COTY - NYSE

Good morning, and good afternoon, everyone. My name is Gretchen, and I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's Second Quarter Fiscal 2023 Question-and-Answer Conference Call. As a reminder, this conference call is being recorded today, February 08, 2023. Please note that earlier this morning, Coty 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 now 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 non-GAAP financial measures section of the company's release. With that, we would now open the line for questions.

[Operator Instructions] And our first question comes from Nik Modi from RBC Capital Markets.

Hi, good morning, everyone. I guess two questions. First on just the glass and the fragrance situation. How is this impacting the innovation agenda in terms of the pipeline and the launch calendar, if you could just provide any context? And I apologize, I missed some of the earlier remarks. I had some other company's reporting. Did you provide a timeline in the prepared commentary on when you feel like you'll be fully kind of back to normal from a component standpoint? And then, the second question is just would love your thoughts on what you're seeing on the ground in China currently? You suggested an improvement. I just was curious on some details behind some of those comments.

Yes. Good morning. This is Sue speaking. Thank you again for the question. When it comes to the first part of the question, which is around the fragrance shortages specifically focused on the glass components, again, this is indeed the parts of the components that has been the most affected, and this is, I would say, an industry-wide issue and not just at Coty, of course. And this is improving already at the moment where we are talking. Hence, the communication around the sequential acceleration of our sales entering in Jan. And this is clearly something that's a very, very good news, coupled, as you can imagine, with the robust beauty demand, specifically on the fragrance side. So, I would say these two elements altogether give us a lot of confidence that we'll have these shortages slowly, but surely, fixed into the industry widely and at Coty, of course. So -- but I would say the way I would describe the story, did it impact the innovation pipeline? The answer is no. If you look at the way our innovations have been performing on the markets, the results have been, I have to say, outstanding, be it on the Burberry. I can start with this brand, because what's happened, for example, in a market like the U.S. behind Burberry is unprecedented. We've done last year the launch of the Burberry Eau de Toilette. And then, we continued this year, I mean, in September of calendar 2022 with the Burberry Eau de Parfum. And the Eau de Parfum, for the first time, surpassed Eau de Toilette sales, which, by the way, says a lot about the premiumization of this market. Traditionally, any innovation that's a line extension moving from Eau de Toilette to Eau de Parfum is performing 20% to 30% versus Eau de Toilette. In this case, it's bigger, which is really big, big sign. So, this one is doing fantastically well. Burberry Her in the U.S. is climbing the rankings incredibly, which allowed the brand to become a top 10 fragrance brand in the very competitive U.S. market, which is a jump of 9 ranks. If you think about what we've seen behind Hugo Boss in the rest of the world, because the brand is not as big as it is in the rest of the world in the U.S., so if you think about Europe, the rest of the world, Hugo Boss success behind fashion and now translating into the fragrance business allow us to have a top two fragrance launch with Boss Bottled Parfum. If you think about Gucci again with Flora Gorgeous Jasmine, that's the continuity of last year's Gorgeous Gardenia. Again, it's a top two to top five innovation. So, in a way, the shortages didn't prevent us from pursing biggest innovations during calendar '22, our key launches. Last but not the least, Chloe, specifically the line Atelier des Fleurs, Atelier des Fleurs is really booming in all the premiumized markets. If you think about the Asian ones, the Chinese one, hopefully, that is restarting now. This is clearly another leg of growth for us. So, no impact on innovation from what we have seen. Last but not least, again, going to China, we read, again, like all of you the headlines of Jan. being better than expected for the economy in general in this country. We've also seen some pictures that we posted during earnings call today where we see consumers back to stores, which is really a fantastic news for the beauty industry and for our businesses, as you can imagine, having the most important white spaces of the whole industry in terms of companies in this country. So, there is a confirmation. It's not, I would say, a strengthening/acceleration of two things we have seen since, I would say, the post lockdowns of last year and including some recent studies, because we continue to study the consumers' mindset in the country almost on a monthly basis. And we see the premiumization trend accelerating and becoming more radical, if I may say, and building into all categories on one side. And we see on the other side, the healthification trend stronger than ever, which is great for both our business as premiumizing and becoming more and more skincare in the country. And last but not least, something very important we are seeing in the country too is that the shift from, I would say, heritage brands towards new brands active in the Chinese market is stronger than ever. The highest end consumers are now more open than ever to try new brands, new innovation, versus the traditional, I would say, loyalty that we have seen in the past towards more classical and traditional brands.

