SEB SA (SK) Earnings Call Transcript

Good afternoon, and thank you for being with us for this presentation of our annual results for 2019. I will make this presentation together with Stanislas De Gramont, who is the Deputy COO for the group, who is in charge of the various continents, who will give you all the specifics going on in those markets. You know him. And I'm with Nathalie Lomon, who is the Deputy CFO in charge of finances. You might not know her. She joined us about 6 months ago. Without any further ado, look, I guess, you want us to talk about the coronavirus. However, we want to talk to you also about 2019. It took us a year to come up with -- so we want to share this with you. Let me specify immediately that in the press release, you noticed that we are going to talk about it. We have 6 plants out of 7 that are industrially working. So it will pick up again, hopefully. And this -- what about the impact on the revenues in the first quarter? So if you're really eager to hear this, you can read it. We'll come back to it in a few minutes. Otherwise, let's talk about 2019 for those who -- so you can read it first if you are really eager to do so. But we will spend the time you want, anyway. So 2019, what can we say about it? Well, first of all, the first word would be to say that, again, a good year. If we look at the environment, it's still challenging, and political tensions and social tensions as usual in France, but also in South America, especially in Chile and in Colombia. Commercial tensions, of course, between China and the U.S. with the tariffs, but also strong tensions between Japan and Korea, which created major disturbances, especially in Korea. And of course, there are geopolitical tensions, as usually, unfortunately, in the Middle East and in other regions. So there -- it's still quite challenging. And secondly, and let me mention this again. It's something that comes back again and again. For those who know us, we are in a business area, which in the past 25 years has never nearly been a negative territory. We always have had a slight growth, sometimes strong 3% to 4% growth worldwide in a sector which is resilient. So it's resilient because we see that during the crisis we went through, whether financial crisis or Russia in 1998 or other years, so our area is resisting better than others. And perhaps because the unit products in our businesses are at EUR 50, so it's cheaper than cars or other products. And this is a daily life every day. Every year, we talk to you about 2 factors, the cost of raw materials and currencies 2019. That cost of raw materials is rather positive for us compared to other years. And the currency effect, which, as you know, is essential. We are probably the most worldwide company. So the most exposed to the changes in currency values. In 2018, if you recall, we had EUR 45 million of negative impact on our operating income. We are at minus 5%. We'll see with Nathalie later on. So the currency effect is what it is. So there are also major shifts in the retail business. I think we are talking about this for 2 or 3 years now and it will last probably for another 2 to 3 years. We'll listen to what Stanislas says about this. And the emergence of the digital commerce of Amazon, of these few players, Amazon in the U.S., Alibaba, Tencent in China, is revolutionizing fully the retail business. It's not over. It's not the beginning because it has been lasting for several years, but clearly, there are a few more years to adjust in this retail environment. In the meantime, it gives rise to a very promotional-based context against this environment. The main figures of the group, you know them, sales at EUR 7,354,000,000, up by 8% in euro and plus 5.8% on a like-for-like basis. In other words, there's a slight scope and currency effect and scope effect, which are the acquisitions we will talk about later on. When you split this revenue between our 2 main businesses, so Professional, EUR 800 million, growing by 12.1% on a like-for-like basis, and it's growing by 25% with acquisitions. You can see that this sector in which we entered during the acquisition of EMS at the end of 2016 is sharply growing and is growing organically. And in terms of the acquisitions, it's getting very close to the EUR 1 billion. Now Consumer business at EUR 6,555,000,000, is up by 6.1%, or that's 5.2% on a like-for-like basis. Moving to other key figures now. Nathalie, certainly will be coming back to the specifics. So revenue, we have seen it, the operating income at EUR 740 million is rising by 6.5%. So that growth is quite satisfactory in our view. The net profit is down compared to 2018, as we will see. And due to a number of provisions we took in terms of expenses due mainly to the restructuring of WMF in Germany, which we had mentioned already a year ago. And the net debt, and we will see its strength in terms of operations, you can see that it's increasing by EUR 334 million, which is the effect of the enforcement of the new standard, the IFRS 16, which consists in capitalizing leases in assets -- in fixed assets, and now that fixed asset is increasing by that figure approximately in our balance sheet, and the counter-party goes into debt, EUR 334 million. It doesn't change anything, of course, to the situation, the gearing situation of the group. It's just an accounting standard. Due to these good results, but to take into account at the same time of the coronavirus, which calls into question the future, and you know the group's Board, which wants to remain quite modest and unassuming wherein circumstances may change, the Board want to increase by 5.6% the dividend at EUR 2.26. And all the shares registered for more than 2 years have a dividend increase by 10% or EUR 0.22, with a limit of 0.5% of our equity. Following the figures now, 2 pieces of information, one pertaining to our acquisitions, which is typical 2019, turned out to be a year when we developed our acquisitions in the Professional arena. This year, there are 2 of them, and they are both in the Professionals. The first one, Curtis in the U.S.; number 2, in professional coffee for filters in the U.S. based in Los Angeles, which is very much complementary, as we said, with our WMF shareholders' business because the WMF shareholders, these are very expensive machines, fully automatic for espressos with major customers. But in that particular case, it's for, what -- how do you call this? It's for a small cafe or a diner in the U.S., where you can have a great filter coffee, which we all love, and therefore, which is very much complementary with our coffee business in the U.S. And the second business, which is even much smaller, well, is -- look, have in mind in France. Krampouz was acquired. They are a high-end [indiscernible] appliance next to the City of Quimper. They joined the group at the end of 2019. And in this introduction, we wanted to talk to you about something that is not mentioned frequently, but which is interesting, and that is to talk about SEB Alliance. SEB Alliance, which we consider as a catalyst of our innovation strategy, it's a company which has held 100% by SEB SA or Inc. It aims at taking stakes, minority stakes, or majority stakes sometimes, in very technological start-ups. The aim being of -- being actively watching disruptive technologies and being able to include them into the group. So there are a few examples of companies in which we are partners, either in a minority or in the majority. In minority, Feeligreen, it's a small company, which we acquired, which is in personal care, skincare. Home farming, which is very much up and which is very much trendy. It's at the source. It's in Lithuania. We have a share in it. Robotics is a German company, which specializes in detection. It's used -- for us, we have a detection system for our vacuum robots. It's -- And AnotherBrain is an AI company. At the time, it was about the food processor. What was it called at the time? Well, anyway, let's move on. So it's a company purely based on AI. And Alkemics, it's one -- it's a beautiful valuation, which is about customer relations. All in all, the direct acquisitions are mainly majority business, but there are funds. And at this stage, we have invested already about EUR 50 million, and we have commitments up to EUR 40 million. We will be exceeding the EUR 100 million investments by the end of this year. And it will move on and on, and we believe that, at any rate, it's quite interesting to remain in it. I will turn it over now after this introduction to Nathalie. She will talk to us about the figures.

