Inditex (BME:ITX), the parent company of fashion retailers such as Zara, has reported a robust operating performance for the year 2023, with a significant 10.4% increase in sales and a 30% jump in net income, reaching €5.4 billion. The company has announced plans to invest heavily in the coming year, with a focus on optimizing commercial space, enhancing online platforms, and expanding logistics capacities. These strategic moves are aimed at capturing future growth opportunities in the 213 markets Inditex operates in. Alongside these developments, Inditex has committed to sustainability and talent development, and is rewarding its shareholders with a 28% dividend increase for 2023.
Key Takeaways
- Inditex's sales grew by 10.4% in 2023, with net income rising by 30% to €5.4 billion.
- The company plans to invest €1.8 billion in 2024, focusing on store optimization, online platform improvements, and logistics expansion.
- A 28% dividend increase has been announced for the financial year 2023.
- Inditex sees strong potential for growth and plans to increase its annual gross space by around 5% from 2024 to 2026.
- Online sales increased by 16%, with the company emphasizing the integration of online and physical stores.
- The company is working towards 100% sustainability in their fibers by 2030 and has acquired an 11% stake in Infinited Fiber.
Company Outlook
- Inditex is set to grow its annual gross space by approximately 5% between 2024 and 2026.
- The company aims to capitalize on the positive space contribution to sales from its online growth.
Bearish Highlights
- There were no specific bearish highlights mentioned in the summary provided.
Bullish Highlights
- Inditex experienced a 19% profit before tax on sales and a 39% return on capital employed.
- All regions and concepts performed well, with positive sales growth in both stores and online.
- The company is investing ahead of the cycle to seize future growth opportunities.
Misses
- The summary provided does not specify any misses in Inditex's performance.
Q&A Highlights
- CFO Oscar Maceiras expressed satisfaction with the company's online performance and highlighted the integration of physical and online channels.
- Upcoming projects include a live stream service in the US and UK to improve customer experience.
- Maceiras mentioned collaborations with startups and a significant investment in Infinited Fiber Company to bolster sustainability efforts.
Inditex (ticker: ITX), with its strong financial performance and strategic investments, appears poised for continued growth. The company's commitment to integrating technology with its physical stores and enhancing the customer experience through new initiatives like live streaming services in key markets such as the US and UK, reflects its adaptive and forward-looking business model. Inditex's emphasis on sustainability, including partnerships and investments aimed at achieving 100% sustainable fibers by 2030, underscores its dedication to corporate responsibility. As Inditex continues to expand its global footprint, the market will be watching closely to see how these investments translate into long-term value for both the company and its shareholders.
InvestingPro Insights
Inditex, known for its flagship brand Zara, has demonstrated a solid financial footing in its recent report, with an impressive 10.4% rise in sales and a 30% surge in net income. The company's commitment to reinvestment in technology and sustainability is clear, and its shareholder rewards are robust, with a notable 28% dividend increase.
InvestingPro Data for Inditex (ticker: IDEXY) indicates a robust market capitalization of $151.66 billion, reflecting the company's substantial presence in the global retail market. The P/E ratio stands at 27.06, which, when compared to the company's near-term earnings growth, suggests that Inditex is trading at a low price-to-earnings ratio, potentially offering value to investors. Additionally, the company's revenue growth over the last twelve months as of Q3 2024 is reported at 11.69%, indicating a strong upward trajectory in its financial performance.
InvestingPro Tips reveal that Inditex holds more cash than debt on its balance sheet, providing a measure of financial stability that investors often seek. Moreover, the company has not only maintained but also raised its dividend for 22 consecutive years, highlighting a consistent return to shareholders. These aspects are particularly relevant to investors looking for companies with a strong financial base and a track record of rewarding shareholders.
For those interested in further insights, there are additional InvestingPro Tips available for Inditex, which can be accessed through the InvestingPro platform. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With these tools at your disposal, you can delve deeper into the financial health and market position of Inditex, and make more informed investment decisions.
Full transcript - Industria de Diseno Textil (IDEXY) Q4 2023:
Marcos García: Good morning to everybody. A warm welcome to all of those attending the presentation of Inditex’s results for 2023. I am Marcos López, Capital Markets Director. The presentation will be chaired by Inditex’s CEO, Oscar Garcia Maceiras. Also with us is our CFO, Ignacio Fernández. The presentation will be followed by a Q&A session, starting with the questions on the telephone and then those received through the webcast platform. Before we start, we will take the disclaimer as read. Please, Oscar.
