Hello, and welcome to the nine-month 2023 trading update. My name is Jess, and I'll be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen only. However, there will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero, and you'll be connected to an operator. I will now hand over to your hosts, Peter van Mierlo, CEO, and Mark Faasse, CFO, to begin today's call. Thank you. Good morning to you all. Thank you for joining our call, trading update, third quarter. Yeah, as you've seen in the press release, we've shown a solid performance over Q3, and I'm sure that you have noticed that we didn't change our outlook, and that was all for the right reasons. There are definitely different trends throughout the six segments, different markets. So maybe to the benefit for you all, let me reflect a little bit on each segment before I will share some thoughts about the overall company. Why don't I start with liquor, just like in the press release? Regarding liquor has two sub-segments, wholesale and global trade, which are not necessarily impacted in exactly the same way due to macroeconomic or global geopolitical tensions. Wholesale is developing as expected, I would say. Global trade is still influenced by difficult market circumstances, which are mainly driven by the macroeconomic circumstances and geopolitical affairs. If I look at beauty, beauty is currently in Q4, is the most important quarter for beauty, as you probably all know. Beauty is operating in three different sub-segments: B2R, B2B, and B2C. The developments in B2C are promising. B2R is fine. B2B is developing as expected. B2C is still dependent on, consumer buying behavior, which is partly influenced also by macroeconomic affairs, but also by inflation, obviously. It is... Q4 remains our most important quarter, in terms of turnover and EBITDA, and I must say that the segment is, is very well prepared to accommodate the additional demand during the festivity seasons. And that's, that's not only, Christmas, right? I mean, Q4 has globally a lot of, a lot of celebration days, which are different across the different continents in this world. If I look at personal care, yeah, personal care has a very, very strong year, or a strong year, I should say. It's, it's, it's partly driven by specific market circumstances, product scarcity, and widespread inflation. They have both collectively contributed to our turnover increase to last year. Strategically, the mix of revenue is, has also favored more the brand and private label assortment, so, and which is strategically, obviously, a strong development. If I go on with food, food improved the gross margin. It works across the three sub-segments, in terms of maritime, in terms of, duty free shops, and in terms of, export. It's developing well. I must say that, the composition of turnover is more and more towards supply chain relationships with individual clients. IT is an important aspect in building that relationship. Web-based sales, but also to better integrate our own IT system in the whole supply chain with clients makes it, yeah, it just shows a strong development this year, I must say. Health is steady, positive developments in the vaccine business. Also, additional focus on operational excellence, and it's moving into the right direction. Travel retail, last but not least, yeah, travel retail is still maybe not suffering anymore, but the market has not completely stabilized again in terms of the number of travelers, passengers at the different airports, and also the composition of the travelers is still different. So people from Russia, people from Asia, are less present than they used to be in 2019. And the business traveler is coming back, but yeah, more slowly than we had hoped for, I think, I guess. And in terms of where Travel Retail is also at, is that it has opened shops in 2022, also in 2023. So there's a lot of investment, and it will benefit from full year effects into the into the future. Yeah, overall, yeah, we're looking forward to share our thoughts on on strategy and developments on November the 21st in Dordrecht, on our Capital Markets Day. We will in those two hours, we've planned the meeting between 10 and 12, and we'll make sure there's some coffee. And we will focus on each of the six segments, six segments, but also on the role of the holding. So in terms of what role the holding is playing towards the six six segments in the whole company. Methods that we would like to address is an outlook per segment, obviously. We will explain the role of the holding and the way we look at this, the way forward, operational excellence. We will talk a bit about the improved governance, additional strategic options that we are looking at, and our view on the group as a whole, our mission, our values, but definitely also our synergies between the six segments. I'd like to open up for questions, if that's the right timing, and we will do our utmost in answering those questions, if there are any. Please. If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally, as you will be advised when to ask your question. The first question comes from the line of Robert Jan Vos from ABN AMRO ODDO BHF. Please go ahead. Yes. Hi, good morning, all. Thanks for taking the question. A couple of questions. You are pretty clear on your group EBITDA margin expectation for the year, it has not changed. So that's, for us, maybe the easy part, but looking within the segments, it's a bit more difficult. You had another stellar quarter in personal care. When looking at historical margins, I've seen that in most years, the second half delivered higher gross profit and EBITDA margins in personal care than the first half. My question is: Is this a pattern to expect for 2023 as well, and now that you have banked another very strong Q3? And related to that, do you expect to be EBITDA positive in liquors in 2023? That's my first question. Okay. Uh- Mark? Yeah, sure. So, good morning, Rob Jan. So regarding your first question, the deviation between performance first half, second half of the year, especially for this, for this segment, yes, historically, the second half, also for personal care, tends to be slightly better than the first half, which is a trend which we expect to continue. But yet, please also take in mind, bear in mind, that as per, I would say, Q4 last year, the tailwind for this segment already