Good afternoon. This is the Chorus Call operator. Welcome, and thank you for joining the De'Longhi First Quarter 2024 Consolidated 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 and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio De'Longhi, CEO. Please go ahead, sir. Thank you. Good afternoon, ladies and gentlemen, and welcome to the De'Longhi Group First Quarter 2024 Results Conference call. Today, together with me are Nicola Serafin, Group General Manager, Marco Cenci, Chief Planning and Control Officer, Stefano Biella, CFO, and Samuele Chiodetto, Investor Relations, External Communication Director and M&A Manager. The group has extended its turnover by close to 10% thanks to the strong organic growth realized in the recent months and the consolidation of one month of the business combination in professional coffee. The net normalization of the post-pandemic effects on consumption, together with a restored level of normality of stocks at distribution level, have favored a considerable comeback in growth dynamics in the recent quarter. Specifically, the ongoing expansion of the coffee segment, as well as the recovery of the nutrition and food preparation sector, have enabled the group to achieve an organic increase in turnover at constant currency rates in the high single digits for the third consecutive quarter. These dynamics of increasing volumes, together with a stabilization of some production costs compared to the previous years, have allowed the group to obtain a further margin improvement, quickly bringing it within the historical profitability range. These improvements have been accomplished while maintaining a high level of investment communication across the brands, particularly through the execution of the global coffee campaign with Brad Pitt as an ambassador. Now, let me focus on the results. In the first quarter, the group revenues reached EUR 658.8 million, showing a 9.4% increase compared to the previous year, thanks to a like-for-like growth of 5.9%, which was 7.3% at constant exchange rates. The geographical expansion, in line with the previous quarters, displayed a steady growth trend in the European area, achieving organic growth at a low-teens rate. In more detail, Southwestern Europe experienced organic growth of roughly 10%, in line with the main patterns identified in the second half of 2023. Within this context, the main markets witnessed significant growth in turnover across all major product categories, with certain countries like the Iberian Peninsula and Switzerland showing accelerated growth in the double digits. Northeast Europe witnessed significant organic revenue growth for the fourth consecutive quarter, reinforced by the high-teens performance in the early months of 2024. We observe the continuation of a favorable trend of the UK and Poland, with acceleration in the Czech Republic, Slovakia, and Hungary. The MEIA region has gone through a decline in turnover, which has been heavily influenced by a complex macroeconomic and geopolitical context. The Americas area achieved an increase in turnover of around 10% thanks to the consolidation of La Marzocco and mid-single-digit organic growth, supported mainly by the performance of nutrition and food preparation, thanks to the expansion of NutriBullet products. Finally, the Asia-Pacific region, which was the only one to show growth in the first quarter of last year, maintains a turnover in line with 2023, highlighting a partial decline at an organic level. However, growth has been seen to be accelerating in countries like Australia and New Zealand. Regarding product segments, it's worth highlighting that there has been positive momentum across all macro categories, allowing the group to achieve organic growth at constant exchange rates in the high single digits. Specifically, the coffee machine sector, both for domestic and professional use, which currently accounts for approximately 60% of total revenue, grew significantly in the quarter at a low teens rate, driven by an acceleration in the expansion of the household fully automatic machines and the contribution from La Marzocco for one month. In the nutrition and food preparation category, personal blenders and hand blenders supported the sector performance in the quarter, which recorded low- to mid-single-digit increase. Lastly, in the quarter, it's worth noting expansion of Braun branded ironing products, with significant growth in many countries in the European region. Looking now at the evolution of operating margin, the net industrial margin stood at EUR 335.4 million, equal to 50.9% of revenue, compared to 50.5% in 2023, benefiting from the positive effect of the mix and an easing of inflationary pressures on product costs. The Adjusted EBITDA was EUR 93.8 million, or 14.2% of revenues, compared to 12.3% the previous year. Expansion of volumes, a further partial easing of inflationary pressures on some industrial costs, and an investment in media and communication in line with respect to 2023, A&P revenues at 11.2%, have supported an improvement in margins despite an increase in labor costs and organizational structures. As to the balance sheet, the group ended the quarter with a positive net financial position of EUR 307.6 million, after EUR 326.8 million of net absorption in relation to the closing