Welcome to the Conference Call regarding L'Oréal Sales at the 18th of April 2024. The conference is about to begin. I now hand over to Eva Quiroga. Ms. Quiroga, please go ahead. Thank you very much. Good evening, and welcome to this call for L'Oréal's First Quarter 2024 Sales. With me today are our CEO, Nicolas Hieronimus. Good afternoon. Our CFO, Christophe Babule. Hello, good afternoon. Our Head of Corporate Finance and Financial Communications, Laurent Schmitt. Good afternoon. Since you've already seen our press release, I will hand the mic to Nicolas, who will briefly share his thoughts on this first quarter before we move on to the Q&A. Thank you, Eva. A gain, good evening or good afternoon to all. Commenting this first quarter, I'd like to say that I really believe this first quarter numbers perfectly illustrate the power of our unique model. As you know, we're a pure player in beauty, a category that has once again proven its relentless growth capacity. W e are everywhere in beauty, in luxury beauty, in mass beauty, in professional or dermatological beauty, in all channels, all price points, and all geographies. This unique model that we call multipolar allows us to offset temporary points of softness, with growth opportunities to keep our rhythm outperforming the market. T his first quarter of 2024 was the perfect proof. North Asia, as expected, while progressively getting less bad, still had negative growth in the quarter. In Mainland China, market growth was subdued at less than +1%. We grew by more than 6%, and continued to strongly outperform the market across all divisions. Travel retail was impacted by tough year-on-year comparisons, and sell-out trends in Hainan as we have yet to anniversary the Daigou clampdown there, b ut all other regions grew in double digits. Europe was once again unbelievably strong at +12.6%. The market continued to be dynamic, and we gained further share. Each of our emerging markets grew by more than +16%. The strong momentum in Mexico and Brazil, now number 10 and 11 markets, was particularly impressive. Growth in North America remained strong at +12.3%. T hat allowed us to deliver an excellent first quarter. Like-for-like growth stood at +9.4% or adjusted for the EUR 130 million phasing impact in North America +8.1%. That is in line with our multi-year average run rate, and well ahead of the market at +6%, implying further share gains. By division, my two personal highlights were dermatological beauty which delivered its 15th consecutive quarter of double-digit growth, and consumer products which grew +11% as each of the four core brands and each of the categories advanced in double digits. I would also like to highlight the strong composition of our growth. One-third came from volume, 2/3 from value, price and mix both contributed to the value components. A s you can see, growth in the first quarter was not just strong, but also high quality since broad-based across all metrics. Before we start taking your questions, I would like to say a few words about the remainder of the year. We expect the global beauty market to remain dynamic, and continue to forecast a +5% growth approximately for the full year, with strong support from a dynamic first quarter. A s you know, our ambition is to outperform our market and gain share again. You heard me say that price continued to play an important role in the first quarter. I would expect that to gradually diminish as inflation is easing. On the other hand, we expect a rebound in travel retail sales from the end of the first half, when we will have lapped the clampdown of Daigous in Hainan. You know that our operating margin will be second-half weighted, as travel retail Asia will bounce back after May and ease-up will be in the base from September. W ith that, we are ready to take your questions. Ladies and gentlemen, if you wish to ask a question, please press star, one on your telephone keypad. Please use your handset before asking your question, and set your microphone on mute once you ask your questions. The first question is from Guillaume Delmas with UBS. Please go ahead. Thank you very much. Good evening. F irst, housekeeping and then two questions from me please. Housekeeping, just wondering if you could provide your like-for-like sales growth by product category for Q1. T hen in terms of the two questions, so firstly on North America, I mean some retailers, competitors, even the scanner data point towards a slowdown in market growth in the region. E ven after adjusting for the phasing benefits you had in Q1, it's difficult to see in your numbers a significant slowdown. M y question here is, have you observed any changes in the beauty industry growth in the quarter or changes in consumer behavior, and would you expect any slowdown over the coming quarters for North America? T hen my second question on Asia travel retail, going back to this, I think the channel was around a 300 basis points drag to your organic sales growth in the fourth quarter of last year. W ondering if you could quantify that impact for Q1. A lso, as you are annualizing the tough comparator toward the end of, I think the month of May, would it be fair to assume that this channel should be almost neutral or you know, very limitedly dilutive in your second quarter? Thank you. Okay, so maybe you want to take the first one, the housekeeping question. I don't think we have the exact like-for-like growth per category, excluding the North America anticipation, but we can explain which divisions and therefore which categories are most impacted. H ello, Guillaume. I think the question was, the growth by key categories. I will start with skin care. The growth is at slightly over 8%. Makeup is still very dynamic, at more than 11%. Hair is still extremely dynamic at more than 13%, and also fragrances at nearly 12%. Those are the growth by categories. N ow your question on North America, the North American market globally remains