Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the CAREL Industries 2023 full-year results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star then zero on the telephone. At this time, I would like to turn the conference over to Mr. Francesco Nalini, CEO of CAREL. Please go ahead, sir. Thank you. Good afternoon. Welcome, and thanks for joining our call for the presentation of the full-year 2023 results. I'm starting from page four where, as usual, we can see the main financial highlights of the period. In 2023, for the third consecutive year, we had a revenue growth in excess of 20% at fixed exchange rates, and we also reported an EBITDA margin higher than 21%. Reported revenue was equal to EUR 650 million, in line with the guidance provided in October and corresponding to a fixed exchange rate top-line growth of 21.1%. Organic revenue growth, same perimeter and same foreign exchange, was exactly 10%. There is approximately half, demonstrating the good balance between organic and external growth. This performance is the result of growth in all segments and all geographies, and happened despite a sharp slowdown in heat pumps, especially in Q4, and a soft refrigeration market with postponed investments mainly due to the weak macro scenario. EBITDA margin was 21.1%, up from the 20.5% of the full year 2022. The decrease in Q4 compared to the nine-month was expected, like every year, since it's due to seasonal effects. If you exclude one-off costs related to the M&A activity for approximately EUR 2.7 million, the adjusted EBITDA margin would stand at 21.5% at the top end of our expectations. This good profitability comes from a positive operating leverage, of course, a better product mix with a bigger incidence of high-end controllers, as well as the continued effects of previous price increases that could have set the high raw material costs. The net financial position at the end of the year was EUR 36 million, and if you exclude the accounting effect coming from IFRS 16 for approximately EUR 33 million, it would be virtually zero. Of course, we had the capital increase that helped a lot in this, but we also had a very robust cash generation, with the cash conversion cycle excluding M&As and the capital increase of approximately 75%. We can now move to page five with an additional view on the results. Revenues in 2023 stood at EUR 650.2 million, up 19.3% from the 544.9 million of 2022. Growth was very balanced between the organic and the M&A components since we had 54.6 million of organic growth, or exactly 10%, and 58.7 million of perimeter change. We then lost 7.9 million for the exchange rate effect. As expected, organic growth in Q4 was quite flattish due to the sharp deceleration in the heat pumps vertical and the prolonged weakness in the refrigeration market. EBITDA adjusted for the non-recurring items related to the M&A activity was EUR 139.9 million, up 21.9% from the EUR 114.7 million of the previous year, or 21.5% of revenues at the top end of our guidance. This very good result was due to operating leverage, to a better product mix with a higher share of controls after the end of the shortage, and the continued effect of previous price increases. In Q4, as expected, profitability was lower due to seasonal effects, with adjusted EBITDA margin standing at approximately 18% in the quarter. Net profit at EUR 70.9 million was up 14.2% from the EUR 62.1 million of 2022, benefiting from the operating results and a lower tax rate of approximately 20.1%. On the other hand, as we will see, we obviously have higher interest charges for the bridge loan, as well as higher D&A related to the Kiona acquisition. Finally, CapEx at EUR 27.4 million were basically in line with 2022. In line with our policy and our usual practice, the board is proposing to shareholders a dividend of 0.19 EUR per share, corresponding to approximately 30% of net profit. Going to page six, we can comment on the top-line results by geography and by market. To the left, we can see that all regions contributed to growth in 2023. EMEA grew by 17.9% net of the foreign exchange, with organic as well as perimeter as well as, like-for-like growth. As expected, in the last quarter of the year, there was the slowdown of the heat pump vertical that mainly affected Europe, also due to the start of the destocking phase and with a very tough comparable in the previous year because of the existing backlog at that time. APAC grew by 21.7% net of the foreign exchange, with an excellent performance in India and South Korea, but with a still weak market in China, where in any case we managed to grow in 2023. North America had the best performance among regions and through the year, with a growth of 40.7% net of the foreign exchange, thanks mainly to data centers and other industrial applications like battery energy storage systems. Senva entered in the perimeter in Q4 and also contributed with a very good performance. Latin America grew by 3.9% net of the foreign exchange, with good results in Brazil, partly offset by weak results in the rest of the region due to a very difficult macro scenario. To the right, we can see the breakdown by sector, with HVAC growing by 28.7% net of the foreign exchange, or approximately 13% organic. The best vertical was industrial, in