Amplifon, the global leader in hearing solutions, has reported strong financial results for the first quarter of 2024. The company saw revenues rise by approximately 9% at constant exchange rates and 6% at current exchange rates, with organic growth reaching 5.6%. Amplifon's EBITDA recurring hit EUR137 million, marking a significant margin increase, while net profit recurring stood at EUR36 million.
Growth was particularly noted in the Asia Pacific region and a normalized European market. The company, with a ticker symbol yet to be mentioned, also expanded its directly operated store network in the US, now totaling nearly 400 stores. CEO Enrico Vita expressed confidence in the company's positive outlook for the rest of 2024.
Key Takeaways
- Amplifon's revenues increased by approximately 9% at constant exchange rates during Q1 2024.
- Organic growth was strong at 5.6%, with Europe returning to growth and Asia Pacific showing a 9% increase.
- EBITDA recurring reached EUR137 million, with a 100 basis points margin increase.
- Net profit recurring stood at EUR36 million, with a 6.2% margin.
- The US market grew by about 10%, driven by directly operated store networks and Amplifon Hearing Health Care.
- The company plans further expansion in the US market through acquisitions.
Company Outlook
- Amplifon is optimistic about maintaining a strong growth trajectory throughout 2024.
- The company expects to continue its expansion in the US with more acquisitions.
- Labor costs are projected to increase at the usual inflation rate of around 3%.
Bearish Highlights
- Growth expectations for the French market have been adjusted to remain flat.
- Price contributions are expected to remain limited.
- CapEx has increased due to investments, although it is expected to be slightly lower in 2024 compared to 2023.
Bullish Highlights
- The European market has returned to growth, with a slight increase after several negative quarters.
- The US market's growth is robust, and profitability has been better than planned.
- High teens growth reported in April compared to the previous year, with Easter effect contributing significantly.
Misses
- There was no specific mention of misses in the provided context.
Q&A Highlights
- CEO Vita addressed the growth in Europe, the impact of the early Easter, and expectations for M&A contributions.
- The company is monitoring the French market and remains positive despite flat growth expectations.
- Labor costs are back to normal inflation rates, and CapEx for 2024 is anticipated to be lower than in 2023.
- The customer mix has returned to normal, with Medicare Advantage not being the main growth driver.
Amplifon's first-quarter performance in 2024 reflects a company with strong momentum and a strategic focus on expansion, especially in the US market. With a positive outlook and careful management of investments and costs, Amplifon is poised to continue its growth trajectory in the global hearing care industry.
Full transcript - None (AMFPF) Q1 2024:
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon First Quarter 2024 Results Conference Call [Operator Instructions]. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, madam.
Francesca Rambaudi: Thank you. Good afternoon, and welcome to Amplifon's conference call on first quarter 2024 results. Before we start, a few logistic comments. Earlier today, we issued a press release related to our results, and this presentation is posted on our Web site in the Investors section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release. I have to bring your attention to the disclaimer on Slide 2 as some of the statements made during this call may be considered forward-looking statements. With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita.
