Hello, welcome to the Rémy Cointreau 2023-2024 Q1 sales publication conference call. Please note this call is being recorded, and for the duration of the call, your lines will be on listen only. You will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Mr. Luca Marotta, CFO, to begin today's conference. Thank you. Good morning, everyone. Thank you for being here with us this morning. As you have seen in the press release, Q1 sales were down -35% in organic terms, in line with what we expected. This performance reflects, on one side, the huge base of comps that we cycled. As a reminder, Q1 last year was up +74%, compared to Q1 1920. On the other side, some punctual and expected headwinds in the U.S. I will come back on it in a few seconds. The rest of the world generated a very strong double-digit growth, driven by China, Southeast Asia, EMEA, and travel retail. This performance is splitted between a negative price mix of -9%, which reflect a strong negative mix linked to the underperformance of the cognac division compared to the Liqueurs & Spirits division. In the meantime, volume decreased by -26%. I will detail it on the next slide. Overall, Q1 sales were up +14.3% as compared to pre-COVID level. Looking at overall sales performance by region. Americas recorded, as expected, a massive decline due to different reasons. First of all, high comps, and second major reason, meaningful destocking, essentially on cognac. Compared to 1920, America is down approximately at the end of Q1, -10%. This negative performance on a four-year basis is specific and punctual, will reverse already starting from the Q2. APAC was up very strong double digits, led by China, Southeast Asia, and the continued recovery of the travel retail channel, even if Chinese tourism is not yet fully back. This represent +30% growth versus four years ago. EMEA was up mid-teen, showing a broad-based growth across the region. EMEA is up at more than +35% compared to four years ago. This was shipment sell-in. Now, talking about value depletion at group level, the best approximation of final sellout or final consumption. At the regional level, in the US, value depletions were down low single digits, i.e., stable if we exclude the VSOP. As compared to pre-COVID, 4 years ago, value depletions were up +45% and increased at more than 75%, excluding the VSOP. More importantly, we enjoyed a strong sequential improvement throughout the quarter, with June back to positive in terms of exit rates. In China, value depletion were up very strong double digits in Q1, led by all Cognac segments. On a four-year basis, China value depletions were up +20%. Finally, in EMEA, value depletions were up strong double digits, led by Africa, Middle East, Benelux, and Eastern Europe. This represents an increase of around +50%, compared to Q1 2019-2020. In a word, strong, huge value depletion performance at the end of the quarter comparing to four years ago. To conclude on this very first slide, I would like to reconfirm, re-ask our full year guidance. We expect to remain stable, both in sales and profitability on an organic basis. 2023-2024, as a year, will be a year of two halves in sales and operating profit margin, with H1 strongly negative and H2 showing a very sharp, terrific recovery. On page three and four, we picked up some marketing initiatives that have been undertaken over the last quarter, first in the U.S. and then in China. Let's start with page three and the launch of the new Cointreau campaign, the MargaRight, on June 14. As part of the celebration, the 75th anniversary of Margarita cocktail, this 160 degrees campaign includes a large activation plan on premises, off premises, e-commerce, social media, and out of home panel across high traffic locations. Far, the results were very positive, with around 230 million impressions, 39 million views on digital media, and a positive, very positive consumer sentiment response to the campaign. The heart of the campaign runs through September, while we'll keep it on some, to some degree, throughout January. On page four, just a quick word on China. This slide illustrates the last e-commerce operation that we made in China during the 618 Shopping Festival event. We managed the day on our two key digital platforms, Tmall and JD.com. On Tmall, we proposed a special edition, Club Radiant Sun, and with map in the art territory, with the Chinese artist, Sheep Chen, at the Affordable Art Fair in Shanghai. During this event on live streaming, Sheep Chen interpreted in front of the camera, his inspiration on Radiant Sun Barrel by graffitiing his iconic motives. The same time, the other platform, JD.com, we offered a special edition, Club Shenzhen, leveraging the influencer, Austin Li, for an outdoor lifestyle e-commerce live streaming in Shenzhen as well. This day has been a strong success for Rémy Martin, above our expectation, with around +25% of sales growth on Tmall and JD.com. We have been ranked number one among Western Spirit Brands on JD.com and number two on Tmall. Let's move