Q2 2025 LVMH Moet Hennessy Louis Vuitton SE Earnings Call
Good afternoon. Uh, Welcome to our
1 uh results conference call. I'm here with rodolf we are very happy to have you with us.
And we will start now. Uh, what we'll do is I will start with the key light. Then uh hold off will give you a bit more details. Uh, in term of the divisions and activities performance. Then I'll go through uh, the key numbers and we will open for Q&A.
Maybe before we start, I invite you to go to uh page 2 and read the Safe Harbor uh statement.
So I give you a few seconds to do that.
And then I propose we start with uh slide 3.
Lbma should a good resilience in the first half of 2025 recording, 40 billion. In Revenue down, 3% on an organic basis with disparities by region, as I will explain later.
In term of profit, the profit from recurring operations is 9 billion euros. Down, 15% versus the first half of 2024, although operating margin remains. Excellent at 22.6% which is 150 basis points above the first half of 2019.
Finally, very strong financial situation, with the free cash flow, increasing to 4 billion Euro and getting at 15.2.
Turning to slide 4, a few qualitative comments on the key highlights of this uh first half.
The the start of the year has been disrupted by several layers of micro uncertainties as you uh well aware as well as currency. Swing impacting short-term performance, how by with a pocket of resilience more specifically we saw solid local demand in Europe and in the US.
And a tangible sequential Improvement when it comes to Mainland China. In the second quarter.
In addition, we saw very abrupt currency swing in Q2, which eroded the purchases of American and Chinese consumers, abroad and especially in Japan where we faced a very abnormal growth of 57% in the same period last year.
In this context we focused on the qualitative development of local clientele as well. As on the following priorities, continued and faces and product Innovation, coupled with the start of new creative chapters in certain missions.
Selective investments in retail project to continue to build, long-lasting competitive Advantage for our Amazon. And of course, we capitalize on current context to initiate long-term. Structural efficiencies Beyond short-term mitigation efforts, in order to maximize also profit for through when the headwinds are subside.
Numbers and initiative by business group and I will come back on financials in more detail after that.
Thank you. We'll start with brains and spirits.
Turning to slide 7, uh, the wines and spirits business group recorded, 2.6 billion euros in Revenue. In the first half of 2025, this represents a 7%, decrease on an organic basis versus the first half of 2024 and 8% decrease on a reported basis. After taking into account, a negative 1% currency impact
Broken down, champagne and wines generated 1.4 billion euros in Revenue. In the first half, representing a 2% increase on an organic basis. Revenue was unchanged on a reported basis after taking into account the negative 2% currency impact.
Yakun Spirits delivered, 1.2 billion euros in Revenue, in the first half a 15% decrease on an organic basis.
And a 16% decrease on the reported basis, after taking into account, a negative 1% currency impact.
Finally profit from recurring operations, reach 500524 million euros for this business group down 33% year with the operating margin for The Division, coming to 20.3%. In the first half of 25 slightly above the second half of 2024,
Stronger selling fresh, and Bane, and in the US by improving Trends advert. And as well as continued International expansion of Rosa wines. Champagne also benefited from improved 7 in Japan in the second quarter.
Moving on to Brand initiatives, more celebrated, the 75th anniversary of the Formula 1 championship as its official partner and collaborated with F Williams for the global launch of a limited edition collection to elevate. The birthday celebration experience gain market. Share on their key markets and love Kiko continued to support its strategy value. Its value strategy. Sorry, with the launch of Leon bam. 2018 vintage
launched a new brand platform and unveiled, a communication campaign, highlighting, its values and ties with artists
In Cognac, and Spirits. The uncertainty is related to tariff Wade on cognac, demand in the US and China, although Hennessy's depletions were better than selling in the US. And you see, also highlighted the versatility of its vs quality to enhance cocktail recipes with a communication campaign called Made for More.
Elsewhere, a new marketing campaign for Glenmoor Andy fitted, uh, however, and the measles distillers.
Turning to fashion and leather goods.
On slide, uh, 10.
Revenue reached 19.1 billion euros for the first half of 2025 down 7% on organic basis and down. 8% on a reported basis, after taking into account negative 1% currency impact profit from recurring operations, reached 6.6 billion euros down 18% year on year, not withstanding, good control of operating expenses, which were further reduced compared to the first half of 2024.
As a result operating margin reached 34.7%, what above long-term average of about 30% in the first half.
moving on to slide 11 which details performance by brand Louis Vuitton continued to display, its pioneering mindset and exceptional craftsmanship through a wide array of initiatives, including a new collaboration with tekashi Academy as well as spectacular fashion shows from Nicholas care and file Williams presented at the historic coordinator dup and the SOP
There is also unveiled, a unique new space in Shanghai drawing, amazing interest. Well, beyond the city itself and highlighting Louis Vuitton's ability to express its DNA. The art of travel through a wide diversity of differentiating uh experiences.
also continued to innovate, uh, in its core level lines uh, and announce the launch of labo with its new cosmetic segment, with first products available, this sum
Lastly, Louis Vuitton Cap building on its involvement in major sports including as official partner of the royal Madrid.
We want to question their, uh, the brand began a new chapter in its history, with the arrival of Jonathan Anderson as head of creation, for men's, and women's culture, and accessories with the debit men's show achieving more than 1 billion views on social media. This follows the presentation of the final collections, designed by both Maya, zeqiri and Kim Jones for women's and men's respectively.
J also. So good success of New Bag Innovation including the the journey and your to which was complemented with new shapes and the unveiling of its new Hydro recollection, your X key designed by Victor the castellan.
moving on to share some highlights of our other brands low piano continue to perform well capitalizing on its icons and exceptional Fabrics, including a new 1 bending wool and silk
Speaker Change: Seline enjoyed a successful debut show by its creative designer, Michael Ryder, just a few weeks ago, as the G's new creative director s Burton whilst Lov announced jack up, Morrow, and Lazaro Hernandez as the M's, new creative directors with their first runway show, uh, upcoming in October.
Speaker Change: Can you remove our continued to elevate? Its retail Network in your rating? A new flagship store, a newborn Street in London, and be announced its partnership with french actor.
Speaker Change: Moving on to perfumes and cosmetics on site. 13 Revenue remains stable on organic basis at 4.1 billion euros and decreased 1% on a reported basis after taking into account, a negative 1% currency impact
Profit from recurring operations came to 425 million euros, down 4% year on year leading to an operating margin of 10.4.
Speaker Change: now to slide 14 and to look at some specific brand highlights, pure remain, resilient and maintained its leadership in uh its strategic markets with good growth notably in China America and the Middle East
The New Order performance version of the iconic zador and the launch of their home reinterpreted by Francisco contributed to this resilience, along with the collection, pre High, perfume line, and reach with a new board that is more scent in makeup. Uh the mazor enjoy the global success of its forever Foundation as well as rising demand for the latest editions to the juror addict and backstage Rangers.
