Good day, and thank you for standing by. Welcome to the Elis Third Quarter 2023 Revenue Presentation conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Xavier Martiré, CEO. Please go ahead. Thank you. Good afternoon, and welcome to Elis Q3 2023 trading update presentation. I'm Xavier Martiré, CEO of Elis, and I am here in Paris with our CFO, Louis Guyot. After an overview on the Q3 2023 business highlights, I will hand over to Louis. He will detail the quarter performance by geography. I will then come back to provide you with a summary of our recent CSR announcements, and then share with you our views on the remainder of 2023. Finally, we'll have a Q&A session to answer your questions, and after our call, Nicolas Buron will be available to answer any of your questions offline. Before we start, as usual, please take the time to read the disclaimer. So Q3 revenue reached EUR 1.12 billion, with a very solid organic growth of +9.5%, despite a negative calendar effect of around 50 basis points. The performance was driven by the significant pricing adjustments negotiated in 2022 to offset inflation of our cost base, as well as the additional adjustments implemented since the beginning of 2023. Along with these pricing adjustments, the group displayed strong pricing discipline, which led to a moderate increase in churn in the quarter. We fundamentally believe that this discipline will lead to further margin improvement going forward. Furthermore, commercial momentum remained good in Q3, with many additional new contracts signed in workwear. In hospitality, the comparable base was difficult. Summer 2022 was strong, and we observed a mixed picture in 2023. Our volumes were in line, globally speaking, with 2022 at group level, with some geographies being slightly above last year, some other below. The good news is that September showed some improvement across the board. This good trading performance allows us to confirm all our 2023 objectives, and our relentless pricing makes me very confident looking at 2024. I will come back to this at the end of the presentation. In Q3, we also continued to deleverage the group. Financial leverage stood at 2.2 times at the end of September, perfectly on track to get to slightly below 2.1 times at year-end, which is aligned with an investment-grade rating. On that note, Moody's raised Elis outlook to positive from stable at the beginning of October, which is an encouraging sign. The next slide provides an organic growth breakdown for Q3 and the first nine months. Year-to-date organic growth at the end of September was above 13%, driven by strong price effects to offset inflation, with some differences between countries depending on the local evolution of wages. Catch-up in hospitality in the first quarter also led to some uplift on revenue with France, the U.K., the, and Southern Europe, the beneficiaries of this catch-up. The Q3 dynamics remain the same with Central Europe, U.K. and Ireland, Latin America and Southern Europe still delivering double-digit organic growth. Louis will provide you shortly with a detailed review of every geography. Moving on to the next slide. We continued to sign many new workwear contracts in the third quarter. This reflects the accelerating outsourcing trend that we have noted since the pandemic, and the change in market standards, often driven by new regulations. These changes had been identified by Elis, and we built up our sales force to capture as many opportunities as possible in all markets and in every country. We expect this trend to continue going forward, and we see many other pockets of growth across our different businesses. As an example, we are being proactive in opening the nursing home market in both Spain and in the UK, where we launched dedicated offers with a specific sales force. And unlike other countries, such as France, those markets are still largely fragmented among small, independent players that usually in-source washing. We currently observe some market consolidation going on, along with an overall professionalization of the industry. These bigger players that emerge generally opt to transition to outsourcing linen washing, and we work hand in hand with them in that process. In the healthcare market, we also signed several new contracts since the beginning of the year with public hospitals in the U.K., France, and Brazil. The post-COVID environment remains very favorable for Elis, with an increasing need for hygiene in general, notably for pest control and clean room business, which continued to deliver strong double-digit growth year to date, to reach cumulated revenue close to EUR 200 million in the first nine months. Elis is already the European leader in reusable clean room garments, cleaning systems, goggles, and related contamination control solutions. Our existing client base provides us with many cross-selling opportunities in these very technical and highly profitable markets. We also continue to roll out the offering of our services to small clients. As of today, we only address small clients in fewer than 10 countries. Our ability to efficiently serve small clients is essentially linked to the density we have in a specific country. Therefore, as we grow TDD everywhere, organically or through M&A, our density is also improving year after year, and we will be able to serve small clients in more and more countries going forward. This should contribute to margin expansion in the future as a very efficient logistic in place with service to small clients generally leads to good margin. We are currently deploying our offer for small clients in Sweden and Brazil. Moving on to the next slide, I'm very satisfied with how we have been able to offset inflation since the beginning of the year. This clearly highlights Elis' pricing power, which is a key component of our business model and one of the group's biggest strengths. I want to give you some color on the reasons for this success. Part of the reason why we have always managed to efficiently pass through inflation of our cost base to our clients, is because we always have been very transparent with them, disclosing