Q2 2026 Lulu Retail Holdings PLC Earnings Call

Speaker #1: Please enter your code. Please enter your code.

Operator: Please enter your code. Please enter your code.

Speaker #2: Hello. After the beep, please say your full name and company, followed by pound. Thank you. Please hold.

[Company Representative] (Lulu Retail Holdings): Hello. After the beep, please say your full name and company, followed by hash.

Rachel Smith: Rachel Smith, Ebury.

[Company Representative] (Lulu Retail Holdings): Thank you. Please hold. EBITDA margin also declined, reflecting lease factors as well as higher aggregator-related costs associated with the continuous growth of online sales. Finally, in our other markets, revenue increased by 8.2%, supported by external sales from our sourcing centers. Gross margin remained broadly stable while EBITDA margin declined modestly with the impact partly offset by disciplined management of staff and utility costs. Turning now to the group margin performance. The comeback during the quarter came from the softer revenue. Gross profit declined by 3.3% year-on-year to $453 million, while gross margin remained resilient at 23%. Margin performance continued to benefit from the growing contribution of private label. EBITDA stood at $182 million, translating to a margin of 9.2%. The year-on-year decline primarily reflected operating deleverage from lower revenue, alongside continued investment in new stores, technology, and operating infrastructure.

Speaker #3: Yes.

Prassad KK: EBITDA margin also declined, reflecting lease factors as well as higher aggregator-related costs associated with the continuous growth of online sales.

Speaker #4: Capital margin also declined, reflecting these factors, as well as higher aggregator-related costs associated with the continued growth of online sales. Finally, in our other markets, revenue increased by 8.2%, supported by external sales from our sourcing centers.

Prassad KK: Finally, in our other markets, revenue increased by 8.2%, supported by external sales from our sourcing centers. Gross margin remained broadly stable while EBITDA margin declined modestly with the impact partly offset by disciplined management of staff and utility costs.

Speaker #4: Gross margin remained broadly stable, while EBITDA margin declined modestly, with the impact partly offset by disciplined management of staff and utility costs. Turning now to the group margin performance.

Prassad KK: Turning now to the group margin performance. The comeback during the quarter came from the softer revenue. Gross profit declined by 3.3% year-on-year to $453 million, while gross margin remained resilient at 23%. Margin performance continued to benefit from the growing contribution of private label. EBITDA stood at $182 million, translating to a margin of 9.2%. The year-on-year decline primarily reflected operating deleverage from lower revenue, alongside continued investment in new stores, technology, and operating infrastructure.

Speaker #4: The key impact during the quarter came from the software revenue. Gross profit declined by 3.3% year-on-year to $253 million, while gross margin remained resilient at 23%.

Speaker #4: Margin performance continued to benefit from the growing contribution of private label. EBITDA stood at $182 million, translating to a margin of 9.2%. The year-on-year decline primarily reflected operating deleverage from lower revenue, alongside continued investment in new stores and technology, as well as operating infrastructure.

[Company Representative] (Lulu Retail Holdings): Importantly, despite the ongoing expansion of our store network, operating expenses excluding depreciation increased only by 1.2% year-on-year, demonstrating continued cost discipline. Our optimization initiatives also resulted in lower operating expenses across mature stores. At the bottom line, softer non-food sales weighed on profitability with a net income of $42 million for the quarter, representing a net margin of 2.1%. Overall, the margin pressure in Q2 primarily reflects near-term revenue softness rather than any structural change in the economics of the business. We remain focused on cost discipline, mix optimization, and operational efficiencies to support margin recovery as revenue momentum improves. I will now turn to cash flow and the balance sheet. Despite lower EBITDA during the quarter, cash generation remains strong, supported by disciplined capital allocation and continued control over CapEx.

