Welcome to the conference call regarding L'Oréal sales at 31 March 2023. The conference is about to begin. I now hand over to Mrs. Françoise Lauvin. Mrs. Lauvin, please go ahead. Merci, Marie. Good evening to all. Bonsoir à tous. The L'Oréal team is pleased to welcome you to this conference call for the release of our first quarter 2023 sales. Together with me today are CEO Nicolas Hieronimus. Good afternoon. CFO Christophe Babule. Hello, good afternoon. Global Head of Corporate Finance and Financial Communications Laurent Schmitt. Good afternoon. Of course, Eva Quiroga, whom you all know and who joined our team earlier this year. Good afternoon. We hope you read our press release, which was issued a short while ago and which can be found on our website, loreal-finance.com. Let me share with you the highlights of this release before we move to the Q&A session. In the first quarter, the beauty market remained very dynamic in the vast majority of countries, with the exception of China, that continued to be disrupted at the beginning of the year. In that context, L'Oréal is off to a very good start. Sales advanced 14.6% to EUR 10.38 billion. Foreign exchange impact was positive by a limited 0.6%. On the positive side, the U.S. dollar appreciated against the euro, but this was largely offset by the depreciation of the Chinese yuan, the pound sterling, the Canadian dollar, and the Japanese yen. The change in the scope of consolidation had a 1% positive impact, partly linked to the first time consolidation of Skinbetter Science. Like-for-like growth came to a strong 13%. By division on a like-for-like basis, Professional Products grew 7.6%, driven by Kérastase and L'Oréal Professionnel. Consumer Products delivered an exceptional performance, up 14.7%, with our four international brands firing on all cylinders. L'Oréal Luxe grew 6.5%, slightly accelerating over the previous quarters, thanks to the continued success of fragrances of our couture brands and solid growth in skincare. L'Oréal Dermatological Beauty, formerly Active Cosmetics, continued to lead with growth of +30.6%, driven by a brand portfolio that is perfectly aligned with consumers' quest for health globally. With the exception of North Asia, all regions accelerated over last year. Sales in North Asia increased by 1.9%. Chinese consumption was under significant pressure in December and January as new health measures were implemented mid-December. The good news is that consumption has started to recover from February. On the other hand, the Western markets were very dynamic. With growth of +16% in Europe and +16.6% in North America, L'Oréal has further strengthened its leadership in both regions. With growth of +26.7% in SAPMENA–SSA and +22.3% in Latin America, emerging markets continued to reaffirm their role of key growth drivers. Performance was broad-based across all divisions and all countries. With 13% like-for-like growth, 2023 has gotten off to a strong start. Short term, the currency environment is becoming a headwind. Extrapolating end of March currency rates against the euro or EUR 1 at around $1.09 for the remainder of the year would lead to a negative currency impact of around -4% over full-year sales. Remain optimistic about the outlook for the beauty market, which has yet to benefit from China's reopening. The first quarter performance gives us confidence in our ability to continue to outperform the market and to achieve another year of growth in both sales and profits. I thank you for your attention. We are now ready for your questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one one on your telephone keypad. First question from Guillaume Delmas from UBS. Sir, please go ahead. Thank you very much, good evening, all. Two questions for me, please. One is on pricing and the second one on China. Let's start with the contribution from pricing. What was it in your first quarter this year? Basically wondering if you could quantify it and maybe provide some color on where you took some incremental pricing so far this year. I would assume in Europe, given the strong acceleration between Q4 and Q1, also wondering if you've seen some pushback, maybe from retailers or from consumers, on these price increases. My second question is on China. I mean, can you maybe shed some color on your exit rate, so your like-for-like sales growth toward the end of the quarter in China? Also still on China, can I ask about your market share development? Because 2022 was exceptionally strong in terms of share gains. Are you seeing some early normalization of your pace of share gains as a result of? Tough comps and maybe some of your competitors fighting back. Thank you. Okay. Hello, Guillaume. I will take the first question regarding your the pricing. I have to say that we are very happy with the Q1 sales because it is still very well-balanced. We have valorization total at 7.8%, remaining is volume, so a stronger growth in volume as well, 5.2%. In terms