started. So we saw already some improved gross margin there based on the composition, product availability, the items which Peter just mentioned. And then, secondly, on your question regarding liquor, although it is a trading update, we normally don't provide too much detail regarding profits. We can highlight that we do expect a positive EBITDA for the full year. Okay. That's very helpful. Thank you. Maybe continuing with liquor, there was this EUR 1.3 million mentioned at half year, which was still left in doubtful debtor, debtors, for which- Yeah ... no provision was taken at the time. And there was, I believe, EUR 3.6 million, for which there was provision taken. Can you update us on this, this last part of that, those doubtful debtors in liquors? Is there anything to mention there? Yeah. What I can mention is that we did not take into account any further provision on this on this subject, but also that the subject has not yet been cleared. So it is still something which is ongoing, but the situation did not worsen as compared to half year. So we're currently still working and expecting to, yeah, to be able to provide more insight on this one as per full year. But as such, to conclude, there's no indication and/or reasoning as to provide for further amounts as per, as per date. Okay. Also very clear. And then, I also had a question on the paragraph about cash flow and financial position. You explained that you agreed a different distribution of the covenants throughout the year. Yes. Yeah, basically my question is: Was this needed? Was this necessary, or unnecessary, or in other words... at the end of Q3, did you stay within your previous thresholds as well, or was it also necessary to have these- No, no, no, Robert Jan, Robert Jan, this is, this is important. I think, I think in general, Q4 is just an important quarter of the year, right? As I have already explained, and as a result, it would be helpful also into the future if our covenants are slightly different in Q3 as in Q4, and we started that conversation with the banks, and they all actually cooperated very nicely. And, as you've, as you've seen, we were still within the borders of the original one. But anyway, so in the end, yeah, so we did not utilize the changed ones, if you're referring to that. So it was not... If we did not change, Robert Jan, that's probably your question, then so we're not at the new imposed covenants. Yeah, that's exactly my question. So very clear. Thanks. And my final one: Is it possible to- We could have run the business also within the original covenants. Yeah. But it's just, but it's just better to do it this way. Okay. That's the reason why we asked for adjustment. Okay. Very clear. My final one: Is it also possible to quantify the year-on-year absolute revenue impact from the new locations or the new shops opened in retail? How big of an impact was that compared to last year, Q3? Well, that's... No, I definitely don't know this by heart, Robert Jan. But there are definitely shops that have opened in 2023, I believe approximately five, but it could also be six or four. In 2023 we opened, that's the 2022. So in 2022, there were three additional shops, and in 2023, 12 additional shops opened. Yeah, yeah. Throughout the year. Private, private locations, so to ourselves. Yeah. Yeah. So, if you're really interested in that, then we're happy to explain that in the future calls, Robert Jan. Okay. Thank you. That, that was it from my end. The next question comes from the line of Tijs Hollestelle from ING. Please go ahead. Yeah, morning. Thanks, operator. Morning, gentlemen. Yeah, I also had some questions on the gross margin, like Robert Jan. But in food, the dynamics are also the same, yeah? Because it's also very, very strong gross margin in the first half of this year compared to the prior periods. So you do see that continuing in the second half? Gross margins improved, whether the first half year gross margin improvement will continue in the second half year? Yeah, more or less so. Yeah. Become a little bit more challenging, but yeah, so again, there's also the... Indeed, continuing as compared to the first half, yet, I would say, at current market circumstances, we need to do more on our utmost to keep those levels alive. Yeah, that's, that's helpful. And I mean, I think that you already did a pretty good job on managing the OpEx in the first half. Is there... Where are the most challenging situation on the cost inflation in the OpEx within the division? Is there any specific area, or are you really worried about a certain cost component, or can you still manage that general cost inflation quite well? That your question implies that we are worried, Tijs. So, we're not worried. I'm worried, yeah. Oh, you're worried? Now, look, as previously mentioned, looking at our staff cost development, as well as OpEx in general, yes, it is a trend which of course has fully our attention, and I think it's across the market, which this trend is notable. I would say that the increasing trend is, at least in this quarter, we have seen that there is still an increase, but yet less steep as compared to prior quarters. Yeah. But without going into too much detail, that is something which is on a day-to-day operation, Tijs, which has our full and clear attention, as Peter just mentioned in the intro. But at this stage, we're not worried, Tijs. Yeah. Yeah, Yeah, I'm, I'm less worried now, so that's good. I also had a question, maybe it's a stupid one, but the liquidation of Big Bazar, did that have an impact? Is it, was that a client of B&S? Nope. Not anymore. So no impact. And no impact. And also, in general, are you concerned about liquidation risks at your client base? No, not more or less than normally. Look, our base client protection is in credit insurance, so that, especially with these type of customers, that's easy to come by, to have those clients insured. But of course, that having them insured, of course, does not keep you away from analyzing that your clients keep be able to pay their bills. So credit control is on top of things, especially also in these circumstances, Tijs. Yeah. Okay. Yeah. Okay, yeah- I would say more or less- Yeah. Okay. Also, yeah, coming back on the bank confidence, I also appreciated the comments in the press release, because the stock market is kind of spooky at this time