Prassad KK: Importantly, despite the ongoing expansion of our store network, operating expenses excluding depreciation increased only by 1.2% year-on-year, demonstrating continued cost discipline. Our optimization initiatives also resulted in lower operating expenses across mature stores. At the bottom line, softer non-food sales weighed on profitability with a net income of $42 million for the quarter, representing a net margin of 2.1%. Overall, the margin pressure in Q2 primarily reflects near-term revenue softness rather than any structural change in the economics of the business. We remain focused on cost discipline, mix optimization, and operational efficiencies to support margin recovery as revenue momentum improves.

Speaker #4: Importantly, despite the ongoing expansion of our store network, operating expenses excluding depreciation increased only by 1.2% year-on-year, demonstrating continued cost discipline. Our optimization initiatives also resulted in lower operating expenses across multiple stores.

Speaker #4: At the bottom line, software non-food sales weighed on profitability, with net income of $42 million for the quarter, representing a net margin of 2.1%.

Speaker #4: Overall, the margin pressure in Q2 primarily reflects near-term revenue softness, rather than any structural change in the economics of the business. We remain focused on cost discipline, mix optimization, and operational efficiencies to support margin recovery as revenue momentum improves.

Speaker #4: I will now turn to cash flow and the balance sheet. Despite lower EBITDA during the quarter, cash generation remains strong, supported by disciplined capital allocation and continued control over capital expenditures.

Prassad KK: I will now turn to cash flow and the balance sheet. Despite lower EBITDA during the quarter, cash generation remains strong, supported by disciplined capital allocation and continued control over CapEx. CapEx represented 1.3% of sales compared with 1.4% in Q2 last year, reflecting our renewed focus on capital-efficient expansion model and a balanced approach to maintenance and growth investments. During the quarter, we generated $156 million of cash flow, representing cash conversion of 85.9%. This demonstrates the strong underlying cash-generating characteristics of the business, even in the period of softer profitability.

Speaker #4: Capex represented 1.3% of sales, compared with 1.4% in Q2 last year, reflecting our continued focus on capital efficiency, our expansion model, and a balanced approach to maintenance and growth investments.

[Company Representative] (Lulu Retail Holdings): CapEx represented 1.3% of sales compared with 1.4% in Q2 last year, reflecting our renewed focus on capital-efficient expansion model and a balanced approach to maintenance and growth investments. During the quarter, we generated $156 million of cash flow, representing cash conversion of 85.9%. This demonstrates the strong underlying cash-generating characteristics of the business, even in the period of softer profitability. Turning to the balance sheet, our capital structure remains stable and well managed. Financial debt reduced to $808 million, while net debt increased modestly from December levels to $2.55 billion, primarily reflecting higher lease liabilities associated with the new store openings. Leverage ratios remain broadly stable at 1.2 times excluding leases or 3.5 times including leases. The balance sheet provides flexibility to fund our growth plans and support shareholder returns. That concludes the financial review. I will now hand over to Mr. Sathy for the business update.

Speaker #4: During the quarter, we generated $156 million of cash flow, representing cash conversion of 85.9%. This demonstrates the strong underlying cash-generating tactics of the business, even in this period of software profitability.

Speaker #4: Turning to the balance sheet, our capital structure remains stable and well-managed. Financial debt produced to $808 million, while net debt increased modestly from December levels to $2.55 billion, primarily reflecting higher lease liabilities associated with the new store openings.

Prassad KK: Turning to the balance sheet, our capital structure remains stable and well managed. Financial debt reduced to $808 million, while net debt increased modestly from December levels to $2.55 billion, primarily reflecting higher lease liabilities associated with the new store openings. Leverage ratios remain broadly stable at 1.2x excluding leases or 3.5x including leases. The balance sheet provides flexibility to fund our growth plans and support shareholder returns. That concludes the financial review. I will now hand over to Mr. Saifee for the business update.

Speaker #4: Leverage ratios remain broadly stable at 1.2 times excluding leases, or 3.5 times including leases. The balance sheet provides flexibility to fund our growth plans and support shareholder returns. That concludes the financial review.

