Kevin Monaco - SVP, Investor Relations, Treasurer Bart Becht - Chairman and Interim CEO Patrice de Talhouët - EVP and CFO.

Bill Schmitz - Deutsche Bank Chris Ferrara - Wells Fargo Olivia Tong - Bank of America John Faucher - JPMorgan Wendy Nicholson - Citi Research Jason Gere - KeyBanc Capital Markets Lauren Lieberman - Barclays Connie Maneaty - BMO Capital Markets Steph Wissink - Piper Jaffray Mark Astrachan - Stifel Javier Escalante - Consumer Edge Research.

Good morning, ladies and gentlemen. My name is Kathy, and I will be your conference operator today. At this time, I would like to welcome everyone to Coty's Second Quarter Fiscal 2015 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

As a reminder, this conference call is being recorded today, Thursday, February, the 5th. Thank you. I will now turn the call over to Kevin Monaco, Coty's Senior Vice President, Treasurer and Investor Relations. Mr. Monaco, please go ahead. Thank you..

Good morning and thank you for joining us. On today's call are Bart Becht, Chairman and Interim CEO, joining us from London and Patrice de Talhouët, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind you that many of our comments may contain forward-looking statements.

Please refer to our press release and reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements. Except where noted, the discussion of our financial results and our expectations do not reflect certain non-recurring and other charges.

You can find the bridge from reported to adjusted results in the reconciliation tables in the earnings release. I will now turn the call over to Bart..

Thank you, Kevin, and good morning, everybody to Coty's second quarter results conference call. This morning, we will take you through a summary of today's announcement and then Patrice and I will be pleased to take your questions.

Q2 was a solid quarter and a very good first step in the right direction as we started executing our strategy as outlined last quarter of investing in and fueling growth of our power brands and driving strong profit growth behind efficiency programs.

Our power brands accounted for approximately 70% of our net revenues, continue to grow like-for-like, albeit modestly both in the quarter and the first half. We recorded particular good growth in the first half on Rimmel, OPI, Sally Hansen, Chloe, and Philosophy.

Thanks to new product launches like Rimmel, Wonderful Mascara, Sally Hansen Miracle Gel, and Chloe Love Story. Importantly, Q2 illustrated that we're now well on our way to build the better business.

We have started to invest more in our power brands while cutting, non strategic spending in the advertising and promotion budget on items like copyrights and usage fees, samples and testers, as well as TV and print production costs. This modestly reduced our overall A&P spend on our constant rate basis in the quarter.

Our actual rate to drop clearly was much bigger due to FX. To drop in A&P combined with lower fixed cost and cost to goods savings enabled us to increase Q2 operating profits by 12% at constant and 10% at actual rates.

As a result, the Q1 operating profit decline versus the prior year has been fully compensated like I said bringing first half operating profits inline with prior year. Adjusted EPS at actual rates grew 61% in the quarter and 30% in the half, aided mostly by a lower tax rate but also by a lower share account as we resumed our share buyback program.

Moving to the remainder of full year 2015, we are optimistic about what our strategy can do for Coty's and we remain committed to steadily returning Coty's profitable growth. Finally our announced offer to acquire Blue Rock Cosmetics from CHANEL is - and we expect the deal to close shortly pending the approval from the relevant authorities.

I’ll now hand over the call to Patrice, who will provide a few comments on the financials and the progress of the global efficiency plan..

Thank you, Bart. And good morning, everyone. I will comment on the overall P&L, and our overall financial position. First, the P&L. Total net revenues were flat like-for-like in the second quarter. Our focus on cost of goods reduction supported by our supply chain program enabled the Q2 adjusted gross margin to increase 80 basis point to 59.5%.

Our year-to-date adjusted gross margin was up 30 basis point to 59.6%. The company’s contracts also show improvement as we saw solid reduction in our fixed cost. And as Bart discussed, the reduction in A&P spending the quarter, reflected the focus on efficiencies in nonworking media even as investment behind our power brand increased.

We are very confidence in the progress of our global efficiency plan as the action we have taken to-date will bring us more than halfway towards our savings goal of $200 million. And as we continue to dig deeper in our business, we are confident that they are more opportunities to come.

As a result of these factors, we are happy to see our adjusted operating conclude 10% in the quarter, with the margin expanding 200 basis points to 15.9% versus 13.9% in the prior period.