Oscar Maceiras: Good morning, and welcome to our 2023 results presentation. It is my pleasure to join you today. In 2023, Inditex saw a very robust operating performance driven very much by the creativity of our teams and the strong execution of our fully integrated business model. We have experienced very satisfactory sales growth of 10.4%. Our collections were very well received throughout the year as a whole. This, of course, has been the main driver for sales, EBITDA and net income reach historic highs. The execution of the business model has also been very robust with a healthy gross margin and controlled cost management. On the bottom line, net income increased 30% to €5.4 billion. The operating performance of the group further underpins our sound financial position. This can be seen in the significant free cash flow generated over the period. We are proposing a dividend increase of 28% for financial year 2023 to €1.54 per share. The strong sales performance has continued beyond this period with our Spring Summer 2024 collections very well received by customers. Store and online sales in constant currency between the 1st of February and the 11th of March, adjusting for the extra trading day in February due to the leap year, grew 11% over the same period in the previous year. It’s evident that it’s our fully integrated store and online model that has driven such a strong performance over recent trading periods. Our performance relies on the 4 key pillars that we have highlighted to you on previous occasions: our product offering, a unique customer experience, our focus on sustainability, and the talent and commitment of our people. We have operations in 213 markets with low market share in a highly fragmented sector, and we continue to see strong global growth opportunities. These are the principal factors driving our differentiation. We have a strong commitment to profitable growth. In 2022 and 2023, Inditex experienced significant increase in sales and productivity. Sales have grown 35% in constant currency in the period. The growth of annual gross space in the period 2024 and 2026 is expected to be around 5%. We estimate ordinary capital expenditure of around €1.8 billion in 2024. This investment will be mainly dedicated to the optimization of our commercial space, its technological integration and the improvement of our online platforms. We have also started a logistic expansion plan 2024/2025. This is a 2-year extraordinary investment program focused on the expansion of the business, allocating €900 million each year to increase logistics capacities. I will now hand over to Ignacio to go over the headline numbers.
Ignacio Fernández: Thank you, Oscar. As you have seen in our release, Inditex executed very well in 2023. As Oscar highlighted a few moments ago, sales, EBITDA and net income all reached historic highs. Sales were up, plus 10.4%. You can manage the supply chain actively. This has driven a very healthy gross margin. Operating expenses have, of course, been managed rigorously. This has generated operating leverage. Consequently, EBITDA grew 13.9% to €9.8 billion. Below this line and for comparability reasons, this is the word not in the provision charge in 2022 relating to operations in the Russian Federation and Ukraine for €231 million in that year. We have also seen very strong progress on the net income line with increase of 30.3% to €5.4 billion. The group continues to generate significant free cash flow, and this has taken our net cash position to €11.4 billion. I would like to reiterate that sales have progressed very well at plus 10.4% and have reached €35.9 billion. That is 14.1% in constant currency. This strong sales growth came from both stores and online. Additionally, sales have been positive across all regions and across all concepts. At current exchange rates, Inditex expects a minus 1.5% currency impact on sales in 2024 with the first half waiting. As we have already commented, we have been positive across all key regions. We enjoy a global presence. It is our goal to build up on this. In 2023, gross profit increased 11.9% to €20.8 billion. In terms of the business model, demonstrated very good execution. The gross margin reached 57.8%. For 2024, Inditex expects a stable gross margin, plus/minus 50 basis points. There has been very rigorous control of operating expenses across all departments and business areas. Operating expenses increased below sales growth over 2023. Including all these charges, operating expenses grew 125 basis points below sales growth. Over the period, we have experienced a robust operating performance. We have also seen a normalization in supply chain conditions. Inventory at Inditex as of the January 31, 2024, was 7% lower than at the same date in 2023. Let me also add that over the period, inventory is considered to be of high quality. Due to the strong cash flow generation, cash position has grown 15.3% to €11.4 billion. With all of this, you can see far cooperation after fixed lease cash payments reach historic highs of €7 billion. And now over to Marcos.
Marcos García: Thank you. Following on from Ignacio’s comments, I would like to reiterate that the performance of 2023 has been remarkable. Notably, this performance was across all the concepts. We are very happy with the accretion over the period. In 2023, we opened stores in 41 markets and have progressed with optimization activities across all concepts. Store sales and online have grown significantly. Zara has, of course, had a good year. The performance of the younger concepts has also been robust. We are satisfied with the execution of all the concepts over 2023. This table illustrates a very healthy set of metrics across the board for the group. Let me highlight just 2 of these key metrics. Inditex’s profit before tax on sales has increased 266 basis points to 19.1%. And remarkably, return on capital employed has increased 580 basis points to 39% in 2023. And now back to you, Oscar.
