Hello, and welcome to the RemyQuanto q one sales communication. My name is Laura, and I will be your coordinator for today's event. Note this call is being recorded. And for the duration of the call, the lines will be on listen only. However, 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 I will now hand you over to your host, Luca Marotta, the CFO, to begin today's conference. Thank you. Good morning, everyone. Thank you for joining us today. As highlighted in our press release, Q1 sales increased by 5.7% organically. This performance reflect several key factors. First of all, a very favorable base of comparison in The US and a modest sequential improvement in value depletion. Q one of this year compared to q four previous fiscal year. Second point, tough market condition for China and the continued disruption of private retail in China. Excluding this technical specific factor, representing a negative impact of 2.5 points at group level, China specifically would have been positive, showing a good resilience. Third point, the sequential sales improvement in India compared to q four led by Lackos and Spirits division. Q one sales improvement is broken down as follows, plus 12.4% in volume and 6.6 negative price mix effect. Why that? Largely driven by the underperformance of ION brands and the outperformance, positive performance of life and experience. So looking at the sales overall performance by region, America recorded a very strong double digit growth, primarily due to a very favorable base of comparison alongside, as said, a modest sequential improvement in value depletion. APAC Asia Pacific sales decreased by low to mid single digit affected by persistent tough market condition for cognac and, as said, the technical disruption of China, the different China. EMEA declined by high single digits, but showed a sequential improvement led by Life Spirit division versus q four. If life and spirits is clearly back to growth, cognac inside India continue to be weak. This was the safe picture. In terms of value depletions at group level, so the best approximation of the finance allowed, let's start with The US. In The US, at group level, value depletion declined by high single digit year on year. This is slightly better than what we posted in q four of the previous one. And compared to pre COVID, q one value depletion are up low single digit, but not considering the SOP, plus 45%. So out of the SOP compared to six year ago, plus 45% in terms of value depletion in US. In China, value depletion were up positive year on year in the q one and by strong double digits, so more than that, in Mainland China specifically. Underlying, the negative contribution for other Chinese area, including duty free and island. We consider that even if this is a small quarter, a very good performance considering the current context. However, we should be careful not to over interpret this performance too positively. Q one, as I said, remains a small quarter. The base base of comparison were low as showed by the negative performance of the business this year. And we are now entering in the battlefield with the preparation of Mid Autumn Festival. In third region, EMEA, value depletion decreased by high single digit year on year. But excluding Russia that were there six years ago, q one value depletion are also down mid to high single digit versus pre COVID levels. Overall, what we can say in a nutshell at group level, Group value depletion fell by low single digit in q one, two point two percent. So underperforming selling trends by was 5.7% increase. So why this negative alignment between depletion and sell in? Essentially, because US value depletion, even if improving slightly, are still negative. To conclude on the first slide, we increased our full year organic COP guidance following recent updates on the tariff side in China and The US. We continue to expect to generate a mid single digit organic sales growth, while we now improve the bottom line forecasting a organic COP decrease between mid single digit and high single digit to be compared to down mid to high teens previously. Slide number three to five, I'd like to briefly highlight some of the key market initiatives undertaken during the quarter. Let me start with our Cointreau activation, which delivered good momentum this quarter. In June, Cointreau unveiled the second office of Margarite's campaign nationwide in The US. This new satirical campaign, any tequila, is starting Obre Plaza, leveraging the continued popularity of Margaritas, number one cocktail consumed year round in The US. The company position Cointreau as the essential ingredients in any tequila based margarita. We partner again with Obre Plaza to generate a strong engagement and cultural relevance. The creative highlights point towards versatility and authenticity resonating with both bartenders and consumer. Early results are very encouraging. Beyond easy comps, organic sales growth was significantly ahead of last year. Social media impression and earned media exceed expectation, reinforcing the brand equity. We believe this campaign will continue to drive consumption through the summer peak season. Overall, this initiative strengthen Cointreau leadership in the premium cocktail culture. Slide four, I'd like to touch the word on this new strategic launch for one of our key future important markets, Africa. We executed a major strategic launch with Remy Marketing DS in Africa this quarter. The official introduction will take place in September because before launching something so important for the region, we need to prepare that in South Africa and Nigeria. And I would like to insist on the restricted perimeter, I e Africa, of this launch. This move is designed to expand our footprint beyond our traditional core markets of The US and China. Africa is a highly promising region where Versus represents about 70%, a bit more than two thirds of cognac volumes. In South Africa alone, VES accounts for nearly 80% of category sales, underscoring clearly the relevance of this launch. We are targeting a new generation consumer, particularly in the younger 25, 35 year old segment. Initial feedback from trade partner and consumer has been very positive. This launch supports our ambition to reinforce Remy Martin global leadership and clearly recruit new consumer. Last but not least, on page number five, I'd like to highlight our last ecommerce activation during the June 18 festival in China. This campaign aimed to build resilience, accelerate online sales in a challenging market environment. On Tmall, Remy Martin collaborated with a Haybox and Bazaar to create a distinctive pop up. The pop blended a Shaoshan cultural element to connect authentically with the local consumer. On jd.com, we partnered with JD Plus to deliver premium testing and cruise experience experiences. These initiatives have to drive strong organic sales growth compared to last year's festival. The six eighteen festival has become a very important annual milestone for ecommerce engagement. Our focus remains on premiumization and experiential marketing to differentiate our brands online. Early performance indicators including not only top line, but also traffic conversion and repeating perch purchases are very encouraging. This success demonstrates the potential of digital channels to sustain growth in China. Turning to slide number six, more added figures. Q1 sales amounted to €220,800,000 representing a year on year increase of €3,800,000 or plus 1,800,000.0 on a recorded basis. This performance was influenced and shaped by the