GCC SAB de CV

BMV:GCC

Earnings Call Transcript 2022-Q1

[Operator]

Good morning, and welcome to GCC's First Quarter Earnings Call for 2022. 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 also be an opportunity for you to ask questions at the end of today's presentation.

I would 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. We will begin today's discussion with remarks from Enrique Escalante, our Chief Executive Officer, followed by financial highlights from the quarter by Luis Carlos Arias, Chief Financial Officer. We will then close with your questions.

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.

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

Let me now turn the call over to Enrique.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Ricardo, and good morning, everyone. GCC is off to an excellent start this year with a good first quarter and encouraging market trends for 2022. Let me now briefly discuss our key highlights from our performance this quarter as well as market conditions and some of the challenges we faced. Luis Carlos will follow with GCC's financial results. He will then turn the call back to me for closing remarks and comments about full year guidance. Finally, we will take your questions.

Turning to Slide 3. Our first quarter results were above expectations despite the challenges faced at every turn, high inflation levels coupled with interest rate hikes, supply chains and labor charges, the continuing pandemic, and a war in Ukraine, along with significant economic sanctions against Russia. Those issues have serious implications throughout the industry and have highlighted GCC's competitive difference. The company's vertical integration of our raw materials and coal lowers cost and reduce fuel price volatility. Markets continue very strong. And although we faced some challenges, obstacles in the landscape, we are very pleased with the results delivered during the first quarter. I'm proud of the way we are overcoming these challenges. We're encouraged by our full year backlog.

Turning to Slide 4, to comment on U.S. operations. Overall performance and market conditions were better than expected in the first quarter. Total cement volumes increased 10%, while ready-mix volumes rose 16%. As a result, U.S. sales increased 21%. During the quarter, our operations team focused efforts on building up inventory. [Indiscernible] plants planned maintenance outages to ensure consistent production levels in preparation for a strong construction season. In response to this busy season, for a second year in a row, every kiln at GCC will be up and running to produce cement.

Regarding U.S. segments, I would like to briefly discuss the following: Infrastructure. Projects are running at a steady, but lower pace than older years as the states and DOTs are preparing for additional funding from the already approved U.S. Infrastructure Investment and Jobs Act. In response to the situation, we have been more selective in supplying these type of projects, switching shipments to more profitable segments. This market has, of course, an upside in the midterm as the infrastructure bill will extend the cement cycle through the life of the program. It is expected that additional demand will start increasing in late 2023.

Residential. According with the latest PCA forecast, the expected Fed interest rate increases will slow down the housing market with more emphasis next year. However, in GCC, we have not felt a negative impact as we continue with strong demand in this segment as housing buyers demand is still surpassing housing inventory.

Non-Residential and Commercial sector. Distribution centers, warehouses and e-commerce related projects are driving our sales in this segment. We are not seeing a decline in volumes as we saw in the last 2 years.

Finally, on oil well cement demand in the Permian Basin. Oil price increases, the strong drilling activity as well as the search of economic activity has boosted this segment. GCC's Odessa cement plant is running at full capacity with supplemental cement coming in from the Chihuahua plant.

Regarding U.S. pricing on Slide 7. On January 1, the 6% to 8% price increase came into effect across all of our construction cement markets, whereas oil well cement price increased $15 per tonne on April 1. To date, this spread increases have been well received by our customers. And as a result, cement prices rose 10% in the quarter. It is also important to note that based on cost inflation pressures and market conditions, we announced a second price increase of USD 8 per short ton in construction cement effective on July 1, 1 month earlier than last year's second price increase. We remain optimistic about market response for this second price increase.

In an effort to increase margins, we are offsetting incremental costs as we capitalize on market opportunities. In the current environment of very tight supply, most of our customers are significantly more concerned about ensuring uninterrupted supply. And GCC is uniquely positioned to guarantee product availability.

With an eye on improving EBITDA margin in a high inflation environment, one of our top priorities for the executive team in the short-term is to implement cost savings and higher efficiencies in fuel mix by accelerating the proportion of coal versus gas from our mine, increased usage of alternative fuels and very importantly, continues to optimize the distribution network to save on freight. Maintaining a high plant utilization will definitely improve our fixed cost absorption. All in all, U.S. performance and the backlog remains encouraging and in line with the full year guidance that we provided last quarter.