particular data centers, basically all over the world, while in the second half of the year, HVAC was impacted by the sharp slowdown in heat pumps concentrated in EU in Europe. Refrigeration reported a growth of 5.6% net of the foreign exchange, thanks also to the contribution of Kiona, in a situation of generalized prolonged stagnation of the investment cycle due to inflation, interest rates, and final consumption. I now leave it to Nicola to comment the items below EBITDA on page seven. Thank you, Francesco. The slide number seven details the group result from the EBITDA to the net profit. In 2023, this part of the profit and loss has been very much impacted by M&A activities and their related actions. Compared to fiscal year 2022, D&A cost increased due to the relevant investment in CapEx of the last few years for EUR 3.7 million, for the purchase price allocation process for EUR 2.4 million, and IFRS 16 for EUR 2.2 million. In general, the financial charges increased for the impact of interest rate evolution. The interest related to the bridge loan were equal to EUR 2.7 million. This line also includes significant impact of accounting effect like figurative interest calculated on put and call option from M&A activities for EUR 3.3 million, IFRS 16 effect for almost EUR 1 million. The tax rate of the period was around 20.1%, lower than last year, mainly due to a different country mix. The group net profit, as at December 2023, was equal to EUR 70.9 million, compared to EUR 62.1 million of the same period of 2022. Slide number eight shows the net financial position evolution of 2023. The period was impacted by M&A activity for EUR 184 million. The cash flow from operations was strong and equal to EUR 170.2 million. The last quarter, net working capital improved mainly due to inventory and credit management. In 2023, the group paid dividend for EUR 21.2 million. Taking out the accounting effect of IFRS 16, the net financial position is substantially around zero, benefiting from the capital increase completed in December 2023. I leave Francesco to go on with the presentation. Thanks, Nicola. I'm now on page nine, to take this opportunity to update you on an important technology development that the group is launching in a few days at the MCE exhibition in Milan, which is an important exhibition for our industry. As you know, a key part of our technology is the software development environment that is vertical to the use cases of our customers, that they can use to develop the logic of their units, using also the vast libraries that are part of the environment itself. We're now introducing the fifth generation of our development environment named STone. With this development, we're leveraging on our decades-long experience and intimacy with customers to introduce a large number of extremely innovative features that can greatly increase the speed and quality of their development. STone natively supports the entire range of CAREL controls and devices, apart from the very old ones. In this way, customers can leverage on their development investment, porting it to other products of the range, and can also increase their resiliency should they want to quickly change a product, for example, for supply chain issues. On the left part of the slide, we can see some examples, just very few examples because the innovative features are a lot. In terms of flexibility allowed to customers, besides the fact that STone allows for optimized teamwork for geographically spread development teams and is highly modular, making it much easier to reuse already developed functionalities, most importantly, there's the capability to run automatic real-time tests to validate the functionality of the code as it is developed, as well as to perform regression tests to check that new developments didn't introduce unwanted problems on the whole system. This automatic testing capability relies on a library of patterns and functionalities that we created and will continue to enlarge based on our long and vast experience in terms of the logic of the different thermodynamic units. We have defined, and are continuously evolving, a roadmap for addressing different use cases using generative AI technologies. At the very beginning, STone will natively support the usage of generative AI to automatically write parts of the software, but in the coming months, several additional features will be introduced based on our knowledge of the use cases of customers. This is another very, very important feature. STone will be integrated with the capability to create digital twins of the units of customers, so that they will be able to validate the functioning of the units without physically building a prototype. This is another very important element made possible thanks to our thermodynamic know-how that can greatly simplify the development process of customers and that will, in turn, evolve in the coming months using generative AI technologies. STone is actually not intended to be just a development environment, but an entire ecosystem to manage the life cycle of customer units. One example is the possibility to very easily establish a secure connection on field with the end unit software, even if it's not directly connected to the internet, to facilitate installation and maintenance, making