Infrastrutture Wireless Italiane SpA

MIL:INW

Earnings Call Transcript 2018-Q2

[Operator]

Ladies and gentlemen, good afternoon,, and welcome to INWIT Second Quarter 2018 Financial Results Conference Call. Michele Vitale, Head of Investor Relations, will introduce the event.

[Michele Vitale, executive]

Ladies and gentlemen, good afternoon. Welcome to the Second Quarter 2018 result presentation. As usual, together with our CEO, here we have our CFO, Mr. Rafael Perrino; and our Business Support Officer, Mr. Andrea Balzarini, who will provide you with an update on our 2018 operating and financial performance.

As usual, the presentation will be followed by a Q&A session. Now you can take note of our disclaimer policy that you should now see on Slide 2. Let me just highlight that reported data refer to the financial statement at June 30, 2018.

Let me guide you through the presentation by starting with Slide 3, where you can see that INWIT is continuing along its path of growth, diversification and efficiency. In term of result, as you can see in this quick overview, the second quarter 2018 find us right on track in both the operating and financial sphere. Let me start with the most important KPI, the tenancy ratio. It increased up to 1.85, confirming a growth trend fueled by new tenants, especially other than mobile operators. Likewise, the revenues grew by 7% compared to the second quarter 2017, aligned with our mid-single-digit target. As a result, the EBITDA shows another positive step-up with a 13% growth in this quarter compared to the same quarter of 2017. Again, aligned with our low-teens, which were on target. Finally, recurring free cash flow, excluding working capital, reached EUR 58 million confirming a solid growing trend of cash generation.

Now I leave the floor to Mr. Giovanni Ferigo, who will guide you through the main highlight of the second quarter 2018 result. As usual, a Q&A session will follow the result presentation. You can book it by pressing star 0. Operator Instructions] Giovanni, it's over to you.

[Giovanni Ferigo, executive]

Thank you, Michele. It's a pleasure to be here today with the aim of providing a clear and comprehensive picture of the state-of-the-art vendor and providing some insight into the future starting from the 4 KPIs introduced by Michele, which measure the well-being of the company. It's important to explain some of the aspects that qualify them and then close my speech today with some specific key elements that deserve some attention.

Let me show you the second quarter '18 results on Slide 5, starting from our revenues. First of all, I want to remind you that the total value of the INWIT contract in place today stands around EUR 6 billion, which means 18x the annual revenues of the last year. As you can see on the right side, the total revenues account for EUR 93 million, and we can split into 3 main classes. Revenues from Master Service Agreement within EUR 65 million related to the site inherited through the IPO, up from the second quarter of 2017 as laid down in the contract.

Let me remind you that the escalator is 100% of the previous year CPI. Revenues from other operators totaling EUR 23 million in this second quarter. They derived from new OLO tenants. Our MNO customers was a further increase and fixed wireless of this operators. Revenues from new sites and new services amounted to EUR 5 million showing a significant 5x year-over-year growth. This result was propelled by our commitment in developing new sites and in exploring new business opportunities like Nortel and McCallum.

Summarizing. Total revenues grew by EUR 6 million from the same quarter of the last year. That is a 7% increase. The most relevant cluster driving the growth is the OLO tenant.

Going to Slide 6, you can find an overview of the structure of our operating expenses. The total OpEx amounts to EUR 41 million, and this trend can be better explained by breaking down the total amount in 3 components. The most important one is ground lease cost. It decreased significantly confirming the trend set up in the previous years. This result has been achieved despite the increasing cost related to newly built sites by reducing the ground lease cost through renegotiation and land acquisition.

Other operating expenses slightly increased mainly due to some stepped up costs and some other mini things. Hence, the third component is personnel cost. This was mainly due to the headcount increase and people dedicated to new business. It's my will to reinforce our organization by acquiring or developing competency to sustain our brand.

Till now, we operated like [Foreign Language]. It's time to evolve and to become a more structured company. All in all, the OpEx amount is aligned to the same quarter of 2017, despite a significant business development.

In conclusion, in 3 years, we achieved a cost reduction of 7% notwithstanding the increasing number of new sites, the cost related to the new business and the headcount increase.

