Ocado Group PLC

LSE:OCDO

Earnings Call Transcript 2020-Q1

[Operator]

Hello, and welcome to today's Ocado First Quarter Analyst Call. [Operator Instructions] And just to remind you, this is being recorded. So today, I'm pleased to present David Shriver, Communications Director; and Duncan Tatton-Brown, CFO. Gentlemen, please begin.

[David M. Shriver, Communications Director]

Well, good morning, everyone. This is David Shriver. Welcome to the first quarter sales analyst call for Ocado Retail, which, as you all know, is a 50-50 joint venture between Ocado Group and M&S. Our Chief Financial Officer, Duncan Tatton-Brown, will give you a brief summary of Ocado Retail's performance in Q1 before updating you on the impact of the coronavirus outbreak. We'll then go to questions. Duncan, over to you.

[Duncan Tatton-Brown]

Thank you, David. I know that these are troubling and challenging times, and you want to hear about the impact of the coronavirus on our business and our responses to it rather than to focus too much on the quarter just ended. I promise I will get to that. But first, let me just summarize the quarter because that will put in context our current trading and the challenges we're now facing.Our first quarter was in line with guidance. Sales grew overall 10.3%. We saw double-digit growth in customer transactions, even with further growth limited by our current lack of spare capacity even before recent events. It's important to note that the impact of higher basket values and order demand amid escalation of the coronavirus was limited in the quarter, which, by the way, ended on the 2nd of March to less than 0.5% of the sales.In the short period since the end of the quarter, sales have picked up and current sales growth so far has been running at double the rate we saw in the first quarter. At the end of last week, traffic to our website was running 4x higher than the highest speed ever recorded in the business before we put in the queuing system. We believe the sales growth includes an element of forward buying, which will unwind at some point. As you'd expect, the biggest increase in demand is in ambient categories, which, if not needed in the near term, can be consumed at a later date. Also keep in mind that there are higher costs involved in running the business at the limits of capacity.In meeting the challenges of the pandemic, the business has been undertaking all preparedness measures, including rehearsals to cover various scenarios. We are following every government directive, which includes all relevant guidelines from Public Health England to the Foreign and Commonwealth Office and NHS to help to delay the spread of the virus. We're making changes to the way that we operate. We're supporting our staff who need to come to work when it's safe to do so, as they are essential to serving our customers who need our deliveries. We're also allowing those who don't need to come to work to do what they can from home. We're supporting our customers by doing our utmost to meet their demands, particularly those in the greatest need, although we won't be able to satisfy all the demand that exists.Yesterday evening, we closed the access to our website. No scheduled customer deliveries will be canceled as a result. We're fully booked for the next 4 days, and we'll use the time to complete essential work that will help make sure distribution of products and delivery slots is as fair as possible for our customers. We have changed our operational procedures to only deliver to the doorstep and to temporarily not take back plastic bags for recycling. We appreciate the forbearance of our customers for these changes, and for those who cannot get the delivery, either when they want or at all. We're working with our suppliers to meet the increased and less predictable demand and have gone to immediate payment terms for small suppliers to support them at this critical time. Now we can't address theoretical scenarios on this call, but we will follow the latest established protocol for any scenario, which includes informing Public Health England of any infection amongst our staff so that we can enact the advice they give us. As of this morning, we've not had to reduce capacity because of any impact of coronavirus.Now briefly elsewhere in the business. Preparations for the switchover from M&S to -- from Waitrose to M&S are well in hand. The performance of our new immediacy offering Ocado Zoom remains both positive and encouraging, and we're currently planning the rollout of additional micro-fulfillment centers. And our facility at Erith, CFC4, the largest grocery fulfillment center in the world at maturity, continues to ramp up to now over 80,000 orders per week.We're, of course, working to ensure that we deliver to customers at a time of exceptional strain and stress for the whole of society, and we trust the resilience of our business, and colleagues will see us all through.With that, I'm now happy to take the questions.

[Operator]

[Operator Instructions] Our first question is from the line of James Anstead at Barclays.

[James Robert Anstead, Director]

Yes. Just one question for me, and I appreciate this is a solution rather than retell in terms of question. I don't know if you can talk about whether the restrictions on people's ability to travel is impacting the work you're doing to prepare the CFCs in places like Canada, the U.S., France, et cetera. Is that being impacted at the moment? Or can that be overcome by remote working?

