SEB S.A. (SK.PA) Q3 2026 Earnings Call Transcript

Operator: Welcome to the Groupe SEB 9 month 2026 sales and financial data. Today's conference will be hosted by Loic Moutault, Chief Executive Officer; and Olivier Casanova, Senior Executive Vice President and Chief Financial Officer. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Loic Moutault: Good evening, everyone, and thank you for joining us. First, I want to say that I'm very pleased to speak with you for the first time as Chief Executive Officer of Groupe SEB. I'd like to first and foremost, thank the Board of Directors for its trust. It's a real privilege for me to join this group, which has such a distinctive heritage and truly international presence and global footprint. Over the next few minutes, I will say just a few words about myself, share some very early observations. And of course, explain and set out my priorities before actually Olivier will take you through our 9 months performance and our year outlook. So as you probably can hear, I am French from background, born in Burgundy. I have always heard about Groupe SEB in my entire childhood. So it's a real privilege to be here. However, throughout my career, I've had a very international career. I worked 30 years in a global family-owned consumer goods group. I've had the opportunity to lead global brands in really international environment, large-scale industrial footprint, most recently I have had the opportunity to run businesses combining both consumer and professional services activities. I mostly worked in Europe, in multiple markets, but have had as well the opportunity to work in Asia, which has probably been the most inspiring assignment in my life, at the time where Alibaba, Rakuten and all the platform business and the digital acceleration of online were developed. And it has been such an inspiration that when coming back to Europe and global businesses, I've spent the last 10 years really digitalizing a lot of the business model that we've had in our organization and move our businesses that were, in some cases, just B2B to start engaging directly with consumers, and developing a real footprint to be able to compete directly online. This product category is obviously very different. But the fundamentals are, I think, the same. And although this was in the last 10 years at the time of SEO today, at the time of GEO, I believe the fundamentals and the learnings of this kind of transformation, I can, of course, help reapplying and bringing to life in today's environment, so that we can make our brands relevant to today's world, bring innovation faster in a global environment and activate the consumer where they are, where they shop, and where they decide they are shopping. So this is really what inspired me in this challenge. The early observation, I want to say that I've just joined on October 1. So it's very early days. And obviously, I'm spending my time right now simply to listen and engage and learn with the team in the field, multiple one-to-ones, business reviews, site visits, customers encounter. So it's really a learning journey at this stage. These are still very early days, as I mentioned, but I've already been struck by a few things. One is we have a unique portfolio of global and local brands with an incredible footprint in multiple categories. We have genuine love for products and great appetite for deep industrial know-how which leads to actually fantastic innovation capabilities. We have a powerful combination of Consumer and Professional businesses, and I've had the opportunity to live in [ NatCat ] of world, and I find that very powerful and inspiring. We have a distinctive sustainability model around repairability and ecodesign, which is quite rare, actually, and a true strength for this organization. What attracted me to SEB, obviously, with by having worked in a family-owned business is as well the family anchoring that we can benefit from with this ability to have long-term views and investment thesis. But above all, I think our teams around the organization, their expertise on the engagements are genuine. There is a lot of passion in this organization which I find inspiring myself. Today, our world is actually evolving very fast. We know that there is more digital, there is more viral, everything -- the consumer