Good morning and good afternoon everyone. My name is Chelsea and I'll be your conference operator. Today at this time I would like to welcome everyone to Coty's F ourth Quarter Fiscal 2025 Question- and- Answer Conference Call. As a reminder, this conference call is being recorded today, August 21, 2025 at 8:00 A.M. Eastern Time or 2:00 P.M. Central European Time. Please note that on August 20 at approximately 4:30 P.M. Eastern Time or 10:30 P.M. Central European Time, Coty Inc. issued a press release and prepared remarks webcast which can be found on its investor relations website. On today's call are Sue Nabi, Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Coty 's earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from these forward-looking statements. In addition, except where noted, the discussion of Coty 's financial results and Coty 's expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release. With that, we will now open the line for questions. If you would like to ask a question at this time, please press Star one on your telephone keypad. Once again, that is Star one to ask a question and we'll take our first question from Olivia Tong with Raymond James. Please go ahead. Great, thanks. Good morning. Clearly there's a lot going on with respect to the macros as well as the category, and you gave a pretty detailed guide for Q1 and Q2 on sales, EBITDA, and ETFs, but kept it pretty open-ended for the second half. I wanted to understand a little bit about if you could provide a little bit more detail on the second half, what initiatives go in place, what hits versus just the easing comps, your thought process around the magnitude of improvement in the second half versus the first half, and the key drivers of that. Thank you. Yeah, absolutely. Thank you. Thank you Olivia for your question. Indeed, I think it's very important that we give you very clear indications for Q1 and Q2 and we have this visibility and we share very precise guidance. As we highlighted, we are seeing that we are still in the phase of retailers' inventory reduction, which should last till the end of calendar year 2025. That's why we are giving the sequential improvement in Q1 and Q2 despite still being negative. At the same time, as we indicated, we are seeing the category, especially in prestige fragrance but also in mass fragrance, remaining very healthy, I mean low to mid single digit. We are seeing also our sellout performing well in the key market. What it means is that the plan is that we are expecting that end of calendar year 2025, these retailer inventory headwinds will end and then we are entering calendar year 2026 or H2 fiscal 2026 in a very healthy manner where our selling will coincide with our sellout. This is supported by the market, the healthy market. Our sellout is supported also by very strong innovations that we just shared during the presentation and which will be at full speed in the H2. This is really the algorithm. Indeed, we didn't give more precise numbers on H2 because, as you say, there is high volatility. There are a lot of macro movements. For sure, I can tell you with high level of confidence that our H2 will be back to growth once we are going through these H1. That's really the reasoning and really the logic on the top line. On EBITDA, that's also a similar approach. We are really giving very precise indication on the Q1 and the Q2, then on H2 with full confidence with top line being back to growth and also all the actions, all in to win, being at full speed will really bring us to positive EBITDA growth in the HQ. Which means that our EBITDA full year would be above $1 billion for sure. Indeed, the major gap that we are seeing in EBITDA full year is driven by tariffs in a way. If we exclude tariffs on a full year, our EBITDA would just be slightly, slightly negative. The major headwind is the tariff. Last but not least, our free cash flow will grow in fiscal 2026. This is really the big picture I can give you to explain to you really why we built our guidance this way. It's also really to give you that it's very built, you know, with very strong facts, analysis, and again very strong confidence in the edge. To add to Laurent, good morning Olivia, this is Sue speaking. To add to Laurent's comment, one thing very important indeed is the launches of H1, specifically the Boss Bottled Beyond, which is probably the biggest launch of the company's history, even bigger than what we did with Goodness. There is a second blockbuster launch happening in the second half of the year also. This is a second element to add. The third element is that the fragrance mist attack plan of the company, with almost a dozen brands of the company going into this area with clearly innovative formulations that I could say a little bit more about later maybe, are honestly going to represent something that could be like one extra launch added to the pipeline of the company if you take them all together. This is the full image of H2 as Laurent just described it. Got it. That's helpful since you touched on it. I do want to talk a little bit about consumer beauty. First, around the mass color side, just your commentary from last night, prepared remarks around the evolution of investment levels, particularly on mass color and how you're thinking about levels of investment this year versus last year and then going forward. Then on mass fragrances, you just mentioned that that's a bright spot. How do you think about this business over time, like both as a percentage of sales, the opportunity to grow this, the ability to differentiate relative to others in the category, and effectively who the audience is for that. Thank