Dufry AG (DUFRY) Q2 2023 Earnings Call Transcript

Dufry AG (OTCPK:DUFRY) Q2 2023 Results Conference Call August 4, 2023 8:30 AM ET

Company Participants

Xavier Rossinyol - CEO

Yves Gerster - CFO

Conference Call Participants

Gian-Marco Werro - ZKB

Jon Cox - Kepler Cheuvreux

Harry Gowers - JPMorgan

Ali Naqvi - HSBC

Manjari Dhar - RBC Capital Markets

Jaafar Mestari - BNP Paribas Exane

Russell Filipski - Callaway Capital

Olivier Calvet - Credit Suisse

Operator

Ladies and gentlemen, welcome to the Dufry's Half Year Results 2023 Conference Call and Live Webcast. I am Alice, the Chorus Call operator. [Operator Instructions]

At this time, it's my pleasure to hand over to Mr. Xavier Rossinyol, CEO of Dufry.

Xavier Rossinyol

Good afternoon, good morning, good evening, everybody. Welcome to the first half year 2023 Dufry presentation results. I'm here with Yves Gerster, our CFO. We are going to use the presentation that we are going to project and it's also on our website. I'm very happy to present good results for the first half 2023, but I'm even more happy to do it as one single Group. We have fully completed the combination with Autogrill, and we are very looking forward to this working together.

I'm going to start straight in Page 5. I'm going to start with some initial messages. We have explained Destination '27 strategy many times, but I'll keep doing it, because our long-term strategy needs to be consistent over multiple years. The 4 pillars of the strategy, as it is well known, is, number 1, refocusing the company on the traveler, on the consumer. And doing that on the physical store and restaurant also digitally, and more importantly, combining F&B, Duty Free and Duty Pay. It's one single consumer with one single dwell time. And now as a combined Group, we can address them in all their needs and in all their wishes.

number 2, a very dedicated geographical strategy. We want to keep growing on our core markets and also develop the markets where we are less strong.

number 3, very strong focus on operational excellence and operational performance. And I think these results we are seeing today show that we can, at the same time, to take better care of the consumer and increase sales, but doing that in a very disciplined manner on the cost side.

And number 4, having the ESG as one of our 4 core pillars, making it tangible on the day-to-day.

But apart from a long-term strategy, a company needs very clear short-term priorities. And those are the ones that are in this slide. number 1, keep focusing on the daily performance. And for us, the key performance indicators of that is the spend per head, what we can achieve on top of the delivery of passenger growth, our margin improvements and our free cash flow generation, all of them with very [Audio Gap] on this first half of the year.

Second, the integration. It's very important that we get this combination and this integration done. And we are advancing even ahead of the initial plan on the generation of the synergies. But equally important, we are already working as one team, one Group. And thanks to that, we're start seeing, as I'm going to explain later on, some example of combining F&B and retail in real world.

Number 3, disciplined business development. We all know we need the spaces to sell at the airport, at the motorways, at the training station. But we are convinced that the future is investing in the business, investing in generating higher sales through a better retail, much more [Audio Gap] to the landlords. So our disciplined approach to business development, and we have already proven that in the last few months, it remains intact.

Fourth, continuing on the digital and customer revolution. We believe that on the long-term, the only way forward is to do better job in understanding and satisfying the needs and wishes of our consumers, and I will have also an update on that later on.

And last but definitely not least, this focus on ESG that we want not to be something nice we say, but something that affects the daily life of our people, of our customers and our landlords and the communities in which we all are. And at the end of the day, as we all know, it's not only about having a long-term strategy, clear priorities, but it's about executing it on a daily basis. That's why I put execution 3 times because that has to be the priority of the company.

If we go to the next page, we can see some of the key figures for the first half. Yves is going to explain that in detail later on, but only some flashes. CHF 5.7 billion of revenues, which is a 31.5% growth versus last year organically. Those are combined numbers. All the numbers I'm going to mention include for this year the 2 companies, Dufry and Autogrill, Dufry 6 months, Autogrill 5. And everything for prior years is pro forma for the combined entity.

July keeps trading clearly above 2022, 17%. Of course, the comparables become more and more difficult across the year. But still even taking that into consideration, the activity remains very strong. And we see with our landlord partners, a very strong summer to come. Core EBITDA, CHF 492 million, 8.6% EBITDA margin, ahead of the consensus and ahead of our own expectations. I think what we have achieved is something you always try, but you can guarantee that is the increased sales do not automatically reflect of the same manner on the increase of the cost. We have been able to keep a reasonable optimization of the cost basis. And a very strong free cash flow conversion with CHF 165 million of free cash flow on the first half of the year with a conversion of 34%.

As Yves is going to explain, we are still catching up on the CapEx delivery. So there will be some CapEx that was initially anticipated for the first half in the second half. But even taking that into consideration, the performance have been stronger than initially expected. The teams across the board have done a great job in managing all the key elements of the P&L and the cash flow. And thanks to that and thanks to the merger, our net debt, it is decreasing extremely fast and our leverage level is in a record low, as Yves is going to explain later on. And that is also reflected on the rating agency's consideration.

If we go now to next page, Page 7, we can see the performance of the quarter 1, quarter 2 [Audio Gap] Of course, the comparables on the first quarter were easier than in the second quarter, but you can see that the growth is extremely healthy. And as I said, for July, it's again 17% when last year summer was already pretty strong. So the numbers are strong and all the indications we have for the summer, both on passengers and consumption, remain on a healthy side.

If we go now a little bit on the key regions page, next page, I think what is remarkable is that the good performance is across the Board. Right now, all the regions with the exception of Asia Pacific, are ahead in sales of 2019 revenues and have been like that for the last 5 months. Only January and February were below 2019, but from March to July, we are ahead of 2019 in all the regions except Asia Pacific for the reasons we know. But even Asia Pacific is recovering, as we are going to see in a minute, very fast.

EMEA keeps having an extraordinary performance in the leisure destination, mostly at the South of Europe. In certain key locations in Europe, we are still missing some of the Asian passengers and the Chinese passengers. But overall, the region is performing very well and also very healthy business development. North America, again, very strong across the Board, both F&B and Retail only below 2019 numbers. Canada, which is in some locations more -- relying more with Asian and Chinese passengers. But on a consolidated manner, again, 22% growth versus 2022, and as I said, ahead of 2019 numbers on the same currency of reporting.