it possible to perform diagnostics and many other activities on the machine remotely. I mean, this could sound easy, but believe me, it's not. When you are operating remotely on the control of a unit that could be running in a mission-critical environment or where the wrong action on the software could basically break the unit. Of course, this is fundamental to limit maintenance and installation costs, also in light of the shortage of field technicians. Finally, thanks to a digital signature, the installation of any unauthorized, non-original software on the control can be prevented, creating a shield against possible malicious attacks but also protecting the customer's spare parts business. To the right, we can see an example of how some of these capabilities would work in practice. Basically, a team that could also be multilocated would start developing with the possibility of reusing software modules already developed, capitalized on previous developments in terms of speed and quality. At this stage, the team can focus on the high-value-added parts of the logic of the end unit, continuously testing in real time the functionality of the software automatically. Basically, the software is testing itself. The less important but time-consuming parts of the code are left to AI. Instead of using a physical prototype of the end unit in a laboratory for time-consuming validation activities, a digital twin can be used to check the actual functioning. Once the end unit has been commissioned, the software development or maintenance team can intervene remotely, avoiding significant downtimes and the deployment of on-field personnel. In case of a hardware failure, a possible replacement with non-original spare parts is prevented by the software. To explain, by non-original spare part, I mean a CAREL controller sourced on the open market, jeopardizing our customer image, quality, and business. STone is the latest example of how we remain at the cutting edge of innovation, considering also that, of course, innovation in controls is more and more coming from the software side rather than from the hardware one. And with STone, in addition to our digital capabilities, we obviously leverage on our deep knowledge of thermodynamics and of the use cases of our customers. I'm now moving to page 10, where staying on the digital side, I take also the opportunity to update on the Kiona integration. Following the acquisition, we established a steering committee composed by managers from CAREL and from Kiona in order to supervise the definition and execution of the integration workstreams. The steering committee is led by a CAREL manager with a longstanding expertise in services and digital business models. She's responsible for the correct and timely implementation of the committee decisions and is joining the Kiona board of directors. In terms of the first integration projects, we accelerated on some fronts compared to our initial estimations since we found a better-than-expected technical complementarity between the Kiona platform for refrigeration and the CAREL legacy one. Therefore, in refrigeration, we started the integration of CAREL field devices into Kiona software libraries, allowing a seamless and deeper connection between the two. Basically, Kiona will, of course, remain hardware agnostic, as it is a fundamental part of its value proposition. However, there will be a simpler and cheaper installation if CAREL products are present on the field, as well as a deeper integration with the field algorithms. This, in turn, of course, can open up several cross-selling opportunities where we can offer the Kiona platform to existing CAREL customers in the food retail space. In addition, we also started the integration of the CAREL digital services offering for food retail with the Kiona 24/7 technical support center. On the building side, we started the process to accelerate Kiona international expansion, leveraging on CAREL leading position in a number of HVAC verticals. The priorities here are Southern Europe, where we have a strong channel presence, as well as the U.S., where we can leverage Senva's strong presence in the contracting domain. As we can see on the right, in 2023, Kiona posted revenues for approximately EUR 24 million, with an increase of 22% over 2022. This is slightly below expectations due to the short-term postponement of some projects for the very challenging economic scenario in Q4 last year, but these projects are materializing at the beginning of this year. Adjusted EBITDA margin, that is, excluding one-off costs related to the acquisition, was slightly lower than 20% due to the turnover being slightly below plan. We're confident to recover the postponed projects quite soon, and in any case, in January, Kiona reported a growth rate in excess of 20%, again in spite of a macro scenario that remains very challenging in this very moment. And we confirmed the expectation from an increase in profitability in 2024. I'm now on page 11 for the closing remarks. In 2023, for the third consecutive year, we reported a growth rate in excess of 20% at constant exchange rates with a balanced mix between organic and external growth. In fact, organic growth was 10% in spite of the sharp deterioration of the heat pump vertical and weak demand