Speaker Change: Also pursued its sustainability initiatives and committed to rewilding large natural habitats in partnership with the worldwide fund for nature.
Speaker Change: A few comments on our other brands Gala benefited from strong growth in Europe, the US and the Middle East as well as flowing. Good performance in key franchises. Such as Rouge in makeup and aqua allegoria in fragrances.
Speaker Change: Also doing well in fragrances were given with its 3 key. Franchises lately gentleman society and irresistible as well as Mrs. And aqua which opened the door of its newest Flagship River in Paris
Speaker Change: Also delivered, significant art performance.
Speaker Change: Finally, in makeup benefits successfully launched. But girl bounce mascara, 1 of his historical best sellers and Consolidated its leadership in brow care.
Speaker Change: Next turning to watches and jewelry on slide 16 where revenue for the first half of 2025, reach, 5.1 billion euros and changed on an organic basis. And down 1% after taking into account, a negative 1% currency impact profit from recurring operations, came to 762 million euros in the first half of 2025,
Speaker Change: Down 13% your year. Ebit margin reached 15%, improving sequentially compared to the second half of last year.
On slide 17, we showcase some of the initiatives of our watch and jewelry missile starting with Tiffany whose iconic lines, Tiffany lock Hardware. Not continued to achieve strong growth and to rise in the mix. The Meson also continued to move forward with its store renovation plan with nearly 1/3 of the network. Now featuring the new store concept and outperforming
Speaker Change: uh and enjoyed the recent opening of its latest flagship store in Europe on the Montana Pol in Milan.
Speaker Change: Tiffany also invaded, the latest High jewelry collection sea of Wonders inspired by Jean, Schlumberger aquatic designs.
Speaker Change: B******, kicked off, celebrations of the year of the snake in China, with a unique art exhibition, in both Shanghai, and seu inspired by 1 of, its most iconic and successful designs. We also continue to capitalize, on its very strong legitimacy at higher price points with its polychroma collection in High jewelry and a new record. For the world's thinnest tobian, watch with the Octo finishing model marking, its 10th world record in fine. Watchmaking!
Speaker Change: And its newly expanded manufacturer in valenza.
Speaker Change: And Fred continue to innovate on their iconic. Lines B is for shame and B for shame, and for 10 for Fred,
Speaker Change: Said it's Formula 1 line of watches and launched a new design to win marketing campaign, taking inspiration from 1 of its most uh legendary ambassadors, Ayrton Senna.
Speaker Change: And finally Lau celebrated the 20th anniversary of its Big Bang collection and then it's it's 160th anniversary.
Speaker Change: Now, I'm moving on to our last business, group selective, uh, retailing,
On slide 19. You can see Revenue reached 8.6 billion of 2% organic and flat reported after taking into account negative 2% currency impact.
Speaker Change: Profit from recurring operations, rows to 876 million euros in the first half of 2025, an increase of 12% year on year.
Speaker Change: With the operating margin Rising 110, bits to 10.2.
Final slide of our business group turning to slide, 20 Sephora, had a good start to the year with solid growth in America Europe and the Middle East supported by the excellent performance of its store, Network or Sephora continue to gain market, share in ski geographies as well as in more recent ones like the United Kingdom.
All product categories, contributed to growth with notable momentum in fragrances. And Sephora, of course, continue to cultivate its selection of exclusive Brands as well as its commitments to diversity and inclusion.
DFS showed improving profitability in the first half of 2025, it's undertook. A series of measure to reduce cost and streamline its operations, including the decision to close the Galleria in Venice. And finally, once again, postal Revenue growth driven by its differentiated range of products and Rich, array, of cultural, uh, events. The group also, strikes, and the organization of his department stores by implementing a shared governance structure for asmi 10, and lo
Speaker Change: This concludes the business group presentation and I'm in now pass back to Cecil for financial results.
Thank you rodolf moving on, uh slide, 22, first, half Revenue. Reach uh, 40 billion euros down. 3% on an organic basis and are on 4%, on a reported basis, including a negative 1%, uh, currency impact. If we move to slide 23 on the geographical balance, you can see that our regional mix remains well balanced with Europe. 25 us 255. Asia is down 2 points to 228.
Speaker Change: Japan is down 1.28% and other Market increasing 2 points to 14% which I will explain further on the next slide. So that you understand the geographical move of the performance sequentially.
Speaker Change: Moving to slide uh 24 here you have a good illustration of the regional disparities that I highlighted in my introduction and it deserve a bit of observations Europe and us are flat. Whereas Trend in Asia are much more negative which is not particularly surprising in the context of a downturn in China. But it works highlighting.
Speaker Change: The impact of currencies, I was mentioning in the introduction. On tourism is very visible and require a few explanation.
Speaker Change: In the west, the impact of Tourism is measured but visible Euro strength. Penalized touristic purchases in Europe in Q2, whereas the US region improved modestly.
Speaker Change: In Asia, the impact of Tourism is much more significant as Japan benefited from exceptional demand last year. Driven by the Yen weakness and we saw the reversal of this in Q2.
Outside Japan. Asia improved in Q2 driven by a local consumption.
Speaker Change: Turning to slide 25 which summarizes organic Revenue growth by business group.
Speaker Change: A few comments here, wine, and spirit and fish and Laser goods are both down 7% in the case of wine and spirits, it is mostly driven by demand in cognac, in the case of fashion and neither Goods by Asia and weaker touristic business.
Speaker Change: Perfume and cosmetics are flat.
Speaker Change: Here too. There are significant contrast between local markets which are positive and travel retail will remains negative.
Offsets by what she is, the contrast with fashion and is a good come from Asia and Japan where jewelry Brands face, much easier comps, Europe and us are not very different.
Speaker Change: Finally selective distribution delivered 2%, organic growth driven by Sephora and with the fs improving sequent. Sequentially versus the second half of 24 but remain of course impacted by tourism.
Speaker Change: Slide 26.
Speaker Change: Organic growth in Q2 was close to the first quarter at group level. But with 2, big moving, uh, Parts. The first 1 we discussed is fashion and Laser Goods with faced more difficult comes and group average in Japan in Q2 last year. And this Market explains, most of the sequential Slowdown,
Speaker Change: 2 divisions, improve sequentially, Wine and Spirits, mostly driven by better, Syrian and champagne in Q2 and selective distribution driven, by better Trends. And at both Sephora and DFS
Speaker Change: Let's now move to operating income by division, on flight 27, Wine and Spirits was the most significant drop driven by negative volume and mixing impact along with continued inflation in cost of goods sold.
Speaker Change: Fashion and Laser and watches, and jewelry are close to group average. But with different situations,
Speaker Change: In fashion, and Laser Topline Evolution led to gross margin de deliverate while women were managed to contain Opex.