It's worth nothing that we saw margin improvement in each of our segments with fragrance up as strong 270 basis point to 21%, color cosmetic up 170 basis point to 11.8% and Skin & Body Care up 40 basis point to 6.6%. Moving down the P&L, thanks to a foreign tax settlement in the U.K., our adjusted effective tax rate for the quarter was 5.1%.

This settlement coupled with this ongoing benefits should result in adjusted effective tax rate of approximately 60% in fiscal 2015. Looking beyond fiscal 2015, we expect our adjusted effective tax rate to be approximately 25% with potential for viability depending on the breakdown of profit by region.

All these encouraging results are the right steps towards building a better business and beginning a strong leader in the global beauty industry over time. We also resumed our share buyback program as we repurchased 7.6 million shares in the open market during Q2 for $149 million.

We have continued our repurchasing activity in the current quarter and fiscal year-to-date we have repurchased approximately 13 million shares for approximately $250 million. At this point, we had 15 million remaining under the current authorization and we intent to continue to be opportunistic in that front.

The combination of our strong adjusted operating income growth, lower effective tax rate, and active share repurchases drove a very significant 61% growth in our Q2 adjusted EPS to $0.45 and a 30% growth in our first half adjusted EPS to $0.73. Thank you. We will now open the call for questions..

[Operator Instructions] Please stand by for your first question, which comes from the line of Bill Schmitz of Deutsche Bank..

Hi, guys. Good morning. Can you talk a little bit more how currency is going to impact the top and the bottom line for the fiscal year? And then maybe if you have any commentary about how you think the category growth rates are trending and what the retailer inventory levels look like especially in the mass channel.

Both of those would be really helpful. Thanks..

I'll start with the ethics question. I've shown in our earnings release, [ethnic translation] [ph] negatively impacted our Q2 revenues by 5% and by 2% for the first half. The impact on our profitability was more moderate as our business had natural hedging built-in with a large portion of both our revenues and costs delivered in euros.

The negative impact of ethnic translation on our operating income was 3% in Q2 and 1% for the first half of the year. Now when you come to the rest of the year assuming rates remain at current levels. We will see negative impact of approximate to be 5% to 6% on both revenues and income for the second half..

So in terms of the categorical, I can give you picture of where we stand at the moment in terms of the markets, which we read and we are exposed to, we have seen overall growth in the beauty industry of 1%, 1.5% which you know, I would say Skin & Body growing less than that, color growing faster than that and fragrance being more or less in line with that.

In terms of within fragrance, prestige is growing faster than mass. Mass is declining in some markets, not in all, but in some markets.

So if you look at the growth rate that we are exposed to, market growth rate, you can see that, on net revenue growth is somewhat less on a total basis, our power brands clearly growing in line if not faster than the market growth rate, but our overall growth rate is somewhat less, which reflects in part A, in fill and in part reflects that we have given up some ground between growth sales and net revenue growth in terms of discounts and allowances.

Does that answer your question?.

Yes, it does. I was curious about the inventory levels also at the trade? Especially in the Mass channel and even more specifically in the US..

Yeah there is clearly, there is continuing efforts to optimize that. Having said that, if I have to compare this to last year or the year before, the impact is less than it was in prior years, but there is still an impact from inventory reduction. I wouldn't say that it’s a hugely material impact on our total Coty numbers.

Okay, great. Just a follow-up on that growth to net impact.

Is the worst over on that front or do you think it's still going to be fairly heavily promotional going forward?.

Well that clearly depends on the competitive situation going forward, which is hard to predict. So clearly we have efforts in place in order to reduce the gap between grow sales growth and net revenue growth, but you know, it will very much depend on the competitive situation..

Great. Thanks very much guys.

The question comes from Chris Ferrara of Wells Fargo..

I guess on advertising and consumer promotion. Bart, I think last quarter maybe you indicated that you're looking to improve the returns on that spend and you improved the non-working media portion. Maybe shift some of that into working media. This quarter, you had a big SG&A reduction and you guys said at lower advertising and consumer promo.

What drove it down and is this a trend? Like would expect advertising and consumer promotion to continue to trend down year-on-year?.

Yeah we have - if anything we have increased the push in terms of efficiency programs since I took over. Even I would say we probably have substantially intensified that. I would say within Coty there is substantial room to improve what I will call cutting non-strategic spend and investing in strategic spend.

