Alessandra Girolami: Good morning, everyone, and welcome to Richemont's 2026 Full Year Results Presentation. Thank you for joining us in person in Geneva or virtually by webcast. I'm Alessandra Girolami, Group IR Director. And joining me today are Johann Rupert, Chairman; Anton Rupert; Nicolas Bos, CEO; and Burkhart Grund, CFO. As usual, the company announcement and results presentation can be downloaded from richemont.com, and the replay of the webcast will be available on our website today from 3:00 p.m. Geneva time. Before we begin, please take note of the forward-looking statements in our ad hoc announcement and on Slide 2 of the presentation. Turning now to the presentation. Nicolas will begin by discussing the year's highlights and group sales. Burkhart will then review our business areas and group financials, and Nicolas will finish with some concluding remarks. This presentation will then be followed by a Q&A session open to participants present in the room. I now hand over to Nicolas.

Nicolas Bos: Thank you, Alessandra, and good morning to everyone. Thank you for joining us today. In fiscal year 2026, Richemont delivered strong sales momentum and solid results against fast-evolving global conditions. And I would like to start by warmly thanking our teams for their dedication and achievements throughout such a challenging year. Let's start with a few key numbers. Sales reached EUR 22.4 billion, an increase of 11% at constant exchange rates and 5% at actual exchange rates. Operating profit came in at EUR 4.5 billion, up by 1% compared to the prior year or up by 23% at constant exchange rates. Profit for the year reached EUR 3.5 billion compared to EUR 2.8 billion in the prior year. This solid performance led to the generation of EUR 4.9 billion of cash flow from operating activities, enabling the group to end the year with a net cash position of EUR 8.5 billion. Let's turn to the highlights, starting with sales. The group demonstrated sustained momentum throughout the year, delivering growth across all business areas, regions and channels at constant exchange rates. The Jewellery Maisons posted a remarkable performance, illustrating the strength of their brand equity and overall value proposition. Sales rose by 14% with double-digit growth throughout the year, led by higher demand across all regions. In addition, the Specialist Watchmakers and Fashion & Accessories Maisons posted modest growth, both improving in the second half. All regions contributed to growth with a notable double-digit rise in the Americas throughout the entire year. Sales in Middle East and Africa were also up by double digits, although naturally affected by the conflict in the region during March. In addition, Europe, Japan and Asia Pacific contributed to growth in value, all posting high single-digit growth for the year. Let me add that in Q4, the group was able to maintain its momentum with sales up by 13% at constant rates. Sequential acceleration in Asia Pacific, the Americas and Japan offset slower sales growth in Europe and a modest decline in the Middle East and Africa region. Moving to our financial performance. Operating profit reached EUR 4.5 billion, up by 1% versus the prior year, while including EUR 164 million of nonrecurring costs. Overall, the contribution of our strong sales growth, combined with ongoing cost discipline mitigated the significant impact of the external headwinds we faced. With a net cash position of EUR 8.5 billion, the group ended the year in a strong position to continue supporting both long-term resilience and growth prospects. As we navigated this challenging macroeconomic environment, we continue to execute on our long-term vision. We've always been guided by the belief that differentiation, brand identity and disciplined pricing are primary drivers for enchanting clients and delivering value over time. To support this, we continue to make strategic investments, including EUR 1 billion of capital expenditures, primarily for distribution and manufacturing, while dedicating circa 9% of our sales to communications. In parallel, our team demonstrated unwavering creativity, further cultivating the desirability of our iconic collections and successfully launching new lines. Let me now elaborate concretely on how we are strengthening the distinctiveness of our Maison for the long term. First, we continue to elevate the quality of our retail network. This involves openings in key locations such as new cities for Van Cleef & Arpels in Europe, alongside Cartier in Tokyo, Buccellati in Busan Centum, Korea, and IWC in Dallas, among others. At the same time, we significantly enhance the client experience through major relocation and renovations such as Piaget on Place Vendome and Buccellati in Aspen. Specifically looking at the China market, we have been reshaping our store network by closing selectively stores across business areas as well as opening in key locations to optimize our footprint. Second, we continue to cultivate craftsmanship to preserve specific skills as well as the enduring quality of our timeless pieces. We invested in our own atelier, notably with several jewelry projects in Paris or in Valenza, in Italy which are due to open over the coming year. In parallel, we nurtured artisanal and creative skills through dedicated programs. We accompanied over 200 apprentices in Switzerland and Germany through 2-, 3- and 4-year programs in watchmaking and another 100 in France and Italy for jewelry metier. This year, again, we welcomed another 20 young designers at our Creative Academy in Milan, while our Maison continued to partner with prestigious institutions like the Accademia Costume e Moda in Milan, or recently, The King's Foundation in the U.K. on decorative metier dart in watchmaking. Extending this commitment, we also strive to share our passion for craftsmanship and art with a wider audience. In the past year, the four campuses of LEcole des Arts Joailliers, supported by Van Cleef & Arpels, attracted thousands of students and visitors to curated, yet accessible exhibitions around jewelry arts. Another example is the Fondation Cartier's new home in Paris that has already welcomed over 300,000 visitors since its opening last October. Third, building on this, our Maison continued to perpetuate their heritage and singularity, further solidifying the iconic status of their creations. throughout the year, several Maisons hosted patrimonial exhibitions. Highlights included Buccellati's successful Prince of Goldsmith exhibition in Shanghai and Cartier exhibition at the V&A in London, which drew over 350,000 visitors, including many of you, I hope. Our Maisons also held exclusive High Jewelry events across various geographies, including Italy, Sweden and Spain. This was accompanied by vibrant and purposeful communication such as the Cartier new brand campaign launched in September and centered on its iconic panther symbol, showcasing both beauty and audacity, consistent with the Maisons identity. This, of course, would not be possible without a constant obsession with creativity that contributes to drive desirability and nurture brand equity over time. And I want to thank the teams for their unwavering efforts at designing and crafting the beautiful new creations featured on this page. Let me now walk you through the group sales performance in more detail, first by region and then by distribution channel. Unless otherwise stated, all comments refer to year-on-year changes at constant exchange rates. Fiscal year '26 saw robust sales growth across all regions with notable improvements in the second half in both Asia Pacific and Japan. Sales in Europe rose by 9%, supported by growth across all business areas, led by the Jewellery Maison. All main markets grew with notable performances in Italy, Germany and the United Kingdom. After a strong first half, Europe's growth rate moderated in the second half, reflecting strong comparatives in the prior year period. Local demand was strong throughout the year, while tourist spending was overall positive, albeit decreasing in Q4. Fourth quarter sales overall grew by 5%. Sales in Europe made up 24% of group sales, up slightly from the prior year. Asia Pacific sales ended the year up by 8%, led by double-digit growth at the Jewellery Maisons, which more than offset lower sales at other business areas. Regionally, the performance was driven by strength in the South Korean market. Sales in China, Hong Kong and Macau combined rose by 3% for the year, led by double-digit growth in Hong Kong. Elsewhere in the region, Australia and Singapore also continued to deliver robust growth. Fourth quarter sales for the region were up by 14%. Sales in Asia Pacific represented 32% of group sales, down slightly from 33% the year before. Sales in the Americas grew by double digits throughout the year, ending the full year at plus 17% against demanding comparatives. This included double-digit rises at Jewellery Maisons and Specialist Watchmakers, combined with mid-single-digit growth on the other business area. Strong local demand supported growth across all markets in the region and all channels. Fourth quarter sales were up by 18%, marking the ninth consecutive quarter of double-digit growth. The Americas contributed 25% of group sales, in line with the prior year. Japan sales were up by 9% compared to the prior year, led by the Jewellery Maison and the retail channel. The performance was supported by strong growth of local demand, while tourist spend was lower, notably from Chinese clientele. Growth significantly accelerated in the second half and included a remarkable plus 28% in Q4 that builds upon a demanding comparative of plus 22% in the prior year period. Japan's contribution to group sales remained stable compared to the prior year at 10%. Turning now to Middle East and Africa, where our thoughts are with our teams, our partners and everyone affected by the ongoing events. Sales for the year increased by 13% in the region, driven by the Jewellery Maison. All main markets saw strong increases, led by growth in the UAE and Saudi Arabia. In the fourth quarter, sales were naturally affected by the conflict in the region in March and ended 3% lower than the prior year period, contrasting with the double-digit increases recorded until then. Sales in the Middle East and Africa region represented 9% of group sales, in line with the previous year. In fiscal year 2026, all regions contributed to the group sales growth, attesting to the strength and balance of our regional footprint. Despite the unfavorable currency movements, sales grew by EUR 1 billion. In value, the main contributors were the Americas and Europe, both adding circa EUR 400 million of sales compared to the prior year. Let us now turn to sales by distribution channel with growth expressed at constant exchange rates. Retail represented 71% of group sales, slightly above the prior year's level. Retail sales were up by 12%, with growth across all business areas and regions, led by strength at the Jewellery Maisons and the Americas. Online retail contributed 6% of group sales in line with the prior year. Sales rose by 8% with growth at the Jewellery Maison and modest declines elsewhere. All regions grew with notable performances in Japan and the Americas. Overall, direct-to-client sales, combining sales in directly operated stores and online retail made up 77% of the group, up slightly compared to the prior year. Finally, the wholesale channel represented 23% of the total with sales up by 9%. Similarly to retail, wholesale sales were up across all business areas and regions, led by the Jewellery Maisons and the Americas. With this, I now hand over to Burkhart, who will take you through the year's highlights by business areas. Over to you, Burkhart.