of the value, it's mainly through price increase and because we have not only those that we put on the market beginning of this year, but we have of course, the one of last year. I have to say that this polarization is split in all divisions. This is driving quite nicely the growth in the Q1. No, it's not particularly overweighted in Europe. I mean, we took both valorized innovations, because that's our number one way to valorize and price increases, across the board, across divisions and across and across regions. Yes. As far as China is concerned, I think indeed the market is... what happens is exactly what we described in our yearly call, is that because of the December I would say brutal reopening and the consequences on Chinese consumers' health, our sell-out was very negative in December, in the early part of January, which led to a slow invoicing in because we had to destock during the months of January. We saw first of all, both traffic. I was in China, months ago, a bit less than a month ago, three weeks ago, and I was, I have to say, very impressed by the normalization of the situation in China, people in malls, shopping, some with masks, some without, but with a clear desire, both from consumers and from the authorities to boost growth. That is materializing. If we look at our, clearly our months of January in sell-through was flat, and it was like, I think -20 in invoicing because we had this inventory. If we look at Feb, March, and April, we've been consistently at a double-digit evolution on both. It's a good sign for us that we've absorbed our extra inventory, and now we are back to a pretty dynamic growth. If we look at our market share, actually we've gained share in the Q1 overall versus the market. We keep a significant overperformance in consumer offtakes versus the market. Therefore we are continuing to gain share, including in luxury, where we again broke a few new records. Whether we're gonna keep the same pace of overperformance versus competition, it's hard to predict. The good news is that despite a top line number that was not great in Q1 as forecasted, our offtakes were still gaining market share. That leaves us very confident for the rest of the year in China. I must say that what makes me even more confident is that I spent the full week with the teams there and the level of energy, of ambition, the new brands we've launched, because for the first time I could see some of the brands that we launched in China during this period when I couldn't go there, whether it's Valentino, whether it's Prada, Takami, our Japanese skincare brand, the reopening of Carita. All these are bringing a new business and new consumers to L'Oréal. It's pretty exciting. I could also visit Tier 3 city, which is part of our, you know, our growth plan in China. I could see also the power of attraction of our brand. We continue to be very bullish on China. Thank you very much. Thank you. Next question from Bruno Monteyne from Bernstein. Please go ahead. Hi, good evening. I wonder if you can comment on both Hainan and Travel Retail, but in a few different ways. A, how much were they growing year-on-year in Q1? How big are they today? How much more catch-up potential do we have to pre-COVID? Are we already well ahead? Are we still below that? Thank you very much. Okay. I mean, Travel Retail, first of all, if we look at, and I'll go back, of course, to focus on Hainan and Travel Retail Asia, which is your the essence of your question. Overall, Travel Retail, what's important is that we continue to see a strong acceleration of the market in Western Europe and in North America with the bounce back of traffic. That's there the market is very positive and that's great. As far as North Asia is concerned, the market was slightly positive over the quarter in Hainan. Again, it's the same phenomenon as China. It was very low on, in January because, you know, the Chinese consumers or travelers were not traveling to Hainan. They were unfortunately fighting the COVID. It has started bouncing back a bit in February. Again, a strong increase in traffic in March, which was around +20% in Hainan. By the way, we saw also a big acceleration of tourism back into Hong Kong, Macau, and even Thailand. This is positive. The negative effect that we had on travel retail Asia this quarter, which is more or less equivalent in size as Hainan for us is Korea, where the overall Travel Retail market was estimated at around -3 0% because of a change of policy of the operators there vis-à-vis Daigou. They've stopped ordering. I think they are renegotiating some terms with Daigou. We are less affected than the market, our performance was better than that. Still overall, Travel Retail Asia was like China, flattish, with the pluses and minuses. Again, as we see traffic picking up, we are confident for the remainder of the year. I take this opportunity because as you have, I don't know if we're gonna be talking about travel retail again, to