Speaker Change: And in watches and jewelry profits are resilient in jewelry. Despite continued investment in the renovation of distribution Network at Tiffany watches. So a more pronounced decline in percentage terms
Speaker Change: Fume and cosmetics, reflect contrasted Trends modest decline overall driven by the brands which are more exposed to Asia, and travel, retail was less exposed to this Ed Wings. Given its particularly selective distribution strategy. Finally, selective distribution delivered, a very good performance, driven by Sephora.
Speaker Change: Which is growing, both in revenue and profits and very tangible efforts to reduce the losses at DFS.
A few comments, uh, slide 28 on the uh income statement.
Speaker Change: Firstly, gross margin, uh, delivered as a, as a consequence of a sales decline including underutilization of capacity and some inflation in cost of goods sold.
Speaker Change: Operating expenses also contributing to the decline in profits, but were contained with a 2%, decline in marketing and sales expenses and a 5% decline in GNA, which reflects the discipline in, uh, cost in the current context.
Speaker Change: I will commend the financial results on a specific slide. Uh maybe stop on the tax rate, which increased by 4 Points to 30.9%. 100% of this increase is connected to the booking of the first part of the Short tax in France. So with books, 317 million, the overall amount is a bit more than 700 and everything will be paid at the end of the year.
Speaker Change: Finally minorities decline in line with profits at image. Partly offset by the reduction of losses at DFS.
Speaker Change: Slide 29 a few comments on operating income constituents.
Speaker Change: As you can see, perimeter impact was very negligible currencies. Are the negative 225 million impact reflecting, limited transactional, and translation impact from currencies, but also the anniversary of relatively significant aging gain in H1 last year.
Speaker Change: In the second half of the year, we will have higher transactional and translational impact. If we extrapolate, of course, the Reds that we have today and we should benefit from stronger, edging gain
Moving on a slight 30 on the financial result, the cost of date is broadly unchanged. The main evolution is linked to the revaluation method in Mark to Market of our investment uh Financial portfolio.
Speaker Change: Negative contribution to the financial results. It's not a profit or loss, it's purely theoretical and it's the way we've chosen to account.
Speaker Change: For this uh, Financial investment.
Speaker Change: A few words on the structure of the balance sheet uh currencies had a significant impact on most balance sheet lines in your terms and the supply boost to assets and liabilities. So the structure of the balance, uh, sheet is as a result quite similar to end of last year. Inventories, remain under control and stable versus end of December at 16% of assets.
Slide 32 illustrates the very strong financial position of lvmh. Uh, with as I said, in the beginning, a 4 billion cash generation in H1 up 29%,
Speaker Change: this evolution is explained by a strong improvement from working capital offsetting fully the decline from profits. Taxes contributed a bit more than 500 million. This is not including uh the the French your tax that we will pay at the end of the year. And finally Investments also decrease modestly in your terms in the tune of 370 million euro
Speaker Change: Overall this uh, leads us uh to uh nh1 where uh, our net debt decline by almost 2 billion and gearing and now stands at 15%. And uh, we are proposing an inter dividend as a consequence, that will be uh, stable
Speaker Change: Maybe a few words to conclude the presentation and then uh, we will move to Q&A.
if we look at H1, uh, we can see that the performance
Speaker Change: was distorted.
Speaker Change: We can't impact on touristic demand.
Speaker Change: Whilst the situation as weigh on our growth margin, we were able to uh contain the leverage on Opex and we will continue not with the view to do less. It's very clear that we will continue to invest. But with the view to do and manage to find more structural efficiencies
Speaker Change: Currency moves a losers. Also to focus more qualitatively, on our local consumers and we believe it's a healthy situation to build a closure and qualitative relationship locally with our customer. And it has proven, uh, on on many initiatives, it has proven important and successful
Speaker Change: Product innovation has been and continue to be a key focus with tangible successes across all of our brands.
There is more to come in retail product offering a new creative chapters as commented by Rudolf.
Speaker Change: Finally we have been uh selective and demanding that we have kept investing in the most promising uh projects. And you have a good illustration of this dual mindset in uh, the delivery of the free cash flow in the first half.
Speaker Change: Investments remain elevated. But we were able to generate incremental cash who lean management of inventories in particular.
Speaker Change: Against this backdrop and Beyond the current macro description. We are very confident for the future in the ability of our miso to continue to build the durability and build on their competitive advantages. When uh the macro headwinds uh, subside.
Thank you very much for your attention, and I propose that, uh, we move now to Q&A.
Speaker Change: Thank you, ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star 1 on your telephone keypad, if you wish to cancel your request. Please press star 2 and, and please make sure the mute function on your phone and switch it out to allow your signal to reach our equipment.
Speaker Change: You know, where is the most opportunity? What are you looking at within that and and divisional color would be very helpful. Thank you.
Thank you, Louise.
Speaker Change: and, uh, yes, uh, we have seen tangible Improvement locally, uh, we've seen that, um, in Q2 mainly
Speaker Change: Uh and and this has been uh, driven uh also by uh, some initiatives and uh some repatriation of uh the big drop that we've been seeing in touristic demand from from Japan. So overall, it has improved a few points in term of growth. It's still negative but it's uh High single digit negative and and and much improved. So that's on the part of the Chinese.
Speaker Change: What we see in China is that whenever we do and we come to create, uh, initiatives as we return as done. For example, you take the boot in Shanghai.
Speaker Change: Very unexpected. It's uh, it's a space that is absolutely unusual that mixes uh, both. Um, Exposition around the story and the culture of the brand retail space lifestyle, something that only return can do and this is creating a lot of traffic. There are many visitors.
Speaker Change: Uh, do do. Retail space is starting, uh, with a very strong start and overall it creates also a Halo and the branch. So you might like it, you might not like it. We are not going to build 400 boats, but overall, we see that we are able to create, uh, connection and qualitative development on, uh, the local clientele. We mentioned China because it was your question, but it's uh, much beyond beyond China.
Uh, then regarding uh, the question on efficiency.
I think the context is opening a door and as a CFO, I tend to take that door, uh, in looking at how we can, uh, become more efficient, structurally.
And this is not in order to uh, manage the cost. But it's really to be able to unleash some resources and continue to push investment behind our brand and behind their, uh, competitive Advantage. Which is absolutely key for the future and for the growth and we have been, uh, having a different conversation so it can uh, range from, uh, looking at different retail equation in terms of how we Define the cost per square meter on the capex. We uh, we do and depending on the type of store, it can be around. How do we manage the relationship with the agency? When
Speaker Change: Uh, we do a show and where it makes sense to have margin for the agency, where it makes sense to use our own supplier. So it's a lot of different things.
Speaker Change: Uh, overall uh, there are, uh, many opportunities I believe, it will take time, so it's not like shortcuts and, and I think you should be happy that it's not, uh, easy catch because easy cuts tend to go for Less investment and the idea is really to create uh and to go for efficiency opportunities.