journey has evolved a lot and change a lot. And this is one of the muscle that certainly we need to develop at SEB in a strong way and in an accelerated way, social media, social commerce shape demands today. I think 80% to 90% of shopping decisions come from digital source. And certainly, we need to adapt our models to that. We are very fortunate that we are in a market where we can create demand. I think innovation is proving that we can create space in our categories. One could think that after more than 100 years in our industry, people have everything they need but the recent past has as well shown that it's still a category where we can innovate, we can create subcategories. We can bring consumers into different spaces and create a lot of value for this industry. And this is really what excites me that we can bring consumers along the journey. And when we meet our market, we can create fantastic value. With brands like us -- like ours, which are global in footprint, it's a real opportunity. Obviously, we have a road map today and the road map is a planned rebound, which is in full motion as we speak. It is our opportunity to seize the opportunity we have ahead of us. I see it as totally clear and relevant to make us more efficient and more agile as a group as well. Currently, we are on our objectives and on our timetable. We are delivering. The team is fully focused on its execution. Olivier will talk about some of the early benefits we already see in '26. I see my role not to redesign it. I see it to accelerate its execution and amplify its impact across our organization. First, we need to deliver on our cost objectives. This is -- we see the first signs in '26, and this will accelerate in '27, and we will deliver on our commitment. Second, there is really visibility in the plan to develop this new muscle of generating demand. In particular, how do we bring innovation faster to market, how do we scale actually our launches with new marketing practices in order to generate desirability of our innovations on our products and brands. We have fantastic examples already with Coffee Crush, AeroSteam, EverSharp. And the aim is to make it a systemic approach that we can bring across our organization and make it kind of the rule and the playbook by which we want to play. Finally, there is a focus to simplify how we operate to bring more agility and more responsiveness in our organization. Obviously, it's a buzzword, but we all know that bringing AI solutions across our processes can make this simpler to execute, faster to respond, and bring more energy -- free up energy in the organization so that we can focus on what creates value. We already see the first benefit of this in the way we develop content today and the way we start activating our brands. And I believe this is a key opportunity for us to diffuse this approach across the multiple processes that make this organization work. We all know we are living in a very demanding environment, which is volatile, changing very fast and impacts us in multiple ways. I mean the recent events in France are only the last example of those. In those -- in this kind of environment, what is important is to focus on what we can control. What we can control is how we execute, how we innovate, and how we drive our costs with discipline. My personal method on onboarding in a new role is to invest time to do a deep diagnostic and build a team and build with the team the agenda by which we will drive our organization and lead our organization. And to deploy at pace and at scale, the practices that we see relevant to improve the ability of the business to create value. Transformation of this nature are really large and big in a way. And they only last when the entire organization as a whole can appropriate it and make it there. We are not in it for isolated solution. We really want to evolve the way SEB is operating on the market. Finally, I want to conclude by reminding that our ambition is very clear. We want to return to profitable growth trajectory. The entire organization is mobilized behind this agenda. And as it will be very presumptuous for me after 15 days to present and comment any of our results, I will immediately hand over to Olivier, who will take you through the 9 months performance and the full year objective. Olivier?