following factors. First of all, an organic growth of €12,500,000, I. E, plus 5.7% of growth. This performance is split between a plus 12.4 of positive volume effect and a negative minus 6.6 in pricemix. Why that? The pricemix impact will look from a slight negative pricing effect and low to mid single digit negative mix effect linked to the underperformance of I n products and, to a lesser extent, the weight of the KONEF division to be compared to the weight of the life of the spirits. Second point, negative as expected currency translation impact of 8,700,000.0 or 4% loss, mainly driven by the deterioration in terms of conversion of the US dollar for 4,900,000.0 and Chinese renminbi for 2,900,000.0. Now let's go to slide number seven to delve into organic trends by region. Let's start with The Americas, the group level, in which organic sales increased by very strong double digit, but at the same time around 5% down on a six year basis. Year on year performance, very positive performance, included very strong double digit in volume and the low to mid single digit negative price mix impact reflecting, as already said, an unfavorable mix and some price adjustments already started previous year on the SOP. In The US, specifically, sales grew by very strong double digit driven by, first of all, a very low base of comparison for both cognac and lipos and spirits, alongside a modest sequential improvement in value separation from from q four to q one. In q one, value depletion group level in US were down high single digit. This performance is clearly driven by the non cognac brands. Considering the compounders in this context, inventory level level in trade in The US is still close to four months at the end of q one. In Canada, LATAM sales experienced an equivalent sharp growth led by the cognac division disguise. By the June, America accounted for 42% of the group sales, increasing its weight to the total sales of the group of seven points. Second region in terms of weight is Asia Pacific in which organic sales declined by low to mid single digit year on year, but increased more than 15%, one five, on a six year basis. Talking about the volume value equation, performance was impacted by the value component driven by the due underperformance of our end brands while volumes were slightly positive. In China, sales were down low to mid single digit amid challenging market condition, particularly for the I hand segment. Disruption within the duty free has also be a key headwind, representing for this region a negative impact of 6.5 points at APAC level. Excluding duty free, China would have been positive by mid single digit. In parallel, direct channels, which account for around 50 or half of the sale in each one, proved to be very dynamic, generating a very strong growth. Direct ecommerce grew at more than 10% in q one. As a consequence, ecommerce global channel penetration reached more than 35% of sales in q one in China. Beyond the decline of the indirect channel, overall performance was also affected by a very weak performance in Hong Kong, Macau, and Taiwan. On a more positive note, value depletions showed positive trends, up high single digit year on year, including a strong double digit growth in Mainland China. It's a small quarter, but it's a very positive indicator. On a six year basis, q one value depletion decreased by mid single digit, but were up mid teens in Mainland China, witnessing the change of the shape, geographically speaking, inside the Greater China dynamics. Given the stronger resilience of depletion compared to Celine, inventory levels in China remained healthy at the June. As we were in the Asian region, Recovaza showed a sequential deterioration compared to q four, impacted by the cognac division where Japan, Malaysia, Korea essentially. While lack of experience improved sharply twice single digits, but clearly, there is a clear difference in the more weight between cognac and non cognac in these countries. June, APAC accounted for 35% of group sales, down four points compared to the prior year. Last but not the least, big EMEA region in which organic sales at group level were down high single digit and around minus 5% compared to six year ago, finally reflecting a negative value effect. But what happened inside this region in terms of subregional or subclusters within Europe, third party distributor cluster, three PD, recorded a low single digit sales decline impacted by Spain, Austria, and Czech Republic, while Germany and Greece generated a strong performance. In The UK and Nordics, sales decreased by meetings, impacted by some phasing effect and a complex environment, particularly in the on trade. However, sell out was more resilient and and selling performance should improve in the q two in this important cluster, UK and Nordics. In Benelux and France, sales declined by low double digit, impacted a very strong promotional competitive pressure in cognac and softer trends in lattice and spirits. Lastly, in MI and CIS regions, sales were flat more or less, showing some good progress on the SOP in South Africa and Nigeria. And as I've just mentioned, we will enjoy the imminent launch or in EBS to address a very specific demand in this specific part of the world. In q one, value depletion at EMEA level declined by high single digit year on year. And on a six year basis, excluding Russia, value depletion are also down high single digit. Overall, this kind of balance equation between sell in and sell out to best approx of that, determine price that inventory levels remain healthy across more more areas. June, EMEA Region account for 23% of group sales, down three points compared to the previous year. Let's now turn to slide number eight and analyze it by division, and let's start with the queen of the division, which is the Cognac division. The Cognac division posted an organic sales growth of 1.3%, driven by a 9.4% increase in volume and negative price mix of 8.1. June, Konya accounted for 59% of our sales, down three points compared to last year. What happened inside the region, inside the APAC? Let's start with the Cognac, Mainland China analysis. Here, sales declined by low single digit, affected by the challenging market condition in domestic market and continued disruption in travel retail. So here again, calculating the impact of the technical effect of travel retail in in APAC only for cognac, the four points of negative effects at Cognac APAC level. The indirect channels were the most affected due to the continued cash flow pressure weighting, impacting the wholesaler confidence and the ability to place orders. This was further influenced by the transition in the retail team model business model. As a reminder, we significantly reduced the number of wholesaler We have it starting in previous year and to retain only those to meet our specific requirement. On the other hand, direct channels performed prominently positively, including ecommerce, up to more than 10%, and as well with the team PCBs, personal client directors. By brand, club demonstrated greater resilience with value depletion up at more than 40%, four zero, year on year. And if you calculate their performance in value depletion over six year, is plus 65%. While high end brands at the same time performers were more contrasted in saline and depletion. As they were, Hong Kong, Taiwan, and Macau delivered a set of very weak performance both in saline and depletion. Overall, despite the challenging context, value depletion were more than satisfying, strongly outperformed the sell in, and were up high single