in refrigeration. Profitability was also good, with an adjusted EBITDA margin of 21.5% and a very strong cash generation, with an operating cash conversion of approximately 75%. We successfully completed two very important extraordinary activities. There is the acquisition of Kiona that greatly strengthened our position in the digital services area and our first share capital increase aimed at maintaining the flexibility to continue investing in additional growth opportunities. In terms of our ESG position, we had the confirmation of the silver medal by EcoVadis and the AA rating by MSCI. Recently, we improved our score with CDP from B- to B. Unfortunately, the macroeconomic scenario deteriorated in the second part of the year, mainly Europe and mainly for the impact of interest rates. This particularly affected the heat pumps vertical, where we are still convinced that the market has a solid secular structural trend. However, general sales in Europe for air-to-water heat pumps in 2023 declined by 5%, and that for us is combined by a sharp destocking phase down the supply chain. So coming to the current scenario, the first month of 2024 confirmed the dynamics of the last part of 2023. Therefore, the group expects to close Q1 2024 with total revenues not far from Q4 2023. This is the combination of a very challenging heat pump vertical and a still stagnant refrigeration market, partly compensated by very good double-digit growth in data centers and the rest of the industrial sector. In fact, compared to the first quarter of last year, we have a sharp decline in heat pumps, well in excess of 50%, as well as the fact that in Q1 2023, the shortage situation started to normalize. And so, in addition to end demand, there was a large backlog to recover that we started recovering in Q1 2023. As regards to the rest of the year, expectations are for a gradual improvement. This is linked to the recovery of the investment cycle in the refrigeration sector, where finally we start to see the first light signs of this happening, to the disposal of inventory accumulated in the heat pumps supply chain, as well as the general improvement of the European macro scenario, heat pumps included. This will be also helped by a less difficult comparison as we move through 2024. Thank you very much for your attention. We're now more than happy to answer two of your questions. Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Christian Hinderaker with Goldman Sachs. Please go ahead. Yes, Kim. Good afternoon, everyone, and thank you for the opportunity. Apologies, first of all, because I think there's a reiteration of maybe the message you've just put forward, but just interested in the message on heat pump sales, how much they declined by in the fourth quarter. You said that the market was down 5% in the year, and I wonder whether that growth rate has changed in the first quarter to date. I wasn't clear just a second ago whether you the 50% number you were citing was the Q1 growth rate last year or the decline for Q1 this year. I'll start there. Okay, okay. Sure, Christian. So basically, to clarify, the overall market in Europe of heat pumps—this is figures by the industry association—was in 2023 down by 5% in the whole year, while we reported a very important growth in the heat pumps vertical in 2023. So we definitely grew much more than the market in 2023. When I was referring to the in excess of 50% decline, it was Q1 2024 to Q1 2023 for us, for CAREL, because, in addition, let's say, to the decline of the market, there's also the destocking, and that's also, of course, and it's not only us seeing the destocking, but the market. In addition to the end unit sales, there's also the effect of the destocking in the distribution channels of heat pumps, plus, let's say, there was also last year, there was also the backlog that we started a massive recovery of the backlog basically in February when we saw an improvement in the shortage scenario. So all market air-to-water heat pumps in Europe was down 5% in terms of end unit sales. Q1 this year to Q1 last year, we expect more than 50% decline in the heat pumps vertical for us, because of the very difficult comparison and because of the fact that the market is basically flat. The end market, we haven't seen the figures yet for this year on the general market, but we expect it to be very weak. And plus, there's the destocking, which is going on and the comparison with the backlog recovery. Now, there are some, let's say, some positive aspects that we can mention is that basically the incentive scheme has been very recently clarified in Germany, I believe, a few days ago. The incentive scheme was clarified in Germany. In Austria, a very strong incentive scheme has been confirmed. In the U.K., the incentive scheme was confirmed. In fact, the U.K. a few days ago reported a very sharp increase in the applications for incentives for heat pumps. So there are the first signs of recovery of the end market. These are early signs. Basically, there's a very low visibility down the supply chain in the entire industry. The visibility is very low on how the market for heat pumps will really recover. Plus, there's again the issue of the destocking that we have, the entire industry has to go through. Let's say that our expectation, which