GCC SAB de CV

BMV:GCC

Earnings Call Transcript 2021-Q1

[Operator]

Good morning, and welcome to GCC's First Quarter Earnings Call for 2021. Before we begin, I would like to remind you that this call is being recorded [Operator Instructions]. Please also note a slide presentation will accompany GCC's earnings results webcast. The link is available on the company's website at gcc.com within the Investor Relations section. There will be an opportunity for you to ask questions at the end of today's presentation. I will now turn the call over to Ricardo Martinez, Head of Investor Relations. Ricardo?

[Ricardo Martínez, executive]

Thank you, operator. Good morning, everyone, and thank you for joining our earnings call. With me on today's call are Enrique Escalante, our Chief Executive Officer; and Luis Carlos Arias, GCC's Chief Financial Officer.

As a reminder, before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. You can find more information about risks, uncertainties and other factors that could affect our operating results in our most recent filings with the Mexican Stock Exchange. It is important to note that these statements include expectations and assumptions related to the impact of the COVID-19 pandemic.

As seen on Slide 2, our forward-looking statements provides information on risk factors, including COVID-19 that could affect our financial results. In particular, there is significant uncertainty about declaration and contemplated impact of the pandemic. This means GCC's results could change at any time and the impact of COVID-19 on the company's business results and outlook is our best estimate based on information available as of today.

Let me now turn the call over to Enrique.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Ricardo, and good morning, everyone. Let me open today's call by emphasizing that GCC had another favorable quarter, highlighting the fact that our backlog and the overall market trends are encouraging in both countries. It is reassuring to see the economy emerging from tough and uncertain times into brighter months ahead.

GCC's results reflect a positive momentum in our industry and show early signs that we are entering into a new phase of the industry cycle with the stronger demand for most of our products. At GCC, we always refer -- we always prefer to have a positive objective and future-oriented perspective. Therefore, we are turning the page from COVID-19 related challenges to focus our efforts in producing and supplying the pent-up demand that lies ahead.

We will neither drop our guard in our health and safety protocols, nor leave behind all the lessons learned during the hardest times of the pandemic. We gained a great amount of knowledge financially, operationally and with our teammates. We learned that no matter how well GCC is running, there is always room for improvement, for innovation and to continue to adapt.

You never know how strong a company is until you are truly tested. GCC is stepping into the 2021 construction season even stronger.

Let me now briefly discuss our key highlights from our performance this quarter as well as market conditions. Luis Carlos will follow with GCC's results and financial position. He will then turn the call back to me for comments regarding full year guidance and closing remarks. Finally, we will take your questions.

Turning to Slide 4. Given the seasonality of our business, GCC's first quarter volumes are not a strong indicator of the company's full year shipments. Historically, first quarter volumes represent less than 20% of the total. If we compare the last 2 years, cement and ready-mix first quarter volumes against third quarter volumes, there is a 1:3 ratio. Yet our full year backlog remains encouraging in every sector where we operate.

It's important to mention that during the first quarter 2020, COVID economic effects were not present yet and shipments were strong. Nonetheless, we are very pleased with the results delivered during this first quarter in which we increased EBITDA, free cash flow and EBITDA margins.

Consolidated sales were only impacted by tough comps in oil well cement volumes, although overall performance and market conditions were much better than we originally expected.

Turning to Slide 5 to comment on U.S. operations and market trends. We experienced challenging weather conditions in the markets where we participate, coupled with gas and electricity outages in Texas. Nevertheless, construction cement volumes increased 6%, while total cement volumes declined 8% due to the oil well cement comparison. We are bidding new projects and shipping at a strong levels across GCC markets presence. Several U.S. competitors suffer from cement charges, coupled with some market gains above expectations. So we are taking advantage of our spare capacity to supplement this increased demand.

Therefore, we will fire up all of Chihuahua cement plant kilns to produce and export construction and oil well cement. We are able to supply the additional demand, thanks to our connected system of cement plants and terminals, one of our main competitive advantages. In response to the expected and stronger demand in the construction season, every kiln at GCC will be up and running to produce cement. This hasn't happened since about 15 years.

On Slide 6, regarding U.S. segments, I would like to comment. On infrastructure first, projects are running at a steady pace and several more are in the pipeline. Considering recent news, this market has an upside in the short and midterm. In respect to the latest economic stimulus package, we welcome the federal government's efforts to support the U.S. recovery.

