Good evening, this is the Chorus Call Conference Operator. Welcome, and thank you for joining the Intercos First Quarter 2023 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. Renato Semerari, Chief Executive Officer of Intercos. Please go ahead. Good evening, everybody, or good morning if you are in U.S. We are here to present you the first quarter of 2023 results. As you probably have seen, we have published a +34% growth of our top line with a mild positive effect from currencies. In fact, at constant rates, our growth was +33%. Adjusted EBITDA grew 56%, reflecting on one end the growth of our top line, on the second, an improvement of about 180 basis points to our EBITDA margin. Net debt was at EUR 97 million, which is a reduction of our Net debt of about EUR 60 million versus a year ago, and leading to a Leverage ratio of 0.73x EBITDA. I will now go through the top line results in a bit more depth, starting by the result by business unit. I must say that we have three business unit, and we have registered very good results on the three of them. First of all, makeup kept growing at an accelerated pace, achieving a +35%, confirming to be over 60% weight on our total sales. Second, we had a significant acceleration of the Hair & Body business unit, mostly but not only driven by fragrance, which always benefited from the Dolce & Gabbana contract. We had, you know, stronger demand, strong results, which are not only linked to the Dolce & Gabbana factor. Third, skincare registered an 8% growth, so accelerating versus the mild growth of 2022. Pretty strong results, I must say, across business units. Moving to regions, also in this case, we have good news coming from all the regions. All regions registered strong double-digit increases, starting with EMEA, which registered a +44% growth. This was driven by both makeup and Hair & Body as two main contributors. This strong growth brought EMEA to weight 54% on our total sales. Americas kept growing at a strong pace, +28% following 2022, where America was the engine of growth for our company. Again, a very strong performance, mainly, or almost exclusively driven by makeup. In Asia, +17%. This is very good news because it's a strong double-digit growth, driven once more by Korea, but also China giving us positive signs. As a matter of fact, China was also positive versus a year ago in the first quarter. Going to the results by customer type. First of all, I would like to remind you that as anticipated during our last earning call, we have reclassified certain brands from emerging brands to multinationals following the acquisitions that multinationals have done in the course of 2022. There is also a reclass concerning retailers, where some retailers moved to a multi-distribution strategy going outside their own stores, and therefore they've been reclassified from retailers to emerging brands. Having this in mind, the engine of growth was once more emerging brands, +57% versus a year ago. With multinationals confirming to be on a strong pace plus 29%, the only quote-unquote sore point, and I would like to underline quote-unquote, is retailers, which were flat versus a year ago. As a result of this trends, multinationals are now weighing for 54% of our sales, emerging brands 37%, and retailers about 9% of our total sales. Moving to what we are seeing. First of all, I would like to underline that this result comes after a very strong 2022 and a solid growth also in 2021, confirming the validity of our business model, the importance of innovation we are bringing to the market, and the fact that we are continuing to push through diversification of our client base, geographic span, and product categories. All this is paying very good dividends so far. In terms of market environment, I must say that and I'm crossing my fingers by saying that the picture is getting better in the sense that first of all, the supply chain is coming back to normality progressively. We said it starting from the summer of 2022, but it's continuing and is further improving, and this allows us to execute a lot better our production schedule. It's allowing us to digest the backlog that we've had in the past months, over a year in reality. This is all going in the good direction. Inflation volatility that was a sore point of 2022 is now under a lot better, a much better control in the sense that we don't see the volatility. There is inflation. The inflation is mainly driven by labor costs. This has been anticipated. It is incorporated in the price increases we have agreed with clients, and that will come into effect starting quarter two of this year. On the other side, you know, everybody's continuing to fear a recession. I must say that we are not seeing any softening in demand. The softening demand is not materializing yet. To the contrary, China, which we expected to come back to growth, is progressively coming back to growth. It's not yet the normal pace China should have or is expected to have, but is getting closer and is improving month after month. All in all, considering the good start of the year, or even the very strong start of the year, I would dare to say, and the outlook for the year, we are revising our guidance in terms of top line from +8%-11% of growth for the fiscal year to a +12%-+14% for the year. I want to underline that the growth will be concentrated in the first half of the year because we will go and we will digest the backlog in the first two quarters of the year. All in all, we have a positive view on the total 2023. Coming back to numbers, in terms of order inflow, you saw the numbers. They keep being very, very strong. In November, December, we had all our all-time high in terms of order entry, followed by two months of solid growth. We didn't have the what we could fear, a big decline in the following