is an expectation, of course, again, in a short scenario of very low visibility. Our expectation is that we could start to see some signs of recovery on the end market, probably in Q2 and then improving in Q3 and Q4, but that's the end market. But then there's the stock, and we believe that down the supply chain, there are three to six months of stock still to be eaten. So that's the, let's say, short-term situation. Now, secularly, of course, this application will grow, will continue to grow. It's starting massively in North America, so the expectations for this vertical are definitely very, very, very positive. However, in the very short term, in the coming month, there's low visibility by everybody. Again, there are 3-6 months of inventory down the supply chain, mainly in distribution channels, because the industry last year, in preparation for the autumn season where most of the heat pumps are sold and installed, so basically, in the first part of the year last year, many industry players, they produced a lot, and they introduced the units on the distribution channel, and now the stock levels are quite high. So there are three to six months of stock. Again, I expect that on the end market, demand will start to pick up to some extent in Q2 and then improve in Q3 and Q4. Then, of course, we will go through also the destocking. That's very clear. Thank you, Francesco. Can I ask now on refrigeration, and you've touched on a potential sign of improvement there. I just wanna think about the latest EU regulations in terms of F-gas consumption. You know, how might that affect the business in the medium term and, in particular in the context of the bans on certain refrigerants? Should we assume that that requires replacement of equipment, or is it simply that the refrigeration circuits can be modified? Just interested in the backdrop for that business. Yes, for sure. For sure, Christian. The tightening of the F-gas step-down plan will have a positive effect on demand because the let's say the quotas of HFCs will be even lower than what was expected before, which basically triggers higher prices for HFCs, which is an additional investment to transition to CO2 sorry an additional incentive to transition to CO2, because every supermarket leaks a lot of refrigerant, so it becomes much more expensive to run a supermarket with HFCs. So the effect on demand will be positive. When you refurbish, when you transition a supermarket from HFC to CO2, for example, you need to completely reinstall to redo completely the supermarket. It's not possible to just do a minor refurbishment. You need to completely recreate the installation. So it's a brand new installation. It's a complete new installation. But this is an important point because the fact that there is the new F-gas in place, plus the fact that plants and installations are now definitely lagging behind their usual physiological refurbishment cycle, are strong motivations for seeing a recovery quite soon and possibly a quite strong one. By first early signs I mean qualitative signs because they are not yet materialized in orders, but we start to see the first qualitative signs talking to end users and OEMs that the investment cycle is going to restart, possibly quite soon. Understood. I'll get back in the queue. Thank you. Next question is from Niccolò Storer with Kepler. Please go ahead. Good afternoon. Thanks for taking my questions. Can you hear me well? Yes, yes, Nicola. Okay. I have a few, maybe better if you go one by one. The first one is on mix. You talked about favorable mix, and you mentioned favorable mix more than once in your press release. And my question is, how mix has improved has impacted your profitability, which also this year has come out above your long-term guidance, and what should we expect going forward in terms of mix, I mean? Okay, so, Niccola, by the, let's say, the mix effect was positive. It was really not the most important effect on the gross profit, but was definitely visible. Let's say that we believe that mix will remain, at least for the coming quarters, let's say, more or less where it is now. So this positive effect will be confirmed. We don't expect it can further improve because basically the increase of the share of programmables has already been recovered, not in the short term at least. Then, of course, in the medium to long, we always strive to have a better mix effect. But in the short term, let's say that probably the mix will remain stable, and so, in terms of long-term guidance, it's too early to estimate the effect also because we have to see the evolution now of costs and prices. Let me touch on this because probably it's an interesting point. So in terms of costs and prices, we are not yet; we did not have yet any material negative price effect. We do expect that starting from now on, costs will start their, let's say, normal, usual deflationary trend. There could be some lag due to the inventory in between to see the effect on the income statement. But let's say from now on, we do expect to start again to see a deflationary environment and prices as usual for us as our usual strategy in the usual deflationary environment, prices will follow costs, by giving back to customers a part of the savings that we have on costs, which means