Turning to our Mexico operations on Slide 9, please. During the fourth quarter of last year, we announced a double-digit price increase in Mexico effective in January 2022, which motivated our customers to build up a significant inventory at year's end. Therefore, bagged cement volumes were affected this quarter, resulting in a decline of 5%, while ready-mix volumes rose 10%. High demand of our products remain favorable, mainly driven by continued activity from industrial warehouse construction, other commercial and housing projects and strong mining activity. We do not expect customers' high inventory level situations to continue for the remainder of the year.

Cement price increased 13% and ready-mix 7%. As a result Mexico sales increased 8%. I would like to point out that our 3 cement plants in the State of Chihuahua are running at full capacity. And given our strategic location close to the U.S. market, every cement tonne that is not sold in Mexico, it's been exported to the states, thus leveraging GCC's unique distribution network.

Let me now turn the call to Luis Carlos to discuss the quarter's financial results on our cement growth projects update. 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 increased 16%. During Q1, we saw a sharp increase in cement volumes in the U.S. and ready-mix in Mexico, along with a better price environment in both countries. These gains were partially offset only by cement volumes in Mexico related to distributors' high inventory levels that Enrique explained.

On Slide 12, cost of sales as a percentage of revenues decreased 0.7 percentage points to 73.9% in the quarter, mainly reflecting favorable selling prices and operating leverage in both divisions. Somewhat offset by unfavorable cost of production and sales mix as well as higher freight costs and a mix effect for higher supplementary oil well cement shipments from Chihuahua to the Odessa plant, given these sales have a lower margin than the rest of cement sales.

SG&A expenses as a percentage of sales decreased 0.4 percentage points in the quarter to 10.9%. I would like to highlight GCC's operating income, which rose 23% and our operating margin increased 0.9 percentage points. This shows that we are successfully offsetting the increase in costs. As a result, as we illustrate on Slide 13, EBITDA increased 10% in the quarter, while the EBITDA margin was 26.4%.

Turning to Slide 14. Net financial expenses totaled $14 million due to a onetime increase in financial expenses as a result of the prepayment of the 2024 notes and bank debt. As a result, earnings per share and consolidated income decreased 14% to $13 million so far in 2022.

Moving to our cash generation on Slide 15. Due to the seasonal nature of our business, free cash flow was negative $1 million in the first quarter of 2022 compared to $18 million in 2021. This was mainly driven by increased maintenance expense and CapEx. The interest expenses and temporary working capital requirements offset by higher EBITDA generation and lower cash taxes.

GCC's improvement in controlling payables, receivables and inventories continues to be remarkable. Based on the last 12 months of sales, we reduced days in net working capital from 49 to 41, an 8-day decrease in total.

Turning to our balance sheet. We ended the quarter with $640 million in cash and equivalents. Our net debt-to-EBITDA ratio remained in negative 0.4x at the end of March. Thus, we continue to be in a very solid financial position with leverage ratios significantly below the industry's average.

Turning to our organic growth projects on Slide 17. As we have previously said, estimated cement consumption in the coming years associated with the already approved infrastructure bill is sizable. We will take advantage of the time gap between the approval and the actual increase in the bank to prepare for what is expected to be a new phase of the industry cycle. We are investing around $500 million in the next 3 years to increase cement capacity to approximately 1.3 million metric tons, 20% above our current installed capacity. Our teams are working closely with technology and equipment developers to meet the deadlines of 200,000 metric tons by the first half of 2023 and 1.1 million metric tons by 2024.

Changing subjects, the Board of Directors has approved the recommendation to the Annual Shareholder Meeting to pay an annual dividend of MXN 1.1621 per share on May 17. This represents a 15% increase against last year's dividend. As a comment on GCC's share price, we believe that our stock price doesn't truly reflect our positive momentum and solid financial position and has been impacted by market volatility and uncertainty across the economy. While we don't manage GCC base on the share price in the short-term, in the long-term it is a measure of the progress we have made over the years. The stock price has increased around 300% since 2014.