our main cost indicators, such as minimum wage and energy price. At the end of the day, the price of these cost items are public data, so it was easy for our clients to understand the evolution of our cost base. Second, our services are essential to our clients' activity. Hotels and hospitals simply cannot operate without linen. The same goes for industrial clients. Uniforms are very often mandatory, and they need our service to properly run their business. Third, the cost of our service represents only a fairly small component in our clients' P&L. As an example, we charge only EUR 5-EUR 10 for the linen of a hotel room, depending on whether we are talking about a low-budget hotel or five-stars palace. Compared to the actual price of a hotel room, you can see that the cost of our service is not very material. Also, our service is fundamental. When looking at our other end markets, the cost of our service is actually even less material for our clients than in hospitality. Bottom line, when we apply a +10% or +20% price increase, we are talking about between EUR 1 and EUR 2 more for a hotel room that is often sold for more than EUR 300 a night. This is not material for most of our clients. Additionally, in most cases and in more geographies, pricing negotiations were made a lot easier by the fact that average room prices have also significantly increased over the last two years. Fourth and last, alternative solution to our services are very limited. Re-insourcing is not really an option. We don't see this happening in our markets, as it would result in higher costs for our clients. Furthermore, our competitors have more or less the same cost base as ours, and there is no risk of disruption from an alternative way of providing the service. It means that everybody is facing the same inflation problem, and we have noticed overall rational behavior from our competitors in most of our markets. These four reasons combined explain why we have been successful with our pricing adjustments in this challenging cost environment. Nevertheless, we saw this year a moderate increase of our churn rate due to this pricing discipline. Moving on to the next slide, our pricing dynamics going forward will be essentially impacted by the increase in salaries. Energy will have only a slight impact. As a reminder, salaries remain by far the most important contributor to our cost base, at around 60% of total cost, whereas energy costs only account for around 10%. In 2023, our energy bill will be slightly higher than in 2022, because a share of our 2022 volumes had been negotiated before the energy crisis, so at low prices. All in, we expect the inflation of our costs to be at around +9% in 2023. As far as next year is concerned, wages will continue to significantly increase in all geographies. This will mechanically impact our cost base way more than the decrease in energy costs. Therefore, there is no reason why we will not continue to pass on some pricing adjustments in 2024. Let me now hand over to Louis. Thank you, Xavier, and good evening to everyone. Let's start on slide 10 with France, where organic revenue growth was 8.8% in Q3. This was driven by two main factors. First, a very good commercial momentum, as shown by the record number of new workwear contracts signed. It is a clear illustration of what Xavier has explained on the growing trend for outsourcing in workwear, on the sales organization we have set up to answer this need. As an illustration, the value of the workwear contracts signed in 2023 so far is 10% above what we did last year. Pest control is also very dynamic, with a strong organization, both for sales and for technical support, to answer the growing needs of the customers. Second driver, the good pricing level corresponding to the carry-forward effect of the adjustments negotiated through 2022 and some new adjustments to offset cost inflation, beginning of January. On the other hand, the hospitality activity was slightly lower than in 2022 in July and August. You have seen French hotels speaking of a drop of 2% in volume. September was better, and we see a good pickup in October due to the Rugby World Cup and the good weather. Clients are optimistic for the rest of the year, and the signatures of new contracts are good. That said, we note a comeback of the default rate among the small clients, which returned to pre-crisis level. Moving on to the next slide. Central Europe delivered organic revenue growth of 12.3%. Price effect was especially strong, as a lot of negotiation initiated in 2022 took some time to unfold and were implemented either late last year or from January 1 onward this year. You remember that minimum wage in Germany increased by 25% in 2022, with the biggest increase in October. It was a massive shock to pass to clients not accustomed to price increases, especially in healthcare. That drove a couple of tough discussion, and there are some losses as we have been very disciplined to pass inflation. The other markets are very well-oriented, starting with workwear, where the strong developments are still going on in Germany, Netherlands, Poland, Czech Republic. The outsourcing trend doesn't slow down. We have a strong sales organization to answer it. As an illustration, the value of the workwear contracts signed in 2023 in Germany so far is 2.5 times what we did in 2022. In Netherlands, it's 27% above last year. We are also very happy with the hospitality market, market in Germany. As in U.K., it has now moved to a profitable market with decent prices, and we are signing a lot of new profitable contracts. Scandinavia and Eastern Europe now. Organic growth was +5% in Q3. The workwear market is still dynamic, especially clean room, with outsourcing trends on new business implemented. Our organization is strong to answer those needs in all the countries of the zone, the four countries of Scandinavia, of course, but also Baltics, where the growth is impressive. In hospitality, activity was good during summer, especially in September. Clients are optimistic for the rest of the year. Our pricing policy is consistent in the region, with lower