[Duncan Tatton-Brown]

James, of course, travel bans and travel restrictions will have some impact for individuals. But as of this week, no, we've seen nothing that causes us a concern in terms of the impact of the opening program. Clearly, as I said on introduction, I'm not going to go into hypothetical scenarios, but to date, no, there's been no impact.

[Operator]

Okay. Our next question is over to the line of Vincent Lee at Bernstein. Okay, as there is no reply, we will go to Xavier Le Mené at Bank of America.

[Xavier Le Mené]

First one, you're talking about a change in the mix of products, but how is it affecting potentially the operations? Would you see any slowdown because you've got to reaffect more space to ambient food rather than fresh? And second thing, so you stopped your website and you're talking about a new queuing system. Can you elaborate about what it means, actually?

[Duncan Tatton-Brown]

Yes, there's no -- there's not been any -- the mix change between ambient and fresh hasn't in and of itself given any impact to our capacity. If you recognize that in the first quarter, we were growing the limits of our normal capacity growing about 10%, we're now growing at about 20%. That clearly gives you a sense that we're getting a lot more capacity. An obvious explanation of that extra capacity is the fact that customers will take deliveries any day of the week now any time of day, whereas previously I think that there would be certain times of the week which were less attractive in aggregate to our customers, so we weren't operating at peak capacity. We're now operating at peak capacity every hour of the day, every day of the week, so we can get a bit more capacity out. And no, the split hasn't particularly impacted our ability to get that extra capacity.In terms of the website, we took the decision to close the website not because of technical problems with our infrastructure, it's simply we were completely booked out for the next 4 days and heavily booked out after that, and we want to use the time to make some changes so that there's a fairer distribution of the capacity that we have. I really don't think I'm exaggerating in saying that if we have the capacity today, we'd be selling 5 or 10x the amount of groceries that we currently are because of the completely unprecedented demand today and, therefore, it is important that we have a mechanism for being as fair as possible for as many of our customers as possible.

[Operator]

We now go to the line of Andrew Gwynn at Exane BNP.

[Andrew Philip Gwynn, Senior Food Researcher & Analyst of Food Retail]

So first point on the point of clarity. So I think you said -- well, the statement says that orders doubled so far and then you're talking about sales doubling. I presume there's quite a big change in basket size. So I'm just wondering if you could comment on that briefly. And the second question, just the obvious point on supply. Obviously, working tight and have been working hard with suppliers to bring that in, but just wondering if you could give us a quick update on what you're seeing there? And then just going back to James' question on the kind of partner opening program. I mean it seems that it's prudent for us to think that it could see a bit of a delay there. And would that have a significant impact on profitability for the full year? Or is that just not really a consideration at this stage?

[Duncan Tatton-Brown]

Yes, I mean, with apologies, I actually think our comment around double-digit increase in customer orders is probably not as correct as it should be. That's a polite way of saying. This is a double-digit growth in revenue more than orders because we're seeing big growths in basket size. So the growth in orders is not at the same level. The growth in capacity that we pick for our customers is at 20% growth, but some of that's coming through in larger basket, which I think is completely understandable and I think sensible. Hopefully, many of our customers are using the slot that they get to order for themselves, but also for those that they can support. And certainly, we would want to encourage that, that people support those more vulnerable nearby because we'll get more deliveries, we'll get more groceries to customers if we have slightly fewer, slightly larger orders.From the supply side, of course, apart from the much reported items, where there are some stock shortages, often driven by, frankly, the spikes in customer demand, we have some problems there. But generally, our suppliers are able to cope with our demand. I think we have to use the word generally because in many businesses, there are some impacts and the impact of coronavirus on consumers, but also on employees of those companies means that there will always be some impacts, but there is plenty of food and plenty of products even if there are some isolated cases of constraint, not least because there's pretty unpredictable demand from customers now because we're not dealing with a normal situation.Andrew, the last point, again, I don't really want to speculate too much on what might happen over the months and months to come, but I think it's worth noting that our revenue assumed for this year for International Solutions we said was less than GBP 10 million. So even if you were to assume some form of delays for that, the impact on this year is not significant.

[Operator]

Our next question is over to the line of Rob Joyce at Goldman Sachs.