So good afternoon to all of you. Thank you, Thierry. In 2019, the SEB Group had revenues of EUR 7,354,000,000, up by 8% versus the 2018 at EUR 6.8 billion, with the 3 effects. In our next slide, I will look at the currency impact. But, first of all, organic growth, 5.8%. And before -- the details given by Stanislas, it means growth in every business line, in every line of product, in every region in the world. And the scope effect, 75 -- EUR 71 million, which is the integration of Krampouz and William Curtis (sic) [ Wilbur Curtis ] at the end of the year and a currency effect that is positive on the revenue of EUR 71 million. By the way, the scope was at EUR 75 million-plus. Thank you. So EUR 71 million is the currency effect. With -- on the left-hand side of the graph, you can see the green bars correspond to a positive impact of all the currencies that became high against the euro. You see mainly, relative to 2018, the dollar, the renminbi, the yen, the hryvnia in Ukraine, the ruble; and on the right-hand side of the graph, a number of currencies or emerging currencies had continued to get devalued and continued the move we saw in 2018. The revenue of the group is split in the following manner: 38% in Western Europe. I will not comment all the graph. 25% in China. We'll come back to China during this presentation and in the Q&A. With a split, which is fairly balanced between emerging countries and mature countries. Mature countries representing slightly more than 50% of revenues, and emerging ones a bit under 50% of revenues. I'll turn it over to Stanislas now, who will kick off on the lines of products.

