Good afternoon, this is the conference operator. Welcome, and thank you for joining the Kering 2023 first half 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. François-Henri Pinault, Chairman and CEO of Kering. Please go ahead, sir. Thank you. Good evening to all of you, welcome to Kering's 2023 Half Year results call. Jean-Marc Duplaix, our brand new CEO, will go over the operational and financial highlights of the first half in a moment. Before I give him the phone, it's important for me to go over the rationale of the changes in our organization we announced last week. As you saw, I made a series of major decisions that will have a profound impact, I want to make sure that they are well understood. As you have also seen, we've just announced that we are buying a 30% stake in Valentino, I will also say a few words about that. Why did I decide to modify our organization, and why did I want to do it now? As I told you at the time of our full year results, we had some reasons to be satisfied, of course, but we had also reasons to be disappointed with our performances, and starting with Gucci. I heard many calls for new brand leadership, some kind of musical chairs at the head of our houses. What we needed in reality was much more than just moving people around. I wanted to change the way we operate for the long term. In fact, in the past decade, we tripled the size of Kering as we leveraged our brand's desirability and visibility to build their scalability. Having achieved that, we will continue, of course, to leverage the desirability and visibility of our brands, but at the same time, reinforcing their exclusivity is our top priority. This requires another set of skills at group level to guide and to support the brands. Over the past 10 years, we've made great progress in becoming an integrated luxury group. This transformation, however, is not yet complete, and we can still improve the way we steer our houses, so then they can reach their full potential. In a nutshell, the rationale of our reorganization is the following: It is to elevate the operational expertise at the group level. It's about enhancing our stewardship of our houses, and it is to empower them to focus on their core know-how. I'm certain that this reorganization is a decisive step, not only in getting our performance back on track in the short term, but more importantly, to capture the growth of the luxury world for the next decade. In their new roles as Deputy CEOs, Francesca Bellettini and Jean-Marc Duplaix will steer the group and its houses in an efficient, coordinated, and determined manner. Francesca has done a great job in her tenure at Saint Laurent, transforming it into a luxury powerhouse, overseeing a successful designer transition, and building a winning management team. By the way, Saint Laurent has been the most consistent growth story in the group. From now on, all brand CEOs will report to her. In over a decade, Jean-Marc has taken more and more responsibilities in addition to his core finance brief, and he demonstrated that he has the right leadership skills to lead all the group corporates, as well as financial functions. Francesca and Jean-Marc will report to me, and together, we will complete the strategy of the group and its houses. We will direct its execution and oversee their performance, and I'm looking forward to working directly with both of them in this new configuration. I have decided that Gucci needed a change in leadership for this new period. Marco will leave the group on September 20 2023, after Sabato De Sarno's first fashion show. Jean-François Palus has been, as you know, by my side for several decades now, and he knows the group better than anyone. He also knows Gucci perfectly, and he has worked with many Gucci executives over the years. By teaming up with Francesca, he will be immediately operational to ensure a smooth and efficient new chapter at Gucci. Jean-François will drop his board responsibilities, and he will be moving to Milan in September. Over the next month, we will iron out some of the details of this setup. I am confident that this team and this organization represent what the group and all its houses need to face the challenges and opportunities of the global luxury landscape. This being said, I wouldn't want you to believe that we pressed the pause button as we were working on this arrangement. In fact, H1 has been a busy period on many fronts. We pursued our investment in our houses, their desirability, in their visibility, and in their exclusivity. Their fashion shows, their events, were among the most viewed in the sector. Like, for instance, the Saint Laurent Men's Show in Berlin that you can see here. We organized a number of events to raise our profile in Asia, including the Gucci's highly applauded Cosmos exhibition in Shanghai and its Cruise show in Korea, or the Bottega Veneta repeat show in Beijing that happened last week. We reinforced the top line of our product offer, notably in high jewelry collections at Gucci, at Boucheron, but also Pomellato, showcasing you the unique creativity and heritage of these houses. We further raised the quality of our distribution and client experience. For instance, here you can see Bottega Veneta's recently reopened store. This is in London, on Sloane Street, and this store was qualified by a fashion publication as a library of good taste. Tightening our control over our supply chain is also a priority, and we have made strides in this area as well, with moves like the acquisition of UNT by Kering Eyewear, or the opening of Bottega Veneta's specialized atelier near Padua, in the heart of Italian shoe manufacturing area. Of course, a major highlight of the first half was the launch of Kering Beauté, and its first concrete step with the acquisition of the famed house of Creed, the iconic high-end fragrance maker, which will propel our entry into the world of beauty. Finally, we remain at the forefront of the sector in terms of sustainability commitments. Here, we published the second edition of our biodiversity strategy, reinforcing our deforestation and conversion-free policies. We also became one of the early companies selected to pilot the world's first science-based targets for nature. This busy period did not stop at the end of the first half. We are thrilled to have reached an agreement with Mayhoola to take a 30% interest in the equity of Valentino. The agreement could lead to Kering reaching 100% ownership of Valentino no later than 2028. This is part of a broader partnership agreement, and we will explore potential opportunities that are aligned with our respective strategies. Valentino is a house that we have always admired. It's an amazing Italian name, rooted in haute couture and known all around the world. We are very proud to be able to support the brand innovation strategy that's successfully implemented in the past few years. We are also delighted to work once again with Jacopo Venturini, whom we know well, and with his team that has been running Valentino for the last few years. I think I don't need to go over the details of the deal, which are included in the news release and summarized on this slide. Just, I want to mention that we are hoping to close this operation by the end of this year. We are honored to have been chosen to work alongside Mayhoola on the development of Valentino, as well as on other potential opportunities. I will hand over the mic to Jean-Marc to review our 2023 first half performances. Thank you, François-Henri, good evening to all of you. On slide 10, our revenue in the first half stood above the EUR 10 billion mark, at EUR 10.1 billion, up 2% reported and comparable year-on-year. The 2-point positive top impact from margin broadly offset the negative FX impact. In Q2, revenue was also up 2% reported, but with a higher comparable growth, up 3%, scope contributing positively for an additional 3%, while FX was 4% negative. In the first half, our total revenue breakdown by region changed quite substantially year-on-year. Asia Pacific accounted for 37% of total, up 3 points. Western Europe and Japan both gained 1 point, respectively, at 27% and 7% of revenue. All these gains were at the expense of North America, accounting for 22% of revenue, down 5 points. I will discuss the dynamics driving the geographic mix. On slide 11, we provide the breakdown of revenue by segment for Q2 and H1. Comparable growth in Q2 was higher than in Q1, driven by Bottega Veneta and Kering Eyewear, as well as some improvement at our other houses. On Slide 12, let's dive into Q2 top line by channel and region. Retail, accounting for 77% of revenue, was up 4% comparable, or 8% excluding e-commerce. Online channel penetration decreased to 12% of retail sales, an inflection after the stellar growth observed in 2019, as customers returned to in-store shopping. In addition, the online channel is more exposed to aspirational product categories. Another feature of the second quarter is a confirmation of the recovery in tourism. Worldwide, tourism accounted for nearly 25% of sales, with Western Europe, and to a lesser extent, Japan, over-indexing. Both North America and Asia Pacific were more skewed to locals. Turning to the regions, Western Europe moderated sequentially, up 4% comparable in Q2, on a very demanding compared base, on