Earnings Transcript for SK.PA - Q4 Fiscal Year 2023

Stanislas De Gramont: Good afternoon, and welcome to the 2023 full year results. I'm Stanislas De Gramont, the General Director of the group. I'm going to be handing over the next 45 minutes to share with you the net results for 2023 with Olivier Casanova, who is on my left and General Director, Deputy Director in-charge of Finance for the group. We will be speaking in French. We'll be answering your questions in French, but there's a simultaneous translation in the room. I think everybody speaks French in the room and on the webcast to accompany our listeners, who are online and who we greet. After the presentation, there will be a Q&A session, where you can ask questions directly from the floor or live using this tablet, which is supposed to be sending us the questions you have submitted for our attention. So 2023, I'm going to be covering, it's across the financials. Major key highlights of 2023, the acquisition of Sofilac, CSR, and we're going to talk about outlooks. 2023 was a very good year for the SEB group. We have a very profitable growth over the year. You've seen the results of sales, €8.606 billion in sales. We broke that barrier of €8 billion, we are up 5.3% like-for-like compared to '22. This translates or can be converted into operating net profit of €726 million in URFA compared to €620 million last year, we saw about 17% additional with an operating margin of 9.1%. That's 129 basis points better than last year. In net profit, this has translated into €386 million, up €70 million or 22% compared to '22. And the last factor relating to performance is net financial debt which stands at €1.769 billion, up €204 million compared to the end of '22, which generates a leverage of 1.8x EBITDA. And the Board of Directors that met yesterday is proposing to the general assembling on 23rd of May, a dividend of €2.62 per share, depending on premiums and so forth. I'm going to hand over now to Olivier Cassanova, who's going to go into the financial highlights over the year.

