Good day. Welcome to Quarter One 2023 Trading Update conference call. My name is Priscilla. I'll be your coordinator for today's event. Please note this call is being recorded. Your lines will be on listen only. However, you will have the opportunity to ask for questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Bas Schreuders, the CEO, Mark Faasse, the CFO, to begin today's conference. Please go ahead, sir. Good morning, all, and welcome to this call on our Q1 2023 trading update. My name is Bas Schreuders, Interim CEO of B&S Group, and with me here on the call is Mark Faasse, our CFO. As you know, following our upcoming AGM on Monday, May 22nd, Peter van Mierlo will be appointed as our CEO. For the next calls, it'll be up to him and Mark. I do realize following the publication of our full year 2022 results, we all spoke not too long ago, please allow me to be a bit brief today. I will take a few minutes to walk you through the highlights of the Q1 2023 trading update that we published this morning. After that, I would like to open for Q&A. As you may have seen from our press release, we delivered another quarter of solid growth in revenues to EUR 525.9 million for the quarter. This corresponds to a turnover growth of 16% or EUR 55.9 million, of which 14.7% was organic. The acquisitive growth related to the acquisition of last year of Europe Beauty Group. Foreign currency exchange effects contributed EUR 10.7 million or 2.4% to the mix. The revenue growth was broadly spread over all segments with stable revenues in the food segment. All other segments showed strong increases with an outperformance in retail and personal care. Our overall growth margin was stable when compared to the same period a year earlier, a solid result in light of the inflation that continues to impact both our cost base as well as consumer behavior. We continue to grow our workforce, mainly as a result of the opening of the new logistics center for FragranceNet in the U.S., and as a result of the newly opened airport shops and increased operations in our retail segment. All in all this, in combination with the aforementioned inflation, led to increased costs. Let me zoom in into our segments starting with B&S Liquors. In this segment, we achieved 16.7% growth, mainly as a result of the increased demand for specialty items in the international markets, a continuing trend. Since the latter part of Q4 of last year, we have also seen, however, that there is an increased product availability in the market, which impacts our gross profit margins. In B&S Beauty, we achieved 13.3% turnover growth, of which approximately EUR 6 million resulted from the acquisition in France. The B2C business, which includes FragranceNet.com and Europe Beauty Group, was the main contributor to the turnover growth. Our margins remained stable. Marketing and shipping expenses were also stable compared to the same period last year. For B&S Personal Care, turnover increased strongly, mainly as a result of its well-managed stock position while the market was very tight. There was a very broad variety of items in stock, including an enhanced private label assortment to meet the increasing customer demand. This led to a growth of 31.6% in turnover over the period. As mentioned before, revenues in B&S Food were stable. This was a mixed picture with strong growth in the food service distribution, which bounced back strongly after the COVID period, offset by a decrease in the brand distribution services. This decrease was due to the deliberate choice to focus more on margin development instead of volume growth, which has resulted in a strong improvement over growth margin. B&S Health. Revenues in this segment increased by 14.3% compared to last year, mainly the result of the recovery that we have been seeing for the past couple of quarters in the travel related vaccine business, which returned after the pandemic. Although we continue to see supply shortages, overall, market conditions have improved compared to last year, which is also a positive for the segment. Now our last segment, B&S Retail. It achieved a 42.8% growth in turnover, mainly as the segment was still impacted by the aftermath of the pandemic in Q1 last year. The number of stores opened and the number of flight movements this year is significantly higher, although not yet at the levels we projected. A few words on our financial position, which remained healthy in the period. working capital and working capital in days decreased when compared to the same period last year. In line with increased availability, limiting the need for large stocks, plus increased focus on stock rotation and more in general, focus on working capital management. That brings me to our outlook. Inflation is expected to continue being effective for the coming period in our cost base as well as in consumer buying behavior. We continue to believe we can grow our top line, but not as steep as last year, and we expect a slight improvement in growth margin. This will be driven by focusing on higher margin business rather than volume-driven sales. Staff costs are expected to continue to increase, and we will enhance our focus on cost control management. With that, I conclude my remarks on our Q1 2023 trading update. I would now like to open the call for questions and hand over to the operator. Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Tijs Hollestelle from ING. Please go ahead. Your line is open. Yeah, thanks, operator. Good morning, gentlemen. Let's start with the liquor division. I see your comments in the press release here that decrease in the gross margin. There was already quite an difference in the first half versus the second half of last year. Based on your remark, I guess that the gross margin in the fourth quarter of last year was clearly below Was it 8.6% you recorded for the second half? Is then the gross margin then dropped even versus that number? Is that a correct way to interpret it your statement? Not quite. It goes, you make a fair comment as compared with regard to the growth margin second half versus the first half last year. The growth margin as of the fourth quarter as compared to the first quarter is slightly higher, but still below the average of the first half of last year. Significantly. Okay. Yeah. Normally it takes B&S a couple of months to restore the margin. If there's price volatility, it leads to temporarily margin pressure. If markets stabilize a little bit, you're also able to reprice it, and then margins are back, let's say, a bit more than one quarter. Is this dynamic still in place? We would expect it to be definitely yes. As you are aware, I think the current market circumstances are not as predictable as you. Exactly. For that, just to be quite frank, Tijs, we need to wait and see. Yeah, okay. No, I see what you. That's always the case, but it seems that inflation at least is, yeah, slowing a bit. Of course, if it increase again, yeah, I understand that it will be difficult. The dynamic should work as it has done in the past as well. Yeah. Yeah, your customers are still accepting, let's say, new prices. I mean, you're just broke in between demand and supply, so yeah, you can place your margin. That's what B&S Group always did. That is basically the background of my question. Yeah. Also on the liquor division. Last year, the second quarter was showed a bit more than 40% year-on-year growth. Of course, coming out of the lockdowns, euphoria, I guess, and the consumers and all kinds of venues opening up. Would you say that that quarter was an exceptional quarter or was more an accurate reflection of the back to normal last year? The reason I'm asking is, of course, to guessing the year-on-year comparison base for the second quarter of this year. No, I would say. As we see the current market developments, yes, it's well noted that the second quarter last year was an exceptional high increase as compared to the second quarter in 2021 with all the known circumstances, et cetera. As such, the second quarter for 2023 would be expected to be more in line with the second quarter 2022. As such that, the second quarter 2022 can be used as a, I would say, a base comparison for the second quarter in 2023. Okay. Okay, that's very helpful. Thank you. Yeah. I'm not sure how many people on the call, so I will continue with a couple of more questions. Yeah, on the, on the airport retail, so, quite strong growth indeed. Reading between the lines or listening to your comments, you're not back at where you want, because I think pre-COVID levels were close to EUR 30 million in the first quarter. Meanwhile, you also added new stores, and you bought some additional possessions. What are the dynamics, that, yeah, that are still holding back, let's say, the revenue levels? The dynamics are twofold. First and foremost, of course, the main item are the number of passengers, which are recovering as compared to the COVID periods. Yet not at the levels we projected for the first quarter. Secondly, we do see that the spend per customer is under pressure. Therefore, the combination of the two result in the turnover we reported, which is clearly below what we were expecting ourselves. Okay, that's also clear. One final for now then. Healthy balance sheet metrics you mentioned. I think that last year the clean interest expenses on the bank facilities were a bit more than EUR 8 million. What do you expect for 2023 as most of your debt is variable? I think probably also linked to the covenants. What do you expect there to be the full year take for interest expenses for B&S this year? For debt, as per this trading update, Tijs, you are aware we don't go into details of the full year, and also not for a period results. We do expect to give you some more color on the EBITDA margin and below to net results as per half year update. Okay. Probably higher. That is a fair estimate. That's why you're quite a good analyst, Tijs, to expect this. No, honestly, yes. Of course, it's a fair estimation. It might depend on the, on the hunger of the banks, isn't it? Yeah. Different department, gentlemen. Yeah. Okay, thanks. Thanks Thanks a lot. Thank you. Once again, ladies and gentlemen, if you would like to ask a question, please press star one. We'll move on to our next participant, Robert-Jan Vos from ABN AMRO ODDO BHF. Please go ahead. Your line is open. Yes. Hi, good morning all. Thanks for taking the question. You, you reported organic sales growth excluding acquisitions of 12.3%, including it was 13.6% or so. A very strong start to the year, but still you keep your outlook unchanged. You say that organic sales growth will continue, albeit lower than last year, when it was around 10%, I believe. What is it? You already addressed this in one of Tijs' many questions. Is it mainly the second quarter, which is a quarter to be aware of a tough comparison base? Are there other things to flag, segments to flag or maybe also quarters, where you say, "Okay, be careful there, because we have a relatively tough comparison base." Maybe you can elaborate a little bit on that, because I'm trying to figure out how we get from the Q1 12%-13% growth to below 10% for the year. Okay. Again, as flagged by Tijs as well, and you indicate now yourself, the 2Q last year was the most significant turnover growth quarter. The remaining quarters also indicated a significant growth, but it decreased towards the end of the year. Of course, because the 4Q in 2021 already saw a significant part of the recovery. As such, the turnover base, I would say, for the quarters reported last year give a, as indicated to Tijs as well, give a good basis for our projections. Yes, the 2Q is the most significant loss increase last year. As such, we do not expect to reach such a significant increase. Had a lot of bounce back in that 2Q. Overall the turnover realization as we did last year, give a more fair basis, to project our turnover for this year. As such, to