digit year on year and even more in Mainland China. On a six year base overall, this is equivalent to a high single digit decrease that will increase our mid teens in Mainland China. In the rest of Asia, sales were down low double digit in part of Japan, South Korea, and Malaysia due to the strong promotional and competitive environment and softer trends in Chinese tourism. The second region in terms of waiting for the current division is Americas. In North America, US and Canada, cognac sales were up mid teens, boosted by a very low base of comparison and despite a more the sequential deterioration depletion partially by this compound as well. What the consequence is that the group continue to destock. Q one US value depletion declined by low double digit year on year on cognac, mostly impacted by the SOP, while the IAM segment outperformed in value depletion with 13 x o. But on lower absolute basis compared to the intermediate plus range. Trends were contrasted by state with Illinois this time being particularly weak and California and Texas being flat. Given these factors, cognac inventory coverage is still close to four months at the end of q one. If we analyze the value depletion cognac in The US in a twelve months rolling basis, included five points of price mix negative effect at the June. But on a six year basis, we can see the effect on price mix of the uplift and the lower resilience compared to the the SOP because this indicator is up 12 points. In Latin America, sales of cognac rose by triple digit, but it's very, very, very low basis driven by Remedi ESOP and lithotine. Third region, which is EMEA, in terms of cognac and weight, cognac sales declined by double digit affected by strong promotional and competitive pressure in most market and a weak demand. UK was strong double digit down, impacted by negative trading effect, category softness, and some aggressive market promotion. However, sellout was only slightly down, outperforming sell in, which is always something promising for the very next future. Europe three d cluster was stronger, down double digit impacted by Germany and continued stocking Czech Republic in a very soft and promotional mark. In MI and CIS, sales declined below double digit in a market essentially delivered as said by The US. In terms of depletion, EMEA cognac by the division were strong double digit year on year. Now let's turn to Life of Experiences division line number nine, where situation was different. Life of Expert division reported a plus 17.3% organic sales growth, driven by strong volume increase of 16.8 and a slightly positive price mix effect of 0.5. June, the Lycos and Spirits accounted for 39% of sales up four years versus last year. So the rebalancing weight in a natural way within Cognac and Lycos and Spirits continue to be very nice. Let's review the division performance by region. Let's start with the most important one in terms of weight, which in this case is Americas. In North America, trade were up by very strong double digit, primarily due to a very low base of comparison led by Cointreau, Botanist and Brufladdi. In parallel, Cointreau q one US value depletion were up low single digit year on year, which means more or less plus 95% or twice the weight and the the value of the q one control value depletion in US in 1920. So they doubled in value. The bottom is the embroiled roughly were flat, I e, respectively flat 9055% on six year basis. Additionally, always talking about the depletion, price mix was up one point compared to last year for the twelve months rolling basis ending June, but increased by 19 points on a six year basis. So volume and value value depletion turnaround compared to six year ago in autonomy on the short term. In Latin America, sales rose by very strong double digit driven by going through some performance in Puerto Rico, Mexico, and Brazil. In EMEA, the provision by weight for Blackmon Spirit sales increased by low single digit. Increase. So very important. Showing strong sequential improvement from q two q four led by all subregion except The UK. Value depletion were above selling up to low to mid single digit year on year. Breaking sales for top line further, UK posted a sequential deterioration to mid to high single digit decline impacted by the same element as cognac. So phasing, but also a global weather of a strong promotional environment. In parallel, sell out was quite resilient. In Europe, third party distributor sales cluster increased by mid twice single digit boosted by Metaxa, particularly in Germany, Greece, and Poland, and some market share gains for Cointreau. Last but not least, Benelux and France was up mid twice single digit, while NII and CAS up by very strong double digit. In APAC, third region by weight, China sales were up a very strong double digit on very low basis, driven in Cointreau, Brovadian, Botanist. Overall, q one value depletion were strongly positive in EMEA, also driven by our top three brands. So protect correlation, low figures, small figures, but very promising. Presto's area was up high single digit driven by Cointreau market share gains in New Zealand and good momentum for Brookline, mainly for Octomore in Japan. The final word on non group brands, which represent now 2% of the group sales, so down one point compared to previous year, they recorded a very strong, massive massive 41.7% decline, mostly affected by the Benelux in The UK, which is consistent with our strategy to focus on our own brands. Let me wait a second and then to conclude a very important slide, slide number 10 for a few comments on our guidance for the full year 2526. We have tried to be as precise as possible, although the environment remains unsettled. Despite these headwinds, the backdrop, we expect group sales, group top line to return to mid single digit organic growth for the year, mainly driven by what I would describe as a technical rebound in The US. This performance reflect phasing effect both in The US and China, leading us to anticipate a return to growth in the second part of the year, in the second half, even though q one is already positive. So let's be clear and explicit. We anticipate a decline in q two. Why? Three factor. China, where we continue to expect pressure among wholesaler as well as a negative calendar effect linked to a later Mid Autumn Festival. Second, US. In The US, even if there is sequential improvement to depletion, the depletion remain negative. And so far, they are running behind budget. On top, we expect some distribution changes on a minor scale, but still there operationally in California because of the what we just happened with the change with with between RNDC and Southern Glazers. Third, EMEA, even if there's more dynamics, like I said, peers than in Cognac, remains clearly a Leopard stock cluster. Leopard stock not stock. Sorry. Meaning that the performance is like low pass scheme, characterized as positive, also some negatives that globally makes the expectation for the q two better than q one, but not so enough, not so bright to change the footprint of the group. In a nutshell, I repeat, q two would be a transitional quarter driven by several specific phasing effect that would be a negative one. Q three, q four, and h two should mark a return with positive trajectory, and we believe in that because it's part of our guidance. Now this was for the top line. Turning the guidance to the bottom line, the comp. As you know, we have signed, we highlighted that, a price undertaking agreement with the Chinese authorities, which allows us to significantly reduce