Good afternoon, this is the CAREL conference operator. Welcome, and thank you for joining the CAREL first nine months 2023 results conference call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Francesco Nalini, CEO of CAREL. Please go ahead, sir. Thank you. Good afternoon, and thanks for joining our call for the presentation of the results of the first nine months of 2023. I will start from page four, with the main highlights of the period. In this quarter of 2023, we saw yet another double-digit organic revenue growth, as well as a further increase in the adjusted EBITDA margin compared to both the first nine months of last year and the first six months of 2023. Revenues grew by 24%, and if we exclude M&As and the effect of the exchange rate, growth was 12.7%, in line with the expectation we shared with the presentation of the first half results. We continued to see positive demand in industrial and commercial HVAC applications, especially data centers, while on the other end, we experienced the materialization of the expected temporary slowdown in the heat pump market. In refrigeration, we didn't see any significant signs of recovery, also due to the worsening of the macro scenario. EBITDA margin adjusted for non-recurring items, which are related in this period, especially to the Kiona acquisition and the ongoing capital increase, was 22.7%, higher than the same period of 2022, when it was 21.8%, and also higher than the first half of 2023, when adjusted profitability was 22.1%. If we consider the non-recurring items equal to approximately EUR 2.3 million, EBITDA margin was, in any case, 22.3%, with an improvement on last year and on the sixth month. This excellent result comes from operating leverage from the continuous deployment of the effects coming from the previous price list increases, as well as to a more favorable product mix after the resolution of the shortage that allows for better sales of programmable controllers, which have a slightly higher than average gross profitability. Net Financial Position stands at EUR 265 million, with EUR 184 million coming from the acquisitions of Eurotec and especially Kiona. Without these two transactions, Net Financial Position would be approximately EUR 81 million, with a EUR 50 million improvement over the EUR 96 million at the end of 2022. At EUR 184 million, the Net Financial Position is, in any case, lower than 2x LTM EBITDA. Net working capital stabilized and is in line with what was reported in the first half. I'm now moving to page five, with some more details on the results. At EUR 497.2 million, revenues grew by 24% over the EUR 401.1 million of the first nine months of 2022. Organic growth in the quarter, there is like for like, at constant exchange rates, was again double digits at approximately 10%. Compared to the same period of last year, we have EUR 47.1 million of organic growth in the top line. EUR 52 million coming from M&As and EUR 6.8 million of negative contribution from the exchange rate. EBITDA adjusted in the nine months was EUR 113 million, up 28.9% from the EUR 87.7 million of last year. EBITDA reported was EUR 110.7 million, up 28.8% from the EUR 85.9 million of last year. EBITDA adjusted profitability again, was 22.7%, up from the 21.8% of the same period last year, thanks to operating leverage and improvement in the product mix, as I mentioned, and the further deployment of previous price increases. Net profit at EUR 59.1 million grew by 12.2% from the EUR 52.6 million of the same period last year, thanks to the operating results. While at the same time, we experienced a higher tax rate at approximately 23.8% due to a different country mix and changes in regulation, as we will see. CapEx at EUR 15 million, were in line with the first nine months of last year and are in line with our expectations. On page six, we can see the breakdown of sales. To the left, there's the breakdown by geography. EMEA grew by 22.5%, net of the foreign exchange, with a deceleration from the first six months, mainly due to the expected temporary slowdown of the heat pump market. In APAC, sales grew by 24.7% net of the foreign exchange, with good growth coming from India and South Korea, especially in industrial applications driven by data centers, semiconductors, electrification. The Chinese market remains very subdued, even if we continue to grow, especially again, with HVAC industrial applications, since HVAC commercial is weak in the country due to the macro situation. North America accelerated with a sales growth of 48.9%, net of the foreign exchange. We had a very good contribution from Senva, that is performing very well, but also organic growth had a significant acceleration, thanks mainly to data centers and other industrial applications like battery energy storage. Latin America improved and moved to positive growth with a 5% net of the foreign exchange, thanks to a good performance in Brazil, unfortunately, offset by a very weak macro scenario in the rest of the region. To the right, we can see the breakdown by market. HVAC reported a 36.4% growth net of the foreign exchange, or