Interpump Group SpA

MIL:IP

Earnings Call Transcript 2020-Q2

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Interpump Second Quarter and First Half 2020 Results Conference Call. [Operator Instructions] After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Luca Mirabelli, Head of Investor Relations of Interpump. Please go ahead, sir.

[Luca Mirabelli, executive]

Thank you. Welcome, everybody. Good afternoon, Europe, good morning to those from America, and thank you for calling in. I am here to comment our H1 and Q2 results and answer your questions together with our Board member, Fabio Marasi, who is also CEO of GS-Hydro; and with the precious help of our CFO, Carlo Banci.

I do need to remind you that this is the second presentation since the beginning of the COVID-19 pandemic, and we are very proud of the numbers disclosed today as they are the successful result of a strong concerted effort to protect our business.

First of all, our subsidiaries grasped every chance to stay open, at the same time, accepting no compromise on the health and safety of our colleagues. We made the most of our exposure to many different industries and our trademark operational flexibility, so we could keep our attention and our production efforts focused on those customers whose business was up and running. Some core characteristics of our model such as vertical integration and the sizable stocks of raw materials allowed us to minimize disruption related to the supply chain. And finally, I am pleased to notice that even the performance of those companies that were taken on board only recently was really in line with the rest of the group.

Let's see the results of this effort in the half year numbers. Total consolidated group sales in the first 6 months were down a single digit, minus 9.1% at almost EUR 640 million. This is an encouraging result with the worst of the COVID-19-related disruption hopefully behind us. At unchanged perimeter and currency exchange, the organic decrease in sales was minus 18.7% in the period. Perimeter expansion gave a positive 9.7% contribution, while FX was negligible.

Going by division. Hydraulics registered a minus 9.4% in sales, of which minus 23.6% organic. Water-Jetting registered a much better minus 8.3%, almost entirely organic.

Due to the extension and duration of the lockdowns particularly in the month of April, it's no surprise that the second quarter felt the strongest impact of the pandemic on sales. Let's see the numbers for the second quarter. Total sales amounted to EUR 295.6 million, down 17.8% year-on-year and 25.9% organically. However, the monthly trend was somewhat encouraging with both absolute sales and year-on-year comparisons improving month-after-month in May and June.

Going by division. Water-Jetting proved more resilient with the decrease limited to minus 14.6%, almost unaffected by changes in perimeters; whereas Hydraulics registered an organic drop of minus 31.6%, which became minus 19.4%, thanks to the contribution of recent acquisitions, Reggiana Riduttori and Transtecno.

Looking as usual at organic sales by geography. As I noted, the minus 25.9% we mentioned for the quarter becomes a minus 26.5% due to a slightly negative effect of the currency exchange. In terms of geographical area, the differences in timing, severity and government approach to the pandemic are reflected in the local sales trends. Europe was down 29% in the quarter, of which Italy did a minus 35%. North America was down minus 26%, a bit better without the currency effect. Asia Pacific was down minus 6%, of which, and this is going to be interesting, Australia, plus 3%; and China, plus 8%. The rest of the world registered a minus 28%. Latin America more or less followed the same pattern as North America, a bit better with a minus 19%. As to India, as you could expect, it had the worst performance of all areas. What perhaps you may not expect is the magnitude of this drop, minus 75% compared to Q2 last year.

In terms of sales by application sector, COVID-19 had the strongest impact on large OEMs, which are typically customers of our Hydraulics division. These companies had no choice but suspend their operations, in some cases, for the entire quarter because of the level of complexity in their operations and in their supply chains. In some cases, they had facilities in India where the lockdown, in fact, as we noticed, was the strongest. This explains the minus 43% in earthmoving, minus 38% in lifting, minus 36% in construction, minus 33% in agriculture, minus 30% in trucks. As usual, there are 2 different patterns here with sales to truck manufacturers down 50% and other categories, like trash collection vehicles, sewer cleaning and other utility vehicles, which are closer to minus 10%.

Other sectors, which feature smaller or more dynamic customers, possibly with closer ties to those essential activities that were not suspended anywhere under the lockdown, show a decrease in the teens: industry, minus 19%; contractors, minus 18%; food, cosmetics and pharma, minus 16%. Cleaning was substantially flat at minus 2%. But the award for the best branding application sector goes once again to the cluster oil and gas, marine and offshore applications, which showed altogether a healthy plus 7% in the quarter, particularly thanks to sales by Hammelmann and GS-Hydro.