month because there was certainly an anticipation of order in view of the price increases that we had announced to our clients. It didn't happen. We did EUR 112 million over makeup and skincare in January, February. In March, April, we went back to EUR 120 million, which is still solid. This being said, I must say that, we are seeing reorders not as brilliant as in 2022, but this is so far compensated by a very strong pipe of new orders, so new projects that clients are buying, which is actually an even better position to have because new orders of today are reorders for the future. Going to my last chart, in terms of order book, we are now seeing a decline of order book versus year before. This was expected, and to be honest, desired, because it means that we are going back to a better service level to our clients is the function of a recovering supply chain in general, and therefore the acceleration of productions that you're seeing in our top-line numbers of the quarter. All in all, the order book trend is going towards the normalization that all our clients are expecting, and we're working very hard to make to materialize. That's all on my side. We are available for questions. 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 the touchtone 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 Rushail Al-Khuzaim from Morgan Stanley. Please go ahead. Hey, good afternoon, Renato. Thanks, thanks for taking my questions, and congratulations on a fantastic set of results. If I can, I've got three questions. The first one is can you break out the growth, in terms of kind of the D&G contract, and are you fully ramped up there at this point, or is there still more, more to go there? The second, maybe if you can talk a little bit more about what you're seeing in China, in terms of the recovery there, and are you seeing, you know, different types of demand levels for mass market products versus prestige at this, at this point? The third, with the upgraded guidance, I think that implies that your organic growth for the rest of the year will be somewhere around kind of 8%. Are you kind of baking in a level of conservatism there, or what, you know, what would you expect kind of from the rest of the year? I know you said it's more kind of first half-weighted, but if you can give kind of more color around that would be great. Thank you very much. Thank you, Rushail, thank you for your questions and for your congratulations. Let me come to your questions. Well, I'm not sure I will be able to answer to everything the way you would like me to answer to be honest. The growth linked to D&G, it's there, and it's obvious, and it's very visible in the Hair & Body business unit. I won't spell out the numbers, otherwise we will end up giving numbers for every single client. I cannot do it. Yes, we are in a growing mode. We are, you know, in the first quarter of this year, we've been in full speed, this is the trajectory. The trajectory remains at this pace because Dolce & Gabbana is going through filling the pipeline of distributors, retailers, so on and so forth. Obviously, in the second semester we will see what is the clear demand consumption driven, which I think is still a bit, you know, blurred by this pipeline effect that they are having, which is positive for us. It's positive for them because it means that Shiseido didn't overload the trade, which was one element of watch out we had at the start of the D&G adventure. That these are materialized, so they are filling pipeline. We will need to see what happens again in consumption terms. Yes, we are at speed on Dolce & Gabbana already in the first quarter. The second question is China. What we're seeing in China. Well, what we're seeing is that the market is normalizing. The retail data are becoming more positive. You probably recall I said in last earning call that they had gone from a double-digit decline into a plus 3.5. We are now moving to a plus 8% kind of range, which again is another move in the right direction. We're not yet at the growth pace that China normally had before all this COVID story. I think that, and we expected it to be a progressive normalization. This is what is happening. I must say I have no signs of worry. It's coming in as we had expected, it's following that path, which is pretty good. In terms of differences between mass versus prestige in China, I don't have that granularity of information. I would like to have it, to be honest. Frankly speaking, we're not seeing, or we are not getting from clients any message of trading down in terms of price point or anything like that. I think that there is normalization across the board, including mass and prestige. You know, you may have effects of the stocking of certain retails or certain channels, in terms of consumption, things are normalized, are normalizing progressively, as I said, we're not getting any sign of shift in between the two channels, prestige versus mass. In terms of our guidance, yes, you're right. It's a +8% in the year to go, based on, you know, what we're giving as new guidance. I would love to say that there is conservativism. I don't know. I think we are trying to be realistic. Again, you know, we have, we are going to have a first semester that is going to be strong then, you know, things we'll need to see what happens, you know, what is the pace of the market and all the rest. We always said, and I keep repeating it, although you may not take me seriously, that the normal pace of this company is between +8% and +12%, so more or less on average, +10% is the historical trajectory this company had. I don't think it's very surprising to have an expectation of a +8% in the year to go, given that we are coming out from a quarter where we had much, much better results, but they also are a consequence of the