[Robert Joyce, Equity Analyst]

Just a couple for me. First one, obviously, you're operating, as you say, at sort of capacity. Just wondering what is the -- or are the bottlenecks? Is this in processing through the CFCs? Is it in getting the number of vans on the road? Just so we could understand that, that will be great. And then the second one is, just thinking about maybe how this impacts behavior longer term, are you able to break down what is the increase in orders sort of coming from existing customers? And what are the volume of new customers coming to the platform?

[Duncan Tatton-Brown]

Yes, the biggest constraint is in our ability to process the orders through our CFCs and, again, we were constrained in the first quarter based on a normal profile of demand. And that was limiting our growth anyway in the first quarter in the current situation. I mean the major -- without doubt, the major limit, vans and drivers are -- as it says, they're actually not more movable. So if there are changes in demand, one can move them around to a certain extent, and they're easy to -- relatively easy to add more of. The problem we encounter is we can't build CFCs overnight to satisfy this demand, and we were short of capacity beforehand.In terms of behavior, we have closed the website to new customer registrations. So this growth in business is effectively all from our existing customer base. And no, we're not taking new registrations from customers. As I said earlier, we have so much demand that we can't meet. It didn't seem sensible for us to add new customers at this point in time.

[Robert Joyce, Equity Analyst]

Okay. And just to confirm, you did say earlier, if you didn't have capacity constraints, you reckon you could be doing 5 to 10x the level of sales?

[Duncan Tatton-Brown]

Yes. I mean you -- the amount of demand is simply unprecedented, and that I think is understandable why consumers would want that at a time when they're trying to reduce contact. Yes, I think if we had those extra facilities, we would be serving a lot more customers now.

[Operator]

We now go to the line of Maria-Laura Adurno of Morgan Stanley.

[Maria-Laura R Adurno]

Just to -- the first one, you mentioned you've reduced the payments of some of your suppliers. So just wondering if potentially you can tell us a little more in terms of potential quantifiable impact on the back of this? And the second question, in terms of running already at full capacity and incremental cost being incurred, just wondering what are those. Are you hiring more people perhaps? So any comments would be helpful.

[Duncan Tatton-Brown]

The working capital impact of this is quite modest. We -- at Ocado Group, we have absolutely adequate funding. And I obviously won't talk of M&S group, but they are clearly, I think, are in a completely -- sorry, in a perfectly good situation. So Ocado Retail is not short of funds, so a GBP 10 million or GBP 20 million working capital impact for that business is absolutely fine.From a hiring perspective, we were hiring, we're continuing to hire. And I think it's worth saying that we have also been approached by a multiple number of companies offering to help out at this time of need. We're liaising with them, and as and when we get any significant issues, it may be that we can work with other companies who have sources of labor, which they're currently not needing, that might be able to help us out. So nothing to say on that, but I will say that there's a very active series of conversations with other companies who have spare labor capacity.

[Operator]

Our next question is over the line of Bruno Monteyne at Bernstein.

[Bruno Monteyne, Senior Analyst]

I seem to be swapping name of my colleague, Vincent, sorry for that. Three for me, please. So if more demand certainly surges through supermarket, you normally have a high contribution margin. Now from your introductory remarks, you seem to suggest that the extra cost might make the extra demand less profitable. So can you please comment on whether those demand surges are more profitable or less profitable than normal run rate?My second point is, even before the coronavirus sort of started, you were growing at 10%, according to your release, and you said it's a capacity constraint. Given that you're targeting to grow at 10% to 15% this year, what is it about the phasing of the capacity that you're adding in the U.K.? Or when will you suddenly get a big step-up to be able to grow closer to the 15% in the U.K., if we exclude obviously the coronavirus impact?And third of all, on your international partners, I presume they're all overloaded with e-commerce demand in their existing operations as much as we are in the U.K. Do you feel any pressure from them to accelerate the rollout plans to be able to use your facilities faster than maybe initially planned? Or is it the reverse? They come to you with the headache of managing that extra project? So which way would they be swinging today?