Olivier Casanova: Thank you, Loic, and welcome. So let's move to the first 9 months results on Page 5 with the highlights. So in terms of sales, we reached EUR 5.707 billion, which is up 1.1% organically. And our results from operations stood at EUR 333 million, which is up 25% (sic) [ 24.5% ] and EUR 65 million versus the first 9 months last year. In Q3, sales reached EUR 1.964 billion and were flat year-on-year. And our results from operations were up EUR 13 million to EUR 161 million in Q3. So beyond those figures on the following page, what are the other highlights. Well, clearly, as Loic reminded us, we are operating in a very complex environment, both from an economic and of course, geopolitical standpoint. In that environment, the small domestic equipment market is somewhat resilient and in large part, in various categories, that's driven by innovation, I'll come back to that. We can note also, and this is compounded in Q3 that retailers in various parts of the world are, let's say, more cautious with inventory, and this is impacting slightly the Q3 performance. I've talked about the sales and ORfA, so I won't come back on that. On the rebound plan, we are progressing satisfactorily, the execution is in line with expectation and in line with the time line. And the effects indeed are already visible. We had EUR 20 million cost savings in H1, and we've added another EUR 15 million in Q3 to total EUR 35 million. The 2026 outlook has been confirmed and, in fact, even precised. So we are looking at a full year ORfA growth between 5% and 10%. We intend to return to a more normative free cash flow generation, and we've indicated that means free cash flow between EUR 350 million and EUR 450 million and we intend to lower the financial leverage, net debt to EBITDA with a target, I remind you, of around 2x by end 2027. So let's comment on the sales first. Moving to Page 8. So the 9-month sales, as you can see, is up organically by EUR 60 million. This is driven, as we will see, by the Americas in terms of geographies and by cookware and home & personal care in terms of product categories. The currency effect, as you can see, is modest overall this year at only minus EUR 16 million. It was negative in Q1, flat in Q2, and in fact, it's turned positive in Q3 at plus EUR 51 million. This is evident in the next slide when you look at the Q3 sales trajectory. I'll comment, of course, on the break down organic growth in the following pages. And you can see here the positive currency effect in Q3 that I was talking about, which is due particularly to the strengthening of the Chinese yuan and the Colombian peso in our case. So let's look at the breakdown between Consumer and Professional. So Professional is down nearly 5% on a 9-month basis and minus 9%. (sic) [ minus 9.1% ] in Q3. I'll come back to that, of course, very shortly. And Consumer is up 1.9% on 9 months and 1.1% in Q3. So let's start with the Professional business. Of course, the first remark that we must always keep in mind is that we need to exercise caution when analyzing quarterly evolution year-on-year, of course, given the importance of large deals in our business. That being said, the first message is that the core business and services are solid. The core business is holding up well, and services, in fact, is growing. It's usually around 30% of sales and in Q3, it's even up to 35%, driven in particular by the U.S. and the U.K. What is, of course, explaining the performance is the low level of machine sales, in particular, to large customers. We've seen a sharply lower contribution of large deals, notably in the U.S. and in Asia. And in the U.S., we have a market which is still muted with a wait-and-see attitude of many customers. We're also, of course, impacted in the Middle East by the conflict in the region. Finally, what is key, of course, for us for the future, is that we're making strong progress strategically with notably the ramp-up of the Shaoxing Hub, the 2 new models, Peak and Elevation are now sold in more than 30 countries. It was only 15 at the end of June. So you can see that the distribution network is being set up rapidly across Europe and Asia in particular. This will help us. I remind you, address a customer base that we're not addressing very well in the past, which is the office and small business segment. The contribution of those sales is still modest year-to-date, but it will pick up rapidly starting in Q4, and our production is now, the ramp up is behind us and the production is now at full speed. So let's look at Consumer now. You can see the picture is very clear that the Americas are driving the growth for the group, and EMEA and Asia on a 9-month basis are showing only a modest increase. So before we start looking at the regional performance, I wanted to draw out -- draw your attention to a few of our recent innovation successes starting