Oscar Maceiras: Thank you, Marcos. Inditex continues to see strong growth opportunities. Our key priorities are to continually improve the product proposition, to enhance the customer experience, to increase our focus on sustainability and to preserve the talent and commitment of our people. Strengthening these areas will drive long-term organic growth. The flexibility and responsiveness of our business in conjunction with in-season proximity sourcing allows a rapid reaction to fashion trends and a unique market position. Our business model has great potential going forward. The growth of the group is underpinned by the investment in stores, the advances made to the online sales channel and the improvements to the logistics platforms with a clear focus on innovation and technology. Sustainability is a key part of the strategy. Over 2023, we have seen very strong progress of our unique business model and a material increase in differentiation. The end result has been an enhanced customer experience. To take our business model to the next level and extend our differentiation further, we are developing a number of initiatives in key areas for the coming years. Our teams remain highly dedicated to what we consider to be the core essence of all our concepts, a distinctive fashion proposition focused around creativity and innovation. This process is carried out by a team of 700 designers and a 650-person prototype team using a meticulous design process that attends to every small detail of our garments and collections while striving to provide quality fashion to more and more customers around the world. Thanks to our unique integrated model of stores and online, our teams continue to take advantage of the great growth opportunities we see in all channels, formats and markets. This involves new openings and refurbishments of stores in the best locations, expanding our formats to new cities and new territories, and the launch of new services that elevate the shopping experience. We see significant long-term growth opportunities in the United States also for the concepts. Massimo Dutti expects to open a store in Miami by the end of the year. We expect the concepts to launch in new markets, like for Oysho in Germany at Hamburg, and first stores in India for Bershka and in Mumbai Palladium, and Zara Home in Bangalore. We are in the process of launching a new weekly live stream experience for Zara in the United States and the U.K. The live stream reflects our continual efforts to offer the best customer experience and will be available soon in other markets. In terms of circularity, the Zara pre-owned platform is currently available in 16 European markets. Through this platform, we will continue helping our customers to extend the life cycle of the Zara garments through donation, repair or resale. In 2024, we will extend this service to our customers in the United States. Regarding innovation, our Sustainability Innovation Hub is currently working with more than 350 startups. Some of these projects are now contributing to our current collections. An example of this is LOOPAMID x Zara. Zara Studio has developed a single material jacket made with LOOPAMID, a polyamide created entirely from textile waste. We have also seen commercial collaborations with CIRC. Furthermore, we have constantly strengthened our commitment to Infinited Fiber with a direct investment in the capital of the company. We continue to promote the talent and commitment of our teams in order to reinforce our attractiveness as a benchmark employer. Hola! is our welcome training program for everyone joining a Zara store for the first time. This is an itinerary for the first 4 weeks, combining hands-on and digital sessions on our training platform. We highlight the figure of Zara Coach, the person in charge of welcoming, guiding, supporting and involving the rest of the team during the process. The Hola! program is already available in 50 markets where we have about 2,800 Zara Coaches so far. In addition, throughout the 2023 financial year, more than 12,700 people have been promoted, resulting in 72% of the group vacancies being filled internally. Furthermore, 2.8 million hours of training have been provided to the teams. We operate in 213 markets with low share in a highly fragmented sector, and we see strong growth opportunities. To meet the current strong demand, which builds on the significant growth of the business in 2022 to 2023, we are indeed taking a number of initiatives. Firstly, optimization of stores is ongoing. We expect increased sales productivity in our stores going forward. The growth of annual gross space in the period 2024 to 2026 is expected to be around 5%. Inditex expects space contribution to sales to be positive in the period 2024 to 2026 in conjunction with a strong evolution of online sales. We are planning investments that will scale our capabilities, obtain efficiencies and increase our competitive differentiation to the next level. For 2024, we estimate ordinary capital expenditure of around €1.8 billion. This investment will be mainly directed at optimization of our commercial space, its technological integration and the improvement of our online platforms. In view of the strong future growth opportunities, Inditex has designed a logistic expansion plan for 2024 and 2025. This 2-year extraordinary investment program focused on the expansion of the business allocates €900 million per year to increase logistic capacities in each of the 2024 and 2025 financial years. The main investments are for Zara, a new 268,000 square meter distribution center, Zaragoza II; an increased distribution center capacity of 123,000 square meters in Lelystad, the Netherlands. For Bershka, a new 116,000 square meter distribution center in the Valencia region. And for Tempe, a new 141,000 square meter distribution center also in the Valencia region. Most of these projects will be gradually operational as early as the second half of 2025. The objective of this logistic expansion plan is to strengthen Inditex’s capacity to capture the ample global growth opportunities in the medium and long term. These investments will have the highest status of sustainability and use the most up-to-date technology. I would like to finish with a brief comment on our current performance. Spring/summer collections have been very well received by our customers. store and online sales in custom currency adjust for the calendar effect of an extra trading day in February due to the leap year, increased 11% between the 1st of February and 11th of March 2024 versus the same period in 2023. We have an attractive and predictable dividend policy, which consists of a 60% ordinary payout and bonus dividends. For financial year 2023, the Board of Directors will propose at the Annual General Meeting a dividend increase of 28% to €1.54 per share, composed of an ordinary dividend of €1.04 and a bonus dividend of €0.5 per share. The dividend will be made up of 2 equal payments. On May 2, 2024, a payment of €0.77 per share ordinary and the remainder, €0.77 per share on the November 4, 2024. Thank you all for attending. That concludes our presentation for today, and we would be happy to answer any questions you may have.