impact than other geographies, due to the share of public healthcare clients in the mix. Moving on to the next slide. Growth was very satisfactory in the UK, Ireland, with organic revenue growth of 11.6%. One important driver is still our great pricing discipline in hospitality, coupled with pristine quality of service, but where we assume temporary some contract losses. We now have a profitable market, which was not the case some years ago, and allow us to push more for new contracts. The level of sales this year is twice the level of last year. Apart that, the activity during summer was slightly below last year. The workwear business is going well, with losses under control and further commercial developments on the back of a massive investment in sales force in this segment, which is now delivering. As an illustration, the value of the workwear contracts signed in 2023 so far is 28% above what we did last year. That being said, the economic situation is not excellent, as you know, so we see there on there some lower activity of the clients, for example, in retail. Last segment, healthcare, with still excellent relationship with NHS Trusts, which allows both for pricing fairness and commercial development. Moving on to the next slide. The success story continues in Latin America with 10.9% organic revenue growth in Q3. We continue to open the market in the region in healthcare, with many new clients outsourcing for the first time, public or private. As you know, the potential market is massive, and we see the path for long time development. The potential to unlock is the workwear, where the growth is impressive, but the outsourcing rate is still very low. In all the countries of the zone, the inflation is now receding in the region of 5%, but the natural lag of the pricing set it above, as it is usually the case in this situation. In Southern Europe, organic growth is still very dynamic, at 10.3% in Q3. Our pricing policy remains strong, with some marginal losses in hospitality. In this segment, hospitality, activity was good during the summer, especially in September, and the clients are optimistic for the end of the year. We have a good trend of new contracts signed, way above last year. In healthcare, the situation is stable, with good retention and decent pricing discussion. We are still opening the workwear for industry, mainly in food processing and pharma, as you know, the outsourcing rate is very low, and we are educating the market with some push from regulation and more aspiration for health and safety. As an illustration, the value of the workwear contract signed in 2023 so far is 22% above what we did in 2022. So moving to the next slide. Net financial leverage decreased below 2.2x at the end of September, exactly 2.16, which clearly paves the way to the full year target of 2.1. You can see on the chart that we have made strong efforts in 2019 to reduce the net debt in absolute level, which is now EUR 200 million below 2019, despite COVID, and despite the Mexican acquisition fully paid in cash. At the same time, we have clearly stated our willingness to reduce leverage below 2x and obtain investment grade status. The deleveraging trajectory that we anticipate is in line with this investment grade rating requirements. Once obtained, the group's financial policy will aim at maintaining this rating. Let's now- Dear participants, please continue to stand by. Dear participants, thank you for your patience. Please continue to stand by. Okay. Hello? Dear speakers, you are back. Yeah. So I assume you got the page 16. So let me now jump back on page 17, well diversified debt profile. So I was speaking about financial costs, and we have sometimes that increasing rates may hit the free cash flow. We believe this will not be the case. First, let's remember that we entered into this financial new era with a good maturity schedule from 2024 to 2035, with nearly everything at fixed rates. It allows us to pay around EUR 90 million financial cost out of EUR 3 billion debt this year. Second, we have already secured today the liquidities for the 2024 bond, so there will be no major refinancing before the 2025 bond. As we deliver strong cash flow, we shall be able to refinance this EUR 500 million bond with a much smaller one, which will limit additional costs even if the rate is higher. Besides, we believe that we shall be investment grade by then, enabling another contraction of the Elis spread, which has always been one of the best of its rating category. So at the end of the day, our financial cost will show only a limited increase in the coming years. With that, I will now hand back to Xavier. Thank you, Louis. So as you probably know, this is a real actor of the circular economy, promoting usage rather than ownership, which creates a real virtuous pattern. Our circular economy business model contributes to reduce the consumption of natural resources and extend the lifespan of our products. It is a sustainable solution to address current environmental challenges, and a much better option compared to far less environmentally friendly offers that exist on the market, such as do-it-yourself washing, and disposable or single-use products. We always search for extending durability when considering our products. This can be achieved through maintenance and mending, and we also work very hard on the reuse of end-of-life articles. We are totally convinced that these efforts will bring further organic growth opportunities in the future, given that our clients are increasingly concerned about these subjects.... In 2022, we committed to redefining our climate strategy and setting objectives aligned with the Paris Agreement and based on the science-based target methodology. Our climate change actions and performance have been recognized by leading rating agencies. Early October, we proudly announced that our ambitious climate objectives have been validated by the SBTi, an internationally recognized initiative which support companies in setting targets to reduce their CO₂ emissions, enabling them to contribute at their own scale to the global challenge of keeping the