Vusion S.A. (VU) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to our first quarter 2025 sales Presentation. With me today are Thierry Gadou, our Chairman and Chief Executive Officer; as well as Thierry Lemaitre, our Deputy CEO, Finance and Corporate. Thierry Gadou will make some remarks on the group's business performance and financial performance in the first quarter as well as our full year outlook. After these remarks, we will be happy to take your questions. As a reminder, some of the information to be discussed on our call today is forward-looking and subject to important risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the safe harbor statement included in our press release and on Slide 3 of this presentation. This evening's release was issued a short while ago and is available in French and English on VusionGroup's website, vusion.com. The slides of this presentation can also be found on our website in the regulated information section. A replay and a transcript will also be available on our website after the call. And with that, it's my pleasure to hand you over to Thierry Gadou for his opening remarks.

Thank you, Olivier. Good afternoon, everyone. Thanks for joining our conference call. I'm very happy to present our sales figures for the first quarter. In a nutshell, VusionGroup achieved an excellent Q1, slightly ahead of our guidance with 31% growth in adjusted sales. Order entries nearly doubled in the first quarter to EUR 532 million, driven by the strong momentum in the United States. VAS sales reached EUR 33 million, up 71% versus Q1 last year and we reiterate our full year outlook of 40% adjusted sales growth and improved profitability. So let's now go into a bit more detail. So the group's IFRS revenue reached EUR 215 million in the first quarter and EUR 233 million on adjusted basis, and that's up 31% compared to the first quarter of '24. This is slightly above the guidance that we communicated during the presentation of the '24 annual results, which was around 25%. And by the way, it's also our best first quarter ever. In terms of geography, in this first quarter, growth was driven by Americas and Asia Pacific region. In this region, adjusted sales reached EUR 143 million up 100% compared to the first quarter of '24. This performance was driven by the rapid expansion in the U.S. our first market today and particularly the deployment at Walmart U.S., which is continuing according to plan. The fluctuating tariff situation was, of course, discussed with our U.S. customers, and that led to unchanged rollout plans due to the strategic importance of digitizing stores in the context increasing price volatility. So our forecasts for the year are kept unchanged and confirmed. In Europe, we achieved adjusted sales of EUR 90 million, and it's down minus 15% compared to the first quarter of '24. So the business in Europe is, again, not yet benefiting in Q1 from the contract that we signed at the end of last year and more recently due to normal manufacturing lead times. Deliveries will increase sequentially in Q2 and over the following quarters. So we do confirm our target of resuming growth in Europe for the full year. The pipeline is strong, and we see increasing focus from retailers on improving the efficiency of stores across Europe. If we now look at order entries, Q1 was a very strong quarter with new orders increasing by 94% year-on-year to EUR 532 million. And over the last 12 months, that represents EUR 1.9 billion. This record figure is, in large part, explained by the recent Walmart contract extension. And this number includes a part of the new EUR 1 billion order announced at the end of the year, and which will be booked in our orders over the quarters of -- the next quarters of '25. So the group expects this good momentum in order entries to continue for the full year, also driven by signing of new contracts in both the United States and Europe. Let's look at VAS now. Revenue from software, services and non-ESL solutions reached EUR 33 million in the first 3 months of the year, up sharply by 71% compared the first 3 months of '24. Both recurring and nonrecurring revenues grew strongly. Recurring revenues, in particular, reached EUR 17.2 million, up 38% year-on-year and represented about 52% of the total VAS revenues. Note that our cloud installed base grew rapidly during the first quarter of the year to reach approximately now 26,000 stores and 188 million labels. This dynamic will accelerate in the coming quarters. And as a reminder, our cloud installed base was around 19,000 stores and 94 million labels a year ago at the end of March '24. Our outlook for '25 is confirmed. And I'd like to just comment a little bit the situation. On the one hand, for sure, the fluctuating tariff environment may lead to slower investment decisions for some retailers, those who are still in pilots or just evaluating business case, those who have not yet measured the benefits at scale. And those may wait until there is less uncertainty on tariffs and costs of the technology. On the other hand, though, retailers who have already decided and launched rollouts are clearly determined to move forward and are not changing plans despite the current tensions in global trade. More than ever, this proves that in today's environment, our solutions are providing retailers with measurable benefit, efficiency and resilience, enabling them to increase the return on capital employed of their most important asset, their stores. Our technology perfectly fits to the present challenges of our customers. So with an order book at an all-time high with strong ability, and we reiterate our growth and profitability improvement objectives announced on February 26, which are a revenue growth rate of around 40%, an annual adjusted revenue target of EUR 1.4 billion, split between around EUR 600 million in the first half and EUR 800 million in the second. An 80% growth in VAS revenue for the full year, an adjusted EBITDA margin improvement of 100 to 200 basis points in '25, and a positive free cash flow generation. With this, I thank you for your attention and give you back the floor for questions.

