Good morning, everyone. Thank you for joining us today for Burberry’s Preliminary Results Presentation. Before we begin, I would like to say a few words about our Chairman, Sir John Peace, who is sitting here with us. As you will have seen from last month’s announcement, Sir John will be stepping down from the role and from the Board after the Company's Annual Shareholder Meeting on 12th July. On behalf of the Board and every one at Burberry, I would like to thank Sir John for his immense contribution to the business and as Chairman for the past 16 years. Sir John has presided over a period of extraordinary change, leading Burberry's evolution into one of the most valuable luxury brands in the world. Thank you, Sir John. At the same time, we did farewell to Christopher Bailey, and I would like to take this opportunity to acknowledge once again his tremendous contribution to Burberry. Christopher leaves an incredible legacy and strong foundations on which we can build the future of the brand. As we communicated, Dr. Jerry Murphy, has now been appointed to the board as Chairman designate. He will start tomorrow, and will succeed Sir John after the AGM. In Dr. Murphy, we found a superb candidate with extensive experience in the consumer and retail industries. I am delighted that he will be the leading the Board, and I'm really looking forward to working together as we implement our strategy. In terms of our agenda for today; Julie, will start by covering our financial results and guidance, as well as operational excellence; after this, I will give a brief update on our strategic progress and close by taking any questions you have. I will begin with a few words on our result. In line with expectations, Group revenue is up 2% adjusted for beauty with comparable store sales up 3% and adjusted operating profit up 5%. Overall, in the context of a buoyant luxury market, this was a good year and these results represent strong execution through a period of transition. Customers responded well to our innovation in product, and our conversion improved as we focused globally on the retail excellence. Our top customers increased their spend and our digital channels performed well. We have also seen some encouraging early signs of the new strategy, which I will come back to later. Given the scale of our ambition for the brand and the significant amount of change in the business over the last 12 months, I believe these results mark a positive start as we implement our strategy in the coming year. And with that, over to Julie.