temperature increase below 1.5 degrees. These targets cover all three emission scopes. Our objective for Scope 1 and 2 is to achieve reduction of 47.5% of our emissions between 2019 and 2030. We will optimize even further our energy use in our laundries, increase our renewable energy use, and reduce the environmental footprints of our logistic fleet by optimizing delivery routes and accelerating the transition toward alternative vehicles. For Scope 3, we aim to reduce our absolute emissions from purchased goods and services, upstream transportation, upstream of energy, employee commuting, and the end-of-life treatment of sold products by 28%, by optimizing the laundry management process, further reducing the quantities of textile articles consumed, and building new partnership with our supplier to help them to reduce their own CO₂ emissions. We look forward to working with all stakeholders to achieve these ambitious objectives and contribute to the global effort required. Now, before moving to our 2023 outlook, let's take a quick look at the graph that we present every quarter. There you see the evolution of top line and margin performance over more than two decades, and it is fair to say that the last few years have clearly demonstrated the resilience of our business model and our strong pricing power. The backbone of our resilience is twofold. First, a diversified geographical footprint, with France representing less than a third of our business, and second, a diversified portfolio of clients in terms of size and end market. It is worth noting that this resilient profile was significantly improved with the acquisition of Berendsen and the addition of new countries in Central Europe and Scandinavia. Consequently, you can see on the graph that margin has constantly been evolving at high and stable levels within a narrow, a very narrow range, regardless of external events, and taking into consideration the impact of IFRS 16 from 2019 onwards. On top of that, one very interesting characteristic of our business that we saw in 2020, is that linen investments come hand in hand with top line growth. That means that conversely, they mechanically go down during bad top line years, with a favorable impact on cash generation. This led to two very strong years of cash generation during the COVID years in 2020 and 2021. Then 2022 free cash flow was nearly at 2021 level, at around EUR 230 million. And we expect free cash flow to improve by at least EUR 30 million in 2023, and going forward, it should continue to improve every year on the back of top line dynamism and progressive normalization of the change in working cap requirement. Moving on the next slide, the good financial performance that the group delivers is a result of the network density strategy we have been deploying for many years. This map shows we are number 1 in the majority of our 29 countries, sometimes number 2, and very rarely number 3. When we enter in a new country, we aim at becoming the market leader immediately, or over a short period of time after the first acquisition. Being number 1 allows us to operate a denser network, which eventually leads to efficiency gains for us and offers a second-to-none supply security for all our clients. At the end of the day, this strong network density is both a key competitive advantage for us and a high barrier to entry for other competitors, as replicating such a network is virtually impossible. Moving on to the next slide, we did notice some effects of the economic slowdown in the UK, but we still do not see anything supporting the case of a general slowdown in Europe. Also, as mentioned earlier, we saw some small clients, sometimes cutting some non-essential service in Q3. But if such a slowdown were to come, I would like to remind you of Elis's very resilient model. In industry first, a large part of our clients operate in very resilient sectors such as food processing, pharmaceuticals, and waste management. Furthermore, with the fixed-fee invoicing methodology we have in place with these clients, we basically charge them for the inventory in place. It means we are not impacted in case of a temporary and limited activity slowdown at our clients level. Second, healthcare is very resilient by nature. Third, in trade and services, just like in industry, we charge our clients with a fixed fee regardless of their activity level. Therefore, this end market is very resilient, too. At the end of the day, we consider that only hospitality end market, which account for 25% of total revenue, could be somewhat impacted by a global economic slowdown, even if we continue to see many construction or upgrade projects in the hotel sector in all our geographies, which should be a mitigating factor in case of downturn. You should also keep in mind that we are fundamentally less cyclical than hotels players, as the main reason why RevPAR goes down in times of crisis is a decrease in hotel prices, not occupancy rates, and we charge based on occupancy, regardless of room price. Moving on to the next slide, I would like to come back to our significantly improved growth profile compared to before the pandemic. We have already discussed the structural increasing client need for hygiene products, traceability and sourcing security that obviously intensified after the pandemic, and contributes to accelerating the development of our outsourcing. The need for a more secure supply chain also materialized as some clients reshored production operations from Asia back to Europe. The many shortages that appeared in Europe during the pandemic highlighted the importance of industry resilience in Europe and paved the way for some industrialization. This is clearly an opportunity for Elis, and as I told you before, we have already won some contracts, like with some semiconductor manufacturers that recently increased their capacity in Europe. There should be more opportunities like this in the near future, and this should further drive the growth of our workwear activity. I also want to mention the steady development of the nursing home market because of an aging population and the increasing