Hello, and welcome to the SEB 2022 third quarter sales and financial data. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one at any point during the call. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand over to your host, Stanislas de Gramont, CEO, and Nathalie Lomon, CFO, to begin today's conference. Thank you. Good afternoon, everyone. Stanislas de Gramont speaking. Thank you for joining us for this call. I will be taking you through our nine-month sales and financial results together with Nathalie Lomon, our Chief Financial Officer. Without further ado, Nathalie, maybe you wanna get us started. Yeah. Thank you very much, Stanislas, and good night, everybody. We're starting with the group sales review. Moving to the next slide, please. Thank you. In the first nine months of 2022, the group has recorded total sales of EUR 5.56 billion. This is reported when compared to 2021 -0.2% and -4.3% like-for-like. It's a trend of continuous growth with the exception of the nine months of 2020 that is reported on the right-hand side of the slide. In the third quarter, the group has reported sales for EUR 1.894 billion. It's -3.4% compared to last year's same quarter, and -8% when compared to last year like-for-like. It is an increase of 6.6% when compared to 2019. Moving to the next slide, looking at the breakdown of our sales between consumer and professional. First, focusing on the consumer business. The group has reported over the first nine months, EUR 5.566 billion. It's -1.2% when compared to last year, and EUR 1.72 billion in the third quarter, -4.2%, -8.8% like-for-like. On the professional segment, the business has reported EUR 504 million of sales in the first nine months. That's close to 11% more than what this business has delivered in 2021, 6% like-for-like. In the third quarter, EUR 174 million, that's close to +6% and stable like-for-like basis. If we move to the sales bridge and understand how sales has been developing over this first nine months, you will see that the total sales reported is very close, as I was saying previously, to what we delivered in 2021. It's a slight decrease of 0.2% of sales, but with a strong contrast between organic growth -4.3% and currency effect +229%, most of this coming from the US dollar, Chinese yuan, and Russian ruble appreciation when compared to the euro, in which we are reporting. Over to you, Stanislas, for a breakdown of. Yes. I'll take it from there and maybe with a pretty unusual way to look at the business. As you see, we have a -0.2% reported growth, which is essentially flat. What's really interesting in this year is the contrast between the performance of the various parts of the business. I'll start maybe with the right-hand side, with the other countries which weigh -0.5 negative contribution to the overall group's performance. To say that, generally our business is very resilient, our markets are resilient, our activity is pretty stable despite a difficult context. I mean, I won't elaborate too much on the economic context in the world nowadays. What's more interesting is to see that we have in this business, in these first nine months, China weighing positive 3.9% growth to the total group, professional business weighing 0.9% positive. Russia, Ukraine, of course, weighing negatively minus 1 point of growth, and specifically France and Germany weighing negatively 3.4 points of growth. What's really interesting in these first nine months is that the performance of the group is very uneven, very contrasted, and I will walk you in the next 5, 10 minutes through these various geographies and activities just to share with you the way business is developing. Starting on the next slide with France and Germany. France and Germany account for over 20% of total group sales. Over the first nine months, our sales are down 17%. That comes after a record growth of 21% year to date in 2021. If you remember, last year, we were really satisfied with the performance in these two major countries for us. I think the first effect is that we are up against a very high historical level in France and Germany. In particular, there's already been a more substantial rebalancing of consumer spending out of our activities in those two markets than in other markets. In fact, the market share to date in France and Germany is down 7% year-on-year, when the overall total market, if we average out all the geographies of the world, is fairly stable. The second specific point on this business is that we have, in 2021, very large loyalty programs in those two markets. That weigh EUR 61 million turnover less in 2022 than in 2021. That accounts for itself for 5% of growth in these two geographies. That's probably, by the way, a side effect of those LPs being very high last year, impacting some overconsumption that was specific, but that's a qualitative comment. The third element is a category mix effect. You know that small domestic appliances is made of cooking categories and non-cooking categories, where in fact, cooking categories were the ones that benefited most from the pandemic and the lockdowns. Why? Because people stayed at home and they overconsumed cooking categories. In fact, when the total market is down 7% year-on-year, the cooking market is down 10% year-on-year in France and Germany. As a matter of fact, our exposure to the cooking segment is 25 points above the market exposure. Cooking is 75% of our business in France and Germany. It's only 50% of the market. As a result of that, we see our sales in cooking categories down 19% year to date, when last year the growth was 27%. Difficult market, a difficult category