And when I talk about non-strategic spend you have to think about everything the consumer never sees, which is how much money we spent on producing commercials, display materials, copyright fees etc., so which is clearly necessary item, but it is a spend the consumer doesn't see and there is huge room for improvement in this area.

Similarly the fixed cost, there is a number of buckets where there is room for improvement in rationalization. So going forward, you will see our heart in efficiency programs and then a gradual redeployment of some of those savings back in our power brands.

So if you look at the Q2 results, you have seen growth on power brands, you had seen very modest growth, no growth at all on the total company, but you have seen substantial increase in profit growth.

So in terms of going forward, I would be very happy if we have a similar pattern to what we've seen in the second quarter, which means continued growth is what we are targeting for our power brands and continued growth basically in profits from efficiency programs..

Got it.

And efficiency in that you could expect that advertising and consumer promotion margin to be lower year-on-year as you move through the rest of the year and into next?.

I think there is room for improvement in terms of the A&P and the SG&A ratio absolutely..

I know Patrice, you said it on the last call too, that you guys have now booked expenses on the efficiency programs that get you about half of the savings.

Does that suggest you've actually realized half of the savings or might you not even be at that level yet on savings?.

Yeah it's a good question. So actually what I said is that the actions that we have already put in place would realize half of the savings. So they did not yet materialize in the P&L, but let me come back on that and be a little bit more precise. So, what we have said is that we have a savings target of $200 million.

If you remember this $200 million is split into three buckets, you have first the China business organization for $20 million. We have the - and we have the remainder amount for the One Coty reorganization. So where we are now, and what you could expect in the fiscal 2015, you should expect the bulk of the China savings to come through the P&L.

You, what I have quoted in the last earnings call is that, $45 million of the $60 million productivity program should come through in fiscal 2015 knowing that $25 million that has been realized in fiscal 2014. So there is another $20 to come this year P&L.

And in terms of One Coty, I think we are progressing very nicely and there is, the bulk of improvement is going to materialize in the second half of the year and you have a very minimal impact in the first half of the year. So you could expect roughly $20 million impact on the cost structure in fiscal 2015.

Great. Thanks a lot..

Thank you..

Thank you for you question. The next question comes from the line of Olivia Tong, Bank of America..

First, I was wondering could you just break out the growth from the power brands versus the non-power brands and how do you think about that going forward? Would you expect that the non-power brands continue to be a drag on sales?.

Yeah what we have seen in the first half of the year, we have seen modest to mid-single digit growth on our power brands and clearly the remainder of the business has not grown resulting in the overall picture of a flat business.

Clearly as going forward, we’re looking to further boost the growth of our power brands while overtime we’d expect that the tail brands will decline in terms of importance and in terms of impact on the total growth rates.

So that's what we’re targeting for is to redeploy some of our savings out the efficiency programs into our power brands and we will be targeting to gradually working to increase pull behind our power brands and then we would see a gradual decline of the impact of our tail..

Just looking at U.S. mass data, it looks like the women's fragrances area saw a little bit of an uptick in the last four weeks. I know four weeks doesn't make a trend.

Is there something specific that's been driving that and can we read into potential actions that you've taken or potential actions that you're planning to take in order to keep that growth rate going?.

I never really look at four week data certainly not in the beauty categories because they can fluctuate dramatically from one four week period to another. So I'm more interested in what is happening on a year-to-date basis. In the U.S.

the fragrance category is showing low but okay-ish growth, like I said somewhere in the range of 1% to 1.5% with prestige fragrances growing at the moment we see fragrances declining. So clearly, we are doing very well with some of our brands in the fragrance category in particular with Marc Jacobs, and Daisy Dream or with Chloe behind Love Story.

So we have some good initiatives, Calvin Klein Reveal was okay but was more mixed compared to the other two, the other two were definitely successes..

Great. Thank you..

The next question comes from John Faucher of JPMorgan..

I wanted to ask two questions here. First off, given what you just said about Marc Jacobs and Chloe, just following up on the celebrity weakness.

It sounds as though that's not going into the designer segment yet or should we read into some of the weakness on the Calvin Klein launch that maybe at a mass level you're seeing that celebrity piece drag into designer? And then the second question was about M&A in terms of as you look at this volatility and the continued weakness in some of these categories, do you think that shakes more assets out? Are people we're seeing proctor and look to divest some assets? Are you seeing people get nervous about some of this weakness and with a greater willingness to sell? Thank you..