Speaker #4: I will now hand over to Mr. Saifi for the business update.

Speaker #3: Thank you, Prasad. I will now provide an update on the operating environment and the actions we have taken to protect the business. Throughout the period, the three priorities have been operational continuity, including maintaining sufficient stock levels.

[Company Representative] (Lulu Retail Holdings): Thank you, Prasad. I will now provide an update on operating environment and the action we have taken to protect the business. Throughout the period, the key priorities have been operational continuity, including sufficient stock levels. This has ensured our customer continue to benefit from our value to premium offering. Our broad and flexible sourcing network spanning multiple geography and suppliers has been an important strength. The local sourcing capabilities we had built ahead of the disruption provided us an additional buffer against the international trade concerns and helped us to maintain product availability across our stores. We have also remained disciplined on cost and cash flow. Trade, commodity, and import costs are being monitored closely with a targeted pricing and assortment action taken where appropriate. At the same time, we continue to maintain close oversight of business continuity across the store, distribution, sourcing, and support functions.

Saifee Rupawala: Thank you, Prassad. I will now provide an update on operating environment and the action we have taken to protect the business. Throughout the period, the key priorities have been operational continuity, including sufficient stock levels. This has ensured our customer continue to benefit from our value to premium offering. Our broad and flexible sourcing network spanning multiple geography and suppliers has been an important strength. The local sourcing capabilities we had built ahead of the disruption provided us an additional buffer against the international trade concerns and helped us to maintain product availability across our stores. We have also remained disciplined on cost and cash flow. Trade, commodity, and import costs are being monitored closely with a targeted pricing and assortment action taken where appropriate.

Speaker #3: These have ensured our customers continue to benefit from our value-to-premium offering. More broad and flexible sourcing networks spanning multiple geographies and suppliers have been an important strength.

Speaker #3: The local sourcing capabilities we had built ahead of the disruption provided us with an additional buffer against the international trade constraints and helped us maintain product availability across our stores.

Speaker #3: We have also remained disciplined on cost and cash flow. Freight, commodity, and import costs are being monitored closely, with targeted pricing and assortment actions taken where appropriate.

Speaker #3: At the same time, we continue to maintain close oversight of business continuity across the store, distribution, sourcing, and support functions. Overall, these measures have strengthened the resilience of our operating model and enabled us to continue serving customers reliably, despite a more challenging external environment.

Saifee Rupawala: At the same time, we continue to maintain close oversight of business continuity across the store, distribution, sourcing, and support functions. Overall, these measures have strengthened this resilience to our operating model and enabled us to continue serving customer reliably despite a more challenging external environment.

[Company Representative] (Lulu Retail Holdings): Overall, these measures have strengthened this resilience to our operating model and enabled us to continue serving customer reliably despite a more challenging external environment. Private label and e-commerce continue to gain share. The two areas that continue to strengthen our customer proposition are mainly, as I mentioned, private label and e-commerce. Private label penetration increased to 30.7% of the retail sales during the quarter as customers sought strong value without compromising on quality. Our portfolio span multiple products and price points and continue to expand. Recent product launch include wellness, community-focused products, and sustainability-led ranges. At the same time, our e-commerce proposition continues to scale with 53% year-on-year growth, now contributing 8.9% of our total retail revenue. We now offer a more integrated customer experience across the stores and digital channel, supported by our single Happiness loyalty program.

Saifee Rupawala: Private label and e-commerce continue to gain share. The two areas that continue to strengthen our customer proposition are mainly, as I mentioned, private label and e-commerce. Private label penetration increased to 30.7% of the retail sales during the quarter as customers sought strong value without compromising on quality. Our portfolio span multiple products and price points and continue to expand. Recent product launch include wellness, community-focused products, and sustainability-led ranges. At the same time, our e-commerce proposition continues to scale with 53% year-on-year growth, now contributing 8.9% of our total retail revenue. We now offer a more integrated customer experience across the stores and digital channel, supported by our single Happiness loyalty program.