the expected bottom line impact for the year. We now estimate the impact at €10,000,000 to be compared with €40,000,000 previously, net of our mitigation plans. In The US, in this guidance, we expect the the latest statement from president Trump, which might be still subject to change. Or as of today, we expect we consider in this guidance an active negative impact of 35,000,000 versus €25,000,000 previously, reflecting an assumed tariff rate of 30% on European imports instead of 20%. At the same time, gains achieved in China relative to our earlier estimates enable us to reinforce sustained investments and clearly with specific arbitration where there is a more competitive and speed to the return on investment, so notably in China. All in all, we now anticipate an organic decline in COP between mid to high single digit to be compared to a decrease of mid to high teens previously. Remember, June, we said everything included mid to high teens, minus 15 to minus 19 more or less. Now it is between mid to high single digit, so it's an improvement. This includes four elements. An underlying growth in COP excluding tough tariff, which is unchanged compared to what we communicated in June. The new import pricing in China, which is another cost compared to the past, but lower than and less than expectation. The risk linked to latest site official statement in The US of 30% type in position duties of in The US, and some reinvestments led to our initial budget assumption to minimize even more depletion, so at the end, supply. In addition to this organic performance expectation of footprint and of guidance, I wanted also to update the currency effect effect, which remains negative this year and highly volatile. While our hedging policy has to mitigate part of the adverse impact, the recent evolution of the dollar and the RMB leads us to expect a situation which is which it wasn't. So it says conversion impact of minus 50 to minus €60,000,000 to be compared to minus 30, €35,000,000 previously, and a cut impact on 15 to 20,000,000 to be compared to 10 to €15,000,000 previously. In term of phasing, both effects should be more or less fifty fifty h one, h two. Exchange rate is not dictating our calls in term of investment, in term of guidance. The company's management seems many, many, many years in terms of organic performance. But we will update you every quarter on this indicator. This is important for you, for us, to estimate the financial implication, the exchange volatility, positive or less this year negatively. This is why I will be continue to update you every single quarter and not only every six months for what concern the ForEx impact. Thank you for your attention. Now I'm very happy to answer to your question. Thank you so much. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. And in favor of allowing more people to ask questions, we kindly ask you to limit yourself to two questions only. You'll pause for a brief moment. Thank you. We'll take our first question from Simon Hales of Citi. Your line is open. Please go ahead. Morning, Luca. Morning, Celia. So just two for me then, Luca. Just firstly, just for your clarification. I I just wonder whether you could just sort of go over again some of the comments you made around the outlook for q two organic sales growth, particularly with regards to The US. You talked about sort of thinking your performance running a little bit behind budget there, but I didn't quite catch everything that you were saying. So just a point of clarification, please, on that. And then secondly, on China, can I just clarify some of the assumptions you're now making in your new guidance following the the move to a minimum price agreement there and the 10,000,000 net impact you're guiding to on EBIT for the full year? Are you assuming that you absorbed fully the minimum price move that you're seeing, or could we yet see some of that pass through in terms of pricing? And what are you assuming on a go forward basis with regards to China duty free from here? Are you are we still expecting that that remains a headwind through the second quarter of the year and there's no sort of restock of the channel at all in your full year 2526, that's the organic sales guidance for mid single digit growth? Hi. Hi, Simon. Thank you for your five questions for on China one on one. It's I I so let's start with maybe an illustration of the q two in terms of what we expect in for the q two and globally for the sales. Clearly, we anticipate sales to decline before the rebound of q three and q four here, impacted by specific effect both in US and China. I know that your question is more on The US, but it's part of the q two decline is more in China. So that is why I will explain China before. In China, even if this quarter was very positive and we are highlighting a bit in depletion compared to the sell in, it's a small quarter. And overall, the economic context is still very complex. We face some additional pressure with new restriction or alcohol consumption with a government bodies that it's both imported spirits as well as value. So there's a global temperature with still a bit under some cloud. We continue to expect, and is the case, cash cash pressure among wholesaler, big one. And on top of the fact that there is even if we increase price in every lowest side of of the range compared to what we we have done in the past, the fact that the pricing environment is less dynamic than the the before in terms of price increase makes that the anticipation because we have many layers in China, you know, of of saving before you count on that to to anticipate price increase, reduce speed of restocking between the intermediate layers. So there is something which is laying off a bit additionally. On top, they need some early purchases in the older tires before the potential antidumping tires. So it's not very material, but with more in terms of confidence than in terms of math and compounders. There are also negative impact in terms of calendar three weeks later, two to three weeks later in term of math. And that's the reason why APAC sales should be should be negative compare compare to the previous year. On top, one thing I forgot by I like that during the the call, Mainland China is over performing, but compared to some years ago, we are still struggling in the Hong Kong, Macau, and China and Taiwan part. So at the time, we are much more important. So this is waiting also at the end of the day in totalling all the performance. US. US and the Spanish totally consistent with our guidance executed a strong start to the year, some of the plan. So the technical rebound is more or less there. It's slightly less than budget, more less less for the organic element, more to the situation, more linked to the air and DC California disruption. So more or less is budget top line. But depletion are not where we expected. So we need to be cautious that the set the second part of the year, also the 02/1952, need to be back at the expected budget depletion expectation or otherwise, the magnitude of the restocking with the sell in could be more agile. That's the reason why we believe in our guidance, but we are cautious on the short term in term of q two. Even if the the decrease of The US will be lower in term of decrease of China. So so far, I repeat, top line. Okay. We take the case, depletion, improvement, but not yet a budget expectation. So this is not enough. We need to do more. EMEA should improve sequentially versus q four versus and this is q one as well, but still not enough to be able to balance China