Therefore, to support GCC's share price, we will reactivate our share buyback program and expect to make additional opportunistic share purchases in accordance with market conditions. This program reflects our confidence in the execution of our business plan and the positive outlook as well as increasing shareholder return. We are confident that eventually, the market will completely recognize GCC's fair valuation, aligned with our ROIC return, one of the highest in the industry.

With that, I will now hand the call to Enrique for his closing remarks.

[Hector Enrique Escalante Ochoa, executive]

Thank you, Luis Carlos. Turning to Slide 19, please. I would like to take this opportunity to reiterate the fact that for the rest of the year, our cement business looks promising across the board. For practical purposes, our system is sold out, and it is supported by a strong full year backlog. We stay vigilant for a possible soft learning or short-lived recession next year. However, it is early to know. But in any event, we believe the short-term remains very strong for GCC.

We, therefore, maintain our 2022 guidance provided in last quarter's conference call. Absent of an early winter resulting in a shorter than usual construction season, we should be on pace in the next months to deliver on our guidance. GCC's guidance is for low to mid-single-digit growth in cement and ready-mix volumes, whereas pricing will be mid to high single digits in both countries. On a consolidated basis, we expect EBITDA to increase between high single to double digits against last year's levels.

With that, this concludes our prepared remarks. Let us now turn to your questions. Operator, Please go ahead.

[Operator]

[Operator Instructions] Our first question comes from the line of Adrian Huerta with JPMorgan.

[Adrian Huerta, analyst]

Two questions from my side. One on blended cement. On the previous quarter, you mentioned that you were targeting for the plant in Rapid City to have around 11% of production in PLC cement by this year and by the end of the year and that you were doing some testing with customers for the Pueblo plant. Can you give us any updated targets on blended cement? And the second question is on electricity prices in Mexico. What were for you electricity prices on a year-on-year basis in the first quarter? And if you think that the prices could accelerate even further from what they were in this quarter?

[Hector Enrique Escalante Ochoa, executive]

On blended cement, the update, I think we commented that the Trident cement plant in Montana, it's 100% turning to blended cement, basically PLC cement this year. For Rapid City, we're starting with the market penetration on that plant and where in the budget, 100,000 tonnes for this year. We're looking optimistic that the market will probably accept more volume – a higher volume than what we budgeted for. Pueblo, we have a late start in the budget for this year because we were making some repairs in our silos to be able to I mean handle the 2 different products at the same time, the normal, I mean, Type 1, 2 construction cement and now with the PLC cement.

So we are running on time on that project we initially budgeted to start selling this product in November in this plant. Now we're thinking that the second semester, we're going to be ready to start earlier than we have said before. So it's looking very well. And the Tijeras plant, it's also selling blended cement based on pozzolanic, and it's also, I mean, moving forward with a project there, I mean, to increase our output of pozzolanic cement. And basically, the only plan that doesn't have any short-term plans yet it's the data cement plant because precisely the distinctive quality of the oil well cement that we're going to move a little bit slower there in tandem with their customers to make sure that any additions of limestone that are well received by the oil-treating companies. In terms of electricity…

[Adrian Huerta, analyst]

Enrique, if I may.

[Hector Enrique Escalante Ochoa, executive]

I have the number.

[Adrian Huerta, analyst]

Just very quickly, just on blended cement, just to make it clear. On the Pueblo one, you said you were planning on starting selling blended cement by November of this year, now second half of '23. Is that correct?

[Hector Enrique Escalante Ochoa, executive]

No, not, no, no. Now second half of this year, we're running ahead of budget in our plans to start selling blended cement there.

[Adrian Huerta, analyst]

On what percentage that plant?

