Natuzzi S.p.A. (NYSE:NTZ) Q2 2023 Earnings Call Transcript

Natuzzi S.p.A. (NYSE:NTZ) Q2 2023 Earnings Call Transcript October 2, 2023

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Natuzzi 2023 Second Quarter and First Half Financial Results Conference Call. As a reminder, anyone who like to join this conference via telephone may do so by dialing +1-412-717-9633, then passcode 39252103#. In addition to the link already provided to join via video. As a reminder, if you’d like to join via telephone it’s +1-412-717-9633, then passcode 39252103#, in addition to the link already provided. At this time, all participants are in a listen-only mode. Following the introduction, we'll conduct a question-and-answer session, instructions will be provided at that time to queue up for questions. Joining us on today's call are Mr. Antonio Achille, Natuzzi's Chief Executive Officer; Mr. Carlo Silvestri, Chief Financial Officer of the Natuzzi Group; Mr. Pasquale Natuzzi, Founder and Executive Chairman; then Mr. Jason Camp, Senior Vice President of Retail for North American Market; and Piero Direnzo, Investor Relations.

As a reminder, today's call is being recorded. I'd now like to turn the conference call over to Piero. Please go ahead.

Piero Direnzo: Thank you, Kevin and good day to everyone. Thank you for joining the Natuzzi's conference call for the 2023 second quarter and first half financial results. After a brief introduction, we will give room for a Q&A session. Before proceeding, we would like to advise our listeners that our discussion today could contain certain statements that constitute forward-looking statements under the United States securities laws. Obviously, actual results might differ materially from those in the forward-looking statements because of risks and uncertainties that can affect our results of operations and financial condition. Please refer to our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission for a complete review of those risks.

The company assumes no obligation to update or revise any forward-looking matters discussed during this call. And now, I would like to turn the call over to the company's Chief Executive Officer. Please, Antonio.

A customer happily browsing aisles of high-end furniture in a large showroom. Editorial photo for a financial news article. 8k. --ar 16:9

Antonio Achille: Thank you, Piero and thank you, everyone to join our second quarter press release on 2023 results. Let me share -- let me start by providing some facts about the market. I believe the fact that most analysts in our sector still refer to 2019 to compare 2023 data, speak by itself. We've been through an unprecedented cycle that brought the sector to potentially one of the most positive momentum in its dynamics to a very difficult situation. If we look at what's happening around the globe in the real estate market, we do see signs of perduring uncertainty. I believe everyone has read with interest the news about the CEO of Evergrande being de facto put (ph) under physical restriction. We do see that the continuing tension on the depth side because of the high interest limits the purchase of new houses, which is a primary driver for the industry.

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Q&A Session

I want to share these elements to put in perspective our 2023 second quarter performances. As you have seen by now, unfortunately, our top line have been suffering versus 2022. Quite seriously, in terms of decrease and also in terms of sales, total sales, we are below 2019. I think that it's still important to notice that if we look at the branded invoice sales, which is in a sense the strategic direction the company is heading to, the sales are above 2019, so above 5% 2019. Currently, our business is composed by more than 90% by brand sales, which means sales which are done under the name Natuzzi Italia or Natuzzi Edition, which are our dominant brands. This is important to us because we stated clearly in our long-term strategy that we are here to fully leverage the strengths of the brand of the company and act in more high price point segment in the market.

Another element which is important to share is that despite the very low sales, we have been working to compensate at the gross margin level, the tension on production cost which has been necessarily higher because of lower utilization of our factory. As you know Natuzzi is a [indiscernible] which means which is vertically integrated, which means we have fixed cost not only in the retail but also in the factories. So despite the non-saturation of our factory, we achieved 36.4% gross margin compared to 31.4% in 2022. And again, looking at normalized year, 27.8% in 2019. So versus 2019, the company increased by 9% the gross margin despite the impact on production cost of reduced sales volumes. How this has been achieved? This has been achieved by a better discipline in terms of pricing and a better cost management.

In 2023, we didn't do any price increase. The last price increase was put in place in June 2022 the U.S. -- to the U.S. listing. So it's almost one year, we didn't do any pricing increase even more than one year. But what we had done, especially in 2022 has been carefully looking at all our price list to make sure there was no situation in which a specific market or specific partner benefited from price condition not allowing us an adequate marginality. In terms of cost, we of course, did a lot of effort to contain the cost of our raw material and utilization of our raw material. I remind you that gross margin does not include the cost of transportation which has been deflationary this year. But in this gross margin, we don't take an advantage for that.