Burkhart Grund: Thank you, Nicolas. I will now review the business areas with all comparisons at actual rates unless specified otherwise. Let me start with the Jewellery Maisons, which include Buccellati, Cartier, Van Cleef & Arpels, and Vhernier. Sales were up by 8% for the year to EUR 16.5 billion. At constant rates, they increased by 14% with double-digit growth across all regions, underpinned by both jewelry and watch sales. In the fourth quarter, Jewellery Maisons maintained the momentum with sales up by 16% at constant rates. During the year, the Jewellery Maisons implemented measured price increases while continuing to preserve value for clients. At the same time, they demonstrated agile cost management, notably through efficient communications with spend below prior year levels, both in absolute terms and as a percentage of sales. This was accompanied by sustained yet selective network expansions. As a result, Jewellery Maisons managed to mitigate the significant impact of external headwinds on their costs and operating profit reached EUR 5 billion, up by 3% or by 20% at constant rates compared to the prior year. Operating margin remained solid at 30.5%. Let us look at the key developments of the year. The Jewellery Maisons saw strength across their iconic collections in both jewelry and watches, Love and Panthere at Cartier, Alhambra and Perlee at Van Cleef & Arpels, and Opera and Macri at Buccellati. Throughout the year, sparkling novelties contributed to further building desirability and attractiveness. At Buccellati, these included bejeweled bags and colored additions to Etoilee. At Cartier, the Love Unlimited and Clash color pieces and jewelry, and new watch creations for Panthere and Santos collections. Also of note, Van Cleef & Arpels introduced major Alhambra novelties as well as its new jewelry collections, Flower Lace and Fleurs dHawai. Our Maisons had successful exclusive events across several regions, building on outstanding high jewelry collections, of which Lile au Tresor at Van Cleef & Arpels, Nuit Equilibre at Cartier, and Ardis at Vhernier. In parallel, the Jewellery Maisons continued to enhance the client experience through selective network upgrades and openings while conducting targeted closures. Of note, Buccellati completed the expansion of its Hong Kong Princess flagship boutique, while Cartier opened a boutique in Tokyo Ginza in Japan and completed a major renovation in the Miami design district. Van Cleef & Arpels notably reinforced its presence in Europe through several openings, including in Florence, Frankfurt, and Hamburg. Vhernier continued to consolidate its foundations and ended the year with a net addition of 2 new boutiques, of which its first one in Asia. Turning to Specialist Watchmakers, where sales were down by 4% to EUR 3.1 billion. At constant rates, sales rose by 1%, led by strong growth in the Americas that compensated for declines in Asia Pacific and Japan. Both retail and wholesale channels slightly increased at constant rates. Signs of stabilization emerged with sales returning to moderate growth in H2, including plus 2% in the fourth quarter despite a double-digit decline in Middle East and Africa. Moving to profits. Gross margin was affected by unfavorable external factors such as foreign exchange rate movements and the rising gold price, in addition to a deleveraging impact from lower sales on fixed costs. While facing these headwinds, the Maisons have displayed solid discipline in managing their operating expenses that were down compared to the prior year, most notably in communication. Consequently, the operating result amounted to EUR 107 million, down versus the prior year, but up at constant exchange rates. Operating margin stood at 3.4% for the year. While Specialist Watchmakers overall posted mixed performances across the year, some of them showed notable improvement in the second half, of which A. Lange & Sohne, Jaeger-LeCoultre, and Vacheron Constantin. The overall sell-in, sell-out ratio remained at circa 100% over 12 months, reflecting sustained efforts to maintain a healthy level of inventory in the trade. Major novelties introduced during the year supported the solid growth of iconic collections such as the Reverso Tribute at Jaeger-LeCoultre. In parallel, the Maisons hosted notable events showcasing their distinct heritage and craftsmanship, including Vacheron Constantins 270th-anniversary global celebrations and Panerai's The Depths of Time Traveling exhibition, presented to the public in Florence and Shanghai. Overall, specialist watchmaker Maisons pursued selective openings, such as A. Lange & Sohne on Old Bond Street in London, while proceeding with targeted closures, mainly in China. Major renovation projects were completed in the year, such as the Piaget flagship on Place Vendome in Paris. Finally, let me conclude that earlier this year, an agreement was announced for the Damiani Group to acquire full ownership of Baume & Mercier, with completion expected in summer of this year. Let's move to the other business area comprising the group's fashion and accessories Maisons, Watchfinder & Co., the group's watch component manufacturing, and real estate activities. Sales of EUR 2 billion for the year were down by 2% at actual exchange rates. At constant exchange rates, sales were up by 3%, underpinned by growth in the Americas, Europe, and Middle East and Africa. The Fashion & Accessories Maisons saw a moderate increase, while Watchfinder posted double-digit growth. The retail channel showed solid performance and wholesale sales were slightly up. Sales in the fourth quarter were robust at plus 7% at constant rates, led by growth across all regions except, obviously, for Middle East and Africa, that was slightly down. The Fashion & Accessories Maisons maintained consistent and disciplined investment in their brand equity during the year. Overall, the other business area reported an operating loss for the year of EUR 96 million, representing a modest improvement over the prior year at actual rates and a more meaningful one when excluding unfavorable FX movements. Peter Millar and Alaia both showed continued sales momentum during the year. Peter Millar benefited from its further expansion into a broader lifestyle proposition, while Alaia achieved increased global recognition and strong performance of winter-spring 2025 and summer-fall 2025 archetypes collections across categories. Overall, the F&A Maisons saw robust increases in their ready-to-wear category. Also of note, Montblanc showed encouraging signs with sequential improvement during the year as the Maison progressed on its transformation, driven by writing instruments and high-visibility brand initiatives. Watchfinder had a solid year, supported by certified pre-owned partnerships with Cartier and Vacheron Constantin while benefiting from increased local sourcing. The fashion and accessories Maisons continued to enhance their retail network with selective openings and targeted closures. Notably, new locations included flagship boutiques for Montblanc in Sydney and for Alaia in Beijing Sanlitun, as well as the first store for Chloe in Australia. Let me now walk you through the rest of the P&L, starting with gross profit. Gross profit rose by 1% in absolute terms to EUR 14.4 billion, but declined by 250 basis points as a percentage of sales to 64.4%. Let me provide some color on the moving parts, starting with the production costs. In the full year, about 2/3 of the increase in production costs were driven by the net impact of higher raw material costs, notably gold. The remaining 1/3 was mostly due to the additional U.S. duties that amounted to circa EUR 200 million. Finally, like in the prior year, we made the decision to proceed with targeted buybacks at some of our Specialist Watchmaker Maisons, mainly in China. These pressures were partly offset by the positive impact from measured price increases combined with favorable sales mix, notably through higher volumes, combined with the shift towards higher-priced products. Taking these elements into account and excluding foreign exchange rate movements, gross margin was down 40 basis points for the year. As we anticipated at our interim results in November, the gross margin erosion was more visible in the second half than in the first -- as the stronger pressure from gold and U.S. tariffs was only partly offset by a higher contribution from price increases. Finally, foreign exchange movements for the year, mainly from the U.S. dollar, Swiss franc and the Chinese renminbi accounted for a 210 basis point negative impact, bringing the total gross margin down by 250 basis points. Next, let's look at operating expenses, which were broadly stable in value, reflecting our strategic investment to nurture Maisons long-term potential while exercising discipline on costs. I will now take you through the expenses by category. First, selling distribution expenses rose modestly by 2% at actual rates and 7% at constant rates, reflecting selective network expansion and salary increases. As a percentage of sales, selling distribution expenses accounted for 25.6%, down by 70 basis points. Communication expenses were down by 5% compared to the prior year or by 2% at constant rates. This evolution illustrated the Maisons efficiency at allocating their spend and to a lesser extent, the phasing of certain expense events such as Homo Faber. Administrative and other expenses were up by 4%. This increase was fully driven by higher nonrecurring costs that went from EUR 72 million in the prior year to EUR 164 million for the year under review. This EUR 164 million primarily reflected a EUR 99 million combined charge related to noncurrent asset impairments, mostly goodwill in addition to a EUR 59 million write-down following the announced sale agreement of Baume & Mercier. Overall, net operating expenses amounted to 44.4% of group sales, down by 160 basis points, reflecting the sales leverage from strong top line growth. This resulted in an operating profit of EUR 4.5 billion, up by 1% at actual exchange rates and by 23% at constant exchange rates. This robust performance reflected the positive contribution from strong sales growth and cost discipline that mitigated the impact of the external headwinds we faced during the year. Excluding the EUR 164 million of nonrecurring charges and the targeted buybacks that I mentioned earlier, the underlying operating profit was close to EUR 4.7 billion. Let us now review the rest of the P&L items below the operating profit line, starting with finance costs. Net finance costs increased by EUR 91 million to EUR 144 million for the year. Net foreign exchange losses on monetary items increased by EUR 314 million compared to the prior year. In addition, we borrow a EUR 170 million impact from lower fair value adjustments, mainly related to the group's investments in its money market funds and segregated investment mandates. These 2 items were mostly offset by a positive variation resulting from the group's foreign exchange hedging program, thanks to a EUR 374 million gain after a EUR 71 million loss in the prior year. On this point, I would like to remind you that the results of the FX hedging is not included in our operating profit today. Should we adjust our operating profit for the FX hedging gain of EUR 374 million, operating profit would be up by 11% instead of plus 1%. Returning to our fiscal year '26 results, let's review the profit for the year. Profit from continuing operations stood at EUR 3.5 billion, down by 8% versus the prior year. This reflected the increase in net finance costs that I just described, in addition to a lower share of equity accounted investment results, mostly due to our stake in LuxExperience. And finally, an increase in the group's tax charge. Indeed, the effective tax rate for the year was 20.4%, reflecting the group's regional mix and compared to 16.5% in the prior year, which included noncash accounting items. Overall profit for the year increased by 27% to EUR 3.5 billion, benefiting from the nonrecurrence of the YNAP write-down in our previous financial year. Cash flow generated from operating activities came in at EUR 4.9 billion, up by EUR 0.4 billion. This 10% increase mostly reflected 2 elements. First, a higher operating profit adjusted for the noncash items that I mentioned earlier; and second, lower working capital needs, mostly reflecting higher cash inflows from foreign exchange derivatives. Let me add that in a context of strong sales growth, cash consumption was broadly in line with the prior year, owing to solid management of trade working capital. Let us now turn to gross capital expenditure, which amounted to EUR 1 billion or 4.6% of sales. While down on prior year, CapEx included a higher share dedicated to investments in our distribution network. Up by double digits, retail investments represented over 50% of the total envelope and were largely dedicated to upgrading our internal boutique network. Manufacturing accounted for over 1/4 of our investments, mainly dedicated to the continued expansion of manufacturing capabilities, mostly for the Jewellery Maisons. Other investments included disciplined spending in IT and other projects, making up 20% of CapEx. Let us now review free cash flow. At EUR 2.8 billion, free cash flow was EUR 0.6 billion higher than the prior year. The increase was primarily driven by the rise in cash flow from operating activities, driven by the solid results of the group. Our balance sheet remains solid with shareholders' equity accounting for 57% of the total. In March 2026, the group repaid a EUR 1.5 billion corporate bond, which was issued in 2018 and had carried a 1% coupon. This repayment had no impact on the group's net cash position as the decrease in liabilities was matched by an equivalent cash outflow. Finally, net cash amounted to EUR 8.5 billion at year-end, an increase of EUR 239 million over the prior year. I would like to take a moment to summarize our cash usage for the year. As I mentioned earlier, cash generated from operations amounted to EUR 4.9 billion. It was used to fund strategic investments in operations and reward shareholders. On the one hand, investments in our business include EUR 1 billion of CapEx and EUR 0.8 billion in lease payments. In addition, EUR 0.6 billion were transferred to YNAP upon completion of the sales transaction with LuxExperience, on top of which other movements, including FX explained another EUR 0.4 billion of negative impact. On the other hand, the cash outflow linked to the group's ordinary dividend amounted to EUR 1.9 billion, reflecting last year's dividend. As a result, net cash increased by EUR 0.2 billion, as described in the prior slide, further strengthening the group's balance sheet. Let me now finish with the dividend for the year. Based upon the solid performance of the year and the strong net cash position that I've just described, the Board has proposed a total dividend of CHF 4.30 for 1 A share or 10 B shares made up of an ordinary dividend of CHF 3.3, up by 10% over the prior year, in addition to a special dividend of CHF 1. This will be submitted for shareholders' approval at the group's Annual General Meeting on the 9th of September 2026. Thank you for your attention, and let me now hand back to Nicolas for the conclusion.