[Hector Enrique Escalante Ochoa, executive]

I don't have a percentage at this moment because we're presently working on -- based on this silo adequation, again, how much we're going to be able, I mean, to ship in the second half of this year, but we can update you on that, I mean, in the following weeks. On the electricity numbers, I don't have at this moment in front of me, the specific increase virtue of one of the plants in Mexico, I can tell you that it has been below our expected numbers, but we will also be able to give you I mean the specific numbers in a follow-up call. In terms of expectations, of course, I mean, as gas prices continue to rise in the international market, we're expecting -- I mean that this would be a pass-through cost in terms of power mostly in every market. So that will depend on the behavior of course, of gas prices. And again, I mean, we don't have a specific number forecasted I mean since it will be, I mean, based on that gas price volatility at the moment.

[Operator]

Our next question comes from the line of Carlos Peyrelongue with Bank of America.

[Carlos Peyrelongue, analyst]

Two questions, if I may. First one on pricing. You mentioned that you have announced a price increase for cement -- for cement construction volumes in the U.S. of $8 per tonne. Should we expect also in Mexico and in Texas for cement a second price increase in the second half of the year? Is that still something that is in the cards considering cost pressures? And the second is related to volumes in Mexico. You reiterated your guidance that volumes are expected to grow both in Mexico and the U.S. And you mentioned that due to the inventory issues that clients built in Mexico that volumes were down, but you don't expect that to continue in the next couple of quarters. So should we interpret from that, that you're still expecting volumes to be positive for the year in Mexico?

[Hector Enrique Escalante Ochoa, executive]

Let me address the pricing question first. As I mentioned, we already announced the $8 per tonne per short ton increase effective July 1, 1 month ahead of what we -- I mean have initially forecasted. And we have already maintained conversations with the market, with the customers, biting them that this may not be the last price increase of the year. So there is an expectation that there could be another, in this case, late year price increase, of course, to keep I mean adjusting based on inflation and market conditions.

That's in the U.S. In Mexico, we are basically, as we speak, announcing, I mean, a second price increase, I mean, for this year, and it's going to be obviously effective this second quarter. Oil well, we have not discoursed a second price increase yet with the market, but I don't discard I mean, the possibility of -- again, based on the activity of that industry and the demand supply balance to have a second price increase in the second part of the year. So markets are very strong and there's a lot of cost inflation pressure. And one of the main focus of our sales team it's I mean look at every opportunity to increase prices. We, of course, try to protect the margins as best as possible. In terms of cement volume in Mexico, yes, absolutely. I mean the -- the decrease in the first quarter in the back cement market, we think it's a onetime event because of, again, I mean the advantage that the customer is looking trying to increase those inventory during the last quarter.

But since, I mean, the inventories are running short everywhere, I mean, for them and for us, I don't think that there is going to be another opportunity for increasing inventories at the distribution network level. So therefore, I mean, the volume in the market will continue to -- will increase in the second half compared to the first half, definitely in the back cement sector, and we will also benefit from a price increase on that volume increase. So looking very positive at the rest of the year.

[Carlos Peyrelongue, analyst]

Understood. Is it possible to ask one more question?

[Hector Enrique Escalante Ochoa, executive]

Yes, sir.

[Carlos Peyrelongue, analyst]

Great. On the expansion, 1 million tonnes that you plan to do, when do you think we will have an announcement as to the location of that expansion?

[Hector Enrique Escalante Ochoa, executive]

In the next conference call.

[Operator]

Our next question comes from the line of Vanessa Quiroga with Credit Suisse.

[Vanessa Quiroga, analyst]

I'm going to pick up on exactly the previous question from Carlos. And regarding the capacity expansion. So the 1 million tonnes is the new projects that you're going to take on? Or does that include all of the expansions that you're planning across your portfolio? That's the first question. The other one is just about volumes in the U.S. They were stronger in the quarter than what you're guiding for the full year. So like can you tell us about what drove the strength in the first quarter? And do you think it's kind of nonrecurring?

[Hector Enrique Escalante Ochoa, executive]

Let me address. No, the 1 million tonnes, which we have said, I mean, it's basically a 1.1 million tonne line. That's in addition to the expansion that we are currently doing at the Samalayuca plant for another 200,000 tonnes. So you would say that total expansion projects today amount to 1.3 million metric ton between the 2 projects.