[Duncan Tatton-Brown]

So on your first question, I would say, at the moment, our focus is not on spending time trying to understand the profit impacts of this very strange scenario. Management time is not focused on that. Management time is focused on how do we get more capacity out of our business. And that's, frankly, the measure we look at on a daily basis, how do we meet as much of the demand as possible. So I haven't asked this question. So this is from the top of my head rather than from investigating it.The point on operating at peak being slightly less efficient, I think it's clear that in the facilities when we're operating them as hard as we do, we're not quite as efficient in labor terms. In margin terms, I don't think there's any particular comment to make on margin terms. But I think it's reasonable to assume that better sales growth with fixed costs obviously, not changing in the short-term is, if anything, positive.In terms of your questions on capacity, there are times in normal years with normal profiles of demand where we're slightly less utilized, obviously, for example, in the summer periods. If we have underlying inherent demand, we would expect to grow faster in those periods, hence, 10% to 15%. At times of peak demand, it's more likely to be closer to the 10%. At times of lower demand, there's more opportunity to be at the higher end of that. So that's our guidance. I think when we have new facilities open, Bristol and over Purfleet, we're coming on stream over the next year -- next couple of years, then I think we have real opportunity to accelerate.From partners' perspective, I won't say too much now. I don't think it's too early to say too much. I think it's -- I certainly don't think that it's likely to assume that there will be less demand for our capabilities as a result of this, but it's too soon to say that it will be a lot more demand, and we'll see over time what happens.

[Bruno Monteyne, Senior Analyst]

But the point was also about whether they're pressuring you to go faster on your existing commitments. Or whether they are rather trying to delay on the deployment plans of your existing commitments?

[Duncan Tatton-Brown]

So Bruno, as of this week, we haven't seen any delays in our operational -- or our ability to deliver those facilities. And we are -- because we said that they were going to open in the first half of this year anyway, they're obviously relatively soon. So no, don't assume there's any request from the businesses to delay those openings. I don't want to hypothesize, but obviously, if governments change their instructions, obviously, we're at the mercy of what governments want to do. But no, at this stage, no delays there to those facilities.

[Operator]

Our next question is from Nick Coulter from Citi.

[Nick Coulter, Director]

Three -- or four, if I may. Firstly, on your ways of working in the CFCs, may I ask how you change those to try to risk -- to kind of take the risk out of -- or minimize the risk of contamination? I note the temperature scanning comment in the release. And then secondly, I guess, it goes without saying that you lead in technology in your field. So without intending to be flipping in any way, why hasn't the app or the website been able to effectively process and, I guess, politely turn away the new customers? Is this an issue of capacity or the size of the pikes on the front end customer interfaces? And then thirdly, to what extent do you think you might be able to scale Erith faster? And I guess that's the case of building out the picking stations, introducing additional robots on the grid. If you could kind of talk through those discussions that are going on around driving capacity. And then lastly, on the present sales run rate and the kind of the 5% ahead of 10% to 15% range. If demand persists, which it might well do, given the transition from food away from home to food in the home, is there any reason why you wouldn't expect to kind of keep 5% ahead of your revenue guidance notwithstanding any disruptions to supply or to beat the workings or beat the operations of the CFCs?

[Duncan Tatton-Brown]

Okay. Nick, a few questions there. So some comments on ways of working in the facilities, as you said, we have temperature scanners for our employees coming to site so that we could identify anybody who has a fever and take the appropriate action. We have changed cleaning regimes with multiple times a day, multiple times a shift. I think it's actually even hourly cleaning of some of the areas where transmission of disease could be at its highest risk, obviously, things like metal surface on -- metal surfaces and hand railings, those sort of things. Segregation as far as we can in terms of our employees so that they're in different groups in operational areas and also to the extent we can separate groups in the rest areas so that we minimize the risk of any impact there. And of course, very clear instructions for those who have symptoms to self-isolate and washing of hands and all the normal -- now normal operational procedures.From a -- your question around the website, the first thing to say is, in some ways, the customer demand to our website at first appeared like a denial-of-service attack. This was a completely unprecedented surge in demand. I could chuck a bunch of stats at you. One hour in a week where we had 100x the typical demand during the whole of the typical weekly business in less than a day share, huge quantities of people waiting to queue. So like all organizations, if you -- if I told you we had a 10x spare capacity from a technology perspective, you'd spend a lot of time asking me why we were running so much extra cost when it wasn't necessary. So no, I don't think any of this is a reflection on our capabilities, it's just completely unprecedented from a demand perspective. And the reason, as a repeat, for closing the website is, it's not a technology infrastructure. It's a desire to make changes so that we can more fairly distribute the capacity that we have amongst customers.In terms of Erith, we were already capacity-constrained. We were already wanting to grow Erith as fast as possible. You heard me mention that we've grown capacity from just over 70,000 to over 80,000 just since our results presentation. So literally, over the last month, as an aside, our efficiency of that facility has improved dramatically. And as an aside, our engineering costs continue to lower. But the biggest thing we'd like to do now is just keep growing that capacity, and we'll look to do that as fast as we can.