Our next question comes from Ashley Helgans from Jefferies.

Hi. This is Sydney on for Ashley. My first question is just on China. So, I'm curious if you guys are seeing or expect any category mix rebalancing in China, just following that reopening and a return to socialization?

Yes, that's a very good question, Ashley. Thank you -- no. It is Sydney, correct? Sorry.

Yes.

And by the way, nice to meet you for the first time. So, in a way what I can tell you is that, again, concerning what I just commented on in terms of categories, premiumization, healthification, moving towards new brands, new offering a kind of speed in terms of transformation of how the Chinese market is looking more and more in terms of brands, I can tell you that there is rebalancing probably that will allow all categories to grow. In a way, skincare is the most traditionally fastest-growing category, the biggest category by far. But fragrances on one side and makeup on the other side -- of course, as you mentioned, because there is more socialization, people are getting outside their homes, going back to stores, traveling to Hainan. By the way, the travel to Hainan has been higher than last Jan, if you compare between Jan this year and Jan last year. So, we start to see this, which is really a great, I would say, information for us as Coty as a company, because it would mean that we will be able to really run on our three legs in China, of course, fragrance, makeup and skincare with the upcoming launch of Lancaster Ligne Princiere in March.

Thank you. And then, just one more on the comment on the dupes. So, you called out CoverGirl and Rimmel has seen a little bit of a benefit from consumers trading down from the Prestige. Is that something that we should understand as evidence of trade down? Is that something that you're seeing more broadly? Or is it a bit more brand specific?

Sydney, it's not a trade down from Prestige at all. In fact, this has existed since many years. It's been accelerating recently, of course, as you can imagine, because we have more and more consumers, specifically the Gen

Our next question comes from Anna Lizzul from Bank of America.

Hi. Thank you so much for the question. Just curious with the momentum you saw in Prestige fragrance in fiscal Q2, we're seeing a nice acceleration in volumes in the Nielsen data since the quarter ended. I was wondering if you can comment on the momentum you're seeing post the quarter, and to what extent the supply constraints are affecting this as well? Thank you.

I haven't heard, sorry, Anna, your second part of the question.

Just wondering if you can comment on the momentum that you're seeing post the quarter with acceleration in volume, and then to what extent the supply constraints are affecting it?

Yes, I got it. Thank you so much for the question. Again, the momentum -- sorry, in Prestige in fragrances in Q2, again, it's, in a way, explainable first by the very healthy beauty demand for this category. What we'd love to call "the fragrance index" is at full effect again, whatever the region again, and this despite, again, we have shortages that all the industry had been facing. The innovation that we've been putting in the market, again, I was quoting Burberry or Hugo Boss are clearly having a role in this momentum that we are seeing in the company, the premiumization of the market. Again, I'd love to give again and again the example of Burberry Eau de Parfum that's selling higher than Burberry Eau de Toilette, which is the first in the history of line extensions, if I may say, which says a lot about the upgrading and not the down trading of this market. So, this is, I would say, for me, a kind of explanation of what's happening. And this is, again, as you can imagine, during the quarter, without having any upside coming from the Chinese market where the penetration is very low and is expected to grow in the coming quarters and years as you can imagine. When it comes to the momentum that we started to see in Jan., if I may say, this I would really link it to three elements. The first one is, of course, improving of service levels and we are improving with this element quite fast and we will continue to improve on this element in the coming quarters. And of course, the continued strong beauty demand, which is driving this sequential growth acceleration that we have seen. There is also a phenomenon of big innovations that are [trending] (ph), at the moment we are speaking about CoverGirl in the U.S. market. Again, we referred to this during the presentation. The continuity of the Clean lines with Yummy gloss, with the Clean serums -- Clean Fresh serums, Clean eyeshadow. And last but not least, and I guess this will be a question at a moment on another, the latest improvement that's a very strong improvement in CoverGirl sell-out in the U.S. markets with the latest four weeks that show a 17% growth of the sales, which is the best performance since a year behind this brand. So, if you put all these together with a little bit of restocking from our retailers -- remember, our sales in Q2 were in line with the sell-outs, meaning that we start the year with very lean inventories, and therefore, there is a bit of restocking. So, this, I would say, is the bundle of element that explains the start of the year that's accelerating sequentially.