Our next question is from Sean Louie. Scotty from k. Please go ahead.
Sean Louie: Yes. Uh, thank you very much for for taking my questions. Uh, the first 1, uh, is on your start Network. I think the, the selling expenses were still up here and year in each 1, but A&P decline in line with the organic sales growth. So a question regarding your stuff Network last year, uh, they were still 125 Stars, openings, across the passion as a good watches and Engineering divisions. What should we expect in in 2025, um, and some of your piece have started to rationalize their retail footprint. So we expect a similar approach for some of your, your brands?
Sean Louie: Um, and um, could you please also the second question, a datos on the progress of the, the restructuring plan, at MIT. And when the, the relative savings are expected to be visible in the pnl and should we consider the 20% a bit margin reported in H1 as a trough for the division or could the continued decline of konak, sales. Keep Weighing on the the profitability. Thank you.
Thank you. Um, on Star network, uh, there are different realities, uh, behind uh, the different activities. So, uh, you know, that on Tiffany, we continue to renovate, uh, the network and we are
Sean Louie: Done at 30%. So there's still
Sean Louie: And by the way, uh, every execution of store is uh the proof that uh it's a it's a right investment because stores are over performing uh when we open them the latest 1 was uh very uh early or not. It was 1 week ago, probably in Ginza. It's uh it's it's a beautiful store, I invite you to go there. If you have the chance
Sean Louie: On, uh, on stores. We have a certain number of project if you look at the opening, uh, stores in New York 57. Uh, we've opened, uh, Dubai with open, Morrow for season, uh, and all these stores are growing, strong double digit. So it's really around execution. Having them at the right place. In the meantime, it doesn't mean that we keep opening the stores and we are not managing the network. So if you look, depending on the countries, depending on the brands, there are also closure of stores that we believe are not, uh, going to create, uh, value or growth for the future. So it's a very uh, uh, close management between opening and closing. There are still big projects. There will be some in H2 for your in New York and, uh, Rodeo Drive. But we are also very mindful in order to
Sean Louie: Uh, ensure that uh when we open we close and we are monitoring the more, the 1, you don't see, let's say uh very closely in term of efficiency productivity at the store.
Sean Louie: Um so we'll continue to do that, so there will be openings, there will be uh some closing but all in all, we are continuing to develop our retail uh retail Network.
Sean Louie: INTP decreasing. Uh, yes, I know because what you see decreases marketing, uh, cost. But as a person, as a person stage of net sales, it doesn't. So there is a an absolute value decrease, but not necessarily in a percentage of net sales and in marketing, you have different things. So it's not all A&P, it's not all media. If you take, for example, a perfume and cosmetic, you will find in your marketing expenses, all the management of PSM, which is uh, all the the furniture you have for the store. Plus the samples Etc on that. We are going for efficiency because we believe it can be further optimized. So when you look at the, when you look at the number, don't go straight, uh, into shortcut into saying, okay. The cut communication that's not, that's not the the case.
In term of and and the plan uh, we've been, uh, having a, a review of the plan, uh, that has been, uh, worked by uh, JEA gone and the team. It's not restricting plan. It's a full plan to uh restore both the growth and the efficiency of uh of MNC. It's not a plan. Uh that is going to uh, deliver overnight and in the next quarter,
Sean Louie: So it's rather going to be a plan for several quarters. And I think we start to see the impact uh, not before uh, the second part of 26 because when you go for structural change and efficiency, you need to take the time to do it. Uh so we don't expect any significant impact uh this year on on that front. But we we are very confident that the team has uh has got the plan under control and is delivering
Speaker Change: Thank you to our next question. From Antoine B. From BNP pariba exam. Please go ahead.
Antoine B.: Yes. Hi. Good evening. Um, first 3 question if I may first of all um
Speaker Change: It's a bit like the previous quarter so there was a deceleration of 4 Points in fashion and leather in q1. It was almost all due to the to the, to the Chinese. So is that still the case because you you pointed to the, um, Improvement locally, but also the the tough comp and and the tourism. So yeah. Maybe the how how can we explain 4 Points of duration by cluster? Um, is it all Chinese or also, some other nationalities?
Second question, still on on fashion and leather. So, um,
Speaker Change: Performance between LV door and maybe Seline any changes and maybe 1 that has been a bit more resilient and and maybe another 1 a bit less and finally still on fashion and leather. So, the you mentioned, I think you didn't want to use the word crosscutting more efficiencies. So, um, you know, is there maybe a willingness to protect a 35% margin in that division, that something that you achieve in both H2 last year, but also in H1 this year? Thank you very much.
Speaker Change: Thank you. Uh, my English is not that good, but I knew the term I wanted to use and it was efficiency exactly, uh, for the reason that for me efficiency is sustainable cuz cutting is not sustainable. So the difference is not
a detail. But, uh, having said that on your question, uh, on the sequence.
Speaker Change: Uh, and the deceleration for Q2 on, uh, fashion and these are Goods. Let me, uh, share what we see in the different, uh, nationalities.
Speaker Change: What we see is that European are unchanged versus q1.
Speaker Change: Americans locally broadly entrenched decelerating a bit but broadly and change the tourism decelerated for Americans because you know, that we started the year with the US dollar at 1.04 and we are now at 1.7. So there was a big swing uh, that uh, created a Slowdown on on the path. But it doesn't make
Speaker Change: Uh, a big impact to the overall picture. So the bulk uh of uh, the decline comes, as you said from Asia.
And more specifically from a tourism in Japan which is the reversal of what we saw last year.
And this is really true for Chinese and to a lesser extent to other Asian clientele.
Speaker Change: And at the same time we saw some have Recreation meaning that uh, Chinese local demand improve. But this this did not uh, fully upset the the, the weaker, uh, demand in Japan. So, so that's uh, the overall qualitative, uh, comment on uh, the move in term of uh, nationalities.
Speaker Change: Then your question on, uh, brand performance and LV having been a bit better. Is it still the same?
Speaker Change: What we've seen in Q2 is really what I explained around nationalities and geography call uh mix.
Speaker Change: We don't see any uh big change in between Mason. Meaning LV is still a bit better, under is still a bit uh, less than uh average. But overall, we don't see a distortion.
Speaker Change: In the Meson performance. What we see is really the Distortion which is uh driven by uh Asia and the overall macro around Asia and currencies.
Speaker Change: On your question regarding uh, fashion and Laser Goods.
So first, uh, you've seen that uh first semester, we continue to have a a very high margin level at 3 4. 7.
Speaker Change: Uh, which is a great result given uh, the uh deceleration on sales.
I will, uh,
philosophy is is
Speaker Change: is very clear. We need to ensure that we invest.
Speaker Change: What we need to invest behind growth and we need to make sure that we are able to mitigate and maintain a high level of margin.