Thank you, Marco and good morning, ladies and gentleman. We dedicated considerable focus this year to improving execution and exercising financial discipline, and we’re encouraged by our positive results for the year. During this presentation, unless otherwise stated, I will refer to constant exchange rates. The revenue was £2.7 billion, up 2% adjusting for the Beauty deal. Including the impact to Beauty, revenue was down 1%. Adjusted operating profit was £467 million, up 5% and our operating margin improved 110 basis points at CER. Adjusted diluted EPS was up 10%, positively impacted by tax and share repurchases. Free cash generation was strong at £0.5 billion, and return on invested capital increased 90 basis points to 16.3% at reported rates. And finally, we announced a full-year dividend of 41.3 pence up 6% in line with our policy. We closed the year with net cash of £0.9 billion after £0.5 billion of share repurchases and dividends. And we have announced a new buyback today of £150 million to be completed in full-year '19. So this slide shows the changes to our revenue by channel. And first I'll give you more insight into our retail business performance. So retail grew 3% with comparable store sales growth of 3%, split 4% in the first half and 2% in the second. Growth was led by volume and underpinned by conversion, improving in all regions and supported by retail excellence initiatives, which Marco will cover in more detail later. Space was broadly neutral in the year with our strategic store closures, beginning in the fourth quarter. Wholesale, excluding Beauty, was flat, reflecting our initial actions to reduce non-luxury doors and that said, we were ahead of guidance due to higher levels of in-season orders in the second half. Licensing grew 21%, benefiting from the Beauty transitioning to a license model, offset by reduce royalties from some of our other agreements. Potential business, excluding Beauty wholesale, grew by 2%. In terms of the regional growth trends, looking at retail and wholesale performance, in the full-year; Asia Pac was our strongest performing region with 5% growth in retail wholesale and a mid-single digit comparable sales growth; Mainland China delivered a high single-digit comp; and Hong-Kong return to growth in the full-year, positively impacted by both local and tourist spend in the final quarter; the Chinese consumer, our largest nationality globally, grew mid-single-digits in full-year '18; EMEA grew 1% with comp sales unchanged. The first half was stronger than second as we expected. The UK was impacted by some exceptional prior year comps due to Brexit and closed the year with a low single-digit growth. Continental Europe was impacted by reduced tourist spend in half two. And wholesale in EMEA was broadly stable. And finally, our business in America declined marginally with two major factors to note. Firstly, we saw encouraging retail trends in the U.S. with growth returning in half two as our retail excellence initiatives generate positive conversion and traffic improved through the year. For the area as a whole, retail comp was up low single-digits. Secondly, we initiated planned changes to distribution in line with our strategy. The consequence of which was a high single digit percentage decline in wholesale. We've been evolving our business model towards retail, and now following the Beauty transaction over 80% of our sales are derived from our owned directly operated stores. Looking at this by project, this chart shows our retail and wholesale performance combined. Therefore, growth rates have somewhat depressed by the inclusion of the wholesale business. In mainline stores, customers responded really positively to seasonal updates and innovation. The highest growth product category was in apparels with men's at 4% and women’s at 2%. Our focus on outfitting the customer drove strength in tops, skirts and trousers in the second half. And in April 2018, we’ve refreshed our heritage trench program, updating the styles, streamlining the colors and further enhancing our most iconic projects. Accessories grew 1% with strength in small leather goods. In March this year, we began our leather transformation. And with the first of our strategic bag launches, the belt bag, and we’re very pleased with the early response. This slide shows the major components of our income statement. Gross margin improved at constant currency, benefiting from an improved Beauty margin and positive channel mix, partially offset by higher inventory charges year-on-year. At reported rate, gross margin declined 50 basis points due to a currency headwind. For the full year, adjusted operating profit grew 5% CER, 2% reported and our margin improved to 17.1%, which I will return to later. Adjusted operating items totaled £57 million, largely due to restructuring charges related to our cost efficiency program. Fees totaled £54 million this year, and we maintained guidance for cumulative cost to reach £110 million by full year ’19. Adjusted EPS was ahead of profit due to the combined impact of an improved tax rate and the accretive impact of the share repurchase program. Our tax rate improved 70 basis points on the previous year to 25.1%. Now, let me summarize the improvement in our operating margin in more depth. So firstly, the cost savings program delivered ahead of plan with savings of £44 million in the year, bringing cumulative benefit to £64 million. And we’re now over half way through our commitment to deliver annualized savings of £120 million by full year ’20. Secondly, we benefitted from improved profitability from Beauty and channel mix. However, during the year, we continued to face upward pressure on the cost base due to property and manpower inflation and inventory challenges. And finally, we made strategic investments in technology, in digital, retail excellence and leadership initiative. So, now turning to the cash flow. The business remains