dynamic, even though it has slowed down over the previous quarters, but probably not to the extent that you may have feared hearing some of the publications because in reality, first of all there are two readings to the U.S. market. If you look at the Circana and the NielsenIQ, they only cover part of the market, so you have a very strong dynamism of the e-commerce market. F or us, for example, being on Amazon is a great booster. A lso, the other fact of the American market is that the one category that has really slowed down the most is makeup, which of course is more important for certain retailers than others. On the other hand, you see that fragrance is doing great. That hair care continues to be strong on the premium part of the market. Y es, the North American market is slower than in 2023, but we continue to see lots of opportunities in this part of the world, where we have good performance, but we can do better on a certain number of lines or divisions. C learly, there is a difference between North America and Europe, where the market has absolutely not slowed down, which is frankly very positive news and we are continuing to gain share. O verall, we remain ambitious for the U.S. As far as travel retail is concerned, you wanted to jump in, Christophe? Yes, because you were mentioning the drag in Q4 at around 300 basis points. Q1's a bit less, but it's still of course quite impactful at roughly 230 basis points Q1. Does that answer your questions? Yes, thank you very much. You're welcome. The next question is from Celine Pannuti with JP Morgan. Please go ahead. Thank you. Good evening, everyone. F irst question is Europe. You said spectacular consumer products. Y ou know, I think Europe was 12.6. I hear you, the market hasn't weakened. N evertheless, I'm just wondering, I mean, how can you explain this spectacular growth? Is it pricing driven, and has there been any phasing of orders? I think in Q4, there was a bit of weakness in that market, and now it seems that Q1 is super strong. I f you could explain a bit what's going on in Europe, and it seems that it's consumer product driven, but correct me if that's not the case. T hen maybe coming back into the U.S., s o excluding this one-off impact from IT transition, I calculated that your growth rate in North America was 7.5%. You said it was mainly driven by pricing. I wonder, you know, was volume excluding this impact still positive in the U.S.? Y ou say that the market is slowing. What's the market growth in the U.S., and can you tell us by channel? Luxe, Professional, Mass, what's the growth? Thank you. Okay, so first on Europe, it's true that the market remains globally very dynamic. We estimate the market to be around +9% in Europe, s o it's a very dynamic growth. I ndeed, we've beaten the market, a nd there is no real either trade loading or anything whether in our performance or even in the market dynamism. The only country which was a bit inflated in sell-out in January was France, because there was the famous Loi Descrozaille or a few retailers actually tried to make the most of the last the couple of days, or weeks they had to use this to be able to promote. O verall this is which is a bit of a anecdotal, b ut there is strong consumer demand in Europe and it's not just a PPD play. We are growing, you know, double digit of course in LDB very strongly. Dermatological beauty is in Europe growing as good as it does in other markets. It's double- digit in CPD. And it's almost double-d igit in Luxe, mostly driven by fragrances. PPD is in high single digits, s o we are gaining share in Europe on a market that is dynamic. I would say maybe something about Europe. It's you know as you know beauty is an offer-driven market. Europe is the part of the world where we have the biggest share, a nd I have to say that we are our teams are very determined to make the most of our innovations. We have had at the end of last year and even at the beginning of this year very strong innovations in Europe with, whether it's on L'Oréal Paris, on Garnier the new mascara from L'Oréal Paris Panorama the Glycolic Gloss from L'Oréal Paris again. Our fragrances are doing great. As I said LDB's doing good. O verall, good innovations and a very strong you know quality of the work of our teams in Europe. W hat is true you mentioned it is that there is a strong price effect also in Europe, because we took some of our price increases on in from Q2 last year. P robably the pricing effect in Europe will ease a little bit on the second half of this year. O verall, we have a very ambitious European teams that really want to outperform the market, and to continue to do so. On the U.S. market the overall growth of the U.S. market in the panels is mid-single digits. W e see if I take luxury for example, our assessment is that the market is around +8 if you take all the channels, which is more or less where we are in sellout with our luxury brands, s o more or less on par on the market. T he part that has slowed down the most is the makeup in mass markets where there's been a significant drop of the market. As I said, fragrances are doing good. Hair is growing in mid-single digits. Dermatology continues to grow. T hen of course it's about winning innovations, winning brands. TT hat's what we have in the U.S. market. I have to say that of course we continue to have fantastic performance with LDB, with both La Roche-Posay, CeraVe, and also Skin Better Science, which has great performance in North America. W e are again, we have, it has slowed down a bit, but we are confident that with our innovations we can continue to drive growth. If I may add, also very important, we've been building this growth with one-third the volume and two-thirds value, s o still gaining consumer. As well in the U.S.? Because you also have the group. Yes. Yeah, okay. C an I just ask about the pricing? You mentioned that pricing was going too easy in Europe. Is what's the pricing pattern for