you very much. On the first part, Olivia, which is around how we are going to invest behind our color cosmetics category, indeed, I think the tone is clear. This is the year of increasing the profitability of this business. In fact, this was not just a decision driven by the P&L, even if the P&L is clearly telling us to go in this direction. It is also driven by what we learned throughout the 2025 year where we realized that maybe the move from traditional media to mainly advocacy marketing was a little bit too radical for a brand like CoverGirl. What we are realizing is that this market, including the dynamics of the markets, are today hurt by, and this is interesting to hear, innovation fatigue. This is something we hear, and simplified routines. These are the things we learned from the recent studies we have made. I think a lot of loyal consumers, above 30 years old consumers, got lost in translation given the complexity of this category today. A lot of people do not know the difference between an ink, between a butter, between a balm, between a liquid lip color, between a bullet lip color, and the list goes on. There is a kind of innovation fatigue, and we used the influencer marketing tool to talk to everyone. The decision we have made is to dedicate the most sophisticated, innovative products to the youngest, who are those who understand this very well and easily get into the complexity of the category, while coming back to traditional advertising when it comes to categories that are the biggest, by the way, in the color cosmetics category, such as mascaras and foundations, which are, by the way, the strength of our brands. We believe that this way of being will allow us to invest less in absolute value and in a very driven way. This is the way I would explain the shift that is driven by consumer understanding, loyal consumers that were mistreated in a way for the last two years by everyone, including us, but also P&L wise, as I explained earlier. Now, when it comes to the fragrance, the mass fragrance category, this is more or less 7% of the net revenues of the company, is growing nicely. The market is growing everywhere around the world. This is part of what we used to call the fragrance index. I think today we are more into what we call the treat economics phenomenon, which is the economy of treats. We see that fragrances from $5 to $500 are becoming really the go-to destination in the beauty industry. Hence, I would say the dynamism of this category. This explains why a lot of consumers today are continuing fragrances at every price level, including in mass fragrances. They are also diversifying the way they wear fragrances, hence our fragrance mist attack in this category. I know you wrote recently about the profitability potentially of this category. For us, it's as profitable as a fragrance launch, so there is absolutely no dilution playing this game. We see this game because it's a game of layering. We see this game as purely additional. It's an $8 billion market doubling year on year, and this is an area where Coty Inc., which is the leader in scenting and in fragrances at large, should play in. We are playing big, and we believe this is going also to help us on the second half of the year. Thank you. Our next question will come from Susan Anderson with Canaccord Genuity. Hi, good morning. Thanks for taking my question. I was wondering maybe just to start off if you could talk about how prestige excluding fragrance performed, and if you have any new innovation coming out in the cosmetic and skin care brands this year, and then also just what investments you're making in the area as well. Thanks. Yeah. Good morning, Suzanne. Thank you for the question. Indeed, that's a good question because if you look at our prestige portfolio, it's a majority of fragrances, but there is also a color cosmetics category. This is really what explains also the counter performance in terms of sell-in, but also sell-out in Asia, mainly due to the, you know, to the resellers as we like to call them today, phenomenon that is shrinking if not totally drying in Asia between Hainan, China and Korea ecosystem. This is really one of the key explanations of the figures counter performances of the division. While fragrances continue to grow, including in fiscal 2025 year which was one of the most difficult years we had. This is one to expand for you. Now it comes to skin care. In skin care, the two biggest brands of the company are Philosophy in the U.S. and Lancaster, which is a European/Chinese brand. The great news is that Lancaster is now growing super, super strongly. It's among the top five fastest growing brands. It's growing three times or four times faster than the skin care market. It explains also our absolutely outstanding performance. I'm looking at the figures while I'm talking to you. The skin care category outperformed the market by 11%. For Coty, the market was around 3% as I said. This is driven mainly by e-commerce and on e-commerce it's really two legs. It's on one side, our fragrance business that is growing six times faster than the market rate and our Lancaster business that is growing 40% faster than the China, than the Chinese ecosystem market. It's really these figures that I wanted to share with you to give you a vision on prestige excluding fragrances. Okay, great. You talked about just the higher promotional environment. Maybe if you could talk a little bit about how you expect that to play out this fiscal year and what you're doing to compete in that environment. Also, I guess is it similar between prestige and mass just in terms of the promotional environment or is it different? One