mix, with an overweight of group sales in France and Germany on those categories that performed best during the COVID days. Non-repeating loyalty programs. Last, a very specific situation in France with a strong destocking in the retail trade, which increases the exposure of trade brands to consumers, and therefore, the short-term market share of trade brands. That's a pretty specific French phenomenon that we observe in our categories. We'll come back to that if you need. Moving on to the next slide, and I won't spend too much time on it. That's the major sales decline we observe in Russia and Ukraine. Those two markets were EUR 384 million in full year last year. Around 5% of group sales and our year to date sales are down 23% in reported or 33% in like-for-like, when last year they were growing by 31%. Not only we are losing a substantial chunk of the business, around 1% negative impact on the group's growth, but those two countries were substantial sources of revenue growth and profit growth in 2021. Later on when we see the EBIT bridge, we will share with you the fact that France, Germany and Russia, Ukraine are positive contributors in terms of mix to the profit realization of the group, and therefore that weighs on the profit realization. Other than the activity parts, we have some very positive news starting with China. China is the group's number one market, and we keep showing positive momentum in China. We have year-to-date sales at 5.5% organic. Obviously 16%, like reported, but that's because of the strength of the yuan to the euro. When we look at that, well, the first comment is that those sales are at 5%, 5.5%, and that's in a pretty changing macroeconomic environment. I mean, the news are full of negative ideas with China on the lockdown or the economic performance. We see our sales extremely resilient. They're extremely resilient because we have a strong push on e-commerce as we had for many years. E-commerce is now 67% of total Supor sales. More importantly, we have strong and stronger positions in our main strongholds, kitchen electrics, and cookware. But at the same time, we see some developments in large kitchen appliances, home and linen care. A strong performance in a volatile macroeconomic environment. That is also due to the fact that Supor significantly outperforms the market. That is coming from a continuous policy of innovation and product offering extension, and also the online sales development, in particular with strength and presence on fast-growing platforms, Pinduoduo or TikTok. If I move on to the next slide. I was mentioning market positions. I'm speaking too far away. Is that better here? Okay. Talking about market positions. As you know, our two biggest categories in China are in kitchen electrics, where Supor is number one online, way widening the gap with the number two. We are stronger and stronger offline. The gap with the number one is now in We're getting very close lately. Equally on cookware. On cookware we are the undisputed leader of the market, both online and offline. While being at least twice the size of our contender, we are still strengthening our leadership year-to-date, controlling almost half of the offline market. China goes from strength to strength. China is delivering what we expect from it, which is growth from 5%-10%, and that is despite a global macroeconomic environment in China that some people describe as not supposedly very interesting. Moving on to the professional business. The professional business posts 10%. Sorry, 6% growth like-for-like. I'm confused. 10% growth like-for-like year-to-date, actually. Let me check my numbers. Yes. I'm being confused. That is a very satisfactory performance. 6% like-for-like, sorry. Why is it very satisfactory? Well, we have, first, you know that this business is made of three activities. We have major contracts. We have, I would say, core machine business, and then we have service and maintenance. Core contracts come and go, and we have a very high base in 2021, in particular in the U.S. and the U.K. If we take that aside, the like-for-like growth in core business is up 6% in Q3 at 15.4% year-to-date. That comes from something we described back a year ago in the midst of the COVID crisis. We said we wanted to expand our customer base. We now have a much larger and steadier customer base. We said we wanted to grow service, and service revenue is up double digits year-on-year. Last we said, the acquisition of Curtis would allow us to grow the business with different segments in the United States. We see Curtis achieving double-digit growth in the U.S., gaining some market positions. Talking on deals, we have a good ramp-up of the Luckin Coffee deal in China. We know that Luckin went through highs and lows in the last two years, and Luckin's back in business, and we are installing new machines in Luckin Coffee in China. We see a strong order book for Q3. We see professional business on a good track, which is double-digit growth performance year-on-year this year. Beyond professional coffee, we have continued development in hotel equipment in Q3. Still a small business, but a business that is now delivering positive growth year-on-year. Last but not least, on professional, if we go on to the next slide, you've seen late in July that we've acquired Zummo. Zummo is a leading company in the design, manufacture, and distribution of automatic juicing machines. A recognized expertise of 130 employees, 15% on R&D, one factory based in Valencia in Spain. Revenues around EUR 25 million in 2021. Strong growth. That allows us to penetrate a new segment in the professional