Currently, we have a limited information on the specifics of the infrastructure build for roads and bridges. But from what is known, it might allocate an incremental funding of 30% to 50% over past at levels. In our opinion, this could extend the cement cycle and have a significant impact in cement consumption in the coming years.

By our estimates, an infra bill increased and natural cement demand would take at least 12 to 18 months after the proposal is fully approved. Besides the additional and steady funding that this bill could generate, the construction industry would benefit indirectly. This could be by reducing uncertainty while injecting money where it's needed, supporting customers' confidence by distributing unemployment checks, and finally by boosting infrastructure spending with aid to state and local governments.

On the residential side, the pandemic has resulted in a home buying search with the rate for residences with more home office space and yards. A limited housing supply, favorable demographics, and low interest rates are supporting positive trends. Recent research shows that the annual housing supply and demand balance -- imbalance will not be rectified before 2022. Given the Fed's comments to keep interest rates low for an extended period, the residential outlook remains strong in the midterm.

Nonresidential and commercial sector. As we have previously stated, this sector showed mixed demand against this quarter. There were projects which were favored by the pandemic, while orders were put on hold. On the positive side, the U.S. economic recovery and government stimulus funds will support this market as well.

For example, small business grants can protect against real estate vacancies. Other grants that are part of this stimulus package could unlock projects that were halted.

Moving to Slide 8 on oil well cement demand in the Permian Basin. In spite of an increase in oil prices, some of our competitors are exiting the West Texas market to relocate their production to supply the temporary shortage of construction cement in the Texas triangle. The aforementioned is a result of an equipment failure at a competitor cement plant as well as the effect of the deep freeze in mid-February. Therefore, we foresee an opportunity to increase market share in this segment, which will be captured by the Odessa and Chihuahua Cement plant. The price increase of USD 8 per short tonne came into effect in all of our markets starting in January, with a few markets sliding into April.

As a result, cement prices increased 3% against the first quarter of last year. We did not experience any significant pushback given the tight supply and the high plant utilization levels in the cement industry. We do not expect that this issue will be resolved in the short term. So the price environment and dynamics will remain favorable in the markets where we operate.

It is important to note this price increase only applies to current businesses committed volume to customers. Any additional volumes or any new customer agreements will be subject to different pricing depending on market conditions at the time. All in all, U.S. performance and backlog remains positive and encouraging. Projects are starting sooner, and we are seeing some customers request more cement. In the foreseeable future, our cement business looks promising across the board. For practical purposes, our system is sold out.

Turning to our Mexico operations on Slide 9. The state of Chihuahua continues a V-shaped recovery. Sales in Mexico division increased by almost 8% in the first quarter, mainly driven by continued demand from industrial warehouse construction, mining and self-construction projects as well as the reactivation of several public works projects in the city of Juarez.

2021 began with momentum and a strong demand for cement and ready mix. Once again, we leveraged our construed-led statewide retail store network to supply a solid demand for bag cement. At the same time, our strategically located ready-mix operations were able to better serve our customers against competitors.

Despite being impacted by the decreased event in February as well, cement volumes rose 6% and ready-mix volumes increased 8% in the quarter. Economic fundamentals in the state of Chihuahua are primarily driven by private investment. Growth is strongly tied to the U.S. economy and its recovery, as well as the state of Chihuahua has become an important part of the manufacturing supply chain.

We are satisfied with the results achieved in this region in terms of both volume and prices. The market trends remain positive. Let me now turn the call over to Luis Carlos to discuss the quarter's financial results, then I will return for comments regarding our full year guidance and closing remarks.

[Luis Carlos Arias Laso, executive]

Thank you, Enrique, and good morning, everyone. Turning to Slide 11. As noted in our quarterly financial statements released yesterday for the first quarter, consolidated net sales decreased by 2%. During Q1, we saw a sharp increase in construction cement volumes in both countries and ready-mix in Mexico. These gains were offset by a hard comparison in oil well cement and a decline of 33% in U.S. ready mix volumes, which translates to only 7,000 cubic meters less.