If we go to the next page, similar in Latin America, very strong performance in Argentina, Mexico, across the Caribbean recovering, Brazil also getting to better numbers, also some healthy wins. And Latin America, as you know, the region where we will explore the F&B that is not present yet. Asia Pacific, extraordinary recovery. Still missing significant passengers, but 168% growth versus last year. Again, some interesting business development, including one airport Duty Paid in Mainland China, the airport of Chongqing.

If we go to the next page, we are getting news that in these calls whatever you report, people immediately ask what is next. So we decided to give some figures before the questions. This page is probably well known, but it's just to send 2 messages. Recovery on the traffic of course depends on the different scenarios, we show here a graphic of ACI. But it's consensual that we will have pre-COVID number of passengers next year. And in some forecast, we are getting very close even to the trends we had pre-COVID.

If we look at the graphics historically, 10 years, 20 years, 50 years, we see that the traffic goes up and down, but always on increasing trend on long period of times. And that's what we can see on the long-term ACI forecast. It's expected that traffic will almost double again over the next 20 years. And that has been consistently what we saw. Of course, the travel industry and the number of passengers is not fully hedged against economical cycles, but history proves that is less volatile. Because of the type of people that travel, the income they have, passengers adapt less to the economical cycle than high history. And that's a little bit what we are seeing. Despite the high inflation, despite having record high travel costs, people not only travels, but also consumes in a very healthy way.

If we go to the next page, we included some of the potential supportive impacts we see and some of the potential challenges. I'll start with the challenges because then I can finish with a positive. Some of the challenges are well known, are external challenges, are macro economic challenges, recession, slowdowns, inflation, political challenges. But as I said, they are less of an impact in the travel industry historically than in other general economy. We keep vigilant because in case things slow down a little bit, we are going to be ready on the cost side.

But I want to be clear, and sometimes I receive this question many times, but you are not seeing a slowdown. No, we are not seeing a slowdown. The summer will be strong. We cannot of course claim we are fully hedged on economical cycles. If the general economy worsens, of course, it might have an impact. But also, we need to remember one thing, our geographical presence. And I think being in 75 countries with more than 5,500 points of sale shows historically that we cope with regional shocks better than some of our competitors that have a more limited geographical scope.

Every week, I start with something I didn't expect. But equally, every week, we have something positive we didn't expect. And this balance sometimes I think is underestimated, and now more than ever because we have the consolidation of the activities of Retail and F&B. And we are even more resilient because F&B consumption is a little bit more resilient at airports, that is because of convenience, than some other aspects of our business. Of course, anything that pushes our cost up is also a potential risk. But we have had high inflation for quite a few months now. And our numbers on the first half show we've been able to either cope and maintain those costs where they need to be or reflect them on our [Audio Gap] our profitability has increased despite all this pressure on an energy costs, on labor costs, et cetera.

Of course, on the positive side, we have more of some missing traffic. Still Chinese, even if it's in low numbers, will only grow. Some emerging markets, India to mention one, are more and more seen as a driving force going forward. So volumes could be enhanced by some people still not traveling. Business traveling is recovering, but could also keep growing because it's still not at the levels it used to be. So there are some underlying tailwinds on the number of passengers and the potential profile consumption of those passengers. And of course, we will have challenges and opportunities on the synergy side on the combination.

As we're going to tell later on in more detail, we are now after 6 months of active managing of the integration, absolutely convinced that we will not only generate the CHF 85 million cost synergies we anticipated, but we will do that earlier. The CHF 85 million will already be fully in 2024. And also, we -- once we have done the full detailed analysis, we believe now that the integration cost will be around CHF 50 million, CHF 25 million this year, CHF 25 million next year. And with that, we will be able to generate the CHF 85 million synergies. And the reason is because part of these synergies come from procurement. And when it comes from procurement, the upfront costs are very limited or maybe none. You really only need to put restructuring costs, integration costs when you do a labor restructuring. Part of these synergies are going to be seen this year, we said around CHF 30 million, and the remaining next year. But now we have it mapped and we are convinced that we'll be there.

Because of all that -- and if we go to the next slide, I just covered the synergies. But because of the synergies, because of the current trading and even if we remain vigilant and we keep looking at the productivity of our people, we keep looking at labor costs, energy cost, we keep looking at potential slowdown on consumption. But even with all that, our best estimate is that we will be able to finish the year better than expected. And we have said that our EBITDA margin should be 30 to 40 basis points better than initially anticipated. And also, we are giving more granularity both on the synergies and the integration cost. I have to be very clear, that has been a demand of the analyst community. And we are hopefully being much clearer today on that. So I remain very committed not only to do a good integration, but to deliver it in actual numbers and soon.

If we go to the next page, so that was financial performance, integration. The third topic I had in my first slide, business development. And this is just one example that we are particularly happy about it because of its size. We have renewed all the contracts [Audio Gap] around 95% of the business we used to have for 12 years. But more importantly, with 30% more square meters and with additional product categories that we used to sell 10 years ago, 7 years ago and that they were for contractual reason out of the existing scope, but they come back. With that, we believe, as we disclosed, that this contract will be not only meaningful, but accretive in profitability and cash flow on the duration of the contract. Spain remains a strategic market for us, but not for any other reason than it's a good business.

If we go to next page, that's the fourth pillar of our priorities is delivering on [Audio Gap] consumer and digital revolution. We are more than ever focusing on consumer needs. You have here some flashes. I could fill 1,000 pictures on the business analytics and the consumer analytics we have. But it's just to show that, one, we understand the consumer trends; and second, equally or more important, we adapt our offering to those consumer trends. And that could be very small things like having better inventory management and having the right product at the right place at the right time for the right profile of consumers, having the right pricing, going all the way to making absolutely revolutionary business concepts, retail concepts, food and beverage concepts.

If we go to the next page, you see here some pictures of actual realities. We are already deploying some hybrid concepts, Hudson Cafe. And in some cases, that Hudson Cafe might be branded with some of our retail brands. We will disclose that in due time. We have done that in Arlanda and we have a very clear path on opening a specific hybrid concepts across the Board and they are scheduled on specific locations, specific timing.

We are also seeing more and more interest by airports on developing combined concepts, and Spain is one case. Spain allows F&B outlets inside the Duty Free stores. And that's going to happen in Barcelona, in Madrid, in Palma de Mallorca. And the reason is because it makes sense. It's the same dwell time the [Audio Gap] customer, therefore, the sales, and therefore, also the concession fee for the airport.