a certain extent back to normalized levels. Okay. Does this answer your question, Robert- Jan? Yeah, pretty much. Is there anything to flag within the segments that we should be aware of? I mean, yeah, Retail is still not back to pre-COVID levels, so I assume there's still clearly some upside potential. Is there anything to be aware of in the coming quarters in a specific segment? No, nothing specific to to to flag at this stage, Robert Jan, besides the general statement I just made. Okay. Okay, that's clear. Yeah, I noticed, of course, that you repeated pretty much the outlook, that you only gave, I admit that a couple of weeks ago on the 17th of April. Should we assume that as the year progresses and you now only say something about the slight improvement in the gross margin as the year progresses, is it fair to assume that you will also say something about the EBITDA? Yes. If we have a clear view as you might expect from us and just indicated to Tijs as well, that we might be able to provide you some more color on these subjects as per the half year results, together with our new CEO, Peter van Mierlo. Makes sense. Thank you. Thank you. Once again, if you would like to ask a question, please press star one. We'll take our next question from Henk Slotboom from The Idea. Please go ahead. Your line is open. It's his colleague, Maarten Verbeek of The Idea. Thanks for taking my question. Firstly, please, a clarification. You mentioned that gross margin was stable. I presume that it excludes the charge you took for the doubtful debt, also since that was announced in the year, at the first half year figures. Attached to that, when you make your outlook statement concerning gross margin, I also presume that is adjusted for the EUR 15.8 million charge. The first part of the provision we took and communicated as per half year, last year, that was one which was impacted the second quarter results. Yes, the Q1 on Q1 comparison is on a like for like basis. Furthermore, we did not provide any specific guidance on the gross margin for the full year. Of course, looking at the 2022 gross margin, that of course includes the nearly EUR 60 million one-off in there. Does this answer your question? The first one, yes. The second one, you mentioned that you project still a slight improvement in gross margin compared to full year 2022. Just to be clear, what's then your comparison base? That's the normalized level we compare. Okay, the normalized level, so excluding, the EUR 15.8 million. Yes. Okay, thanks. Then secondly, Robert-Jan also already mentioned, but there is still a small difference in your outlook statement. Now you mentioned that you're gonna focus on cost control management. Whilst a month ago, you still mentioned that you also want to maintain the other operating expenses at the 2022 level. I was just wondering if that latter one is still valid or not? Look, the fact that we mention it like this, we clearly look at the Q1 results. There, as mentioned, we have some focus work to do. Okay. Still, are you willing to repeat that statement of April 17th? If we would, we would have included it, explicitly. Okay. Thank you very much. Thank you. We'll move on with our next participant, Tijs Hollestelle, for a follow-up question from ING. Please go ahead, your line is open. Yeah. Thank you, operator. On the follow-up, there was also a remark on the OPEX levels, the marketing costs. I noticed that the marketing cost almost doubled last year. I saw that with a lot of companies now, I think also as a result of COVID disappearing. Is the remark based on, let's say, the year-on-year comparison in the first quarter of this year? No. Specifically expect it to increase for the full year budget? No, it's a, it's a quarter-on-quarter comparison. Where the remark originates from. That's the first part of your question. Secondly, the marketing costs as such for the full year as compared to and in line with our top line, we expect to keep growing. Especially as you might assume, growing our B2C turnover, this might also increase along. A normal historic development with the top line is a fair assumption. Yeah. Okay. In terms of, I mean, wage inflation is also a big issue for a lot of corporates. Is there any specific timing for, and first, let's say, an expected increase in a certain quarter that this wage inflation kicks in? Or is it just gradually kicking in throughout the year for B&S Group? Gradually, I would say, definitely. Okay. How much do you guess is the average increase? You keep coming back, Tijs, at bits and pieces of the EBITDA margin, right? Is it that obvious? Yeah. Confirmed. Okay. Okay, I will leave it at that. Thank you. We'll move on with our next participant, Patrick Roquas from Kepler Cheuvreux. Please go ahead, your line is open. Good morning also. Quick question from my side. It's, I mean, I know you don't break down your organic sales growth in volume and price, from our understanding for your model and what's going on, any indication, what pricing was in Q1? Is that a high single digit figure or more? Without breaking it into indeed specific details, it's fair to assume that the turnover growth is a combination of both with the vast majority still being volume. Of course, pricing, as within the full market, also went up for us, both our purchase and our sales prices. We have been able to keep our gross margins for the quarter relatively flat. Yeah. All right. Thank you. That's it. Welcome. Thank you. Ladies and gentlemen, if you have any questions, please press star one. All right, dear speakers, it appears there is no further questions at this time. I'd like to turn the conference back to the host for any additional closing remarks. Thank you. Thank you, operator. Thank you all for joining us this morning. Should you have any additional questions, please do not hesitate to reach out to us. Wish you all a nice day. Thank you. Thank you for joining today's call. You may now disconnect. Have a nice day.