share of Elis' fast-growing market in our mix, which mechanically helps to accelerate the group's overall growth. It is worth repeating that an increasing number of tenders come with CSR components, an area in which Elis, as an industry leader providing circular services, is well advanced compared to its small competitors. These three drivers are essentially market-driven, but we also are active on our side to further bolster our growth. First, the increasing share of our revenues that is generated in countries with strong organic revenue growth, such as in Latin America or in Eastern Europe, will mechanically contribute to the improvement of the group's total organic growth. In this respect, the deal we finalized in Mexico last year will be another catalyst. Second, as we saw earlier in the presentation, we are working hard to open new markets, to develop our product offering, and to roll out the range of our services to as many clients as possible. We are very confident that this internal initiative, combined with sustainable positive market trends, will support our organic growth going forward. So now let's talk about our 2023 outlook that we upgraded last July, and which we fully confirm today. Organic growth should be around 12%. This number factors in the volume losses due to our strict pricing discipline in all countries. We estimate that the impact from these losses will represent around 1% on a yearly basis. Thanks to the good efforts we made to neutralize the impact of inflation, as well as the productivity gains we achieved, we expect EBITDA margin to be up circa +70 basis points and EBIT to be above EUR 660 million, and headline net income should be above EUR 410 million. 2023 free cash flow is expected above EUR 260 million, and financial leverage at year-end will be just slightly below 2.1x. Looking at 2024, it is, of course, too early to provide any precise targets, but I can say we feel very optimistic. First, the pricing effect will be significant next year in the context of an inflation expected at around 4% in Europe. Even so, some macro constraints remain. There is no reason to believe that there will be any significant change from our regular volume growth. Second, the increase in our cost base will be under control, with a significant share of cost component being either already fixed, such as energy cost, or perfectly known by the market, and therefore easily adjustable, such as wages. Therefore, we are confident that 2024 will be another year of improvement in our main financial indicators. This concludes this presentation. I thank you all for your attention, and we can now move on to the Q&A. Operator, back to you. Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by. We will compile the Q&A roster. This will take a few moments. Now we're going to take the first question, and it comes from line of David Cerdan from Kepler Cheuvreux. Your line is open. Please ask your question. Yeah, good evening, gentlemen. Thank you for taking my question and to report some numbers quite in line with the expectation. I have some question regarding 2024. So can you maybe more develop what you expect in term of pricing and volume for 2024? Can you give us some numbers on those items? And my second question is related to your investment grade status. So this is an objective, and you always say that you want to stay investment grade. So my question is it compatible with a big deal? Have you some opportunities regarding some big deals, and if so, would you be okay to change this strategy to remain investment grade? Thank you. Yes. Hello, David. Good evening. So 2024, you easily understand that it's not time to give you a very precise target for the organic growth. So what we can expect is price increase close to the global inflation. So let's say around 3%-4%. And volume expectation so between 1%-2%. So that means that to expect something close to 5% at this stage, it is the good range of our own expectation. But of course, we will be much more precise when we will start the year 2024. And the second question, investment grade. Yes, it's very important, so I hope that it is a question of weeks now to have this improvement of the rating of Elis. It's clearly the. We have clearly the willingness to stay at this level. It's clear it's part of the strategy of the group to control the level of debt. To the second part of your question, do you have any big deal in the pipeline? The answer is no. Nothing today, so no additional comments to make because it's totally impossible to imagine anything, how we you finance and so on and so on and so on. Because of course, it depends on the nature of the deal, the size of the synergies, the pace to extract the synergies. And so it's so too much theoretical at this stage to talk about such kind of potential way to finance a deal that does not exist at this stage. Okay, okay. If just on the margin, what do you expect for 2024 to continue to progress? It was clearly our statement since this summer. We said that we have some good view on how we will still continue to improve the margin. A mix of classical improvement of our operations and productivity gains as always. Also the fact that we expect a positive balance of inflation in 2024, that will be quite unique for us. Because due to the policy of coverage of the cost of energy, we expect a decrease of the total cost of energy at least level in 2024. But of course, we will keep price increase close to the level of inflation. So, we will have a positive balance of inflation that, as I said, is for me, totally unique. I have never seen this over the last 15 years. It is the reason why we are so comfortable with another improvement of the margin in 2024. By the way, another strong increase of the cash also in 2024, because you remember that in 2023 we have a calendar effect that is very negative in December. The last two days are Saturday, Sunday, so a huge part of the money collected from the customer will arrive in 2024. That's why, when you see the guidance of EUR 360 million in free cash flow, 2023, it takes into account this negative calendar effect. Of course, we will have the natural improvement of the performance of the group in 2024, plus this favorable impact in the calendar. Oh, okay. Thank you. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from the line of Annelies Vermeulen from Morgan Stanley. Your line is open, please ask your question. Hi, good evening, thank you for taking the questions. I have 3, please. So firstly, could you, as always, quantify the price volume mix, if in your organic growth in the third quarter? Clearly you had, I think, double-digit price growth in the first half, but given, you know, you were already putting in price increases towards the end of 2022, I'm wondering if that pricing effect has come down within the mix. Then secondly, you know, given the free cash flow that you expect to generate for next year, and given the leverage is close to 2x or nearly already, basically, how should we think about capital allocation for 2024? Clearly, I know you want to, you know, hope to do more deals, but given the M&A activity has been relatively quiet in the last few quarters, you know, could we see more of a return of cash to shareholders? And then just lastly, on the contract losses that were lower margin, can you quantify that, please? Either in terms of basis points or millions of euros in terms of the contracts that you exited or didn't or, you know, chose not to renew, that would be helpful. Thank you. ... Yes, so the last question, so the magnitude of exceptional losses due to price, if I may. We are close to 1 point of the turnover, so something around the EUR 40 million on a yearly basis. First question, the breakdown between price and volume, in quarter three, we are at around 8% price and 2% volume with minus 0.5 in calendar effect. That will affect both, but it is so it's true, and it was totally expected that the price effect will slow down regularly in the all the year 2023. Because we, of course, we in 2022, we increased the price regularly all over the year. In 2023, it was more in January 2023, at the beginning of the year. It is the reason why the pricing effect will slow down regularly all over the year 2023. But what we have seen in Q3 is perfectly in line with what we expected. Then, capital allocation for 2024. So it's we'll re-precise everything, of course, when we present the guidance 2024 with the presentation of the results of 2023, so it will be March 2024. What we can say at this stage is, so you have understood that the free cash flow will increase significantly in 2024. In terms of M&A, we expect slightly more deals in 2024 than in 2023, because 2023, we had a lot of projects due to some family willingness to wait a little, because they wanted to have a full year normative, with normative activity before to sell. So probably we'll have perhaps slightly more bolt-on than 2023. For sure, more than 2023. So we can imagine that a classical year of bolt-on will be between EUR 50 million and EUR 100 million of cash spent for this bolt-on. On top of that, we have some EUR millions also to, for the earn-out of the Mexican deals. Then for the dividend, we have in mind to have a regular and small increase of the dividends, all paid in cash, so it will be something between 90-100 million EUR, something like this. And all the rest will be dedicated to decrease the debt in euro. So it is the capital allocation that we have in mind for the year 2024. Perfect. Thank you. Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from line of Ben Wild from Deutsche Bank. Your line is open, please ask your question. Hi, good evening, everybody. Just firstly, on the growth in Scandinavia, which seemed to slow down quite significantly in Q3, can you just touch a bit more on what's happening in that market, particularly with those public health customers and whether you'll be able to pass on higher inflation in the form of higher prices next year? And then secondly, on the Central European market, a similar question around your public health, your public healthcare customers. Are you expecting to be able to pass on significant price rises? What are the dynamics in that market? And can you explain perhaps in a bit more detail the margin dynamics into next year? Thank you. So first question, growth in Scandinavia. First, we need to carefully monitor some figures, quarter by quarter. As you know, we have some calendar effects that will depend, not only on the geographies, but also service provided. And in Scandinavia, we have a lot of invoice that are sent, weekly, on a weekly basis. So that means that, the impact of the calendar is, slightly more important there than at the group level, so it has a small impact. Nevertheless, it's true, and you are totally right when you say that, with some public big contract in Scandinavia, it was quite complex to pass some price increase. And it explains also why the price effect is more limited there, and why we have this more limited and more moderate level of organic growth in this part of the group. Globally speaking, to come back to your second question, what is the dynamics behind the negotiation with the public healthcare? At the end, let's be clear, it is a question of market share and position of the market. So we are clear, clearly in position to say that if the contract is not profitable, we are ready to take some risk, and depending on the market position we have, of course, it works well with no losses, or we have more trouble. So when you are in UK or in France, where we have solid market share, we have been able to have some agreement with the customer, or when you have a tender that will be renewed, we have some chance to win. In Germany, the market share of Elis is more limited. Even if we are leader in healthcare, we have only probably 30% only on market share. And so sometimes, 2 times, you will have family laundry that will accept some price that we consider too low to take some volume. But even if it represent a loss at the group level, of course, that is slightly above what we used to have as a churn rate. I want also to highlight the fact that it is still very, very limited. When you see the effort of the group in terms of