strongly cash generative with £484 million of free cash flow, and cash conversion at 128%. A few key points to call out; working capital improved as fashion inventory reduced by 5%; and receivable decreased, following the collection of debtors for Beauty; capital spend was similar to last year to £106 million, and this was lower than we guided due to the phasing projects; capital investment will step up in the coming year, and I’ll return to this in the guidance. This slide shows the movement in cash during the year in line with our capital allocation framework. We generated free cash of £590 million before CapEx. And in the year, the main outflows related to capital expenditure are dividend and the buyback program. We returned over £500 million to shareholders by way of the dividend at £169 million and the buyback of £355 million. We received a one off inflow from Coty of £150, including £30 million for the inventory transfer. And in total, our net cash at March 2018 was £0.9 billion, or on a lease adjusted based net debt of £0.3 billion. Turning to guidance. In November, we explained our transformation has two important phases. First, we expect a period of transition as we rationalize distribution and invest to reenergize the brand. And we believe this period of investment will enable us to deliver long-term sustainable value. In the second phase, we expect growth to accelerate to high single digit revenue growth and a meaningful improvement in margin. In full year ’19, therefore, there is no change to the broadly stable revenue and margin guidance issued in November. Taking revenue guidance first, our actions to improve distribution will impact both retail and wholesale revenue. For retail, we expect minus 1% impact from space, as we evolve the network. And secondly, for wholesale, we expect a low single digit decline for the full year with most of the impact being felt in the second half. Regarding other items of guidance, we’re on track to deliver £100 million of cumulative cost savings, and expect cumulative one-off charges of £110 million as we previously guided. Earnings per share is expected to benefit from a continued reduction in our tax rate by 100 basis points to 24%, and the commencement of our share buyback program. Capital expenditure will increase to £160 million to £170 million as we improve our store network in a number of key markets, including relocating number of our stores in China and continuing to invest in digital and technology. Regarding foreign exchange, as usual, we have run our model at the end of April stock rates. This implied a negative impact of £45 million on revenue and £40 million on profits compared with the prior year. However, since the month end, currency has moved slightly in our favor and reduced the profit headwind to closer to £30 million to £35 million. Do note that this could reduce our operating margin by around 100 basis points in the coming year on a reported basis. And to help with modeling through the year, we have included a high level sensitivity analysis in the appendix. You will have seen the majority this week for the acquisition of our leather goods business in Italy. We expect payments to the vendor to be up to €26 million, of which €15 million will be paid on completion and the balance will be paid over the following three years. We expect no impact on adjusted operating profit guidance for full year ’19 or full year ’20. Finally, a note on disclosure. In our drive for simplification, we are moving all functions in the business to a single retail calendar, and this includes touch through reporting calendar. So from the first of April 2018, we will make this change. There will be no material difference to compatibility in the full year, but there will be small quarterly difference due to sales days, and these are explained more fully in our appendix. So this concludes our financial review. And I’d like to just summarize, there are results in 2018 are in line with forecast, the cost savings are hedged and we have very strong free cash flow. 2019 is expected to be in line with strategy that we announced in November. And we continue to focus on maximizing longer-term value for our shareholders at the time when the outlook for Burberry and the luxury sector more widely, continued to be very attractive. Now, I would like to turn to strategy. And a few words on operational excellence, before Marco reviews our strategic progress more broadly. So operational excellence is changing the way we work in Burberry. And over the past two years, we have simplified our operating model. We've launched Burberry business services. We've delivered significant procurement benefit. And we delivered major change programs in supply-chain and in IT. And as an example, I am proud to update you on the progress we've made with Burberry business services. We identified the building in Leeds this time last year. We went live in October with five major functions; finance, HR, procurement, IT and customer service. We received over 12,000 job applications, and have now recruited a fully fledged team of several hundred people, taking over major processes and benefiting from true cross-functional working. And benefits from this are just beginning, as we’re now at the stage of implementing lean six-sigma as a way of working to remove duplication in our processes. Our procurement team have also delivered a record level of savings across major categories of spend. And with further 20 projects in the pipeline, we expect to release more value in the coming year. As mentioned, we've now delivered savings of £64 million and are on track with the £120 million annualized by full year 20. So stepping back from individual projects, we’re also working hard to build a culture of simplification, agility, efficiency and discipline across our business, which will be critical to underpinning our strategy. And with that, I'm pleased to hand back to Marco.