of the business combination between La Marzocco and Eversys. Free cash flow before dividends and acquisition amounted to EUR 389.2 million in the 12 months, thanks to a significant contribution from current operations, while it was negative by EUR 28.2 million in the quarter due to an increase in net working capital, compared to the year-end value. Now, as a conclusion to my results overview, I would like to point out that over the last couple of quarters, we have been able to seize multiple growth opportunities, allowing the group to go back to a mid-term growth path consistent with its business potential. The overall picture represents a consolidation and strengthening of results, following the gradual post-pandemic normalization phase in the recent years, despite being aware that the current microeconomic and geopolitical scenario remains uncertain and variable. The most recent positive developments in the group's growth dynamics have led us to confirm the forecast of a 9%-11% increase in sales for 2024, including the enlargement of the perimeter through the business combination of La Marzocco and Eversys. In terms of margins, the quarterly results reinforce the expectation of an adjusted EBITDA of around EUR 500 million-EUR 530 million for the new perimeter. Now, we can open the floor to Q&A. Thank you. Thank you. This is the Chorus Call 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 Niccolò Storer, Kepler Cheuvreux. Please go ahead. Hello. Thanks. Good afternoon, and thanks, Fabio, for the presentation. I have a few questions. The first one is on coffee, if you can provide us with a breakdown of coffee turnover between professionals and consumers so we can better analyze the result. The second one is on price mix. Overall, negative contribution, but in the press release, you mentioned a positive pricing sorry, a positive mix. So implicitly pricing is negative. So if you can comment on that and maybe quantify how much of the EUR 1.4 million lost in EBITDA is positive mix and how much is negative pricing. The third question is on A&P, which has been a driver to increase profitability in Q1, if you can remind us, which is your expectation for the full year. And last one, on Americas. Have you seen any softening patterns in consumption over the past weeks? I'm asking because we have been seeing several consumer-related companies warning in these days. Thank you. Thank you, Niccolò, for your questions. So the first one, if I'm not mistaken, is about coffee. Of course, coffee continues to be our strong growth driver for the group. In the quarter, we have reached EUR 397.6 million for the totality, where professionals represent slightly more than 10% of total sales. Now, the contribution of La Marzocco, of course, is positive, and you can calculate for just one month as the difference is approximately around EUR 20 million and is in line with the budget. With regards to your second question, it's about price mix, the split of price mix in absolute value, negative pricing for approximately EUR 3.5 million, or around 0.7% on sales, while and this is the combination brought down to -0.2% due to a positive mix contribution for approximately EUR 5 million. Yeah. This is correct. Yeah. We're not concerned about this price deterioration as an indicator. We said very loud also in the previous calls, we have increased prices last year, and now we are benefiting from some cost reduction. So our intention was to reinforce our commercial initiatives around some key products in key areas. I think, let's say, the strategy has been pretty successful, and you can see it in our sales results. So we are very confident in being able to continue, let's say, protecting our profitability at the same time continuing having very strong commercial initiatives around all categories in all the key markets and product lines. With regards to A&P, in absolute value, slightly above last year, but in percentage, better than last year, lower than last year. And Nicola Serafin made very clear during the last conference call that we are aiming to higher efficiencies in how we spend our money, and we certainly are more effective in our campaigns. Brad Pitt is still very strong as an ambassador. And at the same time, on higher sales, of course, as a percentage of sales, the investment is now lower. Last question about USA. Good question. We see NutriBullet performing very well. On the contrary, we see a softer market for our Nespresso capsule business. We think that this might be temporary. Nespresso has experienced a very strong growth in the past years. So it could be that there is a temporary slowdown, some also inventory adjustments. In fact, we are seeing now an improvement already in April. So probably it's a bit too early now to try to extrapolate. So we saw a weaker quarter in coffee due to this capsule market, but now we're seeing a better trend in April. So I think that I'm quite confident that we can continue exploiting the success of NutriBullet and also turn around this initial weakness on coffee, particularly—well, the weakness is not on coffee. It's in the capsule coffee makers, which we expect to turn around as also Nespresso has very ambitious plans for the second half of the year. Thank you. The next question is from Isacco Brambilla, Mediobanca. Please go ahead. Hi. Good