area worse than the other? Thanks. Thank you, Suzanne. Indeed. Absolutely. We are observing now since a few months, indeed, some increase of promotional activities from some of our peers. We are managing these very cautiously. Of course, that's really a strategic intention to protect our icons and to protect our brand. How do we manage this? We are very strict in these promotional policy and also on all the activities. At the same time, we are playing, we shared several times that we have a team dedicated on what we call strategic revenue management, and it is exactly how to expand the portfolio and we need to come with new formats. I just give you one example, which is paint spray. Paint spray is a segment which is really growing very fast in the U.S., so it's 30ml. It's something that you can put in your handbag or easy to take with you, and it's also a fantastic sample. We see that some consumers are going there and then when they like, they go to the product. Of course, it's also more affordable but very profitable. That's the kind of game that we are playing, really to avoid entering this promotional game. Also, when we talk about strategic revenue management, and so refer to it, if you take fragrance, the great news is that you see that fragrance now you have the full range. Of course, you have the prestige price points, but you see the high end, the niche fragrance. This is the fastest growing category. You see that here it's not, it's really about the quality and the appetite from consumers. At the same time, you see mass fragrance is growing very fast. We explain also about the body mist. In a way, we are not, it's a point of attention, but we are not concerned because indeed we can feed the consumer need across the full partition. Suzanne, just to complement on what Laurent just rightly said, if you look at the prestige market, there are two parts that are growing the fastest. Indeed, as Laurent mentioned it, the niche which is above $150 is growing by 14% and everything under $60 is growing by 11%. These two parts of the market are the fastest growing. Instead of getting in the game, which is played a lot by the competitors who are heavily exposed to the Asian Chinese ecosystem, which we don't want to enter to the same extent, we put in place the mist perfume mist attack a year ago, precisely for this, because we understood that for those who are looking for value, you cannot just sell the same brand with a 50% discount. You need to propose specifically for the younger consumer all the ways to increase the basket or to replace the basket with the same profitability. The mist we have launched, and I can give you the example of the CK mist that started earlier this summer. If some of you traveled this summer, you could see them in airports. The only place you could see a teenager queuing was in front of the displays of the CK mist. It boosted also the sales of pen sprays and the sales of 30ml fragrances. That is another way to give people affordability with the same profitability without killing the gross to net equation of our very profitable center business of prestige fragrances. Thank you. Our next question will come from Ashley Helgans with Jefferies. Please go ahead. Hi. This is Sydney on for Ashley, thanks for taking your question. Can you just elaborate a little bit more on the comment on innovation fatigue? I think on the February earnings call you called out kind of seeing a lack of innovation in color and mass? I believe so. Is it feeling like? The market got flooded in the last six months or so? Are you only seeing that in color happening at all in prestige? On promotion, can you share how that varied between channels and how that trended throughout the quarter and what you're seeing quarter to date? Thank you. Good morning. Ashley, thank you for the question. I'm going to take the first part and maybe Laurent can complement on the second part of the question. Regarding the topic of innovation fatigue, which is one of the reasons why the market is not as dynamic as it used to be, you have to couple it also with the simplification of maker routines, which more or less tells the same story. I think this is something that started maybe 18 months ago and that peaked recently with the inflation of launches. Indeed, we all felt that we need to do the race and do more and more launches from TPM in as quickly as two months with new galenics, new routines, new makeup finishes, etc. In fact, the result is that a lot of consumers got lost in translation, specifically those above 25 to 30 years old. This we heard in the consumer studies we have conducted during this first half of fiscal 2025. We don't see something similar at all in fragrances, simply because the market of fragrances is still quite simple. You know, you have mist, which is becoming for me like a kind of modern eau de cologne, which is generous content, easy to wear, not overwhelming, easy to pair it with something else. Then entry fragrances and then niche fragrances. Inside these categories you'll have the usual eau de toilette, eau de parfum, elixir. It's very simple and people navigate quite simply and they are educated very well by the cost of influencers who are explaining these different ways of using fragrances, explaining the different ingredient trends, and explaining what works in terms of layering, for example. In fact, what we see is that the dynamism of the scenting category, because we should maybe move from the word fragrance to scenting, which is what Coty wants to own from $5 to $500, is all about this. You know, I'm quoting what consumers told us. For them it's hug in a bottle. Hug in a bottle. I think it's