about these things. Can you remind us a little bit how well B&S is able to manage the cash flow? Because it is indeed very typical seasonal, and I can- Mm. If I remember correctly from the past, sometimes there is kind of a timing issue between collecting the cash on the receivables, depending on the timing of the Chinese New Year. Correct. Is that correct? It is relatively late now. Does that mean that you can collect the cash, let's say, later this year, so the risks are higher? No, this is a factor, but look, in the end, if we look at our historical pattern. If you look at our historical pattern, we always have deleveraged, I would say, towards the end of the year, in line with the historical pattern and the seasonal pattern just indicated, which is also the main subject for this discussion in the first place. So we expect to see the same deleveraging this year again. And please bear in mind that the I would say limited or more limited deleveraging last year is clearly, of course, also impacted by the significant one-offs we had to account for in our EBITDA as per the year-end last year. Oh, that, yeah, that's true, and those are dropping off from the LTM EBITDA towards the end of this year. Exactly, Tijs. Okay. That, yeah, that helps. And I had something else. No, yeah, I cannot recall. So, your comment on the amendment of the bank governance, that is because you can manage the cash flow if you want, but from a commercial operational perspective, you'd probably like to have somewhat more room. So if you can make a deal which is quite big, that you can, you're not being restrained by your own balance sheets to run the commercial business. Right. Is that the way I should look at that, the comment? Exactly. Yeah. Exactly. Which is- Okay. Which is most important for the end of Q3, because of the size of Q4. And the fact that- Yeah ... these type of deals tend to become of, come on the market surrounding quarter ends. So that's also, that's why you want to have these, these room to maneuver if these deals come on the, on the market. Yeah. Okay. Yeah, that's helpful. Thank you. Great! The next question comes from the line of Maarten Verbeek from The IDEA. Please go ahead. Good morning, it's Maarten Verbeek of the IDEA. A couple of questions from me, please. Firstly, to get back to a previous topic, the covenant which you have adjusted due to the seasonality of the business. In the previous covenant, there was also the possibility that you would have additional space when you had made an acquisition. So instead of 4, you had room to 2 to 4.5. Is this still applicable? All the other items remained the same, Maarten. So more or less, we have to add 50 basis points on top of the quarterly numbers you have mentioned in the press release? Not sure what you're now referring to, but all the other items, as indicated also in our, the disclosure in our financial statements, which give a clear overview on all the components of our financing, remain the same. Okay, thanks. With respect to liquor, you mentioned that gross profit and margin was down year to date, as already been discussed in Q2, there was a charge. If we would solely look at Q3, did the gross margin of liquors improve? Without giving too much detail, again, it is a trading update, please bear in mind. But look at the market circumstances in liquor throughout the year has been markedly the same, but especially in Q4 last year, the market circumstances started to change. So if we compare quarter to quarter, I would say the first three quarters of 2023 have been as challenging as Q4 of last year. So these trends continue throughout the year to date. Okay, thank you. And lastly, when I look at your annual report, then a week ago, on October 29, 2023, there was the first tranche of 12.5% of FragranceNet, which should be closed, which should be acquired by you. Did it happen? Well, my compliments, because that's completely correct. But to exercise the option, we could have done that one month before, and we could have done that one month after the twenty-third of October. And we are in discussions with the minority shareholders. ... about this aspect. And we'll inform you after, we'll inform the market after we finalize those discussions. Could you more indicate how much money is involved, and would it also threaten your bank covenant position? Well, the latter is no. And the first question we will answer after we've reached a final agreement. Okay. Thank you very much. The next question comes from the line of Patrick Roquas from Kepler Cheuvreux. Please go ahead. Yes, good morning, gentlemen. Two questions from my side, and also good to hear that there's coffee on the Capital Markets Day today. The first question is, could you give any indication on volumes in Q3, which I assume were down? And then secondly, you expressed confidence to remain within your bank covenants by the year end, but does this take into account the possibility of a disappointing Q4, in case consumers spend much less than they normally do because of the economic situation? Let's start with your last question. I would think that it's your main one. Of course, we do take into account scenarios which are, I would say, less favorable Q4 developments as our base case. So yes, we have room to maneuver and remain within our banking governance budget. Regarding your first question, yeah, the volume versus price in our turnover, this is yet an item, a subject which I think it comes back every now and then in this call as well. We are still working on methodologies to be able to provide you with this insight, but at this stage, we simply do not—we are not able to provide you this this detail. All right. All right, thank you very much. There are currently no questions in the queue, so one last reminder, please press star one if you would like to ask a question. We have no further questions in the queue, so I'll turn the call back over to your hosts for some closing remarks. Good, thank you very much for calling in, and thank you for the excellent questions. Again, we're looking forward to meet you all in two weeks' time, plus one day, I guess. Yeah. And we'll make sure that there's coffee and, you know, maybe a cookie or something. So, but again, looking forward to meet you all. Thank you. Thank you for joining. Thank you for joining today's call. You may now disconnect your lines.