price increase over the last 2-3 years, you remember that the net price increase last year in 2022 was 7%. The net price increase in 2023 will be 9%. We expect something close to the inflation, so 3%-4% net price increase again in 2024. And despite this, that represent a shock on the market. In the past, we used to increase prices by 1% only. Despite this, we say that we will perhaps have one point more in term, not more. So that's why it's not so massive. And so that means that even with public health care, in vast majority of cases at the end, we have the ability to find an agreement. They are not totally stupid. They understand that the request of price increase is totally fair and totally backed by some increase of our costs. Just as a follow-up, and given my colleague's questions on capital allocation, maybe I'll also ask a question on capital allocation. You mentioned in your answer to the second question about market shares, previous answers have referenced accelerating bolt-on deals next year. When we think about M&A next year and beyond, are the priorities primarily about continuing to consolidate your existing markets, or are you thinking about potential new markets for you to enter, and which markets would you consider to be the most attractive? As always, definitely the bolt-on, in the bolt-on strategy, is the priority. It makes so much sense to increase our market share and to increase our position where we are, that it is by far the priority. When we say that we expect more bolt-on next year, it's more bolt-on in comparison to 2023. That is a very small year in terms of bolt-on. Our expectation, globally speaking, for M&A next year, is to be back to a normative year. That's why I guess that we will spend between EUR 50 million and EUR 100 million for acquisition. For the rest, nothing is today on the table or in the pipe for opening a brand-new market or something like this, so I cannot discuss on this topic. That is too much theoretical at this stage. Okay, thanks very much. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. And now we're going to take our next question, and it comes from line of Simona Sarli from Bank of America. Your line is open. Please ask your question. Yes, good evening, gentlemen, and thanks for taking my questions. So first of all, you commented a little bit on the trends in hospitality in September. Could you please talk also about exit rates for the other divisions, if you have seen any significant changes throughout the quarter? Also, you talked about the resilience in volumes and that typically, clients are charged for the inventory in place, but could you please also comment on price evolution in a recessionary environment? And lastly, apologies for missing the number, but you were referencing to the free cash flow improvement expected in 2024. Could you please go back to that? And also, what should be the positive impact from the two incremental working days? Thanks. First, trend in hospitality, yes, September, slightly better. By the way, additional information, the first two weeks of October are very good. It's even better than the global trend of September. Too early to be too much optimistic, but it's always good to see, and our clients are quite optimistic. For the other end market, no major subjects. As we say, we don't see any sign of global recession in Europe. Sometimes, as explained, for France, very small customer, when it is the end of the contract, they will try to, perhaps, to cancel one of all the service we provide to make some savings. For instance, when it is not essential for them, they will keep uniform, but they will start to stop the service for mats, for instance. But it is very exceptional and absolutely no impact in our Q3 performance. And then what happen when we have kind of slowdown in the activity, and what is our ability to negotiate price increase and so on? on? For me, it's not; the link is very limited. At the end, as always, it's a combination of are they able to find another way to have the service with better conditions? So insourcing is never, never a subject, so they cannot do that; it would be more costly. All the other competitors will have the same, the same subject of, cost increase due to wages. I think that as a market leader, we are able to control a little, the behavior of the others, and they don't want to open any kind of price war against us. So that means that even when we have, we could consider more capacity due potential recession, first, don't forget that it will be limited because we are talking about, a small decrease of potential volume in case of huge recession. As a reminder, 8%, instead of 2% organic growth, we provided zero. So that means that even in a, in a tough, recession, the, the impact is very limited. So that means that the extra capacity in the market, due to a potential recession, will be limited. At the end, the market is, it's quite mature on this pricing subject. Let's have a look on the last big crisis in volume, so COVID. Everybody stay calm, even during COVID period, where everybody were looking for additional volume, we have not seen any crazy behavior on the pricing effect. In 2022, in 2022, we were not back to the normative level of volume at the beginning of the year. Nevertheless, we have been able to increase significantly our price to offset the impact of the inflation. So that's why I don't see any major risk of a link between global recession and more difficulty to increase our price. 