U.S.? Well, we have still a nice valorization in the U.S. As you know, like in Europe, we see the inflation going down actually faster in Europe than in the U.S. W e are still confident that with the innovations that we have in the pipe, we'll be able to keep a strong value in the coming quarters. J ust to finish on your assumption on the impact of our EUR 130 million anticipation, it's mostly in Canada. Y our global assumption is quite right, Céline. [audio distortion]. Thanks. All right. The next question is from Ian Simpson with Barclays. Please go ahead. Good afternoon, everyone. Couple of questions from me, if I may. Firstly, are you still guiding for growth to be second half weighted this year? You reiterated the margin being second half weighted, but you didn't comment on growth being second half weighted. P erhaps to help us understand that as well, that EUR 130 million of benefit from sales largely in Canada on the IT issue, does that reverse in the second quarter? Then, on a different note, you talked about Aesop going into organic in September when you lap its acquisition. Could you talk a little bit about what you've done with that brand post-acquisition? I know that you were very sort of upbeat about the opportunity to roll that out online and to put it into China bricks and mortar. Perhaps an update as to where you've got to with that, and where you hope Aesop can be in sort of six months' time or by year-end. Thank you very much On the first point, no, the growth is not going to be back-weighted. We try to be as regular as possible on our rhythm. T he margin is back-weighted for the reasons I mentioned, a nd we are globally confident on the year. What is true is that on the second quarter we expect the second quarter to be less, you know, dynamic than the first one. First of all, because as you said, the EUR 130 million will revert on Q2. I t's really a transfer from one quarter to another. It's basically because we are changing the IT systems of some of our warehouses in Canada and North America. W e make sure that our customers have the inventory they need when we do this work. T he second quarter will still be impacted by the comparatives of travel retail from Hainan, which would, you know, still be disappearing from the first of June. Have a little bit less of price and have this EUR 130 million transfer. I f you look at the overall year, as I said, we remain confident both on the market around +5% and our capacity to regularly outpace it. N o back-weighted, but regularity is what we intend to deliver. As far as Aesop is concerned, Aesop is one of our, you know, best-growing brands in luxury. High single-digit. R ight now frankly, we're still in the discovery part, if I may. We've integrated the teams. We've onboarded everybody, a nd we begin to look at the plans of rollouts. W e've made no major, you know, openings whether online or in stores. The plans have been written by the existing team of Aesop, a nd of course we are respecting this successful team. A s we move on, and as we enter the year we'll probably have more input and they will benefit from the local capacity of our teams be it in North Asia but also in North America. They are now part of our meetings of our country visits, s o they are becoming, you know, beneficiaries starting to benefit from the L'Oréal know-how. A t the same time as I said it's a very successful brand, s o we don't want to fix what's not broken a nd we continue to accompany their existing strategy. Thank you. The next question is from Charles-Louis Scotti with Kepler. Please go ahead. Hello, good evening. Thank you for taking my questions. The first one on the Luxe division, it seems that the growth is coming mostly from fragrances and makeup while skincare seems to be under pressure. Are those headwinds on skincare only related to the North Asian market and weakness in the travel retail? How is the skincare business performing in the rest of the world? My second question on Dermatological Beauty, I'm again quite impressed by the performance in Q1. I know that the distribution channel and usages are a little bit different than Luxe and consumer. H ow do you make sure that there is absolutely no cannibalization between your dermo brands, and other skincare brands in your portfolio? My last question, if I may: there was press reports recently suggesting that you could be taking a minority stake in Amouage. I won't ask you to comment on that obviously. I s it fair to assume that ultra premium fragrance is a top priority in terms of M&A for the group after your investment in To Summer and Documents in China? Thank you. Okay, so a few questions. First of all, on categories. The first thing I'd like to say before answering your question on skincare is the fact that I have first of all, I'm very happy to continue to be gaining share on the on what is the most dynamic beauty category right now, fragrance. W e are once again beating that market with double-digit growth, a nd that's a high satisfaction. Y ou know, many of our recent launches are really doing great, whether it's Born in Roma from Valentino, Prada Paradoxe, MYSLF from YSL. T here's a real strong momentum in fragrances, a nd I'll jump to the third question to include it in the fragrance comments. Of course, I'm not going to comment on the rumors around Amouage. W hat is true is that the premium part of the fragrance market is the most dynamic one right now. It's going significantly faster than the average of the market, s o it's clearly an area of focus not just of M&A but including in our own brands we have a brand like Maison Margiela which is flying. We've just repositioned Atelier Cologne for China making it more premium, a nd within the couture brands whether it's YSL Armani Privé we are really pushing this part. W e are launching we presented it recently a new premium collection on Valentino, s o clearly premium fragrance is a nice cherry on the cake of fragrance which is