[Operator Instructions] We will take our first question. And your first question comes from the line of Ben Thielmann from Berenberg.

Can you hear me?

Yes, we can.

Okay, perfect. Hi Thierry, hi Olivier. I have a couple of questions, if I may. The first one would be on the Walmart rollout. Thierry, you already mentioned regarding the U.S. customers that are currently in pilot, but I was wondering how do your conversations with Walmart go? I remember when I met them in new York, they seemed to be very bullish in rolling out the ESL and the VAS solutions. Has that changed in the last couple of months because of the tariffs? Any color on the Walmart rollout in particular?

Yes. So no, not at all. No change. I think they are -- as I said, I made a general statement on those customers who have already -- who had already decided and launched rollout. And those are typically the customers who have already measured, at scale, the benefits of our technology. And those are -- the message is very clear. We've been discussing with all of them, including the largest one you mentioned. There is no change in rollout plans. So we are, as I said, continuing the rollout as planned with an acceleration throughout the year, so no change. And -- so that's a very clear message. And this is why we are able to be sort of confident in our guidance for the year because we have a very strong backlog and that adds strong visibility. And there is no change on this side. And I think it's very telling to be frank. I mean, it's very telling because it shows the very strong benefits if there is no change in rollout plans with the type of situation. I think it's a stress test that is quite a confirmation of the very strong value of the technology we provide.

Yes, makes sense. Maybe another question regarding tariffs. I mean, over 2025, you're ramping up capacity to manufacture the EdgeSense for particularly Walmart. I was wondering how does the current tariff environment affect your decision-making where to ramp up basically that production capacity because if I look at your competitive landscape and then look at Hanshow and I look at SoluM, everybody is very much focused in producing or working with EMS that are manufacturing in China, in Vietnam, in Mexico. And I was wondering, given that you worked together, for example, with Jabil, what is actually real likelihood that you would decide to not ramp up the capacity with them in, let's say, Mexico or in Vietnam, but maybe in the United States? You probably have a little bit of higher wages, but you probably save a bit on the lead times. And U.S., the global #1, is there a real likelihood that you would be the first one to actually manufacture ESL for the U.S. market in the United States?

So it's true that we have a very -- I mean, we consider to be in an environment like we have today, we consider that we are by far, the safest choice because we have a very balanced -- now very balanced geography diversification in the supply chain and a very strong set of partners who are also a balanced geography, including, as you pointed out, the U.S. as a very strong geography where they have many, many factories. So for us, this flexibility is a real strength, and we're sort of -- we are ramping up capacity. We have some flexibility to decide. With all the partners, both Foxconn and Jabil, you mentioned Jabil, but there is also Foxconn both have capacity in Vietnam, in Mexico, in the U.S. And so all the scenarios are on the table. And so far, we are not changing our plans because, as I said, the customers who are essentially in our backlog, and we have a very big backlog, have said no delays, even if it's -- so right now, we're flexible. We probably would be the first one to do what you mentioned if we were to. We're not announcing anything. We just have very strong flexibility because we also -- as you know, we own our equipment, so we can move it easily, et cetera. So there is plenty of factors that are sort of favorable for our flexibility. But the main message we received from our customers right now is no delays. Continue -- keep up with the rollout plans, no delays for relocation. So we have flexibility because some of our sort of capacity is not yet decided the geography. So we keep very close to all the stakeholders of this conversation, including officials in the U.S. and to see how it unfolds. But having said that, in any scenario, we see no change in the growth plan.

Okay, sounds good. And then maybe third question from my side. So order intake numbers look actually pretty good. I think it's the highest book-to-bill you have at least since my model reaches back. So that's quite encouraging. I know you don't disclose numbers on a per customer level, but could you maybe guide us a little bit how much of the Q1 order intake was driven by Walmart?