Nicolas Bos: Thank you, Burkhart. Before moving to the Q&A, I would like to summarize the year for the group and share some concluding remarks. Richemont delivered remarkable sales growth and solid results for the year, highlighting the strength of our differentiated market positioning, the strategic value of our balanced regional footprint and the underlying agility of our teams. It is worth noting that the outstanding performance of the Jewellery Maisons that gained further market share in both jewelry and watches, led by their high deliverability and strong value proposition built over time. Importantly, in such a highly complex and volatile environment, the group maintained its long-term focus, prioritizing Maisons's future growth prospects while exercising consistent discipline on cost and operational execution. Looking ahead, we will have to navigate through volatile times, which will continue to require agility and discipline. While we remain vigilant about the macroeconomic environment, particularly as the consequences of the conflict in the Middle East are still unfolding, Richemont has the strong fundamentals to continue to create long-term value. This includes a distinctive heritage and brand identity for each of our brands, unwavering creativity to nurture our iconic collections and enhance desirability in addition to a balanced regional and client mix, building on deep local anchoring. All of this is underpinned by the group's financial robustness that allows us to invest in quality distribution and develop our manufacturing capabilities while consistently cultivating craftsmanship. I would like to finish by thanking our colleagues, valued clients and partners across the world for their continued commitment and support. This concludes our presentation. Thank you very much.

Alessandra Girolami: We'll now open the floor to questions. So please announce your name and company. [Operator Instructions] Okay. Let's start this time. On the left, Zuzanna.

Zuzanna Pusz: Zuzanna Pusz from UBS. I have 2 questions, but I guess before I answer it, I just wanted to congratulate the whole team and especially Burkhart on this great cost control. And also, I think we all owe an apology because I was the other day rereading the transcripts from 2022 when we were all pushing back why the margins were not exceeding peaks like among peers. And well, I guess it's all paid off. So I just wanted to say that. So 2 questions. One is on Jewellery Maisons growth. I think if I understand correctly, there's maybe roughly 6 percentage point contribution from pricing in order to offset partially the pressure from gold. But I presume you're not growing by volume alone. So there must be also some mix effect, which I've personally fallen victim of as well in the stores. So I'm just curious if you could tell us a little bit more of -- there's so much innovation, lots of products at nice or higher price points. If you could tell us just a bit of an idea of what could be the mix contribution within last year's number? And then the second question, maybe very quickly on the supply chain. We've seen a lot of your peers now focusing a lot suddenly on jewelry. There's been some pretty expensive transactions happening, some peers buying out workshops. It would be just interesting to hear your thoughts on that, if that changes in any way your approach to vertical integration, if you plan to maybe accelerate that? So these are my 2 questions.