to Q1 sales and figures analysis, slide five. Sales amounted to EUR 357.5 million, down by EUR 152.4 million year-on-year, or -37.2% on a reported basis. This reflects a very strong organic decline of EUR 143.5 million, i.e. -35.0% of organic sales decrease as expected, and a negative currency translation impact of EUR 8.9 million or 2.2% loss in Q1 2023-2024. This loss, the conversion, was largely driven by the deterioration of the Chinese yuan for EUR 4.8 million and US dollar for EUR 2.1 million. Some other currencies, like the Canadian dollar and British pound, posted the slight losses of respectively EUR 0.6 million and EUR 0.44 million. On slide six, I would like to share the performance by division and at group level versus Q1 2020, so pre-pandemic. Even if this is not at our advantage this time, due to the important destocking on the US cognac. On the left, the evolution of group sales at constant exchange rate. In the Q1, we grew at 14.3% on a four-year basis, including a volume effect of +8.2% and a strong price mix effect of 6.1%. Looking inside this performance over four year by division, on the right part of the slide, we have, first of all, on one side, the cognac division declined by 4.4% contrary over four years due to the U.S. destocking, as already mentioned, and consequently, volume were significantly negative, but price mix still strongly up by 25.6%. On the other side, Liqueurs & Spirits were up 69.7%, which is huge and showed a well-balanced breakdown between volume and price mix. Let's turn to slide number seven, digging into organic trends by region. Let's start with the Americas, whose organic sales recorded a massive decline of more than 60%, mostly impacted by volume, while price mix was negative due to the strong underperformance, mathematically speaking, of cognac compared to Liqueurs & Spirits. More specifically, inside this region, in the U.S., sales declined at the same pace, reflecting huge comps, meaningful destocking, and to a lesser extent, some phasing effect on Liqueurs & Spirits, following a very strong Q4 in 2022, 2023. This performance is clearly, and as expected, negative. Having said that, the positive news is the evolution of our inventories, which lends now, in our best estimation, to four to five months, saw a decrease of at least 1 month compared to three months ago. This is not yet enough. We are clearly going in the right direction. Sorry to repeat myself, this KPI is a very complex one, relying on different moving parts, such as, first of all, the timing of the shipment inside within the quarter, and second one, more important, depletions forecast of the future and timing of the depletions execution as well. Even if depletion trends are clearly encouraging, we prefer to remain cautious at this stage and be focused on their evolution on a weekly basis. Again, the best KPI to monitor at this stage, all that is the value depletion underlying trends. In Q1, they were down overall, low single digits, i.e., stable, excluding VSOP, and improving month by month. In Canada, sales were down strong double digits in a challenging market impacted by the economic context and some destocking, and following a disappointing Chinese New Year in Q4 in Canada, as Chinese tourism is not back yet. On a positive note, St-Rémy, which represents a third of our sales in Canada, recorded a solid sound performance. At the end, last but not least, Latin America was up high single-digit in Q1, with solid underlying trends in the wake of tourism recovery. End of June 2023, Americas region accounted for only 35% of our group sales, meaning down 31.31 points compared to one year ago. Second region is APAC, in which organic sales were up at very strong double-digit year-on-year, i.e., +30% on a four-year basis. Looking at the volume value equation on this region, performance year-on-year was equally driven by volume and price mix, very balanced. China sales inside of this region were up very strong double digits, benefiting from the on-trade recovery and were essentially led by our cognac references, including CLUB, XO, VSOP, and Louis XIII. We recorded another strong performance in e-commerce, mainly in D2C and B2C, above our expectation. Thanks to the strong activation plan for the 618 Festival on Tmall and JD.com, we recorded a very important performance. Value depletions at group level in China were up at very strong double digits as well, leading to a sound level of inventories. The remaining rest part of Asia reported very strong double growth in Q1 in Southeast Asia, particularly in Malaysia and Philippines, while it was more challenging. End of June 2023, APAC region accounted for 35% of group sales, up 17 points compared to last year. You see, 35 Americas, 35 APAC, and you will see EMEA 30. Even with a big destocking, a more balanced picture, regionally speaking. EMEA organic sales were up mid-teen and at more than +35% compared to 4 year ago. This year-over-year performance was equally driven by volume and price mix. A little bit the same