that overall, the mix between costs and prices could still be positive. And so, I mean, but it's, it's a little bit too early to quantify this effect because we come from very volatile quarters. So, there could be an impact on the long-term guidance maybe, but it's too early, it's too early to say. Yeah, perfect because this would have been my second question because apparently Belimo has guided for another year of mid-single-digit positive pricing effect. And I was wondering if this was the case also for you, but apparently it's the other way around. Okay. Then the other question is related to your guidance, a clarification. When you say you expect a first quarter in line with the last quarter of 2023, this includes also Kiona, of course. So this means that the performance at same perimeter would be year-on-year, Q1 over Q1 last year would be negative, say, in the 10% high-single-digit region. Is that correct? Yeah, of course. Yeah, Kiona was also present in the perimeter in Q4, so the comparison is like for like. But you're right. Yes, basically, if you take out Kiona, yes, we do expect a Q1 on Q1, let's say, a decline in the, yes, let's say, in the high-single-digit regions, what you said. It's, of course, again, due to the very, very sharp and important decline in the heat pumps vertical, as I mentioned, plus the very difficult comparison due to the backlog recovery that we started to see in Q1 last year in addition to normal demand. Perfect. Very last one on financial position. I see that, on your balance sheet, you still have a high level of gross debt, high level of gross cash. So what should we expect going forward, of course, in absence of any M&A, in terms of optimization and, consequently, in terms of pure financial charges, net financial charges in 2024? Thank you. This was my last question. Yes. And so the financial charges, as I said, it were impacted by an accounting effect because half of the cost was related to that accounting effect that we will have the same effect, I think, or very similar. It depends on the interest rate evolution even in 2024. With reference to the net interest, I think that there will be something around EUR 2 million. Thank you. The next question is from Gianluca Pediconi, MOMentum Alternative Investments. Please go ahead. Good afternoon, gentlemen. Quick question on STone. What I would like to understand, if that would help you mostly to retain the current customer or be also kind of application to attract new customer, and if at the very end, you will also be able to also indirectly monetize out of it, I mean, that will have an impact also on your profitability? Thank you. Okay. Thanks, Gianluca, for the question. Of course, it will be very important for both directions, so both for existing customers as well as for acquiring new customers as always. So this basically, STone basically, again, puts our system solution, especially on the control side, at the cutting edge of technology. So it's step step improvement, again, much more advanced than what exists in the sector already, leveraging on our on the combination of the different know-hows that we can put in the development of this environment. So it will be very important both for existing customers as well as for new ones for all the reasons we mentioned. In terms of monetization, let's say, the most important effect, especially, in the short to medium term, would be, of course, making our product value proposition much stronger, because I believe that for a component manufacturer, especially for the components so because here we're not talking about the digital services. We're talking about basically components. For the components, the digital part has to make the offering of the components much, much stronger. And this is exactly the case with STone. So the most important effect would be the indirect effect on the sale of components. However, with STone, STone will also be monetized because there will be a license, and there will be also a license for the, for the basic, let's say, usage plus additional features like the libraries of automated test patterns or the digital twin. So there will be features that will be monetized, and also the basic software would be monetized. But, as usual, in this respect, this will not be particularly material, compared to the sale of the hardware, especially in the short to medium term. Thank you very much, Francesco. The next question is from Alessandro Tortora, Mediobanca. Please go ahead. Yes, hi. Good afternoon to everybody. Ciao, Francesco, ciao, Nicola. I have, let's say, some questions, okay? I would, okay, we can do one by one. The first one is you can recall a little bit your comment, Francesco, on the several applications, also on refrigeration, but also on data center. The question is, considering what you said, the postponements on the projects, can we assume for these, for this division maybe a, let's say, stable contribution, sales contribution, the first part, but then subsequent growth, okay, in this segment? And this could allow the, let's say, the refrigeration to grow, let's say, in the mid-single-digit area. But just to understand, you know, the expectation that if refrigeration grows, clearly, it will grow fast. That's the first question. But also on data center, just to also on