and The US. So at the end, q two with negative. Q three, we believe in that, should mark a return to positive trajectory. Clearly, all will happen during the summer, September, October, some past month will be very, very important. So in terms of China and what we have done to offset what we think to do to offset the impact of the tariff. You know that with the new price undertakings, the net impact is 10,000,000 compared to compared to the previous estimation. The gross impact is more or less 55,000,000. So we have done 70% of offsetting, which is bigger that we have done in The US in terms of compensation mitigation effect. So the plan was not a very specific, only axe oriented in only one item. It was a mix of inventory optimization. So in terms of logistic and stock movement anticipating the the events. Price increase, we did a price increase in price increase at the end of the year, but a lower extent compared to the past. Channel optimization. Every time we are able to realize in terms of top line and better efficient and not a bit compared to expectation of direct channels, ecommerce, We are a cracking in term of top line. Some of bottom line might be sometimes different, maybe pre semi store, but top line is a bit. And then US has done it the previous year. China is the is happening right now. Cost saving linked to some I'm not so so sophisticated as others, so I wouldn't do it. For me, it's cost cutting. So I'm very busy guy. So it's cost cutting, lasting. So I don't know what is efficiency, but it's only cost cutting that will last and will and will DNIs our our bottom line. So at the end, more than two thirds in China or the impact is upset. It could have been even more aggressive, but we decided and Francois Marie clearly pushed already on that to reinvest part of that. Already in China to be able to speed up the recovery, if any. Because if we can say the negative side, the confidence is not yet there. Well, we know that the the time to market in term of reactivity, in term of speed to reaction is higher in China than everywhere in the world. So that's the reason why we will get the preferential eye in term of reinvestment in this part of the world. Pricing. Pricing can be model accurately at this stage for the future quarters. No. No. No. No. Clearly, I repeat, we increased that at lower extent compared to the previous year. So there was a minimum factor, but we are more focused on viewing the volume, sales, recover the confidence of the indirect channel, accompany the consumer appetite, then play on the spot. Last part of your question is duty free. We didn't consider it when we started the year, the the budget guidance, a duty free block for the full year, but only for the first first first four, five months. So today, the situation seems to be improving. Officially, it's opening, but, you know, there are some some some difference in terms of official statement at Pacific Corporation, in fact. So we hope that it would be fully operational as it seems. And in that case, clearly, it will help. Our guidance was not built on zero duty free sales for the full year, but only for the fourth five months. I hope I was long but clear. Very helpful, Luca. Thank you. Thank you. We'll now move on to our next question from Lawrence White of Barclays. Please go ahead. Hi, Luca. A couple of questions for me, if that's okay. You talked about the technical impact in Hong Kong, Macau, and Taiwan. I was wondering if you could just give a bit more detail on what those what what the issues are there, if there's anything quite as specific to those regions versus Mainland China. And then, secondly, if you could just give us an update on what's happening in California with r and d c. Did you have any luck with your RFPs to other wholesalers? And just is there any concern we should have of sort of stop being put into the market as somewhat discounted level from R and D team pulling out of that market? Anything we should be concerned about in California that might impact you in the future? Thank you. Thank you for your two questions. So it's not a technical effect. It's Macau, Taiwan, Hong Kong. So we highlighted that also in other occasion. But this time, the phasing of the q one nineteen twenty, we are still in a type of model in which we rely more on a direct channel in this part of the world compared what happened during the COVID, makes it more visible now. So it's not technical. It's more lasting. So this kind of change has been included in our long term plan, what we what it was in 2930, and it's followed to all of the year. So in a nutshell, minor China is supposed to recover what we have lost. But at the same time, we put specific investments in these three specific countries, Taiwan, Hong Kong, and Macau, to be able to get to grab the local market, which is there, and specific external condition, like reduction of the gaming industry. Hong Kong, we are up and down closer also with some of political situation element that wave of that during this year with Taiwan also being sometimes, not for us, but for some competitors, more consider as a CBT or transit land, makes that these investments are not getting the ROI in top line we were highlighting so very clearly. So it's not affecting the factor. It's that it's on our shoulder. We need to be able to be back of this plan on this specific land or it's it's more definitive ultimates that is not possible. We need to consider that we need to be able to recover that in Mainland China, I 9 and duty free. Part of that was also some inside trading with the region operations. So that's the reason why the duty free operators footprint needs to be there because contains many many sub layers of growth. It's not a technical sector. It's a specific weakness that we need to cope with and to resolve. California changed. So we are not happy, R and D, decided to stop the operation. California is very important state for us. We're one of the top three states, more or less 10% of our top line of value depletion. You see both debts many years ago, sub five, six years ago from Young's. And they've been actively assessing the ways to accelerate our development for several months because in the key state, even before the change, we need to be to to beat the market in California to be back to be in positive land. This announcement was a bad good thing. Simply act as a catalyst for a transition that was already underway. In the short term, it's a negative news. However, we already signed very quick reaction from our teams, a lot of the ping pong with the corporates, but really kudos to our teams to have a take all the the the the bull by the horns and and resolve the situation very the the soonest, the new contract will start in September for for for for a while in order to align California with the other open market. So, technically speaking, for the greater we'll acquire the real stock or NDC and some additional stock. We don't expect in California per se a lot of disruption as you as just already highlighted in the q one disruption was some million euro, but not major. They could have been old products and Southern Glazer is not a new guy for us. He's already there for Nevada, New York, Missouri, and Canada. So doing that, it would be increasing its weight more or less 20% to our top line. RMDC would be less than 50, so reducing that. So negative short term disruption element will be some negative impact more because when you change type of operation, the DIM management change, you have some technical adjustment. But if you think more medium to long term, the California