picture that we experienced in APAC. Inside that, by subregion, Western Europe was up at very strong double digits growth, led by Germany, France, and Greece. U.K., the U.K. showed a solid resilience despite icons at high single digit, driven by value market share gains and sub positive phasing effects before the expected duties spike increase that will happen in August. The remaining part of EMEA, we recorded strong dynamics in Benelux, Africa, Middle East, and Eastern Europe, with clearly cycle low comps. Eastern Europe without Russia, because we don't sell to Russia. Over the quarter, value depletion were up at strong double digits year-on-year, so another positive element for this region. End of June 2023, as already said, EMEA region accounted for 30% of group sales, up 14 points compared to last year. Let's now turn to slide number eight in the analysis by division. Let's start with the Cognac, the heart of the group. Cognac posted a organic decline of 44.7% in Q1 2024, including a significant important decline of 55.1% in volumes and a very strong price mix gain of 10.4%. End of June 2023, Cognac division accounted for 60% of our sales, six zero, down 11 points compared to last year by region. Let's start the most important and weight now, region for the cognac, which is APAC. In APAC, we'll start with Mainland China. Sales were up very strong double digit, approximately +100%, so the double of Q1 2020, driven by on-trade recovery, a very good performance of the e-commerce during the 618 Shopping Festival. To that, I have to say that e-commerce grew approximately at +30%, mainly on B2C and D2C, leading to a total sales penetration by channel of 33%. The overall performance was led by all cognac segments. CLUB continued to really outperform the market, while XO showed some positive early sign. As a result, inventories level remain sound, our outlook is positive, despite a clearly challenging macroeconomic context. Looking at other areas inside China, Taiwan recorded an outstanding performance, while Macau performance was muted, as gaming activity is not yet fully back. Finally, Hong Kong was slightly down, impacted by some phasing effect. At the same time, value positions were strongly up in the Q1. Cognac division, now looking inside Americas and starting with North America, so the combination of USA and Canada. Cognac sales were massively down year-on-year, at more than 75%, impacted by extremely high comps and a very meaningful destocking effect. As a reminder, Q1 2022-2023 last year in the US, specifically, was up at more than 190%, so almost three times compared to Q1 1920. In addition, in a market that showed structural price decrease and a more global promotional context, Rémy Martin continued to reinforce its pricing price positioning by slightly increasing its prices on April 1st. On a four-year basis, sales are down a very strong double digit and turn positive at mid-single-digit if we exclude the VSOP. The same time, US value depletion for cognac were down -4.5% year-on-year, i.e., around 38%, 37.9% increase versus Q1 2019-2020, or approximately +90%, so almost double, excluding the VSOP. More important to note, they showed the US cognac value depletion, a sequential improvement throughout the quarter, June being back to positive lengths. Rémy Martin 1738 was back to positive overall in the full quarter. Price mix effects were positive at +8 points year-on-year in the last 12 months, longer period, and in June 2023, led by price increases as well as positive mix effect. On a four-year basis, price mix in value depletions was up of +27 points. Latin America sub-region was up a very strong double digits, supported by continued tourism recovery. Last region inside cognac, EMEA. Cognac says we are up very strong double digits, led by all regions, particularly Africa, Middle East, and Western Europe. Meanwhile, Eastern Europe generated a strong double-digit growth from low comps, and the UK showed good resilience. Overall, inside the EMEA, Rémy VSOP and Louis XIII were the two big winners of the quarter. Now, let's now turn to slide number 9 and talk about the global Liqueurs & Spirits division. Liqueurs & Spirits division posted a decline of -11.4% in organic sales in Q1 2023-2024, including a decline of 7.6% in volume, mainly due to the Americas, and the negative price mix effect of -3.8%, linked to the phasing impact on Cointreau in the Americas. End of June 2023, Liqueurs & Spirits division accounted for +37% of our sales, up 10 points compared to last year. Let's review the performance of the division by region, starting with the Americas. In North America, the sales were down strong double digits year-on-year, approximately +70% at the same time compared to Q1 2019-2020, impacted by very high comps. As a reminder, Q1 2022-2023 in the U.S., also for this division, was up at around +160% versus Q1 1920. In addition, the division faced some phasing effect linked to some distributed restocking in Q4, just before the price increase on April 1st. This was