approximately 17% excluding M&As, and this in spite of the expected deceleration in heat pumps. The refrigeration market remained very soft, like in the previous quarters. Unfortunately, no significant signs of recovery materialized yet. We reported, in the Q3, a growth of almost 5% net of the foreign exchange, also thanks to the Eurotec and Kiona contributions. I now leave it to Nicola to comment the items below the EBITDA on page seven. Thank you, Francesco. The slide number seven details the group result from the EBITDA to the net profit. The first nine months of 2023 were impacted by higher D&A costs, due to the relevant investment in CapEx in the last few years, and the purchase price allocation from M&A activities for EUR 5.7 million. It was EUR 3.7 million in the same period of 2022. As at September 2023, the PPA of Kiona was not completed, so this accounting process did not affect the D&A in the period. In general, the financial charges increased for the impact of the interest rate evolution. This line also includes significant impact by accounting effect, like figurative interest calculated on put and call option from M&A activities for EUR 2 million, as at September 2023. It was EUR 500,000 in the same period of 2022. IFRS 16 effect for EUR 650,000 in the first nine months of 2023, almost double of 2022. In 2022, the line companies consolidated with the equity method was impacted by the one-off revaluation of Arion, due to the increase of the investment. The tax rate of the period was around 23.8%, higher than last year, mainly due to a different country mix. The minority result increased for the good performance of the Turkish legal entity, CFM. The group net profit, as at September 2023, was equal to EUR 59.1 million, compared to EUR 52.6 million of the same period of twenty twenty-two. Slide number eight shows the net financial position evolution in the first nine months of 2023. The period was impacted by M&A activity for EUR 184.1 million. The flow from operation was stronger and equal to EUR 79.4 million. The increase in net working capital was mainly driven by a strong growth in revenues and was pretty in line with the half-year level. The DSO is better compared to the same period of the last year, and the overdue in account receivables is at a good level. In the first half of 2023, the group paid dividend for EUR 20.4 million. Taking out the effect of IFRS 16, the net financial position amount to EUR 231.2 million, a level below 2x the LTM EBITDA. I leave Francesco to go on with the presentation. Thanks, Nicola. So I'm now on page nine for the closing remarks. In Q3, the group reported again a double-digit organic revenue growth. We continue to execute our strategy of a balanced mix of organic and external growth, with an improvement in the top line by 24% in the nine months. The EBITDA margin improved again, both adjusted at 22.7%, as well as reported at 22.3%. Furthermore, in the period, we closed the Kiona acquisition as expected. As far as the announced capital increase is concerned, the group is working on it and confirms the target to complete the rights issue by the end of the year, of course, subject to regulatory approval and market conditions. Moving now to the outlook, what we see is that the macro scenario has deteriorated in the last few months, and volatility has increased. In heat pumps, in spite of a very solid structural trend, a temporary deceleration in the growth rate is materializing in some European countries. In refrigeration, the weak demand reported in the first half continued in this last quarter, and no significant signs of recovery of the investment cycle have materialized yet. To conclude, taking this into account, and next of a possible further worsening economic scenario, the group expects total revenue of approximately EUR 646 million for the full year, with a variability in the range of -2% to +2% on this central value, following the significant volatility present today in the market, which could lead to the postponement of some deliveries to 2024. The group-adjusted EBITDA margin in the full year is expected to be in the range from 20.5%-21.5%, considering also the seasonal effect we have every Q4. Thank you so much for your attention. We're now more than happy to answer to your questions. However, as you probably know, we are currently in the process of drafting the prospectus concerning the capital increase project. Therefore, we cannot provide quantitative indications on the group's expectations for the full year 2023, in addition to what is indicated in the press release and this presentation, and in any case, concerning 2024. I'm sorry for that, and I thank you for your understanding. Thank you very much for listening. This is the chorus call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Niccolo Storer of Kepler. Please go ahead. Hello, hello, can you hear me? Yes. Ciao, good afternoon. Thanks for taking my two questions. The first one is qualitative about what are you currently seeing on businesses which are not heat pumps, refrigeration, and data center? So if you can tell us a bit which is the