backlog digestion that we're going through. All in all, again, I would be super happy to disappoint you and give better numbers than what we're saying. At the moment, this is what we think it's, you know, correct and to give as a guidance to the market. I hope I've answered your question. Thank you. Thank you very much, Rushail. The next question is from Kate Rusanova from UBS. Please go ahead. Good afternoon, Renato, Pietro, and Andrea. Thank you for taking my questions. My first question relates to your profitability. With Q1 Adjusted EBITDA margin expansion of 180 basis points year-on-year, do you think that achieving 50 basis points margin expansion this year is now within reach? Would it be fair to assume that your gross margin expansion in Q1 was at or above 200 basis points year-on-year, considering strong operational leverage and the benefit from pricing? Maybe you can also provide us with the margin on Value-added sales considering a slightly dilutive impact from the partnership with Dolce & Gabbana. I wanted to ask about your growth in Asia, which came in sharp contrast to some of the beauty brand owners. In particular, we are now hearing a lot about the challenging situation in travel retail business in Korea due to the change in post-COVID regulations. Can you please elaborate on how this is impacting your business specifically, which of your three businesses is most impacted, and whether you see some incremental risk in the near term? Maybe just for housekeeping purposes, can you remind us what portion of your sales comes from Korea and China? Finally, it would be great if you can provide an update on the Indian opportunity because you seem to indicate an unprecedented level of interest in your industry from new countries, in particular India. I'm just wondering if you could provide us with an update on your plan there, your recently acquired factory in India. Do you think this opportunity can be vastly significant? Thank you. Thank you, Kate. You speak super fast, so I hope I've written everything. Sorry. I may ask you to complement and if I didn't get, everything right. Starting from the last one maybe. I'll start from the bottom where I'm sure I've understood. India opportunity, again, actually, I'm back from India. I've been in India in the past two weeks. I came back a few days ago. I had not been in India for a while, so I was very impressed by the level of progress in general I've seen. I've seen shopping malls and stores that I'd never seen before that are very modern. They are way better than what you can imagine in U.S. or in Europe. you know, they're really jumping. You know, there is a kind of leapfrog kind of development there, which is still very scattered, but it's evident that this country is going to go through quite a remarkable rate of growth and progress. For our market, India today is very small. Again, huge population, a very developing economy, middle class. Everybody talks, there will be a diamond shape kind of design in the population between different classes. Middle class is developing. Again, you know, we need to think about it in a very progressive manner. There won't be India being among the big consumption countries in the near future. It will get there progressively over time. I'm super bullish and positive about India, but it will take 10 years to get to sizable numbers, at least in our industry. you know, again, middle class is developing very fast, but, you know, what I've heard is that for them, someone who gains $12,000 a year is in the middle class. As you can imagine, the, the spending power is still relative, and it will take a while before it gets closer to the Western world or even China. What we are doing there is, we have bought this plant. We are progressively equipping this plant with the Intercos technologies. We are sending them the machines that allow them to produce the formulas of Intercos from the rest of the world. We have already started with lipstick, so we have already started producing lipstick of Intercos technology for a couple of clients there. Powders is the next steps. Machines arrived already, so we are mounting them, and then we will start doing tech transfer of our formulas there. Progressively, you will see all the technologies being there by the end of this year. In terms of clients, we have good connection with a number of local players. There will be progressive growth. Again, I believe a lot in this country. We will do anything possible to gain a lot of market share there. There is an inherent difficulty in pricing terms nowadays because of the price points that the Indian brands have that we need to take into account. You know, we are committed to be there and to be a key player in India soon. It's very interesting. I'm very positive out of my visit there, but it will take a while before it become, you know, material in terms of numbers. Korea and China, you know, all in all, you know that Asia, in total, weighs, in the quarter, 15% of our sales. The split between the two is almost 50/50, which, you know, in reality is driven by the fact that Korea serves a lot of Western brands for the Asian markets in general, not only for the local market. Actually, the local market is a minority of what they buy from Korea. Again, within Korea, you will have about 50/50 coming, maybe 60/40 in the first quarter, coming from local clients and Western brands, buying out of Korea. This is a bit the split that we have between the two countries. Private retail Korea, I must say that we do not have a direct exposure to that. I've obviously read what L'Oréal and Lauder have declared about private retail in Asia in general. It's a phenomenon from what I understood of this talking of retailers. Again, we don't have a direct impact. We may have an indirect impact, but the proportion of