Enrico Vita: Thank you, Francesca, and good afternoon, everyone, and thank you for joining us Today. I'm pleased to comment on a simply excellent quarter, definitely the best way to start the 2024. I'm very happy not only for our financials, but also because we see the results of all the hard work we did last year in response to a market demand, which in Europe, as you know, was weaker than expected. The further good news is that at last in Europe in Q1, the market demand finally seems to have started to normalize, and it was back to growth. We estimate something in the region of plus 1%. Also, it is important to remark that this growth was impacted by the early Easter of this year compared to last year when the Easter occurred in April. Obviously, we will have a benefit in April of this year for the same reason, but I will come back to this at the end when we talk about the outlook. So let's immediately review some of the quarter's key numbers and achievements together. Revenues were up for circa 9% at constant exchange rates and circa 6% at current exchange rates. The composition of the growth was excellent. And in fact, the organic growth was at a remarkable of 5.6%, especially considering what I said about the early Easter. In addition to the usual mention of our performance in the Americas, today, I would like to highlight our performance also in Asia Pacific, which delivered circa 9% of organic growth. M&A contribution was also strong at around 3% overall, accelerating further during this first quarter, also thanks to more targets willing to sell at attractive multiples for us. In particular, I would like to mention the continued growth of our directly operated store network in the US thanks to the recent acquisitions of two of our main franchisees. Today, we can count on a network of directly operated stores of nearly 400 stores. Hence we are moving forward with conviction and at full speed in one of our strategic priorities. Regarding the EBITDA recurring, we delivered around EUR137 million, thanks to a record margin increase of 100 basis points versus 2023. While in absolute terms, the increase was of circa 11%. Concerning profitability, I wanted to mention again the APAC results, where we see and we are now reaping the fruits of all the work done over the past months and where we now see the benefit of the full integration of Bay Audio. Finally, we posted a net profit recurring of circa EUR36 million with a margin at 6.2%. As said, all in all, we are very happy about our results in this initial part of the year. And now I will hand it over to Gabriele to give you more information about our financials.
Gabriele Galli: Thanks, Enrico, and good afternoon to everybody. Moving to Chart number 4, we have a quick look at the group financial performance in Q1, which, as already commented by Enrico, posted a truly excellent start to the year. In the quarter, revenue at constant FX increased by around 9% versus 2023 with a strong and above market organic growth at 5.6%. Despite the negative impact of early Easter in March, we concurred -- which occurred last year in April with [1 13] days less in the quarter, equivalent to circa 1.5% growth. The very tough comparison base. In fact, the revenues in Q1 '23 were 9% higher than in Q1 '22. Then the global market demand still driven by a strong US market with Europe back to growth and progressively normalizing. M&A contribution from bolt-ons primarily in Uruguay, US and China, strongly accelerated and was over 3%. FX was negative for 2.7%, primarily due to Argentine peso US dollar, Australian dollar and New Zealand revenues in Q1 '23, growing 20% versus Q1 '22. Revenue growth in the quarter was over 20% at constant FX with an excellent organic growth at around 13%, driven by a continued very strong performance in the US especially Miracle-Ear direct retail and Amplifon Hearing Health Care. M&A contribution, primarily related to US and Uruguay was over 8%. The FX impact was minus 11.4%. Inflation accounting impacted less than 2 percentage points negatively on FX and positively on organic growth. EBITDA amounted to EUR26.2 million with margin at 23.7%, up 6% versus Q1 '23, reflecting the business mix with the fast growth of Miracle-Ear direct retail, the integration of recent acquisition and the strong reinvestments in the business. Moving to Slide 7. We have a look at Asia Pac performance, where we posted an excellent revenue growth as well as an outstanding profitability expansion. Revenues were up 13.5% at constant effect, mainly driven by the outstanding organic growth reported across all main markets and despite a very challenging comparison basis. M&A contribution was 4.7% related to China, where today, we count on over 410 points of sale. FX headwind was significant at over minus 5% due to the appreciation of euro versus both Australian and New Zealand dollars. EBITDA reached EUR24.2 million, increasing by 11.2% compared to 2023, with margin at 28.1%, 80 bps higher versus Q1 '23, also after the very strong growth of China. Moving to Slide number 8. We appreciate the Q1 profit and loss. In the quarter, total