Moving to Slide 7, let me show the main KPIs that explain our performance. On the left, you have revenues and on the right, cost. Focusing on the revenues. The average revenue for sites confirm a growing trend, reaching a sound 6% growth year-over-year. Telecom presence other than TIM grew once again. This increase of new PoPs has been fully deployed in organic way adding new antennas to our existing towers. This result does not include any Iliad antennas. Consequently, the tenancy ratio further increased reaching 1.85, in line with our full-year target.

The chart on the right show the results achieved in term of the renegotiation and land acquisition and their impact on this cost per sites. As you can see, we continued our renegotiation and land acquisition activities, reducing our lease cost per site to EUR 12,000. We are really proud to be able to reduce our cost base by 3% year-over-year, while increasing the revenues with a 6% growth year-over-year.

With Slide 8, I would like to recap our achievements in the new business. The market features 3 different clear elements: Strong demand for mobile coverage in terms of macro and micro structured small cell, continuous increase on mobile data traffic and, in particular, the indoor generated 80% mobile data traffic, resulting needs of advance fiber optic connectivity that they're calling.

Moving to second quarter numbers. We can claim a double-digit growth in all the 3 business. We doubled the new sites building areas. We multiplied by 4x the amount of small cell and thus deployed and multiplied by 8x the amount of the calling links. In term of top line contribution, there are revenues for new sites, remote cell and big calling activities are estimated to be around EUR 15 million with yearly increase well above 100%.

Before my conclusion, I want to share some reflection about small cell business. Let me focus on Slide 9, bringing attention on 3 elements of [indiscernible] which deserve some attention. First of all, we are pioneering and driving the market with all the benefit and uncertainties it implies. We can only develop a first-mover advantage by conducting efforts related to the learning curve. The potential market is extremely attractive with huge margins giving us growth and differentiated customer base with different needs, for example, from mobile broadband to [indiscernible] augmented reality. And we are able to share all of them. It's not a secret that the number of location requiring additional densification is really growing, and we will keep on doing so. And the last one, technological evolution will help us to evolve the business model. Future application on 5G will increasingly require more cell and DAS in particular, small cell -- on small cell, 4G ones are mono-tenant, but we will soon be ready for the future generation, the multi-tenant and 5G-ready small cell. We decided to size the new opportunity by lowering down the pure 4G small cell deployment in the short period.

We are leading the small cell market in Italy and paving a new way. Crossing new frontiers requires a continuous and careful check on progress and expectation. Notwithstanding short-term success, we confirm this 2020 landing point of 10,000 small cell and DAS.

I was right in saying that before leaving the floor to the financial experts of our second quarter '18 results presentation, it's important to underline that we delivered the 13th growing quarter in a row. Our reputation is increasing well beyond the Italian border. For example, we are the investor partner of several portfolio of MEO in Portugal. We are making the team stronger. We are introducing a new marketing sale division to manage and develop the new opportunity in the market. We confirm all our planned guidance. Let me quote the Mark Twain sentence that is very fitting for the 5G environment. In the gold rush, the most remunerative role was to be in the pick and the shovel business. We will be selling the pick and shovel of 5G world. Thank you, Michele.

[Rafael Perrino, executive]

Thank you, Giovanni, and good afternoon to you all. To begin with, let me review with you the second Q '18 reported results and the main KPIs. Revenues stand at EUR 93 million and with OpEx at EUR 41 million, we have reached a reported EBITDA of EUR 52 million. Our investments in the quarter amounted to EUR 15 million, and net income amounted to EUR 34 million.

Regarding cash flow, results performance and EBITDA grow the current free cash flow to reach EUR 54 million. Analyzing this data more in detail, it is worth highlighting, our solid top line performance with a revenue increase of 6.8% versus second Q '17. A flat OpEx despite some expenses due to starting up of the new business for personnel cost and other operating cost. A remarkable EBITDA increase of 13% versus second Q '17. Our reported net income for the period totaled EUR 34 million. That's a remarkable 11.9% growth compared to second Q '17.