A - James O’Shaughnessy: [Operator Instructions] First question goes to Richard Chamberlain from RBC.
Richard Chamberlain: Yes. Could I just ask a question on space, please. In terms of the -- I think you’ve said that you’re looking to bring on something like 5% gross space per year over the next few years. What kind of space sort of conversion rate to sales do you expect from that? Could that be sort of around -- I think the historic average has been something like 75% to 80%. Should we expect something similar going forward?
Oscar Maceiras: Good morning, Richard. Thanks for joining us this morning. Well, we expect annual gross space growth of 5% in the period ‘24 to ‘26, a net space contribution to sales positive. Our optimization plan remains in place as is evidenced by the ‘23 figures, 4.5% gross space growth, 2% less stores, 2% net space growth, 7.9% sales growth in our physical stores. And we see growth opportunities in every market. Bear in mind that even in our mature markets, some of our concepts are beginning their physical operations after having a good knowledge of the market through the online performance. An example of this is, for instance, Germany. Stradivarius has just opened its first stores in ‘23, Stuttgart and Dresden, with great success. And Oysho will open its first store at the end of April ‘24 in Hamburg. Again, we see our strong growth opportunities for all of our concepts, all of our formats in the different markets. And of course, we additionally see very healthy evolution of our own online sales going forward.
James O’Shaughnessy: The next question comes from Georgina Johanan from JPMorgan.
Georgina Johanan: I just wondered if you could give us a broader update on progress in the U.S., please. It just seems you granted on it slightly less in the release than you have over the past few quarters. So just how is that progressing? What are you seeing in terms of brand awareness and sort of demand from the customers? And also, you mentioned about sort of other concepts in the U.S. Are you mainly referring to Massimo Dutti? Or would you also be considering rolling out some of the more kind of younger focused concepts in the U.S., please?
Oscar Maceiras: Thank you, Georgina. Well, as we have highlighted previously in our calls, the U.S. is a core market for us, and we remain seeing very important opportunities for our selective and profitable growth there. Our product proposition is very well appreciated by our customers, and the areas where our fashion is likely to be successful through physical store, plus our online operations are wider than ever. ‘23 has been very positive for us. Last year, we announced 30 projects for ‘23 -- ‘25 with Zara, including openings, refurbishments, enlargements and relocations. Important projects of that year have been, for instance, the opening of new stores in Baton Rouge, Louisiana or San Antonio, Northwest in Texas. And important enlargements in some of our most successful stores in the market, like Dadeland Mall in Miami or Roosevelt Field Mall near New York. For ‘24, we have some exciting projects that include, for instance, a new store in The Grove, Los Angeles, or Caesars (NASDAQ:CZR) Palace at Las Vegas. Of course, these improvements in our physical footprint are aligned with our efforts to keep on improving the experience of our customers through our online platforms. A good example of this is launching of a live stream weekly experience through our platforms in the coming weeks in the U.S. and in U.K. And in the process, as you have mentioned, of looking for additional opportunities for growth, we have decided to open a Massimo Dutti store in Aventura in Miami. The decision has been considered as after the good level of our online sales through Dutti website [indiscernible].com. And of course, we keep on identifying new opportunities for Zara, for Massimo Dutti, but also for another of our commercial formats going forward in the U.S. And of course, we will keep on developing new projects for our online platform. Just my last comment is all of this is in place. But at the same time, we will remain strengthening our commitment with sustainability, with our circular platform, Zara Pre-owned, arriving at the U.S. in ‘24 after being rolled out in 16 European markets.