Olivier Casanova: Thank you, Stanislas. Hello, everyone. I'm going to start with comments on sales. As we've already heard, and commented on at the end of January. So I'm going to move over to that quite quickly. Here you have, as Stanislas just explained, you have sales that went past that €8 billion and slightly up like-for-like, but which, in fact, if you break it down, it was built, thanks to organic growth, which came back up by 5.3%, a negative currency effect of roughly the same amount as expected, and I'll get back to that effect in a moment. And the scope effect, which is a contribution of 1 part of the year of some acquisitions that were for La San Marco, Pacojet and FORGE ADOUR. So just a word about the significant currency effect in 2023, especially in the second half year compared to €220 million. And this was marked in the second half year, you could see right there, it was almost €300 million. It's almost 3x greater than the first half year. So there's an acceleration in that second half year. We can see that the main impact was a devaluation or the change in the renminbi compared to euro. So it's not a very marked. We're talking about a discrepancy of an average of 8%, but it's applied to a sales figure of €8 billion, so that makes a big amount. If we look at the 3 other currencies of emerging nations, we have Russia, Turkey and Egyptian pound, we can see that the sales figures in these variations that are applied is much lower than in China, but the changes in devaluation of these currencies is significant, which gives an important impact. If we look now at the organic growth, since Q2 2023. After 4 quarters of negative growth, we got back in the second half year, the second quarter to the like-for-like growth of 6.8%, and that dynamic continued throughout the rest of the year with Q4 at 8.5%. And if we look division wise, we're going to talk about professional. We had an excellent performance over the year in professional with a growth throughout the year of TCPC of 26.5% like-for-like. And almost €1 billion in sales. In consumer, we have €7.045 billion. And we can see that in 2023, we got back to positive growth like-for-like in consumer of 3.2% and this growth has accelerated, in fact, in that fourth quarter because we have a growth of 7.7% in the fourth quarter. Now I've got to go over the factors having to do with sales because we spoke about them already. Here, you see the growth in Q4 of 16.2% that's compared to '22. It was a bit more demanding. That's why this is slightly lower than the average for the year. But we benefited from a market which was still growing, as you know. And additionally, in very good commercial performance, thanks to successes with major clients, and thanks as well to robust business with independent clients. We also benefited from a certain number of product launches of new products and Stanislas will get back to that in his part. And lastly, we made progress in our strategic plan in 2023 with the acquisition of La San Marco, which is an iconic Italian brand of traditional coffee machines, which adds to our product offering after the acquisition of WMF mature on the one hand and Wilbur Curtis on the other. Now let's move on to a consumer with panorama, both your geographical, let's start with the EMEA. So 2 regions, with different dynamics. In Western Europe, progressively, we're back to growth, but it's flat over the year, but with an improvement in the second half year. We can see this notably in France. We got back to growth. In Germany, it was more difficult. The economic environment in Germany, as you know, was not very good, not very sustained, but we had good dynamic growth in Q4 with a good Black Friday. And in Western Europe, we have some markets that are -- have good dynamic growth. We've enjoyed good performance and good dynamics in Spain, Belgium and the Nordic countries. So a very contrasted situation, which is good by the end of the year. In Western, and Central and Eastern Europe, in these very excellent markets, we've had very strong growth, above 20%, both throughout the year and in the fourth quarter, this has been led by a good performance, a good commercial performance, both online and offline. And with market share gains in key categories, such as oil-free and laundry care. And also deployment of certain product successes in this region. Notably, OptiGrill, Cookeo, and Ingenio. And lastly, in one part of this region, were also led by our ability to get price increases across uncertain markets who had significant inflation. If we move on to the Americas. Here again, you can see there's an acceleration of growth in the second half year with plus 11% in H2. In the United States, we're back to organic growth in the second half year. The group is still #1 in the favorite in cookware, where we have a leadership position in the U.S. We're #1 with Tefal. We're also #1 in premium segments with All-Clad and #1 and ethic brands with Imusa and we have reinforced that #1 position in 2023. In Mexico now, we have a market which is even better, and it's growing double-digit organic growth. We have succeeded in gaining market share in all categories, notably in laundry and blenders and in fans, which was led by the El Nino effect and by the climate. If you go -- move on to South America, a very reinforced market position greater than 10% throughout the year. With the dynamics that we're varying in Colombia, the market was a bit more difficult, but the group is -- it comes out okay because they win more on market share. In Brazil, the damage were a bit more positive in the second half of the year, thanks notably to the strong demand for fans due to El Nino and thanks to launching new products such as oil-free fryers. To conclude geographical [indiscernible] a word about China, about Asia. We've outperformed in China. It's not doing as well as in the previous decade, but the market is more difficult. But in this market, we are suppose overperforming, a very positive growth throughout the year and that accelerated growth in the fourth quarter that achieve Q4 of plus 3.3% like-for-like. 3 reasons for that as we have the opportunity to underline. The first is the fact that SUPOR is less exposed to discretionary categories, notably due to the fact of its market position, strong position in products that are symptomatic or emblematic of traditional Chinese cookware. We're talking about woks. The second is a dynamic of innovation, which is very strong. Stanislas will get back to that, in terms of rice cookers, which is obviously a big one. And thirdly, the group has a resilient product mix. We have a new innovation engine with excellent -- we have a lot of online sales, but we're also strongly developing social commerce, notably with TikTok and -- and the group has taken that the tangent very well, and we've won market share from competition in these new distribution channels. So the group is ultimately doing very well in a globally difficult market. About the rest of Asia, it's a bit different. But globally, I'd say the environment is unfavorable. This is marked notably in 2023 by reduction in inventory in our distributors, but we did note a positive aspect is that in the fourth quarter finished better than the rest of the year with some signs of improvement that we're aware there was a renewed sales growth. Now let's move on to the fourth quarter was very strong. There were 46% of -- over the year, which gave us a €726 million for full year, up 17% compared to '22. The group set the objective of doing at least 10% growth over the year, and we wind up plus [17]. The operating margin stands at 9.1%, which