This is more or less all we can say about sales. However, I believe that in order to evaluate the resilience of the Interpump model in an extreme situation like the one we have been through, it is much more significant to take a look at margins.

We have suggested a number of times in the past that a negative trend in sales actually allows us to reduce the most expensive part of our production capacity which we heavily rely on in times of strong organic growth. I'm referring to outsourcing, extra shifts, overtime, temporary staff or second choice suppliers. This held true even in the third consecutive quarter of negative top line growth. So we closed the quarter with an EBITDA margin of 22% on sales, also helped by the fact that our most profitable division, Water-Jetting, was impacted more likely. This corresponds to EBITDA of EUR 64.9 million for the quarter, bringing the year-to-date figure to over EUR 139 million or 21.8% of sales, just 130 bps behind the very good first half of 2019.

Going by division, EBITDA margin in the quarter was 20.5% for Hydraulics and 24.5% in Water-Jetting. For the half year, this translates to 20% in Hydraulics and 25.2% in Water-Jetting.

Finally, nothing suggests the resilience of our margins better than a comparison between Q1 and Q2. Despite an organic decrease, going from minus 11% to minus 26% year-on-year, the EBITDA margin improved slightly.

Net income for the quarter came to EUR 30.2 million, bringing the year-to-date total to EUR 63.5 million with a tax rate of 27.1% so far.

Let's look at the most important items in the cash flow statement. Cash flow from operations was EUR 50.8 million, down EUR 21 million compared to the second quarter of 2019. CapEx in the quarter amounted to EUR 13 million, a few million less than you might have expected, but this small difference should not be regarded as a sign that any project has been canceled or discontinued or sacrificed but rather as a simple delay in spending brought about by COVID-related physical constraints.

As a consequence of negative organic growth but also, I have to say, as a result of our containment efforts, I'm very pleased to highlight that sales net working capital freed up EUR 18 million. As a comparison, last year, it absorbed EUR 17 million instead, and that was already a nice result for second quarter. So yes, Interpump has set yet another record for quarterly free cash flow generation at EUR 59.3 million, bringing the total at the half year point to nearly EUR 100 million, EUR 98.3 million to be precise. No one likes a year of strong negative growth, of course, but at least the effect on cash generation through the reduction of net working capital is once again confirmed for Interpump.

There were even more circumstances benefiting our final net financial position. The expense for acquisitions in the quarter was negligible with EUR 1.4 million. The share buyback was moderate, and its cost of EUR 4.3 million in the quarter was more than offset by the income resulting from the exercise of stock options, EUR 13.2 million. So despite the dividend payment, EUR 27.9 million, net debt went down by more than EUR 40 million during the quarter, settling at EUR 344.2 million at June 30. At the same time, the additional commitments for purchase of subsidiaries were worth EUR 62.4 million.

I trust that you share our satisfaction about how Interpump navigated the first half of a very challenging year. In my opening remarks, I listed the reasons why we are happy from an operational point of view, but the financial results were even more noteworthy. Margins that were above 20% and even increased from the first quarter to the second despite the trend in the top line and an unprecedented level of cash generated while safeguarding the dividend payments.

This -- while this completes the picture of the first half of the year, for the second half, clearly, expectations about Interpump's performance cannot be completely independent from what happens with the pandemics. However, we do not expect our production capacity to be constrained in the same way it happened in spring. Experience has demonstrated that it is possible to turn workplaces and factories into low-risk environments, and health care systems are much better prepared, especially in terms of testing and tracing.

Similar considerations also apply to our customers who are increasingly returning to placing orders and buying from us. After the upward trend registered during the second quarter, in July, both sales and order intake were higher than June. Not dramatically higher, mind you, but it was the fourth consecutive month of increase. As to August, as you know, August is not an average month, but according to preliminary data, I would say that sales for the month appear encouraging and order intake is reassuring.

On the other hand, we also have to notice something you already know, the very strong negative impact of the currency exchange. So we should keep an eye on the situation because if this situation with currencies persist until the end of the year, it will clearly have an effect on our H2 performances.