Moving to Slide 13. Let me show you our historical economic performance from the second Q '15 to present day. As you can see, our reported EBITDA kept growing constantly. We have moved up from EUR 35 million at the second Q '15 to EUR 52 million today. Our EBITDA margin constantly increased from 44% in second Q '15 to 56% in second Q '18. Given that our cost structure mainly consist of fixed costs, revenues from new tenants directly become EBITDA, therefore, allowing us to increase margins. To better understand these achievements, let me highlight how strongly correlated our reported EBITDA margin and our tenancy ratio are. As shown in the ratio growth during our equity story from 1.55x in second Q '15 to 1.85x in second Q '18. All these results are due to our strong commercial effort in both our traditional business and in new technologies. This effort is visible in our investments, which increased from EUR 8 million in second Q '17 to EUR 15 million in second Q '18, showing a year-on-year growth of about 90%. Therefore, considering that in first Q '18, CapEx growth was roughly 60%, we can be optimistic about the year's results, while confirming the EUR 300 million 3 years' plan, obviously, with a slightly backloaded trend.

Also, let me point out that most of the CapEx is dedicated to new businesses developed. On Slide 14, you can see our second Q '18 reported net income totaling EUR 34 million and showing a year-on-year increase of 12%. This increase in net income mainly stems from a 7% increase in revenues. Second Q '18 EBITDA margin stood at plus leading 56% and EBIT margin achieved a remarkable 52%. Concerning taxes and interest charges and with large shows, taxes in the 3-month period totaled EUR 13 million, with an implicit tax rate of 28%, and interest charges totaling about EUR 1 million.

On Slide 15, you can see our cash flow at end June 2018. The CapEx rollout is in line with our investment plan. In this second quarter, we invested EUR 15 million mainly dedicated to our expansion activities, such as land acquisition, new sites, backhauling and small cell deployment. In terms of cash taxes, the figure is very low because of the payment date of the quarter's EUR 25 million happen to be on a Saturday. Hence as provided for by the law, the sum was paid on the following Monday, 2nd July, and does not appear in the results of the second Q '18.

In terms of working capital, we can see that typical fluctuation trend, Q1 showed a EUR 7 million negative results, while Q2 showed similar figures but on the positive side. In fact, the yearly trend so far can be confirmed as neutral. Hence, during this quarter, we achieved a reported recurring free cash flow of EUR 54 million. Thus, we delivered also a positive cash flow to equity, amounted to EUR 43 million.

Let me remind you that we paid out a dividend for a total amount of EUR 114 million equivalent to EUR 0.19 per share. That's 90% of the 2017 net income, up almost 30% year-on-year.

In this last slide, we provide you with an overview of our balance sheet at 30th June, 2018. At the end of the second quarter, our net financial position amounted to EUR 80 million. The current situation leads to a net debt on annualized EBITDA ratio in the area of 0.4x, leaving our financial leverage intact.

Lastly, the fully distributable reserves despite the generous dividend distribution in May, was EUR 759 million at quarter end, corresponding to approximately EUR 1.3 per share.

[Michele Vitale, executive]

Rafael, thank you. Thank you, Giovanni. We can now open the Q&A session, where our CEO, Giovanni Ferigo; and our CFO, Rafael Perrino; and our Business Support Officer, Andrea Balzarini, will answer your questions. [Operator Instructions]

[Operator]

[Operator Instructions] First, today's question comes from Mr. Simon Coles of Barclays.

[Simon Coles, analyst]

First, my question is on the transaction in Portugal. How come you guys got involved in the transaction? What skills and expertise are you planning to bring to the table? And then, if you can give us any indication on what remuneration you're actually going to receive for the consultancy you provide, that would be really useful. And should I take this as a sign that you are willing to look outside of Italy for opportunities? Or can we still assume that you're domestically focused?

[Giovanni Ferigo, executive]

Okay. INWIT participated in the tenders and won the contract for the sale of Altice tower in Portugal as a partner of consortium that won a portfolio of about 3,000 towers, okay? The company that will incorporate them, all show representation in the system. They are all independent, all senior operator for the mobile communication in Portugal. Today, there is no one [indiscernible]. In market with a very interesting macroeconomic outlook with plenty of room for growth in term of passive infrastructure sharing. INWIT, I underline this, cannot invest in this, and will therefore not show the share for the company. It's role will be to assist the management through its industrial and technical expertise, getting us to replicate in Portugal our stories, the successful measures that we have thus far put in place in Italy and we will be proud to do so. For us, is a few steps outside the national boundaries representing in a process will allow us to greater experience while adopting a very low-risk profile. Let me say that, for the moment, we expect more steps to follow out of the tariff. Again -- but these are very, very good experience for us.

[Operator]

Next question comes from Mr. James Ratzer of New Street Research.