afternoon, everybody. Thanks for taking my questions. I have three. The first one is a follow-up on professional coffee. Could you just clarify if the 10% mentioned as an incidence was on total sales or just on the coffee makers side? Connected to this, now that La Marzocco deal has been closed, if you can provide a bit more color on the growth prospects of La Marzocco or either the whole B2B coffee makers business for the remainder of the year and beyond. Second question is on food preparation. This is now three quarters in a row with organic growth in ample positive territory, which is the, say, expectation for the remainder of the year, also considering that the division would be facing in the second part of the year a bit of a tougher comparison base. Last question is on net cash. If you can share any kind of target for net cash by the end of this year? Okay. Sorry. So maybe I wasn't clear on my sorry, my information with regard to the split between professional and household. When I said 10% of professional, it's 10% on total coffee sales, including also one month for La Marzocco for La Marzocco. With regard to professional, I think that both businesses are in line with our plans and with the budget. So we expect La Marzocco to, let's say, confirm also the budget for the remainder of the year. We see some softness now in Eversys. On the contrary, for the moment, we see also in current trading an acceleration with La Marzocco. It's a bit too early to extrapolate on this as we have only two months of visibility, March, and now we're seeing April in terms of top line. But we feel that numbers are coming in line with budget. With regard to food preparation, it's good news. All in all, it's good news. Maybe some softness around kitchen machines, which is a historical product for Kenwood. The market has dramatically declined in two years. Now it's stabilizing, but it's still in the negative territory, unfortunately. On the contrary, stronger growth in the quarter for NutriBullet, strong growth also with Braun, in particular with the hand blenders. And I have to see positive signs also in other food preparation with Kenwood, particularly with the new MultiPro Go, which has been a phenomenal success in many European markets and internationally. So we expect this trend to continue over the next nine months. With regard to net cash, I think that, yeah, the longer, the stronger cash-generating business model, we continue to generate a lot of cash. This could open opportunities for M&A or for the dividends eventually in the future. For the moment, we think, although we have the capability financial means to make acquisitions, we and even if also La Marzocco as an acquisition is not particularly complicated because it's a stronger commercial organization, which has delivered strong results on a standalone basis and doesn't require the strong integration, we believe that it's important for the group, for the moment, to digest this integration, support it, and make sure that both the professional business continue to grow in the mid-term in line with our plans and expectations. So I would say no expectation for short-term acquisitions for us. Very clear, mate. Thanks. The next question is from Francesco Brilli in Intermonte. Please go ahead. Good evening. Thanks for taking my question. A couple of questions from my side. A follow-up on the nutrition and food preparation segment. Specifically, I saw then when commenting sales by region, you mentioned NutriBullet just in the Americas area. So I was just wondering how it's developing the rollout of the brand outside the U.S., and if we should expect a further acceleration due to the NutriBullet international expansion this year or somewhere next year. The second one is on if you can provide some color on the very first week of the second quarter, if you are seeing a continuation of the trends observed and achieved in the first quarter across segments. Then just a quick one on La Marzocco. Should we consider any phasing or any seasonality for the revenues of La Marzocco this year from one quarter to another? Thank you. Okay. No, thank you, Francesco. So first question about NutriBullet. I would say definitely positive news on North America. Our international expansion is rolling out. I have to say that the market, the blending market, is not positive at the moment. So we have delivered growth in Europe thanks to market share gains. We expect, therefore, to continue growing with NutriBullet, but probably not in a high-growth environment. So this, I would say, we expect growth, probably not a very high level, but positive results on NutriBullet. The second question was about Q2. April fairly in line with what we have seen in the first quarter. So we expect to have a quarter two in line with quarter one. Certainly a positive quarter for us. The third question for La Marzocco. No, professional is more stable. It's less seasonal. You can expect quarters quite similar in revenue in the remainder of the year. Perfect. Thank you very much. The next question is from Alessandro Cecchini, Equita. Please go ahead. Hello, everybody, and thank you for taking my question. The first one is about the coffee segment's organic growth in the first quarter. So probably you are expecting similar trend for the second quarter given the