Well, as you can imagine, we're not going to comment on the later, since we cannot comment on any M&As. In terms of your first question, you’re definitely right that the mass fragrance part in particular on the celebrity side, in the U.S. is in decline at the moment.

On the other hand, prestige fragrances are showing good growth and we do not see any similar phenomenon like we’ve seen on celebrity fragrances hitting any of the prestige designer fragrances..

Thanks..

The next question comes from Wendy Nicholson, Citi Research..

Two questions. First, I just want to be clear, the power brands having grown faster in the first quarter than they did in the second quarter. I assume that's just timing of initiatives and all that I know, but you said that you don't care about really short term results.

But nothing in terms of a structural deterioration with any of those brands I just want to be clear on that. And then the second question is, you called out in the release the travel retail business as being particularly strong. But Estee also reported this morning and they called out that channel as being weaker.

So can you comment on travel retail? Whether you think you're gaining share there? Maybe why you're business is more robust than theirs in travel retail specifically? Thanks..

Yeah I will let Patrice comment on the travel refill numbers in specifically..

Can you repeat the first part of your question one more time, sorry I didn't..

Just that the power brands seems to have been stronger in the first quarter than they were in the second quarter and I'm trying to understand why that was..

As you all know, this is - particular in the fragrance industry, launches have a huge impact on quarterly results. Clearly in the first quarter, we had the massive launch of Calvin Klein Reveal and we had more of an impact there than we've had in the second quarter. So clearly there is phasing impact between the two.

Would I say basically that I will be concerned about this, at this stage, no, but clearly we watch the quarterly results as well. But I wouldn’t say there was anything in terms of trends because it has much more to do with chasing of initiatives..

I'm not sure we’re not going to comment on the - on one of our competitive performance. What we can say about the Coty performance is that in the last quarter we grow in Q2 versus the prior period.

And I can also emphasize the fact that we had pretty strong result in the Americas and in Asia-Pac offset by some weaknesses I would say in the European region..

Do you have a sense for your market share and travel retail?.

No. Not yet. It's too early to say..

Got it. Okay, thanks..

Thank you. The next question comes from Jason Gere, KeyBanc Capital Market..

Just two quick questions.

One, as we think about the FX that's going to hit you through the year, can you talk about where there are opportunities for pricing over the course of the next six months? And then secondly, going back to tail brands and I understand the spending that you're putting on the power brands, but at what level do you balance between stabilizing the growth and the profitability without the risk of any destocking of some of those tail brands at some of your key customers? Thanks..

Yeah, let me take the first part. So, in terms of pricing, I don't think, that isn't certainly the first protocol. We have like I said before, a huge amount of improvement potential within Coty in terms of efficiencies. Not just on the cost of goods line but most importantly in the SG&A line.

And I think that's where I would look for compensating potential impacts from an FX point of view. Pricing will be very much dependent on the competitive situation and I do not think that in most categories and countries at the moment there are substantial room to take price increases simply because the exchange rate changed.

So, efficiency programs will be our first protocol. In terms of the tail, we should not forget that well over 70% of our total portfolio is in power brands and to the extend by reallocating our resources into those power branding, we can make a run better and faster, that should be more than compensate the decline in the balance of the portfolio.

And quite frankly, a lot of those older brands, the return on investment is simply not very good. So, I would not put my money there..

The next question comes from Lauren Lieberman of Barclays..

I just wanted to talk a little bit actually again about power brands trends because clearly second quarter with weaker than first. It decelerated from mid-single digits to up modestly.

And yet with incremental investment behind those businesses and a lot of really solid launch activity and philosophy having had good momentum into the quarter, I had thought Adidas with some launch activity, obviously, Marc Jacobs, Chloe, et cetera.

I'm not sure why there wouldn't be any concern around deceleration in power brands with all of this launch activity. I understand cost savings are tremendous. They're going to help the way along but it does feel like there's something missing on the power brands at this point. I'd love to hear more about plans to address that. Thank you..

There is clearly internal discussion in the base in terms of the best initiatives and the best investments to be made in power brands. In terms of the deceleration, I think you really very much have to think about phasing of initiatives plus one or two other factors.