So this allow us to achieve in the second quarter 2023, an operating breakeven. I think it's important to notice that this compare with, for instance 2019, a loss of nearly EUR8 million with a base of sales, which is -- which was EUR10 million above than 2023. What it means? It means that by working diligently on our cost structure, we kind of lower the breakeven of EUR20 million and more of sales per year, which as you will see is a kind of underlying topic of this press release. To make explicit this journey, we're not having the sales that we aspire to because most of the market condition, we try to accelerate the optimization of our, let's call it, back of the house operational machine, so to extract more value, more cash when as I'm sure growth will come back.

Let's look at cash. Cash at the end of the period, so June 2023 was of EUR44.5 million, which compared to EUR54.5 million at the end of 2022. Here, despite the difficult year, we didn't stop investing in a critical area. We invest EUR10.6 (ph) million of which EUR5.3 million went to optimize the Italian factory and EUR2 million to open direct stores. Operating activity were positive despite the lower level of sales by EUR1.6 million. So as you can understand by now, we don't anticipate a quick inversion of the market cycle, at least for the end of the year. And in this market context, we believe and we are acting accordingly, the cost and capital efficiency are of paramount importance. For that reason, we launched a set of initiatives to reduce cost and improve working capital discipline, which Carlo, who will comment later more in detail, but this includes, for instance, really working on our SG&A structure, including the account.

So more, I would say, a turnaround approach than a transformation. I believe it's important to remind that we have done already since 2021. I would say, a silent restructuring in the sense that you didn't have heard about it, despite, we work in a highly unionized country like Italy, but we reduced already by 577 units our overall workforce, including a quarter and factory and we're going to be continuing in this direction. So to streamline and making more agile our quarter and also to optimize and continue optimizing our factory. Additional activity in the, let's say, chapter of cost optimization are the one, which are taking the simplification and streamlining of our complexity. Starting really from the collection, where we have this philosophy of adding fewer and bolder launches in the market rather than operating with several launches, which was the modus operandi of the company when distribution was primarily worth sale.

In terms of growth, our priority remains organic growth. One distinctive asset of the company is the one of adding 700 stores. We believe that, that is really where we should start from because if we make those stores more productive, we're going to get more sales momentum, but also better utilization of the investment we have done directly and the investment our partner done directly. Of this store, although 700 store roughly one-half are in China, and I will expand later on China. So what we are doing to improve retail. We are improving our talent pool. We have built a central retail division, which is really helping to capture the best practice starting from singular individual market like U.S., codifying them in disseminating them. We also invested in adding improved IT system that help us to read very carefully the performance at retail level, which is now the standard we use to engage in discussion with store management, so the store manager and on the level in the organization up to the country manager.

We want to strike to excel in retail management, so to be a credible partner also to our franchisee. As you know, out of 700 stores, roughly 600 are operated by franchisee. So clearly, that is where we expect the benefit to come from as well. So every effort we do in our directly operating store as the ultimate objective to be able to be credible partner for our dealers to improve their own performances. To support organic growth, we also strengthened our marketing team. We hired a retained person, which was already known to the group, Daniele Tranchini. He brings really a wealth of incredible experience, helped senior position in agency, including Walter Thompson and Publicis and they're really already making a huge difference in shaping our unique story around the different markets.

Talking about market, a couple of highlights on two important geographies. The first one, China. As you all know, especially the investor and analysts that follow us, in China, we are in JV with Kuka. And we don't consolidate line by line because we own 49%. But our aspiration is not to consider China as a financial investment, but really as part of our operation to make sure that also China benefit from our learning and especially manage the brands in the way they should be managed. After that, for almost three years, and at least since the beginning of my [indiscernible] date, was impossible to travel to China. We have been already 2 times in China since May last year. For a reasonable period of time – so many time, two weeks with the most important people in the organization, which are our Chief Brand Officer; and including our Chairman, Pasquale.