sector that is complementary with coffee machines. You'll see here a picture of fast food restaurant with side-by-side Zummo juice machine together with a WMF coffee machine. It is not made up. This is a true restaurant with a true business scenario. That's what we see in this acquisition. We see complementarity of the customer base, both the ability to develop synergies, but also the ability to access to new consumers with these acquisitions. A lot of potential and a lot of prospects on this business. This is the way our sales have developed in the first nine months of 2022. As you see, a very contrasting development with some parts and some places going very well and some other parts are more difficult. I hand it back to you, Nathalie, to take us through the financial performance in the first nine months. Thank you very much, Stanislas de Gramont. If we move to the next slide, sales, we have commented at large. Operating results from activity stand at EUR 319 million compared to 528 in 2021. I will walk you through the bridge between those two numbers in a few seconds. In the third quarter, the group has delivered EUR 120 million of operating results. At the end of this third quarter, the net financial debt stands at EUR 2.581 billion, and I will give you further explanation on the trend on the financial debt as well. If we move to slide 17, with the EBIT bridge and the explanations between what we have delivered last year in the first nine months and what we have delivered this year. I will start on the left-hand side of the chart. Obviously, with a negative impact coming from lower volumes both this year when compared to last year. For you to know, France and Germany would account for roughly 50% of this negative impact with significant weight on the profitability of the company. Moving to price mix, it is a very positive impact. It is coming from the price increases that we have been facing to the distribution to offset the increase of cost of goods sold that I will comment in a few seconds. It is also coming with a positive mix impact. Actually, mixed impact was stronger at the end of the first half, and it's not that strong in the third quarter. Once again, it is coming from the fact that our business in France, in Germany, and also in Russia who are three very profitable countries for the group is lower than what we had delivered in the third quarter last year. This has a negative impact on the overall price mix for the company. You see the increase of cost of goods sold over nine months, so a significant increase. Again, we are compensating as to price and mix. Most of it is coming from raw materials components that we're sourcing. We're also impacted negatively by the sea freight when compared to last year. Under-absorption, we have made the decision to slow down production in our sites to help reducing the level of inventory. We have a limited but still an impact of energy costs that is actually well, more or less EUR 15 million, but it's worth noting it. Growth drivers and selling and administrative expenses, they're very much in line with what we had delivered at the end of the first half, meaning that the third quarter expenses are really under control, very close to what they were in the third quarter last year. Very much in line with the ambition that we have to keep them both growth drivers and SG&A at the level of H2 in 2022. Last but not least, currencies. It's -EUR 14 million on the operating profit. It's a combination of positive impact on sales, as we have seen at the beginning of the presentation, plus a negative impact coming from the short position that we have, as most of our purchases are denominated either in US dollars or in Chinese yuan. Moving to the net debt. Net financial debt stands at EUR 2,581 million. In the third quarter, we have delivered a slightly positive free cash flow, which is good news when compared to cash flow consumption that we have witnessed for the first half of the year. We still have a fairly high level of debt. It's coming from the level of inventory that are linked, still linked to the stock buildup that we have done in 2021. Remember that at that time, we were building inventories just to make sure that we would have enough goods to supply to our customers because of the low quality of supply chain and some risk in supply of components. This is a decision that we had made at the end of 2020, was still valid in 2021, still valid at the beginning of the year. As we have witnessed in the second quarter, a slowdown in demand, we have decided to reduce our purchasing, reduce our production, and this has obviously an impact on the inventory. It could take a few months or few quarters to see this number going down. The other items that have impacted the net debt in this quarter are the acquisition of Zummo, as Stanislas mentioned. You may recall that we have also done a bit of share buyback in the second quarter of this year. Still the financing structure of the group remains very healthy, well-balanced. I remind you that we do not have any covenants on our financial debt, and that a very, very significant part of the financing for the group is made on a fixed rate. That was it for the financial presentation. I'm moving to the next section, which is about the consolidation of the group business in the DACH region. This is a plan we've been working on for more than one year, and the purpose of this plan is to make sure that we have the right organization and the right setup to foster growth and to deliver more synergies in the DACH region. For you to know, DACH is the first European market for the group, and it's