revenues increased by 6.1% to EUR573 million, with a strong 5.6% organic growth versus Q1 '23. EBITDA recurring came in at around EUR137 million, increasing circa 11% or over EUR13 million with margin at all-time high level of 23.9%, 100 bps above Q1 '23, thanks to the field productivity measures taken in H2 last year. EBITDA reported was around EUR136 million, up around EUR20 million versus [23] after EUR1 million one-off costs. G&A, including PPA was EUR71 million versus EUR62 million in '23, increasing EUR9 million in light of the growing investments made during the last years in network, digital transformation and innovation, leading the recurring EBIT to EUR66 million versus EUR61 million in Q1 '23. Net financial expenses amounted to EUR14.4 million versus EUR11.9 million in Q1 last year. Finally, due to the increase in interest rates on short-term and on the limited portion of long-term facilities at variable rates since, as you know, most of our long-term debt is at fixed rate. The higher figurative interest expenses on network leases following the application of IFRS 16. The nonmonetary negative impact of inflation accounting on the Argentinian subsidiary. Tax rate usually slightly higher in the first quarter versus the following quarters due to seasonality, posted a 10 basis point reduction versus [23] leading recurring net profit of around EUR36 million versus [35] last year. Moving to Slide number 9. We appreciate the cash flow evolution. Operating cash flow before lease liabilities was in the period equal to EUR97 million, roughly in line with the EUR101 million level achieved in last year. After repayment of lease liabilities, growing by EUR2 million, operating cash flow was equal to EUR67 million. Net CapEx increased by over EUR3 million to EUR30 million, leading free cash flow to over EUR37 million. Net cash out for M&A increased significantly, nearly doubling to around EUR71 million versus EUR39 million last year, following the significant acceleration of bolt-on M&A, primarily in France, Germany, Uruguay, the US and China with over 150 shops acquired in the quarter. MFP ended at EUR883 million versus EUR852 million at year-end 2023. Moving to Slide 10. We have a look at the debt profile trend and key financial ratios. As mentioned, the net financial debt closed at EUR883 million, with liquidity accounting for EUR215 million, short-term debt accounting for around EUR376 million and medium long-term debt accounting for around EUR721 million. Following the IFRS 16 application, lease liability amounted to around EUR507 million, leading the sum of net financial debt and lease liability to close EUR1.4 billion. Equity ended up at around EUR1.14 billion. Looking at financial ratios. Net debt over EBITDA ended at 1.52 times, stable versus December last year after the strong CapEx and bolt-on M&A plan. Net debt over equity ended at 0.78 times. I would now hand over to Enrico for the outlook and the closing remarks.
Enrico Vita: Thank you, Gabriele. So we are at the end of today's presentation, which contains several very positive messages. First, the market demand in Europe is back to slight growth after several negative quarters. Second, our field productivity measures are delivering very strong results. Third, we are progressing fast and delivering on our strategic priorities. Hence, we are very pleased with our performance in Q1, a great quarter, which strengthens our confidence in a very positive 2024 even further. Finally, I want to share that April was very strong, too, up by a remarkable high teens also thanks to the early Easter in March 2024. Regarding Q2, please also note that due to a very peculiar calendar situation in June, we will have five weekends in the month. So at the end, we will have only 1 more working day in the quarter than last year. We are, therefore, confirming with even more confidence our guidance communicated two months ago and say that, all in all, let me say, a strong set of good news for today. With this, I want to thank you all for your attention, and we look forward to answering your questions. Francesca, over to you.
Francesca Rambaudi: Thanks, Enrico. I kindly ask the operator to open today's Q&A session. Please kindly limit your questions to maximum two initially in order to give everybody the opportunity to ask questions. Now I turn the call over to Judith in order to open for the Q&A.
Operator: [Operator Instructions] The first question is from Niccolo Storer with Kepler.
Niccolo Storer: The first one is on growth in Europe. If you can share with us some comments by country, in particular, referring to France and Germany. Apparently demand said that France still negative while Germany back to a more reasonable growth. Can you confirm these numbers? And elsewhere, if you can comment also on other key markets for you? And the second question is on M&A. You have out the guidance for above 2% contribution, considering the strong start to the year and the fact that in one quarter, you already spend more than in the last three cumulated. Do you think that maybe this above 2% could become easily above 3%?