already delivering great performance. The other good news, even though I'm still not satisfied, but I guess it's going in the right direction, is that makeup is accelerating in luxury. It's doing, it's growing double digits. W e have had a much better roster of innovation. A brand like YSL with this new Loves hine lipstick is achieving great results in Europe in the U.S., and of course in Asia which was more display actually YSL has become the number one makeup brand in China all channels included. W e're not there yet because we're still lagging the U.S. market in total makeup for L'Oréal Luxe, b ut we are getting closer and closer and we see some real progress made by our brands. A s far as skincare is concerned we have very both on some parts very good news. You know, as prestige super premium skincare like Helena Rubinstein is overall doing good. W hat impacts us most is the fact that skincare is the category that's most overweighted in China and in travel retail. A big part of the impact we're having or the challenge we can face on skincare is related to both the destocking, and the lack of rebound in China and in travel retail. A gain, it's an innovation-driven market. We have a few things in the pipes. S ome brands that I didn't mention, Takami, which are doing good too. T he couture brands still small in skincare but also having a good start, s o that's the answer on luxury. A s far as LDB and cannibalization, you know, we don't ensure that there is no cannibalization. The what we do is to make sure that all the brands of the group learn from the successes of dermatological beauty, and also from the formulas that are developed by dermatological beauty. As you know, the way we develop our business at L'Oréal is having the selective divisions launch first the major discoveries, and breakthroughs of our labs often at a slightly higher price. P rogressively over months or years we trickle them down to other divisions. F or example, LDB just launched on La Roche-Posay a very powerful molecule called Melasyl on a product called Mela B3, a nd it's got used like 120 clinical tests. It's probably the most efficient as far as I know molecule to fight age spots. It's launched first in LDB. I guess it will take some market share from everybody, b ut then after some time it will, you will find it in L'Oréal Paris or Garnier. T hat's also how we bring this beauty for all the best of beauty to all, because we innovate thanks to our selective brands and then give it to other parts of the catalog. LDB's flying. It probably takes a few consumers from some of our mass brands or luxury brands, b ut it's a good challenge for them to up their game and to come up with interesting ideas which is what they do. I mean, I see the launches of that are happening that are coming on Kiehl's, for example, in Q2 and Q3. T hat's a good reaction to what's happening on the market. Thank you. Very clear. You're welcome. The next question is from Olivier Nicolai with Goldman Sachs. Please go ahead. Hi. G ood morning, Nicolas. Christophe, Laurent, Eva. Just two questions on my side. You highlighted a very strong growth in fragrances, even quoting once again. T his category has been already on a very strong recovery in the last three years. Now what are the underlying driver behind this ongoing strong demand aside from the premiumization aspect that you mentioned? W ould you expect the category to go back to its pre-pandemic growth rate or are we in a new paradigm for fragrances? T hen secondly just on going back to this new IT system that you mentioned I think mostly for the U.S. what does it bring, and should could we expect kind of an improvement in terms of working capital as a result of this? Thank you. Okay, so on the fragrance growth rate, it's a question I often get. I t's of course very hard to answer in the long run. Y es, we've seen a real change of paradigm as it relates to fragrance after COVID. I don't know if it's because of COVID. I don't know if it's because one of the symptoms of COVID was that you couldn't smell anything anymore. P eople have rediscovered the pleasure and the importance of fragrancing themselves. B y the way, also fragrancing their homes, which is a category that is also growing. I t's part of of course, expressing your individuality, b ut it's also part of feeling good a nd we see it all over the world. Well, we see it with the increase of number of people using fragrance every day, which I think is a very strong element because I remember, you know, back in days in the U.S. in the USA, it was more like kind of weekend stuff and you wouldn't wear it in the office. T oday people wear fragrance every day. Younger generations not only wear fragrance every day, but also they wear different fragrances not have just one. They change fragrance according to the occasion, s o it multiplies the opportunities to buy. T hey also want to express that differences, which is why you see the rise of premium fragrances because this is the guarantee of a fragrance that is not worn by many. You have another factor, which is, I'm still in the U.S. around demographics. You see North America which is much more multiracial. Actually the majority of Gen Zs in America today are non-white, a nd we know that Latino consumers Black consumers Middle East consumers wear also more fragrance. A ll this is going in the right direction, a nd then finally we have the cherry on the cake is that the Chinese markets even though fragrance remains a small part of the beauty market. T he Chinese consumers they like fragrance and they buy fragrance. T hey buy off they buy actually premium fragrances, s o I think it's going to continue to be a dynamic category. I will not commit on the growth rates but it's a category we continue to invest in, and to you know strengthen our leadership in. T hen the second question was on the IT systems and the impact of ERP on capital return, s o, Christophe. Y es, we are upgrading, you