performance was a question mark and need to improve in the future. What is the main driver of that? The Southern Glaser, we thought and we think it is more plug and play than other competitors for the key period of the year, which is O and D. FC portfolio will be part of the main division and exclude other the front front line competitors that are not included in our in our footprint. We expect some negative impact in q two. A q q one was five to 6,000,000. It's too early to be accurate on that. It is more in terms of indirect operational disruption and day to day leakages than a specific will of the new wholesaler to say, I need to realign the stock. You are not this kind of of of situation that is that is declined right now. So I was very analytical and very clear with you, I hope. That's been Appreciate it, Luca. Thank you. We'll now take our next question from Albert Mundy of Jefferies. Your line is open. Please go ahead. Morning, Luca. Morning, Celia. So two questions, please. The first is coming back to your guidance of mid single digit growth for the year. Are you able to share with us what your budgeted expectation is on depletions? Does it need to be a material improvement relative to the down low singles that we saw in the first quarter? And then the second question is, I think it's now one month since Frank's been in the seats. Any early perspectives that you're able to share? Perhaps maybe give a bit of a flavor of what he's been doing in a perhaps change of emphasis and strategy, that would be very, very helpful. And what what is the third? The guidance of top line? So first question is, what's your depletion expectation for the year to get to mid single digit revenues? And then the second question is, in a new CEO, you know, one month into his seat, sort of what he's been doing. And Okay, sir. I need to think about this. Okay. So with guidance, depletion, and frankness with the the the the way. And and Thank you. Okay. I will so clearly, Frank will be with with you all at the November for the I'll share results. It will be far more complete to what I described. The first takeaway that I already said is that in a world, the only way is up to top line dynamics. Top line dynamics. Top line dynamics. It means that all the compounders, all the investment need to be back to a a ROI. We need maybe to be improved in terms of reaction of the top line because everything becomes much more easy and natural if the first line of the profit and loss is not declining. Now he has the luck to arrive in the first quarter up after eight quarters on negative results because I did highlight that, but I thought of your question to highlight that. The first positive after rate, so it was close for me. I have a a big quote. Now it's summer, I took up the quote. And clearly, he wants to continue to to to to spread this positive concept of supply. Then other point, it will be declining that, but it is a it is a very experienced professional, clearly, a huge track record of transformational experience. Is installing a positive electricity and pressure inside the company. Top line is the way. Second point, guidance. Let me let me allow to to go beyond your question for a while and talk about the guidance in terms of profit and loss, and then I'll be back you know, the patient because it's consequence. So what we are seeing today is that top line is for us mid single digit. So more or less 5%. Company consensus company, not the visible ALSA, is more or less already in line with the guidance. 3.6, four if you take the median. So we are there. On organic comp, it is mid to a single digit decline, which is an improvement. But if you consider clearly in a in a very mathematical way, the company organic consensus before this call, it was already at minus 4.5. So you can say that our upgrade was already modeled by you. And this point, I'd like to dig in and to explain that I respect the fact that you can modelize something different. That's very different compared to what we highlighted at the June. We said that net of all tariffs will be between mid twenties, nine of 15 to nine of 19, and company concession, minus 4.5. So already, you took into account overall, not you not you, Jeffries, but all all of you, an improvement in the situation and clearly on the tariff side. Today, we reexpressed in a very clear way the tariff impact and try to manage side to manage state. So what I'm saying that today, your consensus even before our call is more or less put on for the wrong reason, allow me that, is a bit on the higher side of the range and need to adjust also the ethics impact on copper because it's a bit on the lowest side. You have concessional minus 15, minus 15 to 20, but there's some volatility. So overall, the guidance for the technical element should be in this range. But, what is important after the the score battle was between us intellectually in terms of what kind of footprint you take into account for the tariff. Now back to back to the underlying compounders, what need you need to consider. So at this point, let me remind what are our our expectation for the year to be able to deliver to deliver to deliver the the mid single digit guidance. Let's start with the dynamics of top line of quarters. Q one, done. Basic. Sometimes, we're within budget, sometimes better than budget. Better budget is China, but overall done. Q two, negative. Slightly behind budget so far. Q three and q four would be growing based on the the assumption the following assumption. If depletion are in line with budget, meaning there will be a catch up in q two, q three, and q four, strong growth. Very strong growth. Strong double digit. If less than that, we will analyze that during this quarter and talk also with you. But clearly, the top line will be declined because the Ashmeade Hussein will not be there the same strength. So we might eventually switch from a strong growth, double digit, to a high single, mid single. We will decline that. The situation translated very clearly of the actual depletion value in The US, meaning that we are not doing the budget right now. It's more on the risk side. APAC, what happening? What is we are putting in place? Seems that we might have some positive surprise. Be cautious. The budget is cautious, consider the context. So it might be also something there to offset, I don't know if totally, the risk the inherent risk that you can consider The US as because of the lack of speed compared to the budget in thermal depletion. In a world, less complicated. If you want, you have some risk in The US, some upside so far in China and rest of APAC. With some additional cherry on the cake, we hope, with the duty free and dynamics of new channel like ecommerce. New not new more anymore, but direct channel. EMEA will be the the the the gap. We hope that will improve. And if you have their back or the budget assumption also slightly less, all that at the end of the day will fit with the mid single digit top line impact. Bottom line, risk is compared to mid to high single digit decline. So far, no. And I repeat, first statement of the new CEO is dynamics on top line and move move move on top line. So I expect him to be also very clear on that with you, with his priority November. The first sign, I clearly own a increase of electricity inside the positive tension, if you want. Electricity is not the right word. I hope I answered it in a in a in a clear analytical way. Very clear. Thanks, Luke. And and just if the the tariff situation in The US is not 30%, I mean, do you think philosophically about that potential