actually the second largest market for the group after China, with the combination of Groupe SEB DACH and WMF. We are implementing a consolidation of the activities in this region with an organization that will consist of a unique market company for the consumer business in DACH that will sell at the same time the SEB brand and the WMF brand. We will have also one strategic marketing entity also to deliver and to grow WMF product range and brand on a worldwide basis. Having in mind that WMF is the premium brand for Groupe SEB with both DACH. We will have also in Germany a single center for all support functions, with the exception of accounting activities that will be transferred into our shared service center in Warsaw. Last but not least, of course, the WMF business stays at headquarters in Germany. Geislingen, which is the place where we are currently doing this call tonight, will become the headquarters of Groupe SEB in the DACH region. The plan is to implement the first measures of this consolidation in January 2024 for leaving enough time to have all the discussions with the works council. The cost of implementation is assumed to be around EUR 35 million, including EUR 25 million that will be booked in 2022, not in the operating profit, but in the net results of the company. Thank you, Nathalie. I will now share with you in a couple of slides the outlook for 2022. Maybe starting with understanding what went on in the summer. Again, a strong continued performance in professional coffee and in China. Russia, Ukraine as expected. The other markets, soft but in line with the market performance despite a context that in this slide has been worse and we have some bad news in France and Germany. This is what leads us to revise our guidance. Slightly on the sales front, we were talking of sales stable versus full year 2021, around EUR 8.059 billion. Now we see sales landing around EUR 7.9 billion. We mentioned an operating margin from activity between 8% and 8.5%. The impact on the volume and on the geographical mix of France and Germany in particular leads us to revise down our estimate to 7%-7.5% operating profit for the full year. That assumes a Q4 sales trend which would be in line with what we've lived through in the third quarter. We will step up the decrease in Group's operating expenses that we are initiating in the third quarter. We see headwinds, raw materials, freight, and foreign exchange of circa EUR 300 million changing in content but unchanging the total sum versus what we saw at the end of July. Maybe as a word of conclusion, I would like to share with you, if you go to the next slide, some few considerations. The first one is, 2022 is a perfect storm. We are up against huge 2021 comps. We grew sales last year by 16%, EUR 1 billion ahead of our peers. Profit was EUR 813 million, first ever above EUR 800 million. We have ongoing headwinds, EUR 300 million this year, and we had also already EUR 300 million last year. We've absorbed in the two years close to EUR 600 million of headwinds. A consequence or a side effect of those two first points is that we are facing a difficult situation in some key markets which affect the balance of the group's performance. That said, we also look at the promising nature of our markets. In consumer, we see that our markets are very resilient globally, despite very high levels last year. That tells us that our markets are not so impacted or affected by economic crisis, inflation, than other markets, other discretionary good markets. That is great news on the consumer. On the professional market, we knew that when our customers reopen their doors, we would restart our activity of selling and servicing machines, and that is being confirmed quarter after quarter, and we see all the groups stronger than ever. Finally, I think we are very confident in the strength of the group's business model. We know that we have a business that is balanced between consumer and professional, between mature markets and between emerging markets. We have a span of categories that sometimes affect us, as we've seen in cooking in France and Germany, but globally allow us to grow sustainably at or above market levels. We are, despite a difficult situation in 2022, very confident in the fact that the current business model of the group is where it should be, and that the strategy delivers long-term and midterm results. Thank you very much for your attention. We've taken 30 minutes. We have now time and room for your questions. As a reminder, if you would like to ask a question or make a contribution, please press star one on your telephone keypad. The first question comes from the line of Charles-Louis Scotti of Kepler Cheuvreux. Please go ahead. Yes. Good evening, everyone. I have three questions if I may. The first one, I understand the cut in the guidance is mainly explained by lower revenues. Do you have good visibility at this stage on your cost base for this year, for the balance of the year? What explained the range in terms of the profitability target for the full year? Second question, on the headwinds on profit. It seems that raw materials and SG&A costs have peaked in 2022. I won't ask you for a margin guidance for next year, but could we reasonably expect those headwinds to become tailwinds to your profit, going into 2023? My third question, on the destocking. It seems to accelerate your top line drop this year. Do you have an idea on how far we are in the destocking process of your client? Should we expect destocking to ease at some point in 2023? Thank you. All right. Thank you very much. Nathalie will cover your first two questions, and