Nicolas Bos: Thank you very much. Maybe I will start. On your first question, yes, I think that the growth for the Jewellery Maisons was a combination of value increase with some limited yet real price increases pretty much in the area that you mentioned, 5% to 6% and volume increase. And volume increase is in the like-for-like networks where we saw some growth, additional stores also in certain countries and the mix effect, which is also part of the equation, as you mentioned, where we've seen in some brands, some movements towards higher price points. But that doesn't mean unlike what we read sometimes that it's really only the high end and the high jewelry that's doing well. It is doing well indeed, but there is still very, very strong traction and success on the more affordable lines. But yes, we've seen with the Clash Collection that you seem to appreciate, for instance, very nice mix effect, particularly on novelties. On the second one for the Jewellery Maison manufacturing, yes, we watch what's going on around. It's been a competitive environment forever. I think that it has always been a category with many, many players. We have history and expertise in the field, we believe. So we've been consistently building our manufacturing capabilities in jewelry and Burkhart touched upon that. It requires some capital expenditure. But we prefer in most cases, to build because we know how to build additional workshops in high jewelry, in volume jewelry rather than to acquire. So it has happened in the past that Cartier or Van Cleef & Arpels or Buccellati did acquire certain specific workshops with a very, very unique expertise that complements our own, but the majority of our investments are very much developing our own capacities so that we really dedicate the resources and the cash to optimize the production capabilities.

Alessandra Girolami: Natasha?

Natasha Banoori: This is Natasha Bonnet from Morgan Stanley, and congratulations on the good set of results. The first question was growth consistent throughout the quarter in Q1, including and excluding the Middle East because obviously, you had posted a good performance in the Middle East, which is a big part of your sales despite -- in light of basically the conflict in the region. And are the trends excluding the Middle East continuing so far? And my second question would be, how should we be thinking about margins in fiscal year '27 because I believe as it stands, the intensity of headwinds you experienced in this fiscal year should diminish.

Burkhart Grund: Yes. Thank you for the questions. I'd say growth was pretty consistent throughout the quarter with obviously 2 exceptions. The first one being Chinese New Year was primarily in January last year and February this year. So obviously, that changed a bit the growth dynamic from one month to the other in our last quarter in China. And secondly, the Middle East, obviously, we had a consistent and nice double-digit growth in the first 2 months and then obviously, a sharp drop in the month of March, which I think all of us, including our peers have experienced. Sorry, can you just remind me what the second question was?

Natasha Banoori: How should we be thinking about margins in fiscal year '27 because I believe as it stands, the intensity of headwinds you experienced in this fiscal year should diminish?

Burkhart Grund: Well, I don't know. I mean we'll -- let's discuss that on March 16.

Johann Rupert: If he answers that, he can look for another job.

Burkhart Grund: Yes.

Johann Rupert: Let's just get things straight, okay?

Burkhart Grund: I was trying to anticipate that comment. No, I mean, I don't think I can seriously answer that. If you would have asked that question a year ago, I think no one would have foreseen what we experienced last year.

Johann Rupert: You would make more money where everybody's going if you could answer that. I'll quit and join. I'm serious. If you can predict that, why waste your time? Yes. I can predict the gold price, the oil price, anything. Three days. It doesn't have to be a year. I will go there.

Piral Dadhania: Piral Dadhania from RBC. So just a follow-up on the previous question. Are you able to provide us with a bit more quantification on what the realized gold price was in the 2026 P&L and perhaps also what the revaluation benefit would have been in terms of the tailwind to margins? And just staying on that point, maybe the average cost of gold on the inventories, just so we can try and calculate what the 2027 gross margin headwind could be from a gold price perspective. That's the first one. And then the second one is just in terms of brand level performance and category performance within Jewellery Maison, Obviously, very, very strong numbers on the top line. Could you maybe give us some color around Cartier versus Van Cleef versus Buccellati? Is there any big differences, or are they all performing like?

Johann Rupert: They are all performing well in the gold price, you figure out yourself. We are never, ever comparing in between the different Maisons. They are all 3 doing very well.

Alessandra Girolami: Anne-Laure?

Anne-Laure Jamain: Anne-Laure Bismuth from HSBC. So first question is on Jewellery Maisons, in particular, Cartier. Is it possible to come back on your comments about the performance by price point, which price point is outperforming? You talk about the fact that the affordable segment is also performing, but can we have a bit more granularity around that? And my other question is around China. So are the underlying trends there? And what are your key observations for this market?

Johann Rupert: I think you will remember, we've said it on numerous occasions in the past. I know your colleague on your left knows it that the higher the jewelry, the lower the margin. High, high, high jewelry, do not enjoy the same margins. That's what we'll say about the mix. It depends per Maison, and depending upon what they focus on. Right now, we have got a Cartier high jewelry show on outside Saint-Tropez. Is it? It's going extremely well. But that's a very long cycle. I think the thing that we must get into our minds because you have all these wonderful new words, soft luxury, low, hard luxury. I mean, when I started, none of you had heard of luxury. It was a boring business, which was very nice for me because it wasn't sexy. There were no predatory buyers out there. And certainly, we didn't feature in the newspapers Suddenly, it's sexy and everybody is here, and it's a lot cooler for you to be here than at an oil refinery's announcement of results, even though they make 5x more than we do. I've noticed that when I go to dinner, Cartier maybe 1/5 of the 1/10 of the size of the Chap's oil refinery, and I sit at a better table than he does because it's not that cool to own an oil refinery. So you're all here because you like about nice things. But there's nothing special about luxury goods. If there's a real catastrophe, the world is not going to miss us. It's not shelter. It's not food. So we mustn't think that we are these wholly beautiful. It is nonsense. We're just very lucky to be in a very beautiful business where we deal with lovely people and with beautiful handcrafted products from the conception right through the end. But our business, Richemont, takes longer from when our designers start conceptualizing until we're ready to offer, not sell, offer our products, takes a while. So we have a pretty good understanding I mean we'll sit at the product committee and we'll see a year or 2 in advance because we know what's coming with the combined nous. Alain, Perrine and I together is over 100 years of experience. Anton has now been there 20 years. How long have you been?

Anton Rupert: 35.

Johann Rupert: 35, but not product committee.

Anton Rupert: 20.

Johann Rupert: So it's 240. We have a pretty good idea. The Germans call it finger pitch and a few, but we have a pretty good idea whether it's going to sell or not. But that's longer. That's not a spring line or a cruise line. We don't do cruise line of any impact on our group. So for us, we don't control the gold price. We have to make sure that our product mix is affordable to customers. And that's how we look at the gold price, not a speculation, but we need to hedge, we will hedge just enough to be able to tell our watch manufacturers and jewelry, roughly this is the band that your cost of goods sold will be. So you can competitively price, but it's driven by marketing and by competitive positioning. Is that helpful? Not as helpful as you'd like so that you can write down in your little model. You know what? You carry on like this. I'll have an AI model. I'll take your questions, put it in, and I'll save you the trip here. I saw last night an AI model of somebody who fed his public information in, Nikesh Arora with Palo Alto, and he only fed in public information and Anton was damn good. He said, why, sorry, JPMorgan? He said, why do I need JPMorgan? He happened to mention in that case, JPMorgan. But you could basically put anybody in. If you want to be good, you've got to pick up what's not obvious. You've got to pick up nuances. You're going to have to use your nose more than asking questions like what's the average gold price, which you can work back into your model. You're going to have to ask your friends, what do you like? Did you see that line? Do you like it? I go and ask sales ladies. I do shopping before any of you heard of it, mystery shopping for 30, 40 years. And I got to ask the sales ladies because they deal with the customers and ask them, so what do you think is hot? What -- and then in the end, I reveal who I am. I don't stand on window corners -- sorry, on street corners, and I count. Have you ever stood outside the shopping mall or inside and look who walked into MS? Who walked in? I know you do, but you're a special one. You excluded here, okay? But I'm asking in general, have you ever done that? Well, guess what, today, they do it with drones, and they look at shopping centers and they actually use AI to see who goes well. But that's how you get a competitive advantage as an analyst. Is there any question you ask me that's of real value to you, I'm not going to tell you. It's like people who consistently use business consultants, Bain, whoever McKinsey. They come here, they steal all your information, they go and sell it to your competitor. You've got to be out of your mind to do that. The once or twice where we do have a competitive advantage, we've been working together for decades. I trust them. They trust me. We trust our colleagues in the room. We're not going to blabber it down. And I'm just giving you a tip. It's what you can't see that's important. And your friends will tell you what's hot. They will tell you XYZ is overpriced, XYZ has dropped its quality because we get it even if we don't ask. You go to a dinner party, somebody is bound to tell you, you've dropped quality there, or you've overpriced there, and all you have to do is listen. I doing your work. When yam sorry, you can't expect of us to do your work. Clever questions, its doing your work. When you ask that to Burkhart, he knows that he is not going to answer that. Right. Now here we go for the maestro. Luca Solca?