is getting back to the historical standards, growth up 130 bps compared to 200 bps in the previous year. Now if we look at how this compares to group standards, we took 2015 to '21. You have the median, which is the left hand in dark blue. You can see in the first quarter, we stood below -- clearly below the median for 2015 to 2021. But starting in the second quarter, we came back to comparable figures, and we're winding up at the end of the year at 13.6% in Q4 compared to an average of 12.6%. So how is this operating performance and that's above €726 million. It was comprised of what. We're going to be going over the usual bridge chart with the rougher bridge in 2023. Now we start with factors of sales figures that impact of URFA. The first we got back to a positive dynamic in volume terms. This is true. In Professional, which really led things with a very strong sales, but it's good news as well in consumer, where we also back to growth. This is also the case with a positive price mix effect which translates, first of all, to the continuing enrichment of the product risks and Stanislas will get back to some new product launches and events in '23, which fed into that positive price mix effect. And also the cost, as you know, we increased prices in '22, and we did that on a full year basis in '23 and also the ability to get price rises across in countries that are subjected to significant levels of inflation. Now about costs, you can see a very significant cost effect in sales. We had a cumulative effect throughout the year. Both in reduction of -- decline in purchasing costs for raw materials, components and finished products and obviously, the significant decrease in the cost of shipping which gives a very important effect of €102 million positive. Now what about the growth drivers are slightly down, notably in terms of innovation, but there's also a big effect in currency. But other than that, there's a slight growth. And more important factors we're going to get into in the next slide, which are there. And serve to support the launching and development enrichment of our product offering. Commercial expenses and administrative lenses were up. That was expected in our budget. There was an inflation environment. And also, there was also a reflection of a more intensive activity in online sales and retail sales. And we also use a set of our own stores. Now looking and focusing on growth drivers. Here, you have the growth rates, which were clearly up especially in innovation in order to support new product launches and R&D. Advertising and marketing grew much more limited attraction that reflects a good budgetary discipline throughout the year. We will conclude by the impact of currency effects. There are 2 major effects. The first is the negative ForEx impact, as expected, reflecting a certain number of emerging countries and depreciation of some currencies in emerging countries, and we're able to get price rises across in these countries because they have high inflation. And we have a positive effect in terms of price, which counterbalances the negative effect that we see in the URFA. And the second effect is a favorable impact of hedging results. We do hedging in the short term in the renminbi and U.S. dollars. And here, we had a positive impact in '23, but we had a very positive effect in '22. And therefore, from 1 year to the next, that gave a negative offset of the result and that hedging activity. So here's the rest of the P&L. Stanislas has already mentioned this, it translates into a profit up 22%, reaching €386 million. So as regards to other expenses, particularly restructuring ones, for example, this was a rather weak year, which is below the group's historical standards. Second in terms of tax, our tax burden stands at 25%, which is more or less the group's regular tax rate. It's fair to say that last year, we benefited from the carryforward of deficits, which allowed us in Germany to reduce our tax burden. We cannot -- we could not benefit from this year. And we have a country mix effect, which is slightly adverse because the tax rate is different in China. So overall, the tax burden stands at 25%. And I think that in the coming years, we'll be hovering around 23%, 24% so which compares with a lower tax rate in the previous years. Right, now let's move on to the WCR. Let's look at the balance sheet, and the cash flow. As you can see, our WCR is down at 14.6%. It mainly reflects the decline, the continuous decline in inventories. We had already reduced them in 2022, and we continue this in 2023. The level of receivables is back to historical levels. So that means we have a positive impact in terms of cash flow, relative to a rather unusual situation last year. At the end of 2022, we slowed down the production of our factories. So it was receivables were payables rather were fairly low. So we now have a positive effect. So as you can see on this slide, we end up at 14.6%, which is slightly below the levels we had in 2018 and 2019. I think we already said that the usual level of WCR is between 15% and 17%, around 16%. So these were the levels of 2018 and 2019. And now we can see that with the seasonality of production, we are slightly below in 2023. Now on to the cash flow. We have an adjusted EBITDA, as you've seen, which is very close to €1 billion I've already mentioned the changes in the operating WCR, CapEx is slightly below our depreciation. It's fair to say that 2023 is a transitional year. In 2022, we had substantial investments, particularly the announcement of this logistics hub of the construction of this hub in Écully. In 2023, we announced substantial investments, but so that will have an effect as from 2024 onwards. So particularly we had the investment in Til-Châtel it's a new logistics hub for cookware. And of course, the investment in Shaoxing into a new plant to support the development of our professional business in China, but Stanislas will address this later in the second part. So at the end of the day here, we have a lots of free cash flow, [€805 billion] for the year. So thanks to this, of course, we can pay our shareholders. We can also further develop our strategy -- or further develop -- deliver on our strategy with the acquisition of new businesses in our portfolio package for food preparation, La San Marco, which I already mentioned, for traditional coffee machines and Forge Adour for Planchas. And despite these investments, we have managed to deleverage by €104 million. Let me now wrap up with the balance sheet. We have a very strong financial, very strong and healthy financial structure. It's very steady when you look at the available cash approximately €1.5 billion. Add to this undrawn IFRS 16 debt. So this gives us a lot of financial security. Second, I have just said a healthy financial structure because in 2023, we continued to operations that help us diversify our operations, particularly with the Schuldschein issue for €650 million, but also better staggering or spreads of our debt and an average debt maturity of [3.7] for debt above 1 year. And we have 87% in terms of fixed rate debt. So very, very strong financial structure. You can see and a net debt-to-EBITDA ratio, which is now below 2%. It stands at 1.8%. And if you look at things excluding IFRS impact and excluding acquisitions, we are even stand at 1.4%. Now in conclusion as you know, the Boards will recommend to the general meeting, the approval of €2.62 dividend per shares is up 7% after no increase last year, so we are back to levels that were similar to those we had over the last 15 years, so much for financials. I'll leave it to you Stanislas.