On Slide 12, cost of sales as a percentage of revenues decreased 2.2 points to 74.4% in the quarter, mainly reflecting favorable production expenses and better prices in both countries as well as the continuation of the cost and expense reduction plan. SG&A expenses as a percentage of sales decreased 0.7 percentage points in the quarter to 11.3%. This was mainly due to the continuation of the cost and expense reduction plan as well.

As a result, as we illustrate on Slide 13, EBITDA increased 9% in the quarter, while the EBITDA margin was 27.7%. This is an increase of 2.7 percentage points. We are highly focused on continuing to increase profitability on a yearly basis. This year will be challenging because our results will have to compensate for $14 million of cost and expenses that were saved last year. As a reminder, in 2020, we deployed and successfully executed a comprehensive plan to reduce cost and expenses, which totaled $24 million. This year, we expect to maintain $10 million in savings as we believe we found the sweet spot between short and long-term profitability without compromise to our operations, employee safety or taking unnecessary risks.

Turning to Slide 14. Net financial expenses totaled $5 million due to a positive foreign exchange effect on GCC's cash position during the first quarter in 2020, partially offset by lower debt balance and lower interest rates on the variable portion of GCC's debt. As a result, earnings per share and consolidated net income decreased 7% to $15 million so far in 2021.

Moving to our cash generation on Slide 15. Free cash flow was $18 million in the first quarter 2021 compared to $11 million in 2020. This translates into a free cash flow conversion rate of around 36% in the first quarter. This was mainly driven by increased EBITDA generation after operating leases, decreased working capital requirements and maintenance CapEx, as well as lower cash taxes and interest expenses.

I would like to point out GCC's improvement in controlling payables, receivables and inventories. Based on the last 12 months of sales as of year-end, we reduced days in net working capital from 59 to 47, a total reduction of 12 days.

Turning to our balance sheet. We ended the quarter with $557 million in cash and equivalents. Our net debt-to-EBITDA ratio dropped to 0.2x at the end of March. Thus, we continue to be in an advantageous and solid financial position, having one of the healthiest balance sheets in our industry.

The rating agencies are recognizing our operating performance and solid financial results by raising our credit rating to BBB- with a stable outlook. I am pleased to highlight that GCC has reached investment-grade rating for the first time in its history. The rating upgrade came from both agencies, Fitch and S&P.

With that, I will now hand the call back to Enrique to discuss the guidance for the year ahead and to share with us his closing remarks.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Luis Carlos. Turning to Slide 17. Consistent with what we have said, we have a professional team fully dedicated and actively looking for growth opportunities, both organic and inorganic, the latter mainly focused on cement plants that could be plugged into our system while increasing presence in existing markets and/or expanding to adjacent markets where synergies can be generated.

On this matter, I want to reiterate that we will maintain our prudent capital allocation strategy, growing in an orderly manner. We are focused on generating value while we invest strategically in our business.

As stated before, if we do not find an appropriate asset that fits into our strict criteria, we will pay down debt to save on interest expenses. I would like to take this opportunity to discuss our guidance for this year. We are expecting the positive momentum to continue as the underlying trends of GCC's business remain very solid, coupled by the temporary market supply shortage already discussed. Fortunately, our short-term visibility has improved substantially.

While confirmed and projected COVID diseases are declining, U.S. government stimulus measures are boosting the economic recovery and the vaccine rollouts have been a game changer in the U.S. Therefore, in the U.S., we expect GCC's cement volumes to increase 2% to 4% year-over-year.

In the ready mix business, some remarkable projects that concluded last year led us to record volumes and created a high base comparison. Thus, we expect volumes to decline between 10% to 13%. We are returning basically to historical levels, while its base business remains very stable.

In terms of prices, in light of the announcement we have already made, we anticipate a price increase in the 4% to 5% range in cement and ready mix. In Mexico, we expect market dynamics to remain solid in the Chihuahua region, fueled by the strong correlation with the U.S. economy and its recovery. For 2021, we expect GCC cement volumes to increase 2% to 4% and ready mix volumes 3% to 5%, with price increases in the 2% to 3% range for cement and ready mix.

Regarding profitability, we expect 2021 EBITDA to increase between 4% to 9% year-over-year. We approximate our capital expenditures at $75 million, with $60 million allocated to maintenance expenses and $15 million from last year which were carried over to the current year. As a result, free cash flow conversion rate is going to reach above 60% and a net debt-to-EBITDA ratio would be negative.