Speaker #3: Private label and e-commerce continue to gain share. The two areas that continue to strengthen our customer proposition are mainly, as I mentioned, private label and e-commerce.

Speaker #3: Private label penetration increased to 30.7% of retail sales during the quarter, as customers sought strong value without compromising on quality. Our portfolio spanned multiple products and price points, and continued to expand.

Speaker #3: Recent product launches have included wellness and community-focused products, as well as sustainability-led ranges. At the same time, our e-commerce proposition continues to scale with 53% year-on-year growth, now contributing 8.9% of our total retail revenue.

Speaker #3: We now offer a more integrated customer experience across the stores and digital channels, supported by a single Happiness loyalty program. We continue to invest in our digital capabilities, improving customer onboarding and fulfilling our overall post-order experience.

[Company Representative] (Lulu Retail Holdings): We continue to invest into our digital capabilities, improving customer onboarding, fulfilling our overall post-order experience. Customer feedback remains encouraging with Lulu maintaining high rating. Overall, both private label and e-commerce continues to gain share and remain important driver to the customer engagement and long-term growth. To conclude, I would like to highlight that resilience of our business and the strength of our underlying fundamentals. Despite of the challenging operating environment, we maintain continuity across the business and delivered a stable performance. Our food business remains fundamentally strong as demonstrated by revenue growth and increased customer engagement. Digital momentum is accelerating continued improvement in our omni-channel proposition have doubled revenue on our platform in MENA region. A disciplined approach to the cost and focus on profitability has enabled us to declare an interim dividend of $84 million, equivalent to $0.03 per share.

Saifee Rupawala: We continue to invest into our digital capabilities, improving customer onboarding, fulfilling our overall post-order experience. Customer feedback remains encouraging with Lulu maintaining high rating. Overall, both private label and e-commerce continues to gain share and remain important driver to the customer engagement and long-term growth. To conclude, I would like to highlight that resilience of our business and the strength of our underlying fundamentals. Despite of the challenging operating environment, we maintain continuity across the business and delivered a stable performance. Our food business remains fundamentally strong as demonstrated by revenue growth and increased customer engagement. Digital momentum is accelerating continued improvement in our omni-channel proposition have doubled revenue on our platform in MENA region. A disciplined approach to the cost and focus on profitability has enabled us to declare an interim dividend of $84 million, equivalent to $0.03 per share.

Speaker #3: Customer feedback remains encouraging, with Lulu maintaining high ratings. Overall, both private label and e-commerce continue to gain share and remain important drivers of customer engagement and long-term growth.

Speaker #3: To conclude, I would like to highlight the resilience of our business and the strength of our underlying fundamentals. Despite the challenging operating environment, we maintain continuity across the business and deliver a stable performance.

Speaker #3: Our core food business remains fundamentally strong, as demonstrated by revenue growth and increased customer engagement. Digital momentum is accelerating, and continued improvement in our omnichannel proposition has doubled revenue on our platform in other regions.

Speaker #3: A disciplined approach to cost and focus on profitability has enabled us to declare an interim dividend of $84 million, equivalent to three fils per share.

Speaker #3: Overall, we believe Lulu is well-positioned to navigate this environment and deliver sustainable, long-term growth. That concludes my presentation today. I will now hand over to Mr. Sam to take over the Q&A.

[Company Representative] (Lulu Retail Holdings): Overall, we believe Lulu is well-positioned to navigate this condition and deliver sustainable long-term growth. That concludes my presentation today. I will now hand over to Mr. Sam to take over Q&A.

Saifee Rupawala: Overall, we believe Lulu is well-positioned to navigate this condition and deliver sustainable long-term growth. That concludes my presentation today. I will now hand over to Mr. Sam to take over Q&A.

Speaker #2: Thank you. With that, we conclude the presentation and open the floor for questions.