We are also doing new targeted shops or shops-in-shops, from Men's Grooming, Haute Parfumerie. And again, what is Haute Parfumerie, to give an example? We have -- this is a real example of several shops we have in several airports. It's putting together the most premium cosmetic and perfume brands in one single space because there is a type of consumer that is looking for items that might be 3x the average price in P&C. Mind. body. soul. is also another concept that is already implemented that targets younger audience more worried about health and sustainability. And I'll keep in future calls give more and more examples. Of course, my target is not to have nice PowerPoint pictures. Our target is that you see it at the airports, and more importantly, as I always say, you spend a lot of money buying on those shops and on those restaurants.

If we go to the next page, also Digital and Phygital, as they say, that it's a combination of physical and digital. We have Fragrance Finders, that is a new way to interact with looking for new perfumes in a much more smart entertaining way, increases spend per head. Virtual make-up, the same thing. You try on the make-up and then also your experience improves, also consumption tend to increase. The smarter stores already deployed in 6 stores, as we said. We are now better than ever in understanding how people behave in our stores, buying or not buying, because as we said in the past, we worry and we focus on our consumers and our customers, but we also try to understand why the non-customers are non-customers and we can bring them into the stores.

If we go to the next one, Fun & Gamification. We do believe that there is a big opportunity, especially on certain demographics of making our shops more entertaining. And again, all these pictures are not mock-ups, they are real things that could go from -- and a lot of that we do it with our brands that could come from you jump into a virtual motorbike or you game or you see pricing, lotteries, et cetera. What all that does is to increase the penetration, to increase the footfall, and at the end of the day, to increase the chances to have higher consumption. Again, all real cases. So also on this pillar, we are deploying and we are doing better than ever a good job on bringing spend per head up.

If we go to the next page, and with that, I will finish my section, is ESG. ESG on protecting the environment, on our people, on our partners and community and in our governance. But I think we have now at the Group Executive Committee, at the Senior Management, a dedicated person on ESG that is driving this. And the target is to make it tangible for all our people and for all our communities. We are in [Audio Gap] 100 locations in the world. And in all those locations, we play a key role on those communities, at airport, at motorway, at train station. And we want to be active and seen actually improving the reality of those communities. So we remain absolutely engaged and committed to ESG, but to make it tangible and real.

I'll come back in a few minutes for a final conclusion. But now, Yves will explain the results in detail. Thank you.

Yves Gerster

Thank you very much, Xavier, and good afternoon to everybody on the line.

Let me start directly with the top-line, with the turnover. We have seen a turnover of CHF 5.7 billion, which represents a organic growth of 31.5%. Our business is very well diversified, as you can see on the slide. Let's look at a few of those aspects in more details.

Looking at the geographical split, around 50% of our revenue have been generated by EMEA, with North America contributing to 32%, LatAm by 14% and APAC by 5%. The different business lines contribute evenly to the results, as you can see on the bottom left chart. On the top right, airports remain our core channel. It's by far the biggest channel with a contribution of 82%, net sales followed by the several other channels we have. We have a well-balanced category mix, now including also food and beverage coming from Autogrill in addition to the Dufry exposure we already had.

Moving on to the next slide with the P&L. As you know, this is the first time that we report the full P&L and cash flow statement as well as the balance sheet combined together with Autogrill. It is important to remind you that the 2 heritage companies showed very different P&Ls and cash flow statements in regard [Audio Gap] this is something which is important to keep in mind when we go through the details of the P&L and also the cash flow in a minute.

Looking at the detailed P&L. We saw very strong cash flow turnover, as already mentioned. Gross profit margin came in at 64.4%. This is supported by the continued strong demand on one hand side by the travelers as well as active and improved commercial management. Core EBITDA came in at CHF 492 million or 8.6% of turnover. I'm really pleased with the results, as an amount, as well as a percentage over turnover.

There are certain factors to be mentioned. We achieved a very solid gross profit margin, as mentioned before. Secondly, our personnel expenses reflect a number of results of our continued cost control initiatives on the one hand side, but also some further hiring to be expected in the second half, also related to seasonality. Thirdly, integration costs will come in, in the second half of this year. Depreciation and amortization is now lower due to impairments done and slightly below usual levels due to the lower CapEx we have seen in recent years. With no specific remarks on the financial results, income tax and NCI, let me [Audio Gap] equity holders, which amounts in total to CHF 124 million.

Moving on to the next slide with the cash flow statement. Equity free cash flow came in at CHF 165 million. There are no surprises on the cash flow statement. I just want to point out 2 topics here. number 1, CapEx was influenced by some phasing of projects. We have indicated for the full year for around 4% of CapEx over revenue. And as you can imagine, this is typically not spread evenly between the 2 different halves. The reported CapEx of CHF 184 million reflect only 3.2% of turnover.

Secondly, the decrease of net debt is around CHF 5 million. The difference between the equity free cash flow and the change in net debt is mainly related to the combination with Autogrill. We have spent around CHF 29 million on transaction costs and around CHF 116 million for the acquisition. And this amount includes, on one hand side, the net debt of Autogrill at the beginning of when we combined the Group; and on the other hand, the relatively small amount of cash proceeds from the MTO.

Moving on to the next slide. Net debt, as Xavier mentioned at the beginning, stood at a record low of CHF 2.8 billion. This reflects once more the lowest level since 2015. Again, you need to take into account what I've just mentioned before when discussing the cash flow. The change in net debt also includes the net debt of Autogrill as well as the cash proceeds from the MTO.

Moving on to the next slide with the financial covenants. The Group shows significant deleveraging over the last quarters, reaching now a level of 2.6x. This is supported by the combination with Autogrill on one hand side and also the good financial performance of the Group on the other side.

Moving [Audio Gap] on to the next slide with the maturity profile. The company has a very well structured debt profile in respect to product mix on one hand side, but also maturity profile as well as the exposure to fluctuation of the interest rates. Currently, around 76% of our debt is based on fixed rate coupons and only around 25% of variable interest exposure. During the half year, we have further increased our EFCF in 2 steps. This is simply by onboarding the Autogrill lenders and to provide additional flexibility for the Group. With that, the total facility amounts now to CHF 2.6 billion, of which only CHF 800 million is currently used.