As a last comment, our official corporate name has changed from Grupo Cementos de Chihuahua to GCC. This new name unifies our brand in multiple countries, mirrors the stock ticker and reflects how the market best refers to us. It is cohesive with our recently renewed 2025 vision: To be the best cement company in North America with the proper balance of people, profit and deployment. The best is yet to come, and GCC is prepared for it.

With that, this concludes our prepared remarks. Let's now turn to your questions. Operator, please go ahead.

[Operator]

[Operator Instructions] Our first questions come from the line of Adrian Huerta of JPMorgan.

[Adrian Huerta, analyst]

First of all, if we look at the implied EBITDA margin from the guidance that you have on volumes and prices, it seems like you're calling for margins to be flat, and we saw margins already up almost 3 percentage points in the first quarter. So if you can just give us more color on what you see on margins?

And then the second question is just on working capital. We saw large improvement last year. How sustainable are those? And in the conversion rate of free cash flow of more than 60%, are you expecting an investment in working capital or working capital investments to go down a little bit?

[Hector Enrique Escalante Ochoa, executive]

Thank you, Adrian, for your question, and we'll refer to Luis Carlos for the answer.

[Luis Carlos Arias Laso, executive]

Adrian, yes, on the EBITDA margin, as you recall, last year, we had $25 million of savings on cost and expenses in Slide 7 on my remarks. Well $10 million is being replicated for those -- for this year. So we'll have to absorb $14 million of cost of those reductions that are not going to be duplicated this year. So that's the main reason.

In your second question, what we have done in terms of working capital optimization, we truly believe that is sustainable for the long run. If you see our balance sheet, we are managing much better in the side of the payables. That's the main explanation on the optimization. And we are controlling very well the accounts receivable in both U.S. and Mexico.

And on your -- you asked for a third question, Adrian? Or just those two.

[Operator]

Our next questions come from the line of Nikolaj Lippmann with Morgan Stanley.

[Nikolaj Lippmann, analyst]

A couple of questions. So 2021 looks like you're going to have very different trends, between strong housing, weak commercial. Can you address a little bit how you're seeing the infrastructure market in the different states or operating areas where you are operating in the U.S. in particular? And also if you are seeing what kind of pricing trends you are seeing in these different operating areas in your pricing -- official pricing increases, those kind of things. So that's sort of the first or second question, if you will.

And then finally, if you can provide more insight into the oil well cement, the West Texan plant, how should we think about the recovery? Is this -- and what is happening there in terms of pricing?

[Hector Enrique Escalante Ochoa, executive]

Nikolaj, this is Enrique. Thank you very much for your questions. If I understood, I mean, your first question correct, in terms of market segments in the U.S. I think that we're seeing, I mean, basically in all of our regions, I mean, good projects, I mean, across segments.

Housing remains, I mean, very strong in every market where we're participating. As we mentioned, yes, the commercial side, it's probably a little bit weaker in the Central New Mexico area because last year, there were, I mean, several large projects there that are not repeating.

We're also seeing on the ready-mix side in the Dakotas and Iowa, a little bit less of windmill projects. However, I can say that there are still some more in the pipeline in the bidding process. But those 2 segments may probably feel a little bit less of a decrease. That is definitely being compensated by more infrastructure in projects. That remains, I mean, very strong and still are bidding in several of our regions.

In terms of pricing, as I said, the price has been very well accepted mostly in every market. There's a little bit more of a pushback at the origin of the -- at the beginning of the year in the River region, where we access with our Rapid City cement plant into the Minnesota market. But I think that has also -- now that the market has been more conscious that cement may be in short supply is getting more and more traction.

So we don't see any additional pushback. On the other hand, I think that if the situation continues to be as strong as we're seeing, there may be even an opportunity for a second price increase in specific markets. But that's still, I mean, a little bit early in the year.

In terms of oil well cement, we're being benefited by both, I mean, the recovery of the industry in the Permian Basin. As we have been saying, it's not going to be a very fast recovery. But it's indeed increasing faster than what we expected at the end of last year. And when you combine that with the fact that 2 cement competitors that we're shipping oil well cement to the area announced that they are -- I mean, taking back those shipments to Central Texas and North Central Texas, well, that's giving us a better opportunity to -- I mean, basically to have a sold-out plant in Odessa.