Thank you, Julie. I'd like to take a few moments now to update on our strategic progress. Last November, I shared with you our strategy to reenergize the brand, and inspire the luxury consumer. The recent changes in our sector and the ever-evolving consumer confirm that we have the right strategy in place to deliver sustainable long-term value. As you know, our strategy has six elements. We have the opportunity to drive revenue through evolving our product, communication, distribution and digital, underpinned by our work on operational excellence and inspire people. Over the last six months, we are focused on strengthening our foundations to deliver the strategy, while still in the early stages of our transformation with the majority of change still ahead of us. But so far, I'm pleased with the progress. I'd now like to share with you a handful of key insights. Firstly, I wanted to say a few words about Ricardo, whose creative vision is at the heart of our strategy. I believe Ricardo is one of the most talented and influential designers of our time. His designs have a contemporary elegance and his skill in blending streetwear with high-fashion is highly relevant to today’s luxury consumer. He brings expertise across categories, including womenswear, menswear, leather goods and accessories. Riccardo also embraces the British Spirit that is at the heart of Burberry and is excited to nurture. Since he arrived a couple of months ago, Riccardo has already formed great relationships with the teams across the business. He has embraced Burberry’s icons. And as many of you will have seen, style is a series of looks, celebrating essential pieces such as the heritage trench coat and the cape. You can see some of the images here, which were released on Instagram last week. As you know, product transformations take time. We expect the majority of Riccardo’s product to be delivered by May or June next year with the arrival of our autumn/winter collection. Of course in the meantime, we will continue to have exciting launches and we will be mindful of managing our inventory as we undertake this transition. We’re all very excited about this new era for Burberry, and I am personally really enjoying working together again with Riccardo. Over the past few months, we have been making good progress in the way we deliver product and interact with our customers. We’re still at the start of this evolution, but have begun to deliver frequent fresh product drops and capsules, continuously engaging customers with newness and excitement. A good recent example of this is the February runway capsule. Let me highlight three things on this. Firstly, it was tighter and more productive than previous capsules. Instead of making all our runway products available for immediate purchase after the show, as we have done in the past, this year, we tightened the offer, sending a highly edited strong fashion message to the consumer, was delivering triple digit revenue growth by option. Secondly, we see this as the natural evolution of our go-to-market strategy, answering customers’ desire for newness and innovation with frequent, even unexpected product drops. It’s a new way of working for us, and one we will continue to develop going forward. And thirdly, in terms of customer, the February capsule both attracted new young customers and resonated well with our existing top gear clients. In line with our strategy, it achieved higher than average outfitting rates with customers buying complete looks. Of course, the capsule is a small part of our overall product offer. And the majority of the product transformation is only just beginning now with Riccardo on board. That said, it is an encouraging sign. Also, from the world of product, we have begun to transform our leather goods. We have created a new handbags architecture around the range of customers, end uses and silhouette preferences, whilst ensuring value is perceptible. You will have seen some of the newer handbag styles already in stores, and you can expect more innovation to arrive over the next few months when we will be refreshing some of our core shapes and launching a number new styles. Earlier this week, I was delighted to share the news that we have entered into an agreement to acquire a business from one of our long-standing Italian partner, CFMP. Based in Florence, in an area renowned for high quality manufacturing, CFMP has industry leading expertise and specializes in the development and manufacture of luxury leather handbags and accessories. With this acquisition, we will create a new center of excellence for leather goods, covering all activities from prototyping, product innovation, engineering and the coordination of production. It would also give us greater control over quality, cost, delivery and sustainability. CFMP employees, including the team of expert craftsmen who has worked closely with us for more than a decade will transfer to Burberry upon the completion of the transaction later this year. This is a significant milestone for us and will create a strong foundation for our leather goods strategy. We have also started to evolve the way we communicate with our customers and I'm now going to show you a quick video that brings to life the changes we have made so far. [Audio/Video Presentation] As you can see we have had some exciting new collaborations across creative product and experiences this year and evolved our voice across social channels and on burberry.com. Of course with the new designer now on board, this is a major area of focus and we will reenergize our creative and visual language in line with this vision. Moving to how our customers experience the brand physically, there are two key elements, the shape and quality of our network and the service within each of our stores. Both of these elements are important and take time. While the evolution of our overall network is a multiyear project on service, we can and have already started making changes. I’ve asked Gianluca Flore President of our Americas region to lead the work on service and retail excellence globally. And we’ve now prioritized a number of immediate measures including introducing a global retail leaders program, testing a new digital client telling tool with improved functionality across client service, product information and after sales, enrolling out merchant led product training across our network. We are also piloting a new approach to how we interact with customers. Touching everything from how they are greeted when they walk through the door to their experience after purchasing. While I was travelling in Asia last month, I spent time with our team in our carrier center store in Shanghai, one of the locations where we are piloting this new approach. And it was great to hear our how excited the teams were about our new ways of working and to see how they changes are making a real difference to our customer. Clearly, we're just at the early stages of business formation, but partly due to this opportunity in retail excellence as Julie mentioned earlier, our retail metrics for the year have shown some promising signs. Mainline conversion improved, we saw significant business from appointments with higher conversion and ATV in these sessions. We were also pleased to see increasing spend from our top-tier clients Turning to the shape of our distribution, we are well on track with the first stages of our plan focusing on three areas. In main line, we are refining our portfolio in line with the strategy. Closing a number of smaller stores in non strategic locations and investing in stores in high visibility influential fashion markets. One example of this is our new Middle East flagship store which will open next month Dubai and over the coming months you will start to see more changes to the look and feel of our stores. In wholesale, we launched a number of successful partnerships with image driving wholesalers such as Dover Street market where this image was taken. In the U.S., we continue to have good conversations with our wholesale partners was supportive of our strategy and are progressing well on evolving our distribution. The impact of our wholesale transformation will begin to be visible later on this year. And turning to our outlets, we have confirmed the closure of a net six outlets including three in the Americas in line with our plans. As you know digital innovation is always at the forefront of our plan to Burberry. We recently launched our collaboration with Farfetch around the February show with our global inventory now available through the platform, expanding our distribution to more than 150 counters and extending our reach. And results so far have been well ahead of target. We're also working with Farfetch to identify the next wave of technological advance for the industry, as the first brand to partner on the new dream assembly program. Before we turn to questions, I wanted to end with the few points about our people. With new leadership in place, we have taken the opportunity to simplify our governments and clarify accountabilities across all commercial and creative functions. As part of this work, we have created the new role of Chief Commercial Officer responsible for all our regions and reporting to me. I'm delighted to have welcomed Gavin Haig into this role. His wealth of experience in luxury retail is a major asset as we drive forward the strategy, particularly in the transformation of our distribution. Over the last year we’ve also continued to strength our wider leadership population. We’ve filled a number of very senior positions across the business with internal candidates and enhanced the group by bringing in external expertise and fresh thinking. In total around 40% of our Vice President and above population is new to role in the last 12 months. It is a great testament to the talent and commitment of our people that we’ve accomplished so much during this period of change. I am continually humbled and inspired by the passion, energy, and dedication to the brand that our people at here at Burberry. So, to summarize over the last six months we have focused on strengthening our foundations to deliver the strategy. And we’ve seen some promising early signs. Our progress so far gives me confidence that we’re building the right platform for our full brand transformation and we remain on track with our financial expectations. There’s a lot to do and we’re far from complete but we’re all very excited and energized for what is ahead. And now, I’d be pleased to take your questions.