the back of some softness with locals. Growth was largely fueled by tourism, mostly American and Asian, with a gradual return of mainland Chinese, although they are still standing 60% below Q2 2019. Conversely, North America remained under pressure, down 23% comparable, a picture that is not very different from Q1. Traffic was not supportive across most brands, and sales were particularly impacted on entry price points. The U.S. cluster fared slightly better, down less than 20% in the quarter. Momentum in Japan was sustained, with retail up 26% comparable, a trend similar to Q1. Growth is fueled by tourism, mostly intra-Asia, notably from Greater China. Moving to Asia Pacific, the region accelerated sequentially, up 22% comparable in the quarter. Greater China was the key driver, up more than 50%, with a strong rebound in mainland China and very high growth in Hong Kong and Macau. Some of our houses performed better than others, with YSL and Balenciaga standing out. The rest of Asia was less supportive, partly due to tougher comps, but also to persisting softness in Korea. Finally, rest of the world was up 5% comparable, mainly due to the Middle East. Wholesale and other revenue was down 1% comparable, with very different situations. An 11% decline from our luxury houses, as we continue to enhance the exclusivity of their distribution. A strong performance at Kering Eyewear, up 21%, excluding the scope impact from Maui Jim, and a 13% increase in royalties and other revenue. On slide 13, a global view on recurring operating income, free cash flow from operations, and net debt in another year of investment for the group. Recurring operating income was EUR 2.7 billion, a limited year-on-year drop. EBIT margin stood at 27% and maintained a very high level of profitability, although lower than last year. This reflects the ongoing reinvestment in all our houses to nurture their desirability, tune their current trajectory, or prepare for the next phase of sustainable growth. Our free cash flow, excluding real estate acquisition and disposal, grew by 4% to EUR 2.1 billion, after more than EUR 500 million in CapEx in the first half, a year-on-year increase of nearly 50%. CapEx to sales stood at 5.2% compared to 3.6% last year, with some H1, H2 phasing. In the first half, we also acquired prestigious buildings in Paris, securing prime locations for our houses near place Vendôme and on avenue Montaigne, and sold a building in London. Taking this into account, CapEx was close to EUR 1.9 billion and free cash flow just above EUR 820 million. Operating working capital, for its part, stood at 16.8% of last 12 months' revenue, broadly in line with the ratio at year-end 2022. Net debt, excluding lease liability, ended at EUR 3.9 billion after the increase in dividend paid and real estate acquisition. Let's now look at Gucci, in which we continue to invest during this transition phase. Starting from slide 15, H1 revenue at EUR 5.1 billion was down 1% reported and up 1% comparable. Q2 comparable growth was similar to Q1, with retail also. In line with the house strategy, retail was again driven by higher AU1 through a combination of enhanced collection structure and price increases across categories. Best performances came from handbags, travel, and women's offer. Conversely, men and the entry-level segments were dragged, as well as e-commerce, which, as you may remember, had reached very high penetration in North America. Wholesale was up 2% in the quarter, royalties and other revenue up 8%. On slide 16, recurring operating income came at EUR 1.8 billion, a 35.3% margin. The increase in the cost base was driven by store expenses and design. In addition, Gucci pursued active communications initiatives to amplify brand desirability, investing in client and store experience elevation, as well as in high-visibility campaigns and events. Gucci held three fashion shows in the first half, including a spectacular display in Korea in May, and reinvested substantially in Asia with the Cosmos exhibition in Shanghai. The house is, of course, getting prepared for the September fashion show of the new creative direction. CapEx to sales stood at 4.5%, a 50% increase year-on-year, partly on a base more skewed towards the first half this year. This strategy was unchanged. Selective expansion, network enhancement, and investment to increase the efficiency of operations and control over the supply chain. For store network, I would highlight the opening in New York Meatpacking district, and the relocation of the Milan Galleria store to a beautiful, larger location. Saint Laurent delivered a robust first half, a testimony to the house's desirability and consistent execution. Turning to slide 18. Revenue in H1 was close to EUR 1.6 billion, up 6% reported and 7% comparable. Retail drove growth and now represents 80% of revenue. The second quarter was solid, up 7% comparable. Retail grew 8%. Product-wise, leather goods and ready-to-wear posted the highest performances, notably thanks to the strong success of spring and summer collections. The house also launched fine jewelry as part of its continued elevation and development strategy. It's a category where Saint Laurent is more than legitimate, building on its legacy and DNA. By region, YSL performed well across the board. North America was challenging, as the house kept its very disciplined approach in a market that was difficult and somewhat promotional. The house also applied its distribution strategy consistently. Wholesale was down 7% in Q2, reflecting continuing retailization and downsizing the number of accounts. You can see on slide 19, recurring operating income came at EUR 481 million, yielding a margin of 13.5%. Gross margin was boosted by favorable channel mix and pricing initiatives, both from pure increases and improved product mix. The house enjoyed positive operating leverage and kept reinvesting, with three fashion shows in the first half and higher communication intensity. CapEx also increased from a relatively low base in H1 2022. It is a year of investment for the house, with selective openings, including a few landmarks. You might be aware that Saint Laurent is preparing for a major flagship opening on the Champs-Élysées in Paris towards year-end. Some resources were also dedicated to strengthening production capacity and operations. Bottega Veneta kept reinforcing its position in the ultra-high-end universe. As you see on slide 21, comparable sales were up 2% in H1, with revenue at EUR 833 million. Here again, retail was a growth driver, up 6% in the Half Year and 7% in the second quarter, posting a sequential acceleration. By region, the house proved resilient in North America and performed well in Western Europe and Japan. It did not yet benefit from strong tailwinds in Asia Pacific. Bottega Veneta is now accelerating its initiatives to enhance its visibility in China, as you have seen with a beautifully pictured show held in Beijing last week. Product-wise, demonstrating the appeal of Andiamo, Icon, and Mini, leather goods and ready-to-wear were the best-performing categories, with significant increases in AUR. Ongoing rationalization of third-party distribution resulted in a double-digit decline in wholesale in Q2. Slide 22. Recurring operating income was EUR 169 million, confirming an EBIT margin above the 20% level on higher gross profit margin. Bottega Veneta continued to invest in stores, communications, and activations to amplify brand resonance and visibility across markets. CapEx was up on initiatives to upgrade the store network, including relocations, refurbs, expansions, conversion to retail, and a few openings. Our other houses had a soft first half, but improved sequentially, thanks to growth in retail and sustained performances of our jewelry houses. On slide 24, you see that their revenue was down 5% in reported and comparable terms in the first half at EUR 1.9 billion, with a decline limited to 1% in the second quarter. Retail was up for all houses in both quarters, but accelerated in Q2. Balenciaga's gradual recovery was driven by Asia Pacific. Alexander McQueen performed well in its core ready-to-wear category. Brioni was nicely up on a healthy mix of revenue from formal wear, leisure wear, and bespoke. Wholesale was still down sharply on the rationalization strategy and a challenging U.S. market. Our jewelry houses, Boucheron, Pomellato, and Qeelin, were up strong double digits in both channels, reflecting the appeal of their creations and the investments we have made to broaden their visibility. We are extremely pleased with the development of our jewelry activity quarter after quarter, and with a growing contribution to the group's top line. Slide 25, at EUR 224 million, recurring operating income was down from a very high base. EBIT margin was 12.1%, quite in line with H2 last year. That's when we first recorded the full impact of our stepped up investments in the brand's retail expansion alongside wholesale rationalization. We kept fueling their long-term growth, even if this translates into some negative leverage at Balenciaga and Alexander McQueen in the short term. CapEx is allocated to selective store openings, further enhancing penetration in key and new markets. Kering Eyewear on slide 27, delivered a record first half, with EUR 869 million in revenue, up 