Enrico Vita: So with regard to the growth in Europe, let me say that, first of all, that the good news is that Europe was back to slight growth, which is, in my opinion, a good news in consideration of the fact that as we shared with you many times in the last quarters, Europe showed a negative performance in the last three, four quarters in a row. So the good news is that Europe is back to growth and also, in order to evaluate this growth, in my opinion, it's also important to take into consideration the fact that the early Easter effect, which is a major one in countries like France, like Italy, like Spain as well, of course. So this plus 1% that we estimate should be seen more as a plus 2%, plus 3% on a, let me say, working base adjusted basis. And we see similar trends in basically all the different markets. I wouldn't mention any market, which is more positive than others. And all of them in the region of plus 1%, I would say. So we do not see anything -- any market which is performing clearly differently from the average. With regards to the second part of the question, and therefore, the M&A. Clearly, we are very happy about our M&A contribution in the first quarter, definitely also in the second quarter. As you know, we have already completed the acquisition of another of our major franchises in the US. So I would say -- I wouldn't say easily go above 3%, but definitely, we are very -- I wouldn't. But definitely, we are confident about reaching something more than 2%, 3%.
Operator: The next question is from Robert Davies of Morgan Stanley.
Robert Davies: My first one was just jumping into, I guess, the growth rate you've seen in the Americas. Could you give us a little bit more color what you're seeing from that region, what's sort of driving the strength in the growth? My second one was just on -- you mentioned the benefits of some of the productivity measures you've taken last year. Can you just give us a bit more color on the phasing of those productivity benefits over the year, whether they're sort of front-end loaded, back-end loaded, equally weighted, et cetera? Those are my two questions.
Enrico Vita: So with regards to the first part of the question and, therefore, our growth in the Americas. From a market point of view, in the first quarter, we have seen still a strong market growth in the US according to HIA data, the US market in the first quarter grew by about 10%. I would also take into consideration in this regard, the fact that these are selling data. So they are less affected by the Easter, can be affected by product launches by selling, talking in and so on and so forth. But definitely, we have seen a strong market in the US which also coupled with our strong performance in our directly operated store network and also our Amplifon Hearing Health Care was the main -- were the main drivers of the growth in the region. With regards to the second part of the question and therefore, the productivity measures that has been anticipating the fact that we were working on this since now some months. I am extremely happy to see that the work that we have done are now delivering stronger results. So I would expect similar benefit also going forward. Of course, this is not a guidance on the total EBITDA of the company because we might also decide to reinvest part or things like this. But definitely we are very happy about what -- all the work that we did last year, which was very well executed and which are now paying a very strong dividend.
Robert Davies: Could I just squeeze one follow-up in just around the strength in the APAC region? Some of the hearing aid manufacturers seem to say there is some softness in that region. I'd just be interested in what you're hearing on the ground within China specifically.
Enrico Vita: Well, there are no figures about China. What I can tell you about the Asia Pacific in general is that I'm extremely happy about our performance. I think that in Australia, for example, we are growing definitely much faster than the market. With regards to China, as I said, there are no official figures. We see a strong organic performance. We see a very strong organic performance in our business. I think that our strategy to move through a number of smaller acquisitions in the spot that we wanted with the right targets, et cetera, et cetera, now is -- this kind of strategy is paying a very good dividend. Our performance in China, from an organic viewpoint, is it was very, very strong.
Operator: The next question is from Veronika Dubajova with Citi.
Veronika Dubajova: I will also keep it to two. My first one is actually on the US and, Gabriele, Enrico, would love to hear what the US growth rate was for you specifically. I kind of strip out the Argentina hyperinflation accounting contribution from the Americas growth rate. It seems like this is another quarter where you might be just growing in line with the US market, not ahead of it. So curious if you can provide some clarity on that. And then I guess related to that, is the managed care business outgrowing Miracle-Ear or vice versa or the growth rate is pretty comparable? That's my first question. My second question is also about Americas and the margin contraction that you experienced in the quarter. Is there anything unusual that happened in Q1 that explains this or is this a broader trajectory of travel for the year given investments or mix? If you could explain that, that would be helpful.
Enrico Vita: Veronika, I took note about the first two. While I was taking note, I missed the third one. Can you tell me the third one again, please?
