Leonardo SpA

MIL:LDO

Earnings Call Transcript 2018-Q1

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining Leonardo First Quarter 2018 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Raffaella Luglini, EVP External Relations Communications, Italian Institutional Affairs, Investor Relations and Sustainable of Leonardo. Please go ahead, madam.

[Raffaella Luglini, executive]

Good afternoon, ladies and gentlemen, and welcome to our First Quarter 2018 Results Conference Call. I'm Raffaella Luglini. Today our CEO, Alessandro Profumo; and our CFO, Alessandra Genco, will take you through our progress so far this year, the Q1 results and the outlook for full year 2018. We will then welcome your questions.

I will now hand you over to our CEO.

[Alessandro Profumo, executive]

Many thanks, Raffaella. Good afternoon to everybody, and welcome to our first quarter call.

You can see that in first quarter, we have made a good start to the year in line with our expectations. Order intake was a solid EUR 2.2 billion. Group revenues were EUR 2.5 billion driven by Helicopters improvement. EBITA of EUR 153 million with a return on sales at 6.2%. Free operating cash flow negative by EUR 1.1 billion due to the traditional seasonality and the profile of the EFA Kuwait contract leading to net debt at EUR 3.6 billion. In helicopters, we are seeing clear, positive signs and good progress of recovery. We are achieving higher volumes with 29 new units delivered in the first quarter with revenues of EUR 750 million in the quarter. Then Alessandra will comment on IFRS 15 that will have an impact on Helicopters. We are seeing a healthier market outlook, and we booked EUR 611 million of new orders. And we have stated increasing profitability in line with our targets.

It is, of course, early in the year, but we are comfortable with our recent full year guidance, and we are also delighted with the major Qatar NH90 helicopter contract signed in March this year. As you know, these are not yet implied in the guidance. It is certainly a great start to the year. And we are working out to make it effective and book it by the end of the year.

We are fully focused on executing our industrial plan across the globe, so we have taken further steps to enhance our commercial approach. We are seeking to exploit growing customer services opportunities and on the back of our international network. We have made a significant agreement with Italian unions that reduce headcount, allowing vessel for growth and allowing beneficial changes in our still [ nascent ] states. And we have launched a plan to support cost transformation and optimization of our supply chain.

Moving to next slide, before I hand over to Alessandra to cover the first quarter results and outlook, I just want briefly to touch on these areas of progress and execution of our industrial plan.

Let me just remind you of the key points and the essence of our industrial plan which we set out for you back in January. We are well positioned for a positive market outlook. As you know, our reference market is expected to grow 6% accumulated annual growth over the period 2019, 2022, and we do expect to move in line with this market. We expect to leverage one company model to address commercial opportunities increase market penetration and order intake with a target of EUR 70 billion accumulated orders over the period 2018-2022 and the book-to-bill equal or above 1x, achieving healthy revenue growth of 5% to 6% in the period, accumulated annual growth, supported by our strong backlog and the new orders.

It's about steady improvement in profitability, 8% to 10% average EBITA growth over the period 2018-2022. And back to double-digit growth in 2020 from recovery in helicopters and solid contribution from the other division, from operating leverage and tight cost control, investing for growth and investing well in the range between EUR 600 million and EUR 700 million per year, also accelerating cash generation from 2020, and all in the frame of our strong capital expansion. So we set this out a few months ago and we have already been busy progressing some key actions to execute the plan. Just in order to remember what are the key steps we have already taken.