the application side, this is clearly a segment, which grew double-digit last year. Is it possibly an acceleration, which means, I don't know, a growth of about 20%, or it is still in the, let's say, 10%-20% range? That's the first question. Okay, Alessandro. Ciao. So for the refrigeration, it's, as you know, quite difficult due to the visibility on the market in this moment to give a precise timing of the recovery. We definitely expect a growth in the market, and so even more for us, for sure, in the second half of the year. In Q2, it depends also on the levels of stock, especially in the distribution channel. And that's not entirely clear in this moment. So while for heat pumps, we know for sure there are very high levels of stock. In refrigeration, for sure, the stock levels are lower than in heat pumps, not even comparable. But there is still some stock. We don't know, we don't have visibility on how, how it is. So, this is why there is some uncertainty, especially on Q2. In the second half, we definitely expect, expect, a growth, a growth in the market. Now, the extent of the growth at this stage is quite difficult to, to quantify concerning data centers and industrial in general because data center is the fastest growing, but the entire industrial vertical is growing very well, it's still growing even, even in this very challenging quarter. It's still growing double-digit. I would, I would assume, a growth between 10%-20%, as you said. Okay. Okay. Thanks, Francesco. Then, the other question is on Kiona, clearly you explained on, let's say, the difficult, macro environment, let's say, leading to some postponements of some initiatives related to Kiona. Can we think about, let's say, the January performance you mentioned, which is the 20%+, as something that Kiona can achieve also, let's say, for this year? And then also on the profitability side, I remember that we were thinking about a range for Kiona with a profitability in the 20%-25% range. Is this something that we can, let's say, apply for this year or at least a profitability, let's say, above 20%? Okay. So the postponement was basically the postponement of some projects in particular, in this case, in Denmark. So there were some projects there that were postponed because of the uncertainty on the economy. So the projects were postponed, but they're still in the pipeline, and they're very close to materialize. So it was a very short-term postponement concentrated in Denmark in buildings. So it was just a short-term postponement. Concerning profitability. In terms of growth for Kiona for this year, we definitely expect more than 20%. That's absolutely confirmed. And likewise, we do expect a profitability in excess of 20% because it was slightly below 20% last year because of this postponement that was not foreseen. But, I mean, confirming our expectations for this year, also profitability will be above 20%. Yes. Okay. Thanks. Thanks on this. Then, moving to the, let's say, profitability outlook, I can understand that, clearly, Q1, also considering the tough start, you should probably or you already put in place, let's say, some cost initiatives. Having said that, considering what you said also on the price to cost, cost spread, that should, let's say, remain supportive for you, can we assume, let's say or can we have, let's say, any rough indication or, for instance, just an EBITDA margin for the company at least, let's say, above 20%? I can understand that maybe, being again above 21% with, let's say, this suboptimal operating leverage, okay, could be challenging. But just to understand an idea, Francesco, if at least, let's say, this 20% level is something realistic. Okay. So, Alessandro, in terms of, yes, in terms of cost, of course, considering this short-term uncertainty on the market, according to the evolution of revenues, we are taking actions on purely discretionary expenses, where we have in this case room for action. So, to go in order, let's say, in terms of gross profit, as you said, we don't expect any problem because we still expect, let's say, a gross profit at least in line with last year. In terms of general SG&A, we are going according to the evolution of revenues to take action on the pool of purely discretionary expenses that we have, which is significant. We are not; we do not intend to reduce, by any means, expenses in innovation or in growth in some particular directions, for example, in our growth in the North America region, which is going very well. And likewise, in innovation, we are not going to reduce expenses. But there is, in any case, a significant pool of purely discretionary expenses that we can act on according to the evolution of revenues. Having said that, it's quite difficult, you know, to make predictions on the profitability at this moment considering the very high volatility and the very high uncertainty. So I would prefer not to, let's say, enter into this because it's really very difficult to forecast. Okay. No, I can understand, Francesco. And then, the last questions are just related, let's say, to some very, let's say, boring numbers for Nicola. It's the first one on the tax rate. Nicola, you mentioned this very favorable country mix. What we can basically assume for this year in terms of tax rate. Then, PPA amortization level