I will take the third one. Nathalie? Yes, hello, Fabien, thank you for the question. If you look at the cost base, and I will start with growth drivers and administrative and commercial expenses, we have the very strong ambition to not grow those expenses in the second half when compared to 2021. We still have the opportunity to adjust some of them, especially the growth drivers that could depend clearly on the level of sales that we think we can deliver by the end of the year. As far as, you know, cost of goods sold are concerned, we have a good understanding of the cost base. If we were to answer your question, what would explain the range in the guidance that's mostly related to sales, we have made an adjustment of the guidance saying that we plan to deliver a bit more than EUR 7.9 billion. Around EUR 7 billion. Around EUR 7.9 billion. The range in the guidance depends on where we will be around this 7.9. When talking about the headwinds, tailwinds, you're right, we see some of the items that are impacting negatively the P&L that could ease a bit in 2023. That could be the case for sea freight and for some of the raw materials. You should also have in mind that we have a short position or exposure on US dollar and on Chinese yuan. Despite the fact that we hedge in the long term, we may have a negative impact from that as the hedge rate that we expect for 2023 should not be as favorable as the one that we had in 2022. Just to make a long story short, we are just starting, you know, the budget process. We need a bit of time to work the numbers and see how things will go on in 2023, and we'll be able to give you a bit more details regarding 2023 once we have completed the budget process. Thank you, Nathalie. I will take the third question. The destocking has in fact impacted us somewhat this year. We see we are getting closer to nominal inventory targets in our retailers. I'll talk about France in a second. I would expect that effect of destocking, retail destocking to be probably closer to the end than closer to the start. Obviously this depends on the dynamics of the markets. I mean, it's clear that destocking is a factor of how much you buy in and how much you sell out. When the markets are less dynamic, it takes a bit longer. I would say that we are probably closer to the end than to the start, with maybe France that is slightly delayed, not because of a particular behavior, but because of the fact that the market is less dynamic than it is somewhere else. I don't expect us, come Q1 next year, to still talk about destocking as a major effect or an impactful effect on our business. Thank you very much. Do you have any other questions? Yes. This is Fabien. Thank you. The next question comes on the line of Alessandro Cecchini of Equita. Please go ahead. Hello, everybody, and thank you for taking my questions. The first one actually is on your performance in other countries, Europe, of course, excluding Russia, Ukraine. It seems positive in the third quarter, so I would like to better understand this kind of trend and the drivers. Specifically also talking about this area, other countries, including of course Russia, Ukraine. If I am not wrong, there is a new regulation forbidding large and small appliances to be shipped to Russia starting from January 2023. I would like to better understand your point on this, if it's correct. Secondly, my third question, sorry, is about your hedging in terms of raw material and components. I would like to better understand your current policy that you have for this. Thank you. Thank you, Alessandro. I will take the first two questions and Nathalie will cover the third one. Starting with the second one, I'm very surprised by this ban of imports of Small Domestic Appliances to Russia from January first. We haven't heard about it, so I will further investigate and but I would be very surprised of that. It's not something we are aware of. On your first question on other countries, it is very contrasted and we have some countries which perform well, some others that don't perform well. UK is going through a very nice year. Italy, Spain are good. We see Poland very good in the first 4 or 5 months of the year, not good in the last 2 months. I think it's very contrasted and it's very poor performance, and this is why I didn't elaborate on any specific trend. What we see maybe just to help you is the bulk of the underperformance in Western Europe is driven by France and Germany. If I was picky, I would say Belgium as well, but usually we see the same trend in Belgium as we see in France. In the Central and Eastern European countries, we see as usual a stronger dynamic than in Western Europe with inflation that is a bit higher than it is in Western Europe. Overall, I think, I mean, when you look at it from some distance, you see that the other countries are probably going through a curve of maybe less dynamic than they are used to be doing. At the same time, the costs are very high, I think, in Eastern Europe. Some markets we were at 40% growth year-on-year last year in 2021. It's difficult to draw any negative conclusion. As you say, they are resilient. They are positive for several of them. That just tells us that our industry is resilient and resistant to negative economic situation, not to the economic crisis. Nathalie, you wanna cover the point on the hedging? Yes. We have a long-term strategy regarding hedging, and that is valid for currencies and also for some of the raw materials that we supply for the group, being aluminum, nickel and polypropylene. Those hedges are placed over time. Obviously, it is done in a way to help our