Stanislas De Gramont: Thank you very much, Olivier. Now I'm going to take you on a journey into the main operational achievements in 2023. Let's start with consumers. I'll be dealing with consumer first and then with professional. So this is a slide that was presented on the 14th of December on our Capital Market Day, where we explained the value creation drivers of our group. So we start from a situation of a global leadership in consumer for small domestic appliances. And it's based on 6 pillars

Q - Marie Fort: Marie Fort for Societe Generale. Could you give us a figure for your CapEx for 2024 following what you've just announced. Could you tell us about the acquisition you've announced that will happen in April. Could you tell us what's the expected profitability? Should we expect any impact on margins? Also, I wanted to address your strategy in business and in the professional business, also the idea of replicating consumer brands in the professional segments. How can your acquisitions help you innovate in the professional segment and also convert or replicate or adapt some of your consumer brands to the professional segments.

Unidentified Company Representative: I'll let you deal with the CapEx question, right. As we've said in terms of CapEx. We had €247 million. It was a bit low, which was €40 million under depreciation because 2023 was a transitional year. So we do believe that in 2024, we'll have similar depreciation levels actually might be slightly higher because as you've understood, we are planning some investments, which are quite structural an investment into Til-Châtel, the logistics for cookware in Western Europe and also the professional investments in Shaoxing. But Shaoxing is an investment that will last some time. So of course, we won't have all of the investments in 2024 already. Sofilac, it will be relative in terms of margin, 15%. It's the standards for the Professional market. So it will be accretive, accretive. Now as regards to brand synergies between the consumer and professional markets. I'm not sure it can apply to all brands, but there's a market that we could describe as semiprofessional in the next months and years. And it's really the performance and skills of professionals apply to premium brands and recognized as such by consumers. A very good example of Charvet does with [indiscernible]. These are hurts that's on our professional grade. But it's the same with the other brands that chefs really love to use. It's really up to the expectations in terms of cooking performance in terms of sustainability, durability, cleanability anything that a chef can expect. So of course, not all consumer brands can enter the professional segment. But we do believe that we have in our portfolio number of consumer brands that can really deliver what we would call super premium. But what we, I suppose, will call semiprofessional brands in the next year. That is a high-end product for the consumers. Does it answer your question?

Marie Fort: All right. Thank you.

Unidentified Analyst: [indiscernible] Kepler Cheuvreux. I have 4 questions, if I may. First, a lot of players in the consumer segment will have the organic growth decline because the price effect is going to wane. Could you maybe quantify the price mix effect for 2023 and maybe give us an idea of the potential of this impact for 2024. My second question, I do understand that so you don't have any visibility here on the volumes and sales, but could you maybe give us a modeling of commodity prices, freight, et cetera? And my third question is about China. It's the Chinese New Year, and it seems that Chinese consumers are looking for travel and leisure activities. So could you give us -- and maybe this could be at the expense of your products? Do you have the visibility on this? And the last as regards to the professional project in Shaoxing, will this plant only address the Chinese and Asian markets? Or will it help you compete in the European and American markets? And are you also considering developing the semiprofessional segment outside Europe, which is your main market.