for 2024, I think we should have Kiona, you know, the full impact of Kiona, the annualized impact for Kiona. And then, lastly, considering the very good performance on the working capital side, if we can assume also, let's say, the working capital on sales basically stable year-over-year in 2024. Thanks. Okay. And so, with reference to the first question on the tax rate, I think that, for the next year, for the year-end, something around, the 21%, something, something more than this year, but it will be around 21%. With reference. Mm-hmm. Of Kiona, the PPA activity, has been reflected in the profit and loss, just for this month this year. And the effect on the full year will be something around EUR 6 million of amortization for this. And then in terms of working capital, I think with the view of the year-end, a sort of stability compared to what we have now at the end of 2023, the negotiation, the actual situation of the shortage, and credit management. Yes. And if I can add, basically, as we can see from the working capital, we did actions to reduce the inventory because, Mm-hmm. We believe that, after the end of the shortage, now there was room for improving the inventory level. We did it. We believe that this level is probably good for this situation. Plus, we have a positive effect on working capital from Kiona because Kiona has a negative working capital due to its business model, which is digital services. So Kiona has. Mm-hmm. Has a positive effect with a negative working capital. Okay. Thanks for all the answers. The next question is from Alessandro Cecchini, Equita. Please go ahead. Hello. Hello, everybody. Thank you for taking my questions. The first one, if you can, I go, one question for the moment, and I go to other questions. The first one is about R&D, total R&D expenditure for 2023. And then, if I am not wrong, you were expecting for 2024 to increase R&D. If you could elaborate a little bit more on this point. The second point, actually, it's on the free cash flow side. I saw your bridge in the presentation. I just missing, if you could add some info about the delta of EUR 14 million positive that you had in the line other. And finally, my question is about the CapEx level for 2024 if you expect to maintain the current level. Many thanks. With reference to the R&D, the total investment in R&D for the year was around EUR 26 million. The value for the next year, the total investment, we expect something around 4.5% of the revenues in terms of R&D. This is not capitalized, of course. No, no, no, no. The expenditure is. The expenditure is not only the capitalized part. The capitalized part is something around EUR 2 million. So it's just, just a small part of this. And yeah, the last question was on the CapEx level. The CapEx level will be something around the longer-term guidance that we have given that it is around 5% of the revenues. And we confirm this level of investment, investment. The net financial position bridge, these are in part the interest on the options that are just, just a figurative interest. And then there are the other the other, the other part of the balance sheet that monetary like, for example, the accruals to the funds for provisions, the different provision that we have on the balance sheet. Okay. Many thanks for the answers. The next question is a follow-up from Niccolò Storer with Kepler. Please go ahead. Thank you again, on working capital, basically, if I understand well, the ratio of working capital on sales was in the 12% region. So, sharply down compared to previous year, 12% on revenues, which, I mean, probably, are even higher considering their performance. So you are saying that, basically, from now on, we should remain at such low levels that we haven't seen in years. Is that right? Okay. If you take out the effect of Kiona, the level will be something around the 14%, something more than 14%. And we believe that for the level of CAREL, for the year-end level should be something in line with the actual situation of the shortage scenario and the supply chain scenario. And so I will confirm this value even for the end of 2024. So 14%. Something more than 14%. Without Kiona. Without Kiona. Without Kiona, then it will be less, so. Yes. So, let's say, the total adding, yes, we can confirm overall the percentage that. That there is in the balance sheet. Yes, that we can see in the year-end 2023. Here, we are talking about working capital, not trade working capital, total working capital, right? Total working capital, yes. Total. Okay. Perfect. Thank you. If you consider the working capital, operating working capital, just the effect of receivables, accounts receivable, accounts payable, and inventory, it will be something around the 22%. It will be the level of this. Without Kiona. Without Kiona. Without Kiona, which is, in any case, quite a low level for our last-year trend. It's probably the minimum level in the last year. Exactly. Okay. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, Mr. Nalini, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. Okay. Thank you. Thank you all for your questions and your attention. Looking forward to speaking to you again for the presentation of the first quarter 2023 results. Good afternoon. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.