One factor clearly is Adidas, China where we shifted from our own business model to handing the business over to Lee Ying Foo which the cost is substantial chunk in terms of revenues simply because we’re working with a different business model. What I have also mentioned basically the Calvin Klein, the phasing of the initiatives of Reveal.

So there is a number of factors. If you're looking at brands which are doing really outstanding in the portfolio, clearly you need to think about brands I've mentioned before which are Rimmel, Sally Hansen, OPI, Chloe, Marc Jacobs, Philosophy. Those brands are all doing extremely well.

Adidas is largely down because of the change in the China business model. Playboy is down mostly because of the assortment and competitive pressures and Calvin Klein which is our largest brand is mostly - or is less from a growth point of view, in the second quarter, in the first quarter because of phasing of initiatives..

The next question comes from Connie Maneaty, BMO Capital Market..

Good morning.

As you look at the future cost savings opportunities, how do they compare to the size of what it is you're doing now? And should we expect there to be more charges to execute any future plan?.

Thank you for the question. Good question. As I said we still have a lot to do to realize the full extent of the $200 million savings because all the actions till date are using $200 million savings. However, I think we are progressing very nicely. And we’ll clearly provide an update with the Q3 results if there is any adjustments in program so far.

So as far as your precise question on China, clearly everything has been booked already in terms of the productivity program, the bulk of it has been booked. And in terms of One Coty, the bulk of it has been booked in the sense that the remaining part of the program is mainly to do within direct procurement savings.

So what we have done for the time being is the reorganization side of the business. Now, as Bart eluded to several times, what we need to do is to bring more flexibility to P&L and the more we dig, the more we seize some opportunities in direct procurement, mainly in direct procurement actually..

Thank you. And then a question on the tax rate.

How much this year's reduction would you term as permanent and how much is one time in nature?.

Good question. As I said, in the Q2 results, the effective tax rate was 5.1% and this is mainly due to a one-off, due to UK tax settlement.

However what I've mentioned, that beyond 2015, you’re going to get some substantial savings from an effective tax rate because the previous guidance 28%, and the new guidance that we're now giving is 25% plus or minus depending on where we are making profit. So we have 300 basis point improvement, thanks to all the settlements that we have done.

So I think that gives you the answer to your question..

Thank You..

The next question comes from Steph Wissink of Piper Jaffrey..

Just curious about some of the initiatives. Particularly the discounts and promotions you ran during the holiday period in 2014. How are you thinking about anniversaring some of those events or maybe changing some of those in 2015? And then, just a question more broadly on the lifecycle of new product introductions.

I'm curious to your thoughts around the selling window of kind of the peak to trough demand. Are you seeing that narrowing over time as a competitive environment gets a little bit more intense? Or do you find that your demand curves tend to be well established and are following a historic trend? Thank you..

Yeah. I think, the rate of innovation clearly has dramatically increased over the last couple of years, certainly over the last ten years, pretty much across all the categories that we're in, to increase much beyond but is literally hard to imagine.

Also in terms of peaks and troughs, they have changed and they have tightened over the last couple of years. But there is no like further change in the recent history. So does it mean we are now stabilized going forward. Time will tell.

And I think a question in terms of promotions, there is a slight increase in promotional intensity in our business compared to last year which I already alluded to before as we spend more between growth sales and net revenues.

As a percentage of net revenues in the year-to-date numbers compared to last year and this is exactly another opportunity which I believe we can tackle going forward..

Just one follow-up with respect to some of your marketing initiatives. We've been observing some really unique and creative digital marketing strategies. If you could you just give us some insights into what you're learning on the digital front or social front, that would be helpful. Thank you..

Yeah. I don't want to dig in too much into digital learning because that clearly needs to stay in-house since that's commercially sensitive stock. But as you can imagine in certain categories which we're in, digital is a fair amount importance.

I only have to tell you about like the color category clearly is a usual important category from a digital point of view because consumers start very, very young using this products and clearly the younger the consumer audience is, the higher the consumption is of digital media. So I would say much beyond that, I really don't want to discuss..

Okay. Fair enough. Thanks guys..

The next question comes from Mark Astrachan of Stifel.

Bart, I wanted to sort of get your thoughts about your engagement in the business. Obviously, you've been interim CEO for a while now but you're also I suspect feeling a little bit more with the protracted EU review into the coffee businesses.