Luca Solca: Thank you very much indeed, Johann, for saving me the effort of announcing me from Bernstein. I lost track because of the various variations and what has been going on with duties in the U.S. Maybe you can tell us as you're very close to the American administration and President Trump.

Johann Rupert: Sorry, I had access to the President. There's a huge difference between being friends and having access. Solca, I had access.

Luca Solca: For sure. Are you going to be able to -- because of the Supreme Court ruling, are you going to be looking at getting some of the duties?

Johann Rupert: I won my bet. I won my bet. Dinner, thank you. I'll tell you the name of the restaurant. I said, Luca Solca is going to pick up on the fact of the tariffs. How much? And what are we going to do? Luca, we haven't decided. We have another week, 8 days, is it?

Luca Solca: End of the month.

Johann Rupert: Basically, end of the month to decide -- and we're looking at what the other people are doing. Now on the one extreme, there's somebody who's noticed to the world that is going to reclaim because there was a tax on consumers. We -- if you look at our pricing, we've always believed in a worldwide pricing to stop, as you know, gray marketing and our products are high margin, low volume. Whenever you have high-margin, low-volume products, they can move seamlessly across borders. They can be stuck in a plane. It's tougher than bulky things, dresses, et cetera. So we've always had to make sure that our global pricing was roughly the same. So the major impact in the last year, and now you guys must shoot me, that I don't say the wrong stuff. The major, Nicolas Bos, has been gold price $1. Now you know Luca in the past. When the gold price went up, it was basically the dollar down and vice versa. This time, Luca, we had both up. It was rather unforeseen. So that hit us more than the tariffs. The tariffs, I think we've made it public, $300 million, and we are deciding upon what we're going to do. But it's not as big an impact on our P&L and our operating margins as the gold price and the dollar, Swiss franc, dollar, euro. We must all as tariff payers watch that we don't reclaim the tariffs back without handing it back to the consumer. Now we did not use price increases to offset. But who knows? We may have one sales lady or salesman somewhere saying to one client, erroneously, I give you my word that, yes, because your President did it, so we increased the prices. And then we have a lawsuit. So we are very cautious. We're looking at everything. I can give you my word, we did not use pricing to offset tariffs. If I could get the coal and the dollar back, then I would be front of line, but there's no counterparty that's willing to do that. I have no idea how it's going to play out. We are -- I was with the Swiss government 2 nights ago, and we are still in discussions with the United States on a finalized agreement. But there's nothing bad emanating out of the United States heading our way at Switzerland. I find it very sad though that Helena has to appear in front of parliament. I mean, had it not been for the delegation going to Switzerland, going to the White House, 40% plus, a brilliant company like Pilatus would have had 25%, 30% of its people unemployed. We could not withstand 40% plus tariffs. What these people think when they say why did they go, et cetera. We didn't negotiate. I mean how do you negotiate with the United States, you bank. Okay. It's a big difference when I saw the President, I said we're not negotiating, sir. Henry Kissinger just said, if you want to negotiate, you need 3 aircraft carriers standing out there. China can negotiate. The whole of Europe can't negotiate, Lone Switzerland. So we really applied to their goodwill and said to them, we're not against America Switzerland. In fact, please just here -- and the good thing is America is now in surplus with Switzerland. And it was all about the gold price. because they thought gold was going to be tariffed. So there was a huge amount of raw gold flowing, not jewelry, gold flowing into the United States at that stage. So it looked like the United States had a huge trade deficit with Switzerland. We pointed it out to, and it's reversed. So now Switzerland is in a deficit or the United States is in a surplus. So no rational reasoning for punitive tariffs. which would have been devastating for Switzerland.

Luca Solca: Abouslutely. Absoulutely. My second question was on the perimeter. I think the market investors saw with pleasure the business simplification you've been bringing forward, the divestiture of Baume & Mercier. Can you tell us maybe how the other divisions businesses are doing, and if there's any further latitude and opportunity for simplification?

Johann Rupert: It's sad because Baume was one of our very first Maisons. At times one must realize that for Baume, we're not their best owner. They need more flexibility They need to crudely put, they need to be able to act more entrepreneurial. We have very fixed cost structures. I think that the new owners Baume was always an Italian brand. It always did very well. We wish them luck. We've tried, and sometimes you must say it's better in somebody else's hands. There's nonsense about Jaeger. Please, where's UBS here? You apparently believed what you read there. Yeah, please, whoever says that, never trust him again. There are two or three of them who are bloggers who really don't have a clue and who are spurring nonsense. Ad for us, it doesn't mean a damn thing. Imagine if you're a worker at Chloe. It's unfair. Sooner or later, somebody must actually sue them because it's a lie. It was never discussed. In fact, you want to know how we got the whole group? When LMH was bought, we started a mobile phone business in South Africa, Vodafone, and we were in partnership with Vodacom, with Vodafone. You can't believe it. I saw Julian Horn-Smith, that was our counterpart, the other day at one of my grandson's schools. Because Mannesmann had bought the mobile phone business in Germany, Vodafone bought it. In it, they had the LMH. We really wanted the LMH. We didn't know how to make watches. We were big with Cartier, but mainly quartz. Alain didn't like it very much, but I told him that they're quartz. Alain and I are very close, but I had just become sophisticated enough because I don't know whether you know Guillaume Pictet, Bank Pictet. Well, we worked in New York together, and I had a quartz watch on, and he went like this, Quartz, ugh. I said, What do you mean, ugh? He said, You need a mechanical watch. Any case. So, little did I know how much trouble we were going to cause ourselves because mechanical watches need a lot more after-service than quartz. We really decided this is the last. We have to get it. I'll tell you, I went to see Nick Hayek Sr. We agreed either he or I buy this. We can't let the French or anybody into Switzerland. So,we bid, but I then found out that there was a secret that the Audemars family owned 25% of Baume & Mercier. Sorry, of Jaeger-LeCoultre, and LMH the other 75. I went to see Jacqueline Audemars and the current head of, is he Olivier?

Luca Solca: Yes. He is Olivier.

Johann Rupert: Olivier. One of the first times I had a video conferencing, I bought their 25% in Jaeger-LeCoultre. I went to see my hero, absolute hero, Mr. Gunter Blumlein, who built the whole group. He was a systems engineer. He was also one of the best copywriters that I've ever seen. He wrote all the copyright for Lange & Sohne and for that sorry lady's somewhat provocative, non-woke copy that he had for IWC about women shouldn't do this and that. Any case. I was the only one who actually went to Glashutte and who went to, I didn't know how to pronounce it. Because I asked them How do you pronounce the town where IWC's manufacture is? How do you pronounce it?

Unknown Analyst: Schaffhausen?

Johann Rupert: Yeah, I see Schaffhausen. You're wrong. It's Schaffhausen. Schaffhausen. I go there, I said, Please, can I go to Schaffhausen? Taxi driver said, No. I had to explain. We went to Schaffhausen, and I met with them, and my hero, and we really wanted to, was Mr. Blumlein, who basically recreated Lange. We bid, and we won. Then he had bone cancer. It was an absolute tragedy. The key that he used, and I think you must all understand this, his engine that he had and the key that he used, the expertise that he used, is Jaeger-LeCoultre. Up till today, Jaeger is the watch company, the Maison, the manufacture, that can do nearly every component of a watch, except for probably crocodile skin, lizard straps. They can do everything. In a sense, they have helped so many of the other Maisons if somebody else runs into trouble. There is no way in which it would ever have been contemplated. I'm saying this to you so that when you hear these stories, please do not listen, because it's rubbish. We're very loyal to them. They make phenomenal watches. What have you got on your arm there, Anton?