Back to the COVID impact, large parts of the economy were put in pause, so to say, but they were not destroyed. The availability of credit, if anything, has increased. Some of our customers might still be there wondering about whether this is the right time to resume activity or not, but they haven't disappeared and even their reference markets have not disappeared. In other words, this is not the year 2009. So not only Interpump, but I would say the entire -- or most of the manufacturing industry has the potential and the resources to sustain a full recovery at some point in the not-so-remote future. And the example of China shows that the recovery doesn't need to wait for the availability of a vaccine that hopefully will put an end to this entire story.

On top of this encouraging perspective, there's M&A, where scouting, negotiations and perspectives might have been disrupted in the very short term by the travel limitations but whose strategic value is certainly not affected by the pandemic. As we already commented in the past, it's even possible that uncertainty works in our favor in terms of willingness to sell.

With this, I think we have reached the end of my presentation, and I would like to thank you for listening so far. The line can now go to the operator for the beginning of the Q&A session.

[Operator]

[Operator Instructions] The first question is from Matteo Bonizzoni with Kepler.

[Matteo Bonizzoni, analyst]

I have 3 questions. The first one is on the margin trend particularly in Hydraulic. In the second quarter, we have seen a better margin versus the first one, so 20.5% versus 19.6%, so 90 basis points better despite the fact that, as you highlighted in your presentation, the organic decline in Hydraulic was more than double compared to Q1, so minus 32% versus minus 15%. So can you a little bit more elaborate on this remarkable performance in relation to mix, cost control? And do you believe that overall an EBITDA margin in Hydraulic in the region of 20% could be sustainable also for the second half of the year? This is the first question.

Related to the first question, the second one, can you quantify the savings from the Cassa Integrazione in the second quarter in million euro? And how much could it be for the third quarter, I guess, much lower?

And the final question, I was looking at the consensus estimates on Bloomberg just now. For the full year, we were EUR 1.31 billion revenues with EUR 272 million of EBITDA. I guess that given also the ForEx evolution, revenues could be, I would not say challenging but probably more challenging than the EBITDA, that EUR 272 million, given the performance on the margin there which we -- you had in the first half looks achievable. So can you a little bit comment about your expectation compared to consensus?

[Luca Mirabelli, executive]

Okay. Thank you. I think we can answer the first 2 questions together. Savings from Cassa Integrazione for the second quarter had -- and Cassa Integrazione in Italy and any comparable, let's say, wage held to in other jurisdictions amounted to 2.3% in the second quarter, which means that our 22% would have been close to 20% even without that help.

As to the third quarter, I am not aware of the final requirements to have more access to have still -- to maintain the rights to access the extraordinary extended Cassa Integrazione. Last time I checked, it was a threshold based on the decrease in sales during the first half of the year. And I would say that a good part of our Italian subsidiaries still would qualify for that, mainly all those in Hydraulics basically without -- with the exception of one company in the cylinder business. Of course, the point is that we hope that there will be less and less necessity of Cassa Integrazione. So one thing is the possibility. The other thing is the necessity.

I am afraid that -- certainly not me, but I'm afraid no one still here has a number to answer your question about expectations for Q3 because it will heavily depend on the business. But it's -- I think it's fair to say that we would still have access to it, at least in good part for our Italian business.

Speaking of the evolution of the margins from Q1 to Q2, there's a point. We have always discussed how our cost structure is not cast in stone, so it's subject to change evolution and flexibility along the time. Now the first answer that comes to my mind is that the difference between Q1 and Q2 is that in Q2, we had 3 more months to act. And so what you are seeing is actually the results of the actions that we took, whereas in the first quarter, we were clearly caught by surprise. There was nothing we could do to prepare to -- for what was about to come.

So yes, in terms of the absence of any one-off or any strange event, we have already cleared the consideration about Cassa Integrazione, I don't think there is any other element that would suggest otherwise. Anyone at this table is free to interrupt me if they have anything to add. But apart from that, I think that the 20% would be sustainable. Specifically, your question was about Hydraulics, and as I mentioned, most companies in hydraulics would still qualify for Cassa Integrazione in Italy.

The third question, the tough one, I would say, I agree with all the considerations that you made about consensus, about the durability of that, about the fact that perhaps the consensus on sales looks more challenging than consensus on EBITDA. I also pray that we share the same visibility on that because it will clearly depend not on the -- not even on the pandemic but on the psychological effect of the pandemic and on the economic effect of the pandemic.