[Company Representative] (Lulu Retail Holdings): Thank you. With that, we conclude the presentation and open the floor for questions.

Samuel Hart: Thank you. With that, we conclude the presentation and open the floor for questions.

Speaker #1: Thank you. We will now move to the question and answer section. If you would like to ask a question, please press star 2 on your phone and wait to be prompted.

Operator: Thank you. We'll now move to the question and answer section. If you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialed in by the web, you can as well request to ask a voice question. We'll just wait a moment or two for the questions to come in. Just once again, if you would like to ask a voice question and you are connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted. Our web participant can also request to ask a voice question through the interface. I'll just give a moment or so for any questions to come in. We have a voice question from Harsh Mehta, Goldman Sachs. Harsh, please go ahead. Your line is now open.

Operator: Thank you. We'll now move to the question and answer section. If you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialed in by the web, you can as well request to ask a voice question. We'll just wait a moment or two for the questions to come in. Just once again, if you would like to ask a voice question and you are connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted. Our web participant can also request to ask a voice question through the interface. I'll just give a moment or so for any questions to come in. We have a voice question from Harsh Mehta, Goldman Sachs. Harsh, please go ahead. Your line is now open.

Speaker #1: If you're dialed in by the web, you can also request to ask a voice question. We'll just wait a moment or two for the questions to come in.

Speaker #1: Just once again, if you would like to ask a voice question and you're connected via phone, please press star 2 on your phone keypad and wait for your name to be prompted.

Speaker #1: Our web participant can also request to ask a voice question through the interface. I'll just give a moment or so for any questions to come in.

Speaker #1: Okay, we have a voice question from Harsh Mehta, Goldman Sachs. Harsh, please go ahead. Your line is now open.

Harsh Mehta: Hi. Am I audible?

Harsh Mehta: Hi. Am I audible?

Speaker #4: Hi. Am I audible?

Speaker #1: Yes, yes, you are. Please go ahead.

Operator: Yes, yes, you are. Please go ahead.

Operator: Yes, yes, you are. Please go ahead.

Speaker #4: Perfect. Thank you. Thank you for the presentation. I was just hoping to understand if you could elaborate a little bit more on the non-food category, which is primarily the reason that's driving the weakness in your results.

Harsh Mehta: Perfect. Thank you. Thank you for the presentation. I was just hoping to understand if you could elaborate a little bit more on the non-food category, which is primarily the reason that is driving the weakness in your results. If you could help us understand which segment, which regions are actually facing pressure. While I understand you mentioned it is mainly because of weaker discretionary spending, are you also seeing any shift in terms of competition or consumer spending behavior which could actually be structural and might need some recalibration of your strategy over there? Thank you.

Harsh Mehta: Perfect. Thank you. Thank you for the presentation. I was just hoping to understand if you could elaborate a little bit more on the non-food category, which is primarily the reason that is driving the weakness in your results. If you could help us understand which segment, which regions are actually facing pressure. While I understand you mentioned it is mainly because of weaker discretionary spending, are you also seeing any shift in terms of competition or consumer spending behavior which could actually be structural and might need some recalibration of your strategy over there? Thank you.

Speaker #4: So, if you could help us understand which segment, which regions are actually facing pressure. While I understand you've mentioned it is mainly because of weaker discretionary spending, are you also seeing any shift in terms of competition or consumer spending behavior?

Speaker #4: Which could actually be structural and might need some recalibration of your strategy over there. Thank you.

Speaker #3: Morning, Harsh. Thanks for that. In terms of the performance, the overall pattern was actually quite consistent across our markets, where food significantly outperformed non-food.