As you said, I mean, you said the answer in your -- in the beginning of your question, we don't disclose specific. But what we -- what you know is that we just got a very, very big order at the end of the year, and we said we would -- we're booking in the firm or in the firm orders as we receive sort of nominative store orders. And so it would be spread over the whole 25 years, so -- year of '25, so it gives an indication. But I think, again, it's a big part, of course. It's a very big customer. So big part, and we have a part of this EUR 1 billion order in here. That's what I can say because we don't disclose customer-specific data.

Yes, fair point. And then maybe a final question and then I'll go back into the queue would be on IFRS 15. The adjustments you have, we currently have the situation that adjusted revenues is larger than reported revenues. And at a certain point in time, that should basically reverse, right? So if I assume that you are capable of doing 100% of the Walmart U.S. stores by the end of 2027, let's say, is it fair to say that those IFRS 15 adjustments will basically reverse somewhat in like late 2025, early 2026, so that we should expect that maybe by Q3 or Q4 numbers that adjusted revenues will be lower than reported revenues?

Hi Ben, Thierry speaking. Just be careful because within the adjusted revenues, you've got 2 impacts, ones stemming from the warrants and another one coming from the price decrease. That's relating to the price decrease. We said it's going to reverse in the course of H2 this year. So yes, you're right. In H2 this year, you should see this amount reversing, but we don't disclose the split between the 2 adjustments. But yes, of course, the part on the warrants will keep having impact until the end of 2030 or 2029, sorry. And the impact related to the price decrease will reverse in the course of H2 this year.

We will take our next question. Your next question comes from the line of Valentin-Paul Jahan from Stifel.

Good evening everybody, do you hear me well?

We do.

Perfect. So 3 kind of questions for me, please. First, could you please give us more granular view about the order intake momentum in Europe? Like which countries are driving it? And also what is your feeling about the momentum in the U.K. market? Is it starting to take off from your point of view? And if so, what tangible evidence do you have to share to back this up?

Yes. So as I said, Europe is -- again, there is good signs in Europe since already a number of months, and we were already happy with the performance in Q4. We had sort of growth in order entries overall last year. And so there are several geographies, which are sort of good. You specifically and you're probably right to point out the U.K. because it's a country where there is a bit more -- I mean it's a bit more lagging behind Continental Europe in terms of adoption and penetration. So it's where we see a catch-up sort of dynamic. And it's true that those who have been, for instance at the recent RTS event, the Retail Trade Show event could see the very significant inch of all the retailers. I think those who follow a little bit the press know that we've been mentioned by a lot of journalists who've seen our pilots here and there. And so we're expecting sort of things to unfold clearly this year, a number of sort of deals. So we're quite optimistic on the U.K. It's the -- but there are other regions where the pipeline is big. I think the -- and so far, I mean, the tariff situation is not impacting the let's say, the decision time. So at least, we won't have that topic. So the DACH region is also -- has also a good strong pipeline. Even in France, supposedly a mature market, we see growth opportunities. So plenty of things going on. And when we will announce, we will announce. But right now, we are, let's say, positive about the momentum. And...

Okay. Understood. And maybe about value-added services. Could you please give us more detailed explanations of the factors behind the strong growth in nonrecurring value-added services? I mean, is it coming from the expansion of VusionOX licenses or from Computer Vision camera that you can sell before -- or from other services in hardware? Is it possible to have more details on it?

Well, details, I don't know. But clearly, there is something that we've been talking about is the fact that EdgeSense is a vast reach platform. This is why one of the things we are doing nowadays is to transition as many pilots as we can from ESL pilots to EdgeSense pilots. So -- and as you know, VusionOX is the operating system, so the software that powers this solution and which is the next-generation operating system. So this is a big contributor to the increase of the so-called nonrecurring, but it's not one-off because it's going to continue. So but yes, the ramp-up of VusionOX. Generally speaking, the whole growth in VAS is really driven by software whether it is recurring or embedded one-off licenses of software like VusionOX, it's still essentially software that drives really the growth of that. So it's a very positive momentum and the momentum that's going to stay. We -- it does include also a number of other things, by the way, but I just -- the key driver in Q1 is around this type of software. That's why I mentioned also the cloud -- the growth of the cloud installed base.