51%, including the contribution of Maui Jim, or 16% comparable. For Q2 only, comparable revenue was up 21%. All brands continued to be successfully developed. The integration of Maui Jim is going on smoothly. Kering Eyewear's EBIT contribution improved again materially, yielding a 21.5% margin, thanks to both benefit of scale and accretion from Maui Jim. It's worth keeping in mind, however, that some investments to further develop and expand Maui Jim are ahead of us, and that there is a seasonality in eyewear, with revenue and profitability more skewed towards the first half. Kering operating costs were well controlled. CapEx was EUR 93 million, a limited increase year- on- year, as we have reached a quite normative level to support our houses in IT and logistics upgrades. This is excluding, of course, the acquisition of the building previously mentioned. Now, looking at the remaining lines of the P&L on slide 28. Net financial charges amounted to EUR 204 million, or EUR 134 million, excluding interest on lease liabilities. Cost of net debt stood at EUR 40 million on higher debt level and interest rates. Other financial expenses were EUR 94 million, compared to a EUR 57 million income last year. The major part of this swing comes from recognition in the H1 2022 of a fair value gain on PUMA exchangeable bond derivatives. Corporate tax was EUR 692 million, a 27.1% tax rate on recurring income. Group net income from continuing operations, adjusted for non-recurring items, reached EUR 1.8 billion. Free cash flow and net financial debt are on slide 29 and 30. In the first half, excluding real estate, we generated over EUR 2.1 billion in free cash flow. Change in working capital was negative to, to a lesser extent compared to H1 last year, as the various components of operating working capital are indeed well under control. We provided the presentation excluding and including real estate impacts. On slide 30, at June 30th, net financial debt was EUR 3.9 billion, with a healthy net debt to EBITDA ratio of 0.5 x. In the first half, we paid EUR 1.7 billion in dividends, a 15% increase. To conclude, while there is no hiding that we are not yet where we want to be, I also want to echo François' confidence in the future. We continue to generate considerable cash flow and enjoy a very healthy financial situation. We are investing in the long-term success of our brands and increasingly in their exclusivity. The acquisition of Creed, that provides a cornerstone to our expansion in beauty and the investment in Valentino that we are, we announced today, marks new milestones in the development of the group. We have the right people and the right culture to face today's environment, and we just announced a major organizational change that will make us stronger, faster, and more effective. Now, we are ready to take your questions. Operator? Thank you. This is the conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star one and one on their touchtone 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 Thomas Chauvet with Citi. Please go ahead. Good morning, everyone. Thanks for taking my questions. Firstly, on Gucci and the transition, the appointment of Jean-François Palus as interim CEO and his relocation to Milan seems like a strong sign of the determination to implement some changes at Gucci. Could you elaborate on what, you know, will be the key priority for him and the Gucci team until a permanent CEO is appointed? What do you want perhaps to speed up as part of the strategic plan you presented a year ago in Paris? How long would you expect the CEO transition period to last? Secondly, still on Gucci and the numbers, if we look at page 223 consensus, it's about +7, I think, constant FX. The revenue, EBIT margin down 100 basis points, is that, Jean-Marc, a sensible scenario in light of what you're seeing in July? Would you expect the management transition at Gucci to drive a bit of a, maybe, a slight reset of 2024 expectations, which are also expecting a mid-single-digit revenue growth and some margin expansion. Finally, on Valentino, very interesting position of a 30% stake. What potential are you seeing in this brand? How does it fit in the group portfolio? Would you then have 100% of the capital? On that point, the option to buy the remaining 70% by 2028 could lead Mayhoola to become a shareholder in Kering. What do you think Mayhoola would bring to the group if they were to become a, I don't know, 5%, 6%, perhaps shareholder in Kering, as opposed to Kering buying the remaining 70% with new debt? You're talking also about potential joint opportunities. Are you mainly thinking about eyewear and fragrance? Thank you. Thank you, Thomas. I will start with Gucci. I'm not sure I have the first question, because you were very difficult to hear, to be heard. It was probably about if it will change, the strategy presented, in the past a few months, including in the capital market day. Okay. All right. To start with, the organizational changes at Gucci. Of course, Gucci, as you, as we all know, is our main asset, so it was for me, important to be pragmatic and very efficient in making sure that the transition phase and the relaunch of the aesthetic of Gucci was very well orchestrated and very efficient day one. I asked, as you know, Jean-François to take the temporary custody of Gucci. First reason, of course, is I trust very much his judgment, and I know that I can rely on him to take the right decision. Jean-François is someone that, as I said, know the Gucci organization inside out. He knows all the executive already. He's been running the group on my side for many years, as you know, so I know that he's gonna be immediately operational. That was, again, my key concern, to have immediate efficiency and the new appointment, to make sure that the relaunch and the amplification of the vision that Sabato De Sarno will bring to Gucci through this new aesthetic will be immediately operated at Gucci with the organization. Jean-François will, of course, and has already started on that priority, the relaunch of the aesthetic and making sure it's not just the fashion show, but it's also the months after the fashion show, where we have a full program of amplification that he's working on right now. Don't forget that in the new organization, Jean-François will team up, and has already started to team up with Francesca to make sure that all the components, all the areas of expertise are covered immediately at Gucci, product-wise, image-wise, communication-wise, and this is the case. Jean-François is assessing the organization, looking at where we still have weaknesses to be corrected immediately, assessing the capability of our key leaders in Gucci, which is already partially down. Of course, the top priority is to restore the momentum of the top line of Gucci going forward through the relaunch of the aesthetic of Gucci. And on that, again, my point here was to appoint someone that could be immediately operational at Gucci. Having in mind that having a CEO coming from the outside, which was another option, of course, that I considered, would have, considering the size, the complexity of Gucci and the phase of relaunch of Gucci, would have taken an adaptation of several months. If not a year, and I didn't want that. I decided to go to that direction of this transitional period with Jean-François, that I know that will be, immediately, very efficient, starting in, in September. The length of this period of transition, Jean-François is not here to stay forever, as I mentioned in the communique of the organization. We will assess the organization, we will put back Gucci on track, regarding the growth momentum of Gucci. We will assess the management team, the organization, and of course, Jean-François, with Francesca and myself, we will define the right profile for the CEO to recruit for Gucci, and we will start the search starting in September, October, to make sure that we take the time to have the right person at the right moment to lead Gucci for the years to come. I will jump on the question about the margin and the reset by starting first to say that the macro environment, globally speaking for the industry, is quite uncertain. In any case, for all the brands of the group, and starting with Gucci, we remain focused on implementing our long-term strategy, including short-term pain, like typically, the wholesale rationalization for certain brands and some other decisions regarding Gucci. Yes, definitely, 2023 is a transition year with soft revenue trend so far for Gucci. H1 margin may be, in a way, a good proxy for the full year. That does imply a slight margin improvement in H2 year-on-year. I want to be clear that we will support all initiatives that the new management and the new design team at Gucci would like to launch in H2 and going forward, to reignite the brand for the long run. I don't know if it's per se, a reset, but we will support all the investments needed. As already stated, the potential of the brand in terms of revenues and EBIT margin is immense and intact, compared to what we had the occasion to present. The trajectory to reach that objective might not be linear and comprise some phase of investment. You mentioned, of course, the operation that we just announced about Valentino. As you saw in the communique, you have the