sentiment on all the other markets. You mentioned, for instance, good performance in battery and energy storage system. So if you can discuss a little bit also about that and about how big this business has become for you. And the second question, not sure you can answer, but let me try. In light of the good and probably stronger than expected M&A contribution you have had year to date, is it fair to say that your guidance for the full year implies an organic growth for Q4 in the low single digit, if not close to zero? Thank you. Okay. Thanks, Nicholas, for the question. So, in terms of the applications, what we have seen so far is, as you correctly said, we have seen strong demand in data centers. We started to see the expected deceleration in heat pumps, while refrigeration remains soft. Concerning the other businesses, so, looking, starting from industrial, let's say that there is some stagnation in the more cyclical parts of industrial, as expected. However, this is compensated by some other sub-applications which are growing quite fast, as you mentioned, like battery energy storage systems. This is also very geographical, because, for example, the growth in these applications, relatively new applications related to electrification, is concentrated in North America and Asia. And while in Europe, let's say it's slightly more cyclical, again, leaving aside data centers which have been performing well. So all in all, let's say that the industrial applications, industrial, let's say, part of HVAC has been keeping up with demand. In terms of commercial, that's also true for commercial, let's say. So also demand in commercial has been keeping up quite well, again, especially outside Europe, so Asia and North America. So let's say that the slowdown we have been experiencing is mainly concentrated in heat pumps, because refrigeration was already soft to begin with. So the slowdown mainly concentrated in heat pumps and mainly in Europe, plus some Asian customers that were exporting heat pumps to Europe. Having said that, of course, the volatility has increased, and the uncertainty has become higher and higher, also due to the deterioration of the macro scenario. So let's say we are for sure in a more challenging macro scenario looking forward. However, so far, what we saw is basically just the deceleration of heat pumps. Talking about the Q4, so coming to your second question, so let's say what we can, what we can say is what we presented. So basically, that's the total revenues that we expect for the full year. In terms of perimeter change, what we have in Q4 is basically just Kiona, Eurotec, and very, very limited Senva, just a few days of Senva. So basically, it's Kiona and Eurotec for Q4. That's the only perimeter change. And so, let's say, we, having said that, that is the figure that we forecast. And the volatility that we, let's say, we specify is due to the fact that in this moment of very high uncertainty, there could be some postponements of orders to the beginning of next year, and this is something that is very difficult to foresee at the moment. Well, thank you. Maybe a quick follow-up on battery energy storage systems. Here, which kind of potential do you see going forward, and how much is this business area for you? I I mean, I guess it is still early stage, but can you confirm that, and which potential you see here? Okay. So it's, let's say it's very early to say what the potential could be, because this is very new in terms of application. And it's also coming as a... initially, it came also as a synergy from the Senva acquisition. Because this is, let's say, a technology that Senva brought to us, and then, of course, we developed also with the rest of our products. So it's and it's fast evolving because it's a new application, the requirements are evolving fast. Also, customers are, let's say, evolving their requirements. So it's difficult to quantify the potential of this. We believe it's substantial. Again, mainly in, for the time being, mainly in America and Asia. In both regions, let's say, what we are doing is basically keeping a very being very, very open to see the evolution of this and possible adjacent applications related to electrification, because there are several. We are looking at the evolution of these new waves of applications that are emerging, that, in my opinion, are very, very interesting, but it's really very difficult to quantify the potential at this stage. Perfect. Thank you. The next question is from Christian Hinderaker of Goldman Sachs. Please go ahead. Yes, good afternoon, Francesco, Nicola, Giampiero, thank you for the questions. You mentioned that you see high inventory levels in certain markets. I wonder if you could expand on that point in terms of the end markets that you refer to, as well as if there are any regional distinctions. And then secondly, whether you can comment on the proportion of your sales that are made to order, versus those that might be general in nature. That's my first question. Okay. Okay. Thank you, Christian, for the question. So, concerning the stock levels, we believe that they are the