Now, if you look at a short-term,
Speaker Change: It's very difficult to predict because it will mostly depend of Top Line.
because if you look at your gross margin uh the mitigation of your gross margin de delivering
Speaker Change: Is is pretty link to uh the pace of uh, of your growth. So
Speaker Change: Can say, uh, on uh, margin for, uh, fashion and little Goods. But we are very committed to maintain the level of machine. Uh, hi.
Speaker Change: Thank you to our next question from Thomas. Shave from City, please go ahead. Uh, good evening, uh, Cecilia odol. Um, my first question on on the US. Um, could you comment, uh, on on the drivers behind the, the US growth Improvement beyond the repatriation of to responding? I mean, what were the main division, or the key initiative? That contributed was there also a slight benefit in your us code figures from the US, tariffs uncertainty, given you have quite a few wholesale businesses there with Champagne, Cognac, perfumes or or watches was there some Advanced shipments. Um, that's my my first question. Um, the the second question on on jaw, um, there's been a lot of management changes, uh, at the house over the last year, uh, with the in particular. So now working with Delano on top of, obviously Jonathan Anderson for the, for the creative leadership.
Speaker Change: Uh, where do you see the, the key opportunities? Um, now that you have a full Full House to, uh, to adjust, uh, you know, product strategy, distribution communication. And, and do you have any further feedback from the, from the first, uh, show that was held in Paris a few weeks ago, beyond what we we read in the, in the, in the specialist fashion press. Um, I just finally on, on, on FX. Uh, when you mentioned the, um, the the the second half Outlook so greater hedging gains expected. Um, uh, but uh, at the same time, uh, uh, probably worsening translation transaction impact. Where does that leave you in terms of the potential, uh, margin dilution uh, um, in the second half from FX, uh, it wasn't uh, very mature in in the first half. Thank you.
Speaker Change: Thank you.
Speaker Change: Comment um several drivers first 1 on wine and spirit where we had some improvement um in Champaign.
Speaker Change: Uh, globally. But also, uh, in the US the second 1 is that, uh, secondly, uh, we had a better performance in in an acceleration of growth at Sephora,
Speaker Change: So that played a role there. And, uh, the last 1, uh, tools are extent is, um, the second control Improvement of the performance at the effect even if, uh, there are still impacted by uh tourism. So all these effects uh, lead you to the Improvement because as I said on the rest, uh, the American, uh, demand overall is broadly unchanged a bit less and then uh, there was tourism but which doesn't impact us
On your question, regarding Advanced shipment in Tarif.
Uh, we don't have that.
Speaker Change: Uh, we have not pushed, uh, shipment to distributors or hotels. Uh, we have uh, we might have uh, some stocks.
Speaker Change: On our balance sheet, uh, in the US. Uh, but we have not put some, uh, Advanced uh, shipment.
Speaker Change: On on your I think uh, it's a mix of um, a lot of things first, your question on Jonathan Anderson. Uh, yes, the feedback. Uh, we are very positive. Also, you've seen that it reached uh, 1.1 billion views after the men's show and uh, more than 200 million uh, lives.
Speaker Change: Just already, uh, for a few quarters. So it's uh, it's a sustainable uh, success and and and hamper. So we are very confident boost in term of product communication, you've seen that Jonathan uh, will be in charge of men women
Speaker Change: In term of ready to wear and, uh, uh, and and, and, and, and, and, uh, bags, sorry and a leather goods, and I think it's also a good way to ensure a full consistency on the brand Vision, uh, on the brand communication. So, um, so we are eager to see, uh, to see all that as you are. And as the, the, the clients are
Speaker Change: Then on uh FX. Um, I think given the evolution, uh, during the first semester, it's indeed very difficult to predict an improvement.
In term of Ethics impact, uh, in margin because as you said, uh, boost translation and transaction, uh, will probably uh, be higher.
Speaker Change: We have, uh, opportunities in edging gain, but probably it won't. Uh, it won't lead to an improvement between H1 and H2. So um the best we can expect is the same and probably a bit more impact.
Speaker Change: Thank you.
Now, to our next question from Luka, sulka from B team, please go ahead.
Luka: Yeah, good evening. Uh, my first question is on pricing. I, I wonder if you feel that your major fashion Goods brands, with Dawn and your
Have the right price architecture. I'm asking this because we seen
Um smaller and more expensive Brands, take which in areas, and example, a growing significantly faster, but also cheaper Brands like Ralph Lauren or or coach growing faster. So I was wondering whether your experiencing possibly a need.
Luka: To fine tune, uh, your price, uh, architecture. And in this,
Luka: In this like, uh, my question would be on a dissecting, the minus 9% uh that you produce in functional leather goods in the second quarter. If you could tell us
Luka: A bit more about, uh, the drivers there, uh, in terms of, uh, price, mix and volume. Uh, that would be, uh, ideal, uh, thirdly on, uh, the senior management organization. Uh, we saw that recently Michael Burke has been, uh, coming back to a role in the US.
I, I wonder if you could have data on
Speaker Change: How do you see the management organization is developing and um, and on Michael's new responsibilities, please, thank you.
Speaker Change: Thank you. Um, is the price architecture? Uh, right, uh, was your first question, uh, Luca.
Speaker Change: Um the what we are seeing uh in term of shorter performance. Uh let's all be clear. Uh it's really around macro and currency swing.
When it comes to price architecture, we had a lot of debate postco where we had a very specific demand and there was a debate around industry uh, pricing.
Speaker Change: For us pricing is very clear. It needs to come.
With an improvement in the product, whether it's a quality, whether it's an adding functionality, we had a meeting the other day with G, and they're doing some Innovation, and the puzzle, and they were adding a functionalities material. And in that case, it makes sense. And by the way, the clients are responding uh, very well. So this is the core of what we do in price.
We might do moderate pricing when it comes to offsetting some inflation or uh, in certain case, uh, type. But it's not the, it's not, uh, the, the core of it. You mentioned. Uh, cini, we have the fastest growing quiet? Luxury brand.
Speaker Change: In the group.
Speaker Change: So we know what you're referring to.
Speaker Change: And then on uh more specifically price architecture, if you look at the way V2, execute uh the portfolio of product.
Speaker Change: You have.
Speaker Change: Has a very dispersed portfolio.
Speaker Change: More than 60% is lesser good. So you can also say it's the most focused brand.
Speaker Change: But having said that um the the brand is very much focused to elevate on. There are many important clients and upper level bringing every time more sophisticated product
Speaker Change: very high quality, very desirable, but
Speaker Change: You also need to connect with the younger generation. You also need to have, uh, some of where you can meet them on board them and then uh, they can go through your value radar. And
Speaker Change: We refuse to do that with cheap bags.
Speaker Change: So, the way we do it is, I love it.
Speaker Change: And uh V's way is always uh the best stability, always the best quality.