Shall we start from the leverage on the One Company and one voice model? We have already created the chief commercial organizational structure, which is in place aimed at coordinating international networks across the group and strategic campaigns and also exploiting opportunities in the customer support business. We are going through all of them. Today, we have launched Leonardo International, which is an optimization of the 15-year presence at the international, in order to be more effective and more efficient. But the key is to be more effective towards clients and stakeholders. Clearly, we have to improve as well, in terms of efficiency and effectiveness of the marketing customer support initiative through a one voice approach and [indiscernible]. This is a key step in order to achieve the EUR 70 billion orders we expect to have during the period of the plan -- new orders. Second, we remain very focused on exploiting customer support opportunities. We can use our international network and logistic apps to provide logistic support and become global partner to customer, increasingly favoring a turnkey proposition from us. And this is good business with good long-term profitable contracts, adds to revenue visibility over the medium and long-term. And by the end of our plan in 2022, we have the target of having 25% of our revenues coming from the support -- the customer support activities -- orders and revenues. Clearly, this is a key target because value of this activity is significantly [indiscernible]. Separately, a significant presence that has been the signing of an agreement with unions here in Italy for the headcount reduction through early retirement. So this will involve 100 -- 1,000 employees, plus 65 officers who will be eligible for retirement in the 4 years, following the schedule 2018, 2019 implementation period. This agreement will be accretive to Leonardo performance from 2019 onwards and allow us to change the skill mix in our workforce, leading to increased competitiveness and profitability, support in the technological transformation and sustainable development for the company. It is an important step towards the full implementation of our 2018-2022 industrial plan, maintaining critical skills and finding the new ones we needed to meet the requirements of the market. And as Alessandra will mention, this will increase our expected restructuring cost this year by an estimated one-off amount of EUR 150 million, EUR 200 million with no impact on cash and positive NPV in the range of EUR 100 million. So it's the NPV that moved.

The last recent development, which I want to mention during the industrial plan presentation, we also stated, we would focus attention on strict cost control through clear action while building for the future. We are focusing on cost transformation and supply chain. We appointed Matt [indiscernible], former Chief of Staff. We're all focusing on optimizing the cost base to achieve profitability targets of the plan. To put some perspective here, we are looking at a cost base in the range of EUR 10 billion to EUR 10.5 billion on which we will work. [indiscernible] here will be applied across all our businesses and in all cost categories, and that means better procurement, which accounts for more than 50% labor cost and controllable cost. And this will be implemented with clear accountability and rigorous cost control. So we have been busy, and that's a clean start.

Now I want to hand over to our CFO, Alessandra, to talk more about the first quarter results. Alessandra?

[Alessandra Genco, executive]

Thanks, Alessandro, and good afternoon, everybody. It's a month and a half since we spoke to you in the full year 2017 results presentation. And as you know, although Q1 is important to us, as we look to start the year in the right way, it is as always, our smallest contributor to the full year, and it's important to bear this in mind. We will, therefore, keep our prepared remarks relatively short. I would like to start with a few remarks on IFRS 15. As we have said before, the impact is not significant for Leonardo at group level, increasing 2017 revenues by only circa 2% and EBITA by circa 1%. To support comparisons with the prior year, we have restated the Q1 2017 results and key data for the full year 2017. As required by this new accounting principle, the restated 2017 results recognize revenues in civil helicopters at the point of delivery and not on the basis of cost incurred as previously. The impact on full year '17 is modest while the spacing between quarters in helicopters is notably different. This is mainly due to an unusually low number of deliveries in Q1 of '17, only 12, and an unusually high number in Q2 of '17, 69 deliveries.

As you know, full year 2017 deliveries for new helicopters were 145 new units. For this year, we expected higher level of deliveries compared to last year and although still not linear on a quarterly basis, we do expect some weighting towards the second half of 2018.

Now moving to Q1. In overall terms, we have made satisfactory start of the year. It's on track with our plans and we're pleased that we're seeing evidence of helicopters having started the year on the right foot. We're seeing higher order intake and confirmed customer interest in our products and a solid number of deliveries well above Q1 of last year. Our free operating cash flow was negative EUR 1.1 billion as our traditional seasonality means that we are cash negative in Q1. And aside from the usual seasonal effect, free operating cash flow is also influenced by the profile of EFA Kuwait where, as you know, we are now at the stage of absorbing cash and building up working capital compared to last year Q1, when we were benefiting from the early receipt of the second tranche of the advance payments.

So we have made a satisfactory start to the year, which we are pleased and we are broadly where we expected to be. That said, I want to emphasize that it's still early in the year, and Q1 is always the smallest contributor to the full year. We remain comfortable with the full year 2018 guidance that we gave you in January.

Now let's go through the key numbers for the quarter. First, looking at order intake, overall, we saw a solid level of order intake at EUR 2.2 billion. Some highlights for the quarter. We are pleased with the EUR 611 million of helicopters orders, up by 33% compared to Q1 of last year. We booked orders for 45 machines compared to 21 in 2017, mainly AW109, AW119, but also AW139, AW169 and AW189, with a steady contribution of customer support. So good progress on helicopters and we have not included here the recent NH90 Qatar contract, which we still plan would become effective before year-end as Alessandro told you earlier.