particularly visible in Cointreau. The same time, underlying trends remain healthy, and sell-in will renew with growth from the Q2. Cointreau Q1 U.S. value depletions were up +4.1% year-on-year, comparing to very high counts. They represent an exceptional growth of +85.4% compared to Q1 1920. Besides, on top, price mix was up by four points versus last year in the last twelve months period, ending June 2023, and up +25 points on a four-year basis. Also, on Cointreau, there a huge valorization and value depletion compared to pre-pandemic, not only in cognac. In parallel, Latin America sales were able to be stable in Q1. If Cointreau performed very well, Mount Gay declined in Barbados, affected by lower tourist traffic in the island. In EMEA, important region for alcohol and spirits, sales grew at 19% in Q1, year-on-year, led by Cointreau, the whiskeys, and Rémy Martin. Western Europe, Africa, Middle East, and UK outperformed and generated a double-digit growth, while Benelux showed solid dynamics led by whiskeys. Finally, Eastern Europe recorded very strong double-digit growth from a very low basis. APAC, for this division, inside APAC, China posted a strong double-digit sales decline in Q1, approximately +35% if compared to Q1 2019-2020, impacted by some destocking at retail levels following Chinese New Year on this division, an aggressive promotion from high-end competitors. Remaining part of Asia performed well and recorded a mid-teen sales growth on Q1, year-on-year, led by Japan, New Zealand, and Thailand. Which brands? Cointreau, whiskeys, and Telmont Champagne. Before to conclude, one last word on the performance of the non-group brands, which now represents 3% of our group sales, up 1 percentage point year-on-year. They were down by around 5%, -4.6% in the Q1, mostly affected by the U.K., where our non-group brand, Passoã, is facing a strong discounted competition. In conclusion, slide number 10, we are reconfirming our guidance disclosed end of April. Following two outstanding, amazing years, Rémy Cointreau expect full year 2024 to show a continued strong normalization of the consumption in the U.S. It will settle at new normal levels significantly above 1920 pre-pandemic levels. At the same time, we expect a strong organic sales growth throughout the year in the rest of the world, including China, where we expect major sales gains. EMEA and the rest of Asia, they should generate very good, strong performance of course, on top, Travel Retail channel, that should reach this year, pre-COVID levels in terms of sales. In this global sales context, unbalanced, but overall focusing on this target, the group expect total sales to remain stable on organic basis for the full year 2022-2024, with a strong decline in sales in the first half, reflecting essentially a very strong fall in the U.S. and high basis of comparison. Clearly, a very strong recovery in the second half of the year, driven by sharp rebound in the U.S., starting from the Q3. Meanwhile, Rémy Cointreau intends to confirm its organic level of profitability, meaning stability also in terms of organic profit compared to last year, based on four different elements. First of all, a continued rollout of our value-driven strategy, built on a firm pricing policy and improved price mix. Second, a resilient gross margin in a persistently inflationary context. Third, stabilization of the A&P ratio as a percentage of sales at group level. Fourth, very important, tight, extremely tight control of our overheads costs. Thank you for your attention, now, we'll be happy to answer to your potential questions. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. The first question comes from the line of Simon Hales, calling from Citi. Please go ahead. Hi. Hi, thanks, Luca. Good morning. Couple of questions, please. I mean, could you just talk a little bit more about the scale of the impact of the USD stocking we saw on the Q1 results? I think from memory, you indicated back at the Q4 sales that the one month's worth of inventory reduction equated to about a EUR 40 million impact on group sales. Given that you said in the presentation there that you've probably seen about a month's inventory reduction, is that the sort of level of impact that we did see in Q1? Then on the go forward, how do we think about the ongoing scale of the destock in the second quarter? Is there another month probably to come out, do you think, over the next sort of two to three months? Secondly, I suppose against that backdrop, I wonder if you could just talk about how you think about the expectations generally for Q2 and H1 consensus, organic sales growth. I think the market at the moment is looking for Q2 sales for the group to be down around 2%, and for overall H1 to be down 18%. I mean, does that tally with your comments at the end there for a strong decline in sales in H1? Yeah. Thank you. In terms of qualifying the stock in the US, you have to compare the quarter, not with 1 year ago, but in a rolling way to the last quarter. You have to