Unknown Executive: The Cardinal Points Vacheron Overseas. Oh, okay. That's only because you and I can't get the steel. Because we're waiting for the steel. Oh, okay. That's only because you and I can't get the steel. Because we're waiting for the steel. They've made a new steel watch, which is thinner than, yeah

Unknown Analyst: The new Master.

Johann Rupert: Sorry? Yeah, the Master. The new Master line. That is spectacular. It's not their fault. It's our fault that we haven't been able to explain to the rest of the world that it's the watchmaker's watchmaker. If you speak to watchmakers, they look up to Jaeger. Trust me, I won't use the words in front of ladies, okay But, don't believe it. Any case, have you got other questions, Luca? I'm sure you do.

Luca Solca: I was just thinking of business simplification in the other division. I'm thinking, you mentioned in the presentation that Montblanc is proceeding in the right way. There are sort of bits and pieces in that business. With things doing very well, like Peter Millar and other brands not doing very well.

Johann Rupert: You're 100% correct. You can have four of us sitting here. I had 20 minutes yesterday asking people, and before, that we have people who have the habit of turning simple things into complex things. Those days are over now. We want complexity refined to simplicity. And trust me, we are going in that direction. It is a very good question.

Operator: Thomas please.

Thomas Chauvet: Good morning, Thomas Chauvet from Citi. Congrats to everyone for a strong end to the year in a difficult environment for the sector. I have two questions. The first one on the Americas, another strong year, +17% in constant FX, with extreme stability quarter-on-quarter, while the environment has started with Liberation Day at the start of your fiscal year and ended with the war in the Middle East. Could you explain what you think are the structural changes in the high-end luxury consumer in the U.S., perhaps the hard luxury consumer, that explains such resilience? Do you think this is largely due to wealth effects and the stock markets? Secondly, on the Chinese consumer and the potential behavior changes. A year ago, Nicolas, you provided some very interesting comments about the strong success of Chinese-born jewelry brands, particularly Laopu, not to mention them. How do you adapt, a year later, to these local players? Is it about being very differentiated on style, craft, quality, slightly different pricing, I guess, as well? Or do you see opportunities to acquire brands on the ground in China? Richemont was even a pioneer with Shanghai Tang that you acquired in the late 1990s when no one had ever thought of doing such a move, I guess. We heard Mr. Rupert in the media interview this morning, saying the group could pursue acquisition if there were interesting opportunities. Are there interesting Chinese jewelry brand out there?

Nicolas Bos: Thank you very much. On the first one, in the U.S., I think our activities are very much linked to consumer confidence. I think that there is quite a high level of consumer confidence in the U.S. When you're over there, you feel a very positive feeling. That translates into a very good level of sales. It's true that there's probably been a refocus, it cycles, obviously, but a refocus towards jewelry, watches, more iconic products with a long-term value, compared to probably more fashion and accessories in the U.S. We see that clearly. There's also been a long ongoing trends towards internal brand retail versus wholesale in the U.S. We're benefiting from these impacts. We've seen them, as you mentioned, very steady throughout the year with very good steady growth. That's for the U.S. On China, we had a discussion last year. First of all, I think that, probably Chinese owners are the best at running Chinese brands, and probably we are not so bad at running Swiss brands or French brands. So anything artificial like trying to be there by acquiring something local that we don't necessarily fully understand or master, is not necessarily what we look for. What the success of Laopu and a few others taught us and indicated, we discussed last year, is that there is a market that was rather stable and that's not at its all-time high for the last two years. There is very much an interest in newness, in new brands, in new propositions. Probably these new emerging brands, Chinese, for that one, answered that expectation. We see other ways to answer that. We see, for instance, with the success of Buccellati in China, which is still quite recent in the country and considered a bit of a newcomer, although it has a very long and respected heritage, that is getting a lot of traction. We've seen also with Cartier, which is long-established in China, the success this year, for instance, of collections like Clash or Panthere watches, that were not necessarily the historically successful collections in China, but that under a new light, together with high jewelry, are highly in demand. I think that we feel that there is really a renewed interest in China for creativity, and maybe going for a different proposition that can come from the same historical brands, but has to be renewed.

Johann Rupert: [indiscernible] thousands of times, but we've come to suspect over the years that what Nicolas said is people, did you say feel good or what?

Nicolas Bos: The confidence factor.

Johann Rupert: The confidence factor. A feel-good factor. People are willing to spend if they feel good. It's not necessary that you have to have a lot of money in your pocket and no debt, but if you feel good about the future, if you're confident about the future, then you're more comfortable spend and to buy and to give gifts. If you're worried, concerned, you're not happy, it dampens that. In America, in the United States, we internally, we joke, that a nation's happiness, it's through economic status minus envy. In the United States, people are not as envious of people who are successful. In Europe, they hate success to a very large extent. You're sinister. In the United States, it's a much younger society. People still say, "Well done," because they also believe that they can work hard and do it. In Europe, they believe, Sorry. By and large, people believe, Even if I work hard, I can't do it. My son and I were commenting yesterday, the exception is Switzerland, where the rich do not behave in a vulgar way. People are much more conservative, so there's not this hatred of the rich. It's starting in the U.S. on the campuses now with the students. If you see Eric Schmidt got booed when he made a speech about AI. Because these kids leaving the college have got debt and they can't find jobs. Any commencement, or actually it's now graduation, and you've got to watch it. This is what I was trying to say if you want to know. Watch what goes on. Sniff. I'm a lot older than you. I watched that Eric Schmidt speech because every time he said AI, everybody booed. We discussed this last night with this friend of ours who is one of the top Silicon Valley CEOs, and he said, Johann, they are realizing that they are not getting jobs. You are a college kid, you leave college with debt, and you are not finding as many jobs as 10 years ago. In 10 years' time, five years' time, will that feel-good factor still be there? They are talking in numbers that I do not understand. I have got to rely upon Anton with all the acronyms when we have a discussion with these techies. Every second word, every second sentence has got a new acronym in that I have never heard of. This is where the money is. The new IPO is EUR 1.6 trillion. That is half of the U.K.'s GDP. It is numbers sorry that I cannot quite get my hands around. They still seem to be confident. If something goes wrong in AI and that AI loop, I am told by Nikesh and others that it's gone too far now. It is self-fulfilling. It will carry on. The build-out of data centers and I'm assured it's real. Whilst that is carrying on, they're going to grow faster than Europe. Luca, we bombed people not once, not twice, three times on the suspicion that they might have nuclear weapons. We're giving three or four individuals a capacity that's going to affect our grandchildren far more with no guardrails. Agentic AI, we're handing over power. I'm told, and nobody contests it, that if you want to stop people from putting viruses into your system, If you want to stop bad agents using AI from infiltrating your system, you need AI. We're going to have AI fighting AI, and I tell you, I'm not going to know what the hell they're doing to each other. This is three years from now. Two years, Anton, what's your bet? three years?

Unknown Executive: It's already happening.

Johann Rupert: Okay. It's already happening. The point is, you're asking me about the oil price in a year's time or so, or gold price or what. What scares the living daylights out of me is stuff that I really just don't have a clue of. We're constantly thinking, how can it affect us? Stopping the choke points, the entry points. There we have the gentleman sitting who never knew what he was signing up for. Behind you. That would bother me more if I had to be in your shoes. I would look at which companies, actually, like SaaS companies, can be wiped out in one month, two months. I think we're on the cusp of seeing. We've seen the biggest growth, but we could, it follows, see the biggest destruction of wealth, of people who never understood what was going to eat them. Software as SaaS, as a service, those companies. Can you imagine if I was, I wouldn't sleep at all. I would probably have sold and gone farming. The real issues are things that we cannot foresee. Things that we can foresee, I can assure you, Burkhart, we're in a better shape now, Nicolas, than I can remember ever. From balance sheet through tech, through everything, supply chain, for everything traditional that we could foresee, we're in great shape. Something out of left field.

Operator: I think we have a few more questions. Chris, please.