with kitchen electrics, you can see, of course, we've talked many times about this that Coffee Crush continues on its successful path. It's, of course, a very compact bean-to-cup machine, which is quite unique in market. It's a great success. We've now launched it in 39 countries which is -- and there is a 10 more to come in the next 6 months. The second example is also, we think, quite interesting. It's the rice cooker called POP, it's been launched in Europe and in Asia in 2026. And as you can see, it is targeting the Gen Z customers with a compact size and fun colors and we expect to sell over 250,000 pieces in 2026 alone. On the cookware side, we're very pleased with the growth in cookware and kitchenware, it's of course, the Ingenio line of product in all 3, I would say, variations, nonstick, ceramic, and stainless steel, but it's also the Fusioncore range. which is providing, as you know, improved surface treatment and in particular, the ceramic version is 4x more resistant than the previous generation. So therefore, addressing 1 of the main pain points of ceramic. On the next page on the home & personal care side, the floor washer continue -- category continues to grow very fast. It's supported by a continued range extension. We've launched, in particular, the X-Clean 12, which is the top of the range. But as you can see also, we've entered a replacement cycle. And here, you have a picture of the X-Clean Vision Pro which is going to replace X-Clean 10 and is manufactured in Supor in China. Secondly, the garment steamer, AeroSteam is, again, a great success. We've launched the Elite and -- Elite version in Europe and the S version in the U.S. and Asia. We sold it in 25 countries in the first half and now 30 countries in the second half. And then finally, spot cleaner, Clean-It is -- the range of product is now expanding. We have 5 models sold in 20 countries and sales are doubling versus last year. And we have sold nearly 650,000 pieces since the launch in 2024, and I remind you that this is a new product category for us. So after this review of product innovation, some product innovation, let's focus on EMEA. Western Europe, as you can see in Q3 had a mixed performance at minus 1.5%. There is good momentum on online DTC sales. The latest launches has been very well received. I talked about Coffee Crush, AeroSteam Elite, but it's also the EverSharp knife blocks. We are, of course, to some extent, penalized by the lower inventory levels at retailers, both off-line and online. In France, we are performing well, and we are still growing at a healthy pace in Q3, thanks to market share gains driven by innovation and loyalty programs. Of course, the big sort of negative for us is still Germany in terms of top line growth. As you know, we are focusing on improving our profitability and that is progressing satisfactorily but the environment remains difficult, especially off-line. In other EMEA countries, we have stable organic sales with very diverse situations. Of course, we are experiencing major logistic disruptions in the Middle East. It's a small region for us overall, but it's nevertheless 10% of the other EMEA countries geographic segment. We are progressing very well in Turkey and Egypt, driven in particular by online sales, and we have diverging trends in the rest of the region. On -- In the Americas, of course, we are very happy to see double-digit growth both in North America and in South America in the quarter. In North America, as you may remember, we had a, let's say, negative trend in Q3 last year, which was down 14%. So the comparison basis was favorable. But nevertheless, we are seeing further market share gains in the U.S. in cookware and linen care. In cookware, in particular, we are gaining market share both in ceramic and stainless steel, and holding our ground on nonstick, of course. In Mexico, the market is quite competitive. The economy, of course, is suffering from lower levels of remittances but we are seeing successful launch of various products, including Coffee Crush. In South America, sales we are, let's say, returning to growth in this quarter. Of course, in large part, thanks to a sharp increase in fan sales given the start of the effect of El Nino, and this is across the subcontinent. In Colombia, we have double-digit growth, so very healthy performance thanks to market share gains in our traditional categories, such as cookware, but also very good momentum in our product extension. We know we've ventured into floor washers and now launched Coffee Crush, and this product expansion is really driving sales. In Brazil, we are operating in a complex environment but the sales are up in Q3 despite the difficulties in physical retail. Let's turn now Asia. In China, we have stable sales, of course, in a complex consumer environment. And as we've indicated before, we are trying to find the right balance