Now I still think that it is fair to say and it is also compliant with what the Minister of Finance said in interview yesterday, the worst is behind us. And so I'm not overly pessimistic. Of course, we must keep an eye on currency exchange because it can take away a few points or even more than a few points of performance. So clearly, that will be beyond any control by the company. But I would -- yes, I would confirm what you just said. I don't -- I feel I don't have anything to add.

[Operator]

The next question is from Domenico Ghilotti with Equita.

[Domenico Ghilotti, analyst]

First question, I would like to come back to your guidance. So I'm not sure I fully understand the trend that you are seeing in terms of orders because from the press release, I understood that you are still running below last year level, so not yet normalized in terms of sales, but you are still -- but you are starting to see some trend in order intake that is suggesting that normalization is underway. So could you give us some more color and maybe also comment on if the recovery is broad-based or is linked to some geographies, to some end markets and some divisions more than others? So this is the first question.

[Luca Mirabelli, executive]

Okay. The 2 things are not in comparison because, clearly, a pickup in order intake would be preliminary to normalization of sales in the following months. When I say normalization, of course, I'm talking about the new normal, so a normalization, a normality that could make us draw a line and assess what the impact of COVID-19 was and start from there. As of today, we are still below the last year's number. We are very, very close, substantially at the same level of last year, but considering the addition of the acquired companies. So clearly, this is not an analyst's idea of back to normal. In terms of normality, you would probably expect a strong plus sign. But of course, also in connecting to the previous question, we don't need a plus sign, an organic plus sign in order to make it to the guidance. Otherwise, I wouldn't feel entitled to consider that a possibility.

So in terms of the development, the order intake had its minimum in April, of course, and it went increasing month-after-month. To be honest, August is not a normal month, so order intake in August was not stronger than in July. That would be upward. But the book-to-bill ratio did go up even in August. So we are not worried about erosion of portfolios, let's say, let's put it this way.

In terms of distribution, there is clearly a very strong prevalence of the Water-Jetting sector, and this is not surprising considering what we have said about the structure of customers in -- the typical structure of customers in both sectors. And geographically speaking, we -- of course, the best performance still comes from the Far East, the Pacific area. The good results of China seem to be going on. So anyone that was worried that the pickup after COVID in China could be a flash would have to think twice because it appears to be a structural recovery trend. I'm afraid there is not a lot more than I can add about this. But again, order intake is the first telltale sign of good things to come. So...

[Domenico Ghilotti, analyst]

And for Europe compared to the U.S., no big differences. I saw the sales number were not so different. Are you seeing any difference in the recovery in Europe compared to the U.S.?

[Luca Mirabelli, executive]

No. Not really, not really. My impression, remembering what happened 4 years ago, is that the U.S. might be in for a bit of stop and go connected to the elections. This has nothing to do with who's going to win the elections. This is quite neutral in this case. But some decisions or investment decisions might be postponed while waiting for clarity and so on. This is something that we have typically seen in every election year in the States.

On the other hand, it is also possible that the contraction of the market seen so far would overshadow any election stop and go. But so far, we don't see any major difference in trend between Europe and North America.

[Domenico Ghilotti, analyst]

Okay. Second question is on the profitability. I'm trying to understand, you were mentioning, clearly, the labor schemes -- sorry, the social schemes or support on the profitability. Can you comment on any other significant temporary saving that was, let's say, supporting Q2 and will be over during the second half?

[Luca Mirabelli, executive]

Well, I can't think of anything with a timer on it that would be automatically over in the second half, because every action that we take, every step that we take is -- will last as long as necessary until we see the signs of a recovery. So clearly, there are the usually almost automatic ones. Term contracts are not renewed after expiration. And as we mentioned in the remarks, the outsourcing, overtime and extra shifts are reduced. They're not down to 0, by the way, so there is still -- I hope we don't need to leverage on that, but there would still be some meat on the bone. And that can stay at this level as long as necessary. It's not something that we are forced to give up at some point.

Again, the social support is the only thing that doesn't really depend on us, but I don't see any sign of governments willing to lift that before the economy is at least showing the signs of a pickup. So I wouldn't be overly worried by that. But there is really nothing I can think of. Maybe Fabio, who manages actual companies unlike me, has something to add.