highest in the heat pump application, because that's where the volumes are higher, the units are very standard, and also there is a strong distribution network. So we believe that's where stock levels, for sure, are very high, and this is mainly in Europe for us, because that's where most of the market is. Then we believe there are also some parts of refrigeration have high stock levels. I mean, they have been de-stocking for a while now, but probably they still have some significantly high stock levels, and that's probably across the board, so globally. Concerning how much we make for to order, how much we make to stock, let's say that for us, basically, everything is manufactured to order, meaning that we don't have stocks of finished goods on our side. Of course, some of our customers could have stocks of our controllers on their side, even if what for heat pumps, probably, it's not that they have stocks of our controllers on their side, probably there are really heat pumps in the supply chain. And in refrigeration, yes, especially in the distribution, in the wholesaling channel, yes, there are controllers. But I say it's not, we do not have products on our side. Actually, what you could say are products made for stock are those that we make for the wholesaling channel in refrigeration. In that case, you could say that, yes, there is a stock of finished goods, but it's not on our side, it's more on the wholesaler side. And I believe they have been going through this, the de-stocking phase for months. Probably they're at a good stage, but still they have relatively high stock levels. Thank you, Francesco. Maybe just pivoting, you've called out data centers as one of the stronger end markets, as it has been for a number of years now. I just wonder whether you see any risk that end market might have benefited from pre-buying, given the strength of demand in the past two years? And then conversely, is there any potential upside risk ahead from some of the developments in terms of technology within that end market, in terms of liquid cooling, and the greater demand for processing power? Thank you. Okay, so in terms of advanced buying in data centers, I don't think that is a significant risk, because most of the market is project-based. So they don't really stock up end units. It's really a lot of it is based on the project, also because many of the technological solutions are custom for the individual installation, and they're not standard, like for example, in the case of heat pumps. Concerning the possible different, different architectures and technologies, let's say we work with all of them. The fact that there are more different technologies is a benefit for us, because we have, let's say, higher diversity calls for higher complexity, which is good for us because we... Of course, for us, complexity and control technology is part of our value proposition, managing the complexity. So increasing diversity in the possible architectures is a positive, looking forward. Liquid cooling is growing faster. It will remain probably a low percent for the coming years, it will remain a low share of the total, even if it's definitely growing fast. But it's an application where we work, definitely. We, let's say, are seeing that also many customers working in the commercial side of HVAC are now moving to data centers with their, let's say, their technologies, for example, coming from the ventilation side or the chiller side, so basically increasing the diversity of the market. And again, this is positive because increases, let's say, the ecosystem, the fragmentation, and eventually also the tendency to outsource the control solutions. Okay. Thank you. I'm just curious maybe what your views are on the refrigeration market. I understand, and appreciate that it's maybe quite hard to gauge, but, but maybe I can pose the question in this way, to what extent do you think that the end customer decision point, on the part of the, the food retail operators, is driven by the cost of capital, relative to, say, the, the cost of, building materials? And I guess just trying to understand what we should be looking for, that, that might drive or catalyze a, an improvement in underlying demand in that end market. Okay. So, yes, as you say, Christian, it's difficult to foresee. Let me start by a consideration. The longer, the longer the time that passes before the new investment cycle, the stronger the incentive to invest again, because there's first of all, there's the necessity in Europe, especially to comply with the F-gas regulation. Second, let's say that the more they wait to refurbish the stores, then the more the stores become expensive to run, because they are less efficient, they fail more, they leak more refrigerant. The older refrigerants cost more and more. So there are a number of reasons why the... I mean, more time passes, the stronger the investment, the incentive to invest again. And this leads me to believe, again, it's just an assumption, leads me to believe that when the industry starts, I mean, it will start with a good pace, because they will need to recover the lost