Speaker Change: And you use. So you use uh, accessible product category, in order to do it perfume small, leather goods, uh, and and and there are a, a few other. So that's really how we work on on, on portfolio. We don't work on price. Uh, segmentation, we are not Coca-Cola.
Speaker Change: But we are working on bringing the best product.
And with that making sure that the value that is in the product um is recognized by our clients. So that's really what we do.
Speaker Change: And this is what we will continue. Because when you look at it, uh, we return has continued to gain market share and this is if you remove the, the current context something where we return has been needing for a while in the industry.
Speaker Change: The 90%, uh, driver. So uh maybe let me put it uh in numbers.
Speaker Change: Um, if you take greater China, it's around 35% and mainlanders at are down meetings.
Speaker Change: And greater China is uh, a bit more.
The rest of Asia.
Is 15% of your of your sales down mid to high change, depending on countries. So if you sum that up you should get uh, very close to 9 and then Japanese uh played a bit of role. So that's from the, that's on the mix.
and then on, uh, Michael Burke, uh,
Speaker Change: Sorry, you asked about the drivers and price mix and volume.
Speaker Change: Price. Very moderate. When it comes to the evolution of sales for fashion and Laser Goods in Q2.
Speaker Change: Uh, mix.
Speaker Change: Uh, flat.
Speaker Change: So the bulk of it is volume, which is not surprising because if we say, it's a reversal of uh very specific Purchase made last year uh by tourist.
Speaker Change: Uh it's it's quite uh consistent that it came from uh volume.
Speaker Change: And then on, uh, on Michael in the US, I think, uh, we have, uh, we are very lucky in this group, uh, to have, uh, people with a lot of experience who have been there, uh, for many years having done, uh, different, uh, Mis, uh, and they can, uh, go and, uh, make sure that, um, they transmit, uh, experience and help the team. So, in the case of Michael, I think everyone is very pleased to see him join the, uh, the US and the teams over there.
Speaker Change: Thank you. Now, I will move to our next question from Susanna puss from UBS. Please go ahead.
Susanna Puss: Thank you so much for taking my questions just um to. So maybe on margin. Um, now I appreciate it. Uh, obviously a bit tricky to comment ahead of the time but um, in the context of the recent currency moves I was just wondering. And I'm also looking at consensus, which expects margin for fashion larger, Goods up, 70 basis points. Next year,
Can you tell us if it's it's it's actually you know doable to to have the margin. I don't know flat next year or or if you can at least help us quantify the potential margin hadwin at the current rate.
Susanna Puss: Um, and then second question, I guess, just on, um,
Susanna Puss: current trends. Again, I know it's probably an annoying 1, but you've just delivered 9%, say, decline in fashion, leather goods. I think consensus is looking for.
Susanna Puss: And H2 for the division. Uh so I'm just wondering you know how you should think about it. What are you seeing in terms of current trends?
Susanna Puss: um, it's a little bit difficult for us because as you say there is that unwind of tourism in Japan and Q2, last year,
Susanna Puss: And I think it wasn't there anywhere any more in Q3. So if there's any way you could help us a little bit how to think about Q4 Q3. That would be very helpful. Thank you.
Speaker Change: Thank you, Susan now. Uh, and I start with that, uh, probably
Speaker Change: Uh, also, uh, we are not going to give uh, a precise number because given the macro it will probably be be wrong. Uh, so let's, uh, get the macro out and it's still, uh, we still have a lot of uncertainties and he'll, uh, everything is settled. It's not, uh, so on macro I wouldn't make any guess.
Speaker Change: in uh, what we know and what we what is under our control
Speaker Change: In term of comparison basis. Uh, for the Chinese, it start improving in July, uh, so uh, Q3 will probably recycle easier basis of comparison. Japan was indeed less growing in Q3 but still growing 20% uh last year.
Speaker Change: And then uh, you have also to keep in mind that in Q4 we had a strong Rebound in the US because of uh a surge in demand post election.
And so we will also face uh, that comparison uh basis.
Speaker Change: So having said that, uh, we still have uh, a certain number of initiatives uh, in all our activities and M and fashion and other Goods.
And, uh, we are confident that the initiative will bear fruit. Uh, but uh, the, the the question is more on the macro and the speed that which it will recover uh acknowledging that Chinese macro has not recovered yet and will still take a bit time. So yes. We see Improvement and we are very happy. Yes, pages of comparison will ease.
Speaker Change: But China Chinese macro is probably not uh out of the wood yet.
Speaker Change: Uh, having said that we are very confident because as you know, we don't work for the next quarter. So, we are very confident that once this Ed Ed Ed, Ed doing, sorry, subside, we can regroup, uh, with growth and we are preparing that
Speaker Change: Thank you to our next question from Edward. Odin from Morgan Stanley, please go ahead.
Edward Odin: Yeah, good evening. This is so uh, just 2 questions for me on the selective retailing which I guess Topline was a bit better than expected. And it was the, the biggest bit in Euro terms for the the group in terms of division, as you mentioned. If you could, please elaborate on on, you know what you mentioned earlier. Um, Sephora and DFS, uh, I think you you talked about Sephora doing better than expected or accelerating into what you're seeing in terms of market, share and how you explained that and, um, in terms of DFS, if I understood correctly, uh, the losses, kind of narrowed, but you're still not at the break even so, uh, that would be helpful. So that's question. Number 1 on selective retailing.
And then the um, the second question is on scope. Um, and uh, you know I I think, you know, in the late 80s you had about 25 Brands, I think you have over over 80 Brands today. Um, uh, I'm sure you're not going to give us in terms of an indication on the brand by brand basis of what you intend to do. But philosophically uh, we are more likely to see an expansion of your kind of portfolio of brands or are we more likely to see a reduction over the next 1? 2, 3 years. Um, just wondering, you know, where you see the the group, how you see the group evolving in the next 2 or 3 years on that respect? Thank you.
Speaker Change: Thank you, uh, enough. So on selective retelling, uh, I'll start with GFS because probably 4
Speaker Change: The losses are narrowing, as you mentioned we are still not, uh, Break Even but the work that has been done by the teams is uh, very important in term of putting the cost under control and and closing a few uh destination and and Gallia.
Speaker Change: So we are going towards uh, Break Even uh but we are we are not there yet.
Speaker Change: And uh, do you feel transition, uh, great experience in term of shopping together with the development, uh, of the network in the UK and in some other countries is working very well. So, we're very happy with the performance gaining market share in Brick and mortars nearly, uh, everywhere, uh, resisting well on the internet. But, you know, that, the model of C4 is, uh, absolutely to provide, uh, the right experience and exclusivity, uh, of Brands. So, it continues to deliver. And on top of that, uh, they've been, uh, managing cost, uh, very well. So, uh, you also see, uh, an improvement both in the top line, but also in term of profitability and that's, uh, great, uh, job done by the, by the teams there.
On scope.