size. So I would like to better understand how much the performance is driven by new products like Rivelia or like the products that you launch. So just to understand if you are still gaining market share thanks to new products and the feedback around the Rivelia that has been launched in several new geographies during this year. So this is my first question. My second question is instead about, I mean, still the professional business. You stated about we know that you are working or co-working with Starbucks, with Eversys. So just if you are confirming that this project is progressing and basically you expect to see some rollout, potential rollout by year-end or during the next year. And finally, on the blender, on NutriBullet. So we saw your competitor listed, the US competitor that is growing fast in blenders. You are saying that you are going well, probably in an environment that is not so good. So just to say that probably you and this player are gaining market share, I presume. So just if you can elaborate a little bit more your position, your current dynamics for your products. Thank you. Yeah. Coffee, yeah, I would say the trend still positive in Q2. Let's say no different angle on quarter two from our general view on the quarter. We expect to deliver as a group growth in quarter two, and we think that the coffee should continue at a similar growth rate that you have seen in quarter one or also in quarter two. Maybe some color around it. I think we see strong growth in super automatics, which are, yeah, our better product. You asked about how important innovation is. Yes, certainly it's very important. Certainly, Rivelia is doing well. Happy about the launch. Has been launching in selected markets like Italy, Spain. Now it's being launched also in Germany as an example. Pretty good results. I'm happy about that. But it's not just about Rivelia. I think that the growth is coming also from some products that were launched in the last 18 months that now are starting to have strong momentum. I would like to highlight the Eletta Explore in the high end. Doing very well particularly in the milk market or automated milk markets in Germany as an example. But also with the Magnifica Evo range, which is performing in the mid-tier of the market very well. We have also two new launches in this segment, which are happening now. So we think that we will continue to add new products, and we believe that this will enable us to grow and maintain our market shares. And just a note, we have increased our market share further in the first quarter of 2024. So pretty happy about commercial results and pretty happy about our ranging, particularly with the coffee makers and automatic coffee makers. With Professional, the question was about Starbucks. It has been probably a longer-than-expected project, but Starbucks made very clear that it's the most important for them this project. So very committed to the launch. The plan is to start deliveries in quarter three with, let's say, a large, very large test, I would say probably hundreds of units, and then to roll out fully in 2025 upon success of this, let's say, larger test in quarter four. But I would say on track with and Starbucks has already reiterated their commitment to the project. With regard to blending, you're referring to Ninja, I assume, and then performance. I think that, yes, probably they're performing well. We are performing well. We are happy about our commercial results both in the United States and North America. So I don't know exactly if you were referring to the Ninja performance. Yes, yes, yes. The Ninja. In the blending or in the blending and food preparation category where I think we have different parameters. Even in blending, we are more focusing just on the single-serve blending. They are more also in traditional blending. We are now launching more products also to enter the traditional space. And then also the blending category and food preparation category is much wider where, I mean, other product lines might affect company performance. Okay. Thank you. And finally, if I may, on the fully automatic that you are, I mean, gaining market share. So my curiosity is driven by do you see more demand in high-end products? So for high-end, I consider more than EUR 700 or in particular still gaining traction on the EUR 400, EUR 500, EUR 500 range of your products. Yeah. I mean, there are different stages of maturity in the different markets. We certainly see attraction for higher-end products, automated milk versus manual milk. I don't know if it's clear for you what automated milk versus manual milk means, but in automated milk, the consumer, thanks to, let's say, frothing devices, can make a cappuccino just a touch of the button. So this is growing as a category. There's more interest around espresso and automation of making cappuccino. So this is a trend. At the same time, in other markets or in certain markets, the market is becoming somehow more competitive. So there are also need of promotional initiatives. But all in all, I think that it's a very healthy market where consumers are attracted by innovation and improved functionalities. Okay. Thank you very much. The next question is from Hela Zarrouk, Oddo BHF. Please go ahead. Yes. Good afternoon, everyone, and thank you for taking my questions. I