investment made during this one-year plus of not investing. So going to your question, what macro indicator we could look at to understand when the turning point is coming? In my opinion, for sure, inflation is key. Inflation is key because it's related to end consumption, which is another very important indicator, because the reason why the food retailer stopped, typically it's because they expect a slowdown in consumption. And so when we see that consumption of food by households picks up again, which probably will happen when inflation goes down, that will be for sure a let's say a possible indicator. The second indicator is inflation itself and because there is really the cost of the infrastructure as has been increasing significantly. So probably when the cost of the materials will start to go down, things will improve. Maybe the cost of capital is less relevant. For sure, it's a factor, but my opinion, my feeling is that it's less relevant because what the food retail, the food retailers, in any case, they have a lot of cash, typically. So what really should drive the investment decision is end consumption by households, plus the cost of the infrastructure itself. So these are the two things I would look at mainly. Okay, thank you. The next question is from Alessandro Cecchini of Equita. Please, go ahead. Hello, everybody, and thank you for taking my questions. My first question is actually about the heat pump business, and the first half you guided for more than 50% or in line with the 50% growth. I would like to better understand a very rough indication in the Q3 how much was the growth for the heat pump related business. This is my first question. [inaudible] Okay, okay, thanks, Alessandro, for, for the question. So let's say that in Q3, we did experience a significant growth in, in heat pumps compared to the, the same period of last year, even if to a lower extent compared to the, the first, the first half. So yes, in the first half, let's say growth was, was probably slightly more than the, than the market. In Q3, again, it's slightly more than the market, but let's say a little bit less than, than the first half. Let's say less than the first half, but still substantial in terms, in terms of, in terms of growth, because we started to see the, the deceleration. Okay. My second question is instead about if you can provide us the contribution of M&A in terms of EBITDA level, because in the first half, if I am not wrong, contribution in terms of EBITDA was EUR 4.2 million. I would like to better understand the contribution like the adjusted EBITDA level in the Q3. And I was trying to also better understand why actually that was very good despite lower organic growth, that was +10% organic growth in the Q3, despite 16% in the Q2, you actually had margins that were higher than the Q2, sequentially higher with the similar turnover. Maybe the M&A contribution can explain this. Thank you. Okay. So, yes, Alessandro. So the contribution of the perimeter change in Q3 on the EBITDA was slightly dilutive. Because mainly for the effect of Klingenburg. Because Klingenburg is relatively large. Klingenburg is performing well, however, their EBITDA is lower than the rest of the group. So while on the other end, Senva, Senva has a slightly, slightly accretive, accretive EBITDA profile. However, summing everything, let's say that the contribution of M&A on the EBITDA margin was slightly dilutive in, in Q3. The reason why EBITDA, in any case, sequentially improved, that was basically due to two reasons. The first one is because there's, let's say, you know, we did a number of price increases in the last few quarters, and the effects materialize over time, so that required some, some time to fully materialize. But there is an even more important reason, which is the fact that the shortage affected, in particular, electronic products, so Programmable Controllers, which are a very important product line for us, as you know, and they have a slightly higher than average profitability. Now, after the resolution of the shortage, we had this, we had this improvement in a, in the product mix in terms of recovery of the weight of the Programmable Controllers platform... This had definitely a positive contribution in terms of product mix. Plus, let's say that in the product mix, on the other hand, we had on the total a relative decline of the weight of some buy and sell products that in nature tended to have a lower than average profitability. So yes, we do have lower operating leverage in the period. However, we have let's say an additional further effect coming from the deployment of the price increases, and especially we have a positive contribution coming from the product mix. Okay, thank you. And this is my last question, linked to the second one. I mean, we saw very good margins, good margins in the Q3, but implicitly, you are guiding for the Q4 implied margins that are minus 800-900 basis points. That is a record high decline in your history. So, I would like to better understand, even if you achieve your midpoint, that probably is your guidance of 21%, there is a big