Our next question comes from Rob Ottenstein from Evercore ISI.

Great. A little bit of, I think, a follow-up on some of the other questions and that is just -- look, to start off, clearly significant demand for fragrances, supply chain issues. Is there any way to guesstimate how much those supply chain issues impacted sales in the quarter?

Good morning, Rob. Laurent is going to take the question.

Yes. Hi, Robert. It's very difficult to estimate. I mean, two major points very clearly that indeed, I mean, we have the component shortage. But definitely, immediately, we have very tight work with supply chain procurement and ready to adjust. So, concretely, what Sue was explaining is that, in fact, we are ending the Q2 with lean inventory. Now, as we are improving service level, combined with great demand and great initiatives, in fact, we are seeing really some rebuilding of the inventory and restocking in Q3.

That's a no way. Okay. But clearly, enough to call out a material?

No. Again, so that's not -- I will not call it material, again. So, this was definitely what we did and what we monitored really in a smart way. Again, it was [indiscernible] we made sure that we protected our clean innovation and we made sure that we're protecting [two pillars] (ph). So, that's really -- so that we are protecting the building blocks of the business, and to be consistent in the strategy. So, not material. And again, we are seeing some acceleration beginning of Q3.

Our next question comes from Steve Powers from Deutsche Bank.

Yes, thank you. Good morning. Two questions if I could. The first one is just around the price increase that's planned for the end of 3Q. Just any further commentary you could offer in terms of where that's targeted? How widespread versus how nuanced the implementation of that pricing will be? Number one. And number two, you mentioned a couple of times this morning just the notion that this year's launch pipeline, specifically in Prestige fragrances, was primarily composed the brand extensions. And I'm just -- I'm curious as we look out to fiscal '24, an early peak into the innovation pipeline, if that is expected to continue, or if next year will be more of an innovation year that has more kind of Hero products, bigger innovations, that kind of thing? Thank you very much.

Sure. Okay. Hi, Steve. So, on price increase, let me remind that, indeed, when we implemented mid-single digit price increase in summer calendar of '22, it went down smoothly. As I explained several times, we did -- we have a dedicated pricing of this, which started to work, in fact, [two] (ph) years ago. So, we did work in a very granular manner in this [calendar] (ph) is to really making sure we combined also with media support, also the strategic initiatives. So, it went very smoothly. So, it was -- again it confirms the strength of the brand and the professional work we are doing. And this was absolutely needed, as you said, because it was really the way to mitigate inflation in the gross margin and this is definitely a key driver of our gross margin expansion in Q1 and Q2. Then indeed, we shared and that we are implementing a new price increase in Q3 fiscal '23. So, this quarter, again, this is what we announced [indiscernible] again, because same approach with granular work, and again, making sure that we are also completely consistent with the consumer needs. We are also working a lot on the mix management. So, it's really because we are seeing [decent] (ph) appetite for premiumization and this is what we are doing in both Prestige and Consumer Beauty. So, perfectly on track, [in detail] (ph), we are granular, and again always focusing that we are matching consumer needs and expectations.

Yes. And Steve, good morning. This is Sue. So, on the second part the question, which is around the launch pipeline that was mainly brand extension, thank you, first of all, for reminding everyone about this. The performance of our Prestige business is indeed in comparative with the big, big launches we have made last year. It was Burberry Hero, it was Gucci Flora, and of course Calvin Klein's CK Defy. So, this year, of course, it was a line extension. This is traditional in our business. But again, for the first time, line extensions that are towards more premium offerings, Eau de Parfum Burberry is 30% above Eau de Toilette has made, in a way, this second year, a year of continuing growth. But you're right, the question is how about fiscal '24 and, hopefully, we'll be back to blockbusters.

Our next question comes from Korinne Wolfmeyer from Piper Sandler.

Hey, good morning all and thanks for taking the question. So, first from my end, can you just touch a little bit about how you're thinking about China growth for the rest of the year? And how much improvement are you baking into guidance? And then, as we look into 2024, how are you thinking about expectations for China there? Thanks.