Moving on to the next slide. We are very pleased to have received upgrades by the 2 rating agencies over the last quarter. Moody's has upgraded us by 1 notch and S&P Global Rating by even 2 notches. This reflects the good position of the [Audio Gap] position we are in and we are extremely pleased with that development.

Moving on to the next slide. Just a quick word on the mandatory takeover offer. We have entirely completed the Autogrill transaction, including the MTO process. And since the end of July, as you know, Autogrill is delisted subsequently to the completion of the MTO process. We understand from the market that the transaction has been perceived as complex in certain aspects, but we have executed it exactly according to the timeline and also as planned.

With having said that, let me hand over back to Xavier.

Xavier Rossinyol

Thank you very much. If we go to the next page, it's the conclusion. But the conclusion is in one word is, execution. We are delivering in everything where we put our priorities. We are delivering on the financial results, both on revenues and cost, also cash generation. We are delivering on the integration even ahead of time. We are delivering step-by-step on redefining our industry with the travel experience and digital revolution. And we are also delivering in the integration.

With that, we will go to Q&A. But first, we will have a small -- you know we love videos, because we think that it's a way to summarize visually and strongly the way not only we think, but also we communicate. These are small examples, but we apply the same philosophy on the way we communicate to consumers, the way we communicate to landlords. We not only have to be different from the rest of the industry. We also have to make sure people feels that difference. [Audio Gap] now and we'll come back in 1.5 minutes for the Q&A. Video on, please.

[Presentation]

Thank you very much. Now we can go to Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Gian-Marco Werro with ZKB.

Gian-Marco Werro

Congrats to the strong profitability increases. So 3 questions from my side, please. The first one is on your personnel costs. They're one of my, let's say, where is this wage inflation? Can you give us a bit -- some details about what you see currently in relation to wage inflation from a temporary staffing and also perm staffing, especially for the second half of the year?

Then what was just catching my interest is, in your P&L, you have other income also of CHF 80 million. And can you maybe elaborate a bit how this supported your EBITDA? And how we have to understand this, especially, on a full year basis? What is the run rate we need to consider here as other income as this is something pretty new to us?

And then just a third question on your joint venture in Hainan with Alibaba. I mean, I expect that this must boom at the moment, if I look at the Chinese politics and the Chinese tourism within China. But if I look at your financial income from associates, I can see only around CHF 2 million profit being considered here. And I mean, I know you have only 49% in this joint venture, but you're operating around 39,000 square meters there. So can you explain why this share of profit is only so small?

Xavier Rossinyol

So I'll take 2, Yves will take 1. On the personnel cost, look, of course, we are seeing pressure on the inflationary cost of the people. And we are coping with that on one side on productivity, using for example, QR codes for the ordering or self-checkout. But on top of that, our focus is on how we can get the personnel cost as a percentage of sales at a reasonable level. And that is what we have been able to do. So yes, we have cost pressure, but up to now, we've been able to reflect that properly on ourselves and we expect to continue doing so.

On Alibaba, yes, we have a joint venture with them, but we have a joint venture to manage the activity, not directly into the activity, because in China, you cannot even be on a minority stake on an operator of duty-free license. You can only advise and supply. That's why the amount you see on the consolidation numbers is so small. But the real value of the strategic collaboration with Alibaba is not only what we do together in China is they are our digital partner for the Chinese traveler also outside China. And we are going to see that step-by-step when the Chinese traveler becomes again another significant force in particularly in Asia and across the globe, because we will have a better understanding than ever before on that passenger and we will be able to do a better job on serving them.

Yves Gerster

On the other income, this is mainly coming from heritage Autogrill and is related to services we are providing mainly in the U.S. as a service to airlines/landlords or concession partners, which do not reflect direct sales, and therefore, they are not considered in the turnover of the revenue, but it's a service-related business, which we are providing there to our partner.

Gian-Marco Werro

And then the normal annual -- so the normal annual run rate is around CHF 150 million or CHF 160 million then that we should consider on an annual basis?

Yves Gerster

No, I wouldn't consider that, no. No, it's less than that.

Gian-Marco Werro

Okay. And just on the joint venture with Alibaba -- sorry, it's a quick follow-up here. So as you are only managing those activities there, this is also something we should now consider like your management fees for those operations. So in the end, we should not expect more than CHF 5 million on an annual basis as a profit from this partnership despite of course digital investments and also actions that you take together with Alibaba?

Xavier Rossinyol

Well, I will take a slightly different approach. So on one single contract is what it is, and that cannot change materially until the Chinese legislation changes. But on the digital, of course, you’re not going to see it as a fee. You’re going to see it as additional sales when the Chinese travel. So the value will be there, but of course, it will be through sales and margins, not through a specific fee line. I don’t know, that’s the way I look at it.

Operator

The next question comes from the line of Jon Cox with Kepler Cheuvreux.

Jon Cox

A couple of questions on my side. First one, just on the sort of lack of increased guidance on your sort of organic sales growth for the year. Clearly, you're running at 30% or so in the first several months of the year. What are we missing? You seem to be implying that you're actually going to see an organic sales decline with that existing guidance of 7% to 10%, even though I know it's for the Group as a whole. That's my first question.

Second question, you're around 2.6x net debt to EBITDA. You're probably going to be a couple of notches lower by the end of the year. There's nothing in the release today about maybe a commitment to starting a dividend again or thinking about a buyback given the sort of like quite a heavy dilution for shareholders as a result of all of the transactions through COVID and then most recently with Autogrill. And just as an aside, potentially, this is why the stock is not reacting as well as some of us may have assumed with the good print you had.

And then just a question on the sort of hybrid concept. Just wonder if you can give us any sort of indication of the uplift you're seeing? I know it's very early in some of these stores. If you put a cafe bar corner into a Hudson new store, can you give us an idea of any uplift there? And then maybe as an add to that, you talk a lot about spend per passenger and what you want to do there. It would be very useful for us to know how that is increasing. And I wonder if you can give any indication on that? You seem to be saying for the last year or so, spend per passenger is up, even though maybe back a year ago we went back to 2019. Just wondering if that trend is still intact. Can you give us any percentage at all that would also be pretty helpful?