decline higher than typical seasonality in the Q4. Just to understand this steep change in margins, what are the drivers behind, of course, our organic growth that could be materially assuming your midpoint lower than the Q3? Yes. Okay. So, let's say that, as you know, every Q4 we have a decline in the EBITDA margin. Also, last year, we did have a significant decline in the EBITDA margin. The most important reason why we forecast this decline is because of lower operating leverage, basically. Since, let's say in Q4, we, we assume that growth will be, let's say, lower than the first nine months. So this leads to lower operating leverage, and so a lower profitability on top of the fact that in any case, Q4, there is always a decline in profitability. Okay. Do you see some change in product mix in the Q4 versus Q3? Also, given probably you sold a lot of sort of more programmable controls in the Q3, and you expect Q4 probably to be a different mix or just operating leverage? No, no, no, no. Just, we don't, we don't foresee any significant change in the mix. It's, let's say, it's operating leverage. No, no, we don't factor any change of the mix there. Okay. Thank you. The next question is from Alessandro Tortora of Mediobanca. Please go ahead. Yes, hi, good afternoon, everybody. Francesco, you have four quick question. Okay, quick question from me. The first one is a follow-up on your indication on the adjusted EBITDA margin, okay, guidance. The question is not related, okay, to this year, but, let's say, going forward, if you can comment a little bit on the positive price cost spread you are currently experiencing, and if you see the possibility at a certain point to have a deflationary trend coming, let's say, for electronic products or it is too early. So just to understand, considering the historical level, the historical range you had of EBITDA margin for the company, if you see these, let's say, 21%, I'm commenting about the midpoint, if this is something you see as a one-off, or clearly the company has levers in order, let's say, to, at least, let's say, stay in this, 21% area? That's my first question. Thanks. Okay, Alessandro. So, thank you. Thank you for the question. Let's say that, in terms of, the historical trend we had on the costs and prices, as you say correctly, was deflationary. So historically, we had deflation on the cost side and also deflation on the pricing side, but with the deflation on the pricing side, which was lower on average compared to the deflation on the cost side. So in case the market in general reverts to a deflationary scenario on the, electronic components, we could assume that a significant, sorry, a similar, a similar situation could materialize. So basically, a slightly deflationary situation on the, on the pricing, on average, less deflationary than the cost. That's, that's, what was, let's say, the, the, the historical situation. So this could be the long-term scenario, let's say, when the market reverts to the usual trends before the, before the inflation. So in terms of, in terms of profitability, let's say that the impact would be of a continuous improvement on the efficiency of gross profitability, because we would have a cost reduction slightly higher than the price reduction. On the other hand, as you know, our EBITDA margin depends a lot on the operating leverage, so of course, that's also something to consider to evaluate the future profitability level. Okay. Okay, thanks, Francesco. The second question is on the CapEx side. I remember that in the past, we, you were commenting about, you know, the ongoing pipeline of adding production capacity, for sure in Europe, but also then in the U.S. Can you give us an update on this? Is the timing for this, let's say, production addition changed a little bit, or maybe, let's say, marginally postponed? Just to have an idea of what's your pipeline in terms of, organic CapEx, for the next quarter. Thanks. Okay. So yes, in terms of capacity expansion, yes, we are basically in the process of buying the land in Poland for- Mm-hmm. for the new factory for Europe. And then, yes, of course, we will monitor the evolution of the scenario, but in principle, let's say that looking forward, we could consider adding capacity in America. Then, considering the capacity, so these capacity expansions usually are included in our usual expectations on CapEx, so they don't imply any material changes in our historical trend in CapEx. The CapEx level, as of the first nine months, is in line with our expectations, and we don't see any surprises in our expectations on the CapEx level. Okay. Okay, thanks. The third question is related to the data center performance. We had in the past quarters many comments related to AI adoption and penetration. Is it something for you that is already sustaining the performance of this division, or do you see, let's say, in the medium term, not today, clearly, but do you see this factor as an additional support for the data center application? Thanks. Sorry, Alessandro. If I understood correct, your question is, if we, let's say, expect, if I understood correctly