a great expression that explains why. This is going to last. If you think about counter studies about the tritonomics trend, which is more or less the fragrance index story, they see it lasting for the next five to eight years. It's not something that's going to be ending tomorrow. It's not anymore the discretionary category. I've been saying that at length since five years. I still continue to hear people almost willing that this is going to come to an end. It is not coming to an end simply because taking care of your brain, taking care of your mood, taking care of your, you know, moods in a way is as essential as taking care of your skin. It is absolutely a must have rather than a nice to have. This is for the first part and I'll let Laurent maybe comment on the second part. Yes. One on promotions, I would say that indeed, we saw this starting on consumer beauty and color cosmetics a year ago and of course it's also related to the slowdown of the category. There is always this kind of mechanical reaction that lower consumption, and this is especially what we saw in the U.S. Then it's creating this kind of tension on promotion and as just explained, also linked to some innovation fatigue. This is really what created this pattern on color cosmetics. On prestige, prestige fragrance, indeed, we observed it more recently. It's more Q3 and even Q4. The reason there, we saw some of our players indeed playing that game. Also, some retailers back to the point of trade inventory and also pressure on their working capital. We observe this. As I just explained before, it's manageable. We are managing this very tightly. We don't want to play the short-term reaction. That's always a trap. Of course, we know there is tension on the top line on results. This is exactly what we want to avoid. We want to reduce our inventory with the trade, bring strong innovation. That's always the best answer. Also, we are improving, increasing our media really to support all the icons, all the innovations. As we just discussed, the full range, mass fragrance, prestige fragrance and also high end. That's the best answer to this promotional activities. Indeed, we are observing this pattern in the sector. Thank you. Our next question comes from Oliver Chen with TD Cowen. Good morning, this is Julia Shalinsky. I'm for Oliver Chen. You mentioned resellers and normalization in Asia. Could you provide a bit more details on how you see travel retail evolving into fiscal year 2026, and within travel retail, how healthy is the channel today in terms of sell through, which brands are outperforming, and how are you thinking about channel strategy over the next few years? Add to that as well if you're seeing any noteworthy consumer trends across regions that could influence demand. Thank you. Thank you. Good morning, Julia. On travel retail indeed, that's a good question. In fact, what we are doing is that we are reinforcing the ability of this channel to become a destination to discover newness. You know, there were question marks around should I buy in travel retail, is still this channel a price channel, blah, blah, blah, blah, blah. I think what happened recently and the shift is happening hand in hand between us and our partners in travel retail is really to make this channel a discovery channel. Hence our decision to make the key innovations of this fiscal year, new fiscal year, travel retail exclusives. For a month and a half you could see and find Boss Bottled Beyond only in travel retail. That's also a great warm up, if I may say, before the products hit the global distribution outside of travel retail. This is a way to make sure that the consumers who are traveling, even if the flow of tax is stabilizing, but the consumers who are traveling are more attracted towards this kind of exclusivity that make this channel look almost like a niche boutique with the newness and the things they do not yet find anywhere else, of course with the price incentive. This is what I can tell you about the travel retail today. Our sales in travel retail Americas and in the EMEA region are growing nicely. I have to say it, the only region that is still indeed as you said it in your question, still heavily affected is the Asian travel retail which is heavily linked to the Chinese consumption in a way. The good news is that in China we are seeing that the beauty market is gradually improving with prestige beauty specifically in the June quarter for the first time in many, plus 3% and outperformance from the fragrance category at 7%. These are elements that gives us confidence that the missing part when it comes to the full travel retail picture, which is the Asian Chinese travel retail region, is hopefully going to come back to a little bit more dynamics. Thank you. Our next question comes from Andrea Teixeira with JPMorgan. Thank you. Good morning everyone. Good afternoon. I have a question. Sue, I appreciate the commentary about the NISP and just thinking about how you're going to pivot, assuming of course you're going to continue to do the successes that you've been highlighting in innovation in the male category. If you think about how to pivot in terms of channels and then your distribution, just curious how you're setting yourself up for the balance of 2026 in terms of fiscal 2026, the second half in terms of distribution gains and losses and net net of that. A question to Laurent in terms of the way we should be thinking of destocking, I appreciate that you mentioned that the destocking had an 11% impact in the first, in the second, I think it's the second half of fiscal and then coming down to 5%. I'm assuming if you can break down what you're assuming