I also in full agreement with our Board take full responsibility to the support of the China operation to work in partnership with our JV. China is clearly a market where the wind not only for furnishing but for everything has changed significantly. I mentioned in my initial speech the potential implication of Evergrande, which was the market leader in real estate, which is down 90% of its market cap and is facing really a difficult situation. So we really strengthened the quality of the relationship with our JV team in the spirit of making sure they really can benefit from our brand, merchandising, retail knowledge and guidance. And in accordance with our Board, I'm planning to be back in the next few weeks in China for at least two, three weeks, we need to support this process.

U.S. is the other market, is the [indiscernible] is the second [indiscernible]. U.S. is our potentially largest single opportunity has been very central to the story of the success of this group. And we believe it can go back to be as important as it has been. To ensure, we are closer to our business, we're really focused on the two channels with very talented manager. I already anticipated in the last press release that we were very pleased to have Scott Kruger, joining us to lead the wholesales and gallery business which is still predominant in terms of business -- total business in North America. Jason, by now every one of you knows him, fully respect for his retail competencies drive, we focus entirely on retail, where is the future in terms of future growth, especially Natuzzi Italia.

To make sure that the service provided to these two business units are really sharpened. We ask a senior manager from the group of Ottavio Milano to take on the role of President, really overseeing the staff function, which includes finance, customer care, HR, really to provide streamlined and more agile services to Scott Kruger and Jason Camp, who remain the person in charge for running and building business. So in closing -- and sorry, on North America, we'll ask Jason to comment, but even in a year, which as you see has been difficult, we didn't decelerate in terms of new openings. We opened seven new stores, of which six of Natuzzi Italia located really in primary location for our city development strategy, which include San Diego, there's been a location in Miami Fort Worth, Manhasset, Atlanta and Houston, and we opened one Natuzzi Editions in Frisco.

Our brand has kind of elevated specially Natuzzi Italia and so we are doing with our retail. So we're looking really for locations, which are flagship and which are a good Cathedral (ph) for, let's say, our brands. If we have a chance, I invite you to visit our new European Store in Manhasset, which really is a great example of the strategy is located in the Miracle Mile in Manhasset. So the part of Long Island that goes to the Hamptons is 10,000 square feet on two floor, we have a signature location, a signature design, and this is the kind of quality we aspire from the location. So in conclusion, it's evident that the current situation is unlikely to change in the next week or next month. We see differently the situation to perdure until the end of the year and potentially is something we need to come from trade with also the beginning of the year.

Our strategic direction is more clear than ever. We aim to invest in our brand with a focus on organic growth and retail in our core market, which I remind you is China, is U.S., and in Europe, is Italy and U.K. At the same time, we want to continue and accelerate the work to reduce cost and enhance the agility of our organization. So you know that we don't provide guidance, but I want to tell you that we are highly confident in the strength of our brand and our long-term growth potential. We're talking with a brand which has more than 60 years of heritage and the heritage is something a brand that cannot buy a copy and we believe this is a central and it would be an important element that eventually will bring us to achieve our midterm plans.

Having said so, I stop for potential questions at this level, with Carlo, we're definitely going to be providing more detail on the restructuring effort, which keeps us extremely busy. But let me stop here for a potential question on this initial strategic introduction.

Operator: Thank you. [Operator Instructions] Your line is now live.

David Kanen: Good morning. David Kanen, thank you for taking my questions. Are you guys able to hear me clearly?

Antonio Achille: We do. At least I do.

David Kanen: Yeah. So I guess at a high level, to me, the call-out here is at EUR83 million in revenue, we were actually operating profit neutral and generated a little bit of cash, which is impressive given the cost containment, the increase in gross margin and then the prospects for the future. So that being said, I'd like to understand or drill down a little deeper on the new branded stores, the direct operated stores that you've been opening. So my question is for Jason. When you look at all of these new stores you've opened Atlanta, Manhasset, Long Island, Houston, Fort Worth, et cetera. Can you give me a sense as to what those stores will run rate in annual revenue, Jason?

Jason Camp: Dave, good morning. Listen, we – three of those openings have happened in the last 45 days. And so, I think it's premature to attempt to predict an annual run rate on these openings. But I would say, based on the traffic -- the quality of the traffic that we're getting, we expect these stores to perform above our, let's say, network average for Natuzzi Italia.

David Kanen: Okay. And just as a reference point, Jason, what is the network average?

Jason Camp: Just shy of about 3 per unit.

David Kanen: Okay. So these new stores should be -- is it -- your internal plan, is it EUR4 million plus or is it closer just slightly above EUR3 million?