between sales growth, market share, and profitability. We are gaining market shares in this highly promotional market, thanks to a very good performance on social commerce. We are still the leader. We're #1 in culinary segment in TikTok which now represents nearly 25% of our online sales. We see also strong contribution from various innovations, very successful with our titanium woks. We have launched a new evolution of [Audio Gap] [Foreign Language] sales and this is driven by an improved [Foreign Language] improved gross margin, thanks to higher volumes, but also a positive impact from short currencies in the quarter. And this is despite the rising negative impact from cost inflation linked to the Iran conflict. It's also driven by strong cost discipline, of course, discipline in operating cost and the first benefits of the rebound plan. Again, EUR 15 million more in Q3 to a total of EUR 35 million in the first 9 months. To be noted, we only had a minor positive impact on U.S. tariff refunds in the quarter. Let's now turn to the performance of the rebound plan and the outlook. So starting with that on the left-hand side, you can see that we are updating our estimate of the benefit for 2026. It was previously in June, EUR 40 million to EUR 60 million. We're upgrading that to EUR 50 million to EUR 60 million. We are seeing, of course, more rapid benefit on indirect procurement. That's what the chart shows, but looking at the target of EUR 200 million, you can see that the actions that are taken -- being taken on structure cost and industrial efficiency will represent the majority of the EUR 200 million savings. Let's look at the progress now on organization which is the reduction of structural costs and improvement of industrial efficiency. We are progressing very well. All the labor agreements are now signed for voluntary departure plans. The departures, in fact, are underway started in September. The implementation is on schedule, and we believe that the initial targets in terms of reductions will be achieved by the end of March. On indirect purchases, you remember that we are looking to generate 5% to 6% savings on the scope targeted. We have now more than 500 actions launched, which this is up from the 400 that we announced in June, and 2/3 of the total savings are now secured at the end of September. This is addressing many areas, of course, IT, marketing, logistics, facility management, to name a few. On the cross-functional levers, the first 1 being the simplification and optimization of our processes and organization, we are progressing well, notably on development, supply chain management and marketing practices. On the other initiative, which is the reduction in our SKU count by 25% to 30%. We have now identified 100% of those products and 50% of these actions have been initiated at the end of September. So to conclude, let's look at the 2026 outlook, starting on the left-hand side with the environment. Of course, since we last spoke at the end of July, we can see that the macroeconomic and geopolitical environment has, in fact, somewhat deteriorated. The agreement of 17th of June was, of course, short lived and the oil price to take 1 key, let's say, pointer is up 25% since July to [Foreign Language] Inflation is now progressively also impacting consumption in various parts of the world, and we're seeing some cost inflation pressure starting to materialize. That being said, the small domestic equipment market is showing more resilience than other sectors, notably supported by innovations. So in this environment, Groupe SEB will be relying on its own actions, which is first our healthy innovation pipeline, with both the ramp-up of new product launched in Q2 and Q3, geographic expansion and further range expansion. We are, of course, targeting some selective price actions to compensate some of the cost increases, not so much on the listed price, but bridging carefully the average selling price. We are, of course, continuing with our strict discipline on COGS and OpEx and accelerating on the benefit of the rebound plan. I want to point out also that Q4, I'll remind you that Q4 last year was actually quite a high comparison base. It was the third highest ever, in fact, very close to the second. And so it was a good performance in absolute levels. So with that, let's say, these remarks in terms of context, we are confirming our outlook for the year. In fact, we are refining the outlook on ORfA. We're now targeting a growth between 5% and 10% versus only a full growth previously. We confirm the objective to return to a more normative free cash flow generation continuing the trend evidenced in H1. And we confirm also the objective to lower the financial leverage with the target to return to around 2x by the end of 2027. So that concludes Loic the presentation on the 9 months results. And I think we can now turn to Q&A.