for Q1 and Q2 within that guide, I'm assuming you're still hoping to get the sell out to grow. I think the numbers in July were quite supportive. Just to think about how sell through, again sell in, and when it seems like from your commentary they expect the destocking to last through calendar 2025. If you can give us a little bit of that color and if I can squeeze one about Wella. What. Is the strategic, are there strategic options you are contemplating at this point? Thank you. Yeah, thank you. Thank you, Andrea. Indeed, I can start really on the destocking. As we shared several times and we share again, we started to see these destocking impacts. I have to say a year ago. A year ago, as you remember, we were still on a very good trajectory. I just want to remind that our Q1 prestige last year was plus 7%. We just need to remind that we are on a high base. I want also to remind even though there are some headwinds, when you look at fragrance prestige, the last two years of growth, if I exclude Lacoste and Russia, is a plus 18%. I think it's important also to zoom out and really to understand that we are coming from a very high dynamic. What we saw starting a year ago was this destocking. You're right that the gap at the beginning of the year was pretty high. We see it reducing step by step. In Q4 it was more 5%. We are assuming in our model that this gap is going to continue to reduce and the big one is the U.S. because this is where we had really the biggest gap. To reduce in Q1 fiscal 2026 and then to reduce again in Q2 fiscal 2026 and then to come to a level of, you know, being nil in Q3 fiscal 2026. It's gradual. It's gradual, it's sequential. That's why we are, you know, very vocal about this. Sequential at the same time, as we discussed before. Yeah. I mean, we feel that our retailers are pretty nervous about their working capital, so they are also very cautious on their inventory. There are a lot of moving pieces that we are seeing and it is creating this volatility. Again, this gap is going to continue to reduce and really step by step come to zero. That's why we are absolutely confident that we are back to growth in the H2. There is no gap between the selling and the sellout. That's really on the destocking. I jump just in the wrong order just to Wella. We stay absolutely committed to divest our stake. We made it very clear several times. We are contemplating options and really making sure always that it's, you know, good timing and good value for Coty. This is absolutely a big step, a big move that we want to operate for Coty and we keep you posted. If I'm back to. Yes, I'm going to take the question regarding the, you know, the. I was trying to understand, in fact, the question regarding Andrea, it's about how we are gaining or losing in terms of distribution. We have big distribution gains on fragrances, specifically on mass fragrances, which are up 20%. The fragrance mists that we are playing both in mass and in prestige are purely incremental in terms of shelf space, but also in terms of sales while bringing the same profitability. On color cosmetics, the distribution is broadly stable. You commented about mists and blockbuster fragrances. It's an and story rather than an either. It's really both that we are playing on regarding our ability to execute both at the same time. What we are seeing is that we could see young men or young women buying the key fragrance of the moment from us, while at the same time buying one or two mists. If you think about our consumer beauty mists, they are around $10 and our prestige mists, they are around $30. This is very, very affordable. Some people even buy two to three mists to play with this layering phenomenon together still with the signature fragrances. It's really an and story, hence an incremental space both in mass or in prestige. Thank you. Our next question will come from Steve Powers with Deutsche Bank. Great morning. Good afternoon, everybody. Laurent, I just wanted to go back to what I thought I heard you say in response to Olivia's original question. I think you had said that absent tariffs, EBITDA for the year you thought would be down slightly. I think you're expecting a $50 million, $55 million net headwind from tariffs. If I subtract that from where the EBITDA base is, it only gives you like a $20 million, $25 million window to stay above a billion. I think you also said that you expect it to be above a billion dollars of EBITDA for the year. I just wanted to replay that and test what I heard and test your confidence, because I think there's at least a $20 million, $25 million EBITDA window in your first half guidance. Just trying to understand where the confidence comes for the full year. Thank you. Yeah, absolutely. Good morning, Steve. Your maths are correct, absolutely. Indeed, we are giving precise guidance in Q1 and Q2 because we have good visibility, and we have also good visibility coming from the tariff. It is hurting the gross margin in H1. I can tell you that the loss that we have on gross margin in H1 is mostly driven by tariffs and also to some extent the euro dollar, as we still have some sourcing in Europe to the U.S., it's also impacting the gross margin. This is the major headwind and at the same time, it is flowing into the EBITDA headwinds that we are sharing in Q1 and Q2 combined, of course, with a still negative top line. Now, moving to H2, we start to inject some productivity actions related to tariff. The $20 million I'm referring to will be really full speed from procurement and from manufacturing, so it will re-secure the H2. Second, very important is that your In To Win A plan that we announced in April