Unidentified Company Representative: Okay. Well, actually, we'll start from the last question. Well, I'll share my opinion on this as well. The Shaoxing professional hub. What's really our stake here is to be able to cover the coffee machine segments in China, where we do not have any access. Now the Chinese market is developing. And we do believe that's the need for this product will also develop outside China. So today, are doing this mainly focusing on China and professional coffee. We're doing it this way because you've got to start somewhere. But we don't see this as a professional production in China and consumer in Europe. We are perfectly aware that anything that can be produced in China will have to be produced in China and the same for Europe. But I'm sure it will be the same 10 years down the line for professional. We see China as a development basis as a production site to meet local needs, but also when the market reaches a certain size going forward to meet a number of needs. So I suppose we'll -- we might exit China or coffee. But right now, we are working on professional coffee for China. About the Chinese New Year, there's not a big effect on end consumption in China, but statistics are interesting for a simple reason. That conventional events are getting closer and the relationship is diminishing. So the impact of this kind of event for 2 or 3 days on sales is less interesting with respect to the progress in the activity of consumer goods in China in the quarter and more about the Chinese New Year because it's kind of irrelevant. I'm going to let Olivier respond in detail about cost and perhaps to just pose the question. We've looked very closely up the P&L for a cost line item, and expenditures because the discrepancies were huge in '21 and '22, we had to explain the €150 million of cost per year of maritime freight. Now this is, we've gotten back to normal NPL with the growth in profitability and an increase in profit, which is on a virtuous cycle. And as a moderate volume, it was a continuing improvement in price and in mix. We have also -- we're investing in means of production and operating costs are contained. So I'll let Olivier answer. We've seen where the profits have been coming from, and it's been normalized. And there's a more amplitude effect than there has been in the last 3 or 4 years, and it's generating absolutely huge effects.

Olivier Casanova: I think you'd answer very well. It seems perfect to me. Maybe to just indicate 1 or 2 points insofar as the volume and price/mix are concerned. The volume effect in 2023, as you saw, we had a very strong growth in Professional. And that represents a significant portion of that volume effect. And we were more in recovering certain markets or recovering in certain consumer markets. But in 2024, as Stanislas has explained, we are expecting radical transformation about a recovery in certain markets, a gradual return to a year-long growth. And this should have a volume effect that may be more significant in consumer. So we always have -- we are still expecting growth in Professional, but maybe not 26% in 1 year to the next, but it will be positive in Professionals. So maybe rebalancing and then on a different basis. In terms of the price mix, the traditional dynamics in this industry is to enrich every year the product mix. And to have, on an ongoing basis, a positive effect of price and price mix. There's a price effect, obviously, with adaptation to inflation in some emerging countries, we'll always have that. But we always at the heart have this the core of the reactor is enriching products with products. There are many innovations in '23 in many segments. As Stanislas clearly outlined, all of that will provide profits and benefits in '24. In terms of cost, we have known a very significant impact in '23, which followed the degradation in cost hikes and the inflation in '23. This catch-up effect or correctional effect is kind of behind us. So there will be an effect -- like the tale of a comic kind of thing in '24, but the essential catch-up of costs pricing is, for example, in freight -- maritime freight and so forth, but there are others. Most of that was accomplished and met in '23. But there will be a positive effect in volume terms, part of those volumes are produced, I would say, in group plans, and that will contribute a positive effect in terms of volume on cost. So that's what we can say in terms of the underlying engine, I'll say what Stanislas did, we are accompanying the commercial development of the group, and thus translates into a few increases, but they'll be moderate in terms of it -- in the production engines as well.