[Nick Coulter, Director]

World stops, you're going faster, Duncan. What are the constraints?

[Duncan Tatton-Brown]

Well, the sort of typical normal ones of hiring more people, which is more challenging at this time; manufacturing more robots; getting those robots onto the grid. And so transport movement restrictions, labor restrictions aren't helpful, but at the moment, I wouldn't assume we're going to go slower. It's just you've got to understand, in business, almost any business that you talk to has some form of constraint because the virus has spread to the extent that people are self-isolating in lots of businesses. So the ability to go faster is just challenging. We're obviously working on it.

[Nick Coulter, Director]

Okay. The picking stations are built, are they? Or you're in the process of building those out as you go?

[Duncan Tatton-Brown]

We were in the process of building them out. Nick, I couldn't comment today because it's not been the focus of our management team over the last week or so on the status of those picking stations. But no, we're building capacity for ourselves and, by the way, for our overseas partners, but our ability to grow it substantially faster is limited. It already was limited, and it clearly remains limited.

[Nick Coulter, Director]

And then the 5% run rate question?

[Duncan Tatton-Brown]

Well, I think there's a series of assumptions in there around how long the current situation lasts. I think there is a question in there for all businesses of what impact -- as the numbers with this grows or the number of self-isolating grows, what impact this may have on workforce? Which is why, at the moment, we don't want to change guidance, but it's easy for anybody to run a scenario where you could show that that's better if you assume limited impact to workforce and sustained period of extra demand. But I don't think at this stage it's worth me hypothesizing the concepts, that looking to the future is something which is happening -- it's real and happening now and changing over time.

[Nick Coulter, Director]

That's greatly helpful to understand your thought processes.

[Operator]

Our next question is over the line of Tom Davies at Berenberg.

[Thomas Davies, Analyst]

Three questions for me. So first question. So you guys received insurance proceeds from demand that you're unable to meet due to loss of capacity and, obviously, you are under that. Is this insurance proceeds tapped at all because there's like exceptional demand level? Second question, by closing the website, are you guys at risk of causing some increased customer churn of your existing customers and, therefore, in subsequent periods you would require increased marketing spend to recapture some of this? And then finally, you say that manufacturing of robots is one of the constraints of expanding capacity at Erith. Is the process facing any issues in terms of like a supply chain perspective in building the robots?

[Duncan Tatton-Brown]

Tom, 3 interesting questions. Yes. So from an insurance perspective, business interruption, because this is effectively the type of insurance we're talking about, already is more of an art than a science because this is what was the alternative scenario that operated prior to this versus the reality that turns out. That is a debate that we'll have with our insurance company over the months ahead, and we weren't expecting to conclude that debate shortly. So I think I'll comment on that more once we've had a bit more time to consider that.Your concerns about increased churn from customers, I think it's too early to comment too much on this. What I would say, without doubt, is that our customers are not finding our service quite to the same level that they would normally expect from Ocado. Having said that, we're delivering 98% of goods so we are shorting and we're missing goods much greater than we normally would expect ourselves to do, but I think still at an incredibly high level. And I think the teams involved in our facilities and -- driving to customers and, frankly, in the head offices talking to suppliers and doing an amazing job despite that. But have no doubt, some of our customers are not happy. And that's not surprising because they can't get our service with the ease that they used to be able to. They're having to wait to book a slot. Sometimes they're not getting a slot. So there are some as it were downsides, but I hope and I believe that our customers recognize that these are unprecedented times. So no, I wouldn't assume any greater churn.Lastly, in terms of manufacture, I won't comment specifically on process as, one, within the robot, there are plenty of items that come from overseas. Clearly, those types of things can pose constraints, and they have, without doubt, been some constraints. One of the items in a robot came from Wuhan, one of the earliest areas impacted, and so that's cost us a very modest amount of money to find an alternative supply. That's just illustrative of the impact of this all over the place growing capacity faster in terms of robot manufacturing will be difficult, but also not flagging any challenge, any substantial change. I think we're able to cope.