So, in -- so first of all, we indeed -- hi, Korinne. First of all, we are confirming indeed our guidance, 6% to 8%. So, this is -- and as you can see, these H1 results, we are perfectly on track. Definitely, China was a headwind in Q2 due to lockdown. So, we are betting on acceleration definitely in Q3 and Q4. So, this is embedded in our algorithm, 6% to 8%. And this is, of course, supported by all the strong initiatives that Sue has explained. And definitely that all these initiatives will accelerate in '24. So, China will become indeed an acceleration for growth in fiscal '24. And again, all of this is fully included in our midterm algorithm of 6% to 12%.

Very helpful. Thank you. And then, can you just touch a bit on the broader fragrance market? I mean, it's been growing really well the past couple of years, and then the fragrance segment for Coty has been growing even better. Can you just touch on how sustainable you think this market growth is? Do you think you will come up against some tough comps at some point? And then, as we think about the segment for Coty, how sustainable do you think that strength is? Thank you.

Yes. Thank you, Korinne. This is Sue speaking. I'm going to take the second part. So, again, when it comes to the fragrance market/the fragrance index, indeed, the fragrance market is 25% -- 20% to 30% higher than the levels of 2019. And in markets like the U.S., again, and you may know this, the Prestige fragrance market is over 60% higher than compared to pre-COVID levels. Again, it's hard to see how this would just be driven to some one-time factors, I have to say. And sometimes I hear this, and I do believe it's not the right explanation. Historically, this has been a big distinct category. But what we are now seeing, consumers using fragrance as part of their daily routine. I mean, this business has become really a health business, mental health business, I would say. Fragrances being seen as huge boosters, allowing people to see better in the day-to-day life. In particular, during the last couple of years, we have seen increased usage by new categories where the penetration has increased structurally, I'm thinking about Gen

Our next question comes from Olivia Tong from Raymond James.

Great. Thanks. Good morning. First, I wanted to talk about China and the reopening. And now that reopening is happening, what can go into place that wasn't [including] (ph) over the last couple of years? And could you talk a little bit about how much opportunity there is for you to grow shelf space and the conversations that you're having with your folks on the ground or with retailers, particularly in Travel Retail? Thank you.

Yes. Good morning, Olivia. Thank you for this question, which is indeed a very important question. Again, just to refer to our [Daily Life] (ph) last week in Amsterdam, we had people from all around the world, spending a week for the first time since many, many, many, I would say, months and quarters altogether, including the Chinese general managers, the APAC general managers, everyone was in the same room, in the same place, spending five days discovering all the new innovation for fiscal '24 and above. And I can tell you that the level of confidence I have seen on the faces, specifically the Chinese general managers and teams and marketing director was a very, very strong sign of how they see Coty in this market where the opportunities are almost endless for a company like ours. What do we do better? And again, in a way, if I may say, I love to give this image of sometimes, destiny needs to help you, in a way. We had two years and a half to strengthen, to prepare, to strengthen our fragrance business, to strengthen our makeup business, specifically on the Prestige side, to put ideas, intelligence and marketing behind the brand like adidas or Max Factor that are two big brands in the Chinese market, and last but not least, to fully prepare for our first skincare launch in China, which is happening in next month as we are speaking. So, in a way, this is what's different. It's absolutely not the same Coty, but we're starting doing beauty business in China in March than the one that was doing business just two years ago.

Our next question comes from Andrea Teixeira from J.P. Morgan.

[Technical Difficulty] taking my question. I was just like hoping to see if you can talk about a little bit of the Prestige side in terms of like how you parse out skin? And I know Lancaster was a big launch vis-a-vis fragrances. Of course, I mean, fragrances are the main motor of that. But I was wondering the exit of the quarter, we did see not to take credit for it, but we did see the deceleration for the quarter. And even at Russia, it's probably coming in below expectations, and of course, understanding all of the supply chain issues. But if you can help us understand how skin vis-a-vis fragrances in the exit of the quarter? Thank you.