Francis Prêtre: Francis Prêtre from CIC Market Solutions. First question, the emerging nations you said in '23 that they were kind of boosted in terms of their activity by some in El Niño. And that's kind of a one-shot thing. But starting from that, what are you expecting? What performance you're expecting? Is that going to be high? Could you talk to us a little bit about that, what the drivers are that would lead you. And in terms of activity in Europe, you can see is that France gain back some colors. In January, in terms of Agrifood, there's some contraction, which is not negligible. So how does that stand in other sectors? Could you also talk about Europe and in Germany as well that has known some difficulties and maybe do they have gain -- they gained some ground thanks to Black Friday. So what's going to be kicked off in that area, so we can understand the strategy and the induced costs that one could imagine. In line with that, you talked about the pipeline in terms of innovations that were high in '23 and the -- and so if I've understood you properly, the pipeline in '24 might be a bit less big than '23, which might make sense.

Unidentified Company Representative: No, oh good. Well, that's so much better. No, we don't want to do less well in '24 than in '23.

Francis Prêtre: So at this point, could you tell us why the pipeline in '24 would be as high as '23?

Unidentified Company Representative: Very well. I'm going to start with the last question. I think that the pipeline for innovation is continuous at SEB. And we've given you that in detail for '23. We were wondering a lot, what are we going to do in terms of innovation in '24. The activity is going to continue, we're going to keep that rhythm up and maybe accelerate because this is the way our industry works. And I think it's something that we need to integrate. Innovation at SEB is an engine that works on a continuing basis. It's a booster. There's a lot of ground work. It's a lot of mass efforts in various families. Concerning Europe, France and Germany, we can see the statistics, which are favorable in the industry, but industry has defined in France is, industry decide of the farm which is to enter professional organization. 2/3 of business from [G-farm] are ASM, both with their big devices or smaller, they are very different markets. On the one hand, you have objects that are between €400 and €3000, the other ones are €60. And the activity of small articles is positive in Europe and France. Because these are fundamental elements of consumers for consumers are accessible in terms of price that provide services on a daily basis and that are sold as is without and who are seeking more functions, more deligation, more practical, more quality in the results. And they find that in our products. So we're impacted, obviously, by changes in the market. But when you read the market, in this type of product in ASM is very different in terms of the dynamics of consumption. In terms of the -- our performance, we know that Germany was difficult for us in the first half year last year. We made -- we deny that. But is the business better or worse in the first half year this year, than it was last year? I think it's roughly similar. Germany is in a growth phase. But Germany, as a reference, we have consumers that appreciate our categories or of products they buy opticals and they buy vacuum cleaners and so forth. We see markets that are structurally sound in Europe, and we see in France and in Germany, even if the growth is not explosive, it is a positive growth. Now in France, there's things balanced back and forth over the year in the first semester. In the first half year, you have a loyalty effects. And in the second half year, that will -- so I'll respond to the question right away. Why is France negative in the first half year this year? Well, it's sales freezing and we'll -- usually, we'll get back what we launched in the first half year in the second year. So now in emerging nations, when you talked about El Niño to put forward, well, El Niño is a phenomenon that impacts sales, in Brazil and Colombia to keep it short. In emerging nations, Brazil and Colombia are a part of the whole thing, but there's Egypt, there's Turkey, there's Africa, there's Middle East. And all of these are not impacted at all by El Niño. So which leads us to say that we're going to succeed in maintaining interesting progression in sales in emerging nations, that price, actually the fact that it doesn't depend on El Niño. El Niño explains maybe 3 or 4 or 5 different points about Latin America, but not more. And the fundamentals in our businesses that are innovation of products and extending categories and expanding product ranges of intensification of our sales are there. Did that answer your question?

Francis Prêtre: Great. On the right here. France connect. Just 3 points. The first, I saw a figure of €80 million of share buyback, I didn't see the slide, I thought I heard it, I think. Maybe you could speak to us a bit more about where that stands in terms of strategy? Is it opportunistic? Or what was the reason? The second question is a product mix, which is kind of unusual. That you don't talk much about is a product mix between professional and consumer. I think it was an important factor for improving the margins in '23. That should be the case in '24 still. That's the question. And the last question is a stupid one. Don't you want to do refrigerators or you can do those washing machines? Because you're at your arms and ears in cooking. What about an oven?