Thank you, Nathalie. Good afternoon to all of you. So the first conclusion for 2019 on -- all our lines of products are growing. That's not the first time we are mentioning, but, however, it's continuing. Three remarks regarding this performance. First of all, regarding Professional Coffee, there's a rise on a like-for-like basis of about 12%. And the Wilbur Curtis moved up to 26%. So we have an excellent momentum driven by large contracts in China and the U.S., mainly, but also through a core business, a recurring business, which is extremely brisk. Now the second point is about home care and linen care. These are 2 categories which are growing, and I will talk about it in parallel to underscore, on the one hand, the fact that these are traditional classes that have been for a long time, the vacuum cleaner, the irons, these are categories which are being renewed dramatically in -- with the versatile vacuum brooms. In linen care, we have moved to steamers, and now the garment steamers. And we are creating some momentum in these categories by a renewal and the improvement of the offer in every one of our markets. You can see emerging the LKA, which is a large kitchen appliance sector. In China, you have this vacuum -- you have these hoods, which is extremely dynamic. That report is developing, it's starting to emerge. In the graph, so the group, maybe the last point, is about our core business, which is electrical, which are cookware, preparing food, and these are also dynamic categories where we have a renovation and innovation plans, which are significant and allow us even in more mature categories, we can create a growth of 5% to 8% on electric cooking. So we have a portfolio of businesses which is very much growing, very balanced. And this allows us, as a matter of fact, of moving to the next page, and that is the -- we can now drive growth in every region in the group. Now the group is actively present in about 150 countries. And remember, in 2018, every area is growing except North America. And this year, all the areas are growing. In 2017, all the areas were already growing. So this growth is related, on the one hand, to a portfolio of products that is balanced and quite broad. It is due to the fact that our markets are brisk in emerging countries and in industrial countries. So let's have a look at this in more detail. As you can see, you have the top 20 countries in capital letters and with the box around them, you have the first 10 countries. In green, the growing countries, and in red, those countries where the figures are dropping slightly. The scale is rather deceiving. In other words, the worst geographic performance was roughly minus 4%, and the best-in-class had roughly 25% to 30% in increase. So we have a very dynamic market in Eastern Europe, in Russia, for example, in Ukraine, but also in China. And as we said, we will talk about China. Now in France and United States, the performance is pretty flat. And in those countries that are slightly dropping off because we have low single-digit growth to use a term that has emerged in our community, we are here focusing on countries that either are having unfavorable context because of loyalty programs. This is the case of The Netherlands, for example, it's the case of Austria. Or they are having occasional difficulties, Germany, South Korea, for example, where we have had to update and change our sales policies to a certain extent. And in the U.K., of course, it has been the Brexit impact, and the market is a very taut market. There's also the currency effect. But since the fourth quarter, we've shown positive growth in the U.K. Positive growth, so it's always better than negative growth. So as per usual, we are now going to travel around the world. Let's just start with Western Europe. Here, you have low-level growth, 0.3%. There are a certain number of impacts, problems in terms of loyalty in France, for example, notably throughout this region of the world. So up 0.3% in terms of organic growth is reasonable given the context. The countries that are more difficult are France, nevertheless, the sales are stable. We thought that we would achieve a good end of the year. In July, I said we'd have a good second half of the year. And yet, it was rather disappointed. We were impacted by strikes and a certain number of order cancellations or order postponements. And so, hence, the business activity in France was difficult. It's now stable, not declining, but it is stable. In Germany, in September, I believe, we said to you that we changed certain aspects in terms of our sales practices. We've started to take things under control. So we've changed our sales conditions, and we've also changed the management team, the local management team. Hence, we are gradually altering the sales practices in order to bring them into compliance to create more balanced customer relations so that we can race forward and achieve revenue and guarantee the economic performance of the entity. Germany is a country that we took in hand in March and June and also towards the end of the year. And now we have an outlook that is a lot clearer. We can see exactly what is happening in Germany. So we are now much more serene as to what is going on in this business sector. In the other countries of Europe, not much topical information. I would just like to say that the growth is reasonable, but the variations from one country to the next often are dependent on specific country features. Next, in the other EMEA countries. Here, however, you've got virtually all of the countries that are showing strong growth, 12.4% of organic growth with EUR 897 million in sales. The growth is robust. This is because there's a lot of innovational development of our range. Lots of offline and online marketing activation. It's all very dynamic. And also, we are more and more deploying our own retail stores in Poland, Egypt and Italy. And all of this plays a major role in terms of the group's growth. As I said, the performance is spectacular also in Russia, Ukraine and Central Europe, with growth levels that are absolutely remarkable. And this has been the case for several years. And in Turkey and the Middle East, the situation is changing. We're seeing a recovery after several difficult years in these 2 regions of the world. Let's now go across the Atlantic, and have a look at North America. In North America, organic growth of [indiscernible] 2.9%. We're achieving approximately EUR 600 million in sales. So the sales are at a quite low level if you compare with the rest of the group. But let's start with the United States in our analysis. There are several effects. First of all, the market is not a very buoyant market. The market tends to be pretty flat. We're talking here about Cookware articles and small domestic appliances. In terms of our market share, we are achieving gains in cookware and in linen care. We're leader with Rowenta brand, for example. And in a market context that is slightly unfavorable, we believe we're doing pretty well. The last point on the United States. Every day in the press, no doubt you are able to see that our clients are suffering. I could give you quite a long list, [indiscernible] for example, although this goes back quite a long way. All of our clients are suffering from competition from Amazon, competition from Walmart, and yet we seem to be doing reasonably well in this context. Next in Canada. The market context is challenging. We're doing what we can with our product lines, and we have achieved to sign certain specific deals that are enabling us to drive growth. But basically, the business is rather difficult. In Mexico, however, we have brisk growth in our annual sales, the growth rate of approximately 10%. Mexico is reaching approximately EUR 100 million in revenue. So this is in line with what we look to achieve in relation to the rest of the group. We had a record performance for Q4. We have some very strong products with our main clients who are very interested in them. So I would say, all of the lights are green for Mexico. If we move further south to South America. Well, in South America, we are talking here mainly about Brazil and Colombia. Here, the -- we have 0.7% in organic growth, with sales figures of EUR 326 million. For Colombia, the growth is moderate. This is pushed forward or propelled by fans, for example, and cookware. We did a massive amount of work that is paying off. In order to improve the competitiveness, industrially speaking, we've seen remarkable improvements for our cookware and household appliance sites, and the retail group has performed well. So it's a very sturdy, robust country that is developing well. In terms of Brazil, the sales are in the red. But if we cast aside PIS-COFINS because we have a tax credit that amounts to approximately EUR 33 million in terms of sales and margin for last year, and it's only EUR 9 million positive in margin and sales this year. So notwithstanding this effect, we have a growth rate of approximately 10%. This good performance is achieved thanks to the fans in Brazil that are doing extremely well, and thanks also to coffee with Dolce Gusto. We're also expanding new categories, the oil-less fryers, the grills. So we're seeing a turnaround situation, and we'll continue to see a turnaround situation in Brazil. In China, for example, we said we thought we would have a very good year. We achieved 12.2% in our organic growth, EUR 1.7 billion in sales. This sustained growth was thanks to all the indicators we monitor. Cookware articles are doing well in terms of the market, also small household appliances, and in particular, the new products, for example, the garment steamers, et cetera. And as I mentioned earlier, the fixed kitchen where the large kitchen appliances and the hoods, for example, and the water purifier. Supor's market share is increasing. Very dynamic in the market for 2019. I'd like to round off this journey around the world with the other Asian countries: Japan, South Korea and the other countries. They account for roughly 1/5 of this other part of Asia. The organic growth amounts on average to 1.2%. Very positive in Japan despite the increase in VAT, 8% to 10% -- up 8% to 10% at the beginning of October. Push forward, thanks to our cookware articles and the electric kettles, Japan is now the #1 country for [indiscernible] all of the different ranges for specific handles, removable handles for our pots and pans. Thank you, Thierry. For the brand T-fal, Japan is the top country for this. Also for kettles, we have 60% of the market share in Japan, very dynamic. And last but not least, in terms of retail, we now have 39 stores in Japan. And this means that we are growing and the margin is good. South Korea has suffered. The market is declining. Our annual sales are down on a like-for-like basis. Consumption is not particularly buoyant. So we started a recovery scheme, we did so in -- at start of the year and at the end of last year. However, it will be a long journey. We know we are on track, but it will be a long journey. And the news from South Korea hasn't been that positive concerning the environment. We'll refer back to that. Next, for what we call the other Asian countries, Australia, Thailand and Malaysia. They are progressing fast, slight sales decrease in Vietnam. We're refining our distribution retail approach. So we're basically looking to reanalyze all of our activities in Vietnam, and I'm sure we'll have the opportunity to talk about that over the next few months and years. While I'm traveling around the world, I'd like now to refer back to Professional Coffee and share with you a certain number of figures that I believe are particularly impressive: EUR 800 million in sales. Organic growth at 12.1%, as I said earlier. So the development is very rapid. We're confirming the fast development in several countries. We have 10 to 12 countries, is it not, Thierry, that are very active in the Professional Coffee sector. We signed many major contracts in the states in China. And as Thierry said, we've acquired and integrated Wilbur Curtis into SEB Professional North America. And the 2 companies share a WMF, and also Wilbur Curtis are working very actively in order to develop synergies from a sales perspective and from a retail perspective for this specific business activity. Nathalie, over to you.