James O’Shaughnessy: The next question comes from Sreedhar Mahamkali from UBS.
Sreedhar Mahamkali: So the question is just if you could expand a little bit on the logistics investments, please, the extraordinary investments that you talked about, €900 million a year. What capacity does that add? Maybe in terms of sales capacity, is there anything you can help us with? And what are the implications for operating leverage? While you sort of grow into that capacity, how should we think about sustainability of the operating leverage we are seeing today?
Oscar Maceiras: Thanks for the questions. Well, we have had a very strong growth these last 2 years, plus 35% with a plus 10.4% in ‘23 in reported terms, plus 14% in constant currency. Just to reiterate my previous comments, we are seeing strong growth opportunities going forward for all of our commercial formats in both channels, online and physical stores, and in all markets. What we expect is an annual space growth of around 5% in the period ‘24/’26 with positive space contribution. Key for these results and for our business models is to keep on enhancing the experience of our customers. And experience relates to having the best stores and having the best online platforms, and to what objective we are allocating €1.8 billion as an ordinary capital expenditure this ‘24. But customer experience also requires to have the capabilities needed to provide our customers what they are looking for, when, where and how they want. And that’s why we have announced this logistic expansion plan for ‘24 and ‘25 million, €900 million each of these 2 years. It’s our way of being in a position to keep on taking advantage of any new opportunity for profitable growth in the medium to long term. And this is consistent with what we have always been doing. Having an attractive remuneration for our shareholders, but at the same time, investing was needed for that profitable growth. This investment, most of the projects will be gradually operational as early as the second half ‘25.
James O’Shaughnessy: The next question comes from William Woods from Bernstein.
William Woods: I just wondered if you could talk about the other non-Zara concepts margin expansion in a little bit more detail. I think we’ve seen big swings of kind of 400, 500 basis points in some case. What’s been the focus in some of the other concepts on cost?
Marcos García: Well, let me start answering your question by highlighting that all the concepts share the same business model as Zara, right, in the sense that flexibility remains very important, reaction to market trends, combination of stores and online, proximity sourcing, et cetera, et cetera. So this business model done obviously has delivered the type of growth you have seen this year. This year has been remarkable. We’ve mentioned that in the presentation, we have achieved double-digit growth. And combining the last 2 years, we’re talking about 35% sales growth as a whole for the group, which is very, very strong. Then we have achieved a profit before tax on sales of 19%, increasing 266 basis points over the previous year, and return on capital employed has reached 39%. It is a year in which the concepts have all progressed well across the board. It’s also a year in which we have had positive sales growth, both in stores and online, as you have seen in your note, and growth in all the key geographies in which we operate. So I think that the differentiation you’re seeing in the performance of the company is very much the result of the business model and the execution and talent of our teams.
James O’Shaughnessy: The next question comes from James Grzinic from Jefferies.
James Grzinic: Yes. Congratulations on another great year. Very simple question. Marcos, you pointed out really strong progress in your returns profile recently. Given the scale on the investment that we’re seeing over the next couple of years, can you exclude that perhaps that returns profile might dilute a little bit? How are you thinking about that? So you have a little bit of dilution and then you push on further once that rate of exceptional investment exes out from your cash flow?
Marcos García: I think that Oscar has been very, very clear that we see very strong growth opportunities. And the main goal of the company is always to invest ahead of the cycle to be able to obtain these opportunities right in the marketplace. It’s also a very, very clear fact that this year, the performance has been very strong. We’ve mentioned double-digit sales growth, 19% PBT on sales, 39% return on capital employed. So this is probably the moment in which the company has thought it should add muscle for future expansion, right, for future growth. This is very much our thinking. So it’s a combination of the very strong commercial opportunities, the way the company is executing and also with, obviously, the financials we have mentioned.
James O’Shaughnessy: The next question comes from Warwick Okines from Exane BNP Paribas (OTC:BNPQY).
Warwick Okines: A little bit more focus on the CapEx, if you don’t mind. Could you give us some detail on the €1.8 billion ordinary CapEx? Any particular areas of expenditure? And also interested by the Tempe expansion. Do you see a particular strategic growth opportunity in footwear?