exact size and profitability of Valentino as of last year. The potential, as we look at the brand from the outside, of course, is very important. It's more importantly, very complementary with our brand. It's an iconic Italian brand. It's rooted in haute couture, in a very high-end, very sophisticated segment, which is the point that is very complementary with the rest of the portfolio. We with the discussion we had with the management and with the shareholder, we know where the brand can improve in the future. We are very confident in the capability that we will have partnering with Mayhoola. Don't forget that we start with 30%, but we will bring our expertise to the management, to make sure that we can speed up the growth and the development of Valentino going forward. The brand is, for me, typically the brand that we were looking at, respecting the criteria, as I always mention, when it comes to our M&A strategy with our portfolio. The potential of this brand is, in our opinion, quite significant for the next years to come. I'm aware to specify that we are also very pleased with the management that we met. Of course, we knew Jacopo when he was in Gucci, and we are very pleased with the management and the team around Jacopo, that is leading Valentino right now and for the future. When it comes to the investments that we're making and the fact that Mayhoola may become a shareholder of Kering, of course, they have the opportunity, and I mentioned the possibility for them to buy on the market to strengthen the relationship with us. In case of the, in the second phase of the path to control, if we were to pay partly in shares, there won't be any dilution due to that operation going forward. Again, it's important to remention, because it was the spirit from day one of our discussion with Mayhoola. Of course, the collaboration, the partnership starts with Valentino, but then we will broaden the opportunities that could arise in front of us, and we will work together to see if those opportunities are aligned with our respective strategy to work together on some opportunities. It's too early, of course, to say what would be those opportunities, but for me, it adds to broaden our scope of looking at the luxury market in the future. Thank you. The next question is from Anne-Laure Bismuth with HSBC. Please go ahead. Yes, hi, good evening. I have two questions for you. The first one is, coming back on the management changes. Given that Mr. Palus is there to ensure the transition at Gucci, can you share with us what are the criteria you are looking at for a new CEO at Gucci? Do the candidates have to be well-known in the luxury industry, or are you willing to give a chance to a newcomer? My second question is about the midterm target that have been shared by the former CEO at Gucci, of sales reaching EUR 15 billion sales and an EBIT margin of 41%. Is it still valid? My last question is about Francesca Bellettini, who has been appointed Kering deputy CEO. Who is going to lead the Saint Laurent brand going forward? Thank you very much. Thank you for your question. Regarding the first question, and it's part of my decision to rely on Jean-François to define that. Again, short term, we restore the top line, the momentum, the growth of Gucci, because the potential is completely intact, and I'm very confident that what is coming up in September, will brought us back on the path of growth of Gucci. That's the first thing. Then, of course, we will, by the in-depth assessment of the organization, of the leadership, we will define very precisely what is the right profile for Gucci, so it could come from the industry or not. We will really, with Francesca and Jean-François, analyze the different criteria that we want to consider. For me, it's all the option are open. Again, the CEOs in our industry that are already experienced at that size are very, very few, so it's also a good reason to open to the external world. I won't want to rush that. It's not the main concern today. Again, I have a very strong team inside Gucci, and now under the responsibility of Jean-Marc Duplaix to restore the growth and reposition Gucci in terms of aesthetic in the coming months. With the help and the support and the expertise of Francesca, we have all in place to restore that momentum of the top line in the short term. Of course, I will work very actively with Jean-François and Francesca again on finding the right profile to lead the brand for the next years to come. Concerning your question about the ambition for Gucci, I partly answered previously to Thomas. I think that, obviously, first of all, the strategy that have been defined by Marco, we have fully endorsed this strategy. I've already mentioned the question was now about execution and speed of execution and efficiency of the execution, but the strategy is still, I think, relevant when it comes to exclusivity, selective store openings, and so on, and also rationalization. There is no change on that side. Obviously, also, this is the second reminder I would like to do, in the past two years, we have always delivered, our ambitions and our objectives for Saint Laurent, for Gucci, for Bottega. I think there is no reason, considering the scale of Gucci and the brand position, that we should not reach, mid-term, the EUR 50 billion mark and the profitability going with that level of sales. As said before, I think the trajectory will not be linear, and we are not afraid to invest, if needed, whatever the impact on the profitability short term. To answer your question regarding Francesca, so to be clear, with no ambiguity on that, I asked Francesca, on top of becoming the deputy CEO of the group in charge of all the brands, I ask her to keep direct responsibility of Saint Laurent. This is very important for me, so she will remain the CEO of Saint Laurent. This is very clear. Why that? First of all, she has built a very strong leadership group inside Saint Laurent. She has very strong teams in place. Of course, following the appointment, we'll be working with her to streamline her organization, to make sure that she has an organization that enable us to be very efficient on both sides, and this is the case already. On that, I'm very, very confident that things will work very well. Maintaining a leadership of Saint Laurent will allow her, and this is very important for me, to stay grounded in operations, which is a very important factor to steer the development of all our brands. Don't forget that Francesca has 20 years of experience inside the group. She has worked for three different brands over those 20 years. She has worked directly with me for the last 10 years. I know her very well. I know how she works and where she can work, and I'm very confident in her capability to run the Deputy CEO position, which is, of course, different from running a single brand. I know her so well that it was an obvious for me, an obvious situation to offer her this position, and I have no doubt of the efficiency of this organization going forward with Francesca leading not only the, all the brands of the group, but keeping a very strong foot in Saint Laurent in the coming years. Thank you very much. The next question is from Edouard Aubin with Morgan Stanley. Please go ahead. Yeah, good evening. Three for me, and thank you for taking my question. Just to come back on Valentino. First of all, congratulations. Essentially, you had no M&A or little M&A over the past 10 years, and you have two in about a month. Valentino is obviously, it's a great brand, but, you know, which experienced a bit of pedestrian growth in the past four to five years. Are you gonna be able to generate synergies right away, you know, given that you're gonna have a minority stake? I don't know if you can comment, but is the reason for Mayhoola to move forward, the fact that, you know, they might have found it difficult as an independent mid-size brand, you know, to grow, and therefore, you know, that they could, you know, clearly benefit from the scale benefit of the Kering group? That's number one. Number two, on the management change, sorry to come back on that, one of the rationale, not the fact that, or maybe the fact that, you know, the Jean-François, you know, becoming temporary CEO and Francesca who's based in Paris, to strengthen, you know, kind of Kering's direct supervision or involvement of Gucci, which might have been an issue or not, I'd be curious to have your view on that? Number three, in terms of if you could please provide some indication by nationality and the change that's on the two-year stack. Apologies if I missed it, but between Q1 and Q2, and then the Americans on a year-over-year stack, that would be helpful. Thank you. Thank you for your question. Regarding the Valentino, of course, synergies are very important. The positioning of the brand is different from what we have. This is the main interest of the move, of course. Of course, we will bring synergies on the table. Of course, going forward, it could be real estate, it could be organization, logistic, it could be human resources, of course, if necessary. Yes, the fact that the group will be supporting Valentino is a very strong element of the decision of Mayhoola to partner with us on the future of Valentino. On that, I'm very, very confident. The discussion we had with the