it's not big in our numbers, or at least I cannot isolate it from the rest. We're looking at it in terms of repurchase from the prestige clients, all in all. I must say that, yes, there are differences, you know, client by client, product by product. All in all, we are not seeing any visible turmoil from that effect, at least in our numbers again. Then I come to the difficult questions because I'm not sure I got it completely. The first one, I think that you were saying that based on the results we had in terms of profit margin in the first quarter, whether I believe it was possible to realize a 50 basis points increase in the year versus a year ago. To be honest, at this point, I would not modify what we said. We always said that 50 basis points is what we should expect from a company like us in a normal year. We always said that there will be a dilution coming from the Dolce & Gabbana effect. This dilution is there, is visible. We are seeing it. We are, you know, I would tend to confirm what we always said so far. It's true that in the first quarter, we are getting a gain which is more sizable than the 50 basis points. Even the 50 basis points is also true that the comp was particularly depressed and that, you know, there is a lot to run before we cross the ending line. I wouldn't move by one inch for the time being. Again, like I told to Rushail, I would be super happy to disappoint you and to deliver 50 basis point, and if possible, even more. For the time being, I don't think we have enough facts to say that we will do more than what we said in the previous occasions we had. You had another question on margin, which I'm sorry, I didn't get. Yeah, sorry. That was about the gross margin. Just wondering if it's fair to assume that the increase in gross margin was above 200 basis points? We don't disclose numbers of gross margin. I will only give you a qualitative answer because I don't want to leave you without any answer at all. Gross margin has improved in the first quarter. That is a function of two elements. One, obviously, is the absorption related to higher volumes, the second is that as any normal year, we have restarted working on productivity projects that are bringing good results. We are pretty happy about the results we got in terms of gross margin all in all. I won't give you numbers, I'm sorry. Okay. Thank you very much. Thank you, Kate. The next question is from Anna Frontani from Berenberg. Please go ahead. Hi, Renato, Pietro, Andrea, congratulations on the results. I have three questions for you. The first one, if you could split the 33% growth in pricing and volume. The second one, if you can provide the level of the EBITDA margin, but on Value-added sales. The third one, maybe on Cosmoprof, can I ask how was clients' attendance, and maybe whether the product innovation worth highlighting? Okay. Anna, thanks for the congratulations and for the questions. The first one is super easy. Out of the 34% growth, 1% was currency, 1% was pricing, the rest is volume. I would tend to say simplifying things that is basically all volume-driven in reality. As you know, we have increased prices, but, you know, the price increase was done on the purchase orders that were issued as of January, which means that we will start seeing an effect in Q2 and the following quarters. Nothing basically in Q1. That is the first one, which was pretty easy. The second one is EBITDA margin on value-added sales. I have your friend Andrea and Pietro here are banging on me. We do not disclose it. Only out here. Only out here, you will need to be a bit patient to see that. Obviously, it's progressing, again, sorry, I will give a qualitative answer. Obviously, it's progressive in the good direction in terms of EBITDA on value-added sales as well. Cosmoprof was, I probably mentioned it already, in a previous call we had, it was a very positive Cosmoprof. For the first time, I really had the sensation that we had turned the page of COVID. A lot of, a lot of clients, a lot of new clients, a lot of new players. You know, coming back to the example of India, we had a number of big companies that are not present in beauty, that are getting interested into beauty and are starting to move in that direction, so a lot. We had Chinese coming back, Asian coming back. There were Americans, probably a bit less in proportion. All the Europeans were there. A lot of interest again and energy again in the industry. We as a company met 350 clients in a week, which I think it's, I don't know whether it's our record, but I can tell you it was super busy. We had a number of innovations that were particularly interesting. I will mention a couple of them. One, which is related to skincare, but not only. It's a new ingredient that we have developed. Actually, more than developed it, we found a way to use it in a very effective way, which is called Phytosome. I think it's still pending, we have [Foriegn language] brevetato, we say that? Patented. Patented. Thank you. Sorry. It has applications because it creates a kind of a second skin, but on top of that, so which has peculiar soothing capabilities, it really gives a texture to your skin which is unique. On top of that, it works a bit like liposomes carrying other actives. You can customize it to give it, you know, anti-wrinkle purposes, properties or sensitive skin properties or moisturizing properties. It's a very flexible technology. There are several applications, this is a very strong innovation that I think will give us very good results on skincare. The other thing which is very interesting, it's a natural raw material that we are finding applications that are equally interesting for makeup. During Cosmoprof, we presented as an example a mascara and a powder foundation that has Phytosphingosine as a binder, which is again, natural. It's