All in all, this achieved order intake of EUR 723 million. Lower year-on-year because of the very strong Q1 '17, which included the EFA support major order that we got then. And we are pleased with the order of 4 M346 trainer aircraft from the Polish air force. This air force already operates the machine and the new order underpins the strong market position and market recognition for this great product. In aero-structures, we got orders for the supply of 100 fuselage sections of the B787 and 21 fuselage for ATR.

In defense electronics, we had total order intake in Q1 of just under EUR 1 billion, broadly flat on the previous year, given some ForEx effect. We saw satisfactory order intake in DRS, which is reinforcing its position in a growing market.

Overall, looking at Q1 for the group, we feel it's a solid performance, and we can take comfort from the potential pipeline of opportunities.

Now speaking about revenues. We saw a solid performance also at revenue level. EUR 2.5 billion, 3.8% higher than last year, despite a negative ForEx effect of EUR 75 million. Key points for us here are: helicopters achieving Q1 revenues of EUR 750 million, a year-on-year increase of 28%; in unit terms, we delivered 29 new helicopters compared to only 12 in Q1 2017. This provides evidence of improved execution and a good start on the recovery path. The 29 deliveries comprised AW139, AW169, AW189, AW149, mainly for EMS and offshore clients. We have heard that at group level, the impact of IFRS 15 is not material. But there is impact on the civil side of helicopters. So you need to be careful in making year-on-year comparisons because of the IFRS restatement.

As I said earlier, there is a more pronounced impact on a quarterly basis in 2017, caused mainly by short-term volatility of deliveries over quarters. The low level of deliveries in Q1 of '17 is reflected in the restatement. You can see in the appendix that restated helicopters' revenues were EUR 587 million, compared to the EUR 711 million reported. It means that there is some distortion in the quarterly comparison.

What I want you to focus on are 2 key points: year-on-year quarterly comparisons are not that meaningful, especially early in the year; what really matters, though, is that we can be confident of the underlying progress in the helicopter business, where we're seeing good progress, good customer interest across our markets for our products. And these markets are for us, and that's where we want to be. We are pleased with Q1 order intake. And we are pleased with the improving execution and deliveries achieved in Q1. We remain confident of our plan to improve margin through managerial focus in executing our industrial plan and addressing the issues we had last year.

Looking at the other business. In defense, electronics and security, we saw Q1 revenue substantially in line with last year despite an adverse ForEx effect and overall volumes fairly flat.

Aeronautics was also broadly in line with last year with Q1 revenues of EUR 639 million and with positive benefits of EFA Kuwait in the Aircraft Division, offsetting winding down of EFA domestic and aero-structures.

Moving now on to profitability indicators and EBITA. First quarter EBITA was EUR 153 million, flat on a restated basis with Q1 of last year. That translates into a return on sale of 6.2% versus 6.6% for Q1 of last year. And again, this return on sale was higher than our expectations. Helicopters achieved EBITA of EUR 53 million. All in all, a good start to the year. It is also ahead of last year on a restated basis, although, I would caution you about the year-on-year quarterly comparison for the reason we discussed before.

Then, in defense electronics, we saw a solid start to the year with EBITA of EUR 73 million, in line with expectations. Again, it's early in the year to draw too much from the overall result as well as the year-on-year comparison. We are confident about the solid performance of this business. We're seeing here the impact of a change in mix resulting from lower EFA domestic work as well as some new development programs that while incurring today lower margins, we'll position the group to get contracts for many years to come once these development programs turn into production contracts. And some delays in defense systems. On top of that, DRS was impacted by the costs associated with its important T-X Trainer deals.

In Aeronautics, EBITA was EUR 47 million. We saw a good performance in aircraft, with strong profitability, with higher volumes from EFA Kuwait, offsetting the lower contribution from EFA domestic and the weaker aero-structures performance.

Lastly, space contributed EUR 7 million. Overall, we are satisfied with the start to the year in terms of EBITA and profitability. Now moving to the below the line items. You can see the below the line items in Q1 were flat year-over-year with EBIT and net results very much in line with last year. You heard earlier Alessandro mention the important agreement recently reached with Italian unions. It would allow headcount reduction, and it will allow us to invest more for growth and change our skill mix.