management of Valentino during the process of the acquisition reinforced our confidence in what we could bring to Valentino in the coming years to not only to continue to develop strongly the brand, but also to reinforce significantly its profitability. Just on that point, I would repeat and remind that yes, we are starting with a 30% shareholding. We will get a board representation, and some of our governance right commensurate with its, with its 3% shareholding. Of course, when you mention a partnership and collaboration, it does encompass some initiative to help Valentino to develop further. You can easily imagine that, of course, we will be at full speed in terms of synergy when we will have the full control. When it comes to the motivation of Mayhoola, you can imagine that we cannot elaborate on that. You asked also a question about the new organization, not only at group level, but at Gucci. As I said, if I take some perspective here, my top priority in November was to push and to speed up the aesthetic change at Gucci. That was necessary, considering that the top priority was there, and then my focus was on the design team and of course, on the creative direction of Gucci at the time. This is why I started by changing the artistic direction, because I couldn't see the change coming out. As you know, when you, when we do that, the time lag to recruit, to put in place, to organize a fashion show, and then to produce and deliver the new aesthetic in store is a year. I had to make sure that we reduce that as much as we can. We were able to define the right profile very carefully with the team at Gucci and with the team at Kering in finding Sabato. Sabato has been recruited. Sabato has been arriving, and Gucci was fully operational starting in May. He already traveled to the key market, China. He's right now in America. He's working very closely already with the merchandising team, the communication and marketing team of Gucci to prepare the show and the amplification of the show going forward. That was really the first concern that I had. I did consider that we needed also a new vision, considering this new chapter of Gucci. Gucci, the company, is never forget that grew very fast in a very short period of time. I think there was a lot of positive element in bringing a new leadership at Gucci. This is the role of Jean-François to really be, as I said, also, I want it to be very efficient, very pragmatic. I don't have years in front of me. I want to put back Gucci on track with this new aesthetic. This is what Jean-François will bring by, as I said, knowing Gucci very well, knowing all the persons, all the key executives of Gucci very well, not only in Milan, but also in the regions. Of course, Jean-François coming from the group, there's some fields where his expertise is not yet sufficient, and this is where Francesca, as Deputy CEO of the group, will support him and help him when it comes to the product field, when it comes to the image and communications field of expertise. This is why we have there a combination that is, for me, ideal in a such a transition and a relaunch of a brand of the size of Gucci. I'm very confident. We're not changing the growth strategy of Gucci. The elevation strategy that we started in 2019 is continuing. We are speeding up on that. It's not yet where we want to be. Of course, it takes more time to build, but we need, meanwhile, a strong fashion engine to restore the growth and the top line of Gucci going forward. Hello, Edouard, this is Claire for the question on the cluster. Year-on-year, versus 2022, the Chinese cluster is up +60%, so 60 for the group. Of course, you know that Chinese consumer have resumed traveling. Just to give you an indication, I think in Q2, roughly 25% of the Chinese spend was abroad, so not on the domestic market. Compared to 2021, on a two-year stack, we were up same thing at group level, around mid-single digits, with quite wide, I have to say, performances, depending on the brands. As Jean-Marc mentioned, you have two brands that are really outperforming with the Chinese cluster, namely YSL and Balenciaga, and two brands for different reasons, which are a bit below for sure in terms of growth with this cluster. Perfect. Thank you, Claire. The next question is from Luca Solca with Bernstein. Please go ahead. Yes, good evening, congratulations to Kering on featuring yet another fantastic Italian brand. They say that there's no Italian luxury conglomerate that grips Valentino, based in Milan, and that the Palacio had called it, you had called it the Milan, but at least a French-Italian conglomerate, so they are brothers. Congratulations to Jean-Marc and his new position. My first question is on how to interpret the changes at Gucci. I can only imagine how difficult it must have been to replace the CEO of the largest brand in the group, just ahead of a major new fashion chapter that is going to open with the catwalk show of the Sabato in September. What didn't work in Gucci's idea of Gucci or execution at Gucci, and how long is it going to take to fix it? Are we to understand that there were roadblocks there, and with this change, actually, things are going to be sped up? Is this, you know, a situation where we have to wait more or where we have to wait less, I wonder? My second question is on the overall organic growth performance of the brand. We've been focusing a lot on Gucci clearly, and the market has been focused on Gucci. If we look at the organic growth of other houses tonight, Saint Laurent, Bottega Veneta, and so on, they seem to be suffering a gap between some of the other peers. If you step back, what is the reason for this gap? Is there possibly a need to invest more to support these brands from a marketing viewpoint and confront competition that is possibly taking more of the limelight? I wonder. Third, your strategic vision for beauty. I was wondering how we can become the platform to execute on your beauty ambitions? I thought, but maybe I'm wrong, that you would need scale in order to play in beauty, because this is a very fragmented retail environment to local scale, to organize supply chain properly and so on. I would be very interested in getting your vision on how this brand can be a platform for your beauty ambitions and how things could potentially compound from this initial first step. Thank you very much indeed. Thank you, Luca. Thank you for your comments, your initial comments for Jean-Marc and for me. Okay, first question was about the change at Gucci and how difficult was that? Well, no, it's—y ou know, we have succession plan. My role is really to always make sure that I have the right executive at the right place at the right moment. Even though it was the biggest brand of the group, we have a succession plan that we review annually, every year, of course, annually every year, of course. I just decided, considering that was happening in the phase of transition, that instead of making a regular recruitment for a brand that was on path, on growth path, which was not the case, considering the active transition, that I needed a different setup to make sure that we were playing efficiency, urgency of the situation, to restore the growth in term of Gucci. No, it was, of course, Marco has brought a lot to the group. Again, it's a new chapter. We need a new vision, a new leadership to accompany the new chapter of the brand, and this is the decision I took. I wanted to make it properly because you don't transform a $10 billion brand like that. You need to make sure that the setup that you're bringing is the right one for the company, which I'm absolutely convinced that we took the right decision there, and we will see the result in the short term. You ask about the new fashion chapter, considering how long this could take. Again, Gucci is a fashion authority, so the desirability of Gucci has been rebuilt over the last 20 years on the strength of its creativity going forward. It was the case with Tom Ford, it is the case with Alessandro. We are bringing a new aesthetic to bring back very, in a very short period of time, a momentum to Gucci. Of course, it's never the first fashion show. The first fashion show will establish the new vision. We will start the amplification of that. This will have already an impact. Of course, the second and third fashion shows will be very key, as usual, as you understand, and as you saw in the past in many luxury brands. No, it won't take time. I'm pretty sure that we will resume, because, again, it's a change of aesthetic. It's not a change of full organization at Gucci. It's not a change of strategy at Gucci. It's just we are reigniting the creative engine, which is the key engine at Gucci. Still building on the side, the more elevated part of the brand, which is building up very well. We have very good results. Of course, it's not yet at the scale that we need to be more balanced between the fashion side and the elevated side of Gucci. Thank you very much for your compliment. I think that obviously, we cannot, you know, contest what just you said about the performance of our brands compared to the market and the peers. Let's start with a more qualitative assessment. I think that our brands are as desirable and as creative as ever. You may have seen the fashion show, the edition, and you see that there