know, our IT systems. Very concretely, we are moving into one SAP platform. We used to run on more than 20 of them, s o of course through that we are looking for better efficiencies in the future. It's a heavy project. We started like 4 years ago. Our first country, the pilot country was Spain. T his country is already running on the new system, a nd this year we are moving into the rollout with countries like Canada is coming in in April then Hong Kong, Taiwan, France, et c. T his will keep us busy for a few years. Y es, we are looking for further efficiencies in the future. T hat's part, you know, on the continuous investment that we do whether on organizations, or on tools to keep our SG&A in the right direction. Well, I must say maybe on that because I think it's important to mention the fact that L'Oréal, which was always praised for being strategically centralized and operationally decentralized, has had in over the years in terms of systems something that was very decentralized and very fragmented. We are really transforming this, which at a time where data and the way you use data to improve your efficiency in at all levels from HR recruitment supply chain of course media et c, to have you know one structure of data. T herefore, systems that are homogeneous around the world is a I think a very important asset that we are building now. You know, some companies have done it have done it sooner, but we are doing it now. I think it's going to increase both our agility and our capacity to leverage economies of scale. Thank you very much. The next question is from Bruno Monteyne with Bernstein. Please go ahead. Hi, good evening. My first question is about the growth phasing. I think Nicolas you said sort of growth is pretty equally phased through the year. I presume you're talking about sellout there, because surely you had the 300 basis points drag of destocking in quarter four, something similar in quarter one. Surely you would have the extra boost of the reversal of that destocking in the second half of the year, on top of your normal sellout. My second question is emerging market ex-China. Now it's globally still growing very well, but sequentially there's quite a big slowdown of about 6% quarter-on-quarter, more than anything else. Is that pricing disappearing? Is that volume? What is the biggest shift quarter-on-quarter in those two regions there, please? Well, again on the invoicing, when I say we're overall quite trying to be both predictable and regular, I'm not talking sellouts. I'm also talking sell-in because, yes, you have positive effects of the travel retail in the second half. O n the other hand, as we said, we had most of our pricing valorization or extra value that was in the first half. We also have SAP that's entering the comparables. O verall, it's with all the precautions, because frankly, there's so much uncertainty in this world and in this business. A s you've seen, we always manage to adapt, fall back on our feet, and deliver on expectations. W e've had a very good first quarter which was a bit better than, frankly, expected. Some of it will be offset in the second quarter. We'll try, after publication of the first half, to guide you as much as we can on the remainder of the year. O verall, the underlying rhythm is what we focus on. O n emerging markets, we're I think first of all, very happy that, you know, 16% double-digit growth and 16% growth for both regions is very dynamic, very positive. I n both cases, we are growing over 1.4x or 1.5x the market. Then it's a bit of a tale of two cities. If I take Latin America, in reality, if you exclude Argentina, we are still over 20% growth. T here's a very specific Argentinian case, which of course we manage in hyperinflation and everything. I t's aside from that you take Mexico, Brazil C-Andean, which is our Colombia Ecuador and Peru cluster, it's really maintaining its rhythm. T hat's for Latin America. A s far as SAPMENA Sub-Saharan Africa is concerned there's a bit of a market slowdown. We have to acknowledge that this region has been a bit I would say challenged overall by the geopolitical situation, s o there's been months that have been a bit more challenging at the global market level. O verall we remain we continue to gain share, and we continue to see this region and particularly countries like India Indonesia, and the Middle East as strong growth contributors for the years and the months to come. T he market indeed in SAPMENA has slowed down a little bit, and it's probably linked to the events in the region. Thank you. You're welcome. The next question is from Rogério Fujimori with Stifel. Please go ahead. Hi. G ood evening, everyone. I have just a few follow-up questions on China. I think you flagged 6% growth for L'Oréal versus less than 1% for the market. Could you talk a little bit about the dynamics for mass versus prestige? D ynamics between brick and mortar, and online sell-in versus sellout. Was there any change in China dynamics for market share of Western brands versus local brands versus Japanese Korean brands, relative to what you flagged in our last meeting? Thank you. Well, first of all, just to take the last part of the question, it's very hard to, you know, to renew the comments on the weight of different brands of Chinese, Korean, Japanese, or Western brands from one quarter to another. T he big picture, as I said the last time we met, is that's really the two winning blocks, if I may use that term, where Chinese brands and Western brands that were around, if I remember well, 47 for Chinese and 44 for Western brands. Western brands being mainly luxury and Chinese brands being more on the mass side. I t's true that Japanese brands and Korean brands have been struggling in China, and haven't seen anything, you know, changing that paradigm over the last couple of months. What has changed in China versus in the beginning of the year, which is a bit by the way the opposite of the U.S. market, is