Operator: [Operator Instructions] The next question comes from Ope Otaniyi from GS.

Opeyemi Otaniyi: Three quick questions for me. just on cost out guiding to EUR 50 million to EUR 60 million this year, done EUR 35 million year-to-date, I suppose you have EUR 15 million to EUR 25 million for the rest of the year in Q4. I suppose how do you think -- what might determine where we end up in that range?

Operator: Ope Otaniyi, your line is unmuted. Please go ahead.

Opeyemi Otaniyi: Hopefully, you could hear me now. I was going to ask 3 questions. Just on the cost out. You're guiding to EUR 50 million to EUR 60 million now. Implied EUR 15 million to EUR 25 million for Q4, I suppose, could you just talk us through how you think of what might determine we end up on that range?

Unknown Executive: Sorry, we lost the speaker connection. So I'm going to reconnect, and I will ask you to repeat your question again. [Technical Difficulty]

Opeyemi Otaniyi: Okay.

Unknown Executive: Okay. Sorry for this interruption. I think we have the speakers back. Mr. Otaniyi please read your questions again, please.

Opeyemi Otaniyi: Sure. Hopefully, you can hear me now. I suppose 3 questions from my end. One on the cost out range, one on the implied ORfA range, and then just what you see in net terms in terms of trading. So first on cost out, the EUR 50 million to EUR 60 million guide implies EUR 15 million to EUR 25 million in Q4. Could you just walk determine where we end up on that range based on how you talk about visibility to cost out action?

Olivier Casanova: Do you want to ask your 3 questions first, Ope, and then we'll...

Opeyemi Otaniyi: Yes. Sure. I suppose the second one is just on the ORfA guidance. I suppose 5% to 10% as well implies [ EUR 30 million to EUR 60 million ] increase, can you just walk us through the various buckets in that? I suppose my question there was more so EUR 30 million to EUR 60 million increase versus EUR 50 million to EUR 60 million cost out. So how should we think of the delta there and sort of commodity headwinds as well? And then lastly, sort of any early commentary on trading so far in the quarter based on what you've seen? I'll leave it.

Loic Moutault: Okay. So I'll take those questions. I think the first 1 was on the cost outs. We're still deploying many actions in the quarter. I think we feel reasonably confident on the trajectory. But there are still especially on indirect procurement, until you've closed the new agreements and you started to implement them, it's still -- there's still some element of, let's say, uncertainty. So we're very confident on the EUR 200 million. But in terms of timing, we will only confirm once we have reached all our let's say, agreements, especially on indirect procurement. Regarding the 5% to 10% range, I think the way to look at it is, the upper end of the range is based on the assumption that we have, let's say, on the cost side, we are -- we have, of course, the impact of the cost inflation linked to the Middle East situation. We said in July that we expected around EUR 30 million net impact over the second half. And we confirm that. We had some elements, some impact in Q3 and of course, an acceleration in Q4. We also think that a positive FX headwinds that we had on procurement cost in the third quarter will be less prominent and probably negative, in fact, in Q4. Against that, we have, of course, the acceleration of the benefit from rebound. So as you can tell, EUR 15 million to EUR 25 million additional savings in Q4, and also probably some additional contribution from U.S. tariff reimbursement. So this is what, let's say, drive us to the top end of the range, the 5% to 10% range. And then the lower end of the range is -- would reflect a slightly more negative demand environment impacted by the rising inflation in many parts of the world and also maybe some additional price pressure linked to the softer environment. So this is, let's say, the uncertainty that drives us to the 5% to 10% range. Your last question was on current trading. Well, to be honest, we hesitate to express a view today because we are living in a very uncertain world. but we are concentrating on our product launches, we are concentrating on being as efficient as possible in our activation, and we are trying to navigate this complex environment, but it's difficult to be more precise at this stage, given, let's say, the volatile environment in which we operate, not to mention, of course, in France, the events of the last weekend, even though France is only a small part of our group in overall, it's less than 10% of our full year sales. But nevertheless, it's another, let's say, evidence of the difficult and complex environment in which we operate.

Operator: The next question comes from Marie-Line Fort from Bernstein.

Marie-Line Fort: I've got -- the first question is about the Professional division. Just would like to know how has evolved your order book recently. You mentioned that you think that you could factor in some orders in small machine in Q4, is it really Q4 that we could see some momentum improvement on more 2027? One question is about the risk arising from the legal actions in [indiscernible] from the usage of PFAS, just to know if you are worried about that? And what is the [ calendar ] to know when will be the issue. And the last question is about the innovation pipeline. You showed some nice pictures [indiscernible] are you -- can we still expect some new products for the Christmas period? Could you just comment on what will fuel your commercial activities at the end of the year?