Speaker Change: On scope. It's uh,
do we intend to, uh, increase the number of Brands? Uh, I think it depends on opportunities. Uh, we will probably not miss good opportunities if there are and at the same time we will, uh, not keep
Speaker Change: Brands if we believe, uh, they are not, uh, a good. Um,
I don't know, we are not the right operator to, uh, to operate them.
Speaker Change: Uh, you know, we did sell off white and last year, I think portfolio is a living organism and I think it really depends on uh on opportunities. So difficult to give a theoretical number in terms of
Speaker Change: Of, of number of Brands. This is not the way we, uh, we look at it.
Speaker Change: Thank you. We have a lot more to our next question from Urban, RG from HSBC. Please go ahead.
Speaker Change: Um, most of my questions have been answered uh well done on defending margins, despite the contact. Uh, maybe 2, follow ups, um, on local versus Frozen flows. I I understand Japan's basis of comparison disease and can you maybe remind us of what happened around the Olympics in Q3 last year?
Speaker Change: Um, I had the sense that through the, um, was quite active in Europe, but, um, at that stage but not really, uh, luxury purchasers. How does that help, um, move from Q2 to Q3 with a bit better? Uh, Europe, potentially?
Speaker Change: Um so that's my first question. Second question uh on tariffs, I think you said you were quoted saying 15% would be a good outcome. Um I'm not asking you to guess what the outcome will be, but what have you been working on? Mostly is it intercomp pricing, is it end consumer pricing, is it? Um,
Speaker Change: Possibly developing the supply chain further for retail. In the US. What what are you spending? Most of your time tariff related on uh, before we get the outcome. Thank you.
Thank you everyone. Uh, on uh, the basis of comparison and your and your question around Europe, specifically for qi,
Speaker Change: We don't see much movement in terms of business of comparison there. Uh, the the the the the real change in Q3 will be around uh, China.
Speaker Change: And the real, uh, impact in Q4 will be, uh, on uh, The Surge of the growth of Americans, uh, last year, but EU, we don't expect a very big impact, uh, on, uh, comparison basis.
Speaker Change: On the, on the times. Um,
But I think we working on a lot of things. Uh,
With or without the tariffs and when it comes to efficiency in the model, uh, trying to, uh, rebuild some oxygen agility in the model.
Speaker Change: It's, it can be sought for the Tariff, but it can also be sold for other situation.
Speaker Change: To answer more concretely, your question. Uh, and and I think we had this discussion in q1, there are several levels, not all our activities have access to all levels.
So we could do some moderate uh price increase in some activities fashion and Laser Goods. Uh, we wouldn't do that in a me because we don't want to increase prices there.
Speaker Change: Speaker on tariffs. So we don't we mention, we have some local production in the US.
Speaker Change: And we can increase that. Uh, if you take Tiffany, you have production in Europe and production in, in the US there are ways to optimize the flow, so that us serve us or Europe, serve Europe. So, there are different levels. It's different, uh, between, uh, between brand and me.
Speaker Change: Probably, uh, the 1 that will be, uh, the most difficult is met because it has the, the, the less, uh, levels because you can't move the production by definition and, uh, your prices. You can't play too much with, uh, your prices. Uh, so probably, uh, that's where there might be an impact on margin.
Speaker Change: so, we still have
3 questions. I suggest we take these 3 and
Speaker Change: Wrap up the call.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question from Oliver Chen from TD securities.
Oliver Chen: Hi, thank you. Uh, regarding your, your operating margin containment, it's been really solid. What should we know about the fixed versus the variable key drivers and gross margin and Opex and also marketing dollars or rate as a percentage of sales particularly within the passion and leather division.
Vision. Um, second point, you you made a lot of really helpful comments on Innovation. Plans ahead is how would you compare or contrast? Uh, Dior relative to Louis Vuitton and and what you're doing to to continue to Electrify the brands and innovate at all price points and then finally, um, the US US Sephora, uh, business. You know, it's been a, a more competitive market in the US particularly with Amazon and beauty and and other players like Ulta, just, what were you seeing um, with Sephora us as well? That sounds like you're you're very encouraged and I know you had mentioned some of those competitive pressures previously. Thank you.
Oliver Chen: On operating margin. Uh, each uh, overall, uh, on selling expenses because we, uh, we gave a comment last year when we were talking about Japan around the fix and variable in term of rents, uh, except for Japan. Uh, it's more fixed uh, than variable a bit less. So, in China, but it's, uh, around half half. So that would be for the, for the selling cost. Japan was really an exception, uh, as to, uh, the, the depth of viable, uh, rent that it uh, that it bears.
Then marketing. It depends how you how you see it. Uh if you have a specific initiative and you need to push your communication and it will
Oliver Chen: It will increase, uh, but it's also partly variable. If you have less, then you probably uh, uh, depending on your Market, you can there's part, you can adjust,
But I think ultimately.
The, we, the way to look at that. And the context is opening in the for that is, how can we create more efficiencies? And there are opportunities to create efficiencies, and it's a bit everywhere. It's, uh, if you take, uh, so so marketing, I mentioned PSM. So when you, when you decrease marketing, it's not necessarily that. Ah, suddenly you start to communicate uh, when you look at um, at the fashion shows and you work with agencies
To look how you structure and decouple, the different pieces of the cost. So as to pay margin, only on the creative part and make sure that you as the most efficient possible on cost that are not related to client experience, or
Oliver Chen: Creativity is something you can work on. So, there are many ways you can work on, uh, and, and I think fixed and variable is, is a, is a bit theoretical, uh, because the idea is really how you get the most efficiency out of your cost in order to get the most of investment, uh, behind uh, behind your brand.
Speaker Change: On Innovation. Uh, I wouldn't compare your and uh, Envy to honestly
Speaker Change: uh, we have uh, we are, uh, in different Cycles, but we are very lucky, uh, in lvmh to have uh,
Ative directors, uh, it's different Journeys. Uh, but overall I think we are opening uh at your a new chapter as we discuss in term of creation.
Speaker Change: The Innovation that I mentioned our working well and both brands are great honestly. And uh, they don't have the same, uh, the same role and the same, uh, uh, the same life and it's good like that.
Speaker Change: and then, uh, when it comes to Sephora in the US, um,
Sephora is everything Amazon is not actually because Sephora is about experience differentiation, exclusive brand, uh, enjoyment of uh, shopping experience. And and and that City, what is Sephora? And that's what we are. Pushing in terms of competitive advantage and and and that's uh, bearing results because of the growth and the market share.
Speaker Change: So, yes, there is competition, but at the end of the day, uh, where we invest and our module is continued to uh to deliver very strong results. So uh, we are we are very happy with that.
Speaker Change: And Cecil you said, um, Sephora us was positive. Did I hear that correctly?
Speaker Change: Yeah.