will be also at full speed in H2 and will bring savings in the H2. To make it very clear, Steve, on your question, yes, there is a tariff headwind, but there is absolute confidence that all the actions that we have in place either on the innovations top line, but also on productivity and savings, give us sufficient protection to be above the $1 billion on the fiscal year 2026. Okay, thank you for that. Sue, if I could, I just want—it sounds like, you know, initiatives like skincare from your perspective, high level, are still on track. I just wanted to get your perspective and any thoughts as to whether or not, you know, as you update the strategy, refresh the strategy on fragrances, as you've talked about today and last night, and also kind of, you know, recalibrate on the cosmetic side as you do that work. Is there any opportunity cost, just the distraction from what would have been the strategic investments and prioritization of skincare? Or are those two things distributed distinct enough that the efforts in skincare evolution can progress undeterred as you update on fragrance and cosmetics? Yeah, that's indeed the fair question. What I can tell you is that of course we are double betting on the Tritonomics, the fragrance index, and the company will own the full spectrum from $5 to $500, from anything that's adjacency scenting to classical fragrances and elixirs. I also believe that part of my role is to prepare for the soft future of this company. The soft future of this company is into anything that's around care. I think fragrances are care of the mind. Skincare is by definition the care of the skin. These are two categories that have a lot of similarities. They are both very profitable categories that both posed for growth for the next, I would say, decades because of the aging of the population when it comes to skincare and the fact that people are really willing and obsessed with the fact that they want to age. Gracefully or in good health. The global warming and the UV, I would say, exposure of human beings for the decades to come will require everyone to use sun protection. This is something I can tell you. It's also, for me, a bet on the future. Now, coming back to the present, we are going to be much more, I would say, radical in terms of how much we invest. The good news is that the size of the brand is small, and therefore the growth is almost natural because of the size. We are going to be very, very careful in making the full resources available behind what is our strength, what is our uniqueness, and what is our growing business today and most profitable business also, which is something at large. Thank you. Our next question will come from Chris Carey with Wells Fargo Securities. Hi, everyone. I wanted to ask about cash flow. Laurent, over the next several years, what are the cash commitments that we should be thinking about? I think I'm specifically thinking about the swaps. You also talked about refinancing of certain debt. I was just wondering if we could get some sense of the obligations you might have over the next several years. Then I have the more strategic follow up. Yeah, yeah. Good morning, Chris. I mean, you know, I keep repeating and saying that, of course, cash on deleveraging remains the number one imperative. Indeed, we are building the plan, and as I just shared, our plan is really that our fiscal year 2026 cash flow will increase versus our fiscal 2025. You understand that we had these headwinds in fiscal year 2025. We still have headwinds in the first half of fiscal 2026 due to, again, these retailers' inventory destocking impact. As we are entering calendar year 2026, we are really back to our normal cash cycle. That's really with all the ingredients that I would say we are mastering very well, starting, of course, with the EBITDA but also very tight control on the inventory. Inventory, we shared several times, and now it's starting full speed that we are implementing a new forecasting tool, O9, and it's giving really, and it will give more and more, strong results in terms of forecast accuracy, which has a direct impact on excess and obsolete, but most importantly, direct impact on the level of inventory and will help the cash. We stay very strict on our DSO, very strict on our DPO, to make sure that our cash engine is fully in motion. The swaps, as you know, the ultimate goal is really that it's really something that we can activate at some moment as a share buyback. We are making sure that it's the right moment and really when we get out of a more difficult context that we can continue again this agenda. On your last point here, refinancing, yes, of course, we have maturity in calendar year 2026. It's a no brainer that we are actively working on these refinancing to extend the maturity. We are in a good position and, of course, taking benefit of our consecutive rating upgrade. Our last refinancing was very successful. We are in a good position to continue this healthy trajectory on cash refinancing and deleveraging the company. Unless we are confident in selling Wella. To answer the second part, absolutely. Okay, great, thank you. Just from a consumer beauty standpoint, this balance between revenue and profitability, can you maybe outline a bit more aspirations for profitability in the business, maybe from a margin perspective in the coming few years and how you might, I guess, be comfortable with potential revenue impacts if you achieve profitability objectives in the coming few years. Thanks. Yeah, that's a key priority. You see, of course, in the numbers that we really think that the big pool of our profit generation is from prestige, and this is indeed 90% of