Verisure plc (VSURE) Earnings Call Transcript

Welcome to the Verisure Group Second Quarter Results 2026 Presentation. Today, I am joined by CEO, Austin Lally; and CFO, Colin Smith. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Well, thank you, operator, and good morning, everyone. Welcome to our second quarter earnings call. First, just a reminder that you can find today's presentation, earnings release and interim report on our Investor Relations website, together with updated long-term trending schedules setting out our operating and financial performance. This morning, Austin will begin with opening remarks and second quarter performance highlights. I'll then walk through financial performance in more detail. With that, Austin, over to you.

Well, thank you, Colin. Good morning, everyone. Thank you for joining us on our second quarter 2026 results presentation. Q2 was another strong quarter of delivery, and our results reflect the strength of our model, recurring revenue growth, expanding margins and improving cash generation. We grew our customer portfolio, focused on quality new customer intake, grew margins, generated meaningful positive free cash flow, and reduced leverage to within our year-end target range. And today, we're declaring our first ever dividend, entering a phase of progressive shareholder returns. And with that, let's turn to Slide 2. I would summarize the second quarter by talking about 2 themes. First, we are reporting profitable financial growth and significant positive free cash flow. Annualized recurring revenue reached EUR 3,620 million, up 11.9% year-over-year at constant currency, including around 2 percentage points for Mexico. Adjusted EBIT was EUR 269 million, up 13.9%, boosted by a record monthly EBITDA per customer of EUR 35.7. We delivered our third consecutive positive free cash flow quarter at EUR 56 million. That's a year-on-year improvement of EUR 97 million. And we've declared our first interim dividend as a public company of EUR 0.10 per share within our pre-IPO guided range. Second, we executed well against our strategic priorities. Our rebrand in Spain is progressing to plan and on budget, and we're very pleased with the positive response, and I'll provide more detail on this later in the presentation. We also completed a technology-led bolt-on acquisition in France. The company is Kivala, and they have developed and brought to market a smart, innovative digital technology that controls access to apartment buildings. Think about a modern app-based intercom system. We also expect this to open new opportunities to increase apartment penetration within those buildings, complementing our current proposition. I'll share more on that later. And importantly, our AI program is progressing well with savings already landing and much more to come. Finally, we won 2 prestigious Red Dot Design Awards for ZeroVision and for GuardVision cameras in the quarter. We achieved the highest MSCI ESG rating of AAA, alongside recognition as an ESG leader by Morningstar Sustainalytics. We were also pleased to be named on the Financial Times Europe's Best Employer list for the second consecutive year. Turning to Slide 3 and our second quarter dashboard, you see consistent broad-based delivery across every metric. Our portfolio is now around 6.4 million customers. That's up 9.4% year-over-year, reinforcing our position as the largest professionally monitored home security company globally. New installations were 219,000, up 0.6% year-over-year, reflecting our focus on quality intake with no compromises. Now, as in Q1, we saw a more uncertain consumer backdrop in Latin America, particularly in Argentina. Total revenue increased 9.3% in Q2. This growth was supported by portfolio growth of 9.4% and ARPU growth of 2.4%. Now annualized recurring revenue reached EUR 3.62 billion, up 11.9% year-over-year. Adjusted EBIT was EUR 269 million, up 13.9%, with the margin expanding 107 basis points year-over-year to 26.3%, increasing margins as our portfolio continues to grow. Turning to Slide 4. Here, we set out the continued compounding of our portfolio alongside stable low attrition. On the left, our customer portfolio grew by over 0.5 million customers year-over-year or 9.4%, highly consistent, valuable growth quarter after quarter. On the right, our Q2 annualized attrition was very stable, remaining low at 7.5%. We're very pleased with the performance here. With an uncertain consumer backdrop through Q2, the resilience and stability of our portfolio were evident again. Continuous improvements across the group offset an approximately 7 basis point headwind from the Mexican acquisition. These remain industry-leading attrition levels, especially at our level of ARPU, reflecting the high-quality intake, the portfolio resilience and the high customer engagement that define our model. And with that, let me hand over to Colin.