Speaker Change: so, our next question, from Daria, from Bank of America,
Daria: Good evening. Thank you very much for taking my questions. I have 2. Uh, first question is on fashion leather margins.
Daria: Contextualize how much pressure out of the contraction came from gross, margin versus operating expenses particularly for this division in the first half.
Daria: Uh and then my second question would be on the beauty Market. Could you please share an update on trends that you saw by region or category in perfumes and cosmetics? Thank you very much.
Thank you.
Speaker Change: On, uh, on the piano. The biggest impact came from uh, the gross margin. Delivering,
Speaker Change: Uh, connected to uh, the decline in sales, uh, under utilization of the capacity. And uh, also, uh, depreciation in the inventory and in some cases, uh,
Chill some inflation in cost of goods, sold.
The Opex Square contained in terms of percentage. Because as you, uh, as we mentioned, uh, we decrease, uh, sell and marketing, uh, Opex by uh, around uh, 2% and GNA by 5, so you have, uh, you uh, order of magnitude. And then you can make, uh, the calculation on on the delivery. So, we are containing Opex, but not to the extent that it compensate, uh, to leverage of, uh, gross margin. Which is uh, which is not a surprise.
Speaker Change: On uh, perfume and cosmetics. Um, we see um,
Overall, uh, good performance on local markets, and on uh, different countries.
Speaker Change: Then uh, what you see in perfume and cosmetics, is that perfume is the, uh, best performing categories, then it would be makeup and Skin Care, a bit less. And in term of geography, uh, the brands that are the most, uh, exposed to travel retail, especially in Asia, are the brands that uh, are the, the less, uh, growing versus the, uh, the average or sometimes, uh, having a decline in sales so that's
Speaker Change: That's the way to look at it. But overall we have perform christianer, which is the the biggest 1 given the fact that, uh, they've been, uh, choosing to be, uh, very selective in distribution, this Red Wing. Uh, they can resist, uh, better. Uh, and they've been doing, uh, quite some Innovations in makeup. That worked, uh, particularly well. So they've been performing very well in makeup in the first part of the year.
Carol Majo: Hi, Good evening, just two questions from my side. The first one back on Lora cannot and then it's really so that had a supply chain concern can you give us your take on the situation.
Speaker Change: Thank you. Our next question, from Carol. Majo from Blacklist. Please go ahead.
Carol Majo: And speaking of fixing a descent issue and have you seen or do you expect to see some impact on the brand perception in the key markets. That's the first question and then the second one maybe to conclude and think about the more longer term perspective on that again S. L. G and mostly L V. How should we think about the future.
Carol Majo: Your growth drivers of the Brent music towards the future as it becomes bigger and bigger than us China actually become I think more mature markets. So do you still view price makes them as the main driver in the future I think she'll lunching beauty in the fold how should we expect like more of these new ventures coming up in the future to diversify.
Carol Majo: And drive more growth in the business. So just to add some color on that in the long term growth prospects of Lv could be interesting. Thanks.
Speaker Change: Thank you so unknown Shana L. A.
Speaker Change: Well not satisfied with this situation, especially because we've been walking a lot since last Chow on Oh, you're working on the processes, making sure that a we had a more we did are in place or we've done like five.
Speaker Change: But it does show and what's happened in law cannot although it is a subcontract all all our subcontract out of our supply al that was hidden from us. So we we we couldn't know let's say.
Speaker Change: It's not that a weekend than do the Italian Palo a controller, but we didn't know and then when you we stopped the relationship with the supplier.
Speaker Change: This to peak and beyond global channel.
Speaker Change: Its peak that the food industry in Italy is fishing and it's something that we we love all to manage qualitatively with Densification. We live in in the month of June in the meantime for US it's very clear, we all handfasting on poor well handful thing.
Speaker Change: The the way we look at the relationship and the way we are going to control both him download how are we do deal with it.
Speaker Change: And the great avoided them, but it's not Oh can.
Speaker Change: So to your point, it's not a it's not going to create an intruder and create a an impact on it because it's it's.
Speaker Change: It's not a what happened at scale, we need to we need to make sure that collectively with every one we can sort of oh at least.
Speaker Change: Importantly, situationally and just play that can be a very fat practices and clean supply chain. So we need to continue to work on that then obviously our staff.
Speaker Change: Paula has to be done.
Speaker Change: And don't tell a lockdown for a fashion that is a good and LTV.
Speaker Change: Yeah.
Speaker Change: If we look at the fundamentals of Vitol.
Speaker Change: Okay.
Speaker Change: If we don't continue to live in many markets.
Speaker Change: Why.
Speaker Change: Because fast Vito is totally dominating do hit that space I mentioned do do hit some stores that have been open and growing strong double digit I mentioned kind of unexpected species like did we like it though we don't but it's you need to go and see that.
Speaker Change: Place.
Speaker Change: But it's unexpected and something we can do it's not that we're not going to do 400 of those but there might be a few down the road Intel.
Speaker Change: In terms of product.
Speaker Change: There is absolutely no to peak around the changing pricing or changing strategy the strategy of really don't ease.
Speaker Change: Focusing on always are delivering the most sophisticated and quantitative product to retain the most important plant and get some of those off on the segment.
Speaker Change: And he was the one is <unk>.
Speaker Change: King and continue to recruit from the younger generation and that is not around down trading all doing chip products, but did show on using the desire for well ended DNN, the desirability of Vito and simply getting it.
Speaker Change: On a more on an accessible categories. So you mentioned beauty, which is 1000 humans want Mona Lisa glitches in Milan.
Speaker Change: Then the sudden big competitive advantage of our OLED and I think he should yes.
Speaker Change: We like it because we like numbers.
Speaker Change: The financial muscle and the fire power.
Speaker Change: Best productivity Best plus he told me he best cogeneration.
Speaker Change: And.
Speaker Change: Leading to an unparallel saia pull out to invest invent and continue to read. So we are very confident on the long term. Once we go Eos, who do the short term and wings on VITAS, but also on O. L. A was L brands are but because you.
Speaker Change: You mentioned Oh, the veto a dish dishes landfill, so he's not with price mix.
Speaker Change: If you look at a little in the past a full five years volume was one said.
Speaker Change: Of the.
Speaker Change: The growth in terminals driver so.
Speaker Change: We need to really understand the fundamentals and the way. This brand has been a growing year after year and I think we need to extract a bit Honda walked out because because williams has been fully back.
Speaker Change: Of Vito story, and they will continue to be.
Speaker Change: Yeah.
Speaker Change: Well thank you.
Speaker Change: So thank you.
Speaker Change: Alright. Thank.
Speaker Change: Thank you very much I hope it was helpful and Ah Muesli, Oh, the Earth and the teams are here to.
Speaker Change: One so any photo labs, and we'll be happy to to see you all soon.
Speaker Change: And if we don't has a great somehow.
Speaker Change: What I meant.
Speaker Change: <unk>.