Yes. Good morning, Andrea. Thank you for the question. If I understood well, you were referring to the end-of-the-quarter deceleration in fragrances. And again, I do believe that this is not the way you should read the figures, if I may say. Again, I'll reframe the story around our Q2 saying that this performance, given the shortages, given the boom of the demand, given the pipe of innovation last year, which were unprecedented in the history of Coty's, a very, very strong performance, I have to say. So that's really the way I see it. And I really see skincare, specifically on the Chinese market, as an additional layer and not something that's supposed to compensate anything else. Skincare is really for us an additional, I would say, a growth driver and a new journey for the company that's very, very important, as you can imagine, if we want to become a beauty giant in Asia. So, really continuous performance on our fragrance business, strong performance on our Prestige business, specifically in the U.S. without China, as you can imagine, that was under lockdown during the full quarter. And last but not least, adding a new leg, which is the skincare leg starting with Lancaster. Of course, not referring, but again, you gave me the opportunity to refer to this, the [indiscernible] launch that is going to happen also in the coming months. And last but not least, the extension with the high premium offer behind our radar that's happening in the coming quarters.

Our next question comes from Chris Carey from Wells Fargo Securities.

Hi, good morning.

Good morning, Chris.

Good morning, Chris.

So, just a follow-up on Andrea's question just around individual category growth. I appreciate, last quarter, the body care launch had some impact that was favorable. I think if I heard you correctly in the prepared remarks, you said that growth was more balanced across your categories between fragrance and body care and makeup. Can you maybe just contextualize how category delivery was for you in the quarter on a like-for-like sales basis? And maybe what your expectations are for the full year, in the context of your full year like-for-like sales guidance? Thanks so much.

Yes, indeed, Chris. So, I mean, what you're highlighting, in fact, is definitely a strength for Coty's [unique] (ph) that we have a balanced portfolio, and indeed, that we are in both divisions. Now we have, I would say, subcategories which are performing very well. Just on Prestige, I do want to emphasize, again, that, of course, we have fragrance, but now we are seeing Prestige makeup and skincare, which are accelerating and will be strong growth drivers. On Consumer Beauty, so it's definitely also the same thing. So, Consumer Beauty, now we are seeing, I mean, strong acceleration in body care definitely. So, adidas successful innovations in Q2. So, it's really [indiscernible] so, it's really in high mix in terms of high value for the consumers. And really, we are seeing some great traction. So, it's coming on top of color cosmetic and mass fragrance. So, indeed, this is a great acceleration. I want to highlight also that we have also very strong performance in Brazil, okay, where body care is -- we have done a strong brand. And also, we can also create some cost synergy -- synergies with the rest of the business. So, this is definitely a strength for the company. So -- and definitely -- to conclude on skincare, so this is definitely what we'll accelerate in H2 and beyond, of course, in fiscal '24 and fiscal '25.

Our next question comes from Linda Bolton-Weiser from D.A. Davidson.

Yes, hi. Good morning. I was curious, as you increase your spending on advertising and promotion over time, can you talk about where you're seeing the best ROIs? And as you spend more, are your ROIs actually improving over time? Thanks.

Yes. Good morning, Linda. That's a very important question. I would say, this is even the daily focus of the organization. So, let me step back a little. This is what you are highlighting here is now fully part of our all-including umbrella. So, very clearly, we started to focus on fixed cost, then on cost of goods, now we are really addressing all the [agency teams] (ph) we are investing, and we are building methodology [indiscernible] of course, combined with marketing teams, digital teams and commercial teams, right now, we are getting fully equipped to measure and to optimize ROI. So, this is the number one focus. And also, we are improving because, as we shared just before, we are now also growing in different categories. And basically, the way you spend money in skincare is different versus the way you spend money in fragrance. So, these are really nice capabilities that we have built, and consumers want to say that [indiscernible] over the last two years, and this time to build these capabilities. So, ROI is the key word, definitely making sure that each dollar we are spending on either on innovations or base business, every time we're deciding based on ROI and is reviewed by Sue and by myself, and, of course, with the team in recurring session. So that's absolutely so that we make sure we are making the best of our money and the better ROI for the coming quarters.

Our next question comes from Mark Astrachan from Stifel.

Thanks, and good morning, good afternoon, everyone. Two questions for me. One, just first on the Consumer Beauty. So, still gaining share there. The rate of increase narrowed a little bit in the quarter. I guess, what would be your expectations going forward for that? And then, maybe sort of related to that, curious about your views on the length of the current beauty cycle, which has, obviously, been a couple of years now coming out of the kind of the peak of the pandemic, mask warning, et cetera. So, fragrance and makeup have been drivers of the beauty category. Is it reasonable, if continues? And kind of what would be your expectations for the length of the current cycle? Thank you.