[Company Representative] (Lulu Retail Holdings): Morning, Harsh. Thanks for that. In terms of the performance, the overall pattern was quite consistent across our markets, where food significantly outperformed non-food. Within non-food, we broadly split between lifestyle and the electrical categories. Within the lifestyle category, there was a decrease, which was primarily attributable to lower volumes. In the electrical category, there was also lower volumes, but there was also an impact from negative price mix on revenue. The overall non-food picture was quite consistent across departments, across geographies, where modest inflationary price increases provided only partial mitigation against overall softer demand.

Samuel Hart: Morning, Harsh. Thanks for that. In terms of the performance, the overall pattern was quite consistent across our markets, where food significantly outperformed non-food. Within non-food, we broadly split between lifestyle and the electrical categories. Within the lifestyle category, there was a decrease, which was primarily attributable to lower volumes. In the electrical category, there was also lower volumes, but there was also an impact from negative price mix on revenue. The overall non-food picture was quite consistent across departments, across geographies, where modest inflationary price increases provided only partial mitigation against overall softer demand.

Speaker #3: Within non-food, we broadly split between lifestyle and electrical categories. Within the lifestyle category, there was a decrease, which was primarily attributable to lower volumes.

Speaker #3: In the electrical category, there were also lower volumes, but there was also an impact from negative price mix as well on revenue. And so, the overall non-food picture was quite consistent across departments, across job space, where modest inflationary price increases provided only partial mitigation against overall softer demand.

Harsh Mehta: Understood. Thank you. If I can just add a follow-up question. I saw the numbers on the presentation, you mentioned there has been weakness in Saudi as well. I was under the impression with some of the legacy operators in Saudi currently facing some challenges and Lulu being a new entrant could actually be gaining market share and growing over there. That is not something that we are seeing in the numbers. Would you be able to elaborate more on what is going on in Saudi? Why is not Lulu also growing when the legacy traditional operators are actually slowing down?

Harsh Mehta: Understood. Thank you. If I can just add a follow-up question. I saw the numbers on the presentation, you mentioned there has been weakness in Saudi as well. I was under the impression with some of the legacy operators in Saudi currently facing some challenges and Lulu being a new entrant could actually be gaining market share and growing over there. That is not something that we are seeing in the numbers. Would you be able to elaborate more on what is going on in Saudi? Why is not Lulu also growing when the legacy traditional operators are actually slowing down?

Speaker #4: Understood, thank you. If I may, I'd like to add a follow-up question. I saw the numbers you mentioned in the presentation—there's been some weakness in Saudi as well.

Speaker #4: I was under the impression that, with some of the legacy operators in Saudi currently facing some challenges, Lulu, being a new entrant, could actually be gaining market share and growing over there.

Speaker #4: But that's not something that we're seeing in the numbers. So, would you be able to elaborate more on what's going on in Saudi? Why isn't Lulu also growing when the legacy traditional operators are actually slowing down?

Speaker #3: So, I think the situation in Saudi is complex because there's competition both in bricks-and-mortar from existing or legacy operators. In addition to discounts, there's also competition online in the form of e-commerce, where there's been very aggressive expansion from some new names in a short period of time.

[Company Representative] (Lulu Retail Holdings): I think the situation in Saudi is complex because there is competition both in bricks and mortar from existing or legacy operators in addition to discounters. There is also competition online in the form of e-commerce, where there has been very aggressive expansion from some new names in a short period of time. Overall, the situation in Saudi is aligned to our other markets where food demand remains broadly stable. Food performance was broadly aligned with the overall group performance, but non-food was weaker due to the more difficult consumer backdrop there. Overall, we think our strategy is still right long term, the fundamentals still remain in place, particularly the growth in e-commerce with ourselves and others validates that view.

Samuel Hart: I think the situation in Saudi is complex because there is competition both in bricks and mortar from existing or legacy operators in addition to discounters. There is also competition online in the form of e-commerce, where there has been very aggressive expansion from some new names in a short period of time. Overall, the situation in Saudi is aligned to our other markets where food demand remains broadly stable. Food performance was broadly aligned with the overall group performance, but non-food was weaker due to the more difficult consumer backdrop there. Overall, we think our strategy is still right long term, the fundamentals still remain in place, particularly the growth in e-commerce with ourselves and others validates that view.