have four questions, please. My first question is on full year guidance. Could you please share with us your expectations in terms of growth at constant perimeter and constant currencies for the full year? My second question is on logistics and industrial costs. So what are your expectations for the upcoming quarters, and should we continue to expect lower logistics and industrial costs to have a positive effect on profitability over the full year? My third question is on the price mix. So what should we expect going forward? Still a slight negative impact on the full year Adjusted EBITDA, or maybe it should turn positive for the coming quarters? And my final question is on guidance. So what are the main factors that could, according to you, lead to an increase in the full year guidance? Thank you. Well, Hela, we don't have an official guidance at constant perimeter, but it can be extrapolated. I think that it can be, let's say, low to mid, say, let's say, low to mid at constant perimeter. For the moment, we see little currency effect. The effect that was very negative last year now is fading. Actually, in the month of April, it's close to zero. So we see very little impact on currency. And we said that the growth from 9%-11% is thanks to the consolidation also of La Marzocco. So this La Marzocco consolidation in the next quarters can represent about 3 points of growth on total year. So you can expect, let's say, a mid-single-digit growth for the group as a support to make you understand what is the potential without adjusting our guidance. With regard to the logistic cost and also the price mix, Nicola, do you want to handle these two questions? And then maybe you can jump in for the last question. Yeah. In this moment, we are experiencing, let's say, a favorable trend on the industrial and logistic cost that, obviously, we are strictly monitoring because there are some setbacks still from the Red Sea crisis that, on one side, is affecting the cost of the inbound from Asia to Europe. But currently, we have a low single-digit effect of favorable cost that we think that can be a carryover along the year. Going on price mix, going back on the detail of the question before, in terms of a bit of price erosion, we have limited concern, as Fabio has mentioned before, because we have some reposition of pricing that has been already happening in the second half of last year. So the carryover of this is we are getting now, and it's probably more affecting the first half of this year, and then it will be more neutralized. So this effect of the combination of price mix that is about 0.2% in this moment on the top line is something that can be even reduced along the year if we have this effect. And we have a positive sentiment on the mix effect. Okay. On guidance, I think it's probably too early to revise guidance. Honestly, it's a good quarter. It's a strong quarter. This could suggest optimism for our ability to deliver results for the year. So we're happy about that. We will monitor. I think that also we have to take in consideration two aspects. One is the overall macro and geopolitical complexity. And the second, that we have a tougher comparison in any case in quarter two. I would remind you that last year, quarter one was a weak one, not just for our decision to strategically exit the portable air conditioning, but there was softness in the SDA in coffee for the first time. So we're going to have this: quarter one is an easy comp. Quarter two would be still not a difficult comp, but later on in the year, we're going to have more difficult quarters to compare with. So for the moment, very happy. As Nicola said, the markets are strong: strong Europe, strong Eastern Europe, very strong Eastern Europe, great initiatives in North America, maybe some weakness in China and in some Asian markets. But all in all, we are confident about how we are faring, but too early to review guidance for us. Okay. Thank you very much. Very helpful. Thank you. The next question is from Natasha Brilliant, UBS. Please go ahead. Thank you very much for taking my questions. Three for me, please. Just to come back on your comments just now on Asia, obviously, outside of Australia and New Zealand, if you could just give us a bit more color on what is driving that organic weakness and when you expect that might change. Second question is just on the Middle East, obviously, challenging backdrop there at the moment. Is the impact on logistics and sort of disruption there, or are you actually seeing changes in underlying demand, and could you see a catch-up on that later in the year? And then final question, if you could just remind us on expectations for CapEx. And working capital has swung around a little bit. What we should expect for the full year on those, please? Thank you. Okay. Thank you, Natasha, for your question. I mean, Nicola, do you want to handle the commercial dynamics in Asia and the. Yeah. Yeah. Just to be totally honest. Australia. I mean, the very last information that Fabio added, okay, we have strong Europe. Asia, we have China a bit weak in this moment. Overall, it's a market that is suffering in terms of growth. While Australia and New Zealand, after a difficult 12 months of the past year, they are finally back on track with a growth of mid- to high-single-digit that