And if you remember, the plant was running with just 1 kiln, basically all last year. Now the plant is running with 2 kilns, and it's been going to be supplemented by kiln #2 in Chihuahua that is firing up now on May 1. So a very, very different, I mean, outlook for us compared to last year, which, as you know, was the segment which suffered the most during the pandemic and the oil well cement crisis.

[Operator]

[Operator Instructions] Our next questions come from the line of Alberto Valerio with UBS.

[Alberto Valerio, analyst]

Two quick ones on my side, a follow-up of Adrian's questions. On guidance, you mentioned in your presentation that the first quarter is below the 20% of consolidated results for the year. And what we had here is the past 5 years, the first quarter was close to 14% of the consolidated results on EBITDA line.

So my question is, are you guys conservative on the guidance? Or are you expecting some deceleration during the year? And my second one is about the M&A aspect. We know that there is 2 public assets for sales, one from Heidelberg in California and another one from LafargeHolcim in Brazil. I suspect that Brazil is not very interesting to you guys, but I would like to hear your thoughts about the California assets and progress for the results.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Alberto. Thank you for the questions, Alberto. I mean, Luis Carlos is going to take question number one, and then I will comment on the M&A question.

[Luis Carlos Arias Laso, executive]

Thank you, Alberto. We feel very comfortable with the guidance that we issued. And yet, we had a very strong 1Q with a very good increase in EBITDA margin. Nevertheless, it's going to be a long year. And even though we have, as Enrique explained, we have a very good backlog, we feel very comfortable again on the cost and expense side. There's still 9 more months of the year. So we feel comfortable with the guidance that we issued.

[Hector Enrique Escalante Ochoa, executive]

On the M&A question, Alberto, even though growth, as we had mentioned, it's our top 1 priority. We don't find the California assets on the market as an attractive proposition for GCC. We think they are -- I mean, basically, detached from our current -- I mean, network. And our strategy calls for -- I mean, trying to find assets that can create synergies by the connectivity on our network. So those assets in California are not attractive from that perspective. So we have to pass on this opportunity.

[Operator]

Our next questions come from the line of Froylan Mendez with JPMorgan.

[Fernando Froylan Mendez Solther, analyst]

Congrats on the strong results. Enrique, could you just break down on your guidance for the U.S. on volumes. How much is embedded from growth in oil well and how much is from construction cement?

And secondly, we have seen a strong decline year-on-year in ready mix volumes. In the past 2 quarters, you did have an asset show up in the 3Q in the third quarter of last year. Was there supposed to be an impact on the size of your ready-mix operations given that asset swap?

[Hector Enrique Escalante Ochoa, executive]

Thank you, Froylan. I will take the second question first, and then we'll see if Carlos has those percentage growth for those sectors of oil well and construction separated, I'm not sure we have done that.

But let me comment on the ready-mix side first. We had a very, very strong year in ready mix in the U.S. last year. Actually, it was a record year and basically fueled by very specific projects in the Dakotas and Iowa and Minnesota, of course, I mean, I have mentioned several times, several projects. I think 5 simultaneous, I mean projects of wind mill, I mean farms, which has -- even though we have a lot of experience in that segment, in that area, we never saw so much activity. So we don't think that's going to be obviously sustainable to keep doing so many projects simultaneously.

So that's one of the main reasons why our ready-mix volumes are declining. The other one important one is in the El Paso, Las Cruces region, where we also had very significant projects, I mean, like the runway at the big field Air Force base that I have been commenting on, which was a massive -- I mean concrete project that, obviously, last year was, I mean, very active at this time of the year.

So those 2 segments are the ones that are making, I mean, the difference. And as I mentioned in the -- in my remarks, we're basically returning to normal levels for those markets. And so it is not like the market is suffering a big decrease, it's more a comparison with a very high base. The market seems robust and prices are also, I mean, recognizing that demand level.