[Indiscernible] pricing side, whether you plan to be increasing prices and according to what format, importantly if you could tell us what you plan to do on pricing in leather goods and where you continue to see Burberry as a price follower in that area?

So, starting from the distribution side, clearly we have laid out in our strategy, an elevation strategy of distribution per area, per region. There’re some regions where obviously there’s more work to do. We called out America, where particularly on wholesale we have consolidation that we are in the process of working on with our partners. Good thing is that the partners they really see what we are doing and where were going and they are really, really, really keen to partner with us. So I think that we have had very good conversations from the beginning with them will lay now detailed plans, and so I'm really confident that that will be actually will become an asset for us very soon. In terms of America and in terms of retail, there is always like in every other country I would say, there is an update into do in certain areas but overall I would say that the quality of our retail presence in the market in terms of our stores, our physical stores in the market is very strong. We have obviously the look and feel of the store that is going to be an important part of the elevation of the brand, but in terms of the physical stores I think we're quite satisfied there. In Europe, it's slightly different situation where again in terms of retail network, I think we have a strong rate of network. There are obviously some opportunities to improvement that we always try to capture, but in general is good and we don't have the same issues that we have in America with wholesale distribution. And in Asia, we've spoken last time about Japan, clearly Japan is a little bit behind for the history that we have there but we’re catching up very quickly there. I think we’re very pleased with the plans that we have ahead and the discussions with department stores, similar to the discussion in America and about expanding and increasing our presence there. And again in terms of retail in Japan, we have a good network. In China, we have done and we’re doing a number of operations to improve our presence in certain malls or in certain areas where we have opportunities. So from that point of view, I think is going to be -- from the retail side is going to be about upgrading where there is opportunity and refreshing clearly the look of the stores. In terms of product and pricing, I think we explained that this strategy also sees the completion of the movement from three labels to one label, which clearly in terms of product will have some effect in terms all over certain categories where prices will be more précised and within a smaller band then before. In terms of leather goods which is an important point for us, we have the opportunity to strengthen our offer in the top of the range, which is the range where we play with our belt bag, which is the first example of that strategy and they are clearly the purchase of our leather goods partner there creating the center of excellence, creating the brain from where the whole strategy and development and creation of our leather goods will happen it is going to be very important for us.

Helen Brand from UBS and couple of question for me. Firstly, you talked about the new product drops in May and June time. Outside of the leather goods, what do you think the key product categories that you will be focusing on for reinvigoration might be? Secondly, maybe one for you Julie and the H2 growth margin and that's quite week and down almost 200 bps for my back the envelop calculation. And we are just wondering, if you can talk through the drivers behind that H2 gross margin, and particularly talk to the inventory provisions that you've taken within that as well?

So, I'll start with the categories and the product drops. As we've said this is our strategy of going to market is going to be about frequent deliveries and frequent deliveries and product groups clearly are going to cover all of the categories that we consider fundamental for us. We have already started actually even before May and June, which is the delivery of our fall collections that delivers over three to four drops we have had the refresh of our heritage trench coat program which is very, very important for us and which started in April. We will have Gosha that the second capsule of Gosha that we will also deliver in the beginning of July. So, these project of continuing with frequent deliveries is something that is really, really important for our strategy, and we will continue across category. Handbags as we said, we're building an architecture of handbags and around their, there will be continuous involvement of product, new products, animation and updating of existing products in the offer.