that we've seen more of an acceleration of mass markets and a slowdown of luxury in the first quarter in China at the global market level. I f the market is flattish +1% we said, the luxury market is negative in mid-single digits, and I'm talking mainland China, while the mass is positive in mid-single digits too. T hat's linked a lot to the fact that a lot of the growth right now of the Chinese markets is driven by e-commerce and by Douyin in particular. Douyin, the Chinese company that owns TikTok has started with mass markets, s o it's more a mass play. It has started as a mass play, but now most if not all the luxury brands have joined it a nd so we are luxury is catching up. A s far as we are concerned we are of course with most of our brands on Douyin, a nd we've been doubling our business in Douyin in the first quarter. I t's promising for the future. I t's a new channel and which grows at to some extent at the expense of Tmall, which is and right now first quarter Douyin was in total sales was bigger than Tmall. I t's really a big shift on the Chinese market, which is as you know, as always, we've seized what was starting. We've put first at our mass brands. B y the way, that's what allows L'Oréal Paris to have been gaining share in the first quarter of this year on the Chinese market. P rogressively, we've expanded to our luxury brands, s o overall the online is more dynamic than offline that has been negative. At the market level mass has been more dynamic than luxury. I must highlight also the fact that dermatological beauty as a market, but more importantly our brand is also growing double digits. I n China, I was at the China Development Forum two weeks ago, meeting the officials and hearing the Prime Minister's speech. T here's a lot of talks about health and safety. I think that's good for our dermatological beauty brand, because that's typically what you know the Chinese authorities and consumers are concerned about. We've been gaining share in all categories. O n Luxe, typically, L'Oréal Luxe has reached once again has once again broken its record share, reaching 34% of the luxury market in China. T o be clear, we are unhappy about the fact that this no this market is not rebounding the way we expect it to, we expected it to rebound. W e'll still have to wait, I guess, for some time. W e continue to outperform and bringing new brands to Chinese consumers, and adapting to the new landscape in terms of of channels. Thank you. You're welcome. The next question is from Ashley Wallace with Bank of America. Please go ahead. Oh, hello. Good evening, Nicolas and Christophe. Thank you for the call this evening. Actually, most of my questions have been answered, s o I have three relatively simple ones. The first question is just on the clarification of the phasing of EUR 130 million from the North America pull-forward of revenues. Is this just impacting the professional division or is it also in other divisions? My second question is just on derma. I was wondering if you're able to share the volume versus value drivers within the division. I suspect it's different to the group average that you called out, and probably much more volume driven. C onnected to that, are you able to help us understand how much of the volume growth is being supported by expanded or new distribution points, so essentially shelf space that will continue for the remainder of the year just to give us a sense of yeah, what this year could ultimately look like? T hen lastly on the Luxe division, I was wondering if it's possible to give us the Luxe organic revenue growth ex-travel retail to help us understand the underlying performance of that business. Yeah, o kay. P hasing divisions, it's mostly PPD. I don't know if Christophe, you want to give more details, but it's not only PPD, but it's mostly PPD. I t's really if you look at the growth of PPD they published a growth of plus 10.7? +10.7. Their actual growth is [audio distortion] Adjusted will be a bit over 5%. Mainly PPD division for other divisions is really marginal. Okay, t he other point is on volume and value. All the divisions are growing in volume first of all. That's important. Some more than others. It's true that the division that has the biggest growth in volume is LDB significantly. I t's not, you know, distribution- driven. It's demand- driven. It's really again, you know, we say that. I was telling, saying even in China where it was all about premium brands we see like a brand like CeraVe is now getting a lot of traction in China. We see in Europe strong growth from the derma brands. We see it in North America where La Roche-Posay, I mean, both brands at global level are going very fast. They are among our most biggest growth contributors to the total group. I t's true that La Roche-Posay, which we speak a lot a bit less about than about CeraVe, is doing a fantastic performance. T here's really a global demand for safe efficacious products prescribed by doctors. I t's also, as you know, we discuss every now and then, it's one of the categories that is the hardest to penetrate for new brands or new contenders, because it's about credibility. It's about clinical studies. It's about getting the trust of doctors. T herefore you just can't show up and say, "Cool, I'm now a derma brand." You have to prove your case, s o it's, I think a serious moat for us. T hat's why we continue to outperform a market which itself is very dynamic. S till very ambitious for that division, which is already very sizable as it's surpassed the EUR 6 billion. I t's our most profitable division, s o we like LDB to continue to grow. T o finish on the your question of luxury the growth of L'Oréal Luxe, excluding travel retail is between 6% and 7% growth, which is I would say more or less in line with our assessment of the sell-out of the market, because it's true that this market not just for us is very biased now in terms of sell-in results by all the destocking