Unidentified Company Representative: I think that behind this. We say that cooking is an area that we feel at ease. We have -- we've got grills. We have lots of things in cooking. We have pots and pans. We've got multi-cookers. And cooking is something that is really in our business. We have our business unit Electrical Cooking and a sub business unit and one is called Electrical Cooking. So cooking is our area, and we're in quite at ease with cooking. As to the rest, refrigerators and dishwashers and dishwashers, there are different scales and different industrial tools. So we're not interested in those. We're more interested because we don't know that, and it's a very heavy market. There's a lot of people there, not as much future in it. What about share buyback? We had an amount of €80 million. But this is roughly a 3 quarters, [7.25]. So that's the usual buyback for, to manage cash and the shares to be delivered to staff and management. And so far as Supor, we have an authorization for buyback which is because it's listed on the stock market, 1% authorization of capital. So that's what we bought back last year, which made it possible to participate in the capital SUPOR, through Supor, by Supor, 3 quarters. Okay. About your second question, the product mix. So we do have margins in professional that are structurally higher, an extra 15% compared with margins in consumer that are rather in the region of 10%. So the more we -- well, we develop professional either because it grows organically or because we add other things to our segment with acquisitions. So of course, it has an accretive effect. And as Stanislas has said, it's really the bedrock of our ambition in the medium term. We want to near 11%. We want to get closer to our historical standards, 10%. So of course, the more we develop our business in professional, the higher the accretive effect in terms of margins. So we had this effect in 2023. And again, it will happen in 2024 a bit more because professional is developing faster than consumer. Well, there's no rule. There's no rule. We make the decision every year, but it's in that -- in that order of magnitude.

Unidentified Analyst: I have 2 questions, please. You've shared some figures in terms of cash. Currently, it's possible to invest with the fairly interesting rates. In your acquisition policy, how do you factor in the rise in interest rates? Because you can easily -- one can easily have profitability of 3%, so that can raise question marks about potential acquisitions. Now CSR, you have a very virtuous policy. You sell a lot of appliances. So in innovation and replacement, have you introduced any policy to reclaim devices and appliances? And also, do you innovate to use less materials for the same use.

Unidentified Company Representative: I'll let you answer the first one on the technical aspect. We've never looked really at interest rates, when we do an acquisition. We don't embark upon an acquisition to say we're going to have -- we do this to either develop a business in a new category or in a new geographical area. Of course, we look at the cost of money at rate, but it's not a decisive factor as to whether we are going to do an acquisition or not. Yes. So of course, we invest our cash as much as possible. It does generate a yield. And actually, because of that, we managed to protect ourselves against the rise in interest rates. Now you, one should expect a slight rise in the financial income in 2024 because as we refinanced last year, we generated €650 million. So I suppose you will refinance this year. So I suppose there will be a rise by 200, 300 basis points. But part of this rise is indeed offset by our investments. As regards our refinancing strategy, we want to diversify further. Of course, we want to optimize the cost of each investment, but we are also working to diversify our investments. We try to spread our repayments and we try to have a fairly long average maturity which is what we did last year and we -- what we will be doing this year. As regards the recovery of products, I think it's a hallmark of our group. More than 90% of our electrical appliances are repairable every 3 months with the whole of the executive committee, I received a report on the number of products that have been [ carted ] about hundreds thousands every quarter. And I do a personal monitoring all this. So all our products are released with instructions to disassemble and reassemble. We have a warehouse in [Fauconi], which has inventory of spare parts for 15 years. And we have a network of repairers, the world over that can repair our products. They have the instructions for this assembly or reassembly. They have spare parts, which are available between 3 and 5 days. So this is very important for electrical appliances. And for cookware, we are a pioneer in collection and recycling operations for aluminum pans. Frying pans in our markets, and we want to develop further. We want to develop this further in the coming years.

Unidentified Analyst: Question from the floor. I'm sorry, I suppose I wasn't clear enough on my question. Let me ask again, if you want to change your appliance or if the appliance cannot be repaired. And if it's thrown away, people don't necessarily think of recycling them. So my question was, how do you encourage people whether professional or consumers, but how do you encourage them to be more virtuous. How do you encourage them to have their appliances collected?