Okay so, on the gross margin. Obviously, for the full year on our like-for-like basis, constant exchange rate here is the gross margins have improved, and it's the exchange effect that's pulling the gross margin down by 50 basis points for the full-year, and then you mentioned the second half specifically. And the second half has been impacted by inventory provision that we've taken. Clearly, we are going through a creative change at the moment in the transition from Christopher to Riccardo. And therefore, we've looked at the product line in particular and we've made some provisions against the stock levels that we anticipate being there are going forward. So that has really changed the gross margin or lower the gross margin in the second half, but in the like-for-like basis constant currency the margin for the full year is better.

It's John Guy from MainFirst. If I could just maybe go into the recent acquisition, the leather manufacturing acquisition that you've made, and if I think about total internal manufacturing I think is probably low double digit here at the moment, so roughly around 10%. Are you planning to increase your level of in-house manufacturing as this first acquisition that you've made now and rather good the first of many? Is there going to be step change here? Or are you selectively targeting certain areas within the business. And secondly, one for you Julie just on OpEx, and it's down around 10%, 70 million or so. What was -- can you quantify the wholesale beauty related cost effective dropout and that we've seen in the second half of the year because that clearly put a big slug and I assume that's one off?

Let me answer first on the leather goods acquisition. The aim we have in our strategy is to develop those skills that are strategical to the achievement of the strategy. And in leather goods the skills of pattern making, prototyping, developing industrialization, coordination of production. Those are the key because they complement and they complete our creative skills in design and talented design. So having synergy across those two very important centers of excellence, is really what will deliver I think additional value. We don’t think in terms of controlling a certain percentage of production directly, okay. But we certainly think which are the strategic areas, where we need to be integrated with those skills that are essential; I remind that in Yorkshire we control all of the production of our trench coats and the weaving of the gabardine for the trench coats, so those we think are really critical skills for us.

So taking the other parts of your question, so we haven’t benefit this year in terms of the change in the Beauty business and the license to Coty, so clearly there was marketing spend going to previously on Beauty. So, we’d anticipate because we did the deal at the half year essentially, we’d anticipate some benefit from Beauty in the first half, but not as much as we received this year just because of the phasing of the spend, it tends to be more Christmas orientated. So, the biggest savings being in this year versus next, and even if you strip out Beauty you know basically our profits were still growing. So it’s been a contributed issue but not only contributed because the cost savings programs being also really important to us this year.

Elena Mariani from Morgan Stanley. Hi, just two questions from me, on the -- just coming back on the leather goods bags, so as you mentioned you’ve launched the -- in March and April the belts and the bucket. Can you just elaborate, if you’re happy with the reception of the sales so far? I know it’s really early days, and to what extent Riccardo Tisci going forward will be involved really the category himself into the design? And what you did at Marco [indiscernible] in terms of the bag category specifically? And my second question is on online, one of the most distributed brands or luxury brands in platforms in Europe and Asia, either you’re selling directly on [indiscernible] or Tmall or some resellers selling on these platforms? Is that an issue for you and do you think you’ve a good enough grip on your distribution online in these two regions, Europe and Asia?

In terms of the handbags and the launch of belt, early days are quite encouraging. I just stand by nature not to get over excited about this because I think you have to see the stamina over the long term of a handbag of that sort because it's a classic, it’s a pillar -- can become a pillar for us as a handbag. So I don't want judge it on a very short period of time. But the beginning is encouraging and is very encouraging because it’s been bought by top gear clients, existing client as well as new clients, it’s been bought across the region, so early signs are fairly good. Riccardo is going to play the part in the accessories and important about accessories. He has already started walking a lot with our Sabrina, our Head of Design in the accessory area. They work very well together and they have actually too many plans and too many ideas that will make somehow to train in order to get to market with all of those. So I think form that I think we are very excited and I think that we have obviously a huge opportunity in that area. Riccardo is somebody that they demonstrated already his capacity, not only handbags but in other accessory small accessories, custom jewelry, shoes very important category, not today but can be called in our mind a very important category going forward. The second part of your question about digital, I think the important thing is not the number of partnership you have is the quality of the partnership you have and I think we have frankly, I think probably some of the best partnerships in the industry, because we have been early adaptors, early supports of the big important platforms, and we are perhaps a little bit ahead of the rest of the in terms of the quality also of the partnership. The far-fetched agreement is an example of that when there is innovation. When there is a possibility to make it quantitative control for all. We always try to be first to do it without partner. So its actually a great leverage for us and were very, very proud and very happy to continue there.