Chris Gao: Thanks for the opportunity. This is Chris Gao from CLSA based in Hong Kong, and congrats on the very resilient results amid the complex environment. I have two core questions regarding China. Firstly, we are very happy to see Greater China on the path of coming back. My question is on the midterm outlook of the competitive landscape in the China market. On one hand, in the past few years, definitely the market noted fashion cycle of some local heritage gold jewelry has been picking up the momentum in China, like [indiscernible] standing out. On the other hand, together with Richemont, we also see some other luxury peers deploying more resources in the jewelry segmentations and also sequentially more in China market. Right, how would you see the competitive landscape in China in the next few years? I remember last year, Mr. Rupert mentioned that there is definitely universal desirability on Richemont brands. Are you seeing or do you expect to see the high-net-worth consumer in China shifting more towards global brands in the future, especially to Richemont brands in the next cycle? This is the first question. My second question is regarding the drivers of recovery that you see in Greater China right now. Wondering if the comeback is more from the existing loyal customers, or you have been seeing a very apparent new consumer recruitment. As Mr. Rupert said, now we are seeing AI industry, for example, as a new wealth effect driver. Right. At the same time, how does aspirational customer spending trend look like now, and how would you comment on aspirational consumers recovery trends going forward in China?

Johann Rupert: That's a very good question. I'd rather have you answer that, thank you.

Nicolas Bos: I think there is definitely, and has always been, at least in the last 25 years, a very highly competitive landscape in China, in luxury, in jewelry and watches. That's going to remain. Probably, as always, some players are getting stronger, some players are getting weaker. There's definitely an effect of cycles and trends. I was mentioning what we see today, that there is a very strong clientele, there is a very strong desire for our categories, but there is an expectation of creativity and renewal, which we have to answer to, and that can be found in all brands, in historical brands as well as newcomers. I think it's a good reminder that we are here to be creative, we are here to be enchanting, we cannot rely on past successes, and we start to see really very positive effects of that in China. Our view in China is also to adjust and right-size our presence. I think that I was mentioning the confidence factor. Maybe sometimes, we got ourselves a bit carried away by the confidence factor in China in the past few years, where everybody thought in China and advised that third-tier, fourth-tier cities would be very strong places for luxury retail. There were so many new real estate developments, so many opportunities that probably some of our brands, and some of our competitors also, overexpanded their presence. Now we are really fine-tuning our presence. Typically with Cartier this year, we reduced our presence by five point of sales in the country. At the same time, we are upgrading and improving some of the major ones. I think that's really a phase of consolidation and stabilization. We see a clientele that's a very loyal clientele. I was mentioning the Cartier High Jewelry event that took place in Beijing last November, that was extremely successful, this is primarily a clientele that knows Cartier very well, is very familiar with the high jewelry collections and is a loyal clientele. At the same time, we see also a renewal of more aspirational customers that really appreciate both iconic historic lines, Alhambra, Love, and also expect new collections that are, again, very successful. I think it's, for us, a very interesting time. We still consider that stabilization is important. We don't bet on China coming back to growth patterns that we've seen years ago, but we feel it's a very important moment to consolidate the presence of our brands over there.

Alessandra Girolami: Next question, Nick.

Johann Rupert: Are you from Chaina?

Chris Gao: I'm from [indiscernible]

Johann Rupert: Okay. Well, you've heard of Shanghai woman.

Chris Gao: Yes.

Johann Rupert: Do you really think Shanghai woman is not going to decide for herself?

Chris Gao: [indiscernible]

Johann Rupert: Shanghai woman decides for Shanghai woman. Not Shanghai men, and certainly not whiteys sitting in Switzerland. They're the strongest group of people I've met, right? Do you agree?

Chris Gao: [indiscernible]

Johann Rupert: They make their own decisions.

Chris Gao: No. In the foreseeable future, definitely, you can see, I would say, not only China, but the emerging market consumers, definitely, everybody have a stronger understanding towards themselves towards the brands.

Johann Rupert: You're very polite. My Chinese girlfriends, lady friends, are not as polite. They tell me straight, That's a stuff-up. This is good. That's bad. Trust me, they decide for themselves. I have a friend who's a big industrialist. Originally Hong Kong, moved to the [indiscernible]. He's probably got 300,000 people working for him, and he has group of every year he picks the best of the youngsters, the intake. About 10 years ago, his partner came to him and he said, We're going to need affirmative action here. He said, What do you mean? He said, We're going to have to promote certain sexes. He said, What are you talking about? He said, If you looked around, of all of our future leader, 85% are women. The men don't make it, so we're going to have to artificially promote men. He showed me the list, and he said, They're better. I say to my colleagues, Go and speak to them, ask them what they want, and when they say they want it, just make it. Don't be French. Don't be, You know better. Trust me, they the boss. Okay? That's my attitude.

Chris Gao: Really appreciate it.

Johann Rupert: Do you realize that they're not around the table anymore, but when I saw [indiscernible] on our French colleague of ours who ran Cartier in London. I know [indiscernible] here. I said, Bambi, what's that? He said, It's [indiscernible] I said, What is that? He told me what it was. I came back and I said, Please make it. Now, a little secret. If in our group you suggest something to a German, they think it's an instruction. You've got to be very careful. You can't just make a joke and make a suggestion. They'll do it. If you give a Frenchman an absolute instruction, it's a mere suggestion. Okay? Maybe he was meaning that, but we don't think he was serious. I said to him, "I want you to make it. They didn't, and one year later I really got angry, and when they finally did it, I went on one of my trips, and I went to China. I'd just been to Japan, where they thanked me, all the sales ladies. You know how polite the Japanese ladies are. They don't give you a hug. They, "Thank you." I said, Why thank you? Said, No, we got it. I said, Yes. It's selling like crazy. I go and I find out that our friends at head office decided [indiscernible] is too aggressive for their Chinese clients. I didn't even bother. I asked [indiscernible] on our board. She just burst out laughing, said, "We are the most aggressive people on Earth. You need to change your marketing team. They clearly do not know us as clients. So, you ask me about China. I actually think we go to China and we ask the Chinese, then we've got a good chance. Would you agree?

Chris Gao: I will see China definitely have them with long-term resilience and the Chinese women beside their career path and decide on the..

Johann Rupert: Thank you. All the response people you listen here, okay, Chinese people decide their own career path.. It's -- I love it here. But this is my real answer for you. As to why we've been rather slow. It's not that anymore.

Alessandra Girolami: Next question from Nick, then I think that we have 2 more.

Nick Anderson: It's Nick Anderson from Berenberg. I just had 2 [indiscernible]

Johann Rupert: Yeah. Sorry. Sorry. Just the current head of Cartier loved in China

Unknown Executive: For a long time.

Johann Rupert: For a long time. I think he's fluent in Mandarin.

Unknown Executive: Not about speaks in Mandarin[indiscernible]

Johann Rupert: No about speaks Mandarin but so you'll see a change.

Nick Anderson: I had two questions, one on the balance sheet, one on stores. Just on the balance sheet, specifically on cash balances. You've always been very, very clear in the past about the benefit of having a very healthy balance sheet and the large cash balances. I just wonder if you can help us how you think about, is there an optimum size? Is it an absolute amount? Is it relative to sales? I don't know. Just help us understand that. Thank you. On the stores, you've obviously done a lot of right-sizing this year. Is that process largely complete or, going forward, are we likely to see a similar-sized store network that you aim to drive, I suppose, effectively more revenues through existing stores? Might we start to see new store openings on a net basis again?

Johann Rupert: I think better rather than small. Is that a fair statement, Nicolas?

Nicolas Bos: Yes, exactly. And it's never completed. I mean, a network is a leading organism. So it will -- there will always be adjustments and improvements -- but yes, there is a phase of consolidation right now. It's very much more to your point about improving the quality of the network rather than continuing to expand the number of ...

Johann Rupert: Yes. But. I think he must not think we're going to have fewer and smaller it's -- and that's part of not having a problem with cash. We can improve, improve the shopping experience.

Nicolas Bos: And if I may, evolve over time. I remember from [indiscernible] . When we 20 years ago an optaimum size was 100, 120 square meters. Now an optimum size is probably 300 square meters of course, the offer has expanded. We welcome more clients. So this is also evolving with time and the desirability of the brands.