[James Ratzer, analyst]

Question I had first was just regarding the tenants growth you've seen in the quarter. I mean, this quarter, it was about 150 new tenants. In the past few quarters, you've been adding 200 to 300 tenants per quarter. So I just want to get a understanding of what the slowdown was there? Is it just something seasonal you should expect to pick up again from more OLO demand? And just to -- I know it's only one question, but I'm not sure the last question was fully answered. Can you talk more about the potential financial gale or the benefit of this deal in Portugal? How should we be scaling that compared to your current level of EBITDA?

[Rafael Perrino, executive]

Okay, Jim, the first piece is on [indiscernible].

[Giovanni Ferigo, executive]

Okay, let me say. Overall, the demand is growing and we are more than confident to reach our target. If you remember, we forecasted 0.1 tenancy rate increase for year, and we are certainly on track on this. Today, for the -- the main driver for all our growth are MNOs. While there is local loop provider public [indiscernible] and IoT player. After analyzing each cluster, considering also the short-term trend, we notice that the OLO tenants has been almost flat because we suffered a slowdown with -- from Wind and 3, which are focusing more on managing net-to-net rather than developing new ports. The good news, and I repeat, I told this in my previous speech, Iliad still has not entered the market as tenants. It is reasonable to think they needs -- they might need towers in the future. They have to do the cover, that today they have not. Finally, fixed mobile operators, there are many, have growing demands, and they will further boost development in the future. So we are very positive for the future. [indiscernible]. Andrea for the second question?

[Andrea Balzarini, executive]

Thank you. On the financial for the Portugal venture, obviously, you might appreciate the number of subjects involved on this and the agreement is not to give now full disclosure on the economics. I can give you some guidance. We are going to be remunerated for the services we offer, while helping the consortium win the business that is going to materialize at closing of the transaction. Closing of the transaction is expected by year end, maybe sooner than that, but definitely by year end. Following closing, we are going to be remunerated for our consultancy, industrial expertise provided to the company. And the remuneration will be made of fixed portion on a yearly basis together with a variable portion, which will depend on performance of the Portugal company, when compared to the business plan at acquisition. Just to give you reference, we have -- on the Slide 5, we showed you revenues for new sites and new services, so I'm not talking new sites, maybe we are talking new services here out of the overall figure we've showing for the second quarter, the contribution for the services we provided during the business. And the fixed fee we are going to receive while helping in managing the company will represent an increase of that figure of a double-digit growth. Obviously, should we reach, after 3 years the required performance for the variable component to kick in, that is going to be -- to become more material, but is definitely too soon to talk about that. We still have to -- the company still has to start operations. We will keep you updated in our quarterly report whenever something from this initiative will show up.

[James Ratzer, analyst]

That's helpful. So just to understand that last answer, the fixed fee is around EUR 2 million per annum. Is that fair?

[Andrea Balzarini, executive]

I didn't say a number, also because it's different between the bid services and the annual fixed fee, so we're talking a number. But as I said, it's going to bring a double-digit contribution to the EUR 4.6 million we've disclosing for the new sites and new services revenues in the second quarter. But first of all, the transaction needs to reach closing and then operations need to start for it to materialize.

[Operator]

Next question comes from Mr. Fabio Pavan of Mediobanca.

[Fabio Pavan, analyst]

Congratulation for the results. My question is on the update on the corporate governance. You were mentioning you must adopt strategic committee. Could you provide us some more color on this committee and maybe also on the reason why you have decided to set up this new committee now?

[Giovanni Ferigo, executive]

Okay. Thank you. The strategic committee usually is an international best practice. With this sector, we have a significant component of innovation and technology. This is our challenge of today, a very modern tower company. Usually, we see or it is usually set up in order to decide strategic positioning and business innovation matter with significant evolution in the market compared to today where there are expecting a lot of, let me say, movements, okay? As you know perfectly, the tower sector is going to face significant change with the introducing of 5G with new player. And over the past month, the key shareholder of some relevant European tower company have changed and some are expected to change soon. So this very, very important strategic committee allows -- will allow to us to better monitor how the sector is evolving, analyzing in advance, among the rest, possible consolidation trends in the industry. In Italy, these are the right moment.

[Operator]

Next question comes from Mr. Ricardo Boada of Morgan Stanley.