Okay, understood. And maybe last one about tariffs. So in terms of profitability, tariffs are factor of uncertainty and it could affect the gross margin in the coming, I don't know, quarters. You can manufacture in Mexico, Vietnam or in the U.S.A., like you said, thanks to your EMS. But could you tell us what -- maybe what proportion of your purchases correspond to components versus the proportion that corresponds to the payment of the assembly work, I would say? And maybe among components, what proportion of components you buy from a Chinese company located in China. If -- and which would not benefit from another source of supply from other country? I mean what I mean is that even if you manufacture in the U.S., you will need to buy components from China, right? So it can still be cheaper to produce in Mexico than in the U.S., given the price of components and the share of components within the total cost of your solutions.

So there are several aspects to your question. So maybe Thierry, on the first aspect, which the impact of gross margin. I understand it's because of the revising of taxes that you're talking about, the sort of mechanical impact on the gross margin. Is that what you're talking about? I understand -- I mean the first part of your question seemed to be related to that, that if we reinvoice because of the increase in tariffs. So is it that mechanical impact?

It's -- my question is basically the fact that you -- within the total cost of for your electronic shelf labels or digital shelf labels, there is some components and there is assembly work.

Okay. No, I understood that was part of your second -- I understood the second part of the question, but I thought the first part was relating to something that is more the mechanical effect of reinvoicing component which is no margin, obviously is tariffs, so reinvoicing tariffs to customers, maybe putting a little pressure -- a small pressure on the total margin rate, which is true because you have a part of the -- so I just wanted to -- Thierry to comment on this specific question. But in fact, your question is all about the component versus finish product, it's okay. I may have misunderstood. Tell me.

But I think that maybe Valentin just to answer your question because first of all, you know that the largest customer, which is currently subject to tariffs is Walmart in the U.S. and with Walmart we've got a pass-through close. So currently, for the next coming months and of course, for the full year 2025, tariffs should have no impact on our profitability. The only impact that could potentially raise from the tariff is the fact that, yes, we're going to recharge at 0 margin, the cost of the tariffs to the customers. But that is a very limited impact. So we don't consider that it should have any impact on the profitability target that we have already guided the market with. So we confirm the capacity to deliver the profitability improvement that we are targeting for the full year, even in the current context of the tariffs. That's the situation so far. Of course, no one knows what the tariff is going to be in the next coming 3, 4 months. So currently, from what we know and from what we see of the situation, we confirm the capacity to deliver the expected improvement of the profitability.

Yes. But my question was more about beyond Walmart because then you -- in the U.S., you have the...

We are on Q1 2025 revenue conference call. So yes, we can try to give an estimate of what the profitability would be in the context of tariffs that no one can already anticipate, that is a little bit fiction so far.

Yes. We confirm -- for sure, we confirm our guidance for the year, which is, I remind -- relatively precise when I compare the guidance of other companies, frankly. So that's confirmed. What you need to have in mind is that because we would be on equal, I would say, basis here is that we need to stay very humble about what will be the outcome because you seem to have already a certainty about what's going to happen with China. I'd be a little more careful because we've seen a number of things over the past 6 weeks, including this morning. We don't know where things are going to end up. So making plans on -- depending on the relative cost of components and the relative tariff on components versus finished goods, depending on whether you put your -- you know these cases of some manufacturing products where well, the suppliers and the assembly line is crossing the border of Canada 7x before the finished goods. So you can't make simulation on that. What we -- what I think is really interesting about the stress test that we went through is that so many customers say, "Don't change anything." Why? Because this world that we enter is a fundamental world of volatility. I don't want to disclose any of our customers' data, but I can tell you the cost of volatility, managing volatility in the store the manual cost of that is massive. So what is the only protection it is the digitization and the automation. So at the end of the day, you need to make sort of choices, not on like sort of super short-term volatility of decisions around tariff because that's not an industrial policy. We are getting -- we have gotten closer and closer to the U.S. We may operate in the U.S. That will not be for -- it will be for many reasons if we do and it will be for reasons that will stay. So it may happen. We will do it, maybe. We will certainly get closer and closer to America, for sure, in many ways. But we're taking decisions in a sort of reasonable way. Those things are not volatile. Production is a big decision. So the good news is right now, none of these things are going to sort of impact the growth plan that we have for this year. And so that's the good news, really. So we're staying flexible. We're looking at things. But right now, nobody knows where the tariffs will land for any country, including China. So...

So we will take our next question. Your next question comes from the line of Adam Gildea from Bank of America.

Can you hear me okay?

Yes, we can.