is still a very strong brand equity for all the brands. Some of our brands are doing pretty well, sometimes above the market. If I think about Kering Eyewear, if I think about our jewelry brands, our jewelry brands are clearly overperforming the market, especially Boucheron. When it comes to the other brands, first of all, we have two specific issues that you know very well. First, Gucci, and you mentioned it, also Balenciaga. Balenciaga, even if there is a rebound after last year's controversy, we see a gradual rebound, very strong rebound in Asia Pacific. Still, some improvements, some room for improvement in the U.S. or in the U.K. While in Continental Europe, we see that the brand is regaining traction. Obviously, there is a drag from that controversy last year. If we look globally, first, we had some brands with high exposure to wholesale in the context where we have still this wholesale rationalization, plus clearly weakness of the U.S. department store distribution, it is impact the performance. Now, if we look at the retail performance, there is also drag from online. It's true that we are very. I think we were convinced that we needed to develop the online business, and we have now the right setup to completely embrace the full potential of that segment. It's true that we see the context where online is suffering. Without online, you see that we gain few points in terms of growth, and quite materially for some brands. Now, there is also a question of distribution and brand presence. You know that Saint Laurent and Bottega Veneta are much stronger in North America and are more recently build the visibility in Asia, or sometimes are still building the visibility in Asia. When China is the main engine of growth in luxury, you build up our weaker performance. This situation don't last forever and can turn around pretty fast. Last but not least, all this elevation strategy, which is to rebalance our brands between China and fashion in a context where there is a weakness of the more aspirational segments. Clearly, there is a hit on the performance, and we see that our brands are performing very well in the higher price point segments. We have very solid results and achievement at Gucci, at Saint Laurent, and of course, at Bottega Veneta. To be honest, we didn't want to deviate from the from the strategy we have in terms of price discipline, in terms of elevation strategy, full price sales. Even if we know that at Gucci, in the current year, still the weight of outlet business will not decrease. Overall, we have stick to strict discipline in terms of pricing with less promotional activities. That would explain, according to me, the performance gap. Regarding Creed, I will pass the call to François. Thank you, Jean-Marc. You asked me about the Creed acquisition, how this acquisition could help the Kering Beauté platform that we want to build. First of all, let me remind you that Creed is the largest independent luxury fragrance player with a revenue last year that was above EUR 250 million. The scale is already very significant. As you know, also, there's a very high EBITDA margin. The positioning of Creed, this is important, is a very high-end segment of the cosmetic market, of the fragrance market. This segment is the fastest growing segment of the industry, growing at a CAGR of 15%, and it's forecasted to continue at that pace. Not only Creed is already scalable and bringing a scale to Kering, and you know, this industry, the scale is quite important, is meaningful to go to build something consistent in this area. Again, what Creed is bringing short-term, immediately, is two things: product development capability, they are very strong at that, they have proven that. The second element, they are bringing immediately a distribution network that we don't have to build. The experience that we had with Kering Eyewear, the success of Kering Eyewear was highly correlated with the capability we had to build a distribution network worldwide to reach directly the point of sales. This had took us many years at Kering, Kering Eyewear, and thanks to Creed, we will reduce very significantly the time to build those distribution capabilities that we need to distribute our products. That's Creed for Kering. Creed itself, you have to have in mind that we have significant growth opportunities there. If you take the geography of Creed, the exposure that we have in China, and more broadly in APAC, is very limited today. The EUR 250 million are mainly built in Europe and in America, this is a huge potential for growth for Creed, still remaining in the positioning of the high-end segment of the fragrance business. In terms of categories, Creed has been developing very successfully on the men's segment. They have developed some women fragrances, but we have a room to grow there going forward, and this is what we intend to do with the team of Creed, to push also on the women lines. In terms of channels of distribution, there is a very significant potential there on two areas. One is duty-free channel. Creed is almost absent on the duty-free channel as of today, but also on e-commerce. Creed is very, very limited in terms of development on e-commerce, and this is two areas also of potential for the brand. Not only it has already a significant scale, but we have strong growth opportunities for Creed, and it will bring, as you understood, capabilities that we don't have to build going forward. I'm very confident that it will speed up our capability to build Kering Beauté going forward. The next question is from Charles-Louis Coste with Kepler Cheuvreux. Please go ahead. Yeah, good evening. I have three questions, please, to follow up on Sabato De Sarno and Gucci. Could you please help us understand how fast will be the ramp-up of the share of Sabato De Sarno news collection into Gucci total product assortment? It will present its first collection in September, but I suspect it will account for a modest share of total products at the beginning. When do you think it will start becoming relevant at the brand level? On the deal with Valentino, can you confirm that the option you have is a call option, and do you have a right of first offer over this asset? Also, Mayhoola has other luxury assets, notably Balmain. Is this something you could consider as well as part of the joint opportunity you mentioned in the press release? Third question on the price you paid for the stake. If I'm not mistaken, the EBIT was EUR 147 million last year, with EUR 1 billion net debt, including IFRS 16. It would suggest something like 46x EBIT last year. Do you think this multiple makes sense? I'm also curious to know on what basis the valuation for the remaining 70% will be set if already decided upon. Thank you. Regarding the first part of your question and the arrival of Sabato and the ramp-up cadence of his new product offering. As you mentioned, the show is in September. Product will hit the stores in Q1 next year. When you heard me about the amplification, how important is the amplification just after the first show, it's all about that. Making sure that we give visibility of the product, even though the availability is not yet here, we give a strong visibility in the key flagship, for instance, on some key products faster than others, having the right window, having the right campaign, because that new aesthetic will also have an impact on the existing product of Gucci. It's, it would be wrong to think that we will only sell when all the product designed by Sabato will arrive in store. We will have an immediate, if the amplification is rightfully done, which is on what Jean-François, with the support of Francesca, Steven Cocchi on marketing communication, and Maria Cristina Lomanto on merchandising, are working on, to make sure that we have an immediate impact on all the product categories, on all existing products, as soon as the aesthetic is brought to the market. We expect to have an impact, not just when the products arrive, but before that, thanks to this amplification. Yeah, just to conclude on that first question, don't forget also that in the past few years, the brand has worked to also install some iconic products, especially in handbags. You don't forget, I imagine that 2/3 of the products in handbags, at least on the leather goods, were a carry-over lines. Of course, we won't change overnight the carry-over lines, and really to wear as part of the game, to have every year some newness and new items. Of course, it will be gradual, but at the same time, we want to see quite rapidly some impact with a clear new aesthetic being presented. I don't want to enter in the details of the agreement with Mirova. I think that it's quite clear that we have for the second tranche, there are some multiple exits window through options until 2028, with the latest window being pre-2028. It's a call. I want to elaborate more because as you can imagine, it's quite confidential in terms of deal. Balmain is not part of the deal and it's not contemplated at that stage that there will be something around Balmain going forward. When it comes to the price, you may know that or you know perfectly that Valentino, being not a public company, you have a few data about Valentino, but some of them have been made public regarding the performance of 2022. You are mentioning the