Xavier Rossinyol

Look, it's not that you're missing anything. I mean, but the comparables are different. People tend to forget now, but we still had some Omicron at the beginning of 2022. So January, February, March, the comparables were very easy. Second quarter, a little bit more challenging. Third quarter, a little bit more. And the last quarter, last year, was surprisingly good. And everybody was very surprised that we were in the last quarter of '22, very close to [Audio Gap]

So the comparables, just because of that, the growth will be lower than what we have seen in the first half. But we still expect to see growth versus '22 in quarter 3 and in quarter 4. Giving outlooks or forecast is always challenging because it depends on so many things that we are taking a position, which might be correct or incorrect. We give some indication. You will do your own indication. But we expect to have a good summer, and last quarter also a little bit better than last year.

On the potential dividend, as we answered in the past, this is a decision of the Board of Directors to recommend the general assembly and the Board will discuss that later on. They believe, and I totally agree with them, it's too early to start discussing this because we need to see how the year progresses. But the Board is very reasonable. And they know that if the leverage is where we expect to be, in order to have proper capital allocation, the shareholders will [Audio Gap] accordingly. So we have no specifics. But clearly, in due time, the things that need to happen will happen.

On the hybrid, as you said, a specific uplift giving specific numbers is a bit too early because we are developing them. But it's not only the potential uplift you have compared to if you put a Hudson -- converting the Hudson Cafe. Of course, the sales increase very materially, but it's also something that sometimes we miss is the optimization of the space because we are not doing there where we can, we do it where we think it needs. So now having the 2 businesses in certain airports, we can say, look, we need more space for coffee because the current outlets are already saturated. And then the uplift could be very material. In other places, it could be more limited. But in no case, what we see is a drop on sales. So in all the cases, it's additional sales.

On the spend per head, look, we monitor the spend per head on a monthly basis. Why we don't disclose consolidated numbers because consolidated numbers mean nothing. And I'm going to give a few examples. What you need to do is to monitor spend per head in a bunch of different categories, which include profile of customers, the typical one is nationality, but it's not the only one; long-haul, short-haul because that changes; point-to-point or transfer passengers because that also changes. If there are things like a change in legislation where duty paid sales become duty-free sales, an event like Brexit, that helps.

So all those affect the consolidated weighted average spend per head. But what I can confirm that with a few exceptions that we are monitoring, we see increase in spend per head versus '22 and versus 2019 in all the relevant categories I just mentioned. Percentage vary a lot, vary single to double-digit. But that depends on our ability to manage those sales and also of course other aspects.

I think that's the right answer because if I give you a consolidated number that is affected by all these moving parts, it might mean nothing. But on this detailed monitoring, we are doing better. But it's even more important than other things. We monitor it. So when we don't do better for whatever reason, we have the team taking a look in why is that happening and trying to work because we are never 100% perfect.

The importance is, when you are not perfect, when you're doing something that is not the right thing, you correct that. And that's why we have created a way of working for which this becomes an essential part of our day-to-day. We are putting a much more closer monitoring to the stores on a local basis. Now our speed of reaction on assortment, on promotions, on pricing is faster than it used to be. And the reason is because we have put a new governance and a new structure that facilitates a quick reaction. Thank you for all your questions.

Jon Cox

I want to just come back with a couple of follow-ups. Just on the -- in terms of top-line -- I'm sorry to push you on this, but 7% to 10%, 17% in July, you're talking about a strong summer. Q3 is your strongest quarter typically and you're saying Q4 is going to be up. It's not hard to extrapolate a 20% organic sales growth from those sort of comments. That's the first one.

The second one is just on the -- what you were saying about the -- where we are in terms of net debt to EBITDA, et cetera, and the Board recognized this and will act. Just wondering what sort of target sort of net debt EBITDA ratio are you guys looking for? Because you wanted to get below 3. You're already -- you're miles ahead of your plan. This is the point I'm trying to get to. Should we think anything below 3 you'll start to try and leverage a bit more with dividends or buybacks or whatever it might be or is it 2.5? What are your thoughts on that? Maybe that's a question for Yves, but I don't know.

Xavier Rossinyol

On the sales -- don’t worry, I don’t feel pushed. I know all of you need to do your job. Look, the only thing I would point it out is, October, November, December last year were particularly strong. So the uplift on the last quarter will be reasonably – of course, I hope it’s much better, but reasonably, the upside on the last quarter is much more limited than in the rest of the year. September was also particularly strong last year.

And let’s remember one thing, across Europe, you had material issues across several airports. And one thing we believe it could be that September and October last year where it’s particularly strong because of the disturbances in July, August. Nobody can guarantee that because maybe September and October this year is again once more a longer summer season than we used to have. But I’d like to see it twice before I make it a rule. So that’s why maybe I’m more on the cautious side. I’d rather deliver a good summer than expect a good summer. So the year will be good. The remaining of the year will be good. I will encourage you, you do your own numbers. Summer will be good. Last quarter will be good, but of course, with less growth compared to 2022.

On the dividend, Yves can answer. But up to now, the Board is a topic, it’s analyzing. They want to see how the summer goes and then take a decision on the policy. Let me not be more precise now, but you will have news. And you would like the news, but in due time. I cannot publicly discuss what the Board has not decided yet. They need to take a decision. But they know that is something they need to come up with a clear indication, but they want to wait a few months. And I have to say, I also prefer it.

It's a very interesting conversation with you, the analyst community and the investors. A year ago or 14 months ago when I joined, the question was high leverage. What are you going to do? What are the risks of the companies? And all of a sudden now, everybody wants dividends – or not everybody, you want dividends or you’re asking about dividends and share buyback. I think we want to prove that we keep delivering good cash flow and good deleverage and then we will – the Board will address the dividend topic. I think I’m being very clear and you understand what I’m saying, let’s keep it like that.

Operator

The next question comes from the line of Harry Gowers with JPMorgan.

Harry Gowers

The first question was on the EBITDA margin. So you've just done 8% margin in H1. I mean, what's stopping you from potentially doing another 8.6% margin in H2? Would it be possible to get to that level if all the stars align? And then just on the cash conversion, the upgrade to guidance. I mean, should we see that mainly as a one-off benefit this year or more mid-term actually, because your mid-term guidance potentially be upgraded to 35% or 40% on the cash conversion?

Yves Gerster

So look, on the first one, I have mentioned it earlier, the EBITDA margin we have seen in the first half of the year was fantastic. And as Xavier has mentioned, better than what we have expected and better what the market has expected.