[Operator]

Our next question is from the line of James Lockyer at Peel Hunt.

[James Lockyer, Analyst]

Hope -- I had some technical issues. Hopefully, you haven't answered these ones before. But in terms of -- you spoke in the past about your ability to change what is shown to customers based on the estimate of when they're going to be ordering and what's available. Obviously, I was just wondering if you -- have you been able to manage customer choices, number of same items in baskets, for example, to sort of manage a smoother operation and a more smoother operation between customers. Would be good to hear about that. And then also, I think on -- around Zoom, if you had any impact -- benefit there in the Q2 at Zoom, please?

[Duncan Tatton-Brown]

In terms of changes to our operations and make it easier for us, we haven't had to make any substantial ones. We will continue to look at that. And I think what you've heard from some other retailers are ideas that it's worth considering just -- so, for example, restricting range is an area where we could consider. Actually for Ocado, given our technology and automation, we can continue to pick a big range because of the way we set up with multiple pick places or in our newer facilities with our storage. So there's limited pick efficiency by limiting the range. So I don't think you should expect to see a lot from us but maybe some of the fringe areas will make some restrictions. And we already have some constraints on particular products so that customers can't order too many multiples of individual products. And some of that is for supply availability reasons such as, for example, toilet roll, and others can be the typical ones of not selling too much bottled water because that removes capacity that could be used delivering groceries to customers. Your second one, James, [ our written ] down impact, and I can't remember...

[James Lockyer, Analyst]

Zoom.

[Duncan Tatton-Brown]

Zoom. Of course, yes. In Zoom -- Zoom is symptomatic of the rest of the business, which is there's unprecedented levels of demand and slots get booked out very quickly. And it's -- there's not the availability to go to the app today and get an order in the next hour because slots are being booked out. So customers who are in that catchment are using it. It's being used as much as they can.

[Operator]

Our next question is over to the line of Simon Bowler at Numis.

[Simon Bowler, Analyst]

Apologizes, I missed the first couple of minutes of the call, so I don't know if you referenced this, but I think I heard you say towards the end, you're now in the process of rolling out kind of multiple Zoom facilities. So I just wondered if you could give a little bit kind of more color on that. And then just kind of secondly, I imagine it's a relatively difficult time to kind of appraise the kind of performance of Zoom, given the unusual kind of basket size and behavior that you're seeing out of that. Do you think you've got kind of enough data from your kind of period of trading before we entered this unprecedented situation to give you confidence that you need in terms of a broader rollout of the proposition?

[Duncan Tatton-Brown]

Yes, and I think the confidence is, without doubt, there. So we have liked the learnings that we've taken over the sort of trial that we've been running for a year. And yes, we want to take it forward. And the point is not on -- we're in the actual rollout of additional micro-fulfillment center of Zoom's, but we are planning the rollout. So the discussions are ongoing, and we're working on projects, but they're not all in fact -- yes. So we're not in the construction phase of multiple. We're in the planning phase of multiple. It's not top of mind today. Obviously, over the last couple of weeks, management's focus has been on other things, but now we're very encouraged.

[Operator]

Our next question is from the line of James Grzinic at Jefferies.

[James Robert Grzinic, Equity Analyst]

Yes, I actually did not have a specific question, I canceled it, but I'll ask one in any case. Can you perhaps be a bit more explicit on the date of when the first 2 CFCs will open so we've got a bit of a marker of when to expect those first 2 international facilities are up and running given that we are in the middle of half 1 2020?

[Duncan Tatton-Brown]

James, I know the date, but I won't be more explicit. And that's not to be difficult. But I think the important thing here is for our clients in this case to decide how and when they let their stakeholders know. So we know how they're progressing. We know when they're planning to announce. But I won't disclose that yet because I think that's very much for them. But just to repeat, we're still expecting both to be in the first half of this year.

[Operator]

As that was the final question for today's call, may I please pass it back to you for any closing comments at this stage.

[Duncan Tatton-Brown]

Well, thank you, ladies and gentlemen, that concludes our quarter 1 trading call. In normal times, we'll report to you next on the 7th of January -- 7th of July, and I hope everybody keeps well. Thank you.

[Operator]

This now concludes today's call. Thank you all very much for attending. You can now disconnect your lines.