Thanks, Austin. Let's turn to Slide 6. As always, I'll talk to growth rates in constant currency where applicable. Annualized recurring revenue was EUR 3.62 billion, up 11.9% year-over-year. Total revenue was EUR 1.024 billion, up 9.3% year-over-year, supported by strong portfolio and ARPU growth. Adjusted EBITDA was EUR 468 million, up 9.1% year-over-year. As a reminder, our quarterly EBITDA includes a EUR 10 million investment from our Spain rebrand program as previously guided. And adjusted EBIT was EUR 269 million, up 13.9% year-over-year, with margin expanding 107 basis points to 26.3%. This marks our 15th consecutive quarter of double-digit adjusted EBIT growth, reflecting a long track record of predictable compounding growth. Looking at the first half of 2026, adjusted EBIT was EUR 546 million, up 16.6% year-over-year. H1 margin was 26.7%, up 157 basis points. Earnings per share in the quarter increased to EUR 0.14, up from EUR 0.08, reflecting profit growth combined with a step-down in interest costs following our refinancing program. Finally, our quarter 2 highlights. Free cash flow was positive EUR 56 million, and I'll unpack cash flow in more detail later. Let's turn to Slide 7. ARPU was EUR 48.20 in Q2, up 2.4% year-over-year. This growth reflects the quality and engagement of our portfolio, a strong response to the January price increase, continued low discounting and increased upsell propensity. We maintain no front-book, back-book dynamic within our base with new customers joining Verisure in line with portfolio ARPU. This supports both lower attrition and consistent ARPU delivery. Recurring monthly costs were EUR 12.49, up 1.2% year-over-year. As previously noted, this includes an impact from the Mexico acquisition that we expect will reduce over time. Excluding Mexico, RMC was 0.4% lower year-over-year, reflecting continued progress on sustainable cost transformation against the backdrop of higher cost inflation. Bringing this together, EBITDA per customer reached EUR 35.71. Portfolio Services adjusted EBIT margin increased to 74.1%, up 30 basis points, increasing contribution per customer alongside a growing portfolio. Turning now to Slide 8 and customer acquisition. Q2 new installations were 219,000, up 0.6% year-over-year. We remain disciplined in the quarter, focusing on high-quality customer intake with no compromise on credit scoring or discount levels. With an average customer lifetime around 15 years, maintaining acquisition quality is an imperative to drive long-term value creation. We continue to diversify our routes to market. In Spain, our new MasOrange partnership launched in April and already showing promising signs, offering partnership access to over 30 million customers. In Italy, our Unipol partnership continues to evolve well. And in France, our BPCE alliance has now scaled nationally. Cost per acquisition was EUR 1,644, up 9.8% year-over-year. This includes EUR 10 million of incremental Spain rebrand media investment, equivalent to approximately EUR 46 on CPA. Excluding rebrand, CPA was up 6.7% year-over-year, consistent with previous quarters. The increase reflects media inflation and lower absorption of certain fixed sales-related costs. We chose to continue to invest in media given the long-term benefits to brand equity and future growth. Our acquisition multiple was 3.8x or 3.7x, excluding rebrand, well within our target corridor. New customer cohorts generate an unlevered IRR of around 20% over 15 years, highly attractive value-creating returns. Moving now to cash flow on Slide 9. We generated EUR 56 million of positive free cash in Q2, which represented our third consecutive positive cash flow quarter. Stepping through the bridge. From adjusted EBIT of EUR 269 million on the left of the chart, we add back D&A and customer acquisition EBITDA. We then remove technology and portfolio CapEx investments. In Q2, we delivered an improved working capital movement with an outflow of EUR 8 million. This reflects further progress on our working capital improvement program. That takes us to adjusted operating cash flow before customer acquisition of EUR 557 million. From there, we invested EUR 195 million in attrition replacement, and EUR 164 million was deployed to organic portfolio growth, increasing our portfolio by 100,000 customers quarter-on-quarter. Adjusted operating cash flow reached EUR 197 million, more than doubling year-over-year. Below