remind everybody that last year, we had a very positive, a very strong positive effect on travel retail in Q2 because we had shifted EUR 90 million worth of sales from Q3 to Q2 because of our move to Singapore. This will be a bad guy for Q2 this year and a good guy for Q3 this year. It's just a reminder of that. Overall, we see the same pattern as in China, in people going back out, traveling and wanting to buy products. By the way, in Hainan, we continue to gain share with very beautiful exhibitions of our brands and the new brands I mentioned in particular. Same story, slow start, and potential acceleration. Thank you. Thank you. Next question from Celine Pannuti on JPMorgan. Madam, please go ahead. Hello. Celine. Yes. Bonjour. Good evening to everyone. I have a few questions, if I may. My first question is, you know, your volume was quite good, strong, whatever, in the first quarter. I wanted to know whether there was any positive benefit from, I don't know, reopening of some Travel Retail destination or easy comparative from last year or replenishing. Also, could you comment from a category perspective, where are we now on makeup versus 2019? Are we back to where we should be, or is there still more to come into makeup? Maybe at the same time, maybe if you could comment on the category performance for the quarter, that would be great. My second question is on market growth. Since you said at the beginning of the year, we're expecting a market growth at mid-single digit, depending on what China does. Do I understand well that you're talking about 20% growth in sellout now in China? Is that what we should be looking at? No, no. I didn't say that. I said the double digit. Okay. 20% was the traffic in Hainan over the month of March. It's not exactly the same thing. All right. Okay, fine. Maybe if you could comment on whether you still feel confident with mid-single digit, or is it a bit better than that for the year, given what you've seen? Well, I start with the latter because I think it's one of the most important informations of our results and of the call is the fact that the beauty market, as Françoise said, is very dynamic. It's more dynamic even than expectations because indeed, despite China being still very slow, at least in invoicing, we know that January, February were slow. It's having a market, a global beauty market, which is today in high single digits. If you exclude China, double digits in the other parts of the world, it's really a great news. It's the demonstration of the resilience of the beauty market, of beauty consumptions. That's probably following up on one of the earlier questions which we did not answer completely in terms of volume impact. We see globally that the overall, the value or the valorization of the market is way superior to any type of drops in volume, which we see very little of, except a few countries. Overall, the market is accelerating in the beginning of the year. That's a great, a very positive news. Does it mean that it will remain on the same rhythm for the full year? Frankly, it's very difficult to say. On the positive side, you'll have China accelerating. On the negative side, we'll probably reach the peak of the valorization effect, at the end of Q2. Overall, I think it's fair to say it's already a question you'd asked me in the yearly call when I said 45% for the year. My guess is it will be a bit better than that this year. By how much? We'll see. But I will have to agree to increase my forecast for 2023, which doesn't mean that the 45%, you know, compounded annual growth on the long-term pace, the rest doesn't remain the vision. As far as your other two questions. Yeah, makeup has has already caught up its its 2019 numbers everywhere. The last continent or region that was below that had remained a bit below 2019 was Europe and now it's above. It's true that the makeup category is very dynamic. It's a super dynamic category. We're, and we see, typically, if I take Europe, it's one of the categories that pulls the growth, and we see everywhere. You know, remember we were talking about these roaring twenties, they have been a bit slow, but it's happening now, and really, women are enjoying the pleasure of wearing makeup again. The category is in mid-teens right now. It's very positive. Other categories and fragrance, by the way, follows on the same pattern. We have this category growth, which is very positive. As far as the unit growth that was commented upon by Christophe, it doesn't come from a particular replenishment. It's just that consumption is really holding very well. Our innovations are, you know, are getting fantastic results. We just launched this new Elvive or Elseve Bond Repair shampoo, which is very valorized. It's a 150 index versus the average of Elseve. It's because it's a great formula and a great innovation, it's going through the roof. We have also, whether it's in makeup or skincare, like the vitamin C from Garnier and their