compare Q4 and Q1, if you want to do it mathematically, and at the same time, the speed and of the depletion. The months of the stocking that we highlighted, overall, at least on month, so from five to six to four to five, is our best estimation, is linked to a clear decrease in shipments. Again, you have to compare it with the Q4, not with the Q1, because the stock is a living indicators. You cannot compare that with the shipment of one year ago. The depletions value and the timing of the depletion value. We are in the right direction. We continue to destock. It will last maybe a bit also in the Q2. The very important indicators, in our opinion, is not what will be the shipment in the U.S. in the Q2, it's what will be the depletion trends in the Q2 in the U.S. There will be some volatility, clearly, month by month. We remain cautious. We analyze that on a weekly basis. We are confident that the sequential improvement will continue. Overall, comps will be easier, will be clearly positive from the Q3. From the Q2, on a mathematical basis, we could expect in terms of depletion to be more, more in a positive length. We cannot grant that because there is still a level of volatility, and we are observing, and we continue to destock in Q2, in terms of stock equation in the US, because it's the way we build the budget. No pressure on that. There is a year or two months. One month of destocking, we continue to destock, and the situation will be even more clearly addressed after the end of Q2. We are in the right direction. I think that this answer to both questions, with the first, the qualifying, the ongoing, the stocking in the US, we cannot say that it's totally ended, and we could be in positive length in the Q2 in the US. This not will be the case. A more general question about the quarter, what will be the quarter at group level in the Q2? We expect a sequential improvement. It's too early to guide more precisely. Do we expect a group level, if you question, to be positive in Q2? No. Do you expect to be still negative? Yes, probably, single digit negative at group level. I'm talking shipments. This is the way we design the budgets. The underlying trends are respective. We continue to perform in that way, to observe on a weekly basis, we will decide and we'll address this point even more clearly end of Q2. Very good news, too early to capitalize on that for the full year. The guidance is there, we confirm it. In a way, we are saying that we are committed the stage to reach the budget targets. Got it. Understand. Just to confirm, Luca, you know, when we, you know, think where you hope you'll be at the end of September, so the end of H1, from an inventory position in the U.S., you know, should we be expecting to see inventory running at three to four months at that point? Is that still your target, to get to that sort of level? We do not target coverage as a result. We target absolute value of running depletion on a weekly basis. We correct them, we get a monthly expectation, and we phase the shipment, we correct, and as a result, we calculate the stock coverage at the end. Frankly speaking, it's a very complex, it's sometimes a bit too dry indicators, KPIs, that can't be an objective per se. Why that? Because three to four months, or four to five months of today, if you are increasing depletion of 20%, 30%, 40%, with despite we experienced very clearly some quarters ago, all of a sudden becomes irrelevant. It becomes out of stock. We do not target to have a monthly coverage as a global objective, will be the consequence of depletions return and ship adjustment. No commitment on stock coverage at the end of the Q2. That's sequential improvement and clearly visible positive effect starting from the Q3 in terms of profit and loss and shipment. Got it. Thank you very much. The next question comes from the line of Edward Mundy. Please go ahead. Morning, Luca. Two questions for me first. First of all, on the U.S., could you perhaps talk about the depletion journey for cognac in the U.S. and the quarter? You reported -4.5% in value. You talked about trends improving sequentially and being back to positive in June. I guess the question is, you know, what's really driven that improvement from a depletion standpoint, and has that continued into July? Second of all, in China, I think part of the strong recovery is the on trade, you know, coming back. Could you talk about, you know, what you're seeing in terms of China recovery and traffic and where is the on trade as a proportion of your sales today? I think you were talking about it being 20% of sales a quarter or so, ago. Depletion journey in the U.S. was a positive one, and mainly in June, as said. In exit rate, in the exit rate in June, we are clearly positive in volume and value, both for cognac and at the group level, so overall. But we cannot conclude at this stage the June trend can be extrapolated, it will be only up. There will be some volatility, week after week and month after month. What is important is to continue to follow these trends in a more consistent way, quarter after quarter. I repeat myself, with some volatility to be expected. June was clearly positive. To try to qualify that, it was volume and value all around the division, and with some products clearly overperforming. 