So let's look now at the operating results from activity with the revenue that is growing, as you can see, by 5.8%, hence the operating result from activity amounts to an increase in 6.5%, EUR 740 million, and an operating margin of 10.1%. Let's move straight away on to the diagram that explains in an analytical manner the way in which the ORfA is compiled compared with last year. As you can see, first and foremost, and I'm going to start with the right-hand side, you can see the scope and method effect. This, in other words, is the contribution of the acquisitions made during the course of the year, Wilbur Curtis, Krampouz, and also the positive impact of the introduction and the setting up of the IFRS 16 standard that provides an impact of EUR 9.1 million out of the '18 that has been mentioned. The currency effect is slightly in the red, as was indicated on the -- for the operating income. Here, you can see it's the offset of the compensation in relation to what I showed you earlier for the revenue. And also, there are a certain number of buying positions on the dollar in the U.S. that have enabled us to have this relatively limited impact of EUR 5 million for 2019. In the explanation for this year, we have isolated the impact on the operating results from activity. First of all, as Stanislas said earlier on, this concern is causing -- this is an event whereby we've recognized revenue related to tax credits that have been recognized by the Brazilian state. This has nothing to do with the operational business done by the group, either in 2018 or 2019. Simply, in 2018, these tax credits were recognized for 20 -- EUR 32 million in the accounts, and they were also recognized that included, to a lesser extent, for EUR 8 million in 2019. So the EUR 8 million minus EUR 32 million explains this drop in contributions to the revenue and to the operating result from activity. That's the first point. The second point I wanted to raise, behind the acronym, it's Groupe SEB Deutschland, Groupe SEB Germany. Here, we're talking about the accounting adjustments that we have entered into core accounts. This concerns the sales policies that were granted by the management team that left the company in 2018. This has been corrected in our accounts for 2018, but under the operating results for 2019. So in other words, they weren't part of the initial basis for the calculation of the operating results from activity initially. So this has a negative impact of approximately EUR 20 million. Let me now refer to the more traditional part of our analysis. If we look at the analysis of our ORfA, this has increased due to the volume effect, mainly the EUR 148 million that are here. They account for the contribution to growth from Supor, also the contribution to growth from the Professional Coffee business activities and also the great Supor or excellent performance from Europe, notably Eastern Europe and also Russia. The pre-mix (sic) [ price mix ] effect is very limited this year, but this is a year where the currency impact, globally speaking, for the ORfA has been very low. So we haven't seen a very significant evolution of our prices in local currency. We have been able to offset the negative impacts for the most part, and this price mix illustrates that we think that the cost of sales has gone up just slightly. So the money we're spending on marketing and sales have increased. And when we compare this with the revenue, and you'll see this on the following graph, it remained very stable in relation to the spending that we made last year. But I will refer back to this afterwards in order to look at the advertising and marketing spending and the investments made by the company. The sales cost and the administrative costs are up EUR 31 million. And when we compare these and bring them in line with the revenue, we can see that they're down in relation to last year. So this illustrates that the company has made a lot of effort to find extra leverage, notably from the general and administrative functions. I think we can move on now to the following slide. This goes into detail on what we call the main growth drivers, essentially for advertising and marketing. The amounts that we indicated correspond to average spending. So we take into account here all of the cash out, as we call it, prior to the capitalization of certain types of spending on the profit and loss or the statement of accounts. And of course, we benefit from that tax credit for research. So all of the growth drivers for 2019, as for 2018, amounted to 10% of the revenue, with, as you can see, a major amount of effort in the innovation sector, up 7.7% compared with 2018. So higher than the increase in revenue. The aim, of course, is to focus our spending on the specific segment and to guarantee growth, the long-term growth of the company. The following slide. Here, you have the operating result from the activity. So we're moving from the EUR 740 million that I've just commented on to the other operating income and expenses and the operating profit. First of all, I would like to focus on the discretionary and non-discretionary profit sharing. Here, the line is very stable as it is compared with last year. Between 2018 and 2019, you can see that there are very -- there are minority amounts for non-discretionary profit sharing. Basically, the company has a plan whereby it looks to increase the capital. This is set aside for those members of staff. The plan that we stated in 2019, the aim being, of course, to guarantee the buy-in and also the participation of the staff, their contribution to the growth and the performance of the company. The next line that is important on this table, this is the line entitled Other Operating Incomes and Expenses. Here, you have EUR 82 million this year that has been spent. Thierry commented on this earlier on. One of the main components of this line concerns the restructuring costs, the money that we've provisioned for within the scope of WMF. So we have a plan that was announced last summer. The aim being to reduce the headcount on the one hand and also to organize transfer a part of the production to more efficient sites in the rest of the group around the world. This is something whereby we've observed that the workload at the end of 2019 amounted to approximately EUR 40 million. Sorry, the cost, it was the expenditure, the expenses amounted to EUR 40 million. As we said earlier, the accounting adjustments were included in 2019 under the sales heading credit that was granted to our clients during the year for the amount of EUR 20 million. Next, you have other elements that are less important in terms of the unit value. The first one is the acquisition cost for the operations that were closed this year or right at the end of last year, and these account for approximately EUR 6 million. And the second one concerns the depreciation of the goodwill. This is the residual goodwill of the business activity that the group purchased in India a few years ago, and for which there were still EUR 6 million that remain to be depreciated or amortized. So we no longer have any goodwill for this subsidiary in the group's accounts. Let's move on now to the net profit. So here, we have the operating profit, EUR 621 million, then we have the net profit at EUR 380 million. Let me start with the bottom of the table. The minority holdings have slightly increased. And this illustrates the increase of the performance of Supor. As you well know, Supor is the group subsidiary, whereby 81% belongs to the group, but there is 19% of minority holdings, and here, you can see the share of the profits that is allocated to them. Next you have the taxes here in absolute value terms. It's stable in relation to last year. The absolute value shows a slight increase, slightly above 23%. So it's a tax rate that I would say is very high-performing, and that also illustrates the geographic deployment of the group's subsidiaries. And the last point concerns the net financial expense. As you can see, something has happened here. You have EUR 32 million in costs for last year, EUR 61 million in costs for this year. So I'd like to home in on this for a few moments. Last year, in 2018, there were a certain number of elements related to financial products, as we call them, related to financial spending. First of all, we revalued the operational part of [ Lornay ]. [ Lornay ] was a financial instrument of funding for the group based on the value of the share. And this led to the EUR 13 million that we don't have in the results for this year. The second specific event from last year was related to the recognition of the tax credit for the Brazilian state, mainly in relation to the revenue linked to certain interests that are being recognized under financial products for EUR 21 million. This amount this year is a lot lower given that the tax credit that was recognized for EUR 8 million and then the financial product is limited to EUR 3 million. However, this year, there are 2 specific events in the financial results. First and foremost, the result of the liquidation of one of the holding companies that had no business and that, however, had remained within the group's perimeter since the acquisition of Supor as a company, and for which we proceeded to liquidate it, and it brought in EUR 10 million. And then the second point concerns the entering into the accounts of the impact of IFRS 16 standard, and this leads to a cost or a charge of EUR 15 million. So taking into account all of these elements, it explains variation in the net financial expenses. However, there hasn't been any significant increase in the group's debt otherwise. Now the balance sheet. But before that, we just wanted to say that net profit was indicated earlier at EUR 280 million. It's actually at EUR 380 million. So we have now a presentation of the balance sheet, which go over the financing and the value of the assets we need to fund. And I believe that there are 2 slides after that. First of all, to look at the trend of the net debt and then the working capital requirements. Let's start without any hesitation with the net debt trend, which last year stood at EUR 1,578,000,000, and this year is EUR 1,997,000,000. The first element to comment regards the first year when we implement the IFRS 16 standard, which mechanically increases the amount of net debt of the group by EUR 362 million to move it up to EUR 1,940,000,000. So these 2 elements which are compared with EUR 1,943,000,000 and EUR 1,997,000,000. Moving from one standard to the other accounting standard is done in the following manner. Let's start with the right-hand side here, the dividend paid out this year. So partly to shareholders to SEB Inc. and partly to the support shareholders for total amount of EUR 137 million. Acquisitions that were made this year, Wilbur Curtis, namely, as well as Krampouz mainly, and changes at EUR 32 billion of working capital without operations, then the amount of taxes and interests, which are increasing now, but they show the increase in the tax burden in 2018 compared to 2017. Now investments of EUR 303 million, out of which EUR 253 million of CapEx and EUR 50 million coming from the IFRS 16 implementation and capitalizing the new leases-related contracts. So the working capital change, which I will comment later on, and then the balance, which is the cash flow that we can generate around EUR 900 million. EUR 4 million missing. Now the working capital development. This graph is quite interesting. It shows you that the group has, from the early part of the previous decade, made major efforts to cut down our working capital required, moving from an amount that exceeded 25% in 2011 to a situation that was commented last year as being a reasonable target for the group of about 16.5% of revenues in total. That's 16.4% last year. We are at 16.5% this year, which accounts for the slight increase in the working capital requirement relative to revenues in absolute values that we saw in the previous graph. This is taking us to last slide of this presentation in -- for me, at least, the gearing and the leverage last year. We had the gearing ratio of 1.9. At closing, it's 2.1. That 2.1 includes 0.2 related to the implementation of IFRS 16. Excluding it, the leverage was stable. What we wanted to show you through the dotted lines that, excluding IFRS 16 and the acquisition, we would have continued to deleverage. So the acquisitions were fully funded by the cash flow generated by the company in 2019. Thierry, over to you.