Jason Camp: We're watching these new guys carefully and obviously going to align on budgets per location as we get closer to the end of the year. But I think for public consumption purposes, I think, I probably said as much as I can say and should say.

David Kanen: Okay. So I mean, it seems clear to me that given the production per location and the high marginality that it's critical. And I've had these conversations before and I know that you acquiesce to them. But it seems critical that we open up more DOS branded stores. So can you give us an update? I know that we need to preserve our balance sheet, but also at the same time, opening these DOS stores puts us in a position over the next two years to get revenue back over EUR100 million per quarter, where it seems we could generate meaningful operating profit. So Antonio, the question is, we've had a -- let's call it, a noncore asset in North Carolina that has meaningful value that could potentially subsidize the net 10 stores, if not more than that. Can you give us an update on that and just reiterate that this is a top priority to open these DOS stores, hopefully, getting to 15 or 20 additional in the next two years.

Antonio Achille: Thank you, Dave, for the question. So I answer with two sentence. The first one is that we do confirm that open in the U.S.. For Natuzzi Italia, North America is a strategic priority. We are doing this size as you could expect of 2024 budget, which include, of course, also the investment statement. But the principle is to safeguard this intent. On the dismissal of non-strategic assets, there have been some progresses. We are considering option. I cannot say more than that, but there's been some positive evolution. So we hope that there will be some news on that front, which I remind you is our Board decision because, especially if we talk about a point, it goes beyond what is my autonomy. But we've been following up with all the meaningful approach with the asset, we always set publicly where we are considering this mystery, which including our [indiscernible] in Italy, High Point in North America, the iconic building, plus some terrain we have in [indiscernible].

For all those three assets we have interfere, pending or process in advanced stage. So we've been not dormant. So for NATCO, we have a process for the assets in the U.S., we have offer, which are pending either some final due diligence or some final consideration and approval from the Board. But this has been definitely -- something will be following up.

David Kanen: Okay. Thank you for that update. Because my -- here is my view, and not that I have a crystal ball, but I think there's a high likelihood that interest rates are going to have to be lowered during 2024, possibly, my opinion is in the first quarter of 2024, and at that point, we'll see mortgage rates come down and there's a high correlation of to housing as it relates to furniture, which should put us in a position where we start to see the business growing again organically. I would like to see a lot more stores by the end of 2024, so that we could start doing EUR90 million, EUR100 million a quarter, generating significant profitability given your leaner structure and higher gross margin profile. So I just wanted to reiterate to you guys that I'm hoping that you don't take your foot off the gas pedal in expanding some of these great markets in North America.

Antonio Achille: Sorry, David's interrupted, but also in the light of this, you should be right, what I mentioned before in time organization because we want really to have a heavy weight in terms of competence as there is a lot of wait, maybe wait Jason, really to focus entirely on business development, not be bothered and have a peace of mind from running more of the operation because really we intend to spend our network. And again, I don't want to second extrapolate, but you know there's some -- there's a lot of big changes, unfortunately, not always for the good in the landscape in U.S. and some brands in company, which in our view were also interesting company are at the risk of exiting the market. I'm mentioning Mitchell Gold that is filing for Chapter 11.

So we are looking at all the possible way to on an individual store base to accelerate our growth. So absolutely, they were aligned. We need also to make sure that this happen in a self-financing manner. And disposal of our strategic assets is clearly the way we are trying to do accelerate our self-financing capability.

David Kanen: Okay. So the next question for Jason, which you alluded to in your prepared remarks, are the organic growth initiatives at our DOS stores. Jason, could you drill down into some of the opportunities you think exist to drive meaningful same-store sales at your current small fleet of North American stores?

Jason Camp: Sure. So first of all, I'd say when we study the last six months of written orders in [indiscernible] 2019, are those like -- those 13 like-for-like stores are running around 44% above 2019. So there's been a lot of work to build a much more solid base from, let's say, pre-pandemic times. Second, as we look towards the future, I think there's really two significant opportunities here. One is for the team and I to build a talent base in those stores that can fully capitalize on any incremental trade and design project business. Our average order even compared to last year is up in the neighborhood of 20% year-over-year. And so we're fully committed to building a team that can engage in more design project work, more complete rooms, more multiple rooms whether that's with our clients directly or through trade partners.