new ultimate products. There are many products that are doing great overall. It's not, it's not a replenishment. It's just a dynamic consumption. All right. Thank you very much. Thank you. Next question from Olivier Nicolai from Goldman Sachs. Go ahead. Bonsoir Nicolas, Christophe, Françoise, Laurent, Eva. Got Two questions, please. First of all, L'Oréal Luxe had a very strong performance in North America, but also in Europe in Q1. You mentioned fragrances and as well as makeup in the press release, I was just wondering, what do you think the driver behind this acceleration? How sustainable it is? Is it driven by tourism or is it more like local premium consumer? Second question, if I may. In the Dermatological Beauty division, La Roche-Posay was the main growth driver this time and not CeraVe. That feels like it was helped by sun care. Is this performance sustainable into Q2, or has there been some inventory build? Thank you very much. On L'Oréal Luxe, I mean, the division is accelerating progressively. To be honest, I think we can do and should do better on L'Oréal Luxe. Of course, L'Oréal Luxe is the, of all division, is the most impacted by the Chinese technical slow quarter that we had. We are really doing fantastically on fragrance. First of all, as I said, the market continues to be really very dynamic, mid-teens. We are growing significantly faster than this market. We have Libre YSL fragrance that has entered the top five or top six worldwide, where La Vie est Belle was already there and is Number 1. It's becoming a Number 1 fragrance, by the way, it's, it should be even higher soon. It's really a great fragrance performance, a good, a good acceleration in in skincare and I would say a decent performance on makeup, but not totally where it should be. There was a little bit of buy-in from American retailers, so it should sell through in Q2. Overall, I feel confident that L'Oréal Luxe will accelerate again, mainly driven by the rebound of China, where the division L'Oréal Luxe has over 31% market share. It should benefit very strongly from this rebound. As far as dermatological beauty is concerned, it continues to be, you're right to say that La Roche-Posay is doing fantastic. Part of it is sun care because it the shipping of the season. We had a good sun care season last year, so there's not a huge comparative difference. It's really acceleration of the brand in the USA. The brand continues to do fantastically. I must say I'm really impressed by the acceleration of the brand in the U.S. The great thing is that it shows the success of our strategy of combining the forces between CeraVe and La Roche-Posay to visit derms in North America. tags. <edited_transcript> And both brands now are really doing great. As, you know, because as far as CeraVe is concerned, even though it's in absolute value, it drove a little bit less of the growth than La Roche-Posay, it's still I think it's +44%. So it's still doing great. We had the fantastic news that it just became the number one skincare brand in the USA, all channels included, ahead of the long leader, longtime leader, Neutrogena. So it's doing great too. The thing with Dermatological Beauty is the fact that as we commented upon during the analyst call, there is this incredible appetite of consumers for safe, efficacious products that are prescribed by dermatologists. It's working for all brands because Vichy is doing good, SkinCeuticals is doing good. Skinbetter Science, which we just acquired, is also doing phenomenal. You know, I'm very happy about that. Thank you very much. Thank you. Just a reminder, ladies and gentlemen, if you wish to ask a question, please press star one one on your telephone keypads. Next question from Robert Ottenstein from Evercore. Sir, please go ahead. Great, thank you very much, and congratulations on a terrific start to the year. Two questions. One kind of bigger picture and then one more fine-tuned. You've thrown out a lot of impressive numbers. You know, I think overall, you were saying that the market so far this year is up high single digits, double digit without China. Could you please give us a breakout by category so we have a sense by category, either, you know, globally or without China, whatever, you know, is most helpful, so we have a sense of what the growth is by area? My second question is more specific to Hainan. When we talk to travel retail operators, we sense that there may be some pricing issues between Hainan and the mainland. Some sort of arbitrage, some sense that perhaps prices need to go higher in Hainan, to prevent cannibalization, if you will, in other areas. How do you manage kind of the price gaps, and do you believe that at this point you need to raise prices in Hainan? Thank you very much. I will take both, but I'll ask for Christophe's help, potentially on the valorization of our brands and our products in Hainan. I will start with the categories. I will give you broad, because, you know, it's