going in the clean, quote-unquote, "direction," and has very, very strong performances. We're super excited about this one. Another one is that we have, we found a way, for instance, to formulate lipsticks without waxes, which, you know, we've checked on ChatGPT, and is something that ChatGPT says is impossible. We've done it, and we are presenting it to clients, and this one is also raising a lot of interest from a number of clients. In terms of innovation, I think that we have a lot going on. The fact that we are seeing new orders increasing, it's a good sign, as I said before, because it confirms that the innovation we are bringing to markets and to our clients is responding well commercially, which is what counts at the end of the day. Thank you very much. Thank you, Anna. The next question is from Molly Wylenzek from Jefferies. Please go ahead. Good evening, guys. Sorry, dog in the background. I wanted to come back on the comment you made about softening reorders a little bit, but being compensated by new orders. Just what's driving that? Is it client mix? you know, more emerging brands versus multis? Is it, you know, shortening innovation cycle, your innovation pipeline? Just any color on that would be great. Yes. Hi, Molly. No, this is just, I think, the first signs of what I've been advocating for about 18 months. I always said that clients were anticipating orders to cope with supply chain disruption that was creating a lot of problems in terms of fill rate for them in the stores, linked to the unpredictability of the supply chain, but also linked to the longer lead times that the supply chain was running. They were all anticipating orders. This, again, I said it last time again, it's not normal, and time to market will inevitably and should go back to where it was before this supply chain crisis. Since things are normalizing, as I said before, and our numbers are showing it, and the fact that our portfolio of orders is going down despite the inflow of orders remain strong, is the proof that we're now going back to a normalized situation. It's obvious that clients go back to their normal order pattern, which means that there will be a period where we will see orders going down because they have, you know, issued orders in advance, and they will not continue to keep that pace. They will re-normalize based on that. Obviously this impacts reorders because new orders are new products, so they don't have it, and so that is a different game. Reorders going down, it's normal. It's nothing to worry about. It's, it will take some months to go through a normal situation. It is what I expected to happen a lot before, and that's why I've lost a number of bets on the topic. Now we start getting the first signs that this is happening. Again, I'm super happy it happens at the moment when the new orders are going up, because at the end of the day, the reorder thing is by definition a temporary thing, because if consumption is there, they will have to reorder. You know, the new projects are there for the future, and they are the insurance for the years to come in terms of business. You know, all in all, I'm not surprised, number one. I'm not worried, number two. You know, it's all normal, I would say. I hope I've answered. Okay. Thank you. Okay. Okay. Thank you. The next question is from Roberto Casoni from Otus Capital Management. Please go ahead. Yes. Hi. Good evening. It's Roberto Casoni. Hi Renato. Some of my questions have been already asked and answered. I have some a few others. One is related to your to your price increase for 2023. You say that most of the impact will start be seeing in Q2. Already in Q1, we saw a margin expansion. Can you give us an idea as much as you did by giving us a split price volume, say, in Q1, can you give us an idea of what has been the average price increase we should see appreciating from Q2? The other thing is on cost inflation. You say now it's the visibility is there. There's much less volatility. Wage inflation is possibly the main component of an inflationary trend. last year you had around EUR 230 million, I think, staff costs. What should we be expecting as an organic growth, so excluding new employees, in terms of wage inflation? Thank you very much. Ciao, Roberto, thanks for your questions. Well, the price increase we've done was, you know, 4% on average, knowing that in the Western world, it was more 5%, and in Asia was about 2.5%, 2%, 3%, depending on the client, on the category and so on and so forth. 4% on reorders, again, which are 70% more or less of our business, gives you a 2.8%-3%, call it, price impact. Which is by and large what we are expecting in terms of inflation related to labor. This is again, you know, there is a huge, huge differences by country again. If you go to Poland, it's double-digit in terms of labor cost increases. If you go to Italy, it's low single digits again. All this is, you know, there is the labor cost, but you cannot take mathematically the cost of last year and increasing it by the labor cost percentage I'm giving you for the simple reason, I'll just give you an example. We are in our operations working to automatize more and more our plants, so we will have less need of temporary workers or workers on the lines because we are, you know, improving the automation of our of our industrial footprint. All in all, the price increase we did was meant to absorb the impact of labor inflation, which we had expected. We did a bet that we would have not had, have had the an increase in general in terms of raw materials and components and transportation, which is another important element in terms of costs. This is so far materializing. The visibility we have tells us that, yes, we've been right in doing so. To be honest, I don't expect a margin improvement related to