This agreement will be accretive to Leonardo's performance from 2019 onwards. The NPV is positive for circa EUR 100 million, but it will also mean that we expect additional one-off restructuring cost in the range of EUR 150 million to EUR 200 million in 2018 over and above our previous expected level of EUR 150 million.

Now moving to full year 2018 guidance. I would like to finish by reaffirming that we remain comfortable with the full year guidance we gave you earlier this year. You can see it again on the slide here. We're pleased with the start to the year. We're also very pleased with the NH90 contract from Qatar, which we're working to make effective and hope to book by year-end.

So now to conclude, it's earlier in the year and it's only Q1. The key point is that we are encouraged by clear evidence of progress in our helicopter business, and we remain very focused on exploiting market opportunities across the group both domestically and especially internationally and deliver on our industrial plan. Thank you, and I will now hand over to Q&A.

[Operator]

[Operator Instructions] The first question is from Monica Bosio of Banca IMI.

[Monica Bosio, analyst]

The first one is on helicopter. The feeling is that things are going definitely better. Just to check, if I understood well, the second quarter, due to the change in accounting principles, will be tougher due to a more unfavorable comparison base. But you are going to project an increase in deliveries by year-end. I know maybe it's too early to ask, but can you give us more precise indication of the expected deliveries by year-end and maybe a composition of the deliveries?

[Alessandra Genco, executive]

Monica, your understanding is correct. In fact, the helicopters are performing well. The quarterly change, as we said, may be a little bit misleading. With respect to 2018 performance in deliveries we can confirm that we expect to have higher deliveries than 2017. And in particular the second half, we'll see -- the second half of the year, we'll see higher deliveries than the second half of 2017.

[Monica Bosio, analyst]

Okay. And in terms of composition, just to check feeling on the mix.

[Alessandra Genco, executive]

Well, yes, the mix is quite balanced. What we see is that there is, on the 139, a continued strong market interest. And we're also seeing renewed interest from offshore operators on the 189 as well as on the 169 from EMS operators, from VIP, from a wide range of customers who were actually really looking for this kind of machine which is setting the rise in the right segment of the market.

[Operator]

The next question is from Nicholas Cunningham of Agency Partners.

[Nick Cunningham, analyst]

I wanted to ask about some of the sort of bigger macro developments that we've being seeing recently that might affect you. The first one of which is the effect of the lack of a majority government in Italy and whether that impacts on the ability, if you like, to launch new programs to give you orders or to help in [indiscernible] campaigns. The second big development obviously the much weaker dollar. And I'm wondering how that flows through and affects you this year and in the medium term. And then final point, Turkey has been a really good market for Leonardo and for Italy, more generally, historically. But clearly, relationships between Turkey and Europe deteriorated substantially. Does that have any impact on any of your expectations, obviously, particularly for some of the aeronautics programs?

[Alessandro Profumo, executive]

Okay. Many thanks for the question. I'll answer the third one, the first and the third one and then I'll give the floor to Alessandra for second one on the euro-dollar exchange ratio. Government [indiscernible] with us when we have international campaigns. For the time being, we are not having any impact from the fact that there is no government because for the campaigns we are working on today, started some years or months ago. So clearly, we are concluding negotiations which were ongoing since sometime and we are very focused on that. In the long run, hopefully, we'll have a stable government. So I think that, lacking that, we have the Qatar contract in 2018. The other large contracts which we are working are mainly driven by U.K. because the EFA contract in Qatar and then in Saudi. So we don't have any major negotiation -- ongoing major, when I'm saying major, billions. And you are -- we have minor negotiation on which we are not seeing any impact until now. Then, shall we see what will happen in the second half of the year in terms of stability of the government? Turkey, we continue to have a very positive relation, industrial relation with Turkey. Clearly, with the -- on that, we are supported by our foreign office. So today, we are not seeing any slowdown in our relation with this country.

[Alessandra Genco, executive]

Nick, yes, with respect to dollar, as you know, we have our budgets at 120 exchange rate dollar euro. However, the sensitivity of our key financials to movements in the exchange rates are not that material, specifically, in the case of the euro-dollar, in case of a movement from 1.20 to 1.30, we would have approximately 1.50 of revenues in '17 of EBITA delta -- negative delta, so not anything major.