super hard to assess the market after three months. Basically, you have two categories that are in mid-teens, which are makeup and fragrance. You have two categories that are in mid to high single digits, which are hair and skincare. What I would say is that the two, what I would call social, the most social categories, which are fragrance and makeup, are really continuing to bounce back and accelerate. Hair and skin are also dynamic, but to a lesser extent. As far as the Hainan situation is concerned, we get a lot of that question, especially after comments that are made here and there on the situation with daigou's. We have for a while now, we set up a very specific organization between our Chinese domestic team and our Travel Retail team to make sure that the value of our brands, our prices are protected both in terms of image, and usually Hainan is a fantastic showcase for our brand, but also in terms of economic value. Because in the end, it's, it's value that matters, and which means that the growth in travel retail over the past years has been exclusively a value growth. And Christophe will give you the numbers in a minute. And so we've taken prices up, we've sold more expensive item, and there is a very tight, and I must say I'm very proud of the way the teams work together, tight cooperation between our travel retail teams and our Chinese team, because our priority is of course the equity of our brands and the domestic market. Probably one of the reasons why we constantly gain share on the domestic market is that we've been able, of course, to protect the brand equity and not only to protect it, to reinforce its ex-exposition both in Chinese stores and Hainan stores, but also to avoid creating disruption with discounts or bad pricing, happening in the travel retail world. Christophe, you wanna elaborate maybe a little bit on travel retail pricing? Yes, absolutely. That's a very good question because it's true that it's a very sensitive matter, so it's highly controlled at L'Oréal. We have a dedicated team that is based in Shanghai to monitor constantly on a daily basis, the prices between mainland markets and travel retail, and specifically, not only Hainan but also Hong Kong. It's true that to make sure that the value is kept in mainland China, when I look back in the last three years, we have been valorizing the product by a bit more than 30%. This gives you the magnitude, you know, the price increase that has been done and the effort that has been done just to make sure that the prices in Hainan or overall in travel retailer are under control. Is that okay for you? No, that's very helpful. Again, congratulations. Thank you. O n getting so many things right at the same time. Not easy. Thank you. Thank you. We have a new question from Guillaume Delmas from UBS. Please go ahead. Thank you for allowing me a follow-up. Actually Two follow-ups. The first one, probably for Christophe, is gonna be on the shape of your P&L this year. Because we should see a marked recovery in your gross margin with some commodity cost recovery effects, probably becoming a tailwind after being a headwind last year. You said your top line is stronger than initially anticipated, so that should mean some nice operational leverage as well. If we were to think about your 2023 margin bridge, is 2023 gonna be a year of strong reinvestments, particularly in A&P, or would you be tempted to let some of that benefit flow through to the operating profit line? My second question is on your recently announced Aesop acquisition. I mean, maybe if you could flesh out the opportunities you see for Aesop, particularly in China, where the brand was just launched in Q4 last year. Mm-hmm. Just looking at the disclosures provided by Natura, it seems Aesop would be initially, at least, accretive to your gross margin, but quite dilutive to your operating margin. Question here is, do you think you can over time, bring Aesop's operating margin in line with L'Oréal's, or structurally, is it a business with lower operating margin? Thank you. Okay. I will take the first question. Regarding the shape of the P&L, you know very well what will be the answer. I mean, the strategy is still always the same. Priority will be, of course, to sustain the growth. You see that the market is very dynamic, so it's the good time to keep investing. We've not been into the details of all the innovations that we have ready for this year, but we still have many of them to put in the market. We still have a lot to do, you know, to keep CeraVe growing in many geographies and keep pushing, you know, the development of Prada and Valentino, et cetera. Yes, we will be investing, and, you know that, our main objective is to over-perform the market, in terms of sales, and that's really what we will be focusing on the next quarters. To answer the question on Aesop, first of all, we have to say we are very happy and excited at the prospect because it's not concluded yet. The