Loic Moutault: Okay. [Foreign Language], Marie. So first on Professional. To be honest, we are not expecting a significant change in the general environment. And I think the wait-and-see attitude will probably prevail in Q4. That being said, the performance in Q3, I think, was very specific to this quarter. So we are not expecting similar, let's say, percentage drop in Q4, but we are continuing to see, let's say, some prudent customers. That being said, we are confident on the ramp-up of our sales of small machines, the Peak and Elevation because our production has now reached, let's say, nominal capacity. And I think we have, let's say, very good prospects to, let's say, really pick up our revenue in this segment. So again, let's exercise caution in the current environment. But we are progressing on the fundamentals of the business. Concerning the situation concerning the PFAS, I think you're probably referring to the formal notice that was served by various associations regarding the vigilance plan. So what we can say at this stage is that, of course, we have taken note of this notice. We are examining it carefully and we will respond in the time frame. It concerns, as you know, the vigilance plan and in particular, the measures regarding the identification, prevention, and mitigation of certain risks. And this vigilance plan is, in particular, in our 2025 universal registration document. Of course, we said many times the use of nonstick products, using PTFE coating presents no harm for human health. This is -- we have a long list of organization, which testified to that, not to mention the World Health Organization or The European Food Safety Authority. So I think that's well documented. However, the vigilance plan, of course, is updated regularly. So we are going to take, of course, a look at it. We remain, of course, open to discussions, including with these associations behind the initiative. And as I mentioned, we will respond in due course to the remarks expressed regarding our vigilance plan. On innovation. So the pipeline, we have -- of course, we will have the ramp-up from the products that have been launched in Q2 and Q3. In Q4, we have -- we'll benefit in particular among the products I haven't mentioned from the increased range of our exports product of vacuum cleaners in particular, the 20.80, which is, let's say, the highest, the most premium product that we've launched in this category and which is both the most powerful and the most silent in its category. So this will certainly be, let's say, an interesting product to follow. We have, of course, the ramp-up from the various Fusioncore. We have the next generation of -- well, the -- an expansion of our EverSharp range with daily -- after the Pro, the Daily EverSharp, which is, let's say, addressing a lower price segment. So again, new innovations, not to mention an interesting product, which is currently being launched in the U.K., which is Yum Meal, and I encourage you to watch the video on YouTube and I'll be interested in your feedback on this product. But it's quite an innovative and very acute product, very smart.

Operator: The next question comes from Alessandro Cecchini from Equita.

Alessandro Cecchini: About pricing, you stated that you are thinking or you are launching selective price hikes. So just to understand, is something that to address 2027 inflationary [ pressure ] expected? Or do you think that you could have some traction also in the fourth quarter? And looking at 2027, I know that, of course, it's early. But on the Professional side, do you expect actually to return on which kind of growth you expect after a year that it's ending probably below our, but also your expectations?

Olivier Casanova: Okay. Thank you. So the price hikes, as you say, are there to address to pass on some of the cost inflation that we are experiencing. It's part of our, let's say, arsenal of measures to counter this. The others being, of course, let's say, industrial efficiency and cost savings, but also a new redesign to cost initiative and renegotiation with our suppliers. So it's a combination of measures which will help us to address the cost inflation, we are implementing those measures as we speak. In fact, starting September, October. It's progressive. As I mentioned, it will not be principally by addressing listed prices, but more managing maybe more, let's say, selectively promotions in order to improve the average selling price. And we're also, of course, where possible, adjusting the launch price for some of our, let's say, attractive innovations where it is possible. So this is going to start impacting Q4, let's say, profits and we'll, of course, continue to impact 2027. Regarding the Professional, again, I hesitate to make, let's say, a forecast on 2027 because this is largely dependent on, let's say, the global environment and the attitude of our large deals. What I can say is that we feel relatively confident on the core business. We feel good about the development of our service business, which is -- and should continue to grow next year. What will be the attitude of large customers and what will be the volume of large deals, honestly, it's difficult to tell at this stage. But we will, of course, benefit from the ramp-up of our Shaoxing Hub, and we've had, of course, let's say, the full production capacity available only in the last 4 -- 3 to 4 months of the year. And next year, of course, we should have 12 months benefit from this capacity. And so this will help to -- this will bring a positive dynamism to our sales next year, but on large deals, it's difficult to tell.