Perfect. This is also sort of on the timing. You mentioned that it's possible and it's very flexible to move production around, whether it's to the U.S. or to another third country outside Vietnam or Mexico. I was wondering if you can just elaborate a little bit on the time line there? Because as I understand it, the new Walmart prefinance lines that are going live throughout this year are located in Vietnam and Mexico and presumably the process of getting those up and running is already ongoing now. So does that mean that, that's essentially committed for 2025 if, let's say, tariffs are going to go into effect 2 to 3 months from now after the 90-day pause? And how quickly could react and move that to the U.S. in terms of keeping the 2026 and 2027 time lines together?

Yes, sure. So you're absolutely right. So the flexibility, we're still in the process of setting up these lines and some of them are -- still have a bit of flexibility in terms of the final location, given it's the same EMS on both ends, right, Vietnam and Mexico. And if we were to go to the U.S., it would be the same EMS. So that provides another element of flexibility. It's true that if we were to decide, and we haven't done that to move as soon as this year, in America, it would delay some of the ramp-up of this capacity. And that's why we -- even though it would be possible, there would be a delay. And that delay -- you remember, I mentioned no delay was the answer of our customers. And so precisely those who are already expecting sort of rollouts to happen because the decisions have been taken, let's say, no delays for the reasons I mentioned. So no delays means not relocating, right? Now it doesn't mean that for '26, we would take a different decision. But right now, we're not planning to relocate. We already have a dual location, we have a bit of flexibility of load balancing between those locations, by the way and still now. But for '25, the -- all the discussions have taken place. Every scenario has been analyzed, shared with our customers. And the answer is no change in plans, and we deliver. That's what they expect us. And so we will deliver our growth.

We will take our next question. Your next question comes from the line of Flavien Baudemont from Bernstein.

Hello, can you hear me?

We can. Yes.

Okay. I'd like to have a bit more color on one of your comments. You said that there is a wait-and-see attitude of your clients that are currently in pilot phase. Does their decisions are motivated by a weaker pure return investment projection or more on higher uncertainty on future ESL prices. And if I had to say my question differently, does this wait-and-see attitude from retailer will disappear once the U.S. tariff will be settled? And if not, what is the main concern currently from U.S. retailers?

No, I think -- yes, I mean you did understand me correctly in the sense that the fluctuation in tariff is creating uncertainty on a lot of, let's say, on the cost of technology, on the future cost of technology. And so when you are at early stage in pilot or even before sort of evaluating business case and you have to put in your model cost and everything and all of a sudden, you don't know if it's this level of 40% plus, et cetera. All these are indicating to creating an uncertainty on the models, and we expect and we may be wrong, but we expect on this type of customers that they will probably -- there may be a slowdown in the speed of decisions. Also, there is another factor. The current situation is not only creating certainty on cost, but it's also creating an uncertainty on recession, on in inflation. And those are very significant concerns for retailers in general. So again, this is pushing for that. So that's why I said it's a contrasted situation because on the one hand, we had this incredible good news that those who are already sort of planned rollouts want to absolutely either stay on plan or even go faster. And that's where -- but there is, on the other hand, this situation, which is creating uncertainty on, I would say, the macroeconomic growth or recession and also on the cost of technology that is imported. And so those uncertainties will logically defer some decisions. Now we're on the right side of the market because we happen to have -- as I mentioned, a lot of our sort of revenue plan is in backlog or in customers that have already sort of made decisions. And so that's why we're able to have our guidance confirmed, having said that. But it's true, there is this reality, this contrasted reality. Let's say, the good news is we're on the right side of the market right now.

We will take our next question. Your next question comes from the line of Laurent Gelebart from BNP Paribas.

Good evening gentlemen, Laurent speaking from BNP. So a couple of questions on my side. The first one regards your exposure to the U.S. market. Can you share with us what is -- first question. Are you shielded from tariffs with all your U.S. clients or only Walmart? And if not Walmart, I mean, if others are not shielded from tariffs, what is the size of the backlog you have still to deliver at, let's say, past prices? That's the first question. The second one relates to Walmart and Captana. Could you share with us where do you stand in terms of the pilot regarding this technology and if you expect them at some point to sign a contract with you. And the first -- the third one is really related to VAS services. So recurring VAS are up 38% in first quarter. Do you expect the level of growth for recurring VAS to accelerate throughout the year?