Thank you very much for this [indiscernible] which is very clear, which was such that you nearly forgot about the coronavirus. A few words, first of all, to come back to our long-term strategy. I think you are -- well, acquainted with it, we keep coming back to it because this remains unchanged and is our model and is based on one word, which is balanced. Balanced in terms of regions, in terms of types of products and in terms of brands as well as in terms of retail elements. So trying to move swiftly over this. So we have a global and balanced footprint. As Nathalie said, our footprint is worldwide, but we are at 55% in mature countries and 45% in emerging countries. The 50-50 was before we bought out WMF with the Professional Coffee business arrival. It might change, it might go down slightly for different reasons. It's a deliberate result on our part to strike always a balance between these 2 regions. So we are a worldwide footprint with 3/4 of our sales in countries where we are ranked #1 or #2, clearly, and our business is a premium to the leaders. When you are a leader with the scale -- savings you can achieve, especially in terms of your marketing or commercial expense, and that global footprint is something we focus on and work on and extend. And we enhance it through a product offer. Secondly, this is not very new. Our global footprint and our global growth, it is partly based on organic growth, 5.8% this year. But also it's made up of acquisitions, especially help us grow in areas where we are still weak. And why is there such a result of in both areas? We believe there's a real complementarity in mature countries. These countries usually have growth rates in our business that are much weaker, obviously, but there's real interest for innovation for the ramp-up, where margins were quite beefy with some good stability conversely in mature countries, I mean, emerging countries. There might be economic crisis or health-related crisis. But over the long term, it's -- the middle class development is in focus, the figure for us, which is an obsession. In 2010, there were 2 billion people of middle class, 1 billion in each region. We still have in -- we have 1 billion in mature countries. We still have 2 million -- there will be 4 billion in emerging countries. So therefore, obviously, there are many future consumers who are waiting for us with open arms, and we can -- we know that there is a real correlation between the rise of the GDP and the rate of equipment in households. This is a global and balanced business that we have. So for the past few years, the sizes of our countries is increasing. Several years ago, in 2016, it took EUR 35 million to be the -- ranked 20th in the country -- today, it requires EUR 60 million. It shows in the new economies, which are rising quickly. The Ukraine, remember, several years ago, for those who know us well, with the working capital for EUR 1, it was at EUR 30, and the currency today is at more than EUR 60. We are widely leaders with these are economies that are growing. Kazakhstan is remarkably growing. And in Egypt, where we have a joint venture, EUR 100 million in Egypt. This is a country that might go through crisis over the long term. Seems to be a country for a good future, Malaysia. Stanislas was talking about Mexico and Colombia, which are very fast-growing areas for the group. Now regions are one thing, the second thing is to strike a balance, we believe because our obsession is obviously the sustainability over the very long term. And we believe that having several baskets or buckets, having several buckets is a strength, and historically, we have a balanced business within the consumer business for -- yes, for the consumers. We are the only group who is both in cookwares, in nonelectric appliances, such as woks or cookers, or in electric ones. Our competitors are in one or the other, and we believe that they are very complementary. And by the way, we have nonelectric and electric cookers. So they are 2 different ways of cooking, but with the same aim. So these are businesses that don't offer the same innovation side, not the same pace. So they're quite complementary. We are also in linen and personal care, and increasingly so for the past 2 years, we entered the Professional business, which is very buoyant with fast growth with very strong margin. So a leadership on a global basis in cookware, I think, we are still 4x bigger than the #2 on a worldwide basis. So this leadership is robust. We have this in -- even if products change in terms of linen or we have a worldwide leadership in Professional Coffee in automatic or espresso brands with WMF and Schaerer, supplemented with Mr. Wilbur Curtis. The key point in this strategy in terms of product categories is to constantly innovate and create new opportunities by relying on the development of technologies with new progress through technologies. It's about new products through different trends in consumption and we also, by ourselves and through external acquisitions, the best example of that being the coffee business. You can see on this slide, it was mentioned by Stanislas earlier on, let me start with the garment steamer. And this tomorrow will be the main ironing business, the versatile vacuum cleaner, which didn't exist 5 years ago. And the mugs, yes, the mugs which, today, where it is? The mugs, I try to be French because -- so we call them mugs in French as well, which you no longer see in the street among young people who is not roaming around with their coffee or their water in mugs. This is the on-the-go. It sounds modern. This is one of the products that is expanding quite swiftly, and it's true across the board, it's true in the U.S., it's the largest development in China, in India, around the globe. And this offers fast-growing opportunities in the coffee business. This is a Professional Coffee maker. I mean this is a consumer coffee maker. So this is a challenge for us. We -- this is our DNA, really. We constantly want to be on the outlook for new trends and new technologies to allow us to develop our innovation and constantly accelerate the speed at which we progress in the markets and improve consumer journeys. So that they -- look, we are in a business which traditionally is a bit confusing. You see us in many shelves. And we see that today with some retailers, we are able to specify our offer and explain the needs through major sales growth when we are managing this. So you have to do it extremely well. That's all, and everywhere. Last point is a key point for us. We want to be breaking the ground in terms of circular economy. It's about repairing, recycling. And last year, I was mentioning the fact that we now have ranges, which are in recycled aluminum, and consumers really are really keen to have them. Therefore, we want to be on the forefront and be spearheading this business in terms of circular economy. The third chapter is about brands. There are many of them. Sometimes, we are blamed for having too many of them. We think it's great. We have a consumer brand, some are like worldwide, Moulinex and T-fal. Some are regional like Supor. We have premium brands. We have professional brands like WMF, Schaerer, Wilbur Curtis. We believe these brands are extremely strong flagships or assets. On average, these brands are 85 years old. The oldest is Krups, born in 1946, is very strong in the German-based countries. WMF is the most beautiful German brand. That's the way they are ranked. These are great assets that we must be able to feed and support. And as you know, we have our brand system. We have hubs, platforms. We do not create new products for each one of these brands. As you know, there's an iron called [indiscernible]. In France, it's called T-fal, but it's the same. Our brand is called [indiscernible] in Brazil. It's the same iron. So therefore, behind all these many brands, there are some product consistency that allows us to innovate and enhance each one of these brands, but also use the local capital or, for each of them, local especially in the cooking. Men and women, always remember the brands used by their mothers. It reminds them of their childhood. It's something great. And we believe it is better to [indiscernible] in Colombia than other international brands. And have brands that are committed that creates some inspiration, which means that they need to be local, well-known. These brands have been there for a long time, supported by local ambassadors. These brands mainly are pioneering in the company name. IMUSA is a day of support we give to our Tinteros. These are -- they sell coffee in the streets. In China, we have our program in schools, we built 26 schools in China across in -- especially in nonurban areas so -- where there were some earthquakes. So I believe that this is a vision that not only is normal, but over the long-term is very bullish. Now of course, what is important is to establish an excellent balance. We are particularly attached to establishing this balance. So here, I'm talking about our multichannel approach. First of all, the channels are highly complementary. They enable us to gain access to all of the consumers. And ours is not an elite brand. We do not have top-of-the-range clients. We cover the whole range of the different types of products from the low end of the range but up to the top end of the range. And we are present in all the distribution networks, whether it's with the specialists, the traditional retailers, the hypermarkets, the supermarkets, the wholly-owned shops and e-commerce. And of course, we also have long-term partnerships with retailers. And this is what we want to do, what we need to do because we are leaders in each of the different countries. It's because we're leaders that we can have the best partnerships with the different retailers. Now of course, what is important the development of e-commerce in all of this and everything that revolves around the digital world. This leads to increased development of the digital world with the existing players or with the click-and-mortar players. Of course, what is important as well is our rise in digital investments. As you can see, we've multiplied by 2 our digital investments over the last 2 years. We also need to develop direct relations with the consumers. And we're delighted also to have this direct relationship with our consumers. It's what was more difficult when we used to have simply the retail sector selling for us. So it's a very important factor for us. And of course, what is important is to develop communities and apps because all of our products are relevant for developing the community, people who want recipes, advice, et cetera, in relation to the products. Next, we have the direct approaches. This -- by this, I mean, our own retail approach, our own stores. We have 1,345 stores in the world. And for China, we have 730 stores that sell only Supor products. We have 600 that were exclusive Supor products -- product stores that also sell other products, for example, water heaters. So you can see we have a massive number of stores, and we're opening stores every year. I think there are 9 scheduled to open. There were 9 sorry that were opened last year in Japan, and we're continuing to open stores in a very efficient, active way. It's a great way of trading and highly complementary with the other approach, which is the DTC online approach. And hence, you can order products on the Rowenta site, if you like, but also from all of the group site. You can order any products that you wish in relation to each of our brands. So this balance between the geography, the brands and the product categories and the retail or distribution channels is absolutely vital. Another point that is ongoing that is continuous in our businesses is the fact that consumers are changing. Generations change. Also, the ease of use is important, the versatility and the time saved. Simplification is very important. Very soon, we'll all be walking around with our isothermal mugs. And who would have imagined a few years ago that, that would be the case? I didn't imagine that I would. I didn't imagine either that I would soon use the garment steamer, but it's extremely effective. An ironing board, for example, is not half as effective as a garment steamer. The garment steamer works so much better because it is vertical. Healthy eating and emphasizing the homemade trend, this is something that is coming to the fore. The fact that we have different products today, for example, if you wish to buy your home steam cooker, you can buy it with handles of the color that you wish. You can have the engravings that you wish on it. You can customize your product without any problem. But what we're talking about, in fact, is something beyond this. It's the commitment that customers search for from their brand. They want a brand that has meaning, that can contribute to the circular economy and of course, that is in part of the digital world. So all of these approaches have to enable us to go hand-in-hand and to accompany our clients that we are evolving. And it means that we have excellent long-term potential in the group. In the meantime, and we've reached the Chinese subject, we've reached China to talk about the coronavirus. Now of course, it goes without saying that we have a certain number of sites in China, and we have 13,000 staff in China. So of course, we are directly impacted. The first point is that our priority, of course, right from the outset, has been to give priority to the protection of our Chinese employees since they're those who are most affected. And what has affected me greatly is that all the staff all around the world have sent via [ Yama ], our internal system, have sent messages to their Chinese colleagues saying, "Please hold out, we're thinking of you." And I think our Chinese staff were very touched to know that throughout the world, everybody was thinking of them in Colombia, in all corners of the world. And I think they themselves have been remarkable because given the working conditions that were disastrous, they have always tried to start up the plant as quickly -- the plants as quickly as possible to find changeover solutions. They've done a remarkable job. And in front of you, I would like to thank them because I think they've done an extraordinary job. So what stage have we reached to date? Now we have 6 out of our 7 plants that have restarted production between the 17th of February and the 24th of February. They are not yet -- they haven't yet reached full production. It depends on the plant. The Chinese authorities, of course, are gradually allowing the staff to go back to their factories. But once they go back to work, then they have -- if they come back from holidays, they have to comply with the 15-day quarantine period. This guarantees that things will go well. And of course, the Chinese authorities make sure that things are done properly. So as a result, the staff are gradually coming back to work. And when they've proved that they're in good health, they're able to start work once again. So we believe that all of our sites, of course, if all goes well, will be up and running with full production capacity by the end of March. There is, of course, 1 plant, Wuhan, that is still -- well, the site that everybody is talking about, Wuhan is the site that everybody is talking about. And this is where we have a factory where we produce cookware articles for the Chinese market. Wuhan accounts for roughly 50% of our cookware articles sold on the Chinese market because 50% are sourced or sold elsewhere. So of course, it's not 100%. And secondly, Wuhan will -- the warehouse will be reopened shortly, and that will enable us to gain access to the inventory for the Chinese market. And then also, we will be able to transfer part of the production from Wuhan to the site of [indiscernible], that is located in [indiscernible]. And I would like to thank Mr. Donald Trump because last year, he established tariffs, high tariffs, taxes on customs duties on certain products coming from China. And these transfers are currently coming to an end. We then transferred products from China to Vietnam, and we have a Supor factory in Vietnam that has been up and running for the last 8 years. So that's what I wanted to say in relation to our Chinese plants. I repeat, 6 out of 7 have restarted production, and the seventh one is scheduled to open in the middle of March. I think we need to remain cautious. It will depend on the situation. Next, concerning our French plants, our non-Chinese plants. I'd like to remind you that we have 42 plants around the world, 7 in China, so 35 in the rest of the world, 10 or 11 in France, 7 in Germany. And in South America, we have them quite well spread around. All the plants are pretty much functioning normally. So this means that we don't have any problems in terms of components, and we don't have any problems either in terms of missing staff. So the rest of our industrial business is functioning as per normal, and we have the industrial director, who is here, who would be delighted to answer any questions in detail that you might have. But our European and global sites are functioning normally. Concerning the sourced products. Because you know that we have approximately 1/4 of our revenue that is achieved with sourced products, products that we source mainly from China, all of our suppliers have also started work once again. And given the inventories that we'd established prior to the onset of this illness, we do not have any missing products. So for the moment, everything is functioning as per normal outside of China, of course. That's what I wanted to say concerning the industrial situation. We are a big industrialist, of course, in China. So there is an impact on the Chinese business activity. Fundamentally, the impact is located in China. We're not yet seeing it in Europe, but we'll see what happens in terms of the epidemic further down the line. But what we can say is that the sales business activity in China is still low. The off-line business activity in traditional stores is very, very low because people are not yet able to leave their homes. Of course, they can't go to shops. And if they do go to shops, it will no doubt to be -- to do food shopping. So some people have started to purchase online instead. But of course, the activity hasn't been replaced. And so we believe that at the end of March possibly, we will have lost approximately EUR 250 million in revenue in China, and approximately EUR 200 million to EUR 210 million will be related specifically to the stoppage of consumption due to this virus. And the remaining figure will be due to the date of the Chinese New Year. We explained, if you remember at the end of last year, that the Chinese New Year doesn't have a set date. And depending on the date of the Chinese New Year, we either deliver in December or January. And we explained last year that the 2020 Chinese New Year happened very early on. Hence, we'd already achieved the sales in December 2019. So we weren't going to perform them twice. So the 2021 Chinese New Year being late, it means that no doubt we will sell products in January 2021. So this amounts for approximately EUR 40 million. So we have approximately EUR 200 million in revenue for the first quarter. We'll see for the rest. We hope that the industrial business that is up and running will continue to run normally. And hence, sales will resume. However, we don't have a crystal ball. So we can't say anything more that this -- at this stage on this subject. Second slide that I would like to show you, just to be specific as to our vision for the group. Of course, the overall environment remains uncertain. And of course, the challenges, no doubt, will depend on the evolution of the situation concerning the coronavirus. In parallel, we note for the moment that there is greater currency volatility. That's what we expect compared to 2019. We had an impact of EUR 5 million in terms of our operating expenses in 2018 -- sorry, in 2019, but we believe that the figure will be similar to EUR 120 million maybe for 2020. But we do not yet know. Also, we believe that for the moment, the raw material context should be more favorable. It is at this stage. We hope it will remain the case if the Chinese economy is not affected. So no doubt, I repeat, we will see a drop in our performance for the first quarter. I can confirm, there's no major impact on our supply chain at this stage. And the Chinese New Year impact is minimal. So impact for the first quarter. For the second quarter or the second half of the year, we do not really know. We have to wait and see what will happen. However, I would just like to stress that we've experienced a certain number of crises. We've experienced the crisis in relation to the subprimes in 2009, Russia in 2018. We've experienced all kinds of crises across the board, all those that are possible. And let me simply stress that over the last 10 years, we have had exactly EUR 400 million in losses due to the foreign exchange or due to the impact of exchange rates on our operating income. And nevertheless, we've increased our profits from EUR 400 million to EUR 500 million. So please note that the group's management, we are very determined. We do not have a crystal ball. But nevertheless, we are able to pursue with our long-term strategy in a very determined manner. Thank you very much, ladies and gentlemen, and we would be delighted to answer your questions.