[Ricard Boada, analyst]

Congratulations on another good set of results and the deal in Portugal. So from my side, I think it's a quite -- it's quite interesting to see that the small cells growth is really accelerating in the quarter. And, look, my question for you, Giovanni is, based on your background as CTO of TIM, I'm really curious to see how the conversations with the Italian MNO are evolving on the subject of small cells? Are you seeing any sites -- signs that the demand of small cells could start to inflect even further? I think that the Slide #9 on the presentation is quite an interesting one.

[Giovanni Ferigo, executive]

Okay. Usually, I like to repeat that the mobile data traffic is increasing year-over-year of 65%. And of this, 80% is traffic generated in indoor environment. And this phenomenon will increase because, as a matter of fact, all mobile operator are, let me say, proposing to the customers there are limited offers that will turn it to the guys to use the mobile in each sites that they will have. So the -- with this data, there's more cell and DAS we will grow a lot in my vision in the future. The unique limit of today is that the small cell are not subsidiaries and are mono-tenant. So the interest for [neural offer] is limited because with bigger coverage, you can serve only operator MNO. And normally, in some indoor sites, it's not so easy to install mini -- more cell for mini operator. So we are testing with these. The 5G-ready and more multioperator small cell delivered from very, very important, let me say, then those in the U.S.A. that we permit to have to maximize the usage of the inter coverage serving at the moment 2 operators. And this is a very, very good opportunity for us, got a great opportunity that finally need -- and because their decision to slow the mono-tenant 4G small cell in this year. Because -- otherwise, let me say, there will be some, let me say, un-useful installation because in few days, few months we have to change with the new antennas, okay? We will configure that our 10x of small cell program for 2020. But for this year's, we are -- I said, -- now we are the pioneers in this new race, and we are in the learning curve where we are really understanding what are the operator needs. And so the final number of the small cell -- on the small cell for this year's will land to 2,500 small cells, 3,000 small cell. This is the unique item, but, let me say, caused by technological issue that will permit us to install some new small cells arriving in the market, okay?

[Ricard Boada, analyst]

Perfect. And if I may follow up, is it fair to say or maybe what is the -- what is your reaction when you go in to see the c-suite of the other telecom operators in Italy and you showcase your capabilities on 5G and shared small cells? Is it accelerating the debate or the demand for small cells? Or how is the reception at the chief technology officer level with all your clients?

[Giovanni Ferigo, executive]

Let me say, the indoor traffic is a master. So we are presenting our company as neutral offer by definition in Italy. And so all the mobile operators, okay, they are accepting our solution, our proposing. And okay, let me say, we can share that in many, many multi-tenant small cell DAS that we have. We have Vodafone quite always and Wind too, okay. So we are very interested because they have to concentrate the MNO. I have to concentrate in the service that they have to deploy in the 5G environment and not in the infrastructure. We are solving a first and second layer problem, okay?

[Operator]

Next question comes from Mr. Luigi Minerva of HSBC.

[Luigi Minerva, analyst]

My question is on Iliad when do you expect them to have a material impact on your financials as a new tenant? And more generally, whether you think that having Telecom Italia as your key shareholder limits your strategic and business opportunities with other Italian operators?

[Giovanni Ferigo, executive]

Okay. About our -- first question about Iliad, okay, they are more than a potential customer for us. They will be very, very important. And we trust that we can seal a deal soon, okay? At the moment, we are managing some contractual aspects that -- or let me say, within few days, we can formalize the contract with them. I am very confident in this, okay? About opportunity, the question was, sorry?

[Luigi Minerva, analyst]

More generally, was having Telecom Italia as your controlling shareholder limits your business and strategic opportunities with other operators?

[Giovanni Ferigo, executive]

No, no. We have the MSA agreement about small cell okay, there is no limit. Because, let me say, multi-tenant solution is a, let me say, good solution for everyone, okay?

[Operator]

Next question comes from Mr. Henrik Herbst of Crédit Suisse.

[Henrik Herbst, analyst]

I just want to follow-up on your targets for small cells. In terms of the -- these multi-tenants equipment, do you expect that to happen in 2019? And also if you can talk a little bit about the financial impact? Do you think you can generate more revenues per small cell, given you can host more than one tenant? Or what's really the, I guess, that would be the upside of having multi-tenants equipment?