Operator: [Operator Instructions] The next question comes from Chiara Tomesani from UBS.

Chiara Tomesani: I'd like to ask a clarification regarding the ORfA guidance. So like before you mentioned some tariff refunds and the impact from FX in the second half, could you please provide us some more color. Then the second question would be on the Professional pipeline, and I was wondering whether there is like any update to share? And lastly, I like to ask if you're seeing any signs that retailers are building inventory into Q4?

Loic Moutault: Okay. Thank you, Chiara. So on ORfA, as I mentioned, there are, let's say, positive and negative forces. So on the negative side, we see acceleration of the cost inflation impact and some FX headwinds due to the strengthening of the U.S. dollar and the CNY, and so we will have, let's say, probably low double-digit negative impact from short currencies in Q4, at least that's what we can expect as of today. On the positive side, I mentioned the benefit from rebound. So we've indicated a EUR 15 million to EUR 25 million additional benefit and then probably some additional contribution from U.S. tariff repayment. If you want to be more specific, I think it's going to be mid- to high single digit. Regarding the Pro pipeline, again, what we can say is that we have -- we're building a range of new product to address the small businesses and offices segment. We've launched the first 2, but we have more on our roster of new product. We're also continuing to develop product for large customers. As you know, a number of our products are, in fact, customer specific. And so there are, let's say, very interesting initiatives being pursued right now, but it's too early to say more at this stage. Regarding the consumer business, to be honest, we are not expecting a rebuilding of inventory at this stage. I think in the current very uncertain environment with inflationary pressure, impacting consumer spend. We expect distributors generally to remain very cautious, both off-line and online, and to maintain relatively, let's say, low levels of inventory. So there's no reason, at least at this stage, no evidence that there should be any restocking soon.

Operator: The next question comes from Fraser Donlon from Berenberg.

Fraser Donlon: Fraser here from Berenberg. I just had 3 questions. So the first was on the tariff rebate, I don't know if you could maybe give an indication or a closer indication of the magnitude of that in Q3 and then what we should expect in Q4? The second question about the Professional business and kind of how you're thinking about cost? And if you could almost give a reminder that rebound plan touches that division today just because I'm imagining maybe margins are a little bit under pressure and how you see the pathway to like recovering there? And the third question, could you just remind me like if there's any loyalty program effects in France either in Q3 or if we should consider any particular impacts then in Q4, if not?

Olivier Casanova: On the tariff, as I mentioned, it's a minor impact on Q3. So minor means low single digit. And on Q4, I think I've mentioned, let's say, between mid- to high single-digit impact. So I think that's as precise as I can be at this stage. On the professional, of course. We are continuing to work on cost optimization. And yes, you're right, it's part of the -- Professional is part of the rebound plan. both on, let's say, industrial efficiency measures but also on optimization of our OpEx. So it's definitely a part of rebound. On loyalty program, there was a benefit on loyalty program in Q3 in France, as Loic mentioned, in general, we have a good level of loyalty program this year against quite a low level last year. So it has been positive. But again, loyalty program, as we always said, this is part of our bread and butter business. So it's absolutely normal, it's just that we singled them out because in 1 quarter, they can represent a significant variation element from 1 year to another. But that, it's absolutely, let's say, normal that we've had a loyalty program in particular, impacting positively our sales of personal care products.

Operator: Ladies and gentlemen, thank you for your questions. Let me now hand over the call to the speakers for closing remarks.

Loic Moutault: Thank you very much, everyone. As you have noticed, I haven't been a lot of help for Olivier this time, as I've just joined the business, and I'm looking forward for our call in February, where maybe I will be a bit more supportive. So thank you, Olivier, for answering all the questions on our behalf. Thank you for joining us and your questions, and we look forward for more encounters going forward. Thank you.

Olivier Casanova: Thank you very much.

Operator: The live meeting is over now. Thank you for your participation. You may now disconnect.