the line, finance costs were EUR 80 million, which was slightly down year-over-year. This included EUR 13 million of non-recurring costs related to our refinancing program, comprising a call premia and associated transaction fees. Following the completion of the refinancing program in July, we expect cash finance costs to step down in Q3 and again in Q4. Last, I wanted to highlight the note on the right of the chart. By adding back organic portfolio growth investment, our pre-growth cash generation in Q2 was EUR 220 million, up 84% year-over-year. This highlights the underlying cash-generative strength of the financial model. Let's now turn to Slide 10. Staying on cash flow. Here, we summarize progress as we move through our cash inflection point ahead of expectations on every dimension. Our balance sheet has strengthened significantly alongside improving cash generation. First, on weighted average cost of debt, we reached approximately 4.25% on a pro forma basis within our year-end target range of 4% to 4.5% despite the higher rate environment. Second, our refinancing progress puts us well on track to deliver at the upper end of the EUR 200 million to EUR 220 million interest savings versus 2024 as we guided at the time of the IPO. Third, leverage is already within our year-end guidance range of 2.5x to 2.75x, closing Q2 at 2.7x. Fourth, portfolio reinvestment rate has reduced to 57.3% in Q2 from 58.5% a year ago. This is an important metric for us as our portfolio grows in profitability and cash generation, a progressively smaller proportion of portfolio cash flow is reinvested into new customer acquisition. Last, CapEx intensity has reduced to 23.9% of sales from 25.8% a year ago as we capitalize a lower proportion of customer acquisition costs, charging more of these costs immediately to the income statement. Taken together, it's clear that our cash inflection is now well established with EUR 95 million of positive free cash flow generated in the first half of 2026. And lastly, in June, Fitch assigned Verisure its first investment-grade rating at BBB- with a stable outlook, further strengthening our financial flexibility. Moving now to Slide 11. Our deleveraging progress continues at pace. As noted, last 12 months net leverage stepped down to 2.7x at the end of Q2, representing a further 0.1 of a turn improvement in the quarter with total net debt reducing to EUR 4.9 billion. We reduced our total net debt by EUR 72 million in Q2 and by EUR 110 million in the first half of the year. We reaffirm our medium-term leverage target of around 2.5x with a clear pathway to additional shareholder returns over time. As we've noted in the earnings release, we're pleased with progress on refinancing. In April, we refinanced a EUR 570 million Term Loan A upsize with proceeds used to fully redeem our legacy pre-IPO bonds, carrying a 7.125% coupon. Then in late June, we placed a new EUR 1 billion senior secured note for a 4.125% coupon using those proceeds to fully repay our 5.25% senior notes. Following these refinancings, together with margin step-downs on our RCF, Term Loan A and Term Loan B, our weighted average cost of debt has reduced to approximately 4.25%. We now have no debt maturities due until May 2030, but we will remain opportunistic in assessing further options within the debt structure. And as noted, we expect to deliver interest savings at the top end of the EUR 200 million to EUR 220 million savings range versus 2024. Before I pass back to Austin, let's now turn to Slide 12. Today, we reconfirm our 2026 outlook. We continue to expect ARR growth of around 10%, excluding Mexico, adjusted EBIT margin above 26%, reflecting further margin progression while absorbing the Spain rebrand investment, and free cash flow positive for the full year. An important milestone today, our declared interim dividend is EUR 0.10 per share based on a 35% payout ratio on H1 2026 adjusted net income. This will see us return EUR 103 million to shareholders, marking the beginning of a new phase of progressive shareholder returns. We also reaffirm our medium-term guidance around 10% annualized recurring revenue growth, revenue growth up to 100 basis points below ARR growth and progressive adjusted EBIT margin development to 30% long term. Q2 was a quarter of measured execution and again demonstrated the adaptability and the resilience of our financial model. So with that, Austin, back to you.