tailwind that might come, you know, relative to existing guidance? Does that get reinvested or, you know, does that use to absorb volatility? I mean, how are you thinking about that potential tailwind? But, you know, clearly, we we don't know what the outcome is at this stage. I can't answer because I will we will need to discuss at comics level and the Franco Marie decision will be a very important one. All of the clearly, we get positive. Everything equals news for the bottom line. But then, once again, top line depletion needs to be minimized. So I don't know if it be a fifty fifty this decision. It will be offsetting some additional risk on your bottom line. I don't know. It's too early for it for that. But, clearly, we will not be stubborn and looking only at one picture. We'll be a lot of what if and ping pong. I think it's better than me in ping pong playing ping pong. So I would be in a very in a very complicated this the discussion because what if we do do that? What if we do do this one? So it would be a adage, but a positive one. It's a it's a dynamic one. Thank you. We'll now take our next question from Andrea Bisaki of Bank of America. Please go ahead. Yep. Hi. Hi, Luca. Two from me, please, which bit of a repeat of some of the things you said. I just wanted to clarify a couple of things, please. The first one on on on The US on the how how you're thinking about depletions going forward and your and your guidance now. Your depletions in The US are down around low low double digit, you said now, which is clearly quite quite an improvement from where you were six months or so ago when it was more more than 20%. You're performing more or less in line with the industry now, But you said you're a bit behind the budget. So does this budget does this mean that you're you were expecting or you are inspecting you are expecting for the second half a continued sort of improvement in that rate of decline? I maybe that in h two, you're, yes, still down in terms of depletions, but nowhere near what you were before. And then sort of similar to this, but just to understand China a bit, depletions there were were clearly strong in q one at high single digit. You're outperforming the market there. You called out the the reasons why q two would be softer, but it all seems headwinds that are mainly related to shipment phasing or calendar effects for later the later mid autumn test, for example. And you and what you just answered now, you're you're sounding fairly confident about China saying that it could potentially offset weakness in The US. So how yes. What what gives you this this confidence in in the in the momentum in China about the, let's say, the positive depletions continuing there? And on the government ban on alcohol in sort of official meals on that. You you touched on it very, very briefly earlier. Could you just confirm I mean, this this isn't very material, right, for for cognac or or or is it? And how is it affecting your business? Thank you. Thank you. Thank you, Andrea. So in terms of depletion, US at the group level is not double digit negative. It's high single digit negative. Sorry. Konya, I meant. Yeah. Sorry. Yeah. Konya. Konya. Yes. But we are also do the we unleash the air positively with gladiators in terms of the Konya. So so it is less balanced between in the between them, but at the end, it's high single digits. So clearly, the budget was was based on a better depletion, and we are doing all we can do also in terms of investing more below the line, more linked to the point of sale with a stronger reactivity to improve that. Because I I didn't say already, but I repeat what the stock in The US is linked to positive depletion. Even if we are improved, we remain in negative land. If we are doing maybe now better than the competition, it is not positive. So we need the stock. And this guidance is build with rebuild of depletion in the second part of the year more in the second half, you know, the first half. But so far, we are not double digit negative, but high single digit negative. Okay. This is more difference, but very important. In in in terms of China, it is more a technical impact in the first of all for the selling of the q two. And our assumption is that if this depletion rhythm stronger and bigger quarter remains, if we are able to beat big time the market in in in direct channel every time we touch the consumer, the company will be reinstalled and will be a q three and q four, which might be bigger than budget expectation. All in all, this could be enough to set top line of The US. I don't know. But for sure, we'll be fit with the mid single digit organic growth at group level. So the the confidence is linked to the fact that the reactivity change on dynamics linked by the investment and dynamics linked to the overall confidence as far more expected. It's gonna be a in China than than than in any other part of the world. Good. Got it. And then just a word on the the government alcohol ban. Mhmm. It is something this is waiving more on the company that will sailor a bit on our AMP because direct AMP for testing and specific dinner are decreasing a bit. So you have to reorientate a bit more the we profit of that to improve the investment in ecommerce channel. So you need to be very reactive. And there, once again, I I I never stopped to reiterate that. The the biggest weapon we have in China is the team. One fantastic, wonderful team. Okay. Got you. There you go. Thank you. We'll now take our next question from Mitch Gillette of Deutsche Bank. Your line is open. Please go ahead. Thanks. Morning, Luca. Sorry to ask the same question again, but I'll try and rephrase it. In The US, are you assuming positive depletions in two h behind your guidance? That's my first question. And then my second question is on BS and the push for that in in Africa. You know, Remy Martin stopped doing BS a few years ago. Is there an opportunity to do that more broadly? You you sounded like you were saying specifically not. But I guess, the challenges to cognac in The US, you know, would would you ever consider doing the SD card in The US? Thank you. I'll start with the second one. No. So the SD is on the SD stage specific for Africa. And at the stage for two countries, South Africa and Nigeria. And so far, clearly, this project that stopped already, clearly, before something media arrived or actually a project like that as twelve, eighteen months of gestation of of intellectual preparation, it is linked to Africa. For many quarters, we lose market share because VSP and our VSP was not the right weapon, so we installed that. At this stage, it is not meant to be re re re re resale or to be proposed in The US, coming back to a structural down trading of the cognac offer falling down on the 2,008 declining parameter of ranges. At this stage, it's absolutely out of question, only in Africa. In terms of the assumptions so thanks for the question because I think it's important also to less words less noise from my side and more figures. Value depletions in The US in terms of building blocks for the full year at budget time were quite modest. So meaning, mid single digit in value based on strong h two and more or less flat h one. So we modelize that. And as I said, at this time, you remember two or three times, Trevor stealing asked the same question. What does it mean one point of depletions in terms of automatic restocking? Meaning that the automatic restocking and resetting with the compound of depletion at this positive spark, the organic stock was an impact on CDN, which is probably