Now for the second half of the year, we have a number of elements which are to taken – to be taken into consideration, and I’ve mentioned them. One is the personnel expenses. So we are still catching up with the hiring and there might be some seasonality effects there, which may result in a little bit of pressure. number 2 are the integration costs, which I have mentioned, which are also affecting and mainly coming into the second half of the year. And number 3, we have seen some benefits in the first half of the year with very good performance in some of the concessions or some of the locations which have a relatively low concession fee. So depending if that continues or depending on where the mix effect will be in the second half of the year, this may also change a little bit. And with that, we come up with our updated outlook, which Xavier has mentioned before.

On the equity free cash flow conversion, so look, there, we have provided an outlook for this year, Xavier has mentioned it, and we cannot provide any further information for the outer years. And for the next years, ‘24, ‘25, ‘26, what still remains valid is what we have mentioned previously. We still feel comfortable with that, but there is no news in that regard from that side.

Operator

The next question comes from the line of Ali Naqvi with HSBC.

Ali Naqvi

Just 3 for myself. There's been a bit of talk from the U.S. airlines and hoteliers about the composition of traffic going from domestic to more international based. Are you seeing any either weakness or strength just depending on where your locations are? Secondly, on the AENA contract, could you just explain the differences with the contract pre and post the tender? Is it going to be margin accretive from the point your new contract term starts? And when is that? And then third question, you had some concession growth this year. How do you expect that -- sorry, this half. How do you expect that to develop into the second half? And where is the priority for this going forward? I know you're not necessarily targeting to rate this growth, but any guidance would be appreciated.

Xavier Rossinyol

Yes, we are seeing a lot of North American, U.S., in particular, in Europe. And again, it shows a very particular feature of Dufry that sometimes is not properly factored in, which is we are not only in many locations, but we also cover many consumers. So Europe is performing super strongly because we have more Americans and less Chinese. And that’s something people sometimes forget. We consistently, over the years, we show that we cope with more and more individual risk because of our geographical exposure. And now with Autogrill, it’s even more true.

Look, on the AENA, like in any other contract, we cannot disclose specific. We are even legally forbidden. The landlord can publish, we cannot, is the rules of the game. What I can tell you is the contract in Spain is going to be accretive in EBITDA and accretive in cash flow. It’s 12 years contract. Of course, we have to do some investments during ‘24 and ‘25 to bring the store [Audio Gap] on the new category. So it’s a transition period, but it’s an accretive contract.

We will not give specifics on semesters or quarters on business development because this is not the way it works. The cycles are longer than that. We said in the past, we expect on the mid and long-term that new concessions are slightly positive. But we may know secret that a few more concessions or a few less concessions, if they do not bring the right profitability, we are not interested. We’ll keep a massive discipline in making sure that any concession we had, at least we expect t’ be accretive.

This year, this first half of the year, we had more concessions because there were more tenders. In the second quarter, there might be more or less. Summer, normally, you don’t have a lot of tenders because people is busy on the high season. Every year changes depending on the portfolio. We have today more than 2,000 concessions around the globe, which also makes us more resilient than ever before. I think the largest single concession today, the largest single contract because even Spain is 5 contracts is less than 2%, 3%. So we are also not dependent on any specific concession, which I think it’s also a very good message from a resilience point of view.

Operator

The next question comes from the line of Dhar Manjari with RBC.

Manjari Dhar

I just have two, if I may. My first question was on the July trading figure. I wondered if you could give any more color on how trends have evolved in July by region or by channel? And then my second question was on the U.S. and given the high level of investment we're seeing into U.S. airports. I just wondered how you view the opportunity in the U.S.? And perhaps, how you see the pipeline for potential tender contracts there?

Xavier Rossinyol

July is very similar to what we saw in May and June. It’s across the Board, growth everywhere. The year-to-date numbers is a reflection. Of course, the ones that have the highest base already in 2022, they are growing a little bit less. So Asia is the one growing more in relative terms, but we see healthy growth across all the geographies. Yes, we see the investment in the U.S. airports as a very interesting opportunity for us.

Remember that the 2 most important segments in the U.S. is F&B, number 1; number 2, convenience; number 3, duty-free. So thanks to the combination with Autogrill, now we can address these 3 segments, but we can address very materially the 2 main segments. So we remain very bullish about the opportunities in the U.S. Good news is we have already combined the teams. So they are working already together. They are learning from each other. They are working on the hybrid concept.

So I think it’s a very, very, very big and very resilient market and it grows. And it grows in a very consistent manner. And the 2 companies Host – HMS Host and Hudson that are the 2 brands we use in the U.S. have the leadership and a very consolidated appreciation by the airports. So we believe we will keep leading those markets clearly and we see opportunities to keep growing there. It remains number 1 market for us and also one of our key priorities.

Operator

The next question comes from the line of Jaafar Mestari with BNP Paribas Exane.

Jaafar Mestari

I've got 2 questions, please. The first one is on free cash flow. So in Q2, it was CHF 340 million, and that's the highest you've ever reported I think, in '18 it was CHF 320 million. So you flagged CapEx something like CHF 45 million below budget. Just keen to discuss if any other cash flow items in H1 need a bit of adjusting when we think about a normal full year free cash flow. So things like what's the normal working capital movements in H1? How much of your tax? How much of your interest cost should you normally pay in H1? These all look very optimal in H1.

And then just on your medium-term targets, more of a format question. You gave this guidance in October and November last year, still many uncertainties. You didn't say today if you were going to review it formally. But is it the right format to have a very open-ended guidance with percentage growth and free cash flow conversion above some percentage or do you think with a year worth of visibility and the Autogrill integration maybe something a bit more precise in Swiss francs or a narrow range is something you could be in a position to provide?

Xavier Rossinyol

I'll take the second one. Look, I'm not a fan -- and a few of you that knows me, I'm not a fan on outlooks, guidance or anything like that because I think the focus needs to be on delivering the day-to-day. We gave some indication because we thought that with the integration of Autogrill and coming out of COVID and with a new strategic plan, it was difficult for people to figure out what type of company we were.

Now we believe that with the last few quarters, with more visibility on the figures, the consensus we see is pretty good. So more than now boring you with a bunch of numbers and scenarios, et cetera, we believe that the consensus for '24, '25, it's pretty reasonable. We do expect some upgrade of the numbers for '23 and some of you might take that also forward. But I think that's the best way I can answer your question. On the first one?