Veronika Dubajova: Enrico, it was about the margin compression in the Americas and whether there is anything unusual, or is this reflecting some investments or mix will be here for the rest of the year?
Enrico Vita: So with regards to the first part of the question and, therefore, our growth in the U.S., we believe that we are growing faster than the market. And as I said, you -- in my opinion, you should not compare our performance directly with the HIA data because these are selling data, which can be affected by selling for product launches, by selling for any reason, et cetera, et cetera. So our estimation is that in the US, we are growing faster than the market. Definitely, our Amplifon hearing health care business is growing very fast and above the Miracle-Ear. But also, we are super happy about our growth with Miracle-Ear, in particular with the growth in our directly operated store network. With regards to the margin compression in the Americas. I wouldn't take this as an indication of the fact that we are suffering in terms of profitability in the region because this was mainly led by the fact that we are acquiring many, many, many stores. Clearly, when you acquire stores, you have a transition. When we acquire, of course, we also acquired companies, which, in general, have a lower profitability than the average. And then you know very well that from a percentage viewpoint, directly operated stores have a lower percentage than franchising. So of course, we want to improve our profitability in the US. I would like to stress once again that our priority in the US is growth. We want to maintain our profitability. So maybe in one quarter can be below, one quarter can be up. So the overall target for the Americas region in consideration of all what I said is to have a stable profitability.
Operator: The next question is from Oliver Metzger with ODDO BHF.
Oliver Metzger: The first one is on the contributors to your margin improvement. Can you give us some indication which share came from operating leverage versus your efficiency program? Second question is about also your strong M&A activity. How far are you away from considering yourselves as well scaled in Germany and France?
Enrico Vita: So with regards to our margin improvement and the split between operating leverage from efficiency, I can't give you this kind of detail, of course. But clearly, there is a positive effect coming from operating leverage, and there is also a positive effect coming from the efficiency measures that we took starting from the second half of last year, in particular in Europe, which are including optimization of the agendas of our audiologists, protocols, training efficacy and so on and so forth, which allowed us basically to reduce the number of people that we needed to be hired in order to deliver this growth. So in a way, this kind of efficiency and productivity measures are amplifying the operating leverage. With regards to the second question and therefore, what -- how big is -- I mean, the room for further expansion of our network, both in Germany and in France. Still, there is significant room in particular, in Germany. Today, in Germany, we can count on something like 600 stores whilst in France is more towards 700 stores. But definitely, I would say there is still a significant room in Germany. For example, we are quite weak in the south part of Germany. So there is definitely room to increase the network in both markets.
Oliver Metzger: Just a follow-up to my first question. So I understand you don't want to give exact details, but if you mentioned Europe and the strong improvement in Europe. So is it fair to say that in Europe, the major share has come from the efficiency program?
Enrico Vita: In Europe, the major share is coming from -- absolutely yes. Absolutely, from labor cost efficiency, absolutely.
Operator: The next question is from Julien Ouaddour with Bank of America.
Julien Ouaddour: So I have two. The first one, so in France. So this comment about the French market from the two manufacturers were already reported. And one of them, I think, this morning, mentioned the fact that they expect the French market, I mean, like the growth to be flat. I think in the past, you were more talking about plus 2%, plus 3%. Any reason why this assumption would have changed for you after what you've seen so far? I mean you've been pretty positive about the market recovery or should we maybe see a sort of company-specific issue for your main retail competitor in the country? Second question about the US. So again, strong quarters. Like in Americas you seem to be ahead of plan when it comes also to like Miracle-Ear franchise acquisitions or at least you're like ahead of my plan. So even if you've done already a lot of M&A in the US until now this year, should we expect more acquisitions for the remainder of the year? And if you can comment about where your discussions are with the largest franchisee owners at the moment, that would be -- I mean that would be helpful. Any large M&A in the short term?