1738 was one of them. XO, Cointreau, clearly, Botanist. So far so good, we are on the right direction. In terms of China, what is the current context and what we can say, which you don't know, because you already know that we bet on China and we think that we will be doing better than competition. The Q1, it is a very good performance. We are confident for the full year. The macro is slightly worse, clearly what we was expected, but the level our brands, this is more than enough to continue to deliver a strong growth. In Q1, we profited, we benefited from the on-trade reopening. Traffic is now back to normal. E-commerce is very, very dynamic, as you've seen. In terms of the portfolio, CLUB is the clear weapon, clearly driving the portfolio. XO, positive signs, also linked to the on-trade, VSOP penetration and performance is accelerating on the back of this on-trade reopening. Louis XIII is doing okay, clearly the real estate sector still a bit struggling, as a little impact on performance, we are clearly in a positive performance as well. We are confident for the full year. For China, it is very important to have this kind of conversation at the end of Q2, because Mid-Autumn Festival and then Chinese New Year with the two key moment. We are running very good. We are confident for the year, once again, in this kind of environment, we have to be humble, look at figures, disclose them and comment. Far, we are more than in right direction, but no swagger, and we are not showing our muscle, what we can do. Figures are speaking for themselves. Very, very strong performance. If you compare China and APAC to pre-COVID, it is the lowest growth, compared to the pre-COVID in the current. It gives you the fact that we might have also additional space for the future to even more Asia Asiatic-oriented than today in our figure. A lot of confidence for ourselves in terms of China performance for the future. Great. Thanks, Luca. The next question comes from Andrea Pistacchi, calling from Bank of America. Please go ahead. Yes, hi, Luca. I have three, if I may, please. First one on the U.S. Your depletions are improving, clearly, but Nielsen shows depletion. Well, Nielsen doesn't measure exactly depletions, but based on Nielsen, I think, there's still about a double-digit decline. Nielsen we know is far from perfect, but what in your view mainly explains this discrepancy between your depletions and what, say, Nielsen and NABCA are showing? The second question, please, again, on the U.S., if you could just talk, comment a bit on the pricing environment. Is it still quite complicated or the signs of improvement? Then, a broader question on your guidance, please. Q1, in line with your expectations, depletions in the U.S. are improving. The macro in China, probably not as favorable as you would have anticipated a few months ago. In the way you think of the, how the full year pans out, has anything changed, maybe in terms of relative strength, China versus US, as we go into the next quarters? Thank you for your question. Starting with the Nielsen, as you remember, we highlighted many times this point. Nielsen is off trade in open states. The coverage is so far considered 44% market level. For us, it's 38. We are underrepresented because this is not a good proxy for control. I repeat it many times, because independent store, liquid stores are under-evaluated in this index, and we are very strong there. Two key chain store, Costco and Walmart, are not included. We combine Nielsen, NABCA, and the commission Nielsen NABCA for us is around 60%, for the market, 68%. The 40% remaining that you see is the combination with the discuss figures, giving the best approximation of the whole market. There is some disconnection, but it's consistent all along, comparable all along the different cycles. There's not showing an acceleration of the discrepancy or something different. We don't see it as an issue, once again, because we are clearly under-indexed in some key actors and channel. Pricing environment is, in the U.S., is still structurally complex. The fact that we are able to maintain or to increase our prices, it's a very strong identity, habits that we are showing in the market. Despite the price that will impact, and will have in our shipment, because there is an immediate short-term impact, we are very convinced that the respect of the brands is built day after day and month after month, and playing with prices in a very, a very huge, up and down is not a good thing to do because you might destroy the reputational brand. The structural price decrease from some competitors and very strong promotional activity from other one. Without naming it, you know better than me the situation. Pricing environment is still very complex in a universe