effect of travel retail, so L'Oréal Luxe, excluding travel retail between 6% and 7%. Okay, p erfect. Thank you so much. The next question is from Jeremy Fialko with HSBC. Please go ahead. Hi, good evening. Thanks for taking the question. J ust a couple from me. First one is just a bit more detail on the Chinese consumer, and I guess what your sort of prognosis is for the rest of the year. Do you expect some sort of a margin improvement in these sort of underlying conditions, or is it one of these things where you're assuming that things will stay sort of pretty much as they are for the rest of the year? T hen linked to that, do you think you would expect to see North Asia go back into growth from the second quarter? T hen just one final clarification, just globally, the global beauty market, I don't think you've given a number for that. I'm guessing around 6% in the quarter, but your perspective as usual very welcome. Thanks. Yeah. Well, on Chinese consumers, you know, it's we see. I was there, and I was listening to the Chinese official. Their number one focus and preoccupation from the prime minister to all the ministers, the trade ministers, is to stimulate consumption as a booster to the economy. T here is this desire from the authorities, yet we've yet to see measures that truly boost both the Chinese consumer's confidence and therefore their spending. Right now, the consumption is more driven by services than by, you know, hard goods. F rankly, it's hard to predict whether we'll see an acceleration over the year. What we feared is that if we remember that last year we had the second quarter was a strong quarter of rebound in China, but then the subsequent quarters at market level were negative. T hat's why we expect to have in terms of overall market performance an acceleration on the second part of the year. Second quarter would be more challenging, b ut the magnitude is hard to assess because today the consumer confidence is not there yet. I n the end, that's, you know, the way we plan our business with Christophe is to go back to what makes our model unique, that we plan with, I would say, a China that is not doing fantastic. W e make the most of the opportunities in Europe, in emerging, in gaining share in North America. I f China accelerates, it will be positive news on our own expectations. A s far as you know, consumers' behaviors, as I said, the Chinese consumers are sophisticating more and more. They are very demanding on the product quality. O nce again it's a game of innovation, a game of bringing them the best products. W hen I look at my brand portfolio and which brands are doing great, it's not based on price. It's based on innovation. W hen I have great launches on L'Oréal Paris or on YSL, I'm going through the roof. I f I don't bring the things that are exciting enough, it's harder to tempt the Chinese. T hat's why we are focusing on increasing even more the quality of our innovations for the Chinese market, a nd what was your second question, sorry? Just in the overall, the global market growth number for the quarter. Oh yeah. The market [audio distortion]. We've had various bits of it, but just the overall number. Yeah. I think you know as always I don't have a crystal ball, but we said that I was expecting to see a market at around +5% this year. First quarter was at +6%, so a bit better. On the second part of the year there'll be less value. That's why we expect a slightly slower market. A gain, going back to your previous point if China accelerates it may change the overall pace, s o today we work on a 5% hypothesis. Brilliant. Thank you very much. The next question is from Jeff Stent with BNP Paribas. Please go ahead. good evening. Hello Jeff. Nice to hear you. It's not a product that I personally have a great deal of need for, but the AirLight Pro hair dryer. What sort of response have you been seeing from the trade? Y ou know, see, is this something that could be material in a grip context? You know, I appreciate it's still very early days, but any comments you could give on that would be most appreciated. Thank you. Well, thank you for asking about this about AirLight Pro. F irst of all, I mean, I'm truly excited about this product, which as you know we presented at the CES. We got tremendous response from of course the media, some reaction from competition, and lots of calls from either retailers or even influencers that are very interested. I t was a bit of a teaser, because the reality is that we'll be, you know, starting to sell this product on the back half of this year. We are in the beginning of the manufacturing process, s o it will not be material for this year's business. I can tell you that I'm telling very regularly to the PPD president that I expect this to become material in the years to come, because it's not just something that dries hair. It's something that improves the hair quality, and also reduces the environmental footprint. For me it's the ideal combination of performance, sustainability, and technology, which is an important part of our future growth. D on't expect much this year, but hopefully it will grow and we will continue to see what the consumer response is. Thank you. Thank you Jeff. W e'll take maybe a last question, and then I guess if there is one by the way. The next question is from Robert Ottenstein with Evercore. Please go ahead. Great. Thank you very much. I want to swing back again to China. Three questions related to China. One, and maybe excuse me if you went through this at all, but can you just compare the sell-in and sell-out both in the mainland and travel retail related to the China ecosystem? C an you confirm that you are kind of at equilibrium now in China retail? T hat's number one. Number two, can you maybe just give us some reasons, or thinking about thoughts behind your confidence that luxe and prestige products can work well on TikTok, on that platform that it can give a consumer you know a luxury