Now going back to your second question on volumes in the U.S. I'm not sure I could understand the last part of the question. Can you repeat it for me, please Vanessa?

[Vanessa Quiroga, analyst]

That, I think this result for the quarter in the U.S. in terms of volume was stronger than expectations. And actually, your full year guidance is not as strong as what we saw in the first quarter. So I'm wondering if there was something specific to the quarter that led to this very volume growth in the U.S.?

[Hector Enrique Escalante Ochoa, executive]

Okay. Sorry. I mean, yes, I totally understand your question. Yes, definitely. And it was the higher demand that we experienced for oil well cement in the Permian Basin during the first quarter. That's where the additional growth in the quarter that's coming from.

[Operator]

Our next question comes from the line of Alejandra Obregon with Morgan Stanley.

[Alejandra Obregon, analyst]

I guess I have 2. The first one is related to energy as well. Can you remind us just ballpark where -- how does your energy mix look like? And how does that shifted during the first quarter? And where do you see it going for year-end both in U.S. and Mexico, I mean this environment on costs? And then the second question is related to -- you mentioned the second price increase for the second quarter in Mexico. Can you provide some color on the magnitude for that? And when do you expect to see that shifting and passing on to the shelves?

[Hector Enrique Escalante Ochoa, executive]

Alejandra, on your first question, energy mix. As a reminder, I mean, basically, the Pueblo plant, the Tijeras plant in New Mexico and the 2 cement plants in Mexico usually run 100% on coal. This has not been the case this last quarter because we have been burning some gas in some of these plants. And the reason is that we are going from one section of the coal mine to a new section, we're building a project, I mean, to move from one area to the other, that is going to be ready by June of this year. When we start mining in the new section, we're going to be able to increase, I mean, coal shipments from our mine to these 5 plants, reducing our consumption of natural gas and then reducing our overall fuel costs. That it's part of our cost containment and inflation containment actions on the fuel mix process.

So we're going to have a better mix based on more of our own coal, less gas and less purchases of outside third party coals that we were buying as a supplement during this construction project in our mine. The rest of the plants, the Odessa plant runs 100% in gas, and we have some in gas contracts that protect us from a price increase there. The Rapid City cement plant runs on a third party coal from the Permian Basin, where we also enjoy a long-term contract with stable prices. So we have a very good hedge in terms of fuel cost in the company, and we expect that to improve, I mean, again, the second part of the year with the change in mix that we're planning to do here.

Now regarding the price increase in Mexico, the date first, it's going to be immediate. I'm talking, I mean, the effective no later than May. I don't have a definite number that I can give you at this moment, we're precisely as we speak, finalizing those numbers. And so we can announce that, I mean, to the market no later than next week. So we can give you information on that next week.

[Operator]

[Operator Instructions] Our next question comes from the line of [ Joao Santos ] with UBS.

[Unknown Analyst]

My question is regard to top line during this quarter. We saw a very strong figure for revenues above the historical levels for the first quarter. And since the first quarter seasonal just its weaker than the others. Was there any specific trigger that we should take into account? Or can we expect the company to maintain this performance for coming first quarter in other years?

[Hector Enrique Escalante Ochoa, executive]

Thanks a lot for your question. I'm going to relate this question to Luis Carlos for him to give you more specific numbers.

[Luis Carlos Arias Laso, executive]

I understood your question as it's the same performance in -- that we have in top line revenue is expected to be the same for the rest of the year. Is that what you asked?

[Unknown Analyst]

Yes, it's more precisely in the first quarter because when we seasonally adjusted for the total of the revenues in the year, we see the first quarter weaker than the others. So my question is if there wasn't specific trigger for this first quarter related to previous first quarters?

[Luis Carlos Arias Laso, executive]

Well, yes, the trigger for this quarter, as I explained is, part of the strong performance of oil well cement. But we expect for the full year is what we -- is what we're displaying in terms of the guidance, which is low to mid-single digit in volumes and mid to high single digit in prices. Normally, the first quarter is -- has a lot of volatility because of the winter. It's not the big quarter in terms of the construction season. So it is not always a proxy for the rest -- for the performance of the rest of the year.