EBIT, typically, this type of operations that we are looking at is EBITDA. You may have noted that the EBITDA was closer to EUR 350 million in terms of EBITDA recurring. It's really the basis for the valuation that we have mentioned, the valuation 100%. Thanks very much. The next question is from Antoine Belge with BNP Paribas Exane. Please go ahead. Yes, good evening. Three questions. I think you mentioned that Valentino was quite unique and complementary to the portfolio. It's a couture brand, and Saint Laurent is also, so, if I'm a bit naive, I'd like to understand a bit specific positioning or hear a bit more about how Valentino is really that different from the brand like Saint Laurent? My second question is coming back on the previous question of who care about, you know, at the end of performance, but the more normalization of certain brands, Saint Laurent in the U.S. In the U.S., the retail performance was down 21%, so the impact of wholesale, Saint Laurent, I am so, not so much about as clash, you know, and I don't think it's more online than any other brand. I mean, should we worried or was it something exceptional to see a further deterioration and down 21% is quite substantial. Finally, regarding Gucci, so if I understand correctly, the kind of margin for the full year, you said H1 was a good proxy for the full year. In the previous earnings call, you had mentioned that in March, Gucci retail was at 10% like all the other brands, and then you landed at 1%. I would expect that in June and probably July tougher comps, there was no COVID in China, and in those two months, that the Gucci brand at the worldwide level, it must be running negatively. If that's the case, and please confirm that, how? Is it even a good thing to be maintaining the margin and actually maintaining the slight decline at a time where, you know, LVMH, for instance, the analyst estimate, they could even invest even more than we thought. You know, we're talking about with teams increasing marketing. Yeah, that's where I don't really I was not expecting you to maintain a 35% margin this year. Thank you, Antoine. Coming back on the first part of the question regarding Valentino, the complementary, or not, with the portfolio, in particular Saint Laurent. Well, already, if you look at the campaign and the products, you can already see that the positioning is quite different stylistic-wise. The inspiration in Saint Laurent, the silhouette and the attitude is at the heart of the inspiration of the brand. The sophistication of Saint Laurent is very different from the sophistication of Valentino, as you mentioned, coming from haute couture, which is not the inspiration at all of Saint Laurent. When you look at the customer of the two brands, it's very rare that we have an overlap among our customers. I look at that with Saint Laurent, of course, but, our customers are very, very few of them, customers of Valentino, at the same time. It's really two different positioning. One is haute couture, inspiring the ready-to-wear, the other one is the vision of Anthony and through the code and the symbol of Saint Laurent, of the vision of the world that is coming through the attitude and the silhouette of the Saint Laurent woman that is driving the positioning of Saint Laurent. One is much more on the cocktail slash red carpet type of positioning. The other one is really different from that. For me, there is absolutely no overlap with Saint Laurent, when it comes to Valentino. Thank you for your challenging question, Antoine. We never said that there was not the situation in the U.S., and we don't say that everything is coming from wholesale platforms. You know that we provide always a very transparent and candid view about the situation. It's true that there is a sort of deceleration for Saint Laurent in North America. You know, Saint Laurent, like the other brands, is in a process of elevation. We have already mentioned the ambition that the brand has to increase the share of VIC in its total business, which is precisely the case. I can tell you, and I can really confirm you, that the figures are showing that we are growing fast in the high-end segment. The context is that, in the past few years, if you compare the size of Saint Laurent in 2018 or 2017, and the size of Saint Laurent today in the U.S. or in North America, Saint Laurent has dramatically increased its footprint in terms of sales. Not necessarily in terms of network, but in terms of sales, which is the sales density, which is incredibly high still today. It's true that it has been made through the expansion of online, through the capacity of the brand to engage with more aspirational clients. We are at a time when some products which were not targeted, but which were very successful with aspirational clients, today, with the elevation of the brand, are above the equivalent of EUR 2,000. It's true that in this case, we are losing among the most aspirational clients. To be honest, also, I can confirm also that the U.S. market being very challenging with the department store, with some tiers being very promotional. We decided not to have some modern activities in the U.S., and it was to the detriment of the business. The last question, it's the question which is coming quarter after quarter, as if we are making the choice to protect the EBIT margin at any price, without being conscious that we need to invest. The point is that, as we said already, is that first, we need to be sure that the investments we are making are paying off. We have the right level of investments, with the right level or the quality of initiatives that are productive and are paying back. I can tell you that in the past few years, we have increased massively the resources allocated to Gucci. We know perfectly that we have increased a lot the budget allocated to stores, to communication, and so on. We will continue to do so. It's not because you will open temples, you will have a lot of events, if they are not well prepared, well anticipated, it will not produce a positive impact. The reason why we are changing also the organization to be sure that we have the right people at the right level in all the different layers, that all the initiatives we have will pay off. Of course, as we said before, and I think I was very clear, if there is a need to invest more, we won't hesitate. If there is a part of research to be made, we will do it. As long as, that Jean-François has not given back the sentiment and the feeling and determine an action plan together with Francesca and François-Henri, it's useless to tell you what will happen and to speculate on what will be our decision. Okay, many thanks. regarding my comment about Gucci being negative in June and so far in July? Antoine, I think it's, we're not going to comment on a monthly basis. I take the opportunity to say we're already having one hour and a half of a conference call almost. We're gonna take the two last question. Thank you. Thank you. The next question is from Chiara Battistini with JPMorgan. Please go ahead. Hello, thank you. Thank you for taking my questions. I have one following, follow-up on Gucci and the management transition, and I was wondering, in terms of the appointment of the permanent CEO, is there anything you need to see for that to happen in terms of maybe inflection of the organic growth or any positive signs? Or you're going to transition to the permanent CEO once you have identified the CEO, even if the brand is not showing inflection? On the elevation strategy of Gucci, is it just a matter of driving the mix up and introducing and pushing the higher end of your product portfolio? Or do you think there is a bit of cleanup also to do on the volumes and maybe on the more affordable side of the product portfolio? One question on Japan. There was very strong Q2 for Gucci. Also generally better versus my expectations on for all the houses. Can you just remind us how much of the Japan is now tourism, and any indication on the Japanese traffic specifically? Whether you are planning further price increases in Japan for the second half of the year? Thank you. Thank you for your questions. I will start with the management transition at Gucci. Again, my key word, my key priority was efficiency in putting back on track Gucci in terms of top-line growth, particularly when we are approaching the relaunch of the new aesthetic of Gucci. I'm not gonna go back on that. You know, I didn't want to have another transition because I was bringing, at this moment of transition, a new CEO coming from the outside, discovering the company or even discovering the industry. That was, for me, not an option. We need to go through this transition, making sure that we are back on track. Then as soon as this is done, and we will fine-tune the organization, fine-tune everything that needs to be reinforced, could be product development, it could be supply chain also. Then we will, based on that, bring on board a new CEO and a company that is full speed going forward, where the priority is the development of Gucci above the market growth in the coming years. This is when I will launch the search. Again, you understood that we have, for years, each brand, a permanent search, a permanent succession plan, not only with internal candidates, but also with potential external candidates. We