Sort of wondering how you're sort of dividing and conquering your time today? And then just more broadly the thoughts on a CEO search and what sort of traits you're looking for whether it's beauty experience and operator to come in and roll up the sleeves and do more on the cost-cutting that you've already done.

Somebody that could do both assuming that there's somebody out there like, would be helpful..

Yeah I think my Coty colleagues probably came and tested this that, I'm spending definitely full time working weeks on their business. So if you want my time split, it's probably like 80-20 between Coty and the rest of the other business which I'm involved with which is on coffee.

Where I'm just the Chairman and I'm not really involved in any executive capacity.

In terms of the CEO, so what are we looking for? So what we’re clearly looking for is somebody who has the leadership skills, who has the strategic vision and who has the operational capabilities, and who has clearly extensive experience in the consumer goods whereas an ideally exposure to some of the categories that we're in.

I would say those are all very obvious, our requirements. In terms of the timing, we are still looking pretty much at the same time is we're looking for somebody to start some time over the summer and that hasn't really changed where more gains, search process than we were the last time we talked..

Great. Thank you and just another question.

Given the improving EBITDA do you think there is an opportunity need for to restructure some of the debt covenants to allow more leverage or any sort of thoughts that you could give around potential opportunities would be helpful?.

Yes. Good question. But I'm not sure that I am going to comment on that one on our debt covenants and on the structural of our financial, so I keep it quite for attendees. But that’s a good question. Thank you for that..

We'll look forward to update on that. Thank you..

I'm sure you will..

The next question comes from Javier Escalante of Consumer Edge Research..

I have a couple of clarifications if you will. As you basically reduce the support to the non-core brands, 30% of the portfolio shall we expect topline growth to be flat absent an acquisition? That would be my first question. And my second question is a clarification on Europe.

It's not surprised to be weak but as my colleague Wendy mentioned with regards to Estee, they have a very strong growth in Europe.

And I wonder if you can comment on how you see category growth in Europe between mass and prestige? And also if you can give off a sense of how the joint venture with Avon is going in Brazil? Whether the second quarter results for Playboy and Adidas that came out to be down has to do with its slower start in Brazil? Thank you..

Let's start with your first point. So, our number one objectives at the moment and foremost to dramatically improve the efficiency of the business and to restore profitable on the business. The second part is a huge part of the savings out of the efficiency programs, is to start growing our business at a higher level.

And clearly this is a gradual process, because it's a process of generating savings, then identifying the opportunities where we can invest with a decent ROI and where we cannot is where we put the money on the bottom line.

So, you can have to think about efficiency to generate savings part of it goes to the bottom line, part get reinvested back in the power brands for growth. So clearly this means that we are targeting further profit growth and that we are targeting a gradual improvement in topline growth momentum.

In terms of your question on Brazil with Avon, that’s been a nice effort. It largely impacted the first quarter probably than the second quarter which is simply a part of the way they run the business because you know this is door-to-door business and it comes and waves. But I would say overall results are satisfactory.

They are pretty much in line with our expectations.

Did I answer your question or did I miss something?.

Thank you, yes. Most of it, the only one has to do with Europe. It's not surprising that it's weak but the question that I have is that both LDMH and Estee Lauder reported better growth.

Then the question is whether it's an issue of category growth and if you could comment on master prestige in Europe? If you have any sense of what would be a reasonable growth rate in your view these two separate segments are growing mass versus prestige in Western Europe? Thank you..

Yeah I am looking less and less of that because the lines between mass and prestige in more and more countries has starting to blur to be honest with you. So I would say, in terms of - before I told you that the overall market growth rate that we’re exposed to was somewhere around 1% to 1.5%. I would say Europe is some what less than that.

Where we are still seeing growth is in Northern Europe and parts of Eastern Europe, some Europe is not a very good story. In terms of by category, we’re still seeing in similar phenomena as we see in the U.S. where the prestige fragrance is growing but mass is somewhat declining.

On the other side, probably the most dynamic part of the business also there is the color category. So, if you want a exact data we can probably give you those data after the call..

Thank you very much..

Thank you for you question. You have no further questions at this time. [Operator Instructions].

If there are no further questions, again I just thank everybody for being on the call. I'm looking forward to talking to you in a couple of months. Thank you..

Thank you for your participation in today's conference. This concludes the presentation. You may disconnect. Have a good day..