Well, thank you, Colin. Now, behind the Q2 numbers is a business model designed to compound value year after year. And over the next slides, I'll cover our disciplined portfolio model, investments for growth, our AI-enhanced service and our plans for progressive shareholder returns. Now this slide sets out the essence of our model in 4 words: disciplined, compounding, portfolio growth. Strategic execution rests on 3 pillars. First, high-quality customer intake with no compromise on credit scoring or entry pricing. Second, highly attractive unit economics, each new customer generating around a 20% unlevered IRR over a 15-year lifetime. Third, robust growth, margin expansion and cash flow delivered quarter after quarter. Now Q2 underscores this on all 3 fronts. EBITDA per customer reached the highest level ever. Per customer profitability continues to grow. Portfolio Services adjusted EBITDA margin increased to 74.1%, and that represents the valuable recurring monthly contribution generated per customer. And attrition at 7.5% remains among the lowest across global consumer subscription businesses. Now, this is a business that has grown consistently through multiple cycles and the opportunity ahead remains compelling with category penetration still at only around 4% across our footprint. Turning to Slide 15. Let me provide a brief update on the Spain rebrand. We launched the Verisure brand in Spain in April, building on the Portugal launch in late 2025. Three months in, we see strong early proof points. We already have over 70% awareness for the Verisure brand and over 70% of digital marketing leads are now coming through the Verisure brand, both meaningfully ahead of our initial expectations. Beyond commercial channels, the rebrand is also strengthening our employer brand with traffic to our careers website from Spain more than doubling since April. Marketing investment in the rebrand remains on track with prior guidance and is fully included in our 2026 adjusted EBIT margin outlook of above 26%. The early response reinforces our confidence in the value of a unified Verisure brand across our European footprint. Let's turn to Slide 16. Here, we highlight 3 initiatives that reinforce our position for the future around growth, supply chain strategy and cost. First, on growth. As I indicated earlier, we completed the acquisition of a company called Kivala in France. Kivala provides a secure digital intercom solution for residential shared access buildings. Kivala extends the Verisure protection ecosystem. We protect customers on city streets with our Guardian service, at the building entrance with Kivala, at the front door with our very popular LockGuard product and inside the home through our AI-enabled alarm and camera platform. Standalone, Kivala is an attractive business with a profitable recurring revenue model and accretive unit economics. It also, though, creates an opportunity to increase our ability to address apartments within Kivala-protected buildings. This was an opportunistic technology-led acquisition with a modest committed investment of around EUR 6 million in 2026. Second, supply chain. We opened our new assembly facility in Brazil in the Manaus Free Trade Zone. Our supply chain strategy is focused on regionalization, shortening supply chains and bringing production closer to our end markets. This will also benefit working capital and unitary hardware costs over time. Third, on cost. Our Fit for Growth transformation program is delivering excellent benefits. The program is broad-based and areas and scope include lowering material costs, digital-first organizational design and AI-enabled sales and marketing efficiency. Now, we look forward to sharing examples of new initiatives regularly over the coming months. Now, taken together, these initiatives support both growth and margin expansion, demonstrating that at scale, we continue to identify structural improvements that reinforce the model. On the next slide, an important point on how we deliver for our service. We are a human-delivered AI-enhanced business. And AI lets our highly trained human experts act fast on what really matters. To bring this to life, in Q2, our systems processed approximately 24 million alarm triggers across our customer base. 9 million cases were verified by our highly trained security advisers. AI plays a key role here, supporting filtering, identifying high-risk events and routing those events to the most experienced teams within our 17 alarm receiving centers. This allows us to filter out 99.5% of false positives. Of the 24 million alarm triggers, we provided expert intervention in 104,000 incidents that required on-site assistance. These are the key moments of truth when Verisure intervenes to protect the family, a home or a business. Our intervention is what the customer pays for. And it illustrates how we're operating at scale. Cutting-edge AI engineered by our in-house technology teams deployed at scale, enabling our human experts to be more effective and more focused when it matters. Now AI doesn't replace our human service. It makes it consistently better. It's a genuine competitive advantage, especially given the size of our portfolio, the vertical integration in our technology stack and therefore, the size and the quality of the data set that we use. And we see this continuing to enhance the service that we provide to our customers. Now, with that, let me move to the key takeaways. First, a strong Q2 performance, robust growth, margin expansion and positive free cash flow. The business model continues to deliver as expected. Second, progressive shareholder returns. Following the declaration of our first interim dividend today, we see clear scope for additional shareholder returns beyond 2026 as free cash flow continues to accelerate. We're coming through the 2G/3G upgrade program, the Spain rebrand and continued reduction in the portfolio reinvestment rate. Once leverage settles at our medium-term target of 2.5x, we see a clear pathway to return further capital. And third, we reaffirm our 2026 guidance. ARR growth around 10%, adjusted EBIT margin above 26% and free cash flow positive. Verisure is defined by disciplined, choiceful growth and consistent execution. In Q2, we executed well, demonstrating the flexibility of our business model. We're delivering quality growth, margin expansion, cash generation and shareholder returns. And that's the inflection point we have been guiding towards. With that, I'll hand back to the operator, and Colin and I look forward to your questions.