[Nick Cunningham, analyst]

Could I just follow up on the Italian funding issue? Are there any development programs like the [indiscernible] helicopters, for example, which are waiting, if you like, policy decisions? Or are they also -- have they also got to a stage where they're going to happen anyway?

[Alessandro Profumo, executive]

For us, today the key program which is under discussion -- the government is to the PH, into HH, so it's a drone, which is under discussion, but it doesn't have a material impact of economics. So the other programs that are already funded, so like the NASA since 3 years there was the stability low the allocation of funds -- long-term funds to the defense sector. So we have a very good visibility on which are the programs that were funded since 3 years before, a very extended period of time. Then on a yearly basis, there is the implementation of this fund allocation. But we don't know the impacts around that.

[Operator]

The next question is from Christophe Menard of Kepler Cheuvreux.

[Christophe Menard, analyst]

I have three questions. The first one is actually a detail; it’s about the restructuring cost. Initially, you said, I think, at the industrial plan presentation that without the additional restructuring cost that you've mentioned today, the guidance was EUR 150 million. So I just want to understand, on top of this, this coming EUR 50 million which is related to the retirement agreements you've negotiated or is it another EUR 150 million? And just to clarify, I didn't get it right on the phone. And the second question is actually on the timeline to get the NH90 contract in Kuwait to be effective, I understand, it will be before the end of the year, I mean, that's your expectation. How should we think about prepayment? I mean, should you get prepayment by -- in '18 and in '19? Or can you communicate anything on this?

[Alessandra Genco, executive]

Kuwait or Qatar? Sorry.

[Alessandro Profumo, executive]

Qatar.

[Christophe Menard, analyst]

Yes, yes, sorry. It's Qatar, my apologies. NH90, yes. And the last question was C series renegotiation. I understand it's part -- I mean, clearly, in terms of IFRS structure, this is part of what you intend to do to improve, I would say, profitability, but how are those negotiations shaping up because my understanding is that Airbus actually wants to drive the cost down. So how it's shaping up at the moment on this front?

[Alessandro Profumo, executive]

Okay. Starting from Article 4, I will start then I will give the floor to Alessandra. During the presentation of the plan, we said we are considering to negotiate with the trade unions early retirement plan related to the Article 4 [Foreign Language] Fornero so called. And we have been crystal clear in saying the numbers are not included in the plan. Now we have signed the agreement with the trade unions so we can -- we have an eye of visibility on what is going on, so how many people mainly are in the plan. As said before, there are 1,100 persons, employees plus 60, 65 officers. This will have a one-off restructuring cost of between EUR 150 million to EUR 200 million. That will not -- so I've said will be booked this year, will not have a cash impact. So in terms of cash flow, there are no changes. The NPV of this negotiation is positive for circa EUR 100 million, as Alessandra said. But we have been crystal clear during the plan presentation because we can announce such restructuring when are closed with the trade unions. So we said we are considering them. We started the negotiation. On the other side, we are very positive because we have been capable in less than 2 months to close the negotiations with the trade unions, which is clearly very important. And also Alessandra, you want to add something but I think that I said almost everything. Qatar, we do expect to have the effectiveness of the contract this year. The down payment will be in 2018, not in 2019. Then, when we will have the effectiveness of the contract, we'll provide you all the information on the numbers. Clearly, it is important to say that the Qatar contract the day will be effective, will change in a positive way our guidance, mainly on orders and -- no sorry, on orders and on cash flow, not on revenues or EBITA because the first delivery is in 2022 of helicopters. We will book revenues in the meanwhile because this is a military contract so we will give you all the information, but not -- there are no impact in terms of revenues in 2018. The last question was on Bombardier. On Bombardier, we are in a frozen situation because there is handover between Bombardier and Airbus. You have seen that Airbus just appointed the program manager. We don't know exactly when this handover will happen, we expect in June so we will have to discuss with Airbus.

[Operator]

The next question is from David Perry of JP Morgan.

[David Perry, analyst]

I've got 2 questions, but the first one has 3 parts, if that's okay. I'm just a little confused on all of this restructuring. So if I can just give you A, B and C, if that's okay. First of all, the amount of the restructuring seems very, very large to me. It seems like EUR 150,000 per head, which seems very generous for a manufacturing company. So I just wonder if you can comment...

