocating our A&P in a smart way. But at a time also when the rebound is quite important and the fiscal year '22 is a very important year for us to make sure we invest at the right level behind our key brands and key markets to be able to fuel that top line rebound and to deliver that objective to gain share in most of our markets. So we'll keep doing so this year after adjusting down the A&P at the beginning of the COVID period. Since the beginning of the current calendar year, we have accelerated the lot on A&P, and you can expect that to remain in the current fiscal year. On Lillet, this is definitely a very promising brand. As you said, it grew very quickly in Germany, in Austria, it starts to have a very good also momentum in Benelux. It's totally aligned with what consumers want today. It's low-ABV, high-quality ingredients, easy-to-mix, women like it and very premium. And this is definitely a priority for all the EMEA-LATAM region, including emerging markets, even if some markets will put focus on the brand at a later stage. But definitely, let's say, the U.K., Italy, LATAM, South Africa, these are countries where we start -- we have started to see Lillet with the ambition that it could become, I would say, a big brand also in those geographies. So yes, it's not just about those markets. It goes beyond that.

Sorry, I think you had a third question, which we didn't catch.

Yes. Just a quick follow-up on Lillet. Is the brand successful at gaining share from the market leader from Aperol spirits? Or if you could give us a flavor as to the areas of the market where it's sourcing the market share? And then the third question...

Sorry. Please, your third question was?

Yes. The third question was the Ireland and France. The reason why those 2 markets are not part of the scope of EMEA?

I'm not sure I'm the best person to answer that question because it's not -- yes, you're right, it's not part of Europe. I think France has historically been a big market for the group. It just went through a big -- an important merger between Ricard and Pernod. And I think that there was a very strong group focus on that transformation, which I think is on a very good track, by the way. And Ireland happens to be reporting to our Irish distillers, brand company because it's -- they are both based in the same place, and it's a good way also for the brand company to test some of the new initiatives in the home market. So back to your first question, Lillet is gaining share from the operative moments, this is what it is about. So in a way, it can compete with all products that are strong in the operative moment, including the Gin occasion of consumption, for instance. And as compared to the brand you mentioned, which I suppose is Aperol, Lillet has been growing at a quicker pace in the last 2 years and at a far more premium price level, which is clear thing on Lillet. We want to establish the brand as a premium brand with a high level of quality of the ingredients. And the sourcing of business is broad. It's about, let's say, the operative moment, targeting women but not only. And the results have been very, very good so far. So we are -- this is definitely one of our top regional priorities.

So this concludes our Q&A session. Thanks a lot, Gilles. Thank you, ladies and gentlemen, for all your questions. We wish you a very good rest of your day. Thank you.

Thank you.