your question, or correct me if I'm wrong, if we, if we, let's say, believe that there could be additional factors to support our growth in data centers, that was, that was the question? Yes. Yes, coming from AI, okay? Ah, okay. So yeah, yeah. If you, if you see, let's say, the potential support, an incremental support coming from that in the, let's say, medium term, okay? Well, in general, yes. In general, yes, it's going to... The, The, let's say, the expectation of the market is that this is going to sustain demand significantly and probably also accelerating in the coming, in the coming, in the coming years, in general. So yes, my expectation is that there could also be additional positive developments in data centers. For example, just consider that China, in China, the market has been very subdued now for a year, so investments in data centers were quite soft, but eventually the economy will recover, and they will start again to invest. So in my opinion, we did not see all the potential deploying related to AI and other factors driving investment in data centers. Okay. Okay, thanks, thanks for this. And then the last question is on, on, let's say, heat pumps, okay? It is just related to your clients. Can you let's say, give us an idea of the sentiment, let's say, among your major clients, your major heat pump user? What's the feedback they are giving to you in terms of, let's say, production planning? So do you see, producer planning for, severe destocking or let's say, a very slow installation rate? So just understand if, on the producer side, on the following client side, do you see there's a sort of stop and go? Clearly, let's say, probably first half, 2024 going to be tough, considering the, the, you know, the comparison. Just to understand, what's the feeling they are giving to you, your clients on the heat pump side? Thanks. Okay. So, I would say that what we see is that, for sure, there is a destocking effect going on, because the huge growth of the last couple of years, let's say, led to some probably overstocking also on the, on the distribution network. In my opinion, the sentiment is that there is a destocking going on across the board, so across Europe, basically. While end demand, the slowdown is mainly concentrated in a few areas, especially Germany, Italy, and Poland. So there, let's say, the destocking is compounded by a short-term deceleration in demand. While other European countries, the end market is suffering much less than these three countries, talking, for example, about France or the Nordics. So, that's what we see. In any case, the general sentiment, the general expectation is that the market will restart at some point, probably with a, with a, with a more sustainable growth rate, which, as I always say, is positive for the industry. So, not as explosive as it was in the last couple of years, but in any case, sustained for the long term. If we restart, and probably when the market will restart, let's say the most of the destocking will be, will be processed or in any case, will be processed very fast. So, basically, to answer your question, probably the biggest factor that we see in the very short term is the destocking, because that's more general. We see a decline in the end demand concentrated in some countries, which are, which are important, especially for us, Germany, Poland, more than Italy, but in any case, they are important. But demand, let's say the sentiment of the market, is that demand will restart also there, then- Okay. Okay. Okay. That's what I see. Okay. Okay. Okay, thanks. Thanks, Francesco, for the answer. Thanks. The next question is a follow-up from Christian Hinderaker of Goldman Sachs. Please go ahead. Yes, thank you for fitting in my follow-up. I just want to come back to the comment that there could be some order delays in 2024, which was in the statement, and in the comment to one of the questions that the Q4 margin expectations or guidance isn't influenced by any change in product mix this quarter for Q4 versus last quarter of Q3. I just wonder whether that means we should assume the risk of order delays could be in any end market, or if we should be thinking of that order delay factor as being specific, say, to the heat pump market that we just discussed? Okay, okay, Christian, thanks. I would say that the highest risk of postponements is in the applications which are suffering the most, so for sure, heat pumps. Also because of the destocking, and since we approach the end of the year, of course, the stock levels become a sensitive topic. So, that's the highest risk, so concentrated in the heat pump application and, maybe also in refrigeration for a similar reason. So I would say it's concentrated in refrigeration and in wholesaling, in refrigeration, and especially in heat pumps. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Okay. Thank you very much for attending. Thank you so much for all your questions, and we look forward to talking with you again for the presentation of the 2024, sorry, 2023 full year results. Thank you very much. Bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.