the profit. Indeed, the consumer duty is generating profit that is too low. We are working very actively on several initiatives to improve significantly the profitability of this division. That's the number one mandate. As you can imagine, we are going through the full value creation model, looking at the cost of goods, our SGMA, and also on our AMCP, as I referred to at the beginning. It's really to be more precise and to understand where we allocate our money and also making sure we are protecting our loyal consumers. Our brands have very strong loyal consumers, so we need to make sure that we keep communicating with them. I think this is behind your question. It's always a trade-off between profitability and top line. Indeed, this is what we are looking at in a very detailed manner. Yes, it may imply that in some cases, in some specific situations where we think that it's not profitable enough, we may take some choices which may impact the net revenue. In a way, it's also something that is driving our algorithm on net revenue. The number one mandate now for this division is really profitability. Thank you. Our next question will come from Anna Lizzul with Bank of America. Thank you so much for the question. I wanted to ask on the prestige fragrance market. In the past, you mentioned that growth in prestige fragrances was due to growth from a few demographics, which included Gen Z men and Hispanics. I was wondering if you're seeing a particular pullback from specific demographics or income tiers, particularly in the U.S., and then on the broader U.S. beauty market. Are you seeing any specific income tiers with a pullback or a wider array? Thanks so much. Please stand by for one moment while we reconnect the speaker feed line. Once again, please stand by while we reconnect the speaker feed line. There was a disconnection on the main line. We are back. Can you hear us? Yes, I can hear you. Who is speaking? Is it Anna? Yes, this is Anna Lizzul from Bank of America. Okay, sorry Anna. Thank you. I took notes. My understanding is that on the prestige fragrance market in the past, the market was fueled by co-ops entering the market. You rightly mentioned, you know, Hispanics in the U.S., you mentioned also men, you mentioned also Gen Z. If there is a pullback in some of these demographics, we don't see a pullback in these demographics. We even see a penetration curve continuing to increase among the main demographics that are the Gen Z consumers, specifically the teen male consumers who are today those behind the biggest successes in male fragrances. That's one of the reasons probably the latest Boss Bottled Beyond launch is resonating so well. It's because it also attracts this younger generation versus what we did in the past. The Hispanic community continuing to be another consumer of, I would say, very strong and long-lasting fragrances, which we have seen consistently continuing. Last but not least, we also see that among Gen Z, the heavy users proportion has never been higher than now. They own a lot of fragrances, sometimes three or four. This is what is called the wardrobe effect. We see now the fragrance mist phenomenon becoming part of this scenting index at large, as I like to call it. To answer, in short, we don't see pullback from any of these demographics. Thank you. Our last question will come from Priya Ohri Gupta. Please. Great. Good morning. Thank you so much for taking the question. Laurent, could you speak a little bit more about your refinancing expectations around the 2026 maturity? Should we continue to expect that that'll be consistent with the secure structure that you currently have in place? Then, as we're thinking about the path to deleveraging in calendar 2026, should we assume that that's primarily driven by improving EBITDA trends as some of the cost savings take hold into the back half of the calendar year 2026, or if there's an expectation that the Wella stake sale will also help achieve that outcome? Thank you. Yeah. Good morning Priya. Thank you for the question. Refinancing expectations, yes, absolutely. It will be consistent with a secure structure in place. Absolutely, yes. On deleveraging again, the model is very clear and you understand from the guidance we are giving that indeed Q1 and Q2 of fiscal 2026 will be impacted by the lower EBITDA. We stay absolutely focused on the working capital and the CapEx discipline entering calendar year 2026. As I shared before, with EBITDA being back to growth, cash generation, we are going to continue the deleveraging agenda and indeed, as we shared, we are actively working on the Wella stake to help and support, indeed to accelerate our deleveraging. Okay, thank you so much. Thank you. At this time, we have no further questions in the queue. I would like to turn the call back over to our speakers for any additional or closing remarks. Thank you very much. Thank you everyone. Of course we realize our results are not satisfying. Please know that we are acting with urgency, especially in the U.S. as you have seen it. We have taken all the required action, and we have a clear plan with first and early, very, very promising green shoots. The company is now more focused. It's financially stronger than ever. Of course, no one is immune to market volatility, but these results do not reflect the true potential and value of the business we are building. We are confident that the real strength of the company will be recognized and visible as quickly as possible in fiscal 2026. Thank you very much. Thank you. Ladies and gentlemen, this does conclude today's presentation, and we appreciate your participation. You may disconnect at any time.