business and our markets have enough time to adjust their pricing and not see the P&Ls being immediately impacted by changes in rates or in prices. This policy applies to what I mentioned previously to the exposure we have on the US dollar, on the Chinese yuan, but also on our raw materials purchases. Okay, thank you. About Russia, sorry, I know the news from large appliances, so that is, I mean, it seems to be real. I was just guessing that if it's done for large appliances, it's the same for small appliances. But this was just my guess, and I try to ask you on this point. Finally, if I may, on the energy cost, could you quantify how much it's the headwind for energy cost? I mean your EUR 300 million of guidance. Yes. We have not included, you know, energy cost in our headwinds. In our headwinds, we would include the negative impact of Forex. We're including the increase of sea freight and the increase of raw materials and components. For you to know, at the end of this first nine months, it's a negative impact of EUR 15 million when compared to last year. It's not nothing, but it's not the bulk of the cost increase that we're facing. We are not energy intensive activity, so it impacts us as everyone, but it's not a major part of our cost structure. Thank you, Alessandro, for your- Yes. Your question on Russia. We just checked and what is at stake is dual-use goods and others. We haven't heard of any specific Okay. That said, I mean, we are now at the eighth pack of sanctions, so we are extremely aware and careful of any decision that is made by the authorities. We will triple check and make sure that we do business in compliance with the regulators and Oh, oh. Yes. Okay. Thank you. Thank you very much. Thank you. The next question comes from the line of Mahad Laghni of BNP Paribas. Yes, good evening. Thanks for taking my question. I have a couple of questions. The first one is on the pricing and the environment. It seems that your industry is running quite a fairly high level of inventory now. I was wondering how is the pricing environment? I think that you were into a price hike campaign during Q3. How this campaign went, and do you plan to further increase prices down the road? This is my first question. The second question is on the forex impact. If I'm not mistaken, the forex impact in Q3 was almost neutral at the EBIT level. I'm just wondering how much of the delay we'll see in your P&L in terms of capturing the move in the dollar and the rand since the beginning of the year? Thank you. I'll take the first one, and Nathalie will take the second one. If I can rephrase your question on the first. You have two questions in fact. What is the relationship between the willingness to reduce inventory levels and the ability to maintain or put pricing through? The sub-question is what would be your prospect in terms of further pricing down the road? On the first one, I think you have a very valid question. We have passed through a price increase in September. In March, we have a third one that is coming this September. There is of course a balance to be found between pricing and activity management, volumes, market share, et cetera. We have pushed through, and you see that in our bridge, most all the pricing we wanted to push through in the first two waves. We are now maybe a bit more prudent in putting pricing through to find a good balance between understanding and listening to consumers' expectations, but at the same time protecting our margins, which is essentially what we've been doing in the course of the 9, 12 months. Again, let's remember that we had EUR 300 million of headwinds last year. We take another EUR 300 million of headwinds this year. The pressure on us has been very, very substantial, and pricing has been a substantial contributor to mitigating that impact on our bottom line. Down the road, we see the balance between pricing and mix to move much more towards product mix in terms of adding value. We think pricing, we are probably close to the end of our pricing initiatives. I'm talking about pricing initiatives in mature markets. I mean, we keep raising prices in the volatile currency markets, I mean, Russia, Brazil, Turkey, as those are very sensitive to currency evolution, and we have to follow that. We expect more involvement of mix and pricing from mix for the following few months. Nathalie, why is foreign exchange impact neutral in Q3? Hi, Mahad. The impact is, you're right, it's almost neutral in the third quarter. It's a combination of negative impact coming from U.S. dollar and Chinese yuan, for the same short exposure I have commented previously, and a positive impact coming from the Russian ruble. We are benefiting, you know, from the appreciation of this currency, and we have a long exposure in Russian rubles with the sales that we do in this country. This is a mix of the two that makes it almost neutral in the third quarter. Thank you. Thanks. Cheers. Bye. The next question comes from the line of Marie Faure of Société Générale. Yes, thank you. The first one is about the level of inventories. You mentioned that you have taken decision to diminish the production and the stocks. At what time do you believe that you will see this impact in your net debt position? The second one is about your premium strategy. You have launched during the first half some iconic products like the vacuum cleaners, X-Force, with a very high price and also the coffee machine in Germany. Are you thinking to just adjust your strategy and probably to have more second or third quarter products in order to meet the actual demand? Nathalie, you take the first question