Enrico Vita: With regards to France, in my opinion, what is important to mention is that in the first quarter, France was not negative, and this is, in my opinion, a good news. Again, in consideration of the fact that there was an impact, which was not minimal in my opinion, coming from the earliest. Now we need to see in this second part of the year, if this trend is confirmed. So let me say that to have France in positive territory is already a good news, then to say if France will be up 2%, 3% or 1%, to be honest with you, is very difficult for us, let's say. The fact that, that is positive is already quite a good news. With regards to the US, definitely, our expansion of our network of directly operated stores is one of our strategic priorities. So I expect to go ahead with that. I can't really comment anything on a specific or target or something like that. Definitely, we have the goal to continue to expand our network of directly operated stores in the US.
Julien Ouaddour: And if I may squeeze like a very quick follow-up. Just like on the margins, so you started the year with an impressive plus 100 bps EBITDA margin improvement year-over-year. I mean, of course, you maintain the guidance of at least plus 60 bps. Should we expect, I mean, either less margin expansion in the coming quarters or could the margin could be seen a bit more -- I mean, like a bit conservative this year?
Enrico Vita: In terms of profitability, we have issued our guidance for 2024 just two months ago. Things are going well, perhaps better than planned so far. So if things will continue go well and you know very well that in the last couple of years, we have seen the European market, in particular, to be quite volatile, but this first part of the year has been good. If this trend in terms of European market to -- in terms of growth will continue in the remainder part of the year, we will see. But let me say that so far, we are happy, 100 basis points, it's not our guidance at the moment. Our guidance is the one that we'll see in July, if this trend will be confirmed, if there is an opportunity, of course, to do better, which is what we always strive for.
Operator: The next question is from Hugo Solvet, BNP Paribas (OTC:BNPQY).
Hugo Solvet: Congrats on the results. Most have been answered, but I'm left with a couple now. Maybe you can comment on the high teens growth for April. Can you maybe for us adjust that for April inflation? And also should we expect just the Easter effect of 1.5% to reverse that would be approved to have enough of a clean number to work with for April. Second, maybe you can give your thoughts on the probe into the Italian market now that the outcome is known and has been published, that would be helpful maybe to clarify here.
Enrico Vita: So with regards to the first part of the question. Clearly, in April, we are -- we have delivered growth, which was very strong. High teens up high teens versus April last year, of course, benefiting from the fact that, last year, we had the Easter occurring in April. The impact of this is easy to be calculated, it's about circa two days on a monthly basis. So I would say, the impact should be something in the region of a high single digits. With regards to the second part of the question and therefore, the impact of the [4] about the current market analysis from the antitrust authority. I think we commented the last time about the output of their market analysis. Since then, no further news. Of course, we have taken the report from the antitrust authority very seriously, and we are working on it in order to identify if there are -- there is a room for improvement in our proposition to clients. We are definitely working on it, but no further news since last time we commented on this.
Hugo Solvet: And just the hyperinflation impact on April growth in the high teens.
Enrico Vita: Sorry, say it again.
Hugo Solvet: The hyperinflation impact on the high teens growth in -- inflation in H1…
Enrico Vita: Hyperinflation impact on -- I think it's impossible to say at this stage. I don't know. Very much in line with what we saw during Q1. During the first, I mean, three months, we saw this impact in the Americas in the range of 2 percentage points. So shouldn't be different also in April.
Operator: The next question is from Shubhangi Gupta with HSBC.
Shubhangi Gupta: I just have one question on the April growth trend. Could you please elaborate where is -- how is the growth pattern in the different regions? Is it similar to [QM], like the US is still strong and EMEA's recovering. And for EMEA, should we think about sequential recovery to this year?
Enrico Vita: Sequentially? Sorry, again.
Shubhangi Gupta: For EMEA, should we think of recovery as more like sequentially progressing through this year? So Q2 better than Q1 and so on.
Enrico Vita: Of course, we wanted to give you a flavor about Q2, giving you our growth in April also because this year, there was a very significant effect related to the Easter. We do not want to give you a guidance about quarter two specifically. But in general terms, let me say that you should expect a similar pattern to what you have seen in Q1. So which means Americas being the fastest growing region and then the others.