experience on TikTok if that's possible or whether you know that could potentially shift the dynamics between mass and luxury. Then finally, related to that, how are you thinking about 618? Are we going to see you know a really strong kind of shopping holiday as in the past, or do you continue to believe now perhaps that sales are going to smooth out more along the year driven by TikTok? T here may be a kind of a different more smooth kind of cadence to sales more smoother than bouncier as in the past. Thanks. I f we go to sell-in and sell-out, so in China, we are right now in the first quarter we have a stronger sell-in than sell-out, not in a major way and with no inventory issues but sell-in is slightly ahead of sell-out a couple of points, which is due to launches of new products and so on. I t's of course then everything will depend on the consumption that we'll see on the second quarter, third and fourth quarter. As I said I think we had easier comps on the second half in China than in the second quarter, where we had indeed, I mean, 618 last year was the festival that came after COVID and before the disappointment of Double 11 where numbers were really high. Of course, our teams are very focused, and very determined to deliver a great performance on 618. W e'll see where it is. It was a high number last year so we'll try to match it. A s I said, we're really adapting to the new landscape in terms of doing it. Y ou know, as always it's a new playground, and every time we adapt our techniques to the new playground the same way we've learned to master Tmall then JD. The same way we've learned by the way now to be very strong on Amazon in the USA with our luxury brands, dermo brands, professional brands while at the same time truly protecting their brand equity. We are seeing that Douyin is a good place to sell luxury as long as again, you've got strong brands and strong products which means that we are not betting all on Douyin. We continue to invest in Tmall, and we continue to invest in particular also in brick and mortar. I've visited stores in Beijing two weeks ago where I saw new counters of Lancôme, the launch of Prada Beauty, the YSL new counters. We're investing to continue to boost the image, and the quality perception of our brands. T his is always this combination of what we call all, plus all online, plus offline, which allows us to win share in China, as we've done it again in the first quarter. Christophe wants to add something. Yes. Maybe to bring a bit of color on that. I mean, our luxury brands have been doing extremely well in doing. I can tell you that first quarter they were growing even faster than the 100% that we had overall in doing, a nd they have already their new fair market share in this channel so responding extremely well actually. G aining market shares also at the end of March, s o for attending, it's a channel that is a lift for our luxury division. W hat's interesting to add to this is that it's also a good tool to penetrate tier three and four cities, which is, as you know, part of China, where we do not have the same share. We have about half the share we have in tier one and two, a nd the consumers of tier three and four cities are even more prominent on Douyin. I f we do the right thing, I think we'll also expand the penetration of our brands into tier three and four cities. All right, s o I've been told by Eva that we have one last question from Tom Sykes, which I'm more than happy to take before we call it a day. Question is from Tom Sykes with Deutsche Bank. Please go ahead. Yeah. Thank you. Good evening. Just two quick ones really. I mean, one, could you just say there's zero restocking effect on fragrances particularly in Europe? I know some of the supply chains may not have 100% normalized by the end of last year, but is that the case? T hen just on your margin comment, you've grown ex the phasing at 8%. That's your CAGR over the last four years. Your reported growth is 400 basis points better in Q1 than it was in H2 last year, and yet you're talking about a phasing in margin. C an you just help us with that a bit? Can you say that the growth in margin? I mean, maybe it'll be good in the first half and very, very good in the second half in terms of the phasing, but it feels like maybe the margin might be closer to flat in H1. If that's the case and you get growth in H2, is that margin growth related rather than taking out costs? You're retaining costs in China, presumably? I will let Christophe answer that one. I will just make it very simple. As we said already in the past, because of the travel retail, you know, we will have better margins in the second half compared to the first half. T hen we will see if there is any other external effect that could impact, b ut for the time being, you can expect really a year in two halves. First is we keep the margin. Second half will be higher. Thank you. A s far as the question on Europe and fragrance, I'm not aware frankly. I haven't heard anything about restocking of fragrances in Europe. We have strong consumption, s o there's nothing around that. It's really consumer demand. A gain, the success of the initiatives we put on the markets, which are great. A s far as you know, I'm sorry, there was a previous question which I did not totally answer on the sell-in, sell-out in travel retail, but in Hainan, as we said at the end of the year, we were back to normal inventory levels. We are now facing the comparatives of the hype of the markets where pre-Daigou clamped down. W e continue to progressively destock and it should get progressively better in sell-in as the year goes by, which was part of the previous question I did not answer. This being said, ladies and gentlemen, thank you for your questions and looking forward to our next meetings for roadshows. Thank you. Good evening. Ladies and gentlemen, this concludes the conference call. Thank you for your participation. You may now disconnect.