Yves Gerster

In regards to the cash flow, so look, out of or on top of the CapEx, which we have mentioned and discussed, there is nothing specific to be mentioned. So the cash flow beside of that is a clean number. Look, as a more general answer, you will always have a little bit of swings here and there, be it on the interest expenses because treasury may decide to draw more on 1 month, 3 months or 6 months duration or because you have some swings in the minority interest because you have the meeting with the joint venture partner a month earlier or later in the year and that will then delay the cash flow in that regard. But look, those swings are relatively small in the overall scheme of things and the same actually applies for net working capital.

In regard to net working capital, I think what is important to note now with the combination with Autogrill is that we have a slightly different pattern. We in the heritage Dufry world, we do invest in net working capital, and you have a certain swing there when you grow. In the heritage Autogrill world, the situation is slightly different. You typically don’t invest that much into net working capital. And actually, when you grow, you have a negative effect in the sense that this helps you. So from that perspective, nothing unusual, nothing to be mentioned or pointed out for the first half with the exception of the CapEx.

Operator

The next question comes from the line of Russell Filipski with Callaway Capital.

Russell Filipski

With respect to the July heritage Dufry result of plus 4.7%, I think in the first quarter trading update, you had provided a number of plus 2.3% for February. I just wanted to confirm how that had trended sequentially month-over-month in between from May to June? And while August is only the first week of the month, more or less, I think you've given some good insight as to you see continued firmness in travel activity. But just to see or confirm with you how that sales figure has trended would be helpful.

Xavier Rossinyol

So as said earlier, I mean, January, February were the only 2 months where we were below 2019 levels at same reported currency. March was ahead, April was ahead, May was ahead, June was ahead and July is ahead, both for the Autogrill and the Dufry sites. The pattern is very similar. August, I’m always very careful to give weekly sales because they depend on holiday days. I mean, if the 1^st of August is Wednesday, Thursday or Tuesday, it changes the pattern. So we have to be careful. But up to now, I haven’t seen anything materially different from what we have seen in the last couple of months.

Operator

The next question comes from the line of Olivier Calvet with Credit Suisse.

Olivier Calvet

I have a few questions left, if I may. So firstly, just on a big picture question. I was wondering in airports where you've seen carry on technology being rolled out, have you seen any impact on customer behavior? And can you give a bit of color on your different verticals and how you can adapt to potential changes in passenger behavior there? That would be the first question.

The second one would be more of a technical one on the AENA contract. Is there anything unusual to note in terms of the cash flow profile that we should have in mind? And then on -- below equity free cash flow in terms of transaction expenses, I see you've disclosed the CHF 29 million cash outflow in the first half versus I think an indication of CHF 100 million. So I was just wondering if there was anything there or if it's just because of the delisting of Autogrill in August -- in July, sorry? Yes, that would be my questions.

Xavier Rossinyol

Look, your first question on the technology that makes a seamless experience, anything that comes down, the passenger is helpful. So if people have more predictability on the time of security check, check in, et cetera, all that is helpful. Delays of planes, for example, if it's slightly short, it's also helpful because it increases the dwell time. If it's a lot, it might stress out. So we need the right balance into right dwell time and non-stressful dwell time.

So the airports are putting on making the security checks easier, are in general, helpful. And it's very simple to understand. I mean, if you have been for 2 hours into check in, security, et cetera, you end up being very stressful. And that's not what we want. What we want is passengers that are calm, that they have some dwell time to get coffee, to get a sandwich, to get a salad, to get a perfume, to get a good bottle of wine. That is the type of passengers we want.

The trend is very clear on that direction. So we welcome that. We would love that it's quicker than -- but the time, it's big investment and our airport partners are making significant efforts to move ahead. I think the disruptions we had last year are helping to accelerate that process. Many airports realize it's the only way forward to guarantee good airport experience. There is nothing unusual on the AENA contract. It's a long-term contract. Maybe that's the only thing I would punch it out. It's very large, but everything else is like other type of contracts.

And on the equity cash flow, Yves?

Yves Gerster

So on the equity free cash flow, for the first half of the year, yes, there is a CHF 100 million going out below the equity free cash flow -- between the equity free cash flow and the change of net debt. And that's mainly related to the combination with Autogrill. It's actually two-folded. One, Autogrill had a relatively small amount, but still an amount of net debt when we started to consolidate the Group at the beginning of February. That's point number 1. And point number 2 is, while the transaction has been financed mainly with equity, i.e., Dufry shares, a relatively small amount of, give or take, CHF 40 million, CHF 50 million was financed with cash, and that's also reflected there in that amount.

Olivier Calvet

Just to clarify on that last point, I saw the transaction cost of CHF 29 million, but what you're saying is the overall CHF 100 million that you were guiding for in terms of transaction expenses is already in the H1 number?

Yves Gerster

So listen, the H1 number, as you mentioned, is transaction costs of around CHF 30 million. There might be a small amount coming in, in the second half of the year, but that's then probably about it.

Xavier Rossinyol

But let’s be clear, the total transaction costs are going to be materially lower than initially anticipated simply because we anticipated that there will be some costs related to some bridge financing that is not going to be needed now because it was mostly done by shares. So you will not see big things coming up for the rest of the year. So it’s basically a little bit to come, but largely done. The numbers we report are going forward and in the – today and going forward as clean and without major adjustments. I think that’s something everybody appreciates. It is what it is. Recalculations you need to do to get there.

So I’m just checking if there are any additional questions. Okay, there are still more questions.

Operator

Yes. The next question comes from the line of James [Indiscernible] with Barclays.

Unidentified Analyst

Just a quick one from me, and it's on the refinancing of the 2024 notes. In the previous quarter call, I think you said your intention was to take them out maybe between 12 and 18 months ahead of maturity, more likely 12 months. I just wondered if you could give us an update on how you're thinking about addressing those as they come due?

Yves Gerster

Sure, absolutely. So look, I think one of the key intentions we have when it comes to financing is to reduce and eliminate any potential refinancing risk to the extent possible. So from that perspective, it’s important for me and for the organization to refinance any maturity between 12 and 18 months ahead of maturity.

In that specific case now, with the available liquidity we have of close to CHF 3 billion and the CHF 3 billion is basically the sum of the available credit lines together with the cash we have on the balance sheet, which is slightly above CHF 1 billion at the moment. We have just increased our RCF by around, give or take, CHF 600 million. And with that, with the CHF 3 billion of available liquidity in total, I feel absolutely comfortable to be in a position to refinance the outstanding bonds, which mature in 2024, at any moment in time, either with that or alternatively, if we want to keep the capacity with a new bond.