The asset swap that we did with the Fort Smith the modern plants in Arkansas and Oklahoma, for the ones that we acquired in Iowa and South Dakota, don't have any implication on this volume decrease. On the contrary, we think that, I mean, we're going to be benefiting from that swap because of what we explained last year, which volumes are similar. And of course, now we are going to -- we have integrated those plants into our cement supply. So that's just, I mean, a plus for us. Luis Carlos, I don't know if you have any comments on the margins, on the markets.

[Luis Carlos Arias Laso, executive]

Yes, Enrique. Hi, Froylan. Well, on the breakdown on the increase in volumes in the U.S., yes, we have both increases in normal construction cement and oil well cement. And actually, oil well cement is increasing on a double digit basis. But yes, the growth comes from both construction and oil well.

[Operator]

[Operator Instructions] Our next questions from the line of Alejandro Azar with GBM.

[Alejandro Azar Wabi, analyst]

Enrique, Luis Carlos and Ricardo, I have 3 questions. The first one is just to clarify on the oil well cement. Right now, you have 3 kilns working, right? 2 in Odessa and 1 in Chihuahua. And also if you can comment more on the competitive landscape in Texas, as you previously were mentioning, is that in both types of cement, gray cement and in oil well cement?

And my second one is, if you can remind us what's the percentage around your whole U.S. operations that is yet to increase prices? I don't know if that happened in April or it's going to happen in May, if you can give us more color on that front also please.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Alejandro. On oil well cement first, yes, we have 3 kilns that are going to be supplying the Permian Basin. The 2 of the Odessa plant are already working, as I mentioned. The plant is working since several months with the 2 kilns. And the one in Chihuahua, kiln #2 is going to start producing oil well cement now on May 1. So that's the plan. So the rest of the year, we will have 3 kilns shipping oil well cement to the Permian Basin.

If necessary, if necessary, we could also produce oil well cement in the Tijeras plant, in Tijeras in Mexico. Although what we're seeing so far is that our plant may be also sold out for the year. So very, very promising view here.

In terms of the price increases, yes, some of the customers in some of the regions, I mean, the price increase was affected April 1 instead of January 1 like the majority of the cement. I don't have a breakdown here, Alejandro, in terms of what percentage of the customers or the volume. We will have to call you back with that information.

[Alejandro Azar Wabi, analyst]

Enrique just one, if I may, one more. On capital allocation, several years ago, 2 years ago, you mentioned about maybe expanding capacity in Chihuahua to provide U.S. with imports. With your current capacity utilization, do you think that announcement might be really close?

[Hector Enrique Escalante Ochoa, executive]

Good question because, as I mentioned also in my remarks today that we'll have a team -- a couple of teams working both on M&A and on internal growth and expansion projects.

Yes, we mentioned in the past, I mean, the possibility of building a new kiln in the Chihuahua plant. Now given that the majority of the growth in the coming years, we're seeing it in the North America -- in the U.S. market, we are also reconsidering -- and we also mentioned it before, I mean the possibility of expanding, I mean, and modernizing the capacity at the Odessa cement plant.

And since it's obviously part of our network, we could use that cement, not only on oil well market, but also in construction cement through our network. So the 2 projects are under a very strict scrutiny in terms of, I mean, what it creates, I mean better long-term value for the company.

And most likely, yes, by the end of this year, we should have a decision of where to expand definitely. Our priority, I must say, it's to find an M&A opportunity. But absent of that, I mean, it's very likely that we will proceed with an expansion.

[Alejandro Azar Wabi, analyst]

Excellent, Enrique. And now that you mentioned the Odessa back again, that new kiln, if it were to happen, it would have the same flexibility of the ones that we have today in terms of oil well cement and gray cement?

[Hector Enrique Escalante Ochoa, executive]

Exactly, Alejandro. That's what I meant by saying that it will be obviously used through the connectivity of the whole, I mean, network that we have where we can shift I mean construction cement from that new kiln into our adjacent markets.

[Alejandro Azar Wabi, analyst]

Great. Thank you, Enrique, and congrats on the results.

[Operator]

Thank you. There are no further questions at this time. I would like to turn the call back over to management for any closing comments.

[Ricardo Martínez, executive]

Once again, thank you to everyone for your interest in GCC and for joining us today. We appreciate your questions this morning and look forward to talking with you again in the months ahead. This concludes our conference call. But our team is, of course, available for any follow-up questions you may have. Goodbye and stay safe.

[Operator]

Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.