Operator: The next question is from Domenico Ghilotti, Equita.
Domenico Ghilotti: My first question is on the bolt-on M&A contribution. So I'm wondering if given the visibility that you have on the pipeline today, you can share with us what can be a reasonable amount or a ballpark indication on investments that you are expecting for this year also because this will be supportive also for next year. And second question is on the inflationary environment. So if you can give us some color on what do you see in terms of persistent inflation maybe particularly on labor cost or if you see really this easing into 2024.
Enrico Vita: Thank you for your questions. So with regards to the first one, and therefore, the bolt-on acquisitions. What we see since, I would say, six months, is that we see more targets willing to listen to us and to sell. And also what we see is the multiple that maybe we're growing just after the COVID [euphoria] now are going backwards. So definitely, this kind of environment is positive for us. And definitely, we see the possibility for sure to be above the 2%. Now yes, it's early to say if it can be 3% or whatever. But definitely, we are very confident that this year can be a good year for our M&A activities. With regards to the second part of the question and therefore inflationary environment. I think that the labor cost has gone back to the usual inflation rates, which is something in the region of, let's say, 3%, while of course, last year, we were more in the 5%, 6%. So I will -- I definitely see a situation where labor cost has gone back to the usual inflation rate growth.
Domenico Ghilotti: If I may follow up on Q1, in general, your assumptions for price contribution. Are you sticking to the idea that price will be limited?
Enrico Vita: Yes, absolutely, absolutely.
Operator: The next question is from David Adlington with JPMorgan.
David Adlington: First up, maybe just on CapEx. Your CapEx has gone up quite a lot and therefore, your depreciation has also gone up quite a lot. I think up 17% year-on-year. Just wondered if you give a bit more color in terms of where that CapEx spend is going? And do you see that moderating at some point in the future and also the outlook for depreciation? And then secondly, just in terms of trading days, one extra trading day in the second quarter. I just wondered if you have any comments on Q3 and Q4 as well, please?
Enrico Vita: So with regards to the first question, and therefore, the CapEx. Clearly, CapEx have grown about EUR30 million versus last year, EUR26.6 million. CapEx related to our investments in the network IT innovation. And therefore, for the full year 2024, what you should expect is a total amount of CapEx basically slightly lower than 2023 because in 2023, 2023 was -- has been a year of extremely strong investments. So in 2024, you should expect a lower number for the full year than in 2023 that we were about EUR140 million. So lower than the EUR140 million of last year. With regards to the second question and therefore, trading days going forward. Not a meaningful, let's say, difference versus previous year. We will have one trading day more in Q2, one trading day more in Q3 and also one trading day more in Q4. So positive from this point of view.
Operator: The next question is from Giorgio Tavolini, Intermonte.
Giorgio Tavolini: I was wondering if you can comment more on the EMEA mix of returning customers compared to new customers just to have a better understanding on the margin from, let's say, a higher portion of returning customers, if so? And the second question is on the managed care business since I didn't see many comments on Medicare Advantage, how do you see this segment growing and contributing to US profitability, I guess, higher profitability compared to the Miracle-Ear and the rest of the business?
Enrico Vita: So with regards to the customer mix, now we are back to the usual mix. So I would say that we are back to where we were some time ago, and the situation in this regard has been totally normalized. With regard to our growth in the Medicare Advantage. Certainly, we are growing in this segment. We were not playing at all before. But I would say this has not been the main engine of the growth for Amplifon Hearing Health Care. Also in this first part of the year, we are also growing in the private part. So definitely, we are growing there, but it's not the main driver of the growth.
Operator: [Operator Instructions]
Francesca Rambaudi: I think we have finished, so thank you all for your interest and attendance. We kindly ask the operator to disconnect. Thank you.
Enrico Vita: Thank you, everyone. Thank you.
Operator: Ladies and gentleman, thank you for joining. The conference is now over, and you may disconnect your telephones.
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