Speaker #3: Overall, the situation in Saudi is aligned to our other markets, where food demand remains broadly stable, though performance was broadly aligned with the overall group performance.

Speaker #3: But non-food was weaker, due to the more difficult consumer backdrop there. Overall, we think our strategy is still right long-term. The fundamentals still remain in place—particularly the growth in e-commerce with ourselves and others validates that view.

Speaker #3: In terms of what we're doing there, there's a whole range of actions which we're undertaking, which have already fed through to the numbers in a small way.

[Company Representative] (Lulu Retail Holdings): In terms of what we are doing there is a whole range of actions which we are undertaking which have already fed through to the numbers in a small way, and we think will make a more meaningful impact in the months and quarters ahead. We continue to refine our product offerings based on customer data. We are undertaking some space management, which includes some leasing to third parties. We are implementing smarter promotions across our stores. There are various actions to improve profitability, including waste reduction, supply partnerships, inventory optimization, and there is also, in terms of central costs there, some exercises underway. The performance is disappointing, but we still think the fundamentals are there and the combination of the fundamentals and the actions that we are taking positions us for further growth in the medium term.

Samuel Hart: In terms of what we are doing there is a whole range of actions which we are undertaking which have already fed through to the numbers in a small way, and we think will make a more meaningful impact in the months and quarters ahead. We continue to refine our product offerings based on customer data. We are undertaking some space management, which includes some leasing to third parties. We are implementing smarter promotions across our stores. There are various actions to improve profitability, including waste reduction, supply partnerships, inventory optimization, and there is also, in terms of central costs there, some exercises underway. The performance is disappointing, but we still think the fundamentals are there and the combination of the fundamentals and the actions that we are taking positions us for further growth in the medium term.

Speaker #3: And we think we'll make a more meaningful impact in the months and quarters ahead. So, we continue to refine our product offerings based on customer data.

Speaker #3: We're undertaking some space management, which includes leasing to third parties and implementing smarter promotions across our stores. There are various actions to improve profitability, including weight reductions, supply partnerships, and inventory optimization.

Speaker #3: And there are also, in terms of central costs, some exercises underway. So the performance is disappointing, but we still think the fundamentals are there. The combination of the fundamentals and the actions that we are taking positions us for further growth in the medium term.

Speaker #4: Understood. Thank you, Sam. That's all from my side.

Harsh Mehta: Understood. Thank you, Sam. That is all from my side.

Harsh Mehta: Understood. Thank you, Sam. That is all from my side.

Speaker #1: Thank you. Thank you very much. So maybe just a final reminder: if you'd like to ask a question and you're connected via the phone, please press star two on your phone keypad and wait for your name to be prompted.

Operator: Thank you. Thank you very much. Maybe just a final reminder, if you would like to ask a question and you are connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can also request to ask a voice question. I will just give a moment or so for any additional questions to come in. Okay. Looks like we have no further questions from the audience, so we thank you all for participating in our call today. We hope to see you on our next earnings call. Thank you. This concludes our call for today. We will be now closing all the lines. Goodbye.

Operator: Thank you. Thank you very much. Maybe just a final reminder, if you would like to ask a question and you are connected via the phone, please press star 2 on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can also request to ask a voice question. I will just give a moment or so for any additional questions to come in. Okay. Looks like we have no further questions from the audience, so we thank you all for participating in our call today. We hope to see you on our next earnings call. Thank you. This concludes our call for today. We will be now closing all the lines. Goodbye.

Speaker #1: If you're connected via the web, you can also request to ask a voice question. I'll just give a moment or so for any additional questions to come in.

Speaker #1: Okay, it looks like we have no further questions from the audience. So, we thank you all for participating in our call today. We hope to see you on our next earnings call.