Thank you very much. Nicolas Langlet. Now I have 3 questions. The first question concerns China. Do you have clear visibility as to the inventory levels of your main clients, the physical, the real stock? And even if there is quite a quick improvement, are they not going to have a lot of inventory? And so does it not mean that it will be quite hard to make up for the revenue that has been lost? Would you like to answer that question? And I'll put the other one afterwards.

Okay. Well, it depends. We believe that we are pretty well covered. Or rather, let me start out by saying that in China, the products that we sell online are different from the products that we sell off-line. And very often, the differences are quite significant. So I'd just like to say that when it comes to the inventory for online products, the stock levels are quite taut because they're better than for the off-line products. So the off-line products, for example, we are pretty comfortable. However, if we look at the figures, there are a few articles I would argue that are hot articles, as our Chinese friends say. But we are well covered globally speaking in terms of inventories.

What about our retailers?

Well, to be brief, we believe that we're pretty well covered. We do have a few articles, nevertheless, that we might find it difficult to provide. But this isn't the case overall.

And reversely speaking, the retail sector, I think, has reasonable level of stocks. You might be worried that we won't sell anything because the retail department stores have stored too much. Don't be worried about it. There is no excess inventory at the level of the retailers.

What about your wholly owned stores in China? What is the opening rate? And what has the performance been in these stores? What can you tell us about this?