Yes, good morning, Mark. So, thank you for these two questions. Sue speaking. So, again, when it comes to Consumer Beauty, you're right to point out on the fact that Consumer Beauty is entering the new cycle, in fact. The first cycle that started somewhere around Jan '21 was really to reinvent the brand equity, sometimes coming back to historical brand equities, strengthening this, modernizing this, creating great advertising with the highest ROI, as just mentioned by Laurent. And this was really what explains the back to market share gains, which happened now for the full year. This is the first time since 2016 that this division is gaining market share for a full year. So, this was Stage 1. Stage 2, in a way, I love to say that Stage 1 was fixing the surface, if I may say, and then Stage 2 is really getting deeper, and we start to see real, I would say, disruptive best-in-class in terms of efficacy in the market innovation. This takes time. It takes 1.5 years to create a fantastic mascara, fantastic foundation or a long-lasting lip color. So, this is now the moment of this. So, you can imagine that Consumer Beauty businesses, specifically behind makeup, are going to continue to put on the market, big innovation supported by excellent advertising, having the best ROIs in the company. And on top of this, we have the adidas brands. We've talked to you about adidas last quarter. We started in West -- Eastern Europe, sorry, with a very, very strong results, specifically on the high-end shower gels. And now we are implementing this innovation in the Western world. And as you can imagine, this has a big potential also this brand in China, where the brand is cooler than ever, and it's already the Number One shower gel brand for Chinese men in this country. So, you can imagine us building this brand into a well-being -- high-end well-being brand in Europe, in China and hopefully, in the rest of the world, as you can imagine. Now to answer the second part of your question about the beauty cycle, again, I'm a strong believer that the main thing that has changed since a few years now is what I call the healthification of the beauty industry. This industry is about things that make people look better or feel better. And this becomes something that's a non-negotiable for consumers. And there, the limit is only us in terms of ability to innovate, to tell new stories, to bring new brands and new technologies to continue to make the consumer interested in our category, because this is a need to meet and not something that is nice to have.

Our last question comes from Carla Casella from J.P. Morgan.

Hi. Thank you. You talked about Prestige high single-digit growth, in mass, mid-single digit. Can you talk about how much of that was new doors? Or is that mostly just pure sell-through of kind of the new products you've been talking about?

Yes. Hi. So, basically, the model we are using for Prestige and Consumer Beauty, so this is mostly organic growth, also definitely either Prestige and Consumer Beauty. But definitely, if I take the case of Consumer Beauty, now step by step, we are seeing that we are getting shelf space. So, definitely, that success of innovation, acceleration of rotation by all these elements step-by-step, we are regaining traction first with consumers and retailers and this giving us absolutely all the ammunition now to gain shelf space. So that's really -- we are building. So, [indiscernible] done in a healthy way. That's really back always we talk about discipline that we are doing definitely with marketing teams either Consumer Beauty or Prestige. We are really focusing on productivity [progress] (ph). And that's -- again, we're thinking about the right productivity progress with absolute KPI. Once we optimize productivity progress, then, of course, we are working on new doors, but with very selective criteria that we're entering new doors only and if only we have guarantees that productivity is really at target level.

And we've reached our allotted time for question-and-answer session. I will now turn the program back over to our speakers for any additional or closing remarks.

Yes. Thank you, everyone, for your questions. If you allow me a few closing remarks, the first one is about the category, beauty is and will continue to be the darling category of consumers around the world for all the regions we have mentioned during this earnings call. Please see Coty in its reinvention Stage 2 phase, entering into real innovation, fantastic ROI behind advertising, new white spaces in terms of regions, categories, including skincare and, of course, targeting leverage by about 3x at the end of this calendar. Last but not least, I would say that even Coty is not in its maturity stage. As you can imagine, we will continue to grow given all the white spaces that we're having. And the last remark is that it's very important that the long-term vision and view is really the one that is at play at Coty, and we are building this company for the coming, I would say, decades to become a true beauty power house. Thank you very much.