is really encouraging. So overall, we see market strong. Obviously, China is an important market, but it's not our largest market. So overall, the effect on our revenue potential is limited. So we have great potential overall from a high-performing market. In terms of logistics and disruption, we have reset a bit, and we have rerouted all our supply already done. And so we are fully on track of availability in this moment. If any disruption could have been affecting the market result, it's happening. I would say that MEIA in this moment is suffering a bit of the geopolitical situation more than product availability because, indeed, the supply was at the same level of availability also through Europe. Definitely, Europe is performing much differently than MEIA. Yeah. On CapEx, CapEx is fairly in line with the indication over last year. We have less extraordinary investments that probably we have already done in the past few years, a couple of important investments in industrial infrastructure that we are in this moment is activated, and now it's time to capitalize at best, build the production capacity that we have. At constant perimeter. Of course, we now have to take into consideration some incremental CapEx due to La Marzocco, which doesn't represent a major portion of our total investment. With regard to last question was about the working capital. Yes. Yes. You may mention the working capital. We have said that, no, we might have a higher working capital progressively in the next months. We have reached record low levels last year. Therefore, we have to manage to have the right products at the right time in the right markets. We have a bit of increasing working capital compared with the year ended. It was lowest ever, but it was planned to and it's a bit of stock due to the seasonality of the product. But still, our current working capital and stock level, in particular, is much lower than it was in the same period of last year. So we are working with even an optimized situation compared with the already optimal that it was at March 2023. Super. Thank you. The next question is from Francesco Brilli in Intermonte. Please go ahead. Yes. Thank you. Just a quick follow-up, and it's more a curiosity. You mentioned before that you are seeing some in the North American market, you are seeing some softness of the capsules products. And I was just wondering if you think it could be a signal of more interest from different kinds of products, I mean, from espresso machines, fully auto, semi-auto instead of capsules, or it's just, I mean, a result of higher sales in the past and normalization of the demand. Just a curiosity on this. No, it is normalization. I think it's normalization. It could be phasing. I think that, again, we see there is more and more interest around coffee and cappuccino as well as on cold drinks, cold coffee drinks in North America. It could be just a temporary adjustment. Nespresso will have a very strong plan for also the second half of the year to support and go back to growth, and go back to growth. Yeah. Okay. Thank you. The next question is from Luca Bacoccoli in Intesa Sanpaolo. Please go ahead. Hello. Good afternoon, everyone. Three questions from my side. The first one is a follow-up on the kitchen machines. You mentioned the drop in the last two years. So I was wondering if we are back to the pre-COVID level or we are just above or below that, let's say, threshold. And the other question is on the ironing. You mentioned a very strong growth in the first quarter. So is this due to new product launches or a temporary increase maybe due to easy comps? So just to better understand the trend that we have to expect for the rest of the year because this has been a very volatile business in the past. And finally, a question on the financial charges, or actually, the financial income. The EUR 4.1 million, if you can split between the effects, recurrence effect, and the pure financial income, just to have an idea of the yield you get from the available cash in order to make a fair assumption for the full year. Thank you. Okay. So about kitchen machine, basically, before COVID, okay, during COVID, our sales expanded approximately the market expanded maybe 30, even more, 30+%. After COVID, there was a sharp reduction, and now we are still below the pre-COVID levels, I would say about 20% below pre-COVID levels. Now, market is now stabilizing. But for the moment, we don't see clear signs of recovery. We expect it to be fairly weak also this year, also this year. So unfortunately, we've been in the long term. I mean, this market will really come back. But for the moment, I mean, there have been incredible growth during COVID, and I think for a few years, probably, we're going to have to suffer a bit, and hopefully, we're going to normalize this in the future. But I have to say that, on the contrary, we're doing very well with blending, hand blending, and personal blending. And we have new initiatives also around other Kenwood products that I've mentioned before. Ironing, we think that we have a stable market share for the future. So you can expect ironing to deliver growth for the group in the near future. And the growth is due to a combination of innovation from our side, new products. We have a very strong ironing and iron pipeline, which