Well, the performance has been very low level because absolutely nothing is going on. Very little is being sold. I'm not quite sure how many stores are open today. But they have virtually all reopened, except that the amount of business they're doing is very low level, in other words, no clients. However, once business resumes, then we will be able to obtain all of the figures. And I would remind you that we have set -- have 700 or so, plus 600 that sell our products.

Second question on Germany. You said that you've taken control of things. You said that you now feel more serene. Concretely speaking, what are the initiatives that you've implemented following the change in sales policies? And as of 2020, do you believe that you will be able to renew the good growth?

I'll answer this question. In Germany, we've had 3 specific levels of reactions. First of all, we needed to understand the extent of the nature of the problems that we're encountering, and we had to implement measures in relation to the management, the measures that we had to implement. We allowed the 4 managers to depart, the top managers, and we now have a clear understanding of the perimeter. And we know exactly what has happened in the past. Among the decisions that we've made will impact 2020, we've decided to stop the business activities that were losing money. So this accounts for just over EUR 10 million in revenue where we were losing money. We've decided to cease these activities. And so we've told our clients that we will not continue with the deal from last year. We have a context, a sell-out context that is still positive. So it means that the business activity seen by the consumers is still positive. And now the main challenge that we're up against is to manage, to smartly manage the mix between sales dynamics where we're making sales investments and also the investment dynamics where we're looking to hold back in terms of the cheaper prices so that we can achieve margins that are closer to our expectations, fewer promotions. So we've -- have a clear vision of the financial situation and the impact of the crisis. And we're currently deploying a sales policy that is much more in line with our expectations with our main clients: MSH, Amazon and so on and so forth. It's a bit too early yet to tell you exactly what the performance will look like in Germany because, of course, our clients preferred it when we invested more. Our clients preferred it when we gave them more promotional offers. So of course, there's a little bit of tension that is totally normal at this kind of stage. However, we are very determined that we will find a pathway that will enable us to increase the margins without fully sacrificing the sales business activity.

One last question on the price/mix. We are at EUR 8 million. Actually, we are at minus EUR 17 million in the second half. Is there a reason behind that deterioration? And at this stage, for 2020, what do you foresee in terms of the price/mix trend?

In my view, there's a German effect on the second half compared to the previous half year, in the previous year.

Look, this is the main explanation. This is due to -- it was passed along. In the second half, there were many competitive challenges also, which explain for the trend between the first and the second half of the year.

Isabelle is telling me in the second half, there was a strange effect.

We'll have to dive into this and find out exactly where it comes from.

I'd like to understand -- to guess what will occur in China. When your plants are shut down, are your employees paid in the meantime? That way, we'll be able to understand better when -- look, there have been some ghost towns, where people were not working. I believe that they are not paid. So if people are not paid for, even if the virus disappears, the purchasing power will dwindle. How will they consume what they were not able to consume before? Could you help me understand this? Second question, on the Americas now. Mexico is a big contributor there. How come Mexico is outperforming in North America?

Your first question regarding China, now how does the system work? Direct labor, which is the bulk of the teams, are these so-called migrant workers. For example, in our Wuhan plants, they do not work all year in Wuhan. They come from the western part of China or remote places. They get contracts that expire when they go back to their town with their paid holidays. After that, they come back and work. And when they come back to work, they come back step-by-step. And there are 15 days that were -- for which they have worked for. And as you know, in China, the compensation system is such -- is it's a low fixed salary. And one, when they don't work, they gain less than when they work. So now with the plant starting again, they are being paid for. So what we believe is that since this is -- this applies to our plants, it's true in the case of our subcontractors. Look, we don't have any production problems because we -- our subcontractors are starting to work again. If it picks up again, people will be paid normally, and then we will have a level of consumption that is reasonable. All I can say at this stage is that people are coming back and are working. There was just a time limit of the -- that time limit when they were quarantined, the quarantine.

What about your customers who were not paid? Do you think they will postpone their purchases? Or will you have to use promotions to bring down your prices because they will not be getting back their purchasing power so quickly?

Take Mr. [ Chang ], Mr. [ Smith ], he went on holidays and is back now. There were 15 days where he didn't work because he was in a quarantine. But -- and then he starts his work again. And as soon as he starts again, he works full time. So he produces normally. He finds back his previous salary.

This is Mr. Chang, who works in your plant, but the Chang who does not work in your plant but is the same customer who is still not working, how will he pay for his support appliance?

I mean, today, in the [indiscernible], in the province or -- of Shenzhen, apart from Wuhan, which is this city, the area which is boxed in, all the rest -- as work in China has started working everywhere else, there's no reason for the other industries not to start again. If this is tough for a year, look, this is just 3 weeks after the new Chinese year. So instead of the plant starting on the 2nd of February, it's as if we started on the 17th February. These are 15 days. These are the 15 days we take care of to pay for the basic fixed salaries. And I don't think, to be very honest, that it will have a negative effect on consumption. And by the way, in China, our product offerings are staggered out between the equivalent of EUR 20 up to EUR 110. Will there be a phenomenon for some people of a trade-down? We're not able to call it at this stage. I don't think it will have a major impact on consumption anyway. Now it's important that plants be started again. So we'd rather not tell you what will happen. But we're not convinced either that in the third or fourth quarter, there will be a major recovery. We don't know at all. So it's better not to say anything.

How about Mexico now?

[ Hubert ], who is our counsel here, do you have any news or any information on this?

So back to Mexico. Now your question is why are we outperforming -- performing well in Mexico and outperforming in America. This is an interesting question. I think there are 3 major differences. The first one is the structure of the retail business and the weight of Walmart and Amazon in the U.S., especially pressure coming from Amazon on the U.S. market. In the U.S., one reason we are suffering is that our traditional customers, the William Sonoma, the Macy's and others are suffering a lot, whilst in Mexico, our most dynamic clients, Soriana and Liverpool, are doing extremely well. And they are the natural allies of our different classes of products. There's a second reason. It's the product portfolio in the U.S. Our business is 1/4 -- 3/4 based in cookware and 1/4 quarter on the electric, which is mainly linen care, which in the U.S. is one of the most challenged market in terms of the decrease in the growth. So the T-shirt and the jeans are outperforming. That's one reason. So this is -- so the portfolio of products which are in Mexico is more balanced. Yes, we are leaders in linen care. We have a strong presence in drinks and in electric cooking. So we have a broader and more dynamic portfolio. The Mexican market is more buoyant as well. The market in the U.S. is slack in these areas. And in Mexico, we see markets which are hinging on to 2-digit segments in many of the categories where we operate. These are the 3 main reasons behind this.