Johann Rupert: When did I meet Mr. [indiscernible], when will we buy [indiscernible] ?

Nicolas Bos: 1999.

Johann Rupert: So it's 26 years ago. We paid EUR 300 million. Tell him our turnover..

Nicolas Bos: It was around EUR 60 million.

Johann Rupert: Tell him your losses.

Nicolas Bos: It was around EUR 60 million.

Johann Rupert: We paid EUR 300 for something that turned around EUR 60 million, that also lost EUR 60 million, and we did it over the phone with a gentleman. Today, Nicolas because it's a EUR 5 billion brand. When people talk about attacking our competitors, Cartier, they forgot that [indiscernible] is killing them. It's a remarkable success story. Go from EUR minus 60 million to EUR 5 billion, so proud. So, This is really what I'm going to say to you. It's a group of people working together in a culture of trust, where you don't get killed if you make a mistake. Don't take it twice, then we'll have an issue. You can make 1 mistake as long as you admit it immediately. And we're having fun I think if you carry on doing it you're also during bad times, such as now -- we've -- I've said to you and look at our member, I said a few years ago, in bad times, we tend to outperform our competitors. It's not great at the moment, especially not for some of our competitors. So we have the flexibility. And the other interesting thing is, as Nicolas will tell you, it's easier to gain marketing access and to do deals when other people are cutting their marketing. So you gain ground in bad times and gain loyalty from trade partners. Is that good?

Nicolas Bos: Very much.

Johann Rupert: Yes. Are there any other questions?

Alessandra Girolami: Okay. James?

James Grzinic: It's James Grzinic from Jefferies. I wanted to piggyback on your sense of smell on demand elasticity to gold price. I presume it's very different in China relative to Western markets. Can you help us map out the extent to which you are concerned or otherwise to sudden adjustments in gold price. It looks like it's...

Johann Rupert: I'll give you a tip. when I buy gold sell Okay. It's sure indicator of the high point.

Unknown Analyst: So what are you doing right now?

Johann Rupert: I don't have enough money, they have to buy I bought 5% from the high point. Okay.

Unknown Analyst: Got a margin call?

Johann Rupert: No, I did not get the margin. So nonsens.

James Grzinic: But on all seriousness, it looks like short-term Chinese consumers are bearish or have been bearish on gold prices.

Johann Rupert: I'm not sure that it's consumers and whether it's not central banks. I'm not sure. I don't know who was buying. What I can say to you is, if you've ever been in a gold mine, and you've got grandchildren, and you know governors of central banks, then maybe you should think of 2% or 3% in gold for your grandchildren. I promise you they're not going to print new gold. It's impossible to get it out at $5,000 an ounce. Okay, if you trust guys with crypto, it's over centuries. I will not go tell anybody [indiscernible] or 50%, but 5%-10%, 5% put it away. Anton is going to have a son or daughter in a month's time, then I'll have eight. I want to leave some for all eight grandchildren that they can maybe get through university, put a payment on a house and how do I make sure it's there. Yes, you can put some in the S&P. But do I trust central bankers. I used to be a banker. When I found out that I understood certain things better than them, then I got very when they were a lot younger than me, I got even more worried. So that's the reason for gold. But the problem is it's affected us. On the other hand, you know what psychologically, it's given our clients a feeling for hang on, it's gold. So they -- it's a value store.

James Grzinic: I guess that's my question in terms of -- I understand production costs and the long-term bias to inflation. But if I think a world unpredictable, big adjustment downwards for whatever reason in gold prices, is that an issue in terms of demand in Western markets? Is that something you think about?

Johann Rupert: I don't think -- I think people who are worried that 4,000 and 5,000 are still worried at 4,500. It underpins the feeling of value of luxury. It makes it very expensive. And we've got to be very cautious. But what would you say you're trying to -- you sell it to...

Nicolas Bos: Exactly what you say. I think that on one hand, it's a challenge because it has a strong impact on the gross margin. But on the other hand, it plays in favor of jewelry and precious watches because there is this feeling of interest value. [indiscernible] investment in the sense it's going to come with a return, but investment in the sense that you're going to be able to transmit, which is what jewelry has always been about for thousands of years. So should gold go down, I think at the end, there's going to be less pressure on the margin, going to enable to go even more into creation with gold products, which is a bit more difficult these days and to maintain them at a reasonable price so that they are still affordable also to an aspirational customer, which is being challenged in some markets today.

Alessandra Girolami: We'll take one very last question for.

Unknown Analyst: And I'll be quick. First, we're obviously seeing you jewelry overall and you significantly outperforming luxury market. What is your idea on who you are taking market share away from? Is it leather goods? Are you just expanding the boundaries of your category? Is it other nonconsolidated players given the retention of value of Cartier and Van Cleef and other products? And my second question is your communication costs went down this year, and you are still talking about keeping them stable. And with everything you talked about AI and overall technological progress, do you think you are more efficient on your communication and marketing? Do you think there is, I don't know, a ratio where EUR 1 spent on marketing next year would be worth EUR 1.5 a year before. Do you think you can keep it at 9% and reach more consumers ultimately?

Johann Rupert: Thank you. Thank you for asking the question. I gave them hell and I told them I want that answer, which was given to the Board yesterday. The same thing that you did [indiscernible] our Company Secretary saying that. One of the worst times to me, never, ever, ever if you can buy anything from private equity because they will cut research and development, et cetera, and then communications just before they sell it to you. But one of the things I watch all the time is communication expenses. The problem is the smaller the Maison, the bigger percentage of turnover you have to spend just to get noticed. But when you get to $5 billion, $7 billion, $10 billion, $500 million is a lot of money. When you start spending, really spending $100 million. So we ask for a very good explanation, which he can give you now.

Nicolas Bos: It's a very good question, and it's actually...

Johann Rupert: I really mean thank you...

Nicolas Bos: A series of factors. The first one is that, yes, some of the brands and typically luxury brands are reaching levels in absolute terms where they have the visibility that they wish to get. And we don't want to be all over the place. We want only to have very measured selective communications. We don't believe that any noise in the communication is good for a brand. So we want to make sure that we have the right threshold. So it's true that the bigger they are at the end of the day, the less they need necessarily in percentage. The second thing, and the Chairman mentioned it, that it was a year also with a lot of disruption in the industry, in the market. So you could optimize your marketing spend. You could get positions in advertising communication for -- in better conditions than before. So with the same amount of money, you could get a better impact. And the second -- and the last part is that, yes, with the environment, we've been very, very cautious together with the management of the brand throughout the year. And we maintain cost discipline, including on communication. It's true that we saw quarter after quarter that the desirability of the brand was there, then the results were very, very positive. But yet, we maintained that cost discipline. So that drove also for a decrease in the percentage of communication compared to the growth of sales.

Johann Rupert: But you said to me yesterday, Nicolas, which I forgotten that we exceeded our budget in turnover. And as a result, simply mathematically, the percentage of turnover that we budgeted...

Nicolas Bos: Went down...

Johann Rupert: Went down. So it was a straight mechanical flaw. But trust me, we do not try to save money by cutting communication. But on that note, it's changing so much. I mean my son's generation communicate and get their information through totally different means. It's a young person's job that for all of our communication, we need to realize that the medium has changed. Last question...

Alessandra Girolami: That will be the last question.

Unknown Executive: Yes. If I look at the geographical trends, it seems that the growth in Greater China accelerated significantly Q4 compared to Q3. If I have seen well, you haven't given the growth in Greater China in Q4. I'm not sure you give it. But my question is, do the efforts you mentioned at Cartier on the product side were already a visible result in Q4 in China in Q4 New Year.

Nicolas Bos: Yes. Yes. We saw -- once again, we mentioned it a couple of times today. We are very -- we believe there is still a phase of consolidation. We see an improvement. We see better signs definitely with jewelry brands with Cartier. Notably, there was a very, very good New Year -- Chinese New Year period on the Q4 that also drove quite healthy results.

Johann Rupert: Chinese New Year fell in Q4 for us this year. But yes, you're correct.

Alessandra Girolami: Thank you very much for everyone in the room and listening to us today. This now finishes the webcast. Thank you.

Johann Rupert: Thank you.

Nicolas Bos: Thank you.