So what I want to say with that is [Audio Gap] flexibility. And because we have the CHF 3 billion of available liquidity at the moment, which is almost guaranteed or is guaranteed because it’s committed facilities, we can allow ourselves to keep that bond a little bit longer, a little bit closer to maturity. This is beneficial for us given the relatively low coupon we pay there of only 2.5%. So economically, it would not make sense to do that at this stage. We also discussed that with the rating agencies and they also feel comfortable and I understand that approach.

Operator

We have a follow-up question from Mr. Cox with Kepler Cheuvreux.

Jon Cox

Yes, just to follow-up on a couple of things. Just on working capital, there was a positive contribution there. Just wondering what you think for the year as a whole? And when I look at the balance sheet now and the various lines, it looks like you're just -- you've gone to negative working capital pretty much when I look at the various components of that, which is not uncommon with food companies incident, as I'm sure you're aware. Just wondering what your thoughts are on that working capital going forward? And I know you guys did a lot of work as you were going into way even before COVID on reducing your working capital needs. That's the first follow-up.

Second one, just on business travel. Just wondering where you think we are in terms of business travel from your own experience? What percentage it was? What it is now? I don't know, I'm probably -- I'm sure I'm not the only one on the call whose boss keeps telling them to get on the road and go and see people. It seems like we're not far off where we were prior to COVID, maybe not quite there yet, but certainly seems to be getting there.

And then the last one just on clarification. You mentioned CHF 100 million originally for the transaction costs. You seem to be saying now it's all-in and that's around 50 or so. I wonder if you can just clarify that point?

Xavier Rossinyol

So I'm going to take the middle question on the business travel. Look, we are not at the level we used to be, but it's clearly it's only going in one direction. And people is traveling for business every period a little bit more. Second consideration, there is a new -- thanks to the hybrid working model, people are taking more short breaks than it used to have. So you have people that can work from a remote location on a Friday, and therefore, they can maybe extend a break that they didn't use to do. So this is a new hybrid type of traffic that we didn't see. That is different. It's difficult to qualify because you don't know if it's work or it's pressure.

But the most important consideration for me -- look, I have been receiving the question business, leisure, low-cost carriers, full-service carriers, Japanese, Chinese, Americans, it's all kind of questions on a little bit which is the preferred segment. And my answer over the years now that maybe I'm a little bit more mature is, I don't really -- I don't think that has to be the focus. The focus is we need people traveling. And then our job is to adapt the offering to what they need. Any passenger that travels, whatever is the reason, whatever it is the distance, wherever it comes from or it goes, it's an opportunity.

So the key point for me is to make sure that all the teams constantly focus on that. And if you have an airport where you see more business people that have more experience, that they have less dwell time, convenience might be the key factor. And then you push for self-checkouts and you maximize that. In another place where you have more transferring passengers and the dwell time is longer, then maybe what you want to do is to have shops that calm down, that have wider space and invest more on the training of the sales force that are key to help that passenger that has more time or put more of the -- some of the things I showed today that is more entertaining because they have time.

If somebody is going to fly 12 hours, probably goes to the airport to a time that can spend on holidays, you put one of these -- we have one here in the world room that is -- it's a very cool thing we did with Prada, which you can -- you put on goggles and you can play like a laser sword. With that, you attract maybe teenagers, but then the rest of the family that has the teenager in the shop browse around and spend money.

So for me, the key concept is, whatever is the type or segment of passengers, we have to address it in a way that we optimize the potential. But sorry for the long speech. But coming back to what you said, yes, we see more and more increasing business traveler. And we think that we'll still have some room to catch-up on historical levels.

Yves Gerster

On the net working capital, 2 aspects there. So in the medium-term, it basically depends on 2 aspects I want to mention or probably 3. number 1 is the growth. And there is the growth in regard to the organic growth and also the growth in regard to -- or like-for-like growth and also the growth in regard to new concessions. So depending if we grow more into travel retail or food and beverage, the trend will go in a different direction, because as you have rightly pointed out, in retail, we do invest in net working capital. And in food and beverage, you typically see a slightly negative net working capital. And when it comes to new concessions, that trend in that new concession obviously is leading to an acceleration in that regard.

number 2 is that, obviously, as you have also mentioned, we are keen to optimize net working capital as part of our continuous improvement we are doing internally. So obviously, we want to become better every day in everything we do, and this includes also net working capital. But from a modeling perspective, to assume fundamental changes there, I wouldn't do.

In regard to the transaction costs, so look, there, you're right. And as Xavier has mentioned before, transaction costs, ballpark figures are spent. So there's nothing or nothing material which should come up in the future. And the main reason for that, as Xavier has mentioned is, we have completed all the relevant products. So the MTO is completed. Autogrill is delisted. In our initial assumptions, we have considered that part of the MTO is financed with cash. We need to keep a bridge facility for a longer period. And on top of that, the bridge take-out would need to be done by either a capital increase or a new bond. And those products, as you know, come with expensive price tags, because we didn't have to do them, we could save that money.

Jon Cox

Congratulations again.

Operator

There are no more questions on the telephone at the moment. We have one written question coming from Santiago Domingo with Magallanes Value Investors. Are you satisfied with the current footprint? Where would you like to invest and divest?

Yves Gerster

Current footprint, geographical footprint.

Xavier Rossinyol

Look, I think diversification, as I said, is an asset in itself. It's very difficult to anticipate what is going to happen in the world if you are in the right locations. But as a general principle, of course, I would like to keep growing in the U.S. and in North America. It's a strong market, as I said. And it behaves a little bit different from the rest of the world because it's more domestic and less international. Therefore, it's a very good hedging strategy on the global. Of course, I would like to keep increasing our footprint on the main markets in EMEA and Latin America, and of course, also to grow into Asia Pacific where our market share is lower.

This invest, we have been doing it. A year ago, we had a few locations where we were, in our view, structurally making losses. We have exited by now all of them or we have renegotiated the conditions. There is one minor where we still are structurally [deficitary], and we are working on that. So the geographies are clear and then the contractual obligations have to be negotiated or exited if they cannot be negotiated. Thank you for the question.

I think with that, we are finished, if I understand well. So I really thank everybody for attending the call. And as some of our employees are also watching these conferences, I want to thank each of you for your contribution. We are here just because of your daily work. We appreciate that. We thank you that. And of course, we ask you to keep doing it, because as you can see, analysts and investors always expect more. So thank you very much.