[Fabio Marasi, executive]

No. Domenico, I agree totally with Luca. What is also important to say on this respect is that there is nothing exceptional or nothing extraordinary in these results because the improvement from Q1 and Q2, in particular in the Hydraulics, is well spread all around the companies. And one particular aspect that I would like to mention is the very, very good performance of the newly acquired companies in the gearbox sector, the Reggiana Riduttori and Transtecno.

Then, of course, in this period of significant uncertainties may not be the main focus or the main attention, but it's important for you to understand and to note that we are continuously improving the companies and in particular the companies that we have just recently acquired. And this is absolutely true for Transtecno and Reggiana Riduttori that, of course, didn't need significant restructuring but just some improvement or some strategic decision that has already been taken in terms of international organization of some subsidiary abroad. And the first results are really, really encouraging in this respect. And this is the only factor that I would like to note in this particular environment.

[Luca Mirabelli, executive]

Yes. Thank you. Thank you, Fabio. Actually, I have to confirm that the contribution from the perimeter extension is actually above average, which is not very obvious if you think of the numbers that were announced in the press releases when the companies were acquired, but they are already above our -- the rest of our companies in terms of EBITDA margin.

[Domenico Ghilotti, analyst]

So you are referring -- initially, you are referring to the top line that was also performing at least in line with the group in terms of organic performance.

[Luca Mirabelli, executive]

My initial remark has to do with the top line, which is, let's say, in line or better than the group. And possibly as a consequence of this as well -- well, this as mostly as a consequence of the simple adjustments that Fabio was mentioning, the EBITDA margin of those companies is already visibly above the one they had upon acquisition.

[Domenico Ghilotti, analyst]

Well, congratulation. So this year, you were able to improve the margin. Okay.

[Luca Mirabelli, executive]

I don't take any credit for that, but I will definitely pass that on.

[Operator]

The next question is from Alessandro Tortora with Mediobanca.

[Alessandro Tortora, analyst]

I have 3 questions, if I may. The first one, if you can come back to, let's say, the situation you explained before on the performance by area and if you can focus on India. I understood clearly the full impact of the pandemic here. Can you give us an idea if you have replaced any contingency plans here if the company has been experiencing any, let's say, disruption in terms of operation? So if basically there is a plan B moving some production capacity given the situation.

The second question is on the CapEx. You mentioned before that, for sure, on the spending side, CapEx has been a bit, let's say, delayed. So if you can give us an idea that the CapEx spent in the first half would be, for instance, double the -- in the second part of the year.

And the last point is on the free cash flow side. I understood that we are clearly now in September. Considering, let's say, the performance on the working capital, the CapEx side, can you give us any idea of how sustainable this, let's say, record free cash flow you got in the second quarter and, of course, give any idea on the guidance on the -- let's say, or indication, okay, on the net debt side for the full year?

[Luca Mirabelli, executive]

Okay. I will start addressing all your questions, and then anyone is welcome to pick up on me.

The performance by area and specifically India, there is -- it's no secret that India had one of the most severe outbreaks of COVID-19 and one of the most, I would say, inefficient measures to contain that. Lockdowns measure were either not very well respected or not achievable because of the specific situation of the way India living is organized and so on.

The good point here is that as of today, our, let's say, constraints for production in India are not there anymore. So as of today -- of course, I cannot promise that it will go on forever. But as of today, we do not have any practical limitation, any closed plants or any, let's say, fully suspended activity. Clearly, it will take a while before this has a visible impact on the demand side. But as far as we are concerned, we are not the constraining factor anymore. Our production capacity is not a constraining factor.

So for now, we don't see the need for any contingency plan. We did have some on very minor aspects. For example, we manufacture in India the -- some components for INOXPA products that are assembled in Spain. And of course, we made plans for manufacturing those components elsewhere. As far as I know, we didn't have to implement that because the situation improved in time to keep things as they are. Another example would be WALVOIL. WALVOIL shifted some supplies for Korea from India to Italy. So they were sourced in Italy instead of being sourced in India temporarily.

But once again, this is not -- should not be regarded as an exceptional measure because that supply had already gone back and forth between Italy and India based on workload balancing of our production site. So I don't think that we ever needed -- or that we are ever going to need any major contingency plan for India. Remember that India serves Indian customers. So if India shuts down, our -- we don't need production there, really. The production that we need there is very, very limited basically to the 2 things that I mentioned.

Fabio, can you say anything about CapEx?