[Operator]

Our next question comes from the line of [ Hector Maya ] with Scotiabank.

[Unknown Analyst]

It is to see you could please share for the details to understand the reason behind why you're maintaining your guidance because it seems to us that it might be look a bit conservative. So I wanted to understand how you're thinking regarding the possible downturn in demand or if it's a little bit more related to housing is it's more on the side of the conservative due to potential higher distribution costs?

[Hector Enrique Escalante Ochoa, executive]

So you're asking about the guidance that it is a little bit conservative based on the results of the first quarter. Was that the question?

[Unknown Analyst]

I mean, yes, one part, it's about the results of the first quarter, but also trying to understand a little bit of what you mentioned, you talked about the guidance and you were possibly thinking about slower demand?

[Hector Enrique Escalante Ochoa, executive]

Yes. Okay. On the supply and we gave this guidance, of course, I mean during the whole of last quarter, we already had our budgets, and we're raising, I mean, the backlogs in the market and the dynamics of the market. So our supply and demand was based on those volume increases that are somehow helped by our total capacity at the moment. So if there is more than -- actually, there is more demand than what we can fulfill at this moment as well as many other competitors in the U.S. A lot of customers are already on allocation given the limitations of the industry to supply more cement at the level that the demand is.

So that's why our guidance in terms of volumes, it's somehow capped at those levels. So there could be potential to improve, I mean, the guidance based on the pricing information that has been recently developed. However, I mean, since we are also finding this inflationary cost pressures worth maintaining the guidance at the level that we communicated it during the last quarter of the year. So yes, there could be some upside potential based on pricing, but we would prefer to remain a little bit cautiously optimistic and not go over both here.

[Operator]

Our next question comes from the line of Alejandro Azar with GBM.

[Alejandro Azar Wabi, analyst]

Just a quick one on your CapEx. Are you seeing a delay in the deployment of it? Or are you still thinking of spending those EUR 260 million for the year? And if that's the case, should we think that most of those will be seen in the second half of the year?

[Hector Enrique Escalante Ochoa, executive]

Yes, let me address the first part of your question, and then I will ask Luis Carlos to complement. The CapEx for the divided basically in 2 segments $80 million are basically the maintenance CapEx for the year plus the carryover that we're bringing from 2021. That's been spent on pace. We don't see a delay in the deployment of all the maintenance CapEx. In terms of the projects that Samalayuca project it's of course, running, I mean, on schedule too. So that -- the part of that CapEx on the growth project is going to be also deployed I mean as forecast. The rest of the CapEx, the part that corresponds to the other project may be delayed a little bit during the second half of the year because we're still, I mean, working hard with the technology suppliers and the contractors given the inflationary environment, I mean and the delays in the supply chain, I mean, so there may be a delay in how we deploy part of that CapEx. But I will ask Luis Carlos to give you more color on that on the second aspect of our section of the CapEx.

[Luis Carlos Arias Laso, executive]

Sure, okay. Yes, definitely, most of it is going to be spent on the second half. And as Enrique has explained, we may see part of that growth CapEx going into the first quarter of 2023. As we are talking with the vendor, with the technology providers, we're making all the network to have more clarity on this, on how we're going to deploy this CapEx. But definitely, it's going to be more in the second half of the year and some of it going to the first quarter to 2023.

[Alejandro Azar Wabi, analyst]

And just one quick more Luis Carlos, if you could remind us that the volumes from the Samalayuca expansion, when do you see them or the ramp-up of that expansion and also the ramp-up of the new plant?

[Luis Carlos Arias Laso, executive]

Well, the volumes coming from the Samalayuca are definitely going to be in 2023 in the first half, we're going to have the first output from that expansion. And as we said on the other project, we want to finish that project in 2024. So we may have a part of that output of production in late 2024.

[Operator]

Ladies and gentlemen, we have reached the end of today's Question-and-Answer Session. I would like to turn this call back over to Mr. Ricardo Martinez.

[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 of questions you may have. Goodbye, and stay safe.

[Operator]

You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your day.