2024 free cash flow. It is not because you have not well heard, it is because I didn't give the precise figures for 2024. It's too early to make a precise guidance for the full year 2024, for the free cash flow. The magnitude of the cash that will move from December to January, perhaps Louis, you can give some idea. It depends on the effort we'll be able to push on the last day, but we are speaking of EUR 20-30 million that can move one year on the other. Thank you. Thank you. Now we're going to take another question. And then the question comes from line of David Cerdan, from Kepler Cheuvreux. Your line is open, please ask your question. Yes, very rapidly on, can we have an update on the integration of the Mexican company? Second question is regarding your shareholding structure. So now you, you have a new shareholder, so what are the benefits from this Brazilian shareholder? And, and the last one is, regarding the U.S., are you contemplating this market? Is it in your plan? Thank you. Mexico, integration is perfect. Absolutely no, no subject. We are still by far above the expectation. It's a big pleasure to work with the family in place. You know, that they have an earn-out to improve also the value for them, and everybody's happy. They will have more, more money at the end, thanks to the earn-out. We have by far more, everything, so sales, margin, cash, than expected. We are by far the leader and 20 times bigger than the number two, so we don't see any kind of a huge competition against us. It's a question of outsourcing. The potential is massive. Potential of outsourcing in Mexico is still remains very huge, so we have a potential of double organic growth like this year for a long period of time, and with very solid margin. So absolutely a perfect integration. So new shareholders, it's a very good news. We have started to discuss and to meet the new shareholders, BW, for more than four years, so it was a kind of regular discussion in between us. It's very interesting for the company to have such kind of quality of new shareholder. It's a family-owned with a very long-term commitment with the company, with the ability to follow us and to in case of new project we know that they have the willingness to follow the company, so it's very interesting. On top of that, it's clear, and everybody knows that, they want to have more involvement in the company in terms of ownership. So they started with a block of 6%, but you know that, for instance, when they invested in Verallia, they significantly increased their stake in the company. So it's very probable that they try to increase in the future, their ownership also in Elis. And it's always interesting to have this quality of shareholder to discuss also about, of course, Elis in LATAM, but a more broader view on what we can do in the future, and it is a transition to the last question. So U.S., it's not new that we are always studying this big market. It is the biggest market of the world. The company was there 25 years ago. So we are regularly studying this market, but nothing on the table, nothing in the pipe for the short term in U.S. But just for the U.S., just to understand your point, some people could say, "Okay, is it another—is it a market in which Elis has a potential to enter, to develop, to be different from the existing market? And if you—and so at the end, why do you spend time on the U.S.? So it's... It is the biggest market of the world, so I think that it wouldn't be very serious from the company not to have a view on the, what are the trend in this market, what can we expect? The situation of today could change because you don't know what will be the evolution of flat linen, for instance. We said that today is totally fragmented, only some small players, but we start to see a kind of consolidation, so we need to stay agile to see what happens. As it is market, and it would be, if one day we decide to enter, probably it will not be with a new service, totally new for Elis and so on. It will be on the what we know, so workwear or flat linen. We have demonstrated every time in the past that we have the opportunity to deliver a strong improvement. When you could have exactly the same question some years ago with LATAM. What are you doing in LATAM to enter in 2014 in Brazil, far, far, far from your basis? You have so many things to do in Europe, and you enter with a company as a 21% EBITDA. It could be seen as a risk and stupid and so on. But nine years after, we are very happy to be there. We have now EUR 500 million of business in LATAM, with a margin that is at least at the group level. So, Brazil, we are at close to 34%-35% EBITDA in Brazil, nine years after. And this business mitigates the risk of the company, because let's imagine it is what a lot of people are imagining, that we could have a kind of recession in Europe in 2024. We will be very happy to have EUR 500 million in LATAM, not exposed at all to the recession in Europe, because we have 80% in healthcare there, with a potential of more than 10% organic growth. And it was not the case, by the way, in 2008, when we had the last recession in Europe. So it's a question of mitigating the risk and a better balanced portfolio of opportunities. So that's why, if one day... But as I said, we have nothing on the table at this stage. But if one day we enter in the U.S., I do believe that, if we stick in what we know, workwear, hygiene, flat linen, if we stick there, of course, we'll create some value. Of course, we will bring some know-how, and, it's a question of time, but of course, we will be able to deliver some improvement. If you remember, David, when we made the acquisition of Berendsen, I remember precisely in 2018, when we made the investor day to present the case, we had some questions. "Why don't you sell U.K.? The performance is very weak. You will have some trouble to improve. You should sell." And we said, "No, no, no, we will not sell UK, because due to the fact that the performance is very weak, it's perfect because we will create some value by improving the situation." And we started in 2018, in UK, with EBITDA margin at 22-23, something like this. Now, despite COVID, Brexit, inflation, crisis of energy and so on, we are now above 30%. So we have created a lot of value and in a short period of time. So that's why I think that even if we have no synergy, day one, if one day we enter in US, we have a way to create some value. Okay. But we will see. Thank you. Thank you. There are no further questions. I would now like to hand the conference over to Xavier Martiré for any closing remarks. No, no special remarks. Just thank you for taking the time to assist to this call, and I wish you a wonderful evening. Bye-bye. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.