is translating in new markets. Also, some competition weakness. A few competitors, we think, a competitor now is a bit defocused, and we are taking advantage of his weakness. With regard to the financial question, Samuele, you want to handle this? Yeah. Financial income, the effect is coming from the careful liquidity investment, the strategy that we had, in particular, since the start of the year. Bear in mind that from now on, just the cash out related to the business combination, we should have a slightly lower impact for the nine months. Okay. Thank you. The next question is from Fraser Donlon Berenberg. Please go ahead. Yeah. Hi there, Fabio. It's Fraser here from Berenberg. Just two questions. So the first was thinking about the lower-end segments, let's say, radiators, heaters, air conditioning. Do you see any change in competitive intensity vis-à-vis exports from China? And you obviously read about that country potentially pushing more products in this direction. So I just wondered if you see any change in the landscape with those lower kind of price points. And then the second question was, could you just give an update, please, on the pump business in terms of how you could see your share evolving in Europe? I think on the last call, you mentioned some quite interesting product launches in the category, so I'd just be interested to kind of have an update there. Thank you very much. Okay. I'll just size up a bit the, say, the risk-opportunity. Now, heating and air conditioning represent far less than 5% on total sales. It's like we're talking about really a smaller portion of our business. I think with the decision to exit the U.S. market in the portable air conditioning, now we're around 3%. Yeah. But now, with the decision to exit North America in the portable air conditioning, I have to say that we have really a portfolio of high-end product-markets. So really, let's say, the effect of the low end has already fully happened. We maintain in the high end of the market. We see the weakness more related to seasonality, or we are witnessing, unfortunately, this year, very unstable weather in the main markets or, say, unfavorable weather condition in Japan, for instance. And this is resulting in the weakness. It's not really a positioning issue. It's not a product issue. It's not a China product aggression issue. It's more like a seasonality this year. I mean, what had to happen, happened already with the decision to exit North America. Actually, I have to say that today, heating and portable are profitable, high-end businesses for us. With regard to the second question on pump, we have significant investments around our pump and grinder range. Nicola, maybe you want to handle this question. Pump, in this moment, is not, you say, that different in terms of market trend and potential. Obviously, it's on a lot of different scale than fully auto. We have a significant range launched in the market, and also innovation is coming. We are introducing Cold Brew technology both in the pump with grinder and the traditional pumps. Also, market is giving positive signal of recovery and to be back positive as it is in fully auto. So definitely, pump is, for us, a growth driver for the coming months, and we are very positive. Obviously, there's been a bit going back also in one of the questions before. Pump is coming from Asia for us, and there has been a bit of difficulties in realigning the supply through the Red Sea, considering the lower stock that we had at the beginning of the year. But now, since April, we are back fully on track on availability for Europe, in particular. So it's definitely something where we are very optimistic about. 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. The next question is a follow-up from Isacco Brambilla, Mediobanca. Please go ahead. Hi. A very quick follow-up on my side. In the past calls, you mentioned wage inflation has a potential headwind for 2024. EBITDA, it doesn't look like you are suffering any burden in the first quarter. Can you comment a bit on this if there is any marginal update worth to comment? Thank you, Isacco. Nicola, handle this. Obviously, wage inflation, there are two sides. There is the labor cost on the cost of goods. Definitely, there, we are more than offsetting the labor cost that is mandatory and is affecting with the efficiency and the benefit of the reduction of the material cost and industrial cost. Overall, the industrial cost, as I mentioned before, it's positive. The industrial labor cost is offset for the time being and also looking forward. For non-industrial cost, we have a carryover of the cost, but we are working with optimizing the structure. It's limited to the carryover of the effect of the wages increase, but we are leveraging the growth of the business to try to offset as much as possible this effect. This is why, at EBITDA level, the impact at this time is and also looking forward for the year, it should be very limited. Perfect. Thanks. For any further questions, please press star and one on your telephone. Mr. De'Longhi, there are no more questions registered at this time. The floor is back to you for any closing remarks. Okay. Thank you all for attending the De'Longhi first quarterly results conference call. Bye-bye. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.