And then to complement our efforts, I think, we have an opportunity with our -- with the headquarters partner team to really study our assortment and add items inside the living space room and outside living spaces to build the size of our average ticket to sell more things to a similar number of customers or a growing amount of customers. And so that's really the strategic path that we're focused on.

David Kanen: Okay. Thank you. I’ll return back to queue, so other people can post questions. Thank you.

Antonio Achille: Well, one thing I realized there is on your question can be done in a form of a special conference, not necessarily a quarter results conference. We can organize a meeting with our retail division to work you through a bit what we are doing. And I mentioned here, for instance, our new IT systems, which provide really accurate data, which to my experience, may be ground, albeit for 23 years consultant in retail and they work a lot of corridors. And I might say, I'm biased that is one of the best system still ever. So maybe for those who are interested, we can organize a special informative section where we share some of these initiatives we do on trade. Some of these initiatives we do to support our team with better system tools to walk you through more in detail what we mean here that seems to be a bit generic statement.

So we were going to capture your interest for a follow-up session in the next weeks, doesn't need to be tomorrow, but we can definitely can do a deep dive on retail, if you insure interest that.

David Kanen: Sure. Thank you for that.

Pasquale Natuzzi: If I may, Antonia and Jason.

Antonio Achille: Please. Please [indiscernible]

Pasquale Natuzzi: First of all, thank you very much for the way you are explaining performance the company and concern, obviously. And thanks to David for his optimism, which is very important to us. Certainly, what we create has been -- we create a lifestyle brand, which is not something that easily in the furniture industry, a few people really created. As far as I know, there is a certain registration as well, there is a set primarily registration hard work. There is Natuzzi and [indiscernible]. Those are the global (ph) but not global probable that really has been able to create a large study brand. Now obviously, in order to promote -- and to promote a lifestyle brand, retailer plays a strategic role because you need to show what the -- what's the lifestyle brand could represent?

How can really be attractive for the consumer? And I must say that we have done great progress. on lifestyle brands, certainly, but also on retail. Thanks to Jason and also in other geography. So again, today, we need to be optimist on one side, but also realistic on the other side. The consumer confidence is very low everywhere, not only -- I mean, it's everywhere. There is no geography where there is enthusiasm to buy. Because for reasons that everybody knows, I don't need to repeat things that everyone knows. So that's what I want just to emphasize. Thank you for listening.

Antonio Achille: Thank you, Pasquale, For your comments, especially for you're perceiving entrepreneurial patience and enthusiasm. Thank you so much.

Pasquale Natuzzi: You’re welcome.

Operator: [Operator Instructions]

Antonio Achille: Kevin, my one suggestion. My people might digest – understand, we download (ph) a lot, so maybe people are through the testing and thinking about question. I will ask our CFO that joined almost one year ago, to provide some more color about, I would normally call it transformation, but the ambition of impact you want to create push me to call it more restructuring. So maybe he can provide some more color on that while we are waiting for other questions to surface, if you agree, we can go at this way.

Operator: Please proceed.

Jason Camp: Hi. Thank you, Antonio. Good day, everybody. So as Antonio anticipated, I will give more color of this transformation process that we are starting -- we start already. Allow me to say that we -- as a top management, we are fully aware that given the express sales the current structure is no more sustainable and it's crucial, vital for us to deliver a structure that lead towards a more agile reaction to be resilient to the volatile markets. So what we have been doing and analyzing is all our operating expenses that includes selling expenses and administrative expenses. As a general comment on our P&L, I will not go deep in what Antonio already mentioned on our improved marginality. But on the operating expenses, I can say that we did benefit on our generalized decrease in transportation rates that counterbalance the higher cost for opening the U.S. and further strengthening.

But, given the analysis on our cost, we did realize that we need to intervene on both our industrial side and our selling and administrative costs. On the industrial side, we are -- we already started the process a few years ago, and we will keep monitoring and working closely with our operations department in order to find opportunity to improve the marginality and to have a more agile, versatile industrial footprint. We are keep working with our outsourcing in Vietnam, and we are reducing the number of works in China and in Romania to align our structure to the current level of demand. Same as for the Italian operation, the upgrading of the plants and the continuum of reduction of redundant work is part of the plan and that keeps going. What is becoming new and more influence to discuss at this stage is the work that we are doing on our SG&A structure, where we did start a deep analysis on our processes to verify the maximum level of optimization in order to decrease operational costs and head count to get significant savings and to boost and accelerate all these actions.