[Alessandro Profumo, executive]

Sorry, this is a law. So you have to -- there are people that are 4 years from retirement. And it's the law which is assigning what you have to pay. And so it's a voluntary retirement, you give them 80% of the salary, if I remember correctly, so is the period of time. So there are no elements for lowering this number.

[David Perry, analyst]

Okay, that's fine. So part B, you say it's not cash, but it must be cash. So are you saying...

[Alessandro Profumo, executive]

No, no.

[David Perry, analyst]

There's something else is offsetting it because you must be giving people cash to leave.

[Alessandro Profumo, executive]

The cash on the people will exit from the company, but Alessandra can provide you all the details.

[Alessandra Genco, executive]

Yes, so on 2018, there is going to be a one-off charge to the income statement. Then, what happens is that we will continue to pay the salary at a lower level, at 80% of the ordinary salary of the employee that will leave the company. So that's -- the delta is basically a policy between what's the salary that we would have paid to the person, plus also the social charge that typically are linked to labor laws in Italy. And the 80% amount that we were referencing. So there is a positive delta that generates a saving at a cash flow level year-over-year. Compared to a plan that already has an increase in headcount that was factored into the Industrial Plan from Day 1.

[Alessandro Profumo, executive]

Sorry, you book the one-off time then you pay the salary utilizing this fund that we have created. The cash out is paid month after month when the people leave. So that in reality, you're going to have any cash out when you created the fund and then you use the fund in order to pay the salary. So it's like you don't have anymore the charge on the profit and loss. So [indiscernible].

[David Perry, analyst]

And that goes out in 2019, does it?

[Alessandra Genco, executive]

No, it's over 4 years, David. Four years is the window through which the employees that have adhered to this plan can progress their right. And the cost, P&L, entirely one-off in '18, up to 1,100. It is an assumption. It's the maximum number of people that can boldly adhere to this plan. Can be lower, it cannot be higher.

[David Perry, analyst]

Okay. That's very helpful. And then part C, you said there's 100 NPV, so you sent out -- the IR team sent out a consensus very recently of 1189 EBIT for '19. Should we just add 100 to that?

[Alessandro Profumo, executive]

No, NPV net present value of the total operation in the 4 years so it's not...

[Alessandra Genco, executive]

So, yes, so the NPV is over the industrial plan period, not over a single year. It's the sum of all the cash benefits that year-over-year will be generated by the restructuring plan. So no one year addition to cash flow, no one single year, but multiple years.

[David Perry, analyst]

Okay, and then my second question is a bit tricky. But just one thing, I'm a bit confused by is your EBITDA fell, but your EBITA is flat in Q1. And I think that also was something we saw in Q4. It seems as if now we've had 2 quarters with a step change lower in your DNA, is there any reason for that? What will it be going forward?

[Alessandra Genco, executive]

No specific reason. There was onetime item that we booked in March of last year that increased the DNA.

[David Perry, analyst]

So DNA has always been 5% to 6%. But is the new normal 4% going forward, 4% of sales?

[Alessandra Genco, executive]

Yes, 4%, 4.5%.

[David Perry, analyst]

Okay. Not sure why that is, but I can speak with the IR.

[Alessandra Genco, executive]

It is we said, there was an exceptional amount. The CFO has just said, there was an exceptional higher amount in Q1 '17. So if your question is whether this will be lower Q1 '18, the answer is, yes. Okay?

[David Perry, analyst]

So we assume 4% for the full year?

[Alessandra Genco, executive]

We don't express -- the KPI we use is only [indiscernible] sales, but if you use that, it can be, as the CFO said, 4%, 4.5%, rather than 5% plus as you mentioned before. If you want to model that way. I hope this is helpful.

[Operator]

[Operator Instructions] At this time, there are no questions registered.

[Alessandra Genco, executive]

Good. So with this, we thank you for participating. The IR team remains at your disposal for follow-up questions, of course. Thank you.

[Alessandro Profumo, executive]

I know that there are, in the near future, different conferences. So I hope that we'd have the opportunity to meet personally in the [indiscernible] conference pretty sooner than the Mediobanca one. So as usual, the IR team is more than happy to interact with you, but they're just saying that for me and for Alessandra clearly. So many thanks for your attention. The first half results with the -- at end of July, we'll announce the date pretty soon and so thanks for your attention.