So yes, so regarding -- I don't know if Thierry wants to, but the first question was about the tariff. I think the situation is relatively the same in a lot of our customers that I described. In fact, we described the situation of the customers who had already decided rollout and as roughly the same regardless of the impact, which is not fully known at the moment. But they're asking us essentially to continue as planned, even though they might incur some pass-through of those -- and in most cases, we have the same provisions. So there are I would say no difference here. And so yes, we've seen most of the situation, and that's why I wouldn't make a different statement here for a given customer. It's mostly -- the difference is really the customers who had already decided or already launched their rollouts and they're not changing plans. It's also true from -- for a retailer we had mentioned in December like the fresh market, et cetera. So regarding Captana, I mean, the Computer Vision projects, we have several Computer Vision projects, which are sort of -- which are developing on plans. They will -- they are still in pilot mode. So it's too early to say if we're going to sign a contract, but we -- it's a very, very important project. They are developing well. And so we'll certainly talk about it when we can. But right now, they are just -- they are developing well.

And just regarding the last point regarding the recurring VAS, yes, we said that we wanted to grow the VAS approximately 80% in 2025 versus 2024. And given 31% increase in Q1, yes, you're right, that should probably accelerate over the course of the year 2025.

We will take our next question. Your next question comes from the line of Gilles Crespel from Alizés.

Can you hear me?

Yes, we can.

Great. Thank you very much for all your comments, and congratulations for the results. Few questions if I allow -- if you allow me. One is there has been great development in the U.S. back on Walmart developments. It's a little more muted or a little less recovery on the European side. Could you give us a little color on this? That would be my first question and how you expect the following quarters to evolve? The second question is there had been some strong recruitments in 2024. Could you give us an idea of where we stand in -- at the end of the first quarter '25? Has the -- well, where does the headcount stand or how has your recruitment program being continuing or more stabilizing? And then a technical question is, I have in mind that the whole of Walmart rollout would be something like 4,600 stores. Could you give us or remind us the date for completion of the rollout as it was signed per the last contract?

And the first question was about European recovery. Yes, so I hope I'm not sort of paraphrasing something I already said. Let me say it differently. So the European situation is good. It's still a modest quarter in Q1 after a good quarter in Q4. The thing is we have usually 6, 9 months sort of manufacturing lead time. So when all the Q4 order entries in Europe are going to be visible throughout the -- towards the end of Q1 and in H2. So again, that's the thing. And we have also order entries in Q1 that also will impact more H2. So that's why we're absolutely confirming one of the things we mentioned about our guidance -- in our guidance was to that Europe in the full year would be coming back to growth. It will be more visible in H2. However, sequentially, growth is going to -- quarter-after-quarter is going to be growing. So increase -- deliveries will increase sequentially in Q2 and then in Q3 and then in Q4. So that's the dynamic we see. We'll still be -- the plan of deliveries will be -- is lower in H1 than in H2. And so in total, we'll be resuming growth in H2 and for the full year. So that's what I can say. And I gave a bit of color on some regions in Europe, which have a good momentum and where we expect new wins in the coming quarters to continue to fuel growth, not only in '25, but also in '26. So that's for Europe. Regarding -- no, I think HR was the third one. The second one was.

The second one was HR.

Yes, yes. HR, yes. Well, we have passed, I think, not long ago, our 1,000 employee. So we are -- I think we finished the year at something like 960 or something like that. And we are trying to hire -- yes, 960, yes.

9-5-0, yes.

9-5-0, 950, yes. And so in the meantime, we've passed our 1,000. And we should be recruiting, like last year, another 200 this year and so it's -- 200 to 300. So it's moving well, and it's particularly growing the team in the U.S. And finally...

Walmart's timing. Completion of rollout.

Yes. This is something we didn't, I mean, precisely disclose. We did say, I think when we signed the framework contract, which was in '23 that it would be around 5 to 7 years. So that's still the case. We're still sort of on the planning phase of all the years. Right now, obviously, the plan for '25 is completed, but plans for '26 and '27 are still -- so right now, it's -- we should be done, I would say, roughly, we should be done in '27, right?

We will take our next question. Your next question comes from the line of Aurelien Sivignon from ODDO BHF.

Two questions on my side. Firstly, I just wanted to touch on the impact of a weaker U.S. dollar. I was wondering if that could change how you see VCM evolving for the rest of the year. And perhaps with higher taxation risks in the U.S., do you see this as a tailwind for further adoption of VAS with the retailers you are currently rolling out in the U.S.?