which wholesaler want to carry less stock, because also the interest rate, the working capital is more costly, and the return on capital employed, demanded by different board of directors, clearly is higher. This is a global context that in the short term, could imply this kind of volatility that you see in the shipment and depletion as well, because depletion at the end is only a logistic movement between wholesaler and retailer. At the end is what's happening at retail level in terms of respect, visibility, and appetite for a brand that we determine who is right, who is wrong. I repeat myself. In this case, it will be a little bit more, swagger. We are suffering more than others in the short term, but compared to four years ago, COVID, we are the clear winner. We can support this short term headwind because we think we are right. In terms of full year balance, did something change in terms of regional balance? No, no. You at this stage, we are respecting our hypothesis, clearly capitalizing six months result after the Q2, will be more, we will have more visibility to be able to confirm that. Far, we are in this direction, with the U.S. strong decline, to be able to restock and to fit with depletion that will be clearly be showing positive lands starting from the Q3. China, which is very strong despite the macro challenge, and Europe, so far is performing very well, better in some countries, less on other, but overall, more than respecting by the expectation. Southeast Asia, if you want to find the negative point of attention, the Japan, Australia, Canada in a way, and some beating countries like so far, some European, Africa, clearly China, and travel retail. Travel retail, which is very important. Being back, one sentence I said before, it's in my opinion, in our opinion, very important. Being back at travel retail level, end of the year, with the Chinese tourism not yet back at the full speed, it's an important driver for this year and for the future. Thanks, Luca. As a final reminder, if you would like to ask a question, please press star one now. The next question comes from the line of Nik Oliver, calling from UBS. Please go ahead. Hey, Luca, thank you so much for the questions. Just two from my side. When you talk about inventories in the U.S. now being four to five months, can you give us some sense of what you're assuming for the underlying market? When you talk about that rebound, in the second, I guess, calendar half, your underlying assumptions behind that as well? Yeah. Inventory in term the underlying observation for our competitors is very complex because we cannot cycle the comps. What we can see that at market level, I know if it can answer to your question, global market, like with spirits, all categories, is low single digit, clearly driven by categories in which we are not. Even as lower piece, Tequila is clearly better than other categories. RTD is some bourbon and whiskey, which we are not in. If you look at our spreadsheets in the category, we are playing it, so Cointreau, Cordials, and Cognac, we are beating the market in the short term in volumes and value. I suspect that in terms of inventories, they could be mathematically a bit more dynamic than us, if we are doing a lot of promotional activity or structural price decrees. I don't know. I don't know if the fact that you are decreasing prices big time, makes that one guy buy two bottles or one. Maybe he buy only one. It will be- The result will be what the consumer will dictate. In the short term, when you do structural and huge promotional decrees, in this kind of context, you might be favorized, have an advantage, tactical advantage, because the rotation of the capital employees is bigger. At the end, the underlying is not this well. I cannot answer precisely. I only try to give you some ins. Second question is for us, is on the underlying. For us, despite the spike, which is the restocking. What is the underlying? Far, the figure will be in the Q3, depletions, value, and shipment, a very strong rebound, but it's a part of restocking replenishment. Our underlying depletion trends for the normalized U.S. environment, clearly in cognac, is to be into mid to high single-digit underlying sustainable trends, beating the market. For liquor and spirits, million cognac be even higher. This is stripping out any destocking, restocking effect. This year, it's very complicated to analyze. On that point, clearly, we need to be very clear in 2024- 2025, after this shaking down and up year will be ended. I repeat, underlying expected trends in the US depletions value, starting from a normalized new level, will be mid to high single digit. For cognac, maybe something better for liquor and spirits. Because there is a penetration in numeric environment to conquest as well in this part. Well, if I take a look at that, specifically. Thank you. Next question comes from Trevor Stirling, calling from Bernstein. Please go ahead. Morning, Luca. Two questions on my end. One, Luca, you've referred to the pricing