[Operator Instructions] The next question comes from Annelies Vermeulen from Morgan Stanley.

Two questions then, please. Could we talk a little bit about the macro environment? The new installations perhaps a little slower this quarter, but ARPU and retention very robust. So how should we square that? And perhaps could you talk about the regional differences you're seeing within that? And then secondly, just on the free cash flow, which was better than expected. Could you unpack the moving parts within that where you delivered better performance? And given the usual seasonality around working capital, et cetera, would you expect Q3 and Q4 free cash flows to continue to build on the Q2 levels?

Annelies, nice to talk to you. Maybe I'll take the first question, right, on installations and the macro picture around. I mean we certainly see -- I think we're all looking at the same reports, a more choppy consumer backdrop. I mean it's, I would say, a bit worse in Latin America than Europe. But even in the European economies, there's uncertainty. And we know when we go through cycles like this, that it creates some headwind, right, on new installations, customers delaying decisions on big-ticket items until the situation becomes clearer. And I think against that backdrop, I was actually very pleased with the absolute volumes that we delivered in the quarter. I mean it was 219,000 new installations. I mean it's our third highest ever. And -- the -- I guess the important point is when that feeds into the portfolio, I mean, the book's up 9.4% year-on-year. So I think that level of portfolio growth on a business of our scale against a difficult economy, we were really, really pleased about. I will say as well that even if you look across the footprint, there are still places where we actually deliver standout growth. I mean I was very pleased, for example, I look at the U.K., I look at Italy, I look at Spain, right? And that's important for the future. I'm glad that you mentioned the attrition performance, the retention on the portfolio. That's the thing in the quarter, probably I'm most pleased with. I mean, attrition was stable at 7.5% despite a more difficult macro. I mean that portfolio is just rock solid, like high-quality, engaged, sticky. And there's a little bit of headwind on that attrition number for Mexico, I think 7 or 8 basis points. If you actually excluding Mexico, attrition was actually down in the quarter, right? So I think that maybe also moving to the question around ARPU development, too. I mean, the way I look at it, we delivered a strong volume intake. We managed to continue to price, right? I think that was very pleasing. And we held the portfolio rock solid. And I think the combination of those 3 things, we were pleased about. As I've said in previous calls as well, we could have sold more alarms in the quarter, right? If we've been prepared to compromise on the quality of the intake, and we don't, right? I mean we focus on very high quality standards, like, in that quarter because chasing some easy volume today is just tomorrow's attrition, it doesn't make sense. That's one of the reasons we don't guide on installs, right? We guide on ARR because ARR is a bit more than installs. It's about the portfolio size. It's about the attrition. It's about the ARPU that you can develop. And I mean, one of the reasons that we don't guide on install volumes, right, is that I don't want to create inside the company, like, pressure for people to chase like customers that we're going to regret bringing in.

Sure, well, why don't I pick up on cash, Annelies? Listen, thanks for the question. I think, look, cash was a real highlight of our Q2 delivery. I was very happy with the quality of the cash delivery in the quarter. It was our third successive quarter of cash generation. As a reminder on the numbers, we delivered EUR 56 million of positive free cash. That's actually EUR 120 million over the last 9 months. So it shows the consistency of that delivery over time. Let me unpack the Q2 delivery in a little bit more detail. And firstly, look, we had 2 cash headwinds in the quarter that are worth talking about, both of which are nonrecurring. First, the payment of an IPO bonus to all staff, which was EUR 18 million, that was paid in April. And second was refinancing costs mentioned in my remarks earlier on, which was a EUR 13 million cash out. So they came against us in Q2. Second, though, we were pleased with better working capital. You mentioned that. And I know that we've talked about this a lot together over the course of the past 12 months in the context of us moving through our cash inflection point. Q2 working capital was a cash outflow of EUR 8 million, making a working capital outflow of EUR 56 million in the first half, and that broadly equates to around 2.5% of sales. The outflow is lower than in Q2 2025, but I would treat 2025 very much as the outlier here. To share a little bit of color on what we're doing on working capital. Firstly, on inventory, we built up stock a little higher pre-summer than we had planned. So we're carrying around EUR 330 million of inventory, which is around 7 months of supply. Stocking up a little bit higher was a deliberate choice for us, and that was due to the global memory demand and price pressures that we're seeing. Over the medium term, we do see opportunity to sustainably step down inventory, particularly given that our assembly line is now open and operational in Brazil. Second, we worked across all markets to ensure that we're optimized across payables and receivables, areas such as recovering withholding taxes promptly, further good progress on getting cash in the door more quickly. We also kicked off a rebrand in the quarter in Spain, as I talked about earlier on, and that had the impact of increasing our trade payables balance. So therefore, I think I'd see cash delivery in the quarter as very well balanced, and as I said earlier, of high quality. In terms of guidance, I mean, as you know, we don't give cash guidance for the rest of the year. I do think that this is a positive point of progress on our journey on cash flow. And we see it as a way point in terms of those accelerating shareholder returns that I looked at -- that I talked about earlier on. Caveat here is that cash, as we know, will always be a bit choppier quarter-on-quarter than the P&L delivery, but we certainly see this as a good base for the rest of the year, i.e., the H1 number. Just before I close, I also just wanted to note that on cash flow, both of our discontinuous strategic programs, so 2G/3G sunset and the rebrand are at peak investment levels. So they will flip to become a cash tailwind in the medium term. And of course, cash, we've talked about it so much since the IPO. It's the ultimate proof point that the model is working. And as I say, we see ourselves at the very beginning of a really, really attractive journey on cash.