Marcos García: Well, in terms of the ordinary CapEx, as you have seen over recent years, the company has made a very, very strong effort in terms of store optimization, and this remains a key fact for us. In the financial release, we have shared with you that behind the headline numbers of 2% net space growth, 4.5% gross space growth, there are very significant activities. We have talked about 192 openings, 231 refurbishments, 84 enlargements and 350 absorptions. So to have the best store network is always a key thing for us. This should be combined with 2 things, obviously, is to integrate these stores with the best technology possible, right? And then having a look at the long-term growth opportunities, the current situation of the company is this decision to top up the CapEx this year, thinking of expansion, new opportunities with €900 million in logistics to add muscle to take -- be able to focus on these new opportunities for the next 2 years.
James O’Shaughnessy: The next question comes from Anne Critchlow at Societe Generale (OTC:SCGLY).
Anne Critchlow: My question is about online orders that are fulfilled from stores. So I’m just wondering how the sales progressed during the year? And whether you expect this increased investment to increase that proportion further?
Marcos García: Can you repeat the question, Anne?
Anne Critchlow: Yes. So I think you used to call the online orders that were fulfilled from store stock since sales. So I’m just wondering if the proportion of online orders fulfilled from the stores increased during the year and whether you expect the investment you’re making to push that a bit further?
Marcos García: Well, we have increased in the financial release a breakdown of the growth of store sales and online sales. Store sales grew by 8%. Online sales grew 16%. But it’s obviously a combination, is the combination of stores and online that defines our business model. It’s fully integrated. For us, we are absolutely agnostic in the way we can do it. Obviously, SINT, as you referred to, the execution of online and stores remains in place. And with the new RFID alarms, we believe we are improving also the experience in the store. And so what I can say is that we’re very, very happy with the performance of both the store and online, but the important thing is the integration of both channels.
James O’Shaughnessy: Thank you, Marcos. That concludes the Q&A session for today. We’ll just pass over to webcast questions, the first of which is perhaps you could give us some color on the progress of online, please?
Oscar Maceiras: Thank you. Well, we are very satisfied with our performance through our online platforms, as Marcos has just highlighted, an important sales increase with positive evolution in all concepts and markets. But I would like to highlight that all of this is a consequence of our fully integrated model. It’s not possible to understand properly the strength of our online sales without taking in consideration the operational support provided by our stores, as [indiscernible] has been referred to. And it’s not possible to understand the very positive evolution of our sales in our physical stores without bearing in mind the strong prescription capacity of our online platforms, more than 251 million followers in social media, more than 6.5 billion visits during the ‘23 fiscal year. We are developing projects that are looking for the improvement of our customer experience. And one example of this that I already mentioned is that we are about to launch the live stream service with our own platforms in the U.S. and U.K. And besides, we keep on identifying new ways of interaction with our [indiscernible] customers. 2 examples of these are Bershka Members and Pull&Bear SHUFFLE.
James O’Shaughnessy: Thank you, Oscar. The next question relates to sustainability. Perhaps you could give us some more color, perhaps even specifically relating to the collaboration with Infinited Fiber company.
Oscar Maceiras: Thanks for the question. Well, you know very well that we consider that sustainability is 1 of the 4 key pillars of our model. Just a reminder, during our last AGM in July, we announced new public commitments that reflected an increasing our ambition for our own transformation and the transformation of the sector. In terms of innovation, we announced our commitment to reach 100% of total fibers more sustainable by 2030. With that in mind, we are collaborating with more than 350 startups through our Sustainability Innovation Hub. Sometimes that collaboration implies partnership with companies, one example of this is LOOPAMID x Zara. That’s the result of a project that has allowed us to produce a polyamide from textile waste. Sometimes we collate through offtakes. Recently, we announced our agreement with Ambercycle to purchase an important percentage of their production of cycora, a sustainable polyester fiber. And sometimes we decide to enter in the capital of the company. Last week, as you have mentioned, was released the strengthening of our collaboration with Infinited Fiber taking 11% of the capital. We consider that sustainability is not possible without innovation, and we consider as well that innovation is not possible without the commitment of the different players in our sector. And we will remain committed to innovation for our own transformation and again to help and to support the transformation of the industry. Thank you.
James O’Shaughnessy: Thank you. That concludes the webcast questions for today.
Oscar Maceiras: Thank you to all of those who participate in the presentation today. For any additional questions you may have, please get in touch with our Capital Markets department. We look forward to speaking with you again in June. Thank you.
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