[Fabio Marasi, executive]

CapEx, in the first half, we had a total CapEx of about EUR 28.5 million. Then when we think about the full year, I believe that something around EUR 60 million or slightly below EUR 60 million is something that can be the performance.

And the third question was about the free cash flow and in particular the sustainability of this very high level of the free cash flow. I would say, Alessandro, 2 things. The first is that, of course, this very positive and very high number is strongly related to the exceptional circumstances. And then nobody is expecting or betting that this situation will last forever. And then we cannot think about this level of free cash flow conversion if we think about a normalized situation on a 5-year period.

What is also important to say, I believe, is that the positive effect of the negative performance in terms of organic growth and then the reduction in working capital that we have seen in the first half of the year is not ended because in particular for what concern the inventories level, it can take time to adapt, normalize the level of inventories to the new situation.

And then on a material point of view, I expect that we will have a further positive contribution from reduction of working capital that are in particular related to the reduction of inventories in the next few months. But of course, everybody expect that sooner or later, we will have a rebound of this very tough situation, and then the working capital contribution may not be expected to this level anymore.

[Operator]

[Operator Instructions] The next question is from Michele Baldelli with Exane BNP Paribas.

[Michele Baldelli, analyst]

Just 2 questions around probably -- more actually about the M&A strategy and what you see on the market in terms of willingness by the sellers and also pricing and also timetables. If, let's say, you think it's an argument more that probably is for early 2021 or, let's say, we could expect something already in 2020?

[Luca Mirabelli, executive]

Yes. The M&A strategy of the group has not changed for this situation. And this, I believe, is the most important statement, the most important point that I can underline. You have seen that we have closed 2 very small acquisitions in the month of July despite all the difficulties, also technical and logistics -- logistical difficulties. It's very important to underline that we always have a lot of dossier on our table, and we are continuously negotiating, scouting and moving forward in approaching companies that may fit well in our group and in our M&A strategy.

Then on our side, the strategy has not changed. The commitment is total. And also considering the very high, the very strong cash flow generation, we are more than willing to deploy this cash flow generation in M&A in a consistent way with what we have done in the past. Regarding the market, regarding the willingness of the seller or the shareholders to sell, I believe that we may say that what happened is encouraging more entrepreneur to decide to close a transaction or to -- in particular, to enter in a bigger group. If someone wanted to sell 100% and maximize the proceeds, of course, this is not the best year because of the results of 2020 that are affected by the pandemic and by the COVID situation.

If you are looking for an industrial partnership and you are looking on long-term partnership in which probably you sell the majority on day 1 and you stay at the helm of your company, maintaining minority shareholders in the company as well, probably, this is the right time to decide to finalize a transaction. And then the possibility for us, considering also the kind of transaction and the kind of acquisition that we are usually looking for, probably this situation will end up with an increased number of opportunities on a midterm perspective.

What is difficult now is partly the logistical issue. What is difficult now is to define the right price for companies that are being significantly affected by the pandemic and that in 2020, we will have results that are significantly lower than the one in 2019. And then finding a compromise, finding an agreement on the numbers, also considering some adjustment that can be made, having or discussing now situation or a now solution based on 2021 may take longer time. And then what I will say is that I will not exclude any other transaction, any other acquisition during the year -- in the year 2020, considering the high number of dossier or discussion that we have open and we are actively pursuing. But on general terms, I would say that finalizing a transaction will require more time because of the discussion on prices.

Regarding the willingness, I would say that the willingness is, in general, increased in the market and in particular will be increased in entrepreneur or in companies that are looking for industrial partnership and not financial partnership. This is what we are seeing today.

[Operator]

The next question is from Raphaël Moreau with Amiral.

[Raphaël Moreau, analyst]

Yes. Sorry, my question has been answered. Thank you.

[Luca Mirabelli, executive]

Okay. Thank you.

[Operator]

[Operator Instructions] Gentlemen, there are no more questions registered at this time.

[Luca Mirabelli, executive]

Okay. So thanks, everybody, for attending. Our next appointment will be November 10 for the Q3 results. I hope to see you all on the line. And of course, we are available until then for Investor Relations activity. Hopefully, we'll also resume road shows at some point. So I hope to see some of you in person as soon as possible. Thanks on behalf of everyone here. Thanks for attending, and I wish you a nice rest of the day.

[Operator]

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.