agreement is there to welcome this very beautiful brand into the L'Oréal portfolio and particularly into the L'Oréal Luxe portfolio, because it's really a luxury brand, as we said in the press release. It's a luxury brand that really thrives on many of the current trends and this quest for well-being, for lifestyle brands that are extremely high quality with high touch service and of course naturality. The it's and it's a brand that's doing great. I mean, you saw from Natura's publication that it continues to have a very high growth. As you mentioned, it's done so far. It's been done. It's built very beautifully, and it's been built without China. There are two stores that have opened in China very recently, and of course, when we were in China a couple of weeks ago, we all went to visit them, and they were packed. Packed with the Chinese consumers that seem to be very excited by this brand, which is indeed very much in sync with their own expectations. China is a great potential, Travel Retail, and the two are as we know, very correlated, so Travel Retail is a great opportunity, as is also e-commerce. They have, you know, a pretty good e-commerce activity, but they have, there's still a lot of opportunity. The weight of e-commerce is inferior to the average of L'Oréal. We think we can bring our own digital expertise and e-commerce expertise to Aesop. It is something that we're very excited about and it will be a great addition for L'Oréal Luxe. Christophe, you want to answer on the P&L shape of Aesop and our prospects about making it. Yes, of course. I n sync with the L'Oréal level of profits? What is important is that this is a brand that is doing not only strong business in boutiques, but also doing already a nice business in e-commerce. It's Aesop's own model, and with a huge perspective of growth in Asia, mainly in China, in the travel retail as well. Obviously, this is a brand that will probably have a shape in terms of P&L on the long term, like a brand like Kiehl's, for example. This is a brand that has a very strong growth margin, as you noticed. Now, it's very early because we don't have yet the full visibility on the shape of the P&L. We expect to have the closing second part of this year, probably more at the beginning of the second part of this year. Well, we'll see, but we believe that based on the recent achievements, we could have a very small dilutive impact on the EBIT margin, and it should be neutral on the earning per share. To your question, I think, I mean, clearly our plan is to progressively improve the profitability of Aesop over the course of time, as it's been done with Kiehl's. Bearing in mind that the shape of a brand that has a higher part of retail is slightly different in terms of P&L as the rest of L'Oréal, but we have good prospects of improvements on many lines. Thank you. Thank you. We have a new question from Celine Pannuti from JPMorgan. Madam, please go ahead. Thank you for the follow-up. Maybe two questions. The first one is on Professional, which, you know, I think was growing high single-digit, and it seems you did very well in emerging markets. Could you comment on what trends you've seen in Professional, in developed markets? Usually, you know, one of the category where we see a bit more potential discretionary spending. My second question, which maybe is a bit along the same line, you said that there are some current uncertainties in your outlook commentary. What are, in your view, those uncertainties? Are you surprised by the strength of U.S., Europe? Are we expecting that to normalize through the year? Thank you. I'll start with Professional. You know, Professional is doing great. The growth is broadly in line with that of last quarter of 2022. It was +8.1%, we're +7.6% on this quarter with a strong valorization. Our brands are doing good. The billionaire brands are doing good. By the way, Kérastase and L'Oréal Professionnel are growing very strongly, growing double-digit in emerging markets, in North Asia. It's growing strongly in e-commerce and selective channels everywhere. In terms of categories, we see, of course, because the division has truly become omni-channel, premium or Professional haircare is driving the growth. Both categories, hair color and haircare are growing, but this valorized haircare trend, which I described in the yearly results presentation is confirming itself. People are investing in their hair. As far as the visit to salons, it's very hard to assess, because if I take the U.S., the U.S. is a good example, because we see slightly lower traffic in salons. On the other hand, we see a rise in independent stylists and home stylists. Overall, it's hard to assess whether people have reduced a bit their visits to salon or they have just shifted their habits from salons to home hairdressing or to independent stylists. Overall, we continue to see a good traction for, from, on the business. We have a little bit the same in Europe, where