[Giovanni Ferigo, executive]

Okay. I'm quite sure that 5G-ready and multi-tenant small cell solution in the 3-months of '19 will be ready. And so we will -- we made a step back in order to make a big step forward. I explained before, only 4G mono-tenant at the moment could be very interesting for this -- the end of this year, but it will be a problem for the next year. So we prefer the step back to do -- to make a bigger step forward in the next year.

[Henrik Herbst, analyst]

Yes, I mean, in terms of the multi-tenant, do you think you can get more revenues out of each small cells? And in terms of cost, I mean, you said -- it was a while since you showed a slide, but you had some numbers in terms of CapEx per small cell and revenue expected, but these are pretty wide range, I guess, on the revenue for small cell, but how to start sort of '16 versus what you showed back then and up?

[Giovanni Ferigo, executive]

Okay, okay. More revenues, okay, it's a good possibility because, let me say, more tenants, more contract; more contract, more money, okay? We have to decide only the right price of the new tenants and the new small cell that is available in few months. But I think that the possibility is really concrete because the market worldwide is asking 5G-ready multi-tenant small cell, okay?

[Henrik Herbst, analyst]

Yes. I just don't understand that biggest step forward next year, is that just -- does that just mean, do you expect you've sold more than you originally planned in 2019 or biggest step forward is now more revenues essentially?

[Giovanni Ferigo, executive]

Yes. Okay. I repeat the concept. I step back today to make a bigger step tomorrow, okay?

[Operator]

Last today's question comes from Mr. Albert Pranger of Kempen.

[Albert Pranger, analyst]

With the progress you are making in the other revenues becoming from -- or coming from small cells, new sites and perhaps also from the backhauling, and I would like to understand whether you could share with us a breakdown of these revenues? And then, I mean, in terms of TIM versus third party, but also between small cells, new sites and backhauling, perhaps, just to get a grips on which of the new applications are already contributing to top line?

[Giovanni Ferigo, executive]

Okay. One, as always, we aggravate with figures because we want to give evidence of how all the novelty businesses we are developing are contributing. The size remains pretty small, obviously, when compared to acquisition business. That is why we are not disclosing the distribution inside this because it's important in terms of growth. It's becoming visible in terms of absolute numbers, but the overall contribution still remains minimal to our overall revenue figure. So honestly, providing a further breakdown, we don't think would add much of any information or content while knowing that the bulk of it is growing, is being taken care of, is assuming, as I said, an absolute number, which I think now starts to deserve some attention. It always did deserve in our case, but maybe now it's also more -- it's going to be more interesting to follow also from the outside. I would say, this is what I have to say on this.

[Albert Pranger, analyst]

Okay. That's too bad.

[Operator]

We have one more question from Mr. Giles Thorne of Jefferies.

[Giles Thorne, analyst]

It was a question around M&A. F2i is, obviously, now leading a breakup of EI Towers. And it looks like as part of that deal, the TowerCo assets will be put up for sale. So my question is, do you have any mandate from TI to pursue such acquisitions? And if there is any disagreement between INWIT and TI as to the attractiveness of that deal or any deal really, how does that gets reconciled?

[Giovanni Ferigo, executive]

Okay, okay. The -- this business that is evolving in F2i and EI tower could be that we will put in the market, but we are waiting for absolutely 1,000 telco towers because the other 3,000 about are broadcasting towers, okay? In the case that this company will put in the market 1,000 towers, telco towers, we will analyze this possibility. We are totally interested to increase as well. We discussed with team. And at the moment of the formal offer, we will analyze, and we will take the right decision.

[Giles Thorne, analyst]

Is there any further color you can give at this point because that asset base must be very well known to you now. Do you -- actually, I appreciate you don't want to give away any of your negotiating leverage. But do you think it's an asset base that's complementary to innovate at this point or any color, really?

[Giovanni Ferigo, executive]

I confirm that, it's very, very interesting. But now it's too early to give more details on that. It fits the portfolio -- with the amount of 1,000 tower, it fits perfectly with our portfolio, but it's too early to say. I can only underline that we are interested on this, okay?

[Michele Vitale, executive]

Thank you, Giles. Thank you, everybody. This was the last question for this second quarter 2018 result presentation. Thank you for joining us, for your interest in our company. We are pleased with these good result, and we hope you are too. As usual, feel free to call us for any additional question. Thank you, again, and have a great evening.

[Operator]

Ladies and gentlemen, the conference is over. Thank you for calling.