Maybe just on the first point, Aurelien. So yes, you're right, it can have a limited impact actually because the impact is more on the revenues. So since euro is gaining value or dollar is losing value against euro, it's true that the revenues in dollars are a bit less significant. Nonetheless, we are still very comfortable with the EUR 600 million revenue guidance for H1 and the 40% revenue growth for the full year. And on the profitability, yes, it can have a limited impact. We said that we had quite a natural hedge between the revenues and also the cost in dollars. So we consider the impact to be quite limited in the gross margin. And the second question?

Potential recessionary impact on U.S. retailers.

Well, I mean, again, this is -- Aurelien, this is something I touched on just before the fact that the current situation is not only a tariff situation, it's also a macroeconomic uncertainty about the evolution of consumption and purchasing power and GDP growth. So in theory, as I said, it might delay decisions of investment not specifically affecting one or the other components of our business, but maybe delaying some order entries. Again, we are -- this doesn't call into question our guidance because it's -- on the other hand, a number of other things are absolutely confirmed and they are -- and so I don't think it's something that would affect the course of business in '25. So we've taken it into account.

But my question was more, let's say, about if let's say with a higher recession risk, it could be a tailwind for further adoption of VAS with the retailers you are currently rolling out in the U.S.?

A tailwind for the retailers who are -- so you mean project contractors?

Jabil and Captana, for instance. Yes, absolutely.

You mean recession would be a tailwind for -- yes, I think -- well, I mean, I hadn't thought of that, you're right, it could be. But no, I think we have already sort of included a very positive momentum on VAS. As I said, we expect to grow very rapidly VAS and already in Q1, it's happening. But it should -- as we said before, it should accelerate. So already, we are anticipating a strong demand on VAS and the strong acceleration. So no doubt it's happening. Now even more I wouldn't go as far as that in a pure sort of improvisation, but so I -- we try to stick on our -- to the course of our business and to our plan right now.

We will take our next question. The next question comes from the line of Hubert Mathet from Mathet & Cie.

Just one clarification with EdgeSense. Do you have still pilot running in Europe with EdgeSense or not yet?

No, no, we have.

You have. Okay. And so what -- and what's your, let's say, normal scenario to convert those pilots in orders? Is that end of '26 or sooner than that, without making any forecast, of course?

Yes. I mean, we are hoping to convert pilots to roll out in -- I mean, maybe towards the end of the year or [indiscernible] of next year. So yes, I mean, it's -- there is -- we don't see a big difference between Europe. It came later. So we started projects later, but it should happen. We already have sort of pilots, which are in the phase of expansion to many stores. So yes, there should be decisions towards the end of the year and during next year, for sure. We have several.

And technically, do you have the extra capacity to fulfill these disorders given the fact you will be at nearly full blast for Walmart as a period of completion of their order?

Yes, we have dedicated capacity to other customers. Yes, we have dedicated capacity.

One last question.

We will take our next question. And the question comes from the line of Valentin-Paul Jahan from Stifel.

Thank you again, sorry. Just the last one. I have the feeling that Trump tariffs between Mexico and Canada and the U.S. apply to non-USMCA-compliant products as well as automotive and steel. But there are -- it seems that there are lots of product categories that are -- so USMCA compliant. And among these product categories, there is one category which could eventually be used to cover ESL type products in my view. Do you think you could make your products USMCA compliant just to avoid tax -- tariffs? Is it something your legal teams are working on? What is your opinion on this subject?

Yes. So it's something we're definitely working on. At the moment, for sure, there is a list, which is called an HTS list, Harmonized Tariff Schedule. So HTS codes are covered by -- a number of HTS codes are covered by the exemption and our products are not important under those codes. So that's the current situation. Now we are working on -- I mean, those lists and those codes are not stabilized. So any -- we need to -- and they are still moving. And we, of course, are doing everything we can to justify a number of exemptions but we're working on it. So it's something -- right now, it is not right -- exempted. Okay. With this...

This concludes this today's question-and-answer session. I'll now hand back for closing remarks.

Yes. So thank you for your attention and all your great questions. We wish you a very good evening, and we will meet you -- I think next now is at, yes -- well end of July and, of course, for our shareholders at the AGM on June 17. So there's going to be -- thank you very much. Bye-bye.