Thomas Chauvet from Citi. I have two questions, one on outlets and one on cost. And Marco on outlet as you aiming to elevate the brands, you indicated you would close some outlets, you close seven I think. Last year if I understand correctly, there will be six closers in the current fiscal year. Can you first thing indicate whether this channel has been quite profitable for you over the last year or two? It is case for some of your peers and they are growing very fast in this channel. And would you be able to share given this is probably going to come down from here the weight of retail sales generated in athletes for the fiscal 18? And secondly maybe question for Julie on cost in the past you said that Burberry would have a typical underlying constant FX, inflation of 5% but that overtime you would aim to bring it down to 3 or 4. When you look at the wages and rents for two key items in your cost base and the evolution in the next couple of years, what kind of underlying inflation you’re expecting in the transition period of FY 19 and 20.

So on outlets, first of all we don't disclose the percentage of sales of outlets and we’re not going to disclose and going forward, but I think I laid out in the strategy the importance that the outlet activity has for us. So I made very clear that we’re going to continue to use this network of stores to exit the inventory that will remain at the end of every season. So is a physiological need to have these outlets and they are various far from that point of view. What we are doing, the net closures which are six I believe this year net, they correspond to the rationalization of the network. There are some areas and some outlet centers that are not important or interesting for us anymore and we close that in the same way that I described in the mainline were really focusing on what matters and trying not to disburse our energy into smaller, lower activities that of retail whether it's outlet or mainline. So this is really where you will see and you will see continuing but it's not going to mean that there it will be a major shift in the outlet strategy but certainly there will be some adjustments there.

And the third thing is we've merged all the cost in the business and in terms of characterizing what they have they should be have when sales are moving so for marketing all the way to toward the admin cost and we've fully not done and that revenue accountable structure that we've got in the business. And in terms of inflation on the cost base, there is two major areas where we see inflation comes during the cost base, one is the manpower cost and clearly we've got our largest region is Asia. So there is pressure, upward pressure on the manpower cost to inflation, and also the least cost base relation to our stores. So we take overall into consideration and we would expect to see a growth rate and on back to around 4% to 5% and including investments that are probably being at that higher end of that range without some of the investments we're making it would be around to 4% range.

Melanie Flouquet from JP Morgan. So I have three questions, very quick. The first one is regarding the transition period. I was wondering whether you could share with us a bit of your -- how you are going to manage it because there are last collection of Christopher Bailey seems to have add great resonance to its call, traditional and casino based, and even longer customers as you said. So do you contain the inventories to make sure that people embrace the new collection and the new designer? How do you manage this transition with the pretty successful collection just on? And also linked to that -- sorry, will you have capital collection already marked by Tisci before the May to June and dropped and in 2019? That's my first question. The second question I'm a bit -- I am bit surprised because and maybe this is a stupid question, but usually we have a lot of people from the management team present today. And today, we have only the two of you and Charlotte today. So I was wondering, is this a sign of a change all the way you are going to communicate? Is this a sign of a change of a more centralized management, so whether you could share with us because usually we have the crowd of people around? And my next question is on inventories, it’s really a quick one promise. Just whether the inventory provision, how sizeable is it was your gross margin actually excluding this underlying image too?

In terms of the transition and in terms of the February collection, I think we are actually fully embracing the February collection, which was a very strong connection and we have as you know, we have launched and we discussed it before, capsule. A capsule readily available the day of the show and that has performed extremely well and we're going to be delivering the rest of the collection across the normal delivery time, which is from mid July -- from July until the end of September. So we’re going to carry through with our normal course of delivery and collections. Riccardo’s first collection is going to be a runway that you will see in September and the runway starts delivering in February of next year. So, when I refer to May or June I mean that by May or June we’ll also start delivering fall which will have been designed by Riccardo, and at that point we’ll start to have a more complete -- often not 100% complete, but the much broader offer of products that we’ll have been designed by the new creative team. In terms of the management being here, I think there’s no message, I think there’re a few scattered members of the team here and it doesn’t mean that we’re going to be more centralized at all, I think we’ve collectively I think the team is doing a fantastic job, I am really prod as I said of what they’ve accomplished this year, so -- and I'm -- and we’re totally transparent as you know with the -- our team and the members, Gavin would have been here but he is always in Asia, and he is working and he’s been traveling, so no, nothing, no message to pick up there.