So to give you and go more details and explain it, so to let you understand what we are doing. I will give you some concrete examples. We are analyzing all operational side, and we are trying also to reduce the complexity of our operations. As an initial program, for example, we focus on our Natuzzi Editions cover codes (ph) offer and for cover codes, it means the variety of possibility that we give to our customers and we were able to reduce it from 150 to 253. And you can imagine what that imply these in terms of purchasing stock management of the stock and in terms out of communication and retail experience. So once we will put in practice all of these findings, we will expand this approach to the other markets and to Natuzzi Italia and Mr. Natuzzi has been involved in this.

Of course, this will not impact on our customers in terms of quality and variety of our offer. And also in terms of maximization of the current situation for the codes and the materials that will be dismissed. We have specific programs to incentivize the depletion of the stock. Talking about the stock, we are also shortening the supply chain processes and we are getting our supply portfolio closer to the relevant manufacturing plants so that we will save on delivery times. And we are also reviewing all the algorithm for the forecast of the purchase to decrease -- to align it more category to the recent trends and working also with the purchasing department to see if there is any possibility of intercompany transfer to optimize the financial and the supply demand.

Another activity that we have done recently is the centralization of the group credit management at HQ level to reduce the position abroad. And by doing this, we have reached positive results in reducing the number of group DSO, and we were able to better forecast our cash flow so to maximize it. So as you can see, there is a spectrum of activities that we already launched and the analysis they are going in this moment in order to find the best set up for the future, as I mentioned before, to achieve significant savings. This is what we have been working on the operational and size. To be also more specific and to go, as Antonio was mentioning, given our finance structure and talking about our net finance cost we report EUR2.7 million of finance costs and EUR1.6 million deriving from interest expenses and bank charges.

If we compare to the same period of last year, we had -- last year, we reported EUR1 million, and now we are at EUR1.6 million. This is given the fact that the interest rates more than doubled, it means that we did work to have a selective adoption of usage of our lines and our credit facilities and our securitization. But as we discussed in [indiscernible], this is not a target. Of course, we will keep looking in our -- any possibility to improve our working capital and to go towards a self-financed that is needed in this period and to provide more cash for the investments that, once again, we repeat is more focused on the retail side and on the growth.

Antonio Achille: Okay. Thank you, Carlo and of course, this is turning quite detail discussion. But I think we will be also – to focus our strategic course really to remind as David helped us priority number one, which is one retail expansion. I will put almost the same level at least in the short term. Priority two, which is reducing our SGA. And we will keep reporting on those two priorities in the follow-up conversation we will have during our next quarter review or intermediate press release. Kevin, maybe you want to, again, pull the audience to see if there is any emerging curiosity or question.

Operator: Certainly. [Operator Instructions] We do have a follow-up from David Kanen, who’s line is now alive, sir.

David Kanen: Quick question, given the mix now and that will continue a branded product, hypothetically at EUR100 million per quarter in revenues, is it reasonable to assume with the initiatives that we've already taken that gross margin would get up to around 40% or better. And this question is the first for Silvestri. Thank you.

Carlo Silvestri: Thank you. I think your assumption is directionally right.

David Kanen: Okay. Thank you, guys. Good luck.

Antonio Achille: Thank you. Thank you very much.

Operator: I'll turn the floor back over to you, Antonio.

Antonio Achille: Yeah. Thank you, Kevin. Once again, thank you all for being so attentive following our story. We have high confidence in what we represent, which is an incredible brand, an incredible potential given the strength of our brand. We are very sure we're going to be whether this difficult circumstance emerging stronger from a positive financial standpoint. I might suggest Piero to reach out to Kevin and now can technically can be done to serve you and to capture interest for a follow-up conversation of retail. So once we have -- who are interested, of course, we're going to be making this public, but we are sure to reach you. So we can organize another conversation on retail in the following week without waiting for the next press release.

Other than that, I wish you a great start in the week. Of course, as a servant to the company, I’ll stay at your disposal, if you wish to have a follow-up conversation in respect, of course, of our public company status. Thank you so much, and have a wonderful day.

Operator: That does conclude today's webcast. You may now disconnect. That a wonderful day. We thank you for your participation today.

Antonio Achille: Thank you, all.