on inventories, and I will take the second one on innovation. Yes. Hello, Marie. Yes, so regarding inventory, what I have mentioned is that starting at the end of this second quarter, we have made the decision to slow down the production and also to slow down the supply of sourcing products. This decision has already an impact on our working capital as we see less funding coming from external suppliers. It's not moving the inventory down as fast as we were expecting because as you have understood, we have recorded lower sales than what we were expecting in the third quarter. Having said that, you know, the plan out there, they're very ambitious, and we will see a reduction in the inventory that will not be offset by a further reduction in the suppliers. That will positively impact the working capital requirements in the fourth quarter. There will be a positive impact on the net debt at the end of this year. Obviously, the reduction of inventory is a factor of the reduction of the supply base and the dynamism of sales. I mean, if we have uncertainties on sales, it's difficult to have certainties on inventory, on inventory levels three months down the road. Now, thank you, Nathalie. Your question, we have two questions in your question on innovation. Let me rephrase it on a very specific question on the XO and WMF coffee machine, Perfection, which I will answer in a second. The second question, which I think is broader and more general, which is in this context of call it constrained purchasing power, do consumers keep trading up and keep buying added-value products? I will start with the second one. Well, in fact, when we see the more dynamic segments of the market, it is about fully automatic coffee machines, what we call bean-to-cup coffee machine. It is about versatile vacuum cleaners. It is about robot vacuum cleaners. It is about heating food processors with a very high historical number. We see that in this context, consumers keep on being attracted by high-quality, innovative offers. That's, I think, what we keep doing, and that's what we will keep doing and keep pushing. We have a pretty substantial innovation plan and pipeline for the next six months, and we will. We have no intention to stop bringing added-value, innovative products, premium products on the market. When it comes to WMF Perfection and XO. XO had a good start in France. We had some technical challenges to fix, which we are doing now. We are relaunching in Q1 with a second version, which we think will allow us to meet a better current very high and positive welcome from French consumers. When it comes to WMF Perfection, WMF Perfection has been launched in Germany at the middle of the second quarter this year, which is low peak season. We are now attacking the high peak season. We understand better and better the conditions in which a EUR 1,800 machine can sell. We have some very positive experience in some of our stores. We have positive experience in some very upmarket department stores. I'm thinking of Galeria Kaufhof, Karstadt, with strong visibility and with the right support WMF coffee machine sales. We will expand the range of WMF bean-to-cup coffee machine in Q1 and Q2, completing the range with machines ranging from EUR 1,200 up to EUR 1,800-EUR 1,900. We are more than ever confident that this is the way to build and develop our business. Does that answer your question, Marie-Line Fort? Yes. Thank you. Okay. Thank you. The next question comes from the line of Peter Testa of One Investments. Please go ahead. Hi. Thank you for taking my question. I'm just trying to understand a bit about the guidance for the year, because if I do my math correctly, you're implying a margin in Q4, which will be roughly flat year-over-year, and obviously last year was in a growth year. Am I correct in understanding that on pricing and mix, you're still expecting a positive performance, but less than what's come? Secondly, if you look at, you talked about expense benefit in Q4 from steps taken in Q3, but you also talked about maintaining the guidance on growth drivers and admin. I was interested if you could give some sense of what sort of expense benefit you're expecting and from where. Lastly, you talk about drawing down inventory in Q4, and you're still expecting sales to be down, and we've seen an important negative impact of volumes on Q3. I was wondering if there's something else that we should understand on the volume impact, or if you could give some sort of sense as to how that's stabilizing. Thank you. Paul? Yes. Also many questions. Starting with the profitability we expect in the fourth quarter. That will be, you're right, a combination of positive price impact when compared to fourth quarter last year. We have what we would call an embedded effect of all the price increases that we have been placing over time since the end of the fourth quarter last year. That will have a positive impact on our profitability, and that will help us offset a significant part, a very large part of the cost increase that we still plan to face when compared to Q4 last year. Regarding the growth drivers, we plan well, to keep them more or less in line with where they are at the end of the third quarter, meaning no increase or no significant increase when compared to last year, and maybe depending on the level of sales a small decrease. That could be the same for the structural cost. This is how we are building the fourth quarter profitability. Obviously, that will depend on the level of sales. As I've said previously, we said that we will be on the full year around EUR 7.9 billion. Depending on, you know, the