No, he's just working. So, going back to the point of the inventory, so if you -- when you look at our accounts you’ll think that the inventory provision level have risen and so we normally operate on the basis of 15% provision and it’s increased to an 18% provision. So there’s an element of inventory charges and which is really linked with the creative transition, when we’re looking at the stocking level. And so we’ve got of an extra charge of 14 million in the accounts related to that this year. And I think as Marco said, we will obviously do the buys when we do open to buys, we’ll do even tightly and we’ll manage the inventory as we go through the year and the transition from Christopher’s collection to Riccardo’s in very pragmatic way, and that’s all being built into the guidance that we’ve given for the year. So we’ll manage this very pragmatically as we go through.

Rogerio Fujimori, RBC Capital Markets. May I ask the question about the millennial segment or the under clientele. How do you see the brand performer performing this younger age group and ideally how much accounts of total global sales have been perhaps particularly in Asia and is it changing? And my second question is on handbags, how it's performed in the second half and within accessories, is it still about half of your total accessory business?

Sorry, the last part of your question was?

Handbag, handbag.

Performing the second half for Q4 and is it still about half of your total accessory business?

Accessory, handbag and you take in a moment.

Sure and in terms of millennial clearly, millennial is the age of our customers is one way to analyze and to plan how we and what we market to our customers. It is away and it’s an important analysis but in our business not the only one in fact that under of element even within the category that define how they approach a brand or a product. So we’re really time to look at a broader set of values of attitudes of even all data about our customers. So clearly millennial is one of the elements, we’re not breaking down number about the composition of our customer’s base. We’ve seen as we said for example in the February capsule we’ve seen an increase from a younger clientele in general. But at the same time we’re very pleased because we also saw an increase from our existing and from our top gear clients. So as I said I think they are important but I think there is a broader set of values that we want to look at in terms of that metrics.

In terms of our accessories business it's now about 40% of the total business. Handbags as a percentage of our total group are around 20%, just sharp 20%. So bags overall are about half of our accessories business in total. What we said last year is the small leather goods was driving the accessories very well but leather components very well and some of the recent launches we made like the belts as anything launched in March 1,5 and now we got more sizes rolling out in April. The smallest size is tend to be more popular with the Asian clientele are coming out right now. So we’re seeing good inflection with the belts its only there for put inflection with that one.

And I want to make a comment on that, this is building a strong architecture, a strong collection of handbags is a process. Okay while we have one good performing it doesn’t mean that we have completed our work. I think we’re so ambitious in this category that I think is going to be an ongoing process across new styles across existing styles as I said before about different silhouettes and uses that the customers today are looking at in the collection. So really there is a lot, a lot, a lot of work up there and you will progress that we’re building into an offer that I think will look significantly over the next six to 12 months.

Zuzanna Pusz from Berenberg. I will give you a break on handbags and I will ask two questions. One on Farfetch and the other one actually follow up from Melanie's question. So first of on Farfetch, do you plan any additional collaboration with Farfetch beyond what you announced so far, I mean different peers of yours have very regularly within different capacities, whether it's a 90 minute delivery in major cities or Chanel have recently launched more work on the retail experience. So I would be just curious to know if you on a bit more with them or do you plan to focus any additional digital initiatives and the futures plan to do? And the second question is the clarification with one so am I right to understand that the capital collection available straight after the fashion show in September will be the one that is designed by Riccardo Tisci. Because I understand there is a lead time involve so given that he just joined in March. I just wanted to make sure that capsule collection launch in September would be really his, will be designed by Riccardo Tisci?

Releasing in September, is that the question? Okay. So, in terms of Farfetch, but clearly I think we enjoying some partnership with them. So but we have other initiatives coming for sure. Definitely we are they are a great partner of our they are not the only partner but they are a great partner with us and we always look for new initiatives and new ideas that can enhance the clients, with us online so would certainly continue to work with them on different things. I think was then to pretty measure things with them just now including this new dream assembly type of accelerator that I think is going to be quite interesting. In terms of the Ricardo runway show I don’t think you really expect me to diverse everything about what we are going to do in September. So there is there are a lot of ideas around September there is a billed up to that we have big plans but I think it's a little too early now to these doors are open.