you have in some of the Western country, Europe, you have a shortage in stylists, and that's part of the jobs where some of the people have disappeared, have vanished post-COVID. Overall, we see, we don't see a major, you know, change in consumer habits or vis-à-vis salons. Slight reduction of traffic in the US, but the rise of independent stylists. Your second question was? Sorry, I forgot that one. About uncertainties and the strength in the U.S. and Europe. Well, it's true that I mean, there's two ways to look at this, you know? If you read the news, if you listen to the television every day, frankly, you, there are a lot of uncertainties, you know? There's not a day when somebody is not predicting something bad to happen. What is true, and that's what we said last time, is that even though there are still a lot of clouds in the sky, about, you know, inflation has not disappeared, the risk of recession has not totally disappeared. We see, you know, blue patches because overall the news are a bit better, and that's probably why, by the way, the markets are resisting a bit better. We see consumer confidence in the U.S. going up, which is very important. It's a good sign, and that's promising for the rest of the year. We see also consumer confidence that was low in China starting to pick up, and Europe is resisting very well. You know, then, I don't have a crystal ball, but it's clear that there are many uncertainties, but so far, so good. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad. We have a new question from Robert Ottenstein. That will be the last question. Fragrances has clearly been, you know, one of the great success stories over the last couple of years with, you know, a new, if you will, sort of attitude to fragrances. Mm-hmm. In the U.S. consumer and the Chinese consumer. Two-part question. One, is that continuing? Do you see that as a, you know, durable global trend? Related to that, you know, in the past, sometimes, you know, let's say skincare would be strong, makeup would be weak and vice versa. You know, is the overall pocketbook permanently increased with an addition of fragrances, or do you see, you know, the potential that fragrances is gonna bite into, you know, one of the other categories at some point? Thank you. Well, what is clear is that these categories are not substitutions for one another. In the end, it's any category is going through penetration and frequency of use. What is happening with the fragrance is both are growing. Penetration is growing in new countries like China, where consumers are discovering fragrance and being interested in the storytelling about fragrances. By the way, they're buying different fragrances than in the West, with more purchasing to premium collection fragrances that are higher in price. Whereas in the Western world, there's a bit more purchases of blockbusters. Penetration is increasing in some countries, including also emerging markets. There's also the frequency of use, and that's where I must say that the post-COVID habits seems to have, as you said, generated a new attitude towards fragrance. It's not just about smelling good, it's also about feeling good. Consumers are therefore making this small part of their daily routine. The percentage of people that use fragrance daily has increased. It's not, you know, just the Saturday night going out thing. That's very true in America, by the way. Whether this will last, you know, again, I don't have a crystal ball, but I do not see any reason for this to stop. I do not see, more importantly, any correlation between the purchase of one category and or another. you know, We see also it in skincare, by the way. I think it's very interesting. Younger consumers, that were, you know, makeup buyers and not so much skincare buyers, except when they had acne, have also started investing into making their, you know, keeping their skin young, protecting themselves from the UV rays. There's a big rise of UV protection all across the world. Overall, it's just this. I think we are lucky to be on this market, which where people are spending money to take care of themselves, not just, you know, to feel good, but also to protect their skin, their hair. Therefore I'm. That's what makes me confident that the beauty market will continue to grow at this very regular pace. This year it's helped again a little bit more than usual by valorization and by inflation. That's why we're a bit higher than usual. I see no reason to think or that fragrance are going to slow down because it's just the beginning for China. As we know, there are millions of consumers to conquer there. Thank you. Very helpful. Thank you very much. Good evening or good afternoon to, everyone. I think it was the last question. Françoise, any last word? Thank you very much. We will hold our AGM on Friday. We will talk to you again on July. Thank you. Bye. Thank you. Bye-bye. Thank you, ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.