the price increase, but I do expect it to come from the efficiencies and the productivity that we can bring and we are bringing into our system in a more normalized year. Right. Right. That's very clear. If I may, a comment on your answer. If I look at Q1, and given the answers you gave earlier and to this question, I should expect that in Q1 you had already the labor cost with the wage inflation, but you didn't have the 2.8%-2.9% increase in prices. Nevertheless, we had quite a considerable expansion of margins, which is possibly due to, you know, the best use ever of your capacity. Sometimes when you're basically operating at 110% capacity, you have some extra costs, and you work on Saturday and Sundays just to deliver on time. Something that maybe we are not seeing in H2. My question is, despite all this, I mean, it makes me feeling like, the 50 basis points is margin expansion with or without Dolce & Gabbana. It sounds pretty conservative, is it? Roberto, again, I will repeat what I said. I hope you're right. Okay, no. Fine. I hope that we will get to the ending line. You've been right, I will be the happiest in the world. I will give you a call to tell you were right. We will be with you, so. Yeah. I'll even buy you a beer. In reality, you know, let me talk first about the wages and the price and what you said. What you're saying is correct, starting from an assumption that is not exactly correct, which is that the wage increase starts January 1st, and this is not true. It starts. Okay. At different points of the year in different countries. China is doing it as we speak now, as an example. In Italy it's even later than that. It's scattered through the year and is actually in no one of our countries we have wages increases starting January 1st. Okay. So it's, it's a- Okay. That was my assumption. Yeah. It's proven to be wrong. Okay. Yeah. No, you know, your reasoning is correct, but the starting point is what, you know, makes it being incorrect in terms of result. Yeah. And again- Yeah. You know, we are only at quarter one. I'm sorry, I'm paid to worry about the future more than being happy about the past. I'm happy obviously, about the quarter one, don't get me wrong. It's, I think, a very good set of results. We still have nine months to run and, you know, I don't like to promise things that I'm not, you know. I wouldn't say 100% sure, because I'm never 100% sure. Even, you know, 70% sure I can deliver. I would be more than happy to do a lot better than 50 basis points. At this point in time, I don't think we are yet in a position to be confident about saying that. Okay. That's very clear. Thank you very much. Thank you, Roberto. The next question is from Mikheil Omanadze from BNP Paribas Exane. Please go ahead. Hi all. Two questions from me. The first one is on the order book. Please correct me if I'm wrong, but the way I understood your comments is that by the end of Q2, you expect to have delivered all the orders which comprise the order backlog. I.E., does it mean that you expect your order book to be at sort of a normalized level at the end of Q2? How should we think about that normalized level as a% of sales? That's question number one. Question number two is on Dolce & Gabbana again. I just came across an interview with, the CEO of D&G Beauty, Gianluca Toniolo today, it's actually from today, where he says that, he aims to triple the business in terms of sales, in the next three years. I was wondering just do you actually have enough capacity to meet such demand if that's the case? If not, do you have any plans already to expand your capacity for fragrances? Thank you. Hi, Mikheil. Thank you for your questions. Order book. Yes, I expect to be in a situation at the end of Q2, where we will have digested, you know, the vast majority of the backlog. I think we will be at that point in a quote unquote, normal situation and normal trend. This means that you will have. You had it already in Q1. You will have in Q2 part of the this digestion showing positive numbers in our P&L. From there on, we will be getting into a normal, you know, consumption order production and therefore invoicing kind of situation. Coming to the... what Gianluca said, and it's funny because I spoke to him 10 minutes prior to our call. Well, you know, it's he wants to triple the business. I would love him to do it. To be honest, I hope they're gonna make it. I think it's pretty bullish. I think he didn't say how long will it take, so we will see. Again, I hope that they will be growing. I hope that they will be growing as fast as they are planning to. As you know, we've made an investment very recently because we opened our new fragrance production facility in Italy for the production of fragrances in January, so it's pretty fresh. Yes, we are ready to invest more. Obviously, if they really triple the volume, we will need more space. No question about it. It's for sure. Are we ready to do it? No question about that. Yes, we are ready to do it. Let's see what happens, you know, and how long it's gonna take. You know, they have very ambitious plans. I know that. We will do everything we can to support them as much as possible. Again, I would tend to... I think they are in a moment where they see the pipeline filling numbers and they're getting, you know, super enthusiastic about what it is. You know, consumption is the real jury. You know, pipeline is a one-off. Consumption, it really gives you the sense of what is gonna be in the future. Again, I hope they're gonna be super successful. We are partnering with them. We hope all the best for them. That's very clear. Thank you. Mr. Semerari, there are no more questions registered at this time. I thank you all for your time and your attention and for your questions. Thank you very much. Thank you. Thank you. Bye-bye.