The next question comes from Joachim Gunell from DNB Carnegie.

So just a follow-up on the discussions on new installations. I know that you don't guide, but can you just provide some commentary here on what we see going on with regards to the fires in Southern Europe? In -- basically, in light of your large presence in this region, and if that could become an even greater headwind to new installations in Q3?

I think I'll take this. I think for us, the absolute first primary consideration is the safety of our employees and our customers. I mean that's where we've been focused. We're supporting our employees who have been affected, particularly by the outbreaks to the west of Madrid. We did have a number of employees affected there, right, who are being given paid leave. And our teams are continuing to assess their needs and provide support on a case-by-case basis so that we get their families, like, set up right and sort of moving on. And I think moments like this, your DNA is tested in terms of your care for your people and your care for your employees. If I look at Western France, sort of around Bordeaux, those fires and also what we saw in VaR down in the south of France, we don't have major operations centered there, right? And so the number of employees like impacted smaller, but we do continue to support them. We actually had 3 sales branches like in the affected area that we had to evacuate, right? And we'll obviously -- we'll return to activity there like when the situation normalizes. But obviously, just first priority is we don't make any compromises on the safety of our staff and our customers. I mean around that, initial evacuation here in Bordeaux, I think we had about 7,000 customers in our portfolio, right? And we're obviously in touch with all of them to make sure that we can help. I think when you add it all up, I don't see that adding up to be like a material topic around installations, okay? But it's clearly from a humanitarian perspective, that's a strong concern for us.

Understood. And on the rebrand that is progressing according to plan, both in Portugal and Spain, you commented on that the investments here are tracking in line, and is embedded into the guidance. But just for Q3, the seasonal pattern on margin progression, is, call it, a step-up in Spain investments on the rebrand side something that could pose a threat to the seasonal margin expansion into Q3 versus Q2?

I think we guided before that the investment in Q3 would be similar to Q2.

Yes, that's right. I mean, Joachim, it's Colin. We talked last time around about a EUR 25 million media investment over the course of the year. As we've talked today, EUR 10 million of that was made in the second quarter. I expect Q3 to be similar to Q2 with potentially a slightly lower level of investment in the fourth quarter. I think stepping back, importantly, in terms of EBIT, as we said on the call earlier, we're pleased with where we're at both year-to-date and in the quarter. Margins are at 26.7%. The rebrand at those levels was fully included in the outlook that we shared for the year. And before anyone asks if we're reguiding on EBIT, I think the answer to that one very much is not yet. I think I would like to come back at the Q3s and share more specific updates on how the year-end '26 outlook.

I mean commenting just a little bit more on the rebrand. I mean, I'm delighted with the quality of the execution in Spain. Just really proud of the Spanish team, right? I mean it's been a full-court press across the whole organization, marketing, sales, operations, talent. And although I'm not guiding to upside, I mean, it's going faster than we anticipated, faster than we expected. And some people thought about these rebrands as being like a risk or a cost. And I always viewed it as an investment, right? And I really look forward to having unification and control of our brand right across Europe.

The next question comes from Suhasini Varanasi from Goldman Sachs.