larger. So between 20 to 30,000,000 could be even more, you know, euro. So it is enough to realize a mid single digit. Sometimes also low to mid single digit value depletions at full year. And the model are the the model was built with a strong so double digit value depletion increase in h two. So far, I repeat, top line is there compared to the budget expectation. Value depletion in The US are running behind. Is it still time we can redo what we are highlighting the guidance to be able to catch up? Yes. There is some risk? Yes. Can you offset that with the other part of the world like China, missing the list of clients? Yes. But just to make sure I've understood, apologies to follow-up, but you you assume strong growth in the second half in depletions given that you're expecting, you know, you're budgeting mid single digit value growth across the year. And it looks like, you know, one eight is likely to be down given the start you've made and and where you are in two q. I disagree because the balance the balance between depletion and the sell in effect in US will be much bigger. So the dynamics between depletion and selling is very decorated in terms of in terms of consequence. So mid single digits, so let me say, as an example, plus four, plus five And so a group level, if you are realizing high single digits in a in a in depletion in value in The US, it's much more in saline. So automatically, you have a a credit impact of the the the client of the of The US. And budget expectation in China that they were more moderate. And and I hope not to be wrong, but I think that situation is not running very bad at this moment in China. There are some clouds, but there is also some sun under the cloud over the cloud. Okay. Any more question or oh, we're on mute. What happened? I'm sorry. We'll now take our last question from Trevor Sterling of Bernstein. Please go ahead. Was Morning, Trevor. Morning, Trevor. I was waiting for you. You you were chewing on the subway. You were on the subway. I'm no. No. I'm still here. Just took some time to get out of the underground. So so two questions two questions, Luca. And for once, it's not about stocking and destocking and depletion and shipments. Thinking about consumers, Luca, Either you mentioned that in China, the direct channels are looking very strong and there's some rays of sunshine there as you say. Have you any color I know it's really difficult to say what consumption is actually driving this. Is it consumption outside Guangdong? Is it people buying cognac via direct channels and then consuming it in restaurants? If you if any color you can give there, that would be great. And then on the other side, in The US where the value depletion is still weak and clearly that's also your major competitor is still very weak. Does it make you start to worry that there's a bigger structural factor here at play in The US such as, you know, African American consumers switching to tequila or, you know, again, any color you can give on consumption trends in The US would be brilliant. Thank you for your easy question as usual. So on trade in China, it's still very weak for us. So when you say we over perform on direct channels, direct channels link to a model which is not really on trade, but it's more penetration direct consumer. We use our ecommerce also mainly in the past also to penetrate the new region. Now there is a the company is already is already there and b two b part is under perform compared to the b two c, the b two c part of ecommerce. So in terms of int, it is more skewed cognac and non cognac. It is still more skewed to to cognac. Club playing the the lion part. The plus 14, the in very depletion is is is is linked and correlated to that. There is some change in term of format. Sometimes it's a little more skewed to do a small less format and to and in terms of the dynamic from a profit and loss, as you remember, gross margin is lower in this in this type of direct channel, but bottom line is bigger because of less of specific topics. The other part of direct channels, like PCD, is clearly more accretive even if they belong or or into a specific man to man relationship. But once we have found the guy that is able to to to realize more than the breakeven point in term of the number of bottles, it is very totaling profit like hell. And the last one is very profitable in terms of gross margin, which is direct recently store that is more moderate and temperate in terms of bottom line return. Today, with the boutiques and the free central in China, we are profitable in some of them, less profitable like everybody when you have the biggest investment. But in terms of EBIT or consumption, direct channels are more skewed non cognac, not really visible, more in the cocktail bar environment, but it's still very low, very in terms of penetration. And it is more had this part, the specific wholesaler that are driving to cocktail bus, the specific part of their intention more than that. So still something to do. The last the mother of all question, Tyler. It is a longer cycle of or is the semi structural. Register rigid the cycle or semi structural. I don't know. This cycle stand a bit too much for for my taste. It would be an important year to acknowledge that. It is the same question Frank and Marie ask asked as well. And nobody is the crystal ball to answer very clearly. So far, we are still in the dynamics of historical pattern, stochastic analysis of cycle. Clearly, for for the third year in a row would be a global market fall with all signers going negative. We need to clearly address this global question as well. And also this part of the reason, we raise we decline not decline. Not the right of verbal. We we offset them with the the long term guidance has been has been removed. It is an important question. So far, everything we are doing is still on the sentiment, the conviction. It is a long cycle, but appetite is there. Shale of us is bigger than ever. For Emilastin, it's improving. We are number two both in US and China. All the soft elements of the positive elements are there. Every time we get in touch with consumer, we we beat competition. I cannot deny, we are still in negative land. Also, the latest figures in Nissan's final sell out are not are not nice at all. Not only for us, for everybody. So the question is more than legit legitimate. So it is a very long cycle with the same structure. This year, end of the year, everybody professionally to draw a balance and and answer clearly to this question. So far, everything we are doing is coping and considering that is a long cycle, but it's a cycle. It's not a structural lasting impact. Super. Thank you very much for your perspective, Luca. Thank you. Thank you. I'm now happy to hand it back to Luca for closing remarks. So thank you for your interesting question. It was a positive quarter. So I'm very proud because at least after eight negative one, there was some plus. I I I lost the the others to do that. But the next one will be negative. But for the year, we are clearly committed and we we we believe in what we highlight in the guidance of top line and bottom line. So see you soon and talk soon October for the second quarter. And clear, the most important meeting will be November with the presentation of the ICO result. And clearly, our new CEO on stage to answer to all your question and to give the light for the for the remainder of the year and the future year to come. Thank you so much. Have a nice summer, and and take care. Thank you. This concludes today's call. Thank you for your participation.