range that we'll deliver, that will have an impact on the operating margin, and that's why we're guiding full-year between 7% and 7.5%. You're expecting a Q4 sales performance year-over-year, similar to what you had in Q3. We've seen a significant -EUR 100 million negative impact on volumes. I was wondering if you could give a sense as to whether there's something else which is substantial on the cost or otherwise, which will manage that and when you're still drawing down inventory. No, I think that you're catching all the big items in our assumption. We said that we'd expect in terms of trends for sales and for mix, including country mix, that has an impact on the overall profitability, the same trends that we had in the third quarter. That's very much in line. Potentially, as we said that we don't want to increase cost drivers and SG&A when compared to last year. That will also benefit to the profitability of the fourth quarter. Okay, thank you. If I could have just one other, please. Sure. Just on working capital sales. If you go back to prior to the pandemic, it was sort of 16%-18% of sales. Do you think you'll be able to make it to that level this year? No, I think that could be quite a challenge to go back to the level that we had prior to the pandemic by the end of the year. As I have commented, we are adjusting our production and our sourcing, but it is taking time to, you know, adjust inventory, especially when there has been some uncertainty on the level of sales. We will be back on track. That's more something that we will be able to deliver, hopefully, in the course of 2023. There will be, anyway, a significant decrease at the end of the year when compared to the level that we have disclosed in detail at the end of June. Okay. That's great. Thank you for the answer. The next question comes from Charles-Louis Scotti of Kepler Cheuvreux. Please go ahead. Yes, hello again. Sorry, I don't want to take too much of your time. I have two follow-up questions. If I may. The first one is on the market share of white labels, product labels. Do you have an idea of their market share and if there is any big difference between cookware and small domestic appliances? Basically, what's your strategy to face a stiffening competition from entry range players? The second question on the consolidation of the bar activities. You gave a precise guidance on the cost of the restructurings, but not on the benefits. How much cost savings or synergies can we expect from this restructurings? Thank you. I'll take the first one. On the private label share, if it's. There's not one case in electrics. In small domestic appliance, it is usually substantially below 10% total market, with maybe. It will be dependent on the weight of GSF stores or mass retail market. Mass retail in the market, because mass retail tends to be stronger on private label. Even in a country like France, where mass retail is important, it is around or below 10%. When it comes to cookware, it's a bit more. Usually you have a market leader, a B brand and a private label. It can be a private label. It can be a B, C, D brand. It's difficult, but it is stronger in cookware than it is in small domestic appliances. On the benefits of the plan. Yes. As I have mentioned, we will book at the end of the year a significant chunk of the cost to implement the plan. You know, it takes some time, especially in Germany, to complete all the negotiations and discussions with the works councils. We do not plan to start implementing this reorg and this consolidation before January 2024. We think that we should get positive benefit from that between 2026 and 2027. I mean, you will understand easily why we don't want to communicate a type benefit. Maybe another dimension of that plan is that that should allow us to strengthen our commercial position in Germany. We also see that plan as a way to strengthen our sales dynamics in Germany, where we're gonna create a business that is in Germany only close to EUR 1 billion in sales and that is important in a market that is very competitive. Okay. Perfect. Thank you very much. We currently have no more questions on the line. If you would like to ask a question, please press star one. We have no more questions on the line. All right. I will give you a couple of sentences in conclusion. We observe that this year, up against a very high performance in sales and profit in 2021. We have a sales position that is holding up quite well. We won't come back on Russia and Ukraine, but we see we have some specific issues in France and Germany, and these lead us to review our guidance driven by these two markets and the volume and mix impact they have on the total business. We are confident that our industry is resilient and our markets are resilient, and we observe that in many mature markets and in many emerging markets. We confirm that China is a sustainable, very strong, Supor of the group. We see professional business as what its role was, when we acquired WMF in 2016, which is to balance the activities of the group between consumer and professional. It's a difficult moment, because we revised our guidance, but it's a moment where we see in the drivers and the performance of the various segments of the group's activities, a lot of reasons to be very confident in this model's ability to deliver sustained growth and profits. I'll finish by thanking you for attending this call and hoping to see you again, during roadshows or for the communication of the year-end results. Thank you very much, everyone, and I wish you a nice evening. Thank you. Thank you for joining today's call. You may now disconnect.