already have a short list of potential people that could be suited. I don't want to rush that. It's not the priority today. The priority, you understood, is to rebuild the momentum of the brand. As soon as we're ready, we already have some very clear idea of the profile that should be leading Gucci for the next 10 years. The elevation strategy, you have a lot of different angles to look at it. Clearly, the point is not necessarily to elevate the brand by alienating the aspirational clients. It's just a question of being relevant in all the different clusters in terms of price and clientele. You know that we already mentioned historically that our brands, and especially Gucci, was very concentrated on a quite narrow range of price points. I think there is. On that point, we are making good progress in the more elevated part of the collection. Still doing quite okay in the core offer. We need to continue to develop the entry price segment, where maybe we are missing relevant in certain cases in the offer. It's true that in H1, and it's particularly true in Q2, the goals were driven, first of all, by price, by AUR, volumes were negative. It does not mean that there is no cleanup to be made. In that sense, it's typically what Maria Cristina Lomanto is doing at Gucci, which is a simplification of the offer in, with a reduction of the SKU in certain cases. What is even more important, it's about distribution. I mentioned previously that, of course, it's not in a transition year, we will start to rationalize further the distribution. We made a huge effort in the past few years about offer, but I can tell you that going forward, there will be also some additional cleanup in terms of distribution, and that will contribute also to brand elevation. I will pass the mic to Claire as regard Japan, that it's true that Japan is doing extremely well. If before taking, giving you some indications about tourism versus, you know, local, it's important to see that if our brands are successful in Japan with tourists and also locals, it means that they are still very desirable, Gucci and the other ones. It's a good sign that our brands, to bounce back on the previous question, are still demonstrating desirability and relevance in the market. Thank you, Jean-Marc, hello, Chiara. The mixture is local in Japan in Q2, sorry, joint was roughly 30% of the mix. More or less back to where we were in 2019 before COVID. 70% locals. You're right, Japan is quite attractive in terms of pricing, because if I have a look with the currency movement, of course, Japan is more or less on par with Europe in terms of prices. It's clearly the cheapest area now to shop in Asia. I will not comment on upcoming price increases, but there is for sure a question open on Japan, whether or not to adjust the prices, keeping in mind that there is good momentum with tourists, of course. It's a bit softer with locals in Q2, but the comp was very high with locals in Q2 last year. That's a good question, but I will not provide indication on what we're gonna do on the pricing there. Great. Thank you. Thank you. The last question is from Louise Singlehurst with Goldman Sachs. Please go ahead. Good evening, François-Henri and Jean-Marc. Thank you for taking my questions. We've obviously had a lot of information and understanding just how busy you've been in the first half, I'll keep them brief. Just going back to the Gucci and the management change and the transition, we've obviously had a lot of information and background already. Just to confirm, and given, I guess, the operational focus that we've seen from Jean-François over the years, can we just check that there's nothing more operational that needs a bit more focus at Gucci, that we might be underestimating from the outside, or anything that needs to happen, I don't know, supply chain, distribution, that could impact the growth profile above and beyond, obviously, the brand performance? The second question for Jean-Marc, just going back to the margins. I suppose the surprise at the moment is the level of investment that's going into Gucci, given the fact that we're waiting for a lot of the new product. Optimistically, can I ask whether this is a smoothing of the margin profile, i.e., despite the investment up ahead, we shouldn't see a step down in margins next year, all else equal, for the brand and the new product coming through? Actually, I will ask the third one very briefly, just going on the Valentino deal. I wonder if you can just talk about timing, you know, why have the stars aligned in 2023, or whether this has been going on for a long time? Thank you. Thank you for your question. To answer the first one about the management change of Gucci, as I said, Jean-Marc is immediately operational. I should have started my different comments over the different question, but we have very strong team in place at Gucci, and we, as you know, we made some key changes last year, with in merchandising, in communication. Jean-Marc can rely immediately on very operational and very skilled people at Gucci. Of course, there's always room for improvement. I know, for instance, that in the elevation strategy of the brand, we need to raise our game in terms of quality of the products, for instance. There's also probably more agility to find in our supply chain, to be able to go to have a time to market that is better than we are doing now. Never forget that we scaled this brand in a very short period of time. This has been achieved brilliantly by the teams. Of course, we need to strengthen that and making sure that we can continue to go further. The potential of Gucci is, in my opinion, in the foreseeable future, above EUR 15 billion. Jean-François will, of course, work on the product development side, on the supply chain side also. For the time being, the focus is, as I said, on the forefront, of the brand, which is the new aesthetic, the and the amplification of that new vision in all the touchpoints of the brand, in the stores, in the campaign, in the events. Making sure that we're not waiting another six or eight months for this aesthetic to be established. The amplification strategy that is being put in place just after the show would be absolutely key. All the teams, merchandising, communication, under the leadership of Jean-François and the support of Francesca, is already working actively on that. Before answering your two last questions, I would like first to apologize because I understand that we have still few people queuing to ask questions. I think François is being very generous with his time today. Clearly, as usual, the IR team will be available to make any follow-up. Sorry again, and we try to be as comprehensive as possible in our answers. When it comes to the margins, I can just repeat what I said before, in the sense that, first of all, it's a little bit too soon to say what will be the profile of the margin going forward. Starting with H2 and even more for next year, I think that I want to be clear again on the fact that there is no an obsession on our side or a sort of, you know, dogma to increase by huge bits, the EBIT margin. That's not the philosophy. We are very muted, we have a new organization in place, and we will work, because, you know, that the competition, not only the big competitor, but globally in the market, you have a lot of investments. You will have noticed that we are not afraid to invest in the supply chain, as we did this semester. We are not afraid to invest when needed, to, in real estate, or to gain some locations, not only by buying assets, but also sometimes by negotiating some rent. We are not afraid to also engage with celebrities and ambassadors. We are not afraid to organize big events. If we need to go further, and once again, if we need to hit a bit margin of Gucci going forward, we will do it. Still, with this objective, which is, I think, quite realistic, to reach the EUR 50 billion mark with a profitability that would be closer to the 40% margin. Last point, regarding Valentino, I want to be very clear on the fact that we have started to discuss very recently, and we went quite fast on the discussion. The reason why we are not together, because we wanted to sign a deal before the summer, and it was part of the scheme of the discussions to go very fast. To complete that on the M&A strategy, we, and that's my role at the group level, I keep relationship with many of our colleagues on the luxury market. I see them regularly. We had contact in the past years with Mayhoola, even though they were not selling nothing, but it's also by entertaining those good relationships with potential company that could fit in the portfolio that things happen. We were proactively working on some targets, and this is how it happens. Thank you very much for participating in our call and for your interest in Kering. I hope that Jean-François, Jean-Marc Duplaix, and myself have convinced you that all our action and initiatives contain the seeds of our future success. The recent changes in our organization, also the Creed acquisition, and now our investment in Valentino, all open to an exciting new chapter in our history, and we are very, very enthusiastic about the coming period. I wish you a pleasant evening and a very nice summer. Thank you very much. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.