environment in the U.S. and being very structurally very complex. Is it getting any better directionally or it's just staying as bad as always? Second question, could you give us a little bit more color on Asian travel retail? You touched on it in your comments, but in the presentation, there's not so much detail. Maybe just what are you seeing in terms of, is it a slow recovery of overseas Chinese tourism? Are you seeing that coming through in the numbers as well? Any color there would be great. Thank you for your question. Pricing environment in the U.S. is more or less the same situation that it was three months ago. I was personally in California in mid-June, and observed that this kind of jeopardized and sometimes mad environment exists, with huge differences from major SKUs of some competitors, from one chain to another, and clearly a volume game in which we are not in, which is played. I don't have the feeling, and our teams know more, that this pricing destruction has been sold, it's still there. In term of Asian travel retail, we are running very good, triple digits versus last year, still below level of 1920. The aim, the goal is to regain. It's historically a very important channel, not only for travelers, but also. For Chinese travelers, both for other foreign, and historically, very good margin as well. Without disclosing too much, but the Asian travel retail, in terms of top line and bottom line, is the art of the travel retail channel. Doing better there is giving more green dollars, non-theoretical blue dollars, to the group. Very good. Thank you, Luca. The last question comes from Yubo Mao, calling from Morgan Stanley. Please go ahead. Morning, Luca. Can I just have a quick question on the U.S.? If I look at your volume depletions for cognac, it was down around 5.5% in the current quarter versus - 32% in March. There were some significant improvements, but in the meantime, if I look at the same table, the market run rates were more or less stable. It seems like you've gained some meaningful volume share, which is interesting, given, you know, your comments around you're not being as aggressive on promotions. I wonder if you could talk about what drove this outperformance in volumes and how sustainable it is in your view. Thank you very much. Thank you so much. We are clearly in a value game, so the volume are a little bit the consequence of that. I understand your question. It is a matter of comps, and comparing the percentage of growth or decrease, it's more important to compare the absolute value. And we are not, if it is the sense of your question, dynamize depletion with the short-term effect, is that the stocking is playing a role, is that the fact that we are since two, three, four years hammering on A&P is playing a role in term of the brand equity. Big operations like the Super Bowl, in which we, which maybe we do not put them in advance, like other peers could have done, but they are giving this kind of bearing this kind of fruit. There is a delayed positive effect on the brand. Our performance is not linked to commercial tricky device by ourselves, if it is the hidden sense of your question, and is more the solidity of the brands. The fact, please remind that in terms of the economics of a given distributor or retailers, our Group is given one of the best gross margin and profit per case, per bottle. We are very, very important for the economics of distributor and retailer as well. The more you perform with our portfolio, the more you are accretive for your balance sheet. Mathematically and financially speaking, you have a lot of financial directors sitting, wholesaler, retailers, that are pushing for our brands as well, and to sell it because it's benefit for their profit and loss from their cash flow. There are no further questions, so I will hand you back to your host to conclude today's conference. Thank you so much for your attention. In a word, it was a good quarter. We realized what we said, the guidance, it was mid-30s, -35% by chance, but the dynamics of depletion is clearly there. Very humble way, very cautious, weekly basis, some volatility, but we are on the right track. We'll analyze and comment and disclose even more carefully every single figures in the Q2, in the conference 27 October, which is very important. Since then, we'll have a clear, even more clear situation about mid-Autumn Festival, European trends, clearly U.S. So far, we are in the right direction. We confirm here it was from the Q3, a visible, material, significant rebound on all indicators. Q2 should drive to some improvement. It will be, I said, Q2, a Group level in shipment will not be positive so far, will be negative, but single digits with different dynamics by region. Again, no panic. We are in the right direction. Quite the opposite. Be reassured, we are committed to continue our journey towards budget. Thank you so much. See you. No, talk more than see you the 27th of October. Have a nice summer! Thank you for joining today's call. You may now disconnect.