Unidentified Company Representative: Right, the products you throw away are increasingly collected by organizations such as Ecosystem. Yes, Katy has sent me a technical sheet. So ecosystem is a professional organization that brings together all industrial companies and distributors. When the product is landfills or put in a dump site or thrown in the bin bay check what can be recovered in the product. This is something which is growing in Europe with collecting organizations. And of course, we are a major contributor to Ecosystem. And actually, they are quite fond of our products because they are easy to disassemble. Well, we are also a virtuous company. But it's not happening everywhere in the world yet. This is more of a European approach and Europe is more advanced. It's more of a pioneer than other regions in the world. I'm sorry, have I answered your question?

Unidentified Analyst: Question of Mike.

Unidentified Company Representative: Oh, yes, excuse me, I forgot that point. Innovation. When you put on the kettle, usually, well kettles, you cannot see what's inside. Now if you write on the kettle, the number of cups, you can actually encourage people to save water. People were not fully full -- fully fill up their kettle. They will only fill them to 2/3, for example. If you want to boil 10 centiliters of water, it will require twice as much as energy as for 5 centiliters. It's quite linear. It's basic physics. So there are many samples. For example, with ironing or for [indiscernible], we have energy-efficient modes. For example today, we can design a vacuum cleaner switch with 300 or 400 watts have vacuuming power, vacuuming qualities that are equivalent to what we had 10 or 15 years ago with the same with twice the power. So this is all thanks to research and development into steam irons, vacuum cleaners, water boiling because, of course, whenever you boil water, you use energy and calories. So we are constantly working on this.

Unidentified Analyst: I can see we have 2 questions online. Maybe we can switch to online questions for a few seconds. One question by [Ian Eric Smith]. Could you tell us, what was the -- the factoring level of receivables and payables?

Unidentified Company Representative: Well, I think it's €145 million of factoring in 2023, which is about €40 million below the 2022 level. So we have a strategy to reduce gradually factoring.

Unidentified Analyst: The second question, yes, that would for me. How do you envisage the future for flagging consumer activities such as home care or personal care?

Unidentified Company Representative: Well, for consumer. For example, for personal hold on -- have we answered the second question. I think you've deleted it. There was another -- can you please display the question that's just disappeared? Well, there's no category, just currently in the doldrums. There are just categories where we are less effective at the moment. So for example, we do hair dryers, hair straighteners, a bit of shaving and hair removal. These are categories where we haven't really delivered in the last 2 to 3 years, but we're not giving up in Spain, and I think in Romania, we have just launched a new hair brush. Hair Therapists, which has received raving reviews by influencers. We're not giving up. I suppose your question was a bit provocative, but we understand we, it's duly noted. We'll try to do better in terms of personal care. Now in terms of cooking appliances, we're not losing momentum. The fact is that there's a short-term trend in that there's a rise in air fryers worldwide. These are usually trends that last 18, 24, 36 months. Now we've jumped on the bandwagon. We are trying to catch up. We are #1 in drilling in Europe. We -- I think we are #1 for multi-cookers in Europe. So today, we depend more on the evolution of subfamilies of products. And if you see some figures are not as good as the others, it's probably linked with the development of product families. But actually, that's the beauty of covering several product families. You can dampen shocks or trend. But we are convinced that electrical cooking has a bright future ahead of itself. It's one of the main characteristics of the group, and we'll continue to work and develop our position in this across all geographical areas. Oh, the question that just disappeared, but there's another one now. A question about [indiscernible] dividend. Would you consider the payment of dividends in euros or in shares? I'm not aware that the group's policies to pay in shares going forward. The group's position at this point is to pay in cash. But then with cash, you can perfectly buy shares, can't you? Are there any other questions here in Paris? Well, I think we're done with online questions? Any questions here in Paris? Very well. It's close to 4. Thank you very much for your attention. Thank you for your continued support I just